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UNCHARTED TERRITORY: WHAT ARE THE CONSEQUENCES OF PRESIDENT OBAMA’S UNPRECEDENTED ‘‘RECESS’’ APPOINTMENTS?

HEARING

BEFORE THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

FEBRUARY 1, 2012

Serial No. 112–105

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

(

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

http://www.house.gov/reform
(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA, California, Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PATRICK T. MCHENRY, North Carolina

JIM JORDAN, Ohio

JASON CHAFFETZ, Utah

CONNIE MACK, Florida

TIM WALBERG, Michigan

JAMES LANKFORD, Oklahoma

JUSTIN AMASH, Michigan

ANN MARIE BUERKLE, New York

PAUL A. GOSAR, Arizona

RAU ́ L R. LABRADOR, Idaho

PATRICK MEEHAN, Pennsylvania

SCOTT DESJARLAIS, Tennessee

JOE WALSH, Illinois

TREY GOWDY, South Carolina

DENNIS A. ROSS, Florida

FRANK C. GUINTA, New Hampshire

BLAKE FARENTHOLD, Texas

MIKE KELLY, Pennsylvania

ELIJAH E. CUMMINGS, Maryland, Ranking

Minority Member

EDOLPHUS TOWNS, New York

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, District of

Columbia

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

DANNY K. DAVIS, Illinois

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

CHRISTOPHER S. MURPHY, Connecticut

JACKIE SPEIER, California

LAWRENCE J. BRADY, Staff Director

JOHN D. CUADERES, Deputy Staff Director

ROBERT BORDEN, General Counsel

LINDA A. GOOD, Chief Clerk

DAVID RAPALLO, Minority Staff Director
(III)

C O N T E N T S

Page

Hearing held on February 1, 2012 ......................................................................... 1

Statement of:

Gray, C. Boyden, founding partner, Boyden Gray & Associates; Andrew

J. Pincus, partner, Mayer Brown; Michael J. Gerhardt, Samuel Ashe

distinguished professor in constitutional law, University of North Carolina [UNC] School of Law; David B. Rivkin, partner, Baker Hostetler,

LLP; and Mark A. Carter, partner, Dinsmore & Shohl, LLP ................... 73

Carter, Mark A. ......................................................................................... 119

Gerhardt, Michael J. ................................................................................. 100

Gray, C. Boyden ........................................................................................ 73

Pincus, Andrew J. ...................................................................................... 85

Rivkin, David B. ........................................................................................ 107

Lee, Hon. Michael S., a U.S. Senator from the State of Utah ...................... 23

Letters, statements, etc., submitted for the record by:

Carter, Mark A., partner, Dinsmore & Shohl, LLP, prepared statement

of ..................................................................................................................... 121

Connolly, Hon. Gerald E., a Representative in Congress from the State

of Virginia, prepared statement of .............................................................. 149

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, letter dated February 1, 2012 ............................................... 5

Gerhardt, Michael J., Samuel Ashe distinguished professor in constitutional law, University of North Carolina [UNC] School of Law, prepared

statement of ................................................................................................... 102

Gray, C. Boyden, founding partner, Boyden Gray & Associates, prepared

statement of ................................................................................................... 75

Issa, Hon. Darrell E., a Representative in Congress from the State of

California:

Article dated January 12, 2012 ................................................................ 36

Democratic Opposition to Recess Appointments ..................................... 50

Lankford, Hon. James, a Representative in Congress from the State

of Oklahoma, letter dated February 1, 2012 .............................................. 64

Lee, Hon. Michael S., a U.S. Senator from the State of Utah, prepared

statement of ................................................................................................... 26

Pincus, Andrew J., partner, Mayer Brown, prepared statement of ............. 87

Rivkin, David B., partner, Baker Hostetler, LLP, prepared statement

of ..................................................................................................................... 109

(1)

UNCHARTED TERRITORY: WHAT ARE THE

CONSEQUENCES OF PRESIDENT OBAMA’S

UNPRECEDENTED ‘‘RECESS’’ APPOINTMENTS?

WEDNESDAY, FEBRUARY 1, 2012

HOUSE OF REPRESENTATIVES,

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 9:40 a.m., in room

2154, Rayburn House Office Building, Hon. Darrell E. Issa (chairman of the committee) presiding.

Present: Representatives Issa, Platts, McHenry, Jordan, Walberg,

Lankford, Amash, Gosar, Labrador, DesJarlais, Gowdy, Guinta,

Farenthold, Kelly, Cummings, Towns, Maloney, Norton, Kucinich,

Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Welch, and

Murphy.

Staff present: Kurt Bardella, senior policy advisor; Michael R.

Bebeau and Gwen D’Luzansky, assistant clerks; Robert Borden,

general counsel; Molly Boyl, parliamentarian; Lawrence J. Brady,

staff director; David Brewer, counsel; Katelyn E. Christ, research

analyst; John Cuaderes, deputy staff director; Adam P. Fromm, director of Member services and committee operations; Linda Good,

chief clerk; Christopher Hixon, deputy chief counsel, oversight;

Mark D. Marin, director of oversight; Kristin L. Nelson and Jeffrey

Post, professional staff members; Laura L. Rush, deputy chief

clerk; Rebecca Watkins, press secretary; Jeff Wease, deputy CIO;

Jaron Bourke, minority director of administration; Beverly Britton

Fraser and Claire Coleman, minority counsels; Kevin Corbin, minority deputy clerk; Ashley Etienne, minority director of communications; Susanne Sachsman Grooms, minority chief counsel;

Carla Hultberg, minority chief clerk; Paul Kincaid, minority press

secretary; Adam Koshkin, minority staff assistant; Lucinda

Lessley, minority policy director; Leah Perry, minority chief oversight counsel; Jason Powell and Steven Rangel, minority senior

counsels; Dave Rapallo, minority staff director; and Mark Stephenson, minority director of legislation.

Chairman ISSA. Good morning. The committee will come to order.

The Oversight and Government Reform Committee’s mission is

that we exist to secure two fundamental principles: First, Americans have the right to know that the money Washington takes from

them is well spent; and, second, Americans deserve an efficient, effective government that works for them. Our duty on the Oversight

and Government Reform Committee is to protect these rights.
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Our solemn responsibility is to hold government accountable to

taxpayers because taxpayers have a right to know what they get

from their government. We will work tirelessly, in partnership with

citizen watchdogs, to deliver the facts to the American people and

bring genuine reform to the Federal bureaucracy. This is the mission of the Government Reform Committee.

I will now recognize myself for an opening statement.

President Obama, on January 4th, executed a political power

play. He put us in uncharted territory. At the very least, it creates

an uncertain environment and significant risk, by his own attorney’s writings. Although, as I know too well, if you shop enough,

you can always get an attorney to give you the opinion you want.

If you can go to enough attorneys, you will get it. And if you hire

a good attorney, they will even tell you that you can pardon a

criminal that is still a fugitive from justice. We know that from history. We know that from recent history now, that you can get an

opinion that is exactly the opposite of centuries of precedent, exactly the opposite of your predecessors, exactly the opposite of stillMajority Leader Reid’s own view of recess occurring or not occurring.

Vice President Biden in 2005 said, ‘‘No President is entitled to

the appointment of anyone he nominates. No President is entitled

by the mere fact he has nominated someone. That’s why they wrote

the Constitution the way they did. It says ‘advice and consent.’ ’’

The Senate did not consent. The Senate chose specifically not to

act, even bringing to a vote and failing to get cloture.

Ultimately, we will decide nothing here today. We are here to

evaluate the risk to the American people of a government that has

appointees who may not be able to act on behalf of the American

people with the rule of law. The courts will soon decide—and the

sooner, the better—whether or not these appointments are valid;

and, if so, whether or not a law limiting taxes to the American people is valid. Because there can be no doubt the two cannot be valid.

You cannot be in recess and not in recess. You cannot choose while

in recess to pass a law and then choose to not be in recess for purposes of recess appointments.

Ultimately, these and other issues will be decided, but the committee is here to understand the risk, to understand the likelihood,

and at least to ensure that government begins facing the real problem of this uncertainty—this uncertainty that may last only a few

weeks or may last for the rest of this administration.

On December 23rd, while in pro forma session, the Senate passed

and President Obama signed the Temporary Payroll Tax Continuation Act of 2011. I am just as concerned that the IRS is not collecting those taxes when, clearly, they were in recess, according to

the President.

This creates another constitutional question. The Constitution

did not consider partial recess or recess for this purpose and not

that purpose. You are either in recess or you are not.

More importantly, the Senate may not act to be in recess to the

exclusion of the other body. We, in fact, act together. We either are

together, as required by the Constitution, or we are not. There is

no such thing as the House is in session and the Senate is not, be-
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cause if we are in session and the Senate is not, no law can be

passed.

Our Founding Fathers anticipated us coming to Washington, or

New York before that, for a period of time and going home to our

constituencies for a rather significant period of time. Many Americans, rightfully so, think that we were better off when we left town

for a period of time and really got in touch with the people we represent.

But that is not the issue here today. We are now a 365-day-ayear Congress. We are at the call of the President and can be back

in a matter of hours. And when we are in fact in pro forma session,

that is the anticipation—the anticipation that, if needed, we will be

back with a full quorum in a short period of time. U.S. Senators

were informed that, in fact, they could be called back. They were

informed that they were not in recess, and they made that decision.

Today we will hear from a prominent U.S. Senator, but, more importantly, we will hear from a constitutional scholar—the son of a

constitutional scholar about what he believes as a Senator. Then

we will go on to hear from other witnesses.

But most importantly, there will be a lively dialog here today, because clearly the decision now is on a very partisan basis. The minority will insist that both are legal, while the majority will at

least question that both cannot be legal and binding. One has to

give.

With that, I recognize the ranking member for his opening statement.

Mr. CUMMINGS. Thank you very much, Mr. Chairman. And I

thank you for holding this hearing.

And to you, Senator Lee, welcome to our committee.

Mr. Chairman, if the committee really wants to conduct an evenhanded examination of President Obama’s recess appointments, we

need to look at a much bigger issue first: the unprecedented obstruction by Senate Republicans of the constitutional confirmation

process.

Republicans have raised constitutional concerns about the President’s recess appointments, but the real issue here is the effort of

44 Republican Senators to sabotage the mission of the Consumer

Financial Protection Bureau. In a letter the Republican Senators

wrote last May, they declared their opposition to any—any—nominee to head the Consumer Financial Protection Bureau. These Republicans admitted that the President’s nominee, Richard Cordray,

was highly qualified for the position. As the attorney general of the

State of Ohio, he recovered billions of dollars for retirees, investors,

and business owners, and he was on the front lines of protecting

consumers from fraudulent foreclosures and financial predators.

Senator Mike Lee conceded that Mr. Cordray was well qualified

for this position, ‘‘My decision to oppose his confirmation by the

Senate has nothing to do with his qualifications,’’ said Senator Lee.

‘‘Rather, I feel it is my duty to oppose his confirmation as part of

my opposition to the creation of CFPB itself.’’

This gang of 44 Republican Senators oppose the creation of the

Consumer Protection Bureau. According to existing law, once a permanent director is put in place, the Bureau will have authority to

issue regulations protecting consumers from unfair, deceptive, or
4

abusive consumer financial practices by mortgage servicers, payday

lenders, debt collectors, private student lenders, and credit reporting agencies. These are exactly the protections Republicans wanted

to block.

Article II of the Constitution says the President shall nominate

and appoint officers of the United States, ‘‘with the advice and consent of the Senate.’’ Nowhere does the Constitution authorize Senators to block all nominees, regardless of their qualifications, because they object to the current law—the current law—of the land

and do not have the votes to change it. Constitutional scholar

Thomas Mann calls this Republican boycott, ‘‘a modern-day form of

nullification,’’ and says, ‘‘There’s nothing normal or routine about

this.’’

As our committee has heard repeatedly, there are millions of

American families who are currently in foreclosure, many of them

in my district, many of whom were subjected to widespread and illegal abuses by mortgage servicers. Nearly 20 million consumers

take out payday loans from an industry widely known for its unscrupulous behavior.

What is the Republican response? They want to cut the legs out

from under the agency Congress created—Congress created—to

protect American families from exactly these types of abuses by

mortgage servicers, payday lenders, and credit reporting agencies.

Today’s new concern about litigation arising from the appointment is a red herring. The corporate interests that opposed the creation of the Bureau to begin with are the same interests that are

now aggressively challenging the consumer protections in court.

As with the Consumer Bureau, Republicans also oppose the entire mission of the National Labor Relations Board and have

blocked the President’s appointments in an effort to prevent the

Board from functioning properly.

In short, Senate Republicans left the President with no choice.

These recess appointments were the only way to comply with Congress’ intent in establishing and maintaining fully functioning

agencies.

The fact is that President Obama has been extremely restrained

in his use of recess appointments. During their full terms, President George W. Bush had made 171 recess appointments; President Clinton had made 139 recess appointments; and President

Reagan had made 240 recess appointments. In contrast, President

Obama has made just 32 at this point in his Presidency.

I hope we can ask our witnesses today not only about the President’s recess appointments but also about a much more significant

issue: unprecedented obstructionism by Senate Republicans that is

intended to cause irreparable harm to the American consumers.

And, with that, Mr. Chairman, I have a minority report that we

produced, and I ask unanimous consent that it be inserted in the

record.

Chairman ISSA. It doesn’t appear to be a report, but the documents you have, we have reviewed them, and I have no objections.

They will be placed in the record.

[The information referred to follows:]
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Mr. CUMMINGS. Thank you very much, Mr. Chairman.

Chairman ISSA. Thank you.

We now go to our first witness. Our first panel is Senator Mike

Lee of Utah.

Senator Lee has spent his entire life both studying and participating in our judicial system. As a child, he attended arguments

before the U.S. Supreme Court given by his father, Rex, who was

Solicitor General under President Ronald Reagan. Senator Lee

later clerked for Justice Alito, both when he was a member of the

Third Circuit Court of Appeals and later a Supreme Court Justice.

After spending time in the private sector, he was asked to serve

as the assistant U.S. attorney in Salt Lake and then as general

counsel to Governor John Huntsman. Few people with this type of

experience and understanding of our Constitution and our judicial

process have served in the Congress. So, although Senator Lee is

a freshman, he is certainly not new to the questions that the Senate faces and our country faces here today.

And, with that, Senator, I understand that you are both testifying and willing to take questions; is that correct?

Senator LEE. Yes, sir. Yes, sir.

Chairman ISSA. And as is customary for everyone except—actually, required in the rules—except for Members of Congress, you

will not be sworn, in that you are a Member of our body.

With that, the gentleman is recognized.

STATEMENT OF HON. MICHAEL S. LEE, A U.S. SENATOR FROM

THE STATE OF UTAH

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

Cummings, for the invitation to come here and to address you and

the other members of the committee. It is an honor to be here with

you today.

I am here to defend the constitutional prerogatives of Congress.

And I want to be clear from the outset that regardless of whatever

political concerns I might have with these nominations, my overriding, dominating concern here is not partisan; rather, it is an institutional and a constitutional concern that I am here to explain

and then answer any questions that you might have regarding

those concerns.

President Obama’s January 4, 2012, appointments are unconstitutional because they did not comply with the requirements for appointments set forth in the Constitution. Those requirements, I

might add, are important because, as the Founding Fathers discussed in that fateful convention in the summer of 1787 that occurred in Philadelphia, the Founding Fathers were unwilling to

grant this power on an unrestrained basis to an executive, as they

argued that it would not be wise to, ‘‘grant so great a power to any

single person, as the people would think we are leaning too much

toward monarchy.’’

These appointments were unconstitutional because they neither

received the advice and consent of the Senate nor were they made

during a Senate recess, the kind of recess cognizable under the recess appointments clause. They are different in kind than previous

recess appointments made by any President from any political

party in our Nation’s history. No President has ever unilaterally
24

appointed an executive officer during a recess of less than 3 days.

Neither, to my knowledge, has a President of either party ever asserted the power to determine for himself when the Senate is or

is not in session for purposes of the recess appointments clause.

In making these appointments, President Obama has not, to my

knowledge, asserted that his January 4, 2012, appointments can be

justified based on the 3-day adjournment that occurred between

January 3, 2012, and January 6, 2012. And this is for good reason.

Surely any such assertion of the recess appointment power would

be unconstitutional.

The Department of Justice has repeatedly and over the course of

many decades opined that an adjournment of significant length and

particularly an adjournment of 3 days or less—that is, any adjournment that is of insignificant length because it is of 3 days or less—

does not constitute a recess for purposes relevant to this recess appointments clause. And the text of the Constitution evidences that

the Framers did not consider an adjournment like this to be constitutionally significant.

It is also significant here that Article I, Section 5 provides that

neither House during the session of Congress shall, without the

consent of the other, adjourn for more than 3 days. So if an intrasession adjournment of less than 3 days were to be considered constitutionally sufficient for the President to be able to exercise this

recess appointment power, it is unclear what, if anything, would

prevent the President from routinely bypassing the Constitution’s

advice and consent requirement in appointing nominees during

even weekend adjournments, which routinely involve periods of 72

hours or even more in which the Senate may not be actually in the

practice of holding committee hearings and voting and so forth.

Instead, in asserting that his appointments are constitutional,

President Obama has relied on a memorandum opinion produced

by the Office of Legal Counsel [OLC] in the Department of Justice.

This OLC memorandum asserts that the President may unilaterally conclude that the Senate’s brief pro forma sessions, such as

those that were held on January 3, 2012, and continued every

Tuesday and every Friday until January 23, 2012, somehow do not

constitute sessions of the Senate for purposes relevant to the recess

appointments clause.

This assertion is deeply flawed because, under the procedures established by the Constitution, it is for the Senate and it is not for

the President to decide when the Senate is in session. Indeed, the

Constitution expressly grants the power to determine the rules of

its own proceedings.

To assert that the President has an unconstrained right to determine for himself when the session is or is not in session and to appoint nominees unilaterally at any time he feels the Senate is not

as responsive as he would like it to be—even when the Senate is

meeting—is to trample upon the Constitution’s separation of powers and the system of checks and balances that animated the adoption of the advice and consent requirement.

I look forward to answering your questions. And as I answer

those questions, I will continue to emphasize again and again that

ours is not a government of one. These are real rights upon which

the President has trampled. This is power that he has taken that
25

doesn’t belong to him; it belongs to the American people. And

under our constitutional system, that power is to be exercised by

the people’s elected representatives in the Senate and not by the

President alone.

There are people throughout my State and across America who

feel powerless, and that is why I have made the comments I have,

that this is a lawless action that we need to object to strenuously.

Chairman ISSA. I thank the gentleman. I did not limit you to 5

minutes, but I appreciate your accuracy.

[The prepared statement of Senator Michael S. Lee follows:]
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Chairman ISSA. I will now recognize myself for a first round of

questions.

Senator LEE. We will call it professional courtesy. I always appreciate it in the Senate when people limit themselves to the 5

minutes as well.

Chairman ISSA. Well, you know, being a House Member, I have

noticed that when House Members go to the Senate, there is a veil

of forgetfulness that we somehow see.

Senator, the CFPB, passed under Dodd-Frank, isn’t it unique or

fairly unique in that it receives its funding without appropriation

from Congress?

Senator LEE. Yes, that is my understanding, is that because this

position is embedded within the Federal Reserve, because the Federal Reserve Bank is not, in a sense—in a literal sense, in the traditional sense, a government agency but rather a private, for-profit

corporation, it is not an entity that Congress controls in the sense

of controlling its purse strings. And so that is a significant concern

that many of our——

Chairman ISSA. Right. So you had no other way to ask for reform, consideration, or anything else other than this confirmation.

It was an unusual situation in which one of the ordinary powers

of the House and the Senate is to not fund something that a previous Congress has chosen to do. But in the case of the CFPB, that

is not the case; is that correct?

Senator LEE. That is correct. And in that respect, it enjoys an

unusual degree of insulation from the normal controls on any government. And that degree of insulation historically has been reserved for despots.

Chairman ISSA. Good word.

One of the points that I have been given by Cato—and I ask

unanimous consent it be placed in the record—is, actually, on their

Web site, they note that 97 percent of President Obama’s nominations in 2011 were confirmed by your body. Is that roughly your

understanding?

Senator LEE. Yes.

[The information referred to follows:]
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Chairman ISSA. So the fact is, you are practically a rubber stamp

to what the President wants, right?

Senator LEE. Some of us try not to see ourselves quite that way,

but we have been very cooperative in confirming this President’s

nominees. I, in fact, myself, despite the fact that I have harbored

significant policy, ideological, and political differences with many,

if not most, of the President’s nominees, I have continued to vote

for them, and most of them have been confirmed, many with my

vote.

Chairman ISSA. So you have exercised advice and consent and in

the affirmative 97 percent of the time.

Let me go to another portion, because you are, both personally

and as a family, historically better informed than we are. Hasn’t

the Senate exercised its refusal in the past, even at times to the

Supreme Court? And hasn’t it been the view that if the Senate decided not to have a Supreme Court, all they would have to do is

wait for them to die off, that ultimately it is within the power over

a period of time for the Senate to choose not to fill vacancies, that

that is within its historic power, and they have asserted it in the

past?

Senator LEE. The Supreme Court certainly is on a different plane

from other government officials. The Supreme Court, unlike many

other government officials, certainly unlike the people who serve in

the NLRB or the CFPB or elsewhere, are not people whose positions are specifically created under and identified in the Constitution. So that is different.

But the overarching question you are asking is whether or not

the Senate, in its advice and consent function, is required to give

its consent, to, in fact, approve. And——

Chairman ISSA. Right.

Senator LEE [continuing]. It isn’t. That is the Senate’s prerogative.

Chairman ISSA. So both at district court, circuit court of appeals,

and actually at the Supreme Court, they have chosen simply not

to act on Presidential appointments in the past and, by doing so,

let them hang until the President withdrew them or the nominee

went somewhere else or the President’s term expired or he found

somebody else to appoint. Isn’t that correct?

Senator LEE. In many, many instances, more instances than I

can count.

Chairman ISSA. Now, Ambassadors are one of the confirmations

that you do in the Senate. And if we do not have an ambassador,

we, in fact, have a lower standing in that foreign country and a

lower ability to have a presence around the world. Isn’t that true?

Senator LEE. That argument has been made, and I suspect there

is some truth to it.

Chairman ISSA. And isn’t it routine—and they are certainly envisioned in the Constitution. They are not just some affectation of the

last administration—or the administration’s last Congress. So isn’t

it true that it has been the practice of the Senate, under Senator

Reid, sometimes simply to say that nominee is dead on arrival and

go find somebody else and not call for a vote?

Senator LEE. Yes.
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Chairman ISSA. Isn’t it true that often nominees are pre-vetted

before they are put up so as not to embarrass them, and, in fact,

there is a whole discussion because they so want to not have that

controversy?

Senator LEE. That is also correct. It is a well-known fact that

this occurs and with good reason.

Chairman ISSA. With good reason.

So I guess—a couple last questions. Motion to adjourn in the

Senate—different body here, but it is in order here at any time.

Was there a motion to adjourn by the Democrats issued? Did they

try to adjourn?

Senator LEE. My understanding is that we could not adjourn because, consistent with Article I, Section 5 of the Constitution, we

were required to obtain the consent of the House of Representatives to adjourn and, before adjourning, for any period of time

longer than 72 hours.

Given that we didn’t receive such consent, the Senate was unable

to adjourn for any period of time longer than 72 hours. And so we

continued holding pro forma sessions basically every 72 hours

throughout that period of time.

Chairman ISSA. But let’s talk about pro forma sessions, last

question, very quickly. Every 3rd day, who got in the chair over in

the Senate? Was it a Republican?

Senator LEE. Normally a Democrat is my understanding.

Chairman ISSA. Normally or always?

Senator LEE. Always.

Chairman ISSA. So Senator Reid had to put a Democrat in the

chair to hold the pro forma session every 3rd day, and he did so.

Senator LEE. Correct.

Chairman ISSA. Thank you.

I yield back and recognize the ranking member for 5 minutes and

49 seconds.

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

And again, Senator Lee, I want to thank you for bringing these

concerns before us.

As you could tell from my opening statement, I am concerned

that a large number of Senators tried to block a candidate who is

extremely qualified for a post because they disagree with the law—

the law—Congress passed creating the Consumer Bureau. On December 7, 2011, your office issued a press release that stated, ‘‘My

decision to oppose his confirmation by the Senate has nothing to

do with qualifications, but I feel it is my duty to oppose his confirmation as part of my opposition to the creation of the CFPB

itself.’’

My question is, the Senate’s role is to give advice and consent.

Senator, just to be clear, you don’t have any problem with Mr.

Cordray, do you?

Senator LEE. I don’t have any personal problem with him. I am

sure he is a wonderful human being.

Mr. CUMMINGS. You felt that he was qualified for the job?

Senator LEE. I feel that he possesses professional qualifications

which might well serve him well in a variety of government positions.

Mr. CUMMINGS. Let me put up Slide 5 up on the board.
39

C. Boyden Gray, who was the White House counsel to President

Bush, will be testifying on the next panel of this hearing. And his

view is that your actions would be an unconstitutional act for a

Senator. Let me read to you what he said. It says, ‘‘I believe the

use of the Senate cloture rule to permanently block nominations

conflicts with the Constitution’s advice and consent clause.’’

So, Senator Lee, is your message to Mr. Gray that he doesn’t

know his constitutional law?

Senator LEE. I certainly would never say that. I have enormous

respect for Mr. Gray. I consider him a friend. I also consider him

something of a role model as a constitutional scholar, and I admire

his work.

I am not sure of the totality of the circumstances in which he

made that comment, but let me say this: My belief is that because

Congress is a legislative body consisting of elected officials and

those elected officials are retired in increments—especially in the

Senate, where we have elections only every 2 years—you often

have a set of laws that one body has to deal with. In many instances, you have Members of a new Congress that didn’t vote for

a previous law. It is not at all uncommon, for instance, to have a

law that creates a government office in one session of Congress

that a subsequent Congress refuses to fund or refuses to fund part

of its actions. That happens from time to time.

Now, you might have a Senate that decides not to confirm somebody to a particular position, perhaps because of the qualifications

of the individual or perhaps they have concerns about the office or

the power that that officer might wield. And I believe that it is not

improper for a Congress to raise those concerns, raise substantive

concerns about the office itself when going through the nominations

process.

It is, at the end of the day, the Senate’s prerogative to confirm

or not to confirm. And there is nothing in the text, the original understanding, or the history of the Constitution that suggests that

the Senate’s prerogative to provide advice and consent to Presidential nominations means that the consent, in fact, has to be

granted.

Mr. CUMMINGS. Uh-huh. So, in other words, if a Senator disagrees with the law, then it is your opinion that they are within

their rights under the Constitution to basically say, I am not going

to vote to confirm a nominee. Is that right?

Senator LEE. Yes, in——

Mr. CUMMINGS. Because the underpinning law—is that——

Senator LEE. Yes, and in precisely the same respect and for precisely the same reasons that a Senator or a Congressman, for that

matter, might refuse to vote to fund a particular office that was

created under a previous law, adopted by a previous Congress.

That is not only not improper but that is part of what it means to

live in a constitutional republic in which laws are made and government programs are funded only by regularly elected officials

who stand for reelection and may lose election after a while.

Mr. CUMMINGS. In addition, on February 2, 2005, Senator Jon

Kyl, one of your colleagues, made the following statement on the

floor regarding the Gonzales nomination, and he said: ‘‘When someone is qualified and has the confidence of the President, unless
40

there is some highly disqualifying factor brought to our attention,

we should accede to the President’s request for his nomination and

confirm the individual.’’

What is your opinion on that, what he said?

Senator LEE. Well, again, you know, I make it a point not to

speak for my colleagues. I don’t know the totality of the circumstances in which my friend Senator Kyl made that statement.

But I will say, first of all, that any Senator may decide to grant

or withhold his or her vote to confirm or not to confirm anyone for

any reason, just as he or she is free to vote or not vote for any particular budget or appropriations act or anything else.

Second, and perhaps more importantly, the fact that there is

delay, the fact that there has been delay in confirmations in every

Senate, with every Presidential administration, Republican or

Democratic, going back decades, in fact, going back throughout the

entire history of our Republic, does not and cannot ever excuse the

President of the United States in thumbing his nose at the U.S.

Constitution. That is what has happened here. That is what we are

talking about today.

Mr. CUMMINGS. So if Senators started blocking all the President’s

nominees because they disagreed with the laws that Congress

passes, we would essentially have a form of nullification that could

shut down the government, and that clearly is not what the Framers intended.

Senator LEE. Well, I am not sure that I can agree with that

statement. Every Congress has the power to shut down the government should it choose, subject, of course, to what the electorate

wants. If a Congress chose to shut down the government, my guess

is that that would be extraordinarily unpopular, especially if it extended for a duration of more than just a few days.

Yeah, the Congress has the power to do all sorts of things. And

the fact that the Senate could exercise that advice and consent

power irresponsibly doesn’t justify the President in circumventing

those very same constitutional restrictions that give it that power.

Mr. CUMMINGS. I thank you, Mr. Chairman.

Chairman ISSA. I thank you.

And if I could make a clarification for the record, Ambassador

Gray was in the first Bush administration. You said ‘‘President

Bush’’; I want to make sure everyone knew it was not the immediate past.

Mr. CUMMINGS. Right. Thank you.

Chairman ISSA. And, with that, we recognize the distinguished

gentleman from South Carolina, Mr. Gowdy.

Mr. GOWDY. Thank you, Mr. Chairman.

Senator Lee, welcome. Thank you for being with us today.

Who has standing to challenge this?

Senator LEE. Well, if you are talking about Article III standing

for purposes of determining whether a case is justiciable in a Federal court, the most likely type of party that could establish standing would be a party aggrieved by an order, a decision, carrying the

force of law by either the National Labor Relations Board or the

Consumer Financial Protection Bureau. Once such an order has

been issued and you have an aggrieved party, someone could, in

theory, take that case to a Federal district court and say, I have
41

an injury in fact, it is fairly traceable to the conduct of the NLRB

or the CFPB, and it is the kind of injury that could fairly be redressable in court.

Mr. GOWDY. Do U.S. Senators have standing to challenge the recess appointments?

Senator LEE. While there may be some disagreement on this, of

the authorities that I have consulted, including those based on the

Supreme Court decision in Raines v. Byrd, seems to suggest that

U.S. Senators are likely not to have standing to bring the case in

their own capacity, but they certainly could in all events participate as amici curiae.

Mr. GOWDY. There is often talk of precedent and stare decisis,

particularly when people like the decision, initially. They don’t tend

to talk about precedent and stare decisis as much when they don’t.

My concern is, whatever the analysis we have of the recess appointment clause, it should be the same irrespective of who the

President is and what party they are in. Can you talk about the

historical treatment of what a recess meant and what a better rule

is going forward?

Because it strikes me that if the person in the chair were taking

a nap, under the President’s analysis, he could make a recess appointment, or if you all were out to lunch for a couple of hours.

What is the difference between 3 hours and 3 days?

So what has historically been the rule and what is a good rule

going forward, irrespective of who the President is?

Senator LEE. That is a great question. And I want to emphasize

the concern embedded in your question here, that the answer can’t

simply be that the President may decide on his own accord when

the Senate is in recess. If he regards that the Senate is doing insignificant work, for instance; if he decides that whoever is sitting in

the presiding officer’s chair is going to sleep or that they are likely

not to do any work, that is dangerous. That creates a slippery slope

in which he could decide to make recess appointments overnight or

over a weekend or something like that, and that certainly can’t be

the case.

To answer your broader question, precedent has been established

in recent decades, basically over the course of the last century. Before that, I think it was a little more informal, but we have had

substantial precedent evolve over the last century.

We had in the early 1900’s a series of recess appointments made

by President Theodore Roosevelt, 167 recess appointments made in

the seconds between the end of one Congress and the beginning of

the next Congress, just in between gavel taps, basically. The Senate Judiciary Committee convened a panel and conducted a formal

investigation to determine what the rule ought to be. And our custom and practice as it has evolved over the intervening century has

been based, in part, on their analysis.

Here is one of their conclusions, and I quote from their 1905 report: ‘‘The Framers of the Constitution were providing against a

real danger to the public interest and not just an imaginary one.

They had in mind a period of time in which it would be harmful

if an office were not filled—not a constructive, inferred, or imputed

recess as opposed to an actual one.’’ So, in other words, they are
42

saying you can’t use an overly technical set of logic in order to

reach the conclusion that you have a recess.

Now, that conclusion was followed up by an Attorney General’s

advisory opinion by Attorney General Daugherty, which was issued

in 1921. And among other things in that report, he explained that

regardless of exactly where you draw the line, he said, under no

set of reasonable circumstances can you infer that an adjournment

lasting less than 3 days could be deemed a recess for purposes of

the recess appointments clause. He went on to say, it is probably

too short even if you take it out to 7 days or to 10 days.

And ever since then, our analysis has been informed by those positions; that, if nothing else, we look back to those two clauses of

the Constitution we talked about earlier—Article I, Section 5 and

Article II, Section 2. Article II, Section 2 says the President has

this power during a recess. Article I, Section 5 says that in order

to adjourn for more than 72 hours, the Senate has to get permission of the House. So that has evolved as a sort of safe harbor. If

we don’t have permission from the House or for whatever reason

we don’t get it, then we are not in recess, because we are having

to convene every 72 hours.

The fact that we might not pass laws doesn’t mean that we can’t.

We, in fact, did pass a very significant law on December 23rd in

one of those pro forma sessions, just days before these recess appointments were made.

So it is wrong to suggest, as the President’s Office of Legal Counsel has suggested in advising him, that those pro forma sessions

are meaningless for constitutional purposes here.

Mr. GOWDY. Mr. Chairman, I have additional questions but I am

out of time, so perhaps one of my colleagues will take mercy on me

later on.

Chairman ISSA. One can always hope.

And, with that, we recognize the former chairman of the full

committee, Mr. Towns, for 5 minutes.

Mr. TOWNS. Thank you very much, Mr. Chairman. I

appreciate——

Chairman ISSA. And if you would like to yield to the gentleman

from South Carolina at any time, he is available.

Mr. TOWNS. Yeah, I don’t think I will do that.

But let me just say that I really appreciate the Senator coming

over to share with us, but, Mr. Chairman, I yield back the balance

of my time because I really want to get to the witnesses. You know,

I really do. And I am eager to get to the witnesses. And I hope my

colleagues are, too.

I yield back.

Chairman ISSA. I thank the gentleman for yielding back.

We now go to the gentleman from Texas, Mr. Farenthold, for 5

minutes.

Mr. FARENTHOLD. Thank you, Mr. Chairman.

Thank you, Senator, for being here.

While I was home over the Christmas holiday and during this

timeframe and after the President made these appointments, I got

a great deal of email from my constituents asking, How could you

let this happen? How do you fix this? What do you do? I mean,

there was a real frustration. I think the American people got, on
43

a commonsense basis, that we were not in recess when we were

meeting pro forma every 3 days, when we passed very significant

legislation in the form of the payroll tax holiday that the President

himself was calling for us to pass during these pro forma sessions.

So my question to you is, I am not going to get into the nittygritty of whether we were in recess. I think the American people,

anybody with a lick of common sense, gets that we were not in recess.

But where do you go from here? What are our options in dealing

with these people who are taking taxpayer money, making critical

decisions affecting this country, that have bypassed the advice and

consent of the Senate, as I think is required by the Constitution?

I mean, what are some of our options here? What can we do?

It is clear courts don’t like to get involved in these separationof-powers issues. You answered Mr. Gowdy’s question about standing. I mean, where do we go from here? Do we de-fund the positions? Well, that will never really get passed unless we can bury

it in some other bill. I mean, we can’t impeach him, I don’t think,

because they haven’t committed any crimes. Do we amend the Constitution to make this problem not happen? Where do we go from

here?

Senator LEE. Well, first of all, thank you for sharing that set of

remarks about what you have heard from your constituents. It is

very much consistent with what I have heard from my constituents

in my State, which is that people are feeling frustrated, they are

feeling a sense of powerlessness, they are feeling the sense that

power that belongs properly to them, the American people, has

been exercised, it has been taken by someone to whom it does not

belong. The President has taken power that belongs to the people

and is authorized to be exercised only by those duly elected to the

U.S. Senate.

And so something does need to be done, and that is why I have

drawn the attention to it in recent days that I have. That is why

I have said that, for my part, in my role as a Senator, although

I have cooperated, and cooperated happily, with this President even

though he has appointed lot of people with whom I have significant

political and philosophical disagreements, I have recognized he is

the President, he did in fact win an election, elections have consequences, and I have confirmed most of those people who have

come before me.

But for me, personally, that changes now. My response to that

and my duty to the Constitution, based on the oath that I took to

it just over a year ago when I took office, I think requires me to

stand up for these constitutional prerogatives and to show the

President that unless or until he rescinds these unconstitutional

appointments and allows them to be considered under regular

order in the Senate, he is not going to enjoy the same degree of

complete cooperation that he has had.

Other responses might include an action in the courts, notwithstanding the doubt surrounding whether Senators have standing

independently. Senators can, and I anticipate many will, participate as amici curiae in judicial actions that would be brought by

other parties with standing. I think there is some possibility that

courts could act. One of the problems is that the courts act rel-
44

atively slowly. And it seems somewhat unlikely to me that the

courts will issue relief in the time that is required, because these

recess appointments will be valid only through the end of the year.

And if the courts act after that, it is sort of water under the bridge,

in a sense.

Other options would include, as you have suggested, options that

might involve de-funding these offices. Certainly in the case of the

NLRB, we have to remember that the President can’t fund anything on his own. He has to rely on Congress; Congress has the

power of the purse. And the House of Representatives, in the first

instance, holds the power of the purse. That is certainly an option.

There are problems that arise out of the fact that the CFPB is

embodied within the Federal Reserve Bank. We might want to look

at a change in substantive law, in the fact that we have given this

office to that entity and we have given funding responsibility to an

entity that is not within our funding control.

These are the primary levers that we use. In addition to all of

those, I think it is important that we make sure that this is considered in the political discussion in the upcoming elections, both

Presidential and congressional. Because we in America have to entrust that those we elect into office, particularly the chief executive

officer position, will respect the limitations on their power. Ours is

not a government of one. And for this President to pretend otherwise is an insult to the Constitution and it is an insult to the

American people.

Chairman ISSA. Would the gentleman yield?

Mr. FARENTHOLD. Yes, sir.

Chairman ISSA. By the President doing the appointment on January 4th, not January 3rd, isn’t it true that these individuals will

enjoy a 2-year term, not a 1-year term?

Senator LEE. That is not my understanding. So the recess appointments clause in Article II, Section 2 provides that recess appointees will remain in power until the end of that session of that

Congress.

So, it is interesting. We held our first session of the second session of the 112th Congress on January 3rd, 1 day before the President made these recess appointments. So it is my understanding

that they will continue in office, assuming they are not invalidated

in some other way, through the end of this session, which will last

through the end of this year. We will start a new Congress, of

course, in January of next year.

Chairman ISSA. Thank you. I yield back.

Mr. FARENTHOLD. I see my time has expired.

Chairman ISSA. I thank the gentleman for giving me what was

left.

We now recognize the gentleman from Massachusetts, Mr.

Lynch, for 5 minutes.

Mr. LYNCH. Thank you, Mr. Chairman.

Senator, I just want to say how pleased I am to have you come

before the committee. I appreciate your words and your cooperation, your assistance with this matter.

I do have to acknowledge, though, you are not under oath, so this

is really just a chat. And it is one that I am enjoying, but we do
45

have another panel of witnesses that I would like to get to. So,

with all due respect, I will yield back the balance of my time.

Thank you, sir.

Senator LEE. Thank you.

Chairman ISSA. Boy, that was quick.

Senator LEE. I would be happy to take an oath if you want me

to, by the way.

Chairman ISSA. You know, you took an oath already, Senator,

and——

Senator LEE. Indeed.

Chairman ISSA [continuing]. We think that is more than

sufficient——

Senator LEE. That will do.

Chairman ISSA [continuing]. For ourselves and for the other

body.

We now go to the gentleman from North Carolina, Mr. McHenry,

for 5 minutes.

Mr. MCHENRY. I thank the chairman.

Senator Lee, thank you so much for being here. I certainly appreciate your testimony. And thank you for the work that you are

doing, the heavy lifting you are doing in your first term in the U.S.

Senate.

With that, I would like to yield the balance of my time to the

gentleman from South Carolina, Mr. Gowdy.

Chairman ISSA. I knew you would get lucky from a fellow Carolinian.

Mr. GOWDY. Well, Congressman McHenry has always shown graciousness toward me, and I appreciate his yielding. Thank you for

that.

Senator, how were you possibly to have vetted the NLRB putative appointees given when the names were submitted to the Senate?

Senator LEE. Yeah, thank you for raising that, Congressman

Gowdy.

With regard to two of the appointees to the NLRB, their names

were submitted just right before the Christmas holidays, and just

days before, in fact. And, as a result, they had not gone through

the committee process. They hadn’t been vetted by any committee.

We hadn’t had time to set up a single committee hearing. And so

that, in and of itself, ought to draw attention to the legitimacy of

the procedures, the legitimacy of the constitutional analysis that

led to these unconstitutional recess appointments.

It really is a stretch, to say the least, to say that any of these

are legitimate recess appointees, and particularly so with regard to

those.

This underscores the point, this was not justified, cannot be justified, by the fact that, inevitably, in any Senate confirmation proceeding, for any nominee, there may be some delays. There have

been under every administration, in every Congress, in every Senate that I am aware of, ever. And the fact that that happens

doesn’t mean that the President can just ignore the Constitution.

But that is especially so where they were given to us just days earlier, and we didn’t even have time to vet them.
46

Mr. GOWDY. So you get the names on December the 15th, and

what, 21⁄2 weeks later, he makes a recess appointment and says

that the Senate is not doing its job?

Senator LEE. That is correct.

Mr. GOWDY. And with respect to the Republican appointee to the

NLRB, could Senator Reid have set that for a vote? I am not familiar with how the Senate works, but that name had been in the Senate for some time. It strikes me that if Senator Reid were concerned about whether or not there was a quorum on the NLRB, he

could have set that, and he did not set that.

Senator LEE. As the majority leader, he does, in fact, control the

Senate schedule and the Senate vote schedule, and he could have

set that for a vote, and yet he did not.

And that opens up another issue, which is that at any given

time, we can even do these sorts of things through a pro forma session. We have on occasion approved people by unanimous consent

in a pro forma session. And that has been done in the past; it could

have been done at the time. The fact that it didn’t occur hardly

means that we were not available to act on these.

Mr. GOWDY. Well, as I shared with you before Congressman

McHenry was so gracious to give me some extra time, my real concern is, whatever we decide this analysis is, is going to have to be

equally applicable whether we like who the President is or we wish

we had another one. So it just strikes me that we have created

something of a ratchet, because once you define it, it is very hard

to expand it, once you limit it.

And it now seems to me the rule is, we are going to give you 21⁄2

weeks to vet our nominees, and if you don’t, then you are not doing

your job. And if you are out for 3 days, that is a recess; and if we

like the laws you passed, like the payroll tax extension, then you

are not in recess. But if we don’t like what you have done, you are

in recess, which—the political gimmickry—the Constitution really

should be immune from political games.

So can you speak to how you were in recess but yet you also

passed this payroll tax extension upon which the Republic hung in

the balance, if you listen to the rhetoric? How could you pass that

but yet still be in recess?

Senator LEE. Well, of course, we couldn’t. We had to be able to

act, and we did, in fact, act. And we acted on December 23, 2011,

to pass that into law.

The President demanded that Congress act. The President subsequently praised the Congress for moving into action quickly. He

signed that legislation into law promptly. He recognized the legitimacy of Congress’ actions, notwithstanding the fact that they were

conducted, at least on the Senate side, in a pro forma session on

December 23rd; notwithstanding the fact that previously we had

anticipated that there might not be any formal business conducted,

there was. And that indicates the fact that we were, in fact, open

for business, as we were required to be under the Constitution, not

having received the consent of the House of Representatives to adjourn for a period of more than 3 days.

This emphasizes my broader point, which is that my concern is

neither Republican nor Democratic; it is neither liberal or conservative. This is politically ecumenical. This issue is simply an Amer-
47

ican one, one rooted in the rule of law and the U.S. Constitution

to which we have all taken an oath. It is that we can’t, as an institution, as a country, afford to allow one person to exercise power

that does not properly belong to him, that the people have not

properly given him. And that is what happened here. So I will be

just as hard on any Republican President who dares try this nonsense as I am on this President.

Mr. GOWDY. Thank you, Senator.

Thank you, Mr. Chairman, and the gentleman from North Carolina.

Chairman ISSA. I thank the gentleman.

We now recognize the distinguished lady from the District of Columbia, Ms. Norton, for 5 minutes.

Ms. NORTON. I thank you, Mr. Chairman.

And I want to thank Senator Lee for appearing today.

I just want to say, I might have found the discussion edifying

had there also been present a Senator who supported the appointments during this recess, since all Senators are known, are notorious for jealously guarding their institutional prerogatives.

But absent that, Mr. Chairman, I would just as soon get on to

the next panel.

Chairman ISSA. I thank the gentlelady. I will note that we took

all Senators who asked to be here.

And, with that, we recognize the gentleman from Tennessee for

5 minutes, Mr. DesJarlais.

Mr. DESJARLAIS. Thank you, Mr. Chairman.

And thank you, Senator, for being here. Unfortunately, I have a

conflict with another hearing, so I am going to yield my time back

to the good chairman, Mr. Issa.

Chairman ISSA. I thank the gentleman.

Now it is Tennessee and California that are teaming.

Senator, I did want to follow up on a couple of questions. You

mentioned earlier Teddy Roosevelt’s famous appointments. But

those were specifically when the Congress went gavel to gavel; in

other words, during the anticipated historic change of sessions. Did

the President have that option in this case? Or could he have had

that option to do it on January 3? Because wasn’t there, in fact,

a moment between sessions?

Senator LEE. Well, I don’t regard there to have been an opportunity for him to issue an actual recess appointment. But I should

point out that that hypothetical does get at a different set of facts.

That deals with what you might call an intersession recess appointment, as opposed to——

Chairman ISSA. Isn’t that one in which the court has spoken?

Senator LEE. Well, that is one in which a court has spoken. I believe you might be referring to the 11th Circuit decision in that regard.

Chairman ISSA. Right. But that would be one in which the President would know the likely outcome, at least historically, right?

Senator LEE. Perhaps. In a different set of circumstances, if they

otherwise would support the conclusion that we were in recess for

purposes of the recess appointments clause. But that would be

called an intersession appointment, and this was an intrasession

recess.
48

Chairman ISSA. But the President clearly waited. He waited

until January 4th. It didn’t come to his mind. The opinion he

sought didn’t just come in on January 3rd. He, with malice and

forethought if you will—maybe malice is a little unkind. But with

forethought and planning, he planned to do it after January 3rd,

from all indications.

Senator LEE. I strongly suspect that this was not an arbitrary

decision on the part of the President. He is a careful person who

is familiar with the Constitution, and I am certain that this was

deliberate.

Chairman ISSA. Isn’t he sufficiently familiar with the Constitution that he had the opposite opinion when he was in the Senate

that he now has as President?

Senator LEE. I think he got it right the first time and should

have stuck with his first instinct.

Chairman ISSA. Presidents often say they grow in office. And perhaps he simply grows out of the office of the Senate and his respect

for that President body, which is, quite frankly, my personal opinion that it is a lack of respect for the body he once belonged to.

Let me go through just one or more points. As a House Member,

not having served in the Senate—they let me come over there once

in a while and lobby you all; but that is about it—you have some

interesting rules that are a little different than ours. First of all,

a motion to adjourn is still a high standard or a low standard, if

you will. In other words, it is immediately taken. So a motion to

adjourn is always in order. And could, in fact, at any time, any

Member could move to adjourn, even during the pro forma session,

unless there was a specific exemption agreed to; right?

Senator LEE. That is correct.

Chairman ISSA. So any Member of the Democratic Party, not just

Senator Reid, could have moved to adjourn in order to create a legitimate recess; correct?

Senator LEE. That is correct. I suppose that doesn’t account for

the need that they would have to get permission from the House

to adjourn for more than 3 days. But separating that question out,

yes.

Chairman ISSA. But of course, Senator Reid could have put no

one in the chair on the 3rd day; isn’t that correct?

Senator LEE. Yes.

Chairman ISSA. No power could have forced him to be in the

chair?

Senator LEE. I am not familiar with any court or any precedent

from the Supreme Court that would have led to a court injunction

telling Senator Reid he had to do that.

Chairman ISSA. So every single Member of the majority in the

Senate, including Senator Reid, had the ability to create a different

set of circumstances and did not?

Senator LEE. Yes, sir.

Chairman ISSA. Additionally, anything that was passed was

passed by unanimous consent, correct?

Senator LEE. Correct.

Chairman ISSA. So the fact is the December 23rd vote, any Member of the vote Senate—yourself included—could have come and

taken that down. It was an affirmative decision that that agree-
49

ment was going to happen. It wasn’t an accident. It wasn’t like the

UC was a surprise, and people just weren’t there.

Senator LEE. That is correct. Any one of us could have objected

and stopped that from proceeding.

Chairman ISSA. Now you are a little different in the Senate than

the House. I know that because I have worked with Senate staff.

Senate staff vets, as I understand, every one of these UCs. And unless the Senate staff responsible for the Senator either speaks to

the Senator or makes that commitment for some reason on behalf

of the Senator, UCs don’t happen, right?

Senator LEE. That is correct.

Chairman ISSA. You have the process of holds, if you will. Everything starts with a hold, and then you release them?

Senator LEE. Yes.

Chairman ISSA. So if there had been an actual request for a vote

during the pro forma session, a request for a UC, that would have

come up, each of these appointees could have come up as a request

for a UC and a Member would have had to show up physically and

object to that appointment. And Senator Reid held no such vote.

Senator LEE. An objection could have been made, that is correct.

Chairman ISSA. But a Senator would have to be there to make

the objection?

Senator LEE. Well, that is probably a discussion for a different

day. An objection probably could be made. A hold probably could

be imposed on a unanimous consent request without actual physical presence, but the objection would likely have triggered a requirement for a physical presence.

Chairman ISSA. My borrowed time has expired. But you have

been very illuminating.

With that, we go to the gentleman from Virginia. And before we

go to Mr. Connolly, I would ask unanimous consent that Democratic objections to recess appointments, which is a five-page document, be placed in the record, including the January 24, 2012,

quote from the gentleman from Virginia, Mr. Connolly.

Without objection, so ordered.

[The information referred to follows:]
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Chairman ISSA. With that, the gentleman is recognized for 5

minutes.

Mr. CONNOLLY. I thank the chair. And the chair is right in introducing into the record my longstanding view that recess appointments by Presidents of both parties have frankly long been abused.

I don’t believe that the Constitution envisioned recess appointments being routine things. They were designed for a time when

Congress was not in session for long stretches of the calendar.

But that requires bipartisan cooperation to fix that problem. It

has nothing to do with this President, per se. It is a longstanding

institutional and constitutional issue. I would hope we could find

bipartisan common ground. So I actually find myself sharing many

of your misgivings, Senator Lee, about a recess appointment.

But having said that, I have listened respectfully to your point

of view, and I respect it. I hope you will listen to mine.

I believe that a statement by 44 Republican Senators in the U.S.

Senate announcing that they are going to try to thwart the implementation of a duly passed law—the Constitution envisioned how

a law gets passed. It never envisioned that you got a second extra

constitutional bite at the apple to thwart its implementation when

you didn’t have the votes to defeat it. And I believe that, frankly,

that letter precipitated this issue and that you got what you deserved. And it set us all back, frankly, for those of us who have,

as the chairman just indicated in introducing into the record, misgivings about recess appointments as a separate issue.

And so I guess, with all due respect, I consider this a rebuke because I think it is an extraordinary thing, a priori to announce no

matter what, no matter the virtues of the appointees, no matter

that fact that we have to respect that a law was duly passed and

signed into law by the President of the United States as the Constitution calls for, we are going to thwart it. We in advance are announcing we are going oppose all appointments to prevent the implementation of that provision of the law. And I just think that is

wrong. You win; you lose, fair or square.

And you have indicated that many of your constituents are nonplussed about this action. I would hope they would be equally nonplussed at the extra constitutional decision by you and so many of

your colleagues to thwart a duly implemented law. That is my

opinion, and I yield back.

Chairman ISSA. Before yielding back, would the gentleman also

want to ask about the NLRB? You dealt with one. Did you have

questions on the NLRB appointments?

Mr. CONNOLLY. I don’t have any questions, Mr. Chairman. I just

issued my statement. But I would say the same applies frankly to

that as well.

Chairman ISSA. The gentleman yields back.

We now go to the gentleman from Michigan, Mr. Amash, for 5

minutes.

Mr. AMASH. Thank you, Mr. Chairman.

I simply want to thank one of my favorite Senators, Senator Lee

for being here.

And I am going to yield my time to Mr. Guinta.

Mr. GUINTA. I thank the gentleman.
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I thank the Senator for being here this morning. Two points for

the record. I think he is here first because he asked to speak on

the subject matter, and we want to hear what he has to say. Second, he has a rather unique perspective on these issues with his

background and having opportunities to clerk in the Third Circuit

Court as well as the Supreme Court, is my understanding. So I

thank you for your comments.

I want to be clear. I don’t support what the President did. I have

looked at this issue. I have spent quite a bit of time looking at

precedent, and I think this President in this circumstance overstepped his authority.

My understanding—and please correct me if I am wrong—is that

it is the Senate and only the Senate—not the President of the

United States—that has the capability to determine when the Senate is in recess. Is that your understanding?

Senator LEE. Yes. That is my understanding based on the text

of the Constitution, based on the history of the Constitution, its

original understanding, and on custom and practice as it has

evolved over the last two centuries. We are expressly given the

power, as is the House, to determine the rules for our own procedure and internal governance. And we do that.

Mr. GUINTA. So the President is relying, in making this recess

appointment, on the Office of Legal Counsel’s justification in a

memo that they issued. And their memo essentially said that the

OLC effectively asserts that the President may unilaterally determine if and when the Senate is in recess for purposes of exercising

his recess appointment power.

So my read is that the President is looking at his legal counsel’s

opinion that says he can decide when the Senate is in recess. However, there is clear precedent that states, only the Senate has that

authority. So that is problem number one with this process. The

other two points I would like to make is that back in 1993 during

the Clinton administration, the Department of Justice filed a legal

brief in Federal court for the District of Columbia arguing that unless a recess lasted for 3 days, a President could not make an appointment, more than 3 days. The third point I would make is, in

April 2010, then-Solicitor General Elena Kagen acknowledged before the U.S. Supreme Court that ‘‘the Senate may act to foreclose

the President’s recess appointment power by declining to recess for

more than 2 or 3 days at a time over a lengthy period. Presidents

have not, in recent decades, made recess appointments during

intrasession recesses lasting fewer than 3 days.’’

So there is most recent opinions and precedents set by those who

would likely support the philosophies of this President who have

acknowledged that what this President is doing is wrong. And to

speak to what the gentleman from Virginia mentioned is that this

should be about appropriate powers of the executive branch. It

should not be about Republican or Democratic philosophies. It

should be about the country and what is good for the country. And

I believe that all of us in the legislative body as well as in the executive need to adhere to the precedents and the laws and the rules

that we have established. And without doing that, these bodies

cannot gain greater credibility with the country. And I would submit that it makes sense for the President of the United States to
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acknowledge in this circumstance he erred and that he should resolve it to reinstate the faith in the process that we have.

Senator LEE. If I can respond to that. Thank you very much,

Congressman.

Yes, I share your concerns. And I have reviewed the Office of

Legal Counsel’s 23-page single-spaced memorandum. It is well

written. It is well researched in the sense that it points out the

precedents. But it reaches the wrong conclusion, and it reaches a

conclusion that is at odds with the very precedents to which you

refer and to the very logical positions to which you refer. And as

I am responding to that, I would also like to respond simultaneously to Congressman Connolly’s point because I think they kind

of lead to the same conclusion here.

I understand and I share the frustration that so many Americans

have expressed over the fact that there are delays at times, sometimes long delays, sometimes delays that don’t get resolved until

after that Congress is over or after that President is no longer in

power. That is frustrating, especially for those of us whose names

are on the line to be confirmed.

As frustrating as this is, constitutional government is necessarily, by its very nature, frustrating. It was designed to be frustrating in the sense that it was designed to make sure that it

wasn’t so efficient that we just passed laws really quickly. Efficiency doesn’t always lead to liberty, and frequently, it leads to exactly the opposite position.

So the fact that this process is frustrating, the fact that there are

at times delays, the fact that the delay has at some times been

abused—even though it is the prerogative of the Senate to do

that—does not and cannot ever justify circumventing the Constitution. And just saying, this is really necessary; this is really important. I am, therefore, going to do this. At every turn, when we have

tried that in this country, it hasn’t ended well. And I am determined not to allow that to happen here. I am not about to stand

idly by as this precedent gets established knowing full well that it

could and, unless we do something about it, it will be abused in the

future not just by Democratic Presidents but by Republican Presidents.

Mr. GUINTA. I thank the Senator for his comments and I thank

the gentleman from Michigan for yielding.

Mr. MCHENRY [presiding]. Mr. Welch of Vermont.

Mr. WELCH. Well, I thank Senator Lee for being here. I just have

a short statement.

You know, there is an air of unreality about this for me, and I

find this extremely discouraging. Mr. Guinta is right. People want

us to abide by the rules.

Senator, you were making a very passionate statement about the

rules. But this institution of Congress and the House and the Senate is seen rightly by Americans as totally dysfunctional, and we

are in the process of proving the point.

I mean, there is a fundamental difference between deliberation

and destructive delay. That is my view, and I think it is the American people’s view. The rules that we work by in the House, the

rules that you work by in the Senate, those are designed by Senators and House Members, and they suit our interests. They don’t
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get elevated to the level of constitutional rights. They are rules

that oftentimes serve the interests of the majority party in both

bodies.

The problem we are having here is Democrats can’t work with

Republicans in either body. The Senate, I believe, is seen as having

a series of procedures that have one purpose, and that is to delay

and not get to an answer to move forward on the business that

America needs to be done. I mean, it is an astonishing spectacle

what we are doing in this Congress in refusing to do the people’s

business. We haven’t passed a budget. And I don’t point the finger

of blame at one party or the other. This institution just isn’t working.

I mean, it has had a history in the past where it has been able

to make decisions. So when we have what sounds, to me, like a

very academic discussion—and I put myself in the seat of a constituent of mine who is wondering, what is it we are talking about;

we have not passed a budget. That is disgraceful. And 2 years ago

when the Democrats were in the majority, the finger of responsibility was pointed by my colleagues on the Republican side at our

failure to do it. Now the Republicans, who are in the majority at

least in the House—not in the Senate but have an active and powerful minority, we haven’t been able to pass a budget. This is very

destructive.

So, at the end of the day, you may be right in your legal argument, but it is not going to move this country forward, whether you

are right or President Obama is right. So I just think we have to

move past these procedural maneuvers that we create to allow us

to assert our will and make decisions, do it in an up-or-down vote,

allow there to be clarity for the American people where each of us

stands. If they don’t like the vote that we made, they have the opportunity in the next election to send somebody else here to do it.

So thank you for being here, but I don’t think we are getting anywhere.

Senator LEE. If I can respond to that, Congressman Welch. I appreciate your comments. Your concerns are very legitimate, and I

share very many of them.

Let me reemphasize that there are delays built into the system.

Part of the delay that is built into the system is constitutional.

Part of it is based on the rules of each body, and the rules of each

body are of course constitutionally the prerogative of each body.

The President of the United States, when he gave his State of

the Union address last week in your Chamber here, told us that

what he would like is to see a rule change and a policy change in

the Senate that will lead to an up-or-down vote for each nominee

within a finite period of time. That, of course, is ultimately a decision for the Senate to make. But I think that is where the debate

and discussion over this ought to be.

In other words, the frustration that he has, that Members of this

body have, that Members of the Senate have or the American people in general have ought to be directed toward a discussion about

whether or in what way the Senate might change the rules of its

procedure and not toward saying, we are frustrated with those

rules, we are frustrated with the way that they manifested themselves in delay, and we, therefore, want the President to ignore the
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Constitution. That final conclusion isn’t the natural logical legitimate product of saying, we are frustrated. We ought to have a discussion about the rules themselves and not simply capitulate and

say, let’s give up, and the President can violate the Constitution if

he wants.

Mr. WELCH. Thank you, sir.

I yield back.

Mr. MCHENRY. The gentleman yields back.

Mr. Guinta is recognized for 5 minutes.

Mr. GUINTA. Thank you, Mr. Chairman.

I would just simply add that while I don’t disagree with the gentleman from Vermont’s comments relative to let’s focus on the legislative side on action and moving the country forward relative to

policy, it also is equally important that we reiterate to the country

that we are following our own rules. I mean, I think we teach our

families, our children that rules are important. I get to go home on

weekends and see my third grade daughter’s basketball games.

And there are rules. And it is a very important lesson to teach our

children to abide by them. And if we simply can’t do it as—what

I think is an incredibly important body, the Congress and the

President, then what kind of message is that sending to the Nation?

So I certainly appreciate my colleague’s position relative to the

legislative requirements of both bodies. And I would agree with

them and urge both bodies to work together on a thing like a budget, the appropriations bills. By the way, maybe you could remind

the Senators that we did, in the House, pass a budget last year,

and we are going to pass another one this year. And we would love

to have the Senate respond. But I would like to yield the remainder

of my time back to the chair.

Mr. MCHENRY. I certainly appreciate my colleague yielding.

You know, it is interesting, my colleague on the other side of the

aisle said, your legal argument might be right. It is sort of an interesting point of debate. What’s the Constitution among friends,

right? That old saying.

Let me ask you a couple of basic questions: How many Republicans are there currently in the U.S. Senate?

Senator LEE. 47.

Mr. MCHENRY. And 47 Senators, is that a majority of that body?

Senator LEE. No.

Mr. MCHENRY. Interesting. Okay. After the 2008 election—I

know you weren’t a Senator—but weren’t there 60 Democrats in

the U.S. Senate?

Senator LEE. Yes.

Mr. MCHENRY. And if you have 60 of any Senators together, do

they even have to speak to the other 40 Senators in the elevator?

Senator LEE. Not much.

Mr. MCHENRY. Right. So let’s just understand historically where

this President has been. He had a supermajority in the U.S. Senate

after the 2008 election. He was able to pass the stimulus through

the House, through the Senate. Didn’t get a single vote from Republicans in the U.S. House. It became law. This President has had

a majority in the U.S. Senate for 4 years. He has had a majority—

a supermajority in the U.S. House. Well, let me restate that. He
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had 59 percent of the U.S. House after the 2008 election. So this

idea that he is complaining about the Congress’ inaction is pretty

absurd. So let me go to the CFPB.

The President’s lawyers said that there is a great risk, a litigation risk, that anything the CFPB does would be challenged based

on the constitutionality of this appointment, anything the National

Labor Relations Board does could be challenged legally based on

this President’s, I think, unprecedented action. You know, looking

at that litigation risk and the amount of uncertainty that creates

for small businesses, even big businesses and the impact it has on

the economy, that is sort of a net impact of this debate that we are

having. Now I know you are a constitutional scholar, but I also understand you represent the folks in Utah who are concerned, like

my constituents, about jobs. This does have an impact on the

American people in a real way. It is not some academic debate.

But you referenced the fact that the Senate is in session every

3 days when you are in pro forma session. If the House doesn’t

agree to adjourn, why does the Senate meet every 3 days? Where

does that come from?

Senator LEE. Article I, Section 5, of the Constitution provides

that we may not adjourn without the consent of the other body for

a period of time longer than 3 days.

Mr. MCHENRY. Okay.

Senator LEE. And because the House of Representatives didn’t

grant us to adjourn for a period of time longer than 3 days, we had

to continue to meet every 3 days.

Mr. MCHENRY. Okay. So when does this date back to, this action

by the Senate, in practical impact. I know it was written——

Senator LEE. The last roll call vote on the floor of the Senate

prior to the Christmas holidays was taken on December 17th, as

I recall.

Mr. MCHENRY. Okay. So for the next almost month, it was pro

forma session?

Senator LEE. Correct.

Mr. MCHENRY. As it was in the House?

Senator LEE. Correct.

Mr. MCHENRY. Talk about this litigation risk, the amount of uncertainty that these actions will create in our economy.

Senator LEE. Well, at a time when unemployment is at around

9 percent and at a time when one of the things that is chilling our

economy and chilling the creation of growth of jobs is uncertainty

and at a time when Americans and American businesses face regulatory compliance costs at an astounding rate of about $1.75 trillion

a year, almost equal to the collective tax burden of the American

people, the one thing that we don’t need is more uncertainty in our

regulatory structure. The fact that American businesses may become subject to an order issued by the NLRB or the CFPB at any

time that may or may not be valid, that could be suspect in terms

of their validity and, therefore, subject to litigation, litigation that

would be costly and would prolong the uncertainty associated with

their orders but litigation that would become absolutely necessary

because in many instances, it might be a make-or-break moment

for the company, this is exactly the kind of thing that will make

our already dismal unemployment problem substantially worse. So
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this has real ramifications. This is not a hypothetical injury. This

is not an abstract problem. This is a problem that affects real

Americans, who are just struggling to get by, struggling to find

jobs, struggling to find full employment and good compensation.

And this compounds that problem many-fold.

Mr. MCHENRY. Thank you, Senator Lee. And thank you for your

testimony.

Just to mark this down as a Member of the House, you know,

we always have a bit of—we chafe a bit at the actions of the Senate

or the inactions of the Senate. But that is not a new thing, nor is

that a partisan thing. It is as old as the Republic itself. The Senate

is designed to be inefficient; and by God, it lives up to that expectation.

So, with that, I recognize Mr. Clay, the gentleman from Missouri,

for 5 minutes.

Mr. CLAY. Thank you, Mr. Chairman.

I really have no questions for the Senator. Thank you for coming

today.

But let me say that I do have an observation about the process

known as recess appointments. Let me say, thank God for recess

appointments, that we were able to appoint Richard Cordray as the

leader of the CFPB because it is the law. Dodd-Frank is the law

of the land. And it is necessary that we observe the law. We are

a country of laws. And the function of the CFPB is to protect American consumers, and to have to succumb to the will of a minority

of Senators who don’t want to see this law implemented, the American people know what you are doing.

And pretty much this President has pulled the wool off of what

you are trying to do. We know you are trying to thwart any

achievement by this administration for political purposes. And so

let me again restate, thank God for recess appointments and also

for the NLRB, so that they can be up and running and functioning

as a full body to protect the workers in this country.

So, Mr. Chairman, I have no questions, and I yield back the balance of my time. And it doesn’t require a response.

Senator LEE. Mr. Chairman, if I could respond to that.

Mr. CLAY. It doesn’t require a response, Mr. Chairman.

Mr. MCHENRY. Well, I certainly appreciate it. And I think the

witness has an opportunity to answer.

Senator LEE. Thank you, Mr. Chairman.

I appreciate the fact that we have laws. And I need to point out

that from time to time, Congress will pass a law and then not fund

the office in charge of enforcing that law. It actually happens with

some regularity. It has happened when Republican Congresses

have enacted one law and subsequent Democratic Congresses have

refused to fund it. The fact that a law is created but not funded

or the subject of a full appropriations by a subsequent Congress is

not lawless. It is part of the democratic institution.

And to give you an example, in your home State of Missouri,

Congressman Clay, it is urban legend, at least, that it was once

legal to shoot a Mormon in Missouri. I don’t know whether that

was in fact embodied in a statute. It might just reflect the extermination order issued by Governor Lilburn Boggs indicating that all
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Mormons, members of my faith, could be exterminated. I am grateful that that wasn’t funded, that that wasn’t executed.

Now this is a very different kind of law than that one. But the

fact that something is put into law one day doesn’t eternally automatically inexorably obligate subsequent legislative bodies to fund

activities occurring pursuant to that very law. And that is exactly

what it means to be in a constitutional republic. We elect people.

Those people pass laws, and then we make decisions about how the

government is to be funded.

Mr. MCHENRY. If my colleague wishes to respond, he still has

time.

I certainly appreciate it. And I would say to my colleague, if the

chair may say, I will enjoy reciting your quote today when we have

a Republican President. And perhaps that will happen. Who knows.

But I certainly appreciate my colleague’s indulgence there.

With that, Mr. Lankford is recognized for 5 minutes.

Mr. LANKFORD. Thank you, Mr. Chairman.

Senator, thanks for being here. And I can understand how the

President could be frustrated with the Senate. You, as a Member

of that body, I am sure you have even more frustration with the

Senate than even we do in the House, if that is even possible.

Senator LEE. It is.

Mr. LANKFORD. After 1,000 days of waiting on a budget to come

out of the Senate, we are all frustrated with the Senate and trying

to figure out what is going to happen there.

The question revolves around, do the ends justify the means,

though? Can we say, CFPB is going to do a good thing, so though

I know it is not appropriately and constitutionally legal, we will get

something good at the end, so the ends will justify the means. Can

we do that in a constitutional republic?

Senator LEE. No, we can’t. The Constitution is all about the

means. That is the whole reason for having a Constitution. It determines the means by which we act. No ends can justify a willful

disregard for the restrictions of the Constitution.

Mr. LANKFORD. Well, let me ask you a followup question then:

Who gets to define what a recess is or what adjournment is? Does

the executive branch define for the legislative branch what is an

adjournment and what is a recess? Or does the legislative branch

define what is an adjournment and what is a recess? Who gets to

pick that?

Senator LEE. The Senate gets to decide when it is in recess.

Mr. LANKFORD. So the President can step in and say, I now declare you in recess?

Senator LEE. That is correct. He doesn’t control our part of the

government, as much as he might wish it would be true, as much

as probably every President might have wished would be true.

Mr. LANKFORD. So, in 2007, when Senator Harry Reid kept the

Senate in pro forma session to prevent the Bush administration

from appointing people in a recess appointment, and the Bush administration acknowledged that by not appointing people, saying

the Senate has defined they are not in recess, so they are not in

recess, when this administration says, no, I don’t accept the Senate’s definition of recess, we are going to redefine recess; what

precedent does that set?
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Senator LEE. Well, it sets a new precedent, one that I fear could

easily turn into a one-way ratchet in which subsequent Presidents,

Presidents of both political parties, will be unwilling to retreat

from that new high watermark established as a Presidential prerogative. That is what concerns me here.

Mr. LANKFORD. That is what concerns me as well.

The President has also said that they have communication from

the Senate so it is a recess. So, basically, if the Senate didn’t talk

to me and send me messages, did any bills pass between the 17th

of December and the 22nd of January? Was there any communication between the Senate and the President?

Senator LEE. Yes, there was. And in fact, there was very significant piece of legislation passed, one that the President urged the

Congress to pass, on December 23rd that dealt with the payroll tax

holiday extension.

Mr. LANKFORD. Correct. So the President’s statement that there

is no communication happening is not accurate; there was communication happening. These pro forma sessions did allow for communication; in fact, did allow for business. A statement was made,

this is not for business purposes. Obviously, the payroll tax extension did pass. It seems like business to me.

Senator LEE. That assertion is neither factually accurate nor correct as a matter of constitutional law.

Mr. LANKFORD. Did the Senate ever have hearings on the candidates of NLRB, all three of them?

Senator LEE. No, it did not. And as for two of them, there was

no time where they could have even possibly convened such a hearing.

Mr. LANKFORD. So the advice and consent, not only was there not

even a release of the names; there wasn’t even a possibility of a

hearing. So to say this is a recess appointment, you have no possibility for a hearing. So this wasn’t just a matter of, I submitted

them earlier; you hadn’t acted on them. This was a matter of, oh,

while you are out of town, I am just going to put two people into

office for the next 2 years?

Senator LEE. That is correct.

Mr. LANKFORD. I have a letter from the Associated Builders &

Contractors, which I would like to enter into the record, if that is

possible, Mr. Chairman.

Let me read one statement here. This is from the Associated

Builders & Contractors, ‘‘Not only will this radical NLRB antiworker and anti-business actions further damage prospects of investment in job growth, but questions about the NLRB’s authority

to act will invite litigation and ambiguity at a time when we need

it the least.’’

I would like to ask unanimous consent that this letter be entered

into the record.

Mr. PLATTS [presiding]. Without objection.

[The information referred to follows:]
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Mr. LANKFORD. I have serious issues, which I can hear from you

as well, because of the precedent that this sets. It sets a precedent

that a President at some future date can reach into the Senate and

define when they are on recess and when they are not and who he

can appoint and who he cannot and extend them in a January

timeframe to try to get 2 years.

With this precedent, if it stands, I don’t see anything in the way

from some future Memorial Day weekend the President saying, the

Senate is not communicating with me over this long weekend. I am

going to fill every court vacancy across the country. And they will

be there for the next 2 years, and you can’t stop me. Do you see

anything in this that would stop that?

Senator LEE. Logically, it would be a very short hop, indeed,

from the OLC memorandum justifying or purporting to justify

these recess appointments and the kinds of recess appointments

that you described occurring over a weekend.

Mr. LANKFORD. Okay.

Chairman ISSA. Would the gentleman yield for one quick question?

Mr. LANKFORD. Yes, I absolutely will yield.

Chairman ISSA. Mr. Connolly sort of berated and told you of his

disapproval. Who would have or could have—not the 44 or the 47—

who could have in fact held hearings—particularly let’s talk about

the NLRB. Who schedules those?

Senator LEE. The committee.

Chairman ISSA. And the committee is controlled by?

Senator LEE. Democrats.

Chairman ISSA. And did they schedule a hearing on NLRB appointees?

Senator LEE. At least not with respect to the two that were nominated on December 15.

Chairman ISSA. And who could have scheduled the vote on the

first one?

Senator LEE. Democrats in the Senate.

Chairman ISSA. And it wasn’t the 44 that stopped that, was it?

Senator LEE. Correct.

Chairman ISSA. Thank you.

I yield back.

Mr. PLATTS. The gentleman’s time has expired.

I yield myself 5 minutes for the purpose of questions.

Senator Lee, I certainly your appreciate being here with us and

your leadership on this important issue. My colleague from Oklahoma concluded with the main focus of my questioning in that the

precedent here is pretty dramatic, if we do not undo what has occurred.

It is my understanding that the Department of Justice memorandum that in essence said that the President has a unilateral authority or ability to decide when you, the Senate, are in or isn’t is

unprecedented in this sense. Is that your understanding as well?

Senator LEE. Yes. I am aware of no precedent anywhere. And

there was none sited either in the OLC memorandum or in any

other source that I am aware of identifying any other Presidential

recess appointment occurring under this set of circumstances.
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Mr. PLATTS. And I think in your testimony, you emphasize that

this isn’t about partisan politics. This is about the institution of the

Senate and, probably most importantly, the checks and balances

that our Founding Fathers so wisely included in the Constitution

in protecting the American people from, in essence, tyrannical rule

and that that be understood here because you know today obviously the partisan nature of Washington and the media’s focus on

that can maybe shift the focus here from this is truly about the

Constitution being upheld. And if we are not diligent in ensuring—

in this case, the Constitution is upheld—we set a precedent, as the

gentleman from Oklahoma said, that why, just in this instance,

why isn’t it, hey, you adjourned on a Thursday. We could plan on

coming back Monday. And the President, whomever would be in

that office in the future, say, hey, you are out of session; you are

in recess for the weekend. I can appoint whomever I choose. That

would eliminate the checks and balances and the advice and consent.

Senator LEE. Yes. That is exactly right. And this is what the

Founding Fathers had in mind when they decided—they considered

but decided against giving the President the unilateral authority to

appoint nominees without Senate confirmation because ‘‘The people

will think we are leaning too much toward monarchy.’’ We were

getting away from a system of monarchy in Great Britain. We

didn’t want one here, and that is why we did this. You are absolutely right in suggesting this is a slippery slope and that in the

future, regardless of whether it is a Republican or a Democrat in

office, this could become a problem, and it is a problem that could

lead to the rendering a nullity or a virtual nullity the Senate’s confirmation prerogative.

Mr. PLATTS. And while I certainly respect my colleague from Missouri’s statements about his opinion that the Senate’s politically

motivated minority Members, Republican Members in blocking—

even if that was the case, although I think the fact that there was

not even a hearing held on the two nominees of the NLRB appointees, that even if that was the case, that would be the prerogative of a Senator. And ultimately, the public would decide whether

that is a responsible approach or not. But it is still the constitutional right and prerogative of the Senator to block a nominee for

whatever reason they choose. And ultimately, the voters will decide

whether they were responsible in the conduct they engaged in. But

it is not the President’s prerogative to say, well, I am going to

usurp that authority and unilaterally just do what I believe, you

know, what I want to do.

So, Senator Lee, I again want to thank you for your leadership

on the issue. And your constitutional expertise and knowledge that

is so important to this debate and the focus that this is not about

partisan politics. This is about the Constitution being upheld and

not allowing a dramatic, wrongful precedent to be set that could

have, you know, lasting implications for the checks and balances of

our governing process here in America.

So, with that, I will yield to the gentleman from Michigan, Mr.

Walberg, for the purpose of questions.

Mr. WALBERG. Thank you, Mr. Chairman.
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And thank you, Senator Lee, for being here. I appreciate your

service and I appreciate you being outspoken on constitutional

issues of importance.

With no ill intent toward you and your service because, as I said,

I appreciate your activity. But it has been said much by those of

us Members of the People’s House how frustrated we are with the

do-nothing Senate, a literal do-nothing Senate; 1,007 days without

passing a budget, without dealing with over 30 bills that we have

sent for jobs purposes, and then listening to some of the cynical

pandering by some of my colleagues on the other side of the aisle

saying that we are not doing anything with jobs. It is frustrating.

And I go back to my district, and I hear the frustration of my people, who are frustrated not simply with Democrats but with Republicans, with us all, that things aren’t getting done.

It is challenging to take that, knowing that we are attempting

to do it. So I can certainly surmise how the President might feel

when he sees his Senate not providing affirmation to his appointments, confirming them and letting them go on with what his purpose is, what his intended process is about and what his objectives

are. I can understand that.

But here in the People’s House, we understand more maybe than

any other branch what that means, that we are given the pleasure,

privilege, honor, and duty of representing the people according to

something more than just whims and wishes. And I would love to

say to the people back in my district at certain times when I am

not thinking clearly, well, we will just go on and do it ourselves.

But the Constitution doesn’t allow that. You made that very clear.

Senator Lee, could you explain to us as clearly as possible why

there is an important process called confirmation that only the

Senate is given to do and what important outcomes that has for the

people of this great country under the Constitution established before them.

Senator LEE. Executive branch officials, particularly in this day

and age and including and in particular these nominees, hold positions that wield enormous authority, law enforcement authority

and, in some instances, somewhat regrettably, in my opinion,

wholesale policymaking authority that can almost be likened to the

authority that we wield as legislators.

But regardless of how you feel about the underlying statutes that

give enormous policymaking authority to executive branch officials,

they wield tremendous authority, as do the Federal judges, who

also have the go through the confirmation process. So the Founding

Fathers felt that it was absolutely imperative that these nominees

receive in all instances where the Senate was not in recess, for purposes of the recess appointments clause, the rubber stamp of at

least one House of Congress. And for whatever reason, they chose

to give that to the Senate. And because they did, we take seriously

our role to make sure that the President’s nominees get vetted, to

make sure that any who do not have the support of those voting

in the Senate don’t get confirmed and don’t move on.

I think the best way I can summarize my answer to your question is just to say, it is important because it is what the Constitution requires. We have to follow the Constitution. Even where it is

frustrating, even where it doesn’t make sense to us, even where it
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might thwart the objectives of our President, we have to follow

them. And when we don’t follow them, we set a dangerous precedent. Because if we are willing to ignore them for one purpose or

another, for the political convenience of the President or someone

else, then we ourselves remain vulnerable in every other area. We

rely on the Constitution to protect our free exercise of religion, free

speech, and everything else, every other one of the rights that can

be found in that Constitution. We have to honor its procedures as

well or else they won’t be there for us when we need them because

we always need them.

Mr. WALBERG. We always need them. And the Senate, unlike the

House, at least originally intended—I know it has been amended

with the 17th Amendment, a representative of the States, a broad,

a broad concern, not just individual people in concern but a broad

concern for the whole future of this great country, as undivided

States and peoples together.

When I hear the President in the State of the Union address talk

about, we need to get this done; and if you won’t do it, I am going

to do it; that is a concern. And I think it is being acted out and

expressed in this process here of nonrecess recess appointments,

stepping down on the Constitution, committing a constitutional crisis, and denigrating the body that is responsible for confirmation,

oversight, care for what this country needs, and making sure that

we don’t have a monarch.

So I know my time has expired, but I certainly appreciate your

commitment to the Constitution and affirmation today of its primacy. Thank you.

Chairman ISSA. Seeing no additional questions, I will thank the

Senator with one closing question or comment—wait a second.

Well, we will have one more, but before we do that, just quickly,

I suspect that the reason that the Founding Fathers gave you the

requirement for advice and consent is they intended you do a lot

less than you are doing with the people’s work of the House. I

might just mention that, they didn’t expect you to screw around

with appropriations quite the way that you did.

But having said that, I just wanted to ask you one quick question. If we wanted as the President wants up-or-down vote on every

one of his appointments and he wants them in a timely fashion,

would it be equally fair for you to consider every vote of the House

that we send over that dies in the Senate and for us to consider

every Senate bill—forced to consider every Senate bill in its form

that comes over from the Senate? Isn’t it that sort of entire bucket

of, it is the way it is, not the way we would like it to be?

Senator LEE. Yes. You know the fact is, governments are made

up of individuals, especially in a representative government like

ours. Individuals have opinions, and those opinions in the case of

elected officials are based most frequently on the opinions of those

they represent. We do have a country in which people disagree. We

are not always going to have agreement. So, yeah, it is true, I suppose, if you take the same logic that would go into saying, let’s

have a rule change with regard to prompt automatic consideration

of all nominees, the same logic might suggest prompt automatic

vote and consideration by the House of all Senate legislation and

vice versa.
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Mr. PLATTS. I thank you. We now will get to our final questioner,

if you have the time to give us 5 more minutes.

Thank you, Senator.

We now recognize the gentleman from Arizona, Dr. Gosar.

Mr. GOSAR. Senator Lee, thank you so very much.

This just brings to a point of reference that this isn’t the only

thing that you may have seen as a violation of our Constitution because it seems that we feign these rules when we want them and

then we disdain them when we choose to avoid them. Are there any

other things that you have seen this administration do besides

these appointments that have bothered you in regards to the Constitution, violation of the Constitution rules and regulations?

Senator LEE. I have had a number of disagreements with this administration both on matters of policy and on matters of constitutional interpretation. Let me just focus on two or three. One dealt

with the President’s decision to engage the United States in something that I consider a war, in Libya, without a declaration of war

from Congress. That is a congressional prerogative, outlined in Article I, Section 8. And not only did he not get a declaration from

Congress, but he didn’t even consult Congress. He sort of advised

a few leaders in Congress as the jets were on their way to undertake that action. But he never got a declaration of war. I wasn’t

real pleased with that.

Nor was I pleased with the President’s decision to sign legislation that I read as undermining the Fourth, Fifth, and Sixth

Amendment rights of individual Americans that can be read, as I

read it, to give the executive branch the power to detain indefinitely even U.S. citizens without trial, without a formal grand jury

indictment, without the right to counsel or trial before a grand jury

based on an allegation that they have become enemy combatants.

He signed that while protesting it, but I disagreed with his decision

to sign it.

I certainly disagreed with the policy and the constitutional analysis that went into the passage and signing by the President of the

Affordable Care Act, and I disagreed with the constitutional analysis outlined in this 23-page memorandum written by the Office of

Legal Counsel. Very good lawyers, some of the very best I know.

And they did the best job that they could. But they came to a conclusion that is wrong.

Mr. GOSAR. So, Senator, if you trump the Constitution, the

checks and balances are relatively slow, are they not?

Senator LEE. Yes.

Mr. GOSAR. So you have the monarchy looking at the ability to

enforce or push something forward without having a means to correct it very quickly.

Senator LEE. Yes. Yes, that is right. And the fact that it is slow

is by design. That is how we prevent the undue accretion of power

to a chief executive, which the Founding Fathers knew presented

some danger to individual liberty in America. And that is why we

split up the power of the chief executive.

Now it is interesting, every time our Federal Government has expanded, and every time the authority of the executive has expanded at the expense of the Congress, and every time Federal authority has expanded at the expense of the States, you have always
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had one common ingredient: A President, Presidents like Woodrow

Wilson, especially Woodrow Wilson during and in the lead-up and

in the aftermath of World War I, who have said, look, these are

desperate times, and I have to be able to act, and I can’t be slowed

down by this elected body, who doesn’t want to do my will as quickly as I want it to do. If you look back to that era, you will see that

a lot of individual liberties were violated, and you will see that the

government expanded at the Federal level at the expense of the

States. You will see that the President’s authority often expanded

at the expense of Congress.

We need to not make those kinds of mistakes again and again

and again. This is the kind of thing that, if left unchecked, will easily turn into another one of those mistakes.

Mr. GOSAR. I caution my colleagues on the other side of the aisle

of upholding rules. I hope they remember that tomorrow when we

have our special guest.

I would like to yield the balance of my time to Mr. Gowdy, if he

would so like it.

Mr. GOWDY. I thank the gentleman from Arizona.

I want to thank you, Senator, for how generous you have been

with your time this morning. Two things, and I will shut up and

let you take the remainder of the time.

Assume that these appointments are held to be void ab initio 12

months from now, 18 months from now. What is the practical impact of having a year and a half worth of litigation that has been

undone? And if you would please consider, along with your colleagues likeminded or otherwise in the Senate, seeing if you do

have standing to stand up for the constitutional process.

Senator LEE. Right. Thank you, Congressman Gowdy.

The first impact I think will be that the parties will have undertaken a significant effort in litigating the validity of orders issued

by the NLRB and the CFPB. Hopefully no one company will have

to litigate orders issued by both entities, but I suppose anything is

possible. In addition to the expense and the delay related to litigation, these companies and other companies—even those who may

not be litigated, even those who may just be anticipating an order

but might not receive it during a time period will inevitably have

had to avoid making the kinds of investments that we desperately

need in order to create jobs. It is almost impossible to measure, to

quantify in any precise sense the amount of economic loss that will

come from this. But one thing of which I can be sure is that loss

will come, and it will be significant. So this is yet another reason

why we shouldn’t be doing this.

Sometimes my wife tells our children, just because you can do

something doesn’t mean that you should. Now perhaps the President can do this and get away with it at least for the time being

as a matter of raw political power and will. But the fact that he

can do that doesn’t mean that it will, in the long run, survive constitutional review because I don’t believe it will. And more importantly, it doesn’t mean that he should. There are established procedures that go along with the recess appointment power. It is in the

Constitution. It is there. But he needs to follow the practice, the

procedure that makes sure that it doesn’t swallow the rule. You

can’t let this exception swallow the rule. And that is the risk here.
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He is doing this not just at the expense of individual Senators.

That is not the important thing. He is doing this at the expense

of the people, the people who are living in an economy that is depressed, where job creation is low—in part because of actions like

this that create so much uncertainty in the marketplace.

You have my assurance that I and my Republican colleagues will

continue to explore and attempt to exhaust every available option,

including any that may be available in court. I have been advised

by some legal experts that it is very unlikely that we, individually,

would be able to establish standing. But we know that it is inevitable. And it is true that those subject to the rules will have standing and, at a minimum, will be able to participate as amici curiae

in those actions. So we would like to do that.

Chairman ISSA [presiding]. The gentleman’s time has expired.

Seeing no one else seeking recognition, Senator, what you have

done for us is especially appreciated. It is not often that Members

of the House or the Senate give so much time to answer full questions in their area of expertise.

So, please, have our gratitude, and tell your friends they are always welcome. And with that, we will take about an 8 to 10 minute

recess while they set up the next panel.

[Recess.]

Mr. GOWDY [presiding]. The committee will come to order.

We are pleased to have an extremely distinguished panel. I will

introduce you from my left to right, your right to left.

First, we have the Honorable C. Boyden Gray, who currently

heads the firm of Boyden Gray and Associates here in the District.

Mr. Gray served as White House counsel during George H.W.

Bush’s administration and as an ambassador to the European

Union during President George W. Bush’s administration.

Mr. Andrew Pincus is a partner at Mayer Brown who advises clients on a host of financial services issues and is testifying today

on behalf of the U.S. Chamber of Commerce.

Mr. Michael Gerhardt is the Samuel Ashe distinguished professor in constitutional law and director for the Center for Law and

Government at the University of North Carolina School of Law.

Mr. David Rivkin is a partner at Baker Hostetler and cochairs

the firm’s appellate practice. He served at the Justice Department

in the White House Counsel’s Office during the Reagan around

George H.W. Bush administrations.

Mr. Mark Carter is a partner at Dinsmore where he advises clients on traditional labor and employment law. Mr. Carter has extensive experience litigating before the National Labor Relations

Board.

Pursuant to committee rules, all witnesses, except Members of

Congress, will be sworn in before they testify.

So I would ask you to please rise and lift your right hands.

[Witnesses sworn.]

Mr. GOWDY. May the record reflect all witnesses answered in the

affirmative.

We are pleased to recognize you for your opening statements. I

am sure all of you perhaps have done this before. The lights mean

what they traditionally mean in life. And with that, we would recognize Ambassador Gray.
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STATEMENTS OF C. BOYDEN GRAY, FOUNDING PARTNER,

BOYDEN GRAY & ASSOCIATES; ANDREW J. PINCUS, PARTNER, MAYER BROWN; MICHAEL J. GERHARDT, SAMUEL ASHE

DISTINGUISHED PROFESSOR IN CONSTITUTIONAL LAW, UNIVERSITY OF NORTH CAROLINA [UNC] SCHOOL OF LAW;

DAVID B. RIVKIN, PARTNER, BAKER HOSTETLER, LLP; AND

MARK A. CARTER, PARTNER, DINSMORE & SHOHL, LLP

STATEMENT OF C. BOYDEN GRAY

Mr. GRAY. Mr. Chairman, thank you very much for the opportunity to testify.

You’ve just heard an extraordinary tutorial in a way from Senator Lee covering almost every aspect of this issue, both constitutional and practical. So I am going to try to keep what I say to an

absolute minimum since there’s very little I can add.

I want to start with the point that as far as the CFPB is concerned, there are many who think it’s quite unconstitutional with

the lack of oversight. So the recess comes in without a confirmation

process or bypassing or ignoring the confirmation process and provides even less oversight.

As a practical matter, what has happened here and what will

happen—if you look at footnote 13 of the OLC opinion is that what

the White House has done is basically establish the basis for eliminating any need to comply with the confirmation process. What we

have here was, as has been discussed in Senator Lee’s testimony,

not a delay, not inaction, not the Senate lollygagging but a situation where one nominee was, in fact, considered and addressed by

the Senate and rejected, albeit by a filibuster, to be sure, but the

reason doesn’t indicate any different—if anything different would

have happened, if he had been defeated on an up-or-down vote.

The other two nominees, as has been discussed, were barely

there. I don’t think they had even filled out their forms and hadn’t

had hearings. This wasn’t a case of delay. It was just avoiding the

constitutional process. The footnote 13 says there’s no minimum

time, and so it could happen over a Sunday.

I want to just say a couple of points about what this means for

the business community. I don’t want to take any thunder or even

downplay what the others are going to testify to here, especially

Andy Pincus coming after me representing the Chamber. But

there’s a lot of uncertainty. The President has given no guidance

as to when he will do this, which agencies he’s going to pick, what

the reason will be. He’s said nothing about that.

And so all agencies are under some—that have openings are

under some uncertainty. We don’t know the litigation impact of

what will occur. The OLC opinion, as has been observed, mentions

that there are litigation risks. I don’t recall a single instance when

I was White House counsel where we commissioned and asked for

an OLC opinion that came out saying this is a litigation risk. I

don’t recall that ever happening. That’s a real red flag. But it certainly does set into a high uncertainty anything that these agencies

do with these appointees.

Regulatory uncertainty is a real problem. We don’t talk about it

that much. But in my experience in the business community, representing the clients in the business community, having been a
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businessman myself, there’s nothing more damaging than uncertainty, not knowing what the rules of the road are going to be. And

for people subject to the NLRB with very, very broad jurisdiction,

people subject to the Consumer Financial Protection Bureau, extraordinarily broad jurisdiction with no accountability by the political branches, no accountability by the White House. We’ve been

over it, no accountability by the Congress and no accountability

really by the courts, which are required to defer to the rulings of

the consumer bureau. There’s going to be amazing uncertainty that

results from what has happened here. It just is unprecedented in

my view.

I want to just close by making a couple of personal remarks. I,

of course, watched over this, as White House counsel, as any White

House counsel would and does. But I was also on the receiving end

as an appointee in Bush 43. I was recessed at a legitimate 3-week

recess. Because of Senator Reid, I was not rerecessed because

President Bush thought that it couldn’t happen. At the time I was

frustrated by it. They made me, instead, a special envoy. I want

you to know that I was a special envoy.

But I never felt as frustrated as I was that anything unconstitutional was being done by Senator Reid. I have a lot of other objections to how he tried to block me but not the actions he took in

the Senate. Thank you very much.

[The prepared statement of Mr. Gray follows:]
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Mr. GOWDY. Mr. Pincus.

STATEMENT OF ANDREW J. PINCUS

Mr. PINCUS. Mr. Chairman, Ranking Member Cummings, thank

you for the opportunity to testify today on behalf of the U.S. Chamber of Commerce and the hundreds of thousands of businesses that

the Chamber represents.

The Chamber strongly supports the goal of enhancing consumer

protection, but we’re extremely concerned that the recess appointment is actually going to have the opposite effect, reducing consumer protection, creating confusion and uncertainty for businesses

that want to comply with the law and imposing unnecessary and

duplicative costs on legitimate businesses.

Rather than focusing on the constitutional issues, which I agree

with Ambassador Gray have been well discussed, I would like to

focus on these consequences for consumers, for businesses, and for

the economy of the judicial determination that the appointment of

the director violates the Constitution.

And I think it’s important to understand that the Dodd-Frank

Act provided that prior to the appointment of a director, some of

the powers of the bureau could be exercised by the Treasury Secretary. And these included rulemakings under Federal consumer

laws that predated Dodd-Frank, very important laws like the Truth

in Lending Act, the Fair Credit Reporting Act, Home Mortgage Disclosure Act, conducting supervisory examinations of banks with assets of over $10 billion, and taking enforcement actions with that

category of banks.

And prior to January 4th, the actions taken in the bureau’s name

referenced this power and presumably were approved by the Secretary of the Treasury or his designee. Now, of course, all of the

bureau’s actions are going to be taken on the director’s authority.

And if that authority is held illegal, all of the bureau’s actions, including those that previously could have been taken under the

Treasury Secretary’s authority, will be invalid. So, as a result of

the recess appointment, what previously had been clear power to

exercise some of the bureau’s authority has been replaced by significant uncertainty with respect to all of the bureau’s authority.

To take an example, the remittances rule that is going to go into

effect on February 7th and that the bureau just issued could be

challenged on this basis, even though it could have been issued

under the Treasury Secretary’s authority if the recess appointment

had not occurred. And the same is true of the mortgage underwriting rule that is now being finalized by the bureau.

So you will have a situation where actions that would have been

lawful—at least couldn’t have been challenged on this authority

basis before January 4—are now going to have a significant cloud

over them, and we believe there is a very strong chance that the

courts will find them unconstitutional, find the recess appointment

unconstitutional.

If that happens, what’s the effect? And the legal answer is clear.

All of the bureau’s actions will be invalidated. And the practical effect is just as dramatic as the legal effect. There is a real possibility of gaps in the consumer protections, punishments that the

bureau imposed on fraudsters—people everybody agreed were rip-
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ping off consumers—will be overturned. New regulations, such as

the one I mentioned, will be null and void. Actions that could have

been accomplished lawfully by the bureau acting under the Treasury Secretary’s authority or by the bureau working in tandem with

the FTC and other agencies will be sent back to square one.

Second, real confusion and uncertainty for legitimate businesses.

What businesses want, as Ambassador Gray said, is clear rules for

the road. But they will have exactly the opposite. If the courts declare the appointment invalid, should they comply with the rules

that applied before the director was appointed? Should they comply

with the new standards even though they’re now legally questionable? With the director’s appointment invalidated, who is going to

provide guidance to businesses about what they should do if there

is going to be a prolonged period of uncertainty?

And finally, duplicative compliance costs to the extent new rules

become invalidated and businesses have to go back to restructure

their operations to comply with old rules, that means unjustified

and excessive costs. And that’s money, of course, that businesses

could have used to create new jobs, to expand their operations,

something that our economy needs.

So the overall effect of the recess appointment is to put at risk

significant consumer protection actions that would have rested on

firm authority. And the potential consequences are going to hurt

consumers, businesses, and the entire economy. Thank you. And I

look forward to answering the committee’s questions.

[The prepared statement of Mr. Pincus follows:]
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Mr. GOWDY. Mr. Gerhardt.

STATEMENT OF MICHAEL J. GERHARDT

Mr. GERHARDT. Thank you for the opportunity to be here today.

I greatly appreciate the invitation.

At the outset, let me just make two quick personal comments, if

I may. First of all, as a constitutional law professor, I have to tell

you that there’s nothing more special, no greater honor than there

is for me to be able to participate in a hearing like this, so I am

grateful for that.

At the same time, I speak for myself today and of course for no

one else and not for my institution. Nonetheless, let me at least say

that, as somebody who teaches at the University of North Carolina

Law School, I do want to state for the record that Mr. Gray is a

North Carolina treasure, so I hope you will allow me that.

Of course, I also understand you’ve got my written statement,

and I don’t want to go back through that in any detail. I do want

to take my brief time today to focus on a couple of issues, the first

one of which, of course, has to do with the major question that has

concerned this committee and other people, and that is the question about whether the time during which the President acted to

make his recess appointments was, in fact, a recess in a constitutional sense.

Let me just point out for the record what we haven’t said so far.

To begin with, courts generally treat that action with a presumption of constitutionality. Second, it should be noted that virtually

all authorities agree that a recess is not a fixed time and that the

President of the United States does have an independent judgment

about whether or not there is a recess in a constitutional sense.

Moreover, almost every authority, and I think almost every President, has agreed that in exercising judgment about questions like,

this the President is entitled to take what we call a functional approach, a functional analysis. That is, to take competing considerations into account, and that is I think what the President of the

United States has done.

At the same time, the President of the United States, I think,

has understood that if—in this circumstance, we assume that the

break that he counts as a recess was not a recess, then the Senate,

in effect, has the power through pro forma sessions to completely

nullify the recess appointment authority. So, in a sense, the President, I think, has acted sensibly and soundly to defend his own

prerogatives.

Beyond that, I think the memorandum from the Office of Legal

Counsel that provides one basis for his actions is a perfectly sound

document. It notes, for example, that over history, Presidents have

taken a functional approach to determining whether or not they

should exercise this power. Beyond that, the document notes that

this is not the first time that there’s been a disagreement between

the President and the Senate over whether or not there’s a recess.

It also notes that courts, generally speaking, are very reluctant to

interfere with the President’s exercise of judgment in this context,

all of which leads me to think that the President’s case here is a

sound one and a credible one.
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Beyond that, we have before us a question about the—a question

about the President’s duties under the Constitution. Recall that the

President takes an oath to take care to enforce the laws faithfully.

No doubt in this case the President considered that if he didn’t act,

there would be laws left unenforced, laws that he obviously is trying to do what he can to put into implementation.

We’ve talked a lot about uncertainty today, but I think it’s fair

to say that the uncertainty doesn’t just cut in one direction. There

are a lot of Americans, I suspect, who are uncertain about what’s

happening with the National Labor Relations Board, what’s happening with the Consumer Financial Protection Bureau. And

they’re concerned about what happens if these laws are not enforced, if there are certain regulations that are not made in this

context. I suspect that the President took all those concerns into

account in determining, on balance, that the time was right for him

to act.

Last, I would just want to emphasize that if we look into the

past, we will find, generally speaking, that courts don’t overturn recess appointments, I think even like those that we’re talking about

in this case. I think the doctrines that pertain to case or controversy, I think the timing of a lawsuit, are all such that it is

highly unlikely that these recess appointments will, in fact, be

overturned, but I should also point out that the Constitution provides a check, actually two checks, on the recess appointment authority. One is, is that they’re temporary. The other is that the

man who made them is politically accountable. So I think that we

should keep in mind the full set of checks and balances when we

talk about the constitutionality of what’s occurred in this circumstance. Thank you.

[The prepared statement of Mr. Gerhardt follows:]
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Mr. GOWDY. Mr. Rivkin.

STATEMENT OF DAVID B. RIVKIN

Mr. RIVKIN. Mr. Chairman, Ranking Member Cummings, it’s a

pleasure to be before you today.

I also wanted to emphasize that I’m speaking on my own behalf

and not on behalf of my law firm and of our clients. Let me briefly

walk through what I consider to be some of the most unfortunate

implications of what I consider to be—deal with a number of other

individuals on constitutional use of recess appointments by the

President.

First, as is the case with most separation of power disputes, they

transcend the immediate circumstances, immediate agencies involved. I’m not going to repeat the predictions that you’ve heard

that the courts will not so much, with due respect to Professor

Gerhardt, would not overturn the recess appointments as such but

would basically nullify, hold null and void all of the regulatory

products that would have been put out by the two agencies, and

therefore—during the tenure of those individuals and therefore

would accomplish nothing useful. I’m not going to talk about massive regulatory uncertainty.

Let me talk about the constitutional implications, which to me,

as somebody who cares passionately about the Constitution, are

most important. The most important problem here is that the

President’s actions put at risk Congress’ own rights and prerogatives. The most important one, of course, and we heard about it

earlier today, is the scope of congressional power to determine the

rules of its proceedings.

And until now, it’s always been assumed that Congress alone can

set the terms of its sessions and evaluate compliance with the

rules. The President’s functionalist approach effectively strips this

power from Congress, claiming that he may look past Congress’

own judgments and determine for himself their legal effect.

What I would want to tell you is that approach, if allowed to

stand, would empower Presidents of both parties to cast doubt on

nearly any congressional action, and in the process decisively tip

the balance of power away from Article I to Article II. Now, we’ve

heard a little bit of a discussion this morning about how that would

work in the context of appointments. The President, indeed, can

staff the entire executive branch with make-believe recess appointments and therefore eviscerate this very important check and balance that the Framers placed on the Senate, but let’s talk about

legislative power, power to pass legislation as such. Let’s forget

about appointments for a second.

The President, of course, as we all know, is a participant in the

legislative process, but he does not have an absolute veto. Presidential vetoes can and have been overridden by veto-proof majorities in both houses. Now under the President’s functionalist approach, the President, for example, might take the position that

any legislation passed by a quorum in the Senate, and as we all

know, much of the Senate legislative business is done without a

quorum or, for that matter, without even a vote being taken by

unanimous consent. In that respect, there’s nothing particularly

unusual about pro forma sessions. So the President can take the
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position that that legislation, piece of legislation, was unlawful and

therefore can be disregarded with impunity and without invoking

even the need to veto it.

Another area where the same problem can occur and the President can determine for himself when Congress is in recess concerns

a so-called pocket veto. As we all know, the Constitution provides

if a bill is passed by Congress and not signed by the President, it

becomes law within 10 days of a bill being submitted to a President, Sundays excepted, unless Congress by its adjournment prevents the return of a bill, in which case the bill dies.

Now, if the President is able to determine for himself when Congress is in session, he can take the position that Congress is in recess, and therefore, he can, in effect, pocket veto any legislation he

dislikes without paying any political price.

Now, I’ve heard a little bit of a discussion today, let me say first,

about the legal opinion because it eliminates the broader point I’m

going to make. With all due respect, it’s the worst opinion I’ve ever

seen OLC issue. The first 18 pages of it go through policy precedent

that nobody is disputing. The analysis in pages 18 and 19 is entirely conclusory. It basically takes the—what animates this opinion, to put it very crisply, is that somehow the President is entitled

to recess appointments. With respect, that’s bunk. A recess appointment is a gap filler. It’s available to a President when there’s

a recess. If the Senate so wanted, it can arrange for itself to be in

constant session, 24/7. The President does not have a power to secure a given number of recess appointments, nor, with all due respect does Congressman Cummings and his colleagues, the President has the right to populate the executive branch with the people

he finds congenial.

I’m actually sympathetic to that view, having served in the executive branch, but if the Senate wishes to disapprove or not vote on

the President’s nominees, the President would be very lonely. That

is perhaps unfortunate, but that is not a reason to warp the Constitution.

So there is a great deal at stake here, and we’re talking about

probably the greatest aggrandizement of executive power in American history, and it’s amazing to me that people who were very critical of a previous President in this area, unjustly in my opinion,

seem to be quite silent now. Thank you.

[The prepared statement of Mr. Rivkin follows:]
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Chairman ISSA [presiding]. Thank you.

Mr. Carter.

STATEMENT OF MARK A. CARTER

Mr. CARTER. Thank you, Chairman Issa and Ranking Member

Cummings, for inviting me to testify before the committee today.

As a direct consequence of the appointments of members Richard

Griffin, Sharon Block, and Terence Flynn on January 4th, every

administrative decision and every administrative rule or regulation

implemented by the National Labor Relations Board will be subject

to appeal or attack. This vulnerability will necessarily impact the

agency’s ability to accomplish its primary mission of promoting industrial peace and stability in labor relations and minimizing the

likelihood that labor strife will negatively impact interstate commerce in the United States.

As recently as January 26th, the chairman of the NLRB reportedly told the Associated Press [AP] reported, that the NLRB would

push for new rules that give unions a boost in organizing members.

The chairman is quoted as stating, we presume the constitutionality of the President’s appointments, and we go forward based

on that understanding.

The chairman’s reference to the constitutionality of these appointments is a critical issue. As you have heard today, if the appointment of the three recess members is not constitutionally

sound, the actions of the NLRB will be ultra vires, and every decision, rule, regulation or official action of the agency will be subject

to legal challenge on that basis.

This is because of a June 2010 U.S. Supreme Court opinion

called New Process Steel versus NLRB. In New Process Steel the

employer appealed from an adverse decision by the NLRB in the

Seventh Circuit Court of Appeals. The primary issue resolved by

the Court was whether the NLRB could issue an administrative decision with two members resolving the case. The statute contemplates a full complement of five board members, one of whom

is the chairman. Section 3(b) of the act permits the board to delegate its authority to a panel of three members.

When the administrative decision in New Process Steel was entered, there were only two individuals in place at the board, the

chairman and one member. In its decision, the Supreme Court held

that in order for the NLRB to issue a viable decision, at least three

individuals must compose the board itself.

It is axiomatic that any decision or official action taken by an

NLRB composed of two or fewer individuals is ultra vires and cannot be enforceable. The Court rendered this decision despite the

fact that the two-person board had resolved almost 600 cases and

fully appreciating the Board’s argument that it had a desire to

keep its doors open. The Court concluded that the statute did not

permit the agency to, ‘‘create a tail that would not only wag the

dog but would continue to wag after the dog had died.’’

The Federal courts will necessarily hear the argument that parties appearing before the NLRB have been adversely treated by the

wagging tail of a deceased dog. If the courts ultimately conclude

that the recess appointments of the board were accomplished unconstitutionally, then the decisions and regulations the agency
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issues that result in adverse impact to any party are vulnerable

under the new process precedent. If the three recess appointees are

not validly appointed, then the decisions and regulations emanating from the board as currently composed are actually only

being issued by two individuals, Chairman Pearce and Member

Hayes. If only two persons comprise the board, their action is ultra

vires.

The obligations of this agency to strive to accomplish its mission

should not be taken lightly. The agency is created by Congress, and

it does not and should not seek to enforce or advance any private

rights. Rather, it is a public agency that was created to, ‘‘protect

the public welfare,’’ which is inextricably involved in labor disputes.

The Supreme Court of the United States has held that the board

as a public agency acting in the public interest, not any private

person or group, not any employee or group of employees, is chosen

as the instrument to assure protection from the described unfair

conduct in order to remove obstructions to interstate commerce.

The consequences of the recess appointments of members Griffin,

Block, and Flynn, through no fault of their own, are that in every

litigation resolved by the agency and with regard to every rule or

regulation implemented by the agency during their tenure, anyone

who desires to challenge that action may under New Process Steel.

Regardless of whether those challenges are successful are not, the

agency’s mission to minimize labor strife and to remove obstructions to interstate commerce will be frustrated.

[The prepared statement of Mr. Carter follows:]
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Chairman ISSA. Thank you.

I’ll recognize myself for a first round of questions and follow right

up with Mr. Carter. How did the NLRB only have two members at

that time of that decision, the steel decision?

Mr. CARTER. At the time of the New Process Steel decision——

Chairman ISSA. New Process Steel.

Mr. CARTER [continuing]. There was—the Senate was continuing

with pro forma sessions, and there was—it was impossible to make

any recess appointments.

Chairman ISSA. And to your knowledge, did the executive branch

issue some sort of a statement on that, you know, challenging the

Senate’s ability to have pro forma sessions at that time?

Mr. CARTER. I’m not aware of that, sir.

Chairman ISSA. Ambassador Gray, you, you’re pretty significant

to today’s hearings because when you had the questions before you,

you reached a different conclusion. Would you tell us a little bit

about how you, as I think Mr. Rivkin and Mr. Carter both did, how

you could think again and agree with the decision. Is there any

way you could agree with the decision made by counsel on behalf

of the President that allowed these extraordinary events to occur,

particularly as to the two or three NLRB people, two of whom had

not even been given time to be considered by the Senate?

Mr. GRAY. Well, the trump card is held, at least in the theoretical sense, by the Office of Legal Counsel in the Department of

Justice, and they came out with this ruling, which, gosh, I don’t

think we would have permitted because, as I said earlier, it acknowledges a litigation risk which we would have said no, that’s

not good enough; give us an answer that doesn’t throw the whole

thing into a cocked hat. So for that reason alone, I think that I

would never have allowed this opinion to issue in the form that it

issued.

Beyond that, if you look at footnote 13, it’s very disingenuous in

my view. It says we have never formally taken a position that

there’s any lower limit to the time necessary to justify a recess appointment, and you know, in the 4 years I was—well, I was in the

White House actually a total of 12 years watching and then dealing

directly with appointments of this kind—never once was there any

hint that the time period could be less than 3 days, certainly even

when I was in the White House not less than 2 or 3 weeks. It

hadn’t gotten down to the 10-day limit, and there’s plenty on the

record to suggest that it is a 3-day, and of course, we have the Constitution giving the House authority to refuse a recess shorter than

3 days, so—but to repeat, the litigation risks red flag in this opinion is one that really disturbs me a great deal.

Chairman ISSA. Now, we earlier heard, and from personal knowledge I know that the House did not grant the Senate the ability

to be in recess. Assuming that the House’s authority now has been

waived, that we no longer have that authority, how do you square

that? How does the House lose its constitutional authority to have

to acquiesce to the Senate going into recess and vice versa?

Mr. GRAY. Well, that’s one of the infirmities of this opinion. It’s

saying that—and I know there’s a difference of opinion from the

professor at my alma mater, but what he said——
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Chairman ISSA. If you were still there, you would have been updated on the new Constitution, perhaps.

Mr. GRAY. I would have been taught better than I was when—

no, I just don’t understand, Mr. Chairman, how anyone can say

that the President has the power to decide when you or when the

Senate is or is not in recess, and that’s——

Chairman ISSA. And that’s a question I guess I’ll beg for all of

you. The Senate is not the only question here. Isn’t the question

whether or not the House’s prerogative, guaranteed within the

Constitution, was, in fact, preempted by a decision that—not just

that the Senate was somehow acting not available. I could understand that if it was a question only of is the Senate really in session or not, but how do you square, how do any of you square the

House not acting, as constitutionally we have to, to allow a recess?

Even if that chair were vacant day after day after day, wouldn’t it

be true that the House ultimately has an equal share in determining whether or not there is a recess?

Mr. RIVKIN. If I may take a stab at it.

Chairman ISSA. Please, Mr. Rivkin.

Mr. RIVKIN. Mr. Chairman, you’re absolutely right. OLC opinion

somewhat disingenuously claims that the constitutional language

you were talking about, section 5, clause 4, really deals with the

relationship between the two houses of, two parts of Article I, so

you may not be in recess for purposes of intra-Article I relations,

but you’re somehow in recess under the functionalist analysis vis—

vis Article II. I think it’s an indefensible position and——

Chairman ISSA. And, by the way, we sometimes think the Senate

is in recess when we send bills over there, I made that clear to

Senator Lee, that we often wonder what they’re doing when we

send them over and they die there. But isn’t this a very straight,

and I would like to have anyone who disagrees, very straight question of the Constitution and whether or not the House gave its permission for a recess?

Mr. RIVKIN. Absolutely. There’s not much original founding era

history in explaining why that section was created, but clearly, it

is created to ensure that there is a continuous and agreed-upon

functioning of Article I as a branch. So it is therefore a reason. Let

me also say the following, that gives you, and I’m remiss for not

mentioning it in my remarks, you have an independent injury by

virtue of a President’s unconstitutional behavior, quite aside from

usurping the Senate’s confirmation power, he has effectively vitiated your power to deal with your peers in the Senate because it

may be an important bargaining chip in some future procedures.

And the problem with the President’s analysis, it has no meaningful limiting principle. And you mentioned this point in one of your

questions with Senator Lee, the President can say you’re in a pro

forma session today, I like what you did, you passed the payroll bill

extension; therefore, you’re not in recess. But in the next pro forma

session, even when you’re operating under the same standing

order, exactly the same opportunity by unanimous consent to accomplish anything, because you didn’t do anything, you’re not in

session, you’re in recess. The same can be said about any of the

Senate sessions.

Chairman ISSA. Thank you.
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My time has expired, but I want to make sure all witnesses got

to answer.

Mr. Gerhardt, I think you might have a different view.

Mr. GERHARDT. I appreciate that very much, Mr. Chairman.

Thank you.

Just two quick responses. The first is to remember what it means

to say that the President has an independent judgment about the

constitutional meaning here. It’s not to say that each of the other

branches don’t have their own respective say, and his isn’t something that binds you, but at the same time, I think what it means

to say is he doesn’t feel bound by what your independent judgment

may be.

The second thing is, what is occurring, I think, in this debate is

sort of like two trains or ships passing in the night. Essentially, I

think what the Senate and perhaps the House have done is they’ve

made a decision to place form over substance, and clearly what the

President has done is decided to put substance over form when it

comes to making a decision in this particular circumstance.

Chairman ISSA. I thank the gentleman for his opinion. I’m glad

I have a different alma mater.

Mr. Cummings is recognized for 5 minutes.

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

On May 2, 2011, 44 Republican Senators sent a letter to the

President of the United States to voice their objection regarding the

Consumer Financial Protection Bureau.

The Republican Senators did not express concerns regarding the

qualifications of a particular nominee for the CFPB director position. Rather, the gang of 44 Republicans objected to the fact that

the Dodd-Frank Act is now the law of the land and that the Consumer Financial Protection Bureau would be able to protect consumers from unscrupulous mortgage servicers, payday lenders, and

debt collectors once the director was installed.

Now, Mr. Gerhardt, I would like to point your attention to slide

3, and here’s what those 44 Republican Senators actually stated,

and I quote, as presently organized, far too much power will be

vested in the CFPB director without any effective checks and balances. Accordingly, we will not support the consideration of any

nominee, regardless of party affiliation, to be the CFPB director

until the structure of the Consumer Financial Protection Bureau is

reformed.

Mr. Gerhardt, in your opinion, does it raise concerns that such

a large bloc of Senators would declare so openly that they are boycotting the constitutional confirmation process even for highly

qualified candidates?

Mr. GERHARDT. I think my reaction is basically that these Senators are, of course, free to express their judgment, and the size

here may be somewhat significant in that they comprise a minority

within the Senate, but at the same time, there are all sorts of

checks and balances, not just across branches but within branches.

And so I would certainly defend and support the fact that they’ve

got the freedom to make that—to make their judgments clear.

But, as the statement itself suggests, what they want is reform

of a law that’s already in—or reform to a law that already exists.

So the President’s job is not to enforce a law that hasn’t yet been
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passed. The President’s job is to enforce a law that actually is already on the books, and so I think that’s partly what he’s undertaking here is to do what he can to implement or to make possible

the fullest implementation of this agency or this bureau’s function.

Mr. CUMMINGS. Now, in your written testimony about the President’s recess appointment, you state, and I quote, the persistent obstruction of his nominations to both the NLRB and to the CFPB

forced them to consider appropriate responses and all possible

harms arising from his failure to act as well as the failure of the

Senate to act on any of his nominations and the ensuing harm to

the American public and to the enforcement of the law.

Looking at slide 4, on July 19, 2011, the New Republic quoted

Thomas Mann of the Brookings Institute as saying, Senate Republicans insist that a legitimately passed law be changed before allowing it to function with a director—a modern day form of nullification. There is nothing normal or routine about this.

But, Mr. Gerhardt, do you believe that President Obama acted

constitutionally in making the recess appointment to the bureau?

Mr. GERHARDT. I do, and I’ve stated that in the written statement, and I obviously repeated it here orally today.

And as far as Mr. Mann’s comment is concerned, I think, again,

it reflects the kind of checks and balances that we have. This is a

very dynamic process, and this is exactly—what we’re seeing today

is checks and balances in operation. This is how it works. You can

pass a law, but I think as Senator Lee pointed out, there are various things that could be done subsequently if people think differently, but the important thing to understand is it’s all done

within the process, and I think the President acted within that

process.

Mr. CUMMINGS. Now, if the CFPB director position had not been

filled, the bureau would not have been able to use its new powers

to protect consumers from deceptive mortgage servicing, payday

lending, and debt collection practices. Does the President have a

duty to make sure that the consumer protections enacted by Congress are executed?

Mr. GERHARDT. Obviously, I think the answer to that is yes. I

think he does have a duty to do that, and I think that’s partially

not just constitutionally obliged on his part, but this is where he

might also say or think, look, there’s a lot of harm that’s done from

the fact that I can’t get this law implemented, and he’s trying to

redress that harm. So I think he’s constitutionally entitled to make

those judgments.

Mr. CUMMINGS. Thank you.

Chairman ISSA. Would the gentleman like additional time to ask

about the NLRB?

Mr. CUMMINGS. This will—not—thank you for the additional

time, but I do.

Chairman ISSA. The gentleman has an additional 30 seconds.

Mr. CUMMINGS. Mr. Gerhardt, are you aware of any instance

where a large group of Senators vowed to the President that they

would block any nominee to a Federal agency unless changes were

made to the agency’s enabling act?
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Mr. GERHARDT. That is a great question, and I have to say I can’t

think of anything off the top of my head, but that may not mean

very much.

Mr. CUMMINGS. Okay. Very well.

Thank you, Mr. Chairman.

Chairman ISSA. I so much miss Senator Byrd.

I’m sure there’s a quote somewhere that’s on topic.

With that, we recognize the gentleman from South Carolina, Mr.

Gowdy, for 5 minutes.

Mr. GOWDY. Thank you, Mr. Chairman. I also want to thank the

gentleman from Oklahoma for his courtesy.

Professor, is there a different definition of recess, depending

upon which party is in power?

Mr. GERHARDT. I think the answer would be no.

Mr. GOWDY. And one of the good things about the law is hopefully it provides order and predictability for those to come. So

what’s the new definition of recess for future Republican Presidents?

Mr. GERHARDT. I think it’s actually pretty much the same. You

know, keep in mind that the President here is acting against a

backdrop where we have more than just the OLC opinion that’s expressing a judgment about recess. There is, for example, the 1905

report from the Senate Judiciary Committee that essentially says

that the President may treat as a recess a period of time in which

the Senate is unable to receive or act on nominations.

Mr. GOWDY. Well, let’s analyze that for a moment. The two

NLRB names were given on December the 15th, and they were recess appointed on January the 4th. Do you think that now

talismanically 21⁄2 weeks is enough time to demand that the Senate

act on something?

Mr. GERHARDT. Obviously, that’s not my judgment call to be

made.

Mr. GOWDY. Do you think if a President were to conclude that

21⁄2 weeks was enough time for the Senate to act on something that

that would withstand constitutional scrutiny?

Mr. GERHARDT. Well, if you’re asking me, yes, I think the answer

is going to be yes because I think this falls within the discretion

of the President.

Mr. GOWDY. So 21⁄2 weeks. What about a length of time in terms

of recess? Because 10 days, according to you, is too long; 3 days,

can the recess be less than 3 days?

Mr. GERHARDT. I think as a practical matter the answer is going

to be yes because that’s what the President is using here.

Mr. GOWDY. Can it be less than 1 day?

Mr. GERHARDT. It might well turn out to be the answer is yes.

Mr. GOWDY. Can it be over the lunch break?

Mr. GERHARDT. But let me point out that the fact that something

might be constitutional doesn’t mean you have to do it, and so——

Mr. GOWDY. I agree, the Constitution says he shall have the

power.

Mr. GERHARDT. Right.

Mr. GOWDY. He doesn’t have to do it.
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Mr. GERHARDT. Right. And so he might conclude as a practical

matter that he does have an opportunity to make a recess appointment.

Mr. GOWDY. I’m trying to get a sense of if our country were to

be fortunate 1 day to have a President Lankford from Oklahoma

that if the Senate——

Chairman ISSA. That would be good fortune.

Mr. GOWDY. If the Senate were on lunch break or taking a nap,

as has been known to happen from time to time, is that a sufficient

length of time by which the President can use his recess appointment power?

Mr. GERHARDT. Well, again, clearly, practically speaking, I think

he can make a judgment, and perhaps most people would make a

judgment that these breaks that you’ve just described are probably

not recesses for fairly obvious reasons.

Mr. GOWDY. I’m looking for the law.

Mr. GERHARDT. But we’re talking about the pro forma sessions

here, and that I think raises a slightly different——

Mr. GOWDY. Well, that gets to my next point. How can the payroll tax cut be effective if they were on recess?

Mr. GERHARDT. I think the answer to that is by the time when

the President makes this judgment, he obviously has concluded

that the Senate is not in a position to be able to act on these nominations, and he thinks that the——

Mr. GOWDY. But how could they act on nominations which

weren’t even given to them in a timely fashion? They got them on

December the 15th, and they didn’t even have the proper paperwork.

Mr. GERHARDT. I understand that. But let me just remind you

what the recess appointments clause says: The President may fill

up all vacancies. And so there are vacancies that were created for

one reason or another, and I think under those circumstances he

may be able to choose to fill——

Mr. GOWDY. Do you think the founders had a 2-hour recess in

mind when they drafted that clause?

Mr. GERHARDT. I don’t know what they had in mind.

Mr. GOWDY. Well, but you’re a constitutional law expert.

Mr. GERHARDT. I can tell you this.

Mr. GOWDY. What do you think?

Mr. GERHARDT. I think they didn’t have a fixed period in mind.

Mr. GOWDY. Do you think they envisioned 2 hours?

Mr. GERHARDT. Like I said, I don’t think that they were thinking

at that level of detail. I think they thought, to the extent they did

address that, it’s not a fixed period, and what we’re talking about

here is a circumstance in which the President, like most Presidents, approaches this issue in a very practical way, balancing the

competing consideration.

Mr. GOWDY. Well, speaking of the President’s practicality, he referred to Ambassador Bolton as being damaged and having his

credibility undercut because he was a recess appointee. Do you

think the same analysis would apply to his recess appointees, that

they are damaged and have less credibility?

Mr. GERHARDT. You mean damaged politically?

Mr. GOWDY. I don’t know how the President meant it.
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Mr. GERHARDT. Yeah, I was going to say, I’m not sure I understand the context of the statement, so I don’t know that I could tell

you what he was thinking or why he said that, but I think what

happens, of course, is there—the Constitution and politics converge

all the time, and in a circumstance like this where the President

makes a judgment, it’s not just going to have constitutional ramifications. It will have political ramifications.

Mr. GOWDY. You keep using the word judgment, and I’m trying

to get to what the law is because the beauty of the law is it instructs future people what they can and cannot do, so I’m not as

interested in someone’s judgment as I am what the law was going

forward for the next President. Is there any time limit associated

with recess?

Mr. GERHARDT. I think the answer would be probably yes because I think you have to put all this into context.

Mr. GOWDY. It’s less than 3 days, though?

Mr. GERHARDT. I don’t know if it’s less than 3 days or not, but

I do think that it’s a matter of context, it’s a matter of what are

the practicalities at the moment the President is making that judgment. Keep in mind that the President is making this determination based not just on the text but also based on the recognition

that recess is not a fixed concept, and beyond that, he’s also making a determination I think based on the law, the law he has to

enforce, and the text that I think that gives him this authority, and

the recognition that if he doesn’t act, then in a sense what’s happened is the Senate might be able to literally eviscerate his power.

Mr. GOWDY. I’m out of time, Mr. Chairman. If I could have 15

seconds to ask my final question, and I promise it is my final question.

Chairman ISSA. Ask unanimous consent. Without objection, the

gentleman is given an additional 15 seconds.

Mr. GOWDY. Thank you, Mr. Chairman.

You mentioned a judgment. Are you moved at all by the fact that

the Senate is controlled by the same party that controls the White

House, and the third NLRB appointee, the Republican appointee,

was never given a hearing, was never scheduled a hearing by the

Democrats who are in charge of the Senate because some of us

would be suspicious of collusion, that you just don’t schedule it, and

you wait until a nap takes place, and then you go ahead and make

a recess appointment.

Mr. GERHARDT. I would just say this with all due respect, the

politics of this are not my concern. I try to look at this strictly from

the vantage point of what the Constitution might have to say about

this and what the constitutional law might be, so the parties involved which the President, the Senators, the nominees, are not

factors in my calculation.

Mr. GOWDY. Thank you, Mr. Chairman.

Chairman ISSA. I thank the gentleman. The gentleman yields

back.

We now recognize the gentlelady from the District of Columbia,

Ms. Norton, for 5 minutes.

Ms. NORTON. Thank you, Mr. Chairman.

Mr. Gerhardt, I’m not going to give you any law school

hypotheticals or worst-case absurd examples, even though I regard
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my prior profession, my real profession as a professor of law at

Georgetown University Law Center. I still go over there to teach

once a week. I look first to the written legal advice the President

received from the Office of Legal Counsel. I look there because the

Office of Legal Counsel is considered, I think, by most of us to be

the least political office in the Justice Department because the job

of that office is to keep the President from getting in trouble.

And if someone would put up some words that I asked the staff

to get for me from his analysis, ‘‘Allowing the Senate to prevent the

President from exercising his authority under the recess appointments clause by holding pro forma sessions would be inconsistent

with both the purpose of the clause and historical practice in analogous situations.’’

Now, this opinion appears to raise serious separation of powers

questions. Let me ask you, since Congress is constantly looking to

the Framers, whether you think the Framers intended Congress to

overturn a law by refusing to confirm an appointee to run an agency, do you think the Framers had that as a possibility in mind?

Mr. GERHARDT. Well, let me just say at the outset that of course

the statement here is essentially an iteration of what I’ve been saying, and I think the OLC memo, with all due respect, is a perfectly

good example of the kind of work one gets from OLC, which is not

just nonpartisan, but they try and look at all the competing sides

and come out with their judgment.

In terms of your question, I think the Framers sort of told us

what they think about that circumstance when they set up the

Constitution. Obviously, laws are made a certain way in compliance with Article I. That’s how laws are made. But there may be

other factors that come along the way—funding and other things

which are made through other laws. But in terms of nullifying a

law, one chamber of Congress doesn’t have the authority, I think,

to nullify a law, that laws are made through compliance with the

bicameral and presentment clauses.

Ms. NORTON. Well, I was intrigued by—therefore, you know, I always want to look and see, what does the other side say, so I wanted to see what former Office of Legal Counsel had said under comparable circumstances.

Now, this President is known for his patience and unflappability,

some would say criticized for his patience, particularly with this

Congress. Here, let’s take the office of—the consumer bureau. The

response to—one of the most important responses to the most serious economic crisis in our lifetime or at least the lifetime of many

of us, victimized millions of Americans. This agency has not been

functioning as a full agency because there has been nobody to lead

it.

Now, it’s one thing to be patient. It’s another thing to become a

wimp and to let your duty to attend to the laws vanish in the face

of a Congress which simply refuses to do what has largely been

done in the past. So in looking to prior legal counsel, the staff

found the two former Assistants Attorney General, John P. Elwood

and the former Deputy Attorney General. Both subscribe to this

statement. ‘‘The Senate cannot constitutionally thwart the President’s recess appointment power through pro forma sessions. The

President should consider calling the Senate’s bluff by exercising
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his recess appointment power to challenge the use of pro forma sessions.’’ This President appointed—did not, in fact, move forward

with one appointee that the Senate disagreed with. All right. He

says to the Senate, here’s another one I have for you, and the Senate says, All right, you’ve come up with somebody who is fully appointed, and tell you what, we disagree with the underlying law

that this appointee is to administer. It does seem to me that the

notion of calling the Senate’s bluff comes into play at some point,

and I would like to know your view of that.

Mr. GERHARDT. Well——

Ms. NORTON. If the President had simply allowed this to go

on——

Mr. GERHARDT. Right, right.

Ms. NORTON [continuing]. Indefinitely——

Mr. GERHARDT. Right.

Ms. NORTON [continuing]. Instead of finally calling the question,

take it to court, do what you want to, but I’m calling the bluff now

after virtually, almost 4 years in which this particular bureau has

not been able to function.

Mr. GERHARDT. If the President——

Chairman ISSA. Would the gentlelady yield for just a second? Did

you mean to say 4 years on this agency?

Ms. NORTON. Almost.

Chairman ISSA. No.

Ms. NORTON. All right. Two—When did we pass it?

Chairman ISSA. Dodd-Frank was a year ago.

Ms. NORTON. I stand corrected on the time. My point remains.

Chairman ISSA. The gentlelady will have an additional 30 seconds.

Ms. NORTON. I thank the gentleman for putting into the record

the correct number of years, whatever it is, and whatever the staff

finds I’m sure would be the case. The point I made by introducing

this was the President’s patience had been quite exhaustive and

that even members of a prior administration who had held this

very office had said at some point, somebody’s going to have to,

‘‘call the Senate’s bluff,’’ I think that’s what was done here, and I

ask for your response with respect to that, or should he just have

let it go on maybe for another 2, 4 years, however long it might

have taken?

Mr. GERHARDT. And I do think that that opinion reflects the fact

that the basis for the President’s actions are not uniquely partisan.

That is to say, there’s a wider, more solid ground on which he is

operating. But to directly answer your question, I think that if the

President—I think the President faced a situation where he knew

that if he didn’t act, there would be these harms that would continue to occur, that the Consumer Financial Protection Bureau

would be left unable to perform some of its most important functions, and that would leave, in his judgment, the American people

harmed. So that’s the harm that he’s looking at there. He could

look at this other situation and say, look, if I act, what harm might

there be? Clearly, in his judgment, he didn’t think there was as

much harm by acting. In fact, he actually thought he would be producing some good. That’s not an unreasonable stance for him to
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take. So, in fact, to stand pat simply would have allowed harms to

buildup over time and the law to go unenforced.

Chairman ISSA. I thank the gentleman.

I now yield 5 minutes to the gentleman from Oklahoma, Mr.

Lankford, and would ask him if he would yield for 30—15 seconds?

Mr. LANKFORD. I absolutely would, Mr. Chairman.

Chairman ISSA. I just want to make the point that one thing I

have seen a pattern of today is that every question seems to be

about the Consumer Financial Protection Bureau and none about

people whose applications arrived in the Senate, two people whose

applications arrived in the Senate formally after they were sworn

in. Yield back.

Mr. LANKFORD. Thank you, Mr. Chairman, and that is exactly

where I want to be able to land on it. It is interesting to me that

a lot of this conversation is about, could this be permissible, is

there some person out there somewhere? Obviously, the statement

there from the Bush administration that there was an individual

that considered this. The Bush administration did not take that advice. They took the advice of others over the top of that and said,

no, that’s not legally appropriate. What this has done is for political expediency of the President, to make him look tough, to fight

against the allegations that you’ve been weak in the past, he’s got

to get in an election year and try to look real tough and like I’m

going to force some things down their throat so I can look manly.

But it opens up all of this litigation, and every action at the NLRB

suddenly is going to go to court, and it will cost millions of dollars

so he can politically look better in a campaign year, but this will

drag out all of these cases for years now in litigation. It’s frustrating to me in that we have to sit and discuss what are the issues

of litigation when this was a settled issue 2 years ago. I go back

to the steel issue, the New Process Steel with Deputy Solicitor General Neal Katyal, as I go back through the oral arguments that I

pulled up, he looks directly at Chief Justice Roberts, doing oral arguments before the Supreme Court, and Chief Justice Roberts discussing the NLRB and the vacancies, asked a point blank question,

And the recess appointment power doesn’t work why? To which he

responds—this is the Obama administration Deputy Solicitor General responds back to the Chief Justice of the Supreme Court, The

recess appointment power can work in a recess. I think our office

has opined that the recess has to be longer than 3 days.

Now, this seems fairly clear to me that this is not an issue about

recess appointments and does the President have the power to do

recess appointments. He absolutely has the constitutional power to

do recess appointments. This is not a recess. This is a constitutional issue. This is an issue of can the executive branch define for

the Senate when they’re in recess and when they’re not. Is this the

power of a monarch to reach into the legislative branch and say,

you are in the way, I’m going to now declare you in recess, and I’m

going to put in who I want, and on top of that to drop their names

in on the 15th of December and then to say it’s been long enough

2 weeks later, I’ve waited for you all this time, I’m now going to

go ahead and put them into place seems absurd on its face.

So while we can discuss all the issues of the CFPB and the dynamics of the politics of it, in reality, the biggest issue that sets
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the largest precedent is the NLRB case. If the President has some

power to ignore the advice and consent of the Senate and if he can

in 1 day drop a name in and before hearings are even scheduled

over some weekend in the future or as has been opined already

over a lunch break can now declare I’m not in communication with

the Senate, they’re in place, do it in January and ignore the advice

and consent now for 2 years, and can fill all vacancies, why can’t

a future President some January over a weekend fill every single

court, all of them, and say, this is my recess responsibility, the

precedent has been set over here, that was ignored by the Senate,

the courts have upheld it. What would slow down some future

President from doing that? Anyone is welcome to answer that. Let

me take some different opinions here. Go ahead.

Mr. RIVKIN. Well, let me say nothing would prevent this from

happening. In fact, I mentioned in my oral remarks that it would

fundamentally recast not just the constitutional balance, but it

would, in effect, enable the President to put into office people

whom otherwise would not get confirmation for reasons that don’t

have to do with partisanship. You really can have an executive

branch comprised of political hacks who come in, know they’re only

going to be there during the limited term, and do the President’s

bidding and feel completely unaccountable.

Mr. LANKFORD. So, at that point, advice and consent is gone?

Mr. RIVKIN. Advice and consent is completely eviscerated. Again,

the problem with the functionalist approach is, aside from the fact

that it’s not found in the text, it has no limiting principle, and the

notion—I mean, I hate to engage in law professor like

hypotheticals, but under the notion that if you have a genuine

emergency, you can disregard something; why couldn’t you disregard an appropriations rider or a statute which does not give the

President to draw money from the Treasury, and you say there’s

an emergency, I’m going to draw power because I want to enforce

the law? The House passes appropriation riders all the time that

prevent agencies from spending their funds. The President can say,

I don’t care, there’s a statute on the books, there’s an appropriation

rider which says EPA cannot do something, but I don’t care, I’m

going to use the money. There’s no difference.

Chairman ISSA. And with that, we recognize the gentleman from

Massachusetts, Mr. Tierney.

Mr. TIERNEY. Thank you, Mr. Chairman.

And thank all of you. I think we have pretty thoroughly gone

over the constitutional aspects of this situation, and I think it has

been enlightening, at least for me and I hope for my colleagues as

well on that.

I thought I would take a different look at that, stepping away

from the constitutional issue directly on that.

Ambassador Gray, you obviously looked at this thing from both

sides, you know, given you’re President Bush’s recess appointment

on that basis and also your White House counsel position. Back in

March 2005, there was an article in the Hotline that reported a

statement from you, and I’ll quote it, I believe the use of the Senate cloture rule to permanently block nominations conflicts with

the Constitution’s advice and consent clause.

Do you remember making that statement?
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Mr. GRAY. Yes, sir, I do.

Mr. TIERNEY. How do you feel about that today? Do you agree

with it, or have you changed your mind?

Mr. GRAY. The statement was made in the context of judicial appointments. There had never been a filibuster of a judicial appointment for 200 and whatever years, so I thought it was perfectly appropriate then, and I still think it’s not appropriate to filibuster judicial nominees.

But that’s a different issue, both in terms of who the nominee is

to, say, the Supreme Court versus a nominee to the NLRB. It’s a

different issue. It’s also a different issue, whether or not cloture

should be used against the judge is a totally different issue than

whether a President can declare a recess whenever he feels like it

under whatever criteria he wants to use.

And I think it’s important to say that I don’t think the recess appointment power is a response to rejection. I take the point that,

of course, the NLRB people hadn’t even filled out their forms yet,

but it’s also true that Cordray was rejected. Now, he was rejected

by a filibuster, but he was rejected, and the OLC opinion doesn’t

say that recess is appropriate to deal with a filibuster issue. I don’t

think the word filibuster appears anywhere in the Office of Legal

Counsel opinion.

So the recess is not an antidote to rejection. And of course, there

was contemplation in Dodd-Frank that there might not be a director confirmed because the legislation provides specifically that the

agency can do a whole number of things, but certain things it cannot do until there’s a director confirmed by the Senate. And so it

was understood that maybe there wouldn’t be a director confirmed.

Maybe the director would be rejected. That was understood by everybody who passed that legislation. So I’ve given you too long an

answer, and I should——

Mr. TIERNEY. No, we’re here to get your information. Take your

time.

Mr. GRAY. But I do think the filibuster issue was quite distinct.

The rule 22 issue is very, very distinct from whether the President

has the authority to avoid the confirmation process and declare recesses whenever he feels like it.

Mr. TIERNEY. Mr. Pincus, you made a statement at the beginning

of your remarks that the Chamber of Commerce supports consumer

protection. Is that correct?

Mr. PINCUS. Yes.

Mr. TIERNEY. So I’m fair to say that you also made some comments about certainty, that the business community appreciates

certainty in the implementation of laws as they are on the books.

Mr. PINCUS. Yes.

Mr. TIERNEY. When you look at the statute and you look at statements like those made by 44 Republican Senators who wrote to the

President vowing that they would block any nominee regardless of

party affiliation because they objected to the very structure of the

Consumer Financial Protection Bureau, you see that statement,

you know the law has been passed, it hasn’t been fully satisfied yet

because there’s been no appointment, and then 44 Members of a

particular party come out and say, well, we’re just never going to

act on that so you’re going to be with that uncertainty for a long
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period of time. How does that impact your comments about the

Chamber’s desire for consumer protection and your comments

about the desire for certainty?

Mr. PINCUS. Well, I guess two answers, Congressman.

First of all, on consumer protection, as I said in my testimony,

there’s a lot that the bureau can do under the Treasury Secretary’s

authority. There are many rulemaking responsibilities that Congress laid out in Dodd-Frank, and there are many other

rulemakings that the bureau could undertake.

Mr. TIERNEY. Well, if I could just—not to be rude but because my

time is limited, let me stop you on that point so we can explore it.

Mr. PINCUS. Yeah.

Mr. TIERNEY. What it won’t be able to do, however, unless somebody is appointed, is identify and curb unfair, deceptive, and abusive financial practices; won’t be able to rein in predatory payday

loans; won’t be able to ensure credit reporting agencies comply with

consumer protections; won’t be able to safeguard against abusive

debt collection; and it won’t be able to monitor private student

lenders and nonbank mortgage companies and other financial institutions, just to name a few. So those you would consider——

Mr. PINCUS. Could I respond?

Mr. TIERNEY. Of course. Those you consider not important or not

relevant?

Mr. PINCUS. No, they may well be important, but a couple of

points. First of all, the FTC does have the power right now to act

against unfair and deceptive practices, is doing it. In fact, this

week, announced a large significant enforcement action on consumer debt collection, and it has been doing it right along and has

devoted very substantial resources, so part of the—there’s a bigger

argument about whether or not, where the gap was that the bureau was designed to fill. Much of the argument in the run-up to

Dodd-Frank was, we’re very troubled that the bank regulatory

agencies don’t focus on consumer protection with respect to the entities they regulate, which were banks, and we need to transfer

that power to a new regulator that will focus on that regulation.

That’s the power that the CFPB had prior to January 4th and was

exercising.

As the legislation moved through Congress, other—it expanded

to focus on other entities, all of whom are already regulated both

at the State level and by the FTC, and the FTC has very, very

broad power and the State attorneys general certainly have very

broad power, so all of the entities you listed are already regulated

both by the FTC and the States. So the question is, I think there’s

a question both about the gap and whether there is one, and we

would suggest that there isn’t, and that really the question here

doesn’t create uncertainty, and in fact as I discuss in my written

testimony, a huge amount of uncertainty is going to be created by

the overlap between the State AGs, the FTC, and the CFPB, all of

whom now regulate these same entities and all of whom may regulate them in totally different ways.

Mr. TIERNEY. And you don’t feel that the failure or the statement

of 44 Senators that they’re just not going to appoint anybody on

that basis leaves any uncertainty at all as to how that act is going

to be conforming going forward?
137

Mr. PINCUS. Well, what it does is, is it means that particular

part isn’t going to take effect until there’s some check, that same

bipartisan check on the bureau that exists for the FTC, the CFP—

the Consumer Products Safety Commission, the SEC, the CFTC,

and just about every other regulatory agency.

Mr. TIERNEY. So the Chamber is okay with that being uncertain

as to whether and when that part of the statute is going to be implicated?

Mr. PINCUS. Well, I think it’s going to be uncertain for sometime,

and I think the question is going to be, can we get a regulatory

structure that makes sense going forward.

Mr. TIERNEY. Well, the question really is, are you going to get

somebody appointed, but you’re okay with there being no appointment, so I guess that follows then that you’re okay with that part

of uncertainty?

Chairman ISSA. Your time has expired, but the gentleman may

answer.

Mr. PINCUS. Congressman, I think what we’re okay with is that

the part of the statute that was effective and was being administered was being described, was being fleshed out. The idea that

parts of the statute that wouldn’t come into effect until a director

was appointed wouldn’t be fleshed out until a director is appointed

makes perfect sense because the business community is not now

subject to them. The problem now is that the business community

is placed in a very difficult situation where a lot of enforcement actions and regulations are going to be issued that businesses will,

legitimate businesses will feel they have to conform with, that may

turn out to be totally invalid, and they may have to then spend a

lot of money to go back to the status quo because it turns out everything that’s happened gets set aside by the courts.

Mr. TIERNEY. Or it may not.

Chairman ISSA. And with that, we go to the gentleman from Arizona, who has been patiently waiting, Mr.—Dr. Gosar.

Mr. GOSAR. Thank you. You know, Ambassador Gray, I would

like to give you a quick moment to respond to Mr. Gerhardt as regards to his comments earlier about the constitutionality and how

the process facilitated the ends are okay with the process.

Mr. GRAY. Well, I don’t know how long I have.

No, I will stick with what I’ve already said and what Senator Lee

said. If the President can just say, well, I actually think that the

Senate really is lollygagging around now and ought to be in session, lunch, but they’re not, the Chamber’s empty, and, you know,

they rejected my nominee for X position, and not by filibuster, say,

but by an up or down vote by a 20 vote margin, and I don’t like

that, and therefore, I see a recess opportunity here, and I’m going

to name this person to this agency anyway.

Now, that’s not the way the Constitution is supposed to work.

And there is no absolutely irreducible right to make and get nominees confirmed to I think maybe any entity except, you know, military. I want to hedge my thing on, you know, some diplomatic positions, Supreme Court, but for the average agency, I don’t believe

there’s any irreducible minimum right that the President has to

say that there’s going to be a recess anytime I say there is, and
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therefore, I can just override the confirmation process. I don’t think

that’s what the Constitution means.

I think there’s another point to be made here, not to belabor it,

but the CFPB and the NLRB are creatures of Congress. They’re

your creatures. They’re not creatures of the President. And if you

don’t want to staff them, I don’t think you have to staff them. Now,

in addition to them being creations of you, they are so-called independent agencies. Now I have problems with the doctrine that any

agency can be independent once it’s set up of the President’s control, but the President takes this view, too; these are independent

agencies.

They are your agencies. Not only did you create them, but you,

independence meaning, you actually have the upper hand in controlling them. And if you don’t want to staff them, you don’t have

to staff them, and you don’t have to fund them.

Mr. GOSAR. So it brings me to my next point, Mr. Pincus.

Staffing, we’re business people. I was a dentist before. I’m impersonating a politician now. A business, when we go through a staffing process, particularly when we have a new rule, we have to

flush it out, what’s right, what’s wrong, and particularly when it’s

rushed through. I mean I wasn’t part of the 111th Congress, and

I see some problematic issues, particularly with both sets of appointments. Isn’t getting it right what is the most important about

process?

Mr. PINCUS. I think that’s right, Congressman.

I think getting it right is important. I also think—you know, my

mother always said, two wrongs don’t make a right.

Mr. GOSAR. Thank you. Perfectly said.

Ambassador Gray, over the history of our country, who has inflicted more harm to the Constitution, constitutionalists or the average person?

Mr. GRAY. I’m not sure—who is a constitutionalist?

Mr. GOSAR. We have attorneys that claim that they follow the

Constitution, and we see it inflected upon the Constitution over

and over again the challenges that depart from the original intention from our Constitution. I don’t see the average person making

these claims, a violation of the Constitution. But I do see attorneys

with constitutional backgrounds who do make those.

Mr. GRAY. Well, this is another hearing. Certainly there are

many of us who think that academia is the source of a lot of wonderful theories.

Mr. GOSAR. And the President was what?

Mr. GRAY. Well, he was an academic. Often this gets translated

through law clerks who get put out into the field working for

judges and influence judges. I mean, this is a long conversation.

But no, the public is not guilty of this. And part of the reaction

of the last election is a lot of people in the public are saying, well,

wait a second. There is something out of kilter here. And what we

thought about is limited government, that something has gotten

out of hand. And that, I think, is a valid point to raise, and it’s not

the fault of the average voter in America.

Mr. GOSAR. To me, if I’m the average guy on Main Street, if

we’re playing basketball, this is a blatantly flagrant foul in which
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you have time-out, you take a penalty, and you are excused from

process, from playing the game at all. That’s how bad this is.

If I could ask for you indulgence with one more quick question?

Chairman ISSA. The gentleman will be granted an additional 30

seconds, plus Mr. Gerhardt does want to comment, so we will allow

additional time for that.

Mr. GOSAR. Mr. Carter, I know in regards to the NLRB, you

know, prior to this with the two members on there, most of these

processes in which they were they were going to go through were

really noncontroversial. And now that we’ve had these appointments, how do you think they are going to respond? Are they going

to still stay to the noncontroversial aspects of what’s before them?

Or are they going to go into the realm of the controversy?

Mr. CARTER. Well, let’s try to deal with this empirically. When

Member Peter Schaumber and Member Wilma Liebman were left

as the sole two members of the National Labor Relations Board,

they came upon an agreement. It was the subject of the argument

and new process deal whereby they agreed not to decide any controversial cases, those cases that normally would require at least

three majority votes to overturn prior board precedent. And they

did so in a collegial fashion despite the fact that Member

Schaumber was of the Republican Party and Ms. Liebman was a

Member of the Democratic Party. Left to their own desserts, it’s

possible for members of the NLRB bipartisanly to proceed collegially.

With regard to the current board as it’s currently composed,

what they do is what they will do. But based on the January 26th

report from the Associated Press quoting Chairman Pearce, who

defines the agenda of the board, it is obvious that they are contemplating supplementing already controversial election regulations

and attacking the docket of administrative appeals that are before

the board. It appears to be a board, by his report to the press, that

is going to be aggressive in pursuing its agenda.

Mr. GOSAR. Thank you.

Chairman ISSA. Mr. Gerhardt, you had a short statement to

make.

Mr. GERHARDT. I very much appreciate that, Mr. Chairman. It is

very kind of you.

Just a few quick points I would like to try to make in partial response to what’s been said.

First, I hope we don’t lose sight of the fact that I actually think

that an important premise we should have here is that everybody

is acting in good faith. That is to say, I assume and I actually do

more than assume that everybody here, whether I agree with them

or not, is acting in good faith.

I carry that same presumption with regard to Senator Lee, who

was obviously very eloquent and insightful, and to all Senators

and, of course, to the President. So that is my operating presumption.

The second is that I think it’s important to remember just to

maybe clarify in the record that recess appointments are perfectly

appropriate to be made to independent agencies and for that matter have been made to Article III courts and have been upheld re-
140

peatedly over time. So I don’t think there’s any question about the

constitutionality of that.

And then, last, I just want to point out that in a lot of situations,

we’ve been hypothesizing circumstances other than those in which

the President actually made these recess appointments. If we focus

on the specific situation in which he made them, these pro forma

sessions, in that situation, I think he’s acting upon fairly strong

constitutional ground. If we change the facts, we obviously might

need to change our analysis. But in terms of the facts of this case,

I think he has a credible ground.

Chairman ISSA. Well we’re about to go to Mr. Davis.

I might only mention that in the case of the NLRB, to be functioning, you only had to do one recess appointment.

With that, we go to the gentleman from Illinois, Mr. Davis.

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

I want to thank the witnesses for their patience.

We keep hearing about how there is going to be a cloud—and I’m

quoting—a cloud over whatever decisions the NLRB or the CFPB

may make. All the same things will be true, according to some people, when rules are promulgated. We’ve heard that these appointees, their official acts will be void as a matter of law because

again, they didn’t have the authority to act.

Professor Gerhardt, you have opined that the foundations for the

President’s actions are sound and the appointments are not unprecedented or reckless and will withstand legal scrutiny; is that correct?

Mr. GERHARDT. That is correct, sir.

Mr. DAVIS. So then is it fair to say that in your opinion, these

appointees do have authority to act because the President’s appointments were lawful?

Mr. GERHARDT. That would be the case I would make, yes.

Mr. DAVIS. So if the appointments were lawful, can’t we dismiss

all this hype talk about these nominations creating a cloud over

these agencies’ decisions?

Mr. GERHARDT. Well, there, sir, I might have to actually slightly

disagree with you. Here is where maybe being a law professor is

a bit of a confounding thing. I actually do believe in dialog. I actually do believe in give-and-take, and I think that’s a robust and important part of our democratic system.

Mr. DAVIS. And I would certainly agree with that. But isn’t it a

fact that all agency decisions or judicial decisions, regardless of

whether or not a recess appointment had been made, are vulnerable to being challenged in court?

Mr. GERHARDT. You are saying, is it possible for anything to be

challenged in court? The answer is yes. It could be challenged in

court. But that doesn’t mean it will be struck down.

Mr. DAVIS. In fact, would you agree that for the most major proposed regulations, judicial review of some kind is almost certain to

follow?

Mr. GERHARDT. Yes, sir. It reminds me of the scene in Shakespeare where two characters come to the ocean, and one says to the

other, I can summon great creatures from the deep, and the other

says, yes, but will they come? So you can sue and you can litigate,

but it doesn’t necessarily mean that will bring it down.
141

Mr. DAVIS. In fact, two rules recently promulgated by the NLRB

to reform election rules and require the posting of workers’ rights

are being challenged by the Chamber of Commerce and other business groups right now. So I really think it’s sort of a false premise

to say that recess appointments are going to create litigation when

the litigation is likely to take place in any event, whether these are

recess appointees or any other kind of appointees. Individuals still

have the option to ask for judicial review.

Mr. GERHARDT. Yes, sir. I think that it is quite likely. This is an

era of litigation, and litigation is oftentimes caused by another

means.

Mr. DAVIS. Thank you very much.

I have no further question, Mr. Chairman. I yield back.

Chairman ISSA. The gentleman yields back.

With that, we go to the gentleman from Cleveland Ohio, a distinguished mayor in his own right, Mr. Kucinich.

Mr. KUCINICH. Thank you very much, Mr. Issa. It is good to be

here with you.

I have been listening to some of the testimony from my office as

well as here. And I keep hearing criticism of the President for not

giving the Senate enough time to consider his nominees for the

NLRB before making recess appointments.

Now, Mr. Rivkin, isn’t it true that President Bush at least made

two recess appointments to the board, Mr. Cowen and Mr. Bartlett,

without ever nominating either of them to the Senate at all; is that

true?

Mr. RIVKIN. Well, I’m not sure, Congressman Kucinich if it’s

true. I know NLRB is not——

Mr. KUCINICH. Well, let me assert for the record that it is true.

And Mr. Pincus——

Mr. RIVKIN. Let me just say——

Mr. KUCINICH. I have to move on to Mr. Pincus. You know, you

didn’t give me the answer.

Mr. Pincus, as slide 10 shows—could we have the slide put up

here? Thank you very much.

That slide shows President Bush’s recess appointments. He made

eight recess appointments to the NLRB during his presidency. Now

did the Chamber of Commerce object to Mr. Bush’s recess appointments that you know of?

Mr. PINCUS. I don’t know, Congressman. But none of them were

made in the circumstances here.

Mr. KUCINICH. Okay. So you don’t know what the Chamber did;

okay.

The National Labor Relations Board, Mr. Pincus, ensures protection of workplace rights for union and nonunion workers alike.

Now slide six—go to slide six—shows the NLRB protects the right

to form or join a union, the right to bargain for wages, benefits, the

right to decent working conditions, and the right to take action

with coworkers to improve working conditions.

Now, Mr. Pincus, you are here today representing the Chamber

of Commerce, correct?

Mr. PINCUS. Yes.

Mr. KUCINICH. And the Chamber does represent business interests, correct?
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Mr. PINCUS. Yes.

Mr. KUCINICH. And on behalf of those business interests the

Chamber represents, it usually doesn’t advocate for greater restrictions on company management, right?

Mr. PINCUS. I don’t represent the Chamber in connection with

labor issues though. That’s really outside my area of expertise.

Mr. KUCINICH. But you represent the interests of company management, of CEOs at some of the most powerful companies in the

country, right?

Mr. PINCUS. I don’t with respect to any labor law issues.

Mr. KUCINICH. What about with respect to corporate policy?

Mr. PINCUS. Certainly, I have clients who are individuals. I’ve

got clients who are companies.

Mr. KUCINICH. Well, let me ask you, hasn’t the Chamber filed a

lawsuit against the NLRB for its rule requiring employers to post

a notice explaining employees’ rights to unionize? Are you familiar

with that?

Mr. PINCUS. I know, Congressman, that the Chamber has challenged an NLRB rule. I’m not representing it with respect to that

issue. Mr. Carter is more of an expert on that than I am.

Chairman ISSA. The chair will stipulate that there is, in fact, an

open case disputing the legitimacy of that.

Mr. KUCINICH. I appreciate that the chair could answer the question; Mr. Pincus couldn’t. But hasn’t the Chamber, Mr. Pincus, filed

a lawsuit against the NLRB for its rule reforming election procedures to alleviate the delays, abuse of process, and unnecessary

litigation which plagued the current system for workers who want

to vote on whether to have a union?

Mr. PINCUS. I know the Chamber is one of the parties challenging that rule, yes.

Mr. KUCINICH. So, as a representative of the Chamber of Commerce, a board without a quorum that can’t enforce workers’ rights

is somewhat ideal, isn’t it?

Mr. PINCUS. I don’t think that a board—that a government agency that can’t act is ideal. On the other hand, our constitutional system, as Senator Lee said quite eloquently, I think anticipates there

are going to be these collisions that have to get worked out. When

the government had to close because there was no funding because

an appropriations bill hadn’t been passed, I think everyone would

agree that wasn’t ideal either, but it got worked out.

Mr. KUCINICH. It got worked out. But what hasn’t been worked

out here is the Chamber’s consistent opposition to the NLRB. And

frankly, the concern that I have, Mr. Chairman, is that these oppositions to the recess appointments—and what they really represent

is opposition to the NLRB because the witness didn’t give us any

information about what they did when President Bush made the

appointments.

So I thank very much to the witnesses for their participation.

I thank the chair for the opportunity to be here.

Chairman ISSA. Thank you.

Ambassador Gray, as far as you know, all of those appointments

that were up I think in slide 10, these all occurred during mutually

agreeable recess events?

Mr. GRAY. Yes, sir.
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Chairman ISSA. So the fact is, the Senate allowed for recess appointments by its very design, along with the House?

Mr. GRAY. Absolutely. There’s nothing—nothing illegal or unconstitutional about a recess appointment except in the context when

there’s no recess.

Chairman ISSA. And I would like to look at all five of you—and

I will take a head nod—nobody here today for the whole several

hours, first or second panel, objected to the power of a recess appointment; is that correct?

So there’s no dispute that the President has an absolute constitutional—one would say obligation to keep the government running

during recesses. And that’s why the Founding Fathers gave a recess appointment authority; correct?

Mr. Gerhardt, you have been very good and I think you have

been balanced in trying to answer questions, even though you

somewhat disagree with some of the other panelists. You said

something earlier that I focused on a little bit and that’s, since the

administration itself says there is litigation risk, I thought I heard

you say—and maybe you want to correct that—that there wasn’t

because there was risk that it would be upheld.

Isn’t there litigation risk? And isn’t that risk potentially leading

for this committee to the fact that NLRB or the Consumer Financial Protection Bureau would have laws similar to the New Steel

that might have to be invalidated? Isn’t that a risk? Not just a risk

of litigation but a risk that their actions could leave them not valid

in what they do between now and whenever the Supreme Court finally acts?

Mr. GERHARDT. I very much appreciate the question, Mr. Chairman. I don’t think the fact that the OLC memo mentioned that

there’s litigation risk tells us anything about the merits of the case.

Chairman ISSA. Sure. And Mr. Davis, when he originally posed

that—I don’t think he knows the outcome. It might be—if it goes

up and says, hey, they were in recess, then there’s no risk to these

appointments. But there may be some risk to the law from January

23rd—December 23rd. But let’s just assume that the court divines

that they weren’t in recess on the 23rd; they were in recess on the

24th for purposes. Then nothing happens. All we have had is a lot

of litigation for a period of time.

What if it doesn’t happen? This committee came together to ask

all of you and our first witness about what if. And I will start with

Mr. Carter, and I will sort of go from right to left this time. What

if, in fact, we find that these appointments—one or more of them—

would be considered to be inappropriate, and we assume it would

be all of them or none of them. What is the risk to the actions of

the NLRB and these individuals, three individuals—both parties—

and obviously the lesser actions, specifically, of the new director?

Mr. CARTER. Mr. Chairman, that’s the greatest danger here is

the volume of risk. The volume of risk is expansive. Unlike the situation that Congressman Davis was describing, which is, well,

every bit of litigation is subject to appeal, right? I mean, so what’s

the difference? What we’re talking about here is an agency that is

acting ultra vires with the NLRB. It’s not one or two of the cases

that might be brought to appeal by one of the litigants. It’s every

case that they decide. It’s every regulation that they implement.
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It’s every official action that they take. And those affect real people

with real rights who will really be hurt.

Two examples, if I may. Let’s take a situation where an employer

is told by the NLRB this coming year that they have legally relocated work from one manufacturing plant to another.

Chairman ISSA. You mean, maybe to South Carolina?

Mr. CARTER. Let’s say to South Carolina, sir.

Chairman ISSA. Oh, wait a second; that one got sort of dropped

once the union got what they wanted. Okay. Go ahead. Continue.

Mr. CARTER. Let’s say West Virginia, my home State, where we

really need jobs. And the National Labor Relations Board says, you

can’t put a new plant there, employer. Everything you put into that

re-engineering and that plant, all the people that you’ve hired and

their livelihood that they’ve already taken out mortgages on and

bought cars with, that’s all gone. They don’t have jobs. You don’t

have use of that plant. We’re transferring that work back. But

then——

Chairman ISSA. But couldn’t the people of West Virginia assume

that the President was inappropriate in the recess decision and

just decide to ignore it? Couldn’t they just ignore what the President’s done since he ignored what the Senate said? I mean, isn’t

there a constitutional power of the House, the Senate, the Supreme

Court, and maybe, just maybe the American people? I mean, I

know they’re not explicitly named, except I thought they had these

rights, you know, life, liberty, and the pursuit of happiness. And

there’s nothing that has ever made me happier than a paycheck.

Mr. CARTER. Anything that this committee can do to ensure that

the citizenry is free from abuse by the government, which is the

purpose of the Constitution, would be extremely welcomed by any

citizen so affected.

But it’s not just companies with risk. It’s not just employees.

Chairman ISSA. I wasn’t thinking of a company ignoring it. I was

thinking of those citizens not letting themselves be laid off.

Mr. CARTER. Mr. Chairman, consider the last one. And I won’t

trouble you anymore. But consider this hypothetical—and it’s not

a hypothetical. What if I’m part of a shop and my employer is abusing me and those who I work with. And I want to form a union.

And I have a right to form a union. So I file a petition with the

National Labor Relations Board. And the National Labor Relations

Board comes in, and they hold an election, and that union is certified to be my representative, and that union begins to bargain for

me. And then a Federal court says, it’s unconstitutional. They can’t

certify you. It’s an ultra vires action. I decertify that election result.

What happens to the labor strife when those employees who had

been bargaining all of a sudden don’t have a bargaining representative? Do you think they would put a picket line up? I think in my

State they would. What happens to commerce? What happens

when that strike starts? And what happens to that employer? What

happens to products? Real people, real rights, real ramifications,

really dangerous, what these recess appointments have done to our

labor relations system in this country.

Chairman ISSA. Thank you.

Mr. Rivkin.

Mr. RIVKIN. Thank you, Mr. Chairman.
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Two points for you very briefly.

First of all, with respect to Professor Gerhardt, I think that the

fact that OLC—and Mr. Gray made this point earlier—mentions,

albeit in a fairly mild language the possibility of a litigation risk,

is, A, unprecedented and quite probative. And second, picking up

on an excellent point made by Mr. Carter is a fundamental difference, quite aside from sort of a specific economic footprint is a

fundamental difference from a constitutional perspective between

challenging a specific decision and challenging the legitimacy of a

whole subset of a tenure of a given agency. I think it’s far more

destructive not only because of all the things that would come

down, but frankly, it does not inspire, especially at a time when so

many Americans are questioning some of the behavior of all

branches of our government to find that a given agency or two

agencies have been acting unconstitutionally for a couple of years

is a very bad thing in terms of maintaining the confidence of the

people in the government, quite aside from all of the cost of businesses and commerce involved.

Chairman ISSA. Thank you.

Mr. Gerhardt, and in the narrow question of, if it is ruled that

these are not, would you like to speak to the consequences?

Mr. GERHARDT. Sure. And I appreciate that.

Assuming that that were to occur, there are a couple of things.

One is, I think you still may have a mootness problem. That is to

say, so much has already transpired; to what extent can any of

that be undone ever by a court? And then I think the second thing

I would just add to all of that is just to reiterate——

Chairman ISSA. But in a light of New Steel, they did unring the

bell, didn’t they?

Mr. GERHARDT. No. I understand that.

Chairman ISSA. So a small injustice, they can unring, but thousands of them you think the court wouldn’t do it? Wouldn’t that fly

in the face of Miranda? They unrung a lot of bells with Miranda,

didn’t they?

Mr. GERHARDT. They unrung a lot of bells with that. But we’re

talking—so in a way, we can’t have our cake and eat it, too, here.

Chairman ISSA. But isn’t the Court—the Supreme Court, specifically, which we suspect this will get to them—aren’t they bound

not to weigh competitive harm but in fact to weigh the constitutional issue? Did they have the ability to—I mean, look, Dred Scott

could have been kept because it has been around for a long time,

and there was a lot of harm to reversing it, wasn’t there?

Mr. GERHARDT. Well, the reversal, of course, occurred through a

constitutional amendment after a bloody civil war. So that’s about

as consequential——

Chairman ISSA. So your assumption would be that, you know,

probably that that is one of those examples where the court would

just say, well, we’re unringing the bell, but we are granting no relief to the injured?

Mr. GERHARDT. I am saying that I think that that is one of the

justiciability problems here.

Chairman ISSA. Mr. Pincus, I’m sure you concur. Just give us

your short concurrence here.
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Mr. PINCUS. I was going to say I—let me start with what the

courts will do. I think it’s quite clear that as long as the issue is

preserved by an individual and the thousands and thousands of individuals and companies that have been harmed and their individual cases, they’re all going to get relief. You know, in New Process Steel, I think there were 500 decisions that were overturned.

And I don’t there is any basis—and in fact, I cite some decisions

in my testimony.

Chairman ISSA. So this is sort of a classic Chamber question of,

the Chamber essentially has to find a way to form a class to make

sure everybody’s onboard; otherwise their failure to object could

lead them to live with the decision?

Mr. PINCUS. I think that there’s a theoretical risk of that. But

I think this issue has gotten so much attention that I don’t think

there’s any company that is going to be subject to either an order

of the NLRB or an enforcement action or other action by the bureau that is not going to know to have a paragraph in it’s complaint saying, and by the way, the director or the two members

were appointed unconstitutionally. I think it would be probably

close to——

Chairman ISSA. Three members.

Mr. PINCUS. Three members, yes.

So I think there will be relief. And I think that’s what makes the

case, the situation very different from Mr. Davis’. And sure, there

are a lot of judicial review of government actions. The government

wins almost all of those cases. And they are all, of course, case-specific. What we are talking about here are thousands, maybe, certainly hundreds of government decisions that will all be set aside

at once. And that is obviously a big waste, especially, as I said in

my testimony, when some of them are going to involve fraudsters,

who could have been prosecuted by the preappointment bureau or

by the FTC and who will now go fee or have to go back to square

one. There is a lot of harm that is going to happen I think and a

lot of wasted government resources, unfortunately.

Chairman ISSA. Ambassador, this may not be—the cost may not

be right up your alley. But do you want to take a little crack at

it?

Mr. GRAY. Yes, sir. Well, I did put it in my prepared testimony,

which also deals with New Process, which was where they didn’t

have a quorum. But in Buckley v. Valeo—and not to throw a monkey wrench into this—but there were questions about the makeup

of the FTC because of the appointments clause. And I will just read

you what the court said: It is also our view that the commission’s

inability to exercise certain powers because of the method by which

its members have been selected should not affect the validity of the

commission’s administrative actions and determinations to this

date. So Buckley v. Valeo, to the extent that it’s a precedent—and

Andy is the former SG—that looks like it may cast some doubt on

the applicability of your process.

Chairman ISSA. Well, I’m not going to allow any further follow

up on this. I think for purposes of the record, we’ve been pretty

clear.

I’m going to ask you one final one, and this is one that you may

all weigh in on as constitutional scholars and only in that way.
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Historically, the court has held very little—they’ve respected directions from the Congress when it came in the form of a law. They

have not ordinarily given standing. And Senator Lee said that in

his testimony in the Q&A. But in the case in which the House of

Representatives has not granted the Senate the right to adjourn,

does, in your opinion, the House of Representatives have a separate

action, separate from law but as a body of government constitutionally specifically given a right/obligation, do you believe that we

have a potential standing?

Mr. GRAY. I will just say, first, I’m skeptical. But I don’t think

it matters. There is going to be a challenge. There is going to be

a ripe case that comes up. You will file amicus briefs, and what you

say will be taken very, very seriously.

Mr. RIVKIN. I think that you do have a standing to indicate the

constitutional authority under section 5, clause 4. And as much as

I respect my good friend and former boss, Mr. Gray, I think that

it is essential for you to speak with your own independent voice for

a simple reason that, if you look at the separation of powers issues

over the 200-plus years, and only see analysis, the behavior of each

branch, at each particular point is given tremendous weight. It is

your constitutional interests to vindicate. The fact that private

plaintiffs may well strike down all of the regulatory emanations

from NLRB and CFPB does not substitute for at least trying, if you

fail in motion practice, the motion to dismiss because of lack of

standing, and I don’t think you will, it’s still worth trying to at

least demonstrate that you take your constitutional authority seriously.

Chairman ISSA. Mr. Carter.

And Mr. Gerhardt, I am coming to you as the last word.

Mr. CARTER. I have been persuaded by both of these fine gentlemen. My only word of caution, if it’s of any value at all is, I was

very, very convinced by comments from the Congressman regard

the inappropriate invasion of the House’s jurisdiction as well as the

Senate’s when the chief executive sought to define what was adjournment, what was recess. That is the balance that I would encourage the House to consider, because ultimately, what this is, is

a separation of powers argument, where the chief executive has

plainly infringed upon the legislative branch’s authority.

Chairman ISSA. Mr. Pincus, you have the second last word. Briefly.

Mr. PINCUS. I agree with Ambassador Gray. I would add one

other caution, which is, I think—it’s inactions between the

branches, or their Representatives, that the courts are most likely

to invoke the political question doctrine. And I think that’s not likely to happen in the kind of lawsuit that we’re talking about, where

there’s a private party who’s the plaintiff and the House or Members of the House and the Senate appear as amici.

Chairman ISSA. Mr. Gerhardt, I am thoroughly looking forward

to seeing that because on this, I don’t think the question is the

same as the ones that you have been asked up until now.

Mr. GERHARDT. Right. And it will not surprise you, therefore, Mr.

Chairman, that I probably agree with Ambassador Gray on this

one. I think it’s not likely. I think the House would have inde-
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pendent standing, but that may just be a technical matter. There’s

no question at all that the House would be heard on that.

Chairman ISSA. What do you think about Mr. Rivkin saying, but

you ought to try?

Mr. GERHARDT. Well, you could try. But I think what I think we

see from the standing cases is that it’s not likely that the court is

going to recognize some independent standing on the part of the

House here for the reasons that I think Mr. Pincus suggests and

I think for reasons we’ve seen in other cases in the past. In other

cases where recess appointments have been challenged, the Pocket

Veto Case, for example, we don’t see the House given independent

standing in that circumstance.

Chairman ISSA. But the executive branch often asserts independent standing——

Mr. RIVKIN. Just a second—a point, as litigators, we all know

there is enormous difference in participating as amicus and participating as a party. And even if you don’t gain independent standing,

I’m sure Professor Gerhardt would agree, you would gain standing,

piggyback standing because it is not subject to the same constitutional analysis. It is important for you to speak in as robust a

voice. And with all due respect, filing amici briefs is not the same

thing.

Chairman ISSA. Well, I thank you all for your opinions. As chair,

the challenge I have is the question we asked you all here for,

which is the potential near irreparable harm to individuals in the

execution of government, the cost to government in dollars probably is de minimis, even if it’s in the millions, compared to the

human lives of businesses and others around the country who will

assume one thing and, if it’s reversed, deal years later with a very

different outcome. So it is what this committee I think will continue to try to evaluate. I would ask only two things and that is,

as you look back on today’s statements, questions, and answers,

we’ll hold the record open for 5 additional days and longer, if I get

a request from any of you, to revise and extend or give us any additional information you think would help us in our deliberative process. Seeing only shaking heads positive, we stand adjourned.

And, by the way, that’s adjourned, not recessed.

[Whereupon, at 1:25 p.m., the committee was adjourned.]

[The prepared statement of Hon. Gerald E. Connolly follows:]
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