[House Hearing, 107 Congress]
[From the U.S. Government Printing Office]



          THE IMPLEMENTATION OF THE TREAD ACT: ONE YEAR LATER

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                COMMERCE, TRADE, AND CONSUMER PROTECTION

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 28, 2002

                               __________

                           Serial No. 107-92

                               __________

      Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
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                    COMMITTEE ON ENERGY AND COMMERCE

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida           JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio                RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania     EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 SHERROD BROWN, Ohio
RICHARD BURR, North Carolina         BART GORDON, Tennessee
ED WHITFIELD, Kentucky               PETER DEUTSCH, Florida
GREG GANSKE, Iowa                    BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico           TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona             ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING,          GENE GREEN, Texas
Mississippi                          KAREN McCARTHY, Missouri
VITO FOSSELLA, New York              TED STRICKLAND, Ohio
ROY BLUNT, Missouri                  DIANA DeGETTE, Colorado
TOM DAVIS, Virginia                  THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee                 BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland     LOIS CAPPS, California
STEVE BUYER, Indiana                 MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California        CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire       JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
-- -- (Vacancy)

                  David V. Marventano, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

        Subcommittee on Commerce, Trade, and Consumer Protection

                    CLIFF STEARNS, Florida, Chairman

NATHAN DEAL, Georgia                 EDOLPHUS TOWNS, New York
  Vice Chairman                      DIANA DeGETTE, Colorado
ED WHITFIELD, Kentucky               LOIS CAPPS, California
BARBARA CUBIN, Wyoming               MICHAEL F. DOYLE, Pennsylvania
JOHN SHIMKUS, Illinois               CHRISTOPHER JOHN, Louisiana
JOHN B. SHADEGG, Arizona             JANE HARMAN, California
ED BRYANT, Tennessee                 HENRY A. WAXMAN, California
STEVE BUYER, Indiana                 EDWARD J. MARKEY, Massachusetts
GEORGE RADANOVICH, California        BART GORDON, Tennessee
CHARLES F. BASS, New Hampshire       PETER DEUTSCH, Florida
JOSEPH R. PITTS, Pennsylvania        BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                  ANNA G. ESHOO, California
LEE TERRY, Nebraska                  JOHN D. DINGELL, Michigan,
W.J. ``BILLY'' TAUZIN, Louisiana       (Ex Officio)
  (Ex Officio)

                                  (ii)


                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Graham, Hon. John D., Administrator, Office of Information 
      and Regulatory Affairs, Office of Management and Budget....    16
    Mead, Hon. Kenneth M., Inspector General, Office of Inspector 
      General, U.S. Department of Transportation.................    20
    Runge, Hon. Jeffrey W., Administrator, National Highway 
      Traffic Safety Administration, U.S. Department of 
      Transportation.............................................    11

                                 (iii)

  

 
          THE IMPLEMENTATION OF THE TREAD ACT: ONE YEAR LATER

                              ----------                              


                      THURSDAY, FEBRUARY 28, 2002

              House of Representatives,    
              Committee on Energy and Commerce,    
                       Subcommittee on Commerce, Trade,    
                                   and Consumer Protection,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:30 a.m., in 
room 2322, Rayburn House Office Building, Hon. Cliff Stearns 
(chairman) presiding.
    Members present: Representatives Stearns, Upton, Shimkus, 
Bryant, Pitts, Bass, Towns, DeGette, Markey, Gordon, and 
Dingell (ex officio)
    Also present: Representatives Sawyer and Barrett.
    Staff present: Kelly Zerzan, majority counsel; Ramsen 
Betfarhad, majority counsel; Brendan Williams, lecislative 
Clerk; Jonathan Cerdone, majority counsel; and Bruce Gwinn, 
minority professional staff member.
    Mr. Stearns. Good morning, everybody. I welcome all and 
call to order this hearing of the Commerce, Trade, and Consumer 
Protection. I'm especially pleased to welcome Dr. Runge. As 
this is your first appearance before the committee since your 
confirmation as National Highway Safety Administration 
Administrator, I look forward to a productive relationship 
between NHTSA and this subcommittee, which is entrusted with 
oversight responsibilities over NHTSA.
    I find the subcommittee's oversight vis-a-vis NHTSA as one 
of the most important responsibilities of this subcommittee. As 
NHTSA's motto, ``people saving people'' suggests NHTSA can and 
does save lives.
    It is in this light that we are holding this hearing today 
examining NHTSA's implementation of the TREAD Act.
    In October 2000, Congress enacted a Transportation Recall 
Enhancement, Accountability, and Documentation Act, in response 
to the many deaths and injuries attributed to tread separation 
observed on Ford Explorers equipped with certain Firestone 
tires. The TREAD Act was enacted in large measure due to the 
efforts of our full committee chairman, Mr. Tauzin, who at the 
time Chaired the Commerce Committee's Telecommunications, 
Trade, and Consumer Protection Subcommittee.
    After establishing an extensive hearing record, Chairman 
Tauzin and other subcommittee members, including myself, 
recognized that Congress had to act in order to protect 
American lives because in some respects NHTSA had failed.
    I am even more convinced today than the day we enacted the 
TREAD Act, that if implemented as Congress intended, the Act 
can save hundreds, if not thousands of lives. I'm still taken 
back when told that 40,000 Americans lose their lives and 
countless thousands are injured in our roads every year. Most 
of these deaths and injuries can be prevented if people did not 
drive while intoxicated or simply wore their seatbelts. Even 
today only 7 out of 10 Americans wear their seatbelts, while in 
many parts of Europe over 90 percent buckle up. That's 20 
percent differential in seatbelt usage between us and some 
Europeans. It is estimated to cost some 4,000 to 6,000 American 
lives. That should not be.
    Many of the fatalities and injuries on American roads arise 
from vehicle defects. The Ford Firestone case exemplifies that 
fact. Just one mandate of the TREAD Act, the early warning 
reporting that requires the reporting of vehicle problems to 
NHTSA from a variety of sources, including warranty claims and 
consumer complaints, I believe, if implemented right, can save 
thousands of lives throughout the coming year.
    In order for the TREAD Act far-reaching safety effects to 
take hold, NHTSA must promulgate regulations that are both true 
to the Congressional intent and timely.
    We, the Congress, further empower NHTSA with the TREAD Act. 
We increase NHTSA's funding by $9.1 million so that it could 
implement the Act. Yet, without NHTSA's diligent and 
expeditious efforts, we as American drivers will not fully reap 
the benefits of this TREAD Act.
    Therefore, I'm pleased that NHTSA has completed three final 
rules in a timely manner to date. However, I am concerned that 
NHTSA has yet to complete 12 final rulemakings, 6 of which are 
subject to statutory deadlines, the latest being November 2002. 
I recognize that to date, the Agency has issued nine Notice of 
Proposed Rulemakings. Still, I agree with the Department of 
Transportation Inspector General that the final rules may be 
delayed at least with regard to some of the more complex and as 
such contentious issues arise. Therefore, unless there are 
compelling reasons to the contrary, I request that NHTSA 
periodically inform this committee as to its progress on the 
various TREAD Act rulemaking.
    Let me emphasize that I do appreciate that Congress has 
asked NHTSA to undertake a large, and in part, complicated 
undertaking. So I do compliment the Agency for its efforts to 
this date and in particular, I commend the Agency for its 
responsiveness to concerns raised by the Department of 
Transportation Inspector General's Report and the OMB.
    We have the opportunity at this hearing to explore, in 
detail, both the IG's Report and the OMB's evaluation of 
NHTSA's tire pressure warning device NPRM.
    Clearly, it is important that NHTSA complete its TREAD Act 
rulemaking in a timely fashion, since at least with regard to 
two rulemakings, one, early warning data reporting; and two, 
rollover rating system, I would not want NHTSA to shortchange 
the quality of those rules because of time limitations. I'm not 
suggesting that NHTSA take its time with these two rulemakings, 
but rather I find both the early warning data reporting and 
rollover rating system rules extremely important as they 
address critical issues and enjoy exceptional complexity.
    It is imperative, for example, that NHTSA reach an optimal 
rule for the early warning data reporting. NHTSA has to get it 
right the first time because this rule is setting a framework. 
The extent and quality of data collected and analyzed under 
this rule will color all of NHTSA's work for the near future. 
If this rule is done right, as I said earlier, it will save 
countless lives in years to come. It's that simple.
    The object of the rule is not simply to collect more data 
sets. We all appreciate the raw data in itself means little. It 
is estimated that if NHTSA were to collect all the nearly 
warning data as contemplated today, it will become the largest 
warehouse of data in the world. Warehousing data doesn't save 
lives. NHTSA must carefully consider the type, quality and 
relevance of the data collected, the way the data is processed 
and catalogued and ultimately analyzed. Injecting the required 
intelligence into the processing of each warning data is a 
considerable undertaking and as such, NHTSA must be rigorous 
when promulgating the early warning rule. And obviously, this 
probably will take time.
    The fact is that we in Congress can enact many laws such as 
TREAD Act, designed to save motorists' lives, yet if such laws 
are not implemented properly and enforced rigorously, our 
efforts would have been in vain.
    And finally, I request that NHTSA submit its study of the 
use and effectiveness of booster seats to the subcommittee as 
soon as possible as it was due last November.
    That study is of particular interest as the committee finds 
the booster seat issue of significant importance.
    I thank all the witnesses who are appearing today and I 
look forward to hearing your testimony and with that, the 
distinguished ranking member from New York, Mr. Towns.
    Mr. Towns. Thank you very much, Mr. Chairman. More than 15 
months ago in response to the Firestone ATX Wilderness tire 
recalls, as well as the thousands of people who were killed and 
injured annually in highway tragedies, we came together to 
address and pass bipartisan legislation, the Transportation 
Recall Enhancement, Accountability, and Documentation.
    This public law was enacted with the hope of saving lives 
by providing as much vehicle accident information as quickly as 
possible to regulators, increasing access to information for 
consumers, requiring a tire pressure monitoring system in all 
new vehicles, updating standards for tires, mandating child 
improvement seats and developing a dynamic rollover test. In 
addition, TREAD increased the resources available to the 
National Highway Traffic Safety Administration, as my colleague 
from Florida and the chairman of this committee indicated to 
highly result in flood of new information that will come in.
    These requirements were mandated not to make onerous new 
demands on industry, but rather to save lives. Unfortunately, 
while we pass this legislation with great hope, to date, 4 of 
the 9 statutory deadlines have not been met and the most 
difficult and complex rules await final action.
    Mr. Chairman, I welcome you calling this hearing and I'm 
eager to hear from the witnesses because what we're talking 
about here today is saving lives. And I can't think of anything 
more important than saving lives.
    On that note, I yield back.
    Mr. Stearns. I thank my colleague. The gentleman, the 
chairman of the Telecommunications Subcommittee who is also 
active with the TREAD Act, Mr. Upton from Michigan.
    Mr. Upton. Thank you, Mr. Chairman, and I applaud you for 
having this hearing today to look at the implementation of the 
TREAD Act. I have a full statement that I'll put into the 
record, but I'd like to say just a couple of things at the 
beginning. As many of you know I was the principal author of 
the TREAD Act and as then chairman of the Oversight 
Investigation Subcommittee, our role was to identify problems 
and then to come back with legislation to make sure that they 
never happen again. In the case of the Firestone tire mess, we 
saw more than a hundred deaths across the country that were 
directly attributable to those tires. And as we began to 
examine this situation we found, in fact, that we had not seen 
tire standards updated since 1968 and as a young grade schooler 
then I can remember changing tires with my dad when we went to 
winter tires from the summer tires in Michigan, things like 
radials and those types of tires were not there, steel-belted 
radials weren't known to exist at that point. And we knew that 
when we found these enormous problems, in fact, we needed 
legislation to correct it. And that was why we saw tremendous 
bipartisan support in terms of the TREAD Act. Then Chairman 
Tauzin of this subcommittee worked with us. We worked very 
carefully with the Senate, was able to pass this legislation, 
as I recall, without a single dissenting vote and it was done. 
And now this oversight hearing to look at the implementation of 
the TREAD Act and to make sure that, in fact, we don't run into 
the same problems that we saw exist prior to the passage of the 
TREAD Act.
    So I look forward to the testimony, to the work, to make 
sure that all travelers on our highways, both drivers and 
passengers are going to be ensured of the safer travel and I 
look forward to hearing the testimony and asking some questions 
and thank you very much, Mr. Chairman, and others for going 
ahead with this hearing. I yield back the balance of my time.
    [The prepaed statement of Hon. Fred Upton follows:]

  Prepared Statement of Hon. Fred Upton, a Representative in Congress 
                       from the State of Michigan

    During the fall of 2000, I authored the Transportation Recall 
Enhancement, Accountability, and Documentation (TREAD) Act in order to 
get to the bottom of what is wrong with the faulty tires and what we 
need to do to fix them. Congress did this to ensure that no family 
would have to endure the same pain as those who have already lost 
family members due to these horrific accidents. Mr. Chairman I am very 
pleased that we are holding this hearing today in order to address the 
implementation of the T.R.E.A.D. Act.
    I am glad to see the good work of this committee and Congress and 
that the T.R.E.A.D. Act was able to expose flaws, so that in fact we 
could take faulty tires away from people who might have had used them. 
I believe it is important to note that this law has been both effective 
and positive.
    As the Administration continues the rule making process I would 
like to give them my full support. I would certainly like to reiterate 
the prominent issue of the law, to ensure the safety of American 
consumers. In addition, I would like to take this opportunity to remind 
them that this law needs be implemented fully, effectively, and 
expediently. I look forward to further hearings and will personally 
continue to follow this process.

    Mr. Stearns. And I thank my colleague who again was the 
author of the TREAD Act and for all the work that he did in the 
last session.
    I believe the ranking member of the full committee, Mr. 
Dingell is here and is recognized for an opening statement.
    Mr. Dingell. Mr. Chairman, first of all, I thank you for 
holding this hearing and I commend you. The questions that lie 
before us are very important. The tire safety issue that caused 
this committee and the Congress to enact the TREAD Act in 
November 2000 remains a real concern today. It is important 
that the provisions of the TREAD Act be carried out as intended 
by the Congress.
    I am going to observe that I am extremely discouraged, 
however, that nothing much appears to have changed in the 
National Highway Traffic Safety Administration, NHTSA, since 
the TREAD Act became law. Prior to the TREAD Act, NHTSA was 
awash in information, including information about defective 
Firestone tires. The information was filed away and not used. 
The NHTSA appears today to be awash in information. We're not 
sure whether the information has been filed away or what has 
been done with it. In any event, not much does seem to have 
been done in a way which would contribute to safety on the 
highways. This is, was and will be a wholly unacceptable way 
for NHTSA to do its business and the committee clearly said so 
before at the time the TREAD Act was considered. I had hoped 
that that warning would be a measure which would dictate to 
NHTSA that they should do things differently and should begin a 
new, vigorous and intelligent approach to their 
responsibilities.
    As a result, I would note the fundamental purpose of the 
TREAD Act was to change the way NHTSA handled safety 
investigations. It is not good enough that NHTSA has only 
access to information about possible safety problems. What must 
happen is that NHTSA must actually evaluate the information it 
receives and see that it receives proper information. And it 
then must determine what action and whether action is needed. 
Nevertheless, the Department of Transportation's Inspector 
General says that NHTSA continuously fails to read and react to 
the information it receives. Information unused, is of course, 
quite without value, quite worthless and either is a policy or 
is a law enforcement matter.
    In its report issued on January 3, 2002, the Inspector 
General had some interesting things to say and I quote, ``the 
success of the TREAD Act will ultimately rise or fall on the 
quality and the usefulness of new information system and the 
ODI's''--that's the Office of Defect Investigations--``ability 
to identify potential defects.'' And according to the Inspector 
General, NHTSA's plans for its new information system and I 
here will quote from the report again to be, and I quote, 
``fully operational by fall of 2002 is at risk because of the 
poor project planning and management.'' The Inspector General 
went on to say that NHTSA cannot identify safety defects in a 
timely manner because it has, and I quote again, ``an 
unstructured approach for analyzing data and determining if a 
potential defect exists and warrants further investigation.''
    So here we are, a year and a half after the TREAD Act was 
enacted and NHTSA still has no methodology for analyzing 
complaints. NHTSA is on the verge of requiring thousands of 
motor vehicle and equipment manufacturers, both foreign and 
domestic, to provide it with all kinds of information, 
including every customer complaint and handwritten field 
reports. According to some, NHTSA will be sitting on top of the 
world's largest data base outside the military, and yet, NHTSA 
still has not set up methods and procedures for evaluating 
safety administration.
    I think we can all be disappointed at this situation. I had 
hoped that NHTSA would understand and appreciate the deep 
concerns of the committee and the Congress. I thought NHTSA was 
committed to making changes that would allow it to identify and 
to respond to safety problems because they're the agency that 
we have set up to address those kinds of questions.
    I look forward to hearing the Administrator explain why the 
Agency decided against developing a methodology for analyzing 
complaints. I fully appreciate that it takes money, 
sophisticated talent, a high degree of cooperation with the 
manufacturers to establish a new and effective information 
system to evaluate the massive quantity of new information 
NHTSA will receive. In the TREAD Act hearings, I repeatedly 
asked the Agency to identify for us the additional resources 
they would need to do this job properly. The only response was 
that it could be done with minimal new funds. I think that that 
may be a little bit like the story of Cinderella. In any event, 
an old adage is that you get what you pay for. It seems 
appropriate here.
    The Inspector General expresses concerns about NHTSA's 
plans for a new system which will use off-the-shelf software 
and which is only going to cost $5 million over a 3-year 
period. I think that we should all share the concern expressed 
by the Inspector General and this may be another fairy tale for 
us and may lead us to more risk for the American public and 
more trouble for the industry because NHTSA is not going to be 
able to respond to its responsibilities under the law.
    We need a system that works. We don't need one which is 
cheap. It has to work. Without an effective data management 
system and without plans to use that effective data management 
system well and wisely, the TREAD Act simply cannot be fully 
implemented and most importantly, injuries and fatalities will 
continue to occur. And these are injuries and fatalities that 
NHTSA should be able to prevent.
    I urge NHTSA to give its new data system the attention and 
to seek the resources necessary to make it the accident 
prevention tool that Congress intended it to be.
    I look forward to what the hearings develop, but I do so, 
Mr. Chairman, without great comfort. Thank you.
    Mr. Stearns. I thank the gentleman. The gentleman from 
Illinois, Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. I want to thank you 
for bringing up the child safety seat issue, Rule 14H and 14I 
that were due in November. That was a provision that we had 
worked on and I hope we see some rapid movement on that.
    The second thing is I've always been somewhat concerned 
about some bias within DOT or NHTSA with respect to motorcycle 
riders and there is a feeling out there that this new--the tire 
act will be used to promulgate rules and standards on 
motorcycle equipment, helmets and outerwear which when Congress 
has an intent to do that we will pass legislation to direct 
that. This is not a time to use the regulatory power or 
authority in which to manipulate Congressional intent. I was 
the author of the child safety seat legislation. We 
specifically put it in the legislation. There was no intent in 
this legislation to address motorcycle outerwear and we will be 
following that closely.
    Third thing is there is a concern by the industry on the 
tire identification number being required on both sides of the 
tire. There is some safety implications to workers in the 
facilities. I'm going to tour a facility in my District within 
the next week because of removing the plates, the hot and cold 
aspects of tires. There's got to be a better way and I hope 
that you all look diligently to find that.
    And with that, Mr. Chairman, I yield back my time.
    Mr. Stearns. I thank the gentleman. The gentleman from 
Tennessee, Mr. Gordon.
    Mr. Gordon. Thank you, Mr. Chairman. Many of my concerns 
have been addressed in earlier remarks, so I will make my 
remarks part of the record and then would like to have some 
questions to this panel at a later date.
    Mr. Stearns. Okay. The gentleman also from Tennessee, Mr. 
Bryant.
    Mr. Bryant. Thank you, Mr. Chairman, and I too appreciate 
you having these hearings. Certainly the last time we had 
hearings along these lines in the TREAD Act it was certainly a 
period in which we were experiencing some defects across the 
country with our tires.
    Both Mr. Gordon and I represent, or actually he represents 
one of the Firestone plants and the headquarters is up in 
Tennessee also and I recall vividly their role in this and 
certainly their contribution in terms of the legislation itself 
and their support, there are some amendments of this bill, 
particularly with the collection and destruction processes 
involved in some of their tires that were affected by the 
recall. But I look forward to hearing from the witnesses today 
about this bill and how it's worked so far.
    In enacting legislation there's always kinks to be worked 
out and changes that need to be made during the process. I 
think once fully enacted NHTSA is going to be receiving a great 
deal of data and it's important that a uniform and organized 
system be utilized to organize this data.
    There's also controversy over what the standard for tire 
pressure monitoring systems should be. I look forward to 
hearing from our witnesses regarding their thoughts on the 
standard of alerting a driver of a tire pressure and possible 
deflation. I also understand that NHTSA is in the process of 
possibly changing the rollover resistance ratings. There are 
significant differences between the static stability factor 
method and the dynamic reliever test and I'd like to hear about 
the benefits that these witnesses believe one method has over 
the other.
    I look forward to hearing from our witnesses on all of 
these issues today.
    All that said, I like many others on this committee have 
other hearings also going on at the same time, so we are forced 
to go in and out and will be in between these hearings so there 
may be times that I will be out and won't be able to hear all 
of this testimony that I'm looking forward to hearing. So I 
will try to follow your written transcript of this hearing as 
well and I thank you, gentlemen, for being here today and 
again, I thank our Chairman for this very distinguished panel 
of witnesses today.
    Thank you.
    Mr. Stearns. I thank my colleague and we're welcoming also 
Mr. Sawyer from Ohio who is a member of the full committee, but 
not a member of the subcommittee and he's welcome to have an 
opening statement.
    Mr. Sawyer. Mr. Chairman, thank you very much for the 
opportunity to participate in this way. You're very generous 
with the time of this subcommittee. I also want to echo what 
we've heard from others commending you for your diligence in 
making sure that we don't just enact bills requiring regulatory 
action, but that we continue to monitor and evaluate the law's 
implementation.
    Let me also suggest that I share the concern that others 
have expressed that NHTSA may be underestimating the time and 
cost to develop the data base that will be required to handle 
this enormous amount of information. It strikes me that a $5 
million off-the-shelf system just does not seem adequate and 
that we run the risk of what we talked about in the earlier 
hearings of a data dump that undermines the value of whatever 
information we have.
    With regard to specific rulemakings, I have some 
reservations that we may not actually be protecting consumers. 
It seems to me that it has been lost in NHTSA's internal debate 
about whether to use direct or indirect monitoring systems, the 
question of whether allowing motorists to ride on tires that 
are 25 percent under inflated is itself safe. The rule, it 
seems to me would allow perhaps up to half the motorists on the 
rode to operate their vehicles below safe inflation rate. The 
problem is not one of immediate failure, but rather of 
cumulative damage. It's a problem that over time would allow a 
tire to fail catastrophically. What's more important even that 
that, however, is the fact that an accurate early warning 
system is critical because it may actually encourage drivers to 
drive for longer periods of time on under inflated tires and 
thereby risk their safety due to that cumulative damage.
    I'm not so concerned about which system is chosen, but 
rather that we recognize that the tolerances are not very 
great.
    Finally, just let me say that I share with others the 
concern that they've expressed about the tire labeling rule. 
The question of whether we are actually increasing safety in 
any substantial way by requiring the tire identification number 
on both sides of the mold is questionable. We do know, however, 
that that requirement will pose substantial safety risk to 
workers and/or very substantial cost and loss of productive 
time to manufacturers for a minimal gain in consumer awareness. 
The descriptions that Mr. Bryant offered about workers climbing 
into 300 degree molds in order to change the numbers once a 
week seems to me is very problematic.
    With that, Mr. Chairman, I appreciate the change to be 
here. I will submit my full statement for the record and thank 
you for the opportunity to make these comments today.
    Mr. Stearns. And I thank my colleague and we also welcome 
the gentle lady from Colorado, Ms. DeGette, for her opening 
statement.
    Ms. Degette. Thank you, Mr. Chairman. Mr. Towns apologizes 
for having to leave, but I'm always happy to pinch hit for him 
and I want to thank you, Mr. Chairman, for holding this 
hearing. I know a lot of the issues that I cover in my opening 
statement have been covered by the panel here this morning, so 
let me just say that I'm really pleased we're having this 
hearing today to talk about what has happened with 
implementation of TREAD Act.
    I'm also concerned about child restraints and I realize 
that we haven't had a full recommendation on this, but I look 
forward to that recommendation in November. As the mother of 
two young children who are now getting older, I know how 
important child restraints are and I look forward to hearing 
these recommendations.
    With that, Mr. Chairman, I'll submit the rest of my opening 
statement for the record and I'm eager to hear the witnesses 
today.
    [The prepared statement of Hon. Diana DeGette follows:]

Prepared Statement of Hon. Diana DeGette, a Representative in Congress 
                       from the State of Colorado

    I want to thank you Mr. Chairman for holding this hearing, and I 
want to thank our witnesses for being here today. I recognize that the 
National Highway Traffic Safety Administration (NHTSA) has worked under 
considerable time pressure and appreciate their expedited review of 
these critical issues.
    This is an excellent opportunity to determine what has been 
achieved since Congress passed the TREAD, or Transportation Recall 
Enhancement, Accountability and Documentation, Act. The most important 
duty of this subcommittee is to ensure consumer protection. I am 
therefore glad to hear of NHTSA's progress in addressing the automobile 
safety concerns that were first raised following the Firestone ATX and 
Wilderness tire recalls. This is also the time to determine what 
challenges remain in the implementation of the TREAD Act.
    Early detection of dangerous patterns of tire and automobile 
defects can save lives. With this in mind, the TREAD Act has introduced 
provisions that will require vehicle and equipment manufacturers to 
report information regarding warranty adjustments, injuries and 
fatalities to NHTSA. By any account, these new reporting requirements 
will result in an enormous amount of information. It is believed that 
NHTSA's database will be the largest database in the world. In the 
world. How will NHTSA manage this information? What plans are in place 
to ensure that the data is thoroughly analyzed? This early warning 
provision is at the heart of the TREAD Act, so it is vitally important 
that NHTSA have in place information systems to handle this gigantic 
influx of information.
    We will also discuss the recommendations for tire pressure 
monitoring systems. Underinflated tires present a significant hazard. 
NHTSA was charged with examining the two types of systems for 
monitoring tire pressure currently available: indirect and direct. 
Which system is ultimately chosen will significantly impact the auto 
industry, as well as consumers.
    Obviously an issue that is of great concern to all of us here is 
child restraints. I realize that you have not issued your full 
recommendations on this, but I look forward to your report, which is 
due this November.
    And finally, there is the question of how to best test and predict 
vehicle rollover resistance. NHTSA was instructed to develop a dynamic 
test of vehicle rollover, again by this November. The National Academy 
of Sciences' recent recommendations support this development to 
supplement the current testing NHTSA performs. I know that there are 
substantial hurdles to actualizing this test and I anticipate hearing 
about the challenges and suggestions for overcoming them.
    Again, I look forward to hearing from all of our witnesses and I 
welcome the healthy debate that will ensue.

    Mr. Stearns. By unanimous consent, so ordered.
    [Additional statement submitted for the record follows:]

 Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee 
                              on Commerce

    Thank you, Mr. Chairman for calling this important hearing today. I 
would like to begin by welcoming the NHTSA Administrator, Dr. Jeffrey 
Runge, to our Committee. This is your first time testifying before us, 
and I find it quite fitting that your testimony here today is on the 
implementation of such a significant piece of safety legislation--the 
TREAD Act.
    The Transportation Recall Enhancement, Accountability, and 
Documentation Act, or ``TREAD'' Act, was one of the most important 
pieces of legislation this Committee produced in the 106th Congress. 
The Act revolutionized how NHTSA will collect, analyze and assimilate 
data and established new safety standards that will improve protection 
of the driving public.
    As we evaluate the agency's compliance with TREAD, we cannot forget 
why we are here, and what spawned this legislation. Our hearings in the 
106th Congress confirmed that Firestone tires were de-treading at 
unusually high rates, causing rollovers that injured, and in many cases 
killed, the vehicle's occupants. Because of this safety defect, more 
than 13 million Firestone tires were recalled at a cost of nearly $3 
billion--and more than 200 people needlessly lost their lives.
    During our Firestone hearings, we learned a couple of things. 
First, it was clear that the data available to NHTSA regarding 
Firestone's tread-separation problems were woefully insufficient. 
Although testimony showed that the agency had received complaints about 
the tires, both from consumers and from an insurance company, it did 
not receive data about Ford's foreign recall actions or the internal 
company claims data related to these accidents.
    Second, it was clear that NHTSA did not effectively use the data it 
did have to spot tire-failure trends. Indeed, NHTSA admitted that it 
needed to review and revise its own policies for evaluating its data. 
In response to these problems, we passed the TREAD Act to prevent this 
kind of disaster from happening again.
    So, how is NHTSA doing? As can be expected, it is doing well in 
some areas, and could improve in others. One rulemaking that has 
received significant attention is the tire-pressure monitoring rule. As 
part of the TREAD Act, we required that NHTSA draft a regulation that 
would require manufacturers to install tire pressure monitoring 
systems, which that tell a driver when a tire is significantly under 
inflated.
    As NHTSA will tell us today, there are two different systems on the 
market that can do this: direct and indirect. NHTSA's draft final rule 
required the use of a direct monitoring system, after a four-year 
phase-in period. While more expensive than an indirect monitoring 
system, the direct system offers significant benefits. Namely, it will 
alert a driver when all four tires have become under inflated at the 
same rate, or when two tires on the same axel have become under 
inflated at the same rate. The indirect system, at this point, does 
not, and cannot, detect these kind of under-inflation situations.
    According to NHTSA, there may be reason for concern about this: 
2.8% of cars, and nearly 4% of light trucks had all four tires under-
inflated by at least 25% of the recommended tire pressure. Now that 
doesn't sound like a lot of vehicles, but it totals approximately seven 
million vehicles. That's more than the number of people who live in 
entire state of Louisiana!
    Allowing the use of an indirect tire pressure monitoring system 
would leave these 7 million vehicles without any tire pressure warning, 
which is simply unacceptable and not consistent with the TREAD Act.
    The TREAD Act required this rule to be completed on November 1, 
2001. NHTSA sent a draft final rule to OMB in December, but in 
February, OMB sent the draft rule back to NHTSA with some concerns 
indicating that perhaps OMB preferred the indirect to the direct 
monitoring system. But safety has to be the number one concern at 
NHTSA, and certainly when we passed the TREAD Act, the safety of the 
driving public was our primary goal. Protecting some cars, but not 
others, was not what we intended when we drafted the tire pressure 
monitoring rule.
    I understand that OMB and NHTSA may be on the verge of reaching an 
agreement on the language of this rule. And I am glad this rule is 
close to seeing the light of day. I do continue to have concerns, 
however: OMB is not an agency with vehicle safety expertise. So I hope 
that it will be cautious when it decides to wade into vehicle safety 
debates.
    Again, I welcome our witnesses and I look forward to hearing about 
the implementation of this very important Act. Thank you, Mr. Chairman.

    Mr. Stearns. Now we look forward to hearing from the 
testimony of our witness list. Dr. Jeffrey Runge, Administrator 
of National Highway Traffic Safety Administration, Department 
of Transportation. Welcome. The Honorable John D. Graham, 
Administrator, Office of Information and Regulatory Affairs, 
Office of Management and Budget. I welcome you. And the 
Honorable Kenneth Mead, Inspector General, Department of 
Transportation, Office of Inspector General. Mr. Mead, we will 
welcome you.
    Mr. Runge, we'll start with you for your opening statement.

 STATEMENTS OF HON. JEFFREY W. RUNGE, ADMINISTRATOR, NATIONAL 
   HIGHWAY TRAFFIC SAFETY ADMINISTRATION, U.S. DEPARTMENT OF 
 TRANSPORTATION; HON. JOHN D. GRAHAM, ADMINISTRATOR, OFFICE OF 
 INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND 
   BUDGET; AND HON. KENNETH M. MEAD, INSPECTOR GENERAL, U.S. 
   DEPARTMENT OF TRANSPORTATION, OFFICE OF INSPECTOR GENERAL

    Mr. Runge. Thank you, Mr. Chairman and members of the 
subcommittee. I am Jeff Runge, the new Administrator of 
National Highway Traffic Safety Administration. I welcome the 
opportunity to report on where we are with implementation of 
the TREAD Act.
    The TREAD Act, as you know, challenged NHTSA to do a lot of 
work. It required us to complete 15 separate rulemaking 
actions, 3 reports, 2 studies and 1 strategic plan. Many of 
those actions had tight deadlines, some as short as 30 days, 
but even so we are well on our way to accomplishing all the 
TREAD Act requirements.
    First I want to report on the actions we have taken under 
the TREAD Act to improve our defects program and then I'll 
report on actions taken to improve our safety standards and 
regulations.
    Within the defects program, the key TREAD Act provision 
gives us the authority to establish an Early Warning Reporting 
System. When the rule is final, motor vehicle and equipment 
manufacturers will be required to report a wide variety of 
information and relevant documents to us periodically.
    In January 2001, we began gathering information about early 
warning with an advance notice of proposed rulemaking. We 
received numerous comments from many constituencies that needed 
to be considered and many were integrated into a notice of 
proposed rulemaking in December 2001. The NPRM proposed 
requiring all manufacturers of motor vehicles and equipment to 
submit information on the claims and notices they receive about 
deaths and injuries allegedly caused by defects in their 
products. Manufacturers of 500 or more vehicles annually and 
all child restraint and tire manufacturers would have to submit 
information about injuries and statistical data about consumer 
complaints, warranty claims, property damage claims and field 
reports. The NPRM's comment period closed just 3 weeks ago on 
February 4. We were complimented on our responsiveness to the 
early comments and expect to issue the final rule by the June 
30, 2002 deadline.
    The TREAD Act also requires manufacturers to notify us 
about safety recalls and similar campaigns in foreign 
countries. In October 2001, we issued the NPRM and the comment 
period ended in December. The TREAD Act set no deadline for 
this rule, but for simplicity we plan to issue it at the same 
time as the early warning rule in June.
    We're also working hard to restructure the process we use 
for defects investigation. The TREAD Act has enabled us to hire 
additional investigators, to double the number of screeners and 
to establish a single point of contact for much outside 
reporting.
    One of Congress' primary concerns has been the Office of 
Defects Investigation's information, storage and management 
system. Through provisions of the TREAD Act, we are developing 
a new state-of-the-art data warehouse to process early warning 
information and to better manage ODI's data.
    We have worked intensively thus far with the Volpe National 
Transportation Systems Center to ensure that this system will 
address our needs and we expect to have it online, on schedule 
and under budget by the end of this year. Throughout the past 
year, we have been in frequent contact with the DOT's Office of 
Inspector General, Ken Mead, regarding these issues.
    Senator McCain asked the IG to analyze our investigation 
processes and to evaluate their effectiveness in identifying 
vehicle safety problems. We also looked to the IG to provide a 
review of the defects investigation process called for by the 
TREAD Act. After the IG's report was released in January, we 
reported on these matters to this committee and to the Senate 
committee on January 31. In brief, we concur with all of the 
recommendations in the IG's report. We have already implemented 
many of the recommendations, including the creation of a panel 
to formalize the review of the issues our screeners have 
identified as possible safety defects. We've also hired a 
contractor in response to the IG's recommendation for 
independent review of the development of the new data 
management system to augment our internal control processes.
    On the tire issue, the TREAD Act directs us to conduct 
several actions to improve the safety of tires. Our NPRM to 
require a warning system to indicate when a tire is 
significantly under inflated was published on July 26, 2001. 
The NPRM drew extensive comments and we've sought to resolve 
the issues raised by the comments. We sent the final rule to 
OMB on December 18, 2001, and on February 12, OMB returned the 
rule for reconsideration, based on some concerns it had 
identified. We've been working together on agreement with OMB 
and expect to have that completed within a few days.
    On the issue of tire endurance and resistance, we submitted 
an NPRM on performance improvements to OMB on December 17. OMB 
cleared the NPRM yesterday and it is up and available on the 
NHTSA website this morning.
    On tire labeling, we issued the NPRM in December 2001 and 
the comment period closed on February 19. There were comments 
that noted worker safety hazards and we are evaluating those 
comments. In fact, I have plans to visit a tire plant myself, 
actually three tire plants in April. We expect to meet the June 
1, 2002 deadline as well for this rulemaking.
    The TREAD Act also requires us to take two other important 
regulatory actions concerning vehicle rollover and child 
restraints and Mr. Chairman, I see my light is red, so I have 
them in my written comments or I can continue, if you like.
    Mr. Stearns. Well, is it possible you can just summarize a 
little bit? I'll give you 30 to 40 seconds.
    Mr. Runge. Thanks. On rollover, the TREAD Act directs us to 
develop a dynamic test by November 1 of this year and to 
conduct rulemaking to determine the best way to inform the 
public about our test results. Our request for comments, issued 
last July 3, described a number of driving maneuver tests from 
which we expect to select a test to compare the rollover 
resistance of motor vehicles. We expect to issue a second 
notice this spring describing our tentative choice of a test 
procedure. After considering the comments on this notice, we 
will issue a final notice in October 2002. That notice will 
describe the final test procedure along with an initial set of 
ratings on rollover resistance.
    With respect to child restraints, TREAD Act directs us to 
consider many performance elements and testing requirements. We 
sent an NPRM on child safety performance to OMB for review and 
we will be reporting to Congress about some elements for which 
insufficient data exists. We expect to issue a final rule by 
November 1 of this year.
    On the matter of labeling, our NPRM for labeling 
improvements was issued on October 29 and we expect to issue 
the final rule again by TREAD's November 1, 2002 deadline.
    On the rating system to help purchasers compare restraint 
systems, we examined the rating systems developed by other 
countries and some organizations and we conducted our own 
performance testing. The request for comments was issued on 
October 29 and we expect to have this implemented by the 
November 2002 deadline.
    Mr. Chairman, that concludes my oral testimony. You have my 
written testimony for the record.
    [The prepared statement of Hon. Jeffrey W. Runge follows:]

 Prepared Statement of Hon. Jeffrey W. Runge, Administrator, National 
                 Highway Traffic Safety Administration

    Mr. Chairman, Members of the Subcommittee, thank you for the 
opportunity to speak about the National Highway Traffic Safety 
Administration's (NHTSA) implementation of the Transportation Recall 
Enhancement, Accountability, and Documentation (TREAD) Act.
    The TREAD Act was enacted on November 1, 2000, as a direct 
consequence of hearings before the Committee on Energy and Commerce on 
the safety of Firestone tires and related matters. In the course of the 
hearings, the Committee determined that NHTSA could have detected the 
problems with the tires sooner if it had obtained reports about the 
tires' problems in a timelier manner.
    The TREAD Act therefore contains provisions requiring vehicle and 
equipment manufacturers to report periodically to NHTSA on a wide 
variety of information that could indicate the existence of a potential 
safety defect and to advise NHTSA of foreign safety recalls and other 
safety campaigns. The Act increases civil penalties for violations of 
the vehicle safety law and provides criminal penalties for misleading 
the Secretary about safety defects that have caused death or injury. It 
authorizes the Secretary to require a manufacturer to accelerate its 
program for remedying a defect or noncompliance if there is a risk of 
serious injury or death, and requires that manufacturers must have a 
plan for reimbursing owners who incur the cost of a remedy before being 
notified by the manufacturer. It also prohibits the sale of motor 
vehicle equipment, including a tire, for installation on a motor 
vehicle if the equipment is the subject of a defect or noncompliance 
recall. In a remedy program involving tires, the manufacturer must 
include a plan that prevents replaced tires from being resold for use 
on motor vehicles. The Act also directs the Secretary to undertake a 
comprehensive review of the way in which NHTSA determines whether to 
open a defect or noncompliance investigation.
    In addition, the TREAD Act directs the Secretary to conduct 
rulemaking actions to revise and update the Federal motor vehicle 
safety standards for tires, to improve labeling on tires, and to 
require a system in new motor vehicles that warns the operator when a 
tire is significantly underinflated. The Act also directs the Secretary 
to develop a dynamic rollover test for motor vehicles, to carry out a 
program of dynamic rollover tests, and to disseminate the results to 
the public.
    An extensive provision on child restraints requires that the 
Secretary undertake a comprehensive review of the safety of child 
restraints, upgrade the safety standard for child restraints where 
appropriate, establish a rating system for child restraints, study the 
effectiveness of automobile booster seats for children, and establish a 
plan for saving lives and reducing injuries through the use of booster 
seats.
    As this brief summary makes clear, the TREAD Act challenged us to 
do a lot of work. It requires us to complete 15 separate rulemaking 
actions, three reports, two studies, and one strategic plan. Many of 
the required actions had tight deadlines, some as short as 30 days. 
Some of these actions had not been on our agenda before the TREAD Act, 
so we had to accomplish the TREAD actions without compromising our work 
on other priority actions.
    Thanks to the additional resources the TREAD Act gave us, we are 
well on our way to accomplishing all of the goals of the Act's 
requirements. First, I will report on the actions we are taking that 
relate to the defects investigation program, and then on our actions to 
amend and adopt safety standards and regulations.
Defects Investigation
    On our actions to improve safety defect investigations, we have met 
all the rulemaking deadlines in the TREAD Act and are in the final 
stages of implementing other provisions that do not contain such 
deadlines.
    Within the defects program, the key TREAD Act provision gives us 
the authority to issue a final rule that establishes an Early Warning 
Reporting System. When this rule is final, motor vehicle and motor 
vehicle equipment manufacturers would be required to report a wide 
variety of information and to submit relevant documents to us 
periodically. In the past, our decisions on whether to open defect 
investigations have primarily been based on complaints we receive from 
consumers. Our efforts to identify potential defects in a timely manner 
have been hampered by an inability to obtain relevant information in 
the possession of the manufacturers. Experience has shown that 
manufacturers often obtain information suggesting the existence of a 
safety-related problem months, and sometimes years, before consumer 
complaints to NHTSA indicate a potential problem.
    In January 2001, we issued an advance notice of proposed rulemaking 
to begin implementing the early warning requirement. We followed this 
with a notice of proposed rulemaking (NPRM) in December 2001. The 
comment period for the NPRM closed on February 4, 2002. We are 
currently reviewing the over 50 comments received on the NPRM. We fully 
expect to issue our final rule by the June 30, 2002 deadline.
    We have proposed to require all manufacturers of motor vehicles and 
motor vehicle equipment to submit information about claims and notices 
they receive about deaths and injuries that are allegedly due to 
defects in their products. Manufacturers of 500 or more vehicles 
annually and all child restraint and tire manufacturers would also have 
to submit, with minor exceptions, statistical data about consumer 
complaints, warranty claims, property damage claims, and field reports. 
We believe that these submissions will help us identify potential 
safety defects in a timely manner, without unduly burdening the 
manufacturers.
    The TREAD Act requires manufacturers to notify the Secretary of 
safety recalls and similar campaigns in foreign countries. In October 
2001, we issued a NPRM prescribing the contents of the notifications. 
The comment period on the NPRM ended in December 2001, and we are 
currently reviewing the 20 comments received on the NPRM. We have also 
issued final rules to implement the civil and criminal penalty 
provisions and NPRMs to implement the other defect-related provisions 
noted earlier. On all these matters, we expect to issue final rules 
within the next few months.
    As we develop the early warning reporting requirements, we also are 
working hard to restructure the process we use for defects 
investigation. The TREAD Act has enabled us to hire additional 
investigators, doubled the numbers of screeners, and established a 
single point of contact for outside reporting. All of this information 
will be entered into the Office of Defects Investigation (ODI) 
database, where all screeners and investigators will have access to it.
    To improve ODI's outdated information storage and management system 
and to handle the large volume of information that will be submitted 
under the early warning rule, we have contracted with the Volpe 
National Transportation Systems Center (Volpe) to design and implement 
a new state-of-the-art data warehouse. We have worked intensively with 
Volpe and its subcontractors to ensure that this system will address 
our needs, and we expect to have it on-line, on schedule and under 
budget, by the end of this year. When the new system becomes 
operational, we believe it will enable us to manage and effectively 
utilize the early warning reporting data.
    Throughout the past year, we have been in communication with the 
Department's Office of the Inspector General (OIG), which was asked by 
Senator McCain to analyze ODI's investigative processes and evaluate 
their effectiveness in identifying vehicle safety problems. As 
Secretary Mineta advised the Committee on January 31, 2002, we looked 
to the OIG to provide the comprehensive review of ODI's work that 
Section 15(a) of the TREAD Act directed us to conduct. After the OIG 
released its report on January 3, 2002, we completed our reporting 
requirement under Section 15 with a supplementary letter to the 
chairman and ranking member of the relevant House and Senate 
committees.
    The Inspector General is here this morning to share his findings 
with you. But I want to state that we have concurred in all of the 
recommendations in his report and, in fact, have already implemented 
many of them, including the creation of a panel to review the issues 
our screeners have evaluated as possible safety defects. We have also 
hired a contractor, in response to the OIG's recommendation for an 
independent review of the project to develop the new data management 
system.
    Mr. Chairman, I believe we are implementing the TREAD Act 
requirements in a way that will significantly improve our ability to 
detect safety defects on a timely basis.
Tire-related Regulatory Actions
    The TREAD Act directs us to conduct several actions to improve the 
safety of tires, including rulemaking to improve the endurance and 
resistance standards for tires, to improve the information labels on 
tires, and to require a warning system to indicate to drivers when a 
tire is significantly underinflated.
    We completed the testing and preparatory work and submitted an NPRM 
proposing several tire performance improvements to the Office of 
Management and Budget (OMB) on December 17, 2001. We received clearance 
from OMB on February 22, and we are now preparing the NPRM for 
issuance. Completing this rulemaking as quickly as possible is one of 
my highest priorities.
    NHTSA issued an NPRM on tire information labeling in December 2001. 
The comment period closed on February 19, 2002. We are reviewing the 
comments on the NPRM and expect to meet the June 1, 2002 deadline for 
this rulemaking. The improved information resulting from this rule 
should make it easier for consumers to find and understand safety 
information about their tires.
    The NPRM to require a warning system to indicate to vehicle 
operators when a tire is significantly underinflated was published on 
July 26, 2001. The NPRM drew extensive comments. We have sought to 
resolve the issues raised by the comments and devise a system that will 
meet the intent of the TREAD Act in a manner that best serves safety. 
In the belief that we had devised such a system, we sent a final rule 
to OMB on December 18, 2001. On February 12, 2002, OMB returned the 
rule to us for reconsideration based on concerns it had identified. 
When we received OMB's return letter, we immediately began examining 
the issues it raised. Completing this rulemaking as quickly as possible 
is one of my highest priorities.
Other Regulatory Actions
    The TREAD Act also requires us to address two other aspects of 
motor vehicle safety. Section 12 of the Act requires us to develop a 
dynamic test of vehicle rollover by November 1, 2002, and to conduct 
rulemaking to determine how best to disseminate test results to the 
public. Section 14 of the Act contains several directives relating to 
the improvement of child restraint systems.
    NHTSA issued a request for comments on dynamic rollover testing on 
July 3, 2001. In our notice, we described a number of driving maneuver 
tests from which we expect to select a test to used to compare the 
rollover resistance of motor vehicles. The notice discussed the 
strengths and weaknesses of the various tests, and explained our 
rationale for preferring a driving maneuver test to other types of 
dynamic tests, such as centrifuge tests. We are now completing our 
review of the issues raised by the comments and expect to issue a 
second notice this spring describing our tentative choice of a test 
procedure. After we consider the comments on this second notice, we 
plan to issue a final notice in the fall of 2002 describing the final 
test procedure along with an initial set of rollover resistance 
ratings.
    Less than two weeks ago, NHTSA received the National Academy of 
Sciences' (NAS) report on dynamic testing for rollover resistance, as 
required by the DOT Appropriations Act for 2001 (P.L. 106-346). The 
report suggests that the agency consider supplementing the static 
stability factor test for rollover consumer information with the 
results of dynamic rollover tests. The National Academy concluded that 
this broader look at rollover performance would give a more robust 
consumer-rating program. The report had other findings not related to 
dynamic rollover testing. We are currently reviewing all of the 
report's findings and we will provide our formal response.
    Section 14 requires us to address several issues relating to child 
restraints, including improved restraint performance, better labeling, 
and a rating system to enable purchasers to compare restraints. Each of 
these issues was to be addressed in rulemaking actions that were to 
begin by November 1, 2001, and conclude by November 1, 2002.
    We issued an NPRM on October 29, 2001, proposing better and simpler 
labeling for child restraints. The changes include requirements for 
molding some information into the restraint's shell to improve 
durability, for better placement of some labels, for a uniform font for 
all labels, for white labels with black text, and for color-coded 
installation information to distinguish forward-facing from rear-facing 
information. We anticipate issuing a final rule to improve labels 
before the November 1, 2002 deadline.
    To develop a rating system for child restraints, we examined the 
existing rating systems that other countries and organizations have 
developed and conducted our own performance testing. In our request for 
comments issued on October 29, 2001, we stated that we had tentatively 
concluded that the best rating system is one that combines information 
about a restraint's ease of use with information about its dynamic 
performance obtained through higher-speed sled testing or in-vehicle 
testing through our existing New Car Assessment Program (NCAP). We are 
also considering using both higher-speed sled tests and NCAP tests. We 
are reviewing the comments we received and expect to implement the 
rating system by the November 1, 2002 deadline.
    To upgrade the performance requirements of the Federal motor 
vehicle safety standard on child restraints, we had to examine a 
standard whose requirements have gone through continual review and 
significant change in the last several years. In an effort to make it 
easier to secure child restraints properly in motor vehicles, we 
recently upgraded the standard to require uniform attachment features 
and required light-duty motor vehicles to be equipped with anchorages 
that will accommodate these features. We will propose to require some 
of the performance elements listed in Section 14 in an NPRM. However, 
on several of the elements, for which there are uncertainties about the 
appropriateness of rulemaking, at least at this time, we will issue an 
advance notice of proposed rulemaking requesting comments. Section 14 
requires us to submit a report to Congress if we decide not to 
incorporate any of the listed elements in a final rule. Before we can 
decide what should be included in a final rule, we must first obtain 
and carefully consider comments from the public.
    Mr. Chairman, this concludes my overview of our actions to 
implement the TREAD Act. The Act has challenged us, but I believe that 
we are meeting the challenge and that our actions will improve safety 
on the nation's highways. I will be glad to answer any questions you 
may have.

    Mr. Stearns. I thank the gentleman.
    Mr. Graham.

                STATEMENT OF HON. JOHN D. GRAHAM

    Mr. Graham. Good morning, Mr. Chairman, and thank you, 
members of the committee, for the opportunity to be here. Let 
me introduce myself. I was a faculty member at the Harvard 
School of Public Health for about 17 years before joining the 
Bush Administration in the Office of Management and Budget. It 
turns out during that period I had the opportunity develop a 
great admiration of Dr. Runge's work in the field of trauma 
care and it was a wonderful surprise for me to learn that we 
were going to get to know each other a little better in a very 
different capacity. I look forward to the opportunity to work 
with him and we're already making some significant progress.
    I'd also like to add that OMB supports the TREAD Act and 
we've been working very aggressively, as Dr. Runge indicated, 
for prompt implementation of the TREAD Act. I would also like 
to note that my role at OMB given to me by the President is to 
assure that all significant regulations by agencies, including 
NHTSA, have sound science and economics behind them and that's 
the review role that we play for the President.
    I would like to say a few things about the process of OMB 
review. First, we cover all significant regulatory actions that 
are designated as such under Executive Order 12866. We have a 
90-day review period. I insist that my staff give a response to 
agencies within that 90-day review period. And in cases of a 
statutory deadline, which is quite relevant in the TREAD Act 
situation, we engage in expedited review of agency proposals. 
In my written testimony to you I have provided information on 
the promptness with which OMB has responded to NHTSA's request 
for OMB review. There are also cases of Court ordered deadlines 
and hopefully we won't get to that in the case of the TREAD 
Act, but in those situations we try to respond on the order of 
the days to help agencies meet the Court deadlines they face.
    The outcomes of any OMB review are one of three 
possibilities. We clear the rule, the agency withdraws the 
rule, or we return the rule to the agency for reconsideration.
    Since I was confirmed in September, I have returned 17 
rules to various regulators throughout the Federal Government 
because of an inadequate scientific and economic basis for the 
conclusions that they have drawn. In five of those cases thus 
far, the agencies have improved their analysis, improved the 
rulemaking package, resubmitted it to OMB and it has been 
cleared. We expect those instances will happen more in the 
future.
    Let me talk specifically about the tire pressure monitoring 
system rule. OMB recognizes not only the statutory mandate, but 
the good policy sense behind the idea of a tire pressure 
monitoring system rule. So there's no disagreement about 
whether there should be a rule. There are some technical issues 
that we're working out.
    We also have an agreement for model years 2004 to 2006 that 
each vehicle that is manufactured and sold in this country 
should meet either a one-tire or a four-tire pressure 
monitoring standard.
    The concerns we have raised in the return letter which we 
shared with the committee and in my written testimony are what 
we should be doing for model years 2007 and beyond. Should we 
decide that now or should we gather some additional data before 
we make that decision?
    The concerns we have are as follows. First, we agree with 
NHTSA that the four-tire standard provides better tire-related 
safety than the one-tire standard. However, we assert that 
there is reason to believe that the one-tire standard may 
encourage more vehicles to be equipped with anti-lock braking 
systems and, while the evidence on the safety of anti-lock 
brakes is not definitive, there is suggestive evidence that 
those systems, in fact, reduce risk of death and injury to 
drivers, particularly drivers who learn how to use those 
systems properly.
    Second of all, we have concerns that the benefits analysis 
which NHTSA has done may have some unsupported assumptions and 
some questionable data that we understand NHTSA is working on 
right now. In summary, we've been doing a rigorous review of 
the tire pressure monitoring system rule. We did it very 
promptly under the circumstances and as Dr. Runge noted, we are 
very close to an agreement on that particular rule.
    Thank you very much for the opportunity to be here today.
    [The prepared statement of Hon. John D. Graham follows:]

  Prepared Statement of Hon. John D. Graham, Administrator, Office of 
  Information and Regulatory Affairs, Office of Management and Budget

    Mr. Chairman, and Members of this Subcommittee, thank you for 
inviting me to this hearing. I am John D. Graham, Ph.D., Administrator 
of the Office of Information and Regulatory Affairs (OIRA) in the 
Office of Management and Budget. My testimony will (1) explain the role 
that OMB plays in reviewing proposed and final regulations under 
Executive Order (E.O.) 12866, (2) describe the role we have played in 
reviewing rules issued by NHTSA pursuant to the Transportation Recall 
Enhancement, Accountability and Documentation (TREAD) Act of 2000, and 
(3) explain why we recently asked NHTSA to reconsider a draft final 
rule on tire pressure monitoring systems (TPMSs).
    I am especially pleased to testify at the same hearing as my 
Administration colleague Dr. Jeffrey Runge. For years I have been an 
admirer of Dr. Runge's work in the field of trauma care and I am 
convinced that he will prove to be one of the finest Administrators 
that NHTSA has had in the agency's 35-year history. I know how hard Dr. 
Runge and his staff are working to implement the ambitious provisions 
of the TREAD Act.
    OMB fully supports the safety goals of the TREAD Act and is working 
with NHTSA to produce the best possible regulatory actions given the 
resource and statutory constraints. We appreciate that NHTSA has been 
working under tight statutory deadlines and, as a result, OMB has 
performed its review function in an expedited yet rigorous manner.

                      OMB'S REGULATORY REVIEW ROLE

    Under E. O. 12866, OMB reviews all significant regulatory actions 
to ensure consistency with the principles of good regulatory analysis 
and policy. For those significant actions that cost the economy more 
than $100 million per year, such as the tire-pressure monitoring (TPMS) 
rule, E.O. 12866 requires the agency to perform a cost-benefit analysis 
that is reviewed by OMB.
    At both the proposed and final stages of a major rulemaking, OMB is 
provided up to 90 days to review an agency's rulemaking package, which 
includes the draft rule, the cost-benefit analysis and any other 
supporting materials. During the 90-day review period, analysts at OMB 
scrutinize the agency's work and, in some cases, collaborate with the 
agency to improve the analysis and/or the draft rule. There are 
ultimately three possible outcomes of OMB review: (1) clearance for 
publication in the Federal Register, (2) withdrawal by the agency for 
further consideration, and (3) return by OMB to the agency for further 
consideration.
    When a rule is returned to the agency, it is the practice of this 
Administration to prepare a formal return letter that is made available 
to the public as well as the agency. Since I was confirmed by the 
Senate in July of last year, I have signed 20 return letters about 
various draft regulations. In most cases, the reason for the return was 
an inadequate regulatory analysis. The public can review these letters 
on OMB's web site at www.whitehouse.gov/omb/inforeg/return--
letter.html. In five of those cases so far, the agency improved the 
regulatory package and resubmitted it to OMB, which cleared it for 
publication in the Federal Register.
    Each year OMB performs reviews of about 600 significant 
regulations, and about 60-80 are at OMB during any given month. During 
my tenure as OIRA Administrator, we have treated the 90-day review 
period as a performance indicator except in unusual circumstances 
(e.g., when the agency requests an extension of the review period). 
Agencies have a right to expect that OMB will perform rigorous yet 
timely reviews. The monthly number of OMB reviews that extend beyond 90 
days has plummeted from an average of 25 in calendar year 2000 to close 
to zero in the last three months.
    When an agency is facing statutory deadlines, such as those in the 
TREAD Act, we offer the agency expedited review and rarely consume the 
entire 90-day review period. When agencies are facing a court-ordered 
deadline, our reviews are even swifter. In some cases, we work 
informally with the agency to make sure that a regulatory package is in 
good shape before it is even formally submitted to OMB.

                PACE OF OMB REVIEWS UNDER THE TREAD ACT

    To date, OMB has conducted three formal reviews under the TREAD Act 
(including the draft final TPMS rule) under E.O. 12866. We have also 
reviewed another eight TREAD Act rules informally. Our average review 
time was 47 days for the formal reviews and 8 days for the informal 
reviews.
    In the case of the TPMS rule, NHTSA submitted the draft final 
regulatory package to OMB on December 17, 2001. (The statutory deadline 
for issuance of the final rule was November 1, 2001). We returned the 
rule to NHTSA for reconsideration on February 12th and have worked 
diligently with NHTSA since that date.

                  TIRE PRESSURE MONITORING TECHNOLOGY

    The TREAD Act requires NHTSA ``to require a warning system in new 
motor vehicles to indicate to the operator when a tire is significantly 
underinflated.'' Currently, there are two different ways to measure 
tire pressure: the direct system and the indirect system.
    The direct system has a battery-operated measuring device on each 
of the four tires and, as an optional feature, can provide a dashboard 
display of the inflation levels in each tire. This system is currently 
available only on certain high-priced models (e.g., the Lincoln 
Continental and the Lexus SC 430) and costs $66 per vehicle to install, 
plus a lifetime maintenance cost of $40.
    The indirect system infers tire pressure by using information from 
a computer in the car's anti-lock braking system. The difference in 
rotational speeds between wheels is compared to infer tire pressure. 
For vehicles with anti-lock brakes, the indirect system is inexpensive 
($13 per vehicle to install with negligible maintenance costs). A 
dashboard warning light indicates whether one of the tires is 
underinflated. The indirect system is currently installed on almost two 
million vehicles in the United States, including the Toyota Sienna and 
Ford Windstar.
    Given current technology, it appears that both systems could meet a 
``1-tire'' performance standard (i.e., the ability to detect 30% 
underinflation in one tire) while only the direct system could satisfy 
a performance standard that requires information on all 4 tires 
simultaneously.

                      THE ROLE OF ANTI-LOCK BRAKES

    From a tire-safety perspective, NHTSA has valid reasons for 
considering a mandatory ``4-tire'' standard for the future. This 
approach would assure that consumers would be warned when any 
combination of tires (1, 2, 3 or all 4) is underinflated. The 1-tire 
standard will provide warnings when 1 tire is underinflated but will 
not necessarily detect situations when 2 or more tires are 
underinflated. A further weakness of the 1-tire standard is that 
consumers may misperceive that their tires are fine (since the warning 
light is off) when in fact all four of their tires are equally 
underinflated. The 4-tire standard overcomes these problems.
    The tire-safety advantages of the 4-tire rule may not be decisive 
because the 1-tire standard encourages vehicle manufacturers to install 
anti-lock braking systems in vehicles that do not currently have them. 
The best available evidence, though not definitive, suggests that anti-
lock brakes reduce fatal crashes by 4 to 9%. Since these reductions 
apply to all fatal crashes, not just tire-related crashes, the safety 
benefits of more anti-lock brakes could easily outweigh the extra tire-
safety benefits of the 4-tire rule. About one-third of new vehicles 
sold today--primarily less expensive vehicles--are not equipped with 
anti-lock brakes. OMB's analysis indicates that retention of the 1-tire 
standard will encourage more consumer offerings of anti-lock brakes.
    If a vehicle manufacturer is considering adding anti-lock brakes to 
vehicles that do not currently have them, the cost to consumers of 
purchasing anti-lock brakes will be smaller under a 1-tire standard 
than a 4-tire standard. NHTSA has estimated that adding anti-lock 
brakes costs an average of $240 per vehicle. The cost of a direct tire-
monitoring system plus anti-lock brakes would be about $306 ($240+$66). 
The cost of an indirect system plus antilock brakes is about $253 
($240+$13). (Note that these comparisons ignore maintenance costs). 
Thus, the option of complying with an indirect system reduces the cost 
of adding anti-lock brakes by about $53 per vehicle ($306-$253), or by 
about 20%. The basic principles of economics suggest that these cost 
savings will induce more vehicles to be equipped with anti-lock brakes 
than would be equipped under a 4-tire standard. According to NHTSA, one 
large vehicle manufacturer intends to install anti-lock brakes in more 
vehicles if indirect TPMS are permitted.
    Many of the indirect TPMS now on the road are very crude and will 
need to be improved to meet NHTSA's 1-tire standard. It is also likely 
that technological advances will permit indirect systems to detect 
moderate underinflation in 1, 2 or 3 tires. However, a purely indirect 
system cannot meet the 4-tire standard because the system works by 
sensing the differences in pressures between wheels.
    OMB believes that a technology assessment should be conducted 
before making a final decision about whether the 1-tire standard should 
be retained or replaced by a 4-tire requirement. OMB has requested that 
NHTSA gather the following information: (1) an empirical study of 
actual tire pressure levels in vehicles with indirect systems and, if 
feasible, other types of TPMSs, (2) a cost analysis of alternative 
TPMSs that accounts for probable economies of scale of mass production, 
(3) an updated analysis of the sales of anti-lock brake systems and 
their safety impacts, and (4) an assessment of technological progress 
in development of improved TPMS. The results of these analyses could 
inform the decision as to whether a new rulemaking should be conducted 
for model years 2007 and beyond.

                  SHOULD ANTI-LOCK BRAKES BE REQUIRED?

    Since OMB's analysis indicates that the safety benefits of anti-
lock brakes may be substantial, it has been suggested that NHTSA should 
mandate anti-lock brakes in all new vehicles. This idea is worthy of 
consideration and would need to be addressed in a separate rulemaking. 
A good time to consider this option would be two years from now, when 
the real-world database on the safety benefits of anti-lock brakes may 
be large enough to draw definitive statistical conclusions.
    Thank you for the opportunity to appear today.

    Mr. Stearns. I thank the gentleman.
    Mr. Mead, for your opening statement.

                STATEMENT OF HON. KENNETH M. MEAD

    Mr. Mead. Thank you, Mr. Chairman. I want to commend you on 
having this hearing. I think it's important for oversight 
committees to hold hearings from time to time on matters as 
important as this. In fact, the implementation of the TREAD Act 
requirements is on our list of the top 10 management challenges 
facing the Department. We have issued our report as is noted in 
my prepared statement. Our testimony mirrors that report. And I 
would have to say that overall, I think NHTSA has been very 
responsive to the recommendations and findings in that report.
    I group our findings into three categories: first, 
completing the TREAD Act rulemaking. No. 2 is modifying the 
process that's used to make decisions and whether or not to 
open a defect investigation. And third is the information 
management system. It could well be that you have an excellent 
rule. All the manufacturers comply with that rule. And that you 
have volumes and volumes of data. You need a system that is 
fairly sophisticated to synthesize that information on 
something approaching a real time basis.
    First, I'd like to cover the TREAD Act rulemakings. I think 
the early warning system rule is certainly one of the 
centerpieces of that legislation. NHTSA has stayed on track in 
issuing the notices of proposed rulemakings. That's quite 
different though from actually issuing the final rule. And in 
the case of the TREAD Act, the first three statutory due dates 
were missed by about 6 months. One that's now pending is the 
tire pressure monitoring rule, I think it was due out on 
November 1.
    I ought to say that we did a review, a separate review a 
couple of years ago of the rulemaking process at DOT. We found 
that only about 10 percent of the statutory due dates for 
issuing regulations were met. The average cradle-to-grave time 
for a rule was about 4 years, 3.8 to be precise. Secretary 
Mineta is strongly committed to changing that process and 
certainly the TREAD Act offers a good test tube environment for 
doing that.
    No doubt about it, Mr. Chairman, the heavy lifting on the 
rulemaking lies ahead. NHTSA has issued the notice of proposed 
rulemaking on the early warning system, and the due date for 
that is this summer. There are 12 final rulemakings required 
and six have statutory deadlines.
    I believe the tire pressure monitoring rule shows the 
importance not only of meeting time lines, but ensuring the 
quality and substance of the rule. What's going on right now 
are discussions about the quality and substance of the rule and 
how best to resolve those issues. On the early warning rule, I 
expect that too will be controversial. The Alliance of 
Automobile Manufacturers has already weighed in on that and has 
expressed some reservations about how quickly it can be done 
and the resources required to implement the early warning 
requirement.
    I'd like to move to a recommendation we had in our report 
on a peer review panel process. We found that one was needed to 
ensure consistency when opening investigations. What we saw at 
NHTSA is that if a complaint comes in it gets assigned to a 
screener and essentially that screener and one other person 
make the decision as to whether or not to open an 
investigation. Without going into details of individual cases, 
we found a number of instances where NHTSA really couldn't 
explain why they made a decision to open an investigation or 
not open an investigation. It's an incredibly subjective 
process to begin with. So we recommended that they create a 
panel of senior NHTSA people so they all come together, and 
make decisions as to whether or not an investigation should be 
opened.
    Since we issued our report, 38 cases have appeared before 
this panel and in 34 of them NHTSA opened an investigation. We 
think a couple of steps still need to be taken. One is that if 
a screener decides that he or she will not recommend a 
potential defect for investigation, it falls into a hole and 
will not go before the panel. We think it should go before the 
panel at a certain point in time. We also think the panel, 
particularly on a negative decision, in other words, no 
recommendation that an investigation not go forward, ought to 
document its decision. So we have a trail to go back to and 
it's archived appropriately.
    Finally, I'd like to say a word about the defect 
information management system which several of the members have 
alluded to. The TREAD Act will rise or fall on how good a 
system that is. Two factors currently hamper NHTSA's ability to 
successfully implement a new defect information management 
system. The first is the quality of data in the current defect 
data base. I think you probably know from your deliberations in 
passing the TREAD Act, that the ratio of complaints that a 
manufacturer gets to those that consumers notify NHTSA in about 
is extraordinarily disparate. In fact, in one case we found 
during our audit that the manufacturer received over 1400 
complaints about a potential defect and when you look at the 
data base, there's 32 consumer complaints in there.
    We also found instances where the data base contains 
inaccurate and incomplete data. The specific example had to do 
with complaints that came in about accidents where brakes 
failed and the air bag didn't deploy. Well, if it's not 
properly coded what shows up in the data base is failed air 
bags, and nothing about the brakes. Or it could also be the 
converse. That's an illustration of the things that the new 
information management system will have to correct.
    The second factor is the risks associated with developing a 
data base of this type. This is going to have to be a 
sophisticated data base. We found that the project is in danger 
of not meeting its timeframes and quality goals within budget. 
Actually, I'm not sure that a data base of this type can be 
done within the budget that NHTSA has estimated.
    We audit the entire Department of Transportation and we see 
software intensive systems under development throughout the 
Department. You're probably familiar with some the FAA has 
undertaken and the track record there has not always been 
something to write home about. Software-intensive systems 
typically have overruns, both in schedule and budget. That's 
why we recommended here that NHTSA bring in an outside third 
party independent of the contractor to validate and verify the 
systems contractor's progress. NHTSA has said that they will do 
that and we're going to monitor the scope of the contract to 
make sure that that gets done properly.
    Thank you.
    [The prepared statement of Hon. Kenneth M. Mead follows:]

  Prepared Statement of Hon. Kenneth M. Mead, Inspector General, U.S. 
                      Department of Transportation

    Mr. Chairman and Members of the Subcommittee: We appreciate the 
opportunity to discuss the implementation of the Transportation Recall 
Enhancement, Accountability, and Documentation (TREAD) Act. We have 
identified the implementation of the TREAD Act as one of the 10 most 
important management challenges faced by the Department. Also, on 
January 3, 2002, we issued a report on the National Highway Traffic 
Safety Administration's (NHTSA) implementation of the TREAD Act.
    Our report included several recommendations to ensure the timely 
completion of the Act's requirements and to improve the operations of 
NHTSA. Specifically, the recommendations focused on adhering to 
rulemaking deadlines, improving the process for identifying potential 
defects and opening investigations, improving the quantity and quality 
of data on potential defects, and mitigating the risks associated with 
developing a new defect information system.
    In October 2000, Congress passed the TREAD Act to establish, in 
part, early warning reporting requirements for manufacturers so NHTSA 
is aware of potential defects as soon as possible. In its September 
2000 hearings, Congress questioned why NHTSA, Firestone and Ford did 
not act sooner to prevent the 103 deaths and over 400 injuries 
associated with the defective tires. These numbers have since increased 
to over 200 deaths and 800 injuries. Congress found the following: (1) 
NHTSA had insufficient data regarding the problems with Firestone 
tires, and (2) NHTSA did not use data it already had to spot trends 
related to tire failures.
    Since the Act was passed, NHTSA has made progress toward completing 
the TREAD Act requirements, but more work remains to achieve the goals 
of the Act.
     First, completing the TREAD Act rulemakings, most 
importantly the early warning reporting requirements rule, in a timely 
and comprehensive manner. NHTSA has already completed three final 
rulemakings including the rule requiring individuals to report to NHTSA 
the sale or lease of defective tires. NHTSA has been on track in 
issuing 9 notices of proposed rulemakings; but it still needs to 
complete 12 final rulemakings including 6 with statutory deadlines. One 
of the final rules, the tire pressure warning device rule, was due on 
November 1, 2001. However, the rule has yet to be issued. We understand 
that NHTSA and OMB are very close to resolving the issues associated 
with the proposed final rule.
    Several other rules are also complex and controversial, and have 
statutory deadlines for completion on or before November 1, 2002. These 
rules include establishing early warning reporting requirements for 
vehicle and equipment manufacturers; updating the tire standards; and 
improving child safety restraints. The rules will be controversial 
because there are differing views among the affected parties and 
interest groups on the substance of NHTSA's proposals. The status of 
the TREAD Act rulemakings and other actions are presented in Exhibits 
A, B, and C.
    We noted that factors such as differing views on the substance of a 
proposed rule, requirements for cost/benefit analysis, and the need to 
have other entities, such as the Department and the Office of 
Management and Budget (OMB), review a proposed rule, influenced the 
time required to issue a rule. Further, in our July 2000 report on the 
Department's rulemaking process, we noted that the Department met only 
10 percent of statutory deadlines and missed the statutory deadlines by 
an average of 3.8 years. However, Secretary Mineta has made the timely 
completion of rules a departmentwide priority.
    Issuing the early warning final rule by June 30, 2002, will be a 
significant challenge for NHTSA. Significant disagreements are likely 
between NHTSA and automobile manufacturers over the scope and 
parameters of the reporting requirements in the proposed rule. Late 
last year, NHTSA issued its notice of proposed rulemaking specifying 
the early warning data that manufacturers will be required to report. 
As proposed, the rule requires manufacturers to report data quarterly 
starting in April 2003. The data include deaths, injuries, property 
damage claims, warranty claims, field reports, and consumer complaints 
related to potential defects in various systems or components, such as 
electrical systems and air bags. Also, by April 2003, manufacturers 
will be required to submit, on a one-time basis, 3 years of historical 
early warning data.
    In commenting on the proposed rule, the Alliance of Automobile 
Manufacturers, an association of 13 domestic and foreign automobile 
manufacturers, stated that NHTSA ``has substantially underestimated the 
burden imposed by the proposed rules, and the resources in terms of 
staff time, the cash outlays and the efforts that will be required to 
develop systems that can reliably generate the reports proposed in the 
Notice of Proposed Rulemaking.'' Further, the Alliance stated that 
``NHTSA also underestimated the lead time that will be needed to 
prepare the new systems before the automatic reports can begin.''
    A current example illustrating how differing views between 
interested parties over the substance of a proposed rule can contribute 
to delays in the time required to issue final rules is the draft tire 
pressure warning device final rule. On February 12, 2002, OMB returned 
the draft final rule to the Department for reconsideration. NHTSA's 
draft rule proposed a standard under which all new vehicles would 
require a tire pressure monitoring system. NHTSA proposed a phase-in 
period lasting until 2006 which generally allows for the use of a 
direct system or an indirect system. A direct tire pressure monitoring 
system has a tire pressure sensor in each tire. The sensors transmit 
pressure information to a receiver. According to NHTSA officials, a 
direct tire system would alert a driver when a tire or any combination 
of tires is underinflated.
    In contrast, an indirect system does not actually measure tire 
pressure. Instead it relies on the wheel speed sensors in an antilock 
braking system to detect and compare differences in the rotational 
speed of a vehicle's wheels. Underinflated tires have smaller diameters 
and thus rotate faster. The indirect system relies on the anti-lock 
brake system which uses existing technology and is less costly than the 
direct system. However, according to NHTSA officials current indirect 
systems cannot detect when two tires on the same axle or two tires on 
the same side are equally underinflated.
    After the conclusion of the phase-in period in 2006, NHTSA's 
approach would require a system that alerts the driver when the 
pressure in 1 to 4 tires is 25 percent below the recommended level. 
According to NHTSA officials, current indirect systems can only alert 
the driver when the tire pressure has fallen to 30 percent or more 
below the recommended level. To meet the standard proposed by NHTSA 
would require vehicle manufacturers to install a direct tire pressure 
monitoring system.
    OMB requested that NTHSA provide a stronger analysis of the safety 
issues and benefits, including a formal analysis of a regulatory 
alternative that would permit indirect systems after the phase-in 
period. OMB stated that NHTSA could analyze an option that would defer 
a decision about the ultimate fate of indirect systems until the 
potential impact on installation of anti-lock brake systems is better 
understood. We understand that NHTSA and OMB are very close to 
resolving issues associated with the proposed final rule.
    In January 2002, we recommended that NHTSA begin reporting to 
Congress on a routine basis the milestone dates, budget estimates, and 
actions required to complete the TREAD Act rules. In December 2001, 
NHTSA provided Congress with a TREAD Act follow-up report, as required 
by the Act. NHTSA told us that they will provide additional reports 
when specifically requested by Congress. Given the heavy lifting that 
lies ahead for the TREAD Act rulemakings, NHTSA should begin reporting 
on a routine basis, the status of its rulemakings to Congress.
     Second, a peer review panel process is needed to ensure 
consistency when opening investigations. NHTSA agreed with our 
recommendation and has already begun using a peer review panel. We 
consider this a very positive step. The principal reason we recommended 
NHTSA establish a peer review panel and process is because we found 
instances where NHTSA did not open an investigation although the number 
of complaints, period of time, alleged defect, and potential 
consequences were similar to investigations that were previously 
opened. Further, the decision to open or not open an investigation was 
made by one or two persons, the basis for their decision was not 
readily apparent, and there was no documentation to support the 
decision. For example,
          Over a 4-month period, NHTSA received six complaints alleging 
        airbags failed to deploy in a 1998 sedan after a frontal crash. 
        All of the complaints noted injuries and one complaint stated 
        the driver was seriously injured. An investigation was not 
        opened, despite a recommendation by the defects analysis staff. 
        Within 1 year the number of complaints quadrupled from 6 to 24 
        complaints, but NHTSA still did not open an investigation.
          In another example, NHTSA received three complaints over a 4-
        month period alleging front suspension torsion bar breakage in 
        1993-1994 minivans. This alleged defect could cause the driver 
        to lose control of the vehicle and increase the risk of a 
        crash. Although the defects analysis staff recommended an 
        investigation; one was not opened. In contrast, NHTSA opened an 
        investigation of three complaints received over a 1-year period 
        alleging front suspension coil spring breakage in a different 
        vehicle that could pose a potential compromise to the driver's 
        ability to control the vehicle.
    To ensure consistency and transparency in NHTSA's processes, we 
recommended the use of a peer review panel to discuss potential defects 
as a group, make decisions as to whether or not an investigation should 
be opened, and to document the decision. We recommended that the panel 
consist of the Chiefs of the Defects Analysis and Investigation 
Divisions, as well as defects analysis and investigative staff.
    NHTSA agreed to implement this recommendation and we consider this 
a very positive step. We recognize that it is not possible to define 
criteria that will identify every potential defect. But a panel of 
experts drawing on the institutional knowledge of the staff and 
bringing management together to identify cases for investigation will 
ensure consistency in NHTSA's decision making process.
    Since November 2001, NHTSA has held six peer review panel meetings. 
According to NHTSA officials, the use of the panels has increased the 
percent of investigations opened. Of the 38 cases of potential defects 
considered for investigation, the peer review panel approved the 
opening of 34 investigations.
    Establishing a peer review panel is a significant step forward; 
however, it is not an end state. In addition to the steps already taken 
we recommend the NHTSA Administrator should ensure that (1) protocols 
for the panel process are written, (2) decisions are documented, and 
(3) the panel receives and reviews information when the defects 
analysis staff determine that an investigation should not be opened.
     Third, developing a new defect information management 
system to replace the currently flawed system. This is important 
because the success of the TREAD Act will ultimately rise or fall on 
the quality and usefulness of the early warning data and the capacity 
of the new system to process the high volume of data. Two factors 
currently hamper NHTSA's ability to successfully implement a new defect 
information system: (1) the quality of the data in the current defect 
database and (2) the risks associated with NHTSA's systems development 
efforts.
    We reported that NHTSA's existing defect database, the primary tool 
it uses to identify potential safety-related defects in vehicles and 
equipment, significantly understates the number of potential safety 
defects. For example, NHTSA's database contains substantially less 
complaints than consumers make to manufacturers. In one case, we found 
that the manufacturer received 1,411 complaints regarding transmission 
failures resulting in the loss of fluid and increasing the risk of 
fire, while NHTSA received 32 complaints.
    Further, the defect database contains incomplete and incorrectly 
recorded information regarding potential defects. For example, we found 
complaints in which consumers described problems with failed brakes 
that led to accidents where the airbags did not deploy. However, only 
the airbags and not the brakes were recorded as problems in the 
database.
    The existing data in the defect database will serve as the 
foundation for the new information system. Therefore, it is 
particularly important that NHTSA review and edit the existing data in 
the defect database, including the descriptions of complaints, for 
accuracy and completeness before transferring the data to the new 
information system. In response to our recommendation, the NHTSA 
Administrator stated that the data will be reviewed for improperly or 
inconsistently recorded data and corrected before being transferred to 
the new system.
    We also reported that NHTSA's project with Volpe National 
Transportation Systems Center (Volpe) to replace its current database 
with a new information system by the fall 2002 was significantly at 
risk of not meeting quality, cost, and schedule goals. Historically, 
the Department's systems development projects, including those using 
commercial off-the-shelf software as a basis, have been plagued by cost 
overruns and implementation delays. While the Federal Aviation 
Administration (FAA) problems in developing software intensive systems 
are well known, the Department and NHTSA have experienced their share 
of problems with software development as well.
    For example, DOT had incurred contract costs of at least $26 
million to develop a new financial management system using commercial 
off-the-shelf software. However, 1 year after the original 
implementation date, the system was still not fully operating as 
intended. Also, the costs of NHTSA's National Advanced Driving 
Simulator, which involved software development, grew to almost twice 
the original estimate and the simulator was completed 3 years later 
than originally estimated.
    NHTSA describes its new information system efforts as an 
acquisition of commercial off-the-shelf software. However, the software 
will require modifications and involve systems development work. The 
National Institute of Standards and Technology outlines procedures to 
ensure that software development efforts are successful. One of these 
procedures includes having an independent third party validate and 
verify that the system will meet the user's needs. We recommended that 
NHTSA obtain the services of an independent third party to assess the 
contractor's progress, reduce development risk, and advise NHTSA of its 
findings.
    In response to our recommendations to ensure that the new defect 
information system is completed on time and within budget, NHTSA 
recently hired a third party contractor to validate and verify that the 
new system will meet its needs and reduce development risk. The 
contractor will provide NHTSA with weekly status reports and monthly 
assessment reports. We will monitor the contractor's findings and the 
corrective actions taken by NHTSA.
    This concludes my statement. I would be pleased to answer any 
questions.
                               Exhibit A

                            TREAD Act Completed Rulemakings--As of February 12, 2002
----------------------------------------------------------------------------------------------------------------
                                                                         Statutory
            TREAD Act Section                        Purpose              Deadline          Action to Date
----------------------------------------------------------------------------------------------------------------
Sale or Lease of Defective Tires.........  Requires individuals to         01/29/01  Completed: Final Rule
                                            report to the Secretary                   issued
                                            when knowingly and                         07/23/01.
                                            willfully selling or
                                            leasing for use on a
                                            vehicle a defective or
                                            noncompliant tire when
                                            having actual knowledge
                                            that the manufacturer has
                                            notified dealers of such
                                            defect or noncompliance.
Safe Harbor..............................  Precludes individuals from      01/29/01  Completed: Final Rule
                                            receiving criminal                        issued
                                            punishment if the person                   07/24/01.
                                            (1) at the time of the
                                            violation, did not know
                                            that the violation would
                                            cause death or serious
                                            injury and (2) corrects
                                            the improper report or
                                            failure to report within a
                                            reasonable time. The
                                            Secretary shall establish
                                            by regulation what
                                            constitutes reasonable
                                            time and sufficient
                                            correction.
Civil Penalties..........................  Amends the regulations to           None  Completed: Final Rule
                                            reflect changes in the                    issued
                                            National Traffic and Motor                 11/14/00.
                                            Vehicle Safety Act
                                            regarding civil penalties.
----------------------------------------------------------------------------------------------------------------

                               Exhibit B

                         TREAD Act Rulemakings to Be Completed--As of February 12, 2002
----------------------------------------------------------------------------------------------------------------
                                                                         Statutory
            TREAD Act Section                        Purpose              Deadline          Action to Date
----------------------------------------------------------------------------------------------------------------
Early Warning............................  Requires manufacturers to       06/30/02  Notice of Proposed
                                            report claims data,                       Rulemaking (NPRM) issued
                                            warranty data, customer                   12/21/01.
                                            satisfaction campaigns and
                                            recalls, and any incidents
                                            of serious injuries or
                                            fatalities (allegedly or
                                            proven to be caused by a
                                            possible defect in systems
                                            or components) for which
                                            the manufacturer receives
                                            actual notice.
Tire Pressure Warning Device.............  Requires a warning system       11/01/01  NPRM issued
                                            in new vehicles to                         07/26/01. OMB returned
                                            indicate to the driver                    final draft rule to NHTSA
                                            when a tire is                            for reconsideration on
                                            significantly                              02/12/02.
                                            underinflated. Requirement
                                            becomes effective 2 years
                                            after the completion of
                                            the rulemaking.
Tire Standards...........................  Requires the Secretary to       06/01/02  NPRM sent to OMB on 12/14/
                                            update the tire standards                 01.
                                            (Standards 109 and 119).
Improved Tire Information................  Requires the Secretary to       06/01/02  NPRM issued
                                            improve the labeling of                    12/19/01.
                                            tires to assist consumers
                                            in identifying tires that
                                            may be subject to a recall.
Safety of Child Restraints...............  Requires the Secretary to       11/01/02  NPRM sent to Office of the
                                            draft regulations for                     Secretary (OST) on
                                            improving the safety of                    12/03/01.
                                            child restraints,
                                            including minimizing head
                                            injuries from side impact
                                            collisions. The Secretary
                                            must consider several
                                            criteria, therefore
                                            resulting in multiple
                                            rulemakings.
Ratings Program..........................  Requires the Secretary to       11/01/02  NPRM issued
                                            establish by regulation a                  11/06/01.
                                            child restraint safety
                                            rating consumer
                                            information program.
Report on Defects in Foreign Countries...  Requires manufacturers to           None   NPRM issued
                                            report within 5 working                    10/11/01.
                                            days when conducting a
                                            safety recall or other
                                            safety campaign in a
                                            foreign country for an
                                            identical or substantially
                                            similar vehicle as a
                                            vehicle offered for sale
                                            in the United States.
Acceleration of Remedy...................  Permits the Secretary to            None  NPRM issued on
                                            require manufacturers to                   12/11/01.
                                            accelerate the remedy
                                            program if the Secretary
                                            finds that there is a risk
                                            of serious injury or death
                                            and that the acceleration
                                            can be reasonably achieved
                                            by expanding the sources
                                            of replacement parts,
                                            authorized repair
                                            facilities, or both.
Reimbursement Prior to Recall............  Requires manufacturers to           None   NPRM issued on
                                            include in their remedy                    12/11/01.
                                            programs a plan for
                                            reimbursing owners who
                                            incurred the cost of the
                                            remedy within a reasonable
                                            time in advance of the
                                            manufacturers'
                                            notification of recalls.
                                            The Secretary may
                                            establish by regulation
                                            what constitutes a
                                            reasonable time and other
                                            reasonable conditions for
                                            the reimbursement plan.
Sale of Replaced Tires...................  Requires manufacturers to           None  NPRM issued on
                                            include in remedy programs                 12/18/01.
                                            a plan for how
                                            manufacturers will prevent
                                            replaced tires from being
                                            resold and how to limit
                                            disposal of replaced tires
                                            in landfills. Manufacturer
                                            will include information
                                            about the implementation
                                            of the plan in each
                                            quarterly report to the
                                            Secretary.
Sale of Replaced Equipment...............  Prohibits the sale or lease         None  NPRM issued
                                            of any vehicle equipment                   07/23/01.
                                            (including tires) for
                                            installation on vehicles
                                            when the equipment is
                                            subject to a recall. An
                                            exception exists if the
                                            defect or noncompliance is
                                            remedied before delivery.
Certification Label......................  Requires intermediate or            None  Drafting Rulemaking Support
                                            final stage manufacturers,                Paper.
                                            for vehicles built in more
                                            than one stage, to certify
                                            that they complied with
                                            specifications provided by
                                            the first manufacturers or
                                            that they have elected to
                                            assume responsibility for
                                            complying with the Federal
                                            Motor Vehicle Safety
                                            Standards.
----------------------------------------------------------------------------------------------------------------

                               Exhibit C

                            TREAD Act Non-Rulemaking Actions--As of February 12, 2002
----------------------------------------------------------------------------------------------------------------
                                                                         Statutory
            TREAD Act Section                        Purpose              Deadline          Action to Date
----------------------------------------------------------------------------------------------------------------
Insurance Study..........................  Requires the Secretary to       03/01/01  Completed: Report issued on
                                            determine the capability                   03/05/01.
                                            and benefits of obtaining
                                            aggregate information
                                            regarding insurance claims.
Follow-Up Report.........................  Requires the Secretary to       11/01/01  Completed: Transmitted to
                                            report to Congress on the                 Congress 12/14/01.
                                            implementation of the
                                            TREAD Act and provide
                                            recommendations for
                                            additional amendments.
Recall Criteria..........................  Requires the Secretary to       11/01/01  Completed: Transmitted to
                                            review and update all                     Congress 01/31/02.
                                            standards, criteria,
                                            procedures, and methods
                                            for determining whether to
                                            open a defect or
                                            noncompliance
                                            investigation. The
                                            Secretary shall report
                                            findings to Congress.
Education Program........................  Requires the Secretary to       11/01/01  Draft plan to OST on 02/04/
                                            develop a 5-year strategic                02.
                                            plan to reduce deaths and
                                            injuries, caused by
                                            failure to use booster
                                            seats, by 25% among 4 to 8
                                            year olds.
Booster Seat Study.......................  Requires the Secretary to       11/01/01  Draft report within NHTSA.
                                            study the use and
                                            effectiveness of booster
                                            seats and submit the
                                            results to Congress.
Rollover Tests Rating Program............  Requires the development of     11/01/02  Request for Comments
                                            a dynamic test on                         published on 07/03/01.
                                            rollovers by 11/01/02 and
                                            creation of a consumer
                                            information program. The
                                            Secretary shall conduct a
                                            rulemaking to determine
                                            how best to disseminate
                                            the test results.
----------------------------------------------------------------------------------------------------------------


    Mr. Stearns. I thank the gentleman.
    Let me start with questions. For legislators who are 
involved with the testimony which we used to develop the TREAD 
Act and then when we had the mark-up and it went to full 
committee and then to the House floor and the Senate and 
finally passed, everybody thinks something is going to happen 
immediately. And I think constituents, as well as the public 
feel that there will be answers and there will be lives saved, 
but it's all dependent, as you mention, Mr. Mead, this TREAD 
Act is going to rise and fall on this data base and how the 
criteria is set up so that we can accurately come up with an 
implementation to prevent these problems.
    One of the things we all talked about with this tire 
pressure monitoring system and Dr. Runge, we are aware that 
NHTSA and OMB have had a difference of opinion in the direction 
of this tire pressure monitoring system rule, but continue to 
discuss this issue. I think the first question I would have is 
what is the status of this on-going discussion because for many 
of us this would be helpful and we could save lives if we had 
this implemented and show the public how to use it.
    Mr. Runge. Thank you, Mr. Chairman. Let me point out, first 
of all, that this is a late one and we are very sensitive to 
that. I also wanted to point out that OMB has been working very 
diligently with us and in fact, very quickly, to my surprise, 
on all of our TREAD rules.
    Indeed, there has been a great level of discussion and some 
debate between NHTSA and OMB, but I want to point out that this 
is a normal part of the decisionmaking process that certainly 
is not unique to us or unique to this Administration. It's been 
going on for a long time. And that discourse, I believe, leads 
to truth. Certainly, we have no corner on the market on brains 
and neither do they. Working together, we can finally achieve 
what will be a great rule to implement for the American people 
which will have safety as its No. 1 priority.
    So the goal of this process is to develop those policies 
that have a balanced perspective and the final result will be 
consensus. So we have over the course of a few months reached a 
general agreement.
    Mr. Stearns. So you now have produced an agreement between 
you and OMB?
    Mr. Runge. We have some details to work out. The lawyers, 
in fact, are working on it. Dr. Graham and I have had numerous 
discussions on this. We both have an academic background. We 
enjoy the exchange of ideas and we believe that we do have a 
substantive agreement.
    Mr. Stearns. Is there a date when you can say you'll have a 
final date when this will be obtained?
    Mr. Runge. I'm hesitant to give you a final date because 
that's out of my hands. We met with our attorneys last night 
who are talking about how to structure it. In fact, as Dr. 
Graham told you earlier, it will be a rule in which we have a 
phase-in period which allows either system and then a gathering 
of additional data to decide what to do.
    Mr. Stearns. Let's say the year 2004, will the tire 
pressure monitoring system be in place by the year 2004?
    Mr. Runge. The year 2004 is when the phase-in would begin.
    Mr. Stearns. Would begin.
    Mr. Runge. Yes.
    Mr. Stearns. And it will be complete 2000 when?
    Mr. Runge. We got comments on the docket from the equipment 
manufacturers saying that it would be virtually impossible for 
them to ramp up production within the 2-year timeframe. So we 
talked to the manufacturers, talked to the equipment 
manufacturers and have come up with a 3-year interim period in 
which they will be phasing in----
    Mr. Stearns. The problem for many of us are these type of 
discussions that OMB and the Inspector General, you have, go on 
and on and on and yet I think the public and we as legislators 
expect this to be implemented in less than a decade, in less 
than 4 or 5 years. Most of these automotive companies probably 
could implement this thing immediately.
    Have you ever had a workshop or has it ever been suggested 
that you sit down with all the manufacturers both on the 
automobile side and the part side and have a big technical 
workshop to explore these issues and how to implement them 
quickly and then this information be brought back to the 
Inspector General and OMB and say this is what industry can do 
right now. Let's get on it and let's do it, instead of the 
government agencies continuing to discuss and negotiate and go 
back and forth and look at the data. Maybe industry can have an 
input. So my question is, has there been a technical workshop 
and if not, do you think that's a good idea?
    Mr. Runge. I will say that our staff has gotten lots and 
lots and lots of input on all sides of this issue, both 
formally and informally. And I believe that we are very 
knowledgeable at this point about what the capabilities of 
industry are to ramp up production and in fact, to install 
either type of monitor, either the 1-tire or the 4-tire 
standard.
    Mr. Stearns. Mr. Mead had mentioned this information 
system. Perhaps industry could help you interpret this data and 
could say to you okay, this is important, this is not important 
and could expedite streamline your interpretation analysis of 
this. So I think bringing in the industry into this mix and 
having them discuss with you in a technical workshop would be a 
great idea, not just for their ideas in implementing, but also 
how to get this data base that Mr. Mead had talked about so 
that it's meaningful because as I mentioned in my opening 
statement, we're going to have data pouring into you and unless 
you have the people, the time, the materials and the 
credibility and criteria, nothing is going to happen. We'll be 
negotiating here for a decade on this stuff because if there's 
a slip today, and there's a slip tomorrow, this slip will go 
for 10 years. And here we pass this bill and then 5, 6, 10 
years later, we're still talking about a phase in.
    Mr. Mead?
    Mr. Mead. Can I reinforce one element of what you said? We 
found in our audit on this information system that one of the 
areas of shortfall were the interfaces that NHTSA was going to 
have with the manufacturers information system. They have to 
talk to each other.
    Mr. Stearns. So right now they're not compatible?
    Mr. Mead. No. In fact, we're not sure what NHTSA's system 
is going to look like, so it's very timely to start developing 
this interface for the information management system.
    Mr. Stearns. Mr. Runge, just before I finish, is there 
anything you'd like to add?
    Mr. Runge. Well, yes. In fact, if I could sort of frame out 
the estimated finish date for some of these things. Keep in 
mind that the final rule is not complete yet and the comment 
period is closed. We have a lot of comments. We actually have 
more comments for the advance notice of proposed rulemaking. 
These comments will be incorporated; and by the way, this is a 
very transparent process. Industry has lots and lots of input 
into this as well. Many people in this room have weighed in 
heavily on this issue. When the rule is finished, we plan to 
have the data system completed during this summer and during 
that time we plan technical workshops with the IT people in 
industry to make sure that they are constructing their systems 
so that they can get the proper amount and type of data into 
our data system. So we are fully aware of the need to integrate 
technology. Believe me, the last thing we want is a van-load of 
paper backing up to the back door of the DOT building. We are 
keenly aware of the need to make this as easy as possible for 
us to accumulate and analyze the data. Mr. Mead's zeal about 
this issue has been infectious and I've caught the disease. I 
promise you and the rest of the subcommittee that we will be on 
top of this to the max.
    Mr. Stearns. Okay. My time has expired. The gentle lady 
from Colorado, Ms. DeGette.
    Ms. Degette. Thank you, Mr. Chairman. Well, I think 
everybody agrees that the TREAD Act is going to, as Mr. Mead 
said, rise and fall on the quality and usefulness of the new 
information system and ODI's ability to identify potential 
defects. And he said that today in his testimony and also in 
his report. But then the Inspector General went on to say that 
``to be fully operational by fall 2002 is at risk because of 
poor project planning and management.'' And furthermore he said 
that NHTSA can't identify safety defects in a timely manner 
because it has an unstructured approach for analyzing data and 
determining if a potential defect exists and where there's 
further investigation.
    So I want to ask a few questions about this information 
management system because I think this is the pressure point 
for the whole success of the TREAD Act.
    First of all, Dr. Runge, the Inspector General reports that 
less than 10 percent of the complaints made by consumers to 
manufacturers are contained in the current ODI data base. Is 
that correct?
    Mr. Runge. I certainly can't dispute that.
    Ms. Degette. So you think it would be correct?
    Mr. Runge. One of these guys probably knows the exact 
percentage, but I would say that's----
    Ms. Degette. The Inspector General also found that the 
current database often ``contains incomplete and incorrectly 
reported information regarding potential defects.'' Do you 
agree with that assessment?
    Mr. Runge. Well, keep in mind that this was part of the 
purpose of the TREAD Act.
    Ms. Degette. Right. So you would agree that it does contain 
this kind of information?
    Mr. Runge. Sure.
    Ms. Degette. Thank you. Is it fair to say that the old 
system is probably inadequate and doesn't work properly?
    Mr. Runge. I think the new system will be lots and lots 
better than the old system.
    Ms. Degette. Yes or no, do you think that the old system 
works properly?
    Mr. Runge. I think the old system works fairly well, 
actually.
    Ms. Degette. You do? Okay. So what's the rush then, in your 
mind, for the new system?
    Mr. Runge. It will be better.
    Ms. Degette. Okay.
    Mr. Stearns. Mr. Runge, could you just move the microphone 
a little closer to you?
    Mr. Runge. Sure.
    Ms. Degette. Now when ODI is in full compliance with the 
Act, 100 percent of consumer complaints will be collected by a 
new information management system. Is that right? That's the 
new system you're talking about?
    Mr. Runge. That's the goal.
    Ms. Degette. Now, the new ODI information system, according 
to the Inspector General, is projected to only cost $5 million 
to be paid out over the next 3 years and will consist of 
commercial off-the-shelf software, correct?
    Mr. Runge. The architecture will be off-the-shelf.
    Ms. Degette. And the software will be off-the-shelf, right?
    Mr. Runge. The software is being designed by a 
subcontractor of Volpe, right now.
    Ms. Degette. In fact, what we've heard on the committee is 
that the new system is going to be Excel spreadsheet software. 
Is that correct?
    Mr. Runge. I'm not sure which architecture it is, whether 
it's Excel or another spreadsheet----
    Ms. Degette. So you don't know.
    Mr. Runge. That's correct.
    Ms. Degette. Can you find out for me and let us know?
    Mr. Runge. Sure.
    Ms. Degette. Great. Now do you think that the proposed 
system is going to be adequate to serve its function?
    Mr. Runge. We have three layers of oversight in this thing. 
I have not personally asked for the software design, nor would 
I know what to do with it if I saw it. Yes, the commitment to 
you guys is is that this will be adequate to do the job.
    Ms. Degette. And you think $5 million is going to be 
sufficient to pay for that?
    Mr. Runge. We have a contractor who is currently working 
under budget and believes they can get it accomplished.
    Ms. Degette. Is part of your contractor's function to 
ensure that the data will be secure?
    Mr. Runge. Yes, security is an issue.
    Ms. Degette. How big of an issue is it?
    Mr. Runge. I can't answer that now. I'll be happy to answer 
these technical questions later.
    Ms. Degette. That would be great. Mr. Mead, what do you 
think about the proposed information management system? Do you 
think the funding of this system, the design of the system and 
the security are going to be adequate? Do you think $5 million 
is going to be enough to finance it?
    Mr. Mead. No.
    Ms. Degette. Could you please explain why?
    Mr. Mead. As I was saying in my oral statement, we audit 
information management systems throughout the Department. For 
those that are being developed, people often say this system is 
off-the-shelf. I have yet to see a system that is designated as 
off-the-shelf as really being off-the-shelf. People think off-
the-shelf means that you go out and you buy the software, you 
install it, and then you can use it. This system is going to 
require substantial refinement and revisions.
    Ms. Degette. And in fact, that's what Dr. Runge is saying 
too. It's not really off-the-shelf.
    Mr. Mead. No, it isn't. And software contracts are 
typically cost plus which means that you pay depending upon how 
much software development is involved. And they're rarely fixed 
price and this one is not fixed price either.
    Ms. Degette. $5 million is not the fixed price?
    Mr. Mead. I would be very impressed if it comes in at $5 
million.
    Ms. Degette. Why don't you think that what they're talking 
about would be adequate, if you can zero in on that?
    Mr. Mead. Because I think this system is going to get 
disparate data input from multiple sources and that it's going 
to have to have some collocating or synthesizing abilities. In 
other words, the computer is going to have to operate something 
like a brain to pull all this information together so the right 
person in NHTSA when they pump an inquiry about a particular 
model, can get all the information about that model and they 
can get it on a real time basis. This is not like a program 
that you can construct at home. That is why we feel that it is 
so important to have a third party come in who has software 
expertise and advise Dr. Runge of how well the Volpe Center and 
their subcontractor is performing and also recommend to Dr. 
Runge midcourse corrections. NHTSA really does not have 
software development expertise.
    Ms. Degette. Dr. Runge, do you have--let me just ask one 
more question, if you don't mind, Mr. Chairman. Do you have any 
objection to that third party advisor coming in and helping you 
develop the system?
    Mr. Runge. Absolutely not. We have a third party who is 
looking at the overall time lines to make sure. We just 
contracted with them to make sure that the project is on time 
and is paying attention to what Volpe is doing.
    Ms. Degette. We need a third party----
    Mr. Stearns. The lady's time has expired. The gentleman 
from Michigan is recognized.
    Mr. Upton. Well, thank you. Thank you, again, Mr. Chairman, 
for having this oversight hearing and appreciate the testimony 
and I know we've had a couple of discussions in particular with 
regard to the tire pressure monitoring system. And I just want 
to underscore the importance of getting that done and beginning 
to see a rule implemented and I appreciate your understanding 
of that issue and just want to underscore again the thought 
that this was the intent of the Congress, that we work very 
closely with industry. I note that on a number of higher priced 
models that are available today, that there is a system that's 
available. Frankly, I think we can improve on what they have in 
place and I'm delighted that sound science is going to take the 
underlying role here by getting an agreement and working 
together. I know that the American consumers are going to 
benefit in a major, major way so that all of us will know when 
our tires are under pressurized and I just want to thank you 
for what you're doing to make sure that we get this implemented 
as fast as we can and that that science will rule the day and 
begin to see the type of system installed, perhaps earlier than 
what date you actually set, putting more gas on the fire to get 
it done. I appreciate the chairman's work on this and if you 
want to comment further, I guess you had some discussions last 
week. And I had to step out momentarily, but do you think that 
we'll have some idea in the next couple of months, next couple 
of weeks or early summer? When do you think we're going to see 
the right flags flying?
    Mr. Runge. I think we're close enough that we can say it 
will be a week or 2.
    Mr. Upton. Terrific. Mr. Graham, do you agree with that as 
well? I want to thank you also on your picture on CQ. I thought 
it was--I get it at my home now since we still don't have 
office deliveries here.
    Mr. Graham. We must have good timing with your hearing 
coming up.
    Mr. Upton. That's right.
    Mr. Graham. I think that Dr. Runge and I are in conceptual 
agreement on the contours of the tire pressure monitoring rule 
and now it is for the lawyers, frankly, to actually put it into 
the words and I don't think that's going to be too long.
    Mr. Upton. Have you had also some constructive input from 
both the tire manufacturers as well as the industry itself, the 
auto industry itself in terms of what they think is do-able?
    Mr. Graham. Yes sir, I have. Both sides.
    Mr. Upton. Good. Well, I just applaud you on that work and 
look forward to getting it done and obviously I know this 
subcommittee will continue to oversee what's going on and 
appreciate your willingness to appear here this morning.
    Thank you.
    Mr. Upton. Thank you, sir.
    Mr. Stearns. I thank the gentleman. The gentleman from 
Tennessee, Mr. Gordon.
    Mr. Gordon. Thank you, Mr. Chairman. The proposed rule on 
tire labeling envisions placing a tire identification number of 
both sides of the tire as has been mentioned earlier today. I'm 
concerned that this does not take into account the realities of 
the tire business. It's my understanding this will pose a 
safety hazard to workers in these tire plants and create a 
significant redesign of the current method of tire production 
with hundreds of millions of dollars being passed on to 
consumers.
    In order for the tire identification number to be placed on 
both sides of the tire, the mold press would need to be changed 
midway through the production process, a practice that would 
require a worker to insert himself or herself within the mold 
which will be extremely hot, 300 degrees or more. Alternately, 
the entire line would need to be shut down for a number of 
hours, until the mold could be changed, thereby losing hours of 
valuable production. This may actually even delay getting 
better labeling on the tires as it takes more time to 
completely rehaul the manufacturing process.
    So Dr. Runge, I guess my question is, the date stamp in 
question here, what about the idea that the date stamp be left 
on one side of the tire, while the other markings, like the 
type of the tire, where it was made, be placed on both sides 
and also what about the possibility this information could be 
replicated on the tire warranty brochure?
    Mr. Runge. Congressman Gordon, I'm sure we'll be happy to 
consider that. The making of tires is sort of new to this 
doctor and I have planned to actually go to two auto tire 
plants and one truck tire plant in April. This concern has been 
expressed to me by people who understand the processes and the 
last thing we want to do is compromise the safety of workers.
    As I understand the motive for this rule in the first 
place, it has been difficult when a tire recall occurs for a 
consumer to find the number that would identify the tire 
necessary for the recall. If there are other motives--there may 
be other motives, but that's the primary one that I recall 
hearing from staff.
    We will listen to all comments. The comment period closed 
on the 19th of February. I have not seen the comments. Mr. 
Kratzke, I'm sure, has. And this has been expressed to me 
personally by people from the industry and we'll be very 
sensitive to that.
    Mr. Gordon. I think the most important information is what 
type of tire and where it's produced and the additional cost 
and the safety hazard of having to weekly change both sides on 
terms of the labeling of the date. Once you have a chance and I 
commend you for going out and taking a real world look at this, 
I think it might then give you a better idea.
    A lot has been talked also about today about the tire 
pressure. And it's my understanding or my concern that this 
proposed rule on indirect tire pressure monitoring which I 
understand is less accurate than the direct monitoring system 
may not give drivers adequate warning regarding tire inflation.
    Is it necessary to ensure that the tire inflation pressure 
is sufficient to carry maximum load? I'd like Mr. Graham and/or 
Dr. Graham or Dr. Runge to maybe address this indirect versus 
the direct monitoring.
    Mr. Graham. Yes, I think your point is, as we understand 
it, technically correct, that the direct system that is in a 
couple of the high-priced models mentioned previously does have 
more accuracy and precision in providing information for 
consumers on tire pressure than the existing indirect systems 
now out on the road. And I think that's one of the areas where 
Dr. Runge and I are in agreement.
    Mr. Gordon. So what is the thought process? Is it 
determining is it a cost matter or what? If it's a better 
system, what would be your rationale for not going with a 
better system?
    Mr. Graham. As OMB has explained in the return letter from 
a tire safety perspective, the direct system is a superior 
system. On the other hand, the one-tire rule would allow the 
indirect system, which has the benefit of encouraging the 
vehicle makers that don't currently offer anti-lock brakes to 
offer them in the future. And as a consequence of that, there 
is an offsetting safety advantage of the one-tire system. So 
the approach that we're taking is to work on this for a couple 
more years in terms of the information collection before we 
make a final decision on whether to go with a 4-tire or a 1-
tire standard.
    Mr. Runge. If we consider this holistically also, please 
keep in mind that we are proposing rulemaking for tire upgrade. 
Since it's on our website now, I can tell you what's in the 
NPRM and one of the things we're recommending or we are 
proposing is that tires be tested at an under inflation-level 
consistent with what we see in real world data, so that if, in 
fact, this rule comes into place, tires will be safer even at 
lesser inflation. So we're trying to consider this holistically 
with the idea that ABS brakes may turn out to be a beneficial, 
even though real-world data has not yet shown that to be true. 
We believe that they are because they stop quicker and so 
forth. So we're in harmony here.
    Mr. Gordon. Thank you.
    Mr. Stearns. I thank the gentleman. Mr. Pitts is 
recognized.
    Mr. Pitts. Thank you, Mr. Chairman. Sorry I'm late. I had 
other meetings. You may have covered this, Dr. Runge, the early 
warning system. How are you planning to use the early warning 
data that you will be receiving?
    Mr. Runge. If I could just back up a second and talk to you 
about the process that we have. There's been some mention made 
that we don't have a methodology for looking at complaints, and 
that's the farthest thing from the truth. We have a formal 
process that involves eight screeners and an office director 
and a panel to look at the various sorts of data from consumer 
complaints, from reports from industry, insurance company 
reports and the like. And they decide when the number of 
complaints rises to the level of an initial evaluation.
    Now the difficulty with that right now is that there is a 
haystack of information arriving and we are constantly trying 
to find the needle. What we look forward to with the early 
warning rule is some help from technology. There are computer 
systems in existence that can help perform that type of 
surveillance. They can find the needles a lot easier than an 
individual screener can find them. So when we have access to 
all of the data that we are proposing in the NPRM for the early 
warning rule, in a systematized fashion that will be electronic 
and not paper, and in concert with the industry, we do believe 
that it will be possible to pick up problems sooner, before 
they rise to the level of a huge defect involving thousands or 
millions of vehicles or tires or anything else. So there will 
still be a subjective element to this when the data arrive, but 
very clearly, we'll have the ability to detect those problems 
before they really get out of hand.
    Mr. Pitts. Can you comment on the challenges that NHTSA 
faces in creating and implementing a dynamic rollover test?
    Mr. Runge. Yes sir, thank you. Let me just say at the 
outset that as a physician who has treated numerous, numerous 
crash injuries over the last couple of decades, rollover 
crashes are the worst. They predict to us physicians that we 
need to look and look and look and make sure that nothing is 
wrong because the injuries are often not overtly severe, but 
are occult in nature. Having said that, rollover is one of my 
very top priorities as Administrator of NHTSA. Right now, 
rollovers, even though they represent only about 4 percent of 
crashes, are responsible for almost one-third of occupant 
fatalities. So we have a problem. I will pledge to you that we 
will be tackling rollover from a multi-faceted point of view.
    With respect to the standard, I think that the subcommittee 
may have had access to the NAS report that came out a couple of 
weeks ago. One of the things that I was delighted to see is 
that the static stability factor tracks extremely closely with 
real world crashes, so we already have an excellent way to rate 
vehicles with respect to their propensity to roll over.
    Now the NAS report also said that a dynamic test could 
offer additional benefits, so we are actively pursuing that in 
compliance with the TREAD Act.
    There are many opinions about how this should be done. 
There are robotics methods. There are driver methods that are 
much more subjective. There are J-turns and S-turns and there 
are probably many other alphabetical terms out there. So 
NHTSA's objective is to evaluate all of these and then narrow 
them down and then select the one in time for the final 
rulemaking that becomes part of our rating system and will be 
published.
    I am also concerned on this part of TREAD that we need to 
get this information out to the broader public. We have it on 
our website. We market it through printed materials. We would 
love it if everyone would visit our website before they 
purchase a car, but that's probably not practical. So in 
addition to coming up with a dynamic standard and our static 
standard which you know does track the real world very well, we 
will intensively market our findings once those occur.
    Mr. Pitts. Thank you. I see my time is up.
    Mr. Stearns. Thank the gentleman. The gentleman from 
Massachusetts, Mr. Markey.
    Mr. Markey. Thank you, thank you, Mr. Chairman, very much. 
Dr. Runge, it's good to have a physician here today. I've been 
on Contact for 4 days. Do you think I should move to the Z-
pack? I can't shake this thing.
    Mr. Runge. Only insofar as antibiotics do not help with 
viruses, Mr. Congressman, I think you're probably fine.
    Mr. Markey. I am the author of this direct/indirect ABS 
provision, so I'm going to try to help you with congressional 
intent here, if it's relevant over to 1B, especially. And I can 
understand the balancing that you're trying to engage in, but 
it's my understanding that this ABS, the antilock brake system 
indirect protection works dealing with kind of the rotational 
speed of the wheel. And if there's only one tire that's 
underinflated, it works very well. But if there's two that are 
underinflated, then it might not detect it because it might 
look as though to the device that there is a perfect rotation, 
that these wheels are still engaging it. So it wouldn't give 
you a warning.
    My own personal experience is that when I go into a gas 
station and we're all a little bit, in general, behind the 
curve in terms of how frequently we go over to that air pump to 
check it out, it's just kind of human nature, like going to the 
doctor. You always try to delay an extra day or two, maybe it 
will clear up. So you don't do it as frequently as you should, 
that you often find them fine after you put the air in the tire 
you thought had a problem and then you walk around and go oh 
yeah, look at the other one over there too. I better do the 
other one as well. Now does that happen 25 percent of the time 
or 50 percent of the time? It's a pretty high percentage of the 
time. You do another tire as well.
    And since we're trying to deal with people who are not 
obsessive about filling their tires with air, it's probably 
that group of people that we're most concerned with. It might 
be the Mom with the three kids and all the other activities 
that she's trying to have a job as well, not checking all the 
tires. But waiting for that light to go on because she bought a 
new vehicle that has a light that will go on when there's a 
problem, but not if two tires are under inflated.
    Now I'm told that there are collateral benefits of having 
an antilock brake system go into place and I guess there would 
be because if one of the tires did blow, when two of them were 
out, you'd have a higher percentage of likelihood that the 
brakes would work at that point. So you would have a good 
braking system when the tires blew. But you wouldn't 
necessarily get warnings that the tires were going to blow 
because it would only warn you if one tire was underinflated 
and you'd get deceived, in other words. You'd actually be put 
into a situation where it was an attractive nuisance. It was an 
invitation to keep driving, driving faster, because the light 
will go on whenever you have a problem, but not if two are out, 
all four are out, underinflated, which I'm afraid for too many 
families, that is the case. They just don't pay attention. 
That's the point of the light, to warn you. And of course, if 
you inflated them all at the same time, originally, they're 
probably deflating at the same rate into that dangerous 
category. Makes sense to me. Maybe I'm wrong, but that's how my 
human nature works.
    So my concern is that we not miss an opportunity here to 
get people what they really do need to deal with their real 
lives, which are busy. They see a vehicle as just another 
appliance. They don't pay as much attention to it, all too many 
Americans as they should perhaps, but we can't assume that 
they're going to. And since most of us do get surprised when we 
start filling up our tires, it's not just that one that you 
notice on the side as you're getting into the car, but it is 
the one or the other on the other side as well, that NHTSA, I 
think, is heading in the right direction here. So I'd like, if 
you could, Mr. Graham, just to respond to that because I think 
that's a legitimate real world concern that has to be addressed 
as NHTSA tries to balance your concerns.
    Mr. Graham. Congressman, you raise a number of excellent 
points and I have to say in all candor that in many ways a lot 
of the arguments are very familiar to me because Dr. Runge has 
been making these arguments to me over the last week or so and 
I think that there is a pretty clear case that direct 
monitoring devices on each of the four tires is going to 
provide better tire-related safety than a 1-tire standard that 
uses the type of indirect measurement system that you referred 
to.
    However, we should keep in mind that the indirect 
technology linked to the ABS system is not fixed, it's not 
constant. There's effort under way now to improve the quality 
of indirect systems and if we were to make a decision too early 
that we're not going to be permitting those indirect systems in 
the future, that has the potential to slow the rate of 
technological progress in the development of indirect systems. 
So the agreement that Dr. Runge and I have engineered is that 
for the next 2 years we will continue to study the actual tire 
pressure levels in those vehicles out there that have indirect 
systems to determine whether or not they're of significant 
safety benefit. And, at the same time, we shall watch the 
development in the technology. It may be in the final analysis 
that NHTSA is right, that we ought to go for the 4-tire system 
and mandate that or it may be that we'll learn some things in 
the next couple of years that would lead us to a different 
conclusion. But I think our agreement is for Model year 2007 
and beyond, we don't need to decide that issue today.
    Mr. Markey. Here's my problem, Doctor.
    Mr. Stearns. The gentleman's time has expired.
    Mr. Markey. If I may have 1 additional minute, I would 
appreciate it.
    Mr. Stearns. By unanimous consent, so ordered. One 
additional minute.
    Mr. Markey. Thank you. I am, after 26 years on this 
committee, become a technological agnostic. I don't know what 
the future holds and yeah, there are a lot of geniuses out 
there and they're going to try to shoot down a Soviet missile 
in a minute and a half after it's launched and this committee 
is going to try to make sure that we can call across the 
country and have video conferences with our families across the 
country and it only costs 10 cents a minute. We know that that 
will happen some day, but maybe not in our lifetimes. So while 
all of this technologically possible, it doesn't mean that it's 
ever going to be achieved. And so my message to you is this, 
that unless you can put on the books a standard which 
guarantees that families driving their children to school or to 
vacations have a warning light that comes on that is accurate, 
and timely to protect the safety of those families, then this 
amendment, the Markey Amendment is not being implemented. And 
we cannot delay pending industry disinterest in putting the 
strongest possible standard on the books pending some 
investment that they're going to make in the future. Because if 
that doesn't happen, there must be some guillotine, some hammer 
which comes down which mandates that it happens because 4 years 
from now every new car in the United States should have a 
guarantee that when there is one underinflated tire, one, that 
the light comes on. Now it could be a direct or indirect, but 
if they don't develop it, you can't give them an indefinite 
extension of time because they will take that as a blank check 
to not provide the public safety which for the past generations 
these industries----
    Mr. Stearns. The gentleman's time has expired.
    Mr. Markey. [continuing] have not provided to the public. 
That's why we're here. We're here because these industries did 
not provide the safety for these families. And we're deluding 
ourselves if we believe they're going to pay the price 
voluntarily. They will delay. They will stall. They will use 
any scientific or technological hedge to make sure they don't 
have to put this in place. And we went through too much in 
here, we saw too much suffering to allow this to be delayed any 
further than it absolutely has to. And there has to be a 
guarantee that the hammer comes down and that they put in a 
system that works in a very brief period of time.
    Mr. Stearns. The gentleman's time has expired. We're going 
to take a break, but the gentleman from New Hampshire has one 
quick question and then we'll take a break.
    Mr. Bass. Yes, thank you very much. Dr. Runge, does NHTSA 
have any idea at this point what the cost of the early warning 
rulemaking will be to the automobile equipment manufacturing 
industry?
    Mr. Runge. Congressman Bass, I do not have the answer to 
that question. I'd be happy to consult my staff. They may have 
it. I will get that during the break and we'll get back to you.
    Mr. Bass. I yield back, Mr. Chairman.
    Mr. Stearns. I thank the gentleman. The committee will take 
a break. If you allow, indulge us, we're going to vote and 
we'll be back and we'll have a second round of questioning.
    [Brief recess.]
    Mr. Stearns. The subcommittee will reconvene and at this 
point we finished, except for Mr. Sawyer and then we'll start a 
second round of questioning and so the gentleman from Ohio is 
recognized for 5 minutes for his set of questions.
    Mr. Sawyer. Thank you very much, Mr. Chairman. I have a 
couple of observations and then a line of questioning I'd like 
to ask.
    First of all, I am very pleased to see Dr. Runge engaged in 
the question of worker safety. It is both a question of safety 
and very, very substantial cost for what I suspect you may find 
is a marginal gain in consumer information. But nonetheless, I 
commend you for your interest in making sure that consumers are 
able to locate tires that may be at risk.
    Second, I want to suggest to you that I really value 
anything that you can do to make ABS and other traction 
management systems more universal in automobiles. I value those 
systems, but I would hope that in determining which tire 
pressure monitoring system you go to, that standards for 
accuracy tolerance be the way in which you measure which system 
works better. I continue to believe that it is not the--it is 
less frequently a matter of absolute defect in tires than it is 
cumulative damage over time for marginal under inflation that 
ultimately leads to catastrophic failure. It's the effect of 
heat in an under inflated tire that does the damage, it seems 
to me. So I was really grateful to hear the conversation that 
took place.
    Let me turn to a more direct question. I understand that 
the labeling rule would re-order the location of the production 
date in the alpha numeric sequence that identifies the tire. Am 
I correct about that?
    Mr. Runge. Congressman Sawyer, I've got to confess that my 
knowledge of the technical details of where these numbers are, 
other than on either side of the tire is very limited.
    Mr. Sawyer. What I'm suggesting is that it goes from the 
last item in the identification series to the first item in the 
identification series and I for the life of me can't understand 
why that's important? But I do know that in the course of 
making the transition from older tires where it's located on 
the back to newer tires where it's located on the front, that 
it has a high likelihood of exacerbating consumer confusion 
rather than illuminating the information it's trying to convey.
    I also suspect it could affect the data base system and the 
difficulty in managing huge amounts of data where you've got 
different sequences of identifier.
    Have you looked at those kinds of things or have your folks 
looked at those kind of things? Has the IG looked at that as a 
problem in consumer information and data base management?
    Mr. Runge. No sir, but I can promise you that Mr. Kratzke, 
my Associate Administrator for Performance Standards, has been 
writing diligently behind me. He notes here that the reorder is 
because consumers often give us the first four digits of the 
long number that they see when they are reporting complaints. 
And the comments that we receive during the comment period 
mirrored yours, that we may be causing more confusion than we 
are solving and this will be resolved in the rule. I do thank 
you for your comment.
    Mr. Sawyer. Thank you very much.
    Mr. Mead. No, we have not, but the illustration of the code 
reminds me of an issue with the system. Say you get a complaint 
in or something from the manufacturer that does list the code. 
You want your system to be able to put that in the right place. 
Say somebody else writes in and doesn't have the full code, but 
they're referring to the same tire. Will this system be smart 
enough to be able to reconcile it or at least edit it out and 
put it in a bin and say to some staffer at NHTSA this doesn't 
fit in the right place. You have to figure out where to fit it. 
I think it's a really good point, but the direct answer to your 
question is no, we haven't looked at that issue.
    Mr. Sawyer. I am grateful for your willingness to take a 
look at it. I see I'm about to run out of time. Are we going to 
have a second round, Mr. Chairman?
    Mr. Stearns. Yes, we are.
    Mr. Sawyer. I'll yield back. The gentleman's time has 
expired. I'll start the second round.
    Mr. Mead, are there any recommendations that the Inspector 
General made that NHTSA is not implementing?
    Mr. Mead. They were responsive overall. I was very 
encouraged, and particularly encouraged with Dr. Runge's and 
our interface. Now I would hasten to add that we made two 
recommendations, one dealing with the information management 
system and the second dealing with the rulemakings. I do think 
there is a benefit in letting this committee and other 
appropriate committees know regularly the status of all these 
rulemakings and not just oh, it's coming, but also kind of a 
heads up that there are some very contentious issues 
surrounding the early warning rulemaking and this date may not 
be met.
    I think that's beneficial, good interchange between the 
executive branch and the legislative branch. I want to make 
sure on the information management system that we get a third 
party in there that knows something about software that is 
verifying and validating that software to make sure that it's 
going to meet NHTSA's requirements and that Dr. Runge has very 
good advice on problems that are developing and what mid-course 
corrections to make.
    On the peer review, they've been very responsive to our 
recommendation. I think that's an extraordinarily positive step 
and a change, material change in the procedures. They also need 
to have some procedure where a staffer, a screener of 
complaints does not recommend an investigation. How does that 
get on the radar screen of this panel? Because that's, in 
effect, a decision not to move forward with something, made at 
a low, not a low--but a middle management level.
    I think NHTSA can figure out some way to implement that 
recommendation.
    Mr. Stearns. I think, Dr. Runge, it sounds like you got a 
passing grade here.
    I think that's what he gave here. He mentioned this peer 
review panel to ensure consistency in decisions, whether an 
investigation should be opened. I am just your response to what 
he just said.
    Mr. Runge. Well, in general, he's exactly right. I would 
point out that when a screener chooses not to bring a series of 
cases to the attention of the panel, it's not because they have 
written it off, it's because they're following it along. When 
these complaints come in, they are coded in certain ways, as 
Mr. Mead pointed out earlier, and they're coded by individuals 
who code these things all the time. So they know into what 
category these complaints should go and the screeners develop 
an expertise around the areas of complaints that they deal 
with.
    When something smells bad to them, for lack of a better 
term, they bring it up. If it has not yet risen to that level, 
they follow it along. So he's exactly right in that we do need 
some fail safe method----
    Mr. Stearns. Of peer review?
    Mr. Runge. Of identifying cases that may not have risen to 
that level, but a periodic look at the cases that are being 
followed.
    Mr. Stearns. He had mentioned that the NHTSA data base is 
fraught with problems and errors. And are you folks agreed to 
sort of review and edit the existing data before transferring 
this new information in if it's already fraught with errors and 
how are you handling that?
    Mr. Runge. That's a great question. I think we have some 
difference of opinion about how fraught with errors it is.
    Mr. Stearns. So you're saying it's not?
    Mr. Runge. Well, we can always do better. One of the 
beauties of the new system coming in is that we are going to 
have to incorporate a lot of our existing information into the 
new surveillance system. I believe as part of that process the 
cleaning up and recoding will be a natural course of events 
there.
    Mr. Stearns. Let me ask each of you what is the No. 1 
concern toward implementing the TREAD Act today? What would you 
think the most important No. 1 problem that we could leave this 
hearing with an understanding from each of you that we would 
have to accomplish?
    Dr. Runge, I'll start with you first.
    Mr. Runge. As I consult my cheat sheet of corrections 
here----
    Mr. Sawyer. Forty or 50 probably.
    Mr. Runge. I learned the entire human body in 4 years; 
after 6 months, I'm barely scratching the surface of the TREAD 
Act.
    Mr. Sawyer. Yes. That's a nice honest----
    Mr. Runge. I would say quite honestly, this is a difficult 
question to answer because so many of these things are so very 
important and you have given us the resources and the 
opportunity to address things that had frankly been not 
addressed. I do believe personally that the early warning 
system, if done the way we expect it to be done, will result in 
our ability to detect problems sooner before they rise to the 
problem of a national public health emergency.
    Getting help from artificial intelligence will enable us to 
do a better job, and I really do believe that when we look back 
at this thing 10 years from now, of all these rules that have 
come out, that will be the one where we will look at it and say 
that really was a good investment of the taxpayer's money.
    Mr. Stearns. Dr. Graham?
    Mr. Graham. Yes, Mr. Chairman, there has been a lot of 
attention this morning on the deadlines issues and the pace of 
rulemaking and this sort of thing and I think it's perfectly 
appropriate that a committee like this put that type of 
constructive encouragement on both NHTSA and OMB. However, I 
think like Dr. Runge suggested, 10 years down the road when we 
look back, the quality of these rules in terms of the 
underlying engineering and economic information behind them, is 
going to influence whether or not we have saved as many lives 
as we can with the resources available. In that sense, I think 
the technical issues here should not be overlooked.
    Mr. Mead. I think you're going to get a very good 
rulemaking for the early warning system. I think the 
manufacturers will largely comply and you'll have lots of 
information at NHTSA and it will be important that you know how 
to distill, synthesize that information, sort through it, get 
rid of the junk, the garbage and hone in on the important ones.
    Mr. Stearns. So the No. 1, toward implementation is getting 
rid of the information that's not relevant and making sure that 
the relevant information is part of the early warning system?
    Mr. Mead. Yes sir. I think the advanced rulemaking that 
I've reviewed for the early warning system is quite credible.
    Mr. Stearns. Okay. Thank you. My time has expired. The 
gentle lady from Colorado.
    Ms. Degette. Thank you, Mr. Chairman. To finish the 
question I was asking earlier to Dr. Runge, Mr. Mead suggested 
that you need an outside person to help you, to make the 
software work. And Dr. Runge, what I was simply asking was do 
you have any big objection to implementing that kind of control 
to make sure that your software is actually working to get the 
data that you're going to need?
    Mr. Runge. Absolutely no objection at all, other than the 
economic barrier that we face in hiring that kind of 
consultant.
    Ms. Degette. I think I can speak for the whole committee, 
Dr. Runge, in saying we want to make sure this is done right 
and so if it costs extra money, I would not hesitate to hire an 
outside individual consultant to make sure that your software 
is right to begin with. If you need the money, please come and 
let us know because the important thing is that the Act get 
implemented right and I think you would agree with that.
    Mr. Runge. Yes ma'am, thank you very much.
    Ms. Degette. Let me just ask one more question. I know, 
Doctor, that you testified earlier that you were coordinating 
with a number of industry representatives and what the TREAD 
Act says is, of course, that the suppliers and manufacturers 
are going to have to comply with this early warning rule.
    So I'm wondering, of these groups, how many of these 
industry participants have you consulted in developing the 
information management system? The 23 light vehicle 
manufacturers, all heavy truck manufacturers? All recreational 
vehicle manufacturers? Auto suppliers, child seat 
manufacturers, school bus manufacturers and on and on? How many 
of those have you consulted in developing the data base?
    Mr. Runge. Thus far, I can't answer that question. I can 
tell you that we are planning to have technical working groups 
in the summer to get together on how to best receive the data 
from them. The quality of the data will depend greatly upon on 
how it's done at the front end and we recognize that.
    Ms. Degette. That's right. Mr. Mead, what do you think 
about the fact that none of these or few of these groups have 
been consulted to date on developing the data base?
    Mr. Mead. I think now is the time to consult with them.
    Ms. Degette. Thank you. I would urge that that happen, too.
    And Mr. Chairman, if I might, I think there's a great deal 
of good will in this committee toward NHTSA and to Dr. Runge 
who's recently come into the job. I think the motives are good, 
but I think there's also a growing amount of concern about the 
delays and implementation of the TREAD Act. And frankly, Mr. 
Chairman, I'd hate to be back here in another year finding out 
that implementation is once again delayed. But worse, I'd hate 
to be back here in 5 years having a hearing and learn that 
NHTSA did not find the needle in the haystack that Dr. Runge 
talks about, that because of an inadequate database or 
inadequate information management, more American lives have 
been lost and so I would really urge all of you to work with 
all due speed, but also with all due thoroughness, to make sure 
that this Act is implemented correctly.
    And I yield back the balance of my time.
    Mr. Stearns. I thank the gentle lady. The gentleman from 
Ohio.
    Mr. Sawyer. Thank you, Mr. Chairman. As I understand it, 
currently when a passenger tire is installed on an SUV or a 
light truck, the tire's load rating is reduced by 10 percent. 
That 10 percent reduction was omitted from the proposed rule. 
Having the, I suspect, unintended consequence of permitting a 
load increase of 10 percent for passenger tires used on those 
kinds of vehicles seems to conflict with the intent of the Act 
and I'm just inquiring whether this was an omission or whether 
it's a change in policy?
    Mr. Runge. Mr. Kratzke tells me that this was not omitted 
from the rulemaking. They are aware that passenger car tires 
are derated for load at 10 percent.
    Can you ask me more specifically and I'll make sure I get 
you the right answer quicker.
    Mr. Sawyer. I'd be glad to. Let me, Mr. Chairman, while 
I've got a little extra time, I remember last year when we 
asked the great Jacques Nasser whether tires and automobiles 
function together as a system and he sat just about where you 
are, Doctor, and said no, they do not. And I was just 
dumbfounded by that. I found something I'd like to read for the 
committee, put into the record. A Ford engineer arrived, named 
Jacques Beget, arrived in the United States in 1955 and found a 
niche in the relatively unexplored world of quantifying tire 
and suspension interaction. Beget stressed the need to analyze 
tire, vehicle and road together rather than to think of the 
tire alone. And he wanted hard numbers. His persistence led to 
a string of SAE publications explaining numerical analyses of 
skid and rolling resistance, wet traction, nonuniformity among 
tires and the behavior of radial tires on American cars. In 
1965, Automobile News could report ``for the first time, 
Detroit auto makers are actually setting the design 
requirements of the 35 to 45 million tires they purchase 
annually.'' Their demands had never been truly quantifiable 
before.
    This is the same Jacques Nasser who when asked by William 
Ford who is the highest paid employee of the Ford Motor 
Company, replied well, I'm the President and you're not 
compensated directly, so I guess it's me. He said no, it's a 
fellow named Edward Irvine. And he said do you know who Edward 
Irvine is? He says he makes $13 million a year. He had no idea 
who he was. He said he's our Formula One driver with our Jaguar 
Division. You should have known that. My guess is he should 
have known this too.
    I thank you, Mr. Chairman, and yield back.
    Mr. Stearns. As CEO of Ford Motor Company, of course, he's 
no longer there.
    Mr. Sawyer. Yes, that's true.
    Mr. Stearns. The gentleman from Massachusetts is recognized 
for a second round of questioning.
    Mr. Markey. Thank you, Mr. Chairman. And I don't want to 
prolong this because obviously, I made pretty clear what I was 
interested in during my first round. I guess what I wanted to 
say though is that whether it be a direct or indirect system, 
they're fine during a transition, obviously. Makes sense. At 
the time that we did the TREAD Act, this tire safety act, a 
couple of years ago, there were already models out there. So we 
already had a model. Early stage stuff. It was already out 
there, in vehicles, proving that it could be done and done 
inexpensively which is why I think my amendment was basically 
something that everyone could agree on this committee should be 
adopted, if it was already out there in that early stage of 
development. And that was an indirect system based on ABS which 
was fine, but at some point in the future we need to move to a 
system that lets you know if you're at risk if two or all of 
your tires are underinflated which I'm afraid is an all too 
typical situation for average, busy American families. And we 
just have to give them that. And that's the real intent of the 
Act.
    Now some day an ABS system might achieve that, but at some 
point after a transition I think NHTSA is right, we have to 
move to the technology that provides the safer, more accurate 
warnings for American families. And we can't delay that 
indefinitely waiting for a technology to arrive that might 
never arrive, as much as would hope that it would. And so 
that's basically my message here today, that we have to have 
the goal as being firm if families are given all the 
information about all their tires. And if the industry 
announces they're in a crash program and that they're going to 
develop an ABS based system and it's going to be there in 2 or 
4 years, that's fine. But again, as I said, I'm an agnostic 
technologically. I want a hydrogen-based automobile. I want 
many things in life. I want nonfat strawberry shortcake, I want 
many things, okay, and I'm sure there are people trying to do 
it, but it's unlikely that--well, I'm not going to say it's 
impossible, but Mr. Graham, Dr. Runge, all I'm saying is that 
as long as your agreement gives us certitude and a deadline and 
that the public at a date certain knows that their family, when 
they buy a vehicle has all four wheels, whether it will be for 
some system or the other that will be given the proper warning 
to the driver that their family might be in danger, then we can 
live with that. It can't be something that's used by the 
industry to achieve a delay in installing the kinds of 
protection. So as you work together that would be my one 
message.
    Thank you.
    Mr. Stearns. Thank you, sir. I thank the gentleman, and Dr. 
Runge, I want to thank you for your participation; Dr. Graham, 
Mr. Mead. We have heard during this hearing some testimony 
which has us concerned, obviously, because this is not being as 
expedited as Members of Congress we thought it would be on a 
much quicker schedule.
    What I'm going to suggest, Dr. Runge, is that you--we get 
together periodically and you brief us where you are at and I'm 
suggesting perhaps if we see another delay, we see problems, to 
your benefit it may require us to have another hearing in the 
fall so that we can have a wrap up and see where we are and see 
whether it's materials, resources or something that we can 
provide or what we can do to help you, but you have an arduous 
task. We're here to support you and we appreciate all of your 
testimony and you indulged us while we took a vote and the 
committee is adjourned.
    [Whereupon, at 11:50 a.m., the subcommittee was adjourned.]
    [The reports of the OMB and the NHTSA follow:]

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