What I am suggesting is a kind of mix of administrative agreement buttressed by a big statute representing about 85 percent of what this already does. Now, that kind of mix, I think, would promote the healthy purposes of this bill without compromising the legitimate interests in informal give-and-take within the Executive Branch.

I will be happy to answer any questions you may have.
Chairman GLENN. Thank you very much.

I have a letter here which Mr. Darman sent over to me yesterday from OMB. He generally says the bill does some good things, but then he says there are a couple of things that he has concerns about. One of them is the issue of making public internal Government communications, as opposed to making public Government communications with external or outside-the-Government people. He says, "The equivalent for Members of Congress would be a statutorily required public file on the substance of all communications Members have with constituents."

Do you see that as a like situation in comparison?

Dr. SUNSTEIN. No, because if we are talking about a public file of communications between agencies on rulemaking and outsiders, then the model under the Administrative Procedure Act is one of reasoned decision-making and publicity.

Chairman GLENN. Okay. But I understood from what you said before that you thought that if there was to be a file on communications between the Government and parties outside the Government, that having a requirement to release that information would be okay.

Dr. ŠUNSTEIN. Absolutely.

Chairman GLENN. But if it's internal, if it was between EPA and the White House, and their dickering back and forth over something, that that would be privileged and should not be made public. Dr. SUNSTEIN. I would say it might be privileged, and it is a very hard question. We are really in uncharted waters here. I think you would win in the Supreme Court. I predict this would be upheld in full. I am not confident of that. It would be a real fight. It's a new issue.

Chairman GLENN. The issue has been around long enough. There's not much to get excited about now. [Laughter.]

Dr. SUNSTEIN. Well, the reason, Senator Glenn, is that Congress has never really tried to require disclosure of internal deliberations. I think there is a lot to be said for that restraint.

Chairman GLENN. Yes.

How do you view the administrative sidebar agreement, as has been proposed over in the House? Mr. Darman says in another part of his letter that the President might veto a bill if it contained such an agreement in statute. If we put it in statute, do you think we would be upheld if there was a fuss about that? The President would undoubtedly veto it.

Dr. SUNSTEIN. I want to suggest that the discussion, it would be unfortunate if the discussion between Mr. Darman and this Committee turned into, "Yes, this bill," "No, not this bill." It's possible

to change this bill, I think, in minor ways that ought to satisfy some concerns that Mr. Darman has that are legitimate.

Now, if one wants to enact this, I am all for a statute rather than administrative agreement. A administrative agreement is a weird creature, and as you said, Senator, it's not permanent. So an administrative agreement seems to me inadequate.

If this bill is going to compel disclosure of internal deliberations, it would be very surprising if the President didn't veto it, and then one would have a real constitutional fight if it were passed over his veto.

Much simpler, it seems to me, would be minor amendments in this bill which would not go so far as to require disclosure of internal deliberations, and then see what happens. The bill would still do, I think, 80 percent of what it seeks to. It wouldn't do, maybe, that 20 percent in addition. That 20 percent in addition would be done by the administrative agreement without raising the constitutional fuss.

Chairman GLENN. Well, we will have to look at that again and see where we go with it.

We have two Executive Orders, 12291 and 12498, that we view as sort of creating a two-tiered regulatory process; one for the agencies pursuant to their statutory missions, and the other which we view here as having more of a political standard to it.

Do you view them that way? Is that an inconsistency?

Dr. SUNSTEIN. I hope OMB review doesn't mean the introduction of political considerations that are inconsistent with what Congress and the experts say. Keep in mind, these Executive Orders both say, "to the extent permitted by law," which means that to the extent consistent with what Congress has said and to the extent consistent with the vesting of the authority in the agency heads rather than OMB.

If OMB is introducing political considerations, understood as its own ideology, independent of what Congress wants, then that is illegality and something ought to be done about it. This bill represents a step in that direction.

My understanding of the OMB process, incidentally, is a little more complicated than this, that in some very public, isolated, important examples, OMB, especially in the first part of the Reagan Administration, was using its dislike of regulation to argue against regulations, even to block regulations that were a good idea.

But all the formal papers, even OMB's formal papers, say that that is unlawful and not permitted.

In other words, to say it more crisply, your description does seem to me to have some degree of accuracy, but it not consistent with the Justice Department's memorandum upholding these Executive Orders and it's not consistent with OMB's own understanding of its mission.

Chairman GLENN. Well, I think you were in the room earlier when I mentioned some of the things that happened to OMB early in the Reagan Administration that we all found very onerous, as David Stockman published his book and indicated what had happened over there. Picking a theme and then cooking the figures to

ate. So we hope we are onto a better day, which I think we are at this point. [Laughter.]

Dr. SUNSTEIN. Right.

Chairman GLENN. Let me come back to what we were talking about a minute ago. I am sure you are aware it has been suggested in testimony today and in previous hearings before this Committee that the level of technical and scientific expertise in OIRA is not high and that there is more such expertise at the various agencies. Let's assume for the moment that this is true. If we do not provide for greater disclosure of what goes on between the agencies, following their legislative mandates and OIRA, following its Executive Branch desires, doesn't that put at risk the true effectiveness of our system of checks and balances?

Dr. SUNSTEIN. Yes. The checks and balances are endangered also by requiring disclosure of tentative conversations within the Government. So there is a worry about checks and balances with congressional interference with the informal give-and-take of the proc

ess.

Now, I do endorse the suggestion in the previous panel of a broader look at OIRA's role. It might be that the reviewing function should be performed by some entity other than OIRA or that there should be some effort by Congress to assure that the people in OIRA know what they're doing.

But to require disclosure isn't the best way of bringing about expertise, because to require disclosure doesn't ensure that the people speaking are experts. A disclosure requirement won't make the desk officers at OIRA any more expert. It might scare them some. Chairman GLENN. Well, as the bill provides, it takes some of OMB's current authority and gives it back to the agencies, but still gives OMB the power to come in on issues where it thinks it's important and, in effect, overrule.

Do you think that is a good arrangement?

Dr. SUNSTEIN. No. I think the Justice Department's own understanding, I hope OIRA's understanding, and I would want this bill to make clear the understanding, is that OIRA has no authority to block a regulation ever-not once. The reason is that it is up to Congress to decide, subject to presidential powers of supervision, who is going to be making these decisions on the environment or occupational safety.

It is for the Secretary of Labor, not for OIRA. OIRA can supervise and talk, and if the President doesn't like what the head of EPA is doing, what the President can do is fire the head of EPA. But even the President can't make the decision because Congress has allocated the decision to the head of EPA.

Chairman GLENN. Then, as you would see it, the agencies would have full authority to regulate as they saw fit and the only rein on that would be congressional oversight?

Dr. SUNSTEIN. That is the only coercive rein. There is a rein in the form of the fact that the President can fire these people and in the form of supervision and discussion by OIRA. But OIRA has no authority to say "don't issue this regulation" or "do issue that regulation." Congress has vested the authority in the head of the EPA.

The court can always check for arbitrary decisions that produce decisions inconsistent with what Congress has said.

Chairman GLENN. Well, we don't take that outside the Executive Branch of Government. You used EPA as an example, and I should note that we are about to upgrade the EPA to Cabinet status. EPA is part of the Administration and part of the Executive Branch. Dr. SUNSTEIN. Right.

Chairman GLENN. When we pass a law here, we give it to the Executive Branch to execute.

If we are to oversee every rule and regulation that comes out, and do it in a timely and appropriate fashion, I couldn't even begin to estimate how many additional people we would need here on Capitol Hill. I don't think we're likely to do that.

Dr. SUNSTEIN. Well, Senator, I am very enthusiastic about OIRA's role as a coordinator and regulation of the regulators. Let's draw a distinction between OIRA blocking regulations because it doesn't like them, and OIRA coordinating and supervising, giving advice and guidance, setting out general guidelines. That's just fine. I am all for that.

I disagree with the OMB Watch people who think OMB should be cut out of the picture. I think that would be a real mistake.

OIRA's own conception of its role, as stated everywhere, is that it has no authority to say no or yes, it only has authority to consult. In Executive Order 12291, during the period of great enthusiasm by President Reagan for Executive oversight of the regulatory process, even President Reagan's Department of Justice said, rightly, that OIRA may not displace the agency's decision.

So, what I am suggesting is-I think now I am speaking really consistently with what the Justice Department and OMB now think-there is no authority to block. Jim Miller got in big trouble for saying there was authority to block, because his Justice Department said, "You don't have that power.'

I think OMB and the Department of Justice think OIRA has authority to coordinate, to give guidance, to give guidelines, to consult, to ask for reconsideration. But the ultimate power of decision is for the agencies, not for OMB.

Chairman GLENN. I think the way it has worked, it is alleged, is that OIRA has been able to, in effect, block what they didn't like by asking for more information, sending it back to the agencies, and keeping the studies going. In effect OIRA, de facto blocked the regulations.

Dr. SUNSTEIN. Right. And that is illegal.

Chairman GLENN. Yes.

Okay. Any others? Does staff have questions?

[No response.]

Chairman GLENN. Thank you. We may want to submit some additional questions to you. It has been a long hearing this morning. Thank you all for your patience.

The hearing will stand in recess until tomorrow morning at 9 a.m., same subject, same place.

REAUTHORIZATION OF OMB'S OFFICE OF
INFORMATION AND REGULATORY AFFAIRS

THURSDAY, FEBRUARY 22, 1990

U.S. SENATE,

COMMITTEE ON GOVERNMENTAL AFFAIRS,

Washington, DC.

The Committee met, pursuant to notice, at 9:05 a.m., in room SD-342, Dirksen Senate Office Building, Hon. John Glenn, Chairman of the Committee, presiding.

Present: Senators Glenn, Bingaman, and Roth.

OPENING STATEMENT OF CHAIRMAN GLENN Chairman GLENN. The hearing will be in order.

Today is the second day of hearings on S. 1742, the Federal Information Resources Management Act, a continuation of yesterday's hearing. Senators Bingaman and Lieberman are sponsors of this measure. It is an ambitious and constructive effort to build upon the Paperwork Reduction Act of 1980 and provide a new authorization for the Office of Information and Regulatory Affairs, OIRA.

We have been asking our witnesses to give us their views of what works, what doesn't, and what recommendations they have. As I mentioned yesterday, when President Carter signed the 1980 act, he called it a law to, "regulate the regulators," and that was part of its intent.

We have heard a lot about the abuses that occurred in the past 9 years. The allegation has been that the power of OIRA has been used to push an ideological agenda instead of good information management. The Supreme Court decision yesterday buttresses the argument that the Paperwork Reduction Act was used by the Reagan administration to extend the power of OMB in ways not intended by Congress, and in a direction making it more difficult to establish health and safety protections for workers through regulation.

Senator Bingaman's bill is an attempt to meet all the concerns and improve the way the executive branch attempts to minimize paperwork demands on the public, which was the PRA's basic purpose. It is a complex subject, and I would commend the reading of the morning papers to you, if you haven't already seen them. Both the New York Times and the Washington Post have extensive front page articles about the Supreme Court's ruling yesterday, which looks as though, at least on the surface, that it really cuts back on some of the authorities that OMB has taken for granted up to now.