[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                MIDNIGHT RULEMAKING: SHEDDING SOME LIGHT

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 4, 2009

                               __________

                            Serial No. 111-2

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov



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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``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            DANIEL E. LUNGREN, California
MAXINE WATERS, California            DARRELL E. ISSA, California
WILLIAM D. DELAHUNT, Massachusetts   J. RANDY FORBES, Virginia
ROBERT WEXLER, Florida               STEVE KING, Iowa
STEVE COHEN, Tennessee               TRENT FRANKS, Arizona
HENRY C. ``HANK'' JOHNSON, Jr.,      LOUIE GOHMERT, Texas
  Georgia                            JIM JORDAN, Ohio
PEDRO PIERLUISI, Puerto Rico         TED POE, Texas
LUIS V. GUTIERREZ, Illinois          JASON CHAFFETZ, Utah
BRAD SHERMAN, California             TOM ROONEY, Florida
TAMMY BALDWIN, Wisconsin             GREGG HARPER, Mississippi
CHARLES A. GONZALEZ, Texas
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SANCHEZ, California
DEBBIE WASSERMAN SCHULTZ, Florida
DANIEL MAFFEI, New York
[Vacant]

            Perry Apelbaum, Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

           Subcommittee on Commercial and Administrative Law

                    STEVE COHEN, Tennessee, Chairman

WILLIAM D. DELAHUNT, Massachusetts   TRENT FRANKS, Arizona
MELVIN L. WATT, North Carolina       JIM JORDAN, Ohio
BRAD SHERMAN, California             DARRELL E. ISSA, California
DANIEL MAFFEI, New York              J. RANDY FORBES, Virginia
ZOE LOFGREN, California              HOWARD COBLE, North Carolina
HENRY C. ``HANK'' JOHNSON, Jr.,      STEVE KING, Iowa
  Georgia
ROBERT C. ``BOBBY'' SCOTT, Virginia
JOHN CONYERS, Jr., Michigan

                     Michone Johnson, Chief Counsel

                    Daniel Flores, Minority Counsel



                            C O N T E N T S

                              ----------                              

                            FEBRUARY 4, 2009

                                                                   Page

                           OPENING STATEMENTS

The Honorable Steve Cohen, a Representative in Congress from the 
  State of Tennessee, and Chairman, Subcommittee on Commercial 
  and Administrative Law.........................................     1
The Honorable Trent Franks, a Representative in Congress from the 
  State of Arizona, and Ranking Member, Subcommittee on 
  Commercial and Administrative Law..............................    18

                               WITNESSES

The Honorable Jerrold Nadler, a Representative in Congress from 
  the State of New York
  Oral Testimony.................................................    22
  Prepared Statement.............................................    24
Mr. Robert F. Kennedy, Jr., Chairman, Waterkeeper Alliance
  Oral Testimony.................................................    26
  Prepared Statement.............................................    30
Dr. Gary D. Bass, Ph.D., Executive Director, OMB Watch
  Oral Testimony.................................................   177
  Prepared Statement.............................................   179
Ms. Lynn Rhinehart, Associate General Counsel, AFL-CIO
  Oral Testimony.................................................   198
  Prepared Statement.............................................   200
Dr. Veronique de Rugy, Ph.D., Senior Research Fellow, Mercatus 
  Center at George Mason University
  Oral Testimony.................................................   209
  Prepared Statement.............................................   211
Mr. Michael Abramowicz, Professor, George Washington University 
  Law School
  Oral Testimony.................................................   236
  Prepared Statement.............................................   237
Dr. Curtis W. Copeland, Ph.D., Specialist in American National 
  Government, Government and Finance Division, Congressional 
  Research Service
  Oral Testimony.................................................   243
  Prepared Statement.............................................   245

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Letter from the Competitive Enterprise Institute and 
  FreedomWorks, submitted by the Honorable Steve Cohen, a 
  Representative in Congress from the State of Tennesse, and 
  Chairman, Subcommittee on Commercial and Administrative Law....     3
Prepared Statement of Earthjustice, submitted by the Honorable 
  Steve Cohen, a Representative in Congress from the State of 
  Tennesse, and Chairman, Subcommittee on Commercial and 
  Administrative Law.............................................     4
Prepared Statement of the Honorable Trent Franks, a 
  Representative in Congress from the State of Arizona, Member, 
  Committee on the Judiciary, and Ranking Member, Subcommittee on 
  Commercial and Administrative Law..............................    19
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, 
  Chairman, Committee on the Judiciary, and Member, Subcommittee 
  on Commercial and Administrative Law...........................    21
Article from The Des Moines Register, dated Tuesday, May 14, 
  2002, submitted by the Honorable Steve King, a Representative 
  in Congress from the State of Iowa, and Member, Subcommittee on 
  Commercial and Administrative Law..............................   162
Article from The Des Moines Register, dated April 10, 2002, 
  submitted by the Honorable Steve King, a Representative in 
  Congress from the State of Iowa, and Member, Subcommittee on 
  Commercial and Administrative Law..............................   164

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of David M. Mason, Visiting Senior Fellow, The 
  Heritage Foundation, submitted by the Honorable Trent Franks, a 
  Representative in Congress from the State of Arizona, and 
  Ranking Member, Subcommittee on Commercial and Administrative 
  Law............................................................   266
Article from Consumer Freedom, submitted by the Honorable Steve 
  King, a Representative in Congress from the State of Iowa, and 
  Member, Subcommittee on Commercial and Administrative Law......   271
Response to Post-Hearing Questions from Robert F. Kennedy, Jr., 
  Chairman, Waterkeeper Alliance.................................   272
Response to Post-Hearing Questions from Gary D. Bass, Ph.D., 
  Executive Director, OMB Watch..................................   276
Response to Post-Hearing Questions from Lynn Rhinehart, Associate 
  General Counsel, AFL-CIO.......................................   282
Response to Post-Hearing Questions from Veronique de Rugy, Ph.D., 
  Senior Research Fellow, Mercatus Center at George Mason 
  University.....................................................   286
Response to Post-Hearing Questions from Michael Abramowicz, 
  Professor, George Washington University Law School.............   296
Response to Post-Hearing Questions from Curtis W. Copeland, 
  Ph.D., Specialist in American National Government, Government 
  and Finance Division, Congressional Research Service...........   300


                         MIDNIGHT RULEMAKING: 
                          SHEDDING SOME LIGHT

                              ----------                              


                      WEDNESDAY, FEBRUARY 4, 2009

              House of Representatives,    
                     Subcommittee on Commercial    
                            and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 11:10 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Steve 
Cohen (Chairman of the Subcommittee) presiding.
    Present: Representatives Cohen, Watt, Maffei, Franks, 
Coble, Issa, Smith, and King.
    Mr. Cohen. This hearing of the Judiciary Committee's 
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.
    I would like to begin by welcoming everyone to the first 
hearing of the Subcommittee in the 111th Congress. In 
particular, I wish to extend warm regards to the Ranking Member 
of the Subcommittee, Mr. Franks, who I look forward to working 
with. Pretty much look forward to working with all the Members 
of the Subcommittee on both sides of the aisle. And would like 
to be welcoming our new Member, Mr. Maffei, who is not here 
yet.
    I will now recognize myself for a short statement.
    Despite the fact that many aspects of the Bush 
administration were winding down operations after the November 
4, 2008 election, administrative agencies were ramping up their 
rulemaking.
    A flurry of regulatory activity went on between the 
November presidential election and inauguration day, with the 
former Administration attempting to make a final impact.
    This midnight regulation period is a time without political 
accountability, where controversial actions will not cost the 
Administration's party votes.
    Under the cover of darkness, the Bush administration used 
the midnight regulatory period to promulgate numerous 
regulations that run counter to statutory mandates and the 
public interests.
    Other Administrations, Democrat, as well, have done the 
same, and each are wrong.
    Midnight rulemaking has been criticized as an effort of an 
outgoing Administration to tie the hands of the next 
Administration. While the tactic of flooding the Federal 
Register at the end of an Administration has been used by 
Presidents of both parties, these regulations recently 
experienced through this Bush administration have been 
particularly troubling.
    I have both procedural and substantive concerns about the 
Bush administration's use of midnight rulemaking. Regulatory 
experts across the political spectrum agree that the hurried 
process of midnight rulemaking leads to inherently flawed 
policy.
    During the end of the Bush administration, agencies 
reportedly cut corners and administrative procedure by rushing 
regulations through the system without proper regulatory 
review.
    In the case of many of the most significant rules, the 
public comment period was abridged. Significant public comments 
were ignored, and acceptable rulemaking practices were tossed 
aside.
    The Administration's desire to make it more difficult to 
revoke controversial rules led to other questionable tactics.
    In an effort to ensure that the rules would go into effect 
prior to inauguration day, the Administration reportedly 
categorized several significant rules as minor, as opposed to 
major, so that their effective dates would be 30 days after 
publication in the Federal register rather than 60 days.
    A memo issued by then White House Chief of Staff Joshua 
Bolton in May 2008 announced the end of midnight regulations, 
stating that except in extraordinary circumstances, final 
regulations should be issued no later than November 1, 2008.
    Nevertheless, the Bolton memorandum was brushed aside by 
the Bush administration, and dozens of controversial 
regulations went well beyond that deadline.
    These included regulations on the environment, civil 
rights, workplace safety, opportunities to study medical 
marijuana, abortion rights, regulatory preemption, and online 
gambling.
    Instead of implementing midnight regulations only in 
extraordinary circumstances, midnight regulations were used as 
parting gifts to favorite industries of political interests.
    As several of our witnesses will recount today, the impact 
of midnight regulations on individuals, businesses, workers, 
science and the environment is profound.
    When regulations jeopardize public health, safety and 
welfare, Congress has a duty to respond. This hearing today 
will explore whether the Congressional Review Act, the 
appropriations process or an approach like Mr. Nadler's 
legislation, H.R. 34, is the best way to proceed.
    Although we are transitioning to a new era, Congress and 
the American people have an obligation to examine and rectify 
wreckage left behind by the Bush administration, including 
those egregious midnight regulations.
    For the comfort of the minority party, I want them to know 
that I plan to introduce and will introduce into the record, 
without objection, a statement from a very much nonpartisan 
and, I think, conservative group, the Competitive Enterprise 
Institute, that specifically requests that all of our actions 
look in a bipartisan manner toward this Administration and 
future Administrations and makes sure that what is good for the 
goose is good for the gander.
    And I certainly concur in that and would like to enter the 
Freedom Works letter of February 3 into the record, as well as 
a statement from Earth Justice, that was asked to be a witness, 
but was unable to be included in our list of witnesses, and 
include its statement, with unanimous consent, into the record.
    [The information referred to follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Cohen. With those preliminary remarks, I would like to 
recognize my colleague, Mr. Franks, the distinguished Ranking 
Member of the Subcommittee, and whose Cardinals came close to a 
Super Bowl championship, for his opening remarks.
    Mr. Franks. Well, thank you, Mr. Chairman. I am just 
grateful to be here this morning. I am grateful to be here with 
you as the Subcommittee on Commercial and Administrative Law 
meets for the first time.
    I want to congratulate you on becoming the Chairman of this 
Subcommittee, and I want to warmly welcome our witnesses, if it 
so happens, and certainly welcome the opportunity to begin our 
consideration of the administrative law issues during this 
Congress.
    The Commercial and Administrative Law Subcommittee spent 
next to no time on administrative law last term. The 
Subcommittee spent more time on commercial law, but still that 
is not what absorbed the majority of the Subcommittee's 
attention.
    Instead, the Subcommittee spent the greatest portion of its 
time on bashing the Bush administration and the Bush 
administration's Department of Justice.
    Mr. Chairman, I hope today that we can turn a new page and 
that Presidents of both parties and Presidents in most modern 
Administrations, of course, we recognize that they have 
promulgated an increased number of regulations during their 
final months in office.
    In fact, it was Jimmy Carter whose Administration's end-of-
term activity gave birth to the phrase ``midnight 
regulations.'' And President Clinton published even more.
    The George W. Bush administration, looking back on the 
Clinton debacle, took some concerted and constructive steps to 
introduce order into the end-of-term process.
    It called for all new regulations planned for the last part 
of its tenure to be proposed by June 1, 2008 and it called for 
all of these regulations to be promulgated by November 1, 2008.
    The Bush administration's policy provided for exceptions 
and some exceptions, in the end, were made. But on the whole, 
the process was more orderly than the chaos that attended the 
final days of the Clinton administration.
    Accordingly, I hope we won't spend our time on bashing the 
Bush administration for doing less of what all recent 
Administrations have done. Let us instead devote ourselves to 
the more important task.
    Presidents are elected for 4 years, and unless we are to 
craft prohibition for all regulatory activity during a second 
term, we should use this hearing as an opportunity to begin to 
build upon the improvements to the regulatory process that the 
Bush administration undertook, building on the improvements of 
previous Administrations.
    Let us, therefore, ask how can we reform the entire 
regulation-writing process, because midnight regulations are 
just one symptom of a dysfunctional and outdated administrative 
law system governed by the 63-year-old Administrative Procedure 
Act.
    Throughout the process of writing regulations, we need to 
improve procedures. We need to ensure, first, universal and 
better cost-benefit analyses; sounder science; more 
transparency; better public participation; more negotiated 
rulemaking; rights of the Fed to support e-rulemaking; stronger 
review of the agency's regulatory development processes; and, 
an end to the proliferation of supposedly nonbinding guidance 
that seeks to make an end run on the requirements of 
rulemaking.
    These are just some of the improvements that we can make to 
the rulemaking process that governs so much of the Federal 
Government's lawmaking activity.
    If we can progress on these improvements, we will reduce 
the controversy over end-of-administration rulemaking by 
bringing more transparency and objectivity into the entire 
rulemaking process, no matter when it occurs during the course 
of any Administration.
    Other reforms include improving our review of agency 
regulations under the Congressional Review Act, and, of course, 
above all, Congress can dedicate itself anew to writing 
clearer, more detailed and more definitive statutes.
    In this way, Congress can better exercise the policymaking 
authority entrusted to it by the Constitution and not transfer 
that authority excessively to administrative agencies, which 
are accountable only to the people in indirect ways through the 
President or, in the case of so-called independent agencies, 
even more indirectly.
    In the 108th and the 109th Congresses, we considered those 
topics so important that we embarked on a new special project, 
the Administrative Law Process and Procedure Project for the 
21st Century.
    This project generated a number of good proposals. We have 
yet to conclude our important work in this area. Yet, the 21st 
century marches on, Mr. Chairman, and the burden of regulations 
imposed under an outdated system grows.
    And so, sir, again, I am glad that we are here today and 
that the topic of administrative law is the first of which we 
turn in this term. And I hope that this will be a fruitful 
field of bipartisan endeavor in this term, and I look forward 
to working with you.
    Thank you.
    Mr. Cohen. I thank the gentleman for his statement.
    Without objection, other Members' statements, opening 
statements, will be included in the record.
    And I want to assure the gentleman, as I did in my opening 
statement, that I do want this to be bipartisan and to look at 
the future to all Administrations.
    [The prepared statement of Mr. Franks follows:]
 Prepared Statement of the Honorable Trent Franks, a Representative in 
Congress from the State of Arizona, Member, Committee on the Judiciary, 
 and Ranking Member, Subcommittee on Commercial and Administrative Law
    Mr. Chairman, it is a pleasure to be here with you today as the 
Subcommittee on Commercial and Administrative Law meets for the first 
time in the 111th Congress. I extend a warm welcome to our witnesses. 
And I welcome the opportunity to begin our consideration of 
administrative law issues during this Congress.
    The Commercial and Administrative Law subcommittee spent next to no 
time on administrative law last term. The Subcommittee spent more time 
on commercial law, but still, that is not what absorbed the majority of 
the Subcommittee's attention. Instead, the Subcommittee spent the 
greatest portion of its time on bashing the Bush Administration and the 
Bush Administration's Department of Justice.
    Mr. Chairman, I hope that today we can turn a new page. Presidents 
of both parties, and Presidents in most modern administrations, have 
promulgated an increased number of regulations during their final 
months in office.
    In fact, it was President Jimmy Carter whose administration's end-
of-term activity gave birth to the phrase ``midnight regulations.'' And 
President Clinton published even more.
    The George W. Bush Administration, looking back on the Clinton 
debacle, took some concerted and constructive steps to introduce order 
into the end-of term process. It called for all new regulations planned 
for the last part of its tenure to be proposed by June 1, 2008. And it 
called for all of these regulations to be promulgated by November 1, 
2008.
    The Bush Administration's policy provided for exceptions, and some 
exceptions, in the end, were made. But on the whole, the process was 
more orderly than the chaos that attended the final days of the Clinton 
Administration.
    Accordingly, let's not spend our time bashing the Bush 
Administration for doing less of what all recent administrations have 
done. Let us instead devote ourselves to a more important task. 
Presidents are elected for four years, and unless we are to craft a 
prohibition on all regulatory activity during a second term, we should 
use this hearing as an opportunity to begin to build upon the 
improvements to the regulatory process that the Bush Administration 
undertook, building on the improvements of previous administrations. 
Let us therefore ask: ``How can we reform the entire regulation-writing 
process?'' Because midnight regulations are just one symptom of a 
dysfunctional and outdated administrative law system, governed by the 
63-year-old Administrative Procedure Act.
    Throughout the process of writing regulations, we need to improve 
procedures. We need to insure:

          universal and better cost-benefit analysis;

          sounder science;

          more transparency;

          better public participation;

          more negotiated rulemaking;

          widespread ``e-rulemaking;''

          stronger review of the agencies' regulatory 
        development processes; and

          an end to the proliferation of supposedly non-binding 
        ``guidance'' that seeks to make an end run on the requirements 
        of rulemaking.

    These are just some of the improvements that we can make to the 
rulemaking process that governs so much of the federal government's 
law-making activity. If we can make progress on these improvements, we 
will reduce the controversy over end-of-administration rule-makings by 
bringing more transparency and objectivity to the entire rule-making 
process, no matter when it occurs during the course of any 
administration.
    Other worthy reforms include improving our review of agency 
regulations under the Congressional Review Act. And, of course, above 
all, Congress can dedicate itself anew to writing clearer, more 
detailed, and more definitive statutes. In this way, Congress can 
better exercise the policy-making authority entrusted to it by the 
Constitution--and not transfer that authority excessively to 
administrative agencies accountable to the people only indirectly 
through the President or, in the case of so-called independent 
agencies, even more indirectly.
    In the 108th and 109th Congresses, we considered these topics so 
important that we embarked on a special project, the Administrative 
Law, Process, and Procedure Project for the 21st Century. This project 
generated a number of good proposals. We have yet to conclude our 
important work in this area. Yet the 21st Century marches on, and the 
burden of regulations imposed under an outdated system grows.
    So Mr. Chairman, again, I am glad that we are here today, and that 
the topic of administrative law is the first to which we turn this 
term. I hope that this will be a fruitful field of bipartisan endeavor 
this term, and I look forward to working with you.
                               __________
    [The prepared statement of Mr. Conyers follows:]

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
  in Congress from the State of Michigan, Chairman, Committee on the 
 Judiciary, and Member, Subcommittee on Commercial and Administrative 
                                  Law

    Let me first thank Steve Cohen, the new Chairman of the 
Subcommittee on Commercial and Administrative Law, for holding this 
timely hearing on the issue of so-called ``midnight rules.''
    No issue within the Subcommittee's jurisdiction is now more 
important. Regulations issued during the final weeks of the Bush 
Administration may have a lasting impact on the environment, on civil 
liberties at home and abroad, on the wages and working conditions of 
U.S. workers, on highway safety, and on many other matters of concern 
to the American people.
    We will hear from seven distinguished and knowledgeable witnesses 
at today's hearing. I'm interested in hearing their views on the 
following three issues:
    First, is the Bush Administration's record on midnight rulemaking 
subject to criticisms that its predecessors' records are not? In 
particular:

          Did the Bush Administration strategically issue 
        midnight rules in an attempt to avoid meaningful public and 
        Congressional scrutiny of its controversial policies?

          Did the Bush Administration's midnight rulemaking 
        depart from well-established regulatory practices and 
        procedures?

          Did the Bush Administration's midnight rulemaking 
        favor special interests over the public interest, in a way that 
        earlier administrations' midnight rules did not?

    Second, when and why should we be concerned about midnight rules--
whether they spring from a Democratic or a Republican administration? 
Is midnight rulemaking an undesirable way to make public policy?
    And third, should Congress pass legislation governing midnight 
rulemaking? Or does Congress already have at its disposal effective 
tools to deal with objectionable midnight rules, including resort to 
the Congressional Review Act and appropriations restrictions? If 
legislation is needed, what particular form should it take? I 
especially look forward to hearing Jerry Nadler's views on that last 
question.
    Thank you, again, Chairman Cohen.
                               __________
    Mr. Cohen. I am now pleased to introduce the witness for 
our first panel for today's hearing, the Honorable 
Representative Jerrold Nadler.
    Congressman Nadler represents New York's 8th congressional 
district, which includes Manhattan's west side below 89th, and 
I guess down to the battery; also, areas of historic Brooklyn.
    Congressman Nadler was first elected to the House in 1992, 
after serving 16 years in the New York State Assembly. In 2004, 
he was elected with a resounding 80 percent of the vote.
    Throughout his career, he has championed civil rights, 
civil liberties, efficient transportation, and a host of 
progressive issues, such as access to health care, support for 
the arts, and the protection of the Social Security system.
    He is a voice for the voiceless. In his roles as an 
assistant whip and a senior Member of both the House Judiciary 
and Transportation Committees, Congressman Nadler has the 
opportunity on a daily basis to craft and shape the major laws 
that govern our country.
    He currently serves as Chairman of the Constitution, Civil 
Rights and Civil Liberties Subcommittee of Judiciary, which 
considers all proposed constitutional amendments and deals with 
such issues as freedom of expression, religious freedom, 
privacy, due process, civil rights, reproductive choice, and 
lesbian, gay, bisexual and transgender rights.
    Thank you for your willingness to participate in today's 
hearing.
    And although I am sure you know the procedure, I will go 
over it for the benefit of our other witnesses.
    Without objection, your written statement will be placed 
into the record, and we would ask that you limit your oral 
remarks to 5 minutes. We have a lighting system with a green 
light, which is for go. At 4 minutes, it turns yellow, which is 
like the 2-minute mark in the NFL. Then at the 5-minute mark, 
you get a red light, which means you are about at the end of 
your testimony.
    After each witness has presented his or her testimony, 
Subcommittee Members will be allowed to ask you questions, 
subject to the 5-minute limit.
    After Mr. Nadler testifies, we might have votes, and we are 
going to try to take into consideration Mr. Kennedy's schedule 
and have him, without any objection, be our first witness and 
have questions of him so he can make an airplane and have time 
to catch a fast train. Get me a ticket back to New York.
    Mr. Nadler, will you proceed with your testimony?

TESTIMONY OF THE HONORABLE JERROLD NADLER, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Nadler. Thank you, Mr. Chairman, Ranking Member Franks, 
and my fellow Members of the Judiciary Committee.
    I appreciate the opportunity to testify before you today on 
this very important issue.
    The problem of midnight rules is not a new one, but the 
practice is prone to abuse and undercuts our democratic 
process.
    That is why, on the first day of this Congress, I 
reintroduced the Midnight Rule Act, H.R. 34, which would allow 
incoming agency heads to prevent rules adopted within the last 
3 months of the previous Administration from going into effect.
    This legislation lays out an approach to enable an incoming 
President to deal with midnight rules without tying him up for 
months or years and preventing him from implementing his agenda 
or her agenda.
    When the President rushes to finalize regulations in 
advance of an incoming Administration, especially during the 
lame-duck period, that President binds the hands of his 
successor for 6 months to as long as 2 years.
    This can be accomplished with minimal political 
accountability by the outgoing President or by the President's 
party, whose members hope to retain some of their jobs.
    In this way, midnight rules differ from other executive 
actions, such as executive orders, which the new President can 
change, if he wishes, upon assuming office.
    The conduct of the outgoing Bush administration has 
highlighted the problem in several ways. First, the Bush 
administration rushed many rules through the process at an 
accelerated pace. This was facilitated by a memo issued by the 
White House chief of staff, Josh Bolton, on May 9, 2008.
    It instructed agencies to finalize regulations by November 
1, enabling the outgoing Administration to put in place 
regulations just prior to the swearing in of the new President.
    The results of the Bolton memo are clear. In October and 
November of last year, Federal agencies submitted 30 ``major 
rules,'' that is, those with an economic impact of at least 
$100 million each, to the Government Accountability Office.
    During the same period in 2007, that number was only 13. 
This represents an increase over 1 year of 130 percent.
    Similarly, the number of significant rules submitted to the 
Office of Information and Regulatory Affairs September 1, 2008 
and December 31, 2008 represents an increase of 102 percent in 
the same period in 2007, 190 significant final rules as opposed 
to 94 such rules the year before.
    Second, lack of accountability in its waning weeks enabled 
the Administration to adopt the highly controversial rules on 
family planning, endangered species and global warming, that 
may not have passed muster in the more public debate. But since 
there was no more public accountability, no election to look 
forward to, they could do what they wanted and bind the hands 
of the new Administration.
    Finally, these midnight rules allow the Administration to 
extend its policies well into the next Administration, despite 
the fact that the voters voted to move in a new direction.
    The Midnight Rule Act would address this problem in several 
ways. It would give a new agency head a limited period of time 
to review and act on regulations adopted in the final 90 days 
of a President's term.
    The new agency head would have 90 days after being 
confirmed to his office or her office to disapprove a midnight 
rule by publishing a statement of disapproval in the Federal 
Register and sending a notice of disapproval to the 
congressional Committee or Committees of jurisdiction.
    In order to address emergencies, limited exceptions are 
provided in cases of an imminent threat to health or safety, 
enforcement of criminal laws, implementation of an 
international trade agreement, and national security.
    Congress could revoke some of these rules under the 
Congressional Review Act. However, the Congressional Review Act 
requires individual votes on each rule.
    Given the sheer number of midnight rules issued by the Bush 
administration or perhaps by Administrations in the future, 
this would require more time than Congress has available, while 
we are trying to pass an economic recovery package, finalize FY 
2009 appropriations bills, and prepare for a new budget for the 
upcoming fiscal year.
    Most importantly, this proposal would place a check on 
midnight rules. The American people have a right to hear the 
views of candidates for President and other offices on very 
important issues, and then to be governed by the choice that 
they make in the election, and not to be governed by the dead 
hand of the choice they made 4 or 8 years earlier.
    The American people are entitled to alter the direction of 
their government based on new circumstances or even to change 
their minds, if they wish. That is why we have a new 
presidential election every 4 years, and that is why the 
policies of the old outgoing Administration should not be 
permitted to continue and to bind the new incoming 
Administration for 6 months to 2 years.
    I have received many helpful comments and suggestions on 
ways to clarify this legislation and I hope to work with my 
colleagues to fine-tune it.
    The core policy is that the will of the electorate should 
not be frustrated in effectuating new policy by the old 
Administration. Voters have a right to debate critical issues 
in the selection of their representatives and to have their 
choices implemented after the electoral process is finished.
    Thank you again for the opportunity to testify today and I 
look forward to working with you all to comprehensively address 
this problem in the days ahead.
    [The prepared statement of Mr. Nadler follows:]

Prepared Statement of the Honorable Jerrold Nadler, a Representative in 
                  Congress from the State of New York

    Thank you, Mr. Chairman, Ranking Member Franks, and my fellow 
members of the Judiciary Committee. I appreciate the opportunity to 
testify before you today on this very important issue.
    The problem of midnight rules is not a new one, but the practice is 
prone to abuse and undercuts our democratic process.
    That is why, on the first day of this Congress, I reintroduced the 
Midnight Rule Act, H.R. 34, which would allow incoming Agency heads to 
prevent rules adopted within the last three months of the previous 
administration from going into effect.
    This legislation lays out an approach to enable an incoming 
president to deal with midnight rules--that is, rules finalized, or 
which took effect, at the very end of his predecessor's term--without 
tying up the new president for months or years trying to implement his 
agenda.
    The 22nd Amendment to the Constitution limits a president to two 
terms in office. Midnight rules can be abused to allow a president to 
reach into a third term without any accountability.
    Past presidents have used the final weeks of their terms to take 
actions, or advance policies, that would be politically difficult prior 
to an election. It is a tradition going back to the earliest days of 
the Republic.
    When a president rushes to finalize regulations in advance of an 
incoming administration, especially during the lame duck period, that 
president binds the hands of his successor for six months to as long as 
two years. This can be accomplished with minimal political 
accountability by the president--who is leaving office--or by the 
president's party, whose members hope to retain their jobs.
    In this way, midnight rules differ from other executive actions, 
such as executive orders, which a new president can change upon 
assuming office.
    The conduct of the outgoing Bush administration really highlighted 
the problem in several ways.
    First, the Bush administration rushed many rules through the 
process at an accelerated pace. This was facilitated by a memo issued 
by the White House Chief of Staff, Josh Bolten, on May 9th, 2008. It 
instructed agencies to finalize regulations by November 1st, enabling 
the outgoing administration to put in place regulations just prior to 
the swearing-in of the new President.
    The results of the Bolton memo are clear. In October and November 
of 2008, federal agencies submitted 30 ``major rules'' (those with an 
economic impact of at least $100 million), to the Governmental 
Accountability Office. During the same period in 2007, that number was 
only 13. This represents an increase of 130%.
    Similarly, the number of ``significant rules'' submitted to the 
Office of Information and Regulatory Affairs increased by 102% between 
September 1, 2008 and December 31, 2008 over the same period in 2007 
(190 significant final rules as opposed to 94 such rules the year 
before).
    Second, the lack of accountability in its waning weeks enabled the 
Bush administration to adopt highly controversial rules that may not 
have passed muster in a more public debate.
    These midnight rules adopted by the Bush Administration will, among 
other things, curtail access to family planning services, and even to 
information about reproductive health options; weaken enforcement of 
the Endangered Species Act with respect to federal projects which might 
threaten endangered species; allow the agencies to bypass reviews of 
global warming and potential ecological impacts; and allow mining 
companies to dump toxic waste without concern for environmental harm.
    Finally, these midnight rules allow the Administration to extend 
its policies well into the new administration despite the fact that the 
voters have voted to move in a new direction.
    The Midnight Rule Act would address this problem in several ways.
    It would give a new agency head a limited period of time to review 
and act on regulations adopted in the final 90 days of a president's 
term. The new agency head would have 90 days after being appointed to 
disapprove a midnight rule by publishing a statement of disapproval in 
the Federal Register, and sending a notice of disapproval to the 
congressional committees of jurisdiction.
    In order to address emergencies, limited exceptions are provided in 
cases of an imminent threat to health or safety, enforcement of 
criminal laws, implementation of an international trade agreement and 
national security.
    Congress could revoke some of these rules under the Congressional 
Review Act. However, the CRA would require individual votes on each 
rule. Given the sheer number of midnight rules issued by the Bush 
Administration, this would require more time than Congress has 
available while we are trying to pass an economic recovery package, 
finalize FY2009 appropriations bills, and prepare for a new budget for 
the upcoming fiscal year.
    The Midnight Rule Act would give the new administration the 
opportunity to review carefully the last minute handiwork of its 
predecessor. Rulemaking is, in the first instance, a function of the 
executive. Congress and the courts would still retain their authority 
to act as a check on the executive.
    Most importantly, this proposal would place a check on midnight 
rules. The American people have a right to hear the views of candidates 
for president and other offices on these very important issues and then 
to be governed by the choice they made in the election, and not by the 
dead hand of a choice they made four years earlier. The American people 
are entitled to alter the direction of their government based on new 
circumstances, or even to change their minds. That is why we have a new 
presidential election every four years.
    I have received many helpful comments and suggestions on ways to 
clarify this legislation, and I hope to work with my colleagues to fine 
tune it.
    The core policy is that the will of the electorate should not be 
frustrated in effectuating new policy. Voters have a right to debate 
critical issues in the selection of their representatives and to have 
those choices realized though the electoral process.
    Thank you again for the opportunity to testify today, and I look 
forward to working with you all to comprehensive address this problem 
in the days ahead.
                               __________
    Mr. Cohen. Well, I thank the gentleman for his statement.
    The Chair does not have a question of Mr. Nadler and would 
entertain questions from the Subcommittee. If not, we could 
proceed to have the second panel come forward and Mr. Kennedy 
could give his remarks first, and then he could catch his 
airplane.
    Without objection, can we let Mr. Nadler go?
    Mr. Nadler. Thank you.
    Mr. Cohen. Let my person go. Thank you.
    If the second panel would come up, we are going to forego 
the traditional introductions of the entire panel for purposes 
of trying to accommodate the airplane schedule that Mr. Kennedy 
has, introduce him, have his statement and have questions from 
the panel.
    Our second witness is Robert F. Kennedy, Jr. Mr. Kennedy is 
credited with leading the fight to protect New York City's 
water supply, but his reputation as a resolute defender of the 
environment stems from a litany of successful legal actions.
    The list includes winning numerous settlements for 
Riverkeeper, prosecuting governments and companies for 
polluting the Hudson River and Long Island Sound, arguing cases 
to expand citizen access to the shoreline, and suing treatment 
plants to force compliance with the Clean Water Act.
    Mr. Kennedy acts as chief prosecuting attorney for 
Riverkeeper. He also serves as senior attorney for the National 
Resources Defense Council. And I may say his name, in addition 
to the polar bear, forced me to write a check occasionally. And 
is the President, also, of the Waterkeeper.
    At Pace University School of Law, he is a clinical 
professor and supervising attorney at the Environmental 
Litigation Clinic in White Plains, New York.
    Earlier in his career, he served as assistant DA in New 
York City; published several books, including ``The 
Riverkeepers'' (1997), with John Cronin. His articles have 
appeared in The New York Times, The Atlantic Monthly, The Wall 
Street Journal, Esquire, The Village Voice, The Washington 
Post, et cetera.
    He has been on radio, ``Air America,'' with ``Ring of 
Fire.'' And he is the father of six children, and he hopes to 
leave an earth similar to the one that he has had the 
opportunity to inhabit.
    Mr. Kennedy, thank you for coming to our Subcommittee.

  TESTIMONY OF ROBERT F. KENNEDY, JR., CHAIRMAN, WATERKEEPER 
                            ALLIANCE

    Mr. Kennedy. Thank you, Mr. Chairman, and all the Members 
of the Committee and my fellow panelists. Thanks for taking 
into account my travel schedule.
    I have filed extensive comments with the Committee, going 
through the dozens of midnight regulations passed by the Bush 
administration over the past couple of months that impact the 
environment.
    I am going to focus on four of those today very, very 
quickly, because these are regulations that we think should be 
seriously considered by your Committee and by Congress for 
review under the Congressional Review Act.
    Also, we strongly support the passage of Congressman 
Nadler's proposed legislation, which could deal with some of 
these problems.
    Very briefly, the Endangered Species Act waiver, which 
waives the Endangered Species Act requirement for the Pentagon, 
for the Energy Department, for all other government agencies to 
engage in consultations with National Marine Fisheries and Fish 
and Wildlife Service when they are going to engage in an action 
that is going to harm one of these species.
    Number two, the hazardous waste regulation, which exempts 
three million tons of most highly toxic hazardous waste from 
regulation under RCRA. It is clear that this is going to 
significantly damage public health if we allow this to 
continue.
    Number three, the CAFO rules. CAFOs are factory farms, the 
worst single polluters of water in America today. They produce 
500 million tons of waste every year.
    Smithfield Foods has one facility, called the Circle Four, 
in Utah, which has 850,000 hogs. It produces more waste than 
all the human beings in New York City combined every day.
    New York City has spent about $20 billion building sewage 
treatment plants to treat its waste so that it doesn't pollute 
the Hudson River and its environs. Smithfield simply dumps that 
waste into the environment. It is illegal. They have been able 
to corrupt public officials in order to get away with this.
    They cannot produce a pound of pork or a pound of bacon or 
a pork chop cheaper and more efficiently than a family farmer, 
a traditional farmer, unless they break the law, unless they 
shift their cleanup costs to the public. Their cleanup costs 
are much greater than those that accrue on traditional farms.
    The ``Raleigh News and Observer,'' in 1993, won the 
Pulitzer Prize for a five-part series that showed how factory 
farmers had corrupted virtually every relevant official in the 
state to get them to overlook the pollution from these 
facilities.
    Their whole business contemplates illegal behavior and 
their capacity to avoid enforcement of that. They were easily 
able to do that during the Bush administration, which was 
willing to overlook this illegal and corrupt behavior that was 
damaging communities, the environment, putting family farmers 
out of work.
    Now, the Bush administration has institutionalized that 
lack of enforcement through this bill.
    Finally, the buffer zone rule, and this, to me, is the most 
important one, Mr. Chairman. This is the rule that is the last 
barrier that imposed any controls at all on mountaintop 
removal.
    A couple of weeks ago, I flew over to Cumberland and I 
saw--if the American people could see what I saw in West 
Virginia and eastern Kentucky, there would be a revolution in 
this country.
    We are literally cutting down the Appalachian Mountains, 
these historic landscapes where Daniel Boone and Davy Crockett 
roamed, with these giant machine called draglines, which are 22 
stories high.
    I flew under one of them in a Piper Cub. They cost a half 
billion dollars and they practically dispense with the need for 
human labor, which indeed is the point.
    I remember a conversation I had with my father when I was 
14 years old, during the 1960's, when he was fighting strip 
mining in Appalachia. And he said to me, ``They are not just 
destroying the environment, but they are permanently 
impoverishing these communities, because there is no way that 
they can regenerate an economy from these landscapes that are 
left behind.''
    And he said, ``They are doing it so they can break the 
unions,'' and that is exactly what they did. When he told me 
that, there were 140,000 unionized mine workers in West 
Virginia digging coal out of tunnels in the day. Today, there 
are fewer than 11,000 miners left in the state. Almost none of 
them are unionized, because the strip industry isn't--they are 
taking more coal out of West Virginia than they were in 1968.
    The only difference is back then, at least some of that 
money was being left in the state for salaries, for pensions, 
for reinvestment in the communities. Today, it is all going 
straight up to Wall Street to the corporate headquarters of 
Massey Coal, Peabody Coal, Arch Coal, and the big banking 
houses, like Bank of America and Morgan, which own these 
operations.
    Ninety-five percent of the coal in West Virginia are owned 
by out-of-state operations, mainly on Wall Street. They are 
liquidating the state for cash, using these giant machines, 
2,500 tons of explosives that they detonate every day in the 
state of West Virginia, the equivalent of a Hiroshima bomb once 
a week.
    They are blowing the tops off the mountains to get at the 
coal seams beneath. Then they take the rock, debris and rubble 
and they plow it into the adjacent river valley.
    The bury the rivers, they flatten the hollows. They have 
already buried, according to EPA, 1,200 miles of rivers and 
streams. They have cut down the 460 biggest mountains in West 
Virginia.
    By the time they get done, within a decade, they will have 
flattened an area the size of Delaware.
    It is all illegal. You cannot, in the United States, take 
rock, debris and rubble and dump it into a waterway without a 
Clean Water Act permit, and you could never get a permit to do 
such a thing.
    So we sued them, the environmental community, Joe Lovett, 
Kentuckians for the Commonwealth, in front of a conservative 
republican Federal judge, Judge Charles Haden. And Judge Haden 
said the same thing I did.
    In the middle of that hearing, Judge Haden questioned the 
Corps of Engineers colonel who had allowed all this to happen 
and said to him, ``This is obviously illegal. How could you let 
this happen?'' And the Corps colonel said to him, ``I don't 
know, Your Honor. We just kind of oozed into it.''
    And Judge Haden ended that hearing by giving us a complete 
victory by banning all mountaintop mining, saying it is illegal 
from day one and it is illegal today, and he enjoined all of 
it.
    Two days from when we got that decision, lobbyists for 
Massey Coal and Peabody Coal met in the back door of the 
Interior Department with Stephen J. Griles, Gale Norton's first 
deputy chief, who was a former lobbyist for Massey Coal and 
Peabody Coal, and who is now serving a 10\1/2\ month jail 
sentence, and they rewrote one word, the interpretation of one 
word of the Clean Water Act, the definition of the word 
``fill,'' to change 30 years of statutory interpretation to 
effectively overrule Judge Haden's decision and allow 
mountaintop mining, allow the disposal of rock, debris, rubble, 
garbage, any solid material into any water body of the United 
States in all 50 states today.
    One barrier that we were left with after this destruction 
that happened from the Interior Department because of Griles 
was the stream buffer rule that said you can't dispose of the 
stuff within 100 feet of a perennial or ephemeral stream.
    These are the most important streams, because they feed the 
whole watershed.
    That law was left in place. And as a favor to the industry, 
in the last days of the Bush administration, this White House, 
which was the indentured service for the worst of the worst of 
the worst of these polluters, simply got rid of that rule, the 
last barrier to cutting down the entire Appalachian Mountains.
    Let me just say one final thing. During the Pleistocene ice 
age, where my home is in Mount Kisco, New York, it was under 
two miles of ice and the rest of North America was turned into 
tundra, with no trees left.
    The last refuge for those trees, they all retreated into 
one place, which was the Appalachian Mountains of West Virginia 
and eastern Kentucky. That is where they survived the ice age.
    And when the ice withdrew, all of the forests in North 
America were reseeded from Appalachia. That is why it is the 
richest forest on earth, the richest ecosystem, temperate 
ecosystem on the face of the earth, because it is the only one 
that survived the ice age.
    And today, these companies, out of greed and ignorance, are 
doing or accomplishing what the glaciers couldn't do, which is 
flattening those mountains and stealing our forests, and this 
Congress ought to do something about it.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Kennedy follows:]

              Prepared Statement of Robert F. Kennedy, Jr.

































                              ATTACHMENT 1











































































                             ATTACHMENT 2



























































































































































                               __________
    Mr. Cohen. Thank you, Mr. Kennedy.
    I will normally ask questions first, but I am going to 
reserve that right and yield to other Members who might have 
questions.
    Mr. Franks, do you have questions? Ranking Member Franks?
    Mr. Franks. Mr. Chairman, I may have questions in a moment.
    I am going to, if it is all right, yield to my colleague, 
Steve King, here first.
    Mr. King. Thank you, Mr. Franks, our Ranking Member, and, 
Mr. Kennedy, for your testimony.
    I regret that I have not read deeply through a lot of the 
material that you have put out, but it is clear to me that you 
put a lot of material out. It is also clear to me that you have 
made a visit or two to Iowa.
    I just reflect back upon a meeting in Clear Lake a few 
years ago and a quote that I recall would be--I believe, 
actually, this would be exact--``Large scale hog producers were 
a greater threat to the United States and democracy than Bin 
Laden's terrorist network.''
    Is that an accurate quote?
    Mr. Kennedy. I don't know if that is accurate, but I 
believe it and I support it. And the reason for this is the 
same reason Teddy Roosevelt said it.
    Teddy Roosevelt said this Nation would never be destroyed 
by a foreign enemy, but he said that ``Malefactors of great 
wealth, working from within, would erode and subvert American 
democracy.''
    And if you look, again, not from me, but from the ``Raleigh 
News and Observer,'' a five-part series on ``Boss Hog,'' it 
shows how this industry meticulously subverted and corrupted 
virtually every relevant public official in the state.
    Mr. King. Mr. Kennedy, excuse me, I have got a lot of 
questions to ask. But I think----
    Mr. Kennedy. Because this----
    Mr. Cohen. Let the witness answer the question, Mr. King, 
please.
    Mr. Kennedy. I am answering your question, sir. And you 
asked me an inflammatory question, and I am giving you an 
answer for it.
    There are laws now----
    Mr. King. Your statement, Mr. Kennedy, you are telling me 
that your statement is an inflammatory question when I asked if 
you can confirm it.
    Mr. Kennedy. I am telling you that I can confirm it, and I 
am explaining it to you so that you understand what I am 
talking about.
    Mr. King. I would be happy to introduce your op-ed into the 
record, if you could just suspend for a moment.
    Mr. Cohen. If we cannot have a colloquy here--Mr. Kennedy, 
you go ahead and respond and if we need extra time for Mr. King 
to ask questions, we will provide it to Mr. King, to be fair to 
him.
    But I think it is fair that when the witness is asked a 
question, he be allowed to respond.
    Mr. Kennedy, proceed.
    Mr. Kennedy. Today, in 14 states, there are laws that make 
it illegal to criticize food from factory farms. Now, you may 
say this is anti-American. I think it is. I think it violates 
our first amendment rights.
    And you may say this couldn't be true, but ask Oprah 
Winfrey, who sent for a 6\1/2\ week jury trial to Texas, 
because she criticized, on her show, factory farm food.
    Do you think that is American? Do you think that that is 
democratic?
    And three state legislatures have now passed laws that make 
it illegal to photograph a factory farm or a factory farm 
animal from a public road. And Maryland and North Carolina, 
many other states, have laws that make it illegal for the 
public to learn where factory farms are located, even though 
the government has this information.
    This is an assault on our democracy. Wherever you see 
environmental injury, you will also see the subversion of 
democracy. And that is what I talked about when I made that 
statement.
    Osama Bin Laden has no power over this country to make us 
change our laws. We do. And the biggest threat to our country 
is if legislatures, and particularly those in the possession of 
large businesses, begin restricting our rights at home to do 
what the Constitution says that we can do.
    Osama Bin Laden can't make us alter our own Constitution, 
but that is happening in this country every day because of the 
power of this industry.
    Mr. Cohen. Thank you, sir.
    Mr. King, you are recognized, and we will give you the time 
that you need for questions.
    Mr. King. Thank you, Mr. Chairman.
    And consistent with Mr. Kennedy's response, I have in my 
hand an op-ed dated Tuesday, May 14, 2002, in The Des Moines 
Register, titled, ``I'm serious: Hog lots threaten democracy,'' 
by our witness, Mr. Robert F. Kennedy, Jr., and it is part of a 
public document, but I would ask unanimous consent to enter 
that into the record, and I think that does flesh out the 
statement that he has made.
    I would also ask----
    Mr. Cohen. Without objection.
    [The information referred to follows:]
    
    
    Mr. King. Thank you. And I would also ask that a Des Moines 
Register article dated April 10, 2002, that is a news article 
that stipulates some of the same dialogue that took place in 
Iowa back then, unanimous consent to enter it into the record, 
as well.
    Mr. Kennedy. I am happy to have that entered in the record 
with the proviso that the information in that article--that 
article is not necessarily true.
    Mr. Cohen. The articles speak for themselves.
    Mr. Kennedy. It was taken from representatives of the Pork 
Producers Council and the American farmer.
    Mr. King. Point of order, Mr. Chairman.
    Mr. Cohen. Without objection, the statement will be allowed 
in and the statement only speaks to what----
    [The information referred to follows:]

    
    
    
    
    
    
    Mr. King. Point of order, Mr. Chairman.
    Mr. Cohen. Yes, sir.
    Mr. King. Is the witness allowed to object to a unanimous 
consent request?
    Mr. Cohen. Well, no, he can't and he didn't. He did, but it 
wasn't permitted, and he is out of order. But we understand 
that and that he didn't understand necessarily the rules on 
admitting something into the record, because it doesn't stand 
for the veracity of what is contained therein.
    Thank you, Mr. King. You are recognized.
    Mr. King. Thank you, Mr. Chairman, I appreciate that.
    And I would be very happy to go deeply into this hog issue, 
and I will just make this statement into the record, and that 
is that on a per head basis, today's hog production in Iowa and 
around the country is far, far more favorable to the 
environment than anything we have ever had before and it gets 
better every single day.
    Our water is cleaner. Our soil is cleaner. We are doing a 
far better job of taking care of that livestock. And we had 
more hogs in Iowa in 1952 than we have today, and they are far 
safer today than they were in 1952.
    But I think the point----
    Mr. Kennedy. You have got more family farmers----
    Mr. King. I will get to you with a question, and you will 
have an opportunity to answer, Mr. Kennedy.
    I think the point that the panel is going to be interested 
in is not so much debating the hog industry in Iowa, although I 
think----
    Mr. Cohen. Mr. King? Mr. King?
    Mr. King [continuing]. It is an industry----
    Mr. Cohen. Mr. King, for the record, without objection, you 
have an additional 3 minutes, if you so desire.
    Without objection.
    Mr. King. Thank you, Mr. Chairman.
    But I think the point that this panel is going to be 
interested in is the statement that the hog industry has 
corrupted public officials. I think at one point you said every 
public official in the state that had effect on this.
    And I think it impugns all elected public officials, and I 
think that is a very broad statement, and I think your record 
of making very broad statements, I think, causes us to take a 
look at the rest of your testimony here today with a bit of a 
jaundiced eye.
    And I will give you an opportunity to respond to that.
    Mr. Kennedy. What I said was that the ``Raleigh News and 
Observer'' concluded that--and with strong documentation, a 
five-part series that won the Pulitzer Prize--that every 
relevant public official in the state of North Carolina had 
been corrupted by that industry.
    I urge you to go read that article.
    Now, what happened, once they did it in North Carolina, 
they dropped the price of hogs to $0.08 a pound at kill weight. 
At that point, states like Iowa, like your state, where the 
public officials could not be that easily corrupted, had to 
adopt the same system or they would have been out of business.
    But it has put out, as you probably know, almost 100,000 
independent hog farmers in Iowa. It put out 28,700 independent 
hog farmers in North Carolina.
    Mr. King. Again, I am going to take it from that response 
that you do agree with the statement that every public official 
in the state had been corrupted by this process.
    Mr. Kennedy. I said that that is what the ``Raleigh News 
and Observer'' concluded.
    Mr. King. Since you have introduced that into the record, I 
am going to take it that you are endorsing that statement, and 
you believe it.
    Mr. Kennedy. I am saying that that--I didn't investigate 
every public official in the state. I am saying that is what 
the ``Raleigh News and Observer'' concluded.
    Mr. King. And I will just allow the panel----
    Mr. Kennedy. They won the Pulitzer Prize for it, and maybe 
not every single one was corrupted, I can't tell you.
    Mr. King. There may be some exceptions.
    Mr. Kennedy. I didn't do the report.
    Mr. King. Thank you. And is it also your belief that manure 
is a hazardous toxic waste?
    Mr. Kennedy. Manure, when it is applied at agronomic rates 
as a fertilizer has a beneficial use, but when it is applied 
beyond agronomic rates, then it becomes a poison to the land 
and the water and people.
    Mr. King. And you understand, Mr. Kennedy, that we do have 
regulations that limit the rate of application so that it is 
not a pollutant.
    Mr. Kennedy. If you think those regulations are enforced, 
if you think those regulations are effective, I beg you to come 
to North Carolina with me and look around. Come even to Iowa 
and look around.
    That is what the captive agencies are saying, and it is 
complete baloney.
    Mr. King. Mr. Kennedy, I would remind you that I live in 
the middle of this and the wind blows in four directions and 
the water runs downhill, and I have lived here all my life----
    Mr. Kennedy. I would ask you----
    Mr. King [continuing]. And I do not see the description you 
described to the panel, and I have got to take exception to it.
    Mr. Kennedy. I would ask you how much in contributions you 
receive from the Farm Bureau and from the Pork Producers 
Council.
    Mr. King. I would have to look. I would ask you how you got 
into this industry in the first place.
    Mr. Kennedy. How did I get into it?
    Mr. King. Yes.
    Mr. Kennedy. Because they are the worst polluter in 
America.
    Mr. King. Weren't you assigned to do some public service 
that got you started in this, Mr. Kennedy?
    Mr. Kennedy. You mean in protecting the environment? No.
    Mr. King. I mean assigned to 800 hours of public service 
that was your gateway into this Hudson River issue.
    Mr. Cohen. Time has expired.
    Mr. Kennedy----
    Mr. King. You impugn my character with your question, Mr. 
Kennedy, and I don't question yours.
    Mr. Kennedy. No. If you are asking me how I got into----
    Mr. Cohen. Time has expired, and I am afraid, while this 
was very interesting, we are not going to be able to continue 
it. It does conjure up all thoughts of Barry Goldwater and 
extremism in the defense of liberties is no vice, moderation 
should be no virtue.
    Mr. Watt, do you seek recognition?
    Mr. Watt. Yes, sir.
    Mr. Cohen. You are on.
    Mr. Watt. Thank you, Mr. Chairman. I appreciate the 
Chairman having this hearing.
    This is a classic case where we have not only gone into the 
weeds, but into the hog farms, which gets us back pretty much 
to where Mr. King ended here, because he said there were 
regulations in effect and Mr. Kennedy said those regulations 
are not being followed.
    The hearing, interestingly enough, is about whether the 
regulations even will be in effect, because when we don't 
protect ourselves from these kind of midnight rulemaking 
procedures, then we have the prospect at least that not even 
the regulations will be in effect.
    There will be a new set of regulations that have wiped out 
the past ones in the middle of the night.
    So for us to focus on any one of the particular--not that 
this testimony hasn't been interesting and entertaining, and I 
am sure there are other people here who will focus on other 
rules that were either changed or not changed at the last 
minute, the real policy question we are confronted with is how 
can we protect ourselves against this kind of midnight 
rulemaking.
    And that really has no substantive content to it. It is a 
policy content, because sometimes when we protect ourselves 
against midnight rulemaking, it will be protecting ourselves 
against rule changes that we would like to have made and 
sometimes it will be protecting ourselves against changes that 
we would not like to have made.
    And on that score, I think I am fully--although I haven't 
looked at the details of Mr. Nadler's bill, I am fully 
supportive of the concept of his bill and would just give one 
illustration where there was bipartisan agreement that the 
rules should not be changed.
    I happen to sit on the Financial Services Committee and 
chaired the Oversight Subcommittee, and we had a hearing about 
the real estate procedures, closing process.
    The rules that were proposed right at the end of the Bush 
administration, Republicans--there wasn't a single person who 
showed up who supported the changes that were being proposed, 
either Republican, Democrat, conservative, liberal however you 
wanted to categorize them.
    Everybody testified against the changes that were being 
proposed and, sure enough, in the dark of night, at a time when 
it appeared that the Administration couldn't do--the new 
Administration wouldn't be able to do anything about it, except 
in a very limited way by going within 60 days and, under the 
Congressional Review Act, going through something as difficult 
as those rules and trying to understand them, there was no way 
to reverse them.
    So the concept, the policy of having a more transparent 
process I hope Mr. King isn't disagreeing with, even though he 
might want to go at the witness on the weeds or the hogs or 
whatever it is that he was questioning.
    The real policy question is should an Administration that 
is on the way out, Republican or Democrat, because there will 
be a Democratic administration at some point, on the way out, 
remember that, is it a good policy practice to allow them just 
willy-nilly to change the rules that have been in play for so 
long?
    And I hope there is nobody here who disagrees with the 
policy that that is a bad idea, and I would have to say it is a 
bad idea whether--regardless of the content of what the new 
rule is and regardless of whether it is an outgoing Republican 
administration or an outgoing Democratic administration.
    That is what we need to be dealing with in this Committee.
    I didn't ask Mr. Kennedy any questions, but I hope you will 
just say you agree with that or you don't.
    Mr. Kennedy. The caveat I have about that is that under the 
current regimen, the way that the regulatory process works, 
there are so many obstacles to big regulations being passed 
that it takes--in fact, I had a lawsuit against the Federal 
Government, against the EPA, in which this became a contention 
and was settled by the court.
    And they said that if a regulatory agency jumps through all 
the hoops that it is supposed to do from the beginning, from 
the original notice and comment to the end of the regulatory 
process, the average regulation takes about 8 years to get 
through the regulatory process.
    Mr. Watt. But you can't have this both ways, Mr. Kennedy.
    Mr. Kennedy. No. All I am saying----
    Mr. Watt. And as a policy matter, it is hard for us to be 
on both sides of this issue.
    I understand the concern about the length of time that it 
takes to do rulemaking, but if every Administration is 
operating under the same set of procedures, they have to get 
through that process either far enough in advance of the time 
so that the new incoming Administration--or they shouldn't be 
able to do it at midnight on January 19, when they are going 
out on January 20.
    Mr. Kennedy. Here is the thing, Congressman, is that during 
the Clinton administration, many of these--the Administration 
tended to go through all of those steps carefully in the 
regulatory process and, at the end, they ended up with a big 
balloon of regulations that they had done through the last 
couple months.
    But in this Administration, a lot of these midnight regs--
the regulatory process just began in May or June or July or 
August and in one case, the case of the Endangered Species Act, 
they received tens of thousands of comments.
    The comment reviewers had an average--had to review an 
average of nine comments per minute in order to get the 
regulations out.
    Also, they weren't doing what they were supposed to do. 
These are genuine midnight regulations that didn't receive----
    Mr. Watt. I think we are generally on the same side of the 
issue.
    Mr. Cohen. Time has expired.
    Mr. Watt. I just want to be sure that neither Democrats nor 
Republicans can game the regulatory system by doing this. That 
is the point I am trying to make.
    I yield back.
    Mr. Cohen. Thank you, sir.
    The gentleman concurs with the Ranking Member and the Chair 
in that this should be bipartisan.
    Are there others seeking recognition to question Mr. 
Kennedy?
    Mr. Franks. Mr. Chairman?
    Mr. Cohen. Ranking Member Mr. Franks?
    Mr. Franks. Thank you, Mr. Chairman.
    Mr. Chairman, first of all, I know that a Committee like we 
have is often difficult to keep bipartisan, but I think I heard 
some common ground in what Mr. Watt was saying.
    It is one of those rare moments that I want to express a 
sense of gratitude to him for that, because I know that he was 
the Ranking Member of a Committee that oversaw or essentially 
handled a special project, the Administrative Law Process and 
Procedure Project for the 21st hcentury, and I think that they 
came up with a number of very good proposals.
    And I think that he has hit on the central point here. It 
is that a lot of the conservatives had equally strenuous policy 
criticisms that we leveled against the Clinton administration 
for these midnight regulations.
    And one can debate whether these are good or bad policy 
things, but I do think that Mr. Watt is correct in that he is 
suggesting that regardless of what the policy is, we have to 
ascertain what the process should be and it, of course, has to 
be done within the constraint of the Constitution and some, 
hopefully, reasonable fashion that whoever is in the White 
House can move forward with their constitutional duties and, at 
the same time, it would be consistent, and at least everyone 
can agree on the process.
    So with that, thank you, Mr. Watt.
    Mr. Kennedy, I know that you have a number of policy 
concerns with the Bush administration's late-term regulations. 
They call them the midnight rules, I guess, if that is what 
everyone wants to call them. I hate to use that terminology.
    But can you, however, identify for us the key 
administrative process concerns that you have about the way in 
which all presidential Administrations go about promulgating 
so-called midnight rules?
    Mr. Kennedy. Well, I think you put your finger on the key 
issue, Congressman Franks, which is that there is a process in 
place and that process, if you--if that process is complied 
with, you can still pass a regulation on January 15 or January 
17, and I don't consider that a midnight regulation, if they 
have gone through the process of notice and comment and 
adequately reviewed those comments.
    It could still be a bad regulation, but at least it is 
complied with the process that is out there.
    The problem with these regulations is they didn't comply 
with the process. They skirted the process. They took 
shortcuts. They did things that they weren't supposed to do in 
order to get these out the door, because they were essentially 
gifts to these industries at the last minute.
    Mr. Franks. Mr. Chairman, I have to suggest to you that 
apart from the discussion of process, that--and I always hate 
it when we say, ``Well, they did it or they did it,'' because I 
don't think that is a good argument here.
    I think we should have principle persuasion be our 
watermark here. But I have to contend that the Bush 
administration was certainly as diligent in trying to get input 
and do these things as the other Administrations were.
    Now, again, that is not the best argument in the world, 
because I am not sure that any of the Administrations perhaps 
would have gotten all the input and specificity that some of us 
might wish, but the reality is that the Bush administration 
certainly has no apologies to offer to the Clinton 
administration or the Carter administration related to how they 
moved forward with this process.
    You can attack the policy for partisan reasons or for 
whatever reasons, whatever your convictions might be, but the 
Bush administration certainly more than comported with the 
trends of the past.
    And so I think our focus should be on reforming this 
process, and then we can debate the policy in the midst of all 
of that.
    So with that, Mr. Chairman, I would yield back.
    Mr. Cohen. Thank you, Mr. Franks.
    God has given us this place in 2009 and so this is the 
Administration we have to look to. But you are right, we should 
look prospectively at all Administrations and that two wrongs 
don't make a right and all those other things.
    Mr. Kennedy, what are the particular rules that came into 
place in the last 90 days or so that are most dangerous to the 
environment?
    Mr. Kennedy. The rules that I mentioned, which are the 
buffer zone rule that got rid of the 100-foot buffer around 
streams; the hazardous waste exemption rule, this is the rule 
that exempts hazardous waste that can be burned as fuel, that 
can be burned in incinerators, it is about three million tons 
of highly toxic hazardous waste every year.
    What we know about that waste is that about 80 percent of 
the people who handle that, now they are exempt from all the 
requirements of RCRA that they safely handle it, that they 
safely transport it, that they inventory it and document it; 
that the people who transport that, 80 percent of them have 
been cited in the past for violating the laws in this area.
    For example, trucking companies, small trucking companies 
that take a load of PCBs and instead of bringing them to the 
dump and documenting them, they just dump them out on the road 
or something like that.
    And essentially all of this waste, anything that 
essentially can be burned in an incinerator, is now exempt from 
the requirements of RCRA.
    Under the Endangered Species Act, another regulation which 
is very, very damaging, which we think, again, is one of the 
ones we have selected that ought to be reviewed under the 
Congressional Review Act.
    Normally, if the Department of Defense takes an action that 
is going to endanger a species, that is going to further 
endanger a listed species, they have to do a consultation with 
the Fish and Wildlife Service and with the Corps and with 
NIMPs.
    In the past, there have been 70,000 of these consultations 
done and only 5 percent of the actions have been altered or 
stopped. So it is not a huge administrative burden. It doesn't 
stop the agency from doing things that it wants to do, but it 
plays a valuable role.
    Now, what the new rule says is that they don't have to do 
that consultation. They can do an internal evaluation about 
whether or not there is going to be a problem and then just go 
ahead and do it, without consulting, without any public notice, 
without consulting any of the other agencies of government.
    Again, the CAFO rule, the factory farm rule is another 
critical one.
    One of the midnight rules was an oil shale leasing rule 
that waives any kind of sensible or just fundamental controls 
for oil shale drilling on 20 million acres of public land in 
the western states.
    We don't know what the oil shale drilling is going to look 
like. We don't know what the industry is going to look like. 
The industry doesn't exist today.
    We ought to be able to look at the industry, say here are 
the best available technologies, let us do this. Instead, the 
new regulation just says here are two million acres and do 
anything you want with it and we are not going to have any 
Federal controls over what you do.
    It doesn't make any sense.
    Mr. Cohen. Let me ask you this. I understand the policy 
considerations that you have and that we share. But are you 
familiar with procedural defects in the implementation of any 
of these regulations that we should specifically look at and in 
terms of reforming or repealing these regulations if there was 
due process denial?
    Mr. Kennedy. Well, yes. The endangered species regulation, 
for example, and this is in the testimony, received something 
like 150,000 in the narrow comment period that they opened and 
then each comment--some of these comments were 20 or 30 pages 
long.
    They were very well thought out. They were filed by 
interest groups all over the country.
    These comments were given, on average--the reviewers who 
were charged with reviewing them were given, on average, a 
minute to review every nine of those comments.
    Some of those comments could have been 20 or 40 pages long 
and they had to review nine a minute.
    So this is not what we think of when we think of American 
Democracy, where there is an opportunity to----
    Mr. Cohen. Was there a problem there with the regulatory 
review process that is in law or, in fact, there is a----
    Mr. Kennedy. No, there is not.
    Mr. Cohen [continuing]. Process that was used?
    Mr. Kennedy. Again, I would focus less on the process than 
on looking at some of these regulations and how they were done 
rather than reforming the whole regulatory review process, 
which I think is burdensome enough to pass the regulations.
    I would hesitate to put more burdens on passing of 
regulations. I think that it takes 8 years at this point to 
pass a regulation if you do it properly.
    What I would do is look at these specific regulations, how 
they were done, and many of this violated the current 
regulatory process in order to get passed, and I would take a 
look at that.
    That is outlined in my testimony, and I assume the 
testimony of the other panelists, that they experience the same 
kind of problems with their regulations, where there were 
shortcuts taken, where there were regulatory procedures that 
were ignored, and that these regulations just slipped through.
    They literally were midnight regulations. They weren't just 
regulations that happened to be passed during January or 
December. They were literally jammed through and ignored the 
regulatory process.
    Mr. Cohen. Does another Member of the panel seek 
recognition?
    Mr. Coble. Mr. Chairman?
    Mr. Cohen. Mr. Coble?
    Mr. Coble. Move to strike the last word.
    Mr. Cohen. Without objection.
    Mr. Coble. It is good to have the panel with us.
    Is Mr. Watt still here?
    Mr. Watt, I am going to revisit briefly the weeds and the 
hog farm just a minute.
    Mr. Kennedy, by the way, good to have all of you here.
    Mr. Kennedy, I realize you were quoting from the article, 
but I take umbrage with the conclusion that every elected 
official in North Carolina had been corrupted by that issue. 
But I realize that was not your conclusion.
    Mr. Watt. Would the gentleman yield?
    Mr. Coble. Yes, sir.
    Mr. Watt. You all are ignoring one word. It was every 
``relevant'' government official.
    I take the word ``relevant'' to be the people who were 
actually impacting that process.
    I didn't take it personally. I am from North Carolina, too, 
and I hope the Chairman won't take it personally. Not that he 
is irrelevant, but I don't think he is relevant in the sense 
that they were talking about.
    Mr. Coble. I want to be heard on that matter.
    Mr. Chairman, this has been an enlightening hearing thus 
far. I think one of the issues that we need to--well, strike 
that. Let me say it a different way.
    You, Mr. Chairman, and the Ranking Member both indicated 
that the Bush administration did not create a case of first 
impression about midnight regulation. Many Administrations have 
done it, and I am not really that bothered by it, unless the 
process abrogates or undermines the Administrative Procedures 
Act.
    Now, that brings it right into focus, I think, if that is, 
in fact, the case.
    Mr. Kennedy, do you have any specific concerns about what 
midnight regulations that may have erupted, for more of a 
better way, in the Bush or Clinton administrations, that did 
perhaps undermine the process?
    Mr. Kennedy. Yes, sir. And again, that is outlined in 
detail for each of these regulations in my testimony, in the 
submitted testimony, the specific ways that the Administrative 
Procedure Act was undermined in order to jam through these 
regulations.
    That is why we call the midnight regulations. Listen, on 
NRDC's Web site, we have 460 just bad regulations, 
environmental rollbacks, listed there.
    We are not targeting those. We think those were bad, but 
they went through the administrative process.
    The midnight regulations that we are talking about here 
were regulations that basically skirted the process in order to 
be jammed through during the last 60 days.
    So all of them have that kind of problem.
    Mr. Coble. Well, I thank you for that.
    Mr. Chairman, I still don't believe this is a crisis. It 
may be a problem, but I don't think it is a crisis. And I look 
forward to seeing what develops subsequent.
    And I yield back.
    Mr. Cohen. Thank you, Mr. Coble.
    If there are no other Members seeking recognition--Mr. 
Franks?
    Mr. Franks. Mr. Chairman, just briefly, the one point I 
would make, a lot of these regulations take 8 years at the 
present circumstance.
    So how in the world can a President that is going to be 
here 8 years do anything but midnight regulations?
    Mr. Kennedy. Well, again, when I use the term ``midnight 
regulations,'' I am not using the term to refer to regulations 
that went through that regulatory process over the 8 years and 
then happened to be passed in the last month of his 
Administration.
    I am using the term to refer to regulations that were 
conceived and passed during the last 2 months and really 
skirted that whole administrative process.
    I think the regulatory process takes much too long, but, in 
fact, that is what happens. And if you go through that process, 
I have no complaint. I might not like the regulation, but I 
have no complaint, from an administrative point of view.
    Mr. Cohen. Mr. Kennedy, we thank you for your time.
    If there are no other questions, and with deference to 
Wilson Pickett, we will continue to refer to it as midnight 
regulations.
    You are excused, and I appreciate your time and your 
attendance.
    Mr. Kennedy. Thank you, Chairman.
    Mr. Cohen. For the rest of the panel, we will start. We 
thought we had votes 40 minutes ago, but Congress operates in 
its own.
    Our second witness will be Dr. Gary D. Bass. Dr. Bass is 
the founder and executive director of the OMB Watch, a 
nonprofit research and advocacy organization that promotes 
greater government accountability and transparency and 
increased citizen participation in public policy decisions.
    He is well known for assisting nonprofit organizations in 
better understanding Federal rules affecting their groups and 
constituencies and, in 2003, created NPA Action as a one-stop 
Web site on building nonprofit advocacy.
    He has coauthored several books. ``Seen, But Not Heard'' is 
the book in 2007; ``Strengthening Nonprofit Advocacy,'' which 
was published by the Aspen Institute.
    Prior to founding OMB Watch, Dr. Bass was president of 
Human Services Information Center, where he wrote other books 
and numerous articles on human services issues and published 
the ``Human Services Insider,'' a bimonthly newsletter on the 
politics of Federal human services programs.
    He, most notably, has worked on the preparation of the 
first annual report to Congress on implementation of IDEA, 
education for all handicapped children, and served as special 
assistant to Wilbur Cohen, then chair of Michigan's governor's 
task force on the investigation, prevention of abuse in 
residential institutions.
    Our third witness will be Lynn Rhinehart. Ms. Rhinehart is 
associate general counsel for the AFL/CIO, a federation 
representing 55 affiliated unions and 10 million working men 
and women, and has been in that position since 1996.
    Among her responsibilities is the coordination of the 
Federation's legal work on occupational safety and health 
issues, advising the Federation's health and safety department 
on legislative and regulatory issues pertaining to safety and 
health.
    Ms. Rhinehart clerked for 2 years for the Honorable Joyce 
Green on the U.S. District Court for the District of Columbia, 
and from 1987 to 1990, she worked as a professional staff 
member of the Senate Subcommittee on Labor, chaired by the late 
Howard Metzenbaum.
    She has published legal writings and has served as 
contributing author to Occupational Safety and Health Law, the 
leading treatise on workplace safety and health laws.
    Our fourth witness is Veronique de Rugy, senior research 
fellow at the Mercatus Center. She was previously a resident at 
the American Enterprise Institute, a policy analyst at the Cato 
Institute, and a research fellow at the Atlas Economic Research 
Foundation.
    Her research interests include the Federal budget, homeland 
security, tax competition, and financial privacy issues.
    Coauthor of ``Action ou Taxation,'' published in 
Switzerland in 1996; currently on the board of directors of the 
Center for Freedom and Prosperity; previously, director of 
academic programs at the Institute for Humane Studies-Europe 
and France.
    And our fifth witness is Mr. Michael Abramowicz. He 
specializes in law and economics, spanning areas including 
intellectual property, civil procedure, corporate law, 
administrative law, and insurance law at The George Washington 
Law School.
    He has published numerous law reviews, and his book, 
``Predictocracy: Market Mechanisms for Public and Private 
Decision-Making,'' was published by the Yale University Press.
    Before coming to GW, he was at George Mason School of Law. 
He also has served as visiting assistant professor at 
Northwestern School of Law and associate professor at the 
University of Chicago School of Law.
    And our final witness will be Curtis Copeland, a specialist 
at American National Government at CRS. Dr. Copeland's 
expertise, appropriately relevant to today's hearing, is 
Federal rulemaking and regulatory policy.
    He has previously testified before this Subcommittee as one 
of three CRS experts who are assisting the Subcommittee in the 
conduct of its administrative law projects.
    His contributions to the project are deeply appreciated.
    Prior to joining CRS, he held a variety of positions at the 
Government Accountability Office over a 23-year period.
    I thank all the witnesses for being here and for 
acquiescing to Mr. Kennedy's schedule.
    With that, Dr. Bass, will you proceed with your testimony?

TESTIMONY OF GARY D. BASS, Ph.D., EXECUTIVE DIRECTOR, OMB WATCH

    Mr. Bass. Thank you, Mr. Chairman. And I commend you and 
the Committee for having this hearing, the first out of the 
box.
    I think it is 25 years I have been following regulatory 
issues at the Federal level. This is the first time I have seen 
Congress jump in with great energy, and the last witness 
demonstrated that energy. So very interesting.
    I also want to come back to your opening comment, where you 
described this issue of midnight regulation as one of both 
procedure and substance. And I think we had this conversation 
with Mr. Kennedy's statement where both issues were being 
talked about almost simultaneously.
    The breadth of what we are calling midnight regulations is 
overwhelming, and that is why it creates an emotional issue. It 
touches not only the environmental issues that Mr. Kennedy 
talked about, but it ranges everywhere from issues dealing with 
privacy of workers under the family medical leave.
    It deals with issues all the way over to low income 
families getting health care services under Medicaid. It deals 
with a range of issues of auto protections and consumer 
protections. I am thinking of the extension, if you will, of 
the number of consecutive hours that truck drivers can drive, 
all the way down to privatizing public toll roads.
    The point is this range of midnight regulations is so 
extensive that it has engendered so much energy and emotion, 
because we have got to keep in mind, these rules affect people.
    They affect everyone in this country. And I understand the 
energy that just occurred in the interchange because of that.
    I don't think the issue is the number of rules that fall 
into this midnight regulation category. I think it is an issue 
about what impact it has had on people, and I think it is also 
about a consistent tone that Mr. Kennedy referred to about 
deregulation and serving certain interests.
    I think it is also that it wouldn't matter, in my mind, 
whether it occurred at midnight or whether it occurred at the 
beginning of an Administration or the middle.
    It is the amazing amount of regulation that was put 
together in a short time span that is reason enough for 
Congress to bring congressional oversight to this issue.
    Congressman Watt, in response to your questions, I think 
this is not just an issue about ending midnight regulation. 
Government must continue to do its work, valuable work, to 
protect health, safety, environment, consumer protection, a 
range of services on the regulatory front.
    We might be having a vastly different discussion if the 
Administratione, the last Administration used its waning time 
to address, say, financial regulatory issues or if it addressed 
chemical security or if it addressed food safety.
    It chose to use its time for these other kinds of agendas 
that make it much more troubling and make it harder to 
determine whether or not you should just end midnight 
regulation as a concept.
    We want to keep government working, we want the best of 
government, and we want to weed out the bad parts.
    Having said that, I think the Bolton memo that the Chairman 
referred to at the very opening was nothing more than 
camouflage for a strategy to tie the hands of the next 
Administration in many ways.
    The idea of that memo, although the deadlines all slipped, 
the idea of the memo was to make sure that the rules were 
published, that is, printed in the Federal Register as final, 
and made effective before the next Administration came in, 
thereby tying the next Administration's ability to undo many of 
those rules.
    Mr. Kennedy referred to the endangered species rule as 
almost a mockery of democracy, when he had nine, I had seven 
comments were reviewed per minute. I think that the Bolton memo 
established a speedy process that greatly undermined the 
ability of the agencies to do their work in the right kind of 
manner.
    While it may have not violated law in certain cases, it 
certainly violated the spirit of doing rulemaking in a prudent 
and effective manner.
    So what are we concerned about in the public interest 
world? There are really three categories of these midnight 
rules that we are concerned with--those that are still rules in 
the pipeline. That is the kind that the past Administration put 
a handcuff on one wrist of the incoming Administration.
    The second are rules that got published as final rules, but 
are not yet effective. That is putting the handcuff on the 
other wrist, too.
    Then the third category are final rules that were published 
and are effective, and that is being hogtied.
    Those are the ones--probably a bad choice of words.
    Let me just conclude by saying that the Obama 
administration fixed the first two with the Rahm Emanuel memo 
and the OMB Director Orszag memo, did not address that final 
category and that is what we need to be doing.
    [The prepared statement of Dr. Bass follows:]

                   Prepared Statement of Gary D. Bass







































                               __________
    Mr. Cohen. Thank you, Dr. Bass. Your time is up, and I 
appreciate you not using any of the language that was in the 
Rahm Emanuel memo.
    Ms. Rhinehart, will you begin your testimony?

                 TESTIMONY OF LYNN RHINEHART, 
               ASSOCIATE GENERAL COUNSEL, AFL-CIO

    Ms. Rhinehart. Thank you, Mr. Chairman and Members of the 
Subcommittee. Thank you for the opportunity to testify here 
today and for holding this important hearing.
    Representative Franks, I am sorry about the loss in the 
Super Bowl, but coming from Michigan, with the 0-16 Lions, we 
respect the fact that your team was able to get as far as it 
did.
    To fully appreciate the impact of the Bush administration's 
last-minute rules as they affect working people, it is 
important to contrast what the Administration did do in its 
final months in office with what it didn't do during the 8 
years that the Bush administration was in charge.
    The Bush administration was one that, with rare exception, 
refused to issue significant rules to protect worker health and 
safety, refused to issue rules to improve workers' wage and 
hour protections, except in unusual circumstances.
    The only major wage and hour rulemaking that the 
Administration conducted was to weaken overtime protections for 
workers.
    And then suddenly, this same Administration, ratcheted up 
its rulemaking activity in its final months and rushed out a 
number of rules that are harmful to workers.
    I have described a number of these rules in my written 
testimony, rules on conflicts of interest in providing 
investment advice to workers receiving 401(k)s; rules making it 
harder for workers to take Family and Medical Leave Act leave; 
rules that increase the number of hours truckers can be 
required to drive to the detriment of their health and the 
public's health and safety.
    But in the time that we have available this morning, I 
would like to highlight the Department of Labor's last-minute 
rules on the H2A and H2B visa programs, because I think they 
are illustrative of midnight rulemaking at its worst, 
significant rules that are rushed through the process in a 
deliberate effort to cement an outgoing Administration's policy 
views and hoist them on the incoming Administration, to the 
detriment of workers.
    The H2A and H2B visa programs provide visas to allow 
employers to hire foreign workers on a temporary basis in 
agriculture and seasonal industries, in situations where there 
are not enough workers available for the jobs.
    For years, the system had safeguards in place to protect 
U.S. and foreign workers and to prevent abuse.
    For example, there was a government pre-hire certification 
process through which the Federal Government and state agencies 
verified employers' claims that there were not enough domestic 
workers to do the jobs in question.
    The H2A question had wage standards, other labor 
protections, like the 50 percent rule, that created incentives 
for employers to hire U.S. workers rather than going and hiring 
foreign workers.
    The H2B program was limited to temporary jobs of no more 
than 10 months duration. Under the new rules, ``temporary'' has 
now been redefined as up to 3 years, which is hardly a 
temporary job.
    These protections were eliminated by the Bush 
administration in its new H2A and H2B rules, rules that were 
rushed through the process, issued in December, well after the 
supposed November 1 deadline in the Bolton memo, and allowed to 
take effect in the minimum 30 days allowed by the 
Administrative Procedure Act rather than the usual 60 or more 
days that is typical for significant rules of this nature.
    We are very concerned that these new rules are going to 
disadvantage U.S. workers, drive down wages, and weaken 
protections for both U.S. and H2B and H2A foreign workers.
    They are a prime example of midnight regulations that need 
to be stopped through a congressional rider or through 
disapproval under the Congressional Review Act.
    So what can be done about rules like this?
    As I had mentioned, Congress has tools available through 
legislative riders and through the Congressional Review Act. 
The administrative agencies also have tools available to them 
to undo what they view as problematic rules.
    As other witnesses have commented, of course, the problem 
is that doing new rulemaking takes time. And with respect to 
the H2A/H2B rules and many of these other midnight rules, the 
rules are already in effect.
    And so the clock is ticking and the harmful consequences of 
the new rules are taking hold during the time period that the 
new Administration is doing a new rulemaking to try to undo 
these harmful effects of the rule.
    So there is some urgency to taking action to address what 
are viewed as the most egregious, problematic midnight rules.
    There is also a resource impact on agencies. Every dollar 
spent by agencies undoing a bad rule is a dollar that they 
don't have available to spend on issuing new, good, protective 
rules.
    So we would urge Congress to take this into consideration 
and to make sure that the regulatory agencies have the money in 
hand to both deal with problems left by the prior 
Administration, as well as to get on with the business of 
protecting workers and the public health and environment in 
this new Administration.
    I would like to just make one last comment, which is I 
think you are hearing some agreement here today that not all 
midnight rules are the same. There are midnight rules where we 
might disagree with the policy outcome or the policy decision 
of the former Administration, and there are examples where we 
do, but the rules didn't shortcut the process.
    There were lengthy public comment periods. There was 
lengthy deliberation of the rules. Nobody was really surprised 
that the rules came out. They might have been disappointed, but 
they weren't surprised.
    I would say that the Family and Medical Leave Act rules are 
an example of that. We knew those rules were coming. We don't 
like aspects of them. We don't object to other aspects of them. 
And we hope that the new Administration, working with Congress, 
will address the problems in those rules. But they weren't 
really midnight in the same sense of the H2A/H2B rules, the 
rules on investment advice that I mentioned, that were started 
and finished and made effective in the very few last months of 
the Bush administration.
    That is the category of midnight rules that are of 
particular concern to us and I would think would be of 
particular concern to the Congress.
    Thank you.
    [The prepared statement of Ms. Rhinehart follows:]

                  Prepared Statement of Lynn Rhinehart

    Mr. Chairman and Members of the Subcommittee:
    My name is Lynn Rhinehart, and I am an Associate General Counsel 
for the AFL-CIO, a federation of 55 national unions representing more 
than 10 million working men and women across the United States. Thank 
you for the opportunity to testify today about the negative impact some 
of the Bush Administration's last-minute regulations will have on 
workers, and about the tools available to the Obama Administration and 
Congress for preventing these harms.
    It is not uncommon for outgoing administrations to produce more 
regulations at the end of their tenure.\1\ These rules are sometimes 
the product of lengthy and thoughtful rulemaking proceedings involving 
full public participation, and in that sense, it is hard to label these 
rules ``midnight.'' But the Bush Administration issued a remarkable 
number of final regulations in its final months that were truly 
``midnight'' rules in the worst sense of the term--last-minute 
regulations on important, substantive issues that were rushed through 
the process, short-circuiting public participation along the way, in 
order to cement the outgoing administration's policy views and impose 
them (at least temporarily) on the incoming administration. The Bush 
Administration issued, or tried to issue, a disturbing number of 
midnight regulations that would undermine worker protections. The Bush 
Administration also took steps to make sure that many of its last-
minute rules would take effect before President Obama took office, 
making it more difficult for the incoming Obama Administration to 
modify or undo these rules.
---------------------------------------------------------------------------
    \1\ T3See ``Cleaning Up and Launching Ahead,'' Center for American 
Progress (January 2009) (finding that regulatory output increased in 
the final years of the Reagan, George H.W. Bush, and Clinton 
administrations); ``After Midnight: The Bush Legacy of Deregulation and 
What Obama Can Do,'' Center for American Progress and OMB Watch 
(January 2009) (finding that the George W. Bush administration's 
regulatory output in 2008 far exceeded prior years).
---------------------------------------------------------------------------
    On May 9, 2008, White House Chief of Staff Joshua Bolten issued a 
memorandum to executive agencies that instructed agencies to avoid 
engaging in midnight rulemaking.\2\ The memo directed agencies to 
finish rules by no later than November 1, 2008 (except in extraordinary 
circumstances), and to propose rules no later than June 1, 2008 (except 
in extraordinary circumstances) if the agency wanted to finish the 
rulemaking during the Bush Administration.
---------------------------------------------------------------------------
    \2\ See Memorandum to Heads of Executive Departments and Agencies 
from Joshua Bolten (May 9, 2008) (``We need to . . . resist the 
historical tendency of administrations to increase regulatory activity 
in their final months.'')
---------------------------------------------------------------------------
    But in the waning months of the Bush Administration, it became 
clear that the Bolten memo was mere windowdressing. Agencies violated 
the Bolten memo with impunity and with no apparent consequences.
    In the final months of the Bush Administration, the Department of 
Labor pumped out numerous proposals and final rules, including many 
rules that undermined worker protections. It is important to understand 
that this activity was carried out by the same Department of Labor that 
for eight years had set a low water mark for failing to pursue 
rulemakings of significance to improve worker protections, except when 
required to act by Congress or as the result of litigation.
    Take, for example, the crucially-important area of worker safety 
and health. After President Bush took office, the Occupational Safety 
and Health Administration (OSHA) removed dozens of important workplace 
safety and health rules from its regulatory agenda and failed to issue 
any significant OSHA regulations except as a result of litigation. Yet 
in the waning months of the Bush Administration, political operatives 
at the Department of Labor tried to rush through a rule on risk 
assessment that would slow down an already-glacial OSHA standard 
setting process and impose new barriers to setting strong rules to 
protect workers from toxic substances on the job.\3\ The proposed rule 
was developed by political appointees at the Department of Labor, not 
career staff. It was never listed on the Department's semi-annual 
regulatory agenda, as required by Executive Order 12866, and literally 
came out of nowhere. In their haste to rush the rule through, DOL 
allowed interested parties only 30 days to comment on the proposed rule 
and denied requests from the AFL-CIO, other labor organizations, 
members of Congress, and public health groups, for an extension of time 
to submit comments and for a hearing on the proposed rule. The risk 
assessment rule also violated the Bolten memo, in that it was proposed 
on August 29, 2008--well after the supposed June 1 deadline for rules 
to be completed during the Bush Administration. Fortunately, the Bush 
Administration and the political appointees at the Department of Labor 
failed in their effort to rush out the secret rule on risk assessment, 
but the rulemaking is a telling illustration of midnight rulemaking at 
its worst. Hopefully the proposal will be quickly withdrawn by the 
Obama Administration.
---------------------------------------------------------------------------
    \3\ See 73 Fed. Reg. 50909 (Aug. 29, 2008); see also Testimony of 
Peg Seminario, Director of Safety Health, AFL-CIO, before the U.S. 
House of Representatives' Committee on Education and Labor, 
Subcommittee on Workforce Protections (Sept. 17, 2008), available at 
http://edlabor.house.gov/testimony/2008-09-17-PegSeminario.pdf.
---------------------------------------------------------------------------
    Another ``near miss'' involved proposed rules that made changes in 
the Department of Labor's regulations governing the Fair Labor 
Standards Act, which guarantees workers the minimum wage and overtime 
protections. Here again, these rules were proposed by a Department that 
for eight years issued no regulations to strengthen wage and hour 
protections for workers. The Bush Administration's only significant 
wage and hour rulemaking was to change the rules on overtime 
eligibility. Experts estimated that the rules could deprive more than 
six million workers of much-needed overtime pay.\4\ Against this 
backdrop, the Bush Administration's last-minute effort to weaken its 
FLSA rules is that much more objectionable. DOL described the proposed 
rules as merely updating its rules, but in reality, many of the 
proposed new rules would result in less pay for workers. For example, 
the proposed rules would make it easier for employers to take a credit 
against their minimum wage obligations for employee tips and employer-
provided meals. The rules would make other changes that would enlarge 
the overtime exemption for some employees and limit public sector 
workers' ability to take compensatory time. Fortunately, here again, 
the political operatives at the Department of Labor were unable to rush 
out a final rule, and hopefully the proposal will be withdrawn by the 
Obama Administration.
---------------------------------------------------------------------------
    \4\ See Ross Eisenbrey, Economic Policy Institute, ``Longer Hours, 
Less Pay'' (2004) (estimating that DOL's changes to the white collar 
rules could eliminate overtime pay for more than six million workers).
---------------------------------------------------------------------------
    The Bush Administration did manage to finalize a number of rules 
that will have harmful consequences for workers. Several examples 
follow. These rules are listed in a chart attached to this testimony, 
along with additional rules issued in the final months of the Bush 
Administration that need to be strengthened (e.g., MSHA rules on Belt 
Air and Refuge Alternatives, and OSHA's rule on vertical tandem lifts).

         H2A Rules: Undermining labor standards for temporary 
                     immigrant agricultural workers

    On December 18, 2008--well after the November 1 deadline set forth 
in the Bolten memo--the Department of Labor published final regulations 
that drastically lower wages, labor protections, and housing standards 
for farmworkers, severely limit the ability of U.S. workers to obtain 
employment with H2A employers, and limit the oversight and enforcement 
of the few protections that remain. The new rules replace a pre-hire 
certification process, under which DOL verified an employer's claims 
about labor shortages and wage standards, with a self-attestation 
system where employers merely attest that they have abided by the 
rules. The rules eliminate the current requirement that H-2A employers 
provide free housing that meets certain standards, replacing it with a 
voucher option. And the new rules eliminate the role of state workforce 
agencies in reviewing employers' applications.
    The new H2A rules also abolish the ``50 percent'' rule, which 
required employers to hire qualified U.S. workers who apply for work 
until half of the season has elapsed. The 50 percent rule is an 
important method for granting U.S. workers a job preference over 
imported temporary workers, and creates an incentive for pre-season 
recruitment of U.S. workers.
    In order to ensure that the new rules would take effect before 
President Obama took office, the Bush Administration allowed the rules 
to take effect in 30 days (the minimum amount of time allowed by the 
Administrative Procedure Act), and not the usual 60 days for 
significant rules of this nature. If these new rules are allowed to 
stand--which we hope they are not--agricultural employers can be 
expected to take advantage of the new ``attestation'' system to recruit 
a flood of temporary agricultural workers under potentially 
exploitative conditions, thereby driving down standards for workers in 
the agricultural industry.

        H2B: Undermining labor standards for temporary seasonal 
                           immigrant workers

    The Bush Administration also rushed to get new rules in place that 
undermine labor standards for temporary seasonal workers under the H2B 
visa program. As with the H2A rules, the final rules were issued in 
violation of the Bolten memo on December 19, 2008. And, as with the H2A 
rules, the Bush Administration allowed only 30 days--until January 18, 
2009--for the new rules to take effect.
    Like the H2A rules, the new H2B rules eliminate the pre-hire 
certification process at DOL, instead allowing employers to self-attest 
that they need the temporary workers and that there are not enough able 
and qualified U.S. workers available to do the work. The role of state 
workforce agencies in reviewing employer claims with respect to their 
need for temporary workers and the unavailability of U.S. workers is 
eliminated.
    The rules also gut the requirement that H-2B workers be hired only 
into temporary, full-time jobs, thereby opening up many more U.S. 
workers to unfair competition for work. Under the prior regulations, 
DOL considered jobs that lasted up to ten months out of the year as 
``temporary.'' The new regulations allow employers to bring in H2B 
workers for a ``temporary'' one-time need of up to three years.
    Under the new rules, employers experiencing a long-term need for a 
larger workforce could completely avoid the demands of the domestic 
labor market by serially employing H2B workers, on temporary visas, to 
meet this long-term need. This would drag down wages and working 
conditions for workers in the industry or region as a whole.
    The combination of self-attestation, the elimination of the state 
workforce agencies, and the broadened definition of ``temporary'' will 
further depress wages in the industries in which the H2B program 
operates, to the detriment of U.S. workers. And, because there is an 
endless supply of citizens of foreign countries willing to work in the 
United States, and these jobs are generally classified as unskilled, 
employers'' access to that foreign labor supply means that employers 
have little or no economic incentive to meet the economic demands of 
U.S. workers seeking a better wage. The new H2B rules need to be 
rescinded.

     Erecting Obstacles to Workers Taking Family and Medical Leave

    On November 17, 2008--after the deadline set forth in the Bolten 
memo, but just in time for the regulations to take effect before the 
end of the Bush Administration--the Department of Labor issued final 
regulations under the Family and Medical Leave Act. The new rules make 
it more difficult for employees to take family and medical leave by 
erecting new hurdles and procedural roadblocks, and the rules open the 
door to inappropriate disclosure of information to employers by 
allowing them to have direct conversations with a worker's private 
physician about the employee's need for leave. The changes were opposed 
by women's rights organizations, labor organizations, and others, but 
favored by the business community. The new FMLA rules also contain 
provisions implementing the FMLA amendments to the National Defense 
Authorization Act for FY 2008, Pub. L. 110-181, which provide for leave 
for military families to care for service members. Advocates generally 
supported the military leave provisions.

                 Undermining Trucker and Highway Safety

    On November 19, 2008, the Department of Transportation issued final 
rules increasing the allowable driving hours for truck drivers from 10 
consecutive hours to 11, and shortening mandatory rest times between 
drives. Consumer groups and labor organizations oppose these rules 
because of their adverse impact on driver health and safety, and on 
highway safety. The rules issued by DOT on November 19, 2008 are 
virtually identical to provisions that have twice been rejected by the 
U.S. Court of Appeals for the D.C. Circuit. The final rules took effect 
on January 19, 2009--the day before President Obama took office. A 
petition for reconsideration of the rules, submitted by worker and 
consumer advocates, was denied by DOT before the Bush Administration 
left office.

Weakening Safeguards Against Conflicts of Interest in Investment Advice

    On August 22, 2008--again in violation of the Bolten memo--the 
Department of Labor's Employee Benefits Security Administration (EBSA) 
issued proposed rules that allow for money managers to give conflicted 
investment advice to workers participating in individual retirement 
account plans such as 401(k)s, even if the money manager stands to 
profit from the advice. Labor organizations, senior citizen 
organizations, members of Congress and others strongly objected to the 
Department's proposal out of concern that it opened the door to 
conflicts of interest by investment advisers. Notwithstanding these 
objections, EBSA proceeded to finalize the rule, which was sent to the 
Office of the Federal Register on the last business day of the Bush 
Administration and published on January 21, 2009--again in clear 
violation of the Bolten memo.

         Imposing New Reporting Burdens on Labor Organizations

    In stark contrast to the Bush Administration's reticence to issue 
rules improving workers' health, safety, wage and hour, or pension 
protections, the Department of Labor issued a myriad of rules requiring 
increased financial recordkeeping and reporting by labor organizations 
and union officers. During its tenure, the Bush Administration issued 
four major new rules imposing heavy reporting obligations on labor 
organizations and their officers \5\ and at the same time increased 
resources for investigation and regulation of labor organizations.\6\
---------------------------------------------------------------------------
    \5\ In addition to the massive expansion of the Form LM-2 described 
in the text above, in 2007 DOL promulgated a major expansion to the LM-
30 report, which union officers and employees must file, that 
dramatically expanded the number of individuals that must file the 
reports to include union volunteers, and that dramatically expanded the 
types of transactions that individuals must report. 72 Fed. Reg. 36106 
(July 2, 2007). Also, in 2006, the Department published requirements 
for a new T-1 report for unions to file concerning ``significant trusts 
in which they are interested.'' 71 Fed. Reg. 57716 (Sept. 29, 2006). As 
with the prior version of this requirement, the new T-1 rule was struck 
down by the court. Undeterred, the Department promulgated another new 
T-1 rule in 2008, 73 Fed. Reg. 57412 (Oct. 1, 2008).
    \6\ According to an unpublished study by Professor John Lund, the 
Office of Labor Management Standards (OLMS) spends approximately $2,700 
per labor organization under its jurisdiction, while OSHA and the Wage 
and Hour Division spend $26 each per covered workplace.
---------------------------------------------------------------------------
    In 2003, the Bush Administration pushed through a major expansion 
of the annual financial reports that the largest labor organizations 
are required to file--called the Form LM-2. The new rules require 
unions to track and report their financial transactions in minute 
detail. This produces an avalanche of meaningless data at an enormous 
cost both to the labor organizations that must file the reports and to 
the union members whose dues pay for the new recordkeeping and 
accounting systems. The AFL-CIO's report, for example, went from 
approximately 200 pages under the old form to approximately 800 pages 
under the Bush Administration's new rule.
    Without studying whether the new forms actually provided workers 
with useful information, in May 2008, the Labor Department embarked on 
another round of LM-2 reforms, seeking even more detailed information 
from labor organizations. The new rules also proposed procedures for 
revoking the right of smaller unions to file a simplified financial 
report, if their report is delinquent or deficient. These small unions 
would then need to file the far-more complicated Form LM-2, which they 
are not set up to handle. Unions filed comments objecting to the 
proposed rule, but DOL proceeded to finalize the new rule, sending it 
to the Federal Register on the Friday before President Obama's 
inauguration so that it would be published on January 21, 2009--the 
first full day of President Obama's term. The new rules take effect on 
February 20, 2009. If allowed to stand--which we hope they are not--the 
new rules will further increase the recordkeeping and reporting burden 
on labor organizations with no apparent benefit to workers.\7\
---------------------------------------------------------------------------
    \7\ On February 2, 2009, the Office of the Federal Register posted 
a notice, to be published in the Federal Register on February 3, 2009, 
by the Department of Labor requesting comments on a proposed 60-day 
extension of the effective date of the new LM2/3 rules and seeking 
comments on the rule generally, including the merits of retaining or 
rescinding the rule.
---------------------------------------------------------------------------

         Removing Information from Contractors' Payroll Records

    The Bush Administration also rushed through a rule that allows 
contractors covered under the Davis-Bacon Act and the Copeland Anti-
Kickback Act to omit social security numbers and home addresses of 
workers on the weekly payroll reports these contractors are required to 
maintain and provide to the government. The deletion of this 
information from the payroll reports will make it harder for the 
government to verify the accuracy of the reports. The rule was proposed 
on October 20, 2008--long after the June 1, 2008 deadline in the Bolten 
memo--and after a short 30-day comment period, final rules were issued 
on December 19, 2008, to take effect on January 18, 2009.

    Options for Addressing the Bush Administration's Midnight Rules

    It is unfortunate, given the current economic crisis and the many 
pressing issues facing our country, the new Administration, and 
Congress, that time and resources will have to be spent dealing with 
the Bush Administration's harmful midnight regulations--resources that 
should rightly be going toward the development of protective 
regulations. Fortunately both the Obama Administration and Congress 
have several options for dealing with rules that they find 
objectionable.
    In considering these options, it is important to look at each 
midnight rule to determine the best course of action for that 
particular rule. No one solution fits every situation. In some cases, 
the best solution is to revoke a midnight rule entirely. In other 
cases, the better course might be to retain the midnight rule but 
engage in rulemaking to improve upon its deficiencies. In addition, it 
is important that Congress and the Obama Administration communicate 
with each other and coordinate their efforts, in order to facilitate 
the Obama Administration's efficient and prompt response to particular 
midnight rules of concern.
    Proposed rules that were not completed by the Bush Administration, 
such as the proposals to weaken Fair Labor Standards Act protections or 
the secret rule on risk assessment, are the easiest to address. The 
Obama Administration's new Department of Labor can issue a notice in 
the Federal Register withdrawing the proposed rule in question.
    For rules that were issued in final form but have not yet taken 
effect, the Obama Administration, via a memorandum to agencies from 
Chief of Staff Rahm Emanuel and a followup memo from OMB Director Peter 
Orszag, has instructed agencies to consider extending the effective 
date of particular last-minute rules and taking public comments on 
whether to modify or repeal the rule. Agencies will need to justify 
their decisions to extend effective dates and to modify or repeal 
particular rules, but it is clear that they have legal authority to 
undertake such regulatory proceedings.
    Last-minute rules that have already taken effect are obviously the 
most problematic category of rules. The Obama Administration will need 
to quickly review these rules and undertake a new rulemaking to modify 
or repeal rules that it finds problematic. These rulemakings can be 
time-consuming and burdensome, and divert resources from other 
important agency priorities, such as proposing new rules to improve 
worker protections.
    Congress can assist the Obama Administration in dealing with these 
problematic midnight rules in a number of ways:

          Congress can adopt a rider on the relevant 
        appropriations bill blocking implementation of new rules that 
        it finds objectionable, which would give the Obama 
        Administration breathing space to reconsider, modify, or revoke 
        the rules in question;

          Congress can facilitate review of problematic rules 
        by passing legislation authorizing the executive branch 
        agencies to suspend immediately the effective dates of midnight 
        rules (e.g., rules that violated the Bolten memo) that the 
        Congress and/or the agencies find problematic;

          Congress can disapprove any of the Bush 
        Administration's last-minute rules under the Congressional 
        Review Act.

    In addition, Congress should appropriate sufficient funds to the 
executive branch agencies to enable them to both review and deal with 
the Bush Administration's midnight rules and engage in new, protective 
rulemaking. Rulemaking can be a resource-intensive, time-consuming 
endeavor, and it is important that these agencies have the resources 
they need both to deal with the problems left by the Bush 
Administration and to move forward with protective regulations.
    Again, thank you for the opportunity to testify today. I would be 
happy to respond to any questions.

                               ATTACHMENT










                               __________
    Mr. Cohen. Thank you, Ms. Rhinehart.
    And now we would proceed with the testimony of Dr. de Rugy. 
Correct?

TESTIMONY OF VERONIQUE DE RUGY, Ph.D., SENIOR RESEARCH FELLOW, 
           MERCATUS CENTER AT GEORGE MASON UNIVERSITY

    Ms. de Rugy. Absolutely, very impressed. But over the 
years, I have learned to respond to whatever name I hear.
    Chairman Cohen, Ranking Member Franks and distinguished 
Members of the Subcommittee, it is an honor to appear before 
you today to discuss the problems of and solution to the 
midnight regulation phenomenon.
    I am a senior research fellow with the Mercatus Center, a 
nonpartisan university-based research, education and outreach 
organization affiliated with George Mason University. My 
colleagues and I have worked on this issue extensively, and I 
am concerned about the effects this phenomenon has on good 
governance.
    In his inaugural address, President Obama committed to 
accountable and pragmatic government. Unfortunately, at the end 
of every presidency, agencies trample on this value, as the 
issue of last-minute regulation.
    If Congress does not reform things and the process today, 
the end of the Obama administration will likely be no different 
in this regard than those that have preceded it.
    After all, in spite of efforts within the Bush 
administration to prevent an outburst of last-minute rules, 
little has changed since the frantic last days of the Clinton 
presidency.
    The Mercatus Center's work over the years demonstrates that 
the midnight regulation phenomenon is systemic and crosses 
party lines. At the end of every Administration, Republican or 
Democrat, there is a dramatic spike in regulation.
    This spike is especially pronounced when the transition is 
to a President of the opposite party.
    The most common explanation in the literature for this 
phenomenon is the attempt by the Administration to extend its 
influence into the future.
    Knowing its successor will not share its policies or 
priorities, there is an incentive to write in stone as many of 
its policies as possible.
    There are two other reasons why midnight regulations are 
pernicious.
    First, after election day, a lame-duck President faces 
little accountability. He will never again stand for election 
and won't really have to deal with Congress in the future. This 
lack of accountability frees the President and his 
Administration to enact regulations that previously had been 
politically impossible.
    Second and more importantly, the midnight regulation 
phenomenon dilutes oversight by the Office of Information and 
Regulatory Affairs. OIRA's regulatory office exists to ensure 
that agencies have carefully considered alternative approaches 
to regulation, that they have correctly estimated the costs and 
benefits of these alternatives in order to find the most 
efficient course of action.
    By its nature, this type of reasoned economic oversight of 
proposed regulations requires time. Unfortunately, the torrent 
of regulations at the end of an Administration weakens this 
oversight.
    My colleague, Jerry Brito, and I found that in the first 7 
years of the Bush administration, OIRA reviewed an average of 
seven economically significant regulations per month. Over the 
last 3 months, however, that number had doubled to 14.
    Moreover, while the number of regulations OIRA reviewed at 
the end of the presidential term, while it spiked, its staff 
and budgets remained constant. It means basically the time it 
has to review each regulation decreases.
    Another of my colleagues, Patrick McLaughlin, has actually 
put out a study that shows that that review time is slashed in 
two.
    To address this issue, we suggest a flexible cap on the 
number of regulations that an agency can submit to OIRA at any 
one time. This cap would be tied to resources available to 
OIRA, which could be increased, if necessary.
    The midnight period, however, also highlights persistent 
problems with OIRA oversight during the regular process. Since 
its creation, OIRA staff has been cut in two and the budget, in 
constant dollars, has shrunk by about a third.
    This downward trend hampers a President's ability to 
effectively manage regulation, paperwork and interagency 
coordination.
    Any increase in staffing and spending will be useless 
unless Congress addresses a more fundamental issue. The ability 
of OIRA to carry out its mission varies both across agencies 
and across Administrations.
    Depending on the degree of latitude granted to the OMB 
director and the OIRA administrator, consistent management of 
the quality of cost-benefit analysis has been doubling 
consistently.
    For example, different agencies are given a pass on the 
quality of their regulatory analysis or on any application of 
that analysis for decision-making by a particular 
Administration. OMB is essentially told to back up in these 
cases.
    Commerce and the executive branch must give OIRA both the 
resources and the ability to hold agencies accountable for 
producing effective and cost-efficient rules. Ensuring that 
these principles apply during the midnight period when 
accountability is reduced is even more important.
    Finally, Congress should dedicate itself to writing 
clearer, more detailed and more definitive statutes that 
require sound analysis of regulation. In this way, Congress 
would better exercise the policymaking authority entrusted to 
it by the Constitution.
    Thank you.
    [The prepared statement of Dr. de Rugy follows:]

                Prepared Statement of Veronique de Rugy



















































                               __________
    Mr. Cohen. Thank you, Doctor. I appreciate your finishing 
before the red light and for your testimony.
    Professor Abramowicz?

          TESTIMONY OF MICHAEL ABRAMOWICZ, PROFESSOR, 
            GEORGE WASHINGTON UNIVERSITY LAW SCHOOL

    Mr. Abramowicz. Thank you, Mr. Chairman and Members of the 
Subcommittee.
    In the first part of my remarks, I would like to focus on 
potentially negative and unforeseen consequences to legislative 
deprecation of midnight rules. I will then turn to a brief 
analysis of some of the problems that may arise from H.R. 34, 
the current proposal to allow an incoming Administration to 
disapprove of midnight rules, being passed.
    Finally, I will turn to a broader discussion of the 
administrative process and how it might be strengthened to 
reduce idiosyncratic and unadvised executive branch decision-
making, without turning a President into a 15/16ths President, 
prohibited from exercising the full power of the executive 
branch during the so-called lame duck period.
    Proposals to deprecate midnight rules could make an 
outgoing presidential Administration less likely to pass rules 
simply designed to slow down the incoming Administration, but 
it is doubtful that enactment of such proposals would help a 
new Administration overall.
    It takes some time for an agency to become fully staffed 
and then to assess its priorities.
    Midnight rulemaking on relatively routine matters may be 
helpful to the new Administration, allowing smaller issues to 
be resolved, thus permitting focus on future challenges.
    Once deprived of their ability to have the final say on 
whether regulations are issued, administrative officials, near 
the end of a term, may feel that they will not receive credit 
for any rulemaking initiatives that would come into effect only 
should the next Administration permit them.
    Moreover, they might worry that disapproval could be 
embarrassing. As a result, they are likely to hold off even on 
many regulations that the new Administration would not 
disapprove.
    This will lead to a buildup of many low profile regulatory 
initiatives, slowing the startup time for the new 
Administration.
    The passage of legislation deprecating midnight rules might 
not even be effective in suppressing the issuance of 
controversial regulations. It might simply push the enactment 
of such regulations 90 days earlier to just before the 
presidential election. This has hazards on its own.
    Decisions on whether to complete high profile regulatory 
initiatives that have been under review would likely depend 
increasingly on partisan political concerns.
    Of course, the vast majority of regulations would fly under 
the radar of presidential politics. This, however, merely 
emphasizes the futility of any effort to eliminate the 
incentive that Administrations have to complete rulemaking 
initiatives that they have begun.
    H.R. 34 leaves many unanswered questions. Some problems 
with specific language of H.R. 34 should be easily fixable.
    For example, the current definition of a midnight rule 
applies to ``a rule adopted by an agency within the final 90 
days a President serves in office.'' Read literally, this would 
appear to apply regardless of the reason that President leaves 
office, including if he or she dies or resigns.
    Other problems might not be fixed so easily. The bill does 
not make clear whether a President's decision to make an 
exception to the midnight rulemaking ban or a subsequent 
agency's decision whether to disapprove of a regulation is 
subject to judicial review.
    A cornerstone of our administrative process is the 
requirement of reasoned decision-making and leaving these 
decisions entirely unchecked would be inconsistent with this 
requirement. Excessively intrusive judicial review, on the 
other hand, could undermine the effectiveness of its reform.
    Midnight rulemaking can be seen as problematic not so much 
in and of itself, but it is problematic in what it signals more 
generally. Because midnight regulations occur so near the 
transition may highlight the fact that different 
Administrations are likely to pursue different objectives.
    Our administrative process can be seen, in part, as a set 
of tools that ensures that much of the regulatory state's 
functioning will operate with some consistency, regardless of 
the occupants of the Oval Office.
    Because agency regulations must go through notice and 
comment, agency officials must prioritize reforms. We do not 
end up with one version of the Code of Federal Regulations for 
Democratic administrations and another version for Republican 
administrations.
    Even if one believes that administrative agencies have too 
much leeway to move policies over to their ideological 
priorities, disallowing midnight regulations is a crude 
response. It is akin to proposals to enact a moratorium on all 
rulemaking.
    Other regulatory tools can help achieve the beneficial ends 
of regulatory continuity without artificially freezing the 
administrative process. For example, the continued use and 
improvement of cost-benefit analysis and other forms of 
regulatory review can reduce the risk that regulations will 
depend on ideology or caprice, not only during the midnight 
period, but during the entirety of a presidential 
Administration.
    Thank you again.
    [The prepared statement of Mr. Abramowicz follows:]
                Prepared Statement of Michael Abramowicz
    Thank you, Mr. Chairman and Ranking Member Franks. I appreciate 
this opportunity to testify before the Subcommittee on Commercial and 
Administrative Law on the topic ``Midnight Rulemaking: Shedding Some 
Light.'' I am pleased that the Subcommittee has chosen this important 
topic for its first hearing of the 111th Congress, and more generally 
by the interest of the Subcommittee in administrative law and 
regulatory practice.
    In the first part of my remarks, I would like to focus on 
potentially negative and unforeseen consequences to legislative 
deprecation of midnight rules. I will then turn to an analysis of some 
of the problems that may arise should H.R. 34, a current proposal to 
allow an incoming administration to disapprove of midnight rules, be 
passed. Finally, I will turn to a broader discussion of the 
administrative process and how it might be strengthened to reduce 
idiosyncratic and unadvised executive branch decisionmaking without 
aggravating the ``lame duck'' status of an outgoing President.

          1. Proposals to deprecate midnight rules in general

    Under our existing administrative system, midnight regulations 
passed by one administration become law absent congressional action 
under the same terms as regulations passed at any other time in a 
Presidential term. There are a number of ways that this might be 
changed. One could imagine a statute that simply disabled a President 
from engaging in rulemaking in the final period before a regularly 
scheduled inauguration of a new President. Alternatively, a statute 
might provide for increased judicial scrutiny of midnight rules, for 
example by requiring an increased burden of persuasion on an outgoing 
administration in the process of judicial review.
    Such proposals might have certain benefits. For example, they might 
make an outgoing Presidential administration less likely to pass rules 
simply designed to slow down the incoming administration, or to bog the 
incoming administration down in resource-consuming litigation. 
Nonetheless, there are significant drawbacks to any legislative efforts 
that would convert a President into, for administrative law purposes, a 
15/16ths President, an individual authorized to exercise the customary 
powers of the executive branch except during the last three months of 
the Presidency. Moreover, it is difficult to justify the creation of a 
15/16ths Presidency based on general concerns about the orderly process 
of the administrative state.
    Even the claim that reform would deter an outgoing administration 
from hamstringing an incoming administration is questionable. Anne 
Joseph O'Connell has shown that ``Presidents usually have started 
fewer, not more, rules through notice-and-comment rulemaking in the 
first year of their terms than in later years.'' While it is possible 
that some of this startup time is attributable to agencies' digging out 
from midnight rulemaking of the prior administration, this is likely to 
account for only a small percentage of the increase. Rather, it takes 
some time for an agency to become fully staffed and then to assess its 
priorities. Given that there is some startup time for a new 
Presidential administration to plan its most important objectives, 
midnight rulemaking on relatively routine matters may be helpful to the 
new administration, allowing smaller issues to be resolved, thus 
permitting focus on future challenges.
    It is true that even with reforms deprecating midnight rules, 
administrative agencies would still be permitted to issue regulations, 
for example with delayed effective dates, or at least to write draft 
regulations that the next administration could consider. But once 
deprived of their ability to have the final say on whether regulations 
are issued, administrative officials may feel that they will not 
receive credit for any rulemaking initiatives with delayed 
effectiveness, and moreover they might worry that disapproval could be 
embarrassing. As a result, they are likely to hold off even on many 
regulations that the new administration would not disapprove. This will 
lead to a buildup of many low-profile regulatory initiatives that must 
be shepherded through the publication process, slowing the startup time 
for the new administration.
    There is, moreover, good reason to think that the vast majority of 
regulations issued in the midnight period are relatively routine. In 
the last three months of the Clinton Administration, a record 27,000 
pages were published in the Federal Register, but in similar periods 
during the administration, 17,000 pages were published. This is 
obviously a notable increase, but many of the 17,000 pages that 
ordinarily would be published during that period presumably contained 
relatively routine rules. Even on the 10,000 additional pages of 
rulemaking, only a relatively small number of regulations (such as the 
ergonomics and arsenic regulations) were especially politically 
controversial. Much of the 10,000 pages is probably attributable simply 
to procrastination, or to a desire by agency officials to finish work 
that they have begun. If some portion of the 27,000 pages were simply 
not issued in the first place, there would have been a great deal new 
work for the incoming administration.
    One concern about midnight rulemaking is that outgoing agency 
officials may issue regulations specifically because they want to force 
the new administration to spend time undoing these regulations. But 
there are other ways that an outgoing administration could undermine a 
new administration. If new laws deprecate midnight rules, an outgoing 
administration might take an opposite approach, essentially ceasing 
work on regulations, including ones that are relatively pressing 
because, for example, of deadlines imposed by Congress or by the 
courts. These agencies might even use the legislation restricting 
midnight regulations as an excuse. Rather than simply giving a new 
administration a menu of regulations to either allow or disapprove, the 
outgoing administration might decide to let the new administration do 
the work of bringing regulations through the regulatory process. Again, 
this could create a backlog that could hamper a new administration as 
much as or even more than the issuance of midnight regulations, only a 
relatively small number of which a new administration is likely to 
invest resources in undoing. Another strategy by an outgoing 
administration would be to focus its resources on initiating 
politically controversial adjudications. Because an agency is free to 
develop policy in both adjudication and rulemaking, this can sometimes 
be an effective means of moving policy, and certainly can tie up agency 
resources in the next Administration.
    The passage of legislation deprecating midnight rules might not 
even be effective in suppressing the issuance of politically 
controversial regulations. It might simply push the enactment of such 
regulations 90 days earlier, to just before the Presidential election. 
This has hazards of its own. Decisions on whether to complete high-
profile regulatory initiatives that have been under review would likely 
depend increasingly on partisan political concerns. Meanwhile, although 
it is useful for the electorate to focus to some extent on 
administrative issues, a quadrennial period of intense October 
rulemaking might prove to be an undue distraction from the broader 
themes of presidential campaigns.
    Of course, the vast majority of regulations would fly under the 
radar of Presidential politics, without affecting campaigns one way or 
the other. This, however, merely emphasizes the futility of any efforts 
to deprecate midnight rulemaking. There is likely still to be a bump in 
administrative activity, just a few months earlier. To be sure, the 
total volume of rulemaking in an administration might be slightly 
lower, for there will only be a guarantee of 15/16ths the time to 
engage in rulemaking. But past moratoria on regulation have proven 
excessively crude. Perhaps the bump will be a little bit less, with a 
couple of controversial and high-profile initiatives abandoned every 
four years. But even if we assume this to be a benefit, it is a small 
part of the broader regulatory picture.
    Some may argue that an early deadline just before the election 
would in fact have a broader effect on rulemaking, and that there will 
not be a considerable increase in rulemaking activity just before an 
election. One argument for this is that many midnight rules may be 
enacted only because of the relative lack of accountability of the 
executive during the midnight period. We should be skeptical, however, 
that the relative difference in degrees of accountability across time 
period makes a difference on the vast majority of rulemaking issues. 
Moreover, scrutinizing different variations of the claim that midnight 
rulemaking should be deprecated because of accountability concerns 
helps reveal weaknesses with this claim.
    One variation defines accountability as electoral accountability. 
There is a vein of administrative law scholarship, particularly the 
breakthrough work of Jerry Mashaw, that concludes that the executive 
branch is the most politically accountable branch, in part because the 
electorate is relatively more aware of actions of the President than 
actions of individual members of Congress. One might accept this 
account and then argue that accountability varies across time. The 
longer the period to an election, the smaller the degree of 
accountability. Nonetheless, it is hazardous to try to change 
administrative law based on changing degrees of accountability.
    Suppose, for example, that we consider regulations finalized not in 
January 2009, but in January 2005. In both periods, George W. Bush 
would never face re-election again, there would be two years for the 
public to forget about rules enacted in that period before a House 
electoral cycle, and there would be four years before another 
Presidential election. If deprecation of regulations is to be justified 
by electoral accountability, then perhaps we should extend it to a 
period just after a President has been re-elected. To be on the safe 
side, perhaps we should disable regulation in the entire second term of 
a Presidency. Alternatively, if the argument is that the President's 
power should be weakened after a public repudiation of his or her 
policies, perhaps we should have a system that diminishes presidential 
power if the President's party fares poorly in midterm congressional 
elections. These are, of course, facetious suggestions, but they are 
enough to show that the fact that a particular President will not again 
face the electorate cannot be a sufficient basis for making regulations 
disapprovable.
    Another variation of this argument focuses on accountability to 
Congress and more broadly on the separation of powers. One might argue, 
for example, that when the administration is not near its end, the 
President will face retaliation from acting in a way that Congress 
would not approve, for example in the form of increased congressional 
oversight of administrative agencies. Game theorists might say that the 
President and Congress are engaged in a multi-period cooperation game, 
but the midnight time frame presents a ``final period'' problem. There 
is an incentive to defect from a regime of cooperation in the last 
period. And so, the President may care less about accommodating 
congressional concerns in this final period.
    This dynamic may occur to some extent, but it is difficult to 
determine whether reduced congressional accountability for a brief 
period of time is necessarily bad. For example, as Jack Beerman has 
pointed out, midnight regulations sometimes may consist of initiatives 
that otherwise would be blocked by special interests. Similarly, such 
regulations may consist of moderately politically unpopular changes 
that are nonetheless beneficial. Admittedly, sometimes regulations are 
unpopular for good reason. It is difficult in the abstract to determine 
what is the optimal degree of special interest influence on legislation 
and ideally how much the President and administrators should pursue 
what they believe is best rather than what the less informed public 
will support. But it certainly is not clear that having a few months in 
which the President has a freer hand will generally lead to worse 
decisions rather than better ones, let alone that essentially disabling 
the President for a period of time will improve decisionmaking.
    A counterargument is that our government is a system of checks and 
balances, and that the President ought to be most restrained when such 
checks and balances are relatively impotent. But pursuing the goal of 
adjusting presidential power based on the strength of checks and 
balances would seem to suggest a range of radical policy changes. For 
example, one might imagine a regulatory regime that made it harder for 
the President to act when Congress is of the same party as the 
President. The judiciary might apply a lower standard of review to 
administrative action when government is divided, on the theory that 
congressional review will be more active and may thus serve as a 
substitute for judicial review. The ``midnight'' period cannot be 
singled out as the only period in which checks and balances are 
unlikely to be effective in limiting presidential authority.

                        2. Problems with H.R. 34

    A current bill to address the alleged dangers of midnight 
rulemaking is H.R. 34. Under the bill, ``a midnight rule shall not take 
effect until 90 days after the agency head is appointed by the new 
President.'' One danger of deprecating midnight rules through 
legislative action is that the legislation may present unanticipated 
interpretive challenges. All legislation presents this danger to some 
extent, but the costs of ambiguity are particularly high here, because 
there may be uncertainty concerning the validity of large numbers of 
regulations, and private parties may face sanctions for failing to 
comply both with the old regime and with the new one.
    Some problems with the language of H.R. 34 should be easily 
fixable. For example, the current definition of a ``midnight rule'' 
applies to ``a rule adopted by an agency within the final 90 days a 
President serves in office.'' This would appear to apply regardless of 
the reason that a President leaves office, including if he or she dies 
or resigns. Another provision, governing exceptions to the statute, 
refers to a ``President serving his final term.'' This definition is 
only a little better, as it does not make unmistakable whether a 
President who has been voted out of office after one term, but could 
run for another term later, should be counted as ``serving his final 
term.'' A better definition would make clear that the legislation 
applies to every President who either has not run for re-election or 
has been voted out of office, in the 90-day period preceding the 
regularly scheduled inauguration of the next President. The statute 
also ideally would make clear that it would apply only once some 
official determination is made of who has won the Presidential 
election.
    An additional interpretive problem arises from the exceptions 
provision, what would become Sec. 555a(b)(2). The President is 
permitted to order that a midnight rule should take effect under 
several identified conditions. This raises interesting questions. Is 
this order subject to judicial review? Under what standard? If the 
President does certify a midnight rule so that it does take effect, can 
it still be disapproved by the new agency head?
    The disapproval process itself presents interpretive questions. Can 
an agency head in a multimember agency act alone to disapprove of a 
regulation, even when the various members of the agency ordinarily 
would need to vote to take agency action? What standard of judicial 
review, if any, applies to an action of disapproval? Is disapproval a 
form of administrative action that requires no justification 
whatsoever? The Administrative Procedure Act, at least in theory, 
allows challenges to be brought based on both agency action and 
inaction, so even if we count an agency's issuance of a regulation and 
then disapproval thereof collectively as inaction, it would appear that 
there might be some ground for judicial review. This is especially true 
when an agency is issuing regulations expressly required by Congress or 
the courts by a particular date. Even if a failure to issue regulations 
in the first place were effectively unenforceable, a decision to 
disapprove mandated regulations might be legally questionable.
    Finally, the retroactivity provision itself presents interesting 
issues. For example, can liability attach to a private party that has 
complied with a new regulation after its effective date but not with 
the preexisting regulation? There would appear to be strong reasons for 
providing a safe harbor to a private party that has dutifully followed 
the new regulatory regime, even if policy should subsequently revert to 
the old regulations. This is especially so where regulations have 
criminal consequences, given the constitutional proscription of ex post 
facto laws and bills of attainder. Another peculiarity of the 
retroactivity provision is that President Bush alone would be unable to 
take advantage of the exceptions provision, because the bill was not 
signed into law during his Presidential term. Does there thus remain in 
the retroactivity period any exception for regulations that may be 
necessary, for example because of an imminent threat to health or 
safety, if not so certified by the President?
    These are, of course, only some interpretive issues, and doubtless 
others will arise. At the same time, we can expect constitutional 
challenges to the creation of a 15/16ths Presidency, and considerable 
uncertainty among private parties in diverse circumstances regarding 
not merely some provision of a particular regulation, but whether an 
entire set of regulations is valid. Even if one views the 15/16ths 
Presidency as beneficial, one might think it would be better to allow 
Congress and the agencies to use ordinary procedures to undo regulatory 
initiatives that they dislike than to confront the many complications 
that would result should this statute become law. This is especially so 
for regulations passed at the end of President Bush's Administration. 
Because the political branches today are all of the same party, there 
is the least need for a crude and automatic mechanism to undo the Bush 
Administration's last rulemakings.

          3. Administrative reform with a full-term presidency

    The existence of problems in any attempt to deprecate midnight 
rulemakings does not mean that midnight rulemakings themselves are 
without their problems. Midnight rulemaking, however, can be seen as 
problematic not so much in and of itself but as problematic in what it 
signals more generally. Because midnight regulations occur so near the 
transition, they highlight the fact that different administrations are 
likely to pursue different objectives. Some may be inclined to accept 
this as democracy in action, and surely even in a hypothetical ideally 
functioning democracy, policy would change from administration to 
administration in response to the evolution of voters' views.
    But the changes in policy have historically been relatively large 
in comparison to any underlying changes in long-term popular views 
about appropriate regulatory policy. It is possible to see this not as 
a virtue of the democratic process, but as an unfortunate symptom of 
its crudeness. On this view, an ideal administrative system, while 
allowing each new administration some discretion, would also seek to 
constrain executive action so that the difference in regulatory outputs 
from one administration to another is minimized. And indeed, our 
administrative process can be seen as a tool that ensures that much of 
the regulatory state's administrative functioning will operate more or 
less the same regardless of the incumbent of the Oval Office.
    The importance of this can be seen by focusing on the few areas of 
administrative practice in which the President has the power to act 
simply by issuing Executive Orders, without public participation or 
notice-and-comment of any kind. In some of these areas, policy lurches 
from one ideological position to another as soon as the new President 
is sworn into office. One day, we have a restriction on abortion 
funding, and the next we do not, until the White House switches back to 
the other party. Yet it is remarkable how few areas of policy operate 
this way. We do not switch from a market-oriented health care system to 
a government-operated one, or between high emissions limits and low 
emissions limits the moment a new President comes into power. The 
administrative process moves slowly and consistently. Like the judicial 
doctrine of stare decisis, the existing regulatory system ensures that 
policy moves relatively slowly. The policies in place at any given time 
are some compromise among the varying ideological views of 
administrations over the previous several decades.
    Why is this? Why does an incoming administration not simply gut all 
of the regulations from its predecessors that it dislikes in favor of 
its own preferred administrative approach? Agencies cannot overturn 
statutory commands, but that is only a partial explanation, given the 
wide variety of possible approaches that statutes allow for, especially 
in our age of Chevron deference to administrative determinations. 
Rather, the answer is that changing the law is time-consuming. To issue 
regulations, an agency must go through the notice-and-comment process, 
and to pass muster under the ``hard look'' doctrine, it must provide at 
least a reasonable response to those who disagree with its approaches. 
This process ultimately will allow an agency to accomplish virtually 
anything clearly consistent with statutory requirements, but the 
process is sufficiently cumbersome that an agency faces real tradeoffs.
    Some critics have therefore decried the administrative process as 
``ossified.'' Perhaps. But if requirements of notice-and-comment 
decisionmaking and the institution of hard look review were eliminated 
altogether, then we could expect regulation to veer from one extreme to 
another with a change in presidential administrations, in the same way 
that we seen on the small handful of issues governed by Executive 
Orders. In effect, there would be two copies of the Code of Federal 
Regulations: one for when a Democrat was in power and one for when a 
Republican was in power, with each President perhaps picking some 
regulations from the other team when taking office, in the same way 
that a President might pick one or more Cabinet members from the 
opposite political party today.
    The existing system of rulemaking avoids this, encouraging 
incremental reform. The head of an administrative agency has a budget 
to allocate to different priorities. Sometimes, an administrative 
agency head might pursue a relatively radical course in comparison to 
the preexisting regime, but relatively large changes require more 
paperwork, because there are more plausible objections to them. And so, 
in a typical administration, there may be some large-scale changes and 
a number of smaller-scale changes in the regulatory framework, but the 
overall framework typically looks more or less the same at the end of 
the administration as at the beginning. The system of hard look review 
ensures that even as the President exercises the full constitutional 
power of his office, the administrative state will move only to some 
degree in the direction of his or her preferences. For more radical 
reform without the burdens associated with notice-and-comment 
decisionmaking, the President must persuade Congress to act.
    A regulatory regime creating a 15/16ths Presidency would constrain 
the administration still further, ensuring even greater levels of 
administrative continuity. It is impossible to conclude in the abstract 
whether our administrative system allows a single administration to 
effect too much change or too little. But even if the answer is that 
administrative agencies have too much leeway to move policies over to 
their ideological priorities, disallowing midnight regulations is a 
crude response. Such an approach covers nonideological regulations 
along with politically salient ones, and it artificially freezes policy 
in favor of the status quo. It is easy to see this by imagining more 
drastic versions of the midnight rule, such as a rule that would 
invalidate rulemaking in the last year or last two years of a 
Presidential administration. Only those who are so distrustful of 
government that they are willing to void regulations sight unseen 
should be in favor of such crude approaches.
    There are other regulatory tools that can help achieve the 
beneficial ends of regulatory continuity without artificially freezing 
the administrative process. For example, recent Supreme Court efforts 
to prevent agencies from skirting the notice-and-comment process are 
likely to help promote greater consistency in administrative policy 
from one administration to another, and any legislative efforts in that 
direction could help as well. Any reforms that would increase the 
weight that administrative agencies must give to scientific consensus 
similarly could improve regulatory consistency and outcomes. In short, 
there are ways to avoid the dangers of midnight rulemaking--the 
prospect of ideological and arbitrary decisionmaking--all day long.
    I will conclude by highlighting the one area of administrative 
reform that is perhaps most likely to have these salutary consequences. 
The continued use and improvement of cost-benefit analysis and other 
forms of regulatory review can help ensure that administrative outcomes 
depend on a systematic tallying of the effects of regulations, reducing 
the risk that midnight regulations and others will depend on ideology 
or caprice. Some legal scholars have attacked President Obama's nominee 
to head the Office of Information and Regulatory Affairs in part 
because of his past support for cost-benefit analysis. Yet many of 
these scholars' critiques of cost-benefit analysis could equally be 
translated into proposed improvements to the methodology. Both Congress 
and the Administration could greatly advance the goals underlying the 
midnight rulemaking reform by strengthening both the framework of cost-
benefit analysis and the institutional resources that OIRA has to 
review agencies' actions to ensure their consistency with the 
Administration's objectives and with our broader regulatory history and 
tradition.
    Thank you again.
                               __________
    Mr. Cohen. Thank you, Professor Abramowicz.
    And, Dr. Copeland, you are recognized.

TESTIMONY OF CURTIS W. COPELAND, Ph.D., SPECIALIST IN AMERICAN 
     NATIONAL GOVERNMENT, GOVERNMENT AND FINANCE DIVISION, 
                 CONGRESSIONAL RESEARCH SERVICE

    Mr. Copeland. Thank you. Mr. Chairman, Members of the 
Subcommittee, thank you for inviting me here today to discuss 
midnight rulemaking.
    As you mentioned in your opening statement, in May 2008, 
President Bush's chief of staff, Joshua Bolton, sent a 
memorandum to Federal agencies telling them to issue the 
Administration's final regulations by November 1.
    He said this deadline was being established to avoid the 
tendency of issuing midnight rules just before a President 
leaves office.
    Data from GAO and from OMB indicate that while the level of 
regulatory activity increased significantly in the final months 
of the Bush administration, most of those rules were published 
early enough so that they had taken effect by the time 
President Obama took office on January 20. This includes the 
four rules that Mr. Kennedy mentioned in his testimony, the 
respite rule that Mr. Watt mentioned, the H2A rule that Ms. 
Rhinehart mentioned.
    However, other final rules of concern had been published in 
the Federal Register, but had not taken effect, and this 
includes the investment advice rule that Ms. Rhinehart 
mentioned and some proposed rules that were never published as 
final rules.
    Both the Obama administration and Congress have a number of 
options on how to address these midnight regulations and the 
effectiveness of those options depends, in part, on how far 
those rules had progressed in the rulemaking process.
    One presidential approach has already been undertaken. As 
has been mentioned, on the afternoon that President Obama took 
office, White House Chief of Staff Rahm Emanuel issued a 
memorandum to Federal agencies telling them to, one, not send 
new rules to the Federal Register; two, to withdraw any rules 
that had been sent, but that had not been published; and, 
three, consider extending for 60 days the effective dates of 
rules that had been published, but that had not taken effect.
    This memorandum continued a long tradition of regulatory 
moratoria at the start of a presidency. However, the Emanuel 
memorandum does not address any of the controversial midnight 
regulations that have already taken effect.
    To stop or alter those rules, or even just to change their 
effective dates, the Obama administration will have to go 
through the notice and comment rulemaking process. While that 
process can be shortened by the agencies for good cause, courts 
have indicated that legitimate reasons must accompany such 
actions.
    On the other hand, for any rule that has been proposed, but 
not published as a final rule, the Obama administration can 
simply publish a notice of withdrawal in the Federal Register 
to prevent any future action on the rule.
    Congress also has several options to stop midnight rules. 
For example, the Congressional Review Act, or CRA, was enacted 
in 1996 to give Congress more control over agency rulemaking by 
establishing a set of fast-track disapproval procedures.
    However, because any President is likely to veto CRA 
resolutions disapproving one of his own agency's rules, the act 
has been used only once in the last 13 years.
    In fact, Congress may only be able to use the CRA after a 
presidential transition in which the party in control of the 
White House changes and the new President is of the same party 
as the majority in Congress--the very conditions that currently 
exist.
    Under the CRA's carryover provisions, any final rule that 
was issued by the Bush administration after May 15, 2008 can 
now be the subject of a resolution of disapproval.
    According to GAO's database, this timeframe includes about 
1,800 Bush administration rules, including about 700 
significant or substantive rules.
    Another congressional option is to include a provision in 
the appropriations act prohibiting the use of funds to make a 
proposed rule final, or to prohibit the implementation or 
enforcement of rules that have already taken effect.
    Although the CRA has been used only one time, Congress has 
included dozens of these types of restrictions in 
Appropriations Acts for at least the last 10 years. However, 
unlike CRA resolutions of disapproval, these appropriations 
restrictions do not eliminate the underlying rule, are 
typically only in effect for the time period covered by the 
appropriation, and have other potential limitations.
    A third hybrid approach is for Congress to give the Obama 
administration new authority to stop midnight rules. H.R. 34, 
as introduced by Representative Nadler, is an example of this 
approach. However, to have the desired effect, key terms like 
``rule,'' ``adopted,'' and ``agency head'' will need to be 
carefully defined.
    Also, Congress will have to consider the balance of power 
ramifications of giving the President or executive branch 
officials power that it had previously reserved only to itself.
    Mr. Chairman, that completes my testimony. I would be happy 
to answer any questions.
    [The prepared statement of Dr. Copeland follows:]

                Prepared Statement of Curtis W. Copeland

































                               __________
    Mr. Cohen. Thank you, Dr. Copeland. And I appreciate each 
of the members of the panel for their attendance and their 
remarks.
    We now will have an opportunity for questioning, and I will 
recognize myself for questioning.
    The first is for Dr. Bass. The list of 25 troublesome 
midnight regulations listed in your testimony, which do you 
believe are the most egregious and should be addressed by 
Congress and/or the new Administration?
    Mr. Bass. Of the 25, all 25. That is why we listed them. 
This is an example of the problem that we are starting to see 
more of, which is everyone wants the top one or two.
    What was so surprising about the Bush activity at the end 
of the Administration was the wealth of these rules. You heard 
Dr. Copeland talk about the numbers. It was quite a large 
number that you had mentioned that are out there.
    These 25, most all of these are now effective, minus two of 
them. It seems to me there is no one-size-fits-all solution for 
all of these.
    At this stage, we are going to have to make sure that 
Congress and the Obama administration work in a coordinated 
fashion to resolve rule-by-rule how to deal with these.
    Mr. Cohen. And when you say those 25 are troublesome, are 
you talking about procedure, as well as substance?
    Mr. Bass. A mixture of both. There were some--Mr. Kennedy 
described some rushed examples, like on the endangered species. 
I think there are others.
    For example, we may all disagree on the HHS health care 
provider conscience rule. We may have very different values 
about it. But what was striking about the process is the OMB 
review of the rule, which is usually measured in weeks or 
months, was done in hours.
    And what that meant is that agencies like the EEOC that 
normally would comment on a rule didn't get a chance to even 
comment on the rule itself. That means that it isn't a 
violation of law, it is a violation of process of good 
rulemaking.
    That is what causes the problem with many of these.
    Mr. Cohen. You mentioned that many of the Bush midnight 
regulations were favors to special interests.
    Mr. Bass. Yes.
    Mr. Cohen. Which regulations were you referring to and 
which special interests were the primary beneficiaries of Bush 
midnight rules?
    For example, Mr. William Wichterman, a former lobbyist for 
the NFL, worked in this capacity at the White House Office of 
Public Liaison on a controversial midnight regulation dealing 
with the implementation of the Internet gambling law.
    Is that one of the issues that you raised in your remarks 
that troubled you?
    Mr. Bass. We did not specifically raise that, but that 
would be an example of the kind of thing we are talking about.
    There are really three types of issues. One is the 
influence of money and politics, as you are suggesting. There 
is uncertainty when there is opacity with many of these rules 
about who is getting the best deal out of this.
    The second is industry-wide. Mr. Kennedy talked about the 
mountaintop mining as a result that services a particular 
industry. That is another type of concern.
    And then I think the third kind of issue that is at play 
here is simply the notion of a broader antiregulatory/
deregulatory agenda. And there is some irony that the Bush 
administration--we all know the Bush administration was never 
friendly to regulation, and yet they chose to use the 
regulatory process as the vehicle for achieving much of the 
policy and priorities, which was deregulatory in the last 
stages of its Administration.
    Mr. Cohen. Professor Abramowicz, let me ask you a question. 
You had mentioned a 15/16th President. I presume you are 
assuming two terms and breaking it into half years or is that 
just kind of a----
    Mr. Abramowicz. I was assuming, if I am not wrong, but I 
was assuming if we had a 3-month period, 3 months is a fourth 
of a year. That is where the 3-month period would be 1/16th of 
a presidential term. So I was actually assuming a 4-year term.
    Of course, I recognize that the President will continue to 
exercise the powers of the office even in that last 1/16th 
beyond the executive branch. The concern is diminishing the 
powers or potentially even essentially eliminating them within 
that sphere of influence.
    Mr. Cohen. You said that you were afraid that maybe some 
folks would be embarrassed to publish last-minute regulations 
for fear they would be overturned.
    Can you cite me an example of a politician who has been 
embarrassed by something they wanted to do?
    Mr. Abramowicz. That is a good point, Mr. Chairman. I think 
that it is still possible. On many things that fly below the 
radar, officials in these agencies, who are not necessarily 
people who are running for elective office, might be concerned 
and might hold back on progressing out of concern that they 
might look bad if the regulations were disapproved.
    Mr. Cohen. And from your testimony, you see this as a 
bipartisan problem that you have seen in----
    Mr. Abramowicz. Yes. Midnight regulations have occurred in 
Republican and Democratic administrations alike.
    Mr. Cohen. Some people wonder why the interest 
organizations are not challenging each individual rule under 
the Administrative Procedure Act.
    Are these midnight regulations difficult to challenge under 
the Administrative Procedure Act and, therefore, congressional 
action might be warranted to give a more efficient process for 
challenge?
    Mr. Abramowicz. I don't think so, Mr. Chairman. I think we 
do have an ordinary litigation process in which one can raise 
procedural and substantive objections to regulations.
    And indeed, if, in fact, a regulation has not gone through 
the customary review processes, if, in fact, there had been 
completes that had been completely ignored, as, for example, 
Mr. Kennedy suggested has happened, that should considerably 
weaken the case of the agency if it subsequently attempts to 
defend the rule in court.
    If there is litigation against the agency challenging a 
particular rule, if the agency simply hasn't dotted its Is and 
crossed its Ts by responding to comments, then under the 
general hard look doctrine that the courts apply in these 
circumstances, the rule probably would be struck down by the 
courts in any event.
    So it is true certainly that Administrations may have a 
temptation to take shortcuts at the end of an Administration, 
but in doing so, they take the risk that the regulations will 
not be durable, in any event, because they will not survive 
judicial review.
    Mr. Cohen. Thank you, Professor. My time has expired.
    Mr. Franks?
    Mr. Franks. Mr. Chairman, I will be incredibly brief, and 
perhaps I could ask Professor Abramowicz for a concise answer.
    I agree with your testimony. Can you give us what you would 
consider the key constitutional and prudential prudent limits 
on the degree to which Congress could proscribe a President 
from engaging in end-of-term rulemaking and what could be done, 
in your mind, that would be within the constitutional 
constraints?
    Mr. Abramowicz. That is an excellent question. Certainly, 
some of the suggestions that Dr. de Rugy suggested, such as 
increasing funding of OIRA, clearly, within congressional 
prerogative, potentially even within administrative executive 
prerogative at the end of administration. That would certainly 
be a prudent thing to do.
    Your question, while requesting a brief response, brings up 
broad issues of a unitary executive, a very controversial area 
of constitutional law. Those who believe in a unitary executive 
might argue that some curtailment of the midnight regulation 
power could be constitutionally problematic.
    Mr. Franks. Thank you, Mr. Chairman. And I would just say 
you done good here for your first shot at the thing.
    Mr. Cohen. Thank you, sir. I appreciate the compliment, and 
I look forward to working with you and on this issue in a 
bipartisan manner, because it is the Chair's opinion, as we 
said in the opening statement, that this affects all 
Administrations.
    It is systemic, that folks want to get done what they can 
get done and sometimes Parkinson's law is in effect and the 
time and work and all those things come together.
    I would like to thank all our witnesses for their testimony 
today.
    Without objection, Members will have 5 legislative days to 
submit any additional written questions, which we will forward 
to the witnesses and ask that you answer promptly as you can, 
and they will 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 
material.
    Again, I thank everyone for their time and patience, 
particularly our Ranking Member.
    This hearing of the Subcommittee on Commercial and 
Administrative Law is adjourned.
    [Whereupon, at 12:49 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

   Prepared Statement of David M. Mason, Visiting Senior Fellow, The 
    Heritage Foundation, submitted by the Honorable Trent Franks, a 
   Representative in Congress from the State of Arizona, and Ranking 
       Member, Subcommittee on Commercial and Administrative Law











                                

Article from Consumer Freedom, submitted by the Honorable Steve King, a 
    Representative in Congress from the State of Iowa, and Member, 
           Subcommittee on Commercial and Administrative Law



                                

    Response to Post-Hearing Questions from Robert F. Kennedy, Jr., 
                     Chairman, Waterkeeper Alliance









                                

     Response to Post-Hearing Questions from Gary D. Bass, Ph.D., 
                      xecutive Director, OMB Watch













                                

        Response to Post-Hearing Questions from Lynn Rhinehart, 
                   Associate General Counsel, AFL-CIO









                                

   Response to Post-Hearing Questions from Veronique de Rugy, Ph.D., 
   Senior Research Fellow, Mercatus Center at George Mason University





















                                

      Response to Post-Hearing Questions from Michael Abramowicz, 
           Professor, George Washington University Law School









                                

  Response to Post-Hearing Questions from Curtis W. Copeland, Ph.D., 
  Specialist in American National Government, Government and Finance 
                Division, Congressional Research Service









                                 
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