▶ 0:18:57e e
▶ 0:19:52for the administrative State and look for ways that we can reform the Regulatory and administrative law to work better for everyday Americans it's no secret that regulatory burdens have reached an all-time high Regulatory Agencies create rules with the force and effect of law and the number of rules that agencies create is overwhelming in the final year of the Biden Harris Administration unelected bureaucrats finalized over 3,000 rules it's an average of eight regulations
▶ 0:20:22per day by contrast during the same period Congress passed almost 150 laws in other words the executive branch issued mandates with the force of law over 20 times more often than the legislative branch according to the competitive Enterprise Institute these regulations impose a total estimated annual cost of 2 billion excuse me 2.1 trillion or more than than $15,000 per American household some of my colleagues on the other side
▶ 0:20:53may claim that because Congress cannot pass laws agencies feel empowered to take over Congress was designed to require lawmakers to think deeply about these decisions Congress was also designed to be accountable to the voters if our constituents do not like our decisions then we are voted out of office un elected bureaucrats by contrast are not politically accountable this lack of accountability shows when agencies make these rules they not only
▶ 0:21:23act as a legislator for the country but often as prosecutors and judges through the admin ministrative process agencies often bring enforcement actions in their in-house administrative courts the same agency that makes the rules also decides to sue if a person broke them then to prove that a person broke the rule the agency tries the case before its own in-house judge in so-called quote unquote independent agencies Commissioners who directly prosecute the
▶ 0:21:53case also act as judges on appeal the whole system defies logic at this point the administrative system is set up to regulate the American people into submission which is entirely at odds with the principles that this country was founded on our Founders deliberately split the making of laws enforcement of laws and Judgment of laws into three co-equal branches of government our Founders were convinced and concerned about exactly the same centralized
▶ 0:22:23power we now see in the administrative state it does does not have to be this way last Congress to the Judiciary Committee marked up numerous bills aimed at reforming the administrative State the Reigns act the midnight rules Relief act the pro it act the separation of powers restoration Act and the one agency act just to name a few all these bills were aimed squarely at the topic we are here to talk about today reigning in the administrative state I'm proud of the work this committee undertook last
▶ 0:22:54Congress and I hope for the sake of the American people that we turn these proposals into law this Congress my colleagues on the other side of the aisle routinely oppose all attempts by Congress to reign in the administrative State they also criticize president Trump for taking steps to control the administrative State they ignore that the constitution makes the president the leader of the executive branch they will do everything in their power to protect the unelected bureaucrats in the administrative State
▶ 0:23:24why because these unaccountable bureaucrats do the bidding of my colleagues in the minority this is true even though Americans rejected their views in the most recent election today we have an opportunity to hear from Witnesses who have deep experience in the regulatory area Miss Wad and Mr Smith are entrepreneurs and deal with the crushing weight of regulations every day Mr Smith has even faced the administrative court system and was
▶ 0:23:54forced to pursue a case all the way to the Supreme Court to vindicate his cont constitutional rights Dr mclin is an expert in Regulatory and economic analysis and has written extensively on how damaging regulatory burdens are on the economy these Witnesses are perfectly prepared to supply members of the committee with the required information to better inform us as we work on possible solutions and consider the proposals that have already been introduced
▶ 0:24:25I want to thank the witnesses for appearing before us today and look forward to hearing what each of you has to say on the topic I now recognize the ranking member Mr Nadler for his opening statement thank you Mr chairman Mr chairman holding a hearing today on quote reigning in the administrative state is a bit like rearranging the deck chairs under the Titanic
▶ 0:24:55as we speak Elon Musk and his banded near teenaged accomplices are systematically working their way through the executive branch knocking down agency after agency while undermining the rule of law and shredding the Constitution along the way musk and his team have unprecedented access to our most sensitive and personal data they have gained access to extremely sensitive tax information at the IRS highly
▶ 0:25:25restricted government records on millions of federal employees and their families from the office of personnel management and personal data related to health insurance plans workplace safety and health investigations child labor and more from the Department of Labor and this is just what we've learned through news articles because all of these actions have been taken without any transparency to the American people musk and his team have access at least 18 agencies and untold amounts of sensitive
▶ 0:25:55data that is attractive to Bad actors here and abroad but musk and his assistants are not just accessing this data they are feeding it into AI models downloading it onto commercial servers and possibly taking it off premises because musk and his team can also change our government systems not only is the personal information of millions of Americans at risk but also the systems that ensure our safety and core government functions for example
▶ 0:26:26musk and his team have accessed core systems at the Federal Aviation Administration experts have War warned that quote even a small system distruption could cause Mass grounding of flights a halt in global Shipping or Worse down ples officials at the FAA warned that going onto these systems into these systems without an in-depth understanding could result in death and an economic harm to our nation nevertheless musk
▶ 0:26:56indicated that the Doge team will aim to make quote rapid safety upgrades to the air traffic control system just in the past few weeks we have seen what happens when mistakes are made in our air traffic control system when a Blackhawk helicopter ran into a commercial flight resulting in dozens of deaths musk and his team are opening us up to more deaths and critical economic harm but Elon Musk is not content just to cause massive disruption and expose us to greater risk
▶ 0:27:27no he's also using his unfitted access to our agencies and our data to benefit himself for example the Department of Labor was investigating workplace abuse allegations at three musk owned companies the boring company SpaceX and Tesla so musk and his team invaded the agency and gained access to their information on current and past investigations just days before they got access to the Consumer Financial Protection Bureau musk finalized
▶ 0:27:57the with visa to process peer-to-peer payments for a wallet feature on X because the cfbp policies I'm sorry because the cfbp PO polices such Payment Systems the data musk and his team access could give his new X wallet feature competitive advantage in the market and as a kicker the Trump Administration instructed the cfpb to Halt its work thus ensuring that there's no one to keep
▶ 0:28:28musk's new payment system from exposing personal data or enabling fraud never mind that the cfbp has produced almost $2 billion in consumer relief and has put Millions back in the pockets of Americans the agency at information musk needed so he got it the agency would have enforced the law with a likely impact on his wallet so the agency's work was halted instead serious concerns have been raised about whether the people accessing this data
▶ 0:28:58many of them barely passed College have the appropriate training and vetting necessary to handle such sensitive data that is an active data breach on a scale we have never experienced before but this time the threat is coming from inside the house imagine what domestic domestic criminals or foreign adversaries could do if they got their hands on this information this is a clear and present danger and yet our Republican colleagues do nothing in addition to these structural attacks
▶ 0:29:28on the Executive Branch the Trump Administration is also class reclassifying civil servants as political employees who can be replaced with flunkies beholden to Donald Trump imposing loyalty tests on National Security officials and encouraging tens of thousands of employees to resign with premises it has no authority to make as a result it is hollowing out the workforce and the Decades of experience and Technical expertise that comes with it without any authorization
▶ 0:29:59from Congress the Trump Administration has also taken several other actions that have thrown the federal government into chaos it attempted to impose a quote temporary funding freeze unquote across much of the federal government that a judge is already ruled unlawful it fire duly appointed Democratic members of independent agencies to deprive these agencies of a working Quorum and essentially prevent them from fulfilling their missions and to ensure that no one is able to hold the Administration accountable
▶ 0:30:29from within the Executive Branch the president fired more than a dozen inspectors General without following the statutory requirements for doing so these actions are as unconstitutional as they are dangerous while we witness these incursions on the rule of law and the Constitution my Republican colleagues do nothing in fact they cheer on Elon Musk as he usurps Congressional Authority and arrogates unprecedented power to himself when Joe Biden was President
▶ 0:30:59we heard stirring speeches from our Republican friends about the need to assert our article one Authority we were told that the Biden Administration was guilty of dangerous overreach when it attempted to help people drowning in student loans or protected our communities from gun violence or helped Shield consumers from corporate abuse but now that is ancient history now they aid and to bet Shadow president musk while he bulldozes his way through the administrative State un edited to any Congressional statute
▶ 0:31:30or auth or authorization there is no check and no balance from the Republican Congress just feckless inaction because it serves their purposes they know that undermining the critical protections provided by our agencies would be deeply unpopular so they are content to abdicate their responsibilities and let Elon Musk do their dirty work I urge my Republican colleagues to stand up for this institution and for the people they represent
▶ 0:32:00I yield back gentleman Yi's back I now recognize chairman of the full committee Mr Jordan for his opening statement thank you Mr chairman instead of stopping the stupid spending Democrats attack the guy who's exposing it I think the taxpayers of this country would just as soon we stop spending their money on dumb things like at what was what was the example from usaid some transgender comic in Ireland spending money on Burton Ernie and Big Bird on Baghdad TV I think they would prefer we not do that
▶ 0:32:31Elon Musk is doing exposing the in the federal government exactly what he Expos at Twitter when he purchased Twitter what do we find out there big government was pressuring big Tech to censor Americans and you don't have to take my word for it we had the Twitter files oh and we also had someone else in big Tech send a letter to this committee and tell us exactly what they were doing Mark Zuckerberg said the Biden Administration was pressuring us to censor we did it we're sorry we won't do it again
▶ 0:33:01told the whole world that in a letter to this committee so Elon Musk is now doing that for the federal government we think that's a good thing and understand the fundamental difference the left has with us conservatives Democrats believe it is the career elected bureaucrats who are supposed to run the country we don't think that's the way it's supposed to work we actually think it's the people who put their name on a ballot who get elected by we the people who make the decisions and the guy who got 77 million votes on November 5th says he wants Elon Musk working for him the elected member who heads the executive branch
▶ 0:33:31working for him every bit and much as the federal employees the people in treasury who were supposed to have all the answers or in usaid who be the career officials working for him to expose stupid things our government is spending money on and the Democrats are going to attack that guy go ahead go right ahead but we know the real consequences of having this administrative State these bureaucrats run things we got two witnesses here who've lived it Miss Wade and Mr Smith they're here to tell about how
▶ 0:34:01that has impacted their business so I appreciate the chairman having this hearing this is exactly the kind of hearing we have to have and I appreciate the work the president and his team are doing to expose the stupid things Bure bureaucrats spend the hard-earned money the people we get the privilege of representing I yield back gentleman yields back now recognize a ranking member of the full committee Mr Rasin for his opening statement thank you very much uh Mr chairman and thank you to the ranking member of the subcommittee
▶ 0:34:31Mr Nadler uh and thank you to my colleague chairman Jordan thanks to all of our Witnesses for being here with us today um I was surprised to hear my friend from Ohio uh talking about a a transgender comic book from I can't remember which country but uh if there's a form of government expenditure taking place that we have a problem with isn't that why the Cong congressional oversight function exists don't we have a whole oversight committee which you serve on which I've served on
▶ 0:35:01which can do that do we really need to hire a a fourth branch of government called Elon Musk to go out and do it for us we're about to enter into a budget process right now we can deal with it ourselves Mr chairman last 22 days Donald Trump's billionaire government has taken a wrecking ball to public Institutions and the rule of law in America the agent of chaos is Elon a quote special government employee purportedly
▶ 0:35:32working on technological reform more crucially he's a big businessman who's floundering Tesla sales in Europe create huge financial pressures for him according to the business press even more crucially he's a government contractor who collects billions of federal taxpayer dollars every single year and yet has not filed a single employee ethics disclosure form as required by law he has accessed not only computers controlling his own billion
▶ 0:36:02doll payments from us the people but to computers containing his Rivals contract bids their contracts their invoices in their payment systems yet he has not shown us a single conflict of interest waiver form for these multiple egregious apparent conflicts of interest he and his mutant teen age racist computer hackers have taken possession of financial
▶ 0:36:32payment systems at the United States Department of Treasury meaning data access to the private Private Financial records of every American citizen every member of Congress every Federal prosecutor every regulator who's supposed to be looking at what his business does every private lawyer and every federal judge who they're now calling for the impeachment of because dare to speak up for the rule of law what could go wrong with this
▶ 0:37:02situation fortunately we do still have an article three a working Federal Judiciary which has issued no fewer than 12 injunctions in three weeks 12 temporary restraining orders or preliminary injunctions in three weeks against the illegality of this Arrangement including an injunction against any further unlawful seizure possession and Corruption of Americans
▶ 0:37:32private financial data now the Elon Musk cyber raid against our data and privacy infrastructure has set the stage for the administration's outrageous and unprecedent violation of congressional lawmaking and spending power that's what the first hearing of the subcommittee should be about Mr chairman the blatantly illegal and quickly reversed freeze on billions of dollars in federal grants already appropriated
▶ 0:38:03by the United States Congress programmed by the agencies contracted for by government lawyers and in the proper pipeline for payment the flagrantly illegal efforts to not pay federal workers and honor our contracts for work already rendered to condition federal funds on totally madeup restrictions never voted on much less approved by Congress in the scandalous effort to dismantle and neutralize
▶ 0:38:33entire federal agencies like Noah usaid and the cfpb spitting in the face of congressional power enactments and Appropriations an Appropriations Act is a federal law like any other law like the law for example against violently assaulting federal police officers an Appropriations Act is not a or a bargaining maneuver with executive branch it is a law it must be enforced
▶ 0:39:04this Administration needs a constitutional refresher course Mr chairman the Preamble of the Constitution says we the people in order to form a more perfect union establish justice ensure domestic tranquility provide for the common defense promote the general welfare and preserve to ourselves and our posterity the blessings of liberty do hereby ordain and establish the constitution of these United States and the very next sentence of the constitution establishes
▶ 0:39:34in one the Congress of the United States possessing all of the legislative power some of my colleagues have taken and saying we're three co-equal branches I I beg to differ we're not three co-equal branches not at all first of all co-equal is not even a word right that's like extremely unique it doesn't mean anything so they're saying three equal branches I don't think so read James Madison The Federalist Papers Congress is the predominant Branch
▶ 0:40:05Congress is the lawmaking Branch it's Congress check out Article 1 Section 8 all of the powers we have to regulate commerce domestically and internationally to pass the budget to appropriate money Congress does that and then Article 1 Section 8 Clause 18 and all other powers necessary and proper to the execution of the foregoing powers and after all of that you get to four short paragraphs in Article 2 my friend Mr Jordan has been quoting the first sentence all over TV he thinks that he that he
▶ 0:40:35somhow as a knockout argument he says the executive power shall be vested in a president of the United States of America yes indeed Mr Jordan that's where the executive power is vested but what is the executive power the core responsibility of the president of the United States is to take care that the laws are Faithfully executed right not to not violated not trashed not Rewritten to take care that the laws are Faithfully executed
▶ 0:41:05which is precisely what's not happening today as they say oh well uh Elon Musk he's got all the power of the president Donald Trump himself could not be doing what Elon Musk is doing in Washington today he evaporate Aid he can't nullify the cfpb he can't destroy an agency set up by us on a bipartisan basis in Congress nobody in the executive branch
▶ 0:41:35has that yeah the president is on top of the executive branch but we're the lawmaking power and who sorts out the conflict if there's a conflict the courts do and what have the courts been saying they've they've said a dozen times in three weeks that they're violating the Constitution of the United States and the laws passed by Congress that's what's going on in America today that's what we should be having a hearing about not some Eerie academic uh conversation about
▶ 0:42:05the administrative State uh whatever they mean by that I yield back Mr chairman gentleman yields back U without objection all the opening statements will be included in the record we'll now introduce today's Witnesses Dr Patrick mlin Dr mclin is a research fellow at the Hoover institution at Stanford Stanford University and a visiting research fellow at the Pacific Legal Foundation he authored more than 30 peer reviewed studies on a variety of topics including regulatory
▶ 0:42:36economics administrative law and international trade Mr Patrick Smith Mr Smith is the execu chief executive officer and founder of axent Enterprise axen offers a variety of products and services mostly law enforcement and Public Safety entities these products and services include taser devices body cameras deescalation training and evidence management and Reporting software Miss mugat wad Miss wad is the co-founder
▶ 0:43:06and prospera of prospera Africa a governance platform for special economic zones and a senior fellow at the atlas Network an organization of African free market think tanks she was named by Forbes as being one of the 20 youngest power women in Africa I get that right a young Global leader by the world economic forum and is a Ted Global fellow Professor Steven vladic Mr vladic is the
▶ 0:43:36Agnes Williams cesa Centennial professor of federal courts at the Georgetown University Law Center Professor vadc focused on federal courts the Supreme Court National Security Law and Military Justice we welcome our Witnesses and thank them for appearing today we will Begin by swearing you in with you please rise and raise your hand do you swear or affirm under penalty
▶ 0:44:07of perjury that the testimony you are about to give is true and correct to the best of your knowledge information and belief so help you God let the record reflect that the witnesses have answered in the affirmative thank you please be seated and please know that your written testimony will be entered into the record record in its entirety accordingly we ask that you summarize your testimony in 5 minutes Dr mclin you
▶ 0:44:38begin microphone microphone sir thank you thank you chairman Fitzgerald ranking member Nadler and members of the committee thank you for the opportunity to testify today my name is Patrick mclaughin and I am a research fellow with the Hoover institution and a visiting research fellow with the Pacific Legal Foundation I appreciate the chance to discuss how regulatory reform can promote economic growth encourage Innovation and reduce unnecessary burdens on businesses and consumers
▶ 0:45:09let's begin by acknowledging that regulations can play an essential role in achieving policy objectives such as protecting public health and the environment but when regulations pile up over time without systematic review this regulatory accumulation has costly consequences compliance becomes more complex businesses face mounting overhead costs and entrepreneurs struggle to navigate The Maze of over 1 million regulatory restrictions that are currently on the books projects like
▶ 0:45:39the reg data project which uses AI to quantify various aspects of Regulation and makes the data publicly available have permitted economists to study the effects of regulatory accumulation and its counterpart deregulation and I'd like to review some of those findings today first I want to emphasize the magnitude of the economic effects of regulatory accumulation or the other side of the same coin deregulation in my written testimony I cited a study that I co-authored published in 2020
▶ 0:46:10in the economics Journal Review of economic dynamics that that study found that regulatory accumulation the buildup of rules over time distorts business Investments expenditures on things like research and development new machinery and new buildings these are the same activities that in the long run tend to increase productivity and drive economic growth we found that on average federal regulatory accumulation slowed overall GDP growth by 8/10 of a percentage point
▶ 0:46:40considering GDP growth is in the US typically 2 to 3% annually losing nearly one percentage Point represents a massive loss other Studies have found even larger effects second I want to highlight the regressive effects of regulatory higher levels of Regulation are associated with increased levels of poverty and income inequality specifically a 10% increase in Federal Regulations is associated with a 2.5% increase in the poverty rate and a 4%
▶ 0:47:10increase in income inequality when you dig a Little Deeper it's easier to understand why regulations affect households directly in many ways even when those regulations are targeted at businesses for example regulations typically increase the production cost of goods and some of those costs are of course passed on to the consumer in the form of higher prices one study found that a 10% increase in total regulation leads to a nearly 1% increase in consumer prices furthermore the
▶ 0:47:41study found that the effects of those price increases are regressive that is the poorest income groups experience the highest proportional increases in the prices they pay regulations also affect households by diminishing their economic opportunities melt multiple Studies have found that higher levels of Regulation are associated with fewer total firms and lower levels of employment finally despite the fact that I'm an economist I want to offer a positive message we have seen
▶ 0:48:11that these negative effects caused by regulatory accumulation can be reversed several States and provinces of Canada have already begun the hard work of reassessing existing regulations to see which ones truly benefit the public versus which ones outdated redundant or imposed costs that can't be justified by the benefits by identifying and removing regulations that no longer serve their intended purpose we can free up resources for more productive uses deregulatory efforts seem particularly
▶ 0:48:42effective when coupled with tools like regulatory budgeting or sunsetting the province of British Columbia along with several other states have experimented with tools like this and in British Columbia they were one of the first jurisdictions to use regulatory budgeting to deregulate at and they cut 40% of regulations in a three-year period Then they Capp future regulatory growth with a one in one out type regulatory budget the result was a sustained boost to economic growth a recent study found that the province's
▶ 0:49:12growth rate increased by just over one percentage point because of the deregulatory efforts in closing deregulation has the potential to invigorate the economy spur Innovation and lessen the disproportionate burdens placed on smaller firms and vulnerable populations thank you and I look forward to answering any questions you may have thank you Dr McLaughlin Mr Smith you may begin thank you chairman Fitzgerald ranking member Nadler and the entire subcommittee
▶ 0:49:42for having me here today it's an honor my name is Rick Smith I am the CEO and founder of a company called axon we're an American company in Arizona that employs over 4,000 people today I appreciate the opportunity to testify because the unchecked power of the government led to Serious consequences for my company for my employees and deeply for me personally no bureaucracy can be allowed to act as prosecutor judge and jury without checks and balances and oversight many fine Americans
▶ 0:50:13work at the FTC with the best of intentions yet the agency wields unchecked powers in ways that can Crush Innovation stle economic growth and deny basic constitutional rights this overreach was not the intention of our Founders the work of this committee is critical to ensuring that all Americans do receive the due process protections they deserve and are guaranteed under Constitution I started axon over 30 years ago in a garage with a dream to bring Captain Kirk's phaser to
▶ 0:50:43life to provide a real alternative to deadly force we can do better than bullets when I first introduced taser technology people laughed at the idea no one thought they would work except my dad he put in his life savings I nearly wiped him out at the edge of losing everything after seven long years we finally turned the corner and today you see our yellow taser devices on almost every police officer in America they've been deployed millions
▶ 0:51:13of times and together with the body warn cameras another technology that we invented they're used across the globe from the London met to Sydney Australia I've challenged my team to go further we've published a public moonshot goal to cut gun deaths in policing 50% over a 10-year period We believe We can do this through more effective less lethal Alternatives and changing police through more advanced VR training these aspirations at our mission were severely disrupted when we came
▶ 0:51:43up against the unfettered power of the FTC in May of 2018 we acquired a small failing body camera competitor that was losing a million dollar a month competitor after competitor passed on this deal for 18 months they tried to sell the company we were the buyer of Last Resort and we bought this money losing company because it saved critical Public Safety agencies including the NYPD from serious disruptions if their body uh camera programs were allowed to fail the $13 million
▶ 0:52:13price we paid was well below the legal threshold for FTC review what followed was months of requests for information mountains of legal filings and a growing sense of disbelief that this money losing deal had drawn such a disproportionate government response we offered to write off our entire investment in fact we offered to put another $13 million in cash effectively doubling our losses shockingly we were told this was not enough the FTC demanded
▶ 0:52:43that we also hand over our most valuable assets first license all of our intellectual property creating a full clone competitor then to hand over our most valuable customers to be chosen by the FTC and most alarmingly we were asked to write a blank check this was such an outrageous request our lawyers said hold on did you say blank check and the government said Yes you heard us correctly you will already blank check you will fund this new competitor until we tell you you are
▶ 0:53:14done I learned that over the previous 20 years the FTC had won 100% of cases in its in-house form over our dinner table at home I shared this terrifying situation with my family and my Elementary School twins said hey Dad we're learning about the Constitution and the Declaration of Independence the colonists said the courts back then were beholden to the king and so they set up a new country with the Constitution where the courts must be independent this is unconstitutional you should sue them from the mouths of babes I
▶ 0:53:44was like wow this is so clear and obvious that is what we must do and so we preemptively sued the FTC and federal court challenging their constitutionality and saying hey just sue us here where we've got a shot to tell our story in April 2023 after 4 years of disruptions to our business the Supreme Court ruled unanimously 90 in our favor allowing our challenges to proceed in federal court in response the FTC dismissed its complaint against us rather than defend its outrageous actions and demands against us in front of an
▶ 0:54:14impartial judge as our 90 decision in the Supreme Court demonstrates this is bigger than one company or one case every American whether an individual small or large Corporation should have the right to a fair trial before an independent judge before the government can strip them of their livelihood their property or their rights it's a Bedrock principle of Justice thank you for your time and I look forward to answering your questions thank you Mr Smith Miss wad uh you can begin now good morning
▶ 0:54:45and thank you Mr chairman for having me distinguished members of oh sorry can you hear me now all right good thank you again Mr chairman for having me here and for the disting members of the committee for this opportunity to testify today this matter is a personal matter to me and I will explain why my name is magat Wade I'm a sagales American entrepreneur I've been living in the US since 1998 and I became a US citizen in 2018 I'm also an author
▶ 0:55:15of the heart of a cheetah a book that talks about African entrepreneurship and prosperity it has been uh addressed it has been endorsed by Noble Lord um like Vernon Smith develop Vel mment Economist as Bill easterly and whole froods founder John Mackey I am a co-founder of Prosper Africa an initiative that is out there to create something similar to what you guys would call here the freedom cities in America and I have been doing business obviously both um in Africa as in the US
▶ 0:55:45in the US in the states of California Texas and um New York Mr Raskin your words earlier really really worried me and I will tell you why when you say we are here and we should be here to talk about Mr Elon Musk and all the unconstitutional things that he's doing and you said we shouldn't be here to talk about regulation or anything like that first of all I want to say then why did you have me here as an entrepreneur my time is valuable I came here because I thought we were going to talk about reg
▶ 0:56:15regulatory State and why it matters so you need to make up your mind on that and I'm deeply offended by what you said there and furthermore I would tell you why I came when I was invited to speak on this because right now everybody in this country these issues of regulation of a regulation has been made into a part a matter of partisanship are you from the left or are you from the right I don't care because where I come from the overregulation causes us
▶ 0:56:46to be where we are my continent Africa is the poorest region in the world today because it happens to be the most over regulated region in the world so if you don't see CeCe a value of over regulation if you need and want to wait until this country becomes like most African countries I don't know I love this country and I don't want to see it go down there so and also just so you know what does overregulation mean for regular people it means death death literally people are packing themselves
▶ 0:57:16into little fishermen's boats trying to leave Nations that are over regulated therefore no jobs and then they have to leave and go seek jobs some else place Someplace Else by the way English is only my fourth language so when I trip on words please excuse me you all so as a consequence of this perspective of mine I'm aware of the fact that even in the US it is difficult for a business person to be fully compliant with all the laws in Sagal I usually have to pay lawyers to make sure that I'm compliant all the way
▶ 0:57:46it costs a lot of money and a lot of time and makes me very non-competitive Everything I Do I Do It for the sake of afan prosperity and there is no sense in which anyone can call me a greedy business person and yet most of us are subject to the potential of punitive of a punitive uh Power of public officials and as an African immigrant I'm very familiar with many informal
▶ 0:58:16small businesses that are ran by other Africans in the US of course the the biggest one of them for me at least is occupational license you see this hair of mind the lady who breeds it most of the time it's going to be an immigrant lady who got here she's not doing anything criminal or anything like that but her business is going to be illegal because of all the laws and the licenses she has to get in order to do this something that she learned to do since she was 12 back home and here she's here sustaining herself not touching the welfare or anything like that this is paying her bills and the bills of her children
▶ 0:58:46and the people that she had left home so then what are we people that should be penal are those people should those people be penalized I don't think so uh to take a different issue Austin where I live right now the housing prices were rapidly Rising due to excessive land use regulations until recently last year I testified for the Texans for reason reasonable solutions to deregulate land use regulations and they've met really great progress in reducing the growth in housing cost we estimate that there is between 30
▶ 0:59:16to 40% of the housing cost that are due to excessive regulations in some areas when I moved to the US I lived in San Francisco I loved that City yet I can't live in that City anymore for what that city has become and it primarily has to do with the high cost of housing due to the regulations take another example my husband is an education entrepreneur who was a leader in the micr school uh space before it became a Fame if you want a new Renaissance in education you need to minimize your regulations pertaining to New School
▶ 0:59:46creation so smaller uh education entrepreneur can also get in the game and challenge the status quo I ask again do we really want to be um if he entrepreneur Educators Miss Miss wad your time your time is expired we're going to have some follow-up questions obviously though so but thank you very much thank you Professor vadic you're recognized for five minutes thank you Mr chairman uh thank you for the opportunity to testify this morning I must confess to at least a modum of surprise that of all the
▶ 1:00:16topics for this subcommittee to investigate at this moment in American history it has picked this one certainly we can all agree that one of congress's and this committee's most important constitutional functions as holding the executive branch to account I would thus happily celebrate if not affirmatively endorse well-conceived efforts to reign in the executive branch especially in response to specific abuses of St existing statutory and constitutional Arrangements perhaps like the one summarized by my fellow Witnesses but given what has transpired over the first three weeks of the new Administration a hearing
▶ 1:00:47focused on the proposed legislation being discussed this morning and not on what is happening across this city and across this country as we sit here today strikes is far more than just a missed opportunity indeed if this committee was genuinely interested in reigning and abuses by the executive branch it strikes me that there are at least four distinct and far more pressing areas to which it should focus its attention first the first three weeks of the second Trump Administration has witnessed a more systemic and sustained assault on congress's constitutional Primacy with respect to Appropriations
▶ 1:01:17and spending than anything we've seen before it would take more time than I have this morning to list all of the examples but we're seeing the executive branch repeatedly violate clear statutory spending requirements and prohibitions whether under the empowerment Control Act various statutes setting up in funding the usaid NIH Appropriations writers or otherwise the Constitution is unusually clear about Appropriations Mr chairman contrary to the comments made by chairman Cole last week these statutes are all laws that have binding teeth for purposes of the supremacy clause
▶ 1:01:48indeed uniquely with respect to Appropriations the Constitution expressly requires that Congress play the primary role in Federal policymaking in each of these areas then the executive branch is not just breaking the law it is usurping this body's single most important policymaking power second we've also seen unprecedented efforts by the president to assert control over the entire bureaucracy and quite overtly to do so in the name of loyalty to the president rather than Fidelity to the Constitution third and speaking of unprecedented we've seen the president use
▶ 1:02:18the guise of an office located within the executive branch to take unitary control over virtually all of the federal government spending and personnel management functions again apparently in violation of an array of statutes limiting who may have access to those systems and for which purposes finally I'd be remiss and not also noting the various actions this administration's undertaken against private persons that flatly contravene existing statutory and constitutional protections such as the attempt to narrow the scope of Birthright citizenship a right protected not only by the 14th Amendment
▶ 1:02:48but by a statute Congress enacted in 1940 other examples abound but I suspect the point has been made in 3 weeks we have seen a more sustained assault by the president on this institution's constitutional prerogatives than we've seen in the first 250 years of our Republic to be sure we've also seen the federal courts pushing back against these abuses in many cases aggressively but the courts can't and shouldn't be expected to go It Alone some have tried to defend this rash of unlawful behavior on the ground that the executive branch is rooting
▶ 1:03:19out fraud and other abuses of course if that were actually the goal we should have expected some discussion of the Department of Defense but at a more basic level this committee and Congress as a whole has spent much of the last 160 years setting up sophisticated accountable inner Branch mechanisms for holding the executive branch to account in precisely these spaces it's not like fraud waste and abuse became problems only over the last four years that includes inspectors General it includes doj offices designed to root out corruption and others rather than lean in lean
▶ 1:03:49into those checks the president's response has been to fire most of the inspectors General including those he appointed and the head of the government agency that protects whistleblowers maybe there's an argument that this is good policy I'm skeptical but that's an argument that should be made to this body in its consideration of new legislation not through repeated assertions of executive Fiat the result of the executives assertion of authority and congress's abdication of responsibility has been not just an unprecedented breakdown in the separation of powers but a growing and seemingly unending list of negative
▶ 1:04:19real world impacts on everyday people who may no longer have access to experimental medication who may no longer receive timely storm warnings who may no longer be able to receive the government subsidized Health Care Congress has provided for more than 60 years and so on even farmers who signed contracts with the USDA to be reimbursed for modernizing their infrastructure with guarantees that the federal government would cover part of their costs are now on the hook for expenses they can't afford and projects they can't complete everywhere you look there are stories like this one this is not just an administrative
▶ 1:04:49law crisis Mr chairman it is a government credibility and credit crisis against that backdrop it strikes is more than a little ironic that this committee believes the most important thing it Canon should be discussing today is whether to enact the legislation being proposed it seems to me instead that these topics deserve more of our attention and I would look forward to participating in those discussions but having this hearing sends exactly the wrong message about the institutional autonomy constitutional Authority and Democratic responsibility of the legislature the branch of the government that the constitution quite deliberately put
▶ 1:05:20first thank you Mr vladic Professor vladic uh we'll proceed now under the fem minute rule with some questions I'm going to recognize myself for 5 minutes uh Mr schmith according to uh what you just told us in your testimony accent spent approximately $20 million defending its acquisition of viw against FTC um which was more than the acquisition price itself I guess might is the way you described it but you were willing to spend that money because you believe that uh every American
▶ 1:05:50has the right to due process so why is due process so important to you as a business owner having lived through it and experience it the way you have uh this may seem uh cliche but uh it's more important to me as an American uh and I hear the passion in people's voices there are many things we can disagree on but I think progress can happen when we can find Bedrock principles that we all agree on the the systems of checks and balances for example is so
▶ 1:06:20critical to a functioning democracy and what I came to understand with the FTC was in fact is a system that has gotten out of balance where there is no check in Balance where there is no independent Judiciary where that agency can act as judge jury and prosecutor and they presented me with a situation where they either threatened me to go into court where there is a z% chance over 20 years of having a fair trial where I could win or to effectively seize my company's most valuable assets give us an unlimited
▶ 1:06:51liability and place all my 4,000 employees and all of our customers at risk and so that's why I'm here today as I'm now very passionate about this I was disappointed when the FTC dropped their case against us because I felt the system was so unfair I wanted to see it make its way back up to the Supreme Court um but when they dismissed their case I jumped at the chance to come and testify before Congress today because together we have an opportunity to fix the checks and balance by Just Simply Having independent judges review every case uh when the government is going after
▶ 1:07:21an American very good Dr mclin uh you in a lawsuit challenging the ftcc's pre- merger notification rule business groups claim that the ftc's rule will cost over seven times the amount that the FDC estimated in its final rule this is kind of a consistent problem that we see uh and the FTC estimates that it will cost billions the FTC has not articulated how it will use the information to better enforce the antitrust laws and the FTC
▶ 1:07:51has never articulated past examples of missed enforcement that would just the rule is this type of potentially burdensome regulation that Congress we should sit down and analyze this and potentially act on it thank you so you're referring to the new HSR rules of course and I did uh take a look at those as a reference point the paperwork burden estimate from the FTC May indeed be low compared to what other people estimate
▶ 1:08:21it to be uh I think it's worth pointing out that those estim similar to what Mr Smith is pointing out are produced by the same people who want to produce the rule so maybe there's a conflict of interest there but I would also point out that even though that paperwork burden maybe what the FTC estimated or maybe seven times larger is still is very small compared to the overall burden of Regulation and that's my main point here the big burden here is the totality of Regulation much more than any individual rules
▶ 1:08:51consequence right let me just follow that up so the separation of powers restoration act or sopra would enshrine the Court's rejection of Chevron Defence and clarify other differences that have allowed agencies to act as informal legislative bodies so and the key point is probably that SOA would require judges to conduct denovo review of agency statutes the RS the guidance documents can you talk about how enshrining judicial review and law may
▶ 1:09:22slow the pace of regulations for administrative agencies I think it would end up at least leaving some percentage of rules aside and it would work like this agencies are going to now be aware that there's no difference anymore no no no judicial difference of any sort that they can rely upon to push a rule forward so some percentage of rules will probably just not get pushed forward at all they will choose not to take that risk of pushing something forward that previously could have stood up because of the different
▶ 1:09:52deference documents what percentage that will be I don't know yeah I mean the delaying factor is uh built in to the system which which could actually I think assist Congress in having the time to examine and take a deeper look on some of these things before they simply are become law is the problem right yeah and and there's going to be plenty of room hopefully in different reforms for Congress to play a more active role
▶ 1:10:22and I think that the my research in the area has shown it's it's necessary for another set of Minds to be looking at the different analyses and regulations coming out of the agencies thank you now recognize the ranking member for five minutes thank you Mr chairman Professor vadic while the Republican majorities in the House and Senate stand aside and do nothing to stop the Trump administration's incursions on Congressional Authority the courts
▶ 1:10:52have begun to step in and block some of these unlawful actions but not content merely to undermine Congressional Authority in the face of these Court decisions senior Administration officials have now tried to question the legitimacy of the courts themselves for example in response to a court order blocking Elon Musk from accessing sensitive Treasury Department data musk said that the judge who made the ruling quote needs to be impeached now Vice President JD Vans stated that quote
▶ 1:11:22judges aren't allowed to control the executive legitimate power president Trump said quote no judge should frankly be allowed to make that kind of decision it's a disgrace the White House called the Judgment absurd and judicial overreach and now these vague threats to judicial Independence have seemingly crossed the line into actual Defiance of a court order yesterday a federal judge in Rhode Island ruled that the White House had defied his order to unfreeze billions of dollars in federal grants can you describe
▶ 1:11:53the Constitutional crisis we would face if the Trump Administration continues to ignore valid court orders sure I think uh Congressman we've never seen a crisis quite of that scope I mean the the famous quote about Andrew Jackson and John Marshall is apocryphal Andrew Jackson actually did not frustrate the Supreme Court's decision in Worcester versus Georgia um the only example we have of a president ever openly defying a decision by a Justice was Lincoln at the outset of the Civil War refusing to comply with the rabius
▶ 1:12:23Corpus issued by Chief Justice t by himself not by the full Supreme Court we've never seen a president who said okay the Supreme Court has told me I have to stop doing something I'm going to keep doing it and I think the critical point at that point is we would have a breakdown Congressman not just in the rule of law and the separation of powers we'd have a breakdown in the courts because the executive branch depends upon the courts when it's the plaintiff um to prosecute crimes to bring civil enforcement action so I think you know the the point of no return
▶ 1:12:53would be a point when the courts are no longer willing to even do the executive Branch's regular business because the executive branch won't abide by the Court's judgments in your testimony you briefly described four areas that this committee should be focusing on right now to address the unprecedented power grab by President uh Trump and Elon Musk maybe I should put that in reverse order can you please elaborate on these suggestions sure I mean it seems to me that this committee both historically and currently
▶ 1:13:24has both the power and the mandate to engage in rigorous oversight of what the Department of Justice specifically is doing of how the executive branch is complying or not complying with the various statutes of the firings of inspectors general of the firing of the special counsil Hampton Dinger who is the chief whistle the head of the the whistleblowing agency within the federal government um this committee has the power of course to consider whether legislation should be uh proposed um to rein in some of these claims to back stop uh
▶ 1:13:54existing statutes or perhaps even if the majority is so inclined to authorize what the president is doing but the point I think congressman is that what we have seen over the first three weeks is the president suggesting that this committee and all of Congress is completely unnecessary for him to do what he wants to do and so whether it's through oversight hearings whether it's through withholding legislation whether it's through passing legislation whether it's through the bully pulpit that members of this committee on both sides are so skilled at using it seems like there is a much more important story to tell about what
▶ 1:14:24is happening right now to the separation of powers in this country than the admittedly important stories of my fellow Witnesses those are all problems but what we're seeing is a structural attempt to reallocate power the likes of which we've never seen before and that's where I think this committee has a responsibility Mr Smith has argued for an independent Judiciary if we allow the Trump Administration to skirt court orders does the independent Judiciary function so I guess I'm I'm I am one
▶ 1:14:55congressman who still thinks that the line is holding um we have more examples historically of what I would call slow walking compliance with court orders by the Executive Branch the likes of which seems to be happening right now um I would not put I would not put put it past the possibility Congressman that part of the lack of compliance we're seeing is because of incompetence not malice um and so it seems to me that you know we are not at the point yet where the executive branch is affirmatively refusing to comply with federal court orders and if we get to
▶ 1:15:25that point then I think it would be incumbent upon this committee to pursue articles of impeachment and I would hope that there would be sufficient members of the majority who would think that that was part of their constitutional responsibility that the politics of the moment would give way to the politics of our constitutional order thank you Mr chairman I Mr chairman I yield back gentleman's time is expired thank you Professor Mr chairman I yield back gentleman's time has expired now recognize the gentlewoman from Wyoming for five minutes thank you I guess I would take your testimony a bit more seriously Mr
▶ 1:15:55vadic if you actually had ever complained or brought shown any light on the uh Biden administration's efforts to uh forgive the student loans in violation of the law and court order Miss Wade I appreciate your passion for this issue it is something that is incredibly significant and I think the cater Walling that you hear on the other side is what happens when you shine a light on the Scurry little things that live under most rocks that most of us find rather disgusting the 2024
▶ 1:16:26version of cei's 10,000 Commandments found that Federal Regulations total compliance costs and economic effects are at least $2.1 one7 trillion annually us households pay an average of $5,784 th000 annually in a hidden tax which consumes 177% of income and 22% of household expenses the Biden Harris Administration imposed over $1.7 trillion in cumulative regulatory
▶ 1:16:56costs on the economy surpassing all predecessors the issue of overregulation in this country is absolutely real and it is people like you that are affected regardless of whether Mr vdac feels that you should have a voice in these proceedings Mr Smith I want to turn to you because I think people need to understand what alj's administrative law judges and administrative law courts actually do in this system if you want to talk about unconstitutionality uh article 3 establishes
▶ 1:17:27an independent Judiciary to protect citizens from loss of life liberty and property without due process of law over the last 50 years or so a variety of federal agencies have created their own court systems led by administrative law judges it would come as no surprise to no one that agencies enjoy outside success in proceedings before these alj's after all they're wearing the same jerseys they're on the team in
▶ 1:17:57article three court say provided by the Constitution the SEC only wins about 58% of its cases and between fiscal year 2011 and 2014 the SEC however won an average of 90% of its cases in front of alj's the FTC who you went up against wins n over 90% of its cases before its own alj's yet Lena Khan who was was the head of the FTC under the last Administration lost almost every single
▶ 1:18:27case she ever brought before an article 3 case or an article 3 Court when axon was forced into the FTC administrative law court or ALC proceedings uh were you provided with the same protections and rights you would expect in an article 3 Court such as due process the right to a trial by jury that sort of thing um absolutely not it was a it was a foregone conclusion frankly it was just described to me by my attorneys is hopeless there's a 0%
▶ 1:18:58chance over the previous 20 years of getting a fair trial and even once we came out if it went to appeal the appell process would be only reviewing the ftc's version of events they get to write the entire record uh and you never get a a day in court uh maybe you get an appellant review to see if they made an error in the law but we would never have gotten a chance for an independent Arbiter to hear our claims I would think that the people on the other side of Mr vadc would be concerned about the uh the vi viation and constitutional rights that you just described but apparently
▶ 1:19:28they're more concerned about protecting the unelected bureaucrats and their ability to send millions of dollars to uh things that we don't want to pay for such as um transc comic books for people in Peru um the FTC enjoys over 90% success rate in proceedings before the alj's as we just talked about and um what I understand is that you were forced to spend $20 million defending yourself in these FTC proceedings having been an administrative law attorney
▶ 1:19:58for many years I describ this as the pun the process is the punishment would you agree uh the process was a heck of a lot of punishment however it was nowhere near what was being threatened uh I mean for a $13 million acquisition the government was basically looking to seize a billion dollars worth of intellectual property uh as well as half our customers and an unlimited liability so the process was terrible but we had to go through it because the alternative was even
▶ 1:20:28worse as you likely know in this Congress I have introduced the 7eventh amendment restoration act which provides Americans with uh the right to remove their cases before an alj to an article 3 District Court do you think that that is something that would have helped you in pushing back and fighting back against the FTC in these horrific proceedings um I have to say that that proposal is beautiful in its Simplicity and I think think it actually would fit what we've all talked about the system of checks and balances functioning properly
▶ 1:20:59that an American should be able to say my goodness if I have the government coming after me may I please have an independent judge where I can plead my case and have a chance of prevailing thank you Mr Smith thank you Miss way thank you Dr mlin for being willing to come here and expose this horrific uh situation this horrific administrative situation that we're dealing with I yield back gentoman yields back we now recognize the gentleman from Maryland the ranking member full committee Mr Rasin thank you Mr chairman um in just
▶ 1:21:29the last 22 days which seems at this point like 22 months they've sacked 17 inspector generals the major corruption fighters in federal agencies they've illegally tried to freeze government spending that has been appropriated by the Congress of the United States they've fired heads of four independent agencies and they've shut down work completely at least four agencies paying thousands
▶ 1:21:59and thousands of federal workers to do nothing because they want to try to bring the work of the federal government that doesn't directly profit them to a screeching halt meanwhile musk and his completely unvetted and untrained night crew of assistants have gained access to at least 18 federal agencies stolen reams of the American people's data from the agencies and fired thousands of workers in violation of civil
▶ 1:22:29service due process trampling all of the checks and balances and rights to individual adjudication that Mr Smith just referred to all of these actions are profoundly disturbing but it's the data grab that is rocking the American people right now um the capture of this data represents an unprecedented hack in into our most sensitive information and a profound risk it is for all Americans
▶ 1:22:59Professor vladic musk and his team say that they access these sensitive and confidential data sets some of them might include classified information for all we know in order to root out fraud how do we actually root out fraud in the government so historically Congressman as you know the the way that we root out fraud is through a series of overlapping and interlocking mechanisms the inspector's General are the first line of defense within the agencies um the idea is that their job is to provide regular audits of what the
▶ 1:23:29agency is doing as you know there are various statutes that allow private citizens to seek to investigate fraud and to make claims against the government when they think there is fraud the false claims act at the top of that list and then Congressman there's this committee um and there's its its companion Committee in the Senate that use its oversight functions um to ensure that the government is complying with its statutory obligations it's obligations Congressman to investigate fraud in in all of its spaces well to illegally wipe out all these inspectors General and it was in direct and admitted violation
▶ 1:24:00of the federal statute which says that the president has to come to Congress first and set forth the rationale for why they're being fired 30 days before it happens but in doing that what will the effect be on actually trying to root out waste corruption fraud self-dealing in the agencies so I think I think the reality is that you're going to have a split between fraud waste and Corruption that has no coordination that has no involvement from senior officials in the agency which I suspect the agencies might still have some interest
▶ 1:24:30in going after and fraud waste corruption and abuse that the senior officials in the agency are aware of because now they're the only people in a position to do anything about it the reason why Congress historically separated the function of the heads of agencies from the Inspector General is so that the inspector General would be in a position to review even the senior leadership of agencies when it came to these concerns that's the biggest thing you lose when you fire all so if they're undermining the infrastructure that's set up to actually try to Target fraud and waste and abuse
▶ 1:25:00why are they accessing all of the data of the American people I mean I think that's a question this committee ought to ask them congressmen but I'll just say and I think this is an important Point um we can all surely agree that rooting out fraud waste and abuse in the executive branch is actually a noble goal and it's a goal that we should all be invested in but the way to do it is to either one use existing mechanisms or two come to this body Congress this committee and suggest why the existing mechanisms need to be reformed as opposed to starting from scratch well Elon Musk
▶ 1:25:31uh is the wealthiest person on Earth or at least he was before the collapse of Tesla in Europe recently but uh he's a very wealthy man could he benefit financially from accessing all of the data in the United States Department of Treasury computers I mean I would think anyone who has contracts with the United States and with other governments would benefit from having access to that information um uh a federal judge of New York just ordered musk to destroy the data they had illegally obtained from the treasury Department
▶ 1:26:01this is the judge they're all now talking about impeaching who can ensure that musk has followed the order of the court and destroyed this data I mean it seems to me that there are two possibilities congressmen the courts are are first um and I think Congress and this Committee in particular are second we're reading reports that musk has fed Americans data private data into AI models and he's also making a bid for another company in artificial intelligence just going ahead and doing his
▶ 1:26:31business while he's purporting to do the business of the American people what dangers are posed by the feeding of our data into an AI system if that were to happen I mean I think there are multiple levels of danger and I know that that the time is is is expiring I'll just say that I think the most obvious dangers are the possibility that this data will become accessible not just to our government operations but to our enemies overseas use that for malicious purposes gentlemen's time has expired now recognize a gentleman from North Carolina Mr Harris for 5 minutes
▶ 1:27:01thank you Mr chairman and thank all of you on the uh panel for sharing today I want to speak to miss WAD for just a moment in your testimony you explained how the regulations in New York and California made it difficult for your businesses to flourish so you moved to Austin Texas just want to give you an opportunity and appreciate you coming and sharing today was there a specific moment when you realized you needed to move your business to a more business friendly
▶ 1:27:32State thank you for the opportunity yes it started when I was in California because first I was in California then New York then Austin it started when I was in California and um when the cost of and you see this is where when people ask what was it a special thing it was not a special thing you know it's one of those things it's Death By A Thousand Cuts literally I mean when people don't realize is we've got millions and millions and millions of lines of code each law each regulation is a line of code and um to be compliant it's almost
▶ 1:28:03impossible I know that every day I'm probably violating the you know the free violations a day thing that people talk about I know and if I had some opponents they could look easily into my four businesses or the nonprofits that I have and they will find something not because I was being factious not because I wanted to be against the law but because the law is so darn complicated that you're bound to make mistakes even if you have lawyers and attorneys it happens all the time so at some point uh after after going through California I eventually went to um New York New York was
▶ 1:28:33no better actually I would argue um yeah it was definitely no better and I had to look around and really now take it seriously the ranking of the most free states in the country and eventually that's when I land how I landed in in Austin in Texas literally well although you have 50 state regulatory environments to choose from you're still subject to the Federal Regulations wherever you go in the United States and despite the improvements in your business since the move to Austin what challenges would you share
▶ 1:29:03with us still persist even at the level again um I get that question even about Africa what would you address and I'd say to people by now things have gotten so bad representative but if you want to hear the truth for me I believe that the best thing that it's not so for me it's no longer about talking about what the FED has wrong it's about talking about what could they do right going forward and going forward I would argue that the house is so the foundation of a house is so rotten the
▶ 1:29:33you know the founding favs really were going for competitive jurisdictions and you know we've been eating away at that eating away at that and now there's cumbersomeness everywhere so much that the easiest and best thing to do for Congress would be these zones that we we call them in my case prospera zones which is this is what I'm doing in Africa because in Africa we have a worst case situation even the US and the best way to do this is to basically at the federal level can we find zones where we apply a general repealer
▶ 1:30:04basically repeal all the commercial laws and have and have a chance to start fresh that's really what I'm advocating for at the federal level in the United States today so let us create these zones where we can actually start fresh and create areas where we have new grow miracles of growth that can happen now let Texas compete with these zones I think it's going to be the fastest way to clean things up because otherwise we're just going to be sitting here in these circles complaining all day long about this law here that law here which I would argue does
▶ 1:30:34nothing so at this point we got to be radical we've got to be bold because if something is not done quickly radically I'm afraid Mr Rasin soon you're not going to have the United States of America to speak of the only reason why we speak of the United States of America anywhere is because of the power of the US power of the US because of economic power of the US if the US coming going down and down this path of overregulation this country will be poor and poor Nations have no say so that would be what I recommend
▶ 1:31:04if we continue down this path if we don't do anything this country might not be spoken about agree unfortunately our government today is a far cry from what our Founders intended and today unelected bureaucrats are some of the biggest Spenders in Washington and Congress has got to take back the power of the purse through Common Sense regulatory reforms the Reigns act requires Congressional approval of any federal agency rule with an impact of a 100 million dollar or more before they take effect Dr
▶ 1:31:34mcgoffin I want to ask you in in your view with implementing implementing the Reign act bring Congress more in line with what the drafters of the Constitution intended yes it would uh ultimately regulations stem from congressional Authority and Reign the Reigns act lines up with that line of thinking and in your research and a lot of things you've spoken about the economic impact of federal regulations let me just ask what effects on the economy would the Reigns act bring if it were to become law
▶ 1:32:05I think it'd be subtle I think some of the threats of using the Reigns act would be more effective than actually using it when agencies are aware that the Reigns act can be used I think they'll act differently thank thank you very much gentlemen it's time has expired gentleman from California Mr Carz want to thank you Mr chairman I have esally want to thank our Witnesses for being here today appreciate your testimony today and U I only have five minutes I'll try to be quick start out with Mr Smith I want to ask you a yes or no question sir
▶ 1:32:36the FDC started its investigation into your acquisition of EV venue in 2018 was that case started by the FDC under the Trump Administration um I'm the answer would be embarrassingly yes sorry I was trying to say yes no you and Miss Wade I'm going to agree with you back home my neighbors in Orange County they don't really care about the details of Regulation all
▶ 1:33:06they want to know is is our water safe to drink our car safe to drive our medication safe to take and are our children safe at school and of course is the air they breathe is it clean and safe this is a picture of Los Angeles back in the 60s and 70s regulations made this air in Los Angeles Orange County much cleaner I was a kid then and I can tell you trying to play
▶ 1:33:36out in the playground in those times was painful literally you had to stop playing because your chest would hurt all of us regulations some are good some are really good may I say something to that please no ma'am it's my time I I I wanted to noted but I wanted to say something and said no ma'am thank you you got other people that may ask you a questions thank you the Supreme Court when it
▶ 1:34:06comes to regulations have made things worse and members of Congress are willing to go along with the president essentially giving up more of our Express authority to the president are there cases of absolutely but fullon deregulation is not the answer it'll probably create more Havoc uncertainty for businesses and imperil to health and safety of many Americans Mr
▶ 1:34:36vladic US Government civil servants take a oath of loyalty to the Constitution and the United States does this loath of loyalty apply to all civil servants including CIA FBI food inspectors immigration frontliners Social Security and Medicare employees everyone these civil servants could be making much more money in the private sector yet they work for the federal government because they
▶ 1:35:07believe in the mission and helping citizens in small business in this great country please tell us what this s of office means in the context of how civil servants should be carrying out their Duty well I think Congressman for generation s it is meant for better for worse that civil servants don't work for the president they work for the government um and that the mission is to do what is in the best interest of the Constitution of the United States not the best interest of the current holder of the chief executive office
▶ 1:35:38um we won't always agree about how those civil servants carry out those missions we won't always agree about what it means to be faithful to the Constitution but the mere agreement that that is the goal the mere agreement that that is oath and loyalty to the United States and you know we're all going to have different visions of what that is Congressman but at least we all agreed that was the purpose Professor Val let me cut you off in your testimony you said quote unquote paraphrase in three weeks I've seen a more sustained
▶ 1:36:08assault by the president on this institutional's Con constitutional prerogatives than we've seen in the first 250 years of this Republic please elaborate that's a very strong statement it is Congressman it's not one I make lightly and it's not one I wish we were in a position to have to even be discussing today but you know when I look at how much power the president is claiming to not spend money that the Congress has appropriated to defy statutory limits the Congress has imposed to fire
▶ 1:36:38officials who Congress has insulated from removal to take control of the bureaucracy in ways that politicize everything down to line attorneys in the Department of Justice we've never SE we we might have seen flash points of that Congressman we all this together everybody talks about generals for my folks back home can you explain to us what An Inspector General does so An Inspector General is a government officer who's meant to look inwards at the agency of which he or she is the Inspector General and who's meant to ensure that the agency
▶ 1:37:08is not engaged in fraud waste or abuse they can do that on their own prerogative they can do that at the request of employees they can do at the request ofers so if they're fired what's the message here I think the message is that we don't want someone looking that carefully at what we're doing thank you very much Mr chairman and out of time but if I can I'd like to ask unanimous consent to have the following documents entered into the record granted the article from The New York Times called Trump's actions have created a constitutional crisis Scholars say
▶ 1:37:39second Pro Republic article do Regulators really kill jobs overall not so much third article release from ruar University Federal Regulations don't really affect economic growth and the fourth from the Columbia climate School the dangers of deregulation thank you granted without objection Mr chairman I have one UC request too if that's okay uh this is an article from The Economist last year October 2024 the Envy of the world the American economy
▶ 1:38:09has left other rich countries in the dust cover story thank you granted objection uh will now recognize gentleman from California Mr Isa for five minutes thank you and uh I really appreciate the testimony of my colleague from California since it looked like it was testimony and nothing more uh you know the the interesting thing is that uh that oath he talked about every state employee in California takes a similar oath and the odd thing is
▶ 1:38:39the district attorneys take an oath to the California Constitution and the United States Constitution which means that they understand that Sanctuary city law is unconstitutional that it's wrong and that interfering with federal employ employees uh trying to execute uh in fact would be a conflict of their oath so I know the gentleman means well but you know people sign oats how many take it seriously and the answer is not nearly enough of our federal employees just yesterday
▶ 1:39:10we dealt with the recognition that some people at the FBI either agents or staff had willfully disclosed Isis actions in a way that could cause them to be shot are killed by the MS13 people they were attempting to round up as both criminals and immigrants Oaths are a wonderful thing but with all due respect to my colleague who's left the room uh let's talk about Faithfully executing the Constitution
▶ 1:39:40Mr Smith on the subject that we're here for are you aware that the Federal Trade Commission has nearly a 100% success rate in their administrative Court yes certainly are you aware that even if an administrative judge were to not find uh you uh you know guilty so to speak that the commission can overrule that and basically make you guilty yes and I believe they do almost all the time are you aware under the last four years of the Federal Trade Commission
▶ 1:40:11they had far less than a 50% chance of surviving if they went to a federal court with a judge and a normal process of du of due process I believe that that so the reality is you've got a kangaroo court at the Federal Trade Commission and with all due respect it doesn't really matter uh who's in the White House the Federal Trade Commission has asserted its Authority far beyond the intent of Congress I agree now in your case you
▶ 1:40:42uh you struck a cord with the Supreme Court basically the recognition that when they start getting into constitutional issues they don't have that right period that the article three judges do have that right and you don't have to exhaust all of the kangaroo court procedures before getting to the article 3 court is that true it is yes but let's ask the question for you and the others here wouldn't we be better off if knowing
▶ 1:41:13that the Federal Trade Commission is not Faithfully executing the intent of Congress the statutes and the Constitution that you didn't have to wait and spend Mill ions of dollars and perhaps lose an acquisition and you were simply able to go to the to where you have a right which is uh the article three judges themselves if it's a federal law 100% yes here's the last question and I'd like each of you to opine on it briefly
▶ 1:41:43the Reigns act attempts to say for major regulations is there any reason that any of you can find that Congress should not be able to at any time by a simple vote second guess in other words second guess regulation uh that has been made by an agency that says it's the will of Congress but in fact cannot substantiate that it is and bearing in mind the same numbers that it takes to pass a
▶ 1:42:13law are the same numbers it takes to object to a regulation you m Mr Smith first seems reasonable M Wade likewise seems doctor yes give you a shot absolutely the Reign act yes I agree yes sir I mean I think there's a longer conversation to have Congressman about legislative vetos after ins versus Chada um you know I I think I mean one of the things that I'm struck by is I don't know wait a second I I was asking
▶ 1:42:43a more narrow question than a legislative veto if in fact regulations were considered by Congress denovo and they simply said will we support that regulation it's not a it's not a veto if you ask is that regulation consistent with Congress and you go through the process of the house the Senate and the White House is there anything inherently wrong I'm sorry Congressman I misunderstood I I thought you were skipping presentment no of course Congress can do anything uh to overturn
▶ 1:43:13a regulation through balsman presentment I wish Congress would do it more right and now doctor I'm going to close with this very briefly if in fact Congress doesn't have the will to sustain a regulation effectively holding a vote and not getting a majority would be the equivalent of saying we don't want that law isn't that correct that does sound correct yes sir thank you I yield back gentleman yields back now recognize a gentleman from Illinois Mr Garcia for five minutes uh thank
▶ 1:43:43you uh Fitzgerald and what we're experiencing right now is a five alarm fire of the administrative state and not for the reasons that my colleagues across the aisle are saying instead in the first few weeks he's been president Trump and his pal Elon an unelected bureaucrat are bulldozing key Watchdog agencies instead of protecting people from government overreach they're destroying
▶ 1:44:14the mechanisms to protect them as it turns out their approach is so unpopular with the American people that they've had to say face a couple times by pretending to abandon course that happened with the government funding freeze what people want is for corporations to be held accountable not for their Medicaid benefits to disappear then used to fund tax cuts for the ultra walty what my constituents want is for their
▶ 1:44:44civil rights and Liberties to be respected not Elon musk's teenage Fanboys prying into their personal information what their actions prove is that Doge isn't about efficiency of the administrative state or for the American people instead it's about allowing corporations to abuse workers with fewer rules and ripping off consumers with more impunity than they already do take the National Labor Relations Board
▶ 1:45:14since the Great Depression the nlrb has a proud history of protecting the rights of employees to bargain collectively in fact the L RB has repeatedly ruled against Tesla for violating labor laws including retaliating against workers for Union organizing and focusing employees to delete pro-union tweets but on January 27th the Trump Administration made the unprecedented decision to
▶ 1:45:44illegally fire LL nlrb board member Gwen Wilcox federal law states that the nlrb members may be removed for neglect of Duty or malale feasance in office but no other case yet neither was cited as the basis for Miss Wilcox firing so my first question for Professor uh vladic based on your legal expertise how does this action violate statutory protections for
▶ 1:46:15independent agency members and what does it mean for American workers I mean I think I think it's pretty clear that it violates the statute Congress and I think the question that's going to arise in litigation is our arguments that that statute is unconstitutional but we're not there yet I mean the courts haven't said as much what does that mean I mean I think it means that you lose the capacity um even in this Administration to have meaningful enforcement through the nlrb and through its processes of our federal labor laws which of course I think tilts the scales in One Direction toward the folks who are
▶ 1:46:45alleged to have violated those laws thank you moving on to the cfpb it's an independent agency created to protect consumers from predatory Financial practices in including hidden fees and data privacy violations it's won back 17.5 billion for Americans since its Creation in 2008 in just two weeks before Trump took over the cfpb sued Capital One for cheating people out
▶ 1:47:15of interest payments ordered a major autol lender to return 10 million to customers and ordered cash at to refund 120 million to customers predictably billionaires who want to get rich off of predatory practices don't love this agency and as of this weekend Trump and his cronies shut it down Professor vladic from a legal perspective can you explain the importance of independent agencies like the cfpb which
▶ 1:47:45has a statutory mandate to protect consumers and when they're eliminated who gets hurt so I mean I think for over a century con Congressman congress's position has been and I think it's been borne out that independent agencies and independent commissions are better situated to look out for things like you know the Securities Market to look out for things like consumer protection um than presidents of political parties who have you know donors political allies to try to support who gets hurt I think the folks who get left in the balance are
▶ 1:48:15the folks who don't have access to the White House the folks who don't have the ability to persuade this president that it's in his interest to support them and I think that's increased ly the members of the American working class congressmen Democrats and Republicans alike thank you sir and finally uh Mr chairman I ask uh unanimous consent to enter into the record an article from foreign policy dated January 24th 2024 that reports that the economic zones which have been referenced by one of our Witnesses today and she was
▶ 1:48:45just celebrating were found to have no transparency or accountability mechanisms be an astonishing level of autonomy which the UN has expressed concern for human rights they have created private courts private police forces and privatized law systems which have no place anywhere in the world and certainly not in the US gr Jackson thank you sir the title is US investors could bankrupt Honduras with Biden support
▶ 1:49:15I yield back gentleman Yi's back uh gentleman from Kansas Mr Schmidt is now recognized for five minutes thank you Mr chairman I want to thank all the witnesses for being here and for their patience we have heard a lot of words today um I Mark these Miss wad when you said them the first time through I think perhaps the most important words we've heard today were in your prepared testimony you said I'm here to provide a sense of urgency regarding the need for streamlined Regulatory and administrative
▶ 1:49:45rules and then you said large powerful firms can afford armies of lawyers and attorneys to stay compliant small entities do their best and try not to slip up Mr chairman that is what this hearing is about and I want to thank you for calling this today look this stuff can get mind-numbingly dull especially when you get into the academic literature surrounding administrative law uh there's a fairly new book out it's in plain English it's not aimed at an academic audience I don't know if our Witnesses have had a chance yet to read
▶ 1:50:16Justice gor's new book overruled the human toll of too much law I see Mr vladic has a chuckle apparently he thinks the justice is insufficiently uh brilliant on this subject matter I have a different point of view one of the things that appears in that book uh is a chart drawn from the regulatory studies Center at George Washington University I've asked the staff to place it uh on the screens for us this is a chart of the number of pages in the Federal Register starting in 1950 take a
▶ 1:50:46look at that chart it's a zerob based chart it's not cutting off the top it's about 10,000 pages of regulatory law in the United States in 1950 the year I was born 1968 it had exploded after the Great Society to about 50,000 Pages it is today pushing 200,000 Pages a binding regulatory law Mr chairman that is why the folks I represent in Kansas sound a whole lot more like missad
▶ 1:51:16and Mr Smith than they do like Professor vladic or some of my colleagues on this committee they're not worried about the academic impact and the theory they're worried about what it means for their day-to-day lives and can they stay compliant and can they continue to operate and can they pursue the American dream so I have a couple of questions for our Witnesses uh let me start with Mr Smith uh Mr Smith as Kansas Attorney General I took a number of cases all the way to the US Supreme Court challenging various Federal regulatory actions I know
▶ 1:51:46how burdensome it can be I'm thinking of one when we challenged uh an Obama era iteration of the Waters of the US rule we started in District Court in Georgia we ended up mdl and I think it was Ohio fighting about whether we'd started in the right Court we had to await a US Supreme Court decision on the jurisdiction issue we went back to Georgia after that all happened we finally got an injunction and the administration appealed and then we were three presidents later before the political system finally uh overtook the litigation you talked about how much money you
▶ 1:52:16spent fighting your one battle could you have used that money more effectively in some other manner oh goodness yes I mean we could have put it into research and development uh building new products innovating entering new markets with sales Investments lot lots of places that would have had a you know return for our investors did The Regulators pay your attorney's fees when that was all over no sir they did not I see and Dr mofin let me ask you this I was intrigued by my colleague Congressman is's line of questioning I was especially intrigued
▶ 1:52:46when he went down the panel and I believe all four of our Witnesses agreed Professor vadic enthusiastically if I'm not mistaken I don't want to mischaracterize it but as long as there's bicameralism and presentment I think your words were you would like to see Congress do more of overseeing and and and deciding whether to keep uh particular regulations so my question for you Dr mlin uh is this the Congressional review act currently has what is functionally a fixed look back window right now I think if it's a regulation came in around August of last year or
▶ 1:53:16later we can use the cra's mechanisms to decide whether we want to keep it or reject it as an elected body exercising the article one power that is ultimately the basis for the regulatory action in the first place um is there any reason we ought to limit ourselves to this functionally sixish month look back we got a bill on the floor this week that would make it a year look back would that be better there's no reason not to extend the look back in my opinion extending the CRA would allow more we're talking about midnight regulations effectively that this but
▶ 1:53:47we don't have to be right I mean why are we worried only about midnight I think it's great to be worried about midnight but why not 6: p.m. why aren't we worried about a regulation that was promulgated in 1994 if it no longer makes sense and you have bicameralism and presentment and this body wants to reject that regulation or in 1958 or in 1973 what's the rationale I don't think there is a rationale for not extending it further back I think that we're just stuck in in a situation of inertia we've always done it this way would you encourage us to take
▶ 1:54:17a look at amending the Congressional review act to give this body The Authority under its procedures to reject agency regulations regardless of when they were promulgated well as a as a scholar I'm hesitant to uh endorse any specific bill but it does seem like it would have positive Economic Consequences thank you very much Mr chairman thank you gentleman Neil's back now recognize the uh chairman of the full committee Mr Jordan for thank you Mr chairman to uh Miss Wade was making this point earlier I thought it was well say talking in a broad sense to lead the world diplomatically
▶ 1:54:47to lead the world militarily you first have to lead the world economically and to lead the world economically you need you need some basic things you need readily available energy at affordable cost and you need Freedom that's Mrs Wade's point and you know what we had a lot more freedom when that chart that Mr SMI just put up there was a lot lower in regulations which would help people like Miss Wade and Mr Smith the entrepreneurs who make our economy go and go and go be able to do their thing Miss Wade you wanted to make a uh you wanted to respond to one of the Democrats I forget
▶ 1:55:17who was asking or saying something you want to respond I'm going to give you a chance to respond then I'm going to go to our Economist and Mr Smith hit your hit your microphone cuz can you hear me yeah we got you thank you so much I want to respond two things Mr Garcia is gone but I wish he was here and same with Mr Korea I think it was so I'll start with Mr Garcia when he brought up oh these Prosper these Zone she want in here no space for them here in America well guess what it
▶ 1:55:47is going to happen in America and the that article that you brought up you know foreign policy I just would like the same way that article is going to be included I would like for the FAQ that I'm going to send you to be included in there as well so we can refute all those claims that are made in articles like that if anything um these zones were put in place by the government of Honduras itself in this situation government of Honduras and if anything we have we know by now
▶ 1:56:17that organizations like the usid funding NOS have been actually undermining these type of um these type of initiatives because these are anti-business NOS so usid hurting us where you go and then Mr Korea who is not here I wish he was here when he had the nerves to tell us that these regulations are here to help us I just would like for him to answer me to this situation around the 1800s since the 1800s it was known that lead pipes that they're being used for
▶ 1:56:47you know um that we using where toxic bad causing probably brain damages in children as early as 1800 it was known then you tell me why is it that until 19 it took until 1986 for it to be taken care of in the meantime you had the mayor of Chicago who made it mandatory for people Builders to use lead pipes to for the for the um water pipes where did government really help us help us here
▶ 1:57:17where I wish Mr Korea was here government is helping us these regulations are helping us give me a break and I see you looking at Shel like this I will send you my I will send you my reports on this um Mr Mr Rasin so thank you so much for giving me that opportunity to respond because it irks me when I see us sitting in these rooms and when I hear your fight I don't hear government working for the people I see government working for government whatever the heck that sounds like okay and I would like for one that it is about
▶ 1:57:48my my safety and about uh my well-being and it in a in situations like this and in as many others like that it is clear that these regulations are not put in place with us in mind and that needs to stop and the fact that Mr Rasin you're here this whole time we've been here you've been you've just been complaining about the process I'll call it a process and again I'm not agreeing disagreeing with with your issues right now around musk and the process that's following Mr vladic the process that you're
▶ 1:58:18following at some point what is the end game isn't the end game to to make us the American people better off isn't it isn't it no I hear you saying that the stuff that would make us better off doesn't matter all you care about right now is a process of mask and these associates are not doing this the right way the goal is the goal moral and right or not if you say it is as I think you should be saying then the fight shouldn't be about you know we need to take musk down or
▶ 1:58:48Trump down let us reink that if you want but keep keep your eye on the ball and your ball should be me it should be me I'm sorry it should be me it should be me how do we make me better off thank you Mr Jordan you bet and by me you mean the American people I mean by that Dr mlin uh and we appreciate that Dr mlin I in college I I uh well I majored in wrestling but you're supposed to get a degree in college so I got one in economics and one of the terms I remember was this term called opportunity cost can you tell us real quick what opportunity cost is it's the things you don't
▶ 1:59:18do because something else requires your resources Mr Smith spending millions of dollars fighting some stupid bureaucrat regulation where if he fought it there he'd have to go the very bureaucrats who made the rule and tell him to do things he'd have to go to their court and he had to go to other court and he could have been expanding our economy building his business but no had to deal with the bureaucrats who the other side thinks are the experts and should run our government is that what opportunity cost when you boil it all down that's what Mr Smith had to deal with is that right yes sir and that's
▶ 1:59:48what my research finds is when businesses get deflected from investing in R&D and expansion that the economy does not grow and it's because regulations are making them spend their resources on other for our country to lead to Miss Wade's point if you're making it tougher for the people who grow our economy make us stay the economic superow it's tougher than to lead militarily diplomatically and that's what it all does and that's what the chairman why he's having this hearing that's what he's trying to change and some of we got a we got a bill on the floor tomorrow midnight Rules
▶ 2:00:19Bill gets rid of a bunch of these stupid rules that these agencies do we can get packages of them set of one at a time that's a good thing I appreciate the Chairman's work on this committee and I yield back chairman yields back that concludes uh today's hearing we thank our Witnesses for appearing before the committee today without objection all members will have five legislative dat to submit additional written questions for the witnesses and additional materials for the record without objection the hearing is
▶ 2:00:50adjourned e