[Senate Hearing 116-37]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 116-37

                 FROM BEGINNING TO END: AN EXAMINATION
      OF AGENCIES EARLY PUBLIC ENGAGEMENT AND RETROSPECTIVE REVIEW

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
               REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 7, 2019

                               __________

                  Available via http://www.govinfo.gov

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs
                        
                        
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]     


                                __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
36-307 PDF                  WASHINGTON : 2019                     
          
--------------------------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, [email protected].        
                        
                        
                        

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
ROB PORTMAN, Ohio                    GARY C. PETERS, Michigan
RAND PAUL, Kentucky                  THOMAS R. CARPER, Delaware
JAMES LANKFORD, Oklahoma             MAGGIE HASSAN, New Hampshire
MITT ROMNEY, Utah                    KAMALA D. HARRIS, California
RICK SCOTT, Florida                  KYRSTEN SINEMA, Arizona
MICHAEL B. ENZI, Wyoming             JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri

                Gabrielle D'Adamo Singer, Staff Director
               David M. Weinberg, Minority Staff Director
               Zachary I. Schram, Minority Chief Counsel
                     Laura W. Kilbride, Chief Clerk
                     Thomas J. Spino, Hearing Clerk


       SUBCOMMITTEE ON REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                   JAMES LANKFORD, Oklahoma, Chairman
ROB PORTMAN, Ohio                    KYRSTEN SINEMA, Arizona
MITT ROMNEY, Utah                    THOMAS R. CARPER, Delaware
RICK SCOTT, Florida                  JACKY ROSEN, Nevada
MICHAEL B. ENZI, Wyoming
                      Chris White, Staff Director
                       James Mann, Senior Counsel
                Eric A. Bursch, Minority Staff Director
      Anthony J. Papian, Minority Senior Professional Staff Member
         Mallory B. Nersesian, Subcommittee and Document Clerk
                            
                            
                            
                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Lankford.............................................     1
    Senator Sinema...............................................     3
    Senator Carper...............................................    11
Prepared statement:
    Senator Lankford.............................................    25

                               WITNESSES
                          Tuesday, May 7, 2019

Hon. Susan E. Dudley, Former Administrator (2007-2009) of the 
  Office of Information and Regulatory Affairs, Office of 
  Management and Budget..........................................     4
Hon. Sally Katzen, Former Administrator (1993-1998) of the Office 
  of Information and Regulatory Affairs, Office of Management and 
  Budget.........................................................     6

                     Alphabetical List of Witnesses

Dudley, Hon. Susan E.:
    Testimony....................................................     4
    Prepared statement...........................................    28
Katzen, Hon. Sally:
    Testimony....................................................     6
    Prepared statement...........................................    36

                                APPENDIX

Responses to post-hearing questions for the Record:
    Ms. Dudley...................................................    43
    Ms. Katzen...................................................    58

 
                 FROM BEGINNING TO END: AN EXAMINATION
      OF AGENCIES EARLY PUBLIC ENGAGEMENT AND RETROSPECTIVE REVIEW

                              ----------                              


                          TUESDAY, MAY 7, 2019

                                 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 10 a.m., in room 
342, Dirksen Senate Office Building, Hon. James Lankford, 
Chairman of the Subcommittee, presiding.
    Present: Senators Lankford, Scott, Sinema, and Carper.

            OPENING STATEMENT OF SENATOR LANKFORD\1\

    Senator Lankford. Good morning. Welcome to today's hearing 
entitled From Beginning to End: An Examination of Agencies 
Early Public Engagement and Retrospective Review. I would like 
to first welcome Senator Sinema to the dais. I look forward to 
working with you in the Senate, and am grateful, specifically, 
for your work that you have done on these topics in the House, 
and coming over here and working on this in the Senate. I know 
the most coveted ranking position, is to be able to work on 
this Subcommittee, working on regulatory issues and Federal 
management. And what is wonderful is that you worked on these 
issues a lot in the House, and I am grateful that you have come 
over to be able to work on this here.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Lankford appears in the 
Appendix on page 25.
---------------------------------------------------------------------------
    Thank you, as well, to our witnesses who bring a lot of 
expertise into this, and we are very grateful for the time that 
you have spent on it. Former Office of Information and 
Regulatory Affairs (OIRA) administrators are a very valuable 
resource to us in this Committee because you have walked 
through this process and you bring some unique insight.
    I also jokingly say all the time I can ask former 
administrators questions that they can actually answer, that 
current administrators say, ``I will have to get back to you 
with my legislative staff,'' and note that. So we are grateful 
to be able to get the insight.
    Today we are focusing on how agencies conduct public 
outreach at the beginning of a rulemaking, and how real success 
or failures are measured years later. While these could be 
considered narrow issues they are by no means small. Advance 
Notice of Proposed Rulemaking (ANPRM) are important tools that 
only a few agencies are statutorily required to actually 
utilize.
    Administrative Procedures Act (APA) sets out a process 
where agencies propose a rule, listen to comments from the 
public. They have the opportunity to make changes and then 
issue a final regulation. While the system looks good on paper, 
in practice agencies typically conduct a significant amount of 
work before formally engaging the public. They will consider 
various regulatory schemes and conduct economic analysis. 
Ideally, agencies would engage the public early, but there is 
no Administrative Procedures Act requirement to do so.
    Turning to the other end of the rulemaking process, 
retrospective review is a process to ensure rules achieve their 
intended goal in the least burdensome way. Over time, changing 
circumstances, improved technologies may render some 
regulations ineffectual or unnecessary. An agency's job is not 
done after the final rule is published. As initial estimates of 
both costs and benefits prove inaccurate, agencies should 
revisit a rule to ensure the desired effects are actually 
achieved.
    Every President since Jimmy Carter has urged agencies to 
utilized retrospective review to examine existing regulations. 
While these directives were issued with good intentions, they 
gave agencies a significant amount of discretion in selecting 
which and how many rules to review.
    The focus of this hearing is two bills that Senator Sinema 
and I will introduce shortly, that codify the best practices 
for both procedures. The Early Participation in Rulemaking Act 
direct agencies to issue advance notices for rules costing more 
than $100 million annually. The agency must outline what 
problem the rule intends to solve and listen to the public's 
input on the subject. The idea behind this bill is to require 
agencies to listen to the public before they craft the 
regulation.
    Washington does not have all the answers. Taking time to 
work with stakeholders, particularly our small businesses, is 
vital in crafting effective regulations. Less burdensome is not 
less effective. Business owners want to be good citizens, 
follow along, and have a safe and clean workspace.
    Setting Manageable Analysis Requirements in Text (SMART) 
Act, is a retrospective review bill that looks ahead. It 
requires agencies to set metrics for how a rule will be 
measured for success in the future. It is hard to imagine the 
measure of success of anything unless it is defined. This bill 
instructs regulators to define what success is for a given rule 
and then requires them to grade that rule within 10 years.
    This Subcommittee has been working on both of these issues 
for a while. Both bills have bipartisan support in the past two 
Congresses. I look forward to working with my colleagues to 
push both of them across the finish line.
    With that I would like to recognize Senator Sinema for her 
opening statement.

              OPENING STATEMENT OF SENATOR SINEMA

    Senator Sinema. Well, thank you, Chairman Lankford, and 
thank you to our witnesses for joining us today to help fix our 
regulatory process.
    I am happy to join Chairman Lankford as the Ranking Member 
of the Regulatory Affairs and Federal Management Subcommittee. 
As a Congresswoman I promoted policies that expanded business 
opportunities and fueled innovation in Arizona and beyond, and 
my goal for this Subcommittee is to continue that work and to 
find and push for targeted common-sense reforms to regulations 
that help hard-working Arizonans build better lives.
    With Chairman Lankford's leadership we are off to a strong 
start. We have already succeeded in moving two common-sense 
regulatory transparency bills through committee markup, and 
that is only the beginning.
    The Providing Accountability Through Transparency Act and 
the GOOD Act will both help make government more accessible to 
Arizona businesses, and I am excited to accomplish even more.
    Today we continue the work of advocating for a modernized 
rulemaking process. Advance notice of proposed rulemaking 
allows agencies to engage with businesses, nonprofits, 
academics, and other everyday people, so an idea that may later 
become a rule is heading in the right direction.
    Retrospective review requires agencies to look back at a 
rule, to make sure it does what was intended and that the 
benefits outweigh the costs. Doing a retrospective review can 
be time-consuming and complex, but if an agency prepares in 
advance for the review it can be even more beneficial and 
efficient.
    Advance notice of proposed rulemaking and planning for 
retrospective review have been encouraged for decades but never 
enacted into law, and that should change. And soon I will be 
introducing the SMART Act to incorporate planning for 
retrospective review into major rules.
    Planning for the future is common sense, which is why 
planning for retrospective review has been promoted by the 
Government Accountability Office (GAO), the Administrative 
Conference of the United States (ACUS), and the American Bar 
Association (ABA). By requiring agencies to plan for review, 
the reviews will be more thorough and accurate, and less 
expensive and time-consuming. Our legislation will improve 
regulations, remove unnecessary burdens, and increase 
transparency and accessibility for Arizona businesses, 
communities, and others, and I look forward to hearing from our 
witnesses.
    Thank you, Mr. Chair.
    Senator Lankford. Let me proceed to testimony from our 
witnesses. The Hon. Susan Dudley is the Director of the 
Regulatory Studies Center and Distinguished Professor of 
Practice at the Trachtenberg School of Public Policy and Public 
Administration at George Washington (GW) University. Before 
joining the faculty at GW, she served as the Administrator of 
the Office of Information and Regulatory Affairs from 2007 to 
2009.
    The Hon. Sally Katzen is a Professor of Practice and 
Distinguished Scholar in Residence at New York University 
School of Law. She served in multiple roles during the Clinton 
Administration, including Administrator of the Office of 
Information and Regulatory Affairs, Deputy Director for 
Management of the Office of Management and Budget (OMB).
    Thank you both for bringing your experience and your 
insight, for working with our staff leading up to this hearing, 
and continuing to contribute to your Nation. Thank you for that 
continued engagement.
    As you both know, because you have both been here before, 
it is the custom of this Subcommittee to swear in all witnesses 
before they testify. So if you would please stand and raise 
your right hand.
    Do you swear that your testimony given before this 
Subcommittee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Ms. Dudley. I do.
    Ms. Katzen. I do.
    Senator Lankford. Thank you. You may be seated. Let the 
record reflect both answered in the affirmative.
    We are using a timing device today, and you will have 6 
minutes for your opening statement. We do have a mercy rule 
here that if you go beyond that you are fine, because we have 
this hearing to get your testimony, and so if you go a little 
bit over we are going to be OK on both of those.
    But we will be glad to be able to receive your testimony 
now. Ms. Dudley, you are first.

TESTIMONY OF THE HON. SUSAN E. DUDLEY,\1\ FORMER ADMINISTRATOR 
(2007-2009) OF THE OFFICE OF INFORMATION AND REGULATORY AFFAIRS 
            AT THE OFFICE OF MANAGEMENT AND BUDGET.

    Ms. Dudley. Thank you. Do I get bonus points if I go under?
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Dudley appears in the Appendix on 
page 28.
---------------------------------------------------------------------------
    Senator Lankford. Yes, clearly.
    Ms. Dudley. Thank you very much, Chairman Lankford, Ranking 
Member Sinema, Senator Carper, and Senator Scott for inviting 
me to talk about one of my favorite subjects. I appreciate your 
interest in improving how the U.S. Government develops and 
evaluates regulatory policy. You are continuing a long 
bipartisan tradition of efforts to make regulation well 
informed, transparent, and accountable to the American people.
    Agencies have long been required to seek public comment on 
proposed regulatory notices, yet these opportunities for public 
engagement often come after agencies have made key policy 
decisions. Proposed rules are legal documents, written to 
defend a selected approach against possible litigation. So this 
motivates agencies to circle the wagons, narrowing the menu of 
alternatives and the evidence they consider before the public 
has an opportunity to engage.
    The draft Early Participation in Regulations Act would 
require agencies to issue for public comment advanced notices 
of proposed rulemakings for major rules. This could free them 
to share their early thinking on whether a problem requires a 
regulatory solution, what objectives could be achieved, and 
what different options are available.
    These ANPRMs and any differences between them and 
subsequent APA rulemaking steps are wisely exempt from judicial 
review in your draft bill. One virtue of the ANPRM is that it 
provides an opportunity for agencies to share their preliminary 
thinking about a problem and get input on potential solutions 
at a stage when they are truly open to feedback, analysis, and 
evidence. If agencies had reason to fear that this early notice 
could later be used against them in court that would discourage 
objective queries and underline those benefits.
    I do not think the ANPRM requirement would significantly 
slow agencies' rulemaking. For one thing, 90 days is not a long 
time considering that agencies often take years studying a 
problem and evaluating options before they issue that first 
proposal.
    But probably more importantly, to the extent the ANPRM 
invites comments on preliminary deliberations that would 
otherwise have taken place behind closed doors, it may make the 
overall regulatory process more efficient. So rather than 
tacking 90 days on at the end of a rulemaking--or at the 
beginning, that makes it 90 days longer, it may provide 
valuable input that ends up streamlining the subsequent notice 
and comment process. In many cases, early engagement could lead 
to more efficient analysis at the proposal stage and fewer 
surprises during public comment.
    That said, there are cases where an ANPRM would not serve 
the public interest and bill provides for exceptions for those.
    Retrospective review is also very important. Program 
evaluation has a long tradition in the private sector and in 
activities financed through the fiscal budget, but it has 
received little attention in the regulatory arena, even though 
every President since Carter has asked agencies to evaluate 
existing rules. President Obama added new emphasis on 
evaluation, yet most regulations continued to be issued without 
a plan for review.
    As ex ante analysis, regulatory impact analyses (RIAs) are 
necessarily hypotheses of the effects that regulations will 
have if implemented. Better regulatory evaluation would allow 
us to test those hypotheses against actual outcomes. That 
feedback would not only help with decisions on current policies 
but it would improve future RIAs and future regulations.
    Your draft bill would require agencies to include in major 
regulations a framework for how they will measure 
effectiveness, benefits and costs, and a plan for gathering the 
information necessary for ex post review. It would also require 
agencies within 10 years, to assess a rule's benefits and 
costs, evaluate how well it accomplishes its objectives, and 
determine whether it could be modified to achieve better 
outcomes.
    The draft bill focuses not just on reducing regulatory 
burdens but on improving outcomes by subjecting rules to 
rigorous evaluation and feedback. It could create an evaluation 
mindset where agencies learn from reviewing regulatory actions 
and apply those lessons to improve future rules.
    These two draft bills offer relatively modest yet 
potentially powerful changes to the rulemaking process. By 
engaging public input earlier in the process and providing for 
retrospective review of regulations to evaluate whether they 
are achieving their objectives, they can help ensure that 
regulations are based on the best available evidence and that 
they are working as intended. These bills could make regulatory 
decisions more transparent and accountable, leading to improved 
outcomes for the American people.
    Thank you.
    Senator Lankford. Thank you. Ms. Katzen.

  TESTIMONY OF THE HON. SALLY KATZEN,\1\ FORMER ADMINISTRATOR 
(1993-1998) OF THE OFFICE OF INFORMATION AND REGULATORY AFFAIRS 
             AT THE OFFICE OF MANAGEMENT AND BUDGET

    Ms. Katzen. Thank you, Chairman Lankford, Ranking Member 
Sinema, Senator Scott, and Senator Carper. Thank you for 
inviting me to testify today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Katzen appears in the Appendix on 
page 36.
---------------------------------------------------------------------------
    I have been generally skeptical, if not highly critical, of 
the many attempts over the last several decades to rewrite the 
APA and update the process that produces the regulations that 
translate general statutory directives into concrete 
requirements that the public must comply with. Many of those 
attempts were highly partisan and would have converted the 
regulatory roadmap into an obstacle course, with the effect, if 
not the intent, of greatly delaying or shutting down the 
regulatory process rather than contributing to good 
decisionmaking.
    I understand that the effort of this Subcommittee is 
different. I understand that you are looking for surgical fixes 
to improve discrete problems with the goal of enlisting support 
by both Democrats and Republicans, and specifically you are 
looking at the beginning and the end of the process with 
suggestions that could be achieved by legislation, by Executive 
Order (EO), by OMB guidance, by agency practices.
    But regardless of the vehicle, it is important to be clear 
about what the problem is and how to best solve that problem 
without introducing unintended consequences.
    So at the beginning, the first official step in a 
rulemaking is the issuance of a notice of proposed rulemaking 
(NPRM), lawyers in practice and the Academy generally agree 
that by the time the agency issues the NPRM, the staff involved 
have invested so much time and energy in developing the 
proposal and supporting data as they are required to do--and 
analyzing the likely effects of the proposal--as they are 
required to do--and justifying the proposal--as they are often 
called upon to do by agency decisionmakers and during OIRA 
review, that they are virtually locked into their proposal and 
are less receptive to new ideas or even significant 
modifications of their proposal.
    While all of the up-front work is desirable, it often has 
the unintended consequence of restricting the options going 
forward. As you mentioned, both Republican and Democratic 
Presidents have tried to counter this tendency by encouraging 
agencies to consult with the public even before they have made 
the decisions reflected in the NPRM. Those admonitions have 
produced some additional outreach to the public, but the effect 
has been inconsistent and less productive than had been 
expected.
    Now several agencies do use an advance notice of proposed 
rulemaking to solicit ideas at the outset, but it is not a 
universal panacea. It is especially useful when the agency is 
unsure what direction to take, what data to consider, how 
prescriptive to be. It is also useful when it is done before or 
at the outset of agency deliberations.
    It is less useful when the authorizing statute is itself 
prescriptive or there is genuine consensus about what is needed 
to respond to the identified problem. In short, it can be 
helpful at times, but at other times it may just add an 
unproductive but a time-consuming step to the already extended 
process.
    For this reason it is important that any requirement for an 
ANPRM be limited to economically significant--or you call them 
major regulations, that are required to use notice and comment, 
and second--that any such provisions not impose on the agency 
multiple requirements for explanations, analysis, data, etc.
    The purpose would be to engage those affected by the rule 
so they can contribute to its development and formulation 
before the agency settles on a particular course, not to lock 
the agency into a particular mindset before the process begins. 
The more the agency has to incorporate in an ANPRM, the more 
the agency will become invested in a particular outcome. This 
is the opposite of what it should do.
    With respect to retrospective review, for almost 40 years 
there have been concerns that there are too many rules, and so 
many of the rules in the books are obsolete, burdensome, 
unworkable. Notwithstanding the efforts of every President, 
from Reagan through Obama, we search and we search, and we do 
not find, and we do not eliminate many rules from the existing 
stock of regulations.
    Now one reason for this may be that since 1980, new 
regulations are not issued unless their benefits justify their 
costs. To eliminate such regulations would likely mean that the 
costs of rescinding the regulations would be greater than the 
benefits, which is counterintuitive. Other reasons for the 
limited success of look-back efforts are that agencies usually 
have not collected data along the way that would inform their 
retrospective reviews, and very importantly, any respective 
analysis requires resources, and for at least the last several 
decades regulatory agency budgets have generally been 
decreasing or straight-lined. Without the resources they cannot 
do the work.
    Nonetheless, there is growing support for the step that you 
are talking about here, namely encouraging agencies to plan for 
retrospective review when they are in the process of developing 
a final rule. This idea was endorsed by many of the 
organizations that you mentioned, and a report prepared by the 
Institute for Policy Integrity, which reflected the unanimous 
recommendation of almost all former OIRA administrators.
    Requiring agencies to provide a plan for later 
retrospective review of a newly issued rule would, in most 
instances, be salutary. If nothing else, it would require the 
agency personnel to focus on describing precisely what they 
want to accomplish and how to evaluate whether or not the rule 
is successful, at a time when the rule and its alternatives is 
foremost in their minds.
    It is very important, however, to provide flexibility for 
the eventual implementation of the retrospective review. The 
agency can and should commit to a framework in the proposed and 
final rule, identifying the data and the metrics it anticipates 
using for that purpose, but this should not be cast in 
concrete. We learn a lot with time, including how to better 
analyze and measure what is going on.
    This is amply demonstrated by the increased sophistication 
of cost benefit analysis itself over the last decade or two, 
and it is also demonstrated by the general preference for 
performance standards, which specify the desired results, 
rather than design standards, which lock in a particular way of 
getting there.
    In addition, while periodic review is useful, there will 
likely be some, and maybe many situations where repeated 
retrospective reviews would yield greatly diminishing returns. 
After a decade or so, if rules survive a retrospective review 
intact, they are likely to have established their worth, and it 
would be wasteful to continue retrospective review after 
retrospective review. Some escape hatch should be provided.
    I thank the Committee for its efforts and for its courtesy 
in allowing me to exceed my time limit. Because you are not 
writing on a blank slate, even this limited surgical approach 
will likely face an uphill battle. It might well, however, have 
a better chance to succeed than many that have been tried 
before. And for that I congratulate you both.
    Senator Lankford. Thank you. We will take that 
congratulations when we are done. We are in the starting block 
at this point, though.
    Thank you both for your testimony. I am going to defer my 
questions to the very end and recognize Senator Sinema.
    Senator Sinema. Thank you, Chairman. Thank you both, again, 
for being here today.
    Starting with Executive Order 12866, which directs agencies 
to make sure that regulations maximize benefits while limiting 
costs, Administrations have discussed the merits of 
retrospective review and have provided guidance to agencies 
related to the review of existing regulations, but, of course, 
these directives do not have the force of law.
    Over the years, as I mentioned in my opening statement, the 
GAO, the Administrative Conference of the United States, and 
the American Bar Association have all issued reports or made 
official comments regarding the need for post-enforcement 
analysis of the true costs and the benefits of regulations.
    So the question for both of you is considering the long-
term support for retrospective review from the Clinton and all 
subsequent Administrations, why do we believe that this 
continues to be a challenge for agencies in our Federal 
Government?
    Ms. Dudley. I would say there are two reasons, lack of 
incentives, and then lack of data and analytical tools. I think 
your draft bill addresses both of those, and when I say lack of 
incentives for agencies--it is always more exciting to look at 
the next thing, the next problem to solve rather than to look 
back at what you have done. But it is not just the agencies 
because regulated parties also, once they have complied, they 
are not so keen on revisiting it and maybe making their 
competitor upstart not have to comply.
    So by requiring this in your bill, I think you would 
address the incentives but perhaps more importantly you would 
address the lack of data and analytical tools. As you have 
said, this bill would require agencies up front to say here are 
the data we need, here is how we will collect it, and here is 
the outcome that we are going to look to measure it against.
    Ms. Katzen. I agree with her response, as I often agree 
with things that she say. I would just simply add the lack of 
resources. It takes time. It takes money. And while you can 
frame it in terms of the new guys want to do their thing, it is 
also fair to say that relooking and relooking and relooking may 
not be as productive. But it certainly drains resources away 
from what might be the current need to address a pressing 
problem of health, safety, environment, open competition, 
whatever.
    And so you are dealing with a situation where you have 
asked an agency to do this and that and the next thing, and you 
may not have always given them enough resources to do that.
    Senator Sinema. Based on current OMB guidance, agencies are 
expected to understand the impacts of proposed regulations 
while they are still under consideration, but OMB's own 
documents related to the realized costs and benefits of 
regulation allow for a very wide range in estimates, creating 
ambiguity when agencies are estimating future impacts.
    So our legislation, the SMART Act, requires the 
solicitation of data from regulated entities to ensure that the 
regulation meets its objectives. How will the data that is 
collected to build retrospective review into rules help create 
efficiencies at agencies when it comes to creating new 
regulations or new major rules in the future?
    Ms. Katzen. I think there are two aspects. One, as Susan 
mentioned in her opening statement, as you do retrospective 
analyses you learn whether the methodology you have been 
employing in doing your ex ante analysis is actually flawed in 
any way or could be improved in some way. So that helps the 
agency in thinking it through.
    It also alerts the regulated entities that they had a hand 
in this. They have a joint responsibility. They are going to 
have to come up with the data that show what the costs truly 
are. It is an urban myth that so many of the rules that we 
establish, at the time we say it is going to cost kazillions of 
dollars, and it turns out not to cost quite that amount of 
money. We will now be able to gauge that on a real-time basis 
with the kind of information that you are calling for.
    But one of the critical dimensions of whether a rule 
achieves its objectives is whether the rule is complied with, 
and that is up to the regulated entities, in large part. There 
is not a cop on every corner. Most businesses do want to 
comply. They want to know what the rules are and they will 
follow them. But it is not universal, and unless you have 
compliance data, you are not grappling with one of the key 
conditions.
    Ms. Dudley. I agree with Sally. I think it is not just the 
compliance costs that you will be gathering through that 
process, and that is one of the things that I really like about 
this draft bill, in particular, is that it focuses on the cost, 
the benefits, and the outcomes. So it is a lot of information, 
and if agencies do not say what is expected, as Senator 
Lankford said in his opening statement, up front, how will we 
be able to measure against that?
    Oh, the other thing, I think, that is valuable in your 
rules is the definition of major. It includes more than just 
the $100 million threshold. It talks about effects on 
competition, health, safety, etc. Those are all things that 
agencies should be measuring in this planning for retrospective 
review, and I think that is all valuable.
    Senator Sinema. Thank you. I often hear from Arizona 
businesses that they are not opposed to regulations but they 
feel that the opportunities to comment during the rulemaking 
process are often for show rather than for substance. This is 
partly due, of course, to the expectation that a draft 
regulation, as provided in a notice to propose rulemaking, 
already has a selected course of action, and it usually 
includes documentation and data to support that coming 
decision.
    So my question for you is how will the Early Participation 
in Regulations Act improve agency interactions with businesses, 
communities, and other regulated entities to help shape the 
process?
    Ms. Katzen. Well, it sends a message that early 
communication is important, that information that comes at a 
very early stage will be received by the agency and understood 
by the agency. And it does that, actually, in a number of 
different ways, but probably the most important is if it is 
done early. If you wait until you have crafted the NPRM, and 
then send out an ANPRM, it is useless. It is sort of like doing 
a cost benefit analysis after you have already decided on the 
approach you want to use. You should do it at the outset, when 
you are considering all the alternatives.
    So here I would urge that you indicate--not in that 
statute, because it is just too much concrete--but generally 
suggest their agencies think about doing an ANPRM when they 
first get started, when they first send off notification to the 
Unified Agenda and say, we are about to have a rulemaking. We 
have not settled on a course yet. And if that message goes out, 
we hope it will be received and taken advantage of.
    The other thing, for all regulated entities and regulatory 
beneficiaries, is it is possible to talk to the agencies 
throughout the entire process. There are ex parte rules at some 
agencies, but not at most. And it is sometimes difficult to 
move someone off the mark, but at the same time you should not 
be shy about having your voice heard and your points made. That 
is an important part of the interaction that agencies are 
comfortable with and should be used.
    Ms. Dudley. I think that is true. I think it is important 
that it is not just businesses that will have an opportunity to 
get involved but others with information that may be relevant. 
And, in fact, I think that is what is really significant about 
the ANPRM idea. Stakeholders that have connections are involved 
at early stages in the rulemaking, working behind the scenes 
with agencies. What this does is it opens it up so that others 
that may have interesting, creative, new insights can get 
involved.
    I also, as I mentioned in my opening remarks, the fact that 
it is not judicially reviewable, agencies really will feel much 
more comfortable getting a wide range of thoughts and really 
thinking broadly about how to solve the problem at hand.
    Senator Sinema. Thank you. Thank you, Mr. Chair.
    Senator Lankford. Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thanks, Mr. Chairman. I want to commend you 
and the Ranking Member for holding this hearing. This is an 
issue of real importance. You can tell by the number of people 
who have packed this hearing room and the number of television 
cameras that are just waiting outside to interview everyone who 
has been a part of this hearing.
    You have picked a couple of witnesses here. You could not 
have picked better witnesses. The balance of having Susan 
Dudley here and Sally Katzen shows a lot of wisdom, so thank 
you for that.
    I would like to say everything I do I know I can do better. 
I think the same is true of all of us, and I think it is 
probably true of most of our laws and rules, including the way 
we create rules and regulations. So thank you for coming and 
joining us here today.
    The last thing I am going to ask you is where do you think 
that you agree on some points that are most important, and 
where do you think maybe we do not agree on some things that 
are most important, in terms of what we are discussing today?
    But the last several years this Subcommittee has focused on 
how we can work to improve the regulatory process. I have 
served on this Committee for 18 years. I love this Committee, 
and that was before it was--Homeland Security, the department 
was created. So it is a great Committee and this is an 
important part of what we do.
    But the regulatory process is not perfect. No one is 
pretending that it is. And the Administrative Procedures Act 
and subsequent Executive Orders provide us with a robust 
roadmap for ensuring that agencies are promulgating rules 
fairly and we hope efficiently. The process also ensures that 
costs to industry are thoroughly considered and that the public 
has opportunities to be heard in the process.
    However, under the Trump administration we have seen an 
unprecedented number of regulatory rollbacks, and there has 
also been unprecedented effort to skip steps in the normal 
process for considering whether the costs of regulations 
outweigh the benefits that protect consumers, that protect 
workers, protect our health, and environment.
    I am especially concerned with the Office of Information 
and Regulatory Affairs' lack of oversight of agency rulemaking 
during this Administration and with the office's unwillingness 
to cooperate with oversight watchdogs who have legitimate 
requests for information.
    For example, just last week, the Environmental Protection 
Agency Inspection General (EPA IG) sent a rare notification to 
Congress saying that the White House Office of Information and 
Regulatory Affairs was refusing to cooperate with an audit that 
Senator Udall and I had requested about EPA's proposal to 
exclude high-polluting glider trucks from emission rules. 
Glider trucks are not trucks that glide especially well. They 
are old diesel trucks that pollute a lot, and they are cloaked 
in the shell of a bright, shiny, new truck. And the idea is 
that they are going to be able to continue to pollute. One of 
the greatest sources of pollution in our environment, for air 
pollution, is diesel engines, especially those that produce 
black carbon, which is far more dangerous to us and our 
environment than regular carbon dioxide.
    But, Ms. Katzen and Ms. Dudley, do either of you recall a 
time when OIRA refused to cooperate with an agency Inspector 
General or GAO? Do you recall a time?
    Ms. Dudley. Certainly during my tenure there was never a 
request from an agency IG of OIRA, and I think it may be 
unprecedented.
    Senator Carper. Alright.
    Ms. Dudley. So that means I do not remember----
    Senator Carper. Yes. OK.
    Ms. Dudley [continuing]. Not refusing, but I also do not 
remember it ever having occurred, such a request.
    Senator Carper. Thank you. Ms. Katzen?
    Ms. Katzen. In my recollection it did not occur where OIRA 
did not comply with a legitimate request from GAO, from the 
Congress, or from an Inspector General. I think there may have 
been one but I am a tad fuzzy on that.
    Senator Carper. OK.
    Ms. Katzen. To say ``no'' to a legitimate oversight body I 
think is unprecedented, to use Susan's word.
    Senator Carper. OK. That is fine. You can hold it at that. 
Thank you.
    OIRA seems to be failing to ensure that the EPA is 
conducting the cost benefit and other analyses that the law 
requires. I am going to just briefly describe a couple of 
examples, if I could.
    First, during the interagency review of their proposal to 
exclude high-polluting glider trucks from emission rules, that 
I just mentioned, it was pointed out that EPA should have done 
more analysis because the rule was classified as, quote, 
``significantly, economically significant.''
    Instead of requiring the analysis to be done, on the day 
before the rule was signed, OIRA allowed the rule to be 
reclassified so that analysis would no longer be required.
    Second, when the EPA proposed its repeal of the clean water 
rule, it did not do a new cost benefit analysis to justify the 
rollback. Instead, EPA just deleted the benefits column of the 
Obama cost benefits table and OIRA allowed the proposed repeal 
rule to be published.
    Finally, in the EPA's proposal to remove the legal 
underpinnings of rules to reduce emissions of mercury and other 
air toxics from power plants, OIRA allowed the agency to use 
the agency's old projected cost of compliance, that were three 
times higher than what the industry actually spent to comply 
with the rules and ignored the full benefits of that rule.
    And, if I could, I would just like to ask both of you, and 
I do not expect you to be experts on any or all of the examples 
that I have just cited, but when each of you were privileged to 
run OIRA, would you have agreed to authorize the release of 
proposed rules that failed to perform a credible cost benefit 
analysis?
    Ms. Katzen.
    Ms. Katzen. I would have fought hard to live up to what I 
thought the office stood for, which is good analysis, good 
data, and the kind of approach to rulemaking that produces good 
decisions.
    Having said that, I want to just add two qualifications. 
One, I am not there now, and if you are not there, it is 
sometimes very difficult to know what pressures are being 
exerted, who is saying what, who is doing what. In terms of 
your specific examples, however, I could give you three or four 
more.
    I am an OIRA supporter. I am an OIRA booster. It was with 
great difficulty that I actually made an address earlier this 
year to the American Bar Association Ad Law Section criticizing 
OIRA, and saying that I thought it was not doing enough to 
ensure good analysis and being faithful to the cost benefit 
regime that it has guardianship of.
    There are many disturbing stories. By the same token, when 
I was in the government I read stories that were not quite 
right. And so it is not fair, necessarily, to say that 
something is smelly in Denmark. It may well be, and I am 
concerned, as well.
    Senator Carper. OK. Thank you. Thank you.
    Ms. Dudley, this is not a trick question. I am not trying 
to put you on the spot. I think you know me. Both of you know 
me pretty well. But when you ran OIRA would you have agreed to 
authorize the release of proposed rules that failed to perform 
a credible cost benefit analysis?
    Ms. Dudley. I liked Sally's comment that I would have 
fought hard, so I agree. I would have fought hard. It is 
important to understand that OIRA does wear several hats. One 
of them is interagency coordination. Another one is the 
analysis, the requirements of Executive Order 12866. And then 
the third is that they are part of the White House, and so 
sometimes those are in conflict.
    So in my experience there--I remember times when we held 
our nose and said, alright, but before you get to the final 
stage you must do an analysis and put teed up for questions the 
things that the agency thought they needed that would allow 
them to do the analysis.
    Senator Carper. Good. Thank you for those responses. Mr. 
Chairman, thank you for being generous with the time and giving 
us a chance to actually have a conversation.
    Senator Lankford. That is great. Thank you.
    Thank you again. I am going to go ahead and say my 
questions now as well. I appreciate very much you coming 
through this process. Help us understand the inside of the 
machine. How long does it take to develop a rule and the 
economic impact, when you are talking about something that may 
be $100 million of economic impact? How much time is spent on 
the research side of that for the staff? And I know it is going 
to depend from rule to rule and agency to agency, but give me 
your ballpark guess.
    Ms. Katzen. Well, you are right that it will vary, 
depending upon the seriousness of the issue, depending upon 
whether it is a new issue or something that is being revisited, 
whether there is already expertise, or whether it has to be 
newly learned.
    It can take a year or 2 years to do the background 
research. It can also be done in 4 or 5 months. You get a lot 
of help from the outside sometimes, and a lot of obstruction 
from the outside sometimes. The whole process can take, as 
Susan said, years, occasionally.
    Senator Lankford. Susan.
    Ms. Dudley. It is hard to know exactly how long it takes, 
from the time an agency starts to think about the rule and the 
proposal. I can think of some that have been 10 years. Others 
can be shorter. There was a study that cite in my testimony 
that said, on average, 5.2 years is how long it takes before 
the proposal is issued.
    Senator Lankford. So certainly 90 days is not too much time 
to be able to block up to get additional input. My thought on 
this is how to help agencies, OIRA, the future, to be able to 
think about, when is the moment to be able to put this out 
here? If there is going to be an advance notice of proposed 
rulemaking they are going to think about it for a while, maybe 
a year even. They are doing some of their own research and then 
they decide we may be headed toward a rulemaking here. This is 
a lot of information and it is all directed toward the same 
spot.
    Where is the appropriate moment for them to go drop out an 
advance notice of proposed rulemaking to make sure that the 
insight in the information is coming at the right time, rather 
than, again, they form everything they need to do over 2 years, 
or 5 years of time, and 90 days before they plan to do it 
anyway they just drop this out there because it is formality?
    Ms. Katzen. Well, I mentioned in my testimony that I think 
it would be useful to issue an ANPRM as soon as the agency 
sends its first submission to the Unified Agenda. This is the 
document that is supposed to be available--well, it is 
available to the public. It is supposed to be a menu of 
everything that the agencies are thinking about doing. When 
they get to the point of saying, ``We are thinking about doing 
a rulemaking on this,'' that would be an appropriate time an 
ANPRM for for some rules. Again, I do not want to see too much 
of this cast in concrete----
    Senator Lankford. Right.
    Ms. Katzen [continuing]. And prescriptive. But I think once 
they know they are heading down that path, putting out an ANPRM 
would be helpful.
    Ms. Dudley. I think that is right. I think the first note 
is in the unified agenda, soon thereafter. That notice means we 
are thinking about this within the next 6 months. That would be 
a good time to do it.
    I also would hesitate to see the bill be too strict about 
that, because different agencies have different practices. But 
I think the way that you have put OIRA in charge of that, or 
OIRA as the coordinator for the ANPRM bill, that would be 
something that agencies could work with OIRA on.
    Senator Lankford. And again, the challenge that we have is 
we do not want to be prescriptive, because we cannot look in 
the future 10 years and we cannot see every rule and every 
entity. But the goal of this is to be able to get more dialogue 
early, not for the agencies to finish all their work and then 
go through the formalities.
    We are not trying to make it longer, or, as you mentioned, 
creating an obstacle course here at the end. We are trying to 
get dialogue early on, and if the dialogue is too late in the 
process it does not matter. We are still in the same spot. But 
if it is too early, we do not even know if it is a $100 million 
rule at that point. We really do not see it.
    So there has to be some level of information even to note, 
hey, I think this may be headed toward a major rule. They at 
least have to have enough information there to know what 
questions to ask, the size and complexity of it. This is a 
health and safety issue that is coming. We see some of the 
things that are going to be around it so let's get more 
information out there. Does that make sense?
    I guess I am asking a clarifying question. Are we hitting 
the right balance that we are not just creating an obstacle but 
we are getting this early enough? Should we be more 
prescriptive on when to be able to put this, or do we leave it 
at the discretion of OIRA, at a future OIRA, to say you did not 
do this ANPRM early enough and now we have a battle in the same 
process?
    Ms. Katzen. I would not be prescriptive. When I was in the 
government, in the Administration, I took committee reports 
seriously, and I think to make clear your interest in having 
this done earlier rather than later in the committee report 
would be a very useful way of sending the message. But I would 
not cast it into legislative language.
    Senator Lankford. OK. Fair enough.
    Ms. Dudley. I agree.
    Senator Lankford. OK. So let me ask you an even sillier 
question. Advance notice of proposed rulemaking just gets all 
of us excited here, as a term. Some agencies have just said 
request for information, to make it more generic and blunt. 
There have been a lot of different terms they have used, to 
basically accomplish some of the same things.
    Is this the right term? The advance notice of proposed 
rulemaking has been used before. We have it in statutory 
language. Is that the right term to be able to even use on 
this? If we want to take off our D.C. hat and to say if someone 
outside of D.C. gets an advance notice of proposed rulemaking 
they have no idea what it is. If someone gets a request for 
information everyone knows what it is. Is one better than the 
other?
    Ms. Dudley. Even though it is a mouthful I think advance 
notice of proposed rulemaking is the best--is a good way to say 
it. Agencies can always change something that they might have 
called a notice of inquiry before and just change the name.
    One thing that I think is valuable about it, that you would 
not want to lose, you would not want to make it so loose that 
agencies could just reach out to specific stakeholders.
    Senator Lankford. Right.
    Ms. Dudley. You do want this to be something that----
    Senator Lankford. It needs to be broad.
    Ms. Dudley [continuing]. Is public, yes.
    Senator Lankford. I agree. Ms. Katzen.
    Ms. Katzen. And again I would refer to the committee report 
to clarify that an advance notice of proposed rulemaking, by 
any other name, would still accomplish the same objective. And 
you could call it a request for information. You could call it 
a request for proposals. And again, that would send a message 
that I think would be helpful.
    Senator Lankford. As long as it is public and as long as it 
is broad, because one of the challenges that we have is small 
business, large business, individuals, outside groups, 
environmental groups, think tanks, whatever it may be, they all 
need to have access to be able to submit ideas to it because 
they are all going to have different ideas and thoughts.
    OK. So let me ask this. Are we overcomplicating this by 
adding another step with the advance notice of proposed 
rulemaking? Is there a way to be able to fix the notice of 
proposed rulemaking and to try to get more input from the 
public earlier in that process without having to do a formal 
process? I am willing to try to say let us go back and do it, 
because right now that process is so late in the process, or 
that product is so late in the process that a lot of decisions 
have already been made, and it is just tough to be able to 
engage with people.
    As I think both of you mentioned in your testimony, once 
folks have done their own research, bounced their own ideas, 
have gone through the obligatory, working with all their 
bosses, explaining why this is the best idea, people get more 
and more entrenched. So what I am trying to figure out, is 
there a way to fix that process rather than add a new one?
    Ms. Katzen. I think we had decades of court cases that have 
spoken to what needs to be in the NPRM itself, and how much the 
final rule can deviate from the NPRM. I am referring here to 
the ``logical outgrowth doctrine'' that says that if the agency 
changes its mind between the NPRM and the final rule, in a 
dramatic fashion, that may well have deprived the commenting 
public of an opportunity to comment on the final product----
    Senator Lankford. Right.
    Ms. Katzen [continuing]. And, therefore, it has to go back 
to the agency. And with 20, 30, or 40 years of cases having 
been built up, I would reluctantly say add a new step at the 
beginning rather than try to change the NPRM at this point in 
the face of those cases.
    Senator Lankford. OK.
    Ms. Dudley. I agree. I mean, I think it is the judicial 
reviewability of the NPRM that really forces agencies to have 
chosen what they want and defended that in a way that they are 
discarding other options.
    Senator Lankford. OK. Let me switch to the end, if I can, 
here. OIRA has the unique opportunity to be able to see 
multiple agencies simultaneous, and when we talk about 
retrospective review some of the issue is other agencies have 
now formed regulatory processes, or there is something new in 
another entity that maybe this regulation is not as pertinent 
anymore because this entity has created something that is also 
doing something similar, or whatever it may be.
    How can we help OIRA continue to be able to see all 
agencies, and when a retrospective review happens it is not 
just isolated to a particular agency but it still has that 
broad review? Is there anything that we need to build in?
    Ms. Dudley. More staff. I think that part of the reason 
that OIRA is so transactional is because their staff must 
triage always to be able to be reviewing things. So to be able 
to step back and look across, I would say more staff.
    Senator Lankford. OK.
    Ms. Katzen. In her testimony, Susan mentioned the function 
of OIRA as convening an interagency process, and I think that 
is the beginning of what you would like to lead to. If you look 
at Executive Order 12866, one of the definitions of 
``significant'' is where there is something that an agency is 
proposing to do that is inconsistent with what another agency 
is proposing, or has already done, so that we do not have the 
Department of Labor (DOL) working on transporting hazmats, and 
the Department of Transportation (DOT) working on transporting 
hazmats, and they are at across purposes.
    I thought that that would be a good vehicle for bringing 
together different agencies that were focused on a similar 
rule, and I see that in this context of retrospective review, 
where there might be similar rules at different agencies. That 
works sometimes, but by the time they have gone through the 
process of developing their rule, and how to implement it, how 
to enforce it, they are less willing to trade it for somebody 
else's rule.
    I think additional staff would help, and I think, again, 
oversight by the committee and language in the committee report 
would be helpful to clarify that this is one Administration, 
one Executive Branch, and that the various fingers should be 
working together rather than at across purposes.
    Senator Lankford. Right.
    There is some confusion on repealing a rule and going 
through that process, only that some people outside of 
government think if you walk in and do a review, then you 
decide you do not like it, you just take it out and the next 
day it is gone. Can you walk us through a little bit of the 
process that happens to actually go through a rule repeal?
    Ms. Katzen. OK. This is under the State Farm decision of 
the Supreme Court in the 1980s, having to do with airbags. And 
what it says is that if you are going to repeal or modify a 
regulation, you have to use the same processes that you used to 
create that regulation. Therefore, if you wanted to repeal or 
modify something that is on the books, you would need a notice 
of proposed rulemaking which sets forth the objective to modify 
an existing rule. It would need to be accompanied by data that 
documents the need for, the appropriateness of, making that 
modification.
    And then you would get comments. So you have a notice of 
proposed rulemaking, and possibly now an advance notice of 
proposed rulemaking, and then the notice of proposed 
rulemaking, and then the comment period, and then the final 
rule, which would repeal the earlier rule.
    Under a different Supreme Court case called Fox News, the 
Supreme Court has said that when you are changing your mind you 
have to (1) acknowledge that you are changing positions, and 
(2) if the previous rule was based on science, engineering, 
technical information, or economic information, you must show 
how that has changed, in what way is it different, why it is 
that you no longer want to rely on the previous rule. Because 
there is new data? Because there is a new approach? Or whatever 
reason, and that explanation has to be part of the reason and 
basis, as it is called, of the new final rule.
    So that is a whole new rulemaking proceeding, which can 
take a year, 2 years, and depending upon the basis for it, the 
assemblage of a lot of information and analysis. I hope that 
was clear.
    Senator Lankford. That is exceptionally helpful, actually. 
Susan, do you want to add anything to that?
    Ms. Dudley. No. That was very clear.
    Senator Lankford. Is it the right process to go through, 
you think?
    Ms. Dudley. Yes.
    Senator Lankford. I would assume that you would say that, 
because there is a great need to be careful. When you change a 
regulatory scheme of things that affects a lot of people, and 
you want to have as much impact as you can. Taking a rule out 
is the same as putting a rule in, and that creates uncertainty 
in the environment, and you have to be able to make sure 
everyone has input through that process.
    Ms. Katzen. I agree completely.
    Senator Lankford. OK. So the question about retrospective 
review really goes back to the question of how do you determine 
whether things are working, and the metrics. I jokingly used 
the term, if there is a high school basketball team that is 
really bad at free throws, and the coach decides every time you 
miss a free throw you are going to take a lap, and that is his 
way to fix it, but a year later they are still not any better 
at free throws. They may be better cardiovascular but their 
free throws are still bad--we did one action to try to fix a 
problem but it did not work. There has to be some metrics at 
some point that have to decide, are we better at free throws on 
this?
    I look at that in the same way with regulations, to say at 
some point we have a goal to say this is what we are trying to 
do, whether it clean the air or safer work environment, more 
consistency, better science. Whatever it may be there is a 
standard for what we are trying to accomplish. I think it is 
reasonable to say 10 years from now we should go back and look 
at it, and say did it actually accomplish that? The hard part 
is developing that metric.
    So my question for you is, the developing the metric 
portion of it, is there any other definition that we need to 
put into this to give to OIRA or to the agencies to say when 
you develop a metric make sure you are thinking about this. Do 
you think what we have put into place, between Senator Sinema 
and I, is broad enough but is also clear enough that it is 
going to lay the groundwork for them to be able to do metrics, 
when you are looking a decade in advance?
    Ms. Dudley. I do think it is so important to be able to 
define clearly what outcome you expect to get from the 
regulation, and a surprisingly limited number of regulations do 
that in a clear way.
    I thought that what you had in the draft made sense. It 
covers the things that people talk about--the outcomes, which 
is general enough to cover a lot of things; benefits costs.
    I would love to take the opportunity to look at it more and 
see if I do have some specific ideas I am in a public policy 
school where a big focus is program evaluation. So some of the 
experts on that are at GW. I would love to talk with them, and 
say, ``OK, does this get you what you would need 5 or 10 years 
down the road, to be able to do that evaluation?''
    Senator Lankford. That would be great. We would be glad to 
be able to have that input.
    Ms. Dudley. OK.
    Senator Lankford. Should I put out a formal request for 
information to be able to get to that?
    Ms. Dudley. An advance notice of a formal--yes.
    Senator Lankford. OK. Thank you.
    Ms. Katzen.
    Ms. Katzen. I agree with Susan on that, and my only caveat 
would be not to be too prescriptive. Ten years is actually a 
long time, given how we learn and how we develop. And we learn 
so much that to try to be specific might be greatly 
counterproductive here.
    Senator Lankford. The hard part is trying to balance. You 
want to be specific enough that you actually know if you get 
there. I will use my free throw example. If the free throw 
percentage does not go up then that method did not work, so 
let's go back and review it because we are trying to get to the 
end method. But general enough that the unknowns that are still 
out there can still be determined.
    I guess what I am trying to say is if you make the metrics 
so vague, anything can hit it. It is not really a metric then. 
It is improved energy in the country. OK, what does that mean? 
So there has to be something specific enough.
    Ms. Katzen. I thought the proposal to include the 
objectives and the metrics at the NPRM stage was beneficial, 
because then those who are affected by the regulation, whether 
they be the regulated entities or the regulatory beneficiaries, 
will be able to comment on that during the comment period and 
lend their insight and their expertise to the agency, so that 
there would be a finite review of those two pieces when it is 
fresh in their minds, when they are still thinking about what 
they are trying to accomplish. I think that should be 
sufficient.
    Senator Lankford. OK. Great.
    Senator Sinema, you have a question as well?
    Senator Sinema. Yes. Thank you, Mr. Chairman.
    For Ms. Katzen, you discussed escape hatches for repeated 
reviews of rules. In the SMART Act we have included a provision 
that allows the agency to create a list of circumstances in 
consultation with the OIRA administrator, which would require 
the performance of a subsequent review.
    Do you think that provision adequately guards against 
unreasonable review requirements?
    Ms. Katzen. I believe so. I think the agency should be the 
responsible official who says we have looked at this, we are 
not going to make any changes, and further review would not be 
very helpful. I mean, I always use the example of airbags or 
seatbelts. Do we want to look at them in 10 years, then 10 
years more, then 10 years more? Well, assuming we do not have 
V2V, assuming we do not have autonomous vehicles--but even with 
autonomous vehicles I want my seatbelt and airbag in the car. 
Why ask the agency to go through that? I think the agency, 
Secretary of the Department or the agency official, is the 
person to be able to say enough is enough.
    Senator Sinema. Regulatory impact analysis documents, which 
accompany regulations, provide wide ranges of estimated costs 
and benefits. The uncertain nature of forecast-based analysis 
hides the true impacts and benefits for rules. So through the 
data collection requirements of the SMART Act, can we expect 
that, over time, agencies will become better positioned to 
accurately forecast both costs and benefits?
    Ms. Dudley. I would hope so. I think one of the most 
important potential outcomes of retrospective review is that it 
is going to make us better at predicting things in future 
regulations. So both thinking about the data and analysis and 
what models we use to make those predictions? They are so 
uncertain and we never go back and check. So I think that is a 
key benefit.
    Ms. Katzen. Agreed.
    Senator Sinema. A final couple of questions. In written 
testimony you discussed a number of rules that would be 
applicable under the Early Participation in Regulations Act, 
and I believe you said 70--is that correct, 70?--but that many 
rules would not benefit from the bill's requirements.
    Could you discuss these rules that would be major but would 
not benefit from an ANPRM?
    Ms. Dudley. Yes, the 70 includes all the independent 
regulatory agencies. If you just look at the Executive Branch 
agencies it is closer to 40 or 50 that would fall under the 
rule.
    One set of rules are hunting bag limits, and there probably 
a half a dozen of those every year. OIRA has long let the 
Department of Interior (DOI) use the same regulatory impact 
analyses that they probably prepared 15 or 20 years ago, as a 
regulatory analysis. That would not be the kind of thing that 
would need any advance notice.
    I would expect, although I am not positive, that a lot of 
the Medicare and Medicaid rules--the regulations that are 
determining what fees different doctors or services should 
receive--again, that is not the kind of thing that advance 
notice might be valuable for. So I can imagine that early on 
OIRA and the agencies would streamline that and identify some 
exemptions.
    Ms. Katzen. I agree with that, and in my testimony I 
mentioned that there are occasions when the congressional 
delegation, which is the basis for any rulemaking, it itself 
highly prescriptive. I am thinking of probably the unregulated 
example of positive train control, which did not give the 
agency any discretion to do anything other than what was 
specified in the statute. That being the case, an advance 
notice of proposed rulemaking would not make a whole lot of 
sense. The agency's hands are tied by its authorizing statute.
    Senator Sinema. Thank you. Thank you, Mr. Chair.
    Senator Lankford. Senator Carper.
    Senator Carper. Thank you both again for your testimony 
today. As I am sure you know, under the Paperwork Reduction Act 
(PRA), the Office of Management and Budget must review and 
approve Federal collections of information before they are, I 
guess, conducted. After reviewing the agency request, the OMB 
may approve or disapprove that request, or can go ahead and 
define conditions that need to be met for approval.
    The OMB is required to ensure that any information 
collection maximizes practical utility and public benefits and 
protects integrity, objectivity, and impartiality of collected 
statistical information.
    Last May, I led a letter with 34 of our colleagues, both in 
the House and the Senate, requesting information from the 
Commerce Department and OIRA as to how they planned to ensure 
that the Paperwork Reduction Act requirements were met with 
respect to the addition of a question on citizenship on the 
2020 Census. That was last May, a year ago. We have not 
received a response to that letter.
    Let me ask, first, if I could, Ms. Katzen, as you know, 
concerns have been raised about adding a question on 
citizenship, due to the potential negative consequences, 
including a lower self-response rate, which would lead to a 
less accurate and more costly Census. I would just ask would 
you please weigh in for us and explain OIRA's role in reviewing 
information collections, and what OIRA should be reviewing with 
respect to the citizenship question and the 2020 Census? Could 
you take a shot at that?
    Ms. Katzen. I will try. Thank you.
    Senator Carper. Thank you.
    Ms. Katzen. Under the Paperwork Reduction Act, any question 
being posed to the public, identical questions to 10 or more 
people, has to receive, in effect, a comment period by the 
agency, and then if the agency decides to go ahead with it, the 
agency will then send it to the OMB, which has a second comment 
period. And as you correctly stated, one of the conditions for 
approval by OMB is to maximize practical utility.
    There is also a requirement to minimize burden. It is a 
modified cost benefit analysis. Are we going to get something 
from this paperwork requirement that will be useful and well 
worth whatever offsetting cost there is?
    Now with the Decennial Census, for 2020, there has been a 
lot of publicity, and I have actually read the three district 
court cases, one of which is 267 pages. So I have some 
knowledge about the specifics of that particular paperwork 
requirement.
    I think the most significant aspect is that the primary 
purpose of the Decennial Census, which is embodied in the 
Constitution--it is the only paperwork requirement embodied in 
the Constitution--is for the enumeration every 10 years. That 
is the primary purpose.
    The addition of a question relating to citizenship is a 
question which, at least pretextually, has been justified by 
assisting the Department of Justice (DOJ) in better enforcing 
voting rights cases. That is a secondary purpose. If the 
secondary purpose is going to have an adverse effect on the 
primary purpose, one would have a very hard time justifying it 
under the Paperwork Reduction Act, because every past Census 
Bureau director, and vast numbers of statisticians, including 
the National Academy of Science, has said that this will 
decrease the response rate significantly for the enumeration 
purposes, and that the data are not needed in the Decennial 
Census because there are alternative places where this data 
reside, in the ACS study and other kinds of statistical 
compilations.
    With that, it is hard to see how the Decennial Census with 
the citizenship question would pass muster under the Paperwork 
Reduction Act. Now there are all sorts of politics, policies, 
whatever, but I was just trying to focus----
    Senator Carper. OK. Good.
    Ms. Katzen [continuing]. On the PRA.
    Senator Carper. Thank you. Mr. Chairman, you have been 
generous with your time. I would like to ask, if I could, for 
the witnesses to each give us like maybe one change, amendment 
that you would suggest to the legislation that Mr. Chairman has 
designed, just one change. And as I said earlier, I never 
introduced a perfect bill, or probably a perfect amendment, and 
as good as these two legislators are, these two Senators are, 
there is probably room for improvement. Can you think of one 
thing that you would suggest that we amend as we take it to 
markup?
    Ms. Dudley.
    Ms. Dudley. Perhaps that the 10-year window for review, it 
provides for one review at 10 years, and then nothing 
thereafter. And that may be appropriate for some types of 
regulations but not for others.
    So I think Sally and I disagree on this. I might like to 
see a continued requirement for that retrospective analysis 
that would continue to measure and continue to observe whether 
we are achieving the desired objective.
    Senator Carper. All right. Thank you. Just one idea, Sally, 
if you would.
    Ms. Katzen. Susan is correct that I disagree with her 
suggestion. I was looking at what was supposed to go in the 
ANPRM, and I came across something which I question its 
utility, and that was in the ANPRM to list the legal authority 
under which a major rule may be proposed. And then the 
following language: ``including whether a rulemaking is 
required by statute, and, if so, whether by a specific date, 
whether the agency has discretion to commence a rulemaking.''
    I can envision circumstances where the discretion is 
reduced with greater incidence of death or harm or safety of 
some sort. I had not really focused on that particular 
language, but I am not sure that, if I were giving you one 
thing that think I might want to change from the latest draft--
which looks very good, indeed--it might be to stop that little 
a iii, whatever it is, little iii sooner.
    Senator Carper. Alright. Thank you.
    For some people, you remember the saying--this is about as 
exciting--talking about an experience in their life--they said 
it was about as exciting as watching wet paint dry. I suspect 
for some people a hearing on this subject is just like that. I 
think it is a terrifically exciting hearing, and I applaud our 
Chair and Ranking Member for bringing us together, and look 
forward to working with you to--what does it say in the 
Constitution?--``We the People of the United States of America, 
in order to form a more perfect union,'' to maybe work with you 
to see if we can form an even more perfect bill. Thank you.
    Senator Lankford. Sure. By the way, my oldest daughter 
graduated and is out and has a real life, and my wife and I 
repainted her sunshine-yellow bedroom into a color where guests 
could actually sleep. I put the initial primer coat on, and put 
the regular coat on, and watched the yellow disappear, and as I 
watched the paint dry I thought, I am standing here watching 
paint dry, and it is exciting. [Laughter.]
    Because I feel like we are getting a room back. So watching 
paint dry is not always bad.
    Senator Carper. Well, hopefully they will come back and 
sleep in these rooms sometime. That sounds like a lot of fun.
    Senator Sinema. I think I would like the yellow.
    Senator Lankford. The sunshine yellow?
    Senator Sinema. Yes.
    Senator Lankford. It was a happy color.
    Senator Sinema. Yes, I would like that.
    Senator Lankford. She loved it, all the way through high 
school. She loved it.
    Senator Lankford. Let me say thank you to both of you. I 
would ask you both two quick questions, and one you can think 
about and send back your ideas, just as a message to say this 
Committee is always interested in your input. So as you have 
good ideas we are always listening. So consider this your 
advance notice of proposed legislating, that we are interested 
in the ideas.
    One is, Ms. Katzen, several times you have mentioned 
surgical changes to the APA. That is what we are trying to do, 
not a massive wholesale shift but surgical changes. If you have 
thoughts on other surgical changes where we need to legislate 
on--we focused today on beginning and end, but if there are 
other areas we are interested, and we are trying to be able to 
work through to try to find ways to be able to help fix the 
process long-term. So that is my homework assignment to you. If 
you think of anything away from here, contact us or our team, 
and we would be glad to be able to hear that.
    The other one is, based on where the text is right now--I 
got your comments from Senator Carper--do you support these 
bills where they are right now, and continue to move forward in 
the process?
    Ms. Dudley. Absolutely.
    Senator Lankford. Yes.
    Ms. Katzen. I would indeed.
    Senator Lankford. Yes. Thank you. Thanks for all your 
input. You have both been exceptionally professional with our 
team in trying to be able to provide some additional input and 
thought. You both have very busy lives on your own. You do not 
work for us, but you do work for the American people still--
that is pretty obvious--of your continuing engagement in policy 
areas. So thanks for continuing to be able to give your time, 
to be able to help the Nation in the future.
    Let me make a quick closing statement and we will shut us 
down. Before we adjourn I do want to announce that on May the 
22 this Subcommittee intends to hold a joint hearing with the 
Senate Small Business and Entrepreneurship Committee to examine 
the disproportionate impact regulations have on small 
businesses. Both of you have dealt with that quite a bit, 
actually, in your time at OIRA. All members of the Homeland 
Security and Governmental Affairs Committee (HSGAC) are invited 
to attend this hearing.
    That concludes today's hearing, though. I do want to thank 
again our witnesses for their testimony. The hearing record 
will remain open for 15 days until the close of business on May 
the 22, for the submission of statements and questions for the 
record.
    This hearing is adjourned.
    [Whereupon, at 11:20 a.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                 [all]