judiciary subcommittee on commercial and administrative law will now come to order i would like to begin by welcome everyone welcoming ever went to the first hearing of this subcommittee of the hundred tenth congress and in particular i wish to extend warm regards to the ranking member of th subcommittee mr cannon i very much look forward to our working together i would also like to welcome that you newest members to the judiciary committee mr johnson and mr jordan to the subcommittee at the request of my nor any member of the science committee we move the starting time of this hearing from one to two p m to accommodate the science committee hearing that has just concluded and i appreciate the cooperation of our ranking member and the indulgence of our witnesses and ensign do you i will now recognize myself for short statement over the last several weeks i've been reading some very disturbing news reports and commentary about an executive order issued last month by president bush the new order substantially amend executive order twelve eight sixty six an order that has guided the o m b regulatory review process for the last thirteen years this new order requires agencies to identify specific market failures or problems that warrant a new regulations furthermore agency heads are now required to designate a presidential appointee as an agency policy officer to control upcoming role making in a sense the executive order politicizes regulations many of which were specifically created by experts to protect the health and safety of our citizens i am concerned that the main thrust of this new order appears to shift control of the regulatory process from the agencies the entities that have the most substantive knowledge and experience to the white house the primary purpose of this regulatory process is to provide guidance and interpret technical policies often at the request of industry unfortunately we don't know what prompted president bush to undertake a major overhaul of this proven process there some speculation as to the administration's reasoning the new york times for example reported that this new executive order strengthens the hand of the white house in shaping roles that have in the past often been generated by civil servants and scientific expert others claim that this is just another clandestine power grab by the administration these thoughts and concerns are not just being expressed by the so called liberal media or partisan hacks c r s for example says that the revisions made by executive order thirteen declining to provide access to executives french documents and information to creating presidential signing statements indicating that certain statutory provisions will be interpreted consistent with the president's view of the unitary executive that's a rather serious observation coming from a preeminently nonpartisan source and the fact that subcommittee is from both the judiciary and science committee are looking into this issue i think underscores a serious concern that the order appears to present to help shed some light on these issues we have with us today a truly notable witness panel we are pleased to have a representative from the administration as well as two former administration official we also have the author of the c r s report that i mentioned earlier as well as one of the leading academics on presidential review of rome a king accordingly i very much look forward to hearing their testimony and appreciate their willingness to participate at this time i would now like to recognize my colleague mr cannon the distinguished ranking member of my subcommittee concerns you raised are very important and this is the committee where we get to work these things through and i would hope that that we would continue the process of looking at this i think it is not so much a partisan process as it is a very important process for how we govern ourselves here in america and them said government in the sunshine and improved process for the development of cornish and of potential regulations and significant guidance documents and hands on management process accountable public officials are the heart and soul of all of these new amendments to executive order one two eight six six there you saw it rated and they are what this hearing really should be about good governance and assuring that regulation is guided by officials accountable to the people through the sufficient notice and comment by the public under control there have also about government in the sunshine because they are specifically related to a notice and comment proceeding which divides every interested party in the nation opportunity itself oh indeed whether they thought on these good guidance proposals were good or bad ones response was clear the vast majority of comments supported the effort on these executive order me and then that's in the final bulletin for agency good guidance practices that the me accompanied contemporaneously form the capstone of that process the importance of these developments to good governance should not be underestimated to the d c circuit trenchantly observed in two thousand but it addressed the trouble the widespread use of government by guidance in it appalachian power decision quote the phenomenon we see in this case is familiar congress passes a broadly words words statute the agency follows with regulations containing broad language openended phrases ambiguous standards and the like then as years pass the agency issued circulars or guidance or memoranda explaining interpret ing defining and often expanding the commands in regulations one guidance document may reeled another and then another and so on several words in a regulation may spawn hundreds of pages of text as the agency offers more and more detail regarding what is regulations demand of regulated entities was made without notice and comment without public participation and without publication in the federal register or the code of federal significant guidance statements under increased management by the accountable and responsive political process and to assure that that that same process remains engaged through the planning and development phases of regulations and significant guidance those are the k lead to enduro an annual effect of a hundred million dollars or more to create serious inconsistency or otherwise interfere with an action taken or planned by another agency to materially alter the budgetary impact of entitlement grants user fees or loan programs and to raise novel legal or policy issues arising out of legal mandates the president's priorities or the principle set forth in this executive order these are key examples bringing these kinds of truly significant guidance documents under increased and standardized review by accountable officials is a large step forward in good governance and should not be questioned the only better approach would be for this committee to proceed with its administrative procedure act review and solve the many of these problems  with clear legislation done these major improvements the amendments largely provide useful refinements to across the process of the procedures already present in executive order twelve eight sixty six which was issued by the clinton administration for example the original order required agencies to a dent in fy what market failure or other problem they're proposing to address the minutes have only made that require more specific to make clear that the identification must be in writing and make clear that the purpose of the  new regulation is warranted that is no sea change in the orders terms but it can be expected to help better governance in addition the amendments a lot more flexibility in the timing and use of regulatory protos ition in coordination meetings with agency heads they also sensibly called not just for a cost benefit analysis for each plant regulation but also for a cumulative cost benefit analysis of all regulations planned for a calendar year that is intended to assist with the identification of priorities clearly a salutary step there have been allegations that thank you very much i enjoyed referring to the gentle lady from california then the sanchez as the chair of the subcommittee on commercial and in ministry of law and my old friend chris cannon as the ranking member of this very important committee on the occasion of your very first hearing and i'm very proud to to be here with you  this is an important item the president's executive order a recent one altering the procedure for administrative room making to me effect the president has created a new obstacle to agencies doing their jobs under the law by requiring for the first time a political appointee to approve any and maybe all agency guidance now this is from a wider view i say to the distinguished witnesses that have been invited here  a part of this unprecedented reach for power on the part of this white house an attempt to can show the institutions that could challenge it the courts the congress and in the press and in the may be a move to upset the balance of power among the three branches of government in my view the executive order that we are looking at today represents yet another attempt to  more authority into the executive branch and it deserves and warrants the scrutiny of this committee on behalf of the american people the policies and regulations that are created to protect public health safety environment civil rights and privacy should be created by experts in the field and in my view not by political appointees this deviation from past process only serves to compromise the protection of the public while in hansing presidential power executive order one three four two two has a requirement that a market failure or problem to be identified to justify governmental intervention also marks serious increase of regulatory control by the white house it is often at the request of the industry that the agency's issues best practices and policies to make them more complicated only seems to further interfere in the regulatory process and so i'm concerned that orders like this will serve as yet another barrier  oppose consumer protection specifically against exposure to harmful environmental pollutants and other safety and health requirements a number of companies have already sta d the regular regulatory rules have a significant impact on their business practices while numerous consumer groups complain about the orders impact on public health and safety and so this hearing starts this subcommittee its chairman and ranking member and members of the subcommittee to a very suspicious and interest of time i would ask that other members submit their statements for the record by close of business friday without objection all opening statements will be placed in the record without objection the chair will be authorized to declare a recess of the hearing at any point we have been informed that our administration witness mr aiken has a tight schedule this afternoon and they need to leave before our hearing is concluded we will hear from him first and proceed with a round of questions for him before turning to our other witnesses mr rankin is invited that when i was coming to the hearing that i received an email saying that o p m had told the government employees to go home so i suspect since since nobody will be back in the office when i arrive there that that my schedule  proceed as we normally do under normal hearings hearings schedule we will allow all the witnesses to testify and then we will begin around a five minute questions from the members that are present i am now pleased to an honor to government from harvard college and a law degree from harvard law school we appreciate your participation in today's hearing mr again and look forward to your testimony our second witness is sally katzman professor katz and is presently an adjunct professor and public interest public service faculty fellow at the university of michigan law school prior to this is simon she has been a visiting professor and lecturer at various other educational institutions prior to joining academic approach professor caplan served nearly eight years in the clinton administration first as a l i r a administrators then as deputy assistant to the president for economic policy and deputy director of the national economic council in the white house and finally as the deputy director for management and  professor captain graduated magna cum laude from the university of michigan law school following graduation from well from law school she clerked for judge j skelly right of the united states court of appeals for the district of columbia circuit i should also note that professor kat has testified on several occasions before this that subcommittee and has contributed her expertise to the judiciary committee ongoing administrative law project for which we are grateful welcome back professor counts and our third witness is dr curtis copeland as specialist in american national government at c r s dr copeland's expertise appropriately relevant to today's hearing is federal rule making and regulatory prop policy dr copeland has previously testified before the that committee accountability office over twenty three year period he received his ph d from the university of north texas paul knowing is our next witness mr no he is a partner with c n n capital inc l l c and also provides legal services to clients as counsel in crowl and moorings environmental are part of the environment and natural resources kurt he works on the policy legal political and technical aspects of regulatory and legislative issues mr administrative law professor strauss is taught that subject at columbia law school for the past thirty six years after obtaining his undergraduate degree from harvard college professor strauss received his law degree from yale law school he thereafter clerk justice william brennan and chief judge david as one of the united states court of appeals for the district of columbia it's an honor to have you with us professor strout at this point i would like to extend to each of the witnesses my warm regards and appreciation for your willingness to participate at today's hearing without objection your written statements will be placed into the record since you have submitted written statements that will be included in the hearing record i request that you all limit your oral remarks to five minutes you will note that we have a lighting system that starts with the green light after four minutes it turns to yellow light and then after a minute longer it turns to read money if you could please finish your testimony by the time the red light turns on i would appreciate that after that after the witnesses have presented their testimony the subcommittee members will be permitted to ask one round of questions subject to the five minute limit mr aiken you are invited to now begin your testaments chairman sanchez ranking member cannon chairman conyers and distinguished members of the subcommittee thank you for giving me the opportunity to testify before you today on the recently issued executive order thirteen four two two a few weeks ago the only director issued a bulletin for agency good guidance practices on that same day the president issued executive order three thirteen four two two which amended executive order twelve eight six six the bullets in an executive order share a common good government goal to improve that the the way that the federal government does business by increasing the quality accountability and transparency of agency guidance documents including providing the public an opportunity to review and comment on guidance on the recognizes the enormous value of the guidance documents that federal agencies issue but as congress the courts and others have recognized guidance documents can sometimes have far reaching effects but they are not always developed issued and used in a transparent and accountable manner that includes an opportunity for the public to comment on the guidance in order to improve the transparency public participation and accountability of guidance documents o m d in two thousand and five issued for public comment a draft bulletin that identified good guidance practices these practices were based on those already being used by the food and drug administration on the recently issued the final version of that bulletin the good government improvements that are made by the bulletin are reinforced by the recent executive order which provides for a relatively informal process whereby some of by no means all of the significant guidance documents that are developed by federal agencies will be submitted to o m b for inner agency review the recent executive order make several additional good government improvements there has been some confusion in the press and elsewhere about these changes and i would like to address them first concerns have been raised about the orders provisions regarding regulatory policy officers first these officers are not new when president clinton issued executive order twelve eight six six in one thousand nine hundred three he directed each agency had to designate a regulatory policy officer second while the recent executive order specifies that these regulatory policy officers will be presidential appointees the cases that are most departments and major agencies the regulatory policy officers already are presidential appointees subject to senate confirmation in addition concerns have been raised that the recent executive order may require each agency to establish a new regulatory policy office that would be headed by the agency's regulatory policy office or this reference to an office was a typ graphical error the reference should have been to an office or the executive order will be implemented accordingly in addition the recent executive order increases the transparency of executive order twelve eight six six regarding that orders discussion of market failure before explaining what this amendment does do i would like to explain first what it does not do first the concept of market failure is not new to executive order twelve six six  but instead has been an integral part of that order since president clinton issued it in one nine hundred ninety three when he not once but twice referred in the order to the quote failures of private markets unquote as a justification for regulatory action second the recent executive order does not make a market failure the only basis on which a federal agency can justify regulatory action to the contrary the recent order expressly allows agencies to identify as a justification for regulatory action any quote other significant problem it intends to address that is what the executive order does not do but it does do is to hundred six guidelines discussed the three classic examples of market failure that are referenced in the recent executive order some of the expressed concern that the recent order could prevent agencies from issuing regulations to protect public protect public health and safety but this is not correct many of the most significant regulations that agencies issue are in fact in response to market failures for example environmental pollution is a classic textbook example of the market failure of tech of extra anality in response to this type of market failure this administration issued the clean air interstate rule the care rule which will have major environmental benefits reduc pollution enough you can if you hit your time but if you could just summarize briefly another type of market failure stems from lack of information in response to this kind of market value the food and drug administration recently issue regulations that require packaged foods to include in their nutritional labeling the amount of trans fats that are in the food this addresses another type of market value this includes this concludes my opening statement i would welcome any questions  as you mentioned in your introduction i served as the administrator of all ira for over five years during the clinton administration was involved in the drafting implementation of executive order one two eight six six i am a strong proponent of centralized review of agency rule making and often spoken and written in defense support of all ira i'm also a strong proponent of regulations believing that if properly crafted they can improve the quality of our lives the performance of our economy and the nation's well being why then am i so critical of this new executive order i prepared written testimony that provides extensive background explanatory information would like to use my five minutes to emphasize the most important points first during the last six years the bush administration has taken many discrete steps to tighten incrementally but nonetheless tightened o m b control over the agency's information of data quality guidelines the peer review guidelines circular a four for regulatory analyses risk assessment bulletin and now the bulletin on good guidance practices each step standing on its own can be justified and none standing on its own is really as bad as the critics of the administration have charged at the same time the cumulative effect of all of these is overwhelming on the agencies and there is a dramatically different dynamic between the agencies and the white house than there was at the end of the clinton administration in executive order one two eight six six president clinton continued t delegated the authority to issue rules with the force and effect of law today those agencies have at least one arm tied behind their back to ten lb bricks tied to their ankles and they're set on an uptick of course to navigate for they can issue any regulations forgive me for mangling my metaphors but the combination of all of the multiple mandates that o m b has imposed on the agencies makes it so much more difficult for them to do their job more mandates and no more resources in fact the agencies have been straight line or decreased presidential oversight is one thing the burdening the agencies to slow them down or destroy the morale is something else now i read mr akin's written testimony and listen to him just now and it's really very curious he has not identified what the problems that they were experiencing under the original executive order that needed to be fixed in said he has said again and again that there's nothing new in the executive order that the agencies are doing it already that what they're doing is not significant it's no big deal at the same token then why did they do it if it wasn't intended to accomplish anything why use the prestige of the president and the status of an executive order for a nonevent and let me be clear that to the extent he says that this is just continuing the logical corporate logical progression from the clinton document that was called best practices not guidance not bulletin not circular not executive order and there's a very big difference finally if you argue that this is simply to increase transparency and good government then look at the way it was done without any consultation or explanation look at the effect on the agencies coming on the heels of all the other things that o m b has done and look at the message regulations to protect the environment and promote the health and safety of the american people are disfavored let the market not the government do it now executive order one two eight six six is originally drafted was neutral it's process even though president regulatory philosophy or ideology it was on its face and by intent a charter for good government without any pre determination of outcomes in light of the actions taken over the last six years that is no longer the case with executive order one two eight six six as amended as i noted the outset there have been a lot of the steps have been taken each one of them has been a thumb on the scale i think by now we have a whole fist influencing the outcome of regulatory decisions thank you very much for holding this hearing it's very important i believe for congress to let the executive know that it takes these matters seriously and is concerned about the integrity of the administrative these changes are the most significant of the regulatory review process since one thousand nine hundred three and as you mentioned can be viewed as part of a broader assertion of presidential authority throughout the bush administration most consistent attribute of these changes is their lack of clarity specifically it is unclear why the changes were made their effect on agencies in the public and their effect on the balance of power between the president congress my bottom line is that because of this lack of clarity the ultimate effects of these changes are likely to become apparent only through their implementation ironically although the executive order now requires agencies to identify the specific market failure problem that prompted the issuance of the rules the bush administration has not indicated why the changes made by the order are needed for example why the president concluded that the press that agency's regulatory policy officers now must be presidential appointees why did those policy officers no longer report to the agency head and why was there are authorities or control agencies regulatory planning and rule making activities significantly enhanced sound public policy reasons can be envisioned for many of these changes and enunciation of those reasons might have prevented much of the ensuing controversy in some cases the lack of clarity about the effects of the executive orders because broad that is provided to both agencies and o m b for example agencies are now required to estimate the aggregate cost and benefits of upcoming rules quote to the extent possible and are required to identify a specific market failure problem before issuing a rule where applicable but it is unclear who decides what's possible or applicable is if the agencies are zero in the in other cases the effects of the changes are unclear because at least on the surface they don't appear to change existing practices for example as mr aiken just mentioned regulatory offices are already presidential appointees and most agencies most major agencies therefore the order seems to require what is already being done however if o m b of the president requires agencies to designate different presidential appointees to this position then this mandate could become much more significant particularly when coupled with the newly enhanced authority of those officers to control agencies regulatory planning and output similarly one might think that agencies could satisfy the requirement that they estimate the aggregate cost and benefits of their plan will simply by adding up the rules individual estimates however agencies regulatory plans rarely contain quantitative estimates of cost and benefit many can in many cases because the rules are still under development and a year away from publication therefore if agencies are held strictly to this requirement developing aggregate cost and benefit estimates could be proved difficult for the agencies and of questionable validity other requirements in the order seem to have broader and clear scope for example it requires agencies to notify o m b about significant guidance documents and defines a guidance document in such a way that it may cover even oral statements by agency staff also as many others have pointed out it is not clear how a non binding guidance document can be expected to have the kinds of significant effects described in the order that is one hundred million dollar impact on the economy as a result agencies may conclude that none of their guidance occupants needs to executives orders requirements for o m b notification the other hand because o m b is also given the authority to determine which documents are significant the scope and impact of this requirement may be as broad as o m b determines it needs to be it's also unclear whether the time limits and transparency requirements applicable to rules will apply to guidance occupants for example will o m b have to complete its review of guidance documents within ninety days will agencies have to disclose the changes made to their guidance documents at the suggestion and recommendation of o m b finally it is unclear what impact the changes brought about by executive order will have on the balance of power between the president and congress as i mentioned earlier the order requires agency regulatory policy officers to be presidential appointees but does not indicate whether they should be subject to senate confirmation one could argue that it is the role of congress to prescribe in law whether the regulatory policy officer position should be subject to senate confirmation even if an agency had designated person in the senate confirmed position as an agency's regulatory policy officer one could argue that this person would have to undergo another confirmation process because the scope of the person's responsibilities had changed significantly also it's not clear whether the orders requirements regarding policy officers now applies to independent regulatory agencies that had previously been exempt from this you actually went under the five minutes mr knowing your at chairman sanchez ranking member canon chairman conyers distinguished members of the subcommittee my name is paul knowing i want to thank you for the honor to testify before you on recent changes to the regulatory review process while i am in the private sector now i have had the privilege to spend most of my career in public service much of it on efforts to improve the regulatory process from one thousand nine hundred five to two thousand and one i served on the senate governmental affairs committee as counsel to chairman bill bill ross ted stevens in tred thompson on bipartisan regulatory reform efforts then until last may i worked as counselor to dr john graham at own beez office of information and regulatory affairs from my experience in congress and the executive branch i developed a deep appreciation for the importance of a coordinated interagency regulatory review process i also know that the public could not expect more talented or dedicated public servants than those i work closely with and my time is on i should note that my testimony is my personal opinion and in my view the recent changes to executive order twelve eight six six and the accompanying owmby bulletin on good guidance practices are important and steps towards good governance when president bush issued the amendments to clarify and strengthen president clinton's executive order twelve eight sixty six the reactions were mark remarkable in my view compared with the actual language and attachment to my written statement shows how the main bush amendments modified president clinton's order i would like to make just a few points now about how the new order and the on the bulletin can improve the regulatory process first extending the existing regulatory review process to significant guidance documents an important improvement the clinton order appropriately sorted significant regulations from the insignificant but it neglected guidance documents and there is no doubt that guidance documents can be significant concerns have been raised by many quarters that agency guidance is should be better coordinated more consistent more transparent and accountable and not be used as legally binding regulations there is a very strong foundation for these good guidance practices in fact congress required f d a to issue the good guidance regulations that were a model for o b when it designed its bulletin second both the clinton and the bush executive order required the agencies to identify the problem that justifies regulation before proceeding whether that problem is a market failure or something else although i think the clinton market failure language was adequate the bush order makes a helpful but modest change by asking the agencies to identify the problem more precisely and in writing to clarify the merits of going forward the bush orders language on market failure is simply not new nor is it radical as some have suggested in fact very similar language and much greater detail is in the clinton administration's one thousand nine hundred six guidelines for economic analysis under executive order twelve eight sixty six i would submit that carefully considering market failures is hardly a subversive way of thinking and indeed some of the greatest regulatory successes were made possible by market based  approaches that are based upon an understanding of market failure for example and the one thousand when the clean air act amendments congress established a sulfur dioxide emissions trading regime that is one of the greatest success stories in the history of environmental law the results of that program were so compelling that one be supported a p a adopting this same approach in the clean air interstate rule that mr aiken mentions that  care will cut power plant emissions dramatically by about seventy percent without the economic disruption and hardships associated with traditional command and control regulation in my view it would be most unfortunate if the concept of market failure and market based approaches that flow from it become politicized at a time when they are critically important tools in the regulatory policy toolki i'd like to detail that further in question and answer in conclusion regulatory policy is important and often controversial it is commendable that the subcommittee is making the effort to view carefully these recent changes in to conyers distinguished members thank you very much for inviting me to testify before you today given the time constraints i hope you won't mind if i launch right into what i have to say and who i am our constitution is very clear in law judgment in making the president an overseer of all the varied duties that you create for government agencies to perform but the constitution is equally clear in permitting you to assign those duties to them to the agencies and not to the president he is not the decider but the overseer of decisions by others and when the president fails to honor this admittedly subtle distinction he fails in this constitutional responsibility to take care that the laws be faithfully executed the assignment of decisional responsibility to others is a part of the laws to whose faithful execution  obliged to see executive order thirteen forty four twenty two amends the longstanding executive order twelve eight sixty six in the number of ways that you've heard about i'm going to focus on two aspects of the order that in my judgment threaten this difficult but necessary balance between politicians and experts between politics and law that characterizes agency rulemaking first amendments to sections four and six affect a dramatic increase in the president's asserted control over regulatory outcomes and increase that in my judgment requires congressional authorization that has not occurred the second amendment threaten revival of the discredited remarkably expensive rule making procedure that delivers substantial control over the timing and cost of rulemaking into the hands of private parties just those whose dangerous activities proposed regulations or generally intend to limit so first test of presidential control of rulemaking agendas the regulatory plan was first rationalized as an aide to the political heads of administrative agencies requiring career staff to reveal their priorities and plans for rule making agency leadership in this in ways that the annual budget process does it i think is sensible in that respect it injects the agency's political leadership into the picture before matters get set in concrete while there have been some hints that it might be used for presidential control over the years trying to follow that issue i've never heard a whisper of until this order president bush's order purports to confer legal it's hard on a junior officer in each agency whose identity has to be coordinated with a lawyer to control the initiation of agency rule mak it seems to be intended it's continued processing within the agency conferring this kind of authority is congress is not the president's and i'd heard you not to do it it diffuses political authority within the agency you generally entrust to the agency head congress as well as the president has political relationships with the agency while the president can cashier agency heads whose work he doesn't like that comes at a high political cost including having to get the senate's concurrence on success or well connected friend remarked to me i've personally watched two agency heads tell the president the pound sand they wouldn't do what they were told in the president do they have the political capital to junior officers appointed under close white house supervision knowing that they can be dismissed at any moment to what it means to be a presidential appointee don't have this political capital there isn't much chance that firing vent will have political costs for the white house they are not ever going to be telling the president or a wire to pound sand there are a number of gaps in the water that make this problem much worse in judgment first the clinton executive order provided that the regulatory policy officer quote shall report to the agent he had close quote that language has been deleted from the executive order second constraints that the constitution insists upon that people who exercise major authority in government can do so only with the senate's blessing as well as the president the consequence divided administration within  let me conclude with if i may with a suggestion for you i seems to me that this is a simple affront to two of congress's responsibilities to confer organization and authority on elements of government and to approve in the senate all appointments to high office you couldn't change it directly that would encounter a presidential veto but maybe there are the do not spend writers for appropriations measures  that have been used in the past that could be employed to keep the president from paying salary to persons who are doing work that you have not designated for those persons to do  my printed remarks i also addressed the question of formal rule making and i'd be happy to address that question in that thank you professor strath i want to thank all of the panelists for testifying today and i want to remind you that your full written statements will be placed into the record we are now going to proceed with questions under the five minute rule and i will be and by recognizing myself for five minutes mr aiken you noted that executive order thirteen for twenty two encourages rulemaking agencies to consider using the administrative procedure act formal rather than informal well making procedures for the agency's resolution of complex determinations why do you think that that necessary thank you for your question the reason that that provision is in the executive order simply to remind agencies that under the administrative procedure act they have a tool in their tool belt that they can use to resolve complex determinations as i mentioned in my prepared testimony that provision has been in the administrative procedure act for decades agencies have been able to use that authority for decades and the executive order simply reminds agencies of this authority and encourages them to consider it but is there any evidence to the contrary that they don't use the portable making procedures when appropriate necessary i don't think the executive orders premised on the view that agencies were using it in sufficiently it simply reminds agencies that there's a provision in the a p a that is available for their use if they believe it's appropriate ok thank you professor caplan what do you believe congress too about this executive order be always somewhat nervous about talking about riders on spending bills i think first and foremost you've done the right thing by calling a hearing oversight by congress is incredibly important and has not been in vogue for the last several years knowing that you will be held accountable and asked why is the section in there what does that section do what is the problem has a very effect i do believe the dr copeland has put his finger on something with respect to the appointments power senate confirmation i personally believe that  if you are going to hold the position of regulatory policy officer as you just described in here and not be reporting directly to the head of the agency which was the way we had structured the job then it would be appropriate for the senate to inquire as to both the competence and the temperament and perhaps the regulatory philosophy of the person who would hold that job and so i would use the power irrelevant or not to be considered the agencies will follow and the executive order as originally structured said subject to existing law that means subject to what you will say so i would use those routes i appreciate your  answer mr knowing what executive order thirteen four twenty two as asserted by new york times columnist paul krugman make it easier for political appointees to overrule the professional tailoring government regulations to suit the interests of company and if not please explain madam chair i think the answer is no because i think that the changes that are made for example to the provisions on regulatory policy officer are in significant other than creating grow reader not less political accountability this position was created by the clinton the order there was no constraint on who could serve as a regulatory policy officer you could have had someone who was not accountable to the congress to serve in that position under the change the benefit for congress will be that person will serve in a progression he created position that is typically subject to senate confirmation and typically engages with the senate with the congress and oversight so i think as far as oversight committees go this executive orders good news professor  catherine i notice that you did not think it great could you just briefly respond to that and of the clinton order the regulatory policy officer had to report directly to the agency heads that was the accountability within the agency counterweight to to the role of the president and of course those are that is that any at least in this given presidency you have some conflict with the speed problems that this administration has decided exists within within the regulatory context i personally served in an agency that had a hundred people hundred lawyers who work for me develop regulations and i have the greatest respect for civil servants the problem is suit civil servants are you don't change very quickly and so what we're dealing with here excuse me is a higher level is how we deal with a world that has changed radically around us and has resulted in in a political ration of just one example i had a political friend came in and told me that i should take the code of federal regulations into my next meeting said you know how tall that is and then he raised his arm about six feet high and i said when was the last time you saw the code of federal regulations i brought him down here and showed him our library now i guess majority library or library guess but in their side it was he was dumbfounded he was absolutely dumbfounded because i don't know what it is but my guess is that if you stack could figure relations up it would be about twenty five or thirty feet far more than what you anticipated and that doesn't include the guidance documents and the informal guidance which never gets in the document what we have here is a government that has vastly insinuated itself in the fabric of there's some things you need to control probably some things that we just interfere with and cause pain and suffering by trying to control and so what i what i would hope we work together over a longer time any of us on on the a p a many of these issues are are going to because really what we're talking about here i mean i'm for people who don't understand this discussion we're not talking about regulation right talking about wall not talking about that law which is passed by congress and signed by the president we're talking about guidance when a company or person has a problem understanding what a regulation means in his evolving business environment or other environment in his life and he says tell me what this means and that that answer can come from a bureaucrat in a regional  drives issues and creativity and that's one of the many things are happening in our in our society communications of all that drives innovation and we find ourselves regulating in a context of a presumed danger when at the same time we have great opportunities for a better society and so i'm actually very rarely do this i lecture and i apologize but what i hope comes out of this discussion is that instead of blaming this president and  the gentleman from utah can tell the witnesses that he doesn't like you very often but you know we're on the committee chris we know a lot better than that and we  slid in such a short time that modern civil service system dates back more than a century in just six years the bush administration has managed to under many of that system's  achievements and the ministration still has two years to go you know this this brings in the notion of conservatism cronyism contracting and i need some guidance from some of our witnesses we've got the appropriations process passing laws  confirmation proceedings and any succeeding president can revoke any kid order that he or she chooses those are those those i find a lot of merit in that analogy and happily i think you are stuck i mean if you were to take that position which in my judgment is the right position that authorizing someone in government to act with the force of law which is what this executive order does for the regulatory policy office or is something that only congress can do and the president cannot do you are not in the position of being able to undo that by a simple statute unless you can get it past a presidential veto which as i read the newspapers my guess is you cannot so then you're left with a series of other alternatives i don't myself like appropriations writers at all i think they've been misused in the past but you know i don't even think we can assume in court and that's a constitutional issue i don't know how how did you find this subject matter to start the hearing of the ministry of i mean this is more difficult than most of the other issues that we handle i i am  wondering perhaps and a very detailed examination of this is going to make it clear to the public i mean this may be another case for public sentiment to kick in because most people of course haven't the vaguest idea that this has occurred newspaper reporters tend to describe stories about process as one did to me and the work up of this occasion those three bowlers that is to say the readers face will predictably plop in the oatmeal three times before they finish the story i don't know that it will be easy to make it into  what's what's your diagnosis here i would refer to a document that was prepared by a colleague of mine and c r s t j hall said on executive orders and he mentions previous instances where congress has revoke the most recently executive order one two eight zero six which were congress revoked in order by president george h w bush to establish a human fetal tissue bank for research purposes to effectuate this repeal congress simply directed that quote the provisions of executive order one two eight zero six shall not have any legal effect while this seems to be the most recent action there have been numerous similarly revoked executive orders so there are there is precedent for congress revoking executive orders was quoted in the washington post as saying that the controversy about this new executive order is quote a tempest in a teapot given that the order appears to create a country of presidential  and pointed regulatory police officers who no longer report to the agency heads who do is ignite them how can this be considered a tempest in a teapot isn't it more serious than that more fundamentally earth shaking than that thank you for your question congressman the reason i would call it a tempest in a teapot is because i think a lot of the concerns that were raised in the initial press reports were not based on a reading of the actual language of the order or an understanding of what was already in the existing executive order that president clinton issued it was not based on understanding that these regulatory policy offers were not created by president bush they were created by president clinton and they put this is a fundamental we ordering of that executive order is it well well sir i think the main change in that part of the order is to say a regulatory policy officer who admittedly was appointed by the agency had under the old order now actually had to be in a congressionally created position which is going to be more accountable politically and more accountable to congressional oversight i would submit then what was previously on the find and that's what i mean when i say i think that there's been a lot of misunderstanding about these provisions that when they're actually read closely i don't think there's less political accountability i don't think there's anything new or radical i actually think this could be used to provide greater accountability to the congress and i respect the importance of that having worked in congress as a staffer for seven years well you also quoted as saying that the executive order promotes informed and more accountable regulatory decisions can you explain that a little more yes or i think it's a real improvement over president clinton's order to include guidance documents within the inner agency review process because i have seen many exhibit instances where businesses small businesses especially where people cannot keep up with the sayings schools farmers are hurt or affected by these things and they don't have any idea that they're coming at them they have no idea of how to access them and i could tell you just having heard a number of stories about this that i think it's very important that those that very important component of regulation is brought within the inner agency review process i think that's a big improvement professor katz and what's your response feel like kind of ironic that on the one hand they say it's not doing anything and on the other hand they say it is doing something and i really don't think they can have a of ways on the guidance documents they do not have the force effect of law but they do have an in guidance documents congress was the one that called for public participation so if you're using the f d a guidance document as a model then congress needs to be involved incidentally congress did not authorize o b to review those f d a guidelines that it authorized so what what has been done here is white cherry picking where they take what they like and they add to it what they really like and they've got now a different kind of an animal the bottom line congress congress has to act congress has to become involved and i think that whether it's looking at the a p a generally looking at spoken time and time again about this concept of i think the term is unitary executive power which i view as a continuing encroachment on legislative afar i see this just as another piece is that a comment that you like to respond to professor stress sorry i think you heard that from professor katz and as well there has been a game too late for her just there there has been a clear acceleration and to be fair about it this is a process that began with president nixon  and and since his administration president president after president has done more and more to bring the the bureaucracy within the political  white house i think what mr cannon had to say in his statement has an awful lot of merit to it the question for me is when you cross the line you have some wish to have not only politics but also expertise and without even getting into the merits of this particular executive order because i think it's a statement as to whether this institution the first branch of government is has the capacity to retain its constitutional authority and i would hope that given the leadership  of congresswoman sanchez that there might exist the possibility of a discussion with the executive branch to determine what modifications to occur from the remind the gym when you suggest we go to war over this issue that america has changed profoundly before president reagan the beginning of his administration the vast majority over sixty percent of all people were employed by large corporations over five thousand plays today the vast majority are employed by small companies and so what we're doing here and what i hope this committee will do over the long term is create a context where americans can thrive and in this battle  to you know the small business owner i think members of congress ah that is not the issue here the issue is whether this is appropriately within the prerogative of of of congress pursuant to our constitutional law or and if it is i think that we can demonstrate is much sympathy and support for the small business community this to me is a constitutional issue it's got nothing to do with the stock exchange that you know didn't have a degree in economics you know is there a i haven't really a little knowledge that i haven't read the executive order but the idea of some sort of information process by the senate just to assure all members of congress that we're we're getting people who have an expertise in and not just simply political appointees like we see we've seen them in iraq we saw them in the aftermath of katrina and there was much to be reveal i don't need to just beat up on the bush administration but they are handy right the time of the gentleman has expired i would like to thank again all the witnesses for their testimony today members may have additional written questions for our witnesses which we will forward to you and ask that you answer as promptly as you can so that they can be made part of the record without objection the hearing  aplomb and professionalism and we i know i speak for mr cannon we all look forward to working thank you as i was saying when i was so pleasantly interrupted we will be submitting additional questions and writing we ask that you respond to those questions so that they can be as quickly as you can so that they can be made part of the record without objection the hearing record will remain open until the close of business on friday for the submission of additional materials i thank everyone again for their time and patience and without objection the hearing of the subcommittee on commercial