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

                                 HEARING ON THE
                    ``SEARCHING FOR AND CUTTING REGULATIONS
                       THAT ARE UNNECESSARILY BURDENSOME
                             (SCRUB) ACT OF 2014''

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                               REGULATORY REFORM,
                          COMMERCIAL AND ANTITRUST LAW

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               FEBRUARY 11, 2014

                                   __________

                               Serial No. 113-69

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          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                   ZOE LOFGREN, California
    SPENCER BACHUS, Alabama              SHEILA JACKSON LEE, Texas
    DARRELL E. ISSA, California          STEVE COHEN, Tennessee
    J. RANDY FORBES, Virginia            HENRY C. ``HANK'' JOHNSON, Jr.,
    STEVE KING, Iowa                       Georgia
    TRENT FRANKS, Arizona                PEDRO R. PIERLUISI, Puerto Rico
    LOUIE GOHMERT, Texas                 JUDY CHU, California
    JIM JORDAN, Ohio                     TED DEUTCH, Florida
    TED POE, Texas                       LUIS V. GUTIERREZ, Illinois
    JASON CHAFFETZ, Utah                 KAREN BASS, California
    TOM MARINO, Pennsylvania             CEDRIC RICHMOND, Louisiana
    TREY GOWDY, South Carolina           SUZAN DelBENE, Washington
    RAUL LABRADOR, Idaho                 JOE GARCIA, Florida
    BLAKE FARENTHOLD, Texas              HAKEEM JEFFRIES, New York
    GEORGE HOLDING, North Carolina       DAVID N. CICILLINE, Rhode Island
    DOUG COLLINS, Georgia
    RON DeSANTIS, Florida
    JASON T. SMITH, Missouri
    [Vacant]

               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          HENRY C. ``HANK'' JOHNSON, Jr.,
    TOM MARINO, Pennsylvania               Georgia
    GEORGE HOLDING, North Carolina       SUZAN DelBENE, Washington
    DOUG COLLINS, Georgia                JOE GARCIA, Florida
    JASON T. SMITH, Missouri             HAKEEM JEFFRIES, New York
                                         DAVID N. CICILLINE, Rhode Island

                          Daniel Flores, Chief Counsel
                          James Park, Minority Counsel

                                C O N T E N T S

                                  ----------

                               FEBRUARY 11, 2014

                                                                       Page

                               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 Henry C. ``Hank'' Johnson, Jr., a Representative in
      Congress from the State of Georgia, and Ranking Member,
      Subcommittee on Regulatory Reform, Commercial and Antitrust Law    39

    The Honorable Jason Smith, a Representative in Congress from the
      State of Missouri, and Member, Subcommittee on Regulatory
      Reform, Commercial and Antitrust Law...........................    40

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

                                   WITNESSES

    Patrick McLaughlin, Ph.D., Senior Research Fellow, Mercatus
      Center, George Mason University
      Oral Testimony.................................................    61
      Prepared Statement.............................................    64

    Sam Batkins, Director of Regulatory Policy, American Action Forum
      Oral Testimony.................................................    78
      Prepared Statement.............................................    80

    Ronald M. Levin, Professor, William R. Orthwein Distinguished
      Professor of Law, Washington University School of Law
      Oral Testimony.................................................    89
      Prepared Statement.............................................    91

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Discussion Draft of H.R. ___, the ``Searching for and Cutting
      Regulations that are Unnecessarily Burdensome (SCRUB) Act of
      2014''.........................................................     3

    Material submitted by the Honorable John Conyers, Jr., a
      Representative in Congress from the State of Michigan, and
      Ranking Member, Committee on the Judiciary.....................    43

    Prepared Statement of the Honorable John Conyers, Jr., a
      Representative in Congress from the State of Michigan, and
      Ranking Member, Committee on the Judiciary.....................    58

    Material submitted by the Honorable Henry C. ``Hank'' Johnson,
      Jr., a Representative in Congress from the State of Georgia,
      and Ranking Member, Subcommittee on Regulatory Reform,
      Commercial and Antitrust Law...................................   118

                                    APPENDIX
                   Material Submitted for the Hearing Record

    Prepared Statement of the Honorable Bob Goodlatte, a
      Representative in Congress from the State of Virginia, and
      Chairman, Committee on the Judiciary...........................   123

    Response to Questions for the Record from Patrick McLaughlin,
      Ph.D., Senior Research Fellow, Mercatus Center, George Mason
      University.....................................................   125

    Response to Questions for the Record from Sam Batkins, Director
      of Regulatory Policy, American Action Forum....................   133

    Response to Questions for the Record from Ronald M. Levin,
      Professor, William R. Orthwein Distinguished Professor of Law,
      Washington University School of Law............................   138

                                 HEARING ON THE
                          ``SEARCHING FOR AND CUTTING
                       REGULATIONS THAT ARE UNNECESSARILY
                        BURDENSOME (SCRUB) ACT OF 2014''

                                  ----------

                           TUESDAY, FEBRUARY 11, 2014

                           House of Representatives,

                      Subcommittee on Regulatory Reform,
                          Commercial and Antitrust Law

                          Committee on the Judiciary,

                                Washington, DC.

        The Subcommittee met, pursuant to call, at 1:03 p.m., in
    room 2141, Rayburn Office Building, the Honorable Spencer
    Bachus (Chairman of the Subcommittee) presiding.
        Present: Representatives Bachus, Goodlatte, Farenthold,
    Issa, Marino, Holding, Collins, Smith of Missouri, Johnson,
    Conyers, DelBene, Garcia, Jeffries, and Cicilline.
        Staff present: (Majority) Daniel Flores, Subcommittee Chief
    Counsel; Ashley Lewis, Clerk; Justin Sok, Legislative Assistant
    for Rep. Smith of Missouri; Philip Swartzfager, Legislative
    Director for Rep. Bachus; Jonathan Nabavi, Legislative Director
    for Rep. Holding; Mike Geiselhart, Intern; (Minority) Perry
    Apelbaum, Staff Director & Chief Counsel; Susan Jensen,
    Counsel; Slade Bond, Counsel for Rep. Johnson; and Rosalind
    Jackson, Professional Staff Member.
        Mr. Bachus. The Subcommittee on Regulatory Reform,
    Commercial and Antitrust Law hearing will come to order.
        Without objection, the Chair is authorized to declare
    recesses of the Committee at any time.
        Our Subcommittee hearing today is being held to examine old
    and outdated Federal regulations that are a barrier to the new
    job creation that we so badly need in our country. Let me
    commend Congressman Jason Smith from Missouri for the work he
    has been doing on this issue and for legislation he will soon
    be introducing, The Searching for and Cutting Regulations that
    are Unnecessarily Burdensome Act of 2014, for short, the SCRUB
    Act.
        This Subcommittee has heard testimony which has made a
    compelling case that Federal agencies do not properly account
    for input from small businesses and too often ignore the cost
    associated with new regulations.
        Today we consider an even larger problem. What happens to
    all those regulations passed long ago that no longer serve a
    useful purpose or no longer provide a benefit? Ronald Reagan
    once said nothing lasts longer than a temporary Federal
    program. He could have added Federal regulations to that.
    Nothing lasts longer than Federal regulations.
        No one who has studied the regulatory structure in this
    country would dispute that there are a lot of outdated Federal
    regulations on the book that no longer pass a cost-benefit test
    and in some cases no longer make sense. Employers spend time,
    money, and resources complying with antiquated regulations that
    could be better spent on hiring more workers or reinvesting in
    their enterprises.
        The total Federal regulatory burden has reached $1.75
    trillion to $1.8 trillion by some estimates. If we remove just
    part of this burden, we would see immediate economic growth.
        The SCRUB Act establishes a systematic process for doing
    this. It would set up a BRAC-style commission to identify
    regulations that have been rendered obsolete by technology and
    the markets, that have achieved their goals, or that are
    duplicative or conflict with other Federal regulations. The
    commission's recommendations to eliminate those unnecessary
    regulations would have to be implemented by agencies unless
    disapproved by a joint resolution of Congress.
        There is a role for Federal regulations that provides
    reasonable and clear rules of the road for businesses that
    provide benefits to the public that are greater than the costs.
    But we should acknowledge the unneeded burden that redundant
    and obsolete regulations place on job creation and our economy.
        Accordingly, I look forward to today's testimony.
        At this time, I will recognize our new Ranking Member, Hank
    Johnson of Georgia, for his opening statement. We would like to
    say welcome as the new Subcommittee Chair to your position. So
    you are recognized for your opening statement, Mr. Johnson.
        [Discussion Draft of H.R. ___, the ``Searching for and
    Cutting Regulations that are Unnecessarily Burdensome (SCRUB)
    Act of 2014''3 follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                   __________

        Mr. Johnson. Thank you, Mr. Chairman.
        I am a little hesitant today because I have been informed
    that earlier this morning a gentleman was sitting in this
    chair, and the gentleman was operating this microphone and in
    doing so, he sustained a shock. And so I am deeply concerned
    that I may not survive this hearing.
        Mr. Bachus. We have learned since then that he rests in
    peace. [Laughter.]
        Mr. Johnson. Well, I am hopeful that you all are praying
    for my salvation.
        But I am pleased to now serve as the Ranking Member on the
    Subcommittee on Regulatory Reform, Commercial and Antitrust
    Law. As the former Chairman of the Antitrust Subcommittee, I
    know that it has a particularly exciting range of issues, many
    of which should provide a pathway to work cooperatively across
    the aisle. That is why I am particularly disappointed with the
    process and substance of today's hearing, which is my first as
    Ranking Member.
        Regarding process, although today's hearing is intended to
    be a legislative hearing, we did not receive a copy of the
    draft legislation until Friday afternoon and did not receive a
    final version of the bill until yesterday evening. This is
    obviously problematic. It not only affects our ability to
    adequately prepare for the hearing, but also the ability of our
    witnesses to carefully analyze the legislation and draft their
    testimony under severe time constraints.
        As to substance, it had been my hope that the subject
    matter of this hearing would have better linked itself to a
    more collaborative effort. I think all would agree that
    retrospective review is a good idea. There is no doubt that
    out-of-date, redundant, and conflicting rules should be
    eliminated. In fact, President Obama, in recognition of the
    value of retrospective review, issued a series of executive
    orders requiring agencies to effectuate review plans, a process
    that is now in effect. This process is in addition to the self-
    initiated reviews that many agencies conduct, as well as the
    reviews conducted pursuant to the Regulatory Flexibility Act.
        Unfortunately, the so-called SCRUB Act, which is the
    subject of today's hearing, appears to be a one-way ratchet
    with the sole aim of prioritizing costs over benefits. The
    measure fails to give agencies the necessary resources and
    guidance so that they will do an even better job of conducting
    retrospective review.
        Even more problematic is the fact that the SCRUB Act may
    very well be plainly unconstitutional. As Professor Levin
    explains in his prepared testimony, the commission, as
    established by this legislation, is given comprehensive
    authority to take actions that would have the force of law even
    though its members are not presidential appointees subject to
    Senate confirmation. I do not believe Professor Levin has
    reached this conclusion without careful reflection, and I
    encourage him to focus upon that issue in his oral testimony.
        Compounding the problem is the fact that the bill uses
    undefined terms that are inherently subjective in nature, such
    as, ``excessive compliance cost,'' and ``excessively
    burdensome.'' Clearly ``excessive'' can be a matter of opinion
    depending on which perspective one views the issue, such as
    regulations that save lives but impose certain compliance
    costs. As a result of these and other serious flaws with this
    legislation, it is clear that the SCRUB Act is yet another
    shortsighted anti-regulatory measure that has no hope of
    becoming law.
        But I do have hope that I will survive this hearing, and I
    hope that during this time that Chairman Bachus and I are
    working together on this Subcommittee, that we will be able to
    find common ground on process and substance. As we begin this
    new session of Congress, I very much look forward to working
    with you, Mr. Chairman.
        And I yield back.
        Mr. Bachus. Thank you.
        Mr. Johnson, we did have a very good meeting earlier today,
    and I think we mutually pledged to try to work cooperatively
    together and try to find consensus on the issues. And I
    appreciate your spirit of cooperation that you have shown in
    the past.
        And I will say to you that this bill, in its preparation,
    did come late, and I think there was some, obviously, limited
    time that you had to review it, and I concede that to you. In
    the future, we will work together to see that that is not the
    norm but that is the exception.
        Mr. Johnson. Would the gentleman yield?
        Mr. Bachus. Yes.
        Mr. Johnson. I might add, Mr. Chairman, that I have such
    great respect and admiration for you. You have been a vocal
    supporter of civil rights, being an initial cosponsor of the
    Voting Rights Amendments Act. This kind of conduct that you
    have exemplified throughout your years in Congress is a
    hallmark of civility. And so I have no doubt that whatever
    happened this past week is something that happened, but we are
    going to proceed on from here. And so I look forward to serving
    with you, and I think everything is going to be okay if I
    survive this hearing.
        Mr. Bachus. Thank you. We will try, make every effort to
    get you through this hearing. And I appreciate your words.
        With that, I would like to recognize the sponsor of this
    legislation, Mr. Jason Smith of Missouri, for an opening
    statement.
        Mr. Smith of Missouri. Mr. Chairman, thank you for holding
    this hearing. Much appreciated.
        As the former Chairman of the Joint Committee on
    Administrative Rules back in the Missouri House, which I served
    just over 8 months ago, I have some experience working to
    reduce the regulatory burden facing families, small business
    owners, and farmers.
        In 2012, while serving in the Missouri House of
    Representatives, I worked to pass House bill 1135, which
    requires that all State rules and regulations be reviewed every
    5 years. Like the bill we are discussing today, House bill 1135
    required that rules be examined under various criteria to
    determine if, among other things, they were effective,
    obsolete, or duplicated.
        The Federal Government could learn a thing or two from what
    we have accomplished in the State of Missouri. It was
    Missouri's over 6,000 State regulations that led me to believe
    that reform was necessary. In the Code of Federal Regulations,
    there are over 174,000 pages of rules and regulations. During
    my short time in Congress, I have been amazed by the broad
    Federal authority agencies have to write numerous new
    regulations. Worse yet, Congress and the American public have
    very little oversight and authority over agencies' rulemaking
    process.
        The Searching for and Cutting Regulations that are
    Unnecessarily Burdensome Act of 2014, or SCRUB Act, creates a
    bipartisan commission to examine Federal rules and regulations
    that merit repeal and amendment to reduce unnecessary cost
    burdens for American citizens. In addition, it requires an
    automatic review on all new rules after 10 years and creates a
    cut-go procedure whereby agencies need to repeal old
    regulations before they can issue new ones absent congressional
    consent.
        I look forward to hearing from the witnesses and other
    Members about ways to really tackle regulation reform and
    invite input on a way to move forward.
        Thank you, Mr. Chairman, for this opportunity today to
    discuss this legislation.
        Mr. Bachus. Thank you, Mr. Smith.
        I would now like to recognize the full Committee Ranking
    Member, Mr. John Conyers of Michigan, for his opening statement
    and also warn you that we are getting shocks from some of these
    mics. [Laughter.]
        Mr. Conyers. Well, thank you very much, Chairman Bachus.
        I am here to participate with a question. Why do we not
    have a bill instead of a discussion draft with these
    distinguished witnesses who are here?
        Mr. Bachus. That is a good question, a valid question. It
    is my understanding that in introducing the bill, there were
    some--as my able counsel advised me, we had already sent the
    witnesses notice when we realized that we were not going to be
    assigned a bill number, but actually the draft before you is
    the bill in its final form. It does not have a number. And I am
    not sure that I can give you an explanation of that, John. I am
    not going to give you an incorrect.
        As I told Mr. Johnson in response to his statement, that is
    an anomaly and we will try not to repeat that in the future.
        Mr. Conyers. Thank you, Mr. Chairman.
        Can you, Mr. Bachus, indicate to me when the bill will be
    dropped and we will be able to compare the discussion draft
    with the actual legislation?
        Mr. Bachus. Yes. My understanding is this is the bill in
    the final form. But, Mr. Smith, could----
        Mr. Conyers. I will yield to Mr. Smith.
        Mr. Smith of Missouri. You know, this appears to be the
    bill in the final form. One of the purposes of a draft
    legislation is I want some true bipartisan regulation reform,
    and this is a way to start. If you all have suggestions on how
    to move this forward to actually do some substantial reform,
    this is the way that we can make the changes.
        Mr. Conyers. Well, when will the bill be introduced?
        Mr. Smith of Missouri. Well, right now, I would say as soon
    as possible, but we have been working on this for some time.
        Mr. Bachus. I would say this. By the time we reconvene,
    after today, our next legislative session, which is about 10 or
    12 days away, assuming that we address our debt ceiling today,
    which I am assuming we will, when we return, we should have the
    bill in final form.
        Mr. Conyers. Thank you very much.
        I would like to ask unanimous consent to introduce two of
    President Obama's--well, actually three executive orders. Yes,
    I have three executive orders outlining steps that Federal
    agencies must take to formulate plans for retrospective review
    of their regulations on an ongoing basis.
        Mr. Bachus. Without objection.
        [The information referred to follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                   __________

        Mr. Conyers. And in compliance with these directives,
    executive agencies and various independent regulatory agencies
    have submitted retrospective review plans. All together, these
    plans have identified numerous ways to reduce redundancy and
    inconsistency among existing regulations.
        As the Coalition for Sensible Safeguards notes, the
    commission would itself be redundant and duplicative in light
    of the President's executive orders. It should be noted that
    this process comes in addition to the ongoing retrospective
    review efforts that agencies have been undertaking even before
    the issuance of these executive orders.
        As the Government Accountability Office reported in 2007,
    agencies routinely conduct these often at their own initiative,
    and to that end, the GAO has made several recommendations to
    improve that process, which would have been a good starting
    place for any analysis.
        Unfortunately, we have a one-sided, unbalanced approach
    that has been alluded to by the Ranking Member from Georgia on
    this Subcommittee, Hank Johnson. As a threshold matter, the
    commission is plainly unconstitutional, as will be explained
    very shortly, because it empowers the commission to take
    actions that would have the force of law in violation of the
    Constitution's Appointment Clause. And I will let him handle
    that from there.
        Virtually all of the bill's objectives have this one-way
    approach. It is a measure designed to result in the repeal or
    amendment of a rule only to eliminate or reduce costs. In
    contrast, the bill does not do anything--very little or
    nothing--to promote actions that would enhance the benefits of
    rules.
        Another point that I might want to make is that the
    commission members, other than the chair, would not be required
    to have any expertise in either administrative law matters or
    the subject matter of the rules that they consider.
    Notwithstanding that fact, the commission would be empowered to
    second guess Congress with respect to the need for certain
    rules, as well as the agencies with respect to the science and
    analysis warranting such rule.
        And the most grievous part of the bill is the so-called
    cut-go offsetting provisions, which comes into play even if
    Congress enacted a joint resolution to disapprove the
    commission's report.
        Now, after all of that, I am amazed that we are here today.
    I can sympathize with the Chairman of this Subcommittee, as
    does the Ranking Member, because he is held in high esteem by
    his colleagues on both sides of the aisle. But this
    legislation; this provisional draft is hardly a way for us to
    start an important hearing like this.
        And I submit the rest of my statement and I yield back the
    balance of my time.
        [The information referred to follows:]
    Prepared Statement of the Honorable John Conyers, Jr., a Representative
     in Congress from the State of Michigan, and Ranking Member, Committee
                                on the Judiciary
        In principle, retrospective review of existing regulations is not a
    bad idea. It is hard to argue against the notion that agencies should
    periodically assess whether the rules they have promulgated are as good
    as they can be or whether they are even necessary in light of changed
    circumstances.
        Nonetheless, there are certain considerations that we must keep in
    mind as we proceed with today's hearing.
        To begin with, President Obama has already taken a series of
    significant steps towards instituting regular retrospective reviews by
    agencies.
        To date, he has issued two Executive Orders outlining steps that
    federal agencies must take to formulate plans for retrospective review
    of their regulations on an ongoing basis.
        And, he has issued a third Executive Order encouraging independent
    regulatory agencies to take similar steps to plan for ongoing
    retrospective reviews of their rules.
        In compliance with these directives, executive agencies and various
    independent regulatory agencies have submitted retrospective review
    plans.
        Altogether, these plans have identified numerous ways to reduce
    redundancy and inconsistency among existing regulations.
        As the Coalition for Sensible Safeguards notes, the Commission
    would itself be redundant and duplicative'' in light of the President's
    executive orders.
        It should be noted that this process comes in addition to the
    ongoing retrospective review efforts that agencies have been
    undertaking even before the issuance of these executive orders.
        As the Government Accountability Office reported in 2007, agencies
    routinely conduct these, often at their own initiative. To that end,
    the GAO made several recommendations to improve that process, which
    would have been a good starting place for any analysis.
        Accordingly, I see no reason for Congress to jump the gun in
    seeking to mandate retrospective review legislatively.
        At the minimum, before Congress considers imposing a legislative
    mandate regarding retrospective review, it should ensure that the
    President's efforts have been thoroughly evaluated and have had a
    chance to fully take root.
        Turning to the so-called SCRUB Act, it has numerous flaws.
        As a threshold matter, the Commission is ``plainly
    unconstitutional,'' as Professor Levin explains in his prepared
    testimony. The legislation empowers the Commission to take actions that
    would have the force of law in violation of the Constitution's
    Appointments Clause.
        Second, the bill unfortunately reflects a one-sided, unbalanced
    approach to retrospective review.
        For example, virtually all of the bill's objectives and mechanisms
    are a ``one-way'' ratchet. The measure is designed to result in the
    repeal or amendment of a rule only to eliminate or reduce costs.
        In contrast, the bill does absolutely nothing to promote actions
    that would enhance the benefits of rules.
        Another problem with the bill is that the Commission members--other
    than the Commission chair--would not be required to have any expertise
    in either administrative law matters or the subject matter of the rules
    that they consider.
        Notwithstanding that fact, the Commission would be empowered to
    second guess Congress with respect to the need for certain rules as
    well as the agencies with respect to the science and analysis
    warranting such rules.
        Worse yet, the bill's so-called ``cut-go'' offsetting provisions
    would come into play even if Congress enacted a joint resolution to
    disapprove the Commission's report.
        Finally, we must acknowledge what the real intent of this
    legislation is.
        This is yet another attempt to hobble the ability of agencies to
    regulate and thereby prevent them from protecting public health and
    safety based on unsubstantiated rhetoric that regulations inhibit
    economic development.
        Just yesterday, our Republican colleague, Bill Shuster, tweeted:
    ``As Americans, we should all feel safe to drink the water that comes
    out of our faucets.''
        Right now, do the citizens of West Virginia and North Carolina feel
    it is safe to drink their water?
        Did the contamination result from too much regulation?
        What balance should be struck between preventing carcinogens from
    appearing in our Nation's water supply and the cost of regulatory
    compliance?
        Do we want an unelected group of Commissioners to second guess the
    legislative priorities of Congress and the scientific expertise of
    agencies when it comes to safe drinking water standards?
        These are just some of the major concerns that I have about this
    legislation.
                                   __________

        Mr. Bachus. I thank you, Mr. Chairman--Mr. Ranking Member,
    who I still call ``Mr. Chairman'' when I served under you.
        We have a very distinguished panel today. I would like to
    introduce the witnesses. Dr. Patrick McLaughlin is Senior
    Research Fellow at the Mercatus Center at George Mason
    University. His research focuses on regulations and the
    regulatory process, with additional interest in environmental
    economics, international trade, industrial organization, and
    transportation economics. His research and opinions are
    regularly published.
        Prior to joining Mercatus, Dr. McLaughlin served as Senior
    Economist at the Federal Railroad Administration in the United
    States Department of the Transportation. As a former railroad
    attorney in Congress, you know, railroads is probably my
    favorite subject. I have followed your work there and
    appreciate your work in the field of railroad transportation.
    Very few people understand the railroads, understand the
    tremendous economic benefit they bring. They really keep our
    economy rolling, and they are one of the least understood modes
    of transportation. I still get questions all the time by people
    saying do the passenger trains and the freight trains run on
    the same line. Normally the answer is yes, but sometimes it is
    no.
        Dr. McLaughlin has published in the fields of law and
    economics, public choice, environmental economics, and
    international trade. He holds a Ph.D. in economics from Clemson
    University. So thank you.
        Mr. Sam Batkins is Director of Regulatory Policy at the
    American Action Forum. Mr. Batkins' research focuses on the
    rulemaking efforts of administrative agencies and the related
    efforts of Congress. His work has appeared in the ``Wall Street
    Journal,'' the ``New York Times,'' ``The Hill,'' ``National
    Review Online,'' ``Reuters,'' and the ``Washington Post,''
    among other publications. In fact, you just recently published
    a study that has drawn quite a lot of publicity, and there are
    some rather important findings.
        Prior to joining the Forum, Mr. Batkins worked at the U.S.
    Chamber of Commerce, Institute of Legal Reform, and the
    National Taxpayers Union. At the U.S. Chamber, he focused on
    lawsuit abuse, tort reform, and Federal regulation. At the
    National Taxpayers Union, he focused on State and Federal
    spending.
        Mr. Batkins received his B.A. in political science summa
    cum laude from Sewanee University of the South. He received his
    J.D. from Catholic University of America, Columbus School of
    Law. And we welcome you before our Committee.
        Mr. Ronald Levin, who has testified before our Committee on
    several occasions, is the William R. Orthwein Distinguished
    Professor of Law at Washington University in St. Louis. He is
    co-author of a case book, State and Federal Administrative Law.
        Professor Levin has chaired the section of administrative
    law and regulatory practice of the American Bar Association, a
    group to 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.
        Professor Levin also serves as a public member of the
    Administrative Conference of the United States and the chair of
    its Judicial Review Committee.
        Professor Levin clerked for the Honorable John Godbold of
    the U.S. Court of Appeals for the Fifth Circuit and practiced
    with the Washington, D.C. firm of Sutherland, Asbill and
    Brennan.
        He received his B.A. from Yale and his J.D. from the
    University of Chicago, quite a distinguished academic
    institution.
        And that was with the Fifth Circuit in New Orleans?
        Mr. Levin. It is now, but at the time----
        Mr. Bachus. It was in Atlanta?
        Mr. Levin. So the situation is that the Fifth Circuit was
    broken into two. So at the time of my clerkship, Judge Godbold
    was on the Fifth Circuit. Then after the break, he was on the
    Eleventh Circuit, so he was the only judge who has ever been
    chief judge of two circuits.
        Mr. Bachus. So he is in Atlanta now.
        Mr. Levin. At that time, his chambers were in Montgomery.
    The base was New Orleans.
        Mr. Bachus. Thank you. I knew, obviously, he is a very
    distinguished jurist.
        We will now proceed under the 5-minute rule with questions.
    And I am going to recognize Mr. Smith for 5 minutes, if you are
    ready to proceed. I should have given you some warning.
        Mr. Smith of Missouri. Are they going to testify first?
        Mr. Bachus. That is what Barney Frank used to do all the
    time. Now I am doing it. I guess it must catch. I cannot
    believe I did that.
        Yes. Mr. McLaughlin, if you can begin your testimony. I
    will have to quit following this script.

     TESTIMONY PATRICK McLAUGHLIN, Ph.D., SENIOR RESEARCH FELLOW,
                MERCATUS CENTER, GEORGE MASON UNIVERSITY

        Mr. McLaughlin. Thank you. Chairman Bachus, Ranking Member
    Johnson, and Members of the Committee, thank you for inviting
    me. As an economist and senior research fellow at the Mercatus
    Center at George Mason University, my primary research focuses
    on regulatory accumulation and the regulatory process. So it is
    my pleasure to testify on today's topic.
        The accumulated stock of regulations almost certainly
    contains a multitude of unnecessary burdens. As the title of
    the discussed legislation implies, the current regulatory
    system makes it difficult to identify and eliminate such
    unnecessary burdens.
        Our goal here today should be to ascertain whether the
    SCRUB Act would succeed where previous efforts have failed.
        To that end, first I will discuss why regulatory
    accumulation is a problem, which is primarily that it creates
    substantial drag on economic growth.
        Second, I will discuss the search for obsolete,
    unnecessary, duplicative, or otherwise non-functional
    regulations covering both why similar searches in the past have
    failed and what could be done differently to increase the odds
    of success. In my estimation, an independent commission, as
    opposed to regulatory agencies, is required to successfully
    identify non-functional rules.
        Third, I will address the difficulties of eliminating non-
    functional rules once identified. Here I point to the wisdom of
    the crafters of the BRAC process.
        Finally, I will cover specific recommendations for
    effectively reducing the problem of regulatory accumulation,
    recommendations that are directly relevant to the SCRUB Act.
        By design, regulations restrict choices. These restrictions
    have accumulated for decades, exceeding 1 million by the year
    2010. This accretion of restrictions is what I refer to as
    regulatory accumulation. Regulatory accumulation inhibits
    innovation. And I am not just talking about business ideas that
    would create new products and jobs. Would-be entrepreneurs are
    sometimes prohibited from pursuing ideas that could improve the
    environment and consumers' quality of life. My written
    testimony gives a couple real-world examples of how regulations
    can actually deter environmental stewardship and prevent
    companies from implementing potentially lifesaving
    technologies, which I would be happy to discuss.
        Through lost innovation and entrepreneurship, regulatory
    accumulation negatively affects economic growth. An academic
    study found that between 1949 and 2005, the accumulation of
    Federal regulations has slowed economic growth by an average of
    2 percent per year. Over a 57-year period, that adds up to
    about $277,000 in lost annual income per household.
        So how can we fix the regulatory accumulation problem? The
    solution boils down to two elements. First, we must identify
    non-functional rules. Second, once identified, non-functional
    rules should be eliminated or modified. In my written
    testimony, I have identified 11 elements that my research with
    my colleague, Richard Williams, identifies as characteristics
    of successful regulatory reform. I want to highlight just
    three.
        First, the process should entail independent assessment of
    regulations. Independence is crucial. Our study documents
    attempts by every Administration since Reagan's to address
    regulatory accumulation. Those attempts share at least two
    characteristics.
        Each of them relied, at least partially, on agencies to
    assess their own stocks of regulations, and each of them failed
    in substantively changing the stock of regulations or the
    ongoing accumulative process. If the reasons for these efforts'
    limited success is the reliance on agency self-assessment, then
    an independent commission could be a better alternative.
        Second, the process should use a standard method of
    assessment, and that method should include a focus on whether
    and how rules lead to the outcomes desired. There is a
    difference between outcomes and outputs. A rule may lead to an
    increase in an output such as increased safety inspections, but
    that does not guarantee that there has been an increase in the
    outcome, safety. The assessment of rules should focus on
    outcomes.
        Third, congressional action, such as a joint resolution of
    disapproval, should be required in order to stop the
    commission's recommendations. I previously mentioned the wisdom
    of the crafters of the BRAC process. Legislation addressing
    regulatory accumulation must overcome similar obstacles as the
    BRAC process did. One of those is the possibility of
    congressional inaction. In order to stop the recommendations
    put forth by the BRAC commission, the BRAC process required
    Congress to pass a joint resolution of disapproval. In other
    words, even if Congress did nothing, the default was
    implementation of the recommendations.
        These are three of the 11 elements that our research has
    identified as essential to success.
        Regulatory accumulation in the U.S., with its adverse
    impact on economic growth, is now a widely recognized problem.
    The problem has not been meaningfully addressed despite the
    efforts of several Administrations. My written testimony covers
    other essential elements that my research indicates are
    necessary, and I have highlighted just three now.
        I would be happy to answer any questions after this is
    finished. Thank you.
        [The prepared statement of Mr. McLaughlin follows:]

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                                   __________

        Mr. Bachus. Thank you. Your opening statement was exactly 5
    minutes.
        Mr. McLaughlin. I had a little bit more.
        Mr. Bachus. I do not think I have ever had a 5-minute
    opening statement right to the second.
        Mr. Batkins? And you do not have to be right at 5 minutes.
        Mr. Batkins. I probably will not replicate that.
        Mr. Bachus. No, no. I am not expecting to see that again
    this year.

                 TESTIMONY OF SAM BATKINS, DIRECTOR OF
                REGULATORY POLICY, AMERICAN ACTION FORUM

        Mr. Batkins. Thank you, Mr. Chairman, Ranking Member
    Johnson, and Members of the Subcommittee. Thank you for the
    opportunity to testify today and examine regulatory reform
    opportunities.
        I would like to start by highlighting the successes and
    struggles of President Obama's current attempt at regulatory
    reform and the potential benefits of codifying retrospective
    review.
        First, when President Obama continued the strong tradition
    of ensuring that regulatory costs justify benefits, he called
    for a periodic review of existing significant regulations.
    President Obama and then-OIRA Administrator Cass Sunstein made
    a very public push to highlight some of the redundant and
    outmoded rules in our regulatory system, including the fabled
    ``Spilled Milk'' regulation. The Administration has release
    plans with hundreds of possible retrospective reviews, but upon
    closer scrutiny, it is clear that many of these measures are
    not regulatory look-backs and they do not streamline, expand,
    or repeal existing regulations.
        For example, the Department of Energy lists 19 rulemakings
    in its latest retrospective report. However, six of these are
    new energy efficiency standards that do not appear to revisit
    existing rules, but instead impose significant new costs.
        Likewise, Health and Human Services included at least nine
    Affordable Care Act regulations in its latest report. These
    measures did not look back at existing regulations or attempt
    to repeal certain regulatory provisions. Instead, they
    implemented the recent health care law.
        There have been successes in regulatory reform. The
    Department of Transportation plans to save the trucking
    industry $1.7 billion annually and cut the agency's paperwork
    budget by 15 percent.
        Likewise, HHS finalized a rule to reduce procedural hurdles
    for hospitals and health care providers, saving approximately
    $900 million annually.
        However, if we examine all retrospective reports and
    compare new rules that impose costs and compliance time to
    rules that actually look back to streamline or eliminate costs,
    the ratio is 3.7 to 1 in favor of higher costs. For paperwork,
    the ratio is 6.7 to 1. In other words, retrospective reports
    contain more new rules with higher costs than regulatory look-
    backs with lower costs.
        Regulatory reform through executive order alone has not
    produced the desired results. During the past 10 years, the
    Nation's cumulative paperwork burden has increased 28 percent,
    or 2.2 billion hours. In the equivalent amount of time, it
    would take 1.1 million new employees working 2,000 hours a year
    to complete these new requirements.
        Codifying retrospective review would submit more than 30
    years of informal review into law. I believe legislation that
    addresses the Nation's cumulative regulatory burden would have
    a variety of benefits.
        The Government Accountability Office, as we have noted
    here, has highlighted duplication in its annual report for the
    past few years. GAO found 17 areas of duplication, including
    veterans employment and renewable energy. We replicated GAO's
    methodology for paperwork requirements and found 990
    duplicative forms and more than 642 million paperwork burden
    hours. The regulatory cut-go provision in the proposed
    legislation would address this duplication by allowing agencies
    to choose from a range of past rules eligible for reform. To
    date, the U.S. has never had a formal system to address
    regulatory duplication, but if the commission is successful, it
    could identify hundreds of past rules in need of reform.
        To some extent, the U.S. is behind the curve on regulatory
    reform. The United Kingdom has a system to remove two
    regulations for every new rule. Closer to home, Indiana has
    codified retrospective review for regulations 3 years after
    implementation. The proposed legislation actually provides
    agencies with some deal of flexibility compared to the British
    one-in/two-out system.
        Perhaps most importantly, the proposed bill would extend
    some level of OIRA review to independent agencies, the same
    regulatory bodies that govern our telecommunications and
    financial system. During the past 2 years, financial regulators
    have produced more than 113 regulations with quantifiable
    burdens with little executive oversight. As the Administrative
    Conference of the United States has noted, it is past time for
    heightened regulatory scrutiny of independent agencies.
        In conclusion, I would like to emphasize that retrospective
    review dates back to the Carter administration and is by no
    means a radical step. It is simply implementing best practices.
        Thank you for your time, and I look forward to answering
    questions.
        [The prepared statement of Mr. Batkins follows:]

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

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

        Mr. Levin. Yes, Mr. Chairman. I apologize for arriving a
    few moments late.
        Mr. Bachus. You actually arrived fine.
        Mr. Levin. Okay, that is good.
        Chairman Bachus, Ranking Member Johnson, and Members of the
    Subcommittee, thank you for inviting me to testify on
    retrospective review today. I did testify on general principles
    in this area in 2012 before you. It is a privilege to return to
    the subject in the context of a specific bill.
        As we all know, the regulatory system already has a number
    of methods of inducing agencies to do more look-back review,
    and they include some statutes, presidential initiatives like
    the one President Obama pursued, congressional oversight, and
    the ability of anyone to file a petition for revision or repeal
    of a regulation and get an answer from the agency and
    potentially get judicial review.
        The question is whether we need to supplement these systems
    with a new mechanism.
        I think the case for doing that has been overstated. We
    should not equate the growth of regulations with the growth of
    unnecessary regulations. Many of them are directly contemplated
    by legislation and confer enormous benefits on society, such as
    safe skies, clean air, safe workplaces, and a sound banking
    system. It is often the absence of regulations that causes harm
    to our economy and society.
        But we can agree that some rules are obsolete and
    ineffective or cause unwanted side effects, and I would not
    rule out the possibility that some new structure could be
    helpful. But the one contemplated by the SCRUB Act is not it,
    in my judgment.
        In the first place, the commission that it would establish
    does not comply with the Appointments Clause of the
    Constitution. Most of its members would be appointed by House
    and Senate leaders of the majority and minority parties. A
    group like that can recommend, but it cannot itself exercise
    significant authority under the laws of the United States. The
    Supreme Court established this in Buckley against Valeo in
    1976. I know Representative Johnson asked me to elaborate, but
    really, the law is clear and simple, and unfortunately, this
    bill is on the wrong side of it.
        But let us assume that you fix that defect and look at the
    bill's policy implications. The commission would still not be a
    credible authority because most of its members would not need
    to be experts in anything, and they could not possibly be
    experts in all the areas that they would have power to affect
    and that power would be breathtaking. They could order the
    elimination or amendment of any rule of any agency that they
    consider unnecessarily burdensome, and they could use any
    methodology they want. Even soothsayers or astrological charts
    would do under the bill. And nobody could prevent their
    decisions from going into effect, not the courts presumably,
    not the agency. OIRA and the White House would have no review.
    And even if Congress passes a disapproval resolution with the
    House, the Senate agreeing, with the President signing, the
    commission's decisions would still be merely postponed, not
    canceled. And if all that is not far-fetched enough, a minority
    of the commission, outvoted, could wield these same powers. In
    Justice Cardozo's phrase, this is delegation run riot.
        Then the bill provides for a cut-go process in which an
    agency cannot adopt a new rule without offsetting its cost with
    a rule from the commission's list. The biggest problem with
    that is that the commission's list itself would not be
    reliable, but also this process would complicate the process of
    rulemaking no matter how important or urgent the rule may be.
        And finally, the bill provides that every new rule, no
    matter how trivial, would have to be accompanied by a plan to
    reexamine it a decade hence. That is way overbroad for most
    rules. And even for important ones, it is premature to make a
    plan in 2014 for how you are going to reexamine it in 2024 when
    you cannot foresee what the situation a decade from now would
    be.
        So I really think that the Subcommittee needs to take a
    pause in this area. The best thing it could do would be to wait
    for the forthcoming recommendations of the Administrative
    Conference, which is now launching a study, of retrospective
    review, to be finished by the end of the year. See what
    proposals they make. But if the Subcommittee does decide to go
    forward with this bill, the bill will need a thorough and
    fundamental scrubbing.
        That concludes my statement, and I will be happy to take
    your questions.
        [The prepared statement of Mr. Levin follows:]

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                                   __________

        Mr. Bachus. Thank you, Professor.
        I will recognize myself for 5 minutes for questions.
        The Ranking Member talked about the Administration's
    efforts to identify regulations that could be either eliminated
    or amended. I will ask each of you. How does the SCRUB Act
    compare to other executive branch and legislative proposals
    that have been brought forth in the past? I will start with
    you, Dr. McLaughlin.
        Mr. McLaughlin. I think the most fundamental difference is
    putting the responsibility for retrospective review in the
    hands of an independent commission as opposed to leaving it in
    the hands of the agencies who created the rules in the first
    place. And it is my opinion that that will improve the quality
    of assessment. To make a simplistic analogy here, I am a
    professor as well as a researcher, and if I let my students
    grade their own tests, I would expect on average their scores
    to be a lot higher than if an independent arbiter were to grade
    them and give an objective analysis.
        Mr. Bachus. Mr. Batkins?
        Mr. Batkins. I would agree with Mr. McLaughlin that there
    is, I think, a need for an independent look at retrospective
    review. And if you just look at all the data that we have
    compiled under Executive Order 13563, there are a few
    provisions that streamline, modify, reduce hours and costs, but
    on net, a majority of the provisions are actually new
    regulations that they are including in these retrospective
    reports. It is tough to tell the difference between a regular
    unified agenda of Federal regulations and a lot of these
    retrospective reports. Several agencies that were reviewed did
    not have a single measure that we found to actually look back
    at existing regulations. So I would agree that an outside voice
    is probably welcome.
        Mr. Bachus. Could you give me some specifics on those
    agencies that you are talking about?
        Mr. Batkins. Well, sir, I mentioned Health and Human
    Services. We counted, judging from the REN's from their report,
    there were at least nine Affordable Care Act regulations that
    they plan to implement. And for example, the Department of
    Energy had several new efficiency standards for transformers,
    for metal halide lamp fixtures. And a lot of agencies will
    include basically a boilerplate that this rule was designed to
    minimize burdens consistent with Executive Order 13563, and
    that may be fine but you could have used the same minimize
    burdens/maximize net benefits under Executive Order 12866 or
    Executive Order 12044. So it was not necessarily a regulatory
    look-back as it was implementing a new rule and putting it in
    your retrospective report.
        Mr. Bachus. Professor Levin?
        Mr. Levin. Well, I agree with Mr. McLaughlin that the
    biggest difference is that the SCRUB Act would put an
    independent body into control rather than the agency. But I
    think that is a vice and not a virtue.
        I think the better comparison would be if he asked me to
    grade his exams in his course when he is the one who runs the
    course, organizes it, and I am a complete outsider.
        The problem is that the agency has always been rightly
    considered to be the best entity to evaluate the rules. They
    have the expertise. That is why Congress created it in the
    first place, to bring specialized experience to bear. They are
    the ones who understand the overall program and all the
    interconnections among the different parts of the program. And
    they are the ones who are politically accountable in the way
    that a commission would not be. So we agree on the difference,
    but we do not agree as to its merit.
        Mr. Bachus. Are agencies really politically accountable for
    their actions?
        Mr. Levin. For sure. The executive agencies are accountable
    to the President. All agencies are accountable to Congress.
    They are accountable at the initiation stage. Congress can
    change their laws. They have oversight hearings, as you well
    know, and they are part of an Administration that usually is
    very cognizant of public opinion.
        Mr. Bachus. Out of all the regulations that have been
    passed over the years, there has been one that has been
    repealed by Congress. Of course, you could look at that two
    different ways. One is that they have all been appropriate and
    another that Congress simply has lacked that because I think it
    is fair to say that there were probably in the universe of tens
    of thousands of regulations, there had to be hundreds, if not
    thousands, that were probably not well thought out.
        Mr. Levin. But it is not just the congressional review act
    that you should take into account. Authorizing legislation will
    sometimes have that effect. And informal contacts through the
    oversight process will often have that effect because agencies
    are dependent on Congress in so many ways.
        Mr. Bachus. I think my time has expired.
        At this time, I recognize the Ranking Subcommittee Member.
        Mr. Johnson. Thank you.
        Dr. McLaughlin, the Mercatus Center is a 501(c)(3)
    nonprofit that does not receive support from George Mason
    University or any Federal or State or local government and only
    receives funding through donations from companies like the Koch
    brothers. Is that correct?
        Mr. McLaughlin. Our organization is funded by private
    donations. However, we have a strict firewall between
    fundraising and research.
        Mr. Johnson. No, no, no.
        Mr. McLaughlin. I am not familiar with the details of the
    fundraising.
        Mr. Johnson. But companies like Koch Industries or
    companies that would be contributors or funders of your
    efforts. Is that right?
        Mr. McLaughlin. Again, I am not familiar with the details
    of our fundraising.
        Mr. Johnson. Are you aware of the fact that the Mercatus
    Center moved to George Mason University after George Mason
    University accepted $30 million from the Koch brothers?
        Mr. McLaughlin. That was prior to my time working at the
    Mercatus Center. So I did not experience that, if that is what
    occurred.
        Again, what matters to me at least is that we have this
    firewall of separation between all of the fundraising and the
    research. My research is my own. It is not influenced or
    controlled by any donors.
        Mr. Johnson. All right. Thank you, sir.
        And, Mr. Batkins, have you ever heard of the American
    Action Network?
        Mr. Batkins. Pardon me? The American Action Forum. No. The
    American Action Forum is a 501(c)(3). Network is a separate
    organization with a separate board.
        Mr. Johnson. And it is a 501(c)(4).
        Mr. Batkins. Correct.
        Mr. Johnson. And it is your sister organization. Correct?
        Mr. Batkins. They have a separate board and a separate
    president.
        Mr. Johnson. But you are sister corporations basically.
        Mr. Batkins. I rarely, if ever, have any interaction with
    the Network, and I focus purely on the policy analysis and
    regulatory policy, and I have never engaged in any political
    advocacy of the kind that the Network does engage in.
        Mr. Johnson. The Network and the Forum are housed in the
    same offices. You are basically sharing office space with
    Crossroads GPS and American Crossroads. Is that correct?
        Mr. Batkins. That is not correct. American Crossroads, I
    believe, is off of New York Avenue and we are a few blocks away
    on Pennsylvania Avenue.
        Mr. Johnson. What about Crossroads?
        Mr. Batkins. No. It is just the American Action Forum, the
    American Action Network.
        Mr. Johnson. So you do not share office space with
    Crossroads GPS?
        Mr. Batkins. We do not.
        Mr. Johnson. Have you ever?
        Mr. Batkins. During the formation of our organization in
    2010, for a few months we did.
        Mr. Johnson. And Crossroads GPS/American Crossroads is, of
    course, tied to Karl Rove.
        Mr. Batkins. That is my understanding, yes.
        Mr. Johnson. Is the Forum or the Network still tied to Karl
    Rove?
        Mr. Batkins. No. That is a completely separate
    organization, again housed somewhere else with a separate board
    and a separate staff.
        Mr. Johnson. Well, now, okay.
        I would like to ask Dr. McLaughlin. On page 10, the bill
    uses terms such as, ``excessive compliance costs'' and also
    ``excessively burdensome.'' What exactly do those terms mean,
    sir?
        Mr. McLaughlin. I think that is a great question. I agree
    with your statement that some terms could be interpreted with
    subjectivity. And I actually think that on page 11 of the bill,
    the statement that the commission shall establish a methodology
    for conducting its review hopefully goes to some length to
    addressing potential problems with subjectivity.
        So it is my hope--and, in fact, I have a study that I just
    released this morning where I recommend methods for addressing
    the problem of regulatory accumulation, and one of the points
    that I make is an objective method of assessment is key. So I
    share your concerns, and I hope that can be dealt with.
        Mr. Johnson. And tell me now, on page 13, the bill requires
    the commission to review a rule that is identified by the
    public? So does that mean that if the Mercatus Center
    identifies 1,000 rules that it believes should be reviewed,
    then the commission would be required to examine each and every
    one of those rules?
        Mr. McLaughlin. Well, I think that the provision for
    allowing the public or any entity to propose a rule is designed
    to make sure there is equal treatment of all. Whether one
    entity attempts to dominate that is perhaps something to be
    concerned with. It is similar to the current notice and comment
    process that is implemented by the Administrative Procedure
    Act. So if there is a problem with this, there is also a
    problem with that in that any entity can dominate the
    submission process.
        Mr. Johnson. Thank you, sir.
        And my time has expired.
        Mr. Bachus. Thank you.
        At this time, I recognize the gentleman from Missouri, Mr.
    Smith.
        Mr. Smith of Missouri. Thank you, Mr. Chairman.
        Professor Levin, in the closing part of your statement,
    you--I just want to correct. I think you made the statement
    Federal agencies are reliant on Congress in some ways. Is that
    correct?
        Mr. Levin. I am not sure exactly what you are referring to,
    sir.
        Mr. Smith of Missouri. Just in your last few sentences, in
    your comments when you were giving oral testimony, you made the
    comment, Federal agencies are reliant on Congress in some ways.
        Mr. Levin. I said that during my response to the Chairman.
        Mr. Smith of Missouri. Okay, in your oral conversation.
        Mr. Levin. Yes, sir.
        Mr. Smith of Missouri. And that brings a very important
    point to me that I want to make sure is on the record for this
    Committee. Federal agencies are creatures of Congress. They did
    not just exist. Agencies are created by Congress, and Congress
    can pass whatever laws it sees fit to cabin the authority of
    these agencies when they create laws. You know, Federal
    agencies only exist because Congress has decided by law to
    delegate its legislative power to agencies. So that statement
    in saying that Federal agencies are only reliant on some ways
    to Congress where that agency was created because of Congress
    is a huge problem, especially coming from a gentleman that
    teaches at a great university in my State.
        How do you respond to that?
        Mr. Levin. Sure. What I said was that they are accountable.
    But I agree 100 percent with what you just said. They are
    creatures of Congress and they are subject to congressional
    revision, actually not 100 percent. Congress cannot pass a law
    that violates the Appointments Clause or other relevant
    constitutional restrictions. But broadly speaking, Congress can
    adjust their mandates. So on that, I think we essentially do
    agree.
        Mr. Smith of Missouri. Exactly. So that goes forward with
    the concern that you said that this current draft violates the
    Appointments Clause, which I disagree with. But I think we both
    could agree--and you even said in your testimony that there
    could be areas where we could pass recommendations or we could
    just, in my opinion, put it directly in the legislative branch,
    much like Senator King and Blunt's bill over in the Senate.
    Would you not agree with that?
        Mr. Levin. That would solve the Appointments Clause problem
    I believe. It would certainly not deal with all of the policy
    concerns. There is a potential non-delegation constitutional
    problem with what is contemplated, but it does solve the
    Appointments Clause part.
        Mr. Smith of Missouri. But Congress has the power to say
    that we are going to create this commission to do this process,
    and in regards to appointing the individuals to serve on the
    commission, Congress can set the parameters. This is just a
    thought off the top of my head, but could Congress say that the
    President would need to appoint to this commission two out of
    the four nominations that the Speaker and the Minority Leader
    present to him?
        Mr. Levin. The constitutional criteria for appointment are
    not well defined in case law. I would think certainly the
    Justice Department would tell you that that is a violation of
    the President's prerogatives to appoint.
        Mr. Smith of Missouri. But does the Appointments Clause not
    also provide Congress has the power to decide in the
    appointment process of the President, of the courts, of the
    heads of departments. Correct?
        Mr. Levin. Not the clause. I assume the Necessary and
    Proper Clause gives them some authority.
        Mr. Smith of Missouri. I am talking about the
    constitutional clause of the appointments, the Appointments
    Clause that you brought up.
        Mr. Levin. The Appointments Clause itself says the
    President shall appoint.
        Mr. Smith of Missouri. But does it not say, in regards to
    inferior officers, that Congress can decide by law of those
    three different appointments of how they are appointed?
        Mr. Levin. I do not think these are inferior officers. They
    have more power probably than any agency that exists today.
        Mr. Smith of Missouri. But if Congress would say that these
    commissioners are inferior officers----
        Mr. Levin. They would be mistaken.
        Mr. Smith of Missouri. But we could do that.
        So let us get to the policy process of this bill. Do you
    see that there is a need to reduce obsolete and duplicated
    regulations off the books?
        Mr. Levin. Certainly.
        Mr. Smith of Missouri. What percent would you think would
    be a good target rate? You know, like 1 percent, maybe 5
    percent, 10? What do you think would be a good target goal in
    reducing some of these regulations off the books?
        Mr. Levin. I would not set a target because I think the
    process of weighing the costs against the benefits is an
    enormously complex matter, and I think it would be unhelpful to
    set a numerical figure.
        Mr. Smith of Missouri. So you would not want to say 1
    percent of the regulations are probably outdated or obsolete?
        Mr. Levin. I would not want to set a target figure because
    I think any such target would not be helpful in deciding which
    are the ones to eliminate.
        Mr. Smith of Missouri. So do you feel like 174,000 pages of
    regulations is too many or not enough?
        Mr. Levin. I think there are many areas where--many of them
    we do not need, and there are many more we do need. So how they
    net out I am not sure.
        Mr. Smith of Missouri. So no response.
        Thank you, Mr. Chairman.
        Mr. Bachus. Thank you.
        At this time, I recognize the gentleman from Michigan, our
    former Chairman, Mr. Conyers.
        Mr. Conyers. Thank you, Chairman Bachus. And I thank the
    witnesses.
        Let me ask my two friends, Mr. Batkins and Mr. McLaughlin,
    if you were persuaded--and I am not saying that you are
    already--that this provision could not pass constitutional
    muster, would that change your support for it? I will start off
    with Mr. McLaughlin.
        Mr. McLaughlin. Thank you.
        First, I need to clarify that I am not formally endorsing
    this. I am merely comparing the components that are in the bill
    to what I have laid out in my own research, elements that are
    necessary for successful reform.
        Secondly, I am a Ph.D. economist. I am not a constitutional
    lawyer, so I do not really have the wherewithal to weigh in on
    the constitutionality of the issue here. I apologize.
        Mr. Conyers. Well, that is okay. There are many Members of
    Congress who cannot either.
        But the problem is that if you were confronted by the legal
    opinions of constitutional scholars, would that affect your
    opinion?
        Mr. McLaughlin. My opinion is that there is a lot of merit
    to addressing the problem of regulatory accumulation from an
    economics perspective, and I would hope that issues like the
    constitutionality of any approach could be ironed out by legal
    scholars so that the issue can actually be dealt with. So my
    support would go toward dealing with the problem.
        Mr. Conyers. Mr. Batkins, with the American Action Forum,
    how would you react to a finding of unconstitutionality on this
    draft measure that we are discussing here this afternoon.
        Mr. Batkins. Again, I just want to clarify that we did not
    as a (c)(3) sort of formally supported the bill, but just sort
    of the broad principles of retrospective review.
        As to the constitutionality, that is not something that I
    discussed in my testimony. I understand that there is the
    presumption of constitutionality and that going forward, as
    this bill progresses, if there are serious defects, I am
    confident that they will probably be cured during the process.
        Mr. Conyers. Well, Professor Levin, would you care to make
    any comment about this issue that a number of us, including
    yourself, have raised already?
        Mr. Levin. About the constitutional issue? Well, just to
    elaborate a little bit on this distinction that Representative
    Smith made between principal and inferior officers, which I did
    not address in my first remarks, but beyond the fact that any
    officer who exercises a significant authority must be appointed
    under the Appointments Clause, some may only be appointed by
    the President with senatorial confirmation.
        And to be an inferior officer, you would need a superior.
    Well, this commission is not supervised by anyone. So in my
    view, they would be principal officers. You would need
    presidential appointment and senatorial confirmation.
        Mr. Conyers. Thank you so much.
        On page 10, Professor, you use the terms ``excessive
    compliance costs'' and ``excessively burdensome.'' I wanted to
    review those with you. It seems like there is so much
    subjectivity involved that it is kind of hard for us to get it
    together.
        Mr. Levin. Correct. They are entirely subjective or at
    least undefined.
        Mr. Conyers. Exactly.
        Last, but not least, on page 13, the bill requires the
    commission to review a rule that is, quote, identified by the
    public, unquote. So if Mercatus Center identifies 1,000 rules
    that it believes should be reviewed, would the commission be
    required to examine each of these rules?
        Mr. Levin. Since I had only 3 days to examine the bill, I
    am not sure about the specific point of what the scope would
    be. I generally agree with Mr. McLaughlin that a commission
    like this probably should look at submissions from the public.
    My problem is not that they are willing to listen, that they
    receive things from other people, but that I do not trust the
    conclusions they would reach.
        Mr. Conyers. Thank you so much, all of you.
        I yield back the balance of my time, Chairman Bachus.
        Mr. Bachus. Thank you.
        At this time, I recognize Mr. Doug Collins, the gentleman
    from Georgia.
        Mr. Collins. Thank you, Mr. Chairman. I appreciate it.
        I think this is definitely an opportunity to discuss the
    issues of transparency, the issues that we are dealing with
    here, and I think to include that further, I am going to yield
    the balance of my time to the gentleman from Missouri, Mr.
    Smith.
        Mr. Smith of Missouri. Thank you, Representative.
        Mr. McLaughlin, we were talking about having an independent
    commission. Right now how the process is that through executive
    orders, agencies monitor their own policy or ineffective or
    duplicated regulations. Correct?
        Mr. McLaughlin. Yes, sir. There have been a series of
    executive orders dating back decades that have exhorted
    agencies to review their own regulations. It is my opinion
    through research that none of them has had a substantive
    impact.
        Mr. Smith of Missouri. So where I come from in Missouri, we
    would call that the fox guarding the henhouse. And that is why
    we need an independent commission that is going to do some
    serious work in finding these regulations and to see if they
    are doing what they are supposed to be doing.
        What would you think would be a good target rate in what
    percent of maybe regulations that are out there that this
    commission could find that are duplicated or obsolete? Would
    you say 5 percent, 1 percent, 25 percent? I would like to have
    your judgment.
        Mr. McLaughlin. Unfortunately, I am not going to be able to
    give you a number. And I think part of the reason is we do not
    know. As you have said a few times, there are over 174,000
    pages in the CFR. That would take something like 2 years of
    someone's life to read. So to get to the point where we know
    what percentage to get rid of, it will first require a careful
    assessment of what we have on the books in the first place. I
    think that the assessment that is done by agencies, even if it
    were to be objective, could probably not deal with the number
    of rules that they have created over the decades anyway.
        Mr. Smith of Missouri. Mr. Batkins, would you want to give
    a target, a percentage of how many you think that may be out
    there that need to be amended or repealed?
        Mr. Batkins. I do not know that I could necessarily
    quantify it, but I can say that there is probably a lot of low-
    hanging fruit just from the reviews that I have seen from the
    Administration. It is 2014. There is a lot of electronic
    reporting, updating that we can do aside from the paper
    filings. I know that EPA has proposed rules for its National
    Pollution Discharge Elimination System and Hazardous Waste
    Management System that is moving toward electronic filing that,
    according to EPA, could save roughly $200 million annually. So
    I think there is probably some low-hanging fruit in the CFR,
    and a lot of that might just be getting technology to 2014.
        Mr. Smith of Missouri. Would you want to take a guess at a
    percentage?
        Mr. Batkins. Like I said, I do not know that I could
    necessarily quantify it.
        Mr. Smith of Missouri. I am not going to hold you to it,
    but say 15 percent, 20?
        Mr. Batkins. I would say that the--it is not necessarily
    the case, but the older provision more or less might be more
    ripe for review and amendment. But again, we have added a lot
    to the books just in the last few years, but again, I do not
    know if I could quantify it.
        Mr. Smith of Missouri. All right.
        Professor Levin, have you read S. 1309, Senator King's and
    Senator Blunt's review commission, because you mentioned it in
    your testimony?
        Mr. Levin. Yes, S. 1390, I believe it is.
        Mr. Smith of Missouri. 1309.
        Do you think that passes constitutional muster in the
    appointment of their commission?
        Mr. Levin. As I recall--and again, I did not focus on that
    bill because it is not the one we are considering today, but
    roughly speaking, if the commission merely makes
    recommendations to Congress for Congress to act on, that is, in
    general, constitutional.
        Mr. Smith of Missouri. And if a commission is solely rested
    within the legislative branch, would it be constitutional?
        Mr. Levin. If it is solely a legislative agency, it cannot
    exercise executive power.
        Mr. Smith of Missouri. Exactly. If the commission was just
    doing the work that was delegated to it by Congress but it sat
    within the legislative branch, just like another Committee in
    Congress.
        Mr. Levin. It depends on what the assignment is. The
    Supreme Court struck down the Gramm-Rudman Act in which power
    was entrusted to the Comptroller General because his actions
    were going to be legally binding, and you cannot ask the
    Comptroller General to do that.
        Mr. Smith of Missouri. Thank you, Mr. Chairman.
        Mr. Collins. I yield back, Mr. Chairman.
        Mr. Bachus. The gentleman from New York is recognized for 5
    minutes.
        Mr. Jeffries. Thank you, Mr. Chairman.
        Dr. McLaughlin, would you say that this bill is designed to
    address an urgent problem that confronts this country?
        Mr. McLaughlin. I think it is a significant problem.
    Regulatory accumulation, as I noted in my testimony, has been
    found to slow economic growth substantially, and that harms
    everyone.
        Mr. Jeffries. So it is urgent because excessive regulation
    exists. Is that correct in your view?
        Mr. McLaughlin. In my view the regulatory process we have
    in America results in consistent accumulation over decades.
    There is no process for getting rid of obsolete, duplicative,
    outdated, or ineffective regulations, at least no streamlined
    process. And I guess one way to put this is this is an
    opportunity for us to improve our economy at the rate of
    which----
        Mr. Jeffries. What is the adverse impact of the outdated,
    cumulative, excessive regulations that you speak to that you
    have characterized as a significant problem? What is the impact
    on the economy?
        Mr. McLaughlin. Primarily it reduces innovation and
    entrepreneurship. People who would have undertaken some sort of
    entrepreneurial endeavor--maybe it could be--for example, Logan
    City, Utah was going to install--actually did install micro-
    hydropower systems in order to create some clean energy for
    local residents. But they ran into a lot of regulations that
    were duplicative and not applicable to this particular
    scenario. End result: the cost of this environmentally friendly
    endeavor doubled.
        Mr. Jeffries. Okay. We have the world's most significant
    economy. I get that you are pointing to a situation in Logan
    City, Utah, and I am sure that is a wonderful place. But I am
    asking about the significant nature of the problem that you
    have indicated and for you to be able to point to evidence that
    exists as it relates to the impact of the economy. What
    evidence do you have in a macro-economic way?
        Mr. McLaughlin. Yes, sir. My testimony cites several
    studies that have been published in peer-reviewed academic
    journals, one of which is the one I cited in my testimony.
    However, others have been produced by scholars at the World
    Bank, the OECD. The evidence is it is wide-ranging that a
    regulatory system that does not address obsolete and
    duplicative or ineffective regulations----
        Mr. Jeffries. Give me an example of an ineffective rule in
    the food safety area, for instance.
        Mr. McLaughlin. An effective regulation would be one that
    does not achieve its outcomes, does not have an effect.
        Mr. Jeffries. I am asking for an example.
        Mr. McLaughlin. I am sorry?
        Mr. Jeffries. Can you give me an example?
        Mr. McLaughlin. Of a regulation in food safety? I am not an
    expert in food safety.
        Mr. Jeffries. Give me an example of a regulation that fits
    that description of being outdated, ineffective, non-
    constructive in the occupational safety area.
        Mr. McLaughlin. Well, there is a regulation that I am
    familiar with that is in the safety area. NHTSA, for example,
    requires headlights to be designed in a certain way, high beam
    and low beam, and the reason is you do not want the high beam
    to blind an oncoming driver. That regulation is, in my opinion,
    outdated because now adaptive headlight systems have been
    created, sold in Europe, sold in Asia, but not in America
    because this regulation prohibits them. This adaptive system
    would allow the high beam to be dimmed for the oncoming
    driver----
        Mr. Jeffries. I am sorry to cut you off, but my time is
    limited.
        Your position is that we need a presidentially-sanctioned,
    legislatively-authorized commission to deal with an outdated
    high beam regulation. That is essentially what you are here to
    testify to today?
        Mr. McLaughlin. The regulation is still impeding progress
    in our economy, and I am sure that is only one of many examples
    that could be found, were we to be able to go through all
    174,000 pages.
        Mr. Jeffries. Can you give me an example in the consumer
    safety area of an outdated regulation that is having a
    devastating impact on our economy that requires us to move
    forward with some degree of urgency and connected with this
    legislation?
        Mr. McLaughlin. Sir, I think your line of questioning is
    actually underscoring the point that we do need to do a
    thorough assessment of all these regulations. There is no way I
    can sit here and come up with example after example after
    example because I have not spent my time reading all 174,000
    pages of regulations. However, we have a good suspicion, I
    think, on both sides of the aisle for all parties involved that
    there are some there that could be gotten rid of and could
    offer chances for----
        Mr. Jeffries. All right, but sir, we are here to address
    problems that confront the American people, not enact
    legislation in search of a problem that heretofore, for me at
    least, has been ill-defined.
        One last question. So you took the position that you are
    not familiar with the fact that the Koch brothers have provided
    funding assistance to the center that you work for. Is that
    your position on the record?
        Mr. McLaughlin. We have a firewall separating research from
    fundraising. I am not familiar with the details of fundraising.
    That is my position.
        Mr. Jeffries. Thank you.
        Mr. Bachus. Thank you.
        Professor, there have been three executive orders by this
    President to review regulations, to look for outdated
    regulations, duplicative regulations, those that have more of a
    detriment or cost than a benefit. Do you agree with an effort
    to systematically go through all the regulations and do a
    regulatory reform effort?
        Mr. Levin. Mr. Chairman, I testified on this point in 2012,
    and I think there are diminishing returns to looking repeatedly
    at every regulation.
        Mr. Bachus. I am out of order.
        Mr. Cicilline from Rhode Island.
        Mr. Cicilline. Mr. Chairman, thank you, and I thank the
    witnesses.
        I will concede for the purpose of this hearing that there
    are some regulations that are duplicative and unnecessary and
    obsolete and we ought to eliminate them. I think each of us
    could find one.
        But the notion of creating a new bureaucracy of unelected
    bureaucrats with no particular experience or expertise to make
    critical, often lifesaving determinations about issues ranging
    from safe chemical levels to energy standards, to health care
    is a frightening prospect and I think something that I would
    resist with tremendous resolve.
        But I want to just try to understand how it would work,
    even if you had your way. Your legislation says that in this
    cut-go, that the cost of any new rule to the United States'
    economy has to be offset by a repeal. So I want to understand
    how we would calculate the cost of a new rule. So suppose you
    had a rule--and this is for you, Dr. McLaughlin--that said you
    have to have a level of this particular toxin below a certain
    amount because it proved to be very deadly to children. It is
    in children's food. And it would add a dime to the cost of food
    for children, but it would save countless lives. At high
    levels, it would cause infant death. It presumably would save
    thousands of lives. If you calculate the cost of the new rule
    to the U.S. economy, do you take into account not just the 10
    cents but there is no requirement that you net out the children
    whose lives would be saved, the children who would be healthier
    because they are not ingesting the toxin? Is there anything in
    this legislation that would net out what the value of
    regulation is? And if not, how do you possibly implement it?
        Mr. McLaughlin. It is my understanding that the analysis of
    costs for the cut-go portion of the bill for any new rules
    proposed would actually be performed by the agency that is
    proposing those. Under their methods that they use right now,
    they perform regulatory impact assessment following OMB
    Circular----
        Mr. Cicilline. But, Dr. Levin, the statute that we are
    being asked to consider says the annual costs of the new rule
    to the United States' economy. There is no assurance that there
    is actually even an assessment done about what the net benefit
    of any regulation is. Right? And, of course, that is consistent
    with what you said in your opening comment where you said
    currently regulations by design restrict choices. Well, I guess
    that is true. It restricts the choice of a parent to have their
    child to eat food that is poisoned. But it does not just
    restrict choices. It also is about keeping people safe, for
    example. Would you agree? Regulations do not just restrict
    choices. They also keep people safe.
        Mr. McLaughlin. Regulations have both costs and benefits.
    Absolutely.
        Mr. Cicilline. Okay. Benefits are safety, health. Right?
        Mr. McLaughlin. Regulations can----
        Mr. Cicilline. And you agree we should take those into
    account before we make a determination as to whether or not to
    repeal a regulation. Correct?
        Mr. McLaughlin. I think that benefits should be weighed
    against costs.
        Mr. Cicilline. And in fact, you said in a letter to the
    editor to ``The Hill''--and I quote. You wrote, ``It is
    unlikely that anyone knows what the actual net benefits of
    regulation are although I maintain hope that further research
    can produce some reliable lessons.'' Those are your words.
        Mr. McLaughlin. Those are.
        Mr. Cicilline. So this bill would then allow individuals
    who have no expertise in a subject-matter area to make a
    determination as to whether or not a regulation should be
    repealed based on the offset that comes solely from the cost to
    the U.S. economy without any consideration of the benefits.
        Mr. McLaughlin. I do not think that is a completely correct
    characterization. I do not know that it would be consisting of
    people without expertise in the area. I actually tend to think
    that we should make sure they have expertise in the areas being
    reviewed.
        Mr. Cicilline. Well, do we not have another mechanism
    available to us, both through the APA and through statutory
    directives, obligating people who actually have responsibility
    and expertise in this area to do assessments and allowing
    individuals to petition for the repeal or review? Does there
    not already exist an infrastructure to do exactly what you are
    advocating for?
        Mr. McLaughlin. The problem with that infrastructure, sir,
    is that expertise does not necessarily equate to objectivity.
    So under current processes, the agencies review their own
    regulations, but it is not guaranteed that you will get an
    objective analysis. Agencies are stakeholders in this process.
        Mr. Cicilline. But if, in fact, an agency refuses to repeal
    a regulatory provision that ought to be repealed, that matter
    can then be taken up by the Congress of the United States
    through legislative action.
        Mr. McLaughlin. Something that I think is very rare.
        Mr. Cicilline. But there are mechanisms that currently
    exist to address the very problem that this legislation intends
    to address.
        Mr. McLaughlin. And the study that I released today and
    that I submitted to the record--if not already, I will make
    sure it is--I have addressed these efforts, and it is my
    conclusion that none of the methods that we have right now for
    retrospective review are making much difference.
        Mr. Cicilline. I thank you, Mr. Chairman, and yield back.
        Mr. Bachus. Thank you.
        There is a vote on the floor. So at this time, we are going
    to wrap up.
        You know, Senator Joseph McCarthy is dead, but the Ranking
    Member may want to actually--you went into the Koch brothers.
    You may actually want to talk to Professor Levin. He is
    actually in the Anheuser-Busch Hall. You might actually want to
    see if there is some tie-in with the beer industry, which I
    know does not exist.
        Mr. Levin. I concede that I work in Anheuser-Busch Hall,
    Mr. Chairman.
        Mr. Bachus. We will not to explore your beer preferences or
    whether your work is influenced by being in the Anheuser-Busch
    Hall.
        Mr. Levin. I try to give sober assessments, sir.
    [Laughter.]
        Mr. Bachus. Thank you.
        Mr. Johnson. Mr. Chairman, if I might, I would like to
    offer, with unanimous consent, these two letters, one from the
    Natural Resources Defense Council and the other from the
    Coalition for Sensible Safeguards, both of which oppose the
    SCRUB Act. I would like to submit those for the record.
        Mr. Bachus. And the Natural Resources Defense Council--we
    could have predicted that. Could we not?
        Mr. Johnson. Just as we could predict that Karl Rove and
    the Koch brothers are in favor of fewer rules.
        Mr. Bachus. Anheuser-Busch folks--they got to be in there
    somewhere.
        Without objection.
        [The information referred to follows:]

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                                   __________
        Mr. Johnson. Thank you.
        Mr. Bachus. This hearing is adjourned.
        Professor Levin, I would like to explore with you whether
    there is some bipartisan way to--you talked about--to look at
    these regulations.
        Mr. Levin. I take it you are wrapping up, but I would be
    happy to work with the Subcommittee over time in looking at
    alternative ways of dealing with retrospective review.
        Mr. Bachus. Thank you.
        This concludes today's hearing. Thanks to all our witnesses
    for attending.
        Without objection, all Members will have 5 legislative days
    to submit additional written questions for the witnesses or
    additional materials for the record.
        This hearing is adjourned.
        [Whereupon, at 2:31 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 Bob Goodlatte, a Representative in
      Congress from the State of Virginia, and Chairman, Committee on the
                                   Judiciary
        Just over six months ago, President Obama announced that he would
    once again pivot to the economy. The bottom line of his speech: after
    four-and-a-half years of the Obama Administration, ``We're not there
    yet.''
        The President was right. We were not there yet. Regrettably, the
    same can be said today. Job creation and economic growth continue to
    fall short of what is needed to produce a real and durable recovery in
    this country. The nominal unemployment rate is down, but that is not
    because enough workers have found jobs. It is because so many
    unemployed workers have despaired of ever finding new full-time work
    that they have left the work force or settled for part-time jobs.
        As long as this situation continues, Congress must stay focused on
    enacting reforms that will stop the losses, return America to
    prosperity and return discouraged workers to the dignity of a good,
    full-time job.
        Throughout this term of Congress, the Judiciary Committee and the
    Subcommittee on Regulatory Reform, Commercial and Antitrust law has
    worked hard to produce the regulatory reforms that will help to produce
    these results. Today, we turn to one of the biggest remaining pieces of
    the puzzle--how to clear the clutter of outdated and unnecessarily
    burdensome regulations that too often keep growth and job creation
    down.
        For years, there has been a bipartisan consensus that this is an
    important task that must be performed. But, as with so many things, the
    hard part has always been the details. Different approaches have been
    tried by different presidential administrations, and some solutions
    have been offered by Congress. But, to date, no sufficiently meaningful
    results have been produced.
        In many ways, this must be because past approaches have never fully
    aligned the incentives and tools of all of the relevant actors--
    regulatory agencies, regulated entities, the President, the Congress,
    and others--to identify and cut the regulations that can and should be
    cut. On their own, regulators have little incentive to shine a
    spotlight on their errors or on regulations that are no longer needed.
    Regulated entities, meanwhile, may fear retaliation by regulators if
    they suggest ways to trim the regulators' authorities. And the sheer
    volume of the Code of Federal Regulations--which contains well over
    150,000 pages of regulations--presents a daunting task for any Congress
    or President to address.
        The SCRUB Act represents a real step forward in our attempts to
    identify a way to cut the forest of federal regulations down to size
    without compromising needed regulatory objectives. By establishing an
    expert commission with the resources and authority to assess
    independently where and how regulations are outdated and unnecessarily
    burdensome, it overcomes the disincentives for agencies and even
    regulated identities to identify problem regulations.
        In addition, by providing a fast-track legislative method to green-
    light repeal and amendment of the highest priority regulations, the
    SCRUB Act assures that we will take care of the biggest problems
    quickly. Further, by instituting regulatory ``cut-go'' measures, the
    bill assures that the rest of the work of cutting regulations will
    finally happen.
        Finally, by instituting efficient means for Congress to provide the
    ultimate checks on the regulatory review exercise, it assures that the
    Legislative Branch has the ultimate say over the exercise of
    legislative authority it delegates to agencies.
        I urge my colleagues to support the RAPID Act and cut down the time
    it takes America's workers to see a real Jobs Recovery.

     Response to Questions for the Record from Patrick McLaughlin, Ph.D.,
        Senior Research Fellow, Mercatus Center, George Mason University

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            Response to Questions for the Record from Sam Batkins,
              Director of Regulatory Policy, American Action Forum

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

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