[Senate Hearing 113-207]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-207
 
                   NOMINATION OF HOWARD A. SHELANSKI

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

                                HEARING

                               before the

                              COMMITTEE ON

               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS


                             FIRST SESSION

                               __________

NOMINATION OF HOWARD A. SHELANSKI, TO BE ADMINISTRATOR OF THE OFFICE OF 
  INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET

                               __________

                             JUNE 12, 2013

        Available via the World Wide Web: http://www.fdsys.gov/

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                  THOMAS R. CARPER, Delaware Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota

                   Richard J. Kessler, Staff Director
               John P. Kilvington, Deputy Staff Director
            Deirdre G. Armstrong, Professional Staff Member
       Lawrence B. Novey, Chief Counsel for Governmental Affairs
                  Katherine C. Sybenga, Senior Counsel
               Keith B. Ashdown, Minority Staff Director
         Christopher J. Barkley, Minority Deputy Staff Director
                   James P. Gelfand, Minority Counsel
                     Trina D. Shiffman, Chief Clerk
                    Laura W. Kilbride, Hearing Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Carper...............................................     1
    Senator Coburn...............................................     3
    Senator Johnson..............................................     4
    Senator Levin................................................    12
    Senator Portman..............................................    16
Prepared statements:
    Senator Carper...............................................    27
    Senator Coburn...............................................    29

                               WITNESSES
                        Wednesday, June 12, 2013

Howard A. Shelanski, to be Administrator, Office of Regulatory 
  Affairs, U.S. Office of Management and Budget
    Testimony....................................................     5
    Prepared statement...........................................    31
    Biographical and financial information.......................    33
    Letter from the Office of Government Ethics..................    55
    Responses to pre-hearing questions...........................    58
    Responses to post-hearing questions..........................    78


                   NOMINATION OF HOWARD A. SHELANSKI,


                     TO BE ADMINISTRATOR, OFFICE OF

  INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET

                              ----------                              


                             JUNE 12, 2013

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Thomas R. 
Carper, presiding.
    Present: Senators Carper, Levin, Coburn, Johnson, and 
Portman.

              OPENING STATEMENT OF CHAIRMAN CARPER

    Chairman Carper. Well, good morning, everyone. The hearing 
will come to order.
    Today, we welcome the President's nominee for the position 
of Administrator of the Office of Information and Regulatory 
Affairs (OIRA), an important job, and we are happy to be able 
to welcome you today, and we are happy that your family is here 
and especially want to welcome your parents, welcome your son, 
Isaac, and all these other folks that have joined you. It is a 
pretty good turnout.
    It is always encouraging to me when you have a lot of 
people sitting out behind you for a confirmation hearing and 
not many people sitting up here, because when you have a lot of 
people sitting up here, it is not always a good sign. We are 
not always here to warmly welcome you.
    Today, we meet to consider the nomination of Howard 
Shelanski, President Obama's choice to serve as Administrator 
of the Office of Information and Regulatory Affairs. This is an 
important office within the Office of Management and Budget 
(OMB). It has been without a Senate-confirmed leader since, I 
think, last August, when Cass Sunstein left us for other parts.
    I am pleased the President has nominated someone who is, I 
think, highly qualified. I intend to work with my colleagues on 
this Committee, certainly with Dr. Coburn, to complete our 
review and report the nomination for action by the full Senate 
as soon as we can.
    Although OIRA is not well known outside of Washington, it 
has a very important role across the government and in our 
daily lives. Congress passes laws that draw lines between what 
is acceptable and unacceptable in our society, whether it is to 
protect our public health, the economy, or the natural 
environment. But we in Congress cannot cover every situation in 
the legislation we pass, so we leave many of the particulars to 
the regulatory process, as you know.
    For many years, Presidents have asked OIRA to help oversee 
and coordinate our regulatory process and review the most 
important proposed rules. Americans are impacted by the 
decisions and actions of OIRA every time we take a drink of 
water or go to the bank. Although some people think we need to 
choose between regulation and having a robust growing economy, 
I disagree. I believe that Federal regulations should only be 
issued when there is a real need, when they are cost effective, 
and when they make sense.
    When these conditions are satisfied, Federal regulations 
serve an essential purpose in protecting our environment, our 
health, our safety, consumers, and our financial system.
    For example, by advocating a common sense, cost effective 
approach to our Nation's environment and energy challenges, we 
can reduce harmful pollutants, lead healthier lives, lower our 
energy costs, and help put Americans to work manufacturing new 
products.
    OIRA has also been tasked with coordinating agencies' 
reviews of their existing regulations in order to explore 
whether any should be modified or streamlined, expanded, or 
repealed so as to make the agency's regulatory program more 
effective or less burdensome. That is something that Cass was 
very much involved in, as you know.
    Furthermore, OIRA, together with the Office of E-Government 
and OMB as a whole, has important responsibilities in managing 
the government's immense information resources. The OIRA 
Administrator also has responsibility for implementing the 
Privacy Act of 1974, which governs the collection, maintenance, 
use, and the dissemination of information about individuals 
maintained by several Federal agencies, including the 
Department of Veterans Affairs (VA), Social Security 
Administration (SSA), the Centers for Medicare and Medicare 
Services (CMS), and the Office of Personnel Management (OPM). 
The head of OIRA thus has a number of critical roles in terms 
of determining how our citizens will interact with our 
government.
    I am pleased the President has presented us with a nominee 
with the training and the experience to take on these important 
challenges. Mr. Shelanski has earned both a law degree and a 
Ph.D. in economics from the University of California-Berkeley. 
His combined training and expertise in law and economics should 
be especially valuable in a role of leading OIRA and helping to 
ensure that our Federal regulatory programs both conform to law 
and achieve the best practical results for the American people.
    Mr. Shelanski comes well prepared to take on the challenges 
of this position from his extensive government service, first 
as Senior Economist for President Clinton's Council of Economic 
Advisers, then as Chief Economist at the Federal Communications 
Commission (FCC), and more recently as Manager within the 
Federal Trade Commission's Bureau of Economics, which he has 
headed for about a year now.
    While not serving in the government, Mr. Shelanski has also 
had a distinguished career in academia, first as a professor at 
the University of California at Berkeley, his alma mater, and 
later at the Georgetown University Law Center. And as another 
indication of both Mr. Shelanski's intellect and breadth of 
experience, he began his legal career clerking for, among 
others, Supreme Court Justice Scalia.
    Not surprisingly, Mr. Shelanski has earned a reputation 
among those he has worked with of not only being smart, but 
also being articulate, highly collegial, qualities of character 
that would serve him well here in the Senate but will also 
serve him well at a place like OIRA, the heart of government.
    My recommendation to my colleagues on this Committee is 
that we listen to him, ask him a bunch of questions, and if we 
like him, support his nomination and promptly report him to the 
full Senate.
    Mr. Shelanski, we welcome you before this Committee and 
look forward to your testimony.
    And I think I am supposed to introduce you, but let me just 
yield first to Dr. Coburn.

              OPENING STATEMENT OF SENATOR COBURN

    Senator Coburn. Well, Mr. Chairman, thanks for having this 
hearing. We have an excellent candidate before us. I have a 
statement for the record that I would like to have be 
submitted, and I just want to followup on a couple of things 
you said.
    One of the things Senator Carper said is common sense. 
Where do you get that? How do you develop it? You do not unless 
you have had a broad base of experience, and so my worry at 
OIRA is that the intent is good, the heart, the compassion is 
right, but the background reference for having knowledge on how 
regulations will truly impact an industry, an area, or whatever 
is missing. And your experience is great to a limited extent.
    So I guess my worry, for anybody in that position, is how 
do you develop the context of getting that common sense brought 
forth as you look at regulations? I do not care which 
Administration it has been. We have lacked that, in my opinion.
    And so one of the things I hope to work with our nominee 
on, and our head of OIRA, is how do you develop a process where 
you get great input so that you add to your already breadth of 
knowledge the expertise, and I am not talking about from the 
agency or the comments, but a cadre of people that you can rely 
on that will give you that extra bit of insight, because, 
really, OIRA, in terms of the economics out there, $1.8 
trillion is the cost of our regulation right now, $1.8 
trillion. If you break it down, that is $14,678 per family in 
this country, and most of it is well intended, but a lot of it 
has a ton of unintended consequences.
    So my real goal with you, Howard, is to develop the kind of 
relationship so that when you are fulfilling your job, that you 
actually can bring in to give context on the areas where you 
really do not have any experience and you do not have anybody 
around you with experience so that you can see it in the whole, 
not to bias it in a conservative, liberal, or moderate way, but 
just really based on what a cogent, well thinking person of 
experience would do to accomplish both the goal but also do the 
least harm. And, you know, most people in business, in the 
economy out there, you are their last hope to not burden more 
than the $1.8 trillion, not add more to the economy that does 
not buy us something substantive to it.
    I have looked at your qualifications. There is no question 
you are there. And I welcome you to the Committee and will have 
limited questions, but I hope to develop the relationship and 
just give you the admonition from my gray hair to you is I have 
been in business, I have been in medicine, I have been in 
government, and I still rely on a lot of people who have a 
whole heck of a lot more experience in a lot of other areas 
besides my staff to help me make judgments. And that is the one 
key area that I hope we can get to at OIRA so that we are 
making the best decision for the country as a whole.
    So I thank you for being here and look forward to your 
testimony.
    Chairman Carper. Thank you, Dr. Coburn.
    I just want to followup on one thing that Dr. Coburn said, 
and that is the common sense thing. You can look at a person's 
resume and it tells you a lot about their education, about the 
work that they have done, but it does not tell you necessarily 
about the values that are imparted to us growing up by our 
families. And I think it is wonderful that your parents are 
here today.
    But I remember, Tom, something that--my father was a Chief 
Petty Officer in the Navy, World War II, tough as nails, and he 
was always saying to my sister and me growing up, if a job is 
worth doing, it is worth doing well. We would have chores to do 
and did not do them very well. He was always saying, if a job 
is worth doing, it is worth doing well. He said it a million 
times. And out of all that, I took away the idea of doing 
things well, to focus on excellence in everything we do, and 
one of the things we do in this Committee is we really work on 
the culture in the Federal Government to try to get better 
results from less money and how can we do things better.
    The other thing my dad always said to my sister and me, 
when we would pull some boneheaded stunt he would always say, 
just use some common sense. He said it a lot. He did not say it 
so nicely. But he must have said it a million times. And one of 
the things, when I left home to go off to be a Navy rising 
midshipman at Ohio State and then in the Navy, I thought a lot 
about common sense. I still do.
    And so that is not something that shows up on my resume, 
probably not yours, as well. We will ask your Mom and Dad later 
if you have any and they can tell us. Hopefully, they will say 
yes.
    Senator Johnson, normally, I would not call on you to make 
remarks, but you are a good man, you are here, and just if you 
would like to make some brief comments, that would be fine.

              OPENING STATEMENT OF SENATOR JOHNSON

    Senator Johnson. Well, thank you, Mr. Chairman. I will pipe 
in on basically two points.
    Senator Coburn certainly talked about unintended 
consequences, and I know at OIRA, one of your missions is 
certainly doing a cost-benefit analysis. I have not found in my 
short time here that the Federal Government is particularly 
good at measuring the intended results of what they are trying 
to accomplish, so they are not even really concerned, or they 
certainly do not consider the unintended consequences of some 
of these regulations. I think it would be enormously helpful if 
the OIRA would start paying attention to and at least try and 
consider the unintended consequences of a lot of these rules 
and regulations.
    And I think the last point--I do not think anybody has 
mentioned this one yet--is the law of diminishing returns. I 
think we see that all the time. Again, I agree with Senator 
Coburn. These regulations are well intended. I think all of 
government is well intended. But as we continue to throw more 
and more government at problems, you do reach that point of 
diminishing returns, and I think that is also something that 
OIRA could really be taking a look at, is each layer of these 
regulations.
    I mean, I will throw one out there: Ozone regulation. We 
get it down to 75 parts per million. I guess there must be an 
Office of Ozone Regulation in EPA and they must be sitting 
around their office going, well, now what do we do? I am afraid 
the reaction is, let us knock it down to 65 parts per million 
at a cost of maybe a trillion dollars, and I do not know what 
the benefit of that would be.
    So I think you really need to take a look at unintended 
consequences and the law of diminishing returns as you are 
doing your analysis, should you be confirmed for this position.
    Thank you, Mr. Chairman.
    Chairman Carper. Thank you, sir.
    Howard Shelanski has filed responses to a biographical and 
financial questionnaire, answered prehearing questions 
submitted by our Committee, had his financial statements 
reviewed by the Office of Government Ethics, and without 
objection, this information will be made part of the hearing 
record, with the exception of the financial data, which are on 
file and are available for public inspection in the Committee's 
office. Hearing no objection.
    Our Committee rules require that all witnesses at 
nomination hearings give their testimony under oath, so I am 
going to ask you, Mr. Shelanski, if you would please stand and 
raise your right hand.
    Do you swear that the testimony you are about to give to 
the Committee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mr. Shelanski. I do.
    Chairman Carper. Very well. Please be seated.
    You may proceed with your statement. Feel free to introduce 
your family, any friends that you have here with you today, and 
then we will jump into the questions. But welcome. We are glad 
that you are here and happy that your family is here, too.

       TESTIMONY OF HOWARD A. SHELANSKI, NOMINATED TO BE 
 ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS, 
              U.S. OFFICE OF MANAGEMENT AND BUDGET

    Mr. Shelanski. Well, thank you. Thank you very much, 
Chairman Carper, Dr. Coburn, and Members of the Committee, for 
welcoming me today. It is an honor to be considered by this 
Committee as the President's nominee to be Administrator of the 
Office of Information and Regulatory Affairs.
    I would like to start off this morning by thanking my 
family for their support in taking on this challenge. I am glad 
to have Nicole Soulanille and our son, Isaac Shelanski, and my 
parents, Vivien and Michael Shelanski, who this week are 
celebrating their 50th wedding anniversary, here with me today.
    I also want to thank the Members of the Committee and their 
staffs for meeting with me over the last few weeks. I 
appreciate the time many of you took from your busy schedules 
and thank you for sharing your insights and views as I prepared 
for this hearing. For those of you I have not yet had the 
opportunity to meet, I look forward to doing so in the future.
    If confirmed, I look forward to working with you and 
maintaining open communications. I would welcome your 
perspectives on the matters of concern to OIRA.
    The Office of Information and Regulatory Affairs plays an 
essential role in developing and overseeing the implementation 
of governmentwide policies on regulation, information 
collection, information quality, statistical standards, 
scientific evidence, and privacy. I am humbled by my nomination 
to lead such an important organization.
    I would like to begin by speaking briefly about my 
background and about the training and experience that have 
helped me to prepare for the job of OIRA Administrator, should 
I be confirmed.
    I have a Ph.D. in economics and a law degree and have spent 
my career combining both disciplines. I joined the faculty of 
Georgetown University Law School in 2011 after having 
previously been a professor at the University of California at 
Berkeley since 1997. At Berkeley, I also served 3 years as 
Associate Dean of the law school and was Co-Director of the 
Berkeley Center for Law and Technology.
    Most of my teaching and research have focused on 
regulation, particularly in the telecommunications sector, and 
on antitrust policy. In this work, I have had the opportunity 
to analyze complex issues and their effects upon society, 
ranging from the virtues of switching to a less rule-based 
model of telecommunications regulation to how antitrust 
enforcement can better accommodate and promote technological 
innovation.
    I have also served in several government positions. 
Currently, I am the Director of the Federal Trade Commission's 
Bureau of Economics, where I previously served as Deputy 
Director from 2009 to 2011. Other government positions I have 
held include Chief Economist at the Federal Communications 
Commission and Senior Economist at the Council of Economic 
Advisors. In these roles, I successfully worked with other 
agencies, the Congress, and the public in an effort to serve 
the American people.
    I have also practiced law, focusing on regulatory and 
antitrust matters. And at the start of my career, I spent time 
in the Judicial Branch of government as a law clerk to judges 
appointed by Presidents of both parties. I had the honor of 
clerking for the late Judge Louis Pollak, for Judge Stephen 
Williams, and for Justice Antonin Scalia.
    From my past experience in government and from having 
worked for judges across the ideological spectrum, I learned 
the importance of relying on sound evidence and rigorous 
analysis to make decisions and of developing good working 
relationships with people of varying viewpoints and backgrounds 
to achieve collective goals.
    If confirmed as Administrator, I would draw from my own 
experiences and rely on the expertise and insights of career 
staff at OIRA and the agencies, others in the Administration, 
the Congress, and public participants in the regulatory process 
to fulfill OIRA's mandates. I believe that public involvement 
and transparency in regulation is critically important as we 
tackle the complex issues that our country faces today.
    If confirmed as Administrator, I would look forward to 
working with this Committee and the Congress on these important 
matters.
    Thank you for your time this morning, and I look forward to 
answering your questions.
    Chairman Carper. All right. Thanks for that statement.
    As you may know, we start our questioning by asking the 
same three questions of all of our nominees, and I will just 
run through these and if you would respond, I would be 
grateful. We would be grateful.
    Is there anything you are aware of in your background that 
might present a conflict of interest with the duties of the 
office to which you have been nominated?
    Mr. Shelanski. No, sir.
    Chairman Carper. All right. No. 2: Do you know of anything, 
personal or otherwise, that would in any way prevent you from 
fully and honorably discharging the responsibilities of the 
office to which you have been nominated?
    Mr. Shelanski. No, I do not.
    Chairman Carper. And finally, do you agree, without 
reservation, to respond to any reasonable summons to appear and 
testify before any duly constituted Committee of Congress if 
you are confirmed?
    Mr. Shelanski. Yes, Chairman Carper, I do.
    Chairman Carper. Before we get into the questions, if your 
Mom and Dad were at the witness table, I would ask them what is 
the secret for being married 50 years. It is a question, 
whenever I talk to people who have been married 50, 60, or 70 
years, I love asking, what is the secret. I get some hilarious 
answers and I get some really poignant ones, as well.
    A couple of weeks ago, I met a couple who had been married 
54 years and I said to the wife standing next to her husband, I 
said, what is the secret for being married 54 years, and she 
said, ``He will tell you he can either be right or he can be 
happy, but he cannot be both.'' [Laughter.]
    The best answer I ever heard in all these years I have been 
asking people, the best answer I have ever heard is the two Cs, 
not Coburn and Carper, but the two Cs, communicate and 
compromise. As it turns out, that is not only the secret for a 
long lasting union between two people, it is also the secret 
for a vibrant democracy. We have a couple of guys up here, I 
hope the three of us are pretty good at the two Cs, and you 
will probably need to be pretty good at them, as well.
    Let me get more serious, if I can. But let us just talk 
about priorities if you are confirmed, and I hope you will be. 
But if you are confirmed, what might be some of your top few 
priorities, please?
    Mr. Shelanski. Thank you, Chairman Carper. Should I be 
confirmed at OIRA Administrator, my top priorities would really 
be three. First, I would like to ensure that regulatory review 
at OIRA occurs in as timely a manner as possible, that the 
quality of review remains high, and that timeliness and the 
notice to regulated parties and to the public of what the 
regulatory regime will be will become finalized as effectively 
and efficiently as possible.
    Second, I would view it as a very high priority to form 
good and respectful working relationships with the agency 
heads, with Members of Congress, with others in government, 
and, indeed, with public stakeholders so that should I be 
confirmed as Administrator of OIRA, I will have the trust and 
positive working relationships that are essential to accomplish 
OIRA's objectives.
    Third, I think it is extremely important to continue the 
good work that OIRA and the Administration have already been 
working on to further retrospective review of regulations and 
of our administrative system. I think it is extremely important 
to ensure that even as we move forward as a country with new 
regulations, achieving new objectives or furthering old 
objectives, that we look back at regulations on the books to 
ensure that there are no longer burdens in place that are not 
achieving their objectives.
    Chairman Carper. That was something that Cass Sunstein was 
asked by the President to do, and by most people's judgment, he 
and OIRA did a pretty good job at that. But what I think you 
are saying is this should be an ongoing process, not just 
something we do every 5, 10, or 15 years, but do on an ongoing 
basis. Is that what you are saying?
    Mr. Shelanski. I look forward, Chairman Carper, should I be 
confirmed, in learning more about how the retrospective review 
process has, in fact, been implemented in the agencies and what 
OIRA can do to further institutionalize and enable this 
valuable function.
    Chairman Carper. OK. Well, that is good. Good to hear that.
    What is your understanding of the Obama Administration's 
goals in the area of regulation? How would those goals relate 
to your work, if confirmed?
    Mr. Shelanski. Thank you. I think the Obama 
Administration's goals for regulation involve ensuring that 
Americans are protected in their health, their workplaces, 
their safety and welfare, and in the environment in which they 
live. But I think it is important to ensure that regulation 
takes place consistently with the paramount importance of job 
creation, economic growth, and ensuring that our country's 
prosperity continues along with achieving these vital 
protections for Americans.
    Chairman Carper. Talk to us about the, I do not know if 
``conflict'' is the right word or ``tension,'' between a 
cleaner environment and economic growth. That is something I 
suspect you had a chance, given your other jobs, to think 
about. Just talk to us about the tension that exists between 
trying to continue to clean up our environment, whether it is 
air, water, whatever, and to at the same time foster stronger 
economic growth.
    Mr. Shelanski. Thank you. I think it is important that the 
agencies be able to carry out their statutory mandates and 
their objectives of ensuring a sound environment. But it is 
also necessary to ensure that, with all regulations, that where 
costs and benefits can both be taken into account, that these 
objectives are not achieved at any higher cost than is 
absolutely necessary.
    There was some discussion earlier in your opening 
statements about common sense. I could not agree more with the 
remarks that I heard. A common sense balance between achieving 
regulatory objectives and recognizing the very real costs that 
those regulations might impose is, I think, essential to the 
regulatory policy of this and other Administrations and to the 
kind of regulatory review that OIRA engages in.
    Chairman Carper. I think when I showed up in college in 
undergraduate or graduate school, I never saw a course listed 
for common sense. It is not the sort of thing you can sign up 
for and either audit or get a grade in. But just talk to us 
about your own life growing up and how you might have picked up 
some common sense along the way.
    Mr. Shelanski. Well, I think I need to give a lot of credit 
to the people sitting behind me to my left here. I think I had 
a lot of the same lessons that you described that you had 
growing up, Senator Carper. I was given the independence to 
make mistakes, but I was also reminded to ask questions about 
whether what I was doing made sense, to question myself on why 
I was taking the steps I was taking. I think the opportunity to 
grow up, to make mistakes, to chart my own course with a steady 
hand behind me helped me to develop some common sense.
    And in my work life, having to balance different 
perspectives, having to manage a substantial size staff, and in 
private law practice, understanding the real burdens that the 
legal process or the regulations that real companies were 
facing, or clients that I served, helped me to develop what I 
would call a common sense perspective and a balanced 
perspective.
    Chairman Carper. All right. Good. Thanks. I am going to 
stop here for now. Dr. Coburn stepped out of the room, and when 
he comes back, we will recognize him, but Senator Johnson----
    Senator Johnson. So it is my turn. Some day, Mr. Chairman, 
I want you listing all those secrets for 50 years of marriage. 
And, by the way, congratulations to both of you.
    Chairman Carper. Let me tell you another good one. This guy 
said to me, it had been 47 years and I said, where did you guys 
get married? and he said, ``We got married in Las Vegas.'' I 
said, where, and he said, ``One of those Chapels of Love.'' I 
said, you are kidding. Somebody got married there and stayed 
married for 47 years? He said, ``Yes.'' and I said, what is the 
secret? He said, ``When you know you are wrong, admit it. When 
you know you are right, let it go.'' [Laughter.]
    Senator Johnson. Well, it looks like you have the basis of 
a book. [Laughter.]
    Mr. Shelanski, the preparation materials that I have show 
that when we started actually keeping track of the number of 
rules the Federal Government has issued since 1976, we are up 
to 182,000 rules. As you approach this position, I mean, where 
would you even start? How would you go about prioritizing your 
actions in trying to get your arms around this regulatory 
burden, as Dr. Coburn talked about, $1.8 trillion? I mean, as 
we are all wrestling with how do we get economic growth, what 
might be causing a sluggish economy, I certainly look at that 
$1.8 trillion regulatory burden--I come from a manufacturing 
background--to understand how harmful it can be. I realize 
there are benefits. There is also real harm. Where do you 
start?
    Mr. Shelanski. Well, thank you, Senator Johnson. First of 
all, I think it is very important for the agencies and for 
OIRA, to the extent that it plays a role reviewing agency 
regulation, to listen carefully and to hear what the different 
stakeholders have to say.
    There are high costs to regulation, but I think there is 
only so much one can learn from looking at the cost side. The 
question is always whether the benefits that the regulations 
achieve are justified by those costs.
    In terms of where to start on the long list of regulations 
that are on the books and thinking about those rules, for 
example, in the process of retrospective review, I think that 
the prioritization and the approach would, in the first sense, 
be the primary responsibility of the relevant agency head. They 
are the ones who know best how the rules they have on the books 
fit with new rules they are putting in place and the whole body 
of rules that they have in achieving the objectives of their 
departments.
    But I think OIRA can help suggest methods for retrospective 
review, and one of the things I would look forward to doing, 
should I be confirmed as Administrator, is learning more about 
what role OIRA can play cooperatively with the agencies to get 
them to look at that body of regulation and--to the extent 
possible, while preserving the benefits that regulation 
brings--reducing its costs.
    Senator Johnson. You used the word ``listen,'' and I am 
sure in my excellent prepared material here from my staff, I am 
sure the statistic is in here. I do not have it at my hand. 
But, I think, over the years, we have actually reduced the 
number of instances where businesses are actually given the 
opportunity to comment on regulations. Would you be committed 
to make sure that businesses and affected stakeholders on any 
regulation are given that opportunity to comment on the 
proposed rules and regulations?
    Mr. Shelanski. Thank you, Senator Johnson. I share your 
viewpoint that transparency and the opportunity for the public 
to have notice and to comment on rulemaking procedures is 
extremely important, and the public, of course, includes all 
stakeholders, including businesses small and large. And it 
would be a priority of mine, should I be confirmed as 
Administrator, to ensure that insofar as possible, that 
opportunity was preserved and public participation took place.
    Senator Johnson. OK. I really want to encourage that, 
because it is extremely important. As Dr. Coburn was saying, we 
all have limited information, limited experience, and the 
people affected by regulations--certainly, I have come to 
realize that as a United States Senator to listen to the 
businesses coming in. I mean, I have no idea of the number of 
ways the Federal Government is harming businesses. Businesses 
do know that, so it is extremely important, not only to 
businesses, but, again, any stakeholder, that they are listened 
to very carefully before we go forward with regulations, and 
where we do not have all the input, maybe delay the 
implementation of those regulations.
    You talked earlier about retrospective reviews. I have 
proposed things like a Sunset Committee, whose only mandate 
would be to reduce--identify and actually eliminate laws that 
are harmful or no longer useful. The same with regulations and 
rules. We have had proposals for types of commissions to take a 
look at that, something like a Base Realignment and Closure 
(BRAC) Commission. We have had a hearing on a one in/one out 
rule like they had in Britain. I would tend more toward one in 
and about 10 out. Can you just comment on what of those 
approaches you might find interesting, that you might support?
    Mr. Shelanski. I think that I would look forward to 
understanding what specific proposals were on the table and to 
working with you and others in Congress in understanding what 
the concerns are and how various proposals might address those. 
So without commenting on any particular proposal that might be 
out there, I think this is an important area for the OIRA 
Administrator to focus on, to understand, and should I be that 
person, I would look forward to working with you and others on 
the Committee to understand your concerns and to make progress 
on these issues.
    Senator Johnson. Can you just speak a little bit to the 
point that both Dr. Coburn and I made in our opening 
statements, just about unintended consequences and how do you 
view those, how would you try and identify and quantify the 
unintended consequences of regulations.
    Mr. Shelanski. Thank you. Unintended consequences are 
critically important because regulation is often a very 
predictive exercise. And so it is important insofar as possible 
to think in advance about what the possible outcomes of 
regulation are and to think about what might be the possibility 
for unintended consequences that could be costly. So I think 
this would be an important thing to come out in the notice and 
comment period and in the agency rulemaking process, but I also 
think that retrospective review can play a very important role 
here. One of the valuable things that retrospective review 
could accomplish would be to identify rules that are having 
consequences other than those that were intended and might be 
having costs that are much higher than were anticipated.
    Senator Johnson. How do you view your relationship between 
OIRA and the Government Accountability Office (GAO)? We had 
Gene Dodaro here, and when we were talking about sequestration, 
for example, I asked Mr. Dodaro how many of the agencies are 
actually taking a look at all the good work that the GAO is 
doing in terms of duplication, and unfortunately, the answer 
was they do not look at it. How would you plan on interacting 
with all the good work, all the good information that GAO has 
actually produced in terms of trying to make the Federal 
Government more efficient?
    Mr. Shelanski. The GAO performs very important functions 
and adds a lot of value through the work that it does, and 
should I become OIRA Administrator, I would welcome the 
opportunity to work closely with GAO, and to the extent that 
they are producing valuable things that can help improve the 
regulatory process, I want to help those reports and those 
studies and the other functions that GAO is involved in have 
the broadest effect possible.
    Senator Johnson. Well, thank you, Mr. Shelanski and Mr. 
Chairman.
    Chairman Carper. Thank you.
    We have been joined by Senator Levin, one of the two 
strongest Detroit Tigers fans that you will find on Capitol 
Hill----
    Senator Levin. Second strongest, the Chairman being the 
strongest.
    Chairman Carper. They had a good night last night. Max 
Scherzer goes nine-and-oh. That is pretty good.
    Senator Levin. Yes, they won three-to-two.
    Chairman Carper. And on the softball side, we have these 
softball teams here. Most Senate offices have softball teams. 
Last night, we played Senator Coons, my colleague from 
Delaware. We are the Fighting Blue Hens in Delaware and the 
name of his team is the Angry Hens, and when they left, they 
lost 34 to 18, so they were really angry. [Laughter.]
    Senator Levin. Is this softball or football?
    Chairman Carper. It sounded like football, but it was 
softball.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you, Mr. Chairman, and welcome to you, 
Mr. Shelanski.
    My first question has to do with the delays in rules coming 
out of OIRA. We have now a situation where delays of agencies 
are chronic. They fundamentally undermine the agencies' 
abilities to effectively execute the responsibilities that 
those agencies have. Under the Executive Order (E.O.) Number 
12866, which is in effect, OIRA has 90 days to review a draft 
of a proposed or final rule. There is one 30-day extension that 
is available. As of May 14, 87 rules had been under review for 
more than 90 days. Fifty-one had been under review for more 
than a year. What is your plan to change that situation?
    Mr. Shelanski. Thank you, Senator Levin, because I 
absolutely share the concern that you have just raised about 
timeliness. Not yet having been at OMB or in OIRA, I cannot 
comment on what might have led to extended review of any 
particular rule or what might have led to the number of rules 
that are under an extended review period. But I recognize that 
Executive Order 12866 establishes the initial 90-day review 
process and it would be one of my highest priorities, should I 
be confirmed as Administrator, to try to improve the timeliness 
and the notice and certainty that lends to the regulatory 
environment.
    Senator Levin. Do you agree with the OMB Director Burwell 
that there is a long tradition and unique role of independent 
agencies and that the importance of their continued 
independence cannot be exaggerated?
    Mr. Shelanski. Senator Levin, I currently work at an 
independent agency. In fact, it is the second independent 
agency that I have worked at in my career. And I certainly 
value and recognize the importance of that independence. Should 
I be confirmed as Administrator, I would look forward to 
understanding the concerns regarding administrative agencies 
that various Members of the Committee have and to working with 
you and your office on those concerns.
    Senator Levin. And you are talking about independent 
agencies?
    Mr. Shelanski. Yes, sir, I am.
    Senator Levin. The Administration has expressed its 
opposition to being directed to pass judgment on the quality of 
the independent agencies' cost-benefit analyses. Do you agree 
with that?
    Mr. Shelanski. I look forward to understanding more about 
what might lie behind efforts to give the Administration that 
authority to review independent agencies. It is something that 
I think I would have a better ability to comment on after some 
experience with the OIRA review process. But coming as I do now 
from an independent agency, I very firmly value that 
independence and the variety of approaches that emerge from the 
independence that those agencies have.
    Senator Levin. If you have any additional thoughts about 
the response to that question in the next week or so, will you 
give us an expansion for the record?\1\
---------------------------------------------------------------------------
    \1\ Mr. Shelanski response to Senator Levin's question appears in 
the Appendix on page 88.
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    Mr. Shelanski. Yes, Senator Levin.
    Senator Levin. Cass Sunstein, during his confirmation 
hearing before this Committee, said that, quote, ``Cost-benefit 
analysis is a tool meant to inform decisions. It should not be 
used to place regulatory decisions in an arithmetic 
straightjacket,'' close quote. Do you agree with that?
    Mr. Shelanski. Yes, sir, I agree with Cass Sunstein's 
remarks in that regard.
    Senator Levin. Thank you very much, and thank you very 
much, Mr. Chairman.
    Chairman Carper. Thanks, Senator Levin.
    Going back to the backlog that we talked about, and you 
said it would be one of your top priorities, I am reminded of a 
meeting I had early in my time in the Senate. I think I had 
been in the Senate a couple of years. I had been working on 
Clean Air legislation and multi-pollutant legislation and had a 
number of utility Chief Executive Officers (CEOs) in to see me 
and my staff. We were talking about the legislation we were 
trying to do, whether legislation was appropriate, whether we 
should rely on regulations.
    Anyway, at the end of about a 1-hour meeting, one of the 
utility CEOs--I forget where he was from, he was from someplace 
down south, sort of a curmudgeonly old guy, and he said to me, 
``Look, Senator, here is what you should do. You should tell us 
what the rules are going to be, give us a little flexibility, a 
reasonable amount of time, and get out of the way.'' That is 
really what he said. ``Tell us what the rules are going to be, 
give us a reasonable amount of time, some flexibility, and get 
out of the way.'' I thought that was pretty good advice for us 
and might be pretty good advice for you as you lead OIRA.
    Dr. Coburn is back. I am going to go make a phone call and 
will be right back. Dr. Coburn.
    Senator Coburn. Thank you. I want to spend a minute with 
you talking about reviewing certain--there is a regulation 
called the Renewable Fuel Standards. It is a pretty 
controversial thing. But what is getting ready to happen in our 
country is all our refiners are going to go broke because 
mileage is going up. We have now seen fuel credits become a 
market-traded item. So what we are going to see is two 
refineries in Oklahoma close within a year, year and a half, 
because they cannot afford to buy the Renewable Fuel Credits.
    So we have a regulation out there that is actually going to 
kill our ability to provide gasoline to the country, even with 
an ethanol blend, but yet we are going to lose thousands and 
thousands and thousands of jobs because we have not adjusted 
that or given a waiver to it and we have allowed a market, 
because they see a shortage of those credits now, to bid the 
price up.
    So, for example, we have two refineries in Oklahoma that 
will close within a year, because they are losing $20, $30 
million a year now, not on processing gasoline, on buying 
Renewable Fuel Credits because they are just refiners. They are 
not fully integrated down to where they have a retail thing. So 
what is going to happen is we are going to be losing jobs, 
losing refineries, which we have not built a new refinery in 
this country in years, and these are small refineries, but yet 
they employ a lot of people and have a great job, and then we 
are going to end up with a higher price.
    Now, some in the pro-environmental community would love to 
see that, but what are we going to supply transportation with 
in this country when we run the refineries out of business? We 
do not have an electric vehicle. You are still going to use 
some type of carbon-based fuel. But the disjointment of having 
this standard without adjusting it, because we have issued 
regulations that now the marketplace, because there is a 
shortage, has bid up the price way high and we have not 
adjusted that to blow the bottom out of it.
    So that is the kind of thing I am worried about, the things 
that we have a regulation and we are not looking at, we are not 
re-looking at it----
    Mr. Shelanski. Yes.
    Senator Coburn. And we have had hearings in the House this 
last week. There are going to be hearings in the Senate. But 
the fact is, all it would take is tomorrow to gut that 
speculation based on a government-created problem that is going 
to kill jobs. It would take one adjustment to that regulation 
by Environmental Protection Agency (EPA) and all that would go 
away, and it will not make any difference in the long term in 
terms of our environmental consequences because we are still 
going to have ethanol blended into our fuel. But yet we have 
created a regulation that creates a problem that is going to 
eliminate jobs. Any thoughts about that?
    Mr. Shelanski. Senator Coburn, I think you raise an issue 
that is a vitally important one. One of the things that OIRA is 
charged with doing under the Executive Order is to ensure that 
the regulations that are brought to it for review have looked 
carefully, where permissible under the statute, at the costs 
and benefits, and where alternative approaches and regulatory 
flexibility can play a role in reducing those burdens without 
overly compromising the benefits and the objectives. Those are 
things that, under the Executive Order, are to be taken into 
account and that OIRA is charged with ensuring have been 
adequately taken into account.
    Senator Coburn. Well, there is a good one for you to look 
at as soon as you get confirmed.
    Mr. Shelanski. Thank you.
    Senator Coburn. Will you commit to ensuring that 
significant policy and guidance documents undergo interagency 
review as directed by E.O. 12866 and E.O. 13563, including 
interagency review, before documents are released to the 
public?
    Mr. Shelanski. Senator Coburn, it is my view that substance 
rather than labels should dictate OIRA's review. And where 
there is something that is labeled a guidance document or 
Frequently Asked Questions or whatever that document might be 
labeled, even if it is not labeled a regulation, should it 
impose burdens and have regulatory effect, I believe that is an 
appropriate area for OIRA to play a role.
    Senator Coburn. So you will demand that it has the 
interagency reviews before we shoot that stuff out there?
    Mr. Shelanski. Should I be confirmed as Administrator, I 
will look at how OIRA handles things like guidance documents 
and will look to ensure that where those guidance documents 
create regulatory burdens, they go through the same kinds of 
processes that regulations would go through--cost-benefit 
analysis, other types of review that OIRA does, and ensuring 
that there is not conflict, tension, or duplication with other 
agencies through the interagency review process.
    Senator Coburn. OK. Will you ensure that the agencies 
follow the minimal standards described in the OMB Bulletin for 
peer review when developing and finalizing influential 
scientific information that will be used to support 
rulemakings?
    Mr. Shelanski. Thank you, Dr. Coburn. Clearly, OIRA has a 
cooperative role, and scientific determinations, regulatory 
priorities, issues like that are, in the first and main 
instance, the province of the agency heads. Under the Executive 
Orders, OIRA does play a role in ensuring that the agencies 
have observed prior proper process and that the evidence they 
have relied on is sound and meets applicable data quality 
standards. Should I be confirmed as Administrator, I would 
continue that review work.
    Senator Coburn. So OMB has issued guidance on rulemaking, 
that it should go under peer review, and what I am wanting you 
to say is, yes, you will make sure it goes under peer review.
    Mr. Shelanski. I will make sure that the OMB and Executive 
Order rules are followed to the best of my ability, should I be 
confirmed.
    Senator Coburn. OK. The President reaffirmed the principle 
of sound regulations with Executive Order 13563. Our regulatory 
system must protect public health, welfare, and safety, and our 
environment, while promoting economic growth, innovation, 
competitiveness, and job creation. How do we strike that 
balance? That is your job. I mean, he put it in a nutshell. The 
question is, how do you do that?
    Mr. Shelanski. Yes. So that is, I think, at the heart of 
what the Executive Order is aimed to achieve, and in the first 
order, through the rulemaking processes that the agencies 
undertake, these are principles that the agencies are directed 
to follow and that OIRA in its review of the agency regulations 
will try to ensure.
    I think that the way that this gets implemented in practice 
is through a number of functions that OIRA undertakes. The 
first is the cost-benefit analysis, where legally permissible, 
and OIRA will ensure that has been done as well as possible.
    Second, through ensuring that regulatory flexibility and 
regulatory alternatives have been properly considered, to the 
extent that they are consistent with the statutory objectives.
    And, finally, through the retrospective review process, by 
further institutionalizing and fostering that practice to make 
sure there are not undue burdens.
    Senator Coburn. OK. In an ideal world, we would pass laws. 
The agencies would endeavor to implement the legislation, 
looking at congressional intent, by promulgating regulations 
based on the authority given to them. The problem is, we do not 
live in an ideal world. So as the Administrator of OIRA, how 
will you handle regulations that seem to rise not out of new 
statutory authority, but out of preferences at agencies?
    Mr. Shelanski. I think it is always important for the 
agency heads to be able to set their priorities consistent with 
the statute. Certainly, were I to be confirmed as Administrator 
of OIRA, I would look forward to working with the relevant 
agencies and with the staff at OMB to understanding what kind 
of legal review is relevant to the OIRA analysis and to 
ensuring certainly that the laws and regulation related to 
regulatory process to which the agencies are bound have been 
observed.
    Senator Coburn. I will submit the rest of my questions for 
the record.
    Chairman Carper. All right. We have been joined by Senator 
Portman. I will just say to Isaac--Isaac, your Dad has been 
nominated for this job in the Office of Management and Budget 
and there are a number of senior positions there, but the 
person who runs it is the Director of OMB. Currently, it is a 
woman named Sylvia Mathews Burwell, who is brand new but we 
think she is going to be really good.
    I am going to say 8 years or so ago, President George W. 
Bush nominated a Congressman from Ohio named Rob Portman to be 
the OMB Director and later Trade Representative, and he did 
well enough at those jobs that the people of his State let him 
be a Senator. So now he has the privilege of serving here with 
Tom Coburn and I, Ron Johnson, Carl Levin and others.
    But he brings a lot of value to this Committee and to the 
Senate. He would probably be a good guy to go to for some 
advice, if you are lucky enough to get confirmed. Rob.

              OPENING STATEMENT OF SENATOR PORTMAN

    Senator Portman. Thank you, Mr. Chairman. Thank you for 
having the hearing. You and Senator Coburn have been focused on 
these issues long before you were Chair and Ranking Member and 
it is an important responsibility.
    I would say to your son who is here, your Dad has been 
nominated for the most important job in Washington that nobody 
has ever heard of, and you have probably found that when you 
talked to your classmates about it. They are, like, ``What? Oh-
what?'' [Laughter.]
    But it is a really important job. So to Professor 
Shelanski, thank you for your willingness to step up and be 
considered for this job.
    In my view, again, it is a job that is much more important 
than most people realize because it affects the economy in very 
fundamental ways. It affects all of us as citizens. The job is 
to ensure there is a really rigorous cost-benefit analysis 
applied and that we use the least burdensome alternatives and 
to bring as many agencies as possible into that, and a number 
of us are working, including the Chair and Ranking Member, on 
trying to ensure that independent agencies are brought into 
more discipline in terms of the cost-benefit analysis, as well. 
But even on existing Executive Branch agencies, there is much 
more work to be done.
    Sometimes, the OIRA role is viewed as very technical, and I 
agree that it is, but ultimately, it is about ensuring that 
these big rules do have a positive rather than negative impact 
on our economy and that they do derive benefits.
    Let me get into a couple of questions, if I could. One is 
about regulatory burden generally. The White House has 
repeatedly stated it is working hard to, and I quote, 
``minimize regulatory burdens and avoid unjustified regulatory 
costs.'' That has certainly been a common refrain, going back 
to the Reagan Administration, for OIRA. But I would say on a 
real measure of regulatory output, which would be economically 
significant rules--those are rules, as you know, with over $100 
million of impact on the economy--if you look at President 
Obama's first term, he was significantly more aggressive with 
regard to, again, economically significant rules than any 
predecessor since we have kept records.
    In fact, according to the Administration's own estimates, 
the cost of rules issued in 2012 alone exceeded the costs of 
all rules in the entire first terms of Presidents Bush and 
Clinton combined. So 2012 alone, major rules had more impact 
than the entire first term of President Bush and President 
Clinton combined.
    So I would start by asking a very simple question. Can we 
do better than that? And if confirmed, can you improve on that 
record in terms of minimizing the burden of regulations on our 
economy?
    Mr. Shelanski. Thank you very much, Senator Portman. Should 
I be confirmed as Administrator, it would be one of my highest 
priorities to ensure that OIRA fully conducted the kinds of 
cost-benefit analysis that the Executive Orders refer to, and 
where permissible under the statute, to ensure that regulations 
are no more burdensome than essential to achieve their 
benefits. And it would be my hope that through that process, 
regulatory burdens could be reduced.
    Senator Portman. My second question would be about the 
look-backs. As you know, back in January 2011, the White House 
announced they were going to do a look-back. I strongly 
supported that. I think it is a good idea. It is a house-
cleaning exercise. I would say it is required by law and has 
been since 1981.
    But I have also followed the results. Out of roughly 90 
rule changes undertaken so far as part of this regulatory look-
back, the estimated compliance cost savings is $3.3 billion, 
and that is according to analysis by the American Action Forum 
of Agency Data that was published in the Federal Register. That 
is a lot, and that is good.
    However, if you put that figure in context, it is less 
encouraging. According to this data, last year alone, one year, 
the Administration finalized new regulations with costs of $236 
billion, again, based on numbers reported by the agencies 
themselves. So last year alone, we added more than 70 times the 
reported cost savings from all of the regulatory look-back.
    The same report, by the way, said that even if you look at 
those 90 rules undertaken by agencies as part of regulatory 
look-back, the new costs imposed totaled $11 billion. In other 
words, the costs of regulations attributed to look-back 
actually exceeded the cost savings by nearly $8 billion. I do 
not think that is eliminating red tape.
    These estimates are based, by the way, on timeframes 
provided by the agencies themselves. Some of the costs are 
annualized, some for a 5- or 10-year period, and that has not 
been standardized. We do need more uniform cost reporting 
standards, in my view, to be able to really understand an 
apples-to-apples comparison.
    Anyway, you had said in your prehearing questions you 
intended to emphasize this important effort of retrospective 
review. How do you plan to encourage agencies to focus more on 
making sure existing regulations are working and paring back 
those that are unnecessary? I think this area is one where we 
could really benefit from more transparency. Again, would you 
be willing to commit to clearly report and track on reginfo.gov 
the actual results of the regulatory look-back initiative, 
proposed and the final, including quantified cost savings from 
it and maybe a regulatory look-back dashboard that tracks 
annualized savings so, again, we can have a comparison on an 
annual basis?
    Mr. Shelanski. Senator Portman, we come from a common 
viewpoint on the importance of retrospective review and trying 
to reduce the costs of regulation. And should I be confirmed as 
Administrator, a very high priority for me would be developing 
working relationships with the agency heads and working closely 
with the staffs of OIRA and the agencies to understand how the 
regulatory look-back could be further institutionalized, and I 
would be very interested in understanding ways that the 
progress of the regulatory look-back and of retrospective 
review could be better tracked and understood for you and for 
the public.
    Senator Portman. And, specifically, would you be willing to 
commit to track on reginfo.gov the results of the look-back so 
there is more transparency?
    Mr. Shelanski. Should I be confirmed as Administrator, I 
would commit to looking into what the possibilities are for 
using reginfo.gov in relation to the retrospective review 
process. It is something that I will need to learn more about.
    Senator Portman. All right. If you have further thoughts on 
that prior to your confirmation,\1\ though, we would appreciate 
hearing from you, if you do not mind looking into that further, 
because I do think that would be very helpful to those of us 
trying to figure out whether it is working or not.
---------------------------------------------------------------------------
    \1\ Mr. Shelanski response to Senator Portman's question appears in 
the Appendix on page 88.
---------------------------------------------------------------------------
    Do you believe that regulatory cost-benefit analysis with 
review by OIRA is important, and if so, do you think 
independent agencies ought to be brought under the cost-benefit 
analysis?
    Mr. Shelanski. Thank you, Senator Portman. I think the 
question of independent agencies is a very important one. I 
would start by saying that I think cost-benefit analysis is an 
extremely important, valuable tool that could be used by any 
entity that is engaged in regulation. Should I be confirmed as 
Administrator, I would look forward to understanding better and 
working with you and other Members of the Committee on the 
specific concerns involving independent agencies and what the, 
indeed, costs and benefits of bringing independent agencies 
under OIRA types of mandates would be.
    Senator Portman. Would you be willing to commit today to 
work with those of us in Congress who are proposing legislation 
in this area to try to improve the economic analysis by 
independent agencies?
    Mr. Shelanski. One of my priorities, should I be confirmed 
as Administrator, would be to have open communication with you 
in Congress and would always be available to discuss matters of 
concern to you and OIRA.
    Senator Portman. One thing, and my time is ending here and 
I appreciate the Chairman giving me a little extra, but the 
legislation that this Committee is looking at extends 
requirements to independent agencies as the President has 
proposed, but it makes clear that OIRA would not have the power 
to stop or do the return of regulations in that they are 
independent agencies. So transparency and public scrutiny would 
be the main source of accountability to ensure that independent 
agencies comply. Just so you understand, that is the 
legislation that we are putting forward. We think it is 
consistent with what the President has proposed in his 
Executive Order and certainly what he has said publicly. 
Increasingly, again, so many of these major rules are coming 
from independent agencies, it seems to us that makes sense to 
include them within a basic cost-benefit analysis and least 
burdensome alternative.
    Thank you, Professor, and I look forward to working with 
you.
    Mr. Shelanski. Thank you, Senator Portman.
    Senator Portman. Thank you, Mr. Chairman.
    Chairman Carper. Senator Portman, thanks for all those 
different hats you have worn and especially for wearing this 
one with us today.
    Senator Portman. You have got it.
    Chairman Carper. A couple more questions, if I could. In 
some instances, there is robust science, as you know, 
identifying a public health need for a regulation, but it is 
difficult to quantify the benefits in economic terms. I 
mentioned earlier my comments with those utility CEOs about air 
emissions, and one of the emissions that we discussed that day 
was mercury emissions from coal-fired utility plants. The 
science is very clear that mercury pollution impairs children's 
brain development and we need to act to clean it up and we have 
to a good extent. But it is difficult to quantify the long-term 
economic benefits of healthier, smarter kids, like your son.
    Let me just ask you if you believe that OIRA should give 
deference to the regulatory agency in a case like this when the 
health benefits are clear, but the economic data not so clear.
    Mr. Shelanski. Thank you, Chairman Carper. This is, 
obviously, a central question. I do not believe that it is the 
role of OIRA, or, should I be confirmed, the OIRA 
Administrator, to substitute its judgment about science and 
regulatory priorities for those of the expert agency staff and 
the agency heads. I do believe that it is the job of OIRA to 
ask hard questions and to make sure that the evidence relied on 
is sound and meets applicable standards.
    With regard to the cost-benefit analysis itself, as I 
stated before in response to a question from Senator Levin, 
cost-benefit analysis is critical. As much as can be quantified 
in the analysis of a regulation should be quantified. But there 
are certainly some things that cannot be quantified. Indeed, 
sometimes the major cost or the major benefit of a regulation 
may be not easily quantifiable, yet it may be the major effect. 
And in those cases, I think that the regulatory review needs to 
recognize those effects, explain what can be quantified and 
what cannot, and where the judgment of the benefits is based on 
sound science, sound analysis, it should pass review.
    Chairman Carper. All right. Thank you. I am going to ask a 
related question, and you have already answered it in part, but 
I am going to ask it anyway. Maybe you can add something to 
what you have said.
    As you know, some agencies have been directed by Congress 
to ignore economic impacts. One such example is Congress' 
direction to EPA under the Clean Air Act to establish air 
pollution health standards. We call them the National Ambient 
Air Quality Standards. In your earlier answers to the 
Committee, I think you stated that in such situations, you 
believe that--and this is a quote--``the statute requires a 
different way of making regulatory decisions. OIRA would adhere 
to those criteria when reviewing rules,'' close quote. Could 
you just explain just a bit more your answer, and do you 
believe that OIRA should give deference to an agency in these 
circumstances?
    Mr. Shelanski. Thank you. That quote, I believe, is a 
quote. It certainly should be. It sounds like it certainly is 
exactly my view, that should I be confirmed as Administrator, I 
and OIRA would follow the law in terms of the applicable 
analysis.
    Of course, OIRA review is not limited to cost-benefit 
analysis. There are other parts of review. There is the 
interagency review process to ensure that a rule is not 
duplicative, to ensure that a rule is not in conflict with 
another agency's rule. So there would still be grounds for OIRA 
review and a role in the process for the office even if cost-
benefit analysis as applied to other kinds of rules might be a 
lesser part of that.
    I would also add that ensuring that data quality, peer 
review, and other applicable standards have been met would be 
part of the OIRA review process.
    Chairman Carper. OK. Thank you. Let us talk a little bit 
about information management and privacy. I want to focus for a 
minute or two on the responsibilities of the OIRA Administrator 
with regards to information.
    Federal agencies are producing, as you know, collecting, 
and storing more information than ever before. This deluge of 
information allows agencies to better meet their missions in 
many respects, but also comes with significant costs and 
challenges. What do you see as the biggest challenges that 
agencies face in managing the vast amounts of information they 
now have? And, if confirmed, what would be your priorities in 
helping agencies to manage their information?
    Mr. Shelanski. Chairman Carper, I think that the ``I'' in 
OIRA is vitally important. We have been talking a lot this 
morning about regulation, but should I be confirmed as 
Administrator, the ``I'' will certainly receive its full 
measure of attention because of what you just said.
    Agencies across the Federal Government are wrestling with a 
variety of challenges and issues related to data. Those would 
include how to balance making data available in usable form to 
the public with privacy considerations and needs for 
confidentiality where those apply. Indeed, in my current role 
at the Federal Trade Commission, we often deal with challenges 
in cases that we review, mergers that we might review, 
investigations we undertake, on how to ensure parties that 
sensitive data that they are handing over to the agency will be 
protected. But at the same time, there is the balance of 
deciding what information can and should be released to the 
public so that the enforcement process is as transparent as 
possible, and what information can and should be shared with 
other agencies that may have an interest in the process.
    These are the kinds of challenges that government agencies 
face, and should I be confirmed as Administrator, I would look 
forward to working with the Director of OMB and other agencies 
in the intergovernmental process that is contemplated under the 
Privacy Act for balancing sound privacy policy with public 
transparency and making data available insofar as possible to 
the American public.
    Chairman Carper. OK. Thank you. I will stop there for now. 
I have a couple more questions I want to ask, but let me yield 
back to Senator Portman, if he has some more questions, and 
then I will close it down. Thank you. Senator Portman.
    Senator Portman. Thank you, Mr. Chairman.
    Let me just follow on. My ears perked up when you were 
talking about information, and I do think that we can do 
better. As you know, for nearly three decades now, OIRA 
Directors and OMB Directors of both parties have published 
their plans for new regulations. They do so twice a year, and 
it is an incredibly important opportunity for citizens to see 
what is coming up and prepare for it. That transparency 
measure, by the way, is required under President Clinton's 
Executive Order and also by the Regulatory Flexibility Act, so 
both by E.O. 12866 and the Regulatory Flexibility Act. And it 
calls for a publication of a regulatory agenda in the spring 
and one in the fall and it lets people know what is in the 
pipeline, which, I think, is incredibly important, including 
knowing what the potential compliance costs might be on small 
business.
    As its title suggests, the spring regulatory agenda is 
typically published in the spring. That is April or May. The 
fall is usually October or November. Last year, the spring 
agenda was never released. There was no spring agenda, and it 
was the first time in decades, to my knowledge. I wrote two 
letters to the President about this, never heard back. I did 
not even get the courtesy of a response. Instead, during the 
election year, the regulatory agenda was released, but not in 
the spring, not in the fall, but in the winter, after the 
election, on Friday, December 22, a day when people were 
concerned about other things, like the holidays.
    In your briefing for this hearing, have you learned why OMB 
decided to skip the spring regulatory agenda and push back the 
fall regulatory agenda? Does this represent a policy change? 
Are we seeing less transparency from an Administration that has 
claimed that it is the most transparent in history?
    Mr. Shelanski. Thank you, Senator Portman. I share your 
concerns with transparency and the need to publish the 
regulatory agenda. In my preparation for these hearings, being 
outside of OMB, I have not learned about why one agenda was not 
published and about the timing of other agendas.
    But I can much more easily answer your other question, 
about a policy change. Should I be confirmed as Administrator, 
I think it is vitally important that Americans, businesses, 
those who would benefit from regulation, and those who would 
bear its costs, have notice of what is in the regulatory 
pipeline. It will be among my highest priorities to ensure that 
the regulatory agenda is published insofar as possible twice a 
year and in a timely fashion.
    Senator Portman. OK. I would just make the point, again, it 
is required by law. It is required by Executive Order. And 
insofar as possible is better than saying we are going to do 
what we did last year, but what this Committee, I think, would 
like is a commitment that you will, in fact, follow the law, 
and in the spring publish an agenda and in the fall publish an 
agenda. If you are prepared to make that commitment today, that 
would be very helpful to me and, I know, other Members of this 
Committee. If not, then I would ask you to think a little about 
this prior to your confirmation vote and give us an answer.
    Mr. Shelanski. Thank you, Senator Portman. Should I be 
confirmed as Administrator, I look forward to understanding the 
legal obligations with regard to the regulatory agenda and to 
following the law on the regulatory agenda and would look 
forward to working with you and others on the Committee, 
hearing your concerns if there are concerns that those legal 
obligations are not being lived up to.
    Senator Portman. OK. Thank you. Thank you, Mr. Chairman.
    Chairman Carper. Let me ask you, have you ever worked with 
Sylvia Burwell, the OMB Director? How do you know her?
    Mr. Shelanski. Chairman Carper, I have not yet had the 
opportunity to work with her. We had a brief meeting some time 
ago. We ran into each other in the hallway the other day and 
had a wonderful chat and she gave me a hearty ``good luck'' 
shout out this morning as I was leaving the building. 
[Laughter.]
    She strikes me as very impressive and I look forward to 
working with her.
    Chairman Carper. I once called Erskine Bowles, who is an 
old friend, when she was nominated by the President for this 
job and I said, Erskine, what can you tell me about Sylvia 
Burwell? He said, ``You mean Sylvia Mathews Burwell?'' I said, 
yes. And he said, ``I have known a lot of people who have good 
interpersonal skills, who are just really good at working with 
people.'' He said, ``She is really exceptional.'' He said, ``I 
have known a lot of smart people, a lot of really bright people 
in my life, and,'' he said, ``she is scary smart. And,'' he 
said, ``I have known people who are good at getting things 
done. You give them a job, they get it done. And,'' he said, 
``she is the best.''
    She was his deputy when he was Chief of Staff to President 
Clinton, and later, she was the Deputy OMB Director for, I 
think, the last 2 years of the Clinton Administration. But, he 
said, ``I have known people good at one of those three 
things.'' He said, ``I have never known anybody who was as good 
at all three.''
    So we are encouraged that the President has nominated her. 
We got her confirmed 96 to zip and we are working on getting a 
deputy in there now. I think we have hotlined it. I do not know 
if Senator Portman is aware of that. I think we hotlined Brian 
Deese's name yesterday or the day before and we hope to get him 
cleared, as well.
    Let me ask another question or two and then we will call it 
quits. But as Administrator of OIRA, you would play a 
significant role, as you may know, in the protection of 
personal privacy by the Federal Government and oversee numerous 
regulations that protect the privacy rights of millions of 
Americans. I believe that more can be done to protect personal 
information. I hope that privacy protection will be a priority 
of OIRA under your leadership.
    Let me just ask, as OIRA Administrator, how would you 
approach the challenge of privacy and how would you balance the 
need to protect personal information with the need to ensure 
government transparency?
    Mr. Shelanski. Thank you, Senator Carper. Mr. Chairman, 
this is one of the most important balances that I think a lot 
of Federal agencies are facing today. As I mentioned before, I 
think that balancing privacy, data security, and public access 
and transparency is quite important. I would look forward to 
working with Director Burwell and others in the government in 
the formulation of privacy under the Privacy Act, and it would 
certainly be, should I be confirmed as Administrator, a very 
high area of policy priority for me, given how vital it is for 
Americans both to have access to government data so they 
understand what their government is doing, but also to be 
confident that in submitting data to their government, that 
which should be kept private is kept private.
    Chairman Carper. All right. OIRA also plays a role in 
coordinating and overseeing policies and practices across 
agencies that allow greater public access to information. What 
will be your priority in fulfilling these functions of the 
office, and generally, what role do you believe OIRA should 
play in promoting greater transparency governmentwide and what 
approaches would you take to improve government transparency?
    Mr. Shelanski. Chairman Carper, I would look forward to 
working with the Chief Information Officers (CIOs) of the 
different agencies, and with the Chief Technology Officer in 
the Administration, to try to ensure that when the public seeks 
access to information and to data, as, for example, they can do 
from their home computer with the work of OIRA and other 
agencies, that they obtain data that is clear, understandable, 
and in usable form, to the extent possible. There is still a 
lot of coordination and progress to be made in this area and it 
is an area in which I would look forward to working with others 
in the relevant agencies and with the Director of OMB and the 
CIO Council to make progress on.
    Chairman Carper. OK. Two more and we are done.
    In your answers to prehearing policy questions from our 
Committee, you said you would seek to have a collaborative and 
a consultative relationship with the agencies, including 
informal consultation with agencies earlier in the rulemaking 
process when it would be useful. I commend you for that. What 
will you do, if confirmed, to ensure that OIRA is taking the 
appropriate role during these early consultations with agencies 
and to ensure transparency prior to formal review?
    Mr. Shelanski. Thank you, Chairman Carper. One of the 
things that I look forward to understanding and learning more 
about, should I be confirmed as Administrator, is exactly how 
interactions with the agencies work and where and when it might 
be appropriate for informal and early review to take place. But 
what I mean by that is where informal and early review would 
make the regulatory process more efficient and would be of 
benefit to the agencies.
    It is not, in my view, and should I be confirmed as 
Administrator would not be my view, a place for the OIRA 
Administrator to put the OIRA Administrator's policy 
preferences and agenda in the place of those of the agency 
heads. So I think it is extremely important that kind of 
consultation and review be, as I said, collaborative and be 
something that is desired by and found to be helpful by the 
agency heads, and is not a vehicle for supplanting agency 
policy priorities.
    Chairman Carper. OK. The E-Government Act required the 
development of a system for finding, for viewing, and for 
commenting on Federal regulations. The goal was not just 
transparency, but to also give individual citizens the 
opportunity to easily comment on proposed regulations that 
would affect their own daily lives. What are your thoughts, if 
you have some, on regulations.gov, and what will you do as OIRA 
Administrator--what would you do as OIRA Administrator to 
enhance the ability of citizens to view and to actually comment 
on regulations?
    Mr. Shelanski. Thank you, Chairman Carper. Through 
reginfo.gov and through regulations.gov, there is a lot of 
opportunity for every American to learn a lot about the 
regulatory process, what is in the pipeline, and what is going 
on. I look forward, should I be confirmed as Administrator, to 
ensuring that these systems remain as useful and as helpful to 
Americans as possible because I agree completely that American 
citizens must be able to comment on regulations, both those who 
would benefit and those who would bear the costs.
    I would add that, in a similar vein, under Executive Order 
12866, anybody can request meetings with OIRA in order to 
express their views, and again to make clear that means anybody 
on all sides of the debates, and that is another vehicle 
through which transparency can be brought into the review 
process.
    Chairman Carper. Senator Portman, anything else you would 
like to bring to the table?
    Senator Portman. Thank you, Chairman.
    Chairman Carper. OK. Thanks. Thanks so much for being here.
    As you go forward, if you are confirmed, and I hope you 
will be, I would urge you to take advantage of his counsel from 
time to time. He will not steer you wrong, at least not too 
often, so----
    Mr. Shelanski. It would be an honor.
    Chairman Carper. The last thing I want to ask you, this is 
just sort of an informal question, but when you think about 
this job and you think about the kind of not just 
qualifications on a resume but think of the kind of qualities 
that we should look for--personal attributes and leadership 
skills that we ought to look for, the President should look for 
and we should look for, for someone who is going to be serving 
in this post--what might be some of those?
    Mr. Shelanski. Well, I will tell you, I think one of the 
most important things is the ability to lead a staff and to 
work well with a variety of constituencies. There is a lot of 
analytic work and a lot of technical work that goes into what 
OIRA does. But this is a hard job and it is a small office that 
tries to do a lot. And the way that a small office does a lot 
is when there is good leadership and the leadership has the 
confidence of the staff so the staff feels that their 
incredibly hard work is going toward a productive direction.
    And it is very important that those who are affected by and 
part of the process feel like the process is one that is 
working well, and when they are told something, it is the truth 
and that they can have confidence in who is running that 
process, because without that, there are slowdowns, there is 
reservation, there is circumvention of the process. And OIRA 
has to coordinate so many moving parts, I think that there is a 
risk that the machine could simply break down.
    So as important as it is that the Administrator of OIRA has 
the analytic skills to be sure that review is being undertaken 
according to high quality standards, I think it is also 
important to make sure that they will be able to build the 
relationships and manage the office and those offices' 
relationships in a way that it will be successful in its many 
missions.
    Chairman Carper. I just want to say on a personal note, 
Senator Portman and I have, in our personal lives, we have 
children. They are a little bit older than your son, but we 
love being dads and are looking forward to Sunday, Father's 
Day. You have a young son here who is, what, 14? Is that what 
you said? Tell us a little bit about him.
    Mr. Shelanski. Well, he is a remarkable kid, but I guess 
most dads would say that. We talked about common sense. For a 
14-year-old, I think he is doing pretty well on the common 
sense front. But he is a smart kid, a lot smarter than I am. 
Were he a little older, I think he would certainly be in this 
seat instead of me. And when I talk about a kid who gets along 
with folks and can build those kinds of relationships that get 
people moving in the same direction, he is that kid. And he is 
a heck of a good athlete, a lot better than I ever was.
    Chairman Carper. What sports?
    Mr. Shelanski. What sports? Well, he is mostly a 
competitive fencer----
    Chairman Carper. Whoa.
    Mr. Shelanski. And he is a pretty darn good soccer player.
    Chairman Carper. No kidding. You do not meet many 
competitive fencers these days.
    Mr. Shelanski. You do not want to try to steal anything off 
of his plate. [Laughter.]
    Chairman Carper. All right. Well, I just want to say, 
Isaac, thanks for your willingness to share your Dad with us. 
Nicole, thank you for your willingness to share him with the 
people of our country. And to Mom and Dad, thank you for 
raising him, educating him, and imparting in him some of the 
values that we have talked about here today.
    The hearing record will remain open until noon tomorrow--
that will be June 13, at 12 p.m.--for the submission of 
statements and questions for the record.
    If there is nothing else to be said, and hearing nothing 
else, we are going to adjourn this hearing. Thank you so much.
    Mr. Shelanski. Thank you.
    [Whereupon, at 11:25 a.m., the Committee was adjourned.]


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