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REGULATORY ACCOUNTABILITY ACT OF 2013 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

ON

H.R. 2122 

JULY 9, 2013 

Serial No. 113–37 

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 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

LAMAR SMITH, Texas 

STEVE CHABOT, Ohio 

SPENCER BACHUS, Alabama 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

MARK AMODEI, Nevada 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

RON DeSANTIS, FLORIDA 

JASON T. SMITH, Missouri 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

SPENCER BACHUS, Alabama, Chairman 

BLAKE FARENTHOLD, Texas, Vice-Chairman 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

JASON T. SMITH, Missouri 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

DANIEL FLORES, Chief Counsel 

JAMES PARK, Minority Counsel 
(III) 

C O N T E N T S 

JULY 9, 2013 

THE BILL 

H.R. 2122, the ‘‘Regulatory Accountability Act of 2013’’ ...................................... 3 

OPENING STATEMENTS 

The Honorable Spencer Bachus, a Representative in Congress from the State 

of Alabama, and Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ........................................................................................ 1 

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

of Tennessee, and Ranking Member, Subcommittee on Regulatory Reform, 

Commercial and Antitrust Law .......................................................................... 37 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Committee on the Judiciary ................................. 39 

WITNESSES 

Robert A. Sells, President, Titan America Mid-Atlantic Business Division 

Oral Testimony ..................................................................................................... 44 

Prepared Statement ............................................................................................. 47 

Jeffrey A. Rosen, Partner, Kirkland & Ellis LLP 

Oral Testimony ..................................................................................................... 51 

Prepared Statement ............................................................................................. 53 

Keith Hall, Mercatus Center at George Mason University 

Oral Testimony ..................................................................................................... 66 

Prepared Statement ............................................................................................. 69 

Diana Thomas, Department of Economics and Finance, Huntsman School 

of Business 

Oral Testimony ..................................................................................................... 76 

Prepared Statement ............................................................................................. 78 

David Goldston, Director of Government Affairs, Natural Resources Defense 

Council 

Oral Testimony ..................................................................................................... 84 

Prepared Statement ............................................................................................. 86 

Ronald M. Levin, William R. Orthwein, Distinguished Professor of Law, 

Washington University in St. Louis 

Oral Testimony ..................................................................................................... 89 

Prepared Statement ............................................................................................. 91 

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 ................................................................................................... 41 

Material submitted by the Honorable Spencer Bachus, a Representative in 

Congress from the State of Alabama, and Chairman, Subcommittee on 

Regulatory Reform, Commercial and Antitrust Law ........................................ 123 
Page

IV 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Steve Cohen, a Representative in Congress from the State of Tennessee, and Ranking Member, Subcommittee 

on Regulatory Reform, Commercial and Antitrust Law ................................... 149 

Supplemental Statement of Robert A. Sells, President, Titan America MidAtlantic Business Division .................................................................................. 151 

Supplemental Material submitted by Jeffrey A. Rosen, Partner, Kirkland 

& Ellis LLP ........................................................................................................... 159 

Supplemental Material submitted by Ronald M. Levin, William R. Orthwein, 

Distinguished Professor of Law, Washington University in St. Louis ............ 201 

Material submitted by C. Boyden Gray ................................................................. 251 

Statement of Administration Policy on H.R. 3010 ................................................ 280 

Letter of Opposition to H.R. 3010 .......................................................................... 281 

Response to Questions for the Record from David Goldston, Director of Government Affairs, Natural Resources Defense Council ....................................... 288 

Response to Questions for the Record from Ronald M. Levin, William R. 

Orthwein, Distinguished Professor of Law, Washington University in St. 

Louis ...................................................................................................................... 294
(1) 

REGULATORY ACCOUNTABILITY ACT OF 2013 

TUESDAY, JULY 9, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:04 a.m., in room 

2141, Rayburn Office Building, the Honorable Spencer Bachus 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Bachus, Goodlatte, Issa, Holding, Collins, Smith, Cohen, and DelBene. 

Staff Present: (Majority) Daniel Flores, Chief Counsel; Ashley 

Lewis, Clerk; and (Minority) James Park, Minority Counsel. 

Mr. BACHUS. Good morning. The Subcommittee on Regulatory 

Reform, Commercial and Antitrust Law hearing will come to order. 

Without objection, the Chair is authorized to declare recesses of 

the Committee at any time. We don’t anticipate any recesses. We 

ought to go straight through. 

We welcome all of our witnesses today. I am going to recognize 

myself for an opening statement, and other Members for an opening statement. And then the panel will give their opening remarks. 

From the onset of this Committee’s work on regulatory reform 

this Congress, I have stressed that the argument is not that we 

don’t need any relations at all. Reasonable rules provide clear rules 

of the road for businesses, so they have some certainty and know 

what to expect. They provide safeguard for consumers and protections for the environment. 

But clear, reasonable rules of the road that provide certainty are 

not what we have gotten from this Administration. And that has 

been a major contributing cause to the continuing underperformance of the U.S. economy. 

To a considerable degree, President Obama has expressed agreement that regulations should be more reasonable. For example, in 

2011, the President ordered regulatory agencies to consider costs 

and benefits, and choose the least burdensome path. The order continued: The regulatory process must be transparent and include 

public participation. 

This sounds very commendable, but the devil is always in the details. It is in the implementation stage where the promises have 

failed to pan out. 
2 

Many of the new regulations fall most heavily on small businesses that are the job creators for over two-thirds of the jobs in 

our economy. They can be a source of tremendous cost and frustration—that is, the regulations. 

Let me quote from an opinion article published in the Birmingham News this past Sunday, July 7, that was written by the 

Alabama state director of the National Federation for Independent 

Business, Rosemary Elebash. She said, and I quote, ‘‘Sometimes I 

think of the Federal Government as a bad boss. It barks an order, 

gives you an unrealistic deadline, and doesn’t have a clue how you 

will make it happen. But if things are not absolutely perfect, there 

will be heck to pay.’’ 

The cost of regulatory compliance has been estimated at about 

$11,000 per worker. This is real money that is then not available 

to be reinvested to help a business grow and hire more workers. 

Such regulatory trade-offs do not only affect business owners and 

employers. They affect the employees and individuals. 

If a regulation increases the price of a needed product without 

corresponding benefit, it takes away money that a person could 

spend elsewhere that would have a greater health or safety benefit. 

This is especially affects low-income Americans, for whom money 

is already tight. 

The current regulatory system clearly has shortcomings. Federal 

agencies need to do a much better job of determining when regulation is needed and proposing smarter regulations when warranted. 

And when forming regulations, we absolutely do have to consider 

the consequences on jobs and the economy, because it is the foundation on which everything else rests. 

The Regulatory Accountability Act, reintroduced this term by 

Chairman Bob Goodlatte, goes a long way toward ensuring that 

this will happen. It remedies many of the system’s most glaring 

weaknesses, and it does so based on bipartisan regulatory reform 

principles. 

This is sound legislation that I am proud to cosponsor and invite 

all of my colleagues to join me in supporting this bill. 

At this time, I will recognize our Ranking Member, Mr. Steve 

Cohen of Tennessee, for his opening statement. 

[The bill, H.R. 2122, follows:] 
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Mr. COHEN. Thank you. I appreciate the Chairman’s opening 

statement and his recognition. And in my position as the Ranking 

Member, and in my philosophical position, which is what puts me 

on the side of the aisle, I think that what he said was wrong. 

But I have said that before, and I will say again, we will remain 

friends. 

We have similar bills marked up regularly that do damage to the 

regulatory structure that we have in this country, and it is the 

whole question of balancing issues, and safety vs. due process and 

fairness, and all those things. And it just kind of depends where 

you come down. And the other side tends to come down on the side 

of business who doesn’t want to deal with regulations, but do want 

due process and fairness, as they see it. And then the other side 

looks at the public and consumers, and what is going to be fair and 

bright and save lives and purify the air and the water and make 

life better for everybody. 

So it is just kind of whether you are looking at a holistic way at 

what is good for everybody as a family, or whether you are looking 

at it just for the folks who are individually particularly concerned. 

And that is what we have pretty regularly in this Committee and 

kind of in this Congress. 

The Administrative Procedure Act is really a constitution of administrative procedures. And to amend it, you have to have a high 

burden of proof, just as you should have a high burden of proof to 

amend the United States Constitution. You shouldn’t be doing that 

without particularly good reasons, and I don’t think the burden of 

proof which you would have in amending the Constitution, which 

has very high thresholds, has been met by the proponents of this 

bill that may have changes that need to be made in the APA. 

We have all kinds of situations. We can show that workplace 

safety is important, and there are problems that we have now. 

There were 4,693 workplace deaths in 2011, according to the Bureau of Labor Statistics. That is a lot of deaths. 

And not that they would all be alive and living and breathing if 

we had a process of regulations in place to save them. We had 

those, but they are there to save people and to make conditions 

better. And there will be more deaths, I think, if we have less regulation and less oversight at OSHA and other places. 

The National Institute for Occupational Safety and Health, the 

American Cancer Society, and Emory School of Public Health, say 

they estimate 50,000 to 70,000 deaths from occupational-related 

diseases in the United States annually. And that is sufficient— 

overly sufficient. 

And the joint study by the Liberty Mutual Insurance Company 

and health economists at UC Davis say that we have $250 billion 

of workplace-related injuries. Only 25 percent is covered by workers comp. 

In addition, several provisions in this bill concern me. H.R. 

2122’s expanded use of formal rulemaking procedures for high impact rules is, to me, an unnecessary procedural expansion that will 

not serve to improve the quality of rulemaking, while at the same 

time would add major cost to the process, and effectively grind the 

process of rulemaking to a halt, which is probably the intent and 

motive of the law. 
38 

Furthermore, rulemaking largely fell out of favor more than a 

generation ago as its costs became were evident. Consensus developed that the notice and comment rulemaking procedures of 553, 

the APA, which are themselves fairly proceduralized, combined 

with the APA analytical requirements struck a better balance in 

ensuring a fair and accurate rulemaking process while maintaining 

agency effectiveness. 

The proponents of this bill offer no study or other data indicating 

the use of cross-examination and other facets of the formal rulemaking process are the more effective tools for making scientific 

and policy judgments than the current process. If anything, history 

says the opposite. 

An infamous example of the rulemaking procedure was before 

the FDA. It took more than 10 years to determine whether the 

FDA should require that peanut butter contain 90 percent peanuts, 

as opposed to 87 percent peanuts. 

A government witness was examined and cross-examined for an 

entire day about a survey of cookbook and patented peanut butter 

formulas, missing recipes, and his personal preferences for peanut 

butter, crunchy or smooth. 

While I make no judgments about crunchy or smooth, or about 

how many peanuts should be in peanut butter, I do think that government could do better to spend its resources than devoting 10 

years to decide the question of peanut butter and peanuts. 

We ought to not be returning to those days, and be wary of it. 

Another concern with H.R. 2122 is its codification of overly burdensome cost-benefit analysis requirements. 

Every President since Ronald Reagan has required that executive 

agencies conduct cost-benefit analysis, and that support for such 

requirements has been bipartisan. 

Nonetheless, the particular agency determinations required 

under this bill and the requirements that all these determinations 

be made for all rules would cause unnecessary delay and cost tremendous taxpayer resources. 

I do not see the net benefit of expanding cost-benefit analysis requirements to nonmajor rules, or to guidance documents, which do 

not have the force of law. 

Perhaps we should have a better cost-benefit analysis done of 

H.R. 2122, go to the source of the matter. It wouldn’t be res ipsa. 

It could be res ipsa, the thing speaks for itself. 

There are other concerns that I will not delve into in these brief 

opening remarks, including the bill’s provision establishing less 

deferential judicial review under which judges could second-guess 

an agency’s cost-benefit analysis and substitute their policy judgments for those of agency experts. 

This bill does nothing to improve the rulemaking and will only 

serve to stymie agencies from ensuring that health safety and welfare of the American people are protected. 

It will also go nowhere in the Senate. It will not become law. We 

are supposed to be lawmakers and not messengers. 

And, therefore, I close my message and urge my colleagues to be 

in opposition to this bill, and this message. 

I yield back the balance of my time. 

Mr. BACHUS. Thank you, Mr. Cohen. 
39 

I would now like to recognize the Chairman of the full Committee, Mr. Bob Goodlatte, for his opening statement. 

Mr. GOODLATTE. Mr. Chairman, thank you very much for holding 

this hearing on H.R. 2122, the ‘‘Regulatory Accountability Act of 

2013.’’ 

For over 4 years, since the great recession officially ended, America’s workers and small businesses have waited for real recovery to 

take hold. Last week, a new jobs report once again offered superficial reason to think good news might be growing. In June, the 

number of jobs added to the economy grew slightly. The number of 

long-term unemployed fell. And the labor force participation rate 

grew by 1⁄10 of 1 percent. 

But over 4 years into nominal recovery, these signs of improvement are still far too weak. What is worse, lurking beneath the 

surface, bad news continues to come. 

The June jobs report showed an increase of 240,000 in the number of discouraged workers, those who have simply quit looking for 

a job out of frustration or despair. 

The number of people working part-time but who really want to 

full-time work passed 8.2 million. That represents a jump of 

322,000 in just 1 month. 

Worst of all, the truest measure of unemployment, the rate that 

includes both discouraged workers and those who cannot find a 

full-time job, continues to exceed 20 million Americans, and that 

rate rose from 13.8 percent back to 14.3 percent in June. 

This continuing lag in recovery is distressing for all Americans. 

And the reason recovery has yet to fully arrive is all too easy to 

see: Real historical economic growth rates are missing. They have 

been ever since the great recession. 

Some say that this is a new normal, a yearly growth rate on the 

order of 2 percent in contrast to America’s historically higher 

growth rate. But a new normal of suppressed growth, lowered expectations, and more than 20 million Americans unemployed or underemployed, is something America’s workers and small businesses 

can’t accept, and America’s leaders must reject. 

The American people urgently need the jobs that only greater 

economic growth can give. One of the biggest obstacles standing in 

the way of growth and job creation is the growing wall of Federal 

regulation being built in Washington. 

The Small Business Administration and the Competitive Enterprise Institute have both estimated that Federal regulations now 

cost our economy well over $1 trillion per year. Yet the Obama administration is continuing to add historically high numbers of new 

major regulations. It has just launched a new regulatory initiative 

that is sure to increase energy costs for America’s families and job 

creators. This is progress in the wrong direction. 

As long as America’s small businesses and manufacturers continue to tell us that a hostile regulatory environment is one of the 

biggest challenges they face, we must look for ways to reduce unnecessary regulatory burdens. 

Regulations surely has a role to play in ensuring public health, 

safety, and welfare. But there is no reason Americans need to 

choose between having regulations that keep us safe and having 

economic growth that allows us to prosper. 
40 

That is why I reintroduced the Regulatory Accountability Act 

this Congress. Its reforms to the Administrative Procedure Act, the 

constitution of Federal regulation, are some of the most important 

regulatory reforms we can pass. 

Simply put, the Administrative Procedure Act is out of date and 

encourages regulatory overreach and excessive regulatory costs. 

Enacted in 1946, it places only a handful of light restrictions on 

the Federal rulemaking process. Congress wrote it long before anyone imagined the reach and expense of the modern regulatory 

state. 

The APA does not require agencies to identify the costs of their 

regulations before they impost them. It does not require agencies 

to consider reasonable lower-cost alternatives. The APA does not 

even require agencies to rely on the best reasonably obtainable evidence. 

While the APA does require agencies to give notice of proposed 

rulemaking, and receive public comment on their proposals, too 

often that is an after-the-fact exercise. 

Frequently, agencies predetermine the outcomes of rulemakings, 

and notice and comment serves only to paper over the record. 

The Regulatory Accountability Act fixes this problem by bringing 

the APA up-to-date. Under its provisions, agencies are required to 

assess the costs and benefits of regulatory alternatives. Unless interests of public health, safety, or welfare require otherwise, agencies must adopt the least cost alternative that achieves the regulatory objectives Congress has established. 

The Regulatory Accountability Act contains common-sense reforms that have bipartisan support in both the House and the Senate. In large part, that is because so many of its provisions are 

modeled on the terms of executive orders that Presidents Reagan, 

Clinton, Bush, and Obama have issued to compensate for the APA’s 

weaknesses. 

Over the past 3 decades, these bipartisan executive orders have 

proved that the principles of the Regulatory Accountability Act 

work. But the executive orders are not permanent, not judicially 

enforceable, do not bind independent agencies, and are too often 

honored in the breach. 

Under the Regulatory Accountability Act, the principles of these 

orders would at least become binding law. Sound decisions that 

meet statutory objectives while they respect the economy’s needs 

would be the order of the day, not the rare occurrence. 

American jobs, American growth, and American competitiveness 

would all be better for it, and I urge all of my colleagues to join 

me and do all we can to pass the Regulatory Accountability Act. 

Mr. Chairman, I am very pleased that you are holding this hearing. I am looking more forward to hearing the testimony of the witnesses. 

I am particularly glad to have with us Mr. Bob Sells of Titan 

American Corporation, which operates a great facility in Botetourt 

County, Virginia, manufacturing an essential ingredient for American growth, cement. 

Thank you. 

Mr. BACHUS. Thank you. 
41 

I noticed he is the Tennessee Volunteer. Being a University of 

Alabama graduate, it was too late to scrub you from the list of witnesses. Since you had a business in Roanoke, I decided to not even 

try. 

You know I am joking. It is a very stellar, Auburn and Alabama—— 

Mr. COHEN. Mr. Chairman, if I can interrupt this SEC talk, Mr. 

Conyers has a—— 

Mr. BACHUS. Absolutely. Without objection, Mr. Conyers’ opening 

statement, he is the full Committee Ranking Member, will be made 

a part of the record. 

And all Members’ statements will be made a part of the record, 

opening statements, without objection. 

[The prepared statement of Mr. Conyers follows:] 

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

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

the Judiciary, and Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law 

The so-called ‘‘Regulatory Accountability Act’’—which effectively will prevent 

agencies from issuing regulations—is among the most seriously flawed bills we have 

considered to date. 

My greatest concern is that H.R. 2122 will have a pernicious effect on the public health, safety, and well-being of Americans. 

The ways in which it does this are almost too numerous to list here, so I will just 

mention a few. 

For instance, H.R. 2122 would override critical laws that prohibit agencies from 

considering costs when public health and safety are at stake. 

These statutes include the Clean Air Act, the Clean Water Act, and the Occupational Safety and Health Act. 

This means that agency officials will now be required to balance the costs of an 

air pollution standard with the costs of how many anticipated lives and illnesses 

that will result in the absence of such regulations. 

At the hearing on this bill’s predecessor in the last Congress, our witness testified 

that if this measure were in effect in the 1970’s, the government ‘‘almost certainly 

would not have required the removal of most lead from gasoline until perhaps decades later.’’ 

This is because the bill imposes numerous procedural hurdles on the rulemaking 

process, a process that most experts agree is already too ossified. 

The bill adds roughly 60 additional analytical requirements to the already substantial analytical process, which threatens ‘‘paralysis by analysis.’’ 

By delaying the rulemaking process, we ultimately put American citizens at risk. 

Worse yet, some of these new requirements have been soundly rejected by respected administrative law academics and practitioners, such as the bill’s mandate 

requiring formal rulemaking. 

As our witness observed at this prior hearing, ‘‘Almost no serious administrative 

law expert regards formal rulemaking as reasonable, and it has been all but relegated to the dustbin of history.’’ 

This explains why more than 40 leading administrative law academics and practitioners as well as the American Bar Association have raised serious concerns about 

these new requirements. 

My second concern is that many provisions in the bill will facilitate greater influence of business interests on rulemaking and agencies. 

We already know that the ability of corporate and business interests to influence 

agency rulemaking far exceeds that by groups representing the public. 

But rather than leveling the access playing field, H.R. 2122 will further tip the 

balance in favor of business interests by giving them multiple opportunities to intervene at various points in the rulemaking process, including through less deferential 

judicial review. 

Finally, the bill is based on the faulty premise that regulations result in economically stifling costs, kill jobs, and promote uncertainty. 

While supporters of H.R. 2122 will undoubtedly cite a study claiming the cost of 

regulations exceed $1.7 trillion, the Congressional Research Service, Center for Pro-
42 

gressive Reform, and the Economic Policy Institute found the study to have been 

based on incomplete and irrelevant data. 

With respect to the impact that regulations have on job creation, then-Chairman 

Smith said during the hearing on H.R. 2122’s precedessor in the last Congress that 

the ‘‘American people urgently need jobs that only economic growth can give. Standing in the way of growth and job creation is a wall of federal regulation.’’ 

But the Majority’s own witness at that hearing, Christopher DeMuth, who appeared on behalf of the conservative think tank American Enterprise Institute, 

clearly debunked this argument. He said that the ‘‘focus on jobs . . . can lead to 

confusion in regulatory debates’’ and that the employment effects of regulation ‘‘are 

indeterminate.’’ 

Another argument—regulatory uncertainty hurts businesses—has similarly been 

debunked. 

Bruce Bartlett, a senior policy analyst in the Reagan and George H.W. Bush Administrations has observed: 

[R]egulatory uncertainty is a canard invented by Republicans that allows them 

to use current economic problems to pursue an agenda supported by the business 

community year in and year out. In other words, it is a simple case of political opportunism, not a serious effort to deal with high unemployment. 

Regulations that promote the health of our citizens and ensure the safety of 

American-made products will unquestionably lead to job creation and protect the 

competitiveness of our businesses in the global marketplace. 

Not surprisingly, the Administration issued a veto threat in the last Congress regarding the bill’s substantively identical predecessor stating that it ‘‘would seriously 

undermine the ability of agencies to execute their statutory duties’’ and that it also 

‘‘would impede the ability of agencies to provide the public with basic protections,’’ 

among other concerns. 

Rather than heeding these serious concerns, my colleagues simply want to push 

forward with a bill that has absolutely no political viability. 

It is a shame that we again will waste our time on legislation that has no future. 

Mr. COHEN. Thank you. 

Mr. BACHUS. Thank you. 

Is there anyone else who would like to make an opening statement? 

Mr. COHEN. Since you all talked about Alabama and UT, I would 

like to hear about Vanderbilt. Excellent, thank you. That is good, 

that is where I went to school. It costs a lot of money, but you get 

good students and you get good grades and they educate you well. 

And we are starting to do good sports too, but academics is first. 

We don’t get into how we do against Alabama and UT on the 

scores, because it would not be any contest. 

Mr. GOODLATTE. Mr. Chairman, with all this great connection 

that Mr. Sells has to Tennessee both as a Volunteer and his daughter attending the outstanding school of Vanderbilt, I hope that the 

Ranking Member will listen intently to his testimony. 

Mr. COHEN. With bated breath. [Laughter.] 

Mr. BACHUS. We have Virginia, Purdue graduates. We will not 

get too much into the Big Ten. 

But we do have a panel from all over the country, including here 

in Washington, so it is a distinguished panel. 

And I will start by introducing Mr. Sells. He is president of the 

mid-Atlantic business unit of Titan America, a heavy construction 

material producer in eight states employing 1,600 Americans. Titan 

America produces cement, concrete, concrete block, aggregates, 

sand, and beneficiated coal ash. 

Mr. Sells joined Titan America in 2001 as V.P. of Florida Concrete Products and assumed the role of mid-Atlantic business unit 

president in 2007, making him responsible for the Roanoke Cement 
43 

Company, Titan, Virginia, Ready Mix, S&W Ready Mix, and Powhatan Ready Mix. 

Mr. Sells earned his B.A. in civil engineering, and his M.S. in engineering from the University of Tennessee 

Mr. Jeffrey Rosen is a senior partner in the Washington, D.C., 

office of Kirkland & Ellis. Mr. Rosen practiced law on a wide array 

of areas at Kirkland & Ellis for 21 years before leaving in 2003. 

He rejoined the firm in 2009 focused on regulatory and litigation 

matters. From 2003 to 2006, he served as general counsel for the 

U.S. Department of Transportation. As general counsel, he was responsible for the department’s regulatory program, enforcement 

and litigation activities, legal issues, and legislative proposals. 

From 2006 to 2009, Mr. Rosen served as general counsel and senior policy advisor for the White House Office of Management and 

Budget, OMB, as we call it, making him the Administration’s lead 

lawyer for regulatory and fiscal issues. 

Appreciate your being here. 

Dr. Keith Hall is a senior research fellow at Mercatus Center at 

George Mason University. Prior to joining the Mercatus Center, Dr. 

Hall served as the 13th commissioner of the Bureau of Labor Statistics. In this role, he headed the principal fact-finding agency in 

the Federal Government in the broad field of labor economics and 

statistics. 

Prior to his service at BLS, Dr. Hall served as chief economist 

with the White House Council of Economic Advisors, where he analyzed a broad range of fiscal, regulatory, and microeconomic policies, and directed a team that monitored the state of the economy 

and developed economic forecasts. 

Dr. Hall received his B.A. from the University of Virginia, and 

his M.S. and Ph.D. degrees in economics from Purdue University. 

Dr. Diana Thomas is an assistant professor of economics and finance at Utah State University’s Jon M. Huntsman School of Business. Dr. Thomas’ primary fields of research include public choice, 

development economics, and Australian economics—oh, you are 

conservative? 

Prior to joining the Huntsman staff, Dr. Thomas worked as a 

junior portfolio manager at Allianz Global Investors in Frankfurt, 

Germany. Dr. Thomas earned her B.S. in finance, her M.A. in economics, and her Ph.D. in economics from George Mason University. 

Maybe I shouldn’t assume that just because she studied Australian—I mean Austrian economics. 

Dr. Goldston is director of government affairs for the National 

Resources Defense Council in Washington, D.C., and responsible 

for its governmental strategies. 

Prior to joining NRDC, Mr. Goldston served as project director 

for the Bipartisan Policy Center report ‘‘Improving the Use of 

Science in Regulatory Policy.’’ Mr. Goldston also served as chief of 

staff of the House Committee on Science from 2001 to 2006. 

He has been a visiting lecturer at Princeton, Harvard, and a columnist for journal Nature. He received his B.A. in history from 

Cornell University and completed coursework for a Ph.D. in American history at the University of Pennsylvania. 

We welcome you, Mr. Goldston. 
44 

Finally, Mr. Ronald Levin has testified many times before our 

Committee. He is the William R. Orthwein Distinguished Professor 

of Law at Washington University in St. Louis. Mr. Levin is a coauthor of a casebook, ‘‘State and Federal Administrative Law.’’ 

Previously, he chaired the section of administrative law and regulatory practice of the American Bar Association, a group of which 

he is still an active member. He served as the ABA’s advisor to the 

drafting committee to revise the model state Administrative Procedure Act. 

He also serves as a public member of the Administrative Conference of the United States and chair of its Judicial Review Committee. Before joining the law faculty, Mr. Levin clerked for the 

Honorable John C. Godbold of the U.S. Court of Appeals for the 

Fifth Circuit and practiced in the Washington, D.C., firm of Sutherland Asbill & Brennan. 

When did you clerk—— 

Mr. LEVIN. 1975 to 1976 in Montgomery, Alabama. The Fifth Circuit at that time included Alabama. 

Mr. BACHUS. Yes, he is a very distinguished judge. 

Mr. Levin received his B.A. from Yale and J.D. from University 

of Chicago. 

I was trying to figure out if I had tried cases maybe when you 

were a clerk. 

Mr. LEVIN. Hopefully, you had that privilege. 

Mr. BACHUS. But that is a tremendously distinguished panel. 

At this time, Chairman, do you have any questions you would 

like to ask? 

Wait, we have to have our opening statements. 

Barney Frank used to start asking questions before we heard the 

opening statements. I can’t believe I just did it. [Laughter.] 

Barney lives. His ghost, he came back. We had his portrait unveiling last week. 

TESTIMONY OF ROBERT A. SELLS, PRESIDENT, 

TITAN AMERICA MID-ATLANTIC BUSINESS DIVISION 

Mr. SELLS. Thank you, Chairman Bachus. 

Distinguished Congressional Committee Members, my name, as 

the Chairman mentioned, is Robert Sells. I serve as president of 

the mid-Atlantic business unit of Titan America, a heavy construction material producer in eight states. We employ over 1,600 Americans, and Titan America does produce cement, concrete, concrete 

block, aggregates, sand, and beneficiated coal ash, which are vital 

materials America needs as it recovers from the great recession 

and moves forward in a new era of resilient, sustainable construction and infrastructure. 

The construction materials we produce create the foundation of 

America. As a business that is highly regulated under Federal 

agencies, Titan America supports H.R. 2122, the Regulatory Accountability Act. We believe the process for justifying regulations, 

identifying the alternatives, evaluating the impact on jobs and the 

economy, assessing the cost-benefit impact of the regulations, and 

incorporating input from the regulated business community will be 

more robust and transparent under this legislation. 
45 

The result will be greater certainty in business for planning new 

investments, expansion, and job creation. 

While at times we have enjoyed good working relationships with 

agencies such as EPA, MSHA, OSHA, and the DOT, there are 

times, particularly during rulemaking, where the input of the regulated community has not been sufficiently requested, accepted, or 

considered, resulting in regulations requiring significant revisions 

or that ultimately are challenged in court and remanded or vacated. 

One example is the Portland cement NESHAP rule finalized in 

2010, which included some conditions that were technically unattainable and other conditions that were not considered in or vastly 

changed from the final proposal. 

After various challenges, this rule was reconsidered in 2013, but 

is now under legal challenges from environmental groups. 

Another example is MSHA’s pattern of violations rule. Safety is 

our number one value at Titan America. This rule was implemented this spring and goes too far in removing due process and 

could close a business without the opportunity to contest the allegations. At the present time, when a MSHA citation is issued, the 

company is required to implement the MSHA officer’s corrective action before the company can protest the citation. 

Under H.R. 2122, legislation would provide greater opportunities 

to consider input from the regulated community to make more 

achievable and rational regulations. 

We believe it is important for a regulation to be justified by aspects directly related to the regulatory statute for the regulation in 

question. 

However, co-benefits for aspects that are not attributable to a 

given regulatory statute are often used as justification. 

We experienced this in the Portland cement NESHAP, where a 

limit on hydrochloric acid, which was previously determined to be 

less than health-based standards, is now justified because of the coreduction of sulfur dioxide, which is regulated under other statutes. 

There are cases where cement plants have naturally low sulfur dioxide emissions, and there is little if any co-benefit for meeting an 

arbitrarily low costly hydrochloric acid limit. 

If there is a benefit for reducing sulfur dioxide emissions, then 

it should be addressed under the statutes for that emission, not by 

an expensive backdoor approach. 

This legislation will require that regulations be justified by their 

own direct benefits and that proper rulemaking be followed if there 

is justification for co-benefits. 

Greater input from the regulated community earlier in the process through advanced notice of proposed rulemaking and hearings 

during the proposed rule stage will provide the regulators with 

greater understanding of how the proposed regulations may impact 

businesses, what alternatives may be applicable, and what obstacles may prevent effective implementation of the regulations. 

Often, inconsistencies between regulations, and sometimes just 

lack of common sense, create complications for business without 

creating any additional benefit or protection intended by the regulation. 
46 

*See Appendix for supplemental statement submitted by this witness. 

One example is cement kilns using tires as an alternative fuel, 

which has many positive environmental benefits. If a tire is from 

a State collection program, it is legitimate fuel. But the exact same 

tire from a tire dump or landfill triggers a completely different set 

of regulations. 

Another example is DOT’s hours of service regulations, which 

were intended to provide adequate rest for over-the-road drivers. 

This has affected our local delivery professionals who spend less 

than 40 percent of their time behind the wheel. 

Finally, this legislation addresses the propensity of agencies to 

issue guidance and move formal rules, with the effect being that 

regulators at State and regional levels use this guidance with the 

weight of regulations. We have seen this in draft guidance and judicial waters. 

In closing, I would like to thank this Committee for hearing my 

testimony and would like to thank each of you for your service in 

the United States Congress, representing the citizens of your district and our great Nation. 

I will be happy to answer questions at the end of our testimony. 

[The prepared statement of Mr. Sells follows:]* 
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Mr. BACHUS. Thank you. 

Mr. Rosen? 

TESTIMONY OF JEFFREY A. ROSEN, PARTNER, 

KIRKLAND & ELLIS LLP 

Mr. ROSEN. Chairman Bachus, Ranking Member Cohen, Chairman Goodlatte, and other distinguished Members of the Subcommittee, thank you for inviting me here today to address the 

Regulatory Accountability Act, which represents an important set 

of well-considered improvements to administrative law and regulatory practice. 

My name is Jeff Rosen. I am currently a partner at the law firm 

of Kirkland & Ellis. And as you heard, I previously served as general counsel at the U.S. Department of Transportation, and as general counsel and senior policy advisor at the White House Office of 

Management and Budget. 

The views and observations I am offering today, however, are entirely my own, based on my own experiences in and out of government. 

So let me say first, the regulatory process is one that is not always well understood, but it often produces results that produce 

strong reactions. Some rules are sensible and beneficial. Others are 

not. 

We need to remember that regulation affects not only businesses 

but also municipalities, hospitals, universities, farmers, airports, 

and others, including individuals. 

Now, when the Administrative Procedure Act was enacted in 

1946, it was meant to restrict some excesses and arbitrariness. And 

in many ways, the APA has worked well. But over time, agencies 

have been able to promulgate more and more costly regulations 

with seemingly few real inhibitions or meaningful restrictions on 

their doing so. 

The Code of Federal Regulations is now 238 volumes and nearly 

175,000 pages. That troubles people who agree with Winston 

Churchill’s warning back in 1949 that ‘‘if you make 10,000 regulations, you destroy all respect for the law.’’ 

And even individual Federal rules can be hugely consequential to 

our economy. 

For example, in 2011, EPA proposed and then postponed a new 

rule regarding ozone. The agency itself had estimated the rule 

could have added cost of as much as $90 billion per year, even 

though there are States like California that have not even complied 

with the existing ozone rule. 

Consider this, Federal agencies by rulemaking can issue new 

laws involving costs of more than $1 billion with only 30 days’ public notice and only one chance for public comment with no hearing, 

no rebuttals of comments submitted by others, and no other debate 

or dialogue of any kind. 

Last December, the GAO even reported that during a 7-year time 

period in which it reviewed rules from 52 Federal agencies, the 

agencies did not even provide advanced public notice or allow any 

public comment for approximately one-third of major rules that involved more than $100 million each. 
52 

*See Appendix for supplemental material submitted by this witness. 

That is probably not the best way for things to work, especially 

when the stakes to our economy our highest. 

Sometimes, the existing process works fine. But for significant 

rules, we need more opportunities for public input, more assurances of the accuracy of the information being relied upon, more 

basis to know the rules don’t impose more costs than is necessary 

or worthwhile, and some strengthening of the checks and balances 

on regulations that are already in place. 

The Regulatory Accountability Act addresses these issues with 

about a half-dozen really key improvements, which are described in 

my written statement. These involve the use of advanced notices 

for significant rules, requiring cost-benefit analysis by all agencies 

using guidelines set by OMB, applying the Information Quality Act 

to rulemaking, allowing focused hearings for rules involving more 

than $1 billion of impacts, giving OMB additional authority over 

agency guidance documents, and strengthening judicial review in 

some circumstances. 

These build on existing law and practice, including requirements 

of executive orders from Presidents of both parties over the last 30 

years, and the improvements are well-grounded in actual experience and in common sense. 

It is also a virtue of this bill that it has bipartisan sponsors both 

in the House and in the Senate. 

With respect, I will say there are always some who will oppose 

any change to the Administrative Procedure Act, just as there were 

some who opposed the APA itself in 1946. 

But the Regulatory Accountability Act represents a very useful 

step forward. It deserves to move ahead in this Congress. 

So thank you for the opportunity to appear here today. And I will 

look forward to addressing any questions you may have. 

[The prepared statement of Mr. Rosen follows:]* 
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Mr. BACHUS. Thank you. 

Dr. Hall, you are recognized. 

TESTIMONY OF KEITH HALL, MERCATUS CENTER 

AT GEORGE MASON UNIVERSITY 

Mr. HALL. Chairman Goodlatte, Ranking Member Conyers, Subcommittee Chairman Bachus, Subcommittee Ranking Member 

Cohen, and Members of the Committee, thank you for the chance 

to discuss regulations and the current state of the U.S. labor market. I appreciate the opportunity to testify today. 

It has now been a full 4 years since the end of the great recession. Unfortunately, the U.S. labor market is far from recovery. At 

the end of the recession, just 59.4 percent of working age Americans had employment. Today that number is even lower at 58.7 

percent. 

Over 100 million people are now jobless, and there are about 4.5 

million long-term unemployed, and there are likely millions more 

long-term jobless that are not being counted. 

We may well be looking at a decade before the labor market is 

fully recovered. Even then, many of the long-term jobless may 

never fully recover their lost earnings or even find employment. 

Our primary focus should be on encouraging the economic growth 

that we need to push our labor market into full recovery mode. 

The biggest problem with the U.S. labor market is a lack of economic growth. According to our biggest job creators, small-business 

owners, government is playing a role in holding back the economy. 

Remarkably, surveys of small-business owners show they are 

more worried about the government than the weak economy. 

For example, according to the Gallup-Wells Fargo Small Business Index, a third of respondents reported that their most important challenge is government regulation, taxes, health care/ 

Obamacare, or just government generally, more than are concerned 

about attracting new customers or the economy generally. 

According to the National Federation of Independent Business, 

nearly half of all small-business owners cite either taxes or government regulation as their biggest single problem. According to both 

surveys, only 6 percent of owners are primarily worried about the 

quality of their employees. 

The most important thing we can do now is to eliminate the tremendous amount of uncertainty over economic policy that is holding back consumers and the economy. 

One serious concern of business seems to be the potential for new 

regulations. It is clear that poorly designed regulation can cause 

significant economic distortions that affect labor market. It is also 

true that even a well-designed regulation where there are significant benefits has an economic cost that needs to be considered. 

Any regulation that raises the cost of production for an industry 

lowers productivity and likely creates unemployment. 

Unemployment at anytime is costly for those involved. But in a 

bad labor market like today’s, it can be devastating. 

For decades now, there has been a significant amount of economic evidence that unemployment results in a significant and sustained earnings loss for individuals. The immediate impact of job 

loss includes lost wages, job search costs, and retraining costs. 
67 

Even after being reemployed, the permanent lost earnings for the 

jobless will be significant. 

Studies have shown it can take as long as 20 years for reemployed workers to catch up on lost earnings, largely due to skill 

mismatches between the jobs lost and the new jobs created in the 

economy. 

These losses occur for workers with different lengths of previous 

job tenure and all major industries, and for workers of any age. 

I anticipate that the poor performance of the labor market over 

the past 4 years will lead to an even greater earnings loss for the 

currently unemployed. 

At this time, we should also be particularly concerned with who 

bears the unemployment burden of regulatory changes. Youth and 

older workers have been particularly hard-hit by the recession and 

weak economic recovery. 

Youth have a higher unemployment rate, and despite their 

youth, are overrepresented in the long-term unemployed. 

For older workers, unemployment can be even costlier. It now 

takes an average of over 30 weeks for someone over 55 years old 

to find new work. 

Despite clear evidence of the devastating effects of unemployment on U.S. workers, it is routine practice for regulatory agencies 

to estimate the benefits and costs of regulatory changes under 

what economists generally refer to as the full unemployment assumption. 

This is literally the view that involuntary unemployment never 

exists because any individuals that become unemployed are instantly and costlessly reemployed in nearly identical jobs. If ever 

it was obvious that this is an inappropriate assumption, it is now 

in the aftermath of the great recession. This of course results in a 

systematic and significant underestimation of the cost of regulatory 

change. 

I have several recommendations for consideration. 

First, regulatory changes create unemployment, and unemployment in a bad labor market is much costlier than at other times. 

We should, therefore, consider suspending all but the most important regulatory changes until we are much further along into a 

labor market recovery. 

Second, I don’t know of a single instance where a regulatory 

agency estimated that unemployment cost of a regulatory change. 

This practice is misleading to the public and to Congress. It should 

stop. Every new and significant regulatory change proposal should 

be accompanied by an economic impact analysis that includes a 

genuine attempt to project its unemployment costs. 

Third, when regulatory agencies estimate the cost of unemployment, they shouldn’t limit themselves to the employment effect 

within the regulated industry. The unemployment created by regulatory changes can be much higher outside the regulated industry 

than inside. 

Fourth, we should stop discussing hiring created by regulations 

as if that is part of the economic benefit. It is not. It is part of the 

cost. Every compliance job lowers productivity and output in the 

regulated industry. It therefore comes at the expense of production 
68 

jobs. The goal of any regulation should be to achieve its goals with 

the least use of additional resources, including labor resources. 

And fifth, since agencies make no effort to estimate the unemployment effect of regulations, they have no idea of who loses work 

and, therefore, of who is bearing the economic burden through job 

loss. 

Since regulation impacts industries unevenly, there may sometimes be real issues about its distribution effects, exactly what occupations are impacted, and where the jobs are currently located. 

Thank you. 

[The prepared statement of Mr. Hall follows:] 
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Mr. BACHUS. Thank you. 

Dr. Thomas? 

TESTIMONY OF DIANA THOMAS, DEPARTMENT OF 

ECONOMICS AND FINANCE, HUNTSMAN SCHOOL OF BUSINESS 

Ms. THOMAS. Chairman Goodlatte, Ranking Member Conyers, 

Subcommittee Chairman Bachus, and Subcommittee Ranking 

Member Cohen, and Members of the Committee, thank you for the 

chance to testify on the effects of regulation on low-income households today. I appreciate the opportunity to be here. 

My research shows that regulation has unintended consequences 

that are particularly detrimental to low-income households. These 

unintended consequences are as follows. 

Regulation of health and safety and the environment often represents the preferences of high-income households, but it increases 

prices and lowers wages for all households. As a result, low-income 

households are forced to pay for the mitigation of risks that are not 

their priorities. 

In this sense, regulations can have a regressive effect. Because 

of this regressive effect, it should be subject to a cost-benefit test 

that takes into consideration potential regressive effects. 

So let me explain that in a little bit more detail. According to the 

CDC, the top two causes of death in the United States are cancer 

and heart disease. And we spend billions of dollars every year to 

try to privately mitigate those risks. In doing so, we have some effect at least on the risk that we face. 

Just to give you a point of reference, in 2002, the mortality risk 

associated with heart disease was roughly 19 in 10,000 of population, so 19 individuals out of 10,000 died from heart disease. 

Regulation, on the other hand, often addresses risks that are significantly lower. There are numerous OSHA rules that address occupational safety, but work-related fatalities only happen with the 

frequency of roughly 0.36 in 10,000 of population, so much lower. 

When people make private decisions to reduce risks, they start 

out with the highest risks that affect them the most. That just 

makes sense. As your income increases, you will also consider 

lower probability risks. What that means is then ultimately highincome households will already be concerned with low-probability 

risks, but low-income households are still dealing with high-probability risks that affect them the most. 

When regulation is directed at small probability risks that are 

costly to mitigate, it, therefore, represents the preferences of the 

wealthy. But it applies to everybody, regardless of income. So that 

means everybody has to pay the higher prices. 

Because low-income households have limited resources, that 

means that regulation forces them to transfer resources from mitigating high-probability, high-priority risks to the mitigation of lowpriority, low-probability risks. 

Essentially, they have less money to spend on the mitigation of 

risk that actually matters to them because they are forced to pay 

for the priorities of higher income households. 

Take, for example, the 2005 removal of the essential use designation for CFC as a propellant in medical inhalers by the FDA. CFC 

is a greenhouse gas, and it was regulated because of its con-
77 

sequences on the ozone layer. Medical inhalers that use CFC had 

previously been exempted from the 1987 Montreal Protocol, which 

phased out ozone-depleting substances, and the Montreal Protocol 

was actually pretty successful at achieving its goal. The World Meteorological Organization estimated in 2002 that the ozone layer is 

expected to return to pre-1980 levels by the middle of the 21st century. 

Now that same research report also pointed out that additional 

reduction in CFC emissions would produce only small improvements, and that nonindustrial sources of CFC emissions were insignificant. 

So basically, what the WMO research indicated was that the benefits of banning CFCs as a propellant in medical inhalers were uncertain and at best negligible. The cost of the ban to consumers 

were real and significant, however. The price of the asthma inhalers, for example, have roughly tripled since this rule has been implemented. And that affects several million Americans. And low-income households, in particular, as you can imagine, are affected by 

this a lot. 

So when regulation is directed at small risks that are expensive 

to mitigate, it can have regressive effects on household income. And 

low-income households have fewer resources on hand to address 

their private high-priority concerns a result of that. 

This unintended consequence of regulation is real, but it is foreseeable, which is why it is important for agencies who are tasked 

with public welfare to consider the regressive effects of the regulations that they are considering, and to analyze the cost and benefit 

before they make decisions that affect people. 

Thank you very much for the opportunity to testify, and I look 

forward to your questions. 

[The prepared statement of Ms. Thomas follows:] 
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Mr. BACHUS. Thank you. 

Mr. Goldston? 

TESTIMONY OF DAVID GOLDSTON, DIRECTOR OF GOVERNMENT AFFAIRS, NATURAL RESOURCES DEFENSE COUNCIL 

Mr. GOLDSTON. Thank you, Mr. Chairman, Mr. Cohen, Chairman 

Goodlatte, and Members of the Committee. Thank you for inviting 

me to testify today. 

NRDC believes H.R. 2122 is a fundamentally flawed bill. 

Though designated the Regulatory Accountability Act, the measure might be better named the ‘‘regulatory atrophy act’’ because its 

primary effect would be to prevent the government from exercising 

its responsibility and duty to protect the public. 

The title is also misleading because it implies that the current 

system lacks checks and balances when, in reality, Congress and 

the courts already have ample authority to hold agencies to account, and the entire system gives industry and others numerous 

opportunities, formal and informal, to influence the development of 

regulations. 

But the bill is not designed to codify an objective sense of accountability in any event. There is nothing in the bill that would 

enable anyone to take an agency to task if it failed to recognize a 

problem or to safeguard the public. No provision of the bill would 

make an agency more likely to, say, deal with shoddy lending practices that could cause an economic meltdown or prevent an outbreak of a foodborne illness or limit emissions of a pollutant. 

H.R. 2122 instead would make it much more difficult and timeconsuming to address such problems. 

Indeed, the bill is a kind of anthology of bad ideas that have already proven to interfere with efforts to protect the public. 

For example, H.R. 2122 would require agencies to hold formal 

hearings on many proposals. Formal hearings are a procedure that 

fell into disuse years ago because experience showed that they ate 

up huge quantities of time without contributing much to the quality of regulations. But apparently, the potential for inordinate 

delay is a good enough reason to bring hearings back with a vengeance in H.R. 2122. 

Even more pernicious is the reasonable sounding requirement 

that agencies ‘‘adopt the least costly rule’’ to deal with the problem. 

Now, no one objects to the notion that safeguards should achieve 

their goals as inexpensively as possible, and there are plenty of existing incentives, administrative and political, to do just that. 

But the bill’s language sets up a nearly impossible legal hurdle. 

For a rule to be upheld, the agency would have to prove that it had 

carried out an exhaustive analysis of virtually any and every alternative, including any alternative thrown in its way to sidetrack the 

process. 

We don’t have to guess what the impact of this would be, because 

similar language has already made a dead-letter of key provisions 

of TSCA, the Toxic Substances Control Act. A court ruled that EPA 

could not ban asbestos, a material with cancer-causing properties 

that are beyond dispute, because it could not prove that it had analyzed every alternative. 
85 

It is ironic, if unsurprising, that some conservatives are embracing alternatives analysis in H.R. 2122 given that, at the same time, 

they are trying to remove the much simpler and more reasonable 

alternatives analysis from NEPA, and there will be a hearing before the Subcommittee on that on Thursday. 

But that is just more evidence that the alternatives provision in 

H.R. 2122 are expected to be hurdles to block progress rather than 

pathways to facilitate reaching a goal. 

There are other ironies in H.R. 2122. Conservatives often make 

a whipping boy of the Federal courts, but the bill requires the 

courts to take on a more activist role, substituting their judgment 

for the agency’s, even on highly technical and scientific matters. 

And the bill claims to seek transparency, requiring agencies to 

make public virtually anything they have touched during the regulatory process, yet H.R. 2122 shields the involvement of the Office 

of Information and Regulatory Affairs, OIRA, from scrutiny, even 

while expanding its role and enshrining it in law. 

Under the bill, OIRA will likely play the most political and determinative part in the entire regulatory process, yet its guidelines 

are not subject to comment and its workings can remain private. 

All of this would be inexplicitly inconsistent if its overall purpose 

were not so abundantly clear, to block new safeguards with an ornate process and to slow anything that cannot be stopped entirely. 

This is not accountability, not an effort to ensure that agencies 

are effectively and efficiently carrying out their legal duties. Rather, this is an effort to amend and weaken existing law, and future 

statutes to boot, by overlaying a suffocating blanket of anti-regulatory bias. 

The result will be fewer needed safeguards despite public support 

for protection, and study after study showing that the benefits of 

regulation far outweigh the cost. 

Moreover, studies have found regulation to have a neutral to 

positive impact on employment. 

Time prevents me from describing all the problematic provisions 

of H.R. 2122, which I should say include overriding many existing 

statutes, including provisions of the Clean Air Act. 

But let me close by saying that it is appropriate to hold a hearing during the summer movie season. H.R. 2122 has a plot a bit 

like a summer suspense movie or novel, where a pleasant-seeming 

character insinuates his way into a household and slowly but surely begins annihilating it. 

H.R. 2122 traffics in reasonable concepts and unthreatening language, but its cumulative effects on regulatory law will leave agencies hamstrung and the public exposed. 

Thank you. 

[The prepared statement of Mr. Goldston follows:] 
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*The Public Citizen chart referred to is not reprinted in this hearing record but is available 

at http://www.citizen.org/documents/Regulations-Flowchart.pdf (7/18/13). 

Mr. BACHUS. Thank you. 

Professor Levin, I want to apologize to you. I was reading your 

bio, but I think I called you ‘‘Levine.’’ 

Mr. LEVIN. Levin is correct. 

Mr. BACHUS. I know it is Levin, so I want to apologize. It is Ron 

Levin. I am reading your biography like I don’t know who you are. 

Mr. LEVIN. No offense taken. 

Mr. BACHUS. I apologize for that. 

TESTIMONY OF RONALD M. LEVIN, WILLIAM R. ORTHWEIN, 

DISTINGUISHED PROFESSOR OF LAW, WASHINGTON UNIVERSITY IN ST. LOUIS 

Mr. LEVIN. Chairman Goodlatte, Chairman Bachus, Ranking 

Member Cohen, and Members of the Subcommittee, thank you for 

inviting me to testify before you again. 

My primary message today is one of caution. The bill before you 

has some positive features, but it also contains a host of provisions 

that would burden and disrupt the rulemaking process, or that do 

not seem very well thought out. 

The corresponding bill in the previous Congress, H.R. 3010, raced 

through the House in only 3 months from introduction to final passage. And the House did not respond to numerous criticisms from 

administrative lawyers. So I hope the current bill will get closer 

vetting this time around. 

I do not have time to discuss all aspects of the bill, but I want 

to commend to your attention the comments of the ABA Administrative Law Section, which did analyze H.R. 3010 in detail 2 years 

ago. I have appended that report to my testimony. I am not speaking for the ABA or the section today, but I did work actively on 

those comments. So if you questions about the issues the section 

raised, I would probably be in a good position to respond as an individual. 

For now, I want to highlight a few key troubling areas in the bill. 

My core concern about the bill is that it would greatly complicate 

the rulemaking process and make it impossible for agencies to 

carry out the missions that Congress has assigned to them. 

Many students of the administrative process believe that rulemaking is already too cumbersome. I believe that 2 weeks ago, 

Public Citizen presented a humongous chart* documenting all that. 

I think you saw it at that time. 

That is the chart, in case you don’t remember it. 

But this bill would make Section 553—it does. But that is the 

modern rulemaking process. 

But this bill would make Section 553 ten times longer and it 

would aggravate that situation enormously. One way it would do 

this is by specifying a range of considerations that an agency would 

have to take into account in every rulemaking proceeding, whether 

it is significant or not, including costs and benefits of the proposed 

rule and all reasonable alternative rules; estimated effect of the 

rule on jobs, innovation, and competitiveness; whether the agency 
90 

See Appendix for supplemental material submitted by this witness. 

thinks it is required to adopt the rule or merely has discretion to 

adopt it; whether existing rules created the problem; and so forth. 

And some of those inquiries would be fine in a proceeding to consider a very elaborate and costly rule. But it is wasteful to require 

them in every rulemaking proceeding. 

Usually, if an issue is relevant and important to a particular 

rulemaking, some stakeholder will raise the issue in the comment 

period and the agency will then be required under current law to 

respond. But this bill requires the agency to address every item on 

the laundry list, whether it is significant in that case or not. And 

this is a waste of limited resources, which is especially worrisome 

in these days of serious budget-cutting. 

Second, the bill instructs agencies to consider some of these factors, even where the agency’s enabling statute would otherwise forbid it to consider them. Super-mandates of this kind, as they are 

called, not only oversimplify the enormously diverse range of problems that various agencies regularly face, but also would give rise 

to a large amount of confusion and litigation. So unelected judges 

would have to sort out those mixed congressional messages. 

Third, for high-cost rules, parties would have the right to trigger 

trial type hearings under the APA’s formal rulemaking provisions. 

Over 30 years’ time, courts, agencies, scholars, and professional organizations have overwhelmingly concluded that formal rulemaking is obsolete, and they have abandoned it where they are not 

required to use it by statute. 

They conclude the courtroom methods are usually not effective 

tools for resolving highly technical policy disputes in regulatory 

contexts, but they do lead to unwarranted delays in completing the 

agency’s business. 

And formal rulemaking is also subject to ex parte contact rules 

that would impede agency decisionmakers from conducting freeflowing dialogue with the public, with OIRA, and with Congress 

itself. 

But nevertheless, this bill would bring this dinosaur back from 

near extinction. 

Fourth, the bill contains some truly radical provisions expanding 

judicial review of agency action. These provisions would turn courts 

into policymakers in various contexts, although judges don’t have 

political accountability or subject matter specialization to assume 

that role. 

In all of these areas and others we might have a chance to discuss today, I hope the Subcommittee will tread carefully and make 

sure the balance between accountability and effectiveness doesn’t 

become skewed as this bill threatens to do. 

And with that, I will conclude my remarks and be happy to respond to your questions. 

[The prepared statement of Mr. Levin follows:]* 
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Mr. BACHUS. Thank you. 

At this time, we will recognize Members for their questions. And 

I will start by recognizing the Chairman of the full Committee, Mr. 

Goodlatte. 

Mr. GOODLATTE. Thank you very much, Mr. Chairman. I appreciate your recognizing me. 

And I want to thank all of our witnesses for their testimony. I 

do have some questions for them. 

First of all, again, welcome Mr. Sells. I appreciate your testimony. And I wonder if you would tell us if the terms of the Regulatory Accountability Act were enacted and enforceable by judicial 

review, do you think that agencies would promulgate more flexible 

regulations that would make it easier for you and business people 

like you to grow your businesses and create jobs? 

Mr. SELLS. Congressman, that would be a direct result of H.R. 

2122. 

We feel like common sense and the issues that you bring up 

there would be beneficial to us in moving forward and making investments, growing our businesses, and growing jobs. 

Mr. GOODLATTE. Do you think that the legislation would also 

produce more efficient and effective regulations, and promote more 

buy-in and compliance by regulated entities, which would then improve the achievement of the regulatory objectives in the first 

place? 

Mr. SELLS. Yes, sir, they would. One of the things that we believe very openly about is transparency needs to be in all of these 

aspects. 

When you give the business community opportunity to meet with 

the regulators, meet with environmental groups, and discuss what 

the issues are, and what the end result, the endgame is that you 

are trying to achieve, which is the health and well-being of society, 

the growth of our economy, and employment of American citizens, 

then you can bring all these things together. And by allowing that 

information to come forward early in the system, it would allow for 

better regulations. 

Mr. GOODLATTE. Thank you. 

Mr. Rosen, doesn’t the Regulatory Accountability Act align rulemaking incentives in the right direction by encouraging a race between agencies and stakeholders to see who can propose the lowest-cost alternatives and create the most possible benefits? 

Mr. ROSEN. That is right, Mr. Chairman. I would agree with 

that, Mr. Chairman. 

That is one of the big benefits of increasing public participation, 

is trying to find solutions that accomplish the statutory regulatory 

objectives, but do so in a way that is more efficient, more effective, 

and better for everybody. 

Mr. GOODLATTE. Thank you. 

Mr. Goldston, your central criticism of the Regulatory Accountability Act is that it hampers regulations by ‘‘overlaying a suffocating blanket of procedures on agency rulemaking.’’ But isn’t that 

the same as claiming the bill would overregulate the regulators? 

I mean, the fact of the matter is, put yourself in Mr. Sells’ shoes 

and figure out what is going on in terms of the operation of his 

business when confronted with the massive regulations that come 
101 

out at him literally every day of every business day of the year that 

they have to confront and deal with. Shouldn’t there be some greater sense brought to that regulatory process than what I would call 

overkill that is taking place right now? 

Mr. GOLDSTON. Thank you, Mr. Chairman. 

I would say the issue right now isn’t whether there are any possible reforms to the regulatory system, but whether this bill would 

actually reform the regulatory system. So I would say, in this particular case, this bill is indeed overkill. 

First of all, as Professor Levin mentioned—— 

Mr. GOODLATTE. Well, let’s go to your first comment. What are 

the regulation changes that you could support that would make 

this environment better? 

We are here to learn from you. 

Mr. GOLDSTON. Excuse me? 

Mr. GOODLATTE. We are here to learn from you. This bill could 

conceivably be improved, if you could point us in the right direction 

of how to deal with what many of us perceive to be regulatory overkill in a way that makes more sense to you. I want to hear that. 

Mr. GOLDSTON. So I would say we would start by saying that the 

approach shouldn’t be to add as many new requirements as possible, particularly requirements whose only purpose seems to be to 

drag out—— 

Mr. GOODLATTE. Are you saying instead we should make it easier 

to get regulations out the door? 

Mr. GOLDSTON. I think in some cases, with the help of both parties—— 

Mr. GOODLATTE. Let me just throw out a statistic here. In the 

past 10 years, final rules—in other words, you have completed the 

regulatory process—with the effect of law from administrative 

agencies have outnumbered laws passed by the Congress by 223 to 

1. For every one law that this Congress passes, the massive Federal bureaucracy puts out 223 regulations. 

This Congress is not shy about passing laws either. We usually 

produce 300 or so new laws each Congress. So you are talking 

60,000 new regulations each 2-year cycle. 

And we need to make it easier to produce those, so that businesses like Mr. Sells’ have to confront more than 60,000 new regulations every 2 years? 

Mr. GOLDSTON. Mr. Chairman, all those regulations are promulgated pursuant to Federal statutes enacted by the Congress. The 

agencies are not willy-nilly doing that. 

If Congress doesn’t—— 

Mr. GOODLATTE. That is why we are here today, because we 

think they have carried that ball way too far, and there needs to 

be a check on what they are doing to make sure they are more efficient and more effective and more cost-effective and more responsive to the people who have to carry these out and have to adjust 

their business models and have to cut back on employment when 

they can’t afford to meet the regulations. That is why we are here. 

Mr. GOLDSTON. Mr. Chairman, if I may, the way to handle that, 

if there are problems with the—— 
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Mr. GOODLATTE. We have to pass 60,000 new laws curtailing the 

60,000 regulations? I don’t think so. I think we have to have a 

more pragmatic way to do that. 

Mr. GOLDSTON. With all due respect, I don’t think it requires 

60,000 new laws. These are not being done each one by a different 

law. 

If, for example, there are problems with the Clean Air Act in 

your view, then you should try to pass those changes. In reality, 

those changes don’t tend to be passed through Congress because 

the public support isn’t there to amend the Clean Air Act. 

Mr. GOODLATTE. In reality, the Congress has ceded so much authority to the executive branch that it is an absolute impracticability to go through those one law by one law. 

If I might, Mr. Chairman, if I could ask one more question of Mr. 

Levin, then I will not ask for anything more here. 

Mr. Cass Sunstein, the former Obama administration OIRA administrator, and perhaps the single most prominent administrative 

law professor in the country, told the Commercial and Administrative Law Subcommittee in 2010 that the basic principles of the executive orders on rulemaking were important and should be a permanent part of the regulatory system. 

Do you disagree with him? 

Mr. LEVIN. Actually, I don’t. I support the executive orders. What 

I am concerned about is—— 

Mr. GOODLATTE. Making them a permanent part of the regulatory system, which is what this legislation is to do. 

Mr. LEVIN. With nonreviewability in the courts, as the orders 

provide, with a balanced list of factors to consider as the executive 

orders provide, but this bill would not, yes, I think those should remain. But I don’t think they should be codified. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Mr. BACHUS. Thank you. 

Mr. Cohen, the Ranking Member, is recognized for 6 or 7 minutes. 

Mr. COHEN. Thank you, sir. I probably will not take that. 

Dr. Thomas, first, I would like to ask you, was your work on German beer, medieval beer, did that relate to regulations? 

Ms. THOMAS. Yes, it did. 

Mr. COHEN. How did regulations affect German medieval beer? 

Ms. THOMAS. Well, most of the time, they regulated the space in 

which the beer could be sold, so geographically constrained it. And 

that was hindering to competition. 

Mr. COHEN. Which is generally what happens, that legislation is 

passed that restricted, the regulations to benefit somebody. 

But let me ask you, your statement was all about regressivity. 

The whole world is regressive. You understand that, don’t you? 

Ms. THOMAS. Yes. 

Mr. COHEN. And I don’t understand what you are saying, that all 

this is about high-income people’s preferences and what they desire 

to the detriment of low-income folks, because it is regressive on 

them, and high-income people have these—it is almost sounds like 

some kind of socialist-type statement that you are making. 

Should the whole world be taken down to the basic minimum 

quality? 
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Ms. THOMAS. What I am suggesting is that when regulation addresses low-probability risks, it represents the preferences of the 

wealthy. And in those cases—— 

Mr. COHEN. How do you know it represents the preferences of 

the wealthy? 

Ms. THOMAS. Well, like I said in my testimony, households will 

address the highest probability risks before they address lower 

probability risks. 

So just by the nature of things, low-income households don’t have 

the resources to address low probability. 

Mr. COHEN. Right, because they are poor, or lower income. 

Ms. THOMAS. That is right. 

Mr. COHEN. So let me ask you this, at the Mercatus group that 

you work with, Mercatus Institute, what have you all done in studies about regressivity in taxes, so that we can see to it that maybe 

people who are poor don’t have to pay more burden of taxes, which 

is what this allows them, because they don’t have that income, because it is a regressive tax system, to have those choices. 

Do you have any papers that you all have done on regressive 

taxes? 

Ms. THOMAS. I don’t actually work for the Mercatus Center. I 

work for the university. I am just under contract with the Mercatus 

Center. 

Mr. BACHUS. That is Dr. Hall. 

Mr. COHEN. Have you done any work at all on regressive taxes? 

Ms. THOMAS. No, I haven’t. 

Mr. COHEN. You haven’t. 

Ms. THOMAS. What my work shows is the regressive effects of 

regulation are to take money from the poor that they would be 

spending on high-probability risks that they could mitigate privately and reduces their income, essentially. 

Mr. COHEN. Mr. Goldston, what do you think about this premise? 

Mr. GOLDSTON. Well, a couple things. One, there are ways to address regressivity. 

But I would say that, first of all, many of the things that poor 

people would do to address the high risks, such as stopping smoking, actually don’t cost more money. My understanding of some 

psychological literature is that people don’t necessarily start by addressing the higher risks. 

But the main point is two things. One, low-income people are 

often actually the primary beneficiaries of important Federal regulations, such as the Clean Air Act, because low-income people actually often face higher rates of asthma and, therefore, regulations 

that reduce the chance of asthma attacks actually disproportionately probably benefit lower income people. 

Mr. COHEN. And they are more likely to live in the inner city 

where the pollutants are more likely to occur. 

Mr. GOLDSTON. Exactly. 

So I question some of the assumptions about regressivity. 

And it seems to me that if there are economic consequences to 

be dealt with, those should be dealt with separately after taking 

care of these broad health changes that the regulations can provide. 
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Mr. COHEN. Do you think that maybe a better way to address 

this problem of regressivity might be to pass a jobs bill and put 

people to work? 

Mr. GOLDSTON. Well, I would agree that, looking at regressivity 

solely through the lens of regulation is a particularly distorted way 

to do it, given that there are tax consequences, budget consequences, in terms of regressivity. It would probably swamp anything in regulation, which, again, often benefits low-income people, 

and where there are other ways to take care of environmental justice issues. 

Mr. COHEN. Mr. Sells, are you by chance the swimmer? 

Mr. SELLS. Yes, sir. 

Mr. COHEN. What do you think about swimming regulations, like 

regulations to say that you have to put the depth of the pool so you 

don’t dive into a pool and it was 2-feet deep and hit your head? Do 

you think that is a good regulation? 

Mr. SELLS. Yes, it is. 

Mr. COHEN. And how about regulations that put fences around, 

so kids can’t get into the swimming pools? 

Mr. SELLS. That is a very good thing. 

Mr. COHEN. Yes. And maybe the amount of chlorine that goes 

into the water, so when you are doing your butterfly or whatever 

it be, that you are safe? 

Mr. SELLS. Yes, sir. 

Mr. COHEN. So some regulations are good, and it just depends—— 

Mr. SELLS. Some regulations are good, and the ones you are 

pointing to are common sense. And that is what we are asking, as 

far as the business community is concerned, common sense and 

input from the business community, so that the impacts are appropriate for the business that we are trying to do. 

Mr. COHEN. And when you swam at U.T., you beat Alabama 

swimmers, didn’t you? 

Mr. SELLS. Yes, sir, I did. We lost on one occasion also. 

Mr. COHEN. Did you? 

I yield back the balance of my time. 

Mr. BACHUS. All right, thank you. 

Mr. Holding? 

Mr. HOLDING. Thank you, Mr. Chairman. 

Mr. Rosen, you and other witnesses have discussed the Regulatory Accountability Act and the transparency provisions there to 

put businesses on notice what regulations are coming. 

So I would like to get a little bit more specificity, so if you would 

tell us what kind of transparency reforms would be helpful to address the issue of this systemwide lack of transparency throughout 

the entire regulatory process. 

So if you could address that with some specificity rather than 

just general terms. 

Mr. ROSEN. Sure. I alluded in my written statement to the fact 

that sometimes one of the frustrating aspects of debates about regulation writ large, the regulatory process, is unavailability of some 

kinds of data. And that is because there isn’t full transparency, 

even though, on the whole, the Federal Government is actually 
105 

pretty effective at collecting and publishing data in a lot of areas. 

But in the area of regulations, we are a little short. 

So there are improvements that could be done to make the regulatory process, just in an information sense, more transparent. 

You have, by executive order, twice a year OMB publishes a regulatory agenda. But the agenda could be much more robust in 

terms of what is disclosed in the agenda as to the various rules 

that have entered the pipeline, where they stand. 

It could be more frequent. It could be more detailed in terms of 

covering more aspects. It could be broken out with greater specificity as to cost levels that are anticipated, the source of the authority, the timetables, and what stage it is at. 

It could also, after rules are done, is where the government isn’t 

so good at publishing aggregate data. And there are trade groups 

and nonprofits and others who try to collect that. But it is a difficult task to get it accurate as to what was done the prior year, 

how many rules of a different type. And there could be more transparency as to the cost-benefit studies that are done. 

I think our academic colleagues in particular could probably profit from that, because the way it works now, the Agriculture Department does a cost-benefit study for a particular rule. It is in the 

docket for that rule. If the Transportation Department does one, it 

is in the docket for that rule. 

But if you are trying to access the larger mass of how many were 

done last year and what is the quality of them, it is a fishing expedition. I mean, you have to learn a lot about how to master the various dockets and things. 

So it could be made a lot more transparent by providing, in essence, a central repository and linkage to that. 

There other kinds of information that aren’t very transparent. 

Each agency has what is called a regulatory policy officer. Those 

could be identified to the public, as an example, as to who they are, 

so if you have an issue, you can go to them. 

I could probably detail more than I have some of the specificity 

that you could get both out of the agenda and the annual—— 

Mr. HOLDING. Well, how about in respect to timing. It is a biannual requirement now. What about if we had monthly updates? 

You could post them on the Internet and keep a running monthly 

update. 

Mr. ROSEN. That would be a big improvement. 

Mr. HOLDING. Do you think it would be burdensome to do a 

monthly update? Or do you think they do them internally, anyway? 

Mr. ROSEN. Exactly. If an agency is working on rules, it has to 

know it is working on them. Its leadership has to be able to track 

them. If they are not doing it, I would be surprised, because all the 

ones I am familiar with were. 

But if they are not, it would be a good tool to make them to it. 

And so I don’t think it would be very burdensome, because it is 

being done, for the most part, already. It is just not made public, 

although some agencies do. DOT is a good example. They publish 

a monthly report. But most don’t. 

So making that a monthly update to the agenda, putting it on 

the Internet, a big improvement. 
106 

Mr. HOLDING. A final question: Do you think if the Regulatory 

Accountability Act had been in place since the late 1960’s, early 

1970’s, when our modern regulatory authorities were fully starting 

to take shape, do you think we would be where we are now with 

the regulatory cost of $1.75 trillion per annum to comply with regulations? 

Mr. ROSEN. I don’t, and the reason I say that is I think there are 

rules out there that are inefficient, ineffective, and overly costly. 

And many of those would have been caught in a better process, like 

the Regulatory Accountability Act would establish. 

Mr. HOLDING. Thank you. 

Mr. Chairman, I yield back. 

Mr. BACHUS. Thank you. 

Ms. DelBene? 

Ms. DELBENE. You are getting closer. 

Mr. BACHUS. I have been practicing. 

Ms. DELBENE. DelBene. 

Mr. BACHUS. DelBene. 

Ms. DELBENE. I was born in Alabama, too, so I appreciate it is 

hard to say. Closer. 

Thank you, Mr. Chairman, and thanks to all of you for being 

here and taking time out of your day to be with us today. I really 

appreciate it. 

Professor Levin, you talked about the additional complications 

that would come with this bill, and that it would require many 

rulemaking considerations that may not be relevant in the context 

of particular rules, and create a very labor-some process that isn’t 

necessary. 

So, given that, and that this bill kind of puts that in place, if you 

are going to set aside this legislation, and if the Subcommittee 

asked for your input on creating a more efficient regulatory system 

that provided additional safeguards for small businesses, how 

would you start? And would you make any changes to the APA? Or 

would you recommend any changes to the APA? 

Mr. LEVIN. Well, on the matter of rulemaking considerations, I 

would refer you to the passage in the ABA comments, which I 

think potentially could have bipartisan support. 

And what the section recommended was that Congress and the 

executive branch should get together to harmonize the conflicting 

mandates and impact analysis requirements and factors in a host 

of statutes, a host of orders. And agencies have trouble figuring out 

what they are supposed to do, because they are all going in different directions. If you put them into a common structure, it 

would make things clearer for agencies. 

And what the section recommended was that it should be no 

more burdensome than we have now, or if possible, less burdensome. But if you harmonize them, you would make it a more efficient structure. 

Ms. DELBENE. And when my colleagues are talking about the 

cost of the regulatory process, your testimony seems to indicate you 

think that the particular bill would make it even more costly for 

us to implement the recovery process. 

Mr. LEVIN. Oh, absolutely. And in Democratic and Republican 

administrations alike. 
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Ms. DELBENE. Thank you. 

Mr. Goldston, I guess Dr. Hall was talking about the impact on 

employment with respect to the regulatory environment. And you 

made a statement saying that you actually thought that regulations could have a positive impact on employment. I wondered if 

you would give kind of where that information comes from and 

what is your point of view compared to Dr. Hall’s. 

Mr. GOLDSTON. Sure. And what I was saying was that the literature has tended to show very little effect on employment. It 

could be slightly positive. I am going now, among other things, 

from a paper put out by the Wharton Center on Regulation, which 

definitely tries to look at both sides. And it summarizes the four 

major papers that have been done over the years looking at regulation and employment. 

And the primary one that is most cited is Morgenstern, Pizer, 

and Shih, which is from Resources for the Future, that, again, basically found, looking across several industries, no overall effect on 

employment with slightly positive effect on a few industries, particularly petrochemicals. And most of the other studies have shown 

the same kind of minimal effect across the board. 

Ms. DELBENE. So neutral is what you are saying the studies 

would show? 

Mr. GOLDSTON. That regulation doesn’t have a big effect on overall employment one way or another, and certainly isn’t responsible 

for the recession, or our inability to quickly recover from a recession. 

Ms. DELBENE. And in earlier comments, when you were talking 

about the rulemaking process with respect to implementing legislation that Congress has brought forward, do you feel like Congress 

could do a better job, in terms of how we provide legislation that 

would also—— 

Mr. GOLDSTON. Well, Congress could give more direction, obviously. I just think that these agencies are not acting by fiat. They 

are acting in response to statutes that direct them to put out regulations to protect the public. And if there are problems with those 

underlying statutes, then that is what should be addressed and debated. This kind of sweeping bill, which as Professor Levin mentioned, has super-mandates that single-handedly override statutes 

simply by the short phrase ‘‘notwithstanding any other provision of 

the law,’’ that is not the way to do it. 

I would also, if I might, say a comment or response to Mr. Holding’s questions. We also would like to see, and this in some ways 

gets at one thing Chairman Goodlatte was asking about also, we 

would love to see more transparency in the way OIRA does it work. 

That entity has become more and more powerful. It should be 

more transparent. And yet, OIRA is the one entity not required to 

be more transparent under this bill. It is able to provide guidelines 

that courts have to defer to. In the past, OIRA guidelines have 

been reviewed by the National Academy of Sciences. And the National Academy of Sciences said they should be withdrawn because 

they weren’t properly done. OIRA is just as fallible as any other entity. 

And while every other agency has to be transparent under this 

bill, the bill says OIRA, it is at the discretion of the director. So 
108 

a change that maybe we would all agree on is greater transparency 

for OIRA which this bill stands in the way of, actually. 

Ms. DELBENE. Thank you. 

Thank you, Mr. Chair. 

Mr. BACHUS. We have allowed other people to go over, so if you 

have another question? 

All right, thank you. I think the lady from Washington. 

And now our newest Member of the Committee, the gentleman 

from Missouri, Mr. Jason Smith. 

Mr. SMITH. Thank you, Mr. Chairman. 

Mr. Rosen, I think you would probably be a good one to ask, but 

back in my district, in fact, EPA has had a rule that was in effect 

for nearly 40 years that affected dairy farmers. And it required 

that they were compared under the same act as oil spills, and it 

would cost roughly some of them $10,000 a year. 

Do you believe that if this act was in place, if that rule would 

never have been on the books? 

Mr. ROSEN. If I understand the rule that you are talking about, 

I think it would have had a negative cost-benefit and that alone 

would have been a problem for it. 

Mr. SMITH. I agree. Earlier, there was also some talk about the 

rulemaking on the peanut butter situation. 

The time-consuming process allegedly demonstrated that formal 

regulatory hearings for proposed rules would be impractical. Are 

you familiar with the peanut butter example? 

Mr. ROSEN. Yes. And it is one of the great myths that is thrown 

up as criticism of allowing hearings in rulemaking. 

So I am glad you raised that, because the famous FDA peanut 

butter rulemaking that took 10 years, the part of it that involved 

a hearing was 30 days. And they did not even have the hearing 

until 5 years into the rulemaking, actually 6, over 6 years in. And 

then after they had the hearing, they delayed some more. 

And so the problem of delay exists in all rulemaking. It has nothing to do with whether there are hearings or formal rulemaking or 

hybrid rulemaking. The peanut butter rulemaking actually stands 

for a different proposition, which is that agencies are often inefficient and slow. I can cite chapter and verse of notice and comment 

rulemakings that took 7, 10, 12 years. 

When I got to the Department of Transportation in 2003, there 

were a half-dozen rules that were pending more than a dozen 

years, and none of them had hearings. 

So it is a big myth and a distraction. There have been formal 

rulemakings conducted on the record that were done in roughly a 

year or just over a year, which is extremely fast for rulemaking. 

The Agriculture Department during the Bush years did one on 

milk marketing orders. The Commerce Department did one extremely fast under the Marine Mammal Protection Act, involving 

I think they were beluga whales. 

So these anecdotes that are used to criticize the bill, they just 

don’t hold up. And when you have $1 billion at stake, the whole 

idea that you could make a law with no hearing, no notice, nothing, 

involving $1 billion and 30 days’ notice, that is not what was intended when the APA was promulgated. 
109 

And so we are talking about a small subset to deal with factual 

issues where the premise, if it is mistaken, will produce a $1 billion 

error. It is not very much to ask that if someone has evidence that 

$1 billion error is about to be made, they get a chance to tell the 

agency so. That is not a big thing to ask. 

Mr. SMITH. Thank you. 

Professor, earlier, I believe that I wrote this down right, you said 

that if the Regulatory Accountability Act passed, that this would 

be more costly on the agencies. Is that correct? 

Mr. LEVIN. Yes. 

Mr. SMITH. So, would it be least costly on the small businesses 

if this were in place? 

Mr. LEVIN. Would it lower costs on small businesses? 

Mr. SMITH. With less regulations. 

Mr. LEVIN. It would not directly affect them, but it would mean 

that either Republican or Democratic administrations could not get 

done what they need to do. A Republican administration or any Administration that wants to deregulate small business would have 

many more hoops to jump through also. 

So I think what you are doing is stymieing the administrative 

process for good or for ill, in whatever direction. You should make 

the judgment of what your policies are going to be on substantive 

grounds, but not mess up the process of decision. 

Mr. SMITH. So it would cost agencies more money and the small 

businesses not as much? 

Mr. LEVIN. No, I was not testifying to that. I am saying that it 

would cost the agencies more money and, therefore, reduce their efficiency. And who knows what the effect would be on affected entities, because the effect of the bill would simply slow things down 

no matter what direction a conservative or liberal Administration 

wants to go. 

Mr. SMITH. It would take longer for more regulations to be put 

on small businesses and family farmers, correct? 

Mr. LEVIN. Yes, as well as regulations that would relieve their 

burdens. 

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

Mr. BACHUS. Thank you. 

There is some discussion, Mr. Goldston, you were talking about 

discussion of impact on the poor and my take was you were discounting Dr. Thomas’ comments, what she described, inhalers, 

bronchial dilators. 

And I think she in her testimony, whether she said this or not, 

but I do know, because there have been several articles that the 

new regulations, the effect of their discharge on the ozone. But it 

did quadruple the cost of most of those dilators. 

Is that your understanding, that it tripled or quadrupled the 

cost? 

Mr. GOLDSTON. Mr. Chairman, I would like to get back to you on 

that on the record, because we do have an expert who actually has 

written extensively on this issue. 

My understanding, which I will double check, is that, first of all, 

most people have moved away from the ozone-based inhalers that 

the companies had many years to prepare, and then the concern is 
110 

obviously not just the use of the inhaler themselves, but the production, because it keeps CFCs in production and so forth. 

But let me get back to you with a more extensive answer, because we do already have material on that that I am not fully familiar with. 

Mr. BACHUS. I am aware that oral medications, there have been 

some substitutes—— 

Mr. GOLDSTON. As I understand it, they are more effective. 

Mr. BACHUS. Or immunization. We have long-term, I guess you 

would say, a series of immunization. 

But still, in several diseases, even degenerative diseases, particularly. And the cost has gone up. 

And I do know that the agency did not consider that, that they 

at least said that was not part of their consideration. Do you think 

they should have considered that fact? 

Mr. GOLDSTON. Again, I would have to look at what was actually 

done. Again, the industry was given a particularly long period of 

time in which to phase these out. So in that sense, the agency did 

take into account. It did not say tomorrow these kinds of inhalers 

are not available. 

Mr. BACHUS. They are still dispensed in the hundreds of thousands every month, I think, and the cost has gone up. I mean, it 

has to drive up the cost. 

Would you say the cost to those who need that medication, and 

most of them critically, can be the difference between being able to 

actually breathe or not? Do you think that ought to be considered? 

Mr. GOLDSTON. I think the cost to consumers ought to be considered. I think it is. 

But again, I would like to get back on the specific—my understanding is that actually a more effective medication was developed 

over that period for reasons beyond just the CFC concerns. 

Mr. BACHUS. Okay. 

Mr. GOLDSTON. On the larger issue, though, again, I think there 

are other ways to deal with regressivity and looking at regressivity 

just in terms of what is reduced by regulations—— 

Mr. BACHUS. Sure. I know you talked about smoking. And smoking obviously can result in and I guess aggregate emphysema and 

aggravate asthma. But people are usually born with asthma. They 

either have it or they don’t. 

Mr. GOLDSTON. Rates have been going up for reasons that are 

not completely understood. We do know what causes more asthma 

attacks, which includes dirty air. 

Mr. BACHUS. Okay. And obviously, the pollution is aggravating 

source. 

I know you are, Mr. Sells, in the concrete business. I was 

amazed, and again, anyone of you want to comment, when I had 

the EPA in my office and they were proposing some changes in arsenic levels and precipitants in the air that were indeed something 

we don’t want in our air. 

There was a chart that showed that the occureence of arsenic 

and some of those matters was heaviest on the West Coast and 

along the Gulf of Mexico, along the Texas border, the Mexico-Texas 

border, tremendous concentrations there, and along the Gulf Coast. 
111 

When I asked in a hearing, what is the source of this matter or 

material, it was Mexico and China. And yet, the regulation was directed at cement plants all over the country, including those in the 

East, where there is almost no arsenic in the air, even around the 

cement plants in my district, which is having to spend millions of 

dollars. 

And I asked, well, what about China and Mexico? They said they 

couldn’t consider it. They don’t have any control over China and 

Mexico. 

But they also, in that report, said that they would eliminate as 

much as a third of the production in the United States, but that 

it could be easily be replaced from Mexico. 

And that is the type of thing that I think frustrates us. 

Mr. GOLDSTON. Mr. Chairman, again, I will get back to you in 

greater deal in detail for the record. But my understanding is, first 

of all, that the regulations concerning arsenic are maximum achievable control technologies, so that is not concerned with the overall 

amount in the air, but actually what can be affordably achieved at 

a given—— 

Mr. BACHUS. No. Absolutely, let me say this, it absolutely can be 

achieved. But the cost was so prohibitive that even the EPA said 

it would shut a third of our production down. I mean, that was a 

part of their finding. 

Mr. GOLDSTON. But my understanding, again, on these rules is 

actually the EPA concluded that there were not likely to be any 

plant closures from the rule, that there were some—and that, indeed, the rules have since been weakened to the point which, as 

Mr. Sells mentioned, some in the environmental community are actually suing, arguing that EPA weakened the rule—— 

Mr. BACHUS. They are. You are absolutely right. And I can tell 

you well aware. 

But they were weakened as a result of people raising hell and 

saying, this is going to cost—we are going to lose jobs. 

Mr. GOLDSTON. But if the argument is that the current system 

doesn’t allow for any information to be given to an agency, doesn’t 

allow for give-and-take, then whatever the pros and cons of the 

specific cement rule, it certainly shows a lot of process where there 

are already abilities for the company to have recourse. 

Mr. BACHUS. Actually, the agency, it was only a tremendous outcry by people that said you didn’t consider this. They said they 

couldn’t. Only because, I think both President Bush and President 

Obama people said we can’t do that. 

Mr. Sells? 

Mr. SELLS. If I may, Mr. Chairman, mercury is the big issue. 

And to your point, EPA’s own data indicates that 85 percent of the 

mercury deposition in the United States comes from offshore 

sources. 

For the cement industry, we have, currently, about 105 cement 

plants in this country. And over the next 3 or 4 years, with the implementation of the latest NESHAP, approximately 12 to 15 of 

those facilities will close in this country. 

Now, when we were at our peak, our demand for cement in this 

country and construction at that time was 130 million tons. We 

only have capacity in this country for 105 million tons. 
112 

So in the same period of time, the last decade, where we have 

permitted three cement plants, which basically replaced most of the 

capacity in this country, the Chinese have gone from 1 billion tons, 

metric tons, of cement to 1.8 billion tons of cement. 

So there is tremendous increase in what they have done. I always use the analogy that we have the Olympics in Atlanta and 

the sky was blue, and we didn’t close any industries. When we 

went to China and Beijing, they closed industry within 100 miles, 

limited traffic, and they still couldn’t get the skies clean. 

Mr. BACHUS. I will tell you, Mr. Goldston, the Lehigh Cement 

Plant in Leeds, Alabama, they would have to spend, to comply with 

the regulations, some of which have been withdrawn on mercury 

and arsenic—— 

Mr. GOLDSTON. They really haven’t been withdrawn, sir. They 

have been delayed. 

Mr. BACHUS. Been delayed. 

It would have cost them—they have made no profits in 4 years. 

I mean, they have lost money in 4 years. So it was not that they 

would have to take all their profit. They would have to take all 

their revenues for 3 years, which was an impossible task. 

It is those types of things, when they tell us they can’t consider 

that it will be replaced, it will come from Mexico and China—— 

Mr. GOLDSTON. Mr. Chairman, obviously, I can’t speak to the 

specific plant that you are referring to. But for the industry as a 

whole, the industry is highly profitable. 

That doesn’t mean that costs ought not to be considered as allowed under the law, but I am not sure what the moral is of Mr. 

Sells’ story. 

It is true that China has horrible pollution because it doesn’t regulate plants. Presumably, the answer to that isn’t to create the 

same situation here. 

Mr. BACHUS. Well, the moral is, is that we are going to shut 

down American jobs, American companies. It will be produced in 

Mexico and China. And it will increase mercury in our air in the 

United States. 

Mr. GOLDSTON. Well, presumably the huge increase in Chinese 

cement plants is due to the extraordinary construction boom in 

China, not the—— 

Mr. BACHUS. Well, they are increasing their imports to us and 

Mexico. I mean, we are getting more for Mexico. 

In fact, in Mexico, they made so much money, the Mexican cement plant, they started buying our cement companies with the 

profits they are making because they don’t have the environmental—— 

Mr. GOLDSTON. Then they apparently didn’t feel that it was too 

much of a burden to comply with American regulations when they 

were buying those plants. 

Mr. BACHUS. Well, they are making so much money by not complying in Mexico. 

But I am just saying it ought to be considered. 

We did look at the chart, Mr. Levin. And what we are talking 

about here our jobs. And we couldn’t find anywhere on the chart 

where it says that the agencies are required to assess job loss or 

job impacts. 
113 

Do you know where that is on the chart? Are you aware where 

they have to assess adverse job impact? 

Mr. LEVIN. Well, as I mentioned, it’s Public Citizens’ chart, not 

mine. But I think you are correct, that there is no positive law requirement that they do that. 

Mr. BACHUS. Yes, do you agree there should be? 

Mr. LEVIN. I don’t think it should be part of the law for every 

rule in every agency, because I do favor impact requirements with 

regard to major rules. But this would apply to every regulation 

that—— 

Mr. BACHUS. Well, what about—I mean it may not be every job 

in an every industry, but that is somebody’s job. 

Mr. LEVIN. What about rules—— 

Mr. BACHUS. For somebody, that is 100 percent of their pay. 

Mr. LEVIN. What about rules on Medicare, rules on Indian tribes, 

rules on homeland security? 

Mr. BACHUS. Again, I think job impacts ought to be considered 

along with anything else. 

What do Republicans and Democrats agree on? Jobs, jobs, jobs. 

The President has used that term. John Boehner has used that 

term. Bob Goodlatte has used that term. Jobs, jobs, jobs. 

That is what our economy needs. If we have more jobs, we will 

have better health. We will have better crime rates. We will lower 

that. It will make a safer country. 

Mr. LEVIN. Mr. Chairman, I agree with that sentiment, and 

agree with that issue as one that is before the country. But I believe this isn’t legislation that is well tailored to address that. 

Mr. BACHUS. I see. Okay. 

Let me say this, as the Chairman said, we would like to work 

with the American Bar Association and other groups, because some 

of these executive orders, we appreciate your willingness to work 

with us. 

Mr. LEVIN. I just want to clarify again, I am not a spokesman 

today for the—— 

Mr. BACHUS. I understand that, but you are an expert on administrative law. You have written a leading casebook. 

Mr. LEVIN. I would like it to be leading, yes. 

Mr. BACHUS. It is a very good casebook. Thank you. 

Mr. COHEN. Mr. Chairman, can I ask a question? 

Mr. BACHUS. Mr. Cohen, you said you did not want to—no, you 

can ask as many questions as you want. 

Mr. COHEN. You brought up a good point. 

What if we just took this bill and made it into a bill that said 

that when you have these regulations, that they have to talk about 

jobs, and just synthesize it down to that. We might be able to pass 

it. 

What about that? 

And I think it is interesting that you mentioned that one job, 

that is one person’s job, and I agree with you. But at the same 

time, Dr. Thomas’ paper writes about how few lives would be 

saved, because of these rearview mirrors or rearview cameras in 

cars. And that life is somebody’s life. 
114 

Mr. BACHUS. And I said esoterically one job. It is probably not 

one job. It is probably going to be thousands of jobs on every regulation. 

Mr. COHEN. Right. But it is a balancing point. 

Mr. BACHUS. But it is sort of like, if you are that 1 percent, it 

is 100 percent to you. 

Mr. COHEN. Exactly. The same thing with your life. 

Mr. GOLDSTON. Mr. Cohen, the other factor obviously is how good 

or bad the economic analysis is at this point in terms of being able 

to actually estimate jobs, even with cost, which is somewhat easier. 

Again, one RFF study showed that, in the vast majority of cases, 

initial cost estimates overestimate what the cost will be. 

So I think I agree that the concerns with this bill is not that it 

mentions the word job, as Professor Levin mentioned. We are all 

concerned about jobs, but the fact that it turns it into a kind of requirement, and then adds all these other layers to that. We also 

need to be realistic about how good this estimating is before we 

place overreliance on it. 

Mr. BACHUS. All right, Mr. Collins—— 

Mr. COHEN. I think Professor Levin, a student of Charles 

Burson’s, I think, has a comment. 

Mr. LEVIN. Yes, I am. A great Tennessean. 

Mr. COHEN. A great Tennessean. And no controlling legal authority. All right. 

Mr. LEVIN. I just wanted to follow up briefly on that discussion. 

In the given rule, if somebody thinks that there will be an adverse affect on jobs, they can submit a comment to that effect to 

the agency, and the agency is required by the caselaw to respond. 

So that is taken care of. 

You also have rules where it is entirely speculative, what the effect on jobs will be, because it isn’t economic regulation at all. And 

yet this bill would require them, and everybody else in the government that is promulgating a rule, to address this issue that may 

have very little relevance, and about which there is very little information. But they have to go out and research the information 

before they adopt the rule. 

And I think that is wasteful because the system itself is self-correcting, where there is a controversy about jobs, it can be brought 

forward in the regular process. 

Mr. BACHUS. I can tell you that with breathalyzers and with the 

cement industry, their way of addressing it was delaying it. But 

even during the delay, companies are having to make economic decisions on whether they want to modernize a plant or shut it down 

and locate that production overseas, or use a source overseas. And 

even a delay costs jobs. 

Or in the case of the breathalyzers, people are paying more 

money every day. And most of them, if they are not poor, they are 

not healthy, and that is going to lead, as we all know, to at least 

a financial problem. 

Mr. Collins? 

Mr. Collins, the gentleman from Georgia, is recognized for 5 minutes. 

Mr. COLLINS. Thank you, Mr. Chairman. 

Mr. BACHUS. Or six or 8 minutes. 
115 

Mr. COLLINS. I think one of the things that we have here, and 

I appreciate the Chairman, yielding, I think we just have a differing opinion of what regulations and how they affect on what 

they go by. 

To me, regulations look about like you all sitting at that table, 

overcrowded and not sure which person is doing which, and which 

papers are whose, and that translates out to business, who has 

problems figuring out where they are in this process. 

And the other thing I think, Mr. Goldston, you had said something just a second ago that struck me. And I think one of the 

things is that we are all concerned about jobs. And I will agree 

with you. Probably the first time you and I are going to agree on 

something today, but we will agree on this concern about jobs. 

However, I think the concern that I think your job is, is more 

jobs in government. My concern is more jobs in private enterprise 

for enforcing regulations. 

So I have a few questions for you, and I will follow up on Chairman Goodlatte’s line of questioning. 

Do you think the current body of regulation is sufficient, or do 

you truly believe that there needs to be new or even more regulations put forth by agencies? 

Mr. GOLDSTON. First let me say, I was talking about private sector jobs. 

Mr. COLLINS. The only thing that is growing much right now is 

government jobs in this area. 

Mr. GOLDSTON. I am not sure that is accurate. 

So in terms of your question, I think there are areas that need 

greater regulation. Not every area, but absolutely. 

Mr. COLLINS. Can you give me an example of an unregulated industry right now? 

Mr. GOLDSTON. I think food safety. I think—— 

Mr. COLLINS. That is unregulated? 

Mr. GOLDSTON. Climate and the financial sector. I think those 

are all areas that actually do need further regulation. 

Mr. COLLINS. So then I will follow up to that question. I apologize for interrupting. Those are where you think there needs to be 

new regulations. 

Is there an unregulated industry that is dying to be regulated, 

in your opinion? 

Mr. GOLDSTON. I don’t know that there is an entire industry that 

is unregulated that is looking for regulation. 

Mr. COLLINS. Is there another area you believe that needs to be 

regulated? 

Mr. GOLDSTON. I am sorry, I—— 

Mr. COLLINS. Is there another area that needs to be regulated 

that is not being regulated right now? 

Mr. GOLDSTON. I am not—how is that different from the question 

you asked me earlier? 

Mr. COLLINS. You said I want to see if there are even more. I’m 

saying you’re saying there needs to be more regulations. I am asking is there another industry that isn’t being regulated right now 

that you think needs to be. 

Mr. GOLDSTON. Off the top my head, I can’t think of an entire 

industry that is unregulated now. 
116 

Mr. COLLINS. Okay. And I appreciate that. Thank you. 

Do you believe that every regulation of the book serves the best 

interest of American families and small businesses? 

Mr. GOLDSTON. I would not take a position on every regulation 

on the books, given the numbers Chairman Goodlatte cited. I would 

say that the regulatory system as a whole has repeatedly been 

shown by both Republican and Democratic administrations to have 

benefits that outweigh the costs significantly. 

Mr. COLLINS. Okay. And again, like you said, we are going to disagree on a lot of this. 

Do you believe it should be easier for basically agencies and 

unelected officials in these agencies to put forth regulations that financially impact small businesses? 

Mr. GOLDSTON. I think there are some barriers to regulations, 

that there are a set of conditions under Regulate Paperwork Act, 

and so forth, that sometimes unnecessarily slow the process. That 

doesn’t mean that there shouldn’t be analysis of the regulations 

and that there shouldn’t be transparency. 

So again, not suggesting that the system is perfect, but there are 

cases where important regulations get held up for many years. 

Mr. COLLINS. I have one final, and Mr. Rosen, I am coming to 

you, so that we are all effective here. 

The question that I am seeing, especially in my area, and we are 

dealing with water runoff, storm runoff. We dealt with this a lot. 

We are getting to the point where many of the regulations are getting to the point where they are just unable to actually test for the 

levels that are prescribed. 

At what point in time do you really just like, especially like 

phosphates and other things we are testing—and I used to work in 

this industry with stack monitoring and other things—that you 

really get to the point where you cannot with certainty actually 

test to the levels that are now being prescribed. Is there just at a 

certain point in time, you just say this is as good as we get? 

Mr. GOLDSTON. Sure, there is a question all the time about how 

clean is clean. In the case, again, of phosphates and things like 

that, there are actual provable problems with water quality that 

result from water pollution runoff and so forth. 

Again, the issue, though, is does this bill actually in a targeted 

way take care of the kinds of concerns you are talking about. Or, 

and this is sort of implicit in Mr. Smith’s question, does it just slow 

down the system so, yes, fewer things will get out just because the 

system now will be so clogged up with process that isn’t necessarily 

targeted to any of the problems that you were just referencing. 

Mr. COLLINS. All right, thank you. 

Mr. Rosen, if Regulatory Accountability Act had been in place in 

the late since the late 1960’s, early 1970’s, when our modern regulatory authorities began to take shape, do you think the cost to 

Federal regulation would be anywhere near the current estimate of 

$1.75 billion to $1.8 trillion? 

Mr. ROSEN. I think it would be less than it is today. 

Mr. COLLINS. Okay, explain how it would be less. 

Mr. ROSEN. That the Regulatory Accountability Act creates 

mechanisms to ensure better factual accuracy of information that 

is being used in rulemaking, and better analytic evaluation of both 
117 

costs and benefits. Therefore, it would have screened out some bad 

rules that are on the books. 

Mr. COLLINS. And I want to finish up, Mr. Chairman, and I will 

yield back, there are probably common ground even with Mr. 

Goldston and Mr. Levin, that we can find in this. I think the problem that we are getting into is the real concern that, and I heard 

it even in this Committee room on this Committee, saying, well, it 

doesn’t have adverse effects on jobs. Well, I invite you, and I will 

pay your ticket to come down to the Ninth District, and I will take 

you to businesses that it does affect, that it is real world. 

It isn’t in the Beltway. The Beltway isn’t real world. This is 

fantasyland. Go back out into the real world where people actually 

produce and do these things. This is where my concern is. 

And Mr. Cohen and I can actually agree on something, that I 

agree, finding ways to actually put this in cost and fiscally responsible ways to do this. 

When we look at that, then we regain the trust of American business in looking at the process of government. They don’t look at it 

as intrusive. 

These are the things that I appreciate this bill coming up, I appreciate that Chairman bringing forward, and our Chairman of the 

main Committee, Mr. Goodlatte, his input in this, and Chairman 

Bachus as well, and the Ranking Member. 

We have to continue to look at this, because I believe it does 

matter. I believe this is what people are talking about around the 

kitchen tables, about their jobs. I believe this isn’t the only, but it 

is one impact that is causing our economy to be in trouble right 

now, among all issues. 

And I appreciate your answers, and I appreciate your being here 

today. 

Mr. Chairman, I yield back. 

Mr. BACHUS. Thank you. 

Mr. ROSEN. Mr. Chairman, I was just going to observe 

Mr. BACHUS. Yes, Mr. Rosen? 

In fact, if we don’t mind, we can give each panelist a minute just 

to make comments. 

Would you object to that? 

Mr. COHEN. A minute and 15. 

Mr. BACHUS. A minute and 15, you know, minute, minute and 

a half. 

But, Mr. Rosen, you can respond. 

Mr. ROSEN. Yes, the comment that I was just trying to emphasize is, sometimes people think that this only about business. It is 

certainly business matters and is a key underpinning of our economy. 

But regulation affects, as I said at the outset, it affects municipalities, it affects hospitals, universities, farmers, airports, all 

kinds of entities, some of which do employ people. Most of those do 

employ people. 

It involves individuals subject to regulations. 

So I reject the suggestion that I sometimes hear that this bill is 

about delay. I don’t think this bill needs to produce any delay relative to the current system. Most of the delay that occurs in the 

regulatory process occurs for two reasons, working out policies 
118 

within an agency, and absence of good information and the need to 

either do some testing or gather some data or statistics or whatever. The part that involves complying with the analytic requirements and with the process through OIRA and the notice and comment, that is the tail on the dog. 

And so the real thing is to get these rules right, and it’s not just 

to create delay for business. That is nonsense. It is to get the rules 

right for everybody, for the businesses for sure. But as I say, the 

airports, the municipalities, the hospitals, the universities, and the 

individuals that are the American public. 

Mr. BACHUS. Thank you. 

And we will start with Mr. Sells, whom Mr. Cohen tells me was 

an All-American swimmer at the University of Tennessee. 

Mr. SELLS. Yes, that was a few decades ago. And, believe me, a 

few pounds. 

Thank you, Mr. Chairman, Mr. Cohen. Thank you for the opportunity to be here today. 

I think it is extremely important, and I made this comment, and 

Mr. Rosen backed this up, we are looking for common sense and 

common-sense approaches here. We believe in this country, as the 

cement industry, that we actually have the cleanest cement plants 

literally in the world. 

But we have to compete with those who don’t comply in that 

arena, don’t comply. And if our jobs are shipped overseas, they are 

lost forever. And it isn’t just the cement industry. It is the steel industry. It is the lumber industry. 

Those are the things that made our country great, agriculture, 

mining, manufacturing, industry. And we believe there is appropriate regulations, common sense, that can work. 

As an example, one of the things that was mentioned, really, 

EPA has not weakened what they are asking our industry to do. 

There has been a slight delay, but it is because a lot of these things 

we are asking for were technically not achievable. And so the systems and the things that were asked for not even being used worldwide, hadn’t even come out of the lab. 

So thank you for the time, for the opportunity. And once again, 

thank you for your service in the United States Congress. 

Mr. BACHUS. Thank you. 

Let me comment on the one thing. The standards that we are 

talking about, you look at the EU. Our standards that they are proposing are much tighter than the European Union. 

And that obviously calls into question—it ought to send a red 

flag up. 

Mr. ROSEN. I think I had my turn, so I will let others speak here. 

Mr. BACHUS. Let me just comment, I sued the railroads. I had 

a different attitude toward them, when I then started representing 

them. But you saw a different side. 

But I can remember when the Department of Transportation 

FRA director was testifying before us about the whistle rule. And 

he was explaining why they needed it, and my first response was, 

I said, well, you have been in a cabin, the cab of a diesel engine. 

I was going to kind of walk him through what goes on. And his response was, no, he never had. 
119 

But he was testifying about what the engineer and the conductor 

in the cab would do and what they saw. But here was the person 

who had never been in a cab. 

And I was just stunned that that was actually, that he was—and 

I asked him did his agency if they had done that, and he was not 

aware that anyone had. And that to me—I mean, it is partly a 

blind spot. I mean, the engineer and the conductor in that cab can 

tell you more about that rule, and the effect of it, than anybody 

else. 

Mr. Hall? 

Mr. HALL. Sure. Let me say, I had a career of conducting economic impact studies, and I know a lot about labor markets. 

Of course, regulatory agencies could conduct analysis of the employment impact of regulatory changes. And the evidence is very 

strong, in fact, there is unemployment created by repertory 

changes. The literature that people cite show this, as a matter fact. 

There is a great deal of misunderstanding of what that literature 

says, especially by noneconomists. 

For example, the Morgenstern, Pizer, and Shih article, the economic impact on industry regulation on the labor market is not 

rocket science. Regulation can raise the cost in an industry. That 

is what Morgenstern, Pizer, and Shih found. It raised the cost on 

an industry. The industry has to spend more money to make the 

output. 

Part of that cost is they have to hire extra people in compliance 

jobs. When the costs go up, prices go up, people buy less of the 

product. When people buy less of the product, they produce less 

and people in production jobs lose their jobs. 

Morgenstern, Pizer, and Shih found that tens of thousands of 

people lost jobs, production jobs in the industries they looked at. 

What they also found was that the number of extra people hired 

to reduce productivity in compliance roughly was sometimes as 

much as the production jobs that were lost. Because the two net 

out doesn’t mean production jobs are not lost. Those people lost 

their jobs. They are unemployed. They had to pay a huge amount 

personally from the unemployment to find new work, find less important work. 

In addition, this work and other work only focus on the regulated 

industry. One of the most important impacts of regulatory change 

is outside the industry. When you raise prices, you raise prices for 

other industries that consume your product. It works like a tax. It 

is regressive like a tax, by the way. 

When you raise prices, it creates higher prices than other industries. That has an employment effect, and people lose their jobs in 

those other industries. 

For example, I looked at a 2011 study by the EPA on a regulation that was going to raise the price of electricity they estimated 

by 4 percent. By their own research, they found that 19 other industries would have reduced output because of the higher energy 

prices. 

I carried their research one step further and for every job that 

would be lost in electrical generation industry, 11 jobs will be lost 

outside the regulated industry because of higher prices. 
120 

None of that was taken into account in the Morgenstern, Pizer, 

and Shih. But they did in fact find tens of thousands of people lost 

their jobs in that research. And this other research shows the same 

thing. 

Mr. BACHUS. Thank you. 

Dr. Thomas? 

Ms. THOMAS. There are unintended consequences of regulation 

that go beyond the employment effects that have been discussed 

here today. There are real effects on low-income households. And 

the fact that there are other kinds of regressive effects, as Mr. 

Goldston points out, just reemphasizes the need for agencies to actually look at the effects of regulations on low-income households 

in all of their decisionmaking processes. 

The consequences of many rules that apply to all of us that address specifically low risks or low-probability risks are harmful to 

the weakest members of our society, and we should all be concerned with those or about those. 

We need to focus on the outcome of regulation, not just on intentions. Agencies should consider their regressive effects. 

Mr. BACHUS. Mr. Goldston? 

Mr. GOLDSTON. Thank you, Mr. Chairman. 

And thank you for taking my testimony, despite coming from a 

Northeastern school. 

I did go to Huntsville, Alabama, a couple times when I was overseeing NASA. 

Mr. BACHUS. Well, Cornell is a very good school. 

Mr. GOLDSTON. A couple things. Let me start with some general 

points. Let me start actually, as Dr. Hall rightly, of course, said, 

these studies don’t find that there are no job losses. They are looking at macro losses across the industry. And again, as you said, at 

the polluting industries. 

I think, if I remember correctly, the Morgenstern study, part of 

the rationale is not just additional hiring because of regulation, but 

that regulatory costs actually are very small percentage, especially 

manufacturing often, of overall costs to the industry. 

The main point I would like to make a closing is that even if one 

shares your view, and the views expressed by others here in terms 

of skepticism about regulation, I think there is still reason to have 

deep concerns about this bill, because, again, it overrides other 

laws. It doesn’t treat OIRA the way it treats other entities. It creates additional burdens that when they are imposed on everybody, 

on all agencies at once, such as the way the least-cost rule actually 

works, and the regulatory hearings, is not a targeted approach to 

take care of the kind of problems that have been mentioned here, 

but rather are a way to just kind of gum up the works. And they 

are ways that, when they have been tried in the past, have been 

shown only to have that effect. 

So I don’t think the issue here is whether there is anything that 

can be changed with the regulatory system, but whether this bill 

would make the system better or worse for the public at large. And 

our view is that, overall, this bill, regardless of what you think 

about the overall state of the regulatory system, would be damaging to the public at large because of the way in which it is not 

targeted and overreaches. 
121 

And I guess I would just add that, in my years on the Republican 

staff of the House, we were often confronted with this, where efforts to reform basically overreached and instead of actually trying 

to come up with targeted solutions, basically tried to shut down the 

system. And that actually put us in a position often where we just 

had to say no, rather than actually having a discussion of reform, 

because there was so much overreaching in the approach that was 

taken. 

And I think with this bill, even more with the REINS Act, that 

is the case here, that it is not a targeted solution, even if one accepts everything that has been claimed about the failings of the 

regulatory system. 

Thank you. 

Mr. BACHUS. Professor Levin? 

Mr. LEVIN. My sentiments are similar to those of Mr. Goldston, 

so I will just try to be brief. 

We have heard a lot today about regulatory policy disputes, and 

I see those largely as questions to be worked out in the political 

sphere. 

But I think that this act is not the right vehicle for having that 

debate. I think it is a misdirected approach to complicate the legislative process. 

Mr. Rosen has made the case to you that there is no real threat 

of delay here. But I think the concerns about delay are very widespread in the administrative law community. I think he has a minority view, but the American Bar Association and the Administrative Conference have passed resolutions stating their view that the 

rulemaking process is already too complicated. 

Scholars have looked at the Regulatory Accountability Act, and 

scores of them have signed letters of opposition. I know of none 

whatever in the legal-academic sphere who have endorsed the bill. 

I was here a few months ago, testifying about the REINS Act, 

and there is a scholarly dispute about it. There is really argument 

on both sides among the academic community on that point. 

But I think this bill has brought together scholars with regard 

to the Regulatory Accountability Act, because I have talked about 

it in various forums and can’t find any other legal academic who 

endorses the bill. 

So I think that the issue of jobs has been before you today. I 

think it is important for Congress to keep its eye on the ball in that 

regard. But I think this law is not the right vehicle for that. 

And I think you should redirect your attention to matters that 

would speak more directly to the actual issue involved that would 

avoid crippling side effects and that have a good chance of passage. 

I don’t think this bill meets any of those criteria. 

I do thank you for the opportunity to testify, and I hope you will 

find it useful. 

Thank you. 

Mr. BACHUS. I thank you. 

And this will conclude our hearing. 

But before I do, at this time, customarily, we introduce, for the 

record, different letters of either support or opposition. And of those 

letters, I would like unanimous consent to introduce several letters. 
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Actually, Mr. Levin, one of these letters is the June 6, 2011, letter to the Judiciary Committee in support of this legislation, and 

I was looking at over three pages of people that signed this letter, 

associations, and you are correct in that I don’t see the Bar Association on this list or any legal society listed in over three pages. 

But what I do find is almost every other association that employs 

people in the United States is on this list. I mean, if you name one, 

it is on here. Medical, dental, repair shops, aeronautical, architects, 

bakers, boatbuilders, coatings, composites, concrete, engineering industry, feed industry, forest industry, foundry industry, you can 

just go on and on. 

I don’t know of one that is not on this list. 

So there is a divide between—— 

Mr. GOLDSTON. Mr. Chairman, if I could just say, that is not particularly surprising. I think everybody pro and con agrees that this 

bill would hold up regulation. 

And industry understandably would prefer to be unregulated. 

Our argument is that—— 

Mr. BACHUS. They all are regulated. 

Mr. GOLDSTON [continuing]. Good and bad. Less regulated. 

Mr. BACHUS. Yes, they are pretty heavily regulated. 

Mr. GOLDSTON. Fair point. Less regulated. 

Mr. BACHUS. It closes with the window industry. Windows are 

pretty important. 

But anyway, I would like to introduce this, along with several 

other, credit unions, and several others. I would like to thank the 

NFIB for their statement and the Chamber of Commerce representing small business and other business. 

So, without objection, I would like to introduce these in the 

record. 

Mr. COHEN. I won’t object if you will give me extra time to round 

up the usual suspects and put in letters against. 

Mr. BACHUS. Sure You might actually want to read this list. 

Even the flower industry. Flowers and flour. 

Mr. COHEN. No objection. 

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Mr. BACHUS. This concludes today’s hearing. 

Thanks to all of our witnesses for attending, and this is a strikingly good panel. All Members I think have brought some tremendous points before us, and I thought it was well-balanced. 

Without objection, all Members will have 5 legislative days to 

submit additional written questions to the witnesses or additional 

materials for the record. 

This hearing is adjourned. 

[Whereupon, at 12:12 p.m., the Subcommittee was adjourned.] 

(149) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Steve Cohen, a Representative in 

Congress from the State of Tennessee, and Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law 

As Judiciary Committee Chairman Bob Goodlatte rightly pointed out just a few 

weeks ago during our markup of the FARRM Act, the Administrative Procedure Act 

is an ‘‘administrative Constitution’’ that attempts to strike a balance between the 

need for due process and fairness, on the one hand, and the need for agencies to 

be able effectively to carry out their policymaking responsibilities, on the other. 

As with the Constitution itself, we must approach proposals that would make dramatic changes to the APA with caution, if not some considerable skepticism. 

The proponents of H.R. 2122, the ‘‘Regulatory Accountability Act of 2013,’’ have 

a high burden to meet in that regard. 

Based on what I heard last Congress in our consideration of an almost identical 

bill and in the many regulatory debates we have held since then, the bill’s proponents have not met that burden. 

As an initial matter, whatever the merits of any of the individual proposals contained in H.R. 2122, I am concerned that the cumulative weight of all of the bill’s 

changes to the APA would simply serve to stifle agency rulemaking, threatening to 

hamper the promulgation of important public health and safety rules. 

As I said at last week’s hearing on another bill, regulations are critical to protecting the American people from a vast array of harms, including dirty air and 

water, dangerous toys, reckless financial behavior, and unsafe workplaces. 

This is not an abstract notion. On the question of workplace safety, for instance, 

the Bureau of Labor Statistics reports in its 2011 Census of Fatal Occupational Injuries that there were 4,693 workplace deaths in 2011. 

According to researchers from the National Institute for Occupational Safety and 

Health, the American Cancer Society, and Emory University’s School of Public 

Health, there are an estimated 50,000 to 70,000 deaths from occupation-related diseases in the United States annually. 

In addition concern about the cumulative weight of H.R. 2122, several provisions 

in particular raise concern. First, H.R. 2122’s expanded use of formal rulemaking 

procedures for ‘‘high-impact’’ rules strikes me as an unnecessary procedural expansion that would not serve to improve the quality of rulemaking while at the same 

time adding major costs to the process and would effectively grind agency rulemaking to a halt. 

Formal rulemaking fell out of favor more than a generation ago as its costs became more evident. A consensus developed that the notice-and-comment rulemaking 

procedures of Section 553 of the APA—which themselves are fairly heavily 

proceduralized, especially when combined with non-APA analytical requirements— 

struck a better balance between assuring a fair and accurate rulemaking process 

while maintaining agency effectiveness. 

H.R. 2122’s proponents offer no study or other data indicating that the use of 

cross-examination and other facets of the formal rulemaking process are the more 

effective tools for making scientific and policy judgments than the current process. 

If anything, history suggests the opposite. In an infamous example, one formal 

rulemaking proceeding before the Food and Drug Administration took more than 10 
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years to determine whether the FDA should require that peanut butter contain at 

least 90% peanuts as opposed to 87% peanuts. A government witness was examined 

and cross-examined for an entire day about a survey of cookbook and patented peanut butter formulas, missing recipes, and his personal preferences in peanut butter. 

While I make no judgments about how many peanuts should be in peanut butter, 

I do think that government could better spend its resources than devoting 10 years 

to decide that question. We ought to be wary of returning to those days. 

Another concern with H.R. 2122 is its codification of overly burdensome cost-benefit analysis requirements. 

I recognize that every president since Ronald Reagan has required that executive 

agencies conduct cost-benefit analyses, and that support for such requirements has 

been bipartisan. 

Nonetheless, the particular agency determinations required under H.R. 2122, and 

the requirement that all of these determinations be made for all rules, would cause 

unnecessary delay and cost tremendous taxpayer resources. 

I do not see the net benefit in expanding cost-benefit analysis requirements to 

non-major rules or to guidance documents, which do not have the force of law. 

Moreover, we should be wary of overruling existing statutory provisions that prohibit agencies from considering costs when fashioning a rule. These provisions, like 

those in the Clean Air Act and the Occupational Health and Safety Act, represent 

carefully considered legislative judgments made by our predecessors. 

Perhaps we should have a cost-benefit analysis done of H.R. 2122. 

There are numerous other concerns that I will not delve into in these brief remarks, including the bill’s provision establishing expanded and less deferential judicial review, under which judges could second-guess agencies’ cost-benefit analyses 

and substitute their policy judgements for those of agency experts. 

This bill does little to improve rulemaking and will only serve to stymie agencies 

from ensuring that the health, safety, and welfare of the American people are protected. I urge my colleagues to join me in opposition to this bill. 

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Supplemental Statement of Robert A. Sells, President, 

Titan America Mid-Atlantic Business Division 
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Supplemental Material submitted by Jeffrey A. Rosen, Partner, 

Kirkland & Ellis LLP 
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Supplemental Material submitted by Ronald M. Levin, William R. Orthwein, 

Distinguished Professor of Law, Washington University in St. Louis 
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Material submitted by C. Boyden Gray 
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Statement of Administration Policy on H.R. 3010 

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Letter of Opposition to H.R. 3010 
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Response to Questions for the Record from David Goldston, 

Director of Government Affairs, Natural Resources Defense Council 
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Response to Questions for the Record from Ronald M. Levin, William R. 

Orthwein, Distinguished Professor of Law, Washington University in St. 

Louis 
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Æ