American industry or to our economy. OMB bears a major responsibility for that ineffectiveness. To me, the solution to this problem has three elements.

First, Congress must drag the regulatory review process into the sunlight. I guess that is a common phrase. The back room dealing that marks OMB, and probably Council review must end. OMB and the Council must be required to place their comments or objections to rules on the public record for all to see and comment on.

OMB should appear at the OSHA regulatory hearing to answer questions just the way OSHA does, just the way the industry participants do, and just the way we do when we present evidence at those hearings.

Second, OMB and the Council cannot be allowed to delay regulation process interminably. There must be strict time limits imposed so that they cannot just pocket-veto a regulation.

And finally, we hope that Congress would reverse the power dynamic that now exists between OMB and OSHA and the other agencies. Congress must declare emphatically that regulatory decisions must be made by the agencies, and the agencies alone. Neither OMB nor the Council should displace economic agency decision-making authority and their own economic criteria for rulemaking in place of a statute which generates the agency in the first place.

Thank you very much.

Chairman GLENN. Thank you, Dr. Mirer.

Our next witness is David Doniger, senior attorney, Natural Resources Defense Council. Mr. Doniger has been involved very much in the Clean Air Act, in RCRA, other major environment programs, and has a great deal of experience with the regulatory review process and the Council in particular.

Mr. Doniger, we welcome you this morning.

TESTIMONY OF DAVID DONIGER,1 SENIOR ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL

Mr. DONIGER. Thank you, Mr. Chairman, senators.

I would like to pick up on the last theme of Dr. Mirer's testimony, that what is going on here is a major shift of power. People normally think of it as a shift of power between agencies and the White House. I think it is really a challenge to congressional power, a usurpation of congressional power. And I would like to sketch out how it works today.

There are more players in the White House than we have heard mention of today. OMB and the Council on Competitiveness are important, but really what is operating now is a constellation of White House agencies and staff who wield an even broader unprecedented power over the health, environmental and safety laws.

When EPA Administrator William Reilly, who was appointed by the President and confirmed by the Senate, attempts to carry out the Clean Air Act or other laws, it is no longer enough to obtain clearance from the Office of Management and Budget. He now must satisfy at least four other White House power centers: the

1 The prepared statement of Mr. Doniger appears on page 112.

Council of Economic Advisers, the Domestic Policy Office, the Counsel to the President, and the latest entry on the scene, the Council on Competitiveness.

These bodies are uniformly responsive only to the most extreme industry segments, and they do not care very much about the law or the evidence. In fact, their mission, as they conceive it, is to win back administratively what they could not prevent you from enacting in the Clean Air Act and other areas of environmental law.

Bad as it was during the Reagan Administration, the formal regulatory review that OMB conducts is now only the tip of the iceberg. A many-headed hydra operates in secret with no set rules or procedures. They have repeatedly demonstrated that they can intimidate and sometimes simply order EPA to do what they want. The power of the White House agencies is magnified by the fact that EPA must satisfy them all, and they have different tactics. Sometimes they come at EPA one after the other. Concessions made to one lead only to demands by the next. Sometimes they gang up on EPA together. They have enormous collateral powers to control EPA's budget, censor its testimony and its public statements. In fact, the Vice President sent a memo around to all agencies last year in which he informed them that everything including press releases were now subject to review by the Council on Competitiveness.

The process is anything but neutral. The White House staff routinely meet in secret with industry groups. Rules are redrafted in the White House according to industry wish lists, and then returned to EPA for publication. OMB several times has piously promised members of this Committee that it will keep certain public records of its contacts and follow other minimum rules of conduct in agreement with Senator Durenberger and Senator Levin, but it is not routinely following those rules. The Council on Competitiveness does not consider itself subject to those rules and agreements at all. There is no public docket, and they deny that they are subject to the Freedom of Information Act, though a recent court ruling holds otherwise.

Please consider the comments by a lobbyist who took advantage of the process to kill EPA's proposal to require the recycling of 25 percent of municipal waste that would otherwise be burned in incinerators, as Senator Lieberman mentioned. In a July article in the National Journal, Barbara Paley, who is a lobbyist for the National Association of Counties, described what she called the "backdoor" process of "whispers in the ear" of OMB and the Competitiveness Council, and she added, "It is nice that we got it, but I guess that there may be times when we will be concerned about an organization like the Competitiveness Council which nobody knows a whole lot about, and nobody knows who does what to whom there. We don't think you should have to go around the back door to groups that are not out there in the open, and who do not function in the substantive area to achieve this kind of objective."

These are comments from someone who used the process to kill an EPA rule.

The power of these agencies and staff comes directly at the expense of Congress. Those in the White House who are hostile to the Nation's health and environmental laws know they cannot win in

open legislative combat. So they try to block the implementation of these laws through regulatory review. Their power comes at the expense of the public health and the quality of the environment. Some of the cases I will talk about have resulted or will result in actually costing people their lives due to the delay and the weakening introduced by the Council and the other agencies.

The secrecy of the process makes a mockery of the rights and protections which we are supposed to have under the Administrative Procedure Act. White House personnel routinely bring their own views to bear, or act as a conduit for industry views, without leaving any public trace. In the often quoted words of Jim Tozzi, who ran the OMB operation in the early 1980's, OMB tries "not to leave fingerprints."

Staff of the Competitiveness Council, OMB or the White House agencies will attempt to wrap themselves in the mantle of the President himself in defending their actions by asserting the right of the President himself to supervise agencies and departments. The fact is, though, that the President is utterly removed from this process, and for the most part we see the specter of senior, senatorially confirmed officials those who Congress and the public take to be the real decision-makers-being strong-armed by obscure and relatively speaking, low-ranking White House staff.

The Council on Competitiveness is instructive in this regard. While the full Council does meet on occasion, by far the bulk of its work is done by its staff. It is to staff members, such as Al Hubbard, that EPA officials must heel in response to biweekly meetings. In practice, when the full Council meets, it acts as a rubber stamp for White House staff views. I have had the experience, by the way, of putting a FOIA request to the non-White House Cabinet members of the Council to see what documents they have on the incinerator decision, and several of them have responded that they have no documents at all. This hardly suggests an engaged involvement in the work of the Council.

For public consumption, when the Council overrules EPA, the Administrator is forced to adopt its views as though they were his own. In effect, he is forced to lip-sync for the White House.

I have given in my written testimony seven pernicious examples of the regulatory review. Senator Lieberman has covered two of them very well, and I would just submit them for the record: the Clean Air Act permits issue and the incinerator regulations.

Let me briefly touch on several of the other examples. One, Mr. Chairman, I think will be of special concern to you, because you took the lead in the efforts on the floor of the Senate to preserve EPA's jurisdiction over the radioactive emissions from facilities that are also licensed by the Nuclear Regulatory Commission. The final legislative language, though not what you and we were seeking, does still have important requirements. Before the EPA can rescind its authority to the NRC, it must find that what the NRC does protects the public health with an ample margin of safety as defined in the Clean Air Act. Otherwise the EPA is not allowed to rescind its clean air authority.

Now we have been told indirectly that the White House has instructed EPA that it shall rescind these rules. The EPA knows that for some of these categories of radiation sources the cancer risk is

as high as one chance in 100 to the people who live a lifetime closest to these facilities. And EPA knows that the NRC rules which are currently in existence do not effectively protect those people. I am talking now about the mill tailing waste piles located near the uranium milling operations. The EPA nonetheless is preparing to stay its rules for 3 years, even though the Clean Air Act specifically limits EPA to one 3-month stay. EPA has already done this for other NRC licensed facilities and we have sued over the abuse of this stay power. We are trying to block EPA's recision to the NRC. I think this is a subject, Mr. Chairman, that you may wish to investigate because of your special interest in the radiation emissions from facilities such as these.

Several other examples I will summarize quickly. One concerns the so-called WEPCO rule, which is a requirement named after a particular utility, that when an old power plant is extensively renovated, it is supposed to be subject to the requirements of a new plant. In effect, if it has been rebuilt from the inside out, it should be treated as a new plant. The utility industry sought in the 1990 Clean Air Act process to eliminate this requirement and Congress refused to do so. There is in fact, an amendment pending in the Johnston-Wallop energy bill trying to do that again because they did not get it from the Clean Air Act; it is one of the reasons we strongly opposed Johnston-Wallop bill.

Now the utilities have gone back to the White House and DOE. I draw here from the findings of Congressman Waxman and his House Subcommittee on Health and Environment. He found that the Edison Electric Institute turned to the Department of Energy with a list of suggestions that it said constituted "a good WEPCO fix."

A few days after that the Assistant Secretary of the Department of Energy wrote EPA insisting on "a good and comprehensive WEPCO fix." She wrote that EPA was not being "responsive to the needs of the electric utility industry." And DOE subsequently drafted its own version of the rules. At that point, Richard Schmalensee, who is a member of the White House Council of Economic Advisers, wrote EPA a memorandum stating that he was “surprised to find" that the EPA draft "does not implement many administration proposals." And he ordered that EPA should "prepare by the close of business next Wednesday at the latest a revised legislative rule that implements the administration's WEPCO policy.

Well, I will skip several of the steps which are set out in my written testimony, but in essence, EPA did as it was told. As Congressman Waxman said, "What's left, in essence, is a rule written by the polluters to benefit the polluters.'

All of you will remember the President's recent trip to the Grand Canyon, where he celebrated the signing of a good agreement to control emissions from the giant Navajo power generating station, which seriously obscures visibility of this national shrine. On some days, you simply cannot see from one side of the Grand Canyon to the other. The story behind the agreement is another tale of White House interference. After many years of scientific study, last winter EPA sent to the White House a proposal to require a 90 percent reduction, averaged monthly, in this plant's emissions. The Competitive Council staff said no. It would approve

only a 70 percent reduction, which is three times as much pollution.

Dutifully, EPA then proposed and publicly defended this weakened option. No thanks to the White House agencies, the parties were able to work out a settlement of the dispute with a 90 percent reduction requirement on an annual basis. This is almost as good as what EPA wanted to do in the first place and far better than the 70 percent that was all the White House agencies would have allowed.

I give you that agreement as an illustration both of the good way to proceed, to try to work things out among the parties we have done this in several agreements especially one on reformulated gasoline and the bad way to proceed, which is just to listen to the hardliners in the industrial community and use the White House agencies to block the regulations.

Finally, there are examples outside the clean air field. The heavy hand of the White House agencies was felt on the wetlands issue despite the President's "no net loss of wetlands" pledge. The Council on Competitiveness forced EPA and other agencies to propose a radical redefinition of wetlands totally unsupported by the science, which will cut out as much as half of the Nation's remaining wetland resources. They will just be defined out of existence and opened indiscriminately to the bulldozer.

One may ask who on the Competitiveness Council, even on the cabinet level body itself, let alone the staff, had scientific expertise in this area? As indicated in a Washington Post article that I have attached, an Administration official has frankly admitted that science had nothing to do with it, that it was all a political decision. Mr. Chairman, I urge this Committee to develop legislation that will stop these White House abuses and restore Congress' ability to make sure that its own laws are enacted. I have suggested language that might be a starting point for such a bill, simply a paragraph that would stop this regulatory review activity and require, as Dr. Mirer suggested, that the White House agencies participate like anyone else in the public comment process on a rule.

Accepting for the sake of argument that there is a case to be made for an executive branch or inter-agency review process, it must be forced into the sunlight and held to non-extendable deadlines. If the Committee decides to allow for continued regulatory review, the process should be limited in two additional ways. There should be only one bite at the apple, not 3 or 4 or 5 chances to review and whittle down the regulation. And it should be after the rule is proposed for comment so that everybody has the same thing to comment on as the White House. The bill should also restrict executive branch reviewers to the factors that the agencies are required to consider. If cost benefit analysis is not allowed in a health based statute, then it should not be a basis for regulatory review.

The President has ample tools for effectively coordinating policy. Agencies can use the comment process. They can raise issues to the President himself. But no executive branch staff or agency should have the power to use different criteria than Congress has directed the agencies to consider.