[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
  UNCHARTED TERRITORY: WHAT ARE THE CONSEQUENCES OF PRESIDENT OBAMA'S 

                 UNPRECEDENTED ``RECESS'' APPOINTMENTS?
=======================================================================



                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 1, 2012

                               __________

                           Serial No. 112-105

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform



                  U.S. GOVERNMENT PRINTING OFFICE
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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 1, 2012.................................     1
Statement of:
    Gray, C. Boyden, founding partner, Boyden Gray & Associates; 
      Andrew J. Pincus, partner, Mayer Brown; Michael J. 
      Gerhardt, Samuel Ashe distinguished professor in 
      constitutional law, University of North Carolina [UNC] 
      School of Law; David B. Rivkin, partner, Baker Hostetler, 
      LLP; and Mark A. Carter, partner, Dinsmore & Shohl, LLP....    73
        Carter, Mark A...........................................   119
        Gerhardt, Michael J......................................   100
        Gray, C. Boyden..........................................    73
        Pincus, Andrew J.........................................    85
        Rivkin, David B..........................................   107
    Lee, Hon. Michael S., a U.S. Senator from the State of Utah..    23
Letters, statements, etc., submitted for the record by:
    Carter, Mark A., partner, Dinsmore & Shohl, LLP, prepared 
      statement of...............................................   121
    Connolly, Hon. Gerald E., a Representative in Congress from 
      the State of Virginia, prepared statement of...............   149
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, letter dated February 1, 2012.......     5
    Gerhardt, Michael J., Samuel Ashe distinguished professor in 
      constitutional law, University of North Carolina [UNC] 
      School of Law, prepared statement of.......................   102
    Gray, C. Boyden, founding partner, Boyden Gray & Associates, 
      prepared statement of......................................    75
    Issa, Hon. Darrell E., a Representative in Congress from the 
      State of California:
        Article dated January 12, 2012...........................    36
        Democratic Opposition to Recess Appointments.............    50
    Lankford, Hon. James, a Representative in Congress from the 
      State of Oklahoma, letter dated February 1, 2012...........    64
    Lee, Hon. Michael S., a U.S. Senator from the State of Utah, 
      prepared statement of......................................    26
    Pincus, Andrew J., partner, Mayer Brown, prepared statement 
      of.........................................................    87
    Rivkin, David B., partner, Baker Hostetler, LLP, prepared 
      statement of...............................................   109


  UNCHARTED TERRITORY: WHAT ARE THE CONSEQUENCES OF PRESIDENT OBAMA'S 
                 UNPRECEDENTED ``RECESS'' APPOINTMENTS?

                              ----------                              


                      WEDNESDAY, FEBRUARY 1, 2012

                          House of Representatives,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:40 a.m., in 
room 2154, Rayburn House Office Building, Hon. Darrell E. Issa 
(chairman of the committee) presiding.
    Present: Representatives Issa, Platts, McHenry, Jordan, 
Walberg, Lankford, Amash, Gosar, Labrador, DesJarlais, Gowdy, 
Guinta, Farenthold, Kelly, Cummings, Towns, Maloney, Norton, 
Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, 
Davis, Welch, and Murphy.
    Staff present: Kurt Bardella, senior policy advisor; 
Michael R. Bebeau and Gwen D'Luzansky, assistant clerks; Robert 
Borden, general counsel; Molly Boyl, parliamentarian; Lawrence 
J. Brady, staff director; David Brewer, counsel; Katelyn E. 
Christ, research analyst; John Cuaderes, deputy staff director; 
Adam P. Fromm, director of Member services and committee 
operations; Linda Good, chief clerk; Christopher Hixon, deputy 
chief counsel, oversight; Mark D. Marin, director of oversight; 
Kristin L. Nelson and Jeffrey Post, professional staff members; 
Laura L. Rush, deputy chief clerk; Rebecca Watkins, press 
secretary; Jeff Wease, deputy CIO; Jaron Bourke, minority 
director of administration; Beverly Britton Fraser and Claire 
Coleman, minority counsels; Kevin Corbin, minority deputy 
clerk; Ashley Etienne, minority director of communications; 
Susanne Sachsman Grooms, minority chief counsel; Carla 
Hultberg, minority chief clerk; Paul Kincaid, minority press 
secretary; Adam Koshkin, minority staff assistant; Lucinda 
Lessley, minority policy director; Leah Perry, minority chief 
oversight counsel; Jason Powell and Steven Rangel, minority 
senior counsels; Dave Rapallo, minority staff director; and 
Mark Stephenson, minority director of legislation.
    Chairman Issa. Good morning. The committee will come to 
order.
    The Oversight and Government Reform Committee's mission is 
that we exist to secure two fundamental principles: First, 
Americans have the right to know that the money Washington 
takes from them is well spent; and, second, Americans deserve 
an efficient, effective government that works for them. Our 
duty on the Oversight and Government Reform Committee is to 
protect these rights.
    Our solemn responsibility is to hold government accountable 
to taxpayers because taxpayers have a right to know what they 
get from their government. We will work tirelessly, in 
partnership with citizen watchdogs, to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy. This is the mission of the Government Reform 
Committee.
    I will now recognize myself for an opening statement.
    President Obama, on January 4th, executed a political power 
play. He put us in uncharted territory. At the very least, it 
creates an uncertain environment and significant risk, by his 
own attorney's writings. Although, as I know too well, if you 
shop enough, you can always get an attorney to give you the 
opinion you want. If you can go to enough attorneys, you will 
get it. And if you hire a good attorney, they will even tell 
you that you can pardon a criminal that is still a fugitive 
from justice. We know that from history. We know that from 
recent history now, that you can get an opinion that is exactly 
the opposite of centuries of precedent, exactly the opposite of 
your predecessors, exactly the opposite of still-Majority 
Leader Reid's own view of recess occurring or not occurring.
    Vice President Biden in 2005 said, ``No President is 
entitled to the appointment of anyone he nominates. No 
President is entitled by the mere fact he has nominated 
someone. That's why they wrote the Constitution the way they 
did. It says `advice and consent.' '' The Senate did not 
consent. The Senate chose specifically not to act, even 
bringing to a vote and failing to get cloture.
    Ultimately, we will decide nothing here today. We are here 
to evaluate the risk to the American people of a government 
that has appointees who may not be able to act on behalf of the 
American people with the rule of law. The courts will soon 
decide--and the sooner, the better--whether or not these 
appointments are valid; and, if so, whether or not a law 
limiting taxes to the American people is valid. Because there 
can be no doubt the two cannot be valid. You cannot be in 
recess and not in recess. You cannot choose while in recess to 
pass a law and then choose to not be in recess for purposes of 
recess appointments.
    Ultimately, these and other issues will be decided, but the 
committee is here to understand the risk, to understand the 
likelihood, and at least to ensure that government begins 
facing the real problem of this uncertainty--this uncertainty 
that may last only a few weeks or may last for the rest of this 
administration.
    On December 23rd, while in pro forma session, the Senate 
passed and President Obama signed the Temporary Payroll Tax 
Continuation Act of 2011. I am just as concerned that the IRS 
is not collecting those taxes when, clearly, they were in 
recess, according to the President.
    This creates another constitutional question. The 
Constitution did not consider partial recess or recess for this 
purpose and not that purpose. You are either in recess or you 
are not.
    More importantly, the Senate may not act to be in recess to 
the exclusion of the other body. We, in fact, act together. We 
either are together, as required by the Constitution, or we are 
not. There is no such thing as the House is in session and the 
Senate is not, because if we are in session and the Senate is 
not, no law can be passed.
    Our Founding Fathers anticipated us coming to Washington, 
or New York before that, for a period of time and going home to 
our constituencies for a rather significant period of time. 
Many Americans, rightfully so, think that we were better off 
when we left town for a period of time and really got in touch 
with the people we represent.
    But that is not the issue here today. We are now a 365-day-
a-year Congress. We are at the call of the President and can be 
back in a matter of hours. And when we are in fact in pro forma 
session, that is the anticipation--the anticipation that, if 
needed, we will be back with a full quorum in a short period of 
time. U.S. Senators were informed that, in fact, they could be 
called back. They were informed that they were not in recess, 
and they made that decision.
    Today we will hear from a prominent U.S. Senator, but, more 
importantly, we will hear from a constitutional scholar--the 
son of a constitutional scholar about what he believes as a 
Senator. Then we will go on to hear from other witnesses.
    But most importantly, there will be a lively dialog here 
today, because clearly the decision now is on a very partisan 
basis. The minority will insist that both are legal, while the 
majority will at least question that both cannot be legal and 
binding. One has to give.
    With that, I recognize the ranking member for his opening 
statement.
    Mr. Cummings. Thank you very much, Mr. Chairman. And I 
thank you for holding this hearing.
    And to you, Senator Lee, welcome to our committee.
    Mr. Chairman, if the committee really wants to conduct an 
even-handed examination of President Obama's recess 
appointments, we need to look at a much bigger issue first: the 
unprecedented obstruction by Senate Republicans of the 
constitutional confirmation process.
    Republicans have raised constitutional concerns about the 
President's recess appointments, but the real issue here is the 
effort of 44 Republican Senators to sabotage the mission of the 
Consumer Financial Protection Bureau. In a letter the 
Republican Senators wrote last May, they declared their 
opposition to any--any--nominee to head the Consumer Financial 
Protection Bureau. These Republicans admitted that the 
President's nominee, Richard Cordray, was highly qualified for 
the position. As the attorney general of the State of Ohio, he 
recovered billions of dollars for retirees, investors, and 
business owners, and he was on the front lines of protecting 
consumers from fraudulent foreclosures and financial predators.
    Senator Mike Lee conceded that Mr. Cordray was well 
qualified for this position, ``My decision to oppose his 
confirmation by the Senate has nothing to do with his 
qualifications,'' said Senator Lee. ``Rather, I feel it is my 
duty to oppose his confirmation as part of my opposition to the 
creation of CFPB itself.''
    This gang of 44 Republican Senators oppose the creation of 
the Consumer Protection Bureau. According to existing law, once 
a permanent director is put in place, the Bureau will have 
authority to issue regulations protecting consumers from 
unfair, deceptive, or abusive consumer financial practices by 
mortgage servicers, payday lenders, debt collectors, private 
student lenders, and credit reporting agencies. These are 
exactly the protections Republicans wanted to block.
    Article II of the Constitution says the President shall 
nominate and appoint officers of the United States, ``with the 
advice and consent of the Senate.'' Nowhere does the 
Constitution authorize Senators to block all nominees, 
regardless of their qualifications, because they object to the 
current law--the current law--of the land and do not have the 
votes to change it. Constitutional scholar Thomas Mann calls 
this Republican boycott, ``a modern-day form of 
nullification,'' and says, ``There's nothing normal or routine 
about this.''
    As our committee has heard repeatedly, there are millions 
of American families who are currently in foreclosure, many of 
them in my district, many of whom were subjected to widespread 
and illegal abuses by mortgage servicers. Nearly 20 million 
consumers take out payday loans from an industry widely known 
for its unscrupulous behavior.
    What is the Republican response? They want to cut the legs 
out from under the agency Congress created--Congress created--
to protect American families from exactly these types of abuses 
by mortgage servicers, payday lenders, and credit reporting 
agencies.
    Today's new concern about litigation arising from the 
appointment is a red herring. The corporate interests that 
opposed the creation of the Bureau to begin with are the same 
interests that are now aggressively challenging the consumer 
protections in court.
    As with the Consumer Bureau, Republicans also oppose the 
entire mission of the National Labor Relations Board and have 
blocked the President's appointments in an effort to prevent 
the Board from functioning properly.
    In short, Senate Republicans left the President with no 
choice. These recess appointments were the only way to comply 
with Congress' intent in establishing and maintaining fully 
functioning agencies.
    The fact is that President Obama has been extremely 
restrained in his use of recess appointments. During their full 
terms, President George W. Bush had made 171 recess 
appointments; President Clinton had made 139 recess 
appointments; and President Reagan had made 240 recess 
appointments. In contrast, President Obama has made just 32 at 
this point in his Presidency.
    I hope we can ask our witnesses today not only about the 
President's recess appointments but also about a much more 
significant issue: unprecedented obstructionism by Senate 
Republicans that is intended to cause irreparable harm to the 
American consumers.
    And, with that, Mr. Chairman, I have a minority report that 
we produced, and I ask unanimous consent that it be inserted in 
the record.
    Chairman Issa. It doesn't appear to be a report, but the 
documents you have, we have reviewed them, and I have no 
objections. They will be placed in the record.
    [The information referred to follows:]
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    Mr. Cummings. Thank you very much, Mr. Chairman.
    Chairman Issa. Thank you.
    We now go to our first witness. Our first panel is Senator 
Mike Lee of Utah.
    Senator Lee has spent his entire life both studying and 
participating in our judicial system. As a child, he attended 
arguments before the U.S. Supreme Court given by his father, 
Rex, who was Solicitor General under President Ronald Reagan. 
Senator Lee later clerked for Justice Alito, both when he was a 
member of the Third Circuit Court of Appeals and later a 
Supreme Court Justice.
    After spending time in the private sector, he was asked to 
serve as the assistant U.S. attorney in Salt Lake and then as 
general counsel to Governor John Huntsman. Few people with this 
type of experience and understanding of our Constitution and 
our judicial process have served in the Congress. So, although 
Senator Lee is a freshman, he is certainly not new to the 
questions that the Senate faces and our country faces here 
today.
    And, with that, Senator, I understand that you are both 
testifying and willing to take questions; is that correct?
    Senator Lee. Yes, sir. Yes, sir.
    Chairman Issa. And as is customary for everyone except--
actually, required in the rules--except for Members of 
Congress, you will not be sworn, in that you are a Member of 
our body.
    With that, the gentleman is recognized.

STATEMENT OF HON. MICHAEL S. LEE, A U.S. SENATOR FROM THE STATE 
                            OF UTAH

    Senator Lee. Thank you, Mr. Chairman and Ranking Member 
Cummings, for the invitation to come here and to address you 
and the other members of the committee. It is an honor to be 
here with you today.
    I am here to defend the constitutional prerogatives of 
Congress. And I want to be clear from the outset that 
regardless of whatever political concerns I might have with 
these nominations, my overriding, dominating concern here is 
not partisan; rather, it is an institutional and a 
constitutional concern that I am here to explain and then 
answer any questions that you might have regarding those 
concerns.
    President Obama's January 4, 2012, appointments are 
unconstitutional because they did not comply with the 
requirements for appointments set forth in the Constitution. 
Those requirements, I might add, are important because, as the 
Founding Fathers discussed in that fateful convention in the 
summer of 1787 that occurred in Philadelphia, the Founding 
Fathers were unwilling to grant this power on an unrestrained 
basis to an executive, as they argued that it would not be wise 
to, ``grant so great a power to any single person, as the 
people would think we are leaning too much toward monarchy.''
    These appointments were unconstitutional because they 
neither received the advice and consent of the Senate nor were 
they made during a Senate recess, the kind of recess cognizable 
under the recess appointments clause. They are different in 
kind than previous recess appointments made by any President 
from any political party in our Nation's history. No President 
has ever unilaterally appointed an executive officer during a 
recess of less than 3 days. Neither, to my knowledge, has a 
President of either party ever asserted the power to determine 
for himself when the Senate is or is not in session for 
purposes of the recess appointments clause.
    In making these appointments, President Obama has not, to 
my knowledge, asserted that his January 4, 2012, appointments 
can be justified based on the 3-day adjournment that occurred 
between January 3, 2012, and January 6, 2012. And this is for 
good reason. Surely any such assertion of the recess 
appointment power would be unconstitutional.
    The Department of Justice has repeatedly and over the 
course of many decades opined that an adjournment of 
significant length and particularly an adjournment of 3 days or 
less--that is, any adjournment that is of insignificant length 
because it is of 3 days or less--does not constitute a recess 
for purposes relevant to this recess appointments clause. And 
the text of the Constitution evidences that the Framers did not 
consider an adjournment like this to be constitutionally 
significant.
    It is also significant here that Article I, Section 5 
provides that neither House during the session of Congress 
shall, without the consent of the other, adjourn for more than 
3 days. So if an intra-session adjournment of less than 3 days 
were to be considered constitutionally sufficient for the 
President to be able to exercise this recess appointment power, 
it is unclear what, if anything, would prevent the President 
from routinely bypassing the Constitution's advice and consent 
requirement in appointing nominees during even weekend 
adjournments, which routinely involve periods of 72 hours or 
even more in which the Senate may not be actually in the 
practice of holding committee hearings and voting and so forth.
    Instead, in asserting that his appointments are 
constitutional, President Obama has relied on a memorandum 
opinion produced by the Office of Legal Counsel [OLC] in the 
Department of Justice. This OLC memorandum asserts that the 
President may unilaterally conclude that the Senate's brief pro 
forma sessions, such as those that were held on January 3, 
2012, and continued every Tuesday and every Friday until 
January 23, 2012, somehow do not constitute sessions of the 
Senate for purposes relevant to the recess appointments clause.
    This assertion is deeply flawed because, under the 
procedures established by the Constitution, it is for the 
Senate and it is not for the President to decide when the 
Senate is in session. Indeed, the Constitution expressly grants 
the power to determine the rules of its own proceedings.
    To assert that the President has an unconstrained right to 
determine for himself when the session is or is not in session 
and to appoint nominees unilaterally at any time he feels the 
Senate is not as responsive as he would like it to be--even 
when the Senate is meeting--is to trample upon the 
Constitution's separation of powers and the system of checks 
and balances that animated the adoption of the advice and 
consent requirement.
    I look forward to answering your questions. And as I answer 
those questions, I will continue to emphasize again and again 
that ours is not a government of one. These are real rights 
upon which the President has trampled. This is power that he 
has taken that doesn't belong to him; it belongs to the 
American people. And under our constitutional system, that 
power is to be exercised by the people's elected 
representatives in the Senate and not by the President alone.
    There are people throughout my State and across America who 
feel powerless, and that is why I have made the comments I 
have, that this is a lawless action that we need to object to 
strenuously.
    Chairman Issa. I thank the gentleman. I did not limit you 
to 5 minutes, but I appreciate your accuracy.
    [The prepared statement of Senator Michael S. Lee follows:]
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    Chairman Issa. I will now recognize myself for a first 
round of questions.
    Senator Lee. We will call it professional courtesy. I 
always appreciate it in the Senate when people limit themselves 
to the 5 minutes as well.
    Chairman Issa. Well, you know, being a House Member, I have 
noticed that when House Members go to the Senate, there is a 
veil of forgetfulness that we somehow see.
    Senator, the CFPB, passed under Dodd-Frank, isn't it unique 
or fairly unique in that it receives its funding without 
appropriation from Congress?
    Senator Lee. Yes, that is my understanding, is that because 
this position is embedded within the Federal Reserve, because 
the Federal Reserve Bank is not, in a sense--in a literal 
sense, in the traditional sense, a government agency but rather 
a private, for-profit corporation, it is not an entity that 
Congress controls in the sense of controlling its purse 
strings. And so that is a significant concern that many of 
our----
    Chairman Issa. Right. So you had no other way to ask for 
reform, consideration, or anything else other than this 
confirmation. It was an unusual situation in which one of the 
ordinary powers of the House and the Senate is to not fund 
something that a previous Congress has chosen to do. But in the 
case of the CFPB, that is not the case; is that correct?
    Senator Lee. That is correct. And in that respect, it 
enjoys an unusual degree of insulation from the normal controls 
on any government. And that degree of insulation historically 
has been reserved for despots.
    Chairman Issa. Good word.
    One of the points that I have been given by Cato--and I ask 
unanimous consent it be placed in the record--is, actually, on 
their Web site, they note that 97 percent of President Obama's 
nominations in 2011 were confirmed by your body. Is that 
roughly your understanding?
    Senator Lee. Yes.
    [The information referred to follows:]
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    Chairman Issa. So the fact is, you are practically a rubber 
stamp to what the President wants, right?
    Senator Lee. Some of us try not to see ourselves quite that 
way, but we have been very cooperative in confirming this 
President's nominees. I, in fact, myself, despite the fact that 
I have harbored significant policy, ideological, and political 
differences with many, if not most, of the President's 
nominees, I have continued to vote for them, and most of them 
have been confirmed, many with my vote.
    Chairman Issa. So you have exercised advice and consent and 
in the affirmative 97 percent of the time.
    Let me go to another portion, because you are, both 
personally and as a family, historically better informed than 
we are. Hasn't the Senate exercised its refusal in the past, 
even at times to the Supreme Court? And hasn't it been the view 
that if the Senate decided not to have a Supreme Court, all 
they would have to do is wait for them to die off, that 
ultimately it is within the power over a period of time for the 
Senate to choose not to fill vacancies, that that is within its 
historic power, and they have asserted it in the past?
    Senator Lee. The Supreme Court certainly is on a different 
plane from other government officials. The Supreme Court, 
unlike many other government officials, certainly unlike the 
people who serve in the NLRB or the CFPB or elsewhere, are not 
people whose positions are specifically created under and 
identified in the Constitution. So that is different.
    But the overarching question you are asking is whether or 
not the Senate, in its advice and consent function, is required 
to give its consent, to, in fact, approve. And----
    Chairman Issa. Right.
    Senator Lee [continuing]. It isn't. That is the Senate's 
prerogative.
    Chairman Issa. So both at district court, circuit court of 
appeals, and actually at the Supreme Court, they have chosen 
simply not to act on Presidential appointments in the past and, 
by doing so, let them hang until the President withdrew them or 
the nominee went somewhere else or the President's term expired 
or he found somebody else to appoint. Isn't that correct?
    Senator Lee. In many, many instances, more instances than I 
can count.
    Chairman Issa. Now, Ambassadors are one of the 
confirmations that you do in the Senate. And if we do not have 
an ambassador, we, in fact, have a lower standing in that 
foreign country and a lower ability to have a presence around 
the world. Isn't that true?
    Senator Lee. That argument has been made, and I suspect 
there is some truth to it.
    Chairman Issa. And isn't it routine--and they are certainly 
envisioned in the Constitution. They are not just some 
affectation of the last administration--or the administration's 
last Congress. So isn't it true that it has been the practice 
of the Senate, under Senator Reid, sometimes simply to say that 
nominee is dead on arrival and go find somebody else and not 
call for a vote?
    Senator Lee. Yes.
    Chairman Issa. Isn't it true that often nominees are pre-
vetted before they are put up so as not to embarrass them, and, 
in fact, there is a whole discussion because they so want to 
not have that controversy?
    Senator Lee. That is also correct. It is a well-known fact 
that this occurs and with good reason.
    Chairman Issa. With good reason.
    So I guess--a couple last questions. Motion to adjourn in 
the Senate--different body here, but it is in order here at any 
time. Was there a motion to adjourn by the Democrats issued? 
Did they try to adjourn?
    Senator Lee. My understanding is that we could not adjourn 
because, consistent with Article I, Section 5 of the 
Constitution, we were required to obtain the consent of the 
House of Representatives to adjourn and, before adjourning, for 
any period of time longer than 72 hours.
    Given that we didn't receive such consent, the Senate was 
unable to adjourn for any period of time longer than 72 hours. 
And so we continued holding pro forma sessions basically every 
72 hours throughout that period of time.
    Chairman Issa. But let's talk about pro forma sessions, 
last question, very quickly. Every 3rd day, who got in the 
chair over in the Senate? Was it a Republican?
    Senator Lee. Normally a Democrat is my understanding.
    Chairman Issa. Normally or always?
    Senator Lee. Always.
    Chairman Issa. So Senator Reid had to put a Democrat in the 
chair to hold the pro forma session every 3rd day, and he did 
so.
    Senator Lee. Correct.
    Chairman Issa. Thank you.
    I yield back and recognize the ranking member for 5 minutes 
and 49 seconds.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    And again, Senator Lee, I want to thank you for bringing 
these concerns before us.
    As you could tell from my opening statement, I am concerned 
that a large number of Senators tried to block a candidate who 
is extremely qualified for a post because they disagree with 
the law--the law--Congress passed creating the Consumer Bureau. 
On December 7, 2011, your office issued a press release that 
stated, ``My decision to oppose his confirmation by the Senate 
has nothing to do with qualifications, but I feel it is my duty 
to oppose his confirmation as part of my opposition to the 
creation of the CFPB itself.''
    My question is, the Senate's role is to give advice and 
consent. Senator, just to be clear, you don't have any problem 
with Mr. Cordray, do you?
    Senator Lee. I don't have any personal problem with him. I 
am sure he is a wonderful human being.
    Mr. Cummings. You felt that he was qualified for the job?
    Senator Lee. I feel that he possesses professional 
qualifications which might well serve him well in a variety of 
government positions.
    Mr. Cummings. Let me put up Slide 5 up on the board.
    C. Boyden Gray, who was the White House counsel to 
President Bush, will be testifying on the next panel of this 
hearing. And his view is that your actions would be an 
unconstitutional act for a Senator. Let me read to you what he 
said. It says, ``I believe the use of the Senate cloture rule 
to permanently block nominations conflicts with the 
Constitution's advice and consent clause.''
    So, Senator Lee, is your message to Mr. Gray that he 
doesn't know his constitutional law?
    Senator Lee. I certainly would never say that. I have 
enormous respect for Mr. Gray. I consider him a friend. I also 
consider him something of a role model as a constitutional 
scholar, and I admire his work.
    I am not sure of the totality of the circumstances in which 
he made that comment, but let me say this: My belief is that 
because Congress is a legislative body consisting of elected 
officials and those elected officials are retired in 
increments--especially in the Senate, where we have elections 
only every 2 years--you often have a set of laws that one body 
has to deal with. In many instances, you have Members of a new 
Congress that didn't vote for a previous law. It is not at all 
uncommon, for instance, to have a law that creates a government 
office in one session of Congress that a subsequent Congress 
refuses to fund or refuses to fund part of its actions. That 
happens from time to time.
    Now, you might have a Senate that decides not to confirm 
somebody to a particular position, perhaps because of the 
qualifications of the individual or perhaps they have concerns 
about the office or the power that that officer might wield. 
And I believe that it is not improper for a Congress to raise 
those concerns, raise substantive concerns about the office 
itself when going through the nominations process.
    It is, at the end of the day, the Senate's prerogative to 
confirm or not to confirm. And there is nothing in the text, 
the original understanding, or the history of the Constitution 
that suggests that the Senate's prerogative to provide advice 
and consent to Presidential nominations means that the consent, 
in fact, has to be granted.
    Mr. Cummings. Uh-huh. So, in other words, if a Senator 
disagrees with the law, then it is your opinion that they are 
within their rights under the Constitution to basically say, I 
am not going to vote to confirm a nominee. Is that right?
    Senator Lee. Yes, in----
    Mr. Cummings. Because the underpinning law--is that----
    Senator Lee. Yes, and in precisely the same respect and for 
precisely the same reasons that a Senator or a Congressman, for 
that matter, might refuse to vote to fund a particular office 
that was created under a previous law, adopted by a previous 
Congress. That is not only not improper but that is part of 
what it means to live in a constitutional republic in which 
laws are made and government programs are funded only by 
regularly elected officials who stand for reelection and may 
lose election after a while.
    Mr. Cummings. In addition, on February 2, 2005, Senator Jon 
Kyl, one of your colleagues, made the following statement on 
the floor regarding the Gonzales nomination, and he said: 
``When someone is qualified and has the confidence of the 
President, unless there is some highly disqualifying factor 
brought to our attention, we should accede to the President's 
request for his nomination and confirm the individual.''
    What is your opinion on that, what he said?
    Senator Lee. Well, again, you know, I make it a point not 
to speak for my colleagues. I don't know the totality of the 
circumstances in which my friend Senator Kyl made that 
statement.
    But I will say, first of all, that any Senator may decide 
to grant or withhold his or her vote to confirm or not to 
confirm anyone for any reason, just as he or she is free to 
vote or not vote for any particular budget or appropriations 
act or anything else.
    Second, and perhaps more importantly, the fact that there 
is delay, the fact that there has been delay in confirmations 
in every Senate, with every Presidential administration, 
Republican or Democratic, going back decades, in fact, going 
back throughout the entire history of our Republic, does not 
and cannot ever excuse the President of the United States in 
thumbing his nose at the U.S. Constitution. That is what has 
happened here. That is what we are talking about today.
    Mr. Cummings. So if Senators started blocking all the 
President's nominees because they disagreed with the laws that 
Congress passes, we would essentially have a form of 
nullification that could shut down the government, and that 
clearly is not what the Framers intended.
    Senator Lee. Well, I am not sure that I can agree with that 
statement. Every Congress has the power to shut down the 
government should it choose, subject, of course, to what the 
electorate wants. If a Congress chose to shut down the 
government, my guess is that that would be extraordinarily 
unpopular, especially if it extended for a duration of more 
than just a few days.
    Yeah, the Congress has the power to do all sorts of things. 
And the fact that the Senate could exercise that advice and 
consent power irresponsibly doesn't justify the President in 
circumventing those very same constitutional restrictions that 
give it that power.
    Mr. Cummings. I thank you, Mr. Chairman.
    Chairman Issa. I thank you.
    And if I could make a clarification for the record, 
Ambassador Gray was in the first Bush administration. You said 
``President Bush''; I want to make sure everyone knew it was 
not the immediate past.
    Mr. Cummings. Right. Thank you.
    Chairman Issa. And, with that, we recognize the 
distinguished gentleman from South Carolina, Mr. Gowdy.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Senator Lee, welcome. Thank you for being with us today.
    Who has standing to challenge this?
    Senator Lee. Well, if you are talking about Article III 
standing for purposes of determining whether a case is 
justiciable in a Federal court, the most likely type of party 
that could establish standing would be a party aggrieved by an 
order, a decision, carrying the force of law by either the 
National Labor Relations Board or the Consumer Financial 
Protection Bureau. Once such an order has been issued and you 
have an aggrieved party, someone could, in theory, take that 
case to a Federal district court and say, I have an injury in 
fact, it is fairly traceable to the conduct of the NLRB or the 
CFPB, and it is the kind of injury that could fairly be 
redressable in court.
    Mr. Gowdy. Do U.S. Senators have standing to challenge the 
recess appointments?
    Senator Lee. While there may be some disagreement on this, 
of the authorities that I have consulted, including those based 
on the Supreme Court decision in Raines v. Byrd, seems to 
suggest that U.S. Senators are likely not to have standing to 
bring the case in their own capacity, but they certainly could 
in all events participate as amici curiae.
    Mr. Gowdy. There is often talk of precedent and stare 
decisis, particularly when people like the decision, initially. 
They don't tend to talk about precedent and stare decisis as 
much when they don't.
    My concern is, whatever the analysis we have of the recess 
appointment clause, it should be the same irrespective of who 
the President is and what party they are in. Can you talk about 
the historical treatment of what a recess meant and what a 
better rule is going forward?
    Because it strikes me that if the person in the chair were 
taking a nap, under the President's analysis, he could make a 
recess appointment, or if you all were out to lunch for a 
couple of hours. What is the difference between 3 hours and 3 
days?
    So what has historically been the rule and what is a good 
rule going forward, irrespective of who the President is?
    Senator Lee. That is a great question. And I want to 
emphasize the concern embedded in your question here, that the 
answer can't simply be that the President may decide on his own 
accord when the Senate is in recess. If he regards that the 
Senate is doing insignificant work, for instance; if he decides 
that whoever is sitting in the presiding officer's chair is 
going to sleep or that they are likely not to do any work, that 
is dangerous. That creates a slippery slope in which he could 
decide to make recess appointments overnight or over a weekend 
or something like that, and that certainly can't be the case.
    To answer your broader question, precedent has been 
established in recent decades, basically over the course of the 
last century. Before that, I think it was a little more 
informal, but we have had substantial precedent evolve over the 
last century.
    We had in the early 1900's a series of recess appointments 
made by President Theodore Roosevelt, 167 recess appointments 
made in the seconds between the end of one Congress and the 
beginning of the next Congress, just in between gavel taps, 
basically. The Senate Judiciary Committee convened a panel and 
conducted a formal investigation to determine what the rule 
ought to be. And our custom and practice as it has evolved over 
the intervening century has been based, in part, on their 
analysis.
    Here is one of their conclusions, and I quote from their 
1905 report: ``The Framers of the Constitution were providing 
against a real danger to the public interest and not just an 
imaginary one. They had in mind a period of time in which it 
would be harmful if an office were not filled--not a 
constructive, inferred, or imputed recess as opposed to an 
actual one.'' So, in other words, they are saying you can't use 
an overly technical set of logic in order to reach the 
conclusion that you have a recess.
    Now, that conclusion was followed up by an Attorney 
General's advisory opinion by Attorney General Daugherty, which 
was issued in 1921. And among other things in that report, he 
explained that regardless of exactly where you draw the line, 
he said, under no set of reasonable circumstances can you infer 
that an adjournment lasting less than 3 days could be deemed a 
recess for purposes of the recess appointments clause. He went 
on to say, it is probably too short even if you take it out to 
7 days or to 10 days.
    And ever since then, our analysis has been informed by 
those positions; that, if nothing else, we look back to those 
two clauses of the Constitution we talked about earlier--
Article I, Section 5 and Article II, Section 2. Article II, 
Section 2 says the President has this power during a recess. 
Article I, Section 5 says that in order to adjourn for more 
than 72 hours, the Senate has to get permission of the House. 
So that has evolved as a sort of safe harbor. If we don't have 
permission from the House or for whatever reason we don't get 
it, then we are not in recess, because we are having to convene 
every 72 hours.
    The fact that we might not pass laws doesn't mean that we 
can't. We, in fact, did pass a very significant law on December 
23rd in one of those pro forma sessions, just days before these 
recess appointments were made.
    So it is wrong to suggest, as the President's Office of 
Legal Counsel has suggested in advising him, that those pro 
forma sessions are meaningless for constitutional purposes 
here.
    Mr. Gowdy. Mr. Chairman, I have additional questions but I 
am out of time, so perhaps one of my colleagues will take mercy 
on me later on.
    Chairman Issa. One can always hope.
    And, with that, we recognize the former chairman of the 
full committee, Mr. Towns, for 5 minutes.
    Mr. Towns. Thank you very much, Mr. Chairman. I 
appreciate----
    Chairman Issa. And if you would like to yield to the 
gentleman from South Carolina at any time, he is available.
    Mr. Towns. Yeah, I don't think I will do that.
    But let me just say that I really appreciate the Senator 
coming over to share with us, but, Mr. Chairman, I yield back 
the balance of my time because I really want to get to the 
witnesses. You know, I really do. And I am eager to get to the 
witnesses. And I hope my colleagues are, too.
    I yield back.
    Chairman Issa. I thank the gentleman for yielding back.
    We now go to the gentleman from Texas, Mr. Farenthold, for 
5 minutes.
    Mr. Farenthold. Thank you, Mr. Chairman.
    Thank you, Senator, for being here.
    While I was home over the Christmas holiday and during this 
timeframe and after the President made these appointments, I 
got a great deal of email from my constituents asking, How 
could you let this happen? How do you fix this? What do you do? 
I mean, there was a real frustration. I think the American 
people got, on a commonsense basis, that we were not in recess 
when we were meeting pro forma every 3 days, when we passed 
very significant legislation in the form of the payroll tax 
holiday that the President himself was calling for us to pass 
during these pro forma sessions.
    So my question to you is, I am not going to get into the 
nitty-gritty of whether we were in recess. I think the American 
people, anybody with a lick of common sense, gets that we were 
not in recess.
    But where do you go from here? What are our options in 
dealing with these people who are taking taxpayer money, making 
critical decisions affecting this country, that have bypassed 
the advice and consent of the Senate, as I think is required by 
the Constitution? I mean, what are some of our options here? 
What can we do?
    It is clear courts don't like to get involved in these 
separation-of-powers issues. You answered Mr. Gowdy's question 
about standing. I mean, where do we go from here? Do we de-fund 
the positions? Well, that will never really get passed unless 
we can bury it in some other bill. I mean, we can't impeach 
him, I don't think, because they haven't committed any crimes. 
Do we amend the Constitution to make this problem not happen? 
Where do we go from here?
    Senator Lee. Well, first of all, thank you for sharing that 
set of remarks about what you have heard from your 
constituents. It is very much consistent with what I have heard 
from my constituents in my State, which is that people are 
feeling frustrated, they are feeling a sense of powerlessness, 
they are feeling the sense that power that belongs properly to 
them, the American people, has been exercised, it has been 
taken by someone to whom it does not belong. The President has 
taken power that belongs to the people and is authorized to be 
exercised only by those duly elected to the U.S. Senate.
    And so something does need to be done, and that is why I 
have drawn the attention to it in recent days that I have. That 
is why I have said that, for my part, in my role as a Senator, 
although I have cooperated, and cooperated happily, with this 
President even though he has appointed lot of people with whom 
I have significant political and philosophical disagreements, I 
have recognized he is the President, he did in fact win an 
election, elections have consequences, and I have confirmed 
most of those people who have come before me.
    But for me, personally, that changes now. My response to 
that and my duty to the Constitution, based on the oath that I 
took to it just over a year ago when I took office, I think 
requires me to stand up for these constitutional prerogatives 
and to show the President that unless or until he rescinds 
these unconstitutional appointments and allows them to be 
considered under regular order in the Senate, he is not going 
to enjoy the same degree of complete cooperation that he has 
had.
    Other responses might include an action in the courts, 
notwithstanding the doubt surrounding whether Senators have 
standing independently. Senators can, and I anticipate many 
will, participate as amici curiae in judicial actions that 
would be brought by other parties with standing. I think there 
is some possibility that courts could act. One of the problems 
is that the courts act relatively slowly. And it seems somewhat 
unlikely to me that the courts will issue relief in the time 
that is required, because these recess appointments will be 
valid only through the end of the year. And if the courts act 
after that, it is sort of water under the bridge, in a sense.
    Other options would include, as you have suggested, options 
that might involve de-funding these offices. Certainly in the 
case of the NLRB, we have to remember that the President can't 
fund anything on his own. He has to rely on Congress; Congress 
has the power of the purse. And the House of Representatives, 
in the first instance, holds the power of the purse. That is 
certainly an option.
    There are problems that arise out of the fact that the CFPB 
is embodied within the Federal Reserve Bank. We might want to 
look at a change in substantive law, in the fact that we have 
given this office to that entity and we have given funding 
responsibility to an entity that is not within our funding 
control.
    These are the primary levers that we use. In addition to 
all of those, I think it is important that we make sure that 
this is considered in the political discussion in the upcoming 
elections, both Presidential and congressional. Because we in 
America have to entrust that those we elect into office, 
particularly the chief executive officer position, will respect 
the limitations on their power. Ours is not a government of 
one. And for this President to pretend otherwise is an insult 
to the Constitution and it is an insult to the American people.
    Chairman Issa. Would the gentleman yield?
    Mr. Farenthold. Yes, sir.
    Chairman Issa. By the President doing the appointment on 
January 4th, not January 3rd, isn't it true that these 
individuals will enjoy a 2-year term, not a 1-year term?
    Senator Lee. That is not my understanding. So the recess 
appointments clause in Article II, Section 2 provides that 
recess appointees will remain in power until the end of that 
session of that Congress.
    So, it is interesting. We held our first session of the 
second session of the 112th Congress on January 3rd, 1 day 
before the President made these recess appointments. So it is 
my understanding that they will continue in office, assuming 
they are not invalidated in some other way, through the end of 
this session, which will last through the end of this year. We 
will start a new Congress, of course, in January of next year.
    Chairman Issa. Thank you. I yield back.
    Mr. Farenthold. I see my time has expired.
    Chairman Issa. I thank the gentleman for giving me what was 
left.
    We now recognize the gentleman from Massachusetts, Mr. 
Lynch, for 5 minutes.
    Mr. Lynch. Thank you, Mr. Chairman.
    Senator, I just want to say how pleased I am to have you 
come before the committee. I appreciate your words and your 
cooperation, your assistance with this matter.
    I do have to acknowledge, though, you are not under oath, 
so this is really just a chat. And it is one that I am 
enjoying, but we do have another panel of witnesses that I 
would like to get to. So, with all due respect, I will yield 
back the balance of my time.
    Thank you, sir.
    Senator Lee. Thank you.
    Chairman Issa. Boy, that was quick.
    Senator Lee. I would be happy to take an oath if you want 
me to, by the way.
    Chairman Issa. You know, you took an oath already, Senator, 
and----
    Senator Lee. Indeed.
    Chairman Issa [continuing]. We think that is more than 
sufficient----
    Senator Lee. That will do.
    Chairman Issa [continuing]. For ourselves and for the other 
body.
    We now go to the gentleman from North Carolina, Mr. 
McHenry, for 5 minutes.
    Mr. McHenry. I thank the chairman.
    Senator Lee, thank you so much for being here. I certainly 
appreciate your testimony. And thank you for the work that you 
are doing, the heavy lifting you are doing in your first term 
in the U.S. Senate.
    With that, I would like to yield the balance of my time to 
the gentleman from South Carolina, Mr. Gowdy.
    Chairman Issa. I knew you would get lucky from a fellow 
Carolinian.
    Mr. Gowdy. Well, Congressman McHenry has always shown 
graciousness toward me, and I appreciate his yielding. Thank 
you for that.
    Senator, how were you possibly to have vetted the NLRB 
putative appointees given when the names were submitted to the 
Senate?
    Senator Lee. Yeah, thank you for raising that, Congressman 
Gowdy.
    With regard to two of the appointees to the NLRB, their 
names were submitted just right before the Christmas holidays, 
and just days before, in fact. And, as a result, they had not 
gone through the committee process. They hadn't been vetted by 
any committee. We hadn't had time to set up a single committee 
hearing. And so that, in and of itself, ought to draw attention 
to the legitimacy of the procedures, the legitimacy of the 
constitutional analysis that led to these unconstitutional 
recess appointments.
    It really is a stretch, to say the least, to say that any 
of these are legitimate recess appointees, and particularly so 
with regard to those.
    This underscores the point, this was not justified, cannot 
be justified, by the fact that, inevitably, in any Senate 
confirmation proceeding, for any nominee, there may be some 
delays. There have been under every administration, in every 
Congress, in every Senate that I am aware of, ever. And the 
fact that that happens doesn't mean that the President can just 
ignore the Constitution. But that is especially so where they 
were given to us just days earlier, and we didn't even have 
time to vet them.
    Mr. Gowdy. So you get the names on December the 15th, and 
what, 2\1/2\ weeks later, he makes a recess appointment and 
says that the Senate is not doing its job?
    Senator Lee. That is correct.
    Mr. Gowdy. And with respect to the Republican appointee to 
the NLRB, could Senator Reid have set that for a vote? I am not 
familiar with how the Senate works, but that name had been in 
the Senate for some time. It strikes me that if Senator Reid 
were concerned about whether or not there was a quorum on the 
NLRB, he could have set that, and he did not set that.
    Senator Lee. As the majority leader, he does, in fact, 
control the Senate schedule and the Senate vote schedule, and 
he could have set that for a vote, and yet he did not.
    And that opens up another issue, which is that at any given 
time, we can even do these sorts of things through a pro forma 
session. We have on occasion approved people by unanimous 
consent in a pro forma session. And that has been done in the 
past; it could have been done at the time. The fact that it 
didn't occur hardly means that we were not available to act on 
these.
    Mr. Gowdy. Well, as I shared with you before Congressman 
McHenry was so gracious to give me some extra time, my real 
concern is, whatever we decide this analysis is, is going to 
have to be equally applicable whether we like who the President 
is or we wish we had another one. So it just strikes me that we 
have created something of a ratchet, because once you define 
it, it is very hard to expand it, once you limit it.
    And it now seems to me the rule is, we are going to give 
you 2\1/2\ weeks to vet our nominees, and if you don't, then 
you are not doing your job. And if you are out for 3 days, that 
is a recess; and if we like the laws you passed, like the 
payroll tax extension, then you are not in recess. But if we 
don't like what you have done, you are in recess, which--the 
political gimmickry--the Constitution really should be immune 
from political games.
    So can you speak to how you were in recess but yet you also 
passed this payroll tax extension upon which the Republic hung 
in the balance, if you listen to the rhetoric? How could you 
pass that but yet still be in recess?
    Senator Lee. Well, of course, we couldn't. We had to be 
able to act, and we did, in fact, act. And we acted on December 
23, 2011, to pass that into law.
    The President demanded that Congress act. The President 
subsequently praised the Congress for moving into action 
quickly. He signed that legislation into law promptly. He 
recognized the legitimacy of Congress' actions, notwithstanding 
the fact that they were conducted, at least on the Senate side, 
in a pro forma session on December 23rd; notwithstanding the 
fact that previously we had anticipated that there might not be 
any formal business conducted, there was. And that indicates 
the fact that we were, in fact, open for business, as we were 
required to be under the Constitution, not having received the 
consent of the House of Representatives to adjourn for a period 
of more than 3 days.
    This emphasizes my broader point, which is that my concern 
is neither Republican nor Democratic; it is neither liberal or 
conservative. This is politically ecumenical. This issue is 
simply an American one, one rooted in the rule of law and the 
U.S. Constitution to which we have all taken an oath. It is 
that we can't, as an institution, as a country, afford to allow 
one person to exercise power that does not properly belong to 
him, that the people have not properly given him. And that is 
what happened here. So I will be just as hard on any Republican 
President who dares try this nonsense as I am on this 
President.
    Mr. Gowdy. Thank you, Senator.
    Thank you, Mr. Chairman, and the gentleman from North 
Carolina.
    Chairman Issa. I thank the gentleman.
    We now recognize the distinguished lady from the District 
of Columbia, Ms. Norton, for 5 minutes.
    Ms. Norton. I thank you, Mr. Chairman.
    And I want to thank Senator Lee for appearing today.
    I just want to say, I might have found the discussion 
edifying had there also been present a Senator who supported 
the appointments during this recess, since all Senators are 
known, are notorious for jealously guarding their institutional 
prerogatives.
    But absent that, Mr. Chairman, I would just as soon get on 
to the next panel.
    Chairman Issa. I thank the gentlelady. I will note that we 
took all Senators who asked to be here.
    And, with that, we recognize the gentleman from Tennessee 
for 5 minutes, Mr. DesJarlais.
    Mr. DesJarlais. Thank you, Mr. Chairman.
    And thank you, Senator, for being here. Unfortunately, I 
have a conflict with another hearing, so I am going to yield my 
time back to the good chairman, Mr. Issa.
    Chairman Issa. I thank the gentleman.
    Now it is Tennessee and California that are teaming.
    Senator, I did want to follow up on a couple of questions. 
You mentioned earlier Teddy Roosevelt's famous appointments. 
But those were specifically when the Congress went gavel to 
gavel; in other words, during the anticipated historic change 
of sessions. Did the President have that option in this case? 
Or could he have had that option to do it on January 3? Because 
wasn't there, in fact, a moment between sessions?
    Senator Lee. Well, I don't regard there to have been an 
opportunity for him to issue an actual recess appointment. But 
I should point out that that hypothetical does get at a 
different set of facts. That deals with what you might call an 
intersession recess appointment, as opposed to----
    Chairman Issa. Isn't that one in which the court has 
spoken?
    Senator Lee. Well, that is one in which a court has spoken. 
I believe you might be referring to the 11th Circuit decision 
in that regard.
    Chairman Issa. Right. But that would be one in which the 
President would know the likely outcome, at least historically, 
right?
    Senator Lee. Perhaps. In a different set of circumstances, 
if they otherwise would support the conclusion that we were in 
recess for purposes of the recess appointments clause. But that 
would be called an intersession appointment, and this was an 
intrasession recess.
    Chairman Issa. But the President clearly waited. He waited 
until January 4th. It didn't come to his mind. The opinion he 
sought didn't just come in on January 3rd. He, with malice and 
forethought if you will--maybe malice is a little unkind. But 
with forethought and planning, he planned to do it after 
January 3rd, from all indications.
    Senator Lee. I strongly suspect that this was not an 
arbitrary decision on the part of the President. He is a 
careful person who is familiar with the Constitution, and I am 
certain that this was deliberate.
    Chairman Issa. Isn't he sufficiently familiar with the 
Constitution that he had the opposite opinion when he was in 
the Senate that he now has as President?
    Senator Lee. I think he got it right the first time and 
should have stuck with his first instinct.
    Chairman Issa. Presidents often say they grow in office. 
And perhaps he simply grows out of the office of the Senate and 
his respect for that President body, which is, quite frankly, 
my personal opinion that it is a lack of respect for the body 
he once belonged to.
    Let me go through just one or more points. As a House 
Member, not having served in the Senate--they let me come over 
there once in a while and lobby you all; but that is about it--
you have some interesting rules that are a little different 
than ours. First of all, a motion to adjourn is still a high 
standard or a low standard, if you will. In other words, it is 
immediately taken. So a motion to adjourn is always in order. 
And could, in fact, at any time, any Member could move to 
adjourn, even during the pro forma session, unless there was a 
specific exemption agreed to; right?
    Senator Lee. That is correct.
    Chairman Issa. So any Member of the Democratic Party, not 
just Senator Reid, could have moved to adjourn in order to 
create a legitimate recess; correct?
    Senator Lee. That is correct. I suppose that doesn't 
account for the need that they would have to get permission 
from the House to adjourn for more than 3 days. But separating 
that question out, yes.
    Chairman Issa. But of course, Senator Reid could have put 
no one in the chair on the 3rd day; isn't that correct?
    Senator Lee. Yes.
    Chairman Issa. No power could have forced him to be in the 
chair?
    Senator Lee. I am not familiar with any court or any 
precedent from the Supreme Court that would have led to a court 
injunction telling Senator Reid he had to do that.
    Chairman Issa. So every single Member of the majority in 
the Senate, including Senator Reid, had the ability to create a 
different set of circumstances and did not?
    Senator Lee. Yes, sir.
    Chairman Issa. Additionally, anything that was passed was 
passed by unanimous consent, correct?
    Senator Lee. Correct.
    Chairman Issa. So the fact is the December 23rd vote, any 
Member of the vote Senate--yourself included--could have come 
and taken that down. It was an affirmative decision that that 
agreement was going to happen. It wasn't an accident. It wasn't 
like the UC was a surprise, and people just weren't there.
    Senator Lee. That is correct. Any one of us could have 
objected and stopped that from proceeding.
    Chairman Issa. Now you are a little different in the Senate 
than the House. I know that because I have worked with Senate 
staff. Senate staff vets, as I understand, every one of these 
UCs. And unless the Senate staff responsible for the Senator 
either speaks to the Senator or makes that commitment for some 
reason on behalf of the Senator, UCs don't happen, right?
    Senator Lee. That is correct.
    Chairman Issa. You have the process of holds, if you will. 
Everything starts with a hold, and then you release them?
    Senator Lee. Yes.
    Chairman Issa. So if there had been an actual request for a 
vote during the pro forma session, a request for a UC, that 
would have come up, each of these appointees could have come up 
as a request for a UC and a Member would have had to show up 
physically and object to that appointment. And Senator Reid 
held no such vote.
    Senator Lee. An objection could have been made, that is 
correct.
    Chairman Issa. But a Senator would have to be there to make 
the objection?
    Senator Lee. Well, that is probably a discussion for a 
different day. An objection probably could be made. A hold 
probably could be imposed on a unanimous consent request 
without actual physical presence, but the objection would 
likely have triggered a requirement for a physical presence.
    Chairman Issa. My borrowed time has expired. But you have 
been very illuminating.
    With that, we go to the gentleman from Virginia. And before 
we go to Mr. Connolly, I would ask unanimous consent that 
Democratic objections to recess appointments, which is a five-
page document, be placed in the record, including the January 
24, 2012, quote from the gentleman from Virginia, Mr. Connolly.
    Without objection, so ordered.
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    Chairman Issa. With that, the gentleman is recognized for 5 
minutes.
    Mr. Connolly. I thank the chair. And the chair is right in 
introducing into the record my longstanding view that recess 
appointments by Presidents of both parties have frankly long 
been abused. I don't believe that the Constitution envisioned 
recess appointments being routine things. They were designed 
for a time when Congress was not in session for long stretches 
of the calendar.
    But that requires bipartisan cooperation to fix that 
problem. It has nothing to do with this President, per se. It 
is a longstanding institutional and constitutional issue. I 
would hope we could find bipartisan common ground. So I 
actually find myself sharing many of your misgivings, Senator 
Lee, about a recess appointment.
    But having said that, I have listened respectfully to your 
point of view, and I respect it. I hope you will listen to 
mine.
    I believe that a statement by 44 Republican Senators in the 
U.S. Senate announcing that they are going to try to thwart the 
implementation of a duly passed law--the Constitution 
envisioned how a law gets passed. It never envisioned that you 
got a second extra constitutional bite at the apple to thwart 
its implementation when you didn't have the votes to defeat it. 
And I believe that, frankly, that letter precipitated this 
issue and that you got what you deserved. And it set us all 
back, frankly, for those of us who have, as the chairman just 
indicated in introducing into the record, misgivings about 
recess appointments as a separate issue.
    And so I guess, with all due respect, I consider this a 
rebuke because I think it is an extraordinary thing, a priori 
to announce no matter what, no matter the virtues of the 
appointees, no matter that fact that we have to respect that a 
law was duly passed and signed into law by the President of the 
United States as the Constitution calls for, we are going to 
thwart it. We in advance are announcing we are going oppose all 
appointments to prevent the implementation of that provision of 
the law. And I just think that is wrong. You win; you lose, 
fair or square.
    And you have indicated that many of your constituents are 
nonplussed about this action. I would hope they would be 
equally nonplussed at the extra constitutional decision by you 
and so many of your colleagues to thwart a duly implemented 
law. That is my opinion, and I yield back.
    Chairman Issa. Before yielding back, would the gentleman 
also want to ask about the NLRB? You dealt with one. Did you 
have questions on the NLRB appointments?
    Mr. Connolly. I don't have any questions, Mr. Chairman. I 
just issued my statement. But I would say the same applies 
frankly to that as well.
    Chairman Issa. The gentleman yields back.
    We now go to the gentleman from Michigan, Mr. Amash, for 5 
minutes.
    Mr. Amash. Thank you, Mr. Chairman.
    I simply want to thank one of my favorite Senators, Senator 
Lee for being here.
    And I am going to yield my time to Mr. Guinta.
    Mr. Guinta. I thank the gentleman.
    I thank the Senator for being here this morning. Two points 
for the record. I think he is here first because he asked to 
speak on the subject matter, and we want to hear what he has to 
say. Second, he has a rather unique perspective on these issues 
with his background and having opportunities to clerk in the 
Third Circuit Court as well as the Supreme Court, is my 
understanding. So I thank you for your comments.
    I want to be clear. I don't support what the President did. 
I have looked at this issue. I have spent quite a bit of time 
looking at precedent, and I think this President in this 
circumstance overstepped his authority.
    My understanding--and please correct me if I am wrong--is 
that it is the Senate and only the Senate--not the President of 
the United States--that has the capability to determine when 
the Senate is in recess. Is that your understanding?
    Senator Lee. Yes. That is my understanding based on the 
text of the Constitution, based on the history of the 
Constitution, its original understanding, and on custom and 
practice as it has evolved over the last two centuries. We are 
expressly given the power, as is the House, to determine the 
rules for our own procedure and internal governance. And we do 
that.
    Mr. Guinta. So the President is relying, in making this 
recess appointment, on the Office of Legal Counsel's 
justification in a memo that they issued. And their memo 
essentially said that the OLC effectively asserts that the 
President may unilaterally determine if and when the Senate is 
in recess for purposes of exercising his recess appointment 
power.
    So my read is that the President is looking at his legal 
counsel's opinion that says he can decide when the Senate is in 
recess. However, there is clear precedent that states, only the 
Senate has that authority. So that is problem number one with 
this process. The other two points I would like to make is that 
back in 1993 during the Clinton administration, the Department 
of Justice filed a legal brief in Federal court for the 
District of Columbia arguing that unless a recess lasted for 3 
days, a President could not make an appointment, more than 3 
days. The third point I would make is, in April 2010, then-
Solicitor General Elena Kagen acknowledged before the U.S. 
Supreme Court that ``the Senate may act to foreclose the 
President's recess appointment power by declining to recess for 
more than 2 or 3 days at a time over a lengthy period. 
Presidents have not, in recent decades, made recess 
appointments during intrasession recesses lasting fewer than 3 
days.''
    So there is most recent opinions and precedents set by 
those who would likely support the philosophies of this 
President who have acknowledged that what this President is 
doing is wrong. And to speak to what the gentleman from 
Virginia mentioned is that this should be about appropriate 
powers of the executive branch. It should not be about 
Republican or Democratic philosophies. It should be about the 
country and what is good for the country. And I believe that 
all of us in the legislative body as well as in the executive 
need to adhere to the precedents and the laws and the rules 
that we have established. And without doing that, these bodies 
cannot gain greater credibility with the country. And I would 
submit that it makes sense for the President of the United 
States to acknowledge in this circumstance he erred and that he 
should resolve it to reinstate the faith in the process that we 
have.
    Senator Lee. If I can respond to that. Thank you very much, 
Congressman.
    Yes, I share your concerns. And I have reviewed the Office 
of Legal Counsel's 23-page single-spaced memorandum. It is well 
written. It is well researched in the sense that it points out 
the precedents. But it reaches the wrong conclusion, and it 
reaches a conclusion that is at odds with the very precedents 
to which you refer and to the very logical positions to which 
you refer. And as I am responding to that, I would also like to 
respond simultaneously to Congressman Connolly's point because 
I think they kind of lead to the same conclusion here.
    I understand and I share the frustration that so many 
Americans have expressed over the fact that there are delays at 
times, sometimes long delays, sometimes delays that don't get 
resolved until after that Congress is over or after that 
President is no longer in power. That is frustrating, 
especially for those of us whose names are on the line to be 
confirmed.
    As frustrating as this is, constitutional government is 
necessarily, by its very nature, frustrating. It was designed 
to be frustrating in the sense that it was designed to make 
sure that it wasn't so efficient that we just passed laws 
really quickly. Efficiency doesn't always lead to liberty, and 
frequently, it leads to exactly the opposite position.
    So the fact that this process is frustrating, the fact that 
there are at times delays, the fact that the delay has at some 
times been abused--even though it is the prerogative of the 
Senate to do that--does not and cannot ever justify 
circumventing the Constitution. And just saying, this is really 
necessary; this is really important. I am, therefore, going to 
do this. At every turn, when we have tried that in this 
country, it hasn't ended well. And I am determined not to allow 
that to happen here. I am not about to stand idly by as this 
precedent gets established knowing full well that it could and, 
unless we do something about it, it will be abused in the 
future not just by Democratic Presidents but by Republican 
Presidents.
    Mr. Guinta. I thank the Senator for his comments and I 
thank the gentleman from Michigan for yielding.
    Mr. McHenry [presiding]. Mr. Welch of Vermont.
    Mr. Welch. Well, I thank Senator Lee for being here. I just 
have a short statement.
    You know, there is an air of unreality about this for me, 
and I find this extremely discouraging. Mr. Guinta is right. 
People want us to abide by the rules.
    Senator, you were making a very passionate statement about 
the rules. But this institution of Congress and the House and 
the Senate is seen rightly by Americans as totally 
dysfunctional, and we are in the process of proving the point.
    I mean, there is a fundamental difference between 
deliberation and destructive delay. That is my view, and I 
think it is the American people's view. The rules that we work 
by in the House, the rules that you work by in the Senate, 
those are designed by Senators and House Members, and they suit 
our interests. They don't get elevated to the level of 
constitutional rights. They are rules that oftentimes serve the 
interests of the majority party in both bodies.
    The problem we are having here is Democrats can't work with 
Republicans in either body. The Senate, I believe, is seen as 
having a series of procedures that have one purpose, and that 
is to delay and not get to an answer to move forward on the 
business that America needs to be done. I mean, it is an 
astonishing spectacle what we are doing in this Congress in 
refusing to do the people's business. We haven't passed a 
budget. And I don't point the finger of blame at one party or 
the other. This institution just isn't working.
    I mean, it has had a history in the past where it has been 
able to make decisions. So when we have what sounds, to me, 
like a very academic discussion--and I put myself in the seat 
of a constituent of mine who is wondering, what is it we are 
talking about; we have not passed a budget. That is 
disgraceful. And 2 years ago when the Democrats were in the 
majority, the finger of responsibility was pointed by my 
colleagues on the Republican side at our failure to do it. Now 
the Republicans, who are in the majority at least in the 
House--not in the Senate but have an active and powerful 
minority, we haven't been able to pass a budget. This is very 
destructive.
    So, at the end of the day, you may be right in your legal 
argument, but it is not going to move this country forward, 
whether you are right or President Obama is right. So I just 
think we have to move past these procedural maneuvers that we 
create to allow us to assert our will and make decisions, do it 
in an up-or-down vote, allow there to be clarity for the 
American people where each of us stands. If they don't like the 
vote that we made, they have the opportunity in the next 
election to send somebody else here to do it. So thank you for 
being here, but I don't think we are getting anywhere.
    Senator Lee. If I can respond to that, Congressman Welch. I 
appreciate your comments. Your concerns are very legitimate, 
and I share very many of them.
    Let me reemphasize that there are delays built into the 
system. Part of the delay that is built into the system is 
constitutional. Part of it is based on the rules of each body, 
and the rules of each body are of course constitutionally the 
prerogative of each body.
    The President of the United States, when he gave his State 
of the Union address last week in your Chamber here, told us 
that what he would like is to see a rule change and a policy 
change in the Senate that will lead to an up-or-down vote for 
each nominee within a finite period of time. That, of course, 
is ultimately a decision for the Senate to make. But I think 
that is where the debate and discussion over this ought to be.
    In other words, the frustration that he has, that Members 
of this body have, that Members of the Senate have or the 
American people in general have ought to be directed toward a 
discussion about whether or in what way the Senate might change 
the rules of its procedure and not toward saying, we are 
frustrated with those rules, we are frustrated with the way 
that they manifested themselves in delay, and we, therefore, 
want the President to ignore the Constitution. That final 
conclusion isn't the natural logical legitimate product of 
saying, we are frustrated. We ought to have a discussion about 
the rules themselves and not simply capitulate and say, let's 
give up, and the President can violate the Constitution if he 
wants.
    Mr. Welch. Thank you, sir.
    I yield back.
    Mr. McHenry. The gentleman yields back.
    Mr. Guinta is recognized for 5 minutes.
    Mr. Guinta. Thank you, Mr. Chairman.
    I would just simply add that while I don't disagree with 
the gentleman from Vermont's comments relative to let's focus 
on the legislative side on action and moving the country 
forward relative to policy, it also is equally important that 
we reiterate to the country that we are following our own 
rules. I mean, I think we teach our families, our children that 
rules are important. I get to go home on weekends and see my 
third grade daughter's basketball games. And there are rules. 
And it is a very important lesson to teach our children to 
abide by them. And if we simply can't do it as--what I think is 
an incredibly important body, the Congress and the President, 
then what kind of message is that sending to the Nation?
    So I certainly appreciate my colleague's position relative 
to the legislative requirements of both bodies. And I would 
agree with them and urge both bodies to work together on a 
thing like a budget, the appropriations bills. By the way, 
maybe you could remind the Senators that we did, in the House, 
pass a budget last year, and we are going to pass another one 
this year. And we would love to have the Senate respond. But I 
would like to yield the remainder of my time back to the chair.
    Mr. McHenry. I certainly appreciate my colleague yielding.
    You know, it is interesting, my colleague on the other side 
of the aisle said, your legal argument might be right. It is 
sort of an interesting point of debate. What's the Constitution 
among friends, right? That old saying.
    Let me ask you a couple of basic questions: How many 
Republicans are there currently in the U.S. Senate?
    Senator Lee. 47.
    Mr. McHenry. And 47 Senators, is that a majority of that 
body?
    Senator Lee. No.
    Mr. McHenry. Interesting. Okay. After the 2008 election--I 
know you weren't a Senator--but weren't there 60 Democrats in 
the U.S. Senate?
    Senator Lee. Yes.
    Mr. McHenry. And if you have 60 of any Senators together, 
do they even have to speak to the other 40 Senators in the 
elevator?
    Senator Lee. Not much.
    Mr. McHenry. Right. So let's just understand historically 
where this President has been. He had a supermajority in the 
U.S. Senate after the 2008 election. He was able to pass the 
stimulus through the House, through the Senate. Didn't get a 
single vote from Republicans in the U.S. House. It became law. 
This President has had a majority in the U.S. Senate for 4 
years. He has had a majority--a supermajority in the U.S. 
House. Well, let me restate that. He had 59 percent of the U.S. 
House after the 2008 election. So this idea that he is 
complaining about the Congress' inaction is pretty absurd. So 
let me go to the CFPB.
    The President's lawyers said that there is a great risk, a 
litigation risk, that anything the CFPB does would be 
challenged based on the constitutionality of this appointment, 
anything the National Labor Relations Board does could be 
challenged legally based on this President's, I think, 
unprecedented action. You know, looking at that litigation risk 
and the amount of uncertainty that creates for small 
businesses, even big businesses and the impact it has on the 
economy, that is sort of a net impact of this debate that we 
are having. Now I know you are a constitutional scholar, but I 
also understand you represent the folks in Utah who are 
concerned, like my constituents, about jobs. This does have an 
impact on the American people in a real way. It is not some 
academic debate.
    But you referenced the fact that the Senate is in session 
every 3 days when you are in pro forma session. If the House 
doesn't agree to adjourn, why does the Senate meet every 3 
days? Where does that come from?
    Senator Lee. Article I, Section 5, of the Constitution 
provides that we may not adjourn without the consent of the 
other body for a period of time longer than 3 days.
    Mr. McHenry. Okay.
    Senator Lee. And because the House of Representatives 
didn't grant us to adjourn for a period of time longer than 3 
days, we had to continue to meet every 3 days.
    Mr. McHenry. Okay. So when does this date back to, this 
action by the Senate, in practical impact. I know it was 
written----
    Senator Lee. The last roll call vote on the floor of the 
Senate prior to the Christmas holidays was taken on December 
17th, as I recall.
    Mr. McHenry. Okay. So for the next almost month, it was pro 
forma session?
    Senator Lee. Correct.
    Mr. McHenry. As it was in the House?
    Senator Lee. Correct.
    Mr. McHenry. Talk about this litigation risk, the amount of 
uncertainty that these actions will create in our economy.
    Senator Lee. Well, at a time when unemployment is at around 
9 percent and at a time when one of the things that is chilling 
our economy and chilling the creation of growth of jobs is 
uncertainty and at a time when Americans and American 
businesses face regulatory compliance costs at an astounding 
rate of about $1.75 trillion a year, almost equal to the 
collective tax burden of the American people, the one thing 
that we don't need is more uncertainty in our regulatory 
structure. The fact that American businesses may become subject 
to an order issued by the NLRB or the CFPB at any time that may 
or may not be valid, that could be suspect in terms of their 
validity and, therefore, subject to litigation, litigation that 
would be costly and would prolong the uncertainty associated 
with their orders but litigation that would become absolutely 
necessary because in many instances, it might be a make-or-
break moment for the company, this is exactly the kind of thing 
that will make our already dismal unemployment problem 
substantially worse. So this has real ramifications. This is 
not a hypothetical injury. This is not an abstract problem. 
This is a problem that affects real Americans, who are just 
struggling to get by, struggling to find jobs, struggling to 
find full employment and good compensation. And this compounds 
that problem many-fold.
    Mr. McHenry. Thank you, Senator Lee. And thank you for your 
testimony.
    Just to mark this down as a Member of the House, you know, 
we always have a bit of--we chafe a bit at the actions of the 
Senate or the inactions of the Senate. But that is not a new 
thing, nor is that a partisan thing. It is as old as the 
Republic itself. The Senate is designed to be inefficient; and 
by God, it lives up to that expectation.
    So, with that, I recognize Mr. Clay, the gentleman from 
Missouri, for 5 minutes.
    Mr. Clay. Thank you, Mr. Chairman.
    I really have no questions for the Senator. Thank you for 
coming today.
    But let me say that I do have an observation about the 
process known as recess appointments. Let me say, thank God for 
recess appointments, that we were able to appoint Richard 
Cordray as the leader of the CFPB because it is the law. Dodd-
Frank is the law of the land. And it is necessary that we 
observe the law. We are a country of laws. And the function of 
the CFPB is to protect American consumers, and to have to 
succumb to the will of a minority of Senators who don't want to 
see this law implemented, the American people know what you are 
doing.
    And pretty much this President has pulled the wool off of 
what you are trying to do. We know you are trying to thwart any 
achievement by this administration for political purposes. And 
so let me again restate, thank God for recess appointments and 
also for the NLRB, so that they can be up and running and 
functioning as a full body to protect the workers in this 
country.
    So, Mr. Chairman, I have no questions, and I yield back the 
balance of my time. And it doesn't require a response.
    Senator Lee. Mr. Chairman, if I could respond to that.
    Mr. Clay. It doesn't require a response, Mr. Chairman.
    Mr. McHenry. Well, I certainly appreciate it. And I think 
the witness has an opportunity to answer.
    Senator Lee. Thank you, Mr. Chairman.
    I appreciate the fact that we have laws. And I need to 
point out that from time to time, Congress will pass a law and 
then not fund the office in charge of enforcing that law. It 
actually happens with some regularity. It has happened when 
Republican Congresses have enacted one law and subsequent 
Democratic Congresses have refused to fund it. The fact that a 
law is created but not funded or the subject of a full 
appropriations by a subsequent Congress is not lawless. It is 
part of the democratic institution.
    And to give you an example, in your home State of Missouri, 
Congressman Clay, it is urban legend, at least, that it was 
once legal to shoot a Mormon in Missouri. I don't know whether 
that was in fact embodied in a statute. It might just reflect 
the extermination order issued by Governor Lilburn Boggs 
indicating that all Mormons, members of my faith, could be 
exterminated. I am grateful that that wasn't funded, that that 
wasn't executed.
    Now this is a very different kind of law than that one. But 
the fact that something is put into law one day doesn't 
eternally automatically inexorably obligate subsequent 
legislative bodies to fund activities occurring pursuant to 
that very law. And that is exactly what it means to be in a 
constitutional republic. We elect people. Those people pass 
laws, and then we make decisions about how the government is to 
be funded.
    Mr. McHenry. If my colleague wishes to respond, he still 
has time.
    I certainly appreciate it. And I would say to my colleague, 
if the chair may say, I will enjoy reciting your quote today 
when we have a Republican President. And perhaps that will 
happen. Who knows. But I certainly appreciate my colleague's 
indulgence there.
    With that, Mr. Lankford is recognized for 5 minutes.
    Mr. Lankford. Thank you, Mr. Chairman.
    Senator, thanks for being here. And I can understand how 
the President could be frustrated with the Senate. You, as a 
Member of that body, I am sure you have even more frustration 
with the Senate than even we do in the House, if that is even 
possible.
    Senator Lee. It is.
    Mr. Lankford. After 1,000 days of waiting on a budget to 
come out of the Senate, we are all frustrated with the Senate 
and trying to figure out what is going to happen there.
    The question revolves around, do the ends justify the 
means, though? Can we say, CFPB is going to do a good thing, so 
though I know it is not appropriately and constitutionally 
legal, we will get something good at the end, so the ends will 
justify the means. Can we do that in a constitutional republic?
    Senator Lee. No, we can't. The Constitution is all about 
the means. That is the whole reason for having a Constitution. 
It determines the means by which we act. No ends can justify a 
willful disregard for the restrictions of the Constitution.
    Mr. Lankford. Well, let me ask you a followup question 
then: Who gets to define what a recess is or what adjournment 
is? Does the executive branch define for the legislative branch 
what is an adjournment and what is a recess? Or does the 
legislative branch define what is an adjournment and what is a 
recess? Who gets to pick that?
    Senator Lee. The Senate gets to decide when it is in 
recess.
    Mr. Lankford. So the President can step in and say, I now 
declare you in recess?
    Senator Lee. That is correct. He doesn't control our part 
of the government, as much as he might wish it would be true, 
as much as probably every President might have wished would be 
true.
    Mr. Lankford. So, in 2007, when Senator Harry Reid kept the 
Senate in pro forma session to prevent the Bush administration 
from appointing people in a recess appointment, and the Bush 
administration acknowledged that by not appointing people, 
saying the Senate has defined they are not in recess, so they 
are not in recess, when this administration says, no, I don't 
accept the Senate's definition of recess, we are going to 
redefine recess; what precedent does that set?
    Senator Lee. Well, it sets a new precedent, one that I fear 
could easily turn into a one-way ratchet in which subsequent 
Presidents, Presidents of both political parties, will be 
unwilling to retreat from that new high watermark established 
as a Presidential prerogative. That is what concerns me here.
    Mr. Lankford. That is what concerns me as well.
    The President has also said that they have communication 
from the Senate so it is a recess. So, basically, if the Senate 
didn't talk to me and send me messages, did any bills pass 
between the 17th of December and the 22nd of January? Was there 
any communication between the Senate and the President?
    Senator Lee. Yes, there was. And in fact, there was very 
significant piece of legislation passed, one that the President 
urged the Congress to pass, on December 23rd that dealt with 
the payroll tax holiday extension.
    Mr. Lankford. Correct. So the President's statement that 
there is no communication happening is not accurate; there was 
communication happening. These pro forma sessions did allow for 
communication; in fact, did allow for business. A statement was 
made, this is not for business purposes. Obviously, the payroll 
tax extension did pass. It seems like business to me.
    Senator Lee. That assertion is neither factually accurate 
nor correct as a matter of constitutional law.
    Mr. Lankford. Did the Senate ever have hearings on the 
candidates of NLRB, all three of them?
    Senator Lee. No, it did not. And as for two of them, there 
was no time where they could have even possibly convened such a 
hearing.
    Mr. Lankford. So the advice and consent, not only was there 
not even a release of the names; there wasn't even a 
possibility of a hearing. So to say this is a recess 
appointment, you have no possibility for a hearing. So this 
wasn't just a matter of, I submitted them earlier; you hadn't 
acted on them. This was a matter of, oh, while you are out of 
town, I am just going to put two people into office for the 
next 2 years?
    Senator Lee. That is correct.
    Mr. Lankford. I have a letter from the Associated Builders 
& Contractors, which I would like to enter into the record, if 
that is possible, Mr. Chairman.
    Let me read one statement here. This is from the Associated 
Builders & Contractors, ``Not only will this radical NLRB anti-
worker and anti-business actions further damage prospects of 
investment in job growth, but questions about the NLRB's 
authority to act will invite litigation and ambiguity at a time 
when we need it the least.''
    I would like to ask unanimous consent that this letter be 
entered into the record.
    Mr. Platts [presiding]. Without objection.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] 73163.034
    
    [GRAPHIC] [TIFF OMITTED] 73163.035
    
    Mr. Lankford. I have serious issues, which I can hear from 
you as well, because of the precedent that this sets. It sets a 
precedent that a President at some future date can reach into 
the Senate and define when they are on recess and when they are 
not and who he can appoint and who he cannot and extend them in 
a January timeframe to try to get 2 years.
    With this precedent, if it stands, I don't see anything in 
the way from some future Memorial Day weekend the President 
saying, the Senate is not communicating with me over this long 
weekend. I am going to fill every court vacancy across the 
country. And they will be there for the next 2 years, and you 
can't stop me. Do you see anything in this that would stop 
that?
    Senator Lee. Logically, it would be a very short hop, 
indeed, from the OLC memorandum justifying or purporting to 
justify these recess appointments and the kinds of recess 
appointments that you described occurring over a weekend.
    Mr. Lankford. Okay.
    Chairman Issa. Would the gentleman yield for one quick 
question?
    Mr. Lankford. Yes, I absolutely will yield.
    Chairman Issa. Mr. Connolly sort of berated and told you of 
his disapproval. Who would have or could have--not the 44 or 
the 47--who could have in fact held hearings--particularly 
let's talk about the NLRB. Who schedules those?
    Senator Lee. The committee.
    Chairman Issa. And the committee is controlled by?
    Senator Lee. Democrats.
    Chairman Issa. And did they schedule a hearing on NLRB 
appointees?
    Senator Lee. At least not with respect to the two that were 
nominated on December 15.
    Chairman Issa. And who could have scheduled the vote on the 
first one?
    Senator Lee. Democrats in the Senate.
    Chairman Issa. And it wasn't the 44 that stopped that, was 
it?
    Senator Lee. Correct.
    Chairman Issa. Thank you.
    I yield back.
    Mr. Platts. The gentleman's time has expired.
    I yield myself 5 minutes for the purpose of questions.
    Senator Lee, I certainly your appreciate being here with us 
and your leadership on this important issue. My colleague from 
Oklahoma concluded with the main focus of my questioning in 
that the precedent here is pretty dramatic, if we do not undo 
what has occurred.
    It is my understanding that the Department of Justice 
memorandum that in essence said that the President has a 
unilateral authority or ability to decide when you, the Senate, 
are in or isn't is unprecedented in this sense. Is that your 
understanding as well?
    Senator Lee. Yes. I am aware of no precedent anywhere. And 
there was none sited either in the OLC memorandum or in any 
other source that I am aware of identifying any other 
Presidential recess appointment occurring under this set of 
circumstances.
    Mr. Platts. And I think in your testimony, you emphasize 
that this isn't about partisan politics. This is about the 
institution of the Senate and, probably most importantly, the 
checks and balances that our Founding Fathers so wisely 
included in the Constitution in protecting the American people 
from, in essence, tyrannical rule and that that be understood 
here because you know today obviously the partisan nature of 
Washington and the media's focus on that can maybe shift the 
focus here from this is truly about the Constitution being 
upheld. And if we are not diligent in ensuring--in this case, 
the Constitution is upheld--we set a precedent, as the 
gentleman from Oklahoma said, that why, just in this instance, 
why isn't it, hey, you adjourned on a Thursday. We could plan 
on coming back Monday. And the President, whomever would be in 
that office in the future, say, hey, you are out of session; 
you are in recess for the weekend. I can appoint whomever I 
choose. That would eliminate the checks and balances and the 
advice and consent.
    Senator Lee. Yes. That is exactly right. And this is what 
the Founding Fathers had in mind when they decided--they 
considered but decided against giving the President the 
unilateral authority to appoint nominees without Senate 
confirmation because ``The people will think we are leaning too 
much toward monarchy.'' We were getting away from a system of 
monarchy in Great Britain. We didn't want one here, and that is 
why we did this. You are absolutely right in suggesting this is 
a slippery slope and that in the future, regardless of whether 
it is a Republican or a Democrat in office, this could become a 
problem, and it is a problem that could lead to the rendering a 
nullity or a virtual nullity the Senate's confirmation 
prerogative.
    Mr. Platts. And while I certainly respect my colleague from 
Missouri's statements about his opinion that the Senate's 
politically motivated minority Members, Republican Members in 
blocking--even if that was the case, although I think the fact 
that there was not even a hearing held on the two nominees of 
the NLRB appointees, that even if that was the case, that would 
be the prerogative of a Senator. And ultimately, the public 
would decide whether that is a responsible approach or not. But 
it is still the constitutional right and prerogative of the 
Senator to block a nominee for whatever reason they choose. And 
ultimately, the voters will decide whether they were 
responsible in the conduct they engaged in. But it is not the 
President's prerogative to say, well, I am going to usurp that 
authority and unilaterally just do what I believe, you know, 
what I want to do.
    So, Senator Lee, I again want to thank you for your 
leadership on the issue. And your constitutional expertise and 
knowledge that is so important to this debate and the focus 
that this is not about partisan politics. This is about the 
Constitution being upheld and not allowing a dramatic, wrongful 
precedent to be set that could have, you know, lasting 
implications for the checks and balances of our governing 
process here in America.
    So, with that, I will yield to the gentleman from Michigan, 
Mr. Walberg, for the purpose of questions.
    Mr. Walberg. Thank you, Mr. Chairman.
    And thank you, Senator Lee, for being here. I appreciate 
your service and I appreciate you being outspoken on 
constitutional issues of importance.
    With no ill intent toward you and your service because, as 
I said, I appreciate your activity. But it has been said much 
by those of us Members of the People's House how frustrated we 
are with the do-nothing Senate, a literal do-nothing Senate; 
1,007 days without passing a budget, without dealing with over 
30 bills that we have sent for jobs purposes, and then 
listening to some of the cynical pandering by some of my 
colleagues on the other side of the aisle saying that we are 
not doing anything with jobs. It is frustrating. And I go back 
to my district, and I hear the frustration of my people, who 
are frustrated not simply with Democrats but with Republicans, 
with us all, that things aren't getting done.
    It is challenging to take that, knowing that we are 
attempting to do it. So I can certainly surmise how the 
President might feel when he sees his Senate not providing 
affirmation to his appointments, confirming them and letting 
them go on with what his purpose is, what his intended process 
is about and what his objectives are. I can understand that.
    But here in the People's House, we understand more maybe 
than any other branch what that means, that we are given the 
pleasure, privilege, honor, and duty of representing the people 
according to something more than just whims and wishes. And I 
would love to say to the people back in my district at certain 
times when I am not thinking clearly, well, we will just go on 
and do it ourselves. But the Constitution doesn't allow that. 
You made that very clear.
    Senator Lee, could you explain to us as clearly as possible 
why there is an important process called confirmation that only 
the Senate is given to do and what important outcomes that has 
for the people of this great country under the Constitution 
established before them.
    Senator Lee. Executive branch officials, particularly in 
this day and age and including and in particular these 
nominees, hold positions that wield enormous authority, law 
enforcement authority and, in some instances, somewhat 
regrettably, in my opinion, wholesale policymaking authority 
that can almost be likened to the authority that we wield as 
legislators.
    But regardless of how you feel about the underlying 
statutes that give enormous policymaking authority to executive 
branch officials, they wield tremendous authority, as do the 
Federal judges, who also have the go through the confirmation 
process. So the Founding Fathers felt that it was absolutely 
imperative that these nominees receive in all instances where 
the Senate was not in recess, for purposes of the recess 
appointments clause, the rubber stamp of at least one House of 
Congress. And for whatever reason, they chose to give that to 
the Senate. And because they did, we take seriously our role to 
make sure that the President's nominees get vetted, to make 
sure that any who do not have the support of those voting in 
the Senate don't get confirmed and don't move on.
    I think the best way I can summarize my answer to your 
question is just to say, it is important because it is what the 
Constitution requires. We have to follow the Constitution. Even 
where it is frustrating, even where it doesn't make sense to 
us, even where it might thwart the objectives of our President, 
we have to follow them. And when we don't follow them, we set a 
dangerous precedent. Because if we are willing to ignore them 
for one purpose or another, for the political convenience of 
the President or someone else, then we ourselves remain 
vulnerable in every other area. We rely on the Constitution to 
protect our free exercise of religion, free speech, and 
everything else, every other one of the rights that can be 
found in that Constitution. We have to honor its procedures as 
well or else they won't be there for us when we need them 
because we always need them.
    Mr. Walberg. We always need them. And the Senate, unlike 
the House, at least originally intended--I know it has been 
amended with the 17th Amendment, a representative of the 
States, a broad, a broad concern, not just individual people in 
concern but a broad concern for the whole future of this great 
country, as undivided States and peoples together.
    When I hear the President in the State of the Union address 
talk about, we need to get this done; and if you won't do it, I 
am going to do it; that is a concern. And I think it is being 
acted out and expressed in this process here of nonrecess 
recess appointments, stepping down on the Constitution, 
committing a constitutional crisis, and denigrating the body 
that is responsible for confirmation, oversight, care for what 
this country needs, and making sure that we don't have a 
monarch.
    So I know my time has expired, but I certainly appreciate 
your commitment to the Constitution and affirmation today of 
its primacy. Thank you.
    Chairman Issa. Seeing no additional questions, I will thank 
the Senator with one closing question or comment--wait a 
second. Well, we will have one more, but before we do that, 
just quickly, I suspect that the reason that the Founding 
Fathers gave you the requirement for advice and consent is they 
intended you do a lot less than you are doing with the people's 
work of the House. I might just mention that, they didn't 
expect you to screw around with appropriations quite the way 
that you did.
    But having said that, I just wanted to ask you one quick 
question. If we wanted as the President wants up-or-down vote 
on every one of his appointments and he wants them in a timely 
fashion, would it be equally fair for you to consider every 
vote of the House that we send over that dies in the Senate and 
for us to consider every Senate bill--forced to consider every 
Senate bill in its form that comes over from the Senate? Isn't 
it that sort of entire bucket of, it is the way it is, not the 
way we would like it to be?
    Senator Lee. Yes. You know the fact is, governments are 
made up of individuals, especially in a representative 
government like ours. Individuals have opinions, and those 
opinions in the case of elected officials are based most 
frequently on the opinions of those they represent. We do have 
a country in which people disagree. We are not always going to 
have agreement. So, yeah, it is true, I suppose, if you take 
the same logic that would go into saying, let's have a rule 
change with regard to prompt automatic consideration of all 
nominees, the same logic might suggest prompt automatic vote 
and consideration by the House of all Senate legislation and 
vice versa.
    Mr. Platts. I thank you. We now will get to our final 
questioner, if you have the time to give us 5 more minutes.
    Thank you, Senator.
    We now recognize the gentleman from Arizona, Dr. Gosar.
    Mr. Gosar. Senator Lee, thank you so very much.
    This just brings to a point of reference that this isn't 
the only thing that you may have seen as a violation of our 
Constitution because it seems that we feign these rules when we 
want them and then we disdain them when we choose to avoid 
them. Are there any other things that you have seen this 
administration do besides these appointments that have bothered 
you in regards to the Constitution, violation of the 
Constitution rules and regulations?
    Senator Lee. I have had a number of disagreements with this 
administration both on matters of policy and on matters of 
constitutional interpretation. Let me just focus on two or 
three. One dealt with the President's decision to engage the 
United States in something that I consider a war, in Libya, 
without a declaration of war from Congress. That is a 
congressional prerogative, outlined in Article I, Section 8. 
And not only did he not get a declaration from Congress, but he 
didn't even consult Congress. He sort of advised a few leaders 
in Congress as the jets were on their way to undertake that 
action. But he never got a declaration of war. I wasn't real 
pleased with that.
    Nor was I pleased with the President's decision to sign 
legislation that I read as undermining the Fourth, Fifth, and 
Sixth Amendment rights of individual Americans that can be 
read, as I read it, to give the executive branch the power to 
detain indefinitely even U.S. citizens without trial, without a 
formal grand jury indictment, without the right to counsel or 
trial before a grand jury based on an allegation that they have 
become enemy combatants. He signed that while protesting it, 
but I disagreed with his decision to sign it.
    I certainly disagreed with the policy and the 
constitutional analysis that went into the passage and signing 
by the President of the Affordable Care Act, and I disagreed 
with the constitutional analysis outlined in this 23-page 
memorandum written by the Office of Legal Counsel. Very good 
lawyers, some of the very best I know. And they did the best 
job that they could. But they came to a conclusion that is 
wrong.
    Mr. Gosar. So, Senator, if you trump the Constitution, the 
checks and balances are relatively slow, are they not?
    Senator Lee. Yes.
    Mr. Gosar. So you have the monarchy looking at the ability 
to enforce or push something forward without having a means to 
correct it very quickly.
    Senator Lee. Yes. Yes, that is right. And the fact that it 
is slow is by design. That is how we prevent the undue 
accretion of power to a chief executive, which the Founding 
Fathers knew presented some danger to individual liberty in 
America. And that is why we split up the power of the chief 
executive.
    Now it is interesting, every time our Federal Government 
has expanded, and every time the authority of the executive has 
expanded at the expense of the Congress, and every time Federal 
authority has expanded at the expense of the States, you have 
always had one common ingredient: A President, Presidents like 
Woodrow Wilson, especially Woodrow Wilson during and in the 
lead-up and in the aftermath of World War I, who have said, 
look, these are desperate times, and I have to be able to act, 
and I can't be slowed down by this elected body, who doesn't 
want to do my will as quickly as I want it to do. If you look 
back to that era, you will see that a lot of individual 
liberties were violated, and you will see that the government 
expanded at the Federal level at the expense of the States. You 
will see that the President's authority often expanded at the 
expense of Congress.
    We need to not make those kinds of mistakes again and again 
and again. This is the kind of thing that, if left unchecked, 
will easily turn into another one of those mistakes.
    Mr. Gosar. I caution my colleagues on the other side of the 
aisle of upholding rules. I hope they remember that tomorrow 
when we have our special guest.
    I would like to yield the balance of my time to Mr. Gowdy, 
if he would so like it.
    Mr. Gowdy. I thank the gentleman from Arizona.
    I want to thank you, Senator, for how generous you have 
been with your time this morning. Two things, and I will shut 
up and let you take the remainder of the time.
    Assume that these appointments are held to be void ab 
initio 12 months from now, 18 months from now. What is the 
practical impact of having a year and a half worth of 
litigation that has been undone? And if you would please 
consider, along with your colleagues likeminded or otherwise in 
the Senate, seeing if you do have standing to stand up for the 
constitutional process.
    Senator Lee. Right. Thank you, Congressman Gowdy.
    The first impact I think will be that the parties will have 
undertaken a significant effort in litigating the validity of 
orders issued by the NLRB and the CFPB. Hopefully no one 
company will have to litigate orders issued by both entities, 
but I suppose anything is possible. In addition to the expense 
and the delay related to litigation, these companies and other 
companies--even those who may not be litigated, even those who 
may just be anticipating an order but might not receive it 
during a time period will inevitably have had to avoid making 
the kinds of investments that we desperately need in order to 
create jobs. It is almost impossible to measure, to quantify in 
any precise sense the amount of economic loss that will come 
from this. But one thing of which I can be sure is that loss 
will come, and it will be significant. So this is yet another 
reason why we shouldn't be doing this.
    Sometimes my wife tells our children, just because you can 
do something doesn't mean that you should. Now perhaps the 
President can do this and get away with it at least for the 
time being as a matter of raw political power and will. But the 
fact that he can do that doesn't mean that it will, in the long 
run, survive constitutional review because I don't believe it 
will. And more importantly, it doesn't mean that he should. 
There are established procedures that go along with the recess 
appointment power. It is in the Constitution. It is there. But 
he needs to follow the practice, the procedure that makes sure 
that it doesn't swallow the rule. You can't let this exception 
swallow the rule. And that is the risk here. He is doing this 
not just at the expense of individual Senators. That is not the 
important thing. He is doing this at the expense of the people, 
the people who are living in an economy that is depressed, 
where job creation is low--in part because of actions like this 
that create so much uncertainty in the marketplace.
    You have my assurance that I and my Republican colleagues 
will continue to explore and attempt to exhaust every available 
option, including any that may be available in court. I have 
been advised by some legal experts that it is very unlikely 
that we, individually, would be able to establish standing. But 
we know that it is inevitable. And it is true that those 
subject to the rules will have standing and, at a minimum, will 
be able to participate as amici curiae in those actions. So we 
would like to do that.
    Chairman Issa [presiding]. The gentleman's time has 
expired. Seeing no one else seeking recognition, Senator, what 
you have done for us is especially appreciated. It is not often 
that Members of the House or the Senate give so much time to 
answer full questions in their area of expertise.
    So, please, have our gratitude, and tell your friends they 
are always welcome. And with that, we will take about an 8 to 
10 minute recess while they set up the next panel.
    [Recess.]
    Mr. Gowdy [presiding]. The committee will come to order.
    We are pleased to have an extremely distinguished panel. I 
will introduce you from my left to right, your right to left.
    First, we have the Honorable C. Boyden Gray, who currently 
heads the firm of Boyden Gray and Associates here in the 
District. Mr. Gray served as White House counsel during George 
H.W. Bush's administration and as an ambassador to the European 
Union during President George W. Bush's administration.
    Mr. Andrew Pincus is a partner at Mayer Brown who advises 
clients on a host of financial services issues and is 
testifying today on behalf of the U.S. Chamber of Commerce.
    Mr. Michael Gerhardt is the Samuel Ashe distinguished 
professor in constitutional law and director for the Center for 
Law and Government at the University of North Carolina School 
of Law.
    Mr. David Rivkin is a partner at Baker Hostetler and 
cochairs the firm's appellate practice. He served at the 
Justice Department in the White House Counsel's Office during 
the Reagan around George H.W. Bush administrations.
    Mr. Mark Carter is a partner at Dinsmore where he advises 
clients on traditional labor and employment law. Mr. Carter has 
extensive experience litigating before the National Labor 
Relations Board.
    Pursuant to committee rules, all witnesses, except Members 
of Congress, will be sworn in before they testify.
    So I would ask you to please rise and lift your right 
hands.
    [Witnesses sworn.]
    Mr. Gowdy. May the record reflect all witnesses answered in 
the affirmative.
    We are pleased to recognize you for your opening 
statements. I am sure all of you perhaps have done this before. 
The lights mean what they traditionally mean in life. And with 
that, we would recognize Ambassador Gray.

 STATEMENTS OF C. BOYDEN GRAY, FOUNDING PARTNER, BOYDEN GRAY & 
ASSOCIATES; ANDREW J. PINCUS, PARTNER, MAYER BROWN; MICHAEL J. 
GERHARDT, SAMUEL ASHE DISTINGUISHED PROFESSOR IN CONSTITUTIONAL 
LAW, UNIVERSITY OF NORTH CAROLINA [UNC] SCHOOL OF LAW; DAVID B. 
  RIVKIN, PARTNER, BAKER HOSTETLER, LLP; AND MARK A. CARTER, 
                 PARTNER, DINSMORE & SHOHL, LLP

                  STATEMENT OF C. BOYDEN GRAY

    Mr. Gray. Mr. Chairman, thank you very much for the 
opportunity to testify.
    You've just heard an extraordinary tutorial in a way from 
Senator Lee covering almost every aspect of this issue, both 
constitutional and practical. So I am going to try to keep what 
I say to an absolute minimum since there's very little I can 
add.
    I want to start with the point that as far as the CFPB is 
concerned, there are many who think it's quite unconstitutional 
with the lack of oversight. So the recess comes in without a 
confirmation process or bypassing or ignoring the confirmation 
process and provides even less oversight.
    As a practical matter, what has happened here and what will 
happen--if you look at footnote 13 of the OLC opinion is that 
what the White House has done is basically establish the basis 
for eliminating any need to comply with the confirmation 
process. What we have here was, as has been discussed in 
Senator Lee's testimony, not a delay, not inaction, not the 
Senate lollygagging but a situation where one nominee was, in 
fact, considered and addressed by the Senate and rejected, 
albeit by a filibuster, to be sure, but the reason doesn't 
indicate any different--if anything different would have 
happened, if he had been defeated on an up-or-down vote.
    The other two nominees, as has been discussed, were barely 
there. I don't think they had even filled out their forms and 
hadn't had hearings. This wasn't a case of delay. It was just 
avoiding the constitutional process. The footnote 13 says 
there's no minimum time, and so it could happen over a Sunday.
    I want to just say a couple of points about what this means 
for the business community. I don't want to take any thunder or 
even downplay what the others are going to testify to here, 
especially Andy Pincus coming after me representing the 
Chamber. But there's a lot of uncertainty. The President has 
given no guidance as to when he will do this, which agencies 
he's going to pick, what the reason will be. He's said nothing 
about that.
    And so all agencies are under some--that have openings are 
under some uncertainty. We don't know the litigation impact of 
what will occur. The OLC opinion, as has been observed, 
mentions that there are litigation risks. I don't recall a 
single instance when I was White House counsel where we 
commissioned and asked for an OLC opinion that came out saying 
this is a litigation risk. I don't recall that ever happening. 
That's a real red flag. But it certainly does set into a high 
uncertainty anything that these agencies do with these 
appointees.
    Regulatory uncertainty is a real problem. We don't talk 
about it that much. But in my experience in the business 
community, representing the clients in the business community, 
having been a businessman myself, there's nothing more damaging 
than uncertainty, not knowing what the rules of the road are 
going to be. And for people subject to the NLRB with very, very 
broad jurisdiction, people subject to the Consumer Financial 
Protection Bureau, extraordinarily broad jurisdiction with no 
accountability by the political branches, no accountability by 
the White House. We've been over it, no accountability by the 
Congress and no accountability really by the courts, which are 
required to defer to the rulings of the consumer bureau. 
There's going to be amazing uncertainty that results from what 
has happened here. It just is unprecedented in my view.
    I want to just close by making a couple of personal 
remarks. I, of course, watched over this, as White House 
counsel, as any White House counsel would and does. But I was 
also on the receiving end as an appointee in Bush 43. I was 
recessed at a legitimate 3-week recess. Because of Senator 
Reid, I was not rerecessed because President Bush thought that 
it couldn't happen. At the time I was frustrated by it. They 
made me, instead, a special envoy. I want you to know that I 
was a special envoy.
    But I never felt as frustrated as I was that anything 
unconstitutional was being done by Senator Reid. I have a lot 
of other objections to how he tried to block me but not the 
actions he took in the Senate. Thank you very much.
    [The prepared statement of Mr. Gray follows:]
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    Mr. Gowdy. Mr. Pincus.

                 STATEMENT OF ANDREW J. PINCUS

    Mr. Pincus. Mr. Chairman, Ranking Member Cummings, thank 
you for the opportunity to testify today on behalf of the U.S. 
Chamber of Commerce and the hundreds of thousands of businesses 
that the Chamber represents.
    The Chamber strongly supports the goal of enhancing 
consumer protection, but we're extremely concerned that the 
recess appointment is actually going to have the opposite 
effect, reducing consumer protection, creating confusion and 
uncertainty for businesses that want to comply with the law and 
imposing unnecessary and duplicative costs on legitimate 
businesses.
    Rather than focusing on the constitutional issues, which I 
agree with Ambassador Gray have been well discussed, I would 
like to focus on these consequences for consumers, for 
businesses, and for the economy of the judicial determination 
that the appointment of the director violates the Constitution.
    And I think it's important to understand that the Dodd-
Frank Act provided that prior to the appointment of a director, 
some of the powers of the bureau could be exercised by the 
Treasury Secretary. And these included rulemakings under 
Federal consumer laws that predated Dodd-Frank, very important 
laws like the Truth in Lending Act, the Fair Credit Reporting 
Act, Home Mortgage Disclosure Act, conducting supervisory 
examinations of banks with assets of over $10 billion, and 
taking enforcement actions with that category of banks.
    And prior to January 4th, the actions taken in the bureau's 
name referenced this power and presumably were approved by the 
Secretary of the Treasury or his designee. Now, of course, all 
of the bureau's actions are going to be taken on the director's 
authority. And if that authority is held illegal, all of the 
bureau's actions, including those that previously could have 
been taken under the Treasury Secretary's authority, will be 
invalid. So, as a result of the recess appointment, what 
previously had been clear power to exercise some of the 
bureau's authority has been replaced by significant uncertainty 
with respect to all of the bureau's authority.
    To take an example, the remittances rule that is going to 
go into effect on February 7th and that the bureau just issued 
could be challenged on this basis, even though it could have 
been issued under the Treasury Secretary's authority if the 
recess appointment had not occurred. And the same is true of 
the mortgage underwriting rule that is now being finalized by 
the bureau.
    So you will have a situation where actions that would have 
been lawful--at least couldn't have been challenged on this 
authority basis before January 4--are now going to have a 
significant cloud over them, and we believe there is a very 
strong chance that the courts will find them unconstitutional, 
find the recess appointment unconstitutional.
    If that happens, what's the effect? And the legal answer is 
clear. All of the bureau's actions will be invalidated. And the 
practical effect is just as dramatic as the legal effect. There 
is a real possibility of gaps in the consumer protections, 
punishments that the bureau imposed on fraudsters--people 
everybody agreed were ripping off consumers--will be 
overturned. New regulations, such as the one I mentioned, will 
be null and void. Actions that could have been accomplished 
lawfully by the bureau acting under the Treasury Secretary's 
authority or by the bureau working in tandem with the FTC and 
other agencies will be sent back to square one.
    Second, real confusion and uncertainty for legitimate 
businesses. What businesses want, as Ambassador Gray said, is 
clear rules for the road. But they will have exactly the 
opposite. If the courts declare the appointment invalid, should 
they comply with the rules that applied before the director was 
appointed? Should they comply with the new standards even 
though they're now legally questionable? With the director's 
appointment invalidated, who is going to provide guidance to 
businesses about what they should do if there is going to be a 
prolonged period of uncertainty?
    And finally, duplicative compliance costs to the extent new 
rules become invalidated and businesses have to go back to 
restructure their operations to comply with old rules, that 
means unjustified and excessive costs. And that's money, of 
course, that businesses could have used to create new jobs, to 
expand their operations, something that our economy needs.
    So the overall effect of the recess appointment is to put 
at risk significant consumer protection actions that would have 
rested on firm authority. And the potential consequences are 
going to hurt consumers, businesses, and the entire economy. 
Thank you. And I look forward to answering the committee's 
questions.
    [The prepared statement of Mr. Pincus follows:]
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    Mr. Gowdy. Mr. Gerhardt.

                STATEMENT OF MICHAEL J. GERHARDT

    Mr. Gerhardt. Thank you for the opportunity to be here 
today. I greatly appreciate the invitation.
    At the outset, let me just make two quick personal 
comments, if I may. First of all, as a constitutional law 
professor, I have to tell you that there's nothing more 
special, no greater honor than there is for me to be able to 
participate in a hearing like this, so I am grateful for that.
    At the same time, I speak for myself today and of course 
for no one else and not for my institution. Nonetheless, let me 
at least say that, as somebody who teaches at the University of 
North Carolina Law School, I do want to state for the record 
that Mr. Gray is a North Carolina treasure, so I hope you will 
allow me that.
    Of course, I also understand you've got my written 
statement, and I don't want to go back through that in any 
detail. I do want to take my brief time today to focus on a 
couple of issues, the first one of which, of course, has to do 
with the major question that has concerned this committee and 
other people, and that is the question about whether the time 
during which the President acted to make his recess 
appointments was, in fact, a recess in a constitutional sense.
    Let me just point out for the record what we haven't said 
so far. To begin with, courts generally treat that action with 
a presumption of constitutionality. Second, it should be noted 
that virtually all authorities agree that a recess is not a 
fixed time and that the President of the United States does 
have an independent judgment about whether or not there is a 
recess in a constitutional sense. Moreover, almost every 
authority, and I think almost every President, has agreed that 
in exercising judgment about questions like, this the President 
is entitled to take what we call a functional approach, a 
functional analysis. That is, to take competing considerations 
into account, and that is I think what the President of the 
United States has done.
    At the same time, the President of the United States, I 
think, has understood that if--in this circumstance, we assume 
that the break that he counts as a recess was not a recess, 
then the Senate, in effect, has the power through pro forma 
sessions to completely nullify the recess appointment 
authority. So, in a sense, the President, I think, has acted 
sensibly and soundly to defend his own prerogatives.
    Beyond that, I think the memorandum from the Office of 
Legal Counsel that provides one basis for his actions is a 
perfectly sound document. It notes, for example, that over 
history, Presidents have taken a functional approach to 
determining whether or not they should exercise this power. 
Beyond that, the document notes that this is not the first time 
that there's been a disagreement between the President and the 
Senate over whether or not there's a recess. It also notes that 
courts, generally speaking, are very reluctant to interfere 
with the President's exercise of judgment in this context, all 
of which leads me to think that the President's case here is a 
sound one and a credible one.
    Beyond that, we have before us a question about the--a 
question about the President's duties under the Constitution. 
Recall that the President takes an oath to take care to enforce 
the laws faithfully. No doubt in this case the President 
considered that if he didn't act, there would be laws left 
unenforced, laws that he obviously is trying to do what he can 
to put into implementation.
    We've talked a lot about uncertainty today, but I think 
it's fair to say that the uncertainty doesn't just cut in one 
direction. There are a lot of Americans, I suspect, who are 
uncertain about what's happening with the National Labor 
Relations Board, what's happening with the Consumer Financial 
Protection Bureau. And they're concerned about what happens if 
these laws are not enforced, if there are certain regulations 
that are not made in this context. I suspect that the President 
took all those concerns into account in determining, on 
balance, that the time was right for him to act.
    Last, I would just want to emphasize that if we look into 
the past, we will find, generally speaking, that courts don't 
overturn recess appointments, I think even like those that 
we're talking about in this case. I think the doctrines that 
pertain to case or controversy, I think the timing of a 
lawsuit, are all such that it is highly unlikely that these 
recess appointments will, in fact, be overturned, but I should 
also point out that the Constitution provides a check, actually 
two checks, on the recess appointment authority. One is, is 
that they're temporary. The other is that the man who made them 
is politically accountable. So I think that we should keep in 
mind the full set of checks and balances when we talk about the 
constitutionality of what's occurred in this circumstance. 
Thank you.
    [The prepared statement of Mr. Gerhardt follows:]
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    Mr. Gowdy. Mr. Rivkin.

                  STATEMENT OF DAVID B. RIVKIN

    Mr. Rivkin. Mr. Chairman, Ranking Member Cummings, it's a 
pleasure to be before you today.
    I also wanted to emphasize that I'm speaking on my own 
behalf and not on behalf of my law firm and of our clients. Let 
me briefly walk through what I consider to be some of the most 
unfortunate implications of what I consider to be--deal with a 
number of other individuals on constitutional use of recess 
appointments by the President.
    First, as is the case with most separation of power 
disputes, they transcend the immediate circumstances, immediate 
agencies involved. I'm not going to repeat the predictions that 
you've heard that the courts will not so much, with due respect 
to Professor Gerhardt, would not overturn the recess 
appointments as such but would basically nullify, hold null and 
void all of the regulatory products that would have been put 
out by the two agencies, and therefore--during the tenure of 
those individuals and therefore would accomplish nothing 
useful. I'm not going to talk about massive regulatory 
uncertainty.
    Let me talk about the constitutional implications, which to 
me, as somebody who cares passionately about the Constitution, 
are most important. The most important problem here is that the 
President's actions put at risk Congress' own rights and 
prerogatives. The most important one, of course, and we heard 
about it earlier today, is the scope of congressional power to 
determine the rules of its proceedings.
    And until now, it's always been assumed that Congress alone 
can set the terms of its sessions and evaluate compliance with 
the rules. The President's functionalist approach effectively 
strips this power from Congress, claiming that he may look past 
Congress' own judgments and determine for himself their legal 
effect.
    What I would want to tell you is that approach, if allowed 
to stand, would empower Presidents of both parties to cast 
doubt on nearly any congressional action, and in the process 
decisively tip the balance of power away from Article I to 
Article II. Now, we've heard a little bit of a discussion this 
morning about how that would work in the context of 
appointments. The President, indeed, can staff the entire 
executive branch with make-believe recess appointments and 
therefore eviscerate this very important check and balance that 
the Framers placed on the Senate, but let's talk about 
legislative power, power to pass legislation as such. Let's 
forget about appointments for a second.
    The President, of course, as we all know, is a participant 
in the legislative process, but he does not have an absolute 
veto. Presidential vetoes can and have been overridden by veto-
proof majorities in both houses. Now under the President's 
functionalist approach, the President, for example, might take 
the position that any legislation passed by a quorum in the 
Senate, and as we all know, much of the Senate legislative 
business is done without a quorum or, for that matter, without 
even a vote being taken by unanimous consent. In that respect, 
there's nothing particularly unusual about pro forma sessions. 
So the President can take the position that that legislation, 
piece of legislation, was unlawful and therefore can be 
disregarded with impunity and without invoking even the need to 
veto it.
    Another area where the same problem can occur and the 
President can determine for himself when Congress is in recess 
concerns a so-called pocket veto. As we all know, the 
Constitution provides if a bill is passed by Congress and not 
signed by the President, it becomes law within 10 days of a 
bill being submitted to a President, Sundays excepted, unless 
Congress by its adjournment prevents the return of a bill, in 
which case the bill dies.
    Now, if the President is able to determine for himself when 
Congress is in session, he can take the position that Congress 
is in recess, and therefore, he can, in effect, pocket veto any 
legislation he dislikes without paying any political price.
    Now, I've heard a little bit of a discussion today, let me 
say first, about the legal opinion because it eliminates the 
broader point I'm going to make. With all due respect, it's the 
worst opinion I've ever seen OLC issue. The first 18 pages of 
it go through policy precedent that nobody is disputing. The 
analysis in pages 18 and 19 is entirely conclusory. It 
basically takes the--what animates this opinion, to put it very 
crisply, is that somehow the President is entitled to recess 
appointments. With respect, that's bunk. A recess appointment 
is a gap filler. It's available to a President when there's a 
recess. If the Senate so wanted, it can arrange for itself to 
be in constant session, 24/7. The President does not have a 
power to secure a given number of recess appointments, nor, 
with all due respect does Congressman Cummings and his 
colleagues, the President has the right to populate the 
executive branch with the people he finds congenial.
    I'm actually sympathetic to that view, having served in the 
executive branch, but if the Senate wishes to disapprove or not 
vote on the President's nominees, the President would be very 
lonely. That is perhaps unfortunate, but that is not a reason 
to warp the Constitution.
    So there is a great deal at stake here, and we're talking 
about probably the greatest aggrandizement of executive power 
in American history, and it's amazing to me that people who 
were very critical of a previous President in this area, 
unjustly in my opinion, seem to be quite silent now. Thank you.
    [The prepared statement of Mr. Rivkin follows:]
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    Chairman Issa [presiding]. Thank you.
    Mr. Carter.

                  STATEMENT OF MARK A. CARTER

    Mr. Carter. Thank you, Chairman Issa and Ranking Member 
Cummings, for inviting me to testify before the committee 
today.
    As a direct consequence of the appointments of members 
Richard Griffin, Sharon Block, and Terence Flynn on January 
4th, every administrative decision and every administrative 
rule or regulation implemented by the National Labor Relations 
Board will be subject to appeal or attack. This vulnerability 
will necessarily impact the agency's ability to accomplish its 
primary mission of promoting industrial peace and stability in 
labor relations and minimizing the likelihood that labor strife 
will negatively impact interstate commerce in the United 
States.
    As recently as January 26th, the chairman of the NLRB 
reportedly told the Associated Press [AP] reported, that the 
NLRB would push for new rules that give unions a boost in 
organizing members. The chairman is quoted as stating, we 
presume the constitutionality of the President's appointments, 
and we go forward based on that understanding.
    The chairman's reference to the constitutionality of these 
appointments is a critical issue. As you have heard today, if 
the appointment of the three recess members is not 
constitutionally sound, the actions of the NLRB will be ultra 
vires, and every decision, rule, regulation or official action 
of the agency will be subject to legal challenge on that basis.
    This is because of a June 2010 U.S. Supreme Court opinion 
called New Process Steel versus NLRB. In New Process Steel the 
employer appealed from an adverse decision by the NLRB in the 
Seventh Circuit Court of Appeals. The primary issue resolved by 
the Court was whether the NLRB could issue an administrative 
decision with two members resolving the case. The statute 
contemplates a full complement of five board members, one of 
whom is the chairman. Section 3(b) of the act permits the board 
to delegate its authority to a panel of three members.
    When the administrative decision in New Process Steel was 
entered, there were only two individuals in place at the board, 
the chairman and one member. In its decision, the Supreme Court 
held that in order for the NLRB to issue a viable decision, at 
least three individuals must compose the board itself.
    It is axiomatic that any decision or official action taken 
by an NLRB composed of two or fewer individuals is ultra vires 
and cannot be enforceable. The Court rendered this decision 
despite the fact that the two-person board had resolved almost 
600 cases and fully appreciating the Board's argument that it 
had a desire to keep its doors open. The Court concluded that 
the statute did not permit the agency to, ``create a tail that 
would not only wag the dog but would continue to wag after the 
dog had died.''
    The Federal courts will necessarily hear the argument that 
parties appearing before the NLRB have been adversely treated 
by the wagging tail of a deceased dog. If the courts ultimately 
conclude that the recess appointments of the board were 
accomplished unconstitutionally, then the decisions and 
regulations the agency issues that result in adverse impact to 
any party are vulnerable under the new process precedent. If 
the three recess appointees are not validly appointed, then the 
decisions and regulations emanating from the board as currently 
composed are actually only being issued by two individuals, 
Chairman Pearce and Member Hayes. If only two persons comprise 
the board, their action is ultra vires.
    The obligations of this agency to strive to accomplish its 
mission should not be taken lightly. The agency is created by 
Congress, and it does not and should not seek to enforce or 
advance any private rights. Rather, it is a public agency that 
was created to, ``protect the public welfare,'' which is 
inextricably involved in labor disputes. The Supreme Court of 
the United States has held that the board as a public agency 
acting in the public interest, not any private person or group, 
not any employee or group of employees, is chosen as the 
instrument to assure protection from the described unfair 
conduct in order to remove obstructions to interstate commerce.
    The consequences of the recess appointments of members 
Griffin, Block, and Flynn, through no fault of their own, are 
that in every litigation resolved by the agency and with regard 
to every rule or regulation implemented by the agency during 
their tenure, anyone who desires to challenge that action may 
under New Process Steel. Regardless of whether those challenges 
are successful are not, the agency's mission to minimize labor 
strife and to remove obstructions to interstate commerce will 
be frustrated.
    [The prepared statement of Mr. Carter follows:]
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    Chairman Issa. Thank you.
    I'll recognize myself for a first round of questions and 
follow right up with Mr. Carter. How did the NLRB only have two 
members at that time of that decision, the steel decision?
    Mr. Carter. At the time of the New Process Steel decision--
--
    Chairman Issa. New Process Steel.
    Mr. Carter [continuing]. There was--the Senate was 
continuing with pro forma sessions, and there was--it was 
impossible to make any recess appointments.
    Chairman Issa. And to your knowledge, did the executive 
branch issue some sort of a statement on that, you know, 
challenging the Senate's ability to have pro forma sessions at 
that time?
    Mr. Carter. I'm not aware of that, sir.
    Chairman Issa. Ambassador Gray, you, you're pretty 
significant to today's hearings because when you had the 
questions before you, you reached a different conclusion. Would 
you tell us a little bit about how you, as I think Mr. Rivkin 
and Mr. Carter both did, how you could think again and agree 
with the decision. Is there any way you could agree with the 
decision made by counsel on behalf of the President that 
allowed these extraordinary events to occur, particularly as to 
the two or three NLRB people, two of whom had not even been 
given time to be considered by the Senate?
    Mr. Gray. Well, the trump card is held, at least in the 
theoretical sense, by the Office of Legal Counsel in the 
Department of Justice, and they came out with this ruling, 
which, gosh, I don't think we would have permitted because, as 
I said earlier, it acknowledges a litigation risk which we 
would have said no, that's not good enough; give us an answer 
that doesn't throw the whole thing into a cocked hat. So for 
that reason alone, I think that I would never have allowed this 
opinion to issue in the form that it issued.
    Beyond that, if you look at footnote 13, it's very 
disingenuous in my view. It says we have never formally taken a 
position that there's any lower limit to the time necessary to 
justify a recess appointment, and you know, in the 4 years I 
was--well, I was in the White House actually a total of 12 
years watching and then dealing directly with appointments of 
this kind--never once was there any hint that the time period 
could be less than 3 days, certainly even when I was in the 
White House not less than 2 or 3 weeks. It hadn't gotten down 
to the 10-day limit, and there's plenty on the record to 
suggest that it is a 3-day, and of course, we have the 
Constitution giving the House authority to refuse a recess 
shorter than 3 days, so--but to repeat, the litigation risks 
red flag in this opinion is one that really disturbs me a great 
deal.
    Chairman Issa. Now, we earlier heard, and from personal 
knowledge I know that the House did not grant the Senate the 
ability to be in recess. Assuming that the House's authority 
now has been waived, that we no longer have that authority, how 
do you square that? How does the House lose its constitutional 
authority to have to acquiesce to the Senate going into recess 
and vice versa?
    Mr. Gray. Well, that's one of the infirmities of this 
opinion. It's saying that--and I know there's a difference of 
opinion from the professor at my alma mater, but what he said--
--
    Chairman Issa. If you were still there, you would have been 
updated on the new Constitution, perhaps.
    Mr. Gray. I would have been taught better than I was when--
no, I just don't understand, Mr. Chairman, how anyone can say 
that the President has the power to decide when you or when the 
Senate is or is not in recess, and that's----
    Chairman Issa. And that's a question I guess I'll beg for 
all of you. The Senate is not the only question here. Isn't the 
question whether or not the House's prerogative, guaranteed 
within the Constitution, was, in fact, preempted by a decision 
that--not just that the Senate was somehow acting not 
available. I could understand that if it was a question only of 
is the Senate really in session or not, but how do you square, 
how do any of you square the House not acting, as 
constitutionally we have to, to allow a recess? Even if that 
chair were vacant day after day after day, wouldn't it be true 
that the House ultimately has an equal share in determining 
whether or not there is a recess?
    Mr. Rivkin. If I may take a stab at it.
    Chairman Issa. Please, Mr. Rivkin.
    Mr. Rivkin. Mr. Chairman, you're absolutely right. OLC 
opinion somewhat disingenuously claims that the constitutional 
language you were talking about, section 5, clause 4, really 
deals with the relationship between the two houses of, two 
parts of Article I, so you may not be in recess for purposes of 
intra-Article I relations, but you're somehow in recess under 
the functionalist analysis vis--vis Article II. I think it's an 
indefensible position and----
    Chairman Issa. And, by the way, we sometimes think the 
Senate is in recess when we send bills over there, I made that 
clear to Senator Lee, that we often wonder what they're doing 
when we send them over and they die there. But isn't this a 
very straight, and I would like to have anyone who disagrees, 
very straight question of the Constitution and whether or not 
the House gave its permission for a recess?
    Mr. Rivkin. Absolutely. There's not much original founding 
era history in explaining why that section was created, but 
clearly, it is created to ensure that there is a continuous and 
agreed-upon functioning of Article I as a branch. So it is 
therefore a reason. Let me also say the following, that gives 
you, and I'm remiss for not mentioning it in my remarks, you 
have an independent injury by virtue of a President's 
unconstitutional behavior, quite aside from usurping the 
Senate's confirmation power, he has effectively vitiated your 
power to deal with your peers in the Senate because it may be 
an important bargaining chip in some future procedures. And the 
problem with the President's analysis, it has no meaningful 
limiting principle. And you mentioned this point in one of your 
questions with Senator Lee, the President can say you're in a 
pro forma session today, I like what you did, you passed the 
payroll bill extension; therefore, you're not in recess. But in 
the next pro forma session, even when you're operating under 
the same standing order, exactly the same opportunity by 
unanimous consent to accomplish anything, because you didn't do 
anything, you're not in session, you're in recess. The same can 
be said about any of the Senate sessions.
    Chairman Issa. Thank you.
    My time has expired, but I want to make sure all witnesses 
got to answer.
    Mr. Gerhardt, I think you might have a different view.
    Mr. Gerhardt. I appreciate that very much, Mr. Chairman. 
Thank you.
    Just two quick responses. The first is to remember what it 
means to say that the President has an independent judgment 
about the constitutional meaning here. It's not to say that 
each of the other branches don't have their own respective say, 
and his isn't something that binds you, but at the same time, I 
think what it means to say is he doesn't feel bound by what 
your independent judgment may be.
    The second thing is, what is occurring, I think, in this 
debate is sort of like two trains or ships passing in the 
night. Essentially, I think what the Senate and perhaps the 
House have done is they've made a decision to place form over 
substance, and clearly what the President has done is decided 
to put substance over form when it comes to making a decision 
in this particular circumstance.
    Chairman Issa. I thank the gentleman for his opinion. I'm 
glad I have a different alma mater.
    Mr. Cummings is recognized for 5 minutes.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    On May 2, 2011, 44 Republican Senators sent a letter to the 
President of the United States to voice their objection 
regarding the Consumer Financial Protection Bureau.
    The Republican Senators did not express concerns regarding 
the qualifications of a particular nominee for the CFPB 
director position. Rather, the gang of 44 Republicans objected 
to the fact that the Dodd-Frank Act is now the law of the land 
and that the Consumer Financial Protection Bureau would be able 
to protect consumers from unscrupulous mortgage servicers, 
payday lenders, and debt collectors once the director was 
installed.
    Now, Mr. Gerhardt, I would like to point your attention to 
slide 3, and here's what those 44 Republican Senators actually 
stated, and I quote, as presently organized, far too much power 
will be vested in the CFPB director without any effective 
checks and balances. Accordingly, we will not support the 
consideration of any nominee, regardless of party affiliation, 
to be the CFPB director until the structure of the Consumer 
Financial Protection Bureau is reformed.
    Mr. Gerhardt, in your opinion, does it raise concerns that 
such a large bloc of Senators would declare so openly that they 
are boycotting the constitutional confirmation process even for 
highly qualified candidates?
    Mr. Gerhardt. I think my reaction is basically that these 
Senators are, of course, free to express their judgment, and 
the size here may be somewhat significant in that they comprise 
a minority within the Senate, but at the same time, there are 
all sorts of checks and balances, not just across branches but 
within branches. And so I would certainly defend and support 
the fact that they've got the freedom to make that--to make 
their judgments clear.
    But, as the statement itself suggests, what they want is 
reform of a law that's already in--or reform to a law that 
already exists. So the President's job is not to enforce a law 
that hasn't yet been passed. The President's job is to enforce 
a law that actually is already on the books, and so I think 
that's partly what he's undertaking here is to do what he can 
to implement or to make possible the fullest implementation of 
this agency or this bureau's function.
    Mr. Cummings. Now, in your written testimony about the 
President's recess appointment, you state, and I quote, the 
persistent obstruction of his nominations to both the NLRB and 
to the CFPB forced them to consider appropriate responses and 
all possible harms arising from his failure to act as well as 
the failure of the Senate to act on any of his nominations and 
the ensuing harm to the American public and to the enforcement 
of the law.
    Looking at slide 4, on July 19, 2011, the New Republic 
quoted Thomas Mann of the Brookings Institute as saying, Senate 
Republicans insist that a legitimately passed law be changed 
before allowing it to function with a director--a modern day 
form of nullification. There is nothing normal or routine about 
this.
    But, Mr. Gerhardt, do you believe that President Obama 
acted constitutionally in making the recess appointment to the 
bureau?
    Mr. Gerhardt. I do, and I've stated that in the written 
statement, and I obviously repeated it here orally today.
    And as far as Mr. Mann's comment is concerned, I think, 
again, it reflects the kind of checks and balances that we 
have. This is a very dynamic process, and this is exactly--what 
we're seeing today is checks and balances in operation. This is 
how it works. You can pass a law, but I think as Senator Lee 
pointed out, there are various things that could be done 
subsequently if people think differently, but the important 
thing to understand is it's all done within the process, and I 
think the President acted within that process.
    Mr. Cummings. Now, if the CFPB director position had not 
been filled, the bureau would not have been able to use its new 
powers to protect consumers from deceptive mortgage servicing, 
payday lending, and debt collection practices. Does the 
President have a duty to make sure that the consumer 
protections enacted by Congress are executed?
    Mr. Gerhardt. Obviously, I think the answer to that is yes. 
I think he does have a duty to do that, and I think that's 
partially not just constitutionally obliged on his part, but 
this is where he might also say or think, look, there's a lot 
of harm that's done from the fact that I can't get this law 
implemented, and he's trying to redress that harm. So I think 
he's constitutionally entitled to make those judgments.
    Mr. Cummings. Thank you.
    Chairman Issa. Would the gentleman like additional time to 
ask about the NLRB?
    Mr. Cummings. This will--not--thank you for the additional 
time, but I do.
    Chairman Issa. The gentleman has an additional 30 seconds.
    Mr. Cummings. Mr. Gerhardt, are you aware of any instance 
where a large group of Senators vowed to the President that 
they would block any nominee to a Federal agency unless changes 
were made to the agency's enabling act?
    Mr. Gerhardt. That is a great question, and I have to say I 
can't think of anything off the top of my head, but that may 
not mean very much.
    Mr. Cummings. Okay. Very well.
    Thank you, Mr. Chairman.
    Chairman Issa. I so much miss Senator Byrd.
    I'm sure there's a quote somewhere that's on topic.
    With that, we recognize the gentleman from South Carolina, 
Mr. Gowdy, for 5 minutes.
    Mr. Gowdy. Thank you, Mr. Chairman. I also want to thank 
the gentleman from Oklahoma for his courtesy.
    Professor, is there a different definition of recess, 
depending upon which party is in power?
    Mr. Gerhardt. I think the answer would be no.
    Mr. Gowdy. And one of the good things about the law is 
hopefully it provides order and predictability for those to 
come. So what's the new definition of recess for future 
Republican Presidents?
    Mr. Gerhardt. I think it's actually pretty much the same. 
You know, keep in mind that the President here is acting 
against a backdrop where we have more than just the OLC opinion 
that's expressing a judgment about recess. There is, for 
example, the 1905 report from the Senate Judiciary Committee 
that essentially says that the President may treat as a recess 
a period of time in which the Senate is unable to receive or 
act on nominations.
    Mr. Gowdy. Well, let's analyze that for a moment. The two 
NLRB names were given on December the 15th, and they were 
recess appointed on January the 4th. Do you think that now 
talismanically 2\1/2\ weeks is enough time to demand that the 
Senate act on something?
    Mr. Gerhardt. Obviously, that's not my judgment call to be 
made.
    Mr. Gowdy. Do you think if a President were to conclude 
that 2\1/2\ weeks was enough time for the Senate to act on 
something that that would withstand constitutional scrutiny?
    Mr. Gerhardt. Well, if you're asking me, yes, I think the 
answer is going to be yes because I think this falls within the 
discretion of the President.
    Mr. Gowdy. So 2\1/2\ weeks. What about a length of time in 
terms of recess? Because 10 days, according to you, is too 
long; 3 days, can the recess be less than 3 days?
    Mr. Gerhardt. I think as a practical matter the answer is 
going to be yes because that's what the President is using 
here.
    Mr. Gowdy. Can it be less than 1 day?
    Mr. Gerhardt. It might well turn out to be the answer is 
yes.
    Mr. Gowdy. Can it be over the lunch break?
    Mr. Gerhardt. But let me point out that the fact that 
something might be constitutional doesn't mean you have to do 
it, and so----
    Mr. Gowdy. I agree, the Constitution says he shall have the 
power.
    Mr. Gerhardt. Right.
    Mr. Gowdy. He doesn't have to do it.
    Mr. Gerhardt. Right. And so he might conclude as a 
practical matter that he does have an opportunity to make a 
recess appointment.
    Mr. Gowdy. I'm trying to get a sense of if our country were 
to be fortunate 1 day to have a President Lankford from 
Oklahoma that if the Senate----
    Chairman Issa. That would be good fortune.
    Mr. Gowdy. If the Senate were on lunch break or taking a 
nap, as has been known to happen from time to time, is that a 
sufficient length of time by which the President can use his 
recess appointment power?
    Mr. Gerhardt. Well, again, clearly, practically speaking, I 
think he can make a judgment, and perhaps most people would 
make a judgment that these breaks that you've just described 
are probably not recesses for fairly obvious reasons.
    Mr. Gowdy. I'm looking for the law.
    Mr. Gerhardt. But we're talking about the pro forma 
sessions here, and that I think raises a slightly different----
    Mr. Gowdy. Well, that gets to my next point. How can the 
payroll tax cut be effective if they were on recess?
    Mr. Gerhardt. I think the answer to that is by the time 
when the President makes this judgment, he obviously has 
concluded that the Senate is not in a position to be able to 
act on these nominations, and he thinks that the----
    Mr. Gowdy. But how could they act on nominations which 
weren't even given to them in a timely fashion? They got them 
on December the 15th, and they didn't even have the proper 
paperwork.
    Mr. Gerhardt. I understand that. But let me just remind you 
what the recess appointments clause says: The President may 
fill up all vacancies. And so there are vacancies that were 
created for one reason or another, and I think under those 
circumstances he may be able to choose to fill----
    Mr. Gowdy. Do you think the founders had a 2-hour recess in 
mind when they drafted that clause?
    Mr. Gerhardt. I don't know what they had in mind.
    Mr. Gowdy. Well, but you're a constitutional law expert.
    Mr. Gerhardt. I can tell you this.
    Mr. Gowdy. What do you think?
    Mr. Gerhardt. I think they didn't have a fixed period in 
mind.
    Mr. Gowdy. Do you think they envisioned 2 hours?
    Mr. Gerhardt. Like I said, I don't think that they were 
thinking at that level of detail. I think they thought, to the 
extent they did address that, it's not a fixed period, and what 
we're talking about here is a circumstance in which the 
President, like most Presidents, approaches this issue in a 
very practical way, balancing the competing consideration.
    Mr. Gowdy. Well, speaking of the President's practicality, 
he referred to Ambassador Bolton as being damaged and having 
his credibility undercut because he was a recess appointee. Do 
you think the same analysis would apply to his recess 
appointees, that they are damaged and have less credibility?
    Mr. Gerhardt. You mean damaged politically?
    Mr. Gowdy. I don't know how the President meant it.
    Mr. Gerhardt. Yeah, I was going to say, I'm not sure I 
understand the context of the statement, so I don't know that I 
could tell you what he was thinking or why he said that, but I 
think what happens, of course, is there--the Constitution and 
politics converge all the time, and in a circumstance like this 
where the President makes a judgment, it's not just going to 
have constitutional ramifications. It will have political 
ramifications.
    Mr. Gowdy. You keep using the word judgment, and I'm trying 
to get to what the law is because the beauty of the law is it 
instructs future people what they can and cannot do, so I'm not 
as interested in someone's judgment as I am what the law was 
going forward for the next President. Is there any time limit 
associated with recess?
    Mr. Gerhardt. I think the answer would be probably yes 
because I think you have to put all this into context.
    Mr. Gowdy. It's less than 3 days, though?
    Mr. Gerhardt. I don't know if it's less than 3 days or not, 
but I do think that it's a matter of context, it's a matter of 
what are the practicalities at the moment the President is 
making that judgment. Keep in mind that the President is making 
this determination based not just on the text but also based on 
the recognition that recess is not a fixed concept, and beyond 
that, he's also making a determination I think based on the 
law, the law he has to enforce, and the text that I think that 
gives him this authority, and the recognition that if he 
doesn't act, then in a sense what's happened is the Senate 
might be able to literally eviscerate his power.
    Mr. Gowdy. I'm out of time, Mr. Chairman. If I could have 
15 seconds to ask my final question, and I promise it is my 
final question.
    Chairman Issa. Ask unanimous consent. Without objection, 
the gentleman is given an additional 15 seconds.
    Mr. Gowdy. Thank you, Mr. Chairman.
    You mentioned a judgment. Are you moved at all by the fact 
that the Senate is controlled by the same party that controls 
the White House, and the third NLRB appointee, the Republican 
appointee, was never given a hearing, was never scheduled a 
hearing by the Democrats who are in charge of the Senate 
because some of us would be suspicious of collusion, that you 
just don't schedule it, and you wait until a nap takes place, 
and then you go ahead and make a recess appointment.
    Mr. Gerhardt. I would just say this with all due respect, 
the politics of this are not my concern. I try to look at this 
strictly from the vantage point of what the Constitution might 
have to say about this and what the constitutional law might 
be, so the parties involved which the President, the Senators, 
the nominees, are not factors in my calculation.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Chairman Issa. I thank the gentleman. The gentleman yields 
back.
    We now recognize the gentlelady from the District of 
Columbia, Ms. Norton, for 5 minutes.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Gerhardt, I'm not going to give you any law school 
hypotheticals or worst-case absurd examples, even though I 
regard my prior profession, my real profession as a professor 
of law at Georgetown University Law Center. I still go over 
there to teach once a week. I look first to the written legal 
advice the President received from the Office of Legal Counsel. 
I look there because the Office of Legal Counsel is considered, 
I think, by most of us to be the least political office in the 
Justice Department because the job of that office is to keep 
the President from getting in trouble.
    And if someone would put up some words that I asked the 
staff to get for me from his analysis, ``Allowing the Senate to 
prevent the President from exercising his authority under the 
recess appointments clause by holding pro forma sessions would 
be inconsistent with both the purpose of the clause and 
historical practice in analogous situations.''
    Now, this opinion appears to raise serious separation of 
powers questions. Let me ask you, since Congress is constantly 
looking to the Framers, whether you think the Framers intended 
Congress to overturn a law by refusing to confirm an appointee 
to run an agency, do you think the Framers had that as a 
possibility in mind?
    Mr. Gerhardt. Well, let me just say at the outset that of 
course the statement here is essentially an iteration of what 
I've been saying, and I think the OLC memo, with all due 
respect, is a perfectly good example of the kind of work one 
gets from OLC, which is not just nonpartisan, but they try and 
look at all the competing sides and come out with their 
judgment.
    In terms of your question, I think the Framers sort of told 
us what they think about that circumstance when they set up the 
Constitution. Obviously, laws are made a certain way in 
compliance with Article I. That's how laws are made. But there 
may be other factors that come along the way--funding and other 
things which are made through other laws. But in terms of 
nullifying a law, one chamber of Congress doesn't have the 
authority, I think, to nullify a law, that laws are made 
through compliance with the bicameral and presentment clauses.
    Ms. Norton. Well, I was intrigued by--therefore, you know, 
I always want to look and see, what does the other side say, so 
I wanted to see what former Office of Legal Counsel had said 
under comparable circumstances.
    Now, this President is known for his patience and 
unflappability, some would say criticized for his patience, 
particularly with this Congress. Here, let's take the office 
of--the consumer bureau. The response to--one of the most 
important responses to the most serious economic crisis in our 
lifetime or at least the lifetime of many of us, victimized 
millions of Americans. This agency has not been functioning as 
a full agency because there has been nobody to lead it.
    Now, it's one thing to be patient. It's another thing to 
become a wimp and to let your duty to attend to the laws vanish 
in the face of a Congress which simply refuses to do what has 
largely been done in the past. So in looking to prior legal 
counsel, the staff found the two former Assistants Attorney 
General, John P. Elwood and the former Deputy Attorney General. 
Both subscribe to this statement. ``The Senate cannot 
constitutionally thwart the President's recess appointment 
power through pro forma sessions. The President should consider 
calling the Senate's bluff by exercising his recess appointment 
power to challenge the use of pro forma sessions.'' This 
President appointed--did not, in fact, move forward with one 
appointee that the Senate disagreed with. All right. He says to 
the Senate, here's another one I have for you, and the Senate 
says, All right, you've come up with somebody who is fully 
appointed, and tell you what, we disagree with the underlying 
law that this appointee is to administer. It does seem to me 
that the notion of calling the Senate's bluff comes into play 
at some point, and I would like to know your view of that.
    Mr. Gerhardt. Well----
    Ms. Norton. If the President had simply allowed this to go 
on----
    Mr. Gerhardt. Right, right.
    Ms. Norton [continuing]. Indefinitely----
    Mr. Gerhardt. Right.
    Ms. Norton [continuing]. Instead of finally calling the 
question, take it to court, do what you want to, but I'm 
calling the bluff now after virtually, almost 4 years in which 
this particular bureau has not been able to function.
    Mr. Gerhardt. If the President----
    Chairman Issa. Would the gentlelady yield for just a 
second? Did you mean to say 4 years on this agency?
    Ms. Norton. Almost.
    Chairman Issa. No.
    Ms. Norton. All right. Two--When did we pass it?
    Chairman Issa. Dodd-Frank was a year ago.
    Ms. Norton. I stand corrected on the time. My point 
remains.
    Chairman Issa. The gentlelady will have an additional 30 
seconds.
    Ms. Norton. I thank the gentleman for putting into the 
record the correct number of years, whatever it is, and 
whatever the staff finds I'm sure would be the case. The point 
I made by introducing this was the President's patience had 
been quite exhaustive and that even members of a prior 
administration who had held this very office had said at some 
point, somebody's going to have to, ``call the Senate's 
bluff,'' I think that's what was done here, and I ask for your 
response with respect to that, or should he just have let it go 
on maybe for another 2, 4 years, however long it might have 
taken?
    Mr. Gerhardt. And I do think that that opinion reflects the 
fact that the basis for the President's actions are not 
uniquely partisan. That is to say, there's a wider, more solid 
ground on which he is operating. But to directly answer your 
question, I think that if the President--I think the President 
faced a situation where he knew that if he didn't act, there 
would be these harms that would continue to occur, that the 
Consumer Financial Protection Bureau would be left unable to 
perform some of its most important functions, and that would 
leave, in his judgment, the American people harmed. So that's 
the harm that he's looking at there. He could look at this 
other situation and say, look, if I act, what harm might there 
be? Clearly, in his judgment, he didn't think there was as much 
harm by acting. In fact, he actually thought he would be 
producing some good. That's not an unreasonable stance for him 
to take. So, in fact, to stand pat simply would have allowed 
harms to buildup over time and the law to go unenforced.
    Chairman Issa. I thank the gentleman.
    I now yield 5 minutes to the gentleman from Oklahoma, Mr. 
Lankford, and would ask him if he would yield for 30--15 
seconds?
    Mr. Lankford. I absolutely would, Mr. Chairman.
    Chairman Issa. I just want to make the point that one thing 
I have seen a pattern of today is that every question seems to 
be about the Consumer Financial Protection Bureau and none 
about people whose applications arrived in the Senate, two 
people whose applications arrived in the Senate formally after 
they were sworn in. Yield back.
    Mr. Lankford. Thank you, Mr. Chairman, and that is exactly 
where I want to be able to land on it. It is interesting to me 
that a lot of this conversation is about, could this be 
permissible, is there some person out there somewhere? 
Obviously, the statement there from the Bush administration 
that there was an individual that considered this. The Bush 
administration did not take that advice. They took the advice 
of others over the top of that and said, no, that's not legally 
appropriate. What this has done is for political expediency of 
the President, to make him look tough, to fight against the 
allegations that you've been weak in the past, he's got to get 
in an election year and try to look real tough and like I'm 
going to force some things down their throat so I can look 
manly. But it opens up all of this litigation, and every action 
at the NLRB suddenly is going to go to court, and it will cost 
millions of dollars so he can politically look better in a 
campaign year, but this will drag out all of these cases for 
years now in litigation. It's frustrating to me in that we have 
to sit and discuss what are the issues of litigation when this 
was a settled issue 2 years ago. I go back to the steel issue, 
the New Process Steel with Deputy Solicitor General Neal 
Katyal, as I go back through the oral arguments that I pulled 
up, he looks directly at Chief Justice Roberts, doing oral 
arguments before the Supreme Court, and Chief Justice Roberts 
discussing the NLRB and the vacancies, asked a point blank 
question, And the recess appointment power doesn't work why? To 
which he responds--this is the Obama administration Deputy 
Solicitor General responds back to the Chief Justice of the 
Supreme Court, The recess appointment power can work in a 
recess. I think our office has opined that the recess has to be 
longer than 3 days.
    Now, this seems fairly clear to me that this is not an 
issue about recess appointments and does the President have the 
power to do recess appointments. He absolutely has the 
constitutional power to do recess appointments. This is not a 
recess. This is a constitutional issue. This is an issue of can 
the executive branch define for the Senate when they're in 
recess and when they're not. Is this the power of a monarch to 
reach into the legislative branch and say, you are in the way, 
I'm going to now declare you in recess, and I'm going to put in 
who I want, and on top of that to drop their names in on the 
15th of December and then to say it's been long enough 2 weeks 
later, I've waited for you all this time, I'm now going to go 
ahead and put them into place seems absurd on its face.
    So while we can discuss all the issues of the CFPB and the 
dynamics of the politics of it, in reality, the biggest issue 
that sets the largest precedent is the NLRB case. If the 
President has some power to ignore the advice and consent of 
the Senate and if he can in 1 day drop a name in and before 
hearings are even scheduled over some weekend in the future or 
as has been opined already over a lunch break can now declare 
I'm not in communication with the Senate, they're in place, do 
it in January and ignore the advice and consent now for 2 
years, and can fill all vacancies, why can't a future President 
some January over a weekend fill every single court, all of 
them, and say, this is my recess responsibility, the precedent 
has been set over here, that was ignored by the Senate, the 
courts have upheld it. What would slow down some future 
President from doing that? Anyone is welcome to answer that. 
Let me take some different opinions here. Go ahead.
    Mr. Rivkin. Well, let me say nothing would prevent this 
from happening. In fact, I mentioned in my oral remarks that it 
would fundamentally recast not just the constitutional balance, 
but it would, in effect, enable the President to put into 
office people whom otherwise would not get confirmation for 
reasons that don't have to do with partisanship. You really can 
have an executive branch comprised of political hacks who come 
in, know they're only going to be there during the limited 
term, and do the President's bidding and feel completely 
unaccountable.
    Mr. Lankford. So, at that point, advice and consent is 
gone?
    Mr. Rivkin. Advice and consent is completely eviscerated. 
Again, the problem with the functionalist approach is, aside 
from the fact that it's not found in the text, it has no 
limiting principle, and the notion--I mean, I hate to engage in 
law professor like hypotheticals, but under the notion that if 
you have a genuine emergency, you can disregard something; why 
couldn't you disregard an appropriations rider or a statute 
which does not give the President to draw money from the 
Treasury, and you say there's an emergency, I'm going to draw 
power because I want to enforce the law? The House passes 
appropriation riders all the time that prevent agencies from 
spending their funds. The President can say, I don't care, 
there's a statute on the books, there's an appropriation rider 
which says EPA cannot do something, but I don't care, I'm going 
to use the money. There's no difference.
    Chairman Issa. And with that, we recognize the gentleman 
from Massachusetts, Mr. Tierney.
    Mr. Tierney. Thank you, Mr. Chairman.
    And thank all of you. I think we have pretty thoroughly 
gone over the constitutional aspects of this situation, and I 
think it has been enlightening, at least for me and I hope for 
my colleagues as well on that.
    I thought I would take a different look at that, stepping 
away from the constitutional issue directly on that.
    Ambassador Gray, you obviously looked at this thing from 
both sides, you know, given you're President Bush's recess 
appointment on that basis and also your White House counsel 
position. Back in March 2005, there was an article in the 
Hotline that reported a statement from you, and I'll quote it, 
I believe the use of the Senate cloture rule to permanently 
block nominations conflicts with the Constitution's advice and 
consent clause.
    Do you remember making that statement?
    Mr. Gray. Yes, sir, I do.
    Mr. Tierney. How do you feel about that today? Do you agree 
with it, or have you changed your mind?
    Mr. Gray. The statement was made in the context of judicial 
appointments. There had never been a filibuster of a judicial 
appointment for 200 and whatever years, so I thought it was 
perfectly appropriate then, and I still think it's not 
appropriate to filibuster judicial nominees.
    But that's a different issue, both in terms of who the 
nominee is to, say, the Supreme Court versus a nominee to the 
NLRB. It's a different issue. It's also a different issue, 
whether or not cloture should be used against the judge is a 
totally different issue than whether a President can declare a 
recess whenever he feels like it under whatever criteria he 
wants to use.
    And I think it's important to say that I don't think the 
recess appointment power is a response to rejection. I take the 
point that, of course, the NLRB people hadn't even filled out 
their forms yet, but it's also true that Cordray was rejected. 
Now, he was rejected by a filibuster, but he was rejected, and 
the OLC opinion doesn't say that recess is appropriate to deal 
with a filibuster issue. I don't think the word filibuster 
appears anywhere in the Office of Legal Counsel opinion.
    So the recess is not an antidote to rejection. And of 
course, there was contemplation in Dodd-Frank that there might 
not be a director confirmed because the legislation provides 
specifically that the agency can do a whole number of things, 
but certain things it cannot do until there's a director 
confirmed by the Senate. And so it was understood that maybe 
there wouldn't be a director confirmed. Maybe the director 
would be rejected. That was understood by everybody who passed 
that legislation. So I've given you too long an answer, and I 
should----
    Mr. Tierney. No, we're here to get your information. Take 
your time.
    Mr. Gray. But I do think the filibuster issue was quite 
distinct. The rule 22 issue is very, very distinct from whether 
the President has the authority to avoid the confirmation 
process and declare recesses whenever he feels like it.
    Mr. Tierney. Mr. Pincus, you made a statement at the 
beginning of your remarks that the Chamber of Commerce supports 
consumer protection. Is that correct?
    Mr. Pincus. Yes.
    Mr. Tierney. So I'm fair to say that you also made some 
comments about certainty, that the business community 
appreciates certainty in the implementation of laws as they are 
on the books.
    Mr. Pincus. Yes.
    Mr. Tierney. When you look at the statute and you look at 
statements like those made by 44 Republican Senators who wrote 
to the President vowing that they would block any nominee 
regardless of party affiliation because they objected to the 
very structure of the Consumer Financial Protection Bureau, you 
see that statement, you know the law has been passed, it hasn't 
been fully satisfied yet because there's been no appointment, 
and then 44 Members of a particular party come out and say, 
well, we're just never going to act on that so you're going to 
be with that uncertainty for a long period of time. How does 
that impact your comments about the Chamber's desire for 
consumer protection and your comments about the desire for 
certainty?
    Mr. Pincus. Well, I guess two answers, Congressman.
    First of all, on consumer protection, as I said in my 
testimony, there's a lot that the bureau can do under the 
Treasury Secretary's authority. There are many rulemaking 
responsibilities that Congress laid out in Dodd-Frank, and 
there are many other rulemakings that the bureau could 
undertake.
    Mr. Tierney. Well, if I could just--not to be rude but 
because my time is limited, let me stop you on that point so we 
can explore it.
    Mr. Pincus. Yeah.
    Mr. Tierney. What it won't be able to do, however, unless 
somebody is appointed, is identify and curb unfair, deceptive, 
and abusive financial practices; won't be able to rein in 
predatory payday loans; won't be able to ensure credit 
reporting agencies comply with consumer protections; won't be 
able to safeguard against abusive debt collection; and it won't 
be able to monitor private student lenders and nonbank mortgage 
companies and other financial institutions, just to name a few. 
So those you would consider----
    Mr. Pincus. Could I respond?
    Mr. Tierney. Of course. Those you consider not important or 
not relevant?
    Mr. Pincus. No, they may well be important, but a couple of 
points. First of all, the FTC does have the power right now to 
act against unfair and deceptive practices, is doing it. In 
fact, this week, announced a large significant enforcement 
action on consumer debt collection, and it has been doing it 
right along and has devoted very substantial resources, so part 
of the--there's a bigger argument about whether or not, where 
the gap was that the bureau was designed to fill. Much of the 
argument in the run-up to Dodd-Frank was, we're very troubled 
that the bank regulatory agencies don't focus on consumer 
protection with respect to the entities they regulate, which 
were banks, and we need to transfer that power to a new 
regulator that will focus on that regulation. That's the power 
that the CFPB had prior to January 4th and was exercising.
    As the legislation moved through Congress, other--it 
expanded to focus on other entities, all of whom are already 
regulated both at the State level and by the FTC, and the FTC 
has very, very broad power and the State attorneys general 
certainly have very broad power, so all of the entities you 
listed are already regulated both by the FTC and the States. So 
the question is, I think there's a question both about the gap 
and whether there is one, and we would suggest that there 
isn't, and that really the question here doesn't create 
uncertainty, and in fact as I discuss in my written testimony, 
a huge amount of uncertainty is going to be created by the 
overlap between the State AGs, the FTC, and the CFPB, all of 
whom now regulate these same entities and all of whom may 
regulate them in totally different ways.
    Mr. Tierney. And you don't feel that the failure or the 
statement of 44 Senators that they're just not going to appoint 
anybody on that basis leaves any uncertainty at all as to how 
that act is going to be conforming going forward?
    Mr. Pincus. Well, what it does is, is it means that 
particular part isn't going to take effect until there's some 
check, that same bipartisan check on the bureau that exists for 
the FTC, the CFP--the Consumer Products Safety Commission, the 
SEC, the CFTC, and just about every other regulatory agency.
    Mr. Tierney. So the Chamber is okay with that being 
uncertain as to whether and when that part of the statute is 
going to be implicated?
    Mr. Pincus. Well, I think it's going to be uncertain for 
sometime, and I think the question is going to be, can we get a 
regulatory structure that makes sense going forward.
    Mr. Tierney. Well, the question really is, are you going to 
get somebody appointed, but you're okay with there being no 
appointment, so I guess that follows then that you're okay with 
that part of uncertainty?
    Chairman Issa. Your time has expired, but the gentleman may 
answer.
    Mr. Pincus. Congressman, I think what we're okay with is 
that the part of the statute that was effective and was being 
administered was being described, was being fleshed out. The 
idea that parts of the statute that wouldn't come into effect 
until a director was appointed wouldn't be fleshed out until a 
director is appointed makes perfect sense because the business 
community is not now subject to them. The problem now is that 
the business community is placed in a very difficult situation 
where a lot of enforcement actions and regulations are going to 
be issued that businesses will, legitimate businesses will feel 
they have to conform with, that may turn out to be totally 
invalid, and they may have to then spend a lot of money to go 
back to the status quo because it turns out everything that's 
happened gets set aside by the courts.
    Mr. Tierney. Or it may not.
    Chairman Issa. And with that, we go to the gentleman from 
Arizona, who has been patiently waiting, Mr.--Dr. Gosar.
    Mr. Gosar. Thank you. You know, Ambassador Gray, I would 
like to give you a quick moment to respond to Mr. Gerhardt as 
regards to his comments earlier about the constitutionality and 
how the process facilitated the ends are okay with the process.
    Mr. Gray. Well, I don't know how long I have.
    No, I will stick with what I've already said and what 
Senator Lee said. If the President can just say, well, I 
actually think that the Senate really is lollygagging around 
now and ought to be in session, lunch, but they're not, the 
Chamber's empty, and, you know, they rejected my nominee for X 
position, and not by filibuster, say, but by an up or down vote 
by a 20 vote margin, and I don't like that, and therefore, I 
see a recess opportunity here, and I'm going to name this 
person to this agency anyway.
    Now, that's not the way the Constitution is supposed to 
work. And there is no absolutely irreducible right to make and 
get nominees confirmed to I think maybe any entity except, you 
know, military. I want to hedge my thing on, you know, some 
diplomatic positions, Supreme Court, but for the average 
agency, I don't believe there's any irreducible minimum right 
that the President has to say that there's going to be a recess 
anytime I say there is, and therefore, I can just override the 
confirmation process. I don't think that's what the 
Constitution means.
    I think there's another point to be made here, not to 
belabor it, but the CFPB and the NLRB are creatures of 
Congress. They're your creatures. They're not creatures of the 
President. And if you don't want to staff them, I don't think 
you have to staff them. Now, in addition to them being 
creations of you, they are so-called independent agencies. Now 
I have problems with the doctrine that any agency can be 
independent once it's set up of the President's control, but 
the President takes this view, too; these are independent 
agencies.
    They are your agencies. Not only did you create them, but 
you, independence meaning, you actually have the upper hand in 
controlling them. And if you don't want to staff them, you 
don't have to staff them, and you don't have to fund them.
    Mr. Gosar. So it brings me to my next point, Mr. Pincus.
    Staffing, we're business people. I was a dentist before. 
I'm impersonating a politician now. A business, when we go 
through a staffing process, particularly when we have a new 
rule, we have to flush it out, what's right, what's wrong, and 
particularly when it's rushed through. I mean I wasn't part of 
the 111th Congress, and I see some problematic issues, 
particularly with both sets of appointments. Isn't getting it 
right what is the most important about process?
    Mr. Pincus. I think that's right, Congressman.
    I think getting it right is important. I also think--you 
know, my mother always said, two wrongs don't make a right.
    Mr. Gosar. Thank you. Perfectly said.
    Ambassador Gray, over the history of our country, who has 
inflicted more harm to the Constitution, constitutionalists or 
the average person?
    Mr. Gray. I'm not sure--who is a constitutionalist?
    Mr. Gosar. We have attorneys that claim that they follow 
the Constitution, and we see it inflected upon the Constitution 
over and over again the challenges that depart from the 
original intention from our Constitution. I don't see the 
average person making these claims, a violation of the 
Constitution. But I do see attorneys with constitutional 
backgrounds who do make those.
    Mr. Gray. Well, this is another hearing. Certainly there 
are many of us who think that academia is the source of a lot 
of wonderful theories.
    Mr. Gosar. And the President was what?
    Mr. Gray. Well, he was an academic. Often this gets 
translated through law clerks who get put out into the field 
working for judges and influence judges. I mean, this is a long 
conversation.
    But no, the public is not guilty of this. And part of the 
reaction of the last election is a lot of people in the public 
are saying, well, wait a second. There is something out of 
kilter here. And what we thought about is limited government, 
that something has gotten out of hand. And that, I think, is a 
valid point to raise, and it's not the fault of the average 
voter in America.
    Mr. Gosar. To me, if I'm the average guy on Main Street, if 
we're playing basketball, this is a blatantly flagrant foul in 
which you have time-out, you take a penalty, and you are 
excused from process, from playing the game at all. That's how 
bad this is.
    If I could ask for you indulgence with one more quick 
question?
    Chairman Issa. The gentleman will be granted an additional 
30 seconds, plus Mr. Gerhardt does want to comment, so we will 
allow additional time for that.
    Mr. Gosar. Mr. Carter, I know in regards to the NLRB, you 
know, prior to this with the two members on there, most of 
these processes in which they were they were going to go 
through were really noncontroversial. And now that we've had 
these appointments, how do you think they are going to respond? 
Are they going to still stay to the noncontroversial aspects of 
what's before them? Or are they going to go into the realm of 
the controversy?
    Mr. Carter. Well, let's try to deal with this empirically. 
When Member Peter Schaumber and Member Wilma Liebman were left 
as the sole two members of the National Labor Relations Board, 
they came upon an agreement. It was the subject of the argument 
and new process deal whereby they agreed not to decide any 
controversial cases, those cases that normally would require at 
least three majority votes to overturn prior board precedent. 
And they did so in a collegial fashion despite the fact that 
Member Schaumber was of the Republican Party and Ms. Liebman 
was a Member of the Democratic Party. Left to their own 
desserts, it's possible for members of the NLRB bipartisanly to 
proceed collegially.
    With regard to the current board as it's currently 
composed, what they do is what they will do. But based on the 
January 26th report from the Associated Press quoting Chairman 
Pearce, who defines the agenda of the board, it is obvious that 
they are contemplating supplementing already controversial 
election regulations and attacking the docket of administrative 
appeals that are before the board. It appears to be a board, by 
his report to the press, that is going to be aggressive in 
pursuing its agenda.
    Mr. Gosar. Thank you.
    Chairman Issa. Mr. Gerhardt, you had a short statement to 
make.
    Mr. Gerhardt. I very much appreciate that, Mr. Chairman. It 
is very kind of you.
    Just a few quick points I would like to try to make in 
partial response to what's been said.
    First, I hope we don't lose sight of the fact that I 
actually think that an important premise we should have here is 
that everybody is acting in good faith. That is to say, I 
assume and I actually do more than assume that everybody here, 
whether I agree with them or not, is acting in good faith.
    I carry that same presumption with regard to Senator Lee, 
who was obviously very eloquent and insightful, and to all 
Senators and, of course, to the President. So that is my 
operating presumption.
    The second is that I think it's important to remember just 
to maybe clarify in the record that recess appointments are 
perfectly appropriate to be made to independent agencies and 
for that matter have been made to Article III courts and have 
been upheld repeatedly over time. So I don't think there's any 
question about the constitutionality of that.
    And then, last, I just want to point out that in a lot of 
situations, we've been hypothesizing circumstances other than 
those in which the President actually made these recess 
appointments. If we focus on the specific situation in which he 
made them, these pro forma sessions, in that situation, I think 
he's acting upon fairly strong constitutional ground. If we 
change the facts, we obviously might need to change our 
analysis. But in terms of the facts of this case, I think he 
has a credible ground.
    Chairman Issa. Well we're about to go to Mr. Davis.
    I might only mention that in the case of the NLRB, to be 
functioning, you only had to do one recess appointment.
    With that, we go to the gentleman from Illinois, Mr. Davis.
    Mr. Davis. Thank you very much, Mr. Chairman.
    I want to thank the witnesses for their patience.
    We keep hearing about how there is going to be a cloud--and 
I'm quoting--a cloud over whatever decisions the NLRB or the 
CFPB may make. All the same things will be true, according to 
some people, when rules are promulgated. We've heard that these 
appointees, their official acts will be void as a matter of law 
because again, they didn't have the authority to act.
    Professor Gerhardt, you have opined that the foundations 
for the President's actions are sound and the appointments are 
not unprecedented or reckless and will withstand legal 
scrutiny; is that correct?
    Mr. Gerhardt. That is correct, sir.
    Mr. Davis. So then is it fair to say that in your opinion, 
these appointees do have authority to act because the 
President's appointments were lawful?
    Mr. Gerhardt. That would be the case I would make, yes.
    Mr. Davis. So if the appointments were lawful, can't we 
dismiss all this hype talk about these nominations creating a 
cloud over these agencies' decisions?
    Mr. Gerhardt. Well, there, sir, I might have to actually 
slightly disagree with you. Here is where maybe being a law 
professor is a bit of a confounding thing. I actually do 
believe in dialog. I actually do believe in give-and-take, and 
I think that's a robust and important part of our democratic 
system.
    Mr. Davis. And I would certainly agree with that. But isn't 
it a fact that all agency decisions or judicial decisions, 
regardless of whether or not a recess appointment had been 
made, are vulnerable to being challenged in court?
    Mr. Gerhardt. You are saying, is it possible for anything 
to be challenged in court? The answer is yes. It could be 
challenged in court. But that doesn't mean it will be struck 
down.
    Mr. Davis. In fact, would you agree that for the most major 
proposed regulations, judicial review of some kind is almost 
certain to follow?
    Mr. Gerhardt. Yes, sir. It reminds me of the scene in 
Shakespeare where two characters come to the ocean, and one 
says to the other, I can summon great creatures from the deep, 
and the other says, yes, but will they come? So you can sue and 
you can litigate, but it doesn't necessarily mean that will 
bring it down.
    Mr. Davis. In fact, two rules recently promulgated by the 
NLRB to reform election rules and require the posting of 
workers' rights are being challenged by the Chamber of Commerce 
and other business groups right now. So I really think it's 
sort of a false premise to say that recess appointments are 
going to create litigation when the litigation is likely to 
take place in any event, whether these are recess appointees or 
any other kind of appointees. Individuals still have the option 
to ask for judicial review.
    Mr. Gerhardt. Yes, sir. I think that it is quite likely. 
This is an era of litigation, and litigation is oftentimes 
caused by another means.
    Mr. Davis. Thank you very much.
    I have no further question, Mr. Chairman. I yield back.
    Chairman Issa. The gentleman yields back.
    With that, we go to the gentleman from Cleveland Ohio, a 
distinguished mayor in his own right, Mr. Kucinich.
    Mr. Kucinich. Thank you very much, Mr. Issa. It is good to 
be here with you.
    I have been listening to some of the testimony from my 
office as well as here. And I keep hearing criticism of the 
President for not giving the Senate enough time to consider his 
nominees for the NLRB before making recess appointments.
    Now, Mr. Rivkin, isn't it true that President Bush at least 
made two recess appointments to the board, Mr. Cowen and Mr. 
Bartlett, without ever nominating either of them to the Senate 
at all; is that true?
    Mr. Rivkin. Well, I'm not sure, Congressman Kucinich if 
it's true. I know NLRB is not----
    Mr. Kucinich. Well, let me assert for the record that it is 
true. And Mr. Pincus----
    Mr. Rivkin. Let me just say----
    Mr. Kucinich. I have to move on to Mr. Pincus. You know, 
you didn't give me the answer.
    Mr. Pincus, as slide 10 shows--could we have the slide put 
up here? Thank you very much.
    That slide shows President Bush's recess appointments. He 
made eight recess appointments to the NLRB during his 
presidency. Now did the Chamber of Commerce object to Mr. 
Bush's recess appointments that you know of?
    Mr. Pincus. I don't know, Congressman. But none of them 
were made in the circumstances here.
    Mr. Kucinich. Okay. So you don't know what the Chamber did; 
okay.
    The National Labor Relations Board, Mr. Pincus, ensures 
protection of workplace rights for union and nonunion workers 
alike. Now slide six--go to slide six--shows the NLRB protects 
the right to form or join a union, the right to bargain for 
wages, benefits, the right to decent working conditions, and 
the right to take action with coworkers to improve working 
conditions.
    Now, Mr. Pincus, you are here today representing the 
Chamber of Commerce, correct?
    Mr. Pincus. Yes.
    Mr. Kucinich. And the Chamber does represent business 
interests, correct?
    Mr. Pincus. Yes.
    Mr. Kucinich. And on behalf of those business interests the 
Chamber represents, it usually doesn't advocate for greater 
restrictions on company management, right?
    Mr. Pincus. I don't represent the Chamber in connection 
with labor issues though. That's really outside my area of 
expertise.
    Mr. Kucinich. But you represent the interests of company 
management, of CEOs at some of the most powerful companies in 
the country, right?
    Mr. Pincus. I don't with respect to any labor law issues.
    Mr. Kucinich. What about with respect to corporate policy?
    Mr. Pincus. Certainly, I have clients who are individuals. 
I've got clients who are companies.
    Mr. Kucinich. Well, let me ask you, hasn't the Chamber 
filed a lawsuit against the NLRB for its rule requiring 
employers to post a notice explaining employees' rights to 
unionize? Are you familiar with that?
    Mr. Pincus. I know, Congressman, that the Chamber has 
challenged an NLRB rule. I'm not representing it with respect 
to that issue. Mr. Carter is more of an expert on that than I 
am.
    Chairman Issa. The chair will stipulate that there is, in 
fact, an open case disputing the legitimacy of that.
    Mr. Kucinich. I appreciate that the chair could answer the 
question; Mr. Pincus couldn't. But hasn't the Chamber, Mr. 
Pincus, filed a lawsuit against the NLRB for its rule reforming 
election procedures to alleviate the delays, abuse of process, 
and unnecessary litigation which plagued the current system for 
workers who want to vote on whether to have a union?
    Mr. Pincus. I know the Chamber is one of the parties 
challenging that rule, yes.
    Mr. Kucinich. So, as a representative of the Chamber of 
Commerce, a board without a quorum that can't enforce workers' 
rights is somewhat ideal, isn't it?
    Mr. Pincus. I don't think that a board--that a government 
agency that can't act is ideal. On the other hand, our 
constitutional system, as Senator Lee said quite eloquently, I 
think anticipates there are going to be these collisions that 
have to get worked out. When the government had to close 
because there was no funding because an appropriations bill 
hadn't been passed, I think everyone would agree that wasn't 
ideal either, but it got worked out.
    Mr. Kucinich. It got worked out. But what hasn't been 
worked out here is the Chamber's consistent opposition to the 
NLRB. And frankly, the concern that I have, Mr. Chairman, is 
that these oppositions to the recess appointments--and what 
they really represent is opposition to the NLRB because the 
witness didn't give us any information about what they did when 
President Bush made the appointments.
    So I thank very much to the witnesses for their 
participation.
    I thank the chair for the opportunity to be here.
    Chairman Issa. Thank you.
    Ambassador Gray, as far as you know, all of those 
appointments that were up I think in slide 10, these all 
occurred during mutually agreeable recess events?
    Mr. Gray. Yes, sir.
    Chairman Issa. So the fact is, the Senate allowed for 
recess appointments by its very design, along with the House?
    Mr. Gray. Absolutely. There's nothing--nothing illegal or 
unconstitutional about a recess appointment except in the 
context when there's no recess.
    Chairman Issa. And I would like to look at all five of 
you--and I will take a head nod--nobody here today for the 
whole several hours, first or second panel, objected to the 
power of a recess appointment; is that correct?
    So there's no dispute that the President has an absolute 
constitutional--one would say obligation to keep the government 
running during recesses. And that's why the Founding Fathers 
gave a recess appointment authority; correct?
    Mr. Gerhardt, you have been very good and I think you have 
been balanced in trying to answer questions, even though you 
somewhat disagree with some of the other panelists. You said 
something earlier that I focused on a little bit and that's, 
since the administration itself says there is litigation risk, 
I thought I heard you say--and maybe you want to correct that--
that there wasn't because there was risk that it would be 
upheld.
    Isn't there litigation risk? And isn't that risk 
potentially leading for this committee to the fact that NLRB or 
the Consumer Financial Protection Bureau would have laws 
similar to the New Steel that might have to be invalidated? 
Isn't that a risk? Not just a risk of litigation but a risk 
that their actions could leave them not valid in what they do 
between now and whenever the Supreme Court finally acts?
    Mr. Gerhardt. I very much appreciate the question, Mr. 
Chairman. I don't think the fact that the OLC memo mentioned 
that there's litigation risk tells us anything about the merits 
of the case.
    Chairman Issa. Sure. And Mr. Davis, when he originally 
posed that--I don't think he knows the outcome. It might be--if 
it goes up and says, hey, they were in recess, then there's no 
risk to these appointments. But there may be some risk to the 
law from January 23rd--December 23rd. But let's just assume 
that the court divines that they weren't in recess on the 23rd; 
they were in recess on the 24th for purposes. Then nothing 
happens. All we have had is a lot of litigation for a period of 
time.
    What if it doesn't happen? This committee came together to 
ask all of you and our first witness about what if. And I will 
start with Mr. Carter, and I will sort of go from right to left 
this time. What if, in fact, we find that these appointments--
one or more of them--would be considered to be inappropriate, 
and we assume it would be all of them or none of them. What is 
the risk to the actions of the NLRB and these individuals, 
three individuals--both parties--and obviously the lesser 
actions, specifically, of the new director?
    Mr. Carter. Mr. Chairman, that's the greatest danger here 
is the volume of risk. The volume of risk is expansive. Unlike 
the situation that Congressman Davis was describing, which is, 
well, every bit of litigation is subject to appeal, right? I 
mean, so what's the difference? What we're talking about here 
is an agency that is acting ultra vires with the NLRB. It's not 
one or two of the cases that might be brought to appeal by one 
of the litigants. It's every case that they decide. It's every 
regulation that they implement. It's every official action that 
they take. And those affect real people with real rights who 
will really be hurt.
    Two examples, if I may. Let's take a situation where an 
employer is told by the NLRB this coming year that they have 
legally relocated work from one manufacturing plant to another.
    Chairman Issa. You mean, maybe to South Carolina?
    Mr. Carter. Let's say to South Carolina, sir.
    Chairman Issa. Oh, wait a second; that one got sort of 
dropped once the union got what they wanted. Okay. Go ahead. 
Continue.
    Mr. Carter. Let's say West Virginia, my home State, where 
we really need jobs. And the National Labor Relations Board 
says, you can't put a new plant there, employer. Everything you 
put into that re-engineering and that plant, all the people 
that you've hired and their livelihood that they've already 
taken out mortgages on and bought cars with, that's all gone. 
They don't have jobs. You don't have use of that plant. We're 
transferring that work back. But then----
    Chairman Issa. But couldn't the people of West Virginia 
assume that the President was inappropriate in the recess 
decision and just decide to ignore it? Couldn't they just 
ignore what the President's done since he ignored what the 
Senate said? I mean, isn't there a constitutional power of the 
House, the Senate, the Supreme Court, and maybe, just maybe the 
American people? I mean, I know they're not explicitly named, 
except I thought they had these rights, you know, life, 
liberty, and the pursuit of happiness. And there's nothing that 
has ever made me happier than a paycheck.
    Mr. Carter. Anything that this committee can do to ensure 
that the citizenry is free from abuse by the government, which 
is the purpose of the Constitution, would be extremely welcomed 
by any citizen so affected.
    But it's not just companies with risk. It's not just 
employees.
    Chairman Issa. I wasn't thinking of a company ignoring it. 
I was thinking of those citizens not letting themselves be laid 
off.
    Mr. Carter. Mr. Chairman, consider the last one. And I 
won't trouble you anymore. But consider this hypothetical--and 
it's not a hypothetical. What if I'm part of a shop and my 
employer is abusing me and those who I work with. And I want to 
form a union. And I have a right to form a union. So I file a 
petition with the National Labor Relations Board. And the 
National Labor Relations Board comes in, and they hold an 
election, and that union is certified to be my representative, 
and that union begins to bargain for me. And then a Federal 
court says, it's unconstitutional. They can't certify you. It's 
an ultra vires action. I decertify that election result.
    What happens to the labor strife when those employees who 
had been bargaining all of a sudden don't have a bargaining 
representative? Do you think they would put a picket line up? I 
think in my State they would. What happens to commerce? What 
happens when that strike starts? And what happens to that 
employer? What happens to products? Real people, real rights, 
real ramifications, really dangerous, what these recess 
appointments have done to our labor relations system in this 
country.
    Chairman Issa. Thank you.
    Mr. Rivkin.
    Mr. Rivkin. Thank you, Mr. Chairman.
    Two points for you very briefly.
    First of all, with respect to Professor Gerhardt, I think 
that the fact that OLC--and Mr. Gray made this point earlier--
mentions, albeit in a fairly mild language the possibility of a 
litigation risk, is, A, unprecedented and quite probative. And 
second, picking up on an excellent point made by Mr. Carter is 
a fundamental difference, quite aside from sort of a specific 
economic footprint is a fundamental difference from a 
constitutional perspective between challenging a specific 
decision and challenging the legitimacy of a whole subset of a 
tenure of a given agency. I think it's far more destructive not 
only because of all the things that would come down, but 
frankly, it does not inspire, especially at a time when so many 
Americans are questioning some of the behavior of all branches 
of our government to find that a given agency or two agencies 
have been acting unconstitutionally for a couple of years is a 
very bad thing in terms of maintaining the confidence of the 
people in the government, quite aside from all of the cost of 
businesses and commerce involved.
    Chairman Issa. Thank you.
    Mr. Gerhardt, and in the narrow question of, if it is ruled 
that these are not, would you like to speak to the 
consequences?
    Mr. Gerhardt. Sure. And I appreciate that.
    Assuming that that were to occur, there are a couple of 
things. One is, I think you still may have a mootness problem. 
That is to say, so much has already transpired; to what extent 
can any of that be undone ever by a court? And then I think the 
second thing I would just add to all of that is just to 
reiterate----
    Chairman Issa. But in a light of New Steel, they did unring 
the bell, didn't they?
    Mr. Gerhardt. No. I understand that.
    Chairman Issa. So a small injustice, they can unring, but 
thousands of them you think the court wouldn't do it? Wouldn't 
that fly in the face of Miranda? They unrung a lot of bells 
with Miranda, didn't they?
    Mr. Gerhardt. They unrung a lot of bells with that. But 
we're talking--so in a way, we can't have our cake and eat it, 
too, here.
    Chairman Issa. But isn't the Court--the Supreme Court, 
specifically, which we suspect this will get to them--aren't 
they bound not to weigh competitive harm but in fact to weigh 
the constitutional issue? Did they have the ability to--I mean, 
look, Dred Scott could have been kept because it has been 
around for a long time, and there was a lot of harm to 
reversing it, wasn't there?
    Mr. Gerhardt. Well, the reversal, of course, occurred 
through a constitutional amendment after a bloody civil war. So 
that's about as consequential----
    Chairman Issa. So your assumption would be that, you know, 
probably that that is one of those examples where the court 
would just say, well, we're unringing the bell, but we are 
granting no relief to the injured?
    Mr. Gerhardt. I am saying that I think that that is one of 
the justiciability problems here.
    Chairman Issa. Mr. Pincus, I'm sure you concur. Just give 
us your short concurrence here.
    Mr. Pincus. I was going to say I--let me start with what 
the courts will do. I think it's quite clear that as long as 
the issue is preserved by an individual and the thousands and 
thousands of individuals and companies that have been harmed 
and their individual cases, they're all going to get relief. 
You know, in New Process Steel, I think there were 500 
decisions that were overturned. And I don't there is any 
basis--and in fact, I cite some decisions in my testimony.
    Chairman Issa. So this is sort of a classic Chamber 
question of, the Chamber essentially has to find a way to form 
a class to make sure everybody's onboard; otherwise their 
failure to object could lead them to live with the decision?
    Mr. Pincus. I think that there's a theoretical risk of 
that. But I think this issue has gotten so much attention that 
I don't think there's any company that is going to be subject 
to either an order of the NLRB or an enforcement action or 
other action by the bureau that is not going to know to have a 
paragraph in it's complaint saying, and by the way, the 
director or the two members were appointed unconstitutionally. 
I think it would be probably close to----
    Chairman Issa. Three members.
    Mr. Pincus. Three members, yes.
    So I think there will be relief. And I think that's what 
makes the case, the situation very different from Mr. Davis'. 
And sure, there are a lot of judicial review of government 
actions. The government wins almost all of those cases. And 
they are all, of course, case-specific. What we are talking 
about here are thousands, maybe, certainly hundreds of 
government decisions that will all be set aside at once. And 
that is obviously a big waste, especially, as I said in my 
testimony, when some of them are going to involve fraudsters, 
who could have been prosecuted by the preappointment bureau or 
by the FTC and who will now go fee or have to go back to square 
one. There is a lot of harm that is going to happen I think and 
a lot of wasted government resources, unfortunately.
    Chairman Issa. Ambassador, this may not be--the cost may 
not be right up your alley. But do you want to take a little 
crack at it?
    Mr. Gray. Yes, sir. Well, I did put it in my prepared 
testimony, which also deals with New Process, which was where 
they didn't have a quorum. But in Buckley v. Valeo--and not to 
throw a monkey wrench into this--but there were questions about 
the makeup of the FTC because of the appointments clause. And I 
will just read you what the court said: It is also our view 
that the commission's inability to exercise certain powers 
because of the method by which its members have been selected 
should not affect the validity of the commission's 
administrative actions and determinations to this date. So 
Buckley v. Valeo, to the extent that it's a precedent--and Andy 
is the former SG--that looks like it may cast some doubt on the 
applicability of your process.
    Chairman Issa. Well, I'm not going to allow any further 
follow up on this. I think for purposes of the record, we've 
been pretty clear.
    I'm going to ask you one final one, and this is one that 
you may all weigh in on as constitutional scholars and only in 
that way.
    Historically, the court has held very little--they've 
respected directions from the Congress when it came in the form 
of a law. They have not ordinarily given standing. And Senator 
Lee said that in his testimony in the Q&A. But in the case in 
which the House of Representatives has not granted the Senate 
the right to adjourn, does, in your opinion, the House of 
Representatives have a separate action, separate from law but 
as a body of government constitutionally specifically given a 
right/obligation, do you believe that we have a potential 
standing?
    Mr. Gray. I will just say, first, I'm skeptical. But I 
don't think it matters. There is going to be a challenge. There 
is going to be a ripe case that comes up. You will file amicus 
briefs, and what you say will be taken very, very seriously.
    Mr. Rivkin. I think that you do have a standing to indicate 
the constitutional authority under section 5, clause 4. And as 
much as I respect my good friend and former boss, Mr. Gray, I 
think that it is essential for you to speak with your own 
independent voice for a simple reason that, if you look at the 
separation of powers issues over the 200-plus years, and only 
see analysis, the behavior of each branch, at each particular 
point is given tremendous weight. It is your constitutional 
interests to vindicate. The fact that private plaintiffs may 
well strike down all of the regulatory emanations from NLRB and 
CFPB does not substitute for at least trying, if you fail in 
motion practice, the motion to dismiss because of lack of 
standing, and I don't think you will, it's still worth trying 
to at least demonstrate that you take your constitutional 
authority seriously.
    Chairman Issa. Mr. Carter.
    And Mr. Gerhardt, I am coming to you as the last word.
    Mr. Carter. I have been persuaded by both of these fine 
gentlemen. My only word of caution, if it's of any value at all 
is, I was very, very convinced by comments from the Congressman 
regard the inappropriate invasion of the House's jurisdiction 
as well as the Senate's when the chief executive sought to 
define what was adjournment, what was recess. That is the 
balance that I would encourage the House to consider, because 
ultimately, what this is, is a separation of powers argument, 
where the chief executive has plainly infringed upon the 
legislative branch's authority.
    Chairman Issa. Mr. Pincus, you have the second last word. 
Briefly.
    Mr. Pincus. I agree with Ambassador Gray. I would add one 
other caution, which is, I think--it's inactions between the 
branches, or their Representatives, that the courts are most 
likely to invoke the political question doctrine. And I think 
that's not likely to happen in the kind of lawsuit that we're 
talking about, where there's a private party who's the 
plaintiff and the House or Members of the House and the Senate 
appear as amici.
    Chairman Issa. Mr. Gerhardt, I am thoroughly looking 
forward to seeing that because on this, I don't think the 
question is the same as the ones that you have been asked up 
until now.
    Mr. Gerhardt. Right. And it will not surprise you, 
therefore, Mr. Chairman, that I probably agree with Ambassador 
Gray on this one. I think it's not likely. I think the House 
would have independent standing, but that may just be a 
technical matter. There's no question at all that the House 
would be heard on that.
    Chairman Issa. What do you think about Mr. Rivkin saying, 
but you ought to try?
    Mr. Gerhardt. Well, you could try. But I think what I think 
we see from the standing cases is that it's not likely that the 
court is going to recognize some independent standing on the 
part of the House here for the reasons that I think Mr. Pincus 
suggests and I think for reasons we've seen in other cases in 
the past. In other cases where recess appointments have been 
challenged, the Pocket Veto Case, for example, we don't see the 
House given independent standing in that circumstance.
    Chairman Issa. But the executive branch often asserts 
independent standing----
    Mr. Rivkin. Just a second--a point, as litigators, we all 
know there is enormous difference in participating as amicus 
and participating as a party. And even if you don't gain 
independent standing, I'm sure Professor Gerhardt would agree, 
you would gain standing, piggyback standing because it is not 
subject to the same constitutional analysis. It is important 
for you to speak in as robust a voice. And with all due 
respect, filing amici briefs is not the same thing.
    Chairman Issa. Well, I thank you all for your opinions. As 
chair, the challenge I have is the question we asked you all 
here for, which is the potential near irreparable harm to 
individuals in the execution of government, the cost to 
government in dollars probably is de minimis, even if it's in 
the millions, compared to the human lives of businesses and 
others around the country who will assume one thing and, if 
it's reversed, deal years later with a very different outcome. 
So it is what this committee I think will continue to try to 
evaluate. I would ask only two things and that is, as you look 
back on today's statements, questions, and answers, we'll hold 
the record open for 5 additional days and longer, if I get a 
request from any of you, to revise and extend or give us any 
additional information you think would help us in our 
deliberative process. Seeing only shaking heads positive, we 
stand adjourned.
    And, by the way, that's adjourned, not recessed.
    [Whereupon, at 1:25 p.m., the committee was adjourned.]
    [The prepared statement of Hon. Gerald E. Connolly 
follows:]
[GRAPHIC] [TIFF OMITTED] 73163.077

                                 
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