[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





        WHAT IS OMB'S RECORD IN SMALL BUSINESS PAPERWORK RELIEF?

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

                             JOINT HEARING

                               before the

                 SUBCOMMITTEE ON ENERGY POLICY, NATURAL
                    RESOURCES AND REGULATORY AFFAIRS

                                 of the

                     COMMITTEE ON GOVERNMENT REFORM

                                and the

                   SUBCOMMITTEE ON REGULATORY REFORM
                             AND OVERSIGHT

                                 of the

                      COMMITTEE ON SMALL BUSINESS

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 18, 2003

                               __________

                           Serial No. 108-82

                               __________

 Printed for the use of the Committees on Government Reform and Small 
                                Business


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform


                                 ______

90-867              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
____________________________________________________________________________
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma              C.A. ``DUTCH'' RUPPERSBERGER, 
NATHAN DEAL, Georgia                     Maryland
CANDICE S. MILLER, Michigan          ELEANOR HOLMES NORTON, District of 
TIM MURPHY, Pennsylvania                 Columbia
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN R. CARTER, Texas                            ------
WILLIAM J. JANKLOW, South Dakota     BERNARD SANDERS, Vermont 
MARSHA BLACKBURN, Tennessee              (Independent)

                       Peter Sirh, Staff Director
                 Melissa Wojciak, Deputy Staff Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
              Philip M. Schiliro, Minority Staff Director

Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs

                     DOUG OSE, California, Chairman
WILLIAM J. JANKLOW, South Dakota     JOHN F. TIERNEY, Massachusetts
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
JOHN M. McHUGH, New York             PAUL E. KANJORSKI, Pennsylvania
CHRIS CANNON, Utah                   DENNIS J. KUCINICH, Ohio
JOHN SULLIVAN, Oklahoma              CHRIS VAN HOLLEN, Maryland
NATHAN DEAL, Georgia                 JIM COOPER, Tennessee
CANDICE S. MILLER, Michigan

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                       Dan Skopec, Staff Director
                Barbara F. Kahlow, Deputy Staff Director
                Melanie Tory, Professional Staff Member
                     Krista Boyd, Minority Counsel
                      COMMITTEE ON SMALL BUSINESS

                 DONALD A. MANZULLO, Illinois, Chairman
ROSCOE BARTLETT, Maryland, Vice      NYDIA VELAZQUEZ, New York
    Chairman                         JUANITA MILLENDER-McDONALD,
SUE KELLY, New York                    California
STEVE CHABOT, Ohio                   TOM UDALL, New Mexico
PATRICK J. TOOMEY, Pennsylvania      FRANK BALLANCE, North Carolina
JIM DeMINT, South Carolina           DONNA CHRISTENSEN, Virgin Islands
SAM GRAVES, Missouri                 DANNY DAVIS, Illinois
EDWARD SCHROCK, Virginia             CHARLES GONZALEZ, Texas
TODD AKIN, Missouri                  GRACE NAPOLITANO, California
SHELLEY MOORE CAPITO, West Virginia  ANIBAL ACEVDEO-VILA, Puerto Rico
BILL SHUSTER, Pennsylvania           ED CASE, Haiwaii
MARILYN MUSGRAVE, Colorado           MADELEINE BORDALLO, Guam
TRENT FRANKS, Arizona                DENISE MAJETTE, Georgia
JIM GERLACH, Pennsylvania            JIM MARSHALL, Georgia
JEB BRADLEY, New Hampshire           MICHAEL RICHAUD, Maine
BOB BEAUPREZ, Colorado               LINDA SANCHEZ, California
CHRIS CHOCOLA, Indiana               ENI FALEOMAVAEGA, American Samoa
STEVE KING, Iowa                     BRAD MILLER, North Carolina
THADDEUS McCOTTER, Michigan
         J. Matthew Szymanski, Chief of Staff and Chief Counsel
                     Phil Eskeland, Policy Director
                  Michael Day, Minority Staff Director

            Subcommittee on Regulatory Reform and Oversight

                     ED SCHROCK, Virginia, Chairman
ROSCOE BARTLETT, Maryland            CHARLES GONZALEZ, Texas, Ranking 
SUE KELLY, New York                      Democrat
TRENT FRANKS, Arizona                DONNA CHRISTENSEN, Virgin Islands
JEB BRADLEY, New Hampshire           ENI FALEOMAVAEGA, American Samoa
STEVE KING, Iowa                     ANIBAL ACEVEDO-VILA, Puerto Rico
THADDEUS McCOTTER, Michigan          ED CASE, Haiwaii
                                     DENISE MAJETTE, Georgia
  Rosario Palmieri, Senior Professional Staff Member and Subcommittee 
                              Coordinator


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 18, 2003....................................     1
Statement of:
    Graham, Dr. John D., Administrator, Office of Information and 
      Regulatory Affairs, Office of Management and Budget........    37
    Kerrigan, Karen, chairman and founder, Small Business 
      Survival Committee; and Andrew M. Langer, manager, 
      regulatory policy, National Federation of Independent 
      Business...................................................    63
    Manzullo, Hon. Donald, a Representative in Congress from the 
      State of Illinois..........................................    20
Letters, statements, etc., submitted for the record by:
    Graham, Dr. John D., Administrator, Office of Information and 
      Regulatory Affairs, Office of Management and Budget, 
      prepared statement of......................................    40
    Kerrigan, Karen, chairman and founder, Small Business 
      Survival Committee, prepared statement of..................    66
    Langer, Andrew M., manager, regulatory policy, National 
      Federation of Independent Business, prepared statement of..    81
    Manzullo, Hon. Donald, a Representative in Congress from the 
      State of Illinois, prepared statement of...................    24
    Ose, Hon. Doug, a Representative in Congress from the State 
      of California:
        Information concerning single points of contact..........    62
        Prepared statement of....................................     4
        Report card..............................................   117
    Schrock, Hon. Edward L., a Representative in Congress from 
      the State of Virginia, prepared statement of...............    15
    Tierney, Hon. John F., a Representative in Congress from the 
      State of Massachusetts, prepared statement of..............    30
    Voinovich, Hon. George, a Senator in Congress from the State 
      of Ohio, prepared statement of.............................    18

 
        WHAT IS OMB'S RECORD IN SMALL BUSINESS PAPERWORK RELIEF?

                              ----------                              


                         FRIDAY, JULY 18, 2003

        House of Representatives, Subcommittee on Energy 
            Policy, Natural Resources and Regulatory 
            Affairs, Committee on Government Reform, joint 
            with the Subcommittee on Regulatory Reform and 
            Oversight, Committee on Small Business,
                                                    Washington, DC.
    The subcommittees met, pursuant to notice, at 10 a.m., in 
room 2154, Rayburn House Office Building, Hon. Doug Ose 
(chairman of the Subcommittee on Energy Policy, Natural 
Resources and Regulatory Affairs) presiding.
    Present from the Subcommittee on Energy Policy, Natural 
Resources and Regulatory Affairs: Representatives Ose, 
Sullivan, and Tierney.
    Present from the Subcommittee on Regulatory Reform and 
Oversight: Representatives Schrock, Kelly, Franks, and 
Gonzalez.
    Staff present: Dan Skopec, staff director; Barbara Kahlow, 
deputy staff director; Melanie Tory, Rosario Palmieri, and Tim 
Slattery, professional staff members; Yier Shi, press 
secretary; Krista Boyd, minority counsel; and Cecelia Morton, 
minority office manager.
    Mr. Ose. Good morning. Welcome to today's hearing of the 
Government Reform Subcommittee on Energy Policy, Natural 
Resources and Regulatory Affairs, and actually it is a joint 
hearing between our subcommittee and the Small Business 
Subcommittee on Regulatory Reform and Oversight. I am pleased 
to welcome my colleague Ed Schrock of Virginia, who is the 
chairman of the Small Business Subcommittee on Regulatory 
Reform and Oversight for today's hearing.
    Today, the subcommittees, represented by Congressman 
Schrock, me, and the others who will join us, will examine the 
track record of the Office of Management and Budget over the 
past 2\1/2\ years in paperwork reduction to benefit small 
businesses. Since many small businesses are not connected to 
the Internet, the hearing focus will be on the accomplishments, 
not including either electronic filing opportunities or other 
e-government initiatives.
    OMB estimates the Federal paperwork burden on the public at 
8.2 billion hours. The IRS accounts for over 80 percent of that 
total. In April 2003, OMB estimated that the price tag for all 
paperwork imposed on the public is $320 billion a year. $320 
billion a year. This is a huge burden especially on small 
businesses.
    In 1980, Congress passed the Paperwork Reduction Act and 
established an Office of Information and Regulatory Affairs. We 
are going to refer to that as OIRA from now on within OMB. 
OIRA's principal responsibility is paperwork reduction. In 
1995, 1998, 2000 and 2002, Congress enacted additional 
legislation with the objective of decreasing paperwork burden. 
Also, last July, Congress directed OMB to identify and review 
proposed and existing IRS paperwork. Nonetheless, paperwork has 
increased in each of the last 7 years, with the largest 
increases in the last 2 years. And, OMB continues to devote 
less than one full-time equivalent staff position to IRS 
paperwork reduction.
    In its 2003 draft annual regulatory accounting report, OMB 
did not present an analysis of impacts on small business, as 
required by law. And, its final 2002 annual regulatory 
accounting report included a less than one page analysis of 
impacts on small business. In addition, in May 2003, OMB only 
identified e-government initiatives to reduce burden on small 
businesses; that is, instead of identifying any paperwork 
reduction initiatives to reduce frequency of small business 
reporting, introduce thresholds below which reporting is not 
required, use sampling versus universe reporting, create short 
forms for small businesses, etc.
    The Small Business Paperwork Relief Act of 2002, which is 
Public Law 107-198, required OMB to take certain actions by 
June 28, 2003, including publishing the first annual list of 
all compliance assistance resources available to small 
businesses, having each agency establish one point of contact 
to act as a liaison between small businesses and the agency 
regarding paperwork requirements, and report to Congress on the 
findings of an interagency task force chaired by OMB.
    On May 9, 2003, OMB published its draft task force report. 
On May 21st, four chairmen, Senate subcommittee chairman, 
Senator George Voinovich, House chairman, Congressman Donald 
Manzullo, House subcommittee chairman, Congressman Ed Schrock, 
and I submitted a joint comment letter to OMB. It criticized 
OMB's draft, including its initial faulty assumption that 
existing paperwork is both minimal and necessary and its 
unacceptable conclusion that OMB could not organize a listing 
of paperwork applicable to small business that would fully meet 
small business needs.
    On June 27th, OMB published two documents. Both were 
unsatisfactory. The first was an incomplete listing of 
compliance assistance resources and contact information for 
agency single points of contact, and I would refer you to that 
chart there leaning against the wall, the long vertical one. 
The second notice was a notice of availability of its final 
task report. The task report was largely nonresponsive to 
congressional intent.
    The bottom line is that OMB has not fully complied with 
this new law. And, OMB's track record in small business 
paperwork reduction to date has been dismal. As a former owner 
of various small businesses, I am disappointed to say the 
least. I do not understand how OMB could pick and choose which 
laws to fully implement. Congress wants and America's small 
businesses deserve results, fewer hours spent on government 
paperwork and lower compliance costs to increase productivity 
and job creation.
    Now, I am pleased, as I said, to welcome my good friend 
from Virginia, Mr. Schrock, and I would yield the floor to him.
    [The prepared statement of Hon. Doug Ose follows:]

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    Mr. Schrock. Thank you very much, Mr. Chairman, and good 
morning to all of you. I want to start by saying how pleased I 
am to be co-chairing this hearing this morning with my good 
friend from California, Doug Ose. Doug is a small businessman 
himself, has long been a champion of these issues for a very 
long time, and it is a pleasure to be sitting up here with him 
today addressing these issues.
    Our hearing today addresses the Office of Management and 
Budget's final task force report on the Small Business 
Paperwork Relief Act. You will hear from many of our witnesses 
today about their disappointment at a missed opportunity. We 
think that this task force had the potential to make some great 
strides in eliminating unnecessary paperwork burdens for small 
businesses. Instead, the task force decided that initiatives, 
such as the Small Business Administration's Business Compliance 
One-Stop, were enough already. They just need to make a few 
changes to satisfy the letter of the law, no matter that we are 
5 years or more away from it being a comprehensive tool.
    Federal agency paperwork continues to increase Congress and 
the executive branch can share in the blame. No question about 
that. But, it doesn't excuse us from making every effort 
possible to reduce the burden to small businesses. I hope that 
everyone recognizes what a great drain on the creative 
resources of our entrepreneurs this burden has become, all 
those hours and all that money spent on doing things that have 
nothing to do with creating jobs or making a better life for 
that citizen and his or her family. What a great waste of our 
natural resources.
    One recent example of unnecessary paperwork burden comes 
from the Environmental Protection Agency. EPA's TRI lead rule 
now requires thousands of small businesses to spend time and 
money filling out paperwork only to tell the EPA they have zero 
releases. EPA's compliance cost estimates for this rule was 
$7,000 per business. Understand that, $7,000 per business. In 
this reporting year, over 3,000 businesses reported nothing. 
Small businesses pay $21 million--that may not be real money to 
some people, but to small businesses that's real money--to 
comply with the rule that provided no information and no public 
health benefit.
    It is very disheartening to see our citizens subjected to 
this kind of regulatory buffoonery. Small businesses continue 
to be the leader in restoring our country to better economic 
growth. In economic times like these I hope that we will make 
sure that small businesses face the minimum burden necessary to 
accomplish worthy governmental goals.
    As I have said many times and I say every place I go when I 
am talking about business, government creates nothing, 
absolutely nothing. They just get in the way of those people 
who try to create business, and we need to get off their backs. 
Small business is clearly the backbone of this country. There 
is no question about that. Every time we create a new 
regulation we make it more and more difficult for them.
    My question is why all the paperwork? Why all the 
paperwork? To justify the existence of agencies downtown? 
Maybe. But, if that's the case, we need to put a stop to it 
because, if we don't, we are going to ruin businesses in this 
country forever and we will never get them back to where they 
were before.
    So, Mr. Chairman, I am delighted to be here and, believe 
me, I look forward to the testimony of every person here today. 
Thank you.
    [The prepared statement of Hon. Edward L. Schrock follows:]

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    Mr. Ose. I thank the gentleman. We are also joined by the 
ranking member of the Small Business Subcommittee, Mr. 
Gonzalez, who I am pleased to recognize for an opening 
statement.
    Mr. Gonzalez. Thank you very much, Mr. Chairman, and I will 
be real brief and I guess just start with a general observation 
in what we always seek and seem not to ever accomplish. But, I 
am one that believes in regulation as long as it's reasonable 
because it does serve a public purpose. It is about integrity. 
It's about leveling the playing field. Governmental regulation 
is about accountability and responsibility and duty. The 
problem is when it becomes burdensome and inefficient. But, we 
don't do away with regulation, reasonable regulation. And, I 
think we all can agree on that, whether you're Republican or a 
Democrat. So, we seek solutions on doing away with that which 
is not necessary and being efficient with that which is 
necessary.
    Unfortunately, I don't think we have ever accomplished 
that. This is only my 5th year in Congress and I guess we could 
do this just about every other year. Hopefully, we will make 
some real progress. My sense of it will always be there is no 
consequence to an agency or a department or any mandate that is 
charged with the responsibility of executing the desires of 
Congress. It's simply not done. We'll have a hearing. We'll 
hear about the efforts and how they fall short and nothing 
happens. I am hoping that will change and I do believe there 
should be consequences, and with that I look forward to the 
testimony and again thank you, Mr. Chairman.
    Mr. Ose. I thank the gentleman. I'd also like to welcome 
the gentleman from Oklahoma, Mr. Sullivan. I understand he does 
not have an opening statement and any time you want to come to 
this committee without an opening statement you are always 
definitely welcome. All right. We had scheduled here the 
appearance of Senator Voinovich, who has been called away. He 
has submitted testimony in writing and we are going to submit 
that testimony for the record. Without objection, so ordered.
    [The prepared statement of Hon. George Voinovich follows:]

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    Mr. Ose. We have three panels here. Our first panel is 
going to be with Congressman Manzullo, the chairman of the 
Small Business Committee. Our next panel will be Dr. Graham, 
and our third panel will be Ms. Kerrigan and Mr. Langer.
    So, Mr. Chairman, this is your show. We are most grateful 
for your attendance. We'll give you a moment to collect your 
thoughts.

STATEMENT OF HON. DONALD MANZULLO, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ILLINOIS

    Mr. Manzullo. Well, thank you very much.
    Mr. Ose. I want to welcome the chairman of the Small 
Business Committee.
    Mr. Manzullo. Thank you. Before I begin my testimony, we 
have a distinguished visitor here from the European Parliament, 
from the Birmingham area of England, Malcolm Hargrove. Malcolm, 
do you want to stand up? Malcolm is involved with the Small 
Business Committee in England and, rather, with the European 
Parliament, and I think we should all give him a big American 
welcome for visiting us. Obviously he was thrilled by the 
speech yesterday by the Prime Minister.
    Chairman Ose and Chairman Schrock, I want to thank you for 
holding this hearing today. A full 13 months ago President 
George Bush signed the Small Business Paperwork Relief Act of 
2002. This legislation was supposed to be the starting point to 
make communication between small businesses and agencies 
easier. It was also supposed to be the start of a new kind of 
dialog between Federal agencies. It was supposed to be the 
moment where individual agencies began to understand that they 
are not alone in creating paperwork requirements for small 
businesses.
    It reminds me of my children's complaints about teachers 
and homework. Each teacher is in his or her own world when it 
comes to assigning students homework and deadlines. And, so, 
unless those teachers talk to each other, they may never 
realize how their one small project is just one-fifth or one-
sixth of all the work that's been assigned to that student. In 
the case of government, agencies don't realize that their 
individual requirements are often one-twentieth of the total 
burden that the government places on small businesses.
    I fear that the momentum we tried to create with the Small 
Business Paperwork Relief Act has passed us by. Chairman Ose 
made note of the fact that even something as simple as 
producing a list of compliance assistance resources and single 
points of contact for agencies was produced haphazardly and 
without much attention to detail. It is my hope that the Office 
of Management and Budget would take this task more seriously. I 
think most people would be shocked that it actually took a law 
to get the government to produce this unified list.
    Previously a small business would have to make telephone 
calls to each agency, speak with local Small Business 
Administration representatives for help, speak with their 
Congressman's office or just wait for an agency to contact them 
for noncompliance.
    The National Federation of Independent Business regularly 
reports on their surveys that many small businesses just bump 
into regulations and paperwork requirements in the course of 
doing business or they find out when an agency attempts to find 
them. My hope is that this list of resources for small 
businesses will be approved and distributed widely. Another 
problem with the report is its overreliance on e-government 
solutions to this problem. I'm a fan of e-government and its 
possibilities. It can produce significant cost savings for both 
government and the private sector. But its use as the primary 
weapon against unnecessary burdens on small business is short-
sighted. I want to cite a few examples of what I mean.
    The EPA proposed a rule on electronic reporting 2 years 
ago. This supposed e-government innovation was to finally allow 
businesses to submit forms electronically to the EPA. However, 
they couldn't make it simple. They attached the recordkeeping 
requirement for any document produced on the computer that 
would require every facility to retrofit its systems to 
accommodate these regulations. Thousands of facilities, 
including many small manufacturers which are dealing with the 
toughest economic circumstances already, would have had to pay 
$40,000 up front to make this work and another $17,000 per year 
to maintain it. The other choice of course was to get rid of 
all the computers so they wouldn't have to comply with the so-
called voluntary rule. Thanks to the many businesses who fought 
this along with the SBA's Office of Advocacy, American 
manufacturers were spared $18 billion in additional costs last 
year.
    Another recent example comes from the Department of 
Transportation. In the wake of the Firestone-Bridgestone tire 
catastrophe, DOT created an early warning report regulation. In 
its attempt to make reporting easier, the agency decided to 
require that all of these reports be filed electronically. As 
is often the case, regulators missed an important detail and 
that is that they included 2000 small manufacturers of trailers 
under 26,000 pounds. According to SBA's size standards, 96 
percent of these are small businesses. DOT produced estimates 
of the cost of gearing up to comply with this rule at $230,000 
per company. No wonder companies go to China. That figure right 
there will put most of those manufacturers out of business.
    These are just a couple of the brilliant and innovative e-
government initiatives to reduce the paperwork burden. This 
task force is unable to break from the mindset that many in 
government have, which is risk averse, without creativity, and 
without true sensitivity to the plight of small businesses 
across the country.
    Finally, in our work with Chairman Ose on this bill last 
year, we stressed several points in our colloquy: One, that it 
was expected that OMB would provide not only a list of 
compliance assistance resources but also links to those 
agencies and their sections on paperwork. It was expected that 
this task force would seriously consider reducing the frequency 
of paperwork reporting or aligning deadlines of different 
paperwork requirements and three, that OMB and the task force 
would do more than just consider using NAICS or other 
industrial codes to help small business determine what 
paperwork requirements they had to comply with. I am 
disappointed that each of these items was only given a cursory 
reference and summarily dismissed as not practical for OMB 
implementation.
    A small business which wants nothing more than to fully 
comply with rules and regulations has no way to sift through 
every regulatory and paperwork requirement to figure out which 
ones apply. It should be the responsibility of each agency to 
provide small business with that information and to do it in a 
way that is simple. The added benefit of using NAICS codes is 
that we could truly begin to determine the compliance burden 
for individual industry sectors.
    Let me give you an example of what happened to my brother. 
Frank runs the family restaurant, 13 tables, 13 bar stools. The 
restaurant is open just on weekends. About 6 years ago, when 
the bar was full on a Friday evening and he was selling his 
catfish and lasagna and under the unpretentious name of 
Manzullo's Famous Foods, in walked a government man and in the 
midst of this crowded barroom of perhaps 15 to 20 people, he 
spoke to my brother over the bar and he said where is your sign 
that says pregnant women should not drink? My brother looked at 
him and said who the hell are you? And, there he was. He was 
some Federal liquor license inspector showing up. My brother 
said what are you talking about? Don't you know you have to 
have a sign posted that says pregnant women can be injured if 
they drink alcohol?
    Now, my brother has a high school education, did time in 
the service, got involved with the family restaurant when he 
was 20 years old. He's 60 years old now. Spent an entire 
lifetime in that restaurant. He worked 6 to 7 days a week, 18 
to 20 hours a week trying to put out a good product and comply 
with all the laws. Why didn't this guy come in and say, Frank, 
there's a law? Here, let me give you a sign. You know what he 
did? He fined him $50. And, for years you can go in my 
brother's restaurant and he had a handmade sign, scribbled with 
a black pen that was an attestation to the stupidity of the 
Federal Government in the manner in which it treats small 
businesses, and it said if you're pregnant, don't drink. 
Finally, somebody got him a regular sign and so he put the sign 
on the bar on one of the walls of the barroom. The problem is 
that only the people on the left side of the bar can see the 
sign and those on the right side can't. So, I imagine that 
guy's going to come back and say you should have a sign that 
says pregnant women sit on the left side so you can see the 
sign, and, if you are not pregnant, you can sit on the right 
side.
    But, this is just a very homely indication of the 
tremendous pressures that people like Frank Manzullo, Jr., are 
under. And, that's my brother. I have tremendous respect for 
him. He's one little guy among hundreds of thousands of 
millions of entrepreneurs in this country lost in a sea of 
regulation. And, some clown comes up with a regulation and says 
you have to comply by e-mail. My brother just went up on the 
computer. I don't even know if he knows how to access these 
Federal agencies. Why not have one source--why not have the 
government say look, appoint one person such as a personal 
banker when you go to a larger bank, one person within the 
Federal Government that can be the access point for the Frank 
Manzullo, Jr.'s out there across the country. That would be too 
simple. The agencies would have to work together. So maybe what 
we should do is this. Maybe we should sunset every law and 
every regulation and say, unless by such and such a time there 
is a workable framework that the little guys in America can 
follow, we are just going to nullify all of these laws. Look at 
this. Use this. OMB. Listing of single points of contact for 
agencies with approved paperwork. Look at this. Must be 50 on 
there.
    Mr. Schrock. Actually 71.
    Mr. Manzullo. 71 agencies on here. Which is the one that 
perforates the paper? I mean, this is absolutely outrageous. 
And, then you wonder why are small businesses crumbling? Why do 
small manufacturers go to China? Do you know why? Do you know 
why we lose--one of the reasons we lose 54,000 manufacturing 
jobs each year? These guys just give up. We had a neighbor up 
the street, Wendell Smith, was making counter tops. Some guy 
from OSHA came in and said, oh, your employees can't sit on 
that makeshift balcony that you have to have their lunch unless 
you put an elevator in. And, it's one thing after the other. 
This long parade of Federal officials that come in and all 
these regulatory agencies.
    Look at this. What type of service are they doing to 
America's small businesses? That concludes my testimony.
    [The prepared statement of Mr. Manzullo follows:]

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    Mr. Schrock [presiding]. Thank you, Mr. Chairman. I have 
shared with you some of the stories I have experienced with 
constituents of mine and they are very similar to what your 
brother Frank is going through, and it's pretty bad.
    Mr. Tierney from Massachusetts was here. And I welcome him 
and he does have a statement that he's going to put in the 
record. And, I want to welcome Congresswoman Sue Kelly from New 
York, who has joined us as well.
    [The prepared statement of Hon. John F. Tierney follows:]

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    Mr. Schrock. Mr. Chairman, since OMB has clearly failed to 
publish a complete list of agency single points of contact, 
which is that list you have there, do you believe they should 
be asked promptly to produce such a list that you are going to 
be able to get through so you don't get an answering machine? I 
called a couple of those numbers yesterday and got nothing but 
answering machines.
    Mr. Manzullo. You know, Dr. Graham has done a phenomenal 
job at OIRA. I mean, this man, he has great credentials for 
that position. He dislikes government, which is wonderful 
because he understands the fact that the attitude is that 
Members of Congress are here to serve the individuals that we 
represent, and the purpose of government is also to complement 
that. But, perhaps, OMB has been given a task that it can't 
complete. Perhaps, there are so many agencies and there's so 
much work that for the single point of contact that it's a task 
that can't be completed, because I know a lot of people at OMB. 
I know they work very hard over there. Maybe it's just 
something that they can't do.
    And, then what do you do with this? Post this on the wall 
of a bar? You know, if you slip, you know, go to this one here. 
If you drink too much, go to this one here. If you get hit by a 
car outside the restaurant, go to this agency. You know, if you 
ingest this chemical, go to this one.
    I know it's an attempt and we are trying to do all types of 
stuff, but, maybe it is an assignment that they working as hard 
and diligent as they can and in good faith simply cannot 
accomplish.
    Mr. Schrock. But why?
    Mr. Manzullo. There's too much government. I mean, surely 
can't there be some way that the Frank Manzullos of this world 
can just pick up a phone and access one government agency that 
coordinates all of these things and tell him what's expected of 
him?
    Mr. Schrock. That would sound pretty reasonable. What kind 
of training would you recommend that OMB promptly provide to 
all agency single points of contact? And, do you think the 
small businesses or their representatives and their 
associations should assist in that training?
    Mr. Manzullo. I don't know, Congressman Schrock. I mean, 
there is such a chasm between small businesses today and the 
government. You know, if you're a large corporation you have a 
government compliance officer. And, sure it is a pain in the 
neck. But, at least they have one person totally dedicated to 
that who understands that and that's why the cost per employee 
of regulation for small business is extraordinarily high 
compared to that of the larger businesses.
    But, I don't know if this is a problem that can be solved 
unless we take a look at why we have all these regulations. 
Now, I mean there are lot of regulations that are good. Frank, 
for example, appreciates the Winnebago County Department of 
Health that puts on a school from time to time to teach safety 
in the kitchen and the different things that you can do. It is 
a 4-hour school. It's preventive. It teaches them what to do on 
it.
    I don't know if there is a solution to this. I don't know 
what training OMB or any other agency can do. And, besides 
that, when you are working in the kitchen for 16, 18 hours a 
day, when you are working in the shop, trying to keep that 
going, when you are under ferocious competition just to keep 
your doors open, do you have time to attend seminars on 
regulatory compliance, 72 of them?
    Mr. Schrock. Mr. Gonzalez.
    Mr. Gonzalez. Thank you very much. First of all, I don't 
believe that anyone leaves our domestic shores because of the 
regulatory burden. I think that's a contributing factor, but I 
think they go to China because you can hire somebody there at 
12 years of age, work them for 80 hours, pay them $2 an hour, 
don't provide any benefits, and you don't have to worry about 
safety or health standards or any kind of benefits. That's a 
whole separate problem, Mr. Chairman.
    But, I do agree with you in principle and in essence. You 
are saying let's look at the regulatory scheme and do away with 
that which is not necessary. And, we attempt to do that 
accordingly, I think, and I always talk about that. We are here 
today to figure out, OK, well, what do we do with what we have 
in place. And, we are looking at a central point of contact, a 
clearinghouse. Surely there is something we can do to improve 
on the system as we go through there and try to cull the 
regulatory scheme and what is truly necessary to accomplish the 
legitimate governmental role which is just burdensome, 
inefficient and overkill. And, I think we are of like mind on 
that. My fear of course is that we always look at it and say, 
well, let's just do away with all regulation, and then we get 
into the philosophical and the partisan end of it.
    Mr. Manzullo. It's a safety issue.
    Mr. Gonzalez. Right. It has very legitimate reasons. But, 
where do we start?
    Mr. Manzullo. Well, let me give you one example. The 
National Restaurant Association--Frank doesn't belong to that, 
perhaps he should--has a Web site and if you key into that, it 
has a good core set of regulations that you're supposed to 
follow. And, first, as to any small business and then as to the 
restaurant business in particular, and the manual is quite 
thick and the National Restaurant Association has done a very 
commendable job on trying to have a one-stop shop for their 
members. I mean, that is one way to look at it.
    But the problem that we have is when the regulators issue 
these regulations without reference to other regulations in 
place. I mean, there are situations in this country today where 
companies are caught with conflicting regulations. You know, 
one was just issued this past week on raising the level of 
water. I can't remember in which river, but one agency said you 
have to do this and then another agency said you can't do that. 
And then the court got involved and these people just had no 
idea what to do. I think what we have to do is perhaps take a 
look and say as to every regulation, we need to have strict 
enforcement of the Regulatory Flexibility Act and SBREFA. I 
think we need a few good lawsuits. I think we need to empower--
and I have said this for years. We need to empower the Office 
of Advocacy within the SBA to bring class action lawsuits 
against government agencies, because the little guys out there 
can't afford to do it. And, you know, here's a conservative 
Republican talking about bringing lawsuits, but sometimes 
that's the only way in order to do something.
    We've got a situation going on now with HUD. They came out 
with these massive RESPA requirements--you're on that 
committee--and it is a $9 billion hit to small businesses. 
Their Regulatory Flexibility Act analysis was about 160 pages, 
absolutely totally inefficient. It just did not list all the 
problems.
    I mean there has to be a way to hold those agencies 
accountable to follow the laws over which our two committees 
have exclusive jurisdiction. And, maybe we should find a way to 
penalize HUD for doing that. You know, but I like the idea of 
empowering Tom Sullivan, who is a real tiger at Office of 
Advocacy, to begin a lawsuit on behalf of small businesses. 
Perhaps, you know, that would do something.
    Mr. Gonzalez. Well, again I think we all know the buck 
really does stop at the committees and, unfortunately, we 
really don't do anything. We definitely empower individuals and 
mandate certain agencies and departments to comply with what 
the intent of our laws are, but they are not doing it and there 
is no consequence. And, I don't know if it is a lawsuit--and I 
am a lawyer by training and such, and I still don't encourage 
litigation. But, I think we need to really start being more 
aggressive about it and we haven't been. The 5 years I have 
been here I think we just talked a heck of a good game. But, we 
don't do anything and I think the agencies and the departments 
know us well and they're going to wear us out and they're going 
to wait us out and it seems to me that the bureaucracy 
continues to win the battle.
    Mr. Manzullo. I think one of the things that may help is to 
give the committees the jurisdiction, the authority to stop the 
enforcement of regulations. I know there is a Constitutional 
problem in there, but surely this body that oversees the 
organic law that looks at the regulations, that passes the 
Regulatory Flexibility Act and SBREFA for its enforcement in 
courts, maybe we should bring before the committee on a 
periodic basis every time a regulation comes out. You know, 
sometimes just exposing people to the light to say you're not 
doing your job has a therapeutic effect. But that's not a long-
term solution.
    Mr. Schrock. Mr. Chairman, I wonder too, when they create 
these regulations do the folks downtown go to middle America 
somewhere, Rockford, IL for instance, and ask the business 
person whose going to be impacted by that proposed regulation 
what's going to be the impact on you? Because, I think, if they 
did they'd either kill the regulation or word it in such a way 
where it isn't going to have an unintended consequence or 
impact on people. I think that's a real problem and I don't 
know how----
    Mr. Manzullo. The problem starts with us. We passed organic 
laws and the people who do the regulations really are just 
doing their job.
    Mr. Schrock. I will tell you I think my friend Mr. Gonzalez 
is absolutely correct. We do all these wonderful things. We put 
this Paperwork Reduction Act into law and then we go off and do 
a million other things. Are we watching what's going on? No. 
But I think we are going to have to start doing that or this 
situation is going to get worse and worse and worse. Mrs. 
Kelly, who herself is a small businesswoman, a florist as I 
recall----
    Mr. Manzullo. A florist. She knows about this stuff.
    Mrs. Kelly. Not just a florist. I've had three small 
businesses. Thank you very much.
    Mr. Manzullo, one of the problems that I think we are 
experiencing here with this very long list, which I can imagine 
every business wants to post in a prominent spot, since there 
is so much information on it--I'm saying that facetiously. It 
seems to me that one of our problems is that the agencies of 
government are promulgating a great many rules and regulations 
that are not clearly disseminated to the people that they are 
passing these rules and regulations to and about. Is that true?
    Mr. Manzullo. I would say so. I mean, you know, as a 
florist I'm sure you didn't get up in the morning, have your 
cup of coffee and read the Federal Register. And yet----
    Ms. Kelly. Well, actually it's the kind of thing I imagine 
every florist in this Nation probably reads as bedtime reading. 
It is a good snore. I think that in all honesty, it's not just 
florists. It is every small business person in the United 
States of America. It is my husband, who is a small 
businessman. It is my son, who is a small businessman. It is 
one after another of people just like my family, me, my 
husband, my children, we are all small business entrepreneurs. 
We drive 80 percent of the U.S. economy and, yet, we are 
dragged down by experiencing about--from what I understand, I 
was just reading here somewhere it's something like 50 percent 
of the regulations come up from these agencies and hit us. We 
need obviously good points of contact, but we also need more 
information. Wouldn't you agree?
    Mr. Manzullo. We do. I just got paged. I've got an 
amendment on the floor. I agree entirely, Congresswoman Kelly. 
You know, I have stayed at your home there with your husband 
and your boys and know that the construction business and all 
the small businesses in which you're involved and you know 
what's going on, and you are as frustrated as everybody else 
and you do a great job on trying to cut through with these 
things. And, you know, maybe we need--I don't want to call a 
summit. Once in a while we have the White House Conference on 
Small Business, but somebody's got to do something to say small 
businesses can only do so much.
    Mrs. Kelly. Mr. Manzullo, do you know of any place besides 
this committee or your own committee where someone is looking 
at the vast rules and regulations that are being disseminated? 
From what I understand it's about 4,000 every year or two. Do 
you know of any place where someone is looking at the vast body 
of these for any kind of a cost-benefit analysis or redundancy 
or overlap?
    Mr. Manzullo. No, I don't, aside from the Office of 
Advocacy, which has, you know, an in-house law firm, and our 
oversight committees. And, of course the oversight committees, 
we have a hearing when somebody expresses to us that there's a 
problem. So, by the time we get involved, oftentimes it's too 
late to help out the individual.
    I do have to run to the floor for an amendment, and thank 
you so much. Appreciate it. Thanks for the opportunity to be 
here.
    Mr. Ose [presiding]. Thank you, Mr. Chairman. Ms. Kelly, do 
you wish to add anything else?
    Mrs. Kelly. I only want to say, Mr. Chairman, that several 
years ago a bill that I wrote called the Truth in Regulating 
Act was passed by this Congress. It was signed into law by 
President Clinton. Unfortunately, I was unable to get the small 
amount of money that was needed to establish what that bill 
required, which was an office in the General Accounting Office 
that would examine all of the agency's rules and regulations as 
they affected small business and it would look at them for a 
cost-benefit analysis and redundancy and overlap and would 
allow the GAO to come back with a report to Congress on these 
rules and regulations. Any requested rule and regulation we 
would be able to request that information for. It would give us 
a chance to affect what the rules and regulations that are 
affecting small businesses. We would have a chance to do 
something about that before they hit small business and be able 
to perhaps have an economic, a strong economic impact on this 
enormous body of regulation that is hitting our small 
businesses. I was unable to get the funding for it. Perhaps 
with our combined committees working together, we could 
reestablish that as law since it is now sunset, and I am going 
to have that law written again. I am going to drop it and I 
hope perhaps you all will help me sponsor that bill and help me 
get the money so we can get that office there. Small 
businesses, small business people really need the help.
    I yield back.
    Mr. Ose. I appreciate the gentlelady's observations. On 
Tuesday of next week we will be having a hearing on H.R. 2432, 
which would make that particular office a permanent part of the 
GAO. It is a bipartisan bill. Again the number is 2432 and the 
hearing is on Tuesday.
    Mrs. Kelly. If the gentleman will yield.
    Mr. Ose. Certainly.
    Mrs. Kelly. It would be wonderful to have a permanent 
office, but we have to fund it. We can't do it without the 
funding. And so, I'm hopeful that if we establish--I'll be glad 
to work with you on this because I want that to be a permanent 
office. Small business people need this. But, we also need the 
funding to make sure that the GAO has the funding available to 
set this office up. Several years ago when we looked at it, it 
was a $5 million bill. And, that in terms of our entire budget 
for the U.S. Government is a small bit to drop into the pockets 
of helping our small businesses of this Nation. So, if we can 
get that money allocated to make this office permanent, I would 
be delighted to work with you and I hope that perhaps you will 
let me sit in on that hearing.
    Mr. Ose. You're always welcome, Mrs. Kelly. You know that.
    Mrs. Kelly. Thank you.
    Mr. Ose. I'd also like to recognize the gentleman from 
Arizona, Mr. Franks. If he wishes to make an opening statement 
he'd certainly be welcome to.
    Mr. Franks. Well, Mr. Chairman, freshmen always do that. 
Mr. Chairman, I just want to suggest that this committee is 
well placed in doing what it can to reduce the regulation on 
business, and to not only help that reduction but also help in 
the compliance. You know I have been privileged to work in 
different countries of the world, and sometimes, depending on 
the scheme of the regulation itself, it is not always just the 
litany and the rules, but it is the cooperation of the 
bureaucracies that enforce those rules, I hope that this 
committee can continue to do what it can to improve the 
productivity of small business. Certainly, all of us understand 
the vital needs to do that, and I thank the chairman.
    Mr. Ose. I thank the gentleman. OK. Chairman Manzullo has 
departed and Senator Voinovich was not able to join us today 
for other reasons. So panel one is finished. I would now like 
to invite to the witness table Dr. John Graham, who is the 
administrator of the Office of Information and Regulatory 
Affairs with the Office of Management and Budget. Dr. Graham, 
as you know, this committee has a practice of swearing in every 
single witness, so if you'd rise.
    [Witness sworn.]
    Mr. Ose. Let the record show the witness answered in the 
affirmative. Dr. Graham joins us for what seems to be a regular 
series of hearings. He is, as I said the Administrator for the 
Office of Information and Regulatory Affairs at the Office of 
Management and Budget. We refer to that as OIRA at OMB. Dr. 
Graham, welcome. Please proceed.

   STATEMENT OF DR. JOHN D. GRAHAM, ADMINISTRATOR, OFFICE OF 
 INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND 
                             BUDGET

    Dr. Graham. Thank you very much, Chairman Ose, and other 
members of the committees. A special thanks also to Chairman 
Schrock for cochairing and expressing a strong interest in 
these issues of small business and regulation. Let me start by 
saying that we at OMB and in the Bush administration generally 
are open to your suggestions from this committee on how to do 
our job better to reduce the burden of regulation and paperwork 
on the small business community. We at OMB do not profess to 
have all of the answers to this question and indeed the modest 
report that we have produced under this task force is just 
that, a modest effort to try to move the ball in the right 
direction.
    Let me start with a few general observations about how we 
think we can make progress in this area. The good news is we 
have a goal that I think is widely shared and bipartisan in 
nature--that is to reduce the needless paperwork burdens on 
small businesses. So, if the goal is so consensual, what are 
the possible strategies to achieve it? The first possible 
strategy is to pursue the electronic government strategy. This 
is a key element of the President's' management agenda on the 
theory that, for the majority of small businesses that do use 
electronic technology and are involved in the Internet, the 
eletronic government strategy will help them better access and 
understand the requirements they face and will reduce the 
burdens on them to comply. So, clearly there is an important 
part of the small business community for which we should invest 
energies to move the agenda of electronic government.
    It has, of course, a very serious limitation, this 
strategy, and that is that some small businesses are not 
currently active in the electronic world. Moreover, just moving 
on technology by itself doesn't necessarily reduce the total 
number of requirements out there that businesses face. And, a 
cynic might argue it just makes it easier for the government to 
create more requirements because now they can do it more 
efficiently and electronically. So, it's not a complete answer 
by itself. But it is one part of a portfolio of strategies.
    Second of all, there is regulatory reform, which is also a 
possible strategy for dealing with this problem. I think few 
people realize how many of those paperwork burdens are directly 
tied to specific Federal regulation. At the Office of 
Information and Regulatory Affairs, we are not specialists in 
small business. We rely heavily on our partner, particularly 
Tom Sullivan at the Office of Advocacy in the Small Business 
Administration, to identify for us what are those key 
regulations, whether new ones being developed or existing ones 
that impose a substantial burden on small business and are 
questionable in their necessity. We rely on SBA Advocacy to be 
our expert in this area. We would believe better regulations, 
smarter regulations can increase effectiveness and reduce 
compliance costs and paperwork burdens simultaneously.
    This strategy, regulatory reform, also has limitations. To 
change regulations that already exist is complex, it's time 
consuming and it's controversial. You know in this 
administration we have not been reluctant to face controversy 
on regulatory matters. But, that controversy slows the process 
down and makes it longer until we can get to a point where we 
can remove some of these unnecessary burdens.
    A third strategy is to try to slash these paperwork burdens 
directly by using the discretion that the agencies have for how 
much burden they include in a questionnaire without necessarily 
changing the regulation itself. This is the model and vision of 
the Paperwork Reduction Act, where agencies slash away the 
unnecessary paperwork requirements but maintain those 
requirements that are necessary for government to function. 
This involves line-by-line review of each information 
collection to identify question 4, question 12, knock this one 
out, knock that one out. It is a promising strategy and it can 
work in some circumstances.
    But, this third strategy has some important limitations. 
Most paperwork burdens in fact are mandated either by statute, 
by the Congress, or they are embedded in regulation. So in 
order to get rid of question 14, an agency may in some cases 
have to go back and change the regulation. So, it feeds back to 
the need for regulatory reform.
    To give you a sense of how the small business community 
feels the priorities are in this area, consider the President's 
request to the small business community through our office for 
nominating regulations, guidance documents, and paperwork 
requirements for reform. We received over 1,700 comments and 
300 nominations. They were almost all in the areas of rules and 
guidance documents. The few paperwork burdens that were 
mentioned were paperwork burdens that were required by 
regulation.
    The final strategy is statutory reform. Simplify the Tax 
Code, exempt small businesses from certain laws that are 
unnecessary for being applied to them, and so forth. I do not 
need to explain to this committee the difficulty in passing new 
legislation.
    So, in conclusion, we have four strategies. The task force 
report before you, issued by me and my colleague Mark Forman, 
makes a modest and constructive step forward in the area of 
Internet technology as a vehicle for providing businesses one 
place to go to get answers. It will take time and money to 
implement this solution, and I look forward to the questions 
that you may have.
    Thank you very much.
    [The prepared statement of Dr. Graham follows:]

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    Mr. Ose. Thank you, Dr. Graham. Before I start my 
questions, let me just preface my remarks. This committee 
typically goes through witness testimony and then Member 
questions, and I presume that's the way, Mr. Schrock, you run 
your committee. Everybody is allocated 5 minutes. The manner in 
which we are going to go today is I will start and then Mr. 
Schrock and then Mr. Gonzalez and then we'll come back over to 
this side for questions. Each person will get 5 minutes. If 
people want a second round, we'll go another round of 5 
minutes. The record will be left open for 10 days for folks to 
submit questions in writing for our witnesses to respond to. 
That's our typical procedure, and that's what we'll do today.
    Now, I am going to take the first 5 minutes. I learned a 
lesson on Tuesday in Financial Services. I was witness to the 
excellent chairing of a committee with an absolute time 
imposition of 5 minutes by the Chairlady from New York, and I 
am going to hope to emulate her success at that hearing this 
morning, so the gavel will be heavy at 5 minutes. So, start the 
clock.
    Dr. Graham, my first question is, every information request 
that an agency puts out has to be vetted through OMB and has to 
have an OMB control number, and, if the information request 
lacks the number that indicates it hasn't been vetted and 
therefore it's not required to be responded to. That's my 
understanding of previous hearings that we have had.
    Dr. Graham. Yes, sir.
    Mr. Ose. So, if there is no OMB control number, is that an 
indication that the document is not a binding document. Is that 
an accurate statement?
    Dr. Graham. Well, you're asking a nonlawyer that question, 
but that is my understanding. It is an unenforceable collection 
if it doesn't have an OMB control number.
    Mr. Ose. All right. I always like to get that on the 
record, just kind of ground rule No. 1. Now, I want to go to 
the chart over here that's leaning against the wall, the one 
that's got the purple, blue, red and white on it. That is a 
chart of every agency which interacts with the public for which 
there is a paperwork requirement and for which we were seeking, 
under the law passed, a single point of contact and a single 
phone number for which the public could contact. Now, some of 
the agencies have not responded or maybe they have responded 
and have said they don't have anyone. I just want to go through 
the ones that are noted on that chart as either none or 
missing, and get that on the record. Do you have a copy? You 
have a copy of that?
    Dr. Graham. Yes, I have a copy right here, sir.
    Mr. Ose. OK. Now, Housing and Urban Development, number of 
single points of contact, that chart notes none. Did HUD 
respond? Did they just ignore your request? Do you have any 
recollection of that? I'm just going to go down the list here.
    Dr. Graham. Well, I'm aware that for three of these 
departments we could not in the final analysis get them to 
identify only one. That's not because we didn't try. Your data 
says two. I trust you. I knew there were a couple of them that 
have multiple contact names.
    Mr. Ose. OK. I see that Treasury has multiple contact 
names.
    Dr. Graham. Right.
    Mr. Ose. But, we're specifically referring to Housing and 
Urban Development and Labor. They have provided no single point 
of contact in accordance with the law that mandates this 
information.
    Dr. Graham. Meaning they have supplied more than one. There 
may have been one that didn't supply any, but my understanding, 
our problem in this territory was predominantly that we had 
some that didn't want to pick just one.
    Mr. Ose. Well, did they submit any?
    Dr. Graham. Some of them did, yes, submit more than one.
    Mr. Ose. Did some submit none?
    Dr. Graham. I don't remember. There may be some. Are you 
talking about just the departments at the top?
    Mr. Ose. I'm talking about----
    Dr. Graham. Or are you talking about the whole list? For 
some of them we didn't get any response at all.
    Mr. Ose. Well, that's part of my question there. But, in 
turquoise you will see on that chart there are eight lines 
outlined in turquoise, the first of which is Housing and Urban 
Development, which notes that as a single point of contact, 
none.
    Dr. Graham. I'll check for you if you want whether that 
means they didn't supply anything or whether they supplied more 
than one. I don't remember.
    Mr. Ose. OK. That's also the same response for the 
Department of Labor?
    Dr. Graham. Oh, I know Labor supplied us information. They 
weren't nonresponsive. They were active. They just didn't want 
to pick one.
    Mr. Ose. Well, that begs the question. I mean, the law is 
very specific.
    Dr. Graham. They were well aware of the law. We read them 
the law.
    Mr. Ose. OK. Let's delve into this a little bit. Who at the 
Department of Labor is making the determination as to who shall 
be the single point of contact? Who makes that determination?
    Dr. Graham. I don't know that in a formal sense. I can tell 
you that for those agencies, including Labor, that did not 
provide a single contact and instead provided more than one, I 
can try to explain to you from their perspective why they chose 
to respond that way if that would be helpful.
    Mr. Ose. Well, I think that would be helpful, yes.
    Dr. Graham. Well, a number of these agencies, particularly 
cabinet agencies, have different units within the agency that 
have distinct statutory and regulatory responsibility, and they 
felt it would be more useful for the small business community 
to have the point of contact be at the level of a subagency 
rather than the agency as a whole. That was one form of their 
concern.
    Mr. Ose. All right. I have to drop the hammer on myself.
    Dr. Graham. All right.
    Mr. Ose. Mr. Schrock for 5 minutes.
    Mr. Schrock. Thank you, Mr. Chairman. I'm puzzled by a 
couple of words you said, Doctor. You talked about how you're 
generally open to getting hold of some of these regulations. 
Generally open means to me you're not really going to do so. In 
your opening statement, you said generally open, you and the 
administration are generally open to doing some of the things 
that we have tasked you to do. Do you remember saying that?
    Dr. Graham. Oh, absolutely, sir.
    Mr. Schrock. What do you mean, generally? I would think you 
would be totally open to that.
    Dr. Graham. Well, Mr. Ose has never asked for anything 
unreasonable so I would never have applied that restriction to 
him. But in your case, I have to be very careful.
    Mr. Schrock. OK. You talk about electronic strategy and I 
understand that. But I think, as I recall, and somebody will 
correct me if I'm wrong, I think 43 percent of small business 
didn't really have access to this. My guess is the Frank 
Manzullos of the world don't, and we seem to be starting off 
with that, and it seems like we're trying to put the roof on 
before we build the basement and I wonder how we get around 
that. Because the Frank Manzullos of the world are going to 
have to have some way to access these agencies, and is he going 
to want to spend a lot of time on the phone calling them when 
he doesn't know who he's calling? How do we help these people 
with that? And, while I'm on that, why don't we have 800 or 888 
numbers on there? Why should some guy in Rockford, IL or 
Keokuk, IA have to call and probably get put on hold for 5 
minutes, as happened to me yesterday, and be transferred from 
this person to that person? That's just another expense that 
small businesses don't need. I notice some agencies do and I 
wonder why the others don't.
    Dr. Graham. I think that's a great question, and I am going 
to leave this hearing and ask and find the answer, and, if 
there is not a good answer, then we are going to have 800 
numbers on there.
    As to the first part of your question, just briefly I want 
to point out that the data that we are seeing on small business 
access to computers and Internet is more optimistic than I 
think some of the other data that's been referred to. According 
to the latest Dunn & Bradstreet study, we have 80 percent and 
increasing at about 5 percent per year. So, I think we should 
keep in mind there are a lot of small businesses out there 
which are very active with the Internet and which would like to 
have an ability to interface with the government electronically 
in a consolidated way, as intended by the statute.
    Mr. Schrock. OK. I can tell you, from a personal 
standpoint, when I ran for the Virginia State Senate the first 
time, I honest to God did not know how to turn on a computer. I 
didn't. Boy, have I learned. And, it is people like the people 
behind me who have taught me. But, I have some time to do that.
    If Frank Manzullo is frying fish all day long, I am not 
sure that he is going to have a lot of time to do it. I worry 
about those who don't do it, that they will be left out in the 
cold.
    Dr. Graham. I agree. We should worry about those.
    Mr. Schrock. You talked about paperwork limitations. 
Expand. You said there were limitations on what you could do.
    Dr. Graham. Yes. The Paperwork Reduction Act, as it is 
designed, calls for the review of each paperwork or information 
collection request. But, it doesn't simply call on agencies to 
eliminate these paperwork burdens. It says the agency needs to 
analyze them to see whether the information that is going to be 
collected is important or useful to the government program that 
is going to collect the information.
    That requires, then, a judgment call as to whether that 
information that is being collected is, in fact, really 
necessary for the conduct of that program. And, that is a line-
by-line evaluation in terms of the paperwork. So, it is a very 
intensive job for an agency to develop its paperwork and for us 
to do paperwork review.
    Mr. Schrock. An example of that, during the Census, my wife 
and I got volumes of stuff they sent you in the mail. And, 
frankly, they asked information that was nobody's business. 
Nobody's business. And, I just wrote such on there. Of course, 
I didn't get fined and I am not in jail, but what gall. I mean, 
why do they do this sort of thing? Why don't they just ask, who 
is living there, what your ages are, your birth dates, and let 
it go at that?
    Why do they have to ask what kind of peanut butter I use, 
and they did ask crazy things like that.
    That is just one regulation. There are probably thousands 
and thousands of other regulations that do the same thing. And, 
when a lot of businesses know that, if they don't answer some 
of these regulations, they are going to get fined--I think 
businesses said, if they didn't answer them, they were going to 
get a $500 fine--God, why do we permit that kind of stuff? Why 
don't we just stop that altogether?
    Dr. Graham. I like the specificity of your question. If you 
give me the specific questions in the Census which you do not 
think need to be included, send them to me, and I will try to 
learn if the Census has good and sensible reasons to include 
them.
    Mr. Schrock. Well, I already sent it back to them, told 
them what they could do with it. So, I don't have it. But, I 
mean, everybody probably got that sort of thing.
    Dr. Graham. The reason I ask is, it is a big fight each 
time around on which questions to include in that form. That is 
not an easy thing to do, to include a question on that form.
    Mr. Schrock. Why do they have to do it in the first place? 
Why do they need to know what kind of peanut butter or pajamas 
I wear? Give me a break.
    Dr. Graham. If you have examples like that you would like 
me to look into, I am happy to do it, sir.
    Mr. Schrock. I am going to be gaveled out of here real 
quick, so I yield back.
    Mr. Ose. The gentleman's time has expired.
    The gentleman from Texas.
    Mr. Gonzalez. Thank you, Mr. Chairman.
    Dr. Graham, in the scheme of things and what we attempted 
to do here through legislation back then by passing on the 
responsibility to the individual agencies, what if an agency 
doesn't really review the impact on small businesses of any 
proposed regulation, anything that they are--back, second, they 
don't review to cull through the unnecessary, to streamline, 
which we have mandated that they do both, in essence, but they 
don't do it. They never do it.
    How do we get their attention? What should be the 
consequence? What are the tools available to us? Because, as 
long as things are aspirational, nothing ever gets done. I 
mean, I think that is a good rule in D.C., or anywhere else.
    So what would be an effective tool for this committee to 
look to to implement when it comes to these individuals and 
these agencies that obviously aren't really looking at those 
regs, the consequences, and how to streamline?
    Dr. Graham. Well, let me first say that I think that part 
of the responsibility to make sure that agencies are looking at 
small business impacts resides in our office, within OMB, in 
collaboration with the Advocacy Office of the Small Business 
Administration. And, when there are small businesses which feel 
that those analyses are being done poorly or not being done at 
all, when that happens, then they should feel comfortable 
coming to OMB and making that case; and, we will look into it 
and see why that isn't being done and how it can be fixed. And, 
we do have the authority to ask an agency to reconsider a 
regulation that they are developing if they have not looked 
carefully at small business impacts.
    Now, if your question is, what can be done outside the 
executive branch, I think that is a much bigger question in 
terms of, for example, what types of avenues should there be in 
the judicial system for small businesses to seek protection in 
the event that their interests are not considered carefully. 
That, I think, is a much bigger question, and frankly I don't 
know the legal aspects now, that well, to give you a firm 
answer to that.
    Mr. Gonzalez. I am looking at agency behavior, and I know 
that it is trite, but to say a bureaucracy environment, or 
culture, how do we enter that and make a difference, how do we 
say that we really mean business? We want you to look at the 
regulatory impact of your regulatory scheme before you create 
anything new in the way of proposals. We also want you to look 
where you have been and what you have on the books now that 
truly doesn't make any sense.
    How many complaints do we have to get for you guys to 
understand that surely some things are no longer relevant, but 
are still out there and, once in a while, are enforced with no 
practical effect or benefit? How do we do that? How do we enter 
that culture? How do we get people's attention?
    Dr. Graham. Well, one thing we've noticed in the task force 
that we worked with for the last year is that the 
representatives from the various agencies that came into the 
task force, by interest and orientation, did tend to have an 
interest in small business impacts. But, that is, by no means, 
fully representative of the agencies that they represent.
    There are a lot of people in the agencies who have many 
different interests and much different agendas than concerns 
about small business. That says to me that the committee needs 
to find ways--and we can work with you on this--to build units 
within these agencies that are designed with a mandate to care 
about the impact on small business.
    Mr. Gonzalez. And, you bring out a very good point, because 
it doesn't matter if you have a very dedicated person within 
that agency who sincerely wants to see all of these things bear 
fruit. But, the truth is, at the very top, if it is not 
encouraged, endorsed and embraced by real decisionmakers within 
the agency, it goes nowhere.
    The other day we had a hearing on contract bundling. There 
is not a department or agency out there that gets a passing 
grade on it. And, so, someone was saying, what is a consequence 
to them if they continue to bundle, ignore the 8(a) Program in 
the small business sector? There is no consequence. Unless, we 
started saying to them, all right, if you don't meet your 
percentages that are realistic, then maybe you shouldn't be 
able to bundle. You get to bundle fewer contracts.
    What could we do with agencies today that just aren't 
meeting the responsibility when they promulgate regulations and 
when they basically enforce or when there is a lack of 
efficiency and streamlining? I mean, I know what you are 
telling me, but I am just saying, as a practical aspect, I know 
there is some sort of--we can try some sort of incentive, 
reward.
    But, what about the other end that is the opposite of the 
reward, and that is some negative consequence for inaction? 
What is it? What form would it take? Do you have any 
suggestion?
    Dr. Graham. I don't claim to have the answer to your 
question, which I think is a sensible one and a reasonable one. 
But, I think looking at the end of the pipeline for what you do 
when things go wrong is only part of the solution.
    I think we need to build in the agencies the equivalent of 
the Advocacy Office of Small Business, the one we have now. We 
need to build that kind of orientation and perspective into 
these different regulatory agencies. I don't think it is 
realistic to think that we can do it without building that 
capability into the bureaucracy itself.
    And, some will say that is just adding to the bureaucracy, 
and that is a reasonable point as well. But, until you get that 
perspective guilt into the fabric of those regulatory agencies, 
it is going to be very hard to change.
    Mr. Gonzalez. Thank you.
    Mr. Ose. The gentleman's time has expired.
    The gentlelady from New York.
    Mrs. Kelly. Thank you, Mr. Chairman.
    Dr. Graham, I would like to ask you a couple of questions 
about your June 27th report. You recommended that there be a 
new electronic system, and, as you have heard this morning, 
there are many people in business who can't turn on a computer. 
They don't own a computer because of the cost. While it may be 
time-saving for you, people have other things to do with the 
money that they have as profits, because the profit margin on 
small business is quite small for many people, and they don't 
put it into computers.
    So, when you recommended electronic reporting, you also 
recommended that these small businesses self-identify 
applicable criteria that profile their business and self-
identify a comprehensive list of applicable requirements. How 
the heck are they supposed to do that if they haven't read the 
Federal Register and don't know what is out there? I don't 
understand how that is supposed to work.
    It seems to me, given the state of technology today, we 
have telephones that are pretty good. It seems to me that most 
of us, while we hate them, can sit and listen to a telephone 
menu and punch the right numbers to get through.
    But, I would be at a loss to self-identify in one of my 
businesses for instance--say the florist business that I was 
in, I would be at a loss to self-identify. I know what I am 
trying to ask, but I don't know what pew it belongs in. So I 
have the church music, but I don't know where to sit and what 
pew.
    And, you are telling me that I have to do that? It seems to 
me we need another way around that. Have you got another answer 
to that?
    Dr. Graham. Well, I think your diagnosis of a problem is 
correct, which is, in order for the electronic interactive 
solution to work, either the small businessperson has to be 
able to describe its business sufficiently accurately so that 
the underlying software can then identify the appropriate 
requirements, OK? Or you have to have very well-designed 
software to take very limited information from the small 
businessperson.
    But, I agree with the premise of your question that it 
can't be that the answer is a small businessperson knows all of 
the applicable paperwork and business requirements first, and 
then they tell the business gateway system that is what they 
are. That is not going to work. I don't think that is the 
intention.
    Mrs. Kelly. But, that was in your final report.
    Dr. Graham. I would have to go and read the exact 
provisions you are talking about.
    My understanding, based upon the briefing that I had, is 
the idea that the florist--and I don't know that business at 
all--would say a few basic things about the business, 
information that any florist would know about the business, and 
then the underlying software structure has to be able to say, 
that means this agency, this paperwork requirement, that 
regulation. That is quite an engine that has to be within that 
software in order to accomplish that.
    Mrs. Kelly. Would you give me--the fact that it might be 
just as easy and possibly faster, because, in small business, 
time is money. It costs me money to call down here to 
Washington, it costs me time to sit on the telephone; and, if I 
am running a small business, I don't need to sit on that phone 
and spend a lot of time trying to punch buttons, trying to get 
my way through.
    There has to be a way that the OMB can help us help small 
business, first of all, know what the regulations are and get 
to a warm body that can answer some of the questions, because 
you cannot do it electronically. We need warm bodies with 
brains who know what is going on.
    The other thing is that, in your final report, you didn't 
address the feasibility of requiring the agencies to 
consolidate reporting requirements in order that every small 
business can submit all of the information required by the 
agency to one point. You didn't really address that.
    That is part of what my bill would have done, if we had 
done the thing at the GAO.
    So, I am wanting to--what I really guess I am saying is, 
would you work with us to try to help us help small business 
understand the rules and regulations, get a single point of 
contact where at least they will get a menu that they can 
scroll down through, or they can punch down through, so they 
can get the answers to--getting into the right pew so they can 
sit with the choir and sing the same music and figure out what 
their problems are?
    Can you work with us? Because this is your final report, 
and I don't think it is adequate enough to suffice to help 
small business.
    Dr. Graham. Yes. We are happy to work with you and the 
small business community. And, this was just the first, as I 
understand it, of a 2-year project. We have another task force 
report coming a year from now. And, if you have specific issues 
that you would like us to make sure that we turn our attention 
to, we are happy to talk with you and do the best we can.
    Mrs. Kelly. Just to followup, and I realize I've got a red 
light here, but I just want to followup and say we need this 
now, and the sooner we can get it--waiting for yet another 
report, we can study this thing to death. We've got to get it 
under way, because our small businesses are hurting.
    They form our economy. We need to support them, and the 
sooner the better.
    Thank you very much, though, for appearing here today.
    Mr. Ose. The gentleman from Arizona.
    Mr. Franks. Mr. Chairman, Dr. Graham, I know you have a 
very difficult job, especially when there is a lot of 
frustration; and there are a lot of former business people on 
this committee, and I happen to be one of them.
    It is not hyperbole to say that, in the course of our 
business, we sincerely spent probably 30 to 40 percent of the 
total office time and the total energies of our in-office--not 
in the field, but in the office, complying with or trying to 
navigate some type of regulatory scheme. And, I am just, of the 
opinion that the primary concern of the public is to prevent 
business from either endangering the public or from directly 
and demonstrably defrauding the public.
    But it occurs to me that if regulatory agencies were 
required, No. 1, to make those regulations--to say that any 
particular regulation, that they had to make in writing the 
statement to the Congress, that this regulation is absolutely 
mandated by statute, for all of those that are, so that we 
would know what was our fault.
    And, second, if the agencies were required that every 
regulation that they promulgated outside of a statutory 
mandate, that they had to meet a criteria of about three 
things. No. 1, that this was critically necessary to prevent 
demonstrable fraud or endangerment to the public; No. 2, that 
they said in writing, that this was absolutely necessary; and 
No. 3, that they had consulted with the other agencies to 
ascertain ways to give businesses the easiest possible road to 
compliance.
    Now, I know I have thrown a lot at you right there. But 
part of the challenge is, sometimes these regulations 
accumulate to the point that, when everyone just takes a look 
at the obvious and sees the type of regulation that small 
business faces, they are astonished. And, I am just wondering 
if any of those, or if you could respond to any of that?
    I realize it is kind of a conglomerate to respond to.
    Dr. Graham. There is a lot of constructive thought 
underlying the question, and a lot of good ideas in it. And, we 
do have some responsibility at OMB to be doing some of those 
things that you are talking about now, for example, making sure 
that multiple agencies within the government have a say in a 
regulation before it is adopted, rather than relying on one 
particular agency's perspective to dominate the view of the 
Federal Government.
    But, some of the other things that you mentioned, we don't 
currently have as part of our daily practice at OMB. We are 
eager to meet with you and talk with you about the practicality 
and the sensibility of those approaches.
    Mr. Franks. Just a last question, Dr. Graham. I am just 
wondering, do you think that it would be in the interest of 
small business and just the challenges that you face for some 
type of very simplified criteria that would be put forth by the 
Congress that would simply say that all regulation either has 
to be directly mandated by statute, or it has to meet one or 
two or three or four or five simple criteria, to where we all 
kind of are on the same page; and that the regulatory genesis, 
or the impulse for regulation all came from the same agreed-
upon consensus or foundation?
    Do you think that some type of bill like that, I am sure 
that the gentlelady from New York has aimed in that direction 
already. But do you think that there is any efficacy in trying 
to pursue something like that in a new and a fresh way?
    Dr. Graham. Well, I certainly am going to go back and check 
the gentlelady from New York's bill, that I remember seeing a 
couple of years ago, but I don't remember it that well. But, I 
am going to look at that, particularly on the integrated point 
that you made in your comments.
    On those specific ideas, the basic idea that Congress would 
take steps through procedure or law to assume more 
accountability for regulations that are adopted in the Federal 
Government, I think, is a basic principle that is a great idea. 
Now, the specifics of how that would be implemented we would 
have to look at pretty carefully.
    There are some lawyers in the administration that would 
look at that pretty carefully too. But, I think that the basic 
thrust of your question is, shouldn't we find a way, not just 
for OMB to assume more accountability, but for Congress to 
assume more accountability in this area? I think that is a 
great idea.
    Mr. Franks. Thank you, Dr. Graham, Mr. Chairman.
    Mr. Ose. The gentleman's time has expired.
    We have been called for votes. There are five votes. The 
scheduled time on those votes is 45 minutes.
    So, Dr. Graham, we are constrained to be, as usual, 
respectful of your time. We are going to submit our questions 
to you in writing and ask for a prompt and timely response, as 
usual.
    We will go over for the votes, come back for the third 
panel. I know that Chairman Schrock is planning on coming back. 
I am certainly planning on coming back. That is the 10-minute 
bell.
    Is everybody OK with that?
    Mr. Gonzalez. That is fine.
    Mr. Ose. OK. I am going to go ahead and ask two questions 
of Dr. Graham.
    On this list over here, it has 71 agencies, listing the 
compliance assistance person and the single point-of-contact 
person. You have heard everybody up here talk about making sure 
that list is up to date with 800 numbers and all of that sort 
of stuff.
    Will OMB be publishing a revised document to include points 
of contact for all of the agencies?
    Dr. Graham. Given the premise of the chairman's question, 
we will be working hard on that.
    Mr. Ose. When do you think that can be accomplished by?
    Dr. Graham. I need to get a better feel, particularly for 
the independent agencies which are on your list, how realistic 
is it for us to accomplish that. I need to talk to my 
colleagues about that.
    Mr. Ose. Would you please remind them that it is the law?
    Dr. Graham. Yes, sir.
    Mr. Ose. If you could just do me a favor, those who balk, 
could you just drop me a note, you know, like their name and 
their phone number, and I can probably visit with them here. 
And we could ask them directly, why is it that you haven't 
provided this single point of contact to OIRA? I will be your 
bad cop.
    Dr. Graham. That will help me get the job done.
    Mr. Ose. I will be happy to do that, because it is the law. 
I would like to do it sooner rather than later.
    The other question I have is that we did something kind of 
entrepreneurial around here. We contacted some of the indicated 
single points of contact.
    Dr. Graham. I find that interesting. What did you learn?
    Mr. Ose. Well, we had mixed results, Dr. Graham. Some with 
whom we talked, who were identified on this list as the single 
point of contact, said, they didn't know anything about it. 
Some whom we talked with weren't able to answer our questions, 
which brings us to the heart of the matter.
    Has OMB done any training for those people who are 
answering these questions on paperwork for small business, or 
does OMB intend to provide any training, or the agencies 
provide any training and the like?
    I mean, there is a certain level of competence that has to 
be embedded in the responsive party. I am trying to get at how 
we get that into that person, and then how do we measure its 
effectiveness?
    Dr. Graham. I guess I think of it as a question of priority 
and importance that is an OMB role. If it is a training 
question, I have a feeling that we probably should have SBA or 
SBA Advocacy in the training role with us participating in 
collaboration with them.
    Mr. Ose. It seems to me that the only way we can get a 
consistent level of performance is to define what our 
expectations are from these single points of contact, and then 
make sure that level of expectation is met.
    The question really that I am trying to get at is, when 
will that training take place? How do we set the standard, 
whether it is a guidance or interagency communication, or 
whatever; and then how does that training get done?
    Dr. Graham. I would say, one useful standard would be, if 
you do a little bit of that sampling of phone calls a year from 
now, after we go through another round of this, it will be 
interesting to have those results. We will try to get you in 
much shorter order than that updated list.
    Mr. Ose. It won't be a year from now. It is likely to be 
next week or we might even do it tomorrow. Our purpose is to 
shine a spotlight on this thing, because we are intent on the 
law being followed.
    Dr. Graham. Will you share with us the calls that you have 
made so far, so we have a sense of where the soft spots are?
    Mr. Ose. Actually, you have a list of our calls here.
    Dr. Graham. Did any of them work, even a single one?
    Mr. Ose. Well, some people say, yes, some people say, no. 
But we were able to identify, as you see on that chart, single 
points of contact.
    And, then on another chart we have a list of the names and 
the phone numbers. But, again, that second chart of names and 
phone numbers mirrors the first chart in terms of some where we 
got a response of, we don't have someone yet; or, it is not us; 
or, it is missing, or the like. We will be happy to give you a 
list or a copy of this list.
    Dr. Graham. That would be useful.
    Mr. Ose. I think you may have it already. It looks like 
this. Can you see that from there? All of the fine print. 
Right?
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] T0867.032
    
    Mr. Ose. So, anyway, so we will be monitoring that in our 
unique way. So I would hope that it doesn't take a year to 
contact these folks and get them on the stick here so that we 
can get this stuff resolved.
    Now, again, I want to thank you for coming. We will direct 
our questions to you in writing. Obviously, we appreciate your 
time and response, which you have always done in the past.
    I have 4 minutes to get over to vote, so we are going to go 
into recess. We will reconvene at 12:30 for the benefit of the 
third panel.
    Dr. Graham, thank you for appearing.
    Dr. Graham. Thank you very much.
    [Recess.]
    Mr. Ose. The committee will reconvene. I want to welcome 
our second panel to the witness table. And, as you heard me 
with Dr. Graham, we swear everybody in here. So, if you all 
would raise and raise your right hands.
    [Witnesses sworn.]
    Mr. Ose. Let the record show that the witnesses answered in 
the affirmative. We welcome today to our third panel Ms. Karen 
Kerrigan, chairman of the Small Business Survival Committee, 
and Mr. Andrew Langer, manager of regulatory policy for the 
National Federation of Independent Business.
    Now, before you start, let me just share with you that we 
have received your written submittals. We have reviewed them. 
We are going to give you 5 minutes each to summarize. I will 
forewarn you that the other hearing that I am running back and 
forth to has had the same difficulty we have had.
    So, I may step out for a moment, in which case Mr. Schrock 
will take the Chair.
    Ms. Kerrigan, you are recognized for 5 minutes.

   STATEMENTS OF KAREN KERRIGAN, CHAIRMAN AND FOUNDER, SMALL 
  BUSINESS SURVIVAL COMMITTEE; AND ANDREW M. LANGER, MANAGER, 
 REGULATORY POLICY, NATIONAL FEDERATION OF INDEPENDENT BUSINESS

    Ms. Kerrigan. Thank you, Chairman Ose and Chairman Schrock. 
It is an honor to be part of this hearing today, and, on behalf 
of the Small Business Survival Committee and our membership, we 
appreciate being invited to present our views.
    First, let me thank you, both of you, for your leadership 
on this issue and for your interest in this issue. Government 
paperwork certainly is not the most riveting of topics in the 
political world or on Capitol Hill these days. Yet, excessive 
paperwork requirements and the burden imposed on small 
businesses remain a challenge and a key issue of concern for 
our sector.
    Again, my name is Karen Kerrigan. I am chairman of the 
Small Business Survival Committee, a nonpartisan nonprofit 
small business advocacy organization with more than 70,000 
members nationwide. Modernizing the regulatory structures and 
processes in government is a central objective of our 
organization, and we have been engaged and certainly supportive 
of legislative solutions over the years to reduce the burden of 
regulation and paperwork requirements in the small business and 
entrepreneurial sector.
    Again, we applaud the hosting of these oversight hearings 
today, as we believe persistent and rigorous oversight by the 
Congress is the key to accomplishing the objectives of not only 
paperwork reduction, but so many other reform measures signed 
into law to improve our system of government. Certainly with 
respect to the Paperwork Relief Act of 2002, the ongoing 
interest and oversight of Congress, as well as the commitment 
of the administration and OMB, are central to seeing meaningful 
activity and changes within the agencies. And, let me add that 
our organization and members stand ready to assist and 
constructively participate in that process.
    With respect to where we stand today in the implementation 
of the act of 2002, the OMB's progress to date is decidedly 
mixed. Now, in fairness to the current administration and OMB, 
it has inherited a longstanding and very complex challenge. I 
believe the small business community has realistic expectations 
in what is and what is not accomplishable in a year's time. 
However, certain benchmarks were established by the act, and we 
find there is room for improvement in many areas.
    I do applaud their plans and progress to date for 
integrating technology to better inform and help small 
businesses with their paperwork obligations. Indeed, technology 
is an important tool to help the OMB strive to achieve PRA 
goals, as well as complementary ones established by the 
administration's e-gov initiative.
    Let me add, however, that these efforts should not 
supersede the central objective of paperwork reduction, which 
is actually to reduce paperwork. The essence and intent of the 
act captures many of the chief concerns and the needs of small 
businesses in regards to the complexity of accessing, 
understanding and complying with the Federal paperwork 
requirements. Therefore, progress in key areas would be very 
helpful, specifically, a single small business point of contact 
within each agency.
    The OMB's work in this initiative is unfinished. In 
reviewing the listing on the Federal Register, we found that 
for some agencies, there are multiple points of contact and for 
others none exist. From our perspective, it seems to make sense 
to have a consistent department across agencies be responsible 
for being the single small business point of contact.
    Such consistency could encourage both formal and informal 
dialog and coordination between agencies in regards to 
successfully performing this function, and I believe small 
businesses would receive more consistent direction.
    I also believe it would lead to a more productive and 
structured relationship with the small business community in 
conducting outreach and seeking input in developing and 
implementing measures to help small businesses understand and 
comply with paperwork rules, as well as identifying 
opportunities for reduction.
    It has been suggested by some in the small business 
community that each agency's single point of contact report 
directly to the Chief Information Officer, the rationale being 
that the CIO is the natural fit, due to its information 
collection responsibility. Our standard is that the single 
point of contact be able to consistently, quickly and 
accurately provide the small business owner with the 
information he or she needs to properly comply with Federal 
regulations or direct them to a knowledgeable person who can.
    Second, small businesses in the small business community 
have regularly requested that the Federal Government develop a 
central repository of all regulations and paperwork that they 
are required to comply with. It only makes sense that the 
government provide such a tool if they are serious about 
compliance. There simply has to be a way that the Federal 
Government can organize this information in one place, both in 
electronic and hard copy format. I can only emphasize what a 
useful resource a central listing or portal would be for small 
businesses.
    It could also serve as a potential pool for identifying 
opportunities for consolidation or reduction in paperwork. 
Putting all of those requirements under one roof or on one list 
will allow agencies, affected parties and the public the 
opportunity to not only understand the scope of the challenge 
but also may help to generate solutions from these parties.
    Let me just end by saying, the integration, the 
consolidation, and the frequency and redundancy of paperwork 
reporting truly is the larger objective; and in its 
recommendations, OMB went over certain steps and procedures to 
make that happen in terms of making agencies come up with a 
plan of action for reporting to the OMB on what their plan is.
    The bottom line is that there has to be a hammer somewhere. 
OMB has to follow through on this if something is to happen.
    Again, I thank you. There is the hammer right there. And, I 
see it coming this way if I don't close.
    But, again, we thank you for your oversight. As Mr. 
Gonzalez had mentioned, the bureaucracy is winning, and they 
know how to win if Congress doesn't play an active role in 
making sure that the objectives of the Paperwork Reduction Act 
are not achieved.
    So, again, I look forward to working with you. We look 
forward to working with OMB and the administration in making 
that happen. Thank you.
    [The prepared statement of Ms. Kerrigan follows:]

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    Mr. Schrock [presiding]. Thank you, Karen.
    When I was reading your testimony last night, I looked at 
the cover sheet, and it said, ``Karen Kerrigan, Chairman and 
Founder, Small Business Survival Committee'' and I thought, 
isn't it a shame we have to have a title like that.
    Ms. Kerrigan. Yes it is.
    Mr. Schrock. If not for government, we would not have to 
have that sort of thing.
    Andrew, welcome back. Last time I saw you, your wife was 
getting ready to go to Iraq, but she didn't, right?
    Mr. Langer. Thankfully, she didn't have to go. She is back 
on the bubble, though, between now and December. So we are just 
kind of waiting expectantly. I appreciate you asking.
    Chairman Schrock, it is really a pleasure to be here. And, 
Mr. Gonzalez, thank you for having me. I am here representing 
the National Federation of Independent Business, the Nation's 
largest organization of small business owners, and I would like 
to highlight a few key points of my written testimony.
    Unreasonable government regulation, especially onerous 
paperwork burdens, continues to be a top concern for small 
businesses. Regulatory costs per employee are highest for small 
firms.
    NFIB continues to push for the lowering of this burden, and 
had high hopes that the efforts of the Office of Management and 
Budget would produce measurable results and a marked 
improvement. Unfortunately, the efforts of the Paperwork Task 
Force fell short of that mark.
    While recognizing that changes cannot be brought overnight, 
we had hoped that the task force would move far beyond where 
they were, begin cataloging the current burden and identify key 
areas where Federal agencies could begin reduction, laying out 
an agenda, and setting responsible parties on that agenda's 
path.
    As to the issue of single points of contact, I am going to 
draw on an example in a moment of my own problems recently with 
that. First, I would like to shed light on a question raised by 
Congresswoman Kelly earlier regarding comprehensive review of 
the overall burden faced by small businesses and businesses in 
general in the regulatory state.
    Paul Rosenszweig of the Heritage Foundation has been 
contacting the General Accounting Office and others to ask for 
an accounting, a full accounting, of just how many criminal 
laws, how many statutes carry criminal penalties for businesses 
and individuals that are on the books today. To this date, as 
far as I know, they have been unable to give him an answer. We 
don't even know how many laws are out there affecting people. 
There is something fundamentally wrong with that.
    I would like to take this time, though, to point out two 
examples of particularly onerous paperwork that were included 
in my written remarks, both unfortunately having to do with the 
EPA. Next to the burdens associated with tax preparation, 
paperwork associated with environmental and public health and 
safety rules remain the most troublesome to small businesses.
    Now up on the screen, as included in my written testimony, 
I would like to call your attention to my appendix A, what is 
called an ``Individual Ability to Pay Claim Financial Data 
Request Form.'' That is the form that is up there.
    If you have it in front of you, you will note that there is 
no OMB number on this form, which I and others have found 
rather puzzling. This is where I get to the points-of-contact 
issue. I spent most of yesterday afternoon trying to track down 
just what this document was. It came to me from one of our 
members.
    I am a professional in the regulatory community. I spend my 
days figuring out what it is that government is doing, what 
they are regulating and why and how. I have been in D.C. for 
the better part of 10 years, and it took me over a dozen calls 
and several hours of my afternoon's time to figure out just 
where this form came from, who was putting it out.
    I'll tell you a little bit about it. I contacted Kathleen 
West, Associate Regional Counsel of EPA Region 4, because that 
is where this member had gotten the document from. She didn't 
know where it came from and why there was no OMB number on it. 
I then, in my checking, began to do the search through the EPA.
    Eventually, I came upon the Office of Site Remediation and 
Enforcement in the Office of Enforcement and Compliance 
Assurance and asked the person in charge of site remediation, 
the person I spoke to, Tracy Gibson--I don't know if she is in 
charge of it--why there is no indication of OMB approval. Her 
explanation was that, because the form is sent out in 
individual cases to individuals, OMB approval for the form is 
not required.
    Well, that is just plain wrong as far as I know and as far 
as I am concerned. I note that under the relevant CFR section 
the law is clear. Because the same form is sent out to more 
than 10 people, OMB approval for this form is required 
regardless of whether or not it is only sent out to 
individuals.
    Now, if we can just turn to page 2 of this form. Right at 
the top and in the middle of the form itself, this is an 
especially intrusive form asking for, among other things, the 
amount of money earned by children in a household. This 
information is then processed by an EPA-hired financial analyst 
who calculates the potentially responsible party's ability to 
pay.
    I find it particularly galling that the EPA considers 
itself even possibly entitled to the earnings of a child who 
has nothing do with Superfund liability. As far as I am 
concerned, the fact that OMB had no control over this form not 
only makes the form's intrusiveness all the more egregious, it 
underscores that OMB and others engaged in paperwork burden 
reduction have their work cut out for them in assessing what is 
currently being imposed.
    Next, I would like to turn to the----
    Mr. Schrock. Can I interrupt you a minute?
    From the time you picked up the phone the first time until 
you got this thing answered, how long was it?
    Mr. Langer. Two hours----
    Mr. Schrock. But how about the cost to the businessman or 
businessperson who is trying to keep a business going?
    Mr. Langer. The fact is, that the businessperson looking 
for it wouldn't know where to go. I mean, I contacted friends 
and friends of friends. And, I knew where to go and it still 
took me quite a while.
    I would like to turn the committee's attention to a 
continuing problem that our small businesses are facing with 
burden reduction for lead under the toxics release inventory.
    The regulated community warned that the justification for a 
more strict standard for Lead TRI was unwarranted and that the 
paperwork was going to be overly burdensome. Nevertheless, the 
Environmental Protection Agency continued to press the 
regulated community to be expanded.
    EPA's own statements regarding our paperwork burden painted 
a bleak picture for first-time filers, and we know now that 
burden was terribly underestimated. How bleak was the picture? 
Roughly 100 hours, by EPA's own estimates, to figure out if you 
needed to do the paperwork and then to complete the paperwork 
itself.
    Two and a half weeks for one regulation of one small 
business's employee's or owner's time. And, over 40 percent of 
those reporting reported no emissions of lead whatsoever, which 
means that, within the Nation's small business community, again 
by EPA's own estimates, approximately 227,500 hours were spent 
doing paperwork which added nothing to the Nation's overall 
environmental health knowledge. That is over a century of man-
years.
    Mr. Schrock. And the penalty for not filling it out?
    Mr. Langer. Well, I belive it is $2,000 per day per 
violation is generally what they do. At least that is as far as 
I know.
    We can only ask again that OMB and Congress take a look at 
this burden, especially in light of the other paperwork burdens 
faced by small businesses.
    As I have said before to both this committee and others, 
regulation is like death by 1,000 pin pricks. In the content of 
paperwork violations, however, perhaps it is more accurate to 
say that it is death by 1,000 papercuts.
    Once again, I appreciate the opportunity to testify today, 
and I look forward to any questions that you or Congressman 
Gonzalez or other members of the committee have.
    [The prepared statement of Mr. Langer follows:]

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    Mr. Schrock. Thank you.
    My very alert counsel said it is $10,000, which is 500 
times worse--or five times worse than we thought it was.
    Thank you both for coming here today. I am going to ask--
the question I am going to ask, I am going to ask it of both of 
you.
    You have heard the testimony. You have had an opportunity 
to hear Dr. Graham testify about the task force. Are you 
convinced that the task force has fully implemented the new 
law?
    Karen.
    Ms. Kerrigan. Certainly there has been an effort, but they 
are struggling. I mean, if you just look at the benchmarks in 
terms of what the OMB was supposed to hit or what they were 
supposed to reach just with the basic things, the single point 
of contact, they have been unsuccessful in doing that. I think 
there is sincerity on their part.
    I think they are probably working hard. But, if you look at 
the bottom line, there is not--they are not complying with what 
the law requires.
    Mr. Schrock. Why? Why do you think that is?
    Ms. Kerrigan. I go back to Mr. Gonzalez's statement, maybe 
the bureaucracy is winning. That is what he said before.
    But, you know, I don't know how bureaucracies work. I 
really don't want to know how bureaucracies work. But, it would 
seem to me that a simple thing such as putting together a small 
business point of contact is not unreasonable. And, someone at 
the OMB has got to get out the hammer in terms of contacting 
the agencies and say, look, this is not a suggestion that you 
put together a small business point of contact, a regulatory 
information officer, whatever you want to call them, inside the 
agencies; this is the law.
    Mr. Schrock. It sounds to me like they need to stop saying, 
pretty please, will you give it to us, and say, this is when we 
are demanding it, date certain.
    They certainly have the law behind them to take that kind 
of action.
    Mr. Langer. Except there isn't much that they are able to 
do, enforcement-wise, to get these agencies to comply. That is 
where oversight--and that is why hearings like this are so 
important in keeping the pressure on.
    I mean, the fact is that, if an agency is not willing to 
identify that one person, or as you guys have noted already, 
the points of contact don't even know that they are points of 
contact--I mean, there is something very fundamentally wrong, 
something endemic to the culture right now.
    I hate to think that we are all getting burdened down by 
this overwhelming noise. But I think, one tends to take a look 
at the hugeness of the problem, and you get overwhelmed by it.
    The problem, of course, is that you can't just pick at this 
thing on the margins and try to go for the easy win. You have 
to focus on the fundamentals, where you reducing 227,000 hours 
of paperwork in one instance. I mean, things have to be 
addressed.
    I wish that they had gone further, instead of pointing out 
what to me is obvious, which is that an assessment needs to be 
done--and I am paraphrasing what was in the final report--set 
an agenda, let us know when you are going to make that 
assessment and stick to it, and then tell us what you are going 
to do about it.
    I have nothing but respect and admiration for John Graham. 
I understand all too well the burden that he is facing. But 
someone needs to step up to the plate and say, I am going to do 
this and here is when.
    Ms. Kerrigan. My sense is that, based on this hearing and 
your oversight, we are going to get a single point of contact 
at each agency. I just have that sense, but I think what it 
demonstrates is that ongoing and consistent oversight by the 
Congress and the committees is necessary to get some of this 
stuff done.
    Mr. Schrock. As much respect as you might have for Dr. 
Graham, the fact is the buck stops at his desk, and he is in 
charge.
    What I would like to do--my staff has a fit every time I 
mention this; I got this from an Admiral friend of mine--I 
would like to get in the car one morning with one of my staff 
and say, what agency are we going to pull up in front of today? 
Walk in and say, I want to see the Secretary. Say, I want to 
know who your person is.
    Admiral Bob Natter, Commander in Chief of the Atlantic 
Fleet does that. Once a week when his aide and his driver picks 
him up, he says, OK, what ship are we going to this morning? 
You can't believe the results he gets. It works. It is called 
management by walking around. And, that is exactly what we need 
to do.
    I swear, some day I am going to be doing that. Because that 
is the only way we are going to get those numbers correct up 
here.
    Now, let me ask you--my time is running out. Let me yield 
to Mr. Gonzalez for a few minutes.
    Mr. Gonzalez. Go ahead.
    Mr. Schrock. OK. You talked about the single point of 
contact. Will businesses be best served by having one contact 
or a series of people who, and, if you dial person No. 1 and 
they not are not there, it just cycles to the next person, next 
person, until you get the person you are supposed to talk to? 
Because I don't see how one agency can have one person.
    You know, if they have one person at the IRS, or even two, 
how in the name of common sense are they ever going to be able 
to deal with that?
    Ms. Kerrigan. I don't necessarily think that a single point 
of contact may mean one person. Certainly, I think that we are 
looking for a single gateway to get into that regulatory 
information office, if you will, that a small businessperson 
can go to; and then that person, or that contact, will be able 
to tell the small businessperson--the expert advise. They are 
basically the gateway, then they get delivered or get sent to 
the right person, based upon the expert advice that small 
business owner needs. I do think it is important that we have 
that single point of contact.
    The Paperwork Relief Act of 2002 recognized, and rightly 
so, that burden is not just the filling out of the form. The 
burden was defined much more broadly than that, including all 
of the research, all of the work, all of the time, all of the 
resources that go into complying, maintaining, data collection, 
and then reporting to the Federal Government.
    So, if you can get from point A to point B much quicker in 
terms of that single point of contact, in fact, you are 
reducing burden.
    Mr. Langer. If I can just quickly say, that is perhaps the 
most frustrating thing in dealing with a regulatory agency, 
having to get someone's voice mail and not getting an answer 
and not getting a person.
    Yesterday this was the problem--my jumping around from 
person to person. I called this person, oh, well, you know, I 
talked to somebody who said, ``All right, call ABC.'' ABC would 
not be at his or her desk. And, I was preparing for this 
hearing; I needed to get an answer.
    You have small businesses who are under a lot more of a 
gun. They have a financial incentive. So getting them to talk 
to somebody is the most important thing.
    But, I think it should be one number. I don't think that 
they should have to have access to the Federal Yellow Book on 
line, like I do, to just draw down a list of numbers that they 
can call. They don't have that.
    Mr. Schrock. And, as I said, before I leave for a few 
minutes, they need to have 800 numbers or 888 numbers. These 
businesses that are on the far West Coast should not have to 
sit on hold for 2 hours like you did. Because I bet that would 
be their profits for the week.
    Thank you.
    Mr. Ose [presiding]. The gentleman from Texas.
    Mr. Gonzalez. Thank you very much.
    You are wondering why bureaucracies work that way and why 
government--because it is human nature, adverse to change for 
whatever reason. We have to recognize that, but not live with 
it.
    I think what you are all pointing out is going to be 
important. I recognize the big picture. The big picture is, we 
want reasonable and necessary regulation, and we need to do 
away with some that is out there that is totally useless, as 
you already pointed out, Mr. Langer. By the same token, you 
know that it serves a useful purpose, and we want to deal with 
that.
    I don't believe an agency or department even recognizes 
what is unnecessary that they have already promulgated years 
ago, that they enforce haphazardly, that presents problems. I 
think if you do have a point of contact, a gatekeeper, a 
clearinghouse, whatever you want to call it, in each one, I 
think it is going to be an education in and of itself to those 
individuals of what a mess they have in-house, and it will spur 
them on to clean it up, because it will make their jobs easier.
    But, I think what you are pointing out, Ms. Kerrigan--and 
my frustration has always been, the Admiral can go in there and 
say, who is your point person here, or whatever it is; and, if 
they don't find one, do you know what happens? Something goes 
in the personnel file. Something happens with--whether someone 
gets promoted or not.
    In government, there is no consequence. I think Ed and I 
can walk in there and say these things, and maybe for a week 
there will be some sort of change. But, then what is going to 
happen as a consequence of these guys being unhappy? Nothing. 
And, I think we do need to come up with something.
    It is unfortunately, you know, there is always--rewards 
work. But, the other thing, too, is the penalty or the 
unpleasant consequence of it. There has to be an unpleasant 
consequence for people's inaction and ignoring what is the 
obvious. And, OMB has to get tough, and we have to somehow arm 
people, supply whatever the mechanism is to make these people 
responsible.
    I share your frustration. I mean, the point is, these 
departments, agencies and individuals will be there way after 
we are gone. They do wait us out, and they wear us out because 
we have limited staff; we can't deal with it. They know you 
guys surely can't. But, they even know that the committee 
cannot.
    And, there is a way of making it work.
    So, I don't really have any particular question. I think we 
have identified the problem. Everybody here knows what it is. 
We have identified some simple solutions that we can attempt to 
institute immediately, and then work from that place. It is a 
matter of doing it. And, you know--but any comments based on 
what I just rattled off, stuff based on my own frustration?
    Mr. Langer. I will tell you that it is frustration in the 
sort of bureaucracy inertia.
    But, one of our big concerns is, when an agency makes a 
decision, and is wedded to that decision regardless of 
overwhelming evidence to the contrary. This is the problem that 
we face with lead TRI. We have told EPA--and I understand why 
EPA wouldn't want to take our advice beforehand. We are an 
association representing small businesses. They are solely in 
the business of protecting public health and safety and the 
environment.
    But, the fact is, once the evidence was coming in, the 
facts that are in my written testimony all came out of EPA's 
report on lead TRI that was just released. Yet EPA is still 
working around the edges in terms of reducing the paperwork 
burden.
    I sat in meetings with senior officials at EPA to discuss 
how to better implement the reg as it was when we didn't know 
what the outcome was going to be. And, I got reluctance and 
hesitation and opposition to even putting together a simple 
guidance document that wasn't 150, 200 pages long, that had a 
summary at the beginning which told people what they needed to 
do to comply.
    I think it is inertia. But, I think that there are people 
who are out there who see things done a particular way. There 
is a big problem with not wanting to change their mindset when 
mistakes have been made. And, I am not sure who is the best 
person to sort of enforce that. But, I think that these are 
sort of two halves of the same whole.
    Ms. Kerrigan. I would only make a comment to your point 
about the folks in the agency. You are right. I don't think 
that they know the information that they are collecting, 
whether it is useful or not. But, I do believe, as you say, 
that having a single point of contact or an entity that is on 
the front line, that is listening to small business owners and 
somehow being able to catalog this type of stuff, will be very 
useful.
    And, you know, the best business leaders and CEOs in this 
country listen to their frontline people. That is where 
innovation comes from. That is where the best ideas come from.
    So, I think the single point of contact in terms of being 
able to get information from business owners, mark it down, 
even the questions: Why do we have to--when a business owner 
has a question, why do I have to fill out this certain piece of 
data? Well, that is something that the bureaucracy should also 
be asking, too.
    Why do they have to fill this out? Is this really 
important? Is this really useful? So, having that single point 
of contact serves that role.
    But also, I do think that you need to have consistency 
across agencies in terms of where this function is housed. And, 
I just keep pointing to the CIO, the Chief Information Officer, 
because they deal with these types of information collection 
issues. And, having it in house and giving it some structure, I 
do believe will help these single points of contact communicate 
with each other more. It will create a structure where they can 
more easily and more readily communicate and do outreach to the 
small business community.
    There is just some structure to it that we can get our 
hands around in terms of helping them identify ways to reduce, 
integrate, consolidate paperwork for the constituency that we 
serve.
    Mr. Gonzalez. Thank you.
    Mr. Ose. Thank you.
    OK, I missed the testimony that Mr. Langer put forward 
about the thing I want to followup on. I want to make sure that 
I understand.
    There is a form that is attached to the back of your 
testimony?
    Mr. Langer. Yes, the appendix.
    Mr. Ose. Is that the form that accompanied the lead TRI 
deal?
    Mr. Langer. No. This is a form that was given to a company 
that was involved in a Superfund remediation issue.
    Mr. Ose. They were a contractor.
    Mr. Langer. No. No. This was a company that was a 
potentially responsible party, a PRP, as it is called in 
Superfund parlance.
    I received the letter from one of our members. I got a 
letter along with the form this week. He has been having 
problems with the EPA. I won't even get into the specifics of 
his issue. But, in looking at the form, I noted how intrusive 
the questions were, the things that were requested. Things like 
how much a household spends on wood in the wintertime to heat 
their homes. And, as I said in my oral presentation, how much 
money a child makes during a summer vacation, working as a camp 
counselor and learning the values of a good economy. These are 
the sorts of questions that are being asked. And, it was 
pointed out to me by someone else, ``Hey there's no OMB number 
on this.'' So I did some checking, and as I said earlier, I had 
to make over a dozen phone calls to various EPA-associated 
agencies in order to get an answer on this form. I called 
Region 4, which is where the form originated; was told by----
    Mr. Ose. Region four is what part of the country?
    Mr. Langer. That's the South. This was someone in Atlanta, 
GA.
    Mr. Ose. So the office is based in Atlanta, GA?
    Mr. Langer. The EPA Region 4 Office based in Atlanta, GA. 
This particular form was being used for a site remediation, I 
believe, in Arkansas.
    Mr. Ose. OK.
    Mr. Langer. And I was told by the Associate Regional 
Counsel that she didn't know why the form didn't have an OMB 
number, but that it was used throughout the EPA.
    Mr. Ose. Did the Associate Regional Counsel say that the 
form was going to continue to be used?
    Mr. Langer. Yes.
    Mr. Ose. OK. What was her name?
    Mr. Langer. I believe her name is Kathleen West.
    Mr. Ose. I would like to confirm that, because I'd hate to 
have her put forward legal counsel that's not legal.
    Mr. Langer. Well, it is not. The thing is, this is not 
specific to Region 4. That was the point that I was going to 
make, is that this form is used throughout the EPA. And, that's 
what sort of set me on my journey of making over a dozen phone 
calls to the EPA, because I didn't know which office this came 
out of, and I eventually found out that it came out of the 
Office of Site Remediation and Enforcement, which is a division 
of the Office of Enforcement and Compliance Assurance.
    Mr. Ose. Where is that located?
    Mr. Langer. That is here, Washington, DC.
    Mr. Ose. OK. I mean this is quite a document. There 
certainly must be some pride of authorship. Were you able to 
track it down?
    Mr. Langer. I was not able to find the author. I was able 
to find someone in the office who was able to speak with me, 
Tracy Gibson.
    Mr. Ose. Were they able to cite any statutory basis for 
this form?
    Mr. Langer. I believe that it had to do with the various 
laws written under Superfund. You know, this form is used when 
people want to settle claims with the Environmental Protection 
Agency. They are asked to fill out this Ability-to-Pay Claim 
Form. I asked the person in the Office of Site Remediation 
Enforcement why this form did not have an OMB number, and she 
said quite plainly that it was her opinion that it didn't need 
an OMB number because this is not an information request that's 
governed by the relevant Code of Federal Regulations section--
--
    Mr. Ose. So we don't need OMB review and approval?
    Mr. Langer. We don't need to have it approved by anybody, 
because in their opinion, it is only sent out to individuals. 
It is not sent out to groups of individuals. And, at that 
point, I just----
    Mr. Ose. Individuals, as in citizens subject to the law of 
the United States?
    Mr. Langer. Yes. But as I said in my testimony, and I had 
actually written it out, but I edited my oral testimony because 
I was going long, the relevant CFR says quite plainly that, if 
it's a form that is--it doesn't matter if it's sent out to 
individuals, if it's sent out to multiple individuals, the same 
form requesting the same information, then it's governed, and 
then the PRA governs it.
    Mr. Ose. Well, it's my understanding that if the form is 
sent out containing the same questions to 10 or more persons, 
it is subject to the PRA and to the OMB review requirements.
    Mr. Langer. I agree with you 100 percent. That is my 
interpretation of the regs as well. I believe EPA is wrong.
    Mr. Ose. I just want to go through this form here.
    Mr. Langer. Please. I'll be happy to.
    Mr. Ose. First of all, we are going to enter the entire 
form into the record, if you haven't already done so.
    Mr. Langer. I have done so.
    Mr. Ose. Now, the statement is made under penalty of 
perjury. It asks for the name of the person filling it out, 
their signature, the name of their spouse, their address and 
their county of residence, and they have to date it. Then, it 
goes to the next page, and it asks for members of household. 
List the head of the household and all persons living with you. 
So for instance, let's say my mother-in-law stays with me. 
Would I have to list her on this?
    Mr. Langer. Yes.
    Mr. Ose. Would my minor children in third grade have to be 
listed on this?
    Mr. Langer. It is my belief, yes.
    Mr. Ose. For what purpose?
    Mr. Langer. Well, the EPA, I believe, believes that it is 
entitled to the wages of whomever is living in your household 
to be calculated into your ability to pay for Superfund 
remediation.
    Mr. Ose. Because they live with me?
    Mr. Langer. Yes.
    Mr. Ose. Then it asks for the employment. So potentially my 
mother-in-law, who is employed, in some unrelated activity 
would have to disclose on this form who her employer is. No, I 
would have to disclose on this form, or kick her out of my 
house, who her employer was, the length of her employment and 
her annual salary?
    Mr. Langer. Yes, sir. Yes. As I say, if your 14 or 15-year-
old son or daughter is working in summer camp and is making 
$700 for that summer, according to this form, you have to list 
that.
    Mr. Ose. OK. The next question asks for a list of all 
income earned by persons in the household. If members of the 
household other than the applicant and spouse earn income, 
please itemize on separate pages. Then, it has a list--wages, 
salary, sales commission, investment income, meaning interest 
dividends, capital gains, net business income, rental income, 
retirement income, including pension and Social Security, child 
support, alimony, other income, please itemize. Then it has 
columns, applicant, spouse. Then to the right of the applicant 
and spouse, it has period of payment, check one: weekly, 
monthly, quarterly, yearly. Now, apparently, I would have to 
obtain from my mother-in-law, a break down of everything that 
she's receiving in income, simply because she resides with me. 
Is that the way you read this form?
    Mr. Langer. Yes. That's the way I read the form.
    Mr. Ose. Ms. Kerrigan are you familiar with this form?
    Ms. Kerrigan. I am not, no.
    Mr. Ose. OK.
    Mr. Langer. Again, I wasn't familiar with this form until 
earlier this week, until one of our members notified me about 
it.
    Mr. Ose. OK. Then we get to page 3. Current living 
expenses. Please list personal living expenses which were 
typical during the last year and indicate if any of these 
values are likely to change significantly in the current year. 
Please do not include business expenses. If you are the owner 
of an operating business, please attach any available financial 
statements. Living expenses: rent, home maintenance, auto, fuel 
maintenance, other transportation utilities, such as fuel, 
electricity, water sewer, telephone, and, under fuel, if it's 
gas, oil, fire wood, propane, food, clothing, personal care, 
medical costs. So this form requires the person filling it out 
to disclose under the EPA's requirement their medical expenses?
    Mr. Langer. Yes.
    Mr. Ose. Wow.
    Mr. Langer. Now, I don't know if that implicates HIPPA at 
all, but that's something to consider.
    Mr. Ose. Well, it does occur to me to ask about that since 
that's over on another committee I sit on. Then it goes to 
insurance, household insurance, life insurance, automobile 
insurance, medical insurance. Now, presumably the collection of 
these data have some connection to the EPA's interests in the 
Superfund site and the recovery of cost. What would medical 
insurance expenses have to do with that?
    Mr. Langer. Well, I think EPA wants to be able to squeeze 
whatever dollars and cents they can out of you if they believe 
you're a potentially responsible party. See they want to know 
exactly how much you can pay, and then they are going, to put 
it indelicately, to force you to cough it up.
    Mr. Ose. Well, let's just step through that. So apparently, 
you would list a number on here and EPA would in its wisdom, 
under this scenario, make a judgment as to whether or not you 
were buying too much medical insurance for your family. So, 
they would make some determination that, well, you don't need 
quite that much. You need a policy of something less?
    Mr. Langer. Yes.
    Mr. Ose. And, you need to reduce your expenditures here? 
And, the same for automobile insurance without regard to your 
driving record and your life insurance and whether or not you 
have adequate coverage for your household, property and 
casualty exposures. The next line is debt payments: mortgage 
payments, car payments, credit card payments, educational loan 
payments, and other. So apparently, the EPA is maneuvering 
itself into the position of collecting information and then 
deciding that you're paying too much of a mortgage payment?
    Mr. Langer. Well, again, I don't know if they analyze the 
end result of what you're paying out and they figure that if 
you make $50,000 and you spend $49,999, that they're going to 
be entitled to that last dollar, or if they're not, they're 
going to make you reduce your expenses. In other words, I don't 
know offhand. But that's one way to look at it, I suppose.
    Mr. Ose. OK. Then it goes down here to taxes, meaning 
property taxes, Federal income taxes, State income taxes, 
Social Security income taxes. Is the EPA going to tell me I'm 
paying too much in taxes?
    Mr. Langer. Possibly.
    Mr. Ose. Oh, that'd be sweet. Then it goes to other 
expenses, child care, current school tuition expenses, legal 
and professional services, other. Now, I thought information 
including compensation to your attorney was a privileged item?
    Mr. Langer. That I don't know. I can't answer that 
question.
    Mr. Ose. All right.
    Mr. Langer. I certainly know that the filling out of this 
form, if you're anybody involved in Superfund liability, 
certainly, your legal expenses are going to go up as a result 
of this form.
    Mr. Ose. This is fascinating to me. I've got another five 
pages I'd like to go through. The substance of this thing, I 
mean this is a very intrusive----
    Mr. Langer. Chairman Ose, if I could just turn your 
attention, just really quickly, to page 6, item No. 9----
    Mr. Ose. Page 6, personal property.
    Mr. Langer. Household goods and furniture, jewelry, art 
antiques collections, precious metals, etc., only list items 
with a value greater than $500.
    Mr. Ose. Amazing. So presumably, I could have received a 
watch that my great grandfather gave to his son and then he 
gave it to his son and then he gave it to me, and presumably, 
it would be relatively old, it'd be an antique, and, under the 
scenario that's apparently represented by this form, EPA would 
think that is something subject to its attachment?
    Mr. Langer. Yes.
    Mr. Ose. Now, let me ask the question. This is all 
fascinating, but I don't see any OMB number on this.
    Mr. Langer. No. There is not one.
    Mr. Ose. Do you know anybody who has filled this out?
    Mr. Langer. Yes. I know that at least one of my members has 
filled it out. I don't know offhand of anybody else.
    Mr. Ose. You know, without an OMB number, you heard Dr. 
Graham, I asked this question straight out today. No OMB 
number; it's not binding.
    Mr. Langer. Yes.
    Mr. Ose. He said that is correct.
    Mr. Langer. And, I think EPA's position would be in the end 
that, if you wanted to settle this, that they are requiring you 
to fill it out. I don't----
    Mr. Ose. That's not what the law says.
    Mr. Langer. I understand that.
    Mr. Ose. The law says that's not part of the process.
    Mr. Langer. Yes.
    Mr. Ose. But, you don't know who came up with this form--I 
mean this is quite a thing.
    Mr. Langer. I don't know who the author is. I just know the 
office that it's issued from. I know I spoke to Tracy Gibson 
over at the Office of Site Remediation.
    Mr. Ose. We do want to followup and have them cite the 
statute and what have you that underlies EPA's ability to 
collect this information.
    Now, Ms. Kerrigan, over at the Small Business Survival 
Committee, your members basically struggle, rather 
significantly with paperwork and all this other stuff that gets 
dumped on them. Have your members seen any meaningful 
reductions in the paperwork burden placed on them by the 
Federal Government during the Bush administration?
    Ms. Kerrigan. I would say probably not. There has been 
small progress made over at the IRS in terms of some of the 
schedules that they had originally required, that they've 
gotten rid of some of those, Schedule L, Schedule M, Schedule 
F, and my understanding is in looking at a press release from 
the IRS just this week, that businesses continue to still file 
Schedule F, which is about 100,000 hours in wasted time from a 
business perspective.
    Mr. Ose. Before we leave that point, is it accurate to say 
that the requirement of those forms wasn't eliminated, but that 
the threshold above which people were subject to the reporting 
was actually raised?
    Ms. Kerrigan. Yes.
    Mr. Ose. So there were people who were within the 
threshold, then the threshold was raised and they were taken 
out?
    Ms. Kerrigan. Right. Right.
    Mr. Ose. OK.
    Ms. Kerrigan. I guess at SBSC and being with the group now 
for 10 years, how we've come to measure progress has been, are 
we seeing any moderation, and it's unfortunate, and we have to 
change how we think, and that's why we are very hopeful about 
this legislation. Has there been an increase in the regulatory 
and the paperwork burden? Thankfully, there's some pieces of 
legislation, for example, the Ergonomics piece that was 
rejected and the Office of Advocacy over at the SBA is doing a 
pretty decent job, a really good job, at letting the agencies 
know what their requirements are under SBREFA, the Small 
Business Regulatory Enforcement Fairness Act. But, in large 
part, and I can't really say for sure that perhaps through some 
of these electronic or E-Gov initiatives perhaps there has been 
some type of burden reduction in terms of more efficiency. I 
don't know. By and large, when I talked to a lot of my members 
this week and last week informing them that I would be up on 
the Hill on this issue, and asked do they have any ideas, on 
working on paperwork reduction, they laughed. So that is sort 
of the anecdotal information that I can give you. There really 
has not been a serious reduction in paperwork, and, under the 
current administration, I still think we're hopeful, and I 
think oversight by the Congress, I think this hearing today, we 
will begin to see some action over at the OMB. I think we're 
going to get the single point of contact and we're hopeful.
    Mr. Ose. Well, at the single-point-of-contact level, I can 
tell you we were discussing this when Mr. Schrock was asking 
questions, and you know one of the great things about summer in 
America is there are a lot of young people who want to work on 
Capitol Hill. I have lots of people who want to work in my 
subcommittee for obvious reasons. They share our concerns about 
regulatory intrusion and the like. We have decided that we are 
just going to have a daily drill. That one of the things our 
interns are going to do, is we are going to go at these 
agencies one by one, and they're going to call on my behalf 
saying: This is so and so; I'm an intern for Congressman Ose. 
With whom may I speak regarding the single point of contact for 
Paperwork Reduction? And we are just going to go one by one, 
day after day after day after day after day after day.
    Mr. Langer. I don't know if there are enough days in the 
summer for that, Congressman.
    Mr. Ose. I've got a lot of interns. I've got a lot of 
interns. So now----
    Ms. Kerrigan. To answer your question, from a bottom line 
perspective, a lot more work needs to be done, and we know 
that, so----
    Mr. Ose. Now, one other question, that begs the question--I 
mean, I just feel like you have teed this baby up. Where would 
you suggest OMB look for those opportunities for paperwork 
reduction to benefit small businesses?
    Ms. Kerrigan. Well, certainly, if you want to reduce the 
paperwork, you go where the paperwork is, and 80 percent of 
that comes out of the IRS. So I still believe there is a lot of 
opportunity for paperwork reduction at the IRS. Another place 
where they could look, where I think there's a lot of 
opportunity, is at the GSA in terms of the procurement process. 
A lot of small businesses just don't want to do business with 
the government. They want to, but the paperwork in terms of 
getting on the GSA schedule in terms of solicitation, is a 
major barrier to small businesses competing for government 
contracts. And, we need small businesses to get into that in 
order to benefit the taxpayers to the best extent that we can.
    Mr. Ose. Well, the GSA is on the chart we have over there--
maybe we'll just make them the first call. The point of contact 
on that form outlined in turquoise, there is no point of 
contact.
    Ms. Kerrigan. And, we need a point of contact. There is a 
lot of opportunity at the GSA, at the IRS. I think, you know 
certainly, as Andrew pointed out, from this form there's 
opportunity at the EPA immediately.
    Mr. Langer. Absolutely.
    Ms. Kerrigan. But, in all the agencies, there is an 
opportunity. If you want to go where the majority of the 
paperwork comes from, I mean it's generated at the IRS, and I 
think there's a huge opportunity to go there. In fact, 
Congressman Ose, I think it makes sense for the Office of 
Management and Budget to collaborate with the Taxpayer Advocacy 
Office at the IRS.
    I am 1 of 100 citizens that serves on the Taxpayer Advocacy 
Panel who were appointed by the Treasury Department, and we 
listen to taxpayers every day. There's ideas coming in every 
day. There's questions that come in every day. Why do we have 
to do this? Why do we have to--basically, the questions are the 
type of questions that we need to be sending over to the IRS, 
the information collection people that they ask. In terms of 
reviewing the forms and the paperwork--which small businesses 
are on the receiving end.
    Mr. Ose. Before we leave that point, this is an appointment 
from the executive branch to serve on this 100-person group?
    Ms. Kerrigan. Yes.
    Mr. Ose. Would it be appropriate to ask you to forward to 
us the most meritorious of those suggestions, and let us work 
it from the legislative side?
    Ms. Kerrigan. It may be, yes.
    Mr. Ose. I would appreciate a discussion to that effect 
within this advisory panel, and hopefully, we can resolve that. 
That would be great.
    Ms. Kerrigan. We have our regional working groups in terms 
of listening to the grassroots in Virginia. I'm a resident of 
Virginia, and we also have our national working groups. I 
happen to serve on the small business self-employed compliance 
area because they want to bring more small businesses into 
compliance. How do we reach out to them? Obviously, this makes 
sense. And, there's also other working groups. There may be a 
working group that you may want to suggest or the OMB may want 
to suggest to Nina Olson, the Taxpayer Advocate, on Paperwork 
Reduction. I think that they would get a lot of good ideas from 
around the country, from the tax-paying public, as well as 
practitioners, because there are practitioners that serve on 
this advisory panel.
    Mr. Ose. From sitting here right now, are there specific 
regulations or agencies that you can identify that we 
specifically ought to look at?
    Ms. Kerrigan. The GSA. I keep thinking about that. Because 
I know you had a hearing back in April, I believe, where a 
small business member, a woman business owner just talked about 
her experiences in terms of getting on the GSA schedule. She 
did business with the Ohio government. Now, the State 
governments are requiring that in many cases they also get on 
the GSA schedule. And, she walked through the hundreds and 
hundreds of pages that she had to go through, the time, the 
expense just to read that thing and do it accurately. I just 
don't think doing business with the Federal Government should 
be that burdensome and difficult. I just, I think there's a lot 
of room for modernization and streamlining over there. I think 
it has just a lot of potential in terms of specific 
regulations. I guess we can go back into our files for members 
and stuff that we have sent over to Congress and to the OMB and 
to other agencies and provide you with that type of 
information. And, I'd be more than happy to--we want to work 
with on you this because it's important to our membership.
    Mr. Schrock. Mr. Schrock has no further questions, but we 
haven't resolved this yet.
    Mr. Schrock. I am sitting here figuring out how many drop-
ins I'm going to do in the next couple of weeks, and I think 
I'm going to do that, you know. You look here, you talk about 
GSA. They're MIA, they're missing in action. No number. I mean 
it just makes no sense. And, you know, what I'd like to do is 
go to the IRS and have the security guard say: You don't have 
an appointment; you can't get in. God forbid if they do. But, I 
mean, we need to--that would show me what the average citizen, 
the average business person, that is the problem they're 
having. They can't get in either, front door or on the phone. 
And, I think, if we do that a couple of times and the word gets 
around, that character from Virginia is dropping in and asking 
some tough questions, they might get their act together and try 
to do something. I mean nothing else has worked. Why not?
    Ms. Kerrigan. I just don't see why the--a single list, 
whether that's in a hard copy catalog----
    Mr. Schrock. Why is that so hard?
    Ms. Kerrigan [continuing]. Or a portal cannot be developed 
that lets businesses know their checklists of regulations that 
apply to them and then the compliance assistance that can be 
available. That has to be done. I mean, current businesses want 
that. There's 3 to 4 million new businesses that startup every 
year that are looking for that type of information. If we want 
to create a culture of compliance, we've got to provide 
businesses with the tools to comply.
    Mr. Schrock. I look at this list. Actually, it's in color 
here, the one over there, I wonder how they got these names and 
these numbers? Did OMB send out a letter to each agency and 
say, send me the name and the number if somebody--so they said, 
let's just throw this guy to the wolves and here's a number? 
Or, did OMB talk to a living breathing being and say, yes, this 
is the person and here they are?
    Ms. Kerrigan. Congressman, in that process, I really think 
the OMB has to be more deliberate, in terms of working with the 
agencies, of who that point of contact is. It has to be 
consistent across agencies. I think if you are going to make 
this work, if small businesses are going to get consistent 
regulatory information from the agencies, and I'll say it 
again. That the CIO Office, I think would be a great place to 
house this because of their information collection 
responsibilities. The only thing that they have to be aware of 
and that they have to sort of build in to how they run that 
operation is the whole concept of public burden that we are 
doing this for a purpose. As opposed to information, just 
information management.
    Mr. Schrock. The OMB has just got to be dogged and 
determined and very aggressive, and they're just not doing 
that. You know, it's incumbent on people like Mr. Ose and me to 
do that, and we simply have to do it. We simply can't keep 
having hearings and hearings and hearings and have nothing 
done. Somebody's feet need to be held to the fire because if we 
don't, then they need to be replaced.
    Ms. Kerrigan. In looking at that list, as I said, the 
consistency, I'm concerned that it's the OSDBU, the Office of 
Small and Disadvantaged Business Utilization, in one office 
where they largely deal with procurement issues and contract 
issues, and then in others it's the CIO. It's very haphazardly 
done. So, as I said, there has to be some structure to that, 
some thought behind it, if you're going to make this whole 
thing work.
    Mr. Schrock. It is OSDBU at HUD?
    Ms. Kerrigan. OK. All right.
    Mr. Schrock. Thank you.
    Mr. Ose. Mr. Langer.
    Mr. Langer. Yes, sir.
    Mr. Ose. Do you have any suggestions where OMB might look 
for significant opportunities for paperwork reduction?
    Mr. Langer. Well, I can't answer that question any better 
than Karen Kerrigan just did.
    I mean the fact is with IRS, again, accounting for 80 
percent of the paperwork burden, that's really where we need to 
go. You know, I think having two full-time equivalents there is 
a good first step. It's something that we have talked about in 
our shop for quite some time about finding a way to get around 
OMB's reluctance to take a deep look at how to improve things 
over at the IRS.
    Again, ditto on the GSA Schedule issue. I handled the 
contracting panel at NFIB's small business summit last year, 
and that was the single issue that our members brought to me, 
the onerous burden they face every time they have to do 
paperwork to figure out if they can just do business with the 
Federal Government itself.
    In terms of specific regulatory schemes, I can only stress 
that looking at paperwork issues, at places like the EPA, those 
regulations that deal entirely with the filling out of paper, 
things having to do not only with the Toxics Release inventory 
but examining duplicative and conflicting regulatory schemes 
within the Clean Water Act and the Safe Drinking Water Act and 
things like that. And again, it's not one single reg that does 
it. It really is the combined regulatory state. But the biggest 
offender of that is the IRS to say the least.
    Mr. Ose. Let me just followup. This form that we just 
walked through from the EPA, which hasn't been approved by 
anybody, it's just kind of out there, it's not been legally 
approved?
    Mr. Langer. Yes.
    Mr. Ose. Now, if you all don't fill it out, what happens?
    Mr. Langer. I think that, if you don't fill it out, from 
what I understand from my conversations with the EPA, they will 
not settle a case with you. They will not settle your Superfund 
claim payments.
    Mr. Ose. So they break the law by putting out a form that 
hasn't been approved. And, I'm not saying the forms not good. 
I'm just saying it hasn't been approved; that the law requires 
it to be approved before it goes out. They break the law, send 
the form out, put a burden on the taxpayer or consumer or the 
business or the individual or the mother-in-law or whatever, 
according to the form, and then, if you don't fill it out, 
you're given, you know, chapter and verse, they say, sorry.
    Mr. Langer. Yes. ``We're not going to settle with you,'' 
and then I assume that they proceed with an enforcement action 
at that point. I'm not sure. I'm not an environmental lawyer, 
I'm not a Superfund lawyer. So it's an offhand guess. If I 
could just touch on something that Chairman Schrock mentioned, 
which is the issue of business compliance and gateways. A lot 
of what OMB has talked about is this Business Compliance One-
Stop, which is a project whose idea I do support. I've sat in 
some meetings on it and have been pleased with the concept, and 
more to the point, pleased with the personnel from the various 
agencies who are participating in the effort who really 
understand that there's a huge burden out there for small 
businesses.
    I watched as a woman from the Department of Transportation, 
a career civil servant, stood up and asked, ``why is there this 
burden?'' I mean it was an inappropriate forum in which to 
raise that question, but I pulled her aside afterwards and 
said, ``thank you, somebody in the government understands 
this.'' The most major concern that I have, is the time line. 
Waiting 5 years for it is too long. And, my big fear is that, 
once we get it into place, that it will become mandatory. The 
fact is, yes, right now, we have 80 percent of businesses, 
small businesses that are on the Web, that are using computers 
all the time. But, there will always be small businesses that 
are not on the computer and that don't have time to go down to 
the library to use the computer or won't know how to use it 
period. So, we have to stay away from mandating using 
electronic filing. We have to give businesses the opportunity 
to do it themselves, to have a choice in the matter. I do 
think, in the interim, that somebody at OMB or wherever has to 
start coming up with a central repository of the regulatory 
burden enumerating exactly what is required of the business. We 
can't wait 5 years for that.
    Mr. Ose. Mr. Schrock.
    Mr. Schrock. I asked Dr. Graham a question, and I'm not 
sure I got the answer to it. I asked him when agencies are 
creating regulations or all this paperwork and these forms, do 
they bring small businesses in from various sectors to look at 
this stuff, and I don't know what he said. My guess is I don't 
know because they probably don't do it.
    Mr. Langer. They do to an extent. Some of them do some of 
the time.
    You know, I'd like to point to the new Acting Administrator 
of the EPA, Marianne L. Horinko, who has been very good at 
engaging in outreach to both, frankly, both environmental 
groups and the regulated community on issues. The fact is that 
the best agency for advocating within the Federal Government 
has been the Office of Advocacy at SBA. NFIB itself has a 
research foundation, and we run econometric models on the cost 
of regulations. We have a hard time figuring out all the inputs 
for it, but in a lot of cases, like with the increased postal 
rates last year, we are able to spit out a final cost to small 
business. I think we're the only business group which has that 
sort of capability. Chief Counsel Sullivan's gone on the record 
in terms of talking about how he's put various regional 
advocates in--using them to put the regulated, community-
specific members of the regulated community in touch with 
regulatory agencies. So, for example, on the Off-Road Diesel 
Rule, Chief Counsel Sullivan's office put a farmer in touch 
with the EPA and the farmer point blank told them that unless 
there--I guess it was a John Deere engineer who told them that, 
unless they changed the actual hood configuration of a tractor, 
they couldn't fit the clean air equipment that was necessary on 
there. And, the fact is, nobody from EPA even thought about 
what could go under the hood of a tractor engine. But, Chief 
Counsel Sullivan is, as someone else has mentioned, he is 
dogged, he is ravenous. If we have another Chief Counsel who 
wasn't so ravenous of getting small businesses involved, then 
these sorts of things wouldn't happen.
    Mr. Schrock. What was the bottom line for the Deere thing?
    Mr. Langer. I believe that they're working together to try 
to get the regulation changed, so that they could fit it under 
the engine. I think that was very helpful to both parties in 
the end. There needs to be more of that.
    Mr. Schrock. Simply things like that.
    Mr. Langer. Absolutely. And, that's just it, picking up the 
phone and calling. I have done the advocating myself because I 
enter into a lot of discussions with different groups. I just 
lectured at the Council on Excellence in Government about how 
we can create a better compliance-assistance climate.
    I gave a similar speech to the EPA Small Business Summit. 
The fact is, career civil servants are not small business 
owners, and small business owners are not career civil 
servants. They have two very different mindsets out there. 
Frankly, you're right, the people in the government don't 
understand how things are done. I've had ideas about how to put 
them in the mindset and don't want to take up the committee's 
time with that. I'd be happy to talk to you at length at some 
other point. But, I've got ideas on how we can sort of bridge 
that gap by putting them in the shoes of small businesses. It's 
been suggested for instance that maybe you send out a career 
civil servant to shadow a small business.
    But, as far as I'm concerned, a bureaucrat showing up at a 
small business saying, ``I'm the Federal Government and I'm 
here to help,'' you know the small business owner's going to 
look at them, and say thanks, but no thanks. But, there are 
other ways to do it without that sort of intrusiveness, and you 
sort of give them the ideas as to what a small business owner 
goes through, figuring out a single point of contact, where to 
go for regulatory information, how to comply with a reg.
    Ms. Kerrigan. Congressman Schrock, if I can just quickly 
add to that. I think, even in Dr. Graham's report, he noted 
that really not enough outreach is being done to the small 
business community. I think he spoke in terms of reviewing 
these forms. I know this stuff comes up on the Federal 
Register, and we don't even know when it comes up to comment on 
it. At that point, when you comment on it, it's sort of too 
late because the process has already taken place.
    So, I think there needs to be more outreach to the small 
business community and small businesses. It's funny I was 
reading the transcript of the small business meeting that the 
Office of Advocacy had convened in terms of paperwork leading 
up to the Task Force Reduction Report. I forgot who it was that 
was speaking, but she had said she went to this meeting 
convened by the IRS because they were reviewing equipment 
depreciation schedules for farmers. And, it was, she said, it 
was very interesting. Whe learned a lot about equipment 
depreciation for farmers. She said, there were accountants in 
that room. There were bureaucrats in that room. But, guess who 
wasn't in that room? Farmers. So you know, truly, if you're 
going to make a difference, small businesses want to be, have 
to be a part of the process, and I would argue they want to be 
part of the solution.
    Mr. Schrock. Outreach needs to be a required part of every 
agency's regulatory branch, their department because how can 
they possibly know how things are going to impact like the 
Deere situation. That's a great example. How would they ever 
know?
    Ms. Kerrigan. I agree.
    Mr. Schrock. I really appreciate you all coming here and 
I've had an opportunity to meet with you all before, and I 
appreciate what you do. Sometimes you probably feel like you're 
whistling in the wind. Sometimes I feel like we don't listen 
well enough. What folks like Doug Ose and Ed Schrock need to do 
is put people's feet to the fire, and, if we have to, I hate to 
embarrass people, but sometimes that's the only way to get 
their attention and do sometimes outrageous things to get their 
attention like, you know, if I walked up to the door of an 
agency. Somehow we've got to get this thing moving because it's 
like grabbing air. What part of it do you grab to make a 
difference?
    I understand Dr. Graham's frustrations. He took over an 
agency that's just a big mess. But, somehow he's got to put, 
he's got to get in there. He's got to get on the phone himself 
and call the Secretary of the various agencies and say, I'm 
sick and tired of waiting for your department to give me a 
name. And, if the Secretary gets that message, he's not going 
to like it because he's going to be angry at his own people, 
not Dr. Graham, about why aren't you responding to this guy.
    Maybe it takes a little more one-on-one-type relationships 
to make that happen. To send letters or emails or memos, people 
ignore those. I do. You know, and I mean, we have just got to 
get our hands around this now, and you all have got to keep 
pounding on people like Doug and me just to make sure we get 
this job done. It's not easy. I'm impatient. I'm old. I'm not 
going to be here a long time, and I want to see some of this 
done before I leave here because, if we don't do it now, when? 
We can talk and study. Whenever people don't know the answer to 
something, good point; we'll study it. That's a cop-out for I 
don't have a clue. We've got to change that. So, I appreciate 
what you do and that you have been here. Please be in touch 
with us because we want to help solve this thing.
    Ms. Kerrigan. Well, thank you. I would only add that you 
can ignore memos, but when something is the law, you know, you 
can't ignore that. I mean, what if it was a small business 
person sitting here in front of you or in front of an IRS 
committee or talking to an EPA enforcement person saying maybe 
I'll get back to you. I don't know when I'll get back, maybe 6 
months I'll be able to do that.
    Mr. Schrock. They'd nail them.
    Ms. Kerrigan. It would be unacceptable.
    Mr. Schrock. Yes, it would be unacceptable.
    Ms. Kerrigan. So, I just think that it is the law, and 
certainly we appreciate your help and your tenacity in 
reminding these folks that it is the law and you're serious 
about it, because it really it is going to be, I think, the 
only thing that's going to advance the ball is if you stay 
involved and engaged.
    So thank you, and thank you, Chairman Ose.
    Mr. Schrock. Thank you for being here.
    Mr. Ose. Thank you, Mr. Schrock. I want to thank our 
witnesses for appearing today. This is highly educational, 
highly illustrative of the challenges that small business 
across this country faces.
    We heard first from Chairman Manzullo, and we heard from 
Dr. Graham. You folks have kind of put the icing on the cake. 
What's clear from everybody's testimony is that we have not 
been successful at implementing this law. There simply is not 
any way we can say we've been successful in implementing a 
single point of contact in accordance with this law, this law, 
did I say it was a law? It's a law that has been passed by the 
legislative branch and signed by the executive branch. It is 
not subject to debate. It is a law.
    Now, in that regard, one of the things I always like to do 
is measure things, measure levels of success or lack of success 
and the like. And, I learned this from Chairman Horn when he 
was here. He had one of the more creative things that he did. 
He actually, as we all experienced in K through 12 and maybe in 
college,
he provided the agencies with grades. So we have set down over 
the last couple of days, having received the testimony from 
folks and the like, and we have thought about what kind of 
grades, so if the clerk would flip the card over.
    [The information referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T0867.063
    
    Mr. Ose. We haven't been very pleased. We believe that the 
agencies by and large with the degree of missing points of 
contact or the lack of contact points, we think that the 
agencies and departments have earned a D on that. As it relates 
to compliance assistance resources for each agency, that is 
someone calls in and says, I need your help with this, given 
the feedback we have had and the testimony you have all 
entered, we've been so impressed by that we've decided to give 
those folks a D also. In terms of the Task Force Report, that 
was due on or before June 28, in terms of its responsiveness to 
the congressional intent of the legislation in the first place, 
we're wholly unsatisfied and I've given that an F. And, in 
terms of the reduction in paperwork hours for small business 
across this country, in fact, we have had no reduction in 
paperwork hours for small business across this country. We have 
failed, and failure means an F.
    So, if you look at those, you've got a D, a D, an F, and an 
F. Now, I once tried to explain to my dad that an F was a one-
legged A, and that didn't fly. At the bottom there, you've got 
an overall grade. That one-legged A at the bottom of that chart 
over there isn't flying very well with me anymore than my 
explanation to my old man was. So far on this legislation, on 
the implementation of this law, we've got an F. Our challenge 
before us is to fix that.
    As I said earlier, I have a lot of interns. We're going to 
put them to work. I thank the witnesses for their testimony. I 
thank the chairman from the Small Business Subcommittee on 
Regulation and the like for joining us today. I look forward to 
continuing the examination of these issues in the near future. 
This hearing is adjourned.
    [Whereupon, at 2:20 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
follows:]

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