SPEAKERS CONTENTS INSERTS
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30–838 PDF
2006
ADMINISTRATIVE LAW, PROCESS AND PROCEDURE PROJECT FOR THE 21ST CENTURY
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
NOVEMBER 14, 2006
Serial No. 109–152
Printed for the use of the Committee on the Judiciary
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Available via the World Wide Web: http://judiciary.house.gov
COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
ELTON GALLEGLY, California
BOB GOODLATTE, Virginia
STEVE CHABOT, Ohio
DANIEL E. LUNGREN, California
WILLIAM L. JENKINS, Tennessee
CHRIS CANNON, Utah
SPENCER BACHUS, Alabama
BOB INGLIS, South Carolina
JOHN N. HOSTETTLER, Indiana
MARK GREEN, Wisconsin
RIC KELLER, Florida
DARRELL ISSA, California
JEFF FLAKE, Arizona
MIKE PENCE, Indiana
J. RANDY FORBES, Virginia
STEVE KING, Iowa
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TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
JOHN CONYERS, Jr., Michigan
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SÁNCHEZ, California
CHRIS VAN HOLLEN, Maryland
DEBBIE WASSERMAN SCHULTZ, Florida
PHILIP G. KIKO, Chief of Staff-General Counsel
PERRY H. APELBAUM, Minority Chief Counsel
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Subcommittee on Commercial and Administrative Law
CHRIS CANNON, Utah Chairman
HOWARD COBLE, North Carolina
TRENT FRANKS, Arizona
STEVE CHABOT, Ohio
MARK GREEN, Wisconsin
J. RANDY FORBES, Virginia
LOUIE GOHMERT, Texas
MELVIN L. WATT, North Carolina
WILLIAM D. DELAHUNT, Massachusetts
CHRIS VAN HOLLEN, Maryland
JERROLD NADLER, New York
DEBBIE WASSERMAN SCHULTZ, Florida
RAYMOND V. SMIETANKA, Chief Counsel
SUSAN A. JENSEN, Counsel
BRENDA HANKINS, Counsel
MIKE LENN, Full Committee Counsel
STEPHANIE MOORE, Minority Counsel
C O N T E N T S
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NOVEMBER 14, 2006
OPENING STATEMENT
The Honorable Chris Cannon, a Representative in Congress from the State of Utah, and Chairman, Subcommittee on Commercial and Administrative Law
The Honorable Melvin L. Watt, a Representative in Congress from the State of North Carolina, and Ranking Member, Subcommittee on Commercial and Administrative Law
WITNESSES
Morton Rosenberg, Esq., Specialist in American Public Law, Congressional Research Service, Washington, DC
Oral Testimony
Prepared Statement
Curtis Copeland, Ph.D., Specialist in American National Government, Congressional Research Service, Washington, DC
Oral Testimony
Prepared Statement
T.J. Halstead, Esq., Legislative Attorney, American Law Division, Congressional Research Service, Washington, DC
Oral Testimony
Prepared Statement
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LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Prepared Statement of the Honorable Chris Cannon, a Representative in Congress from the State of Utah, and Chairman, Subcommittee on Commercial and Administrative Law
APPENDIX
Material Submitted for the Hearing Record
Letter from the American Bar Association, submitted by the Honorable Chris Cannon, a Representative in Congress from the State of Utah, and Chairman, Subcommittee on Commercial and Administrative Law
Memorandum from Morton Rosenberg, Specialist in American Public Law and T.J. Halstead, Legislative Attorney, American Law Division, Congressional Research Service, to the Subcommittee on Commercial and Administrative Law
ADMINISTRATIVE LAW, PROCESS AND PROCEDURE PROJECT FOR THE 21ST CENTURY
TUESDAY, NOVEMBER 14, 2006
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
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Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 3:27 p.m., in Room 2141, Rayburn House Office Building, the Honorable Chris Cannon (Chairman of the Subcommittee) presiding.
Mr. CANNON. I would like to apologize to the witnesses for the late start. The votes, and people chatting in the halls, make the gauntlet from the Capitol here virtually impassable. So I apologize to you, and I appreciate your patience and look forward to your testimony.
Today's hearing is a fitting way to bring to a close the 109th Congress. The Committee on the Judiciary, as one of its very first items of business for this Congress, authorized the Subcommittee on Commercial and Administrative Law to undertake a comprehensive study of administrative law, process and procedure on January 26, 2005, as part of the Committee's oversight plan for the 109th Congress.
This hearing represents the culmination of that 2-year study known as the Administrative Law, Process and Procedure Project for the 21st Century. Over the course of this project, the Subcommittee conducted six hearings, participated in three symposia, and sponsored several empirical studies.
Topics examined as part of this project included the adjudicatory process of agencies; the role of public participation in rulemaking; the process by which agency rulemaking is reviewed by the Congress, the President, and the Judiciary; and the role of science in the regulatory process.
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From its very inception, this project has been a thoroughly bipartisan and nonpartisan undertaking. To that end, I want to thank the Subcommittee Ranking Member, Mr. Watt for his active and unwavering support throughout this undertaking, and point out that I look forward to working with him in whichever chairmanship he assumes in the next Congress.
It is also important to remember that this project was inspired and initiated by the House Judiciary Chairman, Jim Sensenbrenner. The project is a testament to the Chairman's deep and long-standing commitment to improving the law and procedure in general, and, in particular, to improving the administrative and rulemaking process. Accordingly, we thank the Chairman for his insight and leadership in allowing the Subcommittee to spearhead this endeavor.
It is also appropriate at this time to extend our sincere thanks to the Congressional Research Service and its director, Dan Mulhollan, for devoting so many critical resources—physical, financial, and human—to this project.
The three witnesses who appear today on behalf of CRS, namely, Mort Rosenberg, Curtis Copeland and T.J. Halstead, deserve much of the credit for playing such a major role in guiding the project and ensuring its success.
It is my sincere hope that the findings and recommendations of the project's report, which will be issued later this month, will not just sit on the proverbial shelf to gather dust. Rather, it should become a valuable legacy for the next Congress.
Let me cite just one example. One of the most important legacies of the project is that it underscored the absolute and urgent need to have a permanent, neutral, nonpartisan think tank that can dispassionately examine administrative law and process and that can make credible recommendations for reform. Clearly, I am referring to the need to reactivate the Administrative Conference of the United States. Although reauthorized in the 108th Congress with overwhelming bipartisan support, the Conference remains to be funded.
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The extremely nominal investment to fund ACUS would redound in billions of savings in taxpayer dollars. Accordingly, I encourage our Subcommittee Members on both sides of the aisle to continue to pursue this very worthy cause in the waning days of this Congress, and, if that fails, in the next Congress.
[The prepared statement of Mr. Cannon follows:]
PREPARED STATEMENT OF THE HONORABLE CHRIS CANNON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH, AND CHAIRMAN, SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW
Today's hearing is a fitting way to bring to a close the 109th Congress. The Committee on the Judiciary—as one of its very first items of business for this Congress—authorized the Subcommittee on Commercial and Administrative Law to undertake a comprehensive study of administrative law, process and procedure on January 26, 2005 as part of the Committee's Oversight Plan for the 109th Congress.
This hearing represents the culmination of that two-year study, known as the Administrative Law, Process and Procedure Project for the 21st Century. Over the course of this Project, the Subcommittee conducted six hearings, participated in three symposia, and sponsored several empirical studies.
Topics examined as part of this Project included the adjudicatory process of agencies; the role of public participation in rulemaking; the process by which agency rulemaking is reviewed by the Congress, the President, and the judiciary; and the role of science in the regulatory process.
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From its very inception, this Project has been a thoroughly bipartisan and nonpartisan undertaking. To that end, I thank the Subcommittee Ranking Member, Mr. Watt, for his active and unwavering support throughout this undertaking.
It is also important to remember that this Project was inspired and initiated by House Judiciary Chairman Jim Sensenbrenner. The Project is a testament to the Chairman's deep and longstanding commitment to improving the law and procedure in general, and, in particular, to improving the administrative and rulemaking process. Accordingly, we thank the Chairman for his insight and leadership in allowing the Subcommittee to spearhead this endeavor.
It is also appropriate at this time to extend our sincere thanks to the Congressional Research Service and its Director, Dan Mulhollan, for devoting so many critical resources—physical, financial, and human—to this Project. The three witnesses who appear today on behalf of CRS, namely, Mort Rosenberg, Curtis Copeland, and T.J. Halstead deserve much of the credit for playing such a major role in guiding the Project and ensuring its success.
It is my sincere hope that the findings and recommendations of the Project's report, which will be issued later this month, will not just sit on the proverbial shelf to gather dust. Rather, it should become a valuable legacy for the next Congress.
Let me cite just one example. One of the most important legacies of the Project is that it underscored the absolute and urgent need to have a permanent, neutral, nonpartisan think-tank that can dispassionately examine administrative law and process and that can make credible recommendations for reform.
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Clearly, I am referring to the need to reactivate the Administrative Conference of the United States. Although reauthorized in the 108th Congress with overwhelming bipartisan support, the Conference remains to be funded.
The extremely nominal investment to fund ACUS would redound in billions of savings in taxpayer dollars. Accordingly, I encourage our Subcommittee Members—on both sides of the aisle—to continue to pursue this very worthy cause in the waning days of this Congress and, if that fails, in the next Congress.
Mr. CANNON. I now turn to my colleague Mr. Watt, the distinguished Ranking Member—soon to be more distinguished—of the Subcommittee, and ask him if he has any opening remarks.
Mr. WATT. Thank you, Mr. Chairman. I assure you that being a Chair or a Ranking Member is not, by definition, more distinguishing or less distinguishing.
Mr. CANNON. I agree with the gentleman. I hope that I don't lose much stature in the process. It would be hard for you to gain more stature because you're a person of great accomplishments and distinction already.
Mr. WATT. It does feel good.
Mr. CANNON. Now let's not rub it in, okay?
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Mr. WATT. I will just, if it is all right, Mr. Chairman, ask unanimous consent to revise and extend my remarks and submit a statement for the record, and will make a very brief comment about this hearing because I think it is important for us to do the follow-up. And hopefully whoever is in charge of this Subcommittee and Committee next term of Congress will not allow this to go unnoticed, and the package of recommendations will be implemented.
We are in thorough need of reform in Government agencies and the administrative procedures since we haven't had a major reform in over a decade, when we had the National Performance Review and the second Clinton/Gore term began to focus on some of these issues, so I think this is important. The Chair has put it at the top of his agenda, and I hope some Chair will put it at the top of their agenda in the next term of Congress if nothing is done this year.
That having been said, Mr. Chairman, I would ordinarily yield back, but if this is to be the last meeting of our Subcommittee in this term of Congress, I think I would be remiss not to express my gratitude to you and my high admiration for the manner in which you have conducted this Subcommittee and consulted with me as the Ranking Member. It's the kind of consultation that I think is important, and that the American people are saying they desire to have Republicans and Democrats have. And from my part, you can be assured wherever I am, as a Chair, it will be my intention to exercise the same kind of consultation as we go forward, either on this Subcommittee or on whatever Subcommittee I'm on, on Judiciary or Financial Services, which I may also be eligible for a Subcommittee on.
So you've set a good model for us and set a high standard for bipartisanship and consultation and respect and friendship, and I just publicly want to express my thanks to you for that.
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And with that, I'll yield back the balance of my time.
Mr. CANNON. I want to thank the gentleman for those kind remarks. I can't imagine any kinder thing being said about me, except possibly that I'm a good father, but you don't know my family, so that's beyond your purview. But thank you very much for those kind comments.
And I would just point out that America has evolved, it's grown in the last 10 or 12 or 15 years, and I think the next Congress is going to be an opportunity to focus on what America needs and not in a partisan fashion. There are many, many issues that are truly nonpartisan that are important, and I look forward to working with the gentleman on many of those issues.
Without objection, the gentleman's entire statement will be placed in the record. Hearing no objection, so ordered.
[The information referred to was not available.]
Mr. CANNON. I ask unanimous consent to include a letter from the American Bar Association in the prehearing record. Hearing no objection, so ordered.
[The information referred to can be found in the Appendix.]
Mr. CANNON. Without objection, all Members may place their opening statements in the record at this point. Hearing no objection, so ordered.
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Without objection, the Chair will be authorized to declare recesses of the hearing at any point. Hearing no objection, so ordered.
I ask unanimous consent that the Members have 5 legislative days to submit written statements from the conclusion of today's hearing record. Hearing no objection, so ordered.
I am now pleased to introduce today's witnesses for today's hearing.
Our first witness is Mort Rosenberg, a specialist in American public law in the American Law Division at the CRS. In all matters dealing with administrative law, Mort has been the Judiciary Committee's right hand. For more than 25 years he's been associated with CRS. Prior to his service at that office, he was chief counsel at the House Select Committee on Professional Sports, among other public service positions he's held. In addition to these endeavors, Mort has written extensively on the subject of administrative law. He obtained his undergraduate degree from New York University and his law degree from Harvard Law School, and he has been a remarkable help us to through this process, and I want to thank you for that, Mr. Rosenberg.
Our second witness is Dr. Curtis Copeland, a specialist in American Government at CRS. Dr. Copeland's expertise, appropriately relevant to today's hearing, is Federal rulemaking and regulatory policy. In addition to this area of expertise, Dr. Copeland also heads the Government and Finance Divisions, Executive and Judiciary Section at CRS, which covers issues ranging from Federal financial management to the appointment of Supreme Court Justices. Prior to joining CRS, he held a variety of positions at the Government Accountability Office over a 23-year period. Dr. Copeland received his Ph.D. From the University of North Texas.
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Our final witness is T.J. Halstead, a legislative attorney in the American Law Division of CRS, and in this capacity is one of CRS's primary analysts on administrative law and separation of powers issues. Before joining CRS in 1998, Mr. Halstead received both his undergraduate and law degrees from the University of Kansas.
We understand and appreciate that as CRS staff, your testimony will be confined to technical, professional and nonadvocative aspects of the hearing subject matter pursuant to congressional guidelines on objectivity and nonpartisanship.
I extend to each of you my warm regards and appreciation for your willingness to participate in today's hearing.
In light of the fact that your written statements will be included in the hearing record, I request that you limit your oral remarks to 5 minutes. Accordingly, please feel free to summarize or highlight the salient points of your testimony.
You will note that we have a lighting system that starts with a green light. After 4 minutes it turns to a yellow light, and then at 5 minutes it turns to a red light. It is my habit to tap the gavel or a pencil at 5 minutes. We would appreciate it if you would finish up your thoughts within that time frame. We don't want to cut people off, and certainly not in the middle of your thinking, so it's not a hard red light or a hard termination.
After you've presented your remarks, the Subcommittee Members, in the order they arrive, will be permitted to ask questions of the witnesses subject to the 5-minute limit. I suspect that won't be a real long event.
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Let me just say we welcome Mr. Chabot, who has joined us here on this end.
I would ask the witnesses to rise and raise your hand to take the oath.
[Witnesses sworn.]
Mr. CANNON. The record should reflect that all the witnesses answered in the affirmative.
Mr. Rosenberg, would you now proceed with your testimony.
TESTIMONY OF MORTON ROSENBERG, ESQ., SPECIALIST IN AMERICAN PUBLIC LAW, CONGRESSIONAL RESEARCH SERVICE, WASHINGTON, DC
Mr. ROSENBERG. Thank you, Mr. Chairman. Thank you, Mr. Watt. I just want to reiterate that I am honored not only to appear before you again, but also for giving me the opportunity to do the kind of work we've been doing for the last 2 years. It's been an education for me, and it's been a fruitful endeavor to put together, you know, symposia, be at these hearings, and to generally support the work of this Committee in identifying emerging issues.
Today, my CRS colleagues Curtis Copeland and T.J. Halstead and I will try to brief you on the status of the Process and Procedure Project and what might be done in the future. My testimony will focus on the potential significance of the reactivation of ACUS, and one of the seven elements of the project, the Congressional Review Act. Curtis and T.J. Will discuss the other six elements of the study.
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With respect to ACUS, I've always thought that in this part of the project there was, you know—of course it's important for it to be the reactivation that occurred in 2000—the reauthorization that occurred in 2004 was important, and that the funding and ultimate reactivation of ACUS was not important at that moment. But at some particular point—and our experience with our studies underlines the fact that there is a need for an organization like ACUS, which provided nonpartisan, nonbiased, comprehensive, practical and cost-effective assessments and guidance on a wide range of agency processes, procedures and practices, a history that has been well documented before this Committee.
What struck me as important was one of the study projects that we commissioned, the one which Professor West conducted with regard to participation in the—public participation in the prenotice and comment period. His excellent study was, you know, hindered a great deal by the fact that, as his testimony before this Committee revealed, that his entree to the Committee, to the agencies that he was attempting to get information and to do his assessments was met with recalcitrance and suspicion. Generally, the best information that he got was through informal interviews that were in, you know, deep, you know, background from knowledgeable officials of these agencies.
That was not true during the heyday of the Administrative Conference. Its reputation of credibility, of nonpartisanship, and expertise opened doors when an ACUS-sponsored researcher came to the door because there was a certain amount of self-interest involved. The reputation of ACUS as an entity that would provide expert guidance redounded, and the kinds of studies and suggestions for the agencies to—you know, to change their practices or to undertake new ways of decisionmaking redounded to their benefit so that there was a self-interest involved in having an ACUS study that could help that agency. So that reactivation, you know, that could be looked to as an extraordinarily important aspect to it.
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I also enjoyed very much the empirical—the symposia that we conducted, as well as the—one of the more symposia—at least, and most interesting was the science and rulemaking symposium, from which, after questioning some of the members of the panel on advisory bodies, we discovered that nobody knew how many science advisory bodies were out there. Nobody knew what the selection process was—these were among experts in this field—and as a result of that revelation in itself—and the panels at that science symposia were quite excellent—we commissioned a study to develop a taxonomy of science advisory committees in the Federal Government, a study that will be completed sometime next June, and we'll present it to this Committee, which will tell us, you know, how many there are, how they're selected, how they're vetted, how they deal with conflicts of interest and various important information about these advisory committees that will allow Congress to decide whether any kinds of legislative actions needs more regulating.
The symposium we held on September 11 on Presidential, Congressional and Judicial Control of Rulemaking was also one that I would recommend to scholars, Congresspeople, everybody to read the transcript. One of the themes and one of the things that came across very well was the constitutional dimension of the study, or parts of the study, that you are engaged in. And I will talk about that, you know, in a few moments.
I chaired the panel on the Congressional Review Act, and of course I've spoken about the Congressional Review Act with you at one of your hearings. The panel was interesting, revealing, and I'd like to say a few words about the Congressional Review Act and where we could go from here.
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Congress' stated objective of setting in place an effective mechanism to keep it informed about the rulemaking activities of Federal agencies which would allow for expeditious congressional review and possible nullification of particular rules may not have been met. That was the clear result of the testimony there and the discussion. Statistically, to date, over 43,000 rules have been reported to Congress, including over 630 major rules, and only one, the Department of Labor's ergonomics standard, was disapproved in 2001. Many analysts believe that the negation of the ergonomics rule was a singular event, not likely to be repeated.
Witnesses at your hearing pointed to structural defects in the mechanism, most commonly the lack of a screening mechanism to identify rules that warranted review by jurisdictional Committees, and then expedited consideration process in the House—the lack of an expedited consideration process in the House that complemented the Senate's procedures, as well as numerous interpretive difficulties of key statutory provisions that seemed to deter use of the mechanism.
One witness at the hearing, Todd Gaziano of the Heritage Foundation, while agreeing with the structural critique, suggested that the law's presence and the threat of a filing of a joint resolution of disapproval had had a degree of influence that could not be ignored. He agreed, however, that the framers of the legislation anticipated that the mechanism would provide an incentive for legislators to insist on institutional accountability as a response to criticisms of Congress that it had been delegating vast amounts of lawmaking authority to executive agencies without maintaining countervailing checks on the exercise of that authority.
There was also recognition among the witnesses that the establishment of a joint Committee that would screen rules, recommend action to jurisdictional Committees in both Houses could provide the coordination and information that were necessary to inform the bodies sufficiently and in a timely manner and nature of such to take appropriate legislative actions.
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The balanced nature of such a joint Committee and its lack of substantive authority appeared to provide a way to allay political concerns over turf intrusions. The House Parliamentarian, John B. Sullivan, agreed that such a joint Committee was a viable construct.
A further question raised at the March hearing, and again at the panel discussion of the Congressional Review Act in the September 11th symposium, was whether it was necessary to have all the rules reported and reviewed. It was suggested that only major rules need be reported, which would save legislative time, and also money; and that the many rules, the thousands that have come before Congress, simply aren't of a stature that needs to be addressed by a jurisdictional Committee.
There was no consensus, however, among the panelists as to who or how a major rule would be defined. There was an agreement among the panelists that the nonsubstantive advisory joint Committee would be a politically viable screening mechanism, but not the same unanimity with respect to an expedited House consideration procedure. Former House Parliamentarian, Charles Johnson, explained that it was likely that the lack of a parallel House expedited procedure in the CRA was purposeful. He explained that the House leadership believes that the House is a majoritarian institution, and that expedited procedures undermines majority rule.
One panelist, Professor Jack Beermann, expressed a view that making it easier for Congress to overturn an agency rule may come at a very high political cost. He asks the question, ''does Congress really want to be in the position where it is perceived that everything an agency does is their responsibility, since they've taken it on and reviewed it under this mechanism? Do they want to have that perception?'' He concluded, ''I think that this may just increase the blaming opportunities for Congress.''
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Professor Beermann also stated the belief that—similar to that expressed by Todd Gaziano, that the current CRA has the effect of forcing the executive to negotiate, which is a satisfactory result, in his view. I don't think there is a lot of empirical evidence to support those comments, but it is a view that's prevalent out there.
Proponents of the CRA concept, however, argue that it reflects a congressional recognition of the need to enhance its own political accountability, and thereby strengthening the perception of legitimacy and competence of the administrative rulemaking process.
It is also said to rest on an understanding that broad delegations of rulemaking authority to agencies are necessary and appropriate, and will continue for the indefinite future. The Supreme Court's most recent rejection in 2001 in the Whitman case of an impending revival of the so-called nondelegation doctrine is impetus for Congress to consider several facets and ambiguities of the current mechanism.
Absent congressional review, it is argued, current instances of avoidance in notice and comment, rulemaking, lack of full reporting of covered rules to be submitted under the CRA, and increasing Presidential control over the rulemaking process will likely continue. Professor Paul Verkuil, who was on the CRA panel, was a particularly strong voice for this view at the symposium.
Let me conclude by observing that much of the Administrative Law Project has an important constitutional dimension, raising the crucial question of where ultimate control of agency decisionmaking authority lies in our constitutional scheme of separated, but balanced powers. The tension and conflicts of this scheme were well brought forth and voiced in CRS's symposium on Presidential, Congressional and Judicial Control of Rulemaking.
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There can be little doubt as to Congress' authority to make the determinative decisions with respect to the wisdom of any particular agency rulemaking, and to prescribe the manner in which congressional review will be conducted. Whether or not to do so is a political decision, a hard one with many practical consequences.
I thank you, and I'll welcome questions.
Mr. CANNON. Thank you, Mr. Rosenberg.
[The prepared statement of Mr. Rosenberg follows:]
PREPARED STATEMENT OF MORTON ROSENBERG
[Note: Image(s) not available in this format. See PDF version of this file for complete hearing record.]
Mr. CANNON. The Chair would like to recognize Mr. Coble, the gentleman from North Carolina, who has joined us, and also the gentleman from Massachusetts Mr. Delahunt.
In deference to your experience, we went beyond the 5-minute rule. When we made that decision, we had only a couple of us here, but if I could remind the other two questions—we will probably have time for questioning, but I would like to have the panel to have the opportunity to question, so I will probably tap at 5 minutes.
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Thank you, Mr. Rosenberg.
And Dr. Copeland, you are now recognized.
TESTIMONY OF CURTIS COPELAND, PH.D., SPECIALIST IN AMERICAN NATIONAL GOVERNMENT, CONGRESSIONAL RESEARCH SERVICE, WASHINGTON, DC
Mr. COPELAND. Thank you very much.
Mr. Chairman, Members of the Subcommittee, thank you for inviting me here today to discuss the Administrative Law Project. My testimony will focus on three elements of that project, the Presidential review of rulemaking, the utility of regulatory analysis requirements and the role of science in the regulatory process.
During the past 25 years, the epicenter of Presidential review has been a small office within OMB, the Office of Information and Regulatory Affairs, or OIRA. OIRA's role in reviewing agency rules has changed with the changes in the Presidency. The current Bush administration has reasserted OIRA's gatekeeper role that was prominent during the Reagan administration.
Although OIRA's reviews have become somewhat more transparent in recent years, it is still far from a transparent process. For example, OIRA has said that it has its greatest impact before rules are formally submitted to it for review, but has instructed agencies not to disclose those changes to the public.
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OIRA also remains highly controversial. Some public interests groups assert that OIRA review has been a one-way rachet that only weakens and delays rules, while business groups contend that OIRA has not been assertive enough in reining in agencies.
A number of very interesting studies have recently examined the impact that OIRA has on rulemaking, but many issues remain that either Congress or ACUS may want to address. Those issues include whether Congress should codify Presidential review, whether independent regulatory agencies' rules should be subject to review, and what rules should govern OIRA's contacts with outside parties during the review process.
OIRA also has been a key player in implementing regulatory analysis requirements established by Congress and the President. Many of those requirements were developed in the 1980's and '90's in an effort to ensure that the benefits of regulation were worth the compliance cost. For example, before publishing any proposed or final rule, the Regulatory Flexibility Act of 1980 requires agencies to prepare an analysis describing the rule's effects on small businesses and what efforts the agency took to avoid those effects.
The Unfunded Mandates Reform Act of 1995 has similar requirements to protect the interests of State and local governments. Executive Order 12866 requires covered agencies to prepare a cost/benefit analysis for any rule having a $100 million impact on the economy. However, numerous studies indicate that these requirements have often been less effective than their advocates have hoped. For example, agencies can avoid a reg flex analysis if they certify that the rule in question does not have a ''significant economic impact'' on a ''substantial number of small entities.'' And agencies have certified rules, even when they cost businesses thousands of dollars each year in compliance costs.
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In other cases, new requirements have been linked to old ones that have been viewed as ineffective. For example, the requirements that agencies develop compliance guides to help businesses and others comply with the regulations and that agencies reexamine their rules every 10 years are not triggered if the agency certifies those rules don't have a significant impact on small entities.
After more than 25 years of experience with these analytic requirements, we know surprisingly little about their effectiveness or how they can be improved. Issues that Congress or ACUS could explore include the extent to which the requirements contribute to what is called the ''ossification'' of the rulemaking process; the accuracy of agency's prerule estimates of cost and benefits; and whether the myriad of requirements should be made consistent and codified in one place.
The role of science in rulemaking has become highly controversial in recent years, with observers from both the left and the right suggesting that ''sound science'' has been given insufficient weight in the development of regulatory standards. The May 2006 symposium that Mort mentioned on this topic featured panelists discussing such issues as the role of science advisory panels, science and judicial review, and Government agencies' capabilities. A panel that I moderated focused on OIRA's recent science-related initiatives, including recent bulletins on peer review and risk assessment.
While OIRA's peer review bulletin was initially very controversial, with some science groups and others asserting that it could make peer review vulnerable to political manipulation or controlled by regulated entities. As a result of those concerns, OIRA later published a substantially revised version of the bulletin that gave agencies more discretion, while reserving some for itself.
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OIRA's January 2006 proposed bulletin on risk assessment is currently undergoing peer review by the National Academy of Sciences. In May 2006, nine Federal agencies testified at a public meeting on that bulletin. Some agencies said that the scope of this risk assessment bulletin is so broad that doctors and the public may not receive timely warnings about potential health risks posed by medical devices and drugs like Vioxx. Other agencies were more supportive of the risk bulletin, but still proposed certain changes.
Possible areas for further research in this area include whether the Information Quality Act should be amended to provide for judicial review, how advisory panels can be constructed to ensure that they're unbiased, and whether governmentwide standards for peer review and risk assessment are needed and working as intended. Objective and rigorous examinations of all of these administrative law issues by Congress or ACUS could prove to be a wise investment in the long term.
Mr. Chairman, that concludes my prepared statement. I'd be happy to answer any questions.
Mr. CANNON. Thank you, Dr. Copeland.
[The prepared statement of Mr. Copeland follows:]
PREPARED STATEMENT OF CURTIS W. COPELAND
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Mr. CANNON. Mr. Halstead.
TESTIMONY OF T.J. HALSTEAD, ESQ., LEGISLATIVE ATTORNEY, AMERICAN LAW DIVISION, CONGRESSIONAL RESEARCH SERVICE, WASHINGTON, DC
Mr. HALSTEAD. Mr. Chairman, Members of the Subcommittee, I am pleased to be here today to discuss the Subcommittee's Administrative Law Process and Procedure Project.
I've been particularly involved in the consideration of four issues that have arisen in the various symposia, hearings and studies conducted under the project's banner, namely, public participation in the rulemaking process, agency adjudication, judicial review of agency rulemaking, and the utility of a reconstituted ACUS in light of the regulatory clearance and review functions of the Office of Management and Budget. I have addressed those issues in detail in my prepared statement, and I would like to focus today on efforts that have been made to study court participation and judicial review over the course of the project. I think they illustrate both the time and effort that has gone into the project, as well as factors that could be viewed as supporting the continuing need for an entity such as ACUS.
The staff of your Subcommittee has spent a great deal of time focusing on public participation issues ranging from the impact of non-rule rules on public participation, to whether e-rulemaking initiatives have, in fact, facilitated an increase in public participation.
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Professor Cary Coglianese convened a congressional symposium for the Committee on the e-rulemaking issue last December, and I think that type of collaborative effort has been essential to furthering our understanding of these issues. One interesting aspect of that symposium was the general consensus that e-rulemaking initiatives have not, in fact, generated the significant increase in participation that was largely expected in light of the strides that have been made in electronic technology and accessibility. The participants of that symposium recommended further studies on the issue, and, in particular, recommended expanding and institutionalizing opportunities for collaboration, which is a role that ACUS has served in the past and could arguably fulfill again.
Another significant study that Mort mentioned in his testimony has been conducted by Professor William West at Texas A&M, focusing on how agencies develop proposed rules, with a particular emphasis on public participation and transparency in the prenotice and comment phase of rule formulation. The study relied in large part on an electronic questionnaire sent to agency staff involved in the development of a large sample of individual rules and on interviews with high-level agency personnel with extensive experience in the rulemaking process. One of the hopes of that study was that the questionnaire would generate data that would enable a systematic comparison of variations in agency practice during this phase of rulemaking, but, as Mort mentioned, a low response rate to the survey prevented that from happening.
The interview and survey data did enable Professor West and his team to make some very interesting and important observations relating to the outside participation of individuals in the development of rules, but I think the low response rate to that survey, again, could be taken to support the position that there is an important role for ACUS. Professor West himself has related his view that the survey was hobbled by a general reluctance on the part of agencies to share information, with apparently two agencies explicitly ordering their staff not to respond to the survey.
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Given the factors that Mort mentioned earlier regarding ACUS's nonpartisan nature and organizational independence, it's quite possible that a reconstituted ACUS would be able to secure a greater response for these types of studies, which in turn would further Congress' knowledge of such issues.
Another key study in the project is being conducted by Professor Jody Freeman at Harvard Law School, focusing on empirical analysis of judicial review of agency rulemaking. The goal of the study is to find out what happens to agency rules during review in the circuit courts, essentially to determine how often rules are invalidated in whole or in part, and the reasons why they are invalidated. Professor Freeman's study is ongoing, but she discussed the methodology of the study and presented her preliminary findings at our September 11, 2006, symposium on Presidential, Congressional and Judicial Control of Agency Rulemaking.
The study is ultimately expected to yield significant and useful empirical data on the success of challenges to agency rules in the appellate courts, but the limitations on this type of study might be seen as providing further evidence of the futility of a reconstituted ACUS. Professor Freeman herself noted in her comments at that symposium that stand-alone studies of this type do not give rise to a coherent and comprehensive empirical strategy that fosters optimal analysis of administrative process for the long term. Rather, it could be argued that only an entity such as a reconstituted ACUS will have the ability to assemble a group of experts with the aim of formulating a cohesive methodology that will be supported by ongoing and systematic analysis.
I hope my testimony has given you an idea of the scope of work that's been done in these areas, as well as the potential for a reconstituted ACUS to further improve our knowledge and understanding of administrative law and process, and I look forward to answering any questions that you might have. Thank you.
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Mr. CANNON. Thank you, Mr. Halstead.
[The prepared statement of Mr. Halstead follows:]
PREPARED STATEMENT OF T.J. HALSTEAD
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Mr. CANNON. And again, thank you all for being here today.
Mr. Rosenberg, if I could just follow up on some of your comments. You talked at some length about the Congressional Review Act and about how it would work here in Congress. And you fell a little short of talking about what we actually talked about, I think, in this hearing, and that was if Congress were to review every rule. In other words, if you set aside the major rules as impractical to actually determine, then what the effect of that would be that noncontroversial rules would be viewed as minor, and if anybody had a problem with a rule, they could raise that problem in the course of a congressional oversight process.
That would mean that Congress would have to staff up somewhat. The Majority or the Minority would shift a little bit in how they would happen, but you would have an internal process whereby notice and comment could be had, and that way what was major would be determined not by the agency's action or by some other standard which would be difficult to implement, but rather by the reaction of the population. So that in the case of a small business and the effect of a regulation on a small business, small businesses could come forward and say, hey, this regulation would be more difficult, and you could do it in a more easier fashion.
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I don't know if you recall that part of the conversation, but it seems to me actually that the panel is agreeing that if you give up the idea of making a distinction between major and minor regulations, that you pretty soon end up in a point where you just say maybe Congress should review all, and then those that are substantial would become the point of focus. Do you recall that? And what is your thinking on that today?
Mr. ROSENBERG. What I was talking about today was a relation of testimony at the March hearing. It has been my view that there is a way to deal with all rules; that if, let's say, a joint Committee was set up as a screening mechanism, or a quorum-type vehicle was set up as a screening mechanism, which then presented recommendations, an internal procedure could be set up to screen out those rules that might be deemed minor rather than major, and that a deeming process that we talked about at the last hearing, which was approved by current Parliamentarian Sullivan and former Parliamentarian Charlie Johnson, that these could be the mechanism for——
Mr. CANNON. Would you mind suspending for a moment here while we have people leave? Thank you.
Please proceed.
Mr. ROSENBERG. The difficulty with limiting congressional review to major rules is just what you're saying: You're going to be losing rules that have an impact. Right now a major rule is defined by the Office of Management and Budget, and I don't know that you want to continue to have the Office of Management and Budget deciding what is a major rule, and therefore, these are the only rules that will come before Congress. You could do it verbally, with a sense of a $100 million impact, or a catch-all kind of a thing where it has a major significance, impact on—I did a nice thing here.
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One of the constitutional problems is Congress itself can't decide what to bring up, what would be a charter problem, demanding that an agency bring up a particular rule. So you may have a problem of all or nothing, and to have the kind of effective congressional oversight, it would seem to me that all rules, as they are now, should come before Congress. And you would set up a procedure whereby there would be a screening process that, let's say, after 30 days, if a particular rule is not acted upon or a joint resolution of approval is not followed against that particular rule, it then goes to a calendar Wednesday when all the rules are being passed at that particular point or approved.
Mr. CANNON. But the charter problem doesn't exist if all rules come through, but directing a rule—Congress is not good at directing, so you don't ultimately have a charter problem, do you?
Mr. ROSENBERG. Not when it's there, not with all the rules covered. Then there can be a selection process and a deeming of approval at that particular point. You could get rid of 99.98 percent of the rules every year, and you would be able to catch the 60 or so major rules that come forward, if they're necessary. Most of the major rules are not that controversial either. So that you would have a process whereby the meaningful threat is out there that Congress is looking, and that these rules will have to come up, you know, in a way that, you know, conforms with what they were supposed to be.
Mr. CANNON. Mr. Watt, would you allow me to do one more question?
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Mr. WATT. Sure.
Mr. CANNON. Dr. Copeland, when you talked about the blaming process—I think you mentioned that, that was mentioned by one of the witnesses here—that is, does Congress want to be blamed for rules that it approves based upon agency action? It seems to me that that's actually our job.
But secondly, having a process whereby you have a political review means that if you don't have significant objection to a rule, that the blame really goes to the people who have the interest who didn't assert the interest at the time. So do you think that the blaming—concern about blaming is something that Members of Congress would want to avoid, or is it something that we can deal with if we did some kind of a review of all regulations and perhaps a vote on all regulations?
Mr. COPELAND. I don't recall getting into the blaming issue, but I can respond to your question a bit.
The issue of whether congressional accountability for agency rules—it really gets back to the question of that the agency rules are based on congressional action. But the problem is more alluded to if Congress got in the business of approving all rules. There is about 4,000 final rules issued every year, and that would take up a significant amount of Congress' time. So some process of weeding these things out is necessary in order to avoid that overwhelming task.
The question then becomes how do you pick. And if you let OMB and the agencies pick which ones are subject to congressional review and would come up here. But technically any rule, under the Congressional Review Act—and Mort, correct me if I'm wrong—any rule can be challenged right now; there can be a resolution of disapproval on any rule, and it doesn't have to be one that an agency does a major rule report on or that GAO does a major rule report on. So Congress can pick which ones, and certainly the interest groups in Washington are adept at pointing things out to Congress which ones they have a problem with.
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Mr. ROSENBERG. The difficulty is it goes through a normal process of legislation, and you know how difficult that is. That's why expedited procedures assist in focusing and taking action in a timely and effective way. I'm the one that brought up the blaming——
Mr. CANNON. Oh, I'm sorry. You were quoting someone else, but——
Mr. ROSENBERG. I was quoting one of the participants on my panel who was making a political point, you know, that you're never going to get this because it puts too much responsibility. It may be that Congress gets blamed for doing things, and most often for not doing things; and here you're adding a whole category of rules that they could have taken care of, and somebody will hammer then. So therefore, let's have a procedure that's less threatening to us, or to you guys.
Mr. CANNON. I would hope that you could do some sort of expedited procedure and pass all bills, and the American people actually want that, and they're beginning to see that. And the blame thing is an initiating thing that we look at as individuals. Institutionally I think that Congress ought to have a greater role in the vast amount of law that gets created under the direction of the law we pass, but at the behest of the Administration.
Mr. ROSENBERG. One of the ostensible reasons for the passage of the Congressional Review Act was to place responsibility and accountability on Congress in order to wipe out the criticism that they nearly delegated vast amounts of power out and never, you know——
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Mr. CANNON. That lever hasn't worked as well—it might have worked a little bit, but we don't have the data, and it hasn't worked clearly as well as we had hoped. But you know that I'm a fan of the idea of passing all.
Thank you, all. And I would like to recognize Mr. Watt.
Mr. WATT. Thank you, Mr. Chairman.
And let me also join you in thanking the witnesses who have devoted so much time to this project, and I think advanced it to a point where hopefully it can be picked up and moved forward.
Mr. Rosenberg, I just had one clarifying question because I wasn't sure I understood what you were saying about ACUS being reauthorized in the 108th Congress, but wasn't so critical that it be funded. What was that point?
Mr. ROSENBERG. Well, my meaning was simply that the process that we're going through, the study process, the projects, the symposia, were setting the groundwork. And we could set the groundwork over a 2-year period, which we have done, but at some point there would have to be an ACUS or something like ACUS. There has to be something like ACUS to provide the kind of objective, nonpartisan consideration and study of sophisticated——
Mr. WATT. Right. I just wanted to make sure that the record was clear that all three of the witnesses, I assume, would strongly advocate funding of ACUS, not just reauthorizing it; or is there any disagreement about that?
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Mr. ROSENBERG. We don't advocate, but we would be pleased——
Mr. WATT. I mean, supportive and pleased, yes.
Mr. Rosenberg, let's just do it one by one so we'll have it in the record, and there won't be any equivocation about it.
Mr. ROSENBERG. I am supportive of a reactivated ACUS.
Mr. COPELAND. Certainly it makes sense for these issues to be explored further. I think the potential is there for significant savings as a result of this because the people will quibble about what the total dollar value is of all regulations, but it's clearly in the hundreds of millions of dollars. Just last year OMB approved 82, I believe it was, economically significant rules, each of which is $100 million; 1 percent of that total is $82 million.
Mr. HALSTEAD. It's very difficult to quantify how much money ACUS saved over its existence. There are anecdotal examples——
Mr. WATT. Let me be clear. I'm trying to get a straight answer into the record that you support or don't support appropriating money to fund ACUS.
Mr. HALSTEAD. I think over the course of the project we've identified several factors that could be looked at as very much supporting the notion that a reconstituted, refunded ACUS would have a beneficial effect for modern administrative government.
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Mr. WATT. Having established that from all three of the witnesses, let me also be clear. If you have some concept of what the appropriate appropriation level would be to adequately fund ACUS. And I guess I would say that against—obviously not having ACUS or something similar to it has had substantial economic impacts on various parts of our economy, businesses, so forth and so on. I'm trying to kind of put in context for the next Congress or future Congresses or Members of this Committee or the Judiciary Committee what it would cost as opposed to what it would save, I guess. And so what kind of appropriation level would we be talking about to adequately fund ACUS? Got a clue?
Mr. HALSTEAD. Well, we——
Mr. WATT. Mr. Halstead.
Mr. HALSTEAD. Using the prior reauthorization, it authorized, if my memory serves correctly, a funding level for fiscal years 2005 through 2007 of roughly $3 million a year. I think it's 3.2 million for the 2007 authorization. And based on the work that the Subcommittee did for that initial reauthorization, the expectation is that that would be somewhere in the neighborhood of what you would need for ACUS to get up and running in an effective fashion.
When you look at the academic literature study in ACUS, it has always been regarded as a very cost-effective organization in relation to the return it provides. So somewhere around that $3 million figure is maybe——
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Mr. WATT. Three million?
Mr. HALSTEAD. Three million, yes.
Mr. WATT. Okay. And that's the figure that you're projecting that would be to get it up and running. What is the annual figure, ballpark, that you would think it would be appropriate to sustain it once it is up and running on an annual basis?
Mr. HALSTEAD. I would think it would be somewhere in that neighborhood. Throughout the course of its existence, it was at somewhat roughly that proportional level.
Mr. WATT. Okay. I just wanted all that to be in the record because, I mean, you know, we're constantly doing cost/benefit analyses. It seems to me that this is one of those occasions that, while we're not being scientific about it, that it's important for us to make it very clear to future Committees and Congresses that we view ACUS as being a very cost-effective agency. And $3 million, if you're saving substantial cost in paperwork and administrative burden and getting substantial benefits out of what ACUS does, is a minuscule amount of money when juxtaposed against the benefit that we get out of it.
That's the point I'm trying to drive home, and I don't want this hearing to end without having that unequivocally in the record. If anybody wants to argue with it, I want that from the witnesses, but—nobody seems to be arguing with it, so I'm going to do like the Chairman does when he administers the oath: Let the record show that everybody is nodding in affirmative agreement with the statements that I just made.
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And with that, I'm happy, and I'll yield back, Mr. Chairman.
Mr. CANNON. Thank you.
Let me just add my view that ACUS is a remarkably cost-effective tool for governing ourselves, and that while I suspect that neither of us will be back on this Committee or directing this Committee next cycle, we will both be advocates for ACUS and for change. I am certainly concerned about who does Chair this Committee, and I'm hoping that we get someone—we've talked to several people who might end up doing that—who would recognize the importance of what we would be doing with this study and how we can translate that into law.
I'd like to ask unanimous consent to introduce into the record this memorandum from the Congressional Research Service from Mr. Rosenberg and Mr. Halstead, which its subject is the comparison of the duties and objectives of the Office of Management and Budget and the Administrative Conference of the United States with respect to the assessments of executive agency performance in the administrative process. I think that that is a valuable addition, especially in conjunction with the questions Mr. Watt asked.
[The information referred can be found in the Appendix.]
Mr. CANNON. I want to, again, thank the witnesses for being here, and the hearing will now be adjourned.
[Whereupon, at 4:23 p.m., the Subcommittee was adjourned.]
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A P P E N D I X
Material Submitted for the Hearing Record
LETTER FROM THE AMERICAN BAR ASSOCIATION SUBMITTED BY THE HONORABLE CHRIS CANNON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH, AND CHAIRMAN, SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW
[Note: Image(s) not available in this format. See PDF version of this file for complete hearing record.]
MEMORANDUM FROM MORTON ROSENBERG, SPECIALIST IN AMERICAN PUBLIC LAW AND T.J. HALSTEAD, LEGISLATIVE ATTORNEY, AMERICAN LAW DIVISION, CONGRESSIONAL RESEARCH SERVICE, TO THE SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW
[Note: Image(s) not available in this format. See PDF version of this file for complete hearing record.]