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RAISING THE AGENCIES’ GRADES—PROTECTING 

THE ECONOMY, ASSURING REGULATORY QUALITY AND IMPROVING ASSESSMENTS OF REGULATORY NEED 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COURTS, COMMERCIAL 

AND ADMINISTRATIVE LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

MARCH 29, 2011 

Serial No. 112–34 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 

(II) 

COMMITTEE ON THE JUDICIARY 

LAMAR SMITH, Texas, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM REED, New York 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

DENNIS ROSS, Florida 

SANDY ADAMS, Florida 

BEN QUAYLE, Arizona 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

TED DEUTCH, Florida 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

SEAN MCLAUGHLIN, Majority Chief of Staff and General Counsel 

PERRY APELBAUM, Minority Staff Director and Chief Counsel 

SUBCOMMITTEE ON COURTS, COMMERCIAL AND ADMINISTRATIVE LAW

HOWARD COBLE, North Carolina, Chairman 

TREY GOWDY, South Carolina, Vice-Chairman 

ELTON GALLEGLY, California 

TRENT FRANKS, Arizona 

TOM REED, New York 

DENNIS ROSS, Florida 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

MELVIN L. WATT, North Carolina 

MIKE QUIGLEY, Illinois 

DANIEL FLORES, Chief Counsel 

JAMES PARK, Minority Counsel 

(III) 

C O N T E N T S 

MARCH 29, 2011 

Page 

OPENING STATEMENTS 

The Honorable Howard Coble, a Representative in Congress from the State 

of North Carolina, and Chairman, Subcommittee on Courts, Commercial 

and Administrative Law ...................................................................................... 1 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Ranking Member, Committee on the Judiciary ......... 2 

The Honorable Steve Cohen, a Representative in Congress from the State 

of Tennessee, and Ranking Member, Subcommittee on Courts, Commercial 

and Administrative Law ...................................................................................... 13 

WITNESSES 

Jerry Ellig, Senior Research Fellow, Mercatus Center, George Mason University 

Oral Testimony ..................................................................................................... 16 

Prepared Statement ............................................................................................. 18 

Richard A. Williams, Director of Policy Research, Mercatus Center, George 

Mason University 

Oral Testimony ..................................................................................................... 70 

Prepared Statement ............................................................................................. 72 

Robert L. Glicksman, J.B. and Maurice C. Shapiro Professor of Environmental Law, George Washington University Law School 

Oral Testimony ..................................................................................................... 80 

Prepared Statement ............................................................................................. 82 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, and Ranking Member, Committee 

on the Judiciary ................................................................................................... 4 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Response to Post-Hearing Questions from Jerry Ellig, Senior Research Fellow, 

Mercatus Center, George Mason University; and Richard A. Williams, Director of Policy Research, Mercatus Center, George Mason University .......... 105 

Response to Post-Hearing Questions from Robert L. Glicksman, J.B. and 

Maurice C. Shapiro Professor of Environmental Law, George Washington 

University Law School ......................................................................................... 134 

(1) 

RAISING THE AGENCIES’ GRADES—PROTECTING THE ECONOMY, ASSURING REGULATORY QUALITY AND IMPROVING ASSESSMENTS OF REGULATORY NEED 

TUESDAY, MARCH 29, 2011 

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON COURTS, 

COMMERCIAL AND ADMINISTRATIVE LAW, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 4 p.m., in Room 2141 

Rayburn House Office Building, the Honorable Howard Coble 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Coble, Gowdy, Gallegly, Reed, Ross, 

Cohen, and Johnson. 

Also Present: Representative Conyers. 

Staff Present: (Majority) Daniel Flores, Subcommittee Chief 

Counsel; John Hilton, Counsel; Johnny Mautz, Counsel; Allison 

Rose, Professional Staff Member; Ashley Lewis, Clerk; (Minority) 

James Park, Subcommittee Chief Counsel; and Susan Jensen 

Lachmann, Counsel. 

Mr. COBLE. Good afternoon ladies and gentlemen. The Subcommittee will come to order. 

As we strive for economic recovery, one thing is clear, overregulation and poor regulation can stunt economic growth; and, most importantly, job creation. Oftentimes when the Federal Government 

implements inefficient or unnecessary regulations, capital that 

could be used to invest in new jobs is alternatively used for compliance or withheld to cover anticipated regulatory costs. 

Recently, the Mercatus Center published the results of its regulatory report card project which evaluated the government’s compliance with the rulemaking process and assessed agencies’ performance formulating and promulgating regulations. The results regrettably show that the Federal agencies are not doing an adequate job 

formulating and promulgating regulations. 

According to the Mercatus study, agencies routinely fail to implement well, or even follow some of the basic steps of good rulemaking practice, including practices prescribed by executive orders 

on regulation. As one can see from the detail and complexity of the 

Mercatus report, there is no silver bullet that will resolve all of the 

problems that have been created by ineffective or unnecessary regulations. It is our hope, my hope, that we can extract a few comVerDate Aug 31 2005 16:47 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\032911\65485.000 HJUD1 PsN: DOUGA
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mon principles from today’s hearing that can be incorporated into 

future legislation that will improve regulatory consistency, efficiency, and predictability so that it will yield better regulation 

when it is needed. 

We will also explore today two potential reforms that already 

have begun to emerge from the results of the report card project, 

our earlier hearings, and even President Obama’s recent statements on rulemaking. The first reform would create an additional 

procedure in the rulemaking process before the agency has settled 

on its course of regulation. Professor Peter Strauss, a witness at 

our last hearing, told us that the agency commitments during this 

phase of rulemaking, before a proposed rule is even published, 

often convert the Administrative Procedures Act notice and comment procedures into nothing more than a farce. 

The second potential reform would implement stricter requirements for agencies to demonstrate a need to regulate before it 

issues regulations. Common sense tells us that just because an 

agency can make a new regulation does not mean that it should 

make a new regulation. 

The first step in the process should be to ask whether a problem 

exists. If no problem requiring regulation does in fact exist, then 

the agency should proceed no further, it seems to me, to coin the 

old adage, ‘‘if it ain’t broke don’t fix it.’’ You have heard that many 

times. 

Congress must have assumed, when it enacted the APA, that 

agencies would only regulate when they could identify a problem 

that needed regulation. Executive orders, moreover, have long 

spelled out that agencies should identify specific market failures 

before they regulate. Astonishingly, however, the regulatory report 

card project showed that the single rulemaking step at which agencies performed the worst is demonstrating that there is a need for 

regulation at all. This suggests that it is time to include in the 

APA itself stricter requirements to demonstrate regulatory need. 

These and other reforms should help us to protect the economy and 

improve the quality of the regulatory agencies’ work. 

I look forward to hearing from our witnesses. I reserve the balance of my time. 

I am pleased to recognize the distinguished gentleman from 

Michigan, the former Chairman of the Judiciary Committee, Mr. 

Conyers. 

Mr. CONYERS. Thank you, Chairman Coble. We come together 

this afternoon for the fifth consideration of the subject of the burden of regulation on business. The title of the hearing is Raising 

the Agencies’ Grades—Protecting the Economy, Assuring Regulatory Quality and Improving Assessments of Regulatory Need. 

This is a very weighty subject since in the interim, we have not 

been creating more jobs for Americans, unemployment is the last 

economic indicia to be affected positively as we try to move out of 

a recession and in some places, a depression in others. We are not 

dealing with the 4-year ongoing mortgage foreclosure crisis, giving 

agencies less resources to protect health and safety of the air we 

breathe and the food that we eat. 

And so I am beginning to wonder about the objective at the end 

and the effectiveness of a cost benefit analysis because these unVerDate Aug 31 2005 16:47 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\032911\65485.000 HJUD1 PsN: DOUGA
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verifiable assessments are probably as good an opinion as anybody 

else’s around, but it may very well not be dispositive. 

Now, we are in the process of trying to determine about the effects of regulatory failure. You know, there were regulations involved in the Japanese meltdown. We just heard today that they 

discovered that there are leaks that are now increasing the fear of 

contamination since they have been found in the foodstuffs, and 

other environmental tragedies. 

Only last week we observed the 100th anniversary of that tragic 

New York fire that triggered so much regulation that we now are 

worried about overburdening businesses. And so the benefits of regulation are not, to me, contemplated, and I invite my witnesses, 

our witnesses, to share this part of my presentation with the rest 

of the Committee because benefits frequently far exceed the costs 

of regulation. And so if we are only talking about costs in terms 

of dollars and cents, one can miss the full impact of regulation. 

I am hoping that this conversation will lead us to look at the incredible number of activities in which tragedy occurred, since the 

Triangle Shirtwaist Factory fire which has come down through a 

lot of activities, going back to the exploding gas tanks in the Ford 

Pinto discovered by a young attorney, Ralph Nader, the Three Mile 

Island nuclear meltdown, major bus crashes where people died because of a lack of regulating seat belts, coal mine explosions in 

West Virginia and so on. I will put the rest in the record. 

I welcome our witnesses to a genuine discussion about this matter, and I thank Chairman Coble for the generosity and the time 

that has been allotted me. 

Mr. COBLE. I thank the gentleman. 

[The prepared statement of Mr. Conyers follows:] 

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Mr. COBLE. We have now been joined by the distinguished Ranking Member, the gentleman from Tennessee, Mr. Cohen. 

Mr. COHEN. Thank you, Mr. Coble. Pardon my tardiness. 

Today we consider the regulatory report card project undertaken 

by the Mercatus—Mercatus Center, not exactly on the tip of my 

tongue on a regular basis. These report cards purport to assess the 

quality of agencies use of regulatory analysis by assigning numerVerDate Aug 31 2005 16:47 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\032911\65485.000 HJUD1 PsN: DOUGA

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ical grades from zero to five for each of 12 questions used to assess 

performance of agencies for a possible 60 points if you hit the top 

five for 12 times. The hearing title implies that Mercatus’ grades, 

‘‘are accurate based on sound methodology.’’ 

The title also suggests we should, therefore, focus on changing 

the existing regulatory system based on this finding by the 

Mercatus Center. By Mercatus’ own admission, however, the report 

cards, ‘‘are subjective and its grading is not transparent or capable 

of any third-party replication.’’ 

Although Mercatus says it has instituted a process to address 

these concerns, that process appears to involve only Mercatus 

scholars verifying each others conclusions, not any objective thirdparty analysis and intervention. 

To the extent that the majority seeks to premise changes to the 

rulemaking process based only on Mercatus’ findings, I find this, 

and I think the Nation would find it troubling. Perhaps I would be 

more comforted if it were not for the fact that Mercatus does not 

approach the issue of regulatory reform with a neutral perspective, 

the way that maybe, say the Administrative Conference of the 

United States might approach something. Mercatus was founded 

and is funded by the Koch brothers, not the beverage that we all 

enjoy but Charles and David Koch, the owners of Koch Industries, 

the second largest privately held company in the country, a company which has large oil and lumber interests among others. Oil 

and lumber are industries not normally desirous of any government 

regulation at all. They like to cut trees and decide when and how 

they will replenish their forests and take from the earth as much 

oil as they can, and we saw with Deepwater Horizon how good it 

is not to regulate oil drilling. Mercatus continues to be heavily 

funded by donations from some of the Nation’s largest corporations, 

all of which have an interest in stifling economic health and safety 

regulations. 

According to The Wall Street Journal, 14 of the 23 regulations 

that President Bush put on his regulatory hit list had been recommended first by the Mercatus Center. A lawyer described 

Mercatus’ strategy this way: You take corporate money, you give it 

a neutral sounding think tank, hire people with pedigrees and academic degrees who put out credible-seeming studies, but they all 

coincide perfectly with the economic interests of their founders, 

kind of like an academic middle person. Mercatus’ regulatory report card may or may not turn out to be accurate. The problem is 

we will never really know because there is no way to verify a subjective conclusion versus in-house doctoring. 

We need to guard against enacting what might turn out to be 

needless analytical requirements based on possibly faulty findings 

by a think tank with a known regulatory agenda and contributors 

who have a particular desired outcome that they seek. 

As I have said before, agencies must retain the ability to act to 

protect Americans’ public health and safety and ensure the soundness of our Nation’s economy and to guarantee that Americans’ 

civil rights are not infringed upon. While recognizing that regulation can impose costs, we understand that, we should not ever forget that the benefits far outweigh the costs. America has had some 

of its greatest years of economic and job growth under the current 

15 

regulatory system. At a minimum, that seems to point to the conclusion there is no inconsistency in the regulatory system we have 

and economic and job growth. We ought to keep that in mind and 

proceed cautiously before further hampering agency rulemaking. 

I yield back the balance of my time, and thank you for the allowance. 

Mr. COBLE. I thank the gentleman from Tennessee. We have 

been joined by the distinguished gentleman from South Carolina, 

Mr. Gowdy, and the distinguished gentleman from Florida, Mr. 

Ross. Good to have you all with us. We will proceed with the hearing. I will give you some background on our witnesses who will appear today. 

Mr. Richard Williams is the Mercatus Center Director of Policy 

Research. He served in the Office of Management and Budget for 

27 years as the director of Social Sciences and the Center For Food 

Safety and Applied Nutrition in the Food and Drug Administration. 

Dr. Williams is a expert in benefit cost analysis and risk analysis, 

particularly related to food safety and nutrition. He has published 

in risk analysis and the Journal of Policy Analysis and Management, and has counseled foreign governments, including the United 

Kingdom, South Korea, and Australia. A Vietnam veteran, Dr. Williams received his Ph.D. and his MA in economics from Virginia 

Tech and his B.S. In business administration from the Old Dominion University. He has served as an adviser to the Harvard Center 

For Risk Analysis and taught economics at Washington and Lee 

University. 

Mr. Jerry Ellig is a senior research fellow at the Mercatus Center at George Mason University where he has worked since 1996. 

Between August 2001 and August 2003, he served as deputy director and acting director of the Office of Policy Planning at the Federal Trade Commission. 

Dr. Ellig also has served as a senior economist for the Joint Economic Committee on the U.S. Congress and as an assistant professor of economics at George Mason University. Dr. Ellig directed 

the Mercatus Center’s regulatory report card project which assesses 

the quality of agency performance in promulgating major regulations. Dr. Ellig has published numerous articles on government 

regulation and business management in both scholarly and popular 

periodicals, and has coauthored and edited several books on competition, regulation, and environmental energy. He earned his 

Ph.D. degree and his M.A. in economics from George Mason University and his B.A. in economics from Xavier University. 

Our third witness is Professor Robert L. Glicksman. Professor 

Glicksman has published widely on the subject of environmental 

and administrative law. Before coming to George Washington University in 2009, he taught at the University of Kansas School of 

Law where he was the Robert W. Wagstaff distinguished professor 

of law. A graduate of the Cornell School of Law, prior to joining the 

academy, Professor Glicksman worked in private practice at a firm 

in Washington, DC where he focused on environmental, energy and 

administrative law issues. 

Professor Glicksman joined the Center For Progressive Reform in 

2002, and has sat on its board of directors since 2008. 

16 

Our three witnesses bring glowing credentials to the table. We 

are glad to have you all with us. We try to go by the 5-minute rule 

that we apply to you all, and we try to apply it to ourselves as well. 

You will see when the amber light appears, that is your notice that 

time is evading. You will have 1 minute after that. When the red 

light appears, if you could wrap up shortly thereafter, we would be 

appreciative. 

Dr. Ellig, if you would start us off. 

TESTIMONY OF JERRY ELLIG, SENIOR RESEARCH FELLOW, 

MERCATUS CENTER, GEORGE MASON UNIVERSITY 

Mr. ELLIG. Thank you, Mr. Chairman, Ranking Member Cohen, 

Members of the Committee. My name is Jerry Ellig. I am a research fellow at the Mercatus Center at George Mason University. 

As the Chairman indicated in his introduction, I have also served 

in two out of three branches of the Federal Government. I probably 

won’t get into the third. But each time I have left government and 

gone back to academia, I have walked out with a long list of studies I wished someone had done, experts I wished we had been able 

to consult if we had only been able to find them, to answer questions in order to make better policies and make better decisions in 

government. And that is really the genesis of the Mercatus regulatory report card, trying to figure out what is it that agencies actually do when they sit down to make decisions about regulation, 

and how well do agencies do the things that Presidents of both political parties have been telling them to do for several decades. 

Some time ago in our schooling, most of us probably learned that 

there are a few basic things that we are supposed to do before 

making important decisions that affect us or affect the lives of 

other people. Really basic things, like identify the goal that we are 

trying to achieve, what outcome do we want, identify the nature of 

the problem we have to overcome to achieve the goal. Identify the 

various alternative ways of achieving that goal, and then weigh the 

pros and cons of alternatives. You might call that Decisionmaking 

101. 

Well, regulatory analysis, as required by Federal executive order, 

is simply Decisionmaking 101 applied to regulation. What we are 

trying to do in the Mercatus regulatory report card is assess how 

well agencies do these basic things that you would do before making any big decisions. We have examined all of the proposed economically significant regulations issued over the past few years, 

those are the really big ones. We used criteria drawn from the executive order that governs regulation, an OMB Circular 8-4 that 

lays out best practices for regulatory analysis. We look at the quality of the analysis, and we also look at the extent to which the 

agency claims to have used the analysis when it made decisions 

about the regulation. 

So what do we find? We find that agencies do a lot of good things 

in their regulatory analysis. We also find that the average quality 

is low, the best ones are not stellar, there is wide variation in the 

quality of regulatory analysis, we see a lot of best practices in 

agency regulatory analysis, but they are not widely shared and no 

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latory analysis produced by agencies reads as if it were written 

after the major decisions about the regulation were made. 

You might call this the ready fire aim approach to regulation. 

And these findings are consistent with the findings of other scholars at other institutions, other universities, resources for the future, other respected places, who have looked at smaller groups of 

regulations to try to figure out what is the quality of the analysis 

and what do agencies do with it. 

Most importantly for the topic of this hearing, the biggest single 

deficiency we find in many agency regulatory analyses, not all, is 

insufficient definition and an explanation of the systemic problem 

that the regulation is supposed to solve. Now, that is a big mouthful of jargon. Let me give an analogy. 

A couple of years ago I walked into the bathroom and found 

water on the floor. That wasn’t the problem, that was the symptom. We had to do some analysis to solve the problem. We found 

out that there was a crack in a plastic pipe that, in turn, was 

caused by the fact that the toilet wasn’t leveled and it was rocking 

back and forth and that is what cracked the pipe. After we did the 

analysis, we could solve the problem at minimal cost. 

Now when I sit down to read agency regulatory analyses, they 

frequently read like somebody walking into a bathroom saying 

well, the problem is obvious, there is water on the floor. And the 

solution is obvious. We are going to make everybody buy a mop, 

and we will now take public comment on what types of mops we 

should require people to buy and how long the handle should be. 

Anyone who disagrees with the favored approach is accused of 

wanting to allow children to slip on wet floors. 

Now, lest you think I am exaggerating, I have examples in my 

written testimony of a number of cases where we read agency regulatory analyses looking for the definition of the systemic problem; 

and essentially, there is either an assertion of a problem with no 

underlying cause-and-effect theory, no underlying empirical analysis, a symptom gets misdiagnosed as a problem, or the problem 

is simply stated as the purpose of this regulation is to implement 

such and such Public Law. 

More broadly, about half the regulations we looked at scored a 

zero or a one on this criterion, indicating that there was a little bit 

of a perfunctory look at a problem or an assertion, but not much 

real analysis. Now, some did well; but about half of them just 

didn’t do much. 

We also find when we looked at the quality of the analysis that 

there isn’t much difference across Administrations. So this is not 

a partisan issue or a political problem, it is an institutional problem that can only be solved with changes in the incentives that 

agencies face to do good analysis. So instead of ready-fire-aim, the 

system should be look before you leap. 

Thank you for your time. 

Mr. COBLE. Thank you, Professor. 

[The prepared statement of Mr. Ellig follows:] 

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Mr. COBLE. Dr. Williams. 

TESTIMONY OF RICHARD A. WILLIAMS, DIRECTOR OF POLICY 

RESEARCH, MERCATUS CENTER, GEORGE MASON UNIVERSITY 

Mr. WILLIAMS. Chairman Coble, Ranking Member Cohen, and 

Members of the Subcommittee, thank you for the invitation to testify today. My name is Richard Williams. I have been involved in 

rulemaking and the regulatory process for over 30 years, first as 

a regulatory analyst, and then as a senior manager for the Food 

and Drug Administration, and those are issues I continue to care 

deeply about. I also worked briefly in the Office of Information and 

Regulatory Affairs. Today, I serve as director of policy studies at 

the Mercatus Center at George Mason University. 

From my experience in research, I believe the regulatory process 

we have today is not what was originally intended 60 years ago 

when we passed the Administrative Procedures Act, which was to 

create a rational, transparent, and inclusive process. When the 

APA was passed, then-Senator Pat McCarran, who was the Chairman of the Committee on the Judiciary, called it a widely heralded 

advance in democratic government. 

But one of the biggest problems with our regulatory process is 

that decisions are made first without any analysis or whether or 

not we know regulation is needed. And more importantly, without 

stakeholders being involved in that decision. By the time a proposal is generated, most of the significant issues have been decided 

and rules are steamrolled through to the final rule. The reason regulatory agencies decide early is that their incentives are to crank 

out new regulations, whether needed or not. 

After all, passing regulations is the business of regulatory agencies, and their success is measured and rewarded based on this activity. The problem with deciding early is that we are regulating 

in the dark, that is without sufficient knowledge of whether a regulation is needed or will work. This isn’t just FDA. 

In a paper I did interviewing senior economists in many regulatory agencies, I discovered that virtually all agencies make decisions early, and anyone inside or outside the agency who tries to 

suggest that regulation is not necessary generally finds that view 

unwelcomed. 

Analyzing that problem is part of what economists do in regulatory impact analyses; but if your goal is to regulate as opposed 

to solving a problem, there is no reason to wait for analysis. Perhaps that is one reason why my colleague, Dr. Ellig, shows that defining the problem is one of the agency’s biggest issues: if you are 

vague about the problem you are trying to define, then no one can 

accuse you of failing to solve a problem. 

Another problem with deciding early is that stakeholders end up 

commenting on decisions, not problems. Now some stakeholders do 

get their voices heard in agencies prior to decisions being made, 

but these are often firms or activists who want a particular regulation to serve their own ends. As this also advances what the agency 

is trying to do, those are welcomed voices. But those that are confined to the comments after proposals have been issued will find 

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agrees or you didn’t provide enough information to convince the 

agency. 

The result of all this activity is that we end up regulating far too 

often when it is not effective or not needed. That is why we now 

have 226 volumes of regulations, taking up 163,000 pages of rules, 

and we still continue to add 4,000 new regulations each year with 

this broken process. 

Certainly one tragic outcome of this, beyond our effect on competitiveness, is we can’t focus our resources on regulations that are 

truly needed and effective. We can fix this by changing the incentives that agencies face. However, we can no longer rely on executive orders as every President since Richard Nixon has tried to do. 

Only Congress can fix this. One way they can do it is by statutorily insisting that agencies start with a step to determine if a regulation is necessary. This would be something like a preproposal 

publication that the agency would investigate and contain elements 

like a clear definition of the problem that the agency seeks to solve 

and the evidence that it relied on to define the problem, an explanation of and evidence for why the problem warrants Federal intervention, an exploration of a range of options that the agency believes might solve the problem, and a preliminary estimate of benefits and costs of each option. 

All of this would be published to provide stakeholders and the 

public an opportunity to evaluate the agency’s data and research, 

and contribute additional information. As OIRA Director Sunstein 

says, they can take advantage of the fact that knowledge is widely 

dispersed in society, and public officials can benefit from access to 

that dispersed knowledge. In commenting on a preliminary analysis like that, stakeholders and the public are much more likely to 

comment broadly from their collective wisdom and expertise on 

both what the actual problem is and whether or not it needs a regulatory solution. Use of this knowledge will help us solve our problems much more effectively than our current process. While much 

more needs to be done to address institutional barriers to problemsolving, an essential first step will be in the establishment of some 

kind of an evidence-driven and inclusive process for defining the 

problem and the potential options to address it. 

Thank you. 

Mr. COBLE. Thank you, Dr. Williams. 

[The prepared statement of Mr. Williams follows:] 

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Mr. COBLE. We have been joined by the distinguished gentleman 

from Georgia, Mr. Johnson. Good to see you, Hank. 

Professor Glicksman, good to have you with us. 

TESTIMONY OF ROBERT L. GLICKSMAN, J.B. AND MAURICE C. 

SHAPIRO PROFESSOR OF ENVIRONMENTAL LAW, GEORGE 

WASHINGTON UNIVERSITY LAW SCHOOL 

Mr. GLICKSMAN. Chairman Coble, Ranking Member Cohen, 

Members of the Subcommittee, thank you for inviting me to testify 

today. 

My name is Robert Glicksman. I am the J.B. and Maurice C. 

Shapiro Professor of Environmental Law at The George Washington University Law School, although I am here today strictly in 

my personal capacity. 

The premise of the Mercatus Center’s regulatory report card 

project is that the Federal rulemaking process is flawed, and the 

best way to fix it is for agencies to engage in more rigorous regulatory analysis to provide better justifications of the need for and 

content of. More regulatory analysis, the idea is, particularly at the 

initial stages of regulation, would help avoid unnecessary regulation. The report card also reflects the conviction that cost benefit 

analysis is essential for identifying counterproductive regulations. 

My first response is that the framing of the problem is not one 

I would agree with. And to begin with, cost-benefit analysis, in my 

view, is itself a flawed technique for distinguishing between useful 

and counterproductive regulations. More fundamentally, the problems arising from the current regulatory process, for the most part, 

are not the result of regulations lacking justification or whose costs 

exceed their benefits. Instead, the primary problem is inadequate 

resources to allow agencies to fulfill their statutory responsibilities 

and fulfill their tasks of achieving public policy goals. 

In addition, the regulatory process already allows those affected 

by regulation to identify flaws in agency regulatory proposals, and 

affords both regulated entities and agencies opportunities to fix 

problems, such as overly costly or unfair regulation. 

I want to make five points. 

First, I think the presumption that we can get better regulation 

if we make cost-benefit analysis more rigorous is just wrong. Costbenefit analysis is inescapably limited by the difficulty of predicting 

and quantifying regulatory costs and benefits. Quantifies cost-benefit analysis requires agencies to reduce regulatory benefits, such 

as lives saved, to a crude dollar figure, so that the monetized benefits of regulation can be measured against its monetized costs. 

Some agency estimates of monetized regulatory benefits are absurdly low, and I have given some examples in my statement. 

Beyond that, inconsistencies in how agencies monetize benefits 

cast doubt on the usefulness of the effort. Cost benefit figures, 

therefore, provide a misleading aura of precision and rationality. 

Monetization of benefits often depends on arbitrary assumptions 

that tend to undervalue social benefits of regulation that are hard 

to quantify. Efforts to reform the methodology for cost benefit analysis will at best yield only marginal improvements in regulatory 

decisionmaking. And, therefore, cost-benefit calculations should be 

81 

used with caution and with an acknowledgment of their limitations. 

Second, the real problem to which Congress should be directing 

its attention is not insufficient agency focus on cost-benefit methodologies, but the destructive convergence of funding shortfalls, demonizing political attacks and outmoded legal authority, all of 

which have set the stage for ineffective enforcement and unsupervised industry self-regulation. Examples, some of which were pointed out by Representative Conyers and Representative Cohen already today, include the Deepwater Horizon spill in the Gulf of 

Mexico; the mine disaster at the Upper Big Branch Mine, West Virginia; a peanut products tank tainted by salmonella; glasses contaminated by cadmium sold to children at fast food restaurants; 

Code Red smog days when parents are warned to keep their children indoors; and the recall of widely used pharmaceutical drugs 

found to create risks of heart failure. 

All of these instances reflect agencies unable to do their jobs in 

protecting the public interest. More analysis will not fix these 

flaws. If anything, more analysis will only make things worse by 

slowing agencies down without demonstrably improving the quality 

of their regulatory decisions. 

Proponents of cost benefit analysis remain focused on perfecting 

formulas, assumptions, models, and data sets. If we really want to 

fix the regulatory system, we should, instead, focus on finding ways 

to help agencies effectively and efficiently achieve their statutory 

missions of protecting and the environment. 

Measures that I think would move us in that direction include 

providing agencies with the resources they need and enhancing 

their legal authority in situations in which it has become outmoded. 

Third, current law provides ample opportunities to address uncertainty, unnecessary or ill-advised regulation without heaping on 

agencies already stretched to the limit more onerous analytical responsibilities. The Administrative Procedure Act, in particular, provides notice and comment process which affords regulated entities 

and others opportunity to provide input before a regulation goes 

into effect. 

Fourth, even if agencies get it wrong during initial rule promulgation, the regulatory process allows those affected by regulation in 

unintended or counterproductive ways to seek relief from the agency in the form of waivers and exceptions. 

Fifth, agencies can revise rules that don’t work out as intended, 

either because they turn out to be too weak or too strong. And, finally, judicial review provides a check on unjustified regulation. 

I will just close by quoting from two former EPA administrators, 

Ruckelshaus and Whitman, who made this statement just last Friday in an op-ed in the Post: Our country today needs what it needed in 1970: a strong, confident, scientifically driven, transparent, 

fair, and responsible set of protective agencies, such as the EPA. 

Congress should help America achieve that. 

They also warned that those who do not support those goals 

should be aware that the American public will not long stand for 

an end to regulation that have produced their health and quality 

of life. 

82 

Thank you for the opportunity to talk to you today. 

Mr. COBLE. Thank you, Professor. And to all witnesses, thank 

you for your testimony. 

[The prepared statement of Mr. Glicksman follows:] 


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Mr. COBLE. Gentlemen, as I said, we try to apply the 5-minute 

rule to us, so if you all can keep your response to a terse manner, 

we would appreciate that. 

Failure is unfortunate. Some people indicate that those of us who 

want to refine the regulatory system or improve it, including PresiVerDate Aug 31 2005 16:47 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00098 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\032911\65485.000 HJUD1 PsN: DOUGA

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dent Obama has said that, we are not trying to compromise safety 

in doing this. At least that is my take on it. I think that needs to 

be fully appreciated. 

Dr. Ellig, in 2008, the average Bush administration agency score 

on your report was a failing 27.31 out of 60 possible points. In 

2009, the average Obama administration score was also a failing 

mark of 27.02 out of 60. Is it fair then to conclude that the failure 

of good decisionmaking is a systematic problem across the Republican and Democratic administrations? 

Mr. ELLIG. Yes. Statistically, there is no difference between those 

two figures. We are getting about the same results for both years. 

Mr. COBLE. Thank you, sir. 

Professor Glicksman, in your book, Risk Regulation At Risk, you 

write that agencies are more acquainted with the day-to-day details and difficulties of regulatory decisions than the communities 

of inquiry that operated the White House, Congress and the Federal judiciary, which are not specialized in the same way. Because 

agencies are much less accountable than the other branches of government, should we not be doing even more to ensure that their decisions are made transparently and on the record? 

Mr. GLICKSMAN. I certainly support transparent decisionmaking 

by agencies, and the tools that are provided by the Administrative 

Procedure Act to ensure transparency. Beyond that, both of the 

other branches of government, the Congress and the courts, do 

have ways of holding agencies accountable through, for example, 

amending statutes that Congress decides agencies have implemented in ways that don’t conform to congressional intent. The 

courts are often called upon to review regulations issued by agencies, and they have the responsibility, as well as the authority, to 

overturn regulations that lack adequate justification or are not supported by scientific evidence. And they do so on a regular basis. 

Mr. COBLE. Thank you, sir. 

Dr. Williams, under your view, agencies really don’t have an incentive to seek and heed input from those who suggest no regulation is needed. Instead, all of the incentives are to listen and those 

who want more regulation, whether or not more is needed. What 

are the most important ways in which we can reform the APA to 

restore agencies’ incentives to solve problems rather than just regulate for the sake of regulating? 

Mr. WILLIAMS. Thank you for the question. I think what happens 

now is that agencies are rewarded with budgets for passing regulations, and they are not penalized for passing regulations that are 

ineffective or unwanted. I think the first thing you have to look at 

are what are the incentives that need to be changed with agencies. 

I would start with the process that I outlined earlier where you 

separate out agencies, defining the problem and taking public input 

on what the problem is before they go ahead and make a decision. 

But somewhere down the road, you are going to have to address 

the incentives that agencies face, and particularly with budgets. 

Mr. COBLE. Dr. Ellig, let me try to beat that red light. The first 

and most important step in any good decisionmaking is to identify 

the problem one is attempting to solve. Is it really true that you 

found agencies did the worst job of all at this most basic step of 

decisionmaking? 

96 

Mr. ELLIG. Yes. The average score on our criterion for evaluating 

the systemic problem was around a 1.8 out of 5. So on average, 

that was with the worst criterion. And about half of the time we 

found it wasn’t really that well addressed at all. 

Mr. COBLE. I will now recognize the gentleman from Tennessee 

for 5 minutes. 

Mr. COHEN. Thank you, Mr. Chairman. 

Has the Mercatus group ever studied the Justice Department’s 

regulations or policies? 

Mr. WILLIAMS. Not to my knowledge, sir. 

Mr. ELLIG. We included several Justice Department regulations 

in our regulatory report card if they were proposed in 2008 or 2009. 

And at some time in the past, one of many independent scholars 

at Mercatus may have done some comments on Justice Department 

some time in the past 20 years. 

Mr. COHEN. Mercatus has been around for 20-30 years; right? 

When did you start your report card? 

Mr. ELLIG. This regulatory report card project started with the 

year 2008 a couple of years ago. A precursor project examined the 

quality of analysis of all regulations issued by the Department of 

Homeland Security since its inception. And that was done a couple 

of years ago. 

Mr. COHEN. So you had a report card in 2008? 

Mr. ELLIG. We started with the proposed regulations for 2008. 

Mr. COHEN. Did you have a report card for the year 2008? Or 

was the first report card in 2009? 

Mr. ELLIG. Just to clarify, we don’t have really a single document 

that we call a report card. The project is a wide variety of evaluations of individual regulations which are all available on our Web 

site, along with a set of notes which justify each score. This is the 

most transparent way this kind of a project has ever been done in 

the United States. We have that. 

For the past 2 years, we have produced a paper summarizing the 

results for the year, and we have a paper from 2008 and a paper 

from 2009 that also compares the 2008 and 2009 results. 

Mr. COHEN. Who is on your board of directors? 

Mr. ELLIG. Who is on our board of directors? 

Mr. COHEN. Yes. 

Mr. ELLIG. I can name a few folks. Honestly, I can’t name them 

all. 

Mr. COHEN. Name a few of them. 

Mr. ELLIG. I can name a few. Vernon Smith, Nobel Laureate in 

economics. 

Mr. COHEN. From industry, which industry people are on your 

board? 

Mr. ELLIG. From industry, the last time I looked, Charles Koch 

was on the board. Industry, I am not sure if a former Fed vice 

chairman counts as industry. 

Mr. COHEN. No, it doesn’t. 

Is Charles Koch your largest funder? 

Mr. ELLIG. I honestly don’t know. I don’t care and it is not—— 

Mr. COHEN. I care. The issue is I care. Is he your largest funder? 

Mr. ELLIG. I do not know. 

Mr. COHEN. Is he one of your largest funders? 

97 

Mr. ELLIG. I do not know, and it is not relevant to my work. On 

our Web site, we have a policy on the independence of research 

from funding. 

Mr. COHEN. Dr. Williams, do you know who your largest funders 

are, the largest funders of the Center? 

Mr. WILLIAMS. No, sir. I am also on the analytical side, and we 

have a very strict separation of who funds us and how we choose 

our analysis. I basically do analysis that I care deeply about, and 

most of it stems from the work I did at the Food and Drug Administration. And I still work intensively on those issues because I care 

about the food and safety issues. 

Mr. COHEN. The issues of food and drug, we have had spinach 

scares and we have had lettuce scares and chickens we had to get 

rid of and the Asian flu. We have had other problems with food. 

Are you concerned that a lessening of regulation might not subject 

the American people to more and more contaminated foods? 

Mr. WILLIAMS. No, sir. 

Mr. COHEN. You are not? 

Mr. WILLIAMS. My concern is when too often the agency either 

wants to or is forced to regulate before we have solutions to problems. What that means is we end up putting out regulations, people have to comply with those regulations, and we don’t solve the 

problem. For the 27 years I was in the Food and Drug Administration, we did not see food-borne illness decrease by one food-borne 

illness. We put out a number of regulations that were ineffective. 

What I am here to do today is to try to get effective regulations; 

not more, not less, effective regulations. 

Mr. COHEN. Professor Glicksman, Robert Reich, former Labor 

Secretary, said that those who argue that regulations kill jobs ignore an important fact: lack of adequate regulation kills people. 

You made some reference to that in studying effects, whether it is 

just dollars and cents or human lives. Do you think some of the 

changes in regulations that have been proposed might affect people’s lives in having more contaminated food? 

Mr. GLICKSMAN. Certainly, I think watered-down regulation or 

repeal of regulation is likely to have adverse effects on the public 

health and safety and the environment, which can translate into a 

downturn in economic productivity. There is often a dichotomy that 

is set up between regulation that is designed to protect the health 

and safety and the environment and economic productivity. I think 

it is a false dichotomy. They go hand in hand in the same direction 

in many instances. 

Mr. COHEN. Thank you. 

Mr. COBLE. I thank the gentleman. 

The distinguished gentleman from South Carolina, Mr. Gowdy, is 

recognized for 5 minutes. 

Mr. GOWDY. Thank you, Mr. Chairman. 

Dr. Ellig, in the course of 5 minutes, it struck me that both the 

motive and the methodology have been questioned by some of my 

distinguished colleagues from the other side. If you would, please, 

would you tell us about your methodology? Why who is on your 

board doesn’t influence your research? Go ahead and say what you 

wanted to say when my colleague from Tennessee was questioning 

you. 

98 

Mr. ELLIG. Basically, the way we are set up at Mercatus, fundraising is separate from research. And those of us who do research 

have the freedom to call them as we see them. That is what I like 

about working there. If it were organized in some other way, I 

probably wouldn’t want to work there. 

Now, as far as the scorecard goes, let me take off on the use of 

the word ‘‘subjectivity,’’ since the Ranking Member mentioned that 

in his introduction of our scorecard. 

We said in the paper we wrote that a critic might claim that this 

evaluation method is subjective and we have gone to great pains 

to try to minimize the problems that might occur as a result of 

that. And the actual word we used in our 2008 paper was ‘‘intersubjective,’’ which is a term from philosophy of science which 

means different people may be doing an evaluation and rendering 

a subjective opinion, but what counts for a 2 when I look at a regulation is the same as what counts for a 2 when Richard looks at, 

what counts for a 2 when our colleague John Morrall, a 29-year 

veteran of the Office of Information and Regulatory Affairs, looks 

at it, and so forth. So we try to get a common understanding of 

what types of performance in these analyses counts for what kind 

of a score. 

Then we put the scoring notes and the scores all up on our Web 

site so anybody can go look at it, and we welcome other folks to 

look at it, to read it and dialogue with us. And if they think we 

missed something, tell us. That is what it is about in academia. We 

won’t get upset; but just tell us what the specific issue or the problem is. 

Mr. GOWDY. Well, it strikes me that you gave equally abysmal 

scores to both Administrations. So the notion that you are biased 

in favor of one Administration or the other, I would be embarrassed at either score that was given. Let me ask you this to hopefully end on a happy note. The Department of Justice got the highest ranking that you gave. What are they doing that the Social Security Administration is not? 

Mr. ELLIG. I don’t think we have enough data yet to say well, 

this agency generally does a good job; and this agency generally 

does a bad job. We have a small number of agencies that will issue 

six or seven or 10 big regulations a year. But a lot of the other ones 

will be one or two or three, and there are different sub-entities 

within the agencies, some of which may do better or worse analysis 

than others. I don’t know that we can generalize from our results 

at this point to say this agency does a good job and this agency 

does a not-so-good job. 

Mr. GOWDY. Mr. Chairman, in a rare move, I yield back the balance of my time. 

Mr. COBLE. I thank the distinguished gentleman from South 

Carolina. 

The distinguished gentleman from Michigan is recognized for 5 

minutes. 

Mr. CONYERS. Thank you, Mr. Chairman. 

Members of the panel, I appreciate your comments. 

Do you have any familiarity with legislative Acts that are attempting to reform the regulatory process by the Congress? 

99 

Mr. ELLIG. My understanding is all kinds of stuff have been introduced. 

Mr. CONYERS. Anything in particular? 

Mr. GLICKSMAN. I am somewhat familiar with the proposed 

REINS Act. 

Mr. CONYERS. What about you, Dr. Williams? 

Mr. WILLIAMS. I also heard about the REINS Act as well. 

Mr. CONYERS. Have you heard anything good about it? 

Mr. WILLIAMS. My understanding, sir, is that Congress, a number a years ago, voted itself the right to turn back regulations, and 

that they have used that authority one time in something like 15 

years. And that the Reins Act would reverse that. 

Mr. CONYERS. Do you have any particular recollection, Dr. Ellig, 

about any proposals currently before the Congress, in this 112th 

Session? 

Mr. ELLIG. I have heard of the REINS Act. I have heard of a 

piece of legislation that essentially took President Clinton’s Order 

12866 and wants to write that into law so it is a requirement for 

all agencies rather than just an executive order. 

I remember hearing a few days ago there was a piece of legislation introduced that would have—that would essentially almost 

overturn a key Supreme Court precedent on direct wine shipment 

and give the States more latitude in how they choose to regulate 

interstate commerce in alcohol. So, yes, a lot of different things 

have been introduced. 

Mr. CONYERS. For experts in regulatory reform, your attention to 

some of the excessive amounts of time we spend on the debates is 

a little bit disturbing to me. This is the fourth hearing—this is the 

fifth hearing on regulatory reform. Have you ever heard anything 

about our hearings in this Committee, in the Judiciary Committee? 

Mr. ELLIG. I am aware of one previous hearing. I have to say as 

a regulatory specialist who used to work in a Federal regulatory 

agency where the general—a lot of issues of regulation I work on 

rarely get much attention in Congress, so I am delighted that it is 

finally going to get some attention. 

Mr. WILLIAMS. My expertise is actually in regulatory agencies for 

27 years. And the things I testified about today are things I came 

to realize over really three decades. I pay some attention to the 

bills that are going on in Congress. But also as an analyst, I am 

familiar with the fact that many bills are introduced but not 

passed. 

So my concern today is to try to fix the problems where agencies 

are making decisions first, and then getting stakeholder input. 

Mr. CONYERS. Well, I am a little perplexed about your expertise, 

but in the storm that is going on these first 3 months about regulatory reform, this Committee has spent more time on this subject 

than anything else. You spent your careers working in the field. 

And now we meet here this afternoon and you know almost little 

or nothing about what is being contemplated. How can we be expected to take your advice seriously if you don’t even have any 

knowledge of what we are doing to try to improve the regulatory 

process of which you complain pretty strenuously? 

Mr. WILLIAMS. It is not my understanding that we were called 

here to talk about individual, proposed statutes. In fact, because of 

100 

our status, we actually can’t advocate for or against any particular 

law. 

Mr. CONYERS. You can’t? Well, let me ask you this: Who are the 

agencies that are doing so poorly that they get zero or one ratings? 

Are you able to reveal that? 

Mr. ELLIG. Well, it is all revealed on our Web site. So, it is certainly already public knowledge. 

Mr. CONYERS. Yes, but you are here in front of me right now. 

Let’s talk about it. 

Mr. ELLIG. The zeros or the ones were just on one criterion which 

was—— 

Mr. CONYERS. Mr. Chairman, I ask unanimous consent for one 

additional minute. 

Mr. COBLE. Without objection, one additional minute. 

Mr. CONYERS. Thank you very much. 

Mr. ELLIG. The zeroes and the ones were on one particular criterion which was definition of the systemic problem. 

Mr. CONYERS. Just name the agencies you are talking about? 

Mr. ELLIG. An agency that had a lot of regulations that were 

zeros or ones was Department of Health and Human Services. 

Typically in the annual regulations, the Department issues recalculation of Medicare payment rates and various other things like 

that. 

Mr. CONYERS. Thank you for that one. 

Name a second one? 

Mr. ELLIG. Let’s see. In 2008, there was a Social Security Administration regulation on setting the time and place for appearances 

before administrative law judges that just didn’t say anything 

about the issue. 

Mr. CONYERS. What agency are you referring to, sir. 

Mr. ELLIG. Social Security Administration. 

Mr. CONYERS. You have got a list of maybe about 15, I will just 

ask you to submit them for the record. 

Mr. ELLIG. Each year there were about half of the regulations 

that got zeroes or ones, so that would be about 20 to 25 a year. 

Mr. CONYERS. Right. Thank you very much, Mr. Chairman. 

Mr. COBLE. You are welcome. The distinguished gentleman from 

Georgia is recognized for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. With all due respect, 

I must wonder why it is that we are holding this hearing today. 

Purportedly, it is going to give the Members an opportunity to discuss ways in which Federal agencies can improve their grades on 

the regulatory report cards issued by the Mercatus Center. And 

this Mercatus Center was founded by Rich Fink, correct? Do you 

know who Rich Fink is? 

Mr. ELLIG. Yeah, yes. I know who Dr. Fink is. 

Mr. JOHNSON. And Dr. Fink is former president for the Koch 

Family Foundation , isn’t that correct? 

Mr. ELLIG. I don’t know what title, I know he works for Koch Industries. I don’t know what other titles he might have accumulated. 

Mr. JOHNSON. Now Koch Industries is led by the brothers David and Charles Koch, and it is a $100 billion per year conglomerate. 

Isn’t that a fact? 

101 

Mr. ELLIG. It is a big company, yes. 

Mr. JOHNSON. The second largest private industry in the United 

States of America. 

Mr. ELLIG. Yes. Sometimes the news reports say second, sometimes they say first. 

Mr. JOHNSON. A $35 billion fortune that the brothers control, and 

out of that 35 billion, isn’t it a fact that they contributed about $30 

million to the George Mason University, much of which went into 

funding for the Mercatus Center? 

Mr. ELLIG. I don’t know because we keep research separate from 

fundraising, and I am on the research side of—— 

Mr. JOHNSON. You wouldn’t disagree with that, would you? 

Mr. ELLIG. I am saying I do not know. 

Mr. JOHNSON. Okay, well, I will tell you if it is true, and I have 

reason to believe that it is, doesn’t that put the credibility of the 

Mercatus Center and its report card at issue? Is that something 

that the public should be able to understand who is doing the grading and perhaps the fact that they are grading is influenced by 

their monetary interest in what they are grading? 

Mr. ELLIG. Well, I don’t pay any attention to it. And as far as 

whether that has any effect on the credibility, I am quite happy to 

have the credibility of this project stand on the quality of the research results we produce, the quality of the process we put together, and the reviews and comments that we get as we submit 

the papers from this project for peer review in academic journals. 

Mr. JOHNSON. Well, Dr. Williams, you have said pretty much essentially that agencies justify their very existence by issuing regulations. And oftentimes, there is no justification for the regulation 

that they promulgate. And you are saying, or can it be said also 

that legislators justify their existence by introducing legislation 

some of which may not be prudent, is that correct? 

Mr. ELLIG. Well, what I know about is regulatory agencies. I 

have 27 years in the Food and Drug Administration. 

Mr. JOHNSON. Do you mean to tell me that you think that the 

average agency employee comes to work every day with the sole 

purpose of deciding what kind of regulation I am going to propose 

today? 

Mr. WILLIAMS. I can’t testify to all agencies. I know that the employees of the Food And Drug Administration are some of the finest 

people I have ever meet. However, I do know—— 

Mr. JOHNSON. It is the Department of Energy, though, that you 

really want to get at. Tell me this. If you really want to get, since 

the Kochs are in the energy business, have a lot of concerns in the 

energy business, you are trying to make it more difficult for the 

Department of Energy and other departments to issue regulations 

which would govern the conduct of this for-profit corporation. 

Mr. WILLIAMS. Far from it. What I am concerned about, the same 

thing I was concerned about throughout my entire career is that 

we get effective regulations, that we not have ineffective regulations that crowd up compliance with the effective ones so that we 

can actually solve our social problems. That is my concern. 

Mr. JOHNSON. Thank you, sir. 

Mr. COBLE. We have been joined by the distinguished gentleman 

from California, Mr. Gallegly. 

102 

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

Dr. Ellig, could you maybe give us a little assessment about what 

steps the Congress should take to ensure agencies consider the economic impact of all regulations, report regulations are imposed? 

Mr. ELLIG. Well, I don’t think there is a silver bullet because the 

regulatory process is complex but there are some things that could 

help. One is to find some way to ensure that agencies actually do 

the analysis before they make decisions about regulations. 

Now, I know some folks say, oh, that is going to slow down the 

process, paralysis by analysis. I only know of one empirical investigation that tried to figure out whether that is actually true or 

not. It is a classic little article by a gentleman named Tim Muris. 

He is a distinguished law professor at George Mason. He was 

chairman of the Federal Trade Commission. And back in the 1980s, 

he wrote an article in which he looked at Federal Trade Commission rulemaking and pointed out that one of the most famous regulations in which the FTC took its time to develop a theory of the 

systemic problem and then investigate empirical evidence, the eyeglass rule to prevent bans on advertising of eyeglasses, the rule 

was done in 3 years. 

Another rule, a famous rule the FTC issued that was not really 

accompanied by a very good systemic theory of what the consumer 

harm was and didn’t have much empirical analysis and was essentially based on some anecdotes, was the FTC funeral rule. It took 

10 years to issue this thing. So I would suggest that maybe, just 

maybe, agencies can sometimes do a quicker job or at least a better 

job of regulating when they actually have to take the steps to understand what they are doing before they do it. 

Mr. GALLEGLY. When you mentioned the concern for slowing 

down the process, I am not sure that that is necessarily a bad 

thing sometimes. In fact, it would almost appear to me that without doing some of this analysis, it is almost a ready-shoot-aim type 

situation. And ultimately, the cure may be worse than the disease. 

So maybe there should be more of an attempt to understand the 

consequences, not that in the end the results may be the same, but 

at the same time, I would think that should be an integral part of 

the equation. I hope somebody agrees with that. 

Dr. Williams? 

Mr. WILLIAMS. I agree. I certainly agree and as I said in my testimony, I think that too frequently we are making decisions first 

without knowing what the impacts of those decisions are, we are 

basically regulating in the dark. 

Mr. GALLEGLY. Professor Glicksman. 

Mr. GLICKSMAN. I would just remark the regulations which I am 

most familiar the ones issues by EPA and Federal land management issues the BLM, the Forest Service and the Park Service are 

not characterized by lack of identification of regulatory objectives. 

It is quite clear when you read the preamble to an EPA regulation 

that seeks to control emissions of a cancer-causing pollutant that 

what the Agency is trying to do is to limit exposure to dangerous 

chemicals emitted by companies that, absent regulation, have little 

or no incentive to control their emissions in ways that will increase 

the regulatory compliance costs. 

103 

When an agency like the Forest Service issues regulations, it is 

quite clear that what they are trying to do is to enhance recreational opportunities for people like hikers, hunters, fishermen. 

So I just, in my experience, have not seen this problem of regulating without understanding what the objective of the regulation 

is going to be. 

Mr. GALLEGLY. I don’t know that any of us would really object 

to the objectives that you have just identified with. However, there 

sometimes are other issues that the economic impact could be more 

applicable than maybe the examples that you used. 

Thank you very much, Mr. Chairman. 

Mr. COBLE. You are indeed welcome, sir. We have been joined by 

the distinguished gentleman from New York, Mr. Reed. You are 

recognized for 5 minutes. 

Mr. REED. I am going to yield at this point in time, Mr. Chairman. 

Mr. COBLE. Thank you, sir. Gentlemen, we thank you for your 

testimony today. Without objection, all Members will have 5 legislative days to submit to the Chair additional written questions for 

the witnesses which we will forward and ask the witnesses to respond as properly as they can do so and that their answers may 

be made a part of the record. Without objection, all Members will 

have 5 legislative days to submit any additional materials for inclusion in the record. 

Again, gentlemen, thanks to each of you, and this hearing stands 

adjourned. 

[Whereupon, at 5:05 p.m., the Subcommittee was adjourned.] 

105 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Response to Post-Hearing Questions from Jerry Ellig, Senior Research Fellow, 

Mercatus Center, George Mason University; and Richard A. Williams, Director of 

Policy Research, Mercatus Center, George Mason University 


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Response to Post-Hearing Questions from Robert L. Glicksman, J.B. and Maurice 

C. Shapiro Professor of Environmental Law, George Washington University Law 

School 


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Æ 


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