[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]



 
          THE VIEWS OF THE ADMINISTRATION ON REGULATORY REFORM

=======================================================================




                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 26, 2011

                               __________

                            Serial No. 112-1


      Printed for the use of the Committee on Energy and Commerce

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                    COMMITTEE ON ENERGY AND COMMERCE

       FRED UPTON, Michigan
              Chairman
JOE BARTON, Texas
  Chairman Emeritus
CLIFF STEARNS, Florida
ED WHITFIELD, Kentucky
JOHN SHIMKUS, Illinois
JOSEPH R. PITTS, Pennsylvania
MARY BONO MACK, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
MIKE ROGERS, Michigan
SUE MYRICK, North Carolina
  Vice Chair
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
BRIAN BILBRAY, California
CHARLIE BASS, New Hampshire
PHIL GINGREY, Georgia
STEVE SCALISE, Louisiana
BOB LATTA, Ohio
CATHY McMORRIS RODGERS, Washington
GREGG HARPER, Mississippi
LEONARD LANCE, New Jersey
BILL CASSIDY, Louisiana
BRETT GUTHRIE, Kentucky
PETE OLSON, Texas
DAVID McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
MORGAN GRIFFITH, Virginia            HENRY A. WAXMAN, California
                                       Ranking Member
                                     JOHN D. DINGELL, Michigan, 
                                         Chairman Emeritus
                                     EDWARD J. MARKEY, Massachusetts
                                     EDOLPHUS TOWNS, New York
                                     FRANK PALLONE, Jr., New Jersey
                                     BOBBY L. RUSH, Illinois
                                     ANNA G. ESHOO, California
                                     ELIOT L. ENGEL, New York
                                     GENE GREEN, Texas
                                     DIANA DeGETTE, Colorado
                                     LOIS CAPPS, California
                                     JANE HARMAN, California
                                     JAN SCHAKOWSKY, Illinois
                                     CHARLES A. GONZALEZ, Texas
                                     JAY INSLEE, Washington
                                     TAMMY BALDWIN, Wisconsin
                                     MIKE ROSS, Arkansas
                                     ANTHONY D. WEINER, New York
                                     JIM MATHESON, Utah
                                     G.K. BUTTERFIELD, North Carolina
                                     JOHN BARROW, Georgia
                                     DORIS O. MATSUI, California
_________________________________________________________________

                           Professional Staff

    Gary Andres, Staff Director
James D. Barnette, General Counsel
Philip S. Barnett, Minority Staff 
             Director

                                  (ii)
              Subcommittee on Oversight and Investigations

                         CLIFF STEARNS, Florida
                                 Chairman
SUE MYRICK, North Carolina           DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee            Ranking Member
LEE TERRY, Nebraska                  JAN SCHAKOWSKY, Illinois
JOHN SULLIVAN, Oklahoma              MIKE ROSS, Arkansas
TIM MURPHY, Pennsylvania             ANTHONY D. WEINER, New York
MICHAEL C. BURGESS, Texas            EDWARD J. MARKEY, Massachusetts
BRIAN BILBRAY, California            GENE GREEN, Texas
PHIL GINGREY, Georgia                CHARLES A. GONZALEZ, Texas
STEVE SCALISE, Louisiana             JOHN D. DINGELL, Michigan
CORY GARDNER, Colorado               HENRY A. WAXMAN, California (ex 
MORGAN GRIFFITH, Virginia                officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     2
    Prepared statement...........................................     3
Hon. Diana DeGette, a Representative in Congress from the State 
  of Colorado, opening statement.................................     5
    Prepared statement...........................................     6
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     7
    Prepared statement...........................................     8
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     8
    Prepared statement...........................................     9
Hon. Cory Gardner, a Representative in Congress from the State of 
  Colorado, opening statement....................................    10
    Prepared statement...........................................    11
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    12
    Prepared statement...........................................    13
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................    24
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, prepared statement.....................................    25

                               Witnesses

Cass R. Sunstein, Administrator, Office of Information and 
  Regulatory Affairs.............................................    28
    Prepared statement...........................................    31
    Answers to submitted questions...............................   113

                           Submitted Material

Supplemental memorandum, dated January 26, 2010, submitted by Mr. 
  Waxman.........................................................    15
``Toward a 21st-Century Regulatory System,'' article dated 
  January 18, 2011, by Barack Obama, Wall Street Journal.........    78
``The EPA's War on Texas,'' article dated January 4, 2011, Wall 
  Street Journal.................................................    80
Subcommittee exhibit binder......................................    82
``EPA `confident' Obama reg policy won't affect new climate 
  rules,'' article dated January 18, 2011, by Andrew Restuccia, 
  The Hill.......................................................   118


          THE VIEWS OF THE ADMINISTRATION ON REGULATORY REFORM

                              ----------                              


                      WEDNESDAY, JANUARY 26, 2011

                  House of Representatives,
                  Committee on Energy and Commerce,
              Subcommittee on Oversight and Investigations,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 10:02 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Cliff 
Stearns (chairman of the subcommittee) presiding.
    Members present: Representatives Stearns, Terry, Sullivan, 
Murphy, Burgess, Blackburn, Myrick, Bilbray, Gingrey, Scalise, 
Gardner, Griffith, Barton, McKinley, Upton (ex officio), 
DeGette, Schakowsky, Weiner, Markey, Green, Gonzalez, Dingell, 
and Waxman (ex officio).
    Staff present: Karen Christian, counsel; Stacy Cline, 
counsel; Todd Harrison, chief counsel; Sean Hayes, counsel; 
Alan Slobodin, deputy chief counsel; Sam Spector, counsel; 
Peter Spencer, professional staff member; Kristin Amerling, 
minority chief counsel; Karen Nelson, minority deputy committee 
staff director, health; Karen Lightfoot, minority 
communications director and senior policy advisor; Greg Dotson, 
minority chief counsel, energy and environment; Alexandra 
Teitz, minority senior counsel; Stacia Cardille, minority 
counsel; Tiffany Benjamin, minority counsel; Anne Tindall, 
minority counsel; Ali Neubauer, minority investigator; Brian 
Cohen, minority senior investigator and policy advisor; 
Jennifer Berenholz, minority chief clerk; Lindsay Vidal, 
minority deputy press secretary; and Mitchell Smiley, special 
assistant.
    Mr. Stearns.  Good morning everybody, and let me welcome 
all of you to the Subcommittee on Oversight and Investigations. 
We appreciate your early attendance, and if possible, we would 
like to start promptly at 10:00. I would also like to point out 
that Chairman Upton has indicated that this will be a very 
active subcommittee. It is a very important subcommittee. I 
think most of us on both sides of the aisle realize that 
Congress, the House of Representatives, has a very important 
role in oversight of the Executive Branch. In this case, there 
are many areas that we can explore both in a way that is 
substantive and at the same time, I think, in a bipartisan way 
to have a better understanding of where there is error, where 
there is complement, and in the long run to give full oversight 
to the Executive Branch according to the Constitution. So I 
welcome this opportunity as chairman of this very important 
subcommittee, and I thank Mr. Upton, our chairman of the Energy 
and Commerce Committee, for this distinct honor to be able to 
be chairman.
    And of course, on the Democrat side, they have had some 
very illustrious people as Oversight and Investigations 
chairmen, including Mr. Dingell and Mr. Waxman and others, so I 
look forward to this opportunity for the next term and I 
welcome from both sides of the aisle any comments or feedback.
    Let me open with a little bit of procedure. All members 
will have 5 days to make their opening statements part of the 
record by unanimous consent. Also, we have agreed under our 
procedures that there will be no opening statements except for 
the chairman and the ranking member, Ms. DeGette, and then she 
will allot 5 minutes to her members for another additional 5 
and then I will do the same on this side. So again, I will do 
my 5 minutes, Ms. DeGette will do her 5 minutes, then I have 5 
minutes that I have allocated to members on this side, and then 
you will have the same thing. With that, let me proceed to my 
opening statement.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    We convene this hearing of the Subcommittee on Oversight 
and Investigations today to gather information concerning the 
Administration's views and plans for regulatory reform. Now, we 
can all agree that this is a critically important topic, worthy 
of being the Energy and Commerce Committee's first hearing 
under the new Majority leadership.
    Over the past 2 years, as the American public confronted 
the worst unemployment crisis in a generation, it 
simultaneously has faced an onslaught of federal regulations, 
with more yet to come. While the growth of the regulatory state 
has been a continuous concern over the past 2 decades, the pace 
in recent years has been breathtaking, given the Nation's dire 
economic situation.
    According to the OMB data compiled by the Heritage 
Foundation, in fiscal year 2009, which spanned both the Bush 
and Obama Administrations, major rules added $13 billion in new 
costs to the economy. In fiscal year 2010 alone, federal 
agencies promulgated 43 major rules that imposed compliance 
costs estimated by the regulators themselves at almost $27 
billion, the highest annual level since 1981. And we know 
agencies' estimates of costs may often be just the tip of the 
iceberg when it comes to the economic impact on jobs, 
competitiveness and innovation.
    Now, along with all of these major rules come daunting 
levels of red tape, the costs of which cannot easily be 
counted. The Obama Administration's regulatory agenda released 
this past fall identifies 4,225 rules under development. The 
EPA alone has finalized 928 regulations since the start of this 
Administration, and it has also proposed a number of expensive 
and complex new rules affecting our energy system, our 
industrial and manufacturing infrastructure, and even the 
electric power we rely upon every day.
    On top of this, new rules related to the expansive new 
health care law and the financial services reforms are 
certainly looming on the horizon, with regulatory impacts on 
many different aspects of our lives. From our health to our 
wealth to the freedom to live our lives the way we want, the 
federal regulatory state continues to grow and intrude.
    Of course, many regulations, derived from the laws Congress 
enacted, are essential to protect the public health and welfare 
and ensure free markets. While appropriate implementation of 
these laws is essential for these purposes, appropriate 
consideration of the economic and employment impacts of the 
regulations is essential for protecting the Nation's economic 
health and individual freedom. I am concerned that this balance 
has not properly been struck during the apparent rush to 
regulate over the past 2 years.
    Against this backdrop, we consider today the President's 
new Executive order, initiatives relating to regulatory review 
and his stated focus on reducing the economic burdens of 
regulations and promoting job growth. Now, this focus is to be 
commended. We hope it will lead to meaningful results.
    To this end, we seek to understand specifically how the 
Administration performs its regulatory reviews and what changes 
we can expect that will reduce the regulatory burden, 
especially in the areas of this Committee's jurisdiction. We 
will hear testimony and ask questions of a single witness 
today: Mr. Cass Sunstein, the current Administrator of the 
Office of Information and Regulatory Affairs, within OMB. Mr. 
Sunstein's office serves as the intersection of the 
Administration's rulemaking review process. In some respects, 
his office serves or can serve as a regulatory traffic cop, 
carefully reviewing significant rules to ensure that they are 
consistent with the law, the President's policies and 
priorities and that they receive appropriate review and 
analysis from other federal offices and agencies. He is 
especially qualified to explain the prospects and limits of the 
Administration's regulatory reform plans.
    My colleagues, it is important that rhetoric is matched 
with measurable results and actions. For example, after the 
Bush Administration took office in 2001, it made little change 
to the existing regulatory guidance, but it made extensive use 
of the available tools to return rules, ask questions and 
prompt additional review. It took an active role, sending 19 
so-called return letters in the first 2 years of the 
Administration. The present Administration has not even sent 
one return letter. We will gather information about this today.
    We will also gather information to help us to understand 
the substance of the plans for retrospective regulatory review 
called for by the President. We should seek to understand the 
limits of the review ordered by the President. Rules issued by 
independent agencies like the FCC, the BCFP, CFTC, CPSC, FERC, 
FTC, SEC, FDIC, and the Federal Reserve and the NRC, among 
others, have apparently been placed beyond the purview of the 
President's review, and thus will not be affected by this 
initiative.
    The information we gather today should help this 
committee's various oversight projects in the coming session of 
Congress. We have much ground to cover.
    [The prepared statement of Mr. Stearns follows:]

                Prepared Statement of Hon. Cliff Stearns

    We convene this hearing of the Subcommittee on Oversight 
and Investigations today to gather information concerning the 
Administration's views and plans for regulatory reform. We can 
all agree this is a critically important topic, worthy of being 
the Energy and Commerce Committee's first hearing under the new 
Majority leadership.
    Over the past 2 years, as the American public confronted 
the worst unemployment crisis in a generation, it 
simultaneously has faced an onslaught of federal regulations, 
with more yet to come. While the growth of the regulatory state 
has been a continuous concern over the past 2 decades, the pace 
in recent years has been breathtaking, given the nation's dire 
economic situation.
    According to the OMB data compiled by the Heritage 
Foundation, in fiscal year 2009, which spanned both the Bush 
and Obama Administrations, major rules added $13 billion in new 
costs to the economy. In fiscal year 2010 alone, federal 
agencies promulgated 43 major rules that imposed compliance 
costs estimated by the regulators themselves at almost $27 
billion, the highest annual level since 1981. And we know 
agency estimates of costs may often be just the tip of the 
iceberg when it comes to the economic impact on jobs, 
competitiveness, and innovation.
    Along with all of these major rules come daunting levels of 
red tape, the costs of which cannot easily be counted. The 
Obama Administration's regulatory agenda released this past 
fall identifies 4,225 rules under development.
    The EPA alone has finalized 928 regulations since the start 
of this Administration. And it has also proposed a number of 
expensive and complex new rules affecting our energy system, 
our industrial and manufacturing infrastructure, even the 
electric power we rely upon every day.
    On top of this, new rules related to the expansive new 
health care law and the financial services reforms are looming 
on the horizon, with regulatory impacts on many different 
aspects of our lives. From our health to our wealth to the 
freedom to live our lives the way we want, the federal 
regulatory state continues to grow and intrude.
    Of course, many regulations--derived from the laws Congress 
enacted--are essential to protect the public health and welfare 
and ensure free markets. While appropriate implementation of 
the laws is essential for these purposes, appropriate 
consideration of the economic and employment impacts of the 
regulations is essential for protecting the nation's economic 
health and individual freedom. I am concerned that this balance 
has not properly been struck during the apparent rush to 
regulate over the past 2 years.
    Against this backdrop, we consider today the President's 
new Executive order and initiatives relating to regulatory 
review and his stated focus on reducing the economic burdens of 
regulations and promoting jobs growth. This focus is to be 
commended; we hope it will lead to meaningful results.
    To this end, we seek to understand specifically how the 
Administration performs its regulatory reviews and what changes 
we can expect that will reduce the regulatory burden, 
especially in the areas of this committee's jurisdiction. We 
will hear testimony and ask questions of a single witness: Mr. 
Cass Sunstein, the current Administrator of the Office of 
Information and Regulatory Affairs (OIRA), within OMB.
    Mr. Sunstein's office serves at the intersection of the 
Administration's rulemaking review process. In some respects, 
his office serves or can serve as a regulatory traffic cop, 
carefully reviewing significant rules to ensure they are 
consistent with the law, the President's policies and 
priorities, and that they receive appropriate review and 
analysis from other federal offices and agencies. He is 
especially qualified to explain the prospects and limits of the 
Administration's regulatory reform plans.
    It is important that rhetoric is matched with measurable 
action and results. For example, after the Bush Administration 
took office in 2001, it made little change to the existing 
regulatory guidance, but it made extensive use of the available 
tools to return rules and ask questions and prompt additional 
review. It took an active role--sending 19 so-called return 
letters in the first 2 years of the Administration; the present 
Administration has not even sent one return letter. We will 
gather information about this today.
    We will also gather information to help us to understand 
the substance of the plans for retrospective regulatory review 
called for by the President. We should seek to understand the 
limits of the review ordered by the President. Rules issued by 
independent agencies--FCC, the BCFP, CFTC, CPSC, FERC, FTC, 
SEC, FDIC, the Federal Reserve, the NRC, among others--have 
apparently been placed beyond the purview of the President's 
review, and thus will not be affected by this initiative.
    The information we gather today should help this 
Committee's various oversight projects in the coming Session of 
Congress. We have much ground to cover; so let me recognize, 
with pleasure, our new Ranking Member, Ms. DeGette.

    Mr. Stearns.  It is my pleasure to recognize our new 
ranking member, Ms. DeGette.

 OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Ms. DeGette.  Thank you very much, Mr. Chairman. I am 
excited about the opportunity to serve in the 112th Congress as 
the ranking member of this esteemed committee. As you 
mentioned, Mr. Chairman, this is one of the most effective 
committees in the House, and in my 14 years on this 
subcommittee, it can also be one of the most bipartisan 
committees, and I look forward to working with you and my 
colleagues on both sides of the aisle both on new initiatives 
and also to follow up on some of the key investigations that we 
were working on in the last session of Congress. I also want to 
thank my chairman, Mr. Waxman, and my chairman emeritus, Mr. 
Dingell, for their fine investigative work on this subcommittee 
over the years.
    Both Democrats and Republicans have supported laws to 
protect the health, environment, financial security, and safety 
of the American people. Today's hearing is about how to ensure 
that the regulatory system that implements these laws functions 
as effectively and efficiently as possible. This is a laudable 
goal that both sides of the aisle should support and which I 
personally support wholeheartedly. I was encouraged by the 
President's announcement last night in the State of the Union 
about his new initiative to streamline and modernize 
government, which is way overdue in many cases.
    The President's new Executive order on improving regulation 
and regulatory review is an excellent starting point in this 
process. The order is based on such sound principles as the 
regulatory system must be based on the best available science, 
regulations protect public welfare while promoting economic 
growth and job creation should be retained, and the process 
must allow for public participation and open exchange of ideas, 
and the process must take into account both cost and benefits. 
Consistent with this directive, the Obama Administration has 
already identified several regulations that could be refined or 
cut, and I expect that we will hear from our witness today 
about additional areas where we can look at regulations.
    I commend the Administration for this effort, and I hope 
that we can work together to support cost-effective 
implementation of the laws Congress has enacted to protect the 
American public's health, financial safety and security and 
their personal safety. These sensible safeguards are vitally 
important to the American people.
    We must recognize, however, that regulations per se are not 
the problem. The mantra that all regulations are inherently bad 
and kill jobs is wrong and dangerous. Just 2-and-a-half years 
ago, for example, our financial system virtually collapsed 
following years of deregulatory efforts by Congress. The 
Securities and Exchange Commission and other federal financial 
regulators sat on the sidelines while flawed and unchecked 
financial practices robbed Americans of their retirement 
savings and caused our economy to nearly collapse. It wasn't 
regulations that caused the financial collapse and the deepest 
economic recession since the Great Depression, it was unbridled 
deregulation.
    For too long, big polluters have been allowed to dump toxic 
mercury into the air, resulting in birth defects and 
developmental problems for children in affected communities. 
Finally, after years of delay, the Administration is taking 
action to rein in this toxic contamination, and we should all 
support these efforts. Again, it is not regulations that caused 
these problems, it is the lack of regulations.
    At the direction of the Supreme Court, the EPA has recently 
set standards to cut carbon pollution from cars and trucks. 
This regulation is a win-win. Not only does it cut pollution 
responsible for climate change, it saves 1.8 billion barrels of 
oil, making the Nation more energy-independent and secure and 
saving American families money at the pump.
    Regulations to protect children from the health effects of 
tobacco and to prevent another salmonella outbreak in eggs or 
other threats to food safety are also important examples of 
where these problems have not been caused by an excess of 
regulations but rather a lack of regulations. So when you 
examine the details of these and other safeguards, you find 
that there is a real need for government action.
    Now, I look forward to hearing from our witness today 
regarding the implementation of the Obama Administration's 
Executive order on improving regulations and the regulatory 
process. It is a commonsense plan to cut outdated regulations 
and promote transparency. I also look forward to working with 
all members of this subcommittee to examine regulatory reform 
in a sensible way. Thank you, Mr. Chairman.
    [The prepared statement of Ms. DeGette follows:]

                Prepared Statement of Hon. Diana DeGette

    Both Democrats and Republicans have supported laws to 
protect the health, environment, financial security, and safety 
of the American public. Today's hearing is about how to ensure 
that the regulatory system that implements these laws functions 
as efficiently and as effectively as possible.
    This is a laudable goal that both sides of the aisle should 
support. The President's new Executive order on improving 
regulation and regulatory review is an excellent starting 
point. The order is based on sound principles such as:
     The regulatory system must be based on the best 
available science;
     Regulations protect public welfare while promoting 
economic growth and job creation;
     The process must allow for public participation 
and the open exchange of ideas; and
     The process must take into account both costs and 
benefits.
    Consistent with this directive, the Obama Administration 
has already identified several regulations that could be 
refined or cut.
    I commend the Administration for this effort. And I hope 
that we can work together to support cost-effective 
implementation of the laws Congress has enacted to protect the 
American people's health, financial security, and safety. These 
sensible safeguards are vitally important to the American 
people.
    We must recognize, however, how important regulations are 
to our national welfare. The mantra that regulations are 
inherently bad and kill jobs is wrong and dangerous.
    Just 2-and-a-half years ago, our financial system virtually 
collapsed. Following years of deregulatory efforts by Congress, 
the Securities and Exchange Commission and other federal 
financial regulators sat on the sidelines while flawed and 
unchecked financial practices robbed Americans of their 
retirement savings and caused the our economy to collapse.
    It wasn't regulations that caused our financial collapse 
and the deepest economic recession since the Great Depression. 
It was unbridled deregulation.
    For too long, big polluters have been allowed to dump toxic 
mercury into the air--resulting in birth defects and 
developmental problems for children in affected communities. 
Finally--after years of delay--the Administration is taking 
action to rein in this toxic contamination. We should all 
support these efforts.
    At the direction of the Supreme Court, EPA has recently set 
standards to cut carbon pollution from cars and trucks. This 
regulation is a win-win. Not only does it cut pollution 
responsible for climate change, it saves 1.8 billion barrels of 
oil--making the nation more secure and saving American families 
at the pump.
    Regulation to protect children from the health effects of 
tobacco and to prevent another salmonella outbreak in eggs or 
other threats to food safety are other important examples of 
where government is on schedule to act and must do so.
    When you examine the details of these and other safeguards, 
you find that there is a real need for governmental action and 
that action will substantially benefit the public and the 
nation.
    I look forward to hearing from our witness regarding 
implementation of the Obama Administration's Executive order on 
improving regulations and the regulatory process. This is a 
common sense plan to cut outdated regulations and promote 
transparency. In contrast, the Republican plan to eliminate 
safeguards vital to the welfare of Americans makes absolutely 
no sense at all.

    Mr. Stearns.  I thank the gentlelady.
    And now, according to our procedures, we have 5 minutes on 
this side, and they will be allocated to Mr. Upton, the 
chairman, at 1 minute, Mr. Barton, 2, Mr. Burgess, 1, and Mr. 
Gardner, 1. So the chairman, Mr. Upton, is recognized for 1 
minute.
    Mr. Upton. Well, thank you, Mr. Chairman, and I would ask 
unanimous consent that my full statement be made part of the 
record.
    Mr. Stearns.  By unanimous consent.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you for your very quick efforts to begin 
work in this 112th Congress. We have a lot to accomplish over 
the next 2 years, and this subcommittee will certainly play a 
key role.
    Let me begin by welcoming our witness today, Mr. Cass 
Sunstein of the Office of Information and Regulatory Affairs. 
It is fitting that our first hearing is focused squarely on job 
creation and economic consequences of burdensome regulations 
that stifle investment and shift jobs overseas. Our Majority 
has made it clear that jobs are priority number one in this 
Congress. We can create a climate of job growth by cutting 
spending, by limiting the size and scope of government. I have 
asked our committee members to track down burdensome 
regulations that choke investment and destroy jobs, so we will 
identify these regulations, shine a light on them and then seek 
their repeal.
    I welcome the President's announcement that his 
Administration plans to evaluate regulations to ensure that the 
benefits justify the costs and federal rules are tailored to 
impose the least burden on society, and I would ask again that 
the rest of my statement be made part of the record. I yield 
back.
    [The prepared statement of Mr. Upton follows:]

                 Prepared Statement of Hon. Fred Upton

    Thank you, Mr. Chairman, and thank you for your quick 
efforts to begin the work of the 112th Congress. We have a lot 
to accomplish over the next 2 years, and this Subcommittee will 
play a key role.
    Let me begin by welcoming today's witness, Mr. Cass 
Sunstein of the Office of Information and Regulatory Affairs. 
Mr. Sunstein is the Administration's point person on regulatory 
issues, which makes him the ideal witness for today's hearing 
on recent changes--announced last week by President Obama--to 
the Administration's regulatory stance.
    It is fitting that our first hearing is focused squarely on 
job creation and the economic consequences of burdensome 
regulations that stifle investment and shift jobs overseas. Our 
majority has made it clear that jobs are priority number one 
for the 112th Congress. We can create a climate of job growth 
by cutting spending, and by limiting the size and scope of 
government. I have tasked our Committee Members to track down 
burdensome regulations that choke investment and destroy jobs. 
We will identify these regulations, shine a light on them, and 
then seek repeal.
    I welcome the President's announcement that his 
administration plans to evaluate regulations to ensure the 
benefits justify the cost and federal rules are tailored to 
impose the least burden on society.
    I also hope today's hearing will shed light on the many 
unanswered questions about the new Executive order. How does it 
differ from practices currently in place? How will the 
administration's regulatory approach change for the thousands 
of pages of forthcoming regulations as a result of legislation 
enacted last year?
    Last year more than 6,000 pages of regulations were 
released to implement the health care law. Next month, the EPA 
will issue Boiler MACT rules, an earlier version of which were 
estimated by the agency itself to cost thousands of jobs.
    We will also explore what this Executive order means for 
the litany of other regulatory policies in the pipeline, from 
greenhouse gas standards to government regulation of the 
internet. With 20 consecutive months of near double digit 
unemployment, the public expects, and demands, that we do 
better.
    Thank you. I yield back.

    Mr. Stearns.  The gentleman yields back.
    The gentleman from Texas is recognized for 2 minutes.
    Mr. Barton.  Mr. Chairman, do you want to go back and 
forth?
    Mr. Stearns.  No, we are going to take our full 5 minutes 
on this side and then she is going to do her 5 minutes.
    Mr. Barton.  OK. I ask unanimous consent that my entire 
statement be put in the record, Mr. Chairman.
    Mr. Stearns.  Consent granted.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton.  Let me congratulate you on being the chairman 
of this subcommittee. It is one of the important, if not the 
most important subcommittee of what I consider to be the best 
committee in the House. In a previous majority, I was 
subcommittee chairman of this subcommittee for 4 years and 
enjoyed it immensely. I have worked with numerous other 
subcommittee chairmen in Oversight.
    The importance of congressional oversight cannot be 
overstated. In my opinion, the last 2 years under Mr. Waxman, 
Subcommittee Chairman Stupak was not aggressive in subjecting 
the Obama Administration to stringent oversight. I am sure you, 
Mr. Chairman, are going to correct that. As chairman emeritus 
of this committee, I stand with Chairman Upton and yourself in 
support of immediate and ongoing oversight of the Obama 
Administration and its practices and policies. Congressional 
oversight, if effective, leads to better functioning of 
government, one that protects the taxpayers by identifying 
excessive government spending, abusive regulatory regimes, and 
discovering ways to decrease spending and stimulate the 
economy.
    Today we are going to discuss the President's Executive 
order entitled ``Improving Regulation and Regulatory Review.'' 
The order instructs federal agencies to develop plans to ensure 
that past, present and new regulations protect the public 
health, safety and welfare, and the environment while at the 
same time promoting economic growth. Who can be opposed to 
that, Mr. Chairman? However, having said that, in the last year 
alone, I have sent three letters calling attention to the lack 
of such analysis. I sent a letter to the White House concerning 
the impact of the Environmental Protection Agency's 
CO2 endangerment finding. I sent another letter to 
the EPA regarding the proposed economic impact of proposed 
ozone standards, and this September I sent a letter to Chairman 
Waxman asking that he schedule a hearing on the 
Administration's decisionmaking and consideration of job 
impacts in connection with a major rulemaking and other 
regulatory initiatives that might adversely affect employment 
in the United States.
    I see my time has expired, Mr. Chairman, so I am going to 
yield back and ask that the rest of my statement be put in the 
record.
    [The prepared statement of Mr. Barton follows:]

                 Prepared Statement of Hon. Joe Barton

    Thank you Mr. Chairman for holding this important hearing, 
which marks the first oversight hearing of the 112th Congress. 
The importance of congressional oversight of the Executive 
branch cannot be overstated. For the past 2 years, the Obama 
Administration has not been subject to stringent oversight. As 
Chairman Emeritus, I stand with Chairman Upton and Subcommittee 
Chairman Sterns in support of immediate and ongoing oversight 
of the Obama Administration and its practices and policies.
    Effective oversight leads to a better functioning 
government-one that protects taxpayers by identifying excessive 
government spending and abusive regulatory regimes and 
discovering ways to decrease spending and stimulate the 
economy.
    Today we are here to discuss President Obama's Executive 
order entitled ``Improving Regulation and Regulatory Review.'' 
The order instructs federal agencies to develop plans to ensure 
that past, present, and new regulations protect the public's 
health, welfare, safety, and environment while at the same time 
promoting economic growth and job creation. In theory I agree 
with the President's order. However, for the past two years the 
Obama Administration has pursued an aggressive agenda of 
regulatory expansion. Regulations were passed prior to the 
completion of a meaningful cost-benefit analysis that weighed 
the proposed benefit to the public against the actual cost to 
the economy.
    Last year alone, I sent three letters calling attention to 
the lack of this analysis. In January, I sent a letter to the 
White House concerning the impact of the Environmental 
Protection Agency's CO2 endangerment finding on 
American jobs. In June, I sent a letter to EPA regarding the 
economic and job impacts of proposed ozone standards. And, in 
September, I sent a letter to then Committee Chairman Waxman 
requesting the Majority schedule a hearing to examine 
Administration decision-making and consideration of job impacts 
in connection with major rule-making and other regulatory 
initiatives that may adversely affect employment in the United 
States. I am glad that the President is finally asking for some 
kind of cost-benefit review and I look forward to our 
discussion on how his Administration plans to do this today.
    I want the public to know what I stand for. I support 
government regulations that equate to effective protection of 
the public's health and safety. I do not support those that 
suppress innovation and unnecessarily burden small businesses. 
I support government regulations that are based on sound 
science. I do not support those that are based on bureaucrats' 
opinions. And, as long as I serve the American public I will do 
my best to ensure that good governance prevails over lofty 
ideological goals.

    Mr. Stearns.  By unanimous consent, will do. I thank the 
gentleman from Texas and recognize Dr. Burgess for 1 minute.
    Dr. Burgess.  Thank you, Mr. Chairman, and I also want to 
welcome our witness here today. An important subject, improving 
the regulatory environment. In our country, in fact, the 
President himself penned an op-ed in the Wall Street Journal on 
January 18th. Quoting from the President, ``Over the past 2 
years the goal of my Administration has been to strike the 
right balance, and today I am signing an Executive order that 
makes clear this is the operating principle of our 
government.'' It is too bad that we didn't have that principle 
2 weeks prior, because in another editorial in the Wall Street 
Journal on January 4th they talked about the EPA violating 
every tenet of administrative procedure to strip Texas of its 
authority to issue air permits that are necessary for large 
power and industrial plants. Going on, the best the EPA could 
offer up as a legal excuse for voiding Texas permitting 
authority last Thursday was that the EPA had erred in 
originally improving the State's implementation plan in 1992. 
The error that escaped the EPA's notice for 18 years was that 
the Texas plan did not address all pollutants. Back then, Texas 
hadn't complied with regulations that didn't exist and wouldn't 
exist for an additional 18 years.
    I will yield back the balance of my time, Mr. Chairman.
    I would ask that both of these be made part of the record, 
these reprints from the Wall Street Journal.
    [The information appears at the conclusion of the hearing.]
    Mr. Stearns.  I thank the gentleman, and I want to welcome 
two freshmen on the Oversight and Investigation Subcommittee: 
Morgan Griffith from Virginia and Cory Gardner from Colorado, 
and at this point allow Mr. Gardner 1 minute.
    Ms. DeGette.  First of all, would the gentleman yield?
    Mr. Stearns.  I would be glad to yield.
    Ms. DeGette.  This is the first I can remember we have had 
two Coloradoans on this committee, and so I also want to 
welcome my neighbor to the north and also our other new 
freshman, but particularly Cory.
    Mr. Stearns.  Good. Mr. Gardner, you have 1 minute.
    Mr. Gardner.  Thank you, Mr. Chairman, and thank you, 
Congresswoman DeGette. Thank you very much for the time to be 
here. Thank you to the witness. And I ask unanimous consent 
that my statement be entered in its entirety in the record.
    Mr. Stearns.  By unanimous consent.

  OPENING STATEMENT OF HON. CORY GARDNER, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Mr. Gardner.  Thank you. Each day I am in town, my staff or 
I sit down with about five businesses from Colorado, and every 
business that we meet with talks about the concern that they 
have that this Administration is regulating them out of jobs 
and out of business, and those that aren't already being 
regulated out of business are fearful that the proposed rules 
will put them on that path. We exist in an environment where 
government regulation is the answer to all of our problems. 
Congress can't get both the House and the Senate to pass a bill 
so the Administration does it, and they do it without having a 
process through Congress. The people speak through their 
representatives and then the Administration circumvents the 
people's representative. The process must be fixed and it must 
be fixed here.
    The Executive order is the Administration's attempt to 
clean the regulatory house, so to speak. It is a directive to 
agencies that they must provide a cost-benefit analysis when 
justifying regulations and reduce the burdens on small 
businesses that are forced to comply. The question I have, 
though, is, how do you define benefits and what constitutes a 
burden? The last 2 years have shown that the Administration has 
a very different view of what benefits our economy and our 
working families.
    So today is the first step that we have to go back to our 
hardworking constituents with the answers that are presented to 
every member here. We need to examine these sweeping federal 
rule changes that have the potential to cripple various sectors 
of our economy and negatively affect every business.
    I thank you, and I hope we move away from ``when all fails, 
regulate.''
    [The prepared statement of Mr. Gardner follows:]

                Prepared Statement of Hon. Cory Gardner

    Mr. Chairman, I've been in office for about 3 weeks now. 
Each day I'm in town, I, or my staff, sit down with at least 5 
businesses that operate in and out of Colorado. We have met 
with a cement production company, various municipalities trying 
to find ways to deal with water shortages, mining operations, 
manufacturing companies, and the list goes on.
    Every business that talks to my office has the same 
complaint: the Administration is regulating them out of jobs 
and out of business. And those that aren't already being 
regulated out of business are fearful that proposed rules will 
put them on that path.
    We exist in an environment where government regulation is 
the answer to all our problems. Congress can't get both the 
House and the Senate to pass a bill like cap and trade so the 
Administration does it--and they do it behind closed doors 
without having had an open and honest vetting process. What 
kind of democracy is that? The people speak through their 
representatives, and then the administration circumvents the 
people's will. The process must be fixed and it must be fixed 
here.
    Executive Order 13563 is the Obama Administration's attempt 
to clean the regulatory house, so to speak. It's a directive to 
agencies that they must provide a cost-benefit analysis when 
justifying regulations, and reduce the burdens on small 
businesses that are forced to comply. The question I have is: 
how do you define benefits and what constitutes a burden? The 
last 2 years have shown that the administration has a very 
different view of what benefits our economy, our culture, and 
our working families. I define benefits by protecting the 
environment that has been given to us, providing affordable 
healthcare to those that want it, while at the same time 
keeping Americans at work, and allowing businesses to prosper. 
I define burden as something that will put so much pressure on 
industries that they must let go many of their employees, pay 
fines that put them way behind production, litigate until they 
can't afford it anymore, or worse--shut down entirely.
    Today is the first step in addressing the concerns of my 
hard-working constituents and those of every member present. We 
need to examine sweeping federal rule changes that have the 
potential to cripple various sectors of our economy and 
negatively affect Colorado businesses.
    I hope that this new Executive order is an indication that 
the administration believes the same thing, but I am skeptical 
that they are wed to the traditions of the past 2 years: when 
all else fails, regulate. This cannot continue and I look 
forward to hearing the witness's answers to many of our 
questions on how it will assess pending and future regulations.
    Thank you, Mr. Chairman. I yield back my time.

    Mr. Stearns.  I thank the gentleman, and I recognize Ms. 
DeGette.
    Ms. DeGette.  Mr. Chairman, I will recognize our ranking 
member of the full committee, Mr. Waxman, for our additional 5 
minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman.  Mr. Chairman, I am a strong opponent of 
unnecessary regulations. In my years of service on this 
committee and on the Oversight and Government Reform Committee, 
I led numerous oversight and legislative efforts to promote 
government efficiency and eradicate wasteful spending and 
programs. In fact, in the 1990s, I served on the Advisory 
Committee for the corrections calendar set up by Speaker Newt 
Gingrich to identify outdated and pointless regulations so they 
could be quickly eliminated. I believe eliminating unnecessary 
government regulation is integral to ensuring effective 
government, but this is an area where it is easy to paint with 
too broad a brush. We need to remember that federal regulations 
also play a vital role in growing our economy and protecting 
our health and environment.
    That is why I am concerned that much of the rhetoric we are 
hearing from the Republican side of the committee is a repeat 
of what happened the last time the Republicans took control of 
Congress. In 1995, the newly elected Republican majority 
conducted an all-out assault on regulations. They told alarming 
anecdotes about the impact of senseless government regulation. 
We were told that the Consumer Product Safety Commission 
required holes in the bottoms of buckets and that OSHA killed 
the tooth fairy by preventing parents from taking home their 
children's baby teeth from the dentist's office. These stories 
share two traits. They sounded compelling and they were simply 
not true. Now we are hearing repeated claims that regulations 
destroy jobs and stymie economic growth, and this is another 
myth.
    Consider the collapse of the financial markets in 2008. 
This meltdown on Wall Street threw our economy into the deepest 
recession since the 1930s. Millions of Americans lost their 
jobs and it cost U.S. taxpayers billions of dollars to bail out 
AIG and Wall Street banks. The cause wasn't regulation. It was 
the absence of regulation. As Alan Greenspan testified before 
me and other members of the Oversight Committee, he said he 
made a mistake in promoting deregulation. He said he had found 
a flaw looking back over the situation in his free market 
ideology and was in a state of shock and disbelief.
    The Deepwater Horizon oil spill, which Chairman Stupak held 
hearings on in this subcommittee as well as on food safety as 
well as on automobile problems, that Deepwater Horizon oil 
spill wreaked havoc on the economies of the Gulf States. It was 
caused by too little oversight and regulation, not too much.
    Members who were on this committee last Congress may 
remember our very first hearing. We brought in the CEOs from 
our Nation's leading manufacturing and energy companies to 
testify. What they told us is that they needed Congress to pass 
comprehensive energy legislation so they could plan and invest 
for the future. Jim Rogers, CEO of Duke Energy, told us: ``It 
is critical we know the rules of the road of climate change as 
soon as possible to make sure that we are making the right 
investments. Regulatory uncertainty is postponing investments 
and is postponing the creation of jobs from apprentices to 
engineers to Ph.Ds.'' Jeffrey Immelt, chairman and CEO of 
General Electric, who last week was asked by President Obama to 
lead the Council on Jobs and Competitiveness, told us: 
``Certainty in the investment world is critical to success and 
what we lack today is certainty. I am a capitalist pure, plain 
and simple, and I just want the system we have today not to be 
untenable over the long term insofar as the science is 
compelling on global warming.'' What these CEOs were telling us 
is that they needed more energy and carbon regulation, not 
less, so they would know the rules and plan and invest for the 
future.
    Subcommittee Ranking Member DeGette and I circulated a 
memorandum to our Democratic members that provides more detail 
about these examples and others, and Mr. Chairman, I ask 
unanimous consent that this memorandum be included in the 
record to today's hearing.
    Mr. Stearns.  Granted.
    Mr. Waxman.  Thank you.
    As we commence this new Congress, let us put aside the 
false and hyperbolic claims about regulations killing jobs. By 
all means, let us prune unnecessary regulations where we find 
them but let us also not hesitate to regulate where needed to 
protect our economy and our children's future. There is no 
doubt that anybody would understand if you don't regulate to 
protect the environment, it is going to be at a disadvantage 
for a company to put in pollution control if their competitors 
don't do the same thing. Regulations can make the market work 
better for everybody while at the same time protecting the 
public interest. Yield back my time.
    [The prepared statement of Mr. Waxman follows:]

               Prepared Statement of Hon. Henry A. Waxman

    Mr. Chairman, I am a strong opponent of unnecessary 
regulations. In my many years of service on the Committee on 
Oversight and Government Reform, I led numerous oversight and 
legislative efforts to promote government efficiency and 
eradicate wasteful spending and programs.
    In the 1990s, I also served on the Advisory Committee for 
the Corrections Calendar, an initiative established by Speaker 
Newt Gingrich to identify outdated and pointless regulation so 
it could be quickly eliminated.
    I believe eliminating unnecessary government regulation is 
integral to ensuring effective government.
    But this is an area where it is easy to paint with too 
broad a brush. We need to remember that federal regulations 
also play a vital role in growing our economy and protecting 
our health and environment.
    That is why I am concerned that much of the rhetoric we are 
hearing from the Republican side of the Committee is a repeat 
of what happened the last time the Republicans took control of 
Congress.
    In 1995, the newly elected Republican majority conducted an 
all-out assault on regulations. They told alarming anecdotes 
about the impact of senseless government regulation. We were 
told that the Consumer Product Safety Commission required holes 
in the bottom of buckets and that OSHA killed the tooth fairy 
by preventing parents from taking home their children's baby 
teeth from the dentist.
    These stories shared two major traits: they sounded 
compelling, but they were simply not true.
    Now we are hearing repeated claims that regulations destroy 
jobs and stymie economic growth. This is another myth.
    Consider the collapse of the financial markets in 2008. 
This meltdown on Wall Street threw our economy into the deepest 
recession since the Great Depression. Millions of Americans 
lost their jobs and it cost U.S. taxpayers billions of dollars 
to bail out AIG and Wall Street banks.
    The cause wasn't regulation; it was the absence of 
regulation. As Alan Greenspan testified before me and other 
members of the Oversight Committee, he had ``made a mistake'' 
in promoting deregulation. He said he had ``found a flaw'' in 
his free-market ideology and was in ``a state of shocked 
disbelief.''
    The Deepwater Horizon oil spill wreaked havoc on the 
economies of Gulf states. It was caused by too little oversight 
and regulation--not too much.
    Members who were on this committee last Congress may 
remember our first hearing. Like today's hearing, our focus two 
years ago was on how to build a strong economic future for our 
country. We invited nine CEOs from our nation's leading 
manufacturing and energy companies to testify.
    And what they told us was that they needed Congress to pass 
comprehensive energy legislation so they could plan and invest 
for the future. The told us that sensible, market-based 
regulation of carbon emissions would spur billions of dollars 
in new investments.
    Here is what Jim Rogers, the CEO of Duke Energy, told us: 
``It is critical we know the rules of the road of climate 
change as soon as possible to make sure that we are making the 
right investments. Regulatory uncertainty is postponing 
investments and [i]t's postponing the creation of jobs from 
apprentices to engineers to Ph.Ds.''
    Jeffrey Immelt, Chairman and CEO of General Electric, was 
asked last week to lead the President's Council on Jobs and 
Competitiveness. He told us the same thing: ``Certainty in the 
investment world is critical to success. And what we lack today 
is certainty. I am a capitalist, pure, plain, and simple. And I 
just think the system we have today is untenable over the long 
term insofar as the science is so compelling on global 
warming.''
    What these CEOS were telling us is that they needed more 
energy and carbon regulation--not less--so they would know the 
rules and plan and invest for the future.
    They understood what Alan Greenspan forgot: regulation is 
often needed to promote jobs and economic prosperity.
    Subcommittee Ranking Member DeGette and I circulated a 
memorandum to our Democratic members that provides more detail 
about these examples and others. I ask unanimous consent that 
this memorandum be included in the record of today's hearing.
    As we commence this new Congress, let's put aside the false 
and hyperbolic claims about regulations killing jobs. By all 
means, let's prune unnecessary regulations where we find them. 
But let's also not hesitate to regulate where needed to protect 
our economy and children's future.
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    Mr. Stearns.  I thank the distinguished member.
    I ask unanimous consent that the written opening statements 
of all members who so desire be introduced into the record. 
Without objection, the documents will be entered into the 
record.
    [Additional statements submitted for the record follow:]

               Prepared Statement of Hon. John D. Dingell

    Thank you, Mr. Chairman.
    I thank you for holding today's hearing, and look forward 
to hearing from Administrator Sunstein.
    Today's hearing topic is an important one. Executive 
departments and agencies serve a critical role in our governing 
process, promulgating rules and regulations as required in the 
laws written here by Members of Congress.
    But our responsibilities as Members of Congress do not end 
when the President places his signature on a piece of 
legislation. I have long held that it is our responsibility as 
Members of Congress to ensure that the regulations and rules 
laid forward as a result of legislation allow for public 
comment, do not adversely impact our state and local 
governments and business community, provide a benefit to 
economic growth--not hinder it--and above all protect the 
public good.
    I commend President Obama for calling on the departments 
and agencies to reform their regulatory process to increase 
transparency, efficiency, coordination and public 
participation, as well as to ensure that regulations and rules 
protect public health, welfare, safety and our environment, 
while also allowing for economic growth and job creation.
    I also commend the President for taking into consideration 
the impact regulations have on our small businesses, who serve 
a vital role as engines of job creation in our communities. 
Allowing for regulatory flexibility for small employers, 
assures that small employers can comply with the letter of the 
law without endangering their business.
    Of some concern to me, is the President's directive for a 
government-wide review of regulations and rules deemed to be 
outdated or ineffective. I agree that we must constantly review 
our programs to determine whether they are working effectively 
or efficiently and to determine where gaps, if any, exist, and 
I believe that this provision will further that goal.
    However, we must ensure that the public participation 
mandate is heeded to when departments or agencies determine 
certain rules or regulations must be withdrawn or repealed.
    George Santayana said something which I thought was very 
interesting. He said, ``Those who cannot remember the past are 
condemned to repeat it."
    We have seen what happens when careful consideration is not 
given to deregulation, most recently in the unholy alliance 
between Wall Street and Bush-era policies that resulted in the 
2008 financial crisis.
    Moving forward we must strive to ensure that there is a 
balance between our responsibilities as the federal government 
to regulate effectively, while also protecting the good of the 
public.
    Thank you, and I look forward to hearing from Administrator 
Sunstein.
                              ----------                              

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    Mr. Stearns. Also, I ask unanimous consent that the 
contents of the document binder be introduced into the record. 
Without objection, the documents will be entered.
    [The information appears at the conclusion of the hearing.]
    Mr. Stearns.  Now, we get to our witness, and let me 
welcome the Administrator, Cass Sunstein, to our witness stand. 
I thought before we move forward I would give you a little 
brief background. I know oftentimes we have the witnesses and 
we don't know a lot about them, but I thought it would be very 
illustrative for all of us to hear a brief summary of his 
resume. Before he became Administrator, Mr. Sunstein was the 
Felix Frankfurter Professor of Law at Harvard Law School. He 
graduated in 1975 from Harvard College and in 1978 from Harvard 
Law School. After graduation, he clerked for Justice Benjamin 
Kaplan of the Massachusetts Supreme Judicial Court and Justice 
Thurgood Marshall of the United States Supreme Court, and then 
he worked as an attorney advisor in the Office of Legal Counsel 
of the U.S. Department of Justice. He was a faculty member at 
the University of Chicago Law School from 1991 to 2008. A 
specialist in administrative law, regulatory policy and 
behavioral economics, he is the author of many articles and 
books. And so Mr. Sunstein, I welcome you to the subcommittee's 
hearing.
    As you know, the testimony that you are about to give is 
subject to Title 18, section 1001 of the United States Code. 
When holding an investigative hearing, this committee has the 
practice of taking testimony under oath. Do you have any 
objection to testifying under oath?
    Mr. Sunstein.  None at all, Mr. Chairman.
    Mr. Stearns.  All right. The Chair then advises you that 
under the rules of the House and the rules of the committee, 
you are entitled to be advised by counsel. Do you desire to be 
advised by counsel during your testimony today?
    Mr. Sunstein.  I do not.
    Mr. Stearns.  In that case, if you would please rise and 
raise your right hand?
    [Witness sworn.]
    Mr. Stearns.  We welcome your 5-minute opening statement.

    TESTIMONY OF CASS R. SUNSTEIN, ADMINISTRATOR, OFFICE OF 
               INFORMATION AND REGULATORY AFFAIRS

    Mr. Sunstein.  Thank you, Mr. Chairman. Thank you, other 
Mr. Chairman. There are several other Mr. Chairmen. Thanks to 
all of you. I am grateful and greatly honored to have the 
opportunity to appear today to discuss our new Executive 
order--it has a new number, 13563, on improving regulation and 
regulatory review--and also our new Memorandum from the 
President on small business and job creation, and I will have a 
few words to say about that memorandum in a moment.
    The President has made clear that these documents are meant 
to create foundations for a regulatory system that protects 
public health and welfare while promoting economic growth, 
innovation--a key word in his State of the Union address--
competitiveness and job creation as several of you have just 
emphasized. The Executive order and the Presidential Memorandum 
require a number of concrete steps to achieve that overriding 
goal.
    By way of background, let me briefly note that since 1993, 
the process of regulatory review has operated under Executive 
order under 12866 from President Clinton, which builds very 
directly on an Executive order issued by President Reagan in 
1981 called Executive Order 12291. The Clinton Executive order 
sets out a number of principles and requirements that were in 
operation both under President Clinton and President Bush. 
Among other things, it calls for careful consideration of costs 
and benefits, for tailoring regulations to impose the least 
burden on society, and for selecting the approach that 
maximizes net benefits. It also calls for a process of 
interagency review coordinated by the Office of Information and 
Regulatory Affairs. That process has been in place for nearly 
30 years.
    The new Executive Order 13563 has six provisions that are 
designed to supplement and improve the process. First, it 
reaffirms the basic principles and structures of Executive 
Order 12866. In doing so, it emphasizes a point to which 
several of you have just pointed: the need for predictability 
and certainty. That is right out front in the new Executive 
order. It also emphasizes the importance of using the ``least 
burdensome tools for achieving regulatory ends.'' That is a 
quotation. It emphasizes finally what hadn't been in his 
predecessor Executive orders, the need to ``measure and seek to 
improve the actual results of regulatory requirements.'' That 
is the beginning.
    Second, the new Executive order calls for public 
participation. It tries to bring rulemaking into the 21st 
century by requiring use of the Internet to promote an open 
exchange of ideas and perspectives. It also directs agencies to 
act before they commence rulemaking to seek the views who are 
likely to be affected, including those would be burdened by 
regulatory requirements. Public participation is front and 
center.
    Third, and a point that has received considerable attention 
over the last several years, indeed decades, the new Executive 
order asks agencies to try to harmonize, simplify, and 
coordinate rules. It emphasizes that some sectors and 
industries face inconsistent, overlapping and redundant 
requirements. To reduce burdens and costs and to promote 
simplicity, it calls for greater coordination across the 
Federal Government. That is designed explicitly to promote 
innovation.
    Fourth, the new Executive order asks agencies to consider 
flexible approaches that maintain freedom of choice for the 
public. Approaches that are choice preserving include, for 
example, provision of information rather than foreclosure of 
decisions through mandates and commands. This is more than a 
plea, a direction for flexibility.
    Fifth, as noted, Executive Order 13563 calls for scientific 
integrity. It directs each agency to ensure the objectivity of 
information on which it relies.
    Sixth and finally, what has been most publicized in the 
week since the Executive order was signed, it calls for 
retrospective analysis of existing rules. It is concerned about 
rules that may be outmoded, ineffective, or excessively 
burdensome. It directs agencies to produce preliminary plans 
for periodic review of significant rules and to submit them to 
the Office of Information and Regulatory Affairs within 120 
days, a pretty tight time frame. In this way, the Executive 
order is aimed at the stock of existing requirements as well as 
the flow of new requirements. Both are covered by the new 
Executive order.
    The Presidential Memorandum on Small Business and Job 
Creation emphasizes the essential role that small businesses 
play in the American economy. With job creation in the title 
and economic growth in the body of the memorandum, the 
President has insisted as he wrote in the Wall Street Journal 
on federal agencies doing more to account for and reduce the 
burdens regulations may place on small businesses. To do that, 
he has emphasized of the Regulatory Flexibility Act and 
directed agencies specifically to explain themselves whenever 
in proposed rules or final rules they fail to provide 
flexibilities to small businesses in the form, for example, of 
partial or total exemptions, simplified reporting requirements 
or delayed compliance dates.
    Taken as a whole, Executive Order 13563 and the new 
Memorandum on Small Business and Job Creation create strong 
foundations for improving regulation and regulatory review. I 
am looking forward to answering your questions.
    [The prepared statement of Mr. Sunstein follows:]
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    Mr. Stearns.  I thank the witness.
    Let me, before we start, perhaps set the tone here. You saw 
that Mr. Sunstein, we sort of changed the rules here to 
expedite things, and it is important, I think, to stress that 
the members' questions that they are going to ask get a direct 
answer from you. All of us have been in hearings where we just 
have 5 minutes and it is very difficult to get an answer, and I 
think that the questions that are going to be asked of you 
reflect that we are willing to do away with our opening 
statements so we can provide more time for testimony and 
questioning. Therefore, I just ask to make it as productive as 
possible if when you answer the questions you can answer yes or 
no. Some members will ask you these type of questions, and I 
know it is going to be difficult but we ask for your patience 
and forbearance that you would answer yes or no to these 
questions, and I thank you in advance for doing that. And with 
that in mind, let me be the first one to ask you questions.
    The Obama Executive order was issued but the comments from 
organizations representing all the stakeholders and the job 
creators in this country, a lot are concerned with the Obama 
order: that there were a lot of independent regulatory agencies 
not part of the OIRA review. So my question for you, Mr. 
Sunstein, is, are the regulatory actions of the independent 
regulatory agencies such as the SEC, the FCC, the Federal Trade 
Commission, FERC and others, subject to OIRA regulatory review. 
Are they, yes or no?
    Mr. Sunstein.  No.
    Mr. Stearns.  I am also concerned about what appears to be 
a sort of amorphous type of standards that was articulated by 
the President. This is what is quoted in the Executive order: 
``Where appropriate and permitted by law, each agency may 
consider and discuss values that are difficult or impossible to 
quantify including equity, human dignity, fairness, and 
distributive impacts.'' Now, these are all subjective terms so 
you are going to make a decision on regulatory reform based 
upon human dignity, fairness, and distributive impacts, which I 
assume means distribution of income. Is my interpretation 
correct when you say distributive impacts, yes or no? Does that 
mean distribution of income?
    Mr. Sunstein.  That wasn't our intent.
    Mr. Stearns.  You are saying no. OK. But these standards, I 
mean, just looking at it, any rational cost-benefit analysis is 
going to be tossed out the window instead of saying does this 
economically make sense, what you can quantify. These agencies 
are going to be using these amorphous methods to determine the 
economic value of a regulation, and they are subjective. As you 
know, we are all inherently involved with either ideology or 
political correctness, so I guess the question is, won't these 
standards make it very difficult for any rational cost-benefit 
analysis to be implemented?
    Mr. Sunstein.  That would be a no.
    Mr. Stearns.  OK. By April 2010, the Administration had 
issued 190 economically significant regulations or regulations 
having an economic impact of $100 million or more. Is that 
correct?
    Mr. Sunstein.  I want to double-check that number.
    Mr. Stearns.  Sure. I appreciate that. And by December, 
that number was up to 224.
    Mr. Sunstein.  I want to double-check that number as well.
    Mr. Stearns.  So the number of regulations the 
Administration is issuing, in our humble opinion, is rising, 
not falling. That is just a comment.
    Mr. Sunstein.  No, that is actually not true. The number of 
regulations issued in the last 2 years is about the same or 
slightly lower than the last 2 years of the----
    Mr. Stearns.  OK. And if you could just follow up with the 
information to confirm what I asked you earlier, that would be 
helpful.
    Mr. Sunstein.  Absolutely. That would be yes.
    Mr. Stearns.  OK. Good for you. So in our opinion, these 
numbers represent a new amount of regulations including 
regulations into, I think, new areas such as the FCC regulation 
of the Internet for the first time. Will these regulations that 
have been issued in the last 2 years be subject to review under 
the President's new standard?
    Mr. Sunstein.  Yes.
    Mr. Stearns.  OK. And we expect to see more regulations 
issued by Health and Human Service to comply with the new 
health care law, new financial regulations to comply with the 
Dodd-Frank law, and new regulations from the EPA. Now, will 
these regulations be subject to review by OIRA?
    Mr. Sunstein.  I believe you referred to non-independent 
agencies, and thus the answer is absolutely yes.
    Mr. Stearns.  What we have seen from the Administration in 
the last 2 years is, in our opinion not a full exercise in 
responsibility to review these regulations. Are you aware that 
in the first 2 years of the Bush Administration, the agency 
issued 19 return letters to agencies, letters rejecting 
agencies' regulations while this Administration has issued zero 
return letters in the same period?
    Mr. Sunstein.  I would say yes, I am aware of that. Would 
you like an elaboration?
    Mr. Stearns.  We will keep going here. I think when the 
Democrats have a chance, they are going to give you a chance 
for elaboration.
    Given that we have seen agencies respond to the Executive 
order by stating that they don't need to make any changes, I 
think this is what really concerns me and seems not to change 
anything in terms of how much control your office will really 
have. I think as a Congress we reach out to bureaucracies and 
lots of times we see these bureaucracies unable to act. Back in 
2003, in your book Risk and Reason, you wrote, ``All in all, 
President Clinton's Executive orders did not seem to have much 
impact. OIRA was largely passive and toothless, serving a 
coordinating function without trying to steer regulation in any 
particular direction.'' That is your quote in your book. The 
President's new policy reaffirms this very Executive order you 
have referred to as toothless and not performing, in our 
opinion. Would you think what you said in your book is 
applicable to what happened under the Obama Administration?
    Mr. Sunstein.  Absolutely not.
    Mr. Stearns.  OK. And let me just ask my last question 
here. Do you see that there in tab #3 in the binder before you 
is the President's Memorandum of January 30, 2009, on 
regulatory review? In it, he directs the director of OMB to 
produce within 100 days a set of recommendations for a new 
Executive order on federal regulatory review. The question I 
have for you is, were the set of recommendations produced 
within 100 days of the President's directive?
    Mr. Sunstein.  Yes.
    Mr. Stearns.  OK. That completes my time, and Ms. DeGette.
    Mr. Sunstein.  Thank you for enabling me to be brief.
    Mr. Stearns.  That completes my questions. Ms. DeGette.
    Ms. DeGette.  Thank you, Mr. Chairman. Opening statement 
might have been a better description. Actually on the Minority 
side, we would like to hear some answers to some of these 
questions, so Mr. Sunstein, I have a series of questions I 
would like to ask you.
    The first one is, OIRA was created in 1980 to oversee 
certain agencies, correct?
    Mr. Sunstein.  That is correct.
    Ms. DeGette.  And----
    Mr. Sunstein.  By the Paperwork Reduction Act.
    Ms. DeGette.  Yes, and it was created by Congress. Is that 
right?
    Mr. Sunstein.  That is correct.
    Ms. DeGette.  So President Obama and the Administration 
could not in and of themselves change the jurisdiction of 
OIRA--only Congress could do that, right?
    Mr. Sunstein.  That is correct.
    Ms. DeGette.  And all of these agencies that Mr. Stearns 
mentioned that are exempt from the President's Executive order 
are exempt from it because OIRA does not have congressional 
jurisdiction to oversee those agencies, correct?
    Mr. Sunstein.  The basic answer is yes, but if I could 
elaborate slightly, if you would permit?
    Ms. DeGette.  Sure.
    Mr. Sunstein.  Under the Paperwork Reduction Act, OIRA does 
oversee the independent agencies' information-gathering 
requests, and actually we have taken strong steps in the last 
months to try to reduce paperwork burdens on the American 
people, including from the independent agencies.
    With respect to the applicability of the Executive order, 
what President Obama has done is followed the practice of 
President Reagan, who initiated the application of the 
Executive order to the executive agencies because of legal and 
political concerns about overreaching presidential authority. 
Both President Bushes went along with President Reagan on that 
issue.
    Ms. DeGette.  OK. Thank you.
    Now, I want to talk for a few minutes about an issue that I 
think we are going to be hearing a lot about in this 
subcommittee, and that is the EPA regulations. The first target 
that I have heard about is large industrial boilers and the EPA 
proposed regulation to limit the emissions of toxic air 
pollution like mercury, lead, and dioxin. Are you familiar with 
that proposed rule, Mr. Sunstein?
    Mr. Sunstein.  Yes.
    Ms. DeGette.  And are you aware that EPA's proposed rule 
would potentially save thousands of lives per year and protect 
children from neurotoxins because the benefits are projected to 
be about 14 times greater than the cost?
    Mr. Sunstein.  I don't have the exact number before me but 
I am aware of numbers in that vicinity in the proposed rule.
    Ms. DeGette.  Did the Administration engage in an open 
regulatory process in working on promulgation of that rule?
    Mr. Sunstein.  Absolutely, and it continues.
    Ms. DeGette.  Yes. In fact, the chairman of this committee 
has said that there were flawed regulatory tactics, so I want 
to talk for a minute about the EPA process that you just 
referred to. After proposing the rule last April, EPA received 
over 4,800 comments on the proposal from stakeholders including 
a large amount of data from industry on the capabilities and 
costs of various pollution-control options. Are you aware of 
that data that the EPA received?
    Mr. Sunstein.  Yes, I am aware of the sheer volume of 
comments.
    Ms. DeGette.  OK. And are you aware, sir, that in 
September, Administrator Jackson of the EPA sent a letter to 
Congress indicating that the EPA was going to give more time to 
look at this because there were so many comments that were 
being received?
    Mr. Sunstein.  Yes.
    Ms. DeGette.  And are you aware that on September 7th last 
year, EPA asked the court for an extension of time to continue 
the process but the extension given by the court was only very 
short?
    Mr. Sunstein.  Yes, 30 days.
    Ms. DeGette.  Thirty days. And are you aware that the EPA 
has suggested that if all the comments cannot be addressed in 
the final rule, the parties may petition the EPA to reconsider 
the rule and the EPA has the authority to stay the rule pending 
the reconsideration? Is that correct?
    Mr. Sunstein.  I remember something very close to that, and 
that may be precisely what the EPA said.
    Ms. DeGette.  OK. Now, do you think that the EPA's efforts 
to respond to the comments on the proposed boiler MACT are in 
line with this Executive order that is the subject of this 
hearing today?
    Mr. Sunstein.  I would say very much that the EPA's careful 
consideration of public comments is in line with section 2 of 
the Executive order.
    Ms. DeGette.  Section 2. OK. Do you think that the EPA's 
request for an extension was in any way an admission of failure 
of the regulatory process?
    Mr. Sunstein.  No.
    Ms. DeGette.  And can you explain why you believe that?
    Mr. Sunstein.  Well, it is perfectly legitimate as some of 
the opening comments have suggested to try to take account of 
public concerns and comments to respond to stakeholder data or 
stakeholder perspectives and sometimes that takes a long time. 
There is a tradeoff between doing things and doing things 
right.
    Ms. DeGette.  And finally, do you think that criticizing 
the EPA's efforts on this rule is consistent with calls for 
greater process and transparency?
    Mr. Sunstein.  What I would say is that greater 
transparency is exceedingly important and the EPA's effort to 
take account of public comment is admirable.
    Ms. DeGette.  Thank you. I yield back.
    Mr. Stearns.  I thank the gentlelady.
    The chairman of the full committee, Mr. Upton from 
Michigan, is recognized for 5 minutes.
    Mr. Upton. Well, thank you, Mr. Chairman, and again, I want 
to compliment you on the hearing. As I learned when I was 
chairman of the Oversight and Investigations Subcommittee, we 
are to identify problems and then come back with legislation to 
fix them. I think that what is happening is that we are finding 
a number of agencies that are exempt from OIRA's process, and 
this is something we ought to look into and we ought to come 
back with bipartisan legislation to fix that, give this 
Administration and any future Administration the ability to 
oversee all the regulations that are there. No agency should be 
exempt.
    I want to compliment the President on his Wall Street 
Journal op-ed from this last week. I think many of us here 
would agree with some of the comments that he made when he 
wrote that we have to have the proper balance. Sometimes these 
rules have gotten out of balance, placing unreasonable burdens 
on business, which has had a chilling effect on growth and 
jobs. We need to promote economic growth. Sometimes regulations 
are not worth the cost, which is just plain dumb. I think a 
number of us welcomed that piece.
    But I want to go back to the boiler MACT regulations here 
for a moment. EPA, as you know, estimated that the new rules 
would impose new capital costs of $12.6 billion, annual costs 
of over $3 billion. A study by the Council of Industrial Boiler 
Owners concluded that the true economic costs would in fact be 
$113.5 billion. The rules would place some 337,000 or more jobs 
at risk. So as you know, on January 21st, the court rejected 
EPA's request for a 15-month extension to finalize the boiler 
MACT rules and directed EPA to issue final rules by February 
21st. My first question is, when OMB cleared the proposed rules 
last year, did OMB have concerns about the economic impacts 
given the state of the economy, particularly related to the 
numbers that I just cited?
    Mr. Sunstein.  Any rule that imposes significant cost, we 
have significant concerns about.
    Mr. Upton. Is OMB now working with EPA to make changes to 
bring down the costs and ensure that the final rules will not 
create those risks?
    Mr. Sunstein.  The EPA said in court filings that the rule 
would look significantly different, the final, and we are 
working closely with EPA to try to put it in the best form 
possible, and that work will be undertaken in line with the 
President's Executive order, which calls for careful attention 
to cost.
    Mr. Upton. So knowing all the comments that have been made, 
all the work that has been done, particularly over this last 
year, the admonition in essence by EPA in December that they 
need 15 more months: do you believe that you can do all that 
work in the next 3 weeks?
    Mr. Sunstein.  It would be premature to say exactly how 
much can be achieved in the next 3 weeks.
    Mr. Upton. I used to work at OMB so I know how many people 
are there.
    Mr. Sunstein.  I know you did. You know how hard people 
work. What I would say is that engagement with affected 
stakeholders, with you, with members of your staff is most 
welcome in the period we have, that EPA, as the earlier line of 
questioning suggests, is completely alert to the concerns that 
have been expressed about cost. The Administrator has been 
clear on that. And we are going to do the best we can to get it 
right and to keep the costs down, to take account of objections 
and perspectives in the time that remains, and look forward to 
working with you on that.
    Mr. Upton. Knowing that you have got 3 weeks to go, would 
OMB welcome a congressional delay to give the agency more time 
to do its work on the rule that EPA in essence said will take 
it 15 more months? It is just hard to believe that EPA says 
that it needs 15 more months, the court says no, you are going 
to do it in 30 days, and now you say that we are going to get 
it done in 3 weeks even though your agency initially said it 
would take 15 months?
    Mr. Sunstein.  Our focus, as your question suggests, is on 
implementing the law, taking account of costs and concerns, and 
complying with the court order. That is what we are focusing 
on. With respect to congressional responses, that is not 
exactly my lane. We are going to focus hard on implementation 
and try to get it right.
    Mr. Upton. Last question: would you like to have more time 
if given an opportunity?
    Mr. Sunstein.  We agreed with the EPA that to get more time 
of the length that the EPA sought was a very reasonable 
request. So the EPA's request to the court, we supported.
    Mr. Upton. Yield back.
    Mr. Stearns.  Thank you, distinguished Chairman.
    I recognize Ms. DeGette.
    Ms. DeGette.  Mr. Waxman.
    Mr. Waxman.  Thank you very much, Mr. Chairman.
    Mr. Sunstein, I appreciate your answers. The question that 
was just being pursued was over the boilers under the Clean Air 
Act. Now, let us not forget the purpose of it. The purpose of 
the regulation is not to cost a lot of money to business which 
might lead them to reduce jobs. The purpose is to reduce 
mercury and lead damage which when it affects our children can 
lead to lack of brain development. Dioxin causes cancer. These 
industrial boilers are the second largest source of mercury 
emissions in our country. So when the EPA has proposed a rule, 
it has to be reviewed in terms of the costs and the benefits, 
and at the same time under your new procedures you are trying 
to fine-tube it to be sure it is the least costly way for 
business to comply. Isn't that correct?
    Mr. Sunstein.  Exactly.
    Mr. Waxman.  Now, I know that no one here would support 
duplicative and pointless regulations, but I worry a lot of 
what we are going to hear the rest of this hearing are not 
those regulations, they are going to single out important 
regulations. Some Republicans are even saying that we shouldn't 
regulate the most abusive and risky Wall Street practices, even 
though those practices ended up nearly driving our economy over 
a cliff. Regulations don't just prevent harm, they can also 
help our economy. And the boiler one was to prevent harm.
    But there are some regulations that really are important 
for business. One example of that is a carbon pollution 
standard for vehicles issued by the EPA and the National 
Highway Traffic Safety Administration April 2010. I understand 
that these standards improve national security by reducing our 
dependence on oil. They reduce carbon pollution and improve 
public health. They save consumers a lot of money, far more 
than manufacturers will spend building more efficient cars. I 
understand that these rules will save 1.8 billion barrels of 
oil. Is there any other action by this Administration or its 
predecessors that is even in this ballpark in terms of reducing 
our oil dependence?
    Mr. Sunstein.  Offhand, I don't think there is an example 
that is as impressive.
    Mr. Waxman.  So this regulation is to reduce our dependence 
on oil, and in fact, as a result of it, for the first time 
America's oil consumption is flat. Right now even though the 
DOE regularly says that our consumption of oil was going to go 
up, it is not increasing. We are projected to use less oil in 
2020 than in 2007. So if we are concerned about oil exports 
propping up unsavory governments around the world, which is 
certainly the case, then this rule is very good news.
    Mr. Sunstein, I also understand this rule will reduce U.S. 
greenhouse gas emissions by 960 million metric tons, reducing 
overall greenhouse gas pollution from light-duty vehicles by 
about 20 percent by 2030. How does this compare with other 
actions this or other Administrations have taken to tackle the 
climate issue?
    Mr. Sunstein.  I think this is the prize winner on that 
count as well.
    Mr. Waxman.  So these benefits don't cost the consumer a 
thing. In fact, they save consumers money. The majority of 
consumers will pay less overall for running their cars. On 
average, consumers will save $3,000 over the life of the 
vehicle. You are a nationally acclaimed expert on cost-benefit 
analysis. Are these estimates solid? Will people really be 
better off with these regulations in place?
    Mr. Sunstein.  We don't have any serious question that this 
rule survives cost-benefit balancing.
    Mr. Waxman.  My understanding is that these cost savings 
are based on assumed gas prices ranging from $2.61 per gallon 
in 2012 to $3.60 per gallon in 2030, and we are seeing gas 
prices go up. In fact, if they go up, it will produce even 
greater net benefits of roughly $140 to $190 billion.
    Now, we talked about the benefits to our national security 
and the environment but the rule also benefits the auto 
industry because it will harmonize State and federal standards 
across the country, and that is why the industry strongly 
supported these regulations. It provided certainty for them, 
clear paths for innovation, and it will make their job better 
as they try to innovate. EPA's contribution to these standards 
produced benefits 30 percent higher if we just had the NHTSA 
portion in place. Any effort to remove the EPA standard or its 
statutory authority would severely undermine the benefits of 
this rule. This is just one example. Overall, the benefits of 
the Clean Air Act vastly outweigh its costs by a ratio of 32 to 
1. Rather than being a drag on the economy, these critical 
regulations improve our lives just as they are intended to do, 
and that is the whole point of having regulations in the first 
place.
    Thank you very much, Mr. Chairman.
    Mr. Stearns.  I thank the gentleman.
    The gentleman from Texas is recognized for 5 minutes.
    Mr. Barton.  Thank you, Mr. Chairman. Timing is impeccable. 
I am supposed to be doing a live radio interview right now; we 
planned it very carefully that I can't do that.
    There has been an explosion of regulation and regulations 
issued in the first years of the Obama Administration. Quite 
frankly, I don't see that your organization has done anything 
to slow that down. I don't see that you have done anything to 
actually do what the existing Executive order says. What gives 
us the confidence to think that this new Executive order is 
going to be any different? Does this Executive order require or 
will your office require agencies to determine the net job gain 
or loss of past, current, or new regulations?
    Mr. Sunstein.  OK. If I may, can I discuss the idea of 
explosion? Actually----
    Mr. Barton.  Well, discuss it very quickly because I have 
only got 3 minutes.
    Mr. Sunstein.  I will be very fast. The number of 
regulations issued in the last 2 years is approximately the 
same as the number of regulations issued in the last 2 years of 
the Bush Administration. The total costs of regulation in the 
last fiscal year are lower than the total costs of regulations 
in the executive agencies in fiscal year 2007.
    Mr. Barton.  Just the regulations issued under the new 
health care law are in the thousands.
    Mr. Sunstein.  The numbers that have been issued in the 
last months are not in the thousands, so in terms of finalized 
economically significant rules, I don't think the data supports 
the claim.
    Mr. Barton.  But what is the answer to the question? Is 
this new Executive order going to require a determination by 
your group, your agency of the net job gain or loss of past, 
current, and new regulations?
    Mr. Sunstein.  We will be focusing very much on job loss as 
a result of regulations. The Executive order----
    Mr. Barton.  So the answer is yes?
    Mr. Sunstein.  Well, there are some technical reasons--
that----
    Mr. Barton.  So the answer is no?
    Mr. Sunstein.  Well, I am afraid that the answer to this 
one uniquely thus far is neither yes or no.
    Mr. Barton.  Well, that is a very evasive answer, and the 
President is going to give you an A plus for evading a straight 
question.
    Mr. Sunstein.  Well, if I can explain----
    Mr. Barton.  Let me go on because I have only got 2 minutes 
and 39 seconds.
    You are aware, I am sure you are conversant with the 
endangerment finding that was issued the first 90 days by the 
EPA Administrator?
    Mr. Sunstein.  I am aware of it.
    Mr. Barton.  Are you aware of any cost-benefit analysis 
that went into that endangerment finding?
    Mr. Sunstein.  A scientific finding is not a regulatory 
action so----
    Mr. Barton.  So the answer is, there was none?
    Mr. Sunstein.  There couldn't be at that time. The 
regulatory action that followed the scientific finding was full 
of cost-benefit analysis.
    Mr. Barton.  Do you agree that that endangerment finding if 
actually implemented would cost millions of jobs to the U.S. 
economy and hundreds of billions of dollars?
    Mr. Sunstein.  The endangerment finding by itself costs no 
money and no jobs. It is a scientific finding.
    Mr. Barton.  That is not my question.
    Mr. Sunstein.  If implemented, meaning if followed by 
regulatory action?
    Mr. Barton.  Well, if implemented, if actually put into 
practice.
    Mr. Sunstein.  Well----
    Mr. Barton.  Every independent analysis has said it would 
cost millions of U.S. jobs and hundreds of billions of 
dollars----
    Mr. Sunstein.  What I will tell you is----
    Mr. Barton [continuing]. Per year.
    Mr. Sunstein [continuing]. what we and the EPA are 
determined to do and with the new emphasis in the Executive 
order which I am grateful for your enthusiasm for is to try to 
minimize burdens and----
    Mr. Barton.  I have 1 minute and 13 seconds. In Monday's 
Wall Street Journal, an EPA spokesman was quoted as saying that 
President Obama's new Executive order that you are here to 
testify on will not affect the EPA at all. Do you agree or 
disagree with the attestation of the spokesperson at the EPA?
    Mr. Sunstein.  The Executive order will affect all agencies 
to which it applies, including the EPA.
    Mr. Barton.  So you will send a letter to the EPA and 
inform them that they are going to be subject to this order?
    Mr. Sunstein.  It is clear on the face of the Executive 
order that the EPA----
    Mr. Barton.  So the EPA spokesperson just misspoke?
    Mr. Sunstein.  I would like to see exactly what the EPA 
spokesperson said, but it is as clear as day----
    Mr. Barton.  It is clear as day?
    Mr. Sunstein [continuing]. That the Executive order applies 
to the EPA.
    Mr. Barton.  My last question. Would you support an 
amendment to the Clean Air Act that would require the EPA to do 
a true cost-benefit analysis of any proposed regulation it 
proposes to implement under that Act?
    Mr. Sunstein.  We are in favor of cost-benefit analysis of 
any regulatory action, and that is already required by the 
Executive order.
    Mr. Barton.  So the answer to that is yes?
    Mr. Sunstein.  With respect to legislative action, that is 
not quite my lane. We are in the implementation business. So on 
the general idea of cost-benefit analysis for regulatory 
actions, absolutely.
    Mr. Barton.  Thank you. I yield back.
    Mr. Stearns.  I thank the gentleman.
    The gentleman from Michigan, Mr. Dingell, is recognized for 
5 minutes.
    Mr. Dingell.  Thank you, Mr. Chairman.
    I am interested in the last question just raised. Under the 
Clean Air Act, EPA is required to consider first, the health 
implications, and second, the best and the most economic way of 
accomplishing that purpose. Is that right?
    Mr. Sunstein.  It depends on the----
    Mr. Dingell.  Yes or no.
    Mr. Sunstein.  Not quite, no.
    Mr. Dingell.  Oh, yes, quite, because I helped write that 
law.
    Mr. Sunstein.  No. If you need more than a yes or no 
answer, no, that's not correct.
    Mr. Dingell.  What is wrong with it?
    Mr. Sunstein.  Under the National Ambient Air Quality 
Standards, cost is not relevant. It is only a scientific 
interpretation.
    Mr. Dingell.  Dearly beloved friend, I said that the first 
step taken is to comply with the law and address the health 
care questions. The second question that is addressed is to do 
it in the most efficient and economic way. Is that right?
    Mr. Sunstein.  I don't think that is quite right either.
    Mr. Dingell.  I would suggest strongly you go back and take 
a look at it because that is the way we wrote it.
    Now, let me go into some matters here of concern. OIRA is 
required under the Executive order to submit a preliminary plan 
to review rules and regulations for the purposes of modifying, 
streamlining, expanding, and repealing. Do you believe that 120 
days is sufficient time for the agencies to conduct such a 
review and to prepare an appropriate plan? Yes or no.
    Mr. Sunstein.  Yes.
    Mr. Dingell.  All right. Next question. Will these plans be 
subject to public notice and comment requirements of the 
Administrative Procedure Act?
    Mr. Sunstein.  It is not a rule so no, but we do hope to 
have a high degree of public engagement.
    Mr. Dingell.  Well, the Administrative Procedure Act 
requires these things to be subject to public notice and 
comment, does it not?
    Mr. Sunstein.  No, it does not apply to preliminary plans.
    Mr. Dingell.  All right. Now, will the agencies be required 
to have a public notice and comment period for any rules or 
regulations that are withdrawn or repealed? Yes or no.
    Mr. Sunstein.  Yes.
    Mr. Dingell.  Given the intent to reduce federal non-
security spending in fiscal year 2008 levels, do you believe 
federal agencies will have the funding necessary to complete 
the required look-back of existing rules and regulations, yes 
or no?
    Mr. Sunstein.  Yes.
    Mr. Dingell.  Do you believe that the agencies have the 
personnel resources necessary to complete the look-back and do 
the other things that they must do? Yes or no.
    Mr. Sunstein.  Yes.
    Mr. Dingell.  Do you anticipate that the regulatory 
reviews, for example, by the Department of Health and Human 
Services will prevent the agency from completing the 
rulemakings required in and hinder the general implementation 
of the Affordable Care Act? Yes or no.
    Mr. Sunstein.  No.
    Mr. Dingell.  Similarly, will regulatory reviews prevent 
the Food and Drug Administration from completing the 
rulemakings required in and hinder general implementation of 
the Food Safety Modernization Act passed by the Congress in the 
last session? Yes or no.
    Mr. Sunstein.  No.
    Mr. Dingell.  Thank you, Mr. Chairman. I have stayed within 
my time.
    Mr. Stearns.  I thank the gentleman from Michigan.
    Mr. Sullivan is recognized for 5 minutes. We have a vote, 
and we are going to continue on, and then I urge everybody to 
come back. We need just a couple members. So we will adjourn 
after this vote and then come back. We don't have a series of 
votes until 3:00, I believe, so we should be able to get 
through the hearing. I recognize Mr. Sullivan.
    Mr. Sullivan.  Thank you, Mr. Chairman, and thank you, Mr. 
Sunstein, for being here today.
    The EPA responded to the President's new Executive order 
last week by saying that they were confident it wouldn't need 
to alter a single current pending rule. EPA's statement went on 
to say that in fact EPA's rules consistently yield billions in 
cost savings that make them among the most cost-effective in 
government. Do you agree with the EPA's statement on this new 
Executive order review rule?
    Mr. Sunstein.  The Executive order applies to the EPA. The 
retrospective analysis it requires is new so the EPA will have 
to do something new, and it welcomes that retrospective 
analysis, and the various provisions of the Executive order 
emphatically do apply to the EPA.
    Mr. Sullivan.  So it is yes?
    Mr. Sunstein.  Well, anything involving greenhouse gases or 
air pollution or water pollution, and what I would want to 
emphasize is the provision calling for integration and 
harmonization. So sometimes sectors and industries are faced 
with overlapping and redundant requirements, and EPA I know 
welcomes the opportunity and direction to try to promote 
greater simplicity, reduce burdens, and promote greater 
certainty, a point which has had a lot of emphasis in this 
hearing.
    Mr. Sullivan.  Do you believe that all of the pending 
economically significant rules before the EPA as currently 
drafted will yield taxpayer savings?
    Mr. Sunstein.  I would have to look at them all to make a 
judgment.
    Mr. Sullivan.  Are you involved in that process, though?
    Mr. Sunstein.  We look at them when they come over 
typically to our office so the ones that are in the early 
stages of development where sometimes the EPA won't even decide 
to send the rule over because it needs to do more work. We 
don't typically engage with the agency before they have 
something that they are able to submit to us.
    Mr. Sullivan.  Do you believe that all of the pending rules 
before the EPA as currently drafted will create jobs which we 
need desperately in this country?
    Mr. Sunstein.  It would be--I do not believe that every 
rule that any agency is considering is likely to create jobs.
    Mr. Sullivan.  So your answer is no?
    Mr. Sunstein.  I do not believe that every rule that the 
EPA is considering is likely to create jobs.
    Mr. Sullivan.  Do you disagree with the EPA then, for 
example?
    Mr. Sunstein.  I am reluctant to disagree with newspaper 
accounts of spokespeople, so I would need to see the quotation 
and I would need to see what its accuracy is. It is true that a 
number of EPA rules have benefits well in excess of costs.
    Mr. Sullivan.  And your boss seems to think that too.
    Mr. Sunstein.  Seems to think a number of EPA rules have 
benefits well in excess of cost?
    Mr. Sullivan.  No, that he is concerned about our economy 
and that some of these regulations might hurt jobs.
    Mr. Sunstein.  Oh, we very much--you are exactly right, 
Congressman. That is our focus. That is the focus of this 
Executive order, to make sure that regulations are helpful to 
economic growth.
    Mr. Sullivan.  I hope so.
    The President's new Executive order says that agencies must 
consider equity, human dignity, fairness, and distributive 
impacts in determining cost-benefit of regulations. I have no 
idea what that actually means in bureaucratic language but say 
for example your cost-benefit test imposed $110 billion in hard 
costs to the economy but supposedly result in a $1 trillion 
increase in human dignity. What does this mean, and please 
explain this to me as I have several companies in my district. 
Mr. Gardner pointed that out. They're scared to death. They 
really are. They bring this up all the time--town hall 
meetings, meetings in my office, chemical companies, Oklahoma 
energy companies, trucking companies. And how do I explain all 
this gobbledy gook and stuff that you talk about? I mean, can 
you break it down on simple terms for me so I can go home to 
Oklahoma and talk about this?
    Mr. Sunstein.  I am extremely grateful for that question 
because it is very important, and I understand the concerns to 
which it might give rise.
    Mr. Sullivan.  There are a lot of concerns.
    Mr. Sunstein.  Let me explain if I may.
    Mr. Sullivan.  It is the most concerning thing to this 
economy and business right now.
    Mr. Sunstein.  I think it ought not to be, and let me 
explain why. The sentence right before the one that refers to 
human dignity says ``quantify in the most accurate way possible 
costs and benefits using the best available techniques.'' That 
is a firmer statement in favor of quantification than any 
American President has made.
    With respect to equity, here is an example. We have a rule 
that has been proposed that involves children being run over--
this is an immense tragedy--by their own parents because there 
isn't visibility, they can't see behind in the cars, and we had 
parents begging Congress to have a law that would save hundreds 
of children from being killed in those accidents. This rule, 
which is directly implementing a statute, it is about equity. 
It is about children typically. I have a son myself who is not 
quite 2. The children are typically around that age just 
learning to walk and getting hit. That is about 45 percent of 
those who are hurt in those accidents. That is equity. That 
plays a role.
    With respect to human dignity, we do not mean this as an 
all-purpose qualifier of cost-benefit analysis, which is the 
foundation of the Executive order. We do mean it as a 
recognition that if you have a regulation or a law that is 
helping people who are wheelchair-bound--often they are 
veterans, by the way--to have access to bathrooms, there is a 
dignitary concern there. It is about human dignity, not just 
about----
    Mr. Sullivan.  I understand that, but someone keeping their 
job is dignity too.
    Mr. Sunstein.  Absolutely, and that is why----
    Mr. Sullivan.  It is a dignified thing to do.
    Mr. Sunstein.  That is why job creation is in the first 
sentence of the Executive order.
    Mr. Sullivan.  Thank you. I yield back.
    Mr. Stearns.  I thank the gentleman. We will temporarily 
put the subcommittee into recess until 11:35, 11:40. Coming up 
on the Democrat side is Mr. Gonzalez and Mr. Green, and then on 
our side would be Burgess and Blackburn. So I urge everybody to 
return.
    [Recess.]
    Mr. Stearns.  The subcommittee will reconvene, and the 
chairman recognizes Ms. Schakowsky from Illinois for 5 minutes.
    Ms. Schakowsky.  Thank you, Mr. Chairman.
    I wanted to thank you, Mr. Sunstein, for mentioning the 
requirement now to have some rearward visibility in cars. Along 
with Republican Peter King of New York, that was my legislation 
that would require some rulemaking, and I am very grateful for 
the lives that will be saved and injuries that will be 
prevented because of the regulation.
    I am wondering, one way to judge, I suppose, how we are 
doing with regulation is just to count the numbers, but I think 
another way would be to look at what are the net benefits of 
those regulations, and I am wondering if you could describe 
that and perhaps even compare that to prior Administrations.
    Mr. Sunstein.  Thank you for that question. In the first 
year of the Clinton Administration, the net benefits of final 
regulations were minus $400 million. In the first year of the 
Bush Administration, the net benefits of regulations were minus 
$300 million. In our first year, 2009, the net benefits of 
regulations were plus $3.1 billion, and it is going to look a 
lot better for 2010. So our net benefits are way ahead of our 
predecessor Administrations.
    In terms of human realities behind the numbers, which your 
question points to, the rear visibility rule, which hasn't been 
finalized yet but it has been proposed, will save hundreds of 
lives or serious injuries, a plurality of which occur to 
children. We have a rule involving salmonella and eggs which 
will prevent 79,000 diseases, protect Americans a number of 
whom would die without the rule. We have rules involving 
stopping distance for trucks so they don't crash into people, 
so they stop more quickly. This will save hundreds of lives. So 
we are looking very carefully at the cost side, but as your 
question suggests, it is sometimes worth incurring a cost if 
you can save significant lives, prevent injuries, prevent 
diseases and illnesses.
    Ms. Schakowsky.  I would also like you to describe the 
process. Clearly, OIRA doesn't always agree with regulations 
that are proposed, and again, there are a number of ways to 
measure that but I am wondering if you could describe your 
process and what the effect has been when you don't agree with 
regulations that have been proposed.
    Mr. Sunstein.  Thank you for that question. The OIRA 
process which has been built up really since President Reagan 
and has had bipartisan approval involves agencies' submission 
of rules, proposed or final, to the Office of Information and 
Regulatory Affairs and then we coordinate a process of 
interagency analysis. So different parts of the government with 
different perspectives and expertise will weigh in on the 
proposed rule, and we have a period when the proposed rule is 
with the Office of Information and Regulatory Affairs when we 
are available to members of the public including stakeholders, 
including Congressional staffs, who can come over to us and 
frequently do to weigh in on rules.
    There was a reference to the return letter and the absence 
of one from the Obama Administration thus far. That is a 
nuclear option, and if you look at the practice under the Bush 
Administration and the Clinton Administration and the Bush 
Administration before, the return letter is a very rarely used 
tool. I think the median number in the Bush Administration 
certainly in its last 5 or 6 years was one or two for thousands 
of rules. What more typically happens is a collaborative 
process by which the agency responds to the concerns expressed 
in the review process, and in our Administration, 75 percent of 
the time, three-quarters of the time the rule has been 
concluded on, meaning approved, consistent with change, meaning 
in the overwhelming majority of cases when the rule is 
concluded on, it has been altered, not necessarily by the 
Office of Information and Regulatory Affairs, but as a result 
of the process, typically by the agency itself which sees maybe 
there is a less burdensome way to do it, maybe we can cut costs 
this way, maybe this will have less of an adverse potential 
effect on jobs. Also, agencies not infrequently withdraw their 
rules when they conclude on the basis of what they have heard 
that it is not appropriate to go forward, and the withdrawal is 
a much more collaborative and constructive approach than the 
return letter, and I am sure previous OIRA administrators would 
agree with that. We have had at last count 99 rules that were 
submitted to the Office of Information and Regulatory Affairs 
withdrawn.
    Ms. Schakowsky.  So the record of this collaborative effect 
is to actually get rid of some potential rules and to 
significantly change a number of them?
    Mr. Sunstein.  Absolutely.
    Ms. Schakowsky.  In the very few seconds I have left, let 
me just associate myself with the President's remarks yesterday 
that he would not hesitate to enforce commonsense safeguards to 
protect the American people. That is what we have done in this 
country for more then a century, and I think that is the way we 
should go forward. So I thank you very much.
    Mr. Stearns.  I thank the gentlelady.
    The gentlelady from Tennessee, Ms. Blackburn, is 
recognized.
    Ms. Blackburn.  Thank you, Mr. Chairman. I appreciate that, 
and I thank our witness for being here. I do have about three 
questions that I want to move through as quickly as possible.
    We have discussed these orders that have been given, and 
one is entitled Regulatory Flexibility, Small Business, and Job 
Creation. In it, the President states that his Administration 
is, and I am quoting, ``firmly committed to eliminating 
excessive and unjustified burdens on small businesses.'' Now, 
this is important to me because small business is our main 
employer in Tennessee. So as the President states in his memo, 
isn't it true that eliminating burdens on small business is the 
purpose of the Regulatory Flexibility Act?
    Mr. Sunstein.  Absolutely correct.
    Ms. Blackburn.  OK. Under this Act, if any agency's 
proposed regulation will have a--quoting from the Act--
``significant economic impact on a substantial number of small 
entities'' an agency must conduct a regulatory flexibility 
analysis, correct?
    Mr. Sunstein.  That is correct.
    Ms. Blackburn.  But isn't it true that in the vast majority 
of cases, the agency does not end up performing that analysis 
because it determines that its own regulation will not have a 
significant impact on small businesses?
    Mr. Sunstein.  That is correct, with the qualification that 
the agency's determination to that effect is subject to a 
public and internal scrutiny including from the Office of 
Advocacy, which is an important partner in the regulatory 
process.
    Ms. Blackburn.  Well, I would point out to you also that a 
GAO report showed that 89 percent of its rules were certified 
as not having a significant impact. This is from the time 
period from 1994 to 1999. So the EPA was doing the analysis 
only 10 percent of the time. So do you have any current data on 
how often agencies are making this determination and therefore 
avoiding the requirement to fulfill that regulatory flexibility 
analysis?
    Mr. Sunstein.  I don't have a number offhand but we can----
    Ms. Blackburn.  Would you submit for the record?
    Mr. Sunstein.  Absolutely.
    Ms. Blackburn.  OK. Also in the memo regarding small 
business, it directs agencies to give, quoting, ``serious 
consideration to reducing burdens on small businesses only in 
those cases where the agency is conducting a regulatory 
flexibility analysis,'' correct?
    Mr. Sunstein.  That is correct.
    Ms. Blackburn.  But since these agencies rarely do it, it 
sounds like this memorandum won't really have much impact on 
small businesses. Do you agree with that?
    Mr. Sunstein.  No, that I don't agree with, and you can 
just see in the last week two rules from the Occupational 
Safety and Health Administration have been withdrawn in order 
to engage with small business.
    Ms. Blackburn.  Do you make the determination that 
withdrawing those has a potential impact on small businesses' 
ability to conduct business?
    Mr. Sunstein.  I don't personally make a determination that 
the withdrawal will have a positive impact but the Department 
of Labor----
    Ms. Blackburn.  But, sir, you are our witness today.
    Second question that I'd like to go to with you. One of the 
protections for small business found in current law is the 
Small Business Regulatory Enforcement Act, and under that Act, 
EPA and OSHA must notify the SBA before publishing the 
regulatory flexibility analysis for a proposed rule so that an 
advocacy panel, which you just mentioned, can be convened to 
review it and provide feedback on its impact on small business. 
Recently, the new governor of Tennessee, Bill Haslam, issued a 
45-day freeze on all new regulations and rules as part of a 
top-to-bottom review to fully understand new burdens being 
placed on businesses in our State. Regulatory reviews like the 
one that Tennessee is undergoing are important because States 
and small businesses are concerned that agencies are ignoring 
their feedback and the feedback that comes from the advocacy 
panel. I do think this is a problem that you all have and needs 
to be addressed. Here is an example. The EPA did not follow the 
recommendation of the advisory panel with respect to the boiler 
MACT rule, instead issuing a standard that many small 
businesses feel and have spoken out on that it is impossible to 
satisfy regardless of the cost. So who reviews the agency's 
decision with respect to how it considers the panel's advice? 
Does OIRA do that? What is the role here?
    Mr. Sunstein.  We participate in that. There is a group, we 
participate in that, and you can be confident given the recent 
Presidential Memorandum and Executive order, and not just that, 
but concrete actions in the recent past that the concerns of 
small business will be very much taken into account.
    Ms. Blackburn.  Your consideration of it, do you consider 
it to be objective or subjective?
    Mr. Sunstein.  Consideration of the significant impact on a 
substantial number?
    Ms. Blackburn.  Yes.
    Mr. Sunstein.  To the best of our ability, that is an 
objective determination.
    Ms. Blackburn.  I have other questions. I will submit them 
to you in writing and ask for your timely response in writing.
    Mr. Sunstein.  You will have that.
    Ms. Blackburn.  Thank you, sir. Yield back.
    Mr. Stearns.  Mr. Green is next. Mr. Green, you are 
recognized for 5 minutes.
    Mr. Green.  Thank you, Mr. Chairman.
    Mr. Sunstein, some of the regulations that raise the most 
ire of my Republican colleagues are regulations that are 
designed to implement the new health care reform law. In fact, 
you have to have regulations to implement a law typically. I am 
trying to think of an example that you don't. But Republicans 
have voted to repeal the entire law but a close look at these 
regulations shows that they will make insurance better and less 
expensive for patients for companies that provide workers with 
their insurance. On November 22, 2010, the Obama Administration 
issued a regulation implementing the medical loss ratio 
provision of the Affordable Care Act. This regulation will make 
the insurance marketplace more transparent and make it easier 
for consumers to purchase plans that provide better value for 
their money. The guts of the regulation require that insurance 
companies provide more value for their premium dollar by 
actually spending your health insurance costs on health care. 
Such a novel issue for a health care company, I think, and to 
have a regulation that actually requires that, and not inflated 
administrative costs or excessive executive salaries. Mr. 
Sunstein, do you think that these rules would establish greater 
transparency and accountability for insurers, that they will 
guarantee Americans receive more value for their premium dollar 
and they will even give more Americans a rebate of some of 
their insurance premiums? Now, again, without the regulations 
that law would not be effective. Is that correct?
    Mr. Sunstein.  That's correct.
    Mr. Green.  These all seem like they are good people who 
need health insurance. Isn't there a good example of 
regulations helping consumers, for example? Another regulation 
put in effect as a result of the health care reform law is the 
so-called grandfathering clause. This rule protects the ability 
of individuals and businesses to keep their current plan. It 
provides important consumer protections that give Americans 
rather than insurance companies control over their own health 
care. And it provides stability and flexibility to insurers and 
businesses that offer insurance coverage as the Nation 
transitions into a more competitive marketplace in 2014.
    My question is, let me ask you about this rule. Isn't there 
a good example of regulations helping consumers and providing 
certainty for businesses?
    Mr. Sunstein.  Absolutely that is a good example.
    Mr. Green.  Can you give us any insight here where there 
have been so many attacks on commonsense regulations that help 
consumers? Again, this is something that we have it in the law, 
and if the Administration didn't promulgate the regulations, I 
think you would not be doing your job.
    Mr. Sunstein.  Well, we have a rule that has been issued 
that is going to help consumers make choices about tires by 
giving information--it is not a mandate, it is not very 
expensive--about safety, fuel economy and durability, and that 
is part of consumer protection providing information so that 
people can make their own choices.
    Mr. Green.  There are rules, and these are good examples of 
how regulations can actually help the American public and our 
constituents. They give Americans better value for their health 
insurance dollar and give businesses certainty about the 
insurance that they are paying for for their employees. It 
would seem like we should be cheering those kind of regulations 
instead of saying no, we want to abolish them. Now, we can take 
votes up here and you are not involved in that, but if you are 
not promulgating the regulations, again, the Administration 
would not be doing their job, and that is true whether it is 
President Obama, President Bush, President Clinton, or all the 
way back to President Reagan that promulgated regulations that 
was the intent of the law. Is that correct?
    Mr. Sunstein.  Yes. Our first obligation is to respect the 
law.
    Mr. Green.  Thank you.
    Mr. Chairman, I have no other questions but I would be glad 
to yield my 1 minute left to our ranking member.
    Ms. DeGette.  Thank you for yielding.
    Let me just follow up on a couple of questions or maybe 
one. Mr. Sunstein, you were asked earlier about the direction 
in the Executive order to consider values that are difficult to 
quantify like human dignity. Can you elaborate for about 40 
seconds on the intent of this direction?
    Mr. Sunstein.  Yes. The idea is to recognize that under the 
law as the previous question suggested, human dignity is 
sometimes something that agencies are supposed to consider. 
Just this week, the Department of Justice issued a rule 
involving rape, and in the analysis of the rule the agency paid 
careful attention to monetizable costs and benefits. That is 
very important, but it recognized that the act of rape involves 
an assault to human dignity and it is not reducible just to 
numbers.
    Ms. DeGette.  Thank you.
    Mr. Stearns.  Dr. Burgess is recognized for 5 minutes.
    Dr. Burgess.  Thank you, Mr. Chairman.
    Mr. Sunstein, we were all grateful when the President 
signed an extension of the sustainable growth rate law in 
December, but I think as we all recognize, access for our 
seniors to physicians of their choice is being adversely 
affected by what we know of as the sustainable growth rate 
formula, the formula by which Medicare pays physicians. Now, is 
it the President's intention to follow through on his promise 
that this formula abnormality be fixed in this 13-month time 
interval that we have given ourselves?
    Mr. Sunstein.  I greatly appreciate the questions. It is a 
bit out of my domain as OIRA Administrator but----
    Dr. Burgess.  You do work in Office of Management and 
Budget, correct?
    Mr. Sunstein.  I do.
    Dr. Burgess.  Is it likely to be in the President's budget 
request to Congress that there is some type of relief on the 
sustainable growth rate formula?
    Mr. Sunstein.  I would have to defer to the director of the 
Office of Management and Budget lacking clarity on the right 
answer to that one.
    Dr. Burgess.  Do you have a sense whether it is the 
President's commitment to follow through on this?
    Mr. Sunstein.  My belief is that anything the President has 
made a commitment to, he is likely to follow through on.
    Dr. Burgess.  Well, as you know, I mean, the price tag for 
this varies depending on who you talk to, but you get figures 
from $200 billion to nearly $400 billion over the 10-year 
budgetary cycle. Do you have an idea, a sense as to what 
programs the President is looking at cutting or replacing in 
order to come up with this figure?
    Mr. Sunstein.  Actually on the budgetary side, there is an 
army of people who are working and that is not a side that the 
Office of Information and Regulatory Affairs works with at that 
level of detail. So in particular budgetary requests, we are 
respecting the workload of others.
    Dr. Burgess.  Perhaps we can get that information from 
another source. But I do want you to understand that the 
Administration has made a commitment on this and America's 
doctors are looking to the Administration to fulfill that 
commitment.
    On the issue of regulations, there was an entirely new 
federal agency that sprang up like mushrooms after a spring 
rain after the health care law was signed, and this was the 
Office of Consumer Information and Insurance Oversight. I 
talked to some of the people who were at the head of that 
agency in the fall and they could not identify for me where the 
authorization language existed in the Patient Protection 
Affordable Care Act for that new federal agency. I asked if 
there were not other areas of HHS that might do this same 
activity, and they said oh, no, this is an entirely new 
activity that we will be undertaking. Never before has the 
Federal Government regulated private insurance on a national 
level. That has always been left up to the States. So in this 
new climate of regulatory reform, is this a good idea to be 
going in this direction?
    Mr. Sunstein.  As I say, the lane of the Office of 
Information and Regulatory Affairs is relatively narrow so 
issue of organization within HHS or DHS or others----
    Dr. Burgess.  Let me interrupt you. Never mind that, 
because they actually have reorganized since we started asking 
questions and it is now in a different part of HHS, but just 
overall, if we are looking at a new climate of perhaps easing 
some of the regulatory burden, your words, not mine, is it a 
good idea to be instituting an entirely new federal agency that 
will perform this function?
    Mr. Sunstein.  What I would say in the spirit of the 
Executive order just signed is that any decision with respect 
to regulation should be connected with the principles that the 
President has laid out, and that includes structural decisions.
    Dr. Burgess.  Well, of course, it would have been helpful 
if we could have had those individuals in front of us for an 
oversight hearing during the fall. We were not permitted to do 
that. I suspect we will be now under Chairman Stearns' 
leadership. But again, in the interest of this new climate of 
regulatory reform, it seems like this is something where your 
office should take a direct interest. I mean, we are told, for 
example, that you can't sell insurance policies over State 
lines because that has always been a State regulated function 
and yet this individual is telling me that for the first time 
there is now going to be a national regulation of private 
insurance that has never existed in this country before. If 
that is OK, then maybe it is OK that we sell insurance across 
State lines, that that may be a logical follow-on that perhaps 
we should explore. But from the regulatory side, I do hope that 
your agency will take at least some passing interest and have 
some curiosity into this new agency that has been set up and 
now been absorbed into CMS but it is still there. The purpose 
is still there.
    Mr. Sunstein.  I appreciate it.
    Mr. Stearns.  I thank the gentleman.
    Mr. Weiner from New York is recognized.
    Mr. Weiner.  Thank you. Let me begin by congratulating you, 
Mr. Chairman, on this hearing. You are showing you are running 
a very efficient, quick hearing, so quick in fact that it is 
uncontaminated by actual testimony from the witness in most 
cases.
    We are learning a little bit about this Congress, which is 
that we have lurched so quickly into a very successful campaign 
by my Republican friends that all of the slogans are just being 
transplanted. We are having committee hearings and we are 
starting to see the slogans don't really hold up. For all this 
talk about excessive regulation, the first thing that Mr. Issa, 
a chairman of another committee, says is, hey, guys, tell us if 
there are any regulations you don't like because we don't know 
any. We hear my colleagues, particularly some of my freshmen 
colleagues, talk about how small businesses always tell me 
about regulations and how bad things are. Well, let us take a 
look at the record. The record is that the Dow Jones has had a 
better year than they have had any time in the last 12 years, 
that we have now businesses sitting on over $1 trillion of cash 
that they have done pretty well with, that we have now created 
more private-sector jobs in 2 years of Obama than 8 years of 
President Bush. So this whole idea of, my goodness, the 
crushing regulations, and then the first exchange between 
Chairman Stearns and Mr. Sunstein was interesting. He asked a 
question or postulated something. Mr. Sunstein rebutted it and 
then he returned and said well, let us assume I am right. Well, 
OK, we can do that, or we can actually listen to the evidence. 
There are no more regulations in these 2 years than there have 
been in the past 2 years.
    But let me just ask, perhaps to put into context, this idea 
of regulation. No one likes bad regulations but regulation to 
try the price on it is kind of a hard thing to do. For example, 
when there was this big effort on the part of financial 
services companies to change the capital requirements to allow 
them to keep less capital, have more debt on their books, they 
said that this regulation was costing us an enormous amount of 
money. Well, I am curious. How do you calculate the cost of 
easing that regulation? Well, you have to count the TARP fund, 
750-some-odd billion dollars, but how do you count the pain 
that it causes some person who did nothing wrong, whose home is 
not foreclosed, who is not underwater but lives on a block now 
with five foreclosed homes because capital requirements weren't 
lived up to? How do you count that? Let us assume each house is 
a $200,000 house. You can say well, there is the $200,000 home 
that is foreclosed on but how do you assess the value to the 
community that has lost the tax base? How do you assess the 
value of that homeowner who did nothing wrong, who took out no 
extra loans but now whose property value has plummeted 75 
percent? How do you say to the rest of the economy that small 
business guy that because the bank has gone under because that 
requirement has been eased, now he can't get a loan?
    The fact is, ladies and gentlemen, that these regulations 
are in place and they seem so onerous and burdensome sometimes 
but what they are intended to do is stop real damage to our 
economy. The very same Wall Street people who advocated for the 
lessening of the net capital rule are the ones who are now 
unemployed. They thought they were doing a great, smart thing, 
advocating to loosen that rule. We did it, and now their 
company, Bear Stearns, doesn't exist. Now, would you rather 
have a small regulation and have a beautiful company that is 
employing lots of people and giving loans or get rid of that 
burdensome, onerous regulation that requires this silly thing 
like they keep enough money in their bank before they start 
giving loans? Would you rather have a regulation that says all 
hospitals have to have electronic recordkeeping so they can 
share information or do you want to try to figure out the cost 
that it is when someone is given the wrong drug and goes into 
seizure? Yes, it may cost a little bit more money to have these 
regulations in place, but if you are really going to do the 
mathematic calculation that Mr. Stearns alluded to and others 
have alluded to, how exactly do you do that? I think it would 
be helpful, Mr. Chairman, for us to have a hearing on exactly 
how it is you assess these costs. Let us see how much the cost 
is on having a lead in toys regulation. Let us see. How do you 
figure out the cost of brain cancer in a 6-year-old as opposed 
to a 3-year-old? Huh. Let us put that in a ledger and see how 
that works out. But the regulation is so burdensome and 
onerous. Well, to that family, that is the difference between 
their child having a lifetime illness and not, you know what? 
That regulation seems OK. Maybe it is not so bad for a toy 
company to have to not put lead in their toys.
    So if we are really going to do the math, I think we should 
have a hearing here perhaps when Mr. Sunstein can come back. He 
clearly has a lot he wants to get off his chest, and I am not 
giving him much opportunity here either, but let us really see 
what that ledger looks like and let us be honest about it. Let 
us get past the campaign rhetoric.
    Mr. Stearns.  Ms. Myrick is recognized for 5 minutes.
    Mrs. Myrick.  Thank you, Mr. Chairman.
    I wanted to go back to the NHTSA rulemaking, and I am going 
to ask you to submit some of this for the record because I have 
got another question and I will be out of time, so I appreciate 
it.
    The proposed rulemaking that does say, rear visibility 
system and then cameras inside the car, etc., supposedly what I 
have been told is that the accidents that did happen were in 
large trucks and SUVs and vans, bigger vehicles, where the rule 
says it has to go in every car, and my question on the cost-
benefit analysis again, believe me, I don't want children to 
lose their lives and there is nothing more unimaginable than 
losing a child, and if we can save millions of lives, I support 
saving millions of lives. But when you look at the change that 
the Administration says they want to do in the rulemaking and 
try and put cost-benefit analysis into it, the NHTSA's own 
modeling that they use says that it isn't cost beneficial to do 
it.
    And then the other question is, if you do put this across 
the board to all the cars, does it raise the price of the cars 
to a point where people can't buy them and then you have still 
got accidents because they don't have availability? So for the 
sake of time, if you would be willing to answer that for me to 
submit for the record, and then also, did you have consultation 
with NHTSA before this happened, I mean, before the proposed 
rulemaking on the----
    Mr. Sunstein.  Yes.
    Mrs. Myrick [continuing]. Cost benefit?
    Mr. Sunstein.  Always with rules, we review the proposed 
rules before they go out.
    Mrs. Myrick.  Thank you. My next question is on billion-
dollar costs to the economy on rulemaking. I know you were 
asked by Speaker Boehner and some other House members last year 
to tell them how many billion-dollar rules the Administration 
is preparing, and they didn't receive any answers to my 
knowledge, which has caused a lot of uncertainty in the 
business community. I know Mr. Weiner says everybody is doing 
wonderful but the reason they have got that cash setting aside 
is because they are afraid to invest it, not knowing what 
regulations are going to come down the pike. So, do you have an 
answer today? Can you tell us how many billion-dollar rules 
that you are planning?
    Mr. Sunstein.  I can tell you how many billion dollars we 
have done, and it is a very small number. Planning, as our 
discussion suggests thus far, requires the process of 
interagency review, public review, cost reduction, so the 
number of rules that are planned in any strong sense that cost 
over $1 billion is very hard to specify. Often they are rules 
that are under discussion but they weren't really planned and 
they might come in like a lion and go out like a lamb.
    Mrs. Myrick.  But perhaps we can get back with you on that 
later after a couple months or so.
    Mr. Sunstein.  Yes.
    Mrs. Myrick.  The other thing that I wanted to ask is, when 
you look back on the regulations that have been issued during 
the Administration, can you identify any in which it has been 
determined that the benefits have not justified the cost? Do 
you have that kind of analysis that you could share with us?
    Mr. Sunstein.  Yes. There is only one big one that comes to 
mind. It is called Positive Train Control, and it is a 
statutory requirement, and the Department of Transportation had 
to issue it as a matter of law even though the monetizable 
benefits are lower than the monetizable costs. There aren't a 
lot like that.
    Mrs. Myrick.  Would you be willing to submit again for the 
record?
    Mr. Sunstein.  Unquestionably.
    Mrs. Myrick.  I would appreciate a full answer and 
explanation on that particular situation.
    With that, I yield back the rest of my time, Mr. Chairman.
    Mr. Stearns.  I thank the gentlelady.
    The gentleman from Massachusetts, Mr. Markey, is 
recognized.
    Mr. Markey.  Thank you, Mr. Chairman, very much.
    So we all know what the reality of this hearing is. The 
Republicans hope that they can use the Regulatory Flexibility 
Act to turn the United States into a health, environment, 
safety, and consumer protection regulation-free zone, and the 
presumption is that regulation is bad. But obviously that is 
not necessarily the case. For example, we have heard a lot 
about how EPA's efforts to regulate global warming pollution 
will lead to an economic catastrophe but this is just not borne 
out by the facts.
    Before the Obama Administration's global warming 
regulations for cars and SUVs were announced in 2009, the auto 
industry in this country was literally in the tank before the 
regulations were in fact promulgated. More than 300,000 jobs 
lost, two American companies in bankruptcy and consumers no 
longer willing to buy the gas-guzzlers that the domestic 
automakers had bet the bank on. And what has happened since the 
regulations were announced? Well, in 2010 auto sales went into 
overdrive and soared more than 11 percent, snapping the 
industry out of its 4-year decline. Companies were rehiring 
thousands of workers, and there has been a proliferation of new 
companies that plan to make and market electric vehicles and 
other advanced vehicles. So this Groundhog Day recitation of 
how regulations will destroy the economy and jobs has already 
been shown to be flat-out wrong.
    So I have some questions about EPA's future global warming 
regulations that perhaps you could help me with, Mr. Sunstein. 
Will regulations that seek to limit global warming pollution 
from power plants or refineries also take into account the 
increase in jobs that could result from the development and 
installation of new clean energy technologies?
    Mr. Sunstein.  Yes.
    Mr. Markey.  Yes. Isn't it true that regulations to curb 
dangerous air pollutants could result in quantifiable cost 
savings in the form of medical expenses that won't be incurred 
or environmental damages that won't need to be mitigated?
    Mr. Sunstein.  Yes.
    Mr. Markey.  Installing pollution control technologies on 
power plants could also lead to increases in the efficiency of 
the facilities and significant cost savings for companies. Will 
you be quantifying these and other benefits as part of any 
regulatory analysis?
    Mr. Sunstein.  These are not multiple-choice questions, and 
the answer is yes.
    Mr. Markey.  Thank you. The EPA recently announced that it 
would only issue its proposal to regulate global warming 
pollution from refineries and power plants after meeting with 
business leaders and other stakeholders to solicit their input. 
Is this consistent with the President's Executive order 
requiring agencies to seek the views of those who might be 
impacted by regulations before proposing them?
    Mr. Sunstein.  Under section 2, absolutely.
    Mr. Markey.  EPA has also issued a rule that ensures that 
millions of smaller sources of global warming pollution are 
exempted from a requirement to obtain Clean Air Act permits and 
that the requirements for medium and larger emitters would be 
phased in over a period of several years. Is this consistent 
with the President's requirement that regulations take the 
special needs of small businesses into account?
    Mr. Sunstein.  Yes.
    Mr. Markey.  Are EPA's actions also consistent with the 
President's Executive order requiring agencies to promulgate 
regulations that impose the least burden on society and 
maximizing the net benefits to society?
    Mr. Sunstein.  That was the goal of the PSD tailoring rule.
    Mr. Markey.  Thank you. EPA recently proposed a rule to 
regulate air emissions from cement kilns. In its analysis, EPA 
found that the health benefits of the rule would yield between 
$17 and $18 for every $1 in cost. Do you think that this sort 
of return on a regulatory investment is a good one?
    Mr. Sunstein.  It sounds like it would be a very good 
investment.
    Mr. Markey.  Historically speaking, have industries 
typically overestimated the costs of new regulations?
    Mr. Sunstein.  That is frequently the case.
    Mr. Markey.  Now, for the cement kiln rule, EPA didn't even 
consider the benefits of reducing emissions of hazardous 
substances like lead, chromium or arsenic. Historically 
speaking, have agencies typically underestimated the benefits 
of new regulations?
    Mr. Sunstein.  Often they have. We need to be very 
systematic and not answer the question typically.
    Mr. Markey.  I thank you for that precision in your answer, 
but I think the larger point is true, that our lives are longer 
and safer and better because of a regulatory scheme that began 
to be put in place in 1900. Average age of death in the United 
States in 1900 was 48 years of age. These regulations that have 
gone on the books from the Garden of Eden until 1900, 48 years 
of age, now it's 79 years of age, 31 bonus years. Something 
happened in the last 100 years and we exported it around the 
world that we got all those extra years, and a lot of it is 
protecting the health, the safety, the environment and ensuring 
that those regulations are there to protect everyone, not just 
the wealthy, which is what the first 5,000 years of humanity 
was really focused on.
    I thank the gentleman.
    Mr. Stearns.  I thank the gentleman. The gentleman is very 
active and interested in baseball, and in this case he has 
offered Mr. Sunstein a lot of softball questions.
    Dr. Gingrey for 5 minutes.
    Dr. Gingrey.  Thank you, Mr. Chairman.
    Mr. Sunstein, obviously it would appear on the Democratic 
side of the aisle that all regulations and regulatory regimes 
are good and they are suggesting that on our side of the aisle 
they are all bad when obviously it is somewhere in between, and 
really the purpose of this hearing and your testimony, we want 
to glean the truth because clearly some regulatory rules are 
bad, and in regard to the issue of human dignity and consumer 
protection, let me reference last year the Administration 
included an end-of-life Medicare payment rate for physician 
services in its final rule at literally the last minute without 
allowing for a period of public comment. Only after a large 
public outcry did the Administration own up to its actions and 
indeed reversed itself.
    Section 1 of the President's recent Executive order states 
that our regulatory system, and I quote, ``must allow for 
public participation and an open exchange of ideas.'' I want a 
yes or no answer. In your opinion, did the Administration allow 
for public participation in the crafting of this regulation as 
spelled out in section 1 of the Executive order? Yes or no.
    Mr. Sunstein.  As the repeal of the original rule suggests, 
the judgment of HHS was that there had not been an adequate 
opportunity for public comment.
    Dr. Gingrey.  So the answer is no?
    Mr. Sunstein.  Yes.
    Dr. Gingrey.  Thank you. Another yes or no question. Do you 
or OMB know who in the Administration made that decision to not 
allow public participation, instead slipped this regulation 
into the rule in the dark of night? Yes or no?
    Mr. Sunstein.  I don't personally know.
    Dr. Gingrey.  OK. Another yes or no. Do you know which 
individuals within the Administration would have the authority 
to slip a regulation into a final rule in the dark of night 
without allowing for this public comment?
    Mr. Sunstein.  I don't think anyone has that authority.
    Dr. Gingrey.  So the answer is?
    Mr. Sunstein.  No, I don't know. There are people--the 
Secretary of HHS has considerable authority over her rules and 
she does not slip things in in the dark of night.
    Dr. Gingrey.  Well, it certainly does appear that the 
Administration purposely avoided obtaining Congressional 
approval for an unpopular regulation that they could not sell 
to the American people last Congress. So instead, the measure 
was inserted into this morass of regulations in the hope that 
no one would notice. Do you believe that the American people 
deserve to know why they were not allowed to publicly view this 
regulation before the Administration published it? Yes or no.
    Mr. Sunstein.  I think the American people deserve to see 
the content of rules before they are finalized.
    Dr. Gingrey.  So the answer is yes. Thank you. Again, would 
this recent Executive Order 13563 prevent the Administration 
from enforcing a regulation without allowing public 
participation in the future?
    Mr. Sunstein.  That is correct.
    Dr. Gingrey.  Can you assure us here today, Mr. Sunstein, 
that this Administration will not attempt such an illegal end 
run in the future? Yes or no.
    Mr. Sunstein.  Yes.
    Dr. Gingrey.  Thank you. And finally--and I will yield back 
some time, Mr. Chairman.
    Mr. Stearns.  I thank the gentleman.
    Dr. Gingrey.  If the witness would answer this last 
question? Would you agree this shows how regulations can make 
unpopular actions possible without Congress having to support 
political risky positions? Yes or no.
    Mr. Sunstein.  Well, if I have to answer yes or no, I would 
answer yes to that one.
    Dr. Gingrey.  Thank you. You have been a great witness, and 
I will yield back to the chairman.
    Mr. Stearns.  I thank the gentleman, and now we will move 
on to Mr. Scalise, who is recognized for 5 minutes.
    Mr. Scalise.  Thank you, Mr. Chairman, and Mr. Sunstein, I 
appreciate you coming before the committee.
    I want to start asking about regulations regarding oil and 
gas drilling operations, and I think you touched on some of 
that but does OMB actually go and review the rules from the 
Department of the Interior concerning oil and gas regulations?
    Mr. Sunstein.  If they are significant regulatory actions, 
yes. So it depends on their nature but some of them, the answer 
is yes.
    Mr. Scalise.  OK, some of them. When the Department of the 
Interior came out with the moratorium on drilling, did you 
review that?
    Mr. Sunstein.  No, that wasn't a regulatory action within 
the meaning of Executive Order 12866 so we did not review the 
moratorium.
    Mr. Scalise.  At least that is your feeling that it wasn't?
    Mr. Sunstein.  No, it is just, it doesn't fit easily within 
the definition of a significant regulatory action.
    Mr. Scalise.  Why would you not think that would be 
significant, the President literally shutting down an entire 
industry?
    Mr. Sunstein.  OK, I----
    Mr. Scalise.  And which cost billions of dollars.
    Mr. Sunstein.  I completely understand appreciate the 
question. The answer is somewhat technical, which is the 
foundation for authority is rules within the meaning of the 
Administrative Procedure Act. A moratorium isn't a rule within 
the meaning of the Administrative Procedure Act. We do extend 
review somewhat beyond that significant----
    Mr. Scalise.  When you look at--I will just bring you back 
to President Clinton's Executive Order 12866, which is still in 
effect and part of your department's purview. If it has an 
annual effect on the economy of $100 million or more or more 
adversely affects in a material way, I mean, we are talking 
about a major policy decision that had an impact on well over 
$100 million and in fact is one of the reasons that we are 
seeing the price of oil approach $100 a barrel. Would you 
consider that first of all a major economic impact of $100 or 
more?
    Mr. Sunstein.  Yes, though the ``it'' which is the 
reference is to regulatory actions, as I mentioned, and that is 
a term of art under the Executive order. The moratorium didn't 
quite fit under that.
    Mr. Scalise.  And I would reference you to also go back and 
look at the federal judge's ruling, who felt that the 
Department did go outside of their purview----
    Mr. Sunstein.  That is correct.
    Mr. Scalise [continuing]. In issuing that, and I would be 
curious to see what your relationship with those reviews was, 
and I would be surprised if you didn't feel that it was 
something that your department should have had review over. As 
it relates to the current regulatory scheme, are you in review 
of those rules?
    Mr. Sunstein.  Yes. Anything that counts as a rule under 
the Administrative Procedure Act, absolutely, significant 
guidance documents and interpretative statements under March 
2009 memorandum by the director of OMB, we review this also.
    Mr. Scalise.  Is it true that the Department did not 
perform a regulatory flexibility analysis regarding its impact 
on small businesses?
    Mr. Sunstein.  I don't recall the answer to that one. What 
are----
    Mr. Scalise.  I will help you. This is from OMB. This is an 
OMB document that actually says that the oil and gas operations 
on the Outer Continental Shelf, the actions that they took did 
not require--according to your office, did not require--
flexibility analysis.
    Mr. Sunstein.  Are you referring to the moratorium or are 
you referring to a rule?
    Mr. Scalise.  Their increased safety measures, as they 
referred to them.
    Mr. Sunstein.  Oh, OK. Well, if it is a rule, then there 
has to be an analysis to that effect, and my recollection is 
that the small business impacts were not significant enough to 
require that analysis.
    Mr. Scalise.  And who is that based on?
    Mr. Sunstein.  That is based in the first instance under 
the Regulatory Flexibility Act on the judgment of the relevant 
department.
    Mr. Scalise.  So you just take their word for it if they 
say it won't have $100 million impact? Clearly, and I will just 
run you off some numbers that the White House has actually 
confirmed. It has cost up to 12,000 jobs that our economy has 
lost because of that action. It has cost about 12 percent of 
our current U.S. oil production and about $70 billion of 
investment which there have been a number of private research 
that has been done to show that, $70 billion, so you just took 
their word that it wouldn't cost over $100 million?
    Mr. Sunstein.  OK. If you are referring to the moratorium, 
as I say, that was not subject to our review under our 
Executive order. If you are referring to some rules that we 
have had----
    Mr. Scalise.  The overall rules.
    Mr. Sunstein.  Well, the moratorium is distinct from the 
rules. I don't believe, though I might be wrong on this, that 
the rules are anticipated to have significant adverse job 
impacts. One of them is----
    Mr. Scalise.  Well, it already has. I mean, that has been 
documented by the White House, so when you come out with 
flexibility analysis, and you determine or you take their word 
that they don't need to do one under the law----
    Mr. Sunstein.  No. I said in the first instance, which is a 
very important qualification, we do not take their word as 
authoritative and we engage with the Office of Advocacy and the 
Small Business Administration very carefully.
    Mr. Scalise.  And I would like to get any kind of 
documentation, e-mails, correspondence that you had with them 
in relation to these rules and the determination not to do a 
flexibility analysis by your department because that was a 
ruling that your department----
    Mr. Sunstein.  I believe you are referring, though I am not 
sure, to the moratorium, which, as I say, we didn't review. If 
you are referring to the rules, then we did review at least 
two----
    Mr. Scalise.  And did you review----
    Mr. Sunstein [continuing]. With full analysis of costs and 
benefits.
    Mr. Scalise.  Did you review the 30-day safety report that 
the President's own scientific commission--because one of your 
challenges or your tasks is to base this on science, and his 
scientists actually said it would reduce safety in the Gulf. 
The scientists said it would reduce safety in the Gulf to 
impose the moratorium. That was in the 30-day safety report 
that came out.
    Mr. Sunstein.  The 30-day safety report isn't a regulatory 
action subject to formal OIRA review.
    Mr. Scalise.  Right. But it was doctored by, from every 
report we have gotten from the climate czar, who is 
conveniently leaving, but that document was doctored to imply 
that the scientists said that the science backed it up when in 
fact the scientists said it actually would reduce safety to 
impose that, and that is what the Department of the Interior 
used as the basis. So do you look at any underlying documents? 
If a department says we are going to make a rule and we are 
going to base it on underlying documents, do you look at those 
underlying documents?
    Mr. Sunstein.  I was about to say I am very grateful that 
is not a yes or no question, but it ended up being a yes or no 
question. If it is not a regulatory action, then we don't have 
formal review though there may be some participation by some of 
OIRA's staff. Our lane is the lane of regulatory action with 
central feature being rules. Reports of that sort, we may have 
some informal----
    Mr. Scalise.  And I know I am out of time, but the 
regulatory actions are costing jobs in the thousands right now.
    Mr. Sunstein.  That is----
    Mr. Scalise.  That is something we will have to follow up 
on.
    Mr. Sunstein.  That is so appreciated, and at the core of 
the small business memorandum and the Executive order is 
insistent focus on job creation.
    Mr. Scalise.  Thank you, Mr. Chairman. I yield back.
    Mr. Stearns.  Mr. Scalise asked for some documents. I think 
you might provide him, at his request, with some of those 
documents.
    Mr. Gardner is recognized for 5 minutes.
    Mr. Gardner.  Thank you, Mr. Chairman, and thank you, Mr. 
Sunstein, again for your testimony before this committee.
    I just want to talk a little bit about how something is 
reviewed under these Executive orders and hoping to have you 
help me understand what takes place. Could you explain briefly 
how your office would review a regulation under Executive Order 
12866 and what are the key components of your review?
    Mr. Sunstein.  OK. Thank you for that. What we would do 
first is explore with other agencies which are going to see the 
rule whether the requirement of consideration of alternatives 
has been met, whether the agency has done a careful analysis of 
costs and benefits, whether the agency has justified its 
reasoned determination that the benefits justify the cost, 
whether the agency has shown that there is a compelling reason 
for federal action, whether the agency has considered reliance 
on the market, reliance on State authority, as some of the 
earlier questions suggested----
    Mr. Gardner.  So it is safe to say that there are basically 
three core components where you identify and assess available 
alternatives to direct regulation dealing with alternative 
forms of regulation and of course getting to impose the least 
burden on society including individuals and businesses?
    Mr. Sunstein.  Yes, and we recently issued a checklist that 
basically puts in a page-and-a-half our essential inquiries.
    Mr. Gardner.  So if you take a real-world example of the 
EPA and greenhouse gas regulations, how did your office use 
those requirements when carrying out that rule review?
    Mr. Sunstein.  Well, the most costly of the greenhouse gas 
rules is the one that there is considerable enthusiasm for, 
which is the fuel economy rule, and what we did for that one 
was to investigate the costs of the rule, the benefits of the 
rule, to think of what alternatives there are in terms of 
stringency, to consider what kind of flexibilities might be 
provided for small business and others, to ensure that there 
was full public participation so that people could comment on 
the options, and to try to come up with the approach that 
maximizes net benefits.
    Mr. Gardner.  And 12866 also says that the underlying 
analysis of costs and benefits of potentially effective and 
reasonably feasible alternatives to the planned regulation 
identified by the agencies or the public, it goes on to say, 
and an explanation why the planned regulatory action is 
preferable to the identified potential alternatives. Did the 
EPA provide and did you review an analysis of the reasonably 
feasible alternatives----
    Mr. Sunstein.  Yes.
    Mr. Gardner [continuing]. For the endangerment finding and 
the subsequent greenhouse gas regulations?
    Mr. Sunstein.  Yes. That is laid out in great detail in the 
regulatory impact analysis and it is also in the preamble to 
the rule.
    Mr. Gardner.  And what alternatives then did the EPA 
provide to you?
    Mr. Sunstein.  The EPA and NHTSA discussed different levels 
of stringency and explained that a more stringent approach 
would run into serious concerns about feasibility and cost.
    Mr. Gardner.  And that was your evaluation of each as well?
    Mr. Sunstein.  We concurred with the evaluation. We thought 
it was a very reasonable evaluation.
    Mr. Gardner.  The testimony that we have heard today from 
members of the committee as well as our colleagues on the other 
side of the aisle seemed to, as the gentleman from Georgia 
stated, be an extreme left to the right. What am I supposed to 
tell my constituents when it comes to those who come to me and 
say these regulations are costing me jobs? I mean, are they 
wrong? Are they wrong that this is costing them jobs? Do they 
not know what they are talking about?
    Mr. Sunstein.  Well, we need to know what regulation it is, 
but I think the first thing you should say to them, as 
reflected in your opening remarks, is that there are two sets 
of concerns. One is about fear of what is coming and the other 
is trouble caused by what is there. On fear of what is coming, 
you have a very strong signal from the President of the United 
States with respect to small business in particular, and that 
is a document----
    Mr. Gardner.  So they are just fearful?
    Mr. Sunstein.  Well, that is not all. I am using your 
words. And that is a legitimate fear that regulation can be 
harmful. So you asked what should you say to your constituents. 
I think you can say that both your subcommittee is on this 
issue and the President of the United States and the 
Administrator of the Office of Information and Regulatory 
Affairs share this concern, and with respect to fear of what is 
coming, we want to work directly with you to make sure things 
are going right rather than wrong.
    Mr. Gardner.  So will you then make the commitment----
    Mr. Sunstein.  Let me say with respect to the current 
regulations, I am very glad you introduced that because the 
president has called for a look-back at existing regulations 
that cause trouble, and you can find things in the very recent 
past where agencies actually have looked back, including the 
EPA----
    Mr. Gardner.  Who triggers the look-back? Who does that?
    Mr. Sunstein.  The look-back is a process that the Office 
of Information and Regulatory Affairs is helping to coordinate.
    Mr. Gardner.  So you will request the look-back of the 
agency?
    Mr. Sunstein.  Well, the President has requested the look-
back.
    Mr. Gardner.  But you will request to the regulatory agency 
what rule to review?
    Mr. Sunstein.  They have to submit plans to us within 120 
days, and we will work closely with them to figure out what 
the----
    Mr. Gardner.  But looking back, you will request those 
rules that are already in effect?
    Mr. Sunstein.  We will be participants in the process of 
figuring out what to look back on. I hope you will be a 
participant also.
    Mr. Gardner.  Will you make a commitment today then during 
this time of economic crisis that you will use your power to 
make sure that the Administration doesn't put its stamp of 
approval on any regulation that costs American jobs?
    Mr. Sunstein.  Well, what I would say if there is----
    Mr. Gardner.  That can be a yes or no question pretty 
easily.
    Mr. Sunstein.  A yes answer would be preposterous. If there 
is a regulation that is saving 10,000 lives and costing one 
job, it is worth it. But what I would make a commitment to do 
is to focus every day on job creation and the urgent need, as 
the President emphasized last night, to square everything we 
are doing with the overriding imperative of promoting 
competitiveness, economic growth, and helping people get good 
jobs.
    Mr. Gardner.  Thank you, Mr. Chairman.
    Mr. Stearns.  I thank the gentleman.
    I recognize Mr. Griffith.
    Mr. Griffith.  Thank you, Mr. Chairman.
    If I might follow up on that question and ask you, are you 
all taking a look at the--when you are looking at that job 
loss, are you taking a look at the benefit not only in this 
country but the cost of sending those jobs overseas? I mean, 
one of the things that we worry about in my district when 
people are talking about regulations, is this product is going 
to be made and sold in the United States, the question is 
whether or not it is made in the United States or whether or 
not it is made in China or some other country where they don't 
have these regulations, and so when you are looking at this, my 
question to you is, are you looking at what other nations are 
doing? Because if we having a small benefit but we are sending 
the job overseas and we are still going to get the product but 
now instead of having the jobs we have gotten a small benefit 
and no jobs, and do you all take that into account when you are 
looking at these regulations, and particularly the EPA?
    Mr. Sunstein.  Yes. We had in our 2010 report to you all, 
our annual report to Congress, a detailed discussion of the 
risk of job loss from regulations that might send jobs 
overseas, and we continue to be very focused on that risk.
    Mr. Griffith.  Well, I understand that, but are you 
marrying the two concepts? OK, we are worried about sending 
jobs overseas but are you also looking at what is the net 
benefit to the United States and then are we looking at what is 
the net benefit in the world environment? Because if the 
benefit is, is that we are going to clean up the air a little 
bit but we are sending all the jobs to China where they won't 
even have the regulations we currently have, aren't we in 
effect, if we aren't marrying those two, so question number one 
of this would be, are we marrying them, and number two is, are 
we in effect making the environment of the world worse in many 
ways if we send these jobs offshore where they won't follow the 
same rules that we have?
    Mr. Sunstein.  That is a great question. It is a fabulous 
question, and it has been raised in the context of some rules 
where it may be that the environment, the world environment is 
actually worse off as a result of what we do. Our basic source 
of what we should consider and lay out is legal requirements, 
so it may be that some of the environmental harms done 
elsewhere in the world aren't really legally relevant. They are 
not part of the statutory apparatus under which we are 
operating. And thank you for letting me elaborate a bit on 
this, but if you had asked me a yes or no question, I would 
have said with slight embarrassment because it is too simple, 
but I would have said yes.
    Mr. Griffith.  And let me ask this because it has just been 
troubling me, and you have heard these questions before from 
some of the other members about the EPA. Its spokesman has said 
that they don't think that this will affect them, in essence, 
and you have made it very clear that yes, the President's 
Executive order does apply and that you all are looking at 
those regulations as well but clearly somehow they got the word 
they didn't. Do you know whether or not there was a private 
``get out of jail free'' card or a wink and a nod that would 
say that they don't have to--we are going to come look but 
don't worry, everything is going to be OK?
    Mr. Sunstein.  I am confident there was no wink or nod or 
side conversation.
    Mr. Griffith.  All right. I yield the rest of my time back, 
Mr. Chairman.
    Mr. Stearns.  I thank the gentleman.
    Mr. Terry is recognized for 5 minutes.
    Mr. Terry.  Thank you, Mr. Chairman, and I appreciate you 
being here today. It has been helpful.
    First of all, I want to comment on a couple of things from 
three of my colleagues on the other side. Do you believe that 
this side of the aisle are regulatory anarchists and want toxic 
materials thrown into rivers and----
    Mr. Sunstein.  If I may say, I think the questions--it is 
an honor to talk with any of you about these things, and the 
questions have been excellent and you deserve an answer, so I 
see no evidence of----
    Mr. Terry.  And you have done well in that area. Let me 
follow up one question from Mr. Markey. Do you think banning 
all use of fossil fuels would yield positive health for human 
beings?
    Mr. Sunstein.  All things considered, no.
    Mr. Terry.  What do you mean by, all things considered? I 
mean, would it be healthier for our people if there were no 
fossil fuels used?
    Mr. Sunstein.  On one dimension, it would be healthier 
because the pollution would go down but the economic hardship 
would be unhealthy.
    Mr. Terry.  And balance is the issue here, so we can't deal 
in extremes is my point.
    Mr. Sunstein.  That is right.
    Mr. Terry.  Cost-benefit analysis is appropriate. And the 
President's Executive Order 13563 includes a cost-benefit 
analysis, correct?
    Mr. Sunstein.  Yes.
    Mr. Terry.  And you testified at the beginning that his 
Executive order does not apply to independent agencies?
    Mr. Sunstein.  That is correct. Following President 
Reagan's lead, really----
    Mr. Terry.  Well, yes, it doesn't. So the FCC--I am vice 
chairman of Communications and Technology, so my focus is with 
the FCC. So the Executive order does not apply to the FCC?
    Mr. Sunstein.  It does not.
    Mr. Terry.  And----
    Mr. Sunstein.  In the small business memorandum, the 
President requests that the independent agencies comply with 
the----
    Mr. Terry.  And has the FCC said they will comply to that 
order?
    Mr. Sunstein.  We have not heard.
    Mr. Terry.  OK. And in that regard, we have talked about, 
or you mentioned that the Executive order would help the 
Administration reach that cost-benefit analysis where you weigh 
both sides, so do you feel as you sit here today in your 
position, not as a law review author but in your capacity today 
that that would beneficial for the Administration if the 
Executive order would apply to the independent agencies?
    Mr. Sunstein.  I believe that cost-benefit analysis is a 
helpful tool for any government actor, and in that sense, I 
believe that its use by the independent agencies would be 
informative.
    Mr. Terry.  Would it be helpful to you in determining 
whether to give advice and counsel from OMB on behalf of the 
Administration through those agencies?
    Mr. Sunstein.  We are very respectful of the independence 
of the Federal Reserve, the FCC, the FTC, which have 
independence as a matter of legal authority. It would be 
helpful to us, I will tell you in one domain that is 
exceedingly important though slightly technical. We provide 
annual reports to you all on the costs and benefits of 
regulation. You have asked us to provide information on the 
costs and benefits of regulations by the FCC, the FTC, all of 
the independents. More often than not, we don't have anything 
to tell you because there isn't a cost-benefit analysis, and--
--
    Mr. Terry.  I would appreciate it. Is there a separate of 
powers or constitutional issue here in your view?
    Mr. Sunstein.  There is certainly an issue in the sense 
that the President's legal authority over the independent 
agencies has occupied many less than fascinating pages of law 
reviews.
    Mr. Terry.  But can that be resolved by congressional 
action or is there are still in your opinion----
    Mr. Sunstein.  You could resolve it.
    Mr. Terry.  I know you are not a Nebraska graduate so we 
have to question your academic history, but nonetheless, in 
your esteemed opinion.
    Mr. Sunstein.  I think the professors at the University of 
Nebraska would agree that whether the independent agencies are 
subject to presidential control is ultimately up to Congress.
    Mr. Terry.  So congressional authority would be necessary. 
Is that something that the President would request of us?
    Mr. Sunstein.  I am not aware that the President has a view 
on that issue.
    Mr. Terry.  And the independent agencies still have to 
provide regulatory plans?
    Mr. Sunstein.  That is correct.
    Mr. Terry.  Did the FCC provide you a regulatory plan that 
included net neutrality in 2010?
    Mr. Sunstein.  I believe so. I know they provided a plan 
but I don't recall its exact ingredients.
    Mr. Terry.  My time is--would you submit that for the 
record?
    Mr. Sunstein.  I would be delighted.
    Mr. Terry.  Thank you.
    Mr. Stearns.  Mr. Terry's time has expired, and the 
gentleman from California, Mr. Bilbray, is recognized.
    Mr. Bilbray.  Thank you.
    Mr. Sunstein, last night the President proposed building a 
high-speed rail system in America that would cover 80 percent 
of the people and do it within 25 years. Do you believe under 
existing regulatory realities that that is possible?
    Mr. Sunstein.  As I noted, the OIRA lane is narrow. We 
review existing regulations, so that is beyond my authority and 
my knowledge base.
    Mr. Bilbray.  OK. Let me just say, as somebody who has 
built a rail system, I think that is where you need to--people 
like yourself need to be able to address that issue. When the 
President proposes something and it is not just money, is it 
legal to do it? And as somebody who has built a rail system, my 
opinion, of somebody who has actually done it, is that no, it 
is not legally possible under existing regulatory structure to 
build the system that the President proposed, which places all 
of us in the challenge of, do we not only talk about how much 
it spends but how much regulatory reform we need to make it 
possible? Do you have any experience in implementing projects 
such as transit, such as sanitation, such as building a 
factory? Do you have any experience in going through the 
regulatory process as a participant of that process?
    Mr. Sunstein.  Any citizen has at least some experience in 
navigating the regulatory process, but my own experience with 
the regulatory process has been a participant over the last 2 
years in making sure that the burdens to which you refer are as 
streamlined and navigable as possible, and the most important 
part of my experience in that domain, something that hasn't 
gotten much publicity--I hope it is an answer to your 
question--is that we quietly asked every agency of the Federal 
Government including the independent agencies for burden 
reduction----
    Mr. Bilbray.  Whoa, whoa, whoa. See, you are asking about 
the process and you are doing it as a regulatory member. I am 
asking you, though, have you been the applicant, have you 
personally been through the gauntlet or have you observed it 
from an administrative point of view?
    Mr. Sunstein.  Does my dad count? My dad had a small 
construction company.
    Mr. Bilbray.  No, your dad doesn't count. We don't allow 
crime of blood or benefits of blood on this issue.
    Mr. Sunstein.  My own career has not been navigating 
regulatory processes but I am trying to make them easier for 
people who do.
    Mr. Bilbray.  As somebody who has been on both sides, this 
is where I see a real problem. If you haven't walked the mile, 
if you haven't gone through the frustration, if you haven't 
seen the obstructionism, you really don't understand how to 
correct the problem appropriately, and I think you and I would 
agree if the plumbing in your house was backed up, you would 
not call a doctor or a lawyer to address that issue, and the 
fact is--I would ask you a question. Let me back off and say 
this. Do you believe there are environmental laws on the books 
today that are hurting the environment with their enforcement?
    Mr. Sunstein.  Well, I do believe there are environmental 
laws on the books today that can be significantly improved from 
both the economic and environmental standpoint.
    Mr. Bilbray.  My question is, do you believe that there are 
environmental regs on the books today that their enforcement is 
actually hurting the environment rather than helping it?
    Mr. Sunstein.  It would be most surprising if the answer 
weren't yes for at least some.
    Mr. Bilbray.  OK. Then my question to you is, when we get 
into these review of assuming that the law's intention is 
actually being fulfilled, wouldn't you agree that that is a 
wrong assumption to make from the get-go, that laws' intentions 
are assumed to be effective rather than questioning are they 
effective so that there is a burden of proof of existence of 
those laws need to consistently be tested for their 
effectiveness and efficiency?
    Mr. Sunstein.  Well, the President gave a clear yes answer 
in the Executive order which said we need to measure the actual 
results of regulations and the look-back is intended to do 
that.
    Mr. Bilbray.  OK. Do you know what the reductions for 
vehicle was projected with the new environmental regs on auto 
manufacturers?
    Mr. Sunstein.  The reduction per vehicle? I don't have the 
number. The reduction of emissions per vehicle?
    Mr. Bilbray.  Yes. What was the goal with that reg? That is 
a pretty big reg. We ought to know what the number was.
    Mr. Sunstein.  Per vehicle? I know that the number----
    Mr. Bilbray.  OK. I will give you per vehicle or fleet 
reduction.
    Mr. Sunstein.  Well, the emission reduction?
    Mr. Bilbray.  Yes.
    Mr. Sunstein.  I don't have the exact number.
    Mr. Bilbray.  I am just asking for a percentage.
    Mr. Sunstein.  The goal is about 36.5 miles per gallon.
    Mr. Bilbray.  And what percentage is that a reduction they 
are looking at?
    Mr. Sunstein.  We would have to do a little arithmetic to 
get it right.
    Mr. Bilbray.  OK. What if I told you that scientists are 
already telling us that we can reduce emissions and auto 
emissions by 22.6 percent and Washington has done nothing to 
consider that cost-effectiveness program while it is putting 
burdens on the production of automobiles in this country?
    Mr. Sunstein.  If I may ask, what is the cost-effective 
program you are----
    Mr. Bilbray.  The cost-effective program is for us to go 
back and look at traffic control operated by government that is 
inappropriate.
    Mr. Sunstein.  Oh, we are interested in any method that is 
cost-effective, cost-justified, to make this situation----
    Mr. Bilbray.  Wouldn't that be the kind of savings that we 
need to do more of with our cost-effective analysis?
    Mr. Sunstein.  It sounds like something very much worth 
investigating, yes.
    Mr. Stearns.  I thank the gentleman, and I ask unanimous 
consent to let Mr. McKinley ask questions. He is on the full 
committee but he is not on the subcommittee. Without objection, 
so ordered.
    Mr. McKinley, thank you for taking the time to come down. 
You are recognized for 5 minutes.
    Mr. McKinley.  Thank you. Thank you, Mr. Chairman.
    Thank you for being here. I have a series of questions more 
specific, and they deal with the Spruce Mine in West Virginia. 
You are familiar with that?
    Mr. Sunstein.  That is not something----
    Mr. McKinley.  Can you give me some volume, please?
    Mr. Sunstein.  OK. Sorry. That is not something within our 
purview. We review regulations and regulatory actions. I 
believe what you are pointing to isn't something that is within 
the domain of the Office of Information and Regulatory Affairs.
    Mr. McKinley.  But this was a retroactive veto. Are you 
aware of that?
    Mr. Sunstein.  I have a recollection from newspaper 
accounts, but this isn't something within our authority. We do 
look at rules that have effects in this area but what you are 
referring to, I don't believe is a regulatory action under 
Executive Order 12866.
    Mr. McKinley.  Were you aware of this veto prior to it 
happening?
    Mr. Sunstein.  No.
    Mr. McKinley.  You were not aware?
    Mr. Sunstein.  No.
    Mr. McKinley.  Do you have any idea why the EPA came to 
that decision?
    Mr. Sunstein.  This is something which would be good to 
engage the people who made the decision for their explanation.
    Mr. McKinley.  Were you aware that the EPA has made this 
determination to do it retroactive based on some new science?
    Mr. Sunstein.  Because this wasn't regulatory action under 
12866, if I am following, this wasn't something that we saw in 
advance in any way.
    Mr. McKinley.  Do you think that it is something that they 
should have checked with you about before they embarked on 
something that was so draconian to West Virginia?
    Mr. Sunstein.  Well, one thing I will say which is that in 
the regulatory domain, anything that is draconian for West 
Virginia or anything else is of keen concern to us, but that 
thing had better be under the new Executive order as under the 
old a regulatory action within the meaning of both documents, 
and so I wouldn't want to comment on the decision or the 
process because my understanding is that this was not something 
that is subject to our review.
    Mr. McKinley.  But you have enough awareness of it, so 
now--and the last question has more to do with, is it possible 
that if the regulatory bodies think that they can do this 
retroactively to a specific site in West Virginia, it is only 
in the Appalachian district they are doing this in the mines 
and they have applied it--the first application has been in the 
mines in West Virginia. If they feel they have the jurisdiction 
to be able to do that, could they not also do that in other 
markets like, for example, the chemical industry?
    Mr. Sunstein.  What I would say in our domain is that 
rulemaking is not retroactive. Actually, the Supreme Court has 
said that rulemaking is presumed not to be legitimately 
retroactive and that under the President's new Executive order, 
not only are rules not retroactive but they also must be 
preceded by a period of public comment so stakeholders can see 
it. Not only that, the agency is supposed to engage 
stakeholders including those who would be adversely affected 
before they even propose a rule. So that is our policy with 
respect to rulemaking.
    Mr. McKinley.  Do you think that this was a violation then 
if they made this retroactive?
    Mr. Sunstein.  Well, as I say, this is not our lane or our 
area so I wouldn't want to speak to it absent authority or a 
full account.
    Mr. McKinley.  Do you think if they--if rulemaking can 
occur like this in a retroactive fashion directed to the coal 
industry, would it not also apply to petroleum, chemical, other 
industries as well?
    Mr. Sunstein.  The Supreme Court said in a decision a few 
years ago retroactivity is disfavored, and to answer that 
question, I want to know what exactly was the situation here 
and whether there was something unique to it that justified the 
action and whether----
    Mr. McKinley.  From what I understand, sir, there was new 
science introduced but that new science was funded by the EPA. 
The study was funded by the EPA. I don't know whether that 
would--I am an engineer. I don't know that that would 
necessarily--if I fund something whether I am--that is new 
science. That is bolstering my cause.
    Mr. Sunstein.  I greatly appreciate the question, and with 
your indulgence I would want to stay away from an area that I 
don't have authority over and that I haven't studied. I would 
say that with respect to the scientific issue generally, under 
section 5 of the new Executive order, there is strong emphasis 
on objective science and scientific integrity, and that is 
something in the rulemaking area which is our domain that we 
are taking exceedingly seriously.
    Mr. McKinley.  Since you have heard of this now, are you 
going to look into it?
    Mr. Sunstein.  If you would like me to, I would be----
    Mr. McKinley.  I would love to have you look into it.
    Mr. Sunstein [continuing]. Delighted to have you put in 
contact with the people who have----
    Mr. McKinley.  I would like to know more about what the 
repercussions of this are. Thank you very much.
    Mr. Sunstein.  And thanks to you.
    Mr. Stearns.  I thank the gentleman. We are going to go a 
second round of questions. I ask for your help here. It is just 
a few more and then----
    Mr. Sunstein.  Are you asking me yes or no questions?
    Mr. Stearns.  Say again?
    Mr. Sunstein.  Are you going to ask me yes or no questions, 
Mr. Chairman?
    Mr. Stearns.  I try. There is something here I want to ask 
you. It is a basic question. How many new government 
regulations have been enacted since your appointment?
    Mr. Sunstein.  I believe the number of final regulations is 
going to be approximate.
    Mr. Stearns.  No, I know.
    Mr. Sunstein.  It is about 500.
    Mr. Stearns.  Five hundred. OK. And do you perhaps have any 
idea how many new regulations will be necessary because of the 
new health care bill and because of the new financial service 
bill?
    Mr. Sunstein.  I don't have that number. I would say that 
our number----
    Mr. Stearns.  If you could venture a guess, that would be 
really fine.
    Mr. Sunstein.  I wouldn't want to venture a guess because 
there is a fact of the matter, and one doesn't want to guess 
about things when the fact of the matter is not difficult to 
find.
    Mr. Stearns.  I am just being a little humorous. I will 
give you a range. Over 5,000 for health care?
    Mr. Sunstein.  It would surprise me if it is that high.
    Mr. Stearns.  And over 5,000 for the financial bill?
    Mr. Sunstein.  It would surprise me if it is that high.
    Mr. Stearns.  OK. Earlier I asked you this question and you 
said yes. The director of OMB produced a set of recommendations 
for a new Executive order within 100 days of the President's 
January 30, 2009 directive. That means that the OMB 
recommendations were sent to the President around May 2009. I 
thought you said yes. Is that correct?
    Mr. Sunstein.  Yes.
    Mr. Stearns.  But the new Executive order wasn't issued 
until January 18, 2011--I had staff check that out--after the 
election. So your yes doesn't seem to comply with the facts.
    Mr. Sunstein.  Ah, OK. No, what the President asked for in 
his memorandum to which you point, the early one, was not a new 
Executive order for issuance. It was recommendations for a new 
Executive order, and what we did was to run processes for a 
significant period under the Clinton Executive order under 
which President Bush also operated and acquired experience. We 
had a public comment period. We got a lot of comments from 
affected stakeholders, some from Members of Congress, there 
were informal and formal communications, and the process of 
acquiring information, learning from the agencies and from our 
own processes what works well and what doesn't ran its course 
such that we were able to issue the Executive order last week.
    Mr. Stearns.  In your testimony today, several times you 
mentioned that ``retrospective'' review will be done of 
regulations. It hasn't been defined in my mind: when does that 
begin? Does it include regulations issued during the Obama 
Administration or are you going back to the Bush 
Administration? Are you going back to the Clinton 
Administration? Maybe you might define what ``retrospective'' 
means.
    Mr. Sunstein.  The Executive order says significant 
regulations that are on the books so everything is fair game.
    Mr. Stearns.  How far does that go back, in your mind?
    Mr. Sunstein.  It could go back to the 1920s if there is a 
regulation that is costly and not helping people.
    Mr. Stearns.  It could go back to FDR?
    Mr. Sunstein.  It certainly could go back to FDR. 
Everything is fair game. Needless to say, regulations that have 
been issued within the last weeks and months wouldn't be the 
first candidates for retrospective review because they were 
reviewed very recently, but we are eager to get ideas from you, 
Mr. Chairman, affected stakeholders, members of the public. We 
really need your help to identify regulations that should be 
revisited, and if they are doing harm but they are from 1945, 
then by all means let us revisit it as much as we would if they 
were doing harm in 1982.
    Mr. Stearns.  I commend you. You are the first person from 
the Administration I have heard that said they were willing to 
go back and look at regulations from FDR, so that is quite a 
statement.
    Now, will this review apply equally to all the agencies or 
just certain agencies that you are focusing on? I imagine that 
looking at all the agencies would be a mammoth job.
    Mr. Sunstein.  As you said, the independent agencies 
following President Reagan's lead are not covered but all the 
executive agencies are covered.
    Mr. Stearns.  You are promulgating vehicle fuel efficiency 
standards. Did the agency consider the cost of additional 
injuries and deaths stemming from the use of lighter vehicles?
    Mr. Sunstein.  Yes, that was investigated with great care.
    Mr. Stearns.  When you talk about this retrospective 
review, how are you proposing to bring in the public? The 
gentleman from West Virginia indicated that we had a company 
that got approval for a license and then retrospectively EPA 
revoked its license. Now the company is in jeopardy after 
investing millions of dollars, and employees will lose their 
jobs. Who would think that that could happen, especially after 
the government gave it a license? How are you getting the 
public to interface with you?
    Mr. Sunstein.  It is a tremendous question, and we love 
your ideas. I will give you a few preliminary thoughts. One 
idea we have had is that the public has a lot more information 
than we do about what rules are actually doing on the ground.
    Mr. Stearns.  I agree with that.
    Mr. Sunstein.  So we need their help. It has happened 
already in this very early time that we have gotten a lot of 
communication from the public. The public has not been silent 
about rules that are causing trouble. I think you can expect in 
the relatively near future one very important Cabinet agency 
going out to the public and asking for ideas about 
retrospective analysis, what rules are causing trouble. I think 
you can also expect a high degree of openness both with respect 
to asking for ideas about rules that no longer warrant public 
approval and also for ventilation of the plans, which are due, 
mind you, in 120 days. I would love it if some of those plans 
would beat that deadline and be out to the public before 120 
days but my expectation is that the plans which will include 
candidates will be made public and there will be a period of 
comment, and as Chairman Dingell suggested, there is a full 
process of comment and review as rules get repealed, so that 
will also involve a high degree of public participation.
    Mr. Stearns.  Thank you. My time has expired.
    Dr. Burgess, second round.
    Dr. Burgess.  Thank you, Mr. Chairman.
    In reference to Dr. Gingrey's question about the regulation 
that went forward without a period of public comment, are you 
aware that there are in fact at least 10 such regulations under 
the health care law, the Patient Protection and Affordable Care 
Act, at least 10 such rules that were created without a period 
of public comment?
    Mr. Sunstein.  Yes. What I am aware of is that some laws, 
and this is one of them, have for some rules time constraints 
that are so severe that the only option is to do what is called 
an interim final rule rather than go out for public comment, 
and that is a result of legal compulsion. What is noteworthy 
about interim final rules, and we have paid a great deal of 
attention to this, is they are interim rules.
    Dr. Burgess.  Well, let me just--you offered just a moment 
ago that you would follow up with us. I actually look forward 
to you joining us again in about 3 months' time. If you would 
be willing to do that, maybe we could talk about some of the 
public comment that has come in on some of the interim final 
rules because it is important that this process be open and 
transparent and that people be able to communicate with the 
regulatory agencies and their government. I know I have heard 
from a lot of providers, hospitals, and patients that this is 
something that they would like to see.
    Mr. Sunstein.  Absolutely. I spend a lot of my own time, 
sad but true, on regulations.gov where you can see those 
comments on interim final rules and I am quite aware that some 
rules have produced a lot of public interest.
    Dr. Burgess.  I provided to you--I apologize that it wasn't 
in the briefing binder but something prepared by the Business 
Council, the Business Roundtable, policy burdens inhibiting 
economic growth. Did you have a chance to just glance at that 
while we were at the vote?
    Mr. Sunstein.  I did glance at it.
    Dr. Burgess.  And I appreciate you being willing to do 
that. Of course, our purpose here today is to talk about the 
regulatory burden and what we might do. This paper was 
prepared, interestingly enough, last June at the request of the 
Obama Administration, difficulty in this economic climate 
creating jobs, and the Obama Administration asked the private 
sector, provide us some guidance on what the Obama 
Administration might do to facilitate job creation. So I think 
that was a good idea. The question I have is, why are we 
ignoring some of the more important things that were put 
forward in that monograph? We have, and I referenced this in my 
opening statement, the new source review aspect that was talked 
about in that paper was concerned about the fact that Texas 
does seem to be singled out for some special attention on 
taking its flexible permitting process and that other States 
that are using this were not subjected to the same constraints 
that Texas has been. Do you think this is helpful in creating a 
climate for job creation that Texas be singled out in this way?
    Mr. Sunstein.  I should say that the document to which you 
point has a lot of concerns and that that has been reviewed 
carefully by relevant officials trying to make sure we do the 
best we can for the country. Singling out any State, in some 
ways Texas in particular, is not a good idea. Everyone should 
be treated similarly. What I would say about the particular 
example, I will give you my understanding, is that 49 States 
all complied with the EPA's permitting rule in the sense that--
--
    Dr. Burgess.  My time is pretty limited. Let me just ask 
you a more specific question.
    Mr. Sunstein.  This was an effort to help people in Texas 
get permits. In order to go forward, there had to be some 
permitting process, and the court approved it.
    Dr. Burgess.  Well, that was under the greenhouse gas 
requirement, but did anyone at EPA consult with the Office of 
Management and Budget or the White House before moving forward 
with taking over the flexible permitting program under the 
Clean Air Act?
    Mr. Sunstein.  That one was something that we were involved 
in, yes, and this was an effort, as I say, to permit people to 
get permits in Texas so they could go forward with 
construction, etc. That is my understanding.
    Dr. Burgess.  And what is the status of that today?
    Mr. Sunstein.  The court has approved it.
    Dr. Burgess.  Let me ask you a question that is in a 
different direction. Do you think there should be any 
legislative effort to regulate broadcasting in the interest of 
democratic principles?
    Mr. Sunstein.  What I would say is that as the 
Administrator of the Office of Information and Regulatory 
Affairs, I am focused on the Paperwork Reduction Act and on the 
recent Executive order and Small Business Memorandum. I think 
you might be referring to some academic writing that might have 
had my name attached to it but academic speculations by anyone 
including yours truly just aren't relevant to the current job.
    Dr. Burgess.  But still, there is some talk about people 
who want to bring back the Fairness Doctrine and some people do 
see that as a restriction on free speech. Would that be 
something that would come through your regulatory agency if 
that occurred?
    Mr. Sunstein.  No, we have no role, and I am on record as 
opposing the Fairness Doctrine.
    Dr. Burgess.  Thank you, Mr. Chairman. I will yield back.
    Mr. Stearns.  Mr. Griffith, you are recognized for 5 
minutes.
    Mr. Griffith.  Thank you, Mr. Chairman.
    If I could go back to some of Congressman McKinley's 
questions relating to the mine closure in West Virginia, and I 
know that what actually may have happened may not be under your 
watch, but wouldn't it be true under the Executive order that 
you would need to look at that? Because as I understood the 
President's comments last night in regard to the salmon, that 
one of the things that he wants to do is to make sure we don't 
have agencies having jurisdiction over what most people would 
think would be the same thing, and in that particular case, 
would you not agree with me that it didn't meet the 
circumstances? The facts didn't meet with what the President 
has said, even in section 1 of his Executive order because for 
that mine, it didn't promote predictability and reduce 
uncertainty, it created more uncertainty for everybody in 
central Appalachia because of that ruling. Would you not agree?
    Mr. Sunstein.  I appreciate the question. I am reluctant to 
say anything critical of colleagues in any agency when I just 
don't know the underlying situation and it isn't something 
within our authority. I can say that EPA in the rulemaking 
domain has been extremely careful and scrupulous about ensuring 
that there is public comment before it goes forward with rules, 
and we had an earlier colloquy about the EPA's insistence 
that----
    Mr. Griffith.  But wouldn't you agree with me that when the 
Army Corps of Engineers signs off on it and says everything is 
fine and then some 18 months to 2 years later the EPA comes in 
and yanks the licenses out, that that does not promote 
predictability and does promote uncertainty?
    Mr. Sunstein.  I would need to know more about the 
particulars. I certainly agree with your emphasis on 
predictability and certainty, which are upfront in the new 
Executive order.
    Mr. Griffith.  And wouldn't you agree that at least on the 
face of it that such action is not plain and easy to 
understand?
    Mr. Sunstein.  Well, I am very concerned about clarity. The 
Plain Writing Act is something that is within our domain. We 
recently issued guidance on it. But I have learned from my 
period in Washington that things that are on the face a certain 
way sometimes aren't fully a certain way and so if you will 
forgive me, I like to be cautious before speaking on that.
    Mr. Griffith.  Well, I understand being cautious but you 
can appreciate that the uncertainty that has now been created 
in the entire region about even attempting to invest money in 
opening up a new mine that has been caused by the actions that 
were taken, and isn't that something that under the Executive 
order that you all should be looking at?
    Mr. Sunstein.  The Administration as a whole is committed 
to promoting certainty, so to look at something that is raising 
concerns along that front is completely appropriate.
    Mr. Griffith.  All right. I thank the gentleman.
    Mr. Stearns.  I thank the gentleman.
    I now recognize the gentlelady, Ms. DeGette.
    Ms. DeGette.  Thank you very much, Mr. Chairman.
    Mr. Sunstein, I really want to thank you for coming and 
testifying today. I found your testimony very illuminating and 
helpful, and I think this subcommittee is going to want to have 
ongoing conversations with you.
    You know, we all agree that unnecessary regulations should 
be repealed and new regulations should not be overly burdensome 
on business or anybody else. I mean, that is a fundamental. 
Listening to the questioning on the other side of the aisle 
today, I kind of realize that there is this assumption that may 
have some vague historic basis but certainly with this new 
Administration and with my colleagues on the Democratic side of 
the aisle, we don't believe in overregulation and we don't 
believe that regulations should be burdensome, especially right 
now with unemployment still over 9 percent. We need to make 
sure that regulations are sensible, that they protect the 
public health and wellbeing and are not overly burdensome.
    I was particularly interested--and I think, so there is 
some thinking since there is a Democratic Administration, we 
are just overregulating, but in fact, when you look at the 
actual facts and statistics, this is not the case. I was 
particularly interested in your comment earlier that the total 
number of rules in the first 2 years of the Obama 
Administration is comparable to the number of rules in the last 
2 years of the Bush Administration, so about the same. And if 
you look at the number for the EPA specifically, which seems to 
be a great concern on the other side of the aisle, the 
comparison between the Administrations is very noteworthy. The 
EPA has finalized or proposed fewer Clean Air Act rules over 
the last 21 months than in the first 2 years of either 
President George W. Bush's Administration or President 
Clinton's Administration. President Bush finalized or proposed 
146 Clean Air Act rules while president Clinton issued only 
115, and President Obama has issued just 87, and frankly, some 
of the Obama Administration's rules, as you can attest, are 
trying to clean up the mess left by the previous 
Administration.
    So let me give an example of that. A federal court threw 
out President Bush's rule to cut toxic mercury emissions from 
power plants in February 2008 because frankly, it was illegal 
under statute. So what it would have done would have been to 
let infants and children vulnerable to mercury pollution. So 
President Obama and his Administration were then forced to go 
back to the drawing board and repromulgate those rules because 
they were illegal the first time.
    And so frankly, I think that, you know, Mr. Stearns and I 
are both eager to talk about regulations that might be 
burdensome and we are eager to work with you and the 
Administration to do that. We were just saying that we would 
welcome suggestions by members on both sides of the aisle and 
we would love to sit down and meet with you and your staff to 
propose anything that we think is overly burdensome because 
frankly, we are not facing a regulatory avalanche. These are 
safeguards for the American public, but I know that you and 
your staff intend to promulgate them in a way that is the least 
burdensome possible. So I just wanted to say that.
    And Mr. Chairman, I just wanted to ask the Majority a 
question, and maybe you know the answer but if not, maybe your 
staff or somebody else can tell me. The Republican have said 
several folks on your side of the aisle have said that an EPA 
spokesman said that the Executive order won't matter with 
respect to the EPA regulations, and I don't know who that--we 
are unaware of any statement like that on this side of the 
aisle, and I am wondering if your staff or the members who said 
that could tell us who that spokesperson was so that we could 
set the Administration straight that the Executive order is 
going to apply to all regulations of agencies within the 
purview of Mr. Sunstein and his staff.
    Mr. Stearns.  We would be glad to provide it for you. It is 
in The Hill, January 18.
    Ms. DeGette.  Thank you. And what is the name of the 
person?
    Mr. Stearns.  Betsaida Alcantara, and the statement said 
that the agency has already been following many of the 
protocols formalized Tuesday, and so we would be glad to give 
The Hill article to you.
    Mr. Sunstein.  May I----
    Ms. DeGette.  Wait a minute. This doesn't say that the 
Executive order doesn't apply to EPA regulations, and Mr. 
Chairman, I would ask unanimous consent to submit this article 
for the record.
    Mr. Stearns.  I would be glad to, by unanimous consent.
    Ms. DeGette.  Thank you.
    [The information appears at the conclusion of the hearing.]
    Mr. Stearns.  But I think we have given you a name. It is 
your interpretation.
    Ms. DeGette.  Yes, you didn't, but it doesn't say anything 
about the Executive order and whether it applies.
    Mr. Stearns.  That is your interpretation.
    Mr. Sunstein.  May I make one brief addition to your 
excellent remarks?
    Mr. Stearns.  Sure.
    Mr. Sunstein.  Which is, if you look at the most expensive 
fiscal year of the last ones, it hasn't been 2010, it hasn't 
been 2009, it was 2007.
    Mr. Stearns.  OK. The gentlelady's time has expired.
    OK. Let me close. Mr. Sunstein, thank you for your patience 
and forbearance while we went and voted. Let me just ask you a 
question to clarify what Ms. DeGette was talking about. In the 
first 2 years of the Bush Administration, how many regulations 
were issued compared to the first 2 years of the Obama 
Administration?
    Mr. Sunstein.  We will have to get that number.
    Mr. Stearns.  OK. That is important because I think what 
she is alluding to--I think those facts are now apples and 
apples instead of apples and oranges.
    Let me also point out that when Ms. DeGette talks about 
deregulation, on this committee we had a cap-and-trade bill we 
passed which the Senate didn't agree with. We had a health care 
bill pass. The Congress under the Democrats' majority had a 
financial bill. They also had bailouts. And so during that 
entire process, when you pass those four major pieces of 
legislation, you are going to have more regulation. And this is 
what I would like to conclude with. You had indicated that 
there should be a comment period for the citizens of this 
country to tell you and OMB that these regulations are killing 
them, and you are saying that you are willing to listen. So can 
I suggest that we sit down with you and we notify our members 
both on the Democrat and Republican side that you have made 
this very auspicious, generous offer to take seriously some of 
the problems? Now, the gentleman from West Virginia pointed out 
that this company has lost its license after getting approved 
by EPA and that is a problem. That is losing jobs. That is 
exactly what I think the President is talking about. So can we 
have your agreement then today that you would sit down with 
this committee at a later date, not in a hearing but an 
opportunity where Ms. DeGette and I can present you with 
regulations that we think indeed are hurting this country and 
should be repealed?
    Mr. Sunstein.  I would welcome that.
    Mr. Stearns.  Well, I think you suggested the idea, so we 
just want to follow up on it.
    Let me conclude by saying members have 10 days to submit 
questions for the record, and if there is no further comment, 
the subcommittee is adjourned, and thank you.
    [Whereupon, at 1:19 p.m., the subcommittee was adjourned.]
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