[Senate Hearing 114-477]
[From the U.S. Government Publishing Office]
S. Hrg. 114-477
REVIEWING INDEPENDENT AGENCY RULEMAKING
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
REGULATORY AFFAIRS AND FEDERAL MANAGEMENT
OF THE
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 8, 2016
__________
Available via http://www.fdsys.gov
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
Christopher R. Hixon, Staff Director
Gabrielle A. Batkin, Minority Staff Director
John P. Kilvington, Minority Deputy Staff Director
Laura W. Kilbride, Chief Clerk
SUBCOMMITTEE ON REGULATORY AFFAIRS AND FEDERAL MANAGEMENT
JAMES LANKFORD, Oklahoma, Chairman
JOHN MCCAIN, Arizona HEIDI HEITKAMP, North Dakota
ROB PORTMAN, Ohio JON TESTER, Montana
MICHAEL B. ENZI, Wyoming CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
John Cuaderess, Staff Director
Eric Bursch, Minority Staff Director
Rachel Nitsche, Chief Clerk
C O N T E N T S
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Opening statement:
Page
Senator Lankford............................................. 1
Senator Heitkamp............................................. 3
Senator Ernst................................................ 10
Senator Portman.............................................. 11
Prepared statement:
Senator Lankford............................................. 31
Senator Heitkamp............................................. 33
WITNESSES
Thursday, September 8, 2016
Robert R. Gasaway, of Counsel, Kirkland & Ellis, LLP............. 5
Adam White, Fellow, Hoover Institution........................... 7
Cary Coglianese, Ph.D., Edward B. Shils Professor of Law and
Professor of Political Science, Director, Penn Program on
Regulation, University of Pennsylvania Law School.............. 8
Alphabetical List of Witnesses
Coglianese, Cary Ph.D.:
Testimony.................................................... 8
Prepared statement........................................... 69
Gasaway, Robert R.:
Testimony.................................................... 5
Prepared statement........................................... 34
White, Adam:
Testimony.................................................... 7
Prepared statement........................................... 48
APPENDIX
Report submitted by Adam White................................... 87
Responses to post-hearing questions for the Record:
Mr. White.................................................... 121
Mr. Coglianese............................................... 126
REVIEWING INDEPENDENT AGENCY RULEMAKING
----------
THURSDAY, SEPTEMBER 8, 2016
U.S. Senate,
Subcommittee on Regulatory,
Affairs and Federal Management,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:02 a.m., in
room 342, Dirksen Senate Office Building, Hon. James Lankford,
chairman of the Subcommittee, presiding.
Present: Senators Lankford, Portman, Ernst and Heitkamp.
OPENING STATEMENT OF SENATOR LANKFORD
Senator Lankford. Good morning. Welcome to today's
Subcommittee hearing entitled ``Reviewing Independent Agency
Rulemaking.'' This is the 13th hearing in the regulatory
process that this Subcommittee has held during this Congress.
All our prior hearings the Subcommittee has reviewed the
regulatory actions of executive branch agencies. Today we turn
to the rulemaking record of independent regulatory agencies.
First of all, I want to recognize Senator Portman for his
work on this topic, and as the Subcommittee moves toward
addressing shortcomings independent agencies regulate, we have
Senator Portman to thank for his tireless work in this area and
the foundation he has laid regarding common sense solutions to
fixing problems associated with independent agency rulemaking.
Independent regulatory agencies were conceived to
accomplish varied missions, but they have one thing in common.
They were structured to be somewhat independent from the
influence of the President, the Administration, or originally,
the Judiciary. However, independent agencies should not be
exempt from oversight. When an agency is independent of the
executive branch, it does not require that they are also
independent of Congress and the American people. Congress
created each independent agency and Congress still has the
authority to oversee the agency they created. No public entity
should be exempt from oversight.
Independent agencies take regulatory action just like their
executive branch counterparts. They promulgate rules, issue
guidance, take enforcement actions. Accordingly, independent
regulatory agencies should be held to the same procedural
standards as executive branch agencies. I would actually argue
that independent regulatory agencies require a heightened level
of oversight over their regulatory regimes because the
Executive Orders (EO) that have structured every aspect of the
rulemaking process for executive branch agencies, and have been
endorsed by both Democrat and Republican administrations for
decades, do not apply to independent regulatory agencies.
Part of the question we will have today is why not?
According to the Office of Management and Budget (OMB's) 2015
Report to Congress on the benefits and costs of Federal
regulations from 2005 through 2014, Federal agencies issued 549
major rules. Independent regulatory agencies were responsible
for 141 of these rules, which equates to roughly 25 percent of
rulemaking.
There is cause for concern when it comes to the analysis to
support those rules. In the same report, OMB found that in
2014, only 10 of the 16 major rules issued by independent
agencies provided some information on the benefits of the cost
of regulation and that independent agencies continue to
struggle in providing monetized estimates of benefits of cost
and regulation.
Another study published by the independent well-respected
Administrative Conference of the United States in 2013 found
that no major rule issued by an independent agency in 2012
contained a complete cost benefit analysis. Many of these rules
that are issued without a cost benefit analysis are financial
regulations issued by the Consumer Financial Protection Bureau
(CFPB), the Commodity Futures Trading Commission (CFTC), the
Securities and Exchange Commission (SEC) and the Federal
Deposit Insurance Corporation (FDIC) and have a direct impact
on the smaller community banks that small business owners and
farmers depend on.
Take for example the CFPB's qualified mortgage rule. CFPB
designed this in an attempt to extend credit only to those who
can afford to repay a mortgage, preventing another mortgage
crisis. Instead, the agency failed to monetize any of the costs
and benefits and issued a one-size-fits-all rule that has
crippled the ability of community banks to issue mortgages.
Rules like this show that when agencies are not required to
conduct a full cost benefit analysis before issuing a
regulation, unintended consequences were likely to follow, such
as uncertainty among community banks that limits their ability
to issue credit to farmers and small businesses. Although
community banks account for only 22 percent of all current
loans, they hold three-quarters of all agricultural loans and
half of all small business loans. Uncertainty for community
banks means uncertainty for job creation.
This Administration has made efforts to urge independent
regulatory agencies to improve some of their regulatory
processes. In July 2011, the President issued Executive Order
13579, which urged independent regulatory agencies to comply
with the analytical requirements that applied to executive
branch agencies. Requiring independent regulatory agencies to
follow the analytical requirements of Executive Order 12866 and
13563 would be a reasonable and significant step toward
achieving transparency and predictability for regulatory
entities.
We are pleased to have three witnesses today, and I look
forward to hearing from each of you and what Congress can and
should do to ensure that all agencies work for and hold
accountable these independent agencies for the American people.
With that, I recognize Ranking Member Heitkamp for her opening
remarks.
OPENING STATEMENT OF SENATOR HEITKAMP
Senator Heitkamp. Thank you, Mr. Chairman. Today's hearing
builds on the Subcommittee's thorough investigation of the
current State of Federal rulemaking. Together, we have explored
virtually every aspect of the rulemaking process in a
comprehensive and, I believe, bipartisan way. We have sought
out views and opinions from individuals across the political
spectrum in order to identify sensible steps Congress should be
able to agree upon to make needed improvements to the
regulatory system.
Our focus today is independent agencies which occupy a
unique position in our national government. They were
deliberately, deliberately established by Congress to operate
independent of the President. Among other things, they are
charged with vital public health and safety functions, ensuring
economic and financial stability and serving as stewards and
guardians of fairness and equity on a wide range of public
policy issues. These are critical responsibilities and those
responsibilities will certainly require independent agencies to
issue regulations when authorized or required by statute.
What I want to explore today is how Congress can ensure
such rulemaking is of the highest quality. I remain committed
to making the Nation's regulatory system more transparent,
efficient, effective and certainly accountable. First, Congress
cannot lessen its own authority through inaction on critical
issues by blurring the lines between legislative, judicial and
executive functions. In some cases though, excessive delegation
to agencies, I think Congress has ceded their responsibility. I
do not think there is any doubt about it.
The clearest example that I can provide is Waters of the
United States, where clearly over decades of litigation and
decades of rulemaking there is not a clear answer. One would
imagine in that factual situation Congress would see the
important role of stepping in and providing the guidelines that
need to be provided, the laws that need to be provided. But yet
we do not do it because we would rather pound the table and
complain about regulatory agencies.
Simply stated, Congress must pass good laws by taking full
responsibility for clearly articulating priorities and goals in
legislation. If our statutory directives are unambiguous, we
will not see as many claims of agency overreach. Second, while
rulemaking is often mandated by statute, we must continue to
understand the benefits and costs of regulation. That means
that Congress must fulfill its obligation to the American
people through oversight of the regulatory process and this has
to include independent agencies whose rules in many cases have
more impact on today's business world and today's health and
safety world.
To be clear, independent agencies face significant
challenges in quantifying costs and benefit in the same manner
as executive agencies. Nevertheless, in my opinion, their
regulatory decisions should be based upon good regulatory
analysis. It is not always easy to quantify cost and benefits.
Decades of scholarship have revealed that it is often far
easier to tabulate costs for regulation and much harder to
capture benefits and quantify benefits.
That just means that there will always be a role for
quantifying cost and benefits in the regulatory analysis. We
should be wary of imposing a one-size-fits-all requirement
which would have serious unintended consequences. We must also
be mindful of the regulatory resources if we expect agencies to
compete and complete regulations in a timely fashion.
Today I want to hear from our witnesses, all enormously
gifted and knowledgeable in this area, on how to improve the
regulatory process for independent agencies, with a focus on
how best to improve congressional oversight. I look forward to
continuing my work with Senator Lankford and the rest of my
colleagues on these important issues, and I look forward to the
testimony today and our continuing dialogue. Thank you, Mr.
Chairman.
Senator Lankford. Thank you. At this time, we will proceed
with testimony from our witnesses. Robert Gasaway is of Counsel
at Kirkland & Ellis, specializing in appellate litigation,
where he represents clients before the Federal and State court
and administrative agencies. He clerked for Judge James Buckley
of the U.S. Court of Appeals for the D.C. Circuit. He has twice
been recognized as one of the top lawyers in the country by the
Legal 500.
Adam White is a fellow at the Hoover Institution, adjunct
professor at George Mason's Scalia Law School, and of counsel
at Boyden Gray & Associates. He serves on the leadership
council of the American Bar Association (ABA), of the
Administrative Law and Regulatory Practice, and on the
executive committee of the Federalist Society's Administrative
Law and Regulatory Practice Group. He clerked for Judge David
Sentelle; is that correct?
Mr. White. Sentelle.
Senator Lankford. Sentelle, of the U.S. Court of Appeals to
the D.C. Circuit. Cary Coglianese is the Edward Shils Professor
of Law and professor of political science at the University of
Pennsylvania, where he serves as the director of the Penn
Program on regulation. He specializes in the study of
regulation and regulatory process with an emphasis on the
empirical evaluation of alternative regulatory strategies and
the role of public participation, negotiation and business and
government relations and policymaking. He holds an M.P.P., J.D.
and Ph.D. from the University of Michigan.
I would like to thank all of our witnesses for not only
your preparation, your written testimony, but also being here
personally for your oral testimony as well. It is the custom of
this Subcommittee to be able to swear in all witnesses that
appear before us. I would like you to please stand, raise your
right hand so you can be sworn in for your testimony.
Raise your right hand, please. Do you swear the testimony
you will give before this Subcommittee will be the truth, the
whole truth and nothing but the truth, so help you, God?
Mr. Gasaway. I do.
Mr. White. I do.
Mr. Coglianese. I do.
Senator Lankford. Thank you. You may be seated. Let the
record reflect all witnesses answered in the affirmative.
We are using a timing system today. You will see it in
front of you with a 5-minute countdown to it. We will be
somewhat lenient on that, merciful, maybe 4 or 5 seconds or so
past. But we are trying to stick as close as we can so we can
have a lot of questions and dialogue. The goal of this
conversation will be not only receiving your testimony, your
input, which has been excellent for all three of you, but it is
also for us to have an open dialogue on some of these issues.
So with that, Mr. Gasaway, we would be honored to be able
to receive your oral testimony first.
TESTIMONY OF ROBERT R. GASAWAY,\1\ OF COUNSEL, KIRKLAND &
ELLIS, LLP
Mr. Gasaway. Thank you very much, Chairman Lankford. And
Senator Heitkamp, thank you as well. I am going to try to be
very brief and give an overview and pick up on the statements
that we just heard, both from you Senator Lankford and Senator
Heitkamp. These are incredibly important hearings. We have a
number of different issues in the administrative state. Some of
them are chronic syndromes and some of them are breaks and
sprains.
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\1\ The prepared statement of Mr. Gasaway appears in the Appendix
on page 34.
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We are going to talk a little bit about breaks and sprains
in the independent agencies, some of the specific issues that
go to them. And these are very critical issues and they need to
be addressed, but I think there are easy issues and easy things
that can be done to address them. But I think you also have to
look at the harder issues, the chronic syndromes. They are
particularly acute in the administrative agencies for reasons
that Senator Heitkamp referred to. They are independent of the
executive branch, largely the Congressional Branch, and
political accountability.
And then we have to tie that back in, as Senator Heitkamp
said, to the larger issues of this hearing. So see if I can do
that with the remaining 4 minutes. First of all, the issue
extending the Executive Orders 12866 and 13563, I think that is
on the level of a no-brainer. More information is better
information. I think it would clearly make a difference in
agency decisionmaking. I do not think there is any good reason
for exempting them. Their independence can be preserved through
a carve-out, as has been effected in other statutes, and I do
think it would make a difference.
The American Equity Investment Life Insurance Company case
is one, where as you know, under Section 2(b) of the Exchange
Act, economic analyses are required because there was no Office
of Information and Regulatory Affairs (OIRA) review, because
there were no standards at that time at the SEC. They committed
a very remarkable error of failing to measure the effects of
their program against the existing legal baseline of State
regulation. I think those are exactly the kinds of mistakes
that would not happen if the Executive Orders were extended by
statute.
And again, there have been carve-outs in other statutes to
preserve independence. I think that could be done. There are
technical issues to be sure, and Professor Coglianese has
looked at some of them. What is the threshold? Do you use cost
or benefits? I like costs because they are more measurable. Is
it adjusted for inflation? What is an independent agency? But
those are all technical issues.
The no-brainer is you should go ahead and do it. OIRA has
an extraordinary wealth of capability. There would be an
extraordinarily greater degree of coordination and the
technical issues can be overcome.
Now segueing briefly, I think that you also have to look at
wider issues of actually bringing them under congressional
control. And I stated briefly in my written testimony that I
think an adaptation of the Red Tape Act that Senator Sullivan
has introduced could function that way. I think, obviously,
there are some challenges and there is a discussion that needs
to be made. But the key point there is you overcome this
cultural problem--and I will come back to that--that you see in
Professor Coglianese's testimony. He says retrospective review
is not part of the culture of agencies. We want to push our
agencies forward.
The great thing about the Red Tape Act, the one-in, one-
out, is that retrospective review is bound up with the
prospective review, right? You have to take regulatory costs
off the table to move it forward. So now everybody's pushing
together. And that division that we see reflected in Professor
Coglianese's testimony becomes unified. Looking at old
regulations, doing new regulations all become one. So I would
greatly encourage all the Members of the Committee to take a
hard look at how that legislation could be adapted.
And then third, I do have to go back very briefly within my
time to the issues that you have been struggling with, the mega
issues of over-delegation, and I will just hit on them briefly
there. The ``Chevron'' issue and over-delegation, Non-
Delegation Doctrine in the Supreme Court is one of the
challenges of this Congress and of our time. I am
extraordinarily impressed with the testimony the Committee has
received. I have tried to summarize that testimony in a new way
and crystalize it in a new way, and I would urge the Committee
to go back to previous witnesses and see if I have that right.
Because if I do, ``Chevron'' is extraordinarily vulnerable and
candidly more vulnerable than I expected when I first came to
this Committee record.
Second, very briefly, I emphasize that Congress does have
to get back into the game. I put a couple novel proposals on
there for using fast track administrative processes, just like
you have fast track processes in the trade area.
And then finally, I want to return to that word
``culture.'' Professor Herz gave testimony that it was a quote
``completely infelicitous phrase, a completely infelicitous
choice of language in 'Chevron' to say administrators are freed
unless Congress has quote, 'spoken to precise issues.'"
He is absolutely correct about that. It has had pervasive
cultural effects in independent agencies and executive agencies
alike, and I would urge the Committee to return attention to
that issue. Thank you.
Senator Lankford. Thank you. Mr. White.
TESTIMONY OF ADAM WHITE,\1\ FELLOW, HOOVER INSTITUTION
Mr. White. Chairman Lankford, Ranking Member Heitkamp, and
other Members of the Subcommittee, thank you for inviting me to
testify today. In my written statement, I try to make three
basic points. First, I recognize that so-called independent
agencies have a long and varied history in American government.
Nevertheless, the justifications for their independence from
the President reflect largely a bygone era.
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\1\ The prepared statement of Mr. White appears in the Appendix on
page 48.
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Today, the rules of most independent agencies are largely
indistinguishable from those of executive agencies, whose major
rules are subject to full cost benefit analysis under OIRA's
oversight. 35 years ago, the Reagan Administration made a
prudential choice not to subject independent agencies to OIRA
oversight because those agencies were at the time relatively
unimportant.
Today the regulatory world is completely different, with
independent agencies like the Federal Reserve Board (FRB) of
Governors, the SEC, the CFPB, the Federal Communications
Commission (FCC) and even the Federal Energy Regulatory
Commission (FERC), making immensely consequential policy
decisions. Independent agencies issued at least 17 major rules
from October 2013 through September 2014, according to OIRA and
the Government Accountability Office (GAO). It is time for the
Congress and the President to take down the artificial and
increasingly arbitrary wall that insulates independent agencies
from OIRA's review, as both the American Bar Association
Section on Administrative Law and the Administrative Council of
the United States have both long urged.
My second point, we now see clearly what happens when
independent agencies' cost benefit analyses do not face
meaningful review or interagency coordination. As to meaningful
review, I cite criticism of the Government Accountability
Office, the CFTC's Inspector General (IG), the D.C. Circuit,
and others who have found independent agencies' analyses
woefully lacking.
This week my wife and I are sending our kids back to
school, and just as our schools do not trust students to grade
their own homework, we should not leave the independent
agencies free to grade their own homework. This is not intended
to cast aspersion on the agencies motives or their dedication,
but only to point out a basic fact of human nature: We do our
best work when we know that someone else will eventually grade
it.
And as to interagency coordination, this is perhaps the
most important role that OIRA plays, even more than cost
benefit analysis. The OIRA framework facilitates an interagency
dialogue that helps to coordinate agency policies, but also to
ensure that each agency is getting the best possible expertise
and advise from its sister agencies in the context of White
House, OIRA oversight. Independent agencies should be fully
incorporated into the OIRA framework for precisely this reason.
The third point that I make in my testimony, as you focus
on subjecting independent agencies to greater OIRA oversight
perhaps, I urge you to subject independent agencies to greater
congressional oversight, and not just in terms of oversight
hearings, but more importantly, in terms of the way that you
structure independent agencies and fund them. I think right now
the trend is in the wrong direction in terms of giving
independent agencies too much independence, not just from the
President but also structurally and financially from Congress.
If I may add just one final note to reemphasize the basic
point of my testimony and what I see to be the crux of the
issue before the Subcommittee. Cost benefit analysis and
interagency coordination are not simply ends in and of
themselves. The point of cost benefit analysis, as I see it, is
not to come up with some precise, absolutely correct numerical
answer. As Senator Heitkamp noted in her opening remarks, I
doubt that is even possible. I doubt the cost benefit analysis
could even accomplish this, even if we wanted it to.
And I think there is risk in putting too much faith in
seemingly objective economic analysis. Rather, the point of
cost benefit analysis, as I see it, is the process. It creates
a framework for agencies to think through these issues
rigorously, think through the impacts of their decisions, and
just as importantly, to look back at their analyses years down
the road to see where their previous assumptions were right and
where they were wrong.
That is the retrospective reviews that my fellow witnesses
have mentioned. This process should teach agencies and all of
us to be more modest in our predictions and our arguments and
to be more accountable to the public. Thank you.
Senator Lankford. Dr. Coglianese.
TESTIMONY OF CARY COGLIANESE, PH.D.,\1\ EDWARD B. SHILS
PROFESSOR OF LAW AND PROFESSOR OF POLITICAL SCIENCE, DIRECTOR,
PENN PROGRAM ON REGULATION, UNIVERSITY OF PENNSYLVANIA LAW
SCHOOL
Mr. Coglianese. Chairman Lankford, Ranking Member Heitkamp,
and other Members of the Subcommittee, thank you for the
opportunity to be here today. And let me also thank you for
your service to the Nation. I am pleased to talk about ways
that Congress might help encourage independent agencies to
engage in smarter regulation. Smarter regulation requires sound
analysis, both upfront before rules are adopted prospectively
as well as rigorous research after rules are adopted, to find
out how well they are working, or retrospective analysis.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Coglianese appears in the
Appendix on page 69.
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With respect to prospective analysis, as has already been
indicated, one option would be for Congress legislatively to
codify the outline of and requirements in Executive Order 12866
and apply them to independent agencies. This would have the
advantage of making symmetrical the analytical requirements
between independent and executive agencies, but it would mark a
major shift in the norms of independent decisionmaking by
independent agencies. That is because Executive Order 12866 not
only contains requirements for prospective analysis, but also
establishes an institutional structure that places the
President, and the president's staff, in a more central role in
regulatory decisions.
This option would also require a major increase in funding
and staffing for OIRA.
Let me suggest an alternative to that, which would have a
similar advantage of creating symmetry in regulatory analysis
requirements between independent and executive agencies, but
would not bring with it the kinds of institutional changes and
challenges that would accompany the first option. The
alternative would be to eliminate the exemption in the Unfunded
Mandates Reform Act (UMRA) for independent agencies. The
Unfunded Mandates Reform Act simply imposes a requirement that
all agencies, for certain rules, apply benefit-cost analysis to
them, and that requirement is something that is enforceable
through judicial review.
The courts can make sure that the agencies have done that
analysis, and then the quality of that analysis would form part
of the standard arbitrary and capricious review that courts
would give.
If Congress should go forward with either of these options
and apply a new mandate to independent agencies, it obviously
should keep in mind that effectively implementing any such
mandate will require resources by independent agencies, and
even with these resources and the stronger incentives that a
mandate would bring, regulatory analysis will always remain
somewhat provisional. A mandate should not expect agencies
always to be able to monetize costs and benefits, or at least
all costs and all benefits, for every regulation.
Let me turn in my remaining time briefly to retrospective
analysis and possible steps to be taken to improve agencies
study of their rules after they are adopted. Such analysis is
absolutely vital to inform prospective analysis and it is
something that is underproduced by both executive agencies and
independent agencies.
The Obama Administration's Look Back Initiative has been a
good move forward in this regard. And Congress, I think, could
help by codifying a model like that Initiative and applying it
to independent agencies, which have been exempt from the
regular status reporting that executive agencies have had to
make on their retrospective reviews.
I would also suggest that requiring all agencies to develop
some kind of structural evaluation plans at the time they adopt
new rules would help shape their thinking about evaluation
early on in the process, as well as form a basis for more
rigorous review after the fact. The very frameworks that are
called for in the Smarter Regs Act of 2015, for example, strike
me as quite useful.
Finally, as with prospective analysis, of course, ensuring
high quality retrospective analysis requires resources, and
Congress would need to allocate those as well. In these various
ways, and for the reasons I have elaborated in my written
testimony, Congress has an opportunity to strengthen the
capacity for smarter regulatory decisions by the Nation's
independent agencies, by both encouraging better prospective
and better retrospective analysis.
Thank you very much for your time and dedication to these
issues.
Senator Lankford. Thank you, all three of you. The ranking
member and I are going to defer our questions to the end, and I
recognize Senator Ernst.
OPENING STATEMENT OF SENATOR ERNST
Senator Ernst. Thank you very much. I appreciate that. And
thank you, gentlemen, for appearing before us today. I am going
to take just a moment and kind of set the stage, walk you
through an issue that I have seen, and then certainly get your
feedback on it.
As you may know, in February, the FCC published its Notice
of Proposed Rulemaking on the Set-Top Boxes that are now
required. And I have received several letters from small cable
companies in my State that are very concerned, serious concerns
about what this rule means for the vitality of their business,
some of which have been family owned for many decades.
According to the Small Business Administration (SBA's)
Office of Advocacy, the FCC published an Initial Regulatory
Flexibility Analysis (IRFA), with its notice of proposed
rulemaking (NPRM). However, the FCC did not attempt to quantify
or describe the economic impact that its proposed regulation
might have on small entities. SBA goes on to say that the FCC's
analysis ``Simply describes compliance requirements without
making any attempt to explain what kinds of costs small multi
channel video programming distributor (MVPDs) might incur in
order to comply, and without any discussion of how those costs
might be disproportionately burdensome for small entities.''
So my questions to you are two-fold. Can either of you, Mr.
White or Mr. Gasaway, comment on the FCC ruling and the quality
control of that economic analysis, and with your experience and
background, would you believe further defining what an economic
analysis should entail from the Regulatory Flexibility Act side
and how it could improve economic analysis of those independent
agencies? How can we do better, if you would please?
Mr. Gasaway. Well, I will take a crack at that. Senators,
first of all, let me say that I am aware that that rule is out
there. I have not studied it and so it is hard for me to talk,
but I am a lawyer, so I will talk at length.
Senator Ernst. Thank you. Of course.
Mr. Gasaway. It is hard for me to talk about. I would be
surprised if there was a quality Small Business Regulatory
Enforcement Fairness Act (SBREFA) analysis. It could well be
that that is the case. But unless there is a reason for doing a
quality SBREFA analysis, often times it gets lost in the fact
that there are limited resources at agencies, and I think the
empirical work at independent agencies shows that many times
they cut short those types of analyses.
So I would not be at all surprised if in fact it was cut
short. I do think the types of steps that we are talking about
today can help. One of them, obviously, is subjecting SBREFA
type analysis or other type of analysis to either the Small
Business Administration Office of Advocate or Counsel of
Revenue. It would be tying that more closely, tying it more
closely to OIRA.
But I would again say that there is not going to be better
decisionmaking until there is some sort of fundamental reform.
Now, one reform that people often think about is just making
SBREFA judicially enforceable. And if you had only one card in
your deck that might do it there. And I always support positive
incremental reforms. But without spinning out of control, I do
think that it shows the larger problems of administrative
agencies and the larger problems this Committee has been
dealing with.
Remember, the FCC or any other agency is going to be
thinking, I have a programmatic mandate, and my programmatic
mandate is not to promote small businesses; it is to promote
good telecommunications. And promoting good telecommunications
requires the small Set-Top Box rule. So the SBREFA requirements
are always going to be the caboose, and what I was trying to
suggest with some of my broader reforms in my testimony is if
you are going to change that culture, that word that I
appropriated from my fellow witness, you are going to have to
think very seriously about one of these other proposals that
are on the table and these larger issues.
I do not think there is a clear answer to that, but I do
see the problem.
Senator Ernst. Very good. And Mr. White, I cannot help but
notice those Iowa Hawkeye cufflinks. They are glaring at me.
This is a Cy-Hawk weekend, right?
Mr. White. I know, Senator. Thank you, and thank you very
much for bringing the Committee to my hometown of Dubuque, Iowa
last month. Thank you very much.
If I may just add very briefly to what my friend just said.
Senator Ernst. Absolutely. Thank you.
Mr. White. I think the key word, if I heard it correctly
from the SBA, was the FCC did not attempt an economic analysis.
And that is key. It is not even that they did it and did it
poorly. It is that they did not even attempt it, which I think
goes to the cultural, the regulatory culture issue that Mr.
Gasaway mentioned.
I read a recent report by an economist named Hal Singer--I
am sorry. I do not have it off the top of my head, but I would
be happy to submit it for the record\1\--focusing on the
broader problems of the lack of economic analysis at the FCC.
The FCC's former chief economist called the recent Open
Internet Order, he quipped that it was an economics free zone.
And I think that is from the FCC's own former chief economist.
I think the same could be said for a lot of what the FCC is
doing.
---------------------------------------------------------------------------
\1\ The report submitted by Mr. White appears in the Appendix on
page 87.
---------------------------------------------------------------------------
Senator Ernst. OK. Thank you, gentlemen, very much. Thank
you.
Senator Lankford. Senator Portman.
OPENING STATEMENT OF SENATOR PORTMAN
Senator Portman. Well, first of all, thank you very much
for holding the hearing. I mentioned to Senator Heitkamp a
moment ago, I hold these two up as my model at other hearings.
I chair the PSI Subcommittee, saying that they allow Members to
come and ask their questions and leave, because our lives are
all so crazy and busy rather than monopolize the microphone. So
thank you for letting me ask a question. I did just get here,
so I missed some of your opening remarks. I did have a chance
to look through your testimonies.
Senator Lankford. You missed all my kind remarks about all
your work for independent agencies. We talked about you
positively even when you were not here.
Senator Heitkamp. Major moment of suck up.
Senator Portman. I missed it, but exactly, I heard about
it, and I was not going to suck up again, as you--no, no.
Seriously, thank you for mentioning that. And look, we have
been working this a long time. Senator Warner deserves a lot of
credit too, and I know some of you have disagreements with us
in the way in which we make these agencies accountable, but
give me a break. I mean, the American people are shocked to
learn that independent agencies who play a bigger and bigger
role in all of our lives do not have to go through a basic cost
benefit analysis. I mean, they are shocked by that. And we have
to figure this out.
I am looking at some of these comments about how
independent agencies are not subject to any influence from the
White House. That is just not true. I mean, I would point you
to April, when President Obama publicly announced his support
for the FCC Set-Top Box proposal. I mean, Homeland Security
Committee, this Committee, issued a report finding that the
White House had duly influenced the FCC's decisions to
reclassify broadband Internet under Title II.
I mean, there is influence. I wish there was not that kind
of influence, but there is. So this notion that they are
somehow not subject to any kind of political pressure,
unfortunately they are, but they do not have the same
accountability. And I just think people really are ready to
come up with some way. We can look, do the benefits outweigh
the costs or not? And I think that is the least we should be
asking for.
So the way Senator Warner and I approach it is, as you
know, is to have the independent agencies at least provide
information to OIRA and have OIRA play an advisory role. There
are various ways to do this, but I hope you will work with us
on this. The President said that he is for it. All we really
want to do is codify what the President has said through his
Executive Order, and it has to be done legislatively because
these are independent agencies.
OMB found that 10 of the 16 major rules issued by
independent agencies in 2014, which is the last year we have
data for, included some information. That means six contained
no information on cost or benefits and zero included a full
analysis of the type of analysis required by executive
agencies, zero.
So I think we have a real problem here, and this
Subcommittee has been terrific at focusing on it. We had hoped
to get this Independent Agency Regulatory Analysis Act as part
of a broader package on maybe six or seven bills. It seemed to
have some bipartisan consensus. We were not able to get that
done. Senator Heitkamp was helpful in trying to get that done,
by the way, as were other Democrats, but there were others who
just could not go along with the broader package. But I hope
this is something that this Subcommittee can continue to work
on and push on so we can get it done.
I guess, Mr. White, if I could just ask you a couple
questions, I would appreciate it. You have been at this for a
while. I read your testimony. I thought it was very
informative, very well done. I think our legislation is pretty
modest. It does not go as far as maybe you would like us to go
and some others would.
The American Bar Association, the Justice Department under
President Reagan and President Clinton, the Administrative
Conference of the United States, legal scholars across the
spectrum, including Cass Sunstein, who all of you know, have
said that the President, as head of the executive branch, has
the authority to bring independent agencies under the same
regulatory analysis and review framework that applies to
executive agencies.
And as you said, agencies currently are able to grade their
own homework. Can you explain what you see as the benefits of
having an outside entity review an independent agencies cost
benefit analysis in terms of how it increases the quality of
their work, and perhaps tell us the problems that come from a
lack of accountability.
Mr. White. Sure. Well, with respect to the benefits, I
think that oversight, while it provides an accountability
mechanism for the people, I think it also helps make the
agencies the best version of themselves when they know that
they will have to explain and justify their analysis to a
superior authority, whether it is in the White House or a
Federal court, not to be micro-managed by the White House or
the court, but just have someone kicking the tires seriously on
their analysis and questioning their assumptions. I think that
will spur the agencies to do better work.
The Set-Top Box example, which again, I am not an expert
on, but I have heard a lot about, is a worrisome example. The
Open Internet Order, which I am involved in in litigation, I
should make clear, is another example where everybody from the
dissenting commissioner, Ajit Pai, to the dissenting judge,
Judge Steve Williams of the D.C. Circuit, who is a former
regulatory scholar himself, all had serious, serious criticism
of the assumptions and often self-contradictions within the
meager economic analysis that the FCC undertook. I think it is
a glaring example of the need for serious accountability and
cost benefit analysis before these rules are imposed on the
public.
Senator Portman. Thank you. I do not want to overindulge
you guys. Thank you for letting me come and ask the question,
and I look forward to hearing more from you guys with other
questions. And thank you, Mr. Chairman.
Senator Lankford. Senator Heitkamp.
Senator Heitkamp. Thanks so much. We have covered kind of
the whole watershed here from regulatory analysis to where that
needs to be done all the way through judicial review and
``Chevron.'' I want to focus on independent agencies, because
of all of the things that we have worked on, taking Senator
Portman, and Senator Warner's bill, trying to sell it in a
political sense, has been a lot tougher than I ever thought it
would be, because it seems so common sense to me that if you
have a major rule that is being promulgated, no matter who is
promulgating it, all the rules should be the same for major
rules, and that is not what we have.
And so I am going to offer you some of the criticisms that
we have heard from the independent agencies about that concept
and ask you to kind of help me work through--if we are going to
do a full frontal attack, right, and say we are going to do
this no matter what, and it is going to go to OIRA, then we are
going to lose politically, I can tell you that.
We have already been--I know it is hard to imagine, because
when you look at it and you look at the history of this, it has
been very bipartisan. But it has been very difficult. And so
let us walk through some of the criticism that we have
received. First off, OIRA is an agency, a sub agency of OMB and
under the control of the President, and simply giving
regulatory review to OIRA under this procedure would in fact
interject and interfere with independence.
Now, what we have tried to do in response to that is look
at another agency, whether it is the IGs, whether it is GAO,
take a look at some other place where we could put that kind of
regulatory analysis. Because I agree with you, Mr. White, I
mean, none of this is ever going to be perfect, but if there is
no level of scrutiny or analysis, work can be pretty sloppy,
right? Your dog ate your homework every day, right?
So how do we overcome, or how do we respond to an argument
that OIRA is a sub-agency of the President and interference
would be--Mr. Gasaway?
Mr. Gasaway. With the Paperwork Reduction Act (PRA)
precedent. You just say this is for analysis purposes only.
There is a carve-out. It has to go to the expert agency within
the Federal Government on regulatory analysis for their
comments.
Senator Heitkamp. That makes a lot of sense. However, the
bill is very modest in terms of--I mean, it does not say they
can stop the regulation.
Mr. Gasaway. Non-binding.
Senator Heitkamp. Yes, it is not binding. There is nothing
in this legislation that would give OIRA any authority to stop
the regulation. It just would give them review authority. And
we still hear the argument that it is over-burdensome and
attacks the independents.
Mr. Gasaway. Well, then I would say this is like sending a
medical question to the experts at the National Institutes of
Health (NIH), or something like that, for non-binding review.
The greatest repository of medical information in our
government, I think, is at NIH. And maybe somebody is taking a
policy decision and they need medical input. You do not have to
do what they say, but you have to ask the question.
OIRA is a terrific agency with a terrific bipartisan level
of competence. And obviously, Professor Sunstein is great, but
many of his predecessors are. And it is absolutely
inconceivable to me, if I were the United States senator, which
I am not, that I would want independent agencies to avail
themselves of that expertise. And that is what I would say. Do
you really just want them to not avail themselves of that
expertise?
Senator Heitkamp. I am looking for an alternative word,
because we have said all these things. That is not the problem.
The problem is not that we are not graded arguing our position.
The problem is that we have reached this impasse that we need
to somehow get over. And Mr. White, I am curious, I forget
which witness talked about the need for coordination. I think
it was you. Obviously, OIRA has a much better handle on all of
the agency major rulemaking and probably is the best place to
balance, what is the Department of Commerce doing against what,
the Consumer Finance Protection Bureau might be doing.
So it is dangerous to take it out of OIRA, but yet we need
to get this kind of review. We need to change the culture of, I
should not say lack of accountability, but kind of this, we
have our own funding stream, we have our own--once we get an
appointment and confirmation, which is getting tougher to get
because of these issues, in my opinion, so now hands off, we
are in charge.
And so we are trying to get beyond that. How do we find a
mechanism or find a way to do a work-around that would
accommodate what we all here believe needs to happen?
Mr. White. Well, if I may, I want to make clear, I do not
mean to focus on OIRA to the exclusion of anything else.
Whether it is accountability to the executive branch or to
Congress, either through existing mechanisms or some new
congressional office of regulatory review, or through the
courts, at the end of the day, for me the most important point
is there being a measure of accountability and oversight, not
one particular branch doing it.
And so I am open-minded on all these proposals.
Senator Heitkamp. One of the concerns that I have about
leaving this up to judicial review, and I am not being
critical, and maybe I am, but you will hear agency heads
saying, we are going to implement this rule. If the court does
not issue a stay on the rule, then the rule is going to take
effect even though the rule was bad. So it is not a process
that provides for immediate reaction or some kind of
contemporary analysis. And so it fails. Judicial review fails
and should be a last resort. That is my position.
The Chairman and I have had long debates about reform of
judicial review, but I am looking for some way to get this
concept over the finish line in a way that we have legitimacy
to the argument that we are not imposing Presidential review on
an independent agency.
Mr. White. If I may just add on that point, at the end of
the day, like I said, this is about accountability, not just to
Congress, but to the people. In the last few years, especially
in the aftermath of Dodd-Frank, where independent agencies on
financial policy have had ever greater power, you see so many
of these regulations. No matter what they say in terms of
marketing them as anti-Wall Street, ultimately these
regulations benefit the biggest banks and the biggest companies
first and foremost, whether it is because of the compliance
burdens that the community banks and other small entities face,
whether it is through the Financial Stability Oversight Council
and others seeming to place a too big to fail stamp on the
biggest players.
At the end of the day, if an agency is truly independent
and not accountable to the people, there is the greater risk
that the biggest, most influential corporate players will have
a disproportionate voice on policymaking, and whether it is
through the President or Congress or through the courts, if the
people do not have a real means of accountability for these
agencies, at the end of the day, they will have a
disproportionately quieter voice relative to the bigger
players.
Senator Heitkamp. I would like your thoughts.
Mr. Coglianese. Yes. Well, first, let me just say that from
a constitutional structure point of view, if a president wanted
to apply OIRA review just to a single agency----
Senator Heitkamp. He could.
Mr. Coglianese [continuing]. He could, right. The Executive
Order is the president's prerogative to design however he or
she would like. The fact is that there is one piece of
legislation that requires agencies to provide statements of
cost and benefits of major rules, a piece of legislation that
Congress has expressly exempted independent agencies from.
So one way of making a cultural change might be for the
Congress to say fundamentally, in what we have required of all
other agencies, we are going to require of independent agencies
as well. That would be a step forward. And it would address
something that one reads time and again in responses by general
counsel or others at independent agencies on these issues that,
``oh, we are not required, we have no legal obligation''.
Amending the Unfunded Mandates Reform Act would, at least for
those rules that pass that threshold, eliminate the ability to
make that excuse.
So that is one step, I think, that could be taken by the
Congress that would also avoid the kinds of political issues
that you have talked about, Senator Heitkamp. There are
obviously limitations, right? I mean, this is not maybe
providing the optimal level of oversight, peer review, and so
forth. But the possibility exists for there to be judicial
review, and the ex-post threat of judicial review does offer
some ex-ante incentive for agencies upfront to do their
homework.
With respect to homework, I think the way I would
characterize this is, yes, it would be great to get feedback
from a teacher, but what is different about Executive Order
12866 is it involves not just a grade from the teacher, but
also permission to graduate to the next grade. So there is this
lever, the hammer that hangs over it, and that is causing the
kind of constraints and responses that you are talking about,
Senator Heitkamp.
One other possible approach, and it is not mutually
exclusive, might be for Congress to impose on, quite frankly,
all agencies, something along the lines of the peer-review
guidelines that OIRA has in place already for various
scientific analyses that agencies are conducting. This would
bolster the Information Quality or Data Quality Act provisions
where agencies could in real time get that kind of feedback
through a peer-review process.
Maybe that peer review could come from other agencies.
Maybe it could come from outside experts, but at least there
would be some process of someone reviewing, providing feedback
if indeed the option of having analysis reviewed by the White
House staff is not politically feasible or wise for other
reasons.
Senator Lankford. I want to open this up and I want to open
it up for the full dais to be able to talk about questions, be
able to interact, but I want to give you a broad philosophical
question that you are going to think I am kidding, but I am
not. Independent of who? They are an independent agency.
Independent of who?
Mr. Gasaway. I will give the answer. I think it is not
independent of who but independent for what? To exercise
independent judgment. And I think the key word there is
judgment and I think the key thought is in Adam's testimony.
They are originally thought of as kind of specialized courts,
not as specialized legislatures. And I think unless you go back
to that model of more an independent court with more
circumscribed jurisdiction, I think you are going to have
problems.
Senator Lankford. I ask that question because the common
question here is we cannot impose 12866 on them, we cannot put
them in UMRA, we cannot put them in all these things because
they are independent of the executive agencies and independent
of Congress, and it is always they are independent of who. I
think we have lost the why they were created, because they were
supposed to be non-political, supposed to give faster judgments
with greater expertise than what the Federal courts could do or
other entities.
They were going to be specialized in their area to be able
to get faster, non-political responses, and now we have
independents like the FCC where it is really a five-member
board, that three members are selected by the president's party
and by the president, and so they are not non-political, they
are not faster, and they are not cheaper.
And so we are back to the same issue. We still have these
independent entities that Congress seems to argue about who are
they independent from and we have lost the why that they ever
existed as an independent. And I think the argument really
boils down to a philosophical argument of if we are going to
determine what to do with the agencies that are creating
billions of dollars in regulatory schemes and giving answers to
people based on statutes that we are at a loss to figure out
where it connected actually to statutes, then we have to figure
out if they are really independent.
Independent of who? Is it independent of Congress,
independent of the executive branch, independent of the
Judicial Branch, independent of the American people? Who are
they independent of, and then how are they going to actually be
formed? I know that may be a bigger philosophical argument, but
we have not resolved that basic question, quite frankly, as a
Congress, and if we can ever resolve that issue, I think it is
going to go to the next step.
Do we need agents to have better independent agencies
anymore, and if we do, how do we reform them? Because they are
not functioning as apolitical bodies any more. They very much
seem to have a political agenda in their timing and their cost
seems to be equated to other Federal benches. Mr. White.
Mr. White. I agree with all of that. And if I may add a
further point, as I said earlier, I think the trend line is in
the wrong direction with respect to independence from Congress.
Independence from the president raises a whole host of
questions in and of itself, but independence from Congress
should not be a question at all. These agencies should be
accountable.
But in recent years, from Sarbanes-Oxley to the Affordable
Care Act to Dodd-Frank, the move has been to make these
agencies structurally independent from Congress, and that is
very dangerous, and not just for these particular agencies but
going forward. The New Deal era agencies and the ones before,
from the Federal Trade Commission (FTC), the FCC and so on,
they basically set the paradigm for the next 60 years or more.
That defined what the benchmark for independent agencies would
be. And if Congress does not take steps to correct the
structural mistakes that it made, with all due respect, in the
Sarbanes-Oxley Act, the Affordable Care Act, and Dodd-Frank in
making these agencies even more independent, that will become
the paradigm for independent agencies going forward. The next
independent agencies will not be modeled on the FTC. They were
modeled on, for example, the CFPB. I think that is very
dangerous.
Senator Lankford. And the CFPB, as of now in Oklahoma, 24
percent of our commercial banks no longer do home mortgages
strictly based on the issues that Consumer Financial Protection
Bureau created these set of regulations. There is so much
liability now, they walked away from doing mortgages. 24
percent of our banks in Oklahoma. It is becoming more and
difficult, especially in rural areas of my State, to be able to
get a home loan because the banks have walked away from doing
that because people have seasonal income, because their income
does not come in every month in a predictable format that CFBP
wants. It comes in when the crops come in or when there is a
sale. So that seasonal income not consistent, too much risk.
Those are things that should have been determined in a cost
benefit analysis that should have oversight, and CFPB, as we
all know extremely well, has no oversight.
So I am back to the same issue. How do we get to a set of
independents, that there is a sense that they are not
independent of the American people? Congress created them. They
are not independent of Congress' oversight by far. If Congress
created them, Congress can turn it off as well. But there has
to be some level of oversight. All of us have oversight, and if
there is an entity that has no oversight, that is more
independent than our Constitution ever conceived of in any
mindset.
Does anyone want to make a quick comment on that, just----
Mr. Coglianese. You have asked a great question, and one of
the reasons it is challenging, just to pick up on your last
point about the Constitution, it really speaks to the
independence from factions, if we go back to Madison. Both
factional influences through political branches of government
and through influence by private interests, through, say,
regulatory capture-- both of those speak to the type of
independence that is reflected in the concern that motivates
independence for agencies.
I think that the formal structures are not always fully
aligned with actual independence. It was mentioned before--I
think Chairman Lankford you mentioned the comments by a
president reflecting a policy preference for what action the
FCC might take, and the FCC then pursuing that action. There
are opportunities for influence, I agree, Senator Portman, for
influence by members of either Article I institutions or
Article II institutions to influence independent agencies.
And there are also some executive branch agencies that
operate with a great deal of actual practical autonomy. I think
ultimately it is a challenging question because we are looking
for something where there is at least independence on factual
determinations, expert judgment. We want that to be pure and
based on sound scientific assessment. We do not want that to be
influenced. But on the other hand, we are a democracy and
agencies must make value choices. The fundamental values that
are reflected in policy choices that independent agencies make
should indeed reflect those of the Congress and the elected
officials.
Senator Lankford. So should we assume that executive
agencies then will not have bipartisan or will not have non-
political answers that are based on sound science and only
independence can do that? Or should we assume that for both?
Mr. Coglianese. No, I think that is not the implication--I
mean, the Food and Drug Administration (FDA) has historically
had a very strong reputation for operational independence on
making those kinds of scientific judgments.
Senator Lankford. So I am back to the same issue. Where we
have evolved at this point in the structure of independent
agencies and what has happened, whether it be Mr. White in all
of your very good analysis just on the history and what
happened in the Reagan Administration and opting out from OIRA
at that time and some of the decisions that have been made and
then the acceleration since then, is there a reason that we
should have independent agencies separate from executive
agencies, that they have two different structures due to
operations?
Because as all three of you noted in your written
testimony, it is tough to get even a definition of what an
independent agency is. I mean, there is the 19 that are listed,
but operationally, it is ``can the president fire the head of
it without cause just to fire the head of it'', and ``are they
under OIRA review'' are the basics of it. But even that has
some breakdown in some of the agencies that are called
independents.
So the issue is at this point, why do we have some entities
now under current operation that are called independent and
some are called an executive and have two sets of rules under
them when they are all processing the same regulations? Mr.
White.
Mr. White. While we are talking now about rulemaking, it is
important to keep in mind that independent agencies do a lot of
adjudication. The FTC and some of the other agencies do a lot
of case by case adjudication. That really was in the core
function of independent agencies at their origin, and I do
think some measure of independence, a limited measure of
independence is important for those functions.
And another word----
Senator Lankford. But independent from who at that point?
Mr. White. Right. Again, at that point, it is independent
from direct control and decision by the president, or at least
insulation from it. And I am not saying that the president is
constitutionally barred from getting involved in that. I am
just saying I understand why that is a specific subset of
agency action that might justify some measures----
Senator Lankford. Because it is more judicial?
Mr. White. It is more judicial. As they used to say, it is
quasi-judicial, which was the whole justification for their
independence, and the Humphrey's Executor case that recognized
agency independence. And I will say with the independent
commissions, when you have a multi-member structure, that does
help build in an internal check and balance, right? At the very
least, when the FCC makes a decision, you might have two
dissenting commissioners who, like judges on a court, are going
to have dissenting opinions and in some limited ways, force a
dialogue within the agency.
I think that is a very important and very good aspect of
independent regulatory commissions, that they have that multi-
member body. And so that is a useful function, especially in
that quasi-judicial context.
Senator Lankford. So how are they functioning different
than an administrative law judge, which is also quasi-judicial,
but they are in executive agencies?
Mr. White. Well, that is a very fair point. I might say in
the independent agencies, it is like the difference between a
court of appeals and district court judge. An administrative
law judge (ALJ) makes an independent decision and then it goes
on to the multi-member head. But you are right, in the
executive agencies, that is a very good question why that
should go directly to an executive branch official.
Senator Lankford. Other thoughts?
Mr. Gasaway. I will just say that I think you are hitting
the nail right on the head, and I think these are very, very
complicated and critical issues and I do not have a blithe
answer to them other than just to say that I do worry about
giving too much in legislation and trying to extend this,
because if you extend it only in a way that preserves too much
independence, you are in a sense sending a signal that they
really are independent.
Senator Lankford. Yes, and that is really the concern for
me, is that we are creating more and more sense that they
really are truly independent of everyone, and with no
accountability, we have a big issue. When you get to CFPB, that
their funding does not connect to Congress, their oversight is
not here, there is no oversight in the presidency, no board
even to be able to check a single member of that same leader,
you really have created a fourth branch of government in some
ways that has very little to no restrictions around them. And
even if they want to reinterpret some of their own originating
statute, they have the opportunity to be able to do that, and
that is a big concern for me.
One quick question. Let me open this up for broader
conversation, because I do not want to hog all the
conversation. Does any of the three of you have an issue with
codifying 12866 for both executive entities and for independent
agencies, that that would move from being an Executive Order to
being codified?
Mr. White. I do not. I would welcome it.
Senator Lankford. OK. All right. Let me open this up. I do
not want to hog the time, because I know several others that
may have questions and thoughts.
Senator Portman. I think it is a very interesting
conversation about what constitutes independence, and
obviously, CFPB is sort of one end of the spectrum without
having the board or commission that Mr. White talked about and
not only that, having no appropriations. So, the congressional
purse strings are not attached.
Again, I think the reforms that we are talking about are
pretty modest. One we have talked about with CFPB is how about
an inspector general? I mean, they do not have an IG that
relates to them and their work. It seems to me that is kind of
a minimum thing that we should be requiring that would allow
them to continue their independence, but to have some check on
their work.
But let us get back to this issue of OK, without calling
into question the whole notion of independent agencies, the
fact is having some sort of a way to look at the cost and
benefits everyone seems to agree on. The question is who should
do it? I like what Mr. Gasaway said, that there is expertise
actually in the Federal Government to do this. Unfortunately,
it is not at GAO, it is not at the Congressional Budget Office
(CBO). It is not at the IGs now. It could be created. It would
be another expense to the taxpayer, and the question is whether
you get the kind of smart career people that are at OIRA, who I
used to have the honor of working with, to be able to do this.
And we are not talking about a lot of rules. I mean, again,
this is a modest proposal. We are talking about over $100
million per year in impact. It is roughly 12 to 15 rules per
year. And it is advisory. And Senator Heitkamp is actually
right on that; it is non-binding. But the agency does have to
respond to it. So when OIRA takes this on, they have a short
period of time, 90 days max, to do it.
And this notion that it is going to slow everything down,
it is just not accurate. I mean, there is a deadline and, we do
this with the executive agencies every day. But when they do
get a non-binding analysis back, there has to be a response
from the agency, which is part of this accountability we are
talking about, and it is transparent. So as taxpayers, my
constituents get to see it. As Members of Congress, we get to
see it. As experts, you get to see it. I do think that it would
have a very positive effect on coming up with some standards
that are, viewed as reasonable in terms of looking at a cost
versus a benefit.
There is another criticism that we have seen out there,
which is that somehow the individual statutes that have cost
benefit within them would be overridden. We wrote the language
explicitly to avoid that problem. It states that, and I quote,
``The president may by Executive Order require an independent
agency to comply, to the extent permitted by law, with
regulatory analysis requirements applicable at other
agencies.''
This mirrors the qualifying language that is in President
Clinton's Executive Order, the 12866 we talked about. And
everybody, including by the way, Elena Kagan, when she was a
professor explained that to the extent permitted, a relevant
statute means that, you would not be overriding those statutes.
So again, kind of to Senator Heitkamp's point, we have sort
of gone through them. We have answered all these questions, and
yet there just seems to be this concern out there that somehow
these independent agencies should be able to be out on their
own freelancing, and whatever we come up with, there seems to
be some concern. So again, but I think we have responded to
very specifically.
One of the issues that is broadly talked about is that the
accountability of independent agencies would somehow be
reduced. To me that is also crazy. I mean, this adds more
accountability. And I guess the argument there is that there
would be less accountability to Congress and more to OIRA, more
to the executive branch. Congress needs to take its role
seriously, which this Subcommittee does, to do the oversight,
and it should have, I think, the obvious intent of this, to
have more accountability. And again, we would know then what
the analysis was and how it was not meeting what OIRA does for
all the executive branch agencies.
So again, I thank you guys for being here. I hope that you
will continue to work with us on this and help us to be able to
get the word out broadly. I do think Senator Heitkamp is right.
We sort of make all these arguments, we are not succeeding. But
part of it is maybe we are not making the arguments as
effectively as we could and not doing it to the American
people, who I think would be shocked to understand that there
is this, lack of analysis at a time when so many of our
businesses back home tell us the regulatory burden is making it
difficult for them to add a job, to expand plant and equipment.
We have an economy growing at 1.5 percent. We have flat wages.
We have a middle class squeeze that is very real out there, and
the regulatory burden is part of it.
You mentioned the banks in Oklahoma, they are no longer
offering mortgages. I would like to say that the community
banks in Ohio are consolidating. What does that mean? That
means there are fewer loans being available at the local level
for smaller businesses. Where there is a personal relationship,
there is less involvement in the community, and this is a
function of regulations.
They tell me that with very specific numbers this is what
they had to put aside for compliance 5 years ago, his is what
they are doing today. And they simply cannot be competitive
with these levels of compliance and the regulatory burden, that
sometimes it is more than one regulator, particularly with CFPB
being involved.
So thank you very much for coming in. I appreciate you guys
having this hearing, and I hope we can get this legislation
moving in the new Congress on a bipartisan basis.
Senator Heitkamp. I do too. The luxury that we have on this
Committee is that we are trying to design a highway. We are not
putting the cars on the highway. We are trying to design a
highway that is safe, secure and accountable for agencies so
everybody knows the rules.
The problem that we have is we get mired down in analyzing
this rule that someone does not like or that rule that someone
does not like, and all of a sudden, this turns into a
discussion about this agency or that agency. And we have not
had a lot of good luck in saying, imagine that the president is
of a different political party than yours. What do you want the
rules to be? What do you want the accountability to be?
Because this is not about partisan politics. This is about
accountability on how we interact with the American people as
the Federal Government. And it is enormously frustrating to
keep--you see this very modest proposal somehow getting painted
even in ``The New York Times'' as a huge giveaway, to some big
corporate interest that will result in financial mayhem in 2
weeks if we do it.
And so we are in this highly hyper-partisan exaggerated
world trying to make common sense rules about how we move
forward, and no one, if they really sat down like we do on this
Committee and analyzed the rules, analyze the growth of what is
happening with independent agencies, would ever think that they
should not be subject to the same kind of rules or regulations
of other executive agencies.
I mean, this just does not make a lot of common sense, but
yet we have created this culture that somehow, as the chairman
has said, that to have any kind of influence eliminates
independence. And everybody loves independence because we all
know what that means, independent from politics. Well, there is
nothing in this town that is independent from politics. Get in
the real world.
We have to have rules that prevent overbroad political
opinions from basically being embedded in so many of these
rules. And so, we need to--the idea of regulatory reform has
become so politicized that the common sense aspects of
regulatory reform, whether it is a look back, we are working on
a number of retroactive provisions, a number of look-back
provisions, whether it is a cost benefit analysis which has
progressed. From my days in law school in the 1970s, when we
first started talking about cost benefit analysis, it was like
this magic world.
I think it has become much more professional. We have a
whole society that is dedicated to improving the quality of
cost benefit or benefit cost analysis. However, we want to
structure that. So we just have not made the factual argument
very well, it seems to me, because we keep running into the
political argument. We keep running into the hyper argument.
When we can sit down, Mr. White, and you and I nod our
heads in total agreement about kind of where we are,
recognizing that we may not agree on everything as a matter of
politics, we know that we have some fertile ground here to
actually get something done. But we are not going to get it
done if we have the constant sniping at this, as this is just a
way to shut down this agency or shut down that agency or
restrict that agency.
We are not trying to shut down, restrict, or do any of
that. What we are trying to do is say, justify to us the
decision that you made and the analysis that you did. And we do
not want just you, to say do not worry, I got it. We want there
to be someone who is changing the culture that--we all know
that when we have accountability, we perform better, we make
better decisions.
And so that is the problem that we have, is that this
enormously modest proposal was at the heart of really an op-ed
in ``The New York Times'' before we even got the proposal off
the ground. And, shame on us that we did not anticipate that
this would be this controversial. It should not be
controversial, because I just keep asking my colleagues, you
could have a president that is not a Democrat. What oversight,
what accountability do you want for the decisions that are
going to be made in that case?
And when you can answer that question, then we can get to
common ground. But we need people to really help us kind of
bridge these gaps and create some momentum without having a
package that has become so highly politicized. I think we have
the elements of a pretty good regulatory reform package that
would in fact amend the APA, would in fact do the things that I
think any--80 percent of people who live in the common sense
world that we live in, and places like North Dakota would say,
well that should be a no-brainer.
We have 80 percent of the no-brainer stuff, but we cannot
get political consensus here to get it done, and it is
enormously frustrating. And I think it is because, I guess my
family taught me that if I am failing, I should look at what I
need to do differently. And so it is not just about these
people cannot agree with me. It is how do I get this done in
the face of this opposition?
And so we are really in need of a broader kind of academic
consensus out there that these are the five things. No matter
which side of the political aisle you are on, how you view the
world, these are five really good reform packages. And I guess
that is what we are kind of asking, is how do we build that
kind of consensus within a broad spectrum of political thought
on what change should look like in terms of regulatory reform?
And I cannot leave it without saying this because I think I
say it at every one of these hearings: Congress needs to start
doing its job. When we have things that are in litigation for
30 years on definitional provisions of the Clean Water Act
(CWA), maybe it is time for Congress to actually do its job and
provide the lane or the framework for what constitutes things
like Waters of the United States.
And until we figure out how to do our job here, we are
going to continue to over-delegate responsibility, I think, to
executive and independent agencies. And then it is just a lot
more comfortable for us to beat up on the agencies than to turn
the finger pointing back at us to say, well, I guess we were
not very clear in what we said. Maybe we ought to change that,
because that is a lot of hard work. So much for my rant.
Mr. Coglianese. May I make a comment?
Senator Lankford. I am going to take up an offering after
that.
Mr. Coglianese. May I make a comment? If I could just add
to the virtues that have been mentioned for the approach that
Senator Portman was discussing. In addition to the modesty of
that approach, as you said, Senator Heitkamp. There is another
virtue that I think should go noted here, and it does address
Chairman Lankford's question earlier about whether it would be
appropriate to adopt wholesale Executive Order 12866. I think
that that approach would be problematic in some of the
institutional aspects or design aspects of 12866. In
particular, I am just not sure how practical the conflict
resolution mechanism would work with multi-member commissions,
if 12866 were to become binding legislation imposed on those
commissions. Just as a practical matter, it is hard to see the
commissions going back and forth.
So one of the virtues of the approach that Senator Portman
was taking, where an OIRA review would lead to an advisory
statement that then would need to be responded to, is that
there is time for that, and you avoid the practical challenges
that would be associated with a back and forth, which is how
the Executive Order is really structured, but which is not
going to work as well. It would be much more cumbersome with
the multi-member commissions, and commissions by the way that
are headed by individuals who in many cases cannot be removed
at will by the president.
Senator Lankford. But are often partisan placements.
Mr. Coglianese. In some ways, one of the ironies of all of
this is that with multi-member commissions, particularly where
there are bipartisan requirements, but even without that, in
any multi-member body, when you have multiple people who have
to vote on something, that becomes a bit like a mini-
legislative process. And there is a tension here that should
not go unnoticed between setting up agencies that have that
kind of collective decisionmaking structure and analysis which
is supposed to be expert and non-political.
So there is a deeper tension here as well. Again, that is
why, if nothing else, I think it is important for Congress to
go on the record in saying, if we are requiring cost benefit
analysis in UMRA of executive agencies we could eliminate that
exemption for independent agencies.
Senator Lankford. I would have no issue eliminating that
for Unfunded Mandates Reform Act because again, that was a
compromise that was made years ago that has proved to be an
error, because it does exempt out a whole group of folks that
think the rule does not apply to them. Really, I think that was
a compromise at that moment that should not have been done.
It goes back to the same issue with the Reagan
Administration not including OIRA connection to the executive
branch, to those independent agencies. They could have at that
moment. I wish they would have. But now we have several decades
of history to be able to overcome, and I believe in some of the
agency culture that they are independent of everyone, and they
are not a fourth branch of government.
We are incredibly grateful--and this is something we have
talked about often. These are experts in the field in decisions
that have to be made, that Congress is not the expert, the
Federal courts are not the expert, and different agency folks
are not the expert. These folks are, and we are grateful they
are serving the American people in that spot. But there is a
need to have accountability in every part of that, and I think
that is the issue. You cannot be independent of everyone. There
has to be a built-in accountability structure.
Senator Heitkamp. And it is not even accountability. It is
transparency.
Senator Lankford. True.
Senator Heitkamp. So who knew? I mean, how do you even have
accountability when you do not know the rationality or the
rationale--why they made decisions that they made.
Senator Lankford. And that is the lowest tier on the
judicial review.
Senator Heitkamp. Right.
Senator Lankford. It is just ``did you do everything you
said you were going to do'' ? Not even do we agree or disagree
with it. Did you check the boxes to actually work through to be
able to get the information? Can we see the homework?
Senator Heitkamp. It just seems to me that we are in a
hyper-partisan environment dealing with an issue that should
be, very bipartisan and very clear what rules we want to
guarantee, that all sides have an opportunity to be heard and
that we actually have a foundation in which to judge the
decisionmaking that went into, in many cases, very expensive
determination. And we just cannot get there because we get
mired down in individual cases that then become, oh, you do not
like this agency or you do not like that person, that is why
you wanted to change the rule.
That is not why I want to do any of this. It is not because
I do not trust anyone or I do not like anyone. It is that I
believe that we have a responsibility in the U.S. Senate and in
this Congress and in this government to hold agencies and
government decisions accountable and to understand why they
decided what they decided. And I think they will, Mr. White,
make much better decisions when they know that there is someone
who is going to have the ability to judge the judgers, and that
is the challenge we have.
Mr. Gasaway. OK, now I will try to give you a practical
solution. I gave you my political solution. The only thing I
can think of would be to have it take effect some years in the
future, if you say, I do not know who is going to control
Congress the next day, I do not know who is going to be
president. All I know, next date I want this to be the rule,
because whoever is in those positions now.
Senator Heitkamp. So then it does not become personal.
Mr. Gasaway. So it does not become personal. It does not
become partisan. If people say you are taking a shot at my
former colleague Rich Cordray, you say, I do not know what Rich
is going to be doing the next date. This is not about Rich.
This is not about anybody else. So that is my only practical
suggestions, Senator.
Senator Heitkamp. Yes.
Mr. White. It is about the third time in this hearing that
Rob has beaten me to the punch on a good idea. I would like to
reiterate that, that independent agencies are doing a lot right
now and they will be doing a lot in coming years. If the
legislation even said we are not going to go into effect for
eight, 12 years, I will still take that. I think that would be
a great improvement, because it gets around this problem of the
immediate political ramifications.
But one other point, Senator Heitkamp, that you raised a
little bit ago, and I really do not want to let it go by, where
you said about Congress doing its job. So much of Congress'
relationship to the issue of independent agencies and the
administrative state in general comes back to appropriations. I
ended my written statement with a quote from Madison,
Federalist 58, the power of the purse. It is hard for me to go
through any one of these, writing a testimony like this without
quoting that. It is so important, the power of the purse.
And I think meaningful regulatory reform requires not just
reforming the Administrative Procedure Act requirements. It is
about seriously rethinking the way that appropriations work
with the agencies. And now we are obviously biting off
something even bigger than just administrative law. But the
appropriations process right now, this annual sort of race for
a single vote on a budget, almost a cliff scenario of solving
the funding for agencies that really does complicate even more
the problems of Congress' oversight of agencies.
And when there comes a day when Congress is appropriating
the agencies in a much more iterative process, much more tied
to legislation and oversight, I think that is important,
because at the end of the day, Congress' job involves
legislation and the appointments process and the appropriations
process, and all three of those are crucial in Congress doing
its job.
Senator Lankford. By the way, there are some proposals that
are floating around now that a group of us have floated on
reforming the budget process. If anyone is keeping score on
this, it has been 20 years since Congress has passed a budget
without a CR before it. Since 1974, when the Budget Act was
passed, the Budget Act has only worked four times since 1974.
So at some point, Congress has to admit that post-Watergate
process that was created did not work as they hoped it would,
and it does have to be reformed.
But that is a different hearing for a different day.
Senator Heitkamp. The Budget and Impoundment Act, we are
going to repeal it?
Senator Lankford. We can fix it.
Mr. Coglianese. One other, if I may, outside the box
suggestion that I think is feasible to consider, but it is a
long-term strategy as well, and that is to foster research. Let
us just not there are just very clear research limitations well
at issue in getting better analysis at these agencies. And I
know that we have been talking here about legal structures and
organizational structures that might encourage agencies to
produce that work themselves.
But there is another way of thinking about this, not
mutually exclusive, but another way, that would say let us
also, at the same time we are thinking about institutional
structures, think about other ways of resolving some of the
fundamental research questions that need to be answered in
order to do good prospective analysis of financial regulation.
Now, there is a big debate right now in the academic
literature about whether financial regulation can be subjected
to meaningful benefit cost analysis, whether we can actually
get good estimates or not. And there is one side that sort of
says ``no, it is just not even possible'', and there is another
side that says, ``yes, it is feasible''.
I think even the side that says it is feasible would agree
that we are not anywhere near the level of sophistication or
rigor in understanding the implications of financial
regulations and how they affect financial markets to be able to
make reliable forecasts as often as we would need to in order
to get analysis to a level where some of the best executive
agencies have it.
I know from having taught environmental law that in the
early days, in the 1970s, there were lots of analytical
questions that were unanswered, and we just did not know a lot.
Part of the reason why today we have much better consensus
about how to estimate the benefits and costs of environmental
regulations, is in part because of work that agencies have
done, but it is also in part of funding and studies that have
been done by the National Academies of Sciences and funding
through the National Science Foundation. And to the extent that
those institutional avenues could help. I do not think they
should be neglected. They could be used to bring up the level
of the state-of-the-art thinking about these issues. Then it
will be harder for agencies to say, well, we just do not know
how to do this.
And part of what they are saying today is ``we are not
required to do it'', but ``we do not know how to do it'',
``there is not enough time'', ``we do not have the tools yet''.
Let us build a collective knowledge base then. That is
something that could be done wholly apart from administrative
law reforms through targeted and strategic funding initiatives
through other scientific enterprises.
Senator Lankford. I think you could also accomplish some of
those same things with advanced Notice of Proposed Rulemaking
and get more people at the table earlier and so that they
actually receive input from people that are affected. If you
get the people that are affected at the table, they can give
you a pretty good estimate of how it is going to actually--I
cannot even begin to tell you the number of times I have talked
to someone in business that said, X, Y, Z Agency estimated it
would cost this much, just our business, it will cost three
times that, just for our business not counting everyone else.
And so when you do not get all the people at the table
early with advanced Notice of Proposed Rulemaking, then you get
a best guess from academics rather than from practitioners.
Mr. Coglianese. Some of the questions might though take
years to resolve. So I mean, one issue in the environmental
context, how do you value the benefits of reducing air
pollution over the Grand Canyon? There is not a market that one
could refer to; you would normally like to use market values to
input into a benefit analysis there.
So there have been years of study of what are called
contingent valuation techniques and a consensus emerging over
that. And similar questions arise in other areas of regulation
that need answers, and there are opportunities, I think, to
make progress in those areas, as well.
Senator Heitkamp. But there also is an opportunity for
everybody to recognize that some benefits cannot be monetized.
And so, I think that everybody thinks that we are trying to put
monetary values on things like a view shed, what does that mean
that we can still see the Grand Canyon as a country? That has
value. That is not easily monetized, but we can all agree it
has intangible value, right?
Mr. Coglianese. Oh, absolutely. And this is one of the
things, in going forward legislatively that I would urge you to
think about retaining in 12866 and in UMRA, which is a
recognition that it is not always possible to get good
estimates of these things, and that benefits should justify the
cost, but that does not necessarily mean that we always have
fully monetized benefits that outweigh fully monetized costs.
There are sometimes going to be decisions that regulators have
to make in the face of uncertainty.
Senator Lankford. So quick comment on that, then I want to
be able to wrap this up. We are at 11:30 and I appreciate
everyone's time.
Cost benefit analysis, as several of you have brought up,
is to inform rather than to check the box and to justify. It
should not be the we want to do this regulation and so we are
going to create a cost benefit analysis that then benefits the
regulation that we want to create. It should inform to say we
are thinking about this. We go and check it and say, you know
what, that is not a good option. Let us look for other options,
and I think we are missing that.
And some of the conversation and some entities, it seems to
be a justification to do what they want to do rather than
informing the best solution. The intent of it was, is this the
best option. If we go down this track and the cost is so high
and the benefit does not seem to do it, then let us find other
alternatives to do it.
So at some point, I hope we can get back to that, where it
is an educational experience and a targeting different options
rather than a justification to be able to do what we want to
do. There are some pieces of common ground that I heard today
from all of us in this conversation. There are things that I
hope that we can continue to build on on these issues.
Let me open this up to final comments that anyone wants to
be able to have on some of the issues. Mr. Gasaway, I just want
you to know, I showed my absolute best restraint not to drift
into a ``Chevron'' deference conversation when you had a
significant part of your written testimony dealing with
``Chevron,'' which we will reserve for another day. But I do
appreciate your comments in your written testimony adding to it
and referring to other things. We appreciate that as an
unresolved issue. But again, another conversation for another
day.
Any other comments? Mr. White.
Mr. White. Just on your last point, I think it is very
important, like you said, that on the one end, it cannot just
be a box-checking exercise. That 2011 CFTC inspector general
report I cite is just devastating, where the CFTC repeatedly
treats economic analysis as a caboose on the process, run by
lawyers more than economists.
At the other end, it is important that the economist not
get so fixated on technical precision that they lose sight of
the bigger picture. I studied economics in college and the old
joke was an economist is someone who knows the price of
everything but the value of nothing. And I think that that is
important here, that at the end of the day, cost benefit
analysis, the numbers are important, but the most important
thing is the process and the exercise of thinking through these
things rigorously to inform the value judgments.
Mr. Coglianese. And if I may add also one thought about
that, which I agree completely. The goal of the analysis should
be learning and informing and making better decisions. That is
just another factor that would weigh in favor of an approach
that would have less of a hammer behind it, rather than more of
a hammer. That is, if you want agency officials really to
internalize and take seriously and act earnestly to use
analysis to learn, they have to own it. And there is a risk,
and we know this from a variety of research on performance
measurement in organizations, that once you put high stakes
associated with measurement, then you create incentives for
gaming and box checking and not doing what, Chairman Lankford,
you so rightly said, taking it seriously to make better
decisions, to learn and not just to cover up and paper over
decisions you already want to make.
Senator Heitkamp. Just one more observation, and I think
when you get down to it, this is not an exact science. And if
people want to kind of say, you missed the boat. But the other
piece of this that is so critical, and it goes back to the
other pieces we are trying to pull together, is the
retrospective review. And so we have a bill that received
unanimous approval in the Committee that would require every
new major rule have a provision in it that was noticed. That
would require retrospective review within the provisions of
that new rule.
We have to deal with the body of work that is out there,
but if we do not have retrospective review, we do not learn
about the mistakes that we made in the last cost benefit
analysis, and so we do not improve the quality of that work
overall, because there is never a look back or a judgment.
And so these are--we keep trying to compartmentalize these,
but the package itself is what is going to get us where we need
to be. And we laugh because the one area where we probably have
some of the most interesting discussions between the chairman
and the ranking member is ``Chevron.'' So just to give you a
little insight.
Senator Lankford. Just needs to be fixed, that is all it
is. Just one little word change.
Senator Heitkamp. I guess we all agree with you, right?
Senator Lankford. How about just switching it judicially to
``probable construction''. Just that would probably fix this.
But that is a whole different conversation.
On the OIRA conversation as well and the cost benefit, the
benefit of going through OIRA with everybody is cumulative
effects. If independents are independent, we cannot get
cumulative effects, and everyone says all these regs came down
at different times, different deadlines, different authorities.
Nothing seems to be coordinated. It is one of the many reasons
independents need to go through OIRA, so someone can check
cumulative effects. And it is very helpful to have somebody
just talk and say, great, what other options did you look at,
and how did the cost benefit work on the other options. That is
a tremendous benefit just to have that conversation that
currently we do not get.
But hopefully in the days ahead we can, because as I remind
everyone, independents are not independent of the American
people. They are still all a part of us and we are grateful
that they serve the way they do, but we have to all be
connected and get on the plane together.
So with that, thank you very much for your testimony and
your preparation. I look forward to an ongoing conversation in
the days ahead. I hope you will maintain the ongoing
relationship you have with us and with our staff so we can get
a chance to gather your ideas in the days ahead.
Let me do a final closing statement. I think I have to get
some deadlines in here. The next time that we are together as a
subcommittee is the 22d of September. We will continue our
examination of agency use of regulatory guidance in a hearing
titled ``Continued Review of Agency Regulatory Guidance, Part
3.'' At the upcoming hearing, it will be the Department of
Education, Department of Labor, and the Office of Information
Regulatory Affairs, which we have discussed at length today.
That concludes today's hearing. I would like to thank all
of our witnesses. The hearing record will remain open for 15
days, to the close of business on September 23rd for the
submission of statements and questions for the record. This
hearing is adjourned.
[Whereupon, at 11:38 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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