[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
RULEMAKING PROCESS AND THE
UNITARY EXECUTIVE THEORY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
MAY 6, 2008
__________
Serial No. 110-177
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
----------
U.S. GOVERNMENT PRINTING OFFICE
42-214 PDF WASHINGTON : 2009
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
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. ``BOBBY'' 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
Sean McLaughlin, Minority Chief of Staff and General 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
----------
MAY 6, 2008
Page
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......................................... 2
WITNESSES
The Honorable Susan E. Dudley, Administrator, Office of
Information and Regulatory Affairs, Office of Management and
Budget, Washington, DC
Oral Testimony................................................. 6
Prepared Statement............................................. 8
Mr. Peter L. Strauss, Professor, Columbia Law School, New York,
NY
Oral Testimony................................................. 42
Prepared Statement............................................. 44
Mr. Curtis W. Copeland, Ph.D., Specialist in American National
Government, Congressional Research Service, Washington, DC
Oral Testimony................................................. 62
Prepared Statement............................................. 64
James L. Gattuso, Esq., Senior Fellow in Regulatory Policy, Roe
Institute for Economic Policy Studies, The Heritage Foundation,
Washington, DC
Oral Testimony................................................. 104
Prepared Statement............................................. 105
Mr. Rick Melberth, Ph.D., Director of Regulatory Policy, OMB
Watch, Washington, DC
Oral Testimony................................................. 108
Prepared Statement............................................. 110
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...... 4
APPENDIX
Material Submitted for the Hearing Record
Article submitted by the Honorable Chris Cannon, a Representative
in Congress from the State of Utah, and Ranking Member,
Subcommittee on Commercial and Administrative Law.............. 128
Response to Post-Hearing Questions from the Honorable Susan E.
Dudley, Administrator, Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, DC....... 142
Response to Post-Hearing Questions from Peter L. Strauss,
Professor, Columbia Law School, New York, NY................... 152
Response to Post-Hearing Questions from Curtis W. Copeland,
Ph.D., Specialist in American National Government,
Congressional Research Service, Washington, DC................. 155
Response to Post-Hearing Questions from James L. Gattuso, Esq.,
Senior Fellow in Regulatory Policy, Roe Institute for Economic
Policy Studies, The Heritage Foundation, Washington, DC........ 158
Response to Post-Hearing Questions from Rick Melberth, Ph.D.,
Director of Regulatory Policy, OMB Watch, Washington, DC....... 165
RULEMAKING PROCESS AND THE
UNITARY EXECUTIVE THEORY
----------
TUESDAY, MAY 6, 2008
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:06 p.m., in
Room 2141, Rayburn House Office Building, the Honorable Linda
Sanchez (Chairwoman of the Subcommittee) presiding.
Present: Representatives Sanchez, Johnson, Cannon, and
Keller.
Staff present: Susan Jensen, Majority Counsel; Daniel
Flores, Minority Counsel; and 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.
Without objection, the Chair will be authorized to declare
a recess of the hearing at any time.
I will recognize myself for a short statement.
A year ago last February, this Subcommittee held a hearing
on President Bush's Executive Order 13422. This new order
substantially amended President Clinton's Executive Order
12866, an order that had guided the OMB regulatory review
process for the preceding 13 years.
Specifically, the order requires agencies to identify
specific market failures or problems that warrant a new
regulation. Furthermore, agency heads are now required to
designate a presidential appointee as an agency policy officer
to control upcoming rulemaking.
Many are very concerned that Executive Order 13422 would
further politicize regulations, several of which were
specifically created by experts to protect the health and
safety of our citizens.
I am concerned that the main thrust of this new order
appears to be intended to shift control of the rulemaking
process from the agencies, the entities that have the most
substantive knowledge and experience, to the White House.
The New York Times, for example, reported that President
Bush's order strengthens the hand of the White House in shaping
rules that have, in the past, often been generated by civil
servants and scientific experts. Commentators observed that it
represented just another clandestine power grab by the
Administration. These thoughts and concerns were not just
expressed by the so-called ``liberal media'' or partisan
operatives.
The independent fact finding arm of Congress, the
Congressional Research Service, for example, says the revisions
made by Executive Order 13422 represent a clear expansion of
presidential authority over rulemaking agencies.
CRS also notes that the order can be viewed as part of a
broader statement of presidential authority presented
throughout the Bush administration from declining to provide
access to executive branch documents and information to
creating presidential signing statements indicating that
certain statutory provisions will be interpreted consistent
with the President's view of the unitary executive.
Under this theory, the President, and only the President,
can and should make the final decision. That is a rather
serious observation coming from a preeminently nonpartisan
source.
Today, more than 1 year later, our concerns are even
greater, as illustrated by the latest controversies involving
the rulemaking process. These issues range from the
Administration's overriding the EPA's proposed air quality
standards for ozone levels to efforts by the Vice President to
delay the promulgation of a rule protecting Wright whales from
annihilation.
Accordingly, I very much look forward to hearing the
testimony and appreciate the witnesses' willingness to
participate in this hearing.
At this time I would now recognize my colleague, Mr.
Cannon, the distinguished Ranking Member of the Subcommittee,
for his opening remarks.
Mr. Cannon. Thank you, Madam Chair.
I would like to extend a welcome to all of our witnesses
today, including Ms. Dudley, and want to point out that this
topic is really of great importance to our country. And I would
like to thank you all for coming to share your ideas with us.
Before I start, I would like to invite everyone to take a
step back and to take a look at the big picture with me.
Seventy-five years ago, the modern administered state exploded
upon us with Franklin Roosevelt's New Deal and continued to
mushroom to the Fair Deal, the New Frontier, and the Great
Society.
By the time we reached the late 1970's, Congress had
enacted an enormous Federal bureaucracy, producing an equally
enormous number of regulations. They had done this largely by
delegating to that direction much of Congress' own legislative
power. By the time of the Carter administration, Congress'
ability to write broad framework statutes mandating that
bureaucracy write legislative rules, filling in the details of
Congress' decisions, had risen practically to the state of a
very high arm.
What was the result? A weakened Congress, an immensely
strengthened but wholly unaccountable Federal bureaucracy, a
skyrocketing Federal budget and a staggering regulatory burden
on our citizens and our economy, spreading in every direction
as far as the eye could see or the mind could imagine.
It took the executive some time, but eventually it woke up
to the need to restore sanity to this situation, and starting
with the Reagan administration, the Executive Office of the
President began to assert increased presidential control over
myriad rulemaking activities in the Federal agencies.
In 1981, through Executive Order 12291, President Reagan
consolidated new regulatory review authority in the Office of
Management and Budget. Much of this authority was housed in
OMB's Office of Information and Regulatory Affairs.
In 1985, through Executive Order 12498, President Reagan
also consolidated in OIRA White House review of agencies'
regulatory development agendas. The administration of President
George H. W. Bush continued this basic framework, and with some
moderate adjustment, so did the Clinton administration. The
Clinton administration's refinements occurred largely through
Executive Order 12866, issued in 1993.
The administration of the current President Bush has
followed substantially this same framework. It has also brought
within that framework the agencies' burgeoning production of
guidance; guidance often used by agencies to embellish their
regulatory regimes while avoiding judicial review.
There are those who say 25 years into this reaction by the
presidency that the Bush administration has gone too far. They
claim that the current President has unduly cut into the
authority of Federal agencies. They say that Congress should
step in to curtail executive authority over the executive
branch.
I see a very different picture in which over time Congress
excessively delegated its authority to unelected officials in
executive branch agencies, in which the executive wisely and
consistently saw a need to restore order and accountability,
and in which the solution to any overly zealous leadership of
the executive branch by the executive is not the clipping of
the executive's wings but the strengthening of Congress.
And on that point, I think we should have bipartisan
agreement, because if a weak Congress foists off on the Nation
a weak executive, all we will be left with is an uncontrolled
Federal bureaucracy and no one, no one, can want that. If the
executive is not within its rights in leading executive branch
agencies, then what has become of the Constitution?
So how do we strengthen Congress? Easy. We just pick up the
tools Congress already has at its disposal and we use them with
vigor. We legislate instead of delegating our legislative
rights to the Federal bureaucracy. That is, Congress should
vote on regulations before they become law. We also ought to
make our laws clear enough that they don't need vast amounts of
interpretive regulations.
We vigilantly oversee the executive through our oversight
and we legislate in response to what we find. The fact is, we
have been woefully inadequate for many years in oversight staff
and oversight activities. We emphasize our power of the purse,
sending strong signals to the executive about how we want him
to lead the executive branch. And we at long last realize the
promise of the Congressional Review Act, to pick up and
disapprove agency rules that we think violate the substantive
laws we pass, the Administrative Procedure Act or other
procedural laws.
What will the result of all of this be? A strong and
accountable Congress pitted against a strong and accountable
executive, and a robust debate that can be only good for the
country, which is precisely what the framers of the
Constitution intended.
I thank you, Madam Chair, and I yield back.
[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'd like to extend a welcome to all of our witnesses.
This is a topic that is of great importance to our country. I'd
like to thank you all for coming.
But before we start, I'd like to invite everyone to take a step
back and look at the big picture with me.
Seventy-five years ago, the modern administrative state exploded
upon us with Franklin Roosevelt's New Deal.
It continued to mushroom through the Fair Deal, the New Frontier,
and the Great Society.
By the time we reached the late 1970s, the Congress had erected an
enormous federal bureaucracy, producing an equally enormous number of
regulations.
And they had done this largely by delegating to that bureaucracy
much of Congress' own legislative power. By the time of the Carter
Administration, Congress' ability to write broad framework statutes,
mandating that the bureaucracy write legislative rules filling in the
details of Congress' decisions, had risen practically to the state of
high art.
What was the result? A weakened Congress; an immensely strengthened
but wholly unaccountable federal bureaucracy; a skyrocketing federal
budget; and a staggering regulatory burden on our citizens and our
economy, spreading in every direction as far as the eye could see.
It took the Executive some time, but eventually it woke up to the
need to restore sanity to this situation.
Starting with the Reagan Administration, the Executive Office of
the President began to assert increased presidential control over
myriad rulemaking activities of the federal agencies.
In 1981, through Executive Order 12291, President Reagan
consolidated new regulatory review authority in the Office of
Management and Budget. Much of this authority was housed in OMB's
Office of Information and Regulatory Affairs. In 1985, through
Executive Order 12498, President Reagan also consolidated in OIRA White
House review of the agencies' regulatory development agendas.
The Administration of President George H.W. Bush continued this
basic framework, and, with some moderate adjustments, so did the
Clinton Administration. The Clinton Administration's refinements
occurred largely through Executive Order 12866, issued in 1993.
The Administration of the current President Bush has followed
substantially this same framework. It also has brought within that
framework the agencies' burgeoning production of guidance--guidance
often used by agencies to embellish their regulatory regimes while
avoiding judicial review.
There are those who say, twenty-five years into this reaction by
the Presidency, that the Bush administration has gone too far. They
claim that the current President has unduly cut into the authority of
the federal agencies. They say that Congress should step in to curtail
the Executive's authority over the Executive Branch.
I see a very different picture in which, over time, Congress
excessively delegated its authority to unelected officials in Executive
Branch agencies; in which the Executive wisely and consistently saw a
need to restore order and accountability; and in which the solution to
any overly zealous leadership of the Executive Branch by the Executive
is not the clipping of the Executive's wings, but the strengthening of
Congress.
Because, after all, if a weak Congress foists off on the Nation a
weak Executive, all we will be left with is an uncontrolled federal
bureaucracy--and no one can want that.
And if the Executive is not within his rights in leading Executive
Branch agencies, then what has become of our Constitution?
So how do we strengthen Congress? Easy. We just pick up the tools
Congress already has at its disposal--and we use them with vigor.
We legislate instead of delegating our legislative rights to the
federal bureaucracy. That is, Congress should vote on regulations
before they become law. We also ought to make our laws clear enough
that they do not need vast amounts of interpretive regulations.
We vigilantly oversee the Executive through our oversight--and we
legislate in response to what we find.
We exercise our power of the purse, sending strong signals to the
Executive about how we want him to lead the Executive Branch.
And we at long last realize the promise of the Congressional Review
Act to pick up and disapprove agency rules that we think violate the
substantive laws we pass, the Administrative Procedure Act, or other
procedural laws.
What will the result of all this be? A strong and accountable
Congress, pitted against a strong and accountable Executive, in a
robust debate that can only be good for the country--which is precisely
what the framers of the Constitution intended.
I yield back the remainder of my time.
Ms. Sanchez. I thank the gentleman for his statement.
Without objection, other Members' opening statements will
be included in the record.
I am now pleased to introduce the witness for our first
panel of today's hearing. Our witness on the first panel is
Susan Dudley.
On April 4, 2007, Ms. Dudley was appointed to serve as the
administrator of the Office of Information and Regulatory
Affairs, OIRA, of the Office of Management and Budget. Prior to
her service at OIRA, Ms. Dudley served at the nonprofit
Mercatus Center at George Mason University, where she directed
the regulatory studies program from 2003 to 2006.
As an adjunct professor at the George Mason University
School of Law, she designed and taught courses on regulations
and led regulatory clinic. Ms. Dudley also served as a career
civil servant, working as a policy analyst at the Environmental
Protection Agency from 1984 to 1985, an economist at OIRA from
1985 until 1989 and an economist advisor to the Commodities
Futures Trading Commission from 1989 to 1991.
From 1991 until 1998, she was a consultant to government
and private clients at Economists, Incorporated.
Ms. Dudley has authored more than 25 scholarly publications
on regulatory matters ranging from e-rulemaking to electricity,
health care, the environment and occupational safety.
I want to thank you for your willingness to participate in
today's hearing. Without objection, your written statement will
be placed into the record, and we would ask that you limit your
oral remarks to 5 minutes.
You will notice that we have a lighting system that starts
with a green light. At 4 minutes, it will turn yellow, warning
you that you have about a minute left. And at 5 minutes, the
light will turn red. If you are mid-thought when your time
expires, we will of course allow you to finish your last
thought.
After you have presented your testimony, Subcommittee
Members are permitted to ask questions subject to the 5-minute
limit.
So, with that, I would invite Ms. Dudley to please proceed
with her testimony.
TESTIMONY OF THE HONORABLE SUSAN E. DUDLEY, ADMINISTRATOR,
OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF
MANAGEMENT AND BUDGET, WASHINGTON, DC
Ms. Dudley. Thank you, Chairwoman Sanchez and Ranking
Member Cannon. Thank you for inviting me to testify today.
As administrator of the Office of Information and
Regulatory Affairs, and as you mentioned, Madam Chairman, as
someone who has served as a career economist on the OIRA staff
in the 1980's, I am pleased to be here today to talk with you
about OIRA's role and the history of executive oversight of the
regulatory process.
OIRA was created as part of the Office of Management and
Budget by the Paperwork Reduction Act of 1980, more than 25
years ago. Staffed almost exclusively by career civil servants,
OIRA has served Administrations both Democratic and Republican,
for decades, by providing centralized oversight and interagency
coordination of Federal information, regulatory and statistical
policy.
Even before Congress created OIRA, though, Presidents had
established regulatory oversight mechanisms within the
executive office of the President. For example, President
Carter relied on several EOP agencies, including OMB, to
implement his executive order on improving government
regulations.
Each President since then has built on that foundation and
over the course of more than three decades, regulatory analysis
has emerged as an integral part of government accountability, a
valuable tool for understanding the likely effects of
regulations.
The nonpartisan nature of this principled approach is
reinforced by the fact that during the current Bush
administration we have continued to operate under President
Clinton's Executive Order 12866 with some minor amendments that
I would be happy to discuss.
Over the last 7 years, the Bush administration has further
built on these foundations to enhance the oversight and
accountability of the regulatory process. First, we have
enhanced OIRA's transparency. We have taken advantage of the
Internet to list on our Web site all regulations under review.
We also provide on our Web site lists of any meetings held with
outside parties on rules under review.
Second, over the last 5 years e-rulemaking has transformed
access to Federal Government rulemaking process.
Regulations.gov has brought government-wide information
together and made it searchable and accessible for anyone with
access to the Internet.
Third, OIRA has undertaken several initiatives to improve
the information and analysis on which new regulations are
based. These are summarized in my written testimony, so today I
will focus on two initiatives in which this Committee had
expressed an interest in the past.
One, the first, is the final bulletin for Agency Good
Guidance Practices. And the other is the January 2007
amendments to Executive Order 12866. While I was not at OMB
when these were issued, I can provide you with an update on how
they are being implemented.
In January 2007, after soliciting and responding to public
and interagency comments, OMB issued a final bulletin for
agency good guidance practices to increase the quality,
accountability and transparency of agency guidance documents.
Most agencies have substantially complied with these
requirements by updating their Web sites so the public can know
what guidance applies to them and have the opportunity to
provide feedback on significant guidance.
For example, EPA and the Department of Labor have done
outstanding jobs of making their guidance documents available
to the public. Other agencies have made a lot of progress, but
have not met all of the bulletin's requirements, and we are
continuing to work with the agencies. But overall, we are
pleased with their progress.
On the same day that OMB released the final bulletin, the
President issued Executive Order 13422, which amended EO 12866,
to clarify OMB's authority to coordinate interagency review of
agency significant guidance documents. Before issuance of these
amendments, OMB reviewed some agency guidance documents, but
the process was not as systematic.
EO 13422 also made several process amendments to EO 12866
to encourage good government practices, and I would be happy to
discuss implementation of those if you would like.
But in conclusion, let me wrap up by observing that the
executive oversight of agency rulemaking has a long history
that transcends party lines. It is important for a well-
functioning, accountable regulatory system that meets the needs
of the American people.
Thank you.
[The prepared statement of Ms. Dudley follows:]
Prepared Statement of the Honorable Susan E. Dudley
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Sanchez. Thank you, Ms. Dudley.
We will now begin the questioning, and I will begin by
recognizing myself for 5 minutes of questions.
I am interested in knowing, Ms. Dudley, what your view of
the power of the President is to determine the substance of
final rules? Do you think that that is appropriate?
Ms. Dudley. I am not a constitutional lawyer, but I believe
the role of executive oversight, as they have been established
by President Carter and subsequent Presidents.
Ms. Sanchez. Okay. If Congress says that an agency and not
the President should promulgate regulations in a particular
area, should the President be able to substitute his or her
judgment for that of the agency to whom Congress has delegated
the rulemaking authority?
Ms. Dudley. Executive Order 12866 that we operate under now
that was issued by President Clinton in 1993, it gives the
agencies primacy in writing their regulations. And my office's
role is coordination, review, to ensure consistency with the
principles in the executive order.
Ms. Sanchez. So if I am understanding your answer
correctly, the agency would have the final determination of the
rulemaking?
Ms. Dudley. That is how Executive Order 12866 is
characterized, yes.
Ms. Sanchez. Okay. Because my understanding is that in
Section 7 of Executive Order 12866 the President will resolve
differences between the agencies and OIRA unless otherwise
prohibited by law, and I am sort of interested in knowing how
you view that restriction.
For example, could Congress prevent the President from
making the final decision on an agency rule?
Ms. Dudley. I would probably have to defer that to a
constitutional lawyer.
Ms. Sanchez. You don't have an opinion either----
Ms. Dudley [continuing]. In my long experience in this in
the regulatory world, but that wouldn't be my expertise.
Ms. Sanchez. No opinion on the----
Mr. Cannon. She is asking can we limit the President's
authority. We do that all the time.
Ms. Sanchez. I am asking somebody who has inside knowledge
whether or not it--because there is this discussion whether
Executive Order 12866 is significantly different from 13422.
And I maintain that there is quite a large difference in the
two executive orders, that they are--the point that I am trying
to get at is that Executive Order 12866 gives agencies, I
think, primary authority. And that Executive Order 13422, by
the subtle changes, the changes that it has made, is trying to
take away some of that agency power and put it into the hands
of the executive office. And that is my concern. So I am
interested in knowing----
Ms. Dudley. I could comment on that. Actually, that
language in Executive Order 12866 is unchanged. So it is the
same language in both, as is the appeals process.
There is a change in the appeals process that we can
discuss if you like, but that language remains unchanged.
Ms. Sanchez. Okay. In your written statement, you mentioned
the efforts of your predecessor, John Graham, to increase the
transparency of OIRA reviews. Dr. Graham, however, also said
that OIRA has its greatest impact on agency rules during
information reviews and that agencies should not disclose the
changes that are made to rules during this period, at OIRA's
suggestion, even after the rules have been published in the
Federal register.
How, then, can you say that OIRA is transparent when it is
not transparent about the most important part of the process?
Ms. Dudley. Informal review of rules is something that
agencies might initiate before they have a draft that is really
ready for primetime. And so at their request we will begin to
look at pieces of regulations before it is ready to be formally
submitted.
As I understand it, that is not a new process that John
Graham created. That is something that has been ongoing in the
Clinton administration as well.
Ms. Sanchez. I understand that, but how can you say that
the process should be more transparent if indeed there is a
great amount of changes that happen during the informal
process?
Ms. Dudley. During the informal process, that is a time
when often the agency itself is also working on the regulation.
I don't know when would be the bright line to draw and when any
draft or idea should be made public.
A decision has been made that when a regulation is
submitted formally for OMB review, we provide both that draft
and we also provide the draft regulation as it leaves OMB, at
the conclusion of review.
So that is something that I think it is quite a bit of
transparency. There is always a struggle to balance the need
for public to get information and the ability for frank
discussions of a deliberative nature before something is
complete. And I think that is the balance that has been made.
Ms. Sanchez. Final question before time runs out. In your
written statement, you mentioned OMB Circular A4 and OIRA's
increased emphasis on cost-benefit analysis. In your opinion,
does OIRA apply that circular equally among the agencies?
Ms. Dudley. Circular A4 is actually a--it is based on best
practices that were issued in the Clinton administration. It is
applied to the extent that statutes permit, and there are some
statutes that the full range of things discussed in A4 can be
applied and others that cannot.
So, no, it would not be applied equally.
Ms. Sanchez. My last point was going to be that most of the
rules from the Department of Homeland Security have not had
monetized cost and/or benefits, yet they have been approved by
OIRA, while at the same time rules from EPA have been rejected
by OIRA because they hadn't fully monetized the costs or
benefits.
And I think that there is--the question that I have is why
would the two be treated differently, if the intent is that
that circular would apply to all of them?
Ms. Dudley. I guess I am not sure I agree with the premise
that EPA regulations have been rejected if they don't fully
monetize costs and benefits. The fact of the matter is, EPA is
very good at doing regulatory analysis. They have been doing it
for longer, and they do a very good job of their regulatory
analysis, which includes cost-benefit analysis, but not
exclusively.
Department of Homeland Security is a newer agency and we
are working closely with them. There are struggles. Some of the
benefits and costs of Homeland Security regulations are
difficult to get a handle on.
Ms. Sanchez. But if the goal is to have everybody doing the
cost-benefit analysis and some rules are being rejected because
it is not adequate and others that are less forthcoming about
information, about the costs and benefits, are being allowed to
pass, there seems to me some disparate treatment of rules from
different agencies.
Ms. Dudley. And that is where I can't agree with you. I
don't think that you could find--maybe you could. I don't think
that EPA rules are being rejected because the cost-benefit
analysis is not adequate.
Ms. Sanchez. Okay. We will have to agree to disagree.
I will now recognize Mr. Cannon for 5 minutes of questions.
Mr. Cannon. Thank you, Madam Chair.
In your good guidance practices, you talked about
transparency. Do you encourage agencies to create transparency
in requests for guidance as well as the guidance that is given
by the agency?
In other words, if a person says, ``I need to know how you
are going to implement the law in my case,'' he explains the
case, is that going to be made available to other people who
might have similar questions?
Ms. Dudley. So do you mean people might ask for
clarification and a letter that provides clarification?
The good guidance practices applies to significant
guidance. Significant in economically significant. That might
not be classified as a significant guidance if it applied only
to one company or a small group of entities. So it may not
cover that.
Mr. Cannon. I have a problem with significant, a word that
has some kind of content but it is hard to describe what it
actually is. And in a world where Google makes information
freely available, significant seems to me to plummet, and it
actually bumps into the--it may irritate bureaucrats at some
point in time, but if you--I am just going to give a little bit
of counsel that I hope you will take kindly. And that is that I
think that agencies should be much more transparent and open.
And that if an individual has a question that is important to
him or his company, the fact that a bureaucrat can say this is
not significant, may be the basis for actual persecution,
something that we have actually seen among my constituents, and
I suspect everyone else's constituents has as well.
So I would hope that in the pursuit of transparency, we
recognize the radically lowered cost of information.
And with that, Madam Chair, I appreciate your questioning,
and I yield back the remainder of my time.
Ms. Sanchez. The gentleman yields back.
At this time I will recognize Mr. Keller, the gentleman
from Florida, for 5 minutes of questions.
Mr. Keller. Thank you, Madam Chairman.
Administrator Dudley, thank you for being here today.
Executive Order 13422 and its accompanying good guidance
bulletin have now been in effect for 15 months. What, in your
view, has been the overall impact of this executive order and
the bulletin?
Ms. Dudley. I would say the main impact of both is that
guidance documents are--the public has a greater opportunity to
see and comment on guidance documents. They should be placed on
agencies Web sites with easy access so that the public can not
only see what applies to them, but see comments on that.
And in terms of the executive order, it is the guidance
provision, because those guidance documents, the most
significant of them, OMB knows about them and when necessary we
conduct interagency review.
Mr. Keller. Aside from the public nature of the guidance
documents, what in your view has been the chief practical
differences in OIRA and agency practices since the executive
order and the good guidance bulletin were issued?
Ms. Dudley. Of the non-guidance provisions, I would say the
requirements for the regulatory policy officer. Regulatory
policy officers were a component of the original executive
order, and what the January 2007 amendment did is it made
them--required that they be presidential appointees.
We now know who they are. It is posted on our Web site, the
list of both the office as well as the individual serving in
that capacity, for every agency. And I think that has made it
more transparent for the public and for us.
Mr. Keller. Mr. Copeland, who will testify in a little bit,
suggests in his written testimony that Executive Order 13422
eliminated the requirement that regulatory policy officers
report to their agency heads. Is that suggestion correct, in
your view?
Ms. Dudley. No. We provided implementation guidance for the
executive order and the good guidance and made very clear that
the regulatory policy officer, it is a presidential appointee,
but he is serving in an agency. So it is the general counsel of
an agency, the deputy secretary, sometimes the assistant
secretary for policy. So these are existing positions who have
their existing reporting framework through the director of the
agency.
So as always, it is the head of the agency that has that
ultimate authority.
Mr. Keller. Okay. Thank you.
Mr. Copeland also suggests, I think, that Executive Order
13422 amendments to the regulatory review process will somehow
slow down the process. Are you aware of any evidence that that
has happened?
Ms. Dudley. I don't have any evidence of that. We are
reviewing the same number of regulations that we were before
the executive order was passed. I have statistics. And we have
been reviewing about 600 regulations a year since the nineties,
since 1993.
Mr. Keller. Okay. Thank you.
And Madam Chairman, I will yield back the balance of my
time.
Ms. Sanchez. The gentleman yields back the balance of his
time.
I want to thank Ms. Dudley. You may now be excused and we
will take a short recess to allow our second panel of witnesses
to be set up and to come forward to the dais.
[Recess.]
Ms. Sanchez. The Committee is now resumed.
I am pleased to welcome our second panel of witnesses.
Our first witness is Professor Peter Strauss. Professor
Strauss is the Betts professor of law at Columbia Law School. A
renown scholar of administrative law, Professor Strauss has
taught that subject at Columbia for the past 36 years, just a
short period of time.
Professor Strauss clerked for Associate Justice William
Brennan and Chief Judge David Bazelon of the United States
Court of Appeals for the District of Columbia.
It is an honor to have you testify before the Subcommittee
again, Professor Strauss, and we want to welcome you.
Our second witness is Curtis Copeland. Dr. Copeland is a
specialist in American national government at CRS. His
expertise appropriately relevant to 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.
Prior to joining CRS, Dr. Copeland held a variety of
positions at the Government Accountability Office over a 23-
year period.
It is good to see you again, Dr. Copeland. Thank you for
being here.
Our third witness is James Gattuso. Mr. Gattuso is a
research fellow in regulatory policy for Roe Institute for
Economic Policy Studies at the Heritage Foundation.
Specifically, Mr. Gattuso handles regulatory and
telecommunications issues. Previously, Mr. Gattuso served as a
policy analyst for the Heritage Foundation with responsibility
for a broad range of issues, including telecommunications,
transportation and anti-trust policy.
Prior to joining Heritage, he was vice president for policy
at the Competitive Enterprise Institute. In that position, he
oversaw CEI's policy work and supervised the overall management
of the organization.
Before joining CEI in 1997, Mr. Gattuso served as vice
president for policy development with Citizens for a Sound
Economy from 1993 to 1997, where he directed the research
activities of that organization. From 1990 to 1993, he was
deputy chief of the Office of Plans and Policy at the Federal
Communications Commission.
So welcome to you, Mr. Gattuso.
Our final witness is Rick Melberth. Dr. Melberth joined OMB
Watch in November 2006 as director of Federal regulatory
policy, a program which works to protect and improve the
government's ability to develop and enforce safeguards for
public health, safety, environment and civil rights. He directs
all activities related to policy, advocacy, analysis, research,
monitoring and public education.
Prior to joining OMB Watch, Dr. Melberth was the director
of internal planning and formerly the associate director of the
environmental law center at the Vermont Law School. He helped
design the curriculum and taught courses in the Master's
program.
Dr. Melberth has written several pieces about decision-
making in government and environmental issues during his
academic career and while working as an independent consultant
and policy analyst.
I want to thank you all for your willingness to participate
in today's hearing. You have heard about the lighting system. I
am just going to remind you, you have 5 minutes for your
testimony and you will get a series of lights; green when you
begin your testimony, yellow when you have a minute remaining,
and red when your time has expired.
I am going to apologize because I am going to need to go to
the floor to debate a bill of mine, and so we will have
somebody else filling in in the Chairman position, and that
will be Mr. Johnson.
But at this time I would invite Professor Strauss to begin
his testimony.
TESTIMONY OF PETER L. STRAUSS, PROFESSOR,
COLUMBIA LAW SCHOOL, NEW YORK, NY
Mr. Strauss. Chairwoman Sanchez, Ranking Member Cannon,
Congressmen Keller and Johnson, I am deeply honored to be
present today for this important hearing.
You have got my prepared testimony and it doesn't make much
sense to read the bulk of it. You ought to appreciate from the
excellent submissions of others and what your experience has
also taught you, which is that presidential oversight of
rulemaking has been with us for more than three decades.
Indeed, the academic community and my impression as well is
that Congress is in agreement that, within its limits, at
least, the practice of executive oversight is a sound one.
At the same time, and responding to Ranking Member Cannon's
remarks about delegation, it seems to me that Congress commits
limited tasks to administrative agencies, and when it does so
it expects them to be performed with fidelity to scientific
judgment and observance of the limited factors that Congress
may have made relevant.
The present difficulties in my judgment arise from
presidential practices that threaten these limits. Maybe next
year, with former senators in the White House, respect for
Congress' work will return to a greater degree than one now
sees.
We all do understand that the Constitution creates a single
chief executive officer, the President, as the head of
government. Congress defines the work that its statutes detail.
We have a unitary executive. Disagreement is about what the
President's function is.
But once Congress has created a government agency and said
what its responsibilities are, we know that the roles of
Congress and the court are to oversee the agency in its
assigned work, not actually to perform that work.
When Congress authorizes the EPA to regulate pollution or
OSHA to regulate workplace safety, can the President decide
these matters? Or is he too only to oversee the agency's
decision processes?
Our Constitution it seems to me is quite specific about
this. It recognizes that departments will have duties. It
permits Congress to assign duties to administrative agencies
rather than the President. And when it does, the President is
not the decider of these matters. Attorney General Wirt back in
1823 told President Monroe that the President's role is to give
general superintendence to those to whom Congress has assigned
executive duties as it could never have been the intention of
the Constitution that he should in person execute the laws
himself.
Were the President to perform a statutory duty assigned to
another, he would not only not be taking care that the laws
were faithfully executed, but he would be violating them
himself. That is, the assignment of decisional responsibility
to others is a part of the laws to whose faithful execution the
President is to see. And when agency officials treat the
President as the person entitled to decide matters the Congress
has committed uniquely to their judgment, they too fail in
their obligations to the law.
They do have to consult with him. The Constitution is quite
specific about that. But at the end of the day, they are the
ones responsible for deciding any matters that Congress places
in their charge.
I do want to be clear. These are not simple issues. We have
a single chief executive. The President's politics stand behind
appointments to high office and he properly claims
opportunities to discuss his Administration's policy
preferences with his appointees. Indeed, the Constitution's
text is explicit that he can demand consultation, in writing,
on matters within. But then this is the word the Constitution
uses--the duties of their offices. They are the ones with the
duties.
The right to discipline any appointee, even an independent
regulatory commissioner who refuses to consult him and hear his
views, is the President's. And insofar as it creates a
framework for consultation, Executive Order 12866 reflects a
sound view of executive authority, and it would do so even if
it were fully extended to the independent regulatory
commissions, as many of us have recommended.
The difficulties arise when the President reaches past
consultation to demanding particular decisions. This is the
subtle ground between hearing out the President and obeying
him. And this is the issue that concerns me here.
Chairwoman Sanchez made some reference to the matters that
have been in the papers in recent weeks. They are only
examples, and I don't think my limited time permits me to go
into them, but they do suggest that a fair amount of bending
science is going on. Or to put it another way, that the
President has been injecting into the decision process factors
that Congress has specifically forbidden the agencies
responsible for these decisions to take into account.
The courts have said, responding to your instructions, and
on arguments from the solicitor general, that costs are not a
part of the EPA's business. They have tolerated the delegation
to the EPA of the vast authority that it has on the
understanding that it won't be considering costs. But what is
motivating the apparent interference with EPA's judgment about
ozone standards?
Mr. Johnson. [Presiding.] Professor Strauss, your time has
expired. If you would wrap up.
Mr. Strauss. Yes, absolutely. Just one other thing that I
would like to say, if I may, which is to suggest that among the
possible responses the Congress might have is the one that I
heard Ranking Member Cannon mention, the power of the purse.
When the House attempted to exercise that power last summer
in connection with the President's remarkable amendments to
Executive Order 12866, I understand that OMB responded with the
claim that a failure to appropriate funds for OIRA would be an
unconstitutional intrusion on the President's constitutional
authority, the power of the unitary executive. What a laughable
claim that is.
The President, like the King of England in his battles with
Parliament, has got to rely on you for the funds he desires,
and if you find him abusing his authority, you can withhold
those funds.
Thank you again for the privilege of testifying today.
[The prepared statement of Mr. Strauss follows:]
Prepared Statement of Peter L. Strauss
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Johnson. Thank you, Professor Strauss, and it has come
to our attention that you have to depart early from this
hearing, but your testimony has generated such interest that we
would like to take the opportunity to question you prior to us
hearing from the other witnesses. So I will begin.
Dr. Copeland says that there may be little difference in
practice between the unitary executive position in which the
President can and should make the final decision and the
traditional or presidential oversight perspective since even in
the traditional perspective, the President can have the last
word if he is willing to fire someone and take the political
heat.
How do you respond to that?
Mr. Strauss. Well, this goes in part to my concerns about
the regulatory policy officers, which I expressed to this
Committee at its hearing shortly after Executive Order 13422
was promulgated.
It is the regulatory policy officer who is going to be
fired, the presidential appointee who is directly responsible
to OIRA, and this is not necessarily a person in the position
that the head of an agency is in political terms to take the
political heat, would be involved in standing up to the
President and saying, ``If you want to displace my judgment,
Mr. President, you are going to have to send me home.''
That political heat has been felt on numerous occasions and
it constrains Presidents. If they have to operate in public by
firing someone, that is quite a different setting, at least in
my judgment, from the psychology that attends and understanding
that I have the legal obligation to do what the President tells
me to do--if an administrator understands that at the end of
the day it is her judgment and she has the right to make that
judgment, it will often be the case that the President will not
respond.
It may indeed often be the case that what she has heard
about the President wants ``X'' from a member of the White
House bureaucracy will not be anything that crossed the
President's desk or the President's mind at all. There is a
terrific piece in the recent law school literature by
professors at Vanderbilt University Lisa Bressman and Michael
Vandenbergh detailing conversations they had with senior
officials at EPA during both the Clinton and the first Bush
administrations. And what she reports was that they were
hearing from many different groups in the name of the President
in the White House and in many different ways. It is not just
one person.
I think getting clarity--it is going to be the President
who fires the administrator of the EPA if that is what
happens--getting clarity and getting the political heat that
will attend that--we can all think of occasions where the
President has indeed let the administrator of EPA go. Ann
Gorsuch comes to mind. And then in the wake of that, Congress'
authority over who would replace her creates a decided
restraint on the kind of environmental policy that the
presidential administration is able subsequently to carry
forward.
So I just don't agree with the proposition that these are
equivalent.
Mr. Johnson. Thank you, Professor Strauss.
I will now yield the balance of my time and yield to Mr.
Cannon for questions.
Mr. Cannon. Thank you.
I appreciate the fact you asked a question about firing,
because it seems to me that as coarse as that is, that really
is one of the clear authorities of the President and is now
well-established historically.
So in considering your testimony, Professor Strauss, I find
that we have very few differences. Hardly anything of
substance. I would characterize the President's authority to
fire exactly as you have. It is a heavy-handed kind of thing.
I think personally it would be wonderful if the President
said I am going to change my administrators regularly and
often, and allow people to come in with a fresh perspective and
do something and then move on in their lives.
I mean, if you can shorten the time frame of getting a
message from Washington to Boston and back as much as we have
from horseback to e-mail, we ought to be able to move
administrators back and forth. That would take the support of
the Senate, I think, and that would be nice, if we could work
together in that regard.
And I appreciate, by the way, your explanation. I was going
to ask you about Article 2 and how that, the faithfully
executed clause, how that works, and I think that your view--
that you have dealt with those things quite well.
Probably the only place where we really disagree is in how
this relates to the practice of this Administration or the last
Administration. I am not sure it is a partisan thing, but what
we have--in fact, I am intrigued by your last comment, when you
were talking about many people talking with people at EPA in
the name of the President. The problem is, the President can't
possibly know what all those people think or what their
personal agendas are. But it is the complexity of government
that leads us to the point where we have that lack of clarity.
But the problem with many people and many ideas and one
President's name is a problem that relates to the complexity of
government. Aren't we better off focusing on how we can change
that complexity, for instance taking agencies--I would not at
this point suggest EPA, by the way, but something like, say,
for instance, the Surface Coal Mining Administration--that is
already operated by States, and turning that into an interstate
compact and letting the States deal with that so that they can
decide policy and not have the President and his minions or his
delegates interfering?
Mr. Strauss. Well, I think that cooperative federalism is
often a useful way to go. One has to be careful not to try to
use it in situations where States will be attempting to take
advantage of one another but where you can reliably see that
all have the same interests, for sure.
Mr. Cannon. I suspect when you say taken advantage, are you
suggesting that if they had an interstate compact instead of
Federal control, some States might want to make it cheaper and
easier to produce coal than other States?
I am joking here a little bit, because I actually was at
Interior and oversaw the writing of those regulations, both for
reclamation and enforcement.
But my point is that it may actually be healthy to have the
debate in States. Do we want to have lower standards of
reclamation or do we want to preserve the quality of our State.
I think that the States are pretty much, in that particular
case and generally speaking, going to demand a higher standard
than I think even the Federal Government would demand.
Mr. Strauss. It is entirely possible.
The risk in interstate compacts that the framers foresaw
and which has often come up in the past is that North Carolina
apple producers will want to do something that puts Washington
apple producers at a disadvantage. That is the matter against
which you have to be----
Mr. Cannon. And hence the founders' requirement in the
Constitution that we do it by Federal legislation. See, that is
the context.
Mr. Strauss. Right.
Mr. Cannon. Thank you.
Let me just point out, I think that the other place where--
I don't think that we have actually disagreed, but as a matter
of emphasis, I think sort of the core of your statement goes to
what is forbidden by Congress, is a term you used. Isn't that
really our problem, to be clear in how we delegate? Because if
we say the administrator of EPA will make this decision, we
have the ability to limit the President, he is then left with
the Constitutional context but with a stronger position as to
the decision he makes, and ultimately fire me if he disagrees
with the President.
Mr. Strauss. I think we are getting into here into what may
seem a subtle disagreement between myself and the current dean
at the Harvard Law School, Elena Kagan, who has taken the
position, which is a respectable position in academic circles,
that it ought to be presumed that when Congress passes a
statute empowering the head of EPA or whomever to do something,
that actually the President does have the right to call the
shots, but that Congress could always say, ``No, no, we mean
explicitly the head of the EPA and, Mr. President, you stay out
of it.''
My position rather is when you pass a statute that says to
the EPA you are to set Clean Air Act standards, and we want you
to set Clean Air Act standards following the following
criteria, which don't happen to include cost, that is enough,
because if it once gets into the White House, you are never
going to have that control over is it just the science, is it
just the best available technology, or is somebody figuring out
that, well, this would be less costly for the economy, which
wisely or not you in Congress have taken out of EPA's
consideration.
Mr. Cannon. I think that I probably agree with Ms. Kagan on
that particular point, but it is narrow.
Thank you for your testimony.
I yield back.
Mr. Strauss. Thank you very much.
Mr. Johnson. Thank you.
And thank you for your testimony, Professor Strauss.
Mr. Strauss. I won't have to leave for another 45 minutes.
I will stay at the table, if you don't mind.
Mr. Johnson. All right.
Dr. Copeland, please begin your testimony.
TESTIMONY OF CURTIS W. COPELAND, Ph.D., SPECIALIST IN AMERICAN
NATIONAL GOVERNMENT, CONGRESSIONAL RESEARCH SERVICE,
WASHINGTON, DC
Mr. Copeland. Thank you very much, Mr. Johnson, Mr. Cannon.
Thank you very much for inviting me here to discuss Federal
rulemaking and the unitary executive principle.
Since 1981, the center of presidential influence on
rulemaking has been OMB's Office of Information and Regulatory
Affairs, which must approve most significant rules before they
are published in the Federal register.
OIRA's role has varied by presidential administration, but
during the current Bush administration it has returned to the
gatekeeper role that it had during the Reagan years. That
gatekeeper role has been manifested in various ways, including
an increased emphasis on cost-benefit analysis during OIRA
reviews, an early increase in the use of return letters, the
increased use of informal OIRA reviews of agency rules,
extensions of OIRA reviews for months or even years beyond the
90-day time limit, the development of OMB bulletins on peer
review, risk assessment and agency guidance practices.
Also, Executive Order 13422, among other things, eliminated
the specific requirement that agency regulatory policy officers
report to agency heads and gave those officers the general
authority to control rulemaking activity in the agencies. The
order also expanded OIRA's reviews to include significant
agency guidance documents. And taken together, all of these
actions by the Bush administration represent what appears to be
the strongest assertion of presidential power in the area of
rulemaking in at least 20 years.
There seem to be at least three perspectives regarding
presidential power and rulemaking. One is the unitary executive
principle position, which asserts that the President should be
able to make the final decision regarding substantive agency
rules, even when Congress has assigned rulemaking activities to
the agencies.
Another is the traditional or classical perspective, which
says the President cannot make the final decision on rules
assigned to the agencies, but can attempt to influence agency
officials up to and including firing them if they disagree.
The third position, as Professor Strauss just said, is one
advocated by Dean Elena Kagan of Harvard University, in which
the President can determine the substance of agency rules, but
not if Congress has specifically prohibited or limited the
presidential intervention.
Ultimately, though, these three positions may represent
distinctions without a substantive policy difference, for in
all three the President can ultimately dictate the outcome if
he is willing to pay the political cost associated with the
dismissal of an appointee.
One of the clearest examples of presidential power in the
area of rulemaking occurred in relation to a recent EPA rule on
ozone. It was clear from the memoranda and letters later
released that EPA initially resisted but ultimately adopted
OIRA's and the President's position on the rule.
Notably, the President's authority to make the final
decision in agency appeals of OIRA decisions was established by
executive order during the Clinton administration.
The EPA ozone case was somewhat unique in that it pulled
back the curtain on how final regulatory decisions can be made
under presidential review. However, in many cases it is very
difficult for outsiders to know what effect OIRA or the various
presidential initiatives have had on particular rules.
For example, although OIRA says it has its greatest impact
on rules during informal reviews, it also says that agencies
should not disclose the changes made during those reviews to
the public, even after the rules are published in the Federal
Register.
Also, it is currently unclear what effects recent changes
in risk assessment, peer review, guidance documents and
regulatory policy officers are actually having on agency rules.
Although all regulations start with an act of Congress,
Congress has been arguably less active than the President in
recent years in controlling the rulemaking agenda. If Congress
decides it wants to asserts more authority in agency
rulemaking, it would have a number of options.
For example, it could, one, ask nominees during the
confirmation process how they would react to presidential
rulemaking direction that was contrary to statutory
requirements. Two, consider giving agency heads ``for cause''
removal protection. Three, consider restricting the ability of
OIRA to review certain types of rules. Four, specifically
indicate that the agency head, not the President, has final
rulemaking authority in certain areas. Five, increase the
transparency of OIRA's review process. And, six, be more
specific in its delegations of rulemaking authority to the
agencies.
Mr. Chairman, I am happy to conclude my prepared statement.
I would be happy to answer any questions at this time.
[The prepared statement of Mr. Copeland follows:]
Prepared Statement of Curtis W. Copeland
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Johnson. Thank you, Dr. Copeland.
Mr. Gattuso, please proceed.
TESTIMONY OF JAMES L. GATTUSO, ESQ., SENIOR FELLOW IN
REGULATORY POLICY, ROE INSTITUTE FOR ECONOMIC POLICY STUDIES,
THE HERITAGE FOUNDATION, WASHINGTON, DC
Mr. Gattuso. Mr. Chairman, Members of the Subcommittee,
thank you for inviting me here today to discuss this important
topic.
President John Kennedy is said once to have told a
petitioner in his office, ``I agree with you, but I don't know
if the government will.'' And that statement encapsulates in
many ways the questions being discussed today. To what extent
can or should the President be able to ensure that his views
and priorities are reflected in the decisions of the executive
branch.
Charged in the Constitution with taking care that the laws
be faithfully executed, Presidents often find their efforts
frustrated by the machinery of the executive branch which they
themselves head. Nowhere is the challenge greater than in the
area of regulation. Over 50 agencies produce thousands of new
rules each year, and some 70,000 pages in the Federal Register.
That is why starting a generation ago Presidents began to
establish systematic review processes for the promulgation of
regulations.
Since the first review processes were established, seven
Administrations, five Republican and two Democratic, have built
upon them. Each has changed the system in various ways, most
improving upon that of its predecessor, but none has challenged
its basic utility or legitimacy.
The debate over the Constitutional status of the system is
joined, however, when that system conflicts with congressional
assignments of responsibility or discretion to others within
the executive branch. In such cases, some have argued,
including the earlier witnesses today, that the President may
not substitute his judgment for the judgment of the officer
selected by the President to perform a particular duty. In
other words, the President is not the ``decider'' but merely
the ``overseer'' of decisions by others.
In my view, the problem with this contention is that the
Constitution invests executive power in a President of the
United States of America, not in plural Presidents, not in a
President and other officers designated by Congress, but in a
President. The idea that the executive power is shared or can
be unbundled is contrary to the common sense meaning of the
language of Article 2.
It also would be a surprise to millions of people voting
today in Indiana and North Carolina to hear that their votes
are not for a President who can decide issues, a President who
can set policy, but merely an overseer of decisions by others,
a consultant, someone who guides but does not lead. I think
that is contrary to the common understanding of our political
system.
That said, I believe also that the theoretical differences
in the debate over the unitary executive may not come down to
much in practical application. There may be less here than
meets the eye.
Critics of the unitarian executive concept largely
recognize the President's power to articulate priorities and
views, request adherence to them and dismiss those that do not
help carry out his agenda. Conversely, most proponents of the
unitary executive view accept Congress' power to assign initial
responsibility and duties to other officers in the executive
branch as long as the President has ultimate authority over the
policies that are set.
In practice, executive branch officers, being appointees of
the President, in the vast majority of cases accept the
articulated priorities of the President, and when they do not,
resignation or dismissal is the next likely option.
When that resignation or dismissal is not on the table
explicitly, it is always on the table implicitly. As I think
anyone who has served in the executive branch would realize,
that if they explicitly contest a specific decision of the
President or someone who is representing or speaking for the
President, they can do that, but they had better have their
bags packed just in case.
And frankly, this is as it should be for many reasons. The
most important of these, and perhaps counter-intuitively, is
the check that clear responsibility provides over presidential
power. A President cannot simply mumble, ``My hands are tied,''
when he is ultimately responsible for decisions. I think that
limits presidential power and is good for our political system.
Critically, however, none of this means that Congress has
no authority in regulatory policy. In fact, it still has
primary authority. This can be exercised in several ways.
Congress can simply make a statute more explicit. Or, even
better, make its intent clear in the first instance when
legislating. Secondly, under the Congressional Review Act of
1996, a particular regulatory decision may be specifically
disapproved by Congress under expedited rules of procedure.
Thirdly, Congress' influence over regulatory policy could
be expanded through the creation of institutions within
Congress, such as a congressional regulation office. Such an
office, which would be similar to the Congressional Budget
Office, could review the regulatory impact of legislative
proposals and report on the effects of rules adopted by
agencies. In this way, a congressional regulation office could
act as both a complement to and a check on the power of OIRA.
Thank you for your time. I will be glad to answer any
questions.
[The prepared statement of Mr. Gattuso follows:]
Prepared Statement of James L. Gattuso
Madam Chairman and Members of the Subcommittee: thank you for
inviting me here today to discuss this important topic.\1\
---------------------------------------------------------------------------
\1\ The views I express in this testimony are my own, and should
not be construed as representing any official position of The Heritage
Foundation.
---------------------------------------------------------------------------
``I agree with you, but I don't know if the government will,''
President John Kennedy is said to have once told a visitor.'' \2\
Kennedy's lament encapsulates in many ways the questions being
discussed today. To what extent can--or should--a president be able to
ensure that his views and priorities are reflected throughout the
executive branch?
---------------------------------------------------------------------------
\2\ Quoted in Elena Kagan, ``Presidential Administration,'' 114
Harvard L. Review 2245 (2001).
---------------------------------------------------------------------------
It's not just a matter of constitutional principle. Perhaps the
greatest challenge faced by presidents in this regard is a practical
one. Charged by the constitution with ``tak[ing] care that the laws be
faithfully executed,'' they often find their efforts frustrated by the
machinery of the executive branch which they head. Reflecting this
frustration, Harry Truman predicted difficulties for his successor, the
former general Dwight Eisenhower: ``[H]e'll say, 'Do this! Do That!'
And nothing will happen.'' \3\
---------------------------------------------------------------------------
\3\ Ibid.
---------------------------------------------------------------------------
Nowhere is the challenge been greater than in the area of
regulation. More than 50 agencies, ranging from the Animal and Plant
Inspection Service to the Bureau of Customs and Border Protection, have
a hand in federal regulatory policy. With nearly 250,000 employees,
they produce over 4,000 new rules--and some 70,000 pages in the Federal
Register--each year.
Managing this regulatory machinery in a way that not only reflects
the president's priorities but faithfully executes the will of Congress
and the mandates of the courts is no easy task. That is why, starting a
generation ago, presidents began to establish systematic review
processes for the promulgation of regulations.
The first such process was created in 1971, when President Richard
Nixon required regulatory agencies to perform ``quality of life''
analyses of significant new regulations. Supervised by the Office of
Management of Budget, the analyses were to outline regulatory analyses
and their costs.\4\
---------------------------------------------------------------------------
\4\ See, Murray Weidenbaum, ``Regulatory Process Reform: From Ford
to Clinton,'' Regulation (1997).
---------------------------------------------------------------------------
Gerald Ford expanded on this process, making control of regulatory
growth part of his war on inflation, requiring agencies to prepare
``Inflation Impact Statements,'' which were reviewed by the White House
Council on Wage and Price Stability. Ford also set up a cabinet-level
group to focus on other initiatives to control the cost of regulation.
Despite a different party affiliation, Jimmy Carter continued--and
even expanded--regulatory review mechanisms during his Administration,
continuing the practice of conducting economic analyses of proposed
regulations and setting up a cabinet-level Regulatory Analysis Review
Group to review proposed new rules.
Upon taking office, Reagan established a ``Task Force on Regulatory
Relief,'' chaired by Vice President George Bush, to oversee review of
the regulatory process. In addition, he issued an executive order--E.O.
12291--detailing the review system. And perhaps most importantly from
an institutional point of view, he charged the newly created Office of
Information and Regulatory Affairs with oversight of that process.
The Reagan executive order on regulation continued in place during
President George Bush's term, with a cabinet-level Council on
Competitiveness headed by the Vice President taking the place of the
Task Force on Regulatory Relief. OIRA continued to manage the review
process, although no permanent OIRA chief was ever confirmed.
In 1993, President Bill Clinton replaced the Reagan-era Executive
Order on regulatory review procedures with one of his own, E.O. 12866.
Among the changes in the Clinton order were greater transparency
requirements and a limitation of review requirements to ``significant''
rules. But the basic structure of the review system was kept in place.
Further reflecting the continuing stability of the review system,
President George W. Bush has kept the Clinton executive order in place.
During his tenure, however, OIRA has issued a series of guidance
documents for agencies--rather from a ``best practices'' guide for
regulatory impact analyses, to expanded requirements for peer review--
to improve the consistency and quality of reviews under the executive
order. Most recently, the Administration amended the executive order in
several, relatively minor, ways----including expanding the role of
agency ``regulatory policy officers.''
Today--37 years after the first requirements were imposed, and 28
years after the creation of OIRA--centralized regulatory review is an
almost universally accepted part of regulatory landscape. Since the
first review processes were established, seven Administrations--five
Republican and two Democratic--have built upon them. Each changed the
system in various ways, most improving upon that of its predecessor,
but none has challenged its basic utility or legitimacy.
As six former OIRA Administrators--including Sally Katzen, the
administrator under Bill Clinton--wrote in a 2006 joint letter: ``All
of us . . . recognize the importance of OIRA in ensuring that federal
rules provide the greatest value to the American people. In our view,
objective evaluation of regulatory benefits and costs, and open,
transparent, and responsive regulatory procedures, are necessary to
avert policy mistakes and undue influence of narrow groups.'' \5\
---------------------------------------------------------------------------
\5\ James C. Miller III, Christopher DeMuth, Wendy L. Gramm, Sally
Katzen, John Spotila and John D. Graham, letter the Honorable Susan M.
Collins and Joseph Lieberman, September 20, 2006.
---------------------------------------------------------------------------
And, despite early questions by some, the constitutionality of the
idea of centralized White House review of rulemaking is today not
seriously challenged. As early as 1981, in fact, the D.C. circuit
recognized ``the basic need of the President and his White House staff
to monitor the consistency of agency regulations with Administration
policy.'' \6\
---------------------------------------------------------------------------
\6\ Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981).
---------------------------------------------------------------------------
Moreover, it could be argued that some type of review is
constitutionally required in order for the president to reasonably meet
his constitutional duty to ``take care that the laws are faithfully
executed''.
To the extent there is any debate over the constitutional
legitimacy of the process, it is when it conflicts with congressional
assignments of responsibility or discretion to inferior officers within
the executive branch. In such cases, some have argued, the president
may not substitute his judgment for the judgment of the officer
selected by Congress to perform a particular duty. As argued by Peter
Strauss of Columbia Law School in previous testimony, the president is
not ``the decider,'' but merely the ``overseer of decisions by
others.'' \7\ While the chief executive oversees the performance of
other executive branch officers, it is argued, he may not assume the
decisional responsibility granted to them by Congress. Thus, in this
view, the executive order's provision that disagreements between a
regulatory agency head and the OIRA administrator be decided by the
president is unconstitutional.
---------------------------------------------------------------------------
\7\ Testimony of Peter Strauss before he Subcommittee on
Investigations and Oversight, Committee on Science and Technology,
April 26, 2007.
---------------------------------------------------------------------------
The problem is that this theory flies in the face of the principle
that executive power under the constitution is not shared--the concept
of a ``unitary executive.'' Article II of the constitution flatly
states that, ``[t]he executive power is vested in a President of the
United States of America.'' Not in plural ``presidents,'' or ``a
president and other officers designated by Congress,'' but in ``a
President.''
The unitary executive concept is not an exotic theory, but one of
the most commonly-held tenets of our constitutional system. As Steven
Calabresi and Saikrishna Prakash have observed: ``[T]hat the President
must be able to control the execution of federal laws is easily
understood and resonates strongly with the very earliest lessons we
learn about our constitutional system.'' \8\ And, consistent with those
lessons, the framers of the constitution clearly rejected the idea of a
shared executive--rejecting proposals for a multiple presidency and for
a decision-sharing council.
---------------------------------------------------------------------------
\8\ Steven G. Calabresi and Saikrishna B. Prakash, ``The
President's Power to Execute the Laws,'' 104 Yale L.J. 541 (1994).
---------------------------------------------------------------------------
In modern America, there are of course many examples of non-unitary
executives. Most states, for example, have one or more elected
statewide executive officers besides the governor, ranging from
attorneys general to insurance commissioners. Christopher Berry and
Jacob Gerson of the University of Chicago, in a forthcoming article,
write in favor of a similar system for the federal government,
suggesting the possibility of a ``directly elected War Executive,
Education Executive, or Agriculture Executive.'' \9\ However, even to
outline the idea of an ``unbundled executives'' underscores the fact
that that is not the system we currently have.
---------------------------------------------------------------------------
\9\ Christopher R. Berry and Jacob E. Gersen, ``The Unbundled
Executive,'' forthcoming, University of Chicago Law Review.
---------------------------------------------------------------------------
Of course, the differences between the sides in the current debate
over the president's powers are not that stark. The unitary executive
concept does not deny to Congress the assignment of duties to
individual officers within the executive branch, as long as the
president is able to exercise ultimate responsibility.
Conversely, few advocate a fully unbundled executive for the
federal government. For the most part, even critics of the unitary
executive concept recognize the president's power to articulate
priorities and views, request adherence to them, and to dismiss those
who do not help carry out his agenda.\10\
---------------------------------------------------------------------------
\10\ With Congress in turn, having some ability to prevent such
dismissals, the limitations of which are themselves a matter of debate.
---------------------------------------------------------------------------
This is important, since in practice the president almost never
needs to issue an ``order'' to a regulatory officer make a particular
decision. Even in cases where the president serves as the final arbiter
in a dispute under regulatory review process, the officers involved--
being appointees of the president--almost always accept the articulated
priorities of the president. And when they do not, resignation or
dismissal is the next likely option.
In this sense, the theoretical differences in the debate over the
unitary executive may not come down to much in practical application.
Under most any view, the president can legitimately exercise control
over the rulemaking process.
And this is as it should be, for many reasons. The most important
of these--perhaps counter-intuitively--is the check that clear
responsibility provides over presidential power. Were authority shared
among multiple persons in the executive branch, it would be relatively
easy for the chief executive to avoid accountability for his actions.
He would always be able to point his finger to some other officer, and
mumble ``my hands were tied.'' But with ultimate authority vested in
the president, he is held to account for decisions, enabling voters--as
well as other policymakers--to assign blame or credit.
It should also be noted that a strong, system of centralized
regulatory review, anchored in presidential authority, does not
necessarily imply either more or less regulation. It simply means that
the president's priorities--whatever they are--will be more accurately
represented in decision making.
Lastly, none of this means that Congress has no role--or indeed
does not have the primary role--in the regulatory policy. Just as the
constitution provides the president with executive power, Congress has
ultimate legislative authority. If Congress disagrees with how the
terms of a statute are applied in rules promulgated by the executive
branch, it can simply make the statute more explicit (or even better,
make its intent clear in the first instance).
Moreover, under the Congressional Review Act of 1996, a particular
regulatory decision may be specifically ``disapproved'' by Congress.
The statute--though so far rarely used--provides for expedited
consideration by both Houses of a resolution of disapproval of a
specific rulemaking. If approved by Congress, the resolution can take
effect, even over a presidential veto, given sufficient support in
Congress.
More generally, Congress's influence over regulatory policy could
also be expanded through institutional changes within Congress,
including the creation of a ``Congressional Regulation Office.'' While
Congress today receives detailed information from the Congressional
Budget Office on the state of the budget and on proposals that would
affect the budget, it has no similar source of information on
regulatory programs. A Congressional Regulation Office would help to
fill this gap. Such an office could review the regulatory impact of
legislative proposals and report on the effects of rules adopted by
agencies. In this way, it could act as both a complement to and a check
on OIRA.
Lastly, to minimize the need for White House intervention in agency
decision-making, policymakers should strengthen the ability of agencies
themselves to evaluate the effects of their own regulations. Review and
analysis need not be an adversarial process. Ideally, critical
examination of the purpose and effects of proposed rules begins within
the agency itself. To facilitate this, policymakers should ensure that
each agency has sufficient analytical resources, and well as well-
designed internal review office to ensure that those resources are used
meaningfully.
Systematic and centralized regulatory review of federal regulations
is not only a legitimate use of presidential power, but--given the vast
scope of rulemaking--virtually essential to taking care that the laws
are faithfully executed. Congress nevertheless retains a primary role
in regulatory policy--which can be exercised through more explicit
legislation, review of specific rulemakings, and by expanding its own
institutional capability to review and analyze the effects of rules.
Thank you for your time. I would be glad to answer any questions.
Mr. Johnson. Thank you, Mr. Gattuso.
Dr. Melberth, would you grace us with your testimony,
please.
TESTIMONY OF RICK MELBERTH, DIRECTOR OF REGULATORY POLICY, OMB
WATCH, WASHINGTON, DC
Mr. Melberth. Mr. Johnson, Mr. Cannon, thank you for the
opportunity to appear today.
OMB Watch has monitored Federal regulatory policy and
changes for the last 25 years. It is our view that today's
regulatory process goes far beyond centralizing regulatory
authority and instead gives the President unique and
unparalleled authority, thus subordinating agency
responsibility to implement statutory requirements.
The application of the unitary theory gives the President
control over substantive decision-making of agencies. This has
the perverse impact of injecting and elevating politics into
decisions where science and rational judgment should prevail.
In the end, we believe the public is poorly served by
applying this unitary theory to regulatory decision-making and
it threatens the Constitutional separation of powers.
I would like to focus my testimony on one aspect of the
changes to the regulatory process created by President Bush,
specifically the changes made by Executive Order 13422 to the
concept of the regulatory policy officer.
The role of the RPO as envisioned by EO 12866 was to
coordinate and implement agency responsibilities regarding
regulatory planning and review. The RPO's role, in practice,
was somewhat different across agencies, but the essential
points are that the RPOs were appointed by agency heads,
reported to these agency heads, and were participants in the
regulatory process within the agency, not the driver of that
process.
The final responsibility for agency rulemaking rested with
a politically-appointed agency head confirmed by the Senate.
Two of President Bush's amendments to EO 12866 impact the
RPO. First, agencies are now required to designate a political
appointee as their RPO. Second, the officer's responsibilities
are increased. The RPO is now charged with approving an
agency's regulatory plan, a responsibility previously given to
the agency head.
The responsibilities of these agencies have been
substantially increased, yet they are not subject to Senate
confirmation in their role as RPOs and their actions are not
public. Subsequently, the RPOs are not likely to be accountable
to Congress or to the American people.
We have also expressed concern that the point at which a
rulemaking shall commence is unclear. This ambiguity could
allow the RPO to exert influence at any stage in the rulemaking
process and could prevent important scientific research or
analysis from taking place. Nor do we know when or whether an
RPO has prevented a rulemaking from taking place or the hurdles
that may exist to begin or continue a rulemaking.
What remains among our greatest concerns, however, about
the RPO structure is the opportunity for unprecedented
interference in the information that goes into those regulatory
decisions. The RPO structure has the potential to allow
interference in the collection and analysis of all types of
information necessary to make important public health and
safety, environmental and workplace regulatory decisions.
Having been given the power to initiate regulations, we
fear the RPO will further decrease agency rulemaking discretion
and increase the trend toward OIRA dictating agency rulemaking.
OIRA's involvement in agency decision-making is already well
documented. For example, in September 2003, GAO issued a report
on OMB's role in reviewing agency health safety and
environmental rules and among the findings are that OIRA's
greatest influence, by its own admission, is over rules in the
period before draft rules are submitted to OIRA for review.
OIRA made changes to rules regarding tire pressure safety,
control of air omissions, hazardous air pollutant listings, and
minimizing adverse environmental impacts from cooling water
intake structures.
Currently, various White House officials are interfering in
a National Oceanic and Atmospheric Administration rule to
extend protections to the North Atlantic Right Whale. In April
2008, documents obtained by the Union of Concerned Scientists
and released by the House Oversight and Government Reform
Committee show that not only is OIRA delaying the Right Whale
rule, but it is actively working to undermine the scientific
basis for the regulation.
The documents show that two offices, the Council of
Economic Advisors and the Office of Science and Technology
Policy, reanalyzed aspects of the regulatory science and
attempted to use their analyses to question NOAA's findings.
Another document shows the office of the Vice President
questioned the validity of published studies NOAA is using as
the basis for the rule and contended the agency lacks ``hard
data.''
This certainly appears to be a situation in which political
appointees are attempting to change the result of rigorous
scientific analysis by altering data to fit a political result
where science and rational judgment should prevail. Today's
regulatory structure allows political appointees to have
greater control over the substance of regulations. Politics
supersedes scientific and technical information that is
critical to protecting our environment and health and safety.
This concludes my remarks. Thank you.
[The prepared statement of Mr. Melberth follows:]
Prepared Statement of Rick Melberth
Thank you for the opportunity to testify before you today. I am
Rick Melberth, Director of Regulatory Policy for OMB Watch. OMB Watch
is a nonprofit, nonpartisan research and advocacy center promoting an
open, accountable government responsive to the public's needs. Founded
in 1983 to remove the veil of secrecy from the White House Office of
Management and Budget, OMB Watch has since then expanded its focus
beyond monitoring OMB itself. We currently address four issue areas:
right to know and access to government information; advocacy rights of
nonprofits; effective budget and tax policies; and the use of
regulatory policy to protect the public.
It is in the context of OMB Watch monitoring federal regulatory
policies for the past 25 years that I appear before you today. My
testimony focuses on 1) a brief history of centralized review of agency
regulations, 2) the changes to the regulatory process made by the Bush
administration, 3) issues of concern with requiring Regulatory Policy
Officers (RPOs) to be presidential appointees, and 4) a few examples of
executive branch intrusions into agency decision making processes. It
is our view that today's regulatory practices go far beyond
``centralizing'' regulatory review and give the president unique and
unparalleled authority, thus subordinating agency responsibility to
implement statutory requirements. The application of the unitary theory
gives the president and a cadre of employees that represent the
president control over the substantive decision making of agencies.
This has the perverse impact of injecting and elevating politics into
decisions where science and rational judgment should prevail. In the
end, we believe the public is poorly served by applying this unitary
theory to regulatory decision making, and it threatens the
constitutional separation of powers.
I. History of Centralized Review
The 1980 Paperwork Reduction Act, among other things, created a
small office within the Office of Management and Budget (OMB), the
Office of Information and Regulatory Affairs (OIRA), to coordinate the
information collection activities of federal agencies. Designed as a
good government law, the PRA was used as a vehicle by the Reagan
administration to reduce government red tape, a Reagan campaign
promise. It gave OIRA the power to approve any collection of
information from 10 or more people, including paperwork associated with
implementing regulations.
In February 1981, a few weeks after taking office, President Reagan
issued Executive Order 12291 (E.O. 12291) which established a major
role for OMB--and OIRA in particular--in the review and approval of
proposed rules put forth by federal agencies. Under the order the
Director of OMB ``is authorized to review any preliminary or final
Regulatory Impact Analysis, notice of proposed rulemaking, or final
rule based on the requirements of this Order.'' \1\ The other notable
condition imposed by this order was the requirement that agencies use a
cost versus benefits analysis to be reviewed by OIRA as an important
factor justifying the need for regulatory action.
---------------------------------------------------------------------------
\1\ Executive Order 12291, Sec. 3(e)(1). Federal Register Vol. 46,
p. 13193, February 19, 1981.
---------------------------------------------------------------------------
There have been a number of reports and congressional hearings
demonstrating how E.O. 12291 shifted the balance of power, giving the
White House OMB new leverage over agencies. OMB was known to have
changed the substance of agency rules and for agencies that bucked the
tide, OMB would keep rules under review forever, a type of hostage
taking. This led to OMB being nicknamed the ``black hole.'' Moreover,
E.O. 12291 and the PRA gave OIRA several bites of the same apple. It
reviewed an agency's proposed rule, its paperwork to carry it out, and
its final rule. At any time, OMB could force the agency to do what it
wanted. And in the backdrop was always fear that OMB also controlled
the agency's budget. OMB carried a big stick.
Still not satisfied that it had enough control over agency
rulemaking, in January 1985, President Reagan issued a second executive
order (E.O. 12498) that created a regulatory planning process to
coordinate the agencies' regulatory plans with the administration's
regulatory objectives. An agency was now to ``submit to the Director of
the Office of Management and Budget (OMB) each year, starting in 1985,
a statement of its regulatory policies, goals, and objectives for the
coming year and information concerning all significant regulatory
actions underway or planned.'' \2\ One effect of this order was to
provide OMB with access to agency decision making before proposed rules
were submitted to OMB for review under E.O. 12291, and before the
public's right to comment on proposed rules as set out in the
Administrative Procedure Act (APA).
---------------------------------------------------------------------------
\2\ Executive Order 12498, Sec. 1(a). Federal Register Vol. 50, p.
1036, January 8, 1985.
---------------------------------------------------------------------------
As noted at the time, OMB felt it was too hard to change the
substance of rules when it did its E.O. 12291 review. They argued that
various constituencies and advocacy efforts were already in place. As
OIRA Administrator Douglas Ginsburg said in December 1984: ``Agencies
have been working on proposed regulations long before they come to
notice and comment. Then we get ourselves in a confrontation with the
agency over the end product.'' \3\ Accordingly, OMB wanted to intercede
in the agency process as early as possible. Hence, the idea for E.O.
12498 was born.
---------------------------------------------------------------------------
\3\ OMB Watch, Through the Corridors of Power: A Citizen's Guide to
Federal Rulemaking, (Washington, DC: OMB Watch, 1987), p. 26.
---------------------------------------------------------------------------
These two orders, combined with the statutory authority granted
under the PRA, created what we now recognize as centralized regulatory
review, i.e., White House review of regulations for consistency with
the president's policy priorities. The power to coordinate information
collection and to review proposed and final regulations in a policy
office of the White House, made OMB the equivalent of a political
censor over agency actions. Even if it did not censor, its authority to
subordinate agency decision making was clear.
As Christopher DeMuth and Douglas Ginsburg, both OIRA
administrators, wrote in the Harvard Law Review (March 1986), White
House centralized review of regulations was an ``appropriate response
to the failings of regulation.'' \4\ They noted that regulation tends
``to favor narrow, well-organized groups at the expense of the general
public'' \5\ and that centralized review, on the other hand,
``encourages policy coordination, greater political accountability, and
more balanced regulatory decisions.'' \6\ Yet our perspective is
exactly opposite. Centralized review, as epitomized by the role of
OIRA, has further politicized the rulemaking process, brought less
accountability, and produced less protective rules.
---------------------------------------------------------------------------
\4\ DeMuth, Christopher C.and Douglas H. Ginsburg, ``Commentary:
White House Review of Agency Rulemaking'' in Harvard Law Review, Vol.
99, (1986) p. 1081.
\5\ Ibid., p. 1080.
\6\ Ibid., p. 1081.
---------------------------------------------------------------------------
During the presidency of George H. W. Bush, the Quayle Council on
Competitiveness emerged to further politicize the regulatory process by
giving the Vice President's office authority to oversee OIRA's actions.
The Quayle Council also provided greater access to campaign
contributors and business interests concerned with regulatory burdens--
and none of its activities were required to be disclosed. The Quayle
Council interfered with numerous health, safety, and environmental
regulations to the benefit of regulated businesses.\7\ It even imposed
an extended moratorium on regulations in 1992. All this contributed to
a highly centralized reviewing authority cloaked in secrecy. To the
public, Congress and the courts, the agency issuing the regulation was
held accountable; yet the White House, through OMB and the Quayle
Council, was pulling the strings.
---------------------------------------------------------------------------
\7\ Bass, Gary D., ``Executive Management'' in Changing America:
Blueprints for the New Administration, edited by Mark Green. New York:
Newmarket Press, 1992.
---------------------------------------------------------------------------
On the first day that President Clinton took office in 1993, he
ended the Quayle Council and called for a more accountable and
transparent rulemaking process. Several months later, in September, he
revoked the Reagan orders but consolidated their requirements in
Executive Order 12866. This is the executive order, with amendments,
that provides the framework for the current regulatory process.
Most of the elements of centralized review as defined by the Reagan
orders remained intact, including the use of cost-benefit analysis,
annual regulatory planning, the preparation of regulatory impact
analyses, and the prohibition on any agency action on a rule until
after it has been reviewed by OIRA. The biggest change was in limiting
the regulations to be reviewed to the most significant rules, whereas
the Reagan orders required all regulations to be reviewed by OIRA. In
addition, the order requires greater transparency on the part of OIRA
regarding communications about proposed rules with those outside of
government. It also requires each agency head to establish a regulatory
policy officer ``who shall report to the agency head.'' \8\ Note the
requirement that it is the agency head who shall appoint the RPO and
the agency head to whom the RPO reports.
---------------------------------------------------------------------------
\8\ Executive Order 12866, Sec. 6(a)(2). Federal Register Vol. 58,
p. 51735, September 30, 1993.
---------------------------------------------------------------------------
II. Bush Administration Regulatory Changes
President George W. Bush has made two amendments to E.O. 12866
during his presidency. The first, in February 2002, received little
public attention and only had a minor impact on the regulatory process.
E.O. 13258 removed from the Clinton order the roles assigned to the
Vice President and reassigned those duties to the Director of OMB and
other senior policy advisors. E.O. 12866 had the Vice President playing
the role of mediator between the agency heads and OMB when disputes
arose over a regulatory policy decision.
Even though the Vice President's role was removed by the Bush
order, it turns out that Vice President Cheney has played an active
role in shaping selected regulations. In a Washington Post series about
the Vice President, the paper recounted his personal involvment in
overturning an Endangered Species Act decision affecting the Klamath
River basin in Oregon, among others.\9\ Later in this testimony, I
provide more evidence of the Vice President's involvement.
---------------------------------------------------------------------------
\9\ Becker, Jo and Bart Gellman, ``Leaving No Tracks.'' The
Washington Post, June 27, 2007. ``Because of Cheney's intervention, the
government reversed itself and let the water flow in time to save the
2002 growing season, declaring that there was no threat to the fish.
What followed was the largest fish kill the West had ever seen, with
tens of thousands of salmon rotting on the banks of the Klamath
River.''
---------------------------------------------------------------------------
The second change came on January 18, 2007, when President Bush
issued amendments to E.O. 12866 which continued the shift toward
further centralizing regulatory power in OIRA. These amendments,
prescribed in E.O. 13422, shift power away from the federal agencies,
which are given regulatory power by legislative enactments, and usurp
congressional powers. It is another brick in the foundation this
administration has been building for a unitary theory of the
presidency, one in which not only the executive branch is superior to
the other branches in our constitutional system but that the White
House exhibits significant control over the agencies.
After E.O. 13422 was issued, OMB Watch issued an analysis of the
changes and expressed our concern about this continued accretion of
power in OIRA. We wrote that among the changes:
The executive order shifts the criterion for
promulgating regulations from the identification of a problem
like public health or environmental protection to the
identification of a ``specific market failure (such as
externalities, market power, lack of information . . . that
warrant new agency action.''
It makes the agencies' Regulatory Policy Officer a
presidential appointee and gives that person the authority to
approve any commencement or inclusion of any rulemaking in the
Regulatory Plan, unless specifically otherwise authorized by
the agency head.
It requires each agency to estimate the ``combined
aggregate costs and benefits of all its regulations planned for
that calendar year to assist with the identification of
priorities.''
It requires ``significant'' guidance documents to go
through the same OMB review process as proposed regulations
before agencies can issue them.
It also requires ``economically significant''
guidance documents (those that are estimated to have at least a
$100 million effect on the economy, among other criteria) to go
through the same OMB review process as ``significant''
regulations.\10\
---------------------------------------------------------------------------
\10\ OMB Watch, A Failure to Govern: Bush's Attack on the
Regulatory Process, March 2007, p. 3. Available at http://
www.ombwatch.org/article/articleview/3774
I want to focus my testimony at this point on one aspect of these
changes created by E.O. 13422, the regulatory policy officer.
III. The Regulatory Policy Officer (RPO)
As noted above, the regulatory policy officer is a creation of the
Clinton era executive order. Under Section 6 of E.O. 12866, Centralized
Review of Regulations, the responsibilities of the agencies and of OIRA
are outlined. Section 6(a)(2) states:
Within 60 days of the date of this Executive order, each agency
head shall designate a Regulatory Policy Officer who shall
report to the agency head. The Regulatory Policy Officer shall
be involved at each stage of the regulatory process to foster
the development of effective, innovative, and least burdensome
regulations and to further the principles set forth in this
Executive order.
The role of the RPO as envisioned was to coordinate and implement
agency responsibilities regarding regulatory planning and review of
regulations. These responsibilities are described in the preceding
paragraph of the order and include: 1) allowing ``meaningful'' public
participation in the regulatory process, 2) informing stakeholders of
pertinent regulations, 3) providing OIRA with a list of planned
regulatory actions, 4) providing OIRA with cost-benefit analyses for
significant regulatory actions, and 5) making available to the public
information on proposed and final regulations.
The RPO's role in practice was somewhat different across agencies.
Not every agency maintained one designated RPO. The Department of
Agriculture (USDA), for example, had various officials serving as de
facto RPOs. Issue expertise determined where responsibilities rested on
a specific regulation. In the Department of Energy, the RPO functioned
as an agency counselor. The RPOs were not necessarily political
appointees in all agencies, but the final regulatory decisions within
agencies were in the hands of political appointees ultimately, usually
the agency head or his or her designee. The essential points are that
RPOs were appointed by agency heads, reported to those respective
agency heads, and were participants in the regulatory process within
the agency, not the driver of that process. The final responsibility
for agency rulemaking rested with the politically appointed agency
head, confirmed by the Senate.
Two of President Bush's amendments to E.O. 12866 impact the RPO.
First, agencies are now required to designate a political appointee as
their RPO, and were to do so within 60 days of the issuance of the
amendments. New text also requires OMB to verify this designation.
Second, in addition to changing the requirements of the designated
RPO, the Officer's responsibilities are increased. The RPO will now be
charged with approving an agency's Regulatory Plan, a responsibility
previously given to the agency head. The amendments state that ``no
rulemaking shall commence nor be included'' for consideration in the
agency's regulatory plan without the political appointee's approval.
The Regulatory Plan includes the most important regulations which an
agency plans in a given year.
In OMB Watch testimony in April 2007, we expressed concern about
the increased politicization these changes may have introduced into
agency decision making:
By requiring the Officer to be a political appointee, the
amendments suggest a further politicization of the regulatory
process. OMB Watch is concerned that by installing a political
appointee as the RPO and increasing the responsibilities, that
appointee will significantly affect an agency's ability to
regulate in a fair and nonpartisan fashion.\11\
---------------------------------------------------------------------------
\11\ Testimony of Gary Bass, Executive Director of OMB Watch before
the House Committee on Science and Technology, Subcommittee on
Investigation & Oversight, April 26, 2007, on ``Amending Executive
Order 12866: Good Governance or Regulatory Usurpation?'' Available at:
http://www.ombwatch.org/article/articleview/4096/1/360?TopicID=7
In late July, 2007, OMB released a list of RPOs for each agency. Of
the 29 RPOs on the list, 27 have been confirmed by the Senate in their
agency roles but not in their role as RPOs. The remaining two are
political appointees who did not require any Senate confirmation. Nine
of the sixteen cabinet level RPOs are General Counsel positions.
OIRA Administrator Susan Dudley framed this as a good government
measure because one person will be accountable for major regulatory
decisions in each agency.\12\ This could not be further from the truth.
The responsibilities of these officials have been substantially
increased, yet they are not subject to Senate confirmation in their
role as RPOs and their actions are not public. Subsequently, the RPOs
are not likely to be accountable to Congress or the American people.
Given the ability to significantly impact regulatory outcomes, these
people should be confirmed by the Senate for these additional job
responsibilities--responsibilities not foreseen when they were
confirmed for their current positions.
---------------------------------------------------------------------------
\12\ Skrzycki, Cindy, ``Bush, Congress Battle to Control
Bureaucracy,'' Bloomberg News, July 17, 2007.
---------------------------------------------------------------------------
We also have expressed concern that the point at which ``a
rulemaking shall commence'' is also unclear. OIRA has provided a vague
and unhelpful definition and has acknowledged the commencement of a
rulemaking may differ from agency to agency.\13\ This ambiguity could
allow the RPO to exert influence at any stage in the rulemaking process
and could prevent important scientific research or analysis from taking
place. Nor do we know when or whether an RPO has prevented a rulemaking
from taking place or the hurdles that may exist to begin and continue a
rulemaking. If the current RPO approach is not changed by the next
president, we encourage Congress to investigate how RPOs perform their
responsibilities, and to establish disclosure policies to close the gap
in transparency of this aspect of the rulemaking process.
---------------------------------------------------------------------------
\13\ In an April 25 memo instructing agencies on how to comply with
the E.O. and the Final Bulletin, OIRA included the following definition
of ``commence'' as it pertains to agency rulemaking: ``The point at
which a rulemaking commences may vary from one agency to the next,
depending on each agency's procedures and practices, and may vary from
rulemaking to rulemaking. As a general matter, a rulemaking commences
when the agency has decided as an institutional matter that it will
engage in a rulemaking. At the latest, the rulemaking will commence
when the rulemaking receives a Regulation Identification Number
(RIN).'' M-07-13, Implementation of Executive Order 13422 (amending
Executive Order 12866) and the OMB Bulletin on Good Guidance Practices
(April%, 2007), available at: http://www.whitehouse.gov/omb/memoranda/
fy2007/m07-13.pdf
---------------------------------------------------------------------------
In some agencies, the amendments related to the RPO may have little
effect on regulatory development. In the case of the Department of
Energy, the RPO is already a political appointee albeit without the
sole responsibility to initiate regulations and without final decision
making authority over regulations (unless one or both powers have been
delegated to the RPO by the agency head). The White House is unlikely
to have a greater or lesser impact on the way in which regulations are
formulated within that agency. Similarly, the process in the Department
of Labor is likely to go unchanged.
In other agencies, however, the RPO change will likely centralize
the regulatory process and create OIRA-like structures within agencies
even though OIRA has been criticized over the years for exerting
political influence. In the case of USDA, this change, if followed,
will end the process of dividing regulatory authority based upon
experience and expertise. Instead, the RPO will ultimately be
responsible for all regulatory decision making and be involved in
regulatory discussions from the beginning of agency considerations.
Furthermore, installing a political appointee where one did not
previously exist will facilitate White House input into agency
regulatory matters.
We acknowledge that a president has the right to oversee agency
decision making and hold accountable those agency heads to whom he has
delegated responsibility. Professor Peter Strauss has pointed out in
his testimony before this Subcommittee and in other testimony and
writings--and others have addressed as well--the distinction between
making that decision and delegating that decision to accountable
political appointees. This debate is an important one to have and to
constantly revisit as each president makes his or her mark upon the
institution of the presidency.
When Congress, however, explicitly legislates that a regulatory
decision shall be made by an agency head and that decision shall be
based on specific criteria, there is virtually no basis for reasonable
people to disagree that the president does not have the authority to
make the decision. The instance of President Bush overriding the EPA
decision in the ozone rulemaking that Prof. Strauss discusses is one
such example of constitutional overreaching.
What remains among our greatest concerns, however, about the RPO
structure as required by E.O. 13422 is the opportunity for
unprecedented interference in the information that goes into those
regulatory decisions before policy makers are rightfully involved in
the final agency decision. For agency experts to do their jobs as
mandated by Congress in statutory delegations to agencies, information
critical to those policy decisions must be free from political
interference. The RPO structure has the potential to allow interference
in the collection and analysis of all types of information necessary to
making important public health and safety, environmental, and workplace
safety regulatory decisions.
But, of course, the public will never know the extent to which RPOs
have stopped, delayed, or interfered with the quality of decision
information because there is no transparency and accountability imposed
on the RPOs. There are numerous documented instances where OIRA has
interfered in agency decisions and in the information used to make
those decisions, as this testimony documents below.
To what extent will the RPO be a de facto OIRA official sitting in
the agency coordinating and carrying out the responsibilities of the
OIRA desk officers during the pre-rulemaking stage? Having been given
the power to initiate regulations, we fear the RPO will further
decrease agency rulemaking discretion and increase the trend toward
OIRA dictating agency rulemaking. Transparency can prove our fear is
groundless.
IV. Executive Office of the President Intrusions into
Agency Decision Making
As I mentioned above, the involvement by OIRA in agency decision
making is well-documented. For example, in September 2003, the General
Accounting Office (GAO) (as the Government Accountability Office was
then known) issued a report on OMB's role in reviewing agency health,
safety, and environmental rules.\14\ Among the findings are that OIRA's
greatest influence over rules is in the period before draft rules are
submitted to OIRA for review, and that rules from EPA and the
Department of Transportation were the rules most significantly changed
and returned. Among the changes OIRA made were to rules regarding:
---------------------------------------------------------------------------
\14\ General Accounting Office, OMB's Role in Reviews of Agencies'
Draft Rules and the Transparency of Those Reviews. September 2003.
Available at: www.gao.gov/cgi-bin/getrpt?GAO-03-929.
tire pressure safety (mostly to do with changing the
---------------------------------------------------------------------------
cost-benefit analysis),
control of air emissions rules (by changing language
that EPA was ``considering'' adoption of standards from
``proposing'' the adoption of standards, thus affecting the
cost-benefit analysis)
hazardous air pollutants from wood product coatings
(by delaying the compliance dates of the rule from 2 to 3 years
after the date of the final rule)
proposed nonconformance penalties for heavy-duty
diesel emissions (by changing EPA's choice of discount rates,
fuel prices, and changing language regarding assumptions)
listing manganese as a hazardous waste (OIRA deferred
action on listing manganese thus killing the rule outright) and
minimizing adverse environmental impacts from cooling
water intake structures (by making changes to which industries
would be covered by the rule by changing scientific and
engineering standards).\15\
---------------------------------------------------------------------------
\15\ This case was challenged in court. The Supreme Court has
recently granted certiorari and will hear this case in its new term.
More recently, we have seen many more examples of OIRA's work to
delay, weaken, or override agency regulations proposed by agencies, and
continued interference in generating the information that goes into
these decisions. The ozone decision is but one instance, although
perhaps the most blatant, of executive branch interference at the
decision making level.
A. Interference in Regulatory Standards
Although the Vice President was removed from the regulatory process
by E.O. 13258, OMB Watch has documented instances in which
representatives from Vice President Cheney's office have been involved
in high profile environmental and national security regulations during
OIRA's meetings with industry representatives, especially in 2007. Not
only did someone from the Office of the Vice President (OVP) attend
meetings about setting the ozone standard, but also attended four
meetings about Department of Homeland Security (DHS) chemical security
regulations. The final rules were actually weaker in their reporting
thresholds than what DHS proposed. According to information posted on
the OMB website, as of November 2007, OIRA had held more than 540
regulatory review meetings since E.O. 13258 was issued in 2002. A
representative from OVP has been present at only 11, about two percent.
However, eight of those 11 meetings have occurred since February 2007,
including the four meetings on the DHS chemical security rule.\16\
---------------------------------------------------------------------------
\16\ OMB Watch, Vice President Reemerging in Regulatory Review
Meetings. November 6, 2007. Available at: http://ombwatch.org/article/
articleview/4067/1/85/?TopicID=2.
---------------------------------------------------------------------------
Currently, various White House offices are interfering in a
National Oceanic and Atmospheric Administration (NOAA) rule to extend
protections to the North Atlantic right whale. OIRA is serving both as
a party to the interference and as a conduit through which other
offices can exert pressure.
After initiating the rulemaking in 1998, NOAA's National Marine
Fisheries Service published a notice of proposed rulemaking in June
2006 which, if finalized as written, would impose a speed limit of 10
knots on large shipping vessels traveling in the Atlantic Ocean during
seasons when the right whale is most active. NOAA decided to take this
course of action because collisions with ships are one of the leading
causes of death for the North Atlantic right whale. The agency
estimates the right whale population has dwindled to about 300 with at
least 19 deaths caused by ship strikes in the past 22 years.\17\
---------------------------------------------------------------------------
\17\ National Oceanic and Atmospheric Administration, Proposed Rule
to Implement Speed Restrictions to Reduce the Threat of Ship Collisions
with North Atlantic Right Whales, Federal Register, Vol. 71, p.
36299,June 26, 2006.
---------------------------------------------------------------------------
In February 2007, NOAA sent a draft of the final rule to OMB for
review. Under E.O. 12866, OIRA is to review proposed rules within 90
days with one possible extension of 30 days. The rule remains under
review 440 days later.
In April 2008, documents obtained by the Union of Concerned
Scientists and released by the House Oversight and Government Reform
Committee show that not only is OIRA delaying the right whale rule, it
is actively working to undermine the scientific basis for the
regulation.\18\
---------------------------------------------------------------------------
\18\ The documents are available on the committee's website at:
http://oversight.house.gov/story.asp?ID=1921.
---------------------------------------------------------------------------
The documents show that two offices, the Council of Economic
Advisors and the Office of Science and Technology Policy, reanalyzed
aspects of the regulatory science and attempted to use their analyses
to question NOAA's findings. The CEA recalculated statistical models
and questioned the validity of published literature in an attempt to
undermine NOAA's finding that ship speed bears a relationship to whale
mortality. Another document shows the Office of the Vice President
questioned the validity of published studies NOAA is using as the basis
for the rule and contended the agency lacks ``hard data.''
Nowhere in any of the documents does a White House official express
an opinion on the rule or present alternative policy options. However,
the scientific opinions the officials are advancing would weaken NOAA's
scientific argument and allow opponents to more easily assail the rule.
Ultimately, this kind of scientific interference can lead to weaker
protections, or a complete absence of protections.
B. Interference in Generating Information
Curtis Copeland from the Congressional Research Service (CRS) has
provided testimony to the Subcommittee addressing the numerous ways in
which OIRA has used administrative mechanisms to interfere with the
generation of information important to setting standards. I do not wish
to repeat Dr. Copeland's testimony, but only to reiterate there have
been many mechanisms employed by OIRA to impact the quality of
information produced by agency experts. Among those mechanisms are
directives on the use of cost-benefit analysis, peer review guidelines,
data quality challenges, and an unsuccessful attempt to impose a one-
size-fits-all risk assessment process on agencies. What follows are a
few examples of this interference in health and safety standards.
OIRA and other political staff have increasingly waded into the
scientific aspects of decision making, even before that science becomes
relevant for any particular rulemaking. Most environmental, public
health, and safety standards are based on rigorous scientific research
and findings. By controlling the scientific information behind these
standards, politics can erode the very foundation upon which
regulations are built.
One example is EPA's Integrated Risk Information System (IRIS).
IRIS is a publicly searchable database for studies and information on
the human health effects of chemical substances. EPA scientists and
policymakers use the information in the database to make determinations
about the risk of various substances. EPA studies both the carcinogenic
and noncarcinogenic effects of substances and determines safe or
tolerable exposure thresholds when possible. IRIS assessments can
inform regulatory action intended to protect humans from the harmful
effects of certain substances.
In 2004, according to a GAO report, OMB directed EPA to begin
routinely submitting draft assessments to OMB for an interagency
review. Previously, the need for reviews had been determined on a case
by case basis.\19\ At two points in the current IRIS process, EPA must
submit drafts of chemical assessments to OMB for review. OMB does the
bulk of its interfering during these review periods. OMB voices its own
opinions on the chemical assessment and solicits the opinions of other
federal agencies such as the Department of Defense, the Department of
Energy, and NASA. EPA is prohibited from proceeding with the assessment
until it receives explicit approval from OMB.\20\
---------------------------------------------------------------------------
\19\ Government Accountability Office, Chemical Assessments: Low
Productivity and New Interagency Review Process Limit the Usefulness
and Credibility of EPA's Integrated Risk Information System, March
2008. GAO-08-440. Available at: http://www.gao.gov/new.items/
d08440.pdf.
\20\ Ibid.
---------------------------------------------------------------------------
OMB may interfere with the chemical assessments by suggesting to
EPA its own scientific judgments or by forcing EPA to consider
scientific studies that fit OMB's policy preferences. Alternatively, or
additionally, OMB can delay work on an assessment. The IRIS process
contains no time limits for the OMB review period.
In April 2008, EPA announced changes to its IRIS procedures which
now involve OMB at even more stages in the process. The changes
emanated from a working group comprised of officials from EPA, OMB, the
Pentagon, and other federal agencies. All comments from OMB or other
agencies will continue to be considered deliberative executive branch
proceedings, allowing any incidences of scientific manipulation to
evade public scrutiny.
In another example, in March 2007, a Department of Interior
investigation found Julie A. MacDonald, the deputy assistant secretary
for fish, wildlife and parks, allowed political considerations to taint
a number of decisions in which the Fish and Wildlife Service (FWS)
decided not to consider certain species endangered. Among the
transgressions, MacDonald leaked internal agency documents to industry
lobbyists and intimidated agency staff in order to manipulate
scientific evidence. MacDonald resigned in April 2007 as a result of
the scandal. In response to public pressure and the scrutiny of the
House Natural Resources Committee, FWS decided to review eight
endangered species decisions by MacDonald. In November, FWS announced
it had confirmed impropriety in seven of the eight decisions and is now
reviewing them.
Another example of scientific interference this time coupled with
censoring government officials came to light in October 2007. Dr. Julie
Gerberding, Director of the Centers for Disease Control and Prevention,
had her testimony about the threat global warming poses to public
health substantially cut by OMB before Dr. Gerberding was allowed to
testify before the Senate Environment and Public Works Committee on
October 23rd. Seven pages, about half, of the testimony was deleted
from the draft submitted for OMB's review. The removed sections
included information on extreme weather events and food and water-borne
disease, among other things. Climate Science Watch obtained a copy of
the draft as submitted and the censored version and posted the two on
its website the day after the hearing.\21\
---------------------------------------------------------------------------
\21\ See these postings at Climate Science Watch's website,
available at: http://www.climatesciencewatch.org/index.php/csw/details/
censored_cdc_testimony/
---------------------------------------------------------------------------
Lastly, I would like to recommend to the committee two reports
recently issued by the Union of Concerned Scientists that have broadly
documented examples of political interference in scientific
information.\22\ The first of these, Federal Science and the Public
Good: Securing the Integrity of Science in Policy Making, documents
interference across federal agencies providing specific examples, like
the above, of misrepresenting science and the results of research,
deleting and editing scientific information, and suppressing science,
among other examples.
---------------------------------------------------------------------------
\22\ Union of Concerned Scientists, Science Integrity Program,
Federal Science and the Public Good: Securing the Integrity of Science
in Policy Making. February 2008. Available at: http://www.ucsusa.org/
scientific_integrity/restoring/scientificfreedom.html. And Interference
at the EPA: Science and Politics at the U.S. Environmental Protection
Agency. April 2008. Available at: http://ucsusa.org/
scientific_integrity/interference/interference-at-the-epa.html.
---------------------------------------------------------------------------
The second of these reports has received much greater public
attention because the voices in the report are those of EPA scientists
whose work has been made much more difficult by political interference
at the agency. Interference at the EPA: Science and Politics at the
U.S. Environmental Protection Agency, contains the results of surveys
of almost 5500 EPA scientists. Almost 30 percent of the EPA scientists
from across the country responded to the surveys with devastating
results. Nearly 60 percent of the respondents experienced political
interference in their work and that this interference has been higher
in the last five years than previously. In the essays accompanying the
surveys, the respondents generally cite OMB as the source of the
external interference.
V. Conclusions
It is unlikely that centralized regulatory review will end any time
soon. Many have argued that it is needed in such a vast and complicated
federal government. It can provide inter-agency coordination, ensure
that regulations are not in conflict with existing or other proposed
rules, and provide a valuable planning and coordination function. We
believe, however, that today's regulatory practices go well beyond the
benefits of centralized review. Current practices give the president
unique and unparalleled power to alter the collection and dissemination
of information and to shape the substance of agency rulemakings--all
behind the scenes. Even more striking is that a small number of OIRA
staff have controlled this process all in the name of the president. In
doing so, the implementation of agency statutory requirements may
become secondary to the policies and priorities of the president as
interpreted by the OIRA staff.
The application of the unitary theory as it is practiced in this
administration and framed in executive branch directives gives the
president, and a cadre of employees that represent the president,
control over the substantive decision making of agencies. As a result,
politics is injected and elevated into decisions where science and
rational judgment should prevail. Political appointees have greater
control over the substance of regulations; politics supersedes
scientific and technical information that is critical to protecting our
environment and health and safety at home and in the workplace. Even if
this were not empirically true, the appearance would still exist,
thereby tainting the public's perception of the regulatory process.
The current structure of the rulemaking process has several costs.
There is now the potential for even greater conflict between the
statutory authority delegated to the agencies by Congress and executive
priorities. When the president has the ability to override this
statutory delegation of authority, the balance of power between
Congress and the Presidency is altered. There is the perception, if not
the reality, that special interests are favored heavily over the needs
of the public. This process does not lead to better rules and public
protections. When the president makes a substantive regulatory decision
based on political considerations, scientifically-based protective
standards are vitiated. Finally, we can be assured that if Congress
does not act, OIRA will remain the equivalent of a political censor
over congressional mandates and agency decisions.
Admittedly, there are grey areas where ``coordination'' ends and
``substantive interference'' begins. When OIRA changes a word in a
proposed rule, it may help to make the regulation more understandable.
On the other hand, it may intentionally change the very meaning of the
rule. While it may be appropriate for OIRA to coordinate, we believe it
is wrong to interfere with substantive agency decisions.
We believe there are solutions Congress can pursue. First, Congress
can review the role the White House plays in this review process with
an eye toward removing or limiting OIRA's powers. Congress could define
the powers it is willing to give to OMB regarding regulatory review.
Since the 1981 Reagan Executive Order, Congress has chosen not to
legislate in this area; hence OMB operates through the extension of
presidential constitutional authority. Congress could also restrict in
legislation OIRA's ability to review certain rules promulgated under a
statute. This would require, of course, the ability of Congress to
overcome a presidential veto or some other administrative recourse the
president might exercise.
Second, Congress could place the statutory responsibility for
agency decisions in the Senate-approved agency heads, not regulatory
policy officers and not OIRA. If the review of an agency action is
judged to be inconsistent with the priorities of the president, the
president then should exert influence on the appointed agency head.
This would also permit Congress to hold the ultimate policy maker
accountable by removing the authority for regulatory decisions from an
unaccountable agency subordinate. Similarly, Congress could choose to
move centralized regulatory review out of OIRA and into another agency
outside the Executive Office of the President. This would likely reduce
OIRA's clout and influence over the substantive work of agencies.
Third, to the extent that centralized review of agency regulations
remains lodged in OIRA or some other presidential office, Congress
could seek mechanisms to hold that office accountable. One mechanism
for this, we believe, is subjecting OIRA to the requirements of the
Administrative Procedure Act. If OIRA makes substantive regulatory
decisions, it should be subject to the accountability provisions of the
APA including subject to court actions. Coupled with this increased
accountability, Congress could expand the requirements for defining
what must be disclosed in agency regulatory dockets. Transparency
requirements such as this would allow Congress, the courts, and the
public to know the extent to which the executive has taken control over
substantive agency regulatory outcomes.
Finally, regardless of the extent of partisan control over the
legislative and executive branches, we urge Congress to exert its
constitutional oversight control and restore the historical separation
of powers balance so that unitary expansion of the executive branch is
held in check.
Thank you for the opportunity to appear before you. This concludes
my testimony. I'm happy to answer your questions.
Mr. Johnson. All right. Thank you, Dr. Melberth.
At this time I will recognize Mr. Cannon.
Mr. Cannon. Thank you, Mr. Chairman.
I am intrigued by the testimony. Professor Strauss and I
have largely agreed with a very tiny disagreement. But I am
actually going to ask the panel to go in a little different
direction, here, because what I am really concerned about is
not this issue that is before us today, because I think
academically Professor Strauss has really nailed it down and it
has come down to a fairly close issue.
But I am wondering what we do in the future in America,
because--particularly, Dr. Melberth, in your role--using the
Internet could be an incredibly attractive way to help focus on
government. But the way to do it, it seems to me, is to get
people more involved. Not just in responding to things that
they may feel urgent, but actually in overseeing what
government does.
In others words, you have all seen Wikipedia. You have got
millions of people that have contributed to articles and there
are dozens, millions, of articles on Wikipedia, not all
correct, but awfully good, frankly, at least in my experience.
And it has a self-regulating process for deciding what is good.
I looked at the Web site for OMB Watch, Mr. Melberth, and
you tend to be--is it fair to say left in the political
spectrum?
Mr. Melberth. Progressive might be the word we would
choose.
Mr. Cannon. Would that mean, like, Socialist? I am just
kidding, here, although that is historically where I think it
would come down.
It seems to me that this issue is not a left or right
issue. In fact, frankly, it is a more academic issue.
Are you familiar, Mr. Melberth, with a Jim Harper, who has
a site called Washington Watch? He would call himself I think
right and conservative. But are you familiar with his site at
all?
Mr. Melberth. No, sir. I am not.
Mr. Cannon. Take a look at it. Because my point is, left or
right is not very important. Actually knowing what government
does is. So you are sitting here and talking about things that
bother you and using Union of Concerned Scientists, which has a
political agenda, and very clearly has a political agenda, and
doesn't want the funding of its agenda changed, is not so
helpful as to say rather than conclude, I think the term is--
science and rational judgment is a term that has been used a
couple of times in this discussion. Well, that is often used to
cover over a political and financial agenda.
Much better, it would seem to me--and I am lecturing a
little bit here, but I would like your response in particular,
Dr. Melberth--much better to get the American people involved
in what OMB does, in the guts of it, like with Wiki. You have
got somebody that has an interest in a particular rule, let him
take a look at it.
We asked Ms. Dudley earlier about this, but if you have
transparency in the rulemaking process, and transparency means
electronic access to anybody with a computer, anywhere with
access to the Internet, can we not create the new world that I
think Mr. Obama is showing us with a couple of million donors,
that the Wikipedia shows up with millions of people
participating in sharing knowledge? Is this not a noble goal,
instead of causing people to react to something, that you
characterize OMB has done, but rather to guide them into
actually helping you look at what is going on in the regulatory
process in America?
Mr. Melberth. We certainly agree that this process should
be far more transparent than it is. There is far too much of
this that is out of the eye of the public and so they don't
know what is going on. And the role of the RPO exacerbates
that. It doesn't enlighten it. Because no one knows what the
RPO is doing.
It is the decision-making process that the RPO goes through
and the agency is not required to disclos it. We don't have
knowledge of when an agency rulemaking commences. We don't know
when that decision might be or how often----
Mr. Cannon. Let me interject, because my time is expiring.
I would really love for you guys at OMB Watch to engage
people, left or right, progressive or conservative, I don't
care, in the process of pushing for transparency and then
looking at the data that we have. Take a look at the--I think
it is called Washington Watch. Again, different political
persuasion, but I think the goal ought to be similar to what
you are looking at.
Is there any reason that you or others see why we shouldn't
be using modern Google-type technology to allow us to have
virtually complete access to everything that happens in
government?
I see Dr. Strauss has a comment, but maybe we can just go
down the panel.
Mr. Melberth. Mr. Cannon, we have actually been a leader in
transparency and the use of technology for the 25 years that
OMB Watch has existed.
Mr. Cannon. I think you--I have a yellow light. Let me
suggest that you have done--I am not criticizing you at all.
But I am hoping that you will go to the next step, which is
draw people into the review, the citizen review process,
instead of just energizing a base. Because I think that what
happens, the energized base comes to the middle, everybody
comes to the middle, and we have a better run country.
Mr. Melberth. We are indeed trying to do that, yes.
Mr. Strauss. I couldn't agree more with the gentleman. At
some point during your questioning of Administrator Dudley, I
was reminded of what has been for a long time my favorite
Internet site for demonstration to my students, at least, which
is a site maintained by the National Highway Transportation
Safety Administration, on which they post all their general
counsel letters advise. Somebody, Mercedes Benz, Volkswagen,
whomever, writes in, asks for some advise about the meaning of
a rule.
Every one of those letters is on this Web site, is
immediately searchable. What you would have had to pay $5,000
to a Washington law firm to go through those records and find
10 years ago you now get in 30 seconds.
This is the stunning transformation of the field that is
occuring and whatever the Congress can do to encourage it, it
ought to do. I know there have been difficulties between
Congress and OMB in particular over the past few years about
the funding of electronic rulemaking development that have
tended to put the brakes on that development. It looks in
exactly the direction the Congressman is suggesting, and I hope
those difficulties can be resolved.
Mr. Cannon. I thank the gentleman. I am certainly looking
forward to that.
Mr. Chairman, I ask unanimous consent to speak for an
additional minute.
Mr. Johnson. Without objection.
Mr. Cannon. And I just want to follow up on what you said,
Professor Strauss.
I have a constituent that has a problem with the IRS. I
have gotten involved. I have spoken with the--you have the
general counsel and then you have got several other deputy
general counsel. I have spoken with the next senior person in
the legal system in the IRS, and the system that they use for
deciding what to decide is more complicated than the decisions
they issue.
It is appalling and it is--the subject in this particular
case, I am comfortable saying, it is obviously skewed by the
desires of individuals instead of by the desire for policy. And
if we had transparency there--now, that is a lot more difficult
than it may be with the Transportation Department in one area
of their oversight. Nevertheless, if we had that kind of
transparency, bureaucrats would be much more responsible for
what they do and also how they affect not just broad policy but
individual businesses.
And in addition to that, all businesses could operate with
more clarity, because they would have at least the answers that
have been given by guidance to other people.
And so you understand that I am on a mission here. It is
not a partisan mission, not at all critical of OMB Watch,
except I would like you to draw more people in, because I think
more people will draw you away from progressive and toward the
middle, not that progressive is bad or that conservative is
good, but if we are in the middle, we get a lot more done. And
this is an area where we actually really do desperately need to
progress, without biting into the left meaning of the term, but
to progress in America. And it is all there and the technology
is available.
So I thank you, Mr. Chairman, for allowing me to
pontificate here, but this is what this Committee should do and
this is the major jurisdiction of this Committee that we ought
to be expanding and ought to be pushing. There is no place else
in Congress that they look at these issues as we do.
Thank you and I yield back.
Mr. Johnson. Thank you, Congressman Cannon.
I have a couple of questions.
Would anyone wish to comment on Administrator Dudley's
testimony? If not, then Mr. Copeland, I would like to ask you,
one of the Bush administration initiatives that you discussed
is increased use of informal OIRA reviews. Can you describe
what informal OIRA reviews are and why they are important?
Mr. Copeland. Sure. Essentially, the formal process is that
after the agency head has signed off on a rule, the agency will
send it to OMB for formal review. That is when the 90-day clock
starts. The executive order says that OIRA has 90 days,
essentially, to review the rule.
Informal review is when the agency will send over drafts of
the rule, either at OIRA's request or at the agency's
initiative, for a pre-submission discussion. So it is
essentially while they are formulating the rule.
And OMB has said they have their biggest impact on agency
rulemaking during this informal, pre-formal submission process.
The problem in terms of transparency is that OMB has
interpreted the requirement--there is a requirement in
Executive Order 12866 that says the agency is to disclose the
changes made at OMB's suggestion or recommendation. OMB has
interpreted that to mean only during formal review. I have seen
rules that have gone back and forth between OMB and the agency
several times over a several week or even several month
process, during informal review, get submitted to OMB, have a
1-or 2-day formal review process, and under OMB's
interpretation, the only thing that has to get disclosed is
what happens in that 1 or 2 days.
So the problem is that there is little transparency during
the informal review process, and that is the period in which
OMB says they have their greatest impact.
Mr. Johnson. Is the Bush administration the first
Administration to use this informal review process?
Mr. Copeland. No, sir. The Clinton administration used it.
Other Administrations back to the start of OIRA in 1981 have
used it.
I would say that both the previous OIRA administrator and
other observers, agency people, have said that it seems to have
been ratcheted up during this Administration, that there is
greater use of informal review and that as a consequence there
is less transparency about the effects that OIRA has on the
agencies' rules.
Mr. Johnson. All right. Thank you.
Mr. Gattuso, do you think it is appropriate for the Vice
President, who has no scientific expertise or responsibilities,
to delay a final rule for more than a year that would provide
protection for Right Whales?
Mr. Gattuso. Well, first off I would point out--and thank
you for raising that, since it was one of the witnesses earlier
who referred to the Vice President as a political appointee,
and we do have to remember that the Vice President is not a
political appointee. He is an elected official, one of two
individuals in the country elected nationwide. I think that in
that status, the Vice President certainly has every right to
ask questions, to ask executive branch officials to justify
their actions, to convey his own views.
The question of how long something would be delayed, what
kind of questions are asked, I think depends entirely upon the
subject at issue. I am not going to defend every action every
Vice President has ever taken, but in terms of the Vice
President's right to ask these questions and receive answers as
to the activities of the executive branch, I think that is
entirely appropriate.
We hear a lot about politicization of the process. It
reminds me a little bit of the movie Casablanca. Politics.
Politics going on in the rulemaking process. Much of this is a
political process in the sense of getting information out,
balancing between the unelected officials carrying out their
responsibilities, the elected officials with responsibility to
their voters and the country in terms of ensuring certain
policies and priorities. And those elected representatives, by
the way, include Congress.
So short answer, yes, the Vice President has a role.
Mr. Johnson. Thank you. And I will yield the balance of my
time to Congressman Cannon.
Mr. Cannon. Thank you.
I just have one other question I can't resist asking this
panel, and let me ask Mr. Gattuso in particular, but if anyone
else would like to answer, I know that, Dr. Copeland, we have
talked about these issues in the past, but if Congress were to
make lively use of the Congressional Review Act, including our
ability to review rulemaking agencies' case by case compliance
with the Administrative Procedure Act and other administrative
law, don't you think that would go a long way to policing the
roles of the bureaucracy and the President in Federal
rulemaking?
Mr. Gattuso. I agree. The Congressional Review Act is
probably one of the most under-used mechanisms that the
Congress has in its quiver. I believe it has only been used
once in its 10-year history, at least been all the way through
the process once, and it is tailor-made.
It was specifically enacted in order to let Congress voice
its will, to implement its well as to regulations when a
regulatory body has, in Congress' view, misinterpreted what
Congress had in mind.
And by the way, it can be used both to further regulation
or to hinder it. It is not specific as to which direction that
pendulum goes.
Mr. Strauss. I am going to have to disagree.
The principle place, I think, for expressing the
disagreement is to point out that before you can get a
regulation under the Congressional Review Act, it must have
survived this process. That is to say it will have presidential
approval at some level or another.
And consequently, any resolution of disapproval that the
Congress might vote is subject to the possibility of
presidential veto. It is not at all accidental that the one
opportunity you have had to use the Congressional Review Act
was an opportunity that fell between Administrations, a rule
issued by Democratic administration that was then vetoed by the
Congress after the Democratic administration had ceased to
exist and had been replaced by a Republican administration
whose head agreed with what the Congress did in disapproving
OSHA's ergonomics rule.
Mr. Cannon. We are actually, of course, considering some
adjustments to the Congressional Review Act. We have a bill
that has been passed out of Subcommittee and another one that
we think will come along fairly soon that would, we hope,
change that.
If we changed it so that we at least had a more political
role in reviewing regulations, would that change your view? In
other words, does Congress have a role here?
Mr. Strauss. There have been serious suggestions made by my
friend and at least area colleague, Paul Verkuil, notably that
one ought to replace the current technique for rulemaking by
something more or less analogous to what I think is done in
many European countries, where rulemaking proposals would
essentially be fast-tracked legislation and would not take
effect unless enacted by Congress.
This would dramatically change the landscape generally,
whether--is an occasion for a different meeting than today.
Mr. Cannon. I think we have actually dealt with that, of
course, in the past, as you know. And there was a large
consensus that the current act does not work. And so if other
panelists would like to comment on the possibility of more
congressional involvement in regulatory processes, I would be
quite interested to hear either Dr. Copeland or Mr. Melberth.
Mr. Melberth. Well, we do have some suggestions for what
Congress can do to be more involved and take some control. We
don't believe the Congressional Review Act is an appropriate
vehicle to do that. But we would look forward to working with
Congress to find a way in which Congress could be more involved
in that process.
Mr. Cannon. We have actually been working on this, as I
think Dr. Copeland knows and Professor Strauss, for the last 6
years. Actually, no, we are almost 8 years now into this
process. And so we have had a lot of academic water under the
bridge here and we are actually trying to hope we can do
something in the short-term.
Dr. Copeland, did you want to comment at all?
Mr. Copeland. I would just agree that it would essentially
take two-thirds of both houses to overturn a rule that the
President agrees with. And so you do have this really high
hurdle to jump.
I would point out, though, that there are a number of other
options that Congress does have. Greater specificity in their
delegations of rulemaking authority to the agencies would make
it less likely that Congress would object, because the agencies
would be constrained in their discretion. To the extent that,
you know, the agencies are regulating separate from what
Congress intended.
Mr. Cannon. Of course, I believe the academic momentum has
been toward the question that Professor Strauss is close to
stating, although it was not the point of his comment, which is
that it would not be an overturning of a regulation, but rather
voting on regulations before they become law, in which case you
don't have a two-thirds majority problem.
Mr. Copeland. Correct.
Mr. Cannon. Now, we are not at a point of making that leap
yet or jumping into a rubicon that might be too swift for us,
but it is my view and I think the view of the Chairman of the
full Committee and other Members of the Committee that this is
an area that we ought to be much more aggressively involved in.
And that, of course, is a very long discussion, and we
probably should end the hearing since we have a vote.
So thank you, Mr. Chairman, for your indulgence, and I
yield back.
Mr. Johnson. Thank you, Mr. Cannon.
I would like to thank all of the witnesses for their
testimony today. Without objection, Members will have 5
legislative days to submit any additional written questions,
which we will then forward to the witnesses and ask that you
answer as promptly as you can to be made a part of the record.
Without objection, the record will remain open for 5
legislative days for the submission of any other additional
materials.
Again, thanks for your time and for your patience.
This hearing on the Subcommittee on Commercial and
Administrative Law is adjourned.
[Whereupon, at 3:33 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Article submitted by the Honorable Chris Cannon, a Representative in
Congress from the State of Utah, and Ranking Member, Subcommittee on
Commercial and Administrative Law
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Response to Post-Hearing Questions from the Honorable Susan E. Dudley,
Administrator, Office of Information and Regulatory Affairs, Office of
Management and Budget, Washington, DC
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Response to Post-Hearing Questions from Peter L. Strauss, Professor,
Columbia Law School, New York, NY
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Response to Post-Hearing Questions from Curtis W. Copeland, Ph.D.,
Specialist in American National Government, Congressional Research
Service, Washington, DC
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Response to Post-Hearing Questions from James L. Gattuso, Esq., Senior
Fellow in Regulatory Policy, Roe Institute for Economic Policy Studies,
The Heritage Foundation, Washington, DC
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Response to Post-Hearing Questions from Rick Melberth, Ph.D.,
Director of Regulatory Policy, OMB Watch, Washington, DC
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]