[Senate Hearing 116-62]
[From the U.S. Government Publishing Office]


                                                      S. Hrg. 116-62

FEDERALLY INCURRED COST OF REGULATORY CHANGES AND HOW SUCH CHANGES ARE 
                                  MADE

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON FEDERAL SPENDING
                   OVERSIGHT AND EMERGENCY MANAGEMENT

                                OF THE

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 17, 2019

                               __________

                  Available via http://www.govinfo.gov

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs
                        
                        
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         COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
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
                     Laura W. Kilbride, Chief Clerk
                     Thomas J. Spino, Hearing Clerk

  SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT AND EMERGENCY MANAGEMENT

                     RAND PAUL, Kentucky, Chairman
RICK SCOTT, Florida                  MAGGIE HASSAN, New Hampshire
MICHAEL B. ENZI, Wyoming             KAMALA D. HARRIS, California
JOSH HAWLEY, Missouri                KRYSTEN SINEMA, Arizona
                      Greg McNeill, Staff Director
                  Harlan Geer, Minority Staff Director
                  Allison M. Tinsey, Minority Counsel
                      Kate Kielceski, Chief Clerk
                            
                            
                            
                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Paul.................................................     1
    Senator Hassan...............................................     3
Prepared statement:
    Senator Paul.................................................    23
    Senator Hassan...............................................    25

                               WITNESSES
                        Wednesday, July 17, 2019

James Broughel, Ph.D., Senior Research Fellow, The Mercatus 
  Center, George Mason University................................     4
Thomas A. Berry, Attorney, Pacific Legal Foundation..............     6
Richard W. Parker, Policy Director, Center for Energy and 
  Environmental Law, University of Connecticut School of Law.....     8

                     Alphabetical List of Witnesses

Berry, Thomas A.:
    Testimony....................................................     6
    Prepared statement...........................................    35
Broughel, Ph.D. James:
    Testimony....................................................     4
    Prepared statement...........................................    26
Parker, Richard W.:
    Testimony....................................................     8
    Prepared statement...........................................    49

 
                       FEDERALLY INCURRED COST OF
            REGULATORY CHANGES AND HOW SUCH CHANGES ARE MADE

                              ----------                              


                        WEDNESDAY, JULY 17, 2019

                                 U.S. Senate,      
                        Subcommittee on Federal Spending,  
                    Oversight and Emergency Management,    
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 3:03 p.m. in 
room 342, Dirksen Senate Office Building, Hon. Rand Paul, 
Chairman of the Subcommittee, presiding.
    Present: Senators Paul, Scott, Hawley, and Hassan.

              OPENING STATEMENT OF SENATOR PAUL\1\

    Senator Paul. I call this hearing to order, for the Federal 
Spending Oversight (FSO) Subcommittee. We are glad that you 
came. We are a little bit delayed because we got involved with 
voting, which comes up periodically, and we got that out of the 
way. But we are glad you are here.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Paul appears in the Appendix 
on page 23.
---------------------------------------------------------------------------
    When I think of the Federal Government I kind of think of 
Hal 9000, and the soothing voice. Unfortunately, the soothing 
voice kind of got out of control and there were not any rules, 
there were not any regulations on Hal, or the regulations on 
Hal failed, Hal got out of control, and there was no turning 
back. Government is a little bit that way in that it has sort 
of gotten out of control.
    There has been a great deal of attention that has been paid 
to out-of-control government regulations and how they affect 
the private sector, but today we are going to talk about out-
of-control, overzealous regulations, how these negative affects 
actually effect government, and actually make government more 
expensive.
    This happens in many ways but Congress has and continues to 
create programs and agencies that promulgate regulations to 
implement programs. We often give broad definitions of who gets 
what benefit, leaving it up to the agency to fine-tune the 
regulation. I have often said, when we pass laws we pass 
outlines of laws. A good example is Obamacare. It was 1,500 
pages and there were 1,500 references to, the Secretary of 
Health will, at a later date, decide this. We really did not 
write the law. We wrote a shell of a law and we gave it to the 
regulators and then they write the law. This is too much power 
to give to unelected people who are not responsive to the 
people.
    Where still Congress, though, gives agencies a blank check 
on appropriation, saying, often, such sums as are necessary. We 
have a bill like that on the floor today, on September 11, 2001 
(9/11). They are saying, we have to give them more money and we 
have to give them money through 2092, but we are not sure so 
let us just give them as much as they can possibly spend until 
2092.
    The problem is that without congressional involvement any 
agency can expand the eligibility for a program and, in effect, 
increase government spending on their own, without a proper 
appropriation. Similarly, regulations can be used to alter 
programs and processes to reduce spending, but that does not 
seem to happen very often.
    A flagrant example of a government agency expanding its 
mission and spending billions of dollars without congressional 
approval occurred when the Social Security Administration (SSA) 
expanded the disabled population to include those who were 
obese.
    Also in the 1970s, disability insurance was extended to 
those who do not speak English. Really? It is a disability that 
requires a government program if you fail to speak English? We 
did not vote on that. Congress did not make it a disability. 
The agency did, and inevitably that added thousands and 
thousands of people to the disability rolls. Disability now 
consumes about 17 percent of the Social Security money. The 
Social Security Administration is $7 trillion in the hole, but 
we did not even decide to make obese people disabled. Some 
bureaucrat did.
    Both of these expansions have been curtailed a little bit 
and rolled back, and I agree with the reforms but we still 
should do more. Whatever side you come down on, though, this 
causes government spending without Congress appropriating the 
money. Certainly such things were not envisioned when the 
disability program was created.
    Administrations publish some of the budgetary impact of 
regulation but those are buried deep in the President's 
budgets. We have looked at this and have found that during the 
past three administrations--Trump, Obama, and Bush--there have 
been billions of dollars in Federal spending changes that have 
resulted from regulatory changes. I am told this might not even 
show the full scope of the regulatory spending.
    It is also a question of checks and balances in two 
regards. First, Congress makes laws, and while we generally 
recognize that the Executive will make certain regulations to 
execute those laws, what constraints exist to prevent 
regulation above and beyond the intent of Congress?
    Second, the Constitution reserves the right of 
appropriation to Congress. I believe we are failing in our 
duties when we appropriate such sums as are necessary. But 
Congress does this often, so what kind of checks and balances 
exist, or should exist? This is one of the questions this 
hearing will address.
    The Congressional Review Act (CRA), which is, in itself, an 
insufficient check, does allow Congress to disapprove of 
significant regulation. However, many regulations fly under 
Congress' radar and do not get reviewed. I think before this 
Administration we had actually never--we might have, one time 
before this, actually used the Congressional Review Act to 
reverse regulations. It has been rarely used and this 
Administration, only when we got all three branches of 
government, were we finally able to repeal some regulations. 
Previously, divided government had never done so, or a 
government inside of the opposition party.
    The only other check I know of is the advise and consent 
powers over nominees. At a minimum, Senators can question and 
get commitments from would-be regulators as to how they will 
execute their regulatory authority and hold them accountable. 
However, recent research indicates that an alarming number of 
regulations are finalized by career employees that are not 
confirmed by the Senate.
    In other words, it appears that unelected career 
bureaucrats who enjoy civil service protections have the 
capacity to make what amount to laws and appropriate funds 
without any real accountability by Congress. That should 
trouble, certainly, Members of Congress, but more importantly, 
the Americans they represent.
    With that I would like to recognize the Ranking Member, 
Senator Hassan.

             OPENING STATEMENT OF SENATOR HASSAN\1\

    Senator Hassan. Thank you, Mr. Chairman, and good afternoon 
to our witnesses, and thank you for your patience as we went 
through three remarkably slow votes. I also want to thank the 
Chairman and say how much I appreciate your work, Mr. Chairmna, 
and your staff's work on this hearing. I also want to thank the 
witnesses for being here today, to provide their expertise on 
these issues.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Hassan appears in the 
Appendix on page 25.
---------------------------------------------------------------------------
    As members of the Federal Spending Oversight Subcommittee, 
we have an obligation to examine all Federal spending in order 
to ensure that taxpayer dollars are used efficiently and 
effectively. Today's hearing focuses on how regulations drive 
Federal spending and how accountability within the regulatory 
process may prevent unnecessary or even wasteful spending.
    I have long supported eliminating outdated and burdensome 
regulations that stymie economic growth and innovation, and I 
would be glad, Mr. Chairman, to work with you on that.
    At the same time, I also believe that government's first 
job is to keep the people who we serve safe. Many regulations 
are intended to protect Americans from harmful products, 
infectious diseases, and financial exploitation. As we work to 
both foster innovation and also to protect the American people, 
today's hearing reminds us that we need to account for the 
costs of establishing any common-sense safeguards as well as 
the costs of failing to provide adequate protections.
    Keeping track of regulatory-driven spending must involve 
strong congressional oversight, robust input from non-Federal 
stakeholders, and a thorough judicial review process. I look 
forward to hearing from our witnesses today about the adequacy 
of the checks and safeguards that exist to cut unnecessary or 
unlawful regulatory spending.
    Most importantly, I hope our witnesses can help us identify 
ways to continue to improve this process in order to safeguard 
taxpayer dollars while ensuring basic protections of public 
safety and the quality of life that Americans hold dear.
    Thank you again, Mr. Chairman, for holding this hearing, 
and to the witnesses, thank you for your attendance. I look 
forward to hearing from you. Mr. Chair.
    Senator Paul. Thank you. Our first witness is Dr. James 
Broughel. Dr. Broughel is a senior research fellow with the 
Mercatus Center at George Mason University. He has authored 
numerous policy briefs and reports on regulatory issues. His 
works have appeared in Harvard Journal of Law and Public 
Policy, the European Journal of Risk Regulation, and the 
Washington Post, among other outlets.
    Dr. Broughel holds a BA and a master's degree, both in 
economics, from City College of New York, and a PhD in 
economics from George Mason University.
    Dr. Broughel, you are recognized for your opening 
statement.

TESTIMONY OF JAMES BROUGHEL, PH.D.,\1\ SENIOR RESEARCH FELLOW, 
          THE MERCATUS CENTER, GEORGE MASON UNIVERSITY

    Mr. Broughel. Thank you, Chairman Paul, Ranking Member 
Hassan. It is great to be here with you today. Thank you for 
allowing me to offer this testimony on the cost of Federal 
regulations as it pertains to the Federal Government and the 
taxpayers.
---------------------------------------------------------------------------
    \1\ The prepared statement of Dr. Broughel appears in the Appendix 
on page 26.
---------------------------------------------------------------------------
    My message today is simple. Much of what constitutes 
Federal policy is on autopilot. By this I mean, many government 
programs, including the amount of money spent on them, operate 
largely outside the annual appropriations process and the 
active management of legislators in Congress.
    Now the true cost of leaving so many important policy 
decisions on autopilot remains largely unknown, but estimates 
of automatic mandatory spending and the total cost of Federal 
regulations are in the trillions annually. A simple reform 
could begin to shed light on some of these costs. Require the 
Congressional Budget Office (CBO) to analyze the fiscal effects 
of regulations. CBO could start with so-called budget 
regulations which primarily impact the Federal Government's 
budget.
    Now as background, in 1969, 29 percent of Federal outlays 
consisted of mandatory spending, which does not require the 
same active management from legislators because it does not 
typically require an annual appropriation from Congress. By 
2018, that number had risen to 61 percent, so from 29 percent 
to 61 percent. CBO projects that this will rise to 65 percent 
by 2029. In other words, a huge fraction of Federal spending is 
on autopilot, and this trend is getting worse over time.
    Credible estimates put the annual cost of Federal 
regulation in the trillions. One estimate produced by the 
Mercatus Center is that the cumulative cost of Federal 
regulation was $4 trillion in 2012 alone. By comparison, total 
Federal outlays in 2018 were around $4.1 trillion. The costs of 
regulation are an invisible cost that does not receive an 
annual appropriation from Congress.
    Now although much of Federal spending is not discretionary 
from the perspective of Congress, because it is mandatory, some 
mandatory spending is discretionary from the perspective of 
regulators. That is because some appropriations decisions are 
made by unelected regulators in the Executive Branch.
    For example, budget regulations are rules whose primary 
impact is on the Federal Government's budget. These rules can 
come in a variety of forms. They might set physician fees for 
the Medicare program, counselor service fees, or broaden or 
narrow eligibility standards for agricultural disaster relief, 
to name just a few examples.
    The Office of Management and Budget (OMB) estimates that 
major budget regulations in fiscal year (FY) 2016 imposed a net 
budgetary cost of about $5 billion that year. That may not 
sound like much money compared to the massive Federal budget, 
but this cost estimate comes from just 27 regulations. By 
comparison, roughly 3,000 to 4,000 final regulations are 
published in the Federal Register each year, so the OMB's cost 
estimate is very incomplete.
    Regulations other than budget regulations also impact the 
Federal Government's finances, as any regulation that allows or 
restricts economic activity will have some kind of impact on 
tax collection. Now one reason we do not have more information 
about the budgetary costs of Federal regulations is because the 
quality of the Federal agency regulatory analysis tends to be 
quite poor, especially for budget regulations.
    The Mercatus Center has conducted analysis of the quality 
of regulatory impact analyses, using a regulatory scorecard 
system, and a key finding from that project was that budget 
regulations have significantly lower quality analysis than 
other economically significant regulations.
    A first step toward addressing these regulatory costs on 
autopilot is to task an agency, like CBO, with reviewing the 
fiscal impacts of regulations. CBO has a few specific 
advantages that make it well poised to take on this task. First 
is independence. Unlike regulatory agencies, which are run by 
political personnel with specific policy agendas they enter 
office looking to implement, CBO does not have an obvious stake 
in the outcome of regulations.
    Experience--since the mid 1970s, CBO has analyzed the 
fiscal impacts of legislation. They could do the same for 
regulations, which may be even easier to analyze as they are 
simpler. Democratic accountability--CBO is part of the 
Legislative Branch, which has direct accountability to voters.
    To conclude, with more transparency about the budgetary 
impacts of regulations, the true costs of having so much of the 
government on autopilot could begin to reveal themselves.
    Thank you for granting me the opportunity to speak today 
and I am happy to answer any questions you may have.
    Senator Paul. Thank you, Dr. Broughel. Our next witness is 
Thomas Berry. Mr. Berry is an attorney in the Pacific Legal 
Foundation's (PLF) D.C. Center. Prior to joining the 
Foundation, Mr. Berry was a legal associate in the Cato 
Institute's Center for Constitutional Studies. Mr. Berry is the 
co-author of the Pacific Legal Foundation's report analyzing 
the rulemaking process at the Department of Health and Human 
Services (HHS).
    Mr. Berry holds a bachelor's degree from St. John's College 
and a JD from Stanford Law School.
    Mr. Berry, your opening statement.

   TESTIMONY OF THOMAS A. BERRY,\1\ ATTORNEY, PACIFIC LEGAL 
                           FOUNDATION

    Mr. Berry. Thank you, Chairman Paul and Ranking Member 
Hassan, for inviting me today to testify on rulemaking by 
unaccountable agency bureaucrats. Today I will make three 
points. First, this rulemaking practice has weakened the 
separation of powers and harmed political accountability. 
Second, this practice is rampant, including 98 percent of the 
Food and Drug Administration (FDA) rules. And third, this 
rulemaking is unconstitutional. I will conclude with potential 
solutions.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Berry appears in the Appendix on 
page 35.
---------------------------------------------------------------------------
    When Senators, like you and your colleagues, question 
nominees for agency leadership, you are well aware of the 
rulemaking power that those positions hold. For example, when 
Robert Califf was questioned at his 2015 confirmation hearing 
for FDA commissioner, he received several questions on what 
rulemaking judgments he might make if confirmed. Why, then, 
were the vast majority of rulemaking decisions during his 
tenure made not by Califf but by a low-ranking FDA employee who 
had never been nominated by the President or confirmed by the 
Senate, an employee who had been hired years before Califf and 
would stay on well after?
    In such a system, the decisions this body makes to confirm 
or reject any nominee simply do not guarantee any effect on the 
rulemaking judgments made within an agency. Similarly, the 
President has never nominated, nor is he expected to even know 
of these low-ranking career bureaucrats. When rulemaking 
decisions are made by low-level employees, those rules are 
deprived of any ability to be traced back to the top and the 
people are thus deprived of democratic accountability in those 
rules.
    This type of rulemaking has become rampant. The following 
numbers come from a recent first-of-its-kind study for the 
Pacific Legal Foundation that I co-authored with Angela C. 
Erickson. We collected all final rules from the Department of 
HHS going back to 2001, and the result was that 71 percent of 
these rules were signed by non-Senate-confirmed employees--that 
is nearly 2,100 rules--and within FDA it was 98 percent. This 
is not limited to minor rules like typo fixes. We omitted rules 
with small changes like technical corrections, and found that 
still 1,300 substantive rules were signed by non-Senate-
confirmed employees. That is 63 percent. Looking only at rules 
deemed significant by the Office of Management and Budget, over 
250 such rules signed by non-Senate-confirmed employees, or 34 
percent. Those are rules with combined economic effects in the 
billions of dollars.
    Finally, the constitutionality of this. The Supreme Court 
has explicitly held that the power to issue a final rule is an 
authority that can only be held by a duly appointed officer of 
the United States. The Constitution divided officers into two 
categories--principal and inferior--and the key difference 
between those two categories is that principal officers must be 
confirmed by the Senate before taking office, without 
exception. The Supreme Court has held that to be an inferior 
officer your work must be directed and supervised by a Senate-
confirmed superior. In the absence of such supervision, Senate 
confirmation becomes a constitutional requirement.
    The ability to issue a final rule without the approval of a 
superior means that such supervision is absent, and contrary to 
Professor Parker's testimony, the FDA has essentially conceded 
that for many rules that supervision is absent. That is why 
rules can only be issued by officers confirmed by the Senate. 
Rules issued in any other way are unconstitutional.
    The bottom line is this. In just one department, thousands 
of rules have been issued, and continued to be issued by career 
employees who have no accountability, to the Senate or to the 
people, which subverts the system our framers designed.
    Now potential solutions. The simplest would be a short bill 
requiring that every rule published in the Federal Register 
must be signed by a Senate-confirmed officer. Short of this 
sweeping solution, the individual organizational statutes for 
each department should be amended so that sub-delegating 
rulemaking authority is no longer permissible unless to a 
Senate-confirmed officer.
    Congress can further bring attention to this matter through 
oversight, and hearings such as this can help encourage the 
Executive Branch to alter its rulemaking practices. Since some 
delegation is always made at the discretion of higher-ranking 
officers, the Senate can question nominees for agency 
leadership on this practice and ensure they commit not to sub-
delegate rulemaking power below the level of Senate-confirmed 
officers.
    As the body charged by the framers with vetting the 
character and judgment of Executive Branch officers, it is 
natural that the Senate would take a leading role in reining 
back this abusive end run around that system. Congress has 
several options at its disposal to restore the balance our 
framers designed and ensure that every rule binding on the 
public is made by a politically accountable officer.
    Thank you again for allowing me to testify today and I look 
forward to your questions.
    Senator Paul. Thank you, Mr. Berry, for you testimony.
    Our last witness today is Richard Parker. Professor Parker 
is a tenured professor at the University of Connecticut Law 
School. He teaches and writes in the fields of administrative 
and international environmental law. Mr. Parker serves on the 
Council of the American Bar Association's Administrative Law 
Section, where he chairs the Committee on Collaborative 
Governance and co-chairs the Committee on Environment and 
Natural Resources.
    Professor Parker holds a bachelor's degree in public and 
international affairs from Princeton, a JD from Yale, and he 
received a doctorate of philosophy in politics from Oxford 
University, which he attended as a Rhodes Scholar.
    Professor Parker, your opening statement.

TESTIMONY OF RICHARD W. PARKER,\1\ POLICY DIRECTOR, CENTER FOR 
ENERGY AND ENVIRONMENTAL LAW, UNIVERSITY OF CONNECTICUT SCHOOL 
                             OF LAW

    Mr. Parker. Thank you, Mr. Chairman, Ranking Member Hassan, 
Members of the Subcommittee. Thank you for giving me this 
opportunity to testify today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Parker appears in the Appendix on 
page 49.
---------------------------------------------------------------------------
    As an academic I am not required to espouse any particular 
point of view, but my recent research has focused on reviewing 
the claims of advocates of deregulation, like those you have 
heard from today.
    I have reviewed, with particular interest, the Pacific 
Legal Foundation report, which I understand inspired this 
hearing. That report tells a story of unaccountable civil 
servants imposing exorbitant costs on the public through 
unconstitutional procedures. For reasons I will explain, I do 
not share that dark view of how things work in government, and 
I would like to explain why not.
    To begin with, the report cites a recent study by the 
Mercatus Center, which Mr. Broughel mentioned earlier today, 
which alleges that Federal regulations are costing the U.S. 
economy $4 trillion per year. This exorbitant cost is cited as 
evidence of a regulatory State run amok that needs to be reined 
in.
    What you need to understand is that that figures comes from 
a single, unpublished study that derives its estimate not by 
actually measuring the cost of regulation but by constructing a 
hypothetical model of the economy which basically assumes what 
it ought to prove, that regulations always reduce growth, never 
promote growth, by, for example, keeping workers healthy, or 
avoiding market meltdowns that cause things like the 2008 
recession.
    Obviously, you can prove pretty much anything you want if 
you construct a hypothetical model that builds your conclusions 
into the premises of the model. I suggest we begin by setting 
that $4 trillion regulatory cost estimate to one side.
    I then want to turn to the claim that the agencies are 
issuing all matter of unconstitutional rules, because, as you 
have just heard, they appear in the Federal Register over the 
signature of senior civil servants and not political 
appointees. This is a very novel and creative argument, but in 
my judgment it reads way too much into the name appearing at 
the end of the rule while ignoring how the administrative 
process actually works.
    What I would like to suggest is that what matters to 
accountability in the rulemaking process is not who signs the 
rule but who signs off on the rule, and who is accountable for 
the rule and responsible for that rule before it can be issued.
    Let us just take, as an example, the FDA rule to regulate 
vaping, which the PLF report uses as its prime example. That 
rule was, indeed, signed by Leslie Kux, a very senior and very 
capable civil servant. But what the PLF neglects to mention is 
that before the rule was issued it was reviewed multiple times 
by the Food and Drug Commissioner himself. In fact, I spoke 
with the FDA Commissioner who dealt with this rule, Dr. Robert 
Califf, by phone the other day, and he told me there were 
probably a dozen or so meetings in which he personally reviewed 
the vaping rule, or aspects of the vaping rule, and grappled 
with issues surround it. Her personally signed off on issuing 
it.
    The rule then went to the HHS Secretary, who also 
personally reviewed the rule, and he had several meetings on 
the rule over the course of the rulemaking, with the Secretary, 
he tells me. The rule was then approved by the Office of 
Information and Regulatory Affairs (OIRA) in the White House, 
which is an OMB office that is again led by an appointed civil 
servant. Only after clearing these multiple levels of review by 
political appointees was the rule issued over the signature of 
Leslie Kux, career civil servant.
    The point is that at the FDA and across government civil 
servants may have their name appear at the end of the rule, but 
any significant rule goes out if, and only if, their political 
overseers review and approve it. These overseers are 
accountable to Congress, to the President, and ultimately the 
taxpayers. The buck stops with them. The signature appearing at 
the end of the rule is, in my view, really beside the point.
    The last thing I want to address is the worry that agency 
regulations are issuing forth under old delegations of 
authority that are broadly worded. Is this a bad thing? I do 
not think so, and let me offer you just a simple example to 
illustrate what I mean.
    The Public Health Service Act, first passed in 1944, 
authorizes the detention and quarantine of, ``any individual 
reasonably believed to be infected with a communicable disease 
in a qualifying stage.'' No one had heard of Ebola when this 
act was passed in 1944, but Ebola came along, and the question 
is, should the Center for Disease Control (CDC) have been 
required to go back to Congress and get a specific statutory 
authorization to address Ebola before responding to it? 
Clearly, no. They did the right thing by using the broad 
authority delegated to them in real time.
    The problem is that most modern regulations, whether they 
take the form of regulation governing the conferring benefits 
kind, the regulation of procedures, are highly technical and 
complex, and those circumstances just do not favor 
congressional micromanagement of rulemaking. Agencies need 
broad delegations of authority to develop sensible regulation, 
and Congress does have tools to rein them in, through the 
appropriations process, through the oversight process, and 
through simple lawmaking as well as the Congressional Review 
Act, if they overstep their market.
    I will leave it at that and I will be happy to address 
further questions in the question-and-answer period, if you are 
so inclined. Thank you.
    Senator Paul. Great. Thanks for your testimony.
    I think in some ways, whether or not it is a Senate-
approved person who signed off on it or a low-level thing is 
not as big a problem as that we have to either agree or 
disagree, do we have too much of an unelected bureaucracy 
writing rules. I think our Founding Fathers never imagined an 
enormous bureaucracy with millions of people in it. When they 
talked about the non-delegation doctrine, the idea that you 
cannot give away your powers. Even if you want to, Congress is 
not allowed to.
    I do not think we adhere to that nearly as strictly as our 
Founding Fathers intended us to, and I think it is kind of hard 
to make the argument that there is not an overzealous nature to 
regulation when they are telling us how many cherries need to 
be in a cherry pie. I just think probably no one is going to be 
losing their life whether there are 42 cherries or 41 cherries, 
and probably we could list 10,000 examples like that as you 
look through government.
    I think there is a problem. The pendulum has gone way too 
far. I would love to go all the way back to where government 
was intended, but we may not get there. But for certain I think 
part of the hearing, and I think what should come forward here, 
is that the pendulum swung way too far in the direction of 
having unelected people make these decisions, often making 
decisions that could lead to $100 million worth of costs, major 
regulations for the economy, but not only for the economy but 
for the government.
    I am not so sure I agree with, if we confirmed everybody, I 
have been here--it is hard to get to know all the nominees. It 
is hard enough just confirming the ones we confirm, to get 
validity to what the people are actually telling you. Most of 
the time you ask them to make a judgment, if they want to be 
head of the FDA, and they will say, ``Well, I cannot comment on 
anything that is going to come before my committee.'' Same way 
the Supreme Court works, so it is very difficult.
    What I would say is that the one thing that tends to work 
when you have people on both sides of things, that tends to 
find justice, is when you have advocates in the judicial 
system. There is an attorney for the defense, an attorney for 
the State, and the prosecution, and they battle, and we get a 
version of the truth by what comes forward.
    One of the things I think would actually work is if we had 
a taxpayer advocate involved with regulation, or if we talked 
about the mandate. For example, the Fed has a mandate for price 
stability and employment. People always debate, what if we 
changed their mandate? What if we changed the mandate for 
regulators that it is not just to regulate but it is to 
regulate and, how we talked about some of these other ideas, 
that the cost would have to be part of it? I do not know if 
that is even part of their mandate.
    I can tell you, as a physician, that over a 20-year career, 
day after day, year after year, there are always new 
regulations added. I cannot point to almost any of them that 
help with quality. Almost all of them are pushing paper. In 
fact, I think there is so much paper to push that it might 
distract you from actually missing something that you should 
not miss because you are not paying attention to the patient. 
Never does the Joint Hospital Association come and say, ``You 
know what? We have gone too far, and this year we are going to 
take away a regulation.''
    This is the nature of the beast. Government gets bigger and 
bigger and bigger because nobody ever takes away from it. I 
have been an advocate and we put this forward. I think Senator 
Johnson and other people have put it forward. Repeal two for 
every one you add. Just force people to look and they would be, 
oh, that would be terrible. It would be so indiscriminate. You 
would get rid of something that is going to save people's 
lives.
    We have hundreds of thousands of regulations. We have 
stupid ones, like how many cherries are in the cherry pie. For 
goodness sakes, let us review all of these things. I think the 
idea that we are too stupid to be involved with regulations, 
and that the scientists and the regulators know better than us, 
they are not responsive to people, and they hear one side. I 
think it is a one-sided debate. I really think we do need a 
taxpayer advocate.
    The same goes for all of these things. The National Science 
Foundation (NSF), we print something probably once a week on 
crazy research. Are Japanese quail more sexually promiscuous on 
cocaine? Are people more or less likely to eat food if the 
person in front of them in the cafeteria line sneezes on the 
food? Two million bucks from the National Institute of Health 
(NIH). The one for the Japanese quail, $300,000. People say, 
``Well, Congress, you are not smart enough to decide who gets a 
grant.'' I think exactly the opposite.
    What I would do for all the grant processes for scientists 
is if it is behavioral science I would make sure that every 
committee has someone representing the diabetes community of 
science, the cardiothoracic, the Alzheimer's, the cancer. I 
would have all of those on every committee, and I would have a 
taxpayer advocate. Right now, if you want a behavioral science, 
where is a lot of the crummy research comes from, the people 
reviewing it are the people who will then review you--they 
review you, you review them the next time. It is a small group 
of people all in the same field and the taxpayer is never 
really represented.
    That is the way I feel for regulations as well. Maybe if we 
had an adversarial thing where there was an advocate for the 
marketplace, an advocate for arguing what is the cost of this 
regulation, should we do it?
    But, Mr. Berry, what do you think of that idea? I am not 
saying I would vote against confirming more people. I am just 
not sure it gets to the point. But whether or not we actually 
got someone into the process who is an advocate, or maybe 
change the mandate of what we tell regulators to do.
    Mr. Berry. That seems like a very promising idea to me. It 
is sort of the first time I have heard of something like that. 
I think the key point is that, as you said, the Legislative 
Branch is not underequipped to sort of deal with these issues 
of lack of expertise that a lot of people often bring up. I 
think, in many cases, those blur the lines between advice and 
helping drafting versus final decisionmaking.
    The system that was set up is that 535, yes, generalists in 
the legislature, who are not necessarily experts on quail or 
anything like this, would take in advice from many sides, 
including--I think it is a great idea to take in advice from a 
taxpayer advocate, and would synthesize those and ultimately 
come to a decision that synthesizes those. I would analogize it 
to Senate-confirmed judges, who are generalists, who are not 
experts in necessarily the medical issues that come before them 
in malpractice cases, but who we rely on to make the final 
decision based on the credibility of the experts that come 
before them.
    I want to emphasize that our proposal, and I think your 
proposal also, does not say we should kick all the experts out 
of Washington. It simply says we should not allow them to have 
final decisionmaking authority that does an end run around the 
only people who are politically accountable.
    Senator Paul. You could even call the advocate that judges 
on grants or something to be a lay scientific graduate, someone 
with a science degree that comes from a lay perspective, as a 
generalist. But we have go to have more, because this stuff has 
been going on since the time of Proxmire. He complained about 
waste, there was a study of $50,000 try to study what makes 
people happy, and he made such fun of it in 1972. It is still 
going on. None of that has improved an iota since 1972, and it 
really because we give them more money, and the will not ever 
conserve their money, or spend it more wisely until they have 
less of it.
    Dr. Broughel, do you want to comment on the thoughts of 
either a taxpayer advocate or a lay advocate, and also, do you 
think it is enough--you talked about having some reporting 
requirements, which I think might help, but I just wonder if it 
is enough to actually transform the situation.
    Mr. Broughel. When the Administrative Procedure Act (APA) 
was passed in 1946 it actually created two procedures for 
creating regulations. One is the way that we are used to--
notice-and-comment rulemaking, agencies propose a rule, take 
comments from the public, and finalize them. Another is called 
formal rulemaking, which is actually not used very often but 
could be used, and it would establish trial-like procedures for 
regulations, where an agency would have to present its case, 
provide evidence, and provide witnesses. Those witnesses could 
be cross-examined, and someone like a taxpayer advocate----
    Senator Paul. Are you saying some of that exists already?
    Mr. Broughel. It is part of the Administrative Procedure 
Act. It is called formal rulemaking. It is just that it is 
rarely used.
    Senator Paul. Is it ever used in that fashion?
    Mr. Broughel. There are some specific agencies, like the 
Environmental Protection Agency (EPA) and Occupational Safety 
and Health Administration (OSHA), that use it in some cases, 
but as a general matter it is not used very often.
    Senator Paul. This is, I guess, my point, is that you get 
one side. The people appointed who want to become regulators 
want to regulate.
    Mr. Broughel. Right.
    Senator Paul. They do not become a regulator because they 
think the marketplace would handle this better. They already 
have the predisposition to thinking regulations work. Maybe if 
you had more of an adversarial process you would get market 
advocates saying, it may work but you may no longer have an 
industry, and talk about the ramifications of something in 
advance.
    It is how you find truth. How do we find truth? I have 
facts on my side. Senator Hassan is going to have facts and 
opinion on her side. How do we find truth? By discussing it and 
then finally letting somebody vote on it.
    But, no, that is good. Did you have a further point you 
wanted to make?
    Mr. Broughel. I would just say anyone who has submitted a 
comment to an agency, as part of the notice-and-comment 
process, knows it is very easy for them to dismiss you if they 
want to. As a general rule, it seems like they have made up 
their minds often before they have even proposed a regulation. 
It is very hard to see regulations change. It is hard for just 
a member of the general public to make a difference. If there 
was more of an adversarial process that could make it more 
possible.
    Senator Paul. Senator Hassan?
    Senator Hassan. Thank you, and I see that Mr. Parker would 
like to respond to a couple of these things, but if I could ask 
a couple of questions first, Mr. Parker, and then I think we 
will have the opportunity for discussion.
    I do want to point out that there is a significant 
regulatory process that some might argue is significantly more 
transparent than the process Congress uses to make laws. There 
are comments that come in on regulations, supporting, for 
instance, net neutrality, but Congress went ahead and overruled 
those comments and withdrew the net neutrality regulation. I am 
not sure that all of the problems here rest with the regulatory 
process.
    I want to start with a couple of questions to Mr. Parker, 
because I believe sometimes it is necessary and appropriate for 
agencies to update their rules to reflect new information or 
other changes that come to light from the outside world.
    Mr. Parker, could you provide an example--you talked about 
Ebola--of how agencies have updated their rules within their 
existing statutory authority to address current issues that 
have emerged?
    Mr. Parker. Sure. I think if you go through that Code of 
Federal Regulations (CFR) you will find that the vast majority 
of rules that are issued are either very minor rules, like 
rules having to do with opening and closing of the quail 
season, or drawbridge times, or else they are revisions to 
prior rules. They are updated all the time. They are modified 
all the time. It is very cumbersome to modify them, actually, 
because of the notice-and-comment rulemaking process and 
analytical requirements that have been imposed on it.
    Whether it is emissions standards for vinyl chloride, or 
whether it is eligibility standards for a benefits program, you 
will find that rules modify rules all the time. The only way 
that any rule can be modified is by issuing another rule. 
People need to understand that. When you talk about 3,000 or 
4,000 rules issued a day, a year, many of them are rules that 
just changed other rules, and make them better, in response to 
comment from the public and problems raised by the public.
    Senator Hassan. OK. That is helpful. Following that point, 
I think it is important to acknowledge the agencies do work 
that Congress cannot, namely crafting policies with a level of 
expertise that is outside the scope of what we do on the Hill, 
and reacting to emerging threats to health and safety.
    In many circumstances the benefits of regulations outweigh 
the costs. Can you just give us an example or two--you started 
to--on the benefits, Mr. Parker, of agency rulemaking to the 
American people?
    Mr. Parker. I think to understand the benefits of 
rulemaking to the American people you have to go back to what 
the world looked like, and what the United States looked like 
before the expansion of the administrative state really began 
in earnest. President Trump made news by saying he wanted to 
return the Code of Federal Regulations to the size that it was 
in 1960, when it was about one-tenth the size that it is now. 
Well, in 1960, EPA did not exist. The Occupational Safety and 
Health Administration did not exist. The air was so filthy that 
killer smogs were killing people in a matter of days and weeks, 
months and years. The Cuyahoga River was so polluted it caught 
on fire in 1969 and helped inspire the Clean Water Act of 1972.
    Regulations have had a huge impact in promoting health, 
safety, and protecting the environment. Yes, they are complex, 
but they have accomplished an awful lot.
    Let me just say that there is a tendency to think of 
agencies as the sort of ``father knows best'' or ``mother knows 
best,'' the know-it-all experts. In my experience, working with 
agencies--and in my consulting capacity I have actually led 
rulemaking exercises for agencies, negotiated rulemaking 
exercises--what I have found is that agencies do not have the 
expertise to make good rules in these complex areas, like vinyl 
chloride standards or auto safety standards. They rely on 
industry, and they work collaborative with industry to get the 
information that they need. Industry is very much consulted, 
throughout the rulemaking process, and it is just not true that 
industry and the regulated community have no say in how the 
rule reads.
    In fact, what I teach in administrative law is case after 
case where the agency ignored an agency comment and then was 
then reversed for failing to do that. One classic example is a 
case involving the regulation of smoked whitefish, the Nova 
Scotia case, where an agency did issue a bad rule. They did not 
take into account the industry comments. When the case came to 
court, the court said, ``You did not respond to the comments. 
You did not listen to this industry. This rule is arbitrary and 
capricious,'' and the court throws it out.
    Agencies worry about that, and as a result they do listen, 
and that is one of the things that makes them--we always say 
that agencies are not accountable and Congress is, but this 
fear of judicial review, this fear of judicial oversight is a 
real check on agency powers that makes them, that forces them 
to listen to industry when the speak, and to other stakeholders 
when they speak.
    Senator Hassan. OK. Thank you for that, as well.
    I wanted to touch on one more thing before my times is up, 
and then we can move back to the Chairman. I think we should 
also acknowledge Congress' role in holding agencies accountable 
to the statutes we enact, and we have several ways of doing 
that. With that in mind, I would like to turn, Mr. Parker, to 
the Pacific Legal Foundation's article on the role of career 
civil servants at the Food and Drug Administration in the 
rulemaking process.
    I have profound respect for Federal employees and the work 
that they do, but I agree that it is imperative that we have 
accountability in the rulemaking process, and you just talked 
about the judicial oversight providing part of that. What role 
would a career civil servant, rather than a political 
appointee, serve in that process? Why might a career civil 
servant's name ultimately end up on the final rule?
    Mr. Parker. That is a great question, and I actually asked 
that question of Commissioner Califf when I talked to him on 
the phone, and he said, ``Well, there is a sort of tradition of 
putting the name at the bottom.'' I think of it as something 
like the person who packs the parachute has to jump with their 
own parachute every so often. It is a way of saying this is the 
person who was responsible for coordinating this rule and for 
putting it together. It is the Associate Commissioner for 
Policy--that has been the tradition. It is a way of sort of 
honoring them, recognizing them, holding them accountable.
    I do not think it is meant to say that it is their 
authority which authorizes the rule. It is not to say that they 
were solely responsible for issuing that rule. This is an FDA 
rule that goes out and it has to be reviewed and approved by 
the FDA, and the FDA political appointees and the FDA itself is 
responsible for every single rule that they issue.
    Senator Hassan. OK. Thank you very much, Mr. Chairman.
    Senator Paul. I agree with Senator Hassan that a lot of the 
problem--there is congressional responsibility that we have 
abdicated, so ultimately it is our fault. We do not do our job, 
and particularly with writing legislation. The legislation is 
very loose and then people are surprised. Oh, my goodness, they 
are doing this and we had no idea that we even gave them power 
to do this.
    It happens not just in environmental regulations. It 
happens in regulations of your privacy as well. For example, 
when the Patriot Act passed, James Sensenbrenner, in the House, 
was a big advocate for it and one of the authors of it, and 
pretty much thought it was a good thing. Then when, all of a 
sudden, Snowden revealed that billions of people were having 
their phone calls recorded by the government under the pretense 
of that he says, ``No. That is not what we intended at all.''
    Not only that, the intelligence community (IC) at that time 
really closed its ranks, and really probably even bigger and 
worse than all of the sort of business and environmental 
regulations are the things that happen in our intelligence 
community that no rank-and-file Senator is ever told about.
    I think there is a great abuse of congressional authority, 
but once again, we could write stricter rules and we could do 
it. In the end, what happens and what comes forward is 
Congressmen are lazy and they say, ``Oh, it is to fight 
terrorism, so you do not care about civil liberties. We are 
going to fight terrorism,'' so everything just flows on and it 
gets worse and worse.
    Examples of how people get kind of crazy crossways with 
regulations, there was another one in our State. We had a lake 
where the earthen dam was possibly going to fail, so we decided 
to repair it, and they dropped the lake by 40 feet. Some 
enterprising environmentalists went into the area where the 
lake was lowered and, lo and behold, they found some dusky 
darters there. They then hypothesized that if we put the lake 
water back in the lake we might hurt the dusky darter.
    The government created the lakes and we had a big fight 
over the government taking property in the 1930s, but we kind 
of decided that one, it is over. We have a lake. Now we have 
these marinas. The environmentalists are saying, ``Oh, you 
cannot fill the lake back up because you might hurt the dusky 
darter,'' to which I responded, ``Well, don't they live in 
water? Won't they like more water?''
    You can see the craziness that you can kind of get into on 
some of this stuff. Fortunately, saner heads did prevail, but 
we have a lot of stuff like that.
    I will give you another example from endangered species. We 
have the pocketbook mussel that is supposedly endangered, and 
people say, ``Well, you are just a Senator and you know nothing 
of science and you should not get involved with this at all.''
    They studied the population of it probably, 30 years ago, 
in about five places, and said, there is a shortage of them, or 
they are endangered. Since that time there have been 20 more 
studies and everywhere you look you find one of these things. 
They are everywhere. If you have ever seen mussels propagate, I 
have a pond behind my house and you cannot stop mussels. They 
come in on the birds. They come in from everywhere. There are 
mussels everywhere.
    There is no shortage of this mussel. It has been found in 
30 other places. We cannot get it off the endangered species 
list because, really, those people do not work for us. They are 
sort of in charge of it, or we just abdicate and we fail to 
tell them it is time to take the pocketbook mussel off.
    But it is a big racket too. What happens is any time you 
want to build something in any State that has supposedly the 
pocketbook mussel, you have to get a consultant. It is almost 
always approved, but it costs you $100,000 for the consultant. 
It is a huge racket. They are all in league with this, and the 
consultants love the regulators because they have a whole 
racket going on this. We have archaeology consultants and 
pocketbook mussel consultants. They always have to be paid.
    Another example of how you pay the regulators. Bats. We say 
that the Indiana bat--there is a shortage of Indiana bats. They 
are rare or whatever. It is really hard, even for scientists, 
to tell the difference between that and a brown bat, which 
there are a gazillion brown bats. They say you cannot cut down 
your tree. Oh, no, no, you can cut down your trees if you pay 
us. It is like, really? If cutting down the trees is going to 
hurt the bat, why wouldn't you just say we cannot cut them 
down? You just have to pay the government money. It is not 
really about the bat. It is about exchanging money.
    But this goes on throughout government. We could spend days 
and days and days talking about regulations that have run amok, 
but we really have to figure out the conclusion of where we are 
on the spectrum of belief of whether the government is too big 
or too small. I do not think it is zero government versus 
totalitarianism, but I would say that the pendulum has been 
gradually growing and growing and growing for more unelected 
rules and laws, and we do need to do something about it.
    I like the idea of looking at the regulatory mission, 
mandating cost analysis, maybe confirming more of the 
regulators. I am not sure if it will work or not. I really like 
the idea of maybe utilizing some of the trial processes that we 
have and see if there is a way to do that and bring in the 
adversarial nature to it. Some of that would probably just 
taken an executive who chooses to police the Executive Branch 
that way.
    But any other suggestions on the idea of trial process, or 
does anybody know anything more about how we actually do use a 
trial process? Any of you?
    Mr. Parker. Yes. Administrative lawyers are familiar with a 
time when that form of rulemaking was actually used and tried. 
There is a famous story about how it took 12 years how to label 
peanut butter, using formal rulemaking.
    Senator Paul. My guess is the marketplace figured it out 
before that.
    Mr. Parker. The problem with trial-type procedures 
applied--and I am going to take issue with your idea, and then 
I am going to offer a constructive alternative, which is of a 
similar nature. The problem with trial-type procedures applied 
to rulemaking is that there are many different actors. There 
are many different industry positions in any given rules. There 
are many different ways of doing things, many different 
production process that produce different kinds of pollution, 
etc. In my work, in convening negotiating rulemaking exercises, 
I have discovered that industry is not just one thing. There 
are many different actors in the regulated community, many 
different beneficiaries as well.
    You cannot have everybody cross-examining everybody else. 
It is not like a trial. It just does not work that way. This is 
a polycentric exercise. The idea of a rule is it is of general 
applicability and future effect.
    So how do you get this? But you are right that these folks 
need to be consulted. They need to be consulted for their 
expertise and they need to be consulted for the legitimacy of 
the process.
    One way that I think could capture a lot of what you are 
trying to do is through greater use of negotiated rulemaking, 
which I have personal experience with. Full disclosure--I have 
been paid for doing it so I like it, but I am not pushing for 
me to do this. I am saying this is a process that really works.
    Negotiated rulemaking is another way of coming up with a 
proposed rule or a revision to a rule: it requires that the 
industry be at the table. It also requires that the public 
interest community be at the table, and that regulators be at 
the table. It is presided over by a neutral facilitator or 
convener, which is what I did. But everybody is heard. At the 
same time it is a wonderful fact-checker a magnificent B.S. 
detector. Because if you say something that is wrong in a 
negotiated rulemaking, you will be called out by other experts 
and other stakeholders around the table right then and there.
    Senator Paul. I think it does----
    Mr. Parker. That might be something that you could explore 
and that would be doable.
    Senator Paul. No, we are open to that and we will look at 
that. I think that the other thing that has to come into this 
is every regulation cannot be looked at through either an 
adversarial process or even this kind of process. We set 
dollars limits or whatever and we figure out--and certain of 
them will be, and the more important ones, absolutely should 
be.
    You mentioned industry a couple of times, and I think it is 
important from the understanding that I do not consider myself 
to be an advocate of any industry or for industry in general. I 
am an advocate for capitalism and the marketplace, for people 
who are mostly being left alone if they do not hurt others.
    What I would say is my experience up here has found that 
most industry loves regulation. Big banks love all the 
regulation, all the compliance, because there is a compliance 
cost, they can absorb the compliance cost and the new guys 
cannot. Small banks do not like the regulations. Big banks do 
not care. They have already hired it. They have baked it into 
the pie, and so often you get that.
    The other thing that is particularly infuriating to me is 
the businesses are coming up here all the time, saying, ``We 
hate California's regulations. Please regulate us nationally.'' 
Every business group comes to me and wants to be regulated now, 
and I say, ``Beware. You do not know who the next President is 
going to be. You do not know who the next Congress will be, and 
then with a flip of the switch the national rule will become 
California's rule.''
    But it is all this getting away from there being, places 
where you can seek refuge, the States to seek refuge from the 
Federal Government, and I think that is a big mistake.
    Dr. Broughel, do you have any comment on industry, business 
actually promoting or actually liking regulation to keep out 
competition?
    Mr. Broughel. Absolutely. There is a well-known phenomenon 
in the economic literature known as regulatory capture, which 
is the idea that regulatory agencies tend to get captured by 
the industries they regulate, and serve their interests.
    When I made that comment earlier about being ignored in the 
public commenting processes, I was not referring to industry. I 
was referring to members of the ordinary public who really have 
trouble making a difference. The reason is very often because 
regulatory agencies have sat down with industry, before they 
have even proposed a regulation, hashed out some kind of deal 
or arrangement with them, and it is only at that point that 
they propose a regulation and the public has an opportunity to 
chime in.
    Senator Paul. I think it is hard because people do not look 
forward to the unintended consequences of it. Right now 
everybody is up in a roar about surprise billing in medicine, 
so we are going to regulate what people can charge, and they 
have to accept a certain rate. Five years from now we are going 
to come back and say, oh, my God, I cannot believe we did this. 
We have now regulated maybe 75 percent of the medical 
transactions, because it is going to be everyone associated 
with a hospital. Over half the doctors are associated with 
hospitals now, so it is not just going to be ER doctors. It is 
going to be doctors, and then as that increases it is going to 
be every transaction.
    Then we are going to find out that we have shortages 
because people are going to say, ``I am not even in the 
network. Why should I offer a discount?'' Now I have to take 
the discount and all of the power will devolve to the insurance 
companies, and all the complaints we have about big insurance 
are going to be worse, but nobody realizes that because nobody 
is thinking through the end result of that.
    Senator Hassan. I just have to say that I think we are 
trying to address that very issue in diversion of the surprise 
medical bill because there has been a good back-and-forth. I do 
not want to turn this into a HELP hearing, but I do want you to 
know that that is being hashed out.
    Senator Paul. Because it is sort of the inadvertent result 
is that people say, insurance companies are getting too big. 
Tech is getting too big. We attempt to regulate it but we make 
it worse. Doctors are small potatoes in this. Hospitals are 
fairly small potatoes compared to the insurance companies. When 
we do something that the insurance companies all love, we 
should be a little bit wary. We are also getting involved in 
the marketplace. We are going to dictate what the rates are for 
medicine, and who can join and who cannot join networks.
    The thing that is not really discussed is some doctors want 
to be in the network and are excluded for it because it is a 
monetary thing, and then some doctors say, ``Well, they are 
only offering me $50. Why should I be in the network?'' They do 
not take the $50, and guess what? They promote and now they are 
going to say, well, you have to take the $50. You are stuck. 
You do not get in the network and you are going to be stuck 
with the $50. If you are in the trucking business or selling 
carpet, pens, or glasses, would you want the government to tell 
you how much you can sell things? I think it is a terrible 
disaster that is going to unfold from all of this.
    Senator Hassan. Again, not wanting to turn this into a 
Health, Educator, Labor, and Pensions hearing, which Senator 
Paul and I both serve on.
    I am going to have to go in a minute so I just wanted to 
thank all of you very much for your testimony, for your 
attention to this. I would look forward to continuing this 
discussion, both with the Chairman and with all of you, because 
I actually thought I heard some levels of agreement among the 
three of you, including that there is a role of judicial 
oversight that is important here, and there is a role, 
obviously, of congressional oversight. There are also some 
really good ideas and some really, I think, joint and common 
concerns about how we make sure that members of the public 
actually really have a voice in the regulatory process, 
something hard to do in a capitalist democracy, but we are a 
capitalist democracy so that is where regular people are 
supposed to come in. It is a reminder to Members of Congress 
that we are supposed to be taxpayer advocates too.
    I would look forward to that continued discussion. I am 
sorry, I have to go to another meeting, but thank you all for 
very illuminating testimony and for your fine work.
    Senator Paul. Thank you, Senator Hassan, and we will keep 
working with your office to try to find common ground, to find 
reform type of legislation that we can sign onto from some of 
these ideas, and I know our staffs are continue to talk.
    At this point, being the libertarian that I am, I am going 
to say, is there anything else you want to say? But you have to 
keep it under about 2 minutes or so apiece. Mr. Berry.
    Mr. Berry. Sure. Thank you. I just wanted to briefly 
comment on what Professor Parker brought up about Commissioner 
Califf's claim that these procedures really, they always go up 
to the top and that the name on the brief does not matter so 
much.
    The FDA, in litigation against the deeming rule, where I 
represent some clients who sued against it, conceded that the 
Associate Commissioner for Policy was the one who issued the 
rule, and they conceded that it was under her rulemaking 
authority that had been sub-delegated by the FDA Commissioner. 
When they attempted--and so the entire crux of the case is not 
whether she issued the rule--they admit she did--it is whether 
she was validly appointed as an inferior officer and whether 
inferior officers, in her case, can constitutionally issue 
rules.
    The second interesting thing is that they cited every 
statute they could for supervision, but they did not have one 
that essentially showed that the FDA Commissioner has to sign 
off on these rules. They had one that said the FDA Commissioner 
can also issue rules, but that is sort of obvious. They have 
concurrent authority. The only oversight they cited was one 
that said highly significant public policy question rules can 
be reviewed by the HHS Secretary, but presumably do not have 
to. Given that only about 2 percent of FDA rules have the 
signature of the FDA Commissioner or HHS Secretary, it seems 
like that is a pretty small number of them.
    Also, given what we have said about political 
accountability and how people want to know that their comments 
are at least being heard by someone, I do not think it is just 
a formality whose name appears on the rules. I think that is 
what the general public is going to look at. When these things 
are done behind the scenes, higher-ups can play it both ways. 
If a rule becomes popular then can say, ``Oh yes. I was very 
closely involved in that,'' and if it is not popular they can 
say, ``My name is not on it.''
    Senator Paul. Anybody else? Professor Parker?
    Mr. Parker. I will just say that when the public or a 
member of the public sues to challenge a rule for being 
arbitrary and capricious or a violation of law, the lawsuit 
does not read ``So-and-So versus Leslie Kux.'' The law reads, 
``So-and-So versus the FDA'' or ``the FDA Commissioner,'' 
right? The lawsuit, it is the Commissioner who is ultimately 
responsible.
    Senator Paul. It was sovereign law or something where you 
have to sue to government or not?
    Mr. Parker. I do not know, but the agency is ultimately 
responsible in court, and to you, accountable to you for every 
rule that goes out over the FDA's signature. I do not think 
anybody from the FDA has ever come to you and said in an 
oversight hearing, ``Well, I do not know about that rule. 
Leslie Kux issued that rule. I do not defend that rule.''
    Senator Paul. I think the bigger question is not really 
actually on who, individually, it is, whether it is higher up 
or the middle management or the lower management. It is a 
little disconcerting if it is a huge rule and lower management 
is doing the rule. I think the bigger concern is are we 
involved with too many rules in our world or too few?
    I just find it hard to believe that the evidence is not 
overwhelming that our government has gotten too big and too 
involved, and like I say, there are lists of thousands of 
ridiculous things, like how many cherries in a cherry pie, how 
many apples in an apple pie. We finally, with the current 
Administration, got rid of some of that stuff and threw it out. 
But those things have been on the books for decades and decades 
and decades.
    I think we do have to consider whether we do too many 
things or too few things, and I do not think anybody is arguing 
for no regulations. We are arguing for whether you want more or 
less. It is sort of the argument we have here in government for 
taxes. Do you want more or less? Nobody is arguing for zero. 
Nobody is arguing for 100 percent. With corporate taxes it is 
very clear there is a division between the parties. One party 
wanted to keep a 35 percent corporate rate and the other party 
wanted a 21 percent, and it was a clear demarcation, more 
versus less.
    Mr. Parker. I would just say one thing, that you are 
absolutely right that the Founding Fathers did not contemplate 
the growth of the modern administrative state.
    Senator Paul. We can definitely agree on that.
    Mr. Parker. We can agree on that. They also did not 
contemplate modern aviation or modern cars, or the explosion 
of--the proliferation of toxic chemicals, none of which 
existed. These are all manmade chemicals, none of which existed 
in their day.
    Senator Paul. I would probably take an argument with that 
in the sense that they did have significant pollution back 
then. They had airborne things, probably, in many ways, more 
than we have now. The air of London was worse in the time of 
our Founding Fathers than it is today. This is a lot of things 
that people do not realize about the environment. The EPA has 
published that of the six main pollutants in our environment, 
they have been reduced by 70 percent over the last 40 or 50 
years. The real bad pollution that we had in our history was 
when everybody burned their own fossil fuels in their 
fireplace.
    Mr. Parker. Yes.
    Senator Paul. By concentrating on utilities, actually the 
air is much cleaner than it actually used to be.
    Dr. Broughel, a final comment?
    Mr. Broughel. I would just add that I think the idea of 
pursuing more negotiated rulemaking sounds like an interesting 
idea. I believe that formal rulemaking can work and has worked 
in the past. Some critics have said it takes too long, but I 
think that the evidence is----
    Senator Paul. That sounds like, to me, an advantage, that 
it might take a long time to get a new regulation?
    Mr. Broughel. It is also just not true, for example, the 
peanut regulation. It was not formal rulemaking that dragged 
that process on and on for years. It was other factors. It just 
happened that that rule also went through formal rulemaking.
    I am also serving on a negotiated rulemaking right now for 
the Department of Energy, and I am the consumer representative 
on this working group. It is an interesting experience. I would 
not say it works perfectly. It would be nice if there were 
more, if there were more people like me on that working group, 
because I am essentially--there are--well, lots of 
representatives are industry, there are lots of representatives 
for the energy efficiency activists, but there are not really 
more representatives for just the people.
    If you had a taxpayer representative or more consumer 
representatives that could balance that out I think that would 
be a good thing.
    Senator Paul. I think that is a good idea. We will send you 
a summary of what we think are some of the ideas we have 
discussed. Feel free to comment back to us if you have ideas, 
in general, in the future. Always feel free to communicate with 
us, because we do consider you to be experts on various sides 
of the issue and we would like to hear from you.
    But thank you all for coming. Meeting adjourned.
    [Whereupon, at 4:04 p.m., the Subcommittee was adjourned.]

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