- Mr. Jack N. Gerard, President and CEO, American Petroleum Institute
- Mr. Gary Shapiro, President and CEO, Consumer Technology Association
- Mr. Rosario Palmieri, Vice President of Labor, Legal and Regulatory Policy, National Association of Manufacturers
- Mr. Adam J. White, Research Fellow, Hoover Institution
- Professor Lisa Heinzerling, William J. Brennan, Jr., Professor of Law, Georgetown Law Center
Wednesday, February 1, 2017
Full committee hearing
This hearing will take place in the Senate Hart Office Building, Room 216. Witness testimony, opening statements, and a live video of the hearing will be available on www.commerce.senate.gov.
Chairman John Thune
Good morning. Today we are diving into an issue that has dominated much of the recent debate about Washington: the unnecessary and burdensome regulations that stifle growth in America without offsetting benefits to Americans.
“I believe a thriving private sector is the lifeblood of our economy. I think there are outdated regulations that need to be changed. There is red tape that needs to be cut.”
That statement of belief, however, is not my own. Those exact words were spoken by President Obama in his last State of the Union address.
Despite these laudable sentiments, the American Action Forum has reported that, just since Election Day on November 8, 2016, the Obama Administration issued rules with $157 billion, with a “B,” in regulatory costs. And in December alone, the last administration approved 99 new regulations.
My hope is that today’s hearing will examine how we can make the rhetoric of regulatory reform a reality.
Let me start by stating my belief that not all regulations are bad. In fact, there are many rules on the books that are necessary for economic growth and for the life and liberty of the American people. For instance, our federal agencies enforce critical rules to protect the health and safety of our citizens, ensure fairness in the marketplace, and provide important protections for the environment.
But, there are also unbalanced regulations that provide negligible net benefits, raise barriers to entry for startups, restrain would-be job creators, and expose firms and employees to unnecessary burdens – from increased paperwork, to onerous requirements, to avoidable exposure to litigation.
A regulatory overhaul – though clearly necessary – must be thoughtful. We need to avoid a chaotic process, which would result in uncertainty for businesses and the public. We must also be mindful that any action at the federal level could result in a confusing patchwork of regulations as states move to fill in the voids.
We begin this new Congress with a mandate to do our part to provide relief from excess regulation. Together with the new administration and affected stakeholders, including the public, we need to undertake a review of the regulations enforced by agencies under the jurisdiction of this Committee. We will seek to identify what works, what doesn’t, what should be scrapped, and what can be improved upon.
Many of these regulations have been on the books for years. Some, as I’ve noted, were newly-enacted in the final days and hours of the previous administration. And some are not yet finalized.
Accordingly, I applaud President Trump for making this issue a top priority. One of his first official acts as President on January 20th was to issue a memorandum entitled “Regulatory Freeze Pending Review.” This memo, which is consistent with longstanding bipartisan precedent, ensures both the President’s appointees and the Congress will have an opportunity to review new and pending regulations.
And, on Monday, the President issued an executive order entitled “Reducing Regulation and Controlling Regulatory Costs.” This order instructs federal departments and agencies to identify at least two prior regulations for elimination, for each new regulation proposed, with certain exceptions. There will still be much more work for Congress to do, though, since the order does not apply to independent agencies such as the Federal Communications Commission.
Today, we will be hearing directly from stakeholders about specific regulations issued by the federal administrative agencies under the jurisdiction of the Senate Commerce Committee to assess their usefulness, balance, and day-to-day impact on the regulated entities subject to these rules.
Federal rulemaking procedures dictate a so-called “notice and comment” process for agencies to hear from the regulated community and other stakeholders about proposed regulations.
In theory, these requirements constitute procedural safeguards to ensure that the American public has a voice in the process. In practice, however, we know that some agencies choose to provide only perfunctory responses to critical comments, rather than engaging with stakeholders in a meaningful effort to improve noticed regulations.
The same can be said of other regulatory requirements designed to produce thoughtful regulations that provide a net benefit to the American people. For more than thirty years, presidents of both parties have promoted the idea that regulatory benefits should outweigh costs, but agencies are not always rigorous in conducting such analyses.
We have seen agencies attempt to manipulate the process by cherry-picking available evidence or relying on outdated or incomplete data. And, we have sometimes seen regulatory overreach where agencies attempt to promulgate rules outside of their jurisdiction or beyond their particular statutory grant of authority. These practices result not only in unbalanced rules with specious net benefits to Americans, but also embroil agency resources in costly litigation for which the American taxpayers must foot the bill.
I began my remarks today with a quote from President Obama, and I’d like to finish with a comment from Professor Cass Sunstein, who led the Office of Information and Regulatory Affairs for the last administration. About a year ago, looking ahead to areas of possible common ground on regulatory reform, he wrote: “The good news is that across ideological divides, there’s a lot of room for bipartisan reform that would significantly cut costs and burdens – and do so without compromising safety, health, and environmental goals.” Let’s prove he’s right.
To help us begin this discussion, we have invited a distinguished group of witnesses to testify today. Mr. Jack Gerard is President and CEO of the American Petroleum Institute. Ms. Lisa Heinzerling is the Justice William J. Brennan, Jr., Professor of Law at the Georgetown University Law Center. Mr. Rosario Palmieri is the Vice President for Labor, Legal, and Regulatory Policy of the National Association of Manufacturers. Mr. Gary Shapiro is the President and CEO of the Consumer Technology Association. And Mr. Adam White is a Research Fellow at the Hoover Institution. Thank you all for being here and I look forward to hearing your testimony.
I will now turn to Ranking Member Nelson for any opening remarks.
Mr. Chairman, thank you for calling this hearing.
Over the past two years, you and I have worked in a bipartisan manner to identify and, where appropriate, remove outdated, duplicative or over-burdensome rules.
During last year’s FAA bill, for example, we crafted a provision that streamlined the aircraft certification process and would likely have spurred job growth in the aviation industry.
While the House balked at that provision, it serves as an example of how this committee has come together in the past to remove unnecessary burdens to commerce.
At the same time, Mr. Chairman, this committee has taken numerous bipartisan actions to protect the health and safety of all Americans.
For example, we witnessed numerous injuries and deaths from dangerous toys and children’s products due to weak government oversight. This culminated in the disastrous 2007 “summer of recalls” for a variety of children’s products.
One young child who died as a result was named Garret Davis. He was a four and a half-month-old who suffocated on an unsafe mattress in a portable crib during a trip to Florida in 2000. Garret’s mother Joyce, is in the audience today – and I want to thank her for tirelessly advocating for tougher product safety standards.
We also have the Hartung family here, whose daughter Abigail was injured by a defective crib in 2007, and Tim Frink, whose granddaughter was killed by unsafe window blinds in 2012 in Tennessee while her parents were serving in the Army at Fort Campbell.
It’s tragedies such as these that remind us of the human costs when we fail to address dangerous products.
They’re also why this committee responded by enacting the Consumer Product Safety Improvement Act of 2008 and gave regulators the power to quickly enact rules when there is a danger to children’s safety.
And while we’ve made strides, there are still areas where we need to be vigilant. The Takata airbag crisis is a perfect example. More than two years ago, this committee heard testimony from Lieutenant Stephanie Erdman who was seriously injured when her Takata airbag exploded in her face. She almost lost her eye – and her career in the Air Force as a result.
Fast forward to today and we still have no government rules to ensure the safety of these airbags – this despite 11 U.S. deaths, hundreds of injuries and the single largest recall in history.
I could go on and on with other examples – like the Deepwater Horizon oil rig that exploded in the Gulf of Mexico because BP put profits over safety and cut corners. That incident killed 11 workers and destroyed the seafood and tourism industry in many parts of the Gulf for more than a year.
Mr. Chairman, while I look forward to working with you to identify common sense regulatory reforms, I strongly urge committee members to refrain from taking a wrecking ball to regulations under our jurisdiction which protect the health and safety of all Americans.
Witness Panel 1
Mr. Gary ShapiroPresident and CEOConsumer Technology Association
Mr. Jack N. GerardPresident and CEOAmerican Petroleum Institute
Professor Lisa HeinzerlingWilliam J. Brennan, Jr., Professor of LawGeorgetown Law Center
Mr. Rosario PalmieriVice President of Labor, Legal and Regulatory PolicyNational Association of Manufacturers
Mr. Adam J. WhiteResearch FellowHoover Institution