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



 
 CLEARING THE WAY FOR JOBS AND GROWTH: RETROSPECTIVE REVIEW TO REDUCE 
                        RED TAPE AND REGULATIONS

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON COURTS, COMMERCIAL
                         AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 12, 2012

                               __________

                           Serial No. 112-134

                               __________

         Printed for the use of the Committee on the Judiciary


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


                  U.S. GOVERNMENT PRINTING OFFICE
74-978                    WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  


                       COMMITTEE ON THE JUDICIARY

                      LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT, 
BOB GOODLATTE, Virginia                  Virginia
DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio                   ZOE LOFGREN, California
DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana                  MAXINE WATERS, California
J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona                  Georgia
LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
TED POE, Texas                       JUDY CHU, California
JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
TIM GRIFFIN, Arkansas                LINDA T. SANCHEZ, California
TOM MARINO, Pennsylvania             JARED POLIS, Colorado
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona
MARK AMODEI, Nevada

           Richard Hertling, Staff Director and Chief Counsel
       Perry Apelbaum, Minority Staff Director and Chief Counsel
                                 ------                                

       Subcommittee on Courts, Commercial and Administrative Law

                 HOWARD COBLE, North Carolina, Chairman

               TREY GOWDY, South Carolina, Vice-Chairman

ELTON GALLEGLY, California           STEVE COHEN, Tennessee
TRENT FRANKS, Arizona                HENRY C. ``HANK'' JOHNSON, Jr.,
DENNIS ROSS, Florida                   Georgia
BEN QUAYLE, Arizona                  MELVIN L. WATT, North Carolina
                                     JARED POLIS, Colorado

                      Daniel Flores, Chief Counsel

                      James Park, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             JULY 12, 2012

                                                                   Page

                           OPENING STATEMENT

The Honorable Howard Coble, a Representative in Congress from the 
  State of North Carolina, and Chairman, Subcommittee on Courts, 
  Commercial and Administrative Law..............................     1

                               WITNESSES

Randall W. Lutter, Ph.D., Visiting Scholar, Resources for the 
  Future
  Oral Testimony.................................................     3
  Prepared Statement.............................................     6
  Response to Questions for the Record...........................    72
Michael Mandel, Ph.D., Chief Economic Strategist, Progressive 
  Policy Institute
  Oral Testimony.................................................    11
  Prepared Statement.............................................    13
  Response to Questions for the Record...........................    75
Ronald M. Levin, William R. Orthwein Distinguished Professor of 
  Law, Washington University School of Law
  Oral Testimony.................................................    30
  Prepared Statement.............................................    33
  Response to Questions for the Record...........................    79

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Howard Coble, a 
  Representative in Congress from the State of North Carolina, 
  and Chairman, Subcommittee on Courts, Commercial and 
  Administrative Law.............................................    60
Prepared Statement of the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Ranking Member, 
  Subcommittee on Courts, Commercial and Administrative Law......    63
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Ranking Member, Committee on the Judiciary.....................    64
Prepared Statement of Nancy Nord, and Anne Northrup, 
  Commissioners, U.S. Consumer Product Safety Commission.........    66
Letter from the United States Consumer Product Safety Commission.    69


 CLEARING THE WAY FOR JOBS AND GROWTH: RETROSPECTIVE REVIEW TO REDUCE 
                        RED TAPE AND REGULATIONS

                              ----------                              


                        THURSDAY, JULY 12, 2012

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

    The Subcommittee met, pursuant to call, at 9:35 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Howard 
Coble (Chairman of the Subcommittee) presiding.
    Present: Representatives Coble, Gowdy, Franks, Johnson, and 
Watt.
    Staff Present: (Majority) Daniel Flores, Subcommittee Chief 
Counsel; John Mautz, Counsel; Bobby Cornett, Professional Staff 
Member; Ashley Lewis, Clerk; (Minority) Susan Jensen-Lachmann, 
Counsel; and Rosalind Jackson, Professional Staff Member.
    Mr. Coble. The Subcommittee will come to order.
    Good to have you all with us today. I am sure there are 
some Members on their way, but I don't want to penalize people 
who are promptly present. I want to give my opening statement 
and get that beyond us. But it is good to have everybody with 
us, particularly our three panelists.
    Retrospective regulatory review is not a novel concept. 
There have been multiple good-faith efforts to implement 
procedures and initiatives for retrospective reviews, but they 
have not produced sufficient results. This is partly due to the 
size and rapid growth of our regulatory system. It is also due 
to the complexity of our regulations and the incentives of 
regulatory agencies.
    That being said, several bills have been introduced on this 
topic, and I am pleased to turn our attention to it today. 
Representative Quayle, a distinguished Member of this panel, 
has, for example, introduced H.R. 3392, which, among other 
things, requires agencies to perform decennial reviews of 
existing major rules, including cost-benefit analysis, and to 
provide recommendations on improving these rules wherever 
warranted. Others, such as Representative Hultgren and 
Representative Young, have also introduced bills on 
retrospective review.
    The theme throughout these proposals is consistent. 
Government should have some responsibility to audit and review 
its regulations. I believe this sentiment is supported by the 
prepared testimony from today's witnesses. Every Member on this 
panel understands and appreciates that regulations are 
important for our safety and security and that changing them 
outside of ordinary procedures for promulgating rules raises 
significant questions.
    At the same time, regulations impose a cumulative burden 
that is too high, and we should look for creative measures to 
reduce that burden. I am very interested in learning today what 
proposals most merit our attention and support. And I am also 
interested to know of any other suggestions from our witnesses 
that could assist our Subcommittee as we pursue this matter 
more thoroughly.
    I understand that in addition to requiring agencies 
themselves to review their regulations, the creation of a 
legislative commission tasked for the sole purpose of reviewing 
existing regulations and reporting back to Congress may be a 
viable suggestion. If so, then what would be the mandate and 
parameters for such a commission, and what tools would be 
needed to make it effective?
    That being said, I hope today's hearing will be a 
productive first step--and I am confident that it will be--in 
making effective retroactive regulatory review a reality. And I 
look forward to the testimony from our witnesses.
    And if you all will bear with me, we are still waiting for 
a Member from the Democratic side. I presume that someone is en 
route. So you all just stand easy for the moment, and we will 
resume this imminently, hopefully.
    While we are waiting, let me introduce our distinguished 
panelists, if I may.
    Randall Lutter joined Resources for the Future in 2010 
following a long and distinguished career as an economist 
featuring service in three different Federal agencies under 
four Presidents. Mr. Lutter's past positions include chief 
economist and deputy commissioner for policy at the U.S. Food 
and Drug Administration and senior economist at the Office of 
Information and Regulatory Affairs, Office of Management and 
Budget. His teaching experience includes serving as an adjunct 
professor of economics at American University and as an 
assistant professor of managerial economics and policy at the 
State University of New York in Buffalo. Mr. Lutter earned his 
Ph.D. and M.A. from Cornell University and his B.A. from the 
University of California at Berkeley.
    Dr. Lutter, good to have you with us this morning, as well.
    Dr. Michael Mandel is a chief economic strategist for the 
Progressive Policy Institute and the founder of Visible 
Economy, LLC, a New York-based news and education company. He 
is the author of many books and wrote a basic economics 
textbook for McGraw-Hill. Mr. Mandel also served as chief 
economist at Businessweek magazine, where he was named one of 
the top 100 business journalists of the 20th century for his 
writings on innovation and growth. Mr. Mandel's work at the 
Progressive Policy Institute focuses on the impact of 
regulation on innovation. He currently is president of South 
Mountain Economics, a consulting company, and a senior fellow 
at the University of Pennsylvania Wharton School's Mack Center 
for Technological Innovation. Mr. Mandel holds a Ph.D. degree 
in economics from Harvard University.
    Dr. Mandel, good to have you with us, as well.
    Professor Levin is a nationally recognized legal scholar 
who specializes in administrative law and related public law 
issues. He is a co-author of a casebook on administrative law 
and has published numerous articles and book chapters on 
administrative law topics. Mr. Levin previously served as 
Washington University Law School's associate dean and is 
currently a public member of the Administrative Conference of 
the United States. Prior to joining the faculty at Washington 
University in 1979, Mr. Levin worked as an associate in the 
Washington, D.C., office of Sutherland Asbill & Brennan. He 
clerked for Judge John C. Godbold at the U.S. Court of Appeals 
for the Fifth Circuit. Mr. Levin earned his J.D. degree from 
the University of Chicago and his B.A., magna cum laude, from 
Yale University.
    As I said before, we are fortunate to have such a 
distinguished panel.
    And we will continue to stand easy until someone joins us.
    The gentleman from South Carolina is here.
    Mr. Gowdy. Good morning, Mr. Chairman.
    Mr. Coble. A prominent golfer, I have been told. Good to 
have you, Mr. Gowdy.
    Mr. Gowdy. Delighted to be here.
    Mr. Coble. With that in mind, we can commence.
    So, Dr. Lutter, why don't you start us off?
    If you would, gentlemen, try to confine your comments to 
within the 5-minute rule, if possible. You have an amber light 
that will appear after the green light vanishes. That amber 
light will alert you that you have about a minute to wrap up. 
Now, you won't be keel-hauled if you violate the 5-minute rule, 
but we do try to comply with the 5-minute rule.
    So, Dr. Lutter, why don't you start us off?

   TESTIMONY OF RANDALL W. LUTTER, Ph.D., VISITING SCHOLAR, 
                    RESOURCES FOR THE FUTURE

    Mr. Lutter. Chairman Coble, Members of the Subcommittee, I 
am pleased to be able to speak to you today about retrospective 
review and analysis of Federal regulations.
    I am Randall Lutter, visiting scholar at Resources for the 
Future. My testimony today is based partly on a report I 
recently authored for the Mercatus Center at George Mason 
University, which I submit for the record, and partly on my 
experience managing and evaluating Federal regulatory programs 
to reduce risks. I have served in senior staff and executive 
positions at the Federal Office of Management and Budget, the 
Council of Economic Advisers, and the Food and Drug 
Administration. My work on different regulatory matters appears 
in a variety of scholarly journals. And my testimony represents 
exclusively my own views and not necessarily those of any 
organization.
    While the Federal Government offers substantial protections 
to Americans' health, safety, environment, and financial 
security, the specifics of Federal regulation deeply frustrate 
many Americans as they try to read prescription drug labeling 
or mortgage disclosure forms, board airliners or manage small 
businesses. Codified Federal regulations today total more than 
165,000 pages and have grown at an average annual rate of 2.8 
percent per year since 1970.
    Concern over Federal regulations has led President Obama to 
issue three Executive orders on Federal regulatory policy since 
January of last year. All three spell out policies on 
retrospective review--the reexamination of extant regulations 
to identify modifications, including possible elimination as 
warranted.
    My remarks today focus on such review and on the 
retrospective analysis that can inform such review. Today I 
emphasize two specific question; the appendix to my testimony 
provides supporting information and details.
    The first question is how well recent regulatory review 
efforts have worked.
    Fifteen years ago, President Clinton's National Partnership 
for Reinventing Government, under the leadership of Vice 
President Gore, was successful in reducing the number of pages 
of regulations. The total number of pages in the Code of 
Federal Regulations fell by 7,000 from 1995 to 1997, leaving it 
about 14,800 pages below where it would have been if it had 
instead followed long-term trends.
    But a count of pages is not equivalent to regulatory burden 
or a measure of people's welfare. Moreover, in a later listing 
of accomplishments for its first 5 years, the National 
Partnership makes no mention of any specific reduction in 
regulatory burden. Were the economic effects of this 
simplification of rules nil because the changes in rules were 
simply housekeeping steps, such as the elimination of 
unnecessary regulations governing buggy whips and horse-drawn 
carriages, or were there instead genuine efficiency gains as 
the result of modification or elimination of regulations seen 
as inefficient with the benefit of hindsight? In fact, it is 
quite unclear what aggregate economic effects this reinvention 
initiative had because there was no claim of aggregate effects 
and I am unaware of any estimate from an independent source.
    In the George W. Bush administration, the Federal Office of 
Management and Budget conducted different regulatory review 
efforts, including a major push to review existing regulation 
of the entire manufacturing sector that it began in 2004. I 
focus briefly on this effort, which OMB described in its 2008 
report to Congress on Federal regulations.
    Its effort began with 189 nominations that members of the 
public provided in response to a request in a 2004 draft report 
to Congress for suggestions for specific reforms to regulation, 
guidance documents, or paperwork requirements that would 
improve manufacturing regulations. OMB determined that 76 of 
the 189 nominations were priorities, and it found that 69 of 
the 76 reform items were complete as of January 2009.
    The items listed in that report are quite diverse and 
include many actions better characterized as administrative 
steps rather than modification or elimination of Federal 
regulations. For example, the OMB report mentions 16 Federal 
reports, at least 2 of which concluded that no change in 
existing rules was appropriate. The report also includes four 
guidance documents, which don't have the full force and effect 
of law. They also include actions such as an EPA determination, 
a response to a petition, a revised reporting policy, the 
development of an internal issue paper, and one action that 
appears to substantially precede the retrospective review 
process initiated in 2004, as well as a legislative action 
regarding taxation.
    At least two of these actions, however--EPA's spill 
prevention, control, and countermeasures rule and its hazardous 
waste rules to encourage recycling--likely offered significant 
savings. Since OMB didn't offer any aggregate estimates of the 
benefits and costs of these regulatory changes, however, there 
is little basis for an overall judgment.
    In the interest of time, let me offer a quick sum-up, if I 
may. A continuing challenge is efforts to measure the actual 
results of Federal regulations. President Obama stated 
eloquently in an Executive order in January of last year that 
the regulatory system must measure and seek to improve the 
actual results of regulatory requirements. This year, he 
reiterated that same phrase. In fact, it is very difficult to 
estimate the actual results, and regulatory agencies have taken 
only very limited steps in that regard.
    So let me stop here and say that I look forward to this 
opportunity to testify. I am grateful for it. And I look 
forward to your questions.
    Mr. Coble. Thank you, Dr. Lutter.
    [The prepared statement of Mr. Lutter follows:]

    
    
    
    
    
    
    
    
    
    


                               __________
    Mr. Coble. Dr. Mandel?

TESTIMONY OF MICHAEL MANDEL, Ph.D., CHIEF ECONOMIC STRATEGIST, 
                  PROGRESSIVE POLICY INSTITUTE

    Mr. Mandel. Mr. Chairman, Members of the Subcommittee, 
thanks very much for the opportunity to address the issues with 
retrospective regulatory review, and alternative mechanisms for 
reducing the burden of regulation without losing its benefits.
    Much of my testimony is drawn from a policy brief published 
in February of 2011 by the Progressive Policy Institute, where 
I am chief economic strategist. I am also affiliated with the 
Mack Center for Technological Innovation at Wharton as a senior 
fellow.
    One of my main concerns as an economist is the link between 
innovation and regulation. Innovation is the key force 
propelling growth and creating jobs. On the other hand, 
regulation is essential for making our economy work smoothly. 
Unfortunately, if the regulatory burden is too heavy, it can 
tend to suppress the innovation and entrepreneurial energy that 
we need. So if we care about the long-term performance and 
competitiveness of the American economy, we have to focus on 
periodically lightening the regulatory load.
    This is not a new idea, as Dr. Lutter describes. It is not 
even terribly controversial. Reaching back to Jimmy Carter, 
every President, Democratic and Republican, has instructed his 
agencies to reconsider and review existing regulations. Yet, 
without exception, all of these attempts at retrospective 
review seem to have produced considerably less than the desired 
result. One might almost say they have failed.
    The question is, why is retrospective review so hard to do 
effectively? One issue is foot-dragging by agencies, but that 
isn't the whole story. First, the retrospective review process 
consists of analyzing the costs and benefits of each regulation 
individually. The problem is, it is possible for every 
individual regulation to pass a cost-benefit test while the 
total accumulation of regulations still creates a heavy burden 
on Americans. The number of regulations matter, even if 
individually all are worthwhile. I call this the pebble-in-the-
stream effect. Throw one pebble in the stream, nothing happens. 
Throw two pebbles in the stream, nothing happens. Throw 100 
pebbles in a stream, and you have dammed up the stream. Which 
pebble did the damage? It is not any single pebble; it is the 
accumulation.
    The other issue is the very structure of the regulatory 
process makes it more expensive and difficult to undo 
regulations than to create them in the first place. When the 
original reg is put in place, the agency can use whatever 
evidence is available. By contrast, after a regulation has been 
in place for a while, the agency has to do a cost-benefit 
analysis using real data on actual outcomes and costs, which is 
expensive and difficult to collect.
    So what we need is a process that allows us to tackle the 
accumulation of regulation without having to fight over each 
one individually. What PPI has proposed is an independent 
Regulatory Improvement Commission, modeled somewhat along the 
successful process set up for the Base Realignment and Closure 
Commission, or BRAC. The Regulatory Improvement Commission 
would be given the task of coming up each year with a package 
of 10 to 20 regulations to undo, rewrite, or otherwise improve. 
They can be small regs or large ones. The package is sent to 
Congress for an up-or-down vote and then, if passed, sent to 
the President for his signature.
    What are the benefits of the Regulatory Improvement 
Commission over retrospective review? First, it would get us 
away from agencies reviewing their own regulations. The 
commission would draw on expertise from different agencies, but 
it would be able to make an independent decision. Second, if 
the experience with BRAC is any guide, voting on a package of 
regulatory reforms would be easier than hand-to-hand fights 
over individual regs. Third, and perhaps most important, having 
Congress vote on the package of reforms legally allows us to 
short-circuit the cumbersome regulatory review process. The 
Regulatory Improvement Commission would hold hearings, but 
because the package of reforms would need the approval of 
Congress, the hearings wouldn't have to be arduous compared to 
the process that an agency would have to follow by itself.
    The bottom line is that the Regulatory Improvement 
Commission needs to combine efforts of both the legislative and 
executive branches to be effective. The executive branch by 
itself cannot get a grip on the problem. That is why 
retrospective review doesn't work no matter who the President 
is.
    I should note that the February 2011 policy brief lays out 
some more details about how the Regulatory Improvement 
Commission could be structured. For example, the scope of the 
commission could be structured to stay away from environmental 
regulations or expanded to encompass agencies such as the FCC. 
The commission could be made temporary like the BRAC Commission 
so that it regularly has to be reauthorized. The commission 
could set up a Web site where businesses and individuals could 
submit suggestions for which regulations to undo or change.
    In truth, there are a lot of different ways to make a 
Regulatory Improvement Commission work. The key is to set up a 
mechanism which offers a systematic and objective process for 
identifying a package of regulations to be undone or fixed, 
while acknowledging that Congress has to be an essential part 
of the process.
    Thank you.
    Mr. Coble. Thank you, Dr. Mandel.
    [The prepared statement of Mr. Mandel follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               ATTACHMENT























                               __________

    Mr. Coble. Professor Levin?

TESTIMONY OF RONALD M. LEVIN, WILLIAM R. ORTHWEIN DISTINGUISHED 
     PROFESSOR OF LAW, WASHINGTON UNIVERSITY SCHOOL OF LAW

    Mr. Levin. Thank you, Mr. Chairman and Members of the 
Subcommittee.
    As the Chairman mentioned, I am a scholar who specializes 
in the field of administrative law. And I think you would find 
a broad agreement among students of my field that agencies 
don't do as much reexamination of their existing rules as they 
should. In any large regulatory program, there are going to be 
some rules that have outlived their usefulness or need updating 
or perhaps can now be seen as having been mistakenly drafted 
from the beginning. So the question is what steps might be 
taken to identify those rules and how to go about fixing them.
    The Administration has devised an elaborate lookback 
program, and the Subcommittee should evaluate its track record, 
but I am prepared to assume for purposes of today's discussion 
that Congress will take a serious look at establishing a 
program of retrospective reviews on its own. The other 
panelists today have some interesting ideas for setting up 
external bodies to manage the retrospective review or lookback 
process, but, at least for purposes of comparison, I intend to 
explore how Congress might structure a mandate for 
retrospective review to be administered by agencies themselves, 
which is the more common pattern and possibly the most workable 
one.
    In my statement, I draw on recommendations issued by the 
American Bar Association and the Administrative Conference of 
the United States on the very subject of retrospective reviews. 
Those are both organizations that I have worked with for years, 
although I am not speaking for either of them today.
    Specifically, in this discussion, I will emphasize four 
themes that I believe the Subcommittee should take into account 
as it considers possible legislation on retrospective review. 
And I call these themes selectivity, affordability, 
flexibility, and evenhandedness.
    As to selectivity, I think priority-setting is essential to 
an effective scheme. If you direct an agency to review all of 
its rules, as sometimes has been done in the past, they will do 
a superficial job on them. So if you want a rigorous 
examination of a rule's effects, that level of effort should be 
targeted at particular rules in a well-considered fashion. And 
the agencies will need discretion to do that.
    But when I say ``discretion,'' I don't mean to imply that 
they should make their selection of rules to be reviewed in 
isolation from the rest of the world. I think you should have 
opportunities for input by OIRA, by the White House, by the 
relevant oversight Committees of Congress, and from the public. 
And these days, of course, the Internet makes opportunities for 
the public to participate easier than it ever has been in the 
past.
    The second criterion I offer is affordability, by which I 
simply mean that rigorous research into the effectiveness of a 
rule will take real resources. And if Congress wants the agency 
or anybody else to do it, it will need to provide funding for 
it. And I know that is not a small consideration these days. 
Agencies are already, in my opinion, seriously constrained by 
tight budgets in carrying out tasks that Congress has assigned 
to them. But these days, many Members have instituted tight 
curtailment on discretionary spending, and there are proposals 
to constrain it even more. And there is a tension between that 
impulse and the goal of promoting careful analysis that hasn't 
been done in the past.
    My third criterion is flexibility. By that I mean the 
legislation should not be too detailed about how the reviews 
are to be conducted, because various programs have different 
structures and different needs. Specifically, the ABA 
resolution that I mentioned identifies as possible alternative 
approaches multi-agency reviews, reviews by broad categories of 
rules or by subjects or by impact on specific groups, like 
small business or State and local governments, or cleanup 
reviews to get rid of entirely obsolete rules. I think a 
statute that governs retrospective reviews might provide a menu 
of approaches for an agency to follow but it should not try to 
make one size fit all.
    My fourth criterion, fourth and last, is what I call 
evenhandedness. Some rules become obsolete by being too 
restrictive, and others become obsolete by being too weak. And 
a balanced lookback process should facilitate an agency's 
capacity to repair either type of problem. In my statement, I 
use the example of pollution standards that EPA has used under 
a mandate to apply the best technology available. Well, 
technology evolves, but the agency often doesn't get around to 
strengthening its rules to bring them into compliance with the 
statute.
    Now, of course, there are going to be disagreements in this 
body and elsewhere about how much the problem of overregulation 
compares with the problem of underregulation. But if you want 
to establish permanent legislation along the lines of the 
Administrative Procedure Act, it should be politically neutral, 
and you could then leave it to the political process to 
determine at any particular time what rules are causing the 
greatest problem.
    With that, I will conclude my oral statement, and I will be 
happy to respond to any questions you may have. Thank you again 
for letting me testify.
    Mr. Coble. Thank you, Professor.
    [The prepared statement of Mr. Levin follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               ATTACHMENT














                               __________
    Mr. Coble. Thanks to each of you for your testimony.
    We have been joined by the distinguished gentleman from 
Arizona, Mr. Franks, and the distinguished gentleman from North 
Carolina, Mr. Watt.
    And, gentlemen, we try to apply the 5-minute rule to 
ourselves, as well, so let me get with it.
    Dr. Lutter, to what degree have past regulatory review 
efforts produced few results because the Congress and the White 
House have lacked sufficient leverage to force more effective 
reviews?
    Mr. Lutter. The reviews have been modest in terms of their 
accomplishments. I don't mean to leave the impression that the 
accomplishments are nil, the ones that have been conducted to 
date in recent Administrations. But if one looks at the broad 
scope, the pebbles-in-the-river metaphor of the other speaker, 
and the full extent of accomplishments of these reviews, one is 
left with the conclusion that there is a few rules alone which 
are changed and the vast majority are left unchanged in broad 
scope.
    With respect to your question on the congressional 
authority, I think the Reg Flex Act already has a provision--if 
I recall, it is section 306--which requires agencies to conduct 
a regulatory review on a prescribed basis. This act is widely 
seen as not especially effective. It is adhered to in the 
breach, and there is a collection of GAO reports which 
essentially acknowledge that.
    I think the challenge here is between a balance between the 
agencies, which have substantial expertise in the design and 
the management of their regulatory programs, and the need to 
get some independent, outside-the-agency stimulus for the 
change. And the reason for the independence is exactly the 
difficulty associated with self-review. People are reluctant to 
review their own work in an effective way.
    Mr. Coble. Thank you, Doctor.
    Dr. Mandel, would it be best to give the commission a 
mandate to focus on specific sectors? For example, 
retrospective review of manufacturing regs in year one, 
environmental regs in year two, communication regs in year 
three, et cetera?
    Mr. Mandel. That is an excellent point. I think that at 
least the first year, or the first couple of years, it should 
have a limited mandate so that people can get used to, sort of, 
how it works.
    In particular--and this may, sort of, disappoint some 
people--I think that in the first couple years it should stay 
away from some, sort of, really controversial topics like 
environment so that people can get used to this idea that we 
can undo regs in this way. And then over time, as people get 
used to it, the mandate can be expanded.
    Mr. Coble. I got you. Thank you, sir.
    Professor Levin, if Congress were to establish a regulatory 
review commission, would it be best to frame the commission 
with a short-term mandate, for example, say, a period of 1 to 5 
years?
    Mr. Levin. My concern about a commission more broadly would 
be that you have a group of outsiders who don't have the 
agency's experience in administering a program as a whole. And 
so, if they identify particular rules to target, they may make 
the wrong choices. And if, as has been proposed, they are able 
to put forward their proposal without a record, or an extensive 
record, the kind that an agency needs to compile, without a 
reasoned explanation of why they chose it, they may not make 
good choices. And if it is really true that all the rules are 
interconnected, they may, by picking out individual rules, 
cause disruption to the overall scheme.
    So my concern is that the commission might not be a 
reliable instrument. And if it is given a short-term mandate, 
as you described, it doesn't even have the chance to develop 
expertise over time to alleviate that problem.
    Mr. Coble. Would former heads of agencies be desirable for 
membership on such a commission?
    Mr. Levin. Oh, I definitely think if you have such a 
commission, former heads of agencies would be good candidates 
for appointment. But that doesn't get to the ultimate problem, 
that they aren't responsible for running the show at the 
moment.
    Mr. Coble. Thank you, Professor.
    I see my amber light is on. I will yield to Mr. Watt, the 
gentleman from North Carolina.
    Mr. Watt. Thank you, Mr. Chairman. Thank you for having the 
hearing.
    Dr. Lutter, I believe you testified before the Energy and 
Commerce Committee or one of their Subcommittees previously, 
and in that testimony you made the following statement: Quote, 
``Perhaps surprisingly, there has been relatively little 
scholarly empirical economic research about the effects of 
environmental regulations on employment,'' close quote. And 
then you cited two studies which had conflicting results on 
this impact.
    I am wondering, since you have testified there, have there 
been any additional empirical studies confirming that 
regulations adversely impact job creation?
    Mr. Lutter. Thank you for the question.
    I haven't done a survey since that testimony, so I am 
unaware of any specific new work on that point. I know that 
people are researching it actively, but I don't know if they 
have any conclusions to report.
    Mr. Watt. Dr. Levin, are you aware of any research in this 
area, either ongoing or completed?
    Mr. Levin. Right, my understanding of the research is that 
the volume of regulations has a fairly weak relationship to 
employment. I think, these days, the main concern about a lack 
of employment is lack of demand, and so I don't think the 
connection with regulations is a strong one. And that is only 
looking at the cost side. Regulations also have benefits which 
can improve the economic climate.
    Mr. Watt. You alluded to some of those things in your 
evaluative four criteria. Give me those four, just tick them 
off for me again quickly, if you can.
    Mr. Levin. Yes, I mentioned selectivity of which rules to 
review; affordability of the process; flexibility in designing 
it; and evenhandedness in choosing which ones to review. And as 
to the last point, my point is that sometimes a rule is out of 
date because it needs to be strengthened, other times because 
it needs to be weakened or repealed.
    Mr. Watt. So let's focus a little bit on the selectivity 
part of this. And I guess I would ask all of the panelists, in 
assessing a regulation, should avoiding red tape be prioritized 
over saving lives or should job creation be prioritized over 
saving lives? What would be your assessment on that? If a 
regulation saved lives and it was intended to do that, should 
we be encouraging a reprioritization away from saving lives to 
either avoid red tape or to promote job creation?
    Anybody got any opinions about that?
    Dr. Mandel?
    Mr. Mandel. I think that it is quite possible for any 
particular regulation, that the balance would be in favor of 
saving lives. But I also think that we have a problem, which is 
that we could keep accumulating regulations like that, where 
each individual one makes sense, but then taken together it is 
too much of a weight on the economy.
    Mr. Watt. So it would be a fair thing to assess all of 
those rather than----
    Mr. Mandel. Assess all of them.
    And, actually, let me give you another metaphor. I think 
about regulations in some sense as barnacles on the bottom of a 
ship. Okay? You just kind of have to start scraping them off at 
some point.
    Mr. Watt. Uh-huh.
    Mr. Mandel. And if we go looking for bad regulations, it is 
like looking for the worst barnacle. It is not something that--
you know, it is the whole totality of it that we have to worry 
about.
    Mr. Watt. So I assume you agree with Dr. Levin that any 
kind of retrospective review should be evenhanded.
    Mr. Mandel. When we talk about a Regulatory Improvement 
Commission, we are very careful. It is not deregulation that 
the commission is--that the commission would be charged with 
both undoing regulations but also potentially improving them.
    Mr. Watt. Right.
    Mr. Mandel. And one of the reasons why we think that 
Congress needs to be involved in voting this up or down is 
because, you know, the fact of the matter is--I wouldn't put it 
exactly the same way as the professor did, but, in fact, once 
you start looking at regulations, a package that would be 
acceptable politically might have to include some tightening as 
well as some loosening.
    Mr. Watt. I think my time is up, but if I could squeeze in 
one more question, Mr. Chairman?
    I assume just like life-saving regulations that are 
designed to save lives, some regulations can actually encourage 
innovation, too. Hasn't that been your experience?
    Mr. Mandel. That is right. Potentially----
    Mr. Watt. Can you give us a couple of examples of that?
    Mr. Mandel. Potentially some regulations can encourage 
innovation, though, actually, I generally think that if we are 
talking about genuine innovation, that the best thing to do is 
to, sort of, have less regulation rather than more.
    Mr. Watt. Give us an example of where a regulation has 
actually incentivized innovation.
    Mr. Mandel. At this point, I mean, we are very concerned 
about innovation, we are very concerned about the impact to 
people. But, in general government, is not the best----
    Mr. Watt. You are not answering my question.
    Mr. Mandel. No, because----
    Mr. Watt. If you are aware of situations where innovation 
has actually been promoted by regulation, that is the question 
I am asking. Are there specific examples? It is not a catch-
22----
    Mr. Mandel. No, it is not a--and I am trying to answer the 
question genuinely here, is that I am really not aware of 
regulation----
    Mr. Watt. Okay. Well, that is a fair answer. And I can't 
push you, but no reason to waste time answering questions other 
than that, which is----
    Mr. Coble. The gentleman's time has expired.
    Mr. Watt. I yield back.
    Mr. Coble. The distinguished gentleman from South Carolina 
is recognized.
    Mr. Gowdy. I thank the gentleman from North Carolina, the 
Chairman.
    The President, Mr. Chairman, in the State of the Union, 
said that we should have no more rules or regulations than 
would be necessary for the health, safety, and welfare of the 
American people.
    Can either of you three name some major rules and 
regulations that would violate the President's standard, in 
hopes of maybe giving some of these agencies a jump-start on 
their retrospective review?
    Not all at once.
    Mr. Mandel. I would be happy to take a shot at this. And, I 
mean, I have been asked this question many times before, okay? 
And my response is always the same: that the problem is the 
accumulation of regulations rather than any particular bad one.
    And so I basically refuse to, sort of, identify one. I 
said, look, we have too many regulations. But to, sort of, say 
any particular one needs to be removed, it actually doesn't 
reflect what the truth is. If we go looking for bad 
regulations, sort of, the ones that are job-killing, okay, we 
are not going to find them.
    Mr. Gowdy. Well, again--and I may have misapprehended what 
the President was saying. I thought he said he had identified 
500 himself. And I figure, with all the various restraints he 
has on his time--no offense to the three of you, but you are 
all experts in the field--that you would be able to come up 
with a whole lot more than 500, given the amount of time you 
are able to dedicate to the topic. I don't think, in the 
interest of time, you can list 500. I think the Chairman would 
gavel me down. But you can give me a couple, can't you?
    Mr. Levin. My answer would be that it is probably not a 
matter of saying that certain regulations should simply cease 
to exist. I think the President's point is that, in drafting 
particular regulations, even ones we need, you should structure 
it in such a way that it does not go further than is necessary 
to promote its objectives. And so I don't think of it as an 
either/or question, and I suspect he did not either.
    Mr. Gowdy. Am I pronouncing your name correctly, Dr. 
Lutter? Is that correct?
    Mr. Lutter. Yes, sir.
    Mr. Gowdy. Maybe you could help me. The President says he 
can come up with 500. Even Cass Sunstein, the noted professor 
and regulatory expert, says there are some. Humor me. Give me a 
couple.
    Mr. Lutter. Well, I will go out on a limb.
    I think, first of all, there is a clarification about what 
we mean by regulation. And the language I like to use is 
regulatory program versus rules. And the way that many of the 
specialists use rule or regulation is a particular action as 
published in the Federal Register, which is a specific rule. 
But that is not always the common usage. I am going to talk 
about regulatory programs rather than specific rules.
    At the Food and Drug Administration, many people believe 
that the regulations to reduce the risk of spread of bovine 
spongiform encephalopathy, commonly called ``mad cow,'' are 
addressed at something that is a really, really small risk. And 
that is not to say zero risk; it is simply a risk which is 
widely seen by specialists as very, very small. So one can't 
say that this has no effect on health or safety. It is simply 
that the effect would be small, if balanced against the costs 
of that regulation, including the costs of administering it, 
which is borne by the Federal purse.
    Secondly, there has been a collection of estimates over 
many years, including those funded by the EPA in the late 
1990's, evaluating the Superfund program as a whole. And that 
is not to say any specific rule associated with the Superfund 
program but, instead, its effect on the whole. And the 
valuation is usually expressed in terms of dollars of total 
compliance costs relative to cancer cases averted. And similar 
work that is more up to date on that program by Michael 
Greenstone, looking at other metrics other than cancer cases 
averted, also appears to suggest that it is relatively high 
cost per unit health improvement.
    Among specialists who work on environmental actions, the 
Resource Conservation Recovery Act has a collection of 
regulations which are often thought of as relatively high cost 
per unit health improvement or per unit gain in environmental 
protection.
    So I would nominate these three, not necessarily as ones to 
be revoked, but as ones that would merit the consideration of 
the commission that has been discussed earlier today.
    Mr. Gowdy. I am out of time, but if the Chairman would 
allow me to ask one more question, I would be forever grateful.
    Mr. Coble. Without objection.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Can you each give us, briefly, your perspective on the 
REINS Act, which passed the House, and, concomitantly, what 
role, if any, you would give the judiciary with respect to 
review of our regulatory apparatus, which role the judiciary 
should have that it doesn't currently have? So the REINS Act 
and judicial review.
    Mr. Levin. I think the REINS Act is one of the worst ideas 
I have ever heard of, because I think it would lead to gridlock 
not only in the enactment of laws but also in the 
implementation of laws. It would mean that a major rule 
couldn't be implemented unless you had the concurrence of all 
the branches of government, and that is frequently not going to 
be possible. And so I would stay away from it.
    As far as the judiciary's role is concerned, I think it 
plays a very important role today in reviewing rules, basically 
a sound role. And so I think it works in a way probably more or 
less as it should, and so I would not make major changes in it.
    Mr. Mandel. I am going to pass on this question. Thank you.
    Mr. Lutter. I have not researched the REINS Act, so I think 
I lack the expertise to comment on it.
    Mr. Gowdy. How about judicial review? Do you have expertise 
to comment on that? Additional judicial review, retrospective 
judicial review.
    Mr. Mandel. I am much more comfortable with the idea of a 
retrospective review done by a commission which is the joint 
product of Congress and the Administration. Okay? Because I 
think, ultimately, regulations are the product of the public 
will. Okay? And the undoing of regulations or the improvement 
should be viewed by the bodies, by the branches of government 
that are the expression of public will, as well.
    Mr. Coble. The gentleman's time has expired.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Mr. Coble. Thank you.
    Dr. Lutter, I mispronounced your surname earlier. I 
apologize for that.
    The distinguished gentleman from Georgia is recognized for 
5 minutes.
    Mr. Johnson. Yes. Thank you, Mr. Chairman.
    Professor Levin, would you say what you were getting ready 
to say in response to that last comment that Dr. Mandel posed?
    Mr. Coble. Oh, I didn't mean to cut you off, Professor.
    Mr. Johnson. Well, if it doesn't apply to my time, if he 
could answer it.
    Mr. Levin. Just now I was going to speak to the issue of 
judicial review in relation to retrospective review, if that is 
what you have in mind.
    What I was going to say is that anytime somebody thinks 
that a rule is out of date, an interest group, a person can 
file a petition to rescind it with the agency. The agency needs 
to respond to it. And if you are not satisfied with the 
response, you can go to court and challenge the decision as an 
arbitrary decision.
    And so we do have a mechanism in place by which a rule that 
seems obsolete can be challenged and the agency can be forced 
to come to terms with it.
    Mr. Johnson. So there is no need to muck up the process, 
bringing politics into the fray, in terms of the utility of a 
particular rule?
    Mr. Levin. I don't think you need another layer of review 
with respect to the retrospective review process itself.
    Mr. Johnson. All right. Thank you.
    I would like to know, Dr. Mandel and Dr. Lutter, do you 
think that American businesses and the U.S. economy would be 
better off without the Clean Air Act and its associated 
regulations? Do you think we would be better off without it?
    Nobody wants to answer the question?
    Mr. Lutter. The Clean Air Act is a very important act. 
There has been, actually, a retrospective study, which you may 
be aware of, sir, under section 812 of the Clean Air Act, 
evaluating the costs and the benefits of the act----
    Mr. Johnson. Well, do you think that it is better that we 
would be--we would not have a Clean Air Act? Is it your opinion 
that we shouldn't even have that act?
    Mr. Lutter. The--I----
    Mr. Johnson. Yes or no?
    Mr. Lutter. We are better off with the act than with no 
act, sir.
    Mr. Johnson. What about the Clean Water Act? Do you think 
we would be better off without that?
    Mr. Lutter. I haven't studied that in enough detail to 
know, sir.
    Mr. Johnson. What do you think about it, Dr. Mandel?
    Now, that is a very important act that--you know, it is one 
of the things that people most, in industry, one of the acts 
that people most challenge. And you are not familiar with that 
act?
    Mr. Lutter. My training and my experience, sir, is always 
to focus on certain provisions of certain rules or certain 
acts.
    Mr. Johnson. All right. I got it.
    Mr. Lutter. And in that sense, to evaluate it in its whole 
is really difficult, because one has to ask what is the 
alternative----
    Mr. Johnson. And I realize that you are an economist and 
not a lawyer, so please forgive me. Thank you.
    Dr. Mandel?
    Mr. Mandel. I think we are better off with the Clean Air 
Act.
    Mr. Johnson. What about the Clean Water Act?
    Mr. Mandel. I think we are better off with the Clean Water 
Act. Now, we could----
    Mr. Johnson. Now, what acts can you cite right now that we 
would be better off without in their entirety?
    Mr. Mandel. Now, remember, what I started----
    Mr. Johnson. Well, no, no----
    Mr. Mandel [continuing]. Off by saying was that we could 
throw pebbles in the stream and it wouldn't dam up the stream.
    Mr. Johnson. All right. Okay.
    Mr. Mandel. So I am worried about the totality.
    Mr. Johnson. Well, let's talk about the pebble-in-the-
stream effect. Throwing one pebble into the stream doesn't do 
anything, 2 is okay, 3 is okay, 100 dams up the stream. Which 
pebble did the damage? Is it important that we discover that?
    Mr. Mandel. It is a hard question. And so, at that point--
--
    Mr. Johnson. And it is a hard question to answer. Is it 
better for the regulatory rulemaking authorities and the 
affected industries to have dialogue and try to reform and 
refashion the rules in that way? Or is it better just to throw 
it into the legislative branch and let us muck it up and bog it 
down in politics and Koch brothers' money, soft money, hard 
money, whatever money? Do you think it is better to just put it 
into that system that we are dealing with now?
    Mr. Mandel. My response is, historically----
    Mr. Johnson. Yes or no?
    Mr. Mandel. The answer is that I think retrospective review 
hasn't worked. Okay? That it sounds good, but it hasn't worked. 
And so, therefore, we are looking for an alternative to that.
    Mr. Johnson. All right.
    Professor Levin, if you would.
    Mr. Levin. Right, so one concern I would have is that if 
you give an independent body jurisdiction over 15 different 
dams, they may tinker with each of them and remove parts of the 
dam that may not be effective in terms of the overall purpose 
of the dam. So I think you do need the specialized perspective 
of an agency with respect to each one.
    Incidentally, I support the Clean Air Act and Clean Water 
Act.
    Mr. Johnson. All right. Well, I kind of assumed that you 
did. I do, too, if anybody was curious about it.
    Do the Federal agencies----
    Mr. Gowdy. [Presiding.] Would the gentleman like an extra 
30 seconds?
    Mr. Johnson. I would. Well, I would like a minute, if you 
could spare it.
    Mr. Gowdy. Well, I had given you a minute before I asked if 
you wanted 30 more seconds. But how long would the gentleman 
from Georgia, the distinguished gentleman from----
    Mr. Johnson. I just have one more question.
    Mr. Gowdy. Absolutely. Without objection.
    Mr. Johnson. Thank you, Mr. Chairman.
    Do the Federal agencies, particularly in this era of slash-
and-burn budget-cutting, have the resources that they need to 
undertake their regulatory reviews, their retrospective 
regulatory reviews?
    Mr. Mandel. Absolutely not. And that is partly why I would 
like to see it moved to an independent commission. Because I 
don't want the agencies to have to use their scarce dollars to 
do the retrospective reviews.
    Mr. Johnson. That sounds like a recipe for efficiency and 
perhaps even just wholesale review, not a careful review, but a 
wholesale, politically charged review.
    Mr. Lutter. May----
    Mr. Johnson. Dr. Lutter?
    Mr. Lutter. May I also answer your question? I think the 
answer is no. And I think that is one of the challenges why the 
agencies as a group have done so little careful retrospective 
analysis of the existing rules.
    Mr. Johnson. So you disagree with the Republican slash-and-
burn ethic of the 112th Congress. Is that a fact?
    Mr. Lutter. I am not sure what that ethic is, sir.
    Mr. Johnson. Well, it is to cut regulations and make it 
easier for business----
    Mr. Gowdy. The gentleman is now into his third minute of 
what in soccer they call extra time, I believe. So, with that--
--
    Mr. Johnson. Well, could he just answer that question?
    Mr. Gowdy. Well, you keep asking new questions after the 
last one, as any good lawyer would. And you are and were.
    But, Dr. Lutter, if you would like to briefly--I emphasize 
for effect and pause--briefly answer that question, you may.
    Mr. Johnson. Thank you, Mr. Chairman.
    Mr. Gowdy. Yes, sir.
    Mr. Lutter. May I ask to have the question repeated?
    Mr. Johnson. I am a little too old for that now, Dr. 
Lutter. We can--with that, Mr. Chairman, I will yield back.
    Mr. Gowdy. I thank the gentleman from Georgia.
    And, with that, on behalf of Chairman Coble and all of us 
on the Committee, we want to thank our witnesses for their 
testimony today, for their collegiality and comity, not just 
with the Members of the Committee but also with one another.
    Without objection, all Members will have 5 legislative days 
to submit to the Chair additional written questions for the 
witnesses, which we will forward and ask the witnesses to 
respond as promptly as they can so their answers may be made 
part of the record.
    Without objection, all Members will have 5 legislative days 
to submit any additional materials for inclusion in the record.
    With that, again, I thank all of our witnesses, and this 
hearing is adjourned.
    [Whereupon, at 10:27 a.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record









                                

 Prepared Statement of the Honorable Steve Cohen, a Representative in 
Congress from the State of Tennessee, and Ranking Member, Subcommittee 
              on Courts, Commercial and Administrative Law

    From what I can tell, there appears to be general agreement that 
periodic retrospective review of existing regulations is a good thing. 
This makes sense as it is difficult to argue with the idea that 
agencies should keep track of the effectiveness of the rules that they 
issue and take appropriate action when necessary.
    But beyond this basic notion, there is a range of views on 
everything from what the ultimate purpose of retrospective review 
should be to how such review should be carried out by agencies and the 
appropriate roles of Congress and the President in mandating and 
crafting a process for such review.
    I infer from both the title of this hearing and the testimony of 
the Majority witnesses that in some of my colleagues' view, the main 
purpose of retrospective review is to ensure repeal at least some 
existing rules.
    Retrospective review, however, should not necessarily lead to 
rescinding existing rules. Sometimes, reviews may require promulgation 
of new rules or the expansion of existing ones. Indeed, a comprehensive 
review may result in no changes at all to existing rules.
    Any of these outcomes is a legitimate result of a properly 
conducted retrospective review, and no process for retrospective review 
should start with the premise that a rule must be rescinded after such 
review.
    Something else we ought to keep in mind is that Congress must 
proceed cautiously before imposing a legislative mandate on agencies to 
conduct retrospective review.
    One consideration is whether the President's efforts regarding 
retrospective review alleviate the need for Congress to craft a general 
legislative mandate for retrospective review.
    Some of our witnesses dismiss the notion that a retrospective 
review conducted pursuant to Executive Order can ever be effective.
    I believe this judgment to be a bit harsh. Whatever the results of 
past presidential efforts to require retrospective review of existing 
rules, President Obama's Executive Orders on the subject are the most 
extensive ones yet issued to address retrospective review.
    And they are fairly new, so we ought to give them a chance to fully 
take root before coming to any conclusions about the effectiveness of 
his initiatives.
    If Congress chooses to impose a retrospective review process on 
agencies, it must be written in broad terms and be flexible enough to 
accommodate the differences among agencies. As both the American Bar 
Association and the Administrative Conference of the United States 
recognized, Congress should avoid standardized or detailed review 
requirements.
    Finally, we should be mindful of the fact that conducting 
retrospective reviews can be very draining on agency resources, in 
terms of money, time, and staff. In 2007, the Government Accountability 
Office issued a report concluding that the ``most critical barrier'' 
for agencies to conduct retrospective reviews was ``the difficulty in 
devoting the time and staff resources required for reviews while also 
carrying out other mission activities.''
    There does seem to be some rough agreement, at least among our 
witnesses, that it might be useful to have a neutral, third-party 
entity in charge of conducting retrospective reviews of existing rules.
    I would suggest that, should Congress choose to go down this path, 
it should consider assigning the task of retrospective review to an 
existing entity like the GAO rather than creating a new entity, 
particularly given present budgetary and political constraints. Perhaps 
we could start with a pilot program along those lines.
    There are a host of other matters to consider in designing a 
retrospective review process. I will leave it to our witnesses to 
elaborate on these considerations. I look forward to their testimony.

                                

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
 in Congress from the State of Michigan, and Ranking Member, Committee 
                            on the Judiciary

    This is the fourteenth hearing on regulations that we have held 
during the 112th Congress.
    And, as with the previous hearings, the title trumpets a favorite 
theme of conservatives--that regulations somehow depress job creation.
    This is unfortunate because the focus of the hearing is supposed to 
be on the need for retrospective review of existing regulations, a 
topic that is worthy of a thoughtful discussion.
    In principle, retrospective review of existing regulations is not a 
bad idea. It is hard to argue against the notion that agencies ought 
periodically to assess whether the rules they have promulgated are as 
good as they can be or whether they are even necessary in light of 
changed circumstances.
    Nonetheless, there are certain considerations that we must keep in 
mind as we proceed with today's hearing.
    As an initial matter, there is absolutely no credible evidence 
establishing that regulations have any substantive impact on job 
creation, and discussion of such a link in the context of retrospective 
review is unhelpful.
    Last year, the Majority's own witness testified before this 
Subcommittee that the ``focus on jobs . . . can lead to confusion in 
regulatory debates'' and that ``the employment effects of regulation, 
while important, are indeterminate.''
    The truth is that regulations can, in fact, lead to job creation. 
And, here are just a few examples:

      A pending regulation limiting the amount of airborne 
mercury will not just reduce the amount of seriously toxic pollutants, 
but create as many as 45,000 temporary jobs and possibly 8,000 
permanent jobs, as the New York Times noted.

      Heightened vehicle emissions standards have spurred clean 
vehicle research, development and production efforts that, in turn, 
have already generated more than 150,000 jobs at 504 facilities in 43 
states across the U.S.

    It should, therefore, not come as a surprise that Bruce Bartlett, a 
former senior Republican Advisor in the Reagan and George H.W. Bush 
Administrations, says that there is ``no hard evidence'' that 
regulations stifle job creation and that it's simply being ``asserted 
as self-evident and repeated endlessly throughout the conservative echo 
chamber.''
    If anything, it was a lack of adequate regulation of the financial 
services industry and the mortgage industry that led to the 2008 
financial crisis and the tremendous job losses that followed.
    The purported link between regulations and jobs is unsupported, and 
we ought to stay away from it when discussing retrospective review.
    Another point to keep in mind is that President Obama has already 
taken a series of significant steps towards instituting regular 
retrospective reviews by agencies, and that Congress should not jump 
the gun in seeking to mandate retrospective review legislatively.
    To date, he has issued two Executive Orders outlining steps that 
federal agencies must take to formulate plans for retrospective review 
of their regulations on an ongoing basis.
    And he has issued a third Executive Order encouraging independent 
regulatory agencies to take similar steps to plan for ongoing 
retrospective reviews of their rules.
    So far, more than two dozen executive agencies and almost 20 
independent regulatory agencies have submitted retrospective review 
plans pursuant to these Executive Orders.
    Altogether, these plans have identified almost 500 different ways 
to reduce redundancy and inconsistency among existing regulations.
    Before Congress considers imposing a legislative mandate regarding 
retrospective review, it should ensure that the President's efforts 
have been thoroughly evaluated and have had a chance to fully take 
root.
    Finally, we must keep in mind the strain that a mandate to conduct 
retrospective review can have on already-limited agency resources.
    The Government Accountability Office noted in a 2007 report that 
one of the barriers to an effective retrospective review process is the 
fact that most agencies have limited time and staff resources to 
conduct a proper review while also carrying out their other functions, 
including issuing new rules mandated by Congress.
    If Congress intends to impose a comprehensive retrospective review 
process on agencies, then it must be prepared to provide the funding 
for additional staff and other resources for agencies to conduct such 
review.
    Without additional resources, agencies could be placed in an 
impossible position of having to comply with competing Congressional 
mandates for retrospective review, on the one hand, and to issue new 
rules, on the other.
    Effectively, a mandatory retrospective review regime could become 
another back-door way of stifling agency rulemaking and enforcement 
actions, as agencies shift time and resources to retrospective review 
at the expense of fulfilling these other duties.
    The question of whether Congress should mandate retrospective 
review of existing rules is an important one and deserves serious, 
substantive, and nuanced discussion.
    I am afraid that the signal sent by the hearing's title suggests 
that today's discussion may be otherwise. I hope this is not the case 
and that we can have a helpful conversation on this important topic.



                                







                                








                                








                                










                                













                                 
