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agency action, subject to the authority of the agency subsequently to modify such schedules and deadlines through appropriate administrative procedures.

The sole intent of the amendment is to prevent an agency from unreasonably. constraining its future discretion and that of its successors by agreeing with a private party plaintiff to a consent judgment that imposes judicially enforceable obligations and deadlines on the agency well into the future.

PROPOSED AMENDMENT TO THE ADMINISTRATIVE PROCEDURE ACT Add a new 8629 to S. 343 to read as follows:

In any civil proceeding (1) to compel agency action unlawfully withheld or unreasonably delayed, or (2) for judicial review of agency action, the agency shall not propose, agree to, or submit to the court, and the court shall not approve, a consent judgment that would impose upon the agency any obligation to initiate, continue or complete rulemaking proceedings, or to take any other agency action more than 18 months alter the date that the consent judgment is entered, and in no event shall a consent judgment entered after January 1, 1995 and before January 21, 1997, impose any such obligation on the agency to take any such action after January 20, 1997.

SUMMARY OF THE STATEMENT OF THE NATIONAL FOOD PROCESSORS ASSOCIATION ON

THE REGULATORY ANALYSIS PROVISIONS OF H.R. 3263 The National Food Processors Association urges that Congress enact legislation to require that all federal agencies evaluate the economic impact and cost-benefit effectiveness of regulations which will have a major impact on the economy or any important segment thereof. The regulatory analysis provisions of H.R. 3263 provide an excellent framework for such a statutory requirement.

In our support of cost-benefit effectiveness requirements over the past five years we have come to the conclusion that such legislation should include certain basic elements in order to assure its effectiveness. These include: 1. The regulatory analysis requirement should be a part of the Administrative Pro

cedure Act. 2. It should be applicable to all federal agencies. 3. A regulatory analysis should be required for the adoption, amendment or repeal

of regulations. 4. The definition of a major rule to which the regulatory analysis requirement ap

plies should be broad and flexible. 5. A regulatory analysis should be required for both the proposal and adoption of

all regulations. 6. A preliminary regulatory analysis should require a statement of the objectives of

the proposed rule as part of the APA statement of basis and purpose, should outline the alternatives considered, and should analyze the benefits and economic ef

fect of the proposal. 7. The final regulatory analysis should cover the same issues as the preliminary

analysis and should be appropriately responsive to public comments. 8. Agencies should be required to consider and take into account the economic ef

fects of a proposed rule. 9. It is absolutely essential that the judicial review of a regulation include review

of the procedural and substantive regulatory analysis requirements. 10. There should be a special provision for emergency rules. 11. An explicit effective date provision should be included in order to avoid unnecessary confusion and litigation. [The prepared statement of Mr. Sunstein follows:]

Statement of Professor Cass R. Sunstein

Karl N. Llewellyn Distinguished Service Professor of Jurisprudence

University of Chicago Law School and Department of Political Science

before

'The Subcommittee on Administrative Oversight and the Courts

United States Senate, Committee on the Judiciary

February 2, 1995

Summary of Statement of Cass R. Sunstein

There can be no doubt that important concerns underlie S. 343 -excessive regulatory costs, poor priority-setting, too little balancing. But in its current form, S. 343 is not well-drafted. Indeed, the bill would disrupt settled expectations in a way that would make it a kind of "Full Employment Act" for both lawyers and economics. For this reason, S. 343 would fail its own stated standard cost-benefit analysis.

More particularly, S. 343 would give excessive power to federal couts. It would create undue confusion about the status of existing rules. It would introduce a very confusing provision about "federal power," a provision that appears based on a misunderstanding of regulatory law. It would offer unclear and possibly unfortunate guidance with respect to costbenefit analysis, which has features of art as well as science.

S. 343 might well be amended and simplified so as to codify the best of practices under Presidents Reagan. Bush, and Clinton practices that call for careful analysis of regulatory consequences without increasing judicial power.

Statement of Professor Cass R. Sunstein, Karl N. Llewellyn Distinguished
Service Professor of Jurisprudence, University of Chicago Law School and
Department of Political Science, before the Subcommittee on Administrative
Oversight and the Courts, United States Senate, Committee on the
Judiciary

Mr. Chairman and Members of the Subcommittee:

I am grateful for the opportunity to appear before you today to discuss the issues of-law and policy raised by S. 343. As a teacher of administrative law and regulatory policy, and as a former Department of Justice employee involved in the draiting of President Reagan's "cost-benefit" Executive Order, I am most enthusiastic about the general goals of S. 343. There can be no doubt about the importance of the concerns that underlie S. 343 -excessive regulatory costs, poor priority-setting, too little balancing.

At the same time, I believe that in its current form, S. 343 is not welldrafted. Indeed, the bill would disrupt settled expectations in a way that would make it a kind of Full Employment Act for both lawyers and economics. For this reason, S. 343 would fail its own stated standard -- costbenefit analysis.

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Mcre particularly, S. 343 would create excessive confusion about existing rules. Perhaps worst of all, it would give excessive power to federal courts. It would introduce a new and troublesome provision about "federal power," a provision that appears based on a misunderstanding of regulatory law. It would offer unclear and possibly unfortunate guidance with respect to cost-benefit analysis. And it would provide an unnecessary new mechanism for legislative review.

With these problems in mind, I will make a number of suggestions for improving the bill: My most basic suggestion is that S. 343 might well be amended so as to codify the best of practices under Presidents Reagan, Bush, and Clinton -- practices that call for careful analysis of regulatory consequences without increasing judicial power.

I. In General

No one can dispute the claim that federal regulation is too expensive. We could accomplish the same amount at much lower expense. No one should dispute the claim that government should rely much more than it does on market-oriented strategies rather than "command-and-control." Economic incentives and provision of information are often better than rigid federal mandates. A special virtue of S. 343 is that it explicitly recognizes this point.

Nor should anyone dispute the claim that government ought to engage in better risk assessment and priority-setting. Too often large amounts are devoted to small problems, and small amounts are devoted to large problems. See generally Stephen Breyer, Breaking the Vicious Circle (1993); Richard Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 59 University. of Chicago Law Review 1 (1995).

As a way of making these points more vivid, consider the following chart, designed to show regulations passing or failing "cost-benefit analysis"4CBA) and "health-health" analysis (comparing health gains and health losses from regulation):

Cost-per-
life-saved
(millions or
19929)

Budgeted regulations

Year

Agency

Status

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(Source: Lutter & Morrall, Health-Health Analysis, 8 Joumal of Risk and Uncertainty 43, 59 (1994). Note that "health"-health analysis attempts to incorporate health losses resulting from regulatory expenditures. Note too that in order to evaluate any particular regulation, it is necessary to know all of the aggregate benefits, including morbidity gains as well as deaths prevented, and that it makes sense to spend more resources in some contexts because of the democratic judgments discussed in section I(B) below.)

This chart does not tell us everything that we need to know about regulation. But it does suggest that regulation is not well-coordinated, that some programs cost too much, and that proper priorities are not being set. In this light, it cannot be doubted that Congress should take steps to ensure more sensitivity to cost and better coordination and priority-setting. For this reason, the basic goals of S. 343 ought to receive enthusiastic bipartisan approval.

II. Problems With S. 343

Although S. 343 is unquestionably a good-faith effort to deal with serious issues, it would create several severe problems of its own. These problems fall in five basic categories. (1) It would create considerable confusion about existing rules and probably waste taxpayer resources because of "petitions" from the private sector. (2) It would offer unclear and possibly unfortunate guidance with respect to CBA. (3) It would give far too much power to federal courts. (4) It would provide a mechanism for legislative review that is unnecessary under existing law. (5) It would create confusing new law with respect to "federal power"; the confusion might be tolerable if the new law would accomplish some good, but it is most unlikely to do so. I deal with each of these problems below.

A. Exasting rules. One of the largest problems with S. 343 involves section 625: the right to petition for cost-benefit analysis of existing rules. Agencies should of course explore the costs and benefits of regulations. But this provision would create considerable uncertainty, and it would also allow people in the private sector to divert taxpayer resources for insufficient gain.

In some areas, section 625 is unnecessary. Under Presidents Reagan, Bush, and Clinton many agencies will already have done some kind of cost-benefit analysis. For this reason, it is unclear that section 625 would do much good. But it could accomplish real harm, by making the status of existing rules unclear and by drowning agencies in paperwork. Past cost-benefit analyses were done under somewhat different standards from those that are created by section 622; and independent agencies were exempted from previous presidential requirements (a gap filled by S. 343). The central problem is that any right to petition would allow private parties

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