[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
FEDERAL GOVERNMENT ON AUTOPILOT:
DELEGATION OF REGULATORY AUTHORITY
TO AN UNACCOUNTABLE BUREAUCRACY
=======================================================================
HEARING
BEFORE THE
EXECUTIVE OVERREACH TASK FORCE
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
MAY 24, 2016
__________
Serial No. 114-79
__________
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
LAMAR S. SMITH, Texas ZOE LOFGREN, California
STEVE CHABOT, Ohio 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 HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan
Shelley Husband, Chief of Staff & General Counsel
Perry Apelbaum, Minority Staff Director & Chief Counsel
------
Executive Overreach Task Force
STEVE KING, Iowa, Chairman
F. JAMES SENSENBRENNER, Jr., STEVE COHEN, Tennessee
Wisconsin JERROLD NADLER, New York
DARRELL E. ISSA, California ZOE LOFGREN, California
LOUIE GOHMERT, Texas SHEILA JACKSON LEE, Texas
JIM JORDAN, Ohio HENRY C. ``HANK'' JOHNSON, Jr.,
TED POE, Texas Georgia
JASON CHAFFETZ, Utah JUDY CHU, California
TREY GOWDY, South Carolina TED DEUTCH, Florida
RAUL LABRADOR, Idaho CEDRIC RICHMOND, Louisiana
RON DeSANTIS, Florida SCOTT PETERS, California
KEN BUCK, Colorado
MIKE BISHOP, Michigan
Paul B. Taylor, Chief Counsel
James J. Park, Minority Counsel
C O N T E N T S
----------
MAY 24, 2016
Page
OPENING STATEMENTS
The Honorable Steve King, a Representative in Congress from the
State of Iowa, and Chairman, Executive Overreach Task Force.... 1
The Honorable Steve Cohen, a Representative in Congress from the
State of Tennessee, and Ranking Member, Executive Overreach
Task Force..................................................... 3
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Chairman, Committee on the Judiciary 4
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 6
WITNESSES
John D. Graham, Dean, Indiana University School of Public and
Environmental Affairs
Oral Testimony................................................. 7
Prepared Statement............................................. 10
Sofie E. Miller, Senior Policy Analyst, Regulatory Studies
Center, The George Washington University
Oral Testimony................................................. 57
Prepared Statement............................................. 59
Amit Narang, Regulatory Policy Advocate, Public Citizen
Oral Testimony................................................. 67
Prepared Statement............................................. 70
Gail Heriot, Professor of Law, University of San Diego School of
Law
Oral Testimony................................................. 110
Prepared Statement............................................. 112
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Material submitted by the Honorable Steve Cohen, a Representative
in Congress from the State of Tennessee, and Ranking Member,
Executive Overreach Task Force................................. 135
APPENDIX
Material Submitted for the Hearing Record
Prepared statement of David Stacy, Government Affairs Director,
Human Rights Campaign.......................................... 156
FEDERAL GOVERNMENT ON AUTOPILOT: DELEGATION OF REGULATORY AUTHORITY TO
AN UNACCOUNTABLE BUREAUCRACY
----------
TUESDAY, MAY 24, 2016
House of Representatives
Executive Overreach Task Force
Committee on the Judiciary
Washington, DC.
The Task Force met, pursuant to call, at 3:03 p.m., in room
2141, Rayburn House Office Building, the Honorable Steve King
(Chairman of the Task Force) presiding.
Present: Representatives King, Goodlatte, Jordan, Cohen,
Conyers, Nadler, Lofgren, Johnson, and Peters.
Staff Present: (Majority) Paul Taylor, Chief Counsel;
Tricia White, Clerk; Zachary Somers, Parliamentarian & General
Counsel, Committee on the Judiciary; (Minority) James Park,
Minority Counsel; and Veronica Eligan, Professional Staff
Member.
Mr. King. The Executive Overreach Task Force will come to
order. Without objection, the Chair is authorized to declare a
recess of the Task Force at any time.
And I recognize myself for an opening statement.
Today's hearing of the Task Force on Executive Overreach
will focus on the delegation of regulatory authority to an
unaccountable Federal bureaucracy. Since the 1960's, the
portion of the Federal budget dedicated to Federal regulatory
agencies has grown dramatically. Not only does Congress
delegate vast swaths of lawmaking power to Federal agencies,
but there's been a great rise in additional ways Congress, the
President, and the Federal agencies have deviated from the
traditional process of lawmaking, thereby diffusing
responsibility for policies in complicated ways that few people
can even begin to understand.
For example, Congress has passed overlapping, overlapping
delegations of regulatory power to multiple agencies. That
allows a bevy of Federal regulators to bring simultaneous
enforcement actions against Americans and American businesses,
pressuring possibly innocent Americans to settle with them and
comply simply to avoid the vast expense of fighting several
Federal agencies at the same time, and that's not to mention
conflicting regulations that--both of which cannot be complied
with.
Further, more than one-third of major Federal rules have
been promulgated without prior notice and comment by the
public, which deprives the American people of any opportunity
to weigh in on how new regulations might hurt them. The
President now uses more executive memoranda and blog posts for
major policy shifts. Controversial issues are also outsourced
to boards and commissions, as happened with the new Medicare-
cutting board created by ObamaCare.
Regulations also impose, de facto, by the issuance of
Federal agency guidance that, while technically not binding,
nevertheless tells Americans how their Federal regulatory
overlords are interpreting the law and that Americans should
comply immediately or risk an enforcement action against them
brought by those same agencies. An egregious example of just
this happened days ago.
The Department of Education and the Justice Department
issued guidance claiming all public schools will lose Federal
funding if they don't let anatomical boys use facilities
formerly reserved for anatomical girls. As one of our witnesses
today summarizes, it would be--and I quote, ``it would be an
understatement to say that the transgender guidance goes beyond
what Title IX, which was passed in 1972, actually requires. If
someone had said in 1972 that one day Title IX would be
interpreted to force schools to allow anatomically intact boys,
who physiologically identify as girls, to use the girls' locker
room, he would have been greeted with hoots of laughter. OCR
has simply engaged in legislating.''
These unorthodox practices have led to the type of legal
uncertainty condemned by James Madison. In Federalist number
62, Madison wrote the following, which is worth quoting at
length: ``It will be of little avail to the people that the
laws are made by men of their own choice if the laws be so
voluminous that they cannot be read or so incoherent that they
cannot be understood. If they be repealed or revised before
they are promulgated or undergo such incessant changes that no
man who knows what the law is today can guess what it will be
tomorrow. Great injury results from an unstable government. And
what prudent merchant will hazard his fortunes in any new
branch of commerce when he knows not but that his plans may be
rendered unlawful before they can be executed? What farmer or
manufacturer will lay himself out for the encouragement given
to any particular cultivation or establishment when he can have
no assurance that his preparatory labors and advances will not
render him a victim to an inconstant government? In a word, no
great improvement or laudable enterprise can go forward which
requires the auspices of a steady system of national policy.''
With James Madison's concerns in mind, I look forward to
the hearing today. But I would point out that I started a
construction business in 1975, and through the course of, you
know, seeking to advance my professionalism, I found myself
conducting seminars in multiple States among other similar
contractors similarly situated. I began asking the question,
how many agencies regulate your trade? And I did that from
State to State, and we came up with kind of a constant number.
This is back in about, oh, the late 1980's or so. Forty-three
different agencies had a voice on my construction business that
regulated me, and that was consistent with many other
companies. We came to essentially an average consensus of 43.
And so I wondered what I'd actually done to my oldest son when
I sold that business to him. There are more agencies today that
regulate him.
It's impossible to know even all the agencies that regulate
your business, let alone know all of the regulations--statutes
and regulations that regulate businesses. So I would submit
this: not one business in America has a banner on their home
page stating, ``notice, we are in compliance with all
government regulations, conflicting or otherwise.''. You will
not find that on anybody's Web site, because we know what would
happen. If you once bragged about being in compliance with all
regulations, regulators will show up to prove you wrong, and
over time your profit margin goes into the red and eventually
you will no longer be in business if we unleash all of the
regulators that are available to be unleashed on our businesses
in this country or on our people.
So I look forward to the testimony. And I would yield back
the balance of my time and recognize the Ranking Member, Mr.
Cohen, for his opening statement.
Mr. Cohen. Thank you. I appreciate that. I didn't listen as
closely maybe as I should have, and I wasn't sure. What was
James Madison's position on transgendered?
Mr. King. He wants you to label your own bathroom.
Mr. Cohen. Was he--but did they even have that back then?
That's the great thing about our Constitution, is it can adjust
and change with the times and what needs to--you know, reflect
the current situation.
James Madison probably didn't have much of an opinion on
it, but this is a concept we've heard a lot about. And when I
was Ranking Member of the Subcommittee on Regulatory Reform,
Commercial, and Antitrust Law, most of our hearings were
devoted to antiregulatory themes, a lot of talk about critics--
critical of regulation by unelected bureaucrats and a lack of
political accountability. We considered various measures that
would have added numerous unnecessary and burdensome steps to
the rulemaking process, throwing whatever we could into the
wheel to stop the--stop it. There were recommendations to
expand the authority of the Office of Information and
Regulatory Affairs, OIRA, require ongoing retrospective review
of all agency rules, and impose new rulemaking requirements on
guidance documents. All these measures were to stop the
agency's actions.
An important point that gets lost in all this is that
Congress created the agencies, delegated broad authority to the
agencies, and Congress funds the agencies. So if Congress does
not approve the direction of the agency action, it can always
rescind or limit the scope of the delegated authority. It can
also restrict funds for the implementation of specific rules
that it disapproves of. And the fact is, it can--the opponents
of regulations often do not have the votes to achieve those
ends through the legislative process, so instead they try to
raise issues and rhetoric and propose changes that would muck
up the process.
Most of the protections that are provided through
regulation are popular. Most people like clean air and clean
water, fresh air. It's a nice thing. They like the fact that
the traffic is, especially in the air is controlled in such a
way that planes don't crash into each other regularly because
we've got air traffic controllers. So people like that thing.
Regulations and broad agency authority that are necessary
to craft those regulations are critical for public health and
safety and protecting consumers from fraud and stopping
unlawful discrimination, among many other things.
Workplace safety, the Bureau of Labor Statistics reports in
its 2014 census of fatal occupational injuries that there were
4,821 workplace deaths in 2014, the most ever reported. And so
a lot of the regulations are intended to make the workplace
safer, and maybe could have helped some of those 4,821 people
who no longer are with us.
According to researchers from the National Institute for
Occupational Safety and Health, the American Cancer Society,
and Emory School of Public Health, there are an estimated
50,000 to 70,000 deaths from occupation-related diseases in the
United States annually.
Why is it that we have agencies that develop regulations?
As the Supreme Court has recognized, Congress's delegation of
authority, the executive arises from the practical recognition
that our society and our economy are far more complex and
problems far more technical than in the late 18th century at
the time of the founding and at the time of James Madison and
his inability to address the issue, of which seems to be the
issue du jour in the scope of getting the American people
aggravated about something that doesn't rise to a major level
of aggravation with most people, because he didn't know about
it, James Madison.
Congress sets broad principles into statute and leaves it
to the agencies to carry out the statute and to formulate those
principles. This process has worked well to protect millions of
Americans from a wide variety of harms, enhance innovation and
economic growth, and ensure basic fairness and justice. And
Congress retains ultimate legislative authority over agency
action, ensuring democratic accountability.
I thank the witnesses for participation in today's hearing.
I welcome your testimony, and yield back the balance of my
time.
Mr. King. I thank the gentleman from Tennessee.
And now I yield to the Chairman of the full Committee, Mr.
Goodlatte from Virginia.
Mr. Goodlatte. Well, thank you, Chairman King, for
convening this fifth hearing of the Task Force on Executive
Overreach, this one focusing on executive overreach in Federal
regulations.
Federal regulations take a huge toll on small business.
Warren Meyer, the owner of a company who runs campgrounds said
recently, ``in 1 year I literally spent more personal time on
compliance with a single regulatory issue, implementing
increasingly detailed and draconian procedures, so I could
prove my employees were not working over their 30-minute lunch
breaks, than I did thinking about expanding the business or
getting new contracts.''
On a larger scale, a Mercatus working paper concludes that,
had regulation been held constant at the lower levels observed
in 1980, the economy would have been nearly 25 percent larger
by 2012, meaning regulatory growth since 1980 cost $4 trillion
to the American economy in 2012, or about $13,000 per person in
that year.
The U.S. economy has generally also grown less dynamic over
time, as the number of firms less than a year old--as a share
of all firms has declined dramatically, hampered in large part
by regulatory burdens. Recently, and for the first time, the
number of firms folding exceeded the number of firms created in
America. It's no surprise, then, that the growth in startup
company employment has also declined significantly over the
last few decades.
Surveys of small business owners show a steady rise in the
ranking of government requirements and red tape as a most
important problem, and this has contributed to American
companies having to move overseas to thrive. In a 2011 survey,
Harvard Business School alumni were asked about 607 instances
of decisions on whether or not to offshore operations. Of the
reported results, the United States retained the business in
just 96 cases and lost it in 511 cases. Research shows that the
loss of jobs to overseas markets results in higher
unemployment, lower labor force participation, and reduced
wages, which in turn increases the demand for spending programs
for those who are negatively impacted, making our fiscal crisis
even worse.
More regulations also means higher prices generally. For
example, since the once heavily regulated airline industry was
deregulated in the 1970's, inflation-adjusted domestic airfare
prices have fallen dramatically. Overall, while the cost of
things the Federal Government regulates have soared, such as
education, healthcare, and childcare, the costs of things the
government generally doesn't regulate have declined, such as
clothing, cell phones, personal computers, and televisions.
The way Federal agencies operate also makes it very
expensive for people harmed by their regulations to challenge
them in court. As Professor Gary Lawson has written, consider
the typical enforcement activities of a typical Federal agency,
for example, the Federal Trade Commission.
The Commission promulgates substantive rules of conduct.
The Commission then considers whether to authorize
investigations into whether the Commission's rules have been
violated. If the Commission authorizes an investigation, the
investigation is conducted by the Commission, which reports its
findings to the Commission. The Commission's complaint that a
commission rule has been violated is then prosecuted by the
Commission and adjudicated by the Commission. If the Commission
chooses to adjudicate before an administrative law judge rather
than before the Commission, and the decision is adverse to the
Commission, the Commission can appeal to the Commission. If the
Commission ultimately finds a violation, then and only then the
affected private party can appeal to an Article III court, but
the agency decision, even before the bona fide Article III
tribunal, possesses a very strong presumption of correctness on
matters of both fact and law.
That's not a recipe for freedom in America. That's not a
recipe for success in America. That's not a recipe for job
creation in America.
I look forward to hearing from all our witnesses today
about the growth in Federal regulatory burdens imposed by an
increasingly unaccountable Federal bureaucracy.
Thank you, Mr. Chairman.
Mr. King. I thank Chairman Goodlatte for his opening
statement, and now recognize the gentleman from Michigan and
Ranking Member of the full Committee, Mr. Conyers.
Mr. Conyers. Thank you, Chairman King.
Members of the Committee, distinguished witnesses, and
those who are attending the hearing in person, today's hearing
is the 32nd antiregulatory hearing that we have had since the
beginning of the 112th Congress. The antiregulatory fervor of
some in this legislature is no doubt passionate and heartfelt,
but as I have noted during the 31 previous hearings that we've
had on this topic, regulation is vital to protecting everyday
Americans from a myriad of harms. And broad agency authority is
crucial to ensuring a well-run regulatory system that promotes
public health and safety, while providing certainty for
business.
So as we consider our witnesses' testimony, we should keep
the following in mind: to begin with, the broad delegation of
authority by Congress to administrative agencies is
constitutional. During our first Task Force hearing, we heard
testimony from some witnesses that called into constitutional
doubt the entire notion of Congress delegating authority to an
executive branch agency.
It is true that the Constitution provides that all
legislative power is vested in the Congress and that Congress
cannot completely delegate this power. The Supreme Court,
however, has recognized that the Constitution doesn't prevent
Congress from obtaining the assistance of the other branches of
government. In fact, as the Court noted in Mistretta versus the
United States, its decisions in this area have been driven by a
practical understanding that in our increasingly complex
society, replete with ever-changing and more technical
problems, Congress simply cannot do its job absent an ability
to delegate power under broad general directives. That
recognition, in turn, highlights the central role of regulation
and of administrative agencies in addressing a broad spectrum
of harms in our modern society.
Without question, regulations provide critical protections,
such as ensuring the safety of the water we drink, the air we
breathe, the food we eat, the cars we drive, and the places
where we work. These matters require highly technical expertise
and sometimes years of study in order to address properly.
After all, how many House Members have the knowledge and the
time to determine exactly how many parts per million of carbon
monoxide would be acceptable to ensure safe air to breathe? How
many senators are equipped to determine the proper amount of
air pressure that's necessary to ensure that a train's braking
system works properly? I would guess that the answer is
probably not many, not too many.
Finally, Congress already has at its disposal a number of
tools to ensure due process and democratic accountability with
respect to agency actions. Most obviously, Congress can always
rescind or limit the scope of delegation, if it so chooses.
Congress also has the power of the purse to limit an agency's
power or its ability to implement a rule. The fact that
congressional opponents of regulation often lack the political
support to do these things does not mean that checks do not
exist.
And so with these points in mind, I look forward to our
witnesses' testimony, and I thank the Chair and yield back.
Mr. King. I thank the gentleman from Michigan. Precisely to
the second.
And without objection, other Members' opening statements
will be made a part of the record.
Let me now introduce the witnesses. Our first witness is
John Graham, dean of the Indiana University School of Public
and Environmental Affairs. Our second witness is Sofie Miller,
senior policy analyst at George Washington University
Regulatory Studies Center. Our third witness is Amit Narang,
regulatory policy advocate at Public Citizen. And our fourth
witness is Gail Heriot, a law professor at the University of
San Diego School of Law, and a member of the U.S. Commission on
Civil Rights.
We welcome you all here today and look forward to your
testimony.
Each of the witness's written statements will be entered
into the record in their entirety. I ask that each witness
summarize his or her testimony in 5 minutes or less. To help
you stay within that time, there's a timing light in front of
you. The light will switch from green to yellow, indicating you
have 1 minute to conclude your testimony. When the light turns
red, it indicates that the 5 minutes have expired.
Before I recognize the witnesses for their testimony, it's
the tradition of the Task Force that they be sworn in, so I'd
ask you to please stand and raise your right hand.
Do you solemnly swear that the testimony that you're about
to give will be the truth, the whole truth, and nothing but the
truth, so help you God?
You may be seated. Thank you.
Let the record reflect that the witnesses have answered in
the affirmative.
I now recognize our first witness, Mr. Graham, for your
testimony. Mr. Graham.
TESTIMONY OF JOHN D. GRAHAM, DEAN, INDIANA UNIVERSITY SCHOOL OF
PUBLIC AND ENVIRONMENTAL AFFAIRS
Mr. Graham. Thank you, Mr. King, and Members of the
Committee.
I agree with the sentiments that Federal regulation is an
essential tool of government, and my testimony addresses the
question of how to make it more informed and smarter, based
upon the available evidence and public opinion.
I want to introduce as a theme the notion of stealth
regulation. In the dictionary, the word ``stealth'' refers to
secretive behavior, like the sneakiness of a cat burglar. And I
want to talk about regulators, who sometimes, not always,
engage in this stealth-like behavior, and it's something that I
want to draw to the Committee's attention.
Now, how do they do this? They do this with innocuous-
sounding actions, such as guidance documents, official notices,
policy statements, risk assessments, directives, enforcement
advisories, and waivers for State regulators. All of these
constructs are often useful and necessary for a good
functioning regulatory system, but they can also be used to
accomplish what would normally be accomplished through
rulemaking. And sometimes they do this to avoid the basic
protections that are provided in the Administrative Procedure
Act for rulemaking.
So, for example, today, some of the most controversial
issues in regulatory policy are being resolved with stealth
regulations: civil rights policy at the Department of
Education, coal mining permits at the Department of Interior
and EPA, immigration policy at the Department of Homeland
Security, Affordable Care Act policies at the IRS and the
Department of Health and Human Services.
So what are the process problems with a stealth regulation?
The first is the basic concept of opportunity for public
comment can be compromised, either because the agency doesn't
seek public comment, they simply issue the guidance document,
or they receive comments but are under no obligation to respond
to the comments. In the rulemaking process, you have a legal
obligation as an agency to consider and respond to those
comments.
The second problem with stealth regulation is that OMB and
the interagency review process may be compromised. In
rulemaking, those draft regulations go to OMB and OMB shares
those with all agencies of the government, they take comments,
OMB passes back the comments. I worked 5 years, from 2001 to
2006, at OMB-OIRA, and I was in the midst of all that process.
Now, these other types of processes may not involve either
OMB or the other agencies, so you don't get the same vetting
process inside the government that you would do normally.
Third, requirements for cost-benefit analysis and small
business impact analysis are applicable to rulemakings, but not
necessarily to all of these other actions. So you don't get the
same kind of economic analysis and small business analysis when
you allow these stealth regulations to evolve.
And finally, the scope for judicial review of agency
actions may be narrowed if it's not a rulemaking, if it's one
of these other actions. Judges may be reluctant to intervene if
there's not a robust rulemaking record that's been provided.
And when you do these stealth regulations, you can often
accomplish it without that robust record.
Now, there are some courts that are beginning to detect
this problem and are striking down some of these regulations,
de facto regulations through stealth activity.
I want to conclude and just give one small example, it's on
an issue that we can all relate to, which is the growing
interest in electric cars in America. And I happen to be a
person who's interested in an electric car. I drive from
Bloomington to Indianapolis. It takes about 60 miles. To get
there and back, I need an electric car with a range of 120
miles. So the technology's getting better, but it's not quite
there, but I'm interested in this.
What I find fascinating is that the State of California has
actually required, through regulation, that 15 percent of all
new vehicles will be electric or zero emission by 2025. Ten
other states have joined them, so we now have effectively a
third of the country covered by an electric car mandate.
Now, I looked closely at the history of this. Each of these
electric vehicles could cost on average $10,000 more than the
average vehicle, but they'll save the consumer some money. So
there's an important cost-benefit question there. But the
California analysis that supports this regulation only analyzes
the regulation from California's perspective. It doesn't
consider the impact on other States in the country.
Meanwhile, California's not permitted to do this regulation
unless they get approval from the EPA on a waiver authority
under the Clean Air Act. EPA granted the waiver, but EPA never
did a cost-benefit analysis on a national perspective. So here
we have, through a combination of activities, a national
regulatory program, never been subject to a national cost-
benefit analysis.
Thank you very much. I look forward to the comments and
questions.
[The prepared statement of Mr. Graham follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
__________
Mr. King. Thank you, Dean Graham, for your testimony.
And the Chair now recognizes Ms. Miller for her testimony.
TESTIMONY OF SOFIE E. MILLER, SENIOR POLICY ANALYST, REGULATORY
STUDIES CENTER, THE GEORGE WASHINGTON UNIVERSITY
Ms. Miller. Thank you, Chairman King, Ranking Member Cohen,
and Members of the Task Force, for inviting me to share my
expertise. Thank you also, Chairman Goodlatte and Ranking
Member Conyers, for joining us today. I appreciate your
attention to this issue. I appreciate the Task Force's interest
in the rulemaking process, including in retrospective review,
and opportunities for Congress to improve it.
I am the senior policy analyst at the George Washington
University Regulatory Studies Center, where I analyze the
effects of regulation on public welfare and evaluate regulatory
reforms, including the success of current and past
retrospective review efforts. Through my research, I've
identified ways to improve these initiatives.
Retrospective review is a bipartisan reform effort that can
improve both the quality of existing rules and of future rules
by learning what works well in a regulatory context and what
doesn't. My remarks today include how retrospective review can
be a powerful tool toward an effective regulatory process, how
past and current reforms have faired, and ways to improve
retrospective review to ensure that regulations are
accomplishing their intended outcomes.
Retrospective review is a form of program evaluation that
reviews the efficacy of a policy, in this case, a regulation,
after implementation to evaluate whether it has had its
intended effect and whether it should be continued or revised.
These reviews can inform policymakers on how best to allocate
limited resources to accomplish broad social goals, like
improved environmental quality or better human health through
regulation. Retrospective review can provide valuable feedback
and learning that improves the design of future regulations.
While policymakers have the opportunity to revisit many
Federal programs each time Federal funds are being
appropriated, regulatory programs often exist in perpetuity
without a statutory requirement to revisit them after the fact.
Every year Federal agencies issue thousands of new regulations,
but despite the pace of regulatory activity, regulators seldom
look back at existing rules to consider whether they are
accomplishing their goals and resulting in the estimated public
benefits and costs. That's why President Obama in 2011, like
Presidents before him, directed Federal agencies to review
existing regulations and to ``modify, streamline, expand, or
repeal them in accordance with what has been learned.''
Policies that apply retrospective review to regulations
have a long history in the United States, dating back to the
Carter administration and continued by every President since
then. Despite 40 years of bipartisan reform efforts, agencies
still do not conduct effective retrospective review of the
rules.
More recent efforts to encourage this review, such as the
three executive orders issued by President Obama, have not
resulted in a systematic culture of evaluation or large burden
reductions for the regulated public. For example, an analysis I
conducted of EPA's 2013 plan for retrospective review found
that it did not include the unprecedented cost savings and
burden reductions for the regulated public which many observers
had hoped for. Only one-fifth of the regulatory actions in
EPA's progress report were expected to reduce costs, and a
number of actions actually increased burdens on the regulated
entities.
One reason why agencies struggle to review the effects of
their rules is because they don't design their rules at the
outset to facilitate this measurement, despite existing
recommendations from OMB that they do so. Writing rules to
facilitate later retrospective review can ensure effective data
collection and encourage regulators to clearly identify and
think through how the proposed rule will address the policy
problem at hand.
In 2014, our team at the G.W. Regulatory Studies Center
examined high priority proposed rules to see whether they
included components that would help the agencies review their
effects after implementation. We found that not a single rule
we evaluated contained a plan for review, and most rules didn't
contain any quantitative metrics that could be used to measure
whether the rule was successful. Independent agencies scored
particularly poorly on these criteria. This suggests that the
current review system, while headed in the right direction, is
not sufficient to create the right incentives for effective
evaluation.
Retrospective review is a key component of an effective
regulatory review process because it allows agencies to review
the effects of their existing rules and evaluate whether they
are accomplishing their intended goals and determine what
effect they have on the regulated public. Writing these rules
at the outset to facilitate this measurement can improve
regulatory outcomes and enable policymakers like yourselves to
learn from what has worked and what hasn't.
Thank you all.
[The prepared statement of Ms. Miller follows:]*
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*Note: Supplemental material submitted by this witness is not
printed in this hearing record but is on file with the Task Force, and
can also be accessed in her statement at:
http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=104981
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__________
Mr. King. Thank you, Ms. Miller.
I now recognize the gentleman, Mr. Narang, for his
testimony.
TESTIMONY OF AMIT NARANG, REGULATORY POLICY ADVOCATE, PUBLIC
CITIZEN
Mr. Narang. Thank you. Chairman King, Ranking Member Cohen,
and distinguished Members of this Task Force, thank you for the
opportunity to testify today. I'm Amit Narang, regulatory
policy advocate at Public Citizen's Congress Watch.
Public Citizen is a national public interest organization
with more than 400,000 members and supporters. For more than 40
years, we have successfully advocated for stronger health,
safety, consumer protection, and other rules, as well as for a
robust regulatory system that curtails corporate wrongdoing and
advances the public interest.
Public health and safety regulation has been among the
greatest public policy success stories in our country's
history. Regulations have made our air far less polluted and
our water much cleaner, they've made our food and drugs safer,
they've made our workplaces less dangerous, they have made our
financial system more stable, they have protected consumers
from unsafe products and from predatory lending practices,
they've made our cars safer, they've outlawed discrimination on
the basis of race and gender, and much more.
Although these regulations are now considered to be bedrock
protections widely popular with the public, it is important to
keep in mind that opponents of these regulations at the time
predicted economic doom and gloom if they were adopted. None of
these predictions came true, of course, and this is an
important lesson when considering current doomsday predictions
from opponents of new regulations.
In short, our regulatory safeguards are to be celebrated
and emulated. Unfortunately, the state of our current
regulatory system is a deep cause for concern. Our regulatory
system is badly broken and in dire need of reform. The
rulemaking process moves too slowly to protect the public,
agency funding continues to stagnate or even decline, and the
revolving door between regulated industry and Federal agencies
continues to spin, leading to industry capture of our
regulatory system.
Given the focus of this hearing, I will spend the rest of
my time on the current crisis of regulatory delay. The sad
truth is that nearly every major new piece of legislation that
Congress enacts to protect the public takes far too long to
result in regulations that actually do benefit and protect
consumers and working families. Take these four laws passed on
a bipartisan basis during President Obama's first term as an
illustration: the Pipeline Safety Act of 2011, the Food Safety
Modernization Act, the Family Smoking Prevention and Tobacco
Control Act, and the Dodd-Frank Wall Street Reform Act.
All of these laws were passed by Congress to protect the
public's health, safety, and financial security, and yet
regulators have taken on average 4 to 6 years to develop and
put in place important new regulations that implement and
enforce each law. Astonishingly, three of the four laws still
have not been fully implemented. For all of these laws, Federal
agencies miss statutory deadline after statutory deadline as if
those deadlines were optional instead of mandatory.
It's the public that pays the price of regulatory inaction
and delay: pipeline leaks that pollute the environment and make
neighborhoods uninhabitable, increasing use of and addiction to
e-cigarettes, continued reckless gambling on Wall Street, and
frequent tainted food scandals. The unacceptable delays in
implementing these laws are the rule, not the exception. As the
breadth of these laws demonstrates, the crisis of regulatory
delay extends across agencies and across regulatory sectors.
The anecdotal examples are backed up by comprehensive empirical
evidence of systemic regulatory delays.
Last year the conservative-leaning think tank, the R Street
Institute, undertook a comprehensive study of how often Federal
agencies are able to meet the statutory deadlines when enacting
significant new regulations. The results are deeply troubling.
Regulators missed congressional deadlines a shocking 50 percent
of the time over the last 20 years.
What are causing these delays? The bulk of new regulations
that are minor and technical in nature do not encounter
significant delay. Rather, it is the most important
regulations, sometimes termed ``significant'' or ``major,''
that provide Americans with the greatest benefits, but also
take the longest to finalize. This is because the rulemaking
process for these rules has become inefficient at best and
dysfunctional at worst.
When developing significant or major regulations, agencies
are required to analyze not only the rule itself, but also
multiple alternatives, even when alternatives are prohibited by
statute. Agencies are required to conduct multiple cost-benefit
analyses that are highly speculative yet demand enormous
resources. Agencies are required to conduct at least one, and
often more than one, public comment period and respond to the
hundreds of thousands of comments submitted by stakeholders.
Executive agencies must submit their significant rules to OIRA
for review, an increasing source of delay, as OIRA reviews have
taken longer under this Administration than any previous one.
Finally, all of these procedural requirements occur against
the backdrop of a likely court challenge by regulatory
opponents.
As the saying goes, protections delayed are protections
denied. The regulatory process that disregards statutory
deadlines, vetoes congressional mandates on the basis of flawed
cost-benefit analysis, and is generally unable to fulfill
congressional intent in protecting the public should be a high
priority concern for all Members of Congress.
This Congress has been interested in streamlining
inefficient regulatory processes that result in undue delay,
such as legislation passed last year to expedite energy and
infrastructure permit approvals by stripping away environmental
cost-benefit analysis, imposing hard caps on public comment
periods, and sharply reducing the ability for stakeholders to
bring court challenges. It is disappointing, then, to see
Congress propose essentially the opposite reforms for public
health and safety regulations, adding more cost-benefit
analysis, longer comment periods, more OIRA review, and more
opportunities for regulatory opponents to challenge in court.
Congress can and should fix our regulatory process, and
it's long past time that it does. This is the kind of
congressional accountability that is needed. Public Citizen
stands ready to work with lawmakers on both sides of the aisle
to make our regulatory system work effectively and efficiently
for consumers, working families, and the public.
Thank you, and I'm looking forward to answering any
questions you may have.
[The prepared statement of Mr. Narang follows:]
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__________
Mr. King. Thank you, Mr. Narang.
The Chair now recognizes Ms. Heriot for her testimony.
TESTIMONY OF GAIL HERIOT, PROFESSOR OF LAW, UNIVERSITY OF SAN
DIEGO SCHOOL OF LAW
Ms. Heriot. Good afternoon, Chairman King, Ranking Member
Cohen, and distinguished Task Force Members. Thank you for this
opportunity to testify on this important topic. I should note
I'm here as an individual member of the Commission on Civil
Rights and not on behalf of the Commission as a whole.
I will be brief, although I should say, that's not so easy,
since there's plenty to talk about here. I will thus be
focusing my remarks on the Department of Education's Office for
Civil Rights, though there are many other government agencies
that would also be worthwhile to discuss.
To put it plainly, OCR is out of control. Its
pronouncements are in no way tethered to the actual law. OCR
officials have shown again and again that they're not
interested in what the statutes they're charged with enforcing
really say. They are pushing their own agenda.
Congress is supposed to be the one who makes the laws.
Composed of the people's representatives, Congress is the one
that's supposed to make decisions about policy. OCR is supposed
to implement those. Somehow our system of representative
democracy is not working.
The best, but by no means the only, example is the recently
announced transgender guidance requiring schools across the
country to allow intact anatomically male, that is, boys, who
psychologically identify with girls, to share toilet, locker
room, and shower facilities with actual girls.
Congress intended no such thing when it passed Title IX
back in 1972. That statute prohibits sex discrimination by
federally funded schools, colleges, and universities, plain and
simple. It makes an exception for separate living facilities,
which was crystalized in a rule promulgated in 1975 which
explicitly authorizes separate toilet, locker room, and shower
facilities based on sex, actual sex, not the sex we might
desire to be.
To claim back in the 1970's, that the 92nd Congress
intended or that the American people understood Title IX to
require schools to allow anatomical boys who view themselves as
girls to use the girls' room would flunk the laugh test.
Indeed, OCR doesn't even claim it. Instead, OCR's argument,
insofar as it has one, is that it just noticed, surprise, that
a 1989 Supreme Court case, Price Waterhouse versus Hopkins,
requires this result. Well, no, it doesn't.
Price Waterhouse concerned a woman who allegedly had not
been promoted because she was perceived as too aggressive. The
Court reasoned that if a male employee with the same aggressive
personality would have been promoted, that she was indeed
discriminated against on account of her sex within the meaning
of Title VII. Fine. But let's try that same line of reasoning
in connection with the transgender guidance.
Suppose a school had a student who was anatomically male,
but who identifies psychologically as female. Would a female
student with the same psychological identification be permitted
to use the girls' room? Well, yes, of course. But that's very
different from Price Waterhouse versus Hopkins, because Title
IX and its implementing regulations explicitly permit schools
to ``provide separate toilet, locker room, and shower
facilities on the basis of sex.''
More important, note that applying this line of reasoning
proves too much. Consider instead an anatomically male student
who identifies as male, that is, the more typical male. It is
still true that if his female counterpart, an anatomical
female, who identifies as male, she would have been permitted
to use the girls' locker room, yet we know that schools are
explicitly authorized to have separate toilets, locker rooms,
and shower facilities for each sex. This takes the case outside
of the Price Waterhouse situation.
Note that in my testimony so far I haven't argued whether
OCR's transgender guidance is good or bad policy. For the
record, I think it happened to be bad policy, at least when
it's shoved down the throats of schools, colleges, and
universities. Far better to allow these institutions to make
their own choices on these matters.
You can ask me about the underlying policy issue in the
question-and-answer period if you so desire, but right now my
point is more limited. This is not what Title IX actually
requires. OCR's actions are lawless.
In my written testimony, I discussed a few ideas about how
to get OCR and other agencies back on track. The simplest
recommendation is stop giving them more money. Last year the
Obama administration asked for a huge budget increase for OCR.
I wrote a long epistle to Republican appropriations leaders
saying, please don't do it, and explained why, but Congress
gave it to OCR anyway; not quite as large as the Administration
had asked for, but nevertheless very large. We are now
experiencing the results of that decision.
I have two somewhat more complex proposals in my written
testimony, but I see that I'm running out of time. So I would
be very glad to talk about those ideas during the question-and-
answer period or with your staff after the hearing.
The bottom line is that the Framers of the Constitution
knew that they had to structure the institutions they were
creating to get the incentives right. That work did not stop
with them. The incentives of administrative agencies have to be
carefully structured as well, and I would urge this Congress to
do that.
[The prepared statement of Ms. Heriot follows:]
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__________
Mr. King. Thank you, Ms. Heriot, for your testimony, and
each of the witnesses.
I now recognize myself for 5 minutes of questioning.
I'd turn first to Dean Graham and ask you the question this
way: that you heard in my opening statement that no business, I
suppose this to be true, in the United States has a banner on
their home page that says, notice, we are in compliance with
all Federal regulations. Could you think that it's possible to
be in compliance with all--just all Federal regulations?
Mr. Graham. I don't know for sure, but I do know that
colleges and universities are also heavily regulated sectors of
the American economy, and we don't have any such statements on
our Web sites, that I'm familiar with.
Mr. King. And when you talked about some of the ways,
guidance, notices, advisories, and could you speculate as to
how difficult it might be just to be aware of all the
regulations, let alone being in compliance with them?
Mr. Graham. Yes. It's a little easier with rulemakings and
regulations, because we have accounting mechanisms in the
Federal Government to count them. But for these other types of
stealth regulations, I call them, guidance documents,
enforcement notices, there's actually no centralized method to
even count how many there are in various agencies in the
Federal Government as a whole. So it's very hard to get your
arms around the magnitude and the trends.
Mr. King. Do you recall, it seems to me that I do, about a
second or third tier U.S. Treasury Web page that issued a
regulation on ObamaCare 2 or 3 years ago? Does that ring a
bell, Mr. Graham?
Mr. Graham. Well, I'm aware of several of them. The one--it
was addressing the employer mandate and the delay in the
employer mandate. And if you remember, the context for a lot of
that, obviously quite understandably, the Administration was
trying to address a very difficult situation. But we insist
upon the idea that when you're going to make changes in major
programs like that, that you go through a standard rulemaking
process. So it was highly--a highly unusual situation.
Mr. King. I thank you, Mr. Graham.
I'd turn to Ms. Miller. And in your testimony, you
commented that President Obama post-inauguration of his first
term directed a review to modify, streamline, or expand
regulations. Do you have a judgment on what actually happened?
Was there modifying, streamlining, or was it expansion that we
witnessed?
Ms. Miller. That's a good question. So what we saw a lot of
through the agencies' progress reports is that they listed
rules that they were already conducting and planning to conduct
as part of the retrospective review programs. I don't know how
many of those actions were initiated as a result of the
executive order. I would guess that most of them they were
planning to do already and decided to categorize as
retrospective review so that it could look as if they were
complying. But my research did find that many of these
retrospective review actions did increase burdens on the
regulated public, and that was as a result of recategorizing
large rules, such as EPA's tier three, as regulatory actions
pursuant to the President's executive order.
Mr. King. Thank you, Ms. Miller.
And I turn to Mr. Narang. And in your testimony, you
mentioned the likely court challenge by a regulatory opponent.
That would likely be a business that was affected by those
regulations, it seems to be the most likely. And can you tell
me if, say, if you're a business and there's a regulation that
emerges in one of these unreviewed--say an unreviewed
regulation that has the force and effect of law, and a business
is disadvantaged by that, and they appeal through this process.
You heard Chairman Goodlatte's opening statement about the
convoluted way by which one seeks justice from outside the
commission, I believe, was the language that was used in that,
and you end up appealing back to the very agency that has
issued the rule in the first place without an opportunity for a
de novo review, how then does a person in America receive
justice?
Mr. Narang. So the guidance documents, I believe, are the
type of regulatory actions that you're referring to that could
result in enforcement actions. I don't think that's a proper
characterization of the legal effect of binding--of guidance
documents. Guidance documents are not legally binding.
Noncompliance with guidance documents can result in other types
of sanctions. For example, you know, an entity is receiving
Federal funding for compliance with regulations----
Mr. King. But the question was about without a de novo
review, how does a person ever achieve justice if they're
appealing back to the same agency that has created the
regulation that they claim that the individual's in violation
of?
Mr. Narang. Sure. So, generally speaking, and I'll use the
SEC and their administrative adjudication as an example as a
case study. But generally speaking, the rates for--essentially,
the rates at which litigants win within administrative
education tribunals and rates that litigants win in Article III
courts are roughly similar. In fact, sometimes agency tribunals
result in increased rates of victories for legal----
Mr. King. We conclude that it's about as difficult as
understanding how.
And I think that my time is nearly out, but I would like to
ask a concluding question to Ms. Heriot, because you put the
most provocative testimony out here in front of this panel. And
I'm trying to--I don't really want to visualize this order
that--or this directive that the President has issued, but the
girls that are in the shower when the anatomically intact male
comes in, how do they determine the gender of that anatomically
correct male?
Ms. Heriot. It's what he says it is. They're not--a
transgender person is not required to provide----
Mr. King. Does that shock those girls any less?
Ms. Heriot. I feel that the girls are going to be shocked
regardless of what the evidence is of transgender status. One
problem, though, is given that no proof is required, this--this
causes a greater likelihood of pranksterism, of voyeurism, and
such, because who's to challenge someone who says that they're
transgender? Nobody's going to want to be in that position, and
therefore, we can expect to see some foolishness going on here.
I think most schools have a great deal of sympathy for
those who are in the transgender status, but by forcing these
schools to engage in a one-size-fits-all, here's how we're
going to deal with it, I think that's a big mistake. And for
the Department of Education to do that, given that Title IX in
no way requires this, particularly to do it through a guidance,
is utterly inappropriate.
Mr. King. This turns, in my opinion, on the difference
between immutable characteristics and mutable characteristics,
and I think that's when we went down the wrong path.
I thank all the witnesses.
And I'd now yield to the gentleman from Tennessee for his 5
minutes.
Mr. Cohen. Thank you, Mr. Chair.
The American Association of University Women and Know Your
IX, a group empowering students to stop sexual violence, have
got a letter, so I'd like to introduce into the record. The
Know Your IX particularly takes great exception to Professor
Heriot's testimony and suggests that much of it is factually in
error, let alone questioning some of her legal theories. And
then the AAUW just as some general. So without objection, we'd
like to enter these into the record.
Mr. King. Hearing no objection, so ordered.
[The information referred to follows:]
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__________
Mr. Cohen. Thank you.
Ms. Heriot, you've got a phenomenal background, resume,
obviously a very smart woman. I thank you for dedicating some
of your work here to the Office of Civil Rights. You are on the
Civil Rights Commission. Is that correct.
Ms. Heriot. That's correct.
Mr. Cohen. Appointed by President--reappointed by President
Obama?
Ms. Heriot. No. I was appointed by the Senate. I am Senator
McConnell's nominee to the----
Mr. Cohen. Oh, I see. What are some of the things that you
have done on the civil rights--to promote civil rights?
Ms. Heriot. What have I done to promote civil rights?
Everything we do promotes civil rights.
Mr. Cohen. What have you done? I mean, what have you done
to help voting rights, for instance? Have you done things to
help get people--extend the right to vote, because----
Ms. Heriot. The Commission doesn't go out and register
people to vote. What we do----
Mr. Cohen. I'm hip to that.
Ms. Heriot [continuing]. Is issue reports.
Mr. Cohen. Yeah. And have you issued some reports that
suggest that maybe some of the activities that have taken place
in recent--with photo IDs and other things might be barriers to
voting and tried to find ways to maybe suggest we should find
ways to encourage people to get the----
Ms. Heriot. I don't think we've done one on voter ID in
particular, but we have done voter fraud and voter suppression
reports in the past.
Mr. Cohen. Okay. And what are some of the things that
you've found that has extended civil rights that may be that
your work on the Commission has--you've been most proud of?
Ms. Heriot. Well, let's see. Most proud of. That's kind of
a difficult question. I am quite interested in our eminent
domain report that we did recently. I like that----
Mr. Cohen. How about something a little bit closer----
Ms. Heriot. We have a religious liberty report that's
coming out soon that I think is quite a good report. I'd be
very happy to furnish you with copies of those reports.
Mr. Cohen. Religious liberty. Is that--tell me what the
perspective is on that.
Ms. Heriot. It's a very complex subject. You don't want to
spend your time on that. We could go on forever and ever and
ever.
Mr. Cohen. Well, then thank you.
Ms. Heriot. Absolutely. I will make sure that you get a
copy as soon as it comes out.
Mr. Cohen. Thank you. We've had--you know, there's
different perspectives on religious liberty, and some, you
know, see it one way and some another. I mean, it's all----
Ms. Heriot. Yeah. Our report is not limited to one aspect
of it. Our report has--deals with lots of different aspects of
religious liberty.
Mr. Cohen. Mr. Narang, you suggest in your testimony that
there are some problems because we don't get the rules adopted
quickly enough? Is that because we don't have--our budgeting
process and we don't have enough people there, or is it--is
that the problem?
Mr. Narang. So some of it is, you know, claims that the
Federal workforce has increased dramatically since the 1960's.
There's some needed context there. It's true that the Federal
workforce has increased. I think the GAO pointed out in a
recent report that about over the last 10 years, 94 percent of
that increase is DHS, DOD, and the VA. So the public health and
safety agencies, the agencies that oversee and regulate Wall
Street, they are not getting massive funding or staffing
increases, and at the same time, they're getting quite a few
more responsibilities with respect to public health and safety
and financial security.
Mr. Cohen. Thank you, sir.
Ms. Miller, I want to congratulate you. I understand you
just graduated, right? Did you just graduate?
Ms. Miller. I'm sorry?
Mr. Cohen. Or get a master's degree?
Ms. Miller. Oh, I have a master's degree, yes.
Mr. Cohen. Did you just get it?
Ms. Miller. I did. In May. Thank you.
Mr. Cohen. Good. Congratulations.
Ms. Miller. Thank you.
Mr. Cohen. In your report, there was something here about
some of your work had to do with airline passenger protections.
What are the--what airline passenger protections have we had
lately? I mean, we----
Ms. Miller. I think in the report, what that might be
referencing--are you talking about my bio or about the----
Mr. Cohen. Oh, it's in your bio.
Ms. Miller [continuing]. Testimony?
Mr. Cohen. It says that you submitted public comments
establishing, among other things, airline passenger
protections.
Ms. Miller. Generally, what those were were passenger
protections for consumers, such as transparency in----
Mr. Cohen. Ticketing?
Ms. Miller [continuing]. Ticket purchasing and things like
that and other transparency measures for consumers while riding
on airlines.
Mr. Cohen. I got you. Nothing about getting seats a little
bit more further apart.
Ms. Miller. No, sorry to say.
Mr. Cohen. No. That--I would miss that if it was the case.
Did you--do you agree with Mr. Narang that we don't have
enough money allocated to get these regulations approved
quickly enough?
Ms. Miller. That's a good question. The G.W. Regulatory
Studies Center does an annual report that tallies the amount of
money that's budgeted to Federal agencies to conduct
regulation, and we do find that the budget adjusted for
inflation has been increasing steadily over time. So it seems
that the--there are resources there. I think there are enough
resources to be able to promulgate rules sufficiently.
One issue that I've heard when speaking with regulators is
that sometimes the deadlines that are established in statute
are a bit ambitious, and it's difficult for them to conduct a
very thorough analysis and make good decisions within those
time frames.
Mr. Cohen. Thank you. And I don't have any time left, but I
would to comment that Dr. Graham has got a marvelous vitae as
well, and he's been praised by Senator Moynihan and he had the
wisdom to live in Santa Monica, so I can't really ask him
anything.
Mr. King. The gentleman's time has expired.
And I now recognize the Ranking Member of the full
Committee, Mr. Conyers of Michigan.
Mr. Conyers. Thank you, Chairman King. And I thank the
witnesses.
I want to talk with Mr. Narang for a few minutes about the
2008 financial crisis that we're still coming out of. Was that
a result of too much or too little regulation, or did it play
any part at all?
Mr. Narang. Thank you, Congressman. Definitely too little
regulation and oversight of Wall Street.
Mr. Conyers. Anybody else want to venture a response to
that question?
Mr. Graham. Yeah. I guess I would have said both, because
we also had the problem of putting a lot of expectations on
lenders to make loans into households and communities that were
not in a position to actually pay back those loans. So those
kinds of expectations, and much of that was in government
policy but not necessarily in formal regulation. So I would say
both played a role.
Mr. Conyers. Mr. Narang, some of your fellow witnesses at
the table suggest that Federal agencies use various means,
including the issuance of guidance documents to circumvent
various checks on agency rulemaking authority, including the
Administrative Procedure Act and OIRA. Is that a possibility or
reality in the present circumstances we find ourselves in?
Mr. Narang. Sure. Thank you. So I think it is too
simplistic a claim and it ignores the fact that, for example, I
note a claim was made that a third of rules don't go through
the notice and comment process. That's often because those
rules are needed for urgent circumstances, like national
security. It's often because Congress itself, has told the
agency explicitly, you're not supposed to go through notice and
comment rulemaking. Please issue an interm or direct final
rule. So with respect to those rules, it's that context is
necessary.
And I'd also say with respect to guidance documents,
there's well-developed authority for agencies to pursue
guidance documents when needed. It's interesting to note that,
you know, a subset of guidance documents are no-action letters,
and businesses often request those no-action letters
expediently and want clarity as to whether a certain business
practice is outlawed and will be--will result in an enforcement
action against them. I don't hear similar concerns from the
Committee or from my fellow witnesses that those no-action
letters go through insufficient process and don't result in
notice and comment.
In fact, Public Citizen actually has been advocating for a
notice and comment process for the CFPB's newly enacted no-
action letter process. Unfortunately, the CFPB has declined to
undergo notice and comment where Public Citizen could comment
on the results of a no-action letter issued by the CFPB. And so
that is disappointing in that sense, you know, it--public
comment, if it's only applied to guidance documents, will
result in, you know, a basically unfair system with respect to
guidance that prioritizes one form of guidance over another.
And I would say the last point I make is that I've gone
through the various reasons why our regulatory process for
notice and comment rulemaking is dysfunctional. It's hard to
blame agencies for not wanting to go through that process.
Although I don't agree that you can just assume that's the
intent when agencies issue guidance or----
Mr. Conyers. Finally, let me ask you, why does Congress, in
your view, delegate broad authority to administrative agencies
in the first place?
Mr. Narang. Well, thank you, Congressman. You mentioned it
earlier. For practical reasons, delegation makes a lot of
sense. Congress is not able to come up with the minutiae and
technical details to determine what will be an effective
regulation that protects the public. Congress gives broad
direction. Delegation is----
Mr. Conyers. Inevitable.
Mr. Narang [continuing]. Is a model that's followed by the
corporate world. It's not surprising that it's followed by our
government.
Mr. Conyers. Thank you, Mr. Chairman. And I thank the
witness and I appreciate all of your testimony.
Mr. King. I thank the Ranking Member from Michigan.
I now recognize the gentleman from New York, Mr. Nadler,
for his 5 minutes.
Mr. Nadler. No Republican here? All right, thank you, Mr.
Chairman. I was waiting for someone on the other side of the
aisle to have his 5 minutes or her's, but--okay.
Mr. Narang, you stated that regulatory agencies, especially
in the more important one, in the more important regulations
often miss statutory deadlines. How should we enforce statutory
deadlines? Should Congress change the way we write the laws or
is there some other way we should enforce them?
Mr. Narang. So that's a great question. Thank you,
Congressman. Oversight is probably the most immediate and
easiest means for Congress to ensure compliance on the front
end with statutory deadlines and then to ensure that agencies
are doing their best to get regulations out when they've missed
those statutory deadlines. There are other ways that Congress
can allow, essentially, private or third-party enforcement of
missed statutory deadlines. This is an important way for
citizens.
Mr. Nadler. We would have to put that in the underlying
statute to start with.
Mr. Narang. Yes. That could be the--that would generally be
the case. That's right. But this is one of the best ways for
our government to be responsive to citizens that expect the
government to protect them.
Mr. Nadler. Okay. Let me ask you one question. Give me a
brief answer because I have some questions for other witnesses.
When these agencies typically miss the statutory deadlines, is
it because they don't like the underlying policy and they are
delaying or is it because you're making impossible conditions
for them?
Mr. Narang. I'm sorry, can you repeat the second case?
Mr. Nadler. Well, the second case is, is it because it's
impossible for them to meet the unrealistic statutory deadlines
that we set up in the first place?
Mr. Narang. Well, I would say that it depends on the
agency. It depends on the circumstances. It's totally
justifiable for Congress to want agencies to meet ambitious
statutory deadlines for public health and safety issues that
are of urgent concern, and there are many of those. And
agencies should do their best to prioritize and meet those
statutory deadlines.
Mr. Nadler. Thank you.
Ms. Heriot, you said--you didn't really go into the policy
behind the recent guidance on transgender students. But you
lambasted the alleged lack of authority in this and similar
instances by the Department of Education to issue those
guidances. I'm quoting now from a letter. I'm going to
paraphrase, rather, from a letter from a group called Know Your
IX, meaning Title IX, and it quotes from your testimony. It
says you lambaste the recent joint Justice Department and
Education Department guidance on transgender student rights
declaring that, ``If someone had said in 1972 that one day
Title IX would be interpreted to force schools to allow
anatomically intact boys who psychologically, 'identify,' as
girls to use the girls' locker room, he would have been greeted
with hoots of laughter.'' ``Heriot's glib dismissal of
transgender students' gender identity as nothing more than
psychological choices dangerously ignores the high rates of
discrimination and sexual violence transgender students face in
schools and glosses over the ways that antitrans bills limit
students' educational access.''
So that's--my first question of two is, comment on that,
please. But my second is, you said that--well, you questioned,
and the quote I just read, obviously, questions the authority,
but the Fourth Circuit recently afforded deference to the
Federal Government's interpretation of Title IX stating, ``In
the Fourth Circuit decision, the Department's interpretation
resolves ambiguity in regulation by providing that in the case
of a transgender individual, the individual's sex as male or
female is to be generally determined by reference to the
student's gender identity.''
In other words, the Fourth Circuit said--approved the
Department's transgender regulation, in effect, on the basis of
Title IX. And you said that Title IX gives no--that this is far
beyond the power vested by Title IX.
Ms. Heriot. Okay. On the Fourth Circuit, number one, the
Fourth Circuit got where it did by saying it was deferring to
the Department of Education. That's not something Congress is
supposed to do. Congress is actually supposed to be looking at
this from the standpoint of what the----
Mr. Nadler. Now, wait a minute. Congress writes laws.
Congress writes laws. The departments interpret laws. Courts
can defer to their interpretation or can say your
interpretation is so far out of line that we're not going to
defer to it. They're going to knock it down. The Fourth Circuit
here says your interpretation is not so far out of line. It's
within your--the permissible parameters of your
interpretation--of your interpretive authority, and therefore,
we will accede to it. That's what the----
Ms. Heriot. And that's what the dissent said was the case,
that this was----
Mr. Nadler. Dissent? No, that's what the case said.
Ms. Heriot. Yeah, but the dissent says that this is, in
fact, in this certain interpretation of Title IX, I would agree
with that.
Mr. Nadler. Okay. So your argument is that the Fourth
Circuit is wrong, you agree with the dissent.
Ms. Heriot. I agree with the dissent, but I nevertheless
say that the Fourth Circuit only could get where they got by
deferring to OCR. They're not saying that this is, in fact, the
correct interpretation of Title IX.
Mr. Nadler. All right. But deferring, deferring--when we
write a statute, and of necessity the executive agency charged
with enforcing that statute has to interpret what it means,
which it does all the time, the court can say one of three
things: the court can say, well, this is obviously right, or
the court can say, well, no, this is so out of line that it's
obviously wrong, or the court can say, well, this is close
enough so that we will defer to the agency's authority to
interpret, which is what the Fourth Circuit said here.
Now, the dissent says, I gather from your quote, because I
haven't read the dissent, the dissent says, I gather, that it
is so far out of line that we shouldn't defer, that it's just
wrong. Okay. So you agree with the dissent, which is your
privilege, but to say that the department is so out of line
that it's ridiculous, which is the gist of your testimony, the
Fourth Circuit found otherwise.
Mr. King. The gentleman's time has expired, but the
gentlelady witness will be allowed to answer.
Ms. Heriot. I got lots of pieces here that I have to get to
first. Let me just get to some of the other points that were
made here. The violence issue and the danger of reading into
Title IX something that isn't there. But one way that schools
have tried to deal with the transgender issues, and I know of
no school that has not been sympathetic to the problem here, is
by allowing a student in that situation to have some special
dispensation; for example, to use the faculty bathroom if
that's necessary.
Mr. Nadler. And thus----
Ms. Heriot. The trouble here is by----
Mr. Nadler. And thus, single that person out.
Ms. Heriot.--Title IX so that it will treat gender identity
as if that is what is prohibited by the statute will make an
action like that illegal. Because students--for example, let's
say you've got a female student who identifies male and is
being given a difficult time by the other female students, gets
to use the faculty bathroom because it's thought that this is
simply better for that student. A student now of the same sex
but a different gender identity has a reason to object to that
and regard that as a violation of Title IX.
So what happens is, in dealing with the violence issue, you
may, in fact, have this backfire. You're going to have more
possible solutions that are now illegal under Title IX, less
discretion by the schools in order to deal with the subject the
way they think is best. And so you've got to be careful what
you wish for here.
You start extending Title IX to include categories that it
was never intended to include, and rather than deal with the
problem you're trying to deal with, you're going to end up with
the problem of more problems, more difficulty in resolving the
very issues that you're trying to resolve.
Mr. King. And now the witness' time has expired. Thank you.
And I now recognize the gentlelady from California, Ms.
Lofgren, for 5 minutes.
Ms. Lofgren. Thank you, Mr. Chairman. I, because there's
been so much discussion about the Office of Civil Rights'
guidance on transgender students, I actually--it caused me to,
rather than read the newspaper articles, to read the guidance,
which was very instructive. And it really was issued in
response to requests for guidance from schools all over the
United States and I think is very measured in tone. But one of
the things it says is, on page 2 or 3, that the departments
treat a student's gender identity as the student's sex for
purposes of Title IX and its implementing regulations.
Now, there's a whole line of Federal cases that basically
have found the same thing, that--and I'm not going to go into
them now. But I'll just say this: You know, I don't usually
call out witnesses, but here's what the written testimony says,
and this is Mrs. Heriot. ``We are teaching young people a
terrible lesson. If I believe that I am a Russian princess,
that doesn't make me a Russian princess, even if my friends and
acquaintances are willing to indulge my fantasy. Nor am I a
great horned owl just because, as I have been told, I happen to
share some personality traits with those feathered creatures.''
I've got to say, I found this rather offensive. And it says
to me that the witness really doesn't know anything and
probably has never met a transgender child who is going
through, in almost every case, a very difficult experience of
finding themselves. And I believe that the Department's
guidance will help schools all over the United States in
preventing the kind of violence and harassment that these
transgender kids find too often. So that's all I'm going to say
on that. You know, I think it's very regrettable that that
comment was put into the record and I think it's highly
offensive.
Now, I'd like to ask you a question, Mr.----
Ms. Heriot. Well, could I comment on that, please?
Ms. Lofgren. No, it's just my opinion. You have stated your
opinion.
Ms. Heriot. I think you'll find that many people find it
very offensive that the Department of Education thinks that
they can be----
Ms. Lofgren. I think you're a bigot, Lady. I think you are
an ignorant bigot. I think you are an ignorant bigot and anti--
--
Mr. King. The gentlelady from California will suspend. You
are out of order.
Ms. Lofgren. She's out of order. It's my time, Mr.
Chairman.
Mr. King. We don't call names in this Committee. And you'll
not be recognized to do that.
Ms. Lofgren. Mr. Chairman, it is my time and I would just
like to say that we allow witnesses to say offensive things,
but I cannot allow that kind of bigotry to go into the record
unchallenged. Now, I don't want to get into a debate about it.
Ms. Heriot. Does that mean you think I am a Russian
princess?
Ms. Lofgren. I have no idea. I'd like to ask a question of
Mr. Narang.
I'd like to ask you, sir, you have agreed, I think, that
Congress is ill-equipped to engage in the kind of work that
agencies perform in these very technical and complex areas. I'm
wondering if you have suggestions on how the Congress might
approach some of these items, for example, in the science area,
that are so complex and yet have a greater direction than has
been complained of here today by some?
Mr. Narang. Sure. Thank you, Congresswoman. Science is
essential to grounding strong and effective regulation. I think
that Congressman--congressional staffers should generally defer
to the consensus, the clear consensus on scientific issues
where there's ambiguity. I think that there, you know,
generally is left--is better left to the agency experts,
especially the agency scientists to make the--you know, to make
the best determinations grounded on the most up-to-date and
comprehensive science and scientific findings.
So I think there's a role there for both Members of
Congress and their staff to pay close attention to what the
consensus of scientific findings are. But at the same time,
it's--we need to rely on agency scientists when it comes to the
difficult questions that require that kind of expertise.
Ms. Lofgren. I would just note that I think it's not
limited to science. I recently had occasion to reread section
1201 of a statute, the DMCA. And at the end of the statute, we
go on in some precision about beta, and VCRs, and Betamax, and
magnetic strips. And you look at it now, it seems laughable
that we would have put that in the statute about piracy.
Obviously, people are opposed to piracy, but we would have been
so much better off had we established goals and then allowed,
instead of technology, that became dated and now looks
ludicrous.
Mr. Narang. So I entirely agree. If Congress wants to enact
statutes that will stand the test of time that will be able to
address emerging regulatory issues as they emerge, it's better
left to the agency experts and it's better that Congress allow
for those gaps to be filled by the experts as circumstances
require.
Ms. Lofgren. I yield back, Mr. Chairman.
Mr. King. The gentlelady's time has expired and she yields
back the balance.
And the Chair recognizes the gentleman from Georgia, Mr.
Johnson.
Mr. Johnson. Thank you, Mr. Chairman.
Ms. Heriot, I think we can agree that the Framers of the
Constitution were careful not to consolidate government power,
or governmental power within any one of the three branches of
government. Isn't that correct?
Ms. Heriot. Uh-huh.
Mr. Johnson. And we would also agree that the Framers
prevented consolidation of power into any one branch of
government by separating or dividing governmental functions
between the three branches of government. Isn't that correct?
Ms. Heriot. That, and checks and balances. So there's a
mixture of powers as well as a separation of powers, but not a
perfect separation of powers.
Mr. Johnson. It's actually a diffusion of power between the
three branches of government. Wouldn't you agree?
Ms. Heriot. In a sense.
Mr. Johnson. Yeah. It's a check and balance.
Ms. Heriot. Checks and balances, yes.
Mr. Johnson. So no particular power is too concentrated
into any one particular branch so as to adhere to the concept
of separation of powers. Correct?
Ms. Heriot. With checks and balances.
Mr. Johnson. That's right. And so the checks and balances
have been in place since the founding of this great Nation, or
at least since the passage of the Constitution. You would
agree?
Ms. Heriot. Some of them don't work so well anymore and
that's part of why we're here. I think the need to----
Mr. Johnson. Yeah, but----
Ms. Heriot [continuing]. Design institutions that have the
same sort of checks and balances that the Framers envisioned
and, for example, I think that we----
Mr. Johnson. Well, hold on 1 second. Hold on 1 second. I'm
asking the questions. I would like for you to respond----
Ms. Heriot. I thought I was doing that.
Mr. Johnson [continuing]. To my questions. So are you
arguing that we need a constitutional convention or a
constitutional amendment to reign in executive overreach? Is
that what you are arguing?
Ms. Heriot. No. I think we can do it a lot more easily than
that.
Mr. Johnson. Okay. We can do it with the powers that the
Framers have invested in this branch of government. Isn't that
correct?
Ms. Heriot. And I have some proposals for you.
Mr. Johnson. I would hope that one day we would get to your
proposals as opposed to having show hearings out of Task Forces
created for political purposes.
Ms. Heriot. My proposals are in my written testimony.
Mr. Johnson. Well, I'm not so much arguing with you.
Ms. Heriot. I'd love to talk about them.
Mr. Johnson. I'm arguing with the body, with the--with my
Republican friends who control this body. I mean, I view it as
unnecessary to have a Task Force on Executive Overreach when
the legislative branch has the very power to check and balance
any perceived overreach by the executive branch.
Ms. Heriot. And I've got some ideas for you.
Mr. Johnson. Well, do you agree with me that this hearing
seems to be unnecessary?
Ms. Heriot. Well, if you turn----
Mr. Johnson. I'll put it like this: What would be a better
use of our time is perhaps marking up one of the legislative
proposals that are outlined in your testimony? Isn't that
correct?
Ms. Heriot. I would love to work on that with you. What I
would like to do is try and get----
Mr. Johnson. What we are doing today--what we are doing
today is basically wasting time. Aren't we?
Ms. Heriot. Well, you see, the thing is, what I think is
going on here is that we're talking past each other.
Mr. Johnson. Well, we are wasting time is what we're doing.
Ms. Heriot. Some of the Democrats are talking about
regulations, about rules, and the people that have been invited
by the Republicans are talking less about the rules and more
about the guidances. The notion that we have certain kinds of
methods by which administrative agencies make law, in a sense,
through rule.
Mr. Johnson. Ms. Heriot, you are a Republican yourself, are
you not?
Ms. Heriot. And As Mr. Narang was saying, maybe----
Mr. Johnson. Are you a Republican?
Ms. Heriot [continuing]. The procedures are a little gummed
up. So what's happening is everything is being bypassed----
Mr. Johnson. Are you a Republican, Ms. Heriot?
Ms. Heriot [continuing]. With guidances, and we need to put
some limits on guidances.
Mr. Johnson. Okay. All right. So, Ms. Heriot, I want to
move from you and ask Mr. Narang to answer my question.
Are we wasting time here, sir?
Mr. Narang. My response would be that if Congress has a
particular problem with a guidance that's not going through
rulemaking, pass a law to make that guidance go through
rulemaking. If Congress has a particular problem with a
regulation, pass a law to repeal that regulation. That is well
within the powers of Congress and would be a clear direction to
agencies.
Mr. Johnson. Well, and would you discuss Congress' power of
the purse as it bears on the issue of alleged executive
overreach?
Mr. Narang. There are many mechanisms at Congress'
disposal, the power of the purse, and many mechanisms within
Congress' dispensing of appropriations to control perceived
executive overreach.
Mr. Johnson. Is congressional gridlock a contributing
factor to any executive overreach that may be claimed?
Mr. Narang. I think it could be.
Mr. Johnson. Do you think it is in this, given the paucity
of legislative action by this particular Congress, compared to
other Congresses? This one has been known as a do nothing
Congress, if not the most do nothingest Congress in the history
of the Nation. Would that bear upon this issue of alleged
executive overreach?
Mr. Narang. So if Congress has passed a law, that law
delegates authority, in most circumstances, to agencies.
Agencies use that authority. If subsequently Congress--a
congressional inaction occurs, then those agencies are still
more than allowed to use the congressional authority they have
to issue regulations that protect the public's health and
safety.
Mr. Johnson. Well, Ms. Heriot, I would love to ask you that
question, but I know that you will take it off wildly in a
different direction.
So at this point, I will waive--I will yield the balance of
my time.
Mr. King. The gentleman from Georgia returns the balance of
his time.
And this concludes today's hearing. And I want to thank all
the 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.
I thank the witnesses and I thank the Members and the
audience, and this hearing is now adjourned.
[Whereupon, at 4:27 p.m., the Task Force was adjourned.]
A P P E N D I X
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