[House Report 117-511]
[From the U.S. Government Publishing Office]


117th Congress    }                                  {      Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                  {      117-511

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

 
   RESOLUTION OF INQUIRY REQUESTING THE PRESIDENT TO PROVIDE CERTAIN 
 DOCUMENTS TO THE HOUSE OF REPRESENTATIVES RELATING TO COMMUNICATIONS 
            AND DIRECTIVES WITH THE FEDERAL TRADE COMMISSION

                                _______
                                

 September 28, 2022.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

 Mr. Pallone, from the Committee on Energy and Commerce, submitted the 
                               following

                             ADVERSE REPORT

                             together with

                            DISSENTING VIEWS

                      [To accompany H. Res. 1261]

    The Committee on Energy and Commerce, to whom was referred 
the resolution (H. Res. 1261) of inquiry requesting the 
President to provide certain documents to the House of 
Representatives relating to communications and directives with 
the Federal Trade Commission, having considered the same, 
reports unfavorably thereon without amendment and recommends 
that the resolution not be agreed to.

                                CONTENTS

                                                                   Page
   I. Purpose and Summary.............................................2
  II. Background and Need for the Legislation.........................2
 III. Committee Hearings..............................................2
  IV. Committee Consideration.........................................2
   V. Committee Votes.................................................3
  VI. Oversight Findings..............................................5
 VII. New Budget Authority, Entitlement Authority, and Tax Expenditure5
VIII. Federal Mandates Statement......................................5
  IX. Statement of General Performance Goals and Objectives...........5
   X. Duplication of Federal Programs.................................5
  XI. Committee Cost Estimate.........................................6
 XII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits.....6
XIII. Advisory Committee Statement....................................6
 XIV. Applicability to Legislative Branch.............................6
  XV. Section-by-Section Analysis of the Legislation..................6
 XVI. Changes in Existing Law Made by the Bill, as Reported...........6
XVII. Dissenting Views................................................7

                         I. PURPOSE AND SUMMARY

    H. Res. 1261 requests the President furnish to the House of 
Representatives, within 14 days of adoption, records in his 
possession, or any portion of any record, related to (1) the 
Federal Trade Commission's (FTC) omission of certain language 
from its draft strategic plan for the fiscal years 2022-2026; 
(2) certain FTC goals and enforcement priorities; (3) the FTC's 
practices with regard to votes cast by departing commissioners; 
(4) complaints from FTC employees about a ``gag rule'' and 
termination of employees; (5) communications and coordination 
between the FTC and White House about initiation of the FTC's 
Advance Notice of Proposed Rulemaking on Commercial 
Surveillance; (6) a statement by National Economic Council 
special assistant Tim Wu who reportedly asked the FTC to draft 
a rule regarding data collection; and (7) transmission from the 
FTC to Office of Information and Regulatory Affairs on a Trade 
Regulation Rule on Commercial Surveillance.

                II. BACKGROUND AND NEED FOR LEGISLATION

    H. Res. 1261 requests several categories of documents 
concerning the FTC. The Committee on Energy and Commerce is 
responsible for Congressional oversight of the FTC's consumer 
protection responsibilities. The resolution sponsor seeks to 
obtain from the President documents relating to the FTC's 
internal decision-making process, the FTC's adherence to its 
own rules for commission votes, employee complaints, and 
communications or coordination between the Executive Office and 
the FTC. The resolution sponsor requested the Executive Office 
furnish these documents within 14 days.
    The records requested in this Resolution of Inquiry are 
similar to those requested on December 8, 2021, by Ranking 
Member Rodgers, along with Subcommittee on Consumer Protection 
and Commerce Ranking Member Bilirakis, in a letter to FTC Chair 
Lina Khan.\1\ In the intervening nine months before filing this 
Resolution of Inquiry, the Minority has not sought similar 
records from the White House by letter or otherwise. Rather 
than taking such action, this resolution was filed alongside 17 
other Resolutions of Inquiry under the jurisdiction of the 
Committee on Energy and Commerce. In addition, many of the 
requests are based on unsubstantiated assumptions that certain 
policy changes have been made, certain votes have occurred, and 
certain communications have been exchanged.
---------------------------------------------------------------------------
    \1\Letter from Rep. Cathy McMorris Rodgers, Ranking Member, House 
Committee on Energy and Commerce, and Gus Bilirakis, Ranking Member, 
House Subcommittee on Consumer Protection and Commerce, to FTC Chair 
Lina Khan (Dec. 8, 2021).
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                        III. COMMITTEE HEARINGS

    The Committee on Energy and Commerce has not held a hearing 
on the legislation.

                      IV. COMMITTEE CONSIDERATION

    H. Res. 1261 was introduced on July 26, 2022, by 
Representative Bilirakis (R-FL) and was referred to the 
Committee on Energy and Commerce. Subsequently, on July 27, 
2022, the resolution was referred to the Subcommittee on 
Consumer Protection and Commerce. The resolution was discharged 
from the Subcommittee on Consumer Protection and Commerce on 
September 21, 2022.
    On September 21, 2022, the Committee met in open markup 
session and ordered H. Res. 1261, without amendment, adversely 
reported to the House by a recorded vote of 30 yeas and 18 
nays.

                           V. COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list each record vote 
on the motion to report legislation and amendments thereto. The 
Committee advises that there was one record vote taken on H. 
Res. 1261, including a motion by Mr. Pallone ordering H. Res. 
1261 adversely reported to the House, without amendment. The 
motion on final passage of the bill was approved by a record 
vote of 30 yeas to 18 nays. The following are the record votes 
taken during Committee consideration, including the names of 
those members voting for and against:


	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                         VI. OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1) 
of rule X of the Rules of the House of Representatives, the 
oversight findings and recommendations of the Committee are 
reflected in the descriptive portion of the report.

 VII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to 3(c)(2) of rule XIII of the Rules of the House 
of Representatives, the Committee adopts as its own the 
estimate of new budget authority, entitlement authority, or tax 
expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974.
    The Committee has requested but not received from the 
Director of the Congressional Budget Office a statement as to 
whether this bill contains any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.

                    VIII. FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

       IX. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is request 
the President to furnish to the House of Representatives, 
within 14 days of adoption, records in his possession, or any 
portion of any record, related to the following seven topics: 
(1) the FTC's omission of certain language from its draft 
strategic plan for the fiscal years 2022-2026; (2) certain FTC 
goals and enforcement priorities; (3) the FTC's practices with 
regard to votes cast by departing commissioners; (4) complaints 
from FTC employees about a ``gag rule'' and termination of 
employees; (5) communications and coordination between the FTC 
and White House about initiation of the FTC's Advance Notice of 
Proposed Rulemaking on Commercial Surveillance; (6) a statement 
by National Economic Council special assistant Tim Wu who 
reportedly asked the FTC to draft a rule regarding data 
collection; and (7) transmission from the FTC to Office of 
Information and Regulatory Affairs on a Trade Regulation Rule 
on Commercial Surveillance.

                   X. DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of H. 
Res. 1261 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                      XI. COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

    XII. EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H. Res. 1261 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                   XIII. ADVISORY COMMITTEE STATEMENT

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                XIV. APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

           XV. SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

    H. Res. 1261 issues requests to the President for documents 
regarding the following seven subjects: (1) the FTC's decision 
to omit the phrase ``without unduly burdening legitimate 
business activity'' from its draft strategic plan for the 
fiscal years 2022-2026; (2) the ``FTC's goals changing from its 
traditional focus on protecting consumers from fraud, as well 
as ensuring businesses have clear rules to follow, in favor of 
an unorthodox interpretation of its antitrust mission to 
reshape the United States economy''; (3) the FTC's practices 
with regard to votes cast by departing commissioners; (4) 
complaints from FTC employees about a ``gag rule'' and 
termination of employees; (5) communications and coordination 
between the FTC and the White House about initiation of the 
FTC's Advance Notice of Proposed Rulemaking on Commercial 
Surveillance; (6) a statement by National Economic Council 
special assistant Tim Wu who reportedly asked the FTC to draft 
a rule regarding data collection; and (7) transmission from the 
Federal Trade Commission to Office of Information and 
Regulatory Affairs on a Trade Regulation Rule on Commercial 
Surveillance.

       XVI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    There are no changes to existing law made by the bill H. 
Res. 1261.

                         XVII. DISSENTING VIEWS

    In voting down this Resolution of Inquiry (ROI), the 
Democratic side of the aisle unanimously voted against 
Congressional oversight of the Federal Trade Commission. Vital 
oversight of our government agencies has been a bipartisan 
concern of this committee, and it should not be subverted in 
order to protect the inflationary policies of the Biden 
Administration.
    Even worse, in hearing the rhetoric from the majority that 
our concerns have somehow not been raised before, it appears 
that the majority has neither been listening nor reading over 
the past year and a half. Through hearings, markups and 
letters, Republicans have raised the very same concerns raised 
in this ROI several times. To name a few, there was an April 
27, 2021\1\ legislative hearing with Acting Chair Rebecca 
Slaughter on section 13(b) authority, then there was the sole 
FTC hearing we had this Congress on July 28, 2021\2\ with then-
newly installed Chair Khan and soon-to-depart Commissioner 
Rohit Chopra that the majority merged into a legislative 
hearing as well.
---------------------------------------------------------------------------
    \1\https://republicans-energycommerce.house.gov/hearings/the-
consumer-protection-and-recovery-act-returning-money-to-defrauded-
consumers/.
    \2\https://republicans-energycommerce.house.gov/hearings/
transforming-the-ftc-legislation-to-modernize-consumer-protection/.
---------------------------------------------------------------------------
    Since voicing our concerns during these hearings didn't 
appear to move the needle with our friends, there were our 
oversight letters that followed on the mounting troubles at the 
FTC. First there was an oversight letter following the hearing 
July 29, 2021,\3\ and then another on December 8, 2021,\4\ both 
of which were met with little more than token responses from 
Chair Khan.
---------------------------------------------------------------------------
    \3\https://republicans-energycommerce.house.gov/wp-content/uploads/
2021/07/7.29.21-FTC-Oversight.pdf.
    \4\https://republicans-energycommerce.house.gov/wp-content/uploads/
2022/09/14.-Letter-from-Rep.-McMorris-Rodgers-and-Rep.-Bilirakis-to-
FTC-Chair-Khan_R7.pdf.
---------------------------------------------------------------------------
    If our majority friends would have listened to our concerns 
over the past 18 months, maybe we would have been able to press 
commissioners further on these important questions. These 
topics have a direct impact on the condition of the country 
after all. The policies from the Biden Administration are 
hurting people across the country.
    So, perhaps it's worth providing some of the history shared 
during this Congress that has got us to where we are. Earlier 
last year, the Supreme Court unanimously found that the FTC 
exceeded their authority in seeking monetary penalties from 
businesses.\5\ In its opinion, the Supreme Court highlighted 
Professor Howard Beales, the former Director of the FTC Bureau 
on Consumer Protection who shared a piece of commission 
history:
---------------------------------------------------------------------------
    \5\https://www.supremecourt.gov/opinions/20pdf/19-508_l6gn.pdf.

        ``unbounded by meaningful standards, in the 1970s the 
        Commission embarked on a vast enterprise to transform 
        entire industries. Over a 15-month period, the 
        Commission issued a rule a month, usually without a 
        clear theory of why there was a law violation, with 
        only a tenuous connection between the perceived problem 
        and the recommended remedy, and with, at best, a shaky 
        empirical foundation.''\6\
---------------------------------------------------------------------------
    \6\Ibid.

    Professor Beales' quote reminds us of the capacity and 
important history the FTC owns in operating outside of their 
authority in an attempt to become an overbearing, innovation-
killing body. In response to the FTC's actions, Congress in its 
constitutionally mandated oversight capacity was compelled to 
pass the Federal Trade Commission Improvements Act of 1980\7\ 
to rein in the FTC, prevent further abuses of power, and 
restrict its rulemaking authority to better align FTC actions 
with its congressionally mandated authorities.
---------------------------------------------------------------------------
    \7\https://www.congress.gov/bill/96th-congress/house-bill/
6589#::text=Federal%20Trade%20
Commission%20Improvements%20Act%20of%201980%20%2D%20Amends%20the%20Feder
al,an
%20unfair%20method%20of%20competition.
---------------------------------------------------------------------------
    With this legislation, we quite simply are exercising our 
constitutionally mandated oversight authorities bestowed on 
elected representatives to ensure unelected government bodies 
do not impose on the wills of the people and their legitimate 
business activities. Since Chair Khan assumed leadership of the 
FTC, she has worked to centralize decision-making authority 
within her own office; marginalize the voices of Republican 
commissioners, and sideline important bureaus including the 
Bureau of Economics, which is charged with analyzing how the 
FTC's actions will impact the economy. Alarming developments we 
have flagged include:
           The FTC has issued hundreds of warning 
        letters en-masse to companies across the country as a 
        short cut to establish a fine for a potential first 
        offense.\8\
---------------------------------------------------------------------------
    \8\https://www.ftc.gov/business-guidance/blog/2021/10/latest-ftc-
notice-penalty-offenses-tells-700-national-advertisers-deceptive-
endorsements-can-lead.
---------------------------------------------------------------------------
           The Democrat commissioners of the FTC, in a 
        partisan vote, removed ``without unduly burdening 
        legitimate business activity'' from their mission 
        statement, altering a decades-long bipartisan 
        commitment to protecting businesses that follow the law 
        in favor of President Biden's partisan mission to 
        reshape the economy.\9\
---------------------------------------------------------------------------
    \9\https://techfreedom.org/ftc-makes-way-to-hinder-legitimate-
business-activity-techfreedom-warns/.
---------------------------------------------------------------------------
           Chair Khan instituted a ``gag order,'' 
        barring FTC staff from public speaking engagements such 
        as academic panels in an attempt to silence dissenting 
        voices and promote a ``one voice'' policy.\10\
---------------------------------------------------------------------------
    \10\https://www.politico.com/news/2021/07/06/ftc-staffers-public-
appearances-498386.
---------------------------------------------------------------------------
           On his last day in office, in order to 
        advance partisan objectives with only two Democratic 
        Commissioners, former Commissioner Rohit Chopra cast as 
        many as 20, ``zombie'' votes.\11\
---------------------------------------------------------------------------
    \11\https://www.politico.com/news/2021/11/08/voting-rule-democrats-
antitrust-519767.
---------------------------------------------------------------------------
    Democrats in Congress have already tried earlier this year 
to aid their Democratic Commissioners at the FTC and grant them 
complete freedom to carry out the Biden Administration's 
radical innovation-killing agenda with the inclusion of broad 
first offense civil penalty authority in the Build Back Better 
Act that was devoid of any Congressional direction or 
guardrails. This is despite the fact that the same Democrats 
who hold the majority position on this committee and thus set 
the oversight agenda ignored the request of Republicans to 
conduct robust oversight over an agency that was proven in the 
courts to have acted outside its congressionally mandated 
authority.
    During the Biden Administration, the importance of a cost-
benefit analysis for rules and its impact on legitimate 
businesses has been lost. Nowhere is this more a problem than 
where it comes to the unrestrained actions of the Democratic 
commissioners of this FTC. Families are already stretching 
their budgets to afford groceries, keep the lights on, and fill 
up their gas tanks, all while struggling to find essential 
goods like baby formula. It is clear President Biden and Chair 
Khan are not concerned with how these policies hurt small 
business, and the families they employ across this country.
    Now is not the time to be straining the economy further 
with these attacks on honest businesses. However, that is 
exactly what is happening when the FTC continues operating with 
unchecked congressional power and radical presidential 
direction. We need to know the extent to which President Biden 
and his FTC plans to impede American businesses in its 
practices.

                                    Cathy McMorris Rodgers,
               Republican Leader, Committee on Energy and Commerce.

                                  [all]