major rule, without qualification, is subject to report and wait procedures. While Congress has set a reasonably brief review period (45 days), it is obvious that this process will introduce new rounds of delays (especially at the end of legislative sessions) and uncertainties that cannot be justified, especially since Congress has available to it the far more finely-tuned instrument of oversight hearings with which to monitor agency rulemakings. It also bears mention that these procedures raise the specter of Congress exerting undue influence in the formulation of agency rules. While we do not suggest that these procedures are per se unconstitutional, or necessarily raise a Chadha problem, they do pose a real risk of Congress playing too great a role in the formulation of agency policy and overstepping its constitutional role. This too will engender needless litigation, with those disappointed with agency rules claiming that Congress improperly influenced the outcome of agency rulemakings. After all, critics will charge, why else would Congress engage in systematic review of an agency's work-product unless Congress wanted to help agencies shape their policy decisions? Because there are far more tailored and equally effective ways for Congress to oversee the regulatory process, we urge that this provision be reexamined. S. 343 would seriously impair an agency's ability to safeguard the health and safety of Americans. In our view, there are two overarching themes that expose the weakness of the approach taken in S. 343. First, the bill's proponents condemn the present regulatory system as being overly prescriptive, too expensive, and laden with burdensome and often useless paperwork requirements. Those criticisms, however, fit S. 343 like a glove. Second, many of the bill's supporters have led the "unfunded mandated" fight, to protect state and local governments from federal mandates not fully paid for by the federal government. Cynically, this bill is a classic "unfunded mandate," since it imposes highly expensive analytical requirements on agencies without giving them the funds to conduct these studies. We urge the Senate to reject S. 343. 10 EXAMPLES OF HEALTH AND SAFETY STANDARDS THAT WOULD BE STOPPED OR DELAYED BY S. 343 Prevention of Fatal Iron Poisoning in Children Food and Drug Administration This rule would prevent the many needless deaths and serious injuries that occur when children accidently ingest too much iron by eating too many vitamin tablets or iron supplements. Iron toxicity is the leading cause of poisoning deaths in children today. From 1986 through 1992, over 100,000 children were poisoned; many suffered permanent injury and at least 33 died. The rule would limit the iron potency of vitamins intended for children and require a warning label and child proof container on higher potency pills. Testing for Contamination in Meat and Poultry This rule would mandate rigorous sanitation requirements and scientific testing for bacteria in meat and poultry processing. The meat industry currently uses the old fashioned "poke and sniff" meat inspection system which does not adequately detect deadly bacteria. There are nearly 5 million illnesses and 4,000 deaths every year due to ingestion of tainted meat and poultry products. Reduction of Emissions Which Cause Birth Defects and Cancer These rules would reduce emissions of dioxin, cadmium, lead, mercury and particulate matter from municipal and medical waste incinerators. These incinerators are among the larger sources of dioxin emissions in the country. Dioxin emissions would be reduced by 99 percent. Dioxin is known to cause birth defects. Cadmium, lead and mercury cause other diseases. Prevention of Fatal Head Injuries in Motor Vehicle Crashes National Highway Traffic and Safety Administration To reduce fatal head injuries in motor vehicle crashes, this rule would require car, van and light truck manufacturers to install energy absorbing components in the upper interior of the vehicle. The addition is expected to prevent 1614 deaths and 1478 serious injuries each year. Side Impact Crash Testing for Light Trucks and Vans This rule would required light trucks and vans to meet the same "side impact" crash test standards as passenger cars. 1800 people are killed each year by side impact crashes involving light trucks and vans. Prevention of Fatal Truck Accidents National Highway Traffic and Safety Administration These rules would require trucks to pass certain stability and control requirements, which generally require the use of anti-lock brakes. 5000 Americans were killed in large truck crashes during 1993. These rules could prevent as many as 600 fatalities and 4,000 injuries a year. Workplace Exposure to Tuberculosis Occupational Safety and Health Administration This rule would require employers to minimize or eliminate employee exposure to tuberculosis. In 1992, more than 26,000 new cases off active tuberculosis were reported in the U.S. Coal Mine Fire Prevention Mine Safety and Health Administration This rule would reduce the risk of explosion and fire in coal mines. Methane gas from diesel-powered equipment and coal dust create a substantial risk of fire, causing 10 coal mine fires between 1979 and 1992. Tracking Defective Medical Devices Food and Drug Administration These rules would help the FDA to track the effectiveness and safety of medical devices. When devices such as the Dalkon Shield and the Bjork-Shiley Heart valve were released, this system was not in place. Tens of thousands of women have suffered pelvic infection, sterility, miscarriage and death from the Dalkon Shield. The Bjork-Shiley Heart Valve has killed approximately 800 patients. Proper Mammogram for Breast Cancer Detection Food and Drug Administration The rule would help ensure that mammograms are properly administered and interpreted. Nearly 50,000 women die each year from breast cancer. Early detection saves lives. Senator GRASSLEY. Professor Strauss? STATEMENT OF PETER L. STRAUSS Mr. STRAUSS. Thanks very much, Senator Grassley, and I am delighted that you have invited me to be here today. I will say that I was a small part of the ABA effort that you will hear about later from George Freeman at the time S. 1080 was before the Senate, and I rather thought S. 1080 was a pretty good bill. I don't think this one is, and I want to spend a couple of minutes saying why. I think the new point of view that maybe I could introduce is what I would describe as the cost per unit of government effort. I think what David has had to say has in some respects looked in that direction. I think in the same way as one needs to have concern with the costs the regulation imposes on private industryand, with Sally Katzen, I think many of the substantive provisions of this bill look quite properly in that direction-one also needs to have concern with the cost per unit of government action, and you particularly need to have that concern in a time like today when it is very clear that whatever else we may say, there will be fewer resources available for government action. That is simply there; there is nothing that will affect it. But through this bill, one can make whatever resources those are serve larger or smaller degrees of public purpose. The more expensive any given government action is, the fewer government actions you are going to have, and to carry on from what David, my former student, I guess I think I remember him out there was just suggesting, the problem with the judicial review portions of this bill is that they take that decision so frequently out of the hands of politicians who at least have the whole picture and can make rational allocation decisions, and they put those decisions into the hands of private individuals who are, and it is their right, serving their own private purposes. The people who file a petition to reexamine the cadmium rule or the coke oven rule, or whatever, may each in their hearts believe, like your Iowa witness the other day, that they are doing the right things for themselves, and there is an argument there. But when one looks at the result in the aggregate, what you may see is a paralysis of government activity. So what I suppose I am here principally to urge on you today is, and this does pick up a theme from a number of the witnesses you have heard, that you subject this bill to the same analysis as you are requiring agencies to subject what they are doing, and that you ask yourself whether there are more cost-beneficial, more effective, more efficient means of accomplishing what you want to accomplish, which I think you ought to want to accomplish. I think that judicial review will largely, not wholly, drop by the wayside if you engage in that analysis in a thoughtful way. I go into this in some detail with regard to section 624 in my testimony, and I don't know that there is time here to repeat that analysis, but just responding to a very compelling example from your constituent, I do think it may be relevant to give at least one example of judicial review that illustrates the difficulties that courts have and the costs that judicial review can impose. This is a 1972 case called Chrysler v. Department of Transportation. In 1972, the National Highway Traffic Safety Administration had already adopted a rule requiring that air bags be installed in American cars. Air bags were already a proven, viable technology, and the sixth circuit agreed that that rule was adequately supported. I think there could be no doubt in this room that its adoption would have been cost-beneficial, but the sixth circuit was led to see that there was a problem with the dummies that were going to be used to test the adequacy of the air bags. The necks on those dummies were stiffer than your or my neck is, and that would lead to some inaccuracy in the tests. NHTSA had tried to respond to that by saying, well, we will fudge the results; we will give you the advantage of what we know to be an inaccuracy in the test. But to the sixth circuit, that wasn't enough, and so the rule got undone on that narrow basis, and it took until a few years ago for air bags to get into American cars. We know how many thousands of people needlessly died on the highways as a result of that judicial action. It illustrates another difficulty with judicial review which I suppose is clear to all of us, which is that courts are not equipped to handle factual disputes of the recondite character that arise in scientific and technical rulemaking. They just aren't equipped to do it, so they are going to make mistakes. They may try not to make mistakes, but they are going to make mistakes. Now, I would urge on the committee that in thinking about this important intellectual process that you want to require the agen cies to undertake, you accept that there be some margin of error. There will be bad rules under any set of circumstances. There are going to be bad rules that get out there, but you look to see, do we have adequate devices in place to control the intellectual process, to make sure that agencies engage seriously in this intellectual process, and I think you have in the bill two good ones. One of them is executive oversight. Every President since Richard Nixon has thought that this was important to do with their agencies-Republican, Democrat; it doesn't matter. When I was general counsel of the Nuclear Regulatory Commission 20 years ago, an independent regulatory commission that you have excepted from at least some of the provisions of this bill, we understood that it was important in some way or another to do cost-benefit analysis. So you can rely, I think, on Presidents to want to exercise this control, and you have provided additionally for a mechanism in the Congress, which seems to me well warranted and which is going to educate you whether these requirements are being taken seriously or not. I think you will find, particularly since you are going to be educated about it, that they will be taken seriously. Both the President's review and the Congress' review are going to occur in what I call realtime, while the rulemaking is taking place or within a very brief period of time afterwards. You have provided strict time controls which are appropriate to provide over those proc esses. Judicial review frequently takes 5, 6, 7 years after an agency's rulemaking is complete. The frustration that David speaks about is frustration that can occur 15 years after a rulemaking has begun, and particularly if it can occur on account of some mistake that was made in the first year of that process rather than the 10th year of that process. You have bought yourself an extraordinarily inefficient system. So I guess just to wind up, Congress learned, I think, from NEPA in the 1970's that judicial review had unanticipated consequences. There have been a lot of analytic impact requirements posed both by Congress and by the President since that time. Judicial review hasn't been a part of one of them, and it seems to me right not to have been a part of any of them. I do think when it comes to reviewing the merits, as in S. 1080, it is obvious that the documents that are developed become part of the rulemaking record and part of the background against which the adequacy of the rule is addressed. That is a different proposition from the proposition of should you have called this a major rule or not 15 years ago, and do we give private parties the right to petition or not today in ways that can tie up agency processes. So I would urge you to think about this rule in terms of how can we help Government do those things that it still has to do in the most cost-efficient, cost-effective manner, and I think if you do that you will find a number of these provisions-again, I know that we are short for time this morning and I have tried to say something about a number of them in my testimony-I think you will find a number of these provisions require some work. Thank you. [The prepared statement of Mr. Strauss follows:] PREPARED STATEMENT OF PETER L. STRAUSS My name is Peter Strauss. I am Betts Professor of Law at Columbia Law School, where I have taught and written about administrative law since 1971. I have also practiced administrative law as a government lawyer, serving in the Office of the Solicitor General during the Johnson and Nixon administrations, and as General Counsel of the Nuclear Regulatory Commission during the Ford and Carter administrations. I was a consultant to the American Bar Association's Coordinating Group on Regulatory Reform when Congress made its last serious effort at regulatory reform, during the Reagan administration; and I have since been chair of the ABA's Section of Administrative Law and Regulatory Practice. And I have for many years been a consultant, then public member, and now senior fellow of the Administrative Conference of the United States. The testimony I am about to give you is entirely my own, and has not been paid for by or vetted with, directly or indirectly, any governmental official, private organization, or client. I am very pleased to have the chance to talk with you about legislation as important to the country as is S. 343. I should start by saying that I learned the value of cost-benefit analysis in rulemaking and of properly conducted presidential oversight twenty years ago, during my years at the Nuclear Regulatory Commission. It may surprise you to hear that a major safety regulator, established by Congress as an independent regulatory commission, required its staff to justify rulemakings in cost-benefit terms and welcomed appropriate presidential participation in its work, but that was the case. Understanding the public's proper need for assurance about the safety of nuclear power generation, even under normal operating conditions, we had to develop principles for choosing how safe was safe enough. Perfect safety could and can never be obtained. And so we made what we thought were conservative assumptions about the health consequences of exposure to even minuscule amounts of radiation, and conservative estimates of the value of preventing those consequences, and on that basis developed a rule for saying when new safety improvements did, and did not, have to be adopted by operating plants. The NRC was also charged by Congress with responsibility for administering international nuclear programs, and in that context we thought it essential to consult closely with the executive branch. It is a small agency, and cannot duplicate the capacities of the Department of State or the CIA, for example, to assess matters of great subtlety and sensitivity. We and they understood that we had to reach our own judgment, but in a context of collaboration and mutual respect. We have one government, whose resources are limited; and they can be best and most efficiently deployed only from its' executive center. That was an important reality for the NRC then, as it is for our country now. So I start out friendly to the project S. 343 seeks to accomplish. It is important legislation, that on the largest scale looks in the right direction. It is my hope that you will succeed in institutionalizing executive oversight of rulemaking, and in revising rulemaking to require that the most important initiatives be based on careful consideration of alternatives and on rational justification of the decision to devote the government's and the private economy's limited resources to the matter at hand. Of course there are the details as has wisely been remarked, the devil is in the details and we haven't got time to talk about them all. I want to recommend to you a course of action for assessing those details, and give you just one example of how such an assessment might change aspects of this bill's approach. The recommendation is that you use the discipline of cost-benefit analysis as best you can in considering this legislation itself—that is, that you pay attention to possible unintended consequences, to regulatory overlaps, to less costly alternatives including approaches that rely on managerial standards and incentives rather than command and control approaches. The particular example concerns section 624's provision for judicial review of regulatory impact analysis, and its relation to properly constructed presidential and congressional oversight of that same activity. The proposition that underlies the example is that open, aggressive political oversight of rulemaking analysis conducted as in my judgment the President and Congress have the incentive to conduct it, and in a manner that permits the public to assess its regularity and efficacy-will achieve the change you want in regulatory approaches without threatening to raise the costs of what government properly has to do. By way of contrast, permitting judicial review of the process hands over to interested private parties weapons with which they can cheaply and unaccountably delay government action, and make it more expensive to accomplish what government should be doing. Congress is, properly, trying to make government smaller. As the resources available to agencies diminish, it becomes increasingly important to protect agencies' ability to use their scarce resources efficiently. Thus, so long as government still has work to do, Congress needs to be careful that it doesn't create a |