light on the Council, its relation to OMB regulatory review, and the impact of this new process on Federal agency decision-making as well as establish a need for greater accountability in the regulatory process. That includes the right to know how and with what advice decisions are arrived at and whether balance and fairness prevail in that process as opposed to favoritism to any one particular advocacy group or interest.

Before we hear from the other members of the Committee and from our witnesses, I would like to describe some of the reasons why I called this hearing. First, as I said, we have been trying for several years to come to grips with the public accountability problems created by OMB regulatory review. This has been a long process. It was carried out in good faith negotiating with Mr. Darman and his staff, which last year resulted in what we thought was a balanced, a workable and fair agreement with the administration on how best to improve the accountability of the OMB process. The administration agreed that upon reauthorization of the Paperwork Reduction Act, it would issue an executive order setting out public access requirements and time limits for OMB review. The executive order was never issued, however, because anonymous Republican rolling holds in the Senate prevented Senate consideration of the Paperwork Reduction Reauthorization bill.

Now let me just describe that just a little. The anonymous hold permitted as a senatorial courtesy to a particular senator through his party's leadership objection to considering legislation in the Senate is, to me, one of the Senate's more obnoxious customs. It is even more onerous when exercised as a rolling hold where anonymous objection is passed from one senator to another so it becomes virtually impossible to ferret out who is doing the objecting and to attempt to deal with it to get on with the business of the country. Now this was not Mr. Darman's doing, but apparently was done by those who found it very difficult to accept a balanced approach to regulatory review.

For the record, I will insert several documents that reflect the administration's position last year including the draft executive order and the statement of administration policy, a statement that has apparently been repudiated despite a sign-off by the Director of OMB, Mr. Darman.1

What was not clear to me last year was that while on the one hand the administration was discussing procedures to govern OMB regulatory review, on the other hand it was developing what appears to be a new process whereby the Council could bypass those very same procedures. While I am still unsure about the true extent of the Council's authority and power, I now know that last year's agreed upon procedures for OMB appear to have been superseded in many instances by the insertion of the Council into the regulatory review process, even after our lengthy, good-faith bargain. Given these developments, I view this hearing as a first step toward a new set of regulatory review procedures that can provide the balance, the fairness, the openness, and public accountability

1 See pages 229-278, 357.

the American public deserves from its government and which we had negotiated.

The second reason for this hearing is the growing record of the Council on Competitiveness. According to a March 23, 1991 memorandum from the Vice President, President Bush asked the Council to, "to oversee the regulatory review process" run by OMB. According to press reports, this has meant private meetings between Council staff and business groups affected by agency regulations, Council staff participation with agency officials in drafting specific regulatory provisions, regular Council staff meeting with OMB staff to discuss agency rules, and Council staff calls to an agency head directing him not to release a regulatory proposal.

Now lest anyone think that we are just dealing with bureaucratic in-fighting, these are not small issues. This is not just bureaucratic wrangling. We are talking about many billions of dollars. We are talking about lives being affected where there are threats to public safety and health. We are talking about businesses and jobs that may rise or fall on these decisions, and that was the reason we spent so much time and so carefully crafted the process including the public's right to know how these decisions were arrived at, decisions we hoped would involve fairness and would involve no back room dealings with special interests outside of normal negotiated channels.

Now we have been told repeatedly that all the Council gets involved with are inter-agency disputes. Now that is one of the things we have to look into. Regulations adversely affected by such Council activities include Clean Air Act regulations, the wetlands delineation manual, biotechnology regulation, FAA aircraft noise standards, regulations implementing the Nutrition Labeling and Education Act, Clinical Laboratory Improvement Amendments of 1988, and Medicare and laboratory certification rules, and OSHA occupational exposure to formaldehyde.

Council involvement is also reported in administration support for the recent Symms takings amendment, opposition to the ultimately vetoed Orphan Drug Act Amendments of 1990, and most recently review of proposed congressional testimony by SEC Chairman Breeden. Details on these and other reported incidences of council involvement in agency decision-making, are reported in articles that I will include in the record.

Last fall, we had reached tentative agreement with the administration on procedures governing regulatory review and public disclosure. However, this year with the emergence of the Council, the administration refused to endorse that agreement. We spent 22 years working that out. It appears to us that our good faith agreement worked out is now being bypassed.

In an effort to better understand the Council's activity, Senator Kohl, Senator Levin, and I wrote to the Vice President who chairs the Council on April 17 of this year, and we asked about the authority and operations of the Council. Now, we did receive an answer, but it was basically a letter to serve as a cover sheet for press releases and for fact sheets that did not really address the questions that we had wanted answered. We asked again about the authority and operations of the Council. Day before yesterday, however, we finally received a response to our questions. It took 6

months, repeated staff calls, meetings with Council staff, meetings with the Vice President personally by both Senator Levin and myself, and the announcement of this hearing to finally get a re

sponse.

While the letter from the Council provides few details about the Council's operations, it definitely lays claim to broad authority over OMB regulatory review as well as power to engage in regulatory review on its own. For the record, let me note that we did invite the administration to testify today. We asked the Vice President, the Council staff, Council members, and through staff Mr. Darman, who also declined to attend today, too. I was not able to talk to him personally about it. For the record I also want to note that today's hearing is not meant to be a hearing on OIRA's authority under the Paperwork Reduction Act. In the coming year, I intend to look more closely at OIRA and its activities under that Act.

As to the substance of the issues we address today, let me say that I believe the President has the authority as the chief executive to coordinate agency decisions and set policy priorities for them consistent with statutory mandates. And I also believe the President and the Vice President require some protection so that advice and the development of administration policy can take place free of public scrutiny. There have to be many pros and cons in that whole process, and I fully support that. But that is not what we are trying to eliminate. But I do not believe that either executive privilege or respect for the deliberative process should be used to: hide back-door contacts with individuals powerful enough to have access to the White House; to substitute political opinion for the technical and scientific judgments that Congress delegated to agencies; justify yet another regulatory review process by yet another group; or justify agreeing to accountability for OMB regulatory review while simultaneously trying to circumvent those rules as it appears to us through organizations like the Council.

Needless to say, rulemaking and regulatory review issues are not simple ones. They are certainly not just matters of academic interest, as I pointed out before. There is no easy formula for making what may be life and death decisions, and there can be no politically correct answer for each question faced by an agency decisionmaker. These processes on the balance were worked out with OMB over a long period. They seem to have been thwarted by the Republican rolling holds we had last fall when we had the legislation ready to go to the floor and could not get it considered, and now in part are being bypassed by the Council on Competitiveness.

Again, lest we think that this is just a little bureaucratic in-fighting, let me show you an insert out of The Dayton Daily News. It is a whole section here. It must be 10 or 12 pages. It goes on about what has happened under OSHA with the last two administrations, what the difficulties have been, fireball, people injured, and so on, where these things have been put off to the States rather than being enforced. These are some of the decisions that are made. So these are not tiny issues that we are talking about. We are talking about life and death issues for many people.

What there can be and what there must be is an open and a publicly accountable process so that the President, the Congress, the

courts, and the American public can read off the same page, and be confident that each agency's rulemaking record truly reflects the steps taken by the agency to make certain that there is balance and that all issues are considered in their rulemaking decisions. And we thought that is the kind of a process that we had negotiated, and were about to have in place.

So I hope that today's hearing can be our first step. I am sure that it will not be the only hearing, but I hope that today's hearing can be our first step to assuring that Federal agency decisionmaking can indeed be publicly accountable. That is the system we in good faith thought we had worked out.

PREPARED STATEMENT OF SENATOR GLENN

This morning we examine the role of the Council On Competitiveness in reviewing Federal regulations.

For the past ten years the Governmental Affairs Committee has followed the development of the OMB regulatory review process created by executive orders 12291 and 12498, and operated by OMB's Office of Information and Regulatory Affairs (OIRA). I am concerned that in the regulatory review process that a critical balance must be maintained between the economic, health and safety, environmental and consumer impact of Federal rules and regulations. This is a complicated processone that must consider, weigh and make decisions among disparate views of many interests, all claiming the "public good" as their mandate.

The Committee has often questioned OMB officials about that process. We have also heard frequent testimony about the problems it has created-ex-parte communications, undue delay, and regulatory decisions unsupported by an agency rulemaking record. Finally, we have considered several legislative proposals to remedy these problems.

It is with some concern, therefore, that we convene today to hear about another layer of regulatory review, that is, the regulatory review activities of the President's Council on Competitiveness.

In the last year, the Council has emerged as both a supervisor of OMB regulatory review, and as a regulatory reviewer on its own. Today we hope to shed some light on the Council, its relation to OMB regulatory review, and the impact of this new process on Federal agency decision-making, as well as establish the need for greater public accountability and the right to know how and with what advice decisions are arrived at in the regulatory process. Balance and fairness must prevail in that process, as opposed to favoritism to any particular advocacy group or cause.

Before we hear from the other members of the Committee and from our witnesses, I would like to describe some of the reasons why I called this hearing.

First, as I said, we have been trying for several years to come to grips with the public accountability problems created by OMB regulatory review. This has been a long, drawn-out process, carried out in good faith negotiation with Mr. Darman and his staff. Last year, we finally reached an agreement on what we thought was a balanced, workable, fair set of procedures for regulatory review. The Administration agreed that upon reauthorization of the Paperwork Reduction Act, it would issue an executive order setting out public access requirements and time limits for OMB review. The executive order was never issued, however, because anonymous republican holds prevented senate consideration of the Paperwork Reduction reauthorization bill.

Let me add that an anonymous "hold" is a courtesy permitted to a particular senator through his party's leadership to object to bringing up a piece of legislation for consideration on the Senate floor. I feel that this is one of the Senate's more obnoxious customs. It is an even more onerous practice when exercised as a "rolling hold" where the objection is passed from senator to senator, so that it becomes virtually impossible to ferret out who is doing the objecting so that their concerns can be dealt with, and we can get on with running the business of the Senate, and the country. Such an anonymous "rolling hold" was used by the Republicans to prevent our agreement with OMB from passing. This was not Mr. Darman's doing, but apparently was the action of those who found it very difficult to accept a balanced approach to regulatory review.

For the record, I will insert several documents that reflect the Administration's position last year, including the draft executive order and the statement of Adminis

tration policy—a statement that has apparently been repudiated despite a sign-off by the director of OMB, Richard Darman.

What was not clear to me last year was that, while on the one hand, the Administration was discussing procedures to govern OMB regulatory review, on the other hand, it was developing a what appears to be a new process whereby the Council could bypass those very same procedures.

While I am still unsure about the true extent of the Council's authority and power, I now know that last year's agreed upon procedures for OMB have been superseded in many instances by the insertion of the Council into the regulatory review process even after reaching our good-faith bargain with the Administration on regulatory review procedures.

Given these developments, I view this hearing as a first step towards a new set of regulatory review procedures that can provide the openness, balance, fairness and public accountability that the American public deserves from its government.

The second reason for this hearing is the growing record of the Council on Competitiveness. According to a March 22, 1991, memorandum from the Vice President, President Bush asked the council "to oversee the regulatory review process" run by OMB. According to press reports this has meant:

● private meetings between Council staff and business groups affected by agency regulations;

Council staff participation with agency officials in drafting specific regulatory provisions;

regular Council staff meeting with OMB staff to discuss agency rules; and Council staff calls to an agency head directing him not to release a regulatory proposal.

Regulations adversely affected by such Council activities include EPA Clean Air act regulations on power plant permitting, the EPA wetlands delineation manual, EPA standards on municipal waste incinerators, FDA regulations on nutrition labeling, HHS rules on laboratory certification rules, OSHA formaldehyde standards, biotechnology regulation, and FAA aircraft noise standards.

The Vice President says the Council is set up to solve interagency disagreements on Federal rules. But these are not small issues just concerning inter-agency disputes and bureaucratic wrangling. They deal with decisions potentially involving billions of dollars, thousands of lives and jobs, and hundreds of businesses.

In an effort to better understand the council's activities, Senators Levin, Kohl and I wrote to the Vice President, who chairs the Council, on April 17 of this year. We asked about the authority and operations of the Council. The initial Council response to our letter included a packet of press releases and did not answer our questions. It was not until the day before yesterday that we finally received a credible response to our questions. It took six months, repeated staff calls and meetings with Council staff, meetings with the Vice President by both Senator Levin and me, and the announcement of this hearing to finally get a response.

While the letter from the Council provides few details about the Council's operations, it definitely lays claim to broad authority over OMB regulatory review as well as the power to engage in regulatory review on its own.

For the record, let me note that I invited the Administration to testify today. We asked the Vice President, Council staff, and Council members, including OMB director Darman. All declined.

For the record, I also note that today's hearing is not meant to be a hearing on OIRA's authority under the Paperwork Reduction Act. In the coming year I intend to look more closely at OIRA and its activities under that act, something that I thought we had already worked out in good faith.

As to the substance of the issues we address today, let me say that I believe the President has the authority as the chief executive to coordinate agency decisions and set policy priorities for them consistent with statutory mandates. I also believe that the President, and the Vice President, require some protection so that advice and the development of Administration policy can take place free of public scrutiny. But I do not believe that either executive privilege or respect for the deliberative process should be used to:

hide back-door contacts with individuals powerful enough to have access to the White House;

substitute political opinion for the technical and scientific judgments congress delegated to agencies;

justify yet another regulatory review process by yet another group; or

justify agreeing to accountability for OMB regulatory review while simultaously trying to circumvent those rules through organizations like the Council.