Bryan Steil Leads House Administration Committee Hearing On 'Congress in a Post-Chevron World'

  • 3 months ago
Rep. Bryan Steil (R-WI) leads a House Administration Committee hearing on the how the Supreme Court's Chevron decision will affect law making.

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Transcript
00:00:00It's the Honorable Paul Ray for five minutes for the purpose of giving an opening statement.
00:00:06Chairman Steyl, Ranking Member Morelli, and distinguished members of the committee,
00:00:09it's an honor to appear here today. Thank you for the invitation.
00:00:13I direct the Heritage Foundation's Roe Institute for Economic Policy Studies.
00:00:17From June 2018 through January 2021, I served in the Office of Information and Regulatory Affairs
00:00:21within OMB. For the last year of that period, I had a double honor to serve as administrator
00:00:26of OIRA and to work with Satya here to my right. While at OIRA, I had the chance to form views
00:00:33about many of the ways our regulatory system succeeds and fails. The views I express here
00:00:37are my own and should not be construed as representing any official position of the
00:00:40Heritage Foundation. Today's topic, the relationship of Congress to the agencies,
00:00:45is a vast one. Every year, many bills are introduced to modify this relationship.
00:00:50Today, I would like to offer some thoughts on an overarching framework for evaluating such bills.
00:00:56I'd like to argue that the founders intended Congress to provide not just representation,
00:01:00but a certain sort of representation, one that imports into the legislative process certain
00:01:04qualities that Congress and Congress alone can offer. Congress should favor bills that inject
00:01:09these qualities into the administrative process. Low, bright, and relentless decisions have made
00:01:13it easier for Congress to play its role successfully, though ultimately that success
00:01:17has to come down to the actions of Congress itself. In 1788, Founding Father John Dickinson wrote
00:01:23that under the newly proposed American Constitution, quote, the whole people of the
00:01:27United States are to be trebly represented in three different modes of representation.
00:01:32Each branch of the new government would represent the people in its own unique way.
00:01:36Congress was to channel the people's wisdom and justice, the president their energy, and the courts
00:01:40their judgment. The Constitution brings these three modes of representation together in an
00:01:46arrangement that puts to use the qualities of each. The founders intended Congress to offer
00:01:50qualities that the president and the courts do not. Congress was meant to be the people in
00:01:55miniature. In John Adams' words, it would think, feel, reason, and act like the people. Elections
00:02:00are of course one principal way of achieving this goal, but there are others. The founders
00:02:04believed it crucial that members of Congress feel the effects of their legislation in precisely the
00:02:08same way the people do. They emphasized that members of Congress would be subject to the
00:02:12laws they enact, just like the people, and so would share a, quote, communion of interests
00:02:16and sympathy of sentiments with the people. As the Federalist Papers put it, the separation of
00:02:22powers preserves that communion, for by barring Congress from enhancing its own powers through
00:02:26legislation, it prevents the distorting incentives to which such a possibility would give rise.
00:02:31These arrangements serve to channel the people's views into legislation, but as the founders
00:02:35discovered during the turbulent first years of independence, the people is no monolithic entity.
00:02:40It comprises a vast diversity of interests and opinion groups, some of which are all too willing
00:02:45to use state power to exploit their opponents. The founders' solution to this problem relied on
00:02:50these very same diverse interests and opinion groups. To garner a majority of votes, legislation
00:02:56must attract the support of many disparate factions, and so must appeal either to interests most or all
00:03:00Americans share, or to our common sense of justice. And while it's also possible for legislation to
00:03:06achieve passage based on its appeal to a majority coalition of factions, the multipolar legislative
00:03:11process was intended to make the transaction costs forging coalitions like this prohibitively high.
00:03:17Now, administrative agencies are not set up to offer the benefits of legislative representation.
00:03:22There are two main models of administration, which we can call bureaucratic and presidential.
00:03:26On the bureaucratic side, agencies are supposed to operate rather like policy courts. Indeed, early
00:03:31advocates analogized the agencies to courts and argued they should receive the same kinds of
00:03:36protections for their independence that courts enjoy. The problem with the analogy is that statutes
00:03:42often leave substantial policy discretion to the agencies, so agencies, unlike courts, must set
00:03:47policy. But Article III-style representation is hopelessly ill-suited to channel the people's
00:03:52policy views. For one thing, agency officials are unelected, nor do they live under the regulations
00:03:58they issue. To the contrary, agencies can enhance their own powers through their regulations, which
00:04:03can sometimes give them interests that are opposite to the people's, notwithstanding the
00:04:06best efforts of the agency staff. Nor can presidential administrations apply the qualities
00:04:12of legislative representation. This is mainly because presidential unity exposes the presidential
00:04:17decision-making process to capture by interest and opinion groups which can obtain the executive
00:04:21action they want without persuading representatives of many diverse factions as they must under
00:04:25Article I. Presidential supervision of administrative agencies has much to be said for it,
00:04:31but one thing that cannot be said for it is that it can substitute for Congress's own role.
00:04:35Of currently pending legislation, the Reins Act would go furthest toward reviving legislative
00:04:39representation in the context of the administrative state. The Act would in large part subject major
00:04:44regulations to the Article I process with its electoral responsiveness, separation of powers,
00:04:48anti-faction protections, and stability-promoting features. More broadly, Congress's role with
00:04:52respect to the agencies should be to inject into the process those qualities that legislative
00:04:56representation was intended to provide. Blooper Bright and Relentless can help Congress to do so
00:05:01by lowering the transaction costs of enacting legislative tax that limits agency discretion.
00:05:06Thank you. Thank you very much. I now recognize you, Mr. Satya Tullam, for five minutes.
00:05:13Thank you, Chairman Stile, Ranking Member Morelli, and members of the committee. Thank you
00:05:17for the opportunity to testify. I'll apologize up front. I lost my voice a couple days ago,
00:05:21and so now I'm relegated to sounding like Wilford Brimley or something,
00:05:25so, or, you know, the coach from Major League. My name is Satya Tullam, Senior VP at Americans
00:05:32Responsible Innovation, Senior Fellow at Foundation for American Innovation, and perhaps most
00:05:37pertinent for this hearing. For a number of years, I was a senior staffer at the Senate Committee
00:05:43that had primary jurisdiction over the Administrative Procedure Act and all regulatory
00:05:48process-related issues, and later worked at OIRA, which Paul mentioned. So in this testimony, I hope
00:05:54to make three basic points. First, if you'll pardon the slightly obtuse metaphor, federal
00:05:58policymaking follows something like the first law of thermodynamics. Energy in the system can move
00:06:04between different parts or change form, but it is neither created nor destroyed. What this means is
00:06:09if one branch does not energetically exploit its prerogative to make policy decisions, those policy
00:06:15decisions will be made elsewhere by the other branches. Like a balloon squeezing on one part
00:06:21will simply move the gas to another area. Ambition must be made to counteract ambition, as Madison
00:06:27said, but apathy is not met with symmetrical apathy. What the Court has done has used its own
00:06:33prerogative to reassert a new equilibrium, and yes, this has the effect of empowering the
00:06:38Article I branch, but this effect is not self-executing. It is right now a kind of potential
00:06:44energy waiting for a force to be applied, turning it into kinetic energy to further torture my
00:06:50classical mechanics metaphor. Second, let us remember that the original Chevron decision itself
00:06:57ultimately permitted agency discretion in that case, and what most people agreed was a
00:07:02deregulatory direction. The EPA had wanted to permit more flexibility in regulatory compliance,
00:07:09making an existing rule less constraining. So the Chevron decision, not the most recent decision, but
00:07:15the original Chevron decision, and now Wilbur Bright, are neither, quote, regulatory or deregulatory.
00:07:21This formulation makes no sense. Further on this point, the EPA does not contemplate a thing called
00:07:26a, quote, deregulation as something afforded a differential process. The EPA defines rulemaking
00:07:32as, quote, agency process for formulating, amending, or repealing a rule. In other words, everything,
00:07:38any change to the code of federal regulations, it's similarly situated and is not tilted in favor
00:07:45of one or the other. Third point, and I believe at least some, if not all, of my colleagues on this
00:07:50panel will agree with this, that, with the need, maybe not even limited to responding to this
00:07:55decision, to increase congressional capacity. As the sole branch of government constitutionally
00:08:00vested with legislative powers, it behooves Congress to be best equipped to execute that
00:08:05responsibility. In naive terms, Congress is worse off. Since this decision, contrary to the hearing's
00:08:12title, is actually returned to the pre-Chevron regime, let's go back. In the 40 years since the
00:08:18decision, the total number of congressional staff has actually decreased, has actually gone down by
00:08:23a few percent. In the last 30 years, the number of committee staff has gone down by 40 percent.
00:08:29Does anyone on the committee believe Congress's work has become less complicated, confusing, and
00:08:34therefore easier since then? Members of Congress may be wary of the self-aggrandizing appearance of
00:08:40accumulating more staff, but human capital and expertise are embodied in people, and this kind
00:08:46of a decrease in intellectual capacity has only one result in terms of productivity and effectiveness.
00:08:52This is admittedly a crude measurement of congressional capacity, but I hope you get the
00:08:56point. Finally, an anecdote on this capacity on a slightly related thing. Many of you are familiar
00:09:02with the Congressional Review Act and its requirement that a report be submitted to
00:09:07Congress for review for every new rule. Well, in 2020, for obvious reasons, the normal processes
00:09:13for submitting those reports, which at the time were all done by hard copy, were severely
00:09:18challenged. When I inquired with various offices to find a solution, like submitting those reports
00:09:24electronically, therefore they'd have a timestamp of the receipt and then follow up with hard copies,
00:09:30I was told emphatically, we do not have the capacity to set up such a system. I don't want
00:09:36to be too precious about this point, but if Congress hasn't made even modest administrative
00:09:40updates to fairly mundane processes, how can we believe Congress is equipped to handle an
00:09:45increasingly complex, unpredictable, and fast-moving 21st century? Thank you, and I look forward to your
00:09:50questions. Thank you very much. Now recognize you, Mr. Kevin Kosar, for five minutes.
00:09:55All righty. Chairman, Ranking Member, and members of the Committee, thank you for having me in. I'm
00:10:01honored to be before you. Well, I'll limit myself to two points, the first of which is evident,
00:10:08but there's been a lot of hyperbolic commentary online and in the media. The Court's decision
00:10:16in Loper-Bright and the relentless cases didn't end regulation. They didn't slay the administrative
00:10:24state. Agencies will continue to interpret the law and to issue regulation and guidance and all
00:10:30those sorts of documents to try to apply statutes. So this leads me to point number two, which my
00:10:37friend has well set up. Congress doesn't really have an oversight apparatus to ensure that when
00:10:48the executive branch engages in regulatory actions, that their actions comport with the law.
00:10:54Article 1 of the Constitution, as has been said, confers all legislative authority,
00:10:59all lawmaking authority to this institution, Congress. Article 2 says,
00:11:06President shall take care that the law be faithfully executed. Well, how do you ensure
00:11:13that the law is being faithfully executed? Over the course of the last century, as the scope of
00:11:19federal activities has grown, Congress has made various ad hoc investments in itself to do that.
00:11:24It's, for example, 100 years ago created the General Accounting Office, GAO, to follow the
00:11:31money and ensure money was not being spent outside the bounds set by appropriations acts.
00:11:37It created Inspectors General to keep an eye on agency personnel.
00:11:41Mr. Husserl, I'm getting a note that it's a little difficult to hear you on the stream.
00:11:45We can hear you in the room just fine, but I know we have a lot of people listening. If you just
00:11:49want to pull that microphone a little closer because I want to make sure everybody online
00:11:52can hear. Thank you. All right. Thank you. So yeah, you also create Inspectors General in
00:11:56order to keep an eye on agency personnel and make sure they weren't acting outside of the law.
00:12:02But nothing has been built to help you all oversee regulation and ensure that it's being done in a
00:12:09way that is within the bounds of the law. And today, regulation is a massive part of policy
00:12:16making. As noted in your introductory statement, we have 439 agency and there are a few thousand
00:12:21rules being issued every year, some small, some large, but that's a lot of work and nobody is
00:12:27directly tasked with doing it. And so, you know, I come to you, a conservative who believes in
00:12:34constitutional government, reviving federalism, smaller government, all those sort of traditional
00:12:42conservative values. And I am saying, please create a Congressional Regulation Office, whether
00:12:48it's a freestanding office, whether it's an office you tuck inside the Congressional Budget Office,
00:12:53this is not something that matters to me. But 20 years in D.C., it's been my perception that
00:13:01if you want something to get done, you have to task somebody with doing it. And I see you all
00:13:07working frantically. I see your staffs working especially frantically. So many things to do,
00:13:13so much to oversee, so much coming at you. How you can fruitfully engage regulatory actions at this
00:13:22point, I don't think you can. The capacity is just not there. And so, creating a core of folks
00:13:29who have legal skills, policy chops, but also statistical analogy skills who can look at the
00:13:38executive branch as it moves through the regulatory process, you know, from snout to tail and ensure
00:13:43that what they're doing is within the law. This is a core of folks who could help maintain a dialogue
00:13:50for the Congress with the executive branch as it goes through the process, as it works through
00:13:55these nettlesome, complicated issues and these deals with these unforeseen things that were
00:14:00probably not even on your mind as you passed the bill. So, with that, you know what? I've
00:14:10got 50 seconds left. I'm just going to give back my time, and thank you for hearing me.
00:14:14Unprecedented. The gentleman yields back. Mr. Wayne Cruz is recognized for five minutes.
00:14:21Chairman Stile, Ranking Member Morelli, and members of the committee, thank you for the
00:14:25opportunity to testify on Congress's role in a post-Chevron world. My name is Wayne Cruz. I'm
00:14:30the Fred L. Smith Fellow in Regulatory Studies at the Competitive Enterprise Institute. Federal
00:14:36spending hogs the spotlight, but the hidden tax of regulation affects every aspect of our lives.
00:14:43The Code of Federal Regulations tops 188,000 pages. Last year alone, agencies issued 3,000
00:14:50rules compared to just 65 laws passed by Congress. Costs remain unaccounted for,
00:14:56notably those from independent agencies now ascendant in whole-of-government pursuits like
00:15:02net-zero energy, AI, equity, and competition policy. Congress must reclaim its lawmaking
00:15:08authority from the executive branch, but first and foremost, it must restrain its own
00:15:14interventionist appetites. There are many elements to this in my written remarks, but they all
00:15:19require that Congress, and this committee in particular, marshal appropriate resources and
00:15:25personnel to perform rigorous regulatory oversight and disclosures, replacing the eroded White House
00:15:31variant. The end of Chevron deference marks an overdue reaffirmation of separation of powers
00:15:37and a break on over-delegation. However, it's crucial to recognize the extent to which regulatory
00:15:42advocates will mobilize in response. While extraordinary extensions of regulatory power
00:15:48occurred during Chevron's reign, most of the leverageable administrative apparatus was erected
00:15:55before then. Especially since COVID, the problem is less about agency interpretation of the
00:16:01ambiguous statutes at hand in LOPR than agency's implementation of unambiguous statutes.
00:16:08The inflation, infrastructure, and chips laws are exceedingly regulatory even before administrators
00:16:14pick up a pencil. Workarounds exist for regulatory advocates to exploit in a post-Chevron world,
00:16:21including, one, more coordination on potent, unambiguous, and purpose-driven legislation
00:16:28like the CARES Act and the TikTok ban, two, seducing the private sector with subsidies,
00:16:34grants, and partnerships to embrace interventionist legislation and cartelization, three,
00:16:40increasing federal influence with hundreds of billions in procurement and contracting,
00:16:44and four, replacing notice and comment rules with guidance documents and other forms of regulatory
00:16:49dark matter. To prepare, an outstanding but neglected new GAO report provides recommendations
00:16:56that this committee should heed, up to and including establishing a Congressional Office
00:17:02of Regulatory Analysis. Done correctly, ACORA could challenge mistaken presumptions of agency
00:17:10expertise and avoid the faulty presumption that market failure outweighs political failure.
00:17:16To reinforce GAO, other needed steps include overturning Biden's rewrite of OMB's Circular
00:17:22A-4 and ensuring that regulatory reform laws already in effect but disregarded get enforced.
00:17:28Next comes the pursuit of several new legislative reforms, one, passing the REINS Act,
00:17:34ideally under its predecessor's superior name, the Congressional Responsibility Act, two,
00:17:41taking up the Democrats on their marvelous regulatory budgeting idea, three, creating
00:17:46a Regulatory Reduction Commission, four, reinstating one-in, one-out policies and
00:17:52sunsetting regulations, fifth, and most importantly, reforms in the use of agency
00:17:57subregulatory guidance documents, including banning them. Six, the low-hanging fruit should
00:18:02be the annual regulatory reporting in the style of the federal budget's historical tables.
00:18:08A generation ago, a slate of regulatory reforms benefiting state and local government,
00:18:13small business, and consumers passed with overwhelming bipartisan support,
00:18:17but today's fusion of hyperspending and regulation, government steers while the market merely rose,
00:18:23as our founder Fred Smith puts it. Cost of intervention compound even without
00:18:28writing notice and comment rules. Correcting overdelegation is vital, but the real challenge
00:18:34is Congress's own disregard for enumerated powers. Response requires decentralizations,
00:18:40federalism, and ending the abuse of crises like happened with COVID and the financial meltdown.
00:18:46By enhancing resources and fostering reforms, this committee could play a key role in limiting
00:18:51overregulation and expanding jobs and wealth. You don't need to tell the grass to grow,
00:18:55you just have to take the rocks off of it. Thank you again, and I'm happy to answer your questions.
00:19:00Thank you very much, Mr. Cruz. Mr. Josh Chaffetz here, now recognized for five minutes.
00:19:06Chairman Stile, Ranking Member Morelli, and distinguished members of the committee,
00:19:10thank you for the opportunity to testify today regarding the vitally important topic of
00:19:15congressional responses to the Supreme Court's recent Loper-Bright decision, which ended the
00:19:19practice of according Chevron deference to agencies' interpretations of the statutes that
00:19:23they administer. Let me begin with a few words about the likely effects of Loper-Bright.
00:19:28First, it's likely to lead to more judicial policymaking. The largest study of agency
00:19:33statutory interpretation cases in the circuit courts found that use of Chevron deference
00:19:37significantly reduced ideological decision-making by judges. In pre-Loper-Bright cases where
00:19:42Chevron deference was not applied, political preferences played a much larger role in case
00:19:47outcomes. So one thing we can say about Loper-Bright is that it will very likely free the
00:19:51hands of judges to dispense with regulations that they dislike. Indeed, we should see Loper-Bright
00:19:57as part of a larger project by the Roberts Court of judicial self-aggrandizement across
00:20:00administrative law and beyond. In contexts ranging from the removability of agency officials
00:20:06to the availability of in-house agency adjudication to the so-called major questions
00:20:10doctrine and more, the court has repeatedly undermined the regulatory regimes that Congress
00:20:15has put in place. In their stead, the court has substituted its own preferences as to how
00:20:20government should be constructed and what policies it may enact. Loper-Bright ignores
00:20:26research demonstrating that Chevron was the interpretive tool most familiar to congressional
00:20:30drafters, far more so than canons relied upon by the Supreme Court with some regularity.
00:20:36Drafters were well aware that statutory ambiguity would be interpreted as a delegation of
00:20:40interpretive authority to the agency, and if they didn't want that agency to have that authority,
00:20:44they attempted to draft with greater specificity. Eliminating a doctrine in whose shadow Congress
00:20:49has drafted for decades and replacing it with something significantly less certain in its
00:20:53operation is not congressional empowerment, it's judicial empowerment. Agencies seeing this posture
00:20:59by the courts are likely to respond by preemptively trimming their sales, issuing only those
00:21:03regulations that they think are likely to meet with judicial approval, and refraining from
00:21:07altering old interpretations even as new information and new technologies become available.
00:21:13The flexibility that's a hallmark of the administrative state, the flexibility that
00:21:16Congress has designed into the administrative state, will be substantially undermined,
00:21:21all under the flag of supposedly empowering Congress. So what can Congress do to respond
00:21:26to this judicial power grab? Well first, in the realm of bill drafting, Congress can write
00:21:31deference into individual bills empowering agencies, or it could even draft a standalone
00:21:36bill reinstituting Chevron deference. Because Loeper-Bright claims to be an interpretation
00:21:41of the Administrative Procedure Act, not a constitutional holding, it can be reversed by
00:21:45statute. Congress could also choose to draft in ways that clearly indicate that it's vesting
00:21:51significant discretion in agencies, using words like reasonable or appropriate.
00:21:57This too would be consistent with the language of the Loeper-Bright decision.
00:22:01Of course, just because these drafting techniques would be consistent with the facial reasoning of
00:22:04Loeper-Bright doesn't mean that the court wouldn't find other ways to skirt them or strike them down.
00:22:09The general anti-administrative posture of the current court should make us skeptical that it
00:22:14will allow Congress to assert itself in these ways. The other category of responses to Loeper-Bright
00:22:19falls under the heading of congressional capacity building, and here's an area in which I think
00:22:23possibly all of us on this panel agree. If the court is going to insist that Congress make policy
00:22:28at ever more granular levels, then Congress will need to build an institutional infrastructure
00:22:32mirroring that which currently exists at the agencies. This means large increases in the
00:22:37number of staffers and diversifying the experience of staffers, including hiring many with graduate
00:22:42degrees in the social and physical sciences and many more with security clearances. It means paying
00:22:47those staffers well enough to retain them and giving them access to resources like sophisticated
00:22:52information technology, databases, and perhaps even in some cases laboratories. The proposals put
00:22:57forward by the Modernization Committee, some of which have been adopted, would be a step in the
00:23:01right direction, but only a step. And even a massive increase in congressional capacity could never
00:23:06fully substitute for administrative expertise. There's a reason that no modern democratic system
00:23:12that I'm aware of has its legislature making policy at the level of granularity at which
00:23:17agencies regulate. Moreover, many government's decisions in the executive branch are specific
00:23:22to circumstances that arise after implementation has already begun. Asking Congress to resolve
00:23:27those issues ex ante is unlikely to succeed. In summary, the Supreme Court and Loper-Bright, but
00:23:33also more broadly across Roberts Court administrative law decisions, has made it harder and harder for
00:23:38agencies to pursue the missions that Congress has assigned them. These decisions taking power away
00:23:44from agencies do not, the claims of their authors notwithstanding, empower Congress. Rather, they
00:23:49empower the courts at the expense of both Congress and the agencies. There are strategies available
00:23:55for Congress to respond, including both bill drafting techniques and institutional capacity
00:23:59building, and these are absolutely worth pursuing. But at the end of the day, their impact will be
00:24:03limited. As long as the judiciary has an anti-administrativist bent, making pro-regulatory
00:24:08public policy will remain very much an uphill climb. Thank you.
00:24:16Thank you very much. We thank all of our witnesses. I'll begin with questions. We'll then go to the
00:24:21ranking member. We'll alternate between sides. I'll recognize myself for five minutes for the
00:24:25purpose of asking questions. The Committee on House Administration, we oversee the legislative
00:24:31branch and authorized committee budgets. The Supreme Court decision in Loper-Bright sent a
00:24:36clear message that lawmaking authority rests with Congress. In the wake of that decision,
00:24:42this committee has a real opportunity to ensure that Congress leverages its resources effectively.
00:24:48So, out of the gates, a question. I'm going to come down the row, starting with you,
00:24:51Mr. Ray, and we'll come down. As currently structured, is Congress set up to review
00:25:03the rules coming out of the administrative state, yes or no?
00:25:07No. No. No.
00:25:15So, no. So then the question becomes, how do we restructure Congress to take advantage of
00:25:19this opportunity that's been given to us to reclaim authority, and it's been given to us
00:25:24by the Supreme Court? What I'd love is just to go down the row. I'm looking for a short-term
00:25:29answer. What can we do in the near term? And I want to come through and ask, what can we do in
00:25:34the long term? So, short-term first, something that is actually accomplishable in the short
00:25:39term as we think about the structure of Congress. Mr. Ray? In the short term, hire more staff with
00:25:47relevant subject matter expertise. I think even easier than that, empower GAO, assign a task force
00:25:53to look into doing a pilot project along these lines. I'd be inclined to say hire staff that
00:26:02can work within CBO and who can kind of pilot this idea of providing regulatory oversight support.
00:26:10Most of the regulatory reform reports you're supposed to be getting are overdue,
00:26:14so you can quickly work with judiciary and OGR and get the annual, but it comes out every three
00:26:20years, cost for benefit report. You can get the paperwork reduction report. It's 16,000 human
00:26:26lives and paperwork hours every year, and also just making sure that the CRA in particular is
00:26:33followed. If you look at the flow of rules at the GAO, not every major rule is getting reported,
00:26:39and I don't know how in the world you would determine whether those rules are being reported
00:26:43to you all. I don't think there's a single person who can tell you that they are. A little bit in
00:26:46the congressional record on communications with the executive branch, but that's the quick stuff
00:26:51to scoop up. Thank you. Mr. Chaffetz? Committees already have the obligation
00:26:56to conduct oversight of all of the functions within their jurisdiction, so beefing up committee
00:27:01staff, and in particular committee staff with substantive expertise in the areas that they're
00:27:06overseeing, would allow them to evaluate the regulations coming out of the executive branch.
00:27:10Thank you. I'm going to come back for a slightly more of a longer-term look as to how you think
00:27:14we should be thinking about the long-term restructuring to reestablish congressional
00:27:19control over the administrative state. Mr. Wray? I don't see a way for Congress to reestablish
00:27:23control so long as it is in a fundamentally responsive posture to the agencies and the
00:27:27executive branch generally, so the key to my way of thinking is for Congress to again become the
00:27:32first mover. It was intended to be under the Constitution. There are various ways to do that.
00:27:36One would be to pass something like the REINS Act, which requires for some subset of the most
00:27:39important regulations, affirmative congressional approval rather than congressional response.
00:27:44Thank you. Mr. Tolan? So, similarly to how the White House has an extensive budget office,
00:27:51and Congress does as well, we don't view that as duplicative. We find that those are both
00:27:55essential elements that Congress not rely on. I think it's appropriate to, in the long term,
00:28:01determine how to set up a regulatory office given actually the scope of the work is
00:28:05something akin to maybe even larger than the budget work. Thank you.
00:28:11Precisely what he said. You're concise, Mr. Koster. I like it. I support REINS and the
00:28:17congressional office like this, too, but I would urge you all to look at each other and what you
00:28:22worked on in the past. The last time you had major regulatory reforms was a generation ago when you
00:28:28did the unfunded mandates, the small business, the paperwork amendments, and even the CRA. It
00:28:33was Harry Reid of Nevada leading the charge for the Congressional Review Act. That would
00:28:37astound you now to think that, but what was happening at the time was unfunded mandates
00:28:43on state and local governments and small business that got everyone's attention in this room.
00:28:48That's not happening now because those mandates are funded through infrastructure law, inflation
00:28:53law, CHIPS law, and they've got a lot of regulatory strings attached with regulatory dark matter and
00:28:58so forth, but eventually that money dries up. I would say a lot of the ideas that you have are
00:29:03bipartisan, so longer term, regulatory budgeting, sun setting, oversight, that sort of thing.
00:29:08There's a lot of that stuff that you all have worked together on in the past, and you can do
00:29:11that again. Very concisely, Mr. Chavitz. I'm a little more skeptical than some of my colleagues
00:29:16of an office that's specifically designed to focus on regulation. I think, again, I'm not sure they
00:29:22would have the substantive expertise to review regulations coming from all the different parts
00:29:26of the administrative state, so again, I would urge long-term capacity building in the committees
00:29:30that already exist. Thank you very much. I think we have a real unique opportunity here
00:29:36post-end of the Chevron doctrine to really reestablish Congress as the primary
00:29:44maker of both law and an overview of the regulation. I think the REINS Act would
00:29:48move us dramatically in that direction. I appreciate all of our witnesses for being
00:29:52here today. I'll now recognize the Ranking Member for five minutes for the purpose of asking
00:29:56questions. Thank you again, Mr. Chair, and thank you to the witnesses. I feel a little bit like
00:30:02I'm watching one of my favorite programs on TV is Love It or List It. This is on HGTV,
00:30:09so it's always in the couple. One of them wants to sell the house, and one of them wants to buy,
00:30:14and one of them wants to stay. The person who wants to move, when they say, well, what's your
00:30:18perfect house? How could we make this one better so you'd be inclined to stay? They say, well,
00:30:23and then they list about 45 things that would cost like a million dollars, and they say,
00:30:28what's the budget? Oh, $100,000. So you're set up to fail. You can't actually do it. So
00:30:34while I appreciate the sincerity of the members, I just note a couple things. When it comes to
00:30:38hiring more staff or building the legislative branch, which believe me, I would go on record,
00:30:43I would triple the congressional appropriation. I think we are woefully underfunded, so I do
00:30:48agree with you. But just to note, the appropriations proposed by the House in total,
00:30:55non-mandated appropriations proposed by the House right now is $1.606 trillion. The amount
00:31:06proposed for the legislative branch is $7 billion, or for those of you who appreciate math,
00:31:12four-tenths of 1% of the entire federal non-mandated spend proposed in this bill.
00:31:19It failed on the House floor last week because it's too expensive, too rich, so it couldn't get
00:31:25enough votes for passage. So I feel, again, like that, yeah, oh yeah, here's, here, it would only
00:31:30cost $3 million to do this thing, but you only have $100,000. I, for the life of me, don't
00:31:35understand how this would work. I appreciate you. Which leads me, and I'll ask you this, Mr.
00:31:41Chavez, is that, am I pronouncing that right? Chavez, yeah. Chavez. So you had mentioned in
00:31:47your testimony that rather than empowering Congress, Loper Bright empowers courts at the
00:31:55expense of Congress. Is that, can you just expand upon that a little bit, how it degrades
00:32:01congressional authority over federal agencies? Is it purely because of what I just mentioned,
00:32:06the lack of resources, or do you want to go beyond that in terms of why it shifts the balance
00:32:12of power? Sure. So when Congress, first of all, Congress has created these agencies. Congress has
00:32:19passed their organic statutes. Congress has delegated authority to these agencies. And
00:32:23since 1984, Congress has done so in the shadow of Chevron deference. And this isn't just a
00:32:28hypothetical. We have really solid research showing that Chevron deference is the tool
00:32:34most understood by congressional drafters, by staff in ledge council and by staff elsewhere
00:32:40on the hill. They understood they were drafting these statutes in light of Chevron deference,
00:32:44and they understood that if they didn't want the agencies to have interpretive freedom,
00:32:48that they should draft with more specificity, and so they did. So what that means is that
00:32:54by taking this away, essentially the courts are saying, this thing that Congress thought
00:32:58it was delegating to agencies, which is this interpretive freedom, in fact the agencies
00:33:02don't get to have that. And what replaces that is not power flowing back to this institution.
00:33:08What replaces that is the courts giving their own sort of de novo interpretations of these
00:33:13statutory regimes. So it's not passing from unaccountable bureaucrats to the accountable
00:33:19Congress. It's passing from somewhat accountable bureaucrats to even less accountable federal
00:33:23judges. Thank you for that. I want to shift just for a second. Again, Professor, we're
00:33:30here to consider ways Congress can better serve the American people. Americans agree
00:33:34government should use its power to protect health and well-being, grow the economy and
00:33:38grow the prosperity of all Americans. I want to read something from Project 25 that is
00:33:44associated with former President Trump. It says that the president has, quote, an existential
00:33:49need for aggressive use of the vast powers of the executive branch. Success in meeting
00:33:54that challenge will require boldness to bend or break the bureaucracy to the presidential
00:34:01will. Among the recommendations, the mass firing of civil servants, many of whom, frankly,
00:34:07do the protection of health and well-being that I mentioned, when a buzz saw that former
00:34:15President Trump's Project 2025 takes to civil service, keep Americans safe from the dangers
00:34:22such as, you know, I mentioned things that the FDA does, for instance, that our administrative
00:34:26system currently protects. Can you talk about what that impact could potentially have?
00:34:32Sure. So, you know, for the entire 19th century, we didn't have civil service protections in
00:34:38this country. And we had what was known as the spoils system, where every time a new
00:34:42administration came into power, they would fire basically every federal employee and
00:34:46replace them with members of their own party. This was widely regarded as one of the worst
00:34:50governance systems in the world. You see criticism, you know, you see sort of scholars in Europe
00:34:55sort of laughing at this throughout the 19th century. Finally, as the American state sort
00:35:00of grows in sophistication toward the very end of the 19th century and into the 20th,
00:35:03it begins implementing civil service reforms, becoming a sort of modern administrative nation.
00:35:10And so sort of undoing civil service protections, right, returning to a spoils system would
00:35:15sort of return us to a lot of the sort of waste and abuse that really characterized
00:35:1919th century American politics.
00:35:22Thank you. I yield back, Mr. Chairman.
00:35:23The gentleman yields back. Mr. Lattermox, you're recognized for five minutes.
00:35:26Well, thank you, Mr. Chairman. It's a very interesting subject matter, something I've
00:35:29been working on since I first came to Congress. And a little bit of follow-up on what Mr.
00:35:34Chaffetz was just saying and the interaction there. We do have an issue within the civil
00:35:39service system. There is such protection that it takes up to two years to fire a bad employee.
00:35:43That is something that has to be addressed. This is a bipartisan issue. I first learned
00:35:48of this from President Obama's head secretary of Homeland Security, who was begging for
00:35:54things to be changed because they're keeping employees who basically had committed crimes
00:36:02or had disciplinary actions so bad that they couldn't remove them from the payroll. They
00:36:08couldn't continue to do their job because they couldn't keep a security clearance, but
00:36:10they had to keep them on the payroll for a year. And if they appealed, then it was another
00:36:15year. And so he said, we're paying people that are basically getting two years of unpaid
00:36:24vacation with full benefits. This has to change. This has to change. And so I just wanted to
00:36:30bring that up, is it's not going back to the old system. And I don't know what is in Project
00:36:3625, but I have legislation that would bring in sensible ways of streamlining civil service
00:36:44and making sure that they are productive and they are doing their jobs and they're just
00:36:48not getting a free ride off the American taxpayer. So I think we do have to be intellectually
00:36:52honest as we talk about these issues. But to the issue at hand, this is something that
00:37:00I've been working on since I came to Congress. Myself, Senator Mike Lee, and then Congressman
00:37:05Jeb Hensarling put together the Article I Project, which is to rebalance the powers
00:37:10which the majority are given to Congress. And we saw at the time that there's an extensive
00:37:16amount of power since World War II that had been extended to the executive branch. And
00:37:21it was interesting, I was having dinner with Justice Scalia one evening and we were talking
00:37:28about this and I asked him, I said, what can we do to eliminate or to rein in the executive
00:37:37branch from legislating via regulation and the courts from legislating from the bench?
00:37:43And his response was, Congress needs to do its job. You need to write legislation with
00:37:48more specificity. And so this is the type of thing, this is good timing. And Chevron
00:37:52deference was one of the issues that we were facing at the time. And my understanding has
00:37:56always been that when an act of government can deprive citizens of property or liberty,
00:38:04it is not a rule of regulation, it's a law. And only Congress can enact those laws. So
00:38:09with those things on the table there, Mr. Wray, what specific accountability measures
00:38:15should Congress adopt to ensure that federal agencies adhere strictly to legislative intent
00:38:20in both the rulemaking duties and enforcement activities?
00:38:26I would say first and foremost, specificity in statutory text, as you just mentioned.
00:38:31Another helpful approach is to specify the outcomes that Congress is after. So when agencies
00:38:37are left great discretion, they can pick and choose among the outcomes to optimize for.
00:38:42When Congress specifies we want the following outcomes in this particular order, then that
00:38:47constrains agency discretion in a pretty serious way.
00:38:49Do you feel like, for us to give specificity in legislation, which I think we should, sometimes
00:38:56we're handcuffed because we don't necessarily have the experts in the field. I'd make the
00:39:02argument at one time they were there in the executive branch. I think in the past few
00:39:09decades political ideology has taken over from expertise as who's appointed in these
00:39:16positions. But is there a way that you can, do you see that that handcuffs Congress somewhat
00:39:22not having experts in fields?
00:39:25So two points in response to the question. First of all, it would certainly be impossible
00:39:31for Congress itself to address the topic of every rulemaking undertaken by the executive
00:39:35branch. There's several hundred rulemakings open for comment right now. But it could answer
00:39:41or resolve a number of the most important rulemakings. There's only a few hundred major
00:39:47rulemakings per year, typically. It's conceivable that Congress could itself take the initiative
00:39:52in a number of those proceedings.
00:39:55The second point I'd make is that if Congress were to narrow the scope of statutes, then
00:39:59states and other lawmaking bodies across the country could take up some of the work for
00:40:02Congress.
00:40:03Well, I like the idea of federalism, and that plays into it. So real quickly, the last question,
00:40:08do you think that there are any mechanisms that we already have in place to do this work,
00:40:13or do we just need a new system and new processes to be created and implemented?
00:40:20Congress will not be able to exert effective control as long as it's just responding to
00:40:24agencies. So I think there are some existing systems that could be used effectively today,
00:40:29but really what's called for is a new approach.
00:40:32Thank you. I yield back.
00:40:33Chairman yields back. Ms. Sewell is recognized for five minutes.
00:40:35Thank you, Mr. Chairman. I want to thank our witnesses for taking the time today to testify.
00:40:39On June 28th, the Supreme Court of the United States overturned 40 years of legal precedent
00:40:45by wiping out the Chevron deference, a doctrine that required courts to defer to subject matter
00:40:52experts when a question of law was ambiguous. This decision will dramatically impact the
00:41:00way that the three branches of government function, because it weakens the way federal
00:41:05agencies are able to weigh in on policies about the environment, health care, food,
00:41:10work safety, and so much more. Justice Kagan mentioned in her dissenting opinion that in
00:41:15one fell swoop, the majority, quote, gave exclusive power over every open issue, close
00:41:23quote. This egregious power grab by the Supreme Court is not by happenstance, but rather a
00:41:29larger effort by right-wing conservatives to roll out the Project 2025 agenda that will
00:41:35fundamentally alter the way that government functions. Congress is a team sport, and we
00:41:41rely on staffers, legal counsel, advocates, policy matter experts to create legislation
00:41:48that will impact our constituents' daily lives. But Congress lacks the subject matter expertise
00:41:54it takes to govern our nation alone. Policy matter experts at federal agencies play a
00:42:01very critical role on this team, because they can break down the intricate details of how
00:42:08certain regulatory programs and statutes should be administered. Um, Professor Shevitz, um,
00:42:16it was Justice Stevens who wrote in the original Chevron opinion, quote, judges are not experts
00:42:21in the field and are not a part of its either political branch of government. Courts must
00:42:28in some ways reconcile competing political interests, but not on the basis of judges'
00:42:33personal policy preferences. Um, I would suspect that in 40 years, there were a lot of court
00:42:41cases that have been decided using the Chevron deference. Can you talk about, um, how this
00:42:47will open the floodgates to further litigation? Sure. So, um, uh, you know, the, the, the
00:42:55litigation, I'm not sure to what extent it will, uh, that Loper-Bright on its own will
00:43:00increase the amount of litigation, but it will change the results of some of that litigation.
00:43:04So, um, uh, you know, uh, the, there's research showing that, that Chevron deference made
00:43:09a significant difference in the outcome of circuit court cases. That is, in cases where
00:43:13circuit courts applied Chevron deference, uh, the ideological dispositions of the,
00:43:18the judges on the three judge panel mattered less, uh, than in cases where it didn't apply
00:43:23Chevron deference. Uh, so now that it's not allowed to apply Chevron deference, we should
00:43:26expect to see, uh, sort of, uh, the, the ideology of the judges on those three judge panels
00:43:31mattering more, um, uh, in those cases. Um, I'll also add that there's another case that
00:43:35came down three days after Loper-Bright, which is the corner post decision. Yes. Um, and
00:43:40up until, uh, you know, so, so the, uh, uh, federal law says that there is a six year
00:43:44statute of limitations for challenging agency, uh, actions. Um, uh, it had always been thought
00:43:49that it was six years from the time the agency action was finalized. Right. In corner post,
00:43:53the Supreme Court says. And not when the person was injured. Exactly. And, and, and in corner
00:43:56post, right, it says it's six years from the time that that, that regulation was applied
00:44:00to that regulated entity, which means that every regulation can now be challenged indefinitely.
00:44:05There's no point at which a regulation, uh, has exhausted the. So what does that mean
00:44:08coupled with the Chevron deference case? It means that that corner post means that
00:44:12there are going to be just a flood of cases that would not have previously been filed.
00:44:16Um, uh, and coupled with Chevron, uh, coupled with Loper-Bright, right. And Loper-Bright,
00:44:21the majority claims that, well, um, uh, you know, cases that relied on Chevron are still
00:44:25good law. We're not going to reopen those. Um, but, uh, those are now available to be
00:44:30challenged again. And if the judges think that there's some error that goes beyond mere
00:44:35reliance on Chevron, then even consistent with Loper-Bright, those, uh, agency and longstanding
00:44:40agency interpretations would be open for, for re-evaluation by the courts.
00:44:44And you said in your testimony, um, that it was, that, uh, even if Congress bills out
00:44:49our internal team, uh, that it would still be, um, not be able to replace the agencies.
00:44:56How do you think that this will hurt potential, uh, policymaking?
00:44:59Uh, well, it'll make policymaking sort of less robust, less responsive, less likely
00:45:04to, uh, to, to sort of address the problems that Congress and that the American people
00:45:08want to address, and less responsive in adapting to changes in scientific knowledge or in technology,
00:45:14uh, in order to, uh, sort of adjust pre-existing regulations.
00:45:18Thank you. And I yield back the balance of my time.
00:45:20Gentleman yields back. Ms. Torres is recognized for five minutes.
00:45:24Thank you, Chairman. Um, and thank you to the witnesses. In recent time, we've seen
00:45:30this conservative, politically motivated and activist Supreme Court overturn subtle
00:45:36law like Roe v. Wade, uh, which protected women for more than 50, for almost 50 years.
00:45:42Uh, today, we're discussing yet another dangerous Supreme Court decision which reversed the
00:45:4740-year, um, old Chevron doctrine, a doctrine that ensured experts in their field had a
00:45:54say in determining complex questions specific to their agencies. This is very dangerous,
00:46:01but overlooked, uh, ruling reverses all of that. The result now, instead of experts weighing
00:46:08in on our nation's regulations, we will have unelected judges who do not have policy expertise
00:46:14making decisions that impact our lives. I want to share an example of how this will
00:46:20impact the people that I represent. My district is downwind from Los Angeles, and that has
00:46:28one of the worst air qualities in the nation. According to the American Lung Association,
00:46:34counties in the Inland Empire have some of the worst year-round air quality, uh, pollution,
00:46:41and children have far above average rates of asthma and long-term lung problems. Imagine
00:46:48now a world where judges with no background in atmospheric science or lung health will
00:46:55make decisions about what kind of pollutants companies should be allowed, um, to put in
00:47:01our air. I'd like to get some background on, you know, how we've come, uh, to this, to
00:47:07the place where we are right now. Um, Mr. Ray, uh, you were specifically thanked in
00:47:15the acknowledgements of Trump's Project 2025, uh, which says that you devoted a significant
00:47:23amount of your valuable time to reviewing and editing a lengthy manuscript and provided
00:47:30expert advice and insight. Is that true? Uh, I am, uh, I did make contributions to the
00:47:40mandate for leadership, uh, if that's the question. So, yes. Uh, were you compensated
00:47:47in any way for your work in Project 2025, uh, financially or otherwise? Um. You can't
00:47:56remember? Um, you were again thanked specifically for your work on Chapter 2, titled The Executive
00:48:03Office of the President of the United States, and that chapter says that a great challenge
00:48:09confronting a conservative president is the existential need for aggressive use of the
00:48:15vast powers of the executive branch to bend or break the bureaucracy to the presidential
00:48:21will. That's on page 44. Were you involved in crafting these extreme proposals? Uh, uh,
00:48:30Congresswoman, I, um, I contributed paragraphs to that chapter on OIRA review. Uh, I'd be
00:48:34happy to talk about the substance of those, of those paragraphs, if you like. So, yes.
00:48:39Uh, ma'am, those paragraphs aren't about OIRA review. I contributed paragraphs to that chapter
00:48:42about . . . I can't understand what you're saying, sir.
00:48:44Yes or no? So, I contributed, uh, paragraphs to that chapter . . .
00:48:46You did. Okay. . . . . . . about OIRA review. And this paragraph is not about OIRA review.
00:48:49Project 2025 also contains efforts to promote climate denialism within executive agencies.
00:48:57This includes plans to downsize the Environmental Protection Agency and the Department of Energy's
00:49:03focus on climate change and break up and reduce the size of NOAA, which the project describes
00:49:10as one of the main drivers of the climate change alarm industry. That's on page 675.
00:49:18And by the way, colleagues, um, I'm also a member of the Appropriations Committee. In
00:49:23the Republican budget, they have, um, included a 25% decrease to this very agency, eliminating
00:49:33this agency. So, there is no false alarm here. Dismantling NOAA and its ability to address
00:49:40wildfires and other extreme climate weather is very . . . is a very real problem for constituents
00:49:47in my district and communities across California. Uh, did you contribute to Project 2025, uh,
00:49:54emphasis on climate denialism and dismantling of the agency powers to combat the very real
00:50:00issue of climate change, Mr. Ray? Uh, Mrs. Torres, I contributed, um, several
00:50:05paragraphs on OIRA review. That was my . . . my principal substantive contribution . . .
00:50:08So, your answer is yes. Finally, Project 2025 recommends limiting women's access to
00:50:14essential reproductive health care and reproductive freedom. Did you contribute? Um, that's also
00:50:20on page 489. Did you contribute to these recommendations? Uh, so, again, Congresswoman, my principal
00:50:28contribution to the project, uh, in terms of . . . of text for the mandate . . .
00:50:32Um, Mr. Chair, since the witness has a mouthful of words and no real answers, I would like
00:50:38to, um, request anonymous consent to enter all 922 pages of Trump's Project 2025 into
00:50:46the record so that the American people can see for themselves how deeply terrifying this
00:50:52Trump authoritarian manifesto really is and how it is going to impact the lives of . . .
00:50:58Without objection . . . . . . every single man, woman, and child
00:51:00in this country. Without objection.
00:51:02Thank you. Uh, we will now commence a second round of
00:51:05questions, um, and . . . and I know we have a couple of other colleagues, I think, joining
00:51:09in this process. Um, I want to take a second here and . . . and dive in. Mr. Cruz, you've
00:51:14done great work kind of walking through the cost of a lot of the . . . the regulations,
00:51:18uh, that are put out. Uh, I'm going to jump though. I want to ask Mr. Tallent and Mr.
00:51:22Ray, pulling from your experience at OIRA, um, how should Congress address major rules
00:51:29when they're already final, but the financial impact of the rule, um, isn't realized until
00:51:33years after, uh, the regulation is final? Uh, so I would say, um, Congress has already
00:51:44taken steps to achieve that objective by requiring retrospective review. Um, but retrospective
00:51:50review could be . . . could be enhanced quite significantly. Um, uh, um, under the Small
00:51:55Business Regulatory Flexibility Act, agencies are required, with respect to major rules,
00:52:01to, um, go back several years after . . . after issuance of the rule and assess the, um, impacts
00:52:05and continued need for the regulation. Um, but agencies regularly skirt that requirement.
00:52:10Congress could do much more to give teeth to the requirement and . . . and make the
00:52:13agencies basically, um, participate in . . . in that process more robustly. Thank you. Mr.
00:52:19Tallent? Um, so along those lines, uh, one, uh, proposal that I worked on when I was in
00:52:24the Senate was a bipartisan proposal that would require, um, as part of the rulemaking
00:52:30itself, a prospective plan to look back within a fixed number of, uh, of years and conduct
00:52:38that retrospective review, right? So, it's not just a future promise. It's actually part
00:52:42of the rule itself has to contain this plan to say, within, say, five years, the agency
00:52:48will look at the . . . the following data, these indicators to determine to the degree
00:52:53to which the rule is accomplishing, um, both their goal and meeting the in . . . intent
00:52:59of Congress. Um, I would . . . I would also, um, note that we get a little bogged down.
00:53:07I think everyone in that, uh, policymaking is Congress goes first and then there's this
00:53:13agency action and then maybe there's a, a court action later. But it's actually circular
00:53:17and it's actually a process and it's not just handing off one. So, I spoke to a group of
00:53:21Congressional staff on Friday about what this means for their job. Congress, Congressional
00:53:25staff should be engaged from the beginning with the agency and not waiting for a proposal
00:53:31to go public. So, I'm going to build on that. So, Mr. Kosar, in your, your opening remarks,
00:53:36you referenced kind of building out the Congressional Research Office. I'm thinking of other ways
00:53:40that we can pull current staff into this work rather than simply just throwing more money
00:53:45at the problem. Um, it . . . give me a little more color on, on that idea, what that would
00:53:51look like. Or are there areas where we could pull from inside, uh, the federal employee,
00:53:56uh, group currently rather than simply allocating additional resources and hiring more people?
00:54:01Boy, I wish I could point to some, uh, legislative, legislative branch support agency personnel
00:54:07and say, these, these folks are not doing enough and they should be repurposed to, to
00:54:11this more important thing, which is super, super important. Uh, but I just can't. Um,
00:54:16you know, when I looked at the numbers, uh, amongst the legislative branch, uh, civil
00:54:22servants, uh, who help with policy or made it related matters, uh, the number of them
00:54:27has gone down since the 1980s, but the federal government's expanse and the regulatory state's
00:54:31gone up. And so, like, I just can't figure out how to repurpose. Understood. Does, does
00:54:35anyone else have an, an area where they might build a pull from? We have 2.2 million non-military
00:54:40federal employees. It seems like there, we should be thinking about an avenue. And if,
00:54:46if not, I would charge you, uh, to, to all sharpen our pens and to think about inside
00:54:51the rulemaking administrative state, whether or not we can reallocate some of those resources
00:54:56back into the congressional side, into the congressional side. Mr. Cruz, I'll, I'll give
00:55:01it very briefly. Just quickly, you were talking, you were talking about retrospective review.
00:55:05One thing that would force that is if you did some form of sunsetting, which has some
00:55:09bipartisan pedigree that we talked about, and that would help you figure out where you
00:55:13think you actually need to regulate things. You've got economic, social, health and safety,
00:55:18uh, paperwork costs and things like that. So, that would force you to look at some of
00:55:22those things, perhaps, and then decide where you ought to regulate. And then, remember,
00:55:26most regulations aren't written yet. So, unfortunately. So, one thing you can think about is what
00:55:32the workloads are in the future. And as Congress takes on more of the authority with writing
00:55:36statutes that are directed the way you want, that helps you, too, when thinking about what
00:55:40you do on the retrospective basis. Thank you very much. I'll now recognize the, the ranking
00:55:43member. Thank you, uh, Mr. Chair. I, I continue to, uh, be really concerned about the size
00:55:53of the capacity of Congress to do it, and particularly given the environment we're in
00:55:57where we, we haven't been able to pass a legislative appropriation, uh, that is so small. But I
00:56:02wanted a, uh, if I could, uh, Professor, uh, Chavez, the, one of the things, prior to this
00:56:09decision, agencies were able to use existing authorities to issue new rules related to
00:56:15emerging challenges or technologies with, with relative ease. I know that in, uh, during
00:56:23the oral argument in Loper-Bright, um, Justice Kagan expressed that overturning Chevron would
00:56:29hinder agencies' abilities to, I want to get the quote, capture the opportunities, but
00:56:34also meet the challenges of regulating, for instance, artificial intelligence, which,
00:56:39you know, Congress gave the authority to agencies without even knowing what artificial intelligence
00:56:44is. So would we, you know, in, in some ways, how might the decision affect the ability
00:56:50of agencies to respond quickly to advances in technology like artificial intelligence
00:56:56or other challenges? Uh, well, so, I'd, I'd like to begin by noting that, that agencies
00:57:01can do almost nothing with relative ease, or I suppose you'd have to emphasize relative
00:57:05a great deal, right? Most agency rulemaking takes years. Um, and so the idea that this
00:57:10is something that, that, that agencies just sort of pop off and create regulations all
00:57:13the time, uh, I think is somewhat misleading, right? There's a lot of time and effort, um,
00:57:18and conversations that go into producing rulemaking in the first place. But, you know, one of
00:57:22the things that, that Loper-Bright, uh, does is says that if agencies want to get any deference
00:57:26at all, even the lesser sort of so-called Skidmore deference, which is basically just
00:57:30sort of respect for, uh, for the agency's expertise, if they want to get, take advantage
00:57:34even of that, um, their interpretation has to remain consistent over time. Um, and, and
00:57:39this is a problem because facts on the ground change over time. And so when I look back,
00:57:44uh, for example, uh, so, uh, uh, Representative Loudermilk was referring to, to Justice Scalia
00:57:48earlier. Justice Scalia was a huge fan of the Chevron decision. When I look back to
00:57:52his, uh, major essay praising the Chevron decision, one of the things he praises is
00:57:56its ability to be responsive to changes over time such that agencies don't get locked into
00:58:01their first interpretation. The Supreme Court has now done a 180 on that and said, essentially,
00:58:06if you want even minimal respect for your interpretation, you have to be locked into
00:58:10the first decision you make. AI is a great example. You know, the, the agencies are just
00:58:14coming to terms with AI now. Who knows what the state of AI will be in five or 10 years.
00:58:18Um, it seems crazy to lock them into their initial interpretations, uh, at this point.
00:58:23Um, just to continue along, even prior to the, um, overturning of Chevron, I think your
00:58:30work has highlighted the recent pattern of what you refer to as judicial self-aggrandizement.
00:58:36Um, this decision, uh, would continue that trend, certainly, and I, I wonder if, if you
00:58:43could just talk about the broader patterns that you've identified in that regard.
00:58:47Sure. Well, I think you can see this across a huge number of areas of law, uh, whether
00:58:52we're talking about the Supreme Court's cases on, uh, congressional oversight or on election
00:58:56law, but just within administrative law, um, uh, there are a huge number of ways in which
00:59:00the Roberts court has, uh, sort of taken it upon itself to tell Congress that it's structuring
00:59:05the administrative state wrong. So there've been a bunch of decisions in recent years,
00:59:09um, uh, saying that the way that Congress has structured various agencies is unconstitutional,
00:59:13uh, because it limits, uh, the removability of certain officers. There have been the major
00:59:18questions doctrine cases, which basically say that the most natural reading, uh, of
00:59:22a particular statute won't, won't be allowed to go into effect, uh, uh, if the Supreme
00:59:26Court decides that the, that what the agency has done is major. Uh, but of course it gives
00:59:30us no real way of determining whether or not something, uh, counts as major. Um, uh, uh,
00:59:36there have been, um, uh, the, the Jarchese case, right, taking away, uh, the, the ability
00:59:40that Congress had given to agencies to do, uh, internal adjudication in some cases, right?
00:59:45All of these are situations in which Congress, uh, tried to create certain structures and
00:59:49forms in the administrative state, and the Supreme Court has come in and said, no, we
00:59:52know better, we're going to undo that, and the administrative state is going to be structured
00:59:55the way we, the court, wants to structure it. In my view, the best label for that is
00:59:58judicial self-aggrandizement. Yeah, if I can, it, one of the interesting things about this
01:00:02and much of the conversation that you hear post-Chevron is that prior to this decision
01:00:08that you couldn't overturn an administrative ruling, but you still had access to the courts
01:00:12prior to Chevron. Do you want to just talk about that for just in the remaining seconds
01:00:17we have? Absolutely. So Chevron was a two-step test, and step one was if Congress has clearly
01:00:22expressed itself, that's the end of the story, right? If Congress has clearly expressed itself,
01:00:25you, the agency has to do what Congress says. Only if the statute is silent or ambiguous
01:00:30under Chevron would, um, uh, would there be any, uh, uh, deference given by the courts.
01:00:35And then beyond that, the Administrative Procedure Act creates a whole host of procedures that
01:00:39the agencies have to go through in order to regulate. And if the, if, if the courts
01:00:43didn't think that the agencies went through the correct procedures, they could also, uh,
01:00:47vacate regulations, right? So it's not that there was unconstrained regulatory authority
01:00:50in the agencies. They had regular, they had, they had, they had procedural requirements,
01:00:55and of course, if Congress spoke to the issue, they had to do what Congress said. It's only
01:00:58if they went through the correct procedures and, uh, Congress had been silent or ambiguous
01:01:03that they, that they got any deference under Chevron. Very good. And I know I've exceeded
01:01:07my time. I yield back. Thank you. The gentleman yields back. Ms. Lee is recognized for five
01:01:10minutes. Thank you, Mr. Chairman, for holding this important hearing, and thank you to all
01:01:15of our witnesses for appearing before the committee today. The Supreme Court's recent
01:01:20decision in Loper corrects decades of regulatory overreach by the executive branch and rightfully
01:01:26reasserts the separation of powers as intended by the framers of the Constitution. It ensures
01:01:32that the will of the American people is heard through laws written by their elected representatives.
01:01:38As a former judge, I agree that the power and responsibility of interpreting the law
01:01:43belongs to the courts, not unelected government bureaucrats. The clearer the law, the easier
01:01:48it is for judges to faithfully and accurately apply and interpret the law. Congress, therefore,
01:01:54has a renewed call to assert its legislative authority and write clear and precise laws.
01:02:00Dr. Kosar, I'd like to begin with you. You have written extensively about Congress establishing
01:02:07a congressional regulatory office, which would likely be a longer-term project for us to
01:02:12undertake for the interim, or in the case where Congress chooses not to establish a
01:02:17permanent office. How can Congress strike a balance with its role in the rulemaking
01:02:23process that leverages agency expertise while maintaining strict legislative oversight
01:02:31and accountability?
01:02:32Well, in the short term, if you can't get the purse strings loose enough to do a little
01:02:40pilot, say, within the CBO to test it out, particularly, say, within an issue area of
01:02:46real concern, you can try to draw upon the existing legislative branch folks more aggressively.
01:02:55You know, I spent 10 years at the Congressional Research Service. I don't recall once, in
01:03:00the thousands of requests I got, a member saying to me, hey, there's this proposed rule
01:03:04in your issue area. What do you make of it? Can you at least write me a memo and explain
01:03:08to me what this means and whether I should be concerned about the extent of the regulation,
01:03:13whether it's proper? That would be one means.
01:03:18And you just touched on what I really was interested in as my next question, which is,
01:03:23how can we facilitate, how can we better facilitate meaningful collaboration between lawmakers,
01:03:30legislative staff, and then agency experts to really draw upon all of that collective
01:03:36experience during the legislative drafting process?
01:03:41Yeah, the drafting process. Well, I think the drafting process, in many instances, has
01:03:46been bedeviled because there's not a regular order being followed. You know, bills are
01:03:51being slapped together with a lot of other bills. You guys are being called to the floor
01:03:56and told it's time to vote on the rule, and please line up by party and don't scuttle
01:04:01things. Re-orienting, getting back to a more regular process where committees are in the
01:04:06seat and when committees report out a bill, those things get preference on the calendar,
01:04:10would allow a process by which you could be more deliberative and you could draw more
01:04:15on the expertise that's already available to you and get it in there.
01:04:20Mr. Cruz, as you know, in 2023, the Biden administration released Executive Order 14094,
01:04:28which raises the threshold for which regulations are considered highly significant and drastically
01:04:33increased regulatory costs. How would you compare the Biden administration's approach
01:04:37to regulatory action with that of the previous administration?
01:04:40Well, the Trump administration was defined by basically a regulatory cost budget. The
01:04:46one-in, two-out mechanism put that into place, and according to the data released, it worked.
01:04:53You could say there was low-hanging fruit there, and once you got rid of some low-hanging,
01:04:58costly regulations, it was hard to do others. But things have changed with respect to Biden
01:05:03in the sense of we used to consider a regulation economically significant if it was $100 million.
01:05:09That term has completely disappeared. If you go onto the OIRA website now and go to the
01:05:13database of rules and regulations in the unified agenda, the term is completely wiped out and
01:05:20it's replaced with Section 3F1 significant rules. It's not as poetic anymore.
01:05:25But you can still find those $100 million major rules purely thanks to the majorly bipartisan
01:05:33Congressional Review Act. So you guys still have something that you can sink your teeth
01:05:38into with respect to tracking major rules and some of these other projects you were
01:05:42indicating with respect to looking back. And I can tell you the new unified agenda came
01:05:46out late again, as we were discussing earlier, when the new unified agenda came out, and
01:05:52you would expect that with $200 million threshold that the numbers of rules would come down
01:05:57a good bit that were S3F1. You would expect that to occur. But no. In this current push,
01:06:05you know, the CRA gives an incentive to an outgoing administration or potentially outgoing
01:06:10administration, because it's an election year, to jack up the number of rules. And that's
01:06:13exactly what we saw. So in the new unified agenda, there's a big jump in $200 million
01:06:18rules above what you might have expected. But you still need to monitor the ones that
01:06:22are beneath that level as well.
01:06:25Thank you. Mr. Chairman, I yield back.
01:06:26The gentleman yields back. Mr. D'Esposito is recognized for five minutes.
01:06:30Thank you, Mr. Chairman, and good morning, or I guess now good afternoon, everyone. Something
01:06:35that members do not regularly do is participate in the formal comment period for a rule. Should
01:06:41members of Congress or the chairs and ranking members of committees file comments during
01:06:46the notice and comment period of a rule to express their disagreement or even agreement
01:06:50with the contents and direction of the rule? It's really open for all of you.
01:06:55I think this is an incredibly undervalued tool for members, and I, for the life of me,
01:07:01don't understand why members don't. More frequently, in my time on the Hill, I encouraged members
01:07:08to participate in the process. There was maybe, and I don't want to speak for members of Congress,
01:07:14but it felt like that's for the public, we're not the public, and so it's beneath us, maybe.
01:07:20I may be overstating that, but I don't think you should see that as the case. I mean, this
01:07:24is the agency receiving all input, and by the way, courts would put a fair amount of
01:07:31deference to what members of Congress say, especially members of a committee of jurisdiction,
01:07:36in saying, this looks like what we asked you to do, or this doesn't look like, or we hope
01:07:40you consider these factors. Mr. Cruz?
01:07:43I would just say this is a little bit of a chance to maybe squeak something in, because
01:07:47there's been a lot of talk today about expertise, and I would submit to you that what agencies
01:07:53provide is not always expertise. A free market doesn't just mean companies go out and do
01:07:58whatever they want. You've got businesses, you've got upstream suppliers, downstream
01:08:03business customers, media, advertisers, consumers, all these forces that regulate, so to speak,
01:08:10businesses that potentially misbehave, and you don't want to just jump in with the regulation
01:08:15if you're undermining the other kinds of disciplines that emerge. Companies don't operate in a
01:08:19vacuum. They have all of those forces, and part of the free enterprise system is creating
01:08:24not just the new product or service, but also the disciplinary measures that go alongside,
01:08:29and I would submit to you that a lot of expertise on AI is not in agencies. The expertise with
01:08:34respect to allocating drone traffic and airspace does not exist at agencies, so part of your
01:08:40commentary, if you take up that kind of a project, would be to challenge the notion
01:08:45of expertise, which is also going to play into the notion of a Congressional Office
01:08:49of Regulatory Analysis, too.
01:08:51Anybody else?
01:08:53Yes. I would just say that, absolutely, I again agree with this fellow, but the real
01:09:00trick is being able, not just able to send it in, but having the knowledge base to deal
01:09:07with this stuff. I mean, pull out the Federal Register, and you start looking at these regs,
01:09:10and your eyes glaze over, your head hurts. I mean, there's just no way, unless you just
01:09:15happen to have somebody in your office or working for your committee, that you can meaningfully
01:09:20comment on this. This would take weeks and weeks and weeks to study, like this HUD rule
01:09:24that I'm looking at here. Twenty-two to twenty-eight pages, just the proposed notice.
01:09:29So to that point, GAO has written about a potential new legislative branch known as
01:09:35the Office of Legal Counsel. Are you in favor of that? Do you think that that could help
01:09:39with this process? And I guess, could anybody explain what you think that would look like?
01:09:46Sure. Briefly, yeah, I read that report, and I guess it depends on how you view the challenge
01:09:54of legislators meaningfully participating. If it's, well, we need to draft better, we
01:09:59need to be more precise, so we don't inadvertently delegate authority away, yes, that could be
01:10:05quite helpful. But when it comes to the substantive knowledge of the issue area, and the ability
01:10:11to double-check the numbers that executive agencies give when they do the benefit-cost
01:10:15analysis and say, hey, this reg is going to be wonderful for America, you don't have anything.
01:10:21And I'm not sure that sort of knowledge would rest in the legislative counsel office.
01:10:25I would tag on to that just briefly. I would generally support anything that increases
01:10:30congressional capacity, and if I can reference the ranking member's comment about the inability
01:10:36to add on appropriations and staff, and also his penchant for love it or list it. I'm more
01:10:43of a say yes to the dress kind of guy, but the point of the show, I think, is that we
01:10:49look for reasonable opportunities for improvement. GAO already has a statutory role as part of
01:10:55the Congressional Review Act. CBO has a number of analysts, and they have a mechanism for
01:11:01analyzing proposals. Those things exist even short of a whole new committee, or a whole
01:11:07new office, or, you know, 2,000 new staff.
01:11:10My time's just about expired. Mr. Chairman, I yield back.
01:11:14Chairman yields back. This concludes our questions. I thank all of our witnesses today. It's been
01:11:18a really interesting conversation about how we prepare to structure Congress in a post-Chevron
01:11:24doctrine world. Members of the committee, may I have some additional questions for you,
01:11:28and we ask that you please respond to those questions in writing. I'll also submit written
01:11:32testimony from Doug Holtz-Eakin, president of the American Action Forum, and from Marcy
01:11:38Harris of PopVox into the record. Without objection, each member will have five legislative
01:11:43days to insert additional material into the record, or to revise and extend their remarks.
01:11:47If there's no further business, I thank the members for their participation. Without objection,
01:11:51the committee stands adjourned.

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