[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
ADMINISTRATIVE LAW, PROCESS AND
PROCEDURE PROJECT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
NOVEMBER 1, 2005
__________
Serial No. 109-71
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
______
U.S. GOVERNMENT PRINTING OFFICE
24-282 WASHINGTON : 2006
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah MAXINE WATERS, California
SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida
MARK GREEN, Wisconsin ANTHONY D. WEINER, New York
RIC KELLER, Florida ADAM B. SCHIFF, California
DARRELL ISSA, California LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
Philip G. Kiko, Chief of Staff-General Counsel
Perry H. Apelbaum, Minority Chief Counsel
------
Subcommittee on Commercial and Administrative Law
CHRIS CANNON, Utah Chairman
HOWARD COBLE, North Carolina MELVIN L. WATT, North Carolina
TRENT FRANKS, Arizona WILLIAM D. DELAHUNT, Massachusetts
STEVE CHABOT, Ohio CHRIS VAN HOLLEN, Maryland
MARK GREEN, Wisconsin JERROLD NADLER, New York
RANDY J. FORBES, Virginia DEBBIE WASSERMAN SCHULTZ, Florida
LOUIE GOHMERT, Texas
Raymond V. Smietanka, Chief Counsel
Susan A. Jensen, Counsel
Mike Lenn, Full Committee Counsel
Brenda Hankins, Counsel
Stephanie Moore, Minority Counsel
C O N T E N T S
----------
NOVEMBER 1, 2005
OPENING STATEMENT
Page
The Honorable Chris Cannon, a Representative in Congress from the
State of Utah, and Chairman, Subcommittee on Commercial and
Administrative Law............................................. 1
The Honorable Melvin L. Watt, a Representative in Congress from
the State of North Carolina, and Ranking Member, Subcommittee
on Commercial and Administrative Law........................... 3
WITNESSES
Morton Rosenberg, Esquire, Specialist in American Public Law,
American Law Division of the Congressional Research Service,
Library of Congress
Oral Testimony................................................. 7
Prepared Statement............................................. 10
Mr. J. Christopher Mihm, Managing Director of Strategic Issues,
United States Government Accountability Office
Oral Testimony................................................. 31
Prepared Statement............................................. 34
Professor Jeffrey S. Lubbers, Fellow in Law and Government
Program, Washington College of Law, American University
Oral Testimony................................................. 59
Prepared Statement............................................. 62
Professor Jody Freeman, Harvard Law School
Oral Testimony................................................. 76
Prepared Statement............................................. 80
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Chris Cannon, a
Representative in Congress from the State of Utah, and
Chairman, Subcommittee on Commercial and Administrative Law.... 3
Material Submitted for the Hearing Record
Responses to additional questions from Morton Rosenberg, Esquire,
Specialist in American Public Law, American Law Division of the
Congressional Research Service, Library of Congress............ 94
Responses to additional questions from J. Christopher Mihm,
Managing Director of Strategic Issues, United States Government
Accountability Office.......................................... 112
Responses to additional questions from Professor Jeffrey S.
Lubbers, Fellow in Law and Government Program, Washington
College of Law, American University............................ 118
Responses to additional questions from Jody Freeman, Harvard Law
School......................................................... 125
ADMINISTRATIVE LAW, PROCESS AND PROCEDURE PROJECT
----------
TUESDAY, NOVEMBER 1, 2005
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10 a.m., in
Room 2141, Rayburn House Office Building, the Honorable Chris
Cannon (Chair of the Subcommittee) presiding.
Mr. Cannon. If you would all like to take your seats. Thank
you all for coming this morning.
I don't have a gavel. We are now in order. Don't worry
about it. It is not life or death here.
The current Federal regulatory process faces many
significant challenges. Earlier this year the head of OMB's
Office of Information and Regulatory Affairs testified that
``no one has ever tabulated the sheer number of Federal
regulations that have been adopted since passage of the
Administrative Procedure Act,'' which I might add
parenthetically was in 1946. He further acknowledged, ``Sad as
it is to say, most of these existing Federal rules have never
been evaluated to determine whether they have worked as
intended and what their actual benefits and costs have been.''
A rather depressing statement.
In September 2005, the SBA's Office of Advocacy reported
that the annual cost to comply with Federal regulations in the
United States in 2004 exceeded $1.1 trillion, about 10 percent
of our whole economy, which means that if every household
received a bill for its equal share, each would have owed
$10,172, an amount that exceeds what the average American
household spent on health care in 2004, which is just under
$9,000.
Other problematic trends include the absence of
transparency in certain stages of the rulemaking process, the
increasing incidence of agencies publishing final rules without
having them first promulgated on a proposal basis, the
stultification of certain aspects of the rulemaking process,
and the need for more consistent enforcement by agencies.
Given the fact that the EPA was enacted nearly 60 years
ago, a fundamental question that arises is whether the act is
still able to facilitate effective rulemaking in the 21st
century.
In an attempt to answer that question, House Judiciary
Chairman Sensenbrenner earlier this year requested that our
Subcommittee spearhead the Administrative Law, Process and
Procedure Project.
The object of the project is to conduct a nonpartisan,
academically credible analysis of Federal rulemaking that will
focus on process, not policy concerns. Some of the areas that
will be studied include the role of public participation in the
rulemaking process, judicial review of rulemaking, and the
utility of regulatory analysis and the accountability
requirements.
For the purpose of soliciting scholarly papers and
promoting a robust dialogue, the Subcommittee intends to
facilitate colloquia at various academic institutions and
organizations that analyze Federal rulemaking.
In addition, the Congressional Research Service has been
asked to make some of its leading administrative law experts
available to guide the project, one of whom is testifying
today. Under the auspices of CRS, several independent empirical
studies of various issues conducted by some of the most
respected members of academia are already underway as part of
the project, and we will hear about one of those ongoing
studies as part of today's hearing.
The project will also benefit from the wealth of expertise
that the Government Accountability Office provides. To date,
GAO has produced more than 60 reports on various aspects of the
Federal regulatory process, and one of our witnesses will
explain the work of GAO in this critical area.
The project will culminate with the preparation of a
detailed report with recommendations for legislative proposals
and suggested areas for further research and analysis to be
considered by the Administrative Conference of the United
States.
As you may recall legislation reauthorizing ACUS was signed
into law last fall. ACUS was a nonpartisan, private-public
think tank that proposed many valuable recommendations which
improved administrative aspects of regulatory law and practice.
Over its 28-year existence ACUS has served as an independent
agency charged with studying the efficiency, adequacy and
fairness of the administrative procedure used by Federal
agencies. Most of its approximately 200 recommendations were
implemented. They in turn helped save taxpayers millions of
dollars.
In a rare expression of unanimity, the Supreme Court
Justices Scalia and Breyer jointly testified before our
Subcommittee last year in support of ACUS. In complete unison
they extolled the Conference's virtues. Justice Breyer in
particular cited the value of the Conference's recommendations,
noting that they resulted in ``huge'' savings to the public.
Likewise Judge Scalia stated the Conference was ``an enormous
bargain.'' Accordingly, it is critical that ACUS be
appropriated its funding if not before, at least by the time
the project report is completed.
This is truly an exciting undertaking. I look forward--can
you imagine an exciting undertaking in administrative
procedures? It actually really is, and I look forward to the
testimony from our witnesses as we get this project going.
I now turn to my colleague, Mr. Watt, the distinguished
Ranking Member of my Subcommittee, and ask him if he has any
opening remarks.
[The prepared statement of Mr. Cannon follows:]
Prepared Statement of the Honorable Chris Cannon, a Representative in
Congress from the State of Utah, and Chairman, Subcommittee on
Commercial and Administrative Law
The current federal regulatory process faces many significant
challenges. Earlier this year, the head of OMB's Office of Information
and Regulatory Affairs testified that ``no one has ever tabulated the
sheer number of federal regulations that have been adopted since
passage of the Administrative Procedure Act,'' which I might add
parenthetically was in 1946. He further acknowledged, ``Sad as it is to
say, most of these existing federal rules have never been evaluated to
determine whether they have worked as intended and what their actual
benefits and costs have been.'' A rather depressing statement.
In September 2005, the SBA's Office of Advocacy reported that the
annual cost to comply with federal regulations in the United States in
2004 exceeded $1.1 trillion, which means that if every household
received a bill for its equal share, each would have owed $10,172, an
amount that exceeds what the average American household spent on health
care in 2004, which is just under $9,000.
Other problematic trends include the absence of transparency at
certain stages of the rulemaking process, the increasing incidence of
agencies publishing final rules without having them first promulgated
on a proposed basis, the stultification of certain aspects of the
rulemaking process, and the need for more consistent enforcement by
agencies.
Given the fact that the APA was enacted nearly 60 years ago, a
fundamental question that arises is whether the Act is still able to
facilitate effective rulemaking in the 21st Century?
To help us answer that question, House Judiciary Committee Chairman
Sensenbrenner earlier this year requested our Subcommittee to spearhead
the Administrative Law, Process and Procedure Project. The objective of
the Project is to conduct a nonpartisan, academically credible analysis
of federal rulemaking that will focus on process, not policy concerns.
Some of the areas that will be studied include the role of public
participation in the rulemaking process, judicial review of rulemaking,
and the utility of regulatory analysis and accountability requirements.
For the purpose of soliciting scholarly papers and promoting a
robust dialogue, the Subcommittee intends to facilitate colloquia at
various academic institutions and organizations that analyze federal
rulemaking. In addition, the Congressional Research Service has been
asked to make some of its leading administrative law experts available
to guide the Project, one of whom is testifying today. Under the
auspices of CRS, several independent empirical studies of various
issues conducted by some of the most respected members of academia are
already underway as part of the Project, and we'll hear about one of
those ongoing studies as part of today's hearing. The Project will also
benefit from the wealth of expertise that the Government Accountability
Office provides. To date, GAO has produced more than 60 reports on
various aspects of the federal regulatory process. And, one of our
witnesses will explain the work of the GAO in this critical area.
The Project will culminate with the preparation of a detailed
report with recommendations for legislative proposals and suggested
areas for further research and analysis to be considered by the
Administrative Conference of the United States. As you may recall,
legislation reauthorizing ACUS was signed into law last fall. ACUS was
a nonpartisan ``private-public think tank'' that proposed many valuable
recommendations which improved administrative aspects of regulatory law
and practice. Over its 28-year existence, ACUS served as an independent
agency charged with studying the efficiency, adequacy, and fairness of
the administrative procedure used by federal agencies. Most of its
approximately 200 recommendations were implemented, and they, in turn,
helped save taxpayers many millions of dollars.
In a rare expression of unanimity, Supreme Court Justices Scalia
and Breyer jointly testified before our Subcommittee last year in
support of ACUS. In complete unison, they extolled the Conference's
virtues. Justice Breyer, in particular, cited the value of the
Conference's recommendations, noting that they resulted in ``huge''
savings to the public. Likewise, Justice Scalia stated that the
Conference was ``an enormous bargain.'' Accordingly, it is critical
that ACUS be appropriated its funding, if not before, at least by the
time the Project report is completed.
This is a truly exciting undertaking and I look forward to the
testimony from our witnesses.
Mr. Watt. Thank you, Mr. Chairman, and thank you for
convening this hearing, and thank Chairman Sensenbrenner and
Ranking Member Conyers for enlisting the able assistance of the
Congressional Research Service to provide guidance, supervision
and a structural framework for this important, massive,
bipartisan undertaking.
As I indicated last year in our hearing in which Justices
Scalia and Breyer offered their insights on the role that the
defunct Administrative Conference of the United States had
played prior to its demise, I found it somewhat ironic that the
agency that had actively worked to make Government smaller,
more efficient and more accountable was itself a victim of the
end of the era of big Government mantra of the 90's by
reauthorizing the Administrative Conference last term. Congress
has now taken the first steps toward restoring an invaluable
mechanism created to improve the content, implementation and
processes of Federal administrative law.
Now, if we could get funding appropriated to fund the
Administrative Conference, this project will serve as a useful
device to sort through and prioritize those systematic issues
in the administrative law arena that cry out for examination
and possible reform.
There is no greater example, as noted by several of our
witnesses in their written testimony, of the need for review of
the effectiveness of administrative law and procedures before
us today than the bureaucratic morass that seemingly and
tragically undermined efforts to save and provide prompt relief
to the countless families and individuals caught in the path of
Hurricane Katrina.
While there will be probing investigations into what went
wrong in the aftermath of Katrina, bureaucratic flexibility in
the face of national disasters or emergencies together with the
interoperability and coordination of efforts at all levels of
Government are vitally important to be considered in this
examination of the current state of administrative process and
procedure.
In addition to disaster-related areas of inquiry, there are
other areas that are deserving of the in-depth review the
project seeks to provide. I believe that overall review not
only of our administrative agencies themselves but also of the
judicial, presidential and congressional roles in the
administrative process, will provide us with a thorough
understanding of how each branch of Government contributes to
furthering or impeding the goals of that process.
As the project progresses to evaluate e-Government and e-
rulemaking, I believe the questions of security, privacy and
access must be considered. While technological advances have
broadened the possibilities of delivering and managing some
governmental services quicker with greater efficiency, these
advances have also broadened the potential for abuse, misuse,
and exclusion.
For example, transparency may invite security concerns,
assembly of vast amounts of personal data may invite privacy
concerns, and the mere use of advanced technology to administer
governmental programs and policies might invite access concerns
for small, disadvantaged or minority stakeholders who have yet
to cross the digital divide.
There are many other issues, privatization, attorneys fees,
judicial comity and the role of executive orders to name a few,
that are important aspects of our system of administrative law
and procedure.
I look forward to continuing to work with you, Mr.
Chairman, on this comprehensive and balanced bipartisan
examination of the state of our administrative law system, and
I thank the witnesses for the insights they will provide to us
today and yield back the balance of my time.
Mr. Cannon. Thank you, Mr. Watt. I have often said that the
most interesting questions of our day are not partisan
questions. This is certainly, I believe, one of them. When we
consider a tenth of the economy is involved in the Federal
regulatory process it is amazing.
Without objection, all Members may place their statements
in the record at this point. Without objection, so ordered.
Without objection, the Chair will be authorized to declare
recesses at any point in this hearing. Hearing none, so
ordered.
I ask unanimous consent that Members have 5 legislative
days to submit written statements for inclusions in today's
hearing record. Without objection, so ordered.
I am now pleased and honored to introduce our witnesses for
today's hearing. Our first witness is Mort Rosenberg,
Specialist in American Public Law in the American Law Division
of the Congressional Research Service. In all matters dealing
with administrative law, Mort has been the Judiciary
Committee's right hand. For more than 25 years, he has been
associated with CRS. Prior to his service with that office he
was Chief Counsel for the House Select Committee on
Professional Sports, among other public servant positions he
has held.
In addition to these endeavors, Mort has written
extensively on the subject of administrative law. We are proud
that he will later this month receive the American Bar
Association's Mary C. Lawton Award for Outstanding Government
Service. Mort obtained his undergraduate degree from New York
University and his law degree from Harvard Law School. Thank
you for being here with us.
Our second witness is Chris Mihm, who is the Managing
Director of GAO's Strategic Issues team, which focuses on
government-wide issues with the goal of promoting more results-
oriented and accountable Federal Government. The strategic
issues team has examined such matters as Federal agency
transformation, budgetary aspects of the Nation's long-term
fiscal outlook and civil service reform. Sort of the easy
things, right? Government reform?
Mr. Mihm is a Fellow of the National Academy of Public
Administration, and he received his undergraduate degree from
Georgetown University.
Professor Jeffrey Lubbers is our third witness. A Fellow in
Law and Government at American University Washington College of
Law, Professor Lubbers brings a unique perspective to today's
hearing with respect to ACUS. As many of you know, Professor
Lubbers worked at ACUS for 20 years, including 13 years as the
Conference's Research Director. A prolific writer on the
subject of administrative law, Professor Lubbers obtained his
undergraduate degree from Cornell University and his law degree
from University of Chicago Law School.
I would also like to mention that about 3 years ago,
Professor Lubbers testified before this Subcommittee at an
oversight hearing regarding the administrative law and privacy
ramifications involved in establishing the Department of
Homeland Security. As a result of this hearing, our
Subcommittee spearheaded the creation of the first statutorily
mandated privacy officer as part of DHS's enabling legislation.
Welcome back, Professor Lubbers. We appreciate that. That
actually has worked out awfully well, we think.
Our fourth witness is Professor Jody Freeman. Professor
Freeman teaches administrative law and environmental law at
Harvard Law School, where she is the Director of the
Environmental Law Program. Prior to joining Harvard Law School,
Professor Freeman taught at UCLA for 10 years. I appreciate
some good Western perspective here. Currently, she serves as
Vice Chair of the ABA Administrative Law Section Subcommittee
on both Dispute Resolution and Environmental Law and Natural
Resources. She also chairs the AALS Executive Committee on
Administrative Law.
Professor Freeman received her undergraduate degree from
Stanford University and her law degree from the University of
Toronto, where I have a son living now. She thereafter received
her master's and doctorate of law from the Harvard Law School.
I extend to each of you my warm regards and appreciation
for your willingness to participate in today's hearing. In
light of the fact that your written statement is being included
in the record, I request that you limit your remarks to 5
minutes. Accordingly, please feel free to summarize or
highlight the salient points of your testimony.
You will note that we have a lighting system that starts
with a green light. After 4 minutes, it turns to a yellow light
and then 5 minutes it turns to a red light. It is my habit,
interestingly it is actually captured here in my notes, to tap
the gavel at 5 minutes. We would appreciate it if you would
finish up your thoughts within that time frame. We don't want
to cut people off in the middle of their thinking, but it works
better if everybody has that rule. It is not a hard rule, just
so you know recognizing 5 minutes has gone by. We are actually
quite interested in what you have to say and if it goes beyond
that, I don't think today anybody is doing to be very
exercised.
We would appreciate that, and I if really start tapping
hard then you know I am bored or Mel is nudging me or
something. After you have presented your remarks, Subcommittee
Members, in the order they arrive, will be permitted to ask
questions of the witnesses subject to the 5-minute limit and
possibly subject to more than one round.
Pursuant to the direction of the Chairman of the Judiciary
Committee, I ask that the witnesses please stand and raise your
right hand to take the oath.
[Witnesses sworn.]
Thank you. You may be seated. The record should reflect
that the witnesses answered in the affirmative.
And Mr. Rosenberg, we would be pleased if you proceed with
your testimony.
TESTIMONY OF MORTON ROSENBERG, ESQUIRE, SPECIALIST IN AMERICAN
PUBLIC LAW, AMERICAN LAW DIVISION OF THE CONGRESSIONAL RESEARCH
SERVICE, LIBRARY OF CONGRESS
Mr. Rosenberg. Thank you, Mr. Chairman. Mr. Chairman, Mr.
Watt, I am very pleased to be here today. I have enjoyed for
many, many years working with your Subcommittee and Raymond
Smietanka and Susan Jensen and with other parts of your full
Committee. I am a wonk in administrative law. I get off on
these kind of things and I have for over 30 years in CRS.
You have asked me here today to discuss and describe the
background, development and goals of your Committee's
Administrative Law, Process and Procedure Project, CRS's role
in that project, what we've done so far, and what we hope to
accomplish in the future.
In my prepared remarks, I have detailed the genesis of your
project, from the coincidence of the briefing that T.J.
Halstead, one of the CRS team, and I gave a full Committee
staff briefing on emerging issues in law and ad process and
your first hearing in the attempt to revive ACUS with Justices
Scalia and Thomas [sic].
My sense at that time was that there was a close nexus
between the demise of ACUS in 1995 and the growing number of
seemingly insoluble process and practice issues over the last
decade, a sense that I tried to convey to the Committee. I was
perhaps influenced by an unknowing dependence upon ACUS. I do
not exaggerate when I say that I have always had within arm's
reach in my 33 years at CRS a full and, until 1995, complete
growing set of ACUS reports and recommendations, which were
often my first resource in responding to clients such as your
Committee.
I was fortunate in the 80's and 90's, when I was deeply
involved in issues involving Executive Order 12291,
presidential review of rulemaking, and some of the first major
efforts at regulatory reform that were going on in those days,
and I was fortunate to call upon for assistance and
occasionally work with Jeff Lubbers when he was Research
Director at ACUS. In any event, I was excited--and I am
excited--at the prospect of working with your Subcommittee,
with the CRS team that includes T.J. Halstead of the American
Law Division and Curtis Copeland, of our Government and Finance
Division, in which to assist in the two-track effort that you
have started. That is, by providing it with background
materials and information to inform the bipartisan effort to
reauthorize ACUS and identifying the issues that might be the
subject of either further study by a revived ACUS and/or
legislative action by the Committee during the 109th Congress.
As you mentioned, success was achieved with regard to the
first effort with the enactment of the Federal Regulatory
Improvement Act of 2004 in October of 2004. But as of this
date, funding legislation has not been passed.
The Subcommittee, however, anticipated the possibility of
an extended delay in the operational startup of ACUS after
passage of the reauthorization legislation and directed its
staff to consider, with the assistance of the CRS team, the
options that would be available to it to accumulate the
information and the data necessary to determine whether action
on a particular issue required immediate legislative attention
or was best referred to ACUS for further in-depth studies and
recommendations.
And after extended discussions, such traditional approaches
that have been used in the past, such as a series of
informative hearings by the Committee, possible establishment
of a study commission, or the creation by the Committee of a
study group, were rejected in favor of seeking and utilizing
the assistance of resources outside of Congress and the
Committee, such as academic institutions, think tanks, CRS, the
Government Accountability Office, among others, and the
potentiality of utilizing forums for the airing of issues
outside of Washington were deemed important.
The staff proposed and the Committee adopted a unique
course of action. And I underline that what you're doing here
is pretty unique. It is novel in the way it is reaching out
beyond the Beltway to try to get a diversity of opinions and
compile a record outside which might be more reflective of what
is really going on and what real practical thoughts are out
there.
What you did was pursuant to the House rule requiring
Committee adoption of an oversight plan for the 109th Congress.
The full Committee made a study of emergent administrative law
and process issues a priority oversight agenda item for the
Subcommittee. Among the benefits of so identifying the study as
a Subcommittee priority was to give it the imprimatur of
official legislative legitimacy and importance which might, in
turn, be useful in enlisting the voluntary assistance and
services of individuals and institutions throughout the Nation.
The oversight plan identified seven general areas for
study: public participation in the rulemaking process,
congressional review of rules, presidential review of agency
rulemaking, judicial review of rulemaking, the adjudicatory
process, the utility of regulatory analyses and accountability
requirements, and the role of science in the regulatory
process.
The CRS team was designated by the Chairman and Ranking
Minority Member to coordinate this project. Its first task was
to take these seven broad study areas and identify or define
potential questions or issues for research. The thought was not
to limit research to those matters within the combined
experience and expertise of the team members, but to develop
theme packages in order to sell a package or a particular issue
to a law school or university graduate school, a public agency
or a consortium of those institutions for systematic, in-depth
studies by means of empirical studies and papers conducted and
prepared by leading experts in the particular areas which might
be followed by public presentations and findings of symposia
that would reflect these competing views.
Hopefully, the end product of that exercise is to be a
compilation of the papers and the transcripts of the various
public symposia similar to the two-volume working papers of the
National Commission on Reform of Federal Criminal Laws
published by your Committee in 1970, which contains 59 studies
covering all aspects of the then current issues in criminal law
reform. Those studies actually informed Congress' subsequent
successful reform efforts.
As of this date, two major empirical studies are underway,
and one forum is scheduled for this room on December 5th.
One, being conducted under the direction of Professor Jody
Freeman of Harvard Law School, is looking at the nature and
impact of judicial review of agency rulemaking over what
appears to be now a 13-year period in the 11 Federal Circuit
Courts of Appeals. Professor Freeman is a fellow panelist today
and will describe her plan for this very daunting and important
undertaking.
The second study is being led by Professor William West of
the Bush School of Government and Public Service at Texas A&M
and will be looking into the influences on the initiation,
design and development of new rules at 20 agencies during the
period prior to the publication of notices of proposed
rulemaking for public comment in the Federal Register.
Professor West will be assisted by eight graduate students, and
the study is in part funded by CRS's Capstone Program grant.
Both studies are expected to provide at least preliminary
results by the spring of 2006. The third thing is the forum
that is going to be lead by Professor Cary Coglianese here on
e-rulemaking. There will be two panels of experts from the
private sector, from the public sector, from Government, and
they will be speaking with regard to the problems and
potentialities of e-rulemaking as a way of fostering public
participation.
Some other projects that we hope to place include a mega-
project dealing with the problems that appear to be arising
with presidential rulemaking, through executive orders, and the
Congressional Review Act. That is the mechanism by which in
1996 Congress hoped to have a more effective oversight role and
to balance what was going on under the executive order system.
It appears apparent that there are problems. In the last
few years under the leadership of OMB Administrator John
Graham, it appears the balance between Congress' review efforts
and the control and direction of, and influence on agency
rulemaking has extended to the extent that one could say that
perhaps there is a constitutional imbalance that needs to be
redressed. But again, as Professor Freeman notes in her
statement, empirical study is really necessary to understand
just exactly how effective and perhaps untoward the
presidential review mechanisms are.
Let me stop here and allow others to talk. There are a few
other projects that we want to institute, but we can talk about
those from your questions. I thank you.
[The prepared statement of Mr. Rosenberg follows:]
Prepared Statement of Morton Rosenberg
Mr. Cannon. Thank you, Mort. The gentleman from North
Carolina and Ranking Member of the Subcommittee is also the
Chairman of the Congressional Black Caucus and has been
extraordinarily busy with the passing of Rosa Parks, and so he
has been concerned about his time. I leaned over and asked him
if he thought I should tap, and his response was more or less
no, this is great because we don't have to read it. And so I
suggest that is exactly my view, by the way. And so we are
going to be a little bit liberal, in fact, forget the clock.
Just be interesting and, if you see one of us nodding off, then
you know you have probably gone on too long.
Mr. Rosenberg. I have one or two----
Mr. Cannon. We would like to hear that. Before you do so,
let me suggest that we may be a little bit loose on the
questioning too. As you were going through what were saying,
Mort, it had occurred to me, are you familiar with WIKIsikis or
Wikipedia, any of the panel? This is like a way for people to
get online and work together. And you should look up Wikipedia,
W-i-k-i-p-e-d-i-a, not the word spelling with the extra `a,'
and it is actually remarkable. It is a great encyclopedia that
is created by people all over the world. And I suspect that,
while we don't have this broad a base for the Administrative
Procedure Act as we do have for an encyclopedia, there are many
people that are interested and so a public forum, it might be
interesting as part of the process you're considering. There
are other tools. My office uses a tool called Net Documents,
which most large law firms use, and it is a way to work
collaboratively online. You may want to think about some of
these tools in the process because if some wonk somewhere can
take 5 minutes and review the latest activity and says, ``Wow,
you're wrong, you have missed an idea,'' it is a great way to
really get a collaborative process. In the end, what we need
here is not just a bipartisan process, we need a process the
American people buy into because we are talking about 10
percent of our economy here. And that 10 percent does many
things.
We were joking earlier about whether it does good things or
not and it probably does, but it also limits the output of our
economy in a dramatic way. So to the degree that we can remove
obstacles that are not helpful, maybe create new obstacles that
would be more helpful to what we don't have right now, and be
more rational, we would do well. And that I think means that
you might have a very, very large group of people that get
engaged in that process.
Thanks, Mr. Mihm. You're recognized for 5 minutes or
whatever.
TESTIMONY OF J. CHRISTOPHER MIHM, MANAGING DIRECTOR OF
STRATEGIC ISSUES, UNITED STATES GOVERNMENT ACCOUNTABILITY
OFFICE
Mr. Mihm. Thank you, Mr. Chairman and Mr. Watt. It is an
honor to be here. And Mr. Chairman, I will try and take your
challenge of being interesting. That is a high bar but I am
very pleased to be here and to contribute to your overview of
Federal rulemaking and obviously we look forward to supporting
this Subcommittee in its comprehensive and bipartisan review as
you move forward.
As you mentioned in your opening statement, sir, over the
last decade or so, at the request of Congress, we have prepared
over 60 reports and testimonies reviewing cross-cutting aspects
of rulemaking procedures and practices. Overall that work has
found that--has identified important benefits of the efforts to
enhance Federal rulemaking. At the same time, we have also
pointed out some potential weaknesses and impediments to
realizing those expected improvements. We have also identified
some trends and challenges in the rulemaking environment that
have emerged over the years that in our view merit closer
congressional attention and consideration.
I will touch on each of these points in turn. In terms of
the benefits then, as detailed in my written statement, our
review has identified at least four overall benefits associated
with existing regulatory analysis and accountability
requirements. First, encouraging and facilitating greater
public participation in rulemaking that clearly gives
opportunities for the public to communicate with agencies by
electronic means have expanded and requirements imposed by some
of the regulatory reform initiatives have encouraged additional
consultation with affected parties.
Second, improving the transparency of the rulemaking
process. Initiatives implemented over the past 25 years have
helped to make the rulemaking process more open by facilitating
public access to information, providing more information about
the potential effects of rules and available alternatives, and
requiring more documentation and justification of agency
decisions.
Third, increasing the attention directed to rules and
rulemaking. Our reports have pointed out that the oversight of
agencies' rulemaking can and has resulted in useful changes to
those rules and furthermore that agencies' awareness of this
added scrutiny may provide an important and direct effect,
potentially leading to less costly, more effective rules.
And finally, increasing expectations regarding the analytic
support for proposed rules. The requirements that have been
added over the years have raised the bar regarding information
and analysis needed to support regulations. Such requirements
have also prompted agencies to provide more data on the
expected benefits and costs of their rules, and encouraged the
identification and consideration of available alternatives.
On the other hand, as I mentioned, we have also identified
at least four recurring reasons why reform initiatives have not
been as effective. I think these are certainly consistent with
the research agenda that the Subcommittee is putting forward.
First, there has been a lack of clarity and other
weaknesses in key terms and definitions. For example RFA's
analytical requirements, which were intended to help address
concerns about the impact of rules on small entities, do not
apply if an agency head certifies that the rule will not have,
``a significant economic impact on a substantial number of
small entities.'' However, RFA neither defines this key phrase
nor, importantly, places responsibility on any party to define
it consistently across the Government, which not surprisingly
has led to quite a bit of variance.
Second, the limited scope and coverage of various
requirements. For example, we pointed out last year that the
relatively small number of rules identified as containing
mandates under the unfunded mandates legislation could be
attributed in part to the 14 different exemptions, exclusions
and other restrictions on the identification of regulatory
mandates under the act.
Third, the uneven implementation of the initiatives'
requirements. For example, our reviews of economic assessments
that analyze regulations prospectively has found that those
assessments are not always useful for comparisons across
Government, because they are often based on different
assumptions of the same key economic variables.
And finally, a predominant focus on just one part of the
regulatory process, and Mr. Chairman, in your opening statement
this is certainly a point you were making. We have placed more
analytic and procedural requirements on agencies' development
of rules than on other phases of the regulatory process, from
the underlying statutory authorization, through effective
implementation and monitoring of compliance with rules, to an
evaluation of existing rules. What are we actually getting in
terms of benefits and costs associated with rules?
Thus, while rulemaking is clearly an important point in the
regulatory process, other phases can also help determine the
effectiveness of Federal regulation.
The findings and emerging issues reported in our body of
work on Federal rulemaking suggest a few areas in which
Congress might consider legislative action or further study,
which are of course certainly consistent with those issues that
are laid out in the Subcommittee's oversight plan and also as
Mort was touching on in his written statement.
We believe that first there is a need to reexamine
rulemaking structures and processes, including APA, again a
point, Mr. Chairman, you made in your opening statement.
Second, there is a need to address previously identified
weaknesses of existing statutory requirements.
Third, we should promote additional improvements in the
transparency of agencies' rulemaking actions.
And fourth, a point, Mr. Watt, that you were making in
regards to information technology, we need to open a broader
examination of how developments in information technology might
effect the notice in common under rulemaking process. And as
you pointed out, sir, there are key issues of security,
transparency and access that all need to be carefully weighed
and balanced off against one another.
Mr. Cannon, Mr. Watt, this concludes my statement. I will
be happy to answer any questions you may have.
[The prepared statement of Mr. Mihm follows:]
Prepared Statement of J. Christopher Mihm
Mr. Cannon. I thank you very much. You know you talk about
a high bar. For APA wonks, the bar appears substantially lower.
Like a heartbeat probably works.
Mr. Lubbers, we appreciate your testimony now.
TESTIMONY OF PROFESSOR JEFFREY S. LUBBERS, FELLOW IN LAW AND
GOVERNMENT PROGRAM, WASHINGTON COLLEGE OF LAW, AMERICAN
UNIVERSITY
Mr. Lubbers. Thank you, Mr. Chairman, Mr. Watt. It's great
to be here with my distinguished panel members today, and I
guess I do qualify as an administrative procedure wonk having
worked in the area for so long.
I found much to agree with in my fellow panelists'
statements and very little to disagree with.
I first want to applaud you and your Committee for leading
the successful effort to reauthorize the Administrative
Conference, which had to close its doors--exactly 10 years ago
yesterday, by the way.
I truly believe it was one of the Federal Government's most
cost effective institutions and it has been sorely missed.
I view this hearing as an opportunity to suggest a research
agenda for ACUS that would help convince the appropriators that
the relatively small investment in ACUS would be repaid many
times over.
I also applaud the Committee for sponsoring a series of
empirical research projects that would provide reliable data
for a reconstituted ACUS to use in making recommendations to
use in improvements in the administrative process. I think it
is a great idea and the two projects already underway to be
carried out by Professor West and by Professor Freeman should
be invaluable to all of us.
Let me say that I think there is one analog that I can
recall the Senate Governmental Affairs Committee back in the
late 70's, maybe early 80's, late 70's, did a series of
empirical studies that provided a very good basis for
regulatory reform proposals in the 80's.
I have provided the Committee with a lengthy menu of topics
that I believe might form the research agenda of a revived
ACUS. I group these topics into several major areas.
First, the rulemaking process. The notice-and-comment
rulemaking process is the preferred way for most agencies to
make policy. However, this process has become much more
complicated in the last 35 years due to additional procedural
and analytical requirements, to the point where many
commentators are worried that the process has become too
difficult--or ossified, to use the two-dollar word. And
agencies seem to be increasingly trying to avoid these
requirements by making policy through less visible types of
nonrule rules, such as guidance documents that are not subject
to notice and comment.
Therefore, I believe that one area researchers should
pursue is the increasing complexity of the rulemaking process.
For example, agencies are required to prepare about a dozen
separate analyses in rulemaking. A study of the costs and
benefits of these impact analyses and how they could at least
be consolidated would be useful.
I also agree with Mort Rosenberg that the systems for both
White House and congressional review of agency rules should be
examined to see what kinds of changes agencies have made in
proposed rules, and how the length of the rulemaking process
has been affected.
There is also a renewed emphasis on the need for sound
science in rulemaking. Last January OMB issued a bulletin that
requires administrative agencies to conduct a peer review of,
``scientific information disseminations.'' This followed
enactment in year 2000 of the Information Quality Act, which
was inserted as an undebated amendment into an omnibus
appropriations bill.
The IQA requires every agency to issue guidelines to ensure
the quality, objectivity, utility and integrity of information
disseminated by the agency.
These two OMB-overseen initiatives require significant
agency implementation activities, but it is unclear at this
point how they have affected the rulemaking process or whether
they have provided any improvements in regulatory science.
Another study I recommend is to find out what is holding
back negotiated rulemaking. Since the mid-90's its use has
plateaued or even fallen despite its great promise. It would be
useful to mount a major study of why it is faltering and what
should be done to revive it.
The other major change, as others have mentioned, to the
rulemaking process has been the impact of the Internet, leading
to what is called e-rulemaking. Since ACUS's defunding, there
have been enormous developments in this area especially in the
technology. But the legal developments are moving more slowly.
I have tried to catalog the legal issues that provide
challenges to the twin goals of better information
dissemination and increased public participation in the
rulemaking process.
These legal issues include such things as how to best
integrate the data, docketing questions, archiving, copyright
protection, security, and privacy just to name a few.
Beyond the rulemaking process itself, there are a lot of
broader regulatory issues that need study: regulatory
prioritization, retrospective reviews of agency rulemakings to
see how the actual costs and benefits match the predicted costs
and benefits, alternative approaches to regulation and
enforcement--something that my colleague Jody Freeman has
written very excellent articles about. Use of waivers and
exceptions--something we have heard a lot about after the
Katrina hurricane--federalism issues, and agency structural
issues, such as how should departments and commissions be
structured.
There are also some pressing issues of administrative
adjudication. The ALJ program, Administrative Law Judge
program, is still having problems with agencies seeking to use
other types of hearing officers too often. Agency appeal boards
are coming under scrutiny in the immigration, Social Security
and patent and trademark areas. And mass adjudication programs
like the Social Security Disability program are facing huge
backlogs and caseload pressures.
And finally, there are recurrent issues concerning judicial
review. The agency-court partnership is of obvious concern to
all three branches of Government as exemplified by the Chevron
case, in which the Supreme Court basically told the judiciary
to defer to reasonable interpretations of statutes made by
executive agencies. This simple dictum has spawned many cases
concerning what this deference should consist of and to what
types of interpretations it should be applied.
There is no shortage of scholarly commentary on these
cases. But there is an absence of consensus-building around
this issue. The courts are struggling with these issues, and a
renewed ACUS could help provide some focus for the courts.
One other judiciary issue I will mention, which relates to
attorneys' fee issues. This is something that ACUS had a role
in, in overseeing the rules under the Equal Access to Justice
Act. But a recent Supreme Court decision has limited what is
meant by the term ``prevailing party'', which allows parties to
get attorneys' fees. The impact of this decision should be of
great interest to Congress, which could of course make its
intent clear if it so wished.
In conclusion, let me say that this is a short summary of a
lengthy list. But even the full list is hardly a comprehensive
menu of projects that could be tackled by a revived ACUS. It is
a collection of issues that have accumulated in the past
decade. The new ACUS chairperson and his or her counsel would
obviously have their own priorities. But I hope that this
listing does show the need for a revised and continuing focus
on the administrative procedural issues that often get short
shrift but can make or break the success of governmental
programs.
For 28 years ACUS provided a low cost center of research
scholarship and consensus-building on administrative law within
the Federal Government and I believe that now, through the
efforts of you and your Committee, that ACUS has been
reauthorized, it should be funded as soon as possible. Thank
you, and I look forward to your questions.
[The prepared statement of Mr. Lubbers follows:]
Prepared Statement of Jeffrey S. Lubbers
Mr. Cannon. My sentiment about funding exactly. I have been
sitting here trying to figure out how we in an era of reducing
programs by number as opposed to improving Government through a
process is more important. We are working on that. Thank you,
and appreciate your comments.
Professor Freeman.
TESTIMONY OF PROFESSOR JODY FREEMAN,
HARVARD LAW SCHOOL
Ms. Freeman. Mr. Chairman, Mr. Watt, members of the staff,
I am delighted to be here today. As you know, I specialize in
administrative law and I want to line up on your side in terms
of being excited all the time about administrative law issues.
If anybody wants to keep talking about it after the end of the
hearing I will stay as long as anyone likes. It is hard to find
friends. Administrative law and administrative process issues
have a PR problem in this regard, and I think that is part of
the reason.
I have spent a lot of time trying to think about how to
rename the field. Things like ``Government, power and you''
come to mind. But I want to focus on two points of my
testimony. I have gone on at length in my written testimony,
and I won't repeat all of it.
First, I want to express the absolute clarity of the need
for empirical research on what Government agencies do and how
well they do it. We know precious little. We don't know much at
all about the very important process of generating rules which,
as you all well know, reach every corner of our economy and
every aspect of social life. The high volume of rules coming
out of agencies like DHS and EPA and HHS and DOT, these rules
have the power, the effect of legislation. And yet we know
almost nothing about how well we are doing this and how we
might improve it. And there is a clear need, as this Committee
well knows, for an informed approach to congressional law
reform efforts.
As you know, Congress passes a few hundred laws every year.
The Supreme Court issues maybe between 70 and 100 cases every
year. And yet we have thousands of rules coming from the
Federal Government every year, and we have almost no--I feel
safe in saying--only almost no careful empirical analysis of
what agencies are doing.
And this is a really serious, I think, problem because we
can't answer some essential questions. We can't answer the
question yet, how well is congressional review of agency
rulemaking going? We can't answer whether OMB oversight is
effective and whether it is effective for some agencies or not.
Some agencies may perform cost-benefit analysis particularly
well, some agencies maybe fairly poorly. We can't answer the
question, have we heaped on too many of these analytic burdens
so that we are actually undermining the ability of agencies to
promulgate rational, defensible, smart rules?
Intuitively you would expect more oversight, more analysis,
more information to help the rulemaking process. But the
problem is that we don't know how well we are actually
performing.
So we have only scratched the surface in starting to
explore these issues, and I think a coherent, comprehensive
empirical research project would be enormously helpful to your
efforts in Congress to either avoid law reform that is wasteful
and distracting and just a bad idea, and to target your law
reform efforts and your money and your time on things, on
measures that will be beneficial. There will be short term
measures, longer term measures, but what you want I believe is
a list of priorities and a sense of where you will get the most
bang for your proverbial buck. And I think that is something
that a revived ACUS that is appropriately funded can really
contribute to.
There are many myths about the administrative process.
There is a figure that we all know about which circulated for
years which was a figure that claimed that 80 percent of EPA's
rules got challenged, and administrators of EPA cited this and
people cited it in congressional testimony. And the truth is
there was absolutely no empirical basis for the figure. People
just thought it was 80 percent.
This is not the way one ought to go about law reform and
planning for administrative decision making.
There is a similar figure floating around, and I believe
there is a preliminary study that CRS did--I may be wrong about
that--but there is a figure floating around that 50 percent of
rules that get challenged upon judicial review get struck down.
Some people believe it is as high as 50 percent. This is
something the study I am doing is looking at, and the truth of
the matter is we just don't know. We don't know how well rules
fair when they get challenged.
So I will be happy to talk a little bit about the study and
give you a sense of it. We are at the preliminary stage, but
this is the kind of thing we want to know about. Because it
would be a big mistake and a waste of resources to conclude
that so many rules are being challenged and so many rules have
been struck down that the process isn't working and Congress
ought to intervene to fix it if in fact that is not the case.
So we really need to know the answers to these questions.
Just briefly, the study that I am conducting I think can
help shed some light on at least how one project is going about
looking at the judicial review of rulemaking and also I think
shed a little bit of light on the cost involved.
This study grew out of conversations between me and staff
at the Congressional Research Service, in particular, Curtis
Copeland, which of course stem from this Committee's interest
in sponsoring empirical work. And we focused on the fate of
agency rules upon judicial review. This study is the most
comprehensive study I am aware of. We look at a database
initially of 10,000 cases but culled to 3,000 cases, of which
we think there are about 20 percent involving rulemaking,
challenges to rules. So we think we are going to end up with
about 600 cases, which is a very big database of cases, and
every one of them is being coded in the most deliberate manner
so that what we can pull out of this data would be preliminary
inferences, preliminary answers to questions like how many
rules do get struck down across all of the 11 circuit courts?
How often do interest groups of a particular type succeed in
challenging rules? Does it make a difference what agency
promulgated the rules? Do some agencies always win, do some
agencies always have their rules struck down?
We don't know the answers to these questions, and we are
coding the data for even more than that. So if we want to ask
even more detailed questions; for example, how do you do across
the circuits? How does the Fifth Circuit compare to the First
Circuit? Does it matter which panel of judges you come before
in terms of the rate at which they strike rules down?
All of these questions we are asking and we should be able
we hope to infer something here as well about how closely
judges are really reviewing rules because we are going to code
the reasons why the rules are struck down, the basis for
challenging why they are struck down when they are struck down.
So we should be able to tell something about whether the courts
are reviewing rules with a very serious, rigorous kind of
approach which we would call ``hard look review'' or whether
they are giving these rules rather a soft glance and not being
particularly rigorous in reviewing them.
So I am happy to talk more about that study. I will tell
you something about what it costs, and this leads to this
problem of incentives to do this kind of research. I will be
very honest with you, law professors really don't want to do
this. And the reason is not because we are not interested but
you don't get tenure for it. These kind of empirical studies
give us very few rewards. Luckily I have tenure. I can just be
interested in it. But without incentivizing this kind of work
that means without a body like ACUS that can draw on academic
expertise and tempt academics by saying--guess what, you can
interact with some of the best minds in practice, some of the
best minds in agencies, you will have lots of access to this
collaborative, cooperative exercise, without incentives--it is
going to be very hard to generate this kind of work, the work
that you need to inform your efforts.
The other thing I want to mention about empirical work is
it takes time and money. It is slower going than we would like.
It is hard to do. My project involved an empirical expert who
directs empirical research at UCLA School of Law where I
formerly was a professor before I joined Harvard. You need
someone with that kind of statistical expertise to do this work
so it's reliable and credible for your purposes. I have a team
of four research assistants. These people are very underpaid,
and I need even more of them to do this properly. The project
is probably easily costing $10,000 for the first cut through
the data, and I imagine it will get easily to $20,000, and the
generosity of the Dean of the Harvard Law School is making this
possible. There is no other source of funding to do it.
As you well know, Mr. Chairman, it is very hard to go out
to foundations or anybody and say I am doing a fascinating
project on the administrative process, even though it is about
the way the American Government works and how well it works.
Finally, my second big point and my most important point I
think here for your purposes may be to reinforce the need to
invest in ACUS. A small investment is going to go a very long
way. This is a body that is going to be able to make
recommendations in a way that no other body can. The American
Bar Association doesn't have the legislative clout and the
credibility with agencies that ACUS will have. There is a
Center for Rulemaking that Professor Kerwin has initiated at
the American University. It is a very interesting center, but
it doesn't have the resources. It doesn't have the ability to
do the kinds of things that ACUS can do. And as Justice Scalia
noted very clearly, there is a big difference when ACUS comes
to agencies and says we want to study you. They perceive that
as potentially helpful, and not as something that will
potentially be an obstacle that will get in their way.
I really believe that ACUS is a bargain for Congress. And
as you mentioned, Mr. Chairman, as other panelists have
mentioned, it is clear that funding ACUS to a tune of the
several million dollars should not be seen as in competition
with other efforts that are very pressing in the Federal
Government. ACUS can help to improve our efforts, as you
mentioned, in terms of disaster relief response and also in
terms of security, national security concerns. If you make
Government work better and you figure out ways to improve it,
you're going to assist in all those endeavors. It is well worth
the investment.
I just want to add to Professor Lubbers' long list a few
ideas for what I believe is really the next generation of ACUS.
Ten years is a long time. Things have changed since ACUS was
around, and there is, as Professor Lubbers has mentioned, a
backlog of work to do. But in particular a few things have
developed that I think are very worthy of ACUS's time. One has
been mentioned here today, privatization and contracting out.
We really do not have administrative procedures adequate to
guide privatization and contracting out. Private service
providers are increasingly performing functions we have
traditionally thought of as public, including functions
associated with the military functions, prisons, national
security. And the truth of the matter is most of these actions
typically fall outside of the administrative law process and
protections. And we need to think carefully about that. ACUS
can spearhead in a bipartisan way a project to think about
that.
Second, I do want to mention it is the 10th anniversary of
the Small Business Regulatory Enforcement Fairness Act and
there have been concerns that small businesses are not the ones
benefiting from getting an early look at these rules, but
rather that, potentially, big business is driving the small
business agenda. It is something that Congress may be
interested in, something certainly that ACUS could look at.
And finally, where ACUS could direct further research, as
again has been mentioned here today and I want to reinforce it,
is the reconciliation of the administrative law principles of
fairness and openness and transparency and effectiveness with
the clear imperatives of national security. This was not on the
radar screen 10 years ago, and it is front and center on the
radar screen right now.
There are agencies in the Federal Government that are not
subject at the moment to the kind of rigorous cost-benefit
analysis and the kind of other requirements that we impose on--
that we normally impose on the process. And how are we going to
reconcile the need to protect our national security while at
the same time not abandon the norms and principles that inform
administrative law? I think that's a huge challenge. I don't
know the answer.
But we are operating with a 60-year-old document, the
Administrative Procedure Act, and we need to think very
carefully about where and how to engage in reform. And I think
ACUS will be well worth a small investment of Congress' time
and money. Thank you.
[The prepared statement of Ms. Freeman follows:]
Prepared Statement of Jody Freeman
Mr. Chairman and Members of the Subcommittee:
Thank you for the invitation to testify at the Oversight Hearing on
the Administrative Law, Process and Procedure Project.
I am a Professor of Law at Harvard Law School. I specialize in
administrative law and environmental law. My scholarship focuses on
congressional delegation of authority to agencies, inter-agency
coordination, public-private collaboration, dispute resolution,
regulatory innovation, and privatization. I am the Vice-Chair of the
American Bar Association Administrative Law Section Sub-Committee on
Dispute Resolution as well as the Vice Chair of the Sub-Committee on
Environmental Law and Natural Resources. I am the current Chair of the
American Association of Law Schools (AALS) Executive Committee on
Administrative Law.
My testimony focuses on two points: (1) the need for empirical
research to support congressional law reform efforts in administrative
law; and (2) the benefits to be gained by funding the Administrative
Conference of the United States (ACUS) to produce and sponsor such
empirical research. I will also describe the empirical project on
agency rulemaking that I have undertaken in consultation with the
Congressional Research Service (CRS), a project that I hope will
further this Subcommittee's Oversight Plan and which might help to
inform other empirical studies sponsored by ACUS, should it be funded.
Although I will confine most of my remarks to the topic of rulemaking,
the scope of what ACUS can and should undertake to study is broader. I
will briefly touch upon some other matters ACUS might examine if it is
funded, but a more developed proposal for the agency's agenda will be
offered by my co-panelist, Jeffrey S. Lubbers.
I. THE NEED FOR EMPIRICAL RESEARCH TO ASSIST CONGRESSIONAL LAW REFORM
As this Subcommittee has noted, Congress needs more information on
rulemaking and other aspects of the administrative process in order to
focus its law reform efforts. We know precious little about the
administrative process. Consider: Each year, Congress enacts a few
hundred laws, the Supreme Court hands down fewer than a hundred
decisions, and regulatory agencies promulgate several thousand rules.
Yet while the legislative and judicial processes are the object of very
close scrutiny and rigorous empirical analysis, the rulemaking process
attracts strikingly little scholarly attention. Are rules effective?
Are they produced in a timely manner? Are they produced with sufficient
public input? Are they cost-effective? Do congressional and executive
oversight mechanisms improve rules? Are rules challenged frequently? Do
most challenged rules survive judicial review? We simply cannot answer
these questions. The dearth of empirical research on rules is
especially problematic given the importance of rulemaking as a vehicle
for social and economic policy. Many rules have very significant social
and economic effects. The agencies that produce a high volume of rules,
including the Department of Transportation, the Environmental
Protection Agency, the Department of Homeland Security, and Health and
Human Services affect virtually every corner of the U.S. economy and
every aspect of social life. Yet our empirical knowledge of the
effectiveness of their rulemaking processes remains woefully thin.
Without the benefit of reliable empirical research, Congress might
waste both time and money on law reform efforts that are neither
necessary nor effective. It would be a mistake, for example, to add
more oversight mechanisms to rulemaking if the existing measures, such
as cost-benefit analysis and peer review, work well. Intuitively, one
would expect these additional steps to improve the quality of
rulemaking, yet we cannot say with confidence whether or not this is
true. Among the questions to be investigated are: How well do agencies
perform these analyses? Do these oversight mechanisms improve the
quality of rules? Do they slow down the rulemaking process
unnecessarily? Are they a net benefit or a net cost? While we have some
preliminary evidence on these questions, scholarly work to date has
only scratched the surface.
Moreover, to the extent that scholars do study the rulemaking
process, the majority of attention focuses on ex ante processes in
rulemaking (such as cost-benefit analysis). There is virtually no ex
post empirical study of the rules themselves. To put a finer point on
it, we do not know how well rules are implemented and whether they
achieve their goals, and we lack mechanisms for feeding such ex post
evaluation back into the rulemaking process.
Indeed, we have not even agreed upon what measurement tools we
would use to answer the most basic questions. For example, how would we
answer the question, Are regulatory agencies getting better at
rulemaking? Would we look to see if the agency is doing a better job of
setting its priorities? Whether it is issuing rules faster than it used
to? Doing a superior job of analyzing scientific data? Obtaining more
feedback about the effect of its rules, and integrating it into
decision making? Congress might be interested in knowing the answer to
these questions before it undertakes reform. Perhaps agencies that are
less successful at one or more of these steps might be encouraged to
adopt the ``best practices'' of the more successful agencies. Congress
might wish in some instances to require the adoption of certain
practices across the board. With only anecdotal and impressionistic
evidence, however, Congress would simply be guessing at what works.
There are many myths about the administrative process that persist
for years, despite their dubious origins. For example, scholars and
practitioners of administrative law long subscribed to the widely-held
belief that the vast majority--80 per cent--of regulations issued each
year by the Environmental Protection Agency (EPA) were challenged in
court. This statistic was relied upon by academics, legislators, and
journalists, quoted by successive administrators of EPA, and cited
before congressional committees as truth. The only problem was that the
statistic had no factual basis. Indeed, one empirical study
investigating its accuracy determined that no more than 35 per cent of
the EPA's rules were challenged. This rate of challenge is still
significant, and might justify law reform efforts aimed at reducing
legal challenges to rules. Yet the example ought to make us cautious.
Some concerns about the administrative process might be overstated, and
some understated. There may be similar mistaken assumptions about how
many rules are invalidated upon judicial review. Some believe the
figure is as high as 50 per cent, but we don't really know. It would be
a mistake to conclude, without knowing the real rate, that Congress
needs to intervene to address this perceived problem. Only with good
data can Congress choose wisely where to invest its resources, and
prioritize which law reform efforts are most needed now, and which
might be longer-term efforts.
In its Oversight Report, this Subcommittee has already identified
issues that require further study, including (1) public participation
in the rulemaking process; (2) Congressional review of rules; (3)
Presidential review of agency rulemaking; (4) judicial review of agency
rulemaking, (5) the agency adjudicatory process; (6) and the utility of
regulatory analysis and accountability requirements; and (7) the role
of science in the regulatory process. I agree that these are important
areas for examination and, after discussions with the CRS, I agreed to
undertake an empirical study of one of these issues: the judicial
review of rulemaking. I describe the study below.
II. DESCRIPTION OF FREEMAN/DOHERTY EMPIRICAL STUDY:
JUDICIAL REVIEW OF RULEMAKING
Origin of the Study
This study grew out of conversations with the CRS about this
Subcommittee's interest in empirical work on the administrative
process. Among the important subjects CRS identified for scrutiny at
the behest of this Subcommittee is the fate of agency rules upon
judicial review. I agreed to do an empirical study on this topic
together with Joseph Doherty, Associate Director for Research in the
Empirical Research Group at the UCLA School of Law, and with the help
of a team of research assistants at Harvard Law School. We expect to
have preliminary results in January 2006 and a final report by the end
of August 2006.
Purpose of the Study
The goal of the study is to investigate what happens to rules upon
judicial review, including the rate at which they are struck down; the
reasons why they are struck down or upheld; and any trends in the cases
that might be attributable to differences in (1) the agencies
generating the rules; (2) the litigants challenging them; or (3) the
Circuits hearing the cases. While this study is only a beginning, we
expect it to yield useful data on what is actually happening to agency
rules after they are promulgated and once they are challenged.
Database
We are using a comprehensive database consisting of all federal
appellate cases involving administrative agencies (not just challenges
to agency rules) from 1991 to 2003. The database consists of 3,075
cases that were decided in the Circuit courts during this thirteen-year
period. The database was culled from an initial database of 10,000
cases, which was collected and partially coded by the Administrative
Office of the Courts. We obtained the original database with the
assistance of the CRS. To my knowledge, this database is unique in its
breadth and in the time span it covers.
Preliminary Report
We are in the process of identifying those cases in which an
agency's conduct in promulgating a rule was challenged. This includes
both formal and informal rulemaking. Preliminary analysis suggests that
approximately 20 per cent of the cases will be identified as rulemaking
cases. Thus, we expect to analyze approximately 600 cases of
rulemaking, a significant number and far in excess of the number of
cases that have been examined to date. We will read every case in this
group, and collect highly detailed information about who challenged the
rule, the basis for the challenge, and the reasoning behind the court's
decision to uphold or overturn the agency's action. This information
will be collected and entered into a database. Analysis of the data
will permit us to make inferences about general characteristics and
trends in the courts' reasoning.
Relevance
Why does this research matter? Right now, we simply do not know
whether agency rules are generally upheld or not, or whether some
agencies are more likely to have their rules struck down compared to
others. Nor do we know whether challenges brought by certain types of
groups are more successful than those brought by others. Moreover, we
lack comparative knowledge about different Circuits i.e., whether
outcomes vary across the Circuits, or indeed across specific panels of
particular judges. In addition to shedding light on these matters, the
study should enable us to say something about the extent to which
courts are taking a ``hard look'' at agency rules (meaning that courts
closely examine the rulemaking process), versus a more cursory ``soft
glance'' kind of review (in which review is less exacting). Without
answers to these questions, we cannot begin to answer the broader
question of whether the rulemaking process is producing effective rules
(or at least rules resistant to judicial invalidation), and whether
judicial review is performing its intended function.
III. THE BENEFITS OF FUNDING THE ADMINISTRATIVE CONFERENCE
OF THE UNITED STATES
Funding ACUS requires a relatively small investment but has the
promise of big returns. I echo what this Subcommittee heard in the
108th Congress from Justices Scalia and Breyer, among others, about the
unique role that ACUS has played in the past by serving as a remarkably
productive and bipartisan ``think tank'' for administrative law reform.
I agree with the consensus view that at past funding levels, and at
funding levels being considered by the 109th Congress, ACUS was and
will continue to be a bargain. Its key strength is in bringing together
academics, experienced practitioners, and agency officials--people of
great distinction from both the public and private sectors--to think
carefully and systematically about sensible good government reform. As
Justice Scalia only half-jokingly pointed out, many of these people
charge very high billable rates; Congress gets their help for free.
As I argued above, and as this Subcommittee well knows, there is an
obvious need for empirical study of the administrative process, and
ACUS is the institution best situated to generate and sponsor high
quality research. The need for empirical research, particularly in the
area of administrative law, is increasingly being recognized. In July
2004, the American University launched the Center for the Study of
Rulemaking, which has as its mission examining and improving the
processes used by government agencies to develop regulations. The
Center has organized two conferences: one on e-rulemaking and another
on the state of rulemaking in the federal government. While not devoted
solely to empirical research, the Center has encouraged such study.
Likewise, the American Association of Law Schools (AALS), a non-profit
association of 166 law schools, has set ``empirical scholarship'' as
the theme of its annual meeting in 2006. I am Chairing the
Administrative Law Section meeting this year at the AALS and, in line
with the overall theme, we are focusing on empirical study of
administrative law. But this will be a one-time event.
The shift toward empirical study--what Roscoe Pound described as
``law in action''--may be ascendant, but it is neither coordinated nor
coherent. While they can partner with ACUS, neither the Center for
rulemaking, the AALS, the Administrative Law Section of the American
Bar Association (ABA) nor any other body can by itself organize and
direct a program of empirical study of administrative law issues.
Moreover, as Justice Scalia testified before this Subcommittee last
year, agencies view any review by these non-governmental bodies with
suspicion. ACUS, on the other hand, is a ``government insider,'' with
legislative clout. Justice Scalia described the difference as follows:
I was Chairman of the Ad. Law Section for a year, and there's a
big difference between showing up at an agency and saying,
``I'm from the American Bar Association, I want to know this,
that, and the other,'' and coming there from the Administrative
Conference which has a statute that says agencies shall
cooperate and provide information. It makes all the difference
in the world.
Only ACUS is positioned to sustain these studies over the longer-
term, and to shape a coherent research agenda in coordination with
Congress.
IV. THE ADMINISTRATIVE CONFERENCE'S AGENDA
This Subcommittee has already identified research questions that it
would like to see ACUS pursue, and other witnesses on today's panel
will have more to say on that topic. While I would not characterize the
administrative state as being in crisis, it is operating with a sixty
year old manual--the Administrative Procedure Act--and there are
critical areas in need of closer examination and reform. Jeffrey S.
Lubbers, in his submissions, has provided a list of issues that require
further study, and I am in full agreement with him. I wish only to
underscore that I believe that ACUS could be the incubator for the next
generation of administrative law research and I would suggest three
other research areas on which it might focus.
The first is privatization and contracting out. Private entities
increasingly perform what we traditionally view as government
functions, including some functions associated with the military,
prisons and national security. Private service providers have
contractual obligations vis-a-vis the government, but their actions
typically fall outside of administrative law protections, process and
regulation. How, if at all, should we conceive of these actors in
administrative law? Is there a need for administrative law reform to
address the issues raised by contracting out? This is a topic of
considerable relevance at the moment, and it will only become more
important over time.
The second area of research relates to the impact of the Small
Business Regulatory Enforcement Fairness Act (SBREFA). In 1980,
Congress enacted the Regulatory Flexibility Act (RFA), mandating that
federal agencies consider the impact of regulatory proposals on small
entities. The RFA was strengthened in 1996 by the enactment of the
SBREFA. In the context of rulemaking, SBREFA grants small businesses
the opportunity to see rules at a very early stage, before they are
even proposed. While this seems to be a fair accommodation in
principle, there is at least some anecdotal evidence that the process
may not be working well and may even be abused. While small businesses
may ostensibly be fronting the early review of rules, big business may
in fact be driving the process behind the scenes. Next year is the
tenth anniversary of SBREFA and it is an appropriate time to examine
its effectiveness. ACUS could inquire into SBREFA's implementation and
determine whether Congress' intended purpose of assisting smaller
entities is, in fact, being met.
Finally, the third area where ACUS could direct further research is
the reconciliation of the principles of administrative law with the
imperatives of national security. Like other agencies, the various
agencies within the Department of Homeland Security (DHS) undertake
administrative processes and promulgate rules. However, unlike the
other agencies, the DHS has not, perhaps understandably, been subject
to commensurate scrutiny or cost-benefit analysis. How are the
administrative law principles of transparency and accountability,
fairness and effectiveness, to be reconciled with national security
interests? Can the Administrative Procedure Act, which is now 60 years
old, deal with contemporary matters of national security? These are not
easy questions to answer but ACUS could provide a forum for their
consideration.
These are among the next generation of issues that ACUS might
profitably explore, along with coordinating empirical study of how well
the administrative state currently performs its functions. A small
financial investment in ACUS could lead to significant cost savings
down the road by directing Congress to high priority issues that are
most in need of reform, illuminating opportunities where Congress can
get the biggest bang for its proverbial buck, and directing Congress
away from reform measures that may be unnecessary.
This concludes my remarks. I would be happy to take any questions
that you might have.
Mr. Cannon. Thank you. I just want you all to know that
I've made all these arguments about funding ACUS, and I think
we're making progress there. We'll be submitting written
questions that I think will take the bulk of what I would
otherwise do. I'd like to take just a few moments and talk
about where I'd like to see us go.
You know, the reason we--the reason the only program, or
the only program that was actually defunded was ACUS is because
people didn't understand it. They didn't share our heartbeat
over what it does. And so we are spending some time trying to
raise the level of interest in that.
And it was a bipartisan elimination. I mean, nobody knew
much about what it did except those people who really
understood, and they were not persuasive enough.
And so one of the things that I hope, as we proceed in this
project, as I mentioned earlier, that we have, is we try and
reach out to other interest groups. And there are a lot of
people out there who care a lot about it if they thought there
was a way to make some progress. And so I think it's our duty,
as part of the project, to help look at those groups out there
and draw them in. You do that by contacting them and by sending
them an e-mail with a link and having them pop the link and
then having a large corporation task a staff attorney or
someone to follow the progress.
And most corporations are spending a great deal of money on
these issues. And as you tap into them and tap into the
interest groups like the small business groups and the Chamber
of Commerce and others, you end up with the ability to reach
out and actually get people engaged in the process. And that
means the process will be better, but it also means that we may
actually be able to get something done.
And so, I would, since we are all going to be working
together on this over a long period of time, if I might
suggest, you have WIKIs and blogs, you have Web sites and e-
mails, and we need to be using sort of these tools that are out
there to promote what we are doing. And, in fact, we need to do
something, as you said, Ms. Freeman, about changing the name,
because APA puts you to sleep if you could remember what it
stands for. But something like, ``The Government power and
you''--that does touch people and it especially touches people
who have deep pockets and who care about this stuff, but who
have grown inured to the enormity of what's happening to them
partly because the issues have been partisan.
If you're talking about environmental issues, you have
people who are pro and con before the issue is on the table.
And so you can't say what is the process that leads us to an
appropriate conclusion. And there are some people who will
actually say that they specifically view the world that way.
They don't want it to be touched because walking on public
lands or stopping categorical exclusions for drilling, those
things are good, regardless of the cost and the outcome in a
world where technology has changed.
We just had over the weekend a news report that the local
gas company has been awarded a 20 percent increase in its costs
and what people pay. And they met with me the day before that
happened and said it was going to be 30 percent. So you--now
you have a bunch of guys say 20 percent, how do we do it on 20
percent? And what they have to do is come up with more oil and
gas.
They have several oil wells that have been completed, but
not ready to produce because they are waiting for a signature
by a bureaucrat in a system. And at the same time they believe
they should get categorical exclusions which will allow them to
drill enough wells between now and next November that prices
could come down by 30 percent in November. And we are doing
that in a context of people arguing at a level that is
absolutely unrelated to either the production of more gas and,
therefore, the lowering of costs or to the effectiveness of
drilling when the technology is so radically different that we
are not regulating the same thing that we produce the rules
for.
So this is a remarkably important time, and we are going to
produce more oil and gas. The question is, do we do it
thoughtfully? And what we do as a group here is likely to be a
significant portion of that.
So I am going to turn the time over to my Ranking Member in
a moment, but I just want to thank you all for being here and
tell you that this, I think, is about as important a thing as
can be done in Government because we can regulate much more
efficiently. We can accomplish our objectives without the kind
of costs that we are imposing, and human beings and other
species that share our world can enjoy it to a much better
degree if we are faithful and articulate about what our goals
are and how we achieve them than if we just live with an old
structure that is in many ways probably not serving us very
well.
So I yield back my time. And Mr. Watt.
Mr. Watt. Thank you, Mr. Chairman. I couldn't help but have
my mind wonder at one point during this exciting testimony and
your exciting response to the testimony, that a new
stenographer came in the middle and she's probably wondering
what in the world is a WIKI. You ought to at least try to
explain that to her so she can get it in the record. I mean,
there was a different reporter here.
Mr. Cannon. W-I-K-I. And Google it, G-O-O-G-L-E. I am sure
you know what that is.
Mr. Watt. Don't make it worse.
Mr. Cannon. It'll be great.
Mr. Watt. She was having enough trouble following your Utah
accent without all these extraneous words.
Let me start by asking a global question, and then I want
to just go down and ask each one of you a question or two that
got sparked by your exciting testimony.
Global question: I take it that all of you would agree that
this project in which you all are engaged is not a satisfactory
substitute for ACUS.
Ms. Freeman. As somebody conducting one of the few studies
ongoing, let me say, absolutely not. As much as I appreciate
the enormous help of the Congressional Research Service and
their tremendous ability to help me do this, the truth is, it
is very ad hoc. It depends on what a few people are interested
in. This is not a comprehensive, well-thought-out exercise by
those of us who are picking it up on the go. We need a body to
say, here are the priorities.
Mr. Watt. I thought that would be the--I guess that's kind
of the uniform response of all of the witnesses.
Mr. Lubbers. I think the results of the project could
provide some good raw data and empirical information that an
ACUS could use.
Mr. Watt. I have got a question, a specific question, about
that that I'll come back to in a little bit. In light of your
response, I think I will take a more frontal assault on the
Contract with America that I took----
Mr. Cannon. It preceded me.
Mr. Watt. That, I took a gentle swipe at in my opening
statement.
I think, actually, doing away with ACUS is probably the
most dramatic demonstration that the Contract was political,
rather than practical. I mean, I just can't think of a more
dramatic example of it, so I'll let that go.
All right, I'm going on to my list of questions, and I'll
just go down the questions, and maybe if you've got a thought
or two about these questions that you want to do quickly, for
each one of you--but it might be helpful to have you be more
thoughtful and address these questions maybe as a follow-up to
today's hearing because some of them are kind of more long
term.
Mr. Rosenberg, the question I had of you is, how systematic
is the outreach in the project? Has the project itself become
more of an inside game for inside players?
In my role as Chair of the Congressional Black Caucus, one
of the things I'm always concerned about is whether there is
systematic or any effort to reach out to historically black
colleges and universities, for example, to do any of these
research projects. It is refreshing to see one female here on
the panel, but I'm always wondering whether there is any
diversity going on in any of this research or whether it is all
an inside game. That was my question to Mr. Rosenberg.
Mr. Mihm, you listed a series of things that you refer to
as areas in which congressional action may be required--
weaknesses, transparency, technology, impact. I might suggest
that some more specific examples of that, of those areas, might
be worthwhile to give us a context.
Maybe that's included in your testimony, your written
testimony; maybe it's not. As the Chairman said, one of the
reasons you all went on and on and on beyond the 5 minutes was
because probably neither one of us has read, had the
opportunity to read your testimony.
Mr. Lubbers, a more concise statement of how ACUS has been
missed and in what areas. You got to that issue, kind of
indirectly by listing a bunch of things that the new ACUS might
want to focus on, but there are probably some very dramatic
examples that could be pointed to within the last 10 years of
mistakes or things that would not have happened had ACUS been
in existence, or possibly would not have happened had ACUS not
been--it seems to me that that would be a good laundry list of
things.
I'm trying to build a case for ACUS. I forgot to give you
my mantra at the outset, ACUS ASAP. What about that? You like
that?
Mr. Cannon. We're going to have to act like Senators and
then figure out something that has meaning for that acronym.
Mr. Watt. ACUS ASAP. That was kind of my overall mantra. I
forgot to give it to you at the beginning. Okay, I'm almost
through.
I absolutely agree with Professor Freeman that we don't
have a clue of whether our Federal Government agencies and/or
the rules and regulations they promulgate are being effective
or not, or how they could be improved. And I want to second
that emotion.
I am especially interested in some of the things that you
mentioned about the next generation of ACUS privatization, and
contracting out is a major, major concern of ours when we start
contracting out fighting a war. And there is some excellent
research out there about how much of the Iraq war is being
contracted out to private contractors, security providers, the
whole effort in Iraq which--none of which is subject or little
of which--is subject to any kind of governmental oversight or
administrative oversight or rules or regulations. And then when
some of these private contractors get captured or taken as
prisoners, we don't even know whether we have the
responsibility to send the military in to rescue them or
whether that is a private obligation.
Even down to that level, when we start contracting out the
interrogation of prisoners--this has been a major issue of ours
domestically for years. When it comes to privatization of
prisons, whether the private contractors are subject to the
same set of responsibilities that the Government was subject to
is a major issue, and I hope you'll elaborate on that.
And then, of course, the issue that I raised in my opening
statement, of reconciling these imperatives of privacy and
transparency with national security is a major issue that I
think we're just missing the boat on without ACUS doing
systematic research. Not that the episodic research that you
all are doing under the project is not good, but this needs to
be systematic; and I want to join the Chairman of the
Subcommittee in saying, it may not be exciting, but it is
absolutely critically necessary.
Might not be politically something that people want to
spend money on, but when we start--what is it my mama used to
say about saving, spending a little bit now to save more, penny
wise and pound foolish, I think was the phrase she used. It is
a dramatic demonstration that a lot of these suggestions that
were implemented in the aftermath of the Contract with America
have been just penny wise and pound foolish, in my opinion.
So I won't get off on that. I didn't mean to politicize it.
Mr. Cannon. Would the gentleman yield?
Mr. Watt. I'm going to yield back.
Mr. Cannon. Well, don't yield back.
Mr. Watt. Sure, I yield.
Mr. Cannon. You've asked several questions of the
individuals. Can I just add another question to that? And
probably, Professor Lubbers, you are best equipped, but others
may want to comment.
Is it possible for ACUS to operate with private funding? I
am just thinking, due to the legislation, it's a Government
agency almost, or it's a sort of private thing. I don't think
it's a not-for-profit, but there are many agency groups out
there, I think, who would like to see it operate, and I don't
know that we're going to be able to do much this year.
Mr. Watt. I've got an idea for you.
Mr. Cannon. Yield back.
Mr. Watt. I've got an idea for you. It'll cut down on
regulations if you just have each agency's budget assessed when
they do a regulation or a rule to fund ACUS.
Mr. Cannon. As a Republican, I agree with that.
Mr. Watt. Get the money out of the various agencies.
Mr. Cannon. I get the sense you're trying to revive a new
Contract with America from the Republican point of view. I got
elected during the period of reaction to the Contract with
America. I was only one of two Republicans who beat incumbent
Democrats, whereas I think we lost eight or----
Mr. Watt. Not enough.
Mr. Cannon. Thank heavens.
Anyway, I yield back to you; and I think you have asked
your questions.
Mr. Watt. If there are any quick responses to any of the
things I have raised, but I, I mean, maybe some more
thoughtful, longer-term written responses would be just as
well. So go right ahead if you all want to comment.
Mr. Rosenberg. My wife last night asked me what in the
world I was doing working so late, and I explained to her, you
know, what we were doing, and about ACUS and its
reauthorization with no funds. She looked at me and said why
didn't they do the Lance Armstrong solution. There must be
enough wonks out there who will buy a bracelet, red, white and
blue, you know, for a buck each. Maybe there are three million
of them out there, we can get it going into next term.
With regard to your question----
Mr. Watt. Is this a policy wonks bracelet? Is that what
you're advocating for?
Mr. Rosenberg. Yes. A policy wonks bracelet. There should
be three million of them out there for at least 1 year's work.
These are just preliminary thoughts. What is the selection
process? It isn't systematic. We are on the team and are
familiar with various administrative law issues, administrative
practice issues; and the way we know them is reading other--
what people have done, things that have been published by
people wherever they are.
One of the things that I was hoping is that this hearing
would get some notice out there in the industry, where the
wonks would say, I have an idea, I'm willing to do that, I have
the resources, or whatever it may be, and would come to us.
We're trying to find people in various areas and encourage
them.
The difficulty, as Professor Freeman has noted, is that
whatever the university, graduate school, law school, whatever
it is, unless there is some funding, they're not going to be
able to do it. It takes time to do some of these things.
Not all these projects that we're looking at by the way,
are mega studies; some of them are mini studies. One of them
involves consent decrees. Your Committee is dealing with a big,
broad issue on consent decrees. But one thing it doesn't deal
with is a problem that--or at least it's an anecdotal thing
that I have come across--is that there's been a trend in the
last 5 to 7 years of agencies whose rules are being challenged,
are entering into consent decrees about those rules and
changing the substantive thrusts of those rules. And under the
law today, the only way those rules can then be changed is by
Congress passing a law. It's set in stone, and it is
undermining public participation.
Now, that is a mini study. We want to--what I'm trying to
do is get people who have written about consent decrees in this
area to look at them very carefully and say, is this a real
problem, is this a trend in the way the administrative agencies
are evading public participation and being able to change the
rules themselves? And once that is done, maybe there can be a
solution with regard to--well, H.R. 1229, the Federal Consent
Decree Fairness Act, tries to do it by limiting the duration of
any consent decree. I don't think that will particularly work
with this, but that would be one part of the solution.
So they have a mini thing. And what you do is, you try to
find somebody out there who has written about consent decrees
and knows about this process and gets it, wherever they are,
you know, whatever it is. We will try to make this as diverse
as possible, but we have--it's difficult enough finding people
like Jody Freeman, you know, to do this kind of thing.
Mr. Watt. Are you all funding--who's funding even the basic
part of this? Are there grants?
Ms. Freeman. Harvard Law School.
Mr. Watt. Harvard Law School has taken your project
completely. So you've got to go ask somebody to do something
for free.
Mr. Rosenberg. Yes. But there is a partial funding of this
public participation study at Texas A&M. It's coming from CRS,
which has links with about four or five graduate schools,
universities, where they have, where--this is a unique funding
thing. Most of them are to help CRS do various studies. This is
the first one in which we are aiding a Committee and funding,
you know, the eight graduate students, you know, to do this
massive study of----
Mr. Watt. But think about what we're saying here. That's
almost guaranteeing a lack of diversity because the people who
are less--the institutions that are least likely to be able to
pick up that kind of economic burden are the ones that are just
not going to. I mean, an HBCU is not going to be able to do
that. Harvard can; a small university can't. A big university
may be able to, if, you know, so you're almost guaranteeing a
lack of diversity through this project, I think.
Anyway----
Ms. Freeman. And, Mr. Watt, the problem's even worse
because it is very unstable and unreliable, so even if you can
pick up some funding for a little while, it gets cut off when
you're mid-project.
Mr. Mihm. Mr. Watt, in the question that you directed to
me, I'm going to take you up on your kind offer to provide a
more complete and perhaps thoughtful answer for the record. But
at least three things right off the top in terms of statutory
changes that Congress may want to consider.
One, as I mentioned earlier, was revisiting the
``significant economic impact on a substantial number of small
entities'' and providing--this isn't a regulatory flexibility
act, providing either some additional guidance to agencies on
what that means, or more likely, I would think, requiring some
consistent guidance that be provided on that so that we can get
comparability across agencies; or when it's not comparable,
make sure that it's done for known reasons, rather than just
kind of idiosyncratic reasons.
The second is that I think that we've published in the past
that we think that Congress ought to revisit the Inflation
Adjustment Act which allows agencies to increase their civil
penalties to capture inflation. There've been problems with
that both in kind of the technical aspects, some technical
aspects of that, as well again as the need for some cross-
cutting guidance across Government. We found that as a result
of that lack of guidance that there was some inconsistency in
how agencies work.
Mr. Watt. Are they required to increase them? Or some of
them are doing it and some of them are not?
Mr. Mihm. They are required, and some are doing it and some
are not.
Mr. Watt. But not consistently in the way they do it, is
what you are saying?
Mr. Mihm. Right. Yes, sir.
And then the third and perhaps this is actually building on
an ACUS recommendation to go back and look at APA, and in
particular with, you know--APA, as you know, allows for good
cause an agency not to have a notice of proposed rulemaking.
That good-cause definition has been expanded and stretched and
is perhaps at the screaming point in some places.
Some clarified guidance on that or expectations from
Congress, I think would also be helpful. But again, we will
provide a more complete list for you.
Mr. Lubbers. Mr. Watt, it is a little hard to come up with
dramatic examples of things that might not have happened if
ACUS were there. It's a little bit like proving a negative. And
ACUS did not have any power, per se. It was a recommendatory
agency. But let me try to give you a few thoughts that occurred
to me.
For example, the Department of Homeland Security, when that
was created, a lot of agencies were brought together and there
were some organizational issues that I think could have
benefited from ACUS's consideration. Don't forget, ACUS was a
large body of experts who were serving as volunteers, and it
brought together people from all sides of the political
spectrum. So I think one benefit of ACUS was that it reduced
the partisanship that we see in Washington these days. So you
had public interest groups from the left and the right talking
to each other and Government people talking to private lawyers
about some of these problems.
Another issue that was sort of partisan was the midnight
regulation issue. When the Clinton administration went out and
the Bush administration came in, there were lots of crises
about regulations that were issued at the end of the
Administration and then withdrawn or delayed by the Bush
administration. I think that is an issue that the
Administrative Conference could have worked on.
All of the issues regarding electronic rulemaking that I
have mentioned I think would have benefited from scholarship
and a coordinated set of studies. The Administrative Law Judge
hiring program was frozen for 6 years at the Office of
Personnel Management. Agencies could not hire new ALJs from the
register of ALJs because of litigation over controversy
concerning the Veterans Preference Act, and I think the
Administrative Conference could have helped to solve that
problem a lot earlier than 6 years.
The asbestos compensation issue, which I know Chairman
Cannon is very concerned about and this Committee is concerned
about, is something that I think could have benefited from
Administrative Conference review. Maybe an administrative forum
could have been developed to help resolve that issue.
Sarbanes-Oxley is another issue that receives a lot of
concern. And I think that law was necessary because of some
failings of self-regulatory organizations in the securities and
accounting area. So that is another thing I think we could have
worked on.
Waivers and exceptions, we have seen that with respect to
Katrina. People didn't know whether or how waivers and
exceptions should be granted. I think that was on our list back
in 1995, and I think we would have gotten around to that before
2005. So those are some issues.
Now, I just--I want to also respond to Chairman Cannon's
question about private funding. The Administrative Conference
statute, of course, is very broad and it does permit the agency
to accept private gifts, private donations, volunteer services,
dollar-a-year people, and anybody who wants to work, agency
transfers of funds.
ACUS has a very flexible statute, and it would permit all
these sorts of funding--sources of funding to be used at ACUS.
Whether you could come up with a completely private analog of
ACUS that would be as effective, I have some doubts.
And let me just mention one other thing while I have the
microphone which is, I'm working on an advisory committee,
National Academy of Sciences official advisory committee now,
which is concerning one slice of the Social Security program.
And this is the part of the program that has to do with
beneficiaries who cannot handle the benefits. Because of their
disability, or they're drug addicts or something like that,
they have to have a representative payee to get these checks.
And not surprisingly, there are some abuses in this area.
So Congress has funded the Social Security Administration
to then fund the National Academy of Sciences to study this
issue. And this study, alone, I think, was funded at an $8
million level. And our Committee just received bids from
Beltway organizations to do a nationwide survey of about 4,000
representatives and beneficiaries; and that's going to be, I
think, about a $5 million study. So that's just one slice of
one obviously important program that's being funded for $8
million. And we're talking about a $3 million budget for the
Administrative Conference.
Ms. Freeman. I just have a couple of brief remarks in
response to the questions and concerns.
First, these very potentially politically contentious
issues around contracting out, privatization, and harmonizing
national security and administrative law procedures, the great
value ACUS can aid here is obviously not solving this problem,
not making the hard choices. That's for Congress to make, but
steering a course through it by at least beginning to explain
what kinds of contracting are not so problematic, what kinds of
contracting are more problematic, what issues get raised, what
rules apply.
You know, procurement law. There is an elaborate set of
rules and regulations because of procurement.
But then there is an entirely different arena of
contracting where almost nothing governs. And it's that kind of
explaining what's going on, dissecting what the issues are,
proposing potential solutions that can be so useful when
delivered to Congress, and you can decide what you wish to do.
But that function is being lost here.
And I think, too, with the--the same thing with the
contentious dimensions of the national security administrative
law conflict here, the question is, what are the options and
what are the perceived benefits, what are the perceived costs,
and how ought we to think about it? That's a very important
function that you want to put in the hands of a body that has
this great reputation for being quite bipartisan and quite
professional.
And the final thing I want to mention that goes back to the
mention of consent decrees and the problems of what I would
call back-door rulemaking, whenever you tighten up discretion
in one area, the funny thing with administrative agencies is it
pops out somewhere else. And there is a relationship between
additional oversight mechanisms from both Congress and the
executive and the great search within agencies for areas where
they can operate more freely.
So it's something ACUS might look at; that is, the
relationship between adding more analytic requirements and
agencies feeling the need to go elsewhere, that is, operate
through consent decrees, use exceptions that they can drive a
truck through. These are related. And ACUS can look at that in
a more comprehensive way than somebody who does a piecemeal
study, part by part.
And the very last thing, the problem, the PR problem with
administrative law, this is a failure--I hate to admit this--of
law schools. It's a failure of policy schools, it's a failure
of public administration schools, because we have not developed
a robust capacity to talk about how Government's working.
We talk about Congress plenty and we talk about judges a
lot. But we do not focus on the heart and soul of the Federal
Government, and that is the rulemaking and adjudicatory
processes. And ACUS can be a spark to reignite interest in this
important topic.
Mr. Watt. Mr. Chairman, I've gone way over my time. I'll
just close by saying, ACUS ASAP. Yield back.
Mr. Cannon. And that ``P'' probably needs to stand for
private funding or some other source of funding, because we
need to talk about it. Thank you very much, Mr. Watt.
And we want to thank the panel. It is very insightful.
We've, I think, learned a lot here today. I have. And we look
forward to working with you over a long term on this, and maybe
we can come up with some ways of actually getting people to
realize that 10 percent of the economy is a lot more than
whatever judges do or that these elections for Congress aren't
really very important in that context either.
Thank you a lot. We appreciate it. And see you soon.
[Whereupon, at 11:32 a.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Responses to additional questions from Morton Rosenberg, Esquire,
Specialist in American Public Law, American Law Division of the
Congressional Research Service, Library of Congress
Responses to additional questions from J. Christopher Mihm, Managing
Director of Strategic Issues, United States Government Accountability
Office
Responses to additional questions from Jeffrey S. Lubbers, Fellow in
Law and Government Program, Washington College of Law, American
University
Responses to additional questions from Jody Freeman, Harvard Law School