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



 
                 REGULATORY ACCOUNTABILITY ACT OF 2013

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


                                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. 2122

                               __________

                              JULY 9, 2013

                               __________

                           Serial No. 113-37

                               __________

         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
JASON T. SMITH, Missouri

           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
JASON T. SMITH, Missouri             JOE GARCIA, Florida
                                     HAKEEM JEFFRIES, New York

                      Daniel Flores, Chief Counsel

                      James Park, Minority Counsel


                            C O N T E N T S

                              ----------                              

                              JULY 9, 2013

                                THE BILL

H.R. 2122, the ``Regulatory Accountability Act of 2013''.........     3

                           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................    37
The Honorable Bob Goodlatte, a Representative in Congress from 
  the State of Virginia, and Chairman, Committee on the Judiciary    39

                               WITNESSES

Robert A. Sells, President, Titan America Mid-Atlantic Business 
  Division
  Oral Testimony.................................................    44
  Prepared Statement.............................................    47
Jeffrey A. Rosen, Partner, Kirkland & Ellis LLP
  Oral Testimony.................................................    51
  Prepared Statement.............................................    53
Keith Hall, Mercatus Center at George Mason University
  Oral Testimony.................................................    66
  Prepared Statement.............................................    69
Diana Thomas, Department of Economics and Finance, Huntsman 
  School of Business
  Oral Testimony.................................................    76
  Prepared Statement.............................................    78
David Goldston, Director of Government Affairs, Natural Resources 
  Defense Council
  Oral Testimony.................................................    84
  Prepared Statement.............................................    86
Ronald M. Levin, William R. Orthwein, Distinguished Professor of 
  Law, Washington University in St. Louis
  Oral Testimony.................................................    89
  Prepared Statement.............................................    91

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Ranking Member, Committee on the Judiciary.....................    41
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..................................................   123

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Ranking Member, 
  Subcommittee on Regulatory Reform, Commercial and Antitrust Law   149
Supplemental Statement of Robert A. Sells, President, Titan 
  America Mid-Atlantic Business Division.........................   151
Supplemental Material submitted by Jeffrey A. Rosen, Partner, 
  Kirkland & Ellis LLP...........................................   159
Supplemental Material submitted by Ronald M. Levin, William R. 
  Orthwein, Distinguished Professor of Law, Washington University 
  in St. Louis...................................................   201
Material submitted by C. Boyden Gray.............................   251
Statement of Administration Policy on H.R. 3010..................   280
Letter of Opposition to H.R. 3010................................   281
Response to Questions for the Record from David Goldston, 
  Director of Government Affairs, Natural Resources Defense 
  Council........................................................   288
Response to Questions for the Record from Ronald M. Levin, 
  William R. Orthwein, Distinguished Professor of Law, Washington 
  University in St. Louis........................................   294


                 REGULATORY ACCOUNTABILITY ACT OF 2013

                              ----------                              


                         TUESDAY, JULY 9, 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 10:04 a.m., in 
room 2141, Rayburn Office Building, the Honorable Spencer 
Bachus (Chairman of the Subcommittee) presiding.
    Present: Representatives Bachus, Goodlatte, Issa, Holding, 
Collins, Smith, Cohen, and DelBene.
    Staff Present: (Majority) Daniel Flores, Chief Counsel; 
Ashley Lewis, Clerk; and (Minority) James Park, Minority 
Counsel.
    Mr. Bachus. Good morning. 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 don't anticipate any 
recesses. We ought to go straight through.
    We welcome all of our witnesses today. I am going to 
recognize myself for an opening statement, and other Members 
for an opening statement. And then the panel will give their 
opening remarks.
    From the onset of this Committee's work on regulatory 
reform this Congress, I have stressed that the argument is not 
that we don't need any relations at all. Reasonable rules 
provide clear rules of the road for businesses, so they have 
some certainty and know what to expect. They provide safeguard 
for consumers and protections for the environment.
    But clear, reasonable rules of the road that provide 
certainty are not what we have gotten from this Administration. 
And that has been a major contributing cause to the continuing 
underperformance of the U.S. economy.
    To a considerable degree, President Obama has expressed 
agreement that regulations should be more reasonable. For 
example, in 2011, the President ordered regulatory agencies to 
consider costs and benefits, and choose the least burdensome 
path. The order continued: The regulatory process must be 
transparent and include public participation.
    This sounds very commendable, but the devil is always in 
the details. It is in the implementation stage where the 
promises have failed to pan out.
    Many of the new regulations fall most heavily on small 
businesses that are the job creators for over two-thirds of the 
jobs in our economy. They can be a source of tremendous cost 
and frustration--that is, the regulations.
    Let me quote from an opinion article published in the 
Birmingham News this past Sunday, July 7, that was written by 
the Alabama state director of the National Federation for 
Independent Business, Rosemary Elebash. She said, and I quote, 
``Sometimes I think of the Federal Government as a bad boss. It 
barks an order, gives you an unrealistic deadline, and doesn't 
have a clue how you will make it happen. But if things are not 
absolutely perfect, there will be heck to pay.''
    The cost of regulatory compliance has been estimated at 
about $11,000 per worker. This is real money that is then not 
available to be reinvested to help a business grow and hire 
more workers. Such regulatory trade-offs do not only affect 
business owners and employers. They affect the employees and 
individuals.
    If a regulation increases the price of a needed product 
without corresponding benefit, it takes away money that a 
person could spend elsewhere that would have a greater health 
or safety benefit. This is especially affects low-income 
Americans, for whom money is already tight.
    The current regulatory system clearly has shortcomings. 
Federal agencies need to do a much better job of determining 
when regulation is needed and proposing smarter regulations 
when warranted. And when forming regulations, we absolutely do 
have to consider the consequences on jobs and the economy, 
because it is the foundation on which everything else rests.
    The Regulatory Accountability Act, reintroduced this term 
by Chairman Bob Goodlatte, goes a long way toward ensuring that 
this will happen. It remedies many of the system's most glaring 
weaknesses, and it does so based on bipartisan regulatory 
reform principles.
    This is sound legislation that I am proud to cosponsor and 
invite all of my colleagues to join me in supporting this bill.
    At this time, I will recognize our Ranking Member, Mr. 
Steve Cohen of Tennessee, for his opening statement.
    [The bill, H.R. 2122, follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________
    Mr. Cohen. Thank you. I appreciate the Chairman's opening 
statement and his recognition. And in my position as the 
Ranking Member, and in my philosophical position, which is what 
puts me on the side of the aisle, I think that what he said was 
wrong.
    But I have said that before, and I will say again, we will 
remain friends.
    We have similar bills marked up regularly that do damage to 
the regulatory structure that we have in this country, and it 
is the whole question of balancing issues, and safety vs. due 
process and fairness, and all those things. And it just kind of 
depends where you come down. And the other side tends to come 
down on the side of business who doesn't want to deal with 
regulations, but do want due process and fairness, as they see 
it. And then the other side looks at the public and consumers, 
and what is going to be fair and bright and save lives and 
purify the air and the water and make life better for 
everybody.
    So it is just kind of whether you are looking at a holistic 
way at what is good for everybody as a family, or whether you 
are looking at it just for the folks who are individually 
particularly concerned.
    And that is what we have pretty regularly in this Committee 
and kind of in this Congress.
    The Administrative Procedure Act is really a constitution 
of administrative procedures. And to amend it, you have to have 
a high burden of proof, just as you should have a high burden 
of proof to amend the United States Constitution. You shouldn't 
be doing that without particularly good reasons, and I don't 
think the burden of proof which you would have in amending the 
Constitution, which has very high thresholds, has been met by 
the proponents of this bill that may have changes that need to 
be made in the APA.
    We have all kinds of situations. We can show that workplace 
safety is important, and there are problems that we have now. 
There were 4,693 workplace deaths in 2011, according to the 
Bureau of Labor Statistics. That is a lot of deaths.
    And not that they would all be alive and living and 
breathing if we had a process of regulations in place to save 
them. We had those, but they are there to save people and to 
make conditions better. And there will be more deaths, I think, 
if we have less regulation and less oversight at OSHA and other 
places.
    The National Institute for Occupational Safety and Health, 
the American Cancer Society, and Emory School of Public Health, 
say they estimate 50,000 to 70,000 deaths from occupational-
related diseases in the United States annually. And that is 
sufficient--overly sufficient.
    And the joint study by the Liberty Mutual Insurance Company 
and health economists at UC Davis say that we have $250 billion 
of workplace-related injuries. Only 25 percent is covered by 
workers comp.
    In addition, several provisions in this bill concern me. 
H.R. 2122's expanded use of formal rulemaking procedures for 
high impact rules is, to me, an unnecessary procedural 
expansion that will not serve to improve the quality of 
rulemaking, while at the same time would add major cost to the 
process, and effectively grind the process of rulemaking to a 
halt, which is probably the intent and motive of the law.
    Furthermore, rulemaking largely fell out of favor more than 
a generation ago as its costs became were evident. Consensus 
developed that the notice and comment rulemaking procedures of 
553, the APA, which are themselves fairly proceduralized, 
combined with the APA analytical requirements struck a better 
balance in ensuring a fair and accurate rulemaking process 
while maintaining agency effectiveness.
    The proponents of this bill offer no study or other data 
indicating the use of cross-examination and other facets of the 
formal rulemaking process are the more effective tools for 
making scientific and policy judgments than the current 
process. If anything, history says the opposite.
    An infamous example of the rulemaking procedure was before 
the FDA. It took more than 10 years to determine whether the 
FDA should require that peanut butter contain 90 percent 
peanuts, as opposed to 87 percent peanuts.
    A government witness was examined and cross-examined for an 
entire day about a survey of cookbook and patented peanut 
butter formulas, missing recipes, and his personal preferences 
for peanut butter, crunchy or smooth.
    While I make no judgments about crunchy or smooth, or about 
how many peanuts should be in peanut butter, I do think that 
government could do better to spend its resources than devoting 
10 years to decide the question of peanut butter and peanuts.
    We ought to not be returning to those days, and be wary of 
it.
    Another concern with H.R. 2122 is its codification of 
overly burdensome cost-benefit analysis requirements.
    Every President since Ronald Reagan has required that 
executive agencies conduct cost-benefit analysis, and that 
support for such requirements has been bipartisan.
    Nonetheless, the particular agency determinations required 
under this bill and the requirements that all these 
determinations be made for all rules would cause unnecessary 
delay and cost tremendous taxpayer resources.
    I do not see the net benefit of expanding cost-benefit 
analysis requirements to nonmajor rules, or to guidance 
documents, which do not have the force of law.
    Perhaps we should have a better cost-benefit analysis done 
of H.R. 2122, go to the source of the matter. It wouldn't be 
res ipsa. It could be res ipsa, the thing speaks for itself.
    There are other concerns that I will not delve into in 
these brief opening remarks, including the bill's provision 
establishing less deferential judicial review under which 
judges could second-guess an agency's cost-benefit analysis and 
substitute their policy judgments for those of agency experts.
    This bill does nothing to improve the rulemaking and will 
only serve to stymie agencies from ensuring that health safety 
and welfare of the American people are protected.
    It will also go nowhere in the Senate. It will not become 
law. We are supposed to be lawmakers and not messengers.
    And, therefore, I close my message and urge my colleagues 
to be in opposition to this bill, and this message.
    I yield back the balance of my time.
    Mr. Bachus. Thank you, Mr. Cohen.
    I would now like to recognize the Chairman of the full 
Committee, Mr. Bob Goodlatte, for his opening statement.
    Mr. Goodlatte. Mr. Chairman, thank you very much for 
holding this hearing on H.R. 2122, the ``Regulatory 
Accountability Act of 2013.''
    For over 4 years, since the great recession officially 
ended, America's workers and small businesses have waited for 
real recovery to take hold. Last week, a new jobs report once 
again offered superficial reason to think good news might be 
growing. In June, the number of jobs added to the economy grew 
slightly. The number of long-term unemployed fell. And the 
labor force participation rate grew by \1/10\ of 1 percent.
    But over 4 years into nominal recovery, these signs of 
improvement are still far too weak. What is worse, lurking 
beneath the surface, bad news continues to come.
    The June jobs report showed an increase of 240,000 in the 
number of discouraged workers, those who have simply quit 
looking for a job out of frustration or despair.
    The number of people working part-time but who really want 
to full-time work passed 8.2 million. That represents a jump of 
322,000 in just 1 month.
    Worst of all, the truest measure of unemployment, the rate 
that includes both discouraged workers and those who cannot 
find a full-time job, continues to exceed 20 million Americans, 
and that rate rose from 13.8 percent back to 14.3 percent in 
June.
    This continuing lag in recovery is distressing for all 
Americans. And the reason recovery has yet to fully arrive is 
all too easy to see: Real historical economic growth rates are 
missing. They have been ever since the great recession.
    Some say that this is a new normal, a yearly growth rate on 
the order of 2 percent in contrast to America's historically 
higher growth rate. But a new normal of suppressed growth, 
lowered expectations, and more than 20 million Americans 
unemployed or underemployed, is something America's workers and 
small businesses can't accept, and America's leaders must 
reject.
    The American people urgently need the jobs that only 
greater economic growth can give. One of the biggest obstacles 
standing in the way of growth and job creation is the growing 
wall of Federal regulation being built in Washington.
    The Small Business Administration and the Competitive 
Enterprise Institute have both estimated that Federal 
regulations now cost our economy well over $1 trillion per 
year. Yet the Obama administration is continuing to add 
historically high numbers of new major regulations. It has just 
launched a new regulatory initiative that is sure to increase 
energy costs for America's families and job creators. This is 
progress in the wrong direction.
    As long as America's small businesses and manufacturers 
continue to tell us that a hostile regulatory environment is 
one of the biggest challenges they face, we must look for ways 
to reduce unnecessary regulatory burdens.
    Regulations surely has a role to play in ensuring public 
health, safety, and welfare. But there is no reason Americans 
need to choose between having regulations that keep us safe and 
having economic growth that allows us to prosper.
    That is why I reintroduced the Regulatory Accountability 
Act this Congress. Its reforms to the Administrative Procedure 
Act, the constitution of Federal regulation, are some of the 
most important regulatory reforms we can pass.
    Simply put, the Administrative Procedure Act is out of date 
and encourages regulatory overreach and excessive regulatory 
costs.
    Enacted in 1946, it places only a handful of light 
restrictions on the Federal rulemaking process. Congress wrote 
it long before anyone imagined the reach and expense of the 
modern regulatory state.
    The APA does not require agencies to identify the costs of 
their regulations before they impost them. It does not require 
agencies to consider reasonable lower-cost alternatives. The 
APA does not even require agencies to rely on the best 
reasonably obtainable evidence.
    While the APA does require agencies to give notice of 
proposed rulemaking, and receive public comment on their 
proposals, too often that is an after-the-fact exercise.
    Frequently, agencies predetermine the outcomes of 
rulemakings, and notice and comment serves only to paper over 
the record.
    The Regulatory Accountability Act fixes this problem by 
bringing the APA up-to-date. Under its provisions, agencies are 
required to assess the costs and benefits of regulatory 
alternatives. Unless interests of public health, safety, or 
welfare require otherwise, agencies must adopt the least cost 
alternative that achieves the regulatory objectives Congress 
has established.
    The Regulatory Accountability Act contains common-sense 
reforms that have bipartisan support in both the House and the 
Senate. In large part, that is because so many of its 
provisions are modeled on the terms of executive orders that 
Presidents Reagan, Clinton, Bush, and Obama have issued to 
compensate for the APA's weaknesses.
    Over the past 3 decades, these bipartisan executive orders 
have proved that the principles of the Regulatory 
Accountability Act work. But the executive orders are not 
permanent, not judicially enforceable, do not bind independent 
agencies, and are too often honored in the breach.
    Under the Regulatory Accountability Act, the principles of 
these orders would at least become binding law. Sound decisions 
that meet statutory objectives while they respect the economy's 
needs would be the order of the day, not the rare occurrence.
    American jobs, American growth, and American 
competitiveness would all be better for it, and I urge all of 
my colleagues to join me and do all we can to pass the 
Regulatory Accountability Act.
    Mr. Chairman, I am very pleased that you are holding this 
hearing. I am looking more forward to hearing the testimony of 
the witnesses.
    I am particularly glad to have with us Mr. Bob Sells of 
Titan American Corporation, which operates a great facility in 
Botetourt County, Virginia, manufacturing an essential 
ingredient for American growth, cement.
    Thank you.
    Mr. Bachus. Thank you.
    I noticed he is the Tennessee Volunteer. Being a University 
of Alabama graduate, it was too late to scrub you from the list 
of witnesses. Since you had a business in Roanoke, I decided to 
not even try.
    You know I am joking. It is a very stellar, Auburn and 
Alabama----
    Mr. Cohen. Mr. Chairman, if I can interrupt this SEC talk, 
Mr. Conyers has a----
    Mr. Bachus. Absolutely. Without objection, Mr. Conyers' 
opening statement, he is the full Committee Ranking Member, 
will be made a part of the record.
    And all Members' statements will be made a part of the 
record, opening statements, without objection.
    [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
    The so-called ``Regulatory Accountability Act''--which effectively 
will prevent agencies from issuing regulations--is among the most 
seriously flawed bills we have considered to date.
    My greatest concern is that H.R. 2122 will have a pernicious effect 
on the public health, safety, and well-being of Americans.
    The ways in which it does this are almost too numerous to list 
here, so I will just mention a few.
    For instance, H.R. 2122 would override critical laws that prohibit 
agencies from considering costs when public health and safety are at 
stake.
    These statutes include the Clean Air Act, the Clean Water Act, and 
the Occupational Safety and Health Act.
    This means that agency officials will now be required to balance 
the costs of an air pollution standard with the costs of how many 
anticipated lives and illnesses that will result in the absence of such 
regulations.
    At the hearing on this bill's predecessor in the last Congress, our 
witness testified that if this measure were in effect in the 1970's, 
the government ``almost certainly would not have required the removal 
of most lead from gasoline until perhaps decades later.''
    This is because the bill imposes numerous procedural hurdles on the 
rulemaking process, a process that most experts agree is already too 
ossified.
    The bill adds roughly 60 additional analytical requirements to the 
already substantial analytical process, which threatens ``paralysis by 
analysis.''
    By delaying the rulemaking process, we ultimately put American 
citizens at risk.
    Worse yet, some of these new requirements have been soundly 
rejected by respected administrative law academics and practitioners, 
such as the bill's mandate requiring formal rulemaking.
    As our witness observed at this prior hearing, ``Almost no serious 
administrative law expert regards formal rulemaking as reasonable, and 
it has been all but relegated to the dustbin of history.''
    This explains why more than 40 leading administrative law academics 
and practitioners as well as the American Bar Association have raised 
serious concerns about these new requirements.
    My second concern is that many provisions in the bill will 
facilitate greater influence of business interests on rulemaking and 
agencies.
    We already know that the ability of corporate and business 
interests to influence agency rulemaking far exceeds that by groups 
representing the public.
    But rather than leveling the access playing field, H.R. 2122 will 
further tip the balance in favor of business interests by giving them 
multiple opportunities to intervene at various points in the rulemaking 
process, including through less deferential judicial review.
    Finally, the bill is based on the faulty premise that regulations 
result in economically stifling costs, kill jobs, and promote 
uncertainty.
    While supporters of H.R. 2122 will undoubtedly cite a study 
claiming the cost of regulations exceed $1.7 trillion, the 
Congressional Research Service, Center for Progressive Reform, and the 
Economic Policy Institute found the study to have been based on 
incomplete and irrelevant data.
    With respect to the impact that regulations have on job creation, 
then-Chairman Smith said during the hearing on H.R. 2122's precedessor 
in the last Congress that the ``American people urgently need jobs that 
only economic growth can give. Standing in the way of growth and job 
creation is a wall of federal regulation.''
    But the Majority's own witness at that hearing, Christopher DeMuth, 
who appeared on behalf of the conservative think tank American 
Enterprise Institute, clearly debunked this argument. He said that the 
``focus on jobs . . . can lead to confusion in regulatory debates'' and 
that the employment effects of regulation ``are indeterminate.''
    Another argument--regulatory uncertainty hurts businesses--has 
similarly been debunked.
    Bruce Bartlett, a senior policy analyst in the Reagan and George 
H.W. Bush Administrations has observed:
    [R]egulatory uncertainty is a canard invented by Republicans that 
allows them to use current economic problems to pursue an agenda 
supported by the business community year in and year out. In other 
words, it is a simple case of political opportunism, not a serious 
effort to deal with high unemployment.
    Regulations that promote the health of our citizens and ensure the 
safety of American-made products will unquestionably lead to job 
creation and protect the competitiveness of our businesses in the 
global marketplace.
    Not surprisingly, the Administration issued a veto threat in the 
last Congress regarding the bill's substantively identical predecessor 
stating that it ``would seriously undermine the ability of agencies to 
execute their statutory duties'' and that it also ``would impede the 
ability of agencies to provide the public with basic protections,'' 
among other concerns.
    Rather than heeding these serious concerns, my colleagues simply 
want to push forward with a bill that has absolutely no political 
viability.
    It is a shame that we again will waste our time on legislation that 
has no future.
                               __________

    Mr. Cohen. Thank you.
    Mr. Bachus. Thank you.
    Is there anyone else who would like to make an opening 
statement?
    Mr. Cohen. Since you all talked about Alabama and UT, I 
would like to hear about Vanderbilt. Excellent, thank you. That 
is good, that is where I went to school. It costs a lot of 
money, but you get good students and you get good grades and 
they educate you well. And we are starting to do good sports 
too, but academics is first.
    We don't get into how we do against Alabama and UT on the 
scores, because it would not be any contest.
    Mr. Goodlatte. Mr. Chairman, with all this great connection 
that Mr. Sells has to Tennessee both as a Volunteer and his 
daughter attending the outstanding school of Vanderbilt, I hope 
that the Ranking Member will listen intently to his testimony.
    Mr. Cohen. With bated breath. [Laughter.]
    Mr. Bachus. We have Virginia, Purdue graduates. We will not 
get too much into the Big Ten.
    But we do have a panel from all over the country, including 
here in Washington, so it is a distinguished panel.
    And I will start by introducing Mr. Sells. He is president 
of the mid-Atlantic business unit of Titan America, a heavy 
construction material producer in eight states employing 1,600 
Americans. Titan America produces cement, concrete, concrete 
block, aggregates, sand, and beneficiated coal ash.
    Mr. Sells joined Titan America in 2001 as V.P. of Florida 
Concrete Products and assumed the role of mid-Atlantic business 
unit president in 2007, making him responsible for the Roanoke 
Cement Company, Titan, Virginia, Ready Mix, S&W Ready Mix, and 
Powhatan Ready Mix.
    Mr. Sells earned his B.A. in civil engineering, and his 
M.S. in engineering from the University of Tennessee
    Mr. Jeffrey Rosen is a senior partner in the Washington, 
D.C., office of Kirkland & Ellis. Mr. Rosen practiced law on a 
wide array of areas at Kirkland & Ellis for 21 years before 
leaving in 2003. He rejoined the firm in 2009 focused on 
regulatory and litigation matters. From 2003 to 2006, he served 
as general counsel for the U.S. Department of Transportation. 
As general counsel, he was responsible for the department's 
regulatory program, enforcement and litigation activities, 
legal issues, and legislative proposals.
    From 2006 to 2009, Mr. Rosen served as general counsel and 
senior policy advisor for the White House Office of Management 
and Budget, OMB, as we call it, making him the Administration's 
lead lawyer for regulatory and fiscal issues.
    Appreciate your being here.
    Dr. Keith Hall is a senior research fellow at Mercatus 
Center at George Mason University. Prior to joining the 
Mercatus Center, Dr. Hall served as the 13th commissioner of 
the Bureau of Labor Statistics. In this role, he headed the 
principal fact-finding agency in the Federal Government in the 
broad field of labor economics and statistics.
    Prior to his service at BLS, Dr. Hall served as chief 
economist with the White House Council of Economic Advisors, 
where he analyzed a broad range of fiscal, regulatory, and 
microeconomic policies, and directed a team that monitored the 
state of the economy and developed economic forecasts.
    Dr. Hall received his B.A. from the University of Virginia, 
and his M.S. and Ph.D. degrees in economics from Purdue 
University.
    Dr. Diana Thomas is an assistant professor of economics and 
finance at Utah State University's Jon M. Huntsman School of 
Business. Dr. Thomas' primary fields of research include public 
choice, development economics, and Australian economics--oh, 
you are conservative?
    Prior to joining the Huntsman staff, Dr. Thomas worked as a 
junior portfolio manager at Allianz Global Investors in 
Frankfurt, Germany. Dr. Thomas earned her B.S. in finance, her 
M.A. in economics, and her Ph.D. in economics from George Mason 
University.
    Maybe I shouldn't assume that just because she studied 
Australian--I mean Austrian economics.
    Dr. Goldston is director of government affairs for the 
National Resources Defense Council in Washington, D.C., and 
responsible for its governmental strategies.
    Prior to joining NRDC, Mr. Goldston served as project 
director for the Bipartisan Policy Center report ``Improving 
the Use of Science in Regulatory Policy.'' Mr. Goldston also 
served as chief of staff of the House Committee on Science from 
2001 to 2006.
    He has been a visiting lecturer at Princeton, Harvard, and 
a columnist for journal Nature. He received his B.A. in history 
from Cornell University and completed coursework for a Ph.D. in 
American history at the University of Pennsylvania.
    We welcome you, Mr. Goldston.
    Finally, Mr. Ronald Levin has testified many times before 
our Committee. He is the William R. Orthwein Distinguished 
Professor of Law at Washington University in St. Louis. Mr. 
Levin is a co-author of a casebook, ``State and Federal 
Administrative Law.''
    Previously, he chaired the section of administrative law 
and regulatory practice of the American Bar Association, a 
group of which he is still an active member. He served as the 
ABA's advisor to the drafting committee to revise the model 
state Administrative Procedure Act.
    He also serves as a public member of the Administrative 
Conference of the United States and chair of its Judicial 
Review Committee. Before joining the law faculty, Mr. Levin 
clerked for the Honorable John C. Godbold of the U.S. Court of 
Appeals for the Fifth Circuit and practiced in the Washington, 
D.C., firm of Sutherland Asbill & Brennan.
    When did you clerk----
    Mr. Levin. 1975 to 1976 in Montgomery, Alabama. The Fifth 
Circuit at that time included Alabama.
    Mr. Bachus. Yes, he is a very distinguished judge.
    Mr. Levin received his B.A. from Yale and J.D. from 
University of Chicago.
    I was trying to figure out if I had tried cases maybe when 
you were a clerk.
    Mr. Levin. Hopefully, you had that privilege.
    Mr. Bachus. But that is a tremendously distinguished panel.
    At this time, Chairman, do you have any questions you would 
like to ask?
    Wait, we have to have our opening statements.
    Barney Frank used to start asking questions before we heard 
the opening statements. I can't believe I just did it. 
[Laughter.]
    Barney lives. His ghost, he came back. We had his portrait 
unveiling last week.

           TESTIMONY OF ROBERT A. SELLS, PRESIDENT, 
          TITAN AMERICA MID-ATLANTIC BUSINESS DIVISION

    Mr. Sells. Thank you, Chairman Bachus.
    Distinguished Congressional Committee Members, my name, as 
the Chairman mentioned, is Robert Sells. I serve as president 
of the mid-Atlantic business unit of Titan America, a heavy 
construction material producer in eight states. We employ over 
1,600 Americans, and Titan America does produce cement, 
concrete, concrete block, aggregates, sand, and beneficiated 
coal ash, which are vital materials America needs as it 
recovers from the great recession and moves forward in a new 
era of resilient, sustainable construction and infrastructure.
    The construction materials we produce create the foundation 
of America. As a business that is highly regulated under 
Federal agencies, Titan America supports H.R. 2122, the 
Regulatory Accountability Act. We believe the process for 
justifying regulations, identifying the alternatives, 
evaluating the impact on jobs and the economy, assessing the 
cost-benefit impact of the regulations, and incorporating input 
from the regulated business community will be more robust and 
transparent under this legislation.
    The result will be greater certainty in business for 
planning new investments, expansion, and job creation.
    While at times we have enjoyed good working relationships 
with agencies such as EPA, MSHA, OSHA, and the DOT, there are 
times, particularly during rulemaking, where the input of the 
regulated community has not been sufficiently requested, 
accepted, or considered, resulting in regulations requiring 
significant revisions or that ultimately are challenged in 
court and remanded or vacated.
    One example is the Portland cement NESHAP rule finalized in 
2010, which included some conditions that were technically 
unattainable and other conditions that were not considered in 
or vastly changed from the final proposal.
    After various challenges, this rule was reconsidered in 
2013, but is now under legal challenges from environmental 
groups.
    Another example is MSHA's pattern of violations rule. 
Safety is our number one value at Titan America. This rule was 
implemented this spring and goes too far in removing due 
process and could close a business without the opportunity to 
contest the allegations. At the present time, when a MSHA 
citation is issued, the company is required to implement the 
MSHA officer's corrective action before the company can protest 
the citation.
    Under H.R. 2122, legislation would provide greater 
opportunities to consider input from the regulated community to 
make more achievable and rational regulations.
    We believe it is important for a regulation to be justified 
by aspects directly related to the regulatory statute for the 
regulation in question.
    However, co-benefits for aspects that are not attributable 
to a given regulatory statute are often used as justification.
    We experienced this in the Portland cement NESHAP, where a 
limit on hydrochloric acid, which was previously determined to 
be less than health-based standards, is now justified because 
of the co-reduction of sulfur dioxide, which is regulated under 
other statutes. There are cases where cement plants have 
naturally low sulfur dioxide emissions, and there is little if 
any co-benefit for meeting an arbitrarily low costly 
hydrochloric acid limit.
    If there is a benefit for reducing sulfur dioxide 
emissions, then it should be addressed under the statutes for 
that emission, not by an expensive backdoor approach.
    This legislation will require that regulations be justified 
by their own direct benefits and that proper rulemaking be 
followed if there is justification for co-benefits.
    Greater input from the regulated community earlier in the 
process through advanced notice of proposed rulemaking and 
hearings during the proposed rule stage will provide the 
regulators with greater understanding of how the proposed 
regulations may impact businesses, what alternatives may be 
applicable, and what obstacles may prevent effective 
implementation of the regulations.
    Often, inconsistencies between regulations, and sometimes 
just lack of common sense, create complications for business 
without creating any additional benefit or protection intended 
by the regulation.
    One example is cement kilns using tires as an alternative 
fuel, which has many positive environmental benefits. If a tire 
is from a State collection program, it is legitimate fuel. But 
the exact same tire from a tire dump or landfill triggers a 
completely different set of regulations.
    Another example is DOT's hours of service regulations, 
which were intended to provide adequate rest for over-the-road 
drivers. This has affected our local delivery professionals who 
spend less than 40 percent of their time behind the wheel.
    Finally, this legislation addresses the propensity of 
agencies to issue guidance and move formal rules, with the 
effect being that regulators at State and regional levels use 
this guidance with the weight of regulations. We have seen this 
in draft guidance and judicial waters.
    In closing, I would like to thank this Committee for 
hearing my testimony and would like to thank each of you for 
your service in the United States Congress, representing the 
citizens of your district and our great Nation.
    I will be happy to answer questions at the end of our 
testimony.
    [The prepared statement of Mr. Sells follows:]*
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    *See Appendix for supplemental statement submitted by this witness.
    
    
    
    
    
    
    
    


                               __________
    Mr. Bachus. Thank you.
    Mr. Rosen?

            TESTIMONY OF JEFFREY A. ROSEN, PARTNER, 
                      KIRKLAND & ELLIS LLP

    Mr. Rosen. Chairman Bachus, Ranking Member Cohen, Chairman 
Goodlatte, and other distinguished Members of the Subcommittee, 
thank you for inviting me here today to address the Regulatory 
Accountability Act, which represents an important set of well-
considered improvements to administrative law and regulatory 
practice.
    My name is Jeff Rosen. I am currently a partner at the law 
firm of Kirkland & Ellis. And as you heard, I previously served 
as general counsel at the U.S. Department of Transportation, 
and as general counsel and senior policy advisor at the White 
House Office of Management and Budget.
    The views and observations I am offering today, however, 
are entirely my own, based on my own experiences in and out of 
government.
    So let me say first, the regulatory process is one that is 
not always well understood, but it often produces results that 
produce strong reactions. Some rules are sensible and 
beneficial. Others are not.
    We need to remember that regulation affects not only 
businesses but also municipalities, hospitals, universities, 
farmers, airports, and others, including individuals.
    Now, when the Administrative Procedure Act was enacted in 
1946, it was meant to restrict some excesses and arbitrariness. 
And in many ways, the APA has worked well. But over time, 
agencies have been able to promulgate more and more costly 
regulations with seemingly few real inhibitions or meaningful 
restrictions on their doing so.
    The Code of Federal Regulations is now 238 volumes and 
nearly 175,000 pages. That troubles people who agree with 
Winston Churchill's warning back in 1949 that ``if you make 
10,000 regulations, you destroy all respect for the law.''
    And even individual Federal rules can be hugely 
consequential to our economy.
    For example, in 2011, EPA proposed and then postponed a new 
rule regarding ozone. The agency itself had estimated the rule 
could have added cost of as much as $90 billion per year, even 
though there are States like California that have not even 
complied with the existing ozone rule.
    Consider this, Federal agencies by rulemaking can issue new 
laws involving costs of more than $1 billion with only 30 days' 
public notice and only one chance for public comment with no 
hearing, no rebuttals of comments submitted by others, and no 
other debate or dialogue of any kind.
    Last December, the GAO even reported that during a 7-year 
time period in which it reviewed rules from 52 Federal 
agencies, the agencies did not even provide advanced public 
notice or allow any public comment for approximately one-third 
of major rules that involved more than $100 million each.
    That is probably not the best way for things to work, 
especially when the stakes to our economy our highest.
    Sometimes, the existing process works fine. But for 
significant rules, we need more opportunities for public input, 
more assurances of the accuracy of the information being relied 
upon, more basis to know the rules don't impose more costs than 
is necessary or worthwhile, and some strengthening of the 
checks and balances on regulations that are already in place.
    The Regulatory Accountability Act addresses these issues 
with about a half-dozen really key improvements, which are 
described in my written statement. These involve the use of 
advanced notices for significant rules, requiring cost-benefit 
analysis by all agencies using guidelines set by OMB, applying 
the Information Quality Act to rulemaking, allowing focused 
hearings for rules involving more than $1 billion of impacts, 
giving OMB additional authority over agency guidance documents, 
and strengthening judicial review in some circumstances.
    These build on existing law and practice, including 
requirements of executive orders from Presidents of both 
parties over the last 30 years, and the improvements are well-
grounded in actual experience and in common sense.
    It is also a virtue of this bill that it has bipartisan 
sponsors both in the House and in the Senate.
    With respect, I will say there are always some who will 
oppose any change to the Administrative Procedure Act, just as 
there were some who opposed the APA itself in 1946.
    But the Regulatory Accountability Act represents a very 
useful step forward. It deserves to move ahead in this 
Congress.
    So thank you for the opportunity to appear here today. And 
I will look forward to addressing any questions you may have.
    [The prepared statement of Mr. Rosen follows:]*
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    *See Appendix for supplemental material submitted by this witness.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


                               __________
    Mr. Bachus. Thank you.
    Dr. Hall, you are recognized.

           TESTIMONY OF KEITH HALL, MERCATUS CENTER 
                   AT GEORGE MASON UNIVERSITY

    Mr. Hall. Chairman Goodlatte, Ranking Member Conyers, 
Subcommittee Chairman Bachus, Subcommittee Ranking Member 
Cohen, and Members of the Committee, thank you for the chance 
to discuss regulations and the current state of the U.S. labor 
market. I appreciate the opportunity to testify today.
    It has now been a full 4 years since the end of the great 
recession. Unfortunately, the U.S. labor market is far from 
recovery. At the end of the recession, just 59.4 percent of 
working age Americans had employment. Today that number is even 
lower at 58.7 percent.
    Over 100 million people are now jobless, and there are 
about 4.5 million long-term unemployed, and there are likely 
millions more long-term jobless that are not being counted.
    We may well be looking at a decade before the labor market 
is fully recovered. Even then, many of the long-term jobless 
may never fully recover their lost earnings or even find 
employment. Our primary focus should be on encouraging the 
economic growth that we need to push our labor market into full 
recovery mode.
    The biggest problem with the U.S. labor market is a lack of 
economic growth. According to our biggest job creators, small-
business owners, government is playing a role in holding back 
the economy.
    Remarkably, surveys of small-business owners show they are 
more worried about the government than the weak economy.
    For example, according to the Gallup-Wells Fargo Small 
Business Index, a third of respondents reported that their most 
important challenge is government regulation, taxes, health 
care/Obamacare, or just government generally, more than are 
concerned about attracting new customers or the economy 
generally.
    According to the National Federation of Independent 
Business, nearly half of all small-business owners cite either 
taxes or government regulation as their biggest single problem. 
According to both surveys, only 6 percent of owners are 
primarily worried about the quality of their employees.
    The most important thing we can do now is to eliminate the 
tremendous amount of uncertainty over economic policy that is 
holding back consumers and the economy.
    One serious concern of business seems to be the potential 
for new regulations. It is clear that poorly designed 
regulation can cause significant economic distortions that 
affect labor market. It is also true that even a well-designed 
regulation where there are significant benefits has an economic 
cost that needs to be considered.
    Any regulation that raises the cost of production for an 
industry lowers productivity and likely creates unemployment.
    Unemployment at anytime is costly for those involved. But 
in a bad labor market like today's, it can be devastating.
    For decades now, there has been a significant amount of 
economic evidence that unemployment results in a significant 
and sustained earnings loss for individuals. The immediate 
impact of job loss includes lost wages, job search costs, and 
retraining costs. Even after being reemployed, the permanent 
lost earnings for the jobless will be significant.
    Studies have shown it can take as long as 20 years for 
reemployed workers to catch up on lost earnings, largely due to 
skill mismatches between the jobs lost and the new jobs created 
in the economy.
    These losses occur for workers with different lengths of 
previous job tenure and all major industries, and for workers 
of any age.
    I anticipate that the poor performance of the labor market 
over the past 4 years will lead to an even greater earnings 
loss for the currently unemployed.
    At this time, we should also be particularly concerned with 
who bears the unemployment burden of regulatory changes. Youth 
and older workers have been particularly hard-hit by the 
recession and weak economic recovery.
    Youth have a higher unemployment rate, and despite their 
youth, are overrepresented in the long-term unemployed.
    For older workers, unemployment can be even costlier. It 
now takes an average of over 30 weeks for someone over 55 years 
old to find new work.
    Despite clear evidence of the devastating effects of 
unemployment on U.S. workers, it is routine practice for 
regulatory agencies to estimate the benefits and costs of 
regulatory changes under what economists generally refer to as 
the full unemployment assumption.
    This is literally the view that involuntary unemployment 
never exists because any individuals that become unemployed are 
instantly and costlessly reemployed in nearly identical jobs. 
If ever it was obvious that this is an inappropriate 
assumption, it is now in the aftermath of the great recession. 
This of course results in a systematic and significant 
underestimation of the cost of regulatory change.
    I have several recommendations for consideration.
    First, regulatory changes create unemployment, and 
unemployment in a bad labor market is much costlier than at 
other times. We should, therefore, consider suspending all but 
the most important regulatory changes until we are much further 
along into a labor market recovery.
    Second, I don't know of a single instance where a 
regulatory agency estimated that unemployment cost of a 
regulatory change. This practice is misleading to the public 
and to Congress. It should stop. Every new and significant 
regulatory change proposal should be accompanied by an economic 
impact analysis that includes a genuine attempt to project its 
unemployment costs.
    Third, when regulatory agencies estimate the cost of 
unemployment, they shouldn't limit themselves to the employment 
effect within the regulated industry. The unemployment created 
by regulatory changes can be much higher outside the regulated 
industry than inside.
    Fourth, we should stop discussing hiring created by 
regulations as if that is part of the economic benefit. It is 
not. It is part of the cost. Every compliance job lowers 
productivity and output in the regulated industry. It therefore 
comes at the expense of production jobs. The goal of any 
regulation should be to achieve its goals with the least use of 
additional resources, including labor resources.
    And fifth, since agencies make no effort to estimate the 
unemployment effect of regulations, they have no idea of who 
loses work and, therefore, of who is bearing the economic 
burden through job loss.
    Since regulation impacts industries unevenly, there may 
sometimes be real issues about its distribution effects, 
exactly what occupations are impacted, and where the jobs are 
currently located.
    Thank you.
    [The prepared statement of Mr. Hall follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    


                               __________
    Mr. Bachus. Thank you.
    Dr. Thomas?

TESTIMONY OF DIANA THOMAS, DEPARTMENT OF ECONOMICS AND FINANCE, 
                  HUNTSMAN SCHOOL OF BUSINESS

    Ms. Thomas. Chairman Goodlatte, Ranking Member Conyers, 
Subcommittee Chairman Bachus, and Subcommittee Ranking Member 
Cohen, and Members of the Committee, thank you for the chance 
to testify on the effects of regulation on low-income 
households today. I appreciate the opportunity to be here.
    My research shows that regulation has unintended 
consequences that are particularly detrimental to low-income 
households. These unintended consequences are as follows.
    Regulation of health and safety and the environment often 
represents the preferences of high-income households, but it 
increases prices and lowers wages for all households. As a 
result, low-income households are forced to pay for the 
mitigation of risks that are not their priorities.
    In this sense, regulations can have a regressive effect. 
Because of this regressive effect, it should be subject to a 
cost-benefit test that takes into consideration potential 
regressive effects.
    So let me explain that in a little bit more detail. 
According to the CDC, the top two causes of death in the United 
States are cancer and heart disease. And we spend billions of 
dollars every year to try to privately mitigate those risks. In 
doing so, we have some effect at least on the risk that we 
face.
    Just to give you a point of reference, in 2002, the 
mortality risk associated with heart disease was roughly 19 in 
10,000 of population, so 19 individuals out of 10,000 died from 
heart disease.
    Regulation, on the other hand, often addresses risks that 
are significantly lower. There are numerous OSHA rules that 
address occupational safety, but work-related fatalities only 
happen with the frequency of roughly 0.36 in 10,000 of 
population, so much lower.
    When people make private decisions to reduce risks, they 
start out with the highest risks that affect them the most. 
That just makes sense. As your income increases, you will also 
consider lower probability risks. What that means is then 
ultimately high-income households will already be concerned 
with low-probability risks, but low-income households are still 
dealing with high-probability risks that affect them the most.
    When regulation is directed at small probability risks that 
are costly to mitigate, it, therefore, represents the 
preferences of the wealthy. But it applies to everybody, 
regardless of income. So that means everybody has to pay the 
higher prices.
    Because low-income households have limited resources, that 
means that regulation forces them to transfer resources from 
mitigating high-probability, high-priority risks to the 
mitigation of low-priority, low-probability risks.
    Essentially, they have less money to spend on the 
mitigation of risk that actually matters to them because they 
are forced to pay for the priorities of higher income 
households.
    Take, for example, the 2005 removal of the essential use 
designation for CFC as a propellant in medical inhalers by the 
FDA. CFC is a greenhouse gas, and it was regulated because of 
its consequences on the ozone layer. Medical inhalers that use 
CFC had previously been exempted from the 1987 Montreal 
Protocol, which phased out ozone-depleting substances, and the 
Montreal Protocol was actually pretty successful at achieving 
its goal. The World Meteorological Organization estimated in 
2002 that the ozone layer is expected to return to pre-1980 
levels by the middle of the 21st century.
    Now that same research report also pointed out that 
additional reduction in CFC emissions would produce only small 
improvements, and that nonindustrial sources of CFC emissions 
were insignificant.
    So basically, what the WMO research indicated was that the 
benefits of banning CFCs as a propellant in medical inhalers 
were uncertain and at best negligible. The cost of the ban to 
consumers were real and significant, however. The price of the 
asthma inhalers, for example, have roughly tripled since this 
rule has been implemented. And that affects several million 
Americans. And low-income households, in particular, as you can 
imagine, are affected by this a lot.
    So when regulation is directed at small risks that are 
expensive to mitigate, it can have regressive effects on 
household income. And low-income households have fewer 
resources on hand to address their private high-priority 
concerns a result of that.
    This unintended consequence of regulation is real, but it 
is foreseeable, which is why it is important for agencies who 
are tasked with public welfare to consider the regressive 
effects of the regulations that they are considering, and to 
analyze the cost and benefit before they make decisions that 
affect people.
    Thank you very much for the opportunity to testify, and I 
look forward to your questions.
    [The prepared statement of Ms. Thomas follows:]
    
    
    
    
    
    
    
    
    
    
    
    


                               __________
    Mr. Bachus. Thank you.
    Mr. Goldston?

 TESTIMONY OF DAVID GOLDSTON, DIRECTOR OF GOVERNMENT AFFAIRS, 
               NATURAL RESOURCES DEFENSE COUNCIL

    Mr. Goldston. Thank you, Mr. Chairman, Mr. Cohen, Chairman 
Goodlatte, and Members of the Committee. Thank you for inviting 
me to testify today.
    NRDC believes H.R. 2122 is a fundamentally flawed bill.
    Though designated the Regulatory Accountability Act, the 
measure might be better named the ``regulatory atrophy act'' 
because its primary effect would be to prevent the government 
from exercising its responsibility and duty to protect the 
public.
    The title is also misleading because it implies that the 
current system lacks checks and balances when, in reality, 
Congress and the courts already have ample authority to hold 
agencies to account, and the entire system gives industry and 
others numerous opportunities, formal and informal, to 
influence the development of regulations.
    But the bill is not designed to codify an objective sense 
of accountability in any event. There is nothing in the bill 
that would enable anyone to take an agency to task if it failed 
to recognize a problem or to safeguard the public. No provision 
of the bill would make an agency more likely to, say, deal with 
shoddy lending practices that could cause an economic meltdown 
or prevent an outbreak of a foodborne illness or limit 
emissions of a pollutant.
    H.R. 2122 instead would make it much more difficult and 
time-consuming to address such problems.
    Indeed, the bill is a kind of anthology of bad ideas that 
have already proven to interfere with efforts to protect the 
public.
    For example, H.R. 2122 would require agencies to hold 
formal hearings on many proposals. Formal hearings are a 
procedure that fell into disuse years ago because experience 
showed that they ate up huge quantities of time without 
contributing much to the quality of regulations. But 
apparently, the potential for inordinate delay is a good enough 
reason to bring hearings back with a vengeance in H.R. 2122.
    Even more pernicious is the reasonable sounding requirement 
that agencies ``adopt the least costly rule'' to deal with the 
problem. Now, no one objects to the notion that safeguards 
should achieve their goals as inexpensively as possible, and 
there are plenty of existing incentives, administrative and 
political, to do just that.
    But the bill's language sets up a nearly impossible legal 
hurdle. For a rule to be upheld, the agency would have to prove 
that it had carried out an exhaustive analysis of virtually any 
and every alternative, including any alternative thrown in its 
way to sidetrack the process.
    We don't have to guess what the impact of this would be, 
because similar language has already made a dead-letter of key 
provisions of TSCA, the Toxic Substances Control Act. A court 
ruled that EPA could not ban asbestos, a material with cancer-
causing properties that are beyond dispute, because it could 
not prove that it had analyzed every alternative.
    It is ironic, if unsurprising, that some conservatives are 
embracing alternatives analysis in H.R. 2122 given that, at the 
same time, they are trying to remove the much simpler and more 
reasonable alternatives analysis from NEPA, and there will be a 
hearing before the Subcommittee on that on Thursday.
    But that is just more evidence that the alternatives 
provision in H.R. 2122 are expected to be hurdles to block 
progress rather than pathways to facilitate reaching a goal.
    There are other ironies in H.R. 2122. Conservatives often 
make a whipping boy of the Federal courts, but the bill 
requires the courts to take on a more activist role, 
substituting their judgment for the agency's, even on highly 
technical and scientific matters.
    And the bill claims to seek transparency, requiring 
agencies to make public virtually anything they have touched 
during the regulatory process, yet H.R. 2122 shields the 
involvement of the Office of Information and Regulatory 
Affairs, OIRA, from scrutiny, even while expanding its role and 
enshrining it in law.
    Under the bill, OIRA will likely play the most political 
and determinative part in the entire regulatory process, yet 
its guidelines are not subject to comment and its workings can 
remain private.
    All of this would be inexplicitly inconsistent if its 
overall purpose were not so abundantly clear, to block new 
safeguards with an ornate process and to slow anything that 
cannot be stopped entirely.
    This is not accountability, not an effort to ensure that 
agencies are effectively and efficiently carrying out their 
legal duties. Rather, this is an effort to amend and weaken 
existing law, and future statutes to boot, by overlaying a 
suffocating blanket of anti-regulatory bias.
    The result will be fewer needed safeguards despite public 
support for protection, and study after study showing that the 
benefits of regulation far outweigh the cost.
    Moreover, studies have found regulation to have a neutral 
to positive impact on employment.
    Time prevents me from describing all the problematic 
provisions of H.R. 2122, which I should say include overriding 
many existing statutes, including provisions of the Clean Air 
Act.
    But let me close by saying that it is appropriate to hold a 
hearing during the summer movie season. H.R. 2122 has a plot a 
bit like a summer suspense movie or novel, where a pleasant-
seeming character insinuates his way into a household and 
slowly but surely begins annihilating it.
    H.R. 2122 traffics in reasonable concepts and unthreatening 
language, but its cumulative effects on regulatory law will 
leave agencies hamstrung and the public exposed.
    Thank you.
    [The prepared statement of Mr. Goldston follows:]
    
    
    
    
    
    


                               __________
    Mr. Bachus. Thank you.
    Professor Levin, I want to apologize to you. I was reading 
your bio, but I think I called you ``Levine.''
    Mr. Levin. Levin is correct.
    Mr. Bachus. I know it is Levin, so I want to apologize. It 
is Ron Levin. I am reading your biography like I don't know who 
you are.
    Mr. Levin. No offense taken.
    Mr. Bachus. I apologize for that.

      TESTIMONY OF RONALD M. LEVIN, WILLIAM R. ORTHWEIN, 
 DISTINGUISHED PROFESSOR OF LAW, WASHINGTON UNIVERSITY IN ST. 
                             LOUIS

    Mr. Levin. Chairman Goodlatte, Chairman Bachus, Ranking 
Member Cohen, and Members of the Subcommittee, thank you for 
inviting me to testify before you again.
    My primary message today is one of caution. The bill before 
you has some positive features, but it also contains a host of 
provisions that would burden and disrupt the rulemaking 
process, or that do not seem very well thought out.
    The corresponding bill in the previous Congress, H.R. 3010, 
raced through the House in only 3 months from introduction to 
final passage. And the House did not respond to numerous 
criticisms from administrative lawyers. So I hope the current 
bill will get closer vetting this time around.
    I do not have time to discuss all aspects of the bill, but 
I want to commend to your attention the comments of the ABA 
Administrative Law Section, which did analyze H.R. 3010 in 
detail 2 years ago. I have appended that report to my 
testimony. I am not speaking for the ABA or the section today, 
but I did work actively on those comments. So if you questions 
about the issues the section raised, I would probably be in a 
good position to respond as an individual.
    For now, I want to highlight a few key troubling areas in 
the bill. My core concern about the bill is that it would 
greatly complicate the rulemaking process and make it 
impossible for agencies to carry out the missions that Congress 
has assigned to them.
    Many students of the administrative process believe that 
rulemaking is already too cumbersome. I believe that 2 weeks 
ago, Public Citizen presented a humongous chart* documenting 
all that. I think you saw it at that time.
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    *The Public Citizen chart referred to is not reprinted in this 
hearing record but is available at http://www.citizen.org/documents/
Regulations-Flowchart.pdf (7/18/13).
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    That is the chart, in case you don't remember it.
    But this bill would make Section 553--it does. But that is 
the modern rulemaking process.
    But this bill would make Section 553 ten times longer and 
it would aggravate that situation enormously. One way it would 
do this is by specifying a range of considerations that an 
agency would have to take into account in every rulemaking 
proceeding, whether it is significant or not, including costs 
and benefits of the proposed rule and all reasonable 
alternative rules; estimated effect of the rule on jobs, 
innovation, and competitiveness; whether the agency thinks it 
is required to adopt the rule or merely has discretion to adopt 
it; whether existing rules created the problem; and so forth.
    And some of those inquiries would be fine in a proceeding 
to consider a very elaborate and costly rule. But it is 
wasteful to require them in every rulemaking proceeding.
    Usually, if an issue is relevant and important to a 
particular rulemaking, some stakeholder will raise the issue in 
the comment period and the agency will then be required under 
current law to respond. But this bill requires the agency to 
address every item on the laundry list, whether it is 
significant in that case or not. And this is a waste of limited 
resources, which is especially worrisome in these days of 
serious budget-cutting.
    Second, the bill instructs agencies to consider some of 
these factors, even where the agency's enabling statute would 
otherwise forbid it to consider them. Super-mandates of this 
kind, as they are called, not only oversimplify the enormously 
diverse range of problems that various agencies regularly face, 
but also would give rise to a large amount of confusion and 
litigation. So unelected judges would have to sort out those 
mixed congressional messages.
    Third, for high-cost rules, parties would have the right to 
trigger trial type hearings under the APA's formal rulemaking 
provisions. Over 30 years' time, courts, agencies, scholars, 
and professional organizations have overwhelmingly concluded 
that formal rulemaking is obsolete, and they have abandoned it 
where they are not required to use it by statute.
    They conclude the courtroom methods are usually not 
effective tools for resolving highly technical policy disputes 
in regulatory contexts, but they do lead to unwarranted delays 
in completing the agency's business.
    And formal rulemaking is also subject to ex parte contact 
rules that would impede agency decisionmakers from conducting 
free-flowing dialogue with the public, with OIRA, and with 
Congress itself.
    But nevertheless, this bill would bring this dinosaur back 
from near extinction.
    Fourth, the bill contains some truly radical provisions 
expanding judicial review of agency action. These provisions 
would turn courts into policymakers in various contexts, 
although judges don't have political accountability or subject 
matter specialization to assume that role.
    In all of these areas and others we might have a chance to 
discuss today, I hope the Subcommittee will tread carefully and 
make sure the balance between accountability and effectiveness 
doesn't become skewed as this bill threatens to do.
    And with that, I will conclude my remarks and be happy to 
respond to your questions.
    [The prepared statement of Mr. Levin follows:]*
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    See Appendix for supplemental material submitted by this witness.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


                               __________
    Mr. Bachus. Thank you.
    At this time, we will recognize Members for their 
questions. And I will start by recognizing the Chairman of the 
full Committee, Mr. Goodlatte.
    Mr. Goodlatte. Thank you very much, Mr. Chairman. I 
appreciate your recognizing me.
    And I want to thank all of our witnesses for their 
testimony. I do have some questions for them.
    First of all, again, welcome Mr. Sells. I appreciate your 
testimony. And I wonder if you would tell us if the terms of 
the Regulatory Accountability Act were enacted and enforceable 
by judicial review, do you think that agencies would promulgate 
more flexible regulations that would make it easier for you and 
business people like you to grow your businesses and create 
jobs?
    Mr. Sells. Congressman, that would be a direct result of 
H.R. 2122.
    We feel like common sense and the issues that you bring up 
there would be beneficial to us in moving forward and making 
investments, growing our businesses, and growing jobs.
    Mr. Goodlatte. Do you think that the legislation would also 
produce more efficient and effective regulations, and promote 
more buy-in and compliance by regulated entities, which would 
then improve the achievement of the regulatory objectives in 
the first place?
    Mr. Sells. Yes, sir, they would. One of the things that we 
believe very openly about is transparency needs to be in all of 
these aspects.
    When you give the business community opportunity to meet 
with the regulators, meet with environmental groups, and 
discuss what the issues are, and what the end result, the 
endgame is that you are trying to achieve, which is the health 
and well-being of society, the growth of our economy, and 
employment of American citizens, then you can bring all these 
things together. And by allowing that information to come 
forward early in the system, it would allow for better 
regulations.
    Mr. Goodlatte. Thank you.
    Mr. Rosen, doesn't the Regulatory Accountability Act align 
rulemaking incentives in the right direction by encouraging a 
race between agencies and stakeholders to see who can propose 
the lowest-cost alternatives and create the most possible 
benefits?
    Mr. Rosen. That is right, Mr. Chairman. I would agree with 
that, Mr. Chairman.
    That is one of the big benefits of increasing public 
participation, is trying to find solutions that accomplish the 
statutory regulatory objectives, but do so in a way that is 
more efficient, more effective, and better for everybody.
    Mr. Goodlatte. Thank you.
    Mr. Goldston, your central criticism of the Regulatory 
Accountability Act is that it hampers regulations by 
``overlaying a suffocating blanket of procedures on agency 
rulemaking.'' But isn't that the same as claiming the bill 
would overregulate the regulators?
    I mean, the fact of the matter is, put yourself in Mr. 
Sells' shoes and figure out what is going on in terms of the 
operation of his business when confronted with the massive 
regulations that come out at him literally every day of every 
business day of the year that they have to confront and deal 
with. Shouldn't there be some greater sense brought to that 
regulatory process than what I would call overkill that is 
taking place right now?
    Mr. Goldston. Thank you, Mr. Chairman.
    I would say the issue right now isn't whether there are any 
possible reforms to the regulatory system, but whether this 
bill would actually reform the regulatory system. So I would 
say, in this particular case, this bill is indeed overkill.
    First of all, as Professor Levin mentioned----
    Mr. Goodlatte. Well, let's go to your first comment. What 
are the regulation changes that you could support that would 
make this environment better?
    We are here to learn from you.
    Mr. Goldston. Excuse me?
    Mr. Goodlatte. We are here to learn from you. This bill 
could conceivably be improved, if you could point us in the 
right direction of how to deal with what many of us perceive to 
be regulatory overkill in a way that makes more sense to you. I 
want to hear that.
    Mr. Goldston. So I would say we would start by saying that 
the approach shouldn't be to add as many new requirements as 
possible, particularly requirements whose only purpose seems to 
be to drag out----
    Mr. Goodlatte. Are you saying instead we should make it 
easier to get regulations out the door?
    Mr. Goldston. I think in some cases, with the help of both 
parties----
    Mr. Goodlatte. Let me just throw out a statistic here. In 
the past 10 years, final rules--in other words, you have 
completed the regulatory process--with the effect of law from 
administrative agencies have outnumbered laws passed by the 
Congress by 223 to 1. For every one law that this Congress 
passes, the massive Federal bureaucracy puts out 223 
regulations.
    This Congress is not shy about passing laws either. We 
usually produce 300 or so new laws each Congress. So you are 
talking 60,000 new regulations each 2-year cycle.
    And we need to make it easier to produce those, so that 
businesses like Mr. Sells' have to confront more than 60,000 
new regulations every 2 years?
    Mr. Goldston. Mr. Chairman, all those regulations are 
promulgated pursuant to Federal statutes enacted by the 
Congress. The agencies are not willy-nilly doing that.
    If Congress doesn't----
    Mr. Goodlatte. That is why we are here today, because we 
think they have carried that ball way too far, and there needs 
to be a check on what they are doing to make sure they are more 
efficient and more effective and more cost-effective and more 
responsive to the people who have to carry these out and have 
to adjust their business models and have to cut back on 
employment when they can't afford to meet the regulations. That 
is why we are here.
    Mr. Goldston. Mr. Chairman, if I may, the way to handle 
that, if there are problems with the----
    Mr. Goodlatte. We have to pass 60,000 new laws curtailing 
the 60,000 regulations? I don't think so. I think we have to 
have a more pragmatic way to do that.
    Mr. Goldston. With all due respect, I don't think it 
requires 60,000 new laws. These are not being done each one by 
a different law.
    If, for example, there are problems with the Clean Air Act 
in your view, then you should try to pass those changes. In 
reality, those changes don't tend to be passed through Congress 
because the public support isn't there to amend the Clean Air 
Act.
    Mr. Goodlatte. In reality, the Congress has ceded so much 
authority to the executive branch that it is an absolute 
impracticability to go through those one law by one law.
    If I might, Mr. Chairman, if I could ask one more question 
of Mr. Levin, then I will not ask for anything more here.
    Mr. Cass Sunstein, the former Obama administration OIRA 
administrator, and perhaps the single most prominent 
administrative law professor in the country, told the 
Commercial and Administrative Law Subcommittee in 2010 that the 
basic principles of the executive orders on rulemaking were 
important and should be a permanent part of the regulatory 
system.
    Do you disagree with him?
    Mr. Levin. Actually, I don't. I support the executive 
orders. What I am concerned about is----
    Mr. Goodlatte. Making them a permanent part of the 
regulatory system, which is what this legislation is to do.
    Mr. Levin. With nonreviewability in the courts, as the 
orders provide, with a balanced list of factors to consider as 
the executive orders provide, but this bill would not, yes, I 
think those should remain. But I don't think they should be 
codified.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Mr. Bachus. Thank you.
    Mr. Cohen, the Ranking Member, is recognized for 6 or 7 
minutes.
    Mr. Cohen. Thank you, sir. I probably will not take that.
    Dr. Thomas, first, I would like to ask you, was your work 
on German beer, medieval beer, did that relate to regulations?
    Ms. Thomas. Yes, it did.
    Mr. Cohen. How did regulations affect German medieval beer?
    Ms. Thomas. Well, most of the time, they regulated the 
space in which the beer could be sold, so geographically 
constrained it. And that was hindering to competition.
    Mr. Cohen. Which is generally what happens, that 
legislation is passed that restricted, the regulations to 
benefit somebody.
    But let me ask you, your statement was all about 
regressivity. The whole world is regressive. You understand 
that, don't you?
    Ms. Thomas. Yes.
    Mr. Cohen. And I don't understand what you are saying, that 
all this is about high-income people's preferences and what 
they desire to the detriment of low-income folks, because it is 
regressive on them, and high-income people have these--it is 
almost sounds like some kind of socialist-type statement that 
you are making.
    Should the whole world be taken down to the basic minimum 
quality?
    Ms. Thomas. What I am suggesting is that when regulation 
addresses low-probability risks, it represents the preferences 
of the wealthy. And in those cases----
    Mr. Cohen. How do you know it represents the preferences of 
the wealthy?
    Ms. Thomas. Well, like I said in my testimony, households 
will address the highest probability risks before they address 
lower probability risks.
    So just by the nature of things, low-income households 
don't have the resources to address low probability.
    Mr. Cohen. Right, because they are poor, or lower income.
    Ms. Thomas. That is right.
    Mr. Cohen. So let me ask you this, at the Mercatus group 
that you work with, Mercatus Institute, what have you all done 
in studies about regressivity in taxes, so that we can see to 
it that maybe people who are poor don't have to pay more burden 
of taxes, which is what this allows them, because they don't 
have that income, because it is a regressive tax system, to 
have those choices.
    Do you have any papers that you all have done on regressive 
taxes?
    Ms. Thomas. I don't actually work for the Mercatus Center. 
I work for the university. I am just under contract with the 
Mercatus Center.
    Mr. Bachus. That is Dr. Hall.
    Mr. Cohen. Have you done any work at all on regressive 
taxes?
    Ms. Thomas. No, I haven't.
    Mr. Cohen. You haven't.
    Ms. Thomas. What my work shows is the regressive effects of 
regulation are to take money from the poor that they would be 
spending on high-probability risks that they could mitigate 
privately and reduces their income, essentially.
    Mr. Cohen. Mr. Goldston, what do you think about this 
premise?
    Mr. Goldston. Well, a couple things. One, there are ways to 
address regressivity.
    But I would say that, first of all, many of the things that 
poor people would do to address the high risks, such as 
stopping smoking, actually don't cost more money. My 
understanding of some psychological literature is that people 
don't necessarily start by addressing the higher risks.
    But the main point is two things. One, low-income people 
are often actually the primary beneficiaries of important 
Federal regulations, such as the Clean Air Act, because low-
income people actually often face higher rates of asthma and, 
therefore, regulations that reduce the chance of asthma attacks 
actually disproportionately probably benefit lower income 
people.
    Mr. Cohen. And they are more likely to live in the inner 
city where the pollutants are more likely to occur.
    Mr. Goldston. Exactly.
    So I question some of the assumptions about regressivity.
    And it seems to me that if there are economic consequences 
to be dealt with, those should be dealt with separately after 
taking care of these broad health changes that the regulations 
can provide.
    Mr. Cohen. Do you think that maybe a better way to address 
this problem of regressivity might be to pass a jobs bill and 
put people to work?
    Mr. Goldston. Well, I would agree that, looking at 
regressivity solely through the lens of regulation is a 
particularly distorted way to do it, given that there are tax 
consequences, budget consequences, in terms of regressivity. It 
would probably swamp anything in regulation, which, again, 
often benefits low-income people, and where there are other 
ways to take care of environmental justice issues.
    Mr. Cohen. Mr. Sells, are you by chance the swimmer?
    Mr. Sells. Yes, sir.
    Mr. Cohen. What do you think about swimming regulations, 
like regulations to say that you have to put the depth of the 
pool so you don't dive into a pool and it was 2-feet deep and 
hit your head? Do you think that is a good regulation?
    Mr. Sells. Yes, it is.
    Mr. Cohen. And how about regulations that put fences 
around, so kids can't get into the swimming pools?
    Mr. Sells. That is a very good thing.
    Mr. Cohen. Yes. And maybe the amount of chlorine that goes 
into the water, so when you are doing your butterfly or 
whatever it be, that you are safe?
    Mr. Sells. Yes, sir.
    Mr. Cohen. So some regulations are good, and it just 
depends----
    Mr. Sells. Some regulations are good, and the ones you are 
pointing to are common sense. And that is what we are asking, 
as far as the business community is concerned, common sense and 
input from the business community, so that the impacts are 
appropriate for the business that we are trying to do.
    Mr. Cohen. And when you swam at U.T., you beat Alabama 
swimmers, didn't you?
    Mr. Sells. Yes, sir, I did. We lost on one occasion also.
    Mr. Cohen. Did you?
    I yield back the balance of my time.
    Mr. Bachus. All right, thank you.
    Mr. Holding?
    Mr. Holding. Thank you, Mr. Chairman.
    Mr. Rosen, you and other witnesses have discussed the 
Regulatory Accountability Act and the transparency provisions 
there to put businesses on notice what regulations are coming.
    So I would like to get a little bit more specificity, so if 
you would tell us what kind of transparency reforms would be 
helpful to address the issue of this systemwide lack of 
transparency throughout the entire regulatory process.
    So if you could address that with some specificity rather 
than just general terms.
    Mr. Rosen. Sure. I alluded in my written statement to the 
fact that sometimes one of the frustrating aspects of debates 
about regulation writ large, the regulatory process, is 
unavailability of some kinds of data. And that is because there 
isn't full transparency, even though, on the whole, the Federal 
Government is actually pretty effective at collecting and 
publishing data in a lot of areas. But in the area of 
regulations, we are a little short.
    So there are improvements that could be done to make the 
regulatory process, just in an information sense, more 
transparent.
    You have, by executive order, twice a year OMB publishes a 
regulatory agenda. But the agenda could be much more robust in 
terms of what is disclosed in the agenda as to the various 
rules that have entered the pipeline, where they stand.
    It could be more frequent. It could be more detailed in 
terms of covering more aspects. It could be broken out with 
greater specificity as to cost levels that are anticipated, the 
source of the authority, the timetables, and what stage it is 
at.
    It could also, after rules are done, is where the 
government isn't so good at publishing aggregate data. And 
there are trade groups and nonprofits and others who try to 
collect that. But it is a difficult task to get it accurate as 
to what was done the prior year, how many rules of a different 
type. And there could be more transparency as to the cost-
benefit studies that are done.
    I think our academic colleagues in particular could 
probably profit from that, because the way it works now, the 
Agriculture Department does a cost-benefit study for a 
particular rule. It is in the docket for that rule. If the 
Transportation Department does one, it is in the docket for 
that rule.
    But if you are trying to access the larger mass of how many 
were done last year and what is the quality of them, it is a 
fishing expedition. I mean, you have to learn a lot about how 
to master the various dockets and things.
    So it could be made a lot more transparent by providing, in 
essence, a central repository and linkage to that.
    There other kinds of information that aren't very 
transparent. Each agency has what is called a regulatory policy 
officer. Those could be identified to the public, as an 
example, as to who they are, so if you have an issue, you can 
go to them.
    I could probably detail more than I have some of the 
specificity that you could get both out of the agenda and the 
annual----
    Mr. Holding. Well, how about in respect to timing. It is a 
biannual requirement now. What about if we had monthly updates? 
You could post them on the Internet and keep a running monthly 
update.
    Mr. Rosen. That would be a big improvement.
    Mr. Holding. Do you think it would be burdensome to do a 
monthly update? Or do you think they do them internally, 
anyway?
    Mr. Rosen. Exactly. If an agency is working on rules, it 
has to know it is working on them. Its leadership has to be 
able to track them. If they are not doing it, I would be 
surprised, because all the ones I am familiar with were.
    But if they are not, it would be a good tool to make them 
to it.
    And so I don't think it would be very burdensome, because 
it is being done, for the most part, already. It is just not 
made public, although some agencies do. DOT is a good example. 
They publish a monthly report. But most don't.
    So making that a monthly update to the agenda, putting it 
on the Internet, a big improvement.
    Mr. Holding. A final question: Do you think if the 
Regulatory Accountability Act had been in place since the late 
1960's, early 1970's, when our modern regulatory authorities 
were fully starting to take shape, do you think we would be 
where we are now with the regulatory cost of $1.75 trillion per 
annum to comply with regulations?
    Mr. Rosen. I don't, and the reason I say that is I think 
there are rules out there that are inefficient, ineffective, 
and overly costly. And many of those would have been caught in 
a better process, like the Regulatory Accountability Act would 
establish.
    Mr. Holding. Thank you.
    Mr. Chairman, I yield back.
    Mr. Bachus. Thank you.
    Ms. DelBene?
    Ms. DelBene. You are getting closer.
    Mr. Bachus. I have been practicing.
    Ms. DelBene. DelBene.
    Mr. Bachus. DelBene.
    Ms. DelBene. I was born in Alabama, too, so I appreciate it 
is hard to say. Closer.
    Thank you, Mr. Chairman, and thanks to all of you for being 
here and taking time out of your day to be with us today. I 
really appreciate it.
    Professor Levin, you talked about the additional 
complications that would come with this bill, and that it would 
require many rulemaking considerations that may not be relevant 
in the context of particular rules, and create a very labor-
some process that isn't necessary.
    So, given that, and that this bill kind of puts that in 
place, if you are going to set aside this legislation, and if 
the Subcommittee asked for your input on creating a more 
efficient regulatory system that provided additional safeguards 
for small businesses, how would you start? And would you make 
any changes to the APA? Or would you recommend any changes to 
the APA?
    Mr. Levin. Well, on the matter of rulemaking 
considerations, I would refer you to the passage in the ABA 
comments, which I think potentially could have bipartisan 
support.
    And what the section recommended was that Congress and the 
executive branch should get together to harmonize the 
conflicting mandates and impact analysis requirements and 
factors in a host of statutes, a host of orders. And agencies 
have trouble figuring out what they are supposed to do, because 
they are all going in different directions. If you put them 
into a common structure, it would make things clearer for 
agencies.
    And what the section recommended was that it should be no 
more burdensome than we have now, or if possible, less 
burdensome. But if you harmonize them, you would make it a more 
efficient structure.
    Ms. DelBene. And when my colleagues are talking about the 
cost of the regulatory process, your testimony seems to 
indicate you think that the particular bill would make it even 
more costly for us to implement the recovery process.
    Mr. Levin. Oh, absolutely. And in Democratic and Republican 
administrations alike.
    Ms. DelBene. Thank you.
    Mr. Goldston, I guess Dr. Hall was talking about the impact 
on employment with respect to the regulatory environment. And 
you made a statement saying that you actually thought that 
regulations could have a positive impact on employment. I 
wondered if you would give kind of where that information comes 
from and what is your point of view compared to Dr. Hall's.
    Mr. Goldston. Sure. And what I was saying was that the 
literature has tended to show very little effect on employment. 
It could be slightly positive. I am going now, among other 
things, from a paper put out by the Wharton Center on 
Regulation, which definitely tries to look at both sides. And 
it summarizes the four major papers that have been done over 
the years looking at regulation and employment.
    And the primary one that is most cited is Morgenstern, 
Pizer, and Shih, which is from Resources for the Future, that, 
again, basically found, looking across several industries, no 
overall effect on employment with slightly positive effect on a 
few industries, particularly petrochemicals. And most of the 
other studies have shown the same kind of minimal effect across 
the board.
    Ms. DelBene. So neutral is what you are saying the studies 
would show?
    Mr. Goldston. That regulation doesn't have a big effect on 
overall employment one way or another, and certainly isn't 
responsible for the recession, or our inability to quickly 
recover from a recession.
    Ms. DelBene. And in earlier comments, when you were talking 
about the rulemaking process with respect to implementing 
legislation that Congress has brought forward, do you feel like 
Congress could do a better job, in terms of how we provide 
legislation that would also----
    Mr. Goldston. Well, Congress could give more direction, 
obviously. I just think that these agencies are not acting by 
fiat. They are acting in response to statutes that direct them 
to put out regulations to protect the public. And if there are 
problems with those underlying statutes, then that is what 
should be addressed and debated. This kind of sweeping bill, 
which as Professor Levin mentioned, has super-mandates that 
single-handedly override statutes simply by the short phrase 
``notwithstanding any other provision of the law,'' that is not 
the way to do it.
    I would also, if I might, say a comment or response to Mr. 
Holding's questions. We also would like to see, and this in 
some ways gets at one thing Chairman Goodlatte was asking about 
also, we would love to see more transparency in the way OIRA 
does it work.
    That entity has become more and more powerful. It should be 
more transparent. And yet, OIRA is the one entity not required 
to be more transparent under this bill. It is able to provide 
guidelines that courts have to defer to. In the past, OIRA 
guidelines have been reviewed by the National Academy of 
Sciences. And the National Academy of Sciences said they should 
be withdrawn because they weren't properly done. OIRA is just 
as fallible as any other entity.
    And while every other agency has to be transparent under 
this bill, the bill says OIRA, it is at the discretion of the 
director. So a change that maybe we would all agree on is 
greater transparency for OIRA which this bill stands in the way 
of, actually.
    Ms. DelBene. Thank you.
    Thank you, Mr. Chair.
    Mr. Bachus. We have allowed other people to go over, so if 
you have another question?
    All right, thank you. I think the lady from Washington.
    And now our newest Member of the Committee, the gentleman 
from Missouri, Mr. Jason Smith.
    Mr. Smith. Thank you, Mr. Chairman.
    Mr. Rosen, I think you would probably be a good one to ask, 
but back in my district, in fact, EPA has had a rule that was 
in effect for nearly 40 years that affected dairy farmers. And 
it required that they were compared under the same act as oil 
spills, and it would cost roughly some of them $10,000 a year.
    Do you believe that if this act was in place, if that rule 
would never have been on the books?
    Mr. Rosen. If I understand the rule that you are talking 
about, I think it would have had a negative cost-benefit and 
that alone would have been a problem for it.
    Mr. Smith. I agree. Earlier, there was also some talk about 
the rulemaking on the peanut butter situation.
    The time-consuming process allegedly demonstrated that 
formal regulatory hearings for proposed rules would be 
impractical. Are you familiar with the peanut butter example?
    Mr. Rosen. Yes. And it is one of the great myths that is 
thrown up as criticism of allowing hearings in rulemaking.
    So I am glad you raised that, because the famous FDA peanut 
butter rulemaking that took 10 years, the part of it that 
involved a hearing was 30 days. And they did not even have the 
hearing until 5 years into the rulemaking, actually 6, over 6 
years in. And then after they had the hearing, they delayed 
some more.
    And so the problem of delay exists in all rulemaking. It 
has nothing to do with whether there are hearings or formal 
rulemaking or hybrid rulemaking. The peanut butter rulemaking 
actually stands for a different proposition, which is that 
agencies are often inefficient and slow. I can cite chapter and 
verse of notice and comment rulemakings that took 7, 10, 12 
years.
    When I got to the Department of Transportation in 2003, 
there were a half-dozen rules that were pending more than a 
dozen years, and none of them had hearings.
    So it is a big myth and a distraction. There have been 
formal rulemakings conducted on the record that were done in 
roughly a year or just over a year, which is extremely fast for 
rulemaking.
    The Agriculture Department during the Bush years did one on 
milk marketing orders. The Commerce Department did one 
extremely fast under the Marine Mammal Protection Act, 
involving I think they were beluga whales.
    So these anecdotes that are used to criticize the bill, 
they just don't hold up. And when you have $1 billion at stake, 
the whole idea that you could make a law with no hearing, no 
notice, nothing, involving $1 billion and 30 days' notice, that 
is not what was intended when the APA was promulgated.
    And so we are talking about a small subset to deal with 
factual issues where the premise, if it is mistaken, will 
produce a $1 billion error. It is not very much to ask that if 
someone has evidence that $1 billion error is about to be made, 
they get a chance to tell the agency so. That is not a big 
thing to ask.
    Mr. Smith. Thank you.
    Professor, earlier, I believe that I wrote this down right, 
you said that if the Regulatory Accountability Act passed, that 
this would be more costly on the agencies. Is that correct?
    Mr. Levin. Yes.
    Mr. Smith. So, would it be least costly on the small 
businesses if this were in place?
    Mr. Levin. Would it lower costs on small businesses?
    Mr. Smith. With less regulations.
    Mr. Levin. It would not directly affect them, but it would 
mean that either Republican or Democratic administrations could 
not get done what they need to do. A Republican administration 
or any Administration that wants to deregulate small business 
would have many more hoops to jump through also.
    So I think what you are doing is stymieing the 
administrative process for good or for ill, in whatever 
direction. You should make the judgment of what your policies 
are going to be on substantive grounds, but not mess up the 
process of decision.
    Mr. Smith. So it would cost agencies more money and the 
small businesses not as much?
    Mr. Levin. No, I was not testifying to that. I am saying 
that it would cost the agencies more money and, therefore, 
reduce their efficiency. And who knows what the effect would be 
on affected entities, because the effect of the bill would 
simply slow things down no matter what direction a conservative 
or liberal Administration wants to go.
    Mr. Smith. It would take longer for more regulations to be 
put on small businesses and family farmers, correct?
    Mr. Levin. Yes, as well as regulations that would relieve 
their burdens.
    Mr. Smith. Thank you, Mr. Chairman. I yield my time.
    Mr. Bachus. Thank you.
    There is some discussion, Mr. Goldston, you were talking 
about discussion of impact on the poor and my take was you were 
discounting Dr. Thomas' comments, what she described, inhalers, 
bronchial dilators.
    And I think she in her testimony, whether she said this or 
not, but I do know, because there have been several articles 
that the new regulations, the effect of their discharge on the 
ozone. But it did quadruple the cost of most of those dilators.
    Is that your understanding, that it tripled or quadrupled 
the cost?
    Mr. Goldston. Mr. Chairman, I would like to get back to you 
on that on the record, because we do have an expert who 
actually has written extensively on this issue.
    My understanding, which I will double check, is that, first 
of all, most people have moved away from the ozone-based 
inhalers that the companies had many years to prepare, and then 
the concern is obviously not just the use of the inhaler 
themselves, but the production, because it keeps CFCs in 
production and so forth.
    But let me get back to you with a more extensive answer, 
because we do already have material on that that I am not fully 
familiar with.
    Mr. Bachus. I am aware that oral medications, there have 
been some substitutes----
    Mr. Goldston. As I understand it, they are more effective.
    Mr. Bachus. Or immunization. We have long-term, I guess you 
would say, a series of immunization.
    But still, in several diseases, even degenerative diseases, 
particularly. And the cost has gone up.
    And I do know that the agency did not consider that, that 
they at least said that was not part of their consideration. Do 
you think they should have considered that fact?
    Mr. Goldston. Again, I would have to look at what was 
actually done. Again, the industry was given a particularly 
long period of time in which to phase these out. So in that 
sense, the agency did take into account. It did not say 
tomorrow these kinds of inhalers are not available.
    Mr. Bachus. They are still dispensed in the hundreds of 
thousands every month, I think, and the cost has gone up. I 
mean, it has to drive up the cost.
    Would you say the cost to those who need that medication, 
and most of them critically, can be the difference between 
being able to actually breathe or not? Do you think that ought 
to be considered?
    Mr. Goldston. I think the cost to consumers ought to be 
considered. I think it is.
    But again, I would like to get back on the specific--my 
understanding is that actually a more effective medication was 
developed over that period for reasons beyond just the CFC 
concerns.
    Mr. Bachus. Okay.
    Mr. Goldston. On the larger issue, though, again, I think 
there are other ways to deal with regressivity and looking at 
regressivity just in terms of what is reduced by regulations--
--
    Mr. Bachus. Sure. I know you talked about smoking. And 
smoking obviously can result in and I guess aggregate emphysema 
and aggravate asthma. But people are usually born with asthma. 
They either have it or they don't.
    Mr. Goldston. Rates have been going up for reasons that are 
not completely understood. We do know what causes more asthma 
attacks, which includes dirty air.
    Mr. Bachus. Okay. And obviously, the pollution is 
aggravating source.
    I know you are, Mr. Sells, in the concrete business. I was 
amazed, and again, anyone of you want to comment, when I had 
the EPA in my office and they were proposing some changes in 
arsenic levels and precipitants in the air that were indeed 
something we don't want in our air.
    There was a chart that showed that the occureence of 
arsenic and some of those matters was heaviest on the West 
Coast and along the Gulf of Mexico, along the Texas border, the 
Mexico-Texas border, tremendous concentrations there, and along 
the Gulf Coast.
    When I asked in a hearing, what is the source of this 
matter or material, it was Mexico and China. And yet, the 
regulation was directed at cement plants all over the country, 
including those in the East, where there is almost no arsenic 
in the air, even around the cement plants in my district, which 
is having to spend millions of dollars.
    And I asked, well, what about China and Mexico? They said 
they couldn't consider it. They don't have any control over 
China and Mexico.
    But they also, in that report, said that they would 
eliminate as much as a third of the production in the United 
States, but that it could be easily be replaced from Mexico.
    And that is the type of thing that I think frustrates us.
    Mr. Goldston. Mr. Chairman, again, I will get back to you 
in greater deal in detail for the record. But my understanding 
is, first of all, that the regulations concerning arsenic are 
maximum achievable control technologies, so that is not 
concerned with the overall amount in the air, but actually what 
can be affordably achieved at a given----
    Mr. Bachus. No. Absolutely, let me say this, it absolutely 
can be achieved. But the cost was so prohibitive that even the 
EPA said it would shut a third of our production down. I mean, 
that was a part of their finding.
    Mr. Goldston. But my understanding, again, on these rules 
is actually the EPA concluded that there were not likely to be 
any plant closures from the rule, that there were some--and 
that, indeed, the rules have since been weakened to the point 
which, as Mr. Sells mentioned, some in the environmental 
community are actually suing, arguing that EPA weakened the 
rule----
    Mr. Bachus. They are. You are absolutely right. And I can 
tell you well aware.
    But they were weakened as a result of people raising hell 
and saying, this is going to cost--we are going to lose jobs.
    Mr. Goldston. But if the argument is that the current 
system doesn't allow for any information to be given to an 
agency, doesn't allow for give-and-take, then whatever the pros 
and cons of the specific cement rule, it certainly shows a lot 
of process where there are already abilities for the company to 
have recourse.
    Mr. Bachus. Actually, the agency, it was only a tremendous 
outcry by people that said you didn't consider this. They said 
they couldn't. Only because, I think both President Bush and 
President Obama people said we can't do that.
    Mr. Sells?
    Mr. Sells. If I may, Mr. Chairman, mercury is the big 
issue. And to your point, EPA's own data indicates that 85 
percent of the mercury deposition in the United States comes 
from offshore sources.
    For the cement industry, we have, currently, about 105 
cement plants in this country. And over the next 3 or 4 years, 
with the implementation of the latest NESHAP, approximately 12 
to 15 of those facilities will close in this country.
    Now, when we were at our peak, our demand for cement in 
this country and construction at that time was 130 million 
tons. We only have capacity in this country for 105 million 
tons.
    So in the same period of time, the last decade, where we 
have permitted three cement plants, which basically replaced 
most of the capacity in this country, the Chinese have gone 
from 1 billion tons, metric tons, of cement to 1.8 billion tons 
of cement.
    So there is tremendous increase in what they have done. I 
always use the analogy that we have the Olympics in Atlanta and 
the sky was blue, and we didn't close any industries. When we 
went to China and Beijing, they closed industry within 100 
miles, limited traffic, and they still couldn't get the skies 
clean.
    Mr. Bachus. I will tell you, Mr. Goldston, the Lehigh 
Cement Plant in Leeds, Alabama, they would have to spend, to 
comply with the regulations, some of which have been withdrawn 
on mercury and arsenic----
    Mr. Goldston. They really haven't been withdrawn, sir. They 
have been delayed.
    Mr. Bachus. Been delayed.
    It would have cost them--they have made no profits in 4 
years. I mean, they have lost money in 4 years. So it was not 
that they would have to take all their profit. They would have 
to take all their revenues for 3 years, which was an impossible 
task.
    It is those types of things, when they tell us they can't 
consider that it will be replaced, it will come from Mexico and 
China----
    Mr. Goldston. Mr. Chairman, obviously, I can't speak to the 
specific plant that you are referring to. But for the industry 
as a whole, the industry is highly profitable.
    That doesn't mean that costs ought not to be considered as 
allowed under the law, but I am not sure what the moral is of 
Mr. Sells' story.
    It is true that China has horrible pollution because it 
doesn't regulate plants. Presumably, the answer to that isn't 
to create the same situation here.
    Mr. Bachus. Well, the moral is, is that we are going to 
shut down American jobs, American companies. It will be 
produced in Mexico and China. And it will increase mercury in 
our air in the United States.
    Mr. Goldston. Well, presumably the huge increase in Chinese 
cement plants is due to the extraordinary construction boom in 
China, not the----
    Mr. Bachus. Well, they are increasing their imports to us 
and Mexico. I mean, we are getting more for Mexico.
    In fact, in Mexico, they made so much money, the Mexican 
cement plant, they started buying our cement companies with the 
profits they are making because they don't have the 
environmental----
    Mr. Goldston. Then they apparently didn't feel that it was 
too much of a burden to comply with American regulations when 
they were buying those plants.
    Mr. Bachus. Well, they are making so much money by not 
complying in Mexico.
    But I am just saying it ought to be considered.
    We did look at the chart, Mr. Levin. And what we are 
talking about here our jobs. And we couldn't find anywhere on 
the chart where it says that the agencies are required to 
assess job loss or job impacts.
    Do you know where that is on the chart? Are you aware where 
they have to assess adverse job impact?
    Mr. Levin. Well, as I mentioned, it's Public Citizens' 
chart, not mine. But I think you are correct, that there is no 
positive law requirement that they do that.
    Mr. Bachus. Yes, do you agree there should be?
    Mr. Levin. I don't think it should be part of the law for 
every rule in every agency, because I do favor impact 
requirements with regard to major rules. But this would apply 
to every regulation that----
    Mr. Bachus. Well, what about--I mean it may not be every 
job in an every industry, but that is somebody's job.
    Mr. Levin. What about rules----
    Mr. Bachus. For somebody, that is 100 percent of their pay.
    Mr. Levin. What about rules on Medicare, rules on Indian 
tribes, rules on homeland security?
    Mr. Bachus. Again, I think job impacts ought to be 
considered along with anything else.
    What do Republicans and Democrats agree on? Jobs, jobs, 
jobs. The President has used that term. John Boehner has used 
that term. Bob Goodlatte has used that term. Jobs, jobs, jobs.
    That is what our economy needs. If we have more jobs, we 
will have better health. We will have better crime rates. We 
will lower that. It will make a safer country.
    Mr. Levin. Mr. Chairman, I agree with that sentiment, and 
agree with that issue as one that is before the country. But I 
believe this isn't legislation that is well tailored to address 
that.
    Mr. Bachus. I see. Okay.
    Let me say this, as the Chairman said, we would like to 
work with the American Bar Association and other groups, 
because some of these executive orders, we appreciate your 
willingness to work with us.
    Mr. Levin. I just want to clarify again, I am not a 
spokesman today for the----
    Mr. Bachus. I understand that, but you are an expert on 
administrative law. You have written a leading casebook.
    Mr. Levin. I would like it to be leading, yes.
    Mr. Bachus. It is a very good casebook. Thank you.
    Mr. Cohen. Mr. Chairman, can I ask a question?
    Mr. Bachus. Mr. Cohen, you said you did not want to--no, 
you can ask as many questions as you want.
    Mr. Cohen. You brought up a good point.
    What if we just took this bill and made it into a bill that 
said that when you have these regulations, that they have to 
talk about jobs, and just synthesize it down to that. We might 
be able to pass it.
    What about that?
    And I think it is interesting that you mentioned that one 
job, that is one person's job, and I agree with you. But at the 
same time, Dr. Thomas' paper writes about how few lives would 
be saved, because of these rearview mirrors or rearview cameras 
in cars. And that life is somebody's life.
    Mr. Bachus. And I said esoterically one job. It is probably 
not one job. It is probably going to be thousands of jobs on 
every regulation.
    Mr. Cohen. Right. But it is a balancing point.
    Mr. Bachus. But it is sort of like, if you are that 1 
percent, it is 100 percent to you.
    Mr. Cohen. Exactly. The same thing with your life.
    Mr. Goldston. Mr. Cohen, the other factor obviously is how 
good or bad the economic analysis is at this point in terms of 
being able to actually estimate jobs, even with cost, which is 
somewhat easier. Again, one RFF study showed that, in the vast 
majority of cases, initial cost estimates overestimate what the 
cost will be.
    So I think I agree that the concerns with this bill is not 
that it mentions the word job, as Professor Levin mentioned. We 
are all concerned about jobs, but the fact that it turns it 
into a kind of requirement, and then adds all these other 
layers to that. We also need to be realistic about how good 
this estimating is before we place overreliance on it.
    Mr. Bachus. All right, Mr. Collins----
    Mr. Cohen. I think Professor Levin, a student of Charles 
Burson's, I think, has a comment.
    Mr. Levin. Yes, I am. A great Tennessean.
    Mr. Cohen. A great Tennessean. And no controlling legal 
authority. All right.
    Mr. Levin. I just wanted to follow up briefly on that 
discussion.
    In the given rule, if somebody thinks that there will be an 
adverse affect on jobs, they can submit a comment to that 
effect to the agency, and the agency is required by the caselaw 
to respond.
    So that is taken care of.
    You also have rules where it is entirely speculative, what 
the effect on jobs will be, because it isn't economic 
regulation at all. And yet this bill would require them, and 
everybody else in the government that is promulgating a rule, 
to address this issue that may have very little relevance, and 
about which there is very little information. But they have to 
go out and research the information before they adopt the rule.
    And I think that is wasteful because the system itself is 
self-correcting, where there is a controversy about jobs, it 
can be brought forward in the regular process.
    Mr. Bachus. I can tell you that with breathalyzers and with 
the cement industry, their way of addressing it was delaying 
it. But even during the delay, companies are having to make 
economic decisions on whether they want to modernize a plant or 
shut it down and locate that production overseas, or use a 
source overseas. And even a delay costs jobs.
    Or in the case of the breathalyzers, people are paying more 
money every day. And most of them, if they are not poor, they 
are not healthy, and that is going to lead, as we all know, to 
at least a financial problem.
    Mr. Collins?
    Mr. Collins, the gentleman from Georgia, is recognized for 
5 minutes.
    Mr. Collins. Thank you, Mr. Chairman.
    Mr. Bachus. Or six or 8 minutes.
    Mr. Collins. I think one of the things that we have here, 
and I appreciate the Chairman, yielding, I think we just have a 
differing opinion of what regulations and how they affect on 
what they go by.
    To me, regulations look about like you all sitting at that 
table, overcrowded and not sure which person is doing which, 
and which papers are whose, and that translates out to 
business, who has problems figuring out where they are in this 
process.
    And the other thing I think, Mr. Goldston, you had said 
something just a second ago that struck me. And I think one of 
the things is that we are all concerned about jobs. And I will 
agree with you. Probably the first time you and I are going to 
agree on something today, but we will agree on this concern 
about jobs.
    However, I think the concern that I think your job is, is 
more jobs in government. My concern is more jobs in private 
enterprise for enforcing regulations.
    So I have a few questions for you, and I will follow up on 
Chairman Goodlatte's line of questioning.
    Do you think the current body of regulation is sufficient, 
or do you truly believe that there needs to be new or even more 
regulations put forth by agencies?
    Mr. Goldston. First let me say, I was talking about private 
sector jobs.
    Mr. Collins. The only thing that is growing much right now 
is government jobs in this area.
    Mr. Goldston. I am not sure that is accurate.
    So in terms of your question, I think there are areas that 
need greater regulation. Not every area, but absolutely.
    Mr. Collins. Can you give me an example of an unregulated 
industry right now?
    Mr. Goldston. I think food safety. I think----
    Mr. Collins. That is unregulated?
    Mr. Goldston. Climate and the financial sector. I think 
those are all areas that actually do need further regulation.
    Mr. Collins. So then I will follow up to that question. I 
apologize for interrupting. Those are where you think there 
needs to be new regulations.
    Is there an unregulated industry that is dying to be 
regulated, in your opinion?
    Mr. Goldston. I don't know that there is an entire industry 
that is unregulated that is looking for regulation.
    Mr. Collins. Is there another area you believe that needs 
to be regulated?
    Mr. Goldston. I am sorry, I----
    Mr. Collins. Is there another area that needs to be 
regulated that is not being regulated right now?
    Mr. Goldston. I am not--how is that different from the 
question you asked me earlier?
    Mr. Collins. You said I want to see if there are even more. 
I'm saying you're saying there needs to be more regulations. I 
am asking is there another industry that isn't being regulated 
right now that you think needs to be.
    Mr. Goldston. Off the top my head, I can't think of an 
entire industry that is unregulated now.
    Mr. Collins. Okay. And I appreciate that. Thank you.
    Do you believe that every regulation of the book serves the 
best interest of American families and small businesses?
    Mr. Goldston. I would not take a position on every 
regulation on the books, given the numbers Chairman Goodlatte 
cited. I would say that the regulatory system as a whole has 
repeatedly been shown by both Republican and Democratic 
administrations to have benefits that outweigh the costs 
significantly.
    Mr. Collins. Okay. And again, like you said, we are going 
to disagree on a lot of this.
    Do you believe it should be easier for basically agencies 
and unelected officials in these agencies to put forth 
regulations that financially impact small businesses?
    Mr. Goldston. I think there are some barriers to 
regulations, that there are a set of conditions under Regulate 
Paperwork Act, and so forth, that sometimes unnecessarily slow 
the process. That doesn't mean that there shouldn't be analysis 
of the regulations and that there shouldn't be transparency.
    So again, not suggesting that the system is perfect, but 
there are cases where important regulations get held up for 
many years.
    Mr. Collins. I have one final, and Mr. Rosen, I am coming 
to you, so that we are all effective here.
    The question that I am seeing, especially in my area, and 
we are dealing with water runoff, storm runoff. We dealt with 
this a lot. We are getting to the point where many of the 
regulations are getting to the point where they are just unable 
to actually test for the levels that are prescribed.
    At what point in time do you really just like, especially 
like phosphates and other things we are testing--and I used to 
work in this industry with stack monitoring and other things--
that you really get to the point where you cannot with 
certainty actually test to the levels that are now being 
prescribed. Is there just at a certain point in time, you just 
say this is as good as we get?
    Mr. Goldston. Sure, there is a question all the time about 
how clean is clean. In the case, again, of phosphates and 
things like that, there are actual provable problems with water 
quality that result from water pollution runoff and so forth.
    Again, the issue, though, is does this bill actually in a 
targeted way take care of the kinds of concerns you are talking 
about. Or, and this is sort of implicit in Mr. Smith's 
question, does it just slow down the system so, yes, fewer 
things will get out just because the system now will be so 
clogged up with process that isn't necessarily targeted to any 
of the problems that you were just referencing.
    Mr. Collins. All right, thank you.
    Mr. Rosen, if Regulatory Accountability Act had been in 
place in the late since the late 1960's, early 1970's, when our 
modern regulatory authorities began to take shape, do you think 
the cost to Federal regulation would be anywhere near the 
current estimate of $1.75 billion to $1.8 trillion?
    Mr. Rosen. I think it would be less than it is today.
    Mr. Collins. Okay, explain how it would be less.
    Mr. Rosen. That the Regulatory Accountability Act creates 
mechanisms to ensure better factual accuracy of information 
that is being used in rulemaking, and better analytic 
evaluation of both costs and benefits. Therefore, it would have 
screened out some bad rules that are on the books.
    Mr. Collins. And I want to finish up, Mr. Chairman, and I 
will yield back, there are probably common ground even with Mr. 
Goldston and Mr. Levin, that we can find in this. I think the 
problem that we are getting into is the real concern that, and 
I heard it even in this Committee room on this Committee, 
saying, well, it doesn't have adverse effects on jobs. Well, I 
invite you, and I will pay your ticket to come down to the 
Ninth District, and I will take you to businesses that it does 
affect, that it is real world.
    It isn't in the Beltway. The Beltway isn't real world. This 
is fantasyland. Go back out into the real world where people 
actually produce and do these things. This is where my concern 
is.
    And Mr. Cohen and I can actually agree on something, that I 
agree, finding ways to actually put this in cost and fiscally 
responsible ways to do this.
    When we look at that, then we regain the trust of American 
business in looking at the process of government. They don't 
look at it as intrusive.
    These are the things that I appreciate this bill coming up, 
I appreciate that Chairman bringing forward, and our Chairman 
of the main Committee, Mr. Goodlatte, his input in this, and 
Chairman Bachus as well, and the Ranking Member.
    We have to continue to look at this, because I believe it 
does matter. I believe this is what people are talking about 
around the kitchen tables, about their jobs. I believe this 
isn't the only, but it is one impact that is causing our 
economy to be in trouble right now, among all issues.
    And I appreciate your answers, and I appreciate your being 
here today.
    Mr. Chairman, I yield back.
    Mr. Bachus. Thank you.
    Mr. Rosen. Mr. Chairman, I was just going to observe
    Mr. Bachus. Yes, Mr. Rosen?
    In fact, if we don't mind, we can give each panelist a 
minute just to make comments.
    Would you object to that?
    Mr. Cohen. A minute and 15.
    Mr. Bachus. A minute and 15, you know, minute, minute and a 
half.
    But, Mr. Rosen, you can respond.
    Mr. Rosen. Yes, the comment that I was just trying to 
emphasize is, sometimes people think that this only about 
business. It is certainly business matters and is a key 
underpinning of our economy.
    But regulation affects, as I said at the outset, it affects 
municipalities, it affects hospitals, universities, farmers, 
airports, all kinds of entities, some of which do employ 
people. Most of those do employ people.
    It involves individuals subject to regulations.
    So I reject the suggestion that I sometimes hear that this 
bill is about delay. I don't think this bill needs to produce 
any delay relative to the current system. Most of the delay 
that occurs in the regulatory process occurs for two reasons, 
working out policies within an agency, and absence of good 
information and the need to either do some testing or gather 
some data or statistics or whatever. The part that involves 
complying with the analytic requirements and with the process 
through OIRA and the notice and comment, that is the tail on 
the dog.
    And so the real thing is to get these rules right, and it's 
not just to create delay for business. That is nonsense. It is 
to get the rules right for everybody, for the businesses for 
sure. But as I say, the airports, the municipalities, the 
hospitals, the universities, and the individuals that are the 
American public.
    Mr. Bachus. Thank you.
    And we will start with Mr. Sells, whom Mr. Cohen tells me 
was an All-American swimmer at the University of Tennessee.
    Mr. Sells. Yes, that was a few decades ago. And, believe 
me, a few pounds.
    Thank you, Mr. Chairman, Mr. Cohen. Thank you for the 
opportunity to be here today.
    I think it is extremely important, and I made this comment, 
and Mr. Rosen backed this up, we are looking for common sense 
and common-sense approaches here. We believe in this country, 
as the cement industry, that we actually have the cleanest 
cement plants literally in the world.
    But we have to compete with those who don't comply in that 
arena, don't comply. And if our jobs are shipped overseas, they 
are lost forever. And it isn't just the cement industry. It is 
the steel industry. It is the lumber industry.
    Those are the things that made our country great, 
agriculture, mining, manufacturing, industry. And we believe 
there is appropriate regulations, common sense, that can work.
    As an example, one of the things that was mentioned, 
really, EPA has not weakened what they are asking our industry 
to do. There has been a slight delay, but it is because a lot 
of these things we are asking for were technically not 
achievable. And so the systems and the things that were asked 
for not even being used worldwide, hadn't even come out of the 
lab.
    So thank you for the time, for the opportunity. And once 
again, thank you for your service in the United States 
Congress.
    Mr. Bachus. Thank you.
    Let me comment on the one thing. The standards that we are 
talking about, you look at the EU. Our standards that they are 
proposing are much tighter than the European Union.
    And that obviously calls into question--it ought to send a 
red flag up.
    Mr. Rosen. I think I had my turn, so I will let others 
speak here.
    Mr. Bachus. Let me just comment, I sued the railroads. I 
had a different attitude toward them, when I then started 
representing them. But you saw a different side.
    But I can remember when the Department of Transportation 
FRA director was testifying before us about the whistle rule. 
And he was explaining why they needed it, and my first response 
was, I said, well, you have been in a cabin, the cab of a 
diesel engine. I was going to kind of walk him through what 
goes on. And his response was, no, he never had.
    But he was testifying about what the engineer and the 
conductor in the cab would do and what they saw. But here was 
the person who had never been in a cab.
    And I was just stunned that that was actually, that he 
was--and I asked him did his agency if they had done that, and 
he was not aware that anyone had. And that to me--I mean, it is 
partly a blind spot. I mean, the engineer and the conductor in 
that cab can tell you more about that rule, and the effect of 
it, than anybody else.
    Mr. Hall?
    Mr. Hall. Sure. Let me say, I had a career of conducting 
economic impact studies, and I know a lot about labor markets.
    Of course, regulatory agencies could conduct analysis of 
the employment impact of regulatory changes. And the evidence 
is very strong, in fact, there is unemployment created by 
repertory changes. The literature that people cite show this, 
as a matter fact. There is a great deal of misunderstanding of 
what that literature says, especially by noneconomists.
    For example, the Morgenstern, Pizer, and Shih article, the 
economic impact on industry regulation on the labor market is 
not rocket science. Regulation can raise the cost in an 
industry. That is what Morgenstern, Pizer, and Shih found. It 
raised the cost on an industry. The industry has to spend more 
money to make the output.
    Part of that cost is they have to hire extra people in 
compliance jobs. When the costs go up, prices go up, people buy 
less of the product. When people buy less of the product, they 
produce less and people in production jobs lose their jobs.
    Morgenstern, Pizer, and Shih found that tens of thousands 
of people lost jobs, production jobs in the industries they 
looked at. What they also found was that the number of extra 
people hired to reduce productivity in compliance roughly was 
sometimes as much as the production jobs that were lost. 
Because the two net out doesn't mean production jobs are not 
lost. Those people lost their jobs. They are unemployed. They 
had to pay a huge amount personally from the unemployment to 
find new work, find less important work.
    In addition, this work and other work only focus on the 
regulated industry. One of the most important impacts of 
regulatory change is outside the industry. When you raise 
prices, you raise prices for other industries that consume your 
product. It works like a tax. It is regressive like a tax, by 
the way.
    When you raise prices, it creates higher prices than other 
industries. That has an employment effect, and people lose 
their jobs in those other industries.
    For example, I looked at a 2011 study by the EPA on a 
regulation that was going to raise the price of electricity 
they estimated by 4 percent. By their own research, they found 
that 19 other industries would have reduced output because of 
the higher energy prices.
    I carried their research one step further and for every job 
that would be lost in electrical generation industry, 11 jobs 
will be lost outside the regulated industry because of higher 
prices.
    None of that was taken into account in the Morgenstern, 
Pizer, and Shih. But they did in fact find tens of thousands of 
people lost their jobs in that research. And this other 
research shows the same thing.
    Mr. Bachus. Thank you.
    Dr. Thomas?
    Ms. Thomas. There are unintended consequences of regulation 
that go beyond the employment effects that have been discussed 
here today. There are real effects on low-income households. 
And the fact that there are other kinds of regressive effects, 
as Mr. Goldston points out, just reemphasizes the need for 
agencies to actually look at the effects of regulations on low-
income households in all of their decisionmaking processes.
    The consequences of many rules that apply to all of us that 
address specifically low risks or low-probability risks are 
harmful to the weakest members of our society, and we should 
all be concerned with those or about those.
    We need to focus on the outcome of regulation, not just on 
intentions. Agencies should consider their regressive effects.
    Mr. Bachus. Mr. Goldston?
    Mr. Goldston. Thank you, Mr. Chairman.
    And thank you for taking my testimony, despite coming from 
a Northeastern school.
    I did go to Huntsville, Alabama, a couple times when I was 
overseeing NASA.
    Mr. Bachus. Well, Cornell is a very good school.
    Mr. Goldston. A couple things. Let me start with some 
general points. Let me start actually, as Dr. Hall rightly, of 
course, said, these studies don't find that there are no job 
losses. They are looking at macro losses across the industry. 
And again, as you said, at the polluting industries.
    I think, if I remember correctly, the Morgenstern study, 
part of the rationale is not just additional hiring because of 
regulation, but that regulatory costs actually are very small 
percentage, especially manufacturing often, of overall costs to 
the industry.
    The main point I would like to make a closing is that even 
if one shares your view, and the views expressed by others here 
in terms of skepticism about regulation, I think there is still 
reason to have deep concerns about this bill, because, again, 
it overrides other laws. It doesn't treat OIRA the way it 
treats other entities. It creates additional burdens that when 
they are imposed on everybody, on all agencies at once, such as 
the way the least-cost rule actually works, and the regulatory 
hearings, is not a targeted approach to take care of the kind 
of problems that have been mentioned here, but rather are a way 
to just kind of gum up the works. And they are ways that, when 
they have been tried in the past, have been shown only to have 
that effect.
    So I don't think the issue here is whether there is 
anything that can be changed with the regulatory system, but 
whether this bill would make the system better or worse for the 
public at large. And our view is that, overall, this bill, 
regardless of what you think about the overall state of the 
regulatory system, would be damaging to the public at large 
because of the way in which it is not targeted and overreaches.
    And I guess I would just add that, in my years on the 
Republican staff of the House, we were often confronted with 
this, where efforts to reform basically overreached and instead 
of actually trying to come up with targeted solutions, 
basically tried to shut down the system. And that actually put 
us in a position often where we just had to say no, rather than 
actually having a discussion of reform, because there was so 
much overreaching in the approach that was taken.
    And I think with this bill, even more with the REINS Act, 
that is the case here, that it is not a targeted solution, even 
if one accepts everything that has been claimed about the 
failings of the regulatory system.
    Thank you.
    Mr. Bachus. Professor Levin?
    Mr. Levin. My sentiments are similar to those of Mr. 
Goldston, so I will just try to be brief.
    We have heard a lot today about regulatory policy disputes, 
and I see those largely as questions to be worked out in the 
political sphere.
    But I think that this act is not the right vehicle for 
having that debate. I think it is a misdirected approach to 
complicate the legislative process.
    Mr. Rosen has made the case to you that there is no real 
threat of delay here. But I think the concerns about delay are 
very widespread in the administrative law community. I think he 
has a minority view, but the American Bar Association and the 
Administrative Conference have passed resolutions stating their 
view that the rulemaking process is already too complicated.
    Scholars have looked at the Regulatory Accountability Act, 
and scores of them have signed letters of opposition. I know of 
none whatever in the legal-academic sphere who have endorsed 
the bill.
    I was here a few months ago, testifying about the REINS 
Act, and there is a scholarly dispute about it. There is really 
argument on both sides among the academic community on that 
point.
    But I think this bill has brought together scholars with 
regard to the Regulatory Accountability Act, because I have 
talked about it in various forums and can't find any other 
legal academic who endorses the bill.
    So I think that the issue of jobs has been before you 
today. I think it is important for Congress to keep its eye on 
the ball in that regard. But I think this law is not the right 
vehicle for that.
    And I think you should redirect your attention to matters 
that would speak more directly to the actual issue involved 
that would avoid crippling side effects and that have a good 
chance of passage. I don't think this bill meets any of those 
criteria.
    I do thank you for the opportunity to testify, and I hope 
you will find it useful.
    Thank you.
    Mr. Bachus. I thank you.
    And this will conclude our hearing.
    But before I do, at this time, customarily, we introduce, 
for the record, different letters of either support or 
opposition. And of those letters, I would like unanimous 
consent to introduce several letters.
    Actually, Mr. Levin, one of these letters is the June 6, 
2011, letter to the Judiciary Committee in support of this 
legislation, and I was looking at over three pages of people 
that signed this letter, associations, and you are correct in 
that I don't see the Bar Association on this list or any legal 
society listed in over three pages.
    But what I do find is almost every other association that 
employs people in the United States is on this list. I mean, if 
you name one, it is on here. Medical, dental, repair shops, 
aeronautical, architects, bakers, boatbuilders, coatings, 
composites, concrete, engineering industry, feed industry, 
forest industry, foundry industry, you can just go on and on.
    I don't know of one that is not on this list.
    So there is a divide between----
    Mr. Goldston. Mr. Chairman, if I could just say, that is 
not particularly surprising. I think everybody pro and con 
agrees that this bill would hold up regulation.
    And industry understandably would prefer to be unregulated. 
Our argument is that----
    Mr. Bachus. They all are regulated.
    Mr. Goldston [continuing]. Good and bad. Less regulated.
    Mr. Bachus. Yes, they are pretty heavily regulated.
    Mr. Goldston. Fair point. Less regulated.
    Mr. Bachus. It closes with the window industry. Windows are 
pretty important.
    But anyway, I would like to introduce this, along with 
several other, credit unions, and several others. I would like 
to thank the NFIB for their statement and the Chamber of 
Commerce representing small business and other business.
    So, without objection, I would like to introduce these in 
the record.
    Mr. Cohen. I won't object if you will give me extra time to 
round up the usual suspects and put in letters against.
    Mr. Bachus. Sure You might actually want to read this list.
    Even the flower industry. Flowers and flour.
    Mr. Cohen. No objection.
    [The information referred to follows:]
    
    
    
    


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                               __________
    Mr. Bachus. This concludes today's hearing.
    Thanks to all of our witnesses for attending, and this is a 
strikingly good panel. All Members I think have brought some 
tremendous points before us, and I thought it was well-
balanced.
    Without objection, all Members will have 5 legislative days 
to submit additional written questions to the witnesses or 
additional materials for the record.
    This hearing is adjourned.
    [Whereupon, at 12:12 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 Prepared Statement of the Honorable Steve Cohen, a Representative in 
Congress from the State of Tennessee, and Ranking Member, Subcommittee 
           on Regulatory Reform, Commercial and Antitrust Law
    As Judiciary Committee Chairman Bob Goodlatte rightly pointed out 
just a few weeks ago during our markup of the FARRM Act, the 
Administrative Procedure Act is an ``administrative Constitution'' that 
attempts to strike a balance between the need for due process and 
fairness, on the one hand, and the need for agencies to be able 
effectively to carry out their policymaking responsibilities, on the 
other.
    As with the Constitution itself, we must approach proposals that 
would make dramatic changes to the APA with caution, if not some 
considerable skepticism.
    The proponents of H.R. 2122, the ``Regulatory Accountability Act of 
2013,'' have a high burden to meet in that regard.
    Based on what I heard last Congress in our consideration of an 
almost identical bill and in the many regulatory debates we have held 
since then, the bill's proponents have not met that burden.
    As an initial matter, whatever the merits of any of the individual 
proposals contained in H.R. 2122, I am concerned that the cumulative 
weight of all of the bill's changes to the APA would simply serve to 
stifle agency rulemaking, threatening to hamper the promulgation of 
important public health and safety rules.
    As I said at last week's hearing on another bill, regulations are 
critical to protecting the American people from a vast array of harms, 
including dirty air and water, dangerous toys, reckless financial 
behavior, and unsafe workplaces.
    This is not an abstract notion. On the question of workplace 
safety, for instance, the Bureau of Labor Statistics reports in its 
2011 Census of Fatal Occupational Injuries that there were 4,693 
workplace deaths in 2011.
    According to researchers from the National Institute for 
Occupational Safety and Health, the American Cancer Society, and Emory 
University's School of Public Health, there are an estimated 50,000 to 
70,000 deaths from occupation-related diseases in the United States 
annually.
    In addition concern about the cumulative weight of H.R. 2122, 
several provisions in particular raise concern. First, H.R. 2122's 
expanded use of formal rulemaking procedures for ``high-impact'' rules 
strikes me as an unnecessary procedural expansion that would not serve 
to improve the quality of rulemaking while at the same time adding 
major costs to the process and would effectively grind agency 
rulemaking to a halt.
    Formal rulemaking fell out of favor more than a generation ago as 
its costs became more evident. A consensus developed that the notice-
and-comment rulemaking procedures of Section 553 of the APA--which 
themselves are fairly heavily proceduralized, especially when combined 
with non-APA analytical requirements--struck a better balance between 
assuring a fair and accurate rulemaking process while maintaining 
agency effectiveness.
    H.R. 2122's proponents offer no study or other data indicating that 
the use of cross-examination and other facets of the formal rulemaking 
process are the more effective tools for making scientific and policy 
judgments than the current process.
    If anything, history suggests the opposite. In an infamous example, 
one formal rulemaking proceeding before the Food and Drug 
Administration took more than 10 years to determine whether the FDA 
should require that peanut butter contain at least 90% peanuts as 
opposed to 87% peanuts. A government witness was examined and cross-
examined for an entire day about a survey of cookbook and patented 
peanut butter formulas, missing recipes, and his personal preferences 
in peanut butter.
    While I make no judgments about how many peanuts should be in 
peanut butter, I do think that government could better spend its 
resources than devoting 10 years to decide that question. We ought to 
be wary of returning to those days.
    Another concern with H.R. 2122 is its codification of overly 
burdensome cost-benefit analysis requirements.
    I recognize that every president since Ronald Reagan has required 
that executive agencies conduct cost-benefit analyses, and that support 
for such requirements has been bipartisan.
    Nonetheless, the particular agency determinations required under 
H.R. 2122, and the requirement that all of these determinations be made 
for all rules, would cause unnecessary delay and cost tremendous 
taxpayer resources.
    I do not see the net benefit in expanding cost-benefit analysis 
requirements to non-major rules or to guidance documents, which do not 
have the force of law.
    Moreover, we should be wary of overruling existing statutory 
provisions that prohibit agencies from considering costs when 
fashioning a rule. These provisions, like those in the Clean Air Act 
and the Occupational Health and Safety Act, represent carefully 
considered legislative judgments made by our predecessors.
    Perhaps we should have a cost-benefit analysis done of H.R. 2122.
    There are numerous other concerns that I will not delve into in 
these brief remarks, including the bill's provision establishing 
expanded and less deferential judicial review, under which judges could 
second-guess agencies' cost-benefit analyses and substitute their 
policy judgements for those of agency experts.
    This bill does little to improve rulemaking and will only serve to 
stymie agencies from ensuring that the health, safety, and welfare of 
the American people are protected. I urge my colleagues to join me in 
opposition to this bill.



                                

         Supplemental Statement of Robert A. Sells, President, 
              Titan America Mid-Atlantic Business Division


















                                

     Supplemental Material submitted by Jeffrey A. Rosen, Partner, 
                          Kirkland & Ellis LLP






















































































                                

    Supplemental Material submitted by Ronald M. Levin, William R. 
Orthwein, Distinguished Professor of Law, Washington University in St. 
                                 Louis






































































































                                

                  Material submitted by C. Boyden Gray




























































                                

            Statement of Administration Policy on H.R. 3010




                                

                   Letter of Opposition to H.R. 3010
















                                

       Response to Questions for the Record from David Goldston, 
   Director of Government Affairs, Natural Resources Defense Council














                                

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













                                 
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