Assessing the Obama Years: Oira and Regulatory Impacts on Jobs, Wages and Economic Recovery
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ASSESSING THE OBAMA YEARS: OIRA AND REGULATORY IMPACTS ON JOBS, WAGES AND ECONOMIC RECOVERY HEARING BEFORE THE SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW OF THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION JULY 6, 2016 Serial No. 114–85 Printed for the use of the Committee on the Judiciary ( Available via the World Wide Web: http://judiciary.house.gov U.S. GOVERNMENT PUBLISHING OFFICE 20–632 PDF WASHINGTON : 2016 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON THE JUDICIARY BOB GOODLATTE, Virginia, Chairman F. JAMES SENSENBRENNER, JR., JOHN CONYERS, JR., Michigan Wisconsin JERROLD NADLER, New York LAMAR S. SMITH, Texas ZOE LOFGREN, California STEVE CHABOT, Ohio SHEILA JACKSON LEE, Texas DARRELL E. ISSA, California STEVE COHEN, Tennessee J. RANDY FORBES, Virginia HENRY C. ‘‘HANK’’ JOHNSON, JR., STEVE KING, Iowa Georgia TRENT FRANKS, Arizona PEDRO R. PIERLUISI, Puerto Rico LOUIE GOHMERT, Texas JUDY CHU, California JIM JORDAN, Ohio TED DEUTCH, Florida TED POE, Texas LUIS V. GUTIERREZ, Illinois JASON CHAFFETZ, Utah KAREN BASS, California TOM MARINO, Pennsylvania CEDRIC RICHMOND, Louisiana TREY GOWDY, South Carolina SUZAN DelBENE, Washington RAU´ L LABRADOR, Idaho HAKEEM JEFFRIES, New York BLAKE FARENTHOLD, Texas DAVID N. CICILLINE, Rhode Island DOUG COLLINS, Georgia SCOTT PETERS, California RON DeSANTIS, Florida MIMI WALTERS, California KEN BUCK, Colorado JOHN RATCLIFFE, Texas DAVE TROTT, Michigan MIKE BISHOP, Michigan SHELLEY HUSBAND, Chief of Staff & General Counsel PERRY APELBAUM, Minority Staff Director & Chief Counsel SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW TOM MARINO, Pennsylvania, Chairman BLAKE FARENTHOLD, Texas, Vice-Chairman DARRELL E. ISSA, California HENRY C. ‘‘HANK’’ JOHNSON, JR., DOUG COLLINS, Georgia Georgia MIMI WALTERS, California SUZAN DelBENE, Washington JOHN RATCLIFFE, Texas HAKEEM JEFFRIES, New York DAVE TROTT, Michigan DAVID N. CICILLINE, Rhode Island MIKE BISHOP, Michigan SCOTT PETERS, California DANIEL FLORES, Chief Counsel SLADE BOND, Minority Counsel (II) C O N T E N T S JULY 6, 2016 Page OPENING STATEMENTS The Honorable Tom Marino, a Representative in Congress from the State of Pennsylvania, and Chairman, Subcommittee on Regulatory Reform, Com- mercial and Antitrust Law .................................................................................. 1 The Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Ranking Member, Subcommittee on Regu- latory Reform, Commercial and Antitrust Law ................................................. 3 The Honorable Bob Goodlatte, a Representative in Congress from the State of Virginia, and Chairman, Committee on the Judiciary ................................. 4 The Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, and Ranking Member, Committee on the Judiciary ......... 6 WITNESSES The Honorable Howard Shelanski, Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget Oral Testimony ..................................................................................................... 7 Prepared Statement ............................................................................................. 10 William W. Beach, Ph.D., Vice President for Policy Research, Mercatus Cen- ter at George Mason University Oral Testimony ..................................................................................................... 24 Prepared Statement ............................................................................................. 26 Clyde Wayne Crews, Jr., Vice President for Policy/Director of Technology Studies, Competitive Enterprise Institute Oral Testimony ..................................................................................................... 32 Prepared Statement ............................................................................................. 34 David M. Driesen, Esq., Professor of Law, Syracuse University College of Law Oral Testimony ..................................................................................................... 78 Prepared Statement ............................................................................................. 80 Douglas Holtz-Eakin, President, American Action Forum Oral Testimony ..................................................................................................... 90 Prepared Statement ............................................................................................. 92 APPENDIX MATERIAL SUBMITTED FOR THE HEARING RECORD Response to Questions for the Record from the Honorable Howard Shelanski, Administrator, Office of Information and Regulatory Affairs .......................... 114 Response to Questions for the Record from William W. Beach, Ph.D., Vice President for Policy Research, Mercatus Center at George Mason Univer- sity ......................................................................................................................... 117 Response to Questions for the Record from Clyde Wayne Crews, Jr., Vice President for Policy/Director of Technology Studies, Competitive Enterprise Institute ................................................................................................................ 121 Response to Questions for the Record from Douglas Holtz-Eakin, President, American Action Forum ....................................................................................... 124 (III) OFFICIAL HEARING RECORD UNPRINTED MATERIAL SUBMITTED FOR THE HEARING RECORD Supplemental material submitted by David M. Driesen, Esq., Professor of Law Syra- cuse University College of Law. This material is available at the Subcommittee and can also be accessed at: http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=105157 (IV) ASSESSING THE OBAMA YEARS: OIRA AND REGULATORY IMPACTS ON JOBS, WAGES AND ECONOMIC RECOVERY WEDNESDAY, JULY 6, 2016 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW COMMITTEE ON THE JUDICIARY, Washington, DC. The Subcommittee met, pursuant to call, at 3:03 p.m., in Room 2226, Rayburn House Office Building, the Honorable Tom Marino (Chairman of the Subcommittee) presiding. Present: Representatives Marino, Goodlatte, Collins, Ratcliffe, Trott, Bishop, Johnson, Conyers, and DelBene. Staff Present: (Majority) Daniel Huff, Counsel; Andrea Lindsey, Clerk; (Minority) Slade Bond, Chief Counsel. Mr. MARINO. The Subcommittee on Regulatory Reform, Commer- cial and Antitrust Law will come to order. Without objection, the Chair is authorized to declare a recess of the Committee at any time, and that is going to take place in about 30 minutes, 30 to 40 minutes because we will be voting. Welcome to this hearing entitled ‘‘Assessing the Obama Years: OIRA and Regulatory Impacts on Jobs, Wages, and Economic Re- covery.’’ This topic is of the highest importance to working Ameri- cans. The last recession ended in 2009, but the economy has been limping along ever since. Job growth has been weak. Households’ incomes have stayed put. The economy has not grown by more than 3 percent in any of the one of these years. One clear contributor is the growing Federal regulatory burden. Under the Obama administration, the number of major regula- tions promulgated per year has increased dramatically. In 2015, Federal regulations imposed an estimated cost of $1.89 trillion. To put this in perspective, U.S. regulatory costs now exceed the gross domestic product of both Australia and Canada. Numerous studies and the agencies themselves concede that on an industry-specific level, regulations lead to job losses. At a minimum, the data also establishes probable cause for concern that regulations decrease employment in the aggregate. Data shows that even where workers in regulated industries find new jobs, the displacement triggers a lifetime of physical and economic problems. (1) 2 Accordingly, as President Obama’s former OIRA Administrator Cass Sunstein said, ‘‘Regulators must take that possibility seri- ously.’’ Unfortunately, regulators are not following this prudent path. A recent study of agencies’ Regulatory Impact Analyses found that only approximately 20 percent qualified employment effects. Since 2009, the Obama administration has imposed 229 major reg- ulations at a cost, by its own estimate, of $108 billion annually. Merely administrating regulations in 2015 was estimated to cost taxpayers over $57 billion, an 83 percent increase over 2001. The effects are dire. A September 2015 study by a Princeton Nobel laureate shows ‘‘shocking’’ rising mortality among blue collar segments of society. According to the study’s author, ‘‘those are the people who have really been hammered by the economic malaise. Their wages in real terms have been going down.’’ The economic stress is leading to drug and alcohol dependency and death, mental health prob- lems, and even suicide. The Administration is dismissive. It cir- cumvents reasonable procedures designed to limit burdensome reg- ulations. It uses technical gimmicks to claim speculative benefits outweigh regulatory cost. Delegations of power are read broadly, while limitations are read narrowly. Half of the Administration’s vetoes have been used to block congressional