SPEAKERS CONTENTS INSERTS
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CONGRESSIONAL REVIEW ACT
THURSDAY, MARCH 6, 1997
House of Representatives,
Subcommittee on Commercial and
Administrative Law,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:32 a.m., in room 2237, Rayburn House Office Building, Hon. George W. Gekas (chairman of the subcommittee) presiding.
Present: Representatives George W. Gekas, Lamar Smith, Steve Chabot, Ed Bryant, Sheila Jackson Lee, Martin T. Meehan, and William D. Delahunt.
Also present: Raymond V. Smietanka, subcommittee chief counsel; Charles E. Kern II, subcommittee counsel; Susana Gutierrez, subcommittee clerk/research assistant; Diana L. Schacht, committee deputy staff director-counsel; and Perry Apelbaum, committee minority chief counsel.
OPENING STATEMENT OF CHAIRMAN GEKAS
Mr. GEKAS. The Subcommittee on Commercial and Administrative Law of the Judiciary Committee will come to order.
I have a sad announcement. This is the first time since I have chaired this subcommittee that I have started and hit the gavel late, but you'll have to forgive me; we'll blame the Speaker of the House, as we do for everything else. [Laughter.]
The hearing this morning, of course, is to review the impact thus far, and the estimated future impact, of the Congressional Review Act. As I remember, after the package of regulatory reform measure was passed in 1996, every time I returned to my district I would brag to the constituencies in various forms--chamber meetings, PTA meetings, labor-management types, you name it--about the accomplishment of that set of provisions that we had just passed. I characterized it then, as I do now, as a phenomenon in which twins were born of the ''Contract With America'' concept that we advanced at that time. Those twins were judicial review and congressional review.
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For the first time in memory, we adopted and embedded into law judicial review for a certain sector of regulatory reform which had never appeared before. And, on the other hand, we embarked upon the subject matter of today's hearing, a congressional review. Those two big firsts have resulted in a new era into the workings of agencies their and promulgation of rules, as well as the role of Congress in the overall process.
Even we have gained nothing more than making the agencies cognizant of, and sensitive to, the fact that Congress has this added capability, and even if Congress should never exercise it fully, the fact that this sensitivity does exist will make sure, in my judgment, that the agencies will be more careful, more predicting, in the outcome of their rules as they go about the business of promulgating same. So we're already ahead of the game. What we want to do today is to cast the news abroad, as it were, across the Congress and across the land, that we, indeed, mean to make this review system work.
With that, I would yield to the lady from Texas.
At the outset, I'd like to announce also that, because we have three panels, I would like to restrict the opening statements to one on each side, and then invite the other members to submit written statements in lieu of opening statements, if they wish, or they can take their time on questioning to make the type of remarks that would be considered opening remarks.
With that, we recognize the lady from Texas.
Ms. JACKSON LEE. I thank you very much, Mr. Chairman. At the outset, I would certainly like to congratulate you on holding these timely and very important hearings. Not only will today's oversight hearing allow us to begin the process of establishing a record concerning the Congressional Review Act, but it will help solidify this subcommittee's traditional jurisdiction over any changes to the Administrative Procedure Act.
As we're all aware, reform of the Nation's regulatory laws can be a highly contentious matter. Last Congress, the administration and many Members in both parties could not accept a number of proposed new limitations on the regulatory process, particularly as they related to health, safety, and the environment. Many of our constituents certainly were concerned about that process, but the Congressional Review Act gives us a chance to reform the regulatory laws the right way. It, quite properly, allows the experts within the agencies to continue to do their jobs by effectuating and clarifying legislation, while allowing Congress to scrutinize the agency work to ensure that it conforms with legislative intent. If properly implemented, the Review Act will allow us to restore ultimate accountability for major agency regulations where it belongs: simply with the Congress and the President of the United States.
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At the same time, we need to recognize that comprehensive regulatory reform cannot emanate solely from the Congress. Much of the change must come from within the agencies, and I think we have seen a large measure of progress in that area. In this regard, I'd like to note a recent report prepared by OMB entitled, ''More Benefits, Fewer Burdens: Creating a Regulatory System That Works for the American People.'' The report details literally scores of measures taken within the Clinton administration to streamline regulations benefiting businesses and consumers alike. For example, the report now notes the Commerce Department has consolidated numerous export forms into a single report.
I might say to our businesses: can you believe it? One page will allow you to receive the necessary documentation to engage in exporting of your product. I would ask that portions of this report be made a part of the hearing record, Mr. Chairman----
Mr. GEKAS. Without objection.
Ms. JACKSON LEE [continuing]. And and I lift it up as I mention its name.
[The information follows:]
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Ms. JACKSON LEE. It's also important that we not lose sight of a key objective: cutting agency redtape. Over the last 25 years, we have required that agencies consider at least 10 separate impact analyses when issuing new rules. What a load. The Congressional Review Act imposes yet another burden on agencies, and while, in my opinion, this modest new requirement is warranted, I think we must be careful that the act is not used as an excuse to force the agencies to spend countless additional hours merely shuffling paper back and forth and responding to open-ended and subjective inquiries. After all, our ultimate objective is to give taxpayers and efficient and effective regulatory system, not suspend the regulatory process.
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Finally, I might add it is my hope that this hearing can be used as a serious platform to examine the efficacy of the procedures being used under the new law. This is not the time or place to discuss specific or controversial regulations. We can take all day to do that. Our job here is to review the Congressional Review Act and discuss any necessary procedural changes to it, not delve into the specifics of highly complex regulations which I'm sure many of us can recount through the inquisitions and inquiries of our constituents, and which at this point fall outside of our substantive jurisdiction. I'm glad, however, that we're taking jurisdiction over this matter.
Again, thank you, Mr. Chairman, and I look forward to hearing from today's witnesses and working with you and the Congress on this matter.
Mr. GEKAS. We thank the lady.
Ms. JACKSON LEE. Mr. Chairman.
Mr. GEKAS. Yes?
Ms. JACKSON LEE. Can I ask unanimous consent that the members of the subcommittee be allowed to submit questions in writing as well?
Mr. GEKAS. Without objection.
Ms. JACKSON LEE. Thank you.
[The information follows:]
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Mr. GEKAS. A request has been made to record the proceedings in whole or in part by electronic means. Without objection, it will be so ordered.
Now we will commence our hearing with the first panel, which is made up of Robert F. Murphy, General Counsel of the General Accounting Office, who graduated from Duke University and Columbia University Law School. He worked for GAO and was counsel to the House Judiciary Committee's impeachment inquiry before joining a Washington, DC, law firm in 1977. An expert in contracting law, he returned to GAO in 1984, where he has served ever since.
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With him at the witness table is Charles W. Johnson, the Parliamentarian of the House of Representatives. His appearance before this subcommittee may be a first for the Office of the Parliamentarian. I cannot recall ever an instance where they have testified before an inquiring subcommittee or committee, unless it may have been possible that the Parliamentarian would go before some House housekeeping committee or something of that type.
But in any event, this is also a chance for revenge because over the last 15 years he has restricted my activities on the floor of the House of Representatives, and I'm going to start out by restricting him to 5 minutes [laughter], as I will to Mr. Murphy, with the hope that you will summarize the written testimony.
With Mr. Johnson is Tom Wickham, who is an associate in the Parliamentarian's Office.
So, with that, we'll start with Mr. Murphy.
STATEMENT OF ROBERT P. MURPHY, GENERAL COUNSEL, GENERAL ACCOUNTING OFFICE
Mr. MURPHY. Thank you, Mr. Chairman, Ms. Jackson Lee, and members of the committee. I'm pleased to appear before you today to discuss GAO's role in congressional review of agency rulemakings under the Small Business Regulatory Enforcement Fairness Act, which, fortunately, has come to be known as SBREFA, and our experience in the eleven months since that act was passed.
As you request, Mr. Chairman, I would like to present a short prepared statement and submit my full statement for the record.
Mr. GEKAS. Without objection.
Mr. MURPHY. Congressional oversight of rulemaking, as contemplated under SBREFA, can be an important and useful tool in accommodating and balancing the concerns that American citizens and American businesses have with the Federal regulatory process. We at GAO believe that it's important for the Congress to assure that the executive branch is responsive to citizens and businesses about the reach, the cost, and the scope of the regulations that are issued without compromising the statutory mission of those agencies.
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GAO's primary mechanism in this new statute is to take a quick look at the major rules that are submitted to us and provide a report to the committees of jurisdiction of the Congress within 15 days. Major rules are defined in the act to include, among other things, those which have an estimated impact on the American economy annually of $100 million or might have a major increase in cost for prices for consumers or businesses, and there are other criteria.
We received approximately 58 major rules from last April 1 through the end of February about which we report to the Congress. We have submitted reports on 56 of those. Two were due this week. In fact, I signed off on one this morning.
We report on whether there was a cost-benefit analysis conducted, whether the procedures required by the Regulatory Flexibility Act, the Unfunded Mandates Act, the Executive order that governs rulemaking, 12866, as well as other acts and Executive orders, have been complied with. We also refer the Congress to any GAO audit or evaluation reports which may bear on those regulations when we submit our report, and we provide any views that private parties may have submitted to us.
Our reports are available on the Internet within 24 hours of their transmission. We took a look to see how often our major rule reports are looked at on the Internet, how many hits, it's called. We looked at a couple of the weeks in February, and there were between 900 and 1,000 hits in which private citizens or businesses or the government looked at those major rule reports. I think a more important number is the number of times that our major rule reports were downloaded or printed off the Internet, and those run between 200 and 300 a week.
Our major rule reports have always been available in hard copy, on paper, and next month we're going to begin including them in our monthly list of reports that the agency issues, and they'll be in our document distribution system.
It's been our experience that, for the most part, Federal agencies have tried to comply with SBREFA, and they have certainly been most cooperative with us in helping us to prepare our major rule reports when we submit them to the Congress. As I said earlier, we only have 15 days to put these reports together, and occasionally we have to call the agencies to find out additional information that was not available to us when the rule was provided to us, and they have always been cooperative in that endeavor.
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We've also received 3,609 minor rules, or rules that aren't classified as major. And although the law is silent as to what we're supposed to do with them, it just provides that they are to be filed with us before they can be effective, we didn't see much value in just putting them in a filing cabinet. So we began immediately on April 1 to compile a data base with at least the minimal information that we could quickly collect from the 15 to 25 rules that come in every day. We include in our data base the title, the agency, the identification number, type of rule, effective date, the date it's published in the Federal Register, congressional review trigger date, and any joint resolutions of disapproval that may be passed. We're hopeful that that data base can eventually be available on the Internet, so that public citizens could call up and do research on the full number of rules that are promulgated by executive agencies every year.
We've been working to expand this data base. We've been talking to the executive agencies about a standard format and information that could provide more information in that database, and we're continuing to work with the executive branch on that subject.
Thank you, Mr. Chairman. This concludes the summary of my remarks, and I'd be happy to answer any questions.
[The prepared statement of Mr. Murphy follows:]
PREPARED STATEMENT OF ROBERT P. MURPHY, GENERAL COUNSEL, GENERAL ACCOUNTING OFFICE
Chairman Gekas, Mr. Nadler, and Members of the Committee, I am pleased to appear before you today to discuss the General Accounting Office's responsibilities in the congressional review of agency rulemakings under the Small Business Regulatory Enforcement Fairness Act (SBREFA), and our experience in the 11 months since the statute was enacted.
Congressional oversight of rulemaking as contemplated by SBREFA can be an important and useful tool for balancing and accommodating the concerns of American citizens and businesses with federal agency rulemaking. It is important to assure that Executive branch agencies are responsive to citizens and businesses about the reach, cost, and impact of regulations without compromising the statutory mission given to those agencies. SBREFA seeks to accomplish this by giving the Congress an opportunity to review rules before they take effect and to disapprove those found to be too burdensome, excessive, inappropriate, duplicative, or otherwise objectionable.
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Under SBREFA, before a rule can take effect, the federal agency must submit the rule to both Houses of Congress and the GAO. GAO's primary role in this new mechanism is to provide the Congress with a quick review of all ''major'' rules submitted to determine if the promulgating agencies have complied with the procedural steps governing the regulatory process. For rules that are determined to be ''major,'' GAO must provide its report to the congressional committees of jurisdiction within 15 calendar days.
MAJOR RULES
SBREFA defines a ''major'' rule as one which has resulted in or is likely to result in (1) an annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries, government agencies or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, innovation or on the ability of U.S.-based enterprises to compete with foreign-based enterprise in domestic and export markets. SBREFA specifies that the determination of what rules are ''major'' is to be made by the Office of Information and Regulatory Affairs, Office of Management and Budget. These rules cannot be effective until 60 days after publication in the Federal Register or submission to Congress and GAO, whichever is later.
GAO is required to submit a report to the committees of jurisdiction by the end of 15 calendar days containing GAO's assessment of the federal agency's ''compliance with the procedural steps'' required by the various acts and executive orders bearing on the regulatory process enumerated in SBREFA. These include the preparation of a cost-benefit analysis, where required, and compliance with the Regulatory Flexibility Act, the Unfunded Mandates Reform Act of 1995, the Administrative Procedure Act, the Paperwork Reduction Act, and Executive Order No. 12866. Other acts and executive orders which have been considered by federal agencies in major rules submitted to GAO include executive orders about family considerations, federalism, protected property rights, intergovernmental partnership and civil justice, and the National Environmental Policy Act.
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Our reviews are based on the information given to us by the promulgating federal agency and any additional information we obtain during the 15-day report preparation period. Because of the time constraints imposed by SBREFA, GAO's role is necessarily limited to a paper review of the processes employed in the rulemaking under applicable statutory and regulatory mandates. For example, in the area of cost-benefit analysis, we assure that the federal agency has conducted some type of analysis, whether it is called a cost benefit analysis, economic impact analysis, or economic analysis, and whether the analysis contains the three elements of a cost-benefit analysis required under Executive Order No. 12866. These are (1) an assessment of the costs and benefits, including the underlying analysis, anticipated from the regulatory action, (2) the costs and benefits, including the underlying analysis, of reasonably feasible alternatives considered, and (3) why the planned regulatory action is preferable.
Also, we provide a copy of each major rule to the audit or evaluation group within GAO that would be most interested to ascertain if GAO has performed any work relevant to the rule which should be brought to the attention of the Congress.
From the March 29, 1996, enactment of SBREFA through February 28, 1997, GAO has received 58 major rules from federal agencies, and all of our reports on these rules hare been submitted by the statutory deadline.
Our major rule reports are available on the Internet within 24 hours of transmittal to the committees of jurisdiction. In a recent week, our major rule reports on the Internet were accessed 938 times and reports were downloaded 273 times. In addition, the reports will be included in the GAO Monthly List of Publications beginning next month, at which time paper copies will be available through our document distribution system.
It has been our experience that, with few exceptions, federal agencies have sought to comply with the requirements of SBREFA, and, for the most part, they have been successful.
On some occasions, where federal agencies failed to comply with SBREFA, when we brought the matter to the attention of agency officials, corrective action was taken. For example, the Environmental Protection Agency stated that its rule on the Nitrogen Oxide Emission Reduction Program would become effective upon publication in the Federal Register rather than after the 60-day delay required by the statute. When this was brought to the attention of EPA, it published a correction in the Federal Register and delayed the effective date the required 60 days. Similarly, when we pointed out to the Department of Housing and Urban Development (HUD) that certain disclosure requirements should have been submitted to the Office of Management and Budget (OMB) for review under the Paperwork Reduction Act, HUD began steps to publish a correction to the final rule and submit the matter for OMB approval.
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One difficulty we have noted on a few occasions is the apparent failure of some federal agencies to budget enough time into the regulatory process to allow for the Today delay in the effective date of a major rule. The Department of Health and Human Services, Health Care Financing Administration did not allow for the 60-day delay when issuing ''Revisions to Payment Policies and Five Year Review of and Adjustments to the Relative Value Units under the Physician Fee Schedule for the Medicare Program,'' citing the ''good cause'' exception found at 5 U.S.C. 808(2) because Congress was not in session during most of the 60-day period and the effective date was established by the Medicare statute. We noted in our report to Congress that the ''good cause'' exception is only available for rules that do not involve notice and public comment procedures (those procedures normally followed in rulemaking) and since HCFA had issued a notice of proposed rulemaking and received public comments, the effective date could not be accelerated.
The Department of Agriculture, Rural Housing Service argued that the 60-day delay in the effective date of a rule entitled ''Reengineering and Reinvention of the Direct Section 502 and 504 Single Family Housing Program'' would result in a loss of the savings the rule would produce and be contrary to the public interest. As with the Medicare payment revisions, the rule had been previously issued as a notice of proposed rulemaking and the section 808(2) ''good cause'' exception could not be invoked.
Most recently, HUD in issuing a regulation entitled ''Sale of HUD-Held Single Family Mortgages'' allowed for a 60-day delay in the effective date from the date of publication in the Federal Register, January 24, 1997. Since HUD did not file its report on the rule with Congress until February 6, 1997, the rule was not delayed the required 60 days.
In addition to the major rule reports, GAO responded on September 16, 1996, to a request from the Chairman of the Subcommittee on Forests and Public Land Management, Senate Committee on Energy and Resources, addressing whether a memorandum issued by the Secretary of Agriculture in connection with the Emergency Salvage Timber Sale Program constituted a ''rule'' under SBREFA and should have been submitted to the Houses of Congress and GAO before it could become effective. We concluded that the Department of Agriculture erred in believing that the memorandum was not a rule.
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NONMAJOR RULES
SBREFA requires that agencies file with GAO and both Houses of Congress copies of all rules, not just ''major'' rules. To date, we have received 3,609 nonmajor rules. Although the law is silent as to GAO's role relating to the nonmajor rules, we have established a database that would give minimal information about the 25 rules we receive on the average each day. Our database captures the title, the agency, the Regulation Identification Number, the type of rule, the proposed effective date, date published in the Federal Register, the congressional review trigger date, and any joint resolutions of disapproval that may be enacted. We are working on a system that would allow us to post the information currently contained in our database on the Internet.
An expansion of this database could make it more useful, not only to GAO for use in its oversight work, but to' the Congress and to the public. We have been working with executive agencies to get more substantive information about the rules. Attached to this testimony is a copy of a questionnaire designed to obtain the basic information about each rule required by SBREFA (5 U.S.C. 801(a)(1)(B)). This questionnaire asks the agencies to report on such items as (1) whether the agency provided an opportunity for public participation, (2) whether the agency prepared a cost-benefit analysis or a risk assessment, (3) whether the rule was reviewed under executive orders for federalism or takings implications, and (4) whether the rule was economically significant.
In developing this questionnaire we consulted with Executive branch officials to insure that the requested information would not be unnecessarily burdensome. We circulated the questionnaire for comment to 20 agency officials with substantial involvement in the regulatory process, including, of course, officials from the Office of Information and Regulatory Affairs. The Administrator of OIRA submitted a response in her capacity as Chair of the Regulatory Working Group, consolidating comments from all the agencies represented in that group. It is the position of the group that the completion of this questionnaire for each of the 4,000 to 5,000 rules we expect to be filed each year is too burdensome for the agencies concerned. The group points out that the majority of rules submitted each year are routine or administrative or are very narrowly focused regional, site-specific, or highly technical rules.
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We continue to believe that it would further the purposes of SBREFA for a database of all rules submitted to GAO to be available for review by Members of Congress and the public. We will continue our efforts to obtain agreement of the Executive branch on this matter.
If the Internet database is to be of optimal use to interest groups or the general public, it should direct the public to the congressional committees of jurisdiction so comments about pending rules can be forwarded to the legislators most able to address them. Ascertaining the committees of jurisdiction for the nonmajor rules has been difficult because of the sheer number of rules submitted and the lack of consistency in which the rules are cited in the Congressional Record. We have initiated discussions with the House Parliamentarian to more efficiently obtain this information electronically. We hope at some point to tie GAO's database to that used by the Parliamentarian, so that one comprehensive body of information is available concerning regulations. We plan to initiate similar discussions with the Senate Parliamentarian.
Thank you, Mr. Chairman. This concludes my prepared remarks. I would be happy to answer any questions you may have.
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Mr. GEKAS. If you'll stand by, we'll cross-examine you a bit a little later.
Mr. MURPHY. My pleasure.
Mr. GEKAS. Mr. Johnson.
STATEMENT OF CHARLES W. JOHNSON III, PARLIAMENTARIAN, U.S. HOUSE OF REPRESENTATIVES, ACCOMPANIED BY TOM WICKHAM, ASSISTANT PARLIAMENTARIAN
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Mr. JOHNSON. Thank you, Mr. Chairman. It's a pleasure to be before this subcommittee. Mr. Tom Wickham, an Assistant Parliamentarian in our Office, is also with me because he handles the day-to-day workload that is presented to our Office.
My eight-page statement will be part of the record and will provide some detail about the paperwork requirements that have been placed upon the Speaker's Office, and, therefore, on our office.
Mr. GEKAS. The statement will be accepted, without objection.
Mr. JOHNSON. Thank you, sir.
My testimony today is intended to inform the members of the subcommittee of the large institutional responsibilities that the Congressional Review Act has placed upon the House and to express my willingness to explore methods of achieving the goals of the act in a less cumbersome way. In addition, I will testify on my understanding of the House procedures under the congressional review provisions of the act.
Pursuant to section 801(a)(1) of the Congressional Review Act, Federal agencies must submit a rule and accompanying report to each House of Congress and to the Comptroller General before the rule can take effect. The House has received, by our calculation, 3,438 rules under this act since the first rule was submitted April 16, 1996. It is projected that the House will receive approximately 8,000 rules in the 105th Congress.
The Clerk of the House has hired an additional employee to process the large increase in executive communications, pursuant to the Act. The Office of the Parliamentarian dedicates approximately 15 to 20 hours per week total manpower to the intake and referral of rules submitted under the act.
Pursuant to the Congressional Review Act, the effective date for a nonmajor rule is the date of receipt or publication in the Register, except as otherwise provided by law, the potential 30-day review period, as I understand it, in 5 U.S. Code, section 553(d), and the effective date for a major rule is 60 calendar days after the receipt or publication in the Federal Register.
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Section 801(d)(1) provides that any rules submitted in the period of 60 legislative days before the House adjourns a session and the date which the same or succeeding Congress--the same or succeeding Congress--first convenes its next session will be treated for congressional review as if it were received by Congress on the 15th legislative day in the succeeding session of the House.
Now many of you may not have noticed, on March 3, in Monday's Record there is a notation that we placed in the Record because it was the 15th legislative day of the 105th Congress, 1st session. This notice reads:
''Pursuant to 5 U.S. Code 801(d), Executive communications final rules submitted to the House pursuant to 5 U.S. Code 801(a)(1) during the period of May 22, 1996 through January 7, 1997''--in other words, all the submissions of major and nonmajor rules from May 22 until the first day of the new Congress, since the 60-day period had not run--''the submissions shall be treated as though received on March 3, 1997,'' the 15th legislative day of this Congress. And that roughly coincides, maybe give or take a day or two, with the 15th day of session in the Senate.
Original dates of transmittal, numberings, and referrals to committee of those executive communications remain as indicated in the executive communication section of the relevant Congressional Records of the 104th Congress. In other words, we had a choice: we could either republish in The Congressional Record every rule submitted with a heading and the referral, republish each heading, which would have taken an entire volume of the Congressional Records, of submissions since May 22, 1996. Our preference was to abbreviate that by a notice to all concerned that the Records of the various dates in the 104th Congress, the referrals of the communications to the committee of jurisdiction were as indicated in the Records of those respective dates.
Consistent with other laws providing congressional review of agency actions, I suggest consideration of a limit on the applicability of section 801(d)(1) and 801(2)(a) to restrict the recommencement of congressional review period to those rules submitted in the period of 60 legislative days or session days before a Congress adjourns its final regular session.
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We believe that committees are capable of resuming the review process of submitted rules after an intersession adjournment of the same Congress. We're not aware of any other law which so explicitly begins the congressional review period over again between sessions of the same Congress. Certainly, as is now the case with a new Congress with new Members and new committees, it makes sense to begin the congressional review period again. But, as I read in this statement, if this were the second session, for example, of the 105th Congress, any regulations submitted by whatever the date was, perhaps in May or June, where the 60 days had not finally run would be deemed resubmitted in the second session of the same Congress.
The procedures in section 802 govern congressional consideration of joint resolutions disapproving rules. Section 802(a) provides that a joint resolution disapproving a rule may be introduced in either House beginning on the date the rule is received by Congress until 60 calendar days thereafter, excluding days either House is adjourned for more than 3 days during a session.
Section 801(d)(1) provides that any rules submitted in the period of 60 legislative days before the Congress adjourns a session and the date which the same or succeeding Congress first convenes its next session will be treated for congressional review as if it were first received on the 15th session day in the Senate or on the 15th legislative day in the House.
We have only referred to date, I believe, two resolutions, joint resolutions of disapproval, as defined in the statute. We referred one in the 104th Congress, which was introduced by Representative Barton of Texas, and which claimed to disapprove a series of Federal Energy Regulatory Commission regulations. We do not believe that that joint resolution complied with the definition of a joint resolution of disapproval--the Senate Parliamentarians agreed--because it sought to disapprove more than one submitted rule. It sought to disapprove a series of FERC regulations in one joint resolution. That resolution, joint resolution, was referred to the Commerce Committee, the committee with legislative jurisdiction over the Federal Energy Regulatory Commission, and was not acted upon.
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In this Congress, we are aware of one joint resolution of disapproval introduced just the other day by Representative Don Young of Alaska to disapprove a rule from the U.S. Fish and Wildlife Service on polar bear trophies. So that is the----
Mr. GEKAS. On what?
Mr. JOHNSON. Polar bear trophies.
Mr. GEKAS. Oh, trophies.
Mr. JOHNSON. Yes. So, so far--and that was referred to the Committee on Resources as the legislative committee of jurisdiction.
I'm not suggesting that there won't be a proliferation of resolutions of disapproval. It wouldn't have made sense to have resolutions introduced before the 15th legislative day, so we are looking for the introduction and referral of more joint resolutions of disapproval.
I'd be willing to answer any questions.
[The prepared statement of Mr. Johnson follows:]
PREPARED STATEMENT OF CHARLES W. JOHNSON III, PARLIAMENTARIAN, U.S. HOUSE OF REPRESENTATIVES
Mr. Chairman and members of the Subcommittee on Commercial and Administrative Law, my name is Charles Johnson and I am the Parliamentarian of the House of Representatives. I have been asked to participate in this hearing and testify on the institutional effects on the House of Representatives of the Congressional Review subtitle of the Small Business Regulatory Enforcement Fairness Act of 1996 or ''SBREFA.'' SBREFA became law on March 29, 1996 as Title II of the Contract with America Advancement Act of 1996, Public Law 104—121. Subtitle E of SBREFA was entitled ''Congressional Review'' and established a new chapter 8 in title 5 of the United States Code. Chapter 8 of title 5 is commonly known as the Congressional Review Act'' and provides for expedited congressional review of agency rulemaking.
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My testimony today is intended to inform the members of the Subcommittee on Commercial and Administrative Law of the large institutional responsibilities that the Congressional Review Act has placed upon the House and express my willingness to explore methods of achieving the goals of the Act in a less cumbersome way. In addition, I will testify on my understanding of House procedures under the congressional review provisions of the Act.
Pursuant to section 801(a)(1) of the Congressional Review Act, federal agencies must submit a rule and accompanying report to each House of Congress and the Comptroller General before a rule can take effect. Section 808 provides the only exception to the requirement that rules must be submitted to each House of Congress and the Comptroller General before they can take effect. Section 808(1) excepts specified rules relating to commercial, recreational, or subsistence hunting, fishing, and camping. Section 808(2) excepts certain rules that are not subject to notice-and-comment procedures. Although rules described in section 808 shall take effect when the relevant Federal agency determines pursuant to other provisions of law, the federal agency still must submit such rules to each House of Congress and to the Comptroller General.
Federal agencies submit rules and accompanying reports to the House via the Speaker's Office in H—209 and the Senate via the Office of the President of the Senate in S—212. Federal agencies use different modes to transmit rules to the House with messenger and mail being the most frequently used method of submission. The House requires a cover letter addressed to the Speaker with an original signature pursuant to House rule XL and faxes are unacceptable. Unlike other executive communications, agencies are allowed to bundle rules submitted pursuant to section 801(a)(1), that is, to submit multiple rules with one cover letter be noted that rules are submitted to a different physical location in the Senate, the Office of President of the Senate in S—212, than where they are referred, the Office of the Parliamentarian in S—133, sometimes causing delay in referral and publication.
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A rule submitted pursuant to section 801(a)(1) is then referred as an executive communication by the respective Offices of the Parliamentarian. Rules are referred to the ''standing committee with jurisdiction under the Rules of the House of Representatives or the Senate to report a bill to amend the provision of law under which the rule is issued'' pursuant to section 801(a)(1)(c). The practice of the House Parliamentarian has been to refer rules submitted pursuant to this Act to only one committee with few exceptions. For example, rules affecting Part A and B of Medicare are referred to both the Committee on Ways and Means and the Committee on Commerce. Rules are referred to the primary committee having jurisdiction over the provision of law under which the rule is issued. Other committees with legitimate oversight jurisdiction are not precluded from conducting oversight hearings on the proposed rule.
Upon referral, a rule is transmitted to the committee of jurisdiction by the Clerk and published in the Congressional Record with a short summary, the date of its receipt, and its referral. The amount of executive communications that the House as an institution has received pursuant to this Act has been great. The House has received 3438 rules since the first rule was submitted on April 16, 1996, under this Act. By comparison, the House received only 3370 other executive communications in the 104th Congress. It is projected that the House will receive approximately 8,000 rules in the 105th Congress. The Clerk of the House has hired an additional employee to process the large increase of executive communications pursuant to this Act. The Office of the Parliamentarian dedicates approximately 15 to 20 hours per week to the intake and referral of rules submitted under this Act. In light of the expansive workload brought on by the mass of paperwork required by this Act, the Clerk and the Office of the Parliamentarian appreciate efforts to limit the amount of paper submitted to the House pursuant to this Act. Possibly a system could be developed in which the massive transmittal of rules to the House would be lessened while the House and Senate remained apprised of the promulgation of rules, and committees could receive referrals of documents already printed in the Federal Register. I am committed to working with the Senate, the General Accounting Office, the Committee on the Judiciary, and other relevant parties to explore less burdensome methods of handling agency submissions under this Act.
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Unlike most other executive communications received by the House, the date of receipt for rules submitted pursuant to section 801(a)(1) is included in the Congressional Record. The date of receipt, which sometimes differs from the date of referral to committee, is included in the Record for two purposes. First, it allows executive agencies to calculate the effective date of their rules. The effective date for final non-major rules is the date of receipt or publication in the Federal Register, except as otherwise provided in 5 U.S.C. 553(d), and the effective date for major rules is 60 calendar days after date of receipt or publication in the Federal Register. Second, the date of receipt governs the time period for expedited consideration of a joint resolution of disapproval, that is 60 calendar days excluding days either House is adjourned for more than three days during a session.
Section 801(a)(2) of the Act delays the effective date of major rules until 60 calendar days after the date on which Congress receives the proposed rule or on which the rule is published in the Federal Register (whichever occurs later) unless a joint resolution of disapproval is signed into law pursuant to section 802. Pursuant to section 801(a)(5), the effective date of a rule shall not be delayed beyond the date on which either House of Congress votes to reject a joint resolution of disapproval under section 802. The President may also act to allow a rule to become effective prior to the expiration of 60 calendar days pursuant to section 801(c). The President may determine by Executive order that a rule should take effect because a rule is necessary for reasons of health and safety, enforcement of criminal laws, national security, or pursuant to a statute implementing an international trade agreement. The President must provide written notice to the Congress of such a determination.
Section 802 of the Act governs congressional consideration of joint resolutions disapproving rules. Section 802(a) provides that a joint resolution disapproving a rule may be introduced in either House beginning on the date the rule is received by Congress until 60 calendar days thereafter excluding days either House of Congress is adjourned for more than three days during a session. Section 801(d)(1) provides that any rule submitted in the period of sixty legislative days or sixty session days before the Congress adjourns a session and the date which the same or succeeding Congress first convenes its next session will be treated for congressional review as if it were first received by Congress on the 15th session day in the Senate, or 15th legislative day in the House. This period extended from May 22, 1996 to January 7, 1997 in the 104th Congress. Therefore, if a rule was submitted on or after May 22, 1996, a joint resolution of disapproval regarding that rule may be introduced in this Congress beginning on the 15th session day in the Senate, February 26, 1997, or the 15th legislative day in the House, March 3rd, 1997, until 60 calendar days thereafter (excluding days either House of Congress is adjourned for more than 3 days during the session) regardless of whether such a resolution was introduced in the prior Congress. On March 3, 1997, the 15th legislative day of the House in the 105th Congress, notice was provided in the Congressional Record that executive communications submitting final rules to the House pursuant to 5 U.S.C. 801(a)(1) during the period of May 22, 1996 through January 7, 1997, would be treated as though received on March 3, 1997. 2,224 rules submitted during the period of May 22, 1996 to January 7, 1997 will be treated by the House as though they were received on March 3rd, 1997. The principle behind allowing a new Congress an extended opportunity to use expedited procedure in the Senate to enact a joint resolution of disapproval on a rule submitted at the end of a preceding Congress or prior to the start of a new Congress seems justified since a new Congress with new Members and new committees must first be organized. The need for extended opportunity for review of rules submitted at the end of a session on the 15th legislative day of a new session of the same Congress is not as clear. In modern practice, unlike the usual large amount of days where the House is not in session between Congresses, the adjournment time where the House is not in session between sessions is usually brief. The membership of the House remains static between sessions and legislation, including joint resolutions of disapproval, initiated in one session may be acted on in a subsequent session. The potential of attempting to apply this subsection of the Act in a Congress in which a special session has been held is also cause for concern. I am not aware of any other statutes providing for congressional review of agency actions that begins the review anew between sessions of the same congress. I encourage consideration of a limit on the applicability of section 801(d)(1) and 801(2)(A) to provide additional review for only those rules submitted in the period of sixty legislative days or sixty session days before a Congress adjourns its final regular session.
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Section 802(a) of the Act prescribes the form of a joint resolution of disapproval. Pursuant to our review of legislation introduced since the Congressional Review Act became law on March 29, 1996, only two joint resolutions disapproving rules have been introduced. In the 104th Congress, Rep. Franks introduced H.J. Res. 178, that disapproved rules issued by FERC. H.J. Res. 178 did not follow the technical requirements for the text of a joint resolution of disapproval prescribed in 802(a) and attempted to disapprove more than one rule. It was referred to the Committee on Commerce in the House.
Section 802(c) and (d) provide for expedited consideration of a joint resolution of disapproval originating in the Senate. The Congressional Review Act does not provide for expedited procedure in the House except in 802(f), presumably relying upon the leadership and the Committee on Rules to program such a joint resolution on an ad hoc basis in timely fashion. Section 802(f) provides procedures for passage of a joint resolution of disapproval when one House passes a joint resolution and transmits it to the other House that has not yet completed action. In both Houses, the joint resolution of the first House to act shall not be referred to a committee but shall be held at the desk. The legislative history reveals that 802(f) was included to inhibit amendments between the House and House—Senate conferences on these resolutions.
In closing, I am confident that a method of easing the administrative responsibilities that the Act places on the House can be achieved. I am willing to work with all relevant parties to develop a uniform system that allows for thorough congressional review of rulemaking with potentially less paperwork. I also remain available to offer advice on any procedural aspect of congressional review under this Act.
------
REPORTS FILED PURSUANT TO PUBLIC LAW 104—121, {251} (110 Stat. 868) (Approved March 29, 1996)
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104TH CONGRESS, 2ND SESSION AND 105TH CONGRESS, 1ST SESSION (FROM MAY 22, 1996 THROUGH JANUARY 7, 1997)
Total rules filed--2, 224. Total ''Major'' rules filed--20.
104TH CONGRESS, 2ND SESSION (FIRST RULE RECEIVED ON APRIL 16, 1996)
Total rules filed--2,120. Total ''Major'' rules filed--11.
105TH CONGRESS, 1ST SESSION (AS OF FEBRUARY 28, 1997)
Total rules filed--1,318. Total ''Major'' rules filed--22.
TOTAL RULES FILED SINCE THE ENACTMENT OF PUB. L. 104—121
Total rules filed--3,438. Total ''Major'' rules filed--33.
The above totals reflect the number of rules filed in the House of Representatives, and printed in the Congressional Record.
Source: House Enrolling Clerks.
Mr. GEKAS. Yes, thank you.
We note the presence of the gentlemen from Massachusetts, Mr. Delahunt; and Mr. Meehan; as well as the gentleman from Tennessee, Mr. Bryant.
Seizing the prerogative of the gavel, I'd like to begin the first round of questions by asking Mr. Murphy: you have to take the judgment, do you not, of the agency submitting the rule as to whether it's minor or major? If, indeed, they submit it to you at first as being major, you don't have to double-check that to see whether $100 million is really applicable or not; is that correct?
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Mr. MURPHY. That's correct, Mr. Chairman. The statute explicitly provides that the Office of Information Regulatory Affairs in OMB makes that determination. So we take the representation when the rule is filed with us as to whether it's major or minor.
Mr. GEKAS. Now, conversely, if they submit a rule which, in their judgment, does not rise to the level of major, and therefore it is minor. Do you inquire to see whether or not it should rise to the level of major?
Mr. MURPHY. We haven't to date. I suspect if we received a rule that on its face looked clearly to be one that should have been in the major category, we'd make some inquiries about that.
Mr. GEKAS. That's what I wanted to know. I would like to be assured of that because sometimes we might have a bureaucrat--and I say that kindly; I always liked bureaucrats--a bureaucrat in one of the agencies----
Mr. MURPHY. I'm glad, Mr. Chairman, speaking as a bureaucrat. [Laughter.]
Mr. GEKAS [continuing]. Yes, I know--who on his or her own whim would not want it to go to the major category and doesn't want to bother with it being calculated as major and relegates it to the minor category. We'd want to have some failsafe mechanism or some scrutiny capability to determine that perhaps that should be elevated.
Mr. MURPHY. If something looked to be clearly miscategorized, we would bring, first, to the attention of the agency, and then, second, to the attention of the committees of Congress, if that was necessary.
Mr. GEKAS. But how would Congress act? Suppose some Member learned from a disaffected small business person or homeowner or someone that a rule which was originally cast as minor should be subject to the CRA. I'm wondering how should the Congress react. We can't file a--oh, yes, we can. I guess we can file a resolution of disapproval, can we not, and base it on the fact that it was not cast as a major; is that correct?
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Mr. MURPHY. As far as I know, Mr. Chairman, you can do that.
Mr. GEKAS. You've helped a great deal already.
Mr. Johnson, when you say that the rule has to be referred to each Chamber, to the House and to the Senate, you're not saying that, like the communication from the President which is announced on the floor, that each rule has to be announced on the floor; is that correct?
Mr. JOHNSON. That's correct. It's referred----
Mr. GEKAS. Does it come straight to the Speaker's or Parliamentarian's Offices?
Mr. JOHNSON. Into the Speaker's Offices. The Speaker has three offices. There have been occasions when the actual transmittal of a regulation will come to his congressional office, for example, and we hope will immediately be called to our attention, but the referral is not announced verbally on the floor each day. It's merely indicated in The Congressional Record.
Mr. GEKAS. Yes. Just out of the curiosity, the communication from the President or communication from the Senate, is it announced on the floor by reason of constitutional requirement or just custom and usage?
Mr. JOHNSON. Well, the Rules of the House require messages from the Senate to be announced by the Senate secretary. Messages from the President under seal are delivered to the House by the secretary to the President and are read to the House, whereas executive communications, be they letters from the President or letters from any other department or agency, are only transmitted to the Speaker's Office for referral by us under the rules. They are not read. But Presidential messages and messages from the Senate are, by rule of the House.
Mr. GEKAS. I think we're going to bring you back again for some more questions in that order, so we can be reeducated.
When you were talking about counting the days, so that we can get to the 60-day period that is part of the act, you made reference to the fact that you on your own made a judgment that resubmission would not be necessary, like in a second year of a term, but, rather, you just start the count from where you left off. Is that what you----
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Mr. JOHNSON. We believe the law should be amended to so reflect.
Mr. GEKAS. Ah, that's what I wanted to know.
Mr. JOHNSON. The current law requires----
Mr. GEKAS. You're recommending to us that we should make sure that the resubmission takes up where you left off?
Mr. JOHNSON. Yes, sir.
Mr. GEKAS. I'd have counsel take note of that, and maybe we can seek to do that as a subcommittee soon.
Well, I thank the witnesses. I may want a second round, but for now I yield to the lady from Texas for 5 minutes for purposes of examination.
Ms. JACKSON LEE. Thank you, Mr. Chairman. Mr. Johnson, Mr. Murphy, thank you very much.
As I opened this morning, I indicated that this should give us an opportunity to have an oversight responsibility and see if the thing is working, frankly. I guess my first inquiry to both of you is to determine whether the agencies and the administration have sought in good faith to comply with the Congressional Review Act. What is your assessment of that, Mr. Johnson, Mr. Murphy?
Mr. MURPHY. For the matters that we consider when the rules come to us, our view is that, for the most part, agencies have tried to comply with the statute. There have been a number of occasions where we have detected an error or a mistake, and we've called the agency, and they have corrected it. There have been some other cases in which agencies have provided insufficient time during the regulatory process to provide the 60-day delay that the statute requires for major rules after they're submitted to the Congress and to the GAO. I suspect there may be five or six of those occasions. But with those exceptions for the matters that we consider, agencies have sought to comply with the statute.
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Ms. JACKSON LEE. And when those various infractions have been called to their attention, they have immediately corrected it or----
Mr. MURPHY. On several of the cases where they didn't have the--they made the effective date shorter than the 60 days which was required by the statute, on several of those occasions, no, they have not done the correction, for whatever reasons. We brought that to the attention of the committees that we report to for whatever they might decide to do.
Ms. JACKSON LEE. Action there might be.
Mr. MURPHY. Right.
Ms. JACKSON LEE. Mr. Johnson.
Mr. JOHNSON. Yes, we're not aware of any negligence or bad faith on the part of any agencies. I might just say that the Federal agencies use different methods to transmit rules to the House--with messenger and mail being the most frequently used methods of submission. The House, under its rule 40, requires a cover letter addressed to the Speaker with an original signature. At first we were getting copies without original signatures that we felt were unacceptable, and faxes are unacceptable because they don't bear original signatures.
Unlike other executive communications which we receive often, agencies are allowed, under this statute, to bundle rules submitted pursuant to section 801; that is, to submit multiple rules with one cover letter. For example, the Federal Aviation Administration, probably the most often submitting agency, will submit proposed FAA regulations with one covering letter, and as long as we see that all those proposed regulations will be referred just to the Transportation and Infrastructure Committee, which is usually the case, we will refer that bundle as one executive communication.
Ms. JACKSON LEE. I know we could probably explore this, but I may want to have an opportunity to explore further any more expedited ways of having these transmitted or transferred, and I don't know if we would get too sophisticated if we were talking about computerization, but I hear what you're saying and certainly would like to----
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Mr. JOHNSON. If I might comment on that just momentarily----
Ms. JACKSON LEE. Yes.
Mr. JOHNSON [continuing]. It's really one of the two emphases I wanted to put on suggestions to the subcommittee. We believe that, because virtually all--we think all--regulations are promulgated and printed in the Federal Register, which is online, to perhaps reduce the amount of sheer paperwork that we and the bill clerks undergo every day, that a form of electronic transmittal and referral be explored, and we are willing to work with GAO and agencies to explore that possibility.
Ms. JACKSON LEE. Thank you. Let me follow up very quickly, Mr. Johnson, and just say, Would you see any benefit in providing for special House procedures to allow disapproval resolutions to reach the floor on an expedited basis?
Mr. JOHNSON. My understanding of the statute is that it specifically and deliberately was kept silent on House procedure. In the Senate, which doesn't have the luxury, if you will, of a Rules Committee, expedited procedures were specifically written in for Senate consideration, as is often the case in other statutes. The notion was that the House, through its leadership and the Rules Committee, can, for compelling reason, expedite the consideration of a joint resolution of disapproval on an ad hoc basis through the Rules Committee or under suspension of the rules and other procedures.
Ms. JACKSON LEE. And I thank you. There's another area that I want to explore, but I want to get this final question in to Mr. Murphy. And that is, in reading the Heritage Foundation reports, they have suggested that we might do well to have the GAO give a more detailed assessment of major rules. That means when you submit a report to Congress, it should indicate whether it is the opinion of the agency whether or not--excuse me--opinion of GAO that some of the agency's conclusions are questionable and worthy of more indepth review. The bottom line is that you would give a more extensive analysis. I don't want to editorialize, but more paragraphs and more paper. Could you question or comment on the advisability of such a mandate and the availability of resources, if necessary to do such?
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Mr. MURPHY. To the extent to which Congress wants GAO to be more involved in individual major rules, it's really an issue of priority and resources. We have difficulty at this time, having reduced our staff by over a third during the past 3 years, fulfilling our current responsibilities. But any committee of Congress is empowered to request GAO to do an evaluation or a study on virtually any subject, and we would endeavor to do that.
I remember that during the consideration of the Clean Air Act amendments back in 1990 there was a thought that GAO should essentially redo the studies that EPA would be doing under the Clean Air Act; the conclusion of the Congress at that time was that GAO as an audit agency would better serve the Congress by providing oversight of the regulatory process in general, rather than to redo what the agency was doing in the first case.
We have a number of studies underway right now looking at the regulatory process. At EPA, for example, in the next month or two we're going to be issuing a report in which we examine 23 regulatory impact analyses to ascertain various matters with respect to----
Ms. JACKSON LEE. But any additional analysis would cost more money?
Mr. MURPHY. Of course.
Mr. GEKAS. The time of the lady has expired.
Ms. JACKSON LEE. Thank you, Mr. Chairman.
Mr. GEKAS. The Chair now notes the presence of the gentleman from Texas, Mr. Smith, a valued member of the subcommittee. The Chair will yield 5 minutes to the gentleman from Tennessee, if he wishes to pose any questions to the witnesses.
Mr. BRYANT. Thank you, Mr. Chairman.
Let me thank the members of the panel for coming today. Mr. Johnson, let me publicly express to you and your staff my appreciation for the outstanding job that you do for us in the House. Thank you.
Let me ask you first, if I could, Mr. Johnson, at the start of the 104th Congress, we did away with proxy voting, so that we had to attend all committee meetings. One of the purposes of doing that was to slow us down a little bit in terms of the quantity of legislation, and so forth, that we were involved in, and perhaps concentrate more on the quality of the legislation. Do you sense any similar feelings on behalf of the agencies in terms of the numbers of rules that are coming forward and, again, a philosophy more driven by quality than quantity?
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Mr. JOHNSON. I'm not sure I can answer that, Mr. Bryant, because we are not in direct communication with the agencies on what motivates them or what their preferences might be as far as the proliferation of these submissions. I could only speculate, and I don't think it would be fair.
I take it you're not asking me to comment on the proxy voting ban?
Mr. BRYANT. No, no, I'm not. I have my own feelings on that. [Laughter]
Mr. Murphy, maybe I should have asked you, if you could give me just a brief answer, I've got a couple of followup questions for you on another subject.
Mr. MURPHY. We don't have a baseline, Mr. Bryant, with which to answer that. We've been looking at these rules for 11 months, and don't really have, it seems to me, enough time to make that kind of judgment as to whether the act, for example, has changed agency behavior.
I should say that we have one study underway, at the request of a committee in the Senate, to take a look at the administration's efforts to reduce the number of regulations and to cut them down, and we're taking some macromeasures of the number of pages in the CFR, and the conclusions from that report may be helpful in answering your question.
Mr. BRYANT. Let me ask you another question, Mr. Murphy, while you've got the microphone. As you know, section 801(b)(2) of the act provides that if a rule has been successfully subject to a resolution of disapproval--and I quote--''it may not be reissued in substantially the same form,'' unquote, which is left undefined, what that actually means. Do you have any suggestions for defining this term in terms of substantially the same form?
Mr. MURPHY. We haven't given any thought to that at GAO at this time.
Mr. BRYANT. Mr. Johnson, would that be within your bailiwick?
Mr. JOHNSON. Well, we've seen other statutes, and even the rules of the House say, once you've done something, you shouldn't--when you get past reconsideration, you shouldn't do it again for a session, but the term ''substantially the same form'' is a term of art that for different attorneys, different folks, may have a different meaning.
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Mr. BRYANT. One final question: in terms of whether Congress should require GAO, Mr. Murphy, to conduct a more detailed assessment of major rules or not, including the validity of an agency's conclusions underlying the rule, can you make a case for or against a more detailed GAO assessment than is presently required?
Mr. MURPHY. As I said earlier, Mr. Bryant, that's essentially an issue of priorities and resources. We have looked at individual rules in detail. At the current time, at the request of a number of committees, we're looking at the proposed regulation by the Environmental Protection Agency with respect to ozone and particulate matter. That won't be issued in final until next summer, but I expect that by the time it is issued in final, GAO may have some substantive comments on the regulation. Certainly, in the past we've looked at individual regulation at the request of committees.
Mr. BRYANT. Let me follow up with one other question. Professor Strauss will suggest today that section 801(b)(2) is substantially the same rule. In the event a rule is disapproved, could one be allowed to resubmit this particular rule with a full explanation of how any issues ventilated in the initial disapproval process have been met? Did you follow my question? Did that make sense?
Mr. MURPHY. It did. I understood. Yes. I've reviewed Professor Strauss' testimony.
Mr. BRYANT. Professor Strauss is going to suggest a modification on that. Do you have an opinion on that?
Mr. MURPHY. I started to add a minute ago, Mr. Bryant, that the extent to which a rule is--which is being resubmitted--is or is not substantially in the same form is an issue that will appear in the Federal district courts very quickly. And it seems to me that that's an appropriate forum to decide whether or not they've crossed the requirements of the statute or not.
Mr. BRYANT. OK. Thank you.
Mr. GEKAS. The subcommittee will recess pending the completion of the two votes called for on the floor of the House. We will reconvene at or near 11:40.
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We thank the panel for its forthright questions and answers, and we will look forward to further consultation with both entities. Thank you.
Oh, I'm sorry. I guess we'd better wait to see if other members wish to examine the witnesses. So I'll ask you to linger.
Mr. Delahunt, will you have questions?
Mr. DELAHUNT. I'll just have a few questions.
Mr. GEKAS. All right.
Mr. DELAHUNT. I don't want to hold the panel, however.
Mr. GEKAS. Well, I do--if necessary. [Laughter.]
Mr. DELAHUNT. Well, I know how busy Mr. Johnson is.
Mr. GEKAS. Certainly.
Mr. DELAHUNT. And I'll be able to ask him those questions from the floor of the House----
Ms. JACKSON LEE. Then he won't be able to answer them on the record, so you----
[Laughter.]
Mr. DELAHUNT. Well, you know, maybe actually it's good to have Mr. Johnson come back----
Mr. GEKAS. All right. With that, with the gentility of the gentleman from Massachusetts, you will be dismissed. Thank you. Oh, do you want----
Ms. JACKSON LEE. He wants to question him for the transcript.
Mr. GEKAS. Oh, you do want to ask him questions for the record? I'm sorry.
Ms. JACKSON LEE. Yes.
Mr. GEKAS. Let's start all over again. [Laughter.]
Ms. JACKSON LEE. He would like----
Mr. GEKAS. We'll reconvene at 11:40 for the purpose of having these witnesses further examined.
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Mr. DELAHUNT. I'll withdraw my gentility, Mr.----
Mr. GEKAS [continuing]. By the gentleman from Massachusetts. [Laughter.]
[Recess.]
Mr. GEKAS. While we're waiting, I would ask Mr. Murphy, in the written statement you submitted there was a reference to a bit of--I won't say recalcitrance, but maybe a little contretemps on the question of the database and the development of the questionnaire which you have felt would be helpful in all of this. In effect, what I understand from your written statement is that the Administrator of OIRA wants to reserve the right to determine that some rules are just routine and do not need to go through the extra process. Is that generally what is occurring?
Mr. MURPHY. I think there's a concern--Mr. Chairman, I think there is a concern both by OIRA, but also by a number of executive agencies. I think Ms. McFadden is going to testify today that there are thousands of routine rules that the administration believes it would be burdensome to fill out a--to provide much additional information for our data base. I must say that we are in discussions on that subject and looking to see whether there isn't some way that we can obtain more substantive information on the great majority of the--certainly on the substantive rules that are filed with GAO. As I said during my prepared statement, we receive these rules and it doesn't seem to be particularly of value to just stick them in a file. The American people and the Congress might be interested in having a broader picture of the regulatory world that we could provide by putting more information in the data base. But we're in the course of discussing that matter with OIRA.
Mr. GEKAS. Would that discussion entail the possibility of agreeing on what has been routine over the past 15 or 20 years in certain types of rules and then redtagging them, that they would just continue year after year or term after term and just take their place at the bottom of the data base? How would you do that?
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Mr. MURPHY. I'm not sure I quite follow that.
Mr. GEKAS. Well, suppose we determined that there's a rule that's so routine, it's been used the last 10 terms, shall we say.
Mr. MURPHY. Uh huh.
Mr. GEKAS. Do you follow what I----
Mr. MURPHY. Right. Well, every time there's a change in a bridge opening schedule, for example.
Mr. GEKAS. The only problem that I have with all of this is the opportunity. If a bureaucrat, if you'll accept that term, is bent on doing mischief, he can accomplish it by taking what could be or would be a major rule and simply calling it routine and letting it fly through without the scrutiny. That's the only thing I worry about. But I guess we have to----
Mr. MURPHY. I'd like to say, Mr. Chairman, there's no proposal that I've heard from anybody that all of the rules are not going to be provided to GAO or provided to the Congress. Now the issue is what additional information would be provided for GAO to put in its data base. And the extent to which we could, we could identify major rules. I don't know; we're not far down that line yet. We don't have authority in the act. There was some early language in the bill as it was passing through the Senate and the House that would have provided GAO with the authority to prescribe information that would be provided to it about the rules. That language did not survive, and the statute was passed without that authority. So we're in the process of working with the executive branch and with interested congressional committees to try to work out a way to increase the information that would come to GAO.
Mr. GEKAS. The man of the hour has arrived and we will yield to the gentleman from Massachusetts for a round of questions for our panel.
Mr. DELAHUNT. Well, thank you, Mr. Chairman. I want to extend my apologies in terms of my tardiness, but I still get lost in these tunnels underneath these buildings.
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Prior to leaving for the vote, I asked Mr. Johnson the number of transmittals that his office had received and he said 3,400. Is that true? Is that accurate?
Mr. MURPHY. It's closer to 34; 38 is our number.
Mr. DELAHUNT. And my memory was, and maybe you can clarify this for me, Mr. Murphy, that you cited the figure 6,000?
Mr. MURPHY. No. 3,600.
Mr. DELAHUNT. Oh, 3,600.
Mr. MURPHY. I did notice the fact that Mr. Johnson and I had different numbers, and it may be that our ending point was different. I've agreed with Mr. Johnson that we're going to compare notes so that the next time there's an inquiry we'll have the--we'll be reading from the same page or the same book.
Mr. DELAHUNT. Fine, thank you. Well, that clarifies that. And Mr. Johnson, you said there were two matters that were the subject of a resolution of disapproval?
Mr. JOHNSON. Pending, Mr. Delahunt, pending. Now we're only aware of one that's actually been introduced. We've heard of another through press releases that Congressman Wicker of Mississippi may introduce with respect to OCEA regulations, but the only one now introduced in the 105th Congress is H.J. Res. 59 disapproving the U.S. Fish and Wildlife Service rule on polar bear trophies.
Mr. DELAHUNT. This was the polar bear trophy rule and regulation?
Mr. JOHNSON. Yes.
Mr. DELAHUNT. And that's the only one----
Mr. JOHNSON. The only one introduced so far. But, as I said, I wouldn't be surprised, now that the 15th legislative day has come and gone and the review process kicks in, that we'll be seeing more resolutions introduced over the next few weeks. I would expect that.
Mr. DELAHUNT. So you anticipate more utilization of the----
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Mr. JOHNSON. Potentially. But because there's no expedited procedure in the House it's hard to predict that extent to which they will come to the full House's attention.
Mr. DELAHUNT. And just walk me through the process itself. This comes to your office--to your office via the Office of the Speaker and then they're distributed to the appropriate committees of jurisdiction?
Mr. JOHNSON. The regulations themselves? Or the resolutions of disapproval?
Mr. DELAHUNT. No, the regulations themselves.
Mr. JOHNSON. They are delivered maybe a hundred or so each day by various messengers or by mail, and because we share space in the Speaker's formal office, we are there to refer them. And we try to make the referrals on the day received. Where that's not possible because of the lateness of the hour of referral, the referral will be made on the next day.
Mr. DELAHUNT. So then the Chair of the appropriate committee then institutes some sort of review process? What occurs at that point? They just sit in----
Mr. JOHNSON. Potentially. The document is physically transmitted to the committee of jurisdiction.
Mr. DELAHUNT. So we have 3,400 of these documents and----
Mr. JOHNSON. We have avoided a proliferation of multiple referrals. We have referred virtually every regulation to only one committee, the primary committee of legislative jurisdiction, an exception being Medicare regulations which have gone both to the Ways and Means and Commerce Committees. But the referral is to one committee then, and the physical delivery of the regulation to that committee is accomplished the next day through the bill clerk's office. But as I said in my testimony, those regulations are already on the Internet and available in printed form in the Federal Register. So----
Mr. DELAHUNT. And I think the chairman indicated that, you know, that the subcommittee would take a look at expediting and maybe making----
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Mr. JOHNSON. We haven't done a survey on the extent to which committees and subcommittees have actually read and reacted to the regulations as submitted. Most of them are--have been non-major. It might be interesting for the subcommittee to do a survey among the other committees.
Mr. DELAHUNT. Because that's my question. I mean, they would appear to be gathering dust someplace. There doesn't seem--and maybe I'm ignorant and naive--but there doesn't appear to be any particular process by which the committee of jurisdiction reviews these regulations. We're creating paperwork, I guess is the bottom line insofar as the congressional committees are concerned, if we're not reviewing them.
Mr. JOHNSON. It may be too early to tell, to predict what committee responsibilities really are going to be, especially with respect to controversial major final rules. But because there is no specific expedited procedure in the House, we are yet to see the leadership bring to the House through a committee report a joint resolution of disapproval. But I would expect there to be such during this session.
Mr. DELAHUNT. Could you just walk through for me again the procedure in a hypothetical situation where a resolution of disapproval is voted on in both branches? What then occurs?
Mr. GEKAS. The time of the gentleman has expired, but we will yield an additional 2 minutes.
Mr. JOHNSON. Thank you, Mr. Chairman.
The statute contemplates a specific review period within the Senate. I think it's after 20 days there can be a motion to discharge the committee of jurisdiction on the Senate side and then I believe there is a 10-hour debate restriction with no amendments. As I said, the statute is silent on House procedure. But the statute contemplates ultimately a passage of a joint resolution of disapproval by both Houses in the precise form. There's one expedited procedure in the statute which says that if one House has passed its own joint resolution and then receives the joint resolution of the other----
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Mr. DELAHUNT. But my point is, Mr. Johnson, and maybe I should have been more clear, is there a presentment at some point in time to the President?
Mr. JOHNSON. Oh, yes. Because it is a joint resolution of disapproval and it can be presumably vetoed if the President supports the departmental or agency position, he would presumably veto the joint resolution. And then it would require a two-thirds vote to override the veto.
Mr. DELAHUNT. OK. So it is in compliance with the Chadha decision. Obviously----
Mr. JOHNSON. It is in compliance with Chadha, yes, sir.
Mr. DELAHUNT. OK. Thank you very much. Thank you, Mr. Chairman.
Mr. GEKAS. We thank the panel for the third time and dismiss it for the third, and final time. Thank you very much for your testimony.
Mr. JOHNSON. Thank you.
Mr. GEKAS. We now invite panel 2 to the witness table which is comprised of Sally Katzen, who has been the Administrator of the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget, a position entrusted with the coordination of the regulatory function of the executive branch, since 1993. Ms. Katzen is a graduate of Smith College and the University of Michigan Law School. She has served in several positions in the public and private sector. She has testified before our subcommittee in the past.
She's joined by Jonathan Z. Cannon, the General Counsel of the EPA, who represents an Agency in the forefront of the regulatory function. A summa cum laude graduate of Williams College, Mr. Cannon received his law degree from the University of Pennsylvania. After 13 years as an attorney and partner with the law firm of Beveridge & Diamond in Washington, DC, he has served with the EPA for some 10 years before becoming its General Counsel in 1995.
At Mr. Cannon's side is Nancy McFadden, the General Counsel of the Department of Transportation. She has served in that position since 1995 and, as such, is responsible for the supervision of some 600 lawyers. Prior to her appointment, she served as the principal Deputy Associate Attorney General at the Department of Justice. She was also a senior member of President Clinton's election campaign team in 1992. Ms. McFadden was an attorney with the law firm of O'Melveny & Myers. A native of San Jose, CA, she graduated from San Jose University and the University of Virginia Law School.
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We will entertain the testimony in the order that we announced the witnesses. We will ask that you limit your oral testimony to 5 minutes. Your written statement will be accepted for the record without objection.
Ms. Katzen.
STATEMENT OF SALLY KATZEN, ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET
Ms. KATZEN. Thank you very much, Mr. Chairman, and members of the subcommittee. It's a pleasure to be here this afternoon to discuss congressional review of agency rulemaking. I would first like to join the others who have congratulated you and thanked you for conducting this hearing.
We have before us an act which creates an oversight of the executive branch agencies, and I think a hearing to see how the oversight is working is an eminently sound idea. Again, I thank you for your leadership in this area.
The law itself has the strong support of the President. By passing this law, Congress acknowledged its part, and assumed more responsibility for its continuing role, in the regulatory system. This is something which the administration whole-heartedly supported.
For too long Congress has passed a law and then passed the buck, taking credit for mandating clean air, clean water, and safe workplaces, only to question or even criticize an agency for a rule that implements that law. With this new act, Congress will see what it has authorized and it can speak to any regulatory action that it thinks is not true to its intent.
In my written testimony I've described the provisions of the law and what it is that we have done since passage of the law. I would like to spend just a minute talking about the Office of Information and Regulatory Affairs. We thought it imperative that the law be implemented quickly and effectively. It took effect on March 29, 1996, the day it was signed. This is unusual for most laws. There's normally some period of time to prepare to implement them. This law was, by its terms, effective immediately.
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We thought we had to move quickly. On April 2, I sent a memorandum to the heads of all agencies outlining the provisions of the new legislation generally. I specifically focused on the designation of ''major'' vs. ''nonmajor'' rules, because the Congress gave my office responsibility for determining what is or is not a ''major'' rule.
We also tried to assist the agencies in providing the addresses to which they should send the rules. Two weeks later I received a flurry of phone calls from those addressees who were beginning to receive rules saying, ''No, no, no, you're sending them to the wrong place.'' So we sent out a new memorandum with new addresses. We were also asked at that time to ensure that all transmittals came with a transmittal letter that contained certain information, and I so advised the agencies.
At the same time, agency staff was calling my staff with a series of questions asking what to do to implement the law. And so we drafted a document entitled ''Frequently Asked Questions,'' which we gave to my staff to answer these questions and to provide to agencies' staff. I've attached all of these written memoranda and documents to my written testimony to be part of the record.
In addition, we had one interesting, new issue presented. As I noted, under the statute it is my office which is to determine whether or not a regulation is ''major.'' But, this law applies not just to executive branch agencies whose rules we generally review under Executive Order 12866, but also to independent regulatory agencies whose rules we do not review under Executive Order 12866. Nonetheless, we would be required to determine whether those rules, which we do not review, are ''major.''
I convened a meeting of senior regulatory officials from the independent regulatory agencies to discuss how best to coordinate this process. I found great responsiveness and enthusiasm for working together collegially, and we developed a process for these agencies to send us summaries of their upcoming final regulations to help decide whether or not their rules were major. Initially, there was a flurry of staff discussions, but the process for the independents has now really become quite routine.
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One year later--almost 1 year later--we heard this morning that, according to GAO's figures, Congress and GAO have received 58 major final rules and 3,609 nonmajor final rules--an average of over 75 rules a week. This indicates to me that the agencies are certainly trying to comply in sending their rules to the Congress and that the authorizing committees are receiving, if not reviewing, a lot of rules.
Notwithstanding the large number of rules that have been transmitted to the Congress, we have very little experience with the detailed provisions of the statute. Over the last year, Members have, to my knowledge, introduced very few resolutions of disapproval. Neither House has passed any motion to disapprove a rule. Nor has any such motion been enacted.
We do know that compliance with this law is not cost-free. You're hearing today from two rulemaking agencies about the cost of carrying out their responsibilities under the statute, and their experience is similar to that of other agencies.
In addition, you heard about the cost of time and resources at GAO and within the Congress for staff to process the submissions and for the committees to receive and review them. The authorizing committees may want to reconsider at some point whether the benefits of receiving all of these rules are worth the cost to those who have to submit, process, and report on them.
There are other suggestions for legislative amendments that we have heard. As we gain experience, testing our interpretation of this law and coming to grips with the expected or unexpected effects that may arise from it, I would welcome the opportunity to work with your committee staff, the relevant staffs on the Senate side, and with the people at GAO, to ensure that this law operates efficiently and effectively to achieve the objectives that I believe we all share. I thank you very much for the opportunity to testify and will answer any questions.
[The prepared statement of Ms. Katzen follows:]
PREPARED STATEMENT OF SALLY KATZEN, ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET
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Good morning, Mr. Chairman and members of this Subcommittee. It is a pleasure to be here today to discuss ''Congressional Review of Agency Rulemaking.''(see footnote 1)
This law had the strong support of the President. It was signed on March 29, 1996, almost one year ago. By passing this law, Congress acknowledged and assumed more responsibility for its continuing role in the regulatory system. For too long, Congress has passed a law and then passed the buck, taking credit for mandating clean air, or a safe workplace, only to question or even criticize the agency rule that implements the law.
I welcome the opportunity to discuss what we have done during this past year, and to hear the experience of other regulatory agencies, GAO, and Congress in administering the law.
1. WHAT DOES THE STATUTE REQUIRE?
To help focus our discussion, let me first summarize this legislation. In general terms, agencies are to send a copy of each new final rule (and certain analyses that they may undertake related to the rule) to both Houses of Congress (for transmittal to the appropriate authorizing Committees) and to the General Accounting Office (GAO) before the rule can take effect.
When an agency sends a rule to Congress and GAO, the agency is to indicate whether the rule is ''major'' or not. The statute directs OMB's Office of Information and Regulatory Affairs (OIRA) to find whether a rule meets the statutory definition of ''major''--that is, whether the rule is likely to result in an annual effect on the economy of over $100,000,000; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises.
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The designation of a rule as ''major'' has several consequences. Unless exempted, a major rule may not take effect until 60 calendar days after it has been submitted to Congress. In addition, GAO is to provide a report to the agency's authorizing Committee on each major rule. Whether or not a rule is designated as ''major,'' Congress has 60 legislative days during which it may use expedited procedures to disapprove the rule.
I want to stress that there are two distinct time periods in the statute--(1) the delay in effective date for ''major'' rules, and (2) the Congressional review period, during which the expedited review procedures are available.
(1) Effective Date. ''Major'' rules can only take effect, with certain exceptions, 60 calendar days after submission to Congress and GAO. ''Non-major'' rules take effect as they normally do after submission. All of the rules that were submitted to Congress during the past year went into effect according to these effective date provisions.
(2) Congressional Review Period. If, within a prescribed time period, a Member introduces a joint resolution of disapproval, then that joint resolution is subject to certain expedited procedures for consideration in Congress. All rules (both major and non-major) are subject to this Congressional review for 60 legislative days, which, depending on when Congress is or is not in session, is a time period that can extend to over one-and-a-half years. During this past year, all the rules issued by the agencies went into effect before the expiration of the Congressional review period.
2. WHAT DID OIRA DO WHEN THE STATUTE TOOK EFFECT?
The ''Congressional Review of Agency Rulemaking'' took effect immediately on the day the statute was signed into law--on Friday, March 29, 1996. Most agency staff knew little about it. To help them prepare quickly, we had to move quickly. On Tuesday, April 2, 1996, I sent an OMB memorandum (M—96—19) to the heads of all agencies outlining the provisions of the new legislation and discussing the definition of ''major.'' Based on advice my staff received from Congressional staff, I included the address of the House Clerk and the Secretary of the Senate as the place to which agencies should send their final rules.
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Two weeks later, after agencies had begun to send their final rules to these officials, I received telephone calls asking that final rules go to the Speaker of the House and the President of the Senate, and that they should be transmitted with a cover letter providing certain information. On April 19, 1996, I sent another memo to the heads of Federal agencies, providing these new addresses and suggested content for the cover letter.
Meanwhile, as Chair of the Regulatory Working Group established under Executive Order No. 12866, I stressed to agency Regulatory Policy Officers the importance of moving quickly to implement this new law. During this time, OIRA staff were receiving a variety of questions from agency staff about what they should do under the new statute. We then prepared a document entitled ''Frequently Asked Questions,'' which was distributed to OIRA staff to answer these questions and to share with agency staff if they so desired. I have attached a copy of each of these memoranda at the end of this written statement.
In addition, because OIRA does not review the regulations issued by the independent regulatory agencies under Executive Order 12866, we had to design a process for us to determine whether the final rule of an independent regulatory agency is ''major'' within the meaning of the statute. Therefore, we invited regulatory contacts from the independent regulatory agencies (those not subject to Executive Order 12866 review) to a meeting on April 12, 1996, to discuss my April 2 memorandum and how they could best coordinate with us on our determination of ''major.'' After this meeting, the independent regulatory agencies began sending OIRA summaries of their upcoming final regulations for us to decide whether or not these rules were ''major.'' Initially, there was a flurry of staff discussions; this process for the ''independents'' has now become routine.
For those agencies whose regulations are subject to review under Executive Order 12866, I asked OIRA staff to ensure that the agencies understood which rules were ''major''. The term, as defined in the statute, is similar, but not identical, to the category covered under section 3(f)(1) of Executive Order 12866 for ''economically significant'' rules. The statutory definition of ''major'' was taken from a predecessor Order, Executive Order 12291 (signed February 17, 1981, and revoked September 30, 1993). Accordingly, OIRA staff were told to use the same interpretation that they had relied on when carrying out their regulatory reviews under Executive Order 12291.
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3. WHERE ARE WE NOW?
As of February 28, 1997, GAO informs us that it had received 58 major rules and 3,609 non-major final rules--an average of over 75 rules a week. This indicates to me that the agencies are complying with the statute and that the authorizing Committees are receiving a lot of rules.
Notwithstanding the large number of rules being transmitted to Congress, we have had very little experience with the detailed provisions of the statute. Over the last year, Members have, to my knowledge, introduced very few resolutions of disapproval; neither House has passed any motion to disapprove a rule; nor has any such motion been enacted.
We do know that compliance with this law is not cost free. You are hearing from two rulemaking agencies today about the cost of carrying out their responsibilities under this statute; others have had similar experiences. In addition, as you are hearing this morning, it takes effort and resources for Congressional staff to process the agency submissions, for the authorizing Committees to review them, and for GAO to keep track of all the submissions and prepare reports for major rules. The authorizing Committees may want to reconsider whether the benefits of receiving all final rules through these procedures are worth the cost to those who have to submit, process, and report on them.
I understand that there have been other suggestions for legislative amendments. As we gain experience with this law--testing our interpretation of it and coming to grips with the unexpected or unintended effects that may arise from it, I would welcome the opportunity to discuss any proposed legislative changes with you.
I appreciate the opportunity to testify, and welcome any questions that you may have.
INSERT OFFSET RING FOLIOS 33 TO 39 HERE
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Mr. GEKAS. The time of the witness has expired. We turn to Mr. Cannon.
STATEMENT OF JON Z. CANNON, GENERAL COUNSEL, U.S. ENVIRONMENTAL PROTECTION AGENCY
Mr. CANNON. Mr. Chairman and members of the subcommittee, good afternoon. I'm pleased to be here to discuss the regulations or the provisions of the Small Business Regulatory Enforcement Fairness Act as they relate to congressional review of Agency rules. I want to focus on what EPA has done particularly to implement the statute.
We were aware that the legislation was evolving in the early part of last year, and I believe we were as ready as we could be at the end of March when it was finally enacted to put it into effect. Ms. Katzen sent out a memorandum from her office on April 2 outlining the provisions of SBREFA for the agencies, and we were able on that same day to get out a memorandum to our staff at EPA with additional guidance for them to begin immediately to implement the statute, including the congressional review provisions.
By mid-April, we had our procedures in place and were ready, and in fact did send up our first complement of rules; about 30 rules went up in that mid-April timeframe. By mid-May, we had a data base operating where we were inputting data relevant to the rule and the rule report for every rule that was sent up, both major and nonmajor. And more recently, we issued interim guidance further addressing the submission of agency rules for the benefit of staff within the agency who are involved in that process.
EPA, as you may know, implements a number of discrete environmental statutes, most of which are regulatory either in whole or in part. So we do a fair amount of rulemaking. Because of the large volume we have and because of the different locations within the Agency where rulemaking takes place, we decided to centralize the review and processing for the congressional review provisions of SBREFA. We've located that function in the Office of Regulatory Management and Information, and we have done that in order to ensure consistency in our submittals and also timeliness in the submittals because, obviously, given the effective date provisions of the act, there is a direct impact on when our rules can become effective.
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I think the process is working pretty well from our standpoint. We receive the rule in the Office of Regulatory Management and Information; it is reviewed; the report required under section 801 is filled out. That data is also entered in the data base and then the rule is sent up simultaneously to the folks on the Hill who receive it, as well as to the Federal Register. That's so we know that the rule has been submitted to the Hill before it is actually published in the Federal Register, so we can use the Federal Register publication date as the latter of those two dates for purposes of determining the effective date of the rule.
Obviously, this process imposes some new costs on our agency. We have devoted additional resources to reviewing rules and preparing them for submission to the Hill, as well as to maintaining our tracking and recordkeeping systems. At the same time, however, as we approach the first anniversary of this statute, I think the implementation of these provisions is becoming well integrated into our agency procedures and our rulemaking procedures.
We have submitted 460 final rules to the Congress for review under these provisions and six of those were major rules. Six of the 58 total Government rules were EPA rules falling in the ''major'' category.
Our experience working with the Parliamentarians' Offices in both the House and the Senate has been very positive. We had, obviously, some issues to work through at the beginning, but I think we've got those ironed out and that process is working smoothly, at least from our standpoint. And I think we've also developed a productive and positive working relationship with the very professional staff at GAO. I appreciate the opportunity to testify before you and would be happy to answer any questions that you may have.
[The prepared statement of Mr. Cannon follows:]
PREPARED STATEMENT OF JON CANNON, GENERAL COUNSEL, U.S. ENVIRONMENTAL PROTECTION AGENCY
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Good morning, Mr. Chairman, Congressman Nadler, and Members of the Subcommittee. I am Jon Cannon, General Counsel for the U.S. Environmental Protection Agency (EPA). I am pleased to be here to discuss EPA's activities in regard to Congressional Review of Agency Rulemaking, and in particular, to discuss the Agency's implementation of the Congressional Review provisions found in Subtitle E of the Small Business Regulatory Enforcement Fairness Act (SBREFA).
Before I share with you some highlights of our initial implementation efforts, please allow me to discuss the major provisions of Subtitle E of SBREFA to frame our discussion. In enacting the Congressional Review provisions of SBREFA, Congress created procedures for reviewing and potentially disapproving final rules issued by federal agencies. Of course, Congress has always had authority to pass legislation rescinding an agency's rule, but now with SBREFA, a member of Congress can introduce a joint resolution to disapprove a particular rule within a specified period of time and have that joint resolution considered using expedited legislative procedures. Generally, for any rule meeting SBREFA's definition of ''major rule,'' Congress has 60 days to act before the rule can take effect. SBREFA thus makes it easier for Congress to more oversee the executive branch implementation of the laws Congress enacted.
Before a rule can take effect, the agency issuing the rule must submit to each House of Congress and to the Comptroller General of the United States a rule report containing a copy of the rule, a concise general statement relating to the rule, including whether the rule is a ''major rule,'' and the proposed effective date of the rule. Generally, a major rule cannot take effect until 60 days after it is published in the Federal Register or submitted to Congress.
A ''major rule'' is a rule that the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB) finds has resulted in or is likely to result in an annual effect on the economy of $100 million or more, a major increase in costs or prices, or a significant adverse effect on competition. For any major rule, the Comptroller General, who heads the General Accounting Office (GAO), must provide a report on the rule to the relevant committees of Congress within 15 days of the rule's publication in the Federal Register or its receipt by Congress, whichever is later. The agency issuing the major rule is directed to cooperate with the GAO by providing information relevant to preparation of the GAO report.
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EPA has implemented all aspects of SBREFA in a serious and deliberate fashion. During the first months of 1996, we were closely following the development of this legislation in Congress. When passage looked imminent on March 28, 1996, (just a day before the President signed SBREFA into law) our Regulatory Policy Council met and initiated discussions at the highest levels in the Agency to lay the groundwork to assure rapid and full implementation of the Act. This advance work made it possible for me to send a memorandum on April 2, to all senior managers in the Agency outlining the effects of SBREFA on Agency rulemaking.
By April 16, 1996, EPA had developed procedures to comply with the Congressional Review provisions and distributed preliminary guidance to regulatory management staff throughout the Agency. On April 19, 1996, we made our first submission of 30 rules for Congressional Review. And by mid-May, the Agency had in place a database for tracking rules submitted for Congressional Review. More recently, we issued interim guidance further addressing submission of Agency rules for Congressional Review.
To give you a better sense of what Congressional Review implementation entails, I want to share with you some of the particulars of our procedures. Because of EPA's large volume of rulemakings, we immediately identified the need to centralize both our submittal of rules to Congress and our tracking of those rules. We've located this function in the Office of Regulatory Management and Information (ORMI). This office assures consistency among the submittals from the various EPA program offices and regions and arranges for timely submittal of all our final rules to the appropriate congressional offices.
Prior to signature, final rules are carefully reviewed to assure that they comply with applicable laws, including SBREFA. When the rule completes internal EPA review and, if subject to E.O. 12866, is cleared by OIRA, it comes to our Regulatory Management Division in ORMI where they assure that the required ''report'' is complete and accurate. The rule is then entered into our tracking system and dispatched by messenger to the House, Senate and the GAO. As a matter of policy, we do not send our rules for publication in the Federal Register until they have. been approved and dispatched for congressional review. Generally, our volume is such that we require a daily messenger to deliver our rules to the three required offices. The messenger obtains a receipt from each office which is then returned to the Agency for our records.
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Obviously, implementation of Congressional Review imposes new burdens on rulemaking agencies. It has and will continue to require agencies to spend additional resources to prepare and submit rules for Congressional Review and to maintain tracking and record keeping systems. At the same time, I am pleased to report that as we approach the anniversary date of the statute, implementation of the Congressional Review provisions of SBREFA is well integrated into EPA's regulation development process. In terms of actual numbers of rules submitted, as of February 28, 1997, EPA had submitted 460 final rules for Congressional Review and of those six were ''major rules.''
I would like to add that our experience in working with the Parliamentarian's Offices in both the House and Senate has been very positive. While there was some initial confusion about procedures on the part of the agencies and the Parliamentarian's Offices, it was worked out in relatively short order and on a cooperative basis. Now that a process is in place and is part of the routine, we believe that the congressional review procedures under SBREFA are working well. I might also add that we have also established a productive and positive working relationship with the very busy staff at the GAO.
I appreciate the opportunity to testify and would be happy to answer any questions you may have.
Mr. GEKAS. We thank the witness and we will turn to Ms. McFadden.
STATEMENT OF NANCY McFADDEN, GENERAL COUNSEL, DEPARTMENT OF TRANSPORTATION
Ms. MCFADDEN. Thank you, Mr. Chairman, Congressman Delahunt. It is a pleasure to join my colleagues here today to testify on the congressional review of agency rulemaking provisions in the Small Business Regulatory Enforcement Fairness Act of 1996. And I would like to join with others who have commended this committee's early focus on finding out how these provisions are really working. Congress should play a significant role in overseeing the implementation of the regulatory responsibilities that you grant to the executive branch. And it's also important that you ensure that whatever processes are set up are efficient, as well as effective, especially at a time when we are all trying to downsize the Federal Government.
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I'd like to focus on our experience at the Department of Transportation with these provisions, and it might be helpful if I mention a few points about the Department of Transportation and its regulatory responsibilities. We are made up of nine operating administrations, like the Federal Aviation Administration, as well as the Bureau of Transportation Statistics and the Office of the Secretary. Our statutory responsibilities are quite broad and cover the need to issue regulations across a broad range of activities, from aircraft certification to hazardous materials transportation, from fuel economy standards for motor vehicles to oil spill response plans, from transportation for the disabled to changing communities from one time zone to another. Although some of our rules are quite significant, many simply establish rules of the road that are necessary so that one operator knows what to expect from another.
In this regard, it is worth noting--and Mr. Murphy talked about this a little bit--we divide our rules into two basic categories for purposes of review both within the Department, as well as the Office of Management and Budget: ''significant'' and ''nonsignificant.'' Our nonsignificant rules have a large subcategory that's called routine and frequent, which you were questioning about, Mr. Chairman.
This category includes rules that do such things as adjust the approach path for landing on an airport runway or change the times for opening a drawbridge over a particular river. We issue about three to four thousand of these routine and frequent rules each year.
Now, all of these routine and frequent rules, as well as the other nonsignificant and significant rules that we issue, are required to be submitted under the congressional review provisions. During the first 11 months of our experience under the statute, we at the Department of Transportation submitted 977 rules. Of these, over 75 percent fit in to our ''routine and frequent'' category. Because of the large number of documents, we obviously need a wellcontrolled program to ensure that they are all submitted and so that we can track any congressional action that might be taken.
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As a result, we created a computer data base to track each rule and generate a standard form that contains the information that we are required to submit, along with a copy of the rule and its supporting documents. A copy of that standard form is attached to my statement. A separate form is completed for each rule document. And, in addition, a separate cover letter is signed by the General Counsel and is used for each group of rules that is delivered to each addressee each day. We use a messenger for this purpose.
The process, from our standpoint, is working relatively smoothly. At the same time, as a large rulemaking department with responsibilities spread over many offices and throughout the country, we have to continuously monitor our efforts. And, as Ms. Katzen pointed out, it's not a cost-free process. We are providing about a thousand pages a week. So expenditures for copying, messenger services, as well as the staff time to prepare, review, and manage the paper flow, must all be taken into account.
Now, it's worth noting--and Mr. Murphy discussed this a bit--our discussions with GAO staff about their efforts to develop a standard form for the submission of rules to them and to the Congress to enable GAO to keep the information in a computer data base. DOT was part of an informal interagency group that has worked with, and is continuing to work with, GAO on this issue. We not only appreciate the opportunity that GAO provided to us to work with them, but we also appreciate the many hours that GAO staff has spent discussing with us the potential problems or concerns we have.
We do agree that GAO needs to develop a good database and we understand the need for requiring information from us, but we would have, and we would note for the committee, that we would have serious concerns about having to provide anything beyond the type of factual information that we are providing in our current form. We would be especially concerned if the form were to require information that entailed legal judgments, necessitating review of all of these forms by attorneys. Considering the large number of documents that we are currently submitting, the extra time involved in filling in extra information on a form or, more importantly, in having to have the form reviewed by others, could substantially increase the cost imposed on us.
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In closing, Mr. Chairman and members of the subcommittee, let me say that, as I said, from our standpoint, the process is working smoothly. We have had one major rule that we issued during the first 11 months under the Congressional Review provisions. We had very good give and take with GAO over that major rule. No joint resolution was introduced concerning this rule, nor any other rule, from what we know. And we think that for now we are gaining some experience in how this process is working. We want you to know that it is not costfree, but we do believe that it provides Congress with a valuable opportunity to ensure that the objectives that you had intended when you adopt authorizing legislation are being met. I would welcome any questions that you might have.
[The prepared statement of Ms. McFadden follows:]
PREPARED STATEMENT OF NANCY MCFADDEN, GENERAL COUNSEL, DEPARTMENT OF TRANSPORTATION
Mr. Chairman and members of the committee, my name is Nancy McFadden. I am the General Counsel at the Department of Transportation (DOT), and it is a pleasure to be here today to testify on the Congressional review of agency rulemaking provisions in Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996.
Although these provisions have not yet been in place a full year, we are pleased to see that this committee decided to hold a hearing to find out how they are working. We do not disagree with the notion that the Congress should play a significant role in overseeing the implementation of the regulatory responsibilities that it grants to the executive branch, but it is also important that you ensure that whatever processes are set up are efficient as well as effective, especially at a time when we are downsizing the federal government.
BACKGROUND
Before I get into what we are doing to comply with the Congressional review provisions, it might be helpful if I mention a few important points about the Department of Transportation and its regulatory responsibilities. We are made of nine operating administrations, the Bureau of Transportation Statistics and the Office of the Secretary. (For the purposes of today's hearing, it is important to note that we do not oversee the regulatory responsibilities of the Surface Transportation Board and the information I will provide does not cover any of the Board's responsibilities for compliance with the Congressional review provisions.) Our statutory responsibilities are quite broad and cover the need to issue regulations across a broad range of activities from aircraft certification to hazardous materials transportation, from fuel economy standards for motor vehicles to oil spill response plans, from transportation for the disabled to changing communities from one time zone to another. Although some of our rules are quite significant, many simply establish rules of the road that are necessary so that one operator knows what to expect from another.
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In that regard, it is worth noting that we divide our rules into two basic categories for purposes of review within both the department as well as at the Office of Management and Budget: significant and nonsignificant. Our nonsignificant rules have a large subcategory called routine and frequent. This subcategory includes rules that do such things as adjust the approach path for landing on an airport runway or change the times for opening a drawbridge over a particular river. We issue about three to four thousand of these routine and frequent rules each year; they are so numerous that, as they are gathered together for publication, many of them may be included in one document. (For example, during the last nine months of 1996, we published 46 documents containing a total of 1,376 different standard instrument approach rules for different airports.)
COMPLIANCE WITH THE CONGRESSIONAL REVIEW PROVISIONS
All of these rules, as well as the other nonsignificant and significant rules, are required to be submitted under the Congressional review provisions; we submitted 977 rules during the first 11 months under the statute or an average of about 20 documents per week. Of these, over 75 percent fit into our routine and frequent category. Because of the large number of documents, we need a well-controlled program to ensure not only that they are all submitted but also that we can track any action that might be taken in the Congress.
As a result, we created a computer data base to track each rule and generate a standard form that contains the information that we are required to submit along with a copy of the rule and its supporting documents under section 801(a)(1). A copy of the standard form that we are using is attached to my statement. A separate form is completed for each rule document. In addition, a separate cover letter signed by the General Counsel is used for each group of rules delivered to each addressee each day. To ensure that there are no mistakes made about when a particular document is delivered to each of the addressees, we decided to have the documents delivered by messenger twice a week; because the statute prohibits a rule from taking effect before it is delivered to the Congress and GAO, and because we may have a need to put a rule into effect quickly for safety or other reasons, we need to know with certainty when the rule is received. We also require that the messenger return to us a copy of the standard report form date stamped by the General Accounting Office to verify delivery. Although not a major expenditure compared to some programs, because the documents have to be delivered to three addresses, we estimate that the messenger service will cost us over $3,000 per year. In addition, because some parts of the department are located in buildings a good distance away from the headquarters building, there is some time and expense involved in having their documents delivered to the headquarters building for pickup. There is also some time and expense involved in making the copies for each of the houses of Congress and the GAO; we are providing about 1,000 pages per week in total.
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Although we had some technical problems initially over such things as whether separate cover letters were required for each rule, the process is working relatively smoothly now. At the same time, as a large rulemaking department, with responsibilities spread over many offices and throughout the country, we have to continuously monitor our efforts to ensure that we properly comply with the statute. Although we would not describe the statutory mandate as a difficult one to comply with, it involves a large number of documents and leaves little room for error; the process that has been established to handle it is imposing a cost on us.
GOVERNMENT-WIDE STANDARD FORM
In this regard, it is worth noting our discussions with GAO staff about their efforts to develop a standard form for the submission of rules to them and the Congress to enable GAO to keep the information in a computer data base. DOT was part of an informal interagency group that worked with GAO on this issue. We not only appreciated the opportunity that GAO provided to us to work with them on this form but the many hours GAO staff spent with us discussing the potential problems or concerns that were presented to us by some of the options. While we understand GAO's need to develop a good data base because of the large number of rules that it is receiving, we would have serious concerns about having to provide anything beyond the type of factual information that we are providing in our current form. We would be especially concerned if the form were to require information that entailed legal judgments necessitating review of all these forms by attorneys. Considering the large number of documents that we are submitting, the extra time involved in filling in extra information on a form or, more importantly, in having to have the forte reviewed by others could -substantially increase the cost imposed on us.
REVIEW OF RULES
Our experience with GAO was also positive with respect to the one major rule that we issued during the first eleven months under the Congressional review provisions. This rule involved corporate average fuel economy standards for light trucks. During GAO's preparation of its report for the Congress, GAO staff talked to DOT staff on a number of occasions in an effort to make sure they fully understood why we wrote the rule the way we did. We were pleased with the opportunity that we were provided by GAO and, although we did not agree with everything they said in their report, overall we thought they made every effort to be fair and objective. Nothing further happened after the GAO report was submitted, and no joint resolution was introduced concerning this rule. We should get more experience with respect to these provisions in the near future, since we have six rulemakings pending that are potentially major actions.
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With respect to our non-major rules, to the best of our knowledge, no joint resolutions have been introduced or any other action taken with respect to any of those that we have submitted.
CONCLUSION
I appreciate the opportunity to testify today on this important legislation. It provides Congress with a valuable opportunity to ensure that the objectives it intended when it adopted authorizing legislation are being met. I welcome any questions that you may have.
INSERT OFFSET RING FOLIO 40 HERE
Mr. GEKAS. Yes, we thank the witnesses.
You heard my previous concern about how we determine minor and major and how, if ever, minor is elevated to major if, indeed, that would be a requirement. Now, the Department of Transportation, I take it, starts the process by determining which are routine types of regulations, ones that occur and reoccur on a regular basis, year after year, congressional term after congressional term. I suppose they are relegated to ''nonsignificant'' or ''insignificant'' or ''minor,'' is that what Ms. McFadden was saying?
Ms. MCFADDEN. ''Nonsignificant rules,'' yes, sir.
Mr. GEKAS. Well, is that equated to what we----
Ms. MCFADDEN. But nonetheless----
Mr. GEKAS [continuing]. Have been terming as minor? Are these the same thing?
Ms. KATZEN. If I may comment--under the statute, my office is the one that decides.
Mr. GEKAS. Yes.
Ms. KATZEN. We obviously work with the agencies and use their initial cut as the basis for our decisions. For the most part, it is very easy. I would like to borrow Justice Stewart's comment about pornography--that he cannot define it, but he knows it when he sees it. So, too, with a ''major'' versus ''nonmajor'' rule.
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She gave you the example of opening and closing drawbridges. During the break I called my office. Other routine and frequent regulations that come out of the Federal Government almost daily include listing over-the-counter drug approvals, listing of color additives that can be added to our food, flood insurance listings--that happens to be very important this week, but nonetheless, it's fairly routine. USDA gives us disease status on various animals. Treasury designates viticulture areas for wine.
Mr. GEKAS. OK. We get the point----
Ms. KATZEN. On these it's clear, and I don't think there has ever been any dispute as to what is a major or minor rule.
Mr. GEKAS. What I'm getting at is--and maybe I'm anticipating some big controversy that may never turn out to be so--but if the Department of Transportation considers it insignificant and you confirm it as being minor, then it never reaches the ''major'' category which would spring this law into action.
Ms. KATZEN. Well, it would not reach the ''major'' category, but it would be covered by this law, for even nonmajor rules--that's the 3,500----
Mr. GEKAS. We know, that's----
Ms. KATZEN [continuing]. Will go to the authorizing committee, and if the authorizing committee takes a look at it and says ''Were you circumventing our will?'' they still have all the rights and responsibilities provided by this statute and the legislative process generally.
Mr. GEKAS. That was my original point, that the resolutions for disapproval can reach a so-called ''minor'' rule which Members of Congress may deem were inappropriately labeled at that time.
Ms. MCFADDEN. Exactly.
Ms. KATZEN. Exactly.
Mr. GEKAS. We have an example of that already on the Clean Air Act and the standards controversy in which we find ourselves in disagreement with EPA. At one point the EPA seemed to have said that the economic impact on a substantial number of small entities--which triggers the reg-flex review--would not be affected. That was an internal decision made by EPA. Yet later, in the correspondence of which we have copies on the same subject, there was a retrenchment, so to speak, by EPA in which it acknowledges, indeed, that the small entities are affected--a substantial number of us would be affected--so that now remedy has been applied. Is that correct? Just to give us an idea of how the internal function goes in labeling for the purposes of complying with the law.
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Mr. CANNON. I think--this may be a longer answer than the chairman would wish--but I think there are a couple of issues involved in this. The Agency has stated that the rulemaking involving the National Ambient Air Quality Standards which is now in the proposed stage, if it were to go----
Mr. GEKAS. In the what stage?
Mr. CANNON. It's in the proposed stage.
Mr. GEKAS. Yes.
Mr. CANNON. That is not yet a final rule and may either not be a final rule or certainly not a final rule in its present form. So the agency is currently deliberating on what to do in response to comments that it's still receiving in connection with that proposal. But we have said that we would anticipate that that final standard, assuming it is adopted, would be a rule, and I'm assuming a major rule that would go up to the Hill for review. That is different from the analysis that we have done on the issue of whether a regulatory flexibility analysis is required under the Reg-Flex Act. That determination was based on our application of a legal standard: ''significant economic impact on a substantial number of small entities.''
And in researching that question within the context of the Regulatory Flexibility Act, we determined that because the NAAQS--sorry, I'm using an acronym--because the standards themselves do not apply requirements to small entities or other entities, that there was no impact of a kind that could be taken into account or remedied through the kinds of analysis that would be done through the regulatory flexibility analysis. And, therefore, we determined that the regulatory flexibility analysis requirement should not apply. But that is distinct from whether we would send the rule up to you for review.
Mr. GEKAS. There will be no question but that the final rule on the ambient standards will reach the heights of a ''major'' rule, is that correct?
Mr. CANNON. I think that would be clear, sir.
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Mr. GEKAS. I see. The time of the Chair has expired in this first round. We'll yield to the gentleman from Massachusetts, if he has any questions.
Mr. DELAHUNT. Thank you, Mr. Chairman.
It would appear that this act has also increased paperwork considerably in terms of both the Congress and the executive--and the executive branch. Maybe you can help me, Ms. Katzen, have you been able to estimate the cost to the taxpayers of this Nation--in terms of the effect and impact of this act?
Ms. KATZEN. We have not. I think there would be two types of costs that would be involved. One would be the type that the individual agencies might be able to speak to in terms of the time it takes to provide the additional information, the paper, the messenger--the mechanical implementation of the act.
There is also a cost in terms of delay of effective date. One of the issues that was addressed by Mr. Murphy this morning that I'd like to come back to at some point with the committee's staff, if not during this hearing, is what to do under section 808(2). He has read that provision to mean that major rules cannot take effect for 60 days where there has already been notice and comment. That's his interpretation of the provision. I have a very different view of how that provision should be interpreted. In either event, there can be many instances where a rule that is very much in the public interest and, indeed, is noncontroversial, may not take effect for a period of time. That would be an indirect cost.
Mr. DELAHUNT. Such as changing the approach of an airline to Logan Airport in Boston, for example.
Ms. KATZEN. That, I hope, would be considered a nonmajor rule.
Mr. DELAHUNT. Is that a major rule?
Ms. KATZEN. No, that is a nonmajor rule. [Laughter.]
Mr. DELAHUNT. By the way, was the polar bear trophy--was that a major rule?
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Ms. KATZEN. That would be a nonmajor rule, also----
Mr. DELAHUNT. That was a major rule?
Ms. KATZEN [continuing]. And shows that the chairman was correct in saying that, in fact, even if it's not major, it is subject to the review provisions.
What I was referring to in GAO's testimony was a reference to an HCFA rule in which hospitals that wanted to receive increased reimbursement had to go through quite bizarre machinations to have that rule take effect, so that a decision that Congress had made could take effect in the timeframe that Congress intended.
So there are some unintended consequences here, and all I wish to do is to say that we think it appropriate to work with committee staff, here and in the Senate, and with GAO, to see if we can work through these issues.
Mr. DELAHUNT. What kind of feedback have you received from either committee Chair or ranking members in terms of the receipt of these various rules?
Ms. KATZEN. Scant little attention to date.
Mr. DELAHUNT. Scant? Scant?
Ms. KATZEN. Scant--little.
Mr. DELAHUNT. OK, thank you, Ms. Katzen.
If I could direct one question to both--it would be the same question--to Mr. Cannon and Ms. McFadden. What's the additional cost, if you have one or if you could estimate, to the taxpayers of the United States in terms of, particularly, these minor rules, these messenger costs, and the additional resources that have been allocated? Do you have a----
Mr. CANNON. We've done some quick estimates, and I think our calculation is that for the additional processing that's required for all of the rules, to put them in shape to send up to the Hill, we're requiring two to three additional--what we call FTE's, which are employee positions--and that the messenger costs, themselves, probably are in the range of $2,500 to $3,000 a year. We're sending messengers about 4 days a week, I think, on average, to get the rules around in a timely fashion.
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Mr. DELAHUNT. Ms. McFadden.
Ms. MCFADDEN. I don't have specific numbers for you, Congressman, but our numbers would be roughly the same as for EPA, messenger costs of about $3,000 to $3,500.
Mr. DELAHUNT. At least 1,000 more pages of paperwork somewhere in these buildings.
Ms. MCFADDEN. Exactly, exactly.
Mr. DELAHUNT. What kind of feedback----
Ms. MCFADDEN [continuing]. And additional staff, probably along the same lines as EPA, probably about two FTE's.
Mr. DELAHUNT. What kind of feedback--and let me just direct this, again, to both of you. What kind of feedback have you received from either the Chair or the ranking member or members of the committee of the particular committees of jurisdiction?
Ms. MCFADDEN. I would have to join with Ms. Katzen in saying, ''Little.''
Mr. DELAHUNT. Mr. Cannon.
Mr. CANNON. Well, certainly to my knowledge, little.
Mr. GEKAS. Would the gentleman yield for a moment?
Mr. DELAHUNT. Certainly.
Mr. GEKAS. To follow up on the question posed about the additional paperwork, it seems to me that we're talking about the current paperwork, plus one. That is, you have to promulgate a rule; you send it to wherever you have to send it to be published in the Federal Register and then you make a copy and send it to the Congress.
Ms. KATZEN. There are copies both----
Mr. GEKAS. I mean----
Ms. KATZEN. Excuse me, Mr. Chairman.
Mr. GEKAS [continuing]. We're going to send four extra messengers for that extra copy? I know I'm oversimplifying it, and I knew you would have an answer, Sally. [Laughter.] Go ahead; proceed.
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Ms. KATZEN. Thank you. Copies are sent to the House side, to the Senate side, and to GAO--that's three--and each of these, for a major rule, is to be accompanied with the cost-benefit analysis that was prepared in connection with it, any unfunded mandate analysis that was prepared in connection with it, and documentation, if any, of implementation of other Executive order or statutory requirement.
In some of these instances, we're talking about very large documents. The requirement to send all accompanying analyses applies, actually, to all rules, not just major rules, although that's where you'll usually find the voluminous cost-benefit analyses.
Mr. GEKAS. If the CRA had not been enacted, but only Reg-Flex, you would still have a lot of that same body of work, and the copies are what the CRA demand.
Ms. KATZEN. That is correct.
Mr. CANNON. Mr. Chairman, I would add that the CRA does require, also, a report which includes information about the rule, that, at least the way we do it, requires a separate form to be filled out based on a review of the rule by the Office of Regulatory Management and Information. So there is that additional increment of work beyond the copying.
Mr. GEKAS. I thank the witness. I'll yield an additional minute to the gentleman from Massachusetts, if he desires.
Mr. DELAHUNT. Thank you, Mr. Chairman.
I'm looking at the memorandum here, and I wondered if you could comment on this particular statement: ''The sole exception to the submission requirement is for rules relating to commercial, recreational or sustenance hunting, fishing, or camping.'' I guess my question is, why that exception?
And then it goes on to provide: ''In any rule that the agency finds that for good cause, notice and public procedure are impractical, unnecessary, or contrary to the public interest.'' Why not invoke that particular provision to reduce this--what would appear to be--rather unnecessary expenditure of resources and paperwork. We don't want this. I don't think any Member of Congress who was here in the 104th who supported this legislation would want it to be described as the ''Paperwork Enhancement Act of 1996.''
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Ms. Katzen.
Ms. KATZEN. Those provisions relate to the effective date, rather than to coverage, because even the hunting rules are subject to congressional review. That provision was put in to prevent deferring or delaying the time when those who enjoy recreational sport can go into the country or field or stream and get their hunting bag that they are entitled to.
That has a long history, actually, I'm going back to the early days of the 104th Congress before the idea of congressional review. In the early days, the House was considering a bill that called for a moratorium on all regulations. When that bill, H.R. 450, came to the floor of the House, there were certain Members who were enthusiastic hunters and fishermen who did not want to have any moratorium on a migratory bird hunting regulation because the regulations permit hunting that would otherwise be illegal.
Mr. DELAHUNT. I see.
Ms. KATZEN. The international treaties say, ''No hunting unless permitted by regulation.'' So they were quite fearful that if we had a moratorium on a migratory bird hunting regulation, you would not then be able to go out and get your daily bag. [Laughter.]
Mr. DELAHUNT. Like polar bears. [Laughter.]
Ms. KATZEN. It's a different kind of hunt. [Laughter.]
The second provision about ''good cause,'' is the issue that I had touched on very briefly in my earlier answer. I think that that is an important escape hatch where you would not want to have any delay in the effective date. The Administrative Procedure Act, itself, provides a good cause exemption, without any explanation, for agencies that believe they should not wait the requisite 30 days to put a rule into effect.
The provision you read is more constricted. It has been interpreted by GAO as not being available whenever an agency has had notice and comment. We think that that's counterproductive to the intent of the APA, which is to encourage notice and comment. Because the GAO interpretation would create a perverse incentive for agencies not to have notice and comment, I would very much like to spend some time working at the staff level to see if there's a way in which we can accommodate the different interpretations of this statute.
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Mr. DELAHUNT. Thank you.
Mr. GEKAS. The time of the gentleman has expired. The Chair now yields to the lady from Texas.
Ms. JACKSON LEE. I read your testimony, Ms. Katzen, and so I apologize for having a dual meeting going on during this time.
In the early years of my study of the Administrative Procedure Act in law school, for those who ran to that class with great enthusiasm, there was not a lot of discussion----
Mr. DELAHUNT. Where did you go to law school? [Laughter.]
Ms. JACKSON LEE. Come on down to old University of Virginia--there was not a lot of discussion about congressional review or involvement, but I do believe there is a role to be played by Congress.
However, as we looked at this in the last session, there were some proposals that caused me to have somewhat of a concern, where they were suggesting that Congress would actively and affirmatively be required to review and approve all administrative rules before they became effective.
And so, to you I would ask, is that desirable in your opinion? And does that respond to what we have a basic understanding of, of what administrative law and administrative procedure and regulations are all about?
Ms. KATZEN. I do not think it would be desirable. We have administrative law and regulatory practice because Congress is unwilling or unable to deal with the very specific, often quite technical, aspects of implementing a law. Accordingly, Congress passes a general law and looks to the agencies to implement it.
If Congress were to affirmatively involve itself with the specifics of each and every regulation, major and minor, I do not believe that Congress would have time available to do the kinds of things that Congress must do to ensure that we continue to function as a Nation. I believe that this particular law is more appropriate and, indeed, a highly desirable allocation of responsibility--in that the executive branch continues to do the work, and we send the product of our work to the Congress. If Congress finds that we have done it wrong, then they will let us know. But it would not be desirable to impose on Congress an affirmative obligation, as you said, to actually approve each and every regulation, or we'll have them looking at color additives and hunting licenses and other such things.
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Ms. JACKSON LEE. And polar bears.
Ms. KATZEN. Polar bears, too.
Mr. DELAHUNT. Polar bears.
Ms. KATZEN. Well, you'll be looking at polar bears now.
Ms. JACKSON LEE. If, as you've answered the question, as I hear you answering the question, it does not prohibit Congress in its wisdom, if it determines that there is an egregious situation that has occurred with a sort of regulatory pattern, this particular act allows Congress to go in where there is an egregious circumstance or situation. So you're not prohibited by this act just because you're not looking at every minor detail or regulation.
Ms. KATZEN. That's correct.
Ms. JACKSON LEE. That would be my understanding of your comments.
Let me ask Mr. Cannon and Ms. McFadden. In terms of man-hours or woman-hours on this question of complying with the regulatory questionnaire that GAO has proposed, the mandate, if followed, would such a mandate detract from your ability to do your principal jobs? And, as I said, how much time would this take in terms of staffing? And I want to ask the resource question as well--the staffing and the amount of money that would be needed to handle this particular procedure.
Ms. MCFADDEN. Congresswoman Jackson Lee, I don't have specifics in terms of the amount of staff time that it would take. We are in discussions with GAO. We hope that we will be able to come to some agreement with them that will provide what they need in terms of information so that they could have an adequate data base for them and for you, but at the same time not impose additional responsibilities on us in terms of creating an additional form to be filled out. Most importantly, a form that might entail legal judgments; such a form will require more lawyers to have to worry about the form that's on top of the rule that's on top of the economic analysis that's on top of the other analyses that we do.
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So we would be concerned, and we are having discussions with GAO. I'm hopeful that we'll be able to come to some kind of agreement. This is taking staff time, and it's taking staff time of lawyers in my office, an office that's being cut in terms of personnel.
But right now, it's manageable. If we add additional responsibilities and additional kinds of requirements, I think it is going to get to the point of being burdensome.
Ms. JACKSON LEE. Mr. Cannon.
Mr. CANNON. We have not done an analysis of what additional work would be required. I think our concern is similar to what Ms. McFadden has articulated, that a more detailed form, particularly one calling for more legal input, would require more effort, obviously; and that is for rules about two-thirds of which we consider to be routine rules, and, therefore, there's a real question in our mind as to what value would be added by that exercise.
Ms. JACKSON LEE. I would appreciate it if you could keep the committee continually apprised. I think that is an extremely important question that should be answered.
Mr. Chairman, I see your gavel, but let me conclude----
Mr. GEKAS. I will yield to the lady an additional 2 minutes.
Ms. JACKSON LEE. I appreciate it, Mr. Chairman.
That issue of time is key, and also difficult. I think that's important. You've raised another issue, Ms. McFadden, which I would be curious about, and that is the double interpretation, meaning that you're interpreting the sheet that's on top of the other backup materials that you have to have, and so that's an additional analysis that has to be drawn.
We have a lot of discussion around this act, and some have taken the absolute position that we need to prevent the issuance of new regulations because they cost business money. And I thought that as we were looking at the Paperwork Reduction Act and some of the good things that were done in the 104th Congress, it was to eliminate some of these regulations and to streamline.
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Since you represent different agencies, and Ms. Katzen, of course, represents a different component in the administration, has that been what you have seen, that regulations have been streamlined by way of the work that we've been doing?
Ms. KATZEN. Well we think that that constructive changes have been made. You were kind enough to call attention in your opening statement to our recent report to the President that, I think, documents 3 years of efforts to begin to change the regulatory system. That system was not built up overnight; it has taken decades to create. I think with Congress' help on specific statutes and with the administration's efforts to do sensible regulation the regulatory system is being improved.
I would, if I could, add one comment here. You said that regulations cost business money. Some regulations save----
Ms. JACKSON LEE. Some suggest that.
Ms. KATZEN [continuing]. Business money. For example, last year, DOT issued a rule that would result in the international harmonization of brake standards so that automobile parts companies that were manufacturing brakes could sell them around the world. That regulation was helpful to business and desired by business.
When the original moratorium was suggested--and I've already referenced the migratory bird-hunting concern--there was an outcry from the tax community, because the tax lawyers in companies wanted tax regulations because they provided them with clarity or certainty. These companies would not be left to the whim of an examiner. They would have written in a regulation, what was or was not permissible.
There are a number of ways in which businesses actually benefit, receive benefits from regulations: small business loans, student loans; the giving of benefits: Persian Gulf War syndrome benefits, Medicare and Medicaid benefits. Those come to you through regulations. Those do not cost businesses anything. We need to keep that as part of the perspective.
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Mr. DELAHUNT. Mr. Chairman.
Mr. GEKAS. The time of the lady has expired.
Mr. DELAHUNT. Mr. Chairman, could I indulge for 2 more minutes? Could I just follow up on that?
Mr. GEKAS. The gentleman has an additional 2 minutes.
Mr. DELAHUNT. Thank you, Mr. Chairman.
This streamlining, though, that you're referring to--and I think the import of the gentlelady's question was, is this as a result of this particular act, or was this streamlining a result of efforts and initiatives by the administration?
Ms. KATZEN. I think it was primarily efforts by the administration, strengthened and supported by work done in the Congress on various organic statutes--for example the Safe Drinking Water Act.
Mr. DELAHUNT. But there's no causal relationship between that streamlining and this particular act of Congress.
Ms. KATZEN. No specific direct effect that I can determine. But, at the same time, I would say the signal was clear that Congress was on watch, and if that has a beneficial effect, so be it. I'm pleased with that support.
Mr. DELAHUNT. But that's very difficult to measure and to gauge, which you can see.
Ms. KATZEN. Yes, sir.
Mr. DELAHUNT. Thank you, Mr. Chairman.
Mr. GEKAS. By all means. The gentleman from Massachusetts should know that the purpose of the act was not to streamline the regulatory process, but rather to give Congress an additional weapon to review the promulgation of regulations.
Mr. DELAHUNT. Thank you, Mr. Chairman, and again, I understood that. And I'm rather surprised that Congress has only utilized this on two out of 3,400 major and minor rules. But, again, being new to Congress and new to this particular area of the law, that does come as a surprise. But thank you very much, Mr. Chairman.
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Mr. GEKAS. To close the colloquy between the gentleman from Massachusetts and the Chair, I want to say that this subcommittee has been involved in the regulatory process, so the gentleman will learn that at least one subcommittee in the Congress is, perhaps, overinvolved.
Mr. DELAHUNT. I'm looking forward to that education from the chairman.
Ms. JACKSON LEE. Is this the second round of questions, Mr. Chairman?
Mr. GEKAS. This is the second round of colloquy.
Ms. JACKSON LEE. If I may have one, I would appreciate it.
Mr. GEKAS. Do you wish to engage in another question?
Ms. JACKSON LEE. I have one.
Mr. GEKAS. I have to be home at 6 o'clock. [Laughter.]
Ms. JACKSON LEE. By 5:55 p.m.
Mr. GEKAS. The chairman will yield 1 minute to the gentlelady.
Ms. JACKSON LEE. Thank you very much. Mr. Chairman, let me just ask your permission, please, for unanimous consent if we could have an additional week to submit questions as well as written materials.
Mr. GEKAS. Without objection.
Ms. JACKSON LEE. I appreciate it.
I did not--I know Ms. McFadden is at DOT, and the EPA is represented here by Mr. Cannon, and you might want to offer something--but I thought that the record would not be complete if we did not allow at least some acknowledgement or statement--Ms. Katzen, specifically, and you started about some of the savings that has occurred under the Clinton administration in terms of cost because of streamlining and savings to business.
Ms. KATZEN. Thank you very much for the opportunity to discuss this. One of the very first Executive orders that the President signed was Executive Order 12866, on September 30, 1993, setting out regulatory principles. The order included such common-sense ideas as more tailored, more focused regulations, and more involvement of the regulated entities in the development of regulations, so that we have their input and not just mandate things to happen to them.
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In all of these different areas, we have been tracking what we have been doing for the last three years; as I say, reinforced by some of the actions taken by Congress and, to a large extent, working with the Vice President's National Performance Review.
The document that you referred to earlier includes a lot of the best, most interesting stories. The most telling part is that no single anecdote is earth-shattering, but it reflects information from all of the departments across the Government who are paying attention to this and attempting to be more customer-oriented to the needs of the affected communities.
I am very interested in having feedback from others on how they think we are proceeding in this regard, and appreciate the opportunity to share those experiences.
Mr. GEKAS. The time of the gentlelady has expired.
Ms. JACKSON LEE. Thank you, Mr. Chairman.
Mr. GEKAS. We thank the witnesses for their testimony, and we will be in touch with them, I'm sure, in the near future.
We hasten to call panel 3 before they faint.
Ms. JACKSON LEE. Hasten, hasten.
Mr. GEKAS. We will begin the introductions with Mr. Gray. Boyden Gray served during the Bush administration as the White House Counsel, and before that served with Mr. Bush during his Vice Presidency. Mr. Gray was active for many years with the Administrative Conference of the United States, and is a recognized expert in the field of administrative law. For several years, he has served as a partner with the law firm of Wilmer, Cutler & Pickering. Mr. Gray has been very helpful to this subcommittee over the years, and we appreciate his presence here today.
The second member of the panel is Thorne Auchter, the executive director of the Center for Regulatory Effectiveness, an organization dedicated to facilitating the implementation of the congressional review provisions of the Small Business Regulatory Enforcement Fairness Act.
He has recently served as the executive vice president of the Associated General Contractors, and prior to that was director of the Institute for Public Policy, a public interest organization dedicated to research and policy guidance related to the regulation of risks to human health and the environment. During the Reagan administration, he served as the head of the Occupational Safety and Health Administration.
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The third member of our panel, Prof. Peter L. Strauss, has been a professor of law at Columbia University, sincere 1971, specializing in, among other things, administrative law. In his earlier life, he clerked for Justice William Brennan and has written so extensively on the subject of administrative law that it would require a special volume to recapitulate his product.
The fourth member of our panel, Richard Pierce, is a professor of law at George Washington University Law School. Prior to his current position, he taught law at Columbia University, Southern Methodist, Pittsburgh, Tulane, Virginia, and the University of Kansas. He is a graduate of Lehigh University, and he received his law degree from the University of Virginia. He has also written extensively on administrative law and regulatory reform issues.
Our last panel member, Ms. Angela Antonelli is the deputy director of the Rowe Institute for Economic Policy studies at the Heritage Foundation. As such, she coordinates research on budget, tax, regulatory, labor, and environmental policies. She served as an analyst and assistant branch chief in OIRA from 1989 to 1993. She received her undergraduate degree from Cornell University and MPA from Princeton University.
We will ask the witnesses to proceed with their testimony in the order in which they were introduced, and we'll ask each to be restricted to the original time of 5 minutes and tell each one that their written statements will be accepted for the record, without objection.
Mr. Gray.
STATEMENT OF C. BOYDEN GRAY, FORMER WHITE HOUSE COUNSEL, PARTNER, WILMER, CUTLER
& PICKERING
Mr. GRAY. Thank you very much, Mr. Chairman. I'll try to be as brief as I can.
My concern here is not that this statute will be used too much but, perhaps, too little, and in the process will become understood as the vehicle for congressional review, displacing a more comprehensive kind of review that should also take place in certain circumstances. In other words, the instruction here in this statute that the inaction by Congress should not be taken as meaning anything in the courts, I think, should be retained.
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I know the focus here is meant to be procedural and not a bit substantive, but I do want to make reference to the NAAQS issue, the air quality--the air pollution rule that's been discussed or mentioned two or three times. The Clean Air Act is about one-third to two-thirds of the regulatory burden, so this statute is somewhat cut back if, in fact, the PM rule goes through without the proper scrutiny, the fine, particulate matter rule.
I was pleased to hear the general counsel of EPA just now state that while they have interpreted SBREFA as not applying to the PM rule in terms of small business, they do view it as applying in terms of congressional review, but that's kind of a funny disconnect, because if you've told small business that they're not impacted by the rule, they may not contact you and tell them why you should reveal the rule. And since it is small business that will bear the brunt of this, the vast bulk of the American public that will be affected is being told, in effect, by the administration, ''You're not going to hear from us now. Wait until the rule goes through.'' And then, of course, once it's through, the implementing rules, which they say will impact small business, are the SIPS, the State Implementation Plans, and those rules are considered minor rules, and so they will also escape the 60-day review. So, my concern is that there's sort of a head-fake here which will mean that the great burden of the regulatory process will go unchecked by this particular statute.
Professor Cohen has said in his article that he's worried about the broad nature of the delegation to the courts when they might disapprove, when they might be confronted with a disapprove rule--excuse me, an unanswered rule in the courts--do the courts take a look and say, ''Well, Congress didn't act on the SBREFA; therefore, what is our role here?'' And there's a suggestion, I guess, that the courts should be able to take congressional action into account. Well, this is an example that I've just given you where I hope the congressional inaction instruction would be retained.
It seems to me there may be a grant of authority to the courts in determining what is a substantially similar rule to one that has been disapproved, but that grant of discretion is completely derivative, it seems to me, to the original assertion of authority by the agency at the outset. And in the case of the PM rule, this pollution rule, if EPA chooses to regulate all pollution by one rule, which is what they've proposed to do, and if Congress disapproves it and creates some confusion in doing so, it seems to me it's EPA's fault, not the Congress's fault, not the statute's fault.
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But as I say, going back to my original point, it would certainly help matters if SBREFA weren't viewed as the sole vehicle, reviewing of congressional implementation by the agencies, because there may be a time when you need to be a little more deliberate, and the PM rule may be just such a case.
And I'll be happy to answer any questions.
[The prepared statement of Mr. Gray follows:]
PREPARED STATEMENT OF C. BOYDEN GRAY, FORMER WHITE HOUSE COUNSEL, PARTNER, WILMER, CUTLER & Pickering
Mr. Chairman, thank you very much for the opportunity to testify before this
It is important to note at the outset that Congressional review of regulation is not a new phenomenon. Indeed, it was so common by the early 1980's that some 130 or more statutes had legislative veto provisions ultimately struck down by the Supreme Court's Chadha decision. Even before Chadha of course, Congress periodically enacted legislation, signed by the President, to delay, reform, or repeal rules, and this practice continues to this day. Recent examples include three amendments to the Clean Air Act to eliminate the car pooling policy, the California FIP, and elements of the inspection and maintenance provisions.
Notwithstanding this history, the media has tended to treat SBREFA as a major new development. Stories periodically refer to this statute by saying that Congress accorded to itself the right to review Executive Branch rules. Since obviously Congress has the right to revisit its own statutory delegations of authority pursuant to which all rules are issued, this rule can only be viewed as a procedural change, like the first track provisions available for approving trade pacts. Nevertheless, there continues to be commentary that this Congressional review is something quite new. This may reflect the reversal of control of the Congress and the White House, with mainstream media sympathies shifting branches with the 1992—94 shift in control patterns. Indeed, one early 1995 network announcer even questioned the constitutionality of Congress' review of Executive Branch rules.
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Whatever reason for the surprise at the new statute, it has tended to obscure both the historical rule of Congress in the regulatory process generally as well as the specifics of SBREFA itself. The principal point I want to make is that Congress has a review function which it must continue to exercise whether through the SBREFA or otherwise. The danger of SBREFA, it may be emerging, is that if it isn't used at all soon, it will atrophy and die. That would not, of course, be the end of the world, unless it resulted in the general decline in the use of Congressional oversight altogether. I do not believe this is happening now, but it could, and Congress should guard against that eventuality.
Put another way, Congress should be alert to the possibility that agencies may become bolder in the use of their delegated authority, justifying this politically by saying, in effect, well, Congress can change it if it wants. In fact, of course, Congress always could change rules before SBREFA, and can still do so outside this statute in the future. But if the public does not know this, and Congress ignores it, then agencies may be lured politically into exceeding their authority. Of course, the courts should not let them get away with this, and the statute itself specifically provides that courts may attach no significance to a Congressional failure to act on a rule under SBREFA. But the courts cannot be counted on to catch every over-zealous regulation. Some limited expansion of authority might sneak through.
The need for vigilant Congressional review--and the risk that SBREFA may invite expansion of agency discretion--is illustrated by a current proposed rulemaking proceeding at EPA, known as the Ozone/PM rulemaking. Though seemingly technical on the surface, this arcanely labeled proceeding is the most expansive--and expensive--exercise of legislative authority ever proposed by any agency in U.S. history. As I shall try to outline briefly below, the assertion of delegated discretion is so broad as to be virtually standardless--that is, an unconstitutional, standardless exercise of delegated authority. The courts may catch it if Congress doesn't, but the very complexity of the issues makes it more difficult than the usual case for a court to avoid deferring to agency discretion under Chevron. It is therefore imperative that Congress consider this rule carefully, whether under SBREFA or otherwise. And, notwithstanding the fact that primary jurisdiction lies with the Science and Commerce Committees, this Committee has its own obligation to examine the rule, both within and without the contours of SBREFA, because of the constitutional issues raised under Shechter.
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The statute under which EPA is issuing its rule is broad and vague enough to begin with. The provision in question, Section 109 of the Clean Air Act (CAA), provides simply that EPA shall establish primary standards that ''allowing an adequate margin of safety, are requisite to protect public health.'' While this might seem on the surface to constitute an open-ended grant of authority, the Supreme Court has interpreted similar provisions (relating to OSHA) as requiring the establishment of ''significant risk'' so as to narrow discretion, and EPA has traditionally had sound scientific support for its past rules called National Ambient Air Quality Standards (or ''NAAQS'').
In this particular case, however, EPA has thrown caution to the wind and relied solely on statistical associations between PM and observed health effects, without any understanding of the medical relationship between the two. Reliance solely on epidemiological studies is fraught with danger, and scientists generally require two conditions to be met in dealing with epidemiology. First, there should be a robust statistical correlation, or ''risk ratio'' (RR) of at least 2 to 1, and preferably 3 or 4 to 1 (the RR between tobacco smoking and cancer is better than 10 to 1). Second, there should be a plausible biological mechanism explaining the relationship.
In this case, EPA has, to start with, only two basic studies dealing with the pollutant it is purporting to regulate (PM2.5, or ''fine particles''). All of the other dozens and dozens of studies EPA relies on evaluate different pollutants, namely PM10, and TSP (sometimes referred to as coarse particles). None of the studies, whether of 2.5 or 10 or larger, has a strong M: the coarse particle studies have an average RR of less than 1.1 to 1 and the two 2.5 studies at best show a ratio of 1.2 to 1. Casting doubt on the latter ratio is the fact that the PM2.5 researchers have refused to release for public review the raw data underlying their two studies.
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Moreover, EPA acknowledges it has no plausible biological mechanism. Indeed, it has asked Congress in its recent budget request for $26 million to help resolve the ''great uncertainties'' about the health effects of PM. And according to father documents from EPA, much of this study will have to be done abroad because the ambient levels of PM2.5 in this country are so relatively low that they will not yield dose-response information of any value.
Since the statistical studies do not reflect actual human exposure levels and responses thereto, they may not reflect any cause and effect and may be totally irrelevant--that is, they may miss the real cause of the increase. For example, in one of the studies (of Birmingham) by the key researcher (Joel Schwartz of the Harvard School of Public Health), researchers found no association between PM and health effects when they put humidity into the model. That is, once included, humidity became the most important correlative factor. This is not surprising, since humidity is the most important factor affecting breathing capacity. When asked by Senator Sessions why he had ignored humidity, Schwartz said that he hadn't studied it since no one else had apparently studied it either.
In part because the statistics bear no the relationship to actual exposure and effects flowing therefrom, the models show a straight line, linear relationship between PM2.5 and health effects, with no threshold below which there is less or no observed effects. This means that EPA has to go to zero air pollution in order to provide an adequate margin of safety--I say zero because PM consists of virtually all pollutants (except CO2). Taken to its logical extreme, of course, this theory obsoletes the Clean Air Act, for EPA is now asserting independent authority to reduce to zero all of the pollutants addressed by the Clean Air Act in agonizing and excruciating detail in hundreds of pages of statutes, and thousands and thousands of pages of regulations.
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This raises precisely the problem of standardless delegation identified in International Vision vs. OSHA, 938 F.2d 1310 (D.C. Cir. 1991), where the court took the agency to task for failing to identify clear guidelines in the regulation:
One can imagine broader constructions than the one proposed by OSHA, but not easily.... The upshot is an asserted power, once sufficient risk is found, to require precautions that take the industry to the verge of economic ruin ... or to do nothing at all. All positions in between are evidently equally valid. Id. at 1317.
As a result, the court noted, ''OSHA's proposed analysis would give the Executive Branch untrammeled power to dictate the vitality and even survival of whatever segments of American business it might choose.'' Id. at 1318 The court thus struck down the rule as unreasonably broad.
The situation here is arguably worse, because there is no finding of significant risk, and all industries, not just one, are at risk. Compounding the problem is EPA's refusal to establish a market-oriented performance standard that would allow level-playing field flexibility for industries to comply. In the past, the most successful public health initiatives have utilized such market-oriented standards that usually involve emissions trading of some kind--lead, CFCs, acid rain, and reformulated gasoline are the four most dramatic examples. But EPA here has refused to establish such a compliance system because, as one EPA staffer stated at a January panel discussion organized by the National Environmental Policy Institute: ''Right now we lack some of the scientific underpinnings and some of the basic technical tools to really enable us to assess the environmental and health impact of tradeoffs across pollutants within a media....''
This is sadly true, in fact. EPA doesn't have the scientific understanding of the relationship between the pollutants that make up PM2.5. But that means that EPA should not regulate at all--not that it should regulate individual pollutants at EPA's whim and not treat all polluters fairly and on a level playing field. The result, of course, is the very essence of arbitrary and standardless discretion--we'll regulate to each according to its needs, and from each according to its abilities.
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EPA is reportedly already engaged in dividing and conquering, promising special deals to this constituency and that geographic location at the inevitable expense of other constituencies that may not have the relevant political power at the moment. This is an invitation to the balkanization of industrial America--and, it must be emphasized, to very slow environmental progress at very high unnecessary costs.
I do not believe this is what Congress intended. I hope this Committee will look at this rule from a constitutional perspective as well as the perspective of SBREFA. What EPA should do is what Senator Chafee has suggested, namely, conduct the needed research before finally promulgating a standard. Because the PM2.5 constituent pollutants will be driven down well into the next century by the existing CAA, no one will be put at risk by virtue of the time taken to get this issue right.
There are a couple of additional observations I should like to make about the statute.
A recent article by Daniel Cohen and Peter Strauss in the Administrative Law Review criticizes the Congressional Review Act on the grounds that it may undermine the quality of rulemaking. In their conclusion, Cohen and Strauss complain that the law will induce agencies to avoid promulgating major rules and to take other measures to ''limit their exposure to congressional oversight.'' This point, if true, simply highlights the need for congressional review of agency actions, including non-major rules, to ensure that agencies are not acting to avoid congressional intent or direction. Agencies should not be in the business of avoiding oversight by Congress.
Cohen and Strauss also express concern that the Congressional Review Act will have the effect of delegating power to the courts, which will need to interpret whether an agency rule promulgated after Congress enacts a resolution of disapproval is substantially similar to the original rule, in which case it is invalid. As an initial matter, it strikes me that Cohen and Strauss are raising a false alarm since in most cases it will be readily apparent whether a rule is substantially similar to a predecessor rule invalidated by Congress. Moreover, this so-called delegation pales into comparison to the delegation from Congress to agencies in numerous statutes. It is one thing for a court to decide whether two rules are similar, but quite another for Congress to give an agency unlimited discretion to decide whether, and if so, how to regulate a particular issue--as in the case of particulate matter. To the extent that Congress is going to delegate in such a broad manner, then it is critical that it impose constraints--such as those in the Congressional Review Act--to ensure that agency action is consistent with congressional intent.
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Mr. GEKAS. Mr. Auchter.
STATEMENT OF THORNE AUCHTER, EXECUTIVE DIRECTOR, CENTER FOR REGULATORY EFFECTIVENESS
Mr. AUCHTER. Thank you, Mr. Chairman.
Mr. GEKAS. We'll reserve the round of questions until the end of the entire testimony.
Mr. AUCHTER. Thank you, Mr. Chairman. My name is Thorne Auchter. I'm the executive director for Regulatory Effectiveness here in Washington, and I'm pleased to have the opportunity to be with you this morning.
CRE is a nongovernmental organization which has been privately established specifically to assist Congress in implementing the regulatory review provisions of SBREFA. At this time, CRE is not the recipient of any Federal grants. The cofounders and codirectors of CRE are Jim Tozzi and Jim MacRae, both of whom are former Deputy Administrators of OIRA and who have spent most of their careers working on Federal regulatory issues. And as the chairman mentioned, I'm a former Administrator of OSHA. Also, I have a background in the construction business, so I used to be a small businessman.
First, the committee is to be complimented on the timeliness of this hearing. Although SBREFA was enacted nearly a year ago, other issues and the elections have been somewhat of a distraction for Congress; now that a new Congress has convened, it is time to take action and to make action under SBREFA a priority.
Once a final rule is promulgated and sent by the Agency to Congress, the statutory timeframes are short, particularly for GAO analysis of major rules. Thus, in order to be most effective, Congress and GAO must begin familiarizing themselves with the key issues in major rules well before they're finalized and formally sent to Congress.
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There is great potential for SBREFA to be used as a mechanism for congressional oversight and consultation with agencies that will improve regulatory deliberations before a final rule is issued, and thereby avoid any necessity for congressional consideration of a joint resolution of disapproval.
From both my business and OSHA experience, I learned a long time ago that effective quality control has to operate commencing with the earliest stages of the production process, whether one is constructing a building or constructing a regulation, not just after delivery.
CRE's mission is to facilitate the SBREFA process by identifying for Congress and GAO the most important regulatory actions well before delivery to Congress, and to highlight those key issues and regulatory alternatives with the hope that difficult issues can be addressed before a rule becomes final. The analyses produced by CRE are intended to be objective, impartial, and user-friendly. CRE has recently issued its first analytical paper on a significant proposed rule, which I will discuss shortly.
Three specific issues have arisen during the past few months in connection with congressional review. All three issues demonstrate the importance of SBREFA as a mechanism for congressional oversight and the need for Congress to use SBREFA pro-actively to improve actions taken by rulemaking agencies.
The first issue I would like to address is the overhaul of the Federal procurement procedures, known as FAR 15. FAR 15 was proposed jointly by the Department of Defense, NASA, and the General Services Administration, and is being overseen by OMB. Included as exhibit A to my written testimony is an article(see footnote 2) that appeared earlier this week in the Washington Post which indicates that FAR 15, if promulgated as a final rule, will, ''give added advantage to large, well-connected firms,'' and that, ''the changes are also making it harder for the region's many smaller, minority-owned businesses to win federal contracts.''
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A number of groups have objected to specific provisions in FAR 15 on the grounds that they would allow contracting officers to favor larger companies at the expense of small businesses--and I've included that list in my written testimony, as well.
Independent of this opposition, CRE has been reviewing FAR 15. A copy of our analysis is included as exhibit B to my written testimony. Based on this review, we've determined that FAR 15 is a prime example of the role that SBREFA can play in encouraging agencies to correct difficult issues that arise in rulemaking proceedings before a final rule is promulgated.
Addressing these issues before promulgation of the final rule can, in many instances, obviate any need for a joint resolution. From this perspective, Congress should consider the issues that have been raised in connection with FAR 15 and notify OMB of those issues that could be resolved prior to issuance of a final rule.
The second issue in today's testimony is compliance with President Clinton's Executive Order 12866, which sets forth requirements for agencies to follow in planning and developing regulations, as well as requirements with which OIRA must comply in reviewing proposed and final regulations.
As reported in a recent article in BNA, a copy of which is attached as exhibit C to my written testimony, Members of the House are very concerned that the administration is not disclosing the results of OIRA's analyses of rules, notwithstanding that Executive Order 12866 requires them to do so.
More specifically, as reported in the BNA article, OIRA conducted an analysis, ''showing what OIRA thought about EPA's cost-benefit analyses on the proposed regulations.'' That article goes on to report that House Commerce Committee Chairman Bliley has accused EPA of, ''unduly influencing communication between lawmakers and the Office of Management and Budget,'' and that EPA's ''extraordinary control over OIRA may have led to incomplete or watered-down information from being sent to the House Commerce Committee.''
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Nondisclosure of such communications between rulemaking agencies may be a factor contributing to the marginal performance of OMB as reported in a letter from CRE to OIRA Administrator, Sally Katzen, which I have included as exhibit D to my written testimony.
The chairman of this full committee showed foresight in the statement of the legislative history of SBREFA, adopted by Congress, when he stated that, quote: ''It is essential for the agencies to present this information in a format that will facilitate the GAO's analysis. The committees expect that GAO and OMB will work together to develop to the greatest extent practicable, standard formats for agency submissions. OMB should also ensure that agencies follow such formats.''
Mr. Chairman, I see that my time is up, but in my submittal, my letter to Director Katzen, it speaks to suggestions as to how to go to standard formats for Federal Register notices. And pursuant to the previous discussion about cost issues, we believe that this standard-format approach would greatly reduce the kinds of costs that some of the committee members and witnesses were discussing earlier.
Thank you.
[The prepared statement of Mr. Auchter follows:]
PREPARED STATEMENT OF THORNE AUCHTER, EXECUTIVE DIRECTOR, CENTER FOR REGULATORY EFFECTIVENESS
Mr. Chairman and Members of the Committee, good morning, my name is Thorne Auchter, and I am Executive Director of the Center for Regulatory Effectiveness in Washington, DC. I am pleased to have the opportunity to speak today for CRE on this very important subject--implementation of the Congressional regulatory review provisions of SBREFA (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996)--and the role of our organization in that process.
CRE is a non-governmental organization which has been privately established specifically to assist Congress in implementing the regulatory review provisions of SBREFA. At this time, CRE is not the recipient of any federal grants. The cofounders and co-Directors of CRE are Jim Tozzi and Jim MacRae, both of whom are former Deputy Administrators of OMB's regulatory review office (the Office of Information and Regulatory Affairs, ''OIRA''), and who have spent most of their careers working on Federal regulatory issues. I am a former Administrator of OSHA and have a background in the construction business.
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First, the Committee is to be complimented on the timeliness of this hearing. Although SBREFA was enacted nearly a year ago, other important issues and the elections have been a distraction; now that a new Congress has convened, it is time to make action under SBREFA a priority.
Once a final rule is promulgated and sent by the agency to Congress, the statutory timeframes are short, particularly for GAO analysis of major rules. Thus, in order to be most effective, Congress and GAO must begin familiarizing themselves with the key issues in major rules well before they are finalized and formally sent to Congress. There is great potential for SBREFA to be used as a mechanism for Congressional oversight and consultation with agencies that will improve regulatory deliberations before a final rule is issued, and thereby avoid any necessity for Congressional consideration of a joint resolution of disapproval. From my business and OSHA experience, I learned that effective quality control has to operate commencing with the earliest stages of the production process--whether one is constructing a building or constructing a regulation--not just after delivery.
CRE's mission is to facilitate the SBREFA process by identifying for Congress and GAO the most important regulatory actions well before delivery to Congress, and to highlight the key issues and regulatory alternatives, with the hope that difficult issues can be addressed before a rule becomes final. The analyses produced by CRE are intended to be objective, impartial, and user-friendly. CRE has recently issued its first analytical paper on a significant proposed rule, which I will discuss shortly.
Three specific issues have arisen during the past few months in connection with Congressional Review. All three issues demonstrate the importance of SBREFA as a mechanism for Congressional oversight and the need for Congress to use SBREFA proactively to improve actions taken by rulemaking agencies.
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FEDERAL PROCUREMENT REGULATION
The first issue I would like to address is the overhaul of the Federal procurement procedures known as ''FAR 15.'' FAR 15 was proposed jointly by the Department of Defense, NASA and the General Services Administration, and is being overseen by OMB.
Included as Exhibit A(see footnote 3) to my written testimony is an article that appeared earlier this week in ''The Washington Post'' which indicates that FAR 15, if promulgated as a final rule, will ''give added advantage to large, well-connected firms'' and that ''[t]he changes are also making it harder for the region's many smaller, minority-owned businesses to win federal contracts.''
A number of groups have objected to specific provisions in FAR 15 on the grounds that they would allow contracting officers to favor larger companies at the expense of small businesses. These groups include Associated Builders and Contractors, American Gear Manufacturers Association, American Small Business Association, Associated General Contractors of America, American Subcontractors Association, Computer & Communications Industry Association, Household Goods Forwarders Association, Minority Business Enterprise Legal Defense and Education Fund, National Association of Surety Bond Producers, Small Business Roundtable and the U.S. Chamber of Commerce.
Independent of this opposition, CRE has been reviewing FAR 15. A copy of CRE's analysis of FAR 15 is included as Exhibit B to my written testimony. Based on this review, CRE has determined that FAR 15 is a prime example of the role that SBREFA can play in encouraging agencies to correct difficult issues that arise in rulemaking proceedings before a final rule is promulgated. Addressing these issues before promulgation of the final rule can in many instances obviate any need for a joint resolution. From this perspective, Congress should consider the issues that have been raised in connection with FAR 15 by CRE, and notify OMB of those issues that could be resolved prior to issuance of a final rule.
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SBREFA'S ROLE IN ENSURING COMPLIANCE WITH EXECUTIVE ORDER 12866
The second issue to be addressed in today's testimony is compliance with President Clinton's Executive Order 12866, which sets forth requirements for agencies to follow in planning and developing regulations, as well as requirements with which OIRA must comply in reviewing proposed and final regulations.
As reported in a recent article in BNA, a copy of which is attached as Exhibit C to my written testimony, Members of the House are very concerned that the Administration is not disclosing the results of OIRA's analyses of rules, notwithstanding that Executive Order 12866 requires them to do so. More specifically, as reported in the BNA article, OIRA conducted an analysis ''show[ing] what OIRA thought about EPA's cost-benefit analyses on the proposed regulations.'' The BNA article goes on to report that House Commerce Committee Chairman Thomas Bliley (R—VA) has accused EPA of ''unduly influencing communication between lawmakers and the Office of Management and Budget'' and that EPA's ''extraordinary control over OIRA'' ''may have led to incomplete or watered down information from being sent to the House Commerce Committee from OIRA.'' Nondisclosure of such communications between rulemaking agencies and OIRA may be a factor contributing to the marginal performance of OMB reported in a letter from CRE to OIRA Administrator Sally Katzen, which I have included as Exhibit D to my written testimony.
The Chairman of this Committee showed foresight in the statement of the legislative history of SBREFA, adopted by Congress upon passage of the new law, when he stated that:
It ... is essential for the agencies to present this information [i.e., information showing compliance with, inter aila, any relevant Executive orders] in a format that will facilitate the GAO's analysis. The committees expect that GAO and OMB will work together to develop, to the greatest extent practicable, standard formats for agency submissions. OMB also should ensure that agencies follow such formats. (Congressional Record, April 19, 1996, at E578.)
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CRE's views on how the Chairman's directive could be addressed, especially in light of the concerns raised by Commerce Committee Chairman Bliley, are set forth in CRE's letter to Administrator Katzen.
PROPOSED AMENDMENTS TO SBREFA
The third issue that has arisen under SBREFA concerns a proposal that has been made to the Administrative Law Section of the American Bar Association to issue a recommendation to Congress to Amend the text of the new law. To date, the ABA has not adopted a position on this matter. Proposals to amend SBREFA are inherently premature, in light of the fact that the statute was enacted less than one year ago. CRE's position paper on this issue is attached to my written testimony as Exhibit E.
Those in favor of amending SBREFA have expressed the concern that Congress, in enacting a joint resolution vetoing a regulation, will not provide the rulemaking agency with adequate guidance as to how the agency should correct itself in planning and developing an alternative rule. This concern is unfounded; Congress will have the foresight to draft joint resolutions that clarify the specific problems that caused Congress to take action. This point was been demonstrated just last week. As reported in ''Inside OSHA,'' a joint resolution to disapprove OSHA's recently promulgated rule on ''occupational exposure to methylene chloride'' is being considered by a Member of the House of Representatives. The proposed text of the joint resolution states detailed reasons for the disapproval--for example, OSHA's failure to use consistent risk assessment methodologies and problems with OSHA's determination of the economic impact--thereby informing OSHA that it must address these two fundamental issues before it can come back with another proposed rule on methylene chloride. A copy of the ''Inside OSHA'' article is attached as Exhibit F to my written testimony.
The points made in today's testimony demonstrate that Congressional Review provides Congress with a significant opportunity to assist agencies in correcting potential flaws identified during rulemaking. SBREFA is a ''win-win'' statute in which all of the participants in the regulatory process--agencies, stakeholders and Congress--can benefit. CRE will be playing an ongoing role in identifying ways in which the Congressional Review process can be made more effective.
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Thank you for your attention.
INSERT OFFSET RING FOLIOS 41 TO 78 HERE
Mr. GEKAS. Thank you. We'll turn to Professor Strauss.
STATEMENT OF PETER L. STRAUSS, BETTS PROFESSOR OF LAW, COLUMBIA UNIVERSITY
Mr. STRAUSS. Mr. Chairman, thank you very much for the opportunity to appear today.
I might add to the brief description you gave of my background that I served for 2 years as General Counsel of the Nuclear Regulatory Commission, and that I've been chair of the American Bar Association's Section of Administrative Law and Regulatory Practice, and am currently helping that section consider some possible recommendations.
Mr. GEKAS. Did you come to Three Mile Island?
Mr. STRAUSS. I had the good fortune to walk through the containment at Three Mile Island 2 years before the accident you're talking about, when it was still open to being walked through, and I was back in New York when that very unfortunate accident occurred.
I'm currently helping the ABA consider some possible recommendations, and I mention them only because Mr. Auchter has included as part of his testimony a reference to a very early stage of that process, and I want the committee to understand that it is not the current stage of the process, first, and that, second, the ABA has not yet formulated any position on the matter. I'm here today only as an academic with a life-long interest in these issues and a personal interest in helping the Congress make the statute the best statute it can possibly be.
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I join with the other witnesses you've heard in believing that there is real strength and merit in this statute. I share Boyden Gray's concern that it not be taken as the only occasion for congressional oversight, and his concern that, in effect, what is wanted is occasional congressional engagement indepth with those rules of genuine importance. I share Tom Auchter's sense that oversight most effectively occurs frequently in preliminary stages, and that it won't be a measure of the success or failure of this bill how frequently you in fact enact joint resolutions of disapproval, but rather how deeply the mechanisms of the bill cause you to become engaged in the administration's important rulemakings.
Yet, I do think that there are ways in which the act, as presently written, undercuts its worthy aims. The principal aim of my testimony today is to help you find ways to overcome those problems.
In very brief summary: First, under the act, every agency action fitting the APA's definition of ''rule'' is subject to its procedures. Chairman Hyde was very clear about that in the characterization of the bill that he gave when it was presented in the House. ''The definition of rule covers a wide spectrum of activities.''--I'm reading from page E578 of the Congressional Record, with some shortening to keep me within my 5 minutes: ''Documents covered include statements of general policy, interpretations of general applicability, administrative staff manuals, and instructions to staff that affect a member of the public. For purposes of this section, the term also includes any rule, rule change, or rule interpretation by a self-regulatory organization that is approved by a Federal agency.
''The committees admonish the agencies that the APA's broad definition of rule was adopted by the authors of this legislation to discourage circumvention of the requirements of chapter 8.''
Mr. Chairman, that's quite understandable and understandable in terms of the Congress's aims in the regulation, but in my judgment it will get in the way. Indeed, the testimony this morning confirms that this dimension of the statute is, in fact, not being complied with. What you've heard is that 3,438 rules were submitted to you in the past 11 months. That's a good count, if you go by what's published in the Federal Register. But if you include Treasury revenue interpretations, if you include the advice that FAA gives air companies about how to comply with standards if you include the wide range of other matters that unquestionably come within section 551's definition of a rule, you aren't getting those. The Federal Government issues these interpretive rules in the tens of thousands yearly.
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In my judgment, you should not be getting those interpretive rules. For you to get those, particularly for you to get those accompanied by the kind of paperwork you've been discussing with GAO would be to cause the agencies to cease giving those rules out--to cease adopting interpretations that have enormous importance to business and industry. You don't want to create that kind of incentive.
If I may have just a couple of minutes--I see the light is on--to address----
Mr. GEKAS. The witness may proceed for another 2 minutes.
Mr. STRAUSS [continuing]. To address the second point in my testimony. It stems from the recognition that the Chair made earlier on, that Congress may have lots of reasons for disapproving agency rules, for using the resolution of disapproval process. The example you used was an agency that had characterized as a minor rule one that actually should have been major. That would be an entirely appropriate occasion for Congress to adopt a resolution of disapproval. You want to keep the agencies honest in this process.
But I think you'll be discouraged from doing that by the remedy currently present in section 801(b)(2), which says that when you adopt such a resolution of disapproval, the agency cannot re-adopt the same rule or a rule that is substantially the same unless it first secures new legislation. So, if you believe that remedy, you're only going to adopt resolutions of disapproval when you think the agency has overstepped the bounds of its authority. It's the only time that it makes sense to employ that remedy. It's a blunder bus approach. It's too severe for any other occasion.
Congress should amend section 801(b)(2) to provide instead that if an agency wants to come back to you a second time with the rule, it has got to include in its statement of basis and purpose an explanation how it met the objections that underscored the first resolution of disapproval.
That will send a signal to you to police it. It is also an instruction that the courts can easily enforce. And it will help you accomplish what seems to me to be the very worthy purposes of this legislation.
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Thanks very much.
[The prepared statement of Mr. Strauss follows:]
PREPARED STATEMENT OF PETER L. STRAUSS, BETTS PROFESSOR OF LAW, COLUMBIA UNIVERSITY
My name is Peter L. Strauss. I have been teaching and writing about administrative law at Columbia University School of Law for a quarter century. I have also been general counsel of the United States Nuclear Regulatory Commission, and chair of the American Bar Association's Section of Administrative Law and Regulatory Practice; and I am currently helping that Section consider possible recommendations about the important legislation we are discussing today. It has, however, formulated no position on the matter. I am here today only as an academic with a life-long interest in issues such as these, and a strong personal interest in helping the Congress make this noteworthy statute the best that it can be. Save for my dean's willingness to reimburse some of the financial expense of being here, no one is paying me in any way in connection with my testimony today. I feel privileged and grateful for the chance to present it.
The Act's aim is to make Congress more responsible for the products of the authority it delegates to agencies, by making certain that Congress is informed of agency rulemakings and providing an expedited opportunity for disapproval of those rules it finds unjustified. In my testimony today I address three ways in which the Act as presently written undercuts this worthy aim, and suggest changes to overcome these problems. In very brief summary:
Under the Act, every agency action fitting the APA's definition of ''rule'' is subject to its procedures. Yet agencies take tens of thousands of such actions annually, mostly low consequence offerings of interpretive advice that could very easily be discouraged by additional paperwork but in the aggregate are of enormous value to the regulated community. In reality, Congress will be interested in very few of these rules, so that these processing expenses are not easily justified. Moreover, exposing such low-visibility events to a summary, expedited review process heightens the risk of uses that the public would find disreputable. For just this reason, the White House has properly limited OIRA's formal political review of individual rules to the most prominent, a few hundred yearly. Congress, too, should assure that its limited resources are addressed to the most important occasions for review, by adopting a mechanism for limiting the application of the Act.
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Congress may disapprove a rule for a variety of reasons, such as agency failure adequately to analyze the economic or small business consequences of a rule. If an agency attempts to reiterate a disapproved rule, that reiteration, too, will have to undergo the review process, in which Congress will be able to judge whether its objections have been met. Yet the Act now provides that the agency and any subsequently reviewing court must treat a resolution of disapproval as depriving the agency of any authority to take ''substantially the same'' action without fresh legislative authority being enacted. Moreover, the court reviewing the reiterated rule is categorically instructed to give no weight whatever to Congress's failure to disapprove the rule on its second presentation. If Members believe that this doomsday effect is not justified for all agency failures, it may well discourage Congress from disapproving rules for any reason except that the agency lacks substantive authority for what it has done.
Moreover, in my judgment, the form of disapproval is constitutionally objectionable. It asks the courts to do Congress's job, to redefine the agency's substantive authority, without providing any textual instruction how to do so. The shadow effect of a disapproval, in this form, will discourage agencies from taking actions courts would eventually find were left in their authority.
All these problems would be eliminated, while assuring Congress the respect appropriate to its initial action of disapproval, if Section 801(b)(2) were amended to provide that an agency adopting the same or ''substantially the same'' rule to one that has been disapproved must fully explain in its statement of basis and purpose how any issues ventilated during the initial disapproval process have been met. Courts could enforce such a requirement without overbreadth, and the result would be fully to inform the Congress about the agency's actions following its initial disapproval, thus arming the second review process.
Finally, the provisions of the Act respecting the period during which the effective date a major rule is suspended for congressional review would benefit from clarification to put in statutory form intentions made clear in the legislative history. Constitutional problems are present if, as the present text could be read to permit, the effective date of a rule can be altered by the act of a single member of Congress, or even of a committee.
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Let me now turn to my detailed testimony.
BACKGROUND
Title II of P.L. 104—121, the Small Business Regulatory Enforcement Fairness Act of 1996, among other things, established a requirement for congressional review of agency regulations. Under this review procedure, beginning March 29, 1996, all Federal agencies, including independent agencies, are required to submit each ''rule'' to the Congress and to the General Accounting Office (GAO) before it can take effect. ''Rule'' is defined in new 5 U.S.C. 804 by reference to the basic APA definition of ''rule'' in 5 U.S.C. 551, with minor exceptions.(see footnote 4) Thus, rules governing grant programs, general statements of policy, interpretative rules, guidance instruments that may affect the public, and other publication rules fitting the 551 definition but exempted from 553 notice-and-comment rulemaking procedures are included in the statute. For each rule, agencies must also submit 1) a report containing a concise general statement relating to the rule and reporting its proposed effective date; 2) a complete copy of any cost/benefit analysis of the rule; 3) information concerning the agency's actions under the Regulatory Flexibility Act and the Unfunded Mandates Reform Act; and 4) any other relevant information or requirements under any other law and any other Executive Order.
The Act's principal operative impact is likely to be on ''major'' rules, defined in relation to the way in which that term was defined in the Executive Order 12291.(see footnote 5) Other, non-major rules take effect in normal course, subject only to the contingency that Congress will initiate and enact a joint resolution of disapproval. For major rules, active congressional review is promoted by GAO's obligation, within 15 days of an agency's submission, to report to each House of Congress its assessment of the agency's compliance with the procedural requirements of the various statutes and Executive Orders for which the agency must submit required information. 5 U.S.C. 801(a)(2)(A). Most importantly, with stated exceptions,(see footnote 6) the statute automatically delays the effectiveness of all major rules for at least 60 days, while they are reviewed by Congress. Thus, for major rules, the apparent default expectation of the statute is that review will occur.
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Under 5 U.S.C. 801(a)(3), a major rule submitted to Congress takes effect, unless disapproved, on the latest of three possible dates:
1) ''60 calendar days'' after Congress receives the report or the rule is published in the Federal Register, 5 U.S.C. 801(a)(3)(A)(I) and (ii).
2) Where Congress has passed a joint resolution of disapproval of the rule, but the President has successfully vetoed it, 30 session days after Congress receives the veto and the objections of the President or, if earlier, the date on which either House of Congress votes and fails to override the President's veto. 5 U.S.C. 801(a)(3)(B)(I) and (ii)
3) The date on which the rule would otherwise have become effective if not for this review requirement. 5 U.S.C. 801(a)(3)(C).
In any event, the effective date of an otherwise effective rule would not be delayed beyond the date either House of Congress votes to reject a joint resolution of disapproval. 5 U.S.C. 801(a)(5).
Finally, three provisions address the effect of a resolution of disapproval or its failure.
1) If a resolution is enacted, the rule is immediately deprived of effect. If it had gone into effect in the interim, for example because it was not a ''major'' rule, it is to be treated as having been void ab initio. 5 U.S.C. 801(f).
2) An agency may not issue a rule that is substantially the same as a disapproved rule, unless ''specifically'' authorized to do so by a law enacted after the date of the joint resolution disapproving the original rule. 5 U.S.C. 801(b)(2).
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3) Absent a successful resolution of disapproval, no court or agency may attach any meaning to Congress's action or failure to act. 5 U.S.C. 801(g).
Thus, a successful resolution not only eliminates the disapproved rule; it also alters agency authority to an unspecified extent. Beyond the resulting going or continuing into effect of the rule, an unsuccessful resolution has no bearing on subsequent legal events.
ANALYSIS
1. Statutory scope: The importance of ''major'' rulemaking, and the desirability of permitting Congress political responsibility for its large impacts on the American economy, justify the principle of expeditious congressional review. For rules meeting the ''major'' definition, congressional engagement is called for wholly independent of issues involving the President's role. While congressional delegation of such substantial authority is accepted faute de mieux,(see footnote 7) political oversight of the exercise of delegated authority is an important response to natural concerns about the responsibility of agency action.
Moreover, for major rules, the statute has the potential of balancing the President's established mechanisms for political control of important rulemaking. Executive Order 12866, entitled Regulatory Planning and Review,(see footnote 8) establishes the procedure by which the Clinton Administration reviews regulations to be issued by the Executive branch. This order requires each agency, prior to issuance, to inform OIRA, a division within the Executive Office of the President, of all rulemakings it intends to undertake and allows OIRA to determine which of those actions it would like submitted for a more detailed review.(see footnote 9) For major rules at least, the President will have had significant opportunities to influence the outcomes of regulatory action prior to its issuance by the Executive branch. As Congress properly understands, the run-up to the review process will afford important congressional actors balancing opportunities for influence; empowering preliminary negotiations might be viewed by some Members as the primary desired effect of this statute. Agencies will be glad to reduce the chance of delayed effectiveness in their rules even if they believe both that the President will stand behind a given rule by vetoing a joint resolution of disapproval and that Congress will be unable to override that veto. Shadow effects like these are, indeed, of enormous importance.
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A first concern is to limit the number of occasions on which formal congressional political review might occur, in a way corresponding to the limits the White House has imposed on the OIRA process. Several reasons underlie that concern:
The review process creates added costs for agencies and Congress, that may discourage activity that is very valuable in the aggregate but of little consequence in particular cases;
Formal political review by either Congress or the White House risks encouraging undesirable ''political favor'' oversight, suggesting that its reach should be balanced as between them;
The risks that political review will occur in return for favors is greatest where the discipline of public politics is least--that is, for matters of relatively slight importance to the general public, but of particular interest to individual contributors.
These observations warrant brief explanation.
a) The procedural costs of review. Under Executive Order 12866, OIRA has reviewed 829, 614 and 503 proposed and final rules in the last three calendar years, respectively. Federal agencies have published several thousand rules in the Federal Register during each of these years.(see footnote 10) And they annually take tens of thousands of actions fitting the APA's definition of ''rule,'' which includes such items as interpretive rules, general statements of policy, guidance to field offices, and suggested enforcement strategies. The legislative history of the Act, discussing in particular Internal Revenue Service actions, makes clear that this scope was understood and intended, in part as a means of discouraging agency efforts to circumvent notice-and-comment procedures when those procedures are in fact called for. In my judgment, however, this indirect means of responding to a possible problem is unwise, and likely both to undercut and to discredit the general operation of the statute.
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Were agencies to comply fully with SBREFA's requirement that all these matters be filed with Congress as a condition of their effectiveness (as it appears, thus far, they are not doing), Congress and the GAO would be swamped with filings. Burying Congress in paper might even seem a useful means of diverting attention from larger, controversial matters; haystacks can be useful for concealing needles. No one believes many, if any, of these rules will be the subjects of resolutions of disapproval. Yet for them even simple accompanying documents to permit data analysis and tracking, such as GAO has been proposing, would impose significant aggregate costs, well beyond their possible benefit were they analyzed in the terms suggested by the Paperwork Reduction Act for information requirements imposed on the private sector.
More importantly, agency publication of interpretations serves important ends of regularity and notice, which should be encouraged; but it is not required. One predictable bureaucratic reaction to added costs and complications in publishing interpretations is to cease to publish them--to revert to giving advice over the telephone, or in individualized letters that are not made generally available and on which the public is not invited to rely. These actions are excluded from the Act's application, but the public suffers when agency law is made more obscure in this way. There are some indications this is already occurring.
Another possibility, which also seems to be occurring in some quarters, is that agencies will simply ignore this aspect of the statute, disbelieving that such breadth was intended, or that Congress is in fact interested to receive so broad and (generally) uninteresting a flow of material. To act in this way risks future findings that these actions were not ''effective''; and it may also increase to that extent cynicism about law and diminish the legality of government action. Supporters of this aspect of the bill acknowledge that very few of these low-consequence actions will in fact produce resolutions of disapproval, yet the institutional costs of seeming to apply it to them is quite high. Moreover, the stated basis for the action--that in some cases agencies are evading a requirement to use notice-and-comment procedures--can be met directly, by legislation tailored to that problem, that does not discourage valuable advice-giving activity. Thus, for these rules, that are not already subject to a formal political oversight mechanism like OIRA's, a realistic assessment of costs and benefits does not support the imposition of these costs.
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b). Undesirable ''political favor'' oversight. Every day the newspapers appear to be giving us reasons why it may be inappropriate to adopt mechanisms that are likely to favor powerful, well-organized special interests over the general public in the workings of government. Understanding this, together with resource limitations, has been a major element in the consistent judgment of the White House, through six administrations, Republican and Democrat, to limit its public political involvement in rulemaking to ''major rules,'' those respecting which one can already expect politics to be importantly in play. Even in that context, OIRA has taken major steps, under appropriate congressional pressure, to limit the extent to which political operatives have any role in its exercise of presidential review. ''Special interest'' intervention is particularly likely to flourish where the number of possible targets is high, and any one of them obscure in the eyes of the general public.
Reliance on the political process to select rules for consideration will bring before Congress only those rules that offend industry or well-represented public interest groups. Such groups will expect to be able to influence future Congresses or congressional committees. By contrast, poorly organized, poorly financed groups, who are able to galvanize into an effective political coalition in order to advance their interests in one piece of legislation, will be unable to exert a sufficiently sustained political influence over time to derive much value from this statute or even to monitor an agency's decisionmaking process closely enough to know whether to advocate its utilization in a specific instance. Congress would undercut the utility of this important statute if it permitted it to become redolent with the odor of ''influence.''
It is also appropriate to note in this respect that SBREFA moves formal political controls into an area where the White House seems not to have taken them. For reasons of resources and, probably, in appreciation of the political vulnerabilities that have characterized its relations with Congress over rulemaking review through the past several administrations, the White House has limited its formal political review processes to the most important of rules--about 500 in the most recent calendar year. Congress assigns regulatory responsibilities to the agencies, not to the President, and properly expects those responsibilities to be carried out in a culture of law. When Congress extends formal political oversight deep into agency processes, it can only expect that the President will do the same. It will be making execution more political as a presidential matter, diminishing the extent to which it can command politics-neutral administration of the laws. The political justification for SBREFA is compelling in those areas, notably major rulemaking, where the President is already deeply engaged in formal political oversight of highly important activity. It is weak for areas of law-administration where, to date, traditions have run against such regular intrusions of politics and in favor of a culture of law. We have accepted such lesser-consequence agency action for decades, thinking it warrants neither presidential nor congressional attention as a matter of course. Here, institutionalized politics might genuinely interfere with administration. Congressional influence in that arena cannot be as easily defended as a political check on the presidency.
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Appropriate responses to this problem would include directing the General Accounting Office or some other body to develop objective information and analyses on the basis of which Congress can identify the rules that require greater scrutiny. Yet developing a process for screening review itself requires limiting the number of occasions on which that process would be invoked. Such a process would require at a minimum a succinct analysis of decisions made by the agency and of the trade-offs inherent in its rulemaking decisions, as well as critical analyses of cost-benefit and other reports submitted to GAO. For important rules, where the basic documents usually exist independent of this review process, gathering that information would not be difficult and any expense involved is trivial in relation to the interests at stake. The same cannot be said for each of the tens of thousands of interpretive rules and statements of general policy adopted annually. GAO's resources for analysis and evaluation would be swamped by any effort to accomplish such review.
c.) The highest risk that review will degenerate into the doing of ''political favors'' lies in low-visibility rulemaking. When the subject of a matter under systemic political review is narrow, it rarely will be of such moment that it catches the attention of the popular press or the public, and resulting actions inevitably will be the focus of interest group struggle, rather than public-spirited political action not about accountability to the people, but about accountability to special interest groups. The inevitable reliance on staff and limited debate that will result, with so many possible targets for action, open the door wide to individual members of Congress or public groups interested in opposing particular regulatory actions persuading the Congress as a whole to adopt a joint resolution of disapproval without the consideration that would be likely if Congress limited itself to a relatively few high consequence rules.(see footnote 11)
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Setting an threshold of importance would not remove from Congress's reach all interpretive rules or statements of general policy. Actions fitting the APA's definition of a ''rule'' may be major, whether or not they are also rules for which 5 U.S.C. 553 requires notice and comment procedures. An example is provided by one of the first disputes to arise under the new statute, which concerned Department of Agriculture (USDA) policy respecting the harvesting of downed timber under the Emergency Salvage Timber Program established in Pub. L. No. 104—19.(see footnote 12) On July 2, 1996, the Secretary of Agriculture issued a memorandum to the Chief of the Forest Service, entitled a ''Revised Direction,'' which contained ''clarifications in policy'' regarding the salvage timber program. These clarifications consisted primarily of definitions concerning salvage timber eligible for sale under the program and applied to all salvage timber sales for which bids had not been opened. Further, the memorandum was meant to provide ''interim direction'' on program operation until an interagency review was completed. The USDA took the position that this action was not a rule under 5 U.S.C. 551(4), and, thus, did not submit the document to Congress under the review statute. The Chair of the Senate Subcommittee on Forests and Public Lands Management sought an opinion from GAO as to the applicability of the Congressional review law to the USDA action. GAO determined, in my judgment correctly, that the USDA action constituted a rule, finding that the definitions were clearly of general applicability and future effect in implementing Pub. L. No. 104—19, in that they directly effected the size of the program and the number of sales offered for bid.(see footnote 13) Estimates of the timber values in issue seem to bring this action within the major rule dimension.
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Whether or not this particular agency action has some element of attempted evasion of the new statutory requirements, it illustrates their breadth. That USDA called the document a ''revised direction'' and that it was an internal document does not alter the fact that the agency was using that document as the basis for program management. The agency was relying on the definitions in that document to assess bids and award sales. Such action clearly establishes a policy affecting the interests of non-agency parties. As such, the document is a ''rule'' subject to the requirements of 5 U.S.C. ch. 8. So also would be interpretations of tax matters offered by the IRS, written guidance given by the NRC or FAA how manufacturers or licensees may effectively satisfy the requirements of agency legislative rules, and the whole range of ''publication rules'' identified by 5 U.S.C. 552(a) for publication and indexing, if they ''affect[] a member of the public'' and the agency wishes to rely upon them. The mistake made in the USDA, and perhaps more broadly throughout executive government, may have been in conflating ''rule'' with actions for which notice-and-comment procedures under 553 are required. Rule also reaches interpretive rules and general statements of policy, inter alia--kinds of action government actors take with great frequency, with the APA's blessing, without having to employ those procedures. By its own terms, the Department's action was an official interpretation of its obligation under the statute, and statement of the policies it would pursue. Thus, whether or not notice and comment procedures were required, the Department's action was a 551(4) ''rule.''
This statutory breadth threatens significant burdens and risks for agencies as well as Congress, that might have the effect of discouraging the provision of valuable and desired advice. Recall that the agency reporting obligation carries with it obligations that would not previously have been associated with ''rules'' not required to be adopted following notice-and-comment procedure. As remarked above, an agency must submit a report, and the requisite required information, to Congress and GAO regarding each rule--however unlikely it may be for the agency to have such materials for rules not normally considered as such. Both ''effective date[s]'' and ''concise, general statement[s] of basis and purpose'' are artifacts of that 553 procedure and the legislative rules it generates, but the new statue requires them of every action meeting the 551 definition. Thus, while the diction of 801 seems to have ''legislative'' rules in view, the effect of the definitional provision may be to impose new procedural requirements on other types of rule.
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In part because they do not have the force and effect of law, more importantly because the kind of structure and advice they provide is usually wanted as soon as it is available, interpretive rules and general statements of policy generally have no effective date as such; they are assumed to provide the standards they contain from the moment of their issuance, and indeed may even govern events prior to their announcement. A recent unanimous Supreme Court decision held that it did not offend principles against retroactivity in rulemaking to give agency interpretations announced in rules (in that case, a legislative rule) effect for situations arising before the rule was promulgated; ''[w]here ... a court is addressing transactions that occurred at a time when there was no clear agency guidance, it would be absurd to ignore the agency's current authoritative pronouncement of what the statute means.'' Smiley v. Citibank, 116 S.Ct. 1730, 1735 n.3 (1996).
If the statute will be read to require an ''effective date'' for non-legislative rules different from the date of their announcement, the useful activity of providing interpretations and policy statements to those required to comply with a regulation will be impaired. The application of interpretations to events already transpired, just endorsed by the Court, would seem to be precluded.(see footnote 14) It seems highly unlikely Congress wished to inhibit, for example, the Internal Revenue Service's publication of interpretations that could be relied on for the current tax year.
All these impacts, which appear not to have been fully appreciated, suggest that the scope of the statute should be cut back to the kinds of actions for which significant agency expenditures of analytic resources are in any event to be expected, and for which institutionalized political oversight has its strongest justification. In particular, requiring submission of the tens of thousands of ''interpretive rules'' agencies issue annually could swamp Congress with rarely controversial information and invite discrediting special interest activities, while discouraging agencies from continuing to provide those they regulate with helpful advice. Congress should moderate its claim to participation in rulemaking oversight with an appreciation how, at the level of routine, this mechanism could easily disserve the ends of responsive and responsible government.
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2. The consequences of action and inaction: The clear and welcome rationale for this important law is that, if implemented effectively, it will make Congress more accountable for the results of the legislation it passes. The process lays at the door of Congress the direct consequences of its actions. In some respects, however, the present Act threatens to defeat rather than enhance congressional responsibility for the outcomes of rulemaking. This ironic outcome stems from perhaps unanticipated consequences of two provisions: Section 801(b)(2), under which a resolution of disapproval deprives an agency of authority to adopt the same or ''substantially the same'' rule without fresh statutory authorization; and Section 801(g), instructing courts to attach no consequence to Congress's failure to act under this statute.
For a rule that might or might not be ''substantially the same'' as a previously disapproved rule, we can imagine three stages of engagement for Congress. The first comes with the disapproval of the first effort. Congress is not (cannot be and should not be) limited in its reasons for that disapproval. It might be that the agency has overstepped its intended legal authority; but it might also be that GAO's critique has shown that the agency has not yet performed adequate analyses of some issues, or that Congress concludes that the time is not yet ripe for the course the agency has charted, or that it disagrees with some particular aspect of what the agency has done. The second stage comes with agency reformulation of its action. Aware of what has been done, and that it will face congressional review again, an agency will be assiduous to see that the objections of which it is aware have been met; and Congress's committees will be well armed to engage in oversight dialog with the agency about what would, and what would not, meet the concerns that prompted the earlier action. In some cases, that awareness would lead an agency to seek new statutory authority, and Congress would have the chance, if so moved, to define more precisely just what the agency's authority was; in other cases, the agency will see to it that necessary analyses have been adequately performed; and so forth. In the third stage, the agency adopts a new rule, and that rule must again face congressional review--now, review informed by the earlier exchanges and action. And in this case, let us assume, no joint resolution of disapproval is enacted.
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A reviewing court now faces two problematic instructions. Even though the initial disapproval may have occurred for reasons independent of any question of authority as such,
a new rule that is substantially the same as [a previously disapproved] rule may not be issued, unless ... specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule. (Sec. 801(b)(2).)
Thus, the joint resolution withdraws from agencies a range of substantive authority that is undefined. Yet the text of the agency's enabling statute has not been changed. Congress's particular and unexplained action raises the risk that a future court may find unauthorized a rule that otherwise would come within the unchanged language of the enabling statute.(see footnote 15)
In my judgment, the difficulties here are not only practical, but constitutional in character. Pursuant to their own constitutional responsibilities, courts and agencies have the power and obligation to elaborate the meaning of the laws they are applying.(see footnote 16) Congress may of course change the laws using the procedures of Article I, but what it cannot do is to tell these constitutionally independent institutions how to interpret existing laws, without effecting an amendment.(see footnote 17) To do so effectively deprives the Executive branch of its usual responsibilities for implementing the statutes Congress has enacted, and leaves the courts without guidance. Yet this is in effect what Section 801(b)(2) does; it proclaims that authority has been changed, but offers no textual guidance whatever how to carry that change out. It is in effect a standardless delegation to the courts to rewrite the statute authorizing the agency to act. While the agency will doubtless know and (for the most basic of political reasons) be quite responsive to the ''legislative history'' of the first disapproval, that will be quite obscure to the courts. It matters not whether Members were persuaded that the case for the regulation was just not made at the time, or special factors intervened. Under currently governing theories of statutory interpretation, and one might think quite properly, courts would in any event be restrained in giving effect to it. Congress exercises its responsibility and creates law by enacting text, not by means of legislative history. Section 805 of the Act appears to recognize this, in providing that ''no determination, finding, action or omission under this chapter shall be subject to judicial review.''(see footnote 18) And, quite emphatically, the court is permitted to infer nothing from Congress's apparent willingness to permit the second effort, either as to the dimension of the change in agency authority worked by the first disapproval or as to the current level of justification for the agency's rule: no court or agency may infer any intent of the Congress from any action or inaction if a joint resolution is not enacted. (Sec. 801(g).)
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Thus, in combination, these provisions reflect missed opportunities both to provide clear direction to agencies engaged in rulemaking and to increase political accountability for the regulatory system. It may even discourage certain resolutions of disapproval, those that do not in fact go to questions of legal authority, if Members are influenced by fears that enacting them might lead a court inappropriately to restrict the overall authority of the agency involved. What is needed is a means to bring the circumstances underlying the enactment of a joint resolution into view. The present statute does not supply it; it sets out the exact language of a joint resolution and the procedure to be followed in its consideration, and does not allow for any explanation of Congress's intent. As such, Congress may find it easy to tell an agency when it is wrong, but never specify why it believes the agency is wrong or how the agency could get it right. The result is to compound the difficulties created by unclear initial delegations. Rather than take political responsibility for defining the agency's authority, Congress has left to the courts working out the meaning of a Delphic ''No!'', instructing them that they cannot even draw significance from its own second chance at the rule.
An alternative approach would avoid this difficult, perhaps even constitutional, problem and still make clear to agencies and Congress that responsive change was expected before an agency could act. Congress could assure the respect its action surely deserves without these undesirable effects, if it provided that an agency adopting the same or a substantially similar rule must include in its statement of basis and purpose a discussion how the rule meets any concerns voiced when the joint resolution of disapproval was enacted. This is because any new agency rule will itself have to undergo congressional review. An agency will not lightly propose a second rule that fails to take account of the concerns that underlay an initial resolution of disapproval. Courts could enforce a requirement of explanation without facing the difficulties of having to rewrite statutes without legislative guidance. As all would understand, the statement would flag the rule for particularly close congressional review. Congress would then be able to tell whether its proper political concerns had been met; whether a required analysis had now been performed; whether the objectionable portion of the rule had been excised; or whether circumstances had now so changed that the rule was acceptable.
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3. Uncertainties about the suspension of effectiveness: Many things might be said about the internal procedures Congress has set for considering joint resolutions of disapproval--for example, that only Senate procedures are specified, or that despite the appearance of a commitment to expedition, the statute states no direct legal consequence of a failure of Congress to act within such times as are specified for its actions--and, indeed, specifies action times for only a limited number of procedural stages in consideration of resolutions of disapproval. What warrants attention here, in my judgment, if the statute is being amended in other respects, are textual uncertainties about the duration of possible suspension of effectiveness of major rules. The uncertainties result in part from variations in the way time periods are described; and in part from the failure of the statute directly to address what will doubtless be the most common case, the case in which a joint resolution of disapproval has been introduced, but not finally acted upon within 60 calendar days of a major rule's submission to Congress. These uncertainties have a constitutional dimension calling for prompt attention.
The variations arise because 801(a)(3)(A), setting the first delayed effectiveness period at ''60 calendar days,'' refers simply to ''60 calendar days,'' while the provisions of 802 governing introduction of a joint resolution of disapproval require action within 60 calendar days after Congress receives a report on a rule, excluding days either House of Congress is adjourned for more than 3 days during a session. 5 U.S.C. 802(a). Thus, we have no assurance the congressional process will even begin before the section 801(a)(3)(A) period has expired; it is unlikely that by that time a resolution will have been introduced, passed by both houses, and presented to the President for veto or approval. 5 U.S.C. 801(a)(3)(B).
Suppose, then, 60 calendar days have expired and no joint resolution of disapproval has been introduced in either House, although time remains to do so. May the rule take effect? The time condition of 801(a)(3)(B) requires actual enactment of a joint resolution of disapproval and a presidential veto; the stage for these events has not even been set; no statutory provision limits the time within which they might occur. A statement issued April 18, 1996 by Senators Nickles, Reid, and Stevens, concerning the congressional review procedures, addressed a much more limited possibility. It informed agencies that, ''[b]y necessary implication, if Congress passes a joint resolution of disapproval within the 60 calendar days provided in section 801(a)(3)(A), [emphasis added] the delay period in the effectiveness of a major rule must be extended at least until the President acts on the joint resolution or until the time expires for the President to act.'' April 18, 1996, Cong. Rec. pg. S. 3683, 3684. Chairman Hyde's extended remarks, submitted for the record a day later, discuss this problem at length and clearly state an expectation that the rule would become effective after 60 calendar days unless a joint resolution of disapproval was on its way to the President by that time. April 19, 1996, Cong. Rec. Pg. E576. But the language Congress chose, referring to the ''latest'' of three possible dates, and making it clear that congressional consideration might not even begin until after 60 calendar days had expired, is at the least confusing. We can easily imagine cases in which courts would face the effectiveness question as to rules for which a resolution of disapproval process had not been completed within the 60-day period, and in which a party would wish to take the position that the rule was not permitted to have become effective during the pendency of congressional review, while it remained possible that the period specified by 801(a)(3)(B) would mature. Comments in extended remarks are a problematic source of information about statutory meaning.
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The statute should be amended to provide for a maximum, fixed period of delay in the effectiveness of major rules occasioned by the review process. The statute could then state explicitly that this period would be further extended if Congress had finished its action within that period, but the process had not yet come to a conclusion because of the President's role. But it seems important to eliminate the (unintended) appearance from the present text of the statute that an indefinite suspension might be occasioned by the introduction of a joint resolution. Under the analysis first put forward in Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983), finding the legislative veto to be unconstitutional, constitutional problems would appear if effectiveness were delayed in a particular case, because of some particular member of Congress, committee, or even one or both houses acting without the President. These problems might be resolved favorably to the delay, if it itself were brief and finite, on analogy to decisions sustaining the temporary impact of GAO actions respecting defense contracts.(see footnote 19) Even these decisions, however, suggest that insuperable problems would be posed by an indefinite, or unduly extended, postponement of effectiveness. Then the effect would be to permit one House, or even a single member introducing a timely resolution, to indefinitely postpone, and thus to negate the effectiveness of, executive action under delegated authority. The uncertainty and length of delay, in my judgment, easily brings this case within the ambit of Chadha.
CONCLUSION
This new law requiring congressional review of agency regulations deserves to be better than it presently is. As enacted, it overreaches its most appropriate targets, at the risk of discouraging highly useful agency activity; and it misses the opportunity for constructive legislative input about the meaning of laws requiring implementing regulations. Ironically, these flaws may undercut its potential to produce ''better'' rulemaking and greater political responsibility for actions importantly affecting the public, while increasing rulemaking costs and public skepticism. Limiting its ambitions and changing its remedies would help it to achieve the worthy ends claimed by the President and congressional regulatory reformers when the law was enacted.
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Mr. GEKAS. Thank you. We'll turn to Professor Pierce.
STATEMENT OF RICHARD J. PIERCE, JR., LYLE T. ALVERSON RESEARCH PROFESSOR OF LAW, GEORGE WASHINGTON UNIVERSITY
Mr. PIERCE. Thank you, Mr. Chairman. I greatly appreciate the opportunity to testify before you today.
I believe that the Congressional Review Act has the potential to yield socially beneficial results of three different types. The first is, it will occasionally produce a congressional veto of a bad agency rule. As the testimony you've heard earlier today suggests, however, that's going to be a very rare occurrence. That's not going to be the principal benefit of the act.
The second type of benefit is that it will encourage agencies to welcome greater congressional involvement in the agency process of drafting major rules. And here I was very encouraged to hear Mr. Auchter's description of his organization's role in helping the Congress to become more involved in that process.
The third potential benefit is it will increase the opportunities for Members of Congress to identify the sources of those rules that Members consider to be unduly expensive or burdensome. I, frankly, believe that third benefit will be far and away the largest benefit produced by the act.
I'm also quite confident that as Members of Congress become more involved in the process of working with agencies, in drafting major rules, and in reviewing rules that agencies have issued, that Members increasingly will discover that the principal source of bad rules are bad substantive provisions of the statutes that agencies are required to implement. The substantive provisions of many agency-administered statutes require agencies to ignore the costs of the rules they issue, and require agencies to use forms of regulation that are unnecessarily expensive and intrusive. Ultimately, Congress can do far more good for the Nation by amending the substantive provisions of agency-administered statutes than by vetoing a few bad rules.
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The specific language of the Congressional Review chapter is problematic in several respects, and the biggest problem that it has is the first problem that Professor Strauss referred to--its extreme overbreadth. As written, the chapter literally requires Congress to review tens of thousands of rules per year. Fortunately, agencies are not complying with the statute as it is written at present, or the paperwork enhancement characteristic of the statute would be dwarfing any other potential effects of the statute.
If Congress were to require agencies actually to comply with the literal words of the statute and the extraordinarily broad definition of ''rule'' contained in the statute, it would be embarking on a costly and meaningless exercise in futility. No one in this building is going to read all of those documents, much less engage in any process of review of those documents.
Congressional time and attention is one of the most valuable, scarce resources the Nation has. It should not be squandered on minor matters. The Congressional Review Act should be amended to provide for review only of major rules. Even as so narrowed, it will require a significant commitment of congressional resources. Agencies issue hundreds of major rules each year, and the process of engaging in serious review of any major rule involves a tremendous amount of effort.
Thank you. I'll be happy to respond to any questions you have.
[The prepared statement of Mr. Pierce follows:]
PREPARED STATEMENT OF RICHARD J. PIERCE, JR., LYLE T. ALVERSON RESEARCH PROFESSOR OF LAW, GEORGE WASHINGTON UNIVERSITY
My name is Richard J. Pierce, Jr. I am Lyle T. Alverson Research Professor of Law at George Washington University. I have spent the last twenty-five years studying government regulation. I have written scores of articles and over a dozen books about the regulatory process.
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I greatly appreciate the opportunity to share with you my views on the Congressional Review provisions that Congress added to the Administration Procedure Act (APA) by enacting Title II of the Contract with America Advancement Act, Public Law 104—121. Generally, I view the amendment to the APA as a healthy step in the right direction. Congressional review of agency rules has the potential to yield socially-beneficial results. Some of the specifics of the Congressional review provisions are problematic, however. In particular, the definition of the agency rules that are subject to review is far too broad. Congressional review has the realistic potential to produce socially-beneficial effects only if Congress focuses its limited resources on a much narrower class of rules that are truly worthy of Congressional attention. I will address four issues that are raised by the Congressional review provisions: (1) the legitimacy and propriety of Congressional review of agency rules; (2) problems created by the specifics of the Congressional review provisions; (3) the potential benefits of Congressional review; and, (4) the relationship between Congressional review and the broader regulatory reform agenda.
REVIEW OF AGENCY RULES IS A LEGITIMATE AND APPROPRIATE CONGRESSIONAL ROLE
Some participants in the regulatory reform debate have questioned the legitimacy and propriety of Congressional review of agency rules. Some have even argued that the Congressional review process authorized by the amendment violates the Constitution. I do not share either of those views. Agencies often use the rulemaking process to make major policy decisions. As courts have often recognized, it is entirely appropriate and socially-beneficial for the elected representatives of the people to play an active role in that policymaking process.(see footnote 20) Indeed, Congressional review provides at least a partial antidote to a serious problem that has been identified by many political scientists and constitutional law scholars--inadequate political accountability for the many major policy decisions that are made by unelected agency decisionmakers.(see footnote 21)
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As you are well aware, the Supreme Court held unconstitutional the prior statutory mechanisms that authorized Congressional veto of agency rules.(see footnote 22) The Court held that those mechanisms violated the Bicameralism Clause by authorizing a single House of Congress to take a formally binding action and violated the Presentment Clause by authorizing Congress to take a formally binding action without providing the President an opportunity to veto that action. The new Congressional review provisions avoid both of those problems. They authorize Congressional veto of a rule only through Bicameral action and Presentment. I have no doubt that the basic mechanisms for Congressional review, and potentially Congressional veto, of agency rules contained in the new amendment to the APA are constitutionally valid.(see footnote 23)
SPECIFIC PROBLEMS WITH THE CONGRESSIONAL REVIEW PROVISIONS
While I strongly support Congress' basic decision to increase its role in the agency policymaking process by providing for Congressional review of agency rules, I fear that the specific language of the Congressional review provisions will have a variety of unintended adverse effects. Daniel Cohen and Peter Strauss have done an excellent job of analyzing the language of the amendment in detail and identifying the unintended adverse effects that are likely to result from attempts to implement the amendment in its present form.(see footnote 24) Congress can increase the efficacy of the Congressional review process and avoid those unintended adverse effects by changing the language of the Congressional review provisions in the places where Cohen and Strauss have identified problems.
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The most significant problem with the present language of the Congressional review provisions is extreme overbreadth. The statutory definition of the ''rules'' that Congress is supposed to review is extraordinarily broad.(see footnote 25) It would require Congress to review at least thousands, and probably tens of thousands, of rules each year.(see footnote 26) That is literally impossible. By defining the scope of Congressional review of agency rules in such an unrealistically broad manner, Congress risks creation of a process that will soon be recognized as an expensive but meaningless charade. The British Parliament has had the power to review agency rules for a century, but it engages in no meaningful review because it made the mistake of defining the scope of the review process in an unrealistically broad manner.(see footnote 27) The process of reading, understanding, analyzing, and reviewing a single rule is extraordinarily labor intensive. Congressional time and attention is one of the most valuable scarce resources the nation has. It should not be squandered on minor matters. Congress should commit its resources only to review of major rules.(see footnote 28)
THE POTENTIAL BENEFITS OF CONGRESSIONAL REVIEW
Congressional review of major rules has the potential to yield socially-beneficial results. The largest benefits of Congressional review will emerge as an indirect consequence of the review process, however, rather than as a direct result of that process. Congress rarely will veto a major agency rule. The procedures required to veto a rule necessarily are indistinguishable from the procedures required to enact a statute that has the effect of nullifying a major agency rule. As the members of this Committee well know, it is extremely difficult to enact a statute that nullifies a major agency rule. That is particularly true when the President supports the agency rule, as is likely to be the case with respect to the vast majority of major rules that are subject to the new Congressional review process. Thus, I expect few social benefits to result directly from the review process, i.e., Congress rarely will veto a ''bad'' rule.
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The review process has considerable potential to create indirect social benefits of two types, however. First, agencies will anticipate the review process in the process of issuing a major rule and will welcome a greater Congressional role in the rulemaking process in an effort to minimize the problems the agency might otherwise encounter in the review process. Second, both the process of Congressional review of major rules and the resulting increased Congressional role in the agency rulemaking process will provide members of Congress increased opportunities to identify the sources of the characteristics of the agency rules that members dislike. That, in turn, will assist Congress in identifying the broader actions it can take to improve the performance of agencies. Congress can improve the performance of an agency far more effectively by enacting a broad-scope amendment to the statute the agency is required to implement than by vetoing a particular agency rule issued to implement that statute.
THE BROADER REGULATORY REFORM AGENDA
As you are well aware, the Congressional review amendment to the APA is only one of the many regulatory reform legislative initiatives Congress has considered enacting in the last two years. It is also one of the few recent initiatives that have the potential to produce socially-beneficial results. Most of the other Bills Congress has considered have been premised on a three-step reasoning process: (1) agencies issue too many rules that are unduly expensive and burdensome; (2) the primary source of this problem is procedural and institutional; and, thus, (3) the problem can be addressed effectively by increasing the decision-making procedures agencies must use and by instructing the courts to require agencies to comply with an ever-increasing labyrinth of procedural rules.
I agree with the first step in that reasoning process, but the second and third steps are based on a fundamental misunderstanding of the source of the problem of unduly expensive and burdensome regulation. The U.S. regulatory system is not characterized by problems caused by inadequate decisionmaking procedures or an inadequate judicial role in the rulemaking process. To the contrary, the U.S. regulatory system is plagued by a variety of problems that are attributable to excessive procedures and excessive judicial review.(see footnote 29)
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Unduly expensive and burdensome agency rules have their roots in the substantive provisions of the statutes agencies are required to implement. Many of those statutes require agencies to issue rules that are unduly expensive and burdensome. The substantive standards are often stated in terms that require agencies to ignore the costs of the actions they take. Most also require an agency to rely entirely on one-size-fits-all command and control regulation when other methods of regulation are available that would be far more effective, less expensive, and less intrusive.(see footnote 30) The acid rain provisions of the 1990 Clean Air Act Amendments illustrate the enormous social benefits that are potentially available through the process of careful review and revision of the substantive provisions of regulatory statutes. In the acid rain provisions, Congress instructed the EPA to replace command and control regulation of sulfur dioxide emissions with a system of marketable emissions permits. As a result, we have experienced reductions in sulfur dioxide emissions that are larger, more rapid, and much less costly than we achieved through use of the prior intrusive command and control method of regulation. Congress can improve the performance of agencies dramatically by refocusing its attention from decision making procedures and judicial review to the substantive provisions of the statutes that agencies are required to implement. The new Congressional review provisions of the APA have the potential to assist Congress in performing that important task.
Mr. GEKAS. Thank you. Ms. Antonelli.
STATEMENT OF ANGELA ANTONELLI, DEPUTY DIRECTOR FOR ECONOMIC POLICY STUDIES, THE HERITAGE FOUNDATION
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Ms. ANTONELLI. Mr. Chairman, members of the subcommittee, thank you very much for inviting me to testify on the Congressional Review Act.
The 104th Congress had achieved remarkable results in its efforts to transform major programs such as welfare and agriculture. It also put into place significant reforms of procedures for evaluating regulations and for conducting the daily business of Congress.
The challenge for the 105th Congress will be not only to continue to move forward with a legislative agenda that remains committed to reforming the business of Congress and transforming Government, but also to ensure that the reforms passed during the 104th Congress are effectively implemented.
Some of these enacted reforms could produce dramatic results if Congress implements them aggressively. The Congressional Review Act is among these reforms. The effective use of the CRA will be critical to the success of future regulatory reform efforts.
Although Congress has been, thus far, slow to use the important new powers it has given itself, it is still far too early to draw any conclusions about the need for, scope, or effectiveness of this act. The reality is that, following the passage of the act in March 1996, Congress was out of session for much of the second half of 1996 with the balance of the year dominated by election year politics.
The 104th Congress was still also considering broad regulatory reform legislation, and this also appeared to have contributed to the hesitancy of Members to apply the powers of the act. And more importantly, because of the interest of the 104th Congress in enacting comprehensive reform, many Federal agencies also appeared to slow the pace of their rulemaking.
By the last quarter of 1996, however, this all changed, and the administration and Federal regulatory agencies, in my opinion, became bolder in their actions, ready to test the willingness of Congress to challenge new regulations.
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Since the November elections, the administration has announced a number of new regulatory initiatives covering a wide range of issues: EPA's proposed new clean air rules were issued within weeks after the election; the administration announced its support for changing wetlands policies that currently allow for expedited approval of permits for small pieces of land when it imposes no environmental harm; the Bureau of Land Management has proposed strengthening the power of Federal land managers; the Food and Drug Administration is supportive of significant new spending on food safety; the Department of Transportation has announced its intention to issue new rules on air bags and child safety seats. And these are just a few of the new regulatory issues that come to mind.
All of these new initiatives sound noble: protect children, food, and the environment. How can anybody disagree with that? But that's what the administration is betting on, that nobody will question them or hold them accountable for the decisions. If held up to scrutiny--and this is true with the clean air rules right now--many of these regulations will be shown to be seriously flawed in their development and may actually do more harm than good.
But let me be absolutely clear that no one is arguing about the importance of these goals reflected in these regulatory actions--saving more children or making the environment or food more safe. But it is important to know if the Federal bureaucracy has made the best decisions about how to achieve those goals.
Although the American public may have a hard time believing that the Federal Government might actually do something that causes more harm than good, and thus question its actions, Congress has a responsibility to identify when and where this is happening and to stop it and protect the people they were elected to represent.
And this brings me back to the Congressional Review Act and why it's so important for Congress to aggressively implement it. If Congress is permitted by the act to review thousands of rules each year and finds fault with few or none of them, then those who argue that the current regulatory system can be harmful may find it very difficult to convince others of their case. Congress stands to lose credibility from ineffective implementation or outright neglect of this act.
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On the other hand, if Congress indicates to Federal agencies that it has the political will to tackle, through aggressive oversight, those economically significant or otherwise important new regulatory initiatives, agencies will be much more inclined to take care in the development of regulations.
Now the administration, agencies, and others seem to be complaining about the minor costs of enhancing public awareness and participation in the regulatory process, when it's clear that the potential benefits in terms of more sensible regulation--may we even say less regulation--could be enormous. And the reality is that right now no one can say for sure what the benefits of the CRA process will be.
Indeed, some of the most expensive or significant regulatory actions may be improved through this review process. But GAO and Congress also need to maintain a comprehensive data base, including nonmajor final rules, because we can't say for sure right now that a careful look at this first comprehensive data base of Federal actions won't also reveal some important patterns, either in the substance of rules or the process used by agencies to get these rules out that may be needlessly inefficient and costly.
The discussion that was earlier about the number of seemingly minor rules, the question that I would ask is, are these things that these agencies should be doing at all? And how much money are they spending issuing thousands of rules, seemingly insignificant, which may not even be their proper role? And so looking at nonmajor and minor rules may have a beneficial effect; I think we need to ask those questions.
I think if you asked any person in your district whether they believe the Federal regulatory system always operated in the most efficient and rational manner possible, the answer you would get would be no.
The American Bar Association is considering recommending to Congress that this act should be amended, and I believe these recommendations are shortsighted and misguided. Their recommendations would undermine one of the most important functions of the act, to monitor the agencies' compliance and noncompliance with the President's Regulatory Reform Executive order and regulatory reform laws, including the Unfunded Mandates Act, the Reg-Flex Act, and the Paperwork Reduction Act. And in many cases, nonmajor rules are the ones most in need of oversight, because agencies tend to ignore these statutes which are intended to maximize public participation in the rulemaking process.
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So I believe any further debate about the act will only serve to keep Congress from implementing it. Those who oppose the act are more than willing to continue to throw up obstacles to keep Congress from the task at hand, fully cognizant that efforts to improve the regulatory process will suffer if Congress does nothing with its authority.
To send a clear signal to Federal agencies, Congress must show its resolve and move forward with the implementation of the act and resist any efforts to change it. To give operational bite to the use of the act, Congress should take a number of steps. One, it should establish a coordinated committee review mechanism. The overall purpose of the CRA is to alter agencies' regulatory behavior, in part, by creating a realistic threat that Congress can quickly a resolution of disapproval.
Mr. GEKAS. The time of the witness has expired. Do you want to clean up in another minute?
Ms. ANTONELLI. Just another minute, another minute.
Mr. GEKAS. Yes.
Ms. ANTONELLI. The ideal solution would be for both Houses to have a joint committee or task force on regulation that can help facilitate and coordinate the work of individual committees in both the House and Senate. Congress also should consider establishing criteria for actions, and an excellent model for that would be the President's own Executive order on regulatory review.
Task the GAO to undertake more indepth reviews of questionable rules. Although GAO would suggest it takes more resources, and it's a question of priorities, I would put the emphasis on a question of priorities. Again, there are probably only going to be a few problematic rules that are really in need of serious attention, and to the extent that that's true, then GAO should be asked to play a role in helping to do the appropriate analysis and look-back of those rules.
And finally, Congress should make an effort to devote staff to monitor and challenge agency rules more effectively. In the end, the 105th Congress has declared itself the ''implementation Congress.'' To make this description meaningful to the American public, it must make aggressive use of the Congressional Review Act as it is currently written.
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The act itself is critical to the success of future regulatory reform efforts, and, again, success should not be measured by how many resolutions of disapprovals are introduced or how many rules become law. The test should be whether or not Congress increases its scrutiny of rules being promulgated, and whether unelected Federal regulators pay more attention to the public criticisms of their rules once a formal mechanism exists in Congress to review and accept or reject those rules.
Thank you very much. I'd be happy to answer any of your questions.
[The prepared statement of Ms. Antonelli follows:]
PREPARED STATEMENT OF ANGELA ANTONELLI, DEPUTY DIRECTOR FOR ECONOMIC POLICY STUDIES, THE HERITAGE FOUNDATION
Mr. Chairman, Members of the Committee, thank you for inviting me to testify on the Congressional Review Act (''CRA'').
It should be noted that the following testimony is my own view and does not necessarily reflect that of The Heritage Foundation.
The 104th Congress achieved remarkable results in its efforts to transform major programs such as welfare and agriculture. It also put into place significant reforms of procedures for evaluating regulations and for conducting the daily business of Congress. The challenge for the 105th Congress will be not only to continue to move forward with a legislative agenda that remains committed to reforming the business of Congress and transforming government, but also to ensure that the reforms passed during the 104th Congress are effectively implemented.
Some of these enacted reforms could produce dramatic results if Congress implements them aggressively. The Congressional Review Act is among these reforms. It establishes an expedited process by which the Congress may review and, if necessary, disapprove essentially all federal agency regulations. The effective use of the powers of the CRA will be critical to the success of future legislative efforts to improve the way in which the federal government makes regulatory decisions, particularly those intended to protect public health, safety, and the environment. For this reason, the 105th Congress needs to make full use of the powers of the Congressional Review Act.
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Although Congress has thus far been slow to use the important new powers it has given itself, it is still far too early to draw any conclusions about the need for, scope of or effectiveness of the Act. The reality is that, following the passage of the Act in March 1996, Congress was out of session for much of the second half of 1996 with the balance of the year dominated by election year politics, including demagoguery on regulatory issues, such as the environment. The 104th Congress was still considering broad regulatory reform legislation, and this also appeared to have contributed to the hesitancy of Members to apply the powers of the CRA. And, more importantly, because of the interest of the 104th Congress in enacting comprehensive regulatory reform, many federal agencies also appeared to slow their pace in issuing new rules.
By the last quarter of 1996, this all changed, however, and the Administration and its federal regulatory agencies became bolder in their actions, ready to test the willingness of the Congress to challenge new regulations. Since the November elections, the Administration has announced a number of new regulatory initiatives covering a wide range of issues--EPA's proposed, new Clean Air rules were issued within weeks after the election; the Administration announced its support for changing the wetlands policy that currently allows for expedited approval of permits for small pieces of land when it poses little or no environmental harm; the Bureau of Land Management has proposed strengthening the power of federal land managers; the Food and Drug Administration has announced significant new spending on food safety; the Department of Transportation has announced its intention to issue new rules on air bags and child safety seats. And these are just a few of the new regulatory initiatives that immediately come to mind.
All of these new initiatives sound nice--protect children, food and the environment. How can anyone argue with that? And that is just what the Administration is betting on - that nobody will question them and hold them accountable for their decisions. If held up to scrutiny, and this is true with the Clean Air rules right now, many of these regulations will be shown to be seriously flawed in their development and may actually do more harm than good.
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Let me be absolutely clear that no one is arguing about the importance of the goals reflected in these actions--saving more children or making the environment or food more safe. But it is important to know if the federal bureaucracy has made the best decision about how to achieve those goals. Increasingly, the answer is no. Although the American public may have a hard time believing that the federal government might actually do something that causes more harm than good and thus question its actions, Congress has a responsibility to help identify when and where this is happening and to stop it and protect those they were elected to represent.
And this brings us back to the Congressional Review Act and why it is so important that Congress now begin to aggressively implement it. If Congress is permitted by the new Act to review thousands of rules each year and finds fault with few or none of them, then those who argue that the current regulatory system can be harmful may find it very difficult to convince others of their case. Members of Congress who seek to reform the Food and Drug Administration, the Occupational Health and Safety Administration, or the Environmental Protection Agency can hardly argue that these federal regulatory agencies do a poor job if they have been unable to identify one rule worthy of either serious scrutiny or a resolution of disapproval. Thus, Congress stands to lose credibility from ineffective implementation or outright neglect of the Act.
On the other hand, if Congress indicates to federal agencies that it has the political will to tackle--through aggressive oversight--those economically significant or otherwise important new regulatory initiatives, agencies will be much more inclined to take care in the development of regulations, to follow sound cost-benefit and risk assessment principles, and to make sure the rules hold up to public scrutiny.
Those who are uncomfortable with Congress's new review authority, including the Administration and federal regulatory agencies, will make the case that the Act is needlessly costly and cumbersome and slows down the rulemaking process by placing too much of an administrative burden on Congress and federal agencies. I would argue that the benefits of the Act, including requiring agencies to submit information on all final rules to Congress and GAO, have the potential to far outweigh the costs of compliance.
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The Administration and agencies are complaining about the minor costs of enhancing public awareness and participation in the regulatory process, when it is clear that the potential benefits in terms of more sensible rulemaking can be enormous. And the reality is no one can say for sure where the benefits of the CRA process will be found. Indeed, some of the most expensive or ''significant'' regulatory actions may be improved through this review process. But GAO also needs to maintain a comprehensive database, including nonmajor final rules, because we cannot say for sure that a careful look at this first comprehensive database of federal regulatory actions also would not reveal some important patterns, in either the substance of rules or the process used by agencies to issue nonmajor rules, that are needlessly inefficient and costly. I think if you asked any person whether they believed that the federal regulatory system always operated in the most rationale and efficient manner possible, the answer would be no. And the problems are not only with the most ''significant'' regulatory actions. The American public believes there are problems and that Congress, through the CRA and a number of other laws, needs to make a concerted effort to address these problems. The Administration wants us to believe that they have everything under control. Just take a poll and you will see how well they are really doing. Businesses, both small and large, are still outraged by the current system, and Congress has a responsibility to address this.
The American Bar Association is considering recommending that Congress amend the Act, and these recommendations are shortsighted and misguided. They seek to limit Congress's ability to effectively and comprehensively review the implementation of the statutes it has passed and ensure that the agencies' methods of implementation address the issues as Congress intended. Those who would argue that the CRA is needlessly cumbersome fail to understand the content and purposes of the CRA. The primary purpose of the CRA is not to encourage Congress to overturn a great number of rules that are submitted by agencies. Indeed, the CRA's success will be measured in part by how few rules are overturned. The CRA was intended to allow more effective congressional oversight (both of individual rules and the rulemaking process in general), to increase incentives regulators have to respond to views of the general public rather than narrow interests, and to make Congress and the President more politically accountable for the resulting rules.
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The potential ABA recommendations would undermine one of the most important functions of the Act: to monitor the agencies' compliance and non-compliance with the President's Regulatory Reform Executive Order 12866 and regulatory reform laws including the Unfunded Mandates Reform Act of 1995, the Regulatory Flexibility Act of 1980 (as amended), and the Paperwork Reduction Act of 1995. In many cases, the non-major rules are the ones most in need of oversight because agencies tend to ignore these statutes which are intended to maximize public participation in the rulemaking process.
Any further debate about the Act will only serve to keep Congress from implementing it. Those who oppose the Act are more than willing to continue to create obstacles to keep Congress from the task at hand, fully cognizant that efforts to improve the regulatory process will suffer if Congress does nothing with this new authority.
To send a clear signal to the federal agencies, Congress must show its resolve and move forward with its implementation of the Act and resist any efforts to change it. To give operational bite to its use of the Act, Congress should take the following steps:
Establish a coordinated committee review mechanism. Effective implementation of the congressional review of rules requires a serious commitment to establish mechanisms for identifying, prioritizing, and challenging agency rulemaking. To do this, Congress should first establish a coordinated mechanism--ideally including one committee in each house that has special technical and legal expertise on the complexities of the regulatory process--to keep track of the rules submitted. These committees should have both the institutional legal authority and the political stature to serve as the coordinator of the CRA process in each house of Congress. The functions of the coordinator committee would include making sure that the agencies and the GAO follow the requirements of the Act; keeping track of the CRA process in each of house of Congress; and coordinating the review of rules and joint resolutions of disapproval. At the same time, individual committees should take the lead in oversight of specific agency regulatory activities.
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The overall purpose of the CRA is to alter the regulatory agencies' behavior, in part, by creating a realistic threat that Congress can quickly pass a joint resolution of disapproval. A coordinated review process in each house would make the threat more credible. The ideal solution would be for both houses to appoint a Joint Committee or Task Force on Regulation that can help facilitate and coordinate the work of individual committees in both the House and Senate.
Establish criteria for congressional action. Once a review structure has been put into place, Congress must decide the criteria for identifying those rules that should be the subject of more careful congressional review and perhaps a resolution of disapproval. Possible criteria, many which already are part of the Clinton Administration's Executive Order 12886, Regulatory Planning and Review, might include the following questions:
Does the rule have a significant economic impact ($100 million threshold)?
Does the rule have a significant regional or industry impact (i.e., would one area of the country or industry be hit disproportionately hard)?
To what extent is the rule statutorily prescribed?
Is the rule consistent with the congressional intent in the legislation?
How does the rule significantly impact small businesses and individuals?
Was there an open rulemaking procedure and a complete and accurate rulemaking record developed by the agency?
Did the agency conduct a thorough examination of all reasonable alternatives, including the possibility of no regulation?
Did the agency evaluate both costs and benefits of the rule, and provide a complete explanation of why a certain alternative was selected?
Was adequate consideration given to economic incentives and market mechanisms?
Were the best available scientific and unbiased risk assessments incorporated?
Were opportunity costs (i.e., tradeoffs) examined to maximize protection of the public health and the environment?
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Is the rule an unfunded mandate?
Is the rule easy to understand; and to what extent will it encourage litigation?
Do minority/ethnic groups or the poor suffer disproportionately as a consequence of the rule?
These criteria represent reasonable questions to ask in the regulatory decisionmaking process. Too often, federal regulators fail to ask such commonsense questions. Congress should do so. The Congressional Review Act gives Congress the ability to hold federal regulators more accountable to the public for the rules they produce and to make sure rules are developed with maximum public participation.
Task the General Accounting Office to undertake more in-depth reviews of questionable rules. The GAO, as a legislative research arm of Congress, has resources that should be more effectively leveraged to implement the Act. To date, the GAO has filed more than 50 major rule reports to Congress. However, the GAO currently is only required to provide little more than a checklist of whether each agency addressed the requirements, rather than give an assessment of the quality of the agency's analysis. Federal agencies should be reporting this information to GAO in a standardized format that is easily understandable to the public. Similarly, GAO should maintain and transmit such standardized information to Congress.
Congress should task the GAO with conducting a more detailed assessment of major rules. The GAO is not required to make a determination of whether an agency's determination of its own compliance is accurate or not. The White House Office of Information and Regulatory Affairs receives rules for reviews as well as underlying analyses that support the rule. The GAO should as well. When the GAO submits its report to Congress, it should indicate whether it is of the opinion that some of the agency's conclusions are questionable and worthy of more in-depth review. If this were done regularly, Congress could ask GAO to conduct a much more thorough review of the underlying analysis that guides an agency's decision.
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Devote staff to monitor and challenge agency rules more effectively. Since Congress has decided to give itself new responsibilities, it needs to devote the resources to carry these tasks out successfully. Congressional committees should allocate or reallocate some of their staff resources to monitoring agency rulemaking.
Hold oversight hearings and ensure adequate time for preparation and testimony. Effective oversight and congressional hearings on agency regulatory activities require adequate preparation time and often require detailed research. Oversight hearings should be scheduled and undertaken by congressional committees only when the objective of each hearing is clear. Because appropriately conducted congressional review takes time, Congress must make sure it takes the necessary steps early in the process to implement the appropriate mechanisms for coordinating, identifying, targeting, focusing, and communicating on important regulatory proposals.
Committee staff also should take advantage of other resources--like public policy research organizations and the academic community--to analyze and track these issues. These groups can offer alternative perspectives and analyses of the rules.
Take the message beyond the Washington Beltway. Examples of how federal regulators have made decisions that have harmed the public, and of alternatives that they failed to consider, need to be communicated back home in the congressional districts and by the local media. Too often the need for change is not at all obvious to the public. Effective oversight--as part of the implementation of congressional regulatory review authority--frequently offers excellent opportunities for Members of Congress to uncover important information that should be disseminated back home to help them make the case for change.
The 105th Congress declared that it would be the ''implementation Congress.'' To make this description meaningful to the American public, Congress must make aggressive use of the Congressional Review Act, as it is currently written. The Act itself is critical to the success of future regulatory reform efforts. Success should not be measured by how many resolutions of disapproval are introduced or on how many rules become law. The test should be whether or not Congress increases its scrutiny of rules being promulgated, and whether unelected federal regulators pay more attention to the public criticisms of their rules once a formal mechanism exists in Congress to review and accept or reject those rules.
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The Heritage Foundation is a non-profit educational, public policy research organization operating under section 501(c)(3) of the Internal Revenue Service Code. It is privately supported, and receives no funds from any government at any level, nor does it perform any government or other contract work.
The Heritage Foundation is the most broadly supported think tank in the United States. During 1995 it had more than 200,000 individual, foundation and corporate supporters representing every state in the U.S. Its 1995 contributions came from the following sources: Government 0%; individuals 52%; private foundations 29%; and corporations/company foundations 5%.
No corporation provided The Heritage Foundation with more than 2% of its 1995 annual income. The top five corporate givers provided The Heritage Foundation with less than 5% of its l99S annual income. The Heritage Foundation's books are audited annually by the national accounting firm Deloitte and Touche. A list of major donors is available from the foundation upon request.
Members of The Heritage Foundation staff testify as individuals discussing their own independent research. The views expressed are their own, and do not reflect an institutional position for The Heritage Foundation or its board of trustees.
Mr. GEKAS. Yes, thank you. The Chair will yield itself the customary 5 minutes for the first round of questions.
Mr. Gray, did you imply or state in your testimony that with respect to the EPA Ambient Standards expected rule, which will be a major rule and thus come under the aegis of this law. It may also be compromised by the fact that they make decisions within the EPA as to whether or not some other portion doesn't apply to small entities or small business? That's intriguing to me because we don't want to prejudice the look-see at the rule.
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Mr. GRAY. Yes, sir, Mr. Chairman. I think they prejudice both the look-see of Congress and of the courts, too, in terms of the record and the rulemaking proceeding because they've told and promised extraordinary benefits to the public, but they've told the people who are going to have to pay for those benefits, ''Hey, don't worry; nothing's going to happen.'' So, they're only getting one side of the picture coming in to you and to the record, and I think this is quite a disjointed process.
I don't see--it's the same statute, after all, the SBREFA small business review amendments and this Congressional Review--it's the same statute. And they're interpreting it differently depending on the provision.
Mr. GEKAS. Well, won't we have the capacity to rectify that by employing the congressional review of the act?
Mr. GRAY. Yes, sir; you'll have the authority under the statute to rectify it, but all I'm saying is the input into that process is severely compromised because the vast bulk of the people who are going to be adversely affected are not going to tell you that they are adversely affected. And so, your decision to act may be less firm than it might be.
Am I making any sense? I mean, you're hearing only from one side.
Mr. GEKAS. I'm hoping you're not saying that a full inquiry by the Congress into all aspects of the final rule will not also include sifting out these little ambivalent situations with small business that the agency has first determined. Don't you have confidence in us to sift all that out? And then if we file a disapproval resolution that that would be taken into account?
Mr. GRAY. Well, I hope that's what happens, Mr. Chairman.
Mr. GEKAS. I do, too.
Mr. GRAY. All I'm saying is that it's more difficult when the agency says----
Mr. GEKAS. I understand; thank you.
Mr. Strauss, the recommendation that you made that we change or contemplate changing the law to say that the second time around, when the agency resubmits, you take it that the reading of the law now contemplates a new statute in order to get the agency to move again.
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Mr. STRAUSS. That's what it says.
Mr. GEKAS. I don't share that. I hope you can't convince me that you're correct, but you may.
Mr. STRAUSS. If I can find----
Mr. GEKAS. And do you believe that that should be modified--to allow a modified return of a rule with an explanation would be the best way to do it, rather than to reenact?
Mr. STRAUSS. This is 801(b)(2).
Mr. GEKAS. Yes.
Mr. STRAUSS. ''A rule that does not take effect or does not continue under paragraph 1, '[that is because a joint resolution of disapproval has been enacted,]' may not be reissued in substantially the same form, and a new rule that is substantially the same as such a rule may not be issued unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule.''
Mr. GEKAS. That would apply if all the other ''ifs'' weren't extant.
Mr. STRAUSS. No, there's no other ''if.'' And later on in the statute, in subsection (g), you say that even if the Congress gets a rule a second time and is quite happy--there's no joint resolution of disapproval--no court can pay any attention to the fact. A court can give no weight whatever to the fact that there has not been a joint resolution of disapproval enacted the second time. Now, if I'm sitting as a Federal judge, section 801(b)2 tells me they don't have authority without a new statute; section 801(g) tells me to ignore the fact that there wasn't a joint resolution of disapproval. Really, I have no choice. The agency has no authority to act unless Congress has passed a new statute.
In my testimony, I tried to set out at greater length than I imagine would be profitable for us to go into here, the proposition that what Congress has done here may be constitutionally objection-able. You have, in effect, delegated to the courts authority that really is Congress'. If you amend statutes, we hope you'll provide us with the text of your amendments, and not just say, ''No you can't do this; courts, you should figure it out.'' But, this aspect of the statute is truly unwise, in my judgment.
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Mr. GEKAS. We'll take that under advisement, because that is the purpose of our subcommittee, to try to plan ahead. I just believe that perhaps the language is adequate and will not prevent a resubmission without a new congressional act.
Mr. STRAUSS. Well, but if your reason for disapproving----
Mr. GEKAS. Yes.
Mr. STRAUSS [continuing]. Was that the agency failed to engage in an analysis, then you would expect them to go back and engage in the analysis, and if it was an adequate analysis and they came back with the same rule, you would think that was fine. The statute doesn't permit you to do that.
Mr. GEKAS. Well, all right.
The Chair will yield itself an additional minute in the first round just to ask Professor Pierce, do you really believe that the Congress will retreat from its intent to include minor rules in the overall subject matter of this law? They can be more devastating to the general public and to special interests than major rules can, can they not?
Mr. PIERCE. I don't take pride in my ability to predict----
Mr. GEKAS. Didn't you----
Mr. PIERCE [continuing]. The actions of Congress, so I would hope that the Congress would do that. And, there are a couple of things here that I think are worth noting. One is simply the shear volume problem. This act, I am convinced, will become moribund and simply breed cynicism if it seems to say that we are reviewing 20,000 actions a year, when, in fact, everyone in this city and throughout the country, to the extent that they know that the act exists, knows that that is not happening and it cannot happen. The second is----
Mr. GEKAS. Well, can't that be cured by a steady outpouring of information from the congressional side that we're not engaged in this law in order to review every rule, but rather to make sure that the agencies submit them to Congress so that in the course of a term of Congress, when something comes to our attention that has been submitted, that we can hone in on it.
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We're not expected to, nor can we expect the public to believe that we're going to review, as Members of Congress, every single rule. I don't think that was the purpose of the act. The act does not say that we must review every rule that is submitted, but rather we are given the chance to do so, or the predisposition that might be possible before a rule is finally promulgated.
Do you get the distinction that I'm trying to get across? I'm not trying to fool the public that we're going to read every rule that is submitted.
Mr. PIERCE. I think I get your point. I guess the problem I have, if I can illustrate it in a couple of other ways--Professor Strauss and I agree that we're talking somewhere around 15,000 to 20,000 rules. Now, you've heard some description earlier today about some of those. You've got hundreds of rules that involve changing the schedules of openings of bridges. I can't imagine why you need those, why you'd ever want them. You've got hundreds of rules that approve new food additives. Who cares? Why do you need them?
Mr. GEKAS. Professor Pierce, any one of these little minor rules can wreak havoc in a small community someplace if we didn't have the purview of this act, in which a responsible Member of Congress from that area comes to this subcommittee, or to a relevant committee of jurisdiction, and says, ''Look what's happening in my community because of this rule.'' Then, we have a chance to try to help that Member to solve that particular situation, which we otherwise might not have if what you say is correct.
One of the major complaints we've had over the years is about an unintended result of a rule, as in legal services, as in a hundred different examples. This makes Members of Congress, first of all, mad, and then, secondarily, we try to remedy a situation by post-rule new statutes and new actions that drive everybody crazy and become ineffectual.
But here we have a chance, in that same situation, because the rule has been submitted to us and when it is now brought to the attention of a Member of Congress that a small community is adversely affected, and though it's one of thousands of rules that have been submitted, it immediately can become a focus for action by a Member of the Congress. I think that's a virtue.
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Mr. PIERCE. I don't see how you need anything in this act to address that kind of problem. That kind of problem the Member is going to know about because his constituents will have told him about it.
Mr. GEKAS. But what's his remedy? How can he--I've seen this happen; it's happened to me. I've had to introduce new law to try to cover a flaw that has occurred, in my judgment, by the promulgation of an unsavory rule. I'm saying to you, isn't there a salutary effect if we have a rule that is submitted to the Congress caught by the affected local entity as being adverse to its interests and to the community at large? And now I have the immediate remedy of promulgating a resolution of disapproval. Isn't that better than the former situation?
Mr. PIERCE. As I understand it the remedy isn't different, at least in the House of Representatives, where there is no change in House rules. I don't understand the difference between introducing a bill that has to go through the decisionmaking process and introducing a joint resolution of disapproval that has to go through, at least in the House of Representatives, exactly the same process.
Mr. GEKAS. Well, I do not think that it's the same. I think that we have, in effect, an expedited procedure to bring about a remedy from the way a statute is worded.
Well, I've taken too much time at the moment.
Ms. ANTONELLI. Mr. Chairman.
Mr. GEKAS. Yes?
Ms. ANTONELLI. Can I just respond to your question?
Mr. GEKAS. Yes.
Ms. ANTONELLI. I mean, I think one of things--we talk about 20,000 rules--I think that information alone is probably eye-popping to a lot of people when you stop and realize how many thousands of rules, whether they be major or minor, are issued by Federal agencies every year.
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For some of the minor rules, again, the question gets back to, if it's a bridge opening, if it's a lobster race, if it's a polar bear trophy, why does the agency need to do this anyway? And they spend a lot of money doing it. And I would go back to a more basic question of not whether it's major or minor, but is this something the Federal Government and Federal agencies need to be spending money doing to begin with?
And having this kind of information flow through Congress, and, more importantly, maintaining a comprehensive data base, allows you to look at those kinds of situations. I think it's entirely consistent with efforts to try and transform Government, to make it work more effectively, to make it cost less, which is entirely consistent with what the administration has been trying to do. And also, in terms of the agencies' arguments for how much it's going to cost them to carry this out.
If every agency--it costs them between $100,000 and $200,000 a year, either in terms of people and so on, I would say, so it's a $1 million a year cost to the agencies to do this. The reality is one multibillion-dollar regulation that is changed that saves billions of dollars clearly will have been worth the effort in terms of agency resources devoted to it.
Mr. GEKAS. We'll come back to a second round. I've overstayed my presence here.
The gentlelady from Texas is recognized.
Ms. JACKSON LEE. Thank you very much, Mr. Chairman, and I beg your indulgence if I go over slightly because this is a very interesting panel. Let me, before I begin, just reemphasize the value of this hearing and to thank the chairman again for having it, and I noticed in someone's comments, for having it so quickly.
Let me just say, Ms. Antonelli, I'd like to save millions of lives. So I think that we can match--I'd match millions of lives with dollars with you any day. I do think that is some----
Ms. ANTONELLI. If I could just quickly respond. It's not a question of----
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Ms. JACKSON LEE. Excuse me; I will ask you a question when I'd like you to respond. Thank you very much.
I do think it is important to acknowledge that we in Congress have taken up the sensitivity and responsibility of reviewing regulations, and I'm very proud to say that much of that was done in a bipartisan manner.
I just recently had the opportunity to visit with European parliamentarians, as well as meet the governing leadership of England, and I think there is no disagreement that in a number of years we'll probably see a sizable number or percentage of humans with mad cow disease in England. And one of the outcries and the concern was they wished that they had had more regulations to be prohibitive of such a tragic and terrible occurrence.
Now, I noticed that Mr.--is it Auchter?
Mr. AUCHTER. Auchter.
Ms. JACKSON LEE [continuing]. Mentioned, and I agree with you, that Congressional Review is a win-win statute in which all of the participants in the regulatory process--agencies, stakeholders, and Congress--can benefit.
And you, Mr. Gray, have indicated that Congress has a review function which it must continue to exercise--and, of course, I paraphrased or have taken a portion out of your statements--and I agree with that as well. I don't necessarily agree with the approaches that you all have offered--Ms. Antonelli, in fact, raising the issue of reviewing major and minor regulations, and the policy question of whether we should have polar bear medals is exactly that. The act deals with the procedure and the process, and witnesses who were here earlier mentioned that the agencies had cooperated.
So, I will come to a question, but I do think that I need to acknowledge, as I look at Mr. Auchter's record when he was Administrator for OSHA, it seemed that he immediately went to reducing regulations dealing with workers' exposure to carcinogens like asbestos and formaldehyde and the now notorious EDB. I also noticed in the midst of Mr. Gray's testimony, that he works and weaves throughout his testimony today on process, his attack on the EPA.
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There is certainly a notation in the article that suggests that many Republicans in Congress will be using this law to attack the EPA proposals. This is not an objection to anyone's right to object to them, but I'm very much concerned as to whether we have sort of a conflict of interest here on the part of several of the folks who are here.
So, Mr. Gray, my first question is, have you been retained to lobby against the EPA's ozone PM rulemaking, criticized in your testimony, and could you detail for the committee your fees that you're getting in your firm to do that? Because I might think that you are in conflict on this process question, if we're discussing the specifics, you know, of EPA rulemaking. That's my question to you on that.
And then I'd like Mr. Auchter to answer whether or not--you've mentioned that you're not a recipient of any Federal grants, but do you have--this particular Center for Regulatory Effectiveness--do you have contracts with any Government grants? Or do your donor organizations receive any Government grants or contacts?
And, Mr. Gray, if you would answer first, please.
Mr. GRAY. It's a matter of public record that I do have a client here, and so if that makes it a conflict of interest then I plead guilty. But I still stand by what I've said, that I think that the consideration by Congress of this rule has been compromised by the way EPA has interpreted it--one way for purposes of part of the 1995 statute and another way for purposes of this part of that statute.
Ms. JACKSON LEE. You do think, however, that, as you've said in your statement, congressional review is appropriate. You do think, however, I would hope, that the agencies have a right to promulgate regulations; that is their authorization. And, in fact, the procedures in place, if we follow the opportunity for the Congress to have oversight, that all is well.
Are you suggesting that we need to do more to carry the burden of those who are against regulations, period, because it doesn't help their clients?
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Mr. GRAY. No. My point was simply that the oversight function provided by both the courts and the Congress has been somewhat compromised here in my opinion, here, because EPA has told the vast small business community, which is the principal vehicle that will have to achieve compliance, has told them not to worry: ''Don't worry; nothing's happening with this rule. And then we're not going to tell you what the impacts on you are going to be because there are no impacts, yet.''
And so, they're going to sit by and not do anything to tell you what their concerns are, to tell the courts what their concerns are. That's my only point.
Ms. JACKSON LEE. Well, and you raise a legitimate point. I can only rely on those who are working directly with the agencies who have indicated that they are cooperating, and that's the basis of this rule, this particular act. It's to have Congress and the agencies cooperate and to get information where necessary, and I believe that process is in place.
Let me ask Mr. Auchter about--and let me be clear on my question, which is to provide the subcommittee information concerning whether or not your donor organizations receive any Government grants or contracts.
Mr. AUCHTER. I wouldn't know. I don't think so.
Ms. JACKSON LEE. Are you able to provide us with that definitive answer?
Mr. AUCHTER. I can ask them.
Ms. JACKSON LEE. I'd appreciate it.
Mr. AUCHTER. Sure.
Ms. JACKSON LEE. Professor Pierce, do you agree with Professor Strauss when he argues that in cases where an agency rule is disapproved, the law creates a cloud of uncertainty regarding the agency's authority to issue subsequent rules? Are you all in agreement on that?
Mr. PIERCE. Yes.
Ms. JACKSON LEE. And would you offer to us a suggestion that might remedy that particular confusion or cloud that hangs over that possibility?
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Mr. PIERCE. Well, I would endorse the proposed change that Professor Strauss urged in his testimony.
Ms. JACKSON LEE. Professor Strauss, would you just restate for the record what you are offering as a suggestion?
Mr. STRAUSS. Yes. Section 801(b)(2) should be amended to say that on readopting a rule or a substantially similar rule, the agency is obliged to include in its statement of basis and purpose a full explanation of its reasoning in doing so, instead of saying that it required fresh authority to reissue the rule. Then Congress would be fully apprised, and there would be a simple requirement on the agencies that the courts would be able to enforce.
Mr. GEKAS. The time of the lady has expired.
Ms. JACKSON LEE. I would ask the Chair to yield me an additional minute.
Mr. GEKAS. I will so grant.
Ms. JACKSON LEE. I thank the Chair.
I'm sorry, were you finished?
Mr. STRAUSS. Yes.
Ms. JACKSON LEE. Ms. Antonelli, you have mentioned the Heritage Foundation representation of the review of all of these agency rules, as I understand your testimony--you might want to correct it. How would you offer to fund and to provide the resources and to account for the time of the Congress spent on the reviewing of minor rules?
Let me, with a sense of humor, acknowledge that we did vote on the Ten Commandments yesterday, but I do think that we will find a greater need for the utilization of congressional resources on very serious, national issues. You would have us delve into all manner of regulations, and how would you finance it, staffing and other resources?
Ms. ANTONELLI. I don't think it requires any other resources. Obviously, in my own personal opinion, my goal is to reduce Federal spending and make sure that the Federal Government's role is proper and what it should be. I don't think it's necessary at all. And on balance, if you look at the size of the Federal budget, the money is there. It should be reprioritized. It should be spent on targeting problematic rules and reducing the burden on the public, and the millions and billions of dollars of costs that the Federal Government imposes every day on businesses and individuals.
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So, to the extent that the agencies will complain about having to spend one or two of their 300,000 or 400,000 FTE's on regulatory issues that cost $677 billion a year, I have no problems with that. And on balance, I think, overall, in the long run, it will reduce Federal spending and it will reduce the burden on the public sector, on the private sector, on businesses and individuals. So, I have no problems, and I don't see any net increase in spending.
Ms. JACKSON LEE. The Heritage Foundation, then would support shifting money spent for defense over to additional agencies like the EPA----
Ms. ANTONELLI. It doesn't have to come from----
Ms. JACKSON LEE [continuing]. And Health and Human Services.
Ms. ANTONELLI. It doesn't have to come from defense. You can look at the Heritage Foundation's budget. It will list hundreds of wasteful Federal programs which clearly could finance something far more of a higher priority and greater benefit to people and save far more lives than what the Federal Government is currently wasting money on.
Ms. JACKSON LEE. I would welcome your report. I would question whether your report would save lives, but I do welcome it and would be happy to entertain it. I thank you.
Ms. ANTONELLI. I'd be happy to send you our budget proposal, as well.
Mr. GEKAS. The time of the lady has expired. The gentleman from Massachusetts is recognized--oh, and we note the presence of the gentleman from Ohio, Mr. Chabot. Is the gentleman from Ohio----
Mr. CHABOT. I'm ready.
Mr. GEKAS. Oh, all right; then we'll switch engines here. The gentleman from Ohio is recognized.
Mr. CHABOT. Thank you; I'll try to be relatively brief.
Mr. Gray, I'd first just like to say that your service as counsel to President Bush is looking better and better all the time. I know the job of White House counsel can sometimes be a very thankless job, but certainly it appears as though we really owe you a debt of thanks for steering the former President clear of some of your successors, what they found, at least, to have been relatively murky waters. And I think you're to be commended for the service that you provided President Bush.
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Mr. GRAY. Thank you.
Mr. CHABOT. Your prepared testimony makes a number of very good points with regard to the proposed EPA regulations, but let me ask you a basic question. You say that the proposed rulemaking raises serious constitutional issues regarding the standard list delegation and so forth. What's the bottom line? Is the EPA proposal, in your opinion, constitutional as it stands, or not?
Mr. GRAY. I'm not a judge, but I certainly would argue that it's got very serious constitutional problems. It's just so broad that nobody knows how it can be enforced. It may be totally unenforceable, in fact.
Mr. CHABOT. Could you elaborate further on the costs of the proposed EPA rule and on how good a job the EPA has done in analyzing what those costs are going to be?
Mr. GRAY. Oh, gosh; this could take forever. But I could say this, that their own contractor stopped counting at $1 billion per micron. I don't want to get technical about this, but the calculation that has been made public of $8 billion a year contains a cutoff point where they just simply stop counting the costs.
And if you took everything into account, they acknowledge that one region of the country--the Midwest or Northeast--is about $20 billion; the Rockies is something close to that. And if you averaged it, it probably would be $100 billion a year, according to their own contractor. So that's EPA's own numbers, probably in the neighborhood of $100 billion a year.
Mr. CHABOT. Many of us have argued that there certainly should be a cost-benefit analysis done, which is lacking, and if sound science is not driving the EPA on this, what do you think is?
Mr. GRAY. Gosh, I wouldn't want to speculate. I mean, I think they're sincere; I'm not questioning their sincerity. I just wish they had a lot more data. They're asking you--not this committee--but they're asking Congress to appropriate another $26 million to resolve, ''great uncertainties,'' surrounding the rule.
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Well, if they have so many great uncertainties for which they need more research, then I think--my view is they ought to take the money, put it into research, and then consider issuing a rule after they've finished the research and after they've resolved some of these great uncertainties.
Mr. CHABOT. You also mentioned in your testimony that there's a lot of vulcanization dealmaking going on and things. Would you discuss that a little bit more? What do you think is actually going on in that respect?
Mr. GRAY. Well, a lot of it is rumor, so I can't--I don't want to be too precise because I don't want to be held to being able to prove every single--but the usual business of dividing and conquering, playing one industry off against another, one area of the country off against the other--high sulfur, low sulfur, natural gas, cars, gasoline, small business, big business--that kind of thing is going on, and I'm told, and some of the governors are being told, ''Not to worry, not to worry; we'll take care of you. We'll give you delays on your State implementation plans.''
I know the furniture industry, which just finished a very lengthy--that's from my part of the country where I came from originally, North Carolina--just finished a big regulation negotiation on VOCs pursuant to the existing standards--very painful. They're being told, ''Don't worry; we will work things out with you. We don't want you getting too upset about this rule.'' And maybe because a certain important individual in the White House happens to come from North Carolina; I don't know if that's the reason, but one could speculate.
Ms. JACKSON LEE. Mr. Chairman, I'm just wondering if this line of questioning is germane on the issue of process and what we're trying to discuss at this point.
Mr. GEKAS. If the discussion that we had previously on the EPA, and its particular role has to do with rulemaking, it is relevant. I will rule it in order.
Ms. JACKSON LEE. Thank you, Mr. Chairman.
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Mr. CHABOT. You can continue, Mr. Gray.
Mr. GRAY. I don't--I think that's--I've been told they've gone to various offices and said to the people with concerns about coal employment and mine workers, that, ''Don't worry; we are going to re-institute the old NSPS rule for scrubbers, and that's going to make it better for you than it has been in the past. That's very disturbing. They have refused, as my testimony points out, to acknowledge that they should put in a trading system which would have a level playing field, a flexible way to meet the standard. If you don't have trading, if you don't know enough do to trading, you don't know enough to regulate to begin with.
Mr. GEKAS. The time of the gentleman has expired.
Mr. CHABOT. Thank you, Mr. Chairman.
Mr. GEKAS. The gentleman from Massachusetts is recognized for 5 minutes.
Mr. DELAHUNT. Thank you, Mr. Chairman.
In terms of the EPA, Mr. Gray, to your knowledge, under the provisions of this particular statute, they have been appropriately transmitting copies of the rules to GAO and to Congress. Is that correct?
Mr. GRAY. Yes, sir.
Mr. DELAHUNT. So, my sense is that your dissatisfaction with the EPA is the rulemaking process that's going on now conducted by the EPA.
Mr. GRAY. Well, yes, sir. That's separate. What I was trying to say in my oral testimony was that there are two parts of the statute that you passed a couple of years ago. One is the congressional review that we're discussing now.
Mr. DELAHUNT. And that's what we're talking about, the congressional review.
Mr. GRAY. That's right, but the other part of the same statute is the small business, and while----
Mr. DELAHUNT. But today this oversight committee--this hearing on oversight was directed to the CRA.
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Mr. GRAY. Right.
Mr. DELAHUNT. It was not to the other section of the statute.
Mr. GRAY. No, but your ability to get inputs about your----
Mr. DELAHUNT. Again--and I respect and appreciate the fact that you're educating me like the chairman on much of what has occurred in past Congresses--but, in fact, the hearing here today is on the process or the procedure within the purview of the CRA, and there, I take it, you have no problems----
Mr. GRAY. No problems.
Mr. DELAHUNT [continuing]. With the EPA.
Mr. GRAY. No problem.
Mr. DELAHUNT. No problems, whatsoever. You know, according to the testimony of Professor Strauss and Professor Pierce regarding--I think it was Professor Pierce and I'm going to quote from his testimony: ''Congress should commit its resources only to review of major rules.'' Clearly, the rule that you are concerned about that will at some point in time be promulgated by the EPA would be classified as a major rule.
Mr. GRAY. They said so this morning, yes, sir.
Mr. DELAHUNT. So they said so this morning.
Mr. GRAY. Oh, yes.
Mr. DELAHUNT. So in fact you have absolutely disagreement as far as the CRA section of the particular statute that was passed?
Mr. GRAY. They've told you it's a major rule, but they've told the major part of the public that it's not; that's all. That's my only point.
Mr. DELAHUNT. And I presume, now that it's been defined and promulgated as a major rule, that we have, for those who disagree with whatever that rule is, we have the availability under the CRA to attack that rule. You'd concur with that?
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Mr. GRAY. Yes, but you usually need facts to attack a rule, and those facts do involve impacts on small business because that's the biggest impact.
Mr. DELAHUNT. Right, and I presume that those Members of Congress who disagree with the rule will bring to the attention of the House of Representatives and the Senate those facts and its detrimental impact, if any, to small businesses. I would hope that that would be the procedure.
Mr. GRAY. Yes, sir; I would hope so, although I've reiterated that too many times.
Mr. DELAHUNT. Let me ask just one other question. Just from the question of resources and the testimony from both Professor Strauss and Professor Pierce and others that testified in earlier panels, the volume of material and the limited resources that we have in Congress, would you concur with the recommendation of Professor Pierce that we should really only be focusing our efforts on major rules such as the rule to soon be promulgated, if it is promulgated, by the EPA?
Mr. GRAY. No, sir, because the safe implementation plans are extremely part of it, and they should be considered major rules if, in fact, they otherwise meet the definition.
Mr. DELAHUNT. OK, but presuming that they are major rules?
Mr. GRAY. Then that's fine.
Mr. DELAHUNT. Then you don't have a problem with----
Mr. GRAY. Oh, if you generally said the 60-day clock? I don't know. I think everything ought----
Mr. DELAHUNT. Well, you've had a lot of dealings with Congress over the years, and again, I would also concur with my colleague from North Carolina; your service in the Bush administration deserves to be praised. But at the same time I'm sure that you're aware that we have limited resources here, and for Congress to be reviewing such rules as drawbridge openings and other so-called minor or insignificant or routine rules I would suggest is an inappropriate use of limited resources.
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Mr. GRAY. Yes, sir. It's just, Congressman, it's very difficult to define. I mean it's like Sally Katzen said of Justice Stewart, ''You know it when you see it.'' You know a rinky-dink rule when you see one that shouldn't take your attention.
Mr. DELAHUNT. Right.
Mr. GRAY. But you'd be surprised how the agencies can cram a lot of pretty important stuff into a, ''minor rule.''
Mr. GEKAS. The time for the gentleman has expired, and the time for the entire panel has expired. The Chair has expired. [Laughter.]
Mr. DELAHUNT. Mr. Chairman, I thought we were going to have a second round here.
Ms. JACKSON LEE. If I could get 1 minute, Mr. Chairman. I will hope that you will not expire on 1 minute.
Mr. GEKAS. I hope this doesn't establish a precedent that when we're trying to conserve time that we have continuous requests, but I will yield.
Mr. DELAHUNT. Mr. Chairman, I want to acknowledge that this is a very important matter.
Mr. GEKAS. No question about it.
Mr. DELAHUNT. And I want to applaud the Chair for bringing this distinguished panel together. It has been for me, particularly, extremely educational.
Mr. GEKAS. Let's have a 2-minute round, an additional 2-minute round for each member. Two minutes are granted to the gentlelady from Texas now.
Ms. JACKSON LEE. Mr. Chairman, you're very kind. Just to--I'm sorry the kind gentleman and colleague from Ohio has--I don't think--to go to another meeting. But I do remember in our discussion on this act one of the important points that was a bipartisan point was the cost-benefit analysis that is extremely important in some of the rulemaking, and I think Congress has a right to review that.
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I have a study that was done that indicates, rightly so, that the costs of the proposed standards, if we're talking in this instance of EPA, is about $8 billion, but that it has been assessed that the benefits were valued at $120 billion. I just raise that--we can all be in dispute, but certainly Congress can review these numbers. And I think working and being concerned about asthmatic kids is something that is valuable.
But I would ask Mr. Gray, if we might, other than circumventing certain Senate dilatory procedures which presumably could be circumvented if opponents of the rule had enough votes to override a Presidential veto, what new ability to exercise control over the rulemaking process does Congress get that it did not previously possess? What is your perception of what we get? You must see something positive in what we get.
Mr. GRAY. Oh, yes, yes. I hope I haven't been negative. The most important thing is the 60-day delay, (a), and then secondarily the expedited procedure, the fast-track procedure for consideration of a motion. Those are the two most important things, and they're very valuable.
Ms. JACKSON LEE. I think the 60-day delay is an extremely important tool, and my question was just following the line of Mr. Delahunt that, in terms of process, we do have something here with this Congressional Review Act. And if there is individual concern about rulemaking or rules, we can respond to it.
Mr. GRAY. Oh, yes; so I don't mean to be negative about the act.
Mr. GEKAS. The time of the lady in the second round has expired.
Ms. JACKSON LEE. Thank you, Mr. Chairman.
Mr. GEKAS. The gentleman from Massachusetts is recognized for, I hope, the final two minutes.
Mr. DELAHUNT. Thank you, Mr. Chairman, for your indulgence.
Professor Pierce, let me just say that I agree with your analysis of where we ought to go in terms of, again, utilizing limited resources, and I do see the benefit of this act.
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Well, I'm going to conclude my questioning. Thank you.
Mr. GEKAS. We thank this panel for its patience, for its testimony, and for what I presume to be its continued interest in responding to our questions that we may submit to you in writing or by telephone call sometime in the near or far future. We thank you. This has been an excellent hearing.
Before we adjourn I would like to add the statement from the Alexis de Tocqueville Institution and additional comments from the Center for Regulatory Effectiveness be made part of the hearing record, as well as questions.
[The prepared statement and letter follows:]
PREPARED STATEMENT OF JOHN C. SHANAHAN, VICE PRESIDENT AND COUNSEL, ALEXIS DE TOCQUEVILLE INSTITUTION
Mr. Chairman and Members of the Subcommittee, thank you for the opportunity to present this written testimony on the important subject of Congressional Review. I present this testimony on my own behalf and not as a representative of the Alexis de Tocqueville Institution.
The Congressional Review Act is potentially an important tool to reign in federal regulators, who have increasingly pushed the boundaries of the authority granted them by Congress. Nevertheless, the law should be strengthened. Rather than explain here the reason and history for needing such power, I also am submitting for the record an AdTI study entitled ''Congressional Review: Why It Exists and How to Make It Work.'' Congressional Review likely will be an extremely useful tool whenever there is widespread bipartisan support for rejecting senseless regulations. In these situations, legislators with the facts at hand will act as an effective check on burdensome regulations that serve little actual or perceived public good. Thus, the Congressional Review Act is a major step forward in Congress' efforts to better control the legislative agenda.
Congressional Review, however, has its limitations. When an issue is contentious, the law as currently administered in Congress is likely to achieve little. Even if a resolution to disapprove is passed by Congress, rarely could Congress override the almost certain exercise of the veto pen. After all, these agency actions tacitly have the support of the Administration. There may be some situations where the Administration acted inadvertently or misread the political ramifications of a particular action, leading it to allow the disapproval to stand, but these situations will be very rare. Given the almost certain defeat of a contentious measure, many Members will strive to avoid becoming mired in a particular controversy unless the principle is clearly advantageous to them politically. Thus, few contentious measures will make it to the floor for a vote, let alone win passage.
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It also is clear that several agencies are working hard to skirt the spirit of the law. In some cases, it appears that they have violated its specific requirements as well. Several General Accounting Office opinion memorandums have found agencies to have improperly withheld information. In another type of violation, the Department of Health and Human Services (HHS) went so far as to have improperly set the effective date for a Physicians fee rule within 60 days of publishing it even though major rules cannot become effective for 60 days. They claimed the rule fell under an exception that allows a sooner effective date when delay is unnecessary or contrary to the public interest. But for purposes of the Administrative Procedures Act, HHS decided that it did not meet that test.
Congressional Review, as currently enacted, can be made a more effective tool in contentious situations. Currently, Congress gives too little attention or support to oversight of agency compliance and coordination of efforts to reject ill considered agency actions. Without increased support of these efforts, this law may well overwhelm Congress by the sheer volume of agency actions that take place. Likewise, without coordination of these rules through a single committee, too many rules of concern to various Members will simply inadvertently slip through the cracks. Empowering a Committee to effectively oversee and coordinate this process, without limiting jurisdiction within the Committees of jurisdiction for the laws under which the rules are promulgated, would greater enhance the effectiveness of this law.
The law should be strengthened as well. The Congressional Review Act as passed improves Congressional control of agencies. But this is not enough. Despite better information from agencies and fewer legislative hurdles that must be overcome to bring a resolution for disapproval to the floor for a vote, the law still leaves the onus on Congress to actively reject agency actions. Like any other bill once it goes to the floor, these bills are subject to the dictates of the United States Constitution. The resolution must pass both Chambers of Congress by a majority. If not vetoed, the bill becomes law. If vetoed, each Chamber must override the veto by a two-thirds majority. This burden should be reversed.
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Article I, section 1 of the Constitution provides that ''All legislative powers herein granted shall be vested in the Congress of the United States, which shall consist of the Senate and House of Representatives.'' Executive branch of finials, on the other hand, were relegated under presidential power in Article II, section 3, to ''take care that the laws be faithfully executed.'' This separation of powers was one of the most important reasons for creating a Congress and Judiciary in addition to an Executive branch. Indeed, this separation was at one time so complete that Alexis de Tocqueville wrote that the Constitution ''gave representatives of the executive neither stability nor independence, and ... deprived them of what little influence the nature of democratic government might have allowed them to enjoy.'' Unfortunately, this separation is no longer the case.
Since Schecter Poultry in 1935, it has been clear that Congress has broad discretion to delegate legislative power to the executive. Indeed, Congress has done just that with increasing frequency and degrees of delegated authority. The agencies have exercised this license liberally. One need only to look at wetlands regulations promulgated ostensibly under sections 301 and 404 of the Clean Water Act to recognize how far agencies have stretched the boundaries of their delegated power. In short, they have created completely new law out of whole clothe. What is needed is a reversal of that trend. Only then can Congress regain the lawmaking reserved to it under the Constitution.
Congress should extend the principles embodied in the Congressional Review Act by reversing the burden for rules to become law. Agencies should not have the power to make law through rulemaking, guidelines, and directives unless Congress affirmatively rejects them by overcoming substantial procedural hurdles. Rather, agencies should merely present these ''laws'' for affirmative approval by Congress. If Congress fails to do so, then the rules would be ineffective. This would not violate the prohibition under Chadha barring Congressional veto. The amended Congressional Review law would control, and would nullify the effect of any rule unless affirmatively enacted as any other bill. As a practical matter of good governance, if the lawmaking body considers a rule issued pursuant to existing law to be so controversial that it cannot garner a majority, it is unwise in a democracy to impose it upon the people.
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If Congress did pass a bill with the agency rule language, it would be presented to the President for signature. In virtually every case, it would simply take a simple majority of legislators in each Chamber to enact a ''rule-law,'' since the President could be expected to sign his own Administration's rule that garnered the support of Congress.
It is unlikely as a practical matter that these rules would overwhelm Congress. It is likely that Congress would vote pro forma to enact these rules unless Members had substantial concerns. If necessary, however, the requirement of Congress approving these rules could be limited to agency actions with an economic impact of perhaps $10 million or more.
This ''anti-delegation'' concept represents the next important step in Congress taking back its Constitutionally vested legislative responsibilities.
Thank you.
INSERT OFFSET RING FOLIOS 79 TO 81 HERE
The subcommittee is adjourned.
[Whereupon, at 2:12 p.m., the subcommittee adjourned.]
40—524CC
1997
CONGRESSIONAL REVIEW ACT
HEARING
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BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
MARCH 6, 1997
Serial No. 5
Printed for the use of the Committee on the Judiciary
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
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F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
STEVEN SCHIFF, New Mexico
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB INGLIS, South Carolina
BOB GOODLATTE, Virginia
STEPHEN E. BUYER, Indiana
SONNY BONO, California
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRISTOPHER B. CANNON, Utah
JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
CHARLES E. SCHUMER, New York
HOWARD L. BERMAN, California
JERROLD NADLER, New York
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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
STEVEN ROTHMAN, New Jersey
THOMAS E. MOONEY, Chief of Staff-General Counsel
JULIAN EPSTEIN, Minority Staff Director
Subcommittee on Commercial and Administrative Law
GEORGE W. GEKAS, Pennsylvania, Chairman
STEVEN SCHIFF, New Mexico
LAMAR SMITH, Texas
BOB INGLIS, South Carolina
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
JERROLD NADLER, New York
SHEILA JACKSON LEE, Texas
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
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RAYMOND V. SMIETANKA, Chief Counsel
CHARLES E. KERN II, Counsel
C O N T E N T S
HEARING DATE
March 6, 1997
OPENING STATEMENT
Gekas, Hon. George W., a Representative in Congress from the State of Pennsylvania, and chairman, Subcommittee on Commercial and Administrative Law
WITNESSES
Antonelli, Angela, deputy director for economic policy studies, the Heritage Foundation
Auchter, Thorne, executive director, Center for Regulatory Effectiveness
Cannon, Jon Z., General Counsel, U.S. Environmental Protection Agency
Gray, C. Boyden, former White House Counsel, partner, Wilmer, Cutler & Pickering
Johnson, Charles W., III, Parliamentarian, U.S. House of Representatives, accompanied by Tom Wickham, Assistant Paraliamentarian
Katzen, Sally, Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget
McFadden, Nancy, General Counsel, Department of Transportation
Murphy, Robert P., General Counsel, General Accounting Office
Pierce, Richard J., Jr., Lyle T. Alverson Research Professor of Law, George Washington University
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Strauss, Peter L., Betts Professor of Law, Columbia University
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Antonelli, Angela, deputy director for economic policy studies, the Heritage Foundation: Prepared statement
Auchter, Thorne, executive director, Center for Regulatory Effectiveness: Prepared statement
Cannon, Jon Z., General Counsel, U.S. Environmental Protection Agency: Prepared statement
Gekas, Hon. George W., a Representative in Congress from the State of Pennsylvania, and chairman, Subcommittee on Commercial and Administrative Law: Letter dated March 13, 1997, from Center for Regulatory Effectiveness
Gray, C. Boyden, former White House Counsel, partner, Wilmer, Cutler & Pickering: Prepared statement
Jackson Lee, Hon. Sheila, a Representative in Congress from the State of Texas:
Excerpts from Office of Management and Budget report entitled ''More Benefits Fewer Burdens''
Submissions to Congressman Nadler's questions
Johnson, Charles W., III, Parliamentarian, U.S. House of Representatives: Prepared statement
Katzen, Sally, Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget: Prepared statement
McFadden, Nancy, General Counsel, Department of Transportation: Prepared statement
Murphy, Robert P., General Counsel, General Accounting Office: Prepared statement
Pierce, Richard J., Jr., Lyle T. Alverson Research Professor of Law, George Washington University: Prepared statement
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Shanahan, John C., vice president and counsel, Alexis de Tocqueville Institution: Prepared statement
Strauss, Peter L., Betts Professor of Law, Columbia University: Prepared statement
(Footnote 1 return)
5 U.S.C. chapter 8, passed in Title II, Subtitle E, of P.L. 104—121, March 29, 1996.
(Footnote 2 return)
The article is in the subcommittee files.
(Footnote 3 return)
Exhibit A is in the subcommittee files.
(Footnote 4 return)
Only a limited group of rules are specifically exempted from congressional review: 1) rules of particular applicability; 2) any rule relating to agency management or personnel; or 3) any rule of agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3). Further, rules that concern monetary policy proposed or implemented by the Board of Governors of the Federal Reserve System or the Federal Open Market Committee are not considered rules for purposes of congressional review. 5 U.S.C. 807.
(Footnote 5 return)
Section 804 uses the definition of E.O. 12291, adopted by President Reagan, and makes the determination by the Director of the Office of Information and Regulatory Affairs (OIRA) controlling. The definition of major rule under the present Executive Order, 12866, is essentially the same, and I understand the variation has caused no administrative difficulty. Rules adopted under the Telecommunications Act of 1996 are excepted.
(Footnote 6 return)
Under 808(1) agencies may make independently effective any major rule that establishes, modifies, opens, closes, or conducts a regulatory program for a commercial, recreational, or subsistence activity related to fishing, hunting, or camping. More broadly, under 808(2), an agency can control the effective date of any major rule for which it finds (with a brief, public justification) good cause to omit notice and comment procedures as unnecessary, impracticable, or contrary to the public interest. Finally, the President himself can make a rule immediately effective, if he determines by Executive Order, with written notice to Congress, that a rule is: necessary due to an imminent threat to health or safety or other emergency; necessary for the enforcement of criminal laws; necessary for national security; or issued pursuant to any statute implementing an international trade agreement. 5 U.S.C. 801(c). Under this section, a major rule that would have its effectiveness delayed due to the congressional review requirement may take effect, if the President makes a determination. For major rules thus excepted, of course, the requirement to submit a report and required information for review still applies.
(Footnote 7 return)
In its decision in Mistretta v. United States, 488 U.S. 361 (1989), the Court candidly acknowledged that its acceptance was substantially the result of difficulties in articulating a reliable judicial standard for assessing delegation issues, not enthusiasm for the practice.
(Footnote 8 return)
Dated September 30, 1993, published at 58 Fed. Reg. 51735, October 4, 1993.
(Footnote 9 return)
Independent regulatory commissions, such as the Nuclear Regulatory Commission and the Consumer Product Safety Commission, have not been subject to the centralized review requirements of Executive Order 12866, or any of its prior incarnations. They are, however, subject to the provisions of this statute; it seems likely that, as a result (also of the Unfunded Mandates Reform Act and the 1996 amendments to the Regulatory Flexibility Act) the independent commissions will begin to perform such analyses_whether or not under OIRA supervision_when considering major rules.
(Footnote 10 return)
Approximately 4600 regulatory actions were referenced in the most recent Unified Agenda of Federal Regulatory and Deregulatory Actions.
(Footnote 11 return)
Compare the consideration received in the House of the one-house legislative veto in INS v. Chadha, 492 U.S. 919 (1983).
(Footnote 12 return)
The Emergency Supplemental Appropriations for Additional Disaster Assistance, for Anti-terrorism Initiatives, for Assistance in the Recovery from Tragedy that Occurred at Oklahoma City, and Rescissions Act of 1995.
(Footnote 13 return)
See GAO Opinion B—274505. GAO did not reach the question whether or not the rule was ''major.''
(Footnote 14 return)
Some with whom I have spoken about this Act believe that 805, ''No determination, finding, action, or omission under this chapter shall be subject to judicial review'' should be interpreted to mean that courts are precluded from giving any effect to the Act's legal requirements_that they could not find a rule had not become effective if the agency did not comply with 801, or that an agency's legal authority had been altered by passage of a joint resolution of disapproval. That reading would leave all aspects of the act to political enforcement only. Certainly this was not the understanding of 805 expressed in the Chairman Hyde's remarks, Cong. Rec. E577 (April 19,1996), nor do I find it credible as a prediction how courts would interpret the legal questions whether a rule had taken effect, or an agency had authority to act, in light of the Act's clear language on those issues. Neither question would involve judicial review of a determination, finding, action or omission under the act; each would simply give the action its statutorily declared effect.
(Footnote 15 return)
It is clear to me that 805 of the statute does not preclude judicial decision of this question. See n. 11 above. For a court to ignore such a categorical instruction as 801(b)(2) contains would be remarkable indeed.
(Footnote 16 return)
Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803).
(Footnote 17 return)
United States v. Klein, 80 U.S. 128 (1871); Robertson v. Seattle Audubon Society, 503 U.S. 429, 440—41 (1992).
(Footnote 18 return)
See note 11, above, for a brief discussion of the meaning of this section, in particular the difficulty of an interpretation of it that would remove decision of the ultra vires question opened by 801(b)(2) from judicial consideration.
(Footnote 19 return)
See Ameron, Inc. v. U.S. Army Corps of Engineers, 809 F.2d 979 (3d Cir. 1986), cert. granted 485 U.S. 958, dismissed on petitioner's motion, 488 U.S. 918 (1988); Lear Siegler v. Lehman, 842 F.2d 1102 (1988), partially vacated en banc, 893 F.2d 205 (9th Cir. 1989).
(Footnote 20 return)
See, e.g., Chevron v. NRDC, 467 U.S. 837 (1984); Sierra Club v. Costle, 657 F. 2d 298 (D.C. Cir. 1981).
(Footnote 21 return)
See, e.g., Theodore Lowi, Two Roads to Serfdom: Liberalism, Conservatism and Administrative Power, 36 Am. U. L. Rev. 295(1987); John Ely, Democracy and Distrust (1980).
(Footnote 22 return)
INS v. Chadha, 462 U.S. 919 (1983).
(Footnote 23 return)
See Stephen Breyer, The Legislative Veto After Chadha, 72 Geo. L.J. 785 (1984).
(Footnote 24 return)
Daniel Cohen & Peter Strauss, Congressional Review of Agency Regulations, 49 Admin. L. Rev. 95 (1997).
(Footnote 25 return)
5 U.S.C. 804 (3).
(Footnote 26 return)
Some people may draw the inference that the large number of rules agencies issue is itself proof of excessive regulation. It would be a serious mistake, however, to equate the number of agency rules with unduly expensive and intrusive regulation. Once Congress instructs an agency to regulate an area of conduct through the use of command and control regulation, the agency must choose between two potential methods of regulation, i.e., issuance of rules that specify in detail the forms of conduct that are permissible and prohibited, or ad hoc enforcement of statutory standards that are difficult for regulatees to understand and to use as a source of compliance guidance. In this typical situation, an agency clearly benefits the public by issuing a large number of rules. See Richard Pierce, Seven Ways to Deossify Agency Rulemaking, 47 Admin. L. Rev. 59 (1995).
(Footnote 27 return)
See Jack Beatson, Legislative Control of Administrative Rulemaking: Lessons from the British Experience, 12 Corn. Int'l L. J. 199 (1979).
(Footnote 28 return)
The statutory definition of a major rule is appropriate for this purpose. See 5 U.S.C. 804(2).
(Footnote 29 return)
See generally Richard Pierce, The Administrative Procedure Act and Regulatory Reform, 10 Admin. L.J. 81 (1986).
(Footnote 30 return)
See generally Bernard Black & Richard Pierce, The Choice Between Markets and Central Planning in Regulating the U.S. Electricity Industry, 93 Colum. L. Rev. 1339 (1993); Stephen Breyer, Breaking the Vicious Circle: Toward Effective Risk Regulation (1993); Richard Stewart, Reconstitutive Law, 46 Md. L. Rev. 86 (1986); Stephen Breyer, Regulation and Its Reform (1982).