A House subcommittee held a second hearing April 26 on the regulatory changes President George W. Bush issued in January. Subcommittee Chairman Brad Miller (D-NC) hoped to discover the reasons that the White House issued the changes, but the hearing turned stormy as Miller's inquiries were repeatedly rebuffed by an administration official. After tense exchanges with the official, Miller promised to seek additional documents from the Office of Management and Budget (OMB) and to hold additional hearings on regulatory changes "that affect the lives of millions of Americans."

The Subcommittee on Investigations and Oversight of the House Science and Technology Committee held the first hearing on Executive Order 13422 and OMB's Good Guidance Practices Bulletin in February. This time, the hearing focused on the internal process OMB used in drafting the E.O. and how OMB intends to implement the changes these two documents require. Miller summed up the changes in his opening remarks:

Under this order, not just major regulations, but guidance is subject to review by OIRA. And the order creates a new requirement—"market failure"—for any agency to promulgate any regulation. "Market failure" does not appear in any statute as a consideration in rule-making; in fact, Congress flatly rejected the argument that the market will solve the problem when Congress enacted the legislation granting rule-making authority.

In March, OMB Watch released a report on the potential impacts of these changes. On the same day as the second hearing, OMB released its compliance assistance memorandum to agencies on how they are to implement the E.O. and the guidance bulletin. (See the related article in this issue of the Watcher.)

The hearing had two separate panels. The first panel featured Steven D. Aitken, the deputy general counsel for OMB and former acting administrator of OMB's Office of Information and Regulatory Affairs (OIRA). Aitken was testifying solely in his capacity as acting administrator of OIRA, as he held that position at the time Bush issued the E.O.. Aitken is a civil servant, not a political appointee. It is highly unusual for the Bush administration to allow a civil servant to testify before Congress, particularly now that OIRA has an administrator, but the congressional committee decided that Aitken had the most knowledge about the E.O. and, therefore, would testify.

In seeking clarification of the process that led to the E.O., Miller and Aitken sharply disagreed on the range of issues Aitken could discuss without violating what Aitken called the "deliberative process." The executive branch often withholds information from the public during the development of ideas, which is often called the deliberative process, since the public will see the final outcome. Courts have upheld this reason for withholding information, but the claim is less certain when it comes to Congress requesting information about the development of policy approaches.

Miller wanted to discover how the administration, in its seventh year in office, determined that the regulatory process needed changes and who was responsible for the various requirements in the amendments. Aitken described generally the process for issuing executive orders but refused to disclose internal deliberations or identify who participated in the order's creation.

The hearing quickly turned tense when Aitken refused to provide details. Apparently, Aitken was prepared to testify about the content of the E.O. — requirements for market failure analyses, agency guidance reviews by OIRA, and regulatory policy officers (RPOs) — according to his written testimony. Miller was clearly expecting that information relevant to the decision to issue the E.O. would be provided. According to Miller, that was the reason Aitken was testifying instead of the new OIRA administrator, Susan Dudley, who was not involved in developing the amendments. Dudley was named as one of Bush's recess appointments April 4, before the Senate could complete its planned confirmation hearing.

The second panel consisted of four witnesses who addressed the regulatory changes and their perceived impacts. Robert W. Hahn of the AEI-Brookings Joint Center for Regulatory Studies argued that the Bush amendments are not very substantial but nevertheless represent improvements in accountability, especially by bringing agency guidance documents under OIRA review. He also argued that the changes did not go far enough because independent regulatory agencies, like the Federal Communications Commission and the Federal Energy Regulatory Commission, are not covered by E.O. 13422.

Two experts in administrative law testified that different aspects of the Bush amendments are very problematic. Professor Peter Strauss addressed the constitutionality of giving regulatory policy officers additional responsibility.

Our Constitution very clearly makes the President the overseer and coordinator of all the varied duties the Congress creates for government agencies to perform. Yet our Constitution's text, with equal clarity, anticipates that Congress may and will assign duties to executive officials who are not the President. Respecting those duties, he is not "the decider," but the overseer of decisions by others. When the President fails to honor this admittedly subtle distinction, he fails in his constitutional responsibility to "take Care that the Laws be faithfully executed."… The important point, in my judgment, is to preserve this distinction between presidential oversight — entirely appropriate and constitutionally commanded — and presidential decision. For any agency's unique responsibilities, Congress's delegation makes the precise formulation of its priorities and plans the legal responsibility of the agency head. Honoring and protecting that responsibility is an important element of the President's obligation to assure that the laws are being faithfully executed. And the recent Executive Order amendments reflect a different view, in effect making the President not just the overseer, but the decider of these matters.

Professor Richard W. Parker argued that expanding OIRA review and requiring further cost-benefit analyses takes us down "the wrong path and the wrong direction." According to Parker, what is needed is an accurate evaluation of the costs and benefits of regulations already in place instead of the estimates industry provides prior to regulations taking effect.

OMB Watch executive director Dr. Gary D. Bass testified about the lack of transparency in the regulatory process in light of E.O. 13422. The improvements he proposed focus on 1) the extent to which RPOs, who now will be initiating regulations within agencies, will allow politics to supersede the need for health, safety, environmental and civil rights protections as determined by the scientific and technical experts within agencies, and 2) the extent to which the regulatory changes create mini-OIRA offices in agencies which may result in the RPOs dictating agency rulemaking and further decreasing agency discretion, especially in the pre-rulemaking stage. "In addition to helping to restore trust in government by providing transparency, the ability to evaluate regulatory outcomes is greatly enhanced by having the substantive basis of decisions available to the public," Bass concluded.