and the role of the office of information and regulatory affairs hearing will come to order this morning the oversight committee mission statement we begin every single one of our meetings with it we exist to secure two fundamental principles first americans have the right to know that the money washington takes from them is well spent second americans deserve an efficient effective government that works for them our duty on the oversight and government reform committee is to protect these rights our solemn responsibility is to hold government accountable to taxpayers because taxpayers do have the right to know what they get from their government  is not identifying all of the unfunded mandates being imposed on them and it does not always capture the full cost of those mandates that it does identify in fact in the past ten years only four rules have been classified as constituting unfunded mandates in state local and tribal governments further only thirteen of sixty six major rules issued in two thousand and ten were classified as unfunded mandates one of the thirteen was identified as intergovernmental mandate i have two different slides i want to be able to show on that one the first one deals with just the number of economically significant rules in the pipeline will see that has continued to grow over the years and the second one gives us a snapshot of the major economically significant regulations from two thousand and six to two thousand and ten in the purple there you will see those are regulations subject to umra review that very small little part the red there is major regulations reviewed by oira and in the green there major regulations that have been issued as a whole so obviously we have several that are slipping through the mix here that are not being evaluated by umra while i appreciate president obama's recognition of the burdens the federal government puts on state local and tribal governments in his presidential memorandum on administrative flexibility lower costs and better results for state local and tribal governments this is not a substitute for legislation to ensure the burdens placed on the agenda these are fully recognized and taken into account as the charts that we just looked at show when you look at time to look at closing some of umra's loopholes exemptions and exceptions that this subcommittee has heard about from its previous two hearings on unfunded mandates we need to examine whether cost estimates under umra are being accurately reflected umra only captures direct costs or expenditures not the total effects government or private business during the first umra hearing in february the subcommittee heard testimony from the government accountability office local government representatives and the former oira administrator susan dudley ms dudley who served as the oira administrator from two thousand and seven to two thousand and nine provided expertise and insight into the process by which the federal government imposes unfunded mandates on non federal parties she also described widely recognized flaws that exist within the current umra statute and suggested multiple remedies and potential legislative solutions to address the concerns addressed by many affected p the public statements on regulations indeed the president has stated that sometimes rules have just gotten out of balance placing unreasonable burdens on businesses burdens that have stifled innovation and have had a chilling effect on growth and jobs further president obama made it crystal clear to the american people in a presidential memorandum that my administration is firmly committed to eliminating excessive and unjustified burdens on small businesses and to ensure that regulations are designed with careful consideration of their effects including their cumulative effects on small businesses in light of this backdrop it seems chamber of commerce estimates the dodd frank wall street reform act and consumer protection act signed into law by the president contains two hundred and fifty nine unmandated rulemakings one hundred and eighty eight suggested rulemakings sixty three reports and fifty nine studies most of these rules those not issued by the treasury new rulemakings create potential for the issuance of more unchecked unfunded mandates indeed in light of the presidents recent statements it is curious that a recent report by george washington university regulatory studies center and the weidenbaum center at washington university in saint louis that a number of staff employed on regulatory matters within the federal government is on schedule to grow at a rate of about ten thousand new regulatory employees per year in two thousand and eleven and two thousand and twelve the number of full time regulatory employees is expected to reach an all time high of two hundred and ninety one thousand six hundred and seventy six in two thousand and twelve the authors of the report which include former oira administrator susan dudley believe this data offers useful information on the composition and evolution of federal regulation over the past fifty two years and serves as a barometer of future regulatory activity i have stated before and will state again with this hearing like other hearings this is not an attack on the current administration many of the issues we will deal with today did not originate during this administration and the solutions we propos extend well beyond this administration it is essential that we look at the bigger picture and the long term effects of our federal involvement in state local and tribal governments and private business operations but it is also essential that each agency is evaluated on their results not just their rhetoric today's hearing is designed to be another teachable moment to discover the facts to assist us in developing solutions it is the role and responsibility of this subcommittee and congress as a whole to ensure this administration is regulating in the best interest of the american people i am here to make certain in this modern regulatory environment the federal government does not overstep its clearly defined constitutional boundaries and well intentioned bureaucrats don't impose their preferences on state local and tribal governments and private industry it is my hope that we can also discern issues that must be addressed in a legislative solution to am sensitive to the budgetary pressures facing state and local governments it is important for congress and agencies to carefully evaluate and balance the potential impact before imposing new requirements on small governments however this is also the know that regulations are necessary to protect the health welfare and safety of the american public of our constituents by the way as mister sunstein has often stated we also know that some regulations create jobs as i have said in the past i fully support a comprehensive review of regulations to ensure that they are effective and efficient that must be a very balanced review but a review cannot be one sided it is important that we base any review on the facts rather than the rhetoric here are the facts in two thousand and eleven the office of information and regulatory affairs estimates that the annual benefits of major federal regulations issued between two thousand and two thousand and ten are between  hundred and thirty six dollars billion and six hundred and fifty one dollars billion in contrast the estimated annual costs are between forty four dollars billion and sixty two dollars billion in other words the economic benefits of regulations are up to ten times the society in the form of pollution effective or deceptive products and unsafe workplaces again to protect the american people our constituents this can and does save local governments from significant expenses they otherwise would have to bear themselves to protect the health and well being of their citizens administrator sunstein i look forward to your testimony today and i look forward to hearing more about your office's role in the regulatory process its role in ensuring that federal agencies are conducting a balanced review of existing regulations and executive order thirteen thousand five hundred and sixty three and your efforts to improve the cost benefit analysis chairman i agree with you this must be a bipartisan effort we must leave our political hats at the door so i hope that we can take a fair and balanced view of regulations and that we can all work together to identify ways to help create jobs and support the work of the state and local governments while making sure that americans are able to live and work in safe and healthy communities i have often said when i look at the worker and  people that these regulations often protect i respect those people who get up early in the morning and go to their jobs looking forward to coming home to their families i do not want a situation where we disregard important regulation or try to do away with important regulations that are needed to protect them i want them to come home to their families and i do not want them to be shipped home to their families  propose agency regulations during the previous administration oira intervened to block proposed regulations of greenhouse gas pollution under the clean air act amendment the consequences of failing to prevent global warming could be severe recently the director of the climate analysis section of the national center for atmospheric research stated given that global warming is unequivocal the null hub hypothesis should be that all weather events are affected by global warming according to the global insurance company munich ray the only plausible explanation for the rise in weather related catastrophes is in fact climate change unprecedented tornadoes killed hundreds of americans recently in missouri alabama and my home state of virginia and i will include for the record a recent washington post article discussing the connection between climate change and extreme weather extreme drought rivaling even the dust bowl is threatening viability in agriculture in the southwest the acidity of the ocean has increased thirty percent due to higher atmospheric carbon concentrations threatening coastalries from florida to australia sea levels are rising in the atlantic and chesapeake bay threatening critical infrastructure including  and norfolk naval base as recent extreme weather has demonstrated the devastation of climate change can reach biblical proportions meanwhile opponents of regulation ignore both the benefits of regulation and the cost of failing to regulate w regulation is necessary empirical data repeatedly and consistently suggests that the benefits of federal regulations outweigh the costs by considerable margins the ranking member of the full committee just went through some of those statistics but other examples exist as well for example the vehicle efficiency standards enacted in the clean air act will save consumers three thousand dollars per vehicle by improving the average vehicle's efficiency by thirty percent in aggregate omb says this regulation w benefits of new regulations to the private sector as well as states and local governments based on the data many of these regulations create significant private sector savings and we should understand those so we do not meritorious regulations in the manner that the previous bush administration blocks regulation for example of greenhouse emissions in addition to understanding the benefits as well as the costs of regulations we need to do a better job understanding that new costs could be imposed unfunded mandates could be imposed on state and local governments by curtailing medicare medicaid and social security as some have suggested for example under the ryan budget plan passed on a strict party line vote federal medicaid payments would be cut by thirty five to forty nine percent or seven hundred and seventy one dollars billion over the next ten years putting enormous stress on states localities and families medicaid primarily benefits children of poor parents seniors in nursing homes and disabled individuals to illustrate how important medicaid is to seniors in nursing homes consider these examples from my district in northern virginia renaissance at greenspring has one hundred and forty eight seniors all of whom receive medicaid fairfax nursing center has two hundred residents one hundred and thirty four of whom receive medicaid leewood health center has one hundred and thirty two residents ninety one of whom receive medicaid the iliff nursing and rehabilitation center has one hundred and thirty two residents ninety one of whom receive medicaid based on data from the american communities survey approximately thirteen point five percent of my constituents totally receive medicaid that is one hundred and thirty two thousand residents of fairfax and prince william counties alone the cruelty and political toxicity of chairman ryan's proposed privatization of medicare has received a great deal of attention  of medicaid would have a similar negative effect on individuals and especially unfunded mandates in state and local governments if the federal government cuts medicaid by thirty five to forty nine percent who is going to foot the bill for nursing home costs do our colleagues propose to put seniors out on the street or do they expect local and state governments to pick up the tab and raise taxes to cover those costs ultimately slashing medicaid is a shell game in which the house majority w costs to the states and localities and the families of america the cruel proposal would create an unfunded mandate and more troubling return america to the era of the poor farm i think we need to look at that aspect of this subject as well reflect the witness answered in the affirmative you may be seated thank you in order to allow time for discussion i am going to ask you to be able to limit your opening statement we have already discussed it would be around six minutes long or so and that is very appropriate we are honored to be able to receive your statement as part of the record at this moment thank you  chairman i will try to beat the six minute constraint because i am eager to hear your questions and concerns i am very grateful to be here this is a timely hearing on a crucially important topic as the  a central goal of umra is to minimize burdens on state local and tribal governments and also on the private sector and to make sure that those burdens are imposed only after informed and careful consideration what i will be emphasizing here is the very close relationship between the goals of umra and the goals of the presidential memorandum on administrative flexibility from february and the goals of the executive order on regulation and regulatory review from this past january more on state local and tribal governments or on the private sector all of those these reporting requirements involve among other things a careful assessment of costs and benefits as well as an accounting of various potential effects on the economy annual reports to congress on new regulations covered by umra so there is an important information on reporting rule that my office has insofar as the statute is designed to require analysis of the effects of rules in advance and to try to reduce burdens and costs it has clear connection with executive order twelve thousand eight hundred and sixty six from the clinton administration which has long governed the process of regulatory review more of those provisions from this january to underline their relationship with umra first the new executive order specifically directs regulations to be based on the open exchange of information and perspectives among state local and tribal officials and the public as a whole with this direction what the executive order is trying to do is to ensure consultation in advance with those who are likely to be affected by regulation second the executive order the new one requires that before even issuing a notice of proposed rulemaking before anything appears in the federal register the agencies are supposed to seek the views who are likely to be affected including those who are potentially subject to the relevant rulemaking what this means is that the president has required with clarity beyond that we have seen from any previous president advanced consultation with those who are potentially burdened by rules third the executive order takes new steps to require burden reduction and minimization of costs agencies are directed to select the least burdensome approaches to minimize cumulative costs to simplify and harmonize overlapping regulations which can often be confusing and very expensive and to identify and consider flexible approaches that maintain freedom of choice for the american public it is clear that these requirements bear directly on rules that affect state local and tribal governments as well as the private sector fourth and finally the new executive order requires a regulatory look back through the creation of plans by which agencies and departments will eliminate excessive costs and burdens revise rules that are too complicated and confusing streamline rules that have too much red tape and that applies directly to state local and tribal government as well as the private sector there is a sibling to the executive order the presidential that sort the memorandum seeks to increase flexibility for non federal entities to that end it directs the office of management and budget the director in fact to lead a process of consultation to promote increased flexibility the presidential memorandum also requires agencies to work with state local and tribal governments to improve program outcomes including reduction and streamlining of duplicative reporting paperwork and regulatory requirements it should be clear that umra the new executive order and the administrative flexibility memorandum are mutually reinforcing we are greatly looking forward to working with you on implementing and promoting the purposes of orders or these are ways to be able to fix it so that is just a general question to you mister sunstein i will tell you the most important thing i have learned that bears on all of those and that is the crucial importance of public participation to good regulatory outcomes  taught administrative law for many years there is a cliche among administrative law professors that by the time a rule goes out for public comment it is baked it is cooked and the public comments are not that important i have learned that that cliche is false and to get rules right it is very important to engage with the public mister lankford okay with that i heard you mention that as well how do you select who gives the public comments since this is not an open large scale process it is not already out there  reference to freedom of choice for the american public so the best way is to let people who have interests and concerns voice those interests and concerns rather than having bureaucrats select people there are two mechanisms for that that are built into the existing process of which umra is a significant part one is the rule goes out for public notice and then people and sometimes many thousands of people suggest their comments and no one asks them or chose them they chose themselves the second is our office is and this is very important for those concerned about regulatory burdens to be aware of our office is open our doors are open to those who think that a proposed rule or a final rule is a problem and we want to hear what they have to say mister lankford so in that conversation back and forth you mentioned specifically using the term onerous if a regulation in a look back or whatever stage of the process it may be whether it is already on the books and we are looking back at it or whether it is a proposed rule if some groups consider it onerous and other groups do not let me give you a for instance if a private entity or a state or local government says this is a really onerous rule and the federal agency says no it is not who arbitrates t that that is a crucial thing for my office and you all who have lawmaking authority to try to get right what we try to do is have both an internal and external process of peer review so if a rule comes in with let's say a low cost estimate and then people in the private sector or state and local government have said at some part of the process that inaccurate we have an internal process which involves the council of economic advisors the national economic council economists and informed people within the government who try to make an assessment and there not always literal peer review but there is a form of external peer review speaking colloquially in the sense that the regulatory impact analysis goes out for public review and not infrequently people who  affected say that cost estimate is inaccurate and the question is what is their evidence and sometimes they have pretty good evidence mister lankford so who do they appeal up to when there is a disagreement there is public comment there is all that back is it within that same agency or very clear that it is state local tribal governments and the private sector it mentions it multiple times it defines it clearly in umra and the law that is included you also made the statement several times the president has made the statement several times what are your thoughts on the costs state and local government are particularly strapped so if there is a rule that burdens them economically the choice of the least burdensome alternative as the executive order a chairman presumably mister sunstein we hear a lot of talk in this congress about the burden of regulation but there is also benefit to be derived from regulation and protecting the public and sometimes in concrete savings is that not connolly and certainly your office looks at the benefits as well as the costs mister sunstein under the president's executive order benefits are as highlighted as costs mister connolly for example in agreeing to new fuel efficiency standards which certainly has an impact both in the public and private sector epa projects that over the lifetime of a model a two thousand and sixteen model the average consumer will save three thousand dollars and the united states will save one  at the risks of cost shifting for example i spent fourteen years in local government sometimes my state government conveniently would shift costs onto the local governments and it would become our  the effect of shifting the cost of medicaid onto state and localities and indeed even the private sector has your office looked at that issue of cost shifting as in effect an unfunded mandate mister sunstein that is not a standard part of what our role is under the executive order and under the unfunded mandates act but there is a role for the analysis to which you point under the rubric of distributional impacts so if it is the case that a cost is shifted from one sector to another sector and that is a consequence of a rule that is appropriate to lay out mister connolly now that same budget also in many respects eviscerated the ability of epa to continue to regulate under the clean air act has your office looked at the cost benefit analysis over the years of the clean air act mister sunstein we look at the costs and benefits of particular rules issued under the clean air act externalities i know when you start to get into something like global warming it is a little harder we know what the problems are it is a little harder to put a value on averting something or mitigating something but does your office also do that physical things like rise in sea levels and potential damage to coastal areas and infrastructure mister sunstein the global warming issue poses very difficult conceptual and empirical challenges in terms of  monetization what has happened in the last years is there is an effort to build on existing scientific models not to do significant departures from the existing models and to incorporate them into our analysis and they do include economic costs of rising sea levels mister connolly and when we look at this undue burden on the private sector and certainly none of us want an undue burden for example look at the liability cap  response that basically said here is the public record we will give you more we have twice requested since responses will you commit today to answer questions that were asked and that you agreed to answer  undated letter but it came in to us in december in which you said you would give us the rest of the responses i am just saying will you commit today to keep that promise from december of last year mister sunstein i think if there is a promise there that my office made i can commit to  referred to the previous administration more than any other administration let me ask a question though about this whole idea of announcing you are going to go through a rule process or an executive order and then basically consulting that is a great thing and i think all of us on the dais would commend that but if in fact an agency announces that they are going to do something and then begins effectively compelling states or individual parties to live up to the proposed proposed proposed rule isn't that contrary to good government mister sunstein well it is very important for agencies to listen to what people have to say so if the agency hasn't carefully considered comments then that would not be consistent with the spirit of the president's executive order or the administrative procedure act mister issa so if the administration wanted to make it clear that they were looking at something but did not want to have it be compelled as though it was a rule they should say so in the process shouldn't they mister sunstein i am not sure i understand exactly mister issa well let me just put it clear epa has a policy that now what they do is they announce or give guidance to what may someday be rules and if they get enough compliance from the states and other stakeholders they never have to issue a rule that they have changed things without ever having it that seems to be a part of this administration's direction and i am asking you shouldn't the administration any agency be clear that if rulemaking is the appropriate goal that they make it clear that they are not looking for change in advance of rulemaking unless there is a real emergency and that emergency is stated and stated here on the hill mister sunstein i fundamentally agree with what you have just said and what i would say is the administrative procedure act makes a clear distinction between guidance documents and rules guidance documents lack the force of law they are not binding they have an advisory quality and under a memorandum from march of two thousand and nine guidance documents are it you have gone your own way let me ask a broader question though in addition to that since the time is limited yesterday we had the epa administrator repeatedly tell us that something was from the previous administration in other words permits rules studies and so on and that they automatically appear to have been set aside to start over anew simply because this is a new administration don't you believe that for the most part there is a binding authority unless justified for a change from previous administrations whether they be republican or democratic mister sunstein my mind is going through i taught administrative law for many years and as you are aware there the most vulnerable americans in this country as a matter of fact medicaid accounts for forty two percent of long term care spending and in a time when there are those on the other side of the aisle who want to  inate the traditional medicare put private insurance companies in charge of health benefits and costing users to pay more for their health care i am concerned about the shifting to states with regard t seniors it is the number one topic when i go into my district as you know programs like medicaid and no child left behind are not technically covered by umra however we also know that the federal government can impose significant costs on states when it changes the conditions required to receive federal aid the republican budget resolution would dramatically change medicaid from an entitlement program into a block grant essentially removing any guaranty of care for those least likely to be able to care for themselves people like my mother who is eighty five years old medicaid would be cut by seven hundred and seventy one dollars billion over the next ten years the congressional budget office's analysis of the republican budget  estimates that the federal medicaid funding to states would be cut by thirty five percent in two thousand and twenty two and by forty nine percent in two thousand and thirty whether technically covered by umra or not these changes would impose a remarkable unfunded mandated on states that would like to continue to provide the same level of existing coverage for their most vulnerable citizens now this subcommittee has held three hearings on unfunded mandate offered rhetorical support for relief from federal mandates but when it comes to their budget resolution it is clear that the republicans have no problem whatsoever imposing greater costs on states and local governments the drastic cuts to medica add significant burdens on state budgets to maintain current coverage or cover a consequent increase in emergency room visits by previously medicaid eligible people administrator sunstein have you considered is their business not quite mine mister cummings all right let me ask you this if states are given less money from the federal government as part of a medicaid block grant what kind of budget pressures would states likely face in maintaining existing levels of resulted in states receiving an estimated one hundred and seven dollars billion in additional funding to help defray the costs associated with increasing medicaid enrollment according to the kaiser foundation mister sunstein for every one percent increase in national unemployment medicaid enrollment increases by one million individuals does the republican budget block grant plan include any funding contingencies in the event of another economic downturn or a natural disaster s analysis umra currently includes language expressly providing that an agency's failure to perform any estimate analysis statement or description under umra cannot be used as a basis for delaying or invalidating a rule removing this language limiting judicial review would be a significant change to umra in two thousand and nine gao issued a report on rulemaking process in that report gao found that of the agencies reviewed the average time needed to complete a rulemaking was four review is worth a candle whether it provides sufficient safeguards to rely on self policing or whether a judicial check is an important supplement on that kelly okay so if the president has made that commitment and we all agree that there is this overwhelming amount of regulation that comes out and i have to tell you coming from the private sector and somebody who actually funds all these programs that are mandated and a lot of these unfunded mandates in the direction we go i want to ask you is there any remedial process at all having sat through many many many many audits myself both in my private life and serving in a city council where thrilled at the fact that milk has been defined as oil under the oil spill rule and there were concerns and references to expenses and the epa recently exempted milk and dairy from the oil spill rule that saves   the oversight that takes place or the audits that take place my concern has always been in the private sector that where is the private sector's role on these committees and when do we get a chance to weigh in because most of the time the people that come in have never actually done what the people that they are overseeing have done and actually haven't walked in their shoes so really don't know what it takes to run these different entities and yet they are being regulated and mandated to do things that in some cases okay well what we have done for the regulatory look back is to ask the public for ideas and we have gotten a lot about rules that are causing the sorts of problems to which you point and those ideas have come in and they are reflected in the agency plans that will be released soon mister kelly okay i know you said we have asked the public but have we actually engaged those people who are actually doing what it is that we are overseeing or regulating to be at the table to have some input as to what is being asked of them mister sunstein yes there are a few mechanisms for that we are available that is the office of information and regulatory affairs is available for meeting with people certainly on rules under review if there are am not talking about public comment what i am speaking of and i mean specifically because i am involved in a lot of these different things the private sector is really not consulted on a cost benefit analysis in fact in your testimony it says the agency at its sole discretion  so what that says to me is it will determine again i am very leery of a government that thinks it can do better than anybody else and thinks it is smarter than anybody else but has actually never done what it is that they are trying to regulate and it drives the cost of that up now we talk about cost savings and cost benefits i would suggest to you that that is not always the case at the end of the day the government decides what it is going to be and those people who are left holding the bag are left holding the bill are not really brought to the table  nd i would say that is more the case than not the case mister sunstein okay you are absolutely right for some of the high profile high expense rules including the caf rule the fuel economy rule where the benefits were really high and costs were a lot  to be and there are unintended consequences as we know a lot of the things that are funded in the highway transportation are revenues derived from the sale of gasoline so when you eliminate one source it has to come up someplace else and we have this habit down here to try and place the blame on when you are up to your rear end in alligators who was supposed to drain the swam and i think it is a little bit of bass ackwards way of doing things and i would just suggest that while you have this ability please let's make sure that we get the private sector to the table let's get their input before we said in your book written in your book radicals and robes almost all gun control legislation is constitutionally fine and if the court is right then fundamentalism does not justify the view that the second amendment protects an individual's right to bear arms  that something that you or anybody in the administration is working on mister sunstein no that quotation actually was from a position not a position i held at the time i was describing a position that some other people held in any case one thing that is very clear is what academics write in their academic capacity has exactly no appropriate bearing on what government officials do in their governmental capacity mister chaffetz and i appreciate that that is why i am asking you if those previous positions are something that you are currently working on now not working on those issues mister chaffetz at an earlier hearing the gao testified that one of the most frequently cited reasons that a rule was not considered to be an unfunded mandate was the fact that the rule did not go through the proposed rule agencies that are some of the most egregious in just unilateral rulemaking that is bypassing the congress and causing chaos mister sunstein well it is a very important question the office of information and regulatory affairs has an implementation r answer that important question there would be an independent process where of course this would be congress's judgment and i am sure the executive branch would have a view mister chaffetz there are some of us that are really struggling to understand where rulemaking should stop and where really congress should have the ability to write the laws of the land do you see any conflict with the rules as it relates to the separation of powers  first question we ask the first question i personally ask is is there legal authority from congress to act that is the foundation stone for every exercise of rulemaking authority that the executive branch legitimately engages in is hard for me to find a rule out there that i couldn't find at some point some benefit for if i look hard enough and you allow me to be able to pick the assumptions i can say this will prolong life for certain people this will help the economy in some country ours some other place this will help somehow the global environment just about everything that we could do if you allow me to create the assumptions i could come up with enough benefit to say yes we should do this i know it is going to cost seventy five dollars million but we should do this because it will benefit the economy over the next fifty years seventy five dollars million so the cost benefit weighs out the difficulty of this becomes how do we evaluate that and the previous question that you were just referring to do we have authority to do this  is this constitutional is this the right thing to do within our free republic or are we imposing arbitrary rules on people because we have a preference and we think at this point this is a good idea knowing full well if the politics change  the presidency changes and the executive office changes they may switch it right back as this administration released some of the old rules and said no we are not going to do those we are going to do it differently what we want to have is a stable environment that is not just at the whims of the executive branch constantly moving on state and local governments tribal governments and private business how do we balance that out where it is not preference based with some benefits out there in the sky mister sunstein great the new executive order i think for the first time actually has prominent references to predictability and reduction of uncertainty so especially in this economic environment to have people surprised by rules or hit on the left and hit on the right by possible to have manipulation of the process mister lankford correct if i say that global warming is caused by manmade pollution suddenly everything that we do that ever relates to global warming it is we are saving the planet what value can you put on the earth so everything whether it is one hundred domains that are the kind of staple of government rulemaking so that if someone says i guess your number was something like seventy dollars million that we have over the next fifty years seventy dollars million of benefit to justify that that seventy those great dynamics over the life of a car if it also makes a lighter weight car and someone dies in a crash how do you evaluate the benefit mister sunstein that is an extremely important question and that is something that we meaning not just the office of information and regulatory affairs but the department of transportation the environmental protection agency and the council of economic advisors look extremely carefully at mister lankford but that is the challenge because once you start getting into those assumptions and you start evaluating it it is very difficult for me to be able to say let's hand that to an but they go through the feedback to go through the end of it but at the end of the day they can still say no we are keeping it mister sunstein it is a very important point and if you look at our guidance on the regulatory look back that is the guidance the office of information and regulatory affairs issued it tried  there is some separation and note that if the numbers aren't good there are checks both internal and external so there are a number of occasions where a projection of cost determination to say this was the legislation the regulation is written and it doesn't fulfill legislative intent mister sunstein i think judicial review generally is required by the administrative procedure act it has bipartisan support on the particular  unfunded mandate that is coming down or whatever significant rule may be coming out and also giving a time line that lengthens that out for instance where a state government that only meets every two years in their legislative branch if they suddenly have a rule that is now going to start eighteen months from now but they just finished their legislative session they have to call in a special session to figure out how to be able to budget for something that is coming down on them how is that warranted and how do we start establishing a time period for these mister sunstein that is a great point one place where the president has clearly signaled this in the small business memorandum where he called out that part of the regulatory flex act that refers to delayed compliance dates mister lankford but is that a waiver that needs to be done or is that something that needs to be established as a process to say regulation cannot go into effect until  great okay so the first question is whether the law allows consideration of delayed compliance dates for small businesses or for anybody else state and local government in particular and not infrequently the law does give the executive branch some discretion in terms of timing so that is the first question then the second question is whether the delayed compliance date is important to protect predictability especially perhaps in a very difficult economic time or whether in some cases it would delay very important public health benefits and that is an assessment that is common mister lankford right well there is a significant challenge for a local municipality that the department of transportation says your street signs are not reflective enough so you have to change all of your street signs they get some allotment to be able to do that through a grant there is not enough and now they are having to determine to make the deadline do i pay police officers and firefighters or do i put in new street signs it suddenly becomes this whole challenge of if they are given more time now the battle of that is you shouldn't also have one thousand waivers sitting on your desk and be able to decide back and forth who gets it and who doesn't but to establish some sort of process for that that is what i am suggesting bringing back up the independent agencies we have a lot of independent agencies and by the way this was very helpful this is your book risk and reason going through a prospective in two thousand and two that you wrote about oira and some of the details in that was very helpful to be able to go through in preparation but you made a statement in there about oira should  also see as one of its central assignments the task of overcoming governmental tunnel vision by ensuring that aggregate risks are reduced and that agencies focus on particular risks and that does not mean their ancillary risks are ignored or increased so avoiding this governmental tunnel vision i think that is a great statement to be able to make the difficulty becomes in the independent agencies how do we engage with oversight in the independent agencies and do you see one of the independents that is out there that you would say they should not have oversight they should have tunnel vision and be allowed to cautious in discussing them i would just add two points one is that noticing concerns of the sort to which you just pointed and my voice is genuinely failing it is not failing orders and oversight they would be exempt from umra as they come in as an independent how do we keep a group with so much authority and so little accountability from getting this tunnel vision that you talk about in your book  appropriate people would be mister lankford there will obviously be significant rules that will come out of those many of them with millions of dollars of impact on the economy just based on the basis of how it comes out with dodd frank we suddenly have a group with no accountability to a partisan budget when only members of one party vote for it and not a single member of the other party vote for it i don't know that that is a normative statement i think it is just a factual statement it is a part the issue of permits under regulatory review now it is my understanding that some of the strip mining permits granted under the previous administration were in fact in violation of federal law under the clean water act is that the case you know our role is not in we don't have a role over permits except insofar as there are rules behind the permit process so i would plead limited role with respect to that question  you might agree that if a subsequent administration finds that deliberately or inadvertently there is in fact by the issuance of a permit the circumvention of existing statutory framework with respect  sunstein the rules that have been proposed and issued in this administration have been carefully scrutinized to make sure there is compliance with the law and with existing executive orders and insofar as they are  not finalized but proposed we are eager to hear what people have to say mister connolly but presumably again we use that word externalities but i mean the value of a human life the prevention of the loss of it has to factor in to the decision about whether or not a to enforce regulations andor new regulations i mean to impose and secondly to enforce those that are existing is that not correct mister sunstein that is a crucially important point and  the fact is that the net benefits of regulations in the first two years of this administration are significantly higher actually three times those under the clinton administration more than three times those in the first years of the clinton administration and the main reason is life sector more in the technology realm so i intersected with the federal government regulatory frameworks in technology before i came here to congress but i also served like he did in local government for fourteen years could you expand a little bit on what is the current process for the opportunity of the private sector or for that matter the public sector to participate in the formulation of new regulations or a review of existing ones to streamline or eliminate or sunstein okay great thank you for that i will give you a bunch of opportunities people have and they won't be in sequence but they are all really important if there is a rule pending before the office of information and regulatory affairs we have about one hundred and twenty five right now our doors are open at both the proposed and final stage for people to come in and express their concerns this is very important and perhaps not sufficiently appreciated the availability of the process by the way the agency the rulemaking agency will be present also to hear the concerns and that is something that happens a great deal it could happen more under the president's executive order before a rule is proposed if feasible agencies should be engaging with state and local officials to see whether the rule makes sense so for rules that affect their interest and that could be well under one hundred dollars million annually it could be an exemption for one or another reason from the umra there is supposed to be engagement before the fact then there is an opportunity after the rule is proposed to engage through the comment process and while it seems a little dry and perhaps formal one thing i have learned in government is yes it is dry but it is not formal in the sense of empty it really matters many people in agencies and i personally spend a lot of time it is a little pathetic on my part to be sure to be studying regulations gov and the comments that come in from state and local government at night but i actually do because you often learn a great deal about something that is maybe  not going in quite the right direction and you can make it better so there is that stage of commenting then at the final stage agencies not infrequently engage before they write the final rule with state and local government and that is consistent with the president's executive order and also when the final rule comes over to oira there is an additional bite at the apple now you referred to the look back process which is unprecedented and in that sense historic effort to look at the regulations now on the books and this has gotten a lot of bipartisan enthusiasm the agencies went out to the private and public sectors most cabinet level departments and agencies asking for comments by the federal register but that is just the beginning the plans that will be announced soon are under the executive order by design preliminary plans and under guidance we issued taking note of many of the points that have come up today and maybe we will be able to do a better job now that i and we in back of me have heard these concerns will have a public process where if people think the plans are too aggressive maybe in the deregulatory area then that is important to hear if they think they are too weak if they have other ideas for cost reduction then there is a great opportunity complaining and these are bipartisan republicans democrats independents they are complaining because they are being asked to clean the water and get rid of phosphorus in the water and they are going to be spending billions of dollars over the next ten years and the dollars over the next ten years then the question is what do you get on the other side is it significant ecological and human health benefits that would be one thing if it is not that would be another thing mister labrador so how do we study that and is that something that we can send to you and always say but it will save it a life so we have to require that in balancing out the freedom of our nation with any kind of onerous requirement and evaluating who determines whether it is onerous or not becomes the other challenge you also mentioned the historic nature of the look back i would agree that it is historic but there will also be a lot of people very attuned to seeing what the agencies consider as things to be able to kick out if they are choosing only certain regulations that came down during certain political times in our nation's history and say okay this one this one  this one we no longer prefer then that definitely becomes even more historic where we are now clearing the deck of everything that doesn't meet our personal preferences of the day so that is part of the challenge as well and part of the anxiety of watching the look back it is a good idea  number is still the right number twelve thousand eight hundred and sixty six just does one hundred dollars million period without the inflation on it is that too high is that too low should it be twenty dollars million what becomes an unfunded mandate and economically significant mister sunstein i think what i can tell you is kind of our day to be a whole apparatus including a regulatory impact analysis to try to make sure we have what you are concerned about which is an objective and kind of scrutinized analysis of costs and benefits the president's inflation let me ask this regulation is the fulfillment of a piece of legislation would you agree with that legislation comes first regulation is filling in the details from there when there is a question about regulation and if it is appropriate or inappropriate who do you think is the best entity to determine whether that regulation fulfills the legislative intent mister sunstein well ultimately the best is the federal courts that is what they are there for before that whether this is constitutional or whether the actions are consistent with the law but is there a gain to be able to go back to the legislative branch to say what was the intent here or do you think you ask the administration can't determine what the intent is and so you go to a third party and ask them what the intent is is there a gain to just sending it back to the people who wrote it and say what is the intent here mister sunstein well a little out of my oira lane on that question but the courts view is  that the best indicator of the views or intentions of the enacting congress is the language and supporting materials of the enacting congress and the courts are typically wary of what  just to be clear on it when we are dealing with the judicial branch reviewing the regulatory intent you would think that is appropriate but if you are dealing with an agency doing something that the private sector or a state considers onerous you think the agency should be the one to settle that not the the lawmaking authority is final to determine legality then the judicial judgment is the one but we have had occasions over the last years where an administrative review as somebody who ran the eleventh largest school district in america it costs a lot of money to implement no child left behind well in excess of one hundred dollars million and given the timeliness of it the president himself  recognized some of the flaws in the legislation and many of us certainly hear from our respective school districts about the fact that good intentions though it may represent it is an onerous burden and remember that in lean times for state and local governments  and school systems it also represents an opportunity cost every dollar i have to spend implementing that in addition to the cash outlay is a dollar i am not investing somewhere else in the school system so i would urge omb to look at no child left behind is basically not taking an aggregate is it possible for an agency to break up a piece into multiple sections and to now say it is under the threshold because it is not one big piece it is five smaller mister sunstein it is possible we haven't seen it  hopefully we never will on that one thank you very much for coming and being able to testify today appreciate your input on this as we try to settle this issue this is a piece of legislation that desperately needs repair and i am sure we will have very robust conversations on the solutions to repair it thank you very much for this we stand adjour