[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
REGULATORY IMPROVEMENT ACT OF 2007
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
ON
H.R. 3564
__________
SEPTEMBER 19, 2007
__________
Serial No. 110-157
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
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COMMITTEE ON THE JUDICIARY
JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California LAMAR SMITH, Texas
RICK BOUCHER, Virginia F. JAMES SENSENBRENNER, Jr.,
JERROLD NADLER, New York Wisconsin
ROBERT C. ``BOBY'' SCOTT, Virginia HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina ELTON GALLEGLY, California
ZOE LOFGREN, California BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas STEVE CHABOT, Ohio
MAXINE WATERS, California DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts CHRIS CANNON, Utah
ROBERT WEXLER, Florida RIC KELLER, Florida
LINDA T. SANCHEZ, California DARRELL ISSA, California
STEVE COHEN, Tennessee MIKE PENCE, Indiana
HANK JOHNSON, Georgia J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois TOM FEENEY, Florida
BRAD SHERMAN, California TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota
Perry Apelbaum, Staff Director and Chief Counsel
Joseph Gibson, Minority Chief Counsel
------
Subcommittee on Commercial and Administrative Law
LINDA T. SANCHEZ, California, Chairwoman
JOHN CONYERS, Jr., Michigan CHRIS CANNON, Utah
HANK JOHNSON, Georgia JIM JORDAN, Ohio
ZOE LOFGREN, California RIC KELLER, Florida
WILLIAM D. DELAHUNT, Massachusetts TOM FEENEY, Florida
MELVIN L. WATT, North Carolina TRENT FRANKS, Arizona
STEVE COHEN, Tennessee
Michone Johnson, Chief Counsel
Daniel Flores, Minority Counsel
C O N T E N T S
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SEPTEMBER 19, 2007
Page
THE BILL
H.R. 3564, the ``Regulatory Improvement Act of 2007''............ 2
OPENING STATEMENTS
The Honorable Linda T. Sanchez, a Representative in Congress from
the State of California, and Chairwoman, Subcommittee on
Commercial and Administrative Law.............................. 1
The Honorable Chris Cannon, a Representative in Congress from the
State of Utah, and Ranking Member, Subcommittee on Commercial
and Administrative Law......................................... 4
WITNESSES
Mort Rosenberg, Esq., Specialist in American Public Law,
Congressional Research Service (CRS), Washington, DC
Oral Testimony................................................. 7
Prepared Statement............................................. 9
Jody Freeman, Esq., Professor, Harvard Law School, Cambridge, MA
Oral Testimony................................................. 17
Prepared Statement............................................. 19
Dr. Curtis W. Copeland, Ph.D., Specialist in American National
Government, Congressional Research Service (CRS), Washington,
DC
Oral Testimony................................................. 33
Prepared Statement............................................. 35
Jeffrey S. Lubbers, Esq., Professor, Washington College of Law,
American University, Washington, DC
Oral Testimony................................................. 49
Prepared Statement............................................. 51
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Chris Cannon, a
Representative in Congress from the State of Utah, and Ranking
Member, Subcommittee on Commercial and Administrative Law...... 5
Letter from Justice Stephen Breyer, Supreme Court of the United
States, submitted by the Honorable Linda T. Sanchez, a
Representative in Congress from the State of California, and
Chairwoman, Subcommittee on Commercial and Administrative Law.. 78
Letter from Justice Antonin Scalia, Supreme Court of the United
States, submitted by the Honorable Linda T. Sanchez, a
Representative in Congress from the State of California, and
Chairwoman, Subcommittee on Commercial and Administrative Law.. 82
Letter from the American Bar Association (ABA), submitted by the
Honorable Linda T. Sanchez, a Representative in Congress from
the State of California, and Chairwoman, Subcommittee on
Commercial and Administrative Law.............................. 84
APPENDIX
Material Submitted for the Hearing Record
Prepared Statement of the Honorable John Conyers, Jr., a
Representative in Congress from the State of Michigan,
Chairman, Committee on the Judiciary, and Member, Subcommittee
on Commercial and Administrative Law........................... 93
Response to Post-Hearing Questions from Mort Rosenberg, Esq.,
Specialist in American Public Law, Congressional Research
Service (CRS), Washington, DC.................................. 94
Response to Post-Hearing Questions from Jody Freeman, Esq.,
Professor, Harvard Law School, Cambridge, MA................... 96
Response to Post-Hearing Questions from Curtis Copeland, Ph.D.,
Specialist in American National Government, Congressional
Research Service (CRS), Washington, DC......................... 105
Response to Post-Hearing Questions from Jeffrey S. Lubbers, Esq.,
Professor, Washington College of Law, American University,
Washington, DC................................................. 120
REGULATORY IMPROVEMENT ACT OF 2007
----------
WEDNESDAY, SEPTEMBER 19, 2007
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 3:04 p.m., in
room 2141, Rayburn House Office Building, the Honorable Linda
Sanchez (Chairwoman of the Subcommittee) presiding.
Present: Representatives Conyers, Sanchez, Johnson,
Lofgren, Delahunt, Cannon, Jordan, Keller, and Franks.
Staff present: Susan Jensen, Majority Counsel; Daniel
Flores, Minority Counsel; Adam Russell, Majority Professional
Staff Member.
Ms. Sanchez. This hearing of the Committee on the
Judiciary, Subcommittee on Commercial and Administrative Law,
will now come to order. And I will recognize myself for a short
opening statement.
Today's hearing provides an opportunity for us to
officially begin one important project, as well as to formally
bring to a close a related project. Today we begin the process
of reauthorizing and securing funding for the Administrative
Conference of the United States. To that end, I especially
commend my colleague, the Ranking Member, Mr. Cannon, for his
leadership in introducing H.R. 3564, the ``Regulatory
Improvement Act of 2007,'' and for his deep and abiding
commitment to revitalizing the conference.
[The bill, H.R. 3564, follows:]
Ms. Sanchez. Today we will also consider the final
installment of a 2-year study known as the Administrative Law
Process and Procedure Project for the 21st Century, which was
sponsored on a bipartisan basis by the Judiciary Committee. Let
me first explain the project.
Through the guidance of the Congressional Research Service,
particularly Mort Rosenberg, Curtis Copeland and T.J. Halstead,
the Committee undertook a comprehensive analysis of the state
of administrative law in our Nation. Over the course of this
project, this Subcommittee held six hearings, participated in
three symposia, and sponsored three empirical studies.
Last December, an interim report in excess of 1,400 pages
was issued, detailing various findings along with
recommendations for legislative reform and suggested areas for
further research and analysis. In particular, this report
addressed: the agency adjudicatory process; public
participation in the rulemaking process; the role of science in
the regulatory process; the utility of regulatory analysis and
accountability requirements; and congressional, presidential
and judicial review of agency rulemaking.
One of the project's most enduring legacies, however, will
undoubtedly be how it underscored the absolute and urgent need
to have a permanent, neutral, non-partisan think tank that can
dispassionately examine administrative law and process and that
can make credible recommendations for reform, namely the
Administrative Conference of the United States.
Although reauthorized in the 108th Congress with
overwhelming bipartisan support, the conference has not been
funded since, and its current reauthorization expires next
week. In addition to supporting the reauthorization of ACUS, I
hope my colleagues on this Subcommittee will also join me in
the next step, obtaining funding for the conference once and
for all.
As I am sure the witnesses at today's hearing will explain
in great detail, an extremely nominal investment to fund ACUS
will unquestionably redound in billions of savings in taxpayer
dollars. Accordingly, I look very much forward to today's
hearing and to receiving the testimony from all our witnesses.
I would now like to recognize my colleague, Mr. Cannon, the
distinguished Ranking Member of the Subcommittee, for any
opening remarks he may have.
Mr. Cannon. Thank you, Madam Chair. I think the panel is
quite familiar with my views on the issue. And so, with your
permission, I would like to submit my statement for the record
and want to just reiterate the one thing you said. You said
many things that I agree with, but getting this thing funded is
actually really the next big important step, as well as the
reauthorization for which we are here today. So thank you for
the hearing. And if you will accept my statement for the
record, I will submit it.
Ms. Sanchez. Without objection, so ordered.
[The prepared statement of Mr. Cannon follows:]
Prepared Statement of the Honorable Chris Cannon, a Representative in
Congress from the State of Utah, and Ranking Member, Subcommittee on
Commercial and Administrative Law
I would like to extend a warm welcome to the witnesses today, and I
thank the Chair for scheduling this hearing. I hope that our work today
leads promptly toward an authorized and appropriated Administrative
Conference of the United States.
ACUS was established in the 1960s to foster uniformity,
effectiveness and fairness in federal administrative procedure. It was
a small but productive agency that fulfilled its mission well.
It served innovatively as a ``private-public think tank,''
conducting basic research on how to improve the regulatory and legal
process.''
It facilitated the interchange among administrative agencies of
information useful in improving administrative procedure.
It collected information and statistics from administrative
agencies and published reports evaluating and discussing procedural
improvements.
It served as a resource for Members of Congress and congressional
committees.
The initial jurisdiction was intentionally broad, and ACUS was the
key implementing agency for the Administrative Dispute Resolution Act,
the Negotiated Rulemaking Act, the Equal Access to Justice Act, the
Congressional Accountability Act, and the Magnusson-Moss Warranty-
Federal Trade Commission Improvement Act.
ACUS developed and promoted procedures implementing the Negotiated
Rulemaking Act, which encourages consensual resolutions accounting for
the needs of affected interests.
It recommended a model administrative civil penalty statute that
has served as the basis for dozens of pieces of legislation.
It facilitated judicial review of agency decisions and the
elimination of technical impediments to such review.
It helped to focus attention on the need for the federal government
to be more efficient, smaller and more accountable.
It actively promoted information-technology initiatives, such as
developing methods by which the public could participate electronically
in agency rulemaking proceedings.
The list goes on and on.
I cannot imagine what kind of regulatory structure we would
confront had it not been for ACUS' contributions.
I know that, whatever that structure might have been, it would
certainly have been much more expensive and more cumbersome.
As Richard Wiley, former Chairman, Commissioner and General Counsel
of the Federal Communications Commission, once explained:
``ACUS, along with the Office of Federal Procurement Policy,
convinced successfully some 24 agencies to initiate [Alternative
Dispute Resolution] and to try to use it in disputes with private
sector companies and government contracts. Given the fact that you have
$200 billion going into the Government procurement program every year,
the potential savings in that one program are simply enormous.''
To take just one specific agency, the Social Security
Administration estimated that the Conference's recommendation to change
that agency's appeals process generated approximately $85 million in
savings.
Those figures, of course, were all in yesteryear's dollars.
What was the cost to the taxpayer? The last appropriation for ACUS
was merely $1.8 million per year.
Against this background, it is easy to understand the observation
of former White House Counsel C. Boyden Gray that ``as long as there is
a need for regulatory reform, there is a need for something like the
Administrative Conference.''
Numerous other authorities, experts and luminaries have also
weighed in on behalf of ACUS, including Supreme Court Justices Scalia
and Breyer and prominent members of academia. One law school dean
perhaps put it best, urging that: ``if the Conference didn't exist, it
would have to be invented.''
It also is easy to understand, and to laud, the bipartisan support
that exists for the Conference's reauthorization and re-funding.
As I said at the outset, I hope that this hearing is the start of
finally bringing ACUS back. It can only help us to reinvigorate the
centuries-old effort to help the government govern best by governing
least, and to do so by identifying and helping to deploy the 21st
Century methods that can help us do that in ways we never could before.
I yield back the remainder of my time.
Ms. Sanchez. And I just want to thank our witnesses for
being patient. I know we started this hearing somewhat late due
to the vote schedule on the floor. We are expecting votes in
approximately 40 minutes, so we are going to try to get through
as much of the testimony as possible.
With that, I am pleased to introduce the witnesses for
today's hearing. Our first witness is Mort Rosenberg, a
specialist in American public law in the American Law Division
at CRS. For more than 25 years, Mr. Rosenberg has been
associated with CRS. Prior to his service with that office, he
was chief counsel to the House Select Committee on Professional
Sports. And he has held a variety of other public service
positions. In addition to these endeavors, Mr. Rosenberg has
written extensively on the subject of administrative law.
Our second witness is Professor Jody Freeman. Professor
Freeman teaches administrative law, environmental law, and
natural resources law and is the director of the Harvard Law
School Environmental Law Program. Her work in administrative
law focuses on public-private collaboration and governance,
regulatory innovation, negotiated approaches to regulation, and
privatization. Prior to joining Harvard Law School, Professor
Freeman taught for 10 years at my alma mater, the UCLA School
of Law, where in 2004 she received the law school's Rutter
Award for Excellence in Teaching, and in 2001, was voted
professor of the year.
Our third witness is Dr. Curtis Copeland, a specialist in
American national government at CRS. Dr. Copeland's expertise,
appropriately relevant for today's hearing, is Federal
rulemaking and regulatory policy. Dr. Copeland has previously
testified before this Subcommittee, and he is one of three CRS
experts who are assisting the Subcommittee in the conduct of
its administrative law project.
His contributions to the project are deeply appreciated.
Prior to joining CRS, Dr. Copeland held a variety of positions
at the Government Accountability Office over a 23-year period.
And our final witness is Professor Jeffrey Lubbers.
Did I pronounce that correctly?
Professor Lubbers, if I am smirking, it is because today is
National Talk Like a Pirate Day. And landlubber is what comes
to mind when I hear your name. I apologize.
Professor Lubbers is a fellow in law and government. He
holds expertise in administrative law, government structure,
and procedures, regulatory policy and procedures.
From 1982 to 1995, Professor Lubbers was the research
director of the Administrative Conference of the United States.
He has published two books, ``A Guide to Federal Agency
Rulemaking'' and ``Federal Administrative Procedures Source
Book.''
He is also the editor of the American Bar Association's
(ABA) Developments in Administrative Law and Regulatory
Practice. In addition to teaching, Professor Lubbers is also an
administrative law consultant whose clients include numerous
Federal agencies, law firms, public interest groups, and
international organizations, including the OECD and World Bank.
I want to thank you all for your willingness to participate
in today's hearing. Without objection, other Members' opening
statements will be placed into the record. And we will ask that
the witnesses please limit their oral remarks to 5 minutes.
Your written testimony in its entirety will be placed into the
record.
For those of you not familiar with the lighting system,
when you begin your testimony, the light will appear as green.
When you have 1 minute remaining, it will warn you by changing
to yellow. And then when your time expires, it will turn red.
If the light should turn red and you are in the middle of a
thought, we will allow you to finish off that thought before
proceeding to the next person's testimony. After each person
has presented his or her testimony, Subcommittee Members will
be permitted to ask questions subject to the 5-minute limit.
At this time, I would invite Mr. Rosenberg to proceed with
his testimony.
TESTIMONY OF MORT ROSENBERG, ESQ., SPECIALIST IN AMERICAN
PUBLIC LAW, CONGRESSIONAL RESEARCH SERVICE (CRS), WASHINGTON,
DC
Mr. Rosenberg. Thank you very much, Madam Chairman, Mr.
Cannon. Good to be here again and with you. And I am honored to
be here to talk about the reauthorization and funding of the
administrative conference.
This last 3 years has been very rewarding, even though it
was arduous. And the commitment that the Committee has had to
this has been wonderful.
I thought that I might concentrate my remarks with respect
to two empirical studies that CRS commissioned. And I thought
it would be useful to devote the time to that because of in
describing the difficulties encountered by CRS in these
studies, it underlines and underscores the need for a
reactivated ACUS.
ACUS' past accomplishments in providing nonpartisan,
nonbiased, comprehensive, and practical assessments with
respect to a wide range of agency processes, procedures and
practices are very well documented. During the hearings
considering ACUS' reauthorization in 2004, C. Boyden Gray, a
former White House counsel during the George G.W. Bush
administration, testified before your Subcommittee in support
of reauthorizing ACUS, stating that, ``Through the years, the
conference was a valuable resource providing information on the
efficiency, adequacy and fairness of the administrative
procedures used by administrative agencies in carrying out
their programs.'' This was a continuing responsibility and a
continuing need, a need that has not ceased to exist.
Further evidence of the widespread respect of and support
for ACUS continued. Work was presented by Supreme Court
Justices Scalia and Breyer, both of whom worked at ACUS prior
to their judicial careers.
Justice Scalia stated that ACUS was an approved and
effective means of opening up the process to Government to
needed improvement. And Justice Breyer characterized ACUS as a
unique organization carrying out work that is important and
beneficial to the average American at low cost. Examples of the
accomplishments for which ACUS has been credited range from
simple and practical such as the publication of time-saving
resource material to analyses of complex issues of
administrative process and the spurring of legislative reform
in those areas.
I would here note that ACUS' established credibility and
nonpartisan reputation opened doors at Federal agencies and
allowed access to ACUS-sponsored research, to internal
operational information that normally would not have been
available otherwise. Justice Scalia remarked, ``I think the
conference's ability to be effective hinged in part on the fact
that we were a Government agency. And when we went to do a
study at an agency, we were not stonewalled.''
``Very often a member of that agency was on our own
assembly. And so, the agency would cooperate in the study that
we did. I think it is much harder to do that kind of a study
from the outside. The agencies tended to look upon us as
essentially people from the executive branch trying to make
things better.''
Justice Breyer concurred, commenting that, ``the American
Bar Association's administrative law section's attempts to do
studies of agencies,'' commenting on that. What the conference
could do that the Ad Law section couldn't do is just what
Scalia is talking about. They could get access to the
information inside the Government and the off-the-record
reactions of people in charge of those agencies. So it produced
a conversation that you can't have as easily just through the
ABA.
Justice Scalia underlined that point. I was chairman of the
ad law section for a year. And there is a big difference
between showing up at an agency and saying ``I am from the
American Bar Association, I want to know this, that, and the
other,'' and coming from the administrative conference, which
has a statute that says agencies shall cooperate and provide
information. It makes all the difference in the world.
The CRS experience with its two sponsored empirical studies
was disappointing for the very reasons alluded to by the
justices. Professor William West testified before this
Subcommittee of the reluctance of most agencies to provide him
with information vital to his study on public participation at
the development stage of an agency rulemaking proceeding.
His requests for information were often met with reluctance
and suspicion. And his most valuable contacts with
knowledgeable officials were on deep background. With this
potential obstacle in mind, when CRS considered a comprehensive
study of science advisory panels in Federal agencies to
determine, among other things, how many there were, are, how
were members selected, how issues of neutrality and conflict of
interest are handled and the impact of advisory body
recommendations on agency decision making, we provided the
research group at Syracuse University's Maxwell School of
Public Administration with letters of introduction from the
director of CRS and you, Chairman Cannon, as well as the
Ranking minority Member of the Subcommittee, to try to assure
agency officials of their bona fide and neutral academic
purposes.
Ms. Sanchez. Mr. Rosenberg, I apologize. But your time has
expired. The time goes quickly.
Mr. Rosenberg. I would just conclude that----
Ms. Sanchez. If you would like to conclude.
Mr. Rosenberg [continuing]. We tried very hard to get
entree for these people, and we couldn't do it. It is the
imprimatur and the reputation of ACUS that works and that has
reestablished these kind of empirical studies will work.
[The prepared statement of Mr. Rosenberg follows:]
Prepared Statement of Morton Rosenberg
Ms. Sanchez. Thank you. I appreciate your testimony.
At this time I would invite Professor Freeman to begin her
testimony.
TESTIMONY OF JODY FREEMAN, ESQ., PROFESSOR,
HARVARD LAW SCHOOL, CAMBRIDGE, MA
Ms. Freeman. Madam Chair and Members of the Subcommittee,
thank you for the invitation to testify today. Let me just
applaud your efforts and your leadership, both Chair Sanchez
and Ranking Member Cannon. This is an area of inquiry and study
that is not the most exciting for everyone. I understand that
as an administrative law professor. But the truth is nothing is
more important than ensuring that our Government agency
policies are fair, effective and efficient.
Today, very briefly in my short time, I will describe the
results of a study that I conducted in cooperation with, or at
the behest of, CRS that is quite a comprehensive study of the
judicial review of agency rules across all of the circuits over
an 11-year period. More broadly, I will make two points.
The first is the desperate need--and I am not overstating--
the desperate need for research and study of the administrative
process to help Congress engage in meaningful reform. And the
second point, the benefit to be gained by funding an
independent agency like the administrative conference, which
can produce, sponsor and organize that kind of research.
Just very briefly to make the case, the need for empirical
data is striking. There are many misconceptions about the
administrative process that could lead Congress down the wrong
path to reform and could lead to a vast waste of taxpayer
dollars.
Agencies promulgate thousands of rules each year. The rules
have, as you well know, the force and effect of law. They have
a dramatic impact on our economy and society. And yet our
empirical knowledge of how well agencies do this is very thin.
We do not know, for example, how effective agencies' rules
are. In fact, the people who study the administrative process
don't yet agree on what a measure of effectiveness would be.
We don't know how much time agencies spend on average
promulgating rules. We don't know if cost benefit analysis and
other analytic mechanisms used by the president or by Congress
work and achieve the results they purportedly are designed to
achieve. We have a lot of mechanisms, both in terms of
executive orders and statutes that require ante-analysis of
rulemaking, but very few post-analyses of how well these things
work.
There are many myths about the administrative process that
lasts for years. My favorite is one that circulated and was
cited in congressional testimony that 80 percent of EPA rules
are challenged. It was made up.
Imagine if Congress had gone and tried to reform
administrative process at the EPA with a totally fabricated
statistic like that. This is what keeps me awake at night.
Again, a few more. Among other things we don't know well
are rules implemented. Do they achieve their goals? Are
agencies doing better in their use of science? What would
better mean? Are agencies doing things with data collection
that could be copied, absorbed by other agencies if we could
just generalize across them and figure out what best practices
are?
Let me turn briefly to our study. The goal of the study was
to--and this is a study I conducted with my coauthor, Joe
Doherty, of your alma mater, Chair Sanchez, UCLA School of Law.
He can't be here, but he is an empirical expert and certainly
available to answer questions later.
The goal was to study the rate at which rules are
invalidated in whole or part, the reasons why, whether there is
bias on the panels of judges that review these rules, and
whether there is anything else about, any patterns we could
detect, in terms of who files these lawsuits and who tends to
win. And we have submitted for the record a much more detailed
description.
And I am sure you are relieved to know I won't take you
through the tables. I don't have time. Our data show that the
clear majority, 58 percent, of challenged rules are upheld in
their entirety. And nearly 80 percent are upheld in whole or
part, only 11 percent invalidated in their entirety. This is
again all rules across all circuits for an 11-year period, the
most comprehensive study we are aware of.
The results are generally consistent over time across all
the agencies and unaffected by the composition of the judicial
panels reviewing the rules. And I can go into any detail you
wish if you are interested in questions. But the implication of
this is simply that we don't think the rulemaking process is in
crisis.
Agencies are not seeing their rules invalidated at alarming
rates, nor are there disturbing patterns in terms of alleged
bias of partisan judicial panels. Nor are we seeing skewed
results in terms of the likelihood of success of you are a
corporate versus an environmental versus a Government plan.
We are contesting past studies. That is, some scholars have
suggested that one or another agency was having great
difficulty defending its rules. One study said EPA rules are
entirely or mostly upheld only 33 percent of the time. That is
not what our data says.
Our study challenges that picture is inaccurate. And this
leads me to my statement in support of ACUS. There remains a
significant percentage of rules that are invalidated in whole
or part, which suggests we need additional study about why, why
do rules fail, and what reasons do judges invalidate them, why
do judges invalidate them.
This leads me to the need for ACUS. I am to stop also.
Ms. Sanchez. You can finish your thought.
Ms. Freeman. I have three things to say about ACUS. It is a
bargain, especially at the funding levels being considered by
this Subcommittee.
For the last 12 years, we have missed it desperately. I
could give you examples of what ACUS could have done, but
wasn't allowed to do. And third, there is no substitute,
whether within the Government, OMB, GAO or universities for
what ACUS can accomplish. Thank you.
[The prepared statement of Ms. Freeman follows:]
Prepared Statement of Jody Freeman
Ms. Sanchez. Thank you so much for your testimony,
Professor Freeman.
I would now invite Dr. Copeland to proceed with his
testimony.
TESTIMONY OF CURTIS W. COPELAND, PH.D., SPECIALIST IN AMERICAN
NATIONAL GOVERNMENT, CONGRESSIONAL RESEARCH SERVICE (CRS),
WASHINGTON, DC
Mr. Copeland. Thank you, Madam Chairman, Members of the
Subcommittee. I am pleased to be here today to discuss recent
rulemaking and administrative law issues that the
Administrative Conference, or ACUS, might have been able to
address as well as issues that it might address in the future.
Although it is ultimately impossible to know what effect
ACUS would have had on these issues, it is not far fetched to
say that ACUS would have made a difference in our understanding
and ability to deal with them.
One such issue occurred within the last month. On August
17th, the Centers for Medicare and Medicaid Services sent a
letter to State health agencies requiring them to use specific
procedures to ensure that the States' Children's Health
Insurance Program, or SCHIP, does not substitute for coverage
under group health plans. Although CMS said it was just
providing guidance to the States, some observers considered
this letter a rule that should have been submitted to Congress
under the Congressional Review Act. Therefore, they said, the
letter's requirements could not take effect.
Had ACUS been available, it could have provided
professional, objective, non-partisan advice to both Congress
and CMS about whether the letter's requirements had crossed the
line into rulemaking and, therefore, avoided at least this part
of the SCHIP controversy. More generally, during the last
decade ACUS might have published studies, convened panels and
possibly issued authoritative guidance to all Federal agencies
regarding this aspect of the rulemaking process.
ACUS could have also been a player regarding an issue that
came before this Subcommittee this year, Executive Order 13422,
and its changes to the presidential regulatory review process.
One of the most controversial elements of this executive order
required agencies to designate presidential appointees as
regulatory policy officers who appear to have been given
enhanced authority to stop agency rulemaking.
However, little was known about these policy officers'
identities or their responsibilities. Even OMB did not know
whether the new RPO designees were different than the ones
serving prior to the executive order. Had ACUS been around
during the last 12 years, it could have conducted studies
indicating how many of the policy officers were already
presidential appointees and determine whether the new designees
represented a significant change. That information may not have
diffused the controversy, but it might well have led to a more
informed discussion.
Another possible issue for ACUS is electronic rulemaking,
which supporters say has the potential to increase the
democratic legitimacy, improve regulatory policy decisions and
decrease administrative costs. However, the Bush
administration's effort to create a centralized electronic
docket for all Federal agencies has generated strong
congressional concern about its funding and management, and
concerns from others about the functionality of the docket's
application. ACUS could have provided Congress and the
Administration advice on all these issues, bringing together
leading experts to ensure compliance with applicable legal
requirements and that the new docket system is cost-efficient,
effective and user friendly.
Civil penalties is another issue that ACUS could have
examined more recently. In 1996, the year after ACUS was
eliminated, Congress enacted legislation requiring agencies to
examine their civil penalties for at least once every 4 years,
and if necessary, adjust them for inflation. However, as GAO
reported 3 years ago, certain provisions in the legislation
actually prevent agencies from adjusting their civil penalties
for inflation.
As a result of this lack of action, the deterrent value of
civil penalties have declined sharply over the years. Had ACUS
been available, it might have been able to call attention to
these problems while the legislation was being considered in
Congress or could have identified the problems during
implementation more rapidly. My written statement identifies
several additional broad areas that ACUS could have addressed,
including public participation in rulemaking, science in
rulemaking, the effectiveness of analytic requirements placed
on the agency rulemaking agencies, privacy protection,
information access, presidential directives. The list goes on.
Also ACUS could have helped in the development of what Neal
Kerwin from the American University called the
professionalization of rulemaking, ultimately leading to a
defined career path. Although many organizations within and
outside of Government have studied these kinds of issues, ACUS
appears to have been unique in its ability to serve as a
nonpartisan, deliberative forum and as a long-term source of
unbiased, objective information on a range of topics.
Madam Chairman, that concludes my prepared statement. I
would be happy to answer any questions.
[The prepared statement of Mr. Copeland follows:]
Prepared Statement of Curtis W. Copeland
Ms. Sanchez. Thank you, Dr. Copeland. And I noticed you
came in under the 5-minute mark. I appreciate that.
At this time I would invite Professor Lubbers to begin his
testimony.
TESTIMONY OF JEFFREY S. LUBBERS, ESQ., PROFESSOR, WASHINGTON
COLLEGE OF LAW, AMERICAN UNIVERSITY, WASHINGTON, DC
Mr. Lubbers. Thank you very much, Madam Chair and Ranking
Member Cannon, Members of the Committee. I am very pleased to
be here today to discuss with you the continuing need to
reauthorize the Administrative Conference of the United States,
ACUS.
I first want to applaud the Committee's leadership in this
bipartisan effort that led to the successful effort 3 years ago
to enact the Federal Regulatory Improvement Act of 2004, which
reauthorized ACUS until the end of this current fiscal year.
Unfortunately, no appropriations were made available to
reconstitute ACUS in the past 3 years, so another
reauthorization is necessary.
Due to the work of this Committee in fostering studies and
forums on the importance of the administrative process, I
believe that at this time the foundation has been laid for a
successful appropriations effort. So I strongly support a new
2007 version of the Regulatory Improvement Act, H.R. 3564. And
I also want to salute the excellent statements and all of the
work of my fellow panelists who have been so instrumental in
providing assistance to the Committee in this effort.
As you mentioned, I spent 20 years of my professional
career working at ACUS from 1975 until it lost its funding in
1995. I truly believe it was one of the Federal Government's
most cost-effective institutions. And it has been sorely
missed.
I have written three short articles supporting the revival
of ACUS, which I am appending to this testimony. In my years at
ACUS I saw just how cost-effective it was. We had a small staff
and a small budget, but a large membership of agency
representatives and private sector experts who donated their
time in order to see consensus on some of the most vexing
administrative procedure problems of the day, problems that the
rest of the Government did not have the time to think about in
such an ordered way.
Our small budget was leveraged into savings many times over
for the Government due to streamlined procedures, efficiencies
in government-wide operations, and the sharing of information
among agencies about procedural problems. Perhaps more
important, the members were drawn from a wide variety of
backgrounds and interest groups.
It was heartening to see interest group lawyers who are
normally strong opponents in the world of litigation, lobbying
and politics come together in a spirit of cooperation to seek
consensus on process. I firmly believe that the connections
forged in the ACUS meetings helped increase civil discourse and
reduce the level of partisanship in legal Washington, as the
testimony of Justices Scalia and Breyer demonstrated, also the
support for reviving ACUS by both the American Bar Association
and the Center for Regulatory Effectiveness.
Mr. Copeland, just 2 weeks ago I had a reminder of how ACUS
is missed. I was asked to provide testimony to a small,
independent agency that was created in 2003, the U.S. Election
Assistance Commission.
This agency was delegated the important function to issue
standards and provide grants to the States for improvements in
election processes around the country. Of course, as a Federal
agency, it is covered by numerous cross-cutting procedural
statutes such as the APA, Freedom of Information Act, Privacy
Act, Sunshine Act, Paperwork Reduction Act and Government
Performance and Results Act, just to name a few, many of which
require agencies to take affirmative steps to publish
procedural regulations and guidelines.
The commissioners were seeking advice on what they had to
do under these laws. And when I spoke to them, several of them
said publicly that they wished there was an ACUS today that
could advise them. Several of the commissioners told me
privately that they had received no orientation about these
laws when they were appointed, and now they realized they
really need some.
This is just the kind of advice and training that ACUS was
able to do for new agencies like EAC. I also believe that a
large inventory of administrative procedure issues has built up
since ACUS shut its doors in 1995. And I gave kind of a laundry
list 2 years ago when I appeared before this Committee, and I
won't repeat them today.
I also believe that the authorization of appropriations,
the dollar amounts included in the bill, are appropriate. They
are about the same in today's dollars as ACUS' highest
appropriation of $2.3 million in 1992. And to put this amount
in perspective, I would note that far greater amounts are often
authorized by Congress for individual studies of the
administrative process.
I was personally involved in a congressionally mandated
study just published today of one aspect of the Social Security
Program. And the study cost $8.5 million.
And I can't resist also pointing out the story in last
Saturday's Washington Post about a report of the Department of
Justice's inspector general, which found that DOJ spent $6.9
million in the last 2 years just to host and send employees to
10 conferences, with a total amount of $81 million for all
conferences only in those 2 years. So I think the
administrative conference is quite a bargain in light of these
figures.
So in summary, I would suggest that for all of these
reasons, as elaborated in my attached articles and earlier
testimony, I would strongly support the reauthorization and the
reappropriation of this highly effective and cost-saving
agency.
Thank you, Madam Chair, Mr. Cannon. And I would be happy to
try to answer any questions you might have.
[The prepared statement of Mr. Lubbers follows:]
Prepared Statement of Jeffrey S. Lubbers
ATTACHMENTS
Ms. Sanchez. Thank you, Professor Lubbers. We will now
begin our round of questionings. And I will begin by
recognizing myself first for 5 minutes.
Mr. Rosenberg, if ACUS were reconstituted, what, if
anything, would you recommend be changed about the conference?
Mr. Rosenberg. I think there should be a broadening of the
people that make up the assembly so that there is more
representation from States and localities, more representation
from management and public administration types, and perhaps
more in employment law and personnel kinds of people to reflect
those areas that are now coming to the fore, and perhaps the
kinds of issues that are raised by the reorganization of DHS,
and some of the civil liberties kinds of issues that are coming
up now.
Ms. Sanchez. And how important would it be to preserve the
bipartisan and nonpolitical nature of ACUS, especially given
the topics that you have just given?
Mr. Rosenberg. Absolutely essential, and also to lend to
the credibility of opening doors for--just by the fact that
ACUS is neutral and does open those doors to get the
information that they need.
Ms. Sanchez. Professor Freeman, I am going to give you an
opportunity, as the time ran out, so that you could talk about
what ACUS could have done but wasn't allowed to do. I am going
to give you that opportunity now, during questions.
Ms. Freeman. Thank you. I suppose that a highlight for me
is the creation of DHS in the wake of September 11th. And this,
of course, was the most important, massive creation of a
Government bureaucracy in over 50 years. And not to have had
some bipartisan and neutral advice for Congress and for others,
the agencies themselves, to make that transition work smoothly,
to try to harmonize the national security concerns of those
agencies with the need for accountability, public access. That
would have been a great service ACUS could have provided. That
is just one in a long list.
The other I would mention is that outsourcing has grown
over the last couple of decades, but particularly in the last
several years, there is need for a significant amount of study
and attention to the implications of outsourcing. There was a
New York Times blitz on outsourcing over the last year or 2.
And you have seen this really come to the fore in the wake of
Hurricane Katrina, as well as Iraq. Those two issues to me are
things that ACUS could have helped out.
Ms. Sanchez. Thank you. I appreciate your answers.
I have more time remaining, but I am going to yield it
back. We have been called across the street to vote. My
understanding is there is one vote. So we will run across to do
that and come back and resume questioning, unless the Ranking
Member would like to maybe ask a quick question.
Mr. Cannon. Madam Chair, I only have one question that I
can just ask for the record.
Ms. Sanchez. I will yield. I will yield my time to you, my
remaining time to you, Mr. Cannon.
Mr. Cannon. Thank you. And then hopefully we can just let
the panel go.
I appreciate you being here. We have been in this business
together for a long time.
And just a few, Dr. Freeman. And this is not urgent. But in
your study, you have got EPA being reversed about 54 percent of
the time. That seems to be way disproportionate to the other
agencies involved. You have also got, I guess, the FCC as being
reversed 43 percent and then others, I think, are averaging
about 28.
I actually was wondering why EPA, primarily, and then FCC
are so far statistically out of line with the others. But
again, that is not urgent. If you want to just give us
something in writing.
Ms. Freeman. I am happy to address it in writing. But just
very, very briefly, actually, I don't think those numbers--I
wouldn't necessarily agree exactly with that read of the
numbers. It turns out that EPA is upheld in whole or part
actually 74 percent of the time. But you are right that they
have a lower rate of being upheld in their entirety. They are
the lowest at 46 percent.
But just to make one comment about this, we did some more
analysis. And I don't think it is correct at the moment to
assume that this means there is something wrong with how EPA
writes its rules. It turns out that most of the cases, 66
percent of the cases, in which EPA's rules are invalidated in
whole or part, 66 percent, are Clean Air Act cases. And Clean
Air Act implementation is extremely complicated, very likely to
be subject to litigation.
It may point to the need for Congress to revisit some of
the most difficult issues in the Clean Air Act. It may not be
the fault of EPA.
Mr. Cannon. All right. Thank you.
I yield back, Madam Chair, to you.
Ms. Sanchez. Thank you. I am going to ask unanimous consent
to enter into the record letters that we have received by
Justice Breyer and Justice Scalia and also the American Bar
Association to be made part of the record. Without objection,
so ordered. Those will be made part of the record.
[The information referred to follows:]
Letter from Justice Stephen Breyer, Supreme Court of the United States,
submitted by the Honorable Linda T. Sanchez, a Representative in
Congress from the State of California, and Chairwoman, Subcommittee on
Commercial and Administrative Law
Letter from Justice Antonin Scalia, Supreme Court of the United States,
submitted by the Honorable Linda T. Sanchez, a Representative in
Congress from the State of California, and Chairwoman, Subcommittee on
Commercial and Administrative Law
Letter from the American Bar Association (ABA), submitted by the
Honorable Linda T. Sanchez, a Representative in Congress from the State
of California, and Chairwoman, Subcommittee on Commercial and
Administrative Law
Ms. Sanchez. My understanding is that there are no further
questions of the witnesses. So I would like to thank the
witnesses for their testimony today. Without objection, Members
of the Subcommittee will have 5 legislative days to submit any
additional written questions, which we will forward to the
witnesses and ask that you answer as promptly as you can so
that they can be made a part of the record. And without
objection, the record will remain open for 5 legislative days
for the submission of any other additional materials.
I realize this has been a bit of a quick and dirty hearing,
but we do appreciate your attendance and your testimony. You
will be receiving, as I said, probably additional questions to
be answered in writing. I thank you for your patience and for
your time. And with that, the hearing on the Subcommittee of
Commercial and Administrative Law is adjourned.
[Whereupon, at 3:40 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record
Prepared Statement of the Honorable John Conyers, Jr., a Representative
in Congress from the State of Michigan, Chairman, Committee on the
Judiciary, and Member, Subcommittee on Commercial and Administrative
Law
Today's hearing allows us to consider H.R. 3564, the ``Regulatory
Improvement Act of 2007,'' a measure that would simply reauthorize the
Administrative Conference of the United States for an additional 4
years.
There are few entities that enjoyed more bipartisan support than
the Administrative Conference. It is also one of the few subject
matters that both Justices Breyer and Scalia wholeheartedly agree upon,
as evidenced by their enthusiastic testimony in support of the
Conference before this Subcommittee in the 108th Congress.
Let me just mention a few reasons why there has been and continues
to be such broad bipartisan support for the Administrative Conference.
First, the Conference helped agencies implement procedures that, in
turn, saved taxpayers many millions of dollars. It proposed numerous
recommendations to eliminate excessive litigation costs and long
delays. Just one agency alone--the Social Security Administration--
estimated that the Conference's recommendation to change that agency's
appeals process would result in approximately $85 million in savings.
Indeed, Justice Breyer described the ``huge'' savings to the public
resulting from the Conference's recommendations, while Justice Scalia
concurred that it was ``an enormous bargain.''
Second, the Administrative Conference promoted innovation among
agencies and how they function. To that end, the Conference
successfully convinced 24 agencies to use Alternative Dispute
Resolution to resolve issues with the private sector. It also
spearheaded the implementation of the Negotiated Rulemaking Act, the
Equal Access to Justice Act, and the Magnuson-Moss Warranty Act,
governing consumer product warranties.
Third, the Conference played a major role in helping agencies
promulgate ``smarter'' regulations. It did this by working to improve
the public's understanding of and participation in the rulemaking
process, promoting judicial review of agency regulations, and reducing
regulatory burdens on the private sector.
After we proceed to markup of the legislation reauthorizing the
Administrative Conference later this afternoon, I will recommend to
House leadership that this measure be considered on the floor promptly
in the coming weeks. I also intend to urge our colleagues on the
Appropriations Committee to fund the Conference as soon as possible.
Response to Post-Hearing Questions from Mort Rosenberg, Esq.,
Specialist in American Public Law, Congressional Research Service
(CRS), Washington, DC
Response to Post-Hearing Questions from Jody Freeman, Professor,
Harvard Law School, Cambridge, MA
Response to Post-Hearing Questions from Curtis Copeland, Ph.D.,
Specialist in American National Government, Congressional Research
Service (CRS), Washington, DC
Response to Post-Hearing Questions from Jeffrey S. Lubbers, Professor,
Washington College of Law, American University, Washington, DC