On July 20, a panel of experts and advocates told the Senate Homeland Security and Governmental Affairs Committee their views on the many proposals to alter the regulatory process. Disagreements revolved around the economic impacts of public protections and whether legislative action on regulation is necessary.

The hearing was the second in a series called "Federal Regulation: A Review of Legislative Proposals" that took a broad look at regulatory reform legislation. The first hearing was held June 23, at which senators introduced various bills to reform parts of the regulatory process, and Cass Sunstein, the administrator of the Office of Information and Regulatory Affairs (OIRA), told the committee the reforms were unnecessary.

The proposals aired in the first hearing would erect more procedural hurdles in a rulemaking process that is already staggeringly complex. The bills would, among other things, duplicate analyses federal agencies are already legally required to perform and expand the list of analyses to include requirements that government produce even more studies attempting to estimate the potential indirect costs of any new rule. Other proposals call for allowing judicial review of individual parts of the regulatory process and expanding OIRA's reviews of agency rules to include independent regulatory commissions. While cast as procedural reforms, these changes could completely transform the prospects for enforcing current and future standards. This could lead to increased litigation and even greater delays of crucial public protections needed to safeguard the public health and safety of the American people.

At the second hearing, Sen. Sheldon Whitehouse (D-RI) was the lone senator to propose legislation. He introduced two bills (S. 1338 and S. 1339) that focus on the “capture” of agencies by regulated entities (private industry). When this happens, agencies stop making the public interest their prime concern and instead see themselves as serving the interests of regulated industry.

Other witnesses included Sally Katzen, former OIRA administrator during the Clinton administration; Susan Dudley, former OIRA administrator during the George W. Bush administration; David Goldston, Director of Government Affairs at the Natural Resources Defense Council; and Karen Harned, Executive Director of the Small Business Legal Center at the National Federation of Independent Business.

Katzen and Goldston argued there was no need for additional legislation that would cause more delay by requiring duplicative assessments of costs and benefits of rules. They criticized the reform proposals as one-size-fits-all legislative solutions in search of a problem and argued against expanding judicial review of specific parts of the regulatory process, like agencies' cost-benefit analyses. The courts are ill-prepared to deal with these kinds of highly technical tools, they argued, and the result would be more opportunity for delay. Dudley and Harned supported most of the regulatory reform bills that are before the committee as a way of reducing the "burden of regulation" on business and ignored the bills' potential negative effects on public health and safety.

This split in opinions occurred over a range of issues raised during questions from committee members: codifying elements of regulatory executive orders, including so-called indirect costs of regulations in cost-benefit calculations, and including guidance documents (a wide range of materials used by agencies to clarify or further explain regulatory requirements and to help regulated industries to comply with rules).

On the question of whether the centralized power of OIRA should be extended to allow it to review rules generated by independent regulatory commissions (such as the Securities and Exchange Commission and the Consumer Product Safety Commission), only Goldston argued that the agencies should remain independent of such executive branch control.

Sen. Joseph Lieberman (I-CT), chair of the committee, and Susan Collins (R-ME), ranking member, indicated the members would try to craft a bipartisan bill from the many proposals for a potential markup, though the contours and timeline of such a bill remain vague.