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



                                                   S. Hrg. 102-000 deg.
 
 RED TAPE REDUCTION: IMPROVING THE COMPETITIVENESS OF AMERICA'S SMALL 
                             MANUFACTURERS
=======================================================================



                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                      WASHINGTON, DC, MAY 19, 2004

                               __________

                           Serial No. 108-65

                               __________

         Printed for the use of the Committee on Small Business


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




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                      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           ENI FALEOMAVAEGA, American Samoa
SAM GRAVES, Missouri                 DONNA CHRISTENSEN, Virgin Islands
EDWARD SCHROCK, Virginia             DANNY DAVIS, Illinois
TODD AKIN, Missouri                  GRACE NAPOLITANO, California
SHELLEY MOORE CAPITO, West Virginia  ANIBAL ACEVEDO-VILA, Puerto Rico
BILL SHUSTER, Pennsylvania           ED CASE, Hawaii
MARILYN MUSGRAVE, Colorado           MADELEINE BORDALLO, Guam
TRENT FRANKS, Arizona                DENISE MAJETTE, Georgia
JIM GERLACH, Pennsylvania            JIM MARSHALL, Georgia
JEB BRADLEY, New Hampshire           MICHAEL MICHAUD, Maine
BOB BEAUPREZ, Colorado               LINDA SANCHEZ, California
CHRIS CHOCOLA, Indiana               BRAD MILLER, North Carolina
STEVE KING, Iowa                     [VACANCY]
THADDEUS McCOTTER, Michigan

                  J. Matthew Szymanski, Chief of Staff
                     Phil Eskeland, Policy Director
                  Michael Day, Minority Staff Director

                                  (ii)















                            C O N T E N T S

                              ----------                              

                               Witnesses

                                                                   Page
Graham, Hon. John, Ph.D, Administrator, Office of Information and 
  Regulatory Affairs, Office of Management and Budget............     4
Arnett, Mr. John, Government Affairs Counsel, Copper & Brass 
  Fabricators Council, Inc.......................................    14
Mason, Mr. B.J., President, Mid-Alantic Finishing................    16
Bopp, Mr. Andrew, Director of Public Affairs, Society of Glass 
  and Ceramic Decorators.........................................    19

                                Appendix

Opening statements:
    Manzullo, Hon. Donald A......................................    30
    Velazquez, Hon. Nydia........................................    33
    Tiahrt, Hon. Todd............................................    35
Prepared statements:
    Graham, Hon. John, Ph.D, Administrator, Office of Information 
      and Regulatory Affairs, Office of Management and Budget....    39
    Arnett, Mr. John, Government Affairs Counsel, Copper & Brass 
      Fabricators Council, Inc...................................    42
    Mason, Mr. B.J., President, Mid-Alantic Finishing............    54
    Bopp, Mr. Andrew, Director of Public Affairs, Society of 
      Glass and Ceramic Decorators...............................    61

                                 (iii)















 RED TAPE REDUCTION: IMPROVING THE COMPETITIVENESS OF AMERICA'S SMALL 
                             MANUFACTURERS

                              ----------                              


                        WEDNESDAY, MAY 19, 2004

                  House of Representatives,
                                Committee on Small Business
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 2:34 p.m. in Room 
2360, Rayburn House Office Building, Hon. Donald Manzullo 
[Chairman of the Committee] presiding.
    Present: Representatives Manzullo, Chabot, Velazquez, 
Christensen and Tiahrt.
    Chairman Manzullo. Good afternoon. We had a series of five 
votes and so we are running late. We were advised that it will 
be at least three hours before the next series of votes and we 
should be out of here way before then.
    Good afternoon. I want to especially welcome Dr. John 
Graham, the Administrator of the Office of Information and 
Regulatory Affairs or OIRA for being here to discuss the review 
of manufacturing regulations. The initiative addresses an 
often-lamented but rarely examined issue--the regulatory 
burdens facing America's manufacturers and, in particular, its 
small manufacturers.
    Recent economic indicators demonstrate that the President's 
economic policies are having a positive impact on 
manufacturing. Production is up and firms have even begun to 
hire new workers. But more must be done to ensure that the seed 
of recovery in America's small manufacturers takes firm hold 
and grows long. To do that, America's manufacturers must 
maintain their edge in productivity and competitiveness against 
firms throughout the world.
    Yet, that remains markedly difficult when the regulatory 
regime is far more complex and daunting than those in many 
other parts of the world. The approximately 22 linear fee of 
the Code of Federal Regulations is just the starting point for 
regulatory compliance. Agencies then issue hundreds of 
thousands of pages of supposedly ``non-mandatory'' guidance 
documents. Further complicating the situation is the continued 
updating and issuance of new regulations and guidance. And 
while not all regulations and guidance documents apply to all 
manufacturers or in all situations, deciphering this hoard of 
information is more than a full-time job. For small businesses, 
this is an arduous task where reaching the mountaintop of 
compliance is met with an avalanche that puts these small 
businesses back at the base of the mountain requiring them to 
start the process again.
    No person is suggesting a return to the Dickensian 
nightmare of unending labor in dark factories amid soot-induced 
nights at noontime and fetid pools of water surrounding 
unceasing dilapidated tenements. That is almost poetic, isn't 
it? Pretty good.
    The question is not whether some regulation is necessary to 
maintain--We have got to put some, you know, I mean we just 
read these terse words all the time. It is important to get 
this out.
    The question is not whether some regulation is necessary to 
maintain the standard of living and life that we enjoy in this 
country. Rather the question is whether the marginal gains of 
regulation come at too high a price. To anyone who has followed 
the activities of this Committee, it comes as no surprise that 
the high price may be the loss of America's small business 
industrial base. Without a healthy small business industrial 
base, this country will not be able to provide the high quality 
jobs that allow people to buy homes, cars, eat in restaurants, 
travel and purchase consumer goods that are part and parcel of 
our standard of living. Dr. Christensen should notice I threw 
in the world ``travel,'' slightly important to the Virgin 
Islands, isn't it?
    More importantly, without the underpinnings of a sound 
manufacturing economy, it is highly unlikely that America will 
have the resources to maintain the health of its people and 
environment that it currently enjoys.
    America's small manufacturers should not have to fight 
their own government along with foreign competitors and foreign 
governments. They can succeed if they only have to cope with 
the market and not the predilections of federal regulatory 
agencies.
    I will recognize now the ranking member of the full 
Committee, the distinguished young lady from New York for her 
opening statement.
    [Chairman Manzullo's statement may be found in the 
appendix.]
    Ms. Velazquez. Thank you, Mr. Chairman.
    Small businesses, our main job creator, face a significant 
number of challenges today, many more than those of their 
corporate counterparts. And one of the biggest barriers that 
they have to overcome is federal regulations. These are placing 
a heavy burden on our nation's small enterprises, particularly 
those in the manufacturing sector.
    A recent study reported that for firms employing fewer than 
20 employees the annual regulatory burden is nearly $6,975 per 
employee, almost 60 percent more than that of firms with more 
than 500 employees. This is not right and something needs to be 
done to change it.
    Although the Bush Administration has acknowledged this 
unfairness and promised to help, nothing has been done. While 
republicans claim that reducing the regulatory burden is a 
priority, the Bush Administration holds the record for the 
largest increase in federal paperwork in a single year. This 
Committee is very aware of these regulatory burdens. We have 
held several hearings on this topic. And I was fortunate to be 
able to sit on Congressman Schrock's Subcommittee hearings on 
this very issue.
    In those hearings we learned that small businesses do not 
have the proper points of contact within these agencies. And in 
addition, a number of federal agencies are not complying with 
current laws which intend to reduce the regulatory burden that 
oftentimes affect these small firms. Through the convergence of 
this failure to comply with current law and the sudden 
explosion of paperwork, the Bush Administration has managed to 
worsen the situation for small firms. This has created a paper 
storm for our nation's small businesses, leaving them submerged 
in paperwork and seeing no assistance from the federal 
government.
    Today we will look at the effects that the paperwork burden 
is having on our economy, particularly within the manufacturing 
sector. This sector cannot afford to be overwhelmed and 
burdened by paperwork and regulations. Employment within the 
manufacturing sector remains at a 53 year low with 2.7 million 
manufacturing jobs lost over the past three years. It is 
unclear at this point just how much of an impact these 
increasing paperwork requirements are having on our nation's 
small manufacturers. But clearly given the tenuous state of 
this sector even minor impact can resonate throughout the whole 
industry.
    Under the direction of President Bush, Dr. John Graham has 
undertaken an effort to identify those regulations that create 
the most barriers for manufacturing and the process for 
evaluating and developing less burdensome rules. To explore 
this issue more we will be hearing from Dr. Graham, the 
Administrator for the Office of Information and Regulatory 
Affairs. This office is in charge of reviewing regulations and 
then providing relevant feedback on how these regulations will 
comply under current law.
    The OIRA's primary responsibility is to reduce the 
paperwork burden in small businesses that has resulted from the 
federal government. Through this examination and discussion it 
is my hope that we can find a balanced solution to reduce the 
regulatory burden on our country's small manufacturers. There 
has been an overwhelming spiral of paperwork that has been 
thrown onto our small enterprises. And I hope that we will 
specifically improve those regulations that are impacting small 
businesses.
    There is no reason that these vital businesses should be 
carrying the disproportionate weight of these regulatory 
burdens, wasting valuable time and money on paperwork 
requirements. The strength and recovery of our economy depends 
on the vitality of our nation's small businesses and small 
manufacturers. And we must work to ensure that they are not 
drowning in these regulations.
    I look forward to hearing the testimony of the witnesses 
today. Thank you, Mr. Chairman.
    [Ranking Member Velazquez's statement may be found in the 
appendix.]
    Chairman Manzullo. Thank you.
    We have invited to sit on our panel Congressman Todd Tiahrt 
from Kansas. Todd leads the Task Force on Competitiveness. Our 
hearing today is one of seven hearings that deal with this 
issue of making America's businesses more competitive. And I 
would recognize Congressman Tiahrt.
    Mr. Tiahrt. Thank you, Mr. Chairman. It is very 
appropriate, I think this is a debate that we should be having 
in America. We have in Congress over the last generation 
created barriers that keep us from bringing jobs back into 
America. And I think that Congress needs to take on the 
responsibility of undoing what has been done to some degree so 
that we can free up people who keep and create jobs here in 
America so that they can go out and do what they do best.
    I think this administration is, if you look at the average 
numbers of pages of regulations released is down from previous 
administrations. And I am interested to hear the testimony that 
we have.
    But I think that the 8,000 pages of regulations that were 
left behind by the previous administration and forced this Bush 
43 to implement has been responsible for the increasing amount 
of paperwork that has come from this administration. So I think 
we look at the causes, root causes obviously in Congress, and 
we need to address that. The administration though can multiply 
the number of pages or reduce them. And I think these hearings 
are going to help point out where we can reduce the paperwork 
burden and make a difference for those people who want to keep 
and create jobs.
    I do have a formal testimony that I would like to submit 
for the record if it is okay and then go ahead with the 
witnesses.
    Chairman Manzullo. That will be submitted without 
objection.
    [Representative Tiahrt's statement may be found in the 
appendix.]
    Mr. Tiahrt. Thank you, Mr. Chairman.
    And just in closing, we have come up with eight issues 
along with bureaucratic red tape that you are dealing with and 
paperwork burden. Our Careers for the 21st Century also 
addressed keeping healthcare costs down, lifelong learning, 
trade fairness, tax relief and simplification, energy self-
sufficiency and security, research development and innovation 
and, in conclusion, lawsuit abuse and litigation management. 
All these things are issues that are driven by Congress. And 
over the last generation Congress has raised the bar for small 
businesses especially and it has made it difficult to keep and 
create jobs in America because of that.
    So as we go through these hearings that you have scheduled 
and as we go through legislation on the House I hope that we 
will find it in our heart to reduce the burden for people who 
keep and create jobs. And this is a very good initiative and I 
strongly support what you and the minority are doing here.
    And with that I will just pass it back to you. Thank you.
    Chairman Manzullo. Thank you, Congressman Tiahrt.
    It is my pleasure to introduce Dr. John Graham who is the 
head of the Office of Information and Regulatory Affairs. Dr. 
Graham has appeared before our Committee I think at least two 
or three different occasions. He has a reputation as a person 
who likes to resolve disputes. And done a tremendous job off on 
a journey to examine every regulation as it pertains to 
manufacturing. And that is his own initiative.
    So we are just really pleased and blessed to have him 
working with us. And, Dr. Graham, we look forward to your 
testimony.

  STATEMENT OF THE HONORABLE JOHN D. GRAHAM, PH.D., OFFICE OF 
 INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND 
                    BUDGET, WASHINGTON, D.C.

    Dr. Graham. Thank you very much. Good afternoon, Mr. 
Chairman, members of the Committee. It is an honor to be here 
at a Committee hearing on regulatory reform of the 
manufacturing sector, particularly with the Chairman himself 
well-recognized as Mr. Manufacturing in the House of 
Representatives, at least by some people. And we appreciate the 
advocacy you have given to this cause for many years.
    I am going to say a few words about what we have done in 
the Administration to date in the area of regulatory reform. 
What we have is a huge plate of unfinished business and there 
certainly is a large portion of that. And then say a few words 
about our recent manufacturing initiative.
    The approach in this Administration toward regulatory 
reform has been a hard look, science-based approach at 
regulations. We do this through OMB enforcement of our 
executive orders and our regulatory analysis requirements. And, 
quite frankly, we are not interested in regulatory proposals 
that do not have a sound basis in science, in engineering and 
in economics.
    We enforce that through OMB Circular A4 which now defines 
state-of-the-art cost/benefit analysis for regulatory 
proposals. As you know, Mr. Chairman, we work closely with Tom 
Sullivan and his colleagues at the SBA Advocacy Office and they 
help target for us proposals that are likely to be harmful to 
small businesses and they help us generate alternatives that 
can mitigate that burden while fulfilling important public 
objectives of regulation.
    While these are the process activities we have under way, 
the question is do we have any evidence of any results from 
this activity? Now I would like to talk with you about this 
chart that is on my right here, to give you a historical 
perspective on how the growth of the regulatory state has been 
restrained under this administration and under this Congress.
    If you look over the last 15 years or so at the unfunded 
mandates these are the regulations imposed on the private 
sector or on state and local government but for which the 
federal government does not send a check to pay for them. So I 
am excluding the whole budgetary part of the debate and will 
let my OMB budget side colleagues have that discussion. But 
this is the private sector unfunded mandate for growth that has 
occurred over the last 17 years. And it is about $100 billion 
per year total extra burden of regulation, of unfunded 
mandates. And it is not distributed evenly across those 
previous administrations.
    There was a substantial amount during the Reagan years. 
Those are only the last two years of Reagan for which we have 
data. We are trying to dig back further and go all the way back 
through the eight years of the Reagan Administration.
    Then we have the Bush 41 years. And this is obviously not a 
partisan chart because the most heavily regulation-oriented 
administration in this period quite frankly is the Bush 41 
years.
    The Clinton Administration is quite substantial.
    In this Administration we are adding regulatory burdens at 
the level of about $1.8 billion per year.
    When you say to me, Dr. Graham, how can you be here to say 
that that is an accomplishment that we are adding $1.8 billion 
a year? First point is, that is an 80 percent reduction in the 
growth rate of major federal regulations in this 
Administration. If you imagine if we had that success on the 
budget side of this fiscal house where we would be today in 
comparison to that chart.
    The second point, which is a cautionary remark, is that we 
are in the fourth year of this Administration. The data 
historically show that it is the fourth year that is often the 
worst from a standpoint of increasing regulatory costs on the 
private sector and state and local governments.
    Now, these are the new burdens of federal regulations. 
Where is the unfinished business? The most significant area of 
unfinished business is the sea of existing regulations that are 
already out there from the previous 100 or so years of federal 
regulatory activity. In fact, since OMB began taking records in 
1981 there have been 100,000 new regulations cleared through 
the Office of Management and Budget. About 1,000 of them were 
estimated to cost the economy more than $100 million.
    To the best of our knowledge most of these rules have never 
been evaluated to determine what their actual effectiveness was 
or what their costs were. In this Administration we have taken 
the modest step of asking for public nominations of rules that 
need to be reformed or modernized or outmoded rules that can 
simply be eliminated.
    In the year 2001 we received 71 nominations--excuse me, we 
received 23 nominations from 71 commentors. In the year 2002, 
after a greater outreach, we received 316 nominations from 
1,700 commentors. This 2002 solicitation quite frankly 
overwhelmed the meager staff of OMB to handle this exercise. 
And we referred these proposals to the federal agencies for 
evaluation. We have now roughly 100 of these regulatory reforms 
under way or recently completed.
    Let me conclude with a few remarks about our most recent 
manufacturing initiatives. In our report to Congress this year 
we have asked for public nomination of regulations, guidance 
documents and paperwork requirements that impact the 
manufacturing sector that need a hard look to determine whether 
they are necessary or whether they can be made less burdensome.
    Why have we selected the manufacturing sector of the 
economy? The data show quite clearly when you compare the 
different sectors of the American economy the one sector that 
bears the disproportionate burden of regulatory costs is the 
manufacturing sector. And as you have noted, Mr. Chairman, it 
happens that this is the same sector that has been the slowest 
from an employment perspective to move out of the recession we 
were in. Though it is good news recently that we have seen 
additional employment in this sector as well.
    This hearing comes at a very good and interesting time. We 
are due to receive the nominations from the public tomorrow on 
reforms of the manufacturing sector. And we are looking forward 
to a large number and substantial number of nominations that 
will have merit.
    We will then compare these nominations with the agencies, 
evaluate them and develop a final report to both the president 
and the Congress on which of these reforms should be 
implemented and can make a difference. The good news is this 
Administration is making progress in slowing the growth of the 
regulatory state. It is a critical part of the President's Six-
Point Plan to stimulate the economy. While we are making 
progress we have, as you know, a long way to go and we will 
need your help in this Committee to give us the kind of support 
we need to make this happen.
    Thank you very much. And I look forward to comments and 
questions.
    [Dr. Graham's statement may be found in the appendix.]
    Chairman Manzullo. Thank you, Dr. Graham.
    When is the--let me rephrase that. I believe it was an 
executive order of the president that asked you to undertake 
this review?
    Dr. Graham. Well, there was an executive order from the 
president strengthening the role of small business evaluation 
with regard to regulatory impacts. But actually this particular 
initiative came out of a Commerce Department comprehensive 
evaluation of the state of the manufacturing sector of the 
economy and recommended a hard look by the Administration at 
the existing regulatory systems impacting manufacturing.
    So in fairness, I think the Commerce Department had a very 
important role to play in the development of this.
    Chairman Manzullo. Doctor, could you walk us through how 
you evaluate these regulations? I know you are looking at 
thousands of regulations and in the process you are trying to 
at least call Congress' attention to the conflicting ones and 
to try to resolve them. How do you manage that volume of 
regulations?
    Dr. Graham. Well, Mr. Chairman, quite candidly, you 
referred to thousands. And even the hundreds that we are 
evaluating now, the hundreds of new regulations being developed 
by the agencies and sent to us, that work load is substantial 
with regard to the several dozen people we have at OMB to 
evaluate those rules.
    So when we take a special initiative like this and say we 
are also going to look at existing regulations that are 
nominated, quite frankly we need to reach out to our agency 
colleagues, whether they be in the Labor Department, whether 
they be in the Environmental Protection Agency, to help us 
evaluate these nominations. And, quite frankly, that is where 
the tension begins because there are lots of people in the 
agencies, quite frankly, who have a strong stake in those 
existing regulations. Yet we are asking them to go in and look 
at those and take a serious look at whether they can be made 
less burdensome.
    Chairman Manzullo. And then as you--let us take a look just 
call it regulation X just for the heck of it, that a company 
will I guess call it a nomination will say, Dr. Graham, this is 
the burden is oppressive here. It is called regulation X and it 
impacts two or three or four different agencies. Then do you 
have team meetings on these with agencies? How does that work?
    Dr. Graham. Well, I think the----
    Chairman Manzullo. Without getting specific because I know 
that you cannot.
    Dr. Graham [continuing] Right. Well, we are in the process 
of designing how we will handle the nominations this year. In 
2001, which was the first year we engaged in this activity, we 
had, as I mentioned, we had 23 nominations from 71 commentors. 
That was a sufficiently manageable number of nominations that 
my staff at OMB made an initial evaluation of those nominations 
and we identified prior rules for reform. OMB designated 
priority rules for reform.
    In 2002 we had 316 nominations from 1,700 commentors. That 
overwhelmed our ability to competently try to develop and OMB 
designated priority list. So, quite frankly, we are going to 
look very hard at the nominations we get this year, the quality 
of them, the level of thought provided by the commentors. And 
then we need to make a decision about whether we are going to 
rely primarily on OMB evaluations first or whether we are going 
to collaboratively work with the agencies to identify those 
priorities.
    Chairman Manzullo. What authority, if any, does OMB have to 
take let us just call it an agricultural regulation that there 
has been a lot of comment on, a lot of friction, and let us say 
there is an agreement for some resolution; what do you do in a 
case like that?
    Dr. Graham. Well, the authority to ultimately make the 
regulatory decisions in almost all instances resides in the 
responsible regulatory agency. So our role is as a persuader, a 
cajoler, in some cases an instructor to take a hard look at a 
specific matter. But in the final analysis it is the agency 
that makes that decision. And that is the role that we have had 
at OMB for a substantial period of time.
    Chairman Manzullo. So the office in the federal government 
that would be best at calculating the cumulative cost of 
regulations on manufacturers would be your office?
    Dr. Graham. Well, actually there is a developing capability 
in the Commerce Department I should add on that subject.
    Chairman Manzullo. Could you develop that for us?
    Dr. Graham. One thing I want to make clear is that the two 
dozen professionals in OMB who review regulations they are 
generalists. They are not specialists in small business. They 
are not specialists in manufacturing. They are not specialists 
in any particular kind of regulation, whether it be homeland 
security or whatever. They have an overall generalist 
background and they, of course, try to learn over time and with 
experience how to evaluate these proposals.
    But it is very critical when we get, for example, a rule 
where there may be a small business impact we go right to the 
SBA Advocacy Office to Tom Sullivan and his specialists and we 
look for guidance from them on whether this is an important one 
for the small business community?
    What is encouraging about the Commerce Department 
development is they are talking about developing a specialized 
staff in the Commerce Department that has expertise, data and 
experience on manufacturing related issues. That will be of 
enormous value to OMB if they can follow through and make that 
happen.
    Chairman Manzullo. Congressman Velazquez?
    Ms. Velazquez. Thank you, Mr. Chairman.
    Dr. Graham, I commend you for your seeking regulatory 
review from nominations that recommend improvements on 
regulations that have an impact on manufacturing and small 
businesses. My staff attended some of the sessions and they 
were filled with businesses nominating regulations to be 
reviewed.
    We have looked at your previous solicitations in 2001 to 
2003 and we note that you have had some 1,800 recommendations 
over those two years. From what we can tell you categorized 23 
recommendations in 2001 as new high priority projects and 34 in 
2003 as new high priority projects with some carry-over from 
2001. Almost most of these applied to four agencies: 
Transportation, EPA, Labor and HHS. And I am really surprised 
that the IRS had very few of those nominations.
    Judging by what I hear from small businesses I would have 
thought that IRS would have led the list. What is the 
explanation for that?
    Dr. Graham. That is an excellent question. We have looked 
historically at the kinds of proposals that have been made for 
reform of IRS to reduce paperwork burden, to reduce burden on 
business. What you find when you look very carefully at a host 
of IRS issues is that, quite frankly, the Congress through the 
tax code has done most of the damage right in the way the tax 
code is written. And once you have the tax code written in some 
way, while IRS does have some discretion in how they write 
their regulations and their interpretative regulations, 
oftentimes that discretion is not large.
    I think a lot of people in the business community realize 
that in order to make major fundamental change in the burdens 
from Treasury regulation and IRS regulation in particular you 
are going to have to have a much simpler tax code than we have 
today.
    Ms. Velazquez. I understand the part that the Congress 
played in terms of the tax code. But we conducted one of the 
hearings in the Subcommittee on Small Businesses with Congress 
Schrock and IRS was testifying, and some of the regulations did 
not have anything to do or they were just it is their attitude 
and disregard for the impact, the economic impact that those 
regulations will have on those small businesses.
    Dr. Graham, it is also surprising that you were able to get 
1,700 nominations last year and ended up with only 34 new 
reform projects. Do you feel you have the staff resources to 
oversee current regulations, rules plus do all the reports and 
studies that you are called upon to do and oversee these 
projects?
    Dr. Graham. Let me start by making sure we are talking 
about the same numbers and the same facts. The way we look at 
it, OMB did designate in 2001 23 of the reforms as high 
priority.
    In 2002 we never did designate any of the 316 as high 
priority. We did notice that a number of those 316 were already 
being looked at by federal agencies in various ways and, hence, 
we simply have asked them to provide us status reports on 
those. And it may be that you are referring to the others that 
we asked them to evaluate.
    Ms. Velazquez. And those various agencies like which ones, 
for example?
    Dr. Graham. I think the list of agencies that you gave 
actually those are the busiest regulators in town. And it 
should not surprise us that most of the reform nominations we 
are getting are in Transportation, EPA, Labor and Health and 
Human Services.
    Ms. Velazquez. And then at the end of your testimony you 
said that you needed support from Congress. That is in terms of 
the laws that we pass or resources and the budget?
    Dr. Graham. Well, I think it is important that we get 
support in all of those dimensions. And even modest things like 
this hearing we think this is very important to providing an 
understanding for the public of why are we focusing on 
manufacturing regulation. Because the rising cost of producing 
goods and services in this country is in fact related to 
employment, to jobs, to community welfare. We need at the most 
modest level of hearings like this an understanding of why it 
is that we are reforming manufacturing regulations.
    Ms. Velazquez. It takes more than hearings, Dr. Graham.
    Dr. Graham. It does.
    Ms. Velazquez. It also takes resources and money.
    Dr. Graham. Right.
    Ms. Velazquez. We are voting on the budget today. Is the 
budget adequate?
    Dr. Graham. Well, we are going to look at the nominations 
we get, which are due in tomorrow, and we will make a careful 
determination. And if we cannot handle it all within OMB we 
will recruit Commerce and SBA Advocacy and the agencies. And if 
we determine that is not adequate I will be back here asking 
the Congress for more resources, I can assure you of that.
    Ms. Velazquez. That, if you do not get other directives 
coming from the White House.
    Thank you, Dr. Graham.
    Chairman Manzullo. Congressman Tiahrt. Congressman Chabot 
has no questions. Go ahead.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    Dr. Graham, it seems like if I was going to focus on where 
regulatory problems were the greatest I would look at which 
agency was delivering the most regulations. And Transportation 
according to CRS is way above most other agencies.
    In 2003, for example, DOT released 1,141 regs. And the next 
closest was Treasury which was 402 and then Department Commerce 
was then 272. So there are a huge number of rules I should say, 
not regs, rules that are released.
    How do you determine where you are going to target your 
efforts because you cannot take them all on? And is it what OMB 
recommends or do you go targeting on your own and figure out 
areas like hours of service? Hours of service is going to be a 
big problem for small businesses. Small business trucking 
companies and delivery companies. And it seems like that would 
be one where, you know, we could target other transportation 
issues they want to retire. How do you determine which ones you 
are going to look at?
    Dr. Graham. Well, the nomination process is wide open with 
regard to any agency's regulations. And in both 2001 and 2002 
we have received a significant number of nominations that 
relate to the Department of Transportation. And there is a lot 
of regulation coming out of the Department of Transportation. 
So I think your basic premise of your question is correct.
    Now, we will analyze the quality of the technical and 
economic case that underpins each of these nominations in order 
to determine which of the ones we ought to push the hardest on 
agencies to move in the near term and which can be moved on a 
more deliberate pace. So the case that these nominators make 
for these particular reforms are very important.
    Mr. Tiahrt. Do you do a cost/benefit analysis when you look 
at rules and regulations?
    Dr. Graham. Our role at OMB is actually review the cost/
benefit case that agencies make for a regulation or for a 
reform of a regulation. So my two dozen staff we are engaged in 
reviewing those cost/benefit analyses.
    Mr. Tiahrt. According to data I got from CRS, the source 
was OMB, they say the last ten years between October 1, 1993 
and September 30, 2003, the benefit from rules and regulations 
versus the cost of all agencies, and they put a range, so the 
benefit was from $62 billion to $168 billion. The costs were 
from $34 billion to $39 billion. So if you take care of the 
midpoint of those two ranges it says that you get a $3 benefit 
for $1 cost.
    I don't know exactly how you estimated benefit for 
regulation because if this is true all we have got to do is 
write, you know, another $200 billion worth of--$100 billion 
worth of rules and regulations then we will get enough benefit 
to balance the budget. So I am not sure we can really regulate 
our way into benefits. I am not sure where the concept of, you 
know, the benefit that we get by it comes from or how you 
estimate that. And I would be curious, how to you estimate a 
benefit from a rule or regulation?
    Dr. Graham. Well, if every regulation proposed had the same 
ratio of benefit to cost as the ones that you are describing 
then the logic of what you are saying would be infallible. But 
in fact we know that regulations vary enormously in how much 
benefit they have and what their burdens are.
    And in fact the majority of those $100-plus billion in 
benefits are attributable to a handful of regulations from one 
office in one agency, the Clean Air Office within EPA that is 
reducing the amount of diesel exhaust and other forms of 
particulate pollution in the air. That is where most of those 
benefits are from.
    If you look at all the other regulations that are covered 
in that report the benefit/cost case is much murkier.
    Mr. Tiahrt. So it is not as clear?
    Dr. Graham. That is right.
    Mr. Tiahrt. One of the things we addressed yesterday on the 
Floor when we voted in trying to clean up some of the 
regulatory problems are just the frequency of reports. Some 
small businesses are burdened with quarterly reports. And, you 
know, is there some breakpoint like 200 employees, 150 
employees, 100 employees where we can say this data really is 
not that essential that we have a quarterly report? Perhaps an 
annual report would be better. In doing so we could reduce 
their regulatory burden on that particular rule or regulation 
by 75 percent.
    Is that part of the scenario you looked at is frequency of 
rules and regulations?
    Dr. Graham. Yes. And that is the kind of a proposed reform 
that one of the commentors might suggest in a particular 
regulation. Maybe the reporting requirements should be annual 
rather than quarterly. Those would be quite sensible kinds of 
suggestions.
    Mr. Tiahrt. We wish you the best of luck.
    Dr. Graham. I will be needing your help, sir.
    Mr. Tiahrt. Please call.
    Thank you, Mr. Chairman.
    Chairman Manzullo. Thank you. Congresswoman Christensen, 
who was a physician, knows something about regulations. I look 
forward to your questions.
    Ms. Christensen. I have been on the bad side of it when I 
was in practice. I hope we will have CMS, the new CMS 
administrator come in also.
    Good afternoon, Dr. Graham. There was a study done by I 
guess it was the Committee on Government Reform that says that 
total government paperwork had increased substantially under 
the Bush Administration to an estimated 8.1 billion hours in 
fiscal year 2003. How much--And last year Americans spent over 
700 million more hours filling out government paperwork than in 
the last year of the Clinton Administration. So it also says 
the largest annual increase in paperwork burden ever measured 
occurred under this Bush Administration in fiscal year 2002.
    How do you reconcile that with what we see on the graph?
    Dr. Graham. Right. Paperwork burdens are an important cost 
of regulation but they are only one element of the cost. So, 
for example, if you require a manufacturing enterprise to 
install new equipment or new machines in order to address an 
issue that is also a cost of the regulation.
    This chart shows the total extra cost of major rules, not 
just the paperwork. What is driving your numbers is changes in 
the tax code, okay, which cause more people to have to fill out 
more detailed tax forms. Okay. Whereas this is including all 
the regulatory costs whether they be paperwork, equipment, 
capital or labor or whatever.
    Ms. Christensen. So when Congresswoman Velazquez asked you 
about IRS and you said that, well, Congress is the one that 
created all of that paperwork----
    Dr. Graham. Not all of it but a good chunk of it.
    Ms. Christensen [continuing] Well, a good chunk of it. So 
you do not automatically or periodically do a review regardless 
of where those regulations emanate from?
    Dr. Graham. Yes, to give you a feel for it, of the total 
paperwork in the American economy that you are referring to if 
you look at all agencies, 80 percent of it is attributable to 
the Treasury Department. Most of that----
    Ms. Christensen. And you do not review it?
    Dr. Graham [continuing] Most of that is due to IRS. And 
most of that is attributable to the way the tax code is written 
itself.
    We do review in the cases where IRS has discretion on 
exactly how to frame a regulation based upon the tax code we do 
review those paperwork burdens. But let us not confuse big 
versus small issues. The big issue is you have got a 
complicated tax code, you make it more complicated through tax 
cuts sometimes, and you will increase paperwork burden.
    Ms. Christensen. Okay. I am not sure, I was trying to get 
an answer to this. Those graphs are in 2001 dollars?
    Dr. Graham. Correct.
    Ms. Christensen. Would it look the same--would not that 
blue line, the last Bush 43 be higher if you did it in today's 
dollars?
    Dr. Graham. All of the, all of the charts would go up a 
little bit if you used today's dollars because they are all 
being expressed in 2001 dollars.
    Ms. Christensen. Yes.
    Dr. Graham. So it would not affect the relative heights of 
the chart.
    Ms. Christensen. It would not affect the relative.
    Dr. Graham. Right.
    Ms. Christensen. Seems to me it would.
    You also said in response to the Chairman that you make the 
recommendations to the agency. What are you expectations of 
that agency when you make those recommendations?
    Dr. Graham. Our expectations either----
    Ms. Christensen. Yes. And what action do you take, what 
follow-up kind of action would you take after those 
recommendations are made if there is no response from the 
agency?
    Dr. Graham [continuing] We are looking for either 
implementation on behalf of the agency of the recommendation 
or, alternatively, a cogent rationale for why it is they have 
chosen not to implement the recommendations.
    In our report to Congress we publish each year a rule by 
rule explanation of what happened to each of the reform 
nominations that we have been discussing in this hearing so 
far. And, quite frankly, in some cases the agencies come back 
to us, CMS for example, thank you, Dr. Graham, we were very 
interested in your reform nomination but we do not think it is 
a particularly good idea.
    And I will let you be the judge if you want to look through 
some of those examples whether you thought the merits of that 
argument were with the commentor, with OMB or with the agency.
    Ms. Christensen. So after you make the recommendations 
there is nothing that you can to enforce?
    Dr. Graham. In some cases we will go further and we will 
have a comment--we will invite the agency over to OMB, we will 
have a more detailed discussion of that issue and try to 
persuade them that in fact that is appropriate. But when you 
are dealing with 316 nominations you are only going to be able 
to have a detailed inquiry with regard to a modest number.
    Ms. Christensen. And do you prioritize? I do not know where 
my time is. And do you prioritize these so that you would maybe 
focus on the ones that have been deemed for whatever reason to 
be more important?
    Dr. Graham. In 2001 we did. In 2002 we had so many we 
simply referred them to the agencies for their evaluation. We 
have tried it both ways. This year with the manufacturing 
reforms we are going to look at what we have and we are going 
to take whatever strategy we think would be most effective in 
getting the work done by the agencies.
    Ms. Christensen. Okay. Thank you.
    Chairman Manzullo. Dr. Graham, thank you for coming this 
afternoon. We are always excited about the way you go after all 
this paperwork.
    I recall about three years ago when--actually it was longer 
than that, during the Clinton Administration when the Hope 
Scholarship was passed this gives a $1,500 per child tax credit 
to families earning under X amount of dollars per year for 
higher education purposes. And the Senate asked I believe it 
was Treasury Secretary Rubin about a particular provision that 
required 7,000 colleges, universities, trade schools and 
community colleges within our country to report as to the 
source of the money that was coming to the school, I guess for 
the purpose of verifying that it was coming from the student.
    And he said, well, the cost of verification would be the 
cost of a stamp. Not criticizing the secretary, but that 
provision got written into the bill. And IRS took a look at it. 
And we were contacted by Northern Arizona University. The cost 
is about $100 million a year in regulatory compliance.
    And Charles Lazotti and I from the IRS and I sat down and 
he said this is not good. And for four years IRS withheld 
permanent regulations until we could come up with a legislative 
fix that eliminated that burden.
    And I think this is what happens when members of Congress 
say, well, let us just throw this provision in. Sometimes it is 
a last minute amendment and it causes that type of regulatory 
nightmare.
    So just when you said that Congress causes a lot of 
problems in the IRS code I will concur with you on that.
    Again thank you for your testimony. Your complete statement 
will be made part of the record. And thanks again for coming, 
Doctor.
    Dr. Graham. Thank you. Appreciate it.
    Chairman Manzullo. Appreciate it so much.
    If we could get the next panel to come up.
    Our second panel, we welcome the second panel here. The 
first witness is John Arnett, Government Affairs Counsel, 
Cooper and Brass Fabricators Council. And, John, look forward 
to your testimony.

 STATEMENT OF JOHN ARNETT, COPPER & BRASS FABRICATORS COUNCIL, 
                              INC.

    Mr. Arnett. Thank you, Mr. Chairman, members of the 
Committee, and good afternoon. I am, as the Chairman states, 
John Arnett, Government Affairs Counsel for the Copper and 
Brass Fabricators Council. The Council's 21 member companies 
were listed in our submission. And we would like to thank you 
for inviting us to participate in this hearing today.
    The Council's member companies collectively account for 
about 80 to 85 percent of the brass milled products produced in 
the United States each year. These consist of copper plate, 
sheet, strip, foil, rod, bar, pipe and tube. And these products 
are used mainly in the automotive construction and electrical/
electronic industries. Many of the Council's members meet the 
definition of small business, but not all, under the Small 
Business Administration standards.
    The costs of regulatory compliance on manufacturers in the 
U.S. are, by any reasonable estimate, an enormous burden. As 
the Manufacturing Alliance recently concluded in a 2003 study, 
the compliance costs in the economy are in the order of $850 
billion, $160 billion of that falls on manufacturing alone. And 
the burden is growing larger. The net result is that, as the 
Manufacturing Alliance artfully stated, ``compliance costs for 
regulations can be regarded as the `silent killer' of 
manufacturing competitiveness,'' particularly when you compare 
it to an industrial trade and some of the regulatory burden 
reductions that are being undertaken in other countries.
    In March of 2002 when the Office of Management and Budget 
and OIRA asked for public nominations of regulatory reforms the 
Council enthusiastically responded by submitting seven 
regulations that it deemed to be costly with little or no 
benefit. As Dr. Graham testified, and as outlined in OIRA's 
2003 Report to Congress or OMB's report, they received a total 
of 316 distinct reform nominations and submitted 161 of those 
for agency review. The Counsel was heartened that five of their 
seven nominations were referred to EPA and to OSHA.
    Of the five Council nominations referred, one was deemed by 
EPA to be worthy of action and two were cast into the undecided 
category for further review. The Council is encouraged that 
three of the nominations were targeted for reform or additional 
study. However, we were disappointed that two--are disappointed 
that two years later, two years after the process began that 
none of the regulations have been changed in any way. Indeed, 
it is our understanding that of the 161 rules and regulations 
in total referred to the agencies, none of the referrals has 
resulted in any substantive changes to this point. Clearly, the 
goal of eliminating wasteful regulations has yet to be 
achieved.
    What then can explain the apparent encouraging procedure 
but the lack of substantive results. It is the Council's view 
that the following problems with the procedures may have short-
circuited the completion of reforms. And I think these problems 
need to be addressed in the current round of submissions:
    The method used by OMB and OIRA during the initial 
screening process is unknown, and there is no opportunity for 
input and clarification during this process from those of us 
who nominated the regulations;
    Once referred to agencies, there is no opportunity for the 
nominating entity to answer questions that may arise in the 
agency's mind. If the agency is unclear on what we are saying 
there is no opportunity to contact us, there is no dialogue;
    There is no explanation for the agency decisions that they 
finally make, especially when the decision is not to pursue 
reform and the agency is completely in its right to make that 
decision;
    The agencies, finally, the agencies appear to be able to 
make any decision regarding referred regulations without 
justifying that decision or even explaining how they arrived at 
it.
    To correct this greater transparency in the screening 
process, some explanations by the agencies in support of their 
decisions, and a requirement that agencies justify a decision 
not to consider a proposed reform might help resolve these 
problems to some extent. Further, communications between the 
nominating entity and the agency and OIRA after the regulation 
is referred to the agency might improve the agency's 
understanding of the problems cited and suggested solution.
    In spite of our reservations, the Council commends OMB and 
OIRA and the agencies for their execution of the initial 2002 
process. We believe the process has the potential for 
illuminating regulatory provisions that create burdens with 
little or no gains. OMB this year seeks public nominations of 
regulations affecting manufacturing in particular. And tomorrow 
we will submit a list of eight regulations for consideration.
    Just very quickly, if adopted some of these eight would 
help, for example, eliminate unnecessary testing for pollutants 
in water discharges when it can be demonstrated that there is 
zero chance that the pollutants are in the water;
    Could remove from the definition of ``volatile organic 
compound'' those compounds that are not volatile. And it is 
true that the VOC has no--the definition of VOC has no 
volatility component;
    Third, focus the attention of the SPCC, the Spill 
Prevention, Control, and Countermeasure rule on larger 
facilities and away from the very small risks that have never, 
it has never been demonstrated they create a risk;]
    Fourth, focus storm water regulations on effective but 
inexpensive best practices, rather than focusing on 
construction of facilities for capturing and basically treating 
rainwater;
    Eliminate the ``double'' waste treating of water discharges 
due to lack of removal credits to Publicly Owned Treatment 
Works;
    Permit the concentration of hazardous waste through 
evaporative dryers, thereby reducing shipping volume to waste 
treatment facilities and resulting transportation and energy 
savings;
    And permit the use of ships stairs and spiral stairs 
instead of rung ladders in certain manufacturing situation with 
an improvement of safety in plant sites.
    We appreciate the Committee's attention to inefficient and 
unnecessary regulations that are the silent killers of 
manufacturing processes and look forward to OIRA's response to 
our submissions.
    Thank you, Mr. Chairman.
    [Mr. Arnett's statement may be found in the appendix.]
    Chairman Manzullo. Thank you.
    Our second witness is B.J. Mason, President, Mid-Atlantic 
Finishing out of Capitol Heights, Maryland, on behalf of 
himself and the National Association of Metal Finishers. We 
look forward to your testimony.

        STATEMENT OF B.J. MASON, MID-ATLANTIC FINISHING

    Mr. Mason. Thank you, Mr. Chairman. Thank you to the 
Committee.
    Chairman Manzullo. B.J., do you want to pull the mike a 
little bit closer to you?
    Mr. Mason. There you are. Is this better?
    Mid-Atlantic Finishing in Capitol Heights, Maryland, is a 
corporation that I started about 28 years ago. We now have 35 
employees down from four years ago of about 75. We have been 
providing gold, silver, nickel, tin, copper, conversion 
coatings for the defense industry, the medical, tooling, 
telecommunications, computer, electronics and a whole host of 
other industries.
    On the regulatory front my industry has worked closely with 
agencies like the EPA and the state and local regulators as 
well as environmental groups on many voluntary, cooperative 
projects to reduce the industry's environmental footprint to 
the greatest extent possible.
    Before I go on I might just say too that it sounds to me 
like I am what everybody has been talking about here today, a 
small, a small industry. So I guess I feel kind of special. 
Thank you.
    Chairman Manzullo. You are special. That is why you are 
here.
    Mr. Mason. Thank you, sir.
    We are pleased that in the late 1990s former President Gore 
formally recognized the finishing industry's environmental 
leadership with his `Reinventing Government'' award in response 
to our demonstration that it is indeed possible to reconcile 
environmental and economic and competitive goals.
    This experience, however, pointed out to me that there is 
much more room for improvement on how the federal government 
evaluates its own regulations and that it is absolutely 
essential to have a process in the big picture, can flag and 
change regulatory requirements that do not add value to either 
the environment, public health or the economy, and can identify 
with some reasonable level of accuracy the costs and benefits 
of regulations at every stage of the rulemaking process.
    I would point out that for my industry there are heavy 
consequences that ensue from not having rigorous, systematic 
review of a wide range of regulations, whether they are major 
rules or not.
    I would like to briefly illustrate with a specific example. 
In the past several years the metal finishing industry 
committed over $1 million to challenge the rule called MP&M. 
This was an EPA regulatory issue which was imposed on top of 
already restrictive wastewater controls based and we felt the 
rule was based on improper science analyses. After a continuous 
series of deliberations over several years, EPA ultimately 
concluded that no further regulations was warranted for the 
metal finishing industry.
    In the end, while this was good news, I was troubled by two 
things:
    First, by the fact that even with a well run early SBREFA 
process to assess small business impact, the proposed rule's 
estimates of costs and benefit was highly erroneous. In fact, 
EPA's costs are vastly underestimated. And estimates of 
pollutants likely to be reduced from the industry were off by a 
few orders of magnitude.
    Second, I was troubled by the fact of one senior EPA 
official who I happen to respect very much--that was written 
for me--noted after completion of the rule that but for the 
fact that the metal finishing industry had to spend one million 
dollars on analysis, the regulatory process worked for this 
rulemaking.
    Mr. Chairman and members of the Committee, surely there is 
a better way to spend a million dollars. And that was a million 
dollars that was spent by owners of small businesses in a very 
troubling economic time the last three to four years which is 
the worst that I have seen in the 25 years that I have been in 
the business. And we were not making money to be able to spend 
that kind of money, but we did.
    In light of this experience the industry has reviewed 
several regulations that can be modified without causing 
adverse environmental or health impacts. We have focused more 
intently on the cost of these measures for several reasons, one 
being the fact that many of our competitors in the global 
economy do not carry the same obligations and responsibilities 
that we do. At the same time, we are not looking for 
environmental rollbacks or a ticket to pollute.
    In my written testimony I provided a brief sketch of the 
several regulatory reform nominations that we made to Dr. 
Graham and the White House Office of Management and Budget. 
They happen to cut across all major programs at EPA--air, 
water, waste--and if implemented could potentially achieve over 
$100,000 in savings for companies like mine with annual sales 
of between $2 and $3 million. These changes in the written 
testimony are: streamline the EPA's wastewater pretreatment 
program, allow an exemption for federal air permitting 
procedural requirements if companies are already complying with 
stringent federal air emission controls, and update the federal 
hazardous waste framework to allow recycling of our metals 
under certain conditions.
    I happened to be at another of these Committee meetings 
when one of my colleagues reported about the metals that are 
being forced to be put into landfills. As I have said for 12 
years to EPA, we will mine those landfills one day when we run 
out of resources.
    Mr. Chairman, we determined that modest changes for these 
three regulations could provide significant savings of costs, 
could mean the difference between being profitable and being 
forced to shut down operations or lay off workers.
    I would like to close with an example of yet another 
critical regulation in the pipeline for my industry which 
raises the importance of an informed, rigorous review process. 
This is OSHA's PEL proposal that will be proposed in October. 
The industry has presented a detailed analysis in the SBREFA 
panel process last month with analysis and documentation 
showing that all facilities with annual sales of $1.5 million 
and 20 employees, would have to spend 60 times that, or over 
$300,000 per facility, to achieve the very low limits to be 
proposed by OSHA. We have submitted data that we are not 
opposed to lower limits, we are just opposed to anything that 
is really not necessary and ask them to look at our analyses.
    I hope that some of the issues I have raised today will 
point out the need for and the potential value of an improved 
process for regulatory review and oversight of federal agency 
actions. I believe this can be done responsibly and in a way 
that minimizes the regulatory burdens, protects human health 
and environment, and allows small businesses the opportunity to 
compete successfully in the global market.
    Thank you, Mr. Chairman and members of the Committee for 
the opportunity to appear today.
    [Mr. Mason's statement may be found in the appendix.]
    Chairman Manzullo. Well, thank you very much.
    Our next witness is Andrew Bopp. I have been given a 
phonetic.
    Mr. Bopp. Yes.
    Chairman Manzullo. Obviously people mispronounce your last 
name.
    Mr. Bopp. It looks like ``bop.''
    Chairman Manzullo. On a few occasions.
    Andrew is the Director of Public Affairs for the Society of 
Glass and Ceramic Decorators in Alexandria, Virginia, been with 
them since 1995. And we look forward to your testimony.

    STATEMENT OF ANDREW BOPP, SOCIETY OF GLASS AND CERAMIC 
                           DECORATORS

    Mr. Bopp. Thank you, sir. And thank you, members of the 
Committee.
    The Society of Glass and Ceramic Decorators represents 
manufacturers that decorate glass----
    Chairman Manzullo. Andrew, could you pull the mike a little 
bit closer to you?
    Mr. Bopp [continuing] Sure.
    Chairman Manzullo. And then maybe tip it up a little. There 
you are. You have to speak directly into it. Go ahead.
    Mr. Bopp. The Society of Glass and Ceramic Decorators 
represents manufacturers who decorate glass and ceramic mugs, 
tumblers and similar items. Things like this, pretty basic 
things. There are 300 member companies nationwide that decorate 
these types of items and they are facing severe competition 
from overseas, primarily from China. The Chinese were first 
with ceramics, that is why it is called China.
    Most SGCD members are small, often family-owned companies. 
These companies cannot afford to hire staff to focus on 
regulatory compliance. In fact, many of these companies are 
unable to employ engineers at their facilities let alone 
environmental, safety or other experts. Regulatory burdens 
often fall on the owner or other key staff who are also 
responsible for production, purchasing, marketing, sales and 
other business functions.
    Burdensome and unnecessary regulations significantly 
contribute to the cost of doing business in the U.S. This leads 
to the loss of manufacturing jobs to overseas competition. It 
is critical that existing regulations undergo careful review to 
determine whether regulatory goals can be achieved in a less 
burdensome way.
    I am here today to encourage this Committee to support OIRA 
in its efforts to review burdensome regulations that have a 
major impact on small business. To illustrate, we believe OIRA 
has been and hopefully will continue to be helpful in reviewing 
EPA's Toxic Release Inventory Lead Rule. This rule has proven 
to be extremely burdensome for small glass and ceramic printers 
and other small manufacturers. Some of the colors used in glass 
and ceramic decoration cannot be produced without lead. This 
does not create environmental risk and very little ends up as 
waste.
    When fired, the colors become chemically part of the glass 
or ceramic mug. Almost all of these colors are used to produce 
the ware. SGCD member companies work closely with FDA and other 
federal and state agencies to guarantee the safety of all these 
wares.
    In spite of this, hundreds of these small companies as well 
as small companies in other manufacturing sectors were 
entangled in EPA's January 2001 lead rule changes that lowered 
the annual reporting threshold from 10,000 pounds to 100 
pounds. I want to emphasize that that is lead used, not 
released to the environment. The TRI program is burdensome, 
especially for the 75 percent of lead filers that are small 
businesses due to the complicated analysis and calculations 
that are required to comply. Classic paperwork burden.
    However, when lowering the reporting threshold, EPA 
disallowed existing burden relief options for small business 
such as a simplified Form A and de minimis allowance that are 
available for other TRI substances. A massive effort is being 
undertaken by small business operators to comply with this 
rule. A review of 2001 TRI data, which is the latest available 
for this new rule, indicates that over 2,600 manufacturing 
companies reported zero environmental release of lead or lead 
compounds. All this work to show zero.
    In SIC 32, which includes glass and ceramic printers, 532 
complicated Form Rs--and complicated, I should have brought in 
the book but it is a very big book, it is a very complex form. 
Think about your most complex IRS form and start there. Five 
hundred thirty-two complicated Form Rs were filed in 2001. The 
cost was estimated by EPA to be $7,400 per facility. Of these 
forms, 46 percent of companies reported on-site release to the 
environment of less than one pound in SIC 32. In a fairly 
typical case, a small decorator reported zero on-site release 
after spending more than 180 hours to compile data and complete 
a TRI Form R.
    This is a type of program where you have to compile the 
information as you move through the year and then file the 
paperwork. You cannot just pay somebody to do it, which happens 
in a lot of IRS cases.
    Even after the forms are filed, the burdens continue. In 
December 2003, a glass decorator received a Notice of 
Significant Error from EPA for its 2002 TRI report. One week 
later, the company received a second copy of the same notice 
that finally listed the error which was then corrected. In 
February 2004, the company received yet another notice listing 
12 new technical errors. Let me emphasize, this company was 
reporting zero environmental lead release. In addition to 
burdening small manufacturers, this appears to me to be 
inefficient use of EPA's time also.
    It is encouraging, however, that EPA is now reviewing 
options, through its Stakeholder Dialogue, to simplify TRI 
reporting. Two elements under review are critical to reducing 
the reporting burden. A simplified Form NS for insignificant 
lead reporters is needed for companies that have shown on-site 
lead release of ten or fewer pounds. In addition, Form A, range 
reporting and de minimis allowances should be reinstated for 
lead reporters. Useful public information would not be lost, 
small business burden would be eased. It seems like a very good 
thing to do.
    This week, SGCD like many of the others is submitting 
comments to OIRA in response to their request for information 
on specific regulatory burdens. OIRA in our opinion is ideally 
positioned to review these regulations given their vantage 
point as an outside observer. An agency that is implementing a 
regulation, and the businesses or others who must comply, do 
not have this perspective.
    We believe this review process should be ongoing at OIRA so 
that the Administration can follow through on efforts to 
achieve burden reduction. In addition, I urge Congress to 
address staffing shortages at OIRA. Lack of adequate staff is 
obviously a major obstacle to enabling the agency to fulfill 
its burden reduction mission.
    I appreciate the opportunity to address the Committee 
today. And I do believe that a cooperative effort by OIRA, EPA 
and stakeholders can lead to completion of the TRI burden 
reduction process within a year. I also believe that OIRA can 
be of great help in addressing the other rules that others have 
raised.
    Thank you very much.
    [Mr. Bopp's statement may be found in the appendix.]
    Chairman Manzullo. Well, thank you for your testimony.
    Mr. Arnett, I would like to call your attention to page 2 
of your testimony. Do you have it in front of you?
    Mr. Arnett. Yes, sir.
    Chairman Manzullo. It is if you go down to the second full 
paragraph where you state ``indeed'' at the bottom, ``Indeed, 
it is our understanding, that of the 161 rules and regulations 
in total referred to agencies by the OMB, none of the referrals 
has resulted in any substantive changes.'' Did you want to 
comment on that?
    Mr. Arnett. Yes, sir. If you are wondering where I got 
that, I got that from the National Association of 
Manufacturers' analysis I think----
    Chairman Manzullo. Okay.
    Mr. Arnett [continuing] In the comments that they, the 
draft comments that I reviewed from the NAM. That was a 
statement that they made and I took it from there.
    I think there were a lot of referrals to the agencies but I 
do not think any conclusive action, nothing has concluded on 
any of the measures that were referred, as I understand it.
    Chairman Manzullo. I think that parrots Dr. Graham's 
statement that he can only do so much.
    Mr. Arnett. Exactly.
    Chairman Manzullo. But here we have an outstanding public 
servant that obviously has the interests of business people at 
heart, reviews these regulations, kicks it back to the agencies 
and nothing happens. What suggestions would you have there?
    Mr. Arnett. As we said in the comments here, I think 
opening up a line of communications. I think what happens 
possibly with some of these regulations--and I hope I have not 
given the impression in these comments that we are not 
appreciative of the efforts that OIRA and OMB in general made 
the last three years in gathering these and submitting to the 
agencies. We are very appreciative of that. And that is why we 
participated in 2002 and are doing so again this time because 
we think the system represents the potential for really shining 
a light on some ridiculous regulations.
    Once the regulations gets reviewed by OIRA and gets sent to 
the agencies this seems to be where it breaks down. And I think 
the problem is the communications. I would love to see a 
communications link from the agency to the entity that 
nominated the regulation so that perhaps it isn't totally clear 
from a one or two page description of the problem and a 
recommended solution exactly what the nominating entity is 
proposing or is suggesting that it is a problem and a solution. 
And if we could get some line of communications with the 
agencies--and this could be breakdown on our end as well. 
Perhaps we need to step up to the plate better and be the 
aggressor here in contacting the agency, I don't know. As this 
process unfolds this year we plan to be more aggressive.
    But I just think a communication to the agency. And then 
some method of holding the agency more accountable for the 
answer and for their analysis and the timing of their analysis. 
I mean maybe the agencies are still reviewing some of the ones 
from 2002. But it just seems like it is a pretty lengthy period 
of time and there should have been a response by now.
    Chairman Manzullo. And I have a question for Mr. Bopp with 
regard to the--I will have to be frank with you, Society of 
Glass and Ceramic Decorators is a new one to me. We have a lot 
of associations in town. But these, these are companies, 
Andrew, that will either get a domestically made mug or mug 
made in China and then put, for example, what you have on 
there?
    Mr. Bopp. Yeah, that is correct.
    Chairman Manzullo. What is the process of putting that, the 
eagle on there, how do they do that?
    Mr. Bopp. In this case this would be actually a decal 
process. It is either done through screen printing directly 
onto the mug using ceramic colors or a decal is printed which 
is then either hand applied or machine applied to the mug. And 
that decal is printed with ceramic colors so basically it is 
the same as if it were screen printed. And that is generally 
for things like this with tighter registration, where the 
colors come closer.
    Interesting to say where they get the mug from, 95 to 98 
percent come from China. Cost of labor, that is the way that 
market is going. It is very difficult to get a mug that would 
be made in the United States. A good deal of the decorated mugs 
still come from this country but that is something that is 
shifting pretty quickly also.
    Chairman Manzullo. I guess my question, you anticipated my 
question, is that I am sure China does not have the same 
regulations that we do with regard to the environmental 
protection required of the people in your industry. That is not 
saying that we want to lower the standards. But if you can go 
back, if it is a decal of a company just pressing on a decal 
there would be no----
    Mr. Bopp. Right.
    Chairman Manzullo [continuing] Emission of any type; would 
that be correct?
    Mr. Bopp. Exactly.
    Chairman Manzullo. Okay. Now, does your association also 
represent the companies that make the decals?
    Mr. Bopp. Yes, we do.
    Chairman Manzullo. So you do both steps?
    Mr. Bopp. Right.
    Chairman Manzullo. So it would be in the companies that 
make the decals that would have the emissions?
    Mr. Bopp. In theory. There really are no emissions that you 
would think of with smokestacks with fumes going up.
    Chairman Manzullo. Okay. Give me a better word?
    Mr. Bopp. Yes. It would be really just excess material----
    Chairman Manzullo [continuing] Okay.
    Mr. Bopp.--which would be held until it is used again. I 
mean the colors are fairly expensive. If they are disposed of 
it is more in the way of rags and things like this. It is not--
that is why almost half of the companies do not emit any, any 
excess lead to the environment, which is what makes this rule 
so burdensome.
    I mean it is paperwork, again it is comparing, this 
industry is really fiercely competing with China. Obviously it 
is very labor intensive so quite a few of the larger plants 
have already gone to China. Either Chinese competition or 
Western European and, American companies moving plants there. I 
mean it is the fact of the costs of doing business. And this is 
one more very costly step for companies that makes it that much 
harder to compete. And if you are a large company, that much 
more of a factor in deciding, well, where do we put our next 
plant?
    Chairman Manzullo. I looked at the price of some mugs out 
there, some decorated mugs. And there are some that are still 
made in America.
    Mr. Bopp. Absolutely. There definitely are. And----
    Chairman Manzullo. But on the shelf the ones that come from 
China are not any cheaper.
    Mr. Bopp [continuing] That is true.
    Chairman Manzullo. Why is that? What is going on there?
    Mr. Bopp. Interestingly, the vast majority like I said do 
come from China. It may say ``made in China'' on the bottom 
because the mug is made in China but it was still decorated in 
the U.S. So there are some variables that occur there.
    As far as pricing, that could be built into our members are 
not the ones who then sell, they sell through distributor 
chains and things like this. So it would not necessarily hold 
that the wares sold in this country whether it is decorated 
here or in China would be that much of a different cost. The 
difference is in the cost in actually producing the mug.
    And of interest, one of the major manufacturers of domestic 
ceramic mugs is located actually in Arizona. And they are 
looked at quite often by groups who buy bulk mugs, let us say 
House of Representatives, that want it to say ``made in the 
United States,'' or let us say a labor union that wants it to 
say that. And they, they pay more.
    Chairman Manzullo. What is the name of the company?
    Mr. Bopp. Catalina China.
    Chairman Manzullo. Catalina China?
    Mr. Bopp. Right. It is in Tucson.
    Chairman Manzullo. And they are, they are the only 
manufacturers of mugs in the United States?
    Mr. Bopp. They are the only large, significant, yes.
    Now, I do not want to confuse that with tableware 
companies. There are still companies like Homer Laughlin China-
-is a large company that does make tableware in this country. 
But as far as blank mugs that are then sold to the small 
printers, Catalina is pretty much it.
    Chairman Manzullo. There are a lot of charitable and 
political organizations.
    Mr. Bopp. Yes.
    Chairman Manzullo. I put on a golf event, that is the 
political side of being a member of Congress, and we order out 
hats and towels and keys and everything and I insist that it be 
made in America. And we found quite interesting in the first 
order of hats that came in I said wanted these made in America. 
And the vendor said, well, they are not made in America.
    Mr. Bopp. Right.
    Chairman Manzullo. And so they came and they were shredded. 
And then we got a hold of Michelle Goodwin in Phoenix.
    What is the name of her company, Dan? Who makes hats and 
the same things that you have been having, we were trying to 
find out as to who is left in the industry in order to let 
people know who want to buy American that these companies 
should be patronized.
    Mr. Bopp. Absolutely. There are quite a few of them. In 
fact, previous testimony before the Subcommittee on Reg. Reform 
one of the decorators who actually does a lot of the House of 
Representatives mugs that you will find in the gift shop is 
from Baltimore, Maryland. So when you are buying from her you 
are buying an American decorated mug.
    However, when you would order something like that you 
should specify to her or whoever you order them from that their 
materials should come from the U.S. Because they, they are 
doing the work here but that blank mug itself very likely is 
coming from China, although it does not have to. Although, like 
I said, the vast majority of it does because it is a fairly 
labor intensive, fairly low tech process.
    Chairman Manzullo. Okay. Mr. Mason, you have got an 
industry, the plating industry that gets creamed on everything. 
And your industry absolutely is necessary to manufacturing. 
Could you give us just a couple of examples of how your 
industry, the chemicals that you use? How does it, show us the 
processing of manufacturing as to how companies like yours come 
into play?
    Mr. Mason. Well, think about an aluminum machined housing 
that in my particular case is for the infrastructure of the 
telecommunication industry. The infrastructure is what is in 
the little shed or the little house underneath the cell tower 
that you see along the highways. And the towers themself pick 
up the signals, transport them down to the little room and then 
the frequencies start to change and the signals go out, whether 
it is Motorola or AT&T or Cingular, whoever it is.
    That particular little house contains filters and 
resonators and all these things that make all this work. And 
they are silver plated. And the reason they are silver plated, 
Mr. Chairman, is because the frequency travels very well on the 
silver surface because silver, even though it may tend to 
oxidize, it does not lose its electrical characteristics. 
Whereas gold, another noble metal, will lose its 
characteristics where silver does not as it starts to tarnish.
    Chairman Manzullo. So your company would be involved in the 
silver plating of that housing?
    Mr. Mason. That is one particular instance.
    Chairman Manzullo. Okay.
    Mr. Mason. And the chemicals that we have to use is to make 
this whole process work because we have a blank piece of 
aluminum that needs silver on it. But you cannot just take that 
blank piece of aluminum and dip it into the silver tank because 
nothing will happen to it.
    So you go through these various processes which we call 
pretreatment. And in our industry pretreatment is about 95 
percent of what happens. The silver plating that we ultimately 
use is just the last step. But in that process going to the 
silver plating tank you have alkaline solutions, acid 
solutions, cyanide solutions, just about every nasty chemical 
that you can imagine or think of we use them all. And we use 
them all with caution and with understanding and knowing that 
we know what we are doing there. We take, obviously, safety 
precautions, and environmental precautions.
    I mean I am eight miles from right here so I cannot hide 
from EPA. In fact, I am very proactive, I have them in my 
facility as often as they will come so I can show them what we 
do. You know, the very idea of them writing regulations and not 
ever seeing an industry that they are writing regulations for, 
to me has always been silly. So we invite them to come and 
look.
    Chairman Manzullo. Do they come?
    Mr. Mason. Yes, they do. It started about 12 years ago 
under a program called CSI, the Common Sense Initiative under 
Administrator Browner. And we started working very closely with 
the industry. Yes, they do come. They pay attention. And we 
have, I feel, a very good relationship generally with the 
agency.
    The problem, and I think it was said very clearly here 
today, the problem with the agency is that you have a lot of 
people within that particular agency that write regulations 
because that is what they want to do. And even though, I mean I 
testified that our industry spent a million dollars for a 
faulty regulation. I mean that regulation probably would have 
put 50 percent of us out of business. It was absolutely not 
necessary, it was done with poor science, yet it was ready to 
pass.
    And I would tell you, Mr. Chairman, if you would ask me 
what can you do? I hope we all do not have to spend a million 
dollars to stop a ridiculous regulation that would have meant 
nothing to anyone, not our industry, not the public, not the 
environmental people, no one. Yet that is what it took.
    So back to your issue with chemicals, yes, we work with 
them all. We treat them with the respect they deserve. We do 
not put them in the ground, the air or anything. We put them 
nowhere that we are not allowed to do. And our industry does a 
pretty good job.
    Chairman Manzullo. Appreciate that.
    Congresswoman Velazquez?
    Ms. Velazquez. Thank you, Mr. Chairman.
    This question is really for any of you if you have followed 
the regulatory panel system that is run by OIRA and the Office 
of Advocacy, as you may know, there is a proposal before this 
Committee to increased the use of this process. And we may mark 
up the bill H.R. 2345 and vote on it in a few weeks. So if you 
or any of your industry have followed the panel process I would 
like for you to comment on these questions.
    Have you found the panel process useful? Is it costly to 
your members in terms of resources? Do you find that agencies 
do or do not do their homework in preparation for these panels? 
In other words, do they just rely on the panels to sort out the 
numbers and, therefore, do not do their homework? Has advocacy 
and/or OIRA been helpful to you in this process? Are there ways 
they can be more helpful? Do you think it is better for us and 
for you to spend the money up front when the regulation is 
promulgated in having a panel process or instead create a 
system that requires us to look back at a regulation after 
three, five or ten years when we have actual costs on which to 
base our review?
    Mr. Arnett?
    Mr. Arnett. Yes. We have not participated. I assume you are 
talking about the regulatory or Flexibility Act SBREFA panel?
    Ms. Velazquez. Correct.
    Mr. Arnett. And we have not had an opportunity as of yet to 
participate in any of those panels. I have been and 
participated with coalitions in a number of regulations where 
there had been panels. I came in toward the end. So I cannot--I 
am not in a very good position really to address the questions 
that you have raised on that.
    Ms. Velazquez. Yes. Mr. Mason?
    Mr. Mason. I know our industry has participated. I 
personally have not. I know our lobbyists have and other 
members of our industry.
    If you would like we can get comments to you after the 
meeting and would be happy to.
    Ms. Velazquez. That would be helpful.
    Mr. Mason, I was interested in your industry's job 
participation in the pilot process on the Regulatory 
Flexibility Act. In your case it was for the OSHA PEL rule?
    Mr. Mason. Yes, ma'am.
    Ms. Velazquez. It surprises me that OSHA's estimate of the 
cost for complying was off by a multiple of 60. It sounds as 
though that was not even helpful and it cost you a lot of money 
to hire analysts to help make your case. Is that common in your 
members dealing with federal agencies?
    Mr. Mason. Well, this was on top of just going through 
MP&M, the metal, products and machinery rule where we spent a 
million dollars. I would say it is getting more common because 
we are challenging today rules and regulations that will affect 
us going forward as opposed to maybe not having done that in 
years past, so.
    Ms. Velazquez. Can you recommend any action that will help 
bring the estimates back to reality without causing all these 
costs for your businesses?
    Mr. Mason. The only thing that I would say is 
communications. If we have an opportunity to address a proposed 
rule before it is proposed, and we have gotten a lot of that 
help with EPA, if we have that opportunity I think that would 
help a lot.
    Ms. Velazquez. Okay.
    Mr. Mason. But it takes a lot of work, a lot of time. And 
most of us who do this still have a business to run and a job 
to do at that business, so it is very difficult to be able to 
do that.
    Ms. Velazquez. Mr. Arnett, let us talk about OIRA. And I 
heard you when you said that of the recommendations that you 
submitted after two years no action has been taken. What would 
you recommend in terms of giving some teeth to this process to 
make it more than just window dressing?
    Mr. Arnett. Yeah, the breakdown appears to be at the point 
after the referral has been made to the agency. I think OIRA 
and in consultation with the Small Business Administration 
Office of Advocacy does a very thorough analysis of the 
submissions. The only thing I would add there would be is 
participation by the nominating entity should come into play 
there in some way.
    The same when the submissions were made we did not hear 
anything for about a year and then we got the 2003 report and 
then we learned that we had pretty good success in getting 
referrals. Because not all submissions to OIRA were referred. 
Out of the 316 I think only 162.
    So at that point that is the only thing I would suggest at 
that point.
    Now, in terms of I am not sure how you give OIRA more 
authority to force the agencies to take action and to take 
action in a particular length of time. I suppose it may involve 
some statutory changes. Congress may have to address that 
issue. In the Regulatory Right to Know Act I suppose it could 
be strengthened at that point because that I think is the 
vehicle that authorized OIRA to make these submissions to the 
agency. And I have not reviewed that act. A thorough review of 
that act might reveal some mechanism in there to give OIRA more 
authority.
    But I think it is clear that OIRA makes the submission and 
then I do not think they even feel that they have any recourse 
at that point to force the agency to take some kind of action. 
And they may not in all cases. It would require review and 
probably more manpower than OIRA presently has because I think 
they would have to determine in their own minds whether maybe 
the agency was realistic in its response not to take action.
    So it requires some judgment on their part.
    Ms. Velazquez. I, you know, it just really when you come to 
OMB and OIRA being under OMB, heads of agencies are so fearful 
of OMB. So maybe the budget process might be an avenue.
    Mr. Bopp, you mentioned in you statement Congress needs to 
address staff shortages at OIRA. How do you know that?
    Mr. Bopp. We are aware that OIRA right now is below what it 
has been, its assigned staff level.
    Ms. Velazquez. How are you aware? Who told you?
    Mr. Bopp. I believe I heard that through a meeting at 
National Association of Manufacturers perhaps.
    Ms. Velazquez. So OIRA is telling that to the association?
    Mr. Bopp. I am not sure where they heard that. But someone 
at NAM brought that up.
    Ms. Velazquez. There has to be a staffing problem when two 
years later no action has been taken. And the problem that we 
have is that when we bring agencies to come before us and 
testify regarding the adequacy of the budget submitted by the 
president they say that everything is fine and that they can 
operate with that budget.
    So it is surprising for me to read or to listen to your 
testimony talking about the lack of staffing because when they 
come before us and we ask them, Do you have the resources? they 
say, Yes, we do. So if they are telling me that they do not 
need more money I am not going to fight with them to give them 
more money.
    Mr. Bopp. That is true. I mean they would have to ask.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Chairman Manzullo. This Small Business Committee has 
oversight jurisdiction over any regulation or law impacting 
small businesses. So we are going to send a letter to all these 
agencies asking them to respond to us within 14 days as to 
what, if anything, they have done with regard to the 
recommendations that were made.
    John, if you want to work with Barry Pineles on that to 
help us bring together or have any other suggestions. And then 
we are going to send them over there and say we want you to 
answer. And then we will have a hearing and just bring them in, 
line them all up, What have you done? Seems to be the only 
thing that works around this place.
    I have a final question. Did any of you get involved in the 
ergonomics debate in 1990 when OSHA greatly underestimated the 
cost of that? Or was it--What did I say?
    Mr. Arnett. I worked on that issue with the National 
Coalition on Ergonomics. And were you talking about the--there 
was a SBREFA panel I think on it.
    Chairman Manzullo. Yes.
    Mr. Arnett. But I was not involved in that.
    Chairman Manzullo. Were any of you involved in that SBREFA 
panel?
    Mr. Bopp. No.
    Chairman Manzullo. Okay. We had the head of OSHA at the 
time come out to Rockford, Illinois. I cannot think of his 
name. He had testified here. John Crenshaw or something like 
that, whatever his name was. And he came to Rockford. In fact, 
one of our manufacturers invited him and said why don't you 
take a look at what we are doing. I told the manufacturer, I 
said you invite OSHA to come out. He said yes.
    So he came out and Cedric Blazer at Zenith Cutter and Tool 
showed him what he was doing. And then the administrator by 
coincidence was testifying before our Committee the next week. 
And he said it was very interesting because, he said, we just 
saw the most amazing thing at a constituent's place.
    I said, What happened? Well, he said, they were working on 
some big piece on one bench and he said instead of picking it 
up and carrying it over to another bench for another machine 
application he said they put it on a cart and they shoved it 
off one table, put it on the cart, rolled it to another table 
and then did their sequential machine process there.
    And I said, Well, that is the reason we had you out there 
was to show that he does not need your ergonomics regulation, 
he in fact was doing everything possible himself to come up 
with these different plans. I said, how could you ever come up 
with some type of a plan to regulate that?
    I said, let me give you a hypothetical. I said, my brother 
has a restaurant and, I said, under this plan if somebody 
washing dishes develops carpal tunnel, I said, then Frank would 
have to file a report with the Department of Labor. And I said, 
how else could you wash dishes?
    He said, well, he said,--No, wait a minute, he did not give 
the answer. He refused to answer it. I only know of one way to 
wash dishes.
    And Congressman Bill Pascrell who was on the Committee at 
that time and a great friend of ours looked at me and he said, 
Don, he says, instead of washing dishes this way, he said, wash 
them this way. They can go in the opposite direction. And we 
had made our point.
    Well, listen, we appreciate your testimony. Would have been 
helpful with regard to today's hearing from this panel is the 
fact that we will be sending a follow-up letter with a drop 
dead date on it as to why these agencies have not complied with 
these regulations or with the recommendations from OIRA from 
two years ago. I know that that will make them move faster on 
the new set of regulations that come about. That is the purpose 
of this hearing.
    Again we want to thank you for coming and the hearing is 
adjourned.
    [Whereupon, at 4:15 p.m., the Committee was adjourned.]




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