<DOC> [106th Congress House Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:71984.wais] DOES CONGRESS DELEGATE TOO MUCH POWER TO AGENCIES AND WHAT SHOULD BE DONE ABOUT IT? ======================================================================= HEARING before the SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND REGULATORY AFFAIRS of the COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTH CONGRESS SECOND SESSION __________ JUNE 14, 2000 __________ Serial No. 106-219 __________ Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpo.gov/congress/house http://www.house.gov/reform __________ U.S. GOVERNMENT PRINTING OFFICE 71-984 WASHINGTON : 2001 _______________________________________________________________________ For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON GOVERNMENT REFORM DAN BURTON, Indiana, Chairman BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California CONSTANCE A. MORELLA, Maryland TOM LANTOS, California CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania JOHN L. MICA, Florida PATSY T. MINK, Hawaii THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington, MARK E. SOUDER, Indiana DC JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio Carolina ROD R. BLAGOJEVICH, Illinois BOB BARR, Georgia DANNY K. DAVIS, Illinois DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts ASA HUTCHINSON, Arkansas JIM TURNER, Texas LEE TERRY, Nebraska THOMAS H. ALLEN, Maine JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois DOUG OSE, California ------ PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont HELEN CHENOWETH-HAGE, Idaho (Independent) DAVID VITTER, Louisiana Kevin Binger, Staff Director Daniel R. Moll, Deputy Staff Director David A. Kass, Deputy Counsel and Parliamentarian Lisa Smith Arafune, Chief Clerk Phil Schiliro, Minority Staff Director ------ Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs DAVID M. McINTOSH, Indiana, Chairman PAUL RYAN, Wisconsin DENNIS J. KUCINICH, Ohio BOB BARR, Georgia TOM LANTOS, California LEE TERRY, Nebraska PAUL E. KANJORSKI, Pennsylvania GREG WALDEN, Oregon BERNARD SANDERS, Vermont HELEN CHENOWETH-HAGE, Idaho HAROLD E. FORD, Jr., Tennessee DAVID VITTER, Louisiana Ex Officio DAN BURTON, Indiana HENRY A. WAXMAN, California Marlo Lewis, Jr., Staff Director Barbara F. Kahlow, Professional Staff Member Gabriel Neil Rubin, Clerk Elizabeth Mundinger, Minority Counsel C O N T E N T S ---------- Page Hearing held on June 14, 2000.................................... 1 Statement of: Brownback, Hon. Sam, a U.S. Senator from the State of Kansas. 84 Gramm, Dr. Wendy L., distinguished senior fellow director, regulatory studies program, Mercatus Center, George Mason University, Fairfax, VA.................................... 129 Hayworth, Hon. J.D., a Representative in Congress from the State of Arizona........................................... 91 Raul, Alan Charles, former general counsel, Office of Management and Budget, partner, Sidley & Austin............ 108 Schoenbrod, David S., professor of law, New York Law School, adjunct scholar, CATO Institute............................ 101 Spotila, John T., Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget........ 135 Letters, statements, etc., submitted for the record by: Brownback, Hon. Sam, a U.S. Senator from the State of Kansas, prepared statement of...................................... 87 Chenoweth-Hage, Hon. Helen, a Representative in Congress from the State of Idaho, prepared statement of.................. 83 Gramm, Dr. Wendy L., distinguished senior fellow director, regulatory studies program, Mercatus Center, George Mason University, Fairfax, VA, prepared statement of............. 131 Hayworth, Hon. J.D., a Representative in Congress from the State of Arizona, prepared statement of.................... 94 Kucinich, Hon. Dennis J., a Representative in Congress from the State of Ohio: Critiques................................................ 10 Prepared statement of.................................... 77 Prepared statement of Ms. Wagner......................... 58 Raul, Alan Charles, former general counsel, Office of Management and Budget, partner, Sidley & Austin, prepared statement of............................................... 112 Ryan, Hon. Paul, a Representative in Congress from the State of Wisconsin, prepared statement of........................ 5 Schoenbrod, David S., professor of law, New York Law School, adjunct scholar, CATO Institute, prepared statement of..... 103 Spotila, John T., Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget, prepared statement of...................................... 137 DOES CONGRESS DELEGATE TOO MUCH POWER TO AGENCIES AND WHAT SHOULD BE DONE ABOUT IT? ---------- WEDNESDAY, JUNE 14, 2000 House of Representatives, Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs, Committee on Government Reform, Washington, DC. The subcommittee met, pursuant to notice, at 2:05 p.m., in room 2247 of the Rayburn House Office Building, Hon. Paul Ryan (vice chairman of the subcommittee) presiding. Present: Representatives Ryan, Terry, Vitter, and Kucinich. Present: Marlo Lewis, Jr., staff director; Barbara F. Kahlow and Jonathan Tolman, professional staff members; Bill Waller, counsel; Gabriel Neil Rubin, clerk; Elizabeth Mundinger, minority counsel; and Ellen Rayner, minority chief clerk. Mr. Ryan. The hearing will come to order. We are still waiting for Congressman J.D. Hayworth to arrive, I'm told, but I see that Senator Brownback is here with us, and the first panel is Congressman Hayworth and Senator Brownback. Senator Brownback, we'd love to have you get started, and then when Congressman Hayward comes, we'll just include him in the discussion. The purpose of today's hearing is to examine how best to ensure that congressional statutory intent is reflected in regulations developed and promulgated by the agencies. Many of us in Congress often have a sense that Federal regulatory agencies are out of control, and they continually try to expand their power beyond the point where Congress indicated it should stop. Several examples leap to mind. The Environmental Protection Agency asserts that it has authority to regulate carbon dioxide even though Congress has consistently rejected regulatory proposals to control greenhouse gas emissions. The Food and Drug Administration tried to regulate cigarettes as pharmaceutical products, deviating from the plain meaning of the Food, Drug & Cosmetic Act and the FDA's longstanding interpretation of that act. The Supreme Court just recently struck down the FDA's tobacco rule in March of this year. But perhaps the most shocking agency lawmaking example in recent months is the most recent Department of Labor's proposed regulation to expand unemployment insurance into a program of paid leave for parents who voluntarily quit or take time off from their jobs. This proposed ruled, popularly known today as Baby UI, could jeopardize the solvency of State unemployment insurance funds; worse, this rule is illegal. For 65 years, the Department of Labor has interpreted the Federal Unemployment Tax Act as permitting unemployment compensation payments only to persons who are involuntarily jobless, the truly needy. Furthermore, when Congress enacted the Family and Medical Leave Act, it limited the program to unpaid leave and exempted small businesses. But under the Department of Labor's rule, unemployment insurance would be used for paid leave and small businesses would not be exempt, clearly deviating from congressional intent. Why is this shocking? This subcommittee reviewed the Department of Labor's internal legal analyses, and found that the Department of Labor was well aware that the rulemaking lacked a valid grant of statutory authority and probably could not survive a court challenge. Yet, that did not stop the Department of Labor from charging ahead with this regulation. I suspect that one reasons agencies ignore statutory constraints on their authority is that Congress has largely dedicated its responsibility to control the cost and scope of regulations. Ever since the New Deal era, Congress has delegated vast grants of authority to agencies. And until March 1996, when the Congressional Review Act was enacted, Congress had no established process or mechanism for reviewing agency final rules. However, in over 4 years, Congress has not used the CRA process to veto a single agency rule. So regulatory decisions remain firmly in the hands of non-elected Federal officials. And this means that when agencies go too far, the regulated public has no one to hold accountable at the ballot box. Agencies are therefore continually tempted to go where no statutory authority has gone before. Agencies do face constraints of course. The courts, from time to time, strike down agency rules as arbitrary or capricious, or as exceeding a valid grant of statutory authority. And today we will examine some recent cases where courts have vacated or remanded major agency rules. In particular, we're going to have a look at the American Trucking Association v. EPA, something that's a very hot topic these days, that's being considered by the Supreme Court in this session. The American Trucking case is noteworthy for invoking something called the non-delegation doctrine, to challenge EPA's new particulate matter and ozone standards. The non-delegation doctrine provides that Congress may not cede legislative power, the power to make the crucial policy choices for the American people, to another branch of the Federal Government, including a regulatory agency. Moreover, when Congress delegates regulatory power to an agency, that power must be constrained by an intelligible principle that guides and limits the agency's discretion. In American Trucking, the D.C. Circuit Court of Appeals held that the EPA had construed sections of the Clean Air Act so loosely as to render them unconstitutional delegations of legislative power. The court instructed the EPA to find an intelligible principle within the act that would explain and justify EPA's selection of new PM and ozone standards. This case has generated enormous controversy, with supporters lauding the court for taking a small but meaningful step to curb regulatory lawmaking and critics warning that the decision, if allowed to stand, would undermine the Clean Air Act and other regulatory statutes. On May 2000, the Supreme Court agreed to review this case, and that's where we are right now. This case is important. However, I believe Congress should not rely solely or even primarily on judicial review to check and balance regulatory agencies, and that's why we're hearing from the two witnesses we have here today. Regulations have the full force and effect of law. Regulations are implicit taxes. When Congress authorizes an agency to regulate, it is in effect delegating the power to make laws and levy taxes. There is at the very least attention, some might say contradiction, between the post-New Deal regulatory process and Article I of the Constitution, which grants legislative power solely to Congress. Why has Congress been so quick to delegate? Well, under a delegation system, Members of Congress, such as ourselves, get the credit for enacting popular sounding regulatory statutes but bear none of the responsibility for the cost and burdens of regulatory implementation. Non-elected bureaucrats take the heat from implementing the statutes that Congress enacts. Politically, this may be a good deal for credit-grabbing, blame-ducking politicians but it means that $700 billion in annual off-budget regulatory costs escape democratic accountability. It means that the American people live under a regime of regulation without representation. It is for these reasons, among others, that I'm really very pleased to welcome Senator Sam Brownback of Kansas and Representative J.D. Hayworth of Arizona. Senator Brownback is the chief sponsor of S. 1348, a bill that would require Congress to approve agency final rules by a majority vote before those rules go into effect. The House companion bill is H.R. 2301, which is offered and introduced by Representative J.D. Hayworth, who is the man in Congress who brought this issue to the forefront I believe two Congresses ago. J.D. is the man who paved the way on this issue in the House of Representatives, and who helped get Senator Brownback I believe to introduce this over in the Senate. We are really pleased to have you here with us today, J.D. I believe that you have 55 cosponsors on your bill, which I am also proud to be a part of your team, J.D. I'm very excited about hearing your testimony. We have another panel of witnesses that will be discussing the non-delegation doctrine, and we will introduce them afterwards. But let me just say that we're very pleased to have you here today. J.D., I know you've been toiling in those vineyards quite a bit. Sam, I know you've done a lot over in the Senate. We're excited to have you. I understand, Senator Brownback, you have a schedule to keep, so we'd like to start with your testimony, if we may. [The prepared statement of Hon. Paul Ryan follows:] [GRAPHIC] [TIFF OMITTED] T1984.001 [GRAPHIC] [TIFF OMITTED] T1984.002 [GRAPHIC] [TIFF OMITTED] T1984.003 Mr. Kucinich. Mr. Chairman. Mr. Ryan. I apologize. The ranking member, Mr. Kucinich. Mr. Kucinich. Thank you very much, and I understand the Senator's schedule, and I'll move through this testimony as quickly as possible. I'm also waiting, Mr. Chairman, to go to the floor on an Interior appropriations amendment to Title I, which as soon as they go to three bells, I'm going to have to leave. But I want to welcome my good friend, Senator Brownback and my good friend Representative Hayworth for their participation. I had a chance to read the Roll Call page, which I thought was very well-written. I want to thank the Chair for holding this important hearing on the impact of delegation of legislative authority in our system of government. As I think the Chair knows, and I'm sure the other Representatives and Senators know, I'm not an easy sell on these questions. I mean, at this very moment, when you talk about the powers of Congress, I think some of you will remember that I took a very strong stand about the war powers, that Congress shouldn't give the President the ability to unilaterally declare war and not check with us. As a matter of fact, I'm with Representative Campbell and a number of other people in a case before the Supreme Court at this very moment. So I take very seriously questions that are raised about the role of Congress and Congress not ceding power. The Constitution provides that Congress has the authority to legislate. Congress often passes broad statutes and asks agencies to fill in the details through regulation. This allows agencies, which hopefully have the expertise and the staff to address what are often extremely complicated, technical and scientific issues, to move quickly to respond to changes in science and political and social values. But it's very tough to strike this balance, and I know that's what we're concerned about. Mr. Chairman, I want to share your concern that this process can be abused by both the Congress and the agencies. Congress can duck politically difficult issues by passing broad legislation that sets politically popular goals, and blame the administration when agencies make the tough decisions about who will bear the burden of reaching those goals. Similarly, agencies can overstep their authority and pass regulations which are not authorized by the underlying statutes. I know this is the essence of our participation here today. Mr. Chairman, I'm looking forward to hearing from the witnesses who hopefully will shed some light on possible ways to protect against such abuse. However, I hope the solution does not further limit our ability to pass competent, politically accountable legislation that's in the public interest. Statutes and regulations, especially environmental protections, are often based on complicated technical and scientific knowledge. It's not likely that we could duplicate the expertise provided by the agencies and we need to take advantage of this expertise. Along the same line, we need to be wary of solutions that are scientifically naive and fail to recognize the inherent limitations of scientific principles. A large number of legal scholars have recently written on this issue when criticizing the D.C. Circuit's recent findings in the PM Ozone case. I'll be inserting some of these critiques into the record. 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I also expect to hear about political accountability. Some argue that agencies are ruled by special interests while Members of Congress, who are politically accountable elected officials, respond, instead, to the public interest. Well, you know, when you factor through some of the campaign finance debates, it's problematic. Political reality is that special interests do exert influence in Congress, and Congress can draft legislation with special interests sometimes behind closed doors. And that goes, by the way, for both parties, just so we establish that real quick here. This is not about which party's hands are clean and which party's hands are not clean. So, on the other hand, there are a number of administrative laws that ensure that all interested parties have the chance to comment on agency rulemaking and the public can review these comments. I believe any solutions that we consider are to make sure that the process is open, that the decisionmakers are truly politically accountable for their actions. Finally, Mr. Chairman, I hope that any solution we consider would not make it more difficult to respond to the public interest. As we know, we often learn new scientific facts which significantly affect how to best implement a law. The social and political values change. In response, the public often demands better protections, yet because of certain interests, Congress is slow to respond. I want to make sure that we do not create a procedural maze that makes it even more difficult to enact important public protections. Mr. Chairman, at my request, you were kind enough to invite Professor Wendy Wagner to testify today. She was expected to testify on a number of these issues, and I was looking forward to exploring them with her during the hearing. Unfortunately, she's not able to attend because of a family emergency, so I'm going to ask, with the Chair's permission, unanimous consent to insert her testimony in the record, hold the record open to include additional materials, including any answers to questions subcommittee members may want to ask Professor Wagner in writing. Mr. Ryan. Without objection. [The prepared statement of Ms. Wagner follows:] [GRAPHIC] [TIFF OMITTED] T1984.051 [GRAPHIC] [TIFF OMITTED] T1984.052 [GRAPHIC] [TIFF OMITTED] T1984.053 [GRAPHIC] [TIFF OMITTED] T1984.054 [GRAPHIC] [TIFF OMITTED] T1984.055 [GRAPHIC] [TIFF OMITTED] T1984.056 [GRAPHIC] [TIFF OMITTED] T1984.057 [GRAPHIC] [TIFF OMITTED] T1984.058 [GRAPHIC] [TIFF OMITTED] T1984.059 [GRAPHIC] [TIFF OMITTED] T1984.060 [GRAPHIC] [TIFF OMITTED] T1984.061 [GRAPHIC] [TIFF OMITTED] T1984.062 [GRAPHIC] [TIFF OMITTED] T1984.063 [GRAPHIC] [TIFF OMITTED] T1984.064 [GRAPHIC] [TIFF OMITTED] T1984.065 [GRAPHIC] [TIFF OMITTED] T1984.066 [GRAPHIC] [TIFF OMITTED] T1984.067 [GRAPHIC] [TIFF OMITTED] T1984.068 Mr. Kucinich. I thank the Chair again for holding this important hearing. I look forward to the testimony of Senator Brownback and Representative J.D. Hayworth. Thank you very much. [The prepared statement of Hon. Dennis J. Kucinich follows:] [GRAPHIC] [TIFF OMITTED] T1984.069 [GRAPHIC] [TIFF OMITTED] T1984.070 [GRAPHIC] [TIFF OMITTED] T1984.071 [GRAPHIC] [TIFF OMITTED] T1984.072 [GRAPHIC] [TIFF OMITTED] T1984.073 Mr. Ryan. Thank you, Dennis. Mr. Vitter, would you like to make an opening statement? Mr. Vitter. No. Mr. Ryan. At this time, I'd like to ask unanimous consent that the statement from Congresswoman Chenoweth-Hage be inserted into the record. Without objection. [The prepared statement of Hon. Helen Chenoweth-Hage follows:] [GRAPHIC] [TIFF OMITTED] T1984.074 Mr. Ryan. Senator Brownback. STATEMENT OF HON. SAM BROWNBACK, A U.S. SENATOR FROM THE STATE OF KANSAS Senator Brownback. Thank you very much, Mr. Chairman. And if you'll pardon an old man's musings here for a moment, it's a great pleasure to be able to be here and testify in front of you where I got to work for a number of years, and I'm delighted in being able to work with you and now to be able to address you as chairman; I guess one of the pleasures of growing older. So I appreciate the opportunity to do that. Mr. Ryan. Thank you, old man. [Laughter.] Senator Brownback. I feel it a number of days, too. Let me quote the Constitution. One guy came out to Kansas to work with a group that I was with there, and a person in the crowd held up a copy of the Constitution and he commented, he said, you know, isn't that a terrible thing when you get outside of Washington, and people start waving around the Constitution. Can you believe it? I always know when I'm outside of Washington. People know the Constitution. And I thought it telling that the rest of the country maybe knows it better than people here in this town. But you can look at Article I, Section 1, right after the Preamble begins, ``All legislative powers herein granted shall be vested in a Congress.'' Pretty clear. The founders clearly believed that this included the power to regulate. As they had noted, John Locke's wise admonition that ``the legislative branch cannot transfer the power of making law to any other hands.'' This is John Locke. They understood that if a transfer did occur, legislators would no longer be responsible for the laws that the government imposes on the people. They would be waiving their authority that they were to represent the people for, and they could not do that. And for the first 150 years of the republic, the Supreme Court held that the transfer of legislative powers to another branch of government was unconstitutional. In the late 1920's, the Supreme Court essentially succumbed to some political expediency, reversed itself, and upheld a law which allowed Congress to delegate its authority. The case of J.W. Hampton, Jr. & Co. v. United States, started Congress down a slippery slope that we've gone a long ways down. Since then, Congress has ceded its basic legislative responsibility to executive branch agencies that craft and enforce regulations with the full force of law. But perhaps the most pernicious aspect of delegation is that voters can no longer hold government accountable. Originally designed to be the most accountable branch of government, congressional responsibility and accountability has clearly eroded. The fundamental link between voter and lawmaker has been severed. A handful of broadly written laws has spawned a virtual alphabet soup of government agencies, and an overwhelming regulatory burden that undermines the very idea of representative government. Many regulatory analysts believe more consequential law is generated in the executive branch than in the legislative branch. The Federal Register, which in 1995, churned out some 4,713 final rules, according to the Office of Management and Budget, states in its purposes that it ``provides a uniform system for making available to the public regulations having legal effect.'' In short, the executive branch has assumed the lawmaking authority given to the Congress. I think it's wrong. I frequently get constituents in Kansas asking well, how did that happen that some regulation went into effect or something happened that was an extraordinary action, and they said, don't you guys have the authority of law? I mean, aren't you the legislative body? To which I respond, yes, we are the lawmaking body, but here's what's taking place. They don't understand it. They then start whipping out and saying, well, I thought in the Constitution, it said this. We've waived and given up that authority. Under the Congressional Responsibility Act that Congressman Hayworth has been the champion of, that I'm pushing in the Senate, all rules and regulations would have to come before the Congress before they could be enacted into law; simple, clear, direct, I might also add, constitutional. Congress would then have to have an up or down vote on the proposed rule or regulation before it could take effect. The bill provides for consideration of rules and regulations in an expedited manner, unless a majority of members vote to send it through the normal legislative process. Under the bill, if Congress did not act, then the rule would, by default, die. This approach not only puts Congress back in control of the legislative process, it ends the horrendous practice of delegation without representation, and makes Congress accountable to the laws that affect the lives of every American. It's about the return of power, responsibility and authority back to Congress. I should note that this concept is non-partisan and ideologically neutral and in fact was first offered by then- Judge Steven Breyer who wrote that we should end delegation as a means to satisfy, ``the literal wording of the Constitution's bicameral and presentation clauses.'' The Constitution really has suffered greatly this century. I think we need to restore it to its rightful preeminence as a guarantor of our freedoms, the protector of our liberties, and the guiding force for our form of government. Delegation today is as wrong as taxation without representation in the 1700's. With enactment of this legislation, we send that clear message that it's Congress that legislates, it is Congress that passes the law. And, Mr. Chairman, let me just add a couple of additional notes, if I could on this because I think this is extremely important, particularly where we've gotten to the point today that people question the role of Congress. They see a lot of things happen on an international scale to them, or that they see driven on international agreements. They see things happening in the executive branch to them. And they're wondering, I thought the responsible branch to us, the representative branch was the one to pass the laws. And yet they see and sense, and I think frankly rightly so, more happening on an international and a national basis than legislation happening at the congressional level. This is the sense that people are developing and it's because we've allowed this power to go ahead and accrue further and further into the executive branch. It's time to stop. We've got nine sponsors to this legislation in the Senate. This is I believe the first hearing, perhaps the second and the first in this Congress on this bill, and I think it's important that it start getting some airing out so that people can look at it and say, we need to get this back where the founders intended. Thanks for holding the hearing, and I want to thank the person that's championed this for so long, J.D. Hayworth, who's really carried the torch for a long time. [The prepared statement of Senator Brownback follows:] [GRAPHIC] [TIFF OMITTED] T1984.075 [GRAPHIC] [TIFF OMITTED] T1984.076 [GRAPHIC] [TIFF OMITTED] T1984.077 [GRAPHIC] [TIFF OMITTED] T1984.078 Mr. Ryan. Thank you, Senator. Congressman Hayworth. STATEMENT OF HON. J.D. HAYWORTH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA Mr. Hayworth. Mr. Chairman, thank you very much. And as I look at my one-time colleague in the House, now serving in the Senate, I don't see a great deal of gray in that brown hair. To my good friend, the ranking member, the gentleman from Ohio, thank you for reading the piece in Roll Call. And for purposes of full disclosure and my own vanity, I'm just sorry they don't have an updated picture. If you notice, there was an additional ham hock underneath my chin which causes me great despair, but I'll try to update a picture and of course there's not much improvement anyway. And to my good friend from Louisiana, who joins us here today, it's good to have you here on the subcommittee, and I do want to thank you for this opportunity to testify about whether Congress delegates too much authority and power to Federal agencies. The answer to the question is quite simple: yes. Congress delegates far too much power to unelected, unaccountable Federal bureaucrats. One of the most important reforms we as a Congress can undertake is reclaiming our constitutionally granted power to make laws. My testimony today will focus on the practice of unconstitutionally delegating legislative powers to the executive branch, the effects of that delegation, the flaws of the Congressional Review Act, and why we should now enact the Congressional Responsibility Act. As was mentioned earlier, Mr. Chairman, last year I reintroduced the legislation as H.R. 2301, and my good friend who sits fittingly to the right of me right here at this table, Senator Brownback, introduced companion legislation as S. 1348 in the Senate. The goal of our bill is simple, to take back the constitutionally-granted power of Congress to make laws. Senator Brownback stated it earlier. It appears in the Constitution following that incredibly beautiful and practical preamble. Article I, Section 1 states, all, let me emphasize the word all, all legislative powers herein granted shall be vested in a Congress of the United States. But amazingly, for the last 60 years, Congress has been allowed to delegate its constitutionally granted power to make laws. In fact, the Supreme Court has not invalidated a single delegation of power since 1935. For the first 150 years of our republic, however, the Supreme Court held that the transfer of legislative powers to another branch would be unconstitutional. Not only does designating legislative power run counter to Article I, Section 1, it also clearly violates the Constitution's separation of powers clause by making the executive branch both the maker and enforcer of laws. James Madison wrote in the Federalist Papers that the consolidation of authority into one branch was tyrannical. Unfortunately, by allowing the executive branch to be both the maker and the enforcer of laws, we have created the tyrannical branch James Madison so feared. In 1999, the Federal Register had 4,538 proposed rules, in essence, 4,538 laws. By contrast, Congress did not even propose, let alone vote on, that many bills. The cost of the regulations appearing in the Federal Register in 1999 comes down like this. $758 billion, to think of it another way, $7,500 for the median two-earner family, or for the economists who join us here today, 19 percent of the gross domestic product. This imbalance demonstrates why many regulatory analysts have concluded that more consequential law is generated in the executive branch than in the legislative branch, as Senator Brownback mentioned in his testimony. Our founders also knew that by vesting lawmaking powers solely in Congress, the people could hold the legislative branch accountable for its actions. By delegating the powers to Congress to the executive branch, the people had no recourse because executive branch employees are the folks who craft these rules and regulations. And of course they are unelected and not directly accountable to the people. Delegation gives life to bad laws because it allows legislators to make ambiguous laws for which they can take credit, without having to take responsibility for the legal consequences or the costs of these regulations. Essentially, and this phrase may be especially apt for me, delegation allows Congress to have its cake and eat it too. Congress can reap the benefits of delegation and its excesses by helping constituents through the complexities of Federal regulations. At the same time, and again neither party has ownership of this little piece of political rhetoric, we in Congress can blame those confounded bureaucrats for misinterpreting our intent in drafting laws to begin with. So it's a very interesting game but it has profound consequences. We're in the congressional two-step. We can play both sides and win. But the loser in all of this is the people. Delegation also allows powerful special interests to expend substantial resources in private to benefit the few at the expense of the many. Simply put, if we're really to restore integrity, responsibility, and confidence in our Federal Government, one of the best ways we can do this is by ending this unconstitutional delegation of legislative powers to the executive branch. The 104th Congress realized the executive branch was wielding too much power in the legislative process so in March 1996, Congress passed the Small Business Regulatory Enforcement Fairness Act. A provision in the bill known as the Congressional Review Act [CRA], now allows Congress to review new regulations and prevent those regulations from taking effect. Now while I'm a strong supporter of the CRA as an important first step in having Congress assert more influence into the regulatory process and take back its constitutionally granted responsibilities, I regret that it has not yet been used to overturn one proposed rule or regulation. In fact, not one disapproval motion has even made it to the Senate or House floor for a vote. There are many reasons why the CRA has not been used. The most important reason may be the fact that it takes a two-thirds majority to overturn a rule as the executive branch is almost certain to veto a disapproving resolution of the rule that the executive branch creates. Therefore, executive branch employees can still craft rules and regulations that are supported by a minority. I have more, Mr. Chairman. If you'd like me to continue, I shall, but I'm happy to submit the rest of my remarks for the record and take your questions. Whatever it is the will of the committee and the ranking member, I stand patiently and expectantly for your verdict. [The prepared statement of Hon. J.D. Hayworth follows:] [GRAPHIC] [TIFF OMITTED] T1984.079 [GRAPHIC] [TIFF OMITTED] T1984.080 [GRAPHIC] [TIFF OMITTED] T1984.081 [GRAPHIC] [TIFF OMITTED] T1984.082 Senator Brownback. If I could, Mr. Chairman, I'm going to need to get back over to the Senate side, but thank you very much for allowing me to be here, and thanks for holding this hearing. Mr. Ryan. Thank you. Thank you very much for coming by, Senator Brownback. We appreciate all your work. Mr. Hayworth. Mr. Hayworth. Yes, sir? Mr. Ryan. Why don't we start with just a dialog and then we can finish it up. Mr. Hayworth. Sure, that's great. Mr. Ryan. I thought what you mentioned about the CRA was a very important point, which is the CRA doesn't really work because it's not used at all. Why do you think it's not used? And if it's a political problem, then don't you believe that we need to have more of an active mechanism, rather than the passive mechanism that the CRA is? Mr. Hayworth. That's precisely the reason. And as I mentioned in the testimony, when you have to have a super majority vote to make a change, that just functionally ensures that those around here who are in the business of counting votes and planning a legislative calendar have to really have the alarm bells go off to even begin that process. And so it's proven very impractical. And the other thing, it's almost the whole input/output question, the question of process. And of course what our legislation, the Congressional Responsibility Act, provides for is the reassumption by the legislative branch of its rightful role. It's all well and good to promulgate regulation. Indeed at the dawn of the progressive era, it was Theodore Roosevelt who said, let's bring experts into government, men and women of science. But as we've seen, like most good ideas, somehow when Washington gets a hold of them, the reality doesn't really match the vision. The fastest growing portion of the law, it appears to me, is the whole cottage industry of regulatory law and regulatory lawyers and the fact is now, among many folks, legal scholars and those who interpret American jurisprudence, you have this phenomenon of people who say, well, yeah, you have the Constitution, but you have this body of regulatory law. And some people quite seriously have given that regulatory law more precedent. So we're just simply saying, let's start at the beginning, let the regulators promulgate the rules, bring it to the House and the Senate in expedited fashion, and vote on it so we restore our rightful role under Article I, Section 1. Mr. Kucinich. Would the gentleman yield? Mr. Ryan. Yes. Mr. Kucinich. I'm going to have to leave in a moment, but I wanted to congratulate Representative Hayworth on his presentation. As I said, I read the article you wrote in Roll Call. I do have real concerns about the erosion of congressional authority, whether it's with respect to the executive branch, with respect to the WTO and these other world or global organizations, and I think that you're raising some points that need to be responded to, to remind people what this is all about. And I do have some concerns of course, particularly with respect to the EPA how this might work out. But I think it's important to have this kind of debate because we need to refresh everyone's memories as to what government's about. And I think that it always is helpful to explore the Constitution and try to get some sense of what this experiment in democracy has always been about. So while we may not be in agreement on some things, I can tell you that I think that this kind of a debate is healthy for our country, and I thank you. Mr. Hayworth. I thank my friend, the ranking member. If I could just make the point again, you're right. This knows no partisan stripe, just to reaffirm it. It appears formally in my testimony, and I think Senator Brownback touched on it briefly. A lot of the germination of this idea or bringing this to bill form really came from then-Judge Steven Breyer, before he was Mr. Justice Breyer, a Clinton appointee to the Supreme Court, it was Judge Steven Breyer who wrote in 1984 in a law review article how really you reassert Constitutional authority, especially in the wake of the decision made in INS v. Chadha on the legislative veto. And at the same time, Nadine Strossen of the ACLU, not somebody with whom I line up on every issue of public policy-- -- Mr. Ryan. You were her ``man of the year,'' weren't you? Mr. Hayworth. Pardon me? I think I was the man of--well, I won't go into that because none of those cheap bad jokes---- Mr. Kucinich. Representative, I want to thank you for being here. I have to go. Mr. Hayworth. Thank you, I understand, Mr. Kucinich. So I think we have, this shows really that our political spectrum is not linear when it comes to this. You don't have a situation where it's right versus left or Republican versus Democrat come to this. Mr. Ryan. Well, J.D., let me ask you because, I think that's a very profound point that this is not a Republican/ Democrat issue, but given that fact, don't you think that Congress has become cozy with the idea of delegation, the two- step as you mentioned. You can pass the vague law, you can take credit for it, then when your constituents are under the opression of the regulatory implementation of it, you can say I really feel for you, sorry this is happening to you. It's the regulatory agency, it's not me. I'll see what I can do to help you. And then we go through the maze of trying to help our constituents through this regulatory framework which is because of the delegation. Do you think we're going to be able to get this passed? And what do you think it's going to take to get this done and to get members off this cozy? Mr. Hayworth. Well, I thank you, Mr. Chairman, for having this subcommittee hearing. I think this is an important first step. Because again, as I mentioned earlier, with the legal community and others quite fairly who could claim some jurisdiction over this, there is a bias in favor of the breadth and body of regulatory law and regulatory precedent. And I think that is cause for great concern. But what I find heartening, the previous writings of now-Justice Breyer, and input of Judge Robert Bork, many other legal scholars, at least the embrace of the concept by some of the folks from the ACLU, so I think you have the makings of a grand coalition across party lines. But you are quite right to reiterate for the record what we have going on right now is the Washington two-step where we can say, look at the laws we've passed on one hand, and on the other hand, have a situation where constituent rights are calls, and it's added a whole new area of constituent service. And at the risk of sounding like a poor impersonation of Bill Murray and Caddyshack, we have a situation where you have really turned the Constitution on its ear because you have a duly elected Member of Congress, either in writing or--probably in writing instead of a phone call--but something alone the lines of: Dear Mr. and Mrs. Unelected, Unaccountable Federal Bureaucrat, won't you please, please, please, please take a second look at the way you are administering this rule to my constituent because I remember working on this in Congress and we meant something totally different from the way you're interpreting it. And I make that somewhat jocular statement because you really need to laugh to keep from crying because what has happened is a perversity of what our founders intended because we have taken the power, the very thing to distinguish us in the first three words of the Constitution, We, the People, in this Constitutional Republic, where we operate on the consent of the governed, we have taken away accountability by taking legislative powers from the hands of those who stand at the bar of public opinion every 2 years, in a unique institution that our founders created in Article I, we have taken that away and we have put power in the hands of folks who are unaccountable, and that is where you have all the bureaucratic inertia and red tape and other terms that are probably too colorful for congressional testimony in mixed company that I shant go into. It is a severe problem, and I hope the jocularity of my comments only serve to reflect just how serious a structural systemic problem this is when you ignore the Constitution, ignore the warnings of our founders, and somehow end up with this hodgepodge that we face today. Mr. Ryan. Thank you very much, Congressman Hayworth. Thank you very much for your leadership on this issue, and we look forward to working with you on this in the future. Mr. Hayworth. Thank you, sir. Mr. Ryan. I appreciate you coming by and testifying. Now we'll call panel II to the desk. On panel II, we have David Schoenbrod, a professor of law at New York Law School, and author of ``Power Without Responsibility: How Congress Abuses the People Through Delegation.'' We have Alan Raul, former Office of Management and Budget general counsel, and partner at Sidley & Austin. We have Wendy Lee Gramm, former Administrator of OIRA, OMB, and director of Regulatory Studies Program & distinguished senior fellow at the Mercatus Center at George Mason University. And John Spotila, the Administrator of OIRA. As Mr. Kucinich said, Wendy Wagner, who is an assistant professor at Case Western, had a family emergency and could not be joining us today, but her statement shall be included in the record. If each of you will stand, please. [Witnesses sworn.] Mr. Ryan. Mr. Schoenbrod, we'll start with you and move down. If you could start, and if we could ask our witnesses to please try and keep your comments within the 5-minute rule because we want to get to some good questions as well. STATEMENT OF DAVID S. SCHOENBROD, PROFESSOR OF LAW, NEW YORK LAW SCHOOL, ADJUNCT SCHOLAR, CATO INSTITUTE Mr. Schoenbrod. Thank you, Mr. Chairman. My written testimony makes for pivotal points. First, legislators want to avoid politically difficult choices. Second, they avoid those choices in many ways, one of which is to delegate lawmaking authority to administrative agencies. Third, the result is that legislators fail to fill their fundamental function under the Constitution, to be responsible for the scope of the national government; and fourth, Congress could, if it wished collectively to do so, take responsibility. Because these points are obvious to anybody in Washington, I will not belabor them now, but rather go on to discuss what can be done to restore the Democratic accountability that was guaranteed to the people under the Constitution. What about the courts as a solution to the problem? The courts can do more and there are signs that they are. The Supreme Court's decision in the legislative veto case, and in the line item veto case, as well, in Loving v. United States, and in AT&T v. Iowa Utility Board, and now the lower court's decision in American Trucking, are all hopeful signs. But the courts work incrementally; whereas, the problem we have today is massive and structural. If the problem is to be solved, the political branches must do more than stand on the sidelines and cheer the courts on. Congress, in particular, has an independent responsibility to uphold the Constitution. But what could Congress do to play its part? One option is for Congress to make the hard choices in the statutes themselves. Now that's the ideal thing. It's what Mr. Raul calls for and I'm all for it, but I have my doubts about how realistic it is. We have a massive body of statute already on the books which ducks the hard choices. Moreover, the incentives, realistically speaking for individual legislators, are not to do this. Why? Because any time you face the hard choice and the other guy ducks it by taking the high ground, you suffer politically. Besides, then you marginalize yourself because nobody wants to listen to you if you rain on the parade of happy promises. So functionally, I think the realistic outcome will be that most of the time, Congress is going to want to duck the hard choices, so long as we operate under the current political ground rules. So what we really have to do is to change the ground rules. The genius of the Congressional Responsibility Act is that it would change the ground rules. You can duck the hard choices but they're coming right back at you. That's the great thing about it. And at the same time, they come back at you with all the expertise of the agencies so you have the best of both worlds. With a statute like the Congressional Responsibility Act, then the political incentives all change. You get the benefits of standing for the Constitution. That's great. But the question is, is it going to get passed. Now, you know what's happened is that the congressional leadership in the Senate has been putting the brakes on the bill. The same has been going on in the House. And the reasons for this are all together clear. If, for example, the Republicans come forward with the bill, there's no question that they're going to get demagogued on it. It's an easy kind of issue to demagogue. And so we really have to change the political environment in which this issue comes up. But I think that could be done, and I think it could be done for the kinds of reasons that Senator Brownback and Congressman Hayworth talked about. This is an issue that people understand. In the cab on the way over here, the cabdriver asked me what's the hearing about, and I said the hearing is about does Congress delegate too much power to agencies and what should be done about it. He said, well, why do they want to hear about that? They know the answer. [Laughter.] On basic structural questions like this, questions about congressional responsibility, about cheating on the basic ground rules of politics with the American public, people understand it. That's why they supported unfunded mandate reform. That's why they support term limits because they know that long terms come out of cheating. That's why they support the balanced budget concept. That's why they support the line item veto. Now some of these reforms were not successfully executed, but I think the potentials in there with the right kind of leadership in Congress to bring the issue back to the people, to get the kind of broad based support we need to make the real change that ought to take place. [The prepared statement of Mr. Schoenbrod follows:] [GRAPHIC] [TIFF OMITTED] T1984.083 [GRAPHIC] [TIFF OMITTED] T1984.084 [GRAPHIC] [TIFF OMITTED] T1984.085 [GRAPHIC] [TIFF OMITTED] T1984.086 [GRAPHIC] [TIFF OMITTED] T1984.087 Mr. Ryan. Thank you, Mr. Schoenbrod. Mr. Raul. STATEMENT OF ALAN CHARLES RAUL, FORMER GENERAL COUNSEL, OFFICE OF MANAGEMENT AND BUDGET, PARTNER, SIDLEY & AUSTIN Mr. Raul. Thank you. Professor Schoenbrod didn't mention, I was his taxi driver coming over. [Laughter.] No, no. I'm just kidding. Mr. Chairman and members of the subcommittee, my name is Alan Raul. I'm a partner in the Washington, DC office of Sidley & Austin. I'm testifying today in a personal capacity. Thank you for the opportunity to testify on the issue of delegation of congressional power to administrative agencies. In particular, it's a great honor for me to appear on this distinguished panel, each of whom in different ways is a hero of mine, and certainly on this issue. Professor Schoenbrod deserves profound credit for reinvigorating the thinking on the nondelegation doctrine through his important book ``Power Without Responsibility.'' I know that it influenced my own personal thinking, as well as others involved in various aspects of the issues. Wendy Gramm is a former colleague at OMB. Any OIRA Administrator is a hero to the Nation, and I will include Mr. Spotila in that category as the current incumbent, and therefore victim of numerous slings and arrows. Wendy Wagner, is a hero as well, and I'm sorry that she's not here. I have cited Professor Wagner's article, the Science Charade of Toxic Risk Regulation, both in the full text of my testimony here today as well as in briefs that I was privileged to submit on behalf of Senator Hatch and Congressman Bliley as amici in the American Trucking Association case in the D.C. Circuit. That case is now pending before the Supreme Court. I commend the committee for addressing this issue now, as the Supreme Court is poised to consider the implications of the nondelegation doctrine for EPA implementation of the Clean Air Act in the American Trucking case. This case is crucial because it presents a challenge to one agency's unilateral decision to overhaul environmental policy, and at the same time transform the Nation's economy dramatically without a congressional mandate or a scientific imperative to do so. Of course, the environment must be protected in the public interest, but EPA must exercise its administrative functions within the parameters established by the Constitution. An executive agency may simply not take the country in a major new regulatory direction without warrant from Congress. This same issue was also at play in the Supreme Court's recent invalidation of the FDA tobacco rule in Brown & Williamson v. FDA. I believe there is certainly a reasonable case, which I would support, for the regulation of tobacco, but it should come from Congress and not as a usurpation by the executive branch through FDA. Similarly, the dispute in American Trucking is not about the Nation's commitment to protecting and cleaning up the environment. That is nearly universal and certainly a commitment which I share. In fact, EPA's data demonstrate a phenomenal success story in this area, through the efforts of various Congresses, Administrations, and EPA, the air has become vastly cleaner and healthier over the last 30 years. So the debate instead is over the scope of EPA legal authority under the Constitution to commit enormous additional resources, without any assurance that such resources will not be wasted. While Congress may have the constitutional power to throw the country's money away, which I don't think it generally does, EPA certainly does not. It should be noted that EPA may be the rare administrative agency in the United States and perhaps anywhere in the world that believes itself to be legally precluded from adopting cost-effective regulatory standards. I think that this issue is going to be considered by the Supreme Court in the American Trucking case, which the Lead Industries Association decision decided by the D.C. Circuit in 1980, which barred EPA from considering cost-effectiveness. Much of the mischief in the Clean Air Act and environmental regulation derives from not an act of Congress or perhaps even from a lack of precision by Congress, but rather from an interpretation by the D.C. Circuit Court of appeals in the Lead Industries case in 1980. That decision held that the Clean Air Act precludes EPA from considering costs and, more importantly, cost-effectiveness in setting standards under the Clean Air Act. If the Supreme Court is likely to overrule the Lead Industries decision because it is inconsistent with its own Benzene decision. In Benzene, the Supreme Court found there was a requirement that regulatory agencies, in that case OSHA, regulate on the basis of a finding of ``significant'' risk, thereby leading to a balance between the risks and the costs imposed. I think they'll find the same factors are relevant under proper construction of the Clean Air Act. I would note that the Lead Industries decision was decided in 1980, and I believe Professor Schoenbrod was involved in the argument of that case in an earlier incarnation, 5 days prior to the decision of the Supreme Court in the Benzene case. We might not be here today having this hearing if the Supreme Court decision had been handed down first and the D.C. Circuit in 1980 had had the opportunity to consider the Supreme Court's decision in Benzene. What steps should Congress take to enhance accountability? We are talking about the nondelegation doctrine, which is of course a constitutional provision under Article I, Section 1, that provides all legislative powers are to be exercised by Congress. Since 1935, which was the last time that the Supreme Court has struck down any act of Congress under the doctrine, the doctrine is made very much alive. It is applied now, not as a basis to strike down statutes, but rather as a rule of construction to limit excessive usurpations by the executive branch under broad mandates. So what can Congress do to rein in those broad mandates? First I think, as Mr. Hayworth testified earlier, the Congressional Review Act should be utilized more frequently. Not one measure has been brought to a vote for disapproval on any regulation since the act has passed. That certainly is a measure which is on the books and could be utilized. And perhaps in connection with that, OMB review and GAO review could be promoted and further strengthened to get independent analysis. Congress should adopt a regulatory budget which recognizes that regulatory expenditures by society are every bit as important as tax expenditures or fiscal expenditures, so that they should be disciplined. The executive branch's incurring of regulatory expenditures or impositions should be disciplined. Congress of course should set regulatory standards with greater precision in the laws. As Professor Schoenbrod mentioned, in the Iowa Utilities case the Supreme Court ruled that the Telecommunications Act of 1996 was a model of ambiguity. Clearly, there's a responsibility up on the Hill for drafting with greater precision. I also think that Congress should consider what I've dubbed the ``Honest and Cost-Effective Regulatory Policy Act.'' It's important that the assumptions that agencies use, the uncertainties that are factors in their decisionmaking, should be disclosed, their default assumptions and so on, the policies that are implicit in the scientific choices that they make. But also and perhaps equally important, agencies like EPA should not only be empowered but encouraged to consider the cost- effectiveness of their regulations to ensure that society's resources are not wasted. The question of diverting additional resources, enormous resources for environmental protection, such as EPA's ozone rule, is not that environmental protection is not worthwhile; of course, it is. But if $9 billion are being spent to recover $1 billion worth of benefits, according to some of EPA's own data, that's an unnecessary diversion of society's resources that could be better deployed for other forms of environmental protection, public health protection, fighting cancer, and so on. I would also, in closing, suggest that the Supreme Court, starting in 1993, decided three cases beginning with the Daubert decision which required Federal judges to serve as gatekeepers for the reliability and relevance of the scientific evidence that is presented in court in civil litigation. Civil litigation is very important, but administrative litigation involving judicial review to ensure accountability of agency action, is often at least as important. If you're talking about judicial review of agency action that can affect the entire society, it is at least as important in that context that judges look very carefully at the scientific methodologies and the relevance and reliability of the science that agencies use in setting their regulatory standards based on science. So I would encourage the Congress to adopt legislation bringing Daubert-type principles into administrative law. Thank you, Mr. Chairman. [The prepared statment of Mr. Raul follows:] [GRAPHIC] [TIFF OMITTED] T1984.088 [GRAPHIC] [TIFF OMITTED] T1984.089 [GRAPHIC] [TIFF OMITTED] T1984.090 [GRAPHIC] [TIFF OMITTED] T1984.091 [GRAPHIC] [TIFF OMITTED] T1984.092 [GRAPHIC] [TIFF OMITTED] T1984.093 [GRAPHIC] [TIFF OMITTED] T1984.094 [GRAPHIC] [TIFF OMITTED] T1984.095 [GRAPHIC] [TIFF OMITTED] T1984.096 [GRAPHIC] [TIFF OMITTED] T1984.097 [GRAPHIC] [TIFF OMITTED] T1984.098 [GRAPHIC] [TIFF OMITTED] T1984.099 [GRAPHIC] [TIFF OMITTED] T1984.100 [GRAPHIC] [TIFF OMITTED] T1984.101 [GRAPHIC] [TIFF OMITTED] T1984.102 [GRAPHIC] [TIFF OMITTED] T1984.103 [GRAPHIC] [TIFF OMITTED] T1984.104 Mr. Ryan. Thank you, Mr. Raul. Dr. Gramm. STATEMENT OF DR. WENDY L. GRAMM, DISTINGUISHED SENIOR FELLOW DIRECTOR, REGULATORY STUDIES PROGRAM, MERCATUS CENTER, GEORGE MASON UNIVERSITY, FAIRFAX, VA Ms. Gramm. Thank you very much, Mr. Chairman. I'm pleased to be here and I should point out that we should all listen to the wisdom of the taxi drivers. I'd like to summarize my testimony. In response to the question you posed, my answer is yes. Congress has delegated too much authority to the executive branch. In addition, sometimes the executive branch has taken authority not given it. Agencies have indeed expanded on the authority granted. The end result is the same. Agencies have too much power over American individuals and businesses as well as over State and local governments. Regulations have been growing unchecked and agencies are not sufficiently accountable to the public with regard to the exercise of this power, and estimates are now that regulations cost Americans more than $700 billion per year. Congressman Hayworth pointed out the most recent estimate of $758 billion per year. For the past two decades, Congress and every President since President Nixon, have tried to implement procedures to assure accountable and reasonable regulations. We've had studies and commissions, like the Commission on Federal Paperwork. We've had laws like the Paperwork Reduction Act, the Reg Flex Act, UMRA, SBREFA, and the CRA, and we've had Executive orders instructing agencies to perform analyses. Unfortunately, these past laws and procedures have not been very effective at controlling the problem of unduly burdensome regulation or the expansion of agency authority, in part because the analysis required by many of these laws must be prepared by the agency writing the regulation, not a disinterested party in the issue. The voice of the citizen or average consumer is not well- represented in the regulatory debate. Furthermore, there is little truly unbiased analysis of the impact of a regulation in the rulemaking process. Such analysis could help agencies write better regulations, avoid the consequences of unduly burdensome regulations, as well as help Congress in its oversight role. For these reasons, I established the Regulatory Studies Program at the Mercatus Center, George Mason University. Our objective is to advance knowledge of regulations and their impact on society by providing careful, high quality analyses of agency rulemakings from the perspective of the public interest. Since our first public interest comment in December 1996, our program at Mercatus has commented on 45 regulatory proposals, ranging from EPA's ozone and particulate matter proposals to OSHA's ergonomics to the Army Corps of Engineers' nationwide wetlands permitting process, to the SEC's market fragmentation concept release and several agencies' privacy regulations. While the Mercatus Center has written many analyses, there's clearly a need for more and better analysis that is independent of the agency writing the regulation. For these reasons, I have supported and continue to support the establishment of some kind of congressional Office of Regulatory Analysis. In my view, Congress cannot carry out its responsibilities effectively without such analysis, and the American public will be better served if regulatory burdens are accounted for and monitored. And let me just pick up on a point that Alan Raul made recently. It's also been my view that not only is analysis needed, but also so is a really true and accurate measure of the cost of regulations. As soon as Americans begin to track-- Americans and Congress--begin to track regulations the way we track expenditures in our fiscal budget, we will pay more attention, we will monitor, and everyone I think will be more accountable and make the agencies more accountable for the costs that they impose. Thank you very much. [The prepared statement of Dr. Gramm follows:] [GRAPHIC] [TIFF OMITTED] T1984.105 [GRAPHIC] [TIFF OMITTED] T1984.106 [GRAPHIC] [TIFF OMITTED] T1984.107 [GRAPHIC] [TIFF OMITTED] T1984.108 Mr. Ryan. Thank you, Dr. Gramm. Mr. Spotila. STATEMENT OF JOHN T. SPOTILA, ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET Mr. Spotila. Good afternoon, Mr. Chairman, and members of the committee. The administration has worked hard to improve the Federal Government's regulatory system. We hope that today's discussion will lead to further progress in this important area. Sound regulation is essential in our society. At the President's direction, we have concentrated on ensuring that new regulations provide as much benefit as possible to the American people while minimizing burdens. We have encouraged regulations that are streamlined, customer friendly, and cost effective. We have looked for opportunities to substitute innovative alternatives for traditional command and control regulations. We have also changed the way we enforce regulations. Agencies have increasingly moved from an adversarial approach to a partnership approach that rewards efforts to reach outcome based roles, such as cleaner air and safer workplaces. While our job is not complete, we have made real progress, and we must build on that progress as we look to the future. In some instances, laws are very specific about what agencies can do and what they must include in the regulations they issue. In other areas, agencies have more discretion in how to implement Federal programs or take other action. At the President's direction, OMB's Office of Information and Regulatory Affairs [OIRA], helps agencies strike the right balance. For significant rules, we work to ensure that agencies ask the right questions, consider relevant data, employ sound analysis, and balance competing concerns in a reasonable, practical way. We are very conscious of the constitutional framework in which we operate. While the executive branch bears much of the responsibility for sound regulation, agencies must always act in compliance with the statutory authority granted to them by Congress. Implementing legislative policies can present a complex and difficult challenge. Laws passed by Congress often provide general grants of authority to agencies to achieve particular policy goals. In such cases, Congress recognizes that it cannot anticipate and account for every relevant real world factor. Instead, it gives agencies the discretion necessary to deal with changing circumstances and detailed program needs. The agencies must use this discretion wisely and with a practical bent. For the most part, we believe they do a good job, exercising in a principled and careful manner the discretion given them by Congress. In developing regulations, public involvement is essential. The President has emphasized that there is no better way to achieve common sense regulation than to draw on the common sense of the American people. When those affected by regulations participate in the development process, we often end up with a much better product. This emphasis reinforces the statutory requirement, the notice and comment rulemaking established more than 50 years ago by the Administration Procedure Act [APA]. It also extends to more recent legislation that has added new procedures to encourage public participation. Agencies now engage in more outreach and communication than ever, and their decisions on rules are better for it. For more than 50 years, individuals and businesses who believe they had been adversely affected by agency regulations have had the right, under the APA, to seek judicial review of regulatory decisions. This is an important check on any agency rules that exceed relevant statutory authority or that have not complied with applicable APA procedures. In a series of important cases, the Supreme Court has developed standards used by courts to review agency regulatory decisions. The Supreme Court has acknowledged the important role of agencies in issuing regulations. It has confirmed that agencies should have broad discretion in interpreting legislation and implementing statutory directives in their areas of responsibility. This discretion is not unlimited, however, and on occasion the courts have found some rules to be inappropriate. The fact that regulations are challenged in court and sometimes overturned does not mean that the regulatory system is broken. Both the legislative and executive branches of our government work hard at helping and protecting the public. Given our complex world and the often difficult problems that laws and regulations address, some of these actions will be controversial. Occasionally, the courts strike down a law as unconstitutional or a regulation that's not in compliance with the law. The checks and balances of our Constitutional system work to protect our citizens by reviewing the actions of both the legislative and executive branches. We believe the Federal regulatory system today works well to serve the interests of the American public. Federal agencies make good faith efforts to develop, assess, implement and enforce regulations that implement important government programs. The system is not perfect, however, and we share your interest in improving it further. We welcome the opportunity to work with the Congress on constructive efforts in this area. Thank you, Mr. Chairman. This concludes my remarks. [The prepared statement of Mr. Spotila follows:] [GRAPHIC] [TIFF OMITTED] T1984.109 [GRAPHIC] [TIFF OMITTED] T1984.110 [GRAPHIC] [TIFF OMITTED] T1984.111 [GRAPHIC] [TIFF OMITTED] T1984.112 [GRAPHIC] [TIFF OMITTED] T1984.113 [GRAPHIC] [TIFF OMITTED] T1984.114 [GRAPHIC] [TIFF OMITTED] T1984.115 [GRAPHIC] [TIFF OMITTED] T1984.116 Mr. Ryan. Thank you, Mr. Spotila. Did I pronounce your name correctly, Spotila? Mr. Spotila. Spotila, yes. Mr. Ryan. Spotila, OK. I'd like to start with you before we go through the rest of the panel, and Mr. Terry has just joined us now. Mr. Spotila, on May 18 of this year, the chairman of this subcommittee, Chairman McIntosh, wrote OMB Director Jack Lew about the Department of Labor's pending at OMB final rule entitled, ``Birth and Adoption Unemployment Compensation,'' which we all refer to as Baby UI. The chairman objected to a number of things. First, the absence of a regulatory impact analysis, the absence of a Paperwork Reduction Act submission for the Baby UI experiment prior to its finalization, and the absence of a specific congressional delegation for the Department of Labor's proposed expansion of the 65-year-old unemployment compensation system, which was designed for the truly needy people who are unemployed involuntarily. Under what specific congressional delegation of authority did OMB and OIRA approve the Department of Labor's Baby UI rule? Do you agree with the Department of Labor's own internal legal analysis documents that admit that the Baby UI rule will not withstand a court challenge? And if not, why not? Mr. Spotila. I believe that the Director did answer that letter but let me go into more detail than he went into. We did review that regulation under Executive Order 12866, as we do other significant rules. Mr. Ryan. It was a letter from you. It was just a couple of paragraphs. It didn't go into enough detail, so if you could expand a little bit. Mr. Spotila. That's what I'm saying, let me go into a little more detail now. Let me start with the agency's determination of its regulatory authority because I think that's something you've referenced earlier today and will be a key issue. The Department of Labor and its Solicitor conducted a legal analysis internally. They conclude that, just as they have exercised authority in the past to interpret the statutory reference to being ``able and available for work,'' just as they've interpreted it in the context of training and of illness and temporary layoffs and I think in other instances as well, they came to the conclusion, from a legal standpoint, that they had authority to extend this particular opportunity for States to enable the States to adopt legislation that would allow parents to apply for unemployment compensation when they take time off to take care of a new birth or an adopted child. That's a legal analysis that my office did not attempt to make independently. We did review the fact that they had made that internal determination. And we did have some discussions, including internally with OMB counsel, Mr. Raul's successor, to make certain that that was a credible legal argument. We recognize that reasonable people will differ just as others have commented that they had questions about this authority. Ultimately, in conducting our review under the Executive order, we concluded that the Department had a credible enough legal position that we could proceed. We then turned to the question of regulatory impact analysis. The initial proposal of this rule had predicted that it would have minimal effect because it worked on the assumption that only a few States would take advantage of it. The Department received a lot of comments to the extent that that was not likely to prove true, that in fact more States would take advantage and the impact would be broader. And so the department did a regulatory impact analysis which we reviewed in some detail. In fact, my staff worked closely with them on that. Our sense is that--the sense of my staff is that the ultimate analysis was actually pretty good, and it reflected a number of public comments that had been received which included estimates of numbers and cost impacts and the like. So it is something we actually gave some thought to. And on the issue of the Paperwork Act submission, which you referenced, this is again a rule which will authorize States to take other action. Our sense was that it did not contain an information collection at the moment. There was, therefore, not something that we could traditionally review under the Paperwork Act, although we certainly are interested in how the States might take action to implement this in the future. We do work pretty closely with agencies whenever an information collection is involved. In this particular case, we concluded that it was not appropriate to do a paperwork review since the rule itself did not contain an information collection. Mr. Ryan. So what specific congressional delegation of authority are you citing to justify OMB's legal analysis which seems to contradict the Department of Labor's own legal analysis that concedes that there is no statutory authority here? Mr. Spotila. Actually, we relied on the Department of Labor's internal legal analysis that they had authority. They take the position that they have the authority to interpret the Federal Unemployment Compensation statutes, including this requirement that individuals be able to work and available for work. They have taken the position, and not just in this instance, that they have the authority to interpret that provision. While we looked at that analysis, we did not do, nor would we normally do, an independent legal analysis of their individual authority. Mr. Ryan. Well, let me move on to the RIA, why did OMB not require public comment on the draft RIA, the Baby UI, rule before the rule was finalized? Has the OMB ever approved an agency's final major rule prior to public comments on its RIA? Mr. Spotila. Actually, yes. I asked my staff this question. I'm told there has been a long practice--it doesn't happen all the time--but it's happened more than 40 times in the last 5 years, for example-- -- Mr. Ryan. It's happened more than 40 times in the last 5 years? Mr. Spotila. In the last 5 years is what I was told by my staff. In these instances, an agency has published a proposal without an impact analysis and has gotten comments suggesting they should do one, including often comments indicating what the cost impact would be. They then actually do an impact analysis which we review in detail, and then they include that analysis in their final rule. Mr. Ryan. For major rules. If you could, that's an interesting statistic. I had not heard that before. Could you please provide for the record the list of 40 major rules that did not receive public comment before the RIA? Mr. Spotila. We'll attempt to do that. As I say, my staff had briefed me on this as I came here today, so we'll put that list together and send it to you. Mr. Ryan. Yes. We'll give you time if you could give that to us for the record. Mr. Schoenbrod, let me go to you. And then I'll come back to you, Mr. Spotila. In the American Trucking case, Cass Sunstein commented, in the wake of the American Trucking decision that the nondelegation doctrine had only one good year, 1935. Do you disagree with this statement? What case law, including specific statements therein, do you think Congress needs to be aware of to understand the importance of the nondelegation doctrine in current jurisprudence? And do you believe that other cases since 1935 have helped us in constricting regulatory nondelegation? Mr. Schoenbrod. Well, when Professor Sunstein wrote that about the one bad year, he was having one bad moment. [Laughter.] His concept of what nondelegation is, is very limited. He ignores the line item veto case, ignores the legislative veto case, he ignores many other precedents where the Supreme Case in one way or the other has given force and vitality to the nondelegation idea. For one example, the void-for-vagueness doctrine, which says that laws can't be enforced, police can't enforce laws if there isn't a clear rule of conduct is, in and of itself, a nondelegation idea. Now, the court has to acknowledge the obvious, has not been altogether straightforward about this in dealing with the line item veto and the legislative veto. It said it wasn't talking about delegation. Most legal scholars disagree with that kind of distinction. They don't really buy the court's compartmentalization. Aside from striking down statutes, Cass Sunstein himself has written about many instances where the court has used the nondelegation idea to limit grants of statutory authority as it did in the Benzene case, as Alan Raul talked about this. My book, ``Power Without Responsibility'' in chapter 2, cites many, many cases where the delegation idea has had vitality before and after 1935. Mr. Ryan. Thank you. Mr. Raul, I'd like to ask you a question, but before I do, I'm going to go and Mr. Terry's going to take over the chair, but there was something new to these New Hampshire debates, if you watched the Presidential elections, where you had this very interesting dynamic where each of the Presidential contenders could ask each other questions. And I'd like to ask you to start thinking about who on the panel you would like to ask a question, what question you would like to ask them, and then ask away and get an answer, and we'll try and keep the discussion within 5 minutes. I think that's a great way to go when it comes to doing witness testimony. It sounds like we've got a vote coming. Mrs. Gramm, I would like to ask you to tell me specifically how you think this congressional Office of Regulatory Affairs will work. Mr. Raul, if you could comment briefly on section 109 of the Clean Air Act which instructs the EPA to set National Ambient Air Quality Standards [NAAQS], at a level requisite to protect public health with an adequate margin of safety. That's a very, very important comment there. But the EPA assumes that particulate matter and ozone may harm public health at any level above zero. The EPA also assumes that when setting a NAAQS, it may not consider the cost, the feasibility, or the health hazards of poverty, as you mentioned in your testimony. Doesn't this mean that under the EPA's reading of section 109, the EPA could prohibit all emissions from all sources, in other words, implement essentially a policy of de- industrialization? Isn't it clear that Congress never intended to delegate such power to EPA? I was interested in a comment you made in your testimony where you thought that EPA saw itself as rare among other regulatory agencies with respect to this perspective. Could you please comment on that? Mr. Raul. Sure. Well, with regard to the rarity of EPA's position, I think the Clean Air Act, certain aspects of the Clean Water Act, and certain other statutes that are administered by the Environmental Protection Agency are, within my experience, somewhere between rare and unique in that they have been construed by courts, and in some cases by Congress, to preclude considerations of cost effectiveness. No other agency is operating under a similar statutory framework. OSHA, to some extent, considered itself to be in a non- cost-effectiveness consideration mode before the Benzene decision, and the Supreme Court set them straight on that. The Food & Drug Administration, the Department of Transportation, U.S. Department of Agriculture, are all, to my knowledge, operating under principles that allow them to balance costs and benefits. Similarly, in the rest of the world, to the extent that I'm familiar with it, executive agencies, regulatory agencies set cost-effective regulations that are reasonable balances to protect our public and their public against significant risks. It is really only EPA that has what is perceived to be a statutory framework that precludes consideration of cost effectiveness and efficiency in regulation. Not all of this is due to EPA's own misguided or churlish view. As I indicated, the D.C. Circuit, in 1980, with regard to the Clean Air Acts provisions that we've been talking about, said that EPA really could not consider the question of cost effectiveness in regulations, even though, as you quoted, Mr. Chairman, from section 109, the language says nothing about the inability to consider the effectiveness of the regulation that the EPA would set in order to protect the public. You have got words like endanger, safety, adequate. All of these certainly would allow for the agency to consider how significant is the risk, how effective is this regulation that we're proposing in abating that particular risk. It is that type of analysis that the Supreme Court engaged in in the Benzene case when it applied nondelegation principles to rein in the agency. So when I say that EPA views itself as rare, I don't know whether they consider themselves rare. My point was they are rare in that their statutes, as construed by the courts, really seem to require the agency to throw cost effectiveness to the winds. We should recognize that, often, we have a very limited science mandate that doesn't answer all the questions. Mr. Ryan. Well, going further, and taking your point even further, given the broad parameters here, isn't it true that the nondelegation principle is applied here because with EPA's interpretation, you could possibly implement a policy of de- industrialization, and doesn't that then say that this is clearly not what Congress intended in statutory authority? Mr. Raul. Sure, right. Well, in the case of the Clean Air Act rules, which at the time were perhaps the rules with potentially the greatest impact on society, there really is a question of whether Congress would have intended, in its grant of authority to the agency, that the agency could go that far down the road to imposing such dramatic costs on society. Really, though, the costs are not imposed merely on industry. I think there's a misconception that cost-benefit analysis, requirements of cost-effectiveness, and so on are really a one-sided ideological perspective designed to preserve industry from incurring excessive costs. We're talking about society's resources here. So in the case of the Clean Air Act Rules, which are, according to EPA's own conservative estimates, in the range of at least $10 billion compliance each, and in the case of particulate matter, it's about $10 billion for compliance for partial attainment. I don't think that even the agency believes that the particulate matter standards proposed in the Clean Air rules under discussion could be achieved by industry. So it was $10 billion for partial compliance. Now I see the parallel in the Brown & Williamson v. FDA case over regulation of tobacco. This is an area which, again, impacts society and people throughout the country so profoundly, where Congress has spoken on this issue a number of times and has never provided the authority to the agency. One must analyze where you're talking about these dramatic impacts on the economy, the society, the possible reduction in economic output such as the de-industrialization that you've mentioned, could it possibly be that Congress intended to delegate such power. In the Brown & Williamson case, Justice O'Connor said that, where such sweeping impacts are possible, it's only common sense that Congress did not intend the agency to go this far without a more express warrant to do so. Mr. Ryan. Thank you, Mr. Raul. Ms. Gramm, I'd like to ask you--I have to go and will turn it over to Mr. Terry--I'd like to ask you to explain how you think this congressional Office of Regulatory Analysis would work, and then I'd like to read later the testimony of the New Hampshire-style questioning. If each of you would think of a question to ask each other. I find that the experts are sitting out here, and it's interesting to hear the give-and-take and the Q&A between witnesses and what that offers to help enlighten us. So after your question, Ms. Gramm, if you could each ask each other a question, one witness to one other witness, a witness of your choosing, we'd appreciate that. Thank you. Ms. Gramm. OK, thank you. You ask about how a congressional Office of Regulatory Analysis would work, and I would just say, use as a model, a shadow OIRA, to perform independent, high-quality analysis of agency regulations at the proposal stage. Use guidelines that OMB has prepared about how to do regulatory impact analyses. Evaluate the agency with regard to whether or not they have followed the law, including the intent of the law or have they gone beyond the law. Have them review the rulemaking proposal, whether or not this solves the problem, whether or not there was a market failure to begin with that called for a regulation, unless it was a regulation that was explicitly required by the law. Ask the question of whether or not the agency has considered different alternatives, what might be other alternatives; whether or not the Federal Government is the appropriate level to regulate if there was a market failure. You can also ask if a very good cost benefit analysis, weighing the benefits and the costs of the regulation in order to maximize net benefits was done. I would suggest that all this analysis be done at the proposal stage so that this information can be put into the rulemaking record of the agency's file. And I would also say that such information would be helpful for Congress in its oversight function if the rule goes final without taking into account the independent analysis. My view is that even when I was at OIRA trying to perform these functions, I felt the need for some outside independent analysis because even OIRA, as part of the administration, is not entirely unbiased in its review of the agency regulations. Mr. Terry [presiding]. Thank you. Ms. Gramm. Do I get to ask a question? [Laughter.] Mr. Terry. I have a question, but I'll let my question be the closing question. We do have votes coming up here in a few minutes. Actually, we did this in Nebraska a few years ago, so we'll let New Hampshire take the credit though. Mr. Raul. Can we get the taxi driver back up here. [Laughter.] Mr. Schoenbrod. In spite of the taxi driver, I have a question to ask Mr. Spotila. It seems to me, it strikes me that you, in your present position, know as much as anybody about how the process of reviewing agency rules works, because you do it. So I'm wondering whether you agree with then-Judge Breyer when he floated this idea that's behind the Congressional Responsibility Act. I want to be clear, Judge Breyer wasn't saying he was favoring this but he said it could work. As a practical matter, congressional responsibility could work, and he had a number of formats under which it could take place. What I'm asking you, is can you imagine some format where as a practical matter, the idea behind the Congressional Responsibility Act could work. After you answer, I'd love to hear Dr. Gramm because she had the same kind of experience. Mr. Terry. That would probably be the Iowa plan to ask two questions. [Laughter.] Mr. Spotila, if you would answer that question. Mr. Spotila. Thank you, Mr. Chairman. Mr. Terry. Actually, that's a good question. I appreciate that. Ms. Gramm. Can Mr. Hill help me with an answer to that too. Mr. Spotila. Let me start by saying that the administration hasn't taken a position on the bill, so I don't want to state an administration position. Rather, I'll give you an initial reaction if you will. I think that we have some concerns; I would have some concerns as to the practicality. We start certainly by being very deferential to the Congress. When the Congress makes decisions about what it needs to do its job, clearly we're deferential to those decisions. So certainly in an overall atmosphere of respect, I still try to look to the practicality of it. I think that many of the instances where people are most concerned about regulations come because of statutes where the Congress found it very difficult to be specific, either because the subject was very complex, or because it was too difficult to reach a consensus. They then delegate authority to an agency which goes through an extended comment period, does outreach to the public, does a lot of analysis and all the rest, comes up with what may well be a very complex and extensive rule. I'm not sure that it's practical to expect that when that rule comes back to the Congress in this construct, in the context of limited debate, probably limited--perhaps limited additional analysis over and above what the agency has done-- that you're going to get the kind of, you know, long and extensive consideration by the Congress that would really add meaningfully to the ultimate decisionmaking. You might get a political judgment again, but you wouldn't necessarily get significant input on the merits, simply because the Congress is so busy doing other things. And, if you then added to it a long list of these rules coming, one after another, each of which may have years of work behind it, I'm not saying that it's impossible but from a practical standpoint, I think the Congress might find that very difficult to manage. The real difficulty here is in getting the agencies to do the job right in the first instance. To get the Congress to delegate as specifically and as clearly as possible, so that the parameters become clear, and then to get the agencies to do their job properly. That's why in my testimony and in the work we've been doing, our emphasis has been in trying to improve the way the agencies do it. Because I think ultimately that's where the solution lies. Mr. Terry. Mr. Schoenbrod, do you want to have a quick analysis of---- Mr. Schoenbrod. I'm actually encouraged by what he says because it seems to me the purpose of the Congressional Responsibility Act is not for Congress to add additional cogitation. Certainly we get enough cogitation in the Federal Register. The purpose of the act is to get Congress to take responsibility. And so if it's possible for Congress to do that, I'm glad to hear that. Mr. Terry. Ms. Gramm, do you have a question? Ms. Gramm. Well, my view, in response to that question was that I think, even if it is hard for Congress, that that is what their job is. It might be a very useful exercise at the beginning, and it may make them do some of the other things that will really make them pay attention to the regulatory costs that are being imposed on the American people. You have to do this in Congress every day for the fiscal budget side, so you can have a situation maybe where there are things that can be done in a similar way for the regulatory side. It's not going to be easy, but that's exactly the point. My question that I have is for my colleague here. And that is having had, over the last 2 years, reviewed some of the regulations that have come out, I have a whole series of questions that I would love to have your answer on. For example, the Clean Air Act---- Mr. Terry. This is a great example of congressional responsibility right here. [Laughter.] Ms. Gramm. Well, I wold point out that under the Clean Air Act Amendments of 1990, in fact those amendments state that for tier two vehicle standards, EPA must consider whether or not new tier two standards are necessary, feasible, and cost- effective. This is in the Clean Air Act Amendment. So there is cost-effectiveness on this part of the Clean Air Act Amendments that were put in in 1990. And our analysis pointed out that EPA failed all three of those tests: That those standards in fact were not necessary, and in some areas they would make the air quality worse off--in certain midwest areas, for example. And they technologically were not feasible and certainly not cost-effective. In OSHA's ergonomic standards, for example, we have a situation where OSHA does not have a very good definition, a very explicit definition of what a musculoskeletal disorder is. And currently, you have many businesses that have been trying very hard to try and reduce those disorders. And yet we have a proposal that is going forward and I have a question about how did that get out of your scrutiny. You have the Army Corps of Engineers' nationwide wetlands permitting process which withdrew automatic permitting procedure and expedited permitting procedure for small parcels of property that had minimal environmental impact, and that expedited process was pulled a year ago, and with enormous impact; it would account for maybe, in the proposal stage, some 86 percent of the Army Corps of Engineers' workload. And so my question is, did you consider the effect of the regulation on the workload, the impact on property owners, the delay that would occur? FDA's recent required labeling for transfatty acids--and I won't go on and on, this is my last--transfatty acids. For example, FDA has not allowed truthful statements about transfatty acids, and yet in this proposal, FDA is suggesting a label that would be indeed incorrect, but in FDA's opinion, it would be OK because it would make people think that transfatty acids were like saturated fats and therefore we could free ride on that information that consumers think that saturated fats are bad, and so they were proposing something that was indeed incorrect. And so my question is, how does this comport with your testimony of trying to make regulations that indeed make sense, and follow the Presidents', including this President's Executive order. Mr. Terry. All right. To whom is that directed? [Laughter.] I'm just kidding. Mr. Spotila. Mr. Spotila. I was going to ask for a ruling of the Chair there, Mr. Chairman. Ms. Gramm. And you're allowed to ask a nasty question too. Mr. Spotila. Well, I guess I should start by saying the lord's work is never done. [Laughter.] Ms. Gramm. And I'm sympathetic. Mr. Terry. Response? Mr. Spotila. On the tier two rule, clearly an important rule, there was an examination of feasibility, technological feasibility, both as to engines and fuel. The determination was that there is technology out there to do it. There were some issues about cost, but the technology does exist. I met with both industries, and both of them acknowledge it exists. The necessity of it relies upon the need to achieve important reductions in nitrogen oxide emissions in areas that currently fail to meet the 1-hour ozone National Ambient Air Quality Standards. As far as being cost effective, this is something we spent a lot of time on. EPA estimated that the control cost was, as I recall, something less than $2,000 a ton in cities that are at or above the standard. There are some areas where we had issues, local issues, as to cost effectiveness. Ultimately, we did do a rigorous analysis and concluded that the benefits did justify the costs in that instance. On ergonomics, of course, we have a proposed rule and it's out for comment. We've gotten thousands of comments, and the process continues. These issues, including definitional issues, will be very important to be resolved before any final rule could be put out. We welcome the kinds of comments that we've gotten from yourself and others to help inform that decision. On the other two rules, the Corps of Engineer rule and the FDA rule, I have not been personally involved in either of them that I recall, and so I'd have to abstain in terms of that, but I certainly welcome comments and would welcome any kind of further discussion on it. Mr. Terry. Did you have 30 seconds that you'd like to make a comment in response to the answer, Ms. Gramm. Ms. Gramm. No, I'll just be happy to give him our public interest comment; I brought some of these along with me. Mr. Terry. Very good. Mr. Spotila, do you have a question for anyone? Mr. Spotila. I certainly would not want to pass up this opportunity. Mr. Raul was so kind to me when he called me his hero at the beginning of his remarks, that I'd like to ask him a question. Mr. Raul. No good deed goes unpunished. Mr. Spotila. But it's not a nasty question. You know, I'd like to make use of this. I know that you follow what's happening in the regulatory area. I'm interested in your thoughts looking forward, leaving aside the possibility of any legislative change, as to what rules in particular you think I should give most attention to. And in the context of this discussion, where perhaps could I have the most value in the course of performing my duties? Mr. Raul. You honor me by directing that question to me. I think that Dr. Gramm has just given you a nice list. Mr. Spotila. I knew that I would get her suggestions. I didn't have to ask her. Mr. Raul. And I follow the rules of course when invited to do so on behalf of clients, and more generally as a matter of my own legal and policy interests when important policy issues, regulatory policy issues are involved. I know that the ergonomics rule, in particular, is one which poses many issues, both in terms of its reasonableness and perhaps with regard to its authority as well, but it's one that's generated enormous comments. As a matter of interest, the organics rule, which has been up through OMB and at USDA, poses I think interesting issues as to the law required the Organic Foods Production Act required certain standards for organic foods, that the administration, not unreasonably, decided were quite onerous, and the rule came out of the organic community was not too pleased with the result. I think OMB had actually performed a useful service in the first instance, and now will need to bring the second rule into compliance with what perhaps the Congress and the organic community had expressed an interest in and what the intent was. That's not a criticism. I'm just saying these are interesting issues as to implementing the congressional intent, responding to the interest of the affected community, so certainly ergonomics is one that I would say is quite controversial and would warrant your attention. Mr. Terry. Does that conclude? Mr. Raul. That does indeed. Mr. Terry. Let me ask you, you're the last one to ask a question. We can recess for 20 minutes to half an hour, for you to come back, or you can sit there and say---- Mr. Raul. I can ask it very quickly. Mr. Terry. I only have 4 minutes. Mr. Raul. If I could, if that would be the end of the hearing, maybe I should do it. Mr. Terry. Yes. Mr. Raul. I don't want to gang up on Mr. Spotila, especially since his question to me was so kind. I would redirect it back to the committee and perhaps as a question to be directed really to EPA and the administration, and that is, if I'm correct that EPA views itself as precluded from considering cost-effectiveness in the Clean Air Act regulations and elsewhere, do they favor that, and would they be willing to support legislation recommended to Congress that would lift the 1980 interpretation by the D.C. Circuit that precludes consideration of cost effectiveness and join with industry and other members of the public who would like to see more reasonable, rational regulations, not to require that the most cost-effective rule be adopted, but only to permit cost effectiveness to be considered. That would resolve the American Trucking case. Mr. Terry. I think those are very good points. We'll put them in the record. Mr. Spotila, we will be sending you additional written questions, as usual, that we'd appreciate your written responses to. This subcommittee stands adjourned. [Whereupon, at 3:45 p.m., the subcommittee was adjourned.] [Additional information submitted for the hearing record follows:] [GRAPHIC] [TIFF OMITTED] T1984.117 [GRAPHIC] [TIFF OMITTED] T1984.118 [GRAPHIC] [TIFF OMITTED] T1984.119 [GRAPHIC] [TIFF OMITTED] T1984.120 [GRAPHIC] [TIFF OMITTED] T1984.121 [GRAPHIC] [TIFF OMITTED] T1984.122 [GRAPHIC] [TIFF OMITTED] T1984.123 [GRAPHIC] [TIFF OMITTED] T1984.124 [GRAPHIC] [TIFF OMITTED] T1984.125 [GRAPHIC] [TIFF OMITTED] T1984.126 [GRAPHIC] [TIFF OMITTED] T1984.127 [GRAPHIC] [TIFF OMITTED] T1984.128 [GRAPHIC] [TIFF OMITTED] T1984.129 [GRAPHIC] [TIFF OMITTED] T1984.130 [GRAPHIC] [TIFF OMITTED] T1984.131 [GRAPHIC] [TIFF OMITTED] T1984.132 [GRAPHIC] [TIFF OMITTED] T1984.133 [GRAPHIC] [TIFF OMITTED] T1984.134 [GRAPHIC] [TIFF OMITTED] T1984.135 [GRAPHIC] [TIFF OMITTED] T1984.136 [GRAPHIC] [TIFF OMITTED] T1984.137 [GRAPHIC] [TIFF OMITTED] T1984.138 [GRAPHIC] [TIFF OMITTED] T1984.139 [GRAPHIC] [TIFF OMITTED] T1984.140 [GRAPHIC] [TIFF OMITTED] T1984.141 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OMITTED] T1984.170 [GRAPHIC] [TIFF OMITTED] T1984.171 [GRAPHIC] [TIFF OMITTED] T1984.172 [GRAPHIC] [TIFF OMITTED] T1984.173 [GRAPHIC] [TIFF OMITTED] T1984.174 [GRAPHIC] [TIFF OMITTED] T1984.175 [GRAPHIC] [TIFF OMITTED] T1984.176 [GRAPHIC] [TIFF OMITTED] T1984.177 [GRAPHIC] [TIFF OMITTED] T1984.178 [GRAPHIC] [TIFF OMITTED] T1984.179 [GRAPHIC] [TIFF OMITTED] T1984.180 [GRAPHIC] [TIFF OMITTED] T1984.181 [GRAPHIC] [TIFF OMITTED] T1984.182 [GRAPHIC] [TIFF OMITTED] T1984.183 [GRAPHIC] [TIFF OMITTED] T1984.184 [GRAPHIC] [TIFF OMITTED] T1984.185 [GRAPHIC] [TIFF OMITTED] T1984.186 [GRAPHIC] [TIFF OMITTED] T1984.187 [GRAPHIC] [TIFF OMITTED] T1984.188 [GRAPHIC] [TIFF OMITTED] T1984.189 [GRAPHIC] [TIFF OMITTED] T1984.190 [GRAPHIC] [TIFF OMITTED] T1984.191 [GRAPHIC] [TIFF OMITTED] T1984.192 [GRAPHIC] [TIFF OMITTED] T1984.193 [GRAPHIC] [TIFF OMITTED] T1984.194 [GRAPHIC] [TIFF OMITTED] T1984.195 [GRAPHIC] [TIFF OMITTED] T1984.196 [GRAPHIC] [TIFF OMITTED] T1984.197 [GRAPHIC] [TIFF OMITTED] T1984.198 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OMITTED] T1984.284 [GRAPHIC] [TIFF OMITTED] T1984.285 [GRAPHIC] [TIFF OMITTED] T1984.286 [GRAPHIC] [TIFF OMITTED] T1984.287 [GRAPHIC] [TIFF OMITTED] T1984.288 [GRAPHIC] [TIFF OMITTED] T1984.289 [GRAPHIC] [TIFF OMITTED] T1984.290 [GRAPHIC] [TIFF OMITTED] T1984.291 [GRAPHIC] [TIFF OMITTED] T1984.292 [GRAPHIC] [TIFF OMITTED] T1984.293 [GRAPHIC] [TIFF OMITTED] T1984.294 [GRAPHIC] [TIFF OMITTED] T1984.295 [GRAPHIC] [TIFF OMITTED] T1984.296 [GRAPHIC] [TIFF OMITTED] T1984.297 [GRAPHIC] [TIFF OMITTED] T1984.298 [GRAPHIC] [TIFF OMITTED] T1984.299 [GRAPHIC] [TIFF OMITTED] T1984.300 [GRAPHIC] [TIFF OMITTED] T1984.301 [GRAPHIC] [TIFF OMITTED] T1984.302 [GRAPHIC] [TIFF OMITTED] T1984.303 [GRAPHIC] [TIFF OMITTED] T1984.304 [GRAPHIC] [TIFF OMITTED] T1984.305 [GRAPHIC] [TIFF OMITTED] T1984.306 [GRAPHIC] [TIFF OMITTED] T1984.307 [GRAPHIC] [TIFF OMITTED] T1984.308 [GRAPHIC] [TIFF OMITTED] T1984.309 [GRAPHIC] [TIFF OMITTED] T1984.310 [GRAPHIC] [TIFF OMITTED] T1984.311 [GRAPHIC] [TIFF OMITTED] T1984.312 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OMITTED] T1984.341 [GRAPHIC] [TIFF OMITTED] T1984.342 [GRAPHIC] [TIFF OMITTED] T1984.343 [GRAPHIC] [TIFF OMITTED] T1984.344 [GRAPHIC] [TIFF OMITTED] T1984.345 [GRAPHIC] [TIFF OMITTED] T1984.346 [GRAPHIC] [TIFF OMITTED] T1984.347 [GRAPHIC] [TIFF OMITTED] T1984.348 [GRAPHIC] [TIFF OMITTED] T1984.349 [GRAPHIC] [TIFF OMITTED] T1984.350 [GRAPHIC] [TIFF OMITTED] T1984.351 [GRAPHIC] [TIFF OMITTED] T1984.352 [GRAPHIC] [TIFF OMITTED] T1984.353 [GRAPHIC] [TIFF OMITTED] T1984.354 [GRAPHIC] [TIFF OMITTED] T1984.355 [GRAPHIC] [TIFF OMITTED] T1984.356 [GRAPHIC] [TIFF OMITTED] T1984.357 [GRAPHIC] [TIFF OMITTED] T1984.358 [GRAPHIC] [TIFF OMITTED] T1984.359 [GRAPHIC] [TIFF OMITTED] T1984.360 [GRAPHIC] [TIFF OMITTED] T1984.361 [GRAPHIC] [TIFF OMITTED] T1984.362 [GRAPHIC] [TIFF OMITTED] T1984.363 [GRAPHIC] [TIFF OMITTED] T1984.365 [GRAPHIC] [TIFF OMITTED] T1984.366 [GRAPHIC] [TIFF OMITTED] T1984.367 [GRAPHIC] [TIFF OMITTED] T1984.368 [GRAPHIC] [TIFF OMITTED] T1984.369 [GRAPHIC] [TIFF OMITTED] T1984.370 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