U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

88–281 PDF 2014

S. Hrg. 113–371 

A MORE EFFICIENT AND EFFECTIVE GOVERNMENT: 

IMPROVING THE REGULATORY FRAMEWORK 

HEARING 

BEFORE THE

SUBCOMMITTEE ON THE EFFICIENCY AND 

EFFECTIVENESS OF FEDERAL PROGRAMS AND THE 

FEDERAL WORKFORCE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

MARCH 11, 2014 

Available via the World Wide Web: http://www.fdsys.gov 

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEIKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

GABRIELLE A. BATKIN, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

KEITH B. ASHDOWN, Minority Staff Director 

LAURA W. KILBRIDE, Chief Clerk 

LAUREN CORCORAN, Hearing Clerk 

SUBCOMMITTEE ON THE EFFICIENCY AND EFFECTIVENESS OF 

FEDERAL PROGRAMS AND THE FEDERAL WORKFORCE 

JON TESTER, Montana, Chairman 

MARK L. PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

ROB PORTMAN, Ohio 

RON JOHNSON, Wisconsin 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

TONY MCCLAIN, Majority Staff Director 

BRENT BOMBACH, Minority Staff Director 

KELSEY STROUD, Chief Clerk 
(III) 

C O N T E N T S 

Opening statement: Page 

Senator Tester .................................................................................................. 1 

Senator Portman .............................................................................................. 10 

Senator Pryor .................................................................................................... 11 

WITNESSES 

TUESDAY, MARCH 11, 2014 

Hon. Angus S. King, Jr., A United States Senator from the State of Maine ..... 3 

Hon. Howard Shelanski, Administrator, Office of Information and Regulatory 

Affairs, Office of Management and Budget ........................................................ 13 

Hon. C. Boyden Gray, Founding Partner, Boyden Gray & Associates, PLLC .... 23 

Katherine McFate, President, Center for Effective Government ........................ 25 

Michelle Sager, Director, Strategic Issues, U.S. Government Accountability 

Office ..................................................................................................................... 26 

ALPHABETICAL LIST OF WITNESSES

Gray, Hon. C. Boyden: 

Testimony .......................................................................................................... 23 

Prepared statement with attachment ............................................................. 42 

King, Hon. Angus S. Jr.: 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 33 

McFate, Katherine: 

Testimony .......................................................................................................... 25 

Prepared statement .......................................................................................... 94 

Sager, Michelle: 

Testimony .......................................................................................................... 26 

Prepared statement .......................................................................................... 104 

Shelanski, Hon. Howard: 

Testimony .......................................................................................................... 13 

Prepared statement .......................................................................................... 39 

APPENDIX 

Letter submitted by Ms. McFate ............................................................................ 123 

Statement for the Record submitted by the Business Roundtable ...................... 125 

Responses to post-hearing questions for the Record: 

Mr. Shelanski .................................................................................................... 138 

Ms. McFate ....................................................................................................... 156 

Ms. Sager .......................................................................................................... 158 

(1) 

A MORE EFFICIENT AND EFFECTIVE 

GOVERNMENT: IMPROVING THE 

REGULATORY FRAMEWORK 

TUESDAY, MARCH 11, 2014 

U.S. SENATE,

SUBCOMMITTEE ON THE EFFICIENCY AND EFFECTIVENESS OF

FEDERAL PROGRAMS AND THE FEDERAL WORKFORCE, 

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS,

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:32 p.m., in room 

SD–419, Dirksen Senate Office Building, Hon. Jon Tester, Chairman of the Subcommittee, presiding. 

Present: Senators Tester, Pryor, McCaskill, and Portman. 

OPENING STATEMENT OF SENATOR TESTER 

Senator TESTER. Good afternoon, and I will call this hearing of 

the Subcommittee on Efficiency and Effectiveness of Federal Programs and the Federal Workforce to order. 

Senator Portman, the Ranking Member, will be here shortly. He 

is en route. I thought I would start with my opening statement, 

and then hopefully he will be here by the time I finish it. And then 

we will hear from the good Senator from Maine, Angus King, someone who has been dealing with this issue for a long time. 

Today’s hearing is entitled, ‘‘A More Efficient and Effective Government: Improving the Regulatory Framework,’’ and I want to 

welcome all the witnesses that are going to testify on the three 

panels today. I want to thank them for joining us and sharing their 

perspective on this important issue. 

Now, some folks would think that every regulation that comes 

down the pike is a bad regulation, just the Federal Government’s 

latest attempt to stifle economic growth or expand its reach. I certainly do not agree with every regulation that has come out in this 

or previous Administrations, but I do believe that some have gone 

too far, although I also believe that some have not gone far enough. 

And I believe that far too often agencies issue or proposed a onesize-fits-all regulation that stacks the deck against potentially 

smaller businesses, in my case family farms and ranches. 

Most recently I expressed my strong opposition to a proposal by 

the Food and Drug Administration (FDA) that would prevent small 

farmers from selling their products at farmers markets, and that 

treats groups of small farms like large corporations. Senator Hagan 

from North Carolina and I wrote an amendment to the Food Safety 
2 

and Modernization Act to make sure that small farmers selling directly to local consumers would not face the same regulatory burden and scrutiny as the large agribusinesses with nationwide supply chains and much higher risks. However, the FDA’s first draft 

rules were not in the spirit of the Tester-Hagan amendment and 

would have forced many small producers to close up shop, despite 

the fact that it was large producers that caused the food safety concerns in the first place. 

Another example is a proposed United States Department of Agriculture (USDA) rule that would turn over the role of government 

inspectors to company employees and allow facilities to process 175 

chickens per minute. That is three per second, and a 25-percent increase. This rule would further advantage the biggest poultry 

plants and disadvantage the smaller facilities. In these two cases, 

you have one agency I believe overregulating the small guys and 

another agency cutting the biggest companies a break. 

But let me be clear. Over the years, regulations have helped keep 

our drinking water clean, they have ensured our food is more sanitary and labeled more accurately, and they have led to dramatic 

improvements in workplace health and safety. While some regulations have grown increasingly irrelevant or costly over time and 

can no longer be justified, there are others that have been on the 

books for years and years but remain just as relevant today as 

when they were passed. For instance, the regulation of rail rates, 

which was initially driven by farmers back in the late 19th Century who faced extraordinary rates when they brought their goods 

to market, and it is still an issue today. 

All you have to do is pick up a newspaper to identify another example or two of potential need for smart regulations, whether it is 

regulations on oil tankers, per the explosion in North Dakota a 

month or so ago, or 8.7 million pounds of diseased meat that may 

or may not have been distributed throughout this country. 

In approaching the topic of regulations from an oversight perspective, I believe it is critical that we seek a better understanding 

of the regulatory process. Why do some rules clear the review process under the 90-day deadline while others get stuck in a pipeline 

for years? How can we bring more transparency and greater efficiency to the process? 

The Administration has launched a lookback initiative to take a 

look at regulations already in place and identify those that are no 

longer relevant and what are some of the lessons we have learned 

from that. How can these lessons be incorporated to improve the 

regulatory process moving forward? These are some of the questions that we will be asking today. 

It is great to be joined by Ranking Member Portman, and it is 

your turn for your opening remarks. 

Senator PORTMAN. Thank you, Mr. Chairman. Could I ask unanimous consent if I could do my statement in whole after we hear 

from our colleague from Maine? 

Senator TESTER. It is against my better judgment. I should object, but I will not. [Laughter.] 

Yes, absolutely. 

Senator PORTMAN. Before he goes, can I just say quickly, we are 

going to talk, I think, about the permitting legislation and to make 
3 

1The prepared statement of Mr. King appears in the Appendix on page 33. 

the point that this is legislation that is bipartisan, Senator Claire 

McCaskill and others, streamlines and improves the Federal permitting process. Right now a lot of uncertainty, unpredictability 

there. And make the point that last week the House of Representatives did pass that legislation. It is called the Federal Permitting— 

it is also called the Federal permitting bill. It is not precisely like 

our legislation. We think our legislation might be a little better in 

some respects. But it did attract some Democrat support in the 

House, and so just to say I really appreciate Senator King’s willingness to come today and talk about that. 

Senator TESTER. Thank you, Senator Portman. 

Our first panel is Senator Angus King of the great State of 

Maine. Senator King has been a great advocate for commonsense 

reforms that help level the playing field for small businesses. I look 

forward to hearing from him on his ideas on how we can do more 

in that regard. 

With that, Senator King, the floor is yours. 

TESTIMONY OF THE HON. ANGUS S. KING, JR.,1 A UNITED 

STATES SENATOR FROM THE STATE OF MAINE 

Senator KING. Thank you, Mr. Chairman and Ranking Member 

Portman. Wonderful to have an opportunity to talk to you. I think 

this is a very important Subcommittee, and you are doing extremely important work. And what I would like to do is give you 

just a few minutes of my own background as it is relevant to what 

I am going to be talking about. 

I once was introduced at a dinner, and the fellow went through 

my resume, and I got up and said, ‘‘The only conclusion I can take 

from that is that this fellow cannot hold a job,’’ because I have had 

so many careers. I have been a lawyer. I have worked in public 

broadcasting. I have been a developer. I have been an entrepreneur, owned my own business. And I was also Governor of 

Maine for 8 years. And, in fact, when I was Governor, one of my 

primary focuses was on the regulatory process. 

When I was elected, I would say it was fair to say that the most 

controversial and in some cases disliked agency in the State was, 

not surprisingly, our Department of Environmental Protection 

(DEP). Everybody had a story about the problems they had with 

the regulatory process. So I have experienced—and I have also 

been a board member of large companies and small companies, particularly in the financial services field, so I have seen how regulation right now, I think, is far overburdening small community 

banks and financial organizations. 

What I would like to do is just run through very briefly four or 

five principles that I think need to be contemplated when we are 

talking about regulations and regulatory reform. 

Principle Number 1 is we live in a competitive world. Everywhere in the world people are trying to take our jobs. Everywhere 

in the world people are trying to compete with our companies and 

put them out of business, if they can, and take our jobs to their 

country. That means that regulation has to be smart. We do not 

have the luxury of being able to impose regulations that are going 
4 

to impose unnecessary costs on businesses in this country that 

leads to the business and the jobs being shipped overseas. That is 

a constraint that we have to have in the back of our minds at all 

times. We do not have a free range to regulate in any and all fields 

with no regard to what the costs of compliance are and what the 

costs of implementation are, because somebody wants our jobs right 

now, today, all over the world. That is Principle Number 1. 

By the way, just to put a sharp line on that, a lot of people do 

not realize that in the last 10 years, 32 percent of the manufacturing jobs in the United States have been lost—32 percent, 42,000 

factories have closed. Not jobs lost but factories closed. And when 

you lose a third of your manufacturing capacity in one decade, that 

is not evolution. That is not a minor change. That is a revolutionary destructive change, and I think I do not need to testify to 

you gentlemen about the importance of manufacturing. I am not 

saying regulation was necessarily all or a part of that, but the 

point is we are in an economy where we are going to have to compete. We do not own the world market anymore. 

Principle Number 2, regulations have a cost, and not all regulations are created equal. One of the examples is the regulations that 

are currently starting to accumulate—‘‘accrete’’ would be the word 

I would use—on the small financial centers, community banks. 

Androscoggin Savings Bank in Maine did not cause the great crash 

of 2008, but they are being burdened with piles of new regulations 

to issue simple home mortgages. One of the guys, my friend at one 

of the banks, sent me literally a stack of papers 2 feet high of regulations and forms that they have to comply with to do a simple 

home mortgage. That is having very deleterious effects. 

First, it is pushing the smaller banks into the arms of the larger 

banks, which is not exactly what we want to do. We want a lot of 

small institutions. 

Second, it is costing these banks money—I had a compliance officer from one of the community banks approach me on the street 

in Maine just a couple of weeks ago, and she said, ‘‘We are having 

to let go loan officers to hire compliance officers.’’ And this is in a 

community small savings and loan association. 

And, finally, it is having the effect of constraining credit, which 

is something our society needs right now, and these banks are not 

able to make loans for technical reasons because of regulatory reasons, even though they have good reason to believe that the borrower has good character and is able to repay the loan and meets 

any kind of reasonable criteria. 

The other way to look at this—and there are lots of studies—and 

I am sure you have seen them, and in my written testimony I cite 

some of them—where there have been studies of the cost of regulation in a kind of meaningful statistic. And the one that I focused 

on is cost per life saved. A lot of regulations are protective—health 

regulations—and, for example, the analysis was—and this is in my 

written testimony. The regulation of unvented space heaters, which 

are dangerous, is about $100,000 per life saved. I do not think 

many of us would quibble with that as an important regulation. Asbestos occupational exposure limit, about $9 million per life saved. 

The atrazine-alachlor in drinking water standard, $109 billion per 

life saved. And the point being that we have really got to think 
5 

about what the cost versus the benefits are when we impose these 

regulations and that all regulations are not the same. 

Principle Number 3, time is money. Cape Wind, which is applying for a permit to build—I cannot remember how many turbines, 

about 100 turbines in the waters between Nantucket and Cape Cod 

in Massachusetts, has been in the permitting process for 12 years, 

and the developer spent $65 million just to get the permits. Now, 

I do not think there is a system—I just do not know how anyone 

with a straight face can argue that this is a good system. 

Now, we can argue about whether Cape Wind is a good idea or 

not, but some kind of decision should have been made somewhere 

short of 12 years and somewhere short of $65 million, because the 

developer—no rational developer will go to that extreme, and I believe in Cape Wind’s case it is because Jim Gordon just said, ‘‘They 

are not going to beat me,’’ and he decided as a personal matter he 

was going to stay in. But the economics of it are terribly daunting, 

and what we do not see, gentlemen, in these kinds of cases are the 

projects that never get brought forward, the projects that are eliminated and intimidated and excluded because people look at this 

process and say I am not going to put myself in for that, I am not 

going to go through that, or I cannot afford to go through that. And 

our country loses dynamism and loses opportunity, economic opportunity, and jobs. 

One of the problems that we have—and this goes into the time 

is money, and I will talk a little bit about this and why I am announcing today that I am cosponsoring Senator Portman’s bill. We 

have multiple regulators of the same essential thing. I do not know 

the details of the offshore wind project in the Nantucket Sound, but 

I know that we are talking about an offshore wind project in Maine 

that potentially is going to be regulated by the National Oceanic 

and Atmospheric Administration (NOAA), National Marine Fisheries, Coast Guard, U.S. Navy, the Federal Energy Regulatory 

Commission (FERC), and I am sure I am leaving several out. But 

when you have a situation like that where you have six or seven 

different regulators, by definition it is going to take a long time, 

and it is a crapshoot for the developer, because you can go to these 

permitting agencies one at a time, you go through, say, four, get 

your permit, spend $10 or $12 million, and then the fifth one says 

no and you are out of luck. 

One of the things we did in Maine to deal with this problem, we 

created a one-stop shopping process where we had a lead agency, 

said this is the agency that is going to issue the permits, all the 

other agencies have to do their study, take their position, and report in to the lead agency. But the serial permitting is as bad as 

serial killing. It is a form of serial killing, I guess. And I will get 

to that in a minute. 

Principle Number 4, attitude really is everything, and this is 

something we cannot get at through legislation. It would be really 

nice if we could legislate, ‘‘All regulators shall be reasonable, 

thoughtful, and have a positive attitude.’’ I do not think we can legislate that. This is where the Administration comes in. This is 

called leadership and management. And in my experience, you can 

change attitudes within regulatory agencies. We did it with our 

Maine Department of Environmental Protection, but it took active 
6 

management and leadership from the commissioner that I appointed. When I took office in Maine, I was astounded to find—we 

have a 13,000-person workforce. The Governor had the appointment power over about 150 people out of 13,000. But people expect 

the Governor to change everything. And I said, ‘‘How am I going 

to change the DEP when I only can appoint three people?’’ But the 

people I appointed were on a mission, and their mission was to 

make this a user-friendly agency. And they had classes and seminars and worked with the personnel, and that attitude actually 

changed, and some of the very same people that had been so difficult before—and the attitude is: Is the regulator there to help 

solve problems and abide by the law? Or are they there to find 

problems? And that is what is so important, and I cannot stress 

enough what a difference that makes. And that is really not something we can do much about here, but I do think it is a matter of 

the Administration and the management of the Administration 

sending the message—which I did in Maine. I had a very clear 

message to the environmental agencies. I said, ‘‘I want to have the 

toughest environmental standards in the Nation and the most 

timely, predictable, and user-friendly process.’’ 

I do not think there is any inconsistency in those two things, but 

that message has to come from the management of the agency. 

Principle Number 5 I do not need to spend a lot of time on, but 

it is one that sometimes arises: Abuse of the process is not an appropriate regulatory technique. In other words, I am very close to 

the environmental community in Maine. I used to represent them 

at the legislature. I have been a big advocate. I stayed up late last 

night talking about climate change. But I part company with anybody who wants to use the regulatory process in a kind of war of 

attrition just to wear down somebody that wants to do something 

in our society. Projects should be judged on their merits and not 

on who wins protracted legal battles. So those are the principles. 

I have two problems and then two solutions, and I will be quiet. 

I notice, blessedly, my time thing is not running here, so that is 

a good thing. 

No. 1, permitting is generally too costly and the process is too 

lengthy. We did an upgrade of our power grid in Maine where I 

think 96 percent of the project—this was the transmission grid. 

Ninety-six percent of the project was in existing rights-of-way or 

right adjacent to existing right-of-ways. Permitting that project 

took 4 years and cost $200 million. It was about a $1 billion 

project. So almost 20 percent of the cost of the project went into 

permitting, and basically it was, as I say, 96 percent of it was within the existing rights-of-way. 

That is a cost that we are all paying, and the question is whether—do the people of Maine get value for that $200 million? Or was 

this something that could have been done in a more expeditious 

way? They had to go through a regulatory process in 70 towns. One 

town had over 30 meetings. I certainly do not want to be heard at 

this hearing saying I am against local control. I think it is totally 

appropriate. But I think that we need to be thinking about, what 

did the people of those towns in Maine get in exchange for the $200 

million that it cost that project? 
7 

Can we find a way to permit major projects at a cost that is not 

extraordinarily prohibitive and within a reasonable timeframe 

without trampling on the legitimate rights of people who need to 

have their voices heard and contribute to the outcome of the 

project? 

As I mentioned, we did something in Maine, we called it ‘‘onestop shopping.’’ I know that Senator Portman and Senator 

McCaskill have a bill, the Federal Permitting Improvement Act, 

which is establishing a lead agency, and as I understand it, Senator Portman, that is really the function, that is the direction you 

want to move in, a lead agency to coordinate the permitting process 

for major capital projects, those costing more than $25 million. 

I would like to cosponsor that bill. I think that is exactly the direction that we have to go in. And it also has some reform of the 

litigation provisions on the National Environment Policy Act 

(NEPA) suits so the statute of limitations is not 6 years but is a 

more reasonable period of time and gives people a reasonable 

chance to appeal the decisions, but they cannot just wait 6 years 

and let the clock run and thereby cast a pall on the overall validity 

of the permits. 

Major capital projects. I would like you to ask yourselves—and 

I think this is something that we all ought to do. The major piece 

of infrastructure in your State, whatever it is—interState highway, 

hydroelectric project, some major project, power project—ask yourself if that project could be permitted today. And if the answer to 

that question is maybe or no, then that illustrates that I think we 

have a problem in this country, because we cannot have our infrastructure be essentially a nostalgic photograph of what was built 

in the 1950s. We have to be able to improve our infrastructure, and 

we have to be able to do it in a timely and a reasonable cost way. 

Problem Number 2, as I have already touched upon, is what I 

call regulatory accumulation. Regulations tend to have an eternal 

life, and they do not go away. I would commend to you the best 

book I have ever read about Washington. It is now out of print, but 

you can get it at Alibris or you could borrow it from me. It is ‘‘The 

Institutional Imperative: Or How to Understand the U.S. Government and Other Bulky Objects,’’ by Robert M. Kharasch, who was 

a Washington lawyer in the 1970s. It is the most brilliant analysis 

of institutional behavior that I have ever seen, and basically, his 

basic principle, the institutional imperative is that the fundamental function of any institution is to perpetuate itself. And one 

of the examples he uses—it is written like a geometry textbook 

with laws, theorems, theories, and corollaries. One of the laws is 

the iron law of the security office. The iron law of the security office 

is if you create a security office, threats to security will be found. 

And that is an example of this kind of regulatory process. If you 

hire people to regulate, they are going to regulate. That is what 

they are going to do. And we need to find better ways to ensure 

that we revisit regulations on a regular basis. Roy Blunt and I introduced S. 1390, which basically is a Base Realignment and Closure (BRAC) Commission for regulation, and the idea is an independent analysis of regulations to come before the Congress with 

recommendations about whether they should be continued, modified, or eliminated. They would have an expedited process in Con-
8 

gress, and this idea, by the way, came from the Progressive Policy 

Institute (PPI), and it has received quite a bit of positive attention. 

In conclusion, as I said at the beginning, this is a very important 

Committee, a very important topic. I think it is one of the most important that we can do, particularly—I just came from a meeting 

with housing authority directors. We are in an age of zero-sum 

game when it comes to finances. Nobody is getting any more 

money. Therefore, one of the things that we have to look at is 

where we can relieve regulatory burdens to allow people to go further with the funding that they have, whether it is a housing authority, a community bank, or a business. 

So I am delighted to have had the opportunity to meet with you 

this morning, and I apologize for going on so long, but this is a subject I feel very passionately about, as I hope you can tell. Thank 

you. 

Senator TESTER. Well, I appreciate your comments. They are 

very insightful. And as long as you have consented to a few questions—this is actually very much out of the ordinary when a Senator comes to testify for a Committee. In fact, I believe this is the 

first time I have seen a Senator that would be willing to open 

themselves up to questions. And I had a whole bunch as you were 

talking through the principles. 

I am just going to ask you about one, and it probably is not in 

any recent books, but it deals with the amount of money that is 

being pumped into campaigns, both sides of the aisle, and if you 

have any thoughts on the dollars to campaigns’ impact on the regulatory scheme out there. 

Senator KING. You mean in terms of regulations of other things? 

Senator TESTER. In terms of influence. 

Senator KING. I cannot remember who it was, but somebody 

some years ago said we have the only system in the history of the 

world where perfect strangers are expected to give you large sums 

of money and expect nothing in return. I think an inherently dangerous system for democracy, and it has become even more so in 

the last few years. I do not think we collectively have fully realized 

the vast qualitative change that has taken place in campaign finance just in the last 3 or 4 years since the Citizens United opinion 

and the rise of 501(c)(4)’s and the super PACs and the dark money. 

I think that is a subject we could really spend some time on. 

I am not ready to allege corruption or direct connection or any 

of that kind of thing, but clearly it is not healthy for democracy to 

have that amount of money sloshing around in the system. 

Senator TESTER. That is good. Thank you. Senator Portman. 

Senator PORTMAN. Thank you, Mr. Chairman. Again, I appreciate having the hearing and appreciate the Chairman allowing us 

to go through all these issues. And to Senator King, that was terrific. I mean, I think the next book maybe you ought to write with 

all of your experiences you have had since you have not been able 

to keep a job. [Laughter.] 

I love the regulatory accumulation theory. I also think that you 

have laid out the case very clearly for not just cosponsoring the 

Federal permitting bill but also getting that thing done, because 

you are right, as a developer you ran into this. As a Governor, you 

ran into it. We run into it in Ohio all the time. 
9 

One of the reasons that I got involved in this legislation—and I 

think I have told the Chairman this, but one of our companies in 

Ohio that is interested in hydropower on the Ohio River—it is 

called American Municipal Power—came to me and said, we are 

trying to do something good here in terms of energy, in terms of 

jobs, and we just cannot find investors because it takes too long to 

go through the permitting process. 

So it is your point about this notion that—I think the way you 

put it was, ‘‘Time is money.’’ And it is going to be tough for us to 

develop some of this infrastructure that everybody now is acknowledging we need to help in our infrastructure. It is hard if you have 

so many permits. 

So here is some data I think you and I have discussed, but the 

World Bank does this Ease of Doing Business study, and they rank 

all the countries in the world, and the United States has now fallen 

to 34th in the world for dealing with construction permits. And so 

to the extent capital flows across borders now, which it does, in an 

increasingly competitive global economy, as you talked about, investors everywhere are looking at that, not just American investors 

who are thinking maybe I should invest somewhere else, often an 

emerging economy, or often a developing country that does a better 

job with this, but also those investors overseas who are thinking 

about whether they are going to invest here or somewhere else are 

not likely to look at the United States if we are number 34. That 

means there are 33 countries where they can get a permit faster. 

So I appreciate your testimony. I thought it was very comprehensive. Former Interior Secretary and former Senator Ken Salazar, 

the Obama Administration Interior Secretary, recently said with 

regard to your Cape Wind example, ‘‘Taking 10 years to permit an 

offshore wind farm like Cape Wind is simply unacceptable.’’ And so 

this is about all forms of energy; it is about all forms of construction; it is about all kinds of permitting. 

You are right about the lead agency concept. That is in the legislation. You are also right about the no serial permitting; in other 

words, that is part of it, that the Federal Government would have 

to provide to the developer the permits at the outset so that you 

are not finishing one permit, then finding another one. 

We had testimony from the Energy and Power Subcommittee in 

the House recently. There were 35 separate Federal permits required for a single project, seriatim, serial permitting. 

So, look, I really appreciate your willingness to step forward and 

give us the benefit of your experience and advice and having you 

join Senators McCaskill, Donnelly, Manchin, me and others on this 

permitting bill is really great. And I really appreciate the Chairman’s willingness to allow us to move forward with this. 

I have lots of questions for you, but I do not want to put you on 

the spot here today, so I will ask you those questions maybe on the 

floor of the Senate when we talk about this further. But just 

thanks very much for coming. 

Senator KING. Well, thank you. And I just want to emphasize— 

and I think it goes without saying—nobody in this body, at least 

nobody that I know, and certainly not me, wants to gut regulation 

or wants to shortcut environmental review. I mean, I have spent 

my whole life defending the environment. But it does not have to 
10 

be done in a clunky, inefficient, expensive, redundant, and overly 

burdensome way. And what we really have to separate is content 

from process, and we can have the standards and have the content. 

What we have to do is make sure the process makes sense. 

And to your point, one of my careers was with a small business 

that was in the hydro business, and we had a partner from the 

country of Norway who invested substantial funds. And after about 

5 years, they pulled back basically because the regulatory process 

in America they just found baffling and it was a crapshoot. Capital 

goes where it can earn a return and where there is a reasonable 

certainty of that return. And, we should not rely on the fact that 

entrepreneurs are not only entrepreneurial but are willing to take 

what are sometimes really not very good risks on a regulatory process that is not predictable, is not timely, and is so incredibly expensive. 

So I really appreciate the work and your allowing me to appear 

before you. Thanks again, gentlemen. 

Senator TESTER. We appreciate your contribution to the Subcommittee. Thank you, Senator King. 

Senator Portman, if you would like to go with your opening statement at this point in time, we would certainly be—— 

OPENING STATEMENT OF SENATOR PORTMAN 

Senator PORTMAN. Great. Thank you, Mr. Chairman, again, and 

Senator King can be excused now because he has other things to 

do, and if the other witnesses want to start heading to the table, 

that is fine, too. I am just trying to make it more efficient for everybody. 

But I do appreciate your letting us move forward on these hearings on these bills. I think this is an incredibly important hearing 

today. We are going to look at a number of different potential regulatory reform efforts. 

We all believe, as Senator King had said, that regulation is necessary, an important function of government. But it needs to be appropriately designed—I think Senator King made that point well— 

implemented properly. After all, it was regulation that took the 

lead out of our gasoline in 1973, secured United States financial 

markets after the Great Depression. Regulations are needed, but 

by its nature can be really complex. And this expanding catalogue 

of Federal rules has made it exceedingly difficult for us to attract 

investment and, frankly, to do what businesses do best, which is 

to help create jobs at a time when we are living through such a 

weak economic recovery. 

Each year well over 70,000 pages of additional regulatory requirements are now published in the Federal Register. That is 

70,000. And in the past two decades, the Code of Federal Regulations (CFR) has expanded by as much as 25 percent to an astounding 180,000 pages. Many of these new rules do represent significant costs to the economy, regularly in excess of $100 million each 

year. 

Over President Obama’s first 5 years in office, his Administration 

on average put out more than 53 of these major regulations each 

year, a substantial increase over what Presidents George H.W. 

Bush, Bill Clinton, and George W. Bush, each who had an average 
11 

of about 45. So the annual costs of Federal regulations now they 

are estimating at $2 trillion, and this continues to grow substantially. 

So, again, I think we have made the point well already this 

morning that there is a way to do this smarter, and we have an 

opportunity here to see some examples of how to do that. 

I appreciate that Senator Pryor is here and Senator Tester, because they have both been involved in this issue and both have 

been involved with specific legislative initiatives to try to deal with 

this issue. I know that we are going to talk more about these bills, 

but the Regulation Accountability Act, for instance, is one of them 

where these Senators and others have agreed to step forward and 

say, hey, let us do this in a smarter way, and not just require cost/ 

benefit analysis but look at the least burdensome way to achieve 

an objective, have appropriate judicial review for major rules, and 

come up with ways to eliminate rules that do not make sense. 

The public rightly expects us to do this. The principles of good 

government I think are already established in Executive Order 

(EO) 12866, and we have talked a lot about that in this Committee. 

It says ‘‘only upon a reasoned determination that the benefits of 

the intended regulation justify its costs’’ should a regulation be 

adopted and ‘‘the most cost-effective manner to achieve the regulatory’’ outcome. So I think in many respects, we need to just follow 

these principles of good governance that are already established in 

the Executive Order. 

I look forward to the testimony from our experts here today, Mr. 

Chairman. I want to particularly point out that I probably would 

not be sitting here, which might be a good thing for me or the 

country, if not for Boyden Gray, because he made the grave error 

of hiring me in 1989. In 1989, he hired me as Associate Counsel 

to the President and put me in his office in the White House where 

he immediately had me look at regulatory reform, believe it or not. 

So I appreciate Boyden being here in particular and his vast experience in this area. 

Thank you, Mr. Chairman. 

Senator TESTER. Yes, thank you, Senator Portman, for your comments and your observations. 

Senator Pryor. 

Senator PRYOR. Well, thank you, Mr. Chairman. I really want to 

thank you for having this today, because I know that Senator 

Portman and I asked that you would do this sometime, and you 

did, and we appreciate that very much. Senator Portman has really 

been a great leader on this. I want to talk about him in a just a 

moment. 

But one of the things that I have experienced in my time in the 

Senate is I have heard from many Arkansans and Arkansas businesses, particularly the smaller businesses that are struggling to 

meet the increasingly heavy regulatory burden. Each year Federal 

agencies issued more than 3,00 final rules, many of which do have 

a significant economic impact. 

President Obama emphasized in Executive Order 13563, President Obama emphasized that our regulatory system should promote economic growth, innovation, competitiveness, and job creation. I agree with that. Unfortunately, I do not think our regu-
12 

latory environment does that. I think that it is time for Congress 

to review the laws that really form the foundation of our regulatory 

system. We need to find the ways necessary to make those laws 

fairer and more reasonable and more effective in meeting the dual 

challenges of protecting the public while making our economy 

stronger and more competitive. 

That is why I have teamed up with Senator Portman to introduce S. 1029, the Regulatory Accountability Act of 2013. We call it 

Portman-Pryor. He really does deserve the lion’s share of the credit 

for working on this. It has been great to have a partner like him 

on this. But I do feel that, done right, the regulatory reform effort—the regulatory system can be better, cheaper, and faster. 

There is a lot in this bill. Some of it is basic. Some of it is very 

basic, like just requiring an agency, a regulating agency, just to 

State their statutory authority for doing what they are about to do. 

That is pretty basic stuff. But we have seen this before where they 

may not have that authority, it goes to court, and it turns out they 

do not. 

Some of it is much more complicated and really gets down in the 

weeds, but basically what the Portman-Pryor effort does not do is 

it does not go after one agency that may be unpopular on a certain 

thing, like the Environmental Protection Agency (EPA) or something, or, one agency on one specific thing. What it really does is 

amend the Administrative Procedures Act to really put a greater 

emphasis on early engagement between agencies and the parties 

subject to these high-impact rules that cost over $1 billion or more 

per year and major rules costing $100 million or more. These expensive rules are where the regulatory focus I believe should be. 

I mean, it is not the only focus, but I think that is where the biggest focus should be. 

And we all know that sometimes it takes way too long to do the 

rules, it takes way too long to get to the final product. So we need 

to find ways and I think one of Congress’ responsibilities should be 

to really find ways to make this work a lot better than it is working right now. 

So, again, I want to thank the chair for his leadership. Chairman 

Tester has been great on this issue in a lot of different ways, trying 

to make for a more sensible, more commonsense regulatory environment here in the United States. 

Thank you. 

Senator TESTER. Well, thank you, Senator Pryor. I appreciate 

your comments, and thank you for the kudos. 

We are fortunate in the second panel to have Howard Shelanski 

with us. Howard, welcome. 

Mr. Shelanski is the Administrator of the Office of Information 

and Regulatory Affairs (OIRA), an executive branch agency that reviews many of our rules and regulations. This Committee held Mr. 

Shelanski’s confirmation last year, and it is always good to see you. 

We are going to swear you in. It is customary that we swear in 

all witnesses, so if you would stand and answer this in the affirmative, if you would like, or in the negative, if you would like, however you want to do it. Do you swear that the testimony you will 

give before this Subcommittee will be the truth, the whole truth, 

and nothing but the truth, so help you, God? 
13 

1The prepared statement of Mr. Shelanski appears in the Appendix on page 39. 

Mr. SHELANSKI. I do so swear. 

Senator TESTER. And let the record reflect that the witness answered in the affirmative. 

Mr. Shelanski, you have the floor. 

TESTIMONY OF THE HON. HOWARD SHELANSKI,1 ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET 

Mr. SHELANSKI. Thank you very much. Chairman Tester, Ranking Member Portman, Senator Pryor, and Members of the Subcommittee, thank you for the invitation to appear before you today. 

I am pleased to have this opportunity to discuss recent developments at the Office of Information and Regulatory Affairs, and my 

priorities for OIRA going forward. 

Since I became OIRA Administrator this past July, it has been 

my privilege to work with OIRA’s outstanding staff, with the firstrate leadership team at the Office of Management and Budget 

(OMB), and with our colleagues across the Federal Government. 

Together we are working to promote economic growth and opportunity while simultaneously protecting the health, safety, and welfare of Americans now and into the future. 

OIRA does not set the agencies’ policy agendas. The office does 

work with agencies to ensure that the regulations through which 

they implement policies are efficient, well designed to achieve their 

objectives, and based upon the best available evidence. Through the 

fourth fiscal year (FY) of this Administration, the net benefits of 

rules reviewed by OIRA total $159 billion, and we expect the fifth 

fiscal year numbers to show $25 billion in additional net benefits. 

Three priorities for OIRA, both now and looking ahead, are the 

clarity and reliability of the review process and regulatory environment, rigorous analysis of rules under review, and retrospective review, or lookback, of existing regulations. 

Clarity and reliability allow people, businesses and organizations, and States and localities to plan for the future. It is, therefore, important that stakeholders have notice of the government’s 

plans for forthcoming regulatory activity. To that end, OIRA is 

charged with assembling and publishing a Unified Regulatory 

Agenda each spring and fall, setting forth the expected regulatory 

actions to be undertaken by Federal agencies over the coming year. 

OIRA published the fall 2013 Unified Regulatory Agenda and Plan 

just before Thanksgiving and is on track to publish the update to 

the Unified Agenda this spring. 

The agenda is a broad list that includes all of the regulations 

under development or review during the next 12 months, as well 

as longer-term actions that the agencies are considering. Such an 

inclusive listing makes the regulatory environment more transparent and participatory for all stakeholders, especially when combined with the annual plan, which focuses more narrowly on regulatory actions the agencies intend to issue in proposed or final form 

within the upcoming fiscal year. As OIRA Administrator, I will, 

therefore, continue to do all I can to ensure timely publication of 

the Unified Regulatory Agenda and Plan. 
14 

Of similar importance to the clarity and certainty of the regulatory environment is that both new rules and those already under 

review—move through OIRA as efficiently as resource constraints 

and rigorous analysis permit. Reducing the frequency of extended 

regulatory reviews and working with agencies on rules that are already under extended review are key objectives for OIRA. Thanks 

to the tireless work of OIRA staff, we have significantly reduced 

the number of rules that were under review for more than 200 

days, and the number of rules under review for more than 90 days 

is down considerably and continues to fall. 

In addition to improving the clarity of the regulatory environment through notice and timeliness, we are updating the tools the 

public can use to engage in the rulemaking process. We continue 

to explore ways to make improvements to our information systems 

that will increase transparency, including making the disclosure of 

information associated with regulatory review more complete, automated, and user friendly. 

While increasing the predictability of the regulatory process 

through timely review of rules and regular publication of regulatory plans and agendas is essential, Executive Orders 13563 and 

13610 also make clear that flexibility and removal of unnecessary 

burdens are essential elements of the Federal rulemaking process. 

Improving existing rules, ensuring regulatory flexibility for small 

businesses, and reducing unnecessary regulatory burdens for everyone through the retrospective review process are high priorities for 

me as Administrator. 

Executive Order 13610 asks agencies to report regularly on the 

progress of their retrospective review activities. This week, agencies are posting their most recent retrospective review updates on 

their Web sites. Taken together, Federal agencies provided updates 

on their initiatives, many of which are new efforts that agencies 

added since their July 2013 listing of lookback plans. These efforts 

are already saving more than $10 billion in regulatory costs in the 

near term, with more savings to come. Some additional examples 

that will add to these savings include: 

The Department of Transportation’s proposed rule to rescind the 

requirement that truck drivers submit and retain certain kinds of 

inspection reports, a change that would save approximately $1.5 

billion in annual paperwork; 

In the area of export control regulations, streamlined licensing 

processes are now finalized for 11 of 17 targeted categories of export controls, with more in the works; 

And the Department of Veterans Affairs (VA) issued a proposed 

rule to reorganize and rewrite its compensation and pension regulations making it easier and less costly for claimants, beneficiaries, 

veterans’ representatives, and VA personnel to locate and understand these regulations. 

While there has been important progress on retrospective review, 

I think we need to do even better. At OIRA, we are working, along 

with colleagues elsewhere in OMB and at the agencies, on several 

ways to further institutionalize retrospective review as an essential 

component of government regulatory policy. As part of this effort, 

we are developing several features that will make regulatory 

lookback a more systematic priority for agencies. Such institu-
15 

tionalization of retrospective review, both to ensure follow-through 

on existing plans and to help agencies develop their future plans, 

will be one of our key objectives moving forward. 

Thank you very much, and I look forward to your questions. 

Senator TESTER. Well, thank you very much for your testimony. 

I am going to start by going back to what Senator King talked 

about as some of his principles. First of all, how many employees 

are in your department? 

Mr. SHELANSKI. Right now we are at roughly 45 full-time equivalents (FTEs). 

Senator TESTER. OK, and I will get to that in a second. One of 

the things that Senator King talked about initially is that the regulations need to be looked at from a competitive standpoint. Are you 

able to do that? Is that part of your mission? 

Mr. SHELANSKI. Thank you for your question, Mr. Chairman. It 

is part of our mission. In Executive Order 12866, in the section 

that talks about taking account of the costs and benefits of regulation, competitiveness is actually one of the factors that is specifically mentioned that should be taken into account in assessing the 

burdens or costs a regulation might impose. 

Senator TESTER. So what do you do if you think regulation is 

anticompetitive? 

Mr. SHELANSKI. Well, one of the things that we always look to 

do when we are reviewing a rule at OIRA is to examine all of the 

costs that the rule might create, as well as the benefits. And we 

ask agencies to come to us with their best evidence of all of the different costs that might result. And we are charged under a variety 

of statutes—the Regulatory Flexibility Act, the Paperwork Reduction Act—to look for areas where we might be able to encourage 

the agency or ask the agency to reduce such burdens. 

Senator TESTER. OK. So you do that in written form? Do you 

send back recommendations to them? 

Mr. SHELANSKI. There are a variety of ways that there is a lot 

of deliberative process back and forth between the staffs of agencies and OIRA. 

Senator TESTER. As the review goes on? 

Mr. SHELANSKI. As the review goes on. 

Senator TESTER. OK. Look, we just had a hearing earlier today 

on congressional intent of a regulation on banks versus insurance 

companies. And it was pretty apparent at that hearing that the authority for regulation is nothing like what Congress had passed. 

Why is that? I mean, maybe you do not see it that way, but I certainly do. There are many regulations that we put up, and congressional intent does not seem to be a part of the equation once it hits 

the agency. 

Mr. SHELANSKI. Mr. Chairman, that is a question I would have 

to do some more thinking about. That is a big question. We typically see rules that are well within the authority of the agencies 

to issue, and we—— 

Senator TESTER. There is no doubt about that. 

Mr. SHELANSKI. Yes. 

Senator TESTER. The question, though, is that when we pass a 

rule and the discussion that is around that rule, whether it is in 

Committee or on the floor, often indicates what Congress would 
16 

like to see in a regulation once it is out. Just let me ask you this: 

Does OIRA take that into consideration? And, by the way, you are 

not the end-all and the be-all, so I do not expect you to do everything I am asking you. But the fact is I am curious to know if, in 

fact, you are able to take a look at proposed regulations and refer 

them back to the intent of Congress. 

Mr. SHELANSKI. We typically look at the regulations on their own 

terms once they are determined to be within the agency’s authority. 

Senator TESTER. OK. You have 45 employees, and I know that 

there are a lot of regulations that come out, maybe rightfully so, 

maybe not. How do you assess your staffing and your department? 

Mr. SHELANSKI. Like, I think, the agencies that we work with on 

their regulations, like the rest of the Office of Management and 

Budget, we are all working very hard to do a lot with what I would 

describe generously as ‘‘streamlined resources.’’ 

Senator TESTER. Do staffing challenges make it difficult for you 

to do your reviews on time? 

Mr. SHELANSKI. I think that if we had, like the rest of OMB, like 

the agencies, if we had more staff, we would be able to work more 

quickly. But I think we are managing to do a pretty good job reviewing most rules within the normative time of the Executive Orders. 

Senator TESTER. OK. You recently talked about improving transparency as being one of your goals for this year, but you cite a 

number of challenges to achieving that goal of greater transparency. 

First of all, why do you think transparency is important? And, 

No. 2, how do we make it so you can achieve it? 

Mr. SHELANSKI. Thank you very much for that question, because 

I do think that transparency, Mr. Chairman, is actually one of the 

key features that really distinguishes the American regulatory 

process. We have a process in which people have notice of rules 

that are forthcoming. They get an opportunity to comment on those 

rules during a period when there is still the prospect of meaningful 

change. And agencies are held accountable by the courts in taking 

public input meaningfully into their process and into account in finalizing the rule. So transparency is extremely important in the 

process, and I think we actually have a remarkably transparent 

process by any comparison. 

Senator TESTER. Based on what? I mean, why do you say that? 

Mr. SHELANSKI. We have a process here in the United States 

that, when one looks around, we have stakeholders—businesses, 

citizens, activist groups, anybody who wants to come in has a 

chance under the Administrative Procedures Act, under the Executive Orders, to weigh in and get their views heard. 

Senator TESTER. All right. 

Mr. SHELANSKI. And the courts hold the agencies accountable. 

Senator TESTER. OK. Thank you very much. Senator Portman. 

Senator PORTMAN. Administrator Shelanski, I appreciate your 

being here. You probably have the most important job in Washington that nobody knows about. And it is not just an important 

job; it is a really hard job. I was there at a time when we had the 

opportunity to hire somebody for your role, and I talked to a lot of 
17 

people and ended up with someone who had expertise, as you do, 

in this and got to learn more about the skills that are required, so 

we appreciate your service. 

As you know, I think our regulatory costs are going up, not 

down. It concerns me. If I look at the White House language on 

this, it says, ‘‘We are constantly trying to minimize regulatory burdens and avoid unjustified regulatory costs.’’ That is something I 

agree with totally. And yet when I look at one of the real measures 

of regulatory output, what should be the costs of these economically 

significant rules—that is, the rules with $100 million or more impact—in the first term, which are the numbers that we have, the 

Obama Administration was far more aggressive than any of their 

predecessors. 

In fact, if you look at the Administration’s own estimates, the 

costs of those significant rules would be greater than the costs in 

2012 alone, which is, I think, the last year for which we have 

data—that one year would be higher than the entire cost of the 

first term of the Clinton Administration and the first time of the 

George W. Bush Administration. 

So I do think there is a change, and this past year is no different. In 2013, what we have is that regulators had published $112 billion in net and regulatory costs, including the deregulatory measures, and added 157.9 million paperwork burden hours. So I guess, 

my general question to you is: Can we do better? 

Before I ask you to answer that more general one, let me just 

talk specifically about the lookbacks and trying to eliminate old, inefficient rules. Again, I think it is a good idea. I, again, am focused 

on, how do we look at the actual results of that. Of the first 90 

rules changes initiated as part of the regulatory lookback, the estimated compliance cost is $3.3 billion, according to an analysis by 

American Action Forum Data Agency published in the Federal Register. Your testimony suggests that the more recent efforts have 

boosted lookback savings costs to around $10 billion. When you put 

that figure in context, the picture becomes a little less encouraging. 

According to data reported by the agencies themselves, in 2012 

alone, again, the administration’s new regulatory burdens imposed 

$236 billion in new burdens, so we are talking about a relatively 

small reduction in burden, whether it is 3.3 or 10 billion, compared 

to the new costs. 

This same report I talked about says even if you look at only the 

first 90 rules undertaken by the agencies as part of this lookback, 

the new costs that are involved total $11 billion. In other words, 

the lookback itself, because it expands other rules, cost $11 billion, 

and yet the savings is either $10 billion, in your latest testimony, 

or $3.3 billion. In other words, the costs of regulations attributed 

to the lookback rules actually exceeded the cost savings. 

Now, that might not be true going forward, but it does concern 

me. The most recent analysis I have seen examining quantified 

rulemaking in the retrospective reports found that the rules’ increasing costs outnumber rules implementing cost savings measures by a ratio of 3.7:1. 

So the first question for you here is: How can agencies be 

incentivized to institute meaningful regulatory reviews that will 

improve existing regulations and actually reduce overall regulatory 
18 

burdens? And what would you do to institutionalize that kind of a 

retrospective review? 

Mr. SHELANSKI. Thanks very much for your question, Senator 

Portman. Without being able to comment on the particular numbers or the particular report that you identified, I think that the 

important thing to keep in mind is when a retrospective review is 

done, it is typically done through a rulemaking. You need to do a 

rulemaking to change a rule. And we look, when we examine a retrospective rule, just as we do with any other rule, to make sure 

that that rule, where permissible by statute, is cost justified—that 

is to say that the benefits justify the costs. 

So we would be very concerned if we saw a rule that was supposed to be reducing regulatory burdens that, in fact, imposed regulatory burdens that exceeded the savings. And so we do in the retrospective review process, just as in the review of new regulations, 

look very carefully at the regulatory impact analysis and the costs 

and benefits. 

So what we are trying to do to further institutionalize the 

lookback effort is to do a number of things. One thing is to ask 

agencies to get into the habit—I think they have been really excellent in getting into the habit of identifying retrospective review 

plans, posting them, and every 6 months telling us which ones 

have you accomplished, which new ones are you adding, which one 

are ongoing. 

So the retrospective review reports that we receive from agencies 

and that we review prior to their posting them on their Web sites 

are, I think, a key part of institutionalizing and creating a mechanism, a routinized mechanism, if you will, within the agencies of 

looking for good targets for lookback. 

But we have other things that I think we need to start considering, that we need to start working with the agencies on, to make 

sure that there is follow-through on the plans that they list and 

that the plans that they have identified are really the valuable 

plans. 

The truth is lookback is very difficult, as Senator King said. It 

is not the easiest thing in the world to find high-cost, low-benefit 

rules that are just lying around on agency books. Most of the lowhanging fruit has been harvested in this regard. 

So it is a substantial dedication of effort and resources by the 

agency, and we look forward, both at OIRA and with our colleagues 

on the management side of OMB, to working with the agencies on 

a number of mechanisms by which those resources and that focus 

will be increased going forward. 

Senator PORTMAN. OK. Well, we will share with you these numbers, and if you could give us a response in writing, that would be 

terrific as to why you think the analysis is right or wrong. And, 

again, the analysis that we have would indicate that in the 

lookbacks there have been higher costs imposed than actual savings, which, of course, is not your intent, as you say. 

With regard to institutionalizing it, it is good for me to hear that 

you think the agency attitude is to look—talking about agency attitude, just one other question. Do you think that agencies face a 

sort of inherent conflict of interest in looking at their own rules in 

terms of the costs and benefits? And is there a role here for OIRA, 
19 

or for the Government Accountability Office (GAO) or maybe an 

independent congressional regulatory review office, to be tasked 

with evaluating the actual costs and benefits of regulations after 

they have been implemented? 

Mr. SHELANSKI. In my time as Administrator, so since July, I 

have not encountered a situation in which an agency has seemed 

hampered by a conflict of interest in reviewing one of its own rules. 

The agencies, insofar as I have dealt with them on retrospective review, have been quite interested in doing good policy and trying to 

improve their regulatory systems. 

Senator PORTMAN. Thank you, Administrator. 

Thank you Chairman. 

Senator TESTER. I have a couple quick questions here. Executive 

Order 12866—hopefully that rings a bell—directs disclosure of all 

substantive comments and changes, which includes the informal review process. Are those publicly disclosed? 

Mr. SHELANSKI. Just to clarify, Mr. Chairman, of course the comments that are submitted during the public comment period that 

a rule has been put out for comment by an agency are disclosed 

and are docketed. We have meetings under Executive Order 12866. 

We do not ask for the meetings, but any party that wishes to weigh 

in on a rule under review at OIRA is entitled to have a meeting 

with me or somebody who I designated. 

Senator TESTER. OK. And those—— 

Mr. SHELANSKI. We docket those meetings and any materials 

provided. 

Senator TESTER. OK. So it is for public examination. 

Mr. SHELANSKI. Yes. Very often there are no materials provided, 

but the fact of the meeting, who attended, and anything that they 

provided in terms of materials is docketed and available to the public. 

Senator TESTER. OK. There have been 38 rules that have been 

posted on the OIRA Web site for public comment for longer than 

6 months. What is the main impediment to getting these reviews 

out? 

Mr. SHELANSKI. There can be a variety of reasons that a rule 

goes beyond the 90 or—there are permissible extensions, but the 

normative times established in the Executive Orders. Very often a 

rule is very complicated, it is extremely long and detailed, and the 

normative time of 90 days in the Executive Orders does not necessarily fit for all rules. And very often what happens during the 

review procedure, just speaking generally, is OIRA staff will raise 

very serious questions, or through the interagency review process, 

an agency that may have an interest in what another agency is 

doing might need quite a bit of time to fully understand what the 

implications of that rule will be for its regulatory program. And 

there can be a lot of discussion amongst the agencies. And at the 

end of this process, the agency that wishes to promulgate the rule 

may want to do more research, may need to do additional studies, 

may go partially back to the drawing board. And during that period, the rule is back with the agency, and it could be for a very 

good reason. It could be to improve the rule, to solidify the underlying evidence. 
20 

So one of the reasons for an extended review period can simply 

be that new information came to light during the review process 

that required a bunch more effort. 

Senator TESTER. OK. I would just like to get your opinion. You 

review rules all the time, and the one-stop shop suggestion where 

you have a lead agency on regulations, do you have an opinion on 

that? 

Mr. SHELANSKI. So I do not have an opinion to offer here today. 

I would note that I did listen with great interest to Senator King’s 

discussion of permitting and the idea of a one-stop shop for permitting. And I know that the Administration is absolutely committed 

to ensuring that we do have 21st Century—not the nostalgic infrastructure but 21st Century infrastructure, and that the permitting 

that will allow for that infrastructure to develop can occur efficiently in a modern way that is consistent with protecting our communities and protecting our safety. And the President through a 

Presidential memorandum did charge the Council for Environmental Quality (CEQ) and the Office of Management and Budget 

with leading a task force that would help to come up with suggestions and proposals for that streamlining. And the Office of Performance and Personnel Management at OMB is working with 

CEQ on that effort, and I would be very happy to take that question back to them. 

Senator TESTER. That would be fine. Do you know if there is a 

timeline for recommendations from that? 

Mr. SHELANSKI. I believe there is, sir, but I do not know exactly 

what it is off the top of my head. 

Senator TESTER. Well, I appreciate that. 

Senator Portman, further questions? 

Senator PORTMAN. Yes, just, I guess, following up on that. In 

March 2012, there was an Executive Order issued as to permitting 

specifically, and I do not know if that is the memorandum you referred to earlier. It sounds like that might be different. This is an 

Executive Order. And it said it was aimed at improving performance of Federal permitting and review of infrastructure projects. It 

is aimed at more efficient and effective review projects, faster decisionmaking, transparency, predictability, accountability for infrastructure permitting. 

The White House has said that since that Executive Order, agencies have expedited the review of a number of major projects, 22 

of which have completed the Federal permitting process. There was 

a dashboard Web site containing a searchable database of information for certain projects selected as part of the initiative, so it is 

almost like a pilot program, it sounds like to me, on dashboards. 

And you might have heard Senator King talking about the Federal Permitting Improvement Act that he is now a cosponsor of, 

and it creates, as you probably know, a permitting dashboard that 

is similar to this White House initiative, and it would be available 

for larger projects, would provide information on the status of the 

permits, status of approvals, the NEPA reviews, basically providing 

more transparency and accountability in permitting. 

As OIRA Administrator, do you support this concept of a permitting dashboard called for in the Federal Permitting Improvement 

Act to encourage that transparency and accountability? 
21 

Mr. SHELANSKI. Senator Portman, I am not in a position today 

to articulate an administration position on the bill, but, of course, 

I would be very interested in the discussions that would have to 

happen both within the Administration and between the Administration and Congress in formulating such a position. 

I will say that I do fully support as OIRA Administrator, of 

course, the Administration’s objectives that you mentioned that are 

articulated in the Executive Order and, to the extent that those 

have a regulatory component, look forward to working in a complementary way with any of these permitting initiatives. 

Senator PORTMAN. OK. You better say nice things about the Federal permitting bill because Senator McCaskill has just arrived. 

Mr. SHELANSKI. Just in time. 

Senator PORTMAN. You do not have to be nice to me, but you better be nice to her. 

OK. Let me ask you one quick one on independent regulatory 

agencies, and I will try again not to put you on the spot, because 

I do think that dashboard that we are talking about for all projects 

is consistent with the dashboard that you have in your own Executive Order. But on the independent agency review issue, as you 

know, Senators Warner and Collins and I introduce this thing that 

basically takes the President’s language, as I see it, and codifies it 

to make sure independent agencies are subject to cost/benefit analysis requirements, other burden-reducing principles that have long 

governed the executive branch agencies that you review. It would 

require submission to OIRA for a non-binding evaluation of the 

agency’s analysis in the public record. And prior to becoming OIRA 

Administrator, you helped lead one of those independent agencies, 

and, therefore, I think you are qualified to speak on this issue. 

Out of the 21 major rules issued by independent agencies in 

2012, not one was based on a complete cost/benefit analysis. Now, 

that is based on OIRA and GAO annual reports. There are also 

some other literature on this that I am happy to share with you, 

but that is our sense of it, that it just does not happen. The same 

basically was true in, by the way, 2009, 2010, and 2011. So we are 

not seeing the kind of independent agency review the President 

called for in his Executive Order. 

Again, having been someone who led an independent agency that 

was regulatory, do you believe it would be of value to require sound 

review rulemaking principles through independent regulatory bodies and to provide third-party review of the rules they promulgate? 

Mr. SHELANSKI. Thank you, Senator Portman. Maybe because I 

did work at two independent agencies, I particularly value the 

independence of those agencies, and I think that in my experience, 

the agencies do a conscientious and careful job with their 

rulemakings. I do think that the Executive Order helps in that regard in letting the independent agencies know sort of what additional principles they might want to bring to their rulemaking. 

So I think the way the current system works, the tools that the 

independent agencies have and the tools that we have at OIRA 

where we are available to consult upon request or to discuss 

rulemakings with those agencies if they have questions about implementing the Executive Order work quite well. 
22 

I have not had the chance to discuss within the Administration 

any official administration position on the bill, so I am certainly 

not in a position to comment in that regard now. But my own experience is that the independent agencies are—while all agencies can 

do better, they are doing a conscientious job with their 

rulemakings. 

Senator PORTMAN. So you would disagree that out of the 21 

major rules, say in 2012, that none were subject to a complete cost/ 

benefit analysis? You think it is just fine what they are doing? 

Mr. SHELANSKI. No, I do not disagree with the OIRA report, but 

I do think that the independent agencies are subject to all of the 

APA requirements, they are subject to judicial review; and I just 

am not in a position to say right now whether any particular piece 

of legislation would improve the situation. 

Senator PORTMAN. We would differ on judicial review, unless you 

are talking about specific statutes that have judicial review within 

them. But my time has expired, so we will come back maybe with 

some questions in writing on that as well. 

Thank you. 

Senator TESTER. Senator McCaskill. 

Senator MCCASKILL. I know my colleagues and my cosponsor 

have covered most of this, and I do not want to belabor it by going 

back through some of the points that I would like to emphasize. 

But I would ask you this question: Do you think that one of the 

problems we have in this regard, in government there are people 

like you who are giving your time and your service, and you are 

kind of way up here. And then there are entry-level people, and 

then there is what I call the calcified middle. And the calcified middle in most instances are the ones that are driving the rules and 

regs. 

Do you think that the lack of private sector experience in that 

calcified middle has an impact on some of the nonsensical outcomes 

we have on some of these rules in terms of delays and failure to 

do adequate cost/benefit analysis? 

Mr. SHELANSKI. My experience with the people who write the 

rules at the agencies is that they are very attentive and very 

thoughtful about what they are doing. I have not seen a major rule 

come to OIRA in my time there where the heart of the agencies 

that have been involved with writing the rule have not engaged in 

fairly significant interaction with stakeholders and actually taken 

that stakeholder interaction quite seriously. 

There are times that their analysis can be improved, and that is 

one of the things that my office tries to work with the agencies to 

do, and so I think we provide a valuable function in terms of providing some additional perspective. 

But I have not noticed, at least on the major rules that I have 

had the opportunity to participate in reviewing in the last 8 

months, the kinds of hazards or problems to which you are alluding. 

Senator MCCASKILL. Well, it is hard to imagine that we could 

make it any more complicated or difficult than it is right now with 

some of these rules. So hopefully we can get some of at least our 

permitting stuff that we know costs real money, that we can maybe 
23 

1The prepared statement of Mr. Gray appears in the Appendix on page 42. 

get some action on that legislation that would make things go 

quicker and make accountability more clear. 

So thank you very much for being here today. 

Mr. SHELANSKI. Thank you, Senator. 

Senator TESTER. Thank you, Mr. Shelanski, for your testimony 

and your availability for questions. We will release you now and 

bring on the third panel. Thank you very much and good luck. 

Mr. SHELANSKI. Thank you, Mr. Chairman. 

Senator TESTER. Now on our third panel we have three witnesses 

to round things out, and you folks can come up and sit down as 

I introduce you. 

We have Michelle Sager, who is the Director of Strategic Issues 

at the U.S. Government Accountability Office. In this role she oversees GAO’s analysis of the regulatory process. I want to thank you 

for being here, Michelle. 

We have Katherine McFate, the president and CEO of the Center 

for Effective Government and who co-chairs the Coalition for Sensible Safeguards. The Center for Effective Government is a nonpartisan organization that advocates for transparency in government. We appreciate you being here, Katherine. 

And last, but certainly not least, who Senator Portman brought 

up, Boyden Gray, who is the former Ambassador to the European 

Union and the White House Counsel to President George H.W. 

Bush, who appointed him as Counsel to the President’s Task Force 

on Regulatory Relief. It is great to have you here today, Boyden, 

and I appreciate you taking the time. 

As with the previous panel, I would just like you to please stand 

and answer in the affirmative or the negative as I swear you in. 

Do you swear that the testimony you will give before this Subcommittee will be the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Mr. GRAY. I do. 

Ms. MCFATE. I do. 

Ms. SAGER. I do. 

Senator TESTER. Let the record reflect that the witnesses answered in the affirmative. I am going to start out with you, Mr. 

Gray, and then we will just go down the panel, I should say, but 

once again, welcome, Boyden, and go ahead. 

TESTIMONY OF THE HON. C. BOYDEN GRAY,1 FOUNDING 

PARTNER, BOYDEN GRAY & ASSOCIATES, PLLC 

Mr. GRAY. Thank you very much, Mr. Chairman, and Senators 

McCaskill and Portman. 

Senator Portman was the best hire I ever made, so I wish he was 

still in closer proximity. But the sky is the limit, perhaps. 

This is a great opportunity for me to make just a couple or three 

points. I believe that overregulation, unnecessary regulation, is a 

major wet blanket on growth, opportunity, innovation, and employment, and so this is to me a very big deal. 

I want to talk about the Regulatory Accountability Act a little 

bit, the permitting proposal that Senator Portman has put up, and 
24 

Senator King joined, and also just a comment about legislative reform. 

On Regulatory Accountability, it codifies the cost/benefit requirements that have been in place as a matter of Executive Order for 

many years, since 1981 at least, subjects them to judicial review. 

This is, I think, better than what you get under the Executive 

Order, which is not reviewable. It also would apply this to independent agencies. I do not think there is a single academic in the 

country who would really argue today that independent agencies 

should not be covered in the same way the other agencies are. The 

fact that they are not, for example, gives Europeans heartburn because it has so deep an impact on financial services where there 

are so many divergent issues that are facing Europe and the 

United States. 

On the permitting proposal, this addresses one of the most insidious brakes on economic growth, in large part because it involves 

so many hidden delays and so many hidden burdens and hurdles. 

And the one-stop shop idea, putting OMB in at the heart of leadership, I think would be very important. 

I want to make a parenthetical comment that 45 people is not 

enough in that office. I think when we started out doing this in 

1981, I think there were double the number. And, of course, the 

workload of that office has increased since then. But if you are 

going to add independent agencies to the review process, I think 

you have to also give OMB the resources. 

I think the permitting thing, if you look at one report in my testimony for the new gas shale that there is a new opportunity, which 

is much under discussion today because of what is happening in 

Ukraine, there are 1,400 miles of pipeline that must be built yearly 

just to move this gas around the country to where it is needed, to 

say nothing of moving it to a place where it might be exported. EEI 

says it is going to be spending $50 billion over the next 10 or 15 

years on transmission lines. None of this will take place without 

permitting, and if the permitting is not expedited, none of it will 

take place period. 

So I am very much in favor of this legislation. It puts a time 

limit, as Senator King noted, on judicial review. It gives 6 months 

to decide, not 6 years, and I think that is completely reasonable. 

If you look at what EPA is proposing for so-called PSD, prevention of significant deterioration, it seems like it is pretty obscure, 

but it would allow them to regulate every building construction 

project practically in the country over time. And I think that is just 

really overkill. 

My one substantive comment about legislative review is that 

there is a lot of stovepiping in the Congress, as there is, of course, 

in the executive branch. Agencies and committees, committees like 

this one, do not have the proper scope to make the changes that 

need to be made or the oversight that needs to be conducted. And 

so what I would recommend, in addition to what you are already 

proposing, is a joint committee of some sort that could take a 

broader view of what is going on across the Senate, across the 

House, and take into account all the things that are going on, the 

interconnections, the disconnects, and that I think would make it 
25 

1The prepared statement of Ms. McFate appears in the Appendix on page 94. 

easier to perform the oversight function that you are really doing 

a great job as it is now. 

So thank you very much for the opportunity to appear. 

Senator TESTER. Well, thank you very much for being here, Mr. 

Gray. We certainly appreciate your testimony. Katherine McFate. 

TESTIMONY OF KATHERINE MCFATE,1 PRESIDENT, CENTER 

FOR EFFECTIVE GOVERNMENT 

Ms. MCFATE. Thank you, Chairman Tester, Ranking Member 

Portman. I think I am the outlier on this panel. As the co-chair of 

the Coalition for Sensible Safeguards (CSS), we are a collaboration 

of 150 groups of consumers, small businesses, scientists, environmentalists, health and safety advocates, and we are committed to 

defending and improving our regulatory system. 

Our system of public protections has made America a better, 

safer place. Workplace fatalities are a fraction of what they used 

to be. Our air is less polluted. Our rivers are cleaner. Our food, 

drugs, toys, and cars are all infinitely safer than they were 30 

years ago. 

Our system of public protections has given us the highest standard of living in the world. They have encouraged our businesses to 

innovate and to improve, and they have produced broadly shared 

prosperity. 

But our infrastructure, both public and private, as we have mentioned here, is aging. Resources for enforcement are declining. Resources for inspections are declining. And our standards and safeguards are not keeping up with the fast of scientific knowledge, because our rulemaking system has become increasingly slow and 

opaque. The regulatory process has been burdened by unnecessary 

delays, process burdens, analytic requirements, and new legal challenges, all of which make it harder for us to translate new scientific 

knowledge and evidence into effective public action. 

And while we wait, children and elderly people develop preventable cancers, toddlers get run over in driveways, workers are debilitated by respiratory diseases, and the planet warms. 

My testimony will only focus on one step in the current Federal 

regulatory process: the review of proposed rules by OIRA. 

We need to recognize that Federal agencies now take on average 

4 to 8 years to complete a rule. These rules are based on comprehensive scientific reviews of the literature by experts and testimony and materials collected from a variety of stakeholders, including regulated industries. But centralized review by OIRA actually delays the completion of these rules by demanding duplicative 

cost/benefit analyses and by exerting behind-the-scenes pressure on 

agency personnel to change the rules, almost always in ways that 

weaken public health and safety protections. 

Current policy established a 90-day deadline for OIRA to review 

new rules and requires it to be transparent about the changes that 

it asks agencies to make, but the deadlines are often missed, and 

transparency is circumvented by informal review that can start at 

the very beginning of the rulemaking process. 
26 

1The prepared statement of Ms. Sager appears in the Appendix on page 104. 

So what do we recommend? Once a rule has been formally submitted to OIRA for review, a failure to meet the 90-day deadline 

should be considered default approval, and the rule should be published. The scope of agency actions that require OIRA review 

should be limited. Congress should stipulate that OIRA may not review agency guidance documents, pre-rulemaking actions, or rules 

that are not economically significant. This would reduce its caseload and its workload. 

Agencies should not be forced to engage in resource-intensive exercises about paring back outdated rules. They need to be scanning 

for emerging threats and risks. We have increasing numbers of 

chemicals, new chemicals that are being used in industrial processes, new drugs, new medical technologies, emerging nanotechnology, more imports in this country than we have ever had before. 

We need our public protective agencies to be looking outward and 

identifying emerging risks, not looking backward. 

On transparency, we think OIRA should be required to provide 

copies of pre-and post-review versions of the rule in the rulemaking 

document. They need to provide a description of all the substantive 

changes made to a rule during both the informal as well as the formal review process in clear and simple language. We need to know 

what changes are being made by entities inside the Executive Office of the President, an agency not responsible for the rule, and 

by individuals who are not employed by the executive branch agency, because we do see industry influence coming into play at the 

very end of the rulemaking process. 

Finally, we would like to see OIRA be required to provide a summary of the subject matter that is discussed at meetings with outside groups. In response to Senator Tester’s question, they do not 

post summaries of what is being discussed at the meeting. They 

say who is in it, and then they post the material, but not what is 

being discussed. The public has a right to know why important 

public protections are being delayed and oftentimes weakened and 

who is in on those decisions. 

Thank you. 

Senator TESTER. Thank you very much for your testimony. 

Michelle Sager. 

TESTIMONY OF MICHELLE SAGER,1 DIRECTOR, STRATEGIC 

ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. SAGER. Chairman Tester, Ranking Member Portman, and 

Senator McCaskill, thank you for inviting me to be with you today 

to talk about some of GAO’s prior work, our findings, as well as 

updates on our recommendations. I am pleased to have the opportunity to discuss these important Federal rulemaking process 

issues. 

One common theme that has repeatedly emerged in our body of 

work is the importance of transparency in the rulemaking process. 

Drawing on that body of work, my remarks today will focus on 

three key topics: first, agencies’ retrospective reviews of their rules; 

second, the transparency of the regulatory review process; and 

then, third, a brief mention of some additional challenges and op-
27 

portunities for increasing public participation as well as knowledge 

of the rulemaking process to outside parties. 

So, first, with regard to retrospective regulatory reviews, in 2007 

we found that agencies were actually conducting many more of 

these reviews than was readily apparent to the public. We also 

found that reporting on the outcomes of these reviews was often 

lacking. Agencies reported that most of their retrospective reviews 

were actually conducted so that they could get a better sense of the 

effectiveness of their existing regulations. Agencies also told us 

that their retrospective reviews, their discretionary reviews more 

often resulted in changes than their mandatory reviews, which 

most often resulted in no changes. 

We made seven recommendations to OMB in that report in 2007, 

and OMB acted upon those recommendations. In addition, the Administration addressed our recommendations through additional 

guidance to agencies, asking them to plan for and conduct retrospective analyses as well as to establish plans for how they would 

conduct these analyses. 

We are currently completing additional work at the request of 

Senators Johnson and Warner, and this forthcoming report will 

look at more recent updates on the retrospective review process, 

factors that either facilitate or impede these analyses, as well as 

the extent to which agencies are making a connection between 

their retrospective regulatory reviews and their agency priority 

goals. 

I would now like to shift topics and move from retrospective reviews to the transparency of the regulatory review process. 

In a series of products between 1996 and 2009, we consistently 

found that OIRA’s reviews of agencies’ draft rules often did result 

in changes, but the transparency and documentation of those 

changes resulting from the review could definitely be improved. 

To date, OIRA has implemented only one of these recommendations, the recommendation that we heard about previously, to post 

information about the meetings with outside parties. We continue 

to believe that our past recommendations still have merit and that, 

if implemented, they would improve the effectiveness and the 

transparency of the rulemaking process. 

Third, I would like to briefly mention two additional recent GAO 

reports that identify progress made in facilitating transparency and 

public participation as well as additional opportunities for improvement. These reports are summarized in greater detail in my written statement that will be entered for the record, but in brief, the 

first of these reports in 2012 found that agencies frequently cited 

what is known as the good cause exception in publishing final rules 

without Notices of Proposed Rulemaking. And, in addition, in 2013 

for the first time we reviewed agencies’ international regulatory cooperation efforts. Both of these reports also contained additional 

recommendations to OMB. 

In conclusion, as you all know, agencies issue thousands of rules 

every year that affect numerous aspects of all of our lives as citizens as well as consumers. The rulemaking process must balance 

the public’s right to be informed and involved with the agencies 

and OMB’s need to efficiently and effectively implement their mis-
28 

sions. The recommendations that I discussed in my statement 

today intend to facilitate this balancing act. 

Mr. Chairman, this concludes my prepared statement. Again, I 

thank you for the opportunity to appear before you today, and I 

look forward to any questions you and other members may have. 

Senator TESTER. Thank you for your testimony, Ms. Sager, and 

thank you, everybody, for your individual testimony. 

I am going to turn to Senator Portman at this point in time, and 

he can rock and fire. 

Senator PORTMAN. Great. Thank you, Chairman. I appreciate it. 

And, Ms. Sager and Ms. McFate and Ambassador Gray, I appreciate your testimony and the time you have put into this. We had 

a great discussion earlier about the Permitting Act, the Independent Agencies Act, Regulatory Relief Act, which is—the Regulatory Accountability Act, and I just have a general question, if I 

could, for you, Boyden, and that has to do with the comment you 

made in your testimony about procedural reform versus substantive reforms. And you said in your testimony, and I appreciate 

this, that you do support the regulatory relief efforts, and you have 

been part of helping us put together things that make sense here 

for looking at regulations prospectively. But you also make the 

point that while procedural reforms are critical to cleaning up the 

regulatory process, you say equally important are substantive reforms to underlying agency statutes to rein in delegated regulatory 

authority and limit burdensome overreach. 

You talk about the 1987 act where Congress repealed the power 

plant and fuel uses prohibition against power companies using natural gas, which is very timely in my State of Ohio. There are few 

folks in Youngstown, Ohio, who are happy that Congress took that 

action, and across eastern Ohio. 

But what are some other examples of regulations today that you 

think should be addressed through a substantive congressional action to preserve jobs and grow the economy? 

Mr. GRAY. Well, the reason I mentioned the much feared, maybe 

little known PSD permitting program is because that is something 

that stems from the underlying Clean Air Act statute itself. And 

the Supreme Court heard argument last week—it may throw it 

out—but the Clean Air Act is one example of where it has been 

around for a long time and has not been actually revised since 

1990. It is hard for the Environment and Public Works Committee 

to open it up. That is why I suggested a joint committee for statutory review. 

But the Clean Air Act is one place where I would certainly start, 

and I could get into a discussion of that which would take the rest 

of the afternoon, and so I will stop with just the Clean Air Act. But 

that one provision for dealing with the permitting is absolutely ripe 

for congressional revisiting. 

Senator PORTMAN. On the permitting side, Senator McCaskill 

helped put this together, and she is going to join us here again in 

a second, but you talked about the fact that Senator King’s testimony that the current approach the government is taking is holding back our economy, stifling job growth, I think that is clearly 

true when you look at where the United States has fallen, again, 

relative to other countries. And it is a global economy, and just the 
29 

fact that it is tough to find investors for some of these projects, 

there is so much uncertainty, and sometimes certainty, as to the 

length of time. 

You said that there are myriad other examples in addition to 

Cape Wind that do not earn such equivalent public notice. I mentioned this American Municipal Power (AMP) hydro plant on the 

Ohio River earlier, but I could also mention a gas processing facility in Harrison County. It was delayed because of an archaeological 

find that was over a mile away. And it caused a significant increase in the cost because they had to push it into the winter 

months, and so on, a country road that more than doubled in cost 

because a Federal Highway Administration (FHWA) permitting 

process resulted in 6 months of delays; a wind turbine project in 

Logan County, they ended up canceling that because of the delays. 

So this is just in my State, but do you have other examples of 

that? And what do you think it will take Congress to sort of get 

notice of this? And how do we educate people as to what the permitting process is resulting in, in terms of jobs? Boyden, you are 

still up. 

Mr. GRAY. So your question is: What does the permitting do? 

Senator PORTMAN. Yes, other examples of that and how do we 

better educate people as to what permitting delays and costs result 

in terms of jobs. 

Mr. GRAY. Well, my answer is sort of like Senator King’s response, that the real harm is what you do not know, which is the 

projects that never got off the ground, the projects that you referred to, you cannot get an investor. That is impossible to measure. That is why permitting is so insidious. 

I remember the detail that the Southern Company executive 

gave, talking about one of the biggest power plants they have, 

which I do not think is in Ohio but it is in the Midwest somewhere, 

not in the South. They were able to get it permitted in 6 months. 

They cannot get anything permitted in 6 years today. And that 

would be for trying to get a wind project going or a solar project 

going, something that would be extremely clean in terms of the environment, or a natural gas project, which is much cleaner than 

coal. 

So even things that are supposed to be cleaner get caught up in 

this permitting, and that does not make any sense. But to put a 

money value on it is impossible, and the metric that I think is the 

most important is the one you used. You see these international 

rankings where the United States has fallen back to 34th, used in 

one survey. That is terrifying, really. This country should be No. 

1 or No. 2. And there is no way to put a dollar value that I know 

of on projects that do not even get started. 

Senator PORTMAN. Yes. Well, thank you. 

Thank you, Chairman. I have to run to my next one I am late 

for, but I appreciate all the testimony and will look forward to having some written questions to you all, if that is OK, and getting 

some responses. Thank you. 

Senator TESTER. Thank you, Senator Portman. 

Once again I appreciate the testimony by each and every one of 

you today. I am going to start with you, Katherine. You are an advocate for maintaining the 90-day review mandate. In fact, you 
30 

said in your testimony that if they did not meet it, it would be a 

default approval. 

Ambassador Gray talked about the fact that they had 90 people 

working in OIRA in 1981 and its down to 45 now. What is your 

feeling about their staffing? Do you think it is adequate? Do you 

think they need more folks? 

Ms. MCFATE. I think it is not adequate for what they are trying 

to do, and they need to stop trying to do so much. If you took just 

that—if they only looked at economically significant rules and we 

actually took that $100 million mark in 1978 and did it as a percentage of the economy today, it would be rules that had a cost of 

more than $660 million in an economy the size of ours today. 

So I think that there are things that they are trying to do that 

they should stop trying to do, and if they did, then they would be 

able to meet their deadlines better. 

Senator TESTER. OK. Ambassador Gray, whenever you talk about 

changing environmental and judicial review, that always brings up 

all sorts of folks that are concerned about it, and depending on 

where it is done, my concerns, too. You have been around the horn 

a few times. Do you see this-—if we were to change environmental 

and judicial review, could it lead to more litigation? Or do you see 

it differently? 

Mr. GRAY. Well, it might lead to more litigation, but remember, 

we have been through this big debate just recently about the workload of the D.C. Circuit, which before the addition of the last three 

judges had the lowest caseload by far of any circuit court in the 

country. So I do not think increasing the workload of that court, 

when you have added three judges to the lowest workload court already, I do not think that is a burden that is going to be insuperable. 

Senator TESTER. OK, good. Ms. Sager, your last report on regulatory lookback was released in 2007. It appears that the Administration has attempted to incorporate many of your recommendations such as increased public engagement in its current lookback 

program. 

Today you testified that, if effectively implements, these changes 

will improve transparency, credibility, and effectiveness of the retrospective analysis. What challenges to implementation do you 

foresee? 

Ms. SAGER. Again, I should mention, as I noted in my statement, 

we will have additional work on this topic coming out within the 

next month or so, which will illuminate some of these issues. However, based on publicly available information, certainly we expect 

some of the same issues that we found in 2007 to remain true 

today, in part due to some of the challenges that we have already 

discussed, which are fewer resources to conduct the reviews and 

sometimes overlapping or duplicative requirements for multiple 

types of reviews. 

Having said that, agencies are conducting more retrospective reviews than is readily apparent often to the general public. One of 

the challenges of conducting those reviews is knowing what the actual results of those reviews are and what perhaps the cost savings 

might be. This is in part because agencies have different metrics 

that they are using as they come up with costs. They may have dif-
31 

ferent assumptions. They may have different time periods that they 

are using in their retrospective reviews. So one common question 

we get is: Can we aggregate this information and come up with a 

total cost savings? And that is difficult to do at best and difficult 

to defend methodologically. 

Senator TESTER. And did you just say there is going to be a report coming out from GAO? 

Ms. SAGER. Yes, we are doing a report at the request of Senators 

Johnson and Warner. 

Senator TESTER. And it will be out when? 

Ms. SAGER. It should be out in the next month or so. 

Senator TESTER. And will it have additional recommendations in 

it? 

Ms. SAGER. It most likely will. We are still finalizing our review 

process. 

Senator TESTER. OK. You pointed out in your testimony that 

OIRA has only implemented one of the 12 GAO recommendations 

on how OIRA can increase its transparency. Has the Administration made any additional progress on transparency? 

Ms. SAGER. They have implemented that recommendation. As I 

mentioned, we have additional recommendations in our more—— 

Senator TESTER. So it is just that one recommendation, that is 

it? 

Ms. SAGER. That is the only one that they have implemented, 

and we do update those—we do followup on those recommendations 

every year, if not—— 

Senator TESTER. OK. So what do you see as the biggest obstacle 

to transparency? 

Ms. SAGER. One of the challenges is they are legally complying 

with what they are supposed to do, but certainly the public could 

be better informed, stakeholders could be better informed if they 

did things such as made clear when a rule is changed during the 

review process, what is the substantive nature of that change. 

Sometimes it may not be a substantive change. It may just be a 

typographical error or some minor change. But for interested parties to sort through the rule that is submitted and then the final 

rule and determine what the nature of that change is, a simple 

identification of what the nature of the substantive change is could 

go a long way toward making that more transparent. 

Senator TESTER. So I had asked the question to Mr. Shelanski 

earlier, and Ms. McFate talked about it a little bit, and that was 

discussions ahead of the process, they would issue a summary but 

they did not issue what was discussed, what was actually talked 

about. Is there a problem with that from your perspective? 

Ms. SAGER. That is not something we have specifically looked at. 

In our prior report, we did recommend that they just simply make 

public who they are meeting with and what the nature of that 

meeting is, and that is something that they have taken action on. 

Senator TESTER. It appears to me it might be beneficial to hear 

but to be able to read what they discussed. 

Ms. SAGER. To understand the substance of the meeting. 

Senator TESTER. OK. Well, I want to thank you all once again 

for being here and taking time out of your busy schedule and discussing a very important topic, not only to Senator Portman, Sen-
32 

ator Pryor, Senator McCaskill and myself, but a lot of others in the 

Senate. So I just thank you for your time. 

Let me see here, make sure I get the homework done here. The 

hearing record will remain open for 15 days for any additional comments or questions. Thank you again to our witnesses. 

This meeting is adjourned. 

[Whereupon, at 4:12 p.m., the Subcommittee was adjourned.] 
(33) 

A P P E N D I X 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 
107 
108 
109 
110 
111 
112 
113 
114 
115 
116 
117 
118 
119 
120 
121 
122 
123 
124 
125 
126 
127 
128 
129 
130 
131 
132 
133 
134 
135 
136 
137 
138 
139 
140 
141 
142 
143 
144 
145 
146 
147 
148 
149 
150 
151 
152 
153 
154 
155 
156 
157 
158 
159 
160 
161 
162 
163 
164 
165 
166 

Æ