19–006 

112TH CONGRESS REPT. 112–461 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

REGULATORY FREEZE FOR JOBS ACT OF 2012 

APRIL 27, 2012.—Ordered to be printed 

Mr. SMITH of Texas, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 4078] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 4078) to provide that no agency may take any significant regulatory action until the unemployment rate is equal to or less than 

6.0 percent, having considered the same, report favorably thereon 

with an amendment and recommend that the bill as amended do 

pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 2 

Purpose and Summary ............................................................................................ 3 

Background and Need for the Legislation ............................................................. 3 

Hearings ................................................................................................................... 8 

Committee Consideration ........................................................................................ 8 

Committee Votes ...................................................................................................... 8 

Committee Oversight Findings ............................................................................... 14 

New Budget Authority and Tax Expenditures ...................................................... 15 

Congressional Budget Office Cost Estimate .......................................................... 15 

Performance Goals and Objectives ......................................................................... 19 

Advisory on Earmarks ............................................................................................. 20 

Section-by-Section Analysis .................................................................................... 20 

Dissenting Views ..................................................................................................... 21 


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The Amendment 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Regulatory Freeze for Jobs Act of 2012’’. 

SEC. 2. DEFINITIONS. 

In this Act— 

(1) the terms ‘‘agency’’ and ‘‘rule’’ have the meanings given such terms under 

section 551 of title 5, United States Code; 

(2) the term ‘‘regulatory action’’ means any substantive action by an agency 

that promulgates or is expected to lead to the promulgation of a final rule or 

regulation, including notices of inquiry, advance notices of proposed rulemaking, 

and notices of proposed rulemaking, but not including any substantive action 

by an agency for repealing a rule; 

(3) the term ‘‘significant regulatory action’’ means any regulatory action that 

is likely to result in a rule or guidance that may— (A) have an annual cost to the economy of $100,000,000 or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, small 

entities, or State, local, or tribal governments or communities; 

(B) create a serious inconsistency or otherwise interfere with an action 

taken or planned by another agency; 

(C) materially alter the budgetary impact of entitlements, grants, user 

fees, or loan programs or the rights and obligations of recipients thereof; 

or 

(D) raise novel legal or policy issues; and 

(4) the term ‘‘small entities’’ has the meaning given such term under section 

601(6) of title 5, United States Code. 

SEC. 3. SIGNIFICANT REGULATORY ACTIONS. 

(a) IN GENERAL.—No agency may take any significant regulatory action during 

the period beginning on the date of enactment of this Act and ending on the date 

that the Secretary of Labor submits the report under subsection (b). 

(b) DETERMINATION.—The Secretary of Labor shall submit a report to the Director 

of the Office of Management and Budget whenever the Secretary determines that 

the Bureau of Labor Statistics average of monthly unemployment rates for any 

quarter beginning after the date of enactment of this Act is equal to or less than 

6.0 percent. 

SEC. 4. WAIVERS. 

(a) IN GENERAL.—Notwithstanding any other provision of this Act, an agency may 

take a significant regulatory action only in accordance with either subsection (b) or 

subsection (c) during the period described in section 3(a). 

(b) PRESIDENTIAL WAIVER.—An agency may take a significant regulatory action if 

the President determines by Executive order that the significant regulatory action 

is— 

(1) necessary because of an imminent threat to health or safety or other emergency; 

(2) necessary for the enforcement of criminal laws; 

(3) necessary for the national security of the United States; or 

(4) issued pursuant to any statute implementing an international trade agreement. 

(c) CONGRESSIONAL WAIVERS.— 

(1) SUBMISSION.—For any significant regulatory action not eligible for a Presidential waiver pursuant to subsection (b), the President may submit a written 

request to Congress for a waiver of the application of section 3 to the significant 

regulatory action. 

(2) CONTENTS.—A submission by the President under this subsection shall— 

(A) identify the significant regulatory action and the scope of the requested waiver; 

(B) give all reasons why the significant regulatory action is necessary to 

protect the public health, safety, or welfare; and 

(C) explain why the significant regulatory action is ineligible for a Presidential waiver pursuant to subsection (b). 

(3) CONGRESSIONAL ACTION.—Congress shall give expeditious consideration 

and take appropriate legislative action with respect to any submission by the 

President under this subsection. 


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1See Nicole V. Crain & W. Mark Crain, The Impact of Regulatory Costs on Small Firms, 

SMALL BUSINESS ADMINISTRATION, 6 & 48 (Sept. 2010), available at http://archive.sba.gov/advo/ 

research/rs371tot.pdf (last accessed Apr. 23, 2012). 2 James L. Gattuso, Diane Katz & Stephen A. Keen, Red Tape Rising: Obama’s Torrent of New 

Regulation, HERITAGE FOUNDATION (Oct. 26, 2010), available at http://www.heritage.org/reContinued 

SEC. 5. JUDICIAL REVIEW. 

(a) REVIEW.—Any party adversely affected or aggrieved by any regulatory action 

taken in violation of this Act is entitled to judicial review in accordance with chapter 7 of title 5, United States Code. Any determination by either the President or 

the Secretary of Labor under this Act shall be subject to judicial review under such 

chapter. 

(b) JURISDICTION.—Each court having jurisdiction to review any significant regulatory action for compliance with any other provision of law shall have jurisdiction 

to review all claims under this Act. 

(c) RELIEF.—In granting any relief in any civil action under this section, the court 

shall order the agency to take corrective action consistent with this Act and chapter 

7 of title 5, United States Code, including remanding the significant regulatory action to the agency and enjoining the application or enforcement of that significant 

regulatory action, unless the court finds by a preponderance of the evidence that application or enforcement is required to protect against an imminent and serious 

threat to the national security of the United States. 

(d) REASONABLE ATTORNEY’S FEES FOR SMALL BUSINESSES.—The court shall 

award reasonable attorney’s fees and costs to a substantially prevailing small business in any civil action arising under this Act. A small business may qualify as substantially prevailing even without obtaining a final judgment in its favor if the 

agency that took the significant regulatory action changes its position after the civil 

action is filed. 

(e) LIMITATION ON COMMENCING CIVIL ACTION.—A party may seek and obtain judicial review during the 1-year period beginning on the date of the challenged agency action or within 90 days after an enforcement action or notice thereof, except that 

where another provision of law requires that a civil action be commenced before the 

expiration of that 1-year period, such lesser period shall apply. 

(f) DEFINITION.—In this section, the term ‘‘small business’’ means any business, 

including an unincorporated business or a sole proprietorship, that employs not 

more than 500 employees or that has a net worth of less than $7,000,000 on the 

date a civil action arising under this Act is filed. 

Purpose and Summary 

H.R. 4078, the ‘‘Regulatory Freeze for Jobs Act of 2012’’ (‘‘the 

Freeze Act’’ or ‘‘the Bill’’), would put a moratorium on new significant regulations until the national unemployment rate stabilizes at 

or below 6.0%. The President could waive the moratorium by Executive Order and issue significant regulations for certain specific 

reasons, such as national security. With the consent of Congress, 

during the moratorium period the President may take any other 

significant regulatory action necessary to protect the public health, 

safety, or welfare. A significant regulatory action taken during the 

moratorium would be judicially reviewable, and a small business 

that successfully challenges such a regulation could recover attorney’s fees. 

Background and Need for the Legislation 

A. OVERREGULATION IMPEDES JOB CREATION AND ECONOMIC GROWTH

Wasteful, excessive and unnecessary regulations impede job creation and economic growth. A study for the Small Business Administration found that Federal regulations cost the American economy 

$1.75 trillion dollars annually, which is equal to about 14% of the 

national income 1 and ‘‘nearly twice as much as all individual income taxes collected last year.’’ 2 ‘‘Had every U.S. household paid 


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search/reports/2010/10/red-tape-rising-obamas-torrent-of-new-regulation (last accessed Apr. 23, 

2012). 3 Crain & Crain, note 1 supra, at iv. 4T. Randolph Beard et al., Regulatory Expenditures, Economic Growth and Jobs: An Empirical Study, PHOENIX CENTER FOR ADVANCED LEGAL & ECONOMIC POLICY STUDIES, 5 (Apr. 2011), 

available at http://www.phoenix-center.org/PolicyBulletin/PCPB28Final.pdf (last accessed Apr. 

23, 2012). 5 Id. at 16. 6See Dennis Jacobe, ‘‘Health Costs, Gov’t Regulations Curb Small Business Hiring,’’ GALLUP

(Feb. 15, 2012), available at http://www.gallup.com/poll/152654/Health-Costs-Gov-RegulationsCurb-Small-Business-Hiring.aspx (last accessed Apr. 23, 2012). 7 Jeff Zeleny & Megan Thee-Brenan, ‘‘New Poll Finds a Deep Distrust of Government,’’ NEW

YORK TIMES, Oct. 25, 2011, available at http://www.nytimes.com/2011/10/26/us/politics/poll-findsanxiety-on-the-economy-fuels-volatility-in-the-2012-race.html (last accessed Apr. 23, 2012). 8See ‘‘Survey: Majority of Americans Support Reforms to Federal Regulatory Process,’’ NFIB, 

Feb. 21, 2012, available at http://www.sensibleregulations.org/wp-content/uploads/2012/02/FinalFinal-Final-SBSR-Poll-Press-release-0221.pdf (last accessed Apr. 23, 2012). 9 Bill Clinton, It’s Still the Economy, Stupid, NEWSWEEK, June 19, 2011, available at http:// 

www.thedailybeast.com/newsweek/2011/06/19/it-s-still-the-economy-stupid.html (last accessed 

Apr. 23, 2012). 10 Barack Obama, ‘‘Toward a 21st Century Regulatory System,’’ WALL STREET JOURNAL, Jan. 18, 2011, available at http://online.wsj.com/article/ 

SB10001424052748703396604576088272112103698.html (last accessed Apr. 23, 2012). 11Press Release, ‘‘White House Announces Steps to Expedite High Impact Infrastructure 

Projects to Create Jobs,’’ Aug. 31, 2011, available at http://www.whitehouse.gov/the-press-office/ 

2011/08/31/white-house-announces-steps-expedite-high-impact-infrastructure-projects (last 

accessed Apr. 23, 2012). 

an equal share of the Federal regulatory burden, each would have 

owed $15,586 in 2008.’’ 3 Another study found that ‘‘[e]ach milliondollar increase in the regulatory budget costs the economy 420 private sector jobs.’’ 4 To extrapolate, ‘‘[a]s the size of the regulatory 

budget decreases, each lost regulator results in a gain of $6.2 million in annual GDP, and each lost regulatory position is offset by 

98 private sector jobs. Switching to the mindset of a budget increase, we can conclude that the annual cost of a new regulator is 

about $6.2 million in GDP and 98 private sector jobs. In 2009, U.S. 

per-capita GDP was roughly $46,000, meaning each regulator destroys the economic output equivalent of about 134 persons and 

eliminates the jobs of nearly as many. These effects are sizeable.’’ 5

A recent Gallup Poll found that, among the 85% of U.S. small 

business owners who are not hiring, nearly half (46%) of these 

cited being ‘‘worried about new government regulations’’ as a reason they are not hiring.6 A New York Times poll conducted in October 2011 found that ‘‘half of the public favors reducing or repealing 

regulations on businesses in the United States.’’ 7 And 63% of respondents to a poll conducted for the National Federation of Independent Businesses said ‘‘rules issued over the last 5 years have 

done more to hurt than to help small businesses.’’ 8

President Clinton, for example, recognizes that over-regulation is 

inimical to job creation, and has urged the Federal Government to 

grant states waivers from environmental regulations for construction projects.9 President Obama rhetorically seconded this viewpoint in a Wall Street Journal op-ed: ‘‘Sometimes, those rules have 

gotten out of balance, placing unreasonable burdens on business— 

burdens that have stifled innovation and have had a chilling effect 

on growth and jobs.’’ 10 On August 31, 2011, President Obama 

asked several cabinet secretaries each to identify three ‘‘high-impact, job-creating infrastructure projects that can be expedited 

through outstanding review and permitting processes.’’ 11 The 

President described this as ‘‘a common-sense step to speed job creation in the near term while increasing our competitiveness and 


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12 Id. 13Press Release, ‘‘Obama Administration Announces Selection of 14 Infrastructure Projects to 

be Expedited Through Permitting and Environmental Review Process,’’ Oct. 11, 2011, available at http://www.whitehouse.gov/the-press-office/2011/10/11/obama-administration-announces-selection-14-infrastructure-projects-be-e (last accessed Apr. 23, 2012). 14See Exec. Order 13563, § 6(a) (Jan. 18, 2011). 15See Exec. Order 13579, § 2(a) (July 11, 2011). 16See James L. Gattuso & Diane Katz, ‘‘Red Tape Rising: Obama-Era Regulation at the 

Three-Year Mark,’’ HERITAGE FOUNDATION (Mar. 13, 2012), at 5, Chart 2, available at http://www.heritage.org/research/reports/2012/03/red-tape-rising-obama-era-regulation-at-thethree-year-mark (last accessed Apr. 23, 2012). 17See id. 18 Id. at 6. 19See, e.g., Peter Baker, ‘‘Obama Making Plans to Use Executive Power,’’ NEW YORK TIMES, Feb. 12, 2010 (Dan Pfeiffer: ‘‘In 2010, executive actions will also play a key role in advancing 

the agenda.’’); David Nakamura & Felicia Sonmez, ‘‘Obama appoints Richard Cordray to head 

consumer watchdog bureau,’’ WASHINGTON POST, Jan. 4, 2012 (President Obama: ‘‘When Congress refuses to act and as a result hurts our economy and puts people at risk, then I have 

an obligation as president to do what I can without them.’’). 

strengthening the economy in the long term.’’ 12 On October 11, 

2011, in the interest of job creation and economic recovery the 

President announced 14 projects for expedited environmental review and permitting.13 The President has directed agencies to ‘‘consider how best to promote retrospective analysis of [economically 

significant] rules that may be outmoded, ineffective, insufficient, or 

excessively burdensome, and to modify, streamline, expand, or repeal them. . . .’’ 14 President Obama also urged independent agencies to ‘‘consider how best to promote’’ the same regulatory review.15 Speaking to a joint session of Congress on September 8, 

2011, President Obama said, ‘‘We should have no more regulation 

than the health, safety and security of the American people require. Every rule should meet that common-sense test.’’ 

B. REGULATORY COSTS ARE INCREASING UNDER THE

OBAMA ADMINISTRATION

The national unemployment rate has not been below 6.0% since 

July 2008—but under the Obama Administration, the cost of regulations is increasing and the fear that yet another regulatory wave 

is swelling continues to stifle economic recovery. The need for regulatory restraint is apparent from the fact that agencies presently 

are issuing more of the regulations that are most costly to job creators. 

President Obama’s Fall 2011 Unified Agenda of Regulatory and 

Deregulatory Activity lists 133 economically significant regulations 

in the proposed or final stage of the rulemaking process (5 more 

are in the pre-rule stage).16 By comparison, the Fall 2003 Unified 

Agenda—issued in the third year of the first term of the Bush Administration—listed 62 such economically significant regulations.17

‘‘In the past decade, the number of economically significant rules 

in the agenda has increased by more than 137 percent, rising from 

56 in spring 2001 to 133 in fall 2011.’’ 18 These 133 rules each represent at least $100 million in annual economic effects. This is consistent with the Obama Administration’s tactic of bypassing Congress and taking unilateral Executive action to advance its agenda.19

The regulatory burden on the American economy undeniably increased between 2001 and 2009. The Heritage Foundation estimates that President Bush added approximately $60 billion in anVerDate Mar 15 2010 00:33 Apr 28, 2012 Jkt 019006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6601 E:\HR\OC\HR461P1.XXX HR461P1

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20See James L. Gattuso, Obama’s Red Tape: Tsunami or Ripple?, HERITAGE FOUNDATION

(Nov. 8, 2011), available at http://www.heritage.org/Research/Reports/2011/11/Obamas-Regulations-Red-Tape-Tsunami-or-Ripple (last accessed Apr. 23, 2012). 21See Gattuso & Katz, note 16 supra, at 3. 22 111 P.L. 148 (Mar. 23, 2010). 23 111 P.L. 203 (July 21, 2010). 24ObamaCare: A Budget-Busting, Job-Killing Health Care Law, Jan. 6, 2011, at 7–8, available at http://www.speaker.gov/UploadedFiles/ObamaCareReport.pdf (last accessed Apr. 23, 2012). 

25Michael J. Ryan, Jr., U.S. Capital Markets Competitiveness: The Unfinished Agenda, Summer 2011, at 3, available at https://www.uschamber.com/sites/default/files/reports/ 

1107lUnfinishedAgendalWEB.pdf (last accessed Apr. 23, 2012). 26Davis Polk LLP, ‘‘Dodd-Frank Progress Report,’’ Apr. 2012, available at http:// 

www.davispolk.com/Dodd-Frank-Rulemaking-Progress-Report/(last accessed Apr. 24, 2012). 27George P. Shultz, et al., ‘‘Principles for Economic Revival,’’ WALL STREET JOURNAL, Sept. 

16, 2010, available at http://www.hoover.org/news/daily-report/48571 (last accessed Apr. 23, 

2012). 28 Id. 

nual regulatory costs over 8 years.20 But in just 3 years, President 

Obama adopted 106 major rules that impose on the private sector 

nearly $11 billion in one-time implementation costs and $46 billion 

in additional annual regulatory costs. By comparison, in his first 3 

years President Bush adopted 28 major rules that impose $8.1 billion in additional annual private sector costs. In 2011, the largest 

portion of these 106 major rules was made to implement DoddFrank. The most expensive were from the EPA, which issued five 

major rules costing more than $4 billion annually.21

The threat of even more significant regulations, to implement the 

Patient Protection and Affordable Care Act 22 and the Dodd-Frank 

Wall Street Reform and Consumer Protection Act 23, is another impediment to economic recovery. The President’s signature health 

care law, for example, ‘‘provides for the creation of nearly 160 

boards, bureaus, bureaucracies, and commissions. . . . Overall, the 

Federal Government is expected to issue roughly 10,000 pages of 

new regulations to govern the implementation of the new law.’’ 24

And ‘‘the Dodd-Frank Act is the most farreaching financial regulatory undertaking since the 1930’s, authorizing or requiring agencies to enact 447 new rules and complete 63 reports and 59 studies.’’ 25 Agencies already have missed more than two-thirds (69.8%) 

of Dodd-Frank’s rulemaking deadlines, and more than one-third of 

the rules required by the Act have not even been proposed yet.26

Consequently, ‘‘uncertainty reigns and nearly $2 trillion in cash 

sits in corporate coffers.’’ 27

C. THE NEED FOR A REGULATORY MORATORIUM

A September 16, 2010, op-ed by a group of Hoover Institution 

economists recommended a general regulatory freeze as part of a 

strategy for economic recovery: 

[E]nact a moratorium on all new regulations for the next 

3 years, with an exception for national security and public 

safety. Going forward, regulations should be transparent 

and simple, pass rigorous cost-benefit tests, and rely to a 

maximum extent on market-based incentives instead of 

command and control. Direct and indirect cost estimates of 

regulations and subsidies should be published before new 

regulations are put into law.28

Dr. Allan Meltzer, a co-author of the op-ed, separately called for ‘‘a 

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29 ‘‘Get a Job!,’’ REASON, Nov. 11, 2011, available at http://reason.com/archives/2011/10/18/geta-job/singlepage (last accessed Apr. 23, 2012). 30 ‘‘Time Out for Federal Regulation,’’ FORBES BLOG, Oct. 13, 2011, available at http:// 

www.forbes.com/sites/waynecrews/2011/10/03/time-out-for-federal-regulation/(last accessed Apr. 

23, 2012). 31 Jacobe, note 6 supra. 32Regulatory Freeze for Jobs Act of 2012: Hearing before the Subcomm. on Courts, Commercial 

and Administrative Law of the H. Comm. on the Judiciary, 112th Cong. (Feb. 27, 2012). 33 Id. at 15. 34See id. at 16. 35 Id. at 25. 36 Ibid. 37 Id. at 30, 31. 38 Id. at 30, 34–37, 37 and 41–43. 

rity.’’ 29 Wayne Crews, Vice President for Policy and Director of 

Technology Studies at the Competitive Enterprise Institute, has 

endorsed ‘‘a year-long moratorium on ‘significant’ rules, typically 

defined as those expected to cost $100 million annually.’’ 30 Analyzing the above-cited poll results, Gallup’s Chief Economist Dennis 

Jacobe, Ph.D., observed that ‘‘lawmakers could place a moratorium 

on new regulations for some period of time. In turn, this might provide the extra push needed to get small-business owners to decide 

to hire the employees they actually need and get the economy 

growing at a pace the average American can recognize as an economic recovery.’’ 31

D. LEGISLATIVE HISTORY OF H.R. 4078

On February 27, 2012, the Committee on the Judiciary’s Subcommittee on Courts, Commercial and Administrative Law held a 

hearing on the Freeze Act.32 At this hearing, the Subcommittee received testimony from three witnesses: Professors Allan H. Meltzer 

and John B. Taylor; and, Mr. Robert Weissman, President of Public 

Citizen, Inc. Professors Meltzer and Taylor testified in support of 

the Bill. In his testimony, Professor Meltzer explained that economic recovery and growth are stunted because ‘‘investors and producers are uncertain about regulation and taxation.’’ 33 According 

to Professor Meltzer, the Bill would prioritize employment and recovery by giving job creators greater confidence about future regulatory events.34 Professor Taylor testified that the economy has recovered at a much slower pace than it did from the recession of the 

early 1980’s ‘‘due to poor economic policy, including, among other 

things, a large increase in both the number of significant regulations and the regulatory uncertainty related to new legislation,’’ 

such as Dodd-Frank.35 In Professor Taylor’s view, this approach is 

based upon the misperception that the financial crisis and recession were caused by inadequate regulatory authority.36 Mr. 

Weissman testified against the Bill. Although he described the current unemployment rate as ‘‘scandalously’’ and ‘‘shamefully’’ high,37

Mr. Weissman testified that ‘‘excessive regulation is neither the 

cause of the jobs crisis nor a meaningful impediment to job creation’’; a lack of regulation contributed to the financial crisis and 

economic recession; ‘‘regulatory protections make our country 

stronger, safer and more just’’; and, the Bill could have the unintended consequence of blocking desirable regulations.38

In addition to the Freeze Act, several regulatory moratorium bills 

have been introduced in the 112th Congress. Senator Johnson’s (RWI) bill, S. 1438, would prohibit any Federal agency from enacting 

a new significant regulation, as defined by President Clinton in ExVerDate Mar 15 2010 00:33 Apr 28, 2012 Jkt 019006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6601 E:\HR\OC\HR461P1.XXX HR461P1

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ecutive Order 12866, until the national unemployment rate is at or 

below 7.7% (it was 7.8% when President Obama took office). S. 

1438 allows the President to waive the freeze and issue a new significant regulation ‘‘on the basis of national security or a national 

emergency,’’ or with the consent of Congress. On September 12, 

2011, Mr. Ribble introduced the House companion, H.R. 2898, to 

Senator Johnson’s bill. Other Members sponsoring regulatory 

freeze bills are: Mr. Young (H.R. 213 and H.R. 3181); Mr. Ribble 

(H.R. 1281 and H.R. 2898); Mr. Carter (H.R. 1235); Mr. Rogers 

(H.R. 3518); Mr. Hanna (H.R. 3257); and, Mr. Griffin (H.R. 3194). 

H.R. 3400, the ‘‘Jobs Through Growth Act,’’ contains a regulatory 

moratorium section under Title II. The Freeze Act utilizes concepts 

and language from these bills. 

In the 104th Congress, the House passed the Regulatory Transition Act of 1995 (‘‘RTA’’). In brief, the RTA would have put a moratorium on all rules—not just certain significant rules, as the Freeze 

Act does—until the earlier of either December 31, 1995, or a law 

was enacted requiring agencies to perform cost-benefit and risk-assessment analysis on all new regulations. The RTA excepted rules 

‘‘necessary because of an imminent threat to health or safety or 

other emergency’’ or to enforce civil rights laws, and also did not 

cover rules related to the military, foreign affairs, international 

trade, agency administration, the IRS, the Federal Reserve or 

FDIC, or to any agency action repealing, narrowing or streamlining 

a rule. Unlike the Freeze Act, the RTA did not allow for judicial 

review. After passing the House with bipartisan support, the RTA 

did not advance out of the Committee on Governmental Affairs in 

the Senate. 

Hearings 

On Monday, February 27, 2012, the Committee on the Judiciary’s 

Subcommittee on Courts, Commercial and Administrative Law held 

a hearing on H.R. 4078. Testimony was received from Professor 

John B. Taylor, George P. Shultz Senior Fellow in Economics at the 

Hoover Institution and the Mary and Robert Raymond Professor of 

Economics at Stanford University; Professor Allan H. Meltzer, Distinguished Visiting Fellow at the Hoover Institution and the Allan 

H. Meltzer University Professor of Political Economy at the Tepper 

School of Business, Carnegie Mellon University; and, Mr. Robert 

Weissman, President of Public Citizen, Inc. Without objection at 

the hearing, Mr. Coble entered into the record a letter from the 

U.S. Chamber of Commerce endorsing the Bill; Mr. Cohen submitted for the record a letter from the Coalition for Sensible Safeguards in opposition to the Bill. 

Committee Consideration 

On March 20, 2012, the Committee on the Judiciary met in open 

session and ordered the bill H.R. 4078 favorably reported, with an 

amendment, by a vote of 15 to 13, a quorum being present. 

Committee Votes 

By unanimous consent, an amendment in the nature of a substitute offered by Mr. Griffin was considered the base text for purposes of markup. In compliance with clause 3(b) of rule XIII of the 


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Rules of the House of Representatives, the Committee advises that 

the following rollcall votes occurred during the Committee’s consideration of H.R. 4078. 

1. Amendment #1, offered by Mr. Conyers, to amend the definition of ‘‘significant regulatory action’’ to exclude any rule or guidance intended to protect the privacy of Americans. Not agreed to 

by a vote of 12 to 17. 

ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................................. X 

Mr. Sensenbrenner, Jr. ........................................................................... X 

Mr. Coble ................................................................................................ X 

Mr. Gallegly ............................................................................................ X 

Mr. Goodlatte ......................................................................................... X 

Mr. Lungren ............................................................................................ X 

Mr. Chabot ............................................................................................. X 

Mr. Issa ..................................................................................................

Mr. Pence ...............................................................................................

Mr. Forbes .............................................................................................. X 

Mr. King ................................................................................................. X 

Mr. Franks ..............................................................................................

Mr. Gohmert ........................................................................................... X 

Mr. Jordan .............................................................................................. X 

Mr. Poe ...................................................................................................

Mr. Chaffetz ........................................................................................... X 

Mr. Griffin .............................................................................................. X 

Mr. Marino ..............................................................................................

Mr. Gowdy .............................................................................................. X 

Mr. Ross ................................................................................................. X 

Ms. Adams ............................................................................................. X 

Mr. Quayle .............................................................................................. X 

Mr. Amodei .............................................................................................

Mr. Conyers, Jr., Ranking Member ......................................................... X 

Mr. Berman ............................................................................................

Mr. Nadler .............................................................................................. X 

Mr. Scott ................................................................................................ X 

Mr. Watt ................................................................................................. X 

Ms. Lofgren ............................................................................................ X 

Ms. Jackson Lee .....................................................................................

Ms. Waters ............................................................................................. X 

Mr. Cohen ...............................................................................................

Mr. Johnson, Jr. ......................................................................................

Mr. Pierluisi ............................................................................................ X 

Mr. Quigley ............................................................................................. X 

Ms. Chu .................................................................................................. X 

Mr. Deutch ............................................................................................. X 

Ms. Sa ́ nchez ........................................................................................... X 

Mr. Polis ................................................................................................. X 

Total ..................................................................................... 12 17 


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2. Amendment #2, offered by Mr. Nadler, to amend the definition of ‘‘significant regulatory action’’ to exclude nuclear reactor 

safety standards. Not agreed to by a vote of 13 to 17. 

ROLLCALL NO. 2 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................................. X 

Mr. Sensenbrenner, Jr. ........................................................................... X 

Mr. Coble ................................................................................................ X 

Mr. Gallegly ............................................................................................ X 

Mr. Goodlatte .........................................................................................

Mr. Lungren ............................................................................................ X 

Mr. Chabot ............................................................................................. X 

Mr. Issa ..................................................................................................

Mr. Pence ...............................................................................................

Mr. Forbes .............................................................................................. X 

Mr. King ................................................................................................. X 

Mr. Franks .............................................................................................. X 

Mr. Gohmert ........................................................................................... X 

Mr. Jordan .............................................................................................. X 

Mr. Poe ...................................................................................................

Mr. Chaffetz ...........................................................................................

Mr. Griffin .............................................................................................. X 

Mr. Marino ..............................................................................................

Mr. Gowdy .............................................................................................. X 

Mr. Ross ................................................................................................. X 

Ms. Adams ............................................................................................. X 

Mr. Quayle .............................................................................................. X 

Mr. Amodei ............................................................................................. X 

Mr. Conyers, Jr., Ranking Member ......................................................... X 

Mr. Berman ............................................................................................

Mr. Nadler .............................................................................................. X 

Mr. Scott ................................................................................................ X 

Mr. Watt ................................................................................................. X 

Ms. Lofgren ............................................................................................ X 

Ms. Jackson Lee ..................................................................................... X 

Ms. Waters ............................................................................................. X 

Mr. Cohen ...............................................................................................

Mr. Johnson, Jr. ......................................................................................

Mr. Pierluisi ............................................................................................ X 

Mr. Quigley ............................................................................................. X 

Ms. Chu .................................................................................................. X 

Mr. Deutch ............................................................................................. X 

Ms. Sa ́ nchez ........................................................................................... X 

Mr. Polis ................................................................................................. X 

Total ..................................................................................... 13 17 

3. Amendment #5, offered by Ms. Jackson Lee, to amend the definition of ‘‘significant regulatory action’’ to exclude a rule or guidance issued by the Secretary of Homeland Security. Not agreed to 

by a vote of 12 to 15. 


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ROLLCALL NO. 3 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................................. X 

Mr. Sensenbrenner, Jr. ........................................................................... X 

Mr. Coble ................................................................................................ X 

Mr. Gallegly ............................................................................................ X 

Mr. Goodlatte .........................................................................................

Mr. Lungren ............................................................................................ X 

Mr. Chabot ............................................................................................. X 

Mr. Issa ..................................................................................................

Mr. Pence ...............................................................................................

Mr. Forbes .............................................................................................. X 

Mr. King ................................................................................................. X 

Mr. Franks .............................................................................................. X 

Mr. Gohmert ........................................................................................... X 

Mr. Jordan ..............................................................................................

Mr. Poe ...................................................................................................

Mr. Chaffetz ...........................................................................................

Mr. Griffin .............................................................................................. X 

Mr. Marino ..............................................................................................

Mr. Gowdy ..............................................................................................

Mr. Ross ................................................................................................. X 

Ms. Adams ............................................................................................. X 

Mr. Quayle .............................................................................................. X 

Mr. Amodei ............................................................................................. X 

Mr. Conyers, Jr., Ranking Member ......................................................... X 

Mr. Berman ............................................................................................

Mr. Nadler .............................................................................................. X 

Mr. Scott ................................................................................................ X 

Mr. Watt ................................................................................................. X 

Ms. Lofgren ............................................................................................ X 

Ms. Jackson Lee ..................................................................................... X 

Ms. Waters ............................................................................................. X 

Mr. Cohen ...............................................................................................

Mr. Johnson, Jr. ......................................................................................

Mr. Pierluisi ............................................................................................ X 

Mr. Quigley .............................................................................................

Ms. Chu .................................................................................................. X 

Mr. Deutch ............................................................................................. X 

Ms. Sa ́ nchez ........................................................................................... X 

Mr. Polis ................................................................................................. X 

Total ..................................................................................... 12 15 

4. Amendment #3, offered by Ms. Jackson Lee, to amend the definition of ‘‘significant regulatory action’’ to exclude a rule or guidance made under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Not agreed to by a vote of 11 to 14. 


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12 

ROLLCALL NO. 4 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................................. X 

Mr. Sensenbrenner, Jr. ........................................................................... X 

Mr. Coble ................................................................................................ X 

Mr. Gallegly ............................................................................................ X 

Mr. Goodlatte .........................................................................................

Mr. Lungren ............................................................................................ X 

Mr. Chabot ............................................................................................. X 

Mr. Issa ..................................................................................................

Mr. Pence ...............................................................................................

Mr. Forbes .............................................................................................. X 

Mr. King ................................................................................................. X 

Mr. Franks ..............................................................................................

Mr. Gohmert ........................................................................................... X 

Mr. Jordan ..............................................................................................

Mr. Poe ...................................................................................................

Mr. Chaffetz ...........................................................................................

Mr. Griffin .............................................................................................. X 

Mr. Marino ..............................................................................................

Mr. Gowdy .............................................................................................. X 

Mr. Ross .................................................................................................

Ms. Adams ............................................................................................. X 

Mr. Quayle .............................................................................................. X 

Mr. Amodei ............................................................................................. X 

Mr. Conyers, Jr., Ranking Member ......................................................... X 

Mr. Berman ............................................................................................

Mr. Nadler .............................................................................................. X 

Mr. Scott ................................................................................................ X 

Mr. Watt ................................................................................................. X 

Ms. Lofgren ............................................................................................

Ms. Jackson Lee ..................................................................................... X 

Ms. Waters ............................................................................................. X 

Mr. Cohen ...............................................................................................

Mr. Johnson, Jr. ......................................................................................

Mr. Pierluisi ............................................................................................ X 

Mr. Quigley .............................................................................................

Ms. Chu .................................................................................................. X 

Mr. Deutch ............................................................................................. X 

Ms. Sa ́ nchez ........................................................................................... X 

Mr. Polis ................................................................................................. X 

Total ..................................................................................... 11 14 

5. Amendment in the Nature of a Substitute, offered by Mr. Griffin. Agreed to by a vote of 13 to 12. 

ROLLCALL NO. 5 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................................. X 

Mr. Sensenbrenner, Jr. ...........................................................................


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ROLLCALL NO. 5—Continued 

Ayes Nays Present 

Mr. Coble ................................................................................................ X 

Mr. Gallegly ............................................................................................ X 

Mr. Goodlatte .........................................................................................

Mr. Lungren ............................................................................................ X 

Mr. Chabot ............................................................................................. X 

Mr. Issa ..................................................................................................

Mr. Pence ...............................................................................................

Mr. Forbes .............................................................................................. X 

Mr. King ................................................................................................. X 

Mr. Franks .............................................................................................. X 

Mr. Gohmert ........................................................................................... X 

Mr. Jordan ..............................................................................................

Mr. Poe ...................................................................................................

Mr. Chaffetz ...........................................................................................

Mr. Griffin .............................................................................................. X 

Mr. Marino ..............................................................................................

Mr. Gowdy ..............................................................................................

Mr. Ross .................................................................................................

Ms. Adams ............................................................................................. X 

Mr. Quayle .............................................................................................. X 

Mr. Amodei ............................................................................................. X 

Mr. Conyers, Jr., Ranking Member ......................................................... X 

Mr. Berman ............................................................................................

Mr. Nadler .............................................................................................. X 

Mr. Scott ................................................................................................ X 

Mr. Watt ................................................................................................. X 

Ms. Lofgren ............................................................................................ X 

Ms. Jackson Lee ..................................................................................... X 

Ms. Waters ............................................................................................. X 

Mr. Cohen ...............................................................................................

Mr. Johnson, Jr. ......................................................................................

Mr. Pierluisi ............................................................................................ X 

Mr. Quigley .............................................................................................

Ms. Chu .................................................................................................. X 

Mr. Deutch ............................................................................................. X 

Ms. Sa ́ nchez ........................................................................................... X 

Mr. Polis ................................................................................................. X 

Total ..................................................................................... 13 12 

6. Motion to report H.R. 4078, as amended, favorably to the 

House. Agreed to by a vote of 15 to 13. 

ROLLCALL NO. 6 

Ayes Nays Present 

Mr. Smith, Chairman ............................................................................. X 

Mr. Sensenbrenner, Jr. ...........................................................................

Mr. Coble ................................................................................................ X 

Mr. Gallegly ............................................................................................ X 


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ROLLCALL NO. 6—Continued 

Ayes Nays Present 

Mr. Goodlatte .........................................................................................

Mr. Lungren ............................................................................................ X 

Mr. Chabot ............................................................................................. X 

Mr. Issa ..................................................................................................

Mr. Pence ...............................................................................................

Mr. Forbes .............................................................................................. X 

Mr. King ................................................................................................. X 

Mr. Franks .............................................................................................. X 

Mr. Gohmert ........................................................................................... X 

Mr. Jordan ..............................................................................................

Mr. Poe ...................................................................................................

Mr. Chaffetz ...........................................................................................

Mr. Griffin .............................................................................................. X 

Mr. Marino ..............................................................................................

Mr. Gowdy .............................................................................................. X 

Mr. Ross ................................................................................................. X 

Ms. Adams ............................................................................................. X 

Mr. Quayle .............................................................................................. X 

Mr. Amodei ............................................................................................. X 

Mr. Conyers, Jr., Ranking Member ......................................................... X 

Mr. Berman ............................................................................................

Mr. Nadler .............................................................................................. X 

Mr. Scott ................................................................................................ X 

Mr. Watt ................................................................................................. X 

Ms. Lofgren ............................................................................................ X 

Ms. Jackson Lee ..................................................................................... X 

Ms. Waters ............................................................................................. X 

Mr. Cohen ...............................................................................................

Mr. Johnson, Jr. ......................................................................................

Mr. Pierluisi ............................................................................................ X 

Mr. Quigley ............................................................................................. X 

Ms. Chu .................................................................................................. X 

Mr. Deutch ............................................................................................. X 

Ms. Sa ́ nchez ........................................................................................... X 

Mr. Polis ................................................................................................. X 

Total ..................................................................................... 15 13 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 


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New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 4078, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, April 20, 2012. 

Hon. LAMAR SMITH, CHAIRMAN, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4078, the ‘‘Regulatory 

Freeze for Jobs Act of 2012.’’ 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Sarah Anders, who can 

be reached at 226–9010. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

DIRECTOR. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 4078—Regulatory Freeze for Jobs Act of 2012. 

As ordered reported by the House Committee on the Judiciary on 

March 20, 2012. 

SUMMARY

H.R. 4078 would prohibit Federal agencies from taking most significant regulatory actions until the unemployment rate falls to 6 

percent or less. The legislation would affect many regulatory actions that vary greatly in nature and scope. CBO and the staff of 

the Joint Committee on Taxation (JCT) cannot determine the budgetary effects of delaying significant regulatory actions, but we expect that enacting H.R. 4078 would have effects on both direct 

spending and revenues. Pay-as-you-go procedures apply because 

enacting the legislation would affect direct spending and revenues. 

CBO expects that implementing H.R. 4078 also could have a significant impact on spending subject to appropriation, although we 

cannot determine the magnitude of that effect. 


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1See http://www.reginfo.gov/public/jsp/Utilities/EOl12866.pdf, pg. 4. 2 In addition, the definition of significant regulatory action in Executive Order 12866 applies to regulatory actions that have an annual effect on the economy of $100 million or more, whereas H.R. 4078 applies to regulatory actions that have an annual cost to the economy of $100 million or more. However, a regulatory action that saves $100 million or more would likely still 

be classified as a significant regulatory action under H.R. 4078 because such actions are likely 

to fall under the other clauses of the bill’s definition as described above. 

CBO expects that H.R. 4078 would impose no intergovernmental 

or private-sector mandates as defined in the Unfunded Mandates 

Reform Act (UMRA). 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

Background 

H.R. 4078 would prohibit agencies from taking significant regulatory actions until the average of monthly unemployment rates for 

any calendar quarter is 6 percent or less. H.R. 4078 would allow 

exemptions for certain significant regulatory actions if the President determines via an executive order that the action is necessary 

for one of four reasons: (1) to respond to an imminent threat to 

health or safety, (2) to enforce criminal laws, (3) to protect national 

security, or (4) to implement an international trade agreement. 

Further, under the bill, the Congress would have to expeditiously 

consider and act on any additional waivers the President requests 

for significant regulatory actions that do not meet one of the four 

criteria listed above. If an agency were to pursue a significant regulatory action in violation of H.R. 4078, any party adversely affected 

by that action would be entitled to judicial review. 

H.R. 4078 defines a significant regulatory action as any Federal 

regulatory action that is likely to result in a rule or guidance that 

may: 

• Have an annual cost to the economy of $100 million or more 

or adversely affect in a material way the economy, a sector 

of the economy, productivity, competition, jobs, the environment, public health or safety, small entities, or State, local, 

or tribal governments or communities; 

• Create a serious inconsistency or otherwise interfere with an 

action taken or planned by another agency; 

• Materially alter the budgetary impact of entitlements, 

grants, user fees, or loan programs or the rights and obligations of recipients thereof; or 

• Raise novel legal or policy issues. 

The term significant regulatory action was originally defined in 

1993 by Executive Order 12866, and is used to determine whether 

a regulatory action is subject to regulatory review by the Office of 

Information and Regulatory Affairs (OIRA).1 H.R. 4078 largely uses 

the same definition established by that executive order, but expands the scope to include guidance as well as rulemaking, and 

also to include independent regulatory agencies.2

Looking to recent regulatory actions as a way to estimate the 

number of future regulatory actions that would be affected by H.R. 

4078 is uncertain because agencies can change course following the 

enactment of the bill. However, historical data shows that OIRA reviewed 740 significant regulatory actions in 2011 and 657, on averVerDate Mar 15 2010 00:33 Apr 28, 2012 Jkt 019006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6601 E:\HR\OC\HR461P1.XXX HR461P1

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3See http://www.reginfo.gov/public/do/eoCountsSearchInit?action=init. The number of significant regulatory actions under H.R. 4078 in a given year may exceed the number reviewed by 

OIRA because, unlike Executive Order 12866, H.R. 4078 applies to guidance and independent 

regulatory agencies. 4See Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2012 to 

2022 (January 2012), Appendix E. 

age, over the past five calendar years.3 Examples of those regulatory actions in 2011 include: required warnings for cigarette 

packages and advertisements, Medicare payment rates for inpatient psychiatric facilities, and national emission standards for hazardous air pollutants from industrial, commercial and institutional 

boilers. 

H.R. 4078 would delay significant regulatory actions until the average of monthly unemployment rates for any quarter is 6.0 percent or lower. Under CBO’s most recent economic forecast, the unemployment rate is expected to remain elevated for at least the 

next few years; in those projections the unemployment rate would 

remain above 6.0 percent until late 2016.4 However, many developments could cause economic outcomes to differ substantially, in one 

direction or the other. For example, the economy could grow more 

rapidly—or more slowly—with a consequent acceleration (or reduction) in the pace of employment. Furthermore, changes in fiscal 

policy that diverge from the path assumed in CBO’s baseline could 

have a significant impact on economic growth and, by extension, 

the unemployment rate. 

Impact on Direct Spending 

The budgetary consequences of preventing significant regulatory 

action also would vary tremendously because the budgetary impact 

of different rules varies considerably. For example, of the three 

rules mentioned above, only one—Medicare payment rates for inpatient psychiatric facilities—has a significant Federal budgetary impact. 

Delaying or preventing some significant regulatory actions would 

result in costs to the Federal Government, while delaying or preventing others would result in savings. On net, CBO estimates that 

enacting H.R. 4078 would have a significant effect on direct spending, but we cannot determine the magnitude or sign of those 

changes. Short-term effects would be driven by: (1) preventing annual updates to payment schedules for certain Medicare services 

and other routine revisions to aspects of selected government programs, (2) preventing payment rate reductions scheduled to take 

place under the Medicare physician fee schedule, and (3) altering 

the implementation of new Federal programs with substantial 

budget effects. 

Routine Updates to Government Programs. Many routine 

significant regulatory actions are health-related and in particular 

pertain to Medicare. Some examples include rules that establish 

annual updates to payment rates for services provided by hospitals, 

physicians, and other Medicare providers. Enacting H.R. 4078 

would freeze payment structures for those providers at current levels. Similarly, payment rates (such as the annual benefit amount 

for each individual) under some other Federal programs may also 

be temporarily frozen under the bill. CBO cannot estimate the net 

impact of all such changes. 


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Many programs, like Social Security, make annual adjustments 

in the benefits that are paid, often referred to as a cost-of-living adjustment. The new amounts are published in the Federal register, 

but do not rise to the level of significant regulatory action. Thus, 

under the bill, CBO expects that these types of programs would 

continue to operate as they normally do, though agencies would not 

be able to make significant changes to the program while the moratorium was in effect. 

Delay Implementation of Legislation. Enacting H.R. 4078 

may also affect the implementation of new laws. For example, additional rules and guidance related to the implementation of the Affordable Care Act are expected in coming months. Many of these 

anticipated regulatory actions are consequential for health insurance exchanges, which are to become operational in 2014 under 

current law. Delaying those regulatory actions could delay implementation of health insurance exchanges, which would in turn result in significant savings to the Federal budget, relative to spending expected under current law. 

This bill also could delay the implementation of new initiatives 

aimed at making more electromagnetic spectrum available for wireless services. As required by title VI of the Middle Class Tax Relief 

and Job Creation Act of 2012, the Federal Communications Commission (FCC) is developing proposed rules for what are known as 

‘‘incentive auctions,’’ for private firms to voluntarily relinquish 

some or all of their existing spectrum rights in exchange for a payment from the FCC. That spectrum would then be available for 

new licensed uses. Provisions in that act regarding the use of spectrum by Federal agencies and the development of a wireless network for public safety users are being implemented by the Department of Commerce. A delay in the implementation of those programs would increase net direct spending (by reducing expected 

auction receipts) by several billion dollars over the 2013N2022 period, relative to current law. 

Impact on Revenues 

Enacting H.R. 4078 also would affect revenues, and JCT expects 

that delaying significant regulatory actions of the Internal Revenue 

Service could reduce collections of revenues in some cases and increase collections in other cases. JCT cannot determine the sign or 

magnitude of the possible effects on revenues. 

Enacting H.R. 4078 would also directly affect revenues through 

the operations of the Federal Reserve, which remits its net earnings to the Treasury; those remittances are classified as revenues 

in the Federal budget. H.R. 4078 would prevent the Federal Reserve from writing rules and regulations to implement enacted legislation or to change any such rules and regulations currently in 

place if the rules or regulations would be considered significant 

regulatory action. The bill also would limit the ability of the Federal Reserve to conduct monetary policy because some parameters, 

such as the discount rate and the interest rate paid on reserves, 

are specified in regulations. However, H.R. 4078 probably would 

have no effect on the Federal Reserve’s purchases and sales of securities. Preventing some rules and regulations from going into effect could reduce Federal Reserve remittances in some cases and 


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increase remittances in other cases. CBO cannot determine the 

sign or magnitude of the possible effects on revenues. 

Impact on Spending Subject to Appropriation 

H.R. 4078 also would affect programs for which spending is subject to the annual appropriations process. However, CBO cannot 

determine the magnitude of that effect. For example, if the Environmental Protection Agency were prohibited from issuing final 

rules while the unemployment rate exceeds 6 percent, there could 

be reductions in spending for the agency, subject to appropriation 

action. A second example involves annual calculations made by the 

Department of Housing and Urban Development (HUD) of the fairmarket rents that it uses to determine rental subsidies for low-income individuals. We expect that the bill would prohibit those calculations from being made and implemented, which would prevent 

the rental subsidy from adjusting for changes in market conditions. 

Any increase in rents would be paid for by the tenant and not by 

HUD and if tenants were unable to pay the increased rent, some 

landlords would likely leave the program. 

PAY-AS-YOU-GO CONSIDERATIONS

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct 

spending or revenues. Pay-as-you-go procedures apply to H.R. 4078 

because enacting the legislation would affect direct spending and 

revenues. CBO and JCT cannot determine the sign or magnitude 

of those effects. 

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

CBO expects that H.R. 4078 would impose no intergovernmental 

or private-sector mandates as defined in UMRA. By delaying significant regulatory actions, the bill could affect public or private entities in a number of ways, including slowing reimbursements and 

eliminating or changing regulatory requirements. While the costs 

and savings tied to those individual effects could be significant, 

CBO has no basis for estimating either the overall direction or 

magnitude of those effects on public or private entities because of 

uncertainty about the nature and number of regulations affected. 

ESTIMATE PREPARED BY: 

Federal Costs: Sarah Anders 

Impact on State, Local, and Tribal Governments: Elizabeth Cove 

Delisle 

Impact on the Private Sector: Paige Piper/Bach 

ESTIMATE APPROVED BY: 

Holly Harvey 

Deputy Assistant Director for Budget Analysis 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 4078, will help 

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ulatory actions until the unemployment rate stabilizes at or below 

6.0 percent. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 4078 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f), or 9(g) of Rule XXI. 

Section-by-Section Analysis 

The following discussion describes the bill as reported by the 

Committee. 

Section 1: Short Title. This section designates the Bill as the 

‘‘Regulatory Freeze for Jobs Act of 2012.’’ 

Section 2: Definitions. This section defines the terms ‘‘agency’’ 

and ‘‘rule’’ per the Administrative Procedure Act, 5 U.S.C. § 551; 

‘‘regulatory action’’ per Executive Order 12866, but not including a 

regulatory action that repeals an existing rule; ‘‘significant regulatory action’’ per Executive Order 12866, except that the bill only 

covers a regulatory action with ‘‘costs to the economy of $100 million or more,’’ while Executive Order 12866 speaks to ‘‘effects on the 

economy of $100 million or more’’; and, ‘‘small entity’’ per the Regulatory Flexibility Act of 1980, 5 U.S.C. § 601(6). 

Section 3: Significant Regulatory Actions. Together, Sections 3(a)- 

(b) prohibit agencies from taking any significant regulatory action 

until the Secretary of Labor certifies to the Director of the Office 

of Management and Budget that the average national monthly unemployment rate for the last quarter is at or below 6.0%. 

Section 4: Waivers. Section 4(a) states that an agency may take 

a significant regulatory action during the moratorium period only 

pursuant to either Section 4(b) or Section 4(c). Using the same 

waiver criteria as H.R. 10, the REINS Act, Section 4(b) allows the 

President to waive Section 3 by an Executive Order certifying that 

the significant regulatory action is necessary because of an imminent threat to health or safety or other emergency; for the enforcement of criminal laws; for national security; or, was issued to implement an international trade agreement. Section 4(c) allows the 

President to submit to Congress a written request for a waiver to 

take a significant regulatory action during the moratorium period 

when the significant regulatory action is ‘‘necessary to protect the 

public health, safety and welfare’’ but is not eligible for a Presidential waiver under Section 4(b). 

Section 5: Judicial Review. This section authorizes judicial review for any person aggrieved by a regulatory action taken in violation of the Act. Section 5(c) allows a court to forgo enjoining a significant regulatory action taken in violation of the Act if the court 

finds by a preponderance of the evidence that the regulation is required to protect against an imminent and serious threat to the national security of the United States. Section 5(d) allows small businesses to collect reasonable attorney’s fees in some cases; Section 

5(f) draws upon the definition of ‘‘small business’’ given by the 

Equal Access to Justice Act, 24 U.S.C. § 2412(d)(2)(B)(ii). Section 

5(e) requires suit to be brought within 1 year, or within 90 days 


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1See H.R. 10, the Regulations From the Executive in Need of Scrutiny Act of 2011, 112th 

Cong. (2011); H.R. 527, Regulatory Flexibility Improvements Act of 2011, 112th Cong. (2011); 

H.R. 3010, the Regulatory Accountability Act of 2011, 112th Cong. (2011); H.R. 3862, the Sunshine for Regulatory Decrees and Settlements Act, 112th Cong. (2012). 2The bill defines ‘‘significant regulatory action’’ as any regulatory action that is likely to result in a rule or guidance that may have an annual cost to the economy of $100 million or more 

or have a material adverse effect on the economy, as explained in greater detail infra. 3 Congressional Budget Office Cost Estimate, H.R. 4078, the Regulatory Freeze for Jobs Act 

of 2012, at 3 (Apr. 20, 2012), available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/hr4078.pdf [hereinafter CBO Cost Estimate]. The CBO notes, however, that ‘‘many developments could cause economic outcomes to differ substantially, in one direction or the other.’’ 

Id. 4 How a Broken Process Leads To Flawed Regulations: Hearing Before the H. Comm. on Oversight and Government Reform, 112th Cong. 181 (2011) (testimony of Cass Sunstein, Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget). 5Letter from Katherine McFate, President and CEO, OMB Watch, & Robert Weissman, President, Public Citizen, Co-Chairs of the Coalition for Sensible Safeguards, to Rep. Lamar Smith 

(R-TX), Chair, and Rep. John Conyers, Jr. (D-MI), Ranking Member, House Committee on the 

Judiciary (Mar. 16, 2012), available at http://www.sensiblesafeguards.org/assets/documents/cssletter-re-4078.pdf. 

for an agency enforcement action (unless another law imposes a 

statute of limitations shorter than 1 year). 

Dissenting Views 

INTRODUCTION

H.R. 4078, the ‘‘Regulatory Freeze for Jobs Act of 2012,’’ is the 

fifth time during this Congress that the Judiciary Committee has 

marked up legislation aimed at hobbling the ability of Federal 

agencies to promulgate regulations.1 This latest measure is based 

on the false assumption that regulations inhibit job creation. With 

only limited exceptions, H.R. 4078, as amended, would prohibit an 

agency from taking any ‘‘significant regulatory action’’ 2 until the 

average of monthly unemployment rates for any quarter is six percent or less. The Congressional Budget Office (CBO) observes that 

the unemployment rate may remain above this threshold ‘‘until 

late 2016.’’ 3

H.R. 4078 is bad policy because it: (1) is based on the false 

premise that regulations and job creation are linked; (2) is a blunt 

instrument that needlessly jeopardizes public health and safety; (3) 

ignores the benefits of regulation; (4) fails to account for the extensive procedural requirements of the rulemaking process; (5) is unworkable and will create more, not less, business uncertainty; (6) 

may undermine job creation by increasing the risk of regulatory 

failure; and (7) may present separation of powers concerns. As the 

Administrator of the Office of Information and Regulatory Affairs 

has observed, a rulemaking moratorium would be ‘‘like a nuclear 

bomb in the sense that it would prevent regulations that . . . cost 

very little and have very significant economic or public health benefits.’’ 4 Accordingly, H.R. 4078 is opposed by the Coalition for Sensible Safeguards, a coalition of more than 70 organizations, including the AFL-CIO, BlueGreen Alliance, Center for Food Safety, Consumer Federation of America, Consumers Union, Friends of the 

Earth, League of Conservation Voters, National Women’s Law Center, Natural Resources Defense Council, OMB Watch, Public Citizen, Service Employees International Union, Union of Concerned 

Scientists, and the UAW.5 Noting the legislation’s ‘‘overly broad 

scope and impact,’’ the Coalition warns that H.R. 4078 would ‘‘halt 

new standards to protect workplace safety, the environment, food 


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22 

6 Id. at 2. 7 Regulatory Freeze for Jobs Act of 2012: Hearing on H.R. 4078 Before the Subcomm. on 

Courts, Commercial Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2012). 8 Id. at 28, 48 (testimony of Robert Weissman, President, Public Citizen). 9 5 U.S.C. §§ 551–59, 701–06, 1305, 3105, 3344, 5372, 7521 (2012). 

10 5 U.S.C. § 551(1) (2012). 11 5 U.S.C. § 551(4) (2012). 12 Exec. Order No. 12,866, 58 Fed. Reg. 51735 (Oct. 4, 1993). 

safety and consumer product safety.’’ 6 For these reasons, and those 

described below, we respectfully dissent and urge our colleagues to 

reject this seriously flawed bill. 

DESCRIPTION AND BACKGROUND

H.R. 4078, as amended, would impose a moratorium on any regulatory action that is likely to result in a rule or guidance that may 

have an annual cost to the economy of $100 million or more, or 

meets other specified criteria until the Bureau of Labor Statistics 

average of monthly unemployment rates for any quarter is six percent or less. 

Introduced by Rep. Tim Griffin (R-AR) on February 17, 2012, the 

bill was referred to the Committee on Oversight and Government 

Reform, and the Judiciary Committee. Currently, H.R. 4078 has 17 

cosponsors, all of whom are Republicans. On February 27, 2012, 

the Courts, Commercial and Administrative Law Subcommittee 

(Subcommittee) held a hearing on H.R. 4078.7 The Minority witness was Robert Weissman, President of Public Citizen. Mr. 

Weissman identified numerous flaws with the bill, including its 

highly limited exceptions. Noting that H.R. 4078 was ‘‘misguided’’ 

and ‘‘dangerous,’’ he warned that the bill would effectively ‘‘block 

for five years with almost no relevant exceptions the issuance of 

new health, safety, environmental, and financial protections.’’ 8

A section-by-section explanation of the reported version of the 

bill’s principal provisions follows. Section 2 defines various terms 

used in the measure. First, it imports the definitions of ‘‘agency’’ 

and ‘‘rule’’ from the Administrative Procedure Act (APA).9 The APA 

defines ‘‘agency’’ as ‘‘each authority of the Government of the 

United States, whether or not it is within or subject to review by 

another agency,’’ with certain exceptions.10 Therefore, ‘‘agency’’ as 

used in this measure includes independent regulatory agencies, 

and not just the Executive Branch agencies subject to Presidential 

control. The APA defines ‘‘rule’’ as ‘‘an agency statement of general 

or particular applicability and future effect designed to implement, 

interpret, or prescribe law or policy or describing the organization, 

procedure, or practice requirements of an agency.’’ 11

Second, section 2 defines ‘‘regulatory action’’ to mean ‘‘any substantive action by an agency that promulgates or is expected to 

lead to the promulgation of a final rule or regulation. . . .’’ Such 

action includes various notices, such as notices of inquiry, advance 

notices of proposed rulemaking, and notices of proposed rulemaking. This definition is derived from President Clinton’s Executive Order 12,866.12 Unlike this Executive Order, however, section 

2 excepts any substantive action by an agency for repealing a rule. 

Third, section 2 defines ‘‘significant regulatory action’’ broadly as 

any regulatory action that is likely to result in a rule or guidance 

that may have: (1) at least a $100 million cost to the economy; or 

(2) adversely affect in a material way the economy, a sector of the 


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13The RFA defines ‘‘small business’’ as having the same meaning as ‘‘small business concern’’ 

under section 3 of the Small Business Act unless an agency, after consultation with the Small 

Business Administration’s Office of Advocacy, establishes a different definition. 5 U.S.C. § 601(3) 

(2012). The Small Business Act defines ‘‘small business concern’’ as ‘‘one which is independently 

owned and operated and which is not dominant in its field of operation: Provided, That notwithstanding any other provision of law, an agricultural enterprise shall be deemed to be a small 

business concern if it (including its affiliates) has annual receipts not in excess of $750,000.’’ 

Pub. L. No. 85–536. 14The RFA defines ‘‘small organization’’ as ‘‘any not-for-profit enterprise which is independently owned and operated and is not dominant in its field, unless an agency establishes, after 

opportunity for public comment, one or more definitions of such term which are appropriate to 

the activities of the agency and publishes such definition(s) in the Federal Register.’’ 5 U.S.C. 

§ 601(4) (2012). 15The RFA defines ‘‘small governmental jurisdiction’’ as governments of cities, counties, 

towns, townships, villages, school districts, or special districts, with a population of less than 

fifty thousand, unless an agency establishes, after opportunity for public comment, one or more 

definitions of such term which are appropriate to the activities of the agency and which are 

based on such factors as location in rural or sparsely populated areas or limited revenues due 

to the population of such jurisdiction, and publishes such definition(s) in the Federal Register.’’ 

5 U.S.C. § 601(5) (2012). 

economy, productivity, competition, jobs, the environment, public 

health or safety, small entities, or state, local, or tribal governments or communities. ‘‘Significant regulatory action’’ also can include a rule or guidance that may: (1) create a serious inconsistency or interfere with another agency’s action; (2) materially alter 

the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of their recipients; or (3) raise 

novel legal or policy issues. 

Although this definition is largely derived from the definition of 

‘‘significant regulatory action’’ contained in President Clinton’s Executive Order 12866, it departs from that definition in several significant ways. First, the bill’s definition is broader than its counterpart in the Executive Order in that it includes agency guidance and 

is not limited to rules. In addition, the Amendment’s definition includes ‘‘small entities,’’ whereas the Executive Order does not. Further, the bill’s definition with respect to ‘‘novel legal or policy 

issues’’ does not include the Executive Order’s provision limiting 

these issues ‘‘arising out of legal mandates, the President’s priorities, or the principles’’ set forth in the Executive Order. Finally, 

the bill’s definition is narrower than the one in the Executive 

Order in that the $100 million threshold is limited to economic 

‘‘cost’’ as opposed to economic ‘‘effect.’’ 

Fourth, section 2 imports the definition of ‘‘small entity’’ contained in section 601(6) of the Regulatory Flexibility Act (RFA). 

The RFA defines ‘‘small entity’’ as a small business 13, small organization 14, or small governmental jurisdiction 15. Section 3(a) of the bill provides that no agency may take any significant regulatory action until the Secretary of Labor submits a report required by subsection (b). Section 3(b) requires the Secretary 

of Labor to submit a report to the Office of Management and Budget whenever the Secretary determines that the Bureau of Labor 

Statistics average monthly unemployment rate for any quarter is 

equal to or less than six percent after the Amendment’s enactment 

date. 

Section 4(a) provides that an agency may take a significant regulatory action only in accordance with subsection (b) or (c) of this 

measure. Subsection (b) provides that an agency may take a significant regulatory action if the President determines by executive 

order that such action is: (1) necessary because of an imminent 

threat to health or safety or other emergency; (2) necessary for the 


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enforcement of criminal laws; (3) necessary for national security 

reasons; or (4) issued pursuant to any statute implementing an 

international trade agreement. 

With respect to any significant regulatory action not eligible for 

a Presidential waiver under subsection (b), subsection (c) provides 

that the President may submit a request to Congress for a waiver 

of this measure. The President’s submission to Congress must: (1) 

identify the significant regulatory action and the scope of the requested waiver; (2) set forth all reasons why such action is necessary to protect the public health, safety, or welfare; and (3) explain why such action is ineligible for a Presidential waiver under 

subsection (b). The Amendment requires Congress to give ‘‘expeditious consideration’’ and to take appropriate legislative action with 

respect to such submission. 

Section 5(a) provides that any party adversely affected or aggrieved by a regulatory action taken in violation of this Act is entitled to judicial review. Additionally, any determination by the 

President or the Secretary of Labor is subject to judicial review. 

Section 5(b) provides that any court having jurisdiction to review 

a significant regulatory action for compliance with any other law 

has jurisdiction to consider claims under this measure. 

Section 5(c) requires a court to order corrective action by the 

agency, including remanding the significant regulatory action to 

the agency and enjoining the application or enforcement of such action, unless the court finds by a preponderance of the evidence that 

application or enforcement is required to protect against an imminent and serious threat to national security. 

Section 5(d) requires a court to award reasonable attorneys fees 

and costs to a ‘‘substantially prevailing’’ small business in connection with any civil action under this measure. A small business 

qualifies as ‘‘substantially prevailing’’ even if such entity failed to 

obtain a final judgment in its favor if the agency changes its position after the civil action is filed. 

Unless another provision of law requires filing suit in less than 

one year, section 5(e) permits a party to seek and obtain judicial 

review within one year following the date of the challenged agency 

action or or within 90 days after an enforcement action or notice 

thereof. 

Section 5(f) defines, for purposes of this section, a ‘‘small business’’ that is different from how the term is defined in the RFA 

(and, by reference, in the rest of H.R. 4078). As used in section 5 

of the Amendment, ‘‘small business’’ means any business that employs no more than 500 employees or has a net worth of less than 

$7 million on the date that a civil action is filed under this Act. 

CONCERNS WITH H.R. 4078

I. H.R. 4078 IS BASED ON THE FALSE PREMISE THAT REGULATIONS AND

JOB CREATION ARE LINKED

There is no credible evidence establishing that regulations have 

any substantive impact on job creation. Nonetheless, proponents of 

deregulatory measures such as H.R. 4078 wrongly and without any 

proof insist that regulations impose burdensome compliance costs 

on businesses and thereby stifle job creation. For instance, House 

Judiciary Committee Chairman Lamar Smith (R-TX) asserts: 


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16The Regulatory Accountability Act of 2011: Hearing on H.R. 3010 Before the Subcomm. on 

Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011) 

[hereinafter H.R. 3010 Hearing] (remarks of Rep. Lamar Smith (R-TX), Chair, H. Comm. on the 

Judiciary). 17 Bruce Bartlett, Op-Ed., Misrepresentations, Regulations and Jobs, N.Y. TIMES ECONOMIX, 

Oct. 4, 2011, available at http://economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/. 18 H.R. 3010 Hearing (prepared statement of Christopher DeMuth, American Enterprise 

Institute); see also Jia Lynn Yang, Does Government Regulation Really Kill Jobs? Economists 

Say Overall Effect Minimal, WASH. POST, Nov. 13, 2011, available at 

http://www.washingtonpost.com/business/economy/does-government-regulation-really-kill-jobseconomists-say-overall-effect-minimal/2011/10/19/gIQALRF5INlstory.html?hpid=z1 (‘‘In 2010, 

0.3 percent of the people who lost their jobs in layoffs were let go because of ‘government regulations/intervention.’ By comparison, 25 percent were laid off because of a drop in business demand. . . . Economists who have studied the matter say that there is little evidence that regulations cause massive job loss in the economy, and that rolling them back would not lead to 

a boom in job creation.’’). 

The American people urgently need jobs that only economic growth can give. Standing in the way of growth and 

job creation is a wall of Federal regulation. 

* * * 

New regulatory burdens and uncertainty about the economy have helped to keep trillions of dollars of private sector capital on the sidelines. Companies cannot safely invest if they cannot tell whether tomorrow’s regulations will 

make their investments unprofitable.16

The focus on a purported link between regulations and job creation is, in fact, a red herring. Bruce Bartlett, a senior policy analyst in the Reagan and George H.W. Bush Administrations, offers 

this explanation for why these arguments are fully embraced by 

conservatives as part of their deregulatory mantra: 

Republicans have a problem. People are increasingly 

concerned about unemployment, but Republicans have 

nothing to offer them. The G.O.P. opposes additional government spending for jobs programs and, in fact, favors big 

cuts in spending that would be likely to lead to further layoffs at all levels of government. . . . 

These constraints have led Republicans to embrace the 

idea that government regulation is the principal factor 

holding back employment. They assert that Barack Obama 

has unleashed a tidal wave of new regulations, which has 

created uncertainty among businesses and prevents them 

from investing and hiring. 

No hard evidence is offered for this claim; it is simply 

asserted as self-evident and repeated endlessly throughout 

the conservative echo chamber.17

The Majority’s own witness clearly debunked the myth that regulations stymie job creation during his testimony at a legislative 

hearing held last year on an anti-regulatory bill authored by Chairman Smith. Christopher DeMuth, with the conservative think tank 

American Enterprise Institute, stated in his prepared testimony 

that the ‘‘focus on jobs . . . can lead to confusion in regulatory debates’’ and that ‘‘the employment effects of regulation, while important, are indeterminate.’’ 18 A recently released study supports Mr. 


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19See Regulation, Jobs, and Economic Growth: An Empirical Analysis, The George Washington University Regulatory Studies Center Working Paper, at 27 (Mar. 2012) (finding that the 

‘‘macroeconomic effects of regulation are uncertain’’ and that the study’s ‘‘results reveal no impact’’ when considering either the impact of regulations on the ‘‘total economy or strictly the 

private sector’’), available at http://regulatorystudies.gwu.edu/images/pdf/032212l 

sinclairlveseylregljobslgrowth.pdf 20Letter to Rep. Lamar Smith (R-TX), Chair, & Rep. John Conyers, Jr. (D-MI), Ranking Member, H. Committee on the Judiciary, from David A. Forster, Executive Director, BlueGreen Alliance, at 2 (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 21 Executive Office of the President—Office of Management and Budget, Statement of Administration Policy on H.R. 2401, Transparency in Regulatory Analysis of Impacts on the Nation 

Act of 2011 (Sept. 21, 2011). 22 Natural Resources Defense Council et al., Supplying Ingenuity: U.S. Suppliers of Clean, 

Fuel-Efficient Vehicle Technologies (2011), available at http://www.nrdc.org/transportation/ 

autosuppliers/files/SupplierMappingReport.pdf 23 Id. 24 Editorial, The Job-Creating Mercury Rule, N.Y. TIMES, Feb. 22, 2012, available at http:// 

www.nytimes.com/2012/02/23/opinion/the-job-creating-mercury-rule.html. 25 Id. 26 Northeast States for Coordinated Air Use Management (NESCAUM), Economic Analysis of 

a Program to Promote Clean Transportation Fuels in the Northeast/Mid-Atlantic Region (2011) 

(on file with Natural Resources Defense Council) available at http://switchboard.nrdc.org/blogs/ 

ngreene/CFS%20Economic%20Analysis%20Report%20INTERNAL.PDF 

Demuth’s statement, finding that the effects of regulation are uncertain.19

If anything, regulations can promote job growth and put Americans back to work. For instance, the BlueGreen Alliance, notes: 

Studies on the direct impact of regulations on job growth 

have found that most regulations result in modest job 

growth or have no effect, and economic growth has consistently surged forward in concert with these health and safety protections. The Clean Air Act is a shining example, 

given that the economy has grown 204% and private sector 

job creation has expanded 86% since its passage in 1970.20

Also in reference to the Clean Air Act, the White House Office 

of Management and Budget (OMB) observed that 40 years of success with this measure has ‘‘demonstrated that strong environmental protections and strong economic growth go hand in 

hand.’’ 21 Similarly, the Natural Resources Defense Council, the 

United Auto Workers, and the National Wildlife Federation jointly 

issued a report finding that vehicle emissions standards and clean 

vehicle research, development and production are already responsible for 155,000 jobs at 504 facilities in 43 states and the District 

of Columbia.22 According to the same report, 119,000 jobs have 

been created in this industry since 2009 alone.23

In February 2012, The New York Times noted in an editorial that 

a pending rule under the Clean Air Act requiring power plants to 

reduce mercury and other toxic emissions by 90 percent in the next 

five years, which was approved by the Obama Administration in 

December, would result in 45,000 temporary construction jobs over 

the next five years and possibly 8,000 permanent jobs because of 

the upgrades required by the new rule.24 This job growth would be 

in addition to the rule’s expected benefit of preventing 11,000 

deaths from heart attacks and respiratory diseases like asthma.25

Additionally, a report by Northeast States for Coordinated Air 

Use Management (NESCAUM) demonstrates a direct correlation 

between environmental regulations and job growth in the Northeast. It found that by enacting stricter fuel economy standards and 

pursuing cleaner forms of energy, more jobs would be created.26

Specifically, NESCAUM found that stricter fuel economy standards 


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27 Id. 28 Bruce Bartlett, Op-Ed., Misrepresentations, Regulations and Jobs, N.Y. TIMES Economix 

Blog, Oct. 4, 2011, available at http://economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/?scp=4&sq=bartlett&st=cse. 29 H.R. 3010 Hearing (prepared statement of Prof. Sidney Shapiro, Wake Forest School of 

Law). 30Phil Izzo, Dearth of Demand Seen Behind Weak Hiring, WALL ST. J., July 18, 2011, available at http://online.wsj.com/article/SB10001424052702303661904576452181063763332.html. 31Press Release, Nat’l Federation of Independent Businesses, Small Business Confidence 

Takes Huge Hit: Optimism Index Now in Decline for Six Months Running (Sept. 13, 2011) (‘‘Of 

those reporting negative sales trends, 45 percent blamed faltering sales, 5 percent higher labor 

costs, 15 percent higher materials costs, 3 percent insurance costs, 8 percent lower selling prices 

and 10 percent higher taxes and regulatory costs.’’), available at http://www.nfib.com/pressmedia/press-media-item?cmsid=58190. 

and regulations governing cleaner forms of energy would increase 

employment from 9,490 to 50,700 jobs; increase gross regional 

product, a measure of the states’ economic output, by $2.1 billion 

to $4.9 billion; and increase household disposable income increases 

by $1 billion to $3.3 billion.27

H.R. 4078’s proponents rely on an equally flawed corollary argument that regulatory uncertainty creates a disincentive for businesses to add jobs. Once again, Bruce Bartlett, the senior economic 

official from the Reagan and Bush Administrations, observed that: 

[R]egulatory uncertainty is a canard invented by Republicans that allows them to use current economic problems 

to pursue an agenda supported by the business community 

year in and year out. In other words, it is a simple case 

of political opportunism, not a serious effort to deal with 

high unemployment.28

Likewise, Minority witness Professor Sidney Shapiro testified last 

year, ‘‘All of the available evidence contradicts the claim that regulatory uncertainty is deterring business investment.’’ 29 This may 

explain the findings of a July 2011 Wall Street Journal survey of 

business economists, which found that the ‘‘main reason U.S. companies are reluctant to step up hiring is scant demand, rather than 

uncertainty over government policies.’’ 30 Not surprisingly, a September 2011 National Federation of Independent Business survey 

of its members found that ‘‘poor sales’’—not regulation—is the biggest problem.31 Indeed, the Main Street Alliance, a small business 

organization, observes: 

In survey after survey and interview after interview, 

Main Street small business owners confirm that what we 

really need is more customers—more demand—not deregulation. Policies that restore our customer base are what we 

need now, not policies that shift more risk and more costs 

onto us from big corporate actors. 

* * * 

To create jobs and get our country on a path to a strong 

economic future, what small businesses need is customers—Americans with spending money in their pockets—not watered down standards that give big corporations free reign to cut corners, use their market power at 


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32Letter to Rep. Lamar Smith (R-TX), Chair, & Rep. John Conyers, Jr. (D-MI), Ranking Member, H. Committee on the Judiciary, from Jim Houser, Co-Chair, The Main Street Alliance, et al., at 1–2 (Nov. 2, 2011) (on file with the H. Committee on the Judiciary, Democratic Staff). 33 How a Broken Process Leads To Flawed Regulations: Hearing Before the H. Comm. on Oversight and Government Reform, 112th Cong. 181 (2011) (testimony of Cass Sunstein, Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget). 

our expense, and force small businesses to lay people off 

and close up shop.32

In sum, there is no credible evidence that regulations depress job 

creation. 

II. H.R. 4078’S REGULATORY MORATORIUM JEOPARDIZES PUBLIC

HEALTH AND SAFETY

A. The Bill Takes a Thoughtlessly Blunt Approach To Rulemaking 

In imposing a moratorium, H.R. 4078 does not distinguish between genuinely burdensome or duplicative regulations and those 

that ensure that the air we breathe, the automobiles we drive, the 

food we eat, or the planes on which we travel are safe. It is essentially a ‘‘one-size-fits-all’’ measure that jeopardizes the public 

health and safety of Americans as a result. 

Cass Sunstein, the Administrator of the Office of Information 

and Regulatory Affairs, addressed the ramifications of a regulatory 

moratorium during a hearing before the House Committee on Oversight and Government Reform last year. He warned: 

[A] moratorium would sweep up deregulatory measures 

which we are pretty enthusiastic about expediting, because 

they are regulatory actions. And . . . , and this is an important point, a moratorium would not be a scalpel or a 

machete. It would be more like a nuclear bomb in the 

sense that it would prevent regulations that, let’s say, cost 

very little and have very significant economic or public 

health benefits. So a moratorium would have the disadvantage of defying what every President since President 

Reagan has endorsed, which is cost-benefit analysis.33

B. H.R. 4078’s Exceptions Are Woefully Deficient 

Furthermore, the bill’s limited exceptions to its moratorium fail 

to address our concerns. While section 4(b) of the bill permits the 

President to determine by Executive Order whether a regulation 

should be exempted from the moratorium, such exemptions are extremely narrow and would apply only if the regulation is: (1) necessary because of an imminent threat to health or safety or other 

emergency; (2) necessary for the enforcement of criminal laws; (3) 

necessary for national security reasons; or (4) issued pursuant to 

any statute implementing an international trade agreement. With 

respect to the requirement that threats to health or safety or other 

emergency be ‘‘imminent’’ before a regulation could qualify for the 

exception, the president of Public Citizen observed, 

Imminent threat means immediate, right now, something 

that has to be done to prevent something that is otherwise 

going to happen in a very near term with a high degree 

of certainty. That is just why most regulation takes place. 

Take the example of food safety, we issue food safety rules 

usually because there has just been an outbreak of some 


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34Regulatory Freeze for Jobs Act of 2012: Hearing on H.R. 4078 Before the Subcomm. on 

Courts, Commercial Admin. Law of the H. Comm. on the Judiciary, 112th Cong. 51 (2012) (testimony of Robert Weissman, President, Public Citizen). 35 Unofficial Tr. of Markup of H.R. 4078, the Regulatory Freeze for Jobs Act of 2012, by the 

Comm. on the Judiciary, 112th Cong. 30 (2012) [hereinafter Markup]. 36 Id. at 70. 37 Id. at 27. 

problem, but not because we think it is about to happen 

again. 

You can go down the case of crib safety or auto safety 

or environmental protection or preventing another financial crisis, on and on, you go down the list it will almost 

never meet the standard of an imminent threat to health 

or safety or other emergencies. I believe the proper interpretation of this bill is that [there] will be a roughly 5-year 

moratorium on all health, safety, environmental, financial, 

et cetera, protections.34

To illustrate the shortcomings of these exceptions, Democratic 

Committee Members offered a series of amendments specifically excepting various types of regulations. For example, Ranking Member 

John Conyers, Jr. (D-MI) offered an amendment that would have 

exempted any rule or guidance intended to protect the privacy of 

Americans.35 This amendment, however, failed by a vote of 12 to 

17. Likewise, Representative Jerrold Nadler (D-NY) offered an 

amendment that would have exempted nuclear reactor safety 

standards from the bill’s definition of ‘‘significant regulatory action.’’ That amendment failed by a vote of 13 to 17.36 Representative Sheila Jackson Lee (D-TX) offered an amendment that would 

have excepted a rule or guidance issued by the Secretary of Homeland Security from the bill. That amendment failed by a vote of 12 

to 15. 

C. H.R. 4078’s Congressional Waiver Is Effectively Illusory 

Representative Griffin, the author of this legislation, offered an 

Amendment in the Nature of a Substitute at the Committee’s 

markup that ostensibly sought to expand the bill’s exception provisions.37 The Amendment authorizes the President, with respect to 

any significant regulatory action not eligible for a Presidential 

waiver, to submit a request to Congress to waive the moratorium. 

The President’s submission to Congress must: (1) identify the significant regulatory action and the scope of the requested waiver; (2) 

set forth all reasons why such action is necessary to protect the 

public health, safety, or welfare; and (3) explain why such action 

is ineligible for a Presidential waiver under subsection (b). The 

Amendment requires Congress to give expeditious consideration 

and to take appropriate legislative action with respect to such submission, which as we all know, is not likely to occur. 

The benefits of this Amendment, however, are largely pyrrhic 

and effectively illusory. It provides no meaningful standards governing when Congress can or should grant a waiver and fails to 

provide for any expedited procedures for consideration of a Congressional waiver. Thus, left to languish in the regular legislative 

process, no Congressional waiver would ever realistically be granted in a timely manner. 

There are innumerable instances where noncontroversial bills 

were passed by one house of Congress only to die in the other 


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38See, e.g., Nancy Benac, Congressional Conundrum Leaves ‘‘Comma Bill’’ in Coma, Associated Press, Apr. 17, 2002, available at http://news.google.com/newspapers?nid=1696&dat=20020417&id=Ev4aAAAAIBAJ&sjid=IEgEAAAAIBAJ&pg=6921,1940594 39 H.R. 2440, 105th Cong. (1997). 40 H.R. 916, 106th Cong. (1999). 41 H.R. 861, 107th Cong. (2001). 42 147 Cong. Rec. H901 (daily ed. Mar. 14, 2001). 43Pub. L. 107–169 (2002). 

house because of unrelated or political concerns. One need only 

consider the legislative history of the so-called ‘‘comma bill,’’ which 

was passed by the House over the course of three Congresses before it became law.38 This measure, which made a purely technical 

correction to title 9 of the United States Code, was first introduced 

during the 105th Congress.39 The House passed it in 1997, but the 

Senate—on the last day of the Congress—passed the bill with a 

controversial and unrelated amendment. The following Congress, 

the bill was reintroduced in the House, but it was passed with a 

controversial amendment and, therefore, died in the Senate.40

Thereafter, the bill was again reintroduced in the 107th Congress 

in 2001.41 Representative James F. Sensenbrenner, Jr. (R-WI), 

then-Chairman of the House Judiciary Committee, made the following plea: 

Some may try to diminish the importance of this bill, 

but one should never underestimate the importance of a 

comma. 

To paraphrase the late Everett Dirksen, a comma here, 

a comma there, and pretty soon you have got a full sentence. 

Let us be honest with ourselves, when used properly, a 

comma can be devastatingly effective. For those, especially 

school children, who think that grammar and punctuation 

do not matter and tune themselves out during English 

class, today’s action shows clearly that it does. 

Thankfully, not every grammar mistake, not every misplaced comma takes an act of Congress to correct, but this 

particular section of the United States Code does. 

This bill has been passed by each of the past two Congresses, only to be held hostage by unrelated issues in the 

other body. 

To my colleagues here and on the other side of the Capitol who have previously loaded up this bill with unrelated 

legislation, I say free the comma, and I urge my colleagues 

to pass H.R. 861.42

The legislation was finally enacted in 2002, five years after introduction.43 Likewise, any congressional waiver under H.R. 4078 

would be subject to the same political stalling and procedural hurdles. 

III. H.R. 4078 IGNORES THE BENEFITS OF REGULATIONS

H.R. 4078 would impose a moratorium on a significant regulatory 

action, which it defines, in pertinent part, as a rule or guidance 

that may have an annual cost to the economy of $100 million or 

more.’’ In addition to falsely claiming that regulations ‘‘kill’’ jobs, 

supporters of anti-regulatory measures such as H.R. 4078 contend 

that regulations impose burdensome costs on businesses. For examVerDate Mar 15 2010 00:33 Apr 28, 2012 Jkt 019006 PO 00000 Frm 00030 Fmt 6659 Sfmt 6601 E:\HR\OC\HR461P1.XXX HR461P1

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44See, e.g., Hearing on H.R. 3010; Formal Rulemaking and Judicial Review: Protecting Jobs 

and the Economy with Greater Regulatory Transparency and Accountability: Hearing Before the 

Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th 

Cong. (2011); Cost-Justifying Regulations: Protecting Jobs and the Economy by Presidential and 

Judicial Review of Costs and Benefits: Hearing Before the Subcomm. on Courts, Commercial and 

Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011); Raising the Agencies’ 

Grades—Protecting the Economy, Assuring Regulatory Quality and Improving Assessments of 

Regulatory Need: Hearing Before the Subcomm. on Courts, Commercial and Admin. Law of the 

H. Comm. on the Judiciary, 112th Cong. (2011); The APA at 65—Is Reform Needed to Create 

Jobs, Promote Economic Growth, and Reduce Costs?: Hearing Before the Subcomm. on Courts, 

Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011). 45 Nicole V. Crain & W. Mark Crain, The Impact of Regulatory Costs on Small Firms, Rep. 

No. SBAHQ-08-M-0466 (Sept. 2010), available at http://archive.sba.gov/advo/research/ 

rs371tot.pdf. 

46Sidney Shapiro et al., Setting the Record Straight: The Crain and Crain Report on Regulatory Costs, Center for Progressive Reform White Paper #1103 (Feb. 2011). 47 Id. 48 Curtis W. Copeland, Analysis of an Estimate of the Total Costs of Federal Regulations, Congressional Research Service Report for Congress, R41763 (Apr. 6, 2011). 49 Id. at 26 (quoting an e-mail from Nicole and W. Mark Crain to te author of the CRS report). 50 Id. The Economic Policy Institute also issued a critique of the Crain study outlining additional concerns with the study’s methodology and data. See John Irons & Andrew Green, Flaws 

Call for Rejecting Crain and Crain Model: Cited $1.75 Trillion Cost of Regulations Is Not Worth 

Repeating, Economic Policy Institute, July 19, 2011, available at http://w3.epi-data.org/ 

temp2011/IssueBrief308.pdf. 51 John Irons & Andrew Green, Flaws Call for Rejecting Crain and Crain Model: Cited $1.75 

Trillion Cost of Regulations Is Not Worth Repeating, Economic Policy Institute, July 19, 2011, 

available at http://w3.epi-data.org/temp2011/IssueBrief308.pdf. 

ple, in nearly every hearing before the House Judiciary Committe 

regarding regulatory issues this Congress,44 Majority witnesses 

have cited the same widely discredited study by economists Mark 

and Nicole Crain (Crain Study), which claims that Federal regulation imposes an annual cost of $1.75 trillion on business.45

The Crain Study has been thoroughly and repeatedly criticized 

for exaggerating regulatory costs. For example, the Center for Progressive Reform (CPR) notes that the $1.75 trillion cumulative burden cited by the study fails to account for any benefits of regulation.46 In addition, the study’s methodology is seriously flawed with 

respect to how it calculated economic costs. The study, which relied 

on international public opinion polling by the World Bank on how 

friendly a particular country was to business interests, ignored actual data on costs imposed by Federal regulation in the United 

States.47

CRS also conducted an extensive examination of the Crain Study 

and found much of its methodology to be flawed.48 Moreover, CRS 

noted that the authors of the Crain Study themselves acknowledged that their analysis was ‘‘‘not meant to be a decision-making 

tool for lawmakers or Federal regulatory agencies to use in choosing the ‘right’ level of regulation. In no place in any of the reports 

do we imply that our reports should be used for this purpose. (How 

could we recommend this use when we make no attempt to estimate the benefits?)’’’ 49 CRS concluded that ‘‘a valid, reasoned policy decision can only be made after considering information on both 

costs and benefits’’ of regulation.50 The Economic Policy Institute 

reached a similar conclusion.51

OMB annually estimates the costs and benefits of regulations. Its 

Draft 2012 Report to Congress on Benefits and Costs of Federal 

Regulations finds that the net benefits of regulations through the 

third fiscal year of the Obama Administration exceed $91 billion, 

which is 25 times more than the net benefits during the first three 


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52Office of Management and Budget, Draft 2012 Report to Congress on the Benefits and Costs 

of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities 21, available at http://www.whitehouse.gov/sites/default/files/omb/oira/draftl2012lcostlbenefitl report.pdf. 53Office of Management and Budget, 2011 Report to Congress on the Benefits and Costs of 

Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities 21, available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/2011lcb/2011lcbalreport.pdf 54See REINS Act—Promoting Jobs and Expanding Freedom by Reducing Needless Regulations: Hearing Before the Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. 

on the Judiciary, 112th Cong. (2011) (statement of Sally Katzen, former OIRA Administrator). 55 Id. 56 Environmental Protection Agency, Benefits and Costs of the Clean Air Act, Second Prospective Study—1990 to 2020 (2011) available at http://www.epa.gov/air/sect812/prospective2.html 57 Id. See also Editorial, The Job-Creating Mercury Rule, N.Y. TIMES, Feb. 22, 2012, available 

at http://www.nytimes.com/2012/02/23/opinion/the-job-creating-mercury-rule.html (noting that an 

estimated 11,000 deaths will be prevented by pending mercury rule under the Clean Air Act). 58See, e.g., H.R. 3010 Hearing; Formal Rulemaking and Judicial Review: Protecting Jobs and 

the Economy with Greater Regulatory Transparency and Accountability: Hearing Before the 

Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th 

Cong. (2011) [hereinafter Formal Rulemaking Hearing]; Cost-Justifying Regulations: Protecting 

Jobs and the Economy by Presidential and Judicial Review of Costs and Benefits: Hearing Before 

the Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th 

Cong. (2011); Raising the Agencies’ Grades—Protecting the Economy, Assuring Regulatory Quality and Improving Assessments of Regulatory Need: Hearing Before the Subcomm. on Courts, 

Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011); The Regulations From the Executive in Need of Scrutiny Act of 2011: Hearing on H.R. 10 Before the 

Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th 

Cong. (2011); The APA at Six—Is Reform Needed to Create Jobs, Promote Economic Growth, and 

Reduce Costs?: Hearing Before the Subcomm. on Courts, Commercial and Admin. Law of the H. 

Comm. on the Judiciary, 112th Cong. (2011); Regulatory Flexibility Improvements Act of 2011’’— 

Unleashing Small Businesses to Create Jobs: Hearing on H.R. 527 Before the Subcomm. on 

Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011 The 

REINS Act—Promoting Jobs and Expanding Freedom by Reducing Needless Regulations: Hearing Before the Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011). 

years of the George W. Bush Administration.52 Similarly, the 2011 

report concluded that for fiscal year 2010, Federal regulations cost 

between $6.5 billion and $12.5 billion, but generated between $18.8 

billion and $86.1 billion in benefits.53 According to OMB, the costs 

of regulations during the ten-year period from FY 1999 through FY 

2009 were between $43 billion and $55 billion, while their benefits 

ranged from $128 billion to $616 billion.54 Therefore, even if one 

uses OMB’s highest estimate of costs and its lowest estimate of 

benefits, the regulations issued over the past ten years have produced net benefits of $73 billion to our society. Such estimates were 

consistent across Democratic and Republican administrations.55

Given that the benefits of regulations consistently exceed the costs, 

the need for any legislation that would make the issuance of regulations more difficult or time consuming is certainly in question. 

The benefits of regulation are also apparent when viewed 

through the lens of prevention. For example, a 2011 Environmental 

Protection Agency report found that the public health benefits of 

clean air regulations far outweigh the compliance cost to industry.56 The report concluded that restrictions on fine particle and 

ground-level ozone pollution mandated by the 1990 Clean Air Act 

amendments would prevent 230,000 deaths and produce benefits of 

about $2 trillion by 2020.57

IV. H.R. 4078 FAILS TO ACCOUNT FOR THE ALREADY-EXTENSIVE

RULEMAKING PROCESS

As we have discussed over the course of a series of anti-regulatory hearings during the past year,58 regulations are not promulgated in a vacuum. The Constitution provides that the government 

may not deprive anyone of life, liberty, or property without ‘‘due 


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59 U.S. Const. amend. XIV, § 1. 60The APA defines ‘‘rulemaking’’ as the ‘‘agency process for formulating, amending or repealing a rule.’’ 5 U.S.C. § 551(5) (2012). A ‘‘rule,’’ in turn, is defined as ‘‘an agency statement of 

general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an 

agency.’’ 5 U.S.C. § 551(4) (2012). 61Gary J. Edles, Lessons from the Administrative Conference of the United States, 2 EUR. PUB. L. 571, 572 (1996). 62Letter from 52 administrative law academics to House Judiciary Committee Chair Lamar 

Smith and House Judiciary Committee Ranking Member John Conyers, Jr., at 1 (Oct. 24, 2011) 

(on file with the H. Committee on the Judiciary, Democratic Staff). 63See, e.g., Regulatory Flexibility Act, 5 U.S.C. §§ 603, 604 (2012) (requiring assessments of 

regulatory impact of proposed and final rules on small entities); Unfunded Mandates Reform 

Act, 2 U.S.C. §§ 1531–1538 (2012) (requiring assessments of regulatory impact on state and local 

government entities of proposed and final rules). 

process of law.’’ 59 This constitutional mandate of fair procedure applies to the Federal regulatory rulemaking and adjudicatory processes, the impact of which can be extensive. 

The APA, enacted in 1946, establishes the minimum rulemaking 60 and formal adjudication requirements for all Federal 

agencies. The APA also sets forth standards for judicial review of 

final agency actions. While the APA sets minimum standards, 

many agency actions may involve procedures that depart from or 

go beyond APA requirements. As one academic noted, ‘‘[T]he American administrative system, by evolution and design, is characterized by a considerable degree of informality, agency discretion and 

procedural flexibility.’’ 61 The APA’s baseline procedural requirements are designed to maintain a balance between this type of 

agency flexibility and the requirements of due process. As more 

than 50 leading administrative law academics observed, ‘‘The APA 

has served for 65 years as a kind of Constitution for administrative 

agencies and the affected public—flexible enough to accommodate 

the variety of agencies operating under it and the changes in modern life.’’ 62

Agencies follow the informal notice-and-comment process for promulgating rules as outlined in section 553 of the APA in most instances. Notice-and-comment rulemaking, while flexible, is also 

subject to many procedural and analytical requirements, including 

those imposed by statutes other than the APA.63 In fact, the current process may already be too‘‘ossified.’’ As Harvard Law School 

Professor Matthew C. Stephenson testified last year: 

It turns out, however, that the term ‘informal rulemaking’ is misleading. Nominally ‘informal’ notice-andcomment rulemaking is in fact heavily proceduralized, to 

the point where many commentators describe this process 

as a kind of ‘‘paper hearing.’’ Agencies must provide a fairly detailed and specific proposal, or set of alternatives, in 

their initial published notice of proposed rulemaking. This 

notice must also disclose the scientific or evidentiary basis 

of the proposal, so that the agency’s evidence can be subjected to critical scrutiny. Any interested party (indeed, 

any member of the public) may submit written comments 

on the agency’s proposal. These submissions may criticize 

the agency’s analysis and evidence, and may also suggest 

alternatives. Under Executive Order 12866, executive 

branch agencies must also submit proposed rules, along 

with a detailed cost-benefit analysis, to the Office of Management and Budget for review. If the agency decides to 


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64Formal Rulemaking Hearing (statement of Matthew C. Stephenson, Harvard Law School) 

(citations omitted); see also H.R. 3010 Hearing (statement of Sidney Shapiro, Wake Forest Law 

School) (‘‘The regulatory system is already too ossified, and H.R. 3010 would only exacerbate 

this problem.’’). 65 Exec. Order No. 10,934, 26 Fed. Reg. 3233 (Apr. 13, 1961). 66 Curtis W. Copeland, Electronic Rulemaking in the Federal Government, Congressional Research Service Report for Congress, RL34210, at 2 (May 16, 2008). 

promulgate a final rule, it must provide a detailed written 

explanation that includes responses to all material comments submitted by interested parties. If an agency fails 

to respond adequately to criticisms or proposed alternatives submitted by commenters, the agency risks judicial 

reversal. This creates powerful incentives for agencies to 

take comments seriously and to provide detailed responses. 

Furthermore, if the agency decides to change its policy 

substantially in response to comments, it may have to initiate a new round of notice-and-comment so that all parties have a fair opportunity to critique the new proposal. . . . Indeed, the more common criticism of noticeand-comment rulemaking is that it is too demanding of 

agencies....64

Additionally, agencies may choose or may be required by statute to 

use other rulemaking procedures, including formal rulemaking, negotiated rulemaking, and hybrid or expedited approaches, which 

generally tend to have greater procedural requirements and be subject to stricter judicial review than section 553 notice-and-comment 

rulemaking. 

Admittedly, the regulatory process in the United States is not beyond perfection. President John F. Kennedy, in 1961, observed that 

‘‘the steady expansion of the Federal administrative process during 

the past several years has been attended by increasing concern 

over the efficiency and adequacy of department and agency procedures.’’ 65 With Federal agencies issuing ‘‘more than 4,000 final 

rules each year on topics ranging from the timing of bridge openings to the permissible levels of arsenic and other contaminants in 

drinking water,’’ 66 the current Federal regulatory process faces 

some significant challenges. 

Nonetheless, opponents of regulation have made unsupported assertions that the rulemaking process failed properly to account for 

compliance costs and industry input, which were the subject of a 

series of hearings before the Subcommittee and full Committee last 

year. Testimony and other evidence presented by Minority witnesses at these hearings, however, clearly demonstrated that these 

assertions were completely unfounded. 

V. H.R. 4078 IS UNWORKABLE AND WILL CREATE MORE, 

NOT LESS, UNCERTAINTY

A. H.R. 4078 Is Inherently Unworkable 

Besides being based on false premises, H.R. 4078 also would impose an unworkable process on agencies. Section 3 of the bill specifically provides that the moratorium applies for ‘‘any quarter’’ 

where the Bureau of Labor Statistics average of monthly unemployment rates is equal to or less than six percent. In light of the 

fact that unemployment rates can fluctuate from quarter to quarter, this means that agencies would have to stop and restart the 


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67 U.S. Dep’t of Labor, Bureau of Labor Statistics—Labor Force Statistics from the Current 

Population Survey (data extracted Feb. 21, 2012; 4:15 pm), available at http://data.bls.gov/ 

timeseries/LNS14000000. 68 Id. 69Section 5(f) provides that the judicial review period is one year from the date of the challenged agency action or 90 days after an enforcement action. 70Pub. L. No. 111–203 (2010). 

promulgation of a rulemaking depending on the average unemployment rate, including the period for public notice and comment. For 

example, the average unemployment rate in 2003 was below six 

percent for the first quarter, but then exceeded that threshold in 

the second and third quarters.67 It then was below six percent in 

the last quarter of 2003.68 Moreover, the bill is silent as to whether 

the agency would have to re-notice or simply suspend the comment 

period. Either way, the moratorium as conceived in H.R. 4078 

would be totally unpredictable and unnecessarily disruptive to the 

enforcement of Federal policy. 

B. H.R. 4078 Promotes More, Not Less Uncertainty 

Given the intermittent nature of the bill’s regulatory moratorium, as explained in the preceding section, the clear import of 

H.R. 4078 will be to create uncertainty. Businesses would have no 

ability to predict when a rule would ever be finalized, especially 

given the impact of events that could occur, but over which the 

Federal Government has no control, e.g., a worldwide fuel shortage, 

an international virus outbreak, or other far-ranging crisis. In addition, the period during which a person may seek judicial review of 

a challenged agency action under the bill can be in excess of one 

year,69 which put businesses in the unfortunate position of having 

to expend funds to comply with a rule that is later successfully set 

aside under this bill. 

To illustrate the bill’s deleterious effects, Representative Mel 

Watt (D-NC), during the Committee markup of H.R. 4078, discussed how H.R. 4078 would affect regulations required to be promulgated pursuant to the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd Frank).70 He explained: 

My concern with this bill is that it adds to the level of 

uncertainty because what most of my constituents are saying is we need to get on with adopting and finalizing the 

regulations under Dodd-Frank so that we know what the 

rules of the road are going forward. 

And it is that uncertainty that is causing us not to be 

able to plan and not to be able to adapt our business plans 

to what is necessary going forward so that we don’t have 

another economic, financial services meltdown like we had 

in the past. We know that we need to make adjustments, 

but we need to have the final regulations in place to be 

able to do that. 

The problem I have with this bill is that it does not add 

to the level of certainty that businesses have because, apparently, whatever those regulations are in process under 

Dodd-Frank will be put on hold now, waiting for the unemployment rate to drop below 6 percent. If it drops below 6 

percent for a little while, maybe they can gear up again 

and start writing the regulations again and publishing 

them. 


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71Markup at 39–40. 72 Exec. Order No. 12,866, 58 Fed. Reg. 51735, 51741 (Oct. 4, 1993) (emphasis supplied). 

But if it happens to go back over 6 percent during that 

period . . . then they have to suspend again, apparently, 

under this bill. So we may get to a degree of certainty....71

Representative Sheila Jackson Lee (D-TX) thereafter offered an 

amendment that would have excluded any rule or guidance issued 

pursuant to the Dodd-Frank Act. This amendment, however, failed 

by a vote of 11 to 14. 

C. H.R. 4078 Does Not Specify Who Will Make the Determination 

That a Regulatory Action is ‘‘Significant’’ 

While section 2 of H.R. 4078 defines ‘‘significant regulatory action,’’ the bill fails to identify who would determine whether a rule 

or guidance is covered by such definition and how such determination would be made. Ostensibly, the bill appears to lift this definition largely from Executive Order 12866, but it does so in a vacuum. For example, the Executive Order specifies a protocol requiring 

agencies to submit to OIRA a ‘‘list of its planned regulatory actions, 

including those which the agency believes are significant regulatory 

actions within the meaning of this Executive order.’’ 72 Under the 

Executive Order, OIRA is given supervisory authority over agencies 

to ensure their compliance. In contrast, H.R. 4078 is silent as to 

who would make this determination and whether such determination is subject to challenge. 

D. H.R. 4078’s Definition of Significant Regulatory Action Is Vague 

As noted above, H.R. 4078’s definition of ‘‘significant regulatory 

action’’ is largely derived from Executive Order 12866. By taking 

the language of the Executive Order out of context, however, H.R. 

4078 fails to clarify how this definition should be interpreted and 

applied. For example, when would a proposed rule ‘‘adversely affect 

in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, 

small entities, or State, local, or tribal governments or communities’’? What degree of materiality is contemplated by this provision? 

E. H.R. 4078 Mandates Unreasonable Standards for the Award of 

Fees and Costs 

Section 5(e) of the bill requires a court to award reasonable attorneys fees and costs to a ‘‘substantially prevailing’’ business in any 

civil action arising under this legislation. This provision is problematic for two reasons. First, it conflicts with most Federal fee-shifting provisions that give the courts discretion with regard to such 

awards. Of those statutes that mandate the award of fees and 

costs, usually there is a requirement that the court find the action 

of the litigant was in bad faith, frivolous, or otherwise lacking in 

merit. H.R. 4078, however, imposes a strict liability mandate, even 

if the agency acted in good faith. Second, the bill requires such 

awards be made even if the small business fails to obtain a final 

judgment where the agency changes its position after the civil action is filed. The measure, however, fails to require any causal link 


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73 CBO Cost Estimate at 1. 74 Id. at 3. 75 Id. 76 Id. at 4. 

between the agency’s action and the small business’s lawsuit. 

Agencies may change their position for any number of reasons, 

none of which may have any connection to a pending civil action, 

such as newly discovered evidence, changed circumstances, or reordered priorities pursuant to a new Administration’s assumption of 

power. This provision would result in unjust enrichment for private 

parties at the expense of the American taxpayer. 

F. Not Even the Congressional Budget Office Can Determine the 

Budgetary Impacts of H.R. 4078 

CBO, in its analysis of the budgetary impact of H.R. 4078, discussed a series of problematic aspects presented by the measure. 

While the bill ‘‘could have a significant impact on spending subject 

to appropriation,’’ it could not determine the ‘‘magnitude of that effect.’’ 73 Part of the difficulty in analyzing the impact of H.R. 4078, 

CBO observed, is the fact that it would delay significant regulatory 

actions until the average of monthly unemployment rates for any 

quarter is six percent or lower. As CBO explained: 

Under CBO’s most recent economic forecast, the unemployment rate is expected to remain elevated for at least the 

next few years; in those projections the unemployment 

rate would remain above 6.0 percent until late 2016. However, many developments could cause economic outcomes 

to differ substantially, in one direction or the other. For 

example, the economy could grow more rapidly—or more 

slowly—with a consequent acceleration (or reduction) in 

the pace of employment. Furthermore, changes in fiscal 

policy that diverge from the path assumed in CBO’s baseline could have a significant impact on economic growth 

and, by extension, the unemployment rate.74

With respect to direct spending, CBO cited examples of how the 

legislation could adversely impact Medicare service providers and 

American taxpayers. CBO explained that the bill, if enacted, would 

freeze annual updates to payment schedules applicable to hospitals, physicians, and other Medicare service providers. On the 

other hand, H.R. 4078 would also prevent payment rate reductions 

scheduled to take place under the Medicare physician fee schedule.75

In addition, the CBO observed that the bill may affect the implementation of new laws, including the Affordable Care Act, and 

other initiatives. As to the latter, CBO cited title VI of the Middle 

Class Tax Relief and Job Creation Act of 2012, which authorizes 

the Federal Communications Commission to develop proposed rules 

for incentive auctions. By delaying these initiatives, H.R. 4078 

could reduce expected auction receipts ‘‘by several billion dollars 

over the 2013–2022 period, relative to current law.’’ 76

Finally, the CBO noted that the legislation, by ‘‘delaying significant regulatory actions of the Internal Revenue Service,’’ could reduce collections of revenues in some cases and increase the collecVerDate Mar 15 2010 00:33 Apr 28, 2012 Jkt 019006 PO 00000 Frm 00037 Fmt 6659 Sfmt 6601 E:\HR\OC\HR461P1.XXX HR461P1

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77 Id. 78 Id. 

tions in other cases.77 The bill ‘‘would also directly affect revenues 

through the operations of the Federal Reserve’’ by limiting its ability ‘‘to conduct monetary policy because some parameters, such as 

the discount rate and the interest paid on reserves, are specified 

in regulations.’’ 78

VI. H.R. 4078 May Undermine Job Creation By Increasing the Risk 

of Regulatory Failure 

During recessionary times, unemployment rates increase. Major 

financial distress in American history has often been triggered by 

a regulatory failure of some type. The Great Depression largely resulted from the failure of severely uncapitalized banks that engaged in imprudent lending practices and other speculative activities. The current Great Recession was largely fueled by an unregulated home mortgage industry and securitization market. 

Rather than promoting employment, however, H.R. 4078 would 

foster more unemployment by tying the hands of the government 

from instituting regulatory reforms that are most needed to address the causes of the major financial distress. For example, it is 

very likely that H.R. 4078, if it was enacted, would prevent regulators, such as the Securities and Exchange Commission, from instituting corrective regulations intended to prevent another Great 

Recession. 

VII. Judicial Review of Executive Orders May Present Separation of 

Powers Concerns 

Section 4(a) of the bill authorizes an agency to take a significant 

regulatory action if the President makes a determination that such 

action qualifies under one of the enumerated waivers set forth in 

section 4(b). Section 5(b) of the bill, in turn, specifies that ‘‘[a]ny 

person who is adversely affected or aggrieved’’ by any such determination by the President is subject to judicial review under the 

APA. In effect, this provision would permit a private individual to 

apply to a court, which could then second-guess the President’s determination that a waiver was necessary to address national security or public health concerns under the various standards set forth 

in the APA. Under these standards, a court may set aside actions 

found to be: 

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; 

(B) contrary to constitutional right, power, privilege, or immunity; 

(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; 

(D) without observance of procedure required by law; 

(E) unsupported by substantial evidence in a case subject 

to sections 556 and 557 of this title or otherwise reviewed 

on the record of an agency hearing provided by statute; or 


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79 5 U.S.C. § 706 (2012). 80 Id. 81Franklin v. Massachusetts, 505 U.S. 788, 796 (1992). 82 Id. at 801. 83 U.S. Const. art. II, sec. 3. 

(F) unwarranted by the facts to the extent that the facts 

are subject to trial de novo by the reviewing court.79

In making this determination, the court must review the entire 

record.80

The Supreme Court has held that the ‘‘President is not an agency 

within the meaning of the [Administrative Procedure] Act.’’ 81 To 

make the President subject to the APA, the Court stated that it 

‘‘would require an express statement by Congress before assuming 

it intended the performance of the President’s statutory duties to 

be reviewed for abuse of discretion.’’ 82 It is unclear, however, 

whether the requirements of H.R. 4078 presents an unwarranted 

intrusion into the President’s constitutional authority to ‘‘take Care 

that the Laws be faithfully executed.’’ 83

CONCLUSION

We oppose H.R. 4078 because it is based on the false premise 

that regulations stifle job creation and cause business uncertainty. 

By placing a moratorium on significant regulatory actions and by 

including insufficient exceptions and an illusory congressional 

waiver provision, H.R. 4078 ignores the benefits of regulation and 

threatens public health and safety. H.R. 4078 is also unworkable 

because it relies on an indeterminate standard for establishing 

when a regulatory moratorium should begin and end and is full of 

other ambiguities. These ambiguities will only lead to greater uncertainty and societal harm through regulatory failure. Finally, 

H.R. 4078 may raise separation of powers concerns because of its 

interference with the judicial role in reviewing regulatory action. 

For these reasons, we respectfully dissent and urge our colleagues 

to oppose this bill. 

JOHN CONYERS, JR. HOWARD L. BERMAN. JERROLD NADLER. ROBERT C. ‘‘BOBBY’’ SCOTT. 

MELVIN L. WATT. 

SHEILA JACKSON LEE. 

STEVE COHEN. 

HENRY C. ‘‘HANK’’ JOHNSON, JR. 

MIKE QUIGLEY. 

TED DEUTCH. 

Æ 


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