[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]



     
     
     
     
     THE BENEFITS OF A DEREGULATORY AGENDA: EXAMPLES FROM PIONEERING 
                              GOVERNMENTS

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

                             JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                       INTERGOVERNMENTAL AFFAIRS

                                AND THE

                      SUBCOMMITTEE ON HEALTHCARE,
                   BENEFITS, AND ADMINISTRATIVE RULES

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 27, 2018

                               __________

                           Serial No. 115-108

                               __________

Printed for the use of the Committee on Oversight and Government Reform




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]







        Available via the World Wide Web: http://www.govinfo.gov
                       http://oversight.house.gov 
                                   ______
		 
                     U.S. GOVERNMENT PUBLISHING OFFICE 
		 
32-690 PDF                WASHINGTON : 2018                 
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
                       
              Committee on Oversight and Government Reform

                  Trey Gowdy, South Carolina, Chairman
John J. Duncan, Jr., Tennessee       Elijah E. Cummings, Maryland, 
Darrell E. Issa, California              Ranking Minority Member
Jim Jordan, Ohio                     Carolyn B. Maloney, New York
Mark Sanford, South Carolina         Eleanor Holmes Norton, District of 
Justin Amash, Michigan                   Columbia
Paul A. Gosar, Arizona               Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee          Stephen F. Lynch, Massachusetts
Virginia Foxx, North Carolina        Jim Cooper, Tennessee
Thomas Massie, Kentucky              Gerald E. Connolly, Virginia
Mark Meadows, North Carolina         Robin L. Kelly, Illinois
Ron DeSantis, Florida                Brenda L. Lawrence, Michigan
Dennis A. Ross, Florida              Bonnie Watson Coleman, New Jersey
Mark Walker, North Carolina          Raja Krishnamoorthi, Illinois
Rod Blum, Iowa                       Jamie Raskin, Maryland
Jody B. Hice, Georgia                Jimmy Gomez, Maryland
Steve Russell, Oklahoma              Peter Welch, Vermont
Glenn Grothman, Wisconsin            Matt Cartwright, Pennsylvania
Will Hurd, Texas                     Mark DeSaulnier, California
Gary J. Palmer, Alabama              Stacey E. Plaskett, Virgin Islands
James Comer, Kentucky                John P. Sarbanes, Maryland
Paul Mitchell, Michigan
Greg Gianforte, Montana
Michael Cloud, Texas
Vacancy

                     Sheria Clarke, Staff Director
                    William McKenna, General Counsel
                        James Lesinski, Counsel
                Brick Christensen, Senior Policy Advisor
      Sarah Vance, Healthcare, Benefits, and Administrative Rules 
                      Subcommittee Staff Director
                    Sharon Casey, Deputy Chief Clerk
                 David Rapallo, Minority Staff Director
               Subcommittee on Intergovernmental Affairs

                     Gary Palmer, Alabama, Chairman
Glenn Grothman, Wisconsin, Vice      Jamie Raskin, Maryland, Ranking 
    Chair                                Minority Member
John J. Duncan, Jr., Tennessee       Mark DeSaulnier, California
Virginia Foxx, North Carolina        Matt Cartwright, Pennsylvania
Thomas Massie, Kentucky              Wm. Lacy Clay, Missouri
Mark Walker, North Carolina          Vacancy
Mark Sanford, South Carolina
                                 ------                                

     Subcommittee on Healthcare, Benefits, and Administrative Rules

                       Jim Jordan, Ohio, Chairman
Mark Walker, North Carolina, Vice    Raja Krishnamoorthi, Illinois, 
    Chair                                Ranking Minority Member
Darrell E. Issa, California          Jim Cooper, Tennessee
Mark Sanford, South Carolina         Eleanor Holmes Norton, District of 
Scott DesJarlais, Tennessee              Columbia
Mark Meadows, North Carolina         Robin L. Kelly, Illinois
Glenn Grothman, Wisconsin            Bonnie Watson Coleman, New Jersey
Paul Mitchell, Michigan              Stacey E. Plaskett, Virgin Islands





































                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 27, 2018...............................     1

                               WITNESSES

Ms. Laura Jones, Executive Vice President and Chief Strategic 
  Officer, Canadian Federation of Independent Business
    Oral Statement...............................................     6
    Written Statement............................................     9
Mr. Matt Vickers, Product Sales Engineer, New Markets, Xero
    Oral Statement...............................................    49
    Written Statement............................................    51
Mr. Scott Brinkman, Secretary of the Executive Cabinet, 
  Commonwealth of Kentucky
    Oral Statement...............................................    56
    Written Statement............................................    58
Mr. Amit Narang, Regulatory Policy Advocate, Public Citizen
    Oral Statement...............................................    61
    Written Statement............................................    64

                                APPENDIX

January 13, 2015, Gallup ``American Entrepreneurship: Dead or 
  Alive? submitted by Mr. Palmer                                     98

 
    THE BENEFITS OF A DEREGULATORY AGENDA: EXAMPLES FROM PIONEERING 
                              GOVERNMENTS

                              ----------                              


                      Thursday, September 27, 2018

                  House of Representatives,
  Subcommittee on Intergovernmental Affairs, joint 
with the Subcommittee on Healthcare, Benefits, and 
                              Administrative Rules,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittees met, pursuant to call, at 2:14 p.m., in 
Room 2247, Rayburn House Office Building, Hon. Gary Palmer 
[chairman of the Subcommittee on Intergovernmental Affairs] 
presiding.
    Present from Subcommittee on Intergovernmental Affairs: 
Representatives Palmer, Grothman, Massie, Walker, Raskin, and 
DeSaulnier.
    Present from Subcommittee on Healthcare, Benefits, and 
Administrative Rules: Representatives Jordan, Walker, Grothman, 
and Krishnamoorthi.
    Mr. Palmer. The Subcommittee on Intergovernmental Affairs 
and the Subcommittee on Healthcare, Benefits, Administrative 
Rules will come to order. Without objection, the presiding 
member is authorized to declare a recess at any time.
    Over the past several decades, regulations imposed by the 
Federal Government have had an adverse impact on economic 
activity as these Federal regulations have accumulated over 
time. Regulatory accumulation is a drag on our economy, and it 
stifles innovation. According to a recent study by the Mercatus 
Center, the Federal regulations had held at the 1980 levels, 
our economy would be nearly 25 percent larger than it was as of 
2012.
    We have seen the results of this regulatory accumulation 
and the stunning decline of the number of new businesses. A 
Gallup organization report from back in 2015 showed that 
American business deaths outnumbered business births. I have a 
copy of that entitled, ``American Entrepreneurship: Dead or 
Alive?'' that I would like to enter into the public record and 
will do so without objection.
    Mr. Palmer. In my experience in Alabama, people don't want 
to start a business when the overwhelming uncertainty of the 
regulatory process threatens to come down on them. Why bother 
when the risks are compounded by a myriad of complex and 
sometimes contradictory regulations?
    Recognizing the potential benefits of a deregulatory 
agenda, President Trump called for a one-in, two-out ratio for 
new regulatory actions. The shift in regulatory policy is 
expected to save business owners and entrepreneurs both time 
and money. While the United States is still in the early stages 
of implementing regulatory reform, we know from some of our 
foreign friends and allies that the push for deregulation has 
resulted in tremendous outcomes.
    In British Columbia, the Canadian Government experimented 
with regulatory reform beginning 2001. To date, the British 
Columbia Government has repealed more than 40 percent of their 
regulatory requirements. As a result, British Columbia 
experienced a period of per-capital GDP growth and business 
development that outpaced the national average in Canada.
    Another success story took place in Australia where the 
national government initiated a standard business reporting or 
SBR system that made it easier for businesses to report one 
time rather than typical duplicative reporting mechanisms. 
Savings from the SBR from 2015 to 2016 were roughly $1.1 
billion in Australian dollars or $750-800 million U.S.
    However, we don't have to look so far for success stories. 
Our 50 States have shown what may work for the rest of the 
country. Kentucky Governor Matt Bevin instituted a red-tape 
reduction initiative. State officials are undertaking review of 
the entire pool of State regulations to identify those that are 
unnecessary, duplicative, and ineffective.
    In a short period of time, Kentucky has repealed 453 
regulations, which is nearly 10 percent of Kentucky's total 
pool of regulations. Kentucky officials report these efforts 
have led to the creation of roughly 40,000 jobs and $9.2 
billion in direct investment in the State.
    We are fortunate to have with us at today's hearing 
witnesses who can speak to each of these examples. I am eager 
to learn from them, what worked, what didn't, and what could be 
done differently.
    I would like to make clear that this hearing is not about 
slashing regulations, as some may suggest. Our focus today is 
on streamlining reporting to make compliance burdens easier. 
Our focus is on helping small businesses survive and thrive in 
the 21st century. We are talking about eliminating obsolete, 
duplicative, and contradictory regulations that don't make 
sense.
    I will close with something President Obama said about 
regulations back in 2011 in the Wall Street Journal. He wrote 
that, ``Sometimes those rules have gotten out of balance, 
placing unreasonable burdens on business, burdens that have 
stifled innovation and have had a chilling effect on growth and 
jobs.'' I bring this up because to me this is something that we 
should all agree is important to our nation.
    For a nation as economically powerful as ours to lag behind 
our friends and allies when it comes to innovation and new 
business creation is not only unfortunate, it is a missed 
opportunity. I ask my Democratic friends to join us in making 
this a priority.
    I thank the witnesses again and look forward to hearing 
from each of you about regulatory reform success stories. I 
will also ask to have this Gallup report included in the 
record, as I mentioned earlier. And without objection, so 
ordered.
    Mr. Palmer. I now recognize the ranking member of the 
Healthcare, Benefits, Administrative Rules Subcommittee, Mr. 
Krishnamoorthi, for his opening statement.
    Mr. Krishnamoorthi. Thank you, Mr. Chairman, for holding 
today's hearing, and thank you to all the witnesses for coming. 
And thank you for the audience for participating.
    I agree with all my colleagues that we need smart 
regulations, and we need to make sure that we keep the 
interests of taxpayers first. On the other hand, I am 
incredibly concerned about recent actions by the Trump 
administration, which I believe are shortsighted and will harm 
millions of Americans and increase costs to the Federal 
Government.
    In his second week in office, President Trump issued an 
executive order mandating that two regulations be eliminated 
for every new regulation proposed. This so-called two-for-one 
policy ignores numerous and well-documented economic benefits 
derived from many of the regulations that are proposed to be 
eliminated.
    President Trump's attempts to rollback student loan 
protections, offshore drilling protections, environmentally 
sound fuel-efficiency standards, and consumer financial 
protections should alarm all people, Democrats and Republicans 
alike. If your workplace is OSHA-certified, if your food is 
approved by the FDA, or your local water supply certified as 
clean by the EPA, this executive order places your well-being 
potentially at risk.
    Just this week the House overwhelmingly passed an FAA 
reauthorization that contains several pro-consumer protections. 
It prohibits airlines from forcibly removing passengers, 
requires a minimum leg room for each seat, prohibits the use of 
cell phones in flight, and requires all airports to provide 
nursing rooms for mothers and babies. I don't think that we 
should be forcing unelected bureaucrats to repeal any of these 
requirements without adequate thought and investigation.
    The President's order imposes a needlessly arbitrary 
standard on public agencies that have a charge to serve the 
public. This particular rule ties the hands of public employees 
and prevents them from using the best-available evidence about 
which regulations should stay and which should be revised or 
repealed. The Office of Management and Budget annually issues a 
congressionally mandated report that identifies the cost of 
government rules on the private sector and the estimated 
financial benefits produced for the American people. Every 
Federal rule has a cost and a benefit, and this report is key 
to making sure that the benefits always outweigh the costs. We 
owe this to every taxpayer.
    Every year, this OMB-mandated report shows objectively that 
the economic benefits of Federal rules far outweigh the costs. 
Just last year, the totals were $4.9 billion in costs on 
businesses and $27.3 billion in benefits to the American 
public. This is a report that was commissioned by the Trump 
Office of Management and Budget.
    Let me be clear. The benefits always have to outweigh the 
rules. There is no question about it. We have to make 
regulations smart, and we owe this to the taxpayers. However, 
in a case like this where the Trump administration's own OMB 
issues a report showing that the benefits of these rules and 
regulations outweigh the costs by a measure of five to one, 
does it really make sense to have a two-for-one policy in terms 
of eliminating one for every two that are proposed?
    I thank our witnesses for sharing their testimony today, 
and I look forward to continuing this important discussion. 
Thank you.
    Mr. Palmer. I now recognize the chairman of the--excuse me. 
That is not predicative.
    Mr. Raskin. Let's not get ahead of ourselves.
    Mr. Krishnamoorthi. Let's not get ahead of ourselves.
    Mr. Palmer. Yes. Yes. I now recognize the ranking member of 
the Intergovernmental Affairs Subcommittee, Mr. Raskin, for his 
opening statement.
    Mr. Raskin. Chairman Palmer, thank you so much. So a couple 
months ago we convened a hearing to discuss the theory that 
government-issued regulations are failing the American people, 
and at that hearing I tried to defend our regulatory process 
from the notice and comment period through regulatory 
enforcement as simply a set of rules. And I reminded my 
colleagues that rules are ubiquitous. There are sets of rules 
we follow every day, and all of us have no doubt followed 
dozens of rules even just since waking up this morning.
    Our job in Congress here is to pass laws that reflect the 
values of the people and implement our priorities, and agencies 
help us do that by adopting rules to execute and enforce those 
laws.
    At that same hearing we took a tour of some of the most 
celebrated rules ever promulgated by agencies, for example, the 
seatbelt rule, the overtime rule, and so on. Like these, most 
Federal rules are commonsense protections of vital freedoms 
that we cherish, freedom from air pollution and water 
pollution, freedom from dangerous consumer appliances, freedom 
from workplace discrimination and predatory business practices 
and monopolies. Rules have made our people freer and our 
country safer, healthier, cleaner, and more secure. And my 
opinion has not changed on that.
    As we know, regulation is just a fancy name for a rule, and 
we all live according to them. Every household, every family, 
every sport, every school, every road and highway, every 
institution, every economy, every corporation, Congress and 
indeed this committee, we all have rules that we adhere to and 
live by.
    In one of his first official acts, President Trump issued 
an executive order directly targeting rules. His so-called two-
for-one policy arbitrarily called for the repeal of two 
existing rules for every new one promulgated with zero 
attention to the economic and social benefits that those rules 
might be continuing to our country. That's like saying every 
time we pass a law, we should have to repeal two laws. But I 
remember a moving passage from Judge Learned Hand who said 
``Thou shalt not ration justice.'' President Trump and my 
colleagues in the House have made destroying government rules 
one of their top priorities. They have made deregulation a 
political fetish. And they are indeed rationing justice.
    Behind all the deregulatory rhetoric, the majority is on a 
crusade to scrap rules that limit the power of big corporations 
or rein in Wall Street and the financial industry. They are 
targeting regulations under the Clean Water Act and the Clean 
Air Act, rules that restrict the freedom of polluters. I can't 
count the times we voted in the House on creating new rules 
that interfere with women's rights to make their own healthcare 
decisions and decisions about birth control and reproduction.
    We have stalled the Farm Bill over new regulations that 
they want to seek. They want to impose work requirement rules 
on SNAP recipients, and they are inventing new rules to stop 
legal immigrants who want to become citizens from accessing 
certain government programs. This kind of bureaucratic 
extremism proliferates more regulation and more red tape not in 
the pursuit of justice or freedom but control and power.
    Since our last hearing in July, the administration has only 
added to its hit list of targeted Obama-era rules. The 
administration sold out working-class families who strive to 
attain a college education by allowing Secretary DeVos to 
rescind the borrower defense rule. For-profit colleges will now 
be able to engage in predatory behavior again with relative 
impunity. Just last month, the White House announced the repeal 
of fuel-efficiency standards. This troubling rule reversal will 
allow almost a billion metric tons of carbon dioxide into the 
atmosphere in the next 20 years and increase consumer spending 
on gasoline by $20 billion by 2025.
    Rules generally make our country safer, healthier, and more 
just. Unfortunately, the administration is using rules to 
rollback progress, pollute our environment, and imperil our 
freedoms. The costs of an America without any rules are not 
hard to imagine and they are impossible to accept. We cannot 
risk American lives and our nation's environment because the 
President wants to reward big campaign donors and corporations 
while using the regulatory boogieman to try to destroy 
democratically chosen regulations. Let's think pragmatically 
and not ideologically. Let's remember that Federal regulations 
are just our rules, and when it comes to building a strong 
democracy, laissez isn't fair.
    I appreciate all of our witnesses for their time and 
testimony today, and I look forward to an important discussion 
about the continued utility of the rules we all rely on.
    I yield back, Mr. Chairman.
    Mr. Palmer. I thank the gentleman.
    The chair now recognizes the chairman of the Healthcare, 
Benefits, and Administrative Rules Subcommittee, Mr. Jordan, 
for his opening statement.
    Mr. Jordan. Thank you, Mr. Chairman. And I disagree with so 
much of what my good friend and colleague from Maryland just--
and I do mean good friend. We got a bill we are working on 
together that would--actually, he mentioned rationed justice. I 
do think we need to ration regulations, but we got a bill we 
are working on that focuses on the Constitution and the rights 
of those in the press not to have the government force them or 
compel them to give their confidential source away. So I 
appreciate the gentleman, the professor from Maryland, but I 
just disagree.
    I think you go ask almost any American, do you think 72,000 
rules that the EPA has on the oil and gas industry in our State 
is probably too many? It probably is. So that is all we are 
focusing on here is that idea that maybe we got a little too 
much government. Let's get back to commonsense regulation. Some 
of the things I think that the administration has done on the 
regulatory front have been helpful and have led to this amazing 
economic growth we have witnessed over the last 20 months, 4.2 
percent annualized growth rate right now, which is tremendous, 
and far better than where we were just a few years ago. So that 
is what is at stake here.
    And I appreciate the chairman having this hearing. And 
because I walked in 22 minutes late for committee, I am going 
to yield back the remainder of my time so we can get right to 
our good set of witnesses here. Thank you, Mr. Chairman.
    Mr. Palmer. I thank the gentleman.
    I am now pleased to introduce our witnesses: Ms. Laura 
Jones, executive vice president and chief strategic officer of 
the Canadian Federation of Independent Business. Thank you for 
being here; Mr. Matt Vickers, product sales engineer, New 
Markets at Xero. Thank you; Mr. Scott Brinkman, secretary of 
the executive cabinet for the Commonwealth of Kentucky, 
appreciate your presence; and Mr. Amit Narang, regulatory 
policy advocate at Public Citizen. Thank you, sir, for being 
here.
    Pursuant to committee rules, all witnesses will be sworn in 
before they testify. Please stand and raise your right hand.
    [Witnesses sworn.]
    Mr. Palmer. The witnesses may be seated. The record will 
reflect that all witnesses answered in the affirmative.
    In order to allow time for discussion, please limit your 
testimony to five minutes. Your entire written statement will 
be made part of the record.
    As a reminder, the clerk in front of you shows--the clock 
in front of you--and we can get a clerk if we need to. As a 
reminder, the clock in front of you shows the remaining time 
during your opening statement. The light will turn yellow when 
you have 30 seconds left--and unlike a traffic light, that does 
mean speed up--and red when your time is up. So please remember 
to press the button in front of your microphone before 
speaking.
    I am pleased now to recognize Ms. Jones for her testimony.

                       WITNESS STATEMENTS

                    STATEMENT OF LAURA JONES

    Ms. Jones. Chairman Jordan, Chairman Palmer, Ranking 
Members Raskin and Krishnamoorthi, I want to thank you for 
inviting me to testify. I bring very warm wishes from north of 
the border.
    And by way of background, my interest in regulatory reform 
comes from my roots as an economic researcher and also from my 
current position at the Canadian Federal of Independent 
Business, representing and advocating for small-business owners 
who, like their American counterparts, are deeply affected by 
regulation.
    I'm here today to talk about the British Columbia model of 
regulatory reform, and I think the overarching lesson from this 
model is that a substantial reduction in government rules is 
possible without negatively affecting the human health, safety, 
and environmental outcomes that we all care about. And I think 
this is important because it speaks directly to the challenge 
that modern governments in developed countries face, which is 
how do you best control red tape while protecting the important 
justified regulations?
    And we know this is important because excess regulation or 
red tape leads to a host of bad consequences from reduced 
incomes to increased income inequality and poverty. Governments 
of all stripes tend to agree that reducing red tape is a worthy 
objective, but accomplishing this objective can prove elusive.
    This is where the British Columbia model stands out. It 
stands out as a model that has delivered results. The main 
result is a 49-percent reduction in regulatory requirements 
since 2001. And the three keys to accomplishing this result: 
political leadership, regulator involvement, and simplicity.
    By way of context, British Columbia is Canada's westernmost 
province, and its reform started 17 years ago in 2001. At the 
time, economic growth and employment in the province lagged the 
rest of the country and had done so for most of the previous 
decade. The '90s is often referred to as the dismal decade in 
British Columbia. Excessive regulation was--examples of 
excessive regulation were just not that hard to come by, so, 
for example, forest companies were told what size nails they 
had to use to build small bridges over streams. Restaurants 
were told what size television sets they could have in their 
establishments.
    So in 2001, a new government was elected, and they had made 
the campaign promise that they would improve the economy, 
including reducing regulation by one-third in three years. The 
government accomplished this goal and more, and there were 
three key elements to the reforms. First, a minister was 
appointed whose only job it was to quarterback and champion 
these reforms and make sure they were put in place. Second, a 
measure that was simple enough that it could be applied broadly 
across government rules was used. And finally, two regulatory 
requirements had to be eliminated for every new one introduced. 
And this policy was later changed to one in, one out.
    In terms of the reforms outcomes, by 2004 the one-third 
target had been exceeded. And once the target was met, this new 
one-for-one policy was put in place. But here's the interesting 
thing: The regulatory restrictions level, requirements level 
did not stabilize at the one-third reduction but continued to 
go down to the 49-percent reduction that I said. Regulators 
continued to identify rules to cut faster than they were adding 
rules, although there was no longer any pressure to cut. I 
think that's an interesting outcome.
    In terms of outcomes, of course, it's also important that 
this wasn't just about cutting rules for the sake of cutting 
rules. It was also about maintaining high outcomes. And there 
were high outcomes of health, safety, and environment that were 
maintained. Another outcome, the province went from being one 
of the worst-performing economies in the country to being one 
of the best.
    So in conclusion, I want to repeat the three lessons that I 
think come from this model. Political leadership matters. The 
involvement of regulators matters. Regulators are not the enemy 
in this story. They were an important part of the solution. And 
the final reason for success is simplicity. Somewhat 
ironically, I think it's tempting to overcomplicate regulatory 
reform, and the thing that really distinguishes B.C.'s 
regulatory reforms is its reliance on a clear simple measure 
that could be applied broadly and communicated easily. And so 
there's a place for more complicated measures, but there's also 
a place for simpler ones.
    And with that, I'll conclude my comments and thank you very 
much. I look forward to questions.
    [Prepared statement of Ms. Jones follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Palmer. Thank you for your testimony.
    The chair now recognizes Mr. Vickers for five minutes for 
his testimony.

                   STATEMENT OF MATT VICKERS

    Mr. Vickers. Great. Firstly, I want to thank the Committee 
on Oversight and Government Reform and the subcommittee members 
here today for the opportunity to discuss standard business 
reporting.
    My name is Matt Vickers. I work for a publicly listed 
accounting software company Xero.
    In 2005, the Australian Government established a task force 
to review compliance burdens on Australian businesses. Their 
report shared that a typical New South Wales business spends 
400 hours per year or A$10,000 on the preparation and sending 
of paperwork to government. It's estimated that the total cost 
of regulation to the Australian economy in 2005 was A$86 
billion or 10 percent of that country's gross domestic product. 
That's about $62 billion U.S. And Australia has 7 percent of 
the population of the United States, so you can extrapolate 
from there.
    The task force offered 100 recommendations for reducing the 
regulatory burden on businesses. One recommendation was to 
simply financial reporting for individual businesses, and a 
standard business reporting work group was established. The 
work group aimed to optimize existing government processes to 
reduce business compliance costs to A$800 million over six 
years at a cost of A$320 million.
    Standard business reporting, or SBR, is the idea that 
multiple regulatory agencies should agree on common 
standardized data structures and elements for the information 
they collect from private sector businesses. By asking for this 
information in a consistent fashion, it removes the need for a 
business to resubmit the same information in multiple ways for 
multiple agencies.
    So I could ask you to imagine a small business in Wisconsin 
or Kentucky or California being able to add a new employee into 
their system or add a new director or shareholder or prepare 
all their State and income taxes and have all the relevant 
Federal and State agencies being given updated information 
almost instantaneously as the result of one data change 
within--made by the business owner. And imagine being able to 
do all that from a single piece of software. That's the power 
of this SBR and that's what we're talking about here.
    SBR does not change the intent or the content of regulatory 
reports but instead improves the efficiency of the government-
business interactions by standardizing the information the 
private sector is required to report. The implementation of SBR 
began in 2008 and the first reports were available two years 
later. It did not require any regulatory change. And as the 
chairman stated in his opening remarks, the Australian Tax 
Office estimated that the changes saved the government and 
companies A$1.4 billion in compliance costs during the 2016 tax 
year, far exceeding that original six-year goal of A$800 
million. In 2018, an Australian business can now interact with 
three Federal and eight State agencies in a single software 
environment. More agencies are planned to come on board in the 
future.
    SBR removed the technology and cost barriers for Xero and 
other software vendors like us to integrate securely with 
multiple government systems. Xero's software now allows 
Australian businesses to make use of a single regulatory 
reporting solution for multiple agencies direct from their 
accounting system.
    In the U.S., there are a number of relevant policy reforms 
already under way. This committee has already accomplished a 
large governmentwide data standards project. The Digital 
Accountability and Transparency Act of 2014 mandated that the 
Treasury Department create a governmentwide data taxonomy. The 
DATA Act information model scheme that now governs around 100 
Federal agencies report their spending activity. This shows 
that the government here is now practiced at such reforms.
    The House of Representatives unanimously passed the Open, 
Public, Electronic, and Necessary Government Data Act as part 
of the Foundations for Evidence-Based Policymaking Act, which 
would require all Federal agencies to maintain public data 
assets in machine-readable formats. And just last night, the 
House passed the Grant Reporting Efficiency and Agreements 
Transparency Act, which accomplishes reforms similar to SBR for 
U.S. Federal grant reporting.
    Though none of these ledgers of reforms explicitly address 
Federal financial reporting by all businesses, they do offer 
examples of efforts to seek governmentwide reporting standards 
and require machine-readable data for reporting in other 
domains. In the United States where Federal and State agencies 
operate on a much larger scale, legislation is likely to be 
required to compel agencies to work together to accomplish 
reforms similar to the SBR program in Australia.
    The Financial Transparency Act is a bipartisan legislative 
proposal which would require all eight major Federal financial 
regulators to adopt a standardized data structure for the 
information they collect from public companies, banks, and 
financial firms, and with the right support in Congress, such 
legislation could form the basis of genesis of SBR in the 
United States.
    It's our belief that well-deployed technology has the 
potential to reduce the cost of government and compliance to 
the taxpayer. By reducing the compliance burden of small 
businesses, the capital can be redeployed to pursue income-
generating activities. Like a tax cut, this puts money back in 
the hands of small businesses. But unlike a tax cut, this gives 
them something else: time. We believe the U.S. Government can 
realize these benefits on a far greater scale than the 
Australian example.
    Thank you for the opportunity to testify. Thanks.
    [Prepared statement of Mr. Vickers follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Palmer. I thank the gentleman.
    The chair now recognizes Mr. Brinkman for five minutes for 
his testimony.

                  STATEMENT OF SCOTT BRINKMAN

    Mr. Brinkman. Thank you, Chairman Palmer and Jordan, 
Ranking Members Krishnamoorthi and Raskin, and members of the 
subcommittees, for affording me this opportunity to discuss 
Governor Bevin's Red Tape Reduction Initiative.
    Governor Bevin campaigned on a theme that is all about 
jobs, which at its core means creating a more inviting 
environment to attract both human and financial capital. 
Candidate Bevin's Blueprint for a Better Kentucky listed seven 
action items that he would pursue if elected Governor. One of 
the action items was reforming State Government. Although there 
are many aspects to reforming State Government, a key component 
of that effort is modernizing Kentucky's administrative 
regulations, and one of the first undertakings of the 
administration was the formulation and implementation of its 
Red Tape Reduction Initiative.
    As part of this initiative, every cabinet and agency within 
the executive branch has been directed to review every 
regulation promulgated by--over the years and make one of the 
following determinations: First, completely repeal the 
regulation as its original purpose is no longer relevant.
    second, amend the regulation to conform it to a Federal 
counterpart. This effort includes eliminating inconsistent 
definitions and standards with the goal that the State 
regulation should never be more burdensome than the Federal 
counterpart unless circumstances unique to Kentucky require a 
stricter standard.
    Third, amend and modernize the regulation to make it clear 
and simpler to understand by those subject to the regulation, 
and also make it easier to update in the future.
    Fourth, combine the regulation with other regulations to 
include a single subject matter such as fees and applications 
in one regulation for ease of review by those subject to it.
    Finally, leave the regulation as it's currently written.
    The goal of the administration is to reduce by one-third 
the number of restrictions on businesses and individuals in 
Kentucky. In 1975, there were four volumes of regulations in 
effect in Kentucky. That number had grown to 14 volumes when 
Governor Bevin took office. Our current data reflects that, of 
the approximately 4,700 separate regulations on the books at 
the outset of the administration, over 2,700 regulations have 
been reviewed, 488 regulations have been repealed, 454 
regulations have been amended, and 56 new regulations have been 
promulgated.
    The initiative has the support of business groups, trade 
associations, chambers of commerce, and other organizations 
across Kentucky. There are several lessons to be learned from 
Kentucky's Red Tape Reduction Initiative. First, the Governor 
must own the initiative in every aspect, and it helps to have a 
tangible symbol associated with the endeavor. In the case of 
Kentucky, we created the lapel pin that I'm wearing today, and 
Governor Bevin and his top officials wear this pin every day. 
Further, Governor Bevin speaks out regularly regarding the 
initiative--the importance of the Red Tape Reduction Initiative 
to individuals and groups throughout Kentucky. As a result of 
the Governor's leadership, there is growing awareness of the 
initiative every day throughout the Commonwealth.
    Second, it is important to create a website that is 
interactive with the public and allows for individuals to post 
recommendations on the repeal or amendment of regulations. 
Kentucky's Red Tape Reduction Initiative website is 
RedTapeReduction.com. Kentuckians have submitted scores of 
thoughtful ideas on how to reduce unnecessary regulations that 
drive up the cost of conducting business and create 
inefficiencies without contributing to public health or public 
safety.
    Finally, the effort of the cabinets and other agencies must 
be sustained on a regular basis. Our cabinets and other 
agencies regularly review and re-review existing regulations to 
ensure that the goals of the Red Tape Reduction Initiative are 
being met. This is a thoughtful and deliberative process that 
never ends.
    We have also decided to digitize and modernize the manner 
in which our State agencies draft and promulgate regulations. 
To that end, Kentucky has contracted with Esper Regulatory 
Technologies, Inc., to provide state-of-the-art technological 
tools to our regulation drafters throughout the executive 
branch to assist them in the review of existing regulations and 
the promulgation of new regulations.
    In conclusion, the administration's efforts to simplify the 
ability of Kentuckians to conduct business are paying valuable 
dividends. As of last month, Kentucky's unemployment rate was 4 
percent, which is the lowest it has been since 1976 when this 
statistic began to be tracked, and its workforce participation 
rate is trending towards 40th in the Nation from 47th when 
Governor Bevin took office.
    Kentucky also realized during the month of April this year 
the highest amount of monthly tax receipts in its history, 
driven largely by corporate and individual income tax receipts. 
Also as of last month, there were 1,983,103 Kentuckians in the 
workforce based upon preliminary numbers for August, which is 
the highest number of employed Kentuckians in the history of 
the Commonwealth. Kentucky attracted $9.2 billion of announced 
direct investment in the State in 2017, which is a record 
amount for any year, and approximately $16.8 billion since 
Governor Bevin took office, representing the creation of almost 
46,000 jobs.
    There are many factors contributing to the success, 
including the enactment of smart and innovative legislation. 
However, it is the firm belief of the Governor that the 
implementation of the Red Tape Reduction Initiative and the 
exposure that it has received has contributed in large part to 
the growing perception that Kentucky is an attractive State in 
which to create and sustain good-paying jobs for its citizens.
    Thank you.
    [Prepared statement of Mr. Brinkman follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Palmer. Just to inform our witnesses and the members of 
the committees, votes may be called between 3:15 and 3:30. It 
is my intent to conclude the hearing with the members who are 
present so that we do not have to hold you hostage while we go 
vote.
    So with that, I will now recognize Mr. Narang for five 
minutes for his testimony.

                    STATEMENT OF AMIT NARANG

    Mr. Narang. Chairmen Palmer and Jordan, Ranking Members 
Krishnamoorthi and Raskin, and members of the committee, thank 
you for the opportunity to testify today. I am Amit Narang, 
regulatory policy advocate at Public Citizen's Congress Watch. 
Public Citizen is a national public interest organization with 
more than 500,000 members and supporters. For more than 40 
years, we have successfully advocated for stronger health, 
safety, consumer protection, and other rules, as well as for a 
robust regulatory system that curtails corporate wrongdoing and 
advances the public interest.
    Public health and safety regulation has been among the 
greatest public policy success stories in our country's 
history. Regulations have made our air far less polluted and 
our water much cleaner; they've made our food and drug safer; 
they've made our workplaces less dangerous; they've made our 
financial system more stable; they've protected consumers from 
unsafe products and from predatory lending practices; they've 
made our cars safer; they've outlawed discrimination on the 
basis of race, gender, and sexual orientation; and much more.
    These regulations are now considered to be bedrock public 
protections widely popular with the public. In short, our 
regulatory safeguards are to be celebrated and emulated. Yet 
there is much more progress to be made addressing threats to 
the health, safety, environment, and financial security of 
hardworking American families.
    Unfortunately, President Trump and his administration are 
taking the country in exactly the opposite direction, embarking 
on a radical and unprecedented deregulatory agenda that has led 
to the corporate capture of our regulatory system of public 
protections. One of the key drivers of this administration's 
attack on public protections is Executive Order 13771, the so-
called two-for-one executive order that imposes a regulatory 
budget on agencies.
    When the executive order was issued, Public Citizen, along 
with partner groups, challenged the order in court as 
unconstitutional and illegal. And this lawsuit is ongoing and 
pending a district court. Our lawsuit stipulates that the order 
exceeds the President's constitutional authority, violates his 
article II duty to take care that the laws are faithfully 
executed, and directs Federal agencies to engage in unlawful 
actions that harm members of the public, including members of 
Public Citizen.
    The order places requirements on agencies that are nowhere 
authorized by any statute, and in fact are in direct conflict 
with numerous bedrock public protection laws passed by 
Congress, which should be of utmost concern to members of this 
committee and all Members of Congress. None of the laws passed 
by Congress direct or even permit agencies to issue regulations 
that protect the public only if they can first get rid of 
existing regulations that protect the public and only if the 
new regulatory protections impose no new costs on corporations 
or hurt corporate profits.
    The message the executive order sends to hardworking 
Americans and their families is this: It is more important for 
our government to boost corporate profits than it is for our 
government to ensure that Americans have the right to clean air 
and water, safe food, safe workplaces, civil rights 
protections, safe and non-toxic consumer products, including 
children's products, safe cars, financial protections that hold 
Wall Street accountable, and many more commonsense safeguards.
    The executive order has now been enforced for roughly 20 
months, and the results are clear: The order has blocked and 
delayed agencies from issuing hundreds of public protections 
according to official government data listed on OMB's unified 
regulatory agenda, while providing underwhelming cost savings 
to corporations of $570 million under fiscal year 2017, which 
amounts to about .001 percent of GDP growth under the second 
quarter of this fiscal year. In other words, the cost of the 
executive order in terms of public protections that have been 
blocked significantly outweigh the minimal benefits to 
corporations that the order has provided with respect to cost 
savings.
    Among the protections that the public has lost are new 
lead-in-drinking-water standards; new gun-control measures; new 
vehicle, truck, and train safety standards; dozens of new 
environmental protections, including restrictions on toxic 
chemicals under TSCA; safety standards for new tobacco products 
like e-cigarettes; numerous workplace safety protections; and 
updates to energy efficiency standards. It is likely that 
agencies will be unable to accumulate enough cost savings to 
corporations under the executive order to be able to issue 
important new protections that will save lives such as new auto 
safety technology that allows vehicle-to-vehicle communications 
that can potentially save thousands of lives per year.
    The executive order has failed to unleash economic growth 
as promised by supporters of the order, at least according to 
Goldman Sachs. Goldman Sachs studied whether job growth and 
capital spending have been stronger in sectors in companies 
that were more highly regulated before the most recent 
election. According to Goldman Sachs' January 2018 report, 
quote, ``We find no evidence that employment or capital 
spending accelerated more after the election in an area where 
regulatory burdens are higher.''
    In sum, the executive order has been a lose-lose for our 
country. It has made Americans less safe by blocking or 
delaying critical new regulations that protect the public, 
while providing underwhelming cost savings to corporations and 
failing to create economic growth. Public Citizen encourages 
this committee and Members of Congress to conduct vigorous 
oversight over the continuing implementation of Executive Order 
13771 to ensure that Federal agencies are doing their 
statutorily mandated duty to protect the public by issuing new 
health, safety, environmental, and consumer protection 
regulations, as Congress intended. Public Citizen also 
encourages Members of Congress to be mindful of the need to 
explicitly exempt agencies from complying with this executive 
order when drafting and enacting new legislation designed to 
protect the public by requiring agencies to issue new 
regulations.
    Thank you, and I look forward to your questions.
    [Prepared statement of Mr. Narang follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Palmer. I thank the witnesses for their testimony.
    The chair will now recognize Mr. Massie for five minutes 
for his questions.
    Mr. Massie. Thank you, Mr. Chairman.
    Secretary Brinkman, you mentioned that Kentucky, under 
Governor Bevin's leadership, has repealed over 400 regulations 
and amended over 400 regulations? I didn't get the exact 
numbers, but can you tell us what some of the more 
consequential regulations have been in terms of easing up 
burdens on companies or fostering economic development?
    Mr. Brinkman. Thank you, Congressman. The current data as 
of a couple days ago is 480 regulations have been repealed, 454 
regulations have been amended. A good example of a regulation 
that we inherited was a--that older buildings that--above 45 
feet you could not use PVC; you had to use cast-iron piping 
and--even though the International Plumbing Code authorizes PVC 
as a permitted piping material.
    And what we found particularly in cities like Louisville 
and Lexington is we have older office buildings that are class 
C office buildings, and developers want to convert those to 
residential properties. And most of the traditional office 
buildings have their plumbing stacked near the elevator shafts. 
If you convert them to residential, you're going to have to 
expand the piping and-- to accommodate residential living. And 
so we've estimated that that will save anywhere from, you know, 
$100,000, $200,000 per floor for developers to redevelop these 
office buildings into downtown living. So that's a perfect 
example where we had an outdated regulation that was just 
making it more difficult to redevelop these properties into 
downtown living.
    We also had a rule that we called our cut rule that any 
boxing or wrestling match, if participants started bleeding in 
any instance, the match had to cease immediately. We repealed 
that, and now we have a very vigorous--become a very vigorous 
State for holding martial arts, wrestling, boxing matches, 
which are very popular with our population and adding to the 
economic vibrancy of our communities.
    Mr. Massie. So did you get any pushback when you changed 
the regulation to allow PVC from the steel and cast-iron 
manufacturers or ----
    Mr. Brinkman. There was nothing major. There was ----
    Mr. Massie. Okay.
    Mr. Brinkman. Because I think people recognized it was 
outdated and not necessary and in fact would further economic 
development without in any way compromising public safety.
    Mr. Massie. And, you know, when we talk about reducing 
regulation at the government level, a lot of times we are 
thinking about reducing regulation on private business, but I 
served in county government, and there were State regulations 
that always constrained the county government. I am sure there 
are Federal regulations that constrain the State Government. Do 
you know of any of those regulations that eased up sort of the 
onerous demands on counties and cities or--not to put you on 
the spot but ----
    Mr. Brinkman. Right.
    Mr. Massie.--it may be easier for me to ask it at another 
level. Are there regulations at the Federal level that you 
would like to see us reduce that are constraining your ability 
to improve things in Kentucky?
    Mr. Brinkman. Well, I mean, certainly, the Waters of the 
United States and the regulations promulgated thereunder have 
been very restrictive and have made it difficult to develop 
property and add to the tax base, which, as you know, is 
critical for our counties and cities throughout Kentucky, 
particularly in light of the pension liabilities that exist.
    There's a perfect example of that where if we have sensible 
regulation at the Federal level, we believe that we can have 
further economic development, which will add to the tax base, 
which will help all our counties and cities meet their 
financial obligations, help our school districts, which, as you 
know, education funding has been a challenge in light of our 
pension obligations. So that's a perfect example where we think 
that with sensible regulations at the Federal level, our school 
districts, or cities, and our counties will benefit immensely.
    Mr. Massie. Ms. Jones, did you mention that you had a two-
for-one rule in the regulation there in Canada? The President 
signed an executive order with a similar rule. I am a little 
bit worried that it is not really the number of the regulations 
but, I mean, regulation could be three orders of magnitude more 
restrictive than another regulation. Can you speak to the value 
of having a two-for-one rule and is it important to look at the 
magnitude of the regulation or the number of the regulations?
    Ms. Jones. I think it's important to do both, so I think 
for the biggest rules you want to have robust benefit-cost 
analysis in place, but just like in a toolkit, you want to have 
maybe--if you wanted to have a robust toolkit, you'd have a 
sledgehammer and a hammer and a wrench and a screwdriver. You 
want to pick the right tool for the right job. And I think it 
is important to capture the blizzard of small things that can 
add up to a very big cumulative burden. And to do that with a 
simple measure that you can use broadly is good.
    And the difference--there is a difference between the Trump 
two-for-one, which uses a more complicated measure and the 
British Columbia two-for-one, which used a simpler measure and 
was applied much more broadly. So the Trump two-for-one policy 
applies to about 8 percent of the most economically significant 
rules, using a cost-benefit analysis, which again absolutely 
has its place. British Columbia's was much more granular, so 
they counted everything. And each regulation could have 
literally thousands of regulatory requirements associated with 
it. That's what B.C. counted. It was very broad.
    Mr. Massie. I like the granular approach. My time is 
expired, so I am going to yield back, Mr. Chairman.
    Mr. Palmer. I thank the gentleman.
    The chair now recognizes the ranking member, Mr. Raskin, 
for five minutes for his questions.
    Mr. Raskin. Thank you, Mr. Chair.
    Ms. Jones, let me stick with you for a second. The project 
that you describe that took place in British Columbia was 
undertaken on a bipartisan basis ----
    Ms. Jones. It was ----
    Mr. Raskin.--or a multi-partisan basis?
    Ms. Jones. No. In British Columbia, it was a new government 
that came into power, a liberal government that came into 
power, and won an overwhelming majority actually because of 
concern around economic issues.
    Mr. Raskin. Yes.
    Ms. Jones. However, the government has since changed, and 
the government that was previously in power has so far kept the 
reforms in place.
    Mr. Raskin. So, in other words, it's not so much a bone of 
ideological contention in Canada. Is that right? Or ----
    Ms. Jones. I think red tape reform has broad support across 
the political spectrum ----
    Mr. Raskin. Yes.
    Ms. Jones.--in Canada. You see that at the Federal level as 
well.
    Mr. Raskin. Yes.
    Ms. Jones. Canada's one-for-one rule, you had all parties--
in fact all votes except for one in Parliament on that 
legislation were for it.
    Mr. Raskin. Thank you. So, Mr. Narang, let me come to you. 
So I think everybody can agree that we would want to have as 
few rules as possible but all the rules that we need in order 
to advance what our public priorities are. How do you see the 
administration's deregulation campaign? Is it something that is 
focused on bureaucratic simplification, or do you see it as a 
cover for dismantling substantive rules that the administration 
opposes?
    Mr. Narang. Well, I'd say it's more the second, and the 
reason I say that--and look, I'll agree with others when I say 
it's not--it's probably good policy to get rid of regulations, 
as long as those regulations don't provide any safety benefits. 
But that is not what we're seeing with this executive order. 
There are no exemptions for regulations, for example, that 
provide safety benefits that have been proven to protect the 
public and have been proven to provide economic and social 
benefits above the cost. All the regulations are subject to the 
executive order, whether or not they protect the public and 
provide health and safety to the public.
    Mr. Raskin. Got you. So what would be a way to advance the 
goal of bureaucratic simplification, reducing red tape, and 
especially the time that is required to comply with 
regulations, while at the same time not undermining the public 
interest as it is embodied in specific legal mandates? And I 
don't know, Ms. Jones, whether you have got some take on that 
from the Canadians?
    Ms. Jones. Yes, I think one of the important things that 
happen in British Columbia is that regulators themselves were 
part of the solution. This wasn't just the private sector 
saying here's the long list of rules that we want you to cut or 
eliminate. This was much more of a partnership. The private 
sector was engaged and consulted for where--small businesses 
were consulted. But regulators, too, had a very important role, 
and I think they did a great job of helping to protecting the 
most important rules ----
    Mr. Raskin. So it was like a broadly ----
    Ms. Jones.--while getting rid of the rest.
    Mr. Raskin.--consultative process where people are 
collaborating and then also the regulators are not demonized in 
the process but they are people who actually know where the 
different skeletons are and which rules seem to be atrophying 
or obsolete?
    Ms. Jones. The way I would characterize it is you take 
regulation makers and you turn them into regulation managers, 
so they have two parts of their job. One is to find and develop 
new rules, but another part of their job is to continuously 
find and get rid of those ones that are duplicative or obsolete 
or no longer work anymore. And I think they're doing a pretty 
good job in British Columbia.
    Mr. Raskin. Yes. Mr. Brinkman, did you want to comment on 
that?
    Mr. Brinkman. Yes. Under Kentucky law, we have a very 
rigorous process for promulgating and amending regulations. We 
have a public comment period. We get comments, and then 
oftentimes we amend the regulations. We have a statement of 
consideration, and then it goes before a standing committee of 
both the House and Senate of Kentucky with members of both the 
majority and minority parties that review those regs, and the 
regs go to the committee of jurisdiction, whether it's health 
and welfare or transportation, and any of those committees can 
find the regulations deficient. To my knowledge, and it's just 
to my knowledge, but I do not believe any committee has found 
any of our regulations--or proposed regulations deficient to 
date. I may be wrong, but I don't believe so because we have 
this consultative process with stakeholders and members of both 
chambers in both political parties.
    Mr. Raskin. Okay. Thank you, Mr. Chairman, I yield back.
    Mr. Palmer. The chair recognizes the gentleman from 
Wisconsin, Mr. Grothman, for five minutes for his questions.
    Mr. Grothman. Yes. First thing, in dealing with rules, of 
course, rules have different sizes, you know? There are 100-
page rules and there are one-page rules. And sometimes if you 
do like one in, one out or whatever, there are rules you want 
to change, and you call that a regulatory rule change but 
really what you are doing is you are putting in a rule that is 
beneficial. So at first blush they did one in, one out or one 
in and two out or whatever seems kind of simplistic because 
there are rules you want to change.
    Do any of you want to respond to that?
    Mr. Vickers. I think, you know, rules are valuable, et 
cetera, but we need to consider as we're making them the cost 
of compliance. The cost of compliance is, you know, the 
handbrake that comes in ----
    Mr. Grothman. And nobody doubts that the rules are horrible 
and particularly on a Federal level they are probably 
unconstitutional to boot, but I am talking about a technical 
question, you know? If we are going to say we are going to get 
rid of one rule for every new rule we promulgate, new rules can 
come up that we like, right, because they kind of replace old, 
bad rules. I guess that is what I'm saying. Just physically how 
do you deal with that problem?
    Mr. Brinkman. If I might, one of the initiatives we've 
undertaken is we're looking at our section 1915(c) waivers. 
Those are the waivers for our individuals with development of 
disabilities. And these waivers were--and the accompanying 
regulations were written over a period of decades, and they're 
very inconsistent. They're difficult to understand. They're 
difficult to administer. And so we've undertaken an initiative. 
It's--we've been working on it for about a year. It's probably 
going to encompass another couple years because you have to get 
this right obviously. This--these clients, there's no margin 
for error.
    But by just making the waivers and the regulations 
consistent and easier to understand, we believe that four 
groups are going to benefit: first and foremost, the clients 
and their parents and caregivers; second, the independent case 
managers; third, the providers; and then four, our internal 
staff within our cabinet. This is a situation where we are 
cleaning up relations for the benefit of four different 
populations.
    Mr. Grothman. If you are able to do that. Now, I am going 
to give you another question, which really gets to me the guts 
of the problem because I have dealt with administrative rules a 
lot on a State-level, and I am going to cover three areas I 
think we ought to completely undo on a Federal level: nursing 
homes, where so many employees spend forever filling out 
paperwork rather than taking care of their residents; special 
education, where I think we have people in special ed that 
shouldn't be there or in which the teachers spend an inordinate 
amount of time in this country filling out forms rather than 
working with students; and transportation, where everybody 
agrees that as soon as you put Federal dollars in a project, it 
costs wildly more than if there are no Federal dollars.
    Nevertheless, I know on all three of these if we simplified 
them, in this country we would have a problem because, while I 
love friends of both parties, sometimes people of one party, 
out of maybe just a general distrust of business, will fight 
any changes that would seem just common sense.
    What I will ask you to do if you have had any less 
regulation in your country, how do you deal with the more 
government-worshiping side of the aisle? How did you get them 
to go along and admit that sometimes the government is wrong or 
it is possible to put too much paperwork on business?
    Ms. Jones. One of the arguments that we make when we're 
talking to those that might be a bit skeptical about cutting 
rules and the outcomes that might--that you might get as a 
result of that is that we need a lot more transparency in the 
system. And so with the B.C. regulatory requirements, you can 
see that if there were 10,000 regulatory requirements cut in 
the environmental area, you could ask--start asking tough 
questions like if there were worse outcomes, you could say look 
at those rules, and you could have those kinds of challenge 
functions. If the rules were cut and the outcomes were 
maintained at high levels, that gave you a different kind of 
feeling, but it gave more accountability and transparency into 
the system, which is good whether you think there should be 
more rules or there should be fewer rules. And that's the kind 
of transparency we have on the tax side.
    Mr. Grothman. Mr. Brinkman, if you were able to reduce the 
regulatory burden in Kentucky, were you able to do it and both 
parties were able to go along with it?
    Mr. Brinkman. Well, again, because of our statutory scheme, 
both parties have a role in reviewing regulations and voting on 
them and they could find them deficient. And again, we invite 
stakeholders to our public comment period. So we feel it's a 
very collaborative process, and to my knowledge I don't think 
the other party has found any--to my knowledge any of our 
regulations to be alarming, any regulations we've repealed or 
amended. I may be wrong, but I don't believe they've found any 
of those alarming ----
    Mr. Grothman. Good for you ----
    Mr. Brinkman.--but sensible.
    Mr. Grothman.--and I look forward to dealing with the other 
Congressmen on this panel next year, and maybe we can sit on 
the side and make suggestions but I'm particularly focusing on 
those three areas, transportation, oh, the paperwork with the 
poor nursing homes, and special ed. Thanks.
    Mr. Palmer. The gentleman yields back.
    The chair recognizes the ranking member, Mr. Raskin, for-- 
oh, wait a minute. The ranking member Mr. Krishnamoorthi--I am 
having a tough day today--for five minutes for your questions.
    Mr. Krishnamoorthi. Thank you, Mr. Chairman.
    You know, my--look, I am a former small-business man, so I 
really appreciate any efforts to cut red tape and regulations, 
unnecessary regulations. However, you know, at the same time 
that we want to cut red tape, we don't want to, you know, lay 
out the red carpet for predatory practices or anticompetitive 
practices or anti-consumer practices, what have you.
    So, you know, one--I am on the Ed and Workforce Committee 
in addition to being on the Oversight Committee, and one thing 
I wanted to ask Mr. Narang about is basically what we are 
seeing in terms of cutting rules that would basically prevent 
predatory practices in the education space and specifically the 
borrower defense rule. I think you mentioned this before. I am 
very concerned about this. This is the rule that basically 
allows students to basically recoup money that was fraudulently 
taken from them when they paid for worthless degrees or an 
education that really didn't pan out to anything. And so I 
would just like to get your sense of, you know, repealing the 
kind of a rule, you know, what kind of effect does that have 
and how do we, you know, deal with something like that?
    Mr. Narang. Thank you, Congressman. So we are also at 
Public Citizen are quite concerned about the growing student 
debt crisis in this country. It is maybe the biggest debt 
crisis that we have, and obviously it is handcuffing 
opportunities for students across the country. The borrower 
defense rule was an important rule that was put forward in 
during the Obama administration by the Education Department to 
make sure that students that do not get degrees that work out 
for them are able to avoid the kind of massive debt that we're 
seeing way too often with students.
    Unfortunately, the Trump Administration's Education 
Department is rolling that back. They've done so in an illegal 
way, at least according to one court that has struck down the 
massive delay of the rule. These are critical protections for 
students. I don't--you know, if the Trump Administration 
continues down this road, we're not looking at any solutions 
for the debt crisis.
    Mr. Krishnamoorthi. So here is ----
    Mr. Narang. We are just looking at actions that make it 
worse.
    Mr. Krishnamoorthi. Here is the deal, okay? Like when we 
promulgate the rules, we have to make sure on the one hand that 
we don't issue excessive red tape, we don't put obsolete 
regulations in place, and so forth. However, on the other hand, 
you have to balance that against regulatory capture by the 
industry that you are regulating. You don't want them to 
necessarily start to decide what the regulations are going to 
be so that they can continue with practices that perhaps the 
public is uncomfortable with.
    And so I go to Ms. Jones and just ask you, how do you 
balance that? Because that is kind of what is happening in the 
education space. We know that in the current Education 
Department there are officials at senior levels who come from 
the very industries that they are trying to undo regulations 
on. So how do you prevent that ----
    Ms. Jones. Well ----
    Mr. Krishnamoorthi.--because we all want to see less red 
tape, but we don't want to open the door to predatory 
practices.
    Ms. Jones. Well, I'll come back to two of the--what I think 
are the lessons from British Columbia. One is political 
leadership. And the minister responsible for the regulatory 
reforms in British Columbia was very clear that this wasn't 
just about cutting rules, that enforcement was going to be 
strong, fines in many cases went up so there were fewer rules, 
but enforcement and the penalties for disobeying the rules were 
in place, so that's ----
    Mr. Krishnamoorthi. So there is real independence.
    Ms. Jones. So that's an important ----
    Mr. Krishnamoorthi. Yes. Yes.
    Ms. Jones.--part of the equation. And I would say the 
second lesson from the British Columbia model that's relevant 
here is really the engagement of regulators. So this isn't just 
about--it's not one extreme or the other. You're looking for 
that happier middle ground ----
    Mr. Krishnamoorthi. Right. Right.
    Ms. Jones.--right, where it's not no rules. That's not what 
they were doing. But the--the overarching lesson is you can 
have high levels of health, safety, and environmental outcomes 
with many fewer rules. And that's good for everyone. And, by 
the way, not just for business, for citizens. So things like 
the childcare ----
    Mr. Krishnamoorthi. Right.
    Ms. Jones.--subsidy application that used to take four ----
    Mr. Krishnamoorthi. Right.
    Ms. Jones.--that used to take--you know, it was 18 days and 
now it takes four days, you know, things like that were good 
for citizens.
    Mr. Krishnamoorthi. So I agree. I was just recently in 
Kentucky, sir, and I see that there is change afoot, but I 
heard a lot of complaints about the Federal Government. Do you 
know why? Because of uncertainty on trade rules and tariffs at 
the Federal level. And you know the bourbon industry is 
obviously intensely affected. So talk to me about uncertainty 
and unpredictability with regard to Federal trade rules and 
regulations and how does that affect you?
    Mr. Brinkman. Well, I mean, obviously, that's a national 
debate that's going on that affects a number of industries in 
Kentucky, as you referenced. But more to the point in terms of 
our efforts with our Red Tape Reduction Initiative, as I 
indicated in my testimony, one of the things we're doing is 
we're conforming to the Federal counterparts, so if the Federal 
Government determines that a regulation is appropriate, we're 
conforming to that Federal counterpart. Too often in the past 
we had a separate regulation dealing with the same subject 
matter with inconsistent definitions and standards. That makes 
it impossible for any business, including any small business --
--
    Mr. Krishnamoorthi. Sure.
    Mr. Brinkman.--to try to figure out what the rules of the 
game are. So that's part of our ----
    Mr. Krishnamoorthi. Sure.
    Mr. Brinkman.--initiative where we're not necessarily 
weakening the regulatory regime. We're simply recognizing the 
supremacy of the Federal Government ----
    Mr. Krishnamoorthi. Sure.
    Mr. Brinkman.--and conforming to it.
    Mr. Krishnamoorthi. Sure. But where you don't have a State 
analog to a Federal rule, which has supremacy or, you know, 
takes the whole domain like trade, you want predictability, you 
want some certainty?
    Mr. Brinkman. Of course.
    Mr. Krishnamoorthi. Yes.
    Mr. Brinkman. Of course. As you well know, being a small-
business person, that predictability, understanding the rules 
of the game is paramount of the ability to, you know, sustain 
the business. We know that's very important.
    Mr. Krishnamoorthi. Got it. Thank you.
    Mr. Brinkman. Yes.
    Mr. Palmer. I thank the gentleman.
    The chair now recognizes the gentleman from California, Mr. 
DeSaulnier, for five minutes for his questions.
    Mr. DeSaulnier. Thank you, Mr. Chairman.
    The chairman and some of my colleagues are sometimes 
mystify that I was once a Republican when they see how I vote, 
but this is an area where at least in my life experience it was 
a bipartisan effort, and these questions are directed to Mr. 
Narang because I understand you have done some investigation on 
this.
    I was appointed by Governor Pete Wilson in 1996, '94, to be 
a member of the California Air Resources Board. This is to 
enforce the U.S. Clean Air Act and the California Clean Air 
Act. The U.S. Clean Air Act, which was signed originally by 
Richard Nixon, a Republican from California, recognizing that 
California had much more severe public health costs when it 
came to pollution. Then reauthorization was signed by another 
Californian, Ronald Reagan, and a Republican. I was reappointed 
by Governor Schwarzenegger, a Republican, and then Governor 
Davis, a Democrat.
    So one of the joys of being on that board was that it was 
largely nonpartisan up until recently, that there were always 
equal members left over from previous administrations. But we 
did cost-benefits that I thought were terrific. The staff knew 
that they wouldn't bring something to the board or committee of 
the board until it had been thoroughly cost-benefited, which I 
thought was really good, particularly the public health costs, 
given its charge.
    So in that context we spent many, many years coming up with 
State statutes that went to issues around climate change and 
carbon emissions. We were very careful that we wouldn't be 
preempted under CAFE standards at the Federal level. We applied 
for a waiver. We had never been denied a waiver under the Clean 
Air Act until this instance. The Obama administration came in 
and gave us the waiver. We were going to prevail, most legal 
experts opined. And now we have this administration wanting to 
roll Obama administration regulations around carbon to 
complement California Air Resources Board work that has been in 
effect in a bipartisan level way for 20 years, actually longer 
than that when our Scientific Advisory Committee first came to 
us and said this is a problem.
    So the estimate I understand that you have done some work 
on is that this rule, if it goes into effect and we can't work 
something out with California, the Administration, the car 
industry, will cost $100 million to enforced but will cost 
almost $1 billion to the economy. So could you talk a little 
bit about that? And politics and political opinions being 
driven and entering into, which I think should be nonpartisan 
if we had the benchmarks right in measuring statutes and 
regulatory efforts to make sure that they were--we could have a 
real conversation about their benefits and their costs.
    Mr. Narang. Thank you, Congressman. So there are reams of 
evidence demonstrating that fuel economy standards are good for 
the economy, for the national economy, for State economies. 
This is separate of course from the, you know, environmental 
benefits that we get from increased fuel economy standards. 
This is--actually I think maybe the most interesting recent 
piece of evidence is when the Trump Administration proposed the 
rollback and potentially, you know, superseding of California's 
waiver. There was a lot of internal disagreement between the 
Department of Transportation and EPA. And the EPA experts, you 
know, were showing--this all came out post-proposal of the 
rule, but the EPA experts were showing strong data to the 
Department of Transportation officials saying, look, all of 
the--the methods that you're using, the numbers that you're 
using, they are wrong. You're making assumptions that are not 
based in fact, and the EPA can't support these conclusions.
    Now, obviously, the EPA, you know, is partly involved in 
the rollback, but I think it was very telling to see those 
behind-the-scenes documents from EPA staff to the Department of 
Transportation staff, making it clear that they did not feel 
that the evidence that now, you know, the Department of 
Transportation is relying on in rolling back the fuel economy 
standards, that that is solid evidence that--lots of EPA 
studies, cost-benefit studies dating back decades show that the 
Department of Transportation numbers are wrong.
    Mr. DeSaulnier. So I would just like to conclude. When I 
was in the legislature, I was a big supporter because I 
represented California in the National Conference of State 
Legislators. And I looked at what States were doing around 
regulatory authority, and I actually thought one of the really 
good things that Texas did was their Sunset Commission, an 
independent commission that did terrific work in looking at 
statutes and regulatory issues and doing cost-benefits and 
saying, you know, it is not working as intended. The 
legislature either needs to change it or we are going to sunset 
it.
    So I really think there is a wonderful opportunity here, as 
I say, if we get the framework right, that this would be 
nonpartisan. I think all of us want government to work better 
and more efficiently for Americans. And, Mr. Chairman, I know 
you feel the same way, so hopefully, this can become more of 
that dialogue and less of the political dialogue. Thank you, 
Mr. Chairman.
    Mr. Palmer. I thank the gentleman, and I do have great hope 
that this can be a bipartisan effort. It is interesting. We had 
three regulatory reform task force hearings last year in 2017 
with agency representatives who came and testified about agency 
employees implementing the executive orders. And frankly, when 
we announced these hearings, I thought that we would get some 
pushback. I thought there would be some resistance, but what we 
found was not only was there no resistance, there was 
enthusiasm for it. And the thing that I tried to get across to 
people is, first of all, we all breathe the same air, we are 
all drinking the same water, whether it is bottled or 
otherwise. We are walking on the same grounds. Our kids and 
families are breathing the air and drinking the water. That is 
not what this is about. What this is about is having a sensible 
regulatory environment.
    And what we have found from the regulators who came over, 
the folks who were trying to implement this is this helps them 
do their job. When you have regulations that are accumulated to 
the degree that they have over time, you start to realize that 
you are trying to implement regulations that are obsolete. You 
are implementing regulations that people have forgotten were on 
the books that you have duplicated, and they don't match, and 
in many cases they are contradictory. It imposes an enormous 
cost on businesses. This is not rolling out the red carpet, as 
somebody said, to business. That is not what this is about. 
This is about sensible regulation because I think that it is 
one area where we agree.
    The regulations that we have adopted over the years, 
particularly on the environment, have resulted in dramatic 
improvement in environmental quality. I mean, our economy has 
grown almost 500 percent since 1980. Vehicle miles have gone up 
over 100 percent. Population has increased over 30 percent. 
Energy consumption is up over 30 percent, but emissions, for 
instance, are down over 50 percent. We are making progress. 
What we want to do is make sure that we can continue to make 
progress, but at the same time allow people to flourish. And it 
almost sounds like another opening statement, so I am now going 
to recognize myself for five minutes for questions as we await 
the call of votes.
    And one of the things in the State of Alabama that we were 
looking at doing--I was on the Governor's Task Force for 
Improving State Government--was to create a one-stop shop. And 
we are talking about getting rid of the obsolete regulations 
and the duplications and the contradictions, but we also need 
to make it easier for people, whether it is getting permits or 
being able to get answers in regard to their questions about 
regulations. Has that been part of what has been done in 
British Columbia or Australia or Kentucky? And we will begin 
with Ms. Jones.
    Ms. Jones. Yes, in British Columbia there's been some work 
to do one-stop shopping for sure. That was part of the reforms, 
and I think that's gone over very well. There's also at the 
Federal level ongoing work to simplify that and have one 
business number and that kind of thing, so that's certainly 
very popular. I think it's one of many, many things that needs 
to be done, and that was, again, one of the things that B.C. 
did right was they didn't say bring us-- often, I've been 
involved in regulatory reform exercises where people will say 
bring us your top 10 irritants. And it's not about the top 10 
irritants. The one-stop shop may be very well on that list, but 
it really is about the blizzard of little things. So, again, 
having that broad, clear, simple measure was very helpful in 
that regard.
    Mr. Palmer. Mr. Vickers?
    Mr. Vickers. Yes, SBR and Australia is in effect a one-stop 
shop. It allows you to file your taxes, to register a business, 
to register an employee, and so on through a single reporting 
framework. And the way that that worked was agencies came 
together, agreed on a common taxonomy, and generated reports 
using those common data elements. And when you do that, you 
reduce the cost of compliance significantly, and that has huge 
benefits for business. I quoted the A$1.4 billion figure 
before. Ninety-seven percent of that was savings to small 
business, so a huge number of that.
    Mr. Palmer. Yes.
    Mr. Brinkman. Yes, Mr. Chairman, that's the other part of 
this initiative that I didn't discuss, but clearly, we are 
creating one-stop. We have initiatives for one-stop for 
businesses and individuals to go to one portal to handle all 
their needs. And our applications are going online so people 
can complete the applications online, submit the payment for a 
renewal fee for a license, that type of thing online, and we're 
also working with our agencies every day to cut down on the 
processing time to respond to requests for permits or 
applications or things of that sort because we know that one of 
the more frustrating things for individuals and businesses is 
the uncertainty of not knowing when or if an application, a 
license, a permit, et cetera, is going to be granted. So we are 
very cognizant of the need to be responsive, and that is part 
of our initiative.
    Mr. Palmer. You know, Mr. Vickers--well, go ahead. You 
would like to follow up?
    Mr. Vickers. Yes, just quickly. I would encourage you to 
think about the harmonization--potential harmonization between 
Federal and State compliance regulations. It's one thing to 
focus on, say, the State of Alabama or Kentucky, but if you 
still have to deal with the Federal Government separately, that 
is--that introduces a burden.
    Mr. Palmer. Well, that is part of what we are trying to do, 
and you, in your previous response to my question, said that 97 
percent of the savings went to small business, and that is 
really the economic engine of the American economy. It is the 
employment engine of the American economy. Massive corporations 
have the resources to hire compliance people to make sure they 
comply with this, but small business really gets hammered by 
the overaccumulation of regulations.
    And I had entered into the record this--it's actually an 
article about the Gallup report, the Gallup organization report 
that came out back in 2014. It showed that we were averaging 
100,000 more business startups than closures prior to 2008. And 
then we went through--and this sounds partisan, but it is just 
facts. We went through what I would consider a blizzard of new 
regulations, and there were also other issues with the 
recession, but I think this compounded the problem, that by 
2014 we had gone from 100,000 more businesses opening than 
closing to 70,000 more businesses closing than starting up. And 
on a per capita basis we no longer ranked first in 
entrepreneurism or third or fourth. We ranked 12th. And it is 
particularly harmful for small business.
    And one of the things about what we are trying to do with 
the regulatory reform, the red tape reduction and what you 
people have done successfully I might add is that you have 
removed uncertainty. And I preach this till I am blue in the 
face, but money is just like water. It will always seek the 
path of least resistance. And when you have got particularly 
small businesses, they are already taking risk, you just add to 
that risk aversion when you have overly complex regulations. 
What people want is a predictable environment in which to 
invest.
    And if you do what has been done in British Columbia and 
Australia and Kentucky and in the U.K., you reduce the 
uncertainty. And for us in our economy that is particularly 
important because we see what is happening right now in the 
economy and the low unemployment. As we continue to create an 
environment where people will start a business, you will hire 
more people, wages will go up because it puts upward pressure 
on wages, that is really what we are trying to do here. We want 
to create an environment where we don't diminish the quality of 
our environment. We want to continue to improve that. And by 
the way, wealthy nations do that. Poor nations don't as well. 
But we want people to flourish.
    And really the good thing about this--and I speak to my 
good friend from California, Mr. DeSaulnier--and he is a good 
friend. We have become very good friends since our time in 
Congress; we came in at the same time--is that what British 
Columbia and Australia and Kentucky and even the U.K. have done 
is they have created a model. You have worked out some of the 
kinks that I think is going to be very, very helpful and 
instructive to us so that it significantly reduces the 
potential for missteps and what we are trying to do.
    So I want to thank our witnesses for appearing today and 
for the great work that you all have done. As I said before, it 
has been very helpful to us all, and we look forward to 
interacting with you again in the future.
    The hearing record will remain open for two weeks for any 
member to submit a written opening statement or questions for 
the record. If there is no further business, without objection, 
the subcommittee stands adjourned.
    [Whereupon, at 3:31 p.m., the subcommittees were 
adjourned.]


                                APPENDIX

                              ----------                              


               Material Submitted for the Hearing Record


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                                 [all]