    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

         ``REINS ACT OF 2013'': PROMOTING JOBS, GROWTH AND AMERICAN

                                COMPETITIVENESS
    =======================================================================

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON

                               REGULATORY REFORM,

                          COMMERCIAL AND ANTITRUST LAW

                                     OF THE

                           COMMITTEE ON THE JUDICIARY

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    H.R. 367

                                   __________

                                 MARCH 5, 2013

                                   __________

                               Serial No. 113-26

                                   __________

             Printed for the use of the Committee on the Judiciary

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

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                           COMMITTEE ON THE JUDICIARY

                       BOB GOODLATTE, Virginia, Chairman
    F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
        Wisconsin                        JERROLD NADLER, New York
    HOWARD COBLE, North Carolina         ROBERT C. ``BOBBY'' SCOTT,
    LAMAR SMITH, Texas                       Virginia
    STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
    SPENCER BACHUS, Alabama              ZOE LOFGREN, California
    DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
    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                     JUDY CHU, California
    TED POE, Texas                       TED DEUTCH, Florida
    JASON CHAFFETZ, Utah                 LUIS V. GUTIERREZ, Illinois
    TOM MARINO, Pennsylvania             KAREN BASS, California
    TREY GOWDY, South Carolina           CEDRIC RICHMOND, Louisiana
    MARK AMODEI, Nevada                  SUZAN DelBENE, Washington
    RAUL LABRADOR, Idaho                 JOE GARCIA, Florida
    BLAKE FARENTHOLD, Texas              HAKEEM JEFFRIES, New York
    GEORGE HOLDING, North Carolina
    DOUG COLLINS, Georgia
    RON DeSANTIS, FLORIDA
    KEITH ROTHFUS, Pennsylvania

               Shelley Husband, Chief of Staff & General Counsel
            Perry Apelbaum, Minority Staff Director & Chief Counsel
                                     ------

        Subcommittee on Regulatory Reform, Commercial and Antitrust Law

                       SPENCER BACHUS, Alabama, Chairman

                     BLAKE FARENTHOLD, Texas, Vice-Chairman

    DARRELL E. ISSA, California          STEVE COHEN, Tennessee
    TOM MARINO, Pennsylvania             HENRY C. ``HANK'' JOHNSON, Jr.,
    GEORGE HOLDING, North Carolina         Georgia
    DOUG COLLINS, Georgia                SUZAN DelBENE, Washington
    KEITH ROTHFUS, Pennsylvania          JOE GARCIA, Florida
                                         HAKEEM JEFFRIES, New York

                          Daniel Flores, Chief Counsel

                          James Park, Minority Counsel

                                C O N T E N T S

                                  ----------

                                 MARCH 5, 2013

                                                                       Page

                                    THE BILL

    H.R. 367, the ``Regulations From the Executive in Need of
      Scrutiny (REINS) Act of 2013''.................................     6

                               OPENING STATEMENTS

    The Honorable Spencer Bachus, a Representative in Congress from
      the State of Alabama, and Chairman, Subcommittee on Regulatory
      Reform, Commercial and Antitrust Law...........................     1
    The Honorable Steve Cohen, a Representative in Congress from the
      State of Tennessee, and Ranking Member, Subcommittee on
      Regulatory Reform, Commercial and Antitrust Law................    27

                                   WITNESSES

    James L. Gattuso, Senior Research Fellow in Regulatory Policy,
      Thomas A. Roe Institute for Economic Policy Studies, The
      Heritage Foundation
      Oral Testimony.................................................    33
      Prepared Statement.............................................    35
    Eric R. Claeys, Professor of Law, George Mason University
      Oral Testimony.................................................    44
      Prepared Statement.............................................    47
    Ronald M. Levin, William R. Orthwein Distinguished Professor of
      Law, Washington University School of Law
      Oral Testimony.................................................    63
      Prepared Statement.............................................    65

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Material submitted by the Honorable Spencer Bachus, a
      Representative in Congress from the State of Alabama, and
      Chairman, Subcommittee on Regulatory Reform, Commercial and
      Antitrust Law..................................................     3
    Prepared Statement of the Honorable John Conyers, Jr., a
      Representative in Congress from the State of Michigan, Ranking
      Member, Committee on the Judiciary, and Member, Subcommittee on
      Regulatory Reform, Commercial and Antitrust Law................    28
    Prepared Statement of the Honorable Henry C. (Hank) Johnson, Jr.,
      a Representative in Congress from the State of Georgia, and
      Member, Subcommittee on Regulatory Reform, Commercial and
      Antitrust Law..................................................    31
    Prepared Statement of the Honorable Bob Goodlatte, a
      Representative in Congress from the State of Virginia, and
      Chairman, Committee on the Judiciary...........................    77

                                    APPENDIX
                   Material Submitted for the Hearing Record

    Material submitted by the Honorable Steve Cohen, a Representative
      in Congress from the State of Tennessee, and Ranking Member,
      Subcommittee on Regulatory Reform, Commercial and Antitrust Law   100
    Letter from the Honorable Kevin Cramer, a Representative in
      Congress from the State of North Dakota........................   116
    Prepared Statement of the Honorable Andy Barr, a Representative
      in Congress from the State of Kentucky.........................   118
    Letter submitted by Kristina Butts, Executive Director,
      Legislative Affairs, National Cattlemen's Beef Association.....   119
    Response to Questions for the Record from James L. Gattuso,
      Senior Research Fellow in Regulatory Policy, Thomas A. Roe
      Institute for Economic Policy Studies, The Heritage Foundation.   120
    Response to Questions for the Record from Eric R. Claeys,
      Professor of Law, George Mason University......................   122
    Response to Questions for the Record from Ronald M. Levin,
      William R. Orthwein Distinguished Professor of Law, Washington
      University School of Law.................................127
                           deg.OFFICIAL HEARING RECORD
          Material Submitted for the Hearing Record but not Reprinted

    Congressional Research Service Report titled REINS Act: Number and
        Types of ``Major Rules'' in Recent Years, submitted by the
        Honorable Steve Cohen, a Representative in Congress from the State
        of Tennessee, and Ranking Member, Subcommittee on Regulatory
        Reform, Commercial and Antitrust Law. This report is available at
        the Subcommittee and can also be accessed at:

            http://www.speaker.gov/sites/speaker.house.gov/files/
            UploadedFiles/
            110830_crs_majorrules.pdf

          ``REINS ACT OF 2013'': PROMOTING JOBS, GROWTH AND AMERICAN
                                COMPETITIVENESS

                                  ----------

                             TUESDAY, MARCH 5, 2013

                           House of Representatives,

                      Subcommittee on Regulatory Reform,
                          Commercial and Antitrust Law

                          Committee on the Judiciary,

                                Washington, DC.

        The Subcommittee met, pursuant to call, at 11:32 a.m., in
    room 2237, Rayburn Office Building, the Honorable Spencer
    Bachus, (Chairman of the Subcommittee) presiding.
        Present: Representatives Bachus, Goodlatte, Farenthold,
    Marino, Collins, Rothfus, Cohen, Johnson, DelBene, Garcia and
    Jeffries.
        Staff present: (Majority) Daniel Flores, Chief Counsel;
    Ashley Lewis, Clerk; Dave Lazar, Clerk; (Minority) James Park,
    Minority Counsel; Susan Jensen, Counsel.
        Mr. Bachus. The Subcommittee on Regulatory Reform,
    Commercial and Antitrust Law hearing will come to order.
        Without objection, the Chair is authorized to declare
    recesses of the Committee at any time.
        We welcome all of our witnesses today.
        The Chair recognizes himself for the purposes of an opening
    statement.
        Regulations help to implement policies Congress has
    established by statute. When issued, they should be reasonable,
    provide clear rules of the road for businesses, and benefit the
    public more than it hurts them. Today's regulatory system fails
    the test. The cost it imposes and the uncertainty it creates
    are choking America's economy and preventing the recovery of
    American jobs, growth, and global competitiveness.
        In its first term, the Administration imposed far more
    major regulations at a far greater cost than the preceding
    Administration. Just this December, the Obama administration
    revealed that it has 2,387 regulatory actions in its current
    agenda, and the White House admits that at least 128 of these
    regulations will have an impact on the economy of $100 million
    or more. According to the American Action Forum, the cost of
    this current agenda includes $123 billion in planned
    regulations. These regulations would add another 13 million
    man-hours in just paperwork alone.
        The Small Business Administration has confirmed that small
    businesses pay a disproportionate share of this regulatory
    burden. Indeed, the cost of regulatory compliance has been
    translated to about $11,000 per worker. Small businesses
    generate most of the new jobs in our economy; in fact,
    somewhere between two-thirds and 70 percent normally. However,
    in the past recession or the recession we are in, small
    businesses are lagging behind in job creation. In some
    estimates, they are creating less than half the new jobs, and I
    believe that that is almost entirely due to regulations, many
    of those in the financial sector.
        Imagine how much better off we would be if we could put
    that $11,000 back into the businesses to grow and hire workers.
    Federal Reserve Chairman Ben Bernanke himself expressed concern
    about the impact and cost of regulations on small businesses
    during his Humphrey Hawkins testimony last week before the
    Financial Services Committee. Chairman Bernanke said, quoting
    now, ``We all agree that the burden of regulation falls
    particularly heavily on small community banks which don't have
    the resources to manage those regulations very effectively.''
        It is time for action. Just as it cannot bear the ever-
    mounting weight of the Federal debt, the economy cannot bear
    the non-stop increase of high-cost Federal regulation. The
    REINS Act, passed by the House last year and reintroduced this
    term by Representative Todd Young of Indiana, provides a
    critical, simple, and long overdue course correction. It says
    one thing: when it comes to the most costly new regulations
    that Federal regulators propose, those regulations will not go
    into effect unless they can pass an up or down vote by the
    people's elected representatives.
        As an original cosponsor, I believe the REINS Act will help
    to restore accountability to the Federal regulatory process. It
    will help ensure that regulations are issued consistent with
    congressional intent and provide a needed check of the
    overreach that we have frequently seen from the unelected
    Federal bureaucracy. It will allow the American people to have
    a say in approving the most costly decisions that affect their
    lives and livelihoods.
        This reform could not be timelier. American workers and
    businesses are facing an historic regulatory tsunami from the
    Administration, not the least of which includes the impact of
    Dodd-Frank, Obamacare, and the Administration's climate change
    agenda. In that regard, I would like unanimous consent to
    introduce Carbon Power Politics from the Wall Street Journal on
    March 4, 2013.
        Mr. Cohen. Despite such an ominous title, I will be part of
    the unanimous consent.
        Mr. Bachus. Thank you. I can strike the title off. Thank
    you, Mr. Cohen.
        [The information referred to follows:]

                                   __________

        Mr. Bachus. The Administration has made plain that if it
    cannot persuade the people's representatives to adopt its
    legislative agenda, it intends to force that agenda on the
    people through regulation, and that is actually the subject
    matter of that article. Unless Congress intervenes and passes
    the REINS Act and other important regulatory reforms, the
    increasing tide of major Federal regulations will continue to
    destroy jobs, harm communities, and weaken opportunities and
    the ability of American workers to provide for their families.
        Enterprising small business owners like our witness from
    Baltimore last week will continue to face huge fines for
    failure to sign every copy of a triplicate regulatory form.
    Communities will continue to worry about their cement plants
    shutting down, as is the case in my district, just to clear the
    way for cement imports from dirtier plants in Mexico or China.
    Community banks will continue to be snuffed out as Dodd-Frank
    regulations make business possible only for banks that are big
    and can afford to hire an army of compliance officers.
        Our forefathers designed our Federal system of government
    to include an important system of checks and balances. The
    REINS Act is commonsense legislation that does that, and I
    invite all of my colleagues to work together to ensure it
    becomes law during the Congress and restore the sense of
    balance established in the Constitution.
        [The bill, H.R. 367, follows:]

                                   __________
        Mr. Bachus. At this time, I recognize the Ranking Member of
    the Subcommittee, Mr. Steve Cohen, for his opening argument.
    The gentleman from Tennessee is recognized.
        Mr. Cohen. Thank you, Mr. Chairman. I appreciate the
    opportunity.
        I do, though, have this weird feeling that I am somebody
    else today. I am Bill Murray, and it is February 2 again and
    again and again and again. This is the 18th time that this
    Subcommittee will have had hearings on this type of issue. It
    is the third time in the last 2 years that this Subcommittee
    has heard testimony on the REINS Act. It will be the 18th time
    that we have had hearings on the regulatory system.
        Last week I asked that the Subcommittee have limited,
    substantive, and nuanced discussions about ways that we can
    help with regulations, and I look forward to working with the
    Chairman on that. He mentioned small community banks. I am a
    big fan of small community banks. I bank at a small community
    bank. I was, I think, the first person in the House and one of
    the leaders in the House to suggest that FDIC insurance limits
    should be raised to $250,000 to keep small community banks'
    depositors from coming and taking the deposits out for fear of
    the catastrophes that we were experiencing at that time, and
    that happened.
        So I am a big supporter of small community banks, but I am
    not a big supporter of the REINS Act, which just makes no sense
    to me. Indeed, the bureaucrats are unelected, but they are
    knowledgeable, and they have expertise. And to take away from
    them and to put in the Congress on the second and fourth
    Thursdays only, if and when we are here, which is becoming less
    and less frequent, and give us a very limited time to have to
    approve or have a one-house veto, which is constitutionally
    suspect, regulations without expertise of the 435 of us, and we
    would have to approve, and the Senate would have to approve,
    and the president would have to approve, or there would be no
    regulation.
        That is an impossible task, and it means the end of
    regulations. And while I understand that bureaucrats are
    unelected, they do have expertise and knowledge, which we do
    not have.
        So this is a repeat of previous scripts, and I would love
    to have a hearing just on community banks and what we can do to
    help them. I have opposed the REINS Act. I will continue to
    oppose it because it just doesn't make sense, just like the
    sequestration is pretty much considered dumb by both sides. I
    think even Speaker Boehner said it is not a good way to do it.
    This is not a good way to do it. If there are regulations that
    are a problem, you deal with those regulations, but you don't
    give the Congress a massive ability to interrupt the regulatory
    process.
        This is mostly aimed at Affordable Care and Dodd-Frank. We
    had passed a ``jobs bill'' last time, last Congress, and it
    will result, if the rules and regulations are done in an
    appropriate way, in a lot of consumers being bilked of their
    finances from unscrupulous people trying to finance their
    companies, and we have a history of trying to look out for
    consumers, and should, and that is what the SEC has done in the
    past and what we will continue to do, hopefully, with rules and
    regulations.
        I am not going to go into all the nuts and bolts of what
    this would require--both houses, the president, joint
    resolution within 70 days, legislative days. It just makes no
    sense. I think Speaker Boehner used the word ``silly'' several
    times last week. When you go to the dictionary and you look up
    ``silly,'' it says ``see REINS Act.'' This is silly.
        This is also the type of legislation that I believe gives
    Congress a bad name. It is more political than it is
    substantive. It is not going to pass the Senate. And yet we
    could pass something to help community banks if we refined our
    subject matter, and I would like to see that happen. I hope we
    can.
        In calendar year 2010 alone, there were 94 major rules.
    This affects major rules, those over $100 million or so. There
    weren't enough legislative days to consider all of this, and
    Congress has trouble getting it together. We did approve Neil
    Armstrong's name on a space center last week, but to think we
    could go into these regulations and approve all of these with
    any sense of knowledge and certainty is dubious at best.
        So we will continue on with the hearing. It is unnecessary.
    Congress has many other ways to make the executive contour to
    what we would hope they would through the budget process,
    through oversight, and we have control and influence, and that
    is what we need. There needs to be a check and balance, and
    there needs to be a manageable system of implementing rules and
    regulations.
        Professor Levin, I am looking forward to his testimony, not
    that I am not looking forward to Mr. Gattuso's and Professor
    Claeys', but I know that Professor Levin is going to bring up
    the possible unconstitutionality of a one-house legislative
    veto. The Supreme Court held that to be unconstitutional. And
    Chief Justice Roberts, in discussing a law somewhat similar to
    this in 1983, said in a memorandum, ``Such legislation would
    hobble agency rulemaking by requiring affirmative congressional
    assent to all major rules and would seem to impose excessive
    burdens on the regulatory agencies.'' Chief Justice Roberts,
    who upheld the Affordable Care Act, is once again right.
        I yield back the balance of my time.
        Mr. Bachus. Thank you, Mr. Cohen.
        Mr. Cohen. If I can, Mr. Chairman, introduce Mr. Conyers'
    statement without the need to cite the outstanding arguments
    made therein but only introduce it into the record.
        Mr. Bachus. Absolutely.
        Mr. Cohen. Thank you, sir.
        Mr. Bachus. The full Committee Ranking Member, Mr. John
    Conyers' opening statement will be introduced into the record
    at this time.
        [The prepared statement of Mr. Conyers follows:]
    Prepared Statement of the Honorable John Conyers, Jr., a Representative
     in Congress from the State of Michigan, Ranking Member, Committee on
         the Judiciary, and Member, Subcommittee on Regulatory Reform,
                          Commercial and Antitrust Law
        H.R. 367, the so-called REINS Act, is a thoroughly problematic
    bill. This measure is not only unnecessary and unworkable, but it could
    seriously jeopardize the health and safety of millions of Americans who
    rely on an effective regulatory system. And, it represents yet another
    partisan, shortsighted attack against regulations.
        To begin with, H.R. 367 creates an unworkable process that will
    make it nearly impossible for new regulations to be enacted. The
    measure imposes unrealistic deadlines by which Congress must consider
    and pass exceedingly complex and technical regulations.
        Under H.R. 367, Congress would have only 70 legislative days within
    which to act after it receives a major rule.
        Now, let's put this in some perspective. Over the past few years,
    the average number of major rules promulgated each year is about 80. In
    2010, for instance, 94 major rules were issued.
        But keep in mind the following fact: there were just 116
    legislative days in the House that year.
        Worse yet, the bill restricts the days on which these major rules
    may be considered in the House, which, for 2012, was only 10 eligible
    days.
        Assuming there is just an average number of major rules, Congress
    would have to consider an average of 8 separate major rules on each of
    those days.
        Under H.R. 367, there is just no feasible way that Congress would
    have the time to consider all the major rules issued during the year.
        And, let's not forget that Congress already has the tools to review
    both major and non-major rules on an individual under the Congressional
    Review Act of 1996.
        Under this Republican-driven initiative, Congress can disapprove a
    rule, a power that it has exercised previously.
        Another concern that I have with the bill is that it would at a
    minimum significantly delay rulemaking and even worse bring it to a
    halt.
        Major rules are often the product of an intensive, multi-year
    process, based on extensive input received from the public and affected
    entities through a notice and comment period.
        Agencies often spend many months, if not years, to perfect theses
    rules based on feedback from these sources and their own expertise.
        Under the bill's short-circuited process, however, Congress will
    not realistically be able to second-guess the merits of these rules.
        When in doubt and in response to aggressive lobbying, Congress
    would likely decide not to approve rules. As a result, the health and
    safety of Americans would be jeopardized if needed regulations are
    stalled.
        Not surprisingly, more than 70 consumer groups, environmental
    organizations and labor unions, among other organizations, strenuously
    opposed a nearly identical version of this measure that was considered
    in the last Congress.
        In support of a veto threat, this is one of the reasons cited in
    the Statement of Administration Policy issued in the last Congress
    against the bill's predecessor.
        Specifically, the White House expressed concern that bill would
    ``throw all major regulations into a months-long limbo, fostering
    uncertainty'' which interferes with the effectiveness of the federal
    government's ability to protect ``public health, welfare, safety, and
    our environment.''
        Finally, H.R. 367 is yet another installment on the Majority's
    anti-regulatory agenda.
        Let's be honest. This bill is clearly intended to take regulatory
    power away from the agencies that have the requisite expertise, and
    give that power to Congress which is ill-equipped to make highly
    technical decisions.
        Just last week, the Subcommittee, in what was the 17th hearing on
    this subject matter, heard the well-worn, yet thoroughly false
    accusation that regulations kill jobs.
        As I noted at last week's hearing, if we were really serious about
    creating jobs, then we should be focusing on those measures that will
    actually result in creating jobs.
        During the last Congress, President Obama, in his address to a
    joint session of Congress, presented his American Jobs Act, a
    comprehensive bill that would have:

              cut payroll taxes for qualifying employers,

              fund a work program to provide employment
            opportunities for low-income youths and adults;

              fund various infrastructure construction projects,
            including the modernization of public schools; and

              start a program to rehabilitate and refurbish
            hundreds of thousands of foreclosed homes and businesses.

        Unfortunately, Congress chose to ignore this worthy initiative.
        As many of you know, I have a measure--H.R. 4277, the ``Humphrey-
    Hawkins 21st Century Full Employment and Training Act''--which aims to
    provide a job to any American who seeks work.
        My bill would create a funding mechanism to pay for job creation
    and training programs.
        These jobs would be located in the public sector, community not-
    for-profit organizations, and small businesses that provide community
    benefits.
        But, like the President's proposal, my legislation did not receive
    any consideration during the last Congress.
        This is very unfortunate because both of these measures would have,
    in fact, created jobs and helped our Nation's economic recovery.
        The American people deserve better.
                                   __________

        Mr. Bachus. If you want to introduce your full opening
    statement, I know you didn't take all your time, either.
        Mr. Cohen. I took enough time. Thank you.
        Mr. Bachus. All right.
        At this time, if there are no further opening statements,
    without objection, other Members' opening statements will be
    made a part of the record.
        [The prepared statement of Mr. Johnson follows:]

                                   __________
        We have a very distinguished panel today, and I will first
    begin by introducing our witnesses. Each of our witness'
    written statements will be entered into the record in its
    entirety. I ask that each witness summarize his or her
    testimony in 5 or 6 minutes. I am not going to be that
    stringent with the time, so don't think you have to read fast.
    Particularly to a Southerner, if you will read a little slower,
    I can follow it better. To help you stay within or just to know
    what the time is, we will have lights in front of you.
        Now, if I can have the bios of the members? I think we have
    had twice when we hadn't had those.
        Mr. James Gattuso is a research fellow in regulatory policy
    for the Roe Institute for Economic Policy Studies at the
    Heritage Foundation. Prior to joining Heritage, he was vice
    president for policy at the Competitive Enterprise Institute.
    In that position, he oversaw CEI's policy work and supervised
    the overall management of the organization. Before joining CEI
    in 1997, Mr. Gattuso had served since 1993 as vice president
    for policy development with Citizens for a Sound Economy, where
    he directed the research activities of that fine organization.
    From 1990 to 1993, he was deputy chief of the Office of Plans
    and Policy at the Federal Communications Commission.
        We welcome you, Mr. Gattuso.
        Professor Eric Claeys is a professor at the George Mason
    University School of Law. The professor has taught at the
    University of Chicago School of Law and St. Louis University
    School of Law. Prior to teaching, Professor Claeys practiced
    appellate and tort litigation at the law firm of Kirkland and
    Ellis. Professor Claeys clerked for the Honorable Chief Justice
    William Rehnquist and the Honorable Melvin Brunetti. Professor
    Claeys' scholarship focuses on American property in
    constitutional law, and particularly on the influence of
    American natural law and natural rights theory on the law. He
    graduated from Princeton University and received his J.D. from
    the University of Southern California.
        Our third witness is Professor Ronald Levin, who is a legal
    scholar at the Washington University School of Law in St.
    Louis, who specializes in administrative law and regulation law
    issues. He is 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 Ashbill and Brennan. He
    clerked for Judge John C. Godbold of the U.S. Court of Appeals
    for the Fifth Circuit in Montgomery. He earned his J.D. degree
    from the University of Chicago and his B.A. magna cum laude
    from Yale University.
        This is an excellent panel that we have assembled. We will
    now proceed under the 5-minute rule with opening statements.
        So, Mr. Gattuso, you are recognized first. Then I am going
    to go to Professor Claeys, and then Professor Levin.

       TESTIMONY OF JAMES L. GATTUSO, SENIOR RESEARCH FELLOW IN
    REGULATORY POLICY, THOMAS A. ROE INSTITUTE FOR ECONOMIC POLICY
                    STUDIES, THE HERITAGE FOUNDATION

        Mr. Gattuso. Thank you. Mr. Chairman and Ranking Member
    Cohen, Members of the Subcommittee, thank you for having me
    here today. Over the past few weeks, all eyes have been focused
    on Federal spending in efforts to limit an out-of-control
    budget. Obscure policy terms like ``sequestration'' have become
    household words across the country. However, Federal spending
    is only part of the burden imposed on Americans by the Federal
    Government. Regulations impose hundreds of billions, or even
    trillions, of dollars in additional costs. These burdens not
    only increase consumer prices but keep enterprises from growing
    and jobs from being created.
        During the past 4 years, the regulatory burdens placed on
    the American people and the economy have grown at a
    breathtaking rate. During President Obama's first 4 years in
    office, over 130 major rules increasing regulatory burdens were
    issued, imposing some $70 billion in new annual costs according
    to preliminary estimates we have done at the Heritage
    Foundation, based on agency calculations of their own costs.
        I will note that these numbers exclude budgetary transfer
    costs. It excludes other rules that do not have a regulatory
    effect. This is a subset of just those rules that constrain
    private activity. So this is the core amount of regulation.
        By comparison, about 50 such rules worth $15 billion in new
    costs were imposed during George W. Bush's term, and more
    regulation is on the way. According to the latest Unified
    Agenda of Federal Regulations, 131 new major regulations are
    already in the pipeline. That compares to 90 in process when
    President Obama took office, and only 56 in the spring of 2001.
        However, while regulatory growth has accelerated under
    President Obama, it did not start with his Administration. Each
    year for the past 30 years, according to the Office of
    Management and Budget, the burden of regulation imposed on
    Americans has increased. Not since 1982 have regulatory costs
    decreased.
        Not all regulations are unwarranted. No one is talking
    about eliminating airline safety rules or allowing contaminated
    meat to be freely distributed and sold. But there are volumes
    of rules not so well justified, ranging from the trivial--do we
    really need to paint an ``F'' at the front of the locomotive to
    tell which side is which--to the potentially catastrophic--
    should the Federal Communications Commission regulate the
    Internet.
        The constant increase in regulatory burdens is taking its
    toll on the economy at a time when the Nation can ill afford
    it. Firm action by Congress to rein in this growing red tape is
    needed. This should include requiring explicit approval of all
    new major rules by Congress as provided by the REINS Act,
    ensuring that burdens are not placed on Americans without the
    approval of their elected representatives.
        This would be a significant change in the way rules are
    issued. The effect, however, is to reinforce, not to upset, the
    constitutional balance. As a first matter, the change merely
    restores Congress' constitutional role of legislating, much of
    which has been delegated to regulators in the past. As
    important, the change constrains Congress as much as it
    empowers it by making legislators more accountable for their
    actions.
        Now, despite claims by opponents and some supporters of
    REINS, this legislation is not inherently anti-regulatory.
    Instead, it simply ensures scrutiny by Congress of all proposed
    rules, all proposed major rules. It would apply just as much to
    agency decisions that reduce regulatory burdens as it would to
    those that increase such burdens.
        Some critics say that the task of reviewing so many rules
    would be too burdensome for Congress. But while costly, the
    number of major regulations issued each year is in the low
    dozens typically, hardly an unmanageable number. Of these,
    about half are budgetary in nature, such as those setting
    Medicare reimbursement rates, and perhaps could be exempted
    from the REINS Act.
        In any case, it hardly makes sense to excuse Congress from
    the task of reviewing new rules because there are so many being
    imposed on the private sector. If anything, that would indicate
    a greater need to monitor the regulatory activity.
        Some also argue that the REINS Act would displace
    regulators' expert judgment with political decision-making. For
    example, one critic wrote that Congressional action under the
    REINS Act is ``likely to be nakedly political, reflecting the
    raw political power of public interests,'' while ``agency
    actions are backed up with reasonable policy determinations.''
        Outside of political science textbooks, that is not how
    government works. Regulators have their own interests and
    agendas, and political considerations, shockingly, do influence
    the process. Spend an hour in front of almost any agency in
    Washington and watch the lobbyists flow in and out if you doubt
    that.
        Most regulatory decision-making requires more than
    scientific expertise. It involves value judgments as to what
    burdens will be placed on the American people, what those
    burdens are, what size they are, and for what benefit. Such
    decisions properly involve Congress.
        Now, while the REINS Act would provide an important start
    toward taming excessive regulations, other steps are needed as
    well; among these, imposing sunset dates for Federal
    regulations. The REINS Act is a forward-looking reform,
    ensuring scrutiny of newly proposed rules. To ensure that the
    existing rules are justified and effective, they should
    automatically expire after a period of, say, 10 years if not
    explicitly reaffirmed by regulators through a notice of comment
    rulemaking.
        Secondly, we need to develop a congressional regulatory
    analysis capability. In order to exercise its duties under the
    REINS Act, Congress needs the capability to analyze proposed
    and existing rules independently, without reliance on the OMB
    or other regulatory agencies. This can be done through a new
    congressional Office of Regulatory Analysis, modeled on the
    Congressional Budget Office, or alternatively through existing
    congressional institutions such as the CBO or the Government
    Accountability Office.
        Congressional approval of proposed new rules as provided in
    the REINS Act would be an important step toward holding
    regulators in Congress accountable for regulations imposed in
    the private sector. While it is no panacea for the increasing
    flood of regulations, it would be a powerful first step toward
    reform. Thank you.
        [The prepared statement of Mr. Gattuso follows:]

                                   __________
        Mr. Bachus. Thank you, Mr. Gattuso.
        Professor Claeys?

      TESTIMONY OF ERIC R. CLAEYS, PROFESSOR OF LAW, GEORGE MASON
                               UNIVERSITY

        Mr. Claeys. Chairman Bachus, Ranking Member Cohen, Vice
    Chairman Farenthold, and Members of the Subcommittee, thank you
    very much for inviting me to testify. I am honored by the
    opportunity. With special respect to Ranking Member Cohen, I
    testified on this issue 2 years ago. So I, too, feel like it is
    Groundhog Day and sympathize with you.
        If I may, I would like to state orally four main points
    from my written testimony. First, Congress has constitutional
    authority to enact the REINS Act. Usually, Congress has
    extremely broad discretion to decide how to structure the
    executive administration of law. It may, and often does, write
    primary rules of conduct without the help of agencies and
    statutes. Congress can strip all executive agencies that
    currently promulgate rules of their rulemaking powers and
    convert those agencies into advisory committees for this Senate
    and this House's authorizing committees.
        The power to promulgate legislative rules becomes an
    executive power if, to the extent that, and under whatever
    constitutionally proper conditions Congress establishes using
    the necessary and proper clause. Under that clause, Congress
    may reasonably find it necessary and proper to recalibrate
    agency rulemaking powers to make agencies seek pre-approval
    from Congress for major rules before they take on the force of
    law.
        Second, the REINS Act is consistent with the holding of INS
    v. Chadha. Under Chadha, when a congress charges executive
    agencies to administer acts of Congress, it may not reserve the
    power to second-guess agencies' administrations of the law
    using so-called legislative vetoes. In response to such a
    legislative veto, Chadha holds, ``To accomplish what has been
    attempted by one house of Congress in this case,'' that means a
    legislative veto, ``requires conformity with the express
    procedures of the Constitution's prescription for legislative
    action, passage by a majority of both houses, and presentment
    to the president,'' 462 U.S. at 958.
        This holding doesn't say the Congress may never inject
    itself into the executive's administration of the law. Rather,
    it says if Congress chooses to inject itself into the
    executive's administration of the law, it may only do so by a
    legislative process respecting Article 1, Section 7's
    requirements of bicameralism and presentment. Under the REINS
    Act, joint resolutions of approval must be passed in both
    houses. By long-standing practice, it is assumed that such
    resolutions will be presented to the president. In Chadha's
    words, that process is ``in conformity with the express
    procedures'' of Article 1, Section 7.
        I would like to move from my testimony about the
    constitutional issues to my testimony about the merits. So,
    third, Congress may reasonably conclude that the REINS Act is a
    necessary and proper means to protect the rights of U.S.
    citizens more effectively than current Federal administrative
    law does. Congress is expected to use its constitutional powers
    to, in the preamble of the Constitution, secure the blessings
    of liberty to ourselves and our posterity; and, in the
    Declaration of Independence, to secure certain unalienable
    rights, among which are life, liberty, and the pursuit of
    happiness.
        Like statutes, if well crafted, legislative rules can
    secure rights--health, safety, the capacity to buy goods and
    services free from deception or misinformation, and so on. Also
    like statutes, however, when poorly crafted, legislative rules
    can threaten rights. More than 20 years ago now, I was honored
    to work for Congressman Ron Packard, Oceanside, California.
    Back then, the U.S. Army Corps of Engineers was promulgating
    wetlands regulations that, in his opinion and mine, unduly
    threatened property rights. Poorly crafted airport inspection
    regulations can threaten the privacy of U.S. citizens to be
    free from unreasonable searches and seizures. Poorly crafted
    health insurance regulations can coerce American citizens and
    American businesses to use their own salary or company accounts
    to cross-subsidize conduct that violates their religious
    consciences.
        At least for rules being scored as major rules, Members of
    Congress owe it to their constituents to consider carefully
    whether those rules advance their intended goals, with due
    respect for those constituents' unalienable rights.
        Last, some critics of the REINS Act believe that if the
    REINS Act is enacted, the REINS Act's joint resolution process
    will inject politics and special-interest groups into
    policymaking by apolitical regulatory agencies. With respect,
    in many cases I believe this view has things backwards. Now
    more than ever, the president closely supervises agency
    policymaking and injects a great deal of politics into it.
        At least as important, over the last 20 to 40 years
    legislators and policymakers have learned the theory of
    capture, and scholars have learned of the theory of public
    choice, and these capture and public choice theories teach us
    that special interests quite often exert much more influence in
    a regime where there is legislation and administration than in
    a regime where Congress were to do most of the legislating
    itself.
        I cite examples in my testimony involving flame retardant
    furniture regulation, benzene regulation, and a few others
    cases. There are many causes and mechanisms for special-
    interest group influence, and the REINS Act barely scratches
    the surface. But if you are concerned about special-interest
    influence, the REINS Act performs a crucial function. The joint
    resolution process forces public policy and special-interest
    politics back into the floors of Congress, and Congress must
    take accountability for the hard trade-offs between the two.
        And since the Chairman gave a little bit of grace, I am
    just going to use one case example. So there is an ongoing
    rulemaking right now in the Consumer Product Safety Commission
    about flame retardant furniture. In this, fire marshals
    petition for a rule, but the fire marshals were funded by
    tobacco companies. The furniture companies used health and
    safety studies to suggest that the chemicals to be used to
    protect the furniture to make them inflammable might be
    carcinogenic or threatening to the environment.
        I humbly submit that, first, it would be good for Congress
    to debate and to consider the scientific issues because the
    science here is so tentative that it becomes inescapably
    political.
        Second, there is a huge moral hazard issue that needs to be
    considered here, and I don't think the science is capable of
    considering it. In the backdrop, what drives the fires that are
    set by furniture when people fall asleep while holding
    cigarettes, and Members of Congress I think are at least as
    competent as scientists to decide whether the law would promote
    irresponsibility by letting people have a couch that protected
    them from the fact that they fell asleep with a cigarette in
    their bedroom or on their couch.
        Last, if there is special-interest politics, it would be
    healthy for the political process and the administrative
    process for debates about whether the safety arguments here are
    motivated by tobacco companies, and whether the health and
    environment arguments here are motivated by furniture
    manufacturers.
        Thank you very much, Mr. Chairman.
        [The prepared statement of Mr. Claeys follows:]

                                   __________
        Mr. Bachus. Thank you, Professor Claeys.
        Professor Levin, you are recognized.

    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. This hearing is being held in the shadow of the
    sequester. Indiscriminate budget cuts are going into effect
    because the two houses of Congress and the president don't
    agree on what to do about the budget. The sequester is a vivid
    symbol of much more because these days the House and Senate
    agree on very little. It is well known that the 112th Congress
    was the least productive Congress in at least 60 years by a
    wide margin of about 100 laws, and the 113th has good prospects
    of being similar.
        And yet the bill that is before you today in this hearing
    would provide that no major rule prepared by an agency could go
    into effect unless both houses of Congress and the president do
    agree with it. That suggests to me that if the REINS Act were
    enacted, major rulemaking on any controversial subject would be
    virtually impossible.
        In view of the extraordinary levels of ideological
    polarization and lack of compromise that we are seeing today,
    now is hardly a propitious time to consider a substantial
    increase in the responsibilities of the legislative branch. The
    upshot of the REINS Act could be that the dysfunction we now
    see in the enactment of laws would spread to the implementation
    of the laws, and I do not think that is an attractive prospect.
        If the act were enacted this year, the interference with
    the rulemaking process would affect a Democratic
    administration, but in the long run we will have both
    Democratic and Republican presidents, and this act would pose a
    major barrier to any president's ability to pursue the policies
    that he or she was elected to promote. In my view, gridlock in
    the rulemaking process is a poor idea no matter whether a
    Democrat or a Republican is in the White House. As Justice
    Scalia said about the legislative veto right after Ronald
    Reagan was elected, the legislative veto isn't biased against
    regulation. It is biased against change. The REINS Act, I
    think, operates very similarly and would have a similar effect.
        Now, it is true that some major rules are much less
    controversial, and it is not implausible that they could get
    through Congress in a reasonable period of time. But let's face
    it, these are matters that Congress delegated in the first
    place because it did not want to decide them on its own. Many
    of these matters are dry, technical, and complex, and Congress
    could very reasonably have thought that they should be left to
    specialized agencies because resolution of those questions
    within the legislature is not a wise or efficient use of
    congressional time.
        I see no reason why Congress should now retrospectively
    overturn all those judgments. It is much too late in the day to
    turn back the clock and question the legitimacy of delegation
    itself. We have a functioning system that has been evolving for
    generations and should not be lightly overthrown. That system
    allows the business of government to go on, but it also
    includes a good deal of accountability.
        Congress can be held accountable for its decision to set up
    new programs and empower agencies to implement them with
    rulemaking, and the executive branch is politically accountable
    for the rules themselves. I don't find anything illegitimate
    about this system. On the contrary, it is the REINS Act that
    threatens to overthrow long-established norms and may not even
    survive constitutional review.
        On the surface, the procedures of the act seem to comply
    with the law-making requirements of Article 1 of the
    Constitution. But when you look at it closely, you can see that
    it would enable a single house of Congress to nullify an agency
    rule without obtaining the concurrence of the other house or
    the president.
        In the legislative veto case in 1983, INS v. Chadha, the
    Supreme Court spent several pages emphasizing that the framers
    of the Constitution regarded the safeguards of bicameralism and
    presentment as fundamental precisely because they feared that
    action by a single chamber could often prove arbitrary.
        I think the sponsors of the REINS Act are being too
    optimistic when they assume that the Court would overlook the
    fact that the REINS Act would revive those very same dangers
    that Chadha and subsequent cases have sought to prevent.
        In my prepared statement I show that not only the U.S.
    Supreme Court but also appellate courts in more than a dozen
    states have strongly and almost unanimously resisted attempts
    by Congress and other legislatures to expand their control over
    agency action beyond traditional boundaries. The REINS Act
    might suffer a similar fate if it were enacted.
        In closing, Mr. Chairman, the REINS Act does have a clever
    name, suggesting reins that guide the horse along the path, but
    I believe the American people should not be saddled with it.
        That concludes my presentation, and I will be happy to
    respond to your questions.
        [The prepared statement of Mr. Levin follows:]

                                   __________

        Mr. Bachus. Thank you, Professor Levin.
        At this time, I will recognize the Chairman of the full
    Committee, the Judiciary Committee, Mr. Bob Goodlatte from
    Virginia, for questions.
        Mr. Goodlatte. Thank you, Mr. Chairman. Thank you for
    holding this important hearing. I want to commend you, and I
    want to commend Congressman Young of Indiana for his efforts in
    introducing this legislation here, the second Congress that he
    has done so. I think it is an important piece of legislation.
    And I apologize for not getting here when opening statements
    were given, so I will submit mine for the record and go right
    to the questions.
        [The prepared statement of Mr. Goodlatte follows:]
    Prepared Statement of the Honorable Bob Goodlatte, a Representative in
      Congress from the State of Virginia, and Chairman, Committee on the
                                   Judiciary
        Economic growth is the key to recovery of job creation, the success
    of Main Street businesses and the hope of America's global
    competitiveness. With robust economic growth, America can solve a host
    of the problems that confront us--from high unemployment to fading
    American competitiveness.
        America's current growth rate, however, is anemic. In 2010, real
    GDP increased only 2.4 percent. In 2011, the rate of growth shrank to
    1.8 percent. Although final figures for 2012 are not yet in, growth in
    the fourth quarter of 2012 was an abysmal 0.1 percent.
        Employment figures are no better. In January 2013, real
    unemployment remained mired at 14.4 percent. Nominal unemployment rose
    to 7.9 percent. Behind these figures are millions upon millions of
    struggling American faces, many who have been living without work for
    many, many months. Economic experts have said that this represents, not
    just a lingering economic downturn, but a jobs depression.
        Other figures paint the picture still bleaker. The number of small
    businesses being created--the primary source of new jobs--has declined.
    America's national debt is skyrocketing. Record levels of Americans are
    on food stamps. The number of Americans on Social Security disability
    is at record levels, too. Many say this is because millions are turning
    to disability claims to substitute for unemployment insurance.
        Poverty is knocking hard on millions of Americans' doors. National
    bankruptcy, meanwhile, is knocking hard on America's door.
        Everyone knows it has been this way for far too long. But the Obama
    Administration, instead of fixing the problem, knows only one
    response--increase taxes, increase spending and increase regulation.
        As a result, the Obama Administration has proven one thing better
    than any other administration in history. America cannot tax, spend and
    regulate its way to economic recovery, economic growth and durable
    prosperity for the American people.
        The Judiciary Committee has broad jurisdiction over one of the
    three major strands of this economic knot that the Obama Administration
    has tied, and America must untie. That strand is the federal regulatory
    system--a system that every day places more and more obstacles in the
    path of economic growth. It is my intention as Chairman to do
    everything that the Judiciary Committee can to achieve real regulatory
    reform and help provide the growth and recovery America needs.
        The REINS Act is one of the simplest, clearest and most powerful
    measures we can adopt to further that purpose. The level of new major
    regulation the Obama Administration has issued and plans to issue is
    without modern precedent. Testimony before the Judiciary Committee this
    term and during the 112th Congress has plainly shown the connection
    between skyrocketing levels of regulation and declining levels of jobs
    and growth.
        The REINS Act responds by requiring an up-or-down vote by the
    people's representatives in Congress before any new major regulation
    can be imposed on our economy. It does not prohibit new major
    regulation. It simply establishes the principle, ``No major regulation
    without representation.''
        By restoring to Members of Congress, who are accountable to the
    American people, the responsibility for America's costliest regulatory
    decisions, the REINS Act provides Congress, and ultimately the people,
    with a desperately needed tool to check the one-way cost ratchet that
    Washington's regulatory bureaucrats incessantly turn.
        During the 112th Congress, the Judiciary Committee originated a
    number of regulatory reform bills that the House passed on a bipartisan
    basis. The REINS Act was one of them. I encourage all of the Members of
    the Committee to assure that the REINS Act is reported out of this
    Committee once more and is passed on an even greater bipartisan basis
    in the 113th Congress. The REINS Act is not a partisan issue. It is a
    paramount institutional and national issue. All Members of Congress
    should step forward to rein in the federal government's costliest
    decisions.
                                   __________

        Mr. Goodlatte. Professor Levin, I was interested in what
    you had to say, your observations about the intrusion of the
    legislative branch into the authority of the executive branch.
    Let me just say, and I will get to a specific question in a
    moment, but I quite frankly think that whether by deliberate
    act of the Congress writing legislation that is giving
    tremendous authority to the executive branch or, as many people
    think, the executive branch overstepping their authority and
    taking and reinterpreting legislation passed by the Congress
    and twisting it into new ways to do new things, either way,
    there has been a dramatic shift in power here in Washington
    between the legislative branch and the executive branch, and it
    very much concerns me. So I am all for putting the reins to
    that with legislation like this.
        I hear you say you think this may be unconstitutional. Both
    Justice Stephen Breyer and Professor Laurence Tribe have
    written articles opining that congressional pre-approval
    mechanisms would be consistent with Chadha. Can you summarize
    why they think pre-approval would be constitutional and explain
    why you disagree with them?
        Mr. Levin. Yes, sir. I do know Justice Breyer's article, or
    Judge Breyer's article, as he was then. I believe he did not
    endorse the system that he was outlining. He was explaining a
    method by which you might set up such a system. At that time, I
    don't think you had the same problem of intense polarization
    that you have now. Justice Breyer himself got his seat on the
    Court with strong Republican support because he had worked
    cooperatively with them. He was a Democrat who had worked on
    deregulation, and I don't think he would necessarily take the
    same view today, because Justice Breyer in his scholarship is
    very interested in things that work out well. He is a
    pragmatist, and under current circumstances I am not sure he
    would think it is a good idea.
        Mr. Goodlatte. But he did opine at that time that a pre-
    approval process would be constitutional.
        I want to ask Professor Claeys if he would like to offer
    his observations on the same question. First of all, do you
    think a pre-approval process is constitutional, and do you
    think that Justice Breyer's and Professor Tribe's articles are
    consistent with your point of view?
        Mr. Claeys. Yes, Mr. Chairman, I do. I think that then
    Judge Breyer and Professor Tribe's articles are persuasive on
    their own, and they are also useful to the Committee. If the
    Committee is trying to do a litigation assessment, how likely
    it is that there is going to be a constitutional challenge, I
    think that then Judge Breyer's and Professor Tribe's articles
    give you a sense of what the conventional wisdom is about how
    the Chadha case is interpreted.
        So the Chadha case has some loose language, and any good
    appellate lawyer can cherry-pick out a few pieces of language
    from one case and another case and another case and string
    those together to say that these cases all together suggest a
    certain result. But case reasoning also requires that you take
    some language from the cases more seriously than others.
        In my opening statement I gave you one of what I consider
    two or three money passages of the Chadha case, and I think
    those money passages suggest that Congress gets into trouble if
    Congress tries to institute some kind of chokepoint using a
    Committee veto, a one-house veto, or a two-house veto without
    presenting the two-house veto to the president. Anything beyond
    that is kind of the looser language of the dicta of the case.
        It is telling that Judge Breyer and Professor Tribe said,
    then, that it would be--Congress could accord it with a
    respect, the Chadha holding, if it enacted a system that used
    what Judge Breyer called confirmatory acts.
        Mr. Goodlatte. Thank you very much. My time is running out.
    I do want to get one more question in to Mr. Gattuso.
        In your view, what current regulatory efforts by the Obama
    administration most highlight the need for reforms like those
    in the REINS Act, and why, and how do these regulations
    threaten jobs and growth? With the 30 seconds or so that is
    left in my time.
        Mr. Gattuso. I think the Obama administration has been
    moving forward at a rapid clip on a large number of fronts, and
    I don't think we have seen any Administration move forward on
    so many at the same time. If I had to name one, I would point
    to the Dodd-Frank implementation, where there are still
    hundreds of regulations yet to be made, and we have no idea
    what they are going to say. The language has been incredibly
    vague for some aspects, such as the Volcker rule. The agencies
    themselves don't see any way of implementing it in a way that
    makes sense. And we have new institutions such as the Consumer
    Financial Protection Bureau, which is completely insulated from
    any sort of oversight from other sources.
        So I think that is perhaps the single biggest danger out
    there right now, although there are plenty to choose from.
        Mr. Goodlatte. Thank you, Mr. Chairman.
        Mr. Bachus. Thank you.
        At this time I will recognize the Ranking Member of the
    Subcommittee, Mr. Steve Cohen of Tennessee, for his round of
    questioning.
        Mr. Cohen. Thank you, sir.
        Mr. Gattuso, you just said to the Chairman of the full
    Committee that there were hundreds of regulations that you
    would be concerned about?
        Mr. Gattuso. What I said was that under the Dodd-Frank law,
    there are still hundreds of regulations yet to be promulgated.
        Mr. Cohen. Right, and in your testimony you said that while
    costly, the number of major regulations each year is in the low
    dozens. And yet the data that the Government Accountability
    Office puts out says there were 237 major rules during
    President Bush's first term, 268 plus the 11 that happened
    during the first months of the Obama administration, no more
    than that.
        How do you reconcile those differences in numbers?
        Mr. Gattuso. Well, the hundreds of rules that I cite for
    Dodd-Frank include all rules. There are over 3,000, typically,
    in a year.
        Mr. Cohen. So how many major rules do you submit are
    approved each year?
        Mr. Gattuso. It varies, but it is typically in the 60's or
    70's. It goes up. Sometimes it can be over 100. Sometimes it
    will be less.
        Mr. Cohen. Yes, that's right. It was 70, 51, 50, 66, 56,
    56, 61, 95, 84, and 100. In your testimony it says it is in the
    low dozens. Well, I guess low is low compared to 1,000 dozens,
    but low dozens is generally what you think of as one or two or
    three, and we are talking about--six may be low dozens, but
    that is a lot.
        Do you keep up with Congress? Are you a C-SPAN guy?
        Mr. Gattuso. I try and watch it when going to sleep, yes.
        Mr. Cohen. It is not addictive, so that is good. You
    realize we are having problems getting things done right now.
    How many of these rules do you think that the Senate and the
    House and the president would agree on? In the low dozens, how
    many of those low dozens do you think would have a chance of
    getting through?
        Mr. Gattuso. I can't estimate that, but most are not
    controversial. Also, and I point this out in my testimony,
    close to half--I don't have the exact number, but a large
    number of those are budgetary transfer rules, which are really
    outside the scope of what we are trying to get at with the
    REINS Act.
        Mr. Cohen. So if most of them are not controversial, why
    should we be burdening ourselves with this?
        Mr. Gattuso. To find out which ones are controversial and
    which ones are objectionable.
        Mr. Cohen. And the Committee has to do this within 15 days
    of submission. Do you think the Committee, within 15 days of
    submission--and sometimes we aren't even here for 15 days. But
    when we are here, we are here for maybe 1 day each of
    Subcommittee, 1 day a week. How many of these rules can we go
    through to find out which ones are substantive, and then debate
    those substantive ones in an intelligent manner?
        Mr. Gattuso. Well, I do know that the Congress spends a lot
    of time on other issues that are not quite so important. I
    think there were over 100 post offices that were named by the
    Congress in the last session.
        Mr. Cohen. We quit doing post offices. In fact, we are
    going to quit the postal authority, probably.
        Mr. Gattuso. I think that it is difficult to go to a small
    business, for instance, with a straight face and say that we
    are sorry about these billions of costs that we are imposing on
    you, but we don't have time to look at them to decide whether
    they are worthwhile or not.
        Mr. Cohen. Let me ask you this question. What is your
    opinion of Congress' work product? You mentioned that we passed
    all these post offices and we don't do much, and you watch C-
    SPAN to go to bed. You don't have a very high opinion of
    Congress, do you?
        Mr. Gattuso. I do have a high opinion of Congress. I think
    that Congress has the responsibility to decide what rules
    should be applied to all Americans and has the moral authority
    based upon their election by the people to decide that. I think
    they should be limited, but they also should do their job.
        Mr. Cohen. You mentioned lobbyists, and you say that the
    lobbyists are involved somewhat with the regulatory agencies.
    Can you imagine the field day lobbyists would have if all they
    had to do was take one Subcommittee and one portion of the
    House or one Committee to defeat a rule, that one Committee
    could defeat a rule? Do you think there would be lobbyists up
    here trying to influence a Committee to not pass a rule?
        Mr. Gattuso. I think there are lobbyists up here, and there
    are also lobbyists that have one agency. It certainly is a lot
    easier to influence one agency at that chokepoint.
        Mr. Cohen. Do lobbyists make contributions to the people on
    the agencies? They don't. And do lobbyists help endorse people
    that run for the agency? No. But they endorse, and they give
    contributions, and they could be up here trying to have their
    influence, and that is where they have their influence. That is
    where they do that voodoo that they do so well. So it just
    creates a real problem.
        Professor Levin, do you have any comments you would like to
    make in the last minute here on what has been testified to by
    the other parties?
        Mr. Levin. Yes. With respect to the influence of lobbyists,
    there are political science studies that show that in the
    legislative veto days, special-interest influences were
    substantial and had an impact on the way those operated in the
    states.
        Secondly, with regard to the post office bills and the
    like, first of all, the total product of this last Congress
    would be even lower if you didn't have the post office bills
    building up their total. But more fundamentally, I think
    Congress could make time for major rules or other things if
    they cut out fundraisers, constituent service, district visits,
    and ceremonial bills, but I don't think those are the things
    that would be eliminated, because those are matters that serve
    the political interests of Members directly.
        Mr. Cohen. Mr. Chairman, can I ask for 20 seconds?
        Mr. Bachus. Yes, sure.
        Mr. Cohen. I am just curious, and I don't know that a
    lawyer is supposed to ask a question he knows the answer to,
    but when the Chairman was asking you about Breyer's and Tribe's
    opinion, was that on a similar system to where there was a veto
    by either house, or was it the pre-approval?
        Mr. Levin. It wasn't anything specific. It was just a
    thought experiment, I would say, and it wasn't the same as the
    REINS Act because it would not have provided that, once a
    matter is approved, it would nevertheless be subject to APA
    review on all grounds, which this bill contemplates.
        Mr. Cohen. All Judge Breyer and Mr. Tribe were saying is
    that they thought whatever that was, it was constitutional.
    They did not come to a value judgment, like Justice Roberts
    did, to say that it was bad policy.
        Mr. Levin. Justice Breyer, Judge Breyer said he was quite
    skeptical of its merit. He was putting forth an idea, but he
    indicated that he would be doubtful about it.
        Mr. Cohen. So he concurred with Justice Roberts. Thank you.
        Mr. Bachus. Thank you.
        Now I would recognize the gentleman from Pennsylvania, Mr.
    Tom Marino, for questions.
        Mr. Marino. Thank you, Chairman.
        Good afternoon, gentlemen. Thank you for being here. I love
    constitutional law. I was a prosecutor, but I thoroughly enjoy
    constitutional law. Maybe perhaps someday, each of us together,
    one-on-one, can have lunch and I can bore you with my
    positions, and you can educate me as to what is going on. I
    think in my second life I want to study more constitutional law
    and teach it, if possible. But I respect all of your opinions.
    You are very bright men.
        Professor Levin, am I pronouncing that right? I will start
    with you for a moment. Why not let the process work?
    Legislation, and the courts refer to it--Chadha was an opinion
    handed down by the Burger Court, and I read the case, but it
    was a cursory reading, again, not the detail that I would read
    it for in law school. But that was in 1983.
        The mood of the people has changed. Big government,
    invasion by agencies with ridiculous legislation, with
    administrative laws, for an example, the EPA trying to get
    control over the waterways by saying a rain puddle, they would
    have control over that because it is water and it is in a
    puddle, and they want control over it. Spilled milk on a farm,
    they wanted control over that as well. I could go on and on.
        But Rehnquist and White handed down a rather, I think,
    excellent dissenting opinion on the one-house legislative veto
    in violation of the separation of powers, and Rehnquist went
    into detail on specifically and very narrowly saying it is the
    intent of Congress. Can you show me where Congress did not have
    this intent that you are referring to as to why you think it is
    unconstitutional?
        Mr. Levin. Well, first, with regard to the antiquity of the
    Chadha decision, I think the Supreme Court's subsequent
    decisions have relied on it directly. They have never
    questioned it. A dozen state supreme courts have reached very
    similar positions under their respective state constitutions.
    The case law is overwhelming in suggesting that the
    bicameralism and presentment restraints should be effective in
    circumstances like this. I don't think Chadha is out of date at
    all.
        Mr. Marino. I am not saying Chadha is out of date. I am
    just saying the mood has changed since that opinion has been
    handed down. Now, I am not one to determine or to take a guess
    on where the Supreme Court is going on any decision. But let's
    get back to the issue of intent.
        Mr. Levin. I am not sure what you mean by intent, though.
    Obviously, Congress intends to do things, but it is sometimes
    not constitutional to do them.
        Mr. Marino. Well, isn't that the way the process works,
    then? And then the courts, when they are brought in, make that
    determination? And don't you think that in the Affordable
    Health Care Act, at least I inferred from Chief Justice
    Roberts' opinion that, Congress, you legislate, and when it is
    necessary, then we will come in and make a ruling on that
    legislation?
        Mr. Levin. Well, so you could pass the REINS Act and see if
    it is constitutional or not. But I think you should, in
    prudence, spend your time on things that have a good chance of
    surviving review, as opposed to things where the prospects are
    poor. It is your choice.
        Mr. Marino. I was never one to back down from a fight,
    whether the prospects are poor or not, or whether the Senate is
    going to vote on it. You certainly made it clear that Congress
    hasn't done much, but I think the 40 pieces of legislation on
    Harry Reid's desk in the Senate that we sent over there that
    haven't been accounted for says a little bit that the Congress
    has been trying to work hard on both sides of the aisle here in
    the House.
        Professor Claeys, could you respond to the intent issue
    concerning Chadha and where we are going with the REINS Act?
        Mr. Claeys. I will do my best, Congressman. I will make a
    few points.
        First, I think this Congress, forgetting about the
    assessment of the constitutional merit, should be prudent and
    ask itself how likely is it that the act is going to be
    declared unconstitutional or not, just because it is a
    significant investment of time to enact the law. But I think
    that the chances that this law would be afoul of Chadha are
    slim. I am not sure Professor Levin disagrees that much,
    because he says he is not convinced in his testimony that
    Chadha will be read narrowly, and he says courts might be
    disinclined to read REINS as a violation of Chadha.
        Second, this Congress, though, is an independent co-equal
    actor, and it has a responsibility to run down constitutional
    questions. So, as I said in my written testimony in my opening
    statement, I think there is no Chadha problem here.
        So last, I don't think Chadha has to be overruled. All that
    needs to happen is for courts to say this law satisfies the
    expectations that Chadha laid down.
        Mr. Marino. Mr. Gattuso, just briefly. My time, if not out,
    is running out.
        Mr. Gattuso. On Chadha?
        Mr. Marino. Yes.
        Mr. Gattuso. I think it is an odd argument to say that
    REINS would be tantamount to a one-house veto. Frankly, that
    argument proves way too much, in my view. That would seem to
    cover every legislative action by Congress where if the House
    or the Senate refused to pass a bill, it is blocked, or the
    REINS Act itself was passed by the House and not the Senate,
    was that a one-house veto? I think for that argument to work,
    there has to be something in the nature of the regulations that
    are being reviewed that is particular to the executive branch
    where the Congress does not have the power to revoke that
    authority.
        In every one of the regulations that would be covered by
    REINS, every one of the 130 regulations that we have identified
    coming from the Obama administration are legislative. They are
    not executive. Congress can withdraw them completely. So I see
    nothing special about them that would make that different than
    other legislation.
        Mr. Marino. Gentlemen, I leave here today learning
    something from each of you. I appreciate the discussion, and
    thank you for being here. I yield back.
        Mr. Bachus. Thank you.
        The gentleman from Georgia, Mr. Hank Johnson, is now
    recognized for his questions.
        Mr. Johnson. Thank you, Mr. Chairman.
        Mr. Gattuso from the Heritage Foundation, do you have any
    idea how much money the Koch brothers have invested in the
    Heritage Foundation since its inception?
        Mr. Gattuso. No, I don't. I can tell you that our total
    corporate donations are in the neighborhood of 5 percent of our
    income.
        Mr. Johnson. But that doesn't include the Koch brothers'
    money, though.
        Mr. Gattuso. That would include the Koch brothers'
    corporate money. It is not a large part of our basis.
        Mr. Johnson. Come on. That sounds like horse poop to me.
        Mr. Gattuso. Our donor lists are open. I can get you that
    information.
        Mr. Johnson. Mr. Claeys, how much has George Mason
    University Law School received from the Koch brothers? Do you
    have any idea?
        Mr. Claeys. No, Congressman, I don't have any idea.
        Mr. Johnson. But you do know that it has been--it has taken
    money from the Koch brothers; correct?
        Mr. Claeys. I don't know that it has. I would not be
    surprised if it had.
        Mr. Johnson. Okay. All right.
        How about your institution, Professor Levin?
        Mr. Levin. I have no idea.
        Mr. Johnson. Okay. All right. Well, I haven't heard any
    reports about Koch brothers' money into your institution.
        Mr. Levin. But if they know what I stand for, they would
    probably not contribute it, at least to me.
        Mr. Johnson. Well, I would think not, based on what I have
    heard today. I will say that your analogy or your observation
    about the gridlock that is the most prominent feature of
    congressional activity these days, as evidenced by the
    sequester situation, which I think most folks would say is just
    this meat ax, meat cleaver approach to cutting the Federal
    Government, is not wise. I am sure that most would agree. I am
    sure that Mr. Gattuso and Mr. Claeys would agree with that
    also.
        Oh, you do not? Okay. All right. Mr. Claeys does not agree
    that the meat ax is not a good way, or the meat ax is
    preferable to the surgeon's scalpel in terms of cutting the
    Federal budget.
        But I will say your analogy about the gridlock, with that
    being Exhibit A, is a good reason why, from a practical
    standpoint, passage of the REINS Act would be a bad idea.
        Mr. Gattuso, you would disagree with that?
        Mr. Gattuso. Well, you said this is a meat ax approach. I
    don't see it that way.
        Mr. Johnson. No, I am off of that issue. The issue I want
    you to address is the current gridlock in Congress and whether
    or not, in light of that gridlock, what would passage of the
    REINS Act add positively to the ability of Congress to get
    things done?
        Mr. Gattuso. Well, to start, I don't think that the measure
    of success for government should be the number of laws that are
    passed or the number of regulations that are enacted. That is
    not success. The success should be the value to society, the
    consideration and deliberation of each rule, of each action
    that is taken. So the REINS Act would add to that by requiring
    consideration, more thorough consideration of every action.
        Mr. Johnson. So your goal is to just cut down on the number
    of laws and the number of regulations so as to free up the free
    market system to work its will for the benefit of all.
        Let me ask you this, though. Let me ask you this. China,
    the pollution in Beijing, due largely to unregulated burning of
    fossil fuels, and the health impact that that has on the blood
    and on the lungs of the people in China, and also the people in
    Japan and across the water, is that a regulatable situation? Is
    there any economic value in protecting people's health?
        Mr. Gattuso. The last I checked, Congressman, China was
    still a communist country, and a large portion, the predominant
    portion of its industry and businesses are still state owned or
    state controlled. It is not an example of a free market
    economy.
        Mr. Johnson. The problem we are talking about is
    regulations, though.
        Mr. Gattuso. It is not a free market economy.
        Mr. Johnson. Isn't regulation good when it comes to
    protecting people's health?
        Mr. Gattuso. I think you can point to China as an example
    of where the government has taken a firm hand in controlling
    industry, in directing industry.
        Mr. Johnson. They don't have any regulations over in China,
    though.
        Mr. Gattuso. They have government ownership. They have
    direct government control over these factories and these
    industries, and it is the government that has been the major
    polluter, not any independent private sector.
        Mr. Johnson. Well, you can look at a horse pile of poop on
    the trail as you ride up on a summer afternoon, and you can
    smell it, and then you tell yourself that I am not smelling
    horse poop. You can do that all day, but the bottom line is it
    is horse poop in the road. You need to step over it and move
    forward.
        I will yield back.
        Mr. Bachus. Thank you, Mr. Johnson.
        Mr. Rothfus, the gentleman from Pennsylvania, is recognized
    for questions.
        Mr. Rothfus. Thank you, Mr. Chairman.
        Thank you, panel, for being here today. I have enjoyed this
    conversation. Like Congressman Marino, it is like I am back in
    law school.
        I appreciate the comments I have heard about yet another
    hearing on regulatory issues. I suggest that the reason that we
    are here again is because the more people learn about how we
    have empowered unelected elites to micromanage us, the more
    they want a check on that power. The actions of these elites
    are resulting in lost coalminer jobs and power plant worker
    jobs in Western Pennsylvania. The actions of these elites are
    also threatening the health insurance plans of people in
    Western Pennsylvania, and therefore their access to healthcare.
        Criticism of rule by elites is not of recent vintage. In
    1981, President Reagan in his inaugural said that from time to
    time we have been tempted to believe that society has become
    too complex to be managed by self-rule, that government by any
    elite group is superior to government for, by, and of the
    people. But if no one among us is capable of governing himself,
    then who among us has the capacity to govern someone else?
        I have long had a concern over the abdication by Congress
    of its constitutional duty to legislate. There is a belief
    among some that society is just too complex for 535
    individuals, 435 here in the House and 100 across the Capitol
    in the Senate, to come up with the legislation necessary for a
    properly functioning society. I reject that premise.
        Mr. Gattuso, I would like to just go over some of the
    recent regulations that we are seeing coming out and just get
    your opinion. Do you believe that 535 Members of Congress might
    be able to conclude whether carbon dioxide is an air pollutant
    under the Clean Air Act?
        Mr. Gattuso. I think that they are capable of making that
    decision.
        Mr. Rothfus. Would Congress be able to take hearings on
    that issue and make a deliberative decision on that?
        Mr. Gattuso. I think you can.
        Mr. Rothfus. Do you believe that 535 Members of Congress
    might be able to review the Secretary of Health and Human
    Service's dicta of what must be in every person's health care
    plan and make a reasoned judgment on whether that is a good
    idea or not?
        Mr. Gattuso. Absolutely.
        Mr. Rothfus. And do you believe that 535 Members of
    Congress have the capacity to determine what a qualified
    mortgage should be, whether we should require a 10 percent down
    payment, a 15 percent down payment, a 20 percent down payment?
        Mr. Gattuso. Not only that, but they are able to decide
    whether the government can decide that for consumers.
        Mr. Rothfus. I would like to ask the professors a little
    bit about the constitutionality issues. Isn't this really yet a
    further condition precedent to a regulation becoming effective?
    It is inchoate in the sense that we have requirements that a
    regulation should go through, and yet we have established one
    more requirement in the REINS Act where it will not even become
    effective until it has been approved by Congress. Can you
    comment on that, professors?
        Mr. Levin. That is exactly the argument that was made on
    behalf of the legislative veto in its day, that it was just a
    device that Congress attached to the Immigration and
    Nationality Act to be a condition precedent for deportation
    decisions, and the Supreme Court gave that no weight because it
    undermined the heart of the bicameralism and presentment
    requirements. I think the same would be true in this instance.
        Mr. Rothfus. But when we have legislation that we know is
    going to be subject to this, can't the Congress be considerate
    of that? When we delegate to a regulatory agency to come up
    with a regulation, under REINS we would know that that is going
    to come back to the Congress for review.
        Mr. Levin. Well, if I may comment on your previous
    characterization of this as rule by elites, I think that the
    process that 535 Members established is actually a pretty sound
    one. They make some decisions themselves. They leave others to
    the executive branch through a delegation, and the executive
    branch's decisions are subject to political accountability
    because presidents make decisions and they run on their record,
    and in this instance President Obama ran on his record of
    regulation. It was squarely an issue in the last campaign. It
    was hotly debated on all sides. He was reelected, and I think
    the people spoke, although not everybody seems to have heeded
    that message.
        Mr. Rothfus. Professor Claeys?
        Mr. Claeys. So with respect to Professor Levin, I disagree
    on several points. First, there is a huge difference between
    Congress being able to--there is a huge difference between the
    legislative veto and the REINS Act. In the legislative veto,
    Congress is saying we want the administrative process always to
    go forward, and then we want discretion for one house, both
    houses or a Committee to interject and stop one particular
    action.
        There is a huge difference between that set of affairs and
    another set of affairs where Congress says even though most of
    the time rulemaking has advantages, we don't want those
    advantages to be here because we are so worried about the
    impact on the economy or the threat to rights. So we want to
    slow things down, and we want to take ownership of the basic
    policy choices. I don't think that any judge who is at all
    practical or is a functionalist, in the way that Professor
    Levin talks about in his testimony, would ignore that
    difference.
        And--well, I will just stop there.
        Mr. Rothfus. Thank you.
        Thank you, Mr. Chairman. I yield back.
        Mr. Bachus. Thank you.
        At this time, I would like to recognize the gentlelady from
    California--from the state of Washington. I am sorry.
        Ms. DelBene. I am proud to be from the state of Washington.
        Mr. Bachus. Ms. Susan DelBene.
        Ms. DelBene. Thank you, Mr. Chair.
        Mr. Bachus. I want to express my appreciation to you,
    before your 5 minutes starts, for being a part of the civil
    rights pilgrimage this weekend to Alabama, where we remembered
    the 50th-year anniversary of the integration of the University
    of Alabama, but also some sad events, the bombing of the 16th
    Street Baptist Church, Martin Luther King's imprisonment in the
    Birmingham jail. It was a very meaningful weekend for all of
    us. I know Mr. Cohen has participated in that pilgrimage on
    many occasions, and I want to express my appreciation to both
    of you for investing that time. I think you both gained
    valuable insight.
        Ms. DelBene. Thank you, Mr. Chair. I was born in Alabama,
    as you know, so it was also incredibly important for me to have
    the opportunity to participate. So, thank you.
        Mr. Bachus. Thank you.
        Ms. DelBene. And thank you to all of you for being here
    today and taking your time and speaking with us. I really
    appreciate it.
        Mr. Gattuso, you talk in your testimony about the cost and
    burden of regulations, and you cite this in your submitted
    testimony, and we talked about this a bunch today. But if we
    really look at a cost-benefit analysis, do you ever think that
    there are benefits to regulations? And is it important that we
    take that into account?
        Mr. Gattuso. Certainly. There are many benefits, and many
    regulations are well justified, as I said in my testimony.
        I think we have to look at some of the benefit estimates
    that have been made with maybe a grain of salt. For instance,
    there are quite a few recent regulations where the benefits
    that are claimed have little to do with the advertised purpose
    of the regulation. For instance, if you look at CAFE standards,
    the gains for the environment and reduced pollution constitute
    only about one-third of the total benefits that are claimed for
    that rule. The other two-thirds of the benefits are so-called
    private benefits, savings to consumers from using less fuel.
        Now, that would be a good thing for consumers if they chose
    it, but there is no market failure that has been identified
    and, frankly, consumers should be able to make the trade-off
    between paying another $1,800 for a car and savings for
    themselves. So the benefits don't really match the
    justification for the rule.
        Ms. DelBene. But you think costs are always appropriately
    calculated and it is only benefits that are not?
        Mr. Gattuso. No, although we do have to recognize that the
    agencies that do the cost-benefit analyses tend to support the
    rules that they are proposing. So I think an estimate of cost
    by an agency is going to be what you might call a statement
    against interest, but the benefits may be jacked up a little
    bit. But I think benefits and costs have to be compared, and
    also costs by themselves is a relevant standard to look at. The
    cumulative cost of regulations is by itself a factor to
    consider.
        Ms. DelBene. Professor Claeys, in its most recent report to
    Congress, the Office of Management and Budget estimates that
    the total benefits of significant regulations for the past 10
    years exceeded the cost by a ratio as high as 16 to 1. So how
    do you reconcile that with the notion that the regulatory costs
    are overburdening the economy if we don't also look at the
    benefits involved?
        Mr. Claeys. Should this Congress defer to determinations by
    OMB about what the benefits or the costs are? Why shouldn't
    this Congress decide for itself what the costs and benefits
    are? Because this Congress is responsible to the voters and
    answers to them in elections.
        Ms. DelBene. This is a data point. So if there is data that
    says that we have benefits, shouldn't that be taken into
    account?
        Mr. Claeys. In the House and in the Senate, yes.
        Ms. DelBene. Mr. Levin, or Professor Levin--I'm sorry--what
    is your view? Mr. Gattuso talked about proposals to impose
    sunset dates for regulations, and I wanted to hear your
    feedback on that.
        Mr. Levin. Yes. I testified to the Subcommittee last year
    about proposals just to re-examine rules every 10 years, and I
    testified that that is too inflexible and would take up too
    much time of the agencies re-examining things, as opposed to
    getting on with the people's business, which Congress has
    assigned it.
        So I would say, going even further, a sunset provision
    would be a very bad idea because it takes about 2 years to
    issue a major rule, and if you have to redo it every 10 years,
    you are essentially taking enormous amounts of time away from
    the agency's ability to perform the functions that Congress has
    told it to do. It would be a very bad idea.
        Ms. DelBene. So what would your proposal be if we look at
    the challenges that we face in terms of the rulemaking process?
    Do you have a proposal besides the REINS Act that we might look
    at to make it a more streamlined process?
        Mr. Levin. Well, with respect to--I mean, I would abandon
    this particular line of inquiry and get onto making more
    effective substantive decisions. But on the specific question
    of in what ways should Congress oversee agencies, I would
    encourage you to look at some ABA recommendations for reform of
    the Congressional Review Act, which are cited in my prepared
    statement for today.
        Ms. DelBene. Thank you.
        Thank you, Mr. Chair.
        Mr. Bachus. Thank you.
        Mr. Gattuso, with respect to the Dodd-Frank financial rules
    I am familiar with, but even just moving beyond that into just
    the general condition, many prominent experts have noted that
    small businesses lack rent-seeking capabilities. They lack
    regulatory compliance staff to comply, and accordingly are at a
    competitive disadvantage. They also lack--many, many bigger
    corporations have lobbying shops that lobby both the agencies
    and the Congress.
        I think, just to give you two examples, in the Durbin
    Amendment, which applied to debit cards but not credit cards,
    because the larger banks lobbied and got credit cards exempted,
    so you have a situation where you have the large banks, the
    seven large banks, the largest banks have almost all the credit
    card business, where the community and smaller banks and
    regional banks have the debit cards, and it is much more
    important to their business. And yet, they were not successful.
    So the Durbin Amendment only applies to debit cards.
        I think we have many other examples. For instance, the
    regulators first put caps on the large banks eight or 9 months
    before they did on the smaller banks. They engineered a bailout
    of AIG, which turned around, and that money within 24 hours
    went into some of the largest banks in this country. You didn't
    see the smaller banks bailed out.
        Is there a danger that large corporations can manipulate
    the process of writing new major regulations to drive their
    smaller competitors out of business?
        Mr. Gattuso. Not only is there a danger, but it is a
    reality. It happens all the time. By the way, AIG is not just
    money going into the banks in our country, but it is going into
    banks in France and Germany and the rest of the world as well.
        But I think that small businesses do bear a heavier burden
    of regulation because of the reasons that you cite and are not
    as well represented in the rent-seeking festival in Washington.
        But even outside of small businesses, a lot of these
    regulations are less driven by the public interest, I believe,
    than driven by conflicts between industries. The Durbin
    Amendment was a conflict between the financial institutions and
    big retailers and I think was driven by the representations of
    each side. You can go down the list. Not every regulation, but
    a large number of them are just battles between different
    industry segments rather than something the public interest is
    behind.
        Mr. Bachus. Thank you.
        Professor Claeys, since you last testified before the
    Committee, the threat that the executive branch will use the
    regulatory process to legislate unilaterally and thwart the
    will of Congress has increased. I just introduced an article
    from the Wall Street Journal that was published yesterday and
    again today where the EPA is going to take some pretty drastic
    steps, according to that article.
        But how serious a threat is this kind of what I
    characterized as an end run around Congress to our
    constitutional system?
        Mr. Claeys. I am not going to presume to speak for all
    Americans. For myself, as a citizen and as a scholar, I am very
    concerned.
        Mr. Bachus. What now?
        Mr. Claeys. In my own capacity as a citizen and in my own
    capacity as a scholar, I am concerned. But I don't want to make
    it sound as if my concern is only about the Obama
    administration. I think this has been a trend for 30 and 40
    years going across both parties and presidents of both parties.
        Mr. Bachus. Oh. And listen, I think that the general public
    and most Members of Congress would agree with you that this is
    not something that originated with the Obama administration. I
    do think that it has accelerated under this Administration. Do
    you agree?
        Mr. Claeys. Yes, sir.
        Mr. Bachus. Okay. Does this threat increase the need for
    the REINS Act as a check on unilateral executive branch
    lawmaking?
        Mr. Claeys. Yes, Mr. Chairman.
        Mr. Bachus. Thank you.
        Mr. Gattuso, past congresses have delegated to the
    executive branch authority to legislate regulations that are
    now estimated to consume 14 percent of the national income.
    Does that even remotely resemble the framers' constitutional
    design?
        Mr. Gattuso. The framers established three branches of
    government. Today we have four, and arguably perhaps the
    largest one is the regulatory branch, which is not in the
    Constitution. I am not saying that we don't need some
    regulations. Certainly, we live in a more complex society than
    we once did. But the framers established a system of
    accountability and separation of powers where the Congress is
    ultimately responsible for setting the rules. I think the REINS
    Act would reinforce that original conception.
        Mr. Bachus. Do you think that the number and the cost of
    regulations is inhibiting the creation of jobs, particularly in
    small businesses?
        Mr. Gattuso. Definitely. We have heard from any number of
    small businessmen, from entrepreneurs, saying that either they
    were not able to hire more people or, in effect, hired fewer
    because of regulation. Only last week, the founder of Subway
    sandwiches stated that if he had been starting his restaurant
    chain in the current environment, it would not have succeeded.
    It would not exist.
        Mr. Bachus. Thank you.
        Mr. Claeys, do you believe that the number and extent of
    regulations, the cost, if it does in fact consume 14 percent of
    the national income, is that inhibiting jobs, particularly in
    small businesses?
        Mr. Claeys. With respect, Mr. Chairman, I am a professor of
    law and an educated consumer of scholarship about the
    relationship between administrative agencies and courts and
    Congress. I don't consider myself an economist. So in my
    testimony, I cited studies that seem to me reasonable. If they
    are true, they lay out that predicate. But I do not want to
    take a hard stand. It is not within my expertise.
        Mr. Bachus. Let me close with Mr. Levin, or Professor
    Levin. Are you familiar with the financial regulations which
    require a credit rating or creditworthiness by the three
    largest credit rating agencies where the government required a
    credit rating or a creditworthiness score, say, on securities,
    on securitizations from just the three largest? Or is that
    getting out of your field?
        Mr. Levin. I am not familiar with that specific regulation.
    No, sir.
        Mr. Bachus. Do you believe Dodd-Frank has disadvantaged
    community banks and your regional bank?
        Mr. Levin. I am not sure. If I were talking about Dodd-
    Frank as a whole, I would say that I am not convinced that it
    has disadvantaged the country because I think there are strong
    arguments for doing something to repair the damage that was
    created without regulation. I can't speak to this community
    banks area in particular.
        Mr. Bachus. Are you familiar with the length of Dodd-Frank?
    Have you ever read any of it? Have you read some of the
    provisions?
        Mr. Levin. I have read much of it, not all of it.
        Mr. Bachus. Is it somewhat confusing to you?
        Mr. Levin. In places. Yes, Sir.
        Mr. Bachus. I know the regulators are struggling to try to
    figure out what Congress intended on the Volcker rule, and
    really, they are having a tremendous amount of trouble just
    trying to figure out what Congress intended.
        Mr. Levin. But I think that is because the area of
    financial regulation is complex because the phenomenon they are
    trying to deal with is complex.
        Mr. Bachus. I would agree.
        Mr. Levin. So it requires specialized work more than
    Congress itself can manage in order to come to grips with it.
        Mr. Bachus. When it gets to the point where the regulators
    can't even figure out what Congress intended, I think it is
    indeed complex.
        Mr. Jeffries, the gentleman from Florida, is now recognized
    for his questions.
        Mr. Jeffries. Thank you, Mr. Chairman. From Brooklyn, New
    York. I just want to make sure we correct the record on that.
    [Laughter.]
        I always have to make sure that Brooklyn is in the house.
        Mr. Bachus. Oh, I thought that it was Mr. Garcia. I have
    confused you, Mr. Jeffries. You are from New York, right?
        Mr. Jeffries. Thank you, Mr. Chairman.
        Mr. Bachus. Where did Mr. Garcia go?
        Mr. Cohen. Back to Miami. [Laughter.]
        Mr. Jeffries. Seeking warmer weather.
        Mr. Gattuso, you testified that in your view, four branches
    of government have emerged, presumably the fourth branch of
    government being this amorphous administrative dynamic. Now,
    let's go through the three branches of government that were
    created by the founders of this great country. The first branch
    in Article 1, of course, is this great Congress, given certain
    enumerated, specific powers.
        The second branch created by Article 2 is the executive.
        The third branch is the judiciary. Is that correct?
        Mr. Gattuso. Yes.
        Mr. Jeffries. Now, the premise of the judiciary branch, or
    at least part of its role, is to rein in unconstitutional
    overreach by the executive branch created in Article 2. Isn't
    that right?
        Mr. Gattuso. That is part of it, yes.
        Mr. Jeffries. So the courts have already been set up in the
    framework of the Constitution. If there is regulatory
    overreach, as is claimed by some of those here today, to rein
    in that administrative overreach if it violates the
    Constitution. Isn't that the role of the Article 3 judicial
    system that we have in this country?
        Mr. Gattuso. If it violates the Constitution or a statute.
    But the courts do not make the substantive judgment about
    whether the overreach is in itself a good idea, a bad idea,
    economically sensible are not sensible.
        Mr. Jeffries. Right. Well, we can agree that if there is
    administrative overreach that violates the Constitution of the
    United States, that the framers of this great Republic have
    already established a mechanism to rein in that overreach, and
    that is the Article 3 court system, correct?
        Mr. Gattuso. That would be the original purpose.
        Mr. Jeffries. Okay. Now, we have sort of an argument to be
    made, then, about the reasonableness of regulations. Some
    regulations are reasonable. I think you have conceded that,
    correct?
        Mr. Gattuso. Yes.
        Mr. Jeffries. And then you have concluded that others are
    out of control, costly to the economy, correct?
        Mr. Gattuso. Yes.
        Mr. Jeffries. Now, you have said that there are costs that
    are billions, if not trillions, of dollars in regulatory
    overreach. That is in your testimony, correct? Can you cite to
    me an example of a trillion-dollar regulatory overreach?
        Mr. Gattuso. Well, the trillion would be the cumulative
    figure. But certainly in the last year, there were two
    regulations adopted by the Obama administration with costs over
    $9 billion, the boiler MAC regulation and the CAFE rules.
        Mr. Jeffries. That is in your estimation, correct?
        Mr. Gattuso. That is the estimate of the agencies enacting
    the rule, the EPA or the National Highway Traffic Safety
    Administration. That is not my number, that is their number.
        Mr. Jeffries. Okay. But there is a cost-benefit analysis
    that should be put into play. You have acknowledged you have
    the cumulative effect. Let's put that aside. Then you have
    individual regulatory actions, each of which presumably has a
    cost and a benefit. Is that right?
        Mr. Gattuso. That is right.
        Mr. Jeffries. Now, AIG was cited as an example where their
    outsized influence impacted perhaps the ability of them to get
    an accelerated bailout that perhaps other small banks and
    community institutions, small businesses weren't able to get,
    at least in a timely fashion. Is that correct?
        Mr. Gattuso. Well, I think that there was a lot going on in
    2008 that was more than just standard lobbying. So I won't say
    the AIG bailout was due just to lobbying by AIG. But I think
    the point was that--the point I think the Chairman was making
    was that there was disparate treatment, disparate effects
    between the AIGs of the world and the small community banks.
        Mr. Jeffries. Right. Now, if you invest more regulatory
    authority in the Congress, which is subject to this lobbying
    behemoth, doesn't it then give more power to the AIGs of the
    world, who don't have the same ability to influence the
    regulators?
        Mr. Gattuso. I think the fact remains that the Congress is
    the representative of the people, and if the Congress is not
    the legitimate body to make the decisions, prudential decisions
    as to how much we want to regulate, who we want to control, who
    should not be regulated, then there is really nothing the
    Congress does that can be justified.
        Mr. Jeffries. Do you recall the size of the AIG bailout?
        Mr. Gattuso. I don't have a number.
        Mr. Jeffries. One hundred and eighty billion dollars. Why
    did we have to bail AIG out to the tune of $180 billion? Is it
    because of the absence of regulation that led to some of the
    activities such as the issuance of credit default swaps, a
    totally unregulated vehicle that was out of control, that AIG
    didn't have the capacity to fund once the market fell out and
    the bottom dropped out of the economy? Isn't that $180 billion
    bailout, which is somehow cited as an example of the evils of
    regulation, in reality a prime example of why, in many
    instances, particularly in terms of what Dodd-Frank was
    attempting to accomplish, regulation is necessary?
        Mr. Gattuso. I think the financial crisis of 2008 was the
    effect of--certainly there was a private role, but a large
    portion of it was the government policies in terms of
    interference in the housing market, supporting the bubble in
    housing, and encouraging the creation of loans that were not
    appropriate.
        Mr. Jeffries. Mr. Chairman, I know my time has run out. If
    I could just allow Mr. Levin to respond?
        Mr. Levin. I don't agree with that story of why we had a
    financial crisis, but I think the point I would make is that it
    does take a while to work through the regulatory response, and
    the long bill that the Chairman mentioned is long and
    confusing. That is why you need an extended process by which
    regulators can sort out some of the details that weren't fully
    resolved at the beginning. It is an open process, and is
    participatory, and it is subject to judicial review not just
    for constitutionality but also for the reasoning of the
    decision.
        So a salient difference between the administrative process
    and the legislative is that although there is politics at the
    administrative level, the courts will insist that the matter be
    rational and defensible. They are a check. You don't have that
    check on decisions that the legislature makes. So although
    there is politics on both sides, there is a restraint on the
    administrative side that doesn't exist on the legislative side.
        Mr. Jeffries. Thank you, professor.
        Mr. Bachus. Thank you.
        Would either of you gentlemen are all three of you
    gentlemen want to comment further on anything, any questions or
    any thoughts you have had that you think would be helpful?
        Mr. Gattuso. If I can make just one comment?
        Mr. Bachus. I am going to let Mr. Collins have a round of
    questions. But be thinking--and this will give you five or 6
    minutes to think about maybe if you want to have a 2-minute
    rebuttal or wrap-up or just some other thoughts.
        Mr. Collins is now recognized, the gentleman from Georgia,
    for 5 minutes.
        Mr. Collins. Thank you, Mr. Chairman. I appreciate the
    patience today. It has been sort of a crazy day. I think this
    is a needed proposal. I think it is something that we can look
    at.
        I do have a couple of questions. Professor Claeys, what are
    some other ways, in addition to REINS, that we can ensure that
    the Obama administration weeds through existing regulations and
    eliminates unnecessary burdens on job creators, something they
    said they wanted to do but obviously have not?
        Mr. Claeys. I will give you some thoughts off the top of my
    head. I am not sure that the question hits at my core scholarly
    expertise.
        Mr. Collins. Well, if anybody else wants to jump in after
    Professor Claeys, go right ahead.
        Mr. Claeys. I would say the appropriations process and the
    attempts to link things like the increase of the debt ceiling
    to negotiate policies that will lead to economic growth and
    lead to deregulation. Those are a couple of examples.
        Mr. Collins. Increasing the debt ceiling? Did I hear you
    correctly?
        Mr. Claeys. If the debt ceiling is going to be increased,
    then this Congress can use the leverage it has to do some
    other----
        Mr. Collins. You are saying to use the debt ceiling, okay.
        Mr. Claeys. As leverage for other things that you think
    will have salutary effects on the economy.
        Mr. Collins. Okay. Does anybody else have anything that
    they would like to add to that?
        Mr. Gattuso. I think, and this might sound surprising, but
    I think the Obama administration's power to control and limit
    and review regulations should be preserved and expanded,
    specifically the fact that independent agencies are not
    reviewed or are not subject to regulatory requirements. So I
    think extending the Administration's authority over independent
    agencies actually would be a plus.
        Mr. Collins. Well, I think extending it or not extending
    it, they are not doing anything to eliminate, is irrelevant.
        Mr. Gattuso. I am not defending the Obama administration.
        Mr. Collins. But, I mean, in defending your own answer, we
    can give them all the power in the world, which we are not,
    give them all the power in the world, but if they don't do
    anything, just do their stated claim of unnecessary in
    relieving these burdens, what is the purpose?
        Mr. Gattuso. It is certainly not the complete answer, but I
    think putting some limits on independent agencies is
    appropriate.
        Mr. Collins. I would not disagree with that. I think maybe
    we are going about it two different ways.
        Mr. Levin.
        Mr. Levin. As a matter of fact, I was at a hearing of this
    Subcommittee last year on the subject of retrospective review
    of rules, and I would refer you to the statement I submitted
    then which reviewed the Obama administration's efforts, which I
    think have been substantial. But I also commented on ways in
    which Congress could, if it chose, set up a structure to
    promote retrospective review of rules on its own. So I would
    refer you to that.
        Mr. Collins. Okay. I think one of the issues that is coming
    up, and I just came from another hearing this morning, and it
    goes back to sort of your answer to your question a little bit,
    but there is approximately $67 billion, I think, give or take--
    and I don't remember the number; I am going back and forth--the
    IGs have reported to their different departments on savings
    that could be had, okay? $67 billion has been left on the table
    and not implemented by the departments. There was much ado and
    gnashing of teeth, and you would think that truly a lot of
    things had come to an end this morning because of the sequester
    that everybody wanted to bring in.
        My question sort of tags on here. If we are not
    implementing--and let's dig a little deeper here. If we are not
    implementing cost-cutting measures, which have been implemented
    by the inspector generals in these various agencies, if
    Congress does not, through the power of the purse, which it is
    supposed to have, through regular order of appropriations
    process to control how money is spent, where it goes, and how
    those operate, isn't it not within the purview of Congress to
    continue this process given the fact that right now this
    Administration, and I'm going to say from the perspective the
    IG presented, previous Administrations as well have chosen to
    ignore those kind of issues.
        What is the difference here in the money issue and the
    regulatory issues if Congress sort of sits back and lets the
    Administration do it? Are we not, in essence, giving away our
    constitutional authority, but also putting a hands-off approach
    and then complaining about it in the long run?
        Mr. Gattuso. I think that is entirely correct. Congress
    both has the responsibility and the power to review and
    scrutinize and ensure that regulations are sensible and
    justified.
        Mr. Claeys. I agree with Mr. Gattuso on the regulation. As
    a scholar, I don't have any opinion on the spending issues. As
    a taxpayer and a citizen, I support what you say.
        Mr. Levin. Well, I think the power of oversight is
    longstanding and traditional, and I think Congress has a
    legitimate role over time to examine expenditures and decide
    whether it thinks they are being made wisely. I think it would
    be well for Congress to pursue these traditional areas of
    oversight, as opposed to exploring these rather novel
    alternatives such as the ones that are before us today.
        Mr. Collins. I take great exception to saying ``novel''
    when you actually look at the constitutional authority of
    Congress is to watch over and pass the laws and regulations,
    and it also then, from purse strings to other things, to make
    sure that the American people and small businesses are
    protected and taken care of. To say it is a novel approach to
    simply look at regulations in a way that we can actually rein
    that in to me is not framing this question very much.
        Mr. Levin. Excuse me. I was unclear. I met the REINS Act is
    novel, but regular oversight of rules is not.
        Mr. Collins. It may be novel in its approach, but at this
    point, with lack of it going on, I think there is an issue here
    to where Congress does need to look at this and find the proper
    way to make sure that we are in an environment in which we are
    not cutting out our own businesses and others from regulation
    that are either being done with political agendas or other
    things.
        Mr. Chairman, I see my time is over. I apologize. I yield
    back.
        Mr. Bachus. I appreciate that, Mr. Collins.
        Gentlemen, each of you are recognized for one or 2 minutes,
    if you wish.
        Mr. Gattuso. Well, I will start. I just want to make two
    points. Through most of this hearing, there may be an
    impression left that there is a dichotomy, a choice that needs
    to be made between relying on experts and Congress taking
    direct control over regulatory policy. I think that is a false
    choice. I know nothing about electrical systems, but if I
    needed an electrician, I can hire one. But if I disagree with
    what he recommends, I get to have the final say.
        So I think Congress can review regulations, but that does
    not mean that they do it without knowledge, without expert
    advice and a knowledge of the facts on the ground.
        Also, a question was asked about the respect for Congress,
    and I have been very critical of Congress. I don't agree with
    everything Congress does. I doubt whether any of you agree with
    everything Congress does. But it is the only representative
    national body that we have, and it is imbued by the
    Constitution with the responsibility to oversee these policy
    matters, and I think the proper respect for the Constitution
    and for Congress would demand that that be accommodated.
        Mr. Claeys. Mr. Chairman, I have three points. One has to
    do with this argument about gridlock. I think that the argument
    for gridlock cuts in the direction opposite to the one it has
    been suggested to cut throughout this hearing. To me, the
    analogy that comes to mind is imagine that there is a group of
    people who are partners, and they have irretrievable or
    irreconcilable differences. There are circumstances in which it
    is okay to appoint a receiver, but a receiver is really an
    option of last resort because if the partners have really deep
    differences, they won't trust a receiver any more than they
    will trust each other, because they don't trust each other.
        In our polarized climate, the worst thing to do is for
    people in the minority right now to try to watch the agencies
    make Democratic policy, and then if the Administrations were to
    switch, the Democrats watch the Republicans make policy. It is
    better to have these kinds of deep, visceral disputes in
    Congress.
        My second point is very similar to Mr. Gattuso's. I don't
    think we have heard enough today about the way in which the
    REINS Act improves regulatory processes by making the agencies
    more accountable to Congress, and by making the agencies
    educate Members of Congress the way the electrical engineer
    would educate Mr. Gattuso.
        On this, I recommend that Members of the Committee consult
    David Schoenbrod's testimony last Congress on this point. He
    was a former NRDC lawyer, and he thought that environmental
    laws were made best when Congress got actively involved with
    the EPA regulation.
        And last point that Mr. Jeffries made about the courts,
    this Congress has an independent duty to consult the
    Constitution, and a lot of the statutes that courts enforce in
    administrative law are written by Congress. Well, they all are
    written by Congress, but courts don't look at them very
    closely. This Congress owes a duty to make sure that it thinks
    that these statutes are constitutional. There are other
    situations where courts were not the best arbiters or
    protectors of individual rights, and the best example I can
    think of is Dred Scott. It was a Republican Congress and a
    Republican president that went to the people and said that the
    court system has messed up our individual rights.
        Mr. Bachus. Thank you.
        Professor Levin?
        Mr. Levin. Yes. I would like to use the example of
    greenhouse gas regulation, which has been mentioned during this
    hearing, to try to draw some points together. One, of course,
    is that the Supreme Court itself told the EPA to get moving in
    dealing with climate change issues.
        But beyond that, the greenhouse gas situation is one in
    which EPA is now proceeding to come up with regulations to
    address this matter. The Clean Air Act is probably not the
    ideal way in which to do it, but the Administration is taking
    the initiative because Congress has been unable to take any
    action to further action on climate change. Because of the
    inaction at that level, the EPA has gone forward on its own.
        Now, if you have a system like REINS in which you have not
    only the ability--Congress is not only gridlocked on its own,
    but also is able to block the Administration, the upshot is
    nothing gets done on climate change. The climate is going to
    just keep getting worse. The climate is not a regulated entity
    such that if you remove the yoke of burdensome regulations, the
    climate can breathe free and produce jobs. The climate just
    keeps getting worse, so something should be done.
        If the EPA proceeds with rules, those will be subject to
    judicial review, and have been to some extent already, and
    there is some hope of something getting done. But I think the
    REINS Act would simply generate policy paralysis with no action
    taken. I think that is not in the interest of the country, and
    it is an example of the problems that this legislation would
    bring about.
        Mr. Bachus. I thank all the gentlemen. I think you have all
    three given thoughtful testimony.
        Mr. Cohen, if you have a final word, you are welcome.
        Mr. Cohen. I just thank the Chairman for his courtesies in
    extending time and for his other activities, engaging in the
    retreat this past weekend in Alabama. His heart is obviously in
    the right place. Thank you.
        Mr. Bachus. Thank you.
        Mr. Cohen and I are in agreement that the gridlock here
    is--we are making a bunch of cuts in discretionary spending
    when some of our mandatory spending programs are driving our
    debt and deficit, and I think we are both disappointed that we
    have come to what I think we all agree is a dreadful situation.
        At this time, our hearing is concluded. Each of the
    witness' written statements will be entered into the record in
    its entirety, and I ask that each witness--well, we have
    already done that.
        This concludes the hearing. Thanks to all of our witnesses
    for attending.
        Without objection, all Members will have 5 legislative days
    to submit additional written questions for the witnesses or
    additional materials for the record.
        This hearing is adjourned.
        [Whereupon, at 1:17 p.m., the Subcommittee was adjourned.]
                                A P P E N D I X

                                  ----------

                   Material Submitted for the Hearing Record

     Material submitted by the Honorable Steve Cohen, a Representative in
    Congress from the State of Tennessee, and Ranking Member, Subcommittee
               on Regulatory Reform, Commercial and Antitrust Law

                                   __________

     Letter from the Honorable Kevin Cramer, a Representative in Congress
                         from the State of North Dakota

      Prepared Statement of the Honorable Andy Barr, a Representative in
                      Congress from the State of Kentucky

      Letter submitted by Kristina Butts, Executive Director, Legislative
                 Affairs, National Cattlemen's Beef Association

      Response to Questions for the Record from James L. Gattuso, Senior
       Research Fellow in Regulatory Policy, Thomas A. Roe Institute for
                Economic Policy Studies, The Heritage Foundation

           Response to Questions for the Record from Eric R. Claeys,
                   Professor of Law, George Mason University

     Response to Questions for the Record from Ronald M. Levin, William R.
     Orthwein Distinguished Professor of Law, Washington University School
                                     of Law