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THE VIEWS OF THE ADMINISTRATION ON 

REGULATORY REFORM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

JANUARY 26, 2011 

Serial No. 112–1 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE MYRICK, North Carolina 

Vice Chair 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN BILBRAY, California 

CHARLIE BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

BOB LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan, Chairman 

Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

JANE HARMAN, California 

JAN SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

PROFESSIONAL STAFF

GARY ANDRES, Staff Director 

JAMES D. BARNETTE, General Counsel 

PHILIP S. BARNETT, Minority Staff Director 

(II)

(III) 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

CLIFF STEARNS, Florida 

Chairman 

SUE MYRICK, North Carolina 

MARSHA BLACKBURN, Tennessee 

LEE TERRY, Nebraska 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

BRIAN BILBRAY, California 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

CORY GARDNER, Colorado 

MORGAN GRIFFITH, Virginia 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

DIANA DEGETTE, Colorado 

Ranking Member 

JAN SCHAKOWSKY, Illinois 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

EDWARD J. MARKEY, Massachusetts 

GENE GREEN, Texas 

CHARLES A. GONZALEZ, Texas 

JOHN D. DINGELL, Michigan 

HENRY A. WAXMAN, California (ex officio) 

(V) 

C O N T E N T S 

Page 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 2 

Prepared statement .......................................................................................... 3 

Hon. Diana DeGette, a Representative in Congress from the State of Colorado, opening statement ...................................................................................... 5 

Prepared statement .......................................................................................... 6 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 7 

Prepared statement .......................................................................................... 8 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 8 

Prepared statement .......................................................................................... 9 

Hon. Cory Gardner, a Representative in Congress from the State of Colorado, 

opening statement ................................................................................................ 10 

Prepared statement .......................................................................................... 11 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 12 

Prepared statement .......................................................................................... 13 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 24 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

prepared statement .............................................................................................. 25 

WITNESSES

Cass R. Sunstein, Administrator, Office of Information and Regulatory Affairs ....................................................................................................................... 28

Prepared statement .......................................................................................... 31 

Answers to submitted questions ...................................................................... 113 

SUBMITTED MATERIAL

Supplemental memorandum, dated January 26, 2010, submitted by Mr. Waxman ........................................................................................................................ 15 

‘‘Toward a 21st-Century Regulatory System,’’ article dated January 18, 2011, 

by Barack Obama, Wall Street Journal ............................................................. 78 

‘‘The EPA’s War on Texas,’’ article dated January 4, 2011, Wall Street Journal .......................................................................................................................... 80 

Subcommittee exhibit binder .................................................................................. 82 

‘‘EPA ‘confident’ Obama reg policy won’t affect new climate rules,’’ article 

dated January 18, 2011, by Andrew Restuccia, The Hill ................................. 118 

(1) 

THE VIEWS OF THE ADMINISTRATION ON 

REGULATORY REFORM 

WEDNESDAY, JANUARY 26, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

Washington, D.C. 

The subcommittee met, pursuant to call, at 10:02 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Cliff Stearns 

(chairman of the subcommittee) presiding. 

Members present: Representatives Stearns, Terry, Sullivan, Murphy, Burgess, Blackburn, Myrick, Bilbray, Gingrey, Scalise, Gardner, Griffith, Barton, McKinley, Upton (ex officio), DeGette, 

Schakowsky, Weiner, Markey, Green, Gonzalez, Dingell, and Waxman (ex officio). 

Staff present: Karen Christian, counsel; Stacy Cline, counsel; 

Todd Harrison, chief counsel; Sean Hayes, counsel; Alan Slobodin, 

deputy chief counsel; Sam Spector, counsel; Peter Spencer, professional staff member; Kristin Amerling, minority chief counsel; 

Karen Nelson, minority deputy committee staff director, health; 

Karen Lightfoot, minority communications director and senior policy advisor; Greg Dotson, minority chief counsel, energy and environment; Alexandra Teitz, minority senior counsel; Stacia Cardille, 

minority counsel; Tiffany Benjamin, minority counsel; Anne 

Tindall, minority counsel; Ali Neubauer, minority investigator; 

Brian Cohen, minority senior investigator and policy advisor; Jennifer Berenholz, minority chief clerk; Lindsay Vidal, minority deputy press secretary; and Mitchell Smiley, special assistant. 

Mr. STEARNS. Good morning everybody, and let me welcome all 

of you to the Subcommittee on Oversight and Investigations. We 

appreciate your early attendance, and if possible, we would like to 

start promptly at 10:00. I would also like to point out that Chairman Upton has indicated that this will be a very active subcommittee. It is a very important subcommittee. I think most of us 

on both sides of the aisle realize that Congress, the House of Representatives, has a very important role in oversight of the Executive Branch. In this case, there are many areas that we can explore 

both in a way that is substantive and at the same time, I think, 

in a bipartisan way to have a better understanding of where there 

is error, where there is complement, and in the long run to give 

full oversight to the Executive Branch according to the Constitution. So I welcome this opportunity as chairman of this very important subcommittee, and I thank Mr. Upton, our chairman of the 

2 

Energy and Commerce Committee, for this distinct honor to be able 

to be chairman. 

And of course, on the Democrat side, they have had some very 

illustrious people as Oversight and Investigations chairmen, including Mr. Dingell and Mr. Waxman and others, so I look forward to 

this opportunity for the next term and I welcome from both sides 

of the aisle any comments or feedback. 

Let me open with a little bit of procedure. All members will have 

5 days to make their opening statements part of the record by 

unanimous consent. Also, we have agreed under our procedures 

that there will be no opening statements except for the chairman 

and the ranking member, Ms. DeGette, and then she will allot 5 

minutes to her members for another additional 5 and then I will 

do the same on this side. So again, I will do my 5 minutes, Ms. 

DeGette will do her 5 minutes, then I have 5 minutes that I have 

allocated to members on this side, and then you will have the same 

thing. With that, let me proceed to my opening statement. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

We convene this hearing of the Subcommittee on Oversight and 

Investigations today to gather information concerning the Administration’s views and plans for regulatory reform. Now, we can all 

agree that this is a critically important topic, worthy of being the 

Energy and Commerce Committee’s first hearing under the new 

Majority leadership. 

Over the past 2 years, as the American public confronted the 

worst unemployment crisis in a generation, it simultaneously has 

faced an onslaught of federal regulations, with more yet to come. 

While the growth of the regulatory state has been a continuous 

concern over the past 2 decades, the pace in recent years has been 

breathtaking, given the Nation’s dire economic situation. 

According to the OMB data compiled by the Heritage Foundation, in fiscal year 2009, which spanned both the Bush and Obama 

Administrations, major rules added $13 billion in new costs to the 

economy. In fiscal year 2010 alone, federal agencies promulgated 

43 major rules that imposed compliance costs estimated by the regulators themselves at almost $27 billion, the highest annual level 

since 1981. And we know agencies’ estimates of costs may often be 

just the tip of the iceberg when it comes to the economic impact 

on jobs, competitiveness and innovation. 

Now, along with all of these major rules come daunting levels of 

red tape, the costs of which cannot easily be counted. The Obama 

Administration’s regulatory agenda released this past fall identifies 

4,225 rules under development. The EPA alone has finalized 928 

regulations since the start of this Administration, and it has also 

proposed a number of expensive and complex new rules affecting 

our energy system, our industrial and manufacturing infrastructure, and even the electric power we rely upon every day. 

On top of this, new rules related to the expansive new health 

care law and the financial services reforms are certainly looming 

on the horizon, with regulatory impacts on many different aspects 

of our lives. From our health to our wealth to the freedom to live 

3 

our lives the way we want, the federal regulatory state continues 

to grow and intrude. 

Of course, many regulations, derived from the laws Congress enacted, are essential to protect the public health and welfare and ensure free markets. While appropriate implementation of these laws 

is essential for these purposes, appropriate consideration of the economic and employment impacts of the regulations is essential for 

protecting the Nation’s economic health and individual freedom. I 

am concerned that this balance has not properly been struck during the apparent rush to regulate over the past 2 years. 

Against this backdrop, we consider today the President’s new Executive order, initiatives relating to regulatory review and his stated focus on reducing the economic burdens of regulations and promoting job growth. Now, this focus is to be commended. We hope 

it will lead to meaningful results. 

To this end, we seek to understand specifically how the Administration performs its regulatory reviews and what changes we can 

expect that will reduce the regulatory burden, especially in the 

areas of this Committee’s jurisdiction. We will hear testimony and 

ask questions of a single witness today: Mr. Cass Sunstein, the current Administrator of the Office of Information and Regulatory Affairs, within OMB. Mr. Sunstein’s office serves as the intersection 

of the Administration’s rulemaking review process. In some respects, his office serves or can serve as a regulatory traffic cop, 

carefully reviewing significant rules to ensure that they are consistent with the law, the President’s policies and priorities and that 

they receive appropriate review and analysis from other federal offices and agencies. He is especially qualified to explain the prospects and limits of the Administration’s regulatory reform plans. 

My colleagues, it is important that rhetoric is matched with 

measurable results and actions. For example, after the Bush Administration took office in 2001, it made little change to the existing regulatory guidance, but it made extensive use of the available 

tools to return rules, ask questions and prompt additional review. 

It took an active role, sending 19 so-called return letters in the first 

2 years of the Administration. The present Administration has not 

even sent one return letter. We will gather information about this 

today. 

We will also gather information to help us to understand the 

substance of the plans for retrospective regulatory review called for 

by the President. We should seek to understand the limits of the 

review ordered by the President. Rules issued by independent 

agencies like the FCC, the BCFP, CFTC, CPSC, FERC, FTC, SEC, 

FDIC, and the Federal Reserve and the NRC, among others, have 

apparently been placed beyond the purview of the President’s review, and thus will not be affected by this initiative. 

The information we gather today should help this committee’s 

various oversight projects in the coming session of Congress. We 

have much ground to cover. 

[The prepared statement of Mr. Stearns follows:] 

PREPARED STATEMENT OF HON. CLIFF STEARNS

We convene this hearing of the Subcommittee on Oversight and Investigations 

today to gather information concerning the Administration’s views and plans for 

4 

regulatory reform. We can all agree this is a critically important topic, worthy of 

being the Energy and Commerce Committee’s first hearing under the new Majority 

leadership. 

Over the past 2 years, as the American public confronted the worst unemployment 

crisis in a generation, it simultaneously has faced an onslaught of federal regulations, with more yet to come. While the growth of the regulatory state has been a 

continuous concern over the past 2 decades, the pace in recent years has been 

breathtaking, given the nation’s dire economic situation. 

According to the OMB data compiled by the Heritage Foundation, in fiscal year 

2009, which spanned both the Bush and Obama Administrations, major rules added 

$13 billion in new costs to the economy. In fiscal year 2010 alone, federal agencies 

promulgated 43 major rules that imposed compliance costs estimated by the regulators themselves at almost $27 billion, the highest annual level since 1981. And 

we know agency estimates of costs may often be just the tip of the iceberg when 

it comes to the economic impact on jobs, competitiveness, and innovation. 

Along with all of these major rules come daunting levels of red tape, the costs 

of which cannot easily be counted. The Obama Administration’s regulatory agenda 

released this past fall identifies 4,225 rules under development. 

The EPA alone has finalized 928 regulations since the start of this Administration. And it has also proposed a number of expensive and complex new rules affecting our energy system, our industrial and manufacturing infrastructure, even the 

electric power we rely upon every day. 

On top of this, new rules related to the expansive new health care law and the 

financial services reforms are looming on the horizon, with regulatory impacts on 

many different aspects of our lives. From our health to our wealth to the freedom 

to live our lives the way we want, the federal regulatory state continues to grow 

and intrude. 

Of course, many regulations—derived from the laws Congress enacted—are essential to protect the public health and welfare and ensure free markets. While appropriate implementation of the laws is essential for these purposes, appropriate consideration of the economic and employment impacts of the regulations is essential 

for protecting the nation’s economic health and individual freedom. I am concerned 

that this balance has not properly been struck during the apparent rush to regulate 

over the past 2 years. 

Against this backdrop, we consider today the President’s new Executive order and 

initiatives relating to regulatory review and his stated focus on reducing the economic burdens of regulations and promoting jobs growth. This focus is to be commended; we hope it will lead to meaningful results. 

To this end, we seek to understand specifically how the Administration performs 

its regulatory reviews and what changes we can expect that will reduce the regulatory burden, especially in the areas of this committee’s jurisdiction. We will hear 

testimony and ask questions of a single witness: Mr. Cass Sunstein, the current Administrator of the Office of Information and Regulatory Affairs (OIRA), within OMB. 

Mr. Sunstein’s office serves at the intersection of the Administration’s rulemaking 

review process. In some respects, his office serves or can serve as a regulatory traffic 

cop, carefully reviewing significant rules to ensure they are consistent with the law, 

the President’s policies and priorities, and that they receive appropriate review and 

analysis from other federal offices and agencies. He is especially qualified to explain 

the prospects and limits of the Administration’s regulatory reform plans. 

It is important that rhetoric is matched with measurable action and results. For 

example, after the Bush Administration took office in 2001, it made little change 

to the existing regulatory guidance, but it made extensive use of the available tools 

to return rules and ask questions and prompt additional review. It took an active 

role—sending 19 so-called return letters in the first 2 years of the Administration; 

the present Administration has not even sent one return letter. We will gather information about this today. 

We will also gather information to help us to understand the substance of the 

plans for retrospective regulatory review called for by the President. We should seek 

to understand the limits of the review ordered by the President. Rules issued by 

independent agencies—FCC, the BCFP, CFTC, CPSC, FERC, FTC, SEC, FDIC, the 

Federal Reserve, the NRC, among others—have apparently been placed beyond the 

purview of the President’s review, and thus will not be affected by this initiative. 

The information we gather today should help this Committee’s various oversight 

projects in the coming Session of Congress. We have much ground to cover; so let 

me recognize, with pleasure, our new Ranking Member, Ms. DeGette. 

5 

Mr. STEARNS. It is my pleasure to recognize our new ranking 

member, Ms. DeGette. 

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Ms. DEGETTE. Thank you very much, Mr. Chairman. I am excited about the opportunity to serve in the 112th Congress as the 

ranking member of this esteemed committee. As you mentioned, 

Mr. Chairman, this is one of the most effective committees in the 

House, and in my 14 years on this subcommittee, it can also be one 

of the most bipartisan committees, and I look forward to working 

with you and my colleagues on both sides of the aisle both on new 

initiatives and also to follow up on some of the key investigations 

that we were working on in the last session of Congress. I also 

want to thank my chairman, Mr. Waxman, and my chairman emeritus, Mr. Dingell, for their fine investigative work on this subcommittee over the years. 

Both Democrats and Republicans have supported laws to protect 

the health, environment, financial security, and safety of the American people. Today’s hearing is about how to ensure that the regulatory system that implements these laws functions as effectively 

and efficiently as possible. This is a laudable goal that both sides 

of the aisle should support and which I personally support wholeheartedly. I was encouraged by the President’s announcement last 

night in the State of the Union about his new initiative to streamline and modernize government, which is way overdue in many 

cases. 

The President’s new Executive order on improving regulation 

and regulatory review is an excellent starting point in this process. 

The order is based on such sound principles as the regulatory system must be based on the best available science, regulations protect public welfare while promoting economic growth and job creation should be retained, and the process must allow for public participation and open exchange of ideas, and the process must take 

into account both cost and benefits. Consistent with this directive, 

the Obama Administration has already identified several regulations that could be refined or cut, and I expect that we will hear 

from our witness today about additional areas where we can look 

at regulations. 

I commend the Administration for this effort, and I hope that we 

can work together to support cost-effective implementation of the 

laws Congress has enacted to protect the American public’s health, 

financial safety and security and their personal safety. These sensible safeguards are vitally important to the American people. 

We must recognize, however, that regulations per se are not the 

problem. The mantra that all regulations are inherently bad and 

kill jobs is wrong and dangerous. Just 2-and-a-half years ago, for 

example, our financial system virtually collapsed following years of 

deregulatory efforts by Congress. The Securities and Exchange 

Commission and other federal financial regulators sat on the sidelines while flawed and unchecked financial practices robbed Americans of their retirement savings and caused our economy to nearly 

collapse. It wasn’t regulations that caused the financial collapse 

6 

and the deepest economic recession since the Great Depression, it 

was unbridled deregulation. 

For too long, big polluters have been allowed to dump toxic mercury into the air, resulting in birth defects and developmental problems for children in affected communities. Finally, after years of 

delay, the Administration is taking action to rein in this toxic contamination, and we should all support these efforts. Again, it is not 

regulations that caused these problems, it is the lack of regulations. 

At the direction of the Supreme Court, the EPA has recently set 

standards to cut carbon pollution from cars and trucks. This regulation is a win-win. Not only does it cut pollution responsible for 

climate change, it saves 1.8 billion barrels of oil, making the Nation more energy-independent and secure and saving American 

families money at the pump. 

Regulations to protect children from the health effects of tobacco 

and to prevent another salmonella outbreak in eggs or other 

threats to food safety are also important examples of where these 

problems have not been caused by an excess of regulations but 

rather a lack of regulations. So when you examine the details of 

these and other safeguards, you find that there is a real need for 

government action. 

Now, I look forward to hearing from our witness today regarding 

the implementation of the Obama Administration’s Executive order 

on improving regulations and the regulatory process. It is a commonsense plan to cut outdated regulations and promote transparency. I also look forward to working with all members of this 

subcommittee to examine regulatory reform in a sensible way. 

Thank you, Mr. Chairman. 

[The prepared statement of Ms. DeGette follows:] 

PREPARED STATEMENT OF HON. DIANA DEGETTE

Both Democrats and Republicans have supported laws to protect the health, environment, financial security, and safety of the American public. Today’s hearing is 

about how to ensure that the regulatory system that implements these laws functions as efficiently and as effectively as possible. 

This is a laudable goal that both sides of the aisle should support. The President’s 

new Executive order on improving regulation and regulatory review is an excellent 

starting point. The order is based on sound principles such as: 

•The regulatory system must be based on the best available science; 

• Regulations protect public welfare while promoting economic growth and job creation; 

•The process must allow for public participation and the open exchange of ideas; 

and 

•The process must take into account both costs and benefits. 

Consistent with this directive, the Obama Administration has already identified 

several regulations that could be refined or cut. 

I commend the Administration for this effort. And I hope that we can work together to support cost-effective implementation of the laws Congress has enacted to 

protect the American people’s health, financial security, and safety. These sensible 

safeguards are vitally important to the American people. 

We must recognize, however, how important regulations are to our national welfare. The mantra that regulations are inherently bad and kill jobs is wrong and dangerous. 

Just 2-and-a-half years ago, our financial system virtually collapsed. Following 

years of deregulatory efforts by Congress, the Securities and Exchange Commission 

and other federal financial regulators sat on the sidelines while flawed and unchecked financial practices robbed Americans of their retirement savings and caused 

the our economy to collapse. 

7 

It wasn’t regulations that caused our financial collapse and the deepest economic 

recession since the Great Depression. It was unbridled deregulation. 

For too long, big polluters have been allowed to dump toxic mercury into the air— 

resulting in birth defects and developmental problems for children in affected communities. Finally—after years of delay—the Administration is taking action to rein 

in this toxic contamination. We should all support these efforts. 

At the direction of the Supreme Court, EPA has recently set standards to cut carbon pollution from cars and trucks. This regulation is a win-win. Not only does it 

cut pollution responsible for climate change, it saves 1.8 billion barrels of oil—making the nation more secure and saving American families at the pump. 

Regulation to protect children from the health effects of tobacco and to prevent 

another salmonella outbreak in eggs or other threats to food safety are other important examples of where government is on schedule to act and must do so. 

When you examine the details of these and other safeguards, you find that there 

is a real need for governmental action and that action will substantially benefit the 

public and the nation. 

I look forward to hearing from our witness regarding implementation of the 

Obama Administration’s Executive order on improving regulations and the regulatory process. This is a common sense plan to cut outdated regulations and promote 

transparency. In contrast, the Republican plan to eliminate safeguards vital to the 

welfare of Americans makes absolutely no sense at all. 

Mr. STEARNS. I thank the gentlelady. 

And now, according to our procedures, we have 5 minutes on this 

side, and they will be allocated to Mr. Upton, the chairman, at 1 

minute, Mr. Barton, 2, Mr. Burgess, 1, and Mr. Gardner, 1. So the 

chairman, Mr. Upton, is recognized for 1 minute. 

Mr. UPTON. Well, thank you, Mr. Chairman, and I would ask 

unanimous consent that my full statement be made part of the 

record. 

Mr. STEARNS. By unanimous consent. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Thank you for your very quick efforts to begin work 

in this 112th Congress. We have a lot to accomplish over the next 

2 years, and this subcommittee will certainly play a key role. 

Let me begin by welcoming our witness today, Mr. Cass Sunstein 

of the Office of Information and Regulatory Affairs. It is fitting that 

our first hearing is focused squarely on job creation and economic 

consequences of burdensome regulations that stifle investment and 

shift jobs overseas. Our Majority has made it clear that jobs are 

priority number one in this Congress. We can create a climate of 

job growth by cutting spending, by limiting the size and scope of 

government. I have asked our committee members to track down 

burdensome regulations that choke investment and destroy jobs, so 

we will identify these regulations, shine a light on them and then 

seek their repeal. 

I welcome the President’s announcement that his Administration 

plans to evaluate regulations to ensure that the benefits justify the 

costs and federal rules are tailored to impose the least burden on 

society, and I would ask again that the rest of my statement be 

made part of the record. I yield back. 

[The prepared statement of Mr. Upton follows:] 

8 

PREPARED STATEMENT OF HON. FRED UPTON

Thank you, Mr. Chairman, and thank you for your quick efforts to begin the work 

of the 112th Congress. We have a lot to accomplish over the next 2 years, and this 

Subcommittee will play a key role. 

Let me begin by welcoming today’s witness, Mr. Cass Sunstein of the Office of 

Information and Regulatory Affairs. Mr. Sunstein is the Administration’s point person on regulatory issues, which makes him the ideal witness for today’s hearing on 

recent changes—announced last week by President Obama—to the Administration’s 

regulatory stance. 

It is fitting that our first hearing is focused squarely on job creation and the economic consequences of burdensome regulations that stifle investment and shift jobs 

overseas. Our majority has made it clear that jobs are priority number one for the 

112th Congress. We can create a climate of job growth by cutting spending, and by 

limiting the size and scope of government. I have tasked our Committee Members 

to track down burdensome regulations that choke investment and destroy jobs. We 

will identify these regulations, shine a light on them, and then seek repeal. 

I welcome the President’s announcement that his administration plans to evaluate 

regulations to ensure the benefits justify the cost and federal rules are tailored to 

impose the least burden on society. 

I also hope today’s hearing will shed light on the many unanswered questions 

about the new Executive order. How does it differ from practices currently in place? 

How will the administration’s regulatory approach change for the thousands of 

pages of forthcoming regulations as a result of legislation enacted last year? 

Last year more than 6,000 pages of regulations were released to implement the 

health care law. Next month, the EPA will issue Boiler MACT rules, an earlier 

version of which were estimated by the agency itself to cost thousands of jobs. 

We will also explore what this Executive order means for the litany of other regulatory policies in the pipeline, from greenhouse gas standards to government regulation of the internet. With 20 consecutive months of near double digit unemployment, 

the public expects, and demands, that we do better. 

Thank you. I yield back. 

Mr. STEARNS. The gentleman yields back. 

The gentleman from Texas is recognized for 2 minutes. 

Mr. BARTON. Mr. Chairman, do you want to go back and forth? 

Mr. STEARNS. No, we are going to take our full 5 minutes on this 

side and then she is going to do her 5 minutes. 

Mr. BARTON. OK. I ask unanimous consent that my entire statement be put in the record, Mr. Chairman. 

Mr. STEARNS. Consent granted. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Let me congratulate you on being the chairman of 

this subcommittee. It is one of the important, if not the most important subcommittee of what I consider to be the best committee 

in the House. In a previous majority, I was subcommittee chairman 

of this subcommittee for 4 years and enjoyed it immensely. I have 

worked with numerous other subcommittee chairmen in Oversight. 

The importance of congressional oversight cannot be overstated. 

In my opinion, the last 2 years under Mr. Waxman, Subcommittee 

Chairman Stupak was not aggressive in subjecting the Obama Administration to stringent oversight. I am sure you, Mr. Chairman, 

are going to correct that. As chairman emeritus of this committee, 

I stand with Chairman Upton and yourself in support of immediate 

and ongoing oversight of the Obama Administration and its practices and policies. Congressional oversight, if effective, leads to better functioning of government, one that protects the taxpayers by 

identifying excessive government spending, abusive regulatory reVerDate Nov 24 2008 12:27 Apr 25, 2011 Jkt 037690 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-1 012611\112-1 CHRIS
9 

gimes, and discovering ways to decrease spending and stimulate 

the economy. 

Today we are going to discuss the President’s Executive order entitled ‘‘Improving Regulation and Regulatory Review.’’ The order instructs federal agencies to develop plans to ensure that past, 

present and new regulations protect the public health, safety and 

welfare, and the environment while at the same time promoting 

economic growth. Who can be opposed to that, Mr. Chairman? 

However, having said that, in the last year alone, I have sent three 

letters calling attention to the lack of such analysis. I sent a letter 

to the White House concerning the impact of the Environmental 

Protection Agency’s CO2 endangerment finding. I sent another letter to the EPA regarding the proposed economic impact of proposed 

ozone standards, and this September I sent a letter to Chairman 

Waxman asking that he schedule a hearing on the Administration’s 

decisionmaking and consideration of job impacts in connection with 

a major rulemaking and other regulatory initiatives that might adversely affect employment in the United States. 

I see my time has expired, Mr. Chairman, so I am going to yield 

back and ask that the rest of my statement be put in the record. 

[The prepared statement of Mr. Barton follows:] 

PREPARED STATEMENT OF HON. JOE BARTON

Thank you Mr. Chairman for holding this important hearing, which marks the 

first oversight hearing of the 112th Congress. The importance of congressional oversight of the Executive branch cannot be overstated. For the past 2 years, the Obama 

Administration has not been subject to stringent oversight. As Chairman Emeritus, 

I stand with Chairman Upton and Subcommittee Chairman Sterns in support of immediate and ongoing oversight of the Obama Administration and its practices and 

policies. 

Effective oversight leads to a better functioning government-one that protects taxpayers by identifying excessive government spending and abusive regulatory regimes and discovering ways to decrease spending and stimulate the economy. 

Today we are here to discuss President Obama’s Executive order entitled ‘‘Improving Regulation and Regulatory Review.’’ The order instructs federal agencies to develop plans to ensure that past, present, and new regulations protect the public’s 

health, welfare, safety, and environment while at the same time promoting economic 

growth and job creation. In theory I agree with the President’s order. However, for 

the past two years the Obama Administration has pursued an aggressive agenda 

of regulatory expansion. Regulations were passed prior to the completion of a meaningful cost-benefit analysis that weighed the proposed benefit to the public against 

the actual cost to the economy. 

Last year alone, I sent three letters calling attention to the lack of this analysis. 

In January, I sent a letter to the White House concerning the impact of the Environmental Protection Agency’s CO2 endangerment finding on American jobs. In June, 

I sent a letter to EPA regarding the economic and job impacts of proposed ozone 

standards. And, in September, I sent a letter to then Committee Chairman Waxman 

requesting the Majority schedule a hearing to examine Administration decisionmaking and consideration of job impacts in connection with major rule-making and 

other regulatory initiatives that may adversely affect employment in the United 

States. I am glad that the President is finally asking for some kind of cost-benefit 

review and I look forward to our discussion on how his Administration plans to do 

this today. 

I want the public to know what I stand for. I support government regulations that 

equate to effective protection of the public’s health and safety. I do not support those 

that suppress innovation and unnecessarily burden small businesses. I support government regulations that are based on sound science. I do not support those that 

are based on bureaucrats’ opinions. And, as long as I serve the American public I 

will do my best to ensure that good governance prevails over lofty ideological goals. 

10 

Mr. STEARNS. By unanimous consent, will do. I thank the gentleman from Texas and recognize Dr. Burgess for 1 minute. 

Dr. BURGESS. Thank you, Mr. Chairman, and I also want to welcome our witness here today. An important subject, improving the 

regulatory environment. In our country, in fact, the President himself penned an op-ed in the Wall Street Journal on January 18th. 

Quoting from the President, ‘‘Over the past 2 years the goal of my 

Administration has been to strike the right balance, and today I 

am signing an Executive order that makes clear this is the operating principle of our government.’’ It is too bad that we didn’t have 

that principle 2 weeks prior, because in another editorial in the 

Wall Street Journal on January 4th they talked about the EPA violating every tenet of administrative procedure to strip Texas of its 

authority to issue air permits that are necessary for large power 

and industrial plants. Going on, the best the EPA could offer up 

as a legal excuse for voiding Texas permitting authority last Thursday was that the EPA had erred in originally improving the State’s 

implementation plan in 1992. The error that escaped the EPA’s notice for 18 years was that the Texas plan did not address all pollutants. Back then, Texas hadn’t complied with regulations that didn’t 

exist and wouldn’t exist for an additional 18 years. 

I will yield back the balance of my time, Mr. Chairman. 

I would ask that both of these be made part of the record, these 

reprints from the Wall Street Journal. 

[The information appears at the conclusion of the hearing.] 

Mr. STEARNS. I thank the gentleman, and I want to welcome two 

freshmen on the Oversight and Investigation Subcommittee: Morgan Griffith from Virginia and Cory Gardner from Colorado, and at 

this point allow Mr. Gardner 1 minute. 

Ms. DEGETTE. First of all, would the gentleman yield? 

Mr. STEARNS. I would be glad to yield. 

Ms. DEGETTE. This is the first I can remember we have had two 

Coloradoans on this committee, and so I also want to welcome my 

neighbor to the north and also our other new freshman, but particularly Cory. 

Mr. STEARNS. Good. Mr. Gardner, you have 1 minute. 

Mr. GARDNER. Thank you, Mr. Chairman, and thank you, Congresswoman DeGette. Thank you very much for the time to be 

here. Thank you to the witness. And I ask unanimous consent that 

my statement be entered in its entirety in the record. 

Mr. STEARNS. By unanimous consent. 

OPENING STATEMENT OF HON. CORY GARDNER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Mr. GARDNER. Thank you. Each day I am in town, my staff or 

I sit down with about five businesses from Colorado, and every 

business that we meet with talks about the concern that they have 

that this Administration is regulating them out of jobs and out of 

business, and those that aren’t already being regulated out of business are fearful that the proposed rules will put them on that path. 

We exist in an environment where government regulation is the 

answer to all of our problems. Congress can’t get both the House 

and the Senate to pass a bill so the Administration does it, and 

11 

they do it without having a process through Congress. The people 

speak through their representatives and then the Administration 

circumvents the people’s representative. The process must be fixed 

and it must be fixed here. 

The Executive order is the Administration’s attempt to clean the 

regulatory house, so to speak. It is a directive to agencies that they 

must provide a cost-benefit analysis when justifying regulations 

and reduce the burdens on small businesses that are forced to comply. The question I have, though, is, how do you define benefits and 

what constitutes a burden? The last 2 years have shown that the 

Administration has a very different view of what benefits our economy and our working families. 

So today is the first step that we have to go back to our hardworking constituents with the answers that are presented to every 

member here. We need to examine these sweeping federal rule 

changes that have the potential to cripple various sectors of our 

economy and negatively affect every business. 

I thank you, and I hope we move away from ‘‘when all fails, regulate.’’ 

[The prepared statement of Mr. Gardner follows:] 

PREPARED STATEMENT OF HON. CORY GARDNER

Mr. Chairman, I’ve been in office for about 3 weeks now. Each day I’m in town, 

I, or my staff, sit down with at least 5 businesses that operate in and out of Colorado. We have met with a cement production company, various municipalities trying 

to find ways to deal with water shortages, mining operations, manufacturing companies, and the list goes on. 

Every business that talks to my office has the same complaint: the Administration 

is regulating them out of jobs and out of business. And those that aren’t already 

being regulated out of business are fearful that proposed rules will put them on that 

path. 

We exist in an environment where government regulation is the answer to all our 

problems. Congress can’t get both the House and the Senate to pass a bill like cap 

and trade so the Administration does it—and they do it behind closed doors without 

having had an open and honest vetting process. What kind of democracy is that? 

The people speak through their representatives, and then the administration circumvents the people’s will. The process must be fixed and it must be fixed here. 

Executive Order 13563 is the Obama Administration’s attempt to clean the regulatory house, so to speak. It’s a directive to agencies that they must provide a costbenefit analysis when justifying regulations, and reduce the burdens on small businesses that are forced to comply. The question I have is: how do you define benefits 

and what constitutes a burden? The last 2 years have shown that the administration has a very different view of what benefits our economy, our culture, and our 

working families. I define benefits by protecting the environment that has been 

given to us, providing affordable healthcare to those that want it, while at the same 

time keeping Americans at work, and allowing businesses to prosper. I define burden as something that will put so much pressure on industries that they must let 

go many of their employees, pay fines that put them way behind production, litigate 

until they can’t afford it anymore, or worse—shut down entirely. 

Today is the first step in addressing the concerns of my hard-working constituents 

and those of every member present. We need to examine sweeping federal rule 

changes that have the potential to cripple various sectors of our economy and negatively affect Colorado businesses. 

I hope that this new Executive order is an indication that the administration believes the same thing, but I am skeptical that they are wed to the traditions of the 

past 2 years: when all else fails, regulate. This cannot continue and I look forward 

to hearing the witness’s answers to many of our questions on how it will assess 

pending and future regulations. 

Thank you, Mr. Chairman. I yield back my time. 

12 

Mr. STEARNS. I thank the gentleman, and I recognize Ms. 

DeGette. 

Ms. DEGETTE. Mr. Chairman, I will recognize our ranking member of the full committee, Mr. Waxman, for our additional 5 minutes. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Mr. Chairman, I am a strong opponent of unnecessary regulations. In my years of service on this committee and on 

the Oversight and Government Reform Committee, I led numerous 

oversight and legislative efforts to promote government efficiency 

and eradicate wasteful spending and programs. In fact, in the 

1990s, I served on the Advisory Committee for the corrections calendar set up by Speaker Newt Gingrich to identify outdated and 

pointless regulations so they could be quickly eliminated. I believe 

eliminating unnecessary government regulation is integral to ensuring effective government, but this is an area where it is easy to 

paint with too broad a brush. We need to remember that federal 

regulations also play a vital role in growing our economy and protecting our health and environment. 

That is why I am concerned that much of the rhetoric we are 

hearing from the Republican side of the committee is a repeat of 

what happened the last time the Republicans took control of Congress. In 1995, the newly elected Republican majority conducted an 

all-out assault on regulations. They told alarming anecdotes about 

the impact of senseless government regulation. We were told that 

the Consumer Product Safety Commission required holes in the 

bottoms of buckets and that OSHA killed the tooth fairy by preventing parents from taking home their children’s baby teeth from 

the dentist’s office. These stories share two traits. They sounded 

compelling and they were simply not true. Now we are hearing repeated claims that regulations destroy jobs and stymie economic 

growth, and this is another myth. 

Consider the collapse of the financial markets in 2008. This meltdown on Wall Street threw our economy into the deepest recession 

since the 1930s. Millions of Americans lost their jobs and it cost 

U.S. taxpayers billions of dollars to bail out AIG and Wall Street 

banks. The cause wasn’t regulation. It was the absence of regulation. As Alan Greenspan testified before me and other members of 

the Oversight Committee, he said he made a mistake in promoting 

deregulation. He said he had found a flaw looking back over the 

situation in his free market ideology and was in a state of shock 

and disbelief. 

The Deepwater Horizon oil spill, which Chairman Stupak held 

hearings on in this subcommittee as well as on food safety as well 

as on automobile problems, that Deepwater Horizon oil spill 

wreaked havoc on the economies of the Gulf States. It was caused 

by too little oversight and regulation, not too much. 

Members who were on this committee last Congress may remember our very first hearing. We brought in the CEOs from our Nation’s leading manufacturing and energy companies to testify. What 

they told us is that they needed Congress to pass comprehensive 

13 

energy legislation so they could plan and invest for the future. Jim 

Rogers, CEO of Duke Energy, told us: ‘‘It is critical we know the 

rules of the road of climate change as soon as possible to make sure 

that we are making the right investments. Regulatory uncertainty 

is postponing investments and is postponing the creation of jobs 

from apprentices to engineers to Ph.Ds.’’ Jeffrey Immelt, chairman 

and CEO of General Electric, who last week was asked by President Obama to lead the Council on Jobs and Competitiveness, told 

us: ‘‘Certainty in the investment world is critical to success and 

what we lack today is certainty. I am a capitalist pure, plain and 

simple, and I just want the system we have today not to be untenable over the long term insofar as the science is compelling on global warming.’’ What these CEOs were telling us is that they needed 

more energy and carbon regulation, not less, so they would know 

the rules and plan and invest for the future. 

Subcommittee Ranking Member DeGette and I circulated a 

memorandum to our Democratic members that provides more detail about these examples and others, and Mr. Chairman, I ask 

unanimous consent that this memorandum be included in the 

record to today’s hearing. 

Mr. STEARNS. Granted. 

Mr. WAXMAN. Thank you. 

As we commence this new Congress, let us put aside the false 

and hyperbolic claims about regulations killing jobs. By all means, 

let us prune unnecessary regulations where we find them but let 

us also not hesitate to regulate where needed to protect our economy and our children’s future. There is no doubt that anybody 

would understand if you don’t regulate to protect the environment, 

it is going to be at a disadvantage for a company to put in pollution 

control if their competitors don’t do the same thing. Regulations 

can make the market work better for everybody while at the same 

time protecting the public interest. Yield back my time. 

[The prepared statement of Mr. Waxman follows:] 

PREPARED STATEMENT OF HON. HENRY A. WAXMAN

Mr. Chairman, I am a strong opponent of unnecessary regulations. In my many 

years of service on the Committee on Oversight and Government Reform, I led numerous oversight and legislative efforts to promote government efficiency and eradicate wasteful spending and programs. 

In the 1990s, I also served on the Advisory Committee for the Corrections Calendar, an initiative established by Speaker Newt Gingrich to identify outdated and 

pointless regulation so it could be quickly eliminated. 

I believe eliminating unnecessary government regulation is integral to ensuring 

effective government. 

But this is an area where it is easy to paint with too broad a brush. We need 

to remember that federal regulations also play a vital role in growing our economy 

and protecting our health and environment. 

That is why I am concerned that much of the rhetoric we are hearing from the 

Republican side of the Committee is a repeat of what happened the last time the 

Republicans took control of Congress. 

In 1995, the newly elected Republican majority conducted an all-out assault on 

regulations. They told alarming anecdotes about the impact of senseless government 

regulation. We were told that the Consumer Product Safety Commission required 

holes in the bottom of buckets and that OSHA killed the tooth fairy by preventing 

parents from taking home their children’s baby teeth from the dentist. 

These stories shared two major traits: they sounded compelling, but they were 

simply not true. 

14 

Now we are hearing repeated claims that regulations destroy jobs and stymie economic growth. This is another myth. 

Consider the collapse of the financial markets in 2008. This meltdown on Wall 

Street threw our economy into the deepest recession since the Great Depression. 

Millions of Americans lost their jobs and it cost U.S. taxpayers billions of dollars 

to bail out AIG and Wall Street banks. 

The cause wasn’t regulation; it was the absence of regulation. As Alan Greenspan 

testified before me and other members of the Oversight Committee, he had ‘‘made 

a mistake’’ in promoting deregulation. He said he had ‘‘found a flaw’’ in his freemarket ideology and was in ‘‘a state of shocked disbelief.’’ 

The Deepwater Horizon oil spill wreaked havoc on the economies of Gulf states. 

It was caused by too little oversight and regulation—not too much. 

Members who were on this committee last Congress may remember our first hearing. Like today’s hearing, our focus two years ago was on how to build a strong economic future for our country. We invited nine CEOs from our nation’s leading manufacturing and energy companies to testify. 

And what they told us was that they needed Congress to pass comprehensive energy legislation so they could plan and invest for the future. The told us that sensible, market-based regulation of carbon emissions would spur billions of dollars in 

new investments. 

Here is what Jim Rogers, the CEO of Duke Energy, told us: ‘‘It is critical we know 

the rules of the road of climate change as soon as possible to make sure that we 

are making the right investments. Regulatory uncertainty is postponing investments 

and [i]t’s postponing the creation of jobs from apprentices to engineers to Ph.Ds.’’ 

Jeffrey Immelt, Chairman and CEO of General Electric, was asked last week to 

lead the President’s Council on Jobs and Competitiveness. He told us the same 

thing: ‘‘Certainty in the investment world is critical to success. And what we lack 

today is certainty. I am a capitalist, pure, plain, and simple. And I just think the 

system we have today is untenable over the long term insofar as the science is so 

compelling on global warming.’’ 

What these CEOS were telling us is that they needed more energy and carbon 

regulation—not less—so they would know the rules and plan and invest for the future. 

They understood what Alan Greenspan forgot: regulation is often needed to promote jobs and economic prosperity. 

Subcommittee Ranking Member DeGette and I circulated a memorandum to our 

Democratic members that provides more detail about these examples and others. I 

ask unanimous consent that this memorandum be included in the record of today’s 

hearing. 

As we commence this new Congress, let’s put aside the false and hyperbolic claims 

about regulations killing jobs. By all means, let’s prune unnecessary regulations 

where we find them. But let’s also not hesitate to regulate where needed to protect 

our economy and children’s future. 

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Mr. STEARNS. I thank the distinguished member. 

I ask unanimous consent that the written opening statements of 

all members who so desire be introduced into the record. Without 

objection, the documents will be entered into the record. 

[Additional statements submitted for the record follow:] 

PREPARED STATEMENT OF HON. JOHN D. DINGELL

Thank you, Mr. Chairman. 

I thank you for holding today’s hearing, and look forward to hearing from Administrator Sunstein. 

Today’s hearing topic is an important one. Executive departments and agencies 

serve a critical role in our governing process, promulgating rules and regulations as 

required in the laws written here by Members of Congress. 

But our responsibilities as Members of Congress do not end when the President 

places his signature on a piece of legislation. I have long held that it is our responsibility as Members of Congress to ensure that the regulations and rules laid forward 

as a result of legislation allow for public comment, do not adversely impact our state 

and local governments and business community, provide a benefit to economic 

growth—not hinder it—and above all protect the public good. 

I commend President Obama for calling on the departments and agencies to reform their regulatory process to increase transparency, efficiency, coordination and 

public participation, as well as to ensure that regulations and rules protect public 

health, welfare, safety and our environment, while also allowing for economic 

growth and job creation. 

I also commend the President for taking into consideration the impact regulations 

have on our small businesses, who serve a vital role as engines of job creation in 

our communities. Allowing for regulatory flexibility for small employers, assures 

that small employers can comply with the letter of the law without endangering 

their business. 

Of some concern to me, is the President’s directive for a government-wide review 

of regulations and rules deemed to be outdated or ineffective. I agree that we must 

constantly review our programs to determine whether they are working effectively 

or efficiently and to determine where gaps, if any, exist, and I believe that this provision will further that goal. 

However, we must ensure that the public participation mandate is heeded to 

when departments or agencies determine certain rules or regulations must be withdrawn or repealed. 

George Santayana said something which I thought was very interesting. He said, 

‘‘Those who cannot remember the past are condemned to repeat it.′′ 

We have seen what happens when careful consideration is not given to deregulation, most recently in the unholy alliance between Wall Street and Bush-era policies 

that resulted in the 2008 financial crisis. 

Moving forward we must strive to ensure that there is a balance between our responsibilities as the federal government to regulate effectively, while also protecting 

the good of the public. 

Thank you, and I look forward to hearing from Administrator Sunstein. 

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Mr. STEARNS. Also, I ask unanimous consent that the contents of 

the document binder be introduced into the record. Without objection, the documents will be entered. 

[The information appears at the conclusion of the hearing.] 

Mr. STEARNS. Now, we get to our witness, and let me welcome 

the Administrator, Cass Sunstein, to our witness stand. I thought 

before we move forward I would give you a little brief background. 

I know oftentimes we have the witnesses and we don’t know a lot 

about them, but I thought it would be very illustrative for all of 

us to hear a brief summary of his resume ́. Before he became Administrator, Mr. Sunstein was the Felix Frankfurter Professor of 

Law at Harvard Law School. He graduated in 1975 from Harvard 

College and in 1978 from Harvard Law School. After graduation, 

he clerked for Justice Benjamin Kaplan of the Massachusetts Supreme Judicial Court and Justice Thurgood Marshall of the United 

States Supreme Court, and then he worked as an attorney advisor 

in the Office of Legal Counsel of the U.S. Department of Justice. 

He was a faculty member at the University of Chicago Law School 

from 1991 to 2008. A specialist in administrative law, regulatory 

policy and behavioral economics, he is the author of many articles 

and books. And so Mr. Sunstein, I welcome you to the subcommittee’s hearing. 

As you know, the testimony that you are about to give is subject 

to Title 18, section 1001 of the United States Code. When holding 

an investigative hearing, this committee has the practice of taking 

testimony under oath. Do you have any objection to testifying 

under oath? 

Mr. SUNSTEIN. None at all, Mr. Chairman. 

Mr. STEARNS. All right. The Chair then advises you that under 

the rules of the House and the rules of the committee, you are entitled to be advised by counsel. Do you desire to be advised by counsel during your testimony today? 

Mr. SUNSTEIN. I do not. 

Mr. STEARNS. In that case, if you would please rise and raise 

your right hand? 

[Witness sworn.] 

Mr. STEARNS. We welcome your 5-minute opening statement. 

TESTIMONY OF CASS R. SUNSTEIN, ADMINISTRATOR, OFFICE 

OF INFORMATION AND REGULATORY AFFAIRS 

Mr. SUNSTEIN. Thank you, Mr. Chairman. Thank you, other Mr. 

Chairman. There are several other Mr. Chairmen. Thanks to all of 

you. I am grateful and greatly honored to have the opportunity to 

appear today to discuss our new Executive order—it has a new 

number, 13563, on improving regulation and regulatory review— 

and also our new Memorandum from the President on small business and job creation, and I will have a few words to say about that 

memorandum in a moment. 

The President has made clear that these documents are meant 

to create foundations for a regulatory system that protects public 

health and welfare while promoting economic growth, innovation— 

a key word in his State of the Union address—competitiveness and 

job creation as several of you have just emphasized. The Executive 

29 

order and the Presidential Memorandum require a number of concrete steps to achieve that overriding goal. 

By way of background, let me briefly note that since 1993, the 

process of regulatory review has operated under Executive order 

under 12866 from President Clinton, which builds very directly on 

an Executive order issued by President Reagan in 1981 called Executive Order 12291. The Clinton Executive order sets out a number of principles and requirements that were in operation both 

under President Clinton and President Bush. Among other things, 

it calls for careful consideration of costs and benefits, for tailoring 

regulations to impose the least burden on society, and for selecting 

the approach that maximizes net benefits. It also calls for a process 

of interagency review coordinated by the Office of Information and 

Regulatory Affairs. That process has been in place for nearly 30 

years. 

The new Executive Order 13563 has six provisions that are designed to supplement and improve the process. First, it reaffirms 

the basic principles and structures of Executive Order 12866. In 

doing so, it emphasizes a point to which several of you have just 

pointed: the need for predictability and certainty. That is right out 

front in the new Executive order. It also emphasizes the importance of using the ‘‘least burdensome tools for achieving regulatory 

ends.’’ That is a quotation. It emphasizes finally what hadn’t been 

in his predecessor Executive orders, the need to ‘‘measure and seek 

to improve the actual results of regulatory requirements.’’ That is 

the beginning. 

Second, the new Executive order calls for public participation. It 

tries to bring rulemaking into the 21st century by requiring use of 

the Internet to promote an open exchange of ideas and perspectives. It also directs agencies to act before they commence rulemaking to seek the views who are likely to be affected, including 

those would be burdened by regulatory requirements. Public participation is front and center. 

Third, and a point that has received considerable attention over 

the last several years, indeed decades, the new Executive order 

asks agencies to try to harmonize, simplify, and coordinate rules. 

It emphasizes that some sectors and industries face inconsistent, 

overlapping and redundant requirements. To reduce burdens and 

costs and to promote simplicity, it calls for greater coordination 

across the Federal Government. That is designed explicitly to promote innovation. 

Fourth, the new Executive order asks agencies to consider flexible approaches that maintain freedom of choice for the public. Approaches that are choice preserving include, for example, provision 

of information rather than foreclosure of decisions through mandates and commands. This is more than a plea, a direction for flexibility. 

Fifth, as noted, Executive Order 13563 calls for scientific integrity. It directs each agency to ensure the objectivity of information 

on which it relies. 

Sixth and finally, what has been most publicized in the week 

since the Executive order was signed, it calls for retrospective analysis of existing rules. It is concerned about rules that may be outmoded, ineffective, or excessively burdensome. It directs agencies to 

30 

produce preliminary plans for periodic review of significant rules 

and to submit them to the Office of Information and Regulatory Affairs within 120 days, a pretty tight time frame. In this way, the 

Executive order is aimed at the stock of existing requirements as 

well as the flow of new requirements. Both are covered by the new 

Executive order. 

The Presidential Memorandum on Small Business and Job Creation emphasizes the essential role that small businesses play in 

the American economy. With job creation in the title and economic 

growth in the body of the memorandum, the President has insisted 

as he wrote in the Wall Street Journal on federal agencies doing 

more to account for and reduce the burdens regulations may place 

on small businesses. To do that, he has emphasized of the Regulatory Flexibility Act and directed agencies specifically to explain 

themselves whenever in proposed rules or final rules they fail to 

provide flexibilities to small businesses in the form, for example, of 

partial or total exemptions, simplified reporting requirements or 

delayed compliance dates. 

Taken as a whole, Executive Order 13563 and the new Memorandum on Small Business and Job Creation create strong foundations for improving regulation and regulatory review. I am looking 

forward to answering your questions. 

[The prepared statement of Mr. Sunstein follows:] 

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Mr. STEARNS. I thank the witness. 

Let me, before we start, perhaps set the tone here. You saw that 

Mr. Sunstein, we sort of changed the rules here to expedite things, 

and it is important, I think, to stress that the members’ questions 

that they are going to ask get a direct answer from you. All of us 

have been in hearings where we just have 5 minutes and it is very 

difficult to get an answer, and I think that the questions that are 

going to be asked of you reflect that we are willing to do away with 

our opening statements so we can provide more time for testimony 

and questioning. Therefore, I just ask to make it as productive as 

possible if when you answer the questions you can answer yes or 

no. Some members will ask you these type of questions, and I know 

it is going to be difficult but we ask for your patience and forbearance that you would answer yes or no to these questions, and I 

thank you in advance for doing that. And with that in mind, let 

me be the first one to ask you questions. 

The Obama Executive order was issued but the comments from 

organizations representing all the stakeholders and the job creators 

in this country, a lot are concerned with the Obama order: that 

there were a lot of independent regulatory agencies not part of the 

OIRA review. So my question for you, Mr. Sunstein, is, are the regulatory actions of the independent regulatory agencies such as the 

SEC, the FCC, the Federal Trade Commission, FERC and others, 

subject to OIRA regulatory review. Are they, yes or no? 

Mr. SUNSTEIN. No. 

Mr. STEARNS. I am also concerned about what appears to be a 

sort of amorphous type of standards that was articulated by the 

President. This is what is quoted in the Executive order: ‘‘Where 

appropriate and permitted by law, each agency may consider and 

discuss values that are difficult or impossible to quantify including 

equity, human dignity, fairness, and distributive impacts.’’ Now, 

these are all subjective terms so you are going to make a decision 

on regulatory reform based upon human dignity, fairness, and distributive impacts, which I assume means distribution of income. Is 

my interpretation correct when you say distributive impacts, yes or 

no? Does that mean distribution of income? 

Mr. SUNSTEIN. That wasn’t our intent. 

Mr. STEARNS. You are saying no. OK. But these standards, I 

mean, just looking at it, any rational cost-benefit analysis is going 

to be tossed out the window instead of saying does this economically make sense, what you can quantify. These agencies are going 

to be using these amorphous methods to determine the economic 

value of a regulation, and they are subjective. As you know, we are 

all inherently involved with either ideology or political correctness, 

so I guess the question is, won’t these standards make it very difficult for any rational cost-benefit analysis to be implemented? 

Mr. SUNSTEIN. That would be a no. 

Mr. STEARNS. OK. By April 2010, the Administration had issued 

190 economically significant regulations or regulations having an 

economic impact of $100 million or more. Is that correct? 

Mr. SUNSTEIN. I want to double-check that number. 

Mr. STEARNS. Sure. I appreciate that. And by December, that 

number was up to 224. 

Mr. SUNSTEIN. I want to double-check that number as well. 

35 

Mr. STEARNS. So the number of regulations the Administration 

is issuing, in our humble opinion, is rising, not falling. That is just 

a comment. 

Mr. SUNSTEIN. No, that is actually not true. The number of regulations issued in the last 2 years is about the same or slightly 

lower than the last 2 years of the—— 

Mr. STEARNS. OK. And if you could just follow up with the information to confirm what I asked you earlier, that would be helpful. 

Mr. SUNSTEIN. Absolutely. That would be yes. 

Mr. STEARNS. OK. Good for you. So in our opinion, these numbers represent a new amount of regulations including regulations 

into, I think, new areas such as the FCC regulation of the Internet 

for the first time. Will these regulations that have been issued in 

the last 2 years be subject to review under the President’s new 

standard? 

Mr. SUNSTEIN. Yes. 

Mr. STEARNS. OK. And we expect to see more regulations issued 

by Health and Human Service to comply with the new health care 

law, new financial regulations to comply with the Dodd-Frank law, 

and new regulations from the EPA. Now, will these regulations be 

subject to review by OIRA? 

Mr. SUNSTEIN. I believe you referred to non-independent agencies, and thus the answer is absolutely yes. 

Mr. STEARNS. What we have seen from the Administration in the 

last 2 years is, in our opinion not a full exercise in responsibility 

to review these regulations. Are you aware that in the first 2 years 

of the Bush Administration, the agency issued 19 return letters to 

agencies, letters rejecting agencies’ regulations while this Administration has issued zero return letters in the same period? 

Mr. SUNSTEIN. I would say yes, I am aware of that. Would you 

like an elaboration? 

Mr. STEARNS. We will keep going here. I think when the Democrats have a chance, they are going to give you a chance for elaboration. 

Given that we have seen agencies respond to the Executive order 

by stating that they don’t need to make any changes, I think this 

is what really concerns me and seems not to change anything in 

terms of how much control your office will really have. I think as 

a Congress we reach out to bureaucracies and lots of times we see 

these bureaucracies unable to act. Back in 2003, in your book Risk 

and Reason, you wrote, ‘‘All in all, President Clinton’s Executive orders did not seem to have much impact. OIRA was largely passive 

and toothless, serving a coordinating function without trying to 

steer regulation in any particular direction.’’ That is your quote in 

your book. The President’s new policy reaffirms this very Executive 

order you have referred to as toothless and not performing, in our 

opinion. Would you think what you said in your book is applicable 

to what happened under the Obama Administration? 

Mr. SUNSTEIN. Absolutely not. 

Mr. STEARNS. OK. And let me just ask my last question here. Do 

you see that there in tab #3 in the binder before you is the President’s Memorandum of January 30, 2009, on regulatory review? In 

it, he directs the director of OMB to produce within 100 days a set 

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latory review. The question I have for you is, were the set of recommendations produced within 100 days of the President’s directive? 

Mr. SUNSTEIN. Yes. 

Mr. STEARNS. OK. That completes my time, and Ms. DeGette. 

Mr. SUNSTEIN. Thank you for enabling me to be brief. 

Mr. STEARNS. That completes my questions. Ms. DeGette. 

Ms. DEGETTE. Thank you, Mr. Chairman. Opening statement 

might have been a better description. Actually on the Minority 

side, we would like to hear some answers to some of these questions, so Mr. Sunstein, I have a series of questions I would like to 

ask you. 

The first one is, OIRA was created in 1980 to oversee certain 

agencies, correct? 

Mr. SUNSTEIN. That is correct. 

Ms. DEGETTE. And—— 

Mr. SUNSTEIN. By the Paperwork Reduction Act. 

Ms. DEGETTE. Yes, and it was created by Congress. Is that right? 

Mr. SUNSTEIN. That is correct. 

Ms. DEGETTE. So President Obama and the Administration could 

not in and of themselves change the jurisdiction of OIRA—only 

Congress could do that, right? 

Mr. SUNSTEIN. That is correct. 

Ms. DEGETTE. And all of these agencies that Mr. Stearns mentioned that are exempt from the President’s Executive order are exempt from it because OIRA does not have congressional jurisdiction 

to oversee those agencies, correct? 

Mr. SUNSTEIN. The basic answer is yes, but if I could elaborate 

slightly, if you would permit? 

Ms. DEGETTE. Sure. 

Mr. SUNSTEIN. Under the Paperwork Reduction Act, OIRA does 

oversee the independent agencies’ information-gathering requests, 

and actually we have taken strong steps in the last months to try 

to reduce paperwork burdens on the American people, including 

from the independent agencies. 

With respect to the applicability of the Executive order, what 

President Obama has done is followed the practice of President 

Reagan, who initiated the application of the Executive order to the 

executive agencies because of legal and political concerns about 

overreaching presidential authority. Both President Bushes went 

along with President Reagan on that issue. 

Ms. DEGETTE. OK. Thank you. 

Now, I want to talk for a few minutes about an issue that I think 

we are going to be hearing a lot about in this subcommittee, and 

that is the EPA regulations. The first target that I have heard 

about is large industrial boilers and the EPA proposed regulation 

to limit the emissions of toxic air pollution like mercury, lead, and 

dioxin. Are you familiar with that proposed rule, Mr. Sunstein? 

Mr. SUNSTEIN. Yes. 

Ms. DEGETTE. And are you aware that EPA’s proposed rule 

would potentially save thousands of lives per year and protect children from neurotoxins because the benefits are projected to be 

about 14 times greater than the cost? 

37 

Mr. SUNSTEIN. I don’t have the exact number before me but I am 

aware of numbers in that vicinity in the proposed rule. 

Ms. DEGETTE. Did the Administration engage in an open regulatory process in working on promulgation of that rule? 

Mr. SUNSTEIN. Absolutely, and it continues. 

Ms. DEGETTE. Yes. In fact, the chairman of this committee has 

said that there were flawed regulatory tactics, so I want to talk for 

a minute about the EPA process that you just referred to. After 

proposing the rule last April, EPA received over 4,800 comments on 

the proposal from stakeholders including a large amount of data 

from industry on the capabilities and costs of various pollution-control options. Are you aware of that data that the EPA received? 

Mr. SUNSTEIN. Yes, I am aware of the sheer volume of comments. 

Ms. DEGETTE. OK. And are you aware, sir, that in September, 

Administrator Jackson of the EPA sent a letter to Congress indicating that the EPA was going to give more time to look at this 

because there were so many comments that were being received? 

Mr. SUNSTEIN. Yes. 

Ms. DEGETTE. And are you aware that on September 7th last 

year, EPA asked the court for an extension of time to continue the 

process but the extension given by the court was only very short? 

Mr. SUNSTEIN. Yes, 30 days. 

Ms. DEGETTE. Thirty days. And are you aware that the EPA has 

suggested that if all the comments cannot be addressed in the final 

rule, the parties may petition the EPA to reconsider the rule and 

the EPA has the authority to stay the rule pending the reconsideration? Is that correct? 

Mr. SUNSTEIN. I remember something very close to that, and that 

may be precisely what the EPA said. 

Ms. DEGETTE. OK. Now, do you think that the EPA’s efforts to 

respond to the comments on the proposed boiler MACT are in line 

with this Executive order that is the subject of this hearing today? 

Mr. SUNSTEIN. I would say very much that the EPA’s careful consideration of public comments is in line with section 2 of the Executive order. 

Ms. DEGETTE. Section 2. OK. Do you think that the EPA’s request for an extension was in any way an admission of failure of 

the regulatory process? 

Mr. SUNSTEIN. No. 

Ms. DEGETTE. And can you explain why you believe that? 

Mr. SUNSTEIN. Well, it is perfectly legitimate as some of the 

opening comments have suggested to try to take account of public 

concerns and comments to respond to stakeholder data or stakeholder perspectives and sometimes that takes a long time. There is 

a tradeoff between doing things and doing things right. 

Ms. DEGETTE. And finally, do you think that criticizing the 

EPA’s efforts on this rule is consistent with calls for greater process and transparency? 

Mr. SUNSTEIN. What I would say is that greater transparency is 

exceedingly important and the EPA’s effort to take account of public comment is admirable. 

Ms. DEGETTE. Thank you. I yield back. 

Mr. STEARNS. I thank the gentlelady. 

38 

The chairman of the full committee, Mr. Upton from Michigan, 

is recognized for 5 minutes. 

Mr. UPTON. Well, thank you, Mr. Chairman, and again, I want 

to compliment you on the hearing. As I learned when I was chairman of the Oversight and Investigations Subcommittee, we are to 

identify problems and then come back with legislation to fix them. 

I think that what is happening is that we are finding a number of 

agencies that are exempt from OIRA’s process, and this is something we ought to look into and we ought to come back with bipartisan legislation to fix that, give this Administration and any future Administration the ability to oversee all the regulations that 

are there. No agency should be exempt. 

I want to compliment the President on his Wall Street Journal 

op-ed from this last week. I think many of us here would agree 

with some of the comments that he made when he wrote that we 

have to have the proper balance. Sometimes these rules have gotten out of balance, placing unreasonable burdens on business, 

which has had a chilling effect on growth and jobs. We need to promote economic growth. Sometimes regulations are not worth the 

cost, which is just plain dumb. I think a number of us welcomed 

that piece. 

But I want to go back to the boiler MACT regulations here for 

a moment. EPA, as you know, estimated that the new rules would 

impose new capital costs of $12.6 billion, annual costs of over $3 

billion. A study by the Council of Industrial Boiler Owners concluded that the true economic costs would in fact be $113.5 billion. 

The rules would place some 337,000 or more jobs at risk. So as you 

know, on January 21st, the court rejected EPA’s request for a 15- 

month extension to finalize the boiler MACT rules and directed 

EPA to issue final rules by February 21st. My first question is, 

when OMB cleared the proposed rules last year, did OMB have 

concerns about the economic impacts given the state of the economy, particularly related to the numbers that I just cited? 

Mr. SUNSTEIN. Any rule that imposes significant cost, we have 

significant concerns about. 

Mr. UPTON. Is OMB now working with EPA to make changes to 

bring down the costs and ensure that the final rules will not create 

those risks? 

Mr. SUNSTEIN. The EPA said in court filings that the rule would 

look significantly different, the final, and we are working closely 

with EPA to try to put it in the best form possible, and that work 

will be undertaken in line with the President’s Executive order, 

which calls for careful attention to cost. 

Mr. UPTON. So knowing all the comments that have been made, 

all the work that has been done, particularly over this last year, 

the admonition in essence by EPA in December that they need 15 

more months: do you believe that you can do all that work in the 

next 3 weeks? 

Mr. SUNSTEIN. It would be premature to say exactly how much 

can be achieved in the next 3 weeks. 

Mr. UPTON. I used to work at OMB so I know how many people 

are there. 

Mr. SUNSTEIN. I know you did. You know how hard people work. 

What I would say is that engagement with affected stakeholders, 

39 

with you, with members of your staff is most welcome in the period 

we have, that EPA, as the earlier line of questioning suggests, is 

completely alert to the concerns that have been expressed about 

cost. The Administrator has been clear on that. And we are going 

to do the best we can to get it right and to keep the costs down, 

to take account of objections and perspectives in the time that remains, and look forward to working with you on that. 

Mr. UPTON. Knowing that you have got 3 weeks to go, would 

OMB welcome a congressional delay to give the agency more time 

to do its work on the rule that EPA in essence said will take it 15 

more months? It is just hard to believe that EPA says that it needs 

15 more months, the court says no, you are going to do it in 30 

days, and now you say that we are going to get it done in 3 weeks 

even though your agency initially said it would take 15 months? 

Mr. SUNSTEIN. Our focus, as your question suggests, is on implementing the law, taking account of costs and concerns, and complying with the court order. That is what we are focusing on. With 

respect to congressional responses, that is not exactly my lane. We 

are going to focus hard on implementation and try to get it right. 

Mr. UPTON. Last question: would you like to have more time if 

given an opportunity? 

Mr. SUNSTEIN. We agreed with the EPA that to get more time 

of the length that the EPA sought was a very reasonable request. 

So the EPA’s request to the court, we supported. 

Mr. UPTON. Yield back. 

Mr. STEARNS. Thank you, distinguished Chairman. 

I recognize Ms. DeGette. 

Ms. DEGETTE. Mr. Waxman. 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

Mr. Sunstein, I appreciate your answers. The question that was 

just being pursued was over the boilers under the Clean Air Act. 

Now, let us not forget the purpose of it. The purpose of the regulation is not to cost a lot of money to business which might lead them 

to reduce jobs. The purpose is to reduce mercury and lead damage 

which when it affects our children can lead to lack of brain development. Dioxin causes cancer. These industrial boilers are the second largest source of mercury emissions in our country. So when 

the EPA has proposed a rule, it has to be reviewed in terms of the 

costs and the benefits, and at the same time under your new procedures you are trying to fine-tube it to be sure it is the least costly 

way for business to comply. Isn’t that correct? 

Mr. SUNSTEIN. Exactly. 

Mr. WAXMAN. Now, I know that no one here would support duplicative and pointless regulations, but I worry a lot of what we are 

going to hear the rest of this hearing are not those regulations, 

they are going to single out important regulations. Some Republicans are even saying that we shouldn’t regulate the most abusive 

and risky Wall Street practices, even though those practices ended 

up nearly driving our economy over a cliff. Regulations don’t just 

prevent harm, they can also help our economy. And the boiler one 

was to prevent harm. 

But there are some regulations that really are important for 

business. One example of that is a carbon pollution standard for 

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ty Administration April 2010. I understand that these standards 

improve national security by reducing our dependence on oil. They 

reduce carbon pollution and improve public health. They save consumers a lot of money, far more than manufacturers will spend 

building more efficient cars. I understand that these rules will save 

1.8 billion barrels of oil. Is there any other action by this Administration or its predecessors that is even in this ballpark in terms of 

reducing our oil dependence? 

Mr. SUNSTEIN. Offhand, I don’t think there is an example that 

is as impressive. 

Mr. WAXMAN. So this regulation is to reduce our dependence on 

oil, and in fact, as a result of it, for the first time America’s oil consumption is flat. Right now even though the DOE regularly says 

that our consumption of oil was going to go up, it is not increasing. 

We are projected to use less oil in 2020 than in 2007. So if we are 

concerned about oil exports propping up unsavory governments 

around the world, which is certainly the case, then this rule is very 

good news. 

Mr. Sunstein, I also understand this rule will reduce U.S. greenhouse gas emissions by 960 million metric tons, reducing overall 

greenhouse gas pollution from light-duty vehicles by about 20 percent by 2030. How does this compare with other actions this or 

other Administrations have taken to tackle the climate issue? 

Mr. SUNSTEIN. I think this is the prize winner on that count as 

well. 

Mr. WAXMAN. So these benefits don’t cost the consumer a thing. 

In fact, they save consumers money. The majority of consumers 

will pay less overall for running their cars. On average, consumers 

will save $3,000 over the life of the vehicle. You are a nationally 

acclaimed expert on cost-benefit analysis. Are these estimates 

solid? Will people really be better off with these regulations in 

place? 

Mr. SUNSTEIN. We don’t have any serious question that this rule 

survives cost-benefit balancing. 

Mr. WAXMAN. My understanding is that these cost savings are based on assumed gas prices ranging from $2.61 per gallon in 2012 

to $3.60 per gallon in 2030, and we are seeing gas prices go up. 

In fact, if they go up, it will produce even greater net benefits of 

roughly $140 to $190 billion. 

Now, we talked about the benefits to our national security and 

the environment but the rule also benefits the auto industry because it will harmonize State and federal standards across the 

country, and that is why the industry strongly supported these regulations. It provided certainty for them, clear paths for innovation, 

and it will make their job better as they try to innovate. EPA’s contribution to these standards produced benefits 30 percent higher if 

we just had the NHTSA portion in place. Any effort to remove the 

EPA standard or its statutory authority would severely undermine 

the benefits of this rule. This is just one example. Overall, the benefits of the Clean Air Act vastly outweigh its costs by a ratio of 32 

to 1. Rather than being a drag on the economy, these critical regulations improve our lives just as they are intended to do, and that 

is the whole point of having regulations in the first place. 

Thank you very much, Mr. Chairman. 

41 

Mr. STEARNS. I thank the gentleman. 

The gentleman from Texas is recognized for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. Timing is impeccable. I 

am supposed to be doing a live radio interview right now; we 

planned it very carefully that I can’t do that. 

There has been an explosion of regulation and regulations issued 

in the first years of the Obama Administration. Quite frankly, I 

don’t see that your organization has done anything to slow that 

down. I don’t see that you have done anything to actually do what 

the existing Executive order says. What gives us the confidence to 

think that this new Executive order is going to be any different? 

Does this Executive order require or will your office require agencies to determine the net job gain or loss of past, current, or new 

regulations? 

Mr. SUNSTEIN. OK. If I may, can I discuss the idea of explosion? 

Actually—— 

Mr. BARTON. Well, discuss it very quickly because I have only got 

3 minutes. 

Mr. SUNSTEIN. I will be very fast. The number of regulations 

issued in the last 2 years is approximately the same as the number 

of regulations issued in the last 2 years of the Bush Administration. The total costs of regulation in the last fiscal year are lower 

than the total costs of regulations in the executive agencies in fiscal year 2007. 

Mr. BARTON. Just the regulations issued under the new health 

care law are in the thousands. 

Mr. SUNSTEIN. The numbers that have been issued in the last 

months are not in the thousands, so in terms of finalized economically significant rules, I don’t think the data supports the claim. 

Mr. BARTON. But what is the answer to the question? Is this new 

Executive order going to require a determination by your group, 

your agency of the net job gain or loss of past, current, and new 

regulations? 

Mr. SUNSTEIN. We will be focusing very much on job loss as a 

result of regulations. The Executive order—— 

Mr. BARTON. So the answer is yes? 

Mr. SUNSTEIN. Well, there are some technical reasons—that—— 

Mr. BARTON. So the answer is no? 

Mr. SUNSTEIN. Well, I am afraid that the answer to this one 

uniquely thus far is neither yes or no. 

Mr. BARTON. Well, that is a very evasive answer, and the President is going to give you an A plus for evading a straight question. 

Mr. SUNSTEIN. Well, if I can explain—— 

Mr. BARTON. Let me go on because I have only got 2 minutes and 

39 seconds. 

You are aware, I am sure you are conversant with the 

endangerment finding that was issued the first 90 days by the EPA 

Administrator? 

Mr. SUNSTEIN. I am aware of it. 

Mr. BARTON. Are you aware of any cost-benefit analysis that 

went into that endangerment finding? 

Mr. SUNSTEIN. A scientific finding is not a regulatory action 

so—— 

Mr. BARTON. So the answer is, there was none? 

42 

Mr. SUNSTEIN. There couldn’t be at that time. The regulatory action that followed the scientific finding was full of cost-benefit analysis. 

Mr. BARTON. Do you agree that that endangerment finding if actually implemented would cost millions of jobs to the U.S. economy 

and hundreds of billions of dollars? 

Mr. SUNSTEIN. The endangerment finding by itself costs no 

money and no jobs. It is a scientific finding. 

Mr. BARTON. That is not my question. 

Mr. SUNSTEIN. If implemented, meaning if followed by regulatory 

action? 

Mr. BARTON. Well, if implemented, if actually put into practice. 

Mr. SUNSTEIN. Well—— 

Mr. BARTON. Every independent analysis has said it would cost 

millions of U.S. jobs and hundreds of billions of dollars—— 

Mr. SUNSTEIN. What I will tell you is—— 

Mr. BARTON [continuing]. Per year. 

Mr. SUNSTEIN [continuing]. what we and the EPA are determined to do and with the new emphasis in the Executive order 

which I am grateful for your enthusiasm for is to try to minimize 

burdens and—— 

Mr. BARTON. I have 1 minute and 13 seconds. In Monday’s Wall 

Street Journal, an EPA spokesman was quoted as saying that 

President Obama’s new Executive order that you are here to testify 

on will not affect the EPA at all. Do you agree or disagree with the 

attestation of the spokesperson at the EPA? 

Mr. SUNSTEIN. The Executive order will affect all agencies to 

which it applies, including the EPA. 

Mr. BARTON. So you will send a letter to the EPA and inform 

them that they are going to be subject to this order? 

Mr. SUNSTEIN. It is clear on the face of the Executive order that 

the EPA—— 

Mr. BARTON. So the EPA spokesperson just misspoke? 

Mr. SUNSTEIN. I would like to see exactly what the EPA spokesperson said, but it is as clear as day—— 

Mr. BARTON. It is clear as day? 

Mr. SUNSTEIN [continuing]. That the Executive order applies to 

the EPA. 

Mr. BARTON. My last question. Would you support an amendment to the Clean Air Act that would require the EPA to do a true 

cost-benefit analysis of any proposed regulation it proposes to implement under that Act? 

Mr. SUNSTEIN. We are in favor of cost-benefit analysis of any regulatory action, and that is already required by the Executive order. 

Mr. BARTON. So the answer to that is yes? 

Mr. SUNSTEIN. With respect to legislative action, that is not quite 

my lane. We are in the implementation business. So on the general 

idea of cost-benefit analysis for regulatory actions, absolutely. 

Mr. BARTON. Thank you. I yield back. 

Mr. STEARNS. I thank the gentleman. 

The gentleman from Michigan, Mr. Dingell, is recognized for 5 

minutes. 

Mr. DINGELL. Thank you, Mr. Chairman. 

43 

I am interested in the last question just raised. Under the Clean 

Air Act, EPA is required to consider first, the health implications, 

and second, the best and the most economic way of accomplishing 

that purpose. Is that right? 

Mr. SUNSTEIN. It depends on the—— 

Mr. DINGELL. Yes or no. 

Mr. SUNSTEIN. Not quite, no. 

Mr. DINGELL. Oh, yes, quite, because I helped write that law. 

Mr. SUNSTEIN. No. If you need more than a yes or no answer, 

no, that’s not correct. 

Mr. DINGELL. What is wrong with it? 

Mr. SUNSTEIN. Under the National Ambient Air Quality Standards, cost is not relevant. It is only a scientific interpretation. 

Mr. DINGELL. Dearly beloved friend, I said that the first step 

taken is to comply with the law and address the health care questions. The second question that is addressed is to do it in the most 

efficient and economic way. Is that right? 

Mr. SUNSTEIN. I don’t think that is quite right either. 

Mr. DINGELL. I would suggest strongly you go back and take a 

look at it because that is the way we wrote it. 

Now, let me go into some matters here of concern. OIRA is required under the Executive order to submit a preliminary plan to 

review rules and regulations for the purposes of modifying, streamlining, expanding, and repealing. Do you believe that 120 days is 

sufficient time for the agencies to conduct such a review and to prepare an appropriate plan? Yes or no. 

Mr. SUNSTEIN. Yes. 

Mr. DINGELL. All right. Next question. Will these plans be subject to public notice and comment requirements of the Administrative Procedure Act? 

Mr. SUNSTEIN. It is not a rule so no, but we do hope to have a 

high degree of public engagement. 

Mr. DINGELL. Well, the Administrative Procedure Act requires 

these things to be subject to public notice and comment, does it 

not? 

Mr. SUNSTEIN. No, it does not apply to preliminary plans. 

Mr. DINGELL. All right. Now, will the agencies be required to 

have a public notice and comment period for any rules or regulations that are withdrawn or repealed? Yes or no. 

Mr. SUNSTEIN. Yes. 

Mr. DINGELL. Given the intent to reduce federal non-security 

spending in fiscal year 2008 levels, do you believe federal agencies 

will have the funding necessary to complete the required look-back 

of existing rules and regulations, yes or no? 

Mr. SUNSTEIN. Yes. 

Mr. DINGELL. Do you believe that the agencies have the personnel resources necessary to complete the look-back and do the 

other things that they must do? Yes or no. 

Mr. SUNSTEIN. Yes. 

Mr. DINGELL. Do you anticipate that the regulatory reviews, for 

example, by the Department of Health and Human Services will 

prevent the agency from completing the rulemakings required in 

and hinder the general implementation of the Affordable Care Act? 

Yes or no. 

44 

Mr. SUNSTEIN. No. 

Mr. DINGELL. Similarly, will regulatory reviews prevent the Food 

and Drug Administration from completing the rulemakings required in and hinder general implementation of the Food Safety 

Modernization Act passed by the Congress in the last session? Yes 

or no. 

Mr. SUNSTEIN. No. 

Mr. DINGELL. Thank you, Mr. Chairman. I have stayed within 

my time. 

Mr. STEARNS. I thank the gentleman from Michigan. 

Mr. Sullivan is recognized for 5 minutes. We have a vote, and we 

are going to continue on, and then I urge everybody to come back. 

We need just a couple members. So we will adjourn after this vote 

and then come back. We don’t have a series of votes until 3:00, I 

believe, so we should be able to get through the hearing. I recognize Mr. Sullivan. 

Mr. SULLIVAN. Thank you, Mr. Chairman, and thank you, Mr. 

Sunstein, for being here today. 

The EPA responded to the President’s new Executive order last 

week by saying that they were confident it wouldn’t need to alter 

a single current pending rule. EPA’s statement went on to say that 

in fact EPA’s rules consistently yield billions in cost savings that 

make them among the most cost-effective in government. Do you 

agree with the EPA’s statement on this new Executive order review 

rule? 

Mr. SUNSTEIN. The Executive order applies to the EPA. The retrospective analysis it requires is new so the EPA will have to do 

something new, and it welcomes that retrospective analysis, and 

the various provisions of the Executive order emphatically do apply 

to the EPA. 

Mr. SULLIVAN. So it is yes? 

Mr. SUNSTEIN. Well, anything involving greenhouse gases or air 

pollution or water pollution, and what I would want to emphasize 

is the provision calling for integration and harmonization. So sometimes sectors and industries are faced with overlapping and redundant requirements, and EPA I know welcomes the opportunity and 

direction to try to promote greater simplicity, reduce burdens, and 

promote greater certainty, a point which has had a lot of emphasis 

in this hearing. 

Mr. SULLIVAN. Do you believe that all of the pending economically significant rules before the EPA as currently drafted will yield 

taxpayer savings? 

Mr. SUNSTEIN. I would have to look at them all to make a judgment. 

Mr. SULLIVAN. Are you involved in that process, though? 

Mr. SUNSTEIN. We look at them when they come over typically 

to our office so the ones that are in the early stages of development 

where sometimes the EPA won’t even decide to send the rule over 

because it needs to do more work. We don’t typically engage with 

the agency before they have something that they are able to submit 

to us. 

Mr. SULLIVAN. Do you believe that all of the pending rules before 

the EPA as currently drafted will create jobs which we need desperately in this country? 

45 

Mr. SUNSTEIN. It would be—I do not believe that every rule that 

any agency is considering is likely to create jobs. 

Mr. SULLIVAN. So your answer is no? 

Mr. SUNSTEIN. I do not believe that every rule that the EPA is 

considering is likely to create jobs. 

Mr. SULLIVAN. Do you disagree with the EPA then, for example? 

Mr. SUNSTEIN. I am reluctant to disagree with newspaper accounts of spokespeople, so I would need to see the quotation and 

I would need to see what its accuracy is. It is true that a number 

of EPA rules have benefits well in excess of costs. 

Mr. SULLIVAN. And your boss seems to think that too. 

Mr. SUNSTEIN. Seems to think a number of EPA rules have benefits well in excess of cost? 

Mr. SULLIVAN. No, that he is concerned about our economy and 

that some of these regulations might hurt jobs. 

Mr. SUNSTEIN. Oh, we very much—you are exactly right, Congressman. That is our focus. That is the focus of this Executive 

order, to make sure that regulations are helpful to economic 

growth. 

Mr. SULLIVAN. I hope so. 

The President’s new Executive order says that agencies must 

consider equity, human dignity, fairness, and distributive impacts 

in determining cost-benefit of regulations. I have no idea what that 

actually means in bureaucratic language but say for example your 

cost-benefit test imposed $110 billion in hard costs to the economy 

but supposedly result in a $1 trillion increase in human dignity. 

What does this mean, and please explain this to me as I have several companies in my district. Mr. Gardner pointed that out. 

They’re scared to death. They really are. They bring this up all the 

time—town hall meetings, meetings in my office, chemical companies, Oklahoma energy companies, trucking companies. And how 

do I explain all this gobbledy gook and stuff that you talk about? 

I mean, can you break it down on simple terms for me so I can go 

home to Oklahoma and talk about this? 

Mr. SUNSTEIN. I am extremely grateful for that question because 

it is very important, and I understand the concerns to which it 

might give rise. 

Mr. SULLIVAN. There are a lot of concerns. 

Mr. SUNSTEIN. Let me explain if I may. 

Mr. SULLIVAN. It is the most concerning thing to this economy 

and business right now. 

Mr. SUNSTEIN. I think it ought not to be, and let me explain why. 

The sentence right before the one that refers to human dignity says 

‘‘quantify in the most accurate way possible costs and benefits 

using the best available techniques.’’ That is a firmer statement in 

favor of quantification than any American President has made. 

With respect to equity, here is an example. We have a rule that 

has been proposed that involves children being run over—this is an 

immense tragedy—by their own parents because there isn’t visibility, they can’t see behind in the cars, and we had parents begging Congress to have a law that would save hundreds of children 

from being killed in those accidents. This rule, which is directly implementing a statute, it is about equity. It is about children typically. I have a son myself who is not quite 2. The children are typiVerDate Nov 24 2008 12:27 Apr 25, 2011 Jkt 037690 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-1 012611\112-1 CHRIS
46 

cally around that age just learning to walk and getting hit. That 

is about 45 percent of those who are hurt in those accidents. That 

is equity. That plays a role. 

With respect to human dignity, we do not mean this as an allpurpose qualifier of cost-benefit analysis, which is the foundation 

of the Executive order. We do mean it as a recognition that if you 

have a regulation or a law that is helping people who are wheelchair-bound—often they are veterans, by the way—to have access 

to bathrooms, there is a dignitary concern there. It is about human 

dignity, not just about—— 

Mr. SULLIVAN. I understand that, but someone keeping their job 

is dignity too. 

Mr. SUNSTEIN. Absolutely, and that is why—— 

Mr. SULLIVAN. It is a dignified thing to do. 

Mr. SUNSTEIN. That is why job creation is in the first sentence 

of the Executive order. 

Mr. SULLIVAN. Thank you. I yield back. 

Mr. STEARNS. I thank the gentleman. We will temporarily put 

the subcommittee into recess until 11:35, 11:40. Coming up on the 

Democrat side is Mr. Gonzalez and Mr. Green, and then on our 

side would be Burgess and Blackburn. So I urge everybody to return. 

[Recess.] 

Mr. STEARNS. The subcommittee will reconvene, and the chairman recognizes Ms. Schakowsky from Illinois for 5 minutes. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

I wanted to thank you, Mr. Sunstein, for mentioning the requirement now to have some rearward visibility in cars. Along with Republican Peter King of New York, that was my legislation that 

would require some rulemaking, and I am very grateful for the 

lives that will be saved and injuries that will be prevented because 

of the regulation. 

I am wondering, one way to judge, I suppose, how we are doing 

with regulation is just to count the numbers, but I think another 

way would be to look at what are the net benefits of those regulations, and I am wondering if you could describe that and perhaps 

even compare that to prior Administrations. 

Mr. SUNSTEIN. Thank you for that question. In the first year of 

the Clinton Administration, the net benefits of final regulations 

were minus $400 million. In the first year of the Bush Administration, the net benefits of regulations were minus $300 million. In 

our first year, 2009, the net benefits of regulations were plus $3.1 

billion, and it is going to look a lot better for 2010. So our net benefits are way ahead of our predecessor Administrations. 

In terms of human realities behind the numbers, which your 

question points to, the rear visibility rule, which hasn’t been finalized yet but it has been proposed, will save hundreds of lives or serious injuries, a plurality of which occur to children. We have a 

rule involving salmonella and eggs which will prevent 79,000 diseases, protect Americans a number of whom would die without the 

rule. We have rules involving stopping distance for trucks so they 

don’t crash into people, so they stop more quickly. This will save 

hundreds of lives. So we are looking very carefully at the cost side, 

but as your question suggests, it is sometimes worth incurring a 

47 

cost if you can save significant lives, prevent injuries, prevent diseases and illnesses. 

Ms. SCHAKOWSKY. I would also like you to describe the process. 

Clearly, OIRA doesn’t always agree with regulations that are proposed, and again, there are a number of ways to measure that but 

I am wondering if you could describe your process and what the effect has been when you don’t agree with regulations that have been 

proposed. 

Mr. SUNSTEIN. Thank you for that question. The OIRA process 

which has been built up really since President Reagan and has had 

bipartisan approval involves agencies’ submission of rules, proposed or final, to the Office of Information and Regulatory Affairs 

and then we coordinate a process of interagency analysis. So different parts of the government with different perspectives and expertise will weigh in on the proposed rule, and we have a period 

when the proposed rule is with the Office of Information and Regulatory Affairs when we are available to members of the public including stakeholders, including Congressional staffs, who can come 

over to us and frequently do to weigh in on rules. 

There was a reference to the return letter and the absence of one 

from the Obama Administration thus far. That is a nuclear option, 

and if you look at the practice under the Bush Administration and 

the Clinton Administration and the Bush Administration before, 

the return letter is a very rarely used tool. I think the median 

number in the Bush Administration certainly in its last 5 or 6 

years was one or two for thousands of rules. What more typically 

happens is a collaborative process by which the agency responds to 

the concerns expressed in the review process, and in our Administration, 75 percent of the time, three-quarters of the time the rule 

has been concluded on, meaning approved, consistent with change, 

meaning in the overwhelming majority of cases when the rule is 

concluded on, it has been altered, not necessarily by the Office of 

Information and Regulatory Affairs, but as a result of the process, 

typically by the agency itself which sees maybe there is a less burdensome way to do it, maybe we can cut costs this way, maybe this 

will have less of an adverse potential effect on jobs. Also, agencies 

not infrequently withdraw their rules when they conclude on the 

basis of what they have heard that it is not appropriate to go forward, and the withdrawal is a much more collaborative and constructive approach than the return letter, and I am sure previous 

OIRA administrators would agree with that. We have had at last 

count 99 rules that were submitted to the Office of Information and 

Regulatory Affairs withdrawn. 

Ms. SCHAKOWSKY. So the record of this collaborative effect is to 

actually get rid of some potential rules and to significantly change 

a number of them? 

Mr. SUNSTEIN. Absolutely. 

Ms. SCHAKOWSKY. In the very few seconds I have left, let me just 

associate myself with the President’s remarks yesterday that he 

would not hesitate to enforce commonsense safeguards to protect 

the American people. That is what we have done in this country 

for more then a century, and I think that is the way we should go 

forward. So I thank you very much. 

Mr. STEARNS. I thank the gentlelady. 

48 

The gentlelady from Tennessee, Ms. Blackburn, is recognized. 

Ms. BLACKBURN. Thank you, Mr. Chairman. I appreciate that, 

and I thank our witness for being here. I do have about three questions that I want to move through as quickly as possible. 

We have discussed these orders that have been given, and one 

is entitled Regulatory Flexibility, Small Business, and Job Creation. In it, the President states that his Administration is, and I 

am quoting, ‘‘firmly committed to eliminating excessive and unjustified burdens on small businesses.’’ Now, this is important to 

me because small business is our main employer in Tennessee. So 

as the President states in his memo, isn’t it true that eliminating 

burdens on small business is the purpose of the Regulatory Flexibility Act? 

Mr. SUNSTEIN. Absolutely correct. 

Ms. BLACKBURN. OK. Under this Act, if any agency’s proposed 

regulation will have a—quoting from the Act—‘‘significant economic impact on a substantial number of small entities’’ an agency 

must conduct a regulatory flexibility analysis, correct? 

Mr. SUNSTEIN. That is correct. 

Ms. BLACKBURN. But isn’t it true that in the vast majority of 

cases, the agency does not end up performing that analysis because 

it determines that its own regulation will not have a significant impact on small businesses? 

Mr. SUNSTEIN. That is correct, with the qualification that the 

agency’s determination to that effect is subject to a public and internal scrutiny including from the Office of Advocacy, which is an 

important partner in the regulatory process. 

Ms. BLACKBURN. Well, I would point out to you also that a GAO 

report showed that 89 percent of its rules were certified as not having a significant impact. This is from the time period from 1994 to 

1999. So the EPA was doing the analysis only 10 percent of the 

time. So do you have any current data on how often agencies are 

making this determination and therefore avoiding the requirement 

to fulfill that regulatory flexibility analysis? 

Mr. SUNSTEIN. I don’t have a number offhand but we can—— 

Ms. BLACKBURN. Would you submit for the record? 

Mr. SUNSTEIN. Absolutely. 

Ms. BLACKBURN. OK. Also in the memo regarding small business, 

it directs agencies to give, quoting, ‘‘serious consideration to reducing burdens on small businesses only in those cases where the 

agency is conducting a regulatory flexibility analysis,’’ correct? 

Mr. SUNSTEIN. That is correct. 

Ms. BLACKBURN. But since these agencies rarely do it, it sounds 

like this memorandum won’t really have much impact on small 

businesses. Do you agree with that? 

Mr. SUNSTEIN. No, that I don’t agree with, and you can just see 

in the last week two rules from the Occupational Safety and Health 

Administration have been withdrawn in order to engage with small 

business. 

Ms. BLACKBURN. Do you make the determination that withdrawing those has a potential impact on small businesses’ ability 

to conduct business? 

49 

Mr. SUNSTEIN. I don’t personally make a determination that the 

withdrawal will have a positive impact but the Department of 

Labor—— 

Ms. BLACKBURN. But, sir, you are our witness today. 

Second question that I’d like to go to with you. One of the protections for small business found in current law is the Small Business 

Regulatory Enforcement Act, and under that Act, EPA and OSHA 

must notify the SBA before publishing the regulatory flexibility 

analysis for a proposed rule so that an advocacy panel, which you 

just mentioned, can be convened to review it and provide feedback 

on its impact on small business. Recently, the new governor of Tennessee, Bill Haslam, issued a 45-day freeze on all new regulations 

and rules as part of a top-to-bottom review to fully understand new 

burdens being placed on businesses in our State. Regulatory reviews like the one that Tennessee is undergoing are important because States and small businesses are concerned that agencies are 

ignoring their feedback and the feedback that comes from the advocacy panel. I do think this is a problem that you all have and needs 

to be addressed. Here is an example. The EPA did not follow the 

recommendation of the advisory panel with respect to the boiler 

MACT rule, instead issuing a standard that many small businesses 

feel and have spoken out on that it is impossible to satisfy regardless of the cost. So who reviews the agency’s decision with respect 

to how it considers the panel’s advice? Does OIRA do that? What 

is the role here? 

Mr. SUNSTEIN. We participate in that. There is a group, we participate in that, and you can be confident given the recent Presidential Memorandum and Executive order, and not just that, but 

concrete actions in the recent past that the concerns of small business will be very much taken into account. 

Ms. BLACKBURN. Your consideration of it, do you consider it to 

be objective or subjective? 

Mr. SUNSTEIN. Consideration of the significant impact on a substantial number? 

Ms. BLACKBURN. Yes. 

Mr. SUNSTEIN. To the best of our ability, that is an objective determination. 

Ms. BLACKBURN. I have other questions. I will submit them to 

you in writing and ask for your timely response in writing. 

Mr. SUNSTEIN. You will have that. 

Ms. BLACKBURN. Thank you, sir. Yield back. 

Mr. STEARNS. Mr. Green is next. Mr. Green, you are recognized 

for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. 

Mr. Sunstein, some of the regulations that raise the most ire of 

my Republican colleagues are regulations that are designed to implement the new health care reform law. In fact, you have to have 

regulations to implement a law typically. I am trying to think of 

an example that you don’t. But Republicans have voted to repeal 

the entire law but a close look at these regulations shows that they 

will make insurance better and less expensive for patients for companies that provide workers with their insurance. On November 22, 

2010, the Obama Administration issued a regulation implementing 

the medical loss ratio provision of the Affordable Care Act. This 

50 

regulation will make the insurance marketplace more transparent 

and make it easier for consumers to purchase plans that provide 

better value for their money. The guts of the regulation require 

that insurance companies provide more value for their premium 

dollar by actually spending your health insurance costs on health 

care. Such a novel issue for a health care company, I think, and 

to have a regulation that actually requires that, and not inflated 

administrative costs or excessive executive salaries. Mr. Sunstein, 

do you think that these rules would establish greater transparency 

and accountability for insurers, that they will guarantee Americans 

receive more value for their premium dollar and they will even give 

more Americans a rebate of some of their insurance premiums? 

Now, again, without the regulations that law would not be effective. Is that correct? 

Mr. SUNSTEIN. That’s correct. 

Mr. GREEN. These all seem like they are good people who need 

health insurance. Isn’t there a good example of regulations helping 

consumers, for example? Another regulation put in effect as a result of the health care reform law is the so-called grandfathering 

clause. This rule protects the ability of individuals and businesses 

to keep their current plan. It provides important consumer protections that give Americans rather than insurance companies control 

over their own health care. And it provides stability and flexibility 

to insurers and businesses that offer insurance coverage as the Nation transitions into a more competitive marketplace in 2014. 

My question is, let me ask you about this rule. Isn’t there a good 

example of regulations helping consumers and providing certainty 

for businesses? 

Mr. SUNSTEIN. Absolutely that is a good example. 

Mr. GREEN. Can you give us any insight here where there have 

been so many attacks on commonsense regulations that help consumers? Again, this is something that we have it in the law, and 

if the Administration didn’t promulgate the regulations, I think you 

would not be doing your job. 

Mr. SUNSTEIN. Well, we have a rule that has been issued that 

is going to help consumers make choices about tires by giving information—it is not a mandate, it is not very expensive—about safety, 

fuel economy and durability, and that is part of consumer protection providing information so that people can make their own 

choices. 

Mr. GREEN. There are rules, and these are good examples of how 

regulations can actually help the American public and our constituents. They give Americans better value for their health insurance 

dollar and give businesses certainty about the insurance that they 

are paying for for their employees. It would seem like we should 

be cheering those kind of regulations instead of saying no, we want 

to abolish them. Now, we can take votes up here and you are not 

involved in that, but if you are not promulgating the regulations, 

again, the Administration would not be doing their job, and that 

is true whether it is President Obama, President Bush, President 

Clinton, or all the way back to President Reagan that promulgated 

regulations that was the intent of the law. Is that correct? 

Mr. SUNSTEIN. Yes. Our first obligation is to respect the law. 

Mr. GREEN. Thank you. 

51 

Mr. Chairman, I have no other questions but I would be glad to 

yield my 1 minute left to our ranking member. 

Ms. DEGETTE. Thank you for yielding. 

Let me just follow up on a couple of questions or maybe one. Mr. 

Sunstein, you were asked earlier about the direction in the Executive order to consider values that are difficult to quantify like 

human dignity. Can you elaborate for about 40 seconds on the intent of this direction? 

Mr. SUNSTEIN. Yes. The idea is to recognize that under the law 

as the previous question suggested, human dignity is sometimes 

something that agencies are supposed to consider. Just this week, 

the Department of Justice issued a rule involving rape, and in the 

analysis of the rule the agency paid careful attention to 

monetizable costs and benefits. That is very important, but it recognized that the act of rape involves an assault to human dignity 

and it is not reducible just to numbers. 

Ms. DEGETTE. Thank you. 

Mr. STEARNS. Dr. Burgess is recognized for 5 minutes. 

Dr. BURGESS. Thank you, Mr. Chairman. 

Mr. Sunstein, we were all grateful when the President signed an 

extension of the sustainable growth rate law in December, but I 

think as we all recognize, access for our seniors to physicians of 

their choice is being adversely affected by what we know of as the 

sustainable growth rate formula, the formula by which Medicare 

pays physicians. Now, is it the President’s intention to follow 

through on his promise that this formula abnormality be fixed in 

this 13-month time interval that we have given ourselves? 

Mr. SUNSTEIN. I greatly appreciate the questions. It is a bit out 

of my domain as OIRA Administrator but—— 

Dr. BURGESS. You do work in Office of Management and Budget, 

correct? 

Mr. SUNSTEIN. I do. 

Dr. BURGESS. Is it likely to be in the President’s budget request 

to Congress that there is some type of relief on the sustainable 

growth rate formula? 

Mr. SUNSTEIN. I would have to defer to the director of the Office 

of Management and Budget lacking clarity on the right answer to 

that one. 

Dr. BURGESS. Do you have a sense whether it is the President’s 

commitment to follow through on this? 

Mr. SUNSTEIN. My belief is that anything the President has made 

a commitment to, he is likely to follow through on. 

Dr. BURGESS. Well, as you know, I mean, the price tag for this 

varies depending on who you talk to, but you get figures from $200 

billion to nearly $400 billion over the 10-year budgetary cycle. Do 

you have an idea, a sense as to what programs the President is 

looking at cutting or replacing in order to come up with this figure? 

Mr. SUNSTEIN. Actually on the budgetary side, there is an army 

of people who are working and that is not a side that the Office 

of Information and Regulatory Affairs works with at that level of 

detail. So in particular budgetary requests, we are respecting the 

workload of others. 

Dr. BURGESS. Perhaps we can get that information from another 

source. But I do want you to understand that the Administration 

52 

has made a commitment on this and America’s doctors are looking 

to the Administration to fulfill that commitment. 

On the issue of regulations, there was an entirely new federal 

agency that sprang up like mushrooms after a spring rain after the 

health care law was signed, and this was the Office of Consumer 

Information and Insurance Oversight. I talked to some of the people who were at the head of that agency in the fall and they could 

not identify for me where the authorization language existed in the 

Patient Protection Affordable Care Act for that new federal agency. 

I asked if there were not other areas of HHS that might do this 

same activity, and they said oh, no, this is an entirely new activity 

that we will be undertaking. Never before has the Federal Government regulated private insurance on a national level. That has always been left up to the States. So in this new climate of regulatory reform, is this a good idea to be going in this direction? 

Mr. SUNSTEIN. As I say, the lane of the Office of Information and 

Regulatory Affairs is relatively narrow so issue of organization 

within HHS or DHS or others—— 

Dr. BURGESS. Let me interrupt you. Never mind that, because 

they actually have reorganized since we started asking questions 

and it is now in a different part of HHS, but just overall, if we are 

looking at a new climate of perhaps easing some of the regulatory 

burden, your words, not mine, is it a good idea to be instituting an 

entirely new federal agency that will perform this function? 

Mr. SUNSTEIN. What I would say in the spirit of the Executive 

order just signed is that any decision with respect to regulation 

should be connected with the principles that the President has laid 

out, and that includes structural decisions. 

Dr. BURGESS. Well, of course, it would have been helpful if we 

could have had those individuals in front of us for an oversight 

hearing during the fall. We were not permitted to do that. I suspect 

we will be now under Chairman Stearns’ leadership. But again, in 

the interest of this new climate of regulatory reform, it seems like 

this is something where your office should take a direct interest. 

I mean, we are told, for example, that you can’t sell insurance policies over State lines because that has always been a State regulated function and yet this individual is telling me that for the first 

time there is now going to be a national regulation of private insurance that has never existed in this country before. If that is OK, 

then maybe it is OK that we sell insurance across State lines, that 

that may be a logical follow-on that perhaps we should explore. But 

from the regulatory side, I do hope that your agency will take at 

least some passing interest and have some curiosity into this new 

agency that has been set up and now been absorbed into CMS but 

it is still there. The purpose is still there. 

Mr. SUNSTEIN. I appreciate it. 

Mr. STEARNS. I thank the gentleman. 

Mr. Weiner from New York is recognized. 

Mr. WEINER. Thank you. Let me begin by congratulating you, 

Mr. Chairman, on this hearing. You are showing you are running 

a very efficient, quick hearing, so quick in fact that it is 

uncontaminated by actual testimony from the witness in most 

cases. 

53 

We are learning a little bit about this Congress, which is that we 

have lurched so quickly into a very successful campaign by my Republican friends that all of the slogans are just being transplanted. 

We are having committee hearings and we are starting to see the 

slogans don’t really hold up. For all this talk about excessive regulation, the first thing that Mr. Issa, a chairman of another committee, says is, hey, guys, tell us if there are any regulations you 

don’t like because we don’t know any. We hear my colleagues, particularly some of my freshmen colleagues, talk about how small 

businesses always tell me about regulations and how bad things 

are. Well, let us take a look at the record. The record is that the 

Dow Jones has had a better year than they have had any time in 

the last 12 years, that we have now businesses sitting on over $1 

trillion of cash that they have done pretty well with, that we have 

now created more private-sector jobs in 2 years of Obama than 8 

years of President Bush. So this whole idea of, my goodness, the 

crushing regulations, and then the first exchange between Chairman Stearns and Mr. Sunstein was interesting. He asked a question or postulated something. Mr. Sunstein rebutted it and then he 

returned and said well, let us assume I am right. Well, OK, we can 

do that, or we can actually listen to the evidence. There are no 

more regulations in these 2 years than there have been in the past 

2 years. 

But let me just ask, perhaps to put into context, this idea of regulation. No one likes bad regulations but regulation to try the price 

on it is kind of a hard thing to do. For example, when there was 

this big effort on the part of financial services companies to change 

the capital requirements to allow them to keep less capital, have 

more debt on their books, they said that this regulation was costing 

us an enormous amount of money. Well, I am curious. How do you 

calculate the cost of easing that regulation? Well, you have to count 

the TARP fund, 750-some-odd billion dollars, but how do you count 

the pain that it causes some person who did nothing wrong, whose 

home is not foreclosed, who is not underwater but lives on a block 

now with five foreclosed homes because capital requirements 

weren’t lived up to? How do you count that? Let us assume each 

house is a $200,000 house. You can say well, there is the $200,000 

home that is foreclosed on but how do you assess the value to the 

community that has lost the tax base? How do you assess the value 

of that homeowner who did nothing wrong, who took out no extra 

loans but now whose property value has plummeted 75 percent? 

How do you say to the rest of the economy that small business guy 

that because the bank has gone under because that requirement 

has been eased, now he can’t get a loan? 

The fact is, ladies and gentlemen, that these regulations are in 

place and they seem so onerous and burdensome sometimes but 

what they are intended to do is stop real damage to our economy. 

The very same Wall Street people who advocated for the lessening 

of the net capital rule are the ones who are now unemployed. They 

thought they were doing a great, smart thing, advocating to loosen 

that rule. We did it, and now their company, Bear Stearns, doesn’t 

exist. Now, would you rather have a small regulation and have a 

beautiful company that is employing lots of people and giving loans 

or get rid of that burdensome, onerous regulation that requires this 

54 

silly thing like they keep enough money in their bank before they 

start giving loans? Would you rather have a regulation that says 

all hospitals have to have electronic recordkeeping so they can 

share information or do you want to try to figure out the cost that 

it is when someone is given the wrong drug and goes into seizure? 

Yes, it may cost a little bit more money to have these regulations 

in place, but if you are really going to do the mathematic calculation that Mr. Stearns alluded to and others have alluded to, how 

exactly do you do that? I think it would be helpful, Mr. Chairman, 

for us to have a hearing on exactly how it is you assess these costs. 

Let us see how much the cost is on having a lead in toys regulation. Let us see. How do you figure out the cost of brain cancer in 

a 6-year-old as opposed to a 3-year-old? Huh. Let us put that in a 

ledger and see how that works out. But the regulation is so burdensome and onerous. Well, to that family, that is the difference between their child having a lifetime illness and not, you know what? 

That regulation seems OK. Maybe it is not so bad for a toy company to have to not put lead in their toys. 

So if we are really going to do the math, I think we should have 

a hearing here perhaps when Mr. Sunstein can come back. He 

clearly has a lot he wants to get off his chest, and I am not giving 

him much opportunity here either, but let us really see what that 

ledger looks like and let us be honest about it. Let us get past the 

campaign rhetoric. 

Mr. STEARNS. Ms. Myrick is recognized for 5 minutes. 

Mrs. MYRICK. Thank you, Mr. Chairman. 

I wanted to go back to the NHTSA rulemaking, and I am going 

to ask you to submit some of this for the record because I have got 

another question and I will be out of time, so I appreciate it. 

The proposed rulemaking that does say, rear visibility system 

and then cameras inside the car, etc., supposedly what I have been 

told is that the accidents that did happen were in large trucks and 

SUVs and vans, bigger vehicles, where the rule says it has to go 

in every car, and my question on the cost-benefit analysis again, 

believe me, I don’t want children to lose their lives and there is 

nothing more unimaginable than losing a child, and if we can save 

millions of lives, I support saving millions of lives. But when you 

look at the change that the Administration says they want to do 

in the rulemaking and try and put cost-benefit analysis into it, the 

NHTSA’s own modeling that they use says that it isn’t cost beneficial to do it. 

And then the other question is, if you do put this across the 

board to all the cars, does it raise the price of the cars to a point 

where people can’t buy them and then you have still got accidents 

because they don’t have availability? So for the sake of time, if you 

would be willing to answer that for me to submit for the record, 

and then also, did you have consultation with NHTSA before this 

happened, I mean, before the proposed rulemaking on the—— 

Mr. SUNSTEIN. Yes. 

Mrs. MYRICK [continuing]. Cost benefit? 

Mr. SUNSTEIN. Always with rules, we review the proposed rules 

before they go out. 

Mrs. MYRICK. Thank you. My next question is on billion-dollar 

costs to the economy on rulemaking. I know you were asked by 

55 

Speaker Boehner and some other House members last year to tell 

them how many billion-dollar rules the Administration is preparing, and they didn’t receive any answers to my knowledge, 

which has caused a lot of uncertainty in the business community. 

I know Mr. Weiner says everybody is doing wonderful but the reason they have got that cash setting aside is because they are afraid 

to invest it, not knowing what regulations are going to come down 

the pike. So, do you have an answer today? Can you tell us how 

many billion-dollar rules that you are planning? 

Mr. SUNSTEIN. I can tell you how many billion dollars we have 

done, and it is a very small number. Planning, as our discussion 

suggests thus far, requires the process of interagency review, public 

review, cost reduction, so the number of rules that are planned in 

any strong sense that cost over $1 billion is very hard to specify. 

Often they are rules that are under discussion but they weren’t 

really planned and they might come in like a lion and go out like 

a lamb. 

Mrs. MYRICK. But perhaps we can get back with you on that 

later after a couple months or so. 

Mr. SUNSTEIN. Yes. 

Mrs. MYRICK. The other thing that I wanted to ask is, when you 

look back on the regulations that have been issued during the Administration, can you identify any in which it has been determined 

that the benefits have not justified the cost? Do you have that kind 

of analysis that you could share with us? 

Mr. SUNSTEIN. Yes. There is only one big one that comes to mind. 

It is called Positive Train Control, and it is a statutory requirement, and the Department of Transportation had to issue it as a 

matter of law even though the monetizable benefits are lower than 

the monetizable costs. There aren’t a lot like that. 

Mrs. MYRICK. Would you be willing to submit again for the 

record? 

Mr. SUNSTEIN. Unquestionably. 

Mrs. MYRICK. I would appreciate a full answer and explanation 

on that particular situation. 

With that, I yield back the rest of my time, Mr. Chairman. 

Mr. STEARNS. I thank the gentlelady. 

The gentleman from Massachusetts, Mr. Markey, is recognized. 

Mr. MARKEY. Thank you, Mr. Chairman, very much. 

So we all know what the reality of this hearing is. The Republicans hope that they can use the Regulatory Flexibility Act to turn 

the United States into a health, environment, safety, and consumer 

protection regulation-free zone, and the presumption is that regulation is bad. But obviously that is not necessarily the case. For example, we have heard a lot about how EPA’s efforts to regulate 

global warming pollution will lead to an economic catastrophe but 

this is just not borne out by the facts. 

Before the Obama Administration’s global warming regulations 

for cars and SUVs were announced in 2009, the auto industry in 

this country was literally in the tank before the regulations were 

in fact promulgated. More than 300,000 jobs lost, two American 

companies in bankruptcy and consumers no longer willing to buy 

the gas-guzzlers that the domestic automakers had bet the bank 

on. And what has happened since the regulations were announced? 

56 

Well, in 2010 auto sales went into overdrive and soared more than 

11 percent, snapping the industry out of its 4-year decline. Companies were rehiring thousands of workers, and there has been a proliferation of new companies that plan to make and market electric 

vehicles and other advanced vehicles. So this Groundhog Day recitation of how regulations will destroy the economy and jobs has already been shown to be flat-out wrong. 

So I have some questions about EPA’s future global warming regulations that perhaps you could help me with, Mr. Sunstein. Will 

regulations that seek to limit global warming pollution from power 

plants or refineries also take into account the increase in jobs that 

could result from the development and installation of new clean energy technologies? 

Mr. SUNSTEIN. Yes. 

Mr. MARKEY. Yes. Isn’t it true that regulations to curb dangerous 

air pollutants could result in quantifiable cost savings in the form 

of medical expenses that won’t be incurred or environmental damages that won’t need to be mitigated? 

Mr. SUNSTEIN. Yes. 

Mr. MARKEY. Installing pollution control technologies on power 

plants could also lead to increases in the efficiency of the facilities 

and significant cost savings for companies. Will you be quantifying 

these and other benefits as part of any regulatory analysis? 

Mr. SUNSTEIN. These are not multiple-choice questions, and the 

answer is yes. 

Mr. MARKEY. Thank you. The EPA recently announced that it 

would only issue its proposal to regulate global warming pollution 

from refineries and power plants after meeting with business leaders and other stakeholders to solicit their input. Is this consistent 

with the President’s Executive order requiring agencies to seek the 

views of those who might be impacted by regulations before proposing them? 

Mr. SUNSTEIN. Under section 2, absolutely. 

Mr. MARKEY. EPA has also issued a rule that ensures that millions of smaller sources of global warming pollution are exempted 

from a requirement to obtain Clean Air Act permits and that the 

requirements for medium and larger emitters would be phased in 

over a period of several years. Is this consistent with the President’s requirement that regulations take the special needs of small 

businesses into account? 

Mr. SUNSTEIN. Yes. 

Mr. MARKEY. Are EPA’s actions also consistent with the President’s Executive order requiring agencies to promulgate regulations 

that impose the least burden on society and maximizing the net 

benefits to society? 

Mr. SUNSTEIN. That was the goal of the PSD tailoring rule. 

Mr. MARKEY. Thank you. EPA recently proposed a rule to regulate air emissions from cement kilns. In its analysis, EPA found 

that the health benefits of the rule would yield between $17 and 

$18 for every $1 in cost. Do you think that this sort of return on 

a regulatory investment is a good one? 

Mr. SUNSTEIN. It sounds like it would be a very good investment. 

Mr. MARKEY. Historically speaking, have industries typically 

overestimated the costs of new regulations? 

57 

Mr. SUNSTEIN. That is frequently the case. 

Mr. MARKEY. Now, for the cement kiln rule, EPA didn’t even consider the benefits of reducing emissions of hazardous substances 

like lead, chromium or arsenic. Historically speaking, have agencies typically underestimated the benefits of new regulations? 

Mr. SUNSTEIN. Often they have. We need to be very systematic 

and not answer the question typically. 

Mr. MARKEY. I thank you for that precision in your answer, but 

I think the larger point is true, that our lives are longer and safer 

and better because of a regulatory scheme that began to be put in 

place in 1900. Average age of death in the United States in 1900 

was 48 years of age. These regulations that have gone on the books 

from the Garden of Eden until 1900, 48 years of age, now it’s 79 

years of age, 31 bonus years. Something happened in the last 100 

years and we exported it around the world that we got all those 

extra years, and a lot of it is protecting the health, the safety, the 

environment and ensuring that those regulations are there to protect everyone, not just the wealthy, which is what the first 5,000 

years of humanity was really focused on. 

I thank the gentleman. 

Mr. STEARNS. I thank the gentleman. The gentleman is very active and interested in baseball, and in this case he has offered Mr. 

Sunstein a lot of softball questions. 

Dr. Gingrey for 5 minutes. 

Dr. GINGREY. Thank you, Mr. Chairman. 

Mr. Sunstein, obviously it would appear on the Democratic side 

of the aisle that all regulations and regulatory regimes are good 

and they are suggesting that on our side of the aisle they are all 

bad when obviously it is somewhere in between, and really the purpose of this hearing and your testimony, we want to glean the 

truth because clearly some regulatory rules are bad, and in regard 

to the issue of human dignity and consumer protection, let me reference last year the Administration included an end-of-life Medicare payment rate for physician services in its final rule at literally 

the last minute without allowing for a period of public comment. 

Only after a large public outcry did the Administration own up to 

its actions and indeed reversed itself. 

Section 1 of the President’s recent Executive order states that 

our regulatory system, and I quote, ‘‘must allow for public participation and an open exchange of ideas.’’ I want a yes or no answer. 

In your opinion, did the Administration allow for public participation in the crafting of this regulation as spelled out in section 1 of 

the Executive order? Yes or no. 

Mr. SUNSTEIN. As the repeal of the original rule suggests, the 

judgment of HHS was that there had not been an adequate opportunity for public comment. 

Dr. GINGREY. So the answer is no? 

Mr. SUNSTEIN. Yes. 

Dr. GINGREY. Thank you. Another yes or no question. Do you or 

OMB know who in the Administration made that decision to not 

allow public participation, instead slipped this regulation into the 

rule in the dark of night? Yes or no? 

Mr. SUNSTEIN. I don’t personally know. 

58 

Dr. GINGREY. OK. Another yes or no. Do you know which individuals within the Administration would have the authority to slip a 

regulation into a final rule in the dark of night without allowing 

for this public comment? 

Mr. SUNSTEIN. I don’t think anyone has that authority. 

Dr. GINGREY. So the answer is? 

Mr. SUNSTEIN. No, I don’t know. There are people—the Secretary 

of HHS has considerable authority over her rules and she does not 

slip things in in the dark of night. 

Dr. GINGREY. Well, it certainly does appear that the Administration purposely avoided obtaining Congressional approval for an unpopular regulation that they could not sell to the American people 

last Congress. So instead, the measure was inserted into this morass of regulations in the hope that no one would notice. Do you 

believe that the American people deserve to know why they were 

not allowed to publicly view this regulation before the Administration published it? Yes or no. 

Mr. SUNSTEIN. I think the American people deserve to see the 

content of rules before they are finalized. 

Dr. GINGREY. So the answer is yes. Thank you. Again, would this 

recent Executive Order 13563 prevent the Administration from enforcing a regulation without allowing public participation in the future? 

Mr. SUNSTEIN. That is correct. 

Dr. GINGREY. Can you assure us here today, Mr. Sunstein, that 

this Administration will not attempt such an illegal end run in the 

future? Yes or no. 

Mr. SUNSTEIN. Yes. 

Dr. GINGREY. Thank you. And finally—and I will yield back some 

time, Mr. Chairman. 

Mr. STEARNS. I thank the gentleman. 

Dr. GINGREY. If the witness would answer this last question? 

Would you agree this shows how regulations can make unpopular 

actions possible without Congress having to support political risky 

positions? Yes or no. 

Mr. SUNSTEIN. Well, if I have to answer yes or no, I would answer yes to that one. 

Dr. GINGREY. Thank you. You have been a great witness, and I 

will yield back to the chairman. 

Mr. STEARNS. I thank the gentleman, and now we will move on 

to Mr. Scalise, who is recognized for 5 minutes. 

Mr. SCALISE. Thank you, Mr. Chairman, and Mr. Sunstein, I appreciate you coming before the committee. 

I want to start asking about regulations regarding oil and gas 

drilling operations, and I think you touched on some of that but 

does OMB actually go and review the rules from the Department 

of the Interior concerning oil and gas regulations? 

Mr. SUNSTEIN. If they are significant regulatory actions, yes. So 

it depends on their nature but some of them, the answer is yes. 

Mr. SCALISE. OK, some of them. When the Department of the Interior came out with the moratorium on drilling, did you review 

that? 

59 

Mr. SUNSTEIN. No, that wasn’t a regulatory action within the 

meaning of Executive Order 12866 so we did not review the moratorium. 

Mr. SCALISE. At least that is your feeling that it wasn’t? 

Mr. SUNSTEIN. No, it is just, it doesn’t fit easily within the definition of a significant regulatory action. 

Mr. SCALISE. Why would you not think that would be significant, 

the President literally shutting down an entire industry? 

Mr. SUNSTEIN. OK, I—— 

Mr. SCALISE. And which cost billions of dollars. 

Mr. SUNSTEIN. I completely understand appreciate the question. 

The answer is somewhat technical, which is the foundation for authority is rules within the meaning of the Administrative Procedure Act. A moratorium isn’t a rule within the meaning of the Administrative Procedure Act. We do extend review somewhat beyond 

that significant—— 

Mr. SCALISE. When you look at—I will just bring you back to 

President Clinton’s Executive Order 12866, which is still in effect 

and part of your department’s purview. If it has an annual effect 

on the economy of $100 million or more or more adversely affects 

in a material way, I mean, we are talking about a major policy decision that had an impact on well over $100 million and in fact is 

one of the reasons that we are seeing the price of oil approach $100 

a barrel. Would you consider that first of all a major economic impact of $100 or more? 

Mr. SUNSTEIN. Yes, though the ‘‘it’’ which is the reference is to 

regulatory actions, as I mentioned, and that is a term of art under 

the Executive order. The moratorium didn’t quite fit under that. 

Mr. SCALISE. And I would reference you to also go back and look 

at the federal judge’s ruling, who felt that the Department did go 

outside of their purview—— 

Mr. SUNSTEIN. That is correct. 

Mr. SCALISE [continuing]. In issuing that, and I would be curious 

to see what your relationship with those reviews was, and I would 

be surprised if you didn’t feel that it was something that your department should have had review over. As it relates to the current 

regulatory scheme, are you in review of those rules? 

Mr. SUNSTEIN. Yes. Anything that counts as a rule under the Administrative Procedure Act, absolutely, significant guidance documents and interpretative statements under March 2009 memorandum by the director of OMB, we review this also. 

Mr. SCALISE. Is it true that the Department did not perform a 

regulatory flexibility analysis regarding its impact on small businesses? 

Mr. SUNSTEIN. I don’t recall the answer to that one. What 

are—— 

Mr. SCALISE. I will help you. This is from OMB. This is an OMB 

document that actually says that the oil and gas operations on the 

Outer Continental Shelf, the actions that they took did not require—according to your office, did not require—flexibility analysis. 

Mr. SUNSTEIN. Are you referring to the moratorium or are you 

referring to a rule? 

Mr. SCALISE. Their increased safety measures, as they referred 

to them. 

60 

Mr. SUNSTEIN. Oh, OK. Well, if it is a rule, then there has to be 

an analysis to that effect, and my recollection is that the small 

business impacts were not significant enough to require that analysis. 

Mr. SCALISE. And who is that based on? 

Mr. SUNSTEIN. That is based in the first instance under the Regulatory Flexibility Act on the judgment of the relevant department. 

Mr. SCALISE. So you just take their word for it if they say it won’t have $100 million impact? Clearly, and I will just run you 

off some numbers that the White House has actually confirmed. It 

has cost up to 12,000 jobs that our economy has lost because of 

that action. It has cost about 12 percent of our current U.S. oil production and about $70 billion of investment which there have been 

a number of private research that has been done to show that, $70 

billion, so you just took their word that it wouldn’t cost over $100 

million? 

Mr. SUNSTEIN. OK. If you are referring to the moratorium, as I 

say, that was not subject to our review under our Executive order. 

If you are referring to some rules that we have had—— 

Mr. SCALISE. The overall rules. 

Mr. SUNSTEIN. Well, the moratorium is distinct from the rules. 

I don’t believe, though I might be wrong on this, that the rules are 

anticipated to have significant adverse job impacts. One of them 

is—— 

Mr. SCALISE. Well, it already has. I mean, that has been documented by the White House, so when you come out with flexibility 

analysis, and you determine or you take their word that they don’t 

need to do one under the law—— 

Mr. SUNSTEIN. No. I said in the first instance, which is a very 

important qualification, we do not take their word as authoritative 

and we engage with the Office of Advocacy and the Small Business 

Administration very carefully. 

Mr. SCALISE. And I would like to get any kind of documentation, 

e-mails, correspondence that you had with them in relation to these 

rules and the determination not to do a flexibility analysis by your 

department because that was a ruling that your department—— 

Mr. SUNSTEIN. I believe you are referring, though I am not sure, 

to the moratorium, which, as I say, we didn’t review. If you are referring to the rules, then we did review at least two—— 

Mr. SCALISE. And did you review—— 

Mr. SUNSTEIN [continuing]. With full analysis of costs and benefits. 

Mr. SCALISE. Did you review the 30-day safety report that the 

President’s own scientific commission—because one of your challenges or your tasks is to base this on science, and his scientists 

actually said it would reduce safety in the Gulf. The scientists said 

it would reduce safety in the Gulf to impose the moratorium. That 

was in the 30-day safety report that came out. 

Mr. SUNSTEIN. The 30-day safety report isn’t a regulatory action 

subject to formal OIRA review. 

Mr. SCALISE. Right. But it was doctored by, from every report we 

have gotten from the climate czar, who is conveniently leaving, but 

that document was doctored to imply that the scientists said that 

the science backed it up when in fact the scientists said it actually 

61 

would reduce safety to impose that, and that is what the Department of the Interior used as the basis. So do you look at any underlying documents? If a department says we are going to make a rule 

and we are going to base it on underlying documents, do you look 

at those underlying documents? 

Mr. SUNSTEIN. I was about to say I am very grateful that is not 

a yes or no question, but it ended up being a yes or no question. 

If it is not a regulatory action, then we don’t have formal review 

though there may be some participation by some of OIRA’s staff. 

Our lane is the lane of regulatory action with central feature being 

rules. Reports of that sort, we may have some informal—— 

Mr. SCALISE. And I know I am out of time, but the regulatory 

actions are costing jobs in the thousands right now. 

Mr. SUNSTEIN. That is—— 

Mr. SCALISE. That is something we will have to follow up on. 

Mr. SUNSTEIN. That is so appreciated, and at the core of the 

small business memorandum and the Executive order is insistent 

focus on job creation. 

Mr. SCALISE. Thank you, Mr. Chairman. I yield back. 

Mr. STEARNS. Mr. Scalise asked for some documents. I think you 

might provide him, at his request, with some of those documents. 

Mr. Gardner is recognized for 5 minutes. 

Mr. GARDNER. Thank you, Mr. Chairman, and thank you, Mr. 

Sunstein, again for your testimony before this committee. 

I just want to talk a little bit about how something is reviewed 

under these Executive orders and hoping to have you help me understand what takes place. Could you explain briefly how your office would review a regulation under Executive Order 12866 and 

what are the key components of your review? 

Mr. SUNSTEIN. OK. Thank you for that. What we would do first 

is explore with other agencies which are going to see the rule 

whether the requirement of consideration of alternatives has been 

met, whether the agency has done a careful analysis of costs and 

benefits, whether the agency has justified its reasoned determination that the benefits justify the cost, whether the agency has 

shown that there is a compelling reason for federal action, whether 

the agency has considered reliance on the market, reliance on State 

authority, as some of the earlier questions suggested—— 

Mr. GARDNER. So it is safe to say that there are basically three 

core components where you identify and assess available alternatives to direct regulation dealing with alternative forms of regulation and of course getting to impose the least burden on society 

including individuals and businesses? 

Mr. SUNSTEIN. Yes, and we recently issued a checklist that basically puts in a page-and-a-half our essential inquiries. 

Mr. GARDNER. So if you take a real-world example of the EPA 

and greenhouse gas regulations, how did your office use those requirements when carrying out that rule review? 

Mr. SUNSTEIN. Well, the most costly of the greenhouse gas rules 

is the one that there is considerable enthusiasm for, which is the 

fuel economy rule, and what we did for that one was to investigate 

the costs of the rule, the benefits of the rule, to think of what alternatives there are in terms of stringency, to consider what kind of 

flexibilities might be provided for small business and others, to enVerDate Nov 24 2008 12:27 Apr 25, 2011 Jkt 037690 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-1 012611\112-1 CHRIS
62 

sure that there was full public participation so that people could 

comment on the options, and to try to come up with the approach 

that maximizes net benefits. 

Mr. GARDNER. And 12866 also says that the underlying analysis 

of costs and benefits of potentially effective and reasonably feasible 

alternatives to the planned regulation identified by the agencies or 

the public, it goes on to say, and an explanation why the planned 

regulatory action is preferable to the identified potential alternatives. Did the EPA provide and did you review an analysis of the 

reasonably feasible alternatives—— 

Mr. SUNSTEIN. Yes. 

Mr. GARDNER [continuing]. For the endangerment finding and 

the subsequent greenhouse gas regulations? 

Mr. SUNSTEIN. Yes. That is laid out in great detail in the regulatory impact analysis and it is also in the preamble to the rule. 

Mr. GARDNER. And what alternatives then did the EPA provide 

to you? 

Mr. SUNSTEIN. The EPA and NHTSA discussed different levels of 

stringency and explained that a more stringent approach would 

run into serious concerns about feasibility and cost. 

Mr. GARDNER. And that was your evaluation of each as well? 

Mr. SUNSTEIN. We concurred with the evaluation. We thought it 

was a very reasonable evaluation. 

Mr. GARDNER. The testimony that we have heard today from 

members of the committee as well as our colleagues on the other 

side of the aisle seemed to, as the gentleman from Georgia stated, 

be an extreme left to the right. What am I supposed to tell my constituents when it comes to those who come to me and say these 

regulations are costing me jobs? I mean, are they wrong? Are they 

wrong that this is costing them jobs? Do they not know what they 

are talking about? 

Mr. SUNSTEIN. Well, we need to know what regulation it is, but 

I think the first thing you should say to them, as reflected in your 

opening remarks, is that there are two sets of concerns. One is 

about fear of what is coming and the other is trouble caused by 

what is there. On fear of what is coming, you have a very strong 

signal from the President of the United States with respect to 

small business in particular, and that is a document—— 

Mr. GARDNER. So they are just fearful? 

Mr. SUNSTEIN. Well, that is not all. I am using your words. And 

that is a legitimate fear that regulation can be harmful. So you 

asked what should you say to your constituents. I think you can 

say that both your subcommittee is on this issue and the President 

of the United States and the Administrator of the Office of Information and Regulatory Affairs share this concern, and with respect 

to fear of what is coming, we want to work directly with you to 

make sure things are going right rather than wrong. 

Mr. GARDNER. So will you then make the commitment—— 

Mr. SUNSTEIN. Let me say with respect to the current regulations, I am very glad you introduced that because the president has 

called for a look-back at existing regulations that cause trouble, 

and you can find things in the very recent past where agencies actually have looked back, including the EPA—— 

Mr. GARDNER. Who triggers the look-back? Who does that? 

63 

Mr. SUNSTEIN. The look-back is a process that the Office of Information and Regulatory Affairs is helping to coordinate. 

Mr. GARDNER. So you will request the look-back of the agency? 

Mr. SUNSTEIN. Well, the President has requested the look-back. 

Mr. GARDNER. But you will request to the regulatory agency 

what rule to review? 

Mr. SUNSTEIN. They have to submit plans to us within 120 days, 

and we will work closely with them to figure out what the—— 

Mr. GARDNER. But looking back, you will request those rules that 

are already in effect? 

Mr. SUNSTEIN. We will be participants in the process of figuring 

out what to look back on. I hope you will be a participant also. 

Mr. GARDNER. Will you make a commitment today then during 

this time of economic crisis that you will use your power to make 

sure that the Administration doesn’t put its stamp of approval on 

any regulation that costs American jobs? 

Mr. SUNSTEIN. Well, what I would say if there is—— 

Mr. GARDNER. That can be a yes or no question pretty easily. 

Mr. SUNSTEIN. A yes answer would be preposterous. If there is 

a regulation that is saving 10,000 lives and costing one job, it is 

worth it. But what I would make a commitment to do is to focus 

every day on job creation and the urgent need, as the President 

emphasized last night, to square everything we are doing with the 

overriding imperative of promoting competitiveness, economic 

growth, and helping people get good jobs. 

Mr. GARDNER. Thank you, Mr. Chairman. 

Mr. STEARNS. I thank the gentleman. 

I recognize Mr. Griffith. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

If I might follow up on that question and ask you, are you all 

taking a look at the—when you are looking at that job loss, are you 

taking a look at the benefit not only in this country but the cost 

of sending those jobs overseas? I mean, one of the things that we 

worry about in my district when people are talking about regulations, is this product is going to be made and sold in the United 

States, the question is whether or not it is made in the United 

States or whether or not it is made in China or some other country 

where they don’t have these regulations, and so when you are looking at this, my question to you is, are you looking at what other 

nations are doing? Because if we having a small benefit but we are 

sending the job overseas and we are still going to get the product 

but now instead of having the jobs we have gotten a small benefit 

and no jobs, and do you all take that into account when you are 

looking at these regulations, and particularly the EPA? 

Mr. SUNSTEIN. Yes. We had in our 2010 report to you all, our annual report to Congress, a detailed discussion of the risk of job loss 

from regulations that might send jobs overseas, and we continue to 

be very focused on that risk. 

Mr. GRIFFITH. Well, I understand that, but are you marrying the 

two concepts? OK, we are worried about sending jobs overseas but 

are you also looking at what is the net benefit to the United States 

and then are we looking at what is the net benefit in the world environment? Because if the benefit is, is that we are going to clean 

up the air a little bit but we are sending all the jobs to China 

64 

where they won’t even have the regulations we currently have, 

aren’t we in effect, if we aren’t marrying those two, so question 

number one of this would be, are we marrying them, and number 

two is, are we in effect making the environment of the world worse 

in many ways if we send these jobs offshore where they won’t follow the same rules that we have? 

Mr. SUNSTEIN. That is a great question. It is a fabulous question, 

and it has been raised in the context of some rules where it may 

be that the environment, the world environment is actually worse 

off as a result of what we do. Our basic source of what we should 

consider and lay out is legal requirements, so it may be that some 

of the environmental harms done elsewhere in the world aren’t 

really legally relevant. They are not part of the statutory apparatus 

under which we are operating. And thank you for letting me elaborate a bit on this, but if you had asked me a yes or no question, 

I would have said with slight embarrassment because it is too simple, but I would have said yes. 

Mr. GRIFFITH. And let me ask this because it has just been troubling me, and you have heard these questions before from some of 

the other members about the EPA. Its spokesman has said that 

they don’t think that this will affect them, in essence, and you have 

made it very clear that yes, the President’s Executive order does 

apply and that you all are looking at those regulations as well but 

clearly somehow they got the word they didn’t. Do you know 

whether or not there was a private ‘‘get out of jail free’’ card or a 

wink and a nod that would say that they don’t have to—we are 

going to come look but don’t worry, everything is going to be OK? 

Mr. SUNSTEIN. I am confident there was no wink or nod or side 

conversation. 

Mr. GRIFFITH. All right. I yield the rest of my time back, Mr. 

Chairman. 

Mr. STEARNS. I thank the gentleman. 

Mr. Terry is recognized for 5 minutes. 

Mr. TERRY. Thank you, Mr. Chairman, and I appreciate you 

being here today. It has been helpful. 

First of all, I want to comment on a couple of things from three 

of my colleagues on the other side. Do you believe that this side 

of the aisle are regulatory anarchists and want toxic materials 

thrown into rivers and—— 

Mr. SUNSTEIN. If I may say, I think the questions—it is an honor 

to talk with any of you about these things, and the questions have 

been excellent and you deserve an answer, so I see no evidence 

of—— 

Mr. TERRY. And you have done well in that area. Let me follow 

up one question from Mr. Markey. Do you think banning all use 

of fossil fuels would yield positive health for human beings? 

Mr. SUNSTEIN. All things considered, no. 

Mr. TERRY. What do you mean by, all things considered? I mean, 

would it be healthier for our people if there were no fossil fuels 

used? 

Mr. SUNSTEIN. On one dimension, it would be healthier because 

the pollution would go down but the economic hardship would be 

unhealthy. 

65 

Mr. TERRY. And balance is the issue here, so we can’t deal in extremes is my point. 

Mr. SUNSTEIN. That is right. 

Mr. TERRY. Cost-benefit analysis is appropriate. And the President’s Executive Order 13563 includes a cost-benefit analysis, correct? 

Mr. SUNSTEIN. Yes. 

Mr. TERRY. And you testified at the beginning that his Executive 

order does not apply to independent agencies? 

Mr. SUNSTEIN. That is correct. Following President Reagan’s 

lead, really—— 

Mr. TERRY. Well, yes, it doesn’t. So the FCC—I am vice chairman 

of Communications and Technology, so my focus is with the FCC. 

So the Executive order does not apply to the FCC? 

Mr. SUNSTEIN. It does not. 

Mr. TERRY. And—— 

Mr. SUNSTEIN. In the small business memorandum, the President requests that the independent agencies comply with the—— 

Mr. TERRY. And has the FCC said they will comply to that order? 

Mr. SUNSTEIN. We have not heard. 

Mr. TERRY. OK. And in that regard, we have talked about, or you 

mentioned that the Executive order would help the Administration 

reach that cost-benefit analysis where you weigh both sides, so do 

you feel as you sit here today in your position, not as a law review 

author but in your capacity today that that would beneficial for the 

Administration if the Executive order would apply to the independent agencies? 

Mr. SUNSTEIN. I believe that cost-benefit analysis is a helpful tool 

for any government actor, and in that sense, I believe that its use 

by the independent agencies would be informative. 

Mr. TERRY. Would it be helpful to you in determining whether 

to give advice and counsel from OMB on behalf of the Administration through those agencies? 

Mr. SUNSTEIN. We are very respectful of the independence of the 

Federal Reserve, the FCC, the FTC, which have independence as 

a matter of legal authority. It would be helpful to us, I will tell you 

in one domain that is exceedingly important though slightly technical. We provide annual reports to you all on the costs and benefits of regulation. You have asked us to provide information on the 

costs and benefits of regulations by the FCC, the FTC, all of the 

independents. More often than not, we don’t have anything to tell 

you because there isn’t a cost-benefit analysis, and—— 

Mr. TERRY. I would appreciate it. Is there a separate of powers 

or constitutional issue here in your view? 

Mr. SUNSTEIN. There is certainly an issue in the sense that the 

President’s legal authority over the independent agencies has occupied many less than fascinating pages of law reviews. 

Mr. TERRY. But can that be resolved by congressional action or 

is there are still in your opinion—— 

Mr. SUNSTEIN. You could resolve it. 

Mr. TERRY. I know you are not a Nebraska graduate so we have 

to question your academic history, but nonetheless, in your esteemed opinion. 

66 

Mr. SUNSTEIN. I think the professors at the University of Nebraska would agree that whether the independent agencies are 

subject to presidential control is ultimately up to Congress. 

Mr. TERRY. So congressional authority would be necessary. Is 

that something that the President would request of us? 

Mr. SUNSTEIN. I am not aware that the President has a view on 

that issue. 

Mr. TERRY. And the independent agencies still have to provide 

regulatory plans? 

Mr. SUNSTEIN. That is correct. 

Mr. TERRY. Did the FCC provide you a regulatory plan that included net neutrality in 2010? 

Mr. SUNSTEIN. I believe so. I know they provided a plan but I 

don’t recall its exact ingredients. 

Mr. TERRY. My time is—would you submit that for the record? 

Mr. SUNSTEIN. I would be delighted. 

Mr. TERRY. Thank you. 

Mr. STEARNS. Mr. Terry’s time has expired, and the gentleman 

from California, Mr. Bilbray, is recognized. 

Mr. BILBRAY. Thank you. 

Mr. Sunstein, last night the President proposed building a highspeed rail system in America that would cover 80 percent of the 

people and do it within 25 years. Do you believe under existing regulatory realities that that is possible? 

Mr. SUNSTEIN. As I noted, the OIRA lane is narrow. We review 

existing regulations, so that is beyond my authority and my knowledge base. 

Mr. BILBRAY. OK. Let me just say, as somebody who has built 

a rail system, I think that is where you need to—people like yourself need to be able to address that issue. When the President proposes something and it is not just money, is it legal to do it? And 

as somebody who has built a rail system, my opinion, of somebody 

who has actually done it, is that no, it is not legally possible under 

existing regulatory structure to build the system that the President 

proposed, which places all of us in the challenge of, do we not only 

talk about how much it spends but how much regulatory reform we 

need to make it possible? Do you have any experience in implementing projects such as transit, such as sanitation, such as building a factory? Do you have any experience in going through the 

regulatory process as a participant of that process? 

Mr. SUNSTEIN. Any citizen has at least some experience in navigating the regulatory process, but my own experience with the regulatory process has been a participant over the last 2 years in making sure that the burdens to which you refer are as streamlined 

and navigable as possible, and the most important part of my experience in that domain, something that hasn’t gotten much publicity—I hope it is an answer to your question—is that we quietly 

asked every agency of the Federal Government including the independent agencies for burden reduction—— 

Mr. BILBRAY. Whoa, whoa, whoa. See, you are asking about the 

process and you are doing it as a regulatory member. I am asking 

you, though, have you been the applicant, have you personally been 

through the gauntlet or have you observed it from an administrative point of view? 

67 

Mr. SUNSTEIN. Does my dad count? My dad had a small construction company. 

Mr. BILBRAY. No, your dad doesn’t count. We don’t allow crime 

of blood or benefits of blood on this issue. 

Mr. SUNSTEIN. My own career has not been navigating regulatory 

processes but I am trying to make them easier for people who do. 

Mr. BILBRAY. As somebody who has been on both sides, this is 

where I see a real problem. If you haven’t walked the mile, if you 

haven’t gone through the frustration, if you haven’t seen the obstructionism, you really don’t understand how to correct the problem appropriately, and I think you and I would agree if the plumbing in your house was backed up, you would not call a doctor or 

a lawyer to address that issue, and the fact is—I would ask you 

a question. Let me back off and say this. Do you believe there are 

environmental laws on the books today that are hurting the environment with their enforcement? 

Mr. SUNSTEIN. Well, I do believe there are environmental laws 

on the books today that can be significantly improved from both 

the economic and environmental standpoint. 

Mr. BILBRAY. My question is, do you believe that there are environmental regs on the books today that their enforcement is actually hurting the environment rather than helping it? 

Mr. SUNSTEIN. It would be most surprising if the answer weren’t 

yes for at least some. 

Mr. BILBRAY. OK. Then my question to you is, when we get into 

these review of assuming that the law’s intention is actually being 

fulfilled, wouldn’t you agree that that is a wrong assumption to 

make from the get-go, that laws’ intentions are assumed to be effective rather than questioning are they effective so that there is 

a burden of proof of existence of those laws need to consistently be 

tested for their effectiveness and efficiency? 

Mr. SUNSTEIN. Well, the President gave a clear yes answer in the 

Executive order which said we need to measure the actual results 

of regulations and the look-back is intended to do that. 

Mr. BILBRAY. OK. Do you know what the reductions for vehicle 

was projected with the new environmental regs on auto manufacturers? 

Mr. SUNSTEIN. The reduction per vehicle? I don’t have the number. The reduction of emissions per vehicle? 

Mr. BILBRAY. Yes. What was the goal with that reg? That is a 

pretty big reg. We ought to know what the number was. 

Mr. SUNSTEIN. Per vehicle? I know that the number—— 

Mr. BILBRAY. OK. I will give you per vehicle or fleet reduction. 

Mr. SUNSTEIN. Well, the emission reduction? 

Mr. BILBRAY. Yes. 

Mr. SUNSTEIN. I don’t have the exact number. 

Mr. BILBRAY. I am just asking for a percentage. 

Mr. SUNSTEIN. The goal is about 36.5 miles per gallon. 

Mr. BILBRAY. And what percentage is that a reduction they are 

looking at? 

Mr. SUNSTEIN. We would have to do a little arithmetic to get it 

right. 

Mr. BILBRAY. OK. What if I told you that scientists are already 

telling us that we can reduce emissions and auto emissions by 22.6 

68 

percent and Washington has done nothing to consider that cost-effectiveness program while it is putting burdens on the production 

of automobiles in this country? 

Mr. SUNSTEIN. If I may ask, what is the cost-effective program 

you are—— 

Mr. BILBRAY. The cost-effective program is for us to go back and 

look at traffic control operated by government that is inappropriate. 

Mr. SUNSTEIN. Oh, we are interested in any method that is costeffective, cost-justified, to make this situation—— 

Mr. BILBRAY. Wouldn’t that be the kind of savings that we need 

to do more of with our cost-effective analysis? 

Mr. SUNSTEIN. It sounds like something very much worth investigating, yes. 

Mr. STEARNS. I thank the gentleman, and I ask unanimous consent to let Mr. McKinley ask questions. He is on the full committee 

but he is not on the subcommittee. Without objection, so ordered. 

Mr. McKinley, thank you for taking the time to come down. You 

are recognized for 5 minutes. 

Mr. MCKINLEY. Thank you. Thank you, Mr. Chairman. 

Thank you for being here. I have a series of questions more specific, and they deal with the Spruce Mine in West Virginia. You are 

familiar with that? 

Mr. SUNSTEIN. That is not something—— 

Mr. MCKINLEY. Can you give me some volume, please? 

Mr. SUNSTEIN. OK. Sorry. That is not something within our purview. We review regulations and regulatory actions. I believe what 

you are pointing to isn’t something that is within the domain of the 

Office of Information and Regulatory Affairs. 

Mr. MCKINLEY. But this was a retroactive veto. Are you aware 

of that? 

Mr. SUNSTEIN. I have a recollection from newspaper accounts, 

but this isn’t something within our authority. We do look at rules 

that have effects in this area but what you are referring to, I don’t 

believe is a regulatory action under Executive Order 12866. 

Mr. MCKINLEY. Were you aware of this veto prior to it happening? 

Mr. SUNSTEIN. No. 

Mr. MCKINLEY. You were not aware? 

Mr. SUNSTEIN. No. 

Mr. MCKINLEY. Do you have any idea why the EPA came to that 

decision? 

Mr. SUNSTEIN. This is something which would be good to engage 

the people who made the decision for their explanation. 

Mr. MCKINLEY. Were you aware that the EPA has made this determination to do it retroactive based on some new science? 

Mr. SUNSTEIN. Because this wasn’t regulatory action under 

12866, if I am following, this wasn’t something that we saw in advance in any way. 

Mr. MCKINLEY. Do you think that it is something that they 

should have checked with you about before they embarked on 

something that was so draconian to West Virginia? 

Mr. SUNSTEIN. Well, one thing I will say which is that in the regulatory domain, anything that is draconian for West Virginia or 

69 

anything else is of keen concern to us, but that thing had better 

be under the new Executive order as under the old a regulatory action within the meaning of both documents, and so I wouldn’t want 

to comment on the decision or the process because my understanding is that this was not something that is subject to our review. 

Mr. MCKINLEY. But you have enough awareness of it, so now— 

and the last question has more to do with, is it possible that if the 

regulatory bodies think that they can do this retroactively to a specific site in West Virginia, it is only in the Appalachian district 

they are doing this in the mines and they have applied it—the first 

application has been in the mines in West Virginia. If they feel 

they have the jurisdiction to be able to do that, could they not also 

do that in other markets like, for example, the chemical industry? 

Mr. SUNSTEIN. What I would say in our domain is that rulemaking is not retroactive. Actually, the Supreme Court has said 

that rulemaking is presumed not to be legitimately retroactive and 

that under the President’s new Executive order, not only are rules 

not retroactive but they also must be preceded by a period of public 

comment so stakeholders can see it. Not only that, the agency is 

supposed to engage stakeholders including those who would be adversely affected before they even propose a rule. So that is our policy with respect to rulemaking. 

Mr. MCKINLEY. Do you think that this was a violation then if 

they made this retroactive? 

Mr. SUNSTEIN. Well, as I say, this is not our lane or our area so 

I wouldn’t want to speak to it absent authority or a full account. 

Mr. MCKINLEY. Do you think if they—if rulemaking can occur 

like this in a retroactive fashion directed to the coal industry, 

would it not also apply to petroleum, chemical, other industries as 

well? 

Mr. SUNSTEIN. The Supreme Court said in a decision a few years 

ago retroactivity is disfavored, and to answer that question, I want 

to know what exactly was the situation here and whether there 

was something unique to it that justified the action and whether—— 

Mr. MCKINLEY. From what I understand, sir, there was new 

science introduced but that new science was funded by the EPA. 

The study was funded by the EPA. I don’t know whether that 

would—I am an engineer. I don’t know that that would necessarily—if I fund something whether I am—that is new science. 

That is bolstering my cause. 

Mr. SUNSTEIN. I greatly appreciate the question, and with your 

indulgence I would want to stay away from an area that I don’t 

have authority over and that I haven’t studied. I would say that 

with respect to the scientific issue generally, under section 5 of the 

new Executive order, there is strong emphasis on objective science 

and scientific integrity, and that is something in the rulemaking 

area which is our domain that we are taking exceedingly seriously. 

Mr. MCKINLEY. Since you have heard of this now, are you going 

to look into it? 

Mr. SUNSTEIN. If you would like me to, I would be—— 

Mr. MCKINLEY. I would love to have you look into it. 

70 

Mr. SUNSTEIN [continuing]. Delighted to have you put in contact 

with the people who have—— 

Mr. MCKINLEY. I would like to know more about what the repercussions of this are. Thank you very much. 

Mr. SUNSTEIN. And thanks to you. 

Mr. STEARNS. I thank the gentleman. We are going to go a second round of questions. I ask for your help here. It is just a few 

more and then—— 

Mr. SUNSTEIN. Are you asking me yes or no questions? 

Mr. STEARNS. Say again? 

Mr. SUNSTEIN. Are you going to ask me yes or no questions, Mr. 

Chairman? 

Mr. STEARNS. I try. There is something here I want to ask you. 

It is a basic question. How many new government regulations have 

been enacted since your appointment? 

Mr. SUNSTEIN. I believe the number of final regulations is going 

to be approximate. 

Mr. STEARNS. No, I know. 

Mr. SUNSTEIN. It is about 500. 

Mr. STEARNS. Five hundred. OK. And do you perhaps have any 

idea how many new regulations will be necessary because of the 

new health care bill and because of the new financial service bill? 

Mr. SUNSTEIN. I don’t have that number. I would say that our 

number—— 

Mr. STEARNS. If you could venture a guess, that would be really 

fine. 

Mr. SUNSTEIN. I wouldn’t want to venture a guess because there 

is a fact of the matter, and one doesn’t want to guess about things 

when the fact of the matter is not difficult to find. 

Mr. STEARNS. I am just being a little humorous. I will give you 

a range. Over 5,000 for health care? 

Mr. SUNSTEIN. It would surprise me if it is that high. 

Mr. STEARNS. And over 5,000 for the financial bill? 

Mr. SUNSTEIN. It would surprise me if it is that high. 

Mr. STEARNS. OK. Earlier I asked you this question and you said 

yes. The director of OMB produced a set of recommendations for 

a new Executive order within 100 days of the President’s January 

30, 2009 directive. That means that the OMB recommendations 

were sent to the President around May 2009. I thought you said 

yes. Is that correct? 

Mr. SUNSTEIN. Yes. 

Mr. STEARNS. But the new Executive order wasn’t issued until 

January 18, 2011—I had staff check that out—after the election. So 

your yes doesn’t seem to comply with the facts. 

Mr. SUNSTEIN. Ah, OK. No, what the President asked for in his 

memorandum to which you point, the early one, was not a new Executive order for issuance. It was recommendations for a new Executive order, and what we did was to run processes for a significant 

period under the Clinton Executive order under which President 

Bush also operated and acquired experience. We had a public comment period. We got a lot of comments from affected stakeholders, 

some from Members of Congress, there were informal and formal 

communications, and the process of acquiring information, learning 

from the agencies and from our own processes what works well and 

71 

what doesn’t ran its course such that we were able to issue the Executive order last week. 

Mr. STEARNS. In your testimony today, several times you mentioned that ‘‘retrospective’’ review will be done of regulations. It 

hasn’t been defined in my mind: when does that begin? Does it include regulations issued during the Obama Administration or are 

you going back to the Bush Administration? Are you going back to 

the Clinton Administration? Maybe you might define what ‘‘retrospective’’ means. 

Mr. SUNSTEIN. The Executive order says significant regulations 

that are on the books so everything is fair game. 

Mr. STEARNS. How far does that go back, in your mind? 

Mr. SUNSTEIN. It could go back to the 1920s if there is a regulation that is costly and not helping people. 

Mr. STEARNS. It could go back to FDR? 

Mr. SUNSTEIN. It certainly could go back to FDR. Everything is 

fair game. Needless to say, regulations that have been issued within the last weeks and months wouldn’t be the first candidates for 

retrospective review because they were reviewed very recently, but 

we are eager to get ideas from you, Mr. Chairman, affected stakeholders, members of the public. We really need your help to identify regulations that should be revisited, and if they are doing harm 

but they are from 1945, then by all means let us revisit it as much 

as we would if they were doing harm in 1982. 

Mr. STEARNS. I commend you. You are the first person from the 

Administration I have heard that said they were willing to go back 

and look at regulations from FDR, so that is quite a statement. 

Now, will this review apply equally to all the agencies or just certain agencies that you are focusing on? I imagine that looking at 

all the agencies would be a mammoth job. 

Mr. SUNSTEIN. As you said, the independent agencies following 

President Reagan’s lead are not covered but all the executive agencies are covered. 

Mr. STEARNS. You are promulgating vehicle fuel efficiency standards. Did the agency consider the cost of additional injuries and 

deaths stemming from the use of lighter vehicles? 

Mr. SUNSTEIN. Yes, that was investigated with great care. 

Mr. STEARNS. When you talk about this retrospective review, how 

are you proposing to bring in the public? The gentleman from West 

Virginia indicated that we had a company that got approval for a 

license and then retrospectively EPA revoked its license. Now the 

company is in jeopardy after investing millions of dollars, and employees will lose their jobs. Who would think that that could happen, especially after the government gave it a license? How are you 

getting the public to interface with you? 

Mr. SUNSTEIN. It is a tremendous question, and we love your 

ideas. I will give you a few preliminary thoughts. One idea we have 

had is that the public has a lot more information than we do about 

what rules are actually doing on the ground. 

Mr. STEARNS. I agree with that. 

Mr. SUNSTEIN. So we need their help. It has happened already 

in this very early time that we have gotten a lot of communication 

from the public. The public has not been silent about rules that are 

causing trouble. I think you can expect in the relatively near future 

72 

one very important Cabinet agency going out to the public and asking for ideas about retrospective analysis, what rules are causing 

trouble. I think you can also expect a high degree of openness both 

with respect to asking for ideas about rules that no longer warrant 

public approval and also for ventilation of the plans, which are due, 

mind you, in 120 days. I would love it if some of those plans would 

beat that deadline and be out to the public before 120 days but my 

expectation is that the plans which will include candidates will be 

made public and there will be a period of comment, and as Chairman Dingell suggested, there is a full process of comment and review as rules get repealed, so that will also involve a high degree 

of public participation. 

Mr. STEARNS. Thank you. My time has expired. 

Dr. Burgess, second round. 

Dr. BURGESS. Thank you, Mr. Chairman. 

In reference to Dr. Gingrey’s question about the regulation that 

went forward without a period of public comment, are you aware 

that there are in fact at least 10 such regulations under the health 

care law, the Patient Protection and Affordable Care Act, at least 

10 such rules that were created without a period of public comment? 

Mr. SUNSTEIN. Yes. What I am aware of is that some laws, and 

this is one of them, have for some rules time constraints that are 

so severe that the only option is to do what is called an interim 

final rule rather than go out for public comment, and that is a result of legal compulsion. What is noteworthy about interim final 

rules, and we have paid a great deal of attention to this, is they 

are interim rules. 

Dr. BURGESS. Well, let me just—you offered just a moment ago 

that you would follow up with us. I actually look forward to you 

joining us again in about 3 months’ time. If you would be willing 

to do that, maybe we could talk about some of the public comment 

that has come in on some of the interim final rules because it is 

important that this process be open and transparent and that people be able to communicate with the regulatory agencies and their 

government. I know I have heard from a lot of providers, hospitals, 

and patients that this is something that they would like to see. 

Mr. SUNSTEIN. Absolutely. I spend a lot of my own time, sad but 

true, on regulations.gov where you can see those comments on interim final rules and I am quite aware that some rules have produced a lot of public interest. 

Dr. BURGESS. I provided to you—I apologize that it wasn’t in the 

briefing binder but something prepared by the Business Council, 

the Business Roundtable, policy burdens inhibiting economic 

growth. Did you have a chance to just glance at that while we were 

at the vote? 

Mr. SUNSTEIN. I did glance at it. 

Dr. BURGESS. And I appreciate you being willing to do that. Of 

course, our purpose here today is to talk about the regulatory burden and what we might do. This paper was prepared, interestingly 

enough, last June at the request of the Obama Administration, difficulty in this economic climate creating jobs, and the Obama Administration asked the private sector, provide us some guidance on 

what the Obama Administration might do to facilitate job creation. 

73 

So I think that was a good idea. The question I have is, why are 

we ignoring some of the more important things that were put forward in that monograph? We have, and I referenced this in my 

opening statement, the new source review aspect that was talked 

about in that paper was concerned about the fact that Texas does 

seem to be singled out for some special attention on taking its flexible permitting process and that other States that are using this 

were not subjected to the same constraints that Texas has been. Do 

you think this is helpful in creating a climate for job creation that 

Texas be singled out in this way? 

Mr. SUNSTEIN. I should say that the document to which you point 

has a lot of concerns and that that has been reviewed carefully by 

relevant officials trying to make sure we do the best we can for the 

country. Singling out any State, in some ways Texas in particular, 

is not a good idea. Everyone should be treated similarly. What I 

would say about the particular example, I will give you my understanding, is that 49 States all complied with the EPA’s permitting 

rule in the sense that—— 

Dr. BURGESS. My time is pretty limited. Let me just ask you a 

more specific question. 

Mr. SUNSTEIN. This was an effort to help people in Texas get permits. In order to go forward, there had to be some permitting process, and the court approved it. 

Dr. BURGESS. Well, that was under the greenhouse gas requirement, but did anyone at EPA consult with the Office of Management and Budget or the White House before moving forward with 

taking over the flexible permitting program under the Clean Air 

Act? 

Mr. SUNSTEIN. That one was something that we were involved in, 

yes, and this was an effort, as I say, to permit people to get permits 

in Texas so they could go forward with construction, etc. That is 

my understanding. 

Dr. BURGESS. And what is the status of that today? 

Mr. SUNSTEIN. The court has approved it. 

Dr. BURGESS. Let me ask you a question that is in a different direction. Do you think there should be any legislative effort to regulate broadcasting in the interest of democratic principles? 

Mr. SUNSTEIN. What I would say is that as the Administrator of 

the Office of Information and Regulatory Affairs, I am focused on 

the Paperwork Reduction Act and on the recent Executive order 

and Small Business Memorandum. I think you might be referring 

to some academic writing that might have had my name attached 

to it but academic speculations by anyone including yours truly 

just aren’t relevant to the current job. 

Dr. BURGESS. But still, there is some talk about people who want 

to bring back the Fairness Doctrine and some people do see that 

as a restriction on free speech. Would that be something that would 

come through your regulatory agency if that occurred? 

Mr. SUNSTEIN. No, we have no role, and I am on record as opposing the Fairness Doctrine. 

Dr. BURGESS. Thank you, Mr. Chairman. I will yield back. 

Mr. STEARNS. Mr. Griffith, you are recognized for 5 minutes. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

74 

If I could go back to some of Congressman McKinley’s questions 

relating to the mine closure in West Virginia, and I know that 

what actually may have happened may not be under your watch, 

but wouldn’t it be true under the Executive order that you would 

need to look at that? Because as I understood the President’s comments last night in regard to the salmon, that one of the things 

that he wants to do is to make sure we don’t have agencies having 

jurisdiction over what most people would think would be the same 

thing, and in that particular case, would you not agree with me 

that it didn’t meet the circumstances? The facts didn’t meet with 

what the President has said, even in section 1 of his Executive 

order because for that mine, it didn’t promote predictability and reduce uncertainty, it created more uncertainty for everybody in central Appalachia because of that ruling. Would you not agree? 

Mr. SUNSTEIN. I appreciate the question. I am reluctant to say 

anything critical of colleagues in any agency when I just don’t 

know the underlying situation and it isn’t something within our authority. I can say that EPA in the rulemaking domain has been extremely careful and scrupulous about ensuring that there is public 

comment before it goes forward with rules, and we had an earlier 

colloquy about the EPA’s insistence that—— 

Mr. GRIFFITH. But wouldn’t you agree with me that when the 

Army Corps of Engineers signs off on it and says everything is fine 

and then some 18 months to 2 years later the EPA comes in and 

yanks the licenses out, that that does not promote predictability 

and does promote uncertainty? 

Mr. SUNSTEIN. I would need to know more about the particulars. 

I certainly agree with your emphasis on predictability and certainty, which are upfront in the new Executive order. 

Mr. GRIFFITH. And wouldn’t you agree that at least on the face 

of it that such action is not plain and easy to understand? 

Mr. SUNSTEIN. Well, I am very concerned about clarity. The Plain 

Writing Act is something that is within our domain. We recently 

issued guidance on it. But I have learned from my period in Washington that things that are on the face a certain way sometimes 

aren’t fully a certain way and so if you will forgive me, I like to 

be cautious before speaking on that. 

Mr. GRIFFITH. Well, I understand being cautious but you can appreciate that the uncertainty that has now been created in the entire region about even attempting to invest money in opening up 

a new mine that has been caused by the actions that were taken, 

and isn’t that something that under the Executive order that you 

all should be looking at? 

Mr. SUNSTEIN. The Administration as a whole is committed to 

promoting certainty, so to look at something that is raising concerns along that front is completely appropriate. 

Mr. GRIFFITH. All right. I thank the gentleman. 

Mr. STEARNS. I thank the gentleman. 

I now recognize the gentlelady, Ms. DeGette. 

Ms. DEGETTE. Thank you very much, Mr. Chairman. 

Mr. Sunstein, I really want to thank you for coming and testifying today. I found your testimony very illuminating and helpful, 

and I think this subcommittee is going to want to have ongoing 

conversations with you. 

75 

You know, we all agree that unnecessary regulations should be 

repealed and new regulations should not be overly burdensome on 

business or anybody else. I mean, that is a fundamental. Listening 

to the questioning on the other side of the aisle today, I kind of realize that there is this assumption that may have some vague historic basis but certainly with this new Administration and with my 

colleagues on the Democratic side of the aisle, we don’t believe in 

overregulation and we don’t believe that regulations should be burdensome, especially right now with unemployment still over 9 percent. We need to make sure that regulations are sensible, that they 

protect the public health and wellbeing and are not overly burdensome. 

I was particularly interested—and I think, so there is some 

thinking since there is a Democratic Administration, we are just 

overregulating, but in fact, when you look at the actual facts and 

statistics, this is not the case. I was particularly interested in your 

comment earlier that the total number of rules in the first 2 years 

of the Obama Administration is comparable to the number of rules 

in the last 2 years of the Bush Administration, so about the same. 

And if you look at the number for the EPA specifically, which 

seems to be a great concern on the other side of the aisle, the comparison between the Administrations is very noteworthy. The EPA 

has finalized or proposed fewer Clean Air Act rules over the last 

21 months than in the first 2 years of either President George W. 

Bush’s Administration or President Clinton’s Administration. President Bush finalized or proposed 146 Clean Air Act rules while 

president Clinton issued only 115, and President Obama has issued 

just 87, and frankly, some of the Obama Administration’s rules, as 

you can attest, are trying to clean up the mess left by the previous 

Administration. 

So let me give an example of that. A federal court threw out 

President Bush’s rule to cut toxic mercury emissions from power 

plants in February 2008 because frankly, it was illegal under statute. So what it would have done would have been to let infants and 

children vulnerable to mercury pollution. So President Obama and 

his Administration were then forced to go back to the drawing 

board and repromulgate those rules because they were illegal the 

first time. 

And so frankly, I think that, you know, Mr. Stearns and I are 

both eager to talk about regulations that might be burdensome and 

we are eager to work with you and the Administration to do that. 

We were just saying that we would welcome suggestions by members on both sides of the aisle and we would love to sit down and 

meet with you and your staff to propose anything that we think is 

overly burdensome because frankly, we are not facing a regulatory 

avalanche. These are safeguards for the American public, but I 

know that you and your staff intend to promulgate them in a way 

that is the least burdensome possible. So I just wanted to say that. 

And Mr. Chairman, I just wanted to ask the Majority a question, 

and maybe you know the answer but if not, maybe your staff or 

somebody else can tell me. The Republican have said several folks 

on your side of the aisle have said that an EPA spokesman said 

that the Executive order won’t matter with respect to the EPA regulations, and I don’t know who that—we are unaware of any stateVerDate Nov 24 2008 12:27 Apr 25, 2011 Jkt 037690 PO 00000 Frm 00081 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-1 012611\112-1 CHRIS
76 

ment like that on this side of the aisle, and I am wondering if your 

staff or the members who said that could tell us who that spokesperson was so that we could set the Administration straight that 

the Executive order is going to apply to all regulations of agencies 

within the purview of Mr. Sunstein and his staff. 

Mr. STEARNS. We would be glad to provide it for you. It is in The 

Hill, January 18. 

Ms. DEGETTE. Thank you. And what is the name of the person? 

Mr. STEARNS. Betsaida Alcantara, and the statement said that 

the agency has already been following many of the protocols formalized Tuesday, and so we would be glad to give The Hill article 

to you. 

Mr. SUNSTEIN. May I—— 

Ms. DEGETTE. Wait a minute. This doesn’t say that the Executive order doesn’t apply to EPA regulations, and Mr. Chairman, I 

would ask unanimous consent to submit this article for the record. 

Mr. STEARNS. I would be glad to, by unanimous consent. 

Ms. DEGETTE. Thank you. 

[The information appears at the conclusion of the hearing.] 

Mr. STEARNS. But I think we have given you a name. It is your 

interpretation. 

Ms. DEGETTE. Yes, you didn’t, but it doesn’t say anything about 

the Executive order and whether it applies. 

Mr. STEARNS. That is your interpretation. 

Mr. SUNSTEIN. May I make one brief addition to your excellent 

remarks? 

Mr. STEARNS. Sure. 

Mr. SUNSTEIN. Which is, if you look at the most expensive fiscal 

year of the last ones, it hasn’t been 2010, it hasn’t been 2009, it 

was 2007. 

Mr. STEARNS. OK. The gentlelady’s time has expired. 

OK. Let me close. Mr. Sunstein, thank you for your patience and 

forbearance while we went and voted. Let me just ask you a question to clarify what Ms. DeGette was talking about. In the first 2 

years of the Bush Administration, how many regulations were 

issued compared to the first 2 years of the Obama Administration? 

Mr. SUNSTEIN. We will have to get that number. 

Mr. STEARNS. OK. That is important because I think what she 

is alluding to—I think those facts are now apples and apples instead of apples and oranges. 

Let me also point out that when Ms. DeGette talks about deregulation, on this committee we had a cap-and-trade bill we passed 

which the Senate didn’t agree with. We had a health care bill pass. 

The Congress under the Democrats’ majority had a financial bill. 

They also had bailouts. And so during that entire process, when 

you pass those four major pieces of legislation, you are going to 

have more regulation. And this is what I would like to conclude 

with. You had indicated that there should be a comment period for 

the citizens of this country to tell you and OMB that these regulations are killing them, and you are saying that you are willing to 

listen. So can I suggest that we sit down with you and we notify 

our members both on the Democrat and Republican side that you 

have made this very auspicious, generous offer to take seriously 

some of the problems? Now, the gentleman from West Virginia 

77 

pointed out that this company has lost its license after getting approved by EPA and that is a problem. That is losing jobs. That is 

exactly what I think the President is talking about. So can we have 

your agreement then today that you would sit down with this committee at a later date, not in a hearing but an opportunity where 

Ms. DeGette and I can present you with regulations that we think 

indeed are hurting this country and should be repealed? 

Mr. SUNSTEIN. I would welcome that. 

Mr. STEARNS. Well, I think you suggested the idea, so we just 

want to follow up on it. 

Let me conclude by saying members have 10 days to submit 

questions for the record, and if there is no further comment, the 

subcommittee is adjourned, and thank you. 

[Whereupon, at 1:19 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

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Æ 


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