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


 
                      FEDERAL RULEMAKING AND THE 
                           REGULATORY PROCESS

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 27, 2010

                               __________

                           Serial No. 111-143

                               __________

         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
STEVE COHEN, Tennessee               STEVE KING, Iowa
HENRY C. ``HANK'' JOHNSON, Jr.,      TRENT FRANKS, Arizona
  Georgia                            LOUIE GOHMERT, Texas
PEDRO PIERLUISI, Puerto Rico         JIM JORDAN, Ohio
MIKE QUIGLEY, Illinois               TED POE, Texas
JUDY CHU, California                 JASON CHAFFETZ, Utah
TED DEUTCH, Florida                  TOM ROONEY, Florida
LUIS V. GUTIERREZ, Illinois          GREGG HARPER, Mississippi
TAMMY BALDWIN, Wisconsin
CHARLES A. GONZALEZ, Texas
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SANCHEZ, California
DANIEL MAFFEI, New York
JARED POLIS, Colorado

       Perry Apelbaum, Majority 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
DANIEL MAFFEI, New York              HOWARD COBLE, North Carolina
ZOE LOFGREN, California              DARRELL E. ISSA, California
HENRY C. ``HANK'' JOHNSON, Jr.,      J. RANDY FORBES, Virginia
  Georgia                            STEVE KING, Iowa
ROBERT C. ``BOBBY'' SCOTT, Virginia
JOHN CONYERS, Jr., Michigan
JUDY CHU, California

                     Michone Johnson, Chief Counsel

                    Daniel Flores, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             JULY 27, 2010

                                                                   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..............................     2
The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Ranking Member, Committee on the Judiciary.     4

                               WITNESSES

Mr. Cass R. Sunstein, Administrator of the Office of Information 
  and Regulatory Affairs (OIRA), Executive Office of the 
  President, Office of Management and Budget
  Oral Testimony.................................................     6
  Prepared Statement.............................................     9
Ms. Sally Katzen, Senior Advisor, Podesta Group, and former 
  Administrator of the Office of Information and Regulatory 
  Affairs (OIRA)
  Oral Testimony.................................................    21
  Prepared Statement.............................................    24
Mr. Gary D. Bass, Ph.D., Executive Director, OMB Watch
  Oral Testimony.................................................    36
  Prepared Statement.............................................    39
Mr. Richard A. Williams, Ph.D., Managing Director, Regulatory 
  Studies Program and Government Accountability Project, Mercatus 
  Center at George Mason University
  Oral Testimony.................................................    58
  Prepared Statement.............................................    60
Mr. Curtis W. Copeland, Ph.D., Specialist in American National 
  Government, Government and Finance Division, Congressional 
  Research Service
  Oral Testimony.................................................    88
  Prepared Statement.............................................    90

                                APPENDIX
               Material Submitted for the Hearing Record

Response to Post-Hearing Questions from Cass R. Sunstein, 
  Administrator of the Office of Information and Regulatory 
  Affairs (OIRA), Executive Office of the President, Office of 
  Management and Budget..........................................   109
Material submitted by the Honorable Trent Franks, a 
  Representative in Congress from the State of Arizona, and 
  Ranking Member, Subcommittee on Commercial and Administrative 
  Law............................................................   117


             FEDERAL RULEMAKING AND THE REGULATORY PROCESS

                              ----------                              


                         TUESDAY, JULY 27, 2010

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

    The Subcommittee met, pursuant to notice, at 11:12 a.m., in 
room 2237, Rayburn House Office Building, the Honorable Steve 
Cohen (Chairman of the Subcommittee) presiding.
    Present: Representatives Cohen, Franks, Smith, and Jordan.
    Staff present: (Majority) Carol Chodroff, Counsel; Adam 
Russell, Professional Staff Member; (Minority) Daniel Flores, 
Counsel; Richard Hertling, Counsel; and Jennifer Lackey, Staff 
Assistant.
    Mr. Cohen. Well, now that the distinguished Ranking Member 
of the Subcommittee--of the full Committee--and the 
distinguished Member has arrived, Mr. Smith of San Antonio, we 
will commence this hearing with the banging of the gavel.
    This hearing of the Committee on the Judiciary Subcommittee 
on Commercial and Administrative Law will now come to order. 
Without objection the Chair will be authorized to declare a 
recess of the hearing. I will now recognize myself for a brief 
statement.
    Each year Federal regulatory agencies create thousands of 
new rules that affect our lives, including regulations that 
impact the environment, the economy, and the health and safety 
of our citizens. Transparency and public participation in the 
process of issuing those rules and regulations are essential 
both to the quality of regulations and the legitimacy of 
regulatory proceedings.
    The Office of Information and Regulatory Affairs, here 
inafter known as OIRA, has played a central role in the Federal 
rulemaking process for more than 25 years. There are competing 
views about the nature of Federal rulemaking and OIRA's proper 
role.
    Some argue that Federal rulemaking is essentially 
presidential in nature and that because OIRA is part of the 
executive office of the President, it helps to ensure the rules 
of covered agencies reflect the President's policies and 
priorities. Other observers view OIRA as having a shared 
allegiance between the President and the Congress and emphasize 
that OIRA was created by Congress and has been given a number 
of statutory responsibilities through the Paperwork Reduction 
Act and other laws.
    With both statutory and executive order responsibilities, 
OIRA embodies broader tension between Congress and the 
President for control of administrative agencies. Of course, 
Congress also creates courts but Congress has no responsibility 
or right to deal with the courts. There are things called 
separation of powers. We remember those.
    I look forward to hearing from our witnesses about this 
delicate balance and the proper role of government within our 
constitutional framework of a separation of powers that we 
revere and salute on many occasions and the proper role of OIRA 
in the Federal rulemaking process.
    There have been concerns expressed in previous 
Administrations about the lack of transparency of OIRA's 
regulatory reviews. I understand this Administration has been 
working hard to promote greater transparency and I am 
interested in learning more about what OIRA is doing and plans 
to continue doing in this Administration to promote 
transparency and facilitate public participation in the 
regulatory process.
    I also look forward to hearing about the status of any 
upcoming changes to the existing executive order or the 
creation of new executive orders, or memorandum, or other 
guidance to assist the Federal regulatory process in this 
Administration. On January 30, 2009, President Obama issued a 
memorandum to the heads of executive departments and agencies 
instructing the director of OMB, in consultation with 
representatives of regulatory agencies, to ``produce within 100 
days a set of recommendations for a new executive order on 
Federal regulatory review.''
    On February 26, 2009, the director of OMB published a 
notice from the Federal register requesting comments from the 
public on how to improve the regulatory review process. The 
director noted that although executive orders are not subject 
to notice-and-comment procedures and public comments are not 
normally invited before the reissuance OMB was doing so in this 
case because there had been an unusually high level of public 
interest and because of the evident importance and fundamental 
nature of the relevant issues. Thus, we commend the 
Administration for its actions.
    In response to its request OMB, received 183 comments from 
the public, including Members of Congress, representatives of 
public interests and private sector interest groups, 
academicians, and other individuals. To date, no new executive 
order has been issued and I am interested in learning more 
about the status of a new order or other guidance that might be 
forthcoming.
    Finally, I am looking forward to a discussion of the 
implementation of the Congressional Review Act, which requires 
Federal agencies to submit all of their final rules to both 
houses of Congress and the Government Accountability Office 
before they take effect. I am especially interested in the 
opinion of our witnesses regarding the proper role of Congress 
and OIRA with respect to guidance on and implementation of the 
Constitutional Review Act.
    I thank the witnesses for appearing today and look forward 
to their testimony.
    I will now recognize my colleague, Mr. Franks, who knows 
when to make an entrance, the distinguished Ranking Member of 
the Subcommittee, for his opening remarks.
    Mr. Franks. Well, thank you, Mr. Chairman.
    And thank you, Mr. Sunstein, for being here.
    Mr. Chairman, Federal rulemaking and the regulatory process 
are, indeed, immensely important topics, and I welcome the 
opportunity to dedicate our attention to them. First, these 
topics bring front and center so many of the issues that are 
most important to Americans and their concerns about government 
and its process.
    During the New Deal the seat of Federal power began to seep 
more and more away from Americans' elected officials and to the 
unelected, unaccountable Federal bureaucracy. As the New Deal 
era began to give way to the Great Society and the regulatory 
initiatives of the 1970's Congress aggressively abetted this 
power shift and it did so through statute after statute that 
garnered public acclaim for Congress but broadly addressed, 
essentially, national concerns, but also granted the real 
decision-making power to the Federal agencies. Only when these 
agencies filled in the content of myriad statutes through the 
rulemaking process did the Federal Government's full decision 
emerge in full view.
    Now, Ronald Reagan, the conservative movement, and millions 
and millions of Americans rightly sense the disturbing nature 
of this trend, which was gradually corroding the core of our 
constitutional democracy. Through the deregulation and 
strengthen presidential oversight of the rulemaking process the 
Reagan administration began to reverse trend. It is on account 
of this effort that the White House office before us today, the 
Office of Information and Regulatory Affairs, actually exists 
in the first place.
    This office is the threshing floor on which the White House 
is supposed to separate sensible Federal regulations from those 
that serve no sufficient need, produce too little benefit for 
their costs, or otherwise excessively burden the American 
people and the American economy. And this brings me to the 
second most important reason that we return our attention to 
the regulatory process and particularly to the Office of 
Information and Regulatory Affairs today.
    Perhaps never before has this Nation so needed this office 
to zealously perform its mission. Growing consensus holds that 
it is the Obama administration's vast new regulatory activity 
and uncertainty over how much more and how much more costly 
regulation is to come that has frozen our economy's ability to 
create jobs. If businessmen cannot know what future costs will 
be they cannot rationally invest and create new jobs; the 
uncertainty is such an enemy to economy.
    And I say that, Mr. Chairman, as a former businessman 
myself.
    The Office of Information and Regulatory Affairs is not 
charged with scaling back the scope of the Administration's 
regulatory agenda, but it is charged with assuring that any new 
regulations under this Administration pass a rigorous cost-
benefit analysis--that they are cost effective, are least 
burdensome, and are clear and certain in their terms. Further, 
it is the job of the Office of Information and Regulatory 
Affairs to reign in the agencies' regulatory impulses when 
cold, hard analysis shows that it would be better to have no 
regulations than the regulations agencies actually propose.
    When Administrator Cass Sunstein took charge of the Office 
of Information and Regulatory Affairs Republicans took some 
heart. In the past Administrator Sunstein had been a prominent 
proponent of cost-benefit analysis and less intrusive Federal 
regulation. Republicans reached out to the administrator and 
offered cooperation and efforts to reform the regulatory 
process.
    But the outreach met with no reply, Mr. Chairman.
    Moreover, reports have reached us that the Office of 
Information and Regulatory Affairs is at best halfheartedly 
performing its core mission of regulatory review. It is ceding 
power to White House czars, and in short it is doing little to 
mitigate the cloud of regulation and regulatory uncertainty 
that hangs over our economy, paralyzing the power of free 
enterprise to create new jobs so desperately needed today.
    And, Mr. Chairman, finally, let me just say that I think 
sometimes that conservatives are castigated for being so 
focused on competition in the economy that we overlook the 
greater substance of the economy that makes it work well, and 
that is this thing called trust.
    If people in the economy--those with capital to risk, those 
with dreams and hopes to make a business--if they believe that 
they can trust the regulatory framework of government, if they 
believe that they can have their contracts enforced, and if 
they believe that government will not confiscate everything 
that they earn then there is some motivation for them to go 
forward in their endeavors. But if they are convinced that they 
are just shooting in the dark then they are hesitant. And I 
would just suggest that there is nothing more damaging to our 
business environment right now than uncertainty and a lack of 
trust in government.
    So with that, I look forward to questions, look forward to 
talking the Administrator Sunstein about these concerns, and 
hearing from our distinguished witnesses today.
    And thank you, Mr. Chairman. I yield back.
    Mr. Cohen. Thank you, Mr. Franks.
    I would like to ask if the other Members would like to 
introduce statements or make statements? And we always 
entertain statements from the distinguished Member from San 
Antonio, the home of the Alamo where so many Tennesseans gave 
their lives to preserve the state of Texas. [Laughter.]
    Mr. Smith. Thank you, Mr. Chairman, for promoting tourism 
in San Antonio. Appreciate that.
    Mr. Chairman, as we near the midpoint of the Obama 
administration the American economy continues to lose, not 
create, private sector jobs. There are a number of reasons for 
this chronic unemployment and the failure of the Administration 
to create jobs, beginning with the ineffective stimulus bill. 
That legislation siphoned close to $1 trillion of capital away 
from the private sector.
    The Administration promised it would keep unemployment 
below 8 percent. Unemployment instead rose to almost 10 
percent.
    The private sector has lost 2.5 million jobs since the 
stimulus bill became law. The Federal Government has gained 
over 400,000 jobs, but those jobs came at the expense of the 
private sector. After all, the private sector has to spend 
capital on taxes, not investment, if government jobs are to be 
funded. Perhaps it is no coincidence that four out of every 
five jobs the Administration claims to have created or saved 
are public sector jobs.
    Also at the head of the job-killing pack are the regulatory 
policies of this Administration. Americans ask daily, ``Where 
are the jobs?'' but the answer from Washington too often is, 
``Here are the regulations and there are plenty more coming.''
    The wave of regulations is killing private sector jobs. 
Rules adopted by the Administration so far, like the 
Environmental Protection Agency's carbon dioxide endangerment 
finding, already tell businesses that their costs will rise.
    And rules coming down the pike tell them that their costs 
will only continue to rise under this Administration. These 
rules include hundreds due under the health care and financial 
reform legislation, and may include many, many more feared 
under pending cap-and-tax legislation and other expansions of 
the Federal Government's power.
    Rules that increase cost kill jobs Americans now hold. 
Rules that will increase costs still more in the future kill 
the creation of new jobs. How can businesses make the 
investments that they will create new jobs if they cannot tell 
whether a host of new regulations will turn potential profits 
into certain losses?
    The equation is simple. When Washington reduces regulatory 
overreach and regulatory uncertainty jobs will return.
    One part of the White House that unquestionably should 
listen is the Office of Information and Regulatory Affairs. 
This White House office assures that Federal agencies do not 
regulate when they do not need to, regulate only in ways that 
are cost beneficial, adopt only the most cost effective 
regulations, do not compound existing problems with unsound 
regulation, and regulate with consistency across the executive 
branch.
    Yet, according to reports the Office of Information and 
Regulatory Affairs is missing in action. The number of rules 
that cross the office's desk is substantially on the rise, yet 
the amount time the office takes to consider them is 
considerably on the decline, and the number of rules the office 
returns to agencies for improvement is minimal to nonexistent. 
There is no excuse for this as the burden and uncertainty of 
regulation contributes to a regrettable jobless economy.
    Mr. Chairman, I will yield back.
    Mr. Cohen. I appreciate your statement, if not--and I would 
like to--could I ask you one question, sir? Did you say there 
was $1 billion in the stimulus that is getting out of the 
private sector? Is that what I----
    Mr. Smith. I said, ``close to,'' that is correct.
    Mr. Cohen. Okay. I think it was $787 billion, and I think 
35 percent of it was tax cuts----
    Mr. Smith. I think we were rounding to the nearest $1 
trillion on that. You are right. [Laughter.]
    And that is not including the interest. Thank you----
    Mr. Cohen. And just under 40 percent of it was tax cuts, so 
that went back to the private sector, which leaves--40 percent 
of $787 billion would leave about $400-and-something billion, 
which, rounded off to the nearest $1 trillion, would be zero. 
So we are working on the deficit. The stimulus bill was really 
no cost.
    Mr. Smith. More harm than good. You are right, Mr. 
Chairman.
    Mr. Cohen. Thank you, sir.
    And I now would like to recognize--all other statements can 
be entered for the record.
    We have got a system here that most of you know about that 
is a lighting system, and when I start this and it is green it 
means you have got 5 minutes; when it gets to yellow it means 
you are in your last minute; and then when it gets to red it 
means you should be finished--or in your case, Mr. Sunstein, we 
will give you a few extra seconds, but you should be rounding 
it off.
    We will have 5 minutes to ask you questions, and subject to 
the same 5-minute rule. And then when we finish we can submit 
other questions to ask you to respond to later. You will never 
be finished with answering questions; it is part of this 
Committee's----
    Our first witness is Mr. Cass R. Sunstein. Before becoming 
the administrator for OIRA Mr. Sunstein was the Felix 
Frankfurter Professor of Law at Harvard Law School.
    He clerked for Justice Thurgood Marshall of the United 
States Supreme Court, and he did not make it into the play but 
I am sure that was an omission. And he worked as an attorney 
advisor in the Office of Legal Counsel of the U.S. Department 
of Justice. He was a faculty member of the University of 
Chicago Law School from 1981 to 2008 at the period of time in 
which the Chicago White Sox were victorious.
    Mr. Sunstein has testified before congressional Committees 
on many subjects and he has been involved as an advisor in 
constitution-making and law reform activities in a number of 
nations. A specialist in administrative law, regulatory policy, 
and behavioral economics, Mr. Sunstein is the author of many 
articles and a number of books.
    Thank you, Mr. Sunstein. We will now begin your testimony.

 TESTIMONY OF CASS R. SUNSTEIN, ADMINISTRATOR OF THE OFFICE OF 
INFORMATION AND REGULATORY AFFAIRS (OIRA), EXECUTIVE OFFICE OF 
         THE PRESIDENT, OFFICE OF MANAGEMENT AND BUDGET

    Mr. Sunstein. I am most grateful to have the opportunity 
today to discuss some of our work at the Office of Information 
and Regulatory Affairs.
    As you are aware, OIRA is charged with a number of 
functions, including coordination of statistical policy, 
information policy, and regulatory review. One of OIRA's most 
important roles is to ensure compliance with the Paperwork 
Reduction Act (PRA). Reducing paperwork burdens on the American 
public and taking advantage of current technological 
possibilities--note, what just happened--have been high 
priorities for us. In the last months we have taken numerous 
steps to promote these goals associated with the Paperwork 
Reduction Act.
    In April we issued a data call to agencies calling for new 
burden reduction initiatives, and let me underline those 
words--burden reduction initiatives. We asked agencies to 
develop new steps to standardize inconsistent processes and 
requirements, to eliminate duplicative reporting requirements, 
to eliminate unnecessary complexity, to improve coordination 
among multiple offices with particular emphasis, by the way, on 
small business. We also asked agencies for initiatives that 
take advantage of electronic filing, increase simplification, 
and, simply put, reduce burdens.
    Regulatory review of significant rules, as the opening 
comments suggest, may well be the most visible of our 
functions, and let me spend the rest of my time in these brief 
remarks on that topic. As I see it, such review--review of 
regulations--has three key functions. First, it helps to ensure 
that regulations are consistent with the law, our lodestar, and 
with the principles and priorities of the President of the 
United States.
    Second, regulatory review promotes coordination among 
different parts of the executive branch. Some statutes require 
a consultation among multiple agencies during the development 
of regulations, and even in cases where statutes don't require 
such consultation, the positions of one agency are frequently 
usefully illuminated by the views of other agencies that have 
relevant experience and expertise.
    Third, in a function that picks up on some of your opening 
remarks, regulatory review helps to improve the analysis that 
lies behind rules, and thus helps to improve rules. This 
includes careful attention to both costs and benefits. OIRA 
oversees a process of interagency review that promotes 
compliance with these requirements so that agencies look before 
they leap.
    Since I was confirmed in September OIRA, has devoted 
attention to three topics--special attention to these three. 
First, promoting open government and transparency, including 
attention to the views of affected stakeholders; second, 
improving regulatory analysis so the rules have a solid 
foundation; third, improving disclosure policies and increasing 
simplification for the American people.
    We have worked very closely in the domain of open 
government with others in the executive office of the President 
and with agencies--multiple agencies--to ensure disclosure of 
data sets that have never been public before. They can be 
found--thousands of them--on data.gov. We have also worked 
together with more than two dozen agencies to produce open 
government plans. We believe that the result of this process--
this process that has no predecessors--has been a dramatic 
increase in openness and transparency both for the American 
people and for American businesses.
    For over 3 decades, through five Administrations starting, 
as noted, with President Reagan, regulatory impact analysis, 
including discussion of costs and benefits, has played an 
important role in the assessment and design of significant 
rules. As the President said on May 2, ``Sometimes regulation 
fails, and sometimes its benefits do not justify its costs.''
    In 2009, in our report to Congress, we linked the interests 
in regulatory analysis and attention to costs and benefits with 
our interest in open government. We said that openness about 
costs and benefits helps to reduce the risk of insufficiently 
justified regulation, imposing serious burdens and costs for 
inadequate reason. We believe that regulatory analysis should 
be developed and designed in a way that fits with the 
commitment to open government.
    We have taken our own advice seriously, recently creating a 
regulatory dashboard which offers a clear and novel, vivid 
picture of Federal rulemakings under OIRA review. With a very 
quick glance any American can get a picture of what is under 
formal review from a large number. Over two dozen agencies--and 
have a sense of what is coming, thus promoting the goal of 
predictability and participation. People have notice of what is 
coming and participate in its improvement.
    This new dashboard is just the beginning, but we hope that 
it is a step toward greater transparency in a way that unifies 
our interest in open government with our interests in smart, 
effective regulation.
    I look forward to answering your questions.
    [The prepared statement of Mr. Sunstein follows:]

          Prepared Statement of the Honorable Cass R. Sunstein











                               __________

    Mr. Cohen. Thank you, Mr. Sunstein, and I will start the 
questioning.
    My first question, I guess: Who was your predecessor in the 
previous Administration?
    Mr. Sunstein. Susan Dudley is my immediate predecessor, and 
before that John Graham.
    Mr. Cohen. And they both were during the Bush 
administration?
    Mr. Sunstein. That is correct.
    Mr. Cohen. What changes have you--have taken place in the 
office since the change of Administrations?
    Mr. Sunstein. If you look at our Web site you will see we 
have done several things. As noted, under the Paperwork 
Reduction Act we have issued a data call to try to have burden 
reduction initiatives, which don't look like--I hope they are 
consistent with the previous interest in burden minimization, 
but they don't look like anything that has been seen before.
    We have also taken steps to bring the Paperwork Reduction 
Act into the 21st century, both by making it clear and 
predictable--by the way, both for agencies and for businesses. 
There has never been a clear statement of what the Paperwork 
Reduction Act requires and doesn't require. That is right up 
there.
    We have also had new efforts to introduce clarity with 
respect to the relationship between the Paperwork Reduction Act 
and modern technology. So we have guidance to that effect. Of 
course, the office has operated within the broad framework set 
by the President of the United States and our approach to 
regulation is consistent with his, and in that sense you will 
see some differences.
    But you will see something that I think will be noteworthy 
to those who were concerned about overregulation, which is that 
in our first year we have actually a better record, in terms of 
net benefits, than the first year of either the Clinton 
administration or the Bush administration. They were in the red 
with respect to net benefit--a few hundred million dollars in 
the red; we are in the black. We are $3.1 billion positive in 
2009.
    Mr. Cohen. And why you say net benefits are you--what are 
you exactly referring to?
    Mr. Sunstein. We take account, as some of the opening 
remarks emphasized, of the costs--the social costs of 
regulation. So if businesses are facing new costs as a result 
of our regulations that is something we calculate, we 
publicize, we try to find ways of working with agencies to 
reduce those costs, to make sure they are smaller, and then the 
social costs are calculated as costs.
    Then there might be social benefits. Deregulation, for 
example, can remove burdens. If you save people's lives or if 
you improve people's health that produces benefits. There are 
real challenges with monetization, but we try to include 
everything that we can.
    Mr. Cohen. Who came up with those figures?
    Mr. Sunstein. In the first instance they come--the cost and 
benefit figures--from agencies themselves, and then the 
analysis, like the rules, are subject to an interagency process 
of review. So the Council of Economic Advisors in the Obama 
administration--I believe this is true in his predecessors 
too--plays a significant role in making sure that the cost-
benefit figures are accurate. The National Economic Council and 
other agencies participate.
    There is also a great deal of public participation in this 
calculation, so if it turns out that affected stakeholders or 
just interested citizens think we don't have the numbers right, 
we are listening and they will get better.
    Mr. Cohen. You mentioned that there are obvious changes 
with the previous Administration and yours, and I think what 
you were saying is in substance in how you look at the 
different policies and whatever, but how about procedure? Have 
there been any changes in--since this Administration came in 
and the procedures of OIRA?
    Mr. Sunstein. The major one is external--our dealings with 
disclosure to the public of what we are all about, and that is 
the dashboard. So we have now--anyone can see it--a snapshot of 
what is before OIRA and people can see everything at a glance.
    We have also issued, in the domain of transparency, two 
bits of guidance which you have to be a bit of a geek, I think, 
to be as excited about as I am, but I think they are kind of 
exciting. One is, there is--it requires a regulatory identifier 
number on regulations throughout the process so that people who 
are interested in a regulation that will affect them, or that 
matters to them can see it at every stage and not get lost in 
the bureaucratic process. So we are required that regulatory 
identifier number to be on all regs at every stage. That is a 
significant step forward in terms of transparency.
    We have also required everything to be up on 
regulations.gov that can feasibly be up there, so that if 
businesses are concerned or if environmentalists are concerned 
about the information on which the agency is relying they get a 
chance to see it and comment on it. So we are trying to bring, 
really, the Federal rulemaking process step-by-step into the 
21st century with these two, as I say, in my view, significant 
guidance documents, and there hasn't been anything like them 
before.
    Mr. Cohen. I think I mentioned in my opening remarks that 
the President called for a review and possible revision of 
Executive Order 12866. There were comments filed but no 
executive order has been issued to date. What is the status of 
that effort and does the Administration plan to revise or offer 
new guidance on that particular----
    Mr. Sunstein. Thank you, Mr. Chairman. You referred to the 
fact that we received 183 public comments, and we got a great 
number of helpful suggestions about what to do.
    I would put the bulk of the suggestions in the following 
categories: first, scientific integrity--the centrality of 
objectivity with respect to scientific findings should be a 
given in the regulatory process; second, transparency and 
openness--there was a widespread plea for more clarity with 
respect to the rulemaking process, and as just noted, we have 
done a few things; third, there was widespread approval--not 
universal, but widespread approval of the time-honored function 
of OIRA in assessing costs and benefits and bringing what is 
learned to bear on regulatory judgments; fourth, there was not 
universal but widespread approval of OIRA coordination of a 
process of interagency review--as noted, we get lots of 
comments by other agencies on what an agency proposes to do.
    We have taken every one of those four themes really 
seriously, so scientific integrity has been something to which 
we have been greatly committed in the last months. That is 
bedrock. We have been taking transparency much further than 
ever before with the open government directive, which actually 
was issued by the Office of Management and Budget, and OIRA has 
played a role in implementing that directive. We have taken 
cost-benefit analysis very seriously, as a number of commenters 
emphasized that we ought to.
    With respect to the executive order itself, we are 
operating under the one that President Clinton and President 
Bush operated under, and it is up to the President of the 
United States to decide whether to amend it.
    Mr. Cohen. Well, thank you. My time is expired and your 
questions have been so complete and your statements so complete 
that I suspect there will be no questions from the other side; 
therefore, I recognize Mr. Franks, the---- [Laughter.]
    Mr. Franks. Well, thank you, Mr. Chairman.
    And, Mr. Sunstein, I know that you probably were not in the 
middle of the regulatory bills that just passed the Congress, 
and so I will try to avoid that. But I do want to say that I 
think that is like a train coming and business sees it and they 
are trying to get the heck off the tracks fast. And I think 
that bodes a pretty grave situation for 2011 for a lot of 
business interests.
    It is, I know, a basic crucible of contention between the 
two parties as to the impact of regulation and the cost--having 
a reciprocal impact on the actual hiring of people, but it is 
mathematical reality that cannot be avoided without repealing 
the laws of mathematics.
    So, Mr. Sunstein, my question first to you, sir: Are you 
doing everything in your power to minimize the adversity of the 
Obama administration's agency rules on jobs and job creation?
    Mr. Sunstein. The way I would put it, Congressman, is that 
I spend every day trying to make sure that regulations are 
first, lawful; second, consistent with the commitments of the 
President; and third, justified by reference to costs and 
benefits. So we do everything we can to try to make sure that 
the benefits are strong enough to justify the costs and to try 
to reduce the costs if we can consistently with the 
requirements to which I referred.
    Mr. Franks. I guess the hard--and I ask you to grant me 
diplomatic immunity here--the hard and corresponding question 
is, how many Obama administration agency rules submitted to 
your office, OIRA--I always say that wrong, OIRA--have you 
personally rejected because they did not rest on adequate 
analysis of their impacts on jobs and job creation?
    Mr. Sunstein. Well, the way I would put it is when the 
process----
    Mr. Franks. Well, I am trying to--forgive me--I am trying 
to stay out of the metaphysical 12th dimension here. I am just 
asking you how many have you rejected personally?
    Mr. Sunstein. Personal rejections are rare, and----
    Mr. Franks. All right. Let me shift it. How many Obama 
administration rules have you or your staff recommended to be 
rejected because they didn't rest on adequate analysis of their 
impacts on jobs and job creation?
    Mr. Sunstein. Forgive me and tell me if this is a 
satisfactory answer: We have worked repeatedly with agencies to 
make sure that regulations are drawn up so that they are 
compatible with the concerns to which you----
    Mr. Franks. But have you rejected any of them, even one?
    Mr. Sunstein. Well, the word rejected doesn't really fit 
with how OIRA----
    Mr. Franks. Well, it does if you are subject to the 
regulation. I mean, the regulation is either enforced or it 
isn't, so, I mean, it has a big impact ultimately.
    Mr. Sunstein. I take the point. A regulation can take 
multiple different forms, and the point of the OIRA process 
standardly is to ensure that it takes the right form.
    Mr. Franks. All right. Let me see if I can rephrase it. How 
many of the Obama administration rules have you or your staff 
personally rejected because they in fact adversely impact jobs 
and job creation? In other words, make it really clear here. I 
mean, is there one that you found that you have rejected 
because it had an adverse impact on jobs and job creation?
    Mr. Sunstein. What I can say is that--I wouldn't want to 
get into a deliberative process, but what I can say----
    Mr. Franks. Well, that is the problem. We are not very 
deliberative in government. I mean, I don't meant to be hard on 
you here, but--and it is okay because I wouldn't want to be in 
your position. I would probably be pretty inadequate in that 
situation.
    But have you rejected even one Administration rule because 
it had an adverse effect on jobs and job creation? That is a 
yes or no.
    Mr. Sunstein. We have worked with agencies to make sure 
that rules are designed in such a way as to be compatible, 
consistent with law----
    Mr. Franks. But is that bureaucratic-speak for ``no''?
    Mr. Sunstein. I hope not. If you look at our Web site you 
will see, Congressman, that there--most rules do not go out the 
way they came in. They are approved consistent with change.
    And I wouldn't want to attribute to OIRA the change because 
often it comes from the agency itself, which will decide in the 
process that we can do it in a less burdensome way, or the 
Council of Economic Advisors, or some other sibling agency. So 
if you are asking how many rules are improved with a view 
toward economic concerns as a result of the deliberative 
process, it is not zero.
    Mr. Franks. Well, I won't put you on the spot to ask how 
many have been improved.
    But, you know, Mr. Chairman, I have just got to say--and 
again, in all deference to Mr. Sunstein--whatever the class, 
when 100 percent of them pass or get an A-plus rating you might 
want to start questioning the test. And, you know, in Europe 
they had some recent regulatory reform where they tried to 
subject the banks to sort of a stress test to see if they could 
survive, and ironically, they put this new protocol in place 
and nearly all of them were fine. And so they began to question 
the test because we know that that is not the case.
    And I guess I just--again, I put it in my words and 
encourage you to edit them if they are--if I am saying 
something that is not true. What I am hearing is that there is 
not one of the Obama administration or regulatory rules that 
have been put in place that your office thought had enough 
negative impact on jobs and job creation that it was worth 
rejecting. And that is putting a lot of faith in an 
Administration that has--forgive me--shown an arrogance to 
competency ratio that is catastrophically out of balance.
    And I would, you know, as someone that has been in business 
I have just got to tell you, when regulations and additional 
costs come to us it has an impact on who we can hire. And in 
economy sometimes we get to thinking it is all just numbers, 
but ultimately it is about people producing goods and services 
and that is translated ``jobs.''
    And I just feel like we are headed in a terrible direction 
here with jobs, and I--talking to the regulatory agency, and 
there is not one regulation that you can say that you have 
rejected because of a negative impact on jobs. And I find that 
sort of astonishing.
    Mr. Sunstein. Is it helpful to say that a number of 
regulations have been changed in a way that is attentive to 
economic concerns and burdens as a result of a process that 
OIRA oversees?
    Mr. Franks. Well, I think I am going to have to accept that 
as the best that can be offered. And again, with great respect 
for you--due respect for you--I have just got to believe that 
there would have been one, from this Administration especially, 
that would have been worth rejecting.
    And with that, Mr. Chairman, I am going to yield back.
    Mr. Cohen. Thank you, sir.
    And the next questioner was high in the middle and round on 
the ends, Mr. Jordan of Ohio?
    Mr. Jordan. From Ohio, that is right. Thank you, Mr. 
Chairman.
    Mr. Sunstein, let me pick up where the Ranking Member left 
off. In your testimony you talk about 900 significant rules 
that your agency has reviewed since taking--since the Obama 
administration took office.
    And let me just be clear on how the process--at least the 
way I understand the process works. Congress passes a law, 
President signs the bill, the agency who has got jurisdiction 
over the bill--let's take the health care bill, so HHS has 
jurisdiction, they put together a set of rules, those rules 
then come to you. What is the authority or power that you have?
    Can you say, as the Ranking Member was alluding to in his 
questions, can you say no? Can you just flat out reject them or 
do you not even have that power?
    Mr. Sunstein. There is authority to issue return letters 
subject ultimately to the President----
    Mr. Jordan. That is a yes. You can flat out say, ``This 
rule does not comply with the intent of Congress, the will of 
the President when he signed the law, and we think that rule is 
not consistent at all.'' So you can do that?
    Mr. Sunstein. That is correct.
    Mr. Jordan. Of the 900 rules that you have reviewed since 
January of 2009, taking office, how many times have you done 
just what you described you are allowed to do?
    Mr. Sunstein. Well, I haven't issued return letters, but 
if----
    Mr. Jordan. So then the answer is--just to be clear with 
where the Ranking Member was--the answer is clearly zero. Nine-
hundred rules, zero times--no time have you done a letter 
saying that rule does not comply with the intent of Congress 
and the will of the President, so zero times you have done 
that?
    Mr. Sunstein. Well, there are two different questions. One 
question is how many times have I issued a public return 
letter----
    Mr. Jordan. But just to be clear, that is what you said 
when I said, ``Do you have the power to reject?'' you said, 
``Yes, we can do this type of letter.''
    Mr. Sunstein. Yes.
    Mr. Jordan. And then the follow-up question was, ``Have you 
done that type of letter?'' and your answer was, ``No.'' So the 
obvious conclusion is zero times--no time have you said the 
rule does not--have you disallowed a rule----
    Mr. Sunstein. The last statement is not false, but if I may 
I can clarify a little bit. There are rules that come over that 
are changed significantly as a result of exactly the concerns 
to which you are pointing, and I wouldn't want to give OIRA the 
credit or the blame----
    Mr. Jordan. So then how does it work? Do you say, ``Hey, 
this does not comply with what Congress intended, this does not 
comply with the will of the President, so let's--instead of me 
doing this let's just work on''--is there an official thing you 
do or do you just kind of--is it all bureaucratic talking back 
and forth? How does it work?
    Mr. Sunstein. I think it is very much like the way--I defer 
to you about how your office works, but my good guess is it is 
very similar to how your office works, where there will be 
ideas that are floated to you and that you might say, ``No, 
forget about it,'' but if you trust your staff you are more 
likely to say, ``Well, maybe we can do it this way; maybe this 
way is better,'' and then something will emerge from that 
process of discussion which will produce something you are 
comfortable with.
    Mr. Jordan. Does the public know--you talked about this 
identifier number, you talked about transparency, and that is 
all, I mean, good; we are glad that is part of the process. 
Does the public know which route you are taking or do they 
know, like, ``Look, we don't like this. We are asking them to 
change,'' short of doing the letter of rejection that you are 
capable of doing?
    Mr. Sunstein. There are a couple of great things I can tell 
you about that are responsive to that. One is, what really 
matters within a rule--with a rule--is not how it is proposed 
but how it comes out, and you will see a number of rules that 
have already been finalized in the Obama administration that 
come out, as a result of concerns about economic 
considerations, very differently from how they were proposed, 
and that is completely publicly available.
    So there are ones just in the last weeks, where the 
proposals looked very different from the final. And that is a 
wonderful opportunity for Members of Congress, affected 
stakeholders, small business.
    With respect to OIRA's own process, the public can find--we 
make available--the difference between how the rule comes in 
and how it came out. So you can see that.
    Mr. Jordan. Okay. That is at least somewhat positive I 
think.
    Let me change gears a little bit. One of the things I have 
heard from business owners across the fourth district of Ohio--
and frankly, business owners in general; the business 
roundtable a few weeks ago made some statements about some of 
the things they see coming from this Administration and this 
Congress--is the uncertainty that business owners see with what 
may happen next from Congress.
    Are, in fact, there going to be the tax--are the Bush tax 
cuts, real 103 tax cuts, going to expire? Is, in fact, this 
health care bill, how it is implemented, what is going to--the 
uncertainty that is out there--many businesses--this is not Jim 
Jordan, conservative guy from Ohio making this, this is people 
talking to me saying, ``Look, I am nervous about what may 
happen next, how all this is going to get implemented, the 
rules that will come down.''
    That uncertainty is having, I believe, a direct impact on 
people's willingness to take risks in our economy, willingness 
to hire individuals in our economy, willingness to call people 
back to work who they have had to let go during this tough 
economic time. So talk to me about if you think that is a valid 
concern, because I am certainly hearing it, and your thoughts 
on how that impacts your agency.
    Mr. Sunstein. Yes. Well, I do, I think business uncertainty 
is definitely not desirable, and in fact, Executive Order 12866 
refers explicitly--that is the one under which we operate--to 
the need to minimize uncertainty.
    I will tell you some of the things we are doing to try to 
avoid that. We are relying very heavily on the notice-and-
comment process to make sure that members of the public, 
emphatically including the business community, get a chance to 
see what is being proposed, including the economic analysis, 
and get a chance to weigh in and change it. So one thing that 
has been a very high priority since I have been confirmed is to 
tee-up, as we say, the various options, the analysis, the 
possibilities, and to have public discussion so nobody is going 
to be surprised.
    Another thing we are really trying to do is to get in very 
plain language in executive summaries, in tables, a statement 
of exactly what is going to be expected of people under the 
proposal and exactly what we think the burdens are going to be 
so they can see that----
    Mr. Jordan. Yes.
    Mr. Sunstein [continuing]. And correct it. We are also 
trying to get alternatives proposed so that if--and agencies 
have been very enthusiastic about this--so if one is going to 
create uncertainty, impose big burdens, sometimes we will go 
the other way and we have done that.
    Mr. Jordan. Mr. Chair, if I can--chairman will indulge for 
one further question, or--are we doing a round two?
    Mr. Cohen. Just as long as you induce Ohio work and being 
upset with your rival Wisconsin and badger the witness. 
[Laughter.]
    Mr. Jordan. Well, let me just ask this: Obviously you have 
taken a strategy of not outright rejecting rules. Nine-hundred 
times it has come to you and you have not once said, ``We 
reject a rule.'' You have taken a different approach to arrive 
at what you believe would be the best process and the best 
outcome.
    But is there something to be said for maybe sending a 
message to the agencies, ``No. We flat out reject what you have 
sent us. There is a new sheriff in town.'' All the uncertainty 
that you just described that is out there that I have heard 
from constituents--do you think there is ever--maybe the other 
approach might be better where you say, ``Look, this just ain't 
going to fly and we are telling you outright no right from the 
get-go; now go back and do it right,'' and you send that 
message to the bureaucracy--to the entire Federal bureaucracy?
    Mr. Sunstein. Well, it is a good question. The pattern that 
we have set, which is working with the agencies to try to get 
it right, emphatically with reference to cost and burden--that 
is a central concern of ours--that was the pattern basically in 
the Bush administration and the Clinton administration and the 
Reagan administration as well. That is the way OIRA normally 
operates, is through, you know, informal improvement rather 
than public, ``No.''
    You are correct that previous Administrations have found it 
occasionally useful to do that, and that was their judgment.
    Mr. Jordan. Thank you, Mr. Chairman.
    Mr. Cohen. Thank you, Mr. Sunstein. That concludes the 
questioning and we appreciate your testimony. And if other 
Members have questions they will submit them to you in writing 
and we ask that you reply with those in writing in the soonest 
possible time--they have 5 minutes to do so.
    Thank you. We will now empanel the second group.
    I am now pleased to introduce the second witness panel to 
hear the testimony for today's hearing. Our first witness is 
Ms. Sally Katzen. Ms. Katzen serves as the Podesta Group's 
executive managing director, a difficult task managing Mr. 
Podesta. She has testified before Congress 66 times on a broad 
range of Federal Government activity and has served on panels 
for the National Academy of Science.
    Her career in the Federal Government includes 8 years in 
the Clinton administration as deputy director for management at 
the Office of Management and Budget, as Deputy Assistant to the 
President for Economic Policy and Director of the National 
Economic Council, and as Administrator of OIRA. Ms. Katzen was 
the first female partner at Wilmer Cutler & Pickering and is a 
well respected professor, having taught at George Washington, 
Michigan, George Mason, Pennsylvania, and Georgetown law 
schools in addition to Smith College, Johns Hopkins, and the 
Michigan in Washington program.
    Welcome back, Ms. Katzen, and will you please proceed with 
your testimony?

 TESTIMONY OF SALLY KATZEN, SENIOR ADVISOR, PODESTA GROUP, AND 
     FORMER ADMINISTRATOR OF THE OFFICE OF INFORMATION AND 
                   REGULATORY AFFAIRS (OIRA)

    Ms. Katzen. Thank you very much, Mr. Chairman, Ranking 
Member Franks, Mr. Jordan. I appreciate very much the 
invitation to testify today. This Committee has been terrific 
in promoting the integrity of the Federal regulatory process 
and I thank you for having this hearing to consider how the 
Obama administration has done in this regard in its first year-
and-a-half.
    Now, in my written testimony I begin with the regulatory 
agencies rather than OIRA because it is the agencies to which 
Congress has delegated the rulemaking authority. And to 
evaluate how those agencies are doing I think it is necessary 
to have a baseline. So where were they in January 2009?
    Well, in addition to having been OIRA Administrator for 5 
years during the Clinton administration, I was privileged to 
serve in the Obama-Biden transition with responsibility for the 
executive office of the President and all regulatory issues. 
What I saw during the transition was not a pretty picture.
    During the preceding 8 years, the regulatory agencies were 
required to do more research, more analysis, more consultation, 
more review with fewer resources, fewer--less support. In many 
regulatory agencies the staff was depleted; in virtually all it 
was demoralized. It was, overall, a dismal state of affairs.
    Now, the Obama administration took office with a renewed 
dedication to the regulatory agencies' missions and a deep 
respect for agency folks who do the work, but with very few new 
resources because of the economic situation--there was not 
money to make up for the shortfall--and with very few new 
leaders--the nomination-confirmation process is interminable. 
Even today, the regulatory agencies do not have confirmed 
appointees in all of their leadership positions.
    Now, that said, I think the regulatory agencies have done 
quite well, and in--excuse me--in my written testimony I 
discuss how they dealt with the midnight regs, and at the same 
time began to move forward.
    What about OIRA, which has been charged by both the 
Republican and Democratic administrations over the last 3 
decades to review the regulatory activities? In my written 
testimony I provide a lot of information about the executive 
orders that govern and I look forward to any questions you may 
have on that. I want to use this time to make basically four 
points about the present and the future.
    First, centralized review by OIRA now extends to executive 
branch agencies. I believe it should be extended to the 
independent regulatory commissions as well--those multiheaded 
agencies like the SEC, FCC, FTC, whose members do not serve at 
the pleasure of the President and can only be removed for 
cause.
    They are not subject to review under the executive orders, 
either the Reagan or the Clinton executive order, and that was 
not because of a conclusion that they are--I am now a triple 
negative. The draftsmen were told by the legal advisors that 
there was legal authority to extend the review of the IRCs, but 
the decision not to was made for political reasons.
    I would rethink that with the benefit of hindsight, because 
if you think about the problems that plague this Nation, they 
do not fit neatly into one agency. Consider the recent 
financial meltdown, which implicated both executive branch 
agencies like the Treasury and independent agencies like the 
SEC and even, shall I say, the Fed. What have we done? We 
combined two executive branch agencies--the SEC and--and at the 
same time we created a new agency as a bureau in an independent 
regulatory commission, the Fed.
    Because they go about rulemaking in the same way there 
should not be a problem with review, but because of the way 
they are structured, situated with respect to the President, 
the review--the type of review--might be different. Congress 
thought about this under the Paperwork Reduction Act and had a 
really keen scheme--elegant, quite elegant scheme--and in my 
written testimony I go through that.
    The second point is the orientation of OIRA. All discussion 
in the preceding panel had to do with review of individual 
regs. It is a transaction-oriented process. I think that is 
important--indeed, essential--and would disagree with some of 
my colleagues who would like to see that diminished.
    But it shouldn't be solely transaction-oriented. I think 
there should be an opportunity for review of areas to create a 
construct--if you will, a framework--for the review of the 
regulations in a particular area ensuring a comprehensive and 
coherent regulatory solution rather than a one-off, and what do 
we think about this one?
    There is a provision in the executive order--section four--
which goes to planning. That is the basis for this, and I would 
encourage that to be pursued.
    The third point I want to make has to do with the meetings 
that OIRA has with respect to outsiders, and there is a 
provision in the executive order that sets up a process which 
was the practice during the Clinton administration, and in the 
Bush administration they started to make changes which have 
continued and accelerated, and I think Mr. Bass might be able 
to expand on that.
    Finally, I just want to mention e-rulemaking. I was very 
honored to chair a blue ribbon commission under the auspices of 
the American Bar Association. We talk a lot about data 
decision--data-driven decision-making, the value of public 
participation, the potential for harnessing technology to 
produce a more efficient and effective government.
    I mean, the single most obvious manifestation of the 
congruence of these in the Federal regulatory process is e-
rulemaking. I would urge this Committee to consider having a 
hearing specifically on that subject because it seems to me it 
is an opportunity not only to improve the regulatory process 
but also congressional oversight and the implementation of the 
Congressional Review Act.
    I thank you very much for your kind attention to my 
comments and look forward to answering any questions.
    [The prepared statement of Ms. Katzen follows:]

                   Prepared Statement of Sally Katzen


























                               __________
    Mr. Cohen. Thank you, Ms. Katzen.
    And our next witness will be Dr. Bass, and Dr. Gary Bass is 
the founder and executive director of OMB Watch, a nonprofit 
research and advocacy organization that promotes greater 
government accountability and transparency and increased 
citizen participation in public policy decisions. Prior to 
founding OMB Watch--not to be confused with Timex--Dr. Bass was 
president of Human Services Information Center, where he wrote 
two books and numerous articles on human service issues.
    He also serves as director of liaison for the International 
Year of Disabled Persons, worked as a consultant on several 
projects in special education and the mental health of children 
and youth, and served as a special assistant to Wilbur Cohen, 
then chair of Michigan's Governor's Task Force on the 
Investigation and Prevention of Abuse at Residential 
Institutions.
    Thank you, Dr. Bass.

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

    Mr. Bass. Thank you, Mr. Chairman and other Members.
    Much of the conversation today has focused on one type of 
stakeholder, which is the business community. I would like to 
talk about it from the perspective of people who benefit from 
the regulations and give a little bit of a backdrop.
    We have gone through nearly almost a decade--8 years--of 
really a weakening of our regulatory apparatus within 
government. People who came in to oversee the regulatory 
agencies had often come from agencies--from companies--and now 
were regulating those same industries or companies creating 
sort of a foxes in the henhouse kind of model.
    Those regulations that did make it out were weaker and 
benefited mostly the regulated industries. Those regulations 
that were in place, the enforcement was greatly reduced and 
made minimal. It was almost a wink and a nod.
    When the Obama administration took over they had to largely 
address this kind of weakening of the regulatory agencies. They 
have put in place excellent people--very qualified, very 
skilled. They have begun building the regulatory apparatus, and 
they have begun thinking about how to strengthen enforcement.
    I raise this because it is in this context of a weakening 
regulatory environment that the country and the people in this 
country have faced situations where workers and the public have 
died, where people have been displaced in terms of their 
economic and livelihood--general social livelihood--and I am 
referring to a whole series of major crises that have been 
occurring, whether it is the collapse of mines with the Massey 
Energy situation in West Virginia, whether it is the problem of 
Toyota recalls, whether it is the issue of the disaster of the 
BP Deepwater Horizon. Or you could look around to daily 
newspapers and see both food and consumer products daily having 
many problems.
    It is in this context that we now see, if you will, a 
further agenda from the business community to deregulate--and, 
I should say, in the context of jobs, as we have been talking 
about today. It is rather surprising that the business 
roundtable put out, if I will, a hit list of more than 200 
rules in the last 2 weeks that should be deregulated covering 
virtually every aspect of our lives, whether it is environment, 
whether it is worker protections, whether it be financial 
reform--all of these were in the list. U.S. Chamber of Commerce 
followed that and made the threat of moving jobs offshore if 
the Administration did not deregulate.
    On top of that, minority leader John Boehner came out and 
endorsed a 1-year moratorium on most new regulations. All of 
this is in the context where people's lives are at stake.
    What we need is just the reverse. We need a strong Congress 
and we need a strong Administration to put in place the 
rulemaking apparatus that will protect the public.
    On top of it, this discussion about harm to jobs and job 
creation, I would like to see some data on that. We also have 
data that show otherwise.
    There is not a rule that has been in place in the past 
years where the business community didn't scream bloody murder 
that it would hurt, and in the end there has been adaptive 
technologies and adaptive ways to live with those rules and 
make the economy go. I am just thinking of the Clinton years, 
for example, where the business community complained bitterly 
that the Clinton administration was the regulatory presidency 
and yet the economy just rolled along swimmingly.
    Okay, so in that context, moving back to OIRA, I have four 
suggestions. One is that what we need to do is--I would 
disagree with Ms. Katzen around the centralized review. 
Notwithstanding that, I do agree 100 percent with her comment 
about the transactional reviews.
    We need the OIRA administrator to focus on these big-
picture problems; we need to connect the dots. We need to get 
this regulatory machine working in a way that is respectful of 
business and respectful of the beneficiaries of the 
regulations. By focusing on transactional reviews we will never 
get to that point of seriously looking at the regulatory 
problems in this country.
    The second thing I would recommend is, to the extent that 
these transactional reviews are occurring the administrator 
needs to be involved in meetings with public stakeholders. The 
history on this was to ensure that the civil service staff that 
work at OIRA are not the ones meeting with the public because 
of all the politics that are involved in that.
    Over the years, particularly starting in the Bush 
administration, that has shifted so that the administrator has 
not been meeting but the staff have been meeting. We need to 
shift that direction. What has happened today is many in the 
public interest community no longer even request meetings.
    The third point I would make--Administrator Sunstein talked 
a great deal about transparency, and he should be congratulated 
as well as the Administration should be congratulated for all 
they have done. I would encourage more.
    An example would be, to the extent that the kind of 
dialogue that was discussed between OIRA and the agencies 
occurs even before formal review happens the agencies should be 
disclosing that kind of communication. The dashboard that he 
was describing--that Administrator Sunstein was describing--
should have benchmarks so the public can know how to assess 
whether or not the Administration is moving in the right 
direction.
    My final point is, congratulations to you, Congress, and to 
you, Mr. Chairman, for hosting this hearing today. I think much 
more needs to be done. The issues I have described, which are 
catastrophic--the public demands and wants protections and 
needs Congress to step in to think through the right way to 
make that happen, albeit with the balance of business interests 
and the public interest.
    So I thank you for hearing me out today.
    [The prepared statement of Mr. Bass follows:]

                   Prepared Statement of Gary D. Bass







































                               __________

    Mr. Cohen. You are welcome, Dr. Bass. I appreciate your 
testimony.
    Our next witness will be Dr. Richard Williams, who was, I 
think, somewhat ill and is now in good health, and we 
appreciate and are thankful for that, at the time of our last 
hearing, which had to be put off. Dr. Williams is the managing 
director of the regulatory studies program and government 
accountability project at the Mercatus Center.
    Prior to joining the Mercatus Center he served as director 
for social science at the Center for Food Safety and Applied 
Nutrition of the Food and Drug Administration for 27 years. 
Serves as advisor to the Harvard Center for Risk Analysis and 
taught economics at W&L.
    Dr. Williams is an expert in benefit-cost analysis, risk 
analysis, particularly associated with food safety and 
nutrition. He is published in Risk Analysis and the Journal of 
Policy Analysis and Management. He has addressed numerous 
international governments including United Kingdom, South 
Korea, Yugoslavia, and Australia.
    Thank you, Dr. Williams.

  TESTIMONY OF RICHARD A. WILLIAMS, Ph.D., MANAGING DIRECTOR, 
   REGULATORY STUDIES PROGRAM AND GOVERNMENT ACCOUNTABILITY 
      PROJECT, MERCATUS CENTER AT GEORGE MASON UNIVERSITY

    Mr. Williams. Thank you, and thank you for the invitation 
to testify before the Committee today. I am retired from the 
Federal Government, first in the U.S.--with the U.S. Army in 
Vietnam and then for 27 years in the Food and Drug 
Administration working in regulatory policy, in particular 
dealing with economics and risk analysis.
    I think the goal of everybody here today is to discuss how 
we can get the best possible regulations. My concern, however, 
is that we may be regulating in haste, and without sufficient 
oversight by OIRA the outcome will be to repent at leisure.
    According to the evidence the Administration has put 
forward there has been both a reduction in the number of 
economic analyses produced by the agencies and diminished 
oversight by OIRA. For example, compared to 2007, in which 
every single economically significant regulation had a 
regulatory impact analysis, in 2009 one in five had no 
analysis.
    Meanwhile, OIRA has reduced the amount of time they are 
spending on reviewing individual regulation, down about 35 
percent in 2009 from the previous 2 years. And finally, as has 
been mentioned, after having reviewed 900 regulations since 
taking office they have decided that not one rule needs to be 
returned to the agency.
    The problem is that if agencies are failing to do the 
analyses or are doing a bad job of them we will have rules that 
fail to achieve their objectives. There are three reasons why 
we need strong oversight from OIRA.
    First, we want agencies to focus and make rules based on 
their area of expertise, and in fact they do. My focus at FDA 
since 1980 was to try and understand the risk and economic 
issues associated with food safety and nutrition. But we 
didn't, for example, consider how our rules would affect 
international competitiveness, job loss, or unintended 
consequences outside of our agency's purview, and it could be 
argued that no one did.
    Over time, however, as OIRA began to play a larger role in 
oversight, these concerns began to be addressed. They would 
push back on us to ensure that our decision-makers knew the 
opportunity costs of, for example, making food a little bit 
safer relative to other social investments, and also to make 
sure that we had a solution that actually worked. In fact, OIRA 
pushed us to promulgate one of the most cost-beneficial rules 
we had ever done, requiring that food manufacturers label 
trans-fatty acid.
    A second reason we need OIRA to provide oversight is that 
agencies can become captive to special interests, either the 
industries they regulate or activists with narrow agendas. By 
ensuring that agencies have carefully examined the benefits and 
costs of their actions OIRA can make sure that when these 
forces are at work our regulations are wise investments that 
benefit the entire American public, not just the special 
interests.
    Finally, my research and my own experience shows that too 
often agency decision-makers either ignore the findings of 
regulatory impact analyses or worse, direct the outcomes to 
support a premature decision. Returning a rule to an agency has 
an amazing ability to correct this type of behavior.
    Our research at Mercatus has shown that good regulatory 
analysis can improve regulations, but it has also shown that 
these analyses have uneven quality and do not rise to a 
standard of excellence specified by President Clinton's 
economic executive order. In fact, one of the biggest problems 
we have uncovered so far is that even for economically 
significant regulations agencies are often unable to articulate 
a systemic problem that they are trying to solve.
    Too often, the agencies appear to be content just to recite 
anecdotes or offer legal authority. The problem is, if you 
don't know what problem you are trying to solve it doesn't give 
you much ability or confidence that you will actually solve 
anything.
    Mr. Sunstein's vast scholarship supports better analysis 
producing better rules, as does the President's call for a 
dispassionate and analytical second opinion on agency actions. 
We need those second opinions now more than ever at a time when 
American businesses are uncertain about whether or not to 
invest their capital in the United States because they fear a 
vast new slate of regulations.
    And part of that uncertainty may be that OIRA is not 
ensuring that new regulations are subject to critical economic 
analysis. A vigorous OIRA can reduce that uncertainty and 
ensure that we are producing effective rules that advance our 
national interests; however, they must be allowed to take the 
time necessary to do the job thoroughly and return rules that 
do not measure up.
    [The prepared statement of Mr. Williams follows:]

               Prepared Statement of Richard A. Williams

























































                               __________

    Mr. Cohen. Thank you, Dr. Williams. Appreciate your 
testimony and your service to our Nation both in the military 
and at the Food and Drug.
    Next witness is Curtis Copeland. Dr. Copeland is a 
specialist in American national government at CRS. Dr. 
Copeland's expertise is appropriately relevant to today's 
hearing on Federal rulemaking and regulatory policy.
    Previously to testifying before this Subcommittee he has 
held a variety of positions at the Government Accountability 
Office over a 23-year period, received his Ph.D. from the 
University of North Texas, formerly known as North Texas State, 
the Flying Eagles, and the school that has a master's degree in 
jazz band.
    Welcome back, Dr. Copeland, and you will proceed with your 
testimony.

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, Mr. Franks. Thanks 
for inviting me here today to discuss Federal rulemaking.
    You asked me to present the results of a recent CRS report 
that I wrote on the implementation of the Congressional Review 
Act, which was enacted in 1996 to give Congress more control 
over agency rulemaking. The first sentence of the CRA requires 
agencies to submit all of their final rules with GAO and both 
houses of Congress before they can take effect.
    At its own initiative GAO has been checking the Federal 
register to determine whether agencies have, in fact, submitted 
all of their rules. As it turns out, they haven't.
    Between 1999 and 2008 GAO sent at least five letters to 
OIRA identifying nearly 1,000 substantive rules that had not 
been submitted. GAO said OIRA didn't respond to any of these 
letters and GAO and OIRA officials said that they were not 
aware of any efforts by OIRA to contact Federal agencies 
regarding these missing rules. Also, GAO did not send any of 
these letters to Congress or congressional Committees and did 
not notify the public about these unsubmitted rules.
    In May 2009 GAO sent another letter to OIRA listing 101 
substantive rules published during fiscal year 2008 that had 
not been submitted. The Department of Agriculture had the 
largest number of rules on the list. The subjects covered by 
the rules varied widely and included a final list of chemicals 
of interest as part of the Department of Homeland Security's 
antiterrorism standards and several rules designating 
endangered species' habitats.
    When contacted by CRS OIRA initially said it had no record 
of having GAO's May 2009 letter. Later, however, OIRA sent an 
e-mail to the Federal agencies telling them to contact GAO to 
find out which rules were missing.
    Shortly thereafter the agencies began submitting their 
missing rules. However, as of this month 49 of the 101 missing 
rules from fiscal year 2008 still had not been submitted to 
GAO.
    In January 2010 GAO sent another letter to OIRA listing 31 
rules published during fiscal year 2009 that it had not 
received. GAO also sent letters to each of the agencies with 
missing rules. Again, the Department of Agriculture had the 
most missing rules. As of last week, however, all but three of 
the 31 missing rules had, in fact, been submitted to GAO.
    Although the CRA says rules can't take effect until they 
are submitted to GAO and Congress it appears that Federal 
agencies are implementing most, if not all, of these rules 
anyway. Section 805 of the CRA says that no action or omission 
under the act can be the subject of judicial review, and the 
issue of whether a court can prevent enforcement of unsubmitted 
rules has not been resolved conclusively.
    The CRA says that a Member of Congress can introduce a 
resolution of disapproval as soon as a rule is submitted to 
Congress. Therefore, by not submitting their rules to Congress 
the agencies have arguably prevented Congress from using the 
expedited procedures in the CRA to disapprove their rules.
    Congress may conclude that agencies' non-submission of 
their covered rules does not require congressional action. 
After all, the number of unsubmitted rules went down from 101 
in fiscal year 2008 to 31 in fiscal year 2009.
    Also, the agencies seem to be more responsive in submitting 
their rules after notification by GAO. However, if Congress 
wants to take action several options are available.
    Last June the House of Representatives passed H.R. 2247, 
the Congressional Review Act Improvement Act, which you 
sponsored, Mr. Chairman. The legislation would eliminate the 
requirement that rules be sent to Congress and instead would 
require submission only to GAO.
    This change would make it easier for agencies to submit 
their rules electronically, which they cannot currently do to 
the House and Senate, and therefore could improve the rate of 
rule submission. H.R. 2247 was referred to the Senate Committee 
on Homeland Security and Governmental Affairs on June 2009 but 
it has not been acted on since then.
    Congress could take other actions. For example, it could 
require GAO to continue identifying missing rules and could 
require OIRA to take certain actions to improve agencies' 
compliance with the CRA. Also, GAO could be required to provide 
Congress with a copy of its CRA compliance letters, publish 
them in the Federal register, or publish a list of missing 
rules on GAO's Web site.
    Mr. Chairman, that concludes my statement. I would be happy 
to answer any questions.
    [The prepared statement of Mr. Copeland follows:]

                Prepared Statement of Curtis W. Copeland































                               __________

    Mr. Cohen. Thank you for your testimony and your service. 
You mentioned my bill, H.R. 2247, that went through, I think, 
on the suspension calendar but didn't have--I don't think--not 
heard.
    What is the Senate's problem?
    Mr. Copeland. I don't know. I have not been in contact with 
folks in the Senate.
    Mr. Cohen. Does anybody know what the Senate's problem is, 
either in a universal way or in a specific way relating to this 
bill?
    Mr. Franks. Takes more than a hearing. [Laughter.]
    Mr. Cohen. Ms. Katzen, you suggested something about 
extending these rules to the independent agencies--the SEC and 
the Fed and et cetera. All this stuff generally has been done 
through executive orders. Has there ever been legislation 
proposed to do such?
    Ms. Katzen. There has been legislation proposed both to 
codify the executive order and to other aspects of it. It could 
be done under the existing executive order. It could be done 
not directly, the way OIRA currently reviews executive branch 
agencies, where they say yea, nay, and it is done mostly 
through negotiations.
    But when Congress enacted the Paperwork Reduction Act, 
which applies to government forms for both executive branch 
agencies and the independent regulatory commissions, they said 
that while OIRA could review executive branch paperwork 
directly the decision with respect to paperwork was to be sent 
to the agency or the commission or the board, which could void 
any disapproval by a full meeting, presumably in public, under 
the Sunshine Act, and the reasons therefore.
    A similar type of review could be applied here, whereby 
OIRA would send to the SEC its written comments, they would be 
presented in an open meeting of the SEC, and the SEC would have 
to vote as a commission whether to accept or reject. This would 
enhance not only the transparency process, but should also lead 
to better decision-making, because if you look at the rules 
proposed by independent regulatory commissions they do not do, 
as a general rule, the type of rigorous analysis that has come 
to be expected for and accepted by executive branch agencies. 
So bringing them into the fold should enhance their analytical 
ability----
    Mr. Cohen. I understand your proposition, but how do you 
effectively get that into law? Are they doing anything about 
it? Are they recommending it, or is there any action taking 
place right now?
    Ms. Katzen. There is no action taking place that I know of. 
When President Obama, in January 30, 2009, called for comments 
on a potential new executive order this was--subject was 
discussed by some of the commentators. But since we haven't 
seen an executive order it could be an OMB memorandum.
    It could also be done, as you suggest, through legislation, 
whereby OIRA would be authorized to have this type of 
oversight----
    Mr. Cohen. Just from your general overall knowledge of 
politics and the world do you think that would be something 
that would be a bipartisan effort? Would there be any reason 
anybody would object to that?
    Ms. Katzen. You mentioned at the outset ``separation of 
powers,'' and there are many in Congress, on both the sides of 
the aisle, who feel strongly that the independent regulatory 
commissions are independent of the President and more the 
stepchildren of Congress and might well be suspicious, if not 
hostile or resistant, to----
    Mr. Cohen. So Ron Paul is not going to vote for this?
    Ms. Katzen. I don't think I could predict where his votes 
would lie, but it is an issue. I am not saying it is 
unsurmountable, and in fact, you could get bipartisan support. 
I noticed that some of your colleagues on this panel listened 
with interest as I described the situation. But I don't know 
that it is a--dare I use the expression--slam dunk.
    Mr. Cohen. Yes. I understand that. Obviously it isn't 
because Mr. Franks has already indicated he is not going to--he 
is going to, you know, beat Bill Russell--slam dunk.
    Dr. Williams, you mentioned, and some other people did, how 
Mr. Sunstein has not--and I think Mr. Jordan's question--
rejected any of the rules. Could it not be possible that the 
agencies are just doing a much better job in proposing their 
rules and nothing really needs to be summarily rejected?
    Mr. Williams. In my opinion that is unlikely.
    Mr. Cohen. But it is possible.
    Mr. Williams. Anything is possible.
    Mr. Cohen. And Dr. Bass, would you say it is possible or 
unlikely?
    Mr. Bass. I think it is quite possible.
    Mr. Cohen. Dr. Copeland, from possible to unlikely?
    Mr. Copeland. Could you repeat the question? I was looking 
at the numbers.
    Mr. Cohen. The fact that they haven't summarily dismissed 
and rejected these letters to say, ``Hey, not going to do it,'' 
could the agencies be doing a better job in promulgating their 
rules and regulations such that they are not inconsistent with 
the Administration's policy objectives and they are creating 
jobs and they are doing, you know, America's work?
    Mr. Copeland. Certainly possible. If the quality of the 
rules coming in the door are better then the number of 
rejections would certainly go down.
    Mr. Cohen. Thank you.
    And Ms. Katzen, to close?
    Ms. Katzen. First of all, during the last 20 years there 
has been an OIRA, and so the agencies have gotten better at 
doing their job. The second data point is that even during the 
Bush administration--that would be the George W. Bush 
administration--the Administrator started off with a roar and 
returned more regulations in that first couple of months than 
had ever been returned even during the Reagan years, and then 
there were none sent back. It stopped.
    Usually the rejections, as you call them, or the returns, 
are to get the agency's attention and say, ``You are going to 
have to live up to our standards and talk to us about what you 
are doing.'' And once that message is received--and it can be 
received with a stick or a carrot--then the agencies normally 
do come to the table. So I would say it is definitely possible 
that the agencies are doing a much better job.
    Mr. Cohen. Thank you. Thank you.
    Dr. Williams, you had talked about the repent in leisure. 
Was that some type of anti-marriage statement?
    Mr. Williams. No, sir. It was not.
    Mr. Cohen. Okay. Thank you, sir. I knew it wasn't.
    Mr. Franks, you are recognized.
    Mr. Franks. You mean a rejection actually got their 
attention? I think that is an epiphany that we should all dwell 
on.
    Well, Dr. Williams, I appreciate your comments today and 
the fact that you would be so open-minded as to say it is 
possible that no regulations at this point need to be changed 
because of this epiphany that the agencies have come to. I 
think it is mighty broad-minded of you and I think it is really 
reaching.
    But I guess my question to you, sir: The White House chief 
of staff has said that the President is beginning his own 
personal review of whether there are things that the agency 
rules could do in a more--you know, these agency rules could be 
done in a more sensible way, that, to use his ``in a more 
sensible way.''
    And you heard Professor Sunstein's defense of the White 
House earlier today. What do you think President Obama needs to 
do or to look at to determine whether the regulations under his 
Administration could be done in a more sensible way, other than 
resign?
    Mr. Williams. Sir, I think the first thing that they can do 
is to make sure that for all significant regulations that they 
actually have a regulatory impact analysis. As I mentioned in 
my testimony, even for economically significant regulations--
that is those that cost the economy over $100 million in either 
costs or benefits produced--one in five didn't have any sort of 
analysis at all.
    I think you also find, if you look at the independent 
agencies, the Federal Reserve produced six economically 
significant rules within the last year or 2. They produced zero 
economic analyses.
    So the first thing is to make sure the analyses are there. 
The second thing they can do is they have got to take the time 
to review those analyses or review those regulations. They are 
large; some of them are many thousands of pages.
    There was one regulation on OMB's Web site that costs over 
$1 billion. It was reviewed in 1 day by OIRA. They simply have 
to take more time than that to review those regulations.
    And finally, as I mentioned in my testimony, many of the 
decision-makers in regulatory agencies--and I know this from my 
own personal experience--basically discount regulatory impact 
analyses and its findings. They make their decision and then 
they turn around and they ask their economists, ``Can you 
please produce an analysis that supports my decision?''
    Well, when you work for those decision-makers it is pretty 
difficult to say no to that request, and what that ends up 
doing is it ends up producing a weak analysis that informs no 
one. The way you get around that is you have to return rules. 
That tends to wake decision-makers up that says, ``We need to 
have good analysis and you need to pay some attention to it.''
    Mr. Franks. All right, let me just make sure I understood 
what you said. As far as the returning of rules, Mr. Sunstein 
suggested that he done any of that, but earlier in your 
testimony you said as far as economic analysis that even that 
started out strong and then it hasn't been done since. Can you 
give me the chronology of that again?
    Mr. Williams. Yes. Well, we first started doing really 
significant economic analysis in 1981 with President Reagan's 
executive order and we were doing strong regulatory impact 
analyses. As OIRA moved more and more into overseeing 
regulatory agencies, became a stronger oversight agency, there 
was more and more of a demand for better analysis, and when 
that didn't happen rules were returned.
    And with every new--and, you know, every 4 years we got new 
political decision-makers. We sort of needed that--we sort of 
needed those returns in order for them to wake up and go, 
``This analysis is important. This is what the President--this 
is how the President is directing us to make decisions.''
    That tended to change their behavior. They tended to pay 
more attention to those analyses and we got better analyses 
which informed not just them but the Congress and the American 
public.
    I am concerned where we have gone now nearly 2 years 
without a single return of rules. My suspicion, sir, would be 
that, in fact, regulator, impact analyses are worse, not 
better.
    Mr. Franks. Well, it sounds like you may have some 
potential resonance on the rest of the panel here--not all of 
them, so we will try not to get anybody to jump out of their 
chair here, but that there is some at least acknowledgement of 
your point.
    And what would you recommend to the President, to OIRA, do 
to assure that regulations and regulatory uncertainty do not 
paralyze business and prevent them from creating jobs? I have 
just got to tell you, I know I hit on that point a lot, but 
business has some realities to deal with and that seems to be 
one of the--you know, there is nothing so tragic in this life 
as a beautiful liberal theory that is totally destroyed by an 
unruly set of facts, but it happens so often.
    And in this case, what do you think could be done to keep 
from paralyzing the job market?
    Mr. Williams. I think several things: First of all, ensure 
that regulatory agencies actually are addressing a systemic 
problem, make sure that they identify that, make sure that they 
have a solution. I spoke with many businesses in the food 
industry, they said they are happy to comply with regulations. 
They want to make sure, though, that they work, that they are 
addressing a real problem----
    Mr. Franks. What a novel idea.
    Mr. Williams [continuing]. And that they work.
    I think the other thing, as Ms. Katzen mentioned, is that 
you need to make sure in some way or another that the 
independent agencies are performing those analyses as well.
    Mr. Franks. Mr. Chairman, my time is expired. Thank you.
    Mr. Cohen. I would like to thank all the witnesses for 
their testimony today, and without objection the Members have 5 
legislative days to submit any additional written questions, 
which we will forward to the witnesses and ask you to promptly 
respond. Without objection the record will remain open for 
those 5 legislative days for the submission of any additional 
material.
    Again, I thank everyone for their time and patience. This 
hearing of the Subcommittee on Commercial and Administrative 
Law is adjourned.
    [Whereupon, at 12:36 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Response to Post-Hearing Questions from Cass R. Sunstein, Administrator 
 of the Office of Information and Regulatory Affairs (OIRA), Executive 
        Office of the President, Office of Management and Budget



















                                

 Material submitted by the Honorable Trent Franks, a Representative in 
Congress from the State of Arizona, and Ranking Member, Subcommittee on 
                   Commercial and Administrative Law











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