Shining Light on the Federal Regulatory Process

SHINING LIGHT ON THE FEDERAL REGULATORY PROCESS HEARING BEFORE THE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED FIFTEENTH CONGRESS SECOND SESSION MARCH 14, 2018 Serial No. 115–73 Printed for the use of the Committee on Oversight and Government Reform ( Available via the World Wide Web: http://www.fdsys.gov http://oversight.house.gov U.S. GOVERNMENT PUBLISHING OFFICE 30–942 PDF WASHINGTON : 2018 VerDate Nov 24 2008 09:57 Sep 04, 2018 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 H:\30942.TXT APRIL KING-6430 with DISTILLER COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM Trey Gowdy, South Carolina, Chairman John J. Duncan, Jr., Tennessee Elijah E. Cummings, Maryland, Ranking Darrell E. Issa, California Minority Member Jim Jordan, Ohio Carolyn B. Maloney, New York Mark Sanford, South Carolina Eleanor Holmes Norton, District of Columbia Justin Amash, Michigan Wm. Lacy Clay, Missouri Paul A. Gosar, Arizona Stephen F. Lynch, Massachusetts Scott DesJarlais, Tennessee Jim Cooper, Tennessee Blake Farenthold, Texas Gerald E. Connolly, Virginia Virginia Foxx, North Carolina Robin L. Kelly, Illinois Thomas Massie, Kentucky Brenda L. Lawrence, Michigan Mark Meadows, North Carolina Bonnie Watson Coleman, New Jersey Ron DeSantis, Florida Raja Krishnamoorthi, Illinois Dennis A. Ross, Florida Jamie Raskin, Maryland Mark Walker, North Carolina Jimmy Gomez, Maryland Rod Blum, Iowa Peter Welch, Vermont Jody B. Hice, Georgia Matt Cartwright, Pennsylvania Steve Russell, Oklahoma Mark DeSaulnier, California Glenn Grothman, Wisconsin Stacey E. Plaskett, Virgin Islands Will Hurd, Texas John P. Sarbanes, Maryland Gary J. Palmer, Alabama James Comer, Kentucky Paul Mitchell, Michigan Greg Gianforte, Montana SHERIA CLARKE, Staff Director ROBERT BORDEN, Deputy Staff Director WILLIAM MCKENNA, General Counsel JAMES LESINSKI, Counsel KILEY BIDELMAN, Clerk DAVID RAPALLO, Minority Staff Director (II) VerDate Nov 24 2008 09:57 Sep 04, 2018 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 H:\30942.TXT APRIL KING-6430 with DISTILLER C O N T E N T S Page Hearing held on March 14, 2018 ............................................................................ 1 WITNESSES Ms. Kris Nguyen, Acting Director for Strategic Issues, Government Account- ability Office Oral Statement ................................................................................................. 5 Written Statement ............................................................................................ 7 Mr. Paul Noe, Vice President, Public Policy, American Forest and Paper Association Oral Statement ................................................................................................. 28 Written Statement ............................................................................................ 30 Ms. Karen Harned, Executive Director, National Federation of lndependent Business: Small Business Legal Center Oral Statement ................................................................................................. 54 Written Statement ............................................................................................ 56 Professor Nicholas Parrillo, Professor of Law, Yale Law School Oral Statement ................................................................................................. 66 Written Statement ............................................................................................ 68 Mr. Amit Narang, Regulatory Policy Advocate, Public Citizen Oral Statement ................................................................................................. 89 Written Statement ............................................................................................ 92 APPENDIX U.S. General Services Administration, Office of lnspector General, report titled, ‘‘Evaluation of GSA Nondisclosure Policy,’’ submitted by Ms. Maloney ................................................................................................................. 128 Submission of Federal Rules Under the Congressional Review Act form, submitted by Mr. Palmer .......................................................................................... 150 (III) VerDate Nov 24 2008 09:57 Sep 04, 2018 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 H:\30942.TXT APRIL KING-6430 with DISTILLER VerDate Nov 24 2008 09:57 Sep 04, 2018 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 H:\30942.TXT APRIL KING-6430 with DISTILLER SHINING LIGHT ON THE FEDERAL REGULATORY PROCESS Wednesday, March 14, 2018 HOUSE OF REPRESENTATIVES, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, D.C. The committee met, pursuant to call, at 10:02 a.m., in Room 2154, Rayburn House Office Building, Hon. Trey Gowdy [chairman of the committee] presiding. Present: Representatives Gowdy, Duncan, Jordan, Amash, Farenthold, Meadows, DeSantis, Ross, Walker, Blum, Grothman, Hurd, Palmer, Comer, Maloney, Norton, Connolly, Kelly, Krishnamoorthi, Welch, and Plaskett. Chairman GOWDY. Good morning. The Committee on Oversight and Government Reform will come to order. Without objection, the presiding member is authorized to declare a recess at any time. I want to welcome our guests. I will introduce you individually in just a moment, but for now I will recognize my friend from North Carolina for his opening statement. Mr. Meadows. Mr. MEADOWS. Thank you, Mr. Chairman. Thank you for your leadership in calling this hearing. Obviously, Federal agencies have a very active role assigned to them by Congress, and what they do touches the daily lives of the public. There is no doubt that Federal agencies play an important role in our government, but they should still play by the rules laid down by Congress when it comes to issuing the rules themselves. The rulemaking process has changed over time and can get very technical, but what has not changed is only Congress can legislate and agencies cannot issue regulations unilaterally. Rules are supposed to be issued in accordance with several statutes and executive orders, but, as is the case with this hearing today, and it will show today, that this doesn’t always happen. In fact, in 2016 alone, 18 regulations were issued for each law passed by Congress, not to mention the hundreds of pages of guidance that came along with those regulations. According to the Federal Register, agencies issued 3,280 rules last year. Now, this amounts to just a little bit less than nine rules per day, including weekends and Federal holidays. Now, that’s an improvement over the previous administration, where we saw 10– 1/2 rules passed each day in 2016. Now, several laws and executive orders establish a regulatory process designed to require agencies to consult with the affected (1) VerDate Nov 24 2008 09:57 Sep 04, 2018 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 H:\30942.TXT APRIL KING-6430 with DISTILLER 2 parties, evaluate their benefits and certainly the compliance bur- dens and other costs, and consider alternatives to regulate. Now, we know Federal agencies are not consistently following the rules Congress and the President have established. In fact, re- cently, GAO released the findings of an audit concluding that agencies have become increasingly noncompliant with the Congressional Review Act. And when issuing rules at the end of a Presidential administration—this is particularly evident—especially when they have significant impact, those rules which actually cost the econ- omy at least $100 million. Agencies also issue guidance, which is a statement of policy or an interpretation of the law or regulations. Generally, guidance is supposed to inform the public of how to comply with those laws. Unfortunately, we don’t know how many guidance documents agencies have issued, nor do we know how much it will cost the econ- omy. One of our witnesses today has written that, while no one knows how many guidance documents are out there, everyone agrees that the total is oceanic in scale. Late last year, our committee launched an oversight project on regulatory guidance documents. In response to our December re- quest, agencies provided information on more than 12,800 documents. Now, the final number is still rising as agencies continue to produce the information. Agencies have also had difficulty in complying with a few exist- ing requirements for issuing guidance documents. In fact, in 2015, the GAO undertook an audit of the Departments of Agriculture, Education, Health and Human Services, and Labor and found shortcomings in complying with applicable requirements. The committee’s oversight project also found widespread non- compliance with the CRA in the executive directives. Agencies re- ported to the committee that they had submitted just 189 guidance documents to Congress and the GAO, as it is required by the CRA. That’s a submission rate of less than 0.015 percent. In the last 5 months, GAO has issued four opinions to Members of Congress finding certain guidance documents are considered rules under the Congressional Review Act and, therefore, must be submitted. Now, in conclusion, we know that more congressional requests for opinions on whether certain guidance documents are pending before the CRA. Clearly, GAO will never be able to review the more than 12,800 guidance documents in our limited sample, let alone the entire universe of the agency guidance. And there is some sort of disconnect between what the law says and what agencies do. So we look forward to hearing your testimony today and you shining the light on this regulatory

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