[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
RULEMAKERS MUST FOLLOW THE RULES, TOO: OVERSIGHT OF AGENCY COMPLIANCE
WITH THE CONGRESSIONAL REVIEW ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
REGULATORY REFORM,
COMMERCIAL AND ANTITRUST LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 28, 2017
__________
Serial No. 115-25
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available on the World Wide Web: http://judiciary.house.gov
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COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin JERROLD NADLER, New York
LAMAR SMITH, Texas ZOE LOFGREN, California
STEVE CHABOT, Ohio SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California STEVE COHEN, Tennessee
STEVE KING, Iowa HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona Georgia
LOUIE GOHMERT, Texas THEODORE E. DEUTCH, Florida
JIM JORDAN, Ohio LUIS V. GUTIERREZ, Illinois
TED POE, Texas KAREN BASS, California
JASON CHAFFETZ, Utah CEDRIC L. RICHMOND, Louisiana
TOM MARINO, Pennsylvania HAKEEM S. JEFFRIES, New York
TREY GOWDY, South Carolina DAVID CICILLINE, Rhode Island
RAUL LABRADOR, Idaho ERIC SWALWELL, California
BLAKE FARENTHOLD, Texas TED LIEU, California
DOUG COLLINS, Georgia JAMIE RASKIN, Maryland
RON DeSANTIS, Florida PRAMILA JAYAPAL, Washington
KEN BUCK, Colorado BRAD SCHNEIDER, Illinois
JOHN RATCLIFFE, Texas
MARTHA ROBY, Alabama
MATT GAETZ, Florida
MIKE JOHNSON, Louisiana
ANDY BIGGS, Arizona
SHELLEY HUSBAND, Chief of Staff and General Counsel
PERRY APELBAUM, Minority Staff Director and Chief Counsel
------
Subcommittee on Regulatory Reform, Commercial and Antitrust Law
TOM MARINO, Pennsylvania, Chairman
BLAKE FARENTHOLD, Texas, Vice-Chairman
DARRELL E. ISSA, California DAVID CICILLINE, Rhode Island
DOUG COLLINS, Georgia HENRY C. ``HANK'' JOHNSON, Jr.,
KEN BUCK, Colorado Georgia
JOHN RATCLIFFE, Texas ERIC SWALWELL, California
MATT GAETZ, Florida PRAMILA JAYAPAL, Washington
BRAD SCHNEIDER, Illinois
C O N T E N T S
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SEPTEMBER 28, 2017
OPENING STATEMENTS
Page
The Honorable Darrell Issa, California, Chaiman, Subcommittee on
Courts, Intellectual Property, and the Internet................ 1
The Honorable David Cicilline, Rhode Island, Ranking Member,
Subcommittee on Regulatory Reform, Commercial and Antitrust
Law, Committee on the Judiciary................................ 2
WITNESSES
Mr. Paul J. Larkin Jr., Esq., Senior Legal Research Fellow,
Institute for Constitutional Government, The Heritage
Foundation
Oral Statement............................................... 4
Mr. Todd F. Gaziano, Esq., Executive Director, Pacific Legal
Foundation DC Center
Oral Statement............................................... 6
Mr. Jason H. Carter, Executive Director, Virginia Cattlemens
Association
Oral Statement............................................... 8
Prof. Rena Steinzor, Esq., Edward M. Robertson Professor of Law,
University of Maryland Francis King Carey School of Law
Oral Statement............................................... 9
Additional Material Submitted for the Record
Article submitted by the John Conyers Jr., Michigan, Ranking
Member, Committee on the Judiciary. This material is available
at the Committee and can be accessed on the Committee
Repository at:
http://docs.house.gov/meetings/JU/JU05/20170928/106432/HHRG-
115-JU05-20170928-SD001.pdf
RULEMAKERS MUST FOLLOW THE RULES, TOO: OVERSIGHT OF AGENCY COMPLIANCE
WITH THE CONGRESSIONAL REVIEW ACT
----------
THURSDAY, SEPTEMBER 28, 2017
House of Representatives
Subcommittee on Regulatory Reform, Commercial and Antitrust Law
Committee on the Judiciary
Washington, DC
The Subcommittee met, pursuant to call, at 9:30 a.m., in
room 2141, Rayburn House Office Building, Hon. Darrell Issa
presiding.
Present: Representatives Issa, Collins, Buck, Handel,
Cicilline, Conyers, and Schneider.
Staff Present: Dan Huff, Counsel; Andrea Woodard, Clerk,
and Slade Bond, Minority Counsel.
Mr. Issa. Good morning.
The Committee will come to order. And the Subcommittee on
Regulatory Reform, Commercial and Antitrust Law meets today,
and without objection, the Chair is authorized to declare a
recess at any time.
We welcome everyone here today for a hearing on
``Rulemakers Must Follow the Rules, Too: Oversight of Agency
Compliance with the Congressional Review Act.''
And now, I recognize myself for a short opening statement,
which the title of this hearing was pretty much an opening
statement.
Two things are clear. First, the Congressional Review Act,
or CRA, requires agencies to submit new rules to Congress,
underlined, before they can take effect.
Second, in too many cases agencies have not complied with
the submission requirement. The question is, what will we do
about it? Thousands of existing rules were never submitted to
Congress, some may be noncontroversial and require little
special attention. Some are major rules. Certainly, these major
rules could now be submitted for approval or disapproval, and
many of them are not submitted because they are known that they
would be disapproved of.
Many have fiscal consideration, and we, Congress, are
paying the price, and our economy is paying the price. Consider
the sum cost of compliance. Industries in some cases, State and
local agencies, may already have spent huge sums complying to
otherwise--implementing rules which are in fact not really
rules. Disapproving these rules now would serve little purpose
since the compliance has already occurred, and in many case,
the sum cost is most of the cost of compliance. On the other
hand, we are likely to be--there are likely to be newer and
particularly burdensome rules that warrant disapproval and need
to be eliminated now.
I am eager to hear the witnesses and their views on whether
or not my opening statement was accurate, whether or not they
believe that compliance has been substantially complied with.
And particularly, I would like to hear things about Section 805
of the law, which states, determination, finding, action, or
omission under the chapter shall be subject to judicial review.
Others maintain that 805 only focuses on judicial review of
Congress's action. And that is a particular question for today.
In closing, one of the challenges we face is that agencies'
power to intimidate is undeniable. What they will call not a
rule, but if you don't comply with, you stand in peril of other
actions, is undeniable.
I will close by saying, we are just now, after years of
seeing something called Operation Chokepoint, the cut-off
making relationships with thousands of lawful businesses,
simply because banks were afraid and intimidated by regulators
without ever the proposal of a rule, and only a letter that
served to intimidate the banks. We know the power of
regulators. In the case of banking, they can take away your
very business.
So with that, I will recognize the Ranking Member for his
opening statement.
Mr. Cicilline. Thank you, Mr. Chairman. And welcome to our
witnesses, thank you for being here this morning.
Today's hearing concerns agencies compliance with the
Congressional Review Act. Enacted in 1996, this law requires
agencies to physically submit every legislative and non-
legislative rule, about 4,000 to 5,000 per year, to the House,
the Senate, and the Government Accountability Office. Although
this reporting requirement may have made sense in the age of
dial-up Internet, it would be charitable to refer to it as
government waste today.
It is painfully obvious that requiring agencies to
physically submit thousands of rules each year, in triplicate
by courier no less, is a waste of American taxpayers' hard-
earned money. The House parliamentarian has previously
testified in support of narrowing this requirement, observing
that this, quote, mass of paperwork, end quote, may not be
optimal for Congressional oversight.
Moreover, agencies are already required to publish the text
and legal authority of every rule in the Code of Federal
Regulations, which is also online and easily accessible. But
this is only the tip of the iceberg when it comes to my
concerns of the Congressional Review Act. This outdated law has
been a failed experiment in Congressional oversight, and an
unmitigated disaster for the economic security and safety of
hardworking American families.
For more than 20 years, only one rule has been disapproved
under the Congressional Review Act. But in the past several
months, the Republican Congress has used the Congressional
Review Act to undue 14 critical protections for hardworking
Americans with little notice or debate. For example, earlier
this year, President Trump nullified a landmark privacy
protection for consumers through this process. This essential
rule would have simply required that Internet providers must
get permission from consumers before selling their personal
information, such as their browsing history and geolocation.
How many jobs were created by abolishing this requirement?
None, of course.
When asked if repealing the privacy rule would create jobs
or stimulate the economy, the White House Director of
Legislative Affairs conceded that, and I quote, ``Not each one
of these can you look at and say it is necessarily a job
creator.'' End quote. So if not to create jobs, stimulate the
economy, or help working families, why eliminate this
commonsense rule?
Special interest groups have spent more than a billion
dollars in lobbying and campaign expenditures in opposition to
these rules, according to a report by Public Citizen. There can
be no mistake that this for-profit President has no interest in
putting Americans ahead of corporations and special interests.
And now the Trump administration wants to use the Congressional
Review Act to take away Americans' right to a day in court.
This week the Senate is considering a resolution to
disapprove the consumer financial protection bureau's
arbitration rule, which restores consumers' rights to use the
justice system to hold corporations accountable for predatory
conduct. Backed by the deep pockets of the financial industry,
the Trump administration has out waged the claim that taking
away this right would protect consumer choices. As if losing
your day in court, thanks to the fine print of take it or leave
it contracts, is any choice at all. But it should be no
surprise that President Trump is siding with the banks against
the American consumers.
President Trump's top banking regulator is the same
attorney who represented Wells Fargo and other banks that
defrauded their own customers. And when these megabanks aren't
too busy opening fake checking accounts and draining their own
customers' bank account through manipulated overdraft fees,
they are cutting checks to upend protections against forced
arbitration.
What is more, once these rules are abolished through the
CRA process, agencies are expressly prohibited from adopting
these rules again in substantially the same form, absent a
Congressional override. And that is why I have introduced the
Sunset, the CRA, and Restore American Protections Act, or the
SCRAP Act, to address this blatant abuse of process, and to
immediately restore these rights.
The Congress must be committed to a legislative process
that is accountable, transparent, and open. While, Congress may
pass new laws following a change in administration, it is
imperative that we debate these proposals in hearings and
markups. We cannot run roughshod over a regular order by
vacating rules that have gone through years of notice and
comment through a politicized vote.
In closing, I hope my colleagues will join me in supporting
the SCRAP Act. I thank the witnesses for appearing here today,
and yield back the balance of my time.
Mr. Issa. Thank you. And I would note that as I read the
opening statement, and I apologize, I didn't have a chance to
read it beforehand. Apparently, I did not say no before
determination, which explains looks on some people's faces,
understandably.
Mr. Issa. We now introduce our distinguished panel. The
witnesses have submitted written statements, which will be
entered into the record in their entirety. And I ask that you
please use 5 minutes or so to summarize or to extend those
written statements.
To help us stay within the time, we will use a light system
that we all understand. Green means you may keep going. Yellow
means go really fast. And red, of course, we know, means you
will get a ticket from the Chairman.
Pursuant to the rules, I would ask all four of you to
please rise to take the oath.
Do you solemnly swear or affirm that the testimony you are
about the give will be the truth, the whole truth, and nothing
but the truth?
Please be seated. Let the record reflect that all witnesses
answered in the affirmative.
We now introduce our distinguished panel, Mr. Paul Larkin,
Senior Legal Research Fellow at the Institute for
Constitutional Government/The Heritage Foundation.
Mr. Todd Gaziano, the Executive Director of the Pacific
Legal Foundation Center here in D.C.
Mr. Jason Carter, Executive Director of Virginia
Cattlemen's Association.
And Ms. Rena Steinzor, at the Edward M. Robertson,
Profession of Law, at the University of Maryland Francis King
Carey School of Law.
Welcome. And we are now even. My script was wrong once, and
I misread it once, so we are tied. With that, we will go down
the row. Mr. Larkin.
TESTIMONY OF PAUL J. LARKIN JR., ESQ., SENIOR LEGAL RESEARCH
FELLOW, INSTITUTE FOR CONSTITUTIONAL GOVERNMENT, THE HERITAGE
FOUNDATION; TODD F. GAZIANO, ESQ., EXECUTIVE DIRECTOR, PACIFIC
LEGAL FOUNDATION'S DC CENTER; JASON H. CARTER, EXECUTIVE
DIRECTOR, VIRGINIA CATTLEMENS ASSOCIATION; AND PROFESSOR RENA
STEINZOR, ESQ., EDWARD M. ROBERTSON PROFESSOR OF LAW,
UNIVERSITY OF MARYLAND FRANCIS KING CAREY SCHOOL OF LAW
TESTIMONY OF PAUL J. LARKIN JR., ESQ.
Mr. Larkin. Mr. Chairman, Ranking Member, members of the
Subcommittee, I want to thank you for the opportunity to appear
and testify today.
I do appear only in my own behalf, not on behalf of the
Heritage Foundation. I had a few brief points I wanted to make,
just discussing the breadth of the Act, but I think I will make
just one, and then respond directly to the questions that the
Chair and the Ranking Member have--or at least the concerns
they had.
The basic point is that Congress wrote the CRA as a
substitute, as close as possible, for the old practice of the
legislative veto. Congress found that that was one of the
valuable ways of gaining oversight and restraining
administrative agencies. They are necessary.
Congress could not decide all of the issues that agencies
have to decide, whether a particular drug should be approved,
or a particular substance is hazardous waste and the like. But
whenever you delegate power to someone else there is a risk
they will go too far, or they will make mistakes or abuse it,
whatever. So the legislative veto was a chance to rein that in.
And then when the Supreme Court held that unconstitutional,
Congress passed the Congressional Review Act to make it as
close as possible to the legislative veto. But there were
hundreds of legislative vetoes, and there is only one
Congressional Review Act.
So to make sure that the Act could substitute adequately,
it had to be written in extremely broad language. For example,
the term rule covers virtually anything that an agency says
about the law or policy, because otherwise you would have only
a narrow range of issues before the Congress to consider. So
that is an extremely broad term, and the statute itself works
in an extremely broad and sometimes strict manner to make sure
that Congress can review these points.
Now, I know the Chair asked about the judicial review
provision. The judicial review provision makes it clear that
certain types of actions and decisions are not subject to
judicial review, but it doesn't make clear by whom those
actions or decisions must be made.
Now, there are several parties that play tertiary roles in
this process, the GAO, the Chairmen of Committees, individual
chambers of Congress. But the three most important bodies are,
Congress, the President, and the rule issuing agency. It is
clear that Congress did not want its own actions to be subject
to judicial review. They are not subject to judicial review
under the Administrative Procedure Act, and they weren't added
in back in the CRA.
The President is also not subject to judicial review under
the Administrative Procedure Act, and Congress did not add him
back in either. That leaves the rule issuing agency. And the
oddity about excluding the rule issuing agency from compliance
with the CRA, and immunizing them against judicial review,
makes that an utterly reasonable interpretation. That was the
focus of what Congress wanted to do. It wanted to be able to
veto, if you will, the agencies' actions. And so it wanted to
have that opportunity. But private parties should, too, and
here is why.
An agency must act according to law. And not acting
according to law, acting in a lawless manner, essentially
raises a constitutional claim because it violates the due
process clause. It is quite clear, the Supreme Court has very
strictly interpreted statutes that purport to prevent people
from raising constitutional claims, and nothing in the text of
this statute indicates that it sought to prevent a private
party from going to Federal Court and saying the agency's law
is not in effect because they did not comply with the CRA, and
therefore, for them to apply it against me would render what
they are doing unconstitutional.
Now, I know the Ranking Member was concerned about the
written submission requirement, and that is an easy fix. Just
tell the agencies to send it by email. There is nothing in the
statute that requires only transmission via hard documents. So
you can send it by email. That can be done in a rather easy
manner.
The Ranking Member questioned whether the Act was useful
because it only had, prior to this Congress, been used once.
But prior to this Congress, there wasn't really an opportunity
to use it. It is most valuable at the beginning of an
administration when you have a President that succeeds a
President from a different party, and when you have a majority
of the incoming President's party in that office--in Congress,
because then they have a chance to look back and decide whether
old rules should be thrown out, or rules that were never even
submitted should be thrown out.
So you had that in the beginning of the Bush
administration, but given what happened in 9/11, everything got
focused on terrorism. Plus, he wasn't committed in the same way
the current President is to regulatory reform. President Obama
was not either. So this really is the first chance for the CRA
to be used effectively. And the fact that it hasn't before,
therefore, shouldn't take away from any force that it may have.
I will save the rest of my points for whatever questions I
am asked, and I am glad to answer any questions you may have.
Thank you.
Mr. Larkin's written statement is available at the
Committee or on the Committee Repository at: http://
docs.house.gov/meetings/JU/JU05/20170928/106432/HHRG-115-JU05-
Wstate-LarkinP-20170928.pdf
Mr. Issa. Thank you. Mr. Gaziano.
TESTIMONY OF TODD F. GAZIANO, ESQ.
Mr. Gaziano. Good morning distinguished members of the
Subcommittee. And thank you for allowing me to testify as well.
Like my good and learned friend, Paul, I am just going to
try to summarize a few of the most important points from my
written testimony, and end with the same answer to the
Chairman's question.
Point one. The number of rules that were wrongly not sent
to Congress is very difficult to quantify exactly. But all the
relevant evidence does suggest that it is a very significant
problem that OMB and others should try to nail down. There were
three government studies that all concluded that there were
either hundreds or thousands of rules per year that were
published in the Federal Register alone that weren't submitted
to Congress.
Now, as the Chairman indicated, many of these are
inconsequential, but the number of economically significant
rules that weren't submitted is a surprising number, even if
that is the tip of the iceberg. A Brookings Institution study
this year concluded there were at least 348 economically
significant rules that were published in the Federal Register,
that were not--apparently not delivered to Congress.
But the Brookings study grossly underestimates the number,
and here is why. There were many very important, crucial rules,
life-changing rules that were published in the Federal Register
that the Brookings study didn't try to quantify. Also, there
are many economically significant and non-economically
significant rules that are never published in the Federal
Register. I have provided some powerful examples of these
significant or important guidance documents that were never
published in the Federal Register, and to my knowledge, no one
has attempted to count them.
Point two. The significance of the noncompliance problem is
grave, regardless of the exact numbers. As the Chairman
indicated, rules not submitted to Congress are not lawfully in
effect, even if they have been published. And yet, regulatory
agencies regularly invoke them and use them to open
investigations, enforcement proceedings, and even criminal
prosecutions.
Now, it isn't responsive to that injustice to say, ``oh
well, we don't need to worry about guidance documents,'' as
some scholars have said, because this administration or some
future administration can change them easily. Here is the
truth: It was unjust and unlawful to apply them in the past,
and it is even more unjust and unlawful to apply them currently
to current enforcement proceedings.
Beyond that, the rules got no input from the general
public, and the Congress has still been denied an opportunity
to review them.
Point three. OMB is in the best position to direct an
orderly review by the agencies to find their own rules that
weren't delivered to Congress. OMB should provide better
instruction than in the past as to what rules really are
covered by the CRA. And OMB can also provide instruction on how
that orderly review should be prioritized and take place. This
will also help solve the compliance problem going forward.
Point number four. When agencies do find rules that were
never submitted to Congress, they should consult their
enforcement official and DOJ about whether ongoing enforcement
actions can proceed, and that is because, even if these rules
are belatedly sent to Congress, they weren't in effect during
the conduct that is being investigated. Very few, if any, rules
can be applied retroactively to past conduct.
Point Number five. And it may be my last. The agencies,
when they discover rules that weren't submitted to Congress,
should go back to OMB and get some advice. Now, with advice
from OMB and direction, they essentially will have four
options.
Option number one is to send a bunch of them to Congress to
finally lawfully go into effect, if necessary, with an
instruction that the President stands behind them.
Option two is to deliver at least some rules to Congress
with the recommendation that Congress disapprove them, with a
statement, hopefully, that the President will sign such a
disapproval. There won't be very many in this category, and for
good reasons I explain in my written testimony, but mostly
because the administration should take care of most bad rules
themselves rather than flooding Congress with them. But there
are some reasons why they may want to send some that I have
explained.
Option number three is that they post a notice that rules
are being reconsidered that were never sent to Congress, but
are not in effect until that review is finished, and unless and
until they are delivered to Congress, because that is what the
law requires.
And the final option is for them to post a notice, maybe
after some review, that certain of the rules are being modified
and terminated. Now, the process to do that will vary depending
on the type of rule.
Those are my prepared points, but I want to second the
statement of my colleague, because the legislative history also
makes this distinction he talked about (the legislative history
of the CRA): that Congress' determination and OMB and the White
House's determination are not subject to judicial review, but
of course, the courts remain open to hear a due process
constitutional challenge that rules that were invalid are being
unlawfully enforced against them. And although I have always
known that was true, it is the brilliant scholarship of my
friend, Paul Larkin, that I think has explained in detail why
that is so.
Mr. Gazino's written statement is available at the
Committee or on the Committee Repository at: http://
docs.house.gov/meetings/JU/JU05/20170928/106432/HHRG-115-JU05-
Wstate-GazianoT-20170928.pdf
Mr. Issa. Thank you. Mr. Carter.
TESTIMONY OF JASON H. CARTER
Mr. Carter. Good morning. My name is Jason Carter, I am
from a multigenerational cattle, row crop, and tobacco family
in central Virginia, and I studied animal science at Virginia
Tech. I am currently the Executive Director of Virginia
Cattlemen's Association, and prior to joining VCA, I worked for
Virginia Tech as an animal science extension agent.
Currently, I serve on advisory boards for the Virginia
Department of Environmental Quality, and participate in the
stakeholder group invested in the progress of the Chesapeake
Bay program. Thank you Subcommittee Member Issa and Ranking
Member Cicilline for allowing me to testify today.
American cattle producers own and manage more land than any
other segment of agriculture or any other industry for that
matter. Since our livelihood is made on the land, being good
stewards not only makes good environmental sense, it is
fundamental for our industry to remain strong. We strive to
maintain environmentally friendly operations, and work closely
with local and State regulators to implement practices that
improve water quality for our farms and families.
The Congressional Review Act enacted to prevent agencies
from overstepping their roles. It provides Congress the chance
to consider whether an agency's actions align with
Congressional intent. This is a vital tool in maintaining our
democratic system of checks and balances, but it was not used
in the EPA's 2010 Chesapeake Bay TMDL determination.
When the EPA assesses a water to be impaired, TMDLs are
developed to determine the total amount of pollutant that can
be released while improving overall water quality. TMDLs allow
States to effectively monitor the status of the impaired water
body and assess its condition, then develop and implement Best
Management Practices to improve water quality over time.
The effectiveness of TMDL programs depends entirely on each
States' ability to efficiently monitor and assess waterbodies,
then develop and implement BMPs. The EPA's Chesapeake Bay TMDL
program is the largest of its kind, and it is unique, in
addition, to setting watershed limits for nitrogen, phosphorus,
and sediment. The EPA established multiphased Watershed
Implementation Plans, or WIPs. By requiring WIPs, EPA's
position in the regulatory process, in many aspects, has
supplanted the role of State government.
While, in theory, the TMDL program should allow States
autonomy to address impaired waterbodies, the EPA has created a
federally mandated program that threatens State authority. Lack
of certainty in the TMDL program keeps State regulators on edge
because EPA can change compliance standards with little notice.
For example, the State of Virginia currently implements
programs to comply with Phase II of the Chesapeake Bay WIP,
which set goals for nitrogen, phosphorus, and sediment
reduction. By EPA's own scorecard, the State has met or
exceeded these expectations. However, despite our good
scorecard, we don't know what is coming in the next phase of
the Chesapeake Bay WIP, and this creates an uncertainty in our
industry. Without a clear and achievable path to the finish
line, producers are again put in a predicament. Additionally,
without knowing Phase III goals, we could potentially lack the
resources necessary to meet those demands.
Not only does the Chesapeake Bay TMDL, as currently
implemented, present significant Federalism issues, but it does
so in a wholly inefficient manner. The State-specific design
TMDL programs allow State regulators to tailor BMPs so they are
effective. Applying the same standards to the six-State
Chesapeake Bay region does simply not achieve the goal
efficiently.
For example, in Virginia, operations are encouraged to
fence cattle out of streams through 100 percent cost share
programs. This means that because the fences are our Best
Management Practice, the costs have been fully reimbursed with
taxpayer dollars. While there are many cases in which these
fences contribute significantly to improving water quality,
there is tremendous pressure on State and local regulatory
agencies to fund projects with the most linear feet of stream
exposure, regardless of a project's overall impact.
Among the worst examples of taxpayer waste that I have
witnessed was a fencing project that cost over $100,000 that
was designed to keep less than 12 cows out of a stream. How
does that make sense, especially in a time when our Nation is
trillions of dollars in debt and looking for ways to reduce
cost? I am confident that had Congress had the chance to review
this action, it would have determined that the EPA's Chesapeake
Bay TMDL, along with its watershed implementation plan, placed
an undue burden on all stakeholders.
Putting States in the driver's seat for the Chesapeake Bay
improvement is vital to ensure long-term program success. An
one-size fits all approach that accompanies top-down regulation
simply does not work in the agricultural industry.
I appreciate the opportunity to visit with you today, and
thank you for your time.
Mr. Carter's written statement is available at the
Committee or on the Committee Repository at: http://
docs.house.gov/meetings/JU/JU05/20170928/106432/HHRG-115-JU05-
Wstate-CarterJ-20170928.pdf
Mr. Issa. Thank you. Ms. Steinzor.
TESTIMONY OF RENA STEINZOR, ESQ.
Ms. Steinzor. Thank you for inviting me. My fellow
panelists are all great fans of the Congressional Review Act, I
am cast in the role of the skunk at the picnic. In fact, I urge
you to consider repealing the law. That option represents a
golden opportunity for Congress to demonstrate a renewed
commitment to its authority and responsibility for overseeing
the regulatory state.
Wait just a minute, my fellow panelists are thinking, the
woman has everything backward. The whole point of the CRA is
for Congress to demonstrate its oversight chops. Didn't the
House and Senate just finish choke-chaining the wanton over-
regulation committed by the Obama administration? I agree that
the 115th Congress demonstrated rapid decision-making by
killing 14 rules in a period of just a few weeks. But that
rapid fire state of activity attracted more negative publicity
than regulatory issues have achieved in many years.
The story line of the coverage most media outlets was that,
at the behest of special interest lobbyists, Congress killed
rules that seem to make a lot of sense. The impression left was
that Congress is controlled by money, not rational well-
researched debate on the issue. That impression has an
extraordinarily negative effect on our democracy. According to
real clear politics, 14.3 percent of Americans approve of the
Congress, and 73.8 percent disapprove.
The repeal rules included prohibitions on very bad conduct.
That conduct makes no sense to the average American, but it
will now be perfectly legal because the rules were repealed. It
includes--the conduct includes bribing foreign governments in
the developing world to win drilling rights for offshore oil;
allowing severely disturbed people, disabled by their mental
illness, to buy guns; shearing the tops off mountains and
dumping the debris in streams that serve as the drinking water
source for numerous Appalachian communities; giving employers
with egregious labor violations unfettered access to government
contracts; depriving Internet users of privacy online, as
Ranking Member Cicilline mentioned; sanctioning the continued
use of inhumane hunting practices for predators that inhabit
public lands in Alaska.
Judging from American history and the first-among-equals
placed the Framers assigned Congress in Article One of the
Constitution, measures and enhance our great national
legislature's ability to make the laws cannot be easily
dismissed, especially at a time when the public frustration
with Congress is disturbingly low. But as many knowledgeable
commentators, most recently, Senator John McCain, have pointed
out on a bipartisan basis, Congress was, has been, and will be
great again only when it returns to the regular order, a phrase
connoting the use of all the tried and true mechanisms created
over two centuries, including public oversight, where Members
take the time to discuss the issues at hearings in committee
and on the floor.
My fellow panelists will probably spend most of their time,
they just did, excoriating agencies for failing to file reports
as required by this CRA. A very small cottage industry has
emerged that extolls the possibility that Congress could claw
back rules and guidance documents that have been in effect for
years. The business community has greeted these suggestions
with a deafening silence.
Although, companies may appreciate the opportunity to wipe
rules off the books before they have started to comply with
such requirements, those same dynamics do not apply to rules
and guidance that everyone has learned to live with. Advocates
of the claw back have very few examples to offer of rules that
were not sent to Congress, and yet were important enough to
trigger enforcement action. The only reliable study of the
number done by Curtis Copeland, a long time expert in
regulatory affairs, who used to work for you in the
Congressional Research Service, found a very small number of
rules that were not noticed correctly.
Thank you, again, for the opportunity to testify today. I
would be pleased to answer any questions.
Ms. Steinzor's written statement is available at the
Committee or on the Committee Repository at: http://
docs.house.gov/meetings/JU/JU05/20170928/106432/HHRG-115-JU05-
Wstate-SteinzorR-20170928.pdf
Mr. Issa. Thank you. I recognize myself. And I will go in
reverse order. Professor, you are not the skunk at the picnic.
It is important to have those who would not agree with us
represented, and I commend the Chairman for making sure that we
always have that.
Ms. Steinzor. Thank you.
Mr. Issa. You mentioned regular order. Now, in 200 years,
230 years of creating it, but in fact, when our founding
fathers began, they didn't use rulemaking per se, they would
consider things from the executive branch, and they would in
fact pass laws, they would create regulations.
So, in a purist sense, it is Congress' obligation, which
perhaps our low approval rating is that we don't do that, but
rather we send it over to the executive branch so that so many
problems, perceived or real, are solved by the executive branch
because we have not done so.
Is that a fair statement?
Ms. Steinzor. Yes.
Mr. Issa. So if that is the case and we determine that a
rule is inconsistent by a majority of the House, majority of
the Senate, and the signature of the President, from a historic
standpoint, that is completely regular order to wipe it away.
And a hearing to wipe away a law is different than a hearing to
create a law.
Wouldn't you agree that the founding fathers believed that
to limit somebody's liberty, which regulations inherently do,
is not a difficult question--or is a difficult question, while
not to inhibit is a fairly easy question. Isn't that sort of a
principle of history and law?
Ms. Steinzor. What troubles me about the Congressional
Review Act is that the rules are brought to you by K Street
lobbyists.
Mr. Issa. Okay. And I am going to cut you off. And I
apologize, but I didn't see any rules that I was brought to by
K Street lobbyist. But I will mention that K Street lobbyist
work for companies who are affected by rules or individuals.
And we have two organization which are not K Street lobbyists,
but they are think tanks that often bring to us what they think
are bad rules.
Mr. Carter, I guess, you don't live on K Street, but I
guess you are a K Street lobbyist in that sense. But they are
brought to us by people, or their representatives, that find a
rule objectionable. And we are talking about CRA, but we are
really not talking about CRA. We are talking about rules that
were never presented.
Mr. Carter is talking about implementation of things under
guidance, which means they have never gone through the process
of regular order to create a law, because a rule is just a law.
And the process of creating a law by the executive branch was
set by Congress when we passed the underlying law and gave the
agency authority.
And so I think, Mr. Larkin, since you were the senior
person here for a second. When we give the authority to make a
law to the executive branch, and we describe regular order,
which the professor was very good to say she wanted regular
order, and they don't comply with every aspect of that set of
rules we set up, then it is they who have not complied with
regular order. Wouldn't that be the case?
Mr. Larkin. Yes. Absolutely true.
Mr. Issa. Okay. We are dealing with guidance--I want to ask
one quick question. There has been a lot to-do about the 14
overturned regulations. Weren't all 14 of those midnight rules,
rules that in an 8-year term were passed in the last 60 days of
the last administration?
Mr. Larkin. Not entirely. There were some that went back to
June. So----
Mr. Issa. But that was 60 legislative days. That is the
law.
Mr. Larkin. Oh, yes. Yeah. Not calendar days.
Mr. Issa. They weren't calendar days, but they were
pursuant to this procedure under the CRA for midnight rules.
So none of the work of the first seven and a half years of
the Obama administration was second-guessed, only the ones that
waited effectively until, for the most part, after the
Presidential election, certainly after his last midterm.
Correct.
Mr. Larkin. Correct. But to clarify and make sure you
understand. If a rule was not submitted, you can go back beyond
that period.
Mr. Issa. No, I understand that. Let me just ask you a
question for each of you on the panel.
If, in fact, the executive branch has not complied with the
law and has what they would call a rule in which the law does
not recognize as a rule because they have not complied with the
right requirement, is it reasonable for this body to insist the
Department of Justice not use those in any pleadings or in any
other way in order to bring enforcement.
In other words, if Congress is thinking about a law and
thinks it passed it, but it never actually had the vote, we
couldn't--they couldn't enforce that law, they can't enforce
what we are thinking about. Is it fair to say that this
Department of Justice should in fact stop using any regulation
or guidance which in fact has not gone through the process to
make it a law under the laws that we gave to the executive
branch?
Mr. Gaziano. Yes. I have explained in my written testimony
in more detail, but you are absolutely right. It is unjust even
if they then belatedly submit that to you, because there are
ongoing investigations and any proceedings that are looking at
conduct that happened in the past. And it is also a violation
of due process to try to retroactively apply an invalid law.
Mr. Issa. Yours is a yes, and they can't correct it.
Mr. Gaziano. Well, they can correct it prospectively, going
forward, and give you a chance to change behavior, but not
retrospectively.
Mr. Issa. Mr. Carter.
Mr. Carter. I would agree that looking at the context of
the implementation of the rule now would need to be weighed
heavily in the process, but yes.
Mr. Issa. Professor?
Ms. Steinzor. I am not aware of any final significant rules
that have been brought as the basis--used as the basis of an
enforcement action that were not noticed.
Mr. Issa. Okay. So--wait a minute. Not noticed. You mean
not noticed to Congress?
Ms. Steinzor. Yes.
Mr. Issa. Okay. So it is your view that the answer to my
question could be yes, but you don't know of any examples, is
that correct? Because my question was, should they stop using
them? And you are saying they have never used them.
Ms. Steinzor. I believe that this is a solution in search
of a problem, and that what we are mostly talking about here is
guidance documents. Guidance documents can be changed with a
stroke of a pen.
Mr. Issa. No, I understand.
Ms. Steinzor. The Justice Department can change
prosecutorial policy.
Mr. Issa. No, no, no, actually, the Justice Department is
bound to enforce the law. My question, and I want to be narrow
about it, Professor, so that you can answer it, which I think
you tried to, is, if in fact something is not the law because
they have not in fact complied with the requirements to make a
regulation law, which would include all guidance. Should, for
example, guidance be allowed to be part of a prosecution?
I think you answered that it never has.
Ms. Steinzor. Right.
Mr. Issa. So if it never has, the question still remains,
should it ever?
Ms. Steinzor. I do not think that guidance documents alone
would justify a prosecution.
Mr. Issa. Okay.
Ms. Steinzor. You would have to have a statutory authority
or a regulatory authority, not a guidance document.
Mr. Issa. Okay. So I am going to summarize quickly. Only
statutory authority or regulations which have been submitted to
Congress pursuant to the law should ever be used as part of a
prosecution, thus Mr. Carter and his cohorts that actually try
to feed us, would in fact be limited in their defenses to that
which they have been properly noticed, either by Congress'
action or by a rulemaking process pursuant to Congress?
Ms. Steinzor. I certainly agree that Mr. Carter should
receive notice through a rule-making process.
Mr. Issa. Thank you both. Mr. Cicilline.
Mr. Cicilline. Thank you. Mr. Gaziano, you said in your
written testimony that the CRA requires physical submission of
every rule, and without this requirement, ``that CRA would be
unworkable.'' Why is the physical reporting of rules necessary,
and why does the omission of that make the CRA unworkable?
Isn't that requirement a complete waste of taxpayer money?
I don't want to spend time a lot of time on this. A
reporting requirement--let me just finish. I am going to spend
very little time on this reporting requirement because I
actually think there is a much more fundamental challenge at
this hearing--presents the idea that we are focused on this,
what I consider to be an arcane reporting requirement is
mystifying me.
But you say without it, it is unworkable. On what basis
would it be unworkable without a physical reporting
requirement?
Mr. Gaziano. I appreciate the question, but you are wrong
about my testimony. I never said that a physical delivery is
required. The word ``physical'' will not appear in my
testimony. What I say is that delivery is required, but not
physical. I agree with Mr. Larkin, the physical delivery
requirement is not in the statute.
You can search for the statute; it is not there. It has
been an administrative process between the House and the White
House. When you receive a treaties and when you receive
nominations, you receive them in a certain way. That can be
changed, but I have actually looked at the current procedures.
They actually allow a facsimile delivery. That was the
electronic delivery of 1996. You could have your computer and
your printer receive a fax delivery. And so, it is in effect,
in certain circumstances, but that could be expanded. And I
agree with Paul that it would be an easy administrative fix.
They should expand that electronic delivery requirement.
And I am so glad that you have given me an opportunity to
correct the record that physical delivery is not required in
the statute. And in my view, it should not be. The delivery
itself----
Mr. Cicilline. Thank you. I have limited time. Thank you.
In 2008 and in 2009, we in fact passed a bipartisan bill, the
Congressional Review Act--Improvement Act by voice vote under
suspension of the rules that would have repealed the CRA's
physical submission requirement and designated the GAO as the
recipient of the rule. So I think there is an--I not asking you
a question, I am making a statement I think there is an easy
fix to this. What I like to spend the balance of my time on is
what Professor Steinzor really referenced, is the very damaging
impact of the current use of the CRA. And so, Professor, I
would ask you if you could begin. This has been something which
has not been used--was used a single time up until the Trump
administration, the Republicans took over the House and the
Senate in this most recent period.
Why do you think it has become so prevalent that this is
being used? What do you think are the long term consequences of
that? And do you think it undermines, not only confidence in
the Congress, but undermines a process that values
transparency, and thoughtfulness, and deliberation, that we
hold up as hallmarks of the legislative process?
Ms. Steinzor. Thank you for asking that question, which is
a very good one.
I think that the rules that were repealed, vetoed, had all
be years in the making. I am absolutely confident that Mr.
Carter, who I agree is an American businessman and entitled to
respect, had representation in all the rules that affect him
and that concern him.
So the solution for Congress, if it doesn't want to trust
the agencies anymore, is to take back all that work and spend
as many hours and years of careful research, deliberation,
proposal, comment, revision, negotiation, more comments, and
finally, issuance of a final rule and litigation of that rule,
all of that work that is now being done by the civil service,
by experts, is being done that way because Congress asked them
to do it.
And the opportunity for the public to comment, for any
stakeholder who is affected is quite extensive. The problem
with the CRA is that with the snap of a finger, without even
any discussion on the floor, the rule hits the trash can. And
there are people that have invested a lot of time in figuring
out how to comply with the rule. There are competitors who may
have already started to comply with the rule.
And what the CRA upends that entire process. And the reason
it is happening during the Trump administration is that this
President is more hostile to the idea of regulations than any
President I have watched in 45 years in Washington. He is
just--he is exceptional.
Mr. Cicilline. Thank you. And I thank you for the example
that you provided, which I think, sadly, shows this direct sort
of response to corporate powerful, well-financed special
interests, who are sort of being rewarded for their
participation in the Senate electoral activities. And I think
the other thing that is worth noting is those things--those
rules that were undone, were specifically to protect the
health, safety, privacy, and well-being of the American people.
And I will take issue with my good friend, the Chairman of
this Committee, who said regulations inhibit your liberty,
inherently. That is exactly reversed. Regulations protect you.
They protect your freedom to enjoy safe clean drinking water.
They protect your freedom to be protected from dangerous
products.
So this notion that regulations inhibit your freedom, which
seem to form the basis of this use of this CRA, it is just the
reverse.
Regulations, when done properly, protect the health,
safety, and well-being of the American people. And I think we
saw in the coverage, as you indicated, the coverage of those 14
CRA actions where you can draw a direct line between the hugely
powerful corporate special interests on one side and the well-
being of the American people on the other, and sadly, in the
dark of night, on an expedited calendar with no hearings, no
debate, or a teeny bit of debate, I should say, 5 minutes, I
think, those actions were reversed that were very often the
result of months and months and sometimes years of thoughtful
deliberations, receipt of evidence and testimony. That does
not, it seems to me--it seems to me, that does not speak well
of the Congress of the United States.
And I thank you for your testimony. I yield back.
Mr. Issa. And if my gentleman Ranking Member would engage
in a colloquy quickly, I do not disagree for a moment that
regulations provide for safety, attempts to cure inequities,
and they are important.
What I attempted to say, and hopefully we can come to a
common ground, is that we in Congress are always weighing
safety, security, through government action, versus the basic
freedom of a complete laissez-faire. And that we, as
government, have to balance these two, people's liberties,
which are inherent, and then Government's role to protect the
people from damages that those liberties to an extreme might
cause.
So I was not attempting to say that somehow that all
regulations are bad. But, hopefully, we all look at that
balancing act. May not always agree on where the balance is,
but that is truly the balancing act that we are asked to do.
Wouldn't you agree?
Mr. Cicilline. I would agree, Mr. Chairman. And that is why
I think the best forum to do that very difficult balancing is
in the context of a full deliberative legislative process, that
includes hearings and testimony and evidence, and not using the
CRA to summarily reverse months and sometimes years of exactly
that.
You are right, we do have to strike the right balance. So
let's do it in a forum where that is likely to happen
successfully and properly, and the CRA does just the opposite.
Mr. Issa. I thank the gentleman for the colloquy. With
that, we go to the gentlelady from Georgia, Mrs. Handel.
Mrs. Handel. Thank you, Mr. Chairman. You know, in Georgia
we were one of the States--the State with the highest bank
closures during that crisis. And what I observed was an
extraordinarily punitive perspective from the regulators, with
no desire, no willingness, to work with banks that had been
long time community banks. Individuals lost everything. They
not only lost their livelihood, their lives were destroyed.
I agree with my esteemed colleagues that we need to find
the balance, when it comes to the regulatory climate, but I
would submit that there was an overreach on that over the past
8 years.
A couple of questions. So, Professor Steinzor, your central
criticism of the CRA is that it--that its time limits force a
rush Congressional action. Yet, you also, in your testimony,
bemoaned the gridlock and how long it takes Congress to do
anything. So I find a little contradiction there.
So I wonder would you support extending this CRA's 60-day
period for introducing disapproval resolutions to something
longer, perhaps 120 days, to allow for that greater
deliberation, without continuing the state of gridlock that you
so eloquently focused on in your testimony?
Ms. Steinzor. I would not support that. I think that the
CRA is an invitation to repeal rules without considering what
the problem is that they are intended to address, and the best
way to do that would be to look at the statutes that authorizes
the rule. And there are many solutions to Congressional
gridlock. I don't think the CRA is one of them.
Mrs. Handel. Thank you. Mr. Gaziano, you testified about
the vast number of rules that went without proper notice and
proper review or submittal to Congress that had vast and
significant economic consequence, yet, Profession Steinzor
expressed a decidedly different point of view.
Could you give us a couple of additional examples of that?
Mr. Gaziano. Yes. Thank you very much, Your Honor, for the
question. And in my testimony I talk about certain of the
guidance documents and other rules that weren't submitted that
are probably decisive in the cases that Pacific Legal
Foundation is bringing. One of them that I described in my
written testimony is the Alaska Supplement to the 1987 EPA and
Army Corps Wetlands Manual. And that supplement declared
Alaskan permafrost to be a navigable water of the United
States, that is likely to be subject to its jurisdiction. And
it requires our client, the tin cup company, to go to them hat
in hand with hundreds of thousands of dollars and either seek a
permit or go through years of evaluation over whether frozen
earth is a navigable water of the United States, under threat
of criminal penalties and civil penalties.
And that particular guidance is going to be the decisive
weight, because the Clean Water Act language would not allow--
our client would have no notice that frozen ground is
potentially navigable water because it is ridiculous. It is
not. But we still are litigating. And we just got a District
Court judgment. We are going to have to go up to the Court of
Appeals, but that is just one of the three or four other
ridiculous examples.
So we had another case that had to do with a Rapanos
guidance that misinterpreted a case Pacific Legal Foundation
won in the Supreme Court, but it was also never delivered to
Congress. So in a trial that we finally settled last summer, we
filed a motion with the judge to not consider the Rapanos
guidance, because our client would have won without that. And
the DOJ opposed that motion. Do you know why? They said, well,
that guidance wasn't a rule enough to send to Congress, but
that our client and the judge had to defer to it. That is an
example of what is going on.
Mrs. Handel. Thank you for that. One last question, and
quickly, for Mr. Larkin. There has been some talk today about
the fact that the CRA has only been used one other time
previously. I guess I was raised that just because something
was never done or it was only done once, that didn't completely
make it irrelevant.
So I would like to hear your perspective on whether or not
the fact that it has only been used once is relevant or not.
Mr. Larkin. It is not.
Mrs. Handel. Perfect. Thank you. Because my time is up.
Mr. Chairman, I yield back.
Mr. Issa. You shocked me. The answer was so succinct, I
wasn't ready to be given back time. I thank the gentlelady.
With that, we go to the Ranking Member of the full Committee,
the distinguished leader from Detroit, Michigan, Mr. Conyers.
Mr. Conyers. Thank you, Chairman Issa. And I welcome the
gentlemen on the panel. And I am going to ask unanimous consent
to put into the record the article authored by myself, our
ranking colleague, Mr. Cicilline, and Hank Johnson.
Mr. Issa. Such a distinguished document would always be
placed without objection.
This material is available at the Committee or on the
Committee Repository at:
http://docs.house.gov/meetings/JU/JU05/20170928/106432/
HHRG-115-JU05-20170928-SD001.pdf
Mr. Conyers. Thank you. The title is Serious Risks
Presented by the Anti-Regulatory Agenda of the 115th Congress
and the Trump administration. Just to give you a little clue as
to where it is going. I thank you.
Mr. Issa. Just for the record, this was published in the
Harvard Journal?
Mr. Conyers. Yeah. The Harvard Journal on Legislation.
Mr. Issa. I don't know if that impresses you, but it
impresses me.
Mr. Conyers. I don't remember how many articles I have had
in the Harvard anything. But this was a very important one, and
it is very much related to the subject matter that brings us
here today.
Professor Steinzor, I would like to raise this with you.
Mr. Larkin and Mr. Gaziano argue that if a rule was not
properly submitted to Congress, even as far back as 1996,
Congress may still use the Congressional Review
Administration--still use the CRA's expedited procedures to
repeal it.
What is your take on that position?
Ms. Steinzor. I disagree with it. I think it is a very bad
idea. I have heard from virtually every industry person that I
have ever discussed these issues with that certainty and
stability of the regulatory system is critical. So if you now
have a situation where, through some administrative oversight,
in a very small number of cases, you can take a rule and kill
it, even though everybody has spent all the effort and the
money to comply. I think it would be the antithesis of the
certainty and stability that business interests tell us they
need.
I also want to say that, again, Curtis Copeland, who is a
renowned student of and expert in the regulatory process, found
that, of 1,000 rules, at most 50 had been omitted from notice.
Significant rules. And in many cases, notice had been provided,
and someone had lost it in the agencies that received it.
So I think the Brookings' study is problematic. It is now
being peer-reviewed by people at Harvard, of all places. So I
think that this idea that there are a lot of these rules sort
of lurking around, persecuting people, that Congress never had
an opportunity to veto is drastically overstated. And I
appreciate----
Mr. Conyers. So what would this kind of sweeping
interpretation have on businesses that have already complied
with rules that have been in effect for years?
Ms. Steinzor. It would be very unfair to the people that
behave the best, the businesses that made the effort to comply.
It would reward, in essence, scofflaws, if there were
significant rules that I have not heard about.
I mean, the example that Mr. Gaziano gave about the so-
called WOTUS rule, that rule is being reevaluated as we speak
by Administrator Pruitt at EPA. I don't agree with what he is
doing, but I don't challenge his authority to go through the
process and change that document.
Mr. Conyers. Now, some have suggested that as many as 800
rules have not been received by either the House of Congress or
the GAO. Do you think this is an overstatement, or what do you
make of that assessment?
Ms. Steinzor. It is not what Curtis Copeland's carefully
done reliable study shows, and I attached that study to my
testimony and hope it will be included in the record. He really
is a very thoughtful and diligent and careful researcher, and
he did a much more reliable job than Brookings did, which is
why we are having the Harvard peer review.
Mr. Conyers. Thank you. This year, Congress disapproved of
14 separate rules on party line votes in both chambers. No more
than five House Democrats voted in favor of any resolution of
disapproval. In the Senate, 11 of the 14 passed resolutions
were opposed by at least 47 Senators.
Now, how did the Congressional Review Act become such a--
let's call it a partisan instrument?
Ms. Steinzor. Well, I think that people were quite shocked
at the very aggressive use of it. I know I was. We expected
perhaps a handful of rules might be challenged. We also know
that President Trump was about to take over the government and
would have enormous power to change rules through the normal
notice and comment process. So this kind of--it was a
blitzkrieg is really what it was.
Mr. Conyers. Yeah.
Ms. Steinzor. And people were very surprised. And the rules
were idiosyncratic, and some of them seemed so sensible. Like
Mr. Cicilline mentioned, internet privacy. That is something
that consumers really support as an idea.
Mr. Conyers. Now, currently, virtually all rules, including
ministerial rules issued by the Coast Guard to open or close
bridges, must be physically submitted to the House, Senate, and
Government Accountability Office, the GAO. Are you concerned at
all that the scope of this requirement may be overbroad?
Ms. Steinzor. Yes. I think agencies are very confused about
what is and isn't covered. Literally, thousands and thousands
of guidance documents are issued every year. They can be
speeches, they can be letters, they can be guidance in the form
of memos, and any of those documents can be changed by an
agency if it just says, we discovered new information. We
changed our mind. We want to go in a different direction. But
having to sort through all that paperwork and decide how much
to send up here, it is literally everything the government does
that it writes down, almost.
Mr. Conyers. Should the Congressional Review Act apply only
to major rules that have big economic effect, maybe exceeding
$100 million or so?
Ms. Steinzor. Well, I am urging you to repeal the
Congressional Review Act.
Mr. Conyers. Okay.
Ms. Steinzor. If it were to continue, which I think would
be a mistake, I think targeting significant rules defined as
you did would make some sense. Those rules are already
scrutinized within an inch of their lives by the White House
and economists and all the stakeholders, as I mentioned.
Mr. Conyers. I thank you very much----
Ms. Steinzor. Thank you very much.
Mr. Conyers [continuing]. For your testimony.
Thank you, Mr. Chairman.
Mr. Issa. Thank you.
Mr. Buck.
Mr. Buck. Thank you, Mr. Chairman.
Professor Steinzor, I was just wondering if you were
shocked by the Obama administration's seizure of \1/7\ of our
economy in the Affordable Care Act or whether you were shocked
by the regulations--the crippling regulations in the--or the
crippling law in the Dodd-Frank, that that absolutely decimated
community banks in this country, and whether you were shocked
that the American people reacted by putting Republicans in
charge of the United States House in 2010 elections, the United
States Senate in 2014, and elected President Trump in 2016.
Were you shocked by those things?
You said you were shocked by the use of the CRA in this
Congress.
Ms. Steinzor. I was shocked by President Trump's election.
Mr. Buck. I am going to yield the rest of my time to the
Chairman, Mr. Issa.
Mr. Issa. Thank you, Mr. Buck. I will be brief.
First of all, since we are on the professor, you do not
like the CRA. But if we were to be constitutional in the
strictest form and require full debate, would you then believe
that the REINS Act would, by definition, be the answer since,
under the REINS, R-E-I-N-S, it requires that these kinds of
major rules--and it is limited to those--be submitted to
Congress; that Congress, in fact, hold hearings and then give
an up or down? In other words, that Congress do its job after
agencies have determined what they would like to have.
Ms. Steinzor. Mr. Chairman, the REINS Act would say no rule
goes into effect until you approve it. And with all due
respect, I think you have so much work to do that I would
really worry about you.
Mr. Issa. Okay.
Ms. Steinzor. Because you have appropriations, you have
disaster relief, you have tax reform. I think we wouldn't have
any rules, because you wouldn't have time to look at them.
Mr. Issa. Well, you know, what is interesting is that
everyone has this theory that Congress is too busy to look at
what affects Mr. Carter's life.
You said something that I thought was pretty profound in
answering Mr. Buck and other questions, which was that you
talked about thousands of guidance and how--and you said how
they can be changed. You didn't say as a whim, but you implied
as a whim, that they get changed, we make mistakes. In other
words, every time a speech is made, Mr. Carter's people have to
figure out whether that affects their lives, and they have to
make changes.
And so, Mr. Gaziano, you talk about a specific case that I
think the professor alluded didn't occur or couldn't occur. You
talk about a case in which very clearly at the court---- at the
High Court, you had to argue that it was, in fact, a non-
regulation regulation that was what tipped the scale for your
very much being there, something that undoubtedly was millions
of dollars in cost to your--let me phrase it--huge amounts of
hours and would have been millions of dollars to your client.
Mr. Gaziano. The Federal Government was asking for $45
million from our client for engaging in farming, plowing his
field. But if I misspoke, the regulation--the non-regulation,
the one the Justice Department said it didn't have to give you
but that the judges had to defer to and our clients had to
defer to, was based on a Supreme Court case we won. But it was
just in the trial--the Federal District Court that we were
proceeding.
Mr. Issa. Okay. So it wasn't precedent. But, in fact, a
justice department during your tenure of practicing law told
you----
Mr. Gaziano. It was a couple months ago.
Mr. Issa. Okay.
Mr. Gaziano. A couple months ago.
Mr. Issa. A couple of months before or after January 20 of
this year.
Mr. Gaziano. We filed a motion in limine to ask the judge
not to rely on this guidance that was never delivered to
Congress and isn't in effect, and the DOJ opposed the motion.
Mr. Issa. Okay. So under the Trump administration, as we
speak, under this Attorney General, today, or at least weeks
ago, we are still seeing the position of the Department of
Justice that they will enforce things which have not complied
with the rulemaking laws and that, in fact, they will stick by
those, and they will not allow those to be taken away.
So what you are saying is, under Attorney General Sessions
and his Department of Justice and President Trump's
administration, they are still, in fact, using non-regulations,
regulations that do not comply with the law, to win cases that
can cost clients a lot of money.
Mr. Gaziano. Thank you for allowing me to clarify that too.
That is happening, but I have to confess that I don't think it
has reached the highest level yet. And your hearing will help.
Trial attorneys--you know how aggressive trial attorneys are.
And until they get the message from on high--and I don't think
it is----
Mr. Issa. Well, this is an administration that has no U.S.
attorneys that have been politically appointed. This is an
administration in which the bureaucracy is in place. These are
nonpolitical people. They are, by definition, neither Obama's
people nor Trump's people. But the Department of Justice is
abusing clients like yours today, as we speak, by enforcing
things which have not complied with the law, calling them
sufficient, even though they are only guidance or unpublished
to the Congress regulations. That is your sworn testimony here
today.
Mr. Gaziano. It is absolutely the case they are relying on
them and in cases where I think it will make the difference.
Mr. Issa. Well, I am out of time to get to a vote. I want
to thank all of you for your testimony, and particularly for
your testimony, which I will personally make sure gets to the
Attorney General so it not just be at the prosecutor level who,
in his zealous desire to get a win, is using that which is
pretty clearly here not something that is law. Even the
professor, who believed it wasn't being used, I believe was
supportive that it shouldn't be used alone.
I want to thank you. And we stand adjourned.
[Whereupon, at 10:44 a.m., the Subcommittee was adjourned.]
[all]