[Senate Hearing 106-179]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 106-179


 
             S. 746--THE REGULATORY IMPROVEMENT ACT OF 1999

=======================================================================


                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 21, 1999

                               __________

      Printed for the use of the Committee on Governmental Affairs


                                


                      U.S. GOVERNMENT PRINTING OFFICE
 57-552 cc                   WASHINGTON : 1999
_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
         U.S. Government Printing Office, Washington, DC 20402



                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
                      Paul R. Noe, Senior Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                 Darla D. Cassell, Administrative Clerk



                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Thompson.............................................     1
    Senator Lieberman............................................     2
    Senator Voinovich............................................     3
    Senator Levin................................................     5
    Senator Durbin...............................................     7
    Senator Edwards..............................................    52

                               WITNESSES
                       Wednesday, April 21, 1999

Hon. Gregory S. Lashutka, Mayor, City of Columbus, Ohio..........     8
Robert E. Roberts, Executive Director, Environmental Council of 
  States.........................................................    10
Scott L. Holman, Chairman, Regulatory Affairs Committee, U.S. 
  Chamber of Commerce............................................    12
Ronald A. Cass, Dean, Boston University School of Law............    31
Lester M. Crawford, Director, Center for Food and Nutrition 
  Policy, Georgetown University..................................    32
John D. Graham, Ph.D., Director, Center for Risk Analysis, 
  Harvard School of Public Health................................    34
Patricia G. Kenworthy, Vice President, Government Affairs, 
  National Environmental Trust...................................    35
Franklin E. Mirer, Ph.D., Director, Health and Safety Department, 
  International Union, United Automobile, Aerospace, and 
  Agricultural Implement Workers of America (UAW)................    37
David C. Vladeck, Director, Public Citizen Litigation Group......    39

                     Alphabetical List of Witnesses

Cass, Ronald A.:
    Testimony....................................................    31
    Prepared statement...........................................   101
Crawford, Lester M.:
    Testimony....................................................    32
    Prepared statement...........................................   108
Graham, John D.:
    Testimony....................................................    34
    Prepared statement...........................................   110
Holman, Scott L:
    Testimony....................................................    12
    Prepared statement...........................................    92
Kenworthy, Patricia G.:
    Testimony....................................................    35
    Prepared statement with an attachment........................   119
Lashutka, Hon. Gregory S.:
    Testimony....................................................     8
    Prepared statement...........................................    80
Mirer, Franklin E.:
    Testimony....................................................    37
    Prepared statement...........................................   133
Roberts, Robert E.:
    Testimony....................................................    10
    Prepared statement...........................................    88
Vladeck, David C.:
    Testimony....................................................    39
    Prepared statement...........................................   144

                                Appendix

Jacob J. Lew, Director, Office of Management and Budget, prepared 
  statement with enclosures......................................    59
GAO report entitled ``Regulatory Reform, Comments on S. 746--The 
  Regulatory Improvement Act of 1999,'' dated April 21, 1999, 
  GAO/T-GGD/RCED-99-163..........................................    71
Letter from Edel Wasserman, President, American Chemical Society, 
  dated April 14, 1999, with an enclosure of a prepared statement 
  from the American Chemical Society.............................   155
Edison Electric Institute, prepared statement....................   160
National Federation of Independent Business, prepared statement..   168
Letter from Shane C. Downey, dated April 20, 1999, on behalf of 
  the Associated Builders and Contractors, Inc...................   170
D. Lynn Johnson, Vice President for Government Relations, Eastman 
  Chemical Company, on behalf of Alliance USA--the Alliance for 
  Understandable, Sensible, and Accountable Government Rules, 
  prepared statement.............................................   171
Keith H. Dinger, President, Health Physics Society, prepared 
  statement......................................................   178
Chemical Manufacturers Association, prepared statement...........   182
Letter from John F. Smith, Jr., Chairman, The Business 
  Roundtable, dated April 16, 1999...............................   202
Letter from Anne G. Giesecke, on behalf of the American Bakers 
  Association, dated May 28, 1999................................   203
Letter from Gaylen M. Camera, CAE, Executive Director, on behalf 
  of the American Industrial Health Council, dated April 20, 
  1999, with a prepared statement attachment.....................   204
Letter to Senators Thompson and Levin from the ``Big 7,'' dated 
  April 21, 1999.................................................   239
Letter to Senator Thompson from Robert W. Varney, President, 
  Environmental Council of the States, dated April 16, 1999......   241
Response to John D. Graham's April 21, 1999, testimony from Joan 
  B. Claybrook, President, Public Citizen........................   242
Response by Professor John D. Graham to comments submitted by Ms. 
  Joan Claybrook.................................................   250
GAO report entitled ``Regulatory Reform, Agencies Could Improve 
  Development, Documentation, and Clarity of Regulatory Economic 
  Analyses,'' May 1998, GAO/RCED-98-142..........................   254
Copy of S. 746...................................................   295



             S. 746, THE REGULATORY IMPROVEMENT ACT OF 1999

                              ----------                              


                       WEDNESDAY, APRIL 21, 1999

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:35 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Fred 
Thompson, Chairman of the Committee, presiding.
    Present: Senators Thompson, Voinovich, Lieberman, Levin, 
Durbin, and Edwards.

             OPENING STATEMENT OF CHAIRMAN THOMPSON

    Chairman Thompson. Good morning. Let us come to order, 
please. The Committee will consider the Regulatory Improvement 
Act of 1999, S. 746, which Senator Levin and I introduced in 
March with 15 of our colleagues.
    We began our work on this legislation in the last Congress 
and S. 746 reflects changes that we made in negotiations with 
the White House. We are pleased that the administration has 
said the President would sign this proposal. We want to bring 
much needed improvement to the Federal regulatory system.
    We believe that the American people deserve better results 
from the vast resources and the time that is spent on 
regulation. We support sensible regulations that help ensure a 
cleaner environment, safe food, safe workplaces, and reliable 
economic markets. Some continue to make increasingly isolated 
claims that the Regulatory Improvement Act would block or 
undermine important safeguards. We disagree with that. We want 
to make some common sense changes that will benefit all.
    There is compelling evidence that our current rulemaking 
system is missing opportunities to deliver greater benefits at 
less cost. Ineffective and wasteful regulations erode the 
public's confidence in government and they undermine important 
programs that the public values. We have to regulate smarter.
    This legislation will lead agencies to carefully consider 
and disclose the benefits and costs of different regulatory 
alternatives and seek out the smartest and most flexible 
solutions. It will help the Federal Government set smarter 
priorities to better focus money and other resources on the 
most serious problems. It will add transparency and 
accountability to the current regulatory process and help 
expedite important safeguards to reduce risk and save lives.
    We have a fine lineup of witnesses from government, the 
private sector, public interest groups, and academia to provide 
input into the bill. I want to welcome them all and I look 
forward to hearing their views.
    Before I call my first witness, I will recognize Senator 
Lieberman and other Members of the Committee who may be present 
for any opening comments. Senator Lieberman.

             OPENING STATEMENT OF SENATOR LIEBERMAN

    Senator Lieberman. Thanks, Mr. Chairman. Let me say at the 
outset how much I appreciate the efforts that you and Senator 
Levin have made on this proposal over a long period of time. I 
recognize that this measure before us, S. 746, includes a 
number of changes made in response to some of the concerns 
expressed about the bill in the last session, and I thank you 
for that. Nevertheless, I may be one of those who remain 
skeptical about the approach of the legislation, for many of 
the reasons that I have expressed at the earlier hearings.
    I continue to worry about unintended consequences and 
unforseen results. Trying to reform every type of regulation 
with a single law still seems to me to pose too high a risk to 
the public's health and safety. As democratically elected 
representatives, I know we all feel that we have an obligation 
to the people we serve to protect them from harm. That means, 
among other things, maintaining a strong defense, adequately 
staffing local police departments, but I think it is also 
equally our responsibility to protect people from breathing 
polluted air, drinking dirty water, eating contaminated food, 
working under hazardous conditions, and falling prey to 
consumer fraud.
    There is a broad consensus in this country and in this 
Congress, I believe, that transcends party lines, for an 
appropriately active regulatory role for government. I think 
there is also a consensus that we ought to be enacting these 
protections in an equitable, efficient, and fact-based manner, 
in a manner that is open to as much public understanding and 
participation as possible.
    In other words, we all support in the broad sense 
regulatory reform, but the question is how do we achieve it, 
and to me, the best way to achieve it is to target it statute 
by statute, not general and across the board.
    An example of what I would call effective regulatory reform 
is the Safe Drinking Water Act Amendments that were enacted a 
few years ago, including a very targeted series of reforms that 
dealt with features unique to the problem of drinking water 
quality. Similarly, the Food Quality Protection Act, which 
focused on reforming the pesticide regulatory program, was 
narrowly tailored.
    In both instances, negotiations led to agreements intended 
to increase future cost effectiveness while giving EPA the 
flexibility to address the higher priority risks to the public. 
Both bills passed the House and Senate by wide bipartisan 
margins.
    Now, by comparison, let me offer an example of how I fear 
omnibus regulatory reform might affect regulation under 
individual statutes, and I am going to use the program 
regulating toxic air pollution under the Clean Air Act as an 
example. In 1990, when we amended the Clean Air Act, we 
recognized that toxic air pollution was not being adequately 
controlled. Literally thousands of pollution sources were 
releasing chemicals into the air that were known or suspected 
causes of cancer, birth defects, or other serious health 
problems. Many of these pollution sources were without 
controls, partly because it took too long for the agency to 
research and analyze the risks, as was required by the law.
    Instead, Congress decided that there was already sufficient 
evidence of risk to justify regulating a list of particularly 
harmful chemicals, to narrow the field of regulation in that 
way, and we instructed EPA to set basic standards based on 
existing technologies without revisiting the questions of risk 
that Congress had already settled.
    So if this bill, S. 746, applied to the air toxics program, 
I worry that EPA could be required to delay issuing standards 
for these toxic chemicals until the agency conducted extensive 
risk assessment for each standard, which was not the intention 
when we adopted the law. I know some of the witnesses today 
will discuss other examples of areas where S. 746 would affect 
regulation in ways that are probably not intended or may not be 
anticipated.
    As troubled as I am about these examples, I am equally 
concerned about the ones that we are not going to hear about 
today and cannot foresee because this will have such a broad 
impact across all of our laws and regulations. I think it might 
be interesting to see a law-by-law survey showing how S. 746 
would affect individual programs that now exist, whether at EPA 
or the Nuclear Regulatory Commission or the Food and Drug 
Administration, the National Highway Traffic Safety 
Administration, the Federal Aviation Administration, or any 
other agency.
    We have already, in fact, enacted a number of regulatory 
reforms beyond those targeted statutes in recent years, and, as 
I have said before, I prefer to give those some more time and 
to have us evaluate how they are affecting environmental 
protection, consumer protection, and worker safety, for 
instance, until we go further.
    These are the questions that leave me skeptical about the 
proposal, though I know it is well intended, and I look forward 
to the testimony today and to working with my colleagues on 
this Committee in pursuing the goal of fair and effective 
regulatory reform that I know we all share. I thank you.
    Chairman Thompson. Thank you very much. Senator Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Mr. Chairman, I am pleased that we are 
here today conducting this hearing on a very important issue of 
regulatory reform.
    As you know, I testified before this Committee last year as 
a governor in support of the Regulatory Improvement Act. When I 
was Chairman of the National Governors' Association, I worked 
with the State and Local Government Coalition to make this bill 
one of our top priorities. That is an organization better known 
as the ``Big 7.'' As a matter of fact, I spent over 40 hours in 
the last session trying to lobby this bill through this very 
Committee.
    Fundamentally, what this legislation does is it says that 
we need to do risk assessment, cost-benefit analysis, objective 
standards that would be set for various agencies by OMB and the 
President's Scientific Council. It would allow for peer review 
of that. It would look at alternatives to regulations that are 
being contemplated and it would finally provide an opportunity 
to file a lawsuit if an agency did something that was 
capricious and arbitrary--reasonable things that I think ought 
to be applied to all of our regulatory agencies.
    One of the things that I was impressed with last year is 
how this Committee worked on a bipartisan basis to put this 
bill together and also with the White House to try and make it 
something that would be acceptable to the various groups that 
were concerned about this legislation. So this is an 
opportunity to take something that has really been debated and 
talked about and get it done this session. Again, I want to 
commend Senator Levin and our Chairman for the good job that 
they have done.
    I also want to extend a warm welcome to a gentleman who was 
my mayor while I lived in the governor's residence in Columbus, 
Mayor Greg Lashutka. Mayor Lashutka was a leader in the 
unfunded mandates debate and is a strong proponent of the use 
of risk assessment and cost-benefit analysis.
    Like Mayor Lashutka, I am a public servant who cares deeply 
about the needs of our environment and the health and well-
being of our citizens. However, I am also concerned about the 
unnecessary and burdensome costs that are imposed on our 
citizens and State and local governments through Federal laws 
and regulations. As the lead governor on federalism for the 
National Governors' Association, I worked with the State and 
Local Government Coalition to help push the unfunded mandates 
relief legislation through and the Sage Drinking Water Act 
Amendments of 1996.
    Much of the initial research showing regulatory cost on 
State and local governments was started in Ohio and Mayor 
Lashutka was one of the leading advocates of both pieces of 
legislation, as mayor and president of the National League of 
Cities.
    These statutes set key precedents for the reforms that are 
envisioned in the Regulatory Improvement Act, as they made 
government more accountable based on awareness of risk, cost, 
and benefits. I would just like to remind the Members of the 
Committee, when we passed the amendments to the Safe Drinking 
Water Act, there were a lot of environmentalists and others 
that were opposed to it and we worked with those organizations 
and I will never forget being at the White House when the 
President signed that piece of legislation. It was that same 
kind of openness and working together that caused us to be 
successful with that and I am hopeful that same attitude will 
prevail with this legislation today.
    I am not going to go into all the details about the costs 
that are involved in businesses and others complying with 
regulations, but I would like to say that, so often Congress 
fails to realize how much these regulations cost State and 
local government, our partners. As a former mayor and governor, 
I did not mind regulations, but I did mind regulations that 
when you looked at them and you looked at the costs involved 
and realized that the benefits that derived were not analyzed 
or looked at from a cost-benefit point of view, it was very 
frustrating.
    So, Mr. Chairman, I am hopeful that we can get this 
legislation on the floor as soon as possible and that we can 
work with other Members of this Committee that may have some 
reservations to see if we cannot answer their concerns and 
others that will be testifying before us. Thank you.

                PREPARED STATEMENT OF SENATOR VOINOVICH
    Mr. Chairman, I am pleased that you are conducting this hearing on 
this very important issue of regulatory reform. As you know, I 
testified before this Committee last year as a governor in support of 
the Regulatory Improvement Act. When I was Chairman of the National 
Governors' Association, I worked with the State and local government 
coalition to make this bill one of our top priorities. I am pleased to 
join you now as an original cosponsor of this important legislation.
    I commend you and Senator Levin for your bipartisan work to enable 
Federal regulators to do a better job of protecting public health, 
safety and the environment.
    I want to extend a warm welcome to a gentleman who was my mayor 
while I lived in the governor's residence in Columbus, Mayor Greg 
Lashutka. Mayor Lashutka was a leader in the unfunded mandates debate 
and is a strong proponent for the use of risk assessment and cost-
benefit analysis.
    Like Mayor Lashutka, I am a public servant who cares deeply about 
the needs of our environment and the health and well-being of our 
citizens. However, I am also concerned about the unnecessary and 
burdensome costs that are imposed on our citizens and State and local 
governments through Federal laws and regulations.
    As the lead governor on Federalism for the National Governors' 
Association, I worked with the State and local government coalition to 
help push the Unfunded Mandates Reform Act (UMRA) and the Safe Drinking 
Water Act Amendments of 1996. Much of the initial research showing 
regulatory cost on State and local governments was started in Ohio. 
Mayor Lashutka was one of the leading advocates of both pieces of 
legislation as a mayor and president of the National League of Cities.
    These statutes set key precedents for the reforms that are 
envisioned in the Regulatory Improvement Act, as they made government 
more accountable based on awareness of risk, cost, and benefits.
    However, UMRA and the drinking water amendments have had limited 
applications. The Regulatory Improvement Act is needed to provide 
across-the-board cost-benefit analysis and risk assessment procedures 
at all Federal agencies, including independent agencies. I think it is 
time that we make Federal agencies--not just Congress--accountable for 
the decisions they make.
    As a Nation, we spend vast sums of regulations. A report 
commissioned by the U.S. Small Business Administration estimates that 
regulations will cost the economy about $709 billion in 1999--more than 
$7,000 for the average American household.
    Unfortunately, this burden on consumers and American businesses has 
not always resulted in maximum health or environmental protection. At 
times, it has diverted scarce resources that could be used for other 
priorities such as education, crime prevention and more effective 
protection of health and the environment.
    The challenge facing public officials today is determining how best 
to protect the health of our citizens and our environment with limited 
resources. We need to do a much better job ensuring that regulations' 
costs bear a reasonable relationship with their benefits, and we need 
to do a better job of setting priorities and spending our resources 
wisely.
    I think S. 746 will help achieve these goals by increasing the 
public's knowledge of how and why agencies make major rules. I also 
believe that this bill increases government accountability to the 
people it serves and will improve the quality of government decision-
making by allowing the government to set priorities and focus on the 
worst risks first.
    Mr. Chairman, I look forward to today's testimony.

    Chairman Thompson. Thank you very much. Senator Levin.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Mr. Chairman, I want to thank you for 
calling the hearing, for your cosponsorship of this 
legislation, for sustaining the level of effort that is going 
to be necessary to see that this legislation becomes law. This 
task may be a Herculean one. I just hope it is not a Sisyphean 
one.
    I came to the Senate because I believe that government can 
make a difference in people's lives, and I also know that 
government can waste money on a good cause, and when we do so, 
we jeopardize support for government acting to achieve the 
essential goals of public health, safety, and a clean 
environment. If we can do more with the resources that we have, 
or if we can spend less to achieve the protections that we 
want, we are wasting our money if we do not do that.
    If we can choose between protecting 5,000 people for a cost 
of $100 million or 10,000 people for a cost of $110 million, I 
want to know about that choice. If it costs five times more to 
protect twice as many people, I want to know that, too. If we 
do not set up the systems so that we know what the choices and 
trade-offs are, then we are just being ostrich-like and putting 
our heads in the sand.
    This bill is about information--information which we can 
use to judge the work that our government is doing to determine 
what the best methods are for achieving our goals. This bill 
directs agencies to consider all of our values, those that can 
be quantified and those that cannot be quantified. It directs 
agencies to learn about things, to get certain information. It 
does not tell the agencies when to regulate, what to regulate, 
or how to regulate. It just gives the information to agencies 
so that they can regulate wisely and it gives the public 
information that it can use to assess the agency's decision.
    It is one thing to argue against a regulatory reform bill 
because of the concern that a bill that looks pretty good today 
may be modified in the legislative process to be unacceptable 
tomorrow, and I can understand that argument and I am very well 
aware of that concern. But it is another thing to argue that 
people should not know the costs and benefits of major Federal 
regulations. We should not be afraid of knowing what we are 
doing when we are regulating.
    I have read the testimony of the opponents of the 
legislation and I must say that they are often describing a 
bill that I do not recognize and they are defending a cause 
which I do not support. The cause that I am referring to is not 
the cause of a cleaner environment or a safer workplace. Those 
are causes I do support, and strongly so. But the cause that 
they are too often defending and the cause that I do not 
support is choosing not to know the consequences of our actions 
as a government.
    This bill has broad bipartisan support, including the 
support of the Democratic leader, Senator Daschle. It also, 
obviously, has opposition. The President has agreed to sign 
this bill if it comes to him in its current form, and I would 
ask, Mr. Chairman, if it already has not been done, that a 
statement of Jack Lew, the Director of the Office of Management 
and Budget, that says that if S. 746 emerges from the Senate 
and House as you now propose, the President would sign it, be 
inserted in the record.\1\
---------------------------------------------------------------------------
    \1\ The prepared statement of Jacob J. Lew, Director, Office of 
Management and Budget, appears in the Appendix on page 59.
---------------------------------------------------------------------------
    Chairman Thompson. Without objection.
    Also, Mr. Chairman, I would ask, if it has not already been 
inserted in the record, that the statement of the General 
Accounting Office on this bill be inserted in the record, and I 
would just simply read one paragraph on page 8.\1\
---------------------------------------------------------------------------
    \1\ The prepared statement of the General Accounting Office on S. 
746 appears in the Appendix on page 71.
---------------------------------------------------------------------------
    ``S. 746 contains a number of provisions designed to 
improve regulatory management. These provisions strive to make 
the regulatory process more intelligible and accessible to the 
public, more effective, and better managed.'' The GAO concludes 
that paragraph by saying, ``Passage of S. 746 would provide a 
statutory foundation for such principles as openness, 
accountability, and sound science in rulemaking.''
    Chairman Thompson. It will be made part of the record, 
without objection.
    Senator Levin. Finally, Mr. Chairman, we all want an 
effective government that protects public health, welfare, and 
the environment. We all want our government to achieve those 
goals in the most sensible and efficient way possible. We all 
want to do the best that we can with what we have and to do 
more good at less cost, if possible. That is the intention of 
this bill and I believe that this bill will help us achieve 
that.
    Thank you, and I also want to thank Senator Voinovich, who, 
when he was a governor testified here was so effectively on 
this legislation last year.
    Chairman Thompson. Thank you very much. Senator Durbin.

              OPENING STATEMENT OF SENATOR DURBIN

    Senator Durbin. Thanks very much, Mr. Chairman. I suspect I 
am a minority on this panel, but I have serious problems with 
this legislation, as I did when we last considered it. I agree 
that we need regulatory reform. We need to make every effort to 
reduce bureaucracy and red tape and litigation. But I do not 
agree that a child's health can be measured in dollars or that 
public safety should take a back seat to a marathon of 
bureaucratic haggling. I am fearful that this bill would slow 
down the regulatory process by imposing new responsibilities on 
Federal agencies for net cost-benefit determination, risk 
assessment, and peer review.
    If you take a look at the track record of this Federal 
Government in responding to national crises, it really suggests 
that we are not quick to respond in the time when most 
Americans think we would. In 1993, the E. Coli outbreak really 
signaled that our food safety inspection process needed to be 
looked at and brought up to date. Well, it took us over 3 years 
to get started and to implement the HACCP process, and, 
frankly, it will not be operational until the year 2000. So 
this is a process that is already slow and will be made even 
slower if this legislation passes.
    Look at the OSHA situation. OSHA is an agency which is 
supposed to protect the health and safety of workers. It takes 
10 years, on average, to issue a worker health and safety 
protective standard. This bill will make it longer. It took the 
EPA 10 years to issue a clean water rule. This bill will make 
it longer.
    When you look at all these, you have to stop and ask 
whether or not we are prepared to put the people in place at 
these agencies to implement this bill, and the honest answer is 
we are not. In this same building, a budget resolution is 
talking about cuts of up to 12 percent in terms of the budgets 
of some of these agencies. This bill will impose new standards, 
new responsibilities on these agencies without even a hint that 
we are going to provide the personnel so that they can keep up 
with these new requirements.
    The people on the other side, in the private sector, will 
be making their investment in their attorneys and researchers 
and scientists. We will not make the investment on the 
government side to protect public health. We will impose new 
responsibilities and mandates on these agencies before they can 
issue regulations for health and safety, and yet we will not 
provide them the people to implement those mandates. So there 
will be fewer people involved in inspection, and fewer people 
involved in implementation.
    The net result, of course, the American consumers and 
families are the losers. We might have a good idea about how to 
protect them, but we have to clear all the new hurdles in this 
bill and we do not have the people to do it. That, I am afraid, 
is the bottom line.
    As it is currently written, this bill will result in more 
bureaucracy, more red tape, and more delay. Congress does not 
and should not have to choose between business and consumers. 
There has to be a sensible approach that can protect both 
interests.
    Thank you, Mr. Chairman.
    Chairman Thompson. Thank you very much.
    I would like to recognize our first panel. We are pleased 
to have today with us, as Senator Voinovich indicated, the Hon. 
Gregory Lashutka, Mayor of the City of Columbus, Ohio.
    We also have Robbie Roberts, the Executive Director of the 
Environmental Council of States, and Scott Holman, the Chairman 
of the Regulatory Affairs Committee of the U.S. Chamber of 
Commerce.
    Thank you for being with us here today. Mayor, do you have 
a comment that you would like to make?

   TESTIMONY OF HON. GREGORY S. LASHUTKA,\1\ MAYOR, CITY OF 
                         COLUMBUS, OHIO

    Mr. Lashutka. I do, Mr. Chairman. Thank you very much to 
the Members of this Committee and particularly warm greetings 
to my Senator, Senator Voinovich. I do appreciate the 
opportunity to provide testimony today on the Regulatory 
Improvement Act, S. 746.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Lashutka appears in the Appendix 
on page 80.
---------------------------------------------------------------------------
    I do want to echo the comments of others commending you, 
Mr. Chairman, and Senator Levin, particularly, on your 
expertise and commitment in making the regulatory process, in 
fact, more accountable to the people of this country.
    As you may be aware, our city has looked at this issue for 
a number of years and we have been stressing the need for 
Federal procedures to reduce the very unintended consequences 
that Senator Lieberman had alluded to. Those unintended 
consequences are a result of mandates and regulations on 
significant occasions that affect our Nation's cities and 
towns.
    Not only have I weighed in on behalf of our citizens on 
regulatory reform, but today I am appearing and testifying on 
behalf of the National League of Cities. The National League of 
Cities is the largest and the oldest organization representing 
cities from the East and West Coast and North and South, 
citizens that live in each of your States, from the largest to 
smallest. We are proud of our two past presidents--who are now 
in the Senate--including Senator George Voinovich and Senator 
Dick Lugar from Indiana.
    Our organization represents 135,000 cities and towns across 
the country. Significantly, over 75 percent of those are from 
the smallest cities, with populations less than 50,000, cities 
reflected in your State, Mr. Chairman, Tennessee, and all the 
States represented by this Senate.
    We strongly, as an organization--the National League of 
Cities--support the Regulatory Improvement Act of 1999. We are 
not alone. All the lead organizations representing the Nation's 
local governments, known as the ``Big 7,'' are in support of 
passing this legislative and regulatory goal that will benefit 
the States and local government and most particularly their 
constituents. I am pleased that a letter should be forthcoming 
to you later today,\1\ Mr. Chairman, from all those State and 
local government associations, known as the ``Big 7,'' 
supporting this legislation. Passage of this bill is part of 
the federalism partnership agenda of the ``Big 7.''
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    \1\ The letter from the ``Big 7,'' dated April 21, 1999, to Senator 
Thompson appears in the Appendix on page 238.
---------------------------------------------------------------------------
    The ``Big 7'' is also pleased to work with you and Senator 
Levin and Members of this Committee for the passage of the 
Regulatory Right-To-Know Act, S. 59, as well as the preemption 
bill that we are currently drafting. The ``Big 7'' believes 
these bills are a significant legislative package in their 
entirety to clarify the intent of Federal regulation and 
legislation. While this will allow further input from those of 
us who really have the main responsibility in implementing 
that, State and local government, we applaud your distinctive 
leadership on this issue.
    While the Unfunded Mandates Relief Act of 1995 had a very 
positive impact on the shift of burden of cost on State and 
local government, it only addressed the legislative process. It 
does not address Federal regulations. S. 746 will enclose the 
gap that is left open that allows costly regulation on cities 
by providing for better consultation with State and local 
government for risk assessment and cost-benefit analysis of the 
legislation that would be proposed.
    It is imperative that all levels of government work 
together to deliver the most efficient services to constituents 
that are both of ours, Federal, State, and local. Our 
constituents expect no less than the Federal, State, and local 
government to work together, providing effective service. And 
the most effective way for us to deliver those services is for 
each level of government to stay within its most effective and 
efficient roles.
    These lines are becoming more and more obscure as the 
Federal Government continues to regulate various sectors in our 
local communities, too often without consideration of the very 
impact that is a concern by both sides on this issue. Gaining 
an equal voice through this legislation in the regulatory 
process will allow cities and towns to demonstrate the impacts 
before it is too late. We must balance health, safety, and 
economic needs and wants of our citizens.
    Here is the core problem in my opinion. Each Washington 
bureaucracy, or sometimes even a Congressional committee, views 
each of our cities through a soda straw on the given issue at 
hand for that day. It is only one look at one point in time on 
one issue.
    For example, we promote regulations on underground storage 
tanks, and that is one set of legitimate issues, and yet we may 
or may not correlate, and quite often does not, with our 
stormwater runoff or how we are pursuing the issue on drinking 
water that was raised earlier or other environmental issues 
that are of equal concern to our citizens. But we are forced on 
a local level to triage the most important. The Federal 
Government wants us to address all of those, quite often at the 
same time.
    We are a microcosm that interacts, a living, breathing, 
dynamic region and not just a government, but we have to deal 
with businesses, large and small, not-for-profit organizations, 
and neighborhoods, all who have some dynamic with us. We look 
to our businesses, the economic energy and revenues, to provide 
basic services, and all the mandates have an impact, good or 
bad, upon us. Sometimes they, in fact, do have a rational 
scientific basis. At other times, they do not.
    The problem, again, as I mention, is tunnel vision. Each 
regulation may take a few pages in the Federal Register, but I 
would suggest to you as we were successful in passing the 
Unfunded Mandates Relief Act that the pile of regulations our 
city had affected is taller than you, Senator, taller than the 
rest of the Senators on your Committee, and taller than myself 
on an annual basis and we are responsible for reviewing those, 
as are others.
    This past year, our cities and towns have seen regulations 
that preempt our cities and towns in decision making on 
authority on local issues and regulations and those cost us 
millions of dollars. An example, our Occupational Health and 
Safety Administration mandated cities who were in OSHA State 
plans would have to do the following manning standards to 
respond to interior structural fires, a legitimate cause, but 
our cities and towns support those efforts and regulations and 
the need for greater health, safety, and environment. But this 
regulation was implemented at a period when fire is at a 
historical low.
    I have other testimony, but I notice the red light is on 
and I would be more than happy to tender that to the written 
testimony if you like, Mr. Chairman.
    Chairman Thompson. All written statements will be made a 
part of the record. Thank you very much.
    Mr. Roberts.

    TESTIMONY OF ROBERT E. ROBERTS,\1\ EXECUTIVE DIRECTOR, 
                ENVIRONMENTAL COUNCIL OF STATES

    Mr. Roberts. Mr. Chairman, Members of the Committee, thank 
you for the opportunity to appear before you this morning 
regarding the Regulatory Improvement Act of 1999.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Roberts appears in the Appendix 
on page 88.
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    My name is Robbie Roberts. I am the Executive Director of 
the Environmental Council of States. The Environmental Council 
of States is the national nonpartisan, nonprofit association of 
State and territorial environmental commissioners. Each State 
and territory has some agency, called different things in 
different States and located in different places in different 
State Governments, that corresponds to the U.S. Environmental 
Protection Agency. Our members are the States and territories 
and the people with whom we work are the officials who manage 
the environmental agencies in the States and territories. 
Currently, 52 of the 55 States and territories are members of 
the Environmental Council of States.
    We are delighted to join with our friends and colleagues in 
the National Governors' Association, the Council of State 
Governments, the National Conference of State Legislatures, the 
National Association of Counties, the U.S. Conference of 
Mayors, and the National League of Cities to support this 
legislation.
    Robert W. Varney is the Commissioner of the New Hampshire 
Department of Environmental Services. He is our current 
President. He signed the letter which has been provided to the 
Committee already. He regrets he could not be with you today 
but asks that I formally present that letter, which I have 
done.\1\
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    \1\ The letter from Mr. Varney to Senator Thompson dated April 16, 
1999, appears in the Appendix on page 240.
---------------------------------------------------------------------------
    Let me read one paragraph from Commissioner Varney's letter 
that I think captures the central issues in this legislation. 
``We support consideration of cost-benefit analysis because to 
do otherwise is to risk misapplication of limited resources. We 
support risk analysis because to do otherwise may be to attack 
the wrong problems. Expanding the participation of State and 
local government officials in the development of national 
environmental requirements can only strengthen the final 
products.''
    Mr. Chairman, the extent to which environmental protection 
is performed not by the Federal Government but by the States 
and local governments is not perhaps generally understood. Let 
me give you four measures of the degree to which environmental 
responsibilities have been shifted to the States.
    First, approximately 75 percent of State environmental and 
natural resources spending is State funds, not Federal funds.
    Second, approximately 78 percent of enforcement actions are 
taken by State environmental officials, not by Federal 
environmental officials.
    Third, about 96 percent of the total environmental quality 
information currently held in Federal databases was gathered by 
State environmental officials, not by Federal environmental 
officials.
    And fourth, of all the major environmental programs that 
were designed to be delegated to the States, about 71 percent 
have been delegated and are currently being administered by the 
States.
    This is a success story. We have talked over the last few 
years about devolution of responsibility to the States and much 
of that devolution has taken place. As States have increased 
their capacity and as environmental protection has become 
increasingly important to the general public, more and more 
responsibilities have been moved to the level of government 
best able to carry them out--State and local governments--which 
are best able because they are closest to the problem, closest 
to the people who must solve the problems, and closest to the 
communities that must live with the solutions.
    In this situation, it becomes increasingly important that 
taxpayer resources be directed to the most important problems. 
Problems sometimes seem to be infinite. Resources are finite. 
To help prioritize problems and define where to apply limited 
resources, new and innovative techniques are required. Risk 
analysis and benefit cost analysis of proposed Federal rules 
and regulations can improve our ability to spend taxpayers' 
money wisely.
    Finally, we support actions which make the Federal 
rulemaking process easier to understand and easier to 
participate in. By making more information available, all 
interested participants, including State and local government 
officials, can help assure that rules and regulations better 
meet the needs of the local area and of the Nation.
    Thank you, Mr. Chairman, for the opportunity to make this 
presentation.
    Chairman Thompson. Thank you very much. Mr. Holman.
    Senator Levin. Could I just give a special welcome to Mr. 
Holman, who comes from my home State of Michigan, an area of 
the State where my great grandparents happened to come from, 
but more important, he has been active in the small business 
community, the education community, and I just want to give him 
a special welcome.

 TESTIMONY OF SCOTT L. HOLMAN,\1\ CHAIRMAN, REGULATORY AFFAIRS 
              COMMITTEE, U.S. CHAMBER OF COMMERCE

    Mr. Holman. Thank you, Senator. Chairman Thompson, Ranking 
Member Lieberman, and Members of the Committee on Governmental 
Affairs, I am Scott Holman, owner and President of Bay Cast, 
Incorporated, of Bay City, Michigan. My company is a small 
manufacturer of large custom steel castings for the automotive 
tooling, machine tool, steel mill, and construction industries.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Holman appears in the Appendix on 
page 91.
---------------------------------------------------------------------------
    I am a member of the U.S. Chamber of Commerce's Board of 
Directors, Small Business Council, and Chairman of the 
Chamber's Regulatory Affairs Committee. I was a delegate to the 
1995 White House Conference on Small Business and served on the 
Michigan Chair for both Regulatory and Taxation Committees.
    I would like to thank you for the opportunity to testify on 
behalf of the Chamber, of which more than 96 percent of the 
members are small businesses, 71 percent of which have 10 or 
fewer employees. Therefore, we are particularly cognizant of 
the problems of smaller businesses.
    Mr. Chairman, first, I would like to salute you and my 
Senator, Mr. Levin, for your leadership in making the Federal 
regulatory process more accountable and responsive to the 
regulated community, which includes all Americans. The growing 
spirit of bipartisanship in Congress for improving the 
regulatory system is very encouraging to me, along with the 
Regulatory Improvement Act, the Mandates Information Act, the 
Regulatory Right-To-Know Act, and the Small Business Paperwork 
Reduction Act, all examples of both parties coming together to 
provide some common sense rationality to the fragmented and 
overly complex regulatory system with which small businesses 
must deal.
    Government paperwork, red tape, and regulations are among 
the greatest concerns facing small business owners today. The 
regulatory burdens imposed upon business in the United States 
are astounding. Recent studies estimate that the compliance 
costs of Federal regulations are more than $700 billion 
annually and small businesses bear much of this cost.
    A 1995 study conducted by renowned economist Tom Hopkins 
found that businesses with fewer than 20 employees have almost 
twice the regulatory cost per employee than operations with 500 
or more employees. I, like other small businesses across our 
Nation, find it frustrating that regulators cannot seem to 
figure out that regulations and paperwork cost not only money 
but time spent in figuring out how to comply.
    For example, regulation relevant to just one of the many 
raw materials used in the metal casting industry deals with 
sand. Every year, foundries use more than 100 million tons of 
this material. Approximately 90 to 95 percent of the foundry 
sand used is not toxic when tested by the EPA required method. 
Five to 10 percent portion of that sand fails to pass a 
toxicity test. It is easily identifiable by a specific 
production process at the source. So the hazardous portion 
could easily be disposed of differently than the non-hazardous 
portion.
    Unfortunately, the regulation does not allow us the 
flexibility to do the sensible thing. In fact, an independent 
study conducted in Wisconsin shows the used foundry sand to be 
less of a threat to the human health than even natural 
background soils. This material is a commodity that can be made 
available for reuse in numerous construction related 
applications. Technology also exists to convert foundry sand 
into glass or for roofing or for other materials.
    Yet foundries across the Nation face tremendous hurdles in 
getting approval for beneficial reuse of this byproduct from 
their processes. So foundries end up paying an ever-increasing 
disposal cost for sand. The burdens imposed by these 
restrictions amount to significant costs for small facilities, 
like mine. Disposal costs for these and other reusable 
materials is approximately $500 million for the industry, 
depending on the landfill tonnage and fees at the time. This is 
too much to pay for materials that have been judged to be 
cleaner than dirt.
    It is sad and ironic that our society and small metal 
casters are forced to pay a double cost because of excessive 
regulation. We lose the opportunity to convert sand into useful 
economic items and we must instead pay the high cost of 
needless disposal. So the sand fills up valuable landfill space 
while it could have been recycled to make new products. Is this 
environmentally friendly regulation?
    So information is the power. This has never been as true as 
it is in today's information age. The Regulatory Improvement 
Act is about ensuring a healthy exchange of information on 
government decisions between people and their government. One 
of the founding principles of our Nation was the ability of 
people to question their government. The Regulatory Improvement 
Act of 1999 provides power of the American people through 
greater information.
    While not an expert theorist on risk analysis, I am a 
practicing expert on cost-benefit analysis and risk assessment, 
as are most surviving entrepreneurs. If I fail to set 
priorities based upon well-grounded information, I risk not 
being able to make my payroll. If I fail to make appropriate 
risk assessment, I can lose the order that may keep my people 
working, or worse, maybe get the order and place the whole 
operation at risk for our very survival. If I fail to use well-
founded plausible assumptions in the allocation of my limited 
resources and commit capital in the wrong areas, I can get into 
trouble. So I need that kind of information.
    The burdens for small business go far beyond the direct 
cost of compliance. Most of us cannot afford to have the full 
or even part-time environmental staff in-house and therefore 
face escalating costs of consultants and attorneys just to 
comprehend our obligations under the hailstorm of regulations. 
Are we going to tailor our laws to the actual risks out there? 
Which regulations are justified, those that make an appreciable 
difference in our health and quality of life or those that 
force us to jump through new hoops and pile up paper and 
consume capital and human resources with questionable results?
    S. 746 is a pragmatic and measured attempt to correct real 
flaws in our system without giving up the protection that the 
public wants. I, for one, do not want to poison my workers or 
my neighbors or destroy the beauty of the community, but I have 
no interest in paralyzing our regulatory system with hurdles 
and delays.
    This legislation forces a degree of feet-on-the-ground 
accountability through risk analysis, cost-benefit analysis, 
open communication, contextual comparison, and peer review. 
Ultimately, reasonable people of good will can disagree on the 
details, but the overarching and powerful concept of this 
legislation must be given a try.
    The Committee deserves to be commended for its efforts to 
provide greater accountability and better decision making into 
the regulatory process and the Chamber appreciates the 
difficulty involved in pursuing the reform. We encourage the 
Committee to continue working toward reform this year so that 
these crucial reforms can become law.
    Again, thank you for this opportunity to testify at this 
time. I am willing to answer any questions that you have, and 
Mr. Chairman, I request that my full statement be submitted for 
the record.
    Chairman Thompson. It will be made a part of the record.
    Thank you very much for being here today, gentlemen, all of 
you. It looks to me like in getting back into this again this 
year and looking at the statements and so forth that, once 
again, we risk those of us who are proponents of this 
legislation and those who are opponents, some risk of talking 
past each other. Those who promote this legislation want better 
rules, and those who oppose want to do nothing to make things 
less safe or less healthy, as if these were two different 
positions.
    I think the main point that I would like to make out of all 
of this is that better rules will make for a safer environment. 
We live in an age of regulation. Some people think the more 
regulation, the better. It is especially better if it is 
unquestioned and we set up a regulatory that essentially does 
not have to give any reasons for what they do. I disagree with 
that.
    But the fundamental question is, what is most likely in the 
long run to produce a safer environment, a healthier 
environment? Is it one where the best science is used or not 
used? I mean, we worship at the altar of science in this 
country and we have made tremendous strides in our ability to 
do such things as risk analysis, for example. Yet we have to 
ask ourselves the question, are we better off if we avail 
ourselves of that or not? Are we likely to produce a safer or 
healthier society by analyzing?
    Those are the key words of this legislation, analysis, 
assessment, balanced review, having experts look at it. Are we 
better off? Are we going to be less healthy or less safe by 
having an assessment of what we are doing, by having experts 
balance all views presented, looking at it?
    We know that we are spending more money than we need to. 
Every expert in the field will tell us that, billions and 
billions of dollars. We know we do not always come up with the 
best regulations. We know we do things sometimes that, contrary 
to the best intentions, hurt people instead of helping people, 
whether you talk about air bags or asbestos removal or drinking 
water standards and so forth. Oftentimes, we know we do not 
have the right priorities, that we are using limited resources 
in ways that somebody thought was the best way to use it, but 
unquestioned, unaccountable, basically, not transparent.
    So which is most likely to produce a safer, cleaner 
society, that way or using scientific benefits that we have 
derived over the years in the framework of analyzing it and 
assessing it and doing a balanced review?
    The irony of it to me is that when people talk about, well, 
it is going to slow down the process and all the bad things 
about this and so forth, is that under the President's 
Executive Order, in most cases, we are supposed to be doing 
these things anyway, cost-benefit analysis and that sort of 
thing.
    So we really are perpetrating a fraud when, on the one 
hand, we say we are doing it while we know that, apparently, in 
many cases, we are not doing it. We have it on paper because we 
give lip service to the notion that these obvious things are 
true, and that is we are better off if we bring some of these 
things to bear. We give lip service to that. We put it in 
writing and we put it out there as a good thing to do, 
apparently not thinking that it is going to slow down the 
process, not thinking that it is going to produce a more 
dangerous or less safe society. But then we want to be free to 
totally ignore that.
    It does not make sense to me. It looks to me like we are 
better off in the long run to bring these other things to bear, 
and again, as Senator Levin said, without even requiring--this 
is informational. This has to do with analysis of what we are 
doing and assessing what we are doing, reviewing what we are 
doing. Is that really going to produce a more dangerous 
society? Is that going to make our children more susceptible to 
E. coli, by using the limited resources that we have for things 
that will, with better information, be directed toward where 
the problem is and having someone unaccountable essentially 
doing that?
    Mayor and Mr. Roberts, you deal where the rubber meets the 
road, and the mayors and States and so forth, as you point out, 
Mr. Roberts, most of this is done at the State level. As 
Director of the Environmental Council of the States, you 
represent the people who do the environmental work there. You 
obviously have to be concerned about the claim that what you 
are advocating here is going to make a more dangerous society, 
you are somehow endangering the health of the people that you 
represent. What is your response to that?
    Mr. Roberts. Mr. Chairman, I think it goes without saying 
that no State environmental department sets out to endanger the 
health of the people in the State. No administration, no 
governor is interested in anything remotely approaching that.
    Our position has been that the more that rules are 
scientifically based and cost based and the more we have tools 
to make those kinds of decisions, the better we can target the 
limited resources that are available, and resources are always 
going to be limited irrespective of what their total amount is. 
We can spend them more intelligently on more pressing problems.
    The more rules are easily understood, the more the public 
will support them. The more people are involved in the making 
of the rules, the more people will buy into the rules and 
support them. So these seem to us to be two tools in a broad 
range of public participation to make better, more targeted use 
of resources in dealing with more pressing and immediate 
problems.
    Chairman Thompson. Mayor Lashutka.
    Mr. Lashutka. Mr. Chairman, Members of the Committee, the 
question you raise is a legitimate one. Frankly, my colleagues 
across the country, I think, are as environmentally sensitive 
as anyone because their constituents understand that for the 
young and the old and those of us in between, that in our 
cities if we do not protect the environment and if we do not 
provide a quality of life, people will leave. They have the 
idea of moving to other States and other cities. We want to 
keep our businesses. We want to keep a quality of life that is 
very important.
    We have a choice of either complying with all of these 
regulations and raising the cost of doing service, either as 
businesses or taxes we impose upon our citizens, or stretching 
those dollars as long as we can. Two examples might be helpful. 
I am afraid sometimes examples, though, polarize on both sides, 
so I do not mean that. That is not intended.
    But the unintended consequences that were a concern came 
from a regulation in Columbus on a chemical for our water 
treatment plant that, to the best of our knowledge, was used 
only for pineapples in Hawaii. We do have a very aggressive and 
growing agricultural community that is part of central Ohio, 
but growing pineapples is not part of what we make in central 
Ohio as part of our agricultural effort. And so those dollars 
could be better used for----
    Chairman Thompson. Tell me exactly what you are talking 
about here. What was the regulation and what was the----
    Mr. Lashutka. This has been cured subsequently, but it was 
used roundly on the unfunded mandates legislation that talked 
about the unintended consequences and the problems, but before 
that was passed, we were required in our drinking water 
statutes to test for a chemical that is only used for the 
growing of pineapples and that is primarily in Hawaii. That was 
not the intent. I think good people tried to have a regulation, 
but it goes back to the ``soda straw'' example.
    On the flip side of it, we also saw a blip in our lead 
testing which occurred randomly in the spring on water runoff. 
We have been tested by both Ohio Environmental Protection 
Agency and the U.S. Environmental Protection Agency, and the 
Senator now from Ohio who was governor then and I talked about 
it, but the regulation required us, because of the time frame, 
to send a notice to all water users who provide water users in 
our city and the entire region. I know I have a legitimate lead 
paint situation on the south side of the city with older 
houses. The dollars used for that mailing, which could have 
been mailed in a regular water and sewer payment, had to be 
mailed separately because of the Federal regulation and we 
could not until a year or two later have a reach in our stretch 
of dollars for a legitimate effort in the south side housing 
effort on our lead paint situation.
    That tradeoff, we make every day, and we have to make those 
and we are forced to. But we clearly think that this 
legislation, as has been said by my friend, Mr. Roberts, will 
be more informational, provide a better result, and frankly, 
maybe in some occasions, slowing it down is in everybody's best 
interests. When we need to move ahead, we are willing to do so 
in the interest of safety of our people, just as those of the 
Federal Government.
    Chairman Thompson. You say slowing it down might be in some 
cases be in everybody's best interest. What are you thinking 
about? In what kind of situation?
    Mr. Lashutka. Let me move away from the environmental side, 
but recently, there was a regulation that came out of the 
Department of Housing and Urban Development and the rule would 
have granted HUD unilateral and unbridled and unchecked 
authority to determine whether a city or a State could curb the 
efforts regarding fair housing, both within and outside of our 
legal authority. It was criticized roundly without any input 
meaningfully from those of us at the State and local level.
    I might give the good side of the story. It was reviewed 
after a hue and cry came from those of us responsible and HUD 
retracted that order, but if this legislation was in place, it 
would have compelled that discussion before unintended 
consequences provided an adverse result, another example of 
something that did not work but was intended to be a good 
result. It just did not fit with the way people are regulating 
in the real world.
    Chairman Thompson. Thank you very much. Thank you, 
gentlemen.
    Senator Lieberman.
    Senator Lieberman. Thanks, Mr. Chairman. Thank you, 
gentlemen, for your thoughtful testimony.
    Let me go back, if I may, to the contrast I tried to draw 
in my opening statement between the targeted regulatory reform 
that has been part of, for instance, the Safe Drinking Water 
Act Amendments, and the broader regulatory reform that is 
involved in S. 746, about which, as I have said, I have 
concerns of what I have called unintended consequences.
    Let me ask you specifically to comment on the concern I 
expressed about the possible impact of this legislation if it 
were adopted on those sections of the Clean Air Act Amendments 
of 1990 that control toxic air pollution. My concern is that 
this legislation, S. 746, would require risk assessments in 
this program, the toxic air pollution program, where Congress 
decided in 1990 that analysis of risk would no longer be 
required. What might potentially happen here is that we would 
end up in a quagmire of delay that Congress intended to avoid 
in 1990.
    So my question is, to any of you or all of you, why does it 
make sense for us now to make a decision that would alter the 
decision we made in 1990, that the problem was so severe with 
this limited number of chemicals that we did not need to wait 
for risk assessments? For instance, we have not studied the 
circumstances involving the regulation of air toxics anymore in 
coming to the consideration of this bill. So that is my 
concern. Why adopt a bill that might well overturn a judgment 
that we made earlier, in 1990? Does anybody want to take a shot 
at that? Mayor Lashutka.
    Mr. Lashutka. Senator Lieberman, Members of the Committee, 
I would like to, and this may not be totally on point but I 
think it generally is in the ballpark.
    Some years ago in this country, there was a huge concern 
that landfills were a dramatic problem, a concern identified at 
the national level and one at the local level. In the six 
priorities of reduce, reuse, recycle, there were landfills and 
waste energy as the next two and then through a discussion, 
landfills dropped to No. 6 in that priority.
    In the meantime, our community under a prior mayor 
concluded that landfills probably should not be the preferred 
choice because they were tough to site, they had environmental 
problems, and we were encouraged through policy then to pursue 
a waste-to-energy plant, and we did, popular in Europe, growing 
in some discussion in this country. At a cost of several 
hundreds of millions, we created a cutting-edge facility. It 
had problems, but overall was performing, the biggest recycler, 
I might say, in our area.
    During my time as mayor, I inherited this facility, but a 
curious thing happened. Landfills then moved back from No. 6 to 
No. 4 as a preferred choice. Waste-to-energy plants, because of 
issues that would be a concern on air pollutants, became less 
desirable, and we were closely scrutinized, as every waste-to-
energy plant all across America.
    And over the back of that, I had to appoint a board to a 
regional authority that the governor and others in the 
legislature thought was appropriate so we could regionalize our 
approach. That board was faced, as we were as owners of the 
facility, with criminal sanctions if we did not succumb to what 
was perceived as a threat by Dioxin. After all, that was a 
challenge. Most of the people I appointed, who are good 
citizens, business people in our community, people who are 
concerned about the environment, chose not to have to go to 
jail to pursue this issue and it was settled.
    Oddly enough, without much discussion nationally, the issue 
of Dioxin, which was going through some significant challenges 
on peer review, dropped off the chart and was not the threat 
that it was alleged to be at the time we had to face criminal 
sanctions in keeping the plant open.
    Consequently, it is closed. We are picking up off of our 
general obligation debt the funding for the bond holders, and 
we still have a AAA bond rating in spite of that, and the 
threat that was perceived, without having appropriate peer 
review, went away. Somehow, in our citizens' confusion, this is 
a significant question. How could all of this happen?
    Now, if the threat was not legitimate at the beginning and 
it ultimately left with huge consequences, and luckily, we are 
a robust city financially, we could endure it. But for other 
cities going through similar consequences, these are back 
breakers, and particularly that 75 percent of our smaller 
cities who are dealing with well intended consequences but they 
do not comport to the real problems with cities.
    I hope that is somewhat helpful to you as a legitimate 
problem in our city.
    Senator Lieberman. Yes, I hear you. It is interesting, the 
response. My concern is that in this case, there has been no 
similar change of attitude or evidence regarding the air 
pollution standards.
    Incidentally, I want to tell you that the robust nature of 
your economy, I believe that my 11-year-old daughter takes 
partial credit for because of her excessive purchases from the 
Limited Too.
    Mr. Lashutka. The chairman of the Limited Too, all the 
stockholders, and I appreciate your daughter's buying and we 
would encourage more, of course, in your discretion with you 
and your wife.
    Senator Lieberman. Thank you. I have another question, 
unless either of you is eager to jump into that one.
    Mr. Roberts, let me focus another example of my concern to 
you because it involves State activities with regard to 
automobile tailpipe emissions and standards that some of your 
member States have taken in trying to achieve cleaner ambient 
air. In establishing, as you know, the ambient air quality 
standards, EPA conducted fairly broad analysis of health 
benefits and risk reduction, but in developing the automobile 
tailpipe regulations needed for the States to achieve their 
ambient air quality standards, EPA analyzed their effectiveness 
in meeting the standards but did not repeat the analysis of 
health benefits and risk reduction.
    So my question is whether you have considered whether S. 
746 might cause delays in establishing tailpipe emissions 
standards by requiring EPA to go back and reanalyze the 
underlying risks of violating the ambient standards and the 
health benefits of achieving them.
    Mr. Roberts. Senator, we have not looked at an impact like 
you describe on any existing program, and certainly I would 
never tell you that there is no possibility of unintended 
consequences of any legislation that might come out on this 
subject. In answer to your first question, we have not looked 
at the impact on the clean air, either.
    Senator Lieberman. Right.
    Mr. Roberts. As I said before, I think our position is 
simply that these are additional tools to be applied to help us 
spend limited resources more effectively. I do not understand 
the bill to go back and require relooking at prior decisions 
that have been made, but I could be wrong in that 
interpretation.
    My concern about a targeted change would be, as you know, 
the great difficulty in considering the major environmental 
legislation a piece at a time, as in the reauthorization 
process. That can be very time consuming. To take that approach 
delays what we would see as the benefits of this kind of an 
approach.
    Senator Lieberman. I wonder if I might ask you--if it is 
something that you can do without spending too much of your 
time--if you might raise the question I raised with some of 
your member States. I would appreciate hearing in writing what 
their reaction is.
    A final question, which goes to another example of the 
kinds of concerns I have. Currently, EPA and OSHA do not 
conduct risk assessments for right-to-know regulations, which, 
as you know, provide communities and workers just with 
information about toxic chemicals and releases, and they have 
had a generally salutary effect. I think even the businesses 
involved have a pretty good feeling about the effect now.
    The community right-to-know law, for example, requires 
companies to let the surrounding community know the amount of 
certain chemicals that are emitted from a facility. There is no 
requirement that exposure data be collected. It is just 
informational, and the hope is that you put people on notice 
and maybe, by the fact of disclosure, you encourage the source 
to reduce the emissions. But there is no mandate in there.
    So my question is why a risk assessment and cost-benefit 
analysis should be required for a regulation like this one that 
does not control toxic exposure but instead just mandates 
public information. Any response?
    Mr. Roberts. I think, Senator, the response to the 
requirement to release the information has generally been what 
you alluded to, and that is that the releases have been 
decreased----
    Senator Lieberman. Yes.
    Mr. Roberts [continuing]. Simply because people did not 
necessarily want to be branded, if that is the right word, with 
having made those releases.
    Senator Lieberman. Right.
    Mr. Roberts. And so in that instance where the requirement 
is a public information requirement, it would seem to be having 
the salutary effect that was desired, which was to reduce the 
releases themselves.
    Senator Lieberman. It is, indeed, and my concern is that, 
notwithstanding the general support for the law at this point, 
that S. 746 would subject it to regulatory review and risk 
assessment and cost-benefit analysis that might delay or defer 
its effectiveness.
    Mr. Roberts. I will ask those questions as you asked, 
Senator, and will reply to you in writing.
    Senator Lieberman. Thank you very much. Thank you, Mr. 
Chairman.
    Chairman Thompson. Thank you very much. Senator Voinovich.
    Senator Voinovich. Mr. Chairman, first of all, I think that 
your statement was well taken in that what we are talking about 
here today is something that appeals to common sense, and that 
is that if you are going to pass a rule or regulation, and we 
are talking about rules and regulations that are over $100 
million nationally, that you ought to use risk assessment and 
cost-benefit analysis to determine whether or not the 
regulation is, indeed, needed.
    In addition, I think that people should be comfortable with 
the fact that OMB and the Office of Science and Technology 
Policy would be the organizations to establish the objective 
criteria by which you go about making those decisions, which 
would, I think, be very helpful to our various Federal 
agencies.
    In addition, I think, in response to Senator Lieberman's 
questions, S. 746 does not override statutory standards nor 
statutory deadlines that are currently in effect today. So 
those are exempted from this legislation.
    It also does one other thing that I think is very important 
and I think was part of the compromise that we put together 
last year on this legislation, and that was that it exempts 
rules where the agency finds for good cause for proceeding 
quickly without complying with S. 746. So there is a provision 
that says that here is something that is very important and for 
just cause, we are going to bypass S. 746 and get out there and 
take care of that situation.
    In terms of the tailpipe issue that Senator Lieberman 
brought up, it is very interesting. Ohio is one of the few 
States that have instituted emissions testing, and as Mayor 
Lashutka knows, I caught a great deal of hell from a lot of 
people for instituting it. By the way, today, we have every 
area in the State but one that complies with the current 
ambient air standards.
    But one of the things is that a lot of groups raised the 
issue about whether or not tailpipe emissions testing really 
does something to help the air. We went back to the EPA, and 
you know something, they did not have the scientific data to 
prove that it did, and so we got Congress to appropriate last 
year $350,000 to do a study for the EPA to verify the fact 
that, indeed, this does make a difference on the environment. 
So we are trying to get at stuff that, from a common sense 
point of view, makes sense, and I would have loved to have been 
able to say to them, hey, the science says this really does 
work. They had not done that.
    I would like to ask Mayor Lashutka, and this is a little 
off the subject, but I am going to ask it anyhow because I 
wanted the Chairman to include this in this bill and he is 
going to do it some other way, you and the ``Big 7'' worked 
hard to ensure that Medicaid was covered by the Unfunded 
Mandates Reform Act of 1995,. However, the Congressional Budget 
Office is misinterpreting the mandates law in a way that takes 
most Medicaid mandates off the table.
    Chairman Thompson has led the charge to correct CBO's 
interpretation, and last year he introduced S. 2068, a bill 
that was cosponsored by Senator Glenn, my predecessor. This 
legislation made it clear that cutting the Federal share of 
Medicaid and requiring States to make up the difference is, 
indeed, an unfunded mandate. I am working with Senator Thompson 
to reintroduce this bill in the 106th Congress and I would like 
to know, does the ``Big 7'' have a position in regard to this 
legislation?
    Mr. Lashutka. Yes. Mr. Chairman, Senator Voinovich, I 
believe the position is in support of that bill. That 
legislation is consistent with the spirit of the debate that 
took place in the unfunded mandates legislation that was 
successful again in 1995 and we think that amendment will be 
helpful to States and local government.
    Senator Voinovich. Thank you.
    Mr. Roberts, some argue that Federal agencies are already 
required to conduct risk assessment and cost-benefit analysis 
under Executive Order 12866. If they are required to do so, why 
is this legislation needed?
    Mr. Roberts. Senator, we are not certain that those 
analyses have always been done as they were required to be 
done. This would strengthen the requirement that such analysis 
be done before the rule is finalized. It would institutionalize 
a way in which State and local government officials might be 
able to participate in that process before it was complete and 
we would regard both of those as advantageous to those agencies 
that are carrying them out on a day-to-day basis.
    Senator Voinovich. I think one of the things that all of us 
are concerned about in terms of rules and regulations, also, 
are that dollars be spent that really make a difference in 
terms of the environment, and I think that, getting back to my 
example about tailpipe emissions and the inconvenience and the 
cost of it, it is nice to know that, whether you are a 
businessman or a governmental agency, that the costs that are 
incurred as a result of what you are being asked to do really 
do make a difference. That makes it a whole lot easier.
    In addition, I think that from a point of view of public 
safety or environment, with dollars that are limited, you want 
to make sure that when you do spend those dollars, you are 
spending them on those things that are really going to make a 
difference and not put them on something that may be the flavor 
of the month and you get into it and you get back later and 
realize that you have invested the money and you are not 
getting your return on it, whereas you could be spending that 
money on something else and really making a difference in terms 
of public safety or the environment or public health.
    Mr. Chairman, I am finished.
    Chairman Thompson. Thank you very much. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    Senator Voinovich raises a specific issue which actually 
had an application in Michigan on the tailpipe emissions. Ours 
was very similar and it illustrates what this bill is really 
all about.
    On the west side of our State, we had three counties that 
were required to go through testing of each automobile, take 
certain action on each tailpipe, because the three counties 
had, I believe, 2 or 3 days a year of excess ozone. The reason 
they had excess ozone in those three counties was because of 
certain air that was blown up from the south. It came up from 
Indiana, Illinois--but in any event, from the south. Let us 
leave it that way.
    Chairman Thompson. But not too far south.
    Senator Levin. Yes, just the right distance. [Laughter.]
    I think we lost Durbin to this cause already. I cannot do 
any more damage.
    Senator Voinovich. You may have lost me. [Laughter.]
    Senator Levin. I think I will actually gain you on this. I 
cannot get more support from you than we have already received.
    Now, EPA then forces every person in those three counties 
to take an action which is totally irrelevant to the air 
quality. If there were no cars in those three counties, you 
would still have the same number of days of violation. You 
could push all the cars into Lake Michigan.
    EPA then became a subject of scorn. People were put to 
expense and trouble to do something (putting aside the fact 
that they did not cause it, forget that) to do something that 
they cannot correct. Two things happened, and I think, Mr. 
Roberts, you and others here already said so. Money was wasted 
that could be used for a good cause and public support for 
environmental protection, through that particular agency, at 
least, is undermined. Both those things happened. Was the 
environment advanced by that? That was the purpose of it. It 
had the opposite effect. That is our tailpipe experience on the 
west side of Michigan.
    First, let me ask the mayor, in your judgment and in the 
judgment of the League of Cities, will this bill in any way 
harm the environment or public safety?
    Mr. Lashutka. Mr. Chairman and Senator Levin, no.
    Senator Levin. Mr. Roberts, you have described briefly the 
work that you do and I would like you just to explain a little 
bit more. You have given us some very good figures in terms of 
the percentage of certain activities which are carried out by 
the States and so forth. Are the States that you represent, 
States and territories, all but, I believe, two or three, you 
said?
    Mr. Roberts. Yes, sir, 52 of 55.
    Senator Levin. The agencies that you represent, the heads 
of those agencies are responsible for protecting the 
environment in those States, is that correct?
    Mr. Roberts. Yes, sir. They are in most instances appointed 
by the governors of the State and confirmed by some element of 
the State legislature. In some instances, they work for 
commissions that have been appointed by the State. But in all 
instances, they are responsible for carrying out the Clean 
Water Act, the Clean Air Act, RCRA, CRCLA, those kind of pieces 
of legislation, and they are, with the exception of the 
governor, the only official in the State that is responsible 
for all elements of environmental protection within the State.
    Senator Levin. Senator Lieberman suggested that the bill 
overturns Congressional mandates or intent, and I do not 
believe that it does. I agree with what Senator Voinovich said 
on that. For instance, Congressional direction to use the best 
available technology or the maximum achievable technology is 
not affected by this bill. This bill adds information where a 
problem is to be addressed by an agency. And, by the way, I 
think the other example you used would also not be covered, 
since the information requirement in terms of the toxics which 
are released into the air does not require any action. It is 
simply an informational requirement.
    Ironically, that is what this bill does. It is a wonderful 
example of a way where information can lead to a result, even 
though it does not mandate a result. I think that the bill 
requiring the listing of toxics that are released into the air 
has had an impact without mandating anything other than 
information. That is what this bill is all about. So, 
ironically, that example, I think, is supportive of the 
approach used by this bill.
    But in terms of your specific point, because the 
requirement does not address a problem by requiring an action 
to be taken relative to it, it does not mandate anything, it is 
my belief that we can work this out, and that this bill's 
requirement would not affect that particular Congressional 
intent.
    Just one final question, Mr. Holman. You have given us a 
very interesting example in your toxic sand. As I understand 
that example, you had a situation where there was a certain 
percentage of sand which could be toxic as a byproduct of your 
processing, your manufacturing process, and that you were 
required to handle it in a certain way which was more expensive 
than how you could have handled that in a different way.
    The issue, then, is not whether or not, as I understand it, 
you are going to address the problem of the byproduct. You 
believe that that problem should be addressed. The issue is 
whether it needed to be addressed in the more expensive way 
required by the Federal regulation or whether or not you would 
be permitted to address the same problem in a less expensive 
way. Is that generally correct, and if not, just correct me on 
it.
    Mr. Holman. The sand has binders in it and certain 
processes have binders that can produce some toxic by the 
standards of the EPA. Most of the sand is not. Most of the 
foundries use binders that do not create that. The point is 
that we have been forced to treat all sand, that 90 percent 
which is not toxic, the same as if it were toxic.
    Senator Levin. Well, now how do you know without treating 
it that 90 percent sand is not toxic? How can you be so 
confident? Do you not have to treat it all in order to cover 
the 10 percent?
    Mr. Holman. Because of the process that you use. For 
example, you know what binders that you are using in the sand 
or that you are buying for that particular process. If you are 
not using that binder in your foundry, you know that you do not 
have that problem.
    Senator Levin. All right. So you are being required to 
treat a byproduct of a process which does not use a binder 
which creates the problem?
    Mr. Holman. That is right. So they are broad-brushing all 
sand with those foundries that use, for example, phenolic 
binders which may require toxic handling with other binders 
that do not require that.
    Senator Levin. All right. And that has an impact on your 
costs?
    Mr. Holman. A tremendous impact on the costs. It is 
trucking, disposal costs, when it could be used for a resource. 
We ought to get paid for it, not have to pay to get rid of it.
    Senator Levin. When you say paid for it, because you could 
use that in another----
    Mr. Holman. As a resource, right.
    Senator Levin. But it has a cost, an expense that you must 
incur to which is useless? It increases the cost of your 
product?
    Mr. Holman. It increases the cost of the product.
    Senator Levin. Does it make you less competitive?
    Mr. Holman. Absolutely, on an international market.
    Senator Levin. It costs jobs, wastes money, no 
environmental benefit, is that a fair summation?
    Mr. Holman. It is a fair summation, and it uses up landfill 
space.
    Senator Levin. Indeed, has an environmental detriment.
    Mr. Holman. That is right.
    Senator Levin. So something which is intended to have an 
environmental benefit is an environmental detriment, costs us 
money which we could use for the environment or public health, 
safety, welfare, and makes you less competitive, which then 
costs us jobs, costs you, obviously, as a small business 
person, money and profit.
    On the international market, do you know what other 
countries would require their small business people to go 
through that same process? Offhand, would you know if any other 
country does that?
    Mr. Holman. I think the only country that I can think of 
perhaps is Canada, but----
    Senator Levin. They might?
    Mr. Holman. They are not a major competitor of ours. We are 
dealing with overseas competitors.
    Senator Levin. Have you talked to your Canadian colleagues 
and asked them if they have the same problem with their 
regulation? I am curious.
    Mr. Holman. No. I have not talked with them.
    Senator Levin. Have we lost significant business to 
countries which do not have that requirement?
    Mr. Holman. Absolutely, and I am talking about India, South 
Africa, the Czech Republic, all of the overseas--we compete 
internationally, as do many metal casters.
    Senator Levin. Thank you. Thank you, Mr. Chairman.
    Chairman Thompson. Thank you very much. Senator Durbin.
    Senator Durbin. Thank you, Mr. Chairman. I want to thank 
the panel for being here.
    I want to follow up on that last question. It really raises 
an interesting challenge to us, since we are in the world of 
global competition, but I think we also have to concede that 
there are certain standards of living in America that we are 
very proud of, the quality of our clean air and clean water, 
the protection of our citizens when it comes to environmental 
standards.
    If we were to be asked to compromise those to be more 
competitive in the world market, I think most American families 
would react negatively. They would say, surely, in our 
ingenuity and creativity, there must be a way to be competitive 
without in any way endangering the water I drink or the air 
that I breathe. So I hope that the global competition argument 
does not suggest that we have to go down to the lowest common 
denominator.
    I have visited China. China is coming on. It is a huge 
economy and everybody is interested in it and it is going to be 
producing a lot. I can tell you that any time of the day or 
night that you get up in Beijing, you will face fog. That fog 
is pollution. It is there when you wake up in the morning, it 
does not burn off at noon, and it is there when you go to sleep 
at night. That fog and pollution comes from burning coal. We 
certainly do not want to accept standards at that level to be 
``competitive'' in the world economy.
    I do not quarrel with your statement, Mr. Holman, nor 
Senator Levin's that there are regulations that go too far, but 
I think we have to keep a perspective here about the fact that, 
yes, in America, we will do it a little differently. We will 
make it a little tougher for business because we believe that 
that is part of the quality of life in this country.
    I would like to ask the mayor here a specific question, 
though, because I want to go back to an illustration he used. I 
do not know much about toxic sand, so I cannot really follow up 
there. But I really do want to address the issue about 
pineapples in Ohio, if I might, because I thought that was an 
illustration that was given and has been mentioned before about 
just how silly regulations can be, the idea of checking for a 
chemical that is being used to grow pineapples in Ohio.
    Yet, when you look more closely, it turns out that there is 
much more to the story. I am going to mispronounce this, but I 
am going to try. The name of the chemical, DBCP, is 
dibromochloropropane. It is a highly persistent pesticide that, 
in fact, has been found in ground and surface water across 
America. It was widely used as a soil fumigant across the 
country on over 40 crops until it was outlawed for most uses 
other than pineapples. DBCP is considered a probable human 
carcinogen. It has been linked to sterility in production 
workers. Therefore, it was restricted from most uses in 1987.
    Due to its persistence, it has been found in 16 of 25 
States that have tested for this pesticide and at levels that 
exceed EPA's drinking water standard in at least 10 States. 
Over 2,000 wells in California alone are contaminated with 
DBCP. This is a report from 1995.
    The cost of testing contaminants in intake water under the 
Safe Drinking Water Act had been wildly exaggerated. EPA 
estimates that, aside from testing for bacteria and lead and 
copper from pipes, the total nationwide testing cost is $60 
million per year.
    The reason I raise that, mayor, is that there is always 
more to the story, and although this pesticide is used on 
pineapples, it clearly was used by a lot of other people for a 
lot of other reasons, and that may be the reason why you had to 
test for it in Ohio, and probably in Illinois.
    I can understand that government can go too far, and maybe 
the toxic sand example is an illustration, but do you not agree 
with me that once you have heard the whole story, that perhaps 
picking out this pineapple pesticide really does not tell the 
story completely?
    Mr. Lashutka. Mr. Chairman, Senator Durbin, I have heard 
nothing from you that would dissuade me that my argument is 
incorrect. There is no evidence of a problem in central Ohio. 
Your reading does not suggest there was. And, in fact, it was 
an illustration, I think, that held the test of time then for 
us and does today.
    I have agreed that there are extreme examples that do a 
disservice to both sides of this argument. It was not my 
intention to do so. I think it fits more into the example that 
my friend, Mr. Holman, said about a well-intended consequence 
that was blanketed for everybody without pinpointing where 
those problems are that should be part of the mission of the 
State environmental protection agencies and U.S. EPA.
    Clearly, a mayor in California with the evidence problem 
would do the same thing. They would test on water quality. What 
you read to me did not suggest anything that that problem 
exists in central Ohio, and yet I am required then to have 
tested it.
    Might I say that that has been corrected by U.S. EPA in the 
interim as we had the debate on the unfunded mandates 
legislation, and it is to their credit they recognized that 
perhaps it was overreaching, as well. At least, that is the 
understanding I have from my folks who run our water treatment 
plant, and it shows a willingness when more information is 
provided that we have the ability to adequately regulate and 
wisely regulate.
    So, no, I would not agree with your conclusion there at 
all. I do not shift my----
    Senator Durbin. Well, let us just go a step further.
    Mr. Lashutka. Sure.
    Senator Durbin. If you have a chemical that is a known 
carcinogen and that has shown up in States across the Nation--
let us see here, now, 16 out of 25 have been shown to exceed 
the EPA's drinking water standard and at least 10 of those 
States--you do not think we should test for that?
    Mr. Lashutka. That is not what I said. I will repeat what I 
said to make sure that you and I are communicating 
appropriately. What I have said is that if there is evidence of 
a problem----
    Senator Durbin. That is fair. I agree with that.
    Mr. Lashutka [continuing]. And what you are saying----
    Senator Durbin. Are you sure there was no evidence of it in 
the State of Ohio?
    Mr. Lashutka. I did not say that. My city is in central 
Ohio. We have a region that has seven cities with a population 
of 100,000 or more. The problems in Columbus are different than 
they are in the industrial belts that include Youngstown and 
Cleveland. We are agriculture, primarily, and service, with 
some industry. Cincinnati and the river has a different set, 
and frankly, that is the spirit of what this legislation is all 
about, is to have information, have it risk based, and address 
those problems legitimately.
    Senator Durbin. I think it is reasonable, I would agree 
with you, that if there is no evidence of this chemical in the 
State of Ohio, to put that standard is not reasonable. There 
has to be some connection. But I want to make the record clear 
that it has a lot more to do with a known carcinogen than 
growing pineapples. I hope that we can both agree that if there 
was evidence in my home State of Illinois or yours of Ohio, we 
would want testing, would we not?
    Mr. Lashutka. There is no question, if there is a 
legitimate problem, I think that there is a responsibility for 
mayors, for regulators at the local and the State and the 
Federal level, and more importantly, I think those people who 
are residents and run the businesses all want the same goal. 
But it is not blanketed. It should not be viewed that all parts 
of Ohio are the same or, frankly, all parts of Illinois the 
same and that regulations that affect Chicago are the same 
thing downstate in Illinois or they are in Columbus versus the 
other parts of our State.
    Senator Durbin. Mr. Roberts, may I ask you a question. 
Going back to Senator Lieberman's question, we passed a law 
that said if you are a business that would emit certain 
chemicals which we considered unsafe, you would be required to 
report that emission so that people in the local community 
would know that you and your plant were emitting these 
chemicals into the atmosphere. It is known as the Toxic Release 
Inventory.
    Getting back to this whole question about cost-benefit 
assessment, there clearly is a cost to the industry involved 
here. They have to report it and probably have to file a lot of 
forms to do it and hire some people to make sure it is done 
right. How would you measure the benefit to the public and 
their right to know that those chemicals were being emitted?
    Mr. Roberts. First, Senator, I do not know whether that 
requirement, if it came along now, would be subject to this 
bill or not, and that is just lack of understanding on my part. 
I do not know whether this requirement for the cost-benefit 
analysis would apply to the Toxic Release Inventory if it came 
along now and it is one of the points that we have indicated we 
will try to respond in writing to Senator Lieberman about.
    It is very difficult to measure the benefit there. I agree 
with you, absolutely. What has happened, as we have noted 
already, is that most of those releases have been reduced 
simply because the industries or factories involved did not 
want to be associated with that maximum release.
    Now, in that current legislation, all that is measured is 
release. Exposure or impact is not measured, and if there were 
a way to measure the exposure or impact that could easily be 
applied, that would be a better measure than the release and it 
would be headed in the direction of this legislation because it 
would be a measure of the risk of that release. But I agree 
with you that it is very difficult to measure what the benefit 
would be.
    Senator Durbin. But I want to follow through, because I 
really think you get to the heart of this legislation with the 
answer you have just given to me. You cannot quantify the value 
of the public right-to-know. How do you put a dollar amount on 
that? I think that is what you said. But I think what you also 
said, you could quantify illnesses or deaths associated with 
it.
    We believed in passing this legislation that there was a 
social value to public information, that mayors, governors, 
Senators, Congressmen would know that these chemicals are being 
emitted, perhaps to give notice to some agency to more 
carefully track, to perhaps suggest that maybe in Columbus or 
Springfield, Illinois, that the emission of these chemicals 
might have a possible impact on groundwater and the drinking 
water of people who lived in the mayor's town or my town.
    So, you see, that is where I have a problem with this 
legislation. You cannot put a dollar sign on everything, and 
trying to put a dollar sign on the public right-to-know, I 
think, really raises a serious defect in this bill.
    Mr. Roberts. I do not disagree with what you are saying, 
Senator. The only addition I would make is that Congress, State 
legislatures, State environmental agencies, mayors, city 
councils, all are driven to make decisions about where to spend 
their resources, and recognizing the limitations of this kind 
of analysis, if it can help make those decisions, we would be 
in favor of it.
    Senator Durbin. Thank you for your testimony. Thank you, 
Mr. Chairman.
    Chairman Thompson. Thank you very much.
    On the Toxic Release Inventory question, the TRI rules do 
not have the primary purpose to address, that is treat health, 
safety, and environmental risks. TRI rules simply require the 
disclosure of emissions information. Therefore, S. 746 would 
not require risk assessment for the TRI rules.
    Insofar as cost-benefit analysis goes, S. 746 would only 
apply that requirement if the Executive Order would require it. 
It is our understanding that TRI rules typically have not had 
an impact of $100 million annually and thus has fallen under 
the requirement for cost-benefit analysis under the applicable 
Executive Order. Since S. 746 contains the same basic 
provisions for applicability of the Executive Order, it cannot 
really be asserted that this legislation will apply where the 
Executive Order does not.
    I believe that is the appropriate answer to the question as 
far as the right-to-know regulations are concerned. It is just 
not what this legislation is designed to affect.
    Unless anybody else has----
    Senator Levin. I just had one comment, one very quick 
comment.
    Chairman Thompson. Go ahead.
    Senator Levin. I could not agree more with Senator Durbin, 
that you cannot put a dollar sign on everything and that you 
surely cannot measure a child's health in dollars. This bill 
does not. Let me just say it again. This bill does not. The 
bill says it six times. I am not going to say it orally six 
times. I just said it twice. But I could not agree more that 
you cannot measure health, or life, in dollars. Now, there are 
some efforts on the parts of some people to do that, to attach 
the value of a life, some of the scientists do try to do that. 
This bill does not--this bill uses both quantifiable and non-
quantifiable benefits.
    I think it is so important that we put that off the table. 
There are a lot of important issues that this bill tries to 
address, but it does not put a value on a human life. If 10,000 
fewer kids are going to be asthmatic because of some regulatory 
action, that is a valuable fact to know. You do not need to 
specify the value in dollars of having 10,000 fewer asthmatic 
kids. Those benefits may be non-quantifiable.
    Senator Lieberman. Mr. Chairman, I just very briefly want 
to put on the record my own--I do not know if I would call it a 
dissenting opinion--but an expression of uncertainty about the 
interpretation of the applicability of S. 746 to the Toxic 
Release Inventory, for instance. And just to read from the 
bill, it says that ``each agency shall design and conduct risk 
assessments in accordance with this subchapter for--(i) each 
proposed and final major rule the primary purpose of which is 
to address health, safety, or environmental risk.''
    So I would argue that a Toxic Release Inventory requirement 
is a rule which has the primary purpose of addressing health, 
safety, or environmental risk, even though it does not mandate 
any behavior beyond the release of the information. But perhaps 
that will be settled by a higher court sometime.
    Senator Levin. Actually, it could be settled by the 
sponsors of the legislation, who have both just spoken out on 
it today. The word ``address'' means treat. But in any event, 
as the two lead sponsors of this legislation, we have just said 
that that is not the intent. We do not think that is what the 
word means. So that should not be a problem in terms of 
clarification.
    Chairman Thompson. I think that is true. My only parting 
comment would be, with regard to the quantifying human life and 
so forth, it is ironic to me that those who would want the 
status quo and put all your trust, faith, and confidence in an 
unsupervised kind of regulatory situation, but at the same time 
think that if we pass this law, that those same people would be 
in some way minimizing the loss of human life or that if you 
look at any of these major rules with regard to teen smoking or 
tobacco sales to children and things like that, the benefits 
greatly outweigh the costs.
    So these same people are not going to change their stripes 
overnight and start minimizing or discounting or in any way 
upsetting the balance as far as what traditionally have been 
the assessments of costs and benefits. Any of those things, as 
far as I have seen, where you have got public health issues, 
kids smoking or the meat inspection rules or anything like 
that, the benefits clearly have always outweighed the costs in 
those assessments and I would assume that they would continue 
to do so.
    Senator Durbin. Mr. Chairman.
    Chairman Thompson. Yes, Senator Durbin?
    Senator Durbin. I was going to suppress the urge to comment 
again, but since you raised the issue of tobacco, I have to 
tell you that that is a classic illustration of why this does 
not work. This Dutch survey that came through and said stopping 
people from smoking allows them to live longer and cost us 
more, if they continue to smoke and die an early death, they 
are cheaper, just to put a cash register up on the table and 
measure it, you would draw a conclusion, well, maybe we should 
not stop people from smoking. But, thank God, we did not draw 
that conclusion. We are trying everything we can and 41 State 
attorneys general are trying to stop them, too. Just measuring 
it in dollars and cents does not work sometimes.
    Chairman Thompson. The FDA, when they looked at it, they 
put, as far as tobacco sales to children, they put the benefits 
at between $28 and $43 billion a year and the costs at $149 to 
$185 million a year. They did not look at it in the same way 
that you are looking at it.
    I would just simply say that, again, these regulators who 
we place our faith and confidence in and the opponents of this 
bill do not want to upset that, I would suggest when they take 
a look at that situation that it is going to be a no-brainer. 
They will not say, oh, my God, because somebody has done this 
analysis, we are going to have to not regulate in this area. We 
are talking about non-quantifiable benefits as well as 
quantifiable and non-quantifiable costs. We have a provision in 
there that says if it is contrary to the public interest, the 
law does not even apply, every safeguard imaginable.
    So, again, we have either got to have some confidence in 
our regulators or not. We cannot have it both ways, I do not 
think.
    But anyway, gentlemen, thank you very much. We have got 
another panel here, so we will not detain you any longer. You 
have been very helpful to us and we appreciate your comments. 
Thank you.
    I would like to turn now to our second and final panel. 
With us today is Professor Ron Cass, Dean of the Boston 
University School of Law and Melville Madison Bigelow Professor 
of Law. Dean Cass is also Chair of the Section on 
Administrative Law and Regulatory Policy of the American Bar 
Association.
    He will be followed by Dr. Lester Crawford, Director of the 
Georgetown University Center for Food and Nutrition Policy.
    Our third witness will be Dr. John Graham, Director of the 
Harvard Center for Risk Analysis.
    Pat Kenworthy will then testify on behalf of the National 
Environmental Trust.
    Our fifth witness will be Frank Mirer, Director of UAW 
Health and Safety Department.
    Dr. Mirer will be followed by David Vladeck, Director of 
the Public Citizen Litigation Group.
    Because this is a large panel, I would like to again 
encourage the witnesses to limit their oral testimony so that 
we can give ample opportunity for questions. Your prepared 
testimony will be included in its entirety in the record.
    Dean Cass, would you like to begin, please?

TESTIMONY OF RONALD A. CASS,\1\ DEAN, BOSTON UNIVERSITY SCHOOL 
                             OF LAW

    Mr. Cass. Thank you, Mr. Chairman, Members of the 
Committee. I appreciate the opportunity to appear here.
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    \1\ The prepared statement of Mr. Cass appears in the Appendix on 
page 100.
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    Let me just make three brief points about this legislation. 
First, I have to agree with Senator Levin that it is hard for 
me to recognize the legislation toward which most of the 
criticism is directed. It is not the bill that I have read. S. 
746 is a fairly balanced bill. It is sensitive to concerns that 
Americans have concerns with regulation, concerns both that the 
government do enough to protect us against risk to health and 
safety and concerns that government not impose undue costs on 
us, our businesses, our State and local governments.
    This is not a bill that overrides concerns for health and 
safety only to look at economic concerns. It is not a bill that 
says, look only at quantifiable costs and benefits. It is not a 
bill that requires agencies to look only at some risks. It 
seeks to get better information on which to regulate.
    Second, given my size, I am very much concerned about 
anything that is one-size-fits-all. It never fits me. This 
legislation is not one-size-fits-all legislation. It is generic 
legislation that deals with all agencies, but it does so in a 
flexible way. It does so in a way that gives the agencies a 
great deal of discretion to choose how they will comply with 
the statute. The agencies are given the option of choosing 
different ways of doing their cost-benefit analysis, different 
ways of doing valuation, different ways of doing risk 
assessment, and different ways of doing peer review.
    Look, for instance, at the peer review section. It says 
that agencies can, if they want to, use institutions, panels of 
experts, or other formal or informal means. If they use a panel 
of experts, they choose the experts. I do not see any reason to 
believe the agencies will choose the wrong experts. If you 
trust the agency, as we said a moment ago, if you trust the 
agency to do the regulation in the first place, you should 
trust their choice of experts.
    In addition, the legislation has not just one but at least 
two safety valves in it. There is a safety valve express in the 
legislation that allows agencies to say, here is why we cannot 
do this in this case. There are also safety valves in the 
Administrative Procedure Act whose definition of rules is used 
in this legislation, so that if there is an emergency, there is 
not time to go through the ordinary notice and comment 
proceeding, the agency can choose not to come within the 
definition of ``rule'' that is in this legislation.
    Third, judicial review. There is an assumption that is made 
in some testimony that somehow this bill changes what courts 
are going to do in a radical way and gives courts a tool that 
they can use to eviscerate health and safety regulation. I do 
not see that anywhere in this bill. It is a bill that leaves in 
place the standards of judicial review that exist today. If an 
agency refuses to comply at all with the law, a court can, but 
it does not have to, reverse or remand the agency decision.
    Other than that, the judicial review provisions intend to, 
and I think generally do, leave in place the standards of 
review under the Administrative Procedure Act. In my written 
statement, I have recommended one small change to make that 
even more clear.
    Thank you again, Mr. Chairman, Members of the Committee, 
for letting me comment here.
    Chairman Thompson. Thank you very much. Dr. Crawford.

 TESTIMONY OF LESTER M. CRAWFORD,\1\ DIRECTOR, CENTER FOR FOOD 
          AND NUTRITION POLICY, GEORGETOWN UNIVERSITY

    Mr. Crawford. Thank you very much, Mr. Chairman. I am 
Director of the Center for Food and Nutrition Policy at 
Georgetown University, but prior to that assignment, I was in 
leadership positions in food safety at the Food and Drug 
Administration and also at the U.S. Department of Agriculture 
from 1978 to 1991. It is from that perspective that I present 
my comments on the bill.
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    \1\ The prepared statement of Mr. Crawford appears in the Appendix 
on page 107.
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    I am pleased to note from the last time I testified on a 
predecessor bill that there has been improvements in the bill 
that were discussed then, some of which were included in my 
testimony, and I appreciate that very much, indeed.
    I also believe, though, that the new bill is improved in 
many other ways that I think will help the regulatory process 
in the Federal Government. I would like to make comment with 
respect to the food safety and public health aspects of the 
bill.
    There are three tools that are institutionalized in the 
bill. The first is the cost-benefit analysis, and I very much 
appreciate the earlier discussion among the Senators about this 
aspect of the bill. One has to be very careful in talking about 
cost-benefit with respect to human health, death, disease, and 
suffering, and I appreciate the safeguards that are present in 
the bill in that regard. Also, I am pleased to see that the 
bill does not override the so-called super mandate.
    The second thing that would be institutionalized--risk 
assessment--is extraordinarily important and is rapidly 
becoming the international language of food safety. We recently 
held a risk assessment consultation at the World Health 
Organization in Geneva in which an attempt was made to publish, 
in effect, a book which will recommend to all governments that 
they use this as the means of communication within the 
government and also to their various publics and between 
governments in an effort to make more rational decision making 
in terms of public health, and particularly food safety.
    So I think you are right on the cusp of a revolution in 
communication both within the government, within the scientific 
apparatus, and also between regulators and the public and it is 
going to make a large difference in how we agree on major 
efforts in public health.
    The third thing is peer review, which has been called the 
surety bond of science. Peer review is the modern day 
application of the old adage, two heads are better than one. It 
has been tried in the government a couple of times with great 
success, in my view.
    In 1958, the Food Additives Amendment created the term 
``generally recognized as safe,'' which embraces the idea that 
if you can empanel an uneven number of experts in a field and 
they say that a substance is generally recognized as safe, then 
FDA may conclude the substance is safe.
    A number of years later, FDA institutionalized while I was 
there the concept of product specific advisory groups such as 
the oral contraceptive advisory group, diabetes drug advisory 
group, and so forth. These are, in effect, peer reviewers who 
look at the evidence, look at what FDA may be proposing to do, 
and makes a judgment. The fact that you have included peer 
review in the bill will make available to the Federal 
Government in one expertise than has been the case in the past.
    I think these three tools would be a great help. Now, let 
me use the case example to illustrate my point.
    Previously, it was mentioned that the Hazard Analysis 
Critical Control Point system, HACCP, is a new food inspection 
standard not only in this country but in the world. The United 
States almost was the leader in this field. We discovered the 
concept in the United States, and following a National Academy 
of Sciences study in 1985, we attempted to convert HACCP to a 
regulatory tool. We were ready by 1989 to propose to the 
country and also to decision makers at the highest level in 
this government that the inspection programs be converted to 
HACCP, but we had difficulty in communicating to OMB the value 
of the concept because decision making in that distant time, 
just 10 years ago, was largely intuitive and subjective and it 
was difficult for regulators and scientists to find at OMB a 
common ground for discussion.
    We performed risk assessments, but they were not able to 
take those and see in them the same things we were, so they 
resorted to various regulatory and administrative subterfuges 
to slow down the process, one of which and the last of which 
was the Paperwork Reduction Act. The process envisioned by S. 
746 would have averted this unfortunate development. Had we had 
that, I believe HACCP would have been implemented about 3 years 
earlier.
    I believe that S. 746 will lead to better, more efficient 
government, and I am convinced the bill provides a framework 
wherein regulatory initiatives can be fairly and openly judged 
in a transparent manner. My conclusion is that the bill will 
institutionalize risk assessment as a calculus for regulatory 
decision making. To the extent that this is the case, S. 746 
will bring the United States in congruence with its 
international trading partners and the long-sought goal of 
science-based decision making will at last have been realized.
    Thank you, Mr. Chairman.
    Chairman Thompson. Thank you very much. Dr. Graham.

  TESTIMONY OF JOHN D. GRAHAM,\1\ PH.D., DIRECTOR, CENTER FOR 
         RISK ANALYSIS, HARVARD SCHOOL OF PUBLIC HEALTH

    Mr. Graham. Thank you, Mr. Chairman. I am Professor of 
Policy and Decision Sciences at the Harvard School of Public 
Health, where I teach the methods of risk analysis and cost-
benefit analysis. Mr. Chairman, I am honored to be here today 
to offer my enthusiastic support for the Regulatory Improvement 
Act.
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    \1\ The prepared statement of Mr. Graham appears in the Appendix on 
page 109.
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    For the last 15 years, I have studied the decision making 
at Federal agencies responsible for protecting public health, 
safety, and the environment. Although each of these agencies 
serve a vital public function, I have found the decisions of 
these agencies are not always grounded in a good understanding 
of science, engineering, and economics. As a result, our 
regulatory system is far less effective and efficient than it 
could and should be.
    One of my previous doctoral students at Harvard, now 
Professor Tammy Tengs at the University of California at 
Irvine, found in her doctoral dissertation that life saving 
investments in the United States are often inefficient. Based 
on a sample of 200 policies, she estimated that a reallocation 
of life saving resources to cost-effective programs could save 
60,000 more lives per year than we are currently saving at no 
increased cost to taxpayers or the private sector.
    Please let me cite three concrete examples of flawed 
regulatory decisions that resulted from inadequate regulatory 
analysis. Example one, the risks of cleaner gasoline, MTBE. In 
the 1990 Clean Air Act, Congress sought to reduce pollution in 
city air by ordering EPA to force an increase in the oxygen 
content of gasoline. EPA later issued a rule that permitted a 
particular chemical, MTBE, to be used in compliance with the 
mandate. Now that MTBE is widely used in gasoline throughout 
the United States, serious questions are being raised about the 
safety and toxicity of MTBE. There are also reports that this 
highly persistent chemical is contaminating groundwater 
supplies in several regions of the country.
    EPA is now scrambling around trying to find evidence in 
support of this mandate, and they have recently kicked this 
issue, this hot potato, to an independent commission. That may 
be helpful, but what is missing today is the same thing that 
was missing in 1990, a careful risk-benefit analysis of MTBE 
and its alternatives.
    Example two, mandatory fuel economy standards. During the 
oil crisis of the mid-1970's, a Federal agency was charged with 
regulating the average fuel economy of new vehicle fleets. As a 
result, cars have become more fuel efficient, but they have 
also become smaller and lighter than they would otherwise have 
been, causing an additional 2,000 to 3,000 additional traffic 
fatalities each year because of the inferior occupant crash 
protection provided by smaller vehicles.
    More recently, the objectives of this entire regulation 
have begun to be circumvented by the growing popularity of 
sport utility vehicles, a class of vehicles that has not yet 
been seriously analyzed for its safety and environmental 
consequences.
    Example three, passenger air bags and children. When air 
bags were mandated in the early 1980's, concerns were raised 
that the passenger air bag might be dangerous to children 
seated in the front seat. Technical papers by engineers from 
General Motors and Honda had already quantified the potential 
dangers of these air bags to children. The relevant Federal 
agency, NHTSA, did perform a risk assessment of air bags, but 
it was not subjected to independent peer review. NHTSA analysts 
concluded the passenger air bag could endanger children under 
rare circumstances, but the problem was unlikely to be 
widespread and serious.
    To the agency's credit, now 15 years later, NHTSA has 
published a real world analysis showing how wrong their early 
predictions were--increases of 20 to 100 percent in the risks 
to children in cars with passenger air bags have been shown. In 
this case, NHTSA designed a regulation that has harmed children 
unnecessarily because the underlying analysis was flawed and 
never subjected to independent peer review.
    Looking back on these three examples, it must be 
acknowledged that we have much more knowledge today than 
Congress and agencies had when these regulations were 
originally formulated. The benefits of hindsight are certainly 
considerable. Nonetheless, it is my opinion that in each of 
these cases, the regulatory decisions and the subsequent 
actions by Congress might have been very different and smarter 
if the agency had performed the kinds of analysis mandated in 
the bill we are discussing today.
    Thank you very much, and I look forward to the question 
period.
    Chairman Thompson. Thank you very much. Ms. Kenworthy.

    TESTIMONY OF PATRICIA G. KENWORTHY,\1\ VICE PRESIDENT, 
        GOVERNMENT AFFAIRS, NATIONAL ENVIRONMENTAL TRUST

    Ms. Kenworthy. Good morning, Mr. Chairman. On behalf of the 
National Environmental Trust, I wish to thank you and Senator 
Lieberman, as well as other Members of this Committee, for the 
opportunity to present our views today about S. 746. I am Vice 
President for Government Affairs and Senior Attorney at the 
National Environmental Trust, and prior to joining NET 2 years 
ago, I was Director of Regulatory Affairs for Monsanto Company.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Kenworthy appears in the Appendix 
on page 118.
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    We believe there are a number of serious problems with the 
bill. It will, in our opinion, greatly increase the time 
required for agencies to make regulatory decisions. No 
provision is made for a corresponding increase in resources to 
address these newly imposed burdens. We believe that attempting 
to accomplish sweeping reform by enacting a single 
comprehensive statute is bound to result in unforseen and 
unintended consequences, including in some cases subjecting new 
rules to inappropriate analysis that was never intended by the 
authorizing statutes.
    Senator Lieberman mentioned the Toxic Release Inventory 
law. I would like to take that example a little bit further, 
although quite a bit has already been said about it here this 
morning.
    As has been discussed, this law is not a risk-based 
statute. It is simply a community right-to-know law. It is an 
example of the potential for unintended consequences that this 
legislation would create. By the way, our information is that 
TRI rules have been subjected to the Executive Order and under 
that test would certainly be subject to the mandates of S. 746.
    If TRI laws and other community right-to-know laws and many 
other examples that can be enumerated of rules to which this 
statute would create unintended consequences, we believe simply 
that those things should be specifically excluded. As Senator 
Lieberman pointed out in his response to the Chairman's 
comments, we can all read the statute a different way about the 
applicability of some of these things. It is not all that 
clear.
    We read S. 746 to require that a risk assessment be 
performed before a new regulation can be promulgated in order 
for the benefits to be calculated. This brings up an important 
point about risk assessment and cost-benefit analysis 
generally. These evaluations are not a panacea to prevent bad 
regulatory decisions. Risk assessment and cost-benefit 
evaluations inform, surely, but do not provide answers to hard 
questions. The answers to how to regulate a particular risk 
must in the end always be based on value judgments.
    We have heard a great many anecdotes and examples here this 
morning intended to demonstrate how irrational the existing 
system is and that are supposed to show that S. 746 would 
improve the system. In any large and complex regulatory system, 
there will be errors, there will be foolish results, and there 
will be bad decisions. As Senator Durbin has pointed out, in 
some of the particular cases we have heard about this morning, 
there has been and is more to the story.
    In any event, S. 746 would not have changed the outcome of 
most of the examples we have heard this morning, even if it had 
been enacted. The better approach, in our opinion, is to deal 
with particular situations, with particular problems that may 
arise from individual statutes on a case-by-case basis.
    There is very real potential for unintended consequences 
when an attempt is made to reform perceived regulatory problems 
with a comprehensive piece of legislation. This bill attempts 
to address an array of many different statutes that have 
diverse purposes and goals. These many affected statutes are 
administered by many different Federal agencies with distinct 
missions. We do not think this kind of comprehensive 
legislation can possibly effect improvement under those 
circumstances. We believe that, instead, it would create 
confusion and inconsistencies and do great harm to agencies' 
abilities to protect health, safety, and the environment. It is 
for these reasons that we oppose this legislation.
    Thank you again for this opportunity to testify.
    Chairman Thompson. Thank you very much. Dr. Mirer.

TESTIMONY OF FRANKLIN E. MIRER,\1\ DIRECTOR, HEALTH AND SAFETY 
DEPARTMENT, INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE, 
      AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW)

    Mr. Mirer. Thank you very much, Mr. Chairman. I am very 
pleased to be back. Senator Levin, I bring greetings from Green 
Acres.
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    \1\ The prepared statement of Mr. Mirer appears in the Appendix on 
page 132.
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    Chairman Thompson. We are having a reunion of a lot of old 
friends today, are we not?
    Mr. Mirer. Right.
    Senator Levin. Old neighbors.
    Mr. Mirer. I heard a lot of John Graham's issues when I was 
on his advisory board and I am pleased to speak again. In part 
of my role in the UAW, I visited 46 foundries myself. Dealing 
with the previous example, spent foundry sand is filled with 
carcinogens. The workers that breathe that dust suffer excess 
mortality from lung cancer. The exposures are only partly 
regulated by OSHA, partly as a result of 13 years of litigation 
by the UAW. We would hope to address the rest of them. So I 
would not view foundry sand as safer than dirt myself and would 
not have it in my backyard.
    Next week, the UAW will observe Worker Memorial Day. 
Hundreds of local unions will fly flags at half mast to 
recognize workers killed, injured, made ill on the job. Many of 
the fatalities and virtually all of the occupational disease 
identified among our members by research arose from conditions 
not covered, or exposures permitted by existing OSHA standards. 
We are back here opposing S. 746 because it contains no 
provisions that would facilitate improving OSHA standards, and 
would do the opposite.
    In my testimony, I describe the history of metal working 
fluid standards, as yet another example of the real world 
potential of S. 746. There are about a million American workers 
exposed to metal working fluids. Our efforts began in the early 
1980's when we did several studies in Connecticut bearing 
plants showing increased cancer among our members there.
    My full testimony describes an outbreak of serious lung 
disease, hypersensitivity pneumonitis at Chrysler's Kenosha 
engine plant, affecting dozens of workers, some of whom will 
never come back to work. I talk about the extraordinary efforts 
of Chrysler, UAW Local 72, the Wisconsin Health Department, and 
NIOSH in responding to this problem.
    The key point is that there was no exposure in that 
facility remotely approaching OSHA's permissible exposure 
limit, and no OSHA requirement for medical surveillance for 
those employees that would have stemmed the outbreak before it 
got as bad as it did.
    We have been working on this problem a while, starting in 
the 1980's. After a decade of research, we petitioned OSHA for 
a new standard. In 1993, after 4 years, OSHA formed a 17-member 
standards advisory committee. We have had eight or nine 
meetings, traveled around the country. After we get done, there 
will be at least a 2-year delay to get the proposal issued with 
the existing processes, even to get to a public hearing. That 
is the present situation.
    Now, if S. 746 were to become law, even if the 17 members, 
union, management, and public health representatives reached 
complete agreement on every issue in the standard, OSHA would 
still have to conduct a new formal risk assessment, a different 
cost-benefit analysis than what is required under the statute, 
a substitution risk analysis, comparative risk analysis. Then 
OSHA would have to subject it to peer review before the 
proposal would be formally issued for public comment. So the 
specific provisions in this bill would add years of additional 
delay.
    I also want to talk a little bit about the so-called peer 
review provisions. From personal experience as a peer reviewer, 
they are actually substantially less accountable, less 
transparent, less open than the current OSHA procedures. OSHA 
now holds an informal public hearing on the proposal to which 
everybody can come, everybody can ask questions, and all the 
evidence is questioned by the parties of interest. The process 
is open, on the record, exhaustive. The President's Commission 
on Risk Assessment and Risk Management recognized this as 
equivalent to peer review.
    By contrast, the additional peer review process required in 
S. 746 is closed. Participation is limited. By its nature, 
workers would be excluded from participation and it would 
involve industry representatives with conflicts of interest and 
it permits decisions to be made on secret information.
    I have done peer review of journal articles and peer review 
of grants. Peer review is a secret, closed process. Sometimes, 
the identity of the reviewer is concealed from the person who 
submitted the journal article, and the identity of the author 
of the journal article is concealed from the reviewer. So I 
just do not think it is an appropriate process, certainly not 
in all cases, and not as good as what we have now.
    I make some other general points about whether the 
specifications in the bill and cost-benefit analysis are 
appropriate, whether it is burdensome or not. The bill kicks in 
with an OSHA standard that costs the average employer $17 a 
year. A major rule at OSHA is something that costs an employer 
$17 a year.
    Let me close by saying what would really solve some of the 
regulatory problems, the standard setting problems at OSHA and 
see whether we see any of these in S. 746.
    First, I think it is important to recognize that the OSHA 
process is actually more transparent, open, and accountable 
than the new peer review process and that has to be specified.
    Second, we have got a lot of off-the-record, opaque, hidden 
processes in this business already, SBREFA review, some of the 
aspects of OMB review not fully covered by the Executive Order 
or the language here. All of that has to be brought into the 
open so that we, the advocates of the regulation, have the 
right to question those people who are involved in the 
regulatory process.
    Third, we have to provide the same access to judicial 
remedies for the parties who wish to challenge the agency's 
failure to act. As much of the litigation at OSHA is over 
agency's failure to act to protect, as those who would oppose 
action.
    And finally, not only will this legislation add delay to 
the standards process that is already decades long, but it will 
also reduce the number of hazards which the agency can take up 
by soaking up resources for some analyses that are irrelevant.
    So I think those four issues have to be addressed if we are 
going to have anything like a balanced approach to public 
health protection. Thank you very much.
    Chairman Thompson. Thank you very much. Mr. Vladeck.

  TESTIMONY OF DAVID C. VLADECK,\1\ DIRECTOR, PUBLIC CITIZEN 
                        LITIGATION GROUP

    Mr. Vladeck. Thank you, Mr. Chairman, Members of the 
Committee. Thank you for inviting me again to testify on this 
bill.
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    \1\ The prepared statement of Mr. Vladeck appears in the Appendix 
on page 143.
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    I bring to the table 20 years of experience as a lawyer 
representing consumers, workers, and others who are dependent 
on our health and safety agencies to protect them from 
hazardous workplaces, from foods that may be adulterated, from 
dangerous drugs and other consumer products. It is difficult 
for me to find myself in disagreement with people who I respect 
and people who share common aspirational goals.
    We all want to see better, more efficient, and improved 
rulemaking and decision making. But today, our health and 
safety agencies are on the brink of paralysis. OSHA takes 10 
years or more from start to finish to get a rule out to protect 
workers. That is intolerable. It can take EPA just as long. The 
Department of Agriculture, as Dr. Crawford already made clear, 
spent years developing HACCP. It is not in place today and 
there is no HACCP standard for prepared or packaged meats that 
is even on the table.
    I would suggest to Congress that it ought to tackle the 
gridlock that now paralyzes our regulatory agencies rather than 
look at S. 746, which will only add to that delay.
    I would like to start out this morning by talking about how 
and why S. 746 is going to condemn agencies to regulatory 
paralysis. One thing that S. 746 does that has not been talked 
about is it dictates a structure that agencies must follow in 
their rulemaking process. This is clear. This is not 
flexibility by any stretch. The first thing that the agency 
must do, well before it begins formal rulemaking, is it has to 
publish notice that it is about to undertake a risk assessment. 
It must solicit information from the regulated industry as well 
as from the public. That is before it begins.
    It is also required to consider all relevant information 
that is reasonably available. This requirement is unbounded. It 
is not limited durationally. It extends until the date the 
final rule is published. It is an undoable task for the agency 
to be on a treadmill, always assimilating new data when it 
comes in, yet that is a requirement of this bill.
    The agency then has to follow what I believe are relatively 
prescriptive requirements for risk assessment, requirements 
that are far more prescriptive than exist today in the 
Executive Order or any other source of law.
    Finally, the agency then has to submit its risk assessment 
to a peer review organization. That will take time. This is 
just the first step of the agency's sequence, because the 
agency is directed to include the results of the risk 
assessment in the cost-benefit analysis, which is the second 
step of this sequence. This, too, is a laborious, long process 
that will require the agency to devote considerable time and 
effort to preparing before it even begins the rulemaking.
    Then, again, a new requirement, unmatched anywhere else in 
law, agencies must address substitution risks, and for agencies 
like OSHA and EPA, which by definition regulate where there 
will be substitution risks, this, too, is a very considerable 
task.
    Only after the agency completes all of these tasks may it 
take even the first step in the regulatory process, which is to 
publish a notice of proposed rulemaking. It cannot be seriously 
argued that this bill will not add considerably to the delay 
that is already paralyzing our regulatory agencies. That is 
wrong. It is bad policy.
    The second thing I would like to talk about is judicial 
review. I disagree with my good friend, Ron Cass, that the 
judicial review provision in this bill is benign. I think there 
are many problems with it. I would like to focus only on one.
    It has at least been commonly understood in discussions 
with staff that this bill was not intended to allow a rule to 
be set aside or remanded if the agency performed the risk 
assessment, performed a cost-benefit analysis, but did not do 
so in the manner prescribed by the statute. I do not think this 
bill, the way it is drafted, achieves that result, and there 
are three reasons for my conclusion.
    The first is, this bill does not contain language that was 
in its predecessors that said rules could be remanded only if 
the agency failed entirely to perform these functions. That 
language has been deleted.
    Next, the bill says that the adequacy of compliance with 
specific requirements of this subchapter shall not be grounds 
for invalidating the rule. But the phrase ``adequacy of 
compliance'' suggests that compliance with specific 
requirements is reviewable, but adequacy is not. It is a 
dangerous formulation that invites mischievous judicial review.
    And third, and this is my last point, the act sets forth 
very prescriptive provisions governing risk assessment, cost-
benefit analysis, and so forth. A reviewing court is going to 
be skeptical that you in Congress wanted the agency to do this 
but could simply put in a piece of paper labeled ``risk 
assessment'' and that would foreclose judicial review. I think 
that is an untenable position to take. I think the way this 
provision is drafted, you are inviting courts to set aside 
agency rules simply because the agency, in performing the risk 
assessment, the cost-benefit analysis, did not dot its ``i''s 
and cross its ``t''s. That could have devastating consequences 
for agency rules.
    Chairman Thompson. Thank you very much.
    On your last point first, Senator Levin and I have spent a 
long time on this, and if somebody can come up with a way to 
make this clearer, I would welcome the suggestion. The idea 
that the court can throw the analysis out because of the 
adequacy of the cost-benefit analysis or the risk assessment is 
just totally unfounded. I do not know how it could be any 
clearer.
    It says in Section 627(d), the cost-benefit analysis, cost-
benefit determination under Section 623(d) and any risk 
assessment required under this subchapter shall not be subject 
to judicial review separate from review of the final review to 
which such analysis or assessment applies. The cost-benefit 
analysis, cost-benefit determination under Section 623(d) and 
any risk assessment shall be part of the rulemaking record and 
shall be considered by a court to the extent relevant only in 
determining under the statute granting the rulemaking authority 
whether the final rule is arbitrary and capricious and abuse of 
discretion or unsupported by substantial evidence where the 
standard is otherwise provided by law. Then Section 623(e) says 
that if you fail to perform the cost-benefit analysis or risk 
assessment, a court may remand or invalidate the rule.
    Can you think of a way that we can draft that to make it 
any clearer? Obviously, the rule in and of itself, if it is 
arbitrary and capricious, the court can throw it out, but the 
court clearly cannot pick out the cost-benefit analysis or the 
risk assessment and consider that individually and the adequacy 
of that individually in order to throw the rule out. It goes 
into the entire rule and the court has to consider the rule. 
Can it be any clearer than that?
    Mr. Vladeck. Well, I take it your question is directed to 
me. I think it could be much clearer and I think you should go 
back to the language in the Glenn-Chafee bill that included a 
qualifier between fails to perform such as entirely and you 
take out the lead in the next sentence, the adequacy of, 
because what you are doing is you are inviting the court to 
review--not to review adequacy, but to do a checklist.
    Remember, under this statute, a cost-benefit analysis is 
only one done in accordance with the strictures laid out in the 
statute. If you look at Section 621, the definition of cost-
benefit analysis says it is one performed in accordance with 
the mandates laid out later on in the statute. If you take out 
that language, you significantly alleviate the possibility that 
a court will do what I have just said, which is----
    Chairman Thompson. Take out what language, the adequacy of?
    Mr. Vladeck. The adequacy of.
    Chairman Thompson. And just say the compliance?
    Mr. Vladeck. The first thing I would do is I would go back 
to Glenn-Chafee. That is the best and clearest way to fix this 
concern, which is to use a qualifying phrase like--and I would 
be glad to work with your staff on this, and Paul knows these 
arguments backwards and forwards--but to use qualifying 
language like that, that would make it crystal clear to a 
reviewing court that if, for example, the agency failed to--in 
the risk assessment requirement, you have to describe the major 
uncertainties in each component of the risk assessment. If you 
have failed to do that, that may be grounds----
    Chairman Thompson. But it says that the risk assessment 
shall not be subject to judicial review, separate and apart.
    Mr. Vladeck. No, but suppose there is a challenge to an 
agency final rule? One argument that will be made is that the 
final rule is not rational. It is arbitrary and capricious 
because there are flaws in the risk assessment. The flaw in the 
risk assessment----
    Chairman Thompson. And that would be valid only if it is so 
flawed that it makes the final rule arbitrary and capricious.
    Mr. Vladeck. I am suggesting another ground for remand.
    Chairman Thompson. I beg your pardon?
    Mr. Vladeck. I am suggesting a different ground for remand. 
The argument you made is the conventional argument. Yes, the 
rule itself is irrational as demonstrated by the flaw in the 
risk assessment. There is a second line of argument made 
available under this bill, which is that the risk assessment is 
flawed because it omits consideration of something mandated by 
this rule. Therefore, the agency failed to perform the risk 
assessment as Congress has decreed and that independently may 
provide a reviewing court a ground for setting aside or 
remanding a rule.
    Chairman Thompson. We cannot give risk assessment total 
immunity. I mean, no matter how flawed it is, it becomes a part 
of the rule. You have to look at the rule including the risk 
assessment.
    Mr. Vladeck. Risk assessments are already judicially 
reviewable. In fact, courts look at them all the time. The 
UAW--in a case that I represented them--won an OSHA case 
challenging the adequacy of a risk assessment. There is nothing 
unusual or unconventional about that.
    Chairman Thompson. This has some additional elements that 
the court considers.
    Mr. Vladeck. That is correct.
    Chairman Thompson. Professor Cass, what am I overlooking 
here? We tried to provide a belt and suspenders to this thing 
and still, evidently, we have not accounted for the imagination 
of good lawyers. What do you think?
    Mr. Cass. Well, Mr. Vladeck is right about one thing, and 
that is that he and I disagree on this. [Laughter.]
    I think the legislation is crystal clear on this point. I 
think you cannot read Sections 622 and 627(d) and (e) and come 
to the conclusion that a court is invited to go off and do a 
detailed review of the risk assessment and then throw it out if 
the judge does not like the way it has been done.
    Unfortunately, in my profession as a law professor, we tend 
to focus on the really odd case, on the court that goes way off 
the deep end. There are 22 million civil actions a year of 
which the Supreme Court hears argument in about 85, and one of 
those every few years makes it into a case book. Those are the 
ones we spend all our time on. It gives us something of a 
warped view of the system.
    I think this legislation is quite clear. I do not see the 
risk that Mr. Vladeck does here at all.
    Chairman Thompson. All right. Let me ask some of you to 
address another criticism that we have heard fairly 
consistently. The reference is made to the OSHA process and 
perhaps the EPA process, it takes 10 years to get a rule, and 
so forth. I assume going in there is an awful lot that we all 
agree on here that we are trying to do, and transparency is 
good, using the best scientific analysis is good. Even having 
some, regardless of what kind of review it is, having some 
process or someone of expertise, if it is fair and balanced, 
looking at all of this. A lot of this is incorporated in the 
Executive Order. So, as I say, we pay lip service that this is 
a good idea. If it is not a good idea, it should not be in the 
Executive Order.
    But having agreed on all those things, there still is 
clearly concern that what we are doing here is going to slow 
down the process. It takes, let us say, 10 years to get some of 
these rules done. There is one major OSHA rule a year or 
something like that, I guess.
    Dr. Graham, what would be your feeling about that?
    Mr. Graham. Mr. Chairman, I wanted to share with the 
Committee the results of a book provocatively entitled ``The 
Fifth Branch: Science Advisors as Policy Makers,'' written by 
Professor Sheila Jasanoff, then at Cornell University, now at 
the Kennedy School of Government. And what she did is she 
reviewed those health, safety, and environmental agencies that 
currently use independent peer review. She looked at case 
studies of what happens when independent experts from 
universities and think tanks review the analyses performed by 
agencies.
    Let me give you just a paraphrased summary of her 
conclusions. One scientific peer review can actually shorten 
the rulemaking process by increasing technical consensus about 
whether regulation is necessary and increasing the credibility 
of the agency in the decisions that it makes.
    Two, when scientific peer review is routine and rigorous, 
judges are less likely to second guess agency decisions because 
those decisions have been supported by independent scientific 
peer review.
    Third, it is a myth that scientific peer review is a 
pretext for delaying decisions. Early peer review can actually 
accelerate regulatory decisions by building consensus about 
what science says on the issue.
    Four, agencies have developed workable procedures for 
handling conflict of interest issues, though continued 
vigilance is required.
    The academic literature on this subject, the studies of the 
actual peer review process, do not suggest that some of the 
perilous stories that you have been told would actually take 
place.
    Chairman Thompson. Are there any examples of where a cost-
benefit analysis was used in order to expedite a process or 
make a process more politically palatable, to allow it to take 
place sooner, in your opinion?
    Mr. Graham. I do not know an example on the cost-benefit 
analysis off the top of my head, but I think there is a very 
good one in the case of the Safe Drinking Water Act. Under the 
Safe Drinking Water Act, there already is a mandatory 
requirement for independent peer review. In the case of 
nitrates, a contaminant of drinking water, an agency scientist 
misread the underlying toxicological and epidemiological 
literature and was going to set a standard that was not 
protective enough of infants who might be exposed to nitrates. 
The independent peer review process exposed this error and 
caused the agency to set the maximum contaminant level tighter 
than it otherwise would have been. That is a case of peer 
review making the process more protective of public health and 
the environment. So I do not think we should assume that peer 
review is going to be a bad thing for these public health 
agencies.
    Chairman Thompson. Before my light goes off, let me ask Dr. 
Crawford. I will get in under the wire here.
    Mr. Crawford. Yes. I agree with Dr. Graham. I guess every 
witness has more or less said that some of these rules take too 
long. We have talked about some that took 10 years. I can tell 
you one when I was at FDA that took 24 years.
    But the question is whether or not we are going to do 
something about it or whether we are just going to continue to 
bemoan the fact that the regulatory process is out of control. 
I think these systems, as Professor Graham mentioned, when I 
was in the government, would have helped us establish 
diplomatic relations with OMB and we could perhaps, I believe, 
have gotten things like HACCP through much quicker. I just know 
we could, because we eventually had lost communications and 
also perhaps scientific credibility that peer review and risk 
assessment would have given us back.
    Chairman Thompson. Thank you very much. Senator Levin.
    Senator Levin. Thank you, Mr. Chairman.
    Mr. Vladeck has testified that the USDA could not have 
initiated, and these are his words, the HACCP rule, or at best 
would have been severely hampered by it, had S. 746 been in 
effect, and I am wondering, Dr. Crawford, whether you agree 
with that.
    Mr. Crawford. Actually, in the predecessor bill hearing 
last year, we did evaluate HACCP under what would happen if the 
bill had been passed. We found out that HACCP would have passed 
with flying colors. There would be a $2 billion, as I recall, 
on the plus side for HACCP. So that, again, would have been a 
compelling case for us to override OMB's worries about the 
Paperwork Reduction Act, whatever that was.
    Senator Levin. Would it have gone through possibly even 
faster?
    Mr. Crawford. It would have gone through, I would say, 3 
years faster.
    Senator Levin. If this bill were in effect?
    Mr. Crawford. Yes.
    Senator Levin. Now, if there is a case where these 
provisions are creating delay, and I will ask you, Mr. Vladeck, 
is it not true there is a provision in this bill which says 
that the agency may proceed without taking these actions if 
doing so, if conducting the regulatory analysis, would be 
contrary to an important public interest? You at least agree 
that language, that safeguard is in the bill?
    Mr. Vladeck. Yes, sir.
    Senator Levin. I know you do not think it is adequate, but 
you would agree, at least, the language is there?
    Mr. Vladeck. You have my position.
    Senator Levin. All right. Now, you have also testified, Mr. 
Vladeck, that S. 746 requires that an agency ``certify that its 
rule optimizes economic efficiency,'' and then you go on from 
there. I would suggest to you that you are going back. We do 
not have a certification the way Glenn-Chafee did. Glenn-
Chafee, a bill which many of the groups supported, now oppose 
our bill. Glenn-Chafee had a requirement that there be a 
certification that the rule produce benefits that will justify 
the costs.
    Indeed, the Executive Order which we now have says that 
each agency shall assess both the cost and the benefits of the 
intended regulation, and recognizing that some costs and 
benefits are difficult to quantify, propose or adopt the 
regulation only upon a reasoned determination that the benefits 
of the intended regulation justify the costs. That is the 
current Executive Order.
    We do not do that. We do not have a requirement that there 
be a determination that benefits justify cost. We do not have a 
certification. We have a determination as to whether or not the 
rule is likely to provide benefits that justify the costs, and 
then if it does not, why it is that the agency proposes to 
regulate.
    So in your testimony, you are using a word which appeared 
in Glenn-Chafee which is a much more restrictive word on the 
agency than what we have here, and I would just simply urge you 
as we proceed with discussion of this bill that we focus on the 
language of this bill. And this bill, again, has a 
determination as to whether a rule is likely to provide 
benefits that justify costs and this bill says, if not, then 
why is the agency proposing to regulate. It is a much more 
flexible standard for the agency than the current Executive 
Order and it is more flexible than Glenn-Chafee in this 
particular regard. Feel free to comment on that, if you wish.
    Mr. Mirer. Senator Levin, could I comment on that?
    Senator Levin. Yes.
    Mr. Vladeck. I think my statement, when read in context, is 
accurate. Your bill says the agency must make a determination 
whether the net benefits test is met, and what my focus is is 
not on the word ``certify'' or ``determine,'' it is on ``net.'' 
Every dictionary you look at suggests that you are talking 
about a mathematical quantification.
    Senator Levin. Even though it says quantifiable or non-
quantifiable?
    Mr. Vladeck. Yes, because the word ``net'' is the modifier. 
There has never been any explanation of why that is not an 
incoherent standard, to say to the agency, on one hand, you 
must use this mathematical net benefits test. On the other 
hand, you can use non-quantifiable factors.
    Mr. Mirer. At the risk of being practical here----
    Senator Levin. Well, the only----
    Mr. Mirer. If I could just say, in the OSHA process----
    Senator Levin. I am just going to have to comment on this, 
and I have got a time limit, so forgive me. The bill itself 
says, and I want to read the language here, on page 14, line 
14, I want to read the language. ``Net benefit analysis shall 
not be construed to be limited to quantifiable effects.''
    Mr. Vladeck. As I acknowledged.
    Senator Levin. I just want to simply read the language, 
without arguing it with you.
    Mr. Mirer. Now, here is the practical point. In the OSHA 
process, and I do not know how anybody does this at any other 
agency, in the OSHA process, there is no credible economic 
information available until we get to the hearing. All the 
feasibility information, the cost of control, the options that 
could be taken, the substitutions of chemicals that might take 
into account, none of that stuff comes out until the hearing. 
When it gets to the hearing, OSHA does a preliminary analysis, 
which is usually very weak and limited, partly because of the 
Paperwork Reduction Act, and then in the hearing, workers who 
actually do the jobs and employers who actually run these 
processes come forward with the real data and it is possible to 
make the determination.
    So what this process is doing is requiring all that to be 
done prior to getting to the hearing, holding up the hearing 
until it can be done, peer reviewing it before we can get to 
the hearing to get to the real data, and then I guess the 
agency has to, if there is substantial new evidence that comes 
out at the hearing, which is the purpose of having the hearing 
in the first place, they would have to go through the process 
again.
    So that is our argument for why this front loading, which 
is destructive anyway, of the process as we see it is not a 
good idea.
    And then the second point is that this cost-benefit, etc., 
is not the economic feasibility standard, to which OSHA is held 
and so it is irrelevant, and as Senator Levin said, information 
can lead to a result, even if it does not mandate the result. 
That is exactly what we are afraid of here, overriding the 
underlying protections in the OSHA statute, even if it is not 
the intended result.
    Senator Levin. This question, Dr. Graham, is for you, as to 
whether or not the peer review which is provided for in this 
bill is duplicative of what the rulemaking process already 
provides in the area that they discussed.
    Mr. Graham. I think that the literature that exists on peer 
review shows that certain agencies, such as FDA and parts of 
EPA, currently use peer review processes, and I think those 
would satisfy the requirements of this bill. Other parts of 
EPA, other parts of FDA and OSHA, do not currently have an 
independent peer review process. In those cases, they would be 
asked to institute what is already being done at other 
programs.
    But I think there is a lot of flexibility in the way the 
peer review provision is written that would allow different 
agencies to tailor the kind of peer review that is appropriate 
for the kinds of rules they are developing.
    Senator Levin. So the bottom line is, then, that the 
requirements on peer review do not duplicate----
    Mr. Graham. They would not have to do it twice. I see 
nothing in there that suggests to me they would have to do it 
twice or three times.
    Senator Levin. I think that is all I have for this round. 
Thank you.
    Chairman Thompson. Thank you very much. Senator Voinovich.
    Senator Voinovich. I listened to Dr. Mirer's testimony and 
Mr. Vladeck's. I am a new member of the Senate and what I am 
hearing today is that we have agencies out there that are 
already taking a long time to move things through them. I am 
also hearing that if we require them to do more, it is going to 
take a longer period of time.
    I wear hearing aids today because when I was a construction 
laborer, there was not a requirement that you have the ear 
plugs. I have an uncle that died prematurely, I think, because 
he worked with chemicals and he got leukemia.
    Mr. Chairman, I just wonder, do we have a problem with some 
of these Federal agencies in terms of the adequacy of the 
number of people that work in them? It is like we do not have 
enough people to get the job done, and if that is the problem, 
then why do we want to load them up with some more stuff? The 
object is to try and have regulations that are sensible and 
make sense and protect people and do what they are supposed to 
be doing.
    If the problem is that we do not have the wherewithal in 
these departments, then I think that this Committee ought to be 
very, very much concerned about that. I am thinking maybe you 
ought to bring in those agencies and talk to them about how 
adequate are they in terms of the staffing that they need to 
get the job done that they are supposed to be doing. It is 
fundamental.
    As a governor, I had great complaints, for example, about 
our medical board in Ohio, that they were not doing the job 
that they were to be doing, so we got involved in it and 
doubled the money that was made available to them and put new 
people on the board. I think 2 years ago or last year, it is 
the best medical board now in the country in terms of getting 
rid of these people that should not be practicing medicine.
    So I think that maybe there is another problem here that we 
need to address our attention to, in addition to just looking 
at this legislation.
    One of the criticisms that we heard, that if you have cost-
benefit analysis and risk assessment, it is going to end up in 
a situation where you are going to put dollars over the values 
of the lives and health of our citizens. You hear it all the 
time, and I would like any panelist that would like to, to 
comment on that.
    Mr. Cass. I would be happy to, Senator. I think that there 
is no doubt that all of us every day make choices where we are 
trading off some type of risk against some type of cost. There 
is no other way to live. We do not have unlimited resources and 
we live in a world where those choices are necessary.
    If we look at the amount of money the Federal Government 
has, even at its current level, it is limited, and the amount 
of money we have in the economy is limited. The agencies have 
to be saying at some point, is the amount of dislocation, cost, 
imposition on others worth this saving in health and safety? It 
has got to be implicit in what they do now.
    What this legislation says is not to make a precise, 
quantifiable point at which you value human life. What it says 
is not pin down the unique solution to this problem. It says to 
look carefully at how much different types of rules are going 
to cost and see if you can do what you want more cost 
effectively--see if you can prevent more risk more cheaply. And 
I think that is a good instruction to give agencies.
    Mr. Mirer. I do not think that there is any question that 
agencies try to do that now. The heightening of the importance 
of regulatory analysis is actually the bottleneck at OSHA. The 
system is being run by the people who do the economic analysis, 
and the leader of that group was just put in charge of all 
standard setting. So instead of the health scientists or the 
engineers being the critical skill, the critical skill is being 
able to get out these analyses that will withstand Executive 
Order review, that will withstand the subsequent challenges in 
court and the like, and that is the dominant feature. That is 
what is slowing things down.
    When we come to the question of cost-benefit, one of the 
first standards that OSHA took up was the noise standard, and 
that would be, by any measure, a major rule. The problem is 
what is the value of a worker's hearing? That would actually be 
the thing over which we struggled. Those ear plugs that you 
were provided with, we now know they do not work anywhere near 
as well as they were supposed to work, and people are losing 
their hearing even if they religiously wear those hearing 
protection devices.
    So now we are getting to balance the cost of quieting the 
noise, and it is doable, against human hearing and what is the 
value of a worker's hearing. I actually do not know how to put 
a number on that, but I can tell you that putting that as a 
cost-benefit question has stopped progress on noise abatement 
in American industry now. We have not had any progress in 10 or 
15 years as a result of that cost-benefit determination being 
made, actually by a review commission judge, not even by a real 
court.
    Senator Voinovich. Do any other panelists want to comment 
here?
    [No response.]
    Senator Voinovich. I am finished.
    Chairman Thompson. You have a little time left, so I am 
going to take 30 seconds of it.
    Senator Voinovich. I yield my time to the Chairman.
    Chairman Thompson. You are right. I mean, the difficulty 
you point out is a correct one. But the other question is, what 
is the best rule in order to prevent loss of hearing? And you 
also said in your statement, we know more about ear plugs now 
than we did then. So I think your point is well taken, but it 
is only a part of the picture. We are talking about not only 
the value of it but what is the best way to protect whatever 
value that a person might put on it in view of current science, 
in view of what we know now, and work all that into the process 
to come out with the best results, right, Senator Durbin?
    Senator Durbin. Right. Thanks, Mr. Chairman.
    Is there anyone on the panel who believes that the passage 
of this legislation will not add to the responsibility of the 
agencies covered? Is there anyone who believes that the 
agencies will need fewer employees because we pass this bill, 
as opposed to their current employee workload?
    Mr. Cass. I do not believe that you will need fewer 
employees, but I do not believe that for agencies, generally, 
you will be making any significant addition to the burden on 
them. Most of the agencies you are addressing these 
requirements to have very similar requirements at present, and 
generally, when things are slow at an agency, the answer is 
politics, not science, not administrative practice.
    Senator Durbin. Mr. Vladeck.
    Mr. Vladeck. I would like to respond to that. There are 
huge differences between this bill and the Executive Order that 
add all sorts of analytic burdens to the agency that they 
cannot possibly meet with existing staff. You can just tick 
them off quickly.
    The Executive Order does not have a peer review 
requirement. The Executive Order does not prescribe across-the-
board risk assessment. The Executive Order does not prescribe 
the net benefits test. The Executive Order does not change 
judicial review. The Executive Order does not require the 
consideration of substitution risks.
    So there are a lot of differences--plus, the Executive 
Order does not require anything amounting to the detail that is 
required in this statute for cost-benefit analysis and so 
forth. So there should be no pretense. There is no way agencies 
can do this with their existing staff.
    Senator Durbin. I agree with Mr. Vladeck on this point. I 
wanted to let everyone have a chance to say what they thought 
about it, and when I offered an amendment before this Committee 
last year which said, do not go forward with this if the 
agencies certify you are going to in any way hamper their core 
mission, for example, the Environmental Protection Agency and 
the inspection standard and so forth, I lost 10 to 5. It 
appears we want to do this on the cheap, and I think Senator 
Voinovich has made my point. We would like to impose new 
mandates on these agencies in terms of what they are going to 
do, the list that Mr. Vladeck said, and not provide them the 
resources.
    Let me ask Dr. Graham, I know a little bit about oxygenated 
fuels because I come from ethanol land. As I understand your 
testimony and my memory of what was involved in it, in an 
effort to reduce air pollution, we suggested the use of 
oxygenated fuels----
    Mr. Graham. Mandated it.
    Senator Durbin [continuing]. Mandated oxygenated fuels, but 
permitted them to use ethanol or MTBE. The permission was 
given. It was not a mandate that they use it in a certain area.
    Mr. Graham. EPA did a rulemaking in which they could have 
compared the risks and benefits of alternative oxygenated 
fuels. They could have provided technical information that 
would have caused people to go to one oxygenated fuel or 
another. They did not do so. They just let politics and market 
forces play it out and----
    Senator Durbin. They let the private sector play it out?
    Mr. Graham. Right. And the public health and the 
environment oftentimes need EPA to exercise scientific and 
public health leadership, which did not happen.
    Senator Durbin. I think you are calling for more 
regulation, and it is----
    Mr. Graham. Senator Durbin, I am an advocate of public 
health, safety, and environmental regulation----
    Senator Durbin. So am I.
    Mr. Graham [continuing]. Smart regulation based on science.
    Senator Durbin. My point is that many of us thought MTBE 
was dangerous to start with, for a lot of the reasons that have 
now been discovered, but the marketplace was allowed to work it 
out, if you will, and then----
    Mr. Graham. And it might have been different if, in fact, 
EPA had done an authoritative comparative risk assessment of 
MTBE versus the alternatives.
    Senator Durbin. Let me ask about this. Everybody keeps 
using the phrase independent peer review. Let us test how 
independent peer review is under this bill. Should peer review 
be limited to both industry and government experts who have no 
financial interest in the outcome of the decision? Does anybody 
disagree with that? If you have a financial interest in the 
outcome of the decision, should you be sitting on a peer review 
panel under this bill?
    Mr. Graham. You should not let industrial scientists 
numerically dominate the peer review panel. I think that it 
would be a big mistake, but Senator Durbin, to say in the case 
of a peer review of an air bag design issue that you are going 
to exclude all of the air bag supplier engineers, all the air 
bag manufacturer engineers, you are just going to exclude them 
from the peer review. That would be a big mistake and loss of 
critical expertise.
    Senator Durbin. Well, let me suggest here, this bill, if I 
read it correctly, excludes those in government agencies from 
serving on the peer review panels----
    Mr. Graham. I do not read it that way. Those particular 
government employees involved in developing the regulation, but 
other aspects of the agency or the Federal Government, I read 
this as saying that they could potentially serve on it.
    Senator Durbin. One of the objections made by OMB last 
year, by Mr. Raines, was, for example, in the area of nuclear 
regulatory activity, there are a limited number of government 
experts here, and when we start excluding certain agencies from 
participating, then we exclude resources that may not be easy 
to duplicate.
    Mr. Graham. Right.
    Senator Durbin. But I find it interesting that you use the 
word ``dominate''. I do not know how you can predict in advance 
who is going to dominate a peer review. Is someone going to be 
milquetoast meek or stand up and say, ``I am in charge here. I 
am the jury foreman.''
    Mr. Graham. Right, but industry scientists should not 
numerically dominate.
    Senator Durbin. That is a little hard to call, and if you 
are saying that if we are going to do an air bag peer review, 
we certainly ought to bring in somebody from General Motors and 
Ford to sit there, is this then an independent peer review?
    Mr. Graham. I think it would be very hard to construct a 
technically competent peer review on air bag design issues and 
have no engineers from the air bag supplier community and from 
the manufacturing community.
    Furthermore, if you look at the history of peer review at 
Federal agencies, which is what this book does, what you find 
is that in most cases, the dominance in the peer review in 
terms of the number of participants, they are either from 
academic organizations or from nonprofit research institutions. 
There would on occasion be one or two members from a regulated 
community or from a labor union or from a public interest 
group. But the dominant involvement in these peer review panels 
in terms of number of participants and overall influence on the 
process are people who do not have any particular stake in the 
outcome, and that is the way it should be.
    Mr. Mirer. If I could----
    Senator Durbin. I am sorry.
    Mr. Mirer. I have been on a lot of peer review groups 
myself, at the National Academy of Sciences, National 
Toxicology Program, Board of Scientific Counselors, which peer 
reviews the report on carcinogens and the like. My trouble with 
the peer review requirement, certainly in the OSHA context, is 
that, yes, you want people who have an interest in the outcome 
to be involved in the rulemaking process, who have the 
expertise. I agree with Mr. Graham on that.
    What I do not agree with is saying that these people get 
special crack at the rule before anybody else gets it. That is 
the problem with the process as it is set up in the bill now, 
the detriment of the process relative to OSHA.
    Peer review groups involve--there is another conflict of 
interest which is not talked about. The academic reviewers are 
often reviewing their own work and evaluating the quality of 
their own work and how dispositive it is of the rule. That is a 
grievous conflict, actually, and may even be the dominant one 
on these committees. Stuff is decided based on extra-record 
evidence, and prejudices of the individuals--free ideas, and 
frankly, they are not bound by criteria in legislate or 
regulation.
    I mean, you take a full professor of oncology on one of 
these committees. He does not necessarily believe he has to 
follow the rules. He thinks he is better than the rules, so he 
is not following them, and that is just the way it is. It is an 
inherent problem with the methodology and I think we have this 
in the system now.
    Senator Durbin. We have lionized and sanctified peer review 
in this panel, and after some of the comments here, I am a 
little bit suspicious as to the product we can expect to come 
from it.
    But let us go a step further. Should we have public access 
to the peer review? Should people be able to judge for 
themselves who dominated, whether the right people were chosen?
    Ms. Kenworthy. Senator Durbin, could I speak to that? I 
have had some experience during my working career with FIFRA, 
the insecticide law, pesticide law, scientific advisory panel 
as well as with the EPA Science Advisory Board. Both of those 
processes work routinely with public scrutiny. They announce 
their meetings in the Federal Register ahead of time and people 
are allowed to sit in. Oftentimes, the public is permitted to 
be present when the regulated entity presents its side of the 
issue.
    Those processes generally have worked extremely well. I 
think, particularly if you are going to have peer reviewers who 
are financially dependent upon the regulated entity, that is 
all the more reason for the need for public scrutiny.
    Senator Durbin. Thank you. Mr. Vladeck.
    Mr. Vladeck. Yes. It bears mention that this bill reverses 
the presumption that normally attaches to peer review activity. 
Most peer review committees are governed by the Federal 
Advisory Committee Act, which mandates very broad openness, not 
simply with respect to the meetings but with the working papers 
and so forth of the Committee. There is nothing in this bill 
that mirrors that. In fact, it is explicitly made not 
applicable, which means that there may be even internal papers 
generated by the peer review committee that would not be made 
public. That is a serious problem.
    Senator Durbin. Yes. Dr. Crawford.
    Mr. Crawford. I have a couple of experiences which might be 
worthwhile. As you know, the National Academy of Sciences last 
year asked itself to be excluded from the Federal Advisory 
Committee Act because they believed certain aspects impeded 
scientific decision-making. Congress granted that request.
    Then another point is that when FDA approves drugs, food 
additives, and so forth, this is not an open process. They may 
hold hearings or public advisory committee meetings but the 
final decision is reserved to FDA staff.
    Another way is that some of the FDA committees, like the 
Food Advisory Committee, requires members with vested interests 
to be non-voting members. That would be a third way of dealing 
with the perceived problem.
    Senator Durbin. Thank you. Thank you, Mr. Chairman.
    Chairman Thompson. Thank you very much. Senator Edwards.

              OPENING STATEMENT OF SENATOR EDWARDS

    Senator Edwards. Thank you, Mr. Chairman. I decided when I 
was sitting in my office and Senator Durbin started to talk 
about tobacco, I had better get down here. [Laughter.]
    Senator Durbin. I am leaving.
    Senator Edwards. Let me say first that I have enjoyed the 
discussion. This subject, I think, is a fascinating subject. I 
think the bill intends to do some very positive things. I do 
not think there is any question about that.
    It seems to me we ought to be trying to improve 
efficiencies, reduce bureaucracy. I am personally concerned 
about the human impact of this bill, if it were to pass. I just 
wonder whether, ultimately, this bill, which I think has a very 
laudable goal, accomplishes what it is we are trying to 
accomplish, which is to, for example, to improve agency 
efficiency, to get these OSHA regulations, EPA regulations, 
passed more quickly, whether we are reducing unnecessary 
regulatory bureaucratic burdens that are placed on businesses, 
and I emphasize unnecessary.
    A lot of the arguments that have been made on both sides of 
this bill lead me to the conclusion that it is still a bill 
that I am open minded about, but I have real concerns about it, 
very serious concerns.
    Let me just ask you sort of a generic question to start 
with and whoever wants to respond. Does anyone believe that 
this piece of legislation, in fact, makes agency rulemaking 
more efficient? And tell me why.
    Mr. Crawford. Yes, I do, because at the present time the 
first thing that happens is the agency decides to announce that 
they have an intention to regulate by publishing an advance 
notice of proposed rulemaking, and the way an agency comes to 
that point may vary from a petition that is sent in, it might 
be a letter from a citizen of the United States or someone who 
is not even a citizen and it is not routinized. There is no 
decision making matrix that they have to conform.
    So, consequently, petitions that turn into regulations can 
lay in abeyance for 4 or 5 years before they come up with some 
sort of structure to put them together. This would give them 
that structure and it would make it routine throughout the 
Federal Government, and over time, through experience, I 
believe S. 746 would make the whole process more efficient and 
certainly more transparent. It would be more like what goes on 
in other countries and groups of countries, like the European 
Union, where risk assessment has become the order of the day 
and the state of the art.
    Ms. Kenworthy. Senator Edwards, could I respond to that, 
just briefly?
    Senator Edwards. Yes, of course.
    Ms. Kenworthy. First of all, I do not agree that because 
you have put all of those additional requirements, front load 
the process with all of those additional requirements, that we 
are improving efficiency here. What we are doing is putting 
more and more steps and more and more process into the whole 
system.
    But further to that, I have to say, businesses should be 
efficient. That is how they succeed. Sometimes governments 
should be efficient, but not always. There are other things 
that governments need to do besides focusing on efficiencies, 
and indeed, if that were the only focus of the government, we 
would lose a lot of our democratic protections.
    Senator Edwards. I agree with that, Ms. Kenworthy.
    Mr. Mirer. No, I do not think it is more efficient. Dr. 
Crawford actually mentioned one of the defects, I think, in the 
current approach, that it is unbalanced because there is not 
anything in there which pushes the agency to respond to a 
petition and to justify equally the failure to act. Right now, 
agencies have to defend against pretty strong attack when they 
act. There is no similar pressure on the agency to defend a 
refusal to act and to put protections forward. If there were 
something like that in the bill, you could consider it at least 
a balanced attempt, but there is nothing like that in the bill.
    Senator Edwards. Yes. Mr. Vladeck.
    Mr. Vladeck. Let me just add one thought. You have to look 
at this bill in the context that exists in a regulatory 
environment that, particularly in the last few years, has 
layered requirement upon requirement for agencies to overcome 
in order to regulate. You have SBREFA, you have the 
Congressional Accountability Act, you have a host of new 
enactments, and that no one has stood back and simply assessed 
their impact on the agency.
    If the question is, does this add to the agency's 
efficiency, you have to ask, where are the agencies today? And 
if you look at the literature on administrative law, it is 
quite clear that agencies have suffered from a process of 
ossification. They are now so process-laden because of 
requirements imposed by Congress, the Executive Order, the 
courts, they are like the giant who is simply tied down with 
all this rope.
    All this bill does is add some more rope. It does not add 
to the agencies' efficiency. It certainly does not add to the 
informational mix that is out there today. If you look at the 
agency rulemaking record, there is tons of information about 
cost, about risks.
    So if your question is, does this optimize efficiency, the 
answer has to be no.
    Mr. Graham. Senator Edwards, if we asked an engineer at 
North Carolina State or at Duke or something like that to serve 
on a peer review panel for an EPA regulation, from the 
perspective of the agency analyst, that may look a little 
frightening and it may look a little like it is a layer of hoop 
they are going to have to go through because this person is 
going to comment on their work and potentially slow the process 
down.
    But I think the point of this book by Sheila Jasanoff is 
when the regulation is actually done and after the dialogue 
between the experts and the agency officials, the ultimate 
product is actually a smarter regulation, one that is more 
protective and less costly than it would have been without that 
review.
    So I am not sure if that is efficient or not efficient, but 
I think it potentially is a step in the right direction.
    Senator Edwards. I want to ask about a couple of specific 
things in the proposed bill, starting with peer review. Do any 
of you have any notion of how many rulemaking procedures or 
what percentage of rulemaking procedures actually meet this 
threshold criteria for peer review, which appears to me to be 
affecting the economy by $500 million or more for health and 
safety?
    Mr. Mirer. Anything that costs the average employer $87 a 
year will meet that requirement.
    Mr. Cass. The only estimate I have seen, Senator, is that 
there are roughly two dozen rules that would meet a $100 
million threshold.
    Senator Edwards. Those were two very different answers.
    Mr. Graham. Yes, they were very different statements.
    Senator Edwards. Let us start with you, Professor Cass, if 
you could tell me the basis for that conclusion.
    Mr. Cass. In testimony offered last year by Professor Ernie 
Gellhorn, he had gone through the rules and looked at the 
number that met the $100 million threshold and his estimate for 
that was about 25 rules annually.
    Senator Edwards. And out of how many rulemakings that occur 
each year?
    Mr. Cass. There are thousands that occur every year, and 
there are thousands of pages added to the Federal Register 
every year by these agencies that are so bound down that they 
cannot pass regulations.
    Senator Edwards. Well, if you are correct, the bottom line 
is there would be very few peer reviews that would actually 
occur.
    Mr. Cass. I believe so.
    Senator Edwards. I see everybody at that end of the table 
shaking their head yes and I see everybody at this end shaking 
their head no, so can I get a response?
    Mr. Mirer. We are back to--we had this colloquy last year. 
Mr. Thompson said, ``See, there were no OSHA regulations that 
were affected by this,'' and I said, ``Yes, that is the whole 
point. There are no OSHA regulations----''
    Chairman Thompson. You see, I did not ask you that this 
year.
    Mr. Mirer. No, you did not ask that question again, but you 
did. The situation is OSHA regulates 6.5 million employers. 
Anything with broad impact is going to be a major rule. The 
example I always use is lighting an exit sign, which I did last 
year, too, and I heard the sigh. Actually we do not have a lit 
exit sign here like we ought to have, but Congress is exempt 
from OSHA, or maybe not exempt anymore. But if you light that 
exit sign with a 50-watt bulb, you are over $17 a year. So that 
is an example of the reach that this bill would have. An 
information statute, an information rule affecting large 
numbers of employers would get caught up in this, and basically 
anything with broad application.
    Now, I am not opposed to economic analysis of these rules 
because I think the economic analysis drives stricter 
regulation than you would get if you had just a bunch of people 
sitting around a table wondering about what things would cost. 
My only concern is that we have to get to the hearing quicker 
when we have real economic data because you do not have that in 
advance of the hearing, which is when it would be peer 
reviewed.
    Mr. Graham. Senator, I would repeat the threshold is $500 
million, actually, on the cost-benefit peer review.
    Senator Edwards. I know it is, and I think that is what I 
said.
    Mr. Graham. That is a big threshold.
    Mr. Mirer. That is $85 a year.
    Mr. Graham. I would encourage you to ask CBO if you are not 
sure about this. I think you will find out it is a limited 
number of regulations.
    Senator Edwards. I wanted to ask you a couple other 
specific questions, but let me just say, I did not mean to 
indicate that I think efficiency takes precedence over human 
life and environmental concerns. I absolutely believe the 
opposite of that.
    Mr. Graham. You did not say that.
    Senator Edwards. But I do think we want to make these 
agencies as efficient as they can.
    You said something, Dr. Graham, that I just want to make 
sure I understood, and I do not want to take much time on it 
because I have something else I want to ask.
    Mr. Graham. All right.
    Senator Edwards. I heard you saying in response to Senator 
Durbin's question--he expressed a concern that I also share, 
which is it appears to me that industry representatives who 
have a financial interest in or could have a financial interest 
in the outcome of any particular rulemaking procedure can 
clearly participate in the peer review process.
    Do I hear you saying that you believe that is justified, 
even though obviously we give up some objectivity and 
independence by having them on the panel?
    Mr. Graham. Yes.
    Senator Edwards. Do you believe that is justified because 
they bring information and expertise to the discussion? Is that 
basically what you are saying?
    Mr. Graham. Right, and the standard conflict of interest 
procedures at the National Academy of Sciences and at the EPA 
Science Advisory Board would call for disclosure, public 
disclosure of that conflict and they would never allow more 
than a couple of those participants for fear of dominating the 
peer review panel. But there are many cases where the necessary 
expertise on the subject matter in question would require an 
engineer, a scientist, or an economist from one of the affected 
regulated parties, and I think that is perfectly appropriate.
    Senator Edwards. Mr. Vladeck, if I could have just another 
second, Mr. Chairman, could I get you to respond to that, 
please?
    Mr. Vladeck. Our concern--I mean, I think there is a 
legitimate argument for having people with an interested stake 
to debate the issues. There is ample opportunity today for 
anyone who is interested in an agency risk assessment or cost-
benefit analysis to share their views with the agency. That is 
the whole point of notice and comment rulemaking.
    What is wrong about this bill is it gives people with an 
interested stake in the outcome a privileged place in the 
rulemaking proceeding denied to every other member of the 
public. They will have access to information other people will 
not have. They will have the ability to demand written 
responses from the agency and they will get their crack at the 
rulemaking process well before there is even a notice of 
proposed rulemaking published.
    Senator Edwards. Basically, what I hear you saying is they 
can provide their expertise, counsel, etc., without being on 
the peer review panel?
    Mr. Vladeck. Absolutely, and they do so in every major 
rulemaking today.
    Senator Edwards. Thank you all very much.
    Chairman Thompson. But the agency, of course, as it is now, 
can control pretty much what it agrees to hear and how it 
agrees to hear it.
    On peer review, just so that we all understand what this 
bill requires, it says that panels must be broadly 
representative, expertise relevant to the sciences, etc., and 
who are independent of the agency, independent of the agency 
involved, not of the government in total. You can bring 
governmental experts in. Then be governed by agency standards 
and practices governing conflicts of interest and non-
governmental agency advisors.
    So for people concerned about conflicts of interest, we are 
using the current agency rules on conflicts of interest now. So 
if it is a conflict of interest before this law, it will be a 
conflict of interest after and vice-versa.
    Then in terms of flexibility, it says the formality of the 
peer review conducted under this section shall be commensurate 
with the significance in complexity of the subject matter. It 
says that a member of an agency advisory board shall be 
considered independent of the agency, so you are not excluding 
agency advisory boards. I guess we are always wanting people 
who know the most about it but have no interest in it.
    Mr. Graham. There are not many people. The Martians are not 
going to do peer review.
    Chairman Thompson. It is an inherent impossibility. But I 
go back to something Senator Edwards and I know a little 
something about, is that it is not that you can always find a 
witness that has absolutely no interest in it, it is that you 
disclose it. Then, one way or another, that is factored into 
the credibility of the information that you are getting. So I 
do not see any other way to do it.
    I appreciate this panel today. Senator, I appreciate your 
commitment to keep an open mind on this for a while. 
[Laughter.]
    It seems to me what we are trying to do here, we are all 
trying to reach a good result, and I agree with you that 
efficiency is not the main goal of this particular act. We deal 
with efficiency a lot on this Committee. We have a high risk 
list where we have agencies year in and year out who are on a 
list that have a real problem with waste, fraud, and abuse, and 
they come in year after year after year, high levels of waste, 
fraud, and abuse in the agencies, and I seldom, if ever, hear 
them say, ``We just do not have enough people to deal with 
it.'' There are all different kinds of excuses.
    What we are trying to do in a democratic society, I think, 
is try to come up with a system so that no one is 
unaccountable. That is part of the problem we have with the 
Independent Counsel Act now. We cannot set someone or a group 
of people up and say, you are not accountable. We do not want 
to do anything to slow you down, even though we know you are 
going in the wrong direction sometimes, and creating bad rules 
and rules that hurt people sometimes.
    So it has to do with accountability and transparency and 
requiring them to give reasons for what they are doing, and 
then at the end of all that, we do not say you have to do 
anything about it except give you reasons for what you are 
doing. Then if you are so far off the mark, some Federal judge 
will look at all of it and tell you so, not in terms of 
micromanaging what you did but looking at the rule as a whole. 
If it is arbitrary and capricious, and you know how high that 
standard is, then a Federal judge might get involved. As 
Jonathan Swift would have said, ``I think it is a very modest 
proposal.''
    We have had a good hearing today. You have all been 
excellent witnesses, as usual. We appreciate your time very 
much and we look forward to working with any and all of you as 
we go forward to see if we cannot do everything we can to come 
together as much as might be possible. So thank you very much.
    I would like to include in the record a statement from Ed 
Wasserman, President of the American Chemical Society, 
regarding S. 746.\1\
---------------------------------------------------------------------------
    \1\ The letter from Mr. Wasserman dated April 14, 1999, with an 
enclosed prepared statement appears in the Appendix on page 154.
---------------------------------------------------------------------------
    With that, we will adjourn.
    [Whereupon, at 12:49 p.m., the Committee was adjourned.]



                            A P P E N D I X

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