[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


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      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:]


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                               __________

    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:]


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                               __________

    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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