U.S. GOVERNMENT PUBLISHING OFFICE

32–690 PDF WASHINGTON : 2018

THE BENEFITS OF A DEREGULATORY AGENDA: 

EXAMPLES FROM PIONEERING GOVERNMENTS 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON 

INTERGOVERNMENTAL AFFAIRS 

AND THE

SUBCOMMITTEE ON HEALTHCARE, 

BENEFITS, AND ADMINISTRATIVE RULES 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 27, 2018 

Serial No. 115–108 

Printed for the use of the Committee on Oversight and Government Reform 

( 

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

http://oversight.house.gov 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Trey Gowdy, South Carolina, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Greg Gianforte, Montana 

Michael Cloud, Texas 

Vacancy 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Jimmy Gomez, Maryland 

Peter Welch, Vermont 

Matt Cartwright, Pennsylvania 

Mark DeSaulnier, California 

Stacey E. Plaskett, Virgin Islands 

John P. Sarbanes, Maryland 

SHERIA CLARKE, Staff Director 

WILLIAM MCKENNA, General Counsel 

JAMES LESINSKI, Counsel 

BRICK CHRISTENSEN, Senior Policy Advisor 

SARAH VANCE, Healthcare, Benefits, and Administrative Rules Subcommittee Staff Director 

SHARON CASEY, Deputy Chief Clerk 

DAVID RAPALLO, Minority Staff Director 


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SUBCOMMITTEE ON INTERGOVERNMENTAL AFFAIRS

Gary Palmer, Alabama, Chairman 

Glenn Grothman, Wisconsin, Vice Chair 

John J. Duncan, Jr., Tennessee 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Walker, North Carolina 

Mark Sanford, South Carolina 

Jamie Raskin, Maryland, Ranking Minority 

Member 

Mark DeSaulnier, California 

Matt Cartwright, Pennsylvania 

Wm. Lacy Clay, Missouri 

Vacancy 

SUBCOMMITTEE ON HEALTHCARE, BENEFITS, AND ADMINISTRATIVE RULES

Jim Jordan, Ohio, Chairman 

Mark Walker, North Carolina, Vice Chair 

Darrell E. Issa, California 

Mark Sanford, South Carolina 

Scott DesJarlais, Tennessee 

Mark Meadows, North Carolina 

Glenn Grothman, Wisconsin 

Paul Mitchell, Michigan 

Raja Krishnamoorthi, Illinois, Ranking 

Minority Member 

Jim Cooper, Tennessee 

Eleanor Holmes Norton, District of Columbia 

Robin L. Kelly, Illinois 

Bonnie Watson Coleman, New Jersey 

Stacey E. Plaskett, Virgin Islands 


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C O N T E N T S 

Page 

Hearing held on September 27, 2018 ..................................................................... 1 

WITNESSES 

Ms. Laura Jones, Executive Vice President and Chief Strategic Officer, Canadian Federation of Independent Business 

Oral Statement ................................................................................................. 6 

Written Statement ............................................................................................ 9 

Mr. Matt Vickers, Product Sales Engineer, New Markets, Xero 

Oral Statement ................................................................................................. 49 

Written Statement ............................................................................................ 51 

Mr. Scott Brinkman, Secretary of the Executive Cabinet, Commonwealth 

of Kentucky 

Oral Statement ................................................................................................. 56 

Written Statement ............................................................................................ 58 

Mr. Amit Narang, Regulatory Policy Advocate, Public Citizen 

Oral Statement ................................................................................................. 61 

Written Statement ............................................................................................ 64 

APPENDIX 

January 13, 2015, Gallup ‘‘American Entrepreneurship: Dead or Alive? submitted by Mr. Palmer 98 


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THE BENEFITS OF A DEREGULATORY AGENDA: EXAMPLES FROM PIONEERING GOVERNMENTS 

Thursday, September 27, 2018 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON INTERGOVERNMENTAL AFFAIRS, JOINT

WITH THE SUBCOMMITTEE ON HEALTHCARE, BENEFITS, 

AND ADMINISTRATIVE RULES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The subcommittees met, pursuant to call, at 2:14 p.m., in Room 

2247, Rayburn House Office Building, Hon. Gary Palmer [chairman 

of the Subcommittee on Intergovernmental Affairs] presiding. 

Present from Subcommittee on Intergovernmental Affairs: Representatives Palmer, Grothman, Massie, Walker, Raskin, and 

DeSaulnier. 

Present from Subcommittee on Healthcare, Benefits, and Administrative Rules: Representatives Jordan, Walker, Grothman, and 

Krishnamoorthi. 

Mr. PALMER. The Subcommittee on Intergovernmental Affairs 

and the Subcommittee on Healthcare, Benefits, Administrative 

Rules will come to order. Without objection, the presiding member 

is authorized to declare a recess at any time. 

Over the past several decades, regulations imposed by the Federal Government have had an adverse impact on economic activity 

as these Federal regulations have accumulated over time. Regulatory accumulation is a drag on our economy, and it stifles innovation. According to a recent study by the Mercatus Center, the Federal regulations had held at the 1980 levels, our economy would be 

nearly 25 percent larger than it was as of 2012. 

We have seen the results of this regulatory accumulation and the 

stunning decline of the number of new businesses. A Gallup organization report from back in 2015 showed that American business 

deaths outnumbered business births. I have a copy of that entitled, 

‘‘American Entrepreneurship: Dead or Alive?’’ that I would like to 

enter into the public record and will do so without objection. 

Mr. PALMER. In my experience in Alabama, people don’t want to 

start a business when the overwhelming uncertainty of the regulatory process threatens to come down on them. Why bother when 

the risks are compounded by a myriad of complex and sometimes 

contradictory regulations? 

Recognizing the potential benefits of a deregulatory agenda, 

President Trump called for a one-in, two-out ratio for new reguVerDate Nov 24 2008 14:09 Dec 06, 2018 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 H:\32690.TXT APRIL

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latory actions. The shift in regulatory policy is expected to save 

business owners and entrepreneurs both time and money. While 

the United States is still in the early stages of implementing regulatory reform, we know from some of our foreign friends and allies 

that the push for deregulation has resulted in tremendous outcomes. 

In British Columbia, the Canadian Government experimented 

with regulatory reform beginning 2001. To date, the British Columbia Government has repealed more than 40 percent of their regulatory requirements. As a result, British Columbia experienced a 

period of per-capital GDP growth and business development that 

outpaced the national average in Canada. 

Another success story took place in Australia where the national 

government initiated a standard business reporting or SBR system 

that made it easier for businesses to report one time rather than 

typical duplicative reporting mechanisms. Savings from the SBR 

from 2015 to 2016 were roughly $1.1 billion in Australian dollars 

or $750–800 million U.S. 

However, we don’t have to look so far for success stories. Our 50 

States have shown what may work for the rest of the country. Kentucky Governor Matt Bevin instituted a red-tape reduction initiative. State officials are undertaking review of the entire pool of 

State regulations to identify those that are unnecessary, duplicative, and ineffective. 

In a short period of time, Kentucky has repealed 453 regulations, 

which is nearly 10 percent of Kentucky’s total pool of regulations. 

Kentucky officials report these efforts have led to the creation of 

roughly 40,000 jobs and $9.2 billion in direct investment in the 

State. 

We are fortunate to have with us at today’s hearing witnesses 

who can speak to each of these examples. I am eager to learn from 

them, what worked, what didn’t, and what could be done differently. 

I would like to make clear that this hearing is not about slashing 

regulations, as some may suggest. Our focus today is on streamlining reporting to make compliance burdens easier. Our focus is 

on helping small businesses survive and thrive in the 21st century. 

We are talking about eliminating obsolete, duplicative, and contradictory regulations that don’t make sense. 

I will close with something President Obama said about regulations back in 2011 in the Wall Street Journal. He wrote that, 

‘‘Sometimes those rules have gotten out of balance, placing unreasonable burdens on business, burdens that have stifled innovation 

and have had a chilling effect on growth and jobs.’’ I bring this up 

because to me this is something that we should all agree is important to our nation. 

For a nation as economically powerful as ours to lag behind our 

friends and allies when it comes to innovation and new business 

creation is not only unfortunate, it is a missed opportunity. I ask 

my Democratic friends to join us in making this a priority. 

I thank the witnesses again and look forward to hearing from 

each of you about regulatory reform success stories. I will also ask 

to have this Gallup report included in the record, as I mentioned 

earlier. And without objection, so ordered. 


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Mr. PALMER. I now recognize the ranking member of the 

Healthcare, Benefits, Administrative Rules Subcommittee, Mr. 

Krishnamoorthi, for his opening statement. 

Mr. KRISHNAMOORTHI. Thank you, Mr. Chairman, for holding today’s hearing, and thank you to all the witnesses for coming. And 

thank you for the audience for participating. 

I agree with all my colleagues that we need smart regulations, 

and we need to make sure that we keep the interests of taxpayers 

first. On the other hand, I am incredibly concerned about recent actions by the Trump administration, which I believe are shortsighted and will harm millions of Americans and increase costs to 

the Federal Government. 

In his second week in office, President Trump issued an executive order mandating that two regulations be eliminated for every 

new regulation proposed. This so-called two-for-one policy ignores 

numerous and well-documented economic benefits derived from 

many of the regulations that are proposed to be eliminated. 

President Trump’s attempts to rollback student loan protections, 

offshore drilling protections, environmentally sound fuel-efficiency 

standards, and consumer financial protections should alarm all 

people, Democrats and Republicans alike. If your workplace is 

OSHA-certified, if your food is approved by the FDA, or your local 

water supply certified as clean by the EPA, this executive order 

places your well-being potentially at risk. 

Just this week the House overwhelmingly passed an FAA reauthorization that contains several pro-consumer protections. It prohibits airlines from forcibly removing passengers, requires a minimum leg room for each seat, prohibits the use of cell phones in 

flight, and requires all airports to provide nursing rooms for mothers and babies. I don’t think that we should be forcing unelected 

bureaucrats to repeal any of these requirements without adequate 

thought and investigation. 

The President’s order imposes a needlessly arbitrary standard on 

public agencies that have a charge to serve the public. This particular rule ties the hands of public employees and prevents them 

from using the best-available evidence about which regulations 

should stay and which should be revised or repealed. The Office of 

Management and Budget annually issues a congressionally mandated report that identifies the cost of government rules on the private sector and the estimated financial benefits produced for the 

American people. Every Federal rule has a cost and a benefit, and 

this report is key to making sure that the benefits always outweigh 

the costs. We owe this to every taxpayer. 

Every year, this OMB-mandated report shows objectively that 

the economic benefits of Federal rules far outweigh the costs. Just 

last year, the totals were $4.9 billion in costs on businesses and 

$27.3 billion in benefits to the American public. This is a report 

that was commissioned by the Trump Office of Management and 

Budget. 

Let me be clear. The benefits always have to outweigh the rules. 

There is no question about it. We have to make regulations smart, 

and we owe this to the taxpayers. However, in a case like this 

where the Trump administration’s own OMB issues a report showing that the benefits of these rules and regulations outweigh the 


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costs by a measure of five to one, does it really make sense to have 

a two-for-one policy in terms of eliminating one for every two that 

are proposed? 

I thank our witnesses for sharing their testimony today, and I 

look forward to continuing this important discussion. Thank you. 

Mr. PALMER. I now recognize the chairman of the—excuse me. 

That is not predicative. 

Mr. RASKIN. Let’s not get ahead of ourselves. 

Mr. KRISHNAMOORTHI. Let’s not get ahead of ourselves. 

Mr. PALMER. Yes. Yes. I now recognize the ranking member of 

the Intergovernmental Affairs Subcommittee, Mr. Raskin, for his 

opening statement. 

Mr. RASKIN. Chairman Palmer, thank you so much. So a couple 

months ago we convened a hearing to discuss the theory that government-issued regulations are failing the American people, and at 

that hearing I tried to defend our regulatory process from the notice and comment period through regulatory enforcement as simply 

a set of rules. And I reminded my colleagues that rules are ubiquitous. There are sets of rules we follow every day, and all of us 

have no doubt followed dozens of rules even just since waking up 

this morning. 

Our job in Congress here is to pass laws that reflect the values 

of the people and implement our priorities, and agencies help us do 

that by adopting rules to execute and enforce those laws. 

At that same hearing we took a tour of some of the most celebrated rules ever promulgated by agencies, for example, the seatbelt rule, the overtime rule, and so on. Like these, most Federal 

rules are commonsense protections of vital freedoms that we cherish, freedom from air pollution and water pollution, freedom from 

dangerous consumer appliances, freedom from workplace discrimination and predatory business practices and monopolies. Rules 

have made our people freer and our country safer, healthier, cleaner, and more secure. And my opinion has not changed on that. 

As we know, regulation is just a fancy name for a rule, and we 

all live according to them. Every household, every family, every 

sport, every school, every road and highway, every institution, 

every economy, every corporation, Congress and indeed this committee, we all have rules that we adhere to and live by. 

In one of his first official acts, President Trump issued an executive order directly targeting rules. His so-called two-for-one policy 

arbitrarily called for the repeal of two existing rules for every new 

one promulgated with zero attention to the economic and social 

benefits that those rules might be continuing to our country. That’s 

like saying every time we pass a law, we should have to repeal two 

laws. But I remember a moving passage from Judge Learned Hand 

who said ‘‘Thou shalt not ration justice.’’ President Trump and my 

colleagues in the House have made destroying government rules 

one of their top priorities. They have made deregulation a political 

fetish. And they are indeed rationing justice. 

Behind all the deregulatory rhetoric, the majority is on a crusade 

to scrap rules that limit the power of big corporations or rein in 

Wall Street and the financial industry. They are targeting regulations under the Clean Water Act and the Clean Air Act, rules that 

restrict the freedom of polluters. I can’t count the times we voted 


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in the House on creating new rules that interfere with women’s 

rights to make their own healthcare decisions and decisions about 

birth control and reproduction. 

We have stalled the Farm Bill over new regulations that they 

want to seek. They want to impose work requirement rules on 

SNAP recipients, and they are inventing new rules to stop legal immigrants who want to become citizens from accessing certain government programs. This kind of bureaucratic extremism proliferates more regulation and more red tape not in the pursuit of 

justice or freedom but control and power. 

Since our last hearing in July, the administration has only added 

to its hit list of targeted Obama-era rules. The administration sold 

out working-class families who strive to attain a college education 

by allowing Secretary DeVos to rescind the borrower defense rule. 

For-profit colleges will now be able to engage in predatory behavior 

again with relative impunity. Just last month, the White House announced the repeal of fuel-efficiency standards. This troubling rule 

reversal will allow almost a billion metric tons of carbon dioxide 

into the atmosphere in the next 20 years and increase consumer 

spending on gasoline by $20 billion by 2025. 

Rules generally make our country safer, healthier, and more just. 

Unfortunately, the administration is using rules to rollback 

progress, pollute our environment, and imperil our freedoms. The 

costs of an America without any rules are not hard to imagine and 

they are impossible to accept. We cannot risk American lives and 

our nation’s environment because the President wants to reward 

big campaign donors and corporations while using the regulatory 

boogieman to try to destroy democratically chosen regulations. 

Let’s think pragmatically and not ideologically. Let’s remember 

that Federal regulations are just our rules, and when it comes to 

building a strong democracy, laissez isn’t fair. 

I appreciate all of our witnesses for their time and testimony 

today, and I look forward to an important discussion about the continued utility of the rules we all rely on. 

I yield back, Mr. Chairman. 

Mr. PALMER. I thank the gentleman. 

The chair now recognizes the chairman of the Healthcare, Benefits, and Administrative Rules Subcommittee, Mr. Jordan, for his 

opening statement. 

Mr. JORDAN. Thank you, Mr. Chairman. And I disagree with so 

much of what my good friend and colleague from Maryland just— 

and I do mean good friend. We got a bill we are working on together that would—actually, he mentioned rationed justice. I do 

think we need to ration regulations, but we got a bill we are working on that focuses on the Constitution and the rights of those in 

the press not to have the government force them or compel them 

to give their confidential source away. So I appreciate the gentleman, the professor from Maryland, but I just disagree. 

I think you go ask almost any American, do you think 72,000 

rules that the EPA has on the oil and gas industry in our State 

is probably too many? It probably is. So that is all we are focusing 

on here is that idea that maybe we got a little too much government. Let’s get back to commonsense regulation. Some of the 

things I think that the administration has done on the regulatory 


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front have been helpful and have led to this amazing economic 

growth we have witnessed over the last 20 months, 4.2 percent 

annualized growth rate right now, which is tremendous, and far 

better than where we were just a few years ago. So that is what 

is at stake here. 

And I appreciate the chairman having this hearing. And because 

I walked in 22 minutes late for committee, I am going to yield back 

the remainder of my time so we can get right to our good set of 

witnesses here. Thank you, Mr. Chairman. 

Mr. PALMER. I thank the gentleman. 

I am now pleased to introduce our witnesses: Ms. Laura Jones, 

executive vice president and chief strategic officer of the Canadian 

Federation of Independent Business. Thank you for being here; Mr. 

Matt Vickers, product sales engineer, New Markets at Xero. Thank 

you; Mr. Scott Brinkman, secretary of the executive cabinet for the 

Commonwealth of Kentucky, appreciate your presence; and Mr. 

Amit Narang, regulatory policy advocate at Public Citizen. Thank 

you, sir, for being here. 

Pursuant to committee rules, all witnesses will be sworn in before they testify. Please stand and raise your right hand. 

[Witnesses sworn.] 

Mr. PALMER. The witnesses may be seated. The record will reflect that all witnesses answered in the affirmative. 

In order to allow time for discussion, please limit your testimony 

to five minutes. Your entire written statement will be made part 

of the record. 

As a reminder, the clerk in front of you shows—the clock in front 

of you—and we can get a clerk if we need to. As a reminder, the 

clock in front of you shows the remaining time during your opening 

statement. The light will turn yellow when you have 30 seconds 

left—and unlike a traffic light, that does mean speed up—and red 

when your time is up. So please remember to press the button in 

front of your microphone before speaking. 

I am pleased now to recognize Ms. Jones for her testimony. 

WITNESS STATEMENTS 

STATEMENT OF LAURA JONES 

Ms. JONES. Chairman Jordan, Chairman Palmer, Ranking Members Raskin and Krishnamoorthi, I want to thank you for inviting 

me to testify. I bring very warm wishes from north of the border. 

And by way of background, my interest in regulatory reform 

comes from my roots as an economic researcher and also from my 

current position at the Canadian Federal of Independent Business, 

representing and advocating for small-business owners who, like 

their American counterparts, are deeply affected by regulation. 

I’m here today to talk about the British Columbia model of regulatory reform, and I think the overarching lesson from this model 

is that a substantial reduction in government rules is possible 

without negatively affecting the human health, safety, and environmental outcomes that we all care about. And I think this is important because it speaks directly to the challenge that modern governments in developed countries face, which is how do you best 


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control red tape while protecting the important justified regulations? 

And we know this is important because excess regulation or red 

tape leads to a host of bad consequences from reduced incomes to 

increased income inequality and poverty. Governments of all 

stripes tend to agree that reducing red tape is a worthy objective, 

but accomplishing this objective can prove elusive. 

This is where the British Columbia model stands out. It stands 

out as a model that has delivered results. The main result is a 49- 

percent reduction in regulatory requirements since 2001. And the 

three keys to accomplishing this result: political leadership, regulator involvement, and simplicity. 

By way of context, British Columbia is Canada’s westernmost 

province, and its reform started 17 years ago in 2001. At the time, 

economic growth and employment in the province lagged the rest 

of the country and had done so for most of the previous decade. The 

’90s is often referred to as the dismal decade in British Columbia. 

Excessive regulation was—examples of excessive regulation were 

just not that hard to come by, so, for example, forest companies 

were told what size nails they had to use to build small bridges 

over streams. Restaurants were told what size television sets they 

could have in their establishments. 

So in 2001, a new government was elected, and they had made 

the campaign promise that they would improve the economy, including reducing regulation by one-third in three years. The government accomplished this goal and more, and there were three 

key elements to the reforms. First, a minister was appointed whose 

only job it was to quarterback and champion these reforms and 

make sure they were put in place. Second, a measure that was simple enough that it could be applied broadly across government 

rules was used. And finally, two regulatory requirements had to be 

eliminated for every new one introduced. And this policy was later 

changed to one in, one out. 

In terms of the reforms outcomes, by 2004 the one-third target 

had been exceeded. And once the target was met, this new one-forone policy was put in place. But here’s the interesting thing: The 

regulatory restrictions level, requirements level did not stabilize at 

the one-third reduction but continued to go down to the 49-percent 

reduction that I said. Regulators continued to identify rules to cut 

faster than they were adding rules, although there was no longer 

any pressure to cut. I think that’s an interesting outcome. 

In terms of outcomes, of course, it’s also important that this 

wasn’t just about cutting rules for the sake of cutting rules. It was 

also about maintaining high outcomes. And there were high outcomes of health, safety, and environment that were maintained. 

Another outcome, the province went from being one of the worstperforming economies in the country to being one of the best. 

So in conclusion, I want to repeat the three lessons that I think 

come from this model. Political leadership matters. The involvement of regulators matters. Regulators are not the enemy in this 

story. They were an important part of the solution. And the final 

reason for success is simplicity. Somewhat ironically, I think it’s 

tempting to overcomplicate regulatory reform, and the thing that 

really distinguishes B.C.’s regulatory reforms is its reliance on a 


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clear simple measure that could be applied broadly and communicated easily. And so there’s a place for more complicated measures, but there’s also a place for simpler ones. 

And with that, I’ll conclude my comments and thank you very 

much. I look forward to questions. 

[Prepared statement of Ms. Jones follows:] 


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Mr. PALMER. Thank you for your testimony. 

The chair now recognizes Mr. Vickers for five minutes for his testimony. 

STATEMENT OF MATT VICKERS 

Mr. VICKERS. Great. Firstly, I want to thank the Committee on 

Oversight and Government Reform and the subcommittee members 

here today for the opportunity to discuss standard business reporting. 

My name is Matt Vickers. I work for a publicly listed accounting 

software company Xero. 

In 2005, the Australian Government established a task force to 

review compliance burdens on Australian businesses. Their report 

shared that a typical New South Wales business spends 400 hours 

per year or A$10,000 on the preparation and sending of paperwork 

to government. It’s estimated that the total cost of regulation to the 

Australian economy in 2005 was A$86 billion or 10 percent of that 

country’s gross domestic product. That’s about $62 billion U.S. And 

Australia has 7 percent of the population of the United States, so 

you can extrapolate from there. 

The task force offered 100 recommendations for reducing the regulatory burden on businesses. One recommendation was to simply 

financial reporting for individual businesses, and a standard business reporting work group was established. The work group aimed 

to optimize existing government processes to reduce business compliance costs to A$800 million over six years at a cost of A$320 million. 

Standard business reporting, or SBR, is the idea that multiple 

regulatory agencies should agree on common standardized data 

structures and elements for the information they collect from private sector businesses. By asking for this information in a consistent fashion, it removes the need for a business to resubmit the 

same information in multiple ways for multiple agencies. 

So I could ask you to imagine a small business in Wisconsin or 

Kentucky or California being able to add a new employee into their 

system or add a new director or shareholder or prepare all their 

State and income taxes and have all the relevant Federal and State 

agencies being given updated information almost instantaneously 

as the result of one data change within—made by the business 

owner. And imagine being able to do all that from a single piece 

of software. That’s the power of this SBR and that’s what we’re 

talking about here. 

SBR does not change the intent or the content of regulatory reports but instead improves the efficiency of the government-business interactions by standardizing the information the private sector is required to report. The implementation of SBR began in 2008 

and the first reports were available two years later. It did not require any regulatory change. And as the chairman stated in his 

opening remarks, the Australian Tax Office estimated that the 

changes saved the government and companies A$1.4 billion in compliance costs during the 2016 tax year, far exceeding that original 

six-year goal of A$800 million. In 2018, an Australian business can 

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gle software environment. More agencies are planned to come on 

board in the future. 

SBR removed the technology and cost barriers for Xero and other 

software vendors like us to integrate securely with multiple government systems. Xero’s software now allows Australian businesses to 

make use of a single regulatory reporting solution for multiple 

agencies direct from their accounting system. 

In the U.S., there are a number of relevant policy reforms already under way. This committee has already accomplished a large 

governmentwide data standards project. The Digital Accountability 

and Transparency Act of 2014 mandated that the Treasury Department create a governmentwide data taxonomy. The DATA Act information model scheme that now governs around 100 Federal 

agencies report their spending activity. This shows that the government here is now practiced at such reforms. 

The House of Representatives unanimously passed the Open, 

Public, Electronic, and Necessary Government Data Act as part of 

the Foundations for Evidence-Based Policymaking Act, which 

would require all Federal agencies to maintain public data assets 

in machine-readable formats. And just last night, the House passed 

the Grant Reporting Efficiency and Agreements Transparency Act, 

which accomplishes reforms similar to SBR for U.S. Federal grant 

reporting. 

Though none of these ledgers of reforms explicitly address Federal financial reporting by all businesses, they do offer examples of 

efforts to seek governmentwide reporting standards and require 

machine-readable data for reporting in other domains. In the 

United States where Federal and State agencies operate on a much 

larger scale, legislation is likely to be required to compel agencies 

to work together to accomplish reforms similar to the SBR program 

in Australia. 

The Financial Transparency Act is a bipartisan legislative proposal which would require all eight major Federal financial regulators to adopt a standardized data structure for the information 

they collect from public companies, banks, and financial firms, and 

with the right support in Congress, such legislation could form the 

basis of genesis of SBR in the United States. 

It’s our belief that well-deployed technology has the potential to 

reduce the cost of government and compliance to the taxpayer. By 

reducing the compliance burden of small businesses, the capital can 

be redeployed to pursue income-generating activities. Like a tax 

cut, this puts money back in the hands of small businesses. But unlike a tax cut, this gives them something else: time. We believe the 

U.S. Government can realize these benefits on a far greater scale 

than the Australian example. 

Thank you for the opportunity to testify. Thanks. 

[Prepared statement of Mr. Vickers follows:] 


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Mr. PALMER. I thank the gentleman. 

The chair now recognizes Mr. Brinkman for five minutes for his 

testimony. 

STATEMENT OF SCOTT BRINKMAN 

Mr. BRINKMAN. Thank you, Chairman Palmer and Jordan, Ranking Members Krishnamoorthi and Raskin, and members of the subcommittees, for affording me this opportunity to discuss Governor 

Bevin’s Red Tape Reduction Initiative. 

Governor Bevin campaigned on a theme that is all about jobs, 

which at its core means creating a more inviting environment to 

attract both human and financial capital. Candidate Bevin’s Blueprint for a Better Kentucky listed seven action items that he would 

pursue if elected Governor. One of the action items was reforming 

State Government. Although there are many aspects to reforming 

State Government, a key component of that effort is modernizing 

Kentucky’s administrative regulations, and one of the first undertakings of the administration was the formulation and implementation of its Red Tape Reduction Initiative. 

As part of this initiative, every cabinet and agency within the executive branch has been directed to review every regulation promulgated by—over the years and make one of the following determinations: First, completely repeal the regulation as its original 

purpose is no longer relevant. 

second, amend the regulation to conform it to a Federal counterpart. This effort includes eliminating inconsistent definitions and 

standards with the goal that the State regulation should never be 

more burdensome than the Federal counterpart unless circumstances unique to Kentucky require a stricter standard. 

Third, amend and modernize the regulation to make it clear and 

simpler to understand by those subject to the regulation, and also 

make it easier to update in the future. 

Fourth, combine the regulation with other regulations to include 

a single subject matter such as fees and applications in one regulation for ease of review by those subject to it. 

Finally, leave the regulation as it’s currently written. 

The goal of the administration is to reduce by one-third the number of restrictions on businesses and individuals in Kentucky. In 

1975, there were four volumes of regulations in effect in Kentucky. 

That number had grown to 14 volumes when Governor Bevin took 

office. Our current data reflects that, of the approximately 4,700 

separate regulations on the books at the outset of the administration, over 2,700 regulations have been reviewed, 488 regulations 

have been repealed, 454 regulations have been amended, and 56 

new regulations have been promulgated. 

The initiative has the support of business groups, trade associations, chambers of commerce, and other organizations across Kentucky. There are several lessons to be learned from Kentucky’s Red 

Tape Reduction Initiative. First, the Governor must own the initiative in every aspect, and it helps to have a tangible symbol associated with the endeavor. In the case of Kentucky, we created the 

lapel pin that I’m wearing today, and Governor Bevin and his top 

officials wear this pin every day. Further, Governor Bevin speaks 

out regularly regarding the initiative—the importance of the Red 


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Tape Reduction Initiative to individuals and groups throughout 

Kentucky. As a result of the Governor’s leadership, there is growing awareness of the initiative every day throughout the Commonwealth. 

Second, it is important to create a website that is interactive 

with the public and allows for individuals to post recommendations 

on the repeal or amendment of regulations. Kentucky’s Red Tape 

Reduction Initiative website is RedTapeReduction.com. Kentuckians have submitted scores of thoughtful ideas on how to reduce 

unnecessary regulations that drive up the cost of conducting business and create inefficiencies without contributing to public health 

or public safety. 

Finally, the effort of the cabinets and other agencies must be sustained on a regular basis. Our cabinets and other agencies regularly review and re-review existing regulations to ensure that the 

goals of the Red Tape Reduction Initiative are being met. This is 

a thoughtful and deliberative process that never ends. 

We have also decided to digitize and modernize the manner in 

which our State agencies draft and promulgate regulations. To that 

end, Kentucky has contracted with Esper Regulatory Technologies, 

Inc., to provide state-of-the-art technological tools to our regulation 

drafters throughout the executive branch to assist them in the review of existing regulations and the promulgation of new regulations. 

In conclusion, the administration’s efforts to simplify the ability 

of Kentuckians to conduct business are paying valuable dividends. 

As of last month, Kentucky’s unemployment rate was 4 percent, 

which is the lowest it has been since 1976 when this statistic began 

to be tracked, and its workforce participation rate is trending towards 40th in the Nation from 47th when Governor Bevin took office. 

Kentucky also realized during the month of April this year the 

highest amount of monthly tax receipts in its history, driven largely by corporate and individual income tax receipts. Also as of last 

month, there were 1,983,103 Kentuckians in the workforce based 

upon preliminary numbers for August, which is the highest number 

of employed Kentuckians in the history of the Commonwealth. 

Kentucky attracted $9.2 billion of announced direct investment in 

the State in 2017, which is a record amount for any year, and approximately $16.8 billion since Governor Bevin took office, representing the creation of almost 46,000 jobs. 

There are many factors contributing to the success, including the 

enactment of smart and innovative legislation. However, it is the 

firm belief of the Governor that the implementation of the Red 

Tape Reduction Initiative and the exposure that it has received has 

contributed in large part to the growing perception that Kentucky 

is an attractive State in which to create and sustain good-paying 

jobs for its citizens. 

Thank you. 

[Prepared statement of Mr. Brinkman follows:] 


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Mr. PALMER. Just to inform our witnesses and the members of 

the committees, votes may be called between 3:15 and 3:30. It is 

my intent to conclude the hearing with the members who are 

present so that we do not have to hold you hostage while we go 

vote. 

So with that, I will now recognize Mr. Narang for five minutes 

for his testimony. 

STATEMENT OF AMIT NARANG 

Mr. NARANG. Chairmen Palmer and Jordan, Ranking Members 

Krishnamoorthi and Raskin, and members of the committee, thank 

you for the opportunity to testify today. I am Amit Narang, regulatory policy advocate at Public Citizen’s Congress Watch. Public 

Citizen is a national public interest organization with more than 

500,000 members and supporters. For more than 40 years, we have 

successfully advocated for stronger health, safety, consumer protection, and other rules, as well as for a robust regulatory system that 

curtails corporate wrongdoing and advances the public interest. 

Public health and safety regulation has been among the greatest 

public policy success stories in our country’s history. Regulations 

have made our air far less polluted and our water much cleaner; 

they’ve made our food and drug safer; they’ve made our workplaces 

less dangerous; they’ve made our financial system more stable; 

they’ve protected consumers from unsafe products and from predatory lending practices; they’ve made our cars safer; they’ve outlawed discrimination on the basis of race, gender, and sexual orientation; and much more. 

These regulations are now considered to be bedrock public protections widely popular with the public. In short, our regulatory 

safeguards are to be celebrated and emulated. Yet there is much 

more progress to be made addressing threats to the health, safety, 

environment, and financial security of hardworking American families. 

Unfortunately, President Trump and his administration are taking the country in exactly the opposite direction, embarking on a 

radical and unprecedented deregulatory agenda that has led to the 

corporate capture of our regulatory system of public protections. 

One of the key drivers of this administration’s attack on public protections is Executive Order 13771, the so-called two-for-one executive order that imposes a regulatory budget on agencies. 

When the executive order was issued, Public Citizen, along with 

partner groups, challenged the order in court as unconstitutional 

and illegal. And this lawsuit is ongoing and pending a district 

court. Our lawsuit stipulates that the order exceeds the President’s 

constitutional authority, violates his article II duty to take care 

that the laws are faithfully executed, and directs Federal agencies 

to engage in unlawful actions that harm members of the public, including members of Public Citizen. 

The order places requirements on agencies that are nowhere authorized by any statute, and in fact are in direct conflict with numerous bedrock public protection laws passed by Congress, which 

should be of utmost concern to members of this committee and all 

Members of Congress. None of the laws passed by Congress direct 

or even permit agencies to issue regulations that protect the public 


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only if they can first get rid of existing regulations that protect the 

public and only if the new regulatory protections impose no new 

costs on corporations or hurt corporate profits. 

The message the executive order sends to hardworking Americans and their families is this: It is more important for our government to boost corporate profits than it is for our government to ensure that Americans have the right to clean air and water, safe 

food, safe workplaces, civil rights protections, safe and non-toxic 

consumer products, including children’s products, safe cars, financial protections that hold Wall Street accountable, and many more 

commonsense safeguards. 

The executive order has now been enforced for roughly 20 

months, and the results are clear: The order has blocked and delayed agencies from issuing hundreds of public protections according to official government data listed on OMB’s unified regulatory 

agenda, while providing underwhelming cost savings to corporations of $570 million under fiscal year 2017, which amounts to 

about .001 percent of GDP growth under the second quarter of this 

fiscal year. In other words, the cost of the executive order in terms 

of public protections that have been blocked significantly outweigh 

the minimal benefits to corporations that the order has provided 

with respect to cost savings. 

Among the protections that the public has lost are new lead-indrinking-water standards; new gun-control measures; new vehicle, 

truck, and train safety standards; dozens of new environmental 

protections, including restrictions on toxic chemicals under TSCA; 

safety standards for new tobacco products like e-cigarettes; numerous workplace safety protections; and updates to energy efficiency 

standards. It is likely that agencies will be unable to accumulate 

enough cost savings to corporations under the executive order to be 

able to issue important new protections that will save lives such as 

new auto safety technology that allows vehicle-to-vehicle communications that can potentially save thousands of lives per year. 

The executive order has failed to unleash economic growth as 

promised by supporters of the order, at least according to Goldman 

Sachs. Goldman Sachs studied whether job growth and capital 

spending have been stronger in sectors in companies that were 

more highly regulated before the most recent election. According to 

Goldman Sachs’ January 2018 report, quote, ‘‘We find no evidence 

that employment or capital spending accelerated more after the 

election in an area where regulatory burdens are higher.’’ 

In sum, the executive order has been a lose-lose for our country. 

It has made Americans less safe by blocking or delaying critical 

new regulations that protect the public, while providing 

underwhelming cost savings to corporations and failing to create 

economic growth. Public Citizen encourages this committee and 

Members of Congress to conduct vigorous oversight over the continuing implementation of Executive Order 13771 to ensure that 

Federal agencies are doing their statutorily mandated duty to protect the public by issuing new health, safety, environmental, and 

consumer protection regulations, as Congress intended. Public Citizen also encourages Members of Congress to be mindful of the 

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tive order when drafting and enacting new legislation designed to 

protect the public by requiring agencies to issue new regulations. 

Thank you, and I look forward to your questions. 

[Prepared statement of Mr. Narang follows:] 


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Mr. PALMER. I thank the witnesses for their testimony. 

The chair will now recognize Mr. Massie for five minutes for his 

questions. 

Mr. MASSIE. Thank you, Mr. Chairman. 

Secretary Brinkman, you mentioned that Kentucky, under Governor Bevin’s leadership, has repealed over 400 regulations and 

amended over 400 regulations? I didn’t get the exact numbers, but 

can you tell us what some of the more consequential regulations 

have been in terms of easing up burdens on companies or fostering 

economic development? 

Mr. BRINKMAN. Thank you, Congressman. The current data as of 

a couple days ago is 480 regulations have been repealed, 454 regulations have been amended. A good example of a regulation that we 

inherited was a—that older buildings that—above 45 feet you could 

not use PVC; you had to use cast-iron piping and—even though the 

International Plumbing Code authorizes PVC as a permitted piping 

material. 

And what we found particularly in cities like Louisville and Lexington is we have older office buildings that are class C office buildings, and developers want to convert those to residential properties. 

And most of the traditional office buildings have their plumbing 

stacked near the elevator shafts. If you convert them to residential, 

you’re going to have to expand the piping and— to accommodate 

residential living. And so we’ve estimated that that will save anywhere from, you know, $100,000, $200,000 per floor for developers 

to redevelop these office buildings into downtown living. So that’s 

a perfect example where we had an outdated regulation that was 

just making it more difficult to redevelop these properties into 

downtown living. 

We also had a rule that we called our cut rule that any boxing 

or wrestling match, if participants started bleeding in any instance, 

the match had to cease immediately. We repealed that, and now we 

have a very vigorous—become a very vigorous State for holding 

martial arts, wrestling, boxing matches, which are very popular 

with our population and adding to the economic vibrancy of our 

communities. 

Mr. MASSIE. So did you get any pushback when you changed the 

regulation to allow PVC from the steel and cast-iron manufacturers 

or —— 

Mr. BRINKMAN. There was nothing major. There was —— 

Mr. MASSIE. Okay. 

Mr. BRINKMAN. Because I think people recognized it was outdated and not necessary and in fact would further economic development without in any way compromising public safety. 

Mr. MASSIE. And, you know, when we talk about reducing regulation at the government level, a lot of times we are thinking about 

reducing regulation on private business, but I served in county government, and there were State regulations that always constrained 

the county government. I am sure there are Federal regulations 

that constrain the State Government. Do you know of any of those 

regulations that eased up sort of the onerous demands on counties 

and cities or—not to put you on the spot but —— 

Mr. BRINKMAN. Right. 


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Mr. MASSIE.—it may be easier for me to ask it at another level. 

Are there regulations at the Federal level that you would like to 

see us reduce that are constraining your ability to improve things 

in Kentucky? 

Mr. BRINKMAN. Well, I mean, certainly, the Waters of the United 

States and the regulations promulgated thereunder have been very 

restrictive and have made it difficult to develop property and add 

to the tax base, which, as you know, is critical for our counties and 

cities throughout Kentucky, particularly in light of the pension liabilities that exist. 

There’s a perfect example of that where if we have sensible regulation at the Federal level, we believe that we can have further economic development, which will add to the tax base, which will help 

all our counties and cities meet their financial obligations, help our 

school districts, which, as you know, education funding has been a 

challenge in light of our pension obligations. So that’s a perfect example where we think that with sensible regulations at the Federal 

level, our school districts, or cities, and our counties will benefit immensely. 

Mr. MASSIE. Ms. Jones, did you mention that you had a two-forone rule in the regulation there in Canada? The President signed 

an executive order with a similar rule. I am a little bit worried that 

it is not really the number of the regulations but, I mean, regulation could be three orders of magnitude more restrictive than another regulation. Can you speak to the value of having a two-forone rule and is it important to look at the magnitude of the regulation or the number of the regulations? 

Ms. JONES. I think it’s important to do both, so I think for the 

biggest rules you want to have robust benefit-cost analysis in place, 

but just like in a toolkit, you want to have maybe—if you wanted 

to have a robust toolkit, you’d have a sledgehammer and a hammer 

and a wrench and a screwdriver. You want to pick the right tool 

for the right job. And I think it is important to capture the blizzard 

of small things that can add up to a very big cumulative burden. 

And to do that with a simple measure that you can use broadly is 

good. 

And the difference—there is a difference between the Trump twofor-one, which uses a more complicated measure and the British 

Columbia two-for-one, which used a simpler measure and was applied much more broadly. So the Trump two-for-one policy applies 

to about 8 percent of the most economically significant rules, using 

a cost-benefit analysis, which again absolutely has its place. British 

Columbia’s was much more granular, so they counted everything. 

And each regulation could have literally thousands of regulatory 

requirements associated with it. That’s what B.C. counted. It was 

very broad. 

Mr. MASSIE. I like the granular approach. My time is expired, so 

I am going to yield back, Mr. Chairman. 

Mr. PALMER. I thank the gentleman. 

The chair now recognizes the ranking member, Mr. Raskin, for 

five minutes for his questions. 

Mr. RASKIN. Thank you, Mr. Chair. 


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Ms. Jones, let me stick with you for a second. The project that 

you describe that took place in British Columbia was undertaken 

on a bipartisan basis —— 

Ms. JONES. It was —— 

Mr. RASKIN.—or a multi-partisan basis? 

Ms. JONES. No. In British Columbia, it was a new government 

that came into power, a liberal government that came into power, 

and won an overwhelming majority actually because of concern 

around economic issues. 

Mr. RASKIN. Yes. 

Ms. JONES. However, the government has since changed, and the 

government that was previously in power has so far kept the reforms in place. 

Mr. RASKIN. So, in other words, it’s not so much a bone of ideological contention in Canada. Is that right? Or —— 

Ms. JONES. I think red tape reform has broad support across the 

political spectrum —— 

Mr. RASKIN. Yes. 

Ms. JONES.—in Canada. You see that at the Federal level as 

well. 

Mr. RASKIN. Yes. 

Ms. JONES. Canada’s one-for-one rule, you had all parties—in 

fact all votes except for one in Parliament on that legislation were 

for it. 

Mr. RASKIN. Thank you. So, Mr. Narang, let me come to you. So 

I think everybody can agree that we would want to have as few 

rules as possible but all the rules that we need in order to advance 

what our public priorities are. How do you see the administration’s 

deregulation campaign? Is it something that is focused on bureaucratic simplification, or do you see it as a cover for dismantling 

substantive rules that the administration opposes? 

Mr. NARANG. Well, I’d say it’s more the second, and the reason 

I say that—and look, I’ll agree with others when I say it’s not— 

it’s probably good policy to get rid of regulations, as long as those 

regulations don’t provide any safety benefits. But that is not what 

we’re seeing with this executive order. There are no exemptions for 

regulations, for example, that provide safety benefits that have 

been proven to protect the public and have been proven to provide 

economic and social benefits above the cost. All the regulations are 

subject to the executive order, whether or not they protect the public and provide health and safety to the public. 

Mr. RASKIN. Got you. So what would be a way to advance the 

goal of bureaucratic simplification, reducing red tape, and especially the time that is required to comply with regulations, while 

at the same time not undermining the public interest as it is embodied in specific legal mandates? And I don’t know, Ms. Jones, 

whether you have got some take on that from the Canadians? 

Ms. JONES. Yes, I think one of the important things that happen 

in British Columbia is that regulators themselves were part of the 

solution. This wasn’t just the private sector saying here’s the long 

list of rules that we want you to cut or eliminate. This was much 

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too, had a very important role, and I think they did a great job of 

helping to protecting the most important rules —— 

Mr. RASKIN. So it was like a broadly —— 

Ms. JONES.—while getting rid of the rest. 

Mr. RASKIN.—consultative process where people are collaborating 

and then also the regulators are not demonized in the process but 

they are people who actually know where the different skeletons 

are and which rules seem to be atrophying or obsolete? 

Ms. JONES. The way I would characterize it is you take regulation makers and you turn them into regulation managers, so they 

have two parts of their job. One is to find and develop new rules, 

but another part of their job is to continuously find and get rid of 

those ones that are duplicative or obsolete or no longer work anymore. And I think they’re doing a pretty good job in British Columbia. 

Mr. RASKIN. Yes. Mr. Brinkman, did you want to comment on 

that? 

Mr. BRINKMAN. Yes. Under Kentucky law, we have a very rigorous process for promulgating and amending regulations. We have 

a public comment period. We get comments, and then oftentimes 

we amend the regulations. We have a statement of consideration, 

and then it goes before a standing committee of both the House 

and Senate of Kentucky with members of both the majority and minority parties that review those regs, and the regs go to the committee of jurisdiction, whether it’s health and welfare or transportation, and any of those committees can find the regulations deficient. To my knowledge, and it’s just to my knowledge, but I do not 

believe any committee has found any of our regulations—or proposed regulations deficient to date. I may be wrong, but I don’t believe so because we have this consultative process with stakeholders and members of both chambers in both political parties. 

Mr. RASKIN. Okay. Thank you, Mr. Chairman, I yield back. 

Mr. PALMER. The chair recognizes the gentleman from Wisconsin, 

Mr. Grothman, for five minutes for his questions. 

Mr. GROTHMAN. Yes. First thing, in dealing with rules, of course, 

rules have different sizes, you know? There are 100-page rules and 

there are one-page rules. And sometimes if you do like one in, one 

out or whatever, there are rules you want to change, and you call 

that a regulatory rule change but really what you are doing is you 

are putting in a rule that is beneficial. So at first blush they did 

one in, one out or one in and two out or whatever seems kind of 

simplistic because there are rules you want to change. 

Do any of you want to respond to that? 

Mr. VICKERS. I think, you know, rules are valuable, et cetera, but 

we need to consider as we’re making them the cost of compliance. 

The cost of compliance is, you know, the handbrake that comes in 

—— 

Mr. GROTHMAN. And nobody doubts that the rules are horrible 

and particularly on a Federal level they are probably unconstitutional to boot, but I am talking about a technical question, you 

know? If we are going to say we are going to get rid of one rule 

for every new rule we promulgate, new rules can come up that we 

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is what I’m saying. Just physically how do you deal with that problem? 

Mr. BRINKMAN. If I might, one of the initiatives we’ve undertaken is we’re looking at our section 1915(c) waivers. Those are the 

waivers for our individuals with development of disabilities. And 

these waivers were—and the accompanying regulations were written over a period of decades, and they’re very inconsistent. They’re 

difficult to understand. They’re difficult to administer. And so we’ve 

undertaken an initiative. It’s—we’ve been working on it for about 

a year. It’s probably going to encompass another couple years because you have to get this right obviously. This—these clients, 

there’s no margin for error. 

But by just making the waivers and the regulations consistent 

and easier to understand, we believe that four groups are going to 

benefit: first and foremost, the clients and their parents and caregivers; second, the independent case managers; third, the providers; and then four, our internal staff within our cabinet. This is 

a situation where we are cleaning up relations for the benefit of 

four different populations. 

Mr. GROTHMAN. If you are able to do that. Now, I am going to 

give you another question, which really gets to me the guts of the 

problem because I have dealt with administrative rules a lot on a 

State-level, and I am going to cover three areas I think we ought 

to completely undo on a Federal level: nursing homes, where so 

many employees spend forever filling out paperwork rather than 

taking care of their residents; special education, where I think we 

have people in special ed that shouldn’t be there or in which the 

teachers spend an inordinate amount of time in this country filling 

out forms rather than working with students; and transportation, 

where everybody agrees that as soon as you put Federal dollars in 

a project, it costs wildly more than if there are no Federal dollars. 

Nevertheless, I know on all three of these if we simplified them, 

in this country we would have a problem because, while I love 

friends of both parties, sometimes people of one party, out of maybe 

just a general distrust of business, will fight any changes that 

would seem just common sense. 

What I will ask you to do if you have had any less regulation in 

your country, how do you deal with the more government-worshiping side of the aisle? How did you get them to go along and 

admit that sometimes the government is wrong or it is possible to 

put too much paperwork on business? 

Ms. JONES. One of the arguments that we make when we’re talking to those that might be a bit skeptical about cutting rules and 

the outcomes that might—that you might get as a result of that is 

that we need a lot more transparency in the system. And so with 

the B.C. regulatory requirements, you can see that if there were 

10,000 regulatory requirements cut in the environmental area, you 

could ask—start asking tough questions like if there were worse 

outcomes, you could say look at those rules, and you could have 

those kinds of challenge functions. If the rules were cut and the 

outcomes were maintained at high levels, that gave you a different 

kind of feeling, but it gave more accountability and transparency 

into the system, which is good whether you think there should be 


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more rules or there should be fewer rules. And that’s the kind of 

transparency we have on the tax side. 

Mr. GROTHMAN. Mr. Brinkman, if you were able to reduce the 

regulatory burden in Kentucky, were you able to do it and both 

parties were able to go along with it? 

Mr. BRINKMAN. Well, again, because of our statutory scheme, 

both parties have a role in reviewing regulations and voting on 

them and they could find them deficient. And again, we invite 

stakeholders to our public comment period. So we feel it’s a very 

collaborative process, and to my knowledge I don’t think the other 

party has found any—to my knowledge any of our regulations to 

be alarming, any regulations we’ve repealed or amended. I may be 

wrong, but I don’t believe they’ve found any of those alarming —— 

Mr. GROTHMAN. Good for you —— 

Mr. BRINKMAN.—but sensible. 

Mr. GROTHMAN.—and I look forward to dealing with the other 

Congressmen on this panel next year, and maybe we can sit on the 

side and make suggestions but I’m particularly focusing on those 

three areas, transportation, oh, the paperwork with the poor nursing homes, and special ed. Thanks. 

Mr. PALMER. The gentleman yields back. 

The chair recognizes the ranking member, Mr. Raskin, for— oh, 

wait a minute. The ranking member Mr. Krishnamoorthi—I am 

having a tough day today—for five minutes for your questions. 

Mr. KRISHNAMOORTHI. Thank you, Mr. Chairman. 

You know, my—look, I am a former small-business man, so I 

really appreciate any efforts to cut red tape and regulations, unnecessary regulations. However, you know, at the same time that we 

want to cut red tape, we don’t want to, you know, lay out the red 

carpet for predatory practices or anticompetitive practices or anticonsumer practices, what have you. 

So, you know, one—I am on the Ed and Workforce Committee in 

addition to being on the Oversight Committee, and one thing I 

wanted to ask Mr. Narang about is basically what we are seeing 

in terms of cutting rules that would basically prevent predatory 

practices in the education space and specifically the borrower defense rule. I think you mentioned this before. I am very concerned 

about this. This is the rule that basically allows students to basically recoup money that was fraudulently taken from them when 

they paid for worthless degrees or an education that really didn’t 

pan out to anything. And so I would just like to get your sense of, 

you know, repealing the kind of a rule, you know, what kind of effect does that have and how do we, you know, deal with something 

like that? 

Mr. NARANG. Thank you, Congressman. So we are also at Public 

Citizen are quite concerned about the growing student debt crisis 

in this country. It is maybe the biggest debt crisis that we have, 

and obviously it is handcuffing opportunities for students across 

the country. The borrower defense rule was an important rule that 

was put forward in during the Obama administration by the Education Department to make sure that students that do not get degrees that work out for them are able to avoid the kind of massive 

debt that we’re seeing way too often with students. 


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Unfortunately, the Trump Administration’s Education Department is rolling that back. They’ve done so in an illegal way, at 

least according to one court that has struck down the massive 

delay of the rule. These are critical protections for students. I 

don’t—you know, if the Trump Administration continues down this 

road, we’re not looking at any solutions for the debt crisis. 

Mr. KRISHNAMOORTHI. So here is —— 

Mr. NARANG. We are just looking at actions that make it worse. 

Mr. KRISHNAMOORTHI. Here is the deal, okay? Like when we promulgate the rules, we have to make sure on the one hand that we 

don’t issue excessive red tape, we don’t put obsolete regulations in 

place, and so forth. However, on the other hand, you have to balance that against regulatory capture by the industry that you are 

regulating. You don’t want them to necessarily start to decide what 

the regulations are going to be so that they can continue with practices that perhaps the public is uncomfortable with. 

And so I go to Ms. Jones and just ask you, how do you balance 

that? Because that is kind of what is happening in the education 

space. We know that in the current Education Department there 

are officials at senior levels who come from the very industries that 

they are trying to undo regulations on. So how do you prevent that 

—— Ms. JONES. Well —— 

Mr. KRISHNAMOORTHI.—because we all want to see less red tape, 

but we don’t want to open the door to predatory practices. 

Ms. JONES. Well, I’ll come back to two of the—what I think are 

the lessons from British Columbia. One is political leadership. And 

the minister responsible for the regulatory reforms in British Columbia was very clear that this wasn’t just about cutting rules, 

that enforcement was going to be strong, fines in many cases went 

up so there were fewer rules, but enforcement and the penalties for 

disobeying the rules were in place, so that’s —— 

Mr. KRISHNAMOORTHI. So there is real independence. 

Ms. JONES. So that’s an important —— 

Mr. KRISHNAMOORTHI. Yes. Yes. 

Ms. JONES.—part of the equation. And I would say the second 

lesson from the British Columbia model that’s relevant here is really the engagement of regulators. So this isn’t just about—it’s not 

one extreme or the other. You’re looking for that happier middle 

ground —— 

Mr. KRISHNAMOORTHI. Right. Right. 

Ms. JONES.—right, where it’s not no rules. That’s not what they 

were doing. But the—the overarching lesson is you can have high 

levels of health, safety, and environmental outcomes with many 

fewer rules. And that’s good for everyone. And, by the way, not just 

for business, for citizens. So things like the childcare —— 

Mr. KRISHNAMOORTHI. Right. 

Ms. JONES.—subsidy application that used to take four —— 

Mr. KRISHNAMOORTHI. Right. 

Ms. JONES.—that used to take—you know, it was 18 days and 

now it takes four days, you know, things like that were good for 

citizens. 

Mr. KRISHNAMOORTHI. So I agree. I was just recently in Kentucky, sir, and I see that there is change afoot, but I heard a lot 


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of complaints about the Federal Government. Do you know why? 

Because of uncertainty on trade rules and tariffs at the Federal 

level. And you know the bourbon industry is obviously intensely affected. So talk to me about uncertainty and unpredictability with 

regard to Federal trade rules and regulations and how does that 

affect you? 

Mr. BRINKMAN. Well, I mean, obviously, that’s a national debate 

that’s going on that affects a number of industries in Kentucky, as 

you referenced. But more to the point in terms of our efforts with 

our Red Tape Reduction Initiative, as I indicated in my testimony, 

one of the things we’re doing is we’re conforming to the Federal 

counterparts, so if the Federal Government determines that a regulation is appropriate, we’re conforming to that Federal counterpart. 

Too often in the past we had a separate regulation dealing with the 

same subject matter with inconsistent definitions and standards. 

That makes it impossible for any business, including any small 

business —— 

Mr. KRISHNAMOORTHI. Sure. 

Mr. BRINKMAN.—to try to figure out what the rules of the game 

are. So that’s part of our —— 

Mr. KRISHNAMOORTHI. Sure. 

Mr. BRINKMAN.—initiative where we’re not necessarily weakening the regulatory regime. We’re simply recognizing the supremacy of the Federal Government —— 

Mr. KRISHNAMOORTHI. Sure. 

Mr. BRINKMAN.—and conforming to it. 

Mr. KRISHNAMOORTHI. Sure. But where you don’t have a State 

analog to a Federal rule, which has supremacy or, you know, takes 

the whole domain like trade, you want predictability, you want 

some certainty? 

Mr. BRINKMAN. Of course. 

Mr. KRISHNAMOORTHI. Yes. 

Mr. BRINKMAN. Of course. As you well know, being a small-business person, that predictability, understanding the rules of the 

game is paramount of the ability to, you know, sustain the business. We know that’s very important. 

Mr. KRISHNAMOORTHI. Got it. Thank you. 

Mr. BRINKMAN. Yes. 

Mr. PALMER. I thank the gentleman. 

The chair now recognizes the gentleman from California, Mr. 

DeSaulnier, for five minutes for his questions. 

Mr. DESAULNIER. Thank you, Mr. Chairman. 

The chairman and some of my colleagues are sometimes mystify 

that I was once a Republican when they see how I vote, but this 

is an area where at least in my life experience it was a bipartisan 

effort, and these questions are directed to Mr. Narang because I 

understand you have done some investigation on this. 

I was appointed by Governor Pete Wilson in 1996, ’94, to be a 

member of the California Air Resources Board. This is to enforce 

the U.S. Clean Air Act and the California Clean Air Act. The U.S. 

Clean Air Act, which was signed originally by Richard Nixon, a Republican from California, recognizing that California had much 

more severe public health costs when it came to pollution. Then reauthorization was signed by another Californian, Ronald Reagan, 


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and a Republican. I was reappointed by Governor Schwarzenegger, 

a Republican, and then Governor Davis, a Democrat. 

So one of the joys of being on that board was that it was largely 

nonpartisan up until recently, that there were always equal members left over from previous administrations. But we did cost-benefits that I thought were terrific. The staff knew that they wouldn’t 

bring something to the board or committee of the board until it had 

been thoroughly cost-benefited, which I thought was really good, 

particularly the public health costs, given its charge. 

So in that context we spent many, many years coming up with 

State statutes that went to issues around climate change and carbon emissions. We were very careful that we wouldn’t be preempted under CAFE standards at the Federal level. We applied for 

a waiver. We had never been denied a waiver under the Clean Air 

Act until this instance. The Obama administration came in and 

gave us the waiver. We were going to prevail, most legal experts 

opined. And now we have this administration wanting to roll 

Obama administration regulations around carbon to complement 

California Air Resources Board work that has been in effect in a 

bipartisan level way for 20 years, actually longer than that when 

our Scientific Advisory Committee first came to us and said this is 

a problem. 

So the estimate I understand that you have done some work on 

is that this rule, if it goes into effect and we can’t work something 

out with California, the Administration, the car industry, will cost 

$100 million to enforced but will cost almost $1 billion to the economy. So could you talk a little bit about that? And politics and political opinions being driven and entering into, which I think 

should be nonpartisan if we had the benchmarks right in measuring statutes and regulatory efforts to make sure that they were— 

we could have a real conversation about their benefits and their 

costs. 

Mr. NARANG. Thank you, Congressman. So there are reams of 

evidence demonstrating that fuel economy standards are good for 

the economy, for the national economy, for State economies. This 

is separate of course from the, you know, environmental benefits 

that we get from increased fuel economy standards. This is—actually I think maybe the most interesting recent piece of evidence is 

when the Trump Administration proposed the rollback and potentially, you know, superseding of California’s waiver. There was a 

lot of internal disagreement between the Department of Transportation and EPA. And the EPA experts, you know, were showing— 

this all came out post-proposal of the rule, but the EPA experts 

were showing strong data to the Department of Transportation officials saying, look, all of the—the methods that you’re using, the 

numbers that you’re using, they are wrong. You’re making assumptions that are not based in fact, and the EPA can’t support these 

conclusions. 

Now, obviously, the EPA, you know, is partly involved in the rollback, but I think it was very telling to see those behind-the-scenes 

documents from EPA staff to the Department of Transportation 

staff, making it clear that they did not feel that the evidence that 

now, you know, the Department of Transportation is relying on in 

rolling back the fuel economy standards, that that is solid evidence 


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that—lots of EPA studies, cost-benefit studies dating back decades 

show that the Department of Transportation numbers are wrong. 

Mr. DESAULNIER. So I would just like to conclude. When I was 

in the legislature, I was a big supporter because I represented California in the National Conference of State Legislators. And I looked 

at what States were doing around regulatory authority, and I actually thought one of the really good things that Texas did was their 

Sunset Commission, an independent commission that did terrific 

work in looking at statutes and regulatory issues and doing costbenefits and saying, you know, it is not working as intended. The 

legislature either needs to change it or we are going to sunset it. 

So I really think there is a wonderful opportunity here, as I say, 

if we get the framework right, that this would be nonpartisan. I 

think all of us want government to work better and more efficiently 

for Americans. And, Mr. Chairman, I know you feel the same way, 

so hopefully, this can become more of that dialogue and less of the 

political dialogue. Thank you, Mr. Chairman. 

Mr. PALMER. I thank the gentleman, and I do have great hope 

that this can be a bipartisan effort. It is interesting. We had three 

regulatory reform task force hearings last year in 2017 with agency 

representatives who came and testified about agency employees implementing the executive orders. And frankly, when we announced 

these hearings, I thought that we would get some pushback. I 

thought there would be some resistance, but what we found was 

not only was there no resistance, there was enthusiasm for it. And 

the thing that I tried to get across to people is, first of all, we all 

breathe the same air, we are all drinking the same water, whether 

it is bottled or otherwise. We are walking on the same grounds. 

Our kids and families are breathing the air and drinking the 

water. That is not what this is about. What this is about is having 

a sensible regulatory environment. 

And what we have found from the regulators who came over, the 

folks who were trying to implement this is this helps them do their 

job. When you have regulations that are accumulated to the degree 

that they have over time, you start to realize that you are trying 

to implement regulations that are obsolete. You are implementing 

regulations that people have forgotten were on the books that you 

have duplicated, and they don’t match, and in many cases they are 

contradictory. It imposes an enormous cost on businesses. This is 

not rolling out the red carpet, as somebody said, to business. That 

is not what this is about. This is about sensible regulation because 

I think that it is one area where we agree. 

The regulations that we have adopted over the years, particularly on the environment, have resulted in dramatic improvement 

in environmental quality. I mean, our economy has grown almost 

500 percent since 1980. Vehicle miles have gone up over 100 percent. Population has increased over 30 percent. Energy consumption is up over 30 percent, but emissions, for instance, are down 

over 50 percent. We are making progress. What we want to do is 

make sure that we can continue to make progress, but at the same 

time allow people to flourish. And it almost sounds like another 

opening statement, so I am now going to recognize myself for five 

minutes for questions as we await the call of votes. 


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And one of the things in the State of Alabama that we were looking at doing—I was on the Governor’s Task Force for Improving 

State Government—was to create a one-stop shop. And we are talking about getting rid of the obsolete regulations and the duplications and the contradictions, but we also need to make it easier for 

people, whether it is getting permits or being able to get answers 

in regard to their questions about regulations. Has that been part 

of what has been done in British Columbia or Australia or Kentucky? And we will begin with Ms. Jones. 

Ms. JONES. Yes, in British Columbia there’s been some work to 

do one-stop shopping for sure. That was part of the reforms, and 

I think that’s gone over very well. There’s also at the Federal level 

ongoing work to simplify that and have one business number and 

that kind of thing, so that’s certainly very popular. I think it’s one 

of many, many things that needs to be done, and that was, again, 

one of the things that B.C. did right was they didn’t say bring us— 

often, I’ve been involved in regulatory reform exercises where people will say bring us your top 10 irritants. And it’s not about the 

top 10 irritants. The one-stop shop may be very well on that list, 

but it really is about the blizzard of little things. So, again, having 

that broad, clear, simple measure was very helpful in that regard. 

Mr. PALMER. Mr. Vickers? 

Mr. VICKERS. Yes, SBR and Australia is in effect a one-stop shop. 

It allows you to file your taxes, to register a business, to register 

an employee, and so on through a single reporting framework. And 

the way that that worked was agencies came together, agreed on 

a common taxonomy, and generated reports using those common 

data elements. And when you do that, you reduce the cost of compliance significantly, and that has huge benefits for business. I 

quoted the A$1.4 billion figure before. Ninety-seven percent of that 

was savings to small business, so a huge number of that. 

Mr. PALMER. Yes. 

Mr. BRINKMAN. Yes, Mr. Chairman, that’s the other part of this 

initiative that I didn’t discuss, but clearly, we are creating onestop. We have initiatives for one-stop for businesses and individuals to go to one portal to handle all their needs. And our applications are going online so people can complete the applications online, submit the payment for a renewal fee for a license, that type 

of thing online, and we’re also working with our agencies every day 

to cut down on the processing time to respond to requests for permits or applications or things of that sort because we know that 

one of the more frustrating things for individuals and businesses 

is the uncertainty of not knowing when or if an application, a license, a permit, et cetera, is going to be granted. So we are very 

cognizant of the need to be responsive, and that is part of our initiative. 

Mr. PALMER. You know, Mr. Vickers—well, go ahead. You would 

like to follow up? 

Mr. VICKERS. Yes, just quickly. I would encourage you to think 

about the harmonization—potential harmonization between Federal and State compliance regulations. It’s one thing to focus on, 

say, the State of Alabama or Kentucky, but if you still have to deal 

with the Federal Government separately, that is—that introduces 

a burden. 


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Mr. PALMER. Well, that is part of what we are trying to do, and 

you, in your previous response to my question, said that 97 percent 

of the savings went to small business, and that is really the economic engine of the American economy. It is the employment engine of the American economy. Massive corporations have the resources to hire compliance people to make sure they comply with 

this, but small business really gets hammered by the overaccumulation of regulations. 

And I had entered into the record this—it’s actually an article 

about the Gallup report, the Gallup organization report that came 

out back in 2014. It showed that we were averaging 100,000 more 

business startups than closures prior to 2008. And then we went 

through—and this sounds partisan, but it is just facts. We went 

through what I would consider a blizzard of new regulations, and 

there were also other issues with the recession, but I think this 

compounded the problem, that by 2014 we had gone from 100,000 

more businesses opening than closing to 70,000 more businesses 

closing than starting up. And on a per capita basis we no longer 

ranked first in entrepreneurism or third or fourth. We ranked 12th. 

And it is particularly harmful for small business. 

And one of the things about what we are trying to do with the 

regulatory reform, the red tape reduction and what you people 

have done successfully I might add is that you have removed uncertainty. And I preach this till I am blue in the face, but money 

is just like water. It will always seek the path of least resistance. 

And when you have got particularly small businesses, they are already taking risk, you just add to that risk aversion when you have 

overly complex regulations. What people want is a predictable environment in which to invest. 

And if you do what has been done in British Columbia and Australia and Kentucky and in the U.K., you reduce the uncertainty. 

And for us in our economy that is particularly important because 

we see what is happening right now in the economy and the low 

unemployment. As we continue to create an environment where 

people will start a business, you will hire more people, wages will 

go up because it puts upward pressure on wages, that is really 

what we are trying to do here. We want to create an environment 

where we don’t diminish the quality of our environment. We want 

to continue to improve that. And by the way, wealthy nations do 

that. Poor nations don’t as well. But we want people to flourish. 

And really the good thing about this—and I speak to my good 

friend from California, Mr. DeSaulnier—and he is a good friend. 

We have become very good friends since our time in Congress; we 

came in at the same time—is that what British Columbia and Australia and Kentucky and even the U.K. have done is they have created a model. You have worked out some of the kinks that I think 

is going to be very, very helpful and instructive to us so that it significantly reduces the potential for missteps and what we are trying to do. 

So I want to thank our witnesses for appearing today and for the 

great work that you all have done. As I said before, it has been 

very helpful to us all, and we look forward to interacting with you 

again in the future. 


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The hearing record will remain open for two weeks for any member to submit a written opening statement or questions for the 

record. If there is no further business, without objection, the subcommittee stands adjourned. 

[Whereupon, at 3:31 p.m., the subcommittees were adjourned.] 


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