[Senate Hearing 114-545]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 114-545

        CONTINUED REVIEW OF AGENCY REGULATORY GUIDANCE, PART III

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

                                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

                               __________

                           SEPTEMBER 22, 2016

                               __________

                   Available via http://www.fdsys.gov

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





                                  ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

23-559 PDF                     WASHINGTON : 2017 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Publishing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001
















        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


       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.............................................     1
Prepared statement:
    Senator Lankford.............................................    41
    Senator Heitkamp.............................................    44
    Senator Tester...............................................    46

                               WITNESSES
                      Thursday, September 22, 2016

Hon. Howard Shelanski, Administrator, Office of Information and 
  Regulatory Affairs, Office of Management and Budget............     2
Hon. M. Patricia Smith, Solicitor of Labor, U.S. Department of 
  Labor..........................................................     4
Amy McIntosh, Principal Deputy Assistant Secretary Delegated the 
  Duties of the Assistant Secretary, U.S. Department of Education     6

                     Alphabetical List of Witnesses

McIntosh, Amy:
    Testimony....................................................     6
    Prepared statement...........................................    59
Shelanski, Hon. Howard:
    Testimony....................................................     2
    Prepared statement...........................................    47
Smith, Hon. M. Patricia:
    Testimony....................................................     4
    Prepared statement...........................................    51

                                APPENDIX

Responses to post-hearing questions for the Record:
    Mr. Shelanski................................................    62
    Ms. Smith....................................................    69
    Ms. McIntosh.................................................    80

 
        CONTINUED REVIEW OF AGENCY REGULATORY GUIDANCE, PART III

                              ----------                              


                      THURSDAY, SEPTEMBER 22, 2016

                                 U.S. Senate,      
                        Subcommittee on Regulatory,        
                      Affairs and Federal Management,      
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3 p.m., in room 
SD-342, Dirksen Senate Office Building, Hon. James Lankford, 
Chairman of the Subcommittee, presiding.
    Present: Senators Lankford, Heitkamp, Tester, and Carper.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. Good morning--good afternoon, I should 
say, to everyone. I guess it is morning somewhere but not here 
currently. Good afternoon.
    I am going to begin this hearing. This is a hearing before 
Regulatory Affairs, Federal Management Subcommittee on the 
continuing review of agency regulatory guidance. This is the 
third in our series, to be able to walk through just guidance 
and regulations, how it comes about, and the process and the 
decisionmaking, obviously the interaction with the Office of 
Information and Regulatory Affairs (OIRA) and all the agencies, 
and the American people.
    I am going to put my opening statement into the record\1\ 
for the benefit of time. And we have blocked off about two 
hours of time to be able to go through this conversation. So to 
be able to honor and get to our questions faster, I am going to 
put this toward the record for my opening Statement.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Lankford appears in the 
Appendix on page 41.
---------------------------------------------------------------------------
    With that, I would recognize the Ranking Member.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. And in the interest of time and great 
gratitude to our witnesses, who I understand are a little time-
crunched, I am going to do the same. So I will submit my 
opening statement for the record.\2\
---------------------------------------------------------------------------
    \2\ The prepared statement of Senator Heitkamp appears in the 
Appendix on page 44.
---------------------------------------------------------------------------
    Senator Lankford. Great.
    At this time we will proceed to testimony from our 
witnesses. Let me introduce all three of them.
    Do you want to be able to make an opening statement?
    Senator Tester. I would like to submit my opening statement 
for the record\1\ too, Mr. Chairman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Tester appears in the 
Appendix on page 46.
---------------------------------------------------------------------------
    Senator Lankford. You are welcome to be able to put your 
opening statement in the record.
    At this time we will proceed with testimony from our 
witnesses. We have three witnesses here.
    Howard Shelanski is the Administrator of the Office of 
Information and Regulatory Affairs, a post he has held since 
confirmation in June 2013.
    Patricia Smith is Solicitor for the Department of Labor 
(DOL). Before assuming this post in 2010, Ms. Smith served as 
the New York State Commissioner of Labor. Ms. Smith also served 
as the Chief of the Labor Bureau in the Office of New York 
State Attorney General for eight years, and as the Deputy 
Bureau Chief and Section Chief for the Labor Bureau before 
that.
    Amy McIntosh is the Deputy Assistant Secretary, delegated 
duties of Assistant Secretary, at the Department of Education's 
Office of Planning, Evaluation, and Policy Development--which, 
as we mentioned before, her business card has two sides. 
[Laughter.]
    In this capacity, Ms. McIntosh oversees policy development 
on all aspects of education, from pre-kindergarten through 
higher education, and leads Policy Program Study Services.
    I appreciate all three of you here. It is the custom of 
this Subcommittee to swear in witnesses before they testify. I 
would ask you to please stand and raise your right hand.
    Do you swear the testimony that you are about to give 
before the Subcommittee is the truth, the whole truth, and 
nothing but the truth, so help you, God?
    Mr. Shelanski. I do.
    Ms. Smith. I do.
    Ms. McIntosh. I do.
    Senator Lankford. Thank you. You may be seated. Let the 
record reflect all three answered in the affirmative.
    We are using a timing system today. You will see that 
count-down clock. All three of you are familiar with the timing 
clock on that, and I will ask you to honor that and leave 
plenty of time for our questions.
    Mr. Shelanski, you are recognized first.

TESTIMONY OF THE HONORABLE HOWARD SHELANSKI,\2\ ADMINISTRATOR, 
    OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF 
                     MANAGEMENT AND BUDGET

    Mr. Shelanski. Thank you very much.
---------------------------------------------------------------------------
    \2\ The prepared statement of Mr. Shelanski appears in the Appendix 
on page 47.
---------------------------------------------------------------------------
    Chairman Lankford, Ranking Member Heitkamp, and Members of 
the Subcommittee, thank you for the invitation to appear before 
you today. I am pleased for this opportunity to discuss the 
role of the Office of Information and Regulatory Affairs, in 
the development of Good Guidance Practices for Federal 
agencies.
    OIRA's role with respect to guidance documents is twofold. 
We advise agencies regarding best practices for developing and 
issuing guidance and we also review of subset of those guidance 
documents.
    Agencies issue guidance to explain existing regulatory or 
statutory requirements, often at the public's request, or to 
make non-binding policy statements and recommendations. These 
documents provide substantial value to the regulated community. 
They can increase efficiency and help the public understand the 
full scope of applicability and available compliance options 
for current statutes and regulations.
    Agency guidance practices should be transparent, 
consistent, and require agency accountability. In 2007, the 
Office of Management and Budget (OMB) published a bulletin in 
the Federal Register titled ``Agency Good Guidance Practices to 
Establish New Policies and Procedures for the Development, 
Issuance, and Use of Significant Guidance Documents.''
    This bulletin, which remains in effect, establishes 
policies, practices, and procedures for guidance documents that 
executive branch agencies identify as significant or 
economically significant. Designations that arise from criteria 
are very similar to those for regulatory significance.
    Those criteria include whether a guidance may reasonably be 
anticipated to cause changes that have a $100 million annual 
economic impact, have material budget effects, implicate 
interagency interest, or otherwise raise novel legal or policy 
issues.
    For the subset of guidance documents that agencies 
designate as significant, the 2007 bulletin sets forth the 
general policies and principles for agencies to help ensure 
quality and transparency. These include adoption of written 
internal approval procedures at each agency; establishing a 
website that lists all significant guidance documents, in 
effect, and that specify how the public can comment on them, 
request modifications or rescissions or submit a complaint; and 
following a notice and comment process for economically 
significant guidances.
    The bulletin also reminds agencies that the Administrative 
Procedure Act (APA) generally requires notice and comment when 
an agency establishes new requirements that it treats as 
binding. In addition to the procedures required by the 2007 
bulletin, OIRA also works with agencies to identify significant 
guidance documents that will undergo interagency review.
    Once a guidance document is under interagency review, OIRA 
plays two roles. The first is to coordinate the review. OIRA 
circulates the guidance to other agencies in the executive 
branch whose own policies, expertise, or responsibilities may 
in some way interrelate with the draft guidance document.
    The second role that OIRA plays is to ensure that the 
guidance embodies the relevant principles laid out in Executive 
Orders (EO) 12866 and 13563, including whether the guidance is 
both necessary and consistent with applicable statutes and 
regulations.
    OIRA reviews economically significant guidance documents as 
well, although such guidance documents have been relatively 
uncommon. In OIRA's experience, and based on agency analysis, 
the behavioral impacts associated with non-binding guidance 
documents do not often exceed $100 million in a given year.
    One example where this could happen is when an agency 
issues guidance on emergency or disaster preparedness to State 
and local authorities. Even though the guidance is not binding, 
if the guidance is sound, many States might be expected 
willingly to follow such recommendations and change their 
behavior accordingly.
    The implementation of governmentwide Good Guidance 
Practices continues to be a priority for OMB and OIRA. Agency 
guidance documents serve an important role in the regulatory 
sphere. The Good Guidance Practices set forth in the 2007 
bulletin serve as a useful tool for agencies in setting the 
appropriate scope for their guidance documents and in deciding 
whether regulation would be a more appropriate mechanism. OIRA 
will continue to work with agencies, as appropriate, on the 
review of the various kinds of significant guidance documents 
that the agencies issue.
    Thank you for your time and attention. I would be happy to 
answer any questions you may have.
    Senator Lankford. Thank you. Ms. Smith.

 TESTIMONY OF THE HONORABLE M. PATRICIA SMITH,\1\ SOLICITOR OF 
                LABOR, U.S. DEPARTMENT OF LABOR

    Ms. Smith. Thank you. Chairman Lankford, Ranking Member 
Heitkamp, and Members of the Subcommittee, I am pleased to 
testify before you today on the Department of Labor's efforts 
to ensure that we develop guidance which is accurate, helpful, 
and appropriate; that informs workers and employers and all of 
our stakeholders about their rights and responsibilities under 
the laws that we administer and we enforce.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Smith appears in the Appendix on 
page 51.
---------------------------------------------------------------------------
    We take seriously our obligation to develop regulations 
that implement laws. The Department issues effective 
regulations to help achieve Congress' objectives to do things 
like invest in human capital to build a skills infrastructure 
that helps American businesses. Our regulations also ensure 
that employers and workers have the information they need to 
better understand their rights and responsibilities, to improve 
compliance with worker protection laws, and to achieve safety 
and security in the workplace. We developed those regulations 
consistent with governing laws and executive orders.
    While the Department strives for full clarity in its 
regulations, we know from long experience that our regulations 
cannot seek to speak to every scenario in our complex economy. 
And with any other governmental agencies, our stakeholders 
often have legitimate questions about practical implications of 
our regulations.
    Therefore, we issue guidance to our stakeholders to clarify 
either statutory requirements or our regulations. Our guidance 
often includes answers to frequently asked questions about how 
the rules apply to specific circumstances, or examples of best 
practices for compliance and implementation.
    We strive to issue guidance that is timely as well as 
responsive to stakeholders, and one that is applicable to a 
broad range of stakeholders. I can tell you firsthand how well-
drafted guidance can really help increase efficiency and reduce 
stakeholder confusion, and reduce the need for enforcement.
    We strive to issue guidance that is clear and accessible to 
members of the public who are not subject matter experts and 
who should not have to retain a lawyer to understand their 
rights and responsibilities. Many guidance documents aim to 
inform employers about their rights and responsibilities in 
plain language, focusing on their most common concerns and 
questions.
    For example, the Department's Wage and Hour Division has 
created a fact sheet and handbook about rights for workers and 
responsibilities for employers under the Family Medical Leave 
Act (FMLA) that lay out together the most common types of 
requests for familial leave and what FMLA requires that 
employers should do in response to those requests.
    Another important aspect of Department guidance is that we 
must provide timely assistance that is responsive to 
stakeholder questions or emerging challenges. For example, in 
April of this year, the Occupational Safety and Health 
Administration (OSHA) and the National Institute for 
Occupational Safety and Health issued interim guidance on 
protecting workers from occupational exposure to the Zika 
virus.
    The Department of Labor remains committed to continuously 
working to improve our guidance process. Following helpful 
recommendations from the Government Accountability Office (GAO) 
over the past year, the Department has pursued multiple 
improvements in our issue of guidance. We have adopted 
procedures to assure that, in accordance with OMB's Final 
Bulletin for Agency Good Guidances Practices, the Department's 
written procedures for approval of significant guidance are 
made available to component agency staff.
    We shared best practices on the development of non-
significant guidance among our component agencies and created a 
checklist document that provides questions based on best 
practices for agencies to consider when developing guidance. We 
developed additional materials to assist agencies in developing 
internal control procedures for guidance development.
    And, finally, we conducted training and developed best 
practices and tools to assist agencies in using and 
interpreting Web metrics for guidance documents on their agency 
websites, including ensuring that the documents are up to date, 
relevant, and easy to access on the Department's website.
    The Department remains committed to our broad efforts to 
develop and disseminate accurate, timely, helpful, and lawful 
guidance that informs our stakeholders of their rights and 
responsibilities under the laws that we administer and enforce. 
We continue to look forward to having a dialogue with you and 
the public to discuss ways to improve our processes.
    Thank you, and I am pleased to answer any questions you may 
have.
    Senator Lankford. Thank you. Ms. McIntosh.

   TESTIMONY OF AMY McINTOSH,\1\ PRINCIPAL DEPUTY ASSISTANT 
  SECRETARY, DELEGATED THE DUTIES OF THE ASSISTANT SECRETARY, 
 OFFICE OF PLANNING, EVALUATION, AND POLICY DEVELOPMENT, U.S. 
                    DEPARTMENT OF EDUCATION

    Ms. McIntosh. Hello, Chairman Lankford and Ranking Member 
Heitkamp. I appreciate the opportunity to appear before you 
again to testify about the Department of Education's issuance 
and use of guidance.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. McIntosh appears in the Appendix 
on page 59.
---------------------------------------------------------------------------
    The Department uses guidance to communicate timely and 
consistent information to the diverse groups that we serve. In 
general, we communicate with our stakeholders and the public 
through a variety of forms, and guidance documents are one 
important tool.
    Guidance provides useful information about the statutes, 
regulations, and programs that we administer. In addition, 
guidance often responds to stakeholders' questions, helps them 
understand and comply with the laws of Congress and related 
regulations, and communicates best practices.
    The Department uses guidance to promote transparency and 
assist and guide our stakeholders, not to create new rules. We 
use the rulemaking process, not guidance, when we need to issue 
legally binding rules to carry out the Department's mission.
    The Department is committed to issuing guidance that 
reflects appropriate review and is well-developed, responsive 
to grantee and other stakeholder needs, and appropriately 
disseminated. We appreciate and often seek the opportunity to 
hear from members of the public about their views before and 
after the issuance of guidance.
    The Department fully adheres to OMB's Bulletin on Good 
Guidance Practices. As confirmed in the recent GAO report, the 
Department has established written procedures for the approval 
of all significant guidance. We have also compiled a list of 
the Department's significant guidance documents, posted it in a 
central location on our website, and update it periodically.
    The Department often issues new or revised guidance to 
respond to questions and feedback that program offices receive 
from stakeholders. In some cases, the development of new 
regulations may serve as the impetus for developing new 
guidance. As the Department indicated to GAO, we make every 
effort to issue guidance documents that restate the statute or 
regulation in plainer language, that summarize requirements and 
suggest ways to comply with the new regulation or offers best 
practices.
    The Department believes that its internal controls for 
developing and producing guidance are effective, but we are 
committed to continuous improvement of our internal control 
processes and we appreciate the recommendations provided in the 
GAO report. We have a plan approved by GAO that is in place and 
we have made progress on implementing it since I last 
testified. For example, we are finalizing new protocols for our 
offices to use to clarify management roles and document 
management review and approve all types of guidance beyond 
those that are deemed significant.
    Regarding significant guidance documents, we have recently 
begun to require that all documents include a prominent 
statement clarifying the purpose of the guidance and explaining 
that it is not legally binding, nor does it have the force or 
effect of law.
    Additionally, we now more prominently encourage the public 
to comment on each document and we explain how they can submit 
comments. Also, we have recently created a separate page on our 
website that explains, in general, the role of guidance and how 
the public can provide feedback.
    Finally, we have provided Department of Education staff 
with a new best practices document about how best to most 
effectively present guidance documents online.
    The Department is committed to using guidance in a way that 
will best assist our stakeholders and inform the public. We 
believe we have done a good job implementing the OMB bulletin 
and will continue with the recommendations made by GAO.
    Thank you for the opportunity to testify today about the 
Department's use of guidance documents, and I, too, would be 
glad to answer any questions from the Committee.
    Senator Lankford. Thank you.
    I would like to first recognize the Ranking Member for 
questions.
    Senator Heitkamp. Thank you, Mr. Chairman.
    And we on this Committee do not do, necessarily, oversight 
on individual guidances or regulations, but sometimes getting 
into the details of those guidance does, in fact, help us 
evaluate where the issues may be with blurring the lines 
between guidance and rulemaking taking shortcuts.
    It is no surprise to the panel here that I have deep 
concerns about the OSHA regulation as it relates to anhydrous 
ammonia. And I think--I do not intend this to be an oversight 
hearing on that, and I just want to make that clear, Ms. Smith, 
but I think it does--I am trying to understand how we got to 
the point that this was a guidance and not a rulemaking.
    First I am going to ask Mr. Shelanski. In my opening 
statement, I talked about a survey that the Department of 
Agriculture (USDA)--the State Department of Agriculture--did on 
the OSHA guidance and asked, what are the impacts, because I 
wanted some kind of comparable analysis to what information we 
have received from OSHA.
    I want to just kind of give you some statistics: Only four 
companies representing 11 facilities--that was 3 percent of the 
North Dakota overall facilities--state that they are prepared 
to be compliant October 1 of this year. Twenty-six companies 
representing 67 facilities--which is 2 percent of the North 
Dakota facilities--indicated that they will not be in 
compliance by October 1. Eighteen companies representing 31 
facilities--which is roughly 9 percent of North Dakota 
facilities--indicated that they will, in fact, shut their door 
if OSHA begins enforcement on October 1.
    The estimate that we got from OSHA about costs of 
compliance was about $2,100 and some change. Each one of these 
companies that answered this survey and reported that they 
believe that their compliance costs are in the neighborhood of 
$25,000 to $50,000.
    Now, I want to set the context that these are folks who 
have been operating for a lot of years, in fact as many years 
as what some of these staff people have been born, under the 
same regulation, under the same rule. Nothing has changed. But 
now a guidance has been issued that results in them believing 
they have to shut their doors or incur $25-to $50,000 worth of 
costs to be in compliance.
    In your opinion, Mr. Shelanski, do you believe that this is 
non-significant guidance? Senator Lankford asked this question 
for the record. I think that it is fair to say OSHA did not 
give us a direct answer. But given what I am telling you about 
the attitude of this and the appearance of cost on the ground, 
I mean, would you say this is non-significant?
    Mr. Shelanski. Thank you very much, Senator.
    I will just start by saying I will treat the question as 
asking about whether it should be economically significant, 
just because ``significant'' and ``economically significant''--
--
    Senator Heitkamp. Yes.
    Mr. Shelanski [continuing]. Are two different categories.
    Senator Heitkamp. That is a fair point.
    Mr. Shelanski. Certainly the guidance--just to start with 
the basic principle--I think was significant in that there was 
interagency interests in that guidance. And that is one of the 
reasons that the Department of Labor I think brought it to OIRA 
for review at the time that it came in.
    It can be quite hard, especially with guidance, which 
already has a pre-existing regulation that it is interpreting, 
to know at the time of review what the costs will be. And I 
think that, in this particular case, at the time that--and I 
will refer you to DOL and to OSHA for the particulars of their 
process, but certainly when it came to OIRA--and we coordinated 
the interagency review process--I do not think that we had the 
kind of data that you just articulated before us.
    And one of the good things about guidance is that it is 
flexible. There is the opportunity for the public to come back 
to the agency and bring this kind of information forward. So I 
would have to look at what the current state of the numbers are 
and what the current evidence is to know whether or not the 
guidance would be economically significant, but I think at the 
time it was treated as a significant guidance but not an 
economically significant one.
    Senator Heitkamp. Yes, I think we would concede that there 
probably is $100 million worth of impact. But my concern is 
that if guidance is simply clarification under, kind of 
everybody--and does not have the force and effect of law--that 
guidance cannot change the law, cannot change a regulation; it 
can clarify--how can implementation of a guidance shut down a 
business?
    Mr. Shelanski. I think in this particular case----
    Senator Heitkamp. Legally.
    Mr. Shelanski. In this particular case there was an 
underlying regulation that at one point had been interpreted to 
have an exemption--a particular exemption--that was in place 
under which many of these businesses operated, or at least to 
some extent operated. And then this was an interpretation that 
changed, is my understanding, what the earlier interpretation 
had been.
    Senator Heitkamp. Yes, and this is a problem because we 
give deference--and I do not mean to give the Chairman any more 
ammunition than what he already has on deference--but we give 
deference to longstanding interpretations of agencies. We say, 
look, if Congress believed that should change, they have had 
notice over a long period of time that this is the 
interpretation, it is entitled to deference. It is how we have 
interpreted this rule.
    When we change how we interpret either rules or statutes, 
and the change has a dramatic impact on the livelihood of 
business people, we get a little suspicious that that does not 
look much like a guidance and it is not a legitimate new 
interpretation that somehow we have been wrong these 20-plus 
years and now we are right.
    And so, I think that this is the kind of example that leads 
people to really question all the good work that can be done in 
guidance. And I would be the first one to argue I think we need 
guidance. I think that guidance is extraordinarily valuable. I 
have seen it work, especially in the tax arena when we think 
about tax letters and giving certainty so people can move 
forward. But I am really concerned about putting a label on an 
agency interpretation that changes a longstanding 
interpretation and that has this kind of impact in the 
marketplace.
    And so I want to just want to kind of go through where we 
are at, Ms. Smith, because I want to acknowledge some of the 
work that OSHA has done in response to probably this Committee 
more than almost anything. And so I want to say, both the 
Chairman and I wrote letters which resulted in six months' stay 
of enforcement and OSHA attendance at the Anhydrous Ammonia 
Dealers Conference in Mandan, North Dakota, which I greatly 
appreciate.
    The Fiscal Year 2016 Omnibus Appropriations bill included 
report language that restricted implementation of the guidance 
that resulted in reclassification of retail facilities. It is 
my understanding that OSHA considered it report language and 
not legal language and announced that it will begin enforcement 
on October 1. On May 6, OSHA announced the convening of a panel 
and is asking that panel to make recommendations.
    I guess my question is, this might be a path forward. And, 
if the best thing that we can do is just two more months of 
forbearance while we work through some of these issues--I know 
you 
guys--October 1 is around the corner, but it would be 
extraordinarily helpful for us as we work through this.
    So I want to know where the panel is in process. And what 
can you tell me about the work that you are doing? How will the 
results of the panel affect the decisions that you make at OSHA 
going forward? And is OSHA planning to commence enforcement 
next Saturday?
    Ms. Smith. I am having problems pushing the right button.
    So, thank you, Senator, for those questions.
    The OSHA rulemaking process, as you probably know, is 
long and complicated, longer and more complicated than most. 
Before they engage in rulemaking, they have to go to the small 
business--called a Small Business Regulatory Enforcement 
Fairness Act (SBREFA) panel and basically ask the panel what is 
their opinion about whether they should engage in rulemaking. 
That is a required first step to rulemaking.
    So we have gone to that panel. We have not gone through 
that process--it can be a lengthy process--and we will take the 
recommendations of that panel into serious consideration. We 
cannot do rulemaking until we go to that panel. So that is the 
first thing.
    And the second thing is, it is true that we at the Labor 
Department did not consider the report language legally 
binding. However, given the facts that you have, given the 
interest that Congress has had, we did agree that we would 
abide by the report language and not do any enforcement before 
October 1, 2016.
    My understanding is that the text of the continuing 
resolution (CR) was released this afternoon. I have not seen 
it. I do not know if that report language continues. And, 
honestly, I have not been able to consult with my colleagues in 
OSHA to determine--if there is report language, they clearly 
will follow it. If there is not report language, I honestly do 
not know what they are thinking of doing.
    Senator Heitkamp. And I would say this: I do not think that 
at this point, although this is a moving--it is an instrument 
in process, so we do not know what the final CR is going to 
look like, but I do not think you need a CR to say, look, we 
may have been too hasty in making a determination.
    And I get safety. I mean, anyone who lives in farm country 
the way I do--I basically was on the board of directors of an 
entity that manufactured anhydrous. I understand what anhydrous 
ammonia is and I understand the risk. So the net result is when 
you do not have retailers who are managing it at that level, 
you have direct sales off semis in a farmstead. So let's just 
presuppose that that might even be more dangerous. In the law 
of unintended consequences, that might be actually even more 
dangerous than what you are proposing.
    And so, I do not think you need Congress to tell you not to 
do this. I think what you need to say is, guidance should be 
interpretive. Guidance should not change the status quo in a 
dramatic way. We need to rethink our cost estimates, and that 
we are going to make an election to delay the implementation of 
this guidance.
    I mean, if you have the authority to issue it, you have the 
authority to delay it. That is just law 101. If you just do 
that, and even if it is just until the end of the year while we 
work through this, that would go a long way toward people in 
rural America, 
who already have a whole lot of stress right now, given the 
economics--people saying, well, at least they listened and we 
have a chance to actually have a conversation.
    And I recognize all the statements, especially yours, Ms. 
McIntosh, about, we want access to letting people know, but, 
guidance--if you said, as a lawyer, we issued a guidance, I go, 
hmm, guidance does not have the force and effect of law. If I 
only have so much time and so many billable hours to my client, 
am I going to read a guidance or am I going to read a proposed 
rule?
    And so, just understand the frustration that I have 
defending this kind of action when I believe that it has an 
economic consequence issued in a guidance, not in a rule, and 
as a result we are going to put people in North Dakota out of 
business. It is just tough.
    Ms. Smith. So, Senator, I appreciate your comments and I 
will take them back to my colleagues in OSHA. Obviously, I am 
not the Assistant Secretary for OSHA so I cannot make any 
commitments to you, but one thing I would like to point out, 
which is that I think OSHA did recognize the seriousness of 
these changes and they did put out a request for information. 
They put out, in the Federal Register, notice to the regulated 
community that they were considering making these changes. They 
asked for comments on these changes. They got a lot of comments 
on these changes, including from many of the trade 
associations.
    Senator Heitkamp. You know you are just arguing that this 
should have been a rules change.
    Ms. Smith. I am not arguing. [Laughter.]
    I am arguing that we go above and beyond----
    Senator Heitkamp. Yes, you are convincing me it should have 
been a rule change.
    Ms. Smith. We go above and beyond what we are required to 
do.
    Senator Heitkamp. I think you did less than what was 
required. And that is our difference of opinion on--and it 
leads this Committee to think, guidance, boy, that does not 
look like guidance, because something that should not have the 
force and effect of law, simply provides some structure to a 
regulation, should not change the status quo the way this has 
changed the status quo.
    And I do not want to beat a dead horse here. I would like 
an answer on whether you guys are going to--regardless of what 
happens with the CR, whether your colleagues at OSHA are going 
to delay implementation of this guidance as we work through 
some of these additional issues and as we get a response to 
some of the concerns that I have raised today and that have 
been raised across rural America.
    Ms. Smith. Senator, like I said, I can commit to you that I 
will take these remarks back to OSHA and discuss this with them 
very seriously.
    Senator Lankford. OK, as is the tradition of the Committee, 
I am going to open up the microphone just for an open 
conversation here between the two of us and other Members as 
they join us in the conversation as well.
    But, Mr. Shelanski, let me start with you. Are you 
confident that OIRA sees all the agency guidance documents that 
could potentially be significant? Are you confident you are 
seeing all those now in all definitions of ``significant''?
    Mr. Shelanski. No, we do not, and I do not think that we 
would expect to. The number of guidances that we would review I 
think is just a subset even of significant guidances.
    Agencies are required, under the 2007 Good Guidance 
Practices, or are advised under the 2007 Good Guidance 
Practices, to follow certain procedures and develop certain 
procedures for significant guidances. But I think it would get 
in the way of the real benefits of guidance if all such 
significant guidances were to come through OIRA for review, or 
any entity for review.
    Senator Lankford. So what is the standard of what the 
agency should send to you for review?
    Mr. Shelanski. Well, certainly the economically significant 
guidances are ones that they must take notice and comment on, 
and those are the ones that we want to see. As I said, those 
are relatively uncommon.
    The ones we tend to see--I would say the largest categories 
of the documents that we tend to see are ones that just 
agencies are interested in getting additional input on and help 
in developing clarity, so they will voluntarily bring a number 
of them with us.
    Guidances that are associated with a rule that we have 
under review or have recently had under review tend to be ones 
that we would see as a matter of course and that we ask the 
agencies to submit to us because they are closer related to 
something that is really very much our core function of 
reviewing the executive branch regulations.
    Senator Lankford. But you are looking for overlap as well, 
and what I am trying to figure out is--I would assume you are 
trying to get as many significant guidance documents as 
possible, because if three different entities are all putting 
out some sort of rule that affects the same industry at nearly 
the same time, possibly different deadlines--which has happened 
before--you are the person that is supposed to help sort that 
out and to say, pause, wait, somebody else is doing this; let's 
coordinate this together.
    Mr. Shelanski. Right. That is exactly right. And the third 
category I think that is, one of the very common ones where we 
would see a guidance document is where there are those 
interagency kinds of interests, and we want to make sure that 
the agencies are coordinated.
    Senator Lankford. But they would only know if they actually 
sent it to you. What I am trying to figure out is if--you have 
an interest in seeing as many as possible. If I am an entity 
and I have my own process in place for developing--whether it 
is significant or not; I look at it as significant--I would 
assume that is coming to you, not assume I have it. It sounds 
like you are saying, it would be nice if they sent it to us, 
but they do not have to unless it is economically significant.
    Mr. Shelanski. They do not have to unless--if we get a 
request that as----
    Senator Lankford. But then who is sorting out the 
conflicting guidances that may come out or the conflicting 
deadlines that may come out from multiple entities because they 
do not know someone else is doing this unless you flag them to 
it.
    Mr. Shelanski. So I think there are two ways for that to be 
sorted out.
    In the time that I have been in the job, I have not seen 
instances where a guidance that affects another agency's 
similar guidance has failed to come through us. We tend to see 
those because agencies bring them to us, or the agency that has 
not promulgated a guidance but regulates in the same area will 
contact us and say, we know that Department X is developing a 
guidance on a topic that is relevant for us; we would like to 
see it.
    I think the other very important way that this kind of 
thing gets sorted out is, under the 2007 Good Guidance 
Practices and under a lot of the practices that the GAO 
identified and that the departments are developing, there is a 
lot of feedback--even on guidances that do not go out for 
formal notice and comment and for guidances that we do not 
review--for the public to submit comments, concerns, 
complaints, inconsistencies so that those guidances can be 
coordinated.
    So there is, I think, a pretty good system in place without 
our intervention for making those corrections.
    Senator Lankford. It gets noisy in a hurry when industry, 
individuals, employers, employees suddenly realize, I have two 
or three bosses here all telling me to do different things. 
Their perception, rightfully so, is no one is watching. And so 
the opportunity for those things to be able to come to you 
first rather than individuals having to raise it and know the 
right person to call and to say, this is a problem, we have two 
different deadlines that conflict or two different guidances, 
would be helpful.
    Let me ask a question with that same thing on what you were 
just saying on working at deconflicting. If a guidance is 
promulgated by any entity and, fairly quickly, industry, 
businesses, whoever it may be, States--contacts you and say, 
this has above $100 million of cost, and they can show you 
pretty quickly how and why, is there a position from OIRA to 
then stop and say: This is economically significant, or it 
could be. Was there a study done? Let's pause on this guidance. 
Let's make sure that it is done--just make sure this should 
have not been a regulation rather than a guidance document.
    Because you go back into some of the process safety 
management (PSM) rules and other things that we have discussed, 
pretty quickly it was learned this is well in excess of $100 
million. But to be able to raise some issues up and to say, 
well, this is guidance, we are going to keep pressing it as 
guidance, who has the pause button to say, we have to relook at 
this as economically significant?
    Mr. Shelanski. Thank you, Senator.
    If we get information from the public--if industry contacts 
us or stakeholders of any kind contact us to let us know that a 
guidance has gone out that is either having the effect of new 
law, so really is not on the side of the line of guidance but 
more of regulation, or is having an economically significant 
effect and did not go through the notice and comment 
requirements of the 2007 Good Guidance Practices, we are in a 
position to ask the agencies to please come in to talk to us 
about the guidance. And once we get a better picture of what is 
going on, we can call that guidance in for review.
    Senator Lankford. Do you have the ability to be able to 
force a pause? It sounds like a very polite process: We can ask 
them to go back and review on that. Who has the ability to be 
able to say this is an issue? Is that an outside court? Is that 
working with the agency? Is that OIRA? Who has it?
    Mr. Shelanski. I do not know the extent to which I can say 
I have an--I can absolutely stop something.
    Senator Lankford. I am just saying it is not hypothetical, 
obviously.
    Mr. Shelanski. No.
    Senator Lankford. We can all go through multiple guidances 
that when it went out and came out, agencies all said, I do not 
think this is economically significant, did not come to OIRA so 
therefore was not open to the Congressional Review Act (CRA), 
for instance, and could have the possibility of skirting 
Federal law. There are so many different things that go out. 
And immediately it comes up and individuals say, just in my 
company that will cost $20 million. So it is easily above $100 
million nationwide.
    How do we pause and say, let's do this right; I think we 
put out something that is economically significant without good 
input?
    Mr. Shelanski. I think at that point there are two 
processes that can be in place. I do not think an agency would 
refuse our request to look at the guidance to determine whether 
or not there was a likelihood that it was economically 
significant and then to consider what remedial steps should be 
taken.
    Senator Lankford. Do you have an example of when that might 
have happened or--I mean, I am not trying to put you on the 
spot on it, but just, is there one that you know of at this 
point that has happened like that?
    Mr. Shelanski. There are times when we have known that 
agencies were working on guidances that could possibly have a 
significant effect on the public, a significant economic 
effect, and we have asked the agencies not to issue it without 
interagency review, and the agency has said OK and submitted it 
to us.
    A recent example of that would be the Food and Drug 
Administration (FDA's) sodium guidance. It is a guidance that 
sets no thresholds; it sets no sodium reduction methods. It 
makes recommendations. We do not know the extent to which 
restaurants or food manufacturers will follow those 
recommendations, but there is a reasonable chance that one 
could anticipate they would take a number of steps that could 
cost quite a bit of money.
    We therefore asked for that guidance to come through 
review. We put it through review and now it is out for notice 
and comment, which is how we would treat a guidance that either 
will have or has a reasonably good possibility of having an 
economically significant effect.
    Senator Lankford. Because there are guidance documents that 
are going out that are not coming through OIRA, do you have a 
concern that there may be some guidances being promulgated and 
put out there that are economically significant that might 
bypass the CRA legal requirement for the Congressional Review 
Act, and to say: We are putting this out; it is not 
economically significant so it is not exposed to the 
Congressional Review Act?
    Mr. Shelanski. I think that would be--I have not 
encountered such a situation.
    Senator Lankford. So that is not a concern to you that that 
would come out?
    Mr. Shelanski. I think it would be a very unlikely event 
that that would happen. If it happens, I think it is extremely 
rare and unusual.
    Senator Lankford. I hope you are correct on that. The 
question is the unknown part of it. There is a concern to say, 
if something looks significant, there is a benefit for the 
agency to go within the executive branch and ask the second 
opinion. That is why the process was set up in the first place, 
not to bog you down.
    But you are seen by everyone within industry and across the 
United States--that know you are an incredibly important but 
invisible agency in many ways. You are seen by the entity as 
being the gatekeeper to make sure there are no conflicting 
rules, there is not significant things that come out, that 
everybody is following the law through the process.
    The agencies see the thing that has to be done, you see the 
way that it has to be done, and I think there is a great 
benefit of the design of it to make sure that there is a check. 
And my concern is--it is right to be able to run it through you 
whenever it gets close, and my perception--and you can tell me 
I am wrong--my perception is, because there are so many rules 
that are coming out, there is not time to be able to run 
through all of them so set up a process in the agency and we 
will trust you on it, when really everybody else is trusting 
you on it.
    Do you have a thought on that?
    Mr. Shelanski. Yes. My thought is this: I think while there 
is the theoretical possibility and maybe the occasional example 
of where that has happened, I think it is unusual for two 
reasons. Agencies do not want their guidances to be held in 
abeyance, whether by a court or Congress or some other process. 
They therefore are interested--I think if they are concerned 
that there would be that kind of public response--to get that 
cleared up ahead of time. So I think in most cases agencies 
would bring those kinds of guidance documents to us.
    Because guidance is, by its nature, non-binding and should 
not be creating new legal obligations----
    Senator Lankford. That is the theory.
    Mr. Shelanski [continuing]. I think the number of guidance 
documents that would, themselves, separately from the 
underlying regulation, create a lot of economic impact are very 
limited.
    And I would point out that the one case that we have talked 
about today, I think we and the agency heard rather quickly 
what the public concern was about that guidance, which is one 
of the reasons it has not gone in to effect. So I suggest that 
there are some pretty good safeguards.
    Senator Lankford. Well, I would say only this: That public 
consternation that came back at the agency and entities 
obviously floods into our office when they raise the question, 
what is the Federal Government doing to us rather than for us? 
And it begged for early notice and comment rather than late 
having to fight it.
    I can assure you, Americans are not excited about fighting 
their own government. Once it is out there, there is a 
perception that they are now fighting it. If you can help them 
in the process to go, this is going to be a fight, this is 
economically significant, you can certainly help resolve a lot 
of the frustration across the ``fruited plain'' just because 
people want their government to help them, not do something to 
them on that. And I get that.
    Let me ask you a question just on exemptions. In 1993, OMB 
gave exemptions to the Internal Revenue Service (IRS) from a 
lot of the process of going through OIRA. It was an interesting 
letter. And it was obviously OMB had the opportunity to be able 
to give exemptions based on the statute and they did that. They 
still hold on that today. Do you think it is appropriate for 
the IRS to be exempt from OIRA review?
    Mr. Shelanski. Thank you, Senator.
    I want to clarify first that the IRS is, in fact, not 
exempt from OIRA review. We do review some IRS regulations.
    Senator Lankford. Make a guess on a percentage.
    Mr. Shelanski. Oh, it is small, but that has to do with the 
nature of IRS rulemaking.
    Senator Lankford. Sure, and I understand a lot of their 
rules are very specific in their letters, as we have talked 
about before.
    And by the way, I am not trying to cut off those letters 
because they do help provide clarity. I am trying to figure out 
oversight.
    Please go ahead. Continue.
    Mr. Shelanski. Thank you.
    I think the purpose of that Memorandum of Understanding 
(MOU) with the Treasury Department was that many of the IRS 
rules--in fact, the vast majority--really are purely 
interpretive rules that are rather directly implementing 
statutory directives from Congress into the tax code. And often 
those have to be put in place rather quickly so people can do 
new tax planning, and there is very little value to another 
layer of review.
    So I think the decision was reached for the interpretive 
rules of the IRS to be outside of the OIRA review process. On 
the other hand, rules that do not fit that description do come 
to OIRA for review. The IRS just does rather few of those.
    Senator Lankford. Right. Well, the question that hangs out 
there, though, is the GAO just did this study where they 
determined that the IRS really does not document their analysis 
of their economic impact. They basically refer that there is 
not an economic impact. Or if they have it, they are not 
documenting it.
    And so it is the unknown that hangs out there as well that, 
again, the GAO determined IRS is not really tracking this. And 
OIRA is in a position to say, we are only looking at what they 
have tracked. There seems to be no gatekeeper in between the 
two. That is my concern.
    Senator Heitkamp. I guess, Mr. Shelanski, one of the IRS 
rules that is--or IRS interpretive changes that we have seen 
has been the inversion, the change in terms of how we are 
dealing with inversions, corporate inversions. Is that a change 
that came to OIRA?
    Mr. Shelanski. So we have had two rules from the IRS 
related to inversions and they did come through for review.
    Senator Heitkamp. OK. So that would be a good example of 
something that would reach that level of review at OIRA?
    Mr. Shelanski. Yes, those would not fall within the 
exemption or the Memorandum of Understanding that was issued in 
the early 1990s, because those do not fit the definition of 
interpretive rules that are really dictated by the statutory 
changes.
    Senator Heitkamp. I think that we all know that financial 
and commercial paper changes, the nature of it changes. There 
has to be some flexibility that they have because they have to 
make those determinations. They cannot wait five years. I mean, 
the tax returns have to be filed.
    And so I can appreciate it, but I do believe that there are 
things that are done at the IRS that need maybe a second look, 
especially when people believe that they have relied on 
longstanding interpretation and that interpretation now is 
changing.
    And that is--it goes back to--and I do not mean to beat a 
dead horse, but you did say, that very quickly you realized 
that there was a significant impact, a lot of significant 
interests that implantation has been delayed. It is not exactly 
true. We are up against the wire, again October 1. And, we 
still have not satisfied the public that they have had adequate 
input in this process.
    And so, would you join me in encouraging OSHA to delay 
implementation of that regulation, or that guidance?
    Mr. Shelanski. Well, I think one of the things that I think 
OSHA has done that is really heartening is that they did 
initiate the SBREFA panel to make recommendations.
    Senator Heitkamp. Right.
    Mr. Shelanski. And I think that they did that because they 
heard this kind of----
    Senator Heitkamp. But if I can--I mean, I am going to add 
to this because so often what we hear is that: We go to court 
but in the meantime the court does not stay the implementation. 
The process goes on. So even if we win through that review 
process, even if we win in court, we have already changed and 
implemented and spent this money, so we were not given an 
opportunity to really have input before the economic input hit 
us.
    So I think that is the case here, and I think we need to be 
really careful. You say, well, we are heartened that they 
started this process. So, fine, let's say that through this 
process they reverse it but they are going to do enforcement 
October 1 and you already have some people who have changed 
their operation to facilitate the change. Is that really the 
kind of relationship we want with the public as it relates to 
an interpretive change that we see in this case?
    Mr. Shelanski. I think that certainly the public feedback 
and acting in an accountable way on that public feedback is 
important to all of our regulatory system.
    Senator Heitkamp. Yes.
    Mr. Shelanski. And I will look forward to discussing the 
matter with our colleagues at the Department of Labor and OSHA 
in the wake of this hearing.
    Senator Heitkamp. Yes. And, it has to be done fairly soon. 
Is it the 21st today?
    Senator Lankford. Twenty-second.
    Senator Heitkamp. Twenty-second, so we have 8 days.
    Senator Lankford. Just following up on that same issue--we 
obviously talked about this last year as well and it is still 
an ongoing issue, and it is a good example of process and how 
the process works or does not work on determining guidance or 
non-guidance.
    So the last time that we actually talked through this with 
the wonderful Recognized and Generally Accepted Good 
Engineering Practices (RAGAGEP), which has the worst possible 
acronym ever out there----
    Senator Heitkamp. I could not agree more.
    Senator Lankford [continuing]. Yes--the chemical 
concentrations and the retail exemption. We in this Committee 
challenged all three of those, saying these do not smell like 
guidance. These look like regulations to us but they are being 
given out as guidance.
    Obviously OSHA and the Department of Labor dealt with 
multiple lawsuits. This was not just industry saying, hey, 
there is a problem. It all goes to court. Tremendous amount of 
cost and expense both to the Federal taxpayer and outside 
industry to be able to fight against that. And since that time, 
we have delayed enforcement of the retail exemption. And we 
received at this Committee a very interesting letter from the 
Department of Labor coming back and saying, we are now putting 
this out for notice and comment.
    And then we have had a settlement dealing with the 
Recognized and Generally Accepted Good Engineering Practices 
piece in the chemical concentrations, which again look like 
regulations to me when it is all said and done because those 
were pulled out, gone to a court; with that court and those 
group of individuals that were in the lawsuit, created a 
settlement and came out with a decision, and then now are 
giving it to everyone.
    That looks like a new regulatory process to us to say: We 
needed a regulation. We put out a guidance. We went to a 
lawsuit, did a settlement, then came out with a piece. It just 
looks like a faster way to create a regulation in a different 
route to be able to get there.
    And it also comes back to us and reaffirms our question 
from a year ago. These smell like regulations and it certainly 
looks like they ended up acting like regulations, based on just 
not only cost but what they did and how they were treated once 
they left off here. What am I missing?
    Ms. Smith. Both the RAGAGEP guidance, the original 
guidance, and the Appendix A guidance were guidance documents. 
They were never legally binding.
    When the Department of Labor was asked to look into that by 
the President's Executive Order, we did go above and beyond 
what we thought and put out, for notice and comment that we 
were thinking of changing these guidance documents. We then did 
change the guidance documents after we got notice and comments.
    And, yes, we were sued. The plaintiffs in both the lawsuits 
that we settled, although their original claims were that we 
had to 
go through notice and comment, in the end the plaintiffs who 
were--the trade associations representing most of the regulated 
industry, the plaintiffs were willing to basically say: If you 
make certain changes in these guidance documents we are happy 
with them.
    Senator Lankford. Again, that is only those individuals 
that were in the suit.
    Ms. Smith. Right.
    Senator Lankford. That is part of the challenge. It created 
a new process but not everyone was privy to the conversation. 
Those that had enough money, and through the trade association, 
were able to do the lawsuit. They got to negotiate that rather 
than everybody.
    Ms. Smith. Well, everyone could have negotiated it. I mean, 
we would have been perfectly happy with OSHA, that if those 
individuals had come in to us and say, we think there are some 
problems with the guidance; we want to make changes to the 
guidance, we would have sat down and talked to them. We have 
made changes to other guidances when individuals have come in 
after the guidances were done and they tell us that. But----
    Senator Lankford. But you know--I am sorry to interrupt--
you know as well as I do, those were coming out very rapidly 
after the fertilizer plant explosion in West, Texas. And what 
we heard in this Committee and what was out in the public was: 
This is an emergency. We have to do this. Let's get it done 
quickly and let's get the process started. Of course, now we 
have learned the West plant was actually intentionally set 
fire, not an industrial accident after all. But the perception 
at the time was, we are running; we are going.
    And so I understand industry stepping in, raising their 
hand and saying, include us in the conversation, but it seemed 
to take a lawsuit to be included, not just a, hey, let's sit 
down at the office and talk.
    Ms. Smith. With all due respect, Senator, after the 
explosion the President put out an Executive Order. We did put 
out the request for information, specifically saying that we 
were considering changing the three guidances. And we waited 
three months for comments from the public. We got a lot of 
comments. We then extended 
it--at the public's request we extended the comment period even 
further for about three weeks. And then we sat back and we 
analyzed the comments and put out the guidance.
    Senator Heitkamp. Under the Administrative Agencies 
Practice Act there is an emergency rulemaking procedure that 
can be utilized in circumstances where public safety needs to 
be addressed in an expedited fashion. Why wasn't that used?
    Ms. Smith. Because what we were changing was guidance. We 
were not changing a rule.
    Senator Heitkamp. That is a problem. [Laughter.]
    And, we keep going back to, what we were changing was 
guidance. And, it just keeps getting to that point where had 
you started with a rulemaking process, you would have a firmer 
foundation for this whole structure that you have created, and 
therefore more systematic support, I think.
    And, we are talking in circles here because we are here to 
try and figure out how we more effectively delineate between 
guidance that we know--and I think it is unanimous at this 
podium--that these guidances that were issued by OSHA are a 
whole lot more like rules and not guidance, in our 
understanding of what that means.
    So, I mean, you obviously have a difference of opinion. 
Just work with us to try and figure out where that line is. And 
when it so dramatically affects people's livelihoods, it just 
really gets us to that spot where we just go, that should not 
be done. And I am not saying on a whim. I understand what you 
are saying about process, Ms. Smith. I understand what you are 
saying about opening it up. But it looks and reads to me like 
guidance is being used as ``rulemaking light.''
    Ms. Smith. Senator, I understand your point.
    Two things I would like to say, which is that the original 
guidances were not done through notice and comment rulemaking. 
And maybe that is the problem, because we were interpreting a 
rule. If we had gone through notice and comment, for all we 
know we would not have put out the original guidance. We would 
not have put out guidance. We might have put out a different 
rule than the one that we put out. But we did not go through 
notice and comment guidance when we originally put out all 
these interpretations.
    And I know I am being the lawyer in the room here, so I 
apologize for that, but the Supreme Court has said that if you 
put it out originally as guidance, you do not have to go 
through notice and comment rulemaking to change that guidance. 
So I wonder whether we should consider if we are putting out 
guidance that is interpreting certain regulations, maybe we do 
need to put more notice and comment, but we did not do notice 
and comment.
    And remember--Senator Lankford, I would like to say this to 
you about the settlements. Yes, we settled those cases, but it 
is still guidance documents. In any individual situation--if, 
for instance, OSHA cites someone for violation of Appendix A, 
they can contest that citation. It is not legally binding on 
them. It is our interpretation. But there is a whole contest 
provision that can go. And from time to time, the OSHA or the 
Labor Department, either the administrative law just says, you 
are wrong; your guidance is wrong.
    And so that is the difference between guidance, in my 
opinion, and notice and comment rulemaking. If we had gone 
through notice and comment rulemaking in the beginning or the 
second time, there would not be that opportunity to contest it.
    Senator Heitkamp. Would you agree, as a lawyer, that 
longstanding agency interpretation is given a certain level of 
deference by the courts?
    Ms. Smith. I would have said that 5 years ago, but given 
the recent Supreme Court decisions, I am not so sure that is 
true. I mean, I think the most interesting thing in the 
mortgage bankers case, which is that the Court said you did not 
have to go through notice and comment rulemaking to change 
guidance----
    Senator Lankford. Only on interpretive.
    Ms. Smith. Only interpretive guidance, but it did not say 
what level of deference it would give to that change in 
guidance.
    Senator Heitkamp. I think that there are intellectually 
challenging questions here in terms of where the line is. And I 
think that there is some common ground that we can achieve with 
agencies, especially when we are now operating with a third 
branch of government, which is the judicial branch, which you 
hardly ever get clarity from, right? I mean, that takes a much 
longer period of time to build the case law. That is a pretty 
big ship to move.
    And so, I could not agree with you more that guidance, 
especially the kind of guidance that we are talking about here, 
if, in fact, you have it in an agency, that you may have to 
rethink whether a guidance document is the right instrument to, 
in fact, provide that kind of clarity to the law, that kind of 
direction, and that if this is not better done in rulemaking. I 
could not agree with you more.
    And maybe that is the cyclical discussion that we are 
having here, because you know what you are doing in terms of 
your guidance, your amending guidance, and we are saying, we do 
not get how any of this can be guidance and how this cannot be 
rulemaking, given the consequences of what the change means to 
the industry.
    Senator Lankford. OK, can I jump in here as well, just 
based on what you were saying on that, because what Senator 
Heitkamp is saying is the crux of the issue. It is trying to 
figure this out and why this process part of this conversation 
is so important. And obviously we are talking through specifics 
here because they give examples, but it is much larger issue 
that we are trying to get to the crux of in the definition and 
how we can help provide some clarity to this.
    Based on what you were just saying, Ms. Smith, on the 
legally binding and going to a court to be able to review this 
and to go through the process on it--Ms. McIntosh, before you 
think we are just going to skip Education on this---- 
[Laughter.]
    Let me draw back and come right off of what Ms. Smith was 
just saying.
    Last year Secretary King and I were having a conversation 
in one of the hearings and we were talking about the 2011 
``Dear Colleague Letter (DCL)'' sexual assault guidance that 
was put out. The change from clear and convincing evidence--
which most universities use--to the preponderance of evidence, 
and to try to figure out how this works within that 
institution--Ms. Smith was alluding to something that we have 
all talked about--it is not legally binding.
    The question is, if a school chooses to apply clear and 
convincing evidence in their issues for sexual assault, how 
would the Department respond?
    Ms. McIntosh. So, thank you for including me in this 
conversation and for that question.
    I am not a lawyer, and you did ask me before about the 
change--what you determine--what you call a change in the 
standard of evidence. It is my understanding that our ``Dear 
Colleague'' that makes a reference to the preponderance did not 
change our interpretation--longstanding interpretation----
    Senator Lankford. I could introduce you to a lot of 
university presidents that do not agree with that statement and 
a tremendous number of law professors across the country that 
do not agree with that statement. They see it as a very large 
change in how evidence is handled.
    Ms. McIntosh. So we may have to disagree for this moment, 
but that was the evidence standard that our agency had been 
using and it is what we understand many universities were 
using, and we think it properly derives from the words in Title 
9.
    So, that said, that guidance document, again, does not have 
the force of law. So the guidance document----
    Senator Lankford. I am so sorry to interrupt. Can you help 
me understand, from Title 9, where that comes from? And again, 
not trying to put you on the spot----
    Ms. McIntosh. Right.
    Senator Lankford [continuing]. But you were just mentioning 
you think it comes from Title 9 and from the word that is 
there. I cannot seem to draw that standard from anything that I 
read in Title 9.
    Ms. McIntosh. So I will tell you what I believe the source 
is.
    So, this is our interpretation of the words ``equitable'' 
in the Title 9 regulation, and this burden of proof is how we, 
you know--here we go. Apparently multiple administrations, not 
just our administration, that for procedures to be equitable 
they must use the preponderance of evidence standard. And that 
that is our interpretation of Title 9.
    Now, the guidance document itself simply explains that. It 
does not have the force of law. So any----
    Senator Lankford. So we are back to my original question. 
If a university chooses to use clear and convincing standards 
versus preponderance of evidence, what does the Department of 
Education do with that school?
    Ms. McIntosh. Well, so what would happen in all of our 
enforcement is there could potentially be a complaint that 
comes from someone who feels that the sexual harassment policy 
in the university was violating their rights, and we would 
investigate that complaint thoroughly and around all the 
specific facts of that individual case. And that could take 
some time. And we would then come to a determination on the 
law--not about our guidance but on the law--and work with the 
university to come into compliance, if that was required.
    Senator Lankford. I am still waiting. I am sorry. If a 
university uses clear and convincing as their evidence 
standard, which many have for a long time----
    Ms. McIntosh. So, I cannot answer about any hypothetical 
case or example where there might be----
    Senator Lankford. Well, how many----
    Ms. McIntosh [continuing]. Clear and convincing.
    Senator Lankford. How many lawsuits are currently pending 
in the United States based on this ``Dear Colleague'' letter? 
Do you know?
    Ms. McIntosh. I do not know the answer to that. I can 
certainly follow up.
    Senator Lankford. You know what? I would be interested to 
know.
    Ms. McIntosh. Based on the letter or the clear and 
convincing?
    Senator Lankford. Correct. So, for instance, just this 
week--and I am going to leave all the different universities 
out--just this week I was talking with a university president, 
and I mentioned that we were going to have this hearing, we 
were going to talk about some of these issues, and he shook his 
head and he said: I currently have two lawsuits against my 
university right now because we chose to use preponderance of 
evidence instead of clear and convincing, and we have lawsuits 
against our university right now.
    And that story is repeated over and over again from 
students or former students that are challenging the new 
process, and also from universities that are challenging the 
Department of Education.
    This has not been a simple guidance just to be able to 
clarify what most universities do. This has been an enormous 
change that it would have been extremely helpful not only to be 
able to look at and to be able to go through a full notice and 
comment, but to also be able to determine why this standard 
versus this standard?
    And it has created this long fight over an issue that we 
all care very much about. None of us want sexual assaults on 
campuses. We all want a fair process. This is often a legal 
process with local police within that State, but it is also a 
university issue as well and it has become a very big issue. So 
if there is a way that the Department of Education can identify 
for me how many lawsuits they know of across the country, that 
would be helpful.
    Ms. McIntosh. So, I appreciate your concern about the 
prevalence of sexual harassment and sexual violence on campus 
and how very important it is that our Office of Civil Rights 
(OCR) maintain vigilance and investigate complaints as they 
come to us. I think you know we have over 200 active 
investigations about sexual harassment and sexual violence on 
campuses. It is a very serious problem.
    Senator Lankford. It is a very serious problem.
    Ms. McIntosh. And it is something we take very seriously.
    Senator Lankford. But it suddenly----
    Ms. McIntosh. I cannot answer the question about other 
lawsuits filed against universities on the basis of this 
standard, but I will certainly take the question back and see 
if I can get more information about that.
    Senator Lankford. So at this point your statement would be 
it does not have the force of law, but it is your 
understanding----
    Ms. McIntosh. Our guidance document does not have the force 
of law.
    Senator Lankford. So if someone has a different standard--
--
    Ms. McIntosh. We would investigate complaints on a case-by-
case basis. And much of that goes well beyond the evidence 
standards, all the circumstances and facts about how a 
university handles sexual harassment complaints----
    Senator Lankford. Sure.
    Ms. McIntosh [continuing]. And work with the university to 
come to a better place.
    Senator Heitkamp. I think one of my concerns--and it goes 
back to what I said, longstanding agency interpretation and 
deference. I understand you have an opinion about what the law 
provides: clear and convincing evidence versus preponderance of 
the evidence. The university may have a different point of 
view. Eventually we are going to be in litigation, determining 
what, in fact, that standard is.
    The concern is that, when you issue guidance, somehow the 
courts get the idea that: We have given notice now. This is 
what it is. And it is an agency interpretation that is entitled 
to deference and so we are going to rule with the agency, when 
that interpretation was done through a guidance and not through 
a regulation where people were given an opportunity to comment.
    And so, where I may divert a little bit--I understand what 
you are saying. It is just: Hey, guys, this is what we think 
the law says. It is not binding. You want to litigate this. You 
want to have a different opinion. You can, but you run the 
risk, having a different opinion, of us taking enforcement 
action based on how we are interpreting the statute.
    I mean, you would agree that that happens, right? So why 
issue the guidance otherwise, if you are not giving them notice 
that you are going to sue if they do not agree with you?
    Ms. McIntosh. So, we issue the guidance so that a broader 
audience can understand how we interpret the laws and the 
related regulations under Title 9. If we did not issue the 
guidance, we would do one complaint at a time, which would not 
be an especially good use of taxpayer funds, and it would not 
protect students on the very broad and serious question of 
sexual harassment.
    I would repeat that we do not think we have ever changed 
our interpretation of the burden of proof from--we have never 
changed our longstanding interpretation. So----
    Senator Lankford. So why was this published, then, if that 
was the assumption?
    Ms. McIntosh. Well, the ``Dear Colleague'' letter about 
sexual harassment covers a variety of topics related to how a 
university can appropriately handle these. And that is simply 
one----
    Senator Lankford. But that standard of evidence was not 
published before. You are saying it was the assumption, but it 
has caused a firestorm across universities having to create, in 
many places--I am talking about regional colleges, 2-year 
colleges 
having to commit a tremendous amount of individual time and 
literally--as I have talked to some regional universities, 
literally pulling people out of the classroom and not hiring a 
professor in that spot because they had to hire additional 
compliance people to be able to manage just this one ``Dear 
Colleague'' statement.
    Ms. McIntosh. Well, I appreciate your concern and it is 
interesting to hear that feedback. I will certainly discuss it 
with my colleagues.
    Senator Heitkamp. I want to bring you back into this 
discussion, Mr. Shelanski. Obviously you can see we are 
struggling a little bit here. You are a lawyer, right? He is 
like, oh, do not ask me for a legal opinion.
    And I think that, given your experience and the role that 
you play, maybe your insight as we try and kind of narrow this 
issue or look at how we address concerns of the public about 
the overreach of guidance--not overreach in terms of the 
substance, but just that this should not be done with the 
guidance; this should be done with more process.
    I mean, how big of a problem do you think this is in agency 
interpretations today, this use of guidance rather than 
rulemaking?
    Mr. Shelanski. Thanks, Senator.
    I think that while there are certainly examples that we 
have been discussing today where there has been concern over 
agencies' use of guidance, I think that we should not lose 
sight of the fact that the vast majority of guidances do not 
raise this kind of concern, and that overall I think the 
guidance system works quite well.
    Senator Heitkamp. And it is welcomed by the regulated.
    Mr. Shelanski. And it is welcomed by the regulated entities 
because very often what they are looking for is a reasonably 
fast clarification or answer or explanation of how they might 
comply with existing legal obligations.
    Senator Heitkamp. Yes. I do not care what the answer is; 
just give me an answer so that I have certainty.
    Mr. Shelanski. Right, or let me know if what I am doing is 
good enough because the underlying regulation is not 
sufficiently clear to me that my compliance is adequate.
    So, I think that the--overall my observation, what I have 
seen, is a guidance system that works quite well and is quite 
healthy.
    Then I think there are the, few close cases that raise hard 
questions. And I think what I am hearing loud and clear from 
you and from Chairman Lankford today is these close cases need 
further thought in the level of process that they should go 
through. And I think that raises an interesting question that 
my agency colleagues and I, I am sure we will all take back to 
discuss about how----
    Senator Heitkamp. I mean, nobody up here wants to throw out 
the baby with the bathwater.
    Mr. Shelanski. Right.
    Senator Heitkamp. I have long maintained that I think 
guidance can be extraordinarily helpful. In fact, to eliminate 
guidance could be extraordinarily disruptive. But when guidance 
changes longstanding interpretation or somehow flips a switch 
and we are headed in a different direction, the spider sense 
takes off and we go, I am not sure that that is the right way 
to do this.
    Senator Lankford. Senator Carper, we are in just an open 
conversation. You are welcome to be able to join us.
    Senator Heitkamp. It is what we do in this Committee.
    Senator Lankford. Senator Carper, who is the Ranking Member 
of the full Committee, we are glad that you are here as well.
    Senator Carper. I can kindly do that. Thank for holding the 
hearing. All of you, thanks for coming out.
    I walked in and I noticed that the Chair of the 
Subcommittee has red hair and the Ranking Member. I notice the 
reporter here has red hair and one our witnesses appears to 
maybe have it. But I was going to ask unanimous consent for 
someone who did not have red hair to have a chance to say 
something. [Laughter.]
    Senator Lankford. Well, let me check with Senator Heitkamp 
before I give that right away.
    Senator Heitkamp. I do not know. [Laughter.]
    Senator Carper. OK, thanks. Thank you for--I love the 
spirit with which you--the two of you work together. It is an 
inspiration and a loud, good example for all of us. So thank 
you for that.
    Senator Heitkamp. Thank you.
    Senator Carper. I wish I could say something nice about 
your staffs, but I cannot do that too. [Laughter.]
    Good to see you all. Thank you very much for coming, for 
your service to our country.
    Mr. Shelanski, you remind me a lot of a guy who sat before 
us in this room not that many years ago, and I think the 
President nominated you for a job over at OMB. What was it 
called?
    Mr. Shelanski. That was when my hair was still red, before 
it was gray. [Laughter.]
    Senator Carper. That is OK; you still have hair. That is a 
plus.
    All right, I want to go back to something the President 
said in a State of the Union address. And I am not sure what 
year it was. It was about five or six years ago, maybe four, 
five, or six years ago. And he was talking about issuing 
regulations.
    And he was talking about not just, like, looking forward 
but actually taking the time to look back and to see what we 
had done by issuing regulations, if they were having the kind 
of effect that we were hopeful for or not, and if there were 
ways that we could tweak those regulations and in some cases 
retire them entirely, and what would that mean for our country?
    And I have heard a number, in the five or six years since 
he spoke at the State of the Union, that indicate how much we 
have saved in reducing just waste and, in some cases, paperwork 
and so forth. But the initial number I seem to recall hearing 
was like--we thought we would save, like, maybe $10-or $15 
billion over five years. That was, like, a preliminary number. 
And I am told that the number has gone up by quite a bit.
    Would you just talk about that for us and tell us how this 
has happened, because this is a number that I am seeing 
advertised now. I think it is $36-or $37 billion in savings 
over a five-year period. It is a good deal greater than what I 
think I had earlier anticipated, but that is good. But just 
talk about how we got there.
    Mr. Shelanski. Thank you, Senator Carper. I appreciate the 
question.
    The President did issue an Executive Order 13610 that asked 
agencies, all agencies, to put in place a process for 
retrospectively looking at the rules they already have on the 
books and to either eliminate or modify those rules that were 
no longer doing their job or were unnecessarily costly.
    Since that time--and a lot of----
    Senator Carper. When I heard about him doing that my 
thought was, do you think agencies would take this seriously or 
will they hunker down and maybe after a while just it would go 
away?
    Mr. Shelanski. I think the agencies have taken this 
seriously. And I think I actually--by the time I had arrived at 
OIRA, through the hard work of my predecessor and the OIRA 
staff----
    Senator Carper. Cass Sunstein.
    Mr. Shelanski [continuing]. Yes--they had put in place a 
reporting system. And we have kept the agencies on schedule, 
reporting to OIRA twice a year on their plans for retrospective 
review.
    Reports are easy to generate. What is harder is to 
institutionalize a practice of actually acting on those 
reports.
    Senator Carper. Right.
    Mr. Shelanski. And what we have seen in the four to five 
years since this process was undertaken, is that the agencies 
have--and we have asked them to--have been more specific about 
what actions they have completed, what actions they are 
abandoning, and an accounting for what savings they have 
created.
    And I think to date--I think at the time that I was going 
through my confirmation hearings, the number was about $10 
billion in savings were predicted. Since that time, and after 
that initial ramp-up, we have hit a level of five years' 
savings that we now estimate to be $38 billion and growing. 
Agencies have wholesale repealed, I think, you know, dozens of 
regulations and eliminated thousands of pages from the Federal 
Register.
    More importantly, we now have this process 
institutionalized throughout the executive branch agencies and 
have these agencies rather regularly dedicating resources to 
retrospective review.
    This is a process that we hope will continue. It is hard 
work for the agencies. The agencies obviously have tight 
budgets and tight staffing and they are eager to move forward 
with new policies, so to get them to stop and look back at 
regulations they have completed I think is difficult. I give a 
lot of credit to the agencies for taking this seriously and for 
achieving the benefits for the American public through 
regulatory reform that we have achieved to date.
    Senator Carper. If I could ask, who are some of the 
agencies that seem to have taken this more seriously than 
others?
    Mr. Shelanski. We have really gotten very good feedback and 
very good participation across the Federal Government. Some 
agencies have had lower-hanging fruit than others and so have 
been more able to do rules with major savings. USDA and the 
Environmental Protection Agency (EPA) have been able to grab a 
couple of rules that were very costly and change them early on, 
the Department of Transportation (DOT) as well.
    But I do not think that should signal that other agencies 
with less flamboyant single results are taking this any less 
seriously. We have really had very good participation, and it 
is one of the things that I hope will continue into the future 
and be one of this administration's positive legacies.
    Senator Carper. I think that certainly has a potential for 
being--is there anything that the Congress--this Committee of 
the Senate, the Congress could be doing, should be doing to 
make sure that this kind of good work continues?
    Mr. Shelanski. I think that----
    Senator Carper. Because the next President may not be all 
that much interested in this stuff.
    Mr. Shelanski. My hope is that the next President would be 
interested in this, because I think that retrospective review 
is part of good government, and I think that any President and, 
frankly, anybody of any party should think that being good 
stewards of the rules we have on our books is part of good 
government and a healthy regulatory system.
    I would be happy to give some further thought to what more 
you could do to support this, because I do think it is a very 
important function to carry forward.
    Senator Carper. Good. Thank you.
    Senator Lankford. There is a Heitkamp-Lankford bill that 
would help with that, that is already sitting out there, by the 
way, that our Committee has passed and you have supported. And 
there are ways to be able to deal with this directly. So, 
appreciate the conversation.
    Ms. McIntosh, by the way, Senator Carper, you are welcome 
to join in anytime in the conversation on this.
    Senator Carper. Thank you.
    Senator Lankford. Ms. McIntosh----
    Senator Carper. In that case--no, go ahead. [Laughter.]
    Senator Lankford [continuing]. Let me ask you a question 
that deals with current rulemaking in some process areas.
    All three of us on this dais voted for and supported a 
change for the Every Student Succeeds Act last year. In fact, 
85 Senators supported that, overwhelming supported in the 
House, affirmed by the President. In that, we specifically put 
in the ``supplement not supplant'' provision and specifically 
stated that States and local entities created their own 
methodologies.
    Some of the earlier rules that have come out from the 
Department of Education where the Department of Education has 
actually given a Federal methodology rather than allowing the 
local individuals--it seems to be a pretty straightforward, 
plain reading that all of us supported, allowing more local 
control in some of the decisions.
    Tell me that process for that reg coming out, and why, 
after specific statements of saying local decisionmaking on 
these methodologies, there is a Federal methodology coming out.
    Ms. McIntosh. So, on the topic of ``supplement not 
supplant,'' I think you know that the proposed rule first went 
into the negotiated rulemaking process, where people from all--
the stakeholders that deal with our Department got to discuss a 
first proposal and make a number of very interesting and 
helpful suggestions.
    We did not reach consensus on that negotiated rulemaking, 
but we did obtain quite a lot of feedback. We also obtained 
feedback from Members of Congress on the authorizing Committees 
and others. And after much reflection, we have a new proposal. 
I am not the expert on the details on this one either, but we 
have a new proposal that is now out for public comment. And it 
would basically be inappropriate for me to talk too much about 
how it is structured or how it might be structured in the 
future. We are eager to get public comment on that rule and we 
will then wrestle with those questions and of course be 
interested in your input as well.
    Senator Lankford. Sure. Yes, and we are glad to be able to 
say--but I guess what I am trying to get at is, again, it goes 
back to our Committee is not the authorizing Committee there 
that wrote the Mitchell bill. We are dealing with some of the 
oversight and the decisionmaking behind the scenes.
    The initial proposed rule came out with a Federal guide for 
that, a Federal statement on how to do it, when the law is 
pretty plain there would not be one, but there was right at the 
very beginning. And I guess I am trying to figure out how, in 
the first version that comes out publicly, suddenly there is a 
Federal ruling when everything says locals will decide the 
methodology here.
    Ms. McIntosh. I do not remember if it is true in the first, 
but in the current proposal there are several options for 
States to follow----
    Senator Lankford. Yes, but----
    Ms. McIntosh [continuing]. And districts to follow, so----
    Senator Lankford. But any options still violates, because 
it makes the statement very clearly, local decisionmakers set 
this. There is not a Federal guideline for it.
    Ms. McIntosh. So, I believe the Secretary has also 
addressed this in some of his hearings, and we think our rule 
addresses the very plain language in the statute that Federal 
funding should supplement and not supplant.
    Senator Lankford. Totally agree.
    Ms. McIntosh. And the rest of the rule is how we are 
proposing to implement that, and it is subject to Federal 
comment--public comment rather now for a good long time, 
another month or six weeks.
    Senator Heitkamp. Just to get clarification, so if a 
district does not follow one of the three options, will they be 
considered to be ineligible for Federal funds?
    Ms. McIntosh. I cannot answer that.
    Senator Heitkamp. Well, that would be a problem.
    Ms. McIntosh. First of all, it is a rule under public 
comment. It has gone through extensive legal review here at 
OMB. The Congressional Research Service (CRS) has taken a look. 
But I could not answer that question. I would be happy to let 
the experts get back to you.
    Senator Heitkamp. But, I could see doing something where 
you say, well, you might consider this, you might consider 
that; here are some things that we would consider appropriate. 
But foreclosing all other options when we say we are giving 
local option, those are the kinds of things that rise to the 
attention of Committees like this one and create, kind of, 
mischief. And so, I hope you take back the concerns that we 
have.
    Ms. McIntosh. Well, thank you for the feedback.
    Senator Lankford. Yes. No, please do.
    And while we are talking about non-controversial topics---- 
[Laughter.]
    Let's talk a little bit about the reinterpretation in Title 
9, what is affectionately called the ``bathroom/locker room/
dorm room'' policy as it came out, dealing with gender identity 
on the basis of sex.
    I think it would be safe to say that many school officials 
did not find the interpretation to be inherent in Title 9, just 
based on their response. So many districts around the country, 
thankfully, were incredibly engaged in trying to find ways 
locally to be able to help transgender students not be 
isolated, not be bullied, and they were already very engaged in 
local districts, thankfully finding ways to be able to have a 
safe environment for every single child in the school--
terrific.
    Then a new interpretation came out on Title 9, which 
obviously a court has now stayed and has said no. Again, it is 
the thinking process of what went into this that is helpful to 
us to be able to determine how that guidance came out and that 
process was done.
    Congress has passed legislation defining both ``sex'' and 
``gender.'' It is two different sets of issues; for instance, 
the Violence Against Women Act, where we have dealt with that 
specifically. Clearly that was not in the previous statute and 
was not clarified that way, and so I am trying to figure out 
the jump.
    How did it move from the assumption in the statement that 
gender was always implied, when Congress has separated that out 
in previous statutes and when districts all over the country 
did not deal with that in the past and they already found other 
ways? So help me understand the process of that decisionmaking 
to suddenly include ``gender'' where it said ``sex.''
    Ms. McIntosh. So, thank you for your concern about the 
protection of the rights of transgender students and for 
pointing out how many States and school districts are actively 
engaged in trying to make sure that these students are not 
bullied and have a safe and protective environment. In fact, 
when we issued that ``Dear Colleague'' letter, we also put out 
a guidance document that highlighted some of the excellent 
practices of many of those States and school districts.
    Sadly, that is not universally true, however. And through 
OCR's enforcement process, where they have gotten complaints 
about transgender discrimination as long ago as at least 2010, 
OCR has, in their enforcement work, interpreted discrimination 
on the basis of sex to include gender identity. And I think, as 
you know, our ``Dear Colleague'' letter, that explains this, to 
a general audience, cites a number of case law and legal 
precedent that is consistent with that interpretation.
    It is true, as you point out, that a Texas court has 
recently stayed our work on that interpretation. And we 
respectfully disagree with that decision but of course are 
complying with that judge's order while we investigate our 
legal options. I do not think the last legal chapter has been 
written here.
    Senator Lankford. No, but it is an interesting challenge 
just to be able to look at five courts ruled the other 
direction; one court ruled that way. Education grabbed the one 
court that ruled their way, ignoring the five others. And then 
a statute that did not refer to gender, all the way from the 
1970s, when clearly Congress has passed statutes before that 
dealt with both--I understand the dynamics and the challenges 
of it. I talk to school districts, as you do as well, and there 
is a very real challenge to be able to make sure that student 
is protected.
    The challenge is, it was not just a statement of: Make sure 
that your school has a policy. It was a Federal imposition of: 
We have Title 9 authority. We will remove funding from you if 
you do not follow this, though it is guidance, though everyone 
understands it the same. And what I hear from every district 
and from every university president is: We treat ``Dear 
Colleague'' as regulation because we feel like we better. And 
that is a different dynamic.
    Now, I do want to do something here back and forth on it. I 
know, Ms. Smith--I understand you asked a month ago to be able 
to go, and this has been a longstanding planning time to be 
able to get to this spot. And so I do want to respect your time 
on this. I know you have to slip away. We have quite a few 
questions that we still have dealing with things like the 
overtime rule, which has been incredibly significant, the 
fiduciary rule, a lot of the challenges that we are currently 
facing. So I would like to be able to submit those to the 
record for you.
    But I will tell you just quickly, on the overtime rule, 
this has a tremendous effect for nonprofits and for 
universities, and every nonprofit and university and small 
business that I talk to is struggling under this tremendously, 
especially nonprofits, where the nonprofits--often the people 
who work there understand they are not there to get rich and 
they understand the nonprofit does not have very much money, 
but you put the nonprofits in a very difficult situation.
    The nonprofits advertise to their donors that: We are very 
efficient in the use of dollars because we have very low 
overhead, because the people that work there work for very 
little money and love to do it. Now you are literally making it 
tougher for them to fundraise because they are going to show a 
higher amount of overhead cost, which some donors do not want 
to give to something with a higher overhead cost. They want to 
make sure it gets directly to the place it needs to go. So it 
makes it tougher for them in fundraising and makes it tougher 
for the entities.
    Secretary Perez and I had this conversation last year. I 
brought him letters that the YWCA sent to my office saying: We 
have X amount of dollars. When the overtime rule is 
implemented, if it is, we will close domestic violence shelters 
because we do not have enough money to run all of them and meet 
the standard. We will meet the standard, but it will force the 
closure of domestic violence shelters.
    I hear the same thing from church employees, that rarely a 
church employee makes that amount, in the Central Time Zone, 
and that they are struggling on: What do I do? I love to give 
my time. I am involved in this work because of my love for it.
    And even dealing with how it is implemented. As you go 
through the rule--which I am sure you have taken a good, hard 
look and gone through the overtime rule--it is incredibly 
difficult just to be able to determine, and with 25 weeks for 
small businesses to be able to implement it, when you walk 
through all of the exceptions--which I took some time to be 
able to walk through all 
the exceptions that are within it, things as simple as 
commissioned sales employees, farm workers, motion picture 
theater employees--which I thought was interesting--motor 
carrier drivers, amusement park employees--all these brought 
exemptions, the allowance to be able to do, are you a 51 
percent supervisor or are you a 49 percent supervisor?
    One of my favorites, as I look through it, a generally not-
exempt are registered nurses, but generally exempt are licensed 
practical nurses, but--no, they are not exempt but nurses are 
exempt, registered nurses. And everybody is trying to figure 
this out in a 25-week time period of who is in, who is out?
    Is there any chance that small business, that nonprofits, 
that universities and others can get more time on this or to be 
able to have some consideration within that lane? And this is a 
very big issue for a tremendous number of companies, as is the 
fiduciary rule, as is things like the rules dealing with 
franchises. There are so many issues that are coming at so many 
small businesses right now. They are having a very difficult 
time maintaining this.
    Ms. Smith. So that is a very large question in a very short 
period of time.
    Senator Lankford. Yes, ma'am. I know you are running out of 
time too.
    Ms. Smith. But one thing I would like to talk about for the 
not-for-profits, one of the things that the Labor Department 
has been doing in recognition of that is that we have been--
since the final rule has come out, and even before then, we 
have been working directly with funders of not-for-profits.
    We have sat down; we have had many meetings with 
foundations and other funders to talk to them about why they 
should increase their funding for not-for-profits so that there 
would be an opportunity, and why, even though their 
administrative costs are going up, it is not because they are 
being frivolous in any way. We have gotten some good responses 
from foundations.
    Senator Lankford. How many non-for-profits are there out 
there in America?
    Ms. Smith. Senator, I could not tell you. I mean, I think 
if I read the rule I might know. I mean, if I read in the----
    Senator Lankford. How many have you met with at this point, 
because there are hundreds of thousands.
    Ms. Smith. Do you mean how many not-for-profits we have met 
with?
    Senator Lankford. Yes. No, no, no--yes, how many have you 
met with, because there are hundreds of thousands of them.
    Ms. Smith. Before the rule came out we had a number of 
listening sessions specifically with not-for-profits. Then, 
since the rule has come out, not only did we put out guidance 
for not-for-profits, specific guidance, but we also had a 
number of webinars specifically for not-for-profits to talk to 
them about how they could implement the rule.
    I mean, there is not just one way to implement the overtime 
rule, and we have been giving a lot of technical assistance 
both specifically to universities, as you mentioned, and higher 
education, for not-for-profits, and for small businesses.
    Senator Lankford. So, basically you are giving donors to 
non-for-profits 25 weeks to donate more so that they can stay 
open, because I am telling you, some of these domestic violence 
shelters are closing because they do not have the money to be 
able to run them. And this is a big issue to a lot of non-
profits in this very short window. They do not just magically 
have more money in October, December.
    Senator Heitkamp. If I can add to this, because I think the 
nonprofits that are struggling the most with this are 
nonprofits who may have 24-hour call centers. They may, in 
fact--you could sit there and say, well, there is an easy way 
to comply with this rule: Make sure no one works over 40 hours 
a week, right?
    Senator Lankford. Or donate more money.
    Senator Heitkamp. Well, yes, I get that, but my point is 
that very many of these nonprofits that are hit the hardest are 
nonprofits that rely on call centers, rely on the ability to 
call workers in at two in the morning to deal with a domestic 
violence situation, deal with placement of a child.
    And I think you need to understand that where the simple 
answer sometimes in the overtime rule is that you can, in fact, 
comply by maintaining, and I am sympathetic to your rule. I 
mean, I think that when you work someone, what is it, $23,000 a 
year right now----
    Ms. Smith. That is correct.
    Senator Heitkamp [continuing]. Somebody can be classified 
as a manager and then you can work them 60 hours----
    Ms. Smith. Or 80 hours.
    Senator Heitkamp [continuing]. Or 80 hours. And, to me the 
problem is that you are not only not paying them enough for the 
40 hours, you are also taking away the advantage that they may 
have of getting a second job to support their family.
    So I may see this a little differently than Senator 
Lankford, but I will say I think that the overtime as it 
relates to on-call is very problematic.
    Ms. Smith. So, thank you, Senator. I do not think I am 
going to have, really, time to answer all these questions, but 
I would be happy, if you wanted to submit some QFRs for the 
record----
    Senator Heitkamp. Yes, we will.
    Senator Lankford. We will definitely do that.
    Ms. Smith [continuing]. We would be happy to answer those.
    Senator Lankford. Is it possible for us to be able to get 
responses back--and we will be very specific--within 30 days? 
Is that a reasonable time period?
    Ms. Smith. We will do our level best.
    Senator Lankford. Give me a percentage of what ``level 
best'' looks like--80 percent chance I get those?
    Ms. Smith. I guess it depends upon the number of questions. 
[Laughter.]
    Senator Lankford. So we will be very specific in our 
questions as we walk through it.
    I would tell you, December 1 is screaming at a lot of 
people in my State as it is coming.
    Ms. Smith. I understand that. You may or may not know, 
Senator, that there were two lawsuits filed in the last two 
days in an attempt to enjoin the overtime rule, so it is very 
possible that, no matter what the Department of Labor would 
prefer to happen as to the date, that it may be pushed back.
    Senator Lankford. Well, there are a tremendous number of 
people that are begging for that because it is incredibly 
difficult to both understand and implement in a lot of 
businesses because of the number of exceptions. And if you are 
a nonprofit, especially, or a university--I have spoken with 
university presidents again. They tell me tuition is going up 
in the spring specifically because of this rule.
    Ms. Smith. Just one last comment, Senator, which is that 
the exemptions that you were talking about, those are statutory 
exemptions to overtime. They are not affected one way or 
another by our overtime rule, which only deals with the white 
collar exemptions.
    Senator Lankford. Right.
    Ms. Smith. So, I understand that those exemptions are 
confusing. That is because the Fair Labor Standards Act has 
been amended from time to time and Congress puts in an 
exemption for this one and an exemption for that one, but those 
are longstanding exemptions. They are not new to this overtime 
law.
    Senator Lankford. But every small business employer is 
right now hiring a consultant to be able to come help explain 
this to them because they know what they have and they do not 
know what is coming. And so they have added expense already of 
that consultant, and then trying to figure out what to do on 
the costs on it, or who they are going to lay off or who they 
are going to keep, or who they are going to switch to hourly, 
as multiple businesses I have talked to have already shifted 
salary to hourly to try to make the shift.
    I know you have to get gone. I am trying to honor my 
commitment to everybody else that we would be done by five 
and----
    Ms. McIntosh. And, Senator, I am sorry, but I also 
communicated a prior commitment, that I would need to leave 
soon as well, although of course I would be happy to take your 
comments, your questions.
    Senator Lankford. Can you stay until 5 o'clock?
    Ms. McIntosh. I really need to be somewhere else at 5. It 
is getting very close to that. Can I take a few more questions? 
And then we would certainly be very happy to answer any others 
that you would like to submit to us for the record.
    Senator Lankford. OK. If we can get a few more questions to 
you, that would be helpful.
    Ms. McIntosh. OK.
    Senator Cardin. Mr. Chairman?
    Senator Lankford. Yes, sir.
    Senator Cardin. I have other questions. I will just ask 
them for the record.
    Senator Lankford. OK, thank you.
    Senator Cardin. Sure. And thanks for letting me join you.
    Senator Lankford. You bet. I am glad you joined us.
    Senator Heitkamp, do you have anything that you would like 
to start with?
    Senator Heitkamp. No, you go ahead. I do not want to take 
up more of Amy's time.
    Senator Lankford. Well, let me try to get through a couple 
of these here, because it is part of the challenge that we have 
as we go through some of the ``Dear Colleague'' letters, when 
they were determined--for instance, the one on the Title 9 
dealing with transgender, it was determined to be a significant 
guidance. My understanding was, based on the previous hearing, 
that it raised a novel set of questions from the stakeholders.
    What kind of processes go back and forth with OIRA when it 
ends up being a significant guidance based on novel questions? 
And why is that a guidance rather than a regulation?
    Ms. McIntosh. Well, it is a guidance document because it is 
interpreting and saying in plain language how OCR is enforcing 
the law and related regulations to Title 9. We do not believe 
the DCL added any new requirements.
    Senator Lankford. But it started with: It is a novel piece.
    Ms. McIntosh. But we deemed it--we have a centralized 
process at the Department to review guidance for--based on the 
bulletin, for what are the characteristics of significant 
guidance, and we judged that one to be significant. And as we 
do with all significant guidance documents, we offered it to 
OIRA for review. And I believe OIRA accepted it in that case 
because it touched on issues that were involved with other 
agencies as well as--clearly we were getting a great deal of 
questions and urgency from our regulated parties.
    Senator Lankford. But it was the perception of the 
Department of Education this was nothing new, this was always 
in the statute; it had just never been enforced? Or it had been 
enforced; it just needed clarification?
    Ms. McIntosh. So, I think I mentioned earlier the 
interpretation of Title 9, where discrimination based on sex 
includes gender identity, is actually a longstanding 
interpretation of the Department, backed by case law. As you--
--
    Senator Lankford. When you say ``longstanding''--somebody 
help me understand ``longstanding.''
    Ms. McIntosh. At least 2010, arguably earlier than that. 
But the specific issues around transgender students and 
bathrooms in schools did increase--we got an increasing number 
of complaints and questions over the last few years. And the 
Office of Civil Rights was engaged in investigating and 
reaching agreements with States and districts.
    Because those complaints seemed to be accelerating as, in 
general, the world has been paying much more attention to gay 
and lesbian and transgender rights in the recent years, we felt 
that it was important that we tell a broader audience than just 
the audience that OCR was getting to one complaint at a time 
how we were interpreting Title 9.
    Senator Lankford. So you determined at that point, early 
on, this is not a regulation, this is a guidance, because 
internally this was always the understanding in the Department 
of Labor at least since 2010.
    Ms. McIntosh. So, the Department of Education. And not 
internally. It was the interpretation that the Office of Civil 
Rights was using in their active, ongoing, external work 
investigating civil rights complaints around this issue. It was 
not widely known because it was investigation-specific.
    And we do not think that school districts and States, who 
are not lawyers and not, deeply immersed in this law, should 
have to read the resolution agreements we come up with, with an 
individual investigation, and figure out how that applies to 
them.
    So we simply explained in this guidance document how OCR 
has been doing interpreting. And, as I mentioned, we also 
published examples of States and school districts who were 
coming up with very excellent solutions to stay in compliance 
with the law.
    Senator Lankford. And by the way, I completely agree with 
that. That is entirely reasonable to say: It is an expectation 
that every student is able to be at school in a safe 
environment for that student, free of bullying and the threats 
of all those things, and here are good examples of some schools 
that have done it.
    That is entirely reasonable. You took the next step and 
said: And here is how you are going to do it now. And it 
changed dramatically and redefined a statute from the 1970s in 
a new way.
    Ms. McIntosh. I would respectfully point out the ``Dear 
Colleague'' letter is not binding. It does not have the force 
of law. And it does not specify a single way that States and 
school districts can stay in compliance with the law.
    Senator Lankford. I would say there are a lot of districts 
that disagree with that, and we can agree to disagree.
    Let me ask a question here. As well as language--and we are 
back to the same issue here in just helping me understand this. 
This comes from that ``Dear Colleague'' letter: ``A school may 
not, however, adopt or adhere to requirements that rely on 
overly broad generalizations or stereotypes about the 
differences between transgender students and other students of 
the same sex.'' Help me understand the term ``overly broad 
generalizations.''
    Ms. McIntosh. I would not be able to comment on that 
specific phrase. I could certainly ask the Office of Civil 
Rights to elaborate on that.
    Senator Lankford. I will try to follow up on it because, 
again, we are back to everyone else has to read it and to be 
able to understand what it means. And clearly a guidance 
document is there to be able to provide clarity. A term like 
``overly broad generalizations'' really needs some clarity 
itself, trying to figure out what that means because, again, 
every school district lives in fear of the Department of 
Education walking in and saying: You have a Title 9 violation 
and your funding is at risk.
    Ms. McIntosh. So I will take that input about that phrase 
back to our office.
    Senator Lankford. Tell me as well about--when we are trying 
to deal with a new piece that has come out from the Department 
of Education and the Office of Civil Rights--there was a 
document that was put out saying that there is a process that 
we are going through right now to be able to identify religious 
discrimination or bullying based on religions, and specifically 
highlighted minority religions in the United States, to make 
sure that we do not have individuals that are discriminated 
against, and trying to form some sort of process to be able to 
collect complaints.
    So I am trying to figure out where this is going and how 
the process will go to collecting. Again, I am in the same 
position. I do not want any kid of any faith, of any 
background, of any--whoever it may be, to have an unsafe 
environment. So I am trying to figure out this. How will you 
collect the data based on religious discrimination in a school, 
or statements about religious discrimination?
    Ms. McIntosh. So, I apologize, Senator. I am not familiar 
with the document or the process that you are referring to, but 
I can certainly get more information for you.
    Senator Lankford. I will try to send a list of questions 
into you as well. Same question as well. Can I get those within 
30 days responded to?
    Ms. McIntosh. I will ask my colleagues. We will do our very 
best.
    Senator Lankford. I am back to ``our dead level best,'' 
yes.
    The question really, then, boils down to several things we 
need to deal with religious liberty on a school campus. Again, 
that has been longstanding policy that individuals can both 
have a faith and live their faith, especially for a student on 
a campus. It has been well-protected and restated multiple 
times by both courts and by Presidents, affirming over and over 
again, of both parties.
    I would just be interested to be able to know some of the 
process of what is out there. And there are some very specific 
situations that become more challenging of who this is 
collected on, the process of how it is collected, and where we 
go from here.
    Ms. McIntosh. And we will get back to you on all your 
questions.
    Senator Lankford. Thank you.
    Ms. McIntosh. I apologize for having to slip out. Thank you 
very much for having me here.
    Senator Lankford. All right, thank you. And we will follow 
up with additional questions.
    Mr. Shelanski, you are the last man standing. It is redhead 
on redhead now. [Laughter.]
    Mr. Shelanski. All right.
    Senator Lankford. So my question for you is, again, back to 
where we started. This is difficult in our conversation. It is 
much more difficult in conversations outside of this building: 
What is a regulation? What is a guidance? Which one do I 
follow? Which one do I not follow?
    I had a university president as recently as this week say 
to me: When a ``Dear Colleague'' letter comes out, I follow 
it--and his exact words were--as if it is regulation, because I 
understand the price that I may pay in trying to explain to my 
board in case I do not and in case the Department of Education 
steps in and says, I am going to take away your funding.
    This is not a level playing field where an individual can 
just, as it has been argued: Well, it is not legally binding. 
We are just giving you guidance. Everyone there understands 
full well the consequences of not following it. And if they do 
not, it is not just a court hearing; it is the possibility of 
losing funding and being published as a school that has a Title 
9 violation, or, in multiple cases with the Department of 
Labor, having a public setting that this place is under 
investigation, or now even with contracting, because some of 
the new conversation is that if you are going to get a Federal 
contract, you are going to have to say how many investigations 
they you have been through, and that is going to count in your 
scoring.
    So if Department of Labor shows up at my place three times 
a year and shows up at someone else's place once every three 
years, you are at a much greater risk for not getting a Federal 
contract because you are going to show active investigations 
and they are not, though they may be exactly equal as two 
entities.
    These have very serious consequences both to businesses, 
individuals, taxpayers--lots of litigation both for the Federal 
Government and us. How do we provide clarity to this? And who 
is the gatekeeper to make sure that there is a difference 
between guidance and regulation and people know the difference 
within the agencies? Who has that?
    Mr. Shelanski. So, I think in the first instance it is up 
to the agencies because the vast majority of guidances that 
they are issuing are pretty clearly explanatory and 
interpretive. I do think that in cases where agencies overstep, 
I think there are a couple of different paths that can be 
adopted.
    The one thing I would note is that, in a guidance document, 
what we look for first is whether or not the guidance is adding 
anything by way of obligation or requirement to the underlying 
law or regulation. And sometimes when the guidance is repeating 
that which is already established in the underlying law and 
regulation, one would expect that the recipients of the 
guidance document would treat at least that part of it as 
regulation, as binding, because it is a repetition of that 
which went through that proper process.
    After that, what we try to do--and I think what the good 
guidances practices do, what the back-and-forth outreach that 
agencies do in accordance the Good Guidance Practices and the 
kinds of things the GAO has recommended--is to try to give 
really helpful advice about alternative ways to meet those 
preexisting obligations.
    And so, I think it is primarily on the agencies to follow 
those practices and to make sure that what they are giving to 
stakeholders is something that does not go beyond that which 
was previously established and which is helpful.
    Senator Lankford. And if there is the perception they have 
gone, it is the courts? Who do they respond back to----
    Mr. Shelanski. So I think there are a couple----
    Senator Lankford [continuing]. As individuals that are 
affected?
    Mr. Shelanski. I think there are three different routes 
that one sees happening.
    I think the most direct route is to go back to the agency, 
because typically when an agency puts a significant guidance 
out, it does provide contact and invite response. That is, 
indeed, a best practice that is in the 2007 document. It was 
identified by GAO. And, in fact, we have seen the two agencies 
that were sitting here this afternoon increase their specific 
request for that kind of feedback so that they can tune their 
guidances in response to that. So number one would be the 
agencies.
    Another option is to come to us at OIRA and to say, we 
think either that this guidance is not a guidance and should be 
regulation, or it is a guidance but it is turning out to be 
economically significant; it should have gone through the 
notice and comment. And as stewards of the 2007 Good Guidance 
Practices, we would be in a position to call the agencies in, 
again, to discuss what options there might be to remedy the 
problem that was brought by stakeholders. So we are another 
place that stakeholders can come.
    And then the final place, which we have seen in a couple of 
recent examples quite clearly, are the courts.
    Senator Lankford. What is the best timing in the process 
for people to be able to come to you as the gatekeeper?
    Mr. Shelanski. As early as possible. And so an example 
would be the following: Patricia Smith identified some requests 
for information that were issued to the public and a comment 
period that was issued to the public when they put the public 
on notice they were considering some guidance changes.
    I think concern at that point about, A, whether the 
document is really guidance or really should be APA rulemaking, 
and, 
B, whether even if a guidance--it might be economically 
significant--would be things we would be interested in learning 
quite early from those stakeholders, because when we can engage 
before a guidance is developed and issued, we are better able 
to work with the agencies and to put in place a good process.
    Senator Lankford. I would also say to you--and something we 
have discussed before--when the American people have the 
opportunity to be able to do the same, that helps. That is one 
of the reasons this Committee has promoted advanced notice of 
proposed rulemaking, to get more people involved in the process 
earlier so that when significant things like that come out, we 
do have the opportunity to be able to get maximum amount of 
input from the affected individuals.
    That is a positive input. As you and I have discussed 
before, we are still a nation of the people, by the people, for 
the people. And when people find out about it last rather than 
get the opportunity to be able to contribute first, it makes a 
big difference to people in their frustration level. They do 
not have money to go hire lawyers and to go chase down and do 
lawsuits. They just want their own government to be responsive. 
And they expect someone is watching that, and that is very 
helpful to them.
    One of the things that would be extremely helpful for us to 
know is that OIRA is active, that when a guidance comes out and 
immediately people across the country raise the issue and say, 
this is more expensive than $100 million, it has the effect 
that OIRA will lean in quickly and second-guess that agency and 
at least ask them: Did you do cost-benefit? Where did this 
stand? Why didn't we get this, and to be able to hold the 
agencies to account, because that seems to have come up several 
times of late where guidance is coming out and everyone says, 
no one seemed to have done cost-benefit on this, or if they 
did, they did not see it was $100 million and we are trying to 
figure out why because this will have a dramatic effect on our 
business. We will have to close, we will have to merge, 
whatever this may be. That would be helpful for us to know that 
OIRA is leaning in on that aspect.
    Mr. Shelanski. Thank you. This is certainly something for 
me to take back. We can always try to do better that which we 
already do. And I think it is an important issue for me to take 
back and discuss with our team about what more we can do to 
make that assurance more salient for Congress and for the 
American people.
    Senator Heitkamp. Yes, I do not know what the rest of our 
Committee schedule is in this Congress, but I want to express, 
as long as we are still here, our great appreciation for your 
cooperation, our interest in continuing this relationship in 
the next Congress, depending upon who is sitting in either 
chair here.
    But I think you can tell from the way we work, we are very 
serious about trying to do things that give the American public 
confidence that the government actually has a level of 
transparency and openness to listen to varying opinions, but 
also not so hamstringing these agencies that we do not get 
regulations out, which is one thing that I talk about quite a 
bit, that the failure to regulate can also create huge 
problems.
    But I want to thank you, Howard. You have just been a great 
guy to work with. And if we do not get a chance to publicly 
thank you for your service to our country as this transition 
moves forward and ask you to remain engaged in an intellectual 
and academic way with this Committee as we move forward. Your 
advice is always welcome, I think by both the Chairman and by 
this Ranking Member, and we look forward to working with you 
even if you are not in the capacity as head of OIRA.
    Mr. Shelanski. Thank you very much, Senator. I also look 
forward to that.
    Senator Lankford. Yes, I would second that as well.
    And do you have additional comments?
    Senator Heitkamp. No, I am good.
    Senator Lankford. I would say--and not looking for you to 
move any place, but I am grateful to be able to have the 
ongoing conversation. We do want this just to work. There are a 
lot of jobs, there are a lot of businesses that are on the 
line, and these decisions that are made based on preferences 
here have real effect out there.
    Senator Heitkamp. I----
    Senator Lankford. Now, you said that was your last 
statement.
    Senator Heitkamp. Oh, I am sorry, but I forgot----
    Senator Lankford. This is it. [Laughter.]
    Senator Heitkamp. On the OSHA, just some commitment--you 
said you would take that back--maybe have a discussion with 
OSHA on the anhydrous guidance and see if there is a way that 
we can at least delay that, because I do not know what we are 
going to be able to negotiate in the CR. There is a whole lot 
of discussion about something being purer than what it has been 
in the past. But leaving this in limbo will create great 
stress----
    Senator Lankford. I agree.
    Senator Heitkamp [continuing]. On businesses. And I do not 
think, given what we know right now, a delay to the end of the 
year is asking too much so that we can get additional dialogue.
    Mr. Shelanski. Thank you, Senator.
    Senator Lankford. Yes, I would agree with that completely.
    I would tell you, this Committee has had a particular sense 
of benefit over the past several years, now the past couple 
years, by connecting with former heads of OIRA, and they have 
been extremely helpful to us in multiple times and multiple 
conversations because they are able to say the things as former 
head they could not say as head. [Laughter.]
    And so, not looking for you to leave your job, but I do 
hope we maintain this relationship, because you have in your 
head and from your experience a lot of things that would help 
the American people for a long time. And so we hope to be able 
to maintain that relationship for the sake of the American 
people and for the future of how we actually operate on all 
these issues.
    Mr. Shelanski. Thank you, Senator.
    Senator Heitkamp. And what you say will matter to us.
    Senator Lankford. Yes, it will. Thank you.
    Let me do a quick closing statement that I am sure will be 
moving and stirring to all that hear it.
    I do want to announce, on September the 29 we will hold a 
hearing connected with Millennials--strategies for the Federal 
Government to attract and utilize younger workers.
    That concludes today's hearing. I would like to thank our 
witnesses for their testimony. The hearing record will remain 
open for 15 days until the close of business on October 7 for 
the submission of statements, questions for the record.
    Do you have a statement?
    OK, the hearing is adjourned. Thank you.
    [Whereupon, at 5:01 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




                                 [all]