[Senate Hearing 114-517]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-517

        EXAMINING THE USE OF AGENCY REGULATORY GUIDANCE, PART II

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
               REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                                OF THE

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 30, 2016

                               __________

                   Available via http://www.fdsys.gov
 
       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs
                        
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                  Christopher R. Hixon, Staff Director
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
                     Laura W. Kilbride, Chief Clerk
                   Benjamin C. Grazda, Hearing Clerk


       SUBCOMMITTEE ON REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                   JAMES LANKFORD, Oklahoma, Chairman
JOHN MCCAIN, Arizona                 HEIDI HEITKAMP, North Dakota
ROB PORTMAN, Ohio                    JON TESTER, Montana
MICHAEL B. ENZI, Wyoming             CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska
                     John Cuaderess, Staff Director
                  Eric Bursch, Minority Staff Director
                      Rachel Mairella, Chief Clerk
                           
                           
                           C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Lankford.............................................     1
    Senator Heitkamp.............................................     2
    Senator Ernst................................................     9
Prepared statement:
    Senator Heitkamp.............................................    31

                               WITNESSES
                        Thursday, June 30, 2016

Paul Noe, Vice President, Public Policy, American Forest and 
  Paper Association and American Wood Counsel....................     4
Clyde Wayne Crews, Vice President for Policy, Competitive 
  Enterprise Institute...........................................     5
Amit Narang, Regulatory Policy Advocate, Public Ciziten..........     7

                     Alphabetical List of Witnesses

Crews, Clyde Wayne:
    Testimony....................................................     5
    Prepared statement...........................................    41
Narang, Amit:
    Testimony....................................................     7
    Prepared statement with attachment...........................    93
Noe, Paul:
    Testimony....................................................     4
    Prepared statement...........................................    32

                                APPENDIX

Responses to post-hearing questions for the Record:
    Mr. Noe......................................................   144
    Mr. Crews....................................................   148
    Mr. Narang...................................................   153

 
        EXAMINING THE USE OF AGENCY REGULATORY GUIDANCE, PART II

                              ----------                              


                        THURSDAY, JUNE 30, 2016

                                 U.S. Senate,      
                        Subcommittee on Regulatory,        
                      Affairs and Federal Management,      
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. James 
Lankford, Chairman of the Subcommittee, presiding.
    Present: Senators Lankford, Ernst, and Heitkamp.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. Good morning. Welcome to today's 
Subcommittee hearing, ``Examining the Use of Agency Regulatory 
Guidance, Part II.'' Doesn't that sound exciting? The sequel is 
always better than the first, right? [Laughter.]
    This hearing builds on our oversight of the subject, 
including the hearing held last September.
    Guidance is one of the most common ways that agencies 
communicate to stakeholders and the American public their 
interpretations of the statutes and regulations they administer 
and enforce. However, guidance receives little congressional 
oversight. A major reason why guidance attracts so little 
oversight is because guidance is hard to pin down, quite 
frankly.
    In the positive, what is guidance as opposed to what it is 
not? Guidance, for example, is not a rule since it is not 
promulgated pursuant to the requirements of the Administrative 
Procedure Act (APA). Therefore, guidance cannot bind the public 
in any way that the regulation it interprets could not. 
Congress specifically exempted guidance documents from APA's 
rulemaking requirements because Congress saw the need for 
agencies to issue timely information to affected parties.
    And timely information is indeed useful when it is used to 
clarify existing regulatory authorities, a need which has 
become even more apparent with the increasing complexity of the 
administrative state.
    Small businesses, schools, and other regulated parties want 
to know how they must comply with Federal requirements, but it 
is also hard to tell when a guidance document merely clarifies 
existing regulatory authority as opposed to when it advances 
new substantive policies, polices that should have been 
subjected to the rigor of the rulemaking process.
    Why is this distinction between guidance and regulation so 
important? Because guidance can be changed at the whim of an 
agency as an administration's policy preferences change. 
Guidance is additionally problematic because it comes by many 
names, and agencies do not post them centrally. Therefore, we 
cannot fully know how many of these documents exist or the 
economic effects of their instructions.
    To the extent that agencies can get away with improperly 
issuing guidance documents, any administration, Republican or 
Democrat, can advance policies while running roughshod over 
procedures Congress has enacted to ensure broad public input 
and agency accountability. This results in unlawful procedure, 
uncertainty, unaccountability, inconsistency, and a startling 
lack of transparency.
    Today we have witnesses with expertise in administrative 
law and institutional experience in overseeing and coordinating 
guidance processes. I hope to have a conversation about how we 
in Congress can better understand the role of guidance, the 
regulatory process, and the problems posed by improperly issued 
guidance documents.
    With that, I recognize Ranking Member Heitkamp for her 
opening statement.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. Thanks, Chairman Lankford.
    And thank you all for coming in. It is the hardworking red-
headed committee, I want you to know. [Laughter.]
    I am sorry, Joni.
    Senator Lankford. Joni is an honorary Member today.
    Senator Heitkamp. She is. Of course, we do not know what 
color her hair used to be, but I think we are going to call you 
a redhead. [Laughter.]
    Thanks so much for coming in. This is a touchy subject 
because when you look at guidance, on one hand, it can be 
critically important to helping agencies kind of clarify their 
position, giving greater direction and knowledge to those who 
are regulated. But on the other hand, it can be used as a 
shortcut. And we have seen it used both ways, and one of the 
great challenges that we have is trying to figure out how we 
are going to balance those two things.
    And as Chairman Lankford said, what are we going to do to 
actually get to the point where we feel comfortable here that 
guidance is not used as a shortcut to reinvent or to restate 
current regulation in a way that is inconsistent with either 
the law or inconsistent with past regulation?
    And so I am going to just submit my opening statement for 
the record\1\ and welcome you all, but tell you that that 
really is the challenge that we have on this Committee, is 
trying to figure 
out--because we have seen it both ways--trying to figure out 
how we do what we are supposed to do, which is provide 
oversight over agencies, but also give both the regulators and 
the regulated the option to have clarification. That can be 
enormously useful, especially in the business world.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Heitkamp appears in the 
Appendix on page 31.
---------------------------------------------------------------------------
    Senator Lankford. Great. Thank you.
    At this time we will proceed with testimony from our 
witnesses.
    Paul Noe is the Vice President for Public Policy at the 
American Forest & Paper Association (AF&PA). Mr. Noe works on a 
wide variety of issues, including regulatory reform, renewable 
energy, environmental regulation, workplace health and safety.
    Mr. Noe served as a counselor to the Administrator of the 
Office of Information and Regulatory Affairs (OIRA), where he 
helped lead the development of regulatory policy and the White 
House review of regulation in the George W. Bush 
Administration.
    He also served as senior counsel to the Senate Committee on 
Governmental Affairs, focusing on regulatory improvement. Mr. 
Noe co-chairs the American Bar Association's (ABA) 
Administrative Law and Regulatory Practice Committee on 
Legislation and has published on the topic of regulatory 
policy.
    Wayne Crews is the Vice President for Policy, and Director 
of Technology Studies at the Competitive Enterprise Institute 
(CEI), focusing on the impact of government regulation, anti-
trust, and competition in environmental and privacy issues. Mr. 
Crews publishes an annual report on the Federal regulatory 
State called ``Ten Thousand Commandments'' and has written and 
edited many books.
    Prior to joining CEI, Mr. Crews worked at the Cato 
Institute, the U.S. Senate, and the Food and Drug 
Administration (FDA).
    Amit Narang is the Regulatory Policy Advocate for the 
Public Citizen's Congress Watch Division. I do not know why 
that would be so hard. He focuses on Federal regulatory process 
and has testified many times before Congress on legislative 
proposals and oversight of Federal agencies as it relates to 
the rulemaking process. He has been quoted in many media 
outlets and has appeared on television and radio broadcasts.
    Mr. Narang also serves on the Advisory Board of the 
Administrative Law Review.
    I would like to thank all of our witnesses today for 
coming, and I appreciate your expertise and your preparation 
time to actually submit the written testimony ahead of time.
    It is the custom of this Subcommittee to swear all 
witnesses in, so I would ask you to please stand and raise your 
right hand.
    Do you swear the testimony you will give before this 
Committee will be the truth, the whole truth and nothing but 
the truth, so help you, God?
    Mr. Narang. I do.
    Mr. Crews. I do.
    Mr. Noe. I do.
    Senator Lankford. Thank you. You may be seated. Let the 
record reflect all the witnesses answered in the affirmative.
    We are using a timing system today so we can have ample 
time for us to pepper you with questions. So if you would, we 
will start with Paul Noe and ask you to go first. There will be 
a timing device there in front of you. Be as close to 5 minutes 
as you can. Obviously, if you go a little bit over we are fine. 
If you go under, you get bonus points. [Laughter.]
    Fair enough?
    Mr. Noe. Thank you, Mr. Chairman.
    Senator Lankford. Mr. Noe, you are recognized.

   TESTIMONY OF PAUL NOE,\1\ VICE PRESIDENT, PUBLIC POLICY, 
 AMERICAN FOREST & PAPER ASSOCIATION AND AMERICAN WOOD COUNCIL

    Mr. Noe. Chairman Lankford, Ranking Member Heitkamp, and 
Senator Ernst, thank you for the opportunity and the honor to 
testify before you today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Noe appears in the Appendix on 
page 32.
---------------------------------------------------------------------------
    The issue of agency use of guidance is an important and 
timely issue, and AF&PA and American Wood Council (AWC) greatly 
appreciate the fact that you are doing the hard work of 
oversight in grappling with these issues to make a better 
regulatory process, and that is very commendable.
    I just wanted to note at the beginning that my wife, Wendy, 
and my children, Helen and John, are here to see the hearing 
today. And Wendy has put up with me for over 20 years talking 
about these issues at home. And my kids are kind of puzzled 
about what I do for a living, so I thought it would be good to 
show them today's hearing.
    The issue of agency use of guidance was a concern back when 
I worked as senior counsel of this Committee under Chairman 
Fred Thompson, Ted Stevens, and Bill Roth, and when I was at 
the Office of Management and Budget (OMB) as a counselor to 
Administrator John Graham. And I can tell you from working for 
regulated industries that this is much more than an academic 
issue. It has profound consequences for the functioning of the 
regulatory process, important economic and also social 
consequences. And AF&PA and AWC applaud the work that you are 
doing and we hope further improvements can be made.
    Simply put, we face a fundamental problem. We have had a 
well-established process for the review of regulations that has 
worked for over 35 years, with oversight from the Office of 
Management and Budget, but that process is quite deficient when 
it comes to guidance documents.
    Originally, the Executive Order (EO) that President Reagan 
issued governing regulatory review and OMB oversight covered 
all rules. And by that I mean not only legislative rules known 
as regulations but also guidance documents in the form of 
interpretive rules and agency statements of policy.
    When President Clinton came into office, he replaced that 
order with Executive Order 12866. And that order attempted to 
just focus on significant regulations, but the problem is it 
neglected guidance documents. By its own terms, it only applied 
to rules that, ``the agency intends to have the force and 
effect of law.'' So that excluded guidance documents.
    An attempt was made to address this issue, and the 
Administration of George W. Bush took two steps. First, OMB 
issued a Bulletin for Agency Good Guidance Practices. And 
simply put, it has a few basic elements.
    First, agency procedures for the approval and use of 
significant guidance documents, with approval by appropriate 
senior officials and direction that agency employees should not 
depart from guidance without appropriate justification and 
supervisory concurrence.
    Second, there were standard elements, including that the 
agency employees were directed to avoid inappropriate, binding, 
mandatory language in guidance.
    And third, there were public access and transparency and 
feedback procedures. There was the basic presumption that there 
ought to be pre-adoption notice and comment if a guidance was 
going to have a particularly significant impact--economically 
significant guidance.
    This Bulletin was rooted in the recommendations of 
nonpartisan expert organizations that have stood for decades. 
It was not controversial. When President Obama came into office 
he retained the OMB Bulletin. And as you know, it is in effect 
today.
    The second step was to amend the Clinton order to provide 
simple procedures for OMB review of significant guidance. And 
those procedures were streamlined compared to what is done for 
regulations. And it was simply the following three things:
    First, agencies should provide OMB advance notification of 
the most significant guidance. Second, only if OMB asks, they 
should have the opportunity to call in a guidance for review 
with a brief explanation of the need for the guidance. The 
burden was on OMB to choose what to review and also to tell the 
agency if it needed a little bit of time to review it. These 
provisions were also non-controversial, but unfortunately they 
became wrapped up in other issues in that order that were 
controversial. So when President Obama came in, he repealed 
that order.
    They did put in place a memo saying OMB will continue to 
review guidance the way they did under the previous Clinton 
order, but there are some serious problems with that. One, no 
clear authority existed. But more importantly, there were no 
procedures for OMB to have a heads up as to what was out there. 
And you cannot review what you do not know exists. I had desk 
officers telling me they first knew about a guidance from a 
story in the Washington Post. And you know there is a breakdown 
in the management and review process when that is the case. And 
that was common.
    I will leave my remarks at that, but just thank you again 
for what you are doing.
    Senator Lankford. Thank you. Mr. Crews.

 TESTIMONY OF CLYDE WAYNE CREWS,\1\ VICE PRESIDENT FOR POLICY, 
                COMPETITIVE ENTERPRISE INSTITUTE

    Mr. Crews. I am Wayne Crews, Vice President for Policy at 
the Competitive Enterprise Institute. We are a libertarian 
public policy and advocacy group. And I really appreciate and 
thank the Committee for the invitation to address agency 
subregulatory guidance today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Crews appears in the Appendix on 
page 41.
---------------------------------------------------------------------------
    I will give my conclusion first, which is to say that 
subregulatory guidance from the Executive and independent 
agencies needs to be treated more like regulation. That means 
codifying elements of OMB's 2007 Good Guidance Practices, 
Federal Register publication, more intense OMB review, and 
questioning agencies' self-assertions that guidance is not 
significant. Furthermore, the Web posting of significant 
guidance, which is all over the map, needs to be harmonized and 
expanded.
    Congressional directives matter, too. We have seen recent 
directives regarding guidance disclosure and retrospective 
review in Financial Services, the Department of Labor (DOL), 
the Department of Health and Human Services (HHS), the 
Department of Transportation (DOT), and the Department of 
Housing and Urban Development (HUD), Appropriations. In 
addition, the legislative history indicates that the 
Congressional Review Act's Resolutions of Disapproval apply to 
guidance as well if the Congress chooses to elevate such 
concerns.
    Guidance, to me, has become more worrisome in a system that 
already does not follow APA procedures for ordinary notice-and-
comment rulemaking enough, or conduct enough OMB review. 
Senators may have noticed there is still no sign of the 2016 
OMB draft report to Congress on the costs and benefits of 
regulations. So Congress has neglected its role in regulatory 
oversight, as June's House task force's looking at Article I 
issues, and regulatory issues, and delegation issues make 
clear.
    Indeed, just as some guidance needs to be treated more like 
regulations, regulations, in turn, need to be treated more like 
normal laws passed by Congress and affirmed. In written 
testimony, I put guidance in context with ordinary laws, of 
which there are a few dozen annually, and with regulations, of 
which there are over 3,000 annually. But beyond those, Congress 
lacks and needs a clear grasp on the amount and costs of the 
many of the thousands of executive branch and Federal agency 
guidances and memoranda with sometimes practical, if not always 
technically legally binding, regulatory effect.
    I have taken a partial numerical inventory, and there are 
580 acknowledged, significant agency guidance documents now in 
effect, but many thousands of other secondary guidances are 
subject to too little scrutiny, democratic accountability, or 
true knowledge of significance. In an analogy to astronomy, I 
have taken to calling this material regulatory ``dark matter.''
    On page 19 of my written testimony, I note several 
prominent examples, such as HUD guidance on rentals to those 
with a criminal record, and Labor Department guidance; 
guidances on independent contracting, and on joint employment. 
In the financial sector alone, the St. Louis Fed lists 74 
pieces of significant guidance in play across final agencies, 
while the Conference of State Bank Supervisors points to over 
1,400 so-called directives.
    Guidance has been an issue for decades, of course, but 
today's frontier economy is highly complex, and subregulatory 
guidance can easily cross the line of economic significance, 
such as ominous advisory opinions promised by the Federal 
Communications Commission (FCC) in the wake of its new Net 
Neutrality rule. Similarly, the Federal Aviation Administration 
(FAAs) brand-new 624-page, highly prescriptive drone rule 
should have been a law from Congress, but in my quick survey of 
it I count at least six areas where the agency anticipates 
issuing new guidance in this frontier sector.
    I realize that businesses often regard guidance as vital, 
and I do not wish to dismiss those concerns other than to 
stress that safety, public health, financial stability, 
privacy, and the like, are competitive features too, and 
decentralized stakeholders have a disciplinary role to play 
that can be undermined by too much regulatory zeal.
    Reforms should come from a stance recognizing that not 
every matter is a public policy question; that so-called market 
failures may have political causes and coercive central 
regulation is not always the answer, especially if guidance 
inappropriately takes the place of normal regulations or laws.
    So I support the Subcommittee on increased OMB review and 
enhanced APA exposure, as well as establishing guidance 
principles and legislation. But keep uppermost in mind too that 
even normal rules are not always getting the proper APA 
scrutiny.
    In Part I of this hearing last September, Senators fretted 
that the process by which an agency internally elects to issue 
guidance on the one hand or normal regulation on the other is 
something of a black box. Surely we do not want unknown aspects 
of the regulatory enterprise increasingly outweighing the 
known, so I urge close interaction between this important 
Subcommittee, the public, and the entrepreneurial sector not 
just to get things done but to see what can be undone for the 
public good.
    Thank you very much.
    Senator Lankford. Mr. Narang.

TESTIMONY OF AMIT NARANG,\1\ REGULATORY POLICY ADVOCATE, PUBLIC 
                            CITIZEN

    Mr. Narang. Chairman Lankford, Ranking Member Heitkamp, and 
distinguished Members of the Subcommittee, thank you for the 
opportunity to testify today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Narang appears in the Appendix on 
page 93.
---------------------------------------------------------------------------
    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 have made our food and drugs 
safer. They have 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 have made our cars safer. They have outlawed 
discrimination on the basis of race and gender, and much more.
    Guidance has played a crucial role in securing these 
benefits for American consumers, working families, and the 
broader public. A brief survey of guidance issued in the last 
year alone confirms its vital role in protecting the public's 
health, safety, and financial security.
    In March of this year, the Centers for Disease Control 
(CDC) issued guidance to address the growing crisis of opioid 
medication addiction that has led to a dramatic increase in 
hard-drug addiction and fatal overdoses across the country.
    After the Flint, Michigan lead poisoning crisis, the 
Environmental Protection Agency (EPA) issued guidance to 
address allegations that certain localities and cities were 
cheating on that test by pre-flushing taps to lower the amount 
of lead detected in the taps. This week the environmental group 
Natural Resources Defense Council (NRDC) released a report 
showing that over 5,000 water systems across the United States 
violated lead testing standards in 2015.
    The Equal Employment Opportunity Commission (EEOC) issued 
guidance this month prohibiting employers from discriminating 
against job applicants on the basis of national origin, meaning 
not only the applicant's place of origin but also ethnic 
origin. This continues the EEOC's traditional use of guidance 
to ensure American workplaces are free of racial, gender, or 
sexual orientation discrimination. It is important to note that 
Congress has prevented the EEOC from issuing binding rules to 
enforce Title VII of the Civil Rights Act.
    The Consumer Financial Protection Bureau (CFPB) issued 
guidance late last year to curb increasingly egregious debt-
collection practices at debt collection agencies across the 
country. Such practices include threatening consumers who owe 
debt; illegally visiting consumers at their homes and 
workplaces; and calling consumers' credit references, 
landlords, and supervisors at work to jeopardize the consumer's 
job and reputation.
    Guidance is also routinely requested by and designed 
exclusively for the benefit of industry stakeholders. Among the 
most prominent examples are No Action Letters. Agencies 
routinely issue letters that provide safe harbors for 
businesses requesting clarity in the face of regulatory 
uncertainty. Agencies use these letters to give businesses 
confidence that their activities will not result in enforcement 
actions against them. The Securities and Exchange Commission 
(SEC), in particular, issues many No Action Letters, and a 
quick glance at the SEC's website confirms that it has already 
issued hundreds of No Action Letters to businesses this year 
alone.
    In short, when our regulatory system works efficiently and 
effectively, the public benefits and regulatory uncertainty is 
reduced. Tragically, our regulatory system is currently in 
crisis, plagued by rulemaking delays that are unacceptable and 
growing, which in turn costs lives, leaves consumers and our 
economy vulnerable, and results in irreversible damage to our 
environment and climate.
    As the saying goes, protections delayed are protections 
denied. This week Public Citizen released a groundbreaking 
report that comprehensively analyzed all rulemakings listed in 
the Unified Regulatory Agenda over the 20 years. The results 
were striking and deeply troubling. The full report is attached 
to my written testimony but I would like to share some key 
findings.
    At many agencies charged with protecting the public's 
health and safety, such as the Department of Labor or the EPA, 
it takes longer than a Presidential term to complete an 
economically significant rulemaking. For example, at the 
Occupational Safety and Health Administration (OSHA), the 
primary regulator of workplace safety, it takes an astounding 
12.5 years to complete an economically significant rule. Adding 
in optional but time-consuming procedural steps leads to 
substantially more delay.
    Economically significant rules that included advance notice 
of proposed rulemaking took 4.4 years to complete across 
agencies, over twice as long as economically significant rules 
without an Advanced Notice of Proposed Rulemaking (ANPRMs). 
Conducting regulatory flexibility or small business impact 
analyses leads to longer rulemakings at most agencies, 
sometimes twice as long as compared to rules without these 
analyses.
    And the trend is going in the wrong direction, with 
economically significant rulemakings taking longer and reaching 
new records under this Administration. So far, economically 
significant rules completed in 2016 took 3.8 years on average, 
contradicting those who claim that the Obama Administration is 
rushing rules out the door this year.
    Our report finds that rulemaking delays are concentrated in 
economically significant rules, meaning the rules that provide 
Americans with the greatest benefits but also take the longest 
to finalize. The bulk of new regulations that are minor and 
technical in nature do not encounter significant delay. This is 
directly relevant to proposals which impose a process similar 
to the one for economically significant rules onto guidance 
documents, including notice and comment, cost-benefit analysis, 
and OIRA review.
    These proposals will do nothing to fix the delays revealed 
in our report. Instead, the proposals simply expand those 
delays to another important area of agency action, which is 
designed to address regulatory uncertainty efficiently.
    While the available empirical evidence demonstrates that 
there is no abuse of guidance documents in order to evade the 
notice-and-comment rulemaking process on a widespread basis, it 
is impossible to ignore the strong incentive agencies have to 
avoid what has become an increasingly inefficient and 
dysfunctional rulemaking process across regulatory sectors and 
at virtually every agency.
    If the Committee believes that agencies should be taking 
action through a notice-and-comment rulemaking rather than 
through guidance documents, the solution is to make the notice-
and-comment process more efficient and streamlined rather than 
forcing guidance documents into the notice-and-comment 
framework reserved for rulemaking.
    Public Citizen stands ready to work with lawmakers across 
the aisle to make our regulatory system work effectively for 
consumers, working families, and the public.
    Thank you, and I am happy to answer any questions you have.
    Senator Lankford. Gentlemen, thank you for your testimony 
as well.
    The Ranking Member and I will defer our questions toward 
the end, and I will recognize Senator Ernst.

               OPENING STATEMENT OF SENATOR ERNST

    Senator Ernst. Great. Thank you, Mr. Chairman. And thank 
you, Ranking Member Heitkamp.
    To our witnesses, thank you for being here today. Wow, 
regulations; it is always really an exciting topic. [Laughter.]
    It is for us anyway. So thank you for taking the time to 
join us today.
    First, Mr. Crews, in your testimony you state that in the 
absence of Federal legislation or an APA-compliant legislative 
rule, regulatory ``dark matter''--I love that--regulatory 
``dark matter'' will continue to flow out of Washington and 
increasingly impact State and local governments--and I have 
worked at both the State and the local government before--and 
also our personal lives.
    Mr. Noe also acknowledged the need for a legislative 
solution in his testimony. In your opinion, what would a 
legislative or regulatory solution to this problem look like? 
What does that look like?
    Mr. Crews. As I indicated too, part of the context for this 
debate is that, in the ordinary notice-and-comment rulemaking 
system that we have now, it is already the case, as the 
Government Accountability Office (GAO) report put out recently, 
that 44 percent of the rules come through with no notice of 
proposed rulemaking; 33 percent of major rules come out with no 
notice of proposed rulemaking. So we already have a breakdown 
in the rulemaking as it stands.
    So what concerns me here is that we do need to strengthen 
the rulemaking process itself, and at the same time recognize 
we are in an era where agencies are tempted to use guidance and 
avoid the rulemaking process. And you can see these hints of 
things coming down the pipeline. As I had mentioned the FCC, 
for example, it says in its new rule--it is a 400-page rule. 
Page 80, it says, well, we are going to be like the Federal 
Trade Commission (FTC) from now on and we are going to issue 
advisory opinions to telecommunications infrastructure firms, 
so before you move, give us a call and let us know.
    The same in the wake of Dodd-Frank. In the Consumer 
Financial Protection Bureau they have said, well, with respect 
to unfair trade practices, we are just not going to issue 
regulations. You have to check with--so you run a real risk if 
you have lost control of the regulatory process, which is 
already being debated heavily in Congress, looking at things 
like the Regulations from the Executive in Need of Scrutiny 
(REINS) Act, ``one in, one out,'' Regulatory Reduction 
Commission. You already have that to deal with.
    If you have guidance on top if it, where agencies are even 
getting instructed that, well, if Congress does not act, we are 
going to go ahead and do what we can without that action, you 
run into a real concern of losing control of it. So at the very 
least--you ask what you do legislatively. At the very least, 
you have to start treating the guidance more like the 
regulation should be treated but may not necessarily be getting 
treated, and review them.
    And we will engage in some interesting things here, but you 
do have to be concerned about agencies not acknowledging when a 
rule or a guidance, whatever the case may be, is something 
significant that ought to get more scrutiny or that ought to 
actually even be a law. So in the beginning--so I think you 
want to give guidance more APA-type treatment, and do that 
legislatively if you can.
    Senator Ernst. And what kind of obstacles would you see for 
us to try and do, such as those legislative fixes?
    Mr. Crews. Regulatory reform is difficult and it comes 
around every generation. In the 1980s you had Brookings and 
other groups getting together with free-marketeers and deciding 
we would deregulate telecommunications and transportation. Then 
in the mid-1990s you had the Contract with America. And you 
mentioned State and local unfunded mandates, reform at that 
time, and things of that sort.
    Now we are at a point where I think it is very difficult 
for both parties--and, I think that is the tone to take. Both 
parties have an interest in seeing a growing economy. And we do 
have issues that make that important. With the national debt, 
if interest rates were to--even if you balance the budget now, 
if the interest rates started going to normal rates now, you 
would quickly tamp down the economy again. So you will start 
thinking about regulatory reform, I believe.
    The obstacles are--it is very controversial. And, there are 
clashes of visions about regulation, about what it is that 
really protects the public, and whether it is top-down 
regulation that does that or whether it is other kinds of 
disciplinary forces that do. So that is one of the obstacles.
    But I do still think there are ways that groups can get 
together. The ``one in, one out'' notion, for example, was 
bipartisan. That had been proposed by Senator Warner a few 
years ago. I think there will be some--you could easily get 
some bipartisan interest on more disclosure for regulations. I 
do not think it is very objectionable that the amount of 
guidance that comes out, for example, that is not catalogued 
could be catalogued better, and that the amount of significant 
guidance that does not get acknowledged ought to be 
acknowledged, and things like that.
    And you have precedents by which you can do that. There was 
a report back in the 1990s called ``The Regulatory Program of 
the U.S. Government.'' It looked just like the Federal budget. 
It was a fat document. It was red, white, and blue, had the 
eagle on it. And at the back was an appendix that listed 
numbers of rules, pages in the Federal Register, whether there 
had been a cost-benefit analysis, whether there was cost 
analysis. And even just knowing things like the percentage of 
rules that do not have a benefit assessment is good----
    Senator Ernst. Right.
    Mr. Crews [continuing]. But this needs to be applied to the 
regulatory State but also with a lot more awareness of the 
reality of guidance.
    And for starters on that, when I did this inventory of 
guidance, it spread--the agencies were publishing it all over 
the place, calling it significant guidance and cataloging it 
and things like that. It should be harmonized better, but then 
you have also got to get the sub-significant guidance involved 
in there too.
    I will leave it----
    Senator Ernst. And my time is expired.
    Do you mind if Mr. Noe answers that?
    Senator Lankford. Go ahead.
    Senator Ernst. Thank you.
    Mr. Noe. Thank you, Senator.
    I think there is actually a very clear, simple, 
straightforward solution here that should be absolutely 
bipartisan. I have had discussions with the Chairman's staff. 
In my understanding, he is considering elevating the Good 
Guidance Principles that are in the OMB Bulletin and having a 
kind of process for OMB review in legislation.
    We would enthusiastically support that because it would be 
based on recommendations of nonpartisan expert organizations 
that have stood for decades. The agencies would take it 
seriously. There is a compelling public need and it fits 
perfectly within the strong bipartisan tradition of this 
Committee to find commonsense solutions to the regulatory 
system.
    As I said, the OMB Bulletin itself has been non-
controversial, and it is no accident why. It is based on 
recommendations of the Administrative Conference of the United 
States (ACUS), an independent agency with great expertise in 
regulation, whose sole mission in life is to improve the 
regulatory process. They have recommendations from the mid-
1970s and the 1990s that are the foundation for those Good 
Guidance Practices.
    There are also recommendations of the ABA Section of 
Administrative Law and Regulatory Practice that I am a member 
of, from long before I joined the Section--on these basic 
principles.
    So all of that has been utterly non-controversial and has 
enormous support in the academic literature. And, frankly, 
there is an agency right now that did this even before OMB had 
the Bulletin. The FDA has its own Good Guidance Practices 
established in regulation. And what happened is, in the late 
1990s they did this on their own. They thought this would be 
helpful to the regulated community.
    Congress liked the idea so much that when they modernized 
FDA in the Food and Drug Administration Modernization Act 
(FDAMA) of 2000, they mandated that the FDA do this by 
regulation. And they had basic elements that are in the OMB 
Bulletin about having an approval process so the supervisors in 
the agency know what is going on, having standard elements in 
guidance, stating it is nonbinding, making guidance transparent 
to the public, putting it on their website, et cetera. That is 
why the OMB Bulletin has been so non-controversial.
    And the second piece about OMB review was non-
controversial. The only reason, again, that order got rescinded 
was there were other completely unrelated provisions that got 
to be controversial, but the academic literature, the work of 
nonpartisan groups supports all of that.
    So to me that is something concrete you could put in a 
bill. I think Members from both sides of the aisle could agree 
on this. I think you could march in people who worked on this 
for decades, and I think you would have tremendous consensus 
that this is a good thing, because it is about transparency, it 
is about public knowledge about what is going on, it is about 
people understanding when something really important is about 
to change.
    An agency interpretation of its statute or a regulation can 
be enormously consequential. It can be, our policy is X, to, 
tomorrow it is going to be not X. And there ought to be notice 
and comment for that. Even though such interpretive rules are 
not required by law to go through notice and comment under the 
APA, as a matter of good government they should.
    And that is what the Administrative Conference of the 
United States and the ABA have recommended for decades. And I 
think that would be a wonderful piece of legislation to do and 
would help improve this process.
    Senator Ernst. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Lankford. Senator Heitkamp.
    Senator Heitkamp. Mr. Amit, I would like you to engage. 
Obviously nothing is going to happen here unless we do have 
steps that we can all take together. At some point, the paths 
may diverge, but I think there are some steps that we can all 
take together.
    And I think that when you look at, kind of through the lens 
of, we are in charge now so we are happy, but tomorrow we might 
not be in charge and we might not be as happy, so these rules 
should set a framework or a foundation in which to evaluate 
rules no matter which side of the political spectrum is 
promulgating those rules.
    And so I am curious about this path that we are talking 
about, taking these steps, whether this is something you guys 
have thought about. And, is this a process that you think folks 
who tend to be very concerned about limiting regulation could 
see some benefit to?
    Mr. Narang. Sure. Here are our concerns.
    So, I do not see a problem with agencies, of their own 
volition, under their own discretion, like the FDA, instituting 
different processes for certain types of guidance documents--
significant guidance documents. And my understanding is that 
the FDA still continues to do that. It is a process that has 
worked well for them.
    At the same time, I do not agree that a one-size-fits-all 
approach that basically turns the FDA process for significant 
guidance documents into the process for significant guidance 
documents at all agencies is the right way to go.
    One-size-fits-all approaches normally result in unintended 
consequences both for guidance documents that we believe are 
important in protecting the public, like the recent CDC 
guidance, but also guidance documents that are important in 
addressing areas of regulatory uncertainty quickly. And that is 
exactly what No Action Letters do.
    The other concern I have is that guidance documents are 
distinct from rules. The distinction is based on guidance 
documents not being binding. Now, if you were supposed to--if 
Congress was to essentially create a process that resembled 
notice-and-comment rulemaking for guidance documents but kept 
those guidance documents nonbinding, it seems to me that 
agencies then really have no incentive to go--to issue guidance 
documents since they have to go through basically the same 
process as notice-and-comment rules, but with guidance 
documents they are nonbinding and with rules they are binding.
    Senator Heitkamp. Not many times but, we have seen 
significant changes. Let's say these are the rules, and all of 
a sudden in a guidance document those rules do not apply 
anymore.
    So it seems to, say to me that something changed and that 
if you are simply interpreting a rule or a statute that gives 
clarity, but when you simply--when you turn the boat and say, 
now we are going to go in this direction, like OSHA did with 
some of the anhydrous rules, then we get a little suspicious 
and we say, wait a minute; for the last, decades, this was 
perfectly acceptable and legal behavior. We had been 
communicating with OSHA. We had been complying with the rules. 
Now they are telling me we cannot do this and, in fact, we 
could be out of business.
    Don't you think in that case you would argue that a 
guidance, albeit not binding but certainly terrifying in the 
case of the regulated entity, that there should be more notice 
and comment, there should be more availability in terms of 
oversight rather than doing it through a guidance?
    And so I do not want to think that this is, like, ``the'' 
big issue in terms of regulatory reform, but I do believe that 
guidance is used as a shortcut, and that shortcut denies the 
ability of the agency to get enough input to maybe choose a 
path that could, in fact, be a better path and provide more 
safety, provide better outcomes for both the regulated and the 
regulator and the consumers.
    So I think we are at this kind of impasse here where I am 
trying to find which steps we can take that could achieve some 
kind of consensus to actually open the dialogue.
    So I am going to ask you, what about transparency? I mean, 
I think that is a fairly, bipartisan notion that no matter what 
an agency does we have government in the Sunshine in our States 
and we have Freedom of Information here. Isn't transparency 
pretty critical, that if you issue a guidance or a letter to my 
competitor, and I do not know about it and I am still operating 
under another set of rules or another set of, what I think the 
rule says, isn't it important that we have transparency?
    And couldn't you agree with these two that a transparency 
step might be a good way to do oversight on our side but also 
level the playing field for the regulated industries?
    Mr. Narang. I agree that transparency is essential, 
generally speaking, to the regulatory system. And I think there 
is, actually, a great deal of transparency when it comes to 
guidance documents, at least the existence of them, the 
issuance of them. I think there is more transparency than they 
are given credit for from some sources.
    Now, at the same time--so I will give you an example. No 
Action Letters, they are put on the website. Even though they 
are directed to specific parties, they are put on the website 
by agencies to make sure that other parties--competitors but 
also the types of businesses that do the same activities as the 
ones receiving the No Action Letters--also know that their 
activities are not going to result in enforcement actions 
against them.
    Transparency, I think there could be ways to work with, in 
a bipartisan fashion, work with folks that are interested in 
transparency reforms for guidance documents. The devil is 
always in the details. And, generally speaking, I think the 
preferred way to go, in my mind, would be for Congress to push 
agencies to adopt, on an individual basis, when they feel it is 
appropriate, transparency guidelines for issuance of guidance 
documents that impact the public.
    One-size-fits-all approaches in congressional legislation 
can result in unintended consequences, certainly can result in 
additional delay in the regulatory system.
    Senator Heitkamp. Mr. Noe, I have a question for you 
because this is a theme that I have sounded many times from 
this desk here, is that Congress does big things like Dodd-
Frank, they do big things like the Affordable Care Act, and 
they get bogged down and they cannot give a lot of direction 
because it is harder to do big things when you get into the 
details.
    And they just throw this stuff to the agencies and say, 
good luck. And then we all pound the table when they do 
something that results in complaints from constituents and is 
contrary to maybe our philosophy. How do we kind of achieve a 
recapture of that responsibility for legislating in a world 
where we are doing big things that are so complicated?
    Mr. Noe. That is a great question, Senator. And I think 
part of it is Congress helping to channel agency discretion in 
a way that is going to be reasonable. We could have a whole 
separate conversation about regulations on that, but since we 
are talking about guidance today, there are just very 
fundamentally basic principles that are good government 
principles. And this is not, I think, an occasion for 
partisanship, which is there ought to be basic approval 
procedures for guidance in the agencies.
    That is not happening now. Our government should not be the 
worst form of government except for all the others. We ought to 
have a government that is something we brag about. And the idea 
that there are not basic approval procedures in the agencies 
being followed now, there is not basic compliance with these 
simple Good Guidance Practices that are laid out in basically a 
page, that there is not public access to all the guidance--
right now, in Cabinet-level departments, that should be the 
envy of the world.
    There is not public access to these documents. The GAO 
report that was done documents this in detail, but they found 
HHS--and of all departments, that ought to be one of our very 
best--that they did not consistently apply Good Guidance 
Practices. Their website did not link to the guidance 
documents. And GAO, with their experts, were not able to even 
find them on the website. I mean, that is no way to run a 
railroad station. And we are not meeting these basic principles 
for what is competent government? What is transparent 
government?
    And in terms of public feedback procedures, well, just like 
OIRA staff cannot be expected to be responsible for something 
they never heard about, how can the public possibly be held to 
account for guidance documents the GAO cannot even find on the 
agency's website? But that is the State of where we are today.
    So what has happened is it has been over 9\1/2\ years since 
these basic practices were issued by OMB in a Republican 
administration, reaffirmed by a Democratic administration, and 
there is gross noncompliance. I think it is embarrassing.
    And I think it is time for Congress to step in, because no 
rulemaking of any kind, whether it is regulations or guidance, 
happens without the delegation of this authority from Congress. 
It is time for Congress to step in and say, we are going to 
have basic rules of the road for agency guidance, and we are 
going to do what has been bipartisan, has broad support in the 
academic community, and we are going to elevate that into law 
because the agencies are flaunting it.
    I can give you some statistics. Amit talked about empirical 
evidence. I can tell you the numbers on how gross the 
noncompliance has been with the Bulletin. In the entire 9\1/2\ 
years since it has been issued, the agencies have said there 
are about three economically significant guidance that merit 
pre-adoption notice and comment--three.
    In terms of the significant guidance--those are not even 
expected to have pre-adoption notice and comment--just that you 
have an approval process for them; you list basic elements; you 
say you are not binding in the guidance. For those, here is 
what GAO found in a study:
    The Department of Agriculture has issued a grand total of 
34 in 9\1/2\ years. That is about four a year. The Department 
of Labor, about four a year. Education, about four a year. I 
can assure you those agencies issue hundreds of guidance a 
year. A House subcommittee looked into this a number of years 
ago, basically they looked at several major agencies and found 
that, in a 3-year period, they had done thousands of guidance.
    So the notion that when that level of guidance even merit 
the standard, basic Good Guidance procedures being followed, 
and a grand total of three they acknowledge merit pre-adoption 
notice and comment, that is embarrassing. And I think it is 
time for Congress to step in and do something about that, and 
this Committee is the perfect venue for that. That is what is 
in your mission, is to improve the rulemaking process.
    Mr. Narang. Senator, can I add something quickly?
    Senator Heitkamp. Yes.
    Mr. Narang. So good government requires resources, and what 
we are seeing currently is that agency budgets, basically 
outside of the national security agencies, and the 
Transportation Security Administration (TSA) in particular, 
agency budgets have stagnated or declined even. I will give you 
another example, OIRA itself. OIRA staffing has stagnated, 
declined to a certain degree.
    If we are going to impose mandates on both the agencies in 
terms of additional procedural steps for guidance documents, 
and at OIRA in terms of review--I have to say the recent track 
record of OIRA regulatory review is not very good when it comes 
to delay. We have had unprecedented delays under this 
Administration. They have gotten a little bit better under 
Administrator Shelanski but we have had unprecedented delays. 
We are going to need 
to--Congress will need to provide the resources to make sure 
that we have good government. You only get the government that 
you pay for, and so good government really requires good 
resources.
    Senator Lankford. Just as an observation on that: We get 
calls all the time from businesses and from individuals that 
say, we have this overwhelming number of guidance documents and 
new regs that are coming down on us; we have limited resources 
as well.
    And so while I do hear often from government officials 
saying, if you will just give us more money we will be able to 
do better this or that, that is the same thing we hear from 
individuals out in the country, saying, wow, we cannot keep up 
with--as was mentioned before about Dodd-Frank.
    A community bank that has 14 total employees and the number 
of things that are coming at them from three different 
agencies, that are indeed conflicted, is overwhelming them. And 
they say the same thing: We do not have the staff to manage 
this. Nor should they have to be able to have the staff to 
manage that, based on the number of regs that are coming on 
them.
    I want to mention a couple of things, just to be able to--I 
really appreciate the open dialogue on this. And I want this to 
be an open dialogue. And so, Senator Heitkamp, anytime you want 
to jump in, you can jump in this conversation. Let's open this 
up.
    Mr. Narang, I want to be able to bring something up. You 
brought up three different times the No Action Letters. The one 
caveat I would have on that--and by the way, I think the No 
Action Letters are helpful, and I do think that is a document 
that comes out that everyone can say, OK, that looks like it, 
but you have used the term ``safe harbor'' a couple of times.
    That does concern me, because on the SEC's website, it says 
on it the staff are not bound to the statements of previous No 
Action Letters. So it is not really a safe harbor. It is an 
interesting piece of information to know that if you are in 
conflict with SEC you can say, hey, I was trying to follow 
this. But their staff has full ability to be able to say, hey, 
we are not bound by that; that was for that group; we published 
it for your information only. But they are not really bound by 
that. Am I right or wrong on that?
    Mr. Narang. Thank you, Senator. I believe you are right. It 
is one of the general limitations on guidance documents, that 
they are not binding.
    I am unfamiliar with how often SEC takes enforcement 
actions against likeminded--situated businesses--situated in 
the same----
    Senator Lankford. I have no idea on that. We can try to 
find that, but----
    Mr. Narang. So I would hope that it would not be that 
often, though.
    Senator Lankford. I would hope so too. But you used the 
term it is a ``safe harbor'' at one point, and I want to just 
put a check on that to say it is not really a safe harbor, 
because even they say they are not bound by No Action Letters 
because the facts are going to be different in every single 
business, every single location. But it does give you a general 
sense.
    To me that is somewhat what guidance should be, is a 
general sense of this is a direction of where we think things 
are going to go. But the problem is, is that when we had 
Education here before----
    Mr. Narang. Right.
    Senator Lankford [continuing]. We asked basically, if you 
are a new person at a university and you want to be able to 
pull all the previous guidance that has come down, where would 
you go to get that? There is no place to go to get that.
    I was interested--you made a comment at one point--what did 
you say, 580? What was your number?
    Mr. Crews. That is what I tallied up. And to get the 
Education Department guidance, rather than being right there on 
the website you click and then you go to a Word document.
    Senator Lankford. Right.
    Mr. Crews. So the kinds of reporting are all over the map.
    Senator Lankford. So but you called it, if I remember, a 
``partial list.''
    Mr. Crews. Yes because, see, we have the memo in place, and 
there is varying degrees of compliance with it. Like, HHS says 
it does not have any economically significant guidance to 
report, but on FDA's site it has this great search engine, it 
has all these procedures to present information.
    HUD does not own up to significant guidance, but other 
agencies do. Sometimes you will see the main umbrella 
department with zero in numbers of significant guidance but 
some of the subagencies will acknowledge some significant 
guidance, which is great.
    So in the preliminary inventory I put together, I put those 
zeroes in there because it is interesting to know which 
subagencies say they do not have significant guidance and which 
they do. That is important information as well, but then we can 
check with those agencies later and find out if that is really 
the case. If they say they have zero guidance, you can find out 
from the public maybe the answer is different.
    Senator Lankford. But that is just significant guidance you 
are highlighting. Is that correct?
    Mr. Crews. Right, and then you get--this is another reason 
why we need a lot more disclosure than we have, because to get 
other kinds of guidances that are sub-significant or secondary, 
whatever--there needs to be a name for it. One name is 
``notices'' but they are--but notices published in the Federal 
Register are everything from meeting announcements to something 
potentially significant.
    John Graham, who had been the former head of OIRA, had said 
what OIRA considers to be a significant notice, it is not quite 
clear. So what counts as a guidance? What counts as a notice? 
Once you get below the significant, it gets pretty iffy.
    I had mentioned some financial guidance in which the St. 
Louis Federal Reserve had tallied up what they considered to be 
significant guidance and posted it. But you see, if you 
multiply that all across the sectors of the economy, there is a 
lot of stuff out there that is not easy to find. It is not even 
easy to find the significant guidance----
    Senator Lankford. Right.
    Mr. Crews [continuing]. Because I had to do that exercise, 
but the other, it is extremely difficult.
    Senator Lankford. And it is the challenge that I have that 
I bring the illustration up: If you have a new employee at a 
university, you have a new employee at a manufacturing 
location, the previous employer retired, died, fired, whatever 
it may be; new person sits down in the chair and they ask the 
question, where do I go to get the rules of the road from the 
Federal Government?
    Mr. Crews. Right.
    Senator Lankford. They know where to go to get the 
regulations, but all the interpretive guidance pieces and 
everything else, there is nowhere they can go to get it.
    Mr. Crews. I am here to say nobody can tell----
    Senator Lankford. And they are all going to be bound by 
that.
    Mr. Crews. No one can tell you.
    One thing I would say--and I hope there is some common 
ground here--I had looked at the Public Citizen report, and I 
understand about the delays in some of the regulations that you 
are concerned about. My answer to things like that is, well, 
when that occurs and it is that severe, that becomes a question 
where Congress ought to step in and make things happen.
    But beyond that, one thing that fell out of that new Public 
Citizen report is that regulations that are not significant 
actually come through on a pretty ordinary pace. So that tells 
me that if you were to--and Public Citizen would be in favor of 
disclosure and the public having the right to comment. That 
tells me, for the typical guidances, it should not be too much 
of a burden for them to go through some kind of alert or notice 
of some degree.
    So I think that disclosure can go a long way toward getting 
a handle on the significant guidance and then the sub-
significant.
    Senator Heitkamp. I think one of the issues that we have is 
that--probably an unfair kind of analogy, but let's say you 
have five sisters and you all have photo albums, and one just 
throws them in a box and the other person, you know, has them 
indexed, you know, 500 different ways on a spreadsheet, right?
    Mr. Crews. That is pretty good.
    Senator Heitkamp. So we have not set any guidelines for how 
this information is presented. Now we have a whole body of work 
out there that is in the shoebox that is not necessarily 
accessible. And so it is going to take, maybe some direct 
analysis on, this is the expectation on transparency. You 
should not have to dig around. You should not have to just 
wonder if you are missing something. There should be one place 
where you can go where you can sort it.
    And the problem that you have is, I think, this has been 
ignored, kind of like we are just doing it and we are just 
doing it, because people are busy and they are not thinking 
about communication. They are just thinking about today, not 
what this body of work means kind of in the long run. And so I 
think there is some work that needs to be done in terms of not 
just one size fits all, but in terms of setting some standards 
for how you present the material.
    Our frustration here has been every time we talk about--
whether it is Taxpayer Bill of Rights, whatever it is, post 
this information--well, that would just take so much time. 
Well, I think, number one, we have the tools to do this fairly 
quickly, but people do not have a framework. And when they say, 
well, we cannot post it, you wonder why they do not want to 
post it, not that--everybody can post it.
    And so I think there is a need here to maybe set some 
standards on how the information is presented. We can argue 
about what is significant and what is not, but, all of this 
information should be completely transparent and accessible to 
the public.
    Mr. Crews. A quick one on that. I love the shoebox analogy. 
And I will tell you, the shoebox is called ``notices'' at the 
Federal Register. If you look at the proposed rules coming out 
every year, right now there are 2,500 in the pipeline. The 
number of rules finalized last year were 3,410 but the notices 
were 23,000. And so just ``notices'' is what it is called, but 
it contains memoranda, directives and guidances, bulletins, 
letters, all the--a word salad of things that it includes and 
it is just in that shoebox now.
    One of the things you can start to do is to tease that out, 
becomes some things, like the FDA notices that Amit mentioned 
that are just alerting the public about things--about Zika--
those are not guidances that concern anybody. Those are notices 
coming out of the Federal Government. But the ones where it is 
going to change behavior or require businesses to react, or 
some businesses may act differently than others or be affected 
differently by others, I think those can be pulled out of the 
notices shoebox in the Federal Register reporting that comes 
out every year.
    So I think that kind of disclosure in presenting the 
significant guidance and the material sub-significant guidance 
straight on the webpage, along with elevating the guidance 
principles, like Paul says, I think will go a long way toward 
getting a handle on this issue.
    Senator Lankford. Right. And part of our issue is not just 
that it is in a shoebox; it is that it is in a shoebox in a 
closet that no one knows where it is. And so that exists but I 
cannot get to it and I cannot find it, and I do not even know 
that it exists on that.
    Mr. Noe, you had mentioned something earlier that I want to 
be able to come back to and it was this thought of people at 
OIRA finding out about a rule by reading it in the Washington 
Post when it suddenly shows up.
    In our conversations with agency individuals, it is one of 
the frustrations that an agency does not know what another 
agency is doing, and so a business or a manufacturing location, 
whatever it may be, suddenly has two conflicting guidances from 
two different agencies that, if I do this it is going to break 
this agency's rule, and if I do this it breaks this one.
    OIRA, I would assume, is the one that has to be able to 
help navigate between the two to be able to raise the red flag. 
But if not OIRA, who helps form that deconfliction? And how do 
we get to a point where, if it is a significant rule that is 
coming out, OIRA at least gets a shot to be able to take a look 
at that?
    Mr. Noe. Mr. Chairman, you are absolutely right that OIRA 
is the proper place to coordinate with the other agencies on 
any rule that is important, whether it is a binding legislative 
rule or regulation, or an interpretive rule or policy 
statement.
    And sometimes it is--I say it myself, but I have to 
remember it is kind of a misnomer to call it OMB review, 
because OMB is just an intermediary. It is interagency review. 
So if EPA, for example, is going to issue a regulation or an 
important guidance on something related to agriculture, the 
desk officer who works on those issues at OIRA is going to 
alert the Department of Agriculture so that they are 
coordinated on what the policy for the president is on that 
issue. The same thing if it is energy. They will reach out to 
the Department of Energy (DOE). If it is about food, it will be 
Ag plus FDA.
    And that is exactly why it is important to have clarity 
that, one, OMB has authority to have interagency review on the 
most consequential guidance. For the vast majority, they will 
not do this. They have very limited resources, as Amit said. 
And they are focused mostly on the mega rules.
    But there are some guidance that are so consequential, they 
ought to be able to have interagency review on that, and there 
ought to be a procedure so they actually have a heads up to 
know they actually should have interagency review instead of 
reading about it in the Washington Post.
    Senator Lankford. OK, so how does that happen?
    Mr. Noe. It is very simple. It is just a few steps, which 
is kind of a streamlined version of what you do for regulations 
that could be done for guidance.
    So, one, the agencies would provide a list to OIRA of their 
upcoming significant guidance, only the most important ones. 
Then OIRA could choose--based on its own limited resources and 
the President's own priorities, pick off that list which ones 
it wants to review. And then it would alert the other agencies 
that are affected so that there is a coherence among the 
agencies that, yes, this is the proper policy; this reflects 
the President's priorities; we want to go forward with this 
guidance.
    And I can assure you, OMB would not review an enormous 
number of guidance because, again, they have very limited 
resources and they have to pay attention to the big 
regulations. But there are some that they absolutely would want 
to review, and they should, and the other agencies ought to 
know about them.
    Senator Heitkamp. One of the problems that we have when we 
look at this is a lot of the significant guidance, a lot of the 
significant regulations, are coming out of independent 
agencies. And we are really challenged in how we do that 
independent agency review. We had a bill--I mean, it has been 
really a tough issue for us to kind of navigate in terms of our 
oversight.
    But I want to make a point about guidance, because I used 
to be one of those regulators back in the day, both as Attorney 
General (AG) and as tax commissioner, and I got criticized for 
not promulgating rules and not issuing guidance because of how 
critical it was for business certainty. You may not like the 
answer, but you got an answer so you can rely on it.
    Again, I do not know that we can say ``safe harbor,'' but 
certainly during the term, that we would have a court that 
would say, look, you said something; they relied on it; it is 
binding. And so we do not want to lose that.
    And, Mr. Narang, I think that one of the things that we 
need to look at is we need to think in the context of if the 
person in the White House did not share common values, and 
started issuing guidances that were contrary to rules that had 
been promulgated over the last 8 years, I mean, how would we 
then want to see the process operate so that we would at least 
have notice that there is some erosion from what you thought 
the principles were or what the rules were?
    I think sometimes we look at this in the lens of what the 
political landscape is today, and we desperately need to look 
at it from what is the level playing field that we need to be 
operating on, so regardless of the political affiliations or 
the tendencies on either side we have rules that we all know?
    I mean, couldn't you see a need, in a case like that, to 
actually have greater notice, have greater scrutiny over 
guidance that might change rules?
    Mr. Narang. I think that you are absolutely right to point 
out that this--the procedural issues when it comes to the 
regulatory process can cut both ways, depending on who is in 
the White House.
    I do not think that that diminishes the need for our 
government to operate efficiently. I agree that they should 
operate in a transparent manner, regardless of who is running 
the show. But I do think--and certainly that may cut against 
Public Citizen's interest sometimes, but I do think that 
government efficiency as a principle is also a bipartisan 
principle that needs to be honored across administrations.
    And we do not have that with the rulemaking process. We are 
very concerned that adding the same types of procedures for 
guidance documents will simply make the dysfunction in 
efficiencies and the rulemaking process then apply to guidance 
documents.
    Senator Heitkamp. Well, i have a concern, if guidance truly 
is nonbinding, whether we are putting another layer on that 
would prevent us from moving efficiently to give business 
certainty to do the kinds of one-on-ones that can be very 
helpful. But I have seen it go the other way too, where broad, 
sweeping changes are done in guidance when they should have 
been done in rules.
    Mr. Narang. If I could just add to the OIRA discussion 
really quickly, we talk a lot about transparency around here. 
One of the major sources of a lack of transparency when it 
comes to the regulatory process is OIRA.
    The GAO has issued multiple reports now, making about 12 
recommendations when it comes to OIRA actually following the 
Executive Order 12866 transparency requirements. Every time the 
GAO finds that OIRA really is not interested in instituting 
their recommendations. I think they have only done about one 
out of 12.
    We really feel that, if we are going to give OIRA more 
authority over more types of agency actions, that they need to 
right the ship when it comes to reviewing regulations first 
before we give them guidance document review authority.
    Senator Lankford. So can I drop the bomb into the middle of 
this conversation, then? [Laughter.]
    So if OIRA does not follow the process, or if a regulator 
does not follow the process, should there be judicial review? 
Not on the decision--but did they do the process?
    You are welcome. [Laughter.]
    Mr. Narang. Thank you, Chairman. So that is a very thorny 
question.
    Senator Lankford. Because I am not asking, did they make 
the right decision? I am asking, did they do the process, and 
should there be an ability to have judicial review if they did 
not complete the process?
    Mr. Narang. I think that maybe it would be interesting to 
ask an administration witness what they thought of that. 
Executive Orders----
    Senator Lankford. I already know what they think. 
[Laughter.]
    Senator Heitkamp. We do.
    Mr. Narang. Executive Orders are not judicially 
enforceable. They do not create any legal rights.
    You make a very good point that when OIRA--or other 
agencies, but especially OIRA, since agencies are held to 
judicial review and judicial review's scrutiny, essentially, 
when they do not comply with APA procedural requirements. OIRA 
does not have that element of judicial review. And, when it 
comes to, I guess delays, they are not complying with the 
Executive Order. Of course, it is their Executive Order.
    Senator Lankford. Right, and that is the problem. But it is 
every President for the last 20-some-odd years has done 12866. 
And the question is, if we have a bipartisan agreement, this is 
a good process. It has been tested. It has been evaluated. 
Let's just make it statutory and to make sure that is what we 
actually do.
    And again, that is a broader conversation and we are 
getting past guidance in this. But it does help, when you deal 
with something like the Congressional Review Act, if you have a 
significant guidance. A significant guidance is open to the 
Congressional Review Act. If you do not do the process and 
actually deem it as significant guidance, you actually pulled 
it out of that statute to where it is not eligible to be dealt 
with in that way. And so it does affect how the law functions 
and how Congress interacts with guidance as well.
    Senator Heitkamp. I think one of the concerns are the 
nitpicking versus truly significant breaches of process. And I 
think that people on the one side of this debate in terms of 
following these rules, following the procedure, would argue, 
look, if we missed it by a day or if we did something that was 
not material to the public or really to the end result of the 
rule, we should not be subject to scrutiny for a nonmaterial 
breach of process.
    But again, if you fail to provide notice and comment on the 
front end, that is something the courts are going to review----
    Senator Lankford. Right.
    Senator Heitkamp [continuing]. I think, under APA.
    And so, we have this debate going back and forth about 
judicial review, and I think it challenges us all, kind of 
going forward, on how do we make everybody comfortable that 
there is not an ``I gotcha'' here?
    There is an attempt to analyze and to know the rulemaking 
process so that everybody is playing from a level playing field 
that the regulated community knows that this is the process, 
this is the rule of law that I am operating under, and I can 
count on those steps being taken to protect my rights. And when 
those steps are not taken, that creates a disharmony and, I 
think, a sense that the government has run amok.
    Senator Lankford. Can I ask Mr. Noe to make a comment? It 
looks like you are about to jump out of your skin, so---- 
[Laughter.]
    Mr. Noe. Well, I just wanted to comment, Mr. Chairman, that 
I think there is a basic misunderstanding about this issue of 
delay. And I know Amit is concerned about that. I respect the 
concern about that, but it is very important to mention this 
because it is fundamental in the FDA Good Guidance Practices, 
in the recommendations of ACUS and the ABA that--basically what 
they said is, for significant guidance documents, the agency 
ought to ordinarily voluntarily comply with notice and comment, 
unless they determine it is not feasible or appropriate.
    And when Congress passed FDAMA, it is right there in the 
statute. So there is an out. This is very different than saying 
this is a legislative rule subject to APA notice and comment 
requirements and judicial review. It is very different because 
the agency can, on its discretion, determine, look, this one 
was not significant or it was not feasible to do it.
    What Congress said is if you do not provide pre-adoption 
notice and comment for the most consequential guidance and you 
go ahead and issue it, you ought to still allow the public to 
comment on it even though it is out there already.
    And that is perfectly reasonable. That is what the 
Administrative Conference of the United States has said. That 
is what the ABA has said. That is what is in the FDA Good 
Guidance Practices. And it works perfectly well. The agency has 
not crashed and burned. In fact, the regulated community, to my 
understanding--I am not an FDA expert--but they are pretty 
happy with how that works, and that to do it otherwise would be 
a major problem.
    So here you have an agency where human life is at stake in 
the decisions it makes, the guidance it provides, and this idea 
of having a presumption of public notice and an opportunity to 
say something about this before it goes final works perfectly 
well. And where they decide, look, it is not feasible, this is 
an emergency or it is not appropriate, there is an out for 
that. And so I think that is the same kind of thing you could 
do if you elevate these Good Guidance Practices to legislation 
for the agencies in general.
    To your point earlier, Senator Heitkamp, I think you could 
and should do it for the independent agencies too. Their 
guidance is no different in its impact. You have absolute 
authority to do that. Of course, I frankly think the President 
has absolute authority to do it on his own. And I think there 
is----
    Senator Heitkamp. The independent agencies do not think 
that.
    Mr. Noe. They do not think that, but I think if you 
consulted legal scholars, they would line up and say that is 
correct. But the point is it is you. You are a legislator. You 
have that authority.
    As far as judicial review goes, I do not think there is a 
whole lot for a court to review here other than if it is simply 
``check the box.'' Again, we do not want to be embarrassed of 
our government. Do you have approval procedures for your most 
important guidance? Do you have standard elements in the 
guidance, and do you say it is nonbinding? Do you provide 
access to the public by actually posting them on your website 
in the 21st Century? Yes or no?
    If they did not do that, you could provide limited judicial 
review to compel agency action lawfully withheld or 
unreasonably delayed, under the Administrative Procedure Act, 
Section 706(1). And all that anyone could do, if they are 
willing to spend the money, is get a court to say, yes, you 
have got to do what Congress told you to do. Nothing is going 
to crash and burn if you have that limited judicial review. I 
personally think you could do that.
    Mr. Narang. So Paul makes a really good point. Congress has 
the authority and has mandated that certain agencies conduct 
guidance processes in a different way, in a much more robust 
way, as they did with FDA.
    I think the proper way of congressional intervention in 
this area is to go, agency by agency, where the problems exist, 
to the extent that they do exist, rather than a one-size-fits-
all approach. I think this is a broader recommendation when it 
comes to regulatory reform legislation, generally speaking.
    Senator Lankford. But here is the challenge when you are 
dealing with a--I will go back to a manufacturing location as 
well. They have EPA regulations, they have OSHA regulations, 
they may have FDA regulations, they have USDA regulations, 
Department of Labor regulations. If all of them have different 
standards and different ways to do it--I understand it is very 
helpful for the agency to say, we are different, but when you 
are the business, actually, and for the 340 million Americans 
that are trying to process these regs, it makes it more 
complicated for them.
    And so there is somewhat a balance between making it 
simpler for the government or making it simpler for the 
American people. Our default is to try to make it simpler for 
the American people.
    And so while I understand one size does not fit all, there 
is a need for some kind of standardization so that a compliance 
person in that business that deals with nine different agencies 
can have some level of predictability of what to be able to do.
    Senator Heitkamp. And we have established a one size fits 
all by passing the Administrative Agencies Practice Act. So the 
question is, should that be expanded into other areas? Should 
we look at that and say there is a need for a broad-based rule 
of the road that could apply? I agree with you that there needs 
to be flexibility. I mean, the last thing you want is the 
Internal Revenue Service (IRS) not to be issuing letter 
rulings.
    Senator Lankford. Right.
    Senator Heitkamp. And no one here wants that. And so I 
think you and I would agree it probably should be narrower than 
maybe what these guys would think, but I think at some point 
having the certainty of knowing, I know what is going to come 
down because this is the process, and I look for it, and if it 
does not show up I know there is not new guidance out there 
that I need to worry about.
    And so I think there is some advantage that we could have 
to standardizing some kind of guidance principles, and making 
those--I think Paul's point about, what would that review look 
like? It is not substantive. It is really an objective review 
is what you are talking about, not a substantive review, right?
    Mr. Noe. Yes, Senator, just the process. Did they do it? 
Did they do what Congress told them to do? That simple.
    Senator Heitkamp. So, I mean, that offers an opportunity to 
give the certainty that you might need--sorry.
    Mr. Narang. I do want to make clear that I am not making 
any claims that, significant guidance documents, economic--the 
creation of these categories across agencies is going to lead 
to the same length of rulemakings as economically significant 
rules. That is not the case. It is not going to be as long as 
that.
    But even on the guidance end, delay is not an abstraction. 
It costs lives. The CDC Opioid Guidance is a great example. 
They wanted to issue it late last year. When they first came 
out with it they got backlash from the pharmaceutical industry 
and they had to delay the guidance for several months. The CDC 
points out that 40 people across the country die every day from 
opioid addiction and overdose.
    Senator Lankford. Mr. Crews.
    Mr. Crews. Just quickly too on the discussion about OIRA 
and the transparency that you brought up, it is the case that 
OIRA--we always look at OIRA's reviews of regulations but not 
the independent agencies since those are left out. And in the 
past year you have 13 rules that had a cost-benefit analysis 
done on them, but it turns out that OIRA does review some 
notices and we can get to the bottom of what that data is 
actually telling us.
    I mentioned that John Graham, who was the former head, 
said, ``The OIRA website''--this is a quote--``is vague about 
what constitutes a notice.'' ``More clarity about what 
constitutes guidance notices worthy of review'' ``would be 
valuable.'' But I went back and looked and it turns out there 
were a few dozen notices that OIRA reviews every year. The 
nature of what all of those are we do not know yet. And even 
some of those are considered significant.
    So there is some activity at OIRA that would be enhanced by 
doing this--by enhancing those principles into legislation.
    Senator Lankford. We have a couple of minutes left here. I 
want to be able to honor everyone's time on it, so let me kind 
of go in a couple of lightening round things that should not be 
lightening round things. That will be faster.
    One of them is--and it is for all of us on this, if you 
have a particular comment. One of the things that we dealt with 
last year was OSHA put out three new process safety management 
rules as the result of a quick action from the fertilizer plant 
explosion in West, Texas.
    We have now learned from the Bureau of Alcohol, Tobacco, 
Firearms, and Explosives (ATF) that that was not an accident 
after all. That was actually an intentionally set fire. And all 
of the basis for how they set out these quick emergency 
guidance to be able to get there--it is an emergency when you 
put out these new process safety management rules--the 
foundation of that was incorrect. It was not an industrial 
accident. It was an intentionally set fire.
    They promulgated three different sets of rules. We 
challenged those three guidance documents--I said rules, but 
three guidance pieces they put out--and said, this should go 
through the rulemaking process on all three of these. One of 
them they have now responded back to us and said, you are 
right; we are going to re-promulgate this as a rule. The other 
two are now in litigation, where they have stepped aside and 
settled it.
    My concern is it looks like this is--going back to, Mr. 
Narang, what you were saying--a faster way to be able to create 
a reg by creating a guidance, stepping aside into a quick 
settlement with the affected parties and then putting it back 
out and saying, here is the result of that, that still excludes 
a lot of people, if it was going to be a true reg, from giving 
input. The only people that got input were the people that were 
actually in the settlement. And then everyone else was cut out 
of that.
    I am very concerned about that being a new process that is 
being birthed out of the length of time and the difficulty it 
is to do a regulation or a significant guidance, that agencies 
are exploring, how can we get this done in a faster way with a 
smaller group of people? That is a separate issue. I just 
wanted to be able to raise it. I am very concerned about that. 
We are going to continue to press on that.
    The issue that I wanted to be able to raise is who has--and 
we cannot get into all of it--who has given good, clear 
definition of what is guidance, significant guidance, and 
regulation? It is one of the great struggles that we have.
    Every time a new regulation comes out--and, Mr. Narang, you 
mentioned it, for instance the sexual assault rule on campuses, 
that campuses across the country have said: That is not a 
``Dear Colleague'' letter. That is a new guidance. That forces 
us to create this whole new legal system. There is all kinds of 
issues, all kinds of attorneys. And legal scholars on 
universities have said, this definitely should be a regulation, 
not a ``Dear Colleague'' guidance letter.
    Where do we go to be able to get good, clear definition 
that we can put in statute to clarify, in the days ahead, here 
are the clear boundaries?
    Mr. Noe. Mr. Chairman, I will take a stab at that.
    I think that this is pretty fundamental. If it creates or 
alters legal rights or obligations as a foundational matter, 
that is a legislative rule, which we call a regulation. If it 
merely interprets a pre-existing legal requirement, whether it 
is in a statute or a legislative rule, a regulation, that is an 
interpretive rule. If it simply sets forth agency policy but it 
is not binding, that is a policy statement.
    These are the three kinds of rules under the APA. And if 
people are fair-minded, I think, when they read what the agency 
is writing, it is not that mysterious as to which of those 
three is going on. If there is a proper review process and the 
agency really intends to follow the rules of the road, that 
should be pretty clear.
    One benefit of having notice and comment as a presumption 
for guidance is if they feel like there is an emergency and we 
have to put out an emergency interpretation, they can go ahead 
and do that, but then the notion is, but we will still take 
some comment in case we got it wrong and we will think about 
that comment. And that allows them, if they made an error to--
if they quickly made a mistake, they can quickly correct the 
mistake under that kind of a system.
    Mr. Crews. It is often claimed that there ought to be a 
law, and sometimes maybe there ought not be a law. I think one 
of the issues we have here is when Congress has been debating 
reforms and is looked at the REINS Act, where if a particularly 
regulation was extremely significant and Congress thought it 
ought to have a say and would come in and vote up or down on 
it, I had always thought that should be extended to 
controversial regulations, not just major ones, because often 
when you look at the data coming through OMB, there are not any 
cost-benefit analyses. There are very few that actually even 
happen.
    Senator Lankford. Especially in the independents.
    Mr. Crews. Exactly. And so now, given the tendency to turn 
to guidance now, and given the nature of the economy we have 
now where we are moving into the information sector and to 
high-tech sectors, where it is very easy to issue a drone rule 
and financial rules and telecommunications rules but then not 
issue any rules after that, just make declarations and 
guidances and memoranda, I think you have to bring controversy 
into it. It is not just that it is economically significant, 
but if it has alarmed enough 
people--like it was very controversial, what you described 
about the explosion and then finding out that there was a 
sabotage; it was not even a failure of process--you have to 
have something to flag when there has been a major change in 
law implemented or a major change in the way that regulated 
parties have to behave, based on what the Federal Government is 
doing, whether it is coming out of Congress, an agency, or if 
through a regulation or through a guidance.
    Mr. Narang. So this is not a direct answer. I will go back 
to what I said in my oral remarks, which is that one way to 
deal with concerns about guidance is to make notice-and-comment 
rulemaking easier.
    And this Committee has a good model, actually, just from 
this Congress in terms of streamlining and making more 
efficient regulatory processes to address delay. So the delay I 
am talking about here is energy and infrastructure permitting. 
And the solution to that delay, which became law last year, 
passed out of this Committee initially, was essentially to cap 
public comment periods at 60 days, scale back judicial review, 
make the standing a little bit more narrower for parties to 
bring judicial actions on permit denials or approvals, and to 
reduce cost-benefit analysis, not expand cost-benefit analysis 
when it comes to environmental impact statements.
    So that is an interesting model. I think it potentially is 
a very effective model. Unfortunately, it is not the model that 
Congress has generally been following when putting out 
proposals for reforming the regulatory process. And so I think 
that hopefully our report makes clear that the delays, when it 
comes to regulations, are substantial, just as substantial as 
in the energy and infrastructure permitting world, and so we 
need similar types of solutions.
    Senator Lankford. No, I do not think there would be a 
question from this Committee, either side of the aisle, on 
dealing with clear deadlines and boundaries and clear 
definition. No one wants a regulation to take 12.5 years. No 
one wants that process to be so burdensome and so time-
consuming that you actually cannot respond to a statute.
    The challenge is if people are not engaged in it--what a 
lot of folks on this dais have heard me say: We are still a 
government of the people, by the people, and for the people. 
And if people do not get input into the regulatory process and 
to a guidance, then we are no longer a nation of the people, by 
the people, for the people. This is somebody else that is 
imposing.
    So I think affected parties should have an opportunity to 
be able to raise their hand and say, have you thought about 
that, before something goes in. And it should not just be 
wealthy affected parties, that could do a lawsuit and could 
step aside and could do that, but it should be anyone that 
would be allowed to do that. But they cannot do that if they do 
not get the opportunity to present comment. And they cannot do 
that if their comments are not heard and actually put into 
action.
    So clear moments where they can do that, where they can 
engage, is extremely helpful to us, I think, just as a Nation, 
just as a transparent government as well. I wish it was as 
clear as what you just described. There has been uncountable 
lawsuits that have happened in the past several years over, 
that is a reg, or, that is a guidance; that guidance has now 
become something else.
    But apparently there are some in government that wish to be 
able to promulgate something that sure looks a lot like a 
regulation as a guidance, and no one seems to be stopping them 
in the process. And I think that should be an OIRA position, 
but often OIRA does not get the opportunity to see it. And now 
it just happens and gets out there.
    And I think my issue is, how do we actually put this in 
position with regardless of who is in the White House, that 
everyone knows regulations come from law and guidance comes 
from regulation, and everyone can point back to law, not just 
the preferences of the White House, because if everything is 
based on, we are going to put out this guidance based on White 
House preferences, at some point we have lost, it has to be 
connected to statute over here, not just White House policies.
    And so we have to figure that out regardless of who is in 
the White House. Otherwise, we have no predictability and the 
next White House can just flip the guidances and say, we are 
going to go the other direction now; because the last one did, 
because if this passes a guidance this way, then it can 
certainly be taken away this way, and now no one knows how to 
do capital investment in the country.
    Mr. Noe. I can tell you, Mr. Chairman, when I was at OIRA 
we caught a number of what I call spurious rules. They were 
supposedly guidance that were going to be legally binding, and 
we were able to stop them.
    So I think it can be done if there is OIRA review and there 
is a desire to make sure people are following the law. It is 
tempting to go by guidance because it is easier to do, as Amit 
was saying, but it does not fit with due process to do it.
    And I think it is not an accident you have seen this vein 
of cases from the D.C. Circuit, the spurious rules cases, that 
actually started growing a lot in the 1990s. And I think that 
is because the Clinton order took OIRA out of the job of 
reviewing guidance.
    Senator Lankford. Well, it is simple. We have to be able to 
re-establish that and to be able to find a clear way to be able 
to do it, because at this point we are--my belief, we are 
clearly out of balance. There is too much latitude to be able 
to create guidance and too much instability that is created 
with that, and we are not getting back to the basics of 
promulgating it based on statute.
    And it seems to be a focus on the Chevron deference-type 
issue that I come back to all the time: We can get away with 
it. We can call this permissible construction. And so because 
it is permissible, we are just going to go ahead and do it and 
wait until a court at some point tries to stop us in the 
process.
    And that is really expensive and really long, and it may be 
simpler for the agencies but it is much tougher for the 
American people.
    Any other quick comment from anyone?
    [No response.]
    Gentlemen, I thank you very much again for all the 
contributions that you made, the study that you do already, and 
the different reports that you already put out. That is very 
valuable to us in the national conversation on it. And we want 
to continue the dialogue both on the staff level and with 
myself and other Members of this Committee. But let's keep the 
work going. This is not unsolvable. This is one of those 
solvable issues, but we have to get some good-quality 
resolutions, and it has to be able to pass the House, the 
Senate, and be signed by the White House.
    I have heard several of your comments today saying Congress 
could fix this, and I have smiled only as I thought that, and 
say, when Congress fixes things, that is law. That also 
requires the White House to be engaged and to say yes, because 
most of these issues require a reduction of Executive power, 
and of late there does not seem to be much conversation about 
limiting the power of the executive branch. So, yes, while 
Congress has the power to write that law, the Executive has to 
sign a law that says, no, the executive branch has to live by 
law, not Executive Orders. And that will be a different day and 
a different conversation.
    So I appreciate very much the conversation and the input 
for this. Thank you.
    Mr. Noe. Thank you.
    Senator Lankford. With that, let me see if there is any 
closing statement I need to make, or announcement.
    The hearing record remains open for 15 days, until the 
close of business on July 14, for the submission of statements 
and questions for the record.
    The hearing is adjourned.
    [Whereupon, at 10:29 a.m., the Subcommittee was adjourned.]

                            A P P E N D I X

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