Text: S.Hrg. 115-372 — NOMINATIONS OF BROCK LONG, RUSSELL VOUGHT AND NEOMI RAO
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[Senate Hearing 115-372]
[From the U.S. Government Publishing Office]
S. Hrg. 115-372
NOMINATIONS OF BROCK LONG, RUSSELL VOUGHT AND NEOMI RAO
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
NOMINATIONS OF BROCK LONG TO BE ADMINISTRATOR, FEDERAL
EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF
HOMELAND SECURITY, RUSSELL VOUGHT TO BE DEPUTY
DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, AND NEOMI
RAO TO BE ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS,
OFFICE OF MANAGEMENT AND BUDGET
JUNE 7, 2017
Available via the World Wide Web: http://www.Govinfo.gov/
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana KAMALA D. HARRIS, California
Christopher R. Hixon, Staff Director
Gabrielle D'Adamo Singer, Chief Counsel
Margaret E. Daum, Minority Staff Director
Anna Laitin, Minority Policy Adviser
Laura W. Kilbride, Chief Clerk
Bonni E. Dinerstein, Hearing Clerk
C O N T E N T S
Senator Johnson.............................................. 1
Senator McCaskill............................................ 4
Senator Portman.............................................. 16
Senator Heitkamp............................................. 19
Senator Hassan............................................... 21
Senator Peters............................................... 23
Senator Hoeven............................................... 26
Senator Daines............................................... 28
Senator Carper............................................... 30
Senator Johnson.............................................. 39
Wednesday, June 7, 2017
Hon. Orrin Hatch, a U.S. Senator from the State of Utah
Prepared Statement........................................... 41
Brock Long to be Administrator, Federal Emergency Management
Agency, U.S. Department of Homeland Security
Prepared statement........................................... 43
Biographical and financial information....................... 45
Letter from the Office of Government Ethics.................. 59
Responses to pre-hearing questions........................... 64
Responses to post-hearing questions.......................... 88
Letters of support........................................... 105
Russell Vought to be Deputy Director, Office of Management and
Prepared statement........................................... 111
Biographical and financial information....................... 113
Letter from the Office of Government Ethics.................. 135
Responses to pre-hearing questions........................... 138
Responses to post-hearing questions.......................... 160
Letter of support............................................ 171
Neomi Rao to be Administrator, Office of Information and
Regulatory Affairs, Office of Management and Budget
Prepared statement........................................... 173
Biographical and financial information....................... 175
Letter from the Office of Government Ethics.................. 195
Responses to pre-hearing questions........................... 201
Responses to post-hearing questions.......................... 221
Letter of support............................................ 233
We've done 81% of Simpson-Bowles chart submitted by Senator
NOMINATIONS OF BROCK LONG, RUSSELL VOUGHT AND NEOMI RAO
WEDNESDAY, JUNE 7, 2017
Committee on Homeland Security
and Governmental Affairs,
The Committee met, pursuant to notice, at 10:02 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson,
Chairman of the Committee, presiding.
Present: Senators Johnson, Portman, Lankford, Hoeven,
Daines, McCaskill, Carper, Tester, Heitkamp, Peters, Hassan,
OPENING STATEMENT BY CHAIRMAN JOHNSON\1\
Chairman Johnson. Good morning. We will call this hearing
to order. We are going to be waiting for Senator Hatch, who
will make an introduction.
\1\ The prepared statement of Senator Johnson appears in the
Appendix on page 39.
I want to welcome the nominees. I want to thank you for
your willingness to serve this country. Coming from the private
sector myself, and this is absolutely true, I have been very
impressed with the quality of individuals that work for the
Federal Government. This nomination process is not easy, as you
are well aware, but the fact that we have so many patriots that
are willing to step up to the plate, subject themselves to this
process, and serve in the Federal Government for probably a
whole lot less than you can make in the private sector, says an
awful lot about your dedication to this country. I truly want
to thank you for that.
I know, in your opening statements, you will introduce your
family members. Specifically, I want to welcome all of them,
and I will leave it to you--do not forget to introduce your
For my opening statement, all I really want to do is to
quick read a description of the jobs, basically, you are going
to be filling, what the agencies do, and then I will turn it
over to my Ranking Member, Senator McCaskill, and then
hopefully Senator Hatch will be here to make an introduction.
Otherwise, we will proceed.
We are considering three nominations, one for the
Administrator of the Federal Emergency Management Agency
(FEMA), one as Deputy Director for the Office of Management and
Budget (OMB), and then the third is the Administrator of the
Office of Information and Regulatory Affairs (OIRA).
The FEMA Administration serves as the principal advisor to
the President and the Secretary of Homeland Security on
emergency management. The Administrator's duties include the
operation of the National Response Coordination Center (NRCC),
the effective support of all emergency support functions, and
more generally, preparation for and protection against,
response to, and recovery from all hazard incidents.
The Administrator is also responsible for management of the
core Department of Homeland Security (DHS) grant program
supporting homeland security, and for providing an annual
estimate of the resources needed for developing the
capabilities of Federal, State, and local governments necessary
to respond to a catastrophic incident. FEMA is 22 percent of
DHS's overall budget. A pretty simple job. I mean, not much to
it, so I appreciate you are willing to take it on.
The Deputy Director of Office of Management and Budget, the
role of that individual varies from Administration to
Administration, but is viewed as a general deputy to the
Director, assisting the Director in carrying out the
President's budget and management agendas across the Executive
Branch. The Deputy Director is primarily responsible for budget
development and execution. In addition, the Deputy Director
oversees eight OMB offices: General Counsel (GC), Legislative
Affairs, Strategic Planning and Communications, Economic
Policy, Legislative Reference, Budget Review, and Performance
and Personnel Management. The remainder of OMB is overseen by
the Deputy Director of Management.
From my own standpoint, the reason I came here is we
literally are mortgaging our children's future. We are $20
trillion in debt. The projected deficit over the next 30 years
is $129 trillion. These figures are incomprehensible, so, Mr.
Vought, you have some real challenges ahead of you as well.
Finally, the Office of Information and Regulatory Affairs,
was created as part of the 1980 Paperwork Reduction Act (PRA),
a law intended to curb the amount of, and duplication in
paperwork requirements imposed by regulatory agencies on the
public. The Administrator oversees requests from agencies for
any new information and collections in paperwork requirements.
The Administrator also oversees and coordinates proposed
regulations from agencies.
OIRA also conducts a regulatory review of so-called
significant rules, ensuring the analysis and legal basis used
to justify proposed rules is sound and consistent with criteria
established in relevant Executive Orders (EO) going back to
1993. This may include ensuring that cost-benefit analysis uses
well-established methods, that the agency considered potential
non-regulatory alternatives like market mechanisms, and that
the agency clearly identified a problem which justifies
regulatory action. The Administrator ultimately may decide to
either approve the rule or return it to the agency, with
From my standpoint, I think the number one component of a
solution of whatever problem we are talking about within this
Nation is economic growth. I think the number one impediment to
growth is overregulation. A $2 trillion per year regulatory
burden, almost $15,000 per year per household. Ms. Rao, you
have your challenges ahead of you as well, making sure that we
only issue regulations to provide certainty to the private
sector. Hopefully we can start rolling back overregulation that
harms economic growth.
With that I see our esteemed colleague, Senator Hatch, has
arrived. To be respectful of your time, Senator Hatch, I think
you would like to make an introduction and we will let you do
so right now.
OPENING STATEMENT OF THE HONORABLE ORRIN HATCH, A UNITED STATES
SENATOR FROM THE STATE OF UTAH
Senator Hatch. Well, thank you so much, Mr. Chairman. It is
my distinct pleasure to introduce Professor Neomi Rao at
today's hearing, and to fully commend her confirmation to the
I have known Professor Rao for some time now, ever since
she worked as a counsel to the Senate Judiciary Committee.
Since then, Professor Rao has distinguished herself in private
practice, government service, and academia. Her experiences
have prepared her well for what will be an important and
challenging task ahead.
The position of Administrator of OIRA may not receive as
much fanfare as other nominations but it plays a critical role
in modern policymaking. This Administration has said that it
would get serious about regulatory reform. Republicans in
Congress have said the same. Professor Rao's confirmation will
be an important step forward in fulfilling that promise.
Professor Rao's qualifications speak for themselves. After
graduating from Yale, Professor Rao attended the University of
Chicago Law School. She then clerked for Judge Harvie Wilkinson
III on the Fourth Circuit, and Justice Clarence Thomas on the
Supreme Court. After spending a few years in private practice,
she served as an Associate Counsel and Special Assistant to the
President, and then began a career in academia. She currently
teaches at the Antonin Scalia Law School at George Mason
University, where she is also the Founder and Director of the
Center for the Study of the Administrative State.
Mr. Chairman, there is little doubt at this point that our
present system for formulating and implementing Federal
regulatory policy is simply unacceptable. For years, citizens
and businesses have complained about an administrative process
that is opaque and unresponsive, and for years this process has
produced results that too often harm economic growth while
rarely improving public health and welfare.
Accordingly, over the span of several past Administrations,
a consensus has formed that an important step in streamlining
and improving the administrative process is to empower an OIRA
administrator. Professor Rao is supremely and uniquely
qualified to step into this role. Under her watch, we can
expect OIRA to carefully scrutinize rules to assure that they
satisfy cost-benefit analysis.
But, of course, as Professor Rao gets to work, we cannot
take our eye off the ball here in Congress. We will need more
than just exceptional candidates like Professor Rao at OIRA.
The Legislative branch must do its part. That is why I was
pleased to co-sponsor the Regulatory Accountability Act (RAA),
along with Senators Portman, Lankford, Manchin, and Heitkamp.
The Committee reported the legislation to the full Senate last
month, and I am hopeful that the rest of our colleagues on both
sides of the aisle will join us in making it law.
The RAA is a carefully negotiated bipartisan effort to
codify existing policy that streamlines and improves the
rulemaking process. Further, I will be introducing legislation
later this month, the Separation of Powers Restoration Act,
that will begin a conversation about the growth of Federal
regulation enabled by the Chevron Doctrine and abetted by broad
Just like the confirmation of Professor Rao, these efforts
at regulatory reform are not about politics. Regardless of
which party controls the presidency, regardless of which
controls Congress, our administrative process is broken. The
time to fix it is now.
In conclusion, Mr. Chairman, I will say one more time that
I am very pleased to be here today to introduce and recommend
Professor Rao for this important post. The Federal policymaking
process and Federal policy, generally, will stand to benefit
from her leadership. I want to thank you very much for this
opportunity to testify today and for your kindness in allowing
me to go forward. And I wish you the best. You will do just
Ms. Rao. Thank you, Senator Hatch.
Senator Hatch. Thanks, Mr. Chairman.
Chairman Johnson. Thank you, Senator Hatch. We certainly
I do want to recognize the fact that Senator Burr had a
conflict so he is unable to attend, but he wanted to introduce
Mr. Long, and I will ask consent to enter his written statement
and recommendation into the record.\1\ Also that Representative
Hensarling was going to introduce Mr. Vought but also had a
conflict and we will enter his written statement and
recommendation into the record\2\ as well. We also have some
other letters of recommendation for the nominees, which I would
also ask consent to enter into the record.
\1\ The prepared statement of Senator Burr appears in the Appendix
on page 105.
\2\ The prepared statement of Representative Hensarling appears in
the Appendix on page 171.
With that I will turn to our esteemed Ranking Member,
OPENING STATEMENT OF SENATOR MCCASKILL
Senator McCaskill. Thank you very much. Thank you, Mr.
Chairman, and thank you for the three of you, and it was a
pleasure to meet all of your families. I am painfully aware
that public service is a family affair, and so I want to make
sure that they get the recognition they deserve.
At today's hearing we will consider three nominees for
three very different jobs, but they are all three very
important, to our country and to our government.
I will start with Mr. Long and the Federal Emergency
Management Agency. Mr. Long, we are holding this hearing 1 week
into hurricane season. So far this year we have already had
several floods in Missouri and surrounding States, as well as
devastating tornadoes across the country. We have seen an
uptick in the number of serious disasters in our State,
especially flooding. I do not think the pace of response to
natural disasters in this country are going to slow down. I
think that pace is going to increase because of what is going
on with our environment.
You have had a career in emergency management, seeing the
process from all sides, at FEMA, at a State emergency
management agency, and consulting for cities, counties, and
private entities. I think you bring a wealth of experience to
this responsibility. If you are confirmed I look forward to
working with you as Missouri continues to recover from flood
damage, having very recently guided the disaster declaration
submitted to the Federal Government for the many counties that
were devastated by the recent floods.
Mr. Vought, you have been nominated to serve as Deputy
Director for the Office of Management and Budget. You have been
at OMB since January as a member of the beachhead team and as a
senior advisor working on the development of the budget
Without knowing as much about you as I may in the future,
that alone raises concerns for me. The budget released by the
President 2 weeks ago is highly problematic. The core
assumptions underpinning it are financial fantasy.
Representative Sanford, a conservative Republican from South
Carolina, put it kindly at the first hearing following the
release of the budget, stating that ``it presumes a Goldilocks
economy and is based on assumptions that the stars perfectly
align with regard to economic drivers.'' And since the budget
was released, key members of the Administration have been
unable to agree on exactly how it accomplishes the growth and
the revenue that it projects, the very underpinnings of that
On top of that, the budget cuts key programs that
dramatically impact rural Missouri and rural America. It
slashes Medicaid, which will hit rural hospitals and limit
access to nursing care for the elderly poor. It targets cuts to
programs that have paid for infrastructure development in small
cities and towns across Missouri. And it cuts the budgets of
Inspectors General (IG), the front line for identifying and
eliminating waste, fraud, and abuse in government spending.
Mr. Vought, the most essential role of a budget officer is
to get the numbers right. This budget simply does not do that,
and I speak as a former auditor, and it is not honest with the
American people about the impacts it will have. I would like to
hear that you will bring a new level of openness to the budget
process, but knowing that you were closely involved in the
drafting of this one, it causes me great concern.
If anything else, I would hope that there would be a
reconsideration of some of the fundamental assumptions in the
budget where numbers seem to have been counted twice, where
assumptions that are made have no evidentiary backing, and
where, if you actually believe what is being put on paper, it
still has devastating impacts to the rural areas in my State.
If you are confirmed, I will continue to watch OMB closely.
Particularly, I know my colleague is going to talk about this,
but we are particularly frustrated that we worked hard on a
bipartisan basis to get a permitting bill passed that will ease
permitting regulations for projects across the country. The
Obama Administration failed to stand that up. So far there has
been no inclination of the Trump Administration to stand that
up, and the irony is the President has called a press
conference for Friday, talking about how they are going to ease
permitting in public projects. And we are wondering, ``Hello?
We passed the law. Stand it up. Make it happen.''
I know, along with my colleague, who was in this Committee,
who got that bill passed, we will be watching closely to make
sure that law is implemented quickly and efficiently.
Ms. Rao, the Office of Information and Regulatory Affairs,
is an extremely powerful office that tends to stay out of the
public eye. OIRA has a significant and determinative role in
the rulemaking process for most Federal agencies. It
coordinates agency work and ensures that regulations are
properly developed, is responsible for reviewing regulations to
ensure they do not put an undue burden on the public, and
ensures that agencies' rules reflect the priorities and
policies of the President.
As we discussed yesterday, I am the first to say I am
supportive of reforms of regulatory process, to make it work
better for both consumers and businesses. I am proud of the
efforts that I have made, along with my colleagues, to clean
out some of the silly regulations that caused so many problems,
or to stop other regulations from coming to pass. And I will
not argue that the process in place today is not anywhere near
perfect. I know that many Americans, especially small business
owners and farmers in my State, feel like regulations keep
getting piled on them and making it harder every year to make a
living. Community banks fall in that same category.
That being said, I have deep concerns about this
Administration's efforts to simply dismantle regulations in
ways that do not seem to have underlying policy considerations,
and to disregard the importance of consumer protections and
public safety. Your academic writings display a healthy
distrust of regulatory agencies and disregard for the complex
reasons why regulations can be necessary in a market-based
I hope that if confirmed as the Administrator of OIRA that
you keep an understanding in mind that public safety and
consumer protection is very important, as you examine and
scrutinize regulations that come across your desk.
Thank you, Mr. Chairman, and I look forward to questioning
Chairman Johnson. Thank you, Senator McCaskill. It is the
tradition of this committee to swear in witnesses, so if you
will all rise and raise your right hand.
Do you swear the testimony you will give before this
Committee will be the truth, the whole truth, and nothing but
the truth, so help you, God?
Mr. Long. I do.
Mr. Vought. I do.
Ms. Rao. I do.
Chairman Johnson. Our first nominee is Brock Long. Mr. Long
has more than 16 years of experience working in emergency
management at the local, State, and Federal level. Mr. Long is
currently the Vice President at Hagerty Consulting, an
emergency management consulting firm in Illinois. From 2008 to
2011, he was the Director of Alabama's Emergency Management
Agency. He also gained experience serving as FEMA's Region IV
Hurricane Planner and Response Team Leader, and Georgia's
State-wide Hurricane Program Manager and School Safety
Coordinator. Mr. Long.
TESTIMONY OF BROCK LONG\1\ TO BE ADMINISTRATOR, FEDERAL
EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND
Mr. Long. Chairman Johnson, Ranking Member McCaskill,
Members of the Committee, it is truly an honor to be nominated
by the President for this job.
\1\ The prepared statement of Mr. Brock appears in the Appendix on
First I would like to take a minute to recognize my wife,
Mandi, of 14 years and my boys, Jonah and Isaac, 11 and 7. I do
not know if sleeping is allowed---- [Laughter.]
Senator McCaskill. It happens up here sometimes.
Mr. Long. Thank you. I have almost two decades' worth of
experience in emergency management, and it is a unique
experience. It is not just in the public sector. It is also in
the private sector. I started with Georgia Emergency
Management. I excelled. I proudly served with FEMA Region IV
previously. I saw the agency at its best time and at its worst.
I also served as the Director of Alabama Emergency Management
Agency, which allowed me to actually visualize and see how
Federal resources can be maximized at the State level and
passed down through to our State partners who are dealing with
I also hold my private sector experience very valuable. For
the last 6 years I feel like this experience has truly helped
me to put my fingers on the pulse of emergency management in
the community, and not just emergency management but the first
responders which we serve.
Not only have I been a part of teams to help communities
design emergency operations plans, test, train, and evaluate
those plans, I have also helped them to interpret FEMA
guidance, whether it is on the preparedness side or helping
them to navigate disaster recovery.
This agency has one of the most important missions inside
the Federal Government, and I believe the staff inside that
agency are the most important assets. I look forward to working
with them. I think they are very service-oriented individuals,
regardless of the criticism they may receive. They get up, dust
themselves off, go to work, and try to truly protect America,
save lives, and help people in time of their greatest need. If
confirmed I look forward to working with them very closely,
leading them, and helping the Nation to achieve resilience to a
much higher standard than where we currently are.
With that I will stand by for your questions. Thank you.
Chairman Johnson. Thank you, Mr. Long.
Our next nominee is Russell Vought. Mr. Vought is currently
a senior political appointee at OMB. Prior to joining OMB, he
was a Vice President at Heritage Action for America, and prior
to that worked as the Policy Director for the House Republican
Conference, the Executive Director for the Republican Study
Committee, was a staffer for several Members of Congress,
including, most recently, Representative Jeb Hensarling and
Senator Chuck Hagel. Mr. Vought.
TESTIMONY OF RUSSELL VOUGHT\1\ TO BE DEPUTY DIRECTOR, OFFICE OF
MANAGEMENT AND BUDGET
Mr. Vought. Thank you, Mr. Chairman. I want to thank you,
the Ranking Member, the Members of this Committee for the honor
of appearing before it. I also want to thank and introduce my
family, who has endured this process with me and the long hours
that come with serving your country in public roles. My wife,
Mary, is here, my daughter, Ella, my two sisters, and many
friends are here in support.
\1\ The prepared statement of Mr. Vought appears in the Appendix on
It is a joy to come home to the U.S. Senate. I worked for
my first 4 years of my career in this distinguished body,
mostly for Senator Phil Gramm. I spent hours on the Senate
floor, in committee, and at my desk, learning how the Senate
works its will, how an institution protects the rights of a
minority to be heard, and how statesmen ought to debate their
colleagues to move the vote and shape public opinion. It was
here that I developed a love for public policy, seeing how it
could be used to help the people of this country live freer and
more prosperous lives.
It is an honor to be nominated to serve as the Deputy
Director of the Office of Management and Budget. It is a job
that comes with great responsibility, and I am humbled that
President Trump and Director Mulvaney asked me to serve. I know
the quality of the men and women who have previously served in
this particular role, and I want to contribute to that long
line of distinguished public service.
My career has readied me for this moment. I spent over 12
years working in the House and Senate, with a specific emphasis
in budget policy. I was the Republican Study Committee's
(RSC's) Budget Director, writing its budget resolutions and
advising on budget policy. I went on to be the Executive
Director of the RSC, and then the Policy Director of the House
Republican Conference, under then Chairman Mike Pence.
All of these roles afforded me an opportunity to handle a
wide range of policy issues and to manage policy development
processes that ensured a wide variety of viewpoints were heard.
That is very much the job of the Deputy Director of OMB, to
build and further a policy process that ensures that the
President and his advisors receive all of the best analysis so
that the best decision can be made.
I also have experienced managing a large organization. I
spent the last 7 years managing many aspects of Heritage Action
for America, including staff and 17,000 volunteers across this
country. Volunteers are, in fact, volunteers. They have their
own viewpoints and ideas and you do not get very far working
with them if you do not have an appreciation for them as
leaders in their own right. That experience has prepared me
well for managing the men and women at OMB, who are career
experts in their field and have years of institutional
knowledge for this new Administration to draw upon.
As for the job to be done, it is immense. Our country faces
a $20 trillion national debt. That debt will wreck our country
if it is not tackled. That burden will fall on my children and
grandchildren if today's policymakers do not change the current
path. It will mean a lower standard of living for them and less
time for the truly important things in life, such as family and
community. That is not the American way.
I have spent my entire career caring about taxpayers and
families. I have fought to save them money and ensure that
their tax dollars are well spent. I come from a blue-collar
family. I am the son of an electrician and a public school
teacher. I know what they went through to balance their budget
and save for the future. My parents worked really long hours to
put me through school, but they also worked long hours to pay
for the high levels of government in their own life.
My old boss called them the wagon-pullers in our country.
Others have referred to them as the forgotten men and women.
They have always been my test for Federal spending. Did a
particular program, or spending increase, help the nameless
wagon-pullers across our country, working hard at their job,
trying to provide for their family and future without the
luxury of watching C-SPAN at that particular moment to know
that we might increase their burden at that minute? How would
they vote--yea or nay? I believe that as a country we have too
often failed that simple test and it is the reason that we are
facing a $20 trillion debt.
If the Senate confirms me, I am ready to take up that work
again. Thank you for considering my nomination and I look
forward to answering your questions.
Chairman Johnson. Thank you, Mr. Vought.
Our final nominee is Professor Neomi Rao. Professor Rao is
currently an Associate Professor of Law at George Mason
University. She founded the school's Center for the Study of
the Administrative State, and serves as the center's Director.
From 2005 to 2006, Professor Rao served as Associate Counsel
and Special Assistant to President Bush, and prior to that was
an Associate at Clifford Chance LLP in London. Professor Rao
worked as a Counselor for Nominations and Constitutional Law on
the Senate Committee on Judiciary, clerking for the Honorable
Justice Clarence Thomas on the U.S. Supreme Court. Professor
TESTIMONY OF NEOMI RAO\1\ TO BE ADMINISTRATOR, OFFICE OF
INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND
Ms. Rao. Thank you very much, Chairman Johnson, Ranking
Member McCaskill, and Members of the Committee. It is an honor
to appear before you as the President's nominee to be the
Administrator of the Office of Information and Regulatory
Affairs. I am grateful to the President and Director Mulvaney
for their trust and confidence.
\1\ The prepared statement of Ms. Rao appears in the Appendix on
I would first like to thank Senator Hatch for taking the
time to be here and for his generous introduction. Working on
the Judiciary Committee for then Chairman Hatch I learned about
law-making, and music-making, and living a good life. It means
a lot for me to have the support of such a distinguished and
respected member of this body.
I would also like to thank the Members of the Committee and
their staff for taking the time to meet with me. I appreciate
your graciousness and the chance to connect and to discuss
issues about regulatory policy. For those of you I did not have
a chance to meet, I hope that we may have an opportunity after
the hearing. If confirmed, I look forward to working closely
with Members of the Committee on issues relating to regulatory
and information policy.
If you will indulge me, I will take a moment to recognize
and thank my family. I am here today with my husband, Alan
Lefkowitz, and my two children, Isabella and Ezra. Alan's
unwavering support has made it possible for me to even consider
the demands of public service.
My father, Dr. Jehangir Rao, is also here, and has believed
in me at every stage of my life. I remember also my mother, Dr.
Zerin Rao, who died too young of cancer and I wish she could
have been here to share this day.
Leaving India in January 1972, my parents arrived in
Detroit in the middle of a snowstorm, without winter jackets,
but with their medical degrees, $16, and the optimism of the
recently married. They always imparted by example the
importance of integrity, perseverance, kindness, and a
commitment to service.
I would also like to share some information about my
background. For the past 10 years I have been a law professor
at the Antonin Scalia Law School at George Mason University,
where I have taught constitutional law and legislation and
statutory interpretation. My scholarship has focused on the
framework of constitutional accountability for administrative
agencies. About 2 years ago I founded the Center for the Study
of the Administrative State. The center commissions academic
research and hosts public policy conferences that bring
together scholars, practitioners, and government officials to
analyze and debate difficult questions of administrative law.
Prior to my academic career, I worked in the Office of the
White House Counsel, where I oversaw the legal work of a number
of agencies and helped to coordinate interagency discussions of
law and policy. I have also served on the Senate Judiciary
Committee as a Counsel for Nominations and Constitutional Law.
My other experience includes working for several years at a
law firm in London and clerking for Justice Clarence Thomas of
the U.S. Supreme Court, and Judge J. Harvie Wilkinson of the
U.S. Court of Appeals for the Fourth Circuit.
My academic background and practical experience in all
three branches of the Federal Government have helped me to
understand the regulatory process and the respective roles of
Congress, the President, and the Courts in Administration.
Since Congress established OIRA and the Paperwork Reduction
Act of 1980, OIRA has operated with a consistent mission to
improve the quality of decisionmaking in administrative
agencies through regulatory review and the coordination of
information policy. OIRA plays a vital role within the
Executive Branch to ensure that administrative agencies follow
the law, base their decisions on the best possible economic and
technical analysis, and fulfill Presidential priorities.
Within the requirements set by Congress, OIRA works with an
overarching goal of creating the greatest benefits for the
American people while minimizing regulatory burdens. Reading
through OIRA's statutory authority, as well as Executive Orders
and OBM guidance, I have been struck by the consistency of the
principles guiding the work of the office across
Administrations. Perhaps this is one reason why so many
talented professionals work at OIRA and often stay for many
years, serving Presidents of different parties.
I am humbled to be nominated for this role. If confirmed as
Administrator, I would work to ensure the continuity of OIRA's
principles, updating and refining when necessary, but
maintaining the integrity of the process that has developed. I
would also look forward to working with Members of this
Committee and other Members of Congress on legislation relating
to regulatory reform and other issues within OIRA's purview.
Thank you for your consideration. I look forward to
answering your questions.
Chairman Johnson. Thank you, Professor Rao. There are three
questions the Committee asks every nominee, for the record. I
will read each question and then ask for a verbal response from
each of you.
Is there anything you are aware of, in your background,
that might present a conflict of interest for the duties of the
offices to which you have been nominated. Mr. Long.
Mr. Long. No.
Chairman Johnson. Mr. Vought.
Mr. Vought. No.
Chairman Johnson. Professor Rao.
Ms. Rao. No.
Chairman Johnson. Do you know of anything, personal or
otherwise, that would in any way prevent you from fully and
honorably discharging the responsibilities of the office to
which you have been nominated? Mr. Long.
Mr. Long. No.
Chairman Johnson. Mr. Vought.
Mr. Vought. No.
Chairman Johnson. Professor Rao.
Ms. Rao. No.
Chairman Johnson. Do you agree, without reservation, to
comply with any requests or summons to appear and testify
before any duly constituted committee of Congress if you are
confirmed? Mr. Long.
Mr. Long. I do.
Chairman Johnson. Mr. Vought.
Mr. Vought. I do.
Chairman Johnson. Professor Rao.
Ms. Rao. Yes.
Chairman Johnson. Good. I appreciate it. I appreciate your
anxiousness to answer the question. [Laughter.]
Let me start with you, Mr. Long. Last Congress the
Committee passed legislation known as the Integrated Public
Alert and Warning System (IPAWS), that would authorize and
enhance the public alert warning system. The key parts of the
law have not been implemented and deadlines have been missed.
This includes the requirement to create a mandatory training
program on how to use the system and to form a subcommittee
comprised of Federal, State, and local agencies to consider
improvements to the system.
This responsibility falls under FEMA. Will you commit to
the Committee that if confirmed you will ensure that these
provisions are fully implemented?
Mr. Long. Thank you, Chairman Johnson. I am very familiar
with the IPAWS program and I believe that making sure that we
have clear lines of communication and multiple ways of
communicating and redundancy is the key to getting through
response in disasters. I have also, with my previous experience
as the State Director of Alabama Emergency Management worked
through a couple of pilot programs with the IPAWS program. It
is an incredibly important program. Obviously, at this point,
respecting the nomination process, if confirmed I would be
happy to evaluate where we are, but I am not familiar at this
time about the deadlines that we are missing.
Chairman Johnson. OK. Well, one of the reasons I am
bringing it up is I was with Chairman Pai in Wisconsin on
Monday with broadcasters and they brought this up. Obviously
they are very supportive of IPAWS. They want to make sure it
gets implemented. Again, I realize you are the nominee but I
just want that commitment that you will follow the law and
implement these procedures.
Professor Rao, in President Trump's Executive Order
regarding the ``one-in, two-out'' rule--this Committee has held
two hearings on it, one in conjunction with the Budget
Committee. Certainly what I have seen coming from the private
sector, and talking about that regulatory burden, everything in
Washington that you see is basically additive. You have
regulators; they regulate. You have legislators; they
legislate. Everything is additive. The problem we have is layer
upon layer of rules, regulation, law--we spend billions with
procurement procedures so we do not waste a buck, and it just
does not work, and we were unable to update our computer
Can you speak a little bit in terms of how you would view
the ``one-in, two-out'' rule and how that would be implemented?
Ms. Rao. Thank you, Senator. I think the ``one-in, two-
out'' is an important step for considering how to reduce the
overall regulatory burden that you are speaking of, and I think
it can work. OMB has issued guidance on this matter, and the
way I think it will work, in practice, is that agencies will
identify regulations to eliminate, and those regulations might
be ineffective ones, or excessively burdensome, and those
regulations will have to meet a cost-benefit analysis for
deregulation before they are going to impose any new regulatory
Chairman Johnson. This would actually be a subtractive
process. I do not know how many regulations I see on the books
that are just, basically gathering dust but doing real harm to
our economy. I would think every Senator on the dais here, at
almost every meeting we take with constituents, the number one
concern on their minds is, one regulation after the one that is
putting them out of business.
We had the Chancellor of the University of Wisconsin-
Madison come in and testify. They issued a study. Forty-two
percent of researcher time at research universities is spent
complying with Federal regulations, the paperwork, which is
just an unbelievable burden. But again, I really encourage you
to take a look at that seriously and utilize that executive
authority to remove two regulations for every new one, and
hopefully the new one overwrites some of the bad ones as well.
Mr. Vought, I appreciated, in your testimony, how much you
concentrated on the $20 trillion in debt. As I mentioned in my
opening comments, the projected deficit over the next 30 years
is $129 trillion. You spoke of your responsibility primarily
providing the analysis for good policymaking.
I have been here 6 years, going into year 7 now. It is
depressing how very few people are focusing on and talking
about that $20 trillion debt burden and the projected deficit.
We budget for now less than 30 percent of what the Federal
Government spends. Seventy percent is completely out of
Can you just speak to, how you intend to convey that to the
White House, to the Administration, so we start getting serious
about not mortgaging our children's future?
Mr. Vought. Thank you, Senator. I think this budget is a
great example of this Administration's commitment to dealing
with deficits and debt over the next 10 years and into the
future. This budget has more reductions in entitlement savings,
which are the type of savings that you mentioned in your
question, than any budget that has ever been proposed by a
President, from a nominal standpoint. It has more reductions in
the rate of growth to entitlement spending, as a percentage of
the base, than any President's budget since President Reagan's.
I think it shows that this Administration is very serious
about tackling the debt and dealing with the deficits that are
projected to rise greatly over the next 10 years, if nothing is
done. As an Administration, the fact that it balances--we have
begun to get back to having a conversation, as a country, about
what it takes to balance our books, and I think that is another
aspect of this as well.
I have noticed, being a participant in compiling some of
the options for the director to decide upon presenting to the
President, that the whole focus on balance leads to a
commitment to finding savings and reductions wherever you can,
and then finding a way to justify them and to be able to think
through what are the tradeoffs with a given policy proposal. I
think that is healthy and I think that is one of the ways that
we begin to tackle the debt.
Chairman Johnson. As my closing thought to all of you, what
we are trying to do, this Committee, is through a hearing
process lay out realities, is the first step in this problem-
solving process, which starts with gathering information,
defining the problem, do a root cause analysis, things like
strengths, weaknesses, opportunities and threats (SWOT)
analysis, that type of things. Lay out that reality. Based on
that reality, set achievable goals, and once you have done all
that work, then you start working on the regulations, the
rules, the legislation.
If confirmed, in your roles, I really want you to utilize
this Committee to help lay out those realities that you are
seeing within your agencies. I want to be a real partner with
you here, and I think all of us do. We have enormous
challenges, but it starts with that information, and laying out
With that I will turn it over to Senator McCaskill.
Senator McCaskill. Thank you, Mr. Chairman. My background
is as a prosecutor and an auditor, and so when I came to the
Senate I began doing what has been the meat and potatoes of my
work here, which is oversight. I was really moved, frankly, Mr.
Vought, in your opening statement, that you expressed such
affection for the Senate. It was appreciated that you talked
about what makes the Senate so important in our constitutional
framework, which is the way the Senate protects the rights of a
minority to be heard.
So you can imagine, if I have done oversight from day one--
and, by the way, talking about saving money, billions and
billions of dollars in wartime contracting, that we worked on
and accomplished, in terms of changing the way we do
procurement within a contingency operation in our military--I
can give you lists and lists of examples of where we have
ferreted out billions of dollars being poured down rat holes in
the Federal Government. You can imagine my concern when I hear
that the White House is telling executive agencies to not
respond to ranking members' requests for information.
We ask that question of all of you, and we ask, do you
agree, without reservation, to reply to any reasonable request
for information from a ranking member of a duly constituted
committee of Congress? Mr. Long, you said yes?
Mr. Long. Yes.
Senator McCaskill. Unequivocally. Thank you for that
Mr. Vought, you said ``subject to the discretion of the
director and advice of legal counsel.'' As a lawyer, do you
agree with legal counsel's decision that just because I am a
Democrat I am not entitled to information that allows me to do
oversight as a member of the U.S. Senate, and as the Ranking
Member of the Government Oversight Committee?
Mr. Vought. Thank you, Senator. I have not actually read
Office of Legal Counsel (OLC's) opinion on that, but as an
Administration, it is controlling right now, in terms of the
guidance that has been given out as to how the agency should
respond to oversight requests and having them go through the
Chairman, and to have the oversight process flow that
Senator McCaskill. Are you aware, in the history of the
Senate, that there has been an Administration that has said,
``We will not provide information to the Ranking Member of the
Committee on Government Oversight''? Are you aware of that ever
occurring before? Did you ever work for a Senator that was in
Mr. Vought. I did work for a Senator in the minority.
Senator McCaskill. And do you think that Senator would have
taken that sitting down, if an Administration said, ``I am
sorry. You cannot request information from the government to
find waste, fraud, and abuse if you are a Democrat, or if you
are in the minority? ''
Mr. Vought. Senator, I look forward to working with you in
a transparent manner. I am looking forward to working with you
in ferreting out waste, fraud, and abuse. In terms of formal
communications that are sent to the Administration, I am merely
reflecting the Administration's policy in regard to the OLC
Senator McCaskill. Well, we have had one nominee say yes,
unequivocally. I have had the Secretary of Homeland Security
say yes, on the record, unequivocally, in this Committee
hearing room, and to me personally, and his rank, frankly, is
higher than yours. So if you cannot give me a straight answer,
do you think--let me ask you this. Do you think it is right
that an Administration would say that the Ranking Member of the
Oversight Committee in the U.S. Senate is not entitled to
oversight information? Do you think that is a correct decision?
Mr. Vought. Senator, I think the rule of law is important
and if OLC has----
Senator McCaskill. So you think it is the rule of law.
Mr. Vought. OLC has an opinion, Senator, in which it has
put forth a position for this Administration as it pertains to
responding to oversight requests, and that is merely what I am
Senator McCaskill. OK. Well, we have a huge problem, if you
cannot even say out loud--even though the Secretary of Homeland
Security has unequivocally said, ``Absolutely, we will get you
information,'' and does so on a regular basis. We have a huge
problem if you cannot even say whether you think it is right or
wrong. You cannot say whether you think it is right or wrong?
Mr. Vought. Senator, again, I have said I am looking
forward to, if the Senate confirms me, working with this
Committee in an open and transparent way. Again, I am
reflecting the fact that this Administration is under an OLC
opinion that has instructed the agencies on how best to engage
with formal oversight requests from the various committees.
Senator McCaskill. Well, the people that elected me did not
send me here to take that answer lying down, and I have to tell
you, I will punch above my weight on this. If this
Administration thinks they are going to withhold important
government information from the Ranking Member of the Oversight
Committee of government, because they want to make sure we
never find out anything--by the way, I did oversight in the
Bush Administration and I think the Chairman will back me up; I
know Senator Portman will back me up--I did aggressive
oversight of the Obama Administration. The notion that we are
going to our partisan corners on oversight is disgusting.
I am disappointed with your answer, and let me ask you, Ms.
Rao, how do you feel about providing information to the Ranking
Member of the Oversight Committee of the U.S. Senate?
Ms. Rao. Senator McCaskill, if confirmed I would do my best
to provide information. The Office of Legal Counsel memorandum
that was spoken about I think speaks to whether there is a
requirement to do that but it leaves discretion within
agencies, and I am committed to working with this Committee on
Senator McCaskill. I would love your analysis, as somebody
who has spent a great deal of time with the law, as to the
underlying legal basis for that opinion. I think it is hogwash.
I have looked at it. It is just trying to shut off information
to people who want to find problems. Welcome to the big
leagues, administration. This is what happens. You get
oversight. It is the function of the Congress to do oversight.
I am hopeful that--so far I have not--we have had a few
problems, but not to the extent many of my colleagues have on
other committees, and it would be really bold for this
Administration to cutoff information to this Committee, no
matter whether it is a Republican or a Democrat.
I know I am out of time. I did not expect that to take as
long as it did, but I will come back to ask you about FEMA and
the budget cuts and then some more questions for you, Mr.
Vought, about the budget.
Thank you, Mr. Chairman.
Chairman Johnson. Senator Portman.
OPENING STATEMENT OF SENATOR PORTMAN
Senator Portman. Thank you, Mr. Chairman. I appreciate the
nominees' willingness to serve and distinguished backgrounds,
all three of you.
Just a brief comment. I have not looked at the OLC legal
opinion and I probably should not speak, but I will. As
Associate Counsel in the first Bush Administration and then as
OMB Director in the second one, it was often frustrating
dealing with Congress, but I felt it was my responsibility to
provide information. The branch that you are now before has the
opportunity to confirm you or deny your confirmation, and that
is because that is the way the founders set it up. They also
set it up so that we would have the opportunity to do
oversight, and the elected representatives, each of us
representing, in my case over 11 million people, expect us to
do that oversight.
I do hope that the information will be forthcoming to this
Committee, and I know the Chairman feels the same way, that,
this is our responsibility.
I have so many questions, but let me just start, if I
could, with you, Mr. Vought. Again, you are stepping up to take
on a very tough job. I relied heavily on the deputy at OMB when
I was there. As you know, there is a deputy for management and
also one more for the budget functions, and you have a lot of
interaction with OIRA, should you be confirmed, so it is good
you guys are sitting close together. That may not be true in a
couple of years, after you have some clashes. No, just kidding.
I am sure you will get along great.
But let me focus on one thing that was mentioned earlier,
and that is infrastructure. Today the President is in my
hometown of Cincinnati talking about infrastructure. I am
delighted he is doing that. He is going to talk about locks and
dams on the Ohio River and he is going to talk, I hope, about
broader infrastructure questions. On Friday he is supposed to
be talking about permitting.
I know you are not there yet, and when you were at Heritage
Action you guys actually opposed the highway bill that passed
the Senate. I hope you did not oppose the permitting reform. I
do not think you did. I think, in fact, you would have been
supportive of that had you been asked to opine on that
But Title 41 of the FAST Act has the permitting reform that
was talked about earlier, and it is absolutely needed. We have
projects, on the Ohio River, as an example, including some of
our dams that have taken 6, 7, 8, 9, 10 years, and capital is
not that patient anymore. It goes somewhere else, and it does
not just go to other State, it goes to another country.
Our reform effort, and Senator McCaskill and I did this
together on a bipartisan basis, for 5 years worked on it. We
had the Chamber of Commerce, the manufacturers, and others with
us. We also had the AFL-CIO Building Trades Council with us,
because they all wanted jobs, and they saw what was happening.
We took the statute of limitations, for instance, from 6 years
down to 2 years, after a National Environmental Policy Act
(NEPA) review. Our original bill, actually, was even shorter
than that, but that is a huge change right there. We have this
dashboard now where citizens are able to get transparency to be
able to see what the status is of a project, and it puts one
agency in charge, which is really important because the right
hand often does not know what the left hand is doing. We have
energy projects in Ohio where 35 different permits are
sometimes required, sometimes sequentially. So the effort is
just to make it more efficient.
We set up this thing called the Federal Permitting
Improvement Steering Council (FPISC). It sits at OMB, and I
fought hard to get it to OMB, and not to Council on
Environmental Quality (CEQ), where some other folks wanted it,
because we believed OMB had some leverage. I think Senator
McCaskill will tell you--we went back and forth on this quite a
bit and she took some heat on it, but we wanted to put it
somewhere where you had part of the government, OMB, that
actually has some leverage over the other agencies and
departments, partly because of the budget function that you
will be very involved with.
Are you, one, aware of this issue of the permitting reform,
the need for it, and the legislation that we have already
passed, and are you aware of the fact that this FPISC
organization has not been stood up, that we do not have an
executive director. There is an acting person there now. Do you
have thoughts on why that is and why we cannot get this going?
Mr. Vought. Thank you, Senator. I am aware of the
Permitting Council. I am aware it is a priority for the
Administration. Funding was included in the President's budget
for it, specifically in regard to the impact that it has in
order to leverage the types of reforms and spending that we
need, as an Administration, to be able to get $1 trillion of
investment into infrastructure spending.
I cannot speak to why there has been a delay in setting up
the council, but from a funding aspect, it has been a priority
of the Administration.
Senator Portman. Well, I am glad to hear you say that, and
I hope you personally will roll up your sleeves and get
involved in this, because I do think it is incredibly
important, as we are trying to figure out how to spend tax
dollars more efficiently. The dollar is going to be much more
valuable if it is in the context of a permitting reform effort,
where we do not have to go through these long delays and
Are you looking for any additional authorities on this, do
you know? Any other thing we need to do, in Congress, to be
Mr. Vought. It is not something that I have inquired on
yet, because I have not been confirmed, but if confirmed,
Senator, it would be something that I would want to inquire
upon and to seek advice within the OMB as to ways that we can
improve the statute.
Senator Portman. OK. I appreciate that, and what I am
asking for today is your personal commitment that should you be
confirmed that you will be supportive of getting FPISC set up
and using the authorities we have already given you, on a
bipartisan basis, which is rare around here, to actually make a
difference, and not just talk about it but actually implement
Mr. Vought. You have that, Senator.
Senator Portman. I appreciate that.
Ms. Rao, thank you very much again for your willingness to
serve. Wow, what a background. You have been involved in
regulatory affairs for a long time. Senator Heitkamp and I have
legislation that Senator Hatch talked about--he is one of the
original co-sponsors--called the Regulatory Accountability Act.
I assume you are aware of the Regulatory Accountability Act.
Have you followed that?
Ms. Rao. Yes, I have.
Senator Portman. I know that there is a lot of interest in
trying to find some way to get the independent agencies into a
more systematic cost-benefit analysis, like the Executive
Branch agencies. Do you support what we are trying to do there,
to tell the independent agencies they, too, have to go through
a cost-benefit analysis?
Ms. Rao. Thank you, Senator. I think that the question
about the independent agencies is a very important one, and has
been considered over the years, pretty much since the inception
of OIRA, should we be including the independent agencies. I
think that, in principle, it makes a lot of sense to have the
independent agencies follow the same cost-benefit analysis as
other agencies, and that was a position reflected in the Obama
Administration, and it is a position, that is in the Regulatory
Accountability Act as well.
Senator Portman. With regard to lookback, Senator Heitkamp
improved the legislation by putting a retrospective review in,
requiring agencies to review the most expensive regulations
they already have on the books at least once every 10 years.
How do you feel about that?
Ms. Rao. Senator, I think retrospective review is a really
important issue, because at the outset, when a regulation is
proposed, even with the best analysis there is only a
prediction about costs and benefits. Being able to look back to
see how a regulation has actually worked, what its actual
effects were, its costs and benefits, is very important,
especially to reducing the regulatory burden of ineffective or
Senator Portman. My time is up. I have already stolen
Senator Heitkamp's question, so she is already mad at me. But
my question to you--would you commit to working with us, on a
bipartisan basis, to try to get this Regulatory Accountability
Act though this process? This was marked-up by this Committee,
Chairman, what, 2 weeks ago, with your support and help, and
thank you. It is common-sense stuff, and we need help from the
Administration to ensure that we can get this done.
Do you make that commitment today?
Ms. Rao. Senator, I would be happy to commit to working
with the Committee on your regulatory reform proposals.
Senator Portman. Thank you, Mr. Chairman.
Chairman Johnson. Senator Heitkamp.
OPENING STATEMENT OF SENATOR HEITKAMP
Senator Heitkamp. Thank you, Mr. Chairman. Mr. Vought, I am
going to give you a second chance here, and I think we all kind
of sat stunned because we certainly expected a different answer
to the question that Senator McCaskill asked you. You heard
Professor Rao's response to the same question, saying, in her
opinion, that legal opinion gave her discretion and that she
was going to use that discretion to be cooperative with this
Committee. Do you want to restate your position? Is your
position you are never going to deal with the minority and that
that legal opinion prevents you from dealing with the minority?
Mr. Vought. Of course not, Senator. That is not my position
at all. I look forward to working with this Committee if
confirmed in an open and transparent way. Senator McCaskill was
asking me specifically with regard to response to formal
oversight letters, and as it pertained to the OLC memorandum,
and that is what I was referring to.
Senator Heitkamp. Right. Let us get to that. So you are
saying that as it relates to formal requests from the minority
party, from this Committee, that you have no intention to
responding to those requests?
Mr. Vought. Senator, I am going to look to the direction of
our legal team and the director in how we respond to various
oversight levels, and one of the things that we will be looking
to is the OLC opinion.
Senator Heitkamp. My question is, do you think that
yesterday, when Secretary Kelly gave us an unequivocal answer
that he intends to cooperate with the minority party, respond
to any requests, that he is violating that legal opinion and
doing something illegal in making that commitment to us?
Mr. Vought. Senator, I do not know what Secretary Kelly
said. He is running his department and agency----
Senator Heitkamp [continuing]. Under the same legal
guidelines from the Office of Legal Council. Correct? That
opinion applies equally to you and Secretary Kelly.
Mr. Vought. Correct.
Senator Heitkamp. Is that correct?
Mr. Vought. Yes, ma'am.
Senator Heitkamp. Then why is your distinction different
than Secretary Kelly's?
Mr. Vought. We have been given direction from OLC, in terms
of how we should deal with formal oversight requests.
Senator Heitkamp. The opinion itself, as outlined by
Professor Rao, gives you discretion. We are asking you to make
the commitment today that in your discretion you will deal
equally with the minority and majority party of this Committee.
Mr. Vought. Senator, I would be willing to commit to
working equally in dealing with you to cooperate in oversight
as it pertains to certain formal oversight letters. If
confirmed, in my responsibilities as the deputy director, I am
going to seek our legal team's advice and the advice from the
Senator Heitkamp. I think anyone, on either side of the
aisle--because I have been both in a situation where I have
served where the President was of my political party. Now I am
serving where the President is--I think what you are saying is
absolutely outrageous. I just have to tell you that it is very
troubling, and it should be troubling not just for the minority
party today, but that party that could be minority party in 2
years, 4 years, or 6 years. I am very troubled by your response
to this line of questioning, and find it almost disqualifying
in supporting your nomination, quite honestly.
Now I was going to ask you a series of questions on cost-
benefit analysis. I will save those for the Office of
Management and Budget. But I do not think that you can come
here and say you respect the Senate and take the position that
you have just taken as a matter of law, when other people, as
Senator McCaskill said, who outrank you, have taken a different
I am going to turn to Professor Rao. We had a very
enjoyable meeting and I have to tell you, I cannot see your
families but I certainly could see your family on this side.
The pride and love that they have for you is so overwhelming.
As somebody who lost her father at a very young age, I want you
to know I am pretty sure your mom knows what a great success
and what a great pride she has in you also.
I am going to run through just a series of questions,
because I do not have a lot of time, on cost-benefit analysis.
As Senator Portman has said, we want to continue to work on
this effort. As I have told you in my office, I believe that
the gimmicks of ``two-in, one-out'' are not going to be
particularly successful. We need to be more surgical. I also
have told you that I am very concerned about ongoing regulation
that has to exist as a result of outdated law, that we really
expect you to come to us with a list of statutory changes that
need to be made to eliminate burdensome and unnecessary
regulation. We have to be in this together.
In your personal opinion, do you believe that cost-benefit
analysis is appropriate for deregulation actions?
Ms. Rao. Yes, Senator Heitkamp, I do.
Senator Heitkamp. Thank you. Do you believe that cost-
benefit analysis for deregulation actions deserve the same
level of scrutiny as if you were enacting a major legislation?
Ms. Rao. Yes, Senator, and that has been the position that
OMB has taken in its guidance on the new Executive Orders.
Senator Heitkamp. Correct. Do you believe that indirect
costs and benefits should be taken into consideration when
conducting cost-benefit analysis?
Ms. Rao. I do, and that is, again, part of the long-
standing practice of OIRA and the agencies, to take those
effects into account.
Senator Heitkamp. Do you believe that there is a role for
qualitative and non-monetized benefits in cost-benefit
Ms. Rao. Yes, I do believe they can play a role.
Senator Heitkamp. Thank you. Do you believe in the
principles set forth in Executive Order 12866 should be
reaffirmed by the Administration?
Ms. Rao. Yes. I think that those principles are very solid
and have, in fact, been reaffirmed by this Administration.
Senator Heitkamp. The same thing with Circular A4, given
that the circular is only guidance and not technically the law
of the land, if tasked with drafting a new guidance to instruct
agencies on how to conduct cost-benefit analysis. Would you
reaffirm the same principles that are in Circular A4?
Ms. Rao. Again, I think those principles are very solid
and, may require some updating, but I think the basic core of
that is solid.
Senator Heitkamp. I have just one more question, and this
goes to the very important work. There is no one on this dais
who does not rely--we have great bipartisan interaction with
former heads of OIRA. You are really stepping into a critically
important position. I have long maintained that you are
understaffed. Can you tell me what you are going to do to try
and either manage this important job with the staff that you
have or advocate for a few more folks who I think could
actually save you money in the long run? This is the push-pull
Ms. Rao. Thank you, Senator. I think the President's budget
does call for an increase in resources in OIRA.
Senator Heitkamp. Do you think it is adequate?
Ms. Rao. I am not sure as to the precise resource needs. I
understand that former administrators believed that the office
could use some more support, and so I commit to looking into
Senator Heitkamp. We commit to helping you. Senator
Lankford is not here but we certainly commit to helping you in
the future. And just so you know, we expect that we are going
to see you a lot in our Subcommittee. We are very excited about
the expertise that you bring to this job and excited about
getting to work with you going forward. Thank you so much for
agreeing to accept this position.
I have a lot of questions for FEMA. I will reserve those,
maybe if we get to a second round. Thank you.
Chairman Johnson. Senator Hassan.
OPENING STATEMENT OF SENATOR HASSAN
Senator Hassan. Thank you, Mr. Chairman, and thank you to
all the nominees for being here, and also a special thank-you
to the families who are here, because it is a family affair to
serve and we are very grateful.
Just at the outset, Mr. Vought, I will add my concern about
your answer on the OLC's guidance. We were elected to represent
Republicans and Democrats, and it is my view that the
Administration serves members of both parties in their
oversight role, and I am hoping that you will rethink your
I wanted to spend some time on issues concerning FEMA, and,
Mr. Long, it was so nice to meet with you yesterday. I want to
talk a little bit about pre-disaster mitigation, something we
touched on yesterday. I think we can all agree that the
frequency and intensity of natural disasters are on the rise.
If we are going to blunt the effects of these disasters we are
going to have to make effective and sustained investments in
our infrastructure prior to the disasters happening.
As Governor, I often found myself dealing with the same
flooded areas in New Hampshire, year after year. We would clean
it up and then it would flood again. Federal support came only
in the aftermath of these crises, leaving it up to our State to
address the front-end investments in infrastructure that would
have helped to mitigate the crisis in the first place.
Consequently, we took steps to launch a hazard mitigation
initiative in New Hampshire that would help us to inventory our
most at-risk locations during natural disasters and help us to
develop a way to target our limited resources more effectively.
From my experience, our Federal programs may not be
properly incentivizing our States to make the necessary
investments in our infrastructure that will help to mitigate
the long-term consequences after these disasters. I should note
that one of the key FEMA programs that actually does encourage
this kind of investment, the Pre-Disaster Mitigation Grant
Program, was cut in half in the President's Fiscal Year (FY)
Mr. Long, can you talk to me about your approach to pre-
disaster mitigation investments and whether you support a
Federal role for incentivizing these kinds of investments?
Mr. Long. Thank you, Senator. I believe that mitigation is
the foundation of emergency management, or let us just say the
cornerstone of emergency management. If we ultimately want to
reduce costs in the future for disasters we have to do more
mitigation. I believe that mitigation is a community effort. It
cannot just be upon the Federal Government to supply funding to
our State, local, and tribal partners. We have to all take
action as the whole community.
From my own experience as a former Director of Alabama
Emergency Management Agency, I was director of a State that
continuously seemed to be hit with disasters, and we had
several disaster declaration. For us, mitigation funding came
in the form of post-disaster, 404, 406 funding as we call it in
the field. We had much more post-disaster mitigation funding,
which seems regressive to me, than really we wanted on the pre-
disaster side of the house. We focused mostly on the post-
disaster funding to put that to work, according to the
mitigation plans that we have designed.
If confirmed, I would like to work with the Committee to
evaluate all of the mitigation funding, not just pre-disaster
mitigation funding but how do we possibly budgetize, all of it,
up front, to do more work to reduce disaster costs, rather than
basically have to get hit to be accessing the mitigation
funding that is there.
Senator Hassan. Great. Thank you. We talked a little bit
yesterday, as well, about employee morale at FEMA. In 2016, the
Partnership for Public Service released the results of its
annual Best Places To Work In the Federal Government survey,
and FEMA came in 284th out of 305 Federal agencies. We talked a
little bit about it, but could you just briefly touch on what
your thoughts are about how to improve the morale there,
because, obviously, the employees at FEMA do such critical work
for our country and we want them to have high morale.
Mr. Long. Thank you, Senator. Yes, they do.
First of all, with my own experience within FEMA,
previously working for Region IV and reflecting back on that
experience, I believe that we have to be able to immediately,
upon on boarding and hiring with staff, to make sure that they
fully understand the mission of the agency but where their job
specifically fits in. They also need to be able to see a career
ladder, and I also believe that the agency, over the past 8
years, has done a great job of not only providing a blue sky
day job when they are not responding but also the response job.
I believe that the response piece is very important to making
people feel a part of the overall mission.
If confirmed, my type of leadership is very diplomatic. I
like to get out, be out with the staff that is there, to
understand how we can open up lines of communication from all
parts of the agency to make sure that, if confirmed, my team
would be able to understand how to improve the agency from all
parts of it.
Senator Hassan. OK. Thank you very much. And Professor Rao,
again, I enjoyed our conversation yesterday very much and I
appreciated you taking the time to meet with me, and I
appreciated very much your answers to Senator Heitkamp's line
of questioning, and particularly your affirmation of Executive
Order 12866 as good precedent for OIRA.
I want to turn, in the little bit of time I have left, to
something we talked about yesterday, which was, we spoke about
the importance of allowing agencies to be agile and more
quickly if the needs arise, and that is one of the great
challenges as we talk about regulation, and when we look at
bills that, in some ways, perhaps could increase transparency
but could also slow things down. An example I think of is in
terms of the ongoing opioid epidemic. We need to be sure the
public health and safety rules can keep up, for instance, with
the entry of new synthetic drugs into the illicit marketplace,
and ensure that old rules are not holding us back when it comes
to responding effectively to other public health challenges.
If confirmed as OIRA Administrator, how will you ensure
that agencies are able to move quickly to change or implement
needed rules as the need arises?
Ms. Rao. Thank you, Senator. Yes, I think one of the ways
that OIRA can do that is to provide its review process in an
expeditious manner, so when agencies bring their rules to OIRA
to make sure that we are moving through them quickly and
appropriately, based on the need for the regulation.
Senator Hassan. Thank you very much, and again, thank you
all for being here today.
Chairman Johnson. Senator Peters.
OPENING STATEMENT OF SENATOR PETERS
Senator Peters. Thank you, Mr. Chairman, and Ranking Member
McCaskill for bringing the meeting together, and to each of
you, it is good to have an opportunity to ask you some
questions, and I am happy to say that if you are confirmed by
the Senate I look forward to working with all three of you on
some very important issues that you will be confronted with.
But I serve as the Ranking Member on the Subcommittee on
Federal Spending Oversight and Emergency Management, so, Mr.
Long, I am going to start with you for my first question,
because we will probably be interacting more than with the
other two. I am sure you are well aware of the ongoing crisis
that we are experiencing in my State, in Flint, a water crisis
of really unimaginable proportions, as a result of some very
bad decisions made by the State of Michigan that led to lead
contamination throughout the city, and which children are going
to be suffering from for the rest of their lives.
While I was pleased that Michigan received an emergency
declaration, I was very disappointed that they did not receive
a major disaster declaration from the President, because the
disaster was ``not a result of a natural catastrophe nor caused
by fire, flood, or explosion.'' But certainly by any other
definition, this was major disaster, looking into the eyes of a
child who is suffering from lead poisoning and will be dealing
with that their whole life. That child does not care whether or
not it was man-made or natural. It is a disaster. The parents
and grandparents of those children do not care what caused it.
It is still a disaster.
I know you note in your written statement FEMA is charged
with helping communities recover in times of their greatest
need and major disaster declaration could have been critical in
certainly getting more timely help for the people of Flint.
I was just curious, what is your view on allowing the
President to issue a major disaster declaration for man-made
disasters not caused by fire, flood, or explosion? I bring this
up because we have actually proposed some legislation that I
have co-sponsored in the past, dealing with lead in drinking
water, and that is an extraordinary situation and we may find
other communities across the country that are going to be faced
with this type of crisis as well, going forward, which will
have unimaginable impacts, just as it has had in Flint.
I know you are concerned about opening up the floodgates to
all sorts of assistance, which is always an issue that we have
to be concerned about, but I think if we set some strong
parameters and perhaps craft it in a way to help folks like
future Flints, or in cities like Flint, we may be able to make
sure that the American people stand behind other Americans who
are suffering their greatest need.
So what are your thoughts?
Mr. Long. Senator, thank you for your question. I have a
lot of thoughts about this. First of all, I believe that the
Stafford Act is a very general document that was designed to be
very scalable, zoomable to help communities overcome many
different types of disasters. Regarding this specific situation
with Flint, I was not privy, obviously, to why the decisions
were made for just an EM declaration, or why the Department of
Health and Human Services (HHS) was put in charge as a public
health emergency. Regarding that, I would be happy to sit down
with you, if confirmed, to be able to understand your concerns
more deeply, but also to work with the staff within FEMA to
understand the decisions that were made, ultimately, that you
have received, the EM declaration.
Personally, I have been through several non-Stafford
Disaster Acts events, one of those being Deepwater Horizon, one
of those being an H1N1 public health emergency event, and I
have grown to realize that at the local and State level, that
emergency managers and first responders cannot afford to sit
one out, just because we delineate whether it is Stafford Act
or non-disaster Stafford Act.
So, if confirmed, I do have direct experience with similar
events that were not caused by nature, and I would be happy to
evaluate the situation and meet with you.
Senator Peters. Well, I appreciate that. It sounds as if
you do have concerns with the way the Act may be written now,
to respond to some extreme emergencies.
Mr. Long. Senator, yes. I would be willing to sit down with
you to understand your concerns.
Senator Peters. Right. I appreciate that, Mr. Long.
Mr. Long. Yes.
Senator Peters. Mr. Vought, I will concur with some of my
colleagues who are very concerned about your comments in terms
of responding to requests, Senator McCaskill's questioning,
that if we really are doing our job, as oversight, and my job
as Ranking Member of the Federal Spending Oversight
Subcommittee is to make sure the taxpayer money is being spent
properly, that the appropriations made by Congress are done in
a way that makes sense, and in order to do that we need
information. So I am extremely troubled by comments that if you
are in the minority party that questions related to specific
documents that I may need in order to do my job, and my
colleagues need to do our jobs, in Federal spending oversight
or technical comments, briefings, for some reason would not be
made available to us.
I represent the entire State of Michigan. My colleagues
represent the whole country. The people of this country expect
us, and rightly so, to work in a non-partisan way when it comes
to overseeing the Federal Government, asking the tough
questions, making sure that money is being spent appropriately.
I am extremely troubled that you believe if a minority
member asks those kinds of questions you are not under any
obligation to give that information. Is that accurate?
Mr. Vought. I do not think it is accurate, Senator. I
believe strongly in the oversight process. I believe strongly
in working on a bipartisan basis and transparently to reform
programs and find waste, fraud, and abuse where we find them,
and to participate in as many of these processes that the
Congress sees fit to initiate. What I was merely responding to
was the question about OLC's memorandum as it pertains to
certain forms of oversight requests, in which I would seek
legal counsel within our agency about how to respond to those.
Senator Peters. I hope, if confirmed, that you fully
appreciate the need for us to work in a cooperative way. The
only way we are going to do this job appropriately for the
American people is if we work in that manner. I am also
concerned about a statement made by Director Mulvaney, recently
suggesting that one of the agencies that we have always looked
at in Congress as being a non-partisan policy analysis shop is
the Congressional Budget Office (CBO), and I believe that
Director Mulvaney suggested that ``the day of the CBO has come
and gone,'' and that he may not be looking to analysis done by
In your role as deputy director, would you consider the CBO
scores as an integral part of the OMB's toolkit in making
policy decisions? What is your view of CBO?
Mr. Vought. CBO is a very important institution within the
legislative process. OMB works very closely with CBO. It relies
on its information. I think the director's comments go to when
there are very big legislative packages in which the CBO's non-
partisan analysis ends up causing political ramifications based
on some of its conclusions that, in this case, we disagree with
as an Administration. But that is not in any way to suggest
that CBO does not have a valuable role in the legislative
process. As a congressional staffer I relied on it heavily to
assess a bill's cost and the impact of what the bill would do
if it was enacted.
Senator Peters. If I hear your comments correctly, the CBO
is a valuable, non-partisan policy analysis organization,
unless you disagree with their conclusions and therefore it is
Mr. Vought. No, sir. I do not think that is what I said. I
think that CBO, like any other organization and institution,
needs to be able to defend its methodology and its analysis,
and what this Administration has been engaged in is a
conversation with the American people about what CBO's
conclusions are with regard to the American Health Care
Association (AHCA). This Administration feels that those
conclusions are wrong, and have put forward its analysis for
why that is the case with regard to various coverage numbers
and some of the other impacts that CBO has said the AHCA would
have on our health care system.
Senator Peters. If confirmed, I hope that you treat facts
as facts and not being merely inconvenient and not supporting
your opinions. Thank you.
Mr. Vought. Yes, sir.
Chairman Johnson. Senator Hoeven.
OPENING STATEMENT OF SENATOR HOEVEN
Senator Hoeven. Thanks, Mr. Chairman. Mr. Long, I want to
commend you on your service in Alabama, and your work on behalf
of the people there. I look forward to working with you at
FEMA, and it is great that your family is here. They look
In North Dakota we have a number of flood projects. We
flood up there pretty regularly, although this year it is
looking like drought, unfortunately. And in the Fargo-Moorhead
area, which is North Dakota/Minnesota, Red River to the north,
we have Roy Wright up there who directs the FEMA insurance
operations and he is very good. We really coordinated the flood
mapping and the FEMA insurance with building the flood project.
Mr. Long. Right.
Senator Hoeven. In Minot, where we had a flood in 2011, and
4,000 homes were flooded, so that is a lot more people--we are
building flood protection in phases. We need you all to work
with us on the remapping, so that people do not really get
hammered with increasing FEMA premiums. I am asking for your
commitment to work with us. I understand you have a job to do
and you have to do it by law and regulation, but we need a
problem-solver. We need your help now to do kind of the same
thing that we have done in the Red River valley, in the Souris
River valley, to help those people. OK? I am asking for your
commitment to do that.
Mr. Long. Yes. I can commit to working with you to
Senator Hoeven. Good. Then you are going to get off easy.
Ms. Rao, We are now doing P3 projects--public-private
partnerships. The President wanted to do P3 projects. We have
been working on this for a while. We have passed into law P3
projects. Again, for the Red River valley, this is a $2.2
billion flood protection project that affects both North Dakota
and Minnesota. It is underway. The Federal share was originally
$900 million but now it is $450 million. How does that sound?
Does that sound good? In other words, the cost to the Federal
Government now has been cut in half. Does that sound like a
good thing or not?
Ms. Rao. I think that sounds like a good thing.
Senator Hoeven. Particularly when the Corps has a huge
backlog in projects. Right? If we could cut that backlog in
half like that would be a good thing, would it not?
Ms. Rao. Yes, it would.
Senator Hoeven. We need some help to do that. Right now
that $2.2 billion project is $450 million to the Federal
Government, and the State and local financing is in place,
because it is a public-private partnership. But, OMB still
scores projects. When they come up from the Corps, even
projects the Corps really wants to do, like this one, they
still use the benefit-cost ratio without taking into effect, or
account the P3 benefit.
When they score our project, they are scoring it as if the
Federal Government has to come up with $900 million, when they
only have to come up with $450 million. Do you think that makes
Ms. Rao. Senator, that is an interesting issue. I am not
familiar with that particular form of scoring but it is
something that I would be happy to look into if I am confirmed.
Senator Hoeven. Good, because both the OMB Director and the
White House have committed to me that they will do it, and the
Corps, in fact, is working on it, and I want your support for
Ms. Rao. Yes. I am happy to work with OMB.
Senator Hoeven. Again, I commend you on your outstanding
experience and look forward to working with you, and thank you
for coming by to visit with me. I appreciate it very much.
Ms. Rao. Thank you.
Senator Hoeven. Mr. Vought, thanks for being here. I
appreciate it. I just want to ask you about the Consumer
Financial Protection Board (CFPB). I have serious concerns
about the CFPB. I am on Appropriations, and we do not have
jurisdiction over their appropriations. That makes no sense to
me. I cannot fathom why we would not have authority when it
comes to appropriating over the CFPB.
Can you give me your thoughts on that?
Mr. Long. Thank you, Senator. I agree with you. I think
that the CFPB is something that should be subject to the
appropriations process. I think one of the reasons why it has
the perception of being unaccountable is that it is not
accountable to the annual appropriations process. That is one
of the reasons why the President's budget calls for that
specific reform, and I think it is a very important issue that
Senator Hoeven. I want to thank all three of you for being
here and I look forward very much to working with you. Thank
Chairman Johnson. Senator Daines.
OPENING STATEMENT OF SENATOR DAINES
Senator Daines. Thank you, Mr. Chairman, Ranking Member
McCaskill. Thank you to each nominee for your testimony.
Overseeing the budget, management, regulation, and information
policy, OMB is a cornerstone of the Trump Administration's
``drain the swamp'' initiatives. I hope you are all investing
in very large pumps. There is a lot of swamp that needs to be
drained, whether it is the government reorganization, or
rolling back these Obama-era regulations that are truly
inhibiting economic growth. It is a boot on the neck of small
businesses across this country.
No less important, the FEMA Administrator will be
responsible for assisting those in times of crisis and serve to
get our communities back on their feet when a disaster strikes.
We saw that happen, in fact, in Southeast Montana last summer,
June 2016, when a tornado came through Fallon County. We are
not known for our tornados in Montana, like Oklahoma might be,
but it was devastating to our community and we were grateful
for the support of FEMA.
It is my hope that each of you will receive speedy
I want to start and talk about the budget process reform. I
spent 28 years in the private sector before coming to
Washington. In fact, the last election I won prior to winning
the congressional election in 2012, was as student body
president of my high school. I am the only MSU Bobcat in
Congress. I am also the only chemical engineer. I spent 28
years managing businesses held accountable for producing a
budget each year, and then ensuring that we did not spend more
than we were taking in. In fact, in the private sector, you
have to take in more than you spend because that is called
profit, but we are a long ways from that here in Washington,
There is a growing sentiment in Congress that the
congressional budget process is broken, from start to finish. I
think using the word ``broken'' is a kind word. According to
January 2017 CBO report, by this September 30th, well over half
of our discretionary spending, $648 billion, will be
appropriated to unauthorized programs. Congress has not passed
all 12 appropriation bills since 1996. For those of you playing
at home, that is 21 years. In addition, the process leads to
brinkmanship, with do-or-die passage of an annual, if we are
lucky, omnibus bill, that does not allow for targeted
Thirteen of my 28 years I spent in the private sector was
with a company called Procter & Gamble. In fact, I was part of
the shampoo operations for a number of years. On the back of a
bottle of shampoo, it oftentimes will say, ``Lather, rinse,
repeat.'' It sure feels a lot that way here in Washington, D.C.
I will put a lot of money on the table that we back to a CR
kind of discussion here, coming soon, as we approach the end of
our fiscal year, and we go through this repeated cycle of
insanity in this country, and the people of our great country
deserve much better.
Mr. Vought, you have seen the shortcomings of our budget
processes first-hand in Congress. Do you agree that
congressional budget process is in need of an overhaul?
Mr. Vought. Yes, Senator, I do.
Senator Daines. Where will budget process reform fall in
your priorities at OMB, and can we count on OMB to actively
participate in these reform efforts?
Mr. Vought. You can, Senator. It is a very important issue
for OMB to think through. Typically, the OMB Analytical
Perspectives has an entire chapter about budget process reforms
that it intends to propose. This year our budget process reform
chapter was smaller because the Administration was so new and
the priority was Senator Rounds getting the budget done. But
next year, if the Senate confirms me, I really do want to have
a much broader conversation, internally and with this
Committee, about ways that we can reform the budget process,
ways that we can remove brinksmanship from the budget process,
ways that we can get at unauthorized spending, which is
actually banned in the House but they waived the rule almost on
every appropriations bill. It is a major problem and we need to
have new and creative ways to address it.
Senator Daines. I was struck by D.C.'s continuing
ineptitude, and this institution's failure, just this last
budgeting cycle--I am on the Appropriations Committee--we were
7 months into this current fiscal year before an omnibus was
passed. I just cannot imagine. In my days of working for a
Fortune 20 company and then I worked in a family construction
business, then I was part of cloud computing startup. We took
the company public and grew a lot of jobs. But I cannot
imagine. Imagine the Chief Financial Officer (CFO) showing up
at the board meeting and saying, ``Well, first, we do not have
a budget,'' and we are 7 months into the fiscal year before you
even basically authorize the funds.
It is ludicrous. This broken process has produced $20
trillion of debt and the projections are, frankly, ominous as
we go forward now, in terms of the fiscal condition of this
country, because of the inability of this institution to let
alone balance a budget, but to even pass one in a timely
I want to shift gears and talk about the debt ceiling
reforms. Recently, Treasury Secretary Mnuchin indicated that
Congress may need to lift the debt ceiling by the end of July.
I am a strong believer we need to continue to consider budget
reforms with any debt ceiling increase to get to the crux of
the issue, and that the next Administration will play an
important role in making that happen.
Mr. Vought, do you believe we should pursue budget reforms
in the context of lifting the debt ceiling?
Mr. Vought. Senator, thank you for that question. I do
believe that that also tracks with history in terms of many of
the times that we have raised the debt limit, we have included
budget process reforms, other spending reductions over time. My
old boss authored Gramm-Rudman-Hollins. That was attached to a
debt limit increase.
We certainly do not want brinksmanship in the legislative
process, but in terms of using the debt limit increase as an
opportunity to take account of where we are, fiscally, as a
country, when we are $20 trillion in debt and we are being
asked to, once again, raise the debt limit, the debt limit
needs to be raised but it does not seem smart, at the same
time, to then not take account and try to fix the problem.
Senator Daines. Yes, and I am going to squeeze in a quick
question to Ms. Rao. You are going to spearhead the
Administration's deregulatory efforts, rolling back some of
these Obama-era regs. We have got a gross domestic product
(GDP) growth of under 1.5 percent during the tenure of the last
Specific question--would you support legislative efforts to
streamline the retractions of regulations?
Ms. Rao. Well, Senator, that is an interesting proposal and
it is one I would be interested to consider working with you
Senator Daines. All right. Thank you. I am out of time.
Chairman Johnson. Senator Carper.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. I just want to take a minute. I was not
going to mention this. I just want to go back in time, if we
could. Harry Truman used to say the only thing that is new in
the world is the history we forgot or never learned.
Let us just back up a little bit. We actually had balanced
budgets about 16 or 17 years ago. In fact, we had four of them.
We had not balanced budgets since 1968. We had four balanced
budgets in a row, and one of the ways we did it, we matched--I
am a recovering Governor, OK? I governed in Delaware from 1993
to 2001. We had 8 years of balanced budgets. We cut taxes 7 out
of the 8 years. We paid down some of our debt. We got a triple-
A credit rating. I know a little bit about balancing budgets. I
was State treasurer for 6 years before that.
The last 4 years of the Clinton Administration, what did we
do? We balanced the budget. We matched revenues and we matched
expenditures. We grew the economy. More jobs created in those 8
years than any 8 years in the history of this country. We did
exciting things on environmental reforms. And we did a number
of things in terms of regulatory reforms that some of us may
not have liked, but we sure grew the heck out of the budget.
The guy who helped drive the budget deal, during those
years was Erskine Bowles. President Clinton asked him to do the
deal, and to negotiate with the Republicans, and he did. One of
the key Republicans was the Chairman of the House Budget
Committee, a guy named John Kasich. He was a personal friend of
mine. I was elected, came to the Congress with him, served with
him for many years. He is still my friend.
What happened there, you had Democrats and Republicans
working together who are determined to balance the budget, and
they succeeded, because of bipartisan support.
This Administration, I will tell you, and I know that some
others have been asking questions about responsiveness, this is
the worst responsiveness I have ever seen. If we had a
Democratic Administration and Republicans were trying to get
information through oversight over this Democratic
Administration, and got the kinds of responses that we have
been getting, non-responses, you guys would shut the place
down. We probably ought to do that as well.
And so talking about draining the swamp, give me a break.
They are creating the swamp. These folks are creating the
swamp, and that is not a dispersion on the people that are
before us today. But I just cannot sit here and listen to what
I have just heard and say nothing in response.
Barack Obama--everybody makes mistakes. What did Richard
Nixon used to say? The only people that do not make mistakes
are people who do not do anything, and the last President,
whether you like him or not, he did a lot. One of the things
that I am proudest of, that they did, you can look at 8 years,
almost without a scintilla of scandal. He is a very moral
person, tried to make sure that the people around him
understood that and behaved accordingly.
One of the big mistakes that he made, he did not embrace
Bowles-Simpson. If he had embraced Bowles-Simpson, I think the
rest of us would have fallen in line, and finally, when it got
to the point of actually negotiating on a Bowles-Simpson with
John Boehner, Speaker of the House, and they negotiated
basically a Bowles-Simpson deal--restraint on spending,
entitlement reform, and revenues. Those are the three corners
of the agreement. The Speaker took the deal back to the House--
you were probably there--and could not sell it. He came back,
tried to renegotiate it, and could not sell it. I give John
Boehner credit. I give President Obama credit. But if we had
somehow been able to do that deal, we would not be having to
negotiate this situation now with $20 trillion in debt.
I just want to say again, and I do not know who to direct
this to--Mr. Vought, maybe to you--if this kind of lack of
responsiveness continues, I hesitate to think what we are going
to do in response. It is just unacceptable. I am a big believer
in the Golden Rule--treat other people the way we want to be
treated. But if we had a Democratic House, a Democratic Senate,
and we had a Democratic President, and the Republicans were
trying to do oversight from the House and the Senate to
oversight on a Democratic Administration, and you got no
responses, the Republican Congress got no responses to their
inquiries, or lack of responses, pitiful responses, you guys
would go nuts, and you should. Maybe we should as well.
I guess it is a message that I would share with you. I do
not mean to take out anything on you, but my friend from
Montana has got me excited this morning, more excited than I
Senator Daines. Would the gentleman yield?
Senator Carper. I am happy to yield.
Senator Daines. I am grateful for Governors who serve in
the U.S. Senate, on both sides.
Senator Carper. And I am grateful for business leaders who
Senator Daines. Well, I will say, I think the----
Senator McCaskill. How about auditors? [Laughter.]
Chairman Johnson. Not so much about auditors.
Senator Daines. I would just say I think our path forward
here, and the swamp here has been created over years and years
and years, and you cannot, I think, point to any one
Administration. We are at where we are at. But Governors that
come to the Senate I think bring a very pragmatic approach, and
I think our solution forward is going to be to get our
Democratic and Republican former Governors in the Senate to
work on some of these budget reforms, because you have had to
produce a balanced budget, truly. And I appreciate the comments
from the gentleman.
Chairman Johnson. First of all, I want to stop the clock so
we do not take any from Senator Carper's time, but I need to
respond, because the truth is we have done about 80 percent of
Simpson-Bowles, and it barely made a dent.
Senator Carper. No. With due respect we have not done the
entire reform. We have not done that----
Chairman Johnson. But not----
Senator Carper [continuing]. Through revenue increases.
Chairman Johnson. We have done about 80 percent.
Senator Carper. I just do not agree.
Chairman Johnson. I will give you the figures. About $700
billion in tax increased the fiscal cliff. I think Simpson-
Bowles wanted $900 billion. Then we got $2.1 billion with the
Budget Control Act. I think Simpson-Bowles was calling about
$1.9 trillion for discretionary. We did not do the quarter of a
trillion dollars on entitlement reforms. That was about the
only thing we left off the table there, and again, it has not
even made it down. I just wanted to challenge that. Simpson-
Bowles barely made a dent. We have done 80 percent of it. Now
we do need to do entitlement reform, but Simpson-Bowles barely
did anything. That was about a quarter of a trillion dollars.
Senator Carper. I want to reclaim my time.
Chairman Johnson. We have kind of done it. We did not call
it Simpson-Bowles but Budget Control Act, the fiscal cliff, we
got the revenue, we got the discretionary spending. We actually
Senator Carper. Let me reclaim my time.
Chairman Johnson. OK.
Senator Carper. Those 4 years when we had balanced budgets,
spending as a percentage of GDP was about 22 percent. Those 4
years that we had balanced budgets, revenues as a percent of
GDP was about 22 percent, maybe 20 percent, and today revenue
as a percent of GDP is 17 or 18 percent, spending is about 22.
And that is part of the problem.
In any event, somewhere down the line we will have a
President and a Congress that want to work together, leaders of
the Congress and the Administration will want to work together,
and I hope that is sooner rather than later.
I will say this. One of the things that we, as our to-do
list around here, is the GAO High Risk List. I do not know how
familiar you are with it, Mr. Vought. Are you?
Mr. Vought. I am familiar with it, Senator. I have read
previous reports. I have not taken a look at the latest report,
but, unfortunately, one of the problems with the GAO High Risk
Senator Carper. I was just asking if you were familiar with
it. OK? Hold your fire.
They give us all these ways, ideas of saving money, and
some of them are defense spending, some of them are non-defense
spending. But I will say, I spent 23 years in the Navy, retired
Navy captain. I loved the military. I loved the Navy. But we
spend more money on defense than the next six, seven, or eight
nations combined, and the Administration's President is asking
for an enormous increase, over $50 billion more for defense
Meanwhile, you have one of the GAO recommendations, on the
High Risk List you have $400 billion cost overruns in major
weapons systems. Department of Defense (DOD), after all these
years, after, what, 70 years being around, they still have not
gotten a clean bill of health on their audit--70 years. The
Department of Homeland Security, they did it in like 6 or 7
years and they are still at it. Three of them now. Is not that
right, about three of them? And Defense--what you cannot
measure you cannot manage. We need to do some work there and I
hope that this Administration will say, rather than just giving
the Department of Defense another $55 or $60 billion, maybe we
should go to that GAO High Risk List and see how we can save
some money while we do this kind of thing.
But I wanted to mention the High Risk List. I think there
is a lot of interest here on this side, Democrat and
Republican, to work that list, and save a ton of money.
I will ask you this question--one of the recommendations
they made is--from GAO--and, Mr. Chairman, just cut me off when
you are ready. But I would like to mention this because we have
discussed this before. We had John Koskinen in before the
Finance Committee. We had him there several times. They tried
to impeach him in the House, and as Commissioner of the
Internal Revenue Service (IRS) I think he is one of the most
decent people I have met in government. He is honorable, smart,
business person. He spent a career just basically taking
businesses that were wrecked and making something of them, and
I think he is doing a workman-like job into the IRS, and a
But one of the recommendations of GAO, is we could actually
raise some revenues if we would give IRS the tools that they
need, the people, the budget, and the technology that they
need, and for every dollar that we would spend in that we would
get back $5, $6 or $7, and we would provide a lot better
customer service for the people that we are serving. People
call our offices all the time and say, ``I cannot get anybody
in IRS to help me.'' Your thoughts on that?
Mr. Vought. I think in the grand scheme of the budget, the
IRS was basically protected in terms of the amount of
reductions that it was asked to live under for fiscal year
2018. About 95 percent of all filers are now doing it online,
and this budget increases operation support by 6 percent. Now,
obviously, there are reductions elsewhere, but we felt that
trying to modernize and continue to make efficiencies to move
people toward filing their taxes online can help. We certainly
agree that the IRS is crucial in being able to collect the
necessary amount of revenue that people owe in paying their
taxes, and it is one of the reasons we were very careful, as we
were with the rest of the budget, to allocate reductions where
they made the most sense.
Senator Carper. All right. Thanks so much. Let me say, in
closing, Mr. Long, very nice meeting you this morning, and was
that your daughter I met?
Mr. Long. No. My wife.
Senator Carper. Oh, I am sorry.
Mr. Long. She would appreciate that comment though, right?
Senator Carper. And I met your two sons. They are handsome
guys. He went to Appalachian State University. My father-in-law
taught there for 40 years. My wife grew up there, on the
campus, so it is kind of a home game. Good luck. We are anxious
to get to work with you.
Ms. Rao, I do not know you well. I appreciate the time that
we spent together and if you get confirmed I look forward to
having a chance to work with you down the line.
Mr. Vought, thank you so much. Thank you for your kind note
as well. Thank you.
Mr. Vought. Thank you.
Ms. Rao. Thank you.
Chairman Johnson. Thank you, Senator Carper, and I hope you
do not think I cut you off. I was just responding. I stopped
the clock and gave you extra time. By the way, what I would
love to do, and we will do this, I want to hold a hearing, and
we will go through the budgetary history of what all has
happened, where spending was as a percentage of GDP, where
revenue was, why we were able to balance the budget for a brief
moment in time, what has happened since that time. We will lay
out the facts, lay out the reality. I am happy to do it. I
think it is going to be crucial.
I know Senator McCaskill has some more questions so I will
turn it over to Senator McCaskill.
Senator McCaskill. Yes. Before I get to my FEMA question, I
was struck, Mr. Vought, on your comment a minute ago where you
said ``we are being asked to raise the debt limit.'' Who is
asking you to raise the debt limit?
Mr. Vought. Senator, I know the Administration has asked
Congress to raise the debt limit.
Senator McCaskill. So you are asking us to raise the debt
Mr. Vought. Correct. The debt limit----
Senator McCaskill. When you say ``we are being asked,'' it
is you. You, Mr. Vought, are asking us to raise the debt limit.
Mr. Vought. The debt limit does need to be raised, Senator.
Senator McCaskill. OK.
Mr. Vought. I think there is----
Senator McCaskill. I think there seems to be a little bit
of disconnect around here, in that, for years the debt limit
was something that nobody wanted to raise, and it was being
used as a political two-by-four, even though everybody
understands. Now that you guys are in charge, it is painful,
but you have to face the reality that this is an inappropriate
political two-by-four. The debt limit has to be raised. The
President of the United States is asking us to raise the debt
limit. The Republican leadership is asking us to raise the debt
limit. I want to make sure that is on the record clearly, and
if anybody has somebody else who asking them to raise the debt
limit, they need to let us know, because the only people I know
that are asking to raise the debt limit, at this point, is your
Administration and the Republican leadership in Congress.
Are you aware of anybody else who is asking to raise the
Mr. Vought. No, Senator.
Senator McCaskill. OK. Mr. Long, on Friday, President Trump
issued a major disaster declaration for 48 of Missouri's 114
counties--so that gives you some idea of the massive amount of
flooding that we had, and the real problem that we are facing
in Missouri, that is way beyond the capability of State and
local governments. What we had, we had a number of bridges
completely wiped out. We had roads washed out. We had homes
completely washed away.
By the way, let me give you these statistics. 2016 was a
major year for flooding. Nationwide flood losses last year were
six times greater than 2015, and the number of Presidential
disaster declarations has tripled over the past decade,
compared to 20 years prior. So your business is going to be
going up, not down.
Given that statistic, and given that reality, are you
concerned about the $600 million in budget cuts that have been
proposed for FEMA in 2018?
Mr. Long. Ranking Member McCaskill, thank you for the
question. First, I fully support the President's budget, but,
if confirmed, I do realize that as FEMA Administrator I have to
make sure that the agency can meet the demands, particularly
when it comes to saving lives and sustaining life after each
disaster. I have to be able to work with my staff, once
confirmed, to go in and evaluate where we are, measure out the
increasing demands placed upon the agency, and if I do perceive
a problem I look forward to diplomatically working with this
Committee to address those issues.
Senator McCaskill. I think you are going to get a lot of
support on a bipartisan basis for the FEMA budget, because all
of our States, I will never forget. Whether it was Hurricane
Katrina or whether it was Hurricane Sandy or whether it was
flooding, there are actual examples of people who voted against
funding for those disasters until their State had a disaster,
and then all of a sudden it was like, ``OK, we need more
Federal money.'' I am hopeful that we can work on that budget
because I do not think it is realistic, in light of the uptick
that we see in the data.
Mr. Vought, I hope that--and I do not mean to be--I know I
am coming on very strongly with you this morning but I am
frustrated, as you can probably tell. I am particularly upset
about a lawyer in the Justice Department telling the entire
Executive Branch I have no authority to do oversight. I think
it is outrageous, and so I am also ginned up about the fact
that we have two important people in the government saying
exact opposite things about the budget.
Director Mulvaney emphatically asserted that ``the budget
assumes a deficit-neutral tax plan that does not rely on
economic growth to achieve that deficit neutrality.'' Secretary
Mnuchin said, in a Finance Committee hearing, ``We are not far
along in tax reform to have modeled the impact. Again, just to
be clear, when the budget came out we overlaid the
Administration's plan for growth, which were incorporated, and
that is what is shown here. We do not have tax changes so we
did not model tax changes.''
We now have, on the same day, at two separate hearings, the
Secretary of Treasury stating, unequivocally, that the tax cuts
in the budget were not offset by tax policy changes, but
instead by economic growth, and on the same day the Director of
OMB saying we went through a list of exclusions that are
reduced--loopholes that are closed and deductions that are
removed, and calculated that those would offset the tax cuts in
the proposed budget.
So, under oath, I have the Secretary of the Treasury saying
that this is just economic growth and I have the head of OMB
saying that it is the tax policy changes that are, in fact,
neutralizing the revenue losses. What is going on here? Are
they not talking to each other, because clearly they are saying
180-degree, polar opposite in hearings about the same budget.
Mr. Vought. Thank you, Senator. I do not think that is the
case. We have been very clear, as an Administration, that this
budget does not double-count the revenue increase from economic
growth twice. You can either use it once, for deficit
reduction, or you can use it to pay for the tax cut. This
budget uses the revenue from economic growth and contributes it
toward deficit reduction.
The tax cut is assumed to be deficit-neutral, and what we did
in the assumption that we made, with regard to the tax
proposal, was to take the guidelines that were put forward by
Secretary Mnuchin and Director Cohn which included, in those
guidelines, or paying for the tax increase, or the tax
decreases with getting rid of special deductions and credits
and loopholes, broadening the base. That is what is meant to
pay for the tax cut.
Senator McCaskill. So, the Secretary of the Treasury is
wrong. This is not revenue growth that will pay for the tax
cut. It is revenue growth that will, in fact, reduce the
deficit. So what I need from you, Mr. Vought, is where is the
money coming from in the reduction of loopholes that is paying
for the tax cut? What are they?
Mr. Vought. Again, that is where we get to the fact that
the tax proposal has not been developed yet.
Senator McCaskill. Wait. You are saying it is going to pay
for itself but you have no idea how it is going to pay for
Mr. Vought. The tax proposal has--which is based on a
number of guidelines that were put forward by Secretary Mnuchin
and Director Cohn----
Senator McCaskill. Give me one example. Give me one example
of how you are going to pay for this tax cut with closing
Mr. Vought. Again, I would go back to the guidelines in
which they said----
Senator McCaskill. Well, give me an example. You have to
know it. You drew up the budget. What are they?
Mr. Vought. Again, the policy development process is not at
that point where we are ready to say specifically which
deductions and credits are proposed for elimination. It is part
Senator McCaskill. OK. So you do not have any idea how you
are going to pay for the tax cuts then.
Mr. Vought. Again----
Senator McCaskill. You are going to pay for it within the
tax cut bill by closing loopholes, but you cannot give me one
example of a loophole that you put in the budget is having
made--and that is what makes it balance? You are willing to
stand by that, that you are going to tell the American people
you are balancing the budget and you cannot give me one example
of how you are paying for the tax code?
Mr. Vought. Senator, the budget is a set of assumptions.
The assumption that we had when we wrote the budget was based
on the policy development process that was where it was at that
point, which was a set of guidelines and specifics as it was
reflected in those guidelines. The rate reductions are
obviously something that the President wants----
Senator McCaskill. Well, those are specific.
Mr. Vought. Correct.
Senator McCaskill. The only thing that is not specific is
how you pay for it, and you are telling me now you do not have
Mr. Vought. I do not have any further specifics on the tax
plan. No, Senator.
Senator McCaskill. You do not even have an idea about what
one might be, what category it might be?
Mr. Vought. Not at this point, Senator.
Senator McCaskill. Yes. How can you expect us to take this
document seriously? It sounds like a novel.
Mr. Vought. It is a set of policy assumptions based on what
we know currently. Obviously----
Senator McCaskill. You cannot say something balances on
policy proposals when you are not even willing to say out loud
what the policy is. How can you have the straight face to say
to the American people, ``We balanced the budget,'' when you
cannot even step up to the microphone and give me some idea of
how that happens.
Mr. Vought. Senator, the policy development process is
underway and I understand your desire to have clarity on that
point, and we hope that it materializes soon.
Senator McCaskill. OK. Thank you, Mr. Chairman.
Chairman Johnson. Thank you, Senator McCaskill. I would
ask, or give you a sheet here, and ask consent to enter this
into the record.\1\ I did a little spreadsheet on what I was
talking to Senator Carper about, and we will give his staff a
similar chart showing that, in fact, we have done about 81
percent of Simpson-Bowles. I was pretty close to the $700
billion in the revenue from the fiscal cliff, $2.1 trillion of
discretionary savings. Simpson-Bowles had less than that but
they also had about $795 billion of savings in terms of health
care savings, mandatory savings, and some Social Security
reforms. Total difference, $3.4 trillion of savings under
Simpson-Bowles. We have done about $2.8. The rest is savings on
\1\ The chart referenced by Senator Johnson appears in the Appendix
on page 246.
I will enter that into the record, but again, my point
being is we have done 81 percent of Simpson-Bowles and we still
have a massive debt problem and a massive projected deficit.
The nominees have made financial disclosures\1\ and
provided responses to biographical and pre-hearing questions\2\
submitted by the Committee. Without objection, this information
will be made part of the hearing record,\3\ with the exception
of financial data, which are on file and available for public
inspection in the Committee offices.
\1\ The information for Mr. Long appears in the Appendix on page
\2\ The information for Mr. Vought appears in the Appendix on page
\3\ The information for Ms. Rao appears in the Appendix on page
I want to thank the nominees for your willingness to serve.
As you can see, we have enormous challenges, some divisions. We
want to work through those things. I want to really thank the
families. I know, unfortunately, you will see probably less of
your loved ones here, so this is a sacrifice for the entire
family as well. Thank you for your willingness to serve.
With that the hearing record will remain open until noon
tomorrow, June 8th, for the submission of statements and
questions for the record.
This hearing is adjourned.
[Whereupon, at 11:53 a.m., the committee was adjourned.]
A P P E N D I X
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