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113th Congress   }                                   {    Rept. 113-675
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                   {           Part 1

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



 
SEARCHING FOR AND CUTTING REGULATIONS THAT ARE UNNECESSARILY BURDENSOME 
                              ACT OF 2014

                                _______
                                

               December 12, 2014.--Ordered to be printed

                                _______
                                

   Mr. Goodlatte, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 4874]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 4874) to provide for the establishment of a process 
for the review of rules and sets of rules, and for other 
purposes, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.




                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     7
Committee Consideration..........................................     7
Committee Votes..................................................     7
Committee Oversight Findings.....................................     9
New Budget Authority and Tax Expenditures........................     9
Congressional Budget Office Cost Estimate........................     9
Duplication of Federal Programs..................................     9
Disclosure of Directed Rule Makings..............................     9
Performance Goals and Objectives.................................    10
Advisory on Earmarks.............................................    10
Section-by-Section Analysis......................................    10
Dissenting Views.................................................    12

                          Purpose and Summary

    H.R. 4874, the ``Searching for and Cutting Regulations that 
are Unnecessarily Burdensome Act of 2014'' (SCRUB Act) 
establishes a blue-ribbon Retrospective Regulatory Review 
Commission to identify and recommend to Congress for repeal 
existing Federal regulations that can be eliminated to reduce 
unnecessary regulatory costs to the U.S. economy. The 
Commission is charged to reduce these costs without 
significantly reducing overall regulatory effectiveness, by, 
for example, identifying and recommending for repeal 
regulations that have achieved their goals and can be repealed 
without their target problems recurring; are obsolete or 
ineffective; overlap, duplicate or conflict with other Federal 
regulations or state and local regulations; or, impose costs 
that are not justified by the benefits they produce for society 
within the United States.

                Background and Need for the Legislation

         I. JOBS, GROWTH AND THE IMPACT OF FEDERAL REGULATIONS

    Since the official end of the recent recession was declared 
in 2009, numerous observers have attributed the economy's 
continuing slow rates of job creation and growth in part to the 
burden of Federal regulation and uncertainty over what 
regulation will come next.\1\ According to some estimates, the 
total annual Federal regulatory burden has reached $1.75-$1.86 
trillion, or in the neighborhood of $15,000 per year for each 
U.S. household.\2\ Americans for Tax Reform estimated in August 
2011 that Americans worked an estimated 77 days per year just 
to cover the cost of the Federal regulatory burden.\3\ 
According to recent Gallup survey results, small-business 
owners in the United States continue to list government 
regulation as one of the top challenges they confront.\4\
---------------------------------------------------------------------------
    \1\See, e.g., Editors, The Uncertainty Principle, The Wall Street 
Journal (July 14, 2010) (available at http://online.wsj.com/article/
SB10001424052748704288204575363162664835780.html?
KEYWORDS=rulemakings); John B. Taylor, ``John Taylor: Rules for 
America's Road to Recovery,'' The Wall Street Journal (May 31, 2012) 
(available at http://online.wsj.com/article/
SB10001424052702303674004577434774238817962.html).
    \2\See Clyde Wayne Crews, Jr., Ten Thousand Commandments 2014, An 
Annual Snapshot of the Regulatory State, at 2 (April 2014) (available 
at http://cei.org/studies/ten-thousand-commandments-2014); Nicole V. 
Crain & W. Mark Crain, The Impact of Regulatory Costs on Small Firms, 
Small Business Administration, 6 & 48 (Sept. 2010) (available at http:/
/www.sba.gov/sites/default/files/rs371tot.pdf).
    \3\Americans for Tax Reform, 2011 Cost of Government Day, August 12 
(Aug. 10, 2011), (available at http://www.atr.org/?content=2011COGD).
    \4\Gallup Economy, Small Businesses Face Operational, Regulatory 
Challenges (Feb. 28, 2014) (available at http://www.gallup.com/poll/
167660/small-businesses-face-operational-regulatory-challenges.aspx).
---------------------------------------------------------------------------
    Executive orders since the 1980's have required regulatory 
agencies to identify clearly the problems their regulations are 
intended to solve, available regulatory alternatives (including 
the alternative of not regulating), and the costs and benefits 
of new regulations. Notwithstanding that, however, many Federal 
regulations currently in effect have been ill-considered and 
not clearly necessary. For example, the Obama administration 
has regularly failed to analyze both the costs and the benefits 
of substantial numbers of major regulations.\5\,\6\ 
Similarly, in a multi-year study of major regulations, the 
Mercatus Center found that agencies did a poor job satisfying a 
host of basic rulemaking quality standards. These included the 
identification of clear problems requiring regulatory 
solutions, analysis of adequate alternatives, assessment of 
costs and benefits, and demonstration that chosen regulations 
would produce the agencies' desired outcomes.\7\ Consistent 
with these results, there is bipartisan agreement that too many 
regulations currently in force are defective, and that many of 
these regulations can be revisited and eliminated or 
improved.\8\
---------------------------------------------------------------------------
    \5\``Major'' regulations generally are those with $100 million or 
more in effects. See, e.g., Executive Order 12866 at sec. 3(f) (Sept. 
30, 1993).
    \6\See Office of Information and Regulatory Affairs, 2010 Report to 
Congress on the Benefits and Costs of Federal Regulations and Unfunded 
Mandates on State, Local, and Tribal Entities at 3 (2010) (available at 
http://www.whitehouse.gov/sites/default/files/omb/legislative/reports/
2010_Benefit_Cost_Report.pdf); Office of Information and Regulatory 
Affairs, 2011 Report to Congress on the Benefits and Costs of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal Entities 
at 3 (2011) (available at http://www.whitehouse.gov/sites/default/
files/omb/inforeg/2011_cb/2011_cba_report.pdf); Office of Information 
and Regulatory Affairs, 2012 Report to Congress on the Benefits and 
Costs of Federal Regulations and Unfunded Mandates on State, Local, and 
Tribal Entities at 3-4 (2012) (available at http://www.whitehouse.gov/
sites/default/files/omb/inforeg/2012_cb/2012_cost_benefit_report.pdf); 
Office of Information and Regulatory Affairs, 2013 Report to Congress 
on the Benefits and Costs of Federal Regulations and Unfunded Mandates 
on State, Local, and Tribal Entities at 4 (2014) (available at http://
www.whitehouse.gov/sites/default/files/omb/inforeg/2013_cb/
2013_cost_benefit_report-updated.pdf).
    \7\See generally Mercatus Center, Regulatory Report Card, available 
at: http://mercatus.org/reportcard. For a description of the Report 
Card's methodology, see http://mercatus.org/reportcards/methodology.
    \8\See, e.g., Executive Order 13563, Improving Regulation and 
Regulatory Review, at sec. 6, 76 Fed. Reg. 3821, 3822 (Jan. 18, 2011) 
(agencies shall consider how best to promote retrospective analysis of 
rules that may be outmoded, ineffective, insufficient, or excessively 
burdensome, and to modify, streamline, expand, or repeal them in 
accordance with what has been learned); Pres. Barack Obama, Toward a 
21st Century Regulatory System, The Wall Street Journal (January 18, 
2011) (E.O. 13563 ``orders a government-wide review of the rules 
already on the books to remove outdated regulations that stifle job 
creation and make our economy less competitive'') (available at http://
online.wsj.com/article/SB10001424052748703396604576088272112103698.
html).
---------------------------------------------------------------------------

        II. RETROSPECTIVE REVIEW EFFORTS BY THE EXECUTIVE BRANCH

    The Obama administration has issued three executive orders 
that in whole or in part call for retrospective review of 
existing regulations. First and foremost is Executive Order 
13563, issued on January 18, 2011. Among other things, that 
order calls upon executive agencies to conduct, under the 
oversight of the Office of Management and Budget's Office of 
Information and Regulatory Affairs (OIRA), a retrospective 
review of existing, significant regulations to identify which 
``may be outmoded, ineffective, insufficient, or excessively 
burdensome, and to modify, streamline, expand, or repeal them 
in accordance with'' the findings of the retrospective 
review.\9\ The order further calls for such review to be 
conducted periodically thereafter, so that agencies regularly 
can ``determine whether any such regulations should be 
modified, streamlined, expanded, or repealed so as to make the 
agency's regulatory program more effective or less burdensome 
in achieving the regulatory objectives.''\10\
---------------------------------------------------------------------------
    \9\76 Fed. Reg. at 3822.
    \10\Id.
---------------------------------------------------------------------------
    Seven months later, on July 7, 2011, President Obama issued 
another executive order, E.O. 13579, directed at independent 
agencies, such as the Federal Communications Commission, the 
Federal Reserve Board and the Securities Exchange Commission. 
These agencies fell outside the requirements of E.O. 13563 and 
prior orders, such as E.O. 12866, due in part to hesitancy by 
presidents to assert direct White House control over 
independent agencies' regulatory decisions. In E.O. 13579, the 
President exhorted independent agencies, like the executive 
agencies addressed by E.O. 13563, to conduct retrospective 
analyses of existing significant regulations and to prepare 
plans under which independent agencies would thereafter 
periodically conduct similar retrospective reviews to determine 
whether any such regulations should be modified, streamlined, 
expanded, or repealed.\11\ Unlike executive agencies, 
independent agencies were not ordered to submit such plans to 
OIRA, but rather simply to release the plans to the public.\12\
---------------------------------------------------------------------------
    \11\Id.
    \12\Id.
---------------------------------------------------------------------------
    Finally, on May 10, 2012, the President released Executive 
Order 13610, ``Identifying and Reducing Regulatory Burdens.'' 
This order ``invites public participation to help agencies 
determine whether existing regulations remain justified and 
whether they should be modified or streamlined in light of 
changed circumstances, including the rise of new 
technologies.''\13\ It also ``instructs agencies to give 
priority to initiatives that will produce significant monetary 
savings or reductions in paperwork burdens while protecting 
public health, welfare, safety, and the environment.''\14\ 
Finally, the order ``[r]equires agencies to regularly report to 
OIRA on retrospective review efforts, including their progress, 
anticipated accomplishments, and proposed timelines for 
relevant actions.''\15\ The first of these reports was due on 
September 10, 2012. Reports were due thereafter on the second 
Monday of January and July of each year.
---------------------------------------------------------------------------
    \13\77 Fed. Reg. 28,469 (May 14, 2012).
    \14\Id. at 28,470.
    \15\Id.
---------------------------------------------------------------------------
    Notwithstanding their goals in concept, these executive 
orders have from the outset produced few meaningful results in 
practice. For example, the Heritage Foundation's July 25, 2011, 
mid-year report on growth in Federal regulation reported that, 
notwithstanding the issuance of E.O. 13563, `[i]n the first 6 
months of the 2011 fiscal year . . . [n]o major rulemaking 
actions were taken to reduce regulatory burdens during this 
period.'' From January 2009 to mid-FY 2011, ``there were only 
six major deregulatory actions . . . , with reported savings of 
just $1.5 billion.''\16\ The Administration's own preliminary 
results of the E.O. 13563 review, released in May 2011, 
suggested that the Administration had identified only about $1 
billion a year in potential regulatory burden reductions from 
the repeal or modification of existing regulations.\17\ More 
recently, in a January 2014 assessment of the Administration's 
retrospective review effort, the American Action Forum (AAF) 
determined that ``[o]n net, proposed and final rules that have 
come under this reform have added $13.7 billion in new 
burdens,'' although ``counting only regulations that cut costs, 
the Administration has cut at least $8.7 billion in 
burdens.''\18\
---------------------------------------------------------------------------
    \16\James Gattuso and Diane Katz, Red Tape Rising: A 2011 Mid-Year 
Report, the Heritage Foundation (July 25, 2011) (``Red Tape Rising Mid-
Year Report'') (available at http://www.heritage.org/research/reports/
2011/07/red-tape-rising-a-2011-mid-year-report).
    \17\Red Tape Rising Mid-Year Report.
    \18\Sam Batkins, Three Years of Regulatory Reform: Did the 
President's Executive Orders Work?, American Action Forum (Jan. 21, 
2014) (emphasis added) (available at http://americanactionforum.org/
insights/three-years-of-regulatory-reform-did-the-presidents-executive-
orders-work).
---------------------------------------------------------------------------
    In and of itself, a reduction of $8.7 billion in regulatory 
costs, if it actually occurred, would be a positive 
development. However, if the net result of activity under the 
Administration's regulatory reform initiative has been the 
addition of $13.7 billion in regulatory burdens, then it 
appears that the Administration's effort has failed. Making 
matters worse, regulatory activity under the current 
Administration outside of the retrospective review initiative 
has dwarfed any results of the Administration's retrospective 
review. According to AAF, between 2010 and early 2014, the 
total burden of paperwork hours imposed by Federal regulation 
increased by 1.5 billion hours, or 17 percent, and the Obama 
administration added $488 billion in new regulatory costs 
between 2009 and 2012.\19\ The Heritage Foundation has 
estimated that new regulatory costs just from major regulations 
totaled roughly $70 billion during the Administration's first 
term.\20\
---------------------------------------------------------------------------
    \19\Sam Batkins, President Obama's $488 Billion Regulatory Burden, 
at 3, American Action Forum (Sept. 19, 2012) (available at http://
americanactionforum.org/research/president-obamas-488-billion-
regulatory-burden).
    \20\James Gattuso and Diane Katz, Red Tape Rising: Regulation in 
Obama's First Term, the Heritage Foundation (May 1, 2013) (available at 
http://www.heritage.org/research/reports/2013/05/red-tape-rising-
regulation-in-obamas-first-term).
---------------------------------------------------------------------------
    From 2003 to 2006, the George W. Bush administration also 
engaged in retrospective review of existing regulations. Its 
aim, like the Obama administration's stated goal, was to 
identify and modify or rescind regulations that performed 
suboptimally. Also like the Obama administration, the Bush 
administration conducted its review under OIRA's oversight and 
with opportunities for the public to identify problematic 
regulations. The Bush administration's effort, however, 
likewise did not produce major results.
    There are a number of reasons for which retrospective 
review efforts to date may not have produced significant 
results. Regulatory agencies, on the one hand, have strong 
incentives to focus their resources on prospective regulatory 
activities that address new problems and congressional 
mandates. They have much weaker incentives to revisit their 
past work at their own instance, or even at the Executive's 
instances, examine that work, brand it as unnecessary, 
ineffective or counterproductive, and repeal or amend it. 
Regulated entities, meanwhile, have strong incentives to focus 
their resources on the shaping of new regulations and the 
prevention of unsound new regulations, rather than on the 
nomination of old regulations that agencies should modify or 
rescind. For example, post-hoc attempts by regulated entities 
at their own instance to identify old regulations for repeal or 
amendment can antagonize the very regulatory agencies with 
which these entities must deal on a regular basis.

 III. RECENT LEGISLATIVE PROPOSALS AND COMMITTEE OVERSIGHT LEADING TO 
                             THE SCRUB ACT

    Against this background of failure under executive orders 
and other initiatives, a number of proposals to require some 
manner of retrospective regulatory review through the stronger 
means of legislation have been introduced or advocated over the 
past several years, both within the Congress and in the broader 
public. These have included, among others, proposals featuring 
the institution of a blue-ribbon commission, akin to the Base 
Realignment and Closure Commission established under the 
Defense Base Closure and Realignment Act of 1990, Pub. L. No. 
101-510, to identify and recommend to Congress regulations that 
should be repealed, as well as a proposal to require agencies 
to repeal one or more existing regulations when they promulgate 
new regulations.\21\
---------------------------------------------------------------------------
    \21\See, e.g., Michael Mandel, Ph.D., Reviving Jobs and Innovation: 
A Progressive Approach to Improving Regulation, Progressive Policy 
Institute (Feb. 2011) (available at http://progressivepolicy.org/wp-
content/uploads/2011/02/2011_Mandel_A-Progressive-Approach-to-
Improving-Regulation.pdf); Sen. Mark Warner, Self-Replicating 
Regulation: How to Trim Government Overlap, The Atlantic (Mar. 12, 
2012) (available at http://www.theatlantic.com/politics/archive/2012/
03/self-replicating-regulation-how-to-trim-government-overlap/253898/).
---------------------------------------------------------------------------
    The Subcommittee on Courts, Commercial and Administrative 
Law held an oversight hearing on July 12, 2012, at which it 
considered the need for retrospective regulatory review, 
assessed the Obama administration's efforts up to that time, 
and evaluated a number of retrospective review concepts 
proposed up to that point.\22\ All witnesses at the hearing 
agreed that retrospective regulatory review was an important 
concept that deserved serious consideration, although they did 
not all agree on what approach to adopt to carry out this 
function.
---------------------------------------------------------------------------
    \22\Committee on the Judiciary, Subcommittee on Courts, Commercial 
and Administrative Law, Hearing on: ``Clearing the Way for Jobs and 
Growth: Retrospective Review to Reduce Red Tape and Regulations,'' 
(July 12, 2012) (hearing record available at http://
judiciary.house.gov/index.cfm/hearings?ID=37A1AEB4-AFA1-6465-6E4E-
0529E909296F).
---------------------------------------------------------------------------
    To make the most of meritorious aspects of prior proposals, 
including useful concepts from President Obama's executive 
orders, to better align incentives, and to create the most 
effective overall approach, the ``Searching for and Cutting 
Regulations that are Unnecessarily Burdensome Act of 2014,'' or 
``SCRUB Act,'' builds several features of prior proposals and 
initiatives into its architecture, along with innovations of 
its own. In a nutshell, the SCRUB Act institutes an independent 
Retrospective Regulatory Review Commission with authority to 
identify within the Code of Federal Regulations, and with the 
assistance of the public, any regulations or sets of 
regulations that implement regulatory programs that, under 
specified criteria, merit repeal to reduce unnecessary 
regulatory cost burdens. The Commission is empowered to 
recommend the highest priority repeals for immediate action, 
and, if a joint congressional resolution of approval is 
enacted, agencies are required to execute these repeals within 
60 days of enactment. All other regulations recommended by the 
Commission for repeal are placed into an inventory of 
regulations which the agencies must repeal over time through a 
``cut-go'' process as agencies promulgate new regulations. 
Under this process, the costs of each new regulation must be 
offset by cost-reductions associated with the repeal of 
regulations in the inventory, until each agency completes the 
repeals of its own regulations specified in the inventory. 
Agencies are left free to determine the order in which they 
will execute inventory-based repeals. They also remain free to 
promulgate new regulations that re-implement statutory 
authority originally implemented by a regulation in the 
inventory. If they do so, however, they must assure that 
repeals of regulations in the inventory achieve a full, net 
offset of the costs of the new regulation. Finally, when the 
Commission recommends the repeal of a set of rules that 
implement a regulatory program, the Commission is to provide to 
Congress an analysis of whether Congress should consider repeal 
of the underlying statutory authority which the set of 
regulations implemented.
    The Commission is given the goal of achieving at least a 
15% reduction in the cumulative cost burden imposed by Federal 
regulation, without significantly reducing overall regulatory 
effectiveness. Through the institution of this goal, the 
provision of the tools needed to achieve it, and a better 
alignment of incentives to assure the use of those tools, the 
SCRUB Act promises to achieve real, meaningful elimination of 
unnecessary regulatory costs, promoting needed job creation and 
economic growth.

                                Hearings

    The Committee's Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law held 1 day of hearings on H.R. 
4874, as embodied in a draft version of the legislation, on 
February 11, 2014. Testimony was received from Patrick A. 
McLaughlin, Senior Research Fellow, Mercatus Center, George 
Mason University; Sam Batkins, Director of Regulatory Policy, 
American Action Forum; and, Prof. Ronald M. Levin, Washington 
University School of Law, with additional material submitted by 
the Natural Resources Defense Council and the Coalition for 
Sensible Safeguards.

                        Committee Consideration

    On June 18, 2014, the Committee met in open session and 
ordered the bill H.R. 4874 favorably reported without 
amendment, by a rollcall vote of 17 to 10, a quorum being 
present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 4874.
    1. Amendment #2, offered by Mr. Johnson. The Amendment 
strikes title II of the bill, eliminating the bill's regulatory 
``cut-go'' provisions. The amendment was defeated by a rollcall 
vote of 9 to 16.

                             ROLLCALL NO. 1
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Coble (NC).................................              X
Mr. Smith (TX).................................
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................              X
Mr. Forbes (VA)................................
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................              X
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................              X
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X
[Vacant].......................................
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................      X
Mr. Scott (VA).................................      X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI).............................      X
                                                ------------------------
    Total......................................      9      16
------------------------------------------------------------------------

    2. Reporting H.R. 4874. The bill establishes a blue-ribbon 
Retrospective Regulatory Review Commission to identify and 
recommend to Congress for repeal existing Federal regulations 
that can be eliminated to reduce unnecessary regulatory costs 
to the U.S. economy. Reported by a rollcall vote of 17 to 10.

                             ROLLCALL NO. 2
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................      X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Coble (NC).................................      X
Mr. Smith (TX).................................
Mr. Chabot (OH)................................      X
Mr. Bachus (AL)................................      X
Mr. Issa (CA)..................................      X
Mr. Forbes (VA)................................
Mr. King (IA)..................................      X
Mr. Franks (AZ)................................      X
Mr. Gohmert (TX)...............................      X
Mr. Jordan (OH)................................      X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................      X
Mr. Marino (PA)................................      X
Mr. Gowdy (SC).................................      X
Mr. Labrador (ID)..............................
Ms. Farenthold (TX)............................      X
Mr. Holding (NC)...............................      X
Mr. Collins (GA)...............................      X
Mr. DeSantis (FL)..............................      X
Mr. Smith (MO).................................      X
[Vacant].......................................
 
Mr. Conyers, Jr. (MI), Ranking Member..........              X
Mr. Nadler (NY)................................              X
Mr. Scott (VA).................................              X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................              X
Mr. Johnson (GA)...............................              X
Mr. Pierluisi (PR).............................              X
Ms. Chu (CA)...................................              X
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................              X
Mr. Garcia (FL)................................              X
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI).............................              X
                                                ------------------------
    Total......................................     17      10
------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    With respect to clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives, an estimate and comparison 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act of 1974 was 
not submitted to the Committee before the filing of the report.

                    Duplication of Federal Programs

    No provision of H.R. 4874 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 4874 specifically directs 
to be completed no specific rule makings within the meaning of 
5 U.S.C. 551.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
4874 is designed to assure the identification and repeal of 
existing Federal regulations that can be eliminated to reduce 
unnecessary regulatory costs to the U.S. economy, without 
significantly reducing overall regulatory effectiveness, and 
with a goal of reducing by at least 15 percent the cumulative 
cost burden imposed by Federal regulation.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 4874 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
Section 1. Short title.
    Provides that the short title of the bill shall be the 
``Searching for and Cutting Regulations that are Unnecessarily 
Burdensome Act of 2014'' (SCRUB Act of 2014).
Section 2. Table of Contents; Titles I-V
    Title I. Retrospective Regulatory Review Commission
      Sec.101. General Provisions

         LEstablishes a blue-ribbon, BRAC-style 
        commission to review existing Federal regulations and 
        identify those that should be repealed to reduce 
        unnecessary regulatory burdens.

         LSets the Commission's goal to be the 
        reduction of at least 15 percent in the cumulative 
        costs of Federal regulation with a minimal reduction in 
        the overall effectiveness of such regulation.

         LSpecifies classes of regulations that should 
        be the Commission's priorities for review 
        (specifically, rules or sets of rules that: are major 
        rules or include major rules; have been in effect more 
        than 15 years; impose paperwork burdens that could be 
        reduced substantially without significantly diminishing 
        regulatory effectiveness; impose disproportionately 
        high costs on small businesses; or, could be 
        strengthened in their effectiveness while reducing 
        regulatory costs).

         LEstablishes additional factors for the 
        Commission to take into account when identifying 
        individual regulations or sets of regulations for 
        repeal (e.g., the regulations have been rendered 
        obsolete by technological or market changes; the 
        regulations have achieved their goals and can be 
        repealed without target problems recurring; the 
        regulations are ineffective; the regulations overlap, 
        duplicate or conflict with other Federal regulations 
        or, where feasible, with state and local regulations; 
        or, the regulations' costs are not justified by the 
        benefits they produce for society within the United 
        States).

         LAuthorizes the Commission to classify 
        identified regulations for either: (1) immediate 
        repeal; or, (2) repeal through regulatory ``cut-go'' 
        procedures as agencies promulgate new rules. All such 
        must be made by the relevant agencies if a joint 
        resolution of Congress is enacted to approve the 
        Commission's recommendations.

         LRequires the Commission to hold public 
        meetings and publish annual and final reports; 
        authorizes the Commission to hold hearings; provides 
        the Commission with authority to obtain necessary 
        documents and witnesses.

         LAuthorizes funding of the Commission from the 
        unobligated funds of regulatory agencies within the 
        Commission's purview.
    Title II. Regulatory Cut-Go
      Sec. 201. Cut-Go Procedures

         LRequires agencies, when they promulgate new 
        regulations, to offset the new regulations' costs fully 
        by repealing regulations identified by the Commission 
        for repeal other than on an immediate basis.

         LAllows agencies alternatively to repeal 
        Commission-identified regulations on an earlier basis 
        to create cost-reduction credits, and later apply the 
        credits to offset the costs of new regulation.

        Sec. 202. Applicability

         LLifts the Act's cut-go requirements once 
        agencies achieve, by repeal of Commission-identified 
        regulations, all cost reductions the Commission 
        determined could be achieved.

        Sec. 203. OIRA Certification of Cost Calculations

       LRequires the Office of Information and 
Regulatory Affairs to review and certify the accuracy of 
agencies' estimates of the costs of new regulations, include 
the certifications in the administrative records of new 
regulations, and transmit copies of the certifications to 
Congress.
    Title III. Retrospective Review of New Rules
      Sec. 301. Plan for Future Review

         LRequires agencies, when they promulgate new 
        regulations, to publish plans for the review of those 
        regulations. Such reviews are to take place no later 
        than 10 years after promulgation.

         LRequires agency reviews of major regulations 
        (e.g., regulations that impose costs of $100 million or 
        more) to be substantially similar to Commission-
        conducted reviews.

         LRequires agencies, when feasible, to include 
        proposed plans for review in their notices of proposed 
        rulemaking for new regulations.
    Title IV. Judicial Review
      Sec. 401. Judicial Review

         LSubjects to judicial review under the 
        Administrative Procedure Act agency compliance with 
        section 101(j)(1) (immediate repeals), title II of the 
        Act (cut-go repeals) and section 301 (retrospective 
        review plans).
    Title V. Miscellaneous Provisions
      Sec. 501. Definitions

         LSets forth definitions of terms in the Act.

      Sec. 502. Effective Date

         LProvides that the Act and amendments made by 
        the Act shall take effect beginning on the date of 
        enactment.

                            Dissenting Views

                              INTRODUCTION

    H.R. 4874, the ``Searching for and Cutting Regulations that 
are Unnecessarily Burdensome (SCRUB) Act of 2014,'' would 
establish a ``Retrospective Regulatory Review Commission'' 
charged with assessing the economic costs of all agency rules, 
informal interpretive rules, general statements of policy, 
rules of agency organization and procedure, informal guidance 
documents, and memoranda. The Commission's assessment would 
prioritize corporate profits over public health and safety, 
ignoring the many benefits and protections that agency rules 
provide. To finance this review of all rules, informal 
documents, and interpretative rules, H.R. 4874 would siphon 
billions of dollars from agency budgets, diverting these much-
needed funds into an unnecessary bureaucratic accounting 
project.
    Further yet, title II of the bill would establish a 
regulatory ``cut-go'' process that would operate as a one-way 
ratchet, forcing agencies to prioritize between existing 
protections and responding to new threats to our health and 
safety. Regulatory cut-go would prohibit any regulatory agency 
from issuing any new rule or informal statement, even in the 
case of an emergency or imminent harm to public health, until 
the agency first offsets the costs of that new rule or guidance 
by repealing an existing rule specified by the Commission. This 
requirement would place public health and safety at risk as 
well as unnecessarily delay Federal rulemaking by years and 
waste untold taxpayer dollars and agency resources.
    The SCRUB Act is a dangerous solution in search of a 
problem. Each branch of government already conducts effective 
oversight through retrospective review of agency rules, 
narrowing the delegations of authority to agencies, controlling 
agency appropriations, and conducting oversight of agency 
activity. Congress also has the specific authority under the 
Congressional Review Act to disapprove any rule that an agency 
proposes.\1\ Overlooking this array of options that would 
provide the necessary scalpel for smart regulatory cuts, the 
SCRUB Act's meat-cleaver approach is yet another dangerous and 
unbalanced attempt to derail agencies' missions to protect the 
public health and safety. Rather than creating jobs, growing 
the economy, or making Americans safer, these dangerous 
procedures would tie agencies' hands with unnecessary red-tape 
and waste valuable agency resources and taxpayer dollars.
---------------------------------------------------------------------------
    \1\5 U.S.C. Sec. 801(b) (2014).
---------------------------------------------------------------------------
    In recognition of these concerns, the Coalition for 
Sensible Safeguards--an alliance of more than 70 consumer, 
labor, research, faith, and other public interest groups--
strongly opposes this legislation, stating that it would likely 
lead to the repeal of ``critical health, safety, and 
environmental safeguards, even when the benefits of these rules 
outweigh the costs.''\2\ In addition, the Center for Effective 
Government, a government accountability public-interest group, 
states that the ``clear agenda behind this legislation is to 
limit the role of congressionally established agencies tasked 
with protecting public health and safety by establishing a new 
commission and tasking it with getting rid of or weakening any 
rules that big businesses dislike.''\3\
---------------------------------------------------------------------------
    \2\Coalition for Sensible Safeguards, ``The Searching for and 
Cutting Regulations that are Unnecessarily Burdensome Act of 2014,'' at 
1-2 (June 17. 2014) (on file with the H. Committee on the Judiciary 
Democratic staff). Current members of the Coalition include: AFL-CIO; 
Alliance for Justice; American Association of University Professors; 
American Federation of State, County and Municipal Employees; American 
Federation of Teachers Americans for Financial Reform; American Lung 
Association; American Rivers; American Values Campaign; American 
Sustainable Business Council; BlueGreen Alliance; Campaign for Contract 
Agriculture Reform; Center for Effective Government; Center for Digital 
Democracy; Center for Food Safety; Center for Foodborne Illness 
Research & Prevention; Center for Independent Living; Center for 
Science in the Public Interest; Citizens for Sludge-Free Land; Clean 
Air Watch; Clean Water Network; Consortium for Citizens with 
Disabilities; Consumer Federation of America; Consumers Union; 
CounterCorp; Cumberland Countians for Peace & Justice; Demos; Economic 
Policy Institute; Edmonds Institute; Environment America; Farmworker 
Justice; Free Press; Friends of the Earth; Green for All; Health Care 
for America Now; In the Public Interest; International Brotherhood of 
Teamsters; International Center for Technology Assessment; 
International Union, United Automobile, Aerospace & Agricultural 
Implement Workers of America (UAW); League of Conservation Voters; Los 
Angeles Alliance for a New Economy; Main Street Alliance; National 
Association of Consumer Advocates; National Center for Healthy Housing; 
National Consumers League; National Council for Occupational Safety and 
Health; National Employment Law Project; National Lawyers Guild, 
Louisville Chapter; National Women's Health Network; National Women's 
Law Center; Natural Resources Defense Council; Network for 
Environmental & Economic Responsibility of United Church of Christ; New 
Jersey Work Environment Council; New York Committee for Occupational 
Safety and Health; Oregon PeaceWorks; People for the American Way; 
Protect All Children's Environment; Public Citizen; Reproductive Health 
Technologies Project; Safe Tables Our Priority; Sierra Club; Service 
Employees International Union; Southern Illinois Committee for 
Occupational Safety and Health; The Arc of the United States; The 
Partnership for Working Families; Trust for America's Health; U.S. 
Chamber Watch; U.S. PIRG; Union of Concerned Scientists; Union Plus; 
United Food and Commercial Workers Union; United Steelworkers; 
Waterkeeper Alliance; and Worksafe. Coalition for Sensible Safeguards--
Our Members, http://sensiblesafeguards.org/our-members.
    \3\Katie Weatherford, The SCRUB Act: Another Anti-Regulatory Bill 
Targets Health, Safety, and Environmental Protections, Center for 
Effective Government (Feb. 18, 2014), http://www.foreffectivegov.org/
blog/scrub-act-another-anti-regulatory-bill-targets-health-safety-and-
environmental-protections.
---------------------------------------------------------------------------
    For the foregoing reasons, and those discussed more fully 
below, we respectfully dissent and urge opposition to H.R. 
4874.

                              DESCRIPTION

    A brief summary of H.R. 4874's provisions within the 
Committee's jurisdiction is presented here and a more detailed 
section-by-section explanation of the bill appears at the end 
of these views.
    Although Title I of H.R. 4874 is not within the 
jurisdiction of our Committee, an explanation of this provision 
is necessary to place the remainder of the bill in proper 
perspective. Section 101 establishes a Retrospective Regulatory 
Review Commission to review rules to determine whether they 
should be repealed to eliminate or reduce the costs of 
regulation to the economy. The Commission would be composed of 
nine members appointed by the President and confirmed by the 
Senate. The Commission would be funded through the greater of 
$25 million or 1% of all unobligated funds for each Federal 
agency that makes rules.
    Title I of the SCRUB Act would empower the Commission to 
conduct its review of all formal and informal rules through its 
own methodology, which must be published in the Federal 
Register and on the Commission's website. Although the bill 
would require that the Commission prioritize major rules in its 
review, this review would also include any rules that have been 
in effect for over 15 years, impose paperwork burdens, or 
impose disproportionately high costs on small businesses, or 
could be strengthened in their effectiveness while reducing 
regulatory costs.
    The breadth and scope of the mandated review would 
encompass not only the entire Code of Federal Regulations, but 
also all informal rules and documents as well. This review 
would include any ``rule'' defined in section 551 of the 
Administrative Procedure Act,\4\ which applies to the entirety 
of the APA, as well as all agency interpretive rules, general 
statements of policy, or rules of agency organization, 
procedure, or practice that would otherwise be exempt from the 
APA's notice-and-comment requirements.\5\ The Commission must 
set a goal of reducing 15% of the cumulative cost of Federal 
regulation with a minimal reduction in the overall 
effectiveness of such regulation.
---------------------------------------------------------------------------
    \4\5 U.S.C. Sec. Sec. 551-59, 701-06, 1305, 3105, 3344, 5372, 7521 
(2014). The APA defines a ``rule,'' as ``an agency statement of general 
or particular applicability and future effect designed to implement, 
interpret, or prescribe law or policy or describing the organization, 
procedure, or practice requirements of an agency.'' 5 U.S.C. 
Sec. 551(4) (2014).
    \5\5 U.S.C. Sec. 553(b)(3)(A).
---------------------------------------------------------------------------
    Title II of H.R. 4874 would establish a regulatory ``cut-
go'' process. This process would require agencies to offset the 
cost of any new rule by eliminating a rule identified by the 
Commission. Alternatively, an agency may elect to repeal rules 
identified by the Commission in anticipation of promulgating a 
new rule, so long as it results in a net reduction in costs 
imposed by the agency's new rule. Once an agency has repealed 
all the rules identified by the Commission, that agency is no 
longer subject to regulatory cut-go.
    The SCRUB Act would create two oversight mechanisms for the 
regulatory cut-go process. First, agency compliance with the 
SCRUB Act's cut-go process is subject to judicial review under 
Title IV of the bill. Second, section 203 would require the 
Administrator of the Office of Information and Regulatory 
Administration (OIRA) to oversee each agency's calculations of 
costs associated with new rules. OIRA would be required to 
review and certify the costs of each new rule and informal 
publications such as guidance documents and memoranda. Section 
203 would further require agencies to include this review in 
the administrative record of each rulemaking.

                               BACKGROUND

    Federal regulations impact nearly every aspect of our lives 
and are ``one of the basic tools of government used to 
implement public policy.''\6\ The Congressional Research 
Service observes:
---------------------------------------------------------------------------
    \6\Curtis W. Copeland, Cong. Research Serv., RL 32240, The Federal 
Rulemaking Process: An Overview 1 (2005).

        Agencies issue thousands of rules and regulations each 
        year to implement statutes enacted by Congress. The 
        public policy goals and benefits of regulations 
        include, among other things, ensuring that workplaces, 
        air travel, foods, and drugs are safe; that the 
        nation's air, water and land are not polluted; and that 
        the appropriate amount of taxes is collected. The costs 
        of these regulations are estimated to be in the 
        hundreds of billions of dollars, and the benefits 
        estimates are even higher.\7\
---------------------------------------------------------------------------
    \7\Regulatory Reform: Are Regulations Hindering Our 
Competitiveness?: Hearing Before the Subcomm. on Regulatory Affairs of 
the H. Comm. on Gov't Reform, 109th Cong. (2005) (testimony of J. 
Christopher Mihm, Managing Director--Strategic Issues, U.S. Government 
Accountability Office).

    The Administrative Procedure Act (APA),\8\ enacted in 1946, 
establishes the minimum rulemaking and formal adjudication 
requirements for all administrative agencies.\9\ The APA's 
baseline procedural requirements are designed to maintain a 
balance between this type of agency flexibility and the 
requirements of due process. As more than 50 leading 
administrative law academics have observed, ``The APA has 
served for 65 years as a kind of Constitution for 
administrative agencies and the affected public--flexible 
enough to accommodate the variety of agencies operating under 
it and the changes in modern life.''\10\
---------------------------------------------------------------------------
    \8\5 U.S.C. Sec. Sec. 551-59, 701-06, 1305, 3105, 3344, 5372, 7521 
(2014).
    \9\The APA defines ``rulemaking'' as the ``agency process for 
formulating, amending or repealing a rule.'' 5 U.S.C. Sec. 551(5) 
(2014). A ``rule,'' in turn, is defined as ``an agency statement of 
general or particular applicability and future effect designed to 
implement, interpret, or prescribe law or policy or describing the 
organization, procedure, or practice requirements of an agency.'' 5 
U.S.C. Sec. 551(4) (2014).
    \10\Letter from 52 administrative law academics to H. Judiciary 
Comm. Chair Lamar Smith (R-TX) and H. Judiciary Comm. Ranking Member 
John Conyers, Jr., 1 (Oct. 24, 2011) (on file with the H. Comm. on the 
Judiciary, Democratic staff).
---------------------------------------------------------------------------
    In general, proposed rules go through an extensive vetting 
process that many believe has become already too ossified.\11\ 
In addition to the APA, numerous other procedural and 
analytical requirements have been imposed on the rulemaking 
process by Congress and various presidents.\12\ These 
requirements focus ``predominately on agencies' development of 
new rules,'' according to the Government Accountability Office 
(GAO).\13\
---------------------------------------------------------------------------
    \11\See, e.g., Richard J. Pierce, Jr., Rulemaking Ossification Is 
Real: A Response to Testing the Ossificiation Thesis, 80 Geo. Wash. L. 
Rev. 1493 (2012).
    \12\Examples of legislative mandates include the Unfunded Mandates 
Reform Act, Pub. L. No. 104-4 (1995); the Regulatory Flexibility Act, 
Pub. L. No. 96-354, 94 Stat. 1164, 1169 (1980); and the Congressional 
Review Act, Pub. L. No. 104-121 (1996). In addition, both Republican 
and Democratic Presidents have issued executive orders mandating 
additional procedural and analytical requirements for Federal 
rulemakings. See, e.g., Exec. Ord. 12,866, 58 Fed. Reg. 190 (Sept. 30, 
1993) (outlining requirements for cost-benefit analysis and review by 
the Office of Information and Regulatory Affairs for significant rules 
issued by executive branch agencies).
    \13\U.S. Gov't Accountability Office, GAO-07-791, Reexamining 
Regulations: Opportunities Exist to Improve Effectiveness and 
Transparency of Retrospective Reviews 1 (2007) [hereinafter GAO 
Report].
---------------------------------------------------------------------------
    In addition to assessing rules before they go into effect, 
agencies are often required to review their regulations 
retrospectively to determine whether any should be revoked or 
modified. Some reviews are conducted in response to legislative 
mandate, at the discretion of the agency,\14\ or as required by 
executive order.\15\
---------------------------------------------------------------------------
    \14\Id. at 5.
    \15\For a more extensive discussion of statutes and executive 
orders requiring retrospective review, see discussion infra Part III.B.
---------------------------------------------------------------------------

                        CONCERNS WITH H.R. 4874

    The SCRUB Act would establish a Commission charged with a 
redundant and unbalanced mandate that prioritizes economic 
costs of rules with little to no consideration of the benefits 
and protections these rules provide for the public safety and 
the health of the environment. Title II of the bill would 
further require that agencies off-set the cost of new rules 
through a regulatory ``cut-go'' process for every new agency 
rule. Relying on the faulty premise that regulations undermine 
economic growth and job creation, regulatory cut-go would force 
agencies to offset the costs of any new rule, informal guidance 
document, or memoranda by repealing an existing rule identified 
by the Commission. This additional layer of red-tape would 
require a new rulemaking process for each rule eliminated, 
forcing agencies to wastefully calculate the cost of any agency 
action, including issuing informal memoranda. The result of 
this misguided legislation would be years of delays in the 
rulemaking process, an unprecedented burden on agencies and 
taxpayers, and a dangerous threat to the agencies' missions to 
protect the public health and safety from imminent harm.

I. REGULATORY CUT-GO WOULD IMPEDE AGENCY ACTION BY IMPOSING BURDENSOME 
           AND UNNECESSARY REQUIREMENTS ON ANY AGENCY ACTION

    Title II of the SCRUB Act would prohibit any regulatory 
agency from issuing any new rule, including non-legislative and 
procedural rules, until the agency offsets the costs of the new 
rule by eliminating an existing rule identified by the 
Commission.\16\ This process, also known as regulatory cut-go, 
would present a dangerous false choice to agencies, cause years 
of delays in the rulemaking process, and create additional 
burdens due to its implementation problems. As administrative 
law experts Sidney Shapiro and Richard Murphy argue, regulatory 
cut-go is ``so fundamentally flawed that it cannot be regarded 
as a serious policy proposal,'' but instead is ``a political 
stunt designed to appeal to the anti-regulatory reflexes of 
corporate interests that find regulation costly and of people 
who subscribe to the ideological belief that government is 
always the problem and never the solution.''\17\
---------------------------------------------------------------------------
    \16\H.R. 4874, 113th Cong. 201 (2014).
    \17\Sidney A. Shapiro et al., Regulatory, `Pay Go': Rationing the 
Public Interest, Ctr. for Progressive Reform Issue Alert #1214 1 (Oct. 
2012), http://progressivereform.org/articles/Regulatory_Pay-Go_1214.pdf 
[hereinafter Shapiro].
---------------------------------------------------------------------------
A. Regulatory Cut-Go Would Require Agencies to Estimate the Cost of 
        Virtually Every New Action
    The SCRUB Act would require agencies to calculate the costs 
of any new ``rule,'' which includes practically any agency 
action or communication, to determine whether the rule triggers 
the bill's regulatory cut-go provisions.\18\ The bill defines 
``rule'' through reference to section 551 of the APA.\19\ This 
definition is so broad that it applies to virtually any agency 
action, including (1) legislative rules that bind regulated 
entities; (2) non-legislative rules, such as general statements 
of policy such as a press release, speech, memorandum, 
statements, and informal guidance document;\20\ and (3) rules 
of agency organization, procedure and practice, which courts 
have defined as technical regulations to prescribe order and 
formality in business transactions.\21\ The effect of this 
limitless classification of agency action would be to 
discourage agencies from clarifying and updating rules, leading 
to the inconsistent application of rules by agency personnel.
---------------------------------------------------------------------------
    \18\H.R. 4874, 113th Cong. 203 (2014) (``The Administrator of the 
Office of Information and Regulatory Affairs of the Office of Managment 
[sic] and Budget shall review and certify the accuracy of agency 
determinations of the costs of new rules under section 201.'')
    \19\5 U.S.C. Sec. 551 (2014).
    \20\5 U.S.C. Sec. 553(b)(3)(A); William Funk, A Primer on 
Nonlegislative Rules, 53 Admin. L. Rev. 1321, 1322 (2001)(``These rules 
are often called nonlegislative rules, because they are not 'law' in 
the way that statutes and substantive rules that have gone through 
notice and comment are 'law,' in the sense of creating legal 
obligations on private parties.'').
    \21\Pickus v. United States Board of Parole, 507 F.2d 1107, 1113-14 
(D.C. Cir. 1974).
---------------------------------------------------------------------------
    The SCRUB Act is silent on how agencies would calculate the 
costs of every new rule. Far from an exact science, costs are 
notoriously difficult for agencies to calculate.\22\ The Office 
of Management and Budget (OMB) observed in its first annual 
report on the costs and benefits of Federal regulations that 
there are ``enormous data gaps in the information available on 
regulatory benefits and costs.''\23\ If tasked with determining 
the costs of each regulatory action, agencies would likely rely 
on industry-supplied data, which routinely overstates the costs 
of rules.\24\ In a review of several dozen environmental and 
occupational safety regulations, researchers repeatedly found 
that ``cost estimates tend to be much higher than real-world 
compliance costs.''\25\ This is particularly true for the 
initial estimates of rules' costs, which were ``at least 
double'' their actual cost, and ``could be seen more in the 
nature of debating points than objective cost assessments of 
costs.''\26\
---------------------------------------------------------------------------
    \22\Shapiro, supra note 17, at 8.
    \23\Office of Management and Budget, 1998 Report of OMB to Congress 
on the Costs and Benefits of Federal Regulations 2 (1998).
    \24\Thomas O. McGarity & Ruth Ruttenberg, Counting the Cost of 
Health, Safety, and Environmental Regulation, 80 Tex. L. Rev. 1997, 
2011, 2042 (2002)
    \25\Id.
    \26\Id.
---------------------------------------------------------------------------
    The SCRUB Act's cost-assessment requirement would also 
deter agencies from proactively clarifying matters of law or 
policy through non-legislative and procedural rules. Agency 
personnel routinely rely on non-legislative rules to inform the 
public and to maintain the consistent applications of statutes 
and regulations within agencies.\27\ These rules are routine 
and serve a variety of critical functions, such as assuring the 
uniform application of a statute or regulation and informing 
the public of an agency's practice and views.\28\ For instance, 
David Cohen, the Under Secretary for Terrorism and Financial 
Intelligence at the U.S. Department of the Treasury, delivered 
remarks earlier this year to clarify the finance risks involved 
with virtual currency such as Bitcoin, which is an emerging 
topic in the field.\29\ These remarks, which described prior 
enforcement actions by the agency and agency guidance in the 
area of virtual currency, would not be considered a ``meeting'' 
within the meaning of section 553 of the APA.\30\ However, 
these remarks would still be within the SCRUB Act's definition 
of a rule, thereby triggering the SCRUB Act's cost-assessment 
requirement. In another example, the Food and Drug 
Administration (FDA) regularly issues informal guidance on 
routine matters to inform the public of its practices, such as 
its recent guidance on the FDA's voting procedures for advisory 
committee meetings.\31\ The FDA also issues guidance to ensure 
the uniform application of statutes, such as when it recently 
issued informal guidance on the quality requirements of baby 
formula,\32\ as well as the nutritional labeling for foods that 
are gluten-free or contain allergens.\33\ Again, because the 
SCRUB Act's cost-estimate requirement does not distinguish 
between routine guidance and major rules, it is unclear whether 
agencies would continue to perform this function if each action 
triggered procedural hurdles under the SCRUB Act. This reverse 
incentive to avoid offering clarification or additional 
guidance would result in the inconsistent application of 
regulation and statutes by agency personnel. Without routine 
informal guidance, agency personnel lack a consistent mechanism 
for applying rules and statutes.
---------------------------------------------------------------------------
    \27\Sam Kalen, Guidance Documents and the Courts, in 57 Rocky 
Mountain Mineral Law Institute Proceedings of the Rocky Mountain 
Mineral Law Fifty-Seventh Annual Institute 5-1 (Rocky Mountain Mineral 
Law Foundation ed., 2011).
    \28\Id.
    \29\David S. Cohen, Remarks From Under Secretary of Terrorism and 
Financial Intelligence David S. Cohen on ``Addressing the Illicit 
Finance Risks of Virtual Currency, Department of the Treasury (Mar. 18, 
2014), http://www.treasury.gov/press-center/press-releases/Pages/
jl236.aspx.
    \30\5 U.S.C. 553(b) (defining ``meeting'' as ``the deliberations of 
at least the number of individual agency members required to take 
action on behalf of the agency where such deliberations determine or 
result in the joint conduct or disposition of official agency 
business.'').
    \31\Food and Drug Administration, Voting Procedures for Advisory 
Committee Meetings (Aug. 2008), http://www.fda.gov/downloads/
RegulatoryInformation/Guidances/UCM125641.pdf.
    \32\21 CFR 106.96(i) (``Eligible'' infant formulas)
    \33\Food Allergens Guidance Documents & Regulatory Information, 
Food and Drug Administration, http://www.fda.gov/Food/
GuidanceRegulation/GuidanceDocumentsRegulatoryInforma
tion/Allergens/default.htm (accessed on July 2, 2014).
---------------------------------------------------------------------------
    Worse still, the bill would discourage agencies from 
clarifying rules, notifying the public of shifting views on 
existing rules, or updating previous guidance documents to 
include the latest science on important issues affecting the 
public health, such as the FDA has with baby formula guidance 
documents.\34\ The SCRUB Act would also have a chilling effect 
on speech by agency officials, who would think twice before 
delivering statements or issuing press releases to inform the 
public of agency views or activity, shrouding these practices 
and views from the public. Regardless of the result, the 
practical effects of this over-broad requirement would be to 
diminish agencies' ability to protect and inform the public 
through clarifications and updates of non-legislative and 
procedural rules.
---------------------------------------------------------------------------
    \34\21 CFR 106.96(i).
---------------------------------------------------------------------------
    In addition to tasking agencies with calculating the costs 
of any new rule, Section 203 of the SCRUB Act would further 
require that OIRA certify the accuracy of these estimates. 
Currently, OIRA only reviews a small portion of ``significant'' 
proposed rules,\35\ allowing it to efficiently allocate its 
finite resources to review the most pressing rules. By 
substantially expanding OIRA's mandate to include every 
regulatory action, the SCRUB Act would water-down OIRA's 
oversight of the rulemaking process. Additionally, requiring 
OIRA to review every new rule would facilitate greater 
political interference in the rulemaking process by giving the 
executive branch more control over congressionally-mandated 
rulemaking. In short, greater presidential control over 
rulemaking, in the wrong administration's hands, could 
undermine important health, safety, consumer protection, 
financial and other regulations by providing industry with an 
additional bottleneck for the issuance of rules. As a detailed 
analysis of the Bush administration's involvement of the 
rulemaking process demonstrates, overly restrictive control of 
the rulemaking process by the executive branch undermines the 
public interests and circumvents legislative intent.\36\
---------------------------------------------------------------------------
    \35\Exec. Order 12,866, 58 Fed. Reg. 51,735, Sec. 6(b)(1) (1993).
    \36\H. Comm. on the Judiciary Majority Staff, Reining in the 
Imperial Presidency--Lessons and Recommendations Relating to the 
Presidency of George W. Bush, 111th Cong., at 186 (Mar. 2009).
---------------------------------------------------------------------------
B. Regulatory Cut-Go Would Require Agencies to Conduct a Costly and 
        Time-Consuming Rulemaking Process for Each Rule Eliminated
    As previously discussed, the SCRUB Act would require 
agencies to offset the costs of virtually all agency action. 
Agencies, however, are unable to simply rescind rules. Instead, 
the APA requires that agencies follow the same notice-and-
comment procedures to eliminate a rule as would be required to 
issue the same rule in the first place.\37\ Therefore, prior to 
eliminating any rule through regulatory cut-go procedures, the 
Supreme Court has clarified that agencies must undertake a 
lengthy rulemaking process to carefully ``examine the relevant 
data and articulate a satisfactory explanation for its 
action,''\38\ thereby forcing agencies to undertake twice as 
much work to issue a single new rule. Prior to promulgating a 
new legislative rule, agencies would have to prepare two 
proposals: one for promulgating a new rule, and one for 
eliminating an existing rule required by the Commission.\39\ 
This process may take anywhere from a few months to several 
years,\40\ especially when the underlying rule involves complex 
matters of science or economics.\41\ Although Congress 
specifically excluded non-legislative and procedural rules from 
this process,\42\ the SCRUB Act's broad definition of rule 
would circumvent this commonsense exclusion.\43\ Furthermore, 
unless agencies are able to justify the elimination of a rule 
through a rational basis supported by the rulemaking record, 
any rescission of a rule may be vacated as ``arbitrary and 
capricious'' under section 706 of APA.\44\ The SCRUB Act would 
essentially function as a chokehold on Federal agency 
rulemaking, delaying any new action by an agency and draining 
agency resources in a time of widespread budget austerity.\45\
---------------------------------------------------------------------------
    \37\5 U.S.C. Sec. 551(2014).
    \38\Motor Veh. Mfrs. Ass'n v. State Farm Ins. 463 U.S. 29, 31 
(1983).
    \39\Id.
    \40\Center for Effective Government, Notice-and-Comment Rulemaking, 
http://www.
foreffectivegov.org/node/3463 (last visited July 20, 2014).
    \41\Regulations from the Executive in Need of Scrutiny Act of 2011: 
Hearing on H.R. 10 Before the Subcomm. on Courts, Commercial and Admin. 
L. of the H. Comm. on the Judiciary, 112th Cong. (2011) (statement of 
David Goldston, Director of Government Affairs, Natural Resources 
Defense Council) (``Agencies often take several years to formulate a 
particular safeguard, reviewing hundreds of scientific studies, drawing 
on their own experts in science and economics, empaneling outside 
expert advisors, gathering thousands of public comments, and going 
though many levels of executive branch review''); Center for Effective 
Government, Notice-and-Comment Rulemaking, http://
www.foreffectivegov.org/node/3463 (Last visited July 20, 2014).
    \42\5 U.S.C. Sec. 553(b)(A) (2014) (excluding ``interpretative 
rules, general statements of policy, or rules of agency organization, 
procedure, or practice'' from section 553).
    \43\Motor Veh. Mfrs. Ass'n v. State Farm Ins. 463 U.S. 29, 31 
(1983).
    \44\5 U.S.C. Sec. 706(2) (2014); Motor Veh. Mfrs. Ass'n v. State 
Farm Ins. 463 U.S. 29, 31 (1983).
    \45\Shapiro, supra note 17, at 10.
---------------------------------------------------------------------------
C. The SCRUB Act Would Open the Floodgates to Legal Challenges to Rules 
        Eliminated through Regulatory Cut-Go
    In the event that agencies could overcome the procedural 
hurdles imposed by the SCRUB Act, courts would have ample 
opportunity to review any agency action to implement the 
statute, opening the floodgates of legal challenges to the 
SCRUB Act. Title IV of the bill subjects an agency's compliance 
with the bill's cut-go procedures to judicial review. 
Additionally, the APA provides that ``final agency action for 
which there is no other adequate remedy in a court [is] subject 
to judicial review,'' including those actions that are 
otherwise unreviewable.\46\ Courts may therefore vacate any 
rule, including a rescission of a rule,\47\ as ``arbitrary and 
capricious'' under section 706 of the APA unless the agency 
carefully reviews each rule eliminated and is able to justify 
the rescission of a rule through an adequate basis in the 
rulemaking record.\48\ The Supreme Court has construed this 
standard to require a reviewing court to conduct a ``searching 
and careful'' review of agency action.\49\ This type of 
heightened review under the arbitrary or capricious standard 
has been referred to as the ``hard look'' doctrine. Under this 
doctrine, courts must carefully analyze both the administrative 
record and the agency's explanation to review whether it 
applied the ``correct analytical methodology, applied the right 
criteria, considered the relevant factors, chose from among the 
available range of regulatory options, relied upon appropriate 
policies, and pointed to adequate support in the record for 
material empirical conclusions.''\50\ The SCRUB Act lacks any 
clarification of the Commission's methodology for reviewing 
rules, as well as any limit on the criteria the Commission must 
follow for identifying rules that must be repealed so long as 
rescinding these rules would ``eliminate or reduce 
unnecessarily burdensome costs to the United States economy'' 
pursuant to section 101 of the bill. It is doubtful that this 
administrative blank-check would provide agencies with adequate 
empirical support to satisfy the hard-look doctrine's 
requirement of a thorough administrative record supporting a 
rule's recision,\51\ making it unlikely that the SCRUB Act's 
process of regulatory cut-go would withstand judiciary 
scrutiny.
---------------------------------------------------------------------------
    \46\5 U.S.C. Sec. Sec. 702, 704. Any plaintiff that is ``adversely 
affected or aggrieved'' by a final agency action, including the 
recisision of a rule, may invoke judicial review. 5 U.S.C. Sec. 702.; 
see Webster v. Doe, 486 U.S. 592 (1988); Oestereich v. Selective 
Service System, 393 U.S. 233 (1968).
    \47\Motor Veh. Mfrs. Ass'n v. State Farm Ins. 463 U.S. 29, 31 
(1983).
    \48\5 U.S.C. Sec. 706(2) (2013); Motor Veh. Mfrs. Ass'n v. State 
Farm Ins. 463 U.S. 29, 31 (1983).
    \49\Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 
407-09 (1971).
    \50\Thomas O. McGarity, Some Thoughts on Deossifying the Rulemaking 
Process, 41 Duke L.J. 1385, 1410 (1992).
    \51\Shapiro, supra note 17, at 10.
---------------------------------------------------------------------------
D. Regulatory Cut-Go Would Disproportionately Affect New Agencies, 
        Inviting Controversy and Discouraging Government Efficiency
    The SCRUB Act would create strong disincentives to 
streamline government agencies or respond to crises through the 
creation of new agencies. Regulatory cut-go applies to any 
agency that promulgates rules without exception, creating 
substantial uncertainty for a newly-created agency starting 
with a regulatory budget of $0.\52\ If regulatory cut-go 
applies to the entire regulatory budget of an administration, 
then the initial regulation issued by new agency would have to 
displace an existing regulation from another agency. If, 
however, the bill's procedural hurdles only apply to the 
regulatory budget of each agency, it is unclear whether 
Congress would have to specifically exempt new agencies from 
regulatory cut-go, or if these agencies would borrow through 
other agencies' regulatory budgets. For instance, if regulatory 
cut-go existed prior to the creation of the Consumer Financial 
Protection Bureau (CFPB), an entirely new agency created in the 
wake of the financial crisis, either an agency separate from 
the CFPB would have to offset a new rule issued by the CFPB, or 
Congress would have needed to provide a special exemption for 
the CFPB due to the agency's inability to function without a 
regulatory budget.\53\ Regardless of how new agencies would 
address these difficult, unnecessary, and controversial 
choices, the SCRUB Act would create barriers to reorganizing 
agencies to more effectively serve the public interest.\54\
---------------------------------------------------------------------------
    \52\See id. at 9.
    \53\Id.
    \54\See id.
---------------------------------------------------------------------------

 II. THE SCRUB ACT WOULD UNDERMINE AGENCIES' ABILITY TO PROTECT PUBLIC 
                           HEALTH AND SAFETY

A. The Scrub Act Would Force Agencies to Make a Dangerous False Choice 
        Between Existing Rules and New Rules to Protect the Public 
        Health and Safety
    Regulatory cut-go imposes a false choice between existing 
protection and a new threat to public health and safety. If an 
agency needed to respond to an imminent hazard to the public or 
environment, it would have to either rescind an existing rule 
that is haphazardly identified by the Commission's arbitrary 
process, or choose not to act. Regardless of its choice, the 
SCRUB Act would force agencies to choose the least-worst 
option, leaving people and the environment without safeguards 
against risks that agencies have identified and are designed to 
prevent.\55\ For example, the implementation of the Dodd-Frank 
Wall Street Reform Act requires financial agencies to implement 
hundreds of critical regulations that are intended to prevent 
another financial meltdown. Under a regulatory cut-go system, 
financial agencies would be unable to meet congressional 
mandates and deadlines in putting forth these reforms without 
identifying hundreds of existing regulations, of equal economic 
significance, to be repealed, making the number of regulations 
that an agency must implement more important than the merits of 
those regulations.
---------------------------------------------------------------------------
    \55\See id. at 5 (``Regulatory pay-go completely ignores this less 
[of cost-benefit analysis], and thus is even more extreme than cost-
benefit analysis in its disregard of regulatory benefits.'').
---------------------------------------------------------------------------
    Title II of the SCRUB Act also fails to provide any 
exception from cumbersome procedural hurdles for agencies to 
issue emergency rules that protect the public and environment 
from imminent harm. Agencies often promulgate emergency rules 
or orders in a timely response to immediate threats to public 
health and safety. Indeed, the APA specifically permits 
agencies to finalize rules not subject to the notice-and-
comment process where the agency has good cause for genuine 
emergencies.\56\ For instance, the U.S. Department of 
Transportation earlier this year issued an emergency order in 
response to the derailment of a railroad train in Quebec, 
Canada that killed 47 people,\57\ with requirements for 
additional safety procedures to prevent railroad accidents 
involving the sudden release of flammable liquids.\58\ 
Following a ``string of fiery accidents'' in North Dakota, 
Alabama, and Virginia, the Department of Transportation also 
issued an emergency order in May 2014, requiring railroads that 
carry more than one million gallons of fuel to provide certain 
information to the Department.\59\ The Department of 
Transportation thereafter issued another emergency order 
following the derailment of a train carrying crude oil in 
downtown Lynchburg, Virginia that spilled thousands of gallons 
of oil into the James River.\60\ This oil later caught fire and 
disbursed throughout the James River, traveling in an oil slick 
that was 17 miles long toward Richmond and the Chesapeake 
Bay.\61\ Following the train's derailment, officials stated 
that ``2 to 5 trains carrying at least one million gallons of 
oil pass through 20 Virginia counties weekly.''\62\ Observing 
that railroad shipments of crude oil were causing an unsafe 
condition, the Department of Transportation found that a 
``pattern of releases and fires involving petroleum crude oil 
shipments originating from the Bakken and being transported by 
rail constitute an imminent hazard under 49 U.S.C. 5121(d),'' 
justifying the emergency order.\63\ In each response to unsafe 
conditions, the Department of Transportation issued emergency 
orders to protect the public safety and environment. Prior to 
these orders, railroads were under no obligation to notify 
emergency responders when trains carrying millions of gallons 
of crude oil passed through their states.\64\
---------------------------------------------------------------------------
    \56\S. Comm. on the Judiciary, ``Administrative Procedure Act: 
Legislative History,'' S. Doc. 248, 79th Cong. (1946) (requiring that 
agencies publish a ``true and supported or supportable finding of 
necessity or emergency'' when using the good cause exception).
    \57\Matthew Brown, U.S. Railroads Disclose Figures, Details on 
Volatile Oil Train Shipments, Calgary Herald (June 25, 2014), http://
www.calgaryherald.com/business/Railroads+
disclose+figures+details+volatile+train+shipments/9970734/story.html 
[hereinafter Brown].
    \58\49 CFR 232.103(n) (2013).
    \59\Brown, supra note 57.
    \60\Curtis Tate, Lynchburg, Va., Oil Train Derailment Illustrates 
Threat to Rivers, McClatchyDC (May 2, 2014) http://www.mcclatchydc.com/
2014/05/02/226425/lynchburg-va-oil-train-derailment.html.
    \61\Id.
    \62\Brown, supra note 57.
    \63\Dept. of Transportation, Petroleum Crude Oil Railroad Carriers, 
DOT-OST-2014-0067, Petroleum Crude Oil Railroad Carriers (May 7, 2014), 
http://www.dot.gov/briefing-room/
emergency-order.
    \64\Jad Mouawad, U.S. Issues Safety Alert for Oil Trains, New York 
Times (May 7, 2014), http://www.nytimes.com/2014/05/08/business/us-
orders-railroads-to-disclose-oil-shipments.html.
---------------------------------------------------------------------------
    The SCRUB Act's cut-go procedures, however, would have 
prevented the Department of Transportation from issuing these 
orders without first identifying the cost of the order and then 
offsetting this cost by eliminating a rule identified by the 
Commission, which in turn would trigger the APA's rulemaking 
process for rescinding a rule. Although the APA's good cause 
exception does not require that agencies provide a notice-and-
comment period for genuine emergencies,\65\ the SCRUB Act fails 
to provide any such flexibility for agencies to bypass the cut-
go procedures while issuing emergency rules to protect the 
public and environment from imminent harm, creating a serious 
risk to the safety of the public and environment.
---------------------------------------------------------------------------
    \65\Senate Committee on the Judiciary, ``Administrative Procedure 
Act: Legislative History,'' Senate Document 248, 79th Congress, 2nd 
Session (1946) (requiring that agencies publish a ``true and supported 
or supportable finding of necessity or emergency'' when using the good 
cause exception).
---------------------------------------------------------------------------
    Another example of the practical effects of regulatory cut-
go can be found in the Federal Aviation Administration (FAA) 
decisions to prohibit flights into dangerous and unsafe areas. 
The FAA routinely updates its Temporary Flight Restriction 
list, which provides a ``do-not-fly'' list for areas affected 
by extreme weather or other unsafe conditions.\66\ The FAA also 
issues emergency rules to routinely amend the Special Federal 
Aviation Regulation (SFAR), a list of flight paths that the FAA 
restricts due to dangerous conditions. For instance, the FAA 
issued a rule earlier this year under the good cause exception 
to the APA to prohibit American commercial flights through 
Eastern Ukraine due to escalating conflicts in the region.\67\ 
In promulgating this rule, the FAA specifically noted that, due 
to the escalating tension between Ukraine and the Russian 
Federation, there is a risk that ``compliance with air traffic 
control instructions issued by the authorities of one country 
could result in a civil aircraft being misidentified as a 
threat and intercepted or otherwise engaged by air defense 
forces of the other country.''\68\ Following the crash of 
Malaysia Airlines Flight 17 as a result of this regional 
conflict, the FAA expanded the area of Eastern Ukraine where 
flights are prohibited.\69\
---------------------------------------------------------------------------
    \66\Federal Aviation Administration, Temporary Flight Restriction 
List, http://tfr.faa.gov/tfr2/list.html (last visited on July 21, 
2014).
    \67\Federal Aviation Administration, Prohibition Against Certain 
Flights in the Simferopol (UKFV) Flight Information Region (FIR), 79 FR 
22862, (Apr. 25, 2014), https://www.federalregister.gov/articles/2014/
04/25/2014-09545/prohibition-against-certain-flights-in-the-simferopol-
ukfv-flight-information-region-fir.
    \68\Id.; Zeke Miller, U.S. Warned Of Unsafe Airspace Over Crimea, 
But Not Where MH17 Crashed, Time (July 17, 2014), http://time.com/
3001874/ukraine-crash-faa-crimea-airspace.
    \69\Mark Berman, FAA Bans U.S. flights over Eastern Ukraine, Wash. 
Post (July 17, 2014), http://www.washingtonpost.com/news/post-nation/
wp/2014/07/17/faa-bans-u-s-flights-over-eastern-ukraine/.
---------------------------------------------------------------------------
    Nevertheless, had the SCRUB Act applied to this rulemaking, 
the FAA would first have to determine its cost to the U.S. 
economy, and then eliminate a rule identified by the Commission 
that was ``unnecessarily burdensome,'' a process could take 
months or years, depending on the complexity of the underlying 
rule that the Commission identifies for repeal. Thus, even 
though Congress appreciates the value of agency efficiency and 
speed when responding to public emergencies by establishing a 
good-cause exception to the APA's comment and notice 
requirements for new rules, the SCRUB Act would effectively 
eviscerate this exception, impairing the ability of any agency 
to respond to any threat to public health, safety, and the 
environment, no matter how dangerous or imminent.
    To address the host of concerns raised by regulatory cut-
go, Rep. Hank Johnson (D-GA) offered an amendment to strike 
these portions of H.R. 4874 by eliminating Title II of the 
bill.\70\ Noting that regulatory cut-go would have far-reaching 
consequences for every new agency rule, he stated that the 
SCRUB Act ``would apply to a new rule to prevent the further 
loss of life as a result of ignition switch failures in cars we 
drive,'' and ``prevent an agency from issuing an emergency 
regulation to prevent chemical contamination of the water we 
drink.''\71\ Speaking in support of the amendment, Ranking 
Member John Conyers (D-MI) cited the bill's ``many other 
shortcomings,'' including ``a litany of undefined terms'' that 
would require a review of ``all current rules, regardless of 
whether they impose little or no cost.''\72\ This amendment 
failed along party lines by a vote of 9 to 16.\73\
---------------------------------------------------------------------------
    \70\Tr. of Markup of H.R. 4874, ``Searching for and Cutting 
Regulations that are Unnecessarily Burdensome Act of 2014 by the H. 
Comm. on the Judiciary, 113th Cong. at 87 (June 19, 2014), http://
judiciary.house.gov/_cache/files/f7dc303b-9bc1-47a8-a7c7-a8abcc89efef/
06.18.14-markup-transcript.pdf [hereinafter Markup Tr.]
    \71\Id.
    \72\Id. at 92.
    \73\Id. at 102.
---------------------------------------------------------------------------
B. Regulatory Cut-Go Would Create an Additional Layer of Bureaucracy 
        and Siphon Billions from Regulatory Agencies
    Ironically, the SCRUB Act's solution to the claims of ``too 
much bureaucracy'' is to mandate additional layers of 
bureaucracy. Title I of the bill would establish a new agency 
to be funded by potentially billions of taxpayer dollars. 
Although Title I is not within the jurisdiction of our 
Committee, an explanation of this provision is necessary for an 
understanding of the bill's impact on agency missions to 
protect the public health and safety.
    To fund this Commission, the SCRUB Act allocates the 
greater of 1% of all unobligated funds of regulatory agencies 
or $25 million. Without a definition of ``regulatory 
agencies,'' the bill appears to apply to any agency capable of 
issuing guidance on any agency rule. If this definition only 
includes Cabinet-level agencies, the Commission's budget would 
be at least $4.3 billion.\74\ Alternatively, if the definition 
includes all of the Executive agencies that have the authority 
to make rules to fulfill their statutory obligations, the 
Commission's budget would exceed $5.3 billion.\75\
---------------------------------------------------------------------------
    \74\The White House, Balances of Budget Authority: Budget of the 
U.S. Government, Federal Fund Unobligated Balance Carried Forward, By 
Agency--FY 2013 Budget, 15, http://www.whitehouse.gov/sites/default/
files/omb/budget/fy2013/assets/balances.pdf.
    \75\Id.
---------------------------------------------------------------------------
    Recognizing the excessive waste caused by siphoning 
billions from other agencies' funds, Rep. Hank Johnson (D-GA) 
noted that the ``effects of the bill would be a new sequester 
on regulatory agencies.''\76\ As Rep. Johnson observed, ``The 
Department of Veterans Affairs, for example, could lose $54 
million from its budget at a time when it clearly needs robust 
funding,'' concluding that this section of the bill alone 
``demonstrates the incomprehensible nature of this 
legislation.''\77\
---------------------------------------------------------------------------
    \76\Markup Tr., supra note 70, at 84.
    \77\Id.
---------------------------------------------------------------------------
    To address the concern that the Commission's budget would 
indiscriminately divert funds from the essential funds of 
agencies, Rep. Jerrold Nadler (D-NY) offered an amendment to 
Title I of the SCRUB Act that would have limited the 
Commission's operating budget to $25 million.\78\ In 
comparison, he explained that other commissions, such as the 
National Bankruptcy Review Commission, were allocated 
considerably less.\79\ The SCRUB Act Commission's budget would 
likewise dwarf the budget of the 9/11 Commission, which set a 
record for employing the most staff of any congressional 
commission, at one time having more than eighty researchers, 
and receiving a total budget of $12,000,000.\80\
---------------------------------------------------------------------------
    \78\Id. at 78.
    \79\Id. at 85.
    \80\Matthew E. Glassman & Jacob R. Straus, Congressional 
Commissions: Overview, Structure, and Legislative Considerations, 
Congressional Research Service 18 (May 14, 2014), http://www.crs.gov/
pdfloader/R40076.
---------------------------------------------------------------------------
    Because this amendment would apply to Title I of the bill, 
which is not within the Committee's jurisdiction, a point of 
order raised by Rep. Jason Smith (R-MO) stating that the 
amendment was not germane was sustained. Thus the amendment was 
not considered.

        III. THE SCRUB ACT IS A SOLUTION IN SEARCH OF A PROBLEM

A. The SCRUB ACT is Yet Another Anti-Regulatory Bill Based on False 
        Assumptions
    The SCRUB Act's regulatory cut-go process is premised on 
the misguided belief that the public cannot benefit from new 
public protections and safeguards unless old ones are repealed. 
This ``one in, one out'' system overlooks the fact that 
Congress already has the power to repeal any regulation. 
However appealing this concept may be in theory, the practical 
impact of this legislation would be nothing short of 
disastrous, as Professor Ronald Levin argued in his testimony 
on the bill:

        [E]ven if the Title II process were justified in 
        principle, the unwieldiness of the process would 
        counsel against adopting it. The challenges an agency 
        would face in implementing it would be daunting. The 
        process would require the agency to quantify the costs 
        of every new rule, no matter how trivial the rule might 
        be. This is a substantial departure from current 
        practice. . . . The SCRUB Act . . . goes much further 
        by requiring the same procedure for every rule, not 
        just every major rule. I have to assume that the 
        subcommittee did not give sufficient thought to this 
        manifestly extravagant requirement. Could the sponsors 
        really mean to require an agency to prepare a plan for 
        decennial review of rules that would have such minor 
        impact that they would even be exempted from notice and 
        comment requirements? Rules that would have no 
        compliance costs at all, because they are instituted to 
        distribute benefits rather than to impose burdens? 
        Rules that are designed to address a short-term 
        situation, so that they will not even exist 10 years 
        after they are promulgated? Rules of particular 
        applicability, such as decisions approving corporate 
        reorganizations? Section 301 is stunningly overbroad, 
        but I am not going to recommend that it be trimmed back 
        to encompass major rules, because even with that 
        limitation it should be eliminated from the bill.\81\
---------------------------------------------------------------------------
    \81\Searching for and Cutting Regulations that are Unnecessarily 
Burdensome (SCRUB) Act of 2014: Hearing Before the Subcomm. on 
Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the 
Judiciary, 113th Cong. 9, 11 (2014) (statement of Ronald M. Levin, 
Professor of Law, Washington University School of Law), http://
judiciary.house.gov/_cache/files/61953df7-cc3f-486a-bb27-71a8d2be42c0/
levin-scrub-act-testimony.pdf [hereinafter SCRUB Hearing].

    Proponents of so-called regulatory ``reform'' measures like 
the SCRUB Act claim that regulation imposes such costs on 
businesses that it stifles economic growth and job creation. In 
support of this contention, they repeatedly cite a widely-
debunked study by economists Mark and Nicole Crain that claims 
Federal regulation imposes an annual cost of $1.75 trillion on 
business.\82\ The Crain study, however, has been extensively 
criticized for exaggerating the costs of Federal rulemaking on 
small businesses. For example, the Center for Progressive 
Reform (CPR) notes that the $1.75 trillion cumulative burden 
cited by the study fails to account for any benefits of 
regulation.\83\ CPR observed that OMB estimated in 2008 that 
major rules imposed $46 billion to $54 billion in costs, but 
also produced $122 billion to $656 billion in benefits.\84\ 
Moreover, the study's methodology is flawed with respect to how 
it calculated economic costs. The study, which relied on 
international public opinion polling by the World Bank on how 
friendly a particular country was to business interests, 
ignored actual data on costs imposed by Federal regulation in 
the United States.\85\
---------------------------------------------------------------------------
    \82\Nicole V. Crain & W. Mark Crain, The Impact of Regulatory Costs 
on Small Firms, Rep. No. SBAHQ-08-M-0466 (Sept. 2010), http://
archive.sba.gov/advo/research/rs371tot.pdf.
    \83\Sidney Shapiro, et al., Setting the Record Straight: The Crain 
and Crain Report on Regulatory Costs, Center for Progressive Reform 
White Paper #1103 (Feb. 2011).
    \84\Id.
    \85\Id.
---------------------------------------------------------------------------
    The Congressional Research Service (CRS) also conducted an 
extensive examination of the Crain study and criticized much of 
its methodology.\86\ CRS noted that the authors of the Crain 
study themselves told CRS that their study 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?)''\87\ 
CRS concluded that ``a valid, reasoned policy decision can only 
be made after considering information on both costs and 
benefits'' of regulation.\88\
---------------------------------------------------------------------------
    \86\Curtis W. Copeland, Analysis of an Estimate of the Total Costs 
of Federal Regulations, Congressional Research Service Report for 
Congress, R41763 (Apr. 6, 2011).
    \87\Id. at 26 (quoting an e-mail from Nicole and W. Mark Crain to 
the author of the CRS report).
    \88\Id. The Economic Policy Institute also issued a critique of the 
Crain study outlining additional concerns with the study's methodology 
and data. See John Irons and Andrew Green, Flaws Call for Rejecting 
Crain and Crain Model: Cited $1.75 Trillion Cost of Regulations Is Not 
Worth Repeating, Economic Policy Institute, July 19, 2011, available at 
http://w3.epi-data.org/temp2011/IssueBrief308.pdf.
---------------------------------------------------------------------------
    Bruce Bartlett, a senior policy analyst in the Reagan and 
George H.W. Bush administrations, has also refuted the claim 
that regulations undermine the economy or job growth, 
explaining that ``[n]o hard evidence is offered for this claim; 
it is simply asserted as self-evident and repeated endlessly 
throughout the conservative echo chamber.''\89\ At a 
legislative hearing held by the Subcommittee on a prior anti-
regulatory bill, the Majority's own witness debunked the myth 
that regulations stymie job creation. Christopher DeMuth stated 
on behalf of the American Enterprise Institute, a conservative 
think tank, that the ``focus on jobs . . . can lead to 
confusion in regulatory debates'' and that ``the employment 
effects of regulation, while important, are 
indeterminate.''\90\ A recently released study confirms this 
result.\91\
---------------------------------------------------------------------------
    \89\Bruce Bartlett, Op-Ed., Misrepresentations, Regulations and 
Jobs, N.Y. Times Economix, Oct. 4, 2011, http://
economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment.
    \90\The Regulatory Accountability Act of 2011: Hearing on H.R. 3010 
Before the H. Comm. on the Judiciary, 112th Cong. 64-65 (2011) 
(prepared statement of Christopher DeMuth, American Enterprise 
Institute); see, e.g., Jia Lynn Yang, Does Government Regulation Really 
Kill Jobs? Economists Say Overall Effect Minimal, Wash. Post, Nov. 13, 
2011, http://www.
washingtonpost.com/business/economy/does-government-regulation-really-
kill-jobs-economists-say-overall-effect-minimal/2011/10/19/
gIQALRF5IN_story.html?hpid=z1 (``In 2010, 0.3 percent of the people who 
lost their jobs in layoffs were let go because of `government 
regulations/intervention.' By comparison, 25 percent were laid off 
because of a drop in business demand. . . . Economists who have studied 
the matter say that there is little evidence that regulations cause 
massive job loss in the economy, and that rolling them back would not 
lead to a boom in job creation.'').
    \91\See Tara M. Sinclair & Kathryn Vesey, Regulation, Jobs, and 
Economic Growth: An Empirical Analysis 27, (The George Washington 
University Regulatory Studies Center, Working Paper), at 27(finding 
that the ``macroeconomic effects of regulation are uncertain'' and that 
the study's ``results reveal no impact'' when considering either the 
impact of regulations on the ``total economy or strictly the private 
sector''), available at http://regulatorystudies.columbian.gwu.edu/
files/downloads/032212_sinclair_vesey_reg_jobs_growth.pdf
---------------------------------------------------------------------------
    If anything, regulations can promote job growth and put 
Americans back to work. For instance, the BlueGreen Alliance 
has noted that studies of the direct impact of regulations have 
concluded that ``most regulations result in modest job growth 
or have no effect, and economic growth has consistently surged 
forward in concert with these health and safety 
protections.''\92\ The OMB observed that 40 years of success of 
the Clean Air Act ``have demonstrated that strong environmental 
protections and strong economic growth go hand in hand.''\93\ 
Similarly, the Natural Resources Defense Council, the United 
Auto Workers, and the National Wildlife Federation jointly 
issued a report finding that vehicle emissions standards and 
clean vehicle research, development and production are already 
responsible for 155,000 jobs at 504 facilities in 43 states and 
the District of Columbia.\94\ According to the same report, 
119,000 jobs were created in this industry between 2009 and 
2011 alone.\95\
---------------------------------------------------------------------------
    \92\Letter to Rep. Lamar Smith (R-TX), Chair, & Rep. John Conyers, 
Jr. (D-MI), Ranking Member, H. Comm. on the Judiciary, from David A. 
Forster, Executive Director, BlueGreen Alliance, at 2 (Nov. 2, 2011) 
(on file with the H. Committee on the Judiciary, Democratic Staff).
    \93\Executive Office of the President--Office of Management and 
Budget, Statement of Administration Policy on H.R. 2401, Transparency 
in Regulatory Analysis of Impacts on the Nation Act of 2011 (Sept. 21, 
2011).
    \94\Natural Resources Defense Council et al., Supplying Ingenuity: 
U.S. Suppliers of Clean, Fuel-Efficient Vehicle Technologies (2011), 
available at http://www.nrdc.org/transportation/autosuppliers/files/
SupplierMappingReport.pdf.
    \95\Id.
---------------------------------------------------------------------------
    Similarly, it was estimated in 2012 that a pending rule 
under the Clean Air Act requiring power plants to reduce 
mercury and other toxic emissions by 90 percent in the next 5 
years would create 45,000 temporary construction jobs over the 
next 5 years and possibly 8,000 permanent jobs because of the 
upgrades required by the new rule.\96\ This job growth would be 
in addition to the rule's expected benefit of preventing 11,000 
deaths from heart attacks and respiratory diseases like 
asthma.\97\
---------------------------------------------------------------------------
    \96\Editorial, The Job-Creating Mercury Rule, N.Y. Times, Feb. 22, 
2012, http://www.nytimes.com/2012/02/23/opinion/the-job-creating-
mercury-rule.html.
    \97\Id.
---------------------------------------------------------------------------
    Additionally, a report by Northeast States for Coordinated 
Air Use Management (NESCAUM) demonstrates a direct correlation 
between environmental regulations and job growth in the 
Northeast. It found that by enacting stricter fuel economy 
standards and pursuing cleaner forms of energy, more jobs would 
be created.\98\ Specifically, NESCAUM found that stricter fuel 
economy standards and regulations governing cleaner forms of 
energy would increase employment from 9,490 to 50,700 jobs; 
increase gross regional product, a measure of the states' 
economic output, by $2.1 billion to $4.9 billion; and increase 
household disposable income increases by $1 billion to $3.3 
billion.\99\
---------------------------------------------------------------------------
    \98\Northeast States for Coordinated Air Use Management (NESCAUM), 
Economic Analysis of a Program to Promote Clean Transportation Fuels in 
the Northeast/Mid-Atlantic Region (2011) (on file with Natural 
Resources Defense Council) http://switchboard.nrdc.org/blogs/ngreene/
CFS%20Economic%20Analysis%20Report%20INTERNAL.PDF.
    \99\Id.
---------------------------------------------------------------------------
    Anti-regulatory proponents also rely on an equally flawed 
corollary argument that regulatory uncertainty creates a 
disincentive for businesses to hire additional employees. Bruce 
Bartlett, the senior economic official from the Reagan and Bush 
administrations, observes that ``regulatory uncertainty is a 
canard invented by Republicans that allows them to use current 
economic problems to pursue an agenda supported by the business 
community year in and year out.''\100\ Likewise, Professor 
Sidney Shapiro testified before the Subcommittee in the 112th 
Congress that ``[a]ll of the available evidence contradicts the 
claim that regulatory uncertainty is deterring business 
investment.''\101\ In fact, a July 2011 Wall Street Journal 
survey of business economists found that the ``main reason U.S. 
companies are reluctant to step up hiring is scant demand, 
rather than uncertainty over government policies.''\102\ Not 
surprisingly, a September 2011 National Federation of 
Independent Business survey of its members found that ``poor 
sales''--not regulation--is the biggest problem.\103\ Indeed, 
the Main Street Alliance, a small business organization, has 
noted that ``[i]n survey after survey and interview after 
interview, Main Street small business owners confirm that what 
we really need is more customers--more demand--not 
deregulation.''\104\
---------------------------------------------------------------------------
    \100\Bruce Bartlett, Op-Ed., Misrepresentations, Regulations and 
Jobs, N.Y. Times Economix Blog, Oct. 4, 2011, http://
economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/
?s.p.=4&sq;=Bartlett&st;=case.
    \101\Regulatory Accountability Act of 2011: Hearing on H.R. 3010 
Before the H. Comm. on the Judiciary, 112th Cong. 1 (2011) (statement 
of Prof. Sidney Shapiro, Wake Forest School of Law) http://
judiciary.house.gov/_files/hearings/pdf/Shapiro%2010252011.pdf
    \102\Phil Izzo, Dearth of Demand Seen Behind Weak Hiring, Wall St. 
J., July 18, 2011, available at http://online.wsj.com/article/
SB10001424052702303661904576452181063763332.html.
    \103\Press Release, Nat'l Federation of Independent Businesses, 
Small Business Confidence Takes Huge Hit: Optimism Index Now in Decline 
for Six Months Running (Sept. 13, 2011) (``Of those reporting negative 
sales trends, 45 percent blamed faltering sales, 5 percent higher labor 
costs, 15 percent higher materials costs, 3 percent insurance costs, 8 
percent lower selling prices and 10 percent higher taxes and regulatory 
costs.''), available at http://www.nfib.com/press-media/press-media-
item?cmsid=58190.
    \104\Letter to Rep. Lamar Smith (R-TX), Chair, & Rep. John Conyers, 
Jr. (D-MI), Ranking Member, H. Committee on the Judiciary, from Jim 
Houser, Co-Chair, The Main Street Alliance, et al., at 1-2 (Nov. 2, 
2011) (on file with the H. Committee on the Judiciary, Democratic 
Staff).
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B. The SCRUB Act's Solution to ``Over-Regulation'' is an Unbalanced and 
        Redundant Review That Agencies Already Conduct
    Even if one were to accept the false premise that 
regulations impede job growth and harm the economy, the SCRUB 
Act represents a redundant and arbitrary solution to any such 
problem. Agencies regularly conduct retrospective reviews.\105\ 
In fact, retrospective review has been a top priority under the 
Obama administration,\106\ and Congress has long prescribed 
that agencies review regulations to determine whether any 
should be revoked or modified.
---------------------------------------------------------------------------
    \105\SCRUB Hearing, supra note 81, at 2 (statement of Ronald M. 
Levin, Professor of Law, Washington University School of Law).
    \106\Cheryl Bolen, Shelanski Considering Changes in Agency 
Rulemaking Processes in Year Ahead, Bloomberg BNA Daily Report for 
Executives, at 1 (Jan. 16, 2014).
---------------------------------------------------------------------------
            1. Congress Already Has Tools for Enforcing Retrospective 
                    Review
    Congress already has numerous tools for influencing Federal 
rules. In addition to its numerous tools for exercising 
oversight, Congress may shape agency missions through the 
appropriations process, or narrowing agency authority through 
statute.\107\ Congress may also disapprove any rule proposed by 
an agency through the Congressional Review Act,\108\ or pass 
legislation to stay the effect of an existing rule. For 
instance, the House attempted to do this in the in the 112th 
Congress, passing legislation in response to the Environmental 
Protection Agency's cement manufacturing standards.\109\
---------------------------------------------------------------------------
    \107\See, e.g., Congressional Research Service, Congressional 
Influence on Rulemaking and Regulation Through Appropriations 
Restrictions, RL 34354 (2008).
    \108\5 U.S.C. Sec. 801(b) (2013).
    \109\Cement Sector Regulatory Relief Act of 2011, H.R. 2681, 112th 
Cong. (2011).
---------------------------------------------------------------------------
    Congress has already enacted several legislative mandates 
that require retrospective review.\110\ Section 610 of the 
Regulatory Flexibility Act (RFA) requires periodic evaluation 
of existing regulations that affect small business 
entities.\111\ The RFA also tasks agencies with demonstrating 
the continued need for rules, whether the agency has received 
complaints from the public concerning the rule, the complexity 
of the rule, and the extent to which the rule is duplicative or 
overlaps with other Federal rules, or State and local 
government rules.\112\ In 1996, the Economic Growth and 
Regulatory Paperwork Reduction Act was enacted,\113\ requiring 
requires certain financial agencies, such as the Federal 
Deposit Insurance Corporation, to conduct a review of their 
regulations every 10 years.\114\ Other reviews are conducted at 
the discretion of the agency.\115\
---------------------------------------------------------------------------
    \110\SCRUB Hearing, supra note 81 (statement of Ronald M. Levin, 
Professor of Law, Washington University School of Law).
    \111\Pub. L. No. 96-354, 94 Stat. 1164, 1169 (1980).
    \112\5 U.S.C. Sec. 610 (2014).
    \113\Pub. L. No. 104-208, Sec. 2222, 110 Stat. 3009 (1996), 
codified at 12 U.S.C. Sec. 3311 (2014). Other agencies subject to this 
statutory mandate are the Board of Governors of the Federal Reserve 
System, the Office of the Comptroller of the Currency, and the Consumer 
Financial Protection Bureau.
    \114\Id.
    \115\GAO Report, supra note 13, at 5.
---------------------------------------------------------------------------
            2. The Administration Has Issued Several Executive Orders 
                    Requiring Retrospective Review that Have Already 
                    Led to Hundreds of Rules Proposed for Elimination
    Retrospective review is also a top priority for the Obama 
administration.\116\ Since 2011, President Obama has issued a 
series of Executive Orders to have agencies conduct meaningful 
retrospective reviews.\117\ In January 2011, President Obama 
issued Executive Order 13563 directing agencies to ``consider 
how best to promote retrospective analysis of rules that may be 
outmoded, ineffective, insufficient, or excessively burdensome, 
and to modify, streamline, expand, or repeal them in accordance 
with what has been learned.''\118\ The Executive Order further 
directs each agency to: ``develop and submit to [OIRA] a 
preliminary plan, consistent with law and its resources and 
regulatory priorities, under which the agency will periodically 
review its existing significant regulations to determine 
whether any such regulations should be modified, streamlined, 
expanded, or repealed so as to make the agency's regulatory 
program more effective or less burdensome in achieving 
regulatory objectives.'' Soon thereafter, President Obama 
issued Executive Order 13579 in July 2011 encouraging 
independent regulatory agencies to ``consider how best to 
promote retrospective analysis of rules that may be outmoded, 
ineffective, insufficient, or excessively burdensome, and to 
modify, streamline, expand, or repeal them in accordance with 
what has been learned.''\119\ These analyses, together with 
supporting data and evaluations, should be released online 
whenever possible, according to the Executive Order. In 
addition, the Executive Order asked each independent regulatory 
agency to ``develop and release to the public a plan, 
consistent with law and reflecting its resources and regulatory 
priorities and processes, under which the agency will 
periodically review its existing significant regulations to 
determine whether any such regulations should be modified, 
streamlined, expanded, or repealed so as to make the agency's 
regulatory program more effective or less burdensome in 
achieving the regulatory objectives.''\120\ Such plans were 
required to be filed within 120 days from the date of the 
Executive Order.
---------------------------------------------------------------------------
    \116\Cheryl Bolen, Shelanski Considering Changes in Agency 
Rulemaking Processes in Year Ahead, Bloomberg BNA Daily Report for 
Executives, at 1 (Jan. 16, 2014).
    \117\SCRUB Hearing, supra note 81, at 2 (statement of Ronald M. 
Levin, Professor of Law, Washington University School of Law).
    \118\Exec. Order No. 13,563, 76 Fed. Reg. 3821 (Jan. 18, 2011).
    \119\Exec. Order No. 13,579, 76 Fed. Reg. 41587 (July 14, 2011). 
Independent regulatory agencies are ``independent'' in the sense that 
they are independent of the President. The President has limited 
authority to remove their leaders (usually, heads of such agencies can 
only be removed for cause, rather than at the President's pleasure). 
Stephen G. Breyer, et al., Administrative Law and Regulatory Policy 100 
(4th ed., Aspen Publishers, Inc. 1999). Such agencies are usually 
styled ``commissions'' or ``boards'' (e.g., the Securities and Exchange 
Commission, the Federal Communications Commission, the National Labor 
Relations Board).
    \120\Id.
---------------------------------------------------------------------------
    In May 2012, President Obama issued yet another Executive 
Order requiring agencies to ``conduct retrospective analyses of 
existing rules to examine whether they remain justified and 
whether they should be modified or streamlined in light of 
changed circumstances, including the rise of new 
technologies.''\121\ In particular, this Executive Order 
directed agencies to ``invite, on a regular basis . . . public 
suggestions about regulations in need of retrospective review 
and about appropriate modifications to such regulations.''\122\ 
The Executive Order required agencies to ``give priority, 
consistent with law, to those initiatives that will produce 
significant quantifiable monetary savings or significant 
quantifiable reductions in paperwork burdens while protecting 
public health, welfare, safety, and our environment.''\123\ In 
addition, the Executive Order directed agencies to ``give 
special consideration to initiatives that would reduce 
unjustified regulatory burdens or simplify or harmonize 
regulatory requirements imposed on small businesses.\124\
---------------------------------------------------------------------------
    \121\Exec. Order. 13610, 77 Fed. Reg. 28467 (May 14, 2012).
    \122\Id.
    \123\Id.
    \124\Id.
---------------------------------------------------------------------------
    According to Cass Sunstein, who served as OIRA 
Administrator from 2009 to 2012, these Orders cumulatively 
``energized'' agencies to identify nearly 600 outdated rules 
for elimination.\125\ Agencies have already finalized or 
formally proposed over a hundred of these reforms.\126\ For 
instance, the Department of Health and Human Services (HHS) has 
finalized several rules to remove hospital and healthcare 
reporting requirements, saving $5 billion over 5 years.\127\ 
Additionally, as Howard Shelanski, the current OIRA 
Administrator, recently noted, OIRA plans to establish ``more 
concrete ways to deepen and strengthen retrospective 
review.''\128\ Combined, these good-government initiatives have 
already resulted in hundreds of formal proposals to eliminate 
rules, representing billions of dollars in savings over the 
next several years,\129\ and substantially more in eventual 
savings.\130\
---------------------------------------------------------------------------
    \125\Cass R. Sunstein, The Regulatory Lookback, forthcoming in B.U. 
L. REV. (preliminary draft available at http://ssrn.com/
abstract=2360277) (draft at 13).
    \126\See Cary Coglianese, Moving Forward with Regulatory Lookback, 
30 YALE J. ON REG. 57, 58 (2013).
    \127\Dep't of Health & Hum. Servs., Plan for Retrospective Review 
of Existing Rules 3, 8-17 (2011), http://www.whitehouse.gov/sites/
default/files/other/2011-regulatoryaction-plans/
healthandhumanservicesregulatoryreformplanaugust2011.pdf.
    \128\Cheryl Bolen, Shelanski Considering Changes in Agency 
Rulemaking Processes in Year Ahead, Bloomberg BNA Daily Report for 
Executives, at 1 (Jan. 16, 2014).
    \129\Council of Econ. Advisers, Exec. Office of the Pres., Smarter 
Regulations through Retrospective Review 6 (2012), http://
www.whitehouse.gov/sites/default/files/lookback_report_rev_final.pdf.
    \130\Cass R. Sunstein, The Regulatory Lookback, forthcoming in B.U. 
L. REV. (preliminary draft available at http://ssrn.com/
abstract=2360277) (draft at 16).
---------------------------------------------------------------------------
            3. The SCRUB Act's Meat-Cleaver Approach to Rulemaking 
                    Would Create Immense Bureaucratic Hurdles without 
                    Addressing the Critical Barriers to Effective 
                    Retrospective Review
    The existing processes for retrospective review are a 
smart, scalpel-like approach to regulatory revisions. The 
overwhelming consensus of administrative law experts support a 
balanced and affordable approach to retrospective review that 
allows for agency flexibility and selectivity to target rules 
for elimination. In contrast, not even the conservative 
proponents of regulatory cut-go support a meat-cleaver approach 
to every regulation, which will only increase bureaucratic red 
tape and uncertainty.
    There is broad consensus from the nonpartisan 
Administrative Conference of the United States (ACUS) that any 
retrospective review should be selective, flexible, and even-
handed. These goals reflect the assessments and expertise of a 
broad group of practitioners, agency personnel, and academics 
in the administrative law field. In its recommendations on 
retrospective review, ACUS noted that any review should give 
agencies ``maximum flexibility to design processes that are 
sensitive to individual agency situations and types of 
regulations.''\131\ Given differences among agencies, ACUS 
stated that such processes should be ``tailored to meet 
agencies' individual needs'' and that the President as well as 
Congress ``should avoid mandating standardized or detailed 
requirements.''\132\ ACUS also recommended that the review 
should focus on the most important regulations with sufficient 
time and resources to ensure a meaningful review.\133\
---------------------------------------------------------------------------
    \131\Administrative Conference of the U.S., Review of Existing 
Agency Regulations, Recommendation 95-3 (adopted June 15, 1995).
    \132\Id.
    \133\Id. at 1-2.
---------------------------------------------------------------------------
    The GAO has likewise reported that the ``most critical 
barrier'' to effective retrospective review is agencies' 
``difficulty in devoting the time and staff resources required 
for reviews while also carrying out other mission 
activities.''\134\ Much like ACUS' recommendation that 
retrospective review be selective and flexible, GAO found that 
``it is not necessary or even desirable for agencies to expend 
their time and resources reviewing all of their 
regulations.''\135\ Rather, agencies should ``conduct 
substantive reviews of a small number of regulations that 
agencies and the public identify as needing attention.''\136\
---------------------------------------------------------------------------
    \134\GAO Report, supra note 13, at 7.
    \135\Id.
    \136\Id.
---------------------------------------------------------------------------
    Unlike the retrospective review advocated by ACUS and the 
GAO, the SCRUB Act's mandate of an unlimited and unbalanced 
review of all regulations would create immense bureaucratic 
hurdles to effective retrospective review. By requiring 
agencies to assess the cost of every new rule, the SCRUB Act 
would drown agencies in red tape. Furthermore, even the 
conservative proponents of regulatory cut-go acknowledge that 
legislation like the SCRUB Act is ``uncharted policy 
territory'' with major shortcomings.\137\ Noting that potential 
perils of regulatory cut-go, the conservative Competitive 
Enterprise Institute (CEI) recommended that Congress should 
proceed in a step-by-step experiment through pilot programs to 
test the feasibility of regulatory cut-go.\138\ CEI also noted 
that the result of this process could be to ``make regulation 
less accountable.''\139\ Acknowledging that legislation like 
SCRUB Act could spawn substantial paperwork burdens and fines, 
CEI observed that Congress may even need to create a separate 
regulatory audit agency, similar to the Internal Revenue 
Service (IRS), to ``promulgate rules to standardize accounting 
procedures and reporting requirements'' for costs to 
agencies.\140\
---------------------------------------------------------------------------
    \137\Marlo Lewis, Reviving Regulatory Reform: Options for the 
President and Congress, Competitive Enterprise Institute (Dec. 2004) 
84, http://cei.org/pdf/4446.pdf.
    \138\Id. at 3, 84.
    \139\Id. at 75.
    \140\Id. at 82.
---------------------------------------------------------------------------

                H.R. 4874 SECTION-BY-SECTION EXPLANATION

    A description of the bill's principal substantive 
provisions follows.

                      Title II--Regulatory Cut-Go

    Sec. 201. Cut-Go Procedures. Section 201(a) requires an 
agency, before it promulgates a new rule, to repeal rules that 
the Commission has classified to be repealed so that the annual 
costs of the new rule to the U.S. economy is offset by the 
repeal of the current rule. An agency may also preemptively 
repeal such rules identified by the Commission, or offset the 
costs of a new rule by repealing a rule listed in the 
Commission's report, but must achieve a net reduction in costs 
imposed by the agency's rules. This may require repealing 
additional rules of the agency listed in the Commission report.
    Sec. 202. Applicability. Once the agency has repealed all 
the rules identified by the Commission, then it no longer needs 
to go through the offset process.
    Sec. 203. OIRA Certification of Cost-Benefit Calculations. 
The OIRA Administrator must review and certify the accuracy of 
agency determinations of the costs of new rules issued under 
section 201. Such certification must be included in the 
administrative record of the relevant rulemaking by the agency 
promulgating the rule and submitted to Congress.

              Title III--Retrospective Review of New Rules

    Sec. 301. Plan for Future Review. Section 301 requires the 
agency, when promulgating a final rule, to include a plan 
providing for the review of such rule not later than 10 years 
after the date on when such rule is promulgated. The review 
must be substantially similar to the review required under 
section 101(h) of the bill. For non-major rules, the agency's 
plan must include procedures and standards to enable the agency 
to determine whether to eliminate unnecessary regulatory costs 
to the economy. When feasible, the agency must include a 
proposed plan for review of a proposed rule in its notice of 
proposed rulemaking and receive public comment on the plan.

                       Title IV--Judicial Review

    Sec. 401. Judicial Review. Section 401 makes agency 
compliance for immediate repeals and cut-go repeals are subject 
to judicial review under chapter 7 of title 5 of the U.S. Code.

                   Title V--Miscellaneous Provisions

    Sec. 501. Definitions. Section 501 sets forth various 
definitions. For example, it defines ``agency'' to include 
independent agencies. With respect to major rules, it employs a 
similar, but different definition for that term as used in the 
Congressional Review Act.\141\
---------------------------------------------------------------------------
    \141\For example, section 804 of the Congressional Review Act 
defines a major rule as:

any rule that the Administrator of the Office of Information and 
Regulatory Affairs of the Office of Management and Budget finds has 
---------------------------------------------------------------------------
resulted in or is likely to result in--

      (A) an annual effect on the economy of $100,000,000 or 
      more;

      (B) a major increase in costs or prices for consumers, 
      individual industries, Federal, State, or local government 
      agencies, or geographic regions; or

      (C) significant adverse effects on competition, employment, 
      investment, productivity, innovation, or on the ability of 
      United States-based enterprises to compete with foreign-
      based enterprises in domestic and export markets.
    Sec. 502. Effective Date. Section 502 sets forth the 
effective date as the date of enactment.

                               CONCLUSION

    The bill relies on the false premise that regulations 
undermine economic growth because of their attendant 
bureaucratic red tape. Yet, ironically, H.R. 4874 would drown 
agencies in additional layers of red-tape by making it nearly 
impossible to establish any new rule, no matter how pressing, 
or issue any guidance on existing rules. By requiring every 
agency to assess the costs of new rules or informal guidance 
and tasking the Office of Information and Regulatory Affairs 
(OIRA) with certifying each of these assessments, the SCRUB Act 
would waste untold resources and water-down existing oversight 
of Federal rulemaking. The SCRUB Act would force agencies to 
make dangerous false choices between using existing rules to 
protect the public health, or enduring years of delays and 
regulatory burdens through the bill's unworkable cut-go mandate 
to respond to emerging threats or develop better rules to 
address existing threats.
    Rather than streamline rulemaking or eliminate unnecessary 
rules through a thoughtful retrospective review process, this 
bill would result in years of delays and substantial regulatory 
uncertainty by requiring a new rulemaking process for any rule 
eliminated. Moreover, even conservative supporters of 
regulatory cut-go acknowledge that it would generate 
substantial regulatory costs in itself, perhaps even requiring 
an equivalent of the Internet Revenue Service to audit for 
compliance. In the process, H.R. 4874 would divert billions of 
dollars from agency budgets, undermining agencies' missions and 
wasting taxpayer dollars on a redundant and inefficient 
accounting experiment. This review would likely be the most 
costly in U.S. history without any evidence that it would 
create a single job beyond the Commission itself. Put simply, 
the bill prioritizes corporate profits over the health and 
safety of Americans.
    For the foregoing reasons, we strongly oppose H.R. 4874 and 
we urge our colleagues to join us in opposition.

                                   John Conyers, Jr.
                                   Jerrold Nadler.
                                   Robert C. ``Bobby'' Scott.
                                   Zoe Lofgren.
                                   Sheila Jackson Lee.
                                   Steve Cohen.
                                   Henry C. ``Hank'' Johnson, Jr.
                                   Judy Chu.
                                   Luis V. Gutierrez.
                                   Karen Bass.
                                   Cedric Richmond.
                                   Hakeem Jeffries.

                                  [all]