Mr. Chairman, I yield myself such time as I may consume. I want to begin our discussion this morning with the reference that Federal regulations impose an annual cost of $1.75 trillion on business. I would like the Members to know that the…
Mr. Chairman, I yield myself such time as I may consume.
I want to begin our discussion this morning with the reference that Federal regulations impose an annual cost of $1.75 trillion on business. I would like the Members to know that the reference made to this study is the Crain study. I'd like to use the name so that you can track exactly what is being said about it.
The study was never intended to be used as a decisionmaking tool. Who says this? They said it as a preface to the study itself. And for the benefit of the 433 other Members besides myself and the chairman, I am going to put this in the Record and also make it available to all of our colleagues on the Judiciary Committee.
The Crain study was never intended to be used as a decisionmaking tool, and the Congressional Research Service, our own operation, criticized much of the Crain study's methodology and noted that the authors of the Crain study themselves told the Congressional Research Service that their analysis was not to be a decisionmaking tool for lawmakers or Federal regulatory agencies to use in choosing the right level of regulation. So every time somebody mentions this study again on the floor, I am going to refer them to the Congressional Research study, which has never been disputed or declaimed by anybody.
In no place in any of the reports do we imply that our reports should be used for this purpose--that's the Crain study people themselves. That's not the Congressional Research study; that's the authors. And here is the Congressional Research study that I would like to introduce into the Record at this time.
[From the Congressional Research Service]
Analysis of an Estimate of the Total Costs of Federal Regulations
(By Curtis W. Copeland, Specialist in American National Government,
April 6, 2011)
[CRS Report for Congress, Prepared for Members and Committees of Congress--Congressional Research Service, 7-5700, www.crs.gov, R41763]
Summary
Some policy makers have expressed an interest in measuring
total regulatory costs and benefits (e.g., the Congressional
Office of Regulatory Analysis Creation and Sunset and Review
Act of 2011, H.R. 214, 112th Congress), and estimates of
total regulatory costs have been cited in support of
regulatory reform legislation (e.g., H.R. 10, the Regulations
from the Executive In Need of Scrutiny (REINS) Act, H.R. 10,
112th Congress). However, measuring total costs and benefits
is inherently difficult. This report examines one such study
to illustrate the complexities of this type of analysis.
A September 2010 report prepared by Nicole V. Crain and W.
Mark Crain for the Office of Advocacy within the Small
Business Administration (SBA) stated that the annual cost of
federal regulations was about $1.75 trillion in 2008. This
cost estimate was developed by adding together the estimated
costs of four categories or types of regulation: economic
regulations (estimated at $1.236 trillion); environmental
regulations ($281 billion); tax compliance ($160 billion);
and regulations involving occupational safety and health, and
homeland security ($75 billion). Some commenters have raised
questions about the validity and reliability of this
estimate.
For example, Crain and Crain's estimate for economic
regulations (which comprises more than 70% of the $1.75
trillion estimate) was developed by using an index of
``regulatory quality.'' One of the authors of the regulatory
quality index said that Crain and Crain misinterpreted and
misused the index, resulting in an erroneous and overstated
cost estimate. Other commenters have also raised concerns
about using the index to estimate regulatory costs, and about
the regression analysis that the authors used to produce the
cost estimate. Crain and Crain said that they believe they
interpreted and used the regulatory quality index correctly.
Crain and Crain's estimates for environmental, occupational
safety and health, and homeland security regulations were
developed by blending together academic studies (some of
which are now more than 30 years old) with agencies'
estimates of regulatory costs that were developed before the
rules were issued (some of which are now 20 years old).
Although the agency estimates were typically presented as
low-to-high ranges, Crain and Crain used only the highest
cost estimates in their report. The Office of Management and
Budget has said that estimates of the costs and benefits of
regulations issued more than 10 years earlier are of
``questionable relevance.''
Crain and Crain's estimate for the cost of tax paperwork
was based on data from the Internal Revenue Service and the
Tax Foundation, but OMB data indicate that the number of
hours of tax paperwork may be much higher than Crain and
Crain's estimate. On the other hand, the authors' assumptions
regarding the cost of completing the paperwork may be too
high. A threshold question, however, is whether tax paperwork
should be considered in the same category as regulatory
costs. OMB does not include tax paperwork in its annual
reports to Congress.
Crain and Crain said they did not provide estimates of the
benefits of regulations, even when the information was
readily available, because the SBA Office of Advocacy did not
ask them to do so. OMB's reports to Congress have generally
indicated that regulatory benefits exceed costs. Crain and
Crain said their report was not meant to be a decision-making
tool for lawmakers or federal regulatory agencies to use in
choosing the ``right'' level of regulation. This report will
not be updated.
* * * * *
Policymaking and the Crain and Crain Estimate
As noted at the beginning of this report, Crain and Crain's
estimate that federal regulations cost $1.75 trillion in 2008
has been cited as evidence of the need for regulatory reform
legislation. However, Crain and Crain told CRS that their
report was ``not meant to be a decision-making tool for
lawmakers or federal regulatory agencies to use in choosing
the `right' level of regulation. In no place in any of the
reports do we imply that our reports should be used for this
purpose. (How could we recommend this use when we make no
attempt to estimate the benefits?)'' \103\ ---------------------------------------------------------------------------
\103\ E-mail to the author from Nicole V. Crain and W. Mark
Crain, March 7, 2011. ---------------------------------------------------------------------------
As Crain and Crain suggest, information on regulatory costs
alone, whether for individual rules or for all rules in the
aggregate, provides only one piece of information that
Congress and other policymakers can use in determining how to
proceed. For example, even if all federal regulations did
cost $1.75 trillion in 2008 (which at least some commenters
believe may not be correct), if the monetized benefits of
those regulations were determined to be greater than those
costs, then policymakers may conclude that those costs were
(in the words of Executive Order 12866) ``justified.'' On the
other hand, if the monetized benefits of federal regulations
were estimated to be less. than the estimated costs,
policymakers may reach another conclusion, or may decide to
examine any non-monetized costs and benefits of
those rules. But a valid, reasoned policy decision can only
be made after considering information on both costs and ---------------------------------------------------------------------------
benefits.
The Center for Progressive Reform is another study that notes that the $1.75 trillion cumulative burden cited by the study fails to account for any benefits of the regulation. I am going to, at the appropriate time, introduce that into the Record.
The Congressional Research Service notes that the study's methodology is seriously flawed with respect to how it calculated economic costs.
So I would urge the Members to be aware of what I am going to do during this debate the next time somebody names this study without naming the name of the study and the fact that it was put together by Mark and Nicole Crain, commonly called the Crain study.
The Congressional Research Service notes that the study's methodology is seriously flawed with respect to how it calculated economic costs. The study relied on international public opinion polling by the World Bank on how friendly a particular country was to business interests and ignored actual data on costs imposed by the Federal regulation in the United States. The Congressional Research Service concluded that a valid, reasoned policy decision can only be made after considering information on both costs and benefits of regulation.
The next thing I would like to do is examine what seems to be a political or legislative strategy that is being used in this debate. You see, there are three bills that are antiregulatory bills--and there's no question or dispute about that--designed to slow or halt rulemaking and give industry more opportunities to disrupt the rulemaking process of the Federal Government. H.R. 3010, which we are taking up today, is one of them. H.R. 527, which we took up yesterday, is another one of them. H.R. 10, the king of all regulatory antiregulatory bills, is coming up next week, the REINS Act, which, for the first time in American history, determines that the Congress must also approve the rules of all the agencies, of which there are some 40 or 50.
And for the benefit of every Member of the Congress, I am getting together every agency that would now be involved and that would have to have their rules--believe it or not, this is not ``Saturday Night Live''--would come through the Congress. Can you imagine what that would do to our schedule?
These bills are blatantly and unhesitatingly designed to slow down and even halt all Federal rulemaking, thereby threatening public health and safety by undermining the agencies' ability to address a whole range of issues.
What about food-borne illnesses? What about toy safety? What about infant formula safety? What about financial security?
All three antiregulatory bills also give industry more opportunities to disrupt the rulemaking process. The bill under consideration now, for example, requires formal rulemaking and expands opportunities to challenge agency action in court. As if they need any help from the corporate lawyers that are all lined up to do their work at the present moment, but no, we want to give them more opportunities to go in court, as if they can't figure it out for themselves.
H.R. 527 of the previous day does this by expanding the use of small business review panels. The measure coming up next week would require Congress to approve all major rules. Not only do we have to do that, but we have to do it within 70 legislative days before they could take effect, effectively, of course, allowing industry to intervene in Congress to stop a rule.
Mr. Chairman, I reserve the balance of my time.
Mr. Chairman, I yield 5 minutes to the gentleman from Tennessee, Steve Cohen, the ranking member of the Subcommittee on Courts, Commercial and Administrative Law.
Mr. Chairman, I am pleased to yield such time as he may consume to the former chairman of the Education and Labor Committee, the ranking member currently, the gentleman from California, George Miller.
Mr. Chairman, I yield myself 30 seconds.
The AFL-CIO has backed up what the ranking member, Mr. Miller, of Education and Labor has said. They warn that H.R. 3010 would upend more than 40 years of labor, health, safety and environmental laws, and threaten new needed protections. It would cripple the regulatory process and make protecting workers and the public secondary to limiting costs and impacts on business and corporations.
American Federation of Labor and Congress of Industrial
Organizations,
Washington, DC, November 28, 2011.
Dear Representative: When the Congress returns from the
Thanksgiving break the House is expected to vote on three
``regulatory reform'' bills--H.R. 10, the Regulations from
the Executive in Need of Scrutiny (the REINS Act), H.R. 3010,
the Regulatory Accountability Act, and H.R. 527, the
Regulatory Flexibility Improvements Act. Each of these bills
would up-end the entire regulatory system making it
impossible for the government to protect workers and the
public from workplace hazards, dirty air and water, unsafe
drugs, tainted food and Wall Street abuses. The AFL-CIO
strongly urges you to oppose each of these bills.
The Regulatory Accountability Act (RAA)--H.R. 3010--is a
particularly harmful measure. It amends the Administrative
Procedure Act (APA), but it goes far beyond establishing
procedures for rulemaking. The RAA acts as a ``supermandate''
overriding the requirements of landmark legislation such as
the Occupational Safety and Health Act and Mine Safety and
Health Act. The bill would require agencies to adopt the
least costly rule, instead of the most protective rule as is
now required by the OSH Act and MSH Act. It would make
protecting workers and the public secondary to limiting costs
and impacts on businesses and corporations.
The RAA will not improve the regulatory process; it will
cripple it. The bill adds dozens of new analytical,
procedural, and judicial review requirements to the
rulemaking process, which will add years to the process. The
development of major workplace safety rules already takes 6-
10 years; the RAA will further delay these rules and cost
workers their lives.
The RAA substitutes formal rulemaking for the current
procedures for public participation for high impact rules and
for other major rules upon request. These formal rulemaking
procedures will make it more difficult for workers and
members of the public to participate, and give greater access
and influence to business groups that have the resources to
hire lawyers and lobbyists to participate in this complex
process. For agencies that already provide for public
hearings, such as OSHA and MSHA, the bill would substitute
formal rulemaking for the development of all new rules,
overriding the effective public participation processes
conducted by these agencies.
H.R. 3010 would subject all agencies--including independent
agencies like the Securities and Exchange Commission, the
National Labor Relations Board (NLRB), Consumer Product
Safety Commission (CPSC), and the Consuumer Financial
Protection Bureau (CFPB) to these new analytical and
procedural requirements. It would be much more difficult for
agencies to develop and issue new financial reform rules and
consumer protection rules required under recently enacted
legislation.
The REINS Act (H.R. 10) would radically alter the
regulatory process by requiring Congress to vote to approve
all major rules before they can go into effect. Rules not
affirmatively acted on by both the House and the Senate
within 70 legislative days would die. Under the REINS Act,
politics, not scientific judgment or expertise would dictate
all regulatory actions. Corporate opposition and influence
would swamp the public's interest and block needed
protections.
H.R. 10 is impractical, unworkable and unnecessary.
Congress has neither the time nor expertise to consider and
act on detailed, technical and scientific issues. Moreover,
Congress already has the authority to disapprove rules
through the Congressional Review Act or block their
implementation by withholding funding.
H.R. 527, the Regulatory Flexibility Improvements Act,
expands the reach and scope of the Regulatory Flexibility Act
by covering regulations that may have an indirect effect on
small businesses and adding a host of new analytical
requirements that will make it even more difficult for
agencies to take action to protect workers and the public.
Virtually any action an agency proposes even a guidance
document designed to help a business comply with a rule could
be subject to a lengthy regulatory process. While the bill
purports to be focused on small business, it would cover more
than 99% of all employers, including firms in some industries
with up to 1,500 workers or $35.5 million in annual revenues.
This bill also creates a small business ``czar'' by
increasing the powers of the Chief Counsel of Small Business
Advocacy. This individual would become a super-regulator,
with new powers to review proposed regulations and suggest
alternatives. Agencies would be subject to review by both the
Office of Management and Budget and the Chief Counsel, adding
to regulatory delay.
H.R. 3010, H.R. 10 and H.R. 527 would further tilt the
regulatory process in favor of business groups and others who
want to stop regulations, and make it much more difficult for
the government to protect workers and the public. These are
dangerous proposals that will not create one new job or solve
any of the pressing problems facing our country.
The AFL-CIO strongly opposes H.R. 3010, H.R. 10 and H.R.
527 and urges you to vote against all three bills.
Sincerely,
William Samuel,
Director, Government Affairs Department.
I reserve the balance of my time.
I continue to reserve the balance of my time.
Mr. Chairman, I yield myself 1 minute.
The distinguished ranking member of Agriculture wasn't here when the ranking member, Mr. Miller of Education and Labor, was here talking about the agricultural problems and the problems that H.R. 3010 presents to us.
What I would like to just ask the gentleman, yesterday the Food and Drug Administration issued a recall of both grapes and tomatoes for salmonella contamination. Did the gentleman have some reservation or objection to this regulation that the FDA operated on?
I yield to the gentleman from Minnesota.
I yield myself an additional 1 minute.
If you think that this bill should go further, then why would FDA need to have H.R. 3010 be made more likely to kill regulations that control jobs and health?
Mr. Chairman, I yield the balance of my time to the distinguished gentleman from Georgia, Hank Johnson, a ranking subcommittee member in Judiciary.
Would the gentleman yield to me for just a few seconds?
Would the gentleman from California tell me now or at some future time which health regulations he would like to get repealed or withdrawn?
So you don't have any complaint against FDA at the present time?
But you're okay with them?
So you don't want to improve it?
I thank the gentleman for yielding.
Yes, sir.
I thank the chairman for yielding to me because we want to acknowledge the committee's parliamentarian, Allison Halataei, on her last day of service to the committee.
Allie has been an expert on House and committee rules, has ruled fairly on all matters of legislation that fall within the committee's jurisdiction, and has been valuable to all the members on both sides of the aisle. We've come to rely on her excellent judgment and experience.
On behalf of the Democratic members of the committee, we wish her well in her future endeavors.
Mr. Speaker, I demand a recorded vote.