[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
THE IMPACT OF REGULATION ON U.S. MANUFACTURING: SPOTLIGHT ON DEPARTMENT 
               OF LABOR AND DEPARTMENT OF TRANSPORTATION

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

                                HEARING

                               before the

                   SUBCOMMITTEE ON REGULATORY AFFAIRS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 28, 2005

                               __________

                           Serial No. 109-70

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform


                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
------ ------

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

                   Subcommittee on Regulatory Affairs

                 CANDICE S. MILLER, Michigan, Chairman
GINNY BROWN-WAITE, Florida           STEPHEN F. LYNCH, Massachusetts
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
LYNN A. WESTMORELAND, Georgia

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                       Ed Schrock, Staff Director
                Erik Glavich, Professional Staff Member
                           Alex Cooper, Clerk
            Krista Boyd, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 28, 2005....................................     1
Statement of:
    Sessions, Stuart L., vice president, Environomics, Inc.; Jeff 
      Melby, vice president, environmental and safety, Genmar 
      Holdings, Inc.; and Joan Claybrook, president, Public 
      Citizen....................................................    86
        Claybrook, Joan..........................................   105
        Melby, Jeff..............................................    98
        Sessions, Stuart L.......................................    86
    Stidvent, Veronica Vargas, Assistant Secretary for Policy, 
      U.S. Department of Labor; and Jeffrey A. Rosen, General 
      Counsel, U.S. Department of Transportation.................    20
        Rosen, Jeffrey A.........................................    34
        Stidvent, Veronica Vargas................................    20
Letters, statements, etc., submitted for the record by:
    Claybrook, Joan, president, Public Citizen, prepared 
      statement of...............................................   107
    Lynch, Hon. Stephen F., a Representative in Congress from the 
      State of Massachusetts:
        Letter dated April 12, 2005..............................     9
        Prepared statement of....................................    16
    Melby, Jeff, vice president, environmental and safety, Genmar 
      Holdings, Inc., prepared statement of......................   101
    Miller, Hon. Candice S., a Representative in Congress from 
      the State of Michigan, prepared statement of...............     3
    Rosen, Jeffrey A., General Counsel, U.S. Department of 
      Transportation, prepared statement of......................    36
    Sessions, Stuart L., vice president, Environomics, Inc., 
      prepared statement of......................................    89
    Stidvent, Veronica Vargas, Assistant Secretary for Policy, 
      U.S. Department of Labor, prepared statement of............    23


THE IMPACT OF REGULATION ON U.S. MANUFACTURING: SPOTLIGHT ON DEPARTMENT 
               OF LABOR AND DEPARTMENT OF TRANSPORTATION

                              ----------                              


                         TUESDAY, JUNE 28, 2005

                  House of Representatives,
                Subcommittee on Regulatory Affairs,
                             Committee on Government Reform
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 2003, Rayburn House Office Building, Hon. Candice S. 
Miller (chairman of the subcommittee) presiding.
    Present: Representatives Miller and Lynch.
    Staff present: Rosario Palmieri, deputy staff director; 
Dena Kozanas, counsel; Erik Glavich and Joe Santiago, 
professional staff members; Alex Cooper, clerk; Alexandria 
Teitz, minority counsel; Krista Boyd, minority professional 
staff member; and Teresa Coufal, minority assistant clerk.
    Ms. Miller. I would like to call the hearing to order.
    Good afternoon, everyone. We are here today to discuss the 
overall progress that the Department of Labor and the 
Department of Transportation have made in responding to the 
public's reform nominations that were included in the Office of 
Management and Budget's 2005 Report on Regulatory Reform of the 
U.S. manufacturing sector. This is the second in a series of 
hearings discussing those regulations and guidance documents 
that merits priority consideration because of the impact on 
domestic manufacturing.
    For many years it has been widely acknowledged that the 
very foundation of a nation's economy is manufacturing. It is 
certainly a critical component. It is a backbone of America, 
because manufacturing actually creates goods. But it also 
creates progress, innovation, it creates economic and human 
prosperity. The manufacturing industry also helps employers and 
employees which plays a role in creating.
    For many years, the government has understood that we do 
not actually create jobs; rather, the private sector actually 
creates jobs. The role of the government has been to generate 
an environment that attracts business investments and 
encourages job creation. However, the manufacturing industry 
has come under attack lately by the very government that once 
helped to hold it together.
    Even though manufacturing provides 14 million Americans 
with jobs and accounts actually for 62 percent of all the 
imports, domestic manufacturing has lost 2.8 million jobs 
between 2000 and 2003. These are jobs that have provided a high 
quality of life for Americans because of salaries and benefits. 
In manufacturing of course, they are about 18 percent higher 
than the rest of the private sector.
    More than any other sector, manufacturers bear the highest 
share of the cost of complying with regulation. At $8,000 per 
employee, domestic manufacturers assume almost twice the 
average cost for all the other U.S. industries. Workplace 
regulations alone cost manufacturers over $2 million per firm 
per year, roughly about $1,700 per employee.
    Our global competitors do not have this large of a burden. 
Regulatory compliance has become so burdensome that those costs 
are now the equivalent of a 12 percent excise tax on 
manufacturing. Such domestically imposed costs are harming 
manufacturing and adding over 22 percent to the cost of doing 
business in the United States. And we are not the only 
developed nation with high structural costs, of course, but 
these costs are higher here in almost every category. And that 
22 or 23 percent is an enormous drag on economic growth and on 
job creation.
    The high cost of regulation, the increase in costs of 
health care and the often-unwarranted tort litigation have all 
altered the dynamics of domestic manufacturing. These new 
dynamics have hindered the international competitiveness of 
manufacturers and have constrained the demand for workers in 
U.S. facilities.
    Make no mistake, I certainly am a defender of regulations 
that protect worker health and safety. I am a defender of 
regulations that watch over consumers and safeguard our natural 
resources. In fact, I have spent about three decades in public 
service, and I have always thought of myself as a principal 
advocate of our environment. But I do think that the common 
standard must always be what is actually reasonable. And that 
is the purpose of our hearing today. I am eager to have a 
dialog about how best to improve Federal regulations for the 
benefit of all Americans. In particular, I am hopeful that this 
hearing will have a positive impact on those regulations 
flagged by OMB for priority review that are still outstanding.
    I am extremely troubled by the adverse effects some of 
these regulations could have on our ability to remain 
competitive with our key trading partners around the globe. By 
acting on the combined 16 rules and guidance documents from the 
Department of Labor and the Department of Transportation, I do 
believe that we could be one step closer to reducing the cost 
and burden on domestic manufacturing firms. The savings accrued 
by reducing the regulatory burden on U.S. manufacturers could 
be redirected into hiring new workers, investing in new 
equipment and protecting American jobs.
    Streamlining all of the unnecessary regulatory burdens on 
the manufacturing sector is a powerful antidote for 
reinvigorating the economy, for helping our small businesses 
and certainly for the competitiveness agenda that we have here 
in the United States of America, as we recognize that all of 
our manufacturers are facing much different dynamics in the 
global marketplace as well.
    [The prepared statement of Hon. Candice S. Miller follows:]

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    Ms. Miller. At this time I would like to yield to the 
ranking minority member for his opening statement.
    Mr. Lynch. Thank you, Madam Chair.
    Again, I want to thank you for leading this whole process 
and reviewing our regulatory framework in an effort to remove 
unnecessary burdens on industry.
    The manufacturing industry provides over 14 million 
American jobs, which are critical to our economy. But as 
someone who has worked in auto plants and steel mills and oil 
refineries across this country, I can tell you that 
manufacturing jobs can also be very tough and dangerous. But 
there are significantly fewer injuries and deaths today than 
just 30 years ago, because of our Federal and health safety 
requirements.
    Based on my own experience, I know how important the health 
of the manufacturing industry is to the economy and to the 
workers it employs. While I am committed to the growth of the 
American manufacturing industry, I honestly believe that 
exposing more workers to disease and injury will not accomplish 
that goal. I must admit, as a threshold matter, that I am 
concerned about OMB's approach and their activities in this 
area. In reviewing the conduct of OMB, it is apparent that OMB 
has created a regulatory hit list to focus on weakening or 
gutting many existing health, safety and environmental 
protections. This raises a lot of questions in my mind, and I 
hope that we can explore them here today.
    As a factual matter, I am concerned that weakening many of 
these regulations will hurt workers and their families. I don't 
believe that is necessary. We can have strong health, safety 
and environmental protections while at the same time growing 
manufacturing and the economy.
    Now, I will concede that there are some regulations that we 
can reform and eliminate. But I remain concerned about how OMB 
and the agencies selected the regulations which we have 
targeted. There seems to be a lack of transparency in OMB's 
process for developing this list, and OMB solicited public 
comments last year on agency regulations that should be 
reformed.
    But it is unclear how the relevant agencies and OMB got 
from a list of 189 nominations to OMB's list of 76 priority 
nominations. Accordingly, I am looking forward to hearing from 
the representatives that are with us today from DOL and the 
Department of Transportation about the selection process and 
how they will respond to the nomination on OMB's list.
    Finally, I hope we can carefully consider what weakening 
each of these targeted regulations would mean to real 
Americans. Two areas that I am particularly interested in: the 
Department of Transportation's plan to issue proposed changes 
to the hours of service rules pertaining to commercial drivers; 
and the Department of Labor's plan to propose changes to the 
Family and Medical Leave Act. Previous DOT rules limited the 
amount of time that commercial drivers could be on the road to 
10 consecutive hours with 8 hours off duty. In 2003, however, 
the Department issued a new rule that actually increased the 
number of permitted driving hours from 10 to 11, with a 
required 10-hour break between shifts.
    Madam Chair, in July 2004, the U.S. Court of Appeals for 
the D.C. Circuit vacated the Department of Transportation's 
rule, finding that the Department amazingly enough had not 
considered the effect of their rule on driver health. Now, you 
would think that would be a good place to start.
    Specifically, the court deemed the final rule to be 
arbitrary and capricious, because the agency neglected to 
consider the driver's health as a statutorily mandated factor. 
I find this unbelievable. It is my understanding that despite 
this ruling, the Department recently reissued notice of 
proposed rulemaking and comments and concerns--the same rule 
that had been vacated by the Federal Appeals Court. 
Accordingly, I am interested in whether DOT has in fact 
addressed the court's primary concern and taken driver health 
into account this time around.
    In addition, I hope the Department of Labor will not weaken 
the Federal Family Medical Leave Act. It is my understanding 
that there is interest in modifying certain definitions of 
serious illness and also extending the amount of time that a 
person must be in recovery or disabled before an event is 
eligible for FMLA consideration or inclusion.
    It is an important law that protects the rights of workers 
to take unpaid leave when they are suffering from a serious 
health condition or when they need time off to care for a new 
child or a sick family member. Under current regulations, a 
serious health condition is defined in part as a condition that 
requires more than 3 consecutive days of treatment and 
recovery.
    According to a May 26, 2005 USA Today article, one of the 
proposed changes to FMLA would amend the statute's coverage to 
only those illnesses that are serious enough to require 10 or 
more days off. The current definition protects workers who 
suffer from illnesses such as appendicitis or kidney stones or 
are severe enough to require time off for treatment but do not 
last for 10 days. Accordingly, the rollback to these 
protections would cause employees who miss work because of a 
serious illness to lose their jobs.
    Madam Chair, I would like to submit for the record a letter 
signed by over 200 groups, such as the National Partnership for 
Women and Families, the Epilepsy Foundation, the Communication 
Workers of America, the Children's Alliance of New Hampshire, 
there are also some religious groups that have signed on as 
well, urging the Department of Labor not to make any regulatory 
changes that would undercut the protections of the Family 
Medical Leave Act.
    Ms. Miller. Without objection, that will be entered.
    [The information referred to follows:]

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    Mr. Lynch. Thank you, Madam Chairman.
    The Family Medical Leave Act is just one of the important 
protections that should be addressed today. It is not perfect, 
and it could use some adjustment, some tweaking to make it 
better and fairer to employers, understandably so. But I am 
hoping to hear from Mr. Rosen and Ms. Stidvent more about the 
status of all the Department of Labor and DOT nominations.
    I want to thank you, Madam Chairman, again, you have been a 
great leader on this issue and this whole process. I thank you 
for your willingness to work with me and with the Democratic 
party on this. I look forward to hearing all the testimony here 
today, and I thank you, Madam Chairman, and I yield the 
remainder of my time.
    [The prepared statement of Hon. Stephen F. Lynch follows:]

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    Ms. Miller. Thank you.
    It is a practice of the Government Reform Committee to 
swear in all our witnesses, so the second panel as well, if you 
would also rise and then we can dispense with at the next 
panel.
    [Witnesses sworn.]
    Ms. Miller. Thank you.
    Just in the interest of moving things along, you will see 
the little boxes in front of you for the witnesses there. We 
ask you to try to keep your oral testimony to about 5 minutes. 
If you have other testimony you want to submit for the record, 
we certainly will take that of course. When you see the yellow 
light, that means you have 1 minute remaining, to just give you 
an idea to wrap it up and try to stay within the 5 minutes.
    Our first panelist today is Secretary Veronica Stidvent. 
She is the Assistant Secretary for Policy in the Department of 
Labor, and she was confirmed by the Senate on December 8, 2004. 
On a daily basis, some of Ms. Stidvent's responsibilities 
include management and implementation of policy development, 
oversight of regulations and compliance assistance strategies, 
among other duties as well. Prior to joining the Department of 
Labor, Ms. Stidvent joined the White House Chief of Staff's 
Office, and before her White House job, she was a special 
assistant to the OMB Office of Information and Regulatory 
Affairs.
    We welcome you to the committee today and look forward to 
your testimony.

STATEMENTS OF VERONICA VARGAS STIDVENT, ASSISTANT SECRETARY FOR 
POLICY, U.S. DEPARTMENT OF LABOR; AND JEFFREY A. ROSEN, GENERAL 
           COUNSEL, U.S. DEPARTMENT OF TRANSPORTATION

             STATEMENT OF VERONICA VARGAS STIDVENT

    Ms. Stidvent. Thank you. Chairman Miller and distinguished 
members of the subcommittee, thank you for the opportunity to 
appear before you today to discuss the Department of Labor's 
progress in responding to the 11 reform nominations that were 
included in OMB's 2005 Report on Regulatory Reform of the U.S. 
Manufacturing Sector.
    My written testimony addresses the Department's progress on 
each of the 11 reform nominations. I would like to highlight 
just a few of those for you now.
    Regarding permanent labor certification, one commenter was 
critical of the current process for certifying the 
unavailability of U.S. workers for positions for which foreign 
nationals are sponsored, and recommended the Department publish 
final regulations that used a broader approach and streamlined 
the certification process. The Department's Employment and 
Training Administration published the final permanent labor 
certification rule on December 27, 2004, and has implemented 
the re-engineered permanent labor certification program. The 
new process includes an e-filing capability and through the 
utilization of technology, has reduced processing times from as 
long as several years to approximately 60 days for those 
applications not identified for audit.
    Regarding the coke oven emission standard, two commenters 
recommended that OSHA update its coke oven emission standard. 
In January of this year, OSHA published Phase II of its 
Standards Improvement Project, which streamlined several 
provisions of the coke oven emissions standard. For example, 
OSHA reduced the frequency of medical monitoring for certain 
employees from semi-annually to annually after determining that 
medical evidence did not support the need for semi-annual 
monitoring.
    The next reform suggestion pertains to hazard 
communication/material safety data sheets. Several commenters 
stated that these MSDSs should be prepared using a consistent 
format and that the quality of information needed to be 
improved. OSHA is preparing proposed guidance for the 
preparation of MSDSs that will be posted on the agency's Web 
site for comment in 2005 and will be completed in 2006.
    In addition, OSHA has added to the spring 2005 regulatory 
agenda the possible modification of the Hazards Communication 
Standard to be consistent with the Globally Harmonized System 
of Classification and Labeling of Chemicals.
    Regarding OSHA's annual training requirements for separate 
standards, one commenter observed that OSHA has separate annual 
training requirements for a number of these standards, and the 
commenter pointed out that EPA includes training requirements 
for a number of regulations that are not always compatible with 
OSHA requirements. The comment recommended that the agency 
develop a single integrated training program.
    The Department's May 2005 report to OMB on this referral 
noted that OSHA does not actually require separate training 
programs for each standard that requires such training. Rather, 
employers are permitted to organize and present training in 
whatever manner is most effective for the workplace involved. 
The report also noted that OSHA has sought to avoid duplication 
of EPA's training requirements on subjects where both agencies 
have jurisdiction.
    In order to further clarify training requirements and to 
assist employers, OSHA plans to revise and update its 
publication, Training Requirements in OSHA Standards and 
Training Guidelines, before the end of 2005. These guidelines 
help employers to design, implement and evaluate their training 
programs to ensure that they are effective.
    Regarding hazard communication training, one commenter 
stated that OSHA's 2004 draft guidance on training requirements 
under the Hazard Communication Standard was too complicated for 
small businesses and recommended that OSHA develop a simplified 
approach. OSHA anticipates finalizing the draft guidance in 
2005 and expects to include a simplified approach as 
recommended.
    Furthermore, on hexavalent chromium, two commenters urged 
OSHA to minimize the impact of its final hexavalent chromium 
standard on small business. The agency is very much aware of 
the concerns of small business and other stakeholders. OSHA 
conducted a SBREFA panel review to focus on small business 
concerns prior to publishing the proposed rule, and received 
comments from many small business representatives at public 
hearings held this past February.
    Although under a court-ordered deadline to complete this 
final rule by January 18, 2006, I can assure this committee 
that OSHA will observe all the requirements applicable to the 
regulatory process and will consider the issues raised by all 
commenters as it develops this final rule.
    Finally, there are the OSHA sling standards. Two commenters 
recommended that OSHA update the sling standard to reflect the 
American Society of Mechanical Engineers consensus standard. 
OSHA does plan to update this sling standard as part of its 
regulatory project to update standards based on national 
consensus standards. OSHA is developing a guidance document on 
the selection and use of slings which it plans to issue by 
February 2006. This document will make it clear that slings 
meeting the newer ANSI/ASME standard are acceptable.
    Madam Chairman, I ask that my written testimony be 
submitted for the record. I would be happy to respond to any 
questions you may have.
    Thank you.
    [The prepared statement of Ms. Stidvent follows:]

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    Ms. Miller. Thank you, Ms. Stidvent.
    Our next witness is Jeffrey A. Rosen. He is the General 
Counsel at the Department of Transportation. Mr. Rosen was 
sworn in on December 15, 2003, and as the chief legal officer, 
he has final authority over all legal questions within his 
department and oversees the activities of over 400 attorneys in 
the Department as well.
    In the 21 years prior to his swearing in, Mr. Rosen was a 
private practice attorney with Kirkland and Ellis, where he 
built up extensive experience with matters pertaining to 
government enforcement actions, business torts, and anti-trust, 
among others. Until he joined the Department of Transportation, 
he was also a professor at Georgetown University Law Center.
    We certainly appreciate your attending today, and we look 
forward to your testimony as well.

                 STATEMENT OF JEFFREY A. ROSEN

    Mr. Rosen. Thank you. I am Jeffrey Rosen, General Counsel 
of the U.S. Department of Transportation. I am pleased to have 
the opportunity to speak with you this morning about the 
regulatory review and reform efforts of the Department.
    To fully appreciate DOT's regulatory review and reform 
efforts and our response to the specific nominations of DOT 
rules in the OMB report, it is useful to understand both the 
scope of our responsibilities and the many steps we already 
take to improve them or to eliminate them if no longer needed. 
We take that responsibility seriously. And among other things, 
DOT has been an active participant in OMB's regulatory review 
efforts.
    In OMB's review of the manufacturing sector, OMB asked DOT 
to focus on five items. Two of those involved our Federal Motor 
Carrier Safety Administration, which has among other things 
responsibility for safety in the trucking area, and three of 
the nominations dealt with the National Highway Traffic Safety 
Administration's [NHTSA] responsibilities. NHTSA primarily 
regulates automotive safety.
    So let me give you a quick update on those five areas that 
were the subject of the OMB nominations. I will start with the 
two from the Federal Motor Carrier Safety Administration. The 
first one concerned an existing rule on motor vehicle brakes. 
The National Association of Manufacturers and the National 
Marine Manufacturers Association have proposed that our Motor 
Carrier Safety Administration consider allowing commercial 
motor vehicles to use a certain type of brake, sometimes called 
surge brakes, that is now authorized for consumer uses but not 
for commercial uses.
    The status of that is that our agency is currently planning 
to publish a proposed rule on this subject in September 2005. 
So we are working on the proposed rule and we will be 
responsive to the OMB nomination with a Federal Register notice 
that should be expected in September 2005.
    With regard to the other FMCSA rule, the Small Business 
Administration's Office of Advocacy raised a question with 
regard to the hours of service regulation. The hours of service 
regulation is a somewhat lengthy and complex regulation dealing 
with the rules on how many hours truck drivers, for example, 
can work, dealing with fatigue and other kinds of requirements. 
SBA had asked that for drivers who deliver goods locally, short 
haul, that they be permitted to drive more than 11 hours.
    What I can say about that regulation is a couple of things. 
FMCSA published a Federal Register notice last February 4, 
2005, asking for public comment in response to the earlier rule 
from 2003 having been partially invalidated by the court of 
appeals. And it has been collecting input and is considering, 
among other things, how to handle short haul and other effects 
on small entities.
    This is a rule that Congress, in the last extension on the 
highway bill, provided an additional year of it being in 
effect, notwithstanding the court's decision. So the rule 
remains in effect, but unless Congress acts again, the 
congressional extension of the rule would expire at the end of 
this fiscal year.
    So FMCSA is currently working on a final rule that we 
anticipate would likely be published this August. The 
resolution of the SBA issue will be a part of that, but I can't 
tell you today what the resolution will be.
    Switching over to the three NHTSA items that were on the 
nominations list, and I see I am actually going to run over 
time, so I will try to cover all three of them very quickly.
    Ms. Miller. That is fine.
    Mr. Rosen. The one on lighting, we expect to publish a 
proposed rule in December of this year. The one on occupant 
ejection, NHTSA has published two proposed rules dealing with 
side impact protection and door latch strength in May of this 
year and in December of last year. And with regard to vehicle 
compatibility standards, NHTSA will soon be submitting a report 
to OMB on the status of research that has been conducted in 
that area, which may address whether a rule is appropriate.
    Since I see my time is coming to an end, I will stop there, 
other than to just emphasize that regulatory review and 
improvement is a very important priority for the Department of 
Transportation and will continue to have our efforts and 
attention going forward.
    [The prepared statement of Mr. Rosen follows:]

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    Ms. Miller. Thank you very much. I appreciate both of you 
coming here today. These are important issues, and I will start 
the questioning.
    I would like to address this issue that OSHA is in the 
process of looking at and that is the hexavalent chromium rule. 
I probably have learned more about that particular thing in the 
last month or so than I even knew before. Even though it is not 
a household word, if you are in a particular business, it is of 
utmost importance, certainly, to you.
    Some in the industry have actually said that the linear 
risk model that you have utilized as you have been promulgating 
your rule there over-predicts lung cancer risks, because the 
studies that OSHA was using were based on workers employed 
between the 1940's and the 1970's, when exposure was quite a 
bit higher. I am just wondering if you might have a comment on 
whether or not that is a true observation and if so, why would 
you use that kind of antiquated data basing?
    Ms. Stidvent. Madam Chairman, I will say at the outset that 
I am a bit limited in what I can discuss at this point, and 
since this is an open rulemaking and we plan to publish the 
final rule in January.
    But I can assure you that we did receive a number of 
comments on the analyses used by OSHA in this rulemaking at 
different stages. We took public comment in the requests for 
information, during the SBREFA panel, during the number of 
hearings we held in February of this year. And a number of 
stakeholders raised a variety of issues with the analyses and 
the methodology used by OSHA. We are taking all those comments 
into consideration and will look very carefully at the analysis 
used and the quality of the data that is being inputted into 
those models that OSHA is using.
    Ms. Miller. I appreciate that you have to be somewhat 
guarded, because of where you are in the rulemaking process, 
but I intend to make a few other comments, to make sure they 
are on the record and push this case. I hope you take those 
into consideration as well. Because a number of people have 
brought to my attention the fact that, and you know, it is 
interesting, but we had another hearing previous to this about 
regulatory burdens on manufacturing and the National 
Manufacturers Association had mentioned, I think I made that 
point in my opening comments, a study about structural costs 
for all of our manufacturers are about 22 or 23 points higher 
than any of our foreign trading partners, including Canada. I 
come from Michigan, that is really our largest trading partner 
in my State.
    But I was looking at a list of other countries that have 
standards as well for these particular elements, and in looking 
at what the proposal is from OSHA, we are going, I guess, from 
our current 50 down to 1, I think is the proposal that you are 
looking at in your rules. If you look at every one of our other 
competitors, Mexico at 50, even Canada, which I have always 
thought to be an extremely progressive nation, at 50, Japan, 
European Union, on and on and on, China, India, 50, 50, 50 all 
the way down the line. Sweden is at 20.
    And I am just wondering, don't you think, and I don't know 
if you can comment on this or not, but it would seem to me that 
would certainly put our industries here in the United States at 
a distinct competitive disadvantage to our foreign trading 
partners. I have heard from quite a few people in the industry 
in my area, their total consternation to the point that they 
have just said they are going to close the doors. I 
unfortunately come from a State that is continuing to bleed 
manufacturing jobs. As I say, I think we have to be very 
cognizant of the fact that OSHA requirements and other kinds of 
regulations that we pass in the past have raised our standard 
of living, have increased of course safety standards in the 
labor force, etc.
    But as a reasonable standard, reasonable being the 
operative phrase, if we put our companies at this kind of a 
disadvantage, I think we are going to lose a lot more jobs. Can 
you comment on that?
    Ms. Stidvent. Yes, that is certainly a concern that we have 
heard in a number of arenas, not just limited to hexavalent 
chromium. The question about how our work force and our 
businesses compete on a global level, that is something that we 
certainly share the concern about. Our utmost priority is the 
health and safety of workers, of course.
    In promulgating OSHA rules, we are constrained by the OSH 
Act in what we can and cannot consider. But economic and 
technological feasibility are part of that consideration. I can 
assure you that we will be looking at all of these factors as 
we move forward with the hexavalent chromium rule.
    Ms. Miller. Just one other thing on that issue. Those can't 
be the only factors, of course, that we have to look at. It is 
interesting, in this particular element, as you are going 
through your rulemaking process, I was looking at some 
testimony from a fellow who is a colonel in the Air Force who 
actually testified, apparently to OSHA, that the compliance 
with this proposed rule, ``would require major reallocation and 
that productivity would be expected to drop by 50 percent.'' In 
other words, that the proposal apparently could have some sort 
of an adverse impact on national security, because of the way 
the element is utilized with aircraft.
    I also serve on the House Armed Services Committee, so I 
raise that as well. I am not sure if you wish to comment on 
that or not, but I certainly want to raise that. I thought that 
was rather startling.
    Ms. Stidvent. Again, I hope I am not frustrating you with 
my limited responses, but----
    Ms. Miller. No problem. I just wanted to get it on the 
record.
    Ms. Stidvent. But we hear you and I can assure you that all 
of these comments and concerns from all stakeholders will be 
taken into consideration as we develop the rule.
    Ms. Miller. Thank you.
    I yield to the ranking member.
    Mr. Lynch. Thank you.
    Let me just go right back into that same issue on 
hexavalent chromium. It is my understanding that, I am a former 
welder, I used to weld stainless, I know this is a concern for 
folks in that industry. I understand that this regulation does 
not cover the construction industry, so they are not under this 
reg.
    But I am concerned that a lot of these processes have not 
changed significantly since the data was gathered. I believe 
the two studies that are out there are the Gibb study and the 
Lippold study. The Gibb study obviously is the one that is 
being criticized by some in industry because it dates back to 
between the 1940's and 1970's.
    However, it did involve 2,300 employees, and did involve 
70,000 individual routine interventions of gathering data on 
these people. The one that is being suggested by industry that 
is more recent in time involves less than 800 employees instead 
of 2,300. It involves less than 800 interventions instead of 
70,000.
    So I am reluctant to suggest that we move to something that 
is more recent in time when it is not as thorough and probably 
not as indicative or expressive of the threat that is out 
there. So my suggestion is to proceed with caution and whatever 
action you take, take it on the basis of sound evidence and not 
because India has it or because Mexico has it. Because my 
knowledge of their safety and health standards does not lead me 
to believe that is some direction that we should go in.
    I think that if manufacturers are leaving this country, it 
is because they can exchange $25 an hour workers for $1 an hour 
workers. That is the reason folks are closing up shop. And as 
someone who used to work at a GM plant, I certainly understand 
the impetus for that plant relocation to Mexico. And it was not 
because of hexavalent chromium, it was because, as I say, they 
could exchange $20 an hour jobs for $1 an hour jobs. That is 
the thing that we have to deal with.
    The second issue is that we also have trade laws and tax 
laws in this country that provide incentives for employers and 
manufacturers to relocate. Until we deal with that through our 
trade policy, that trend will continue.
    But again, I would ask with respect to this regulation on 
hexavalent chromium, just to please proceed with caution. There 
may be room here for a compromise, though I am not sure. 
Certainly I think it is right to revisit it and make sure that 
it is as effective and efficient as possible. I do not oppose 
that, but again, I would not displace the previous study 
because of the closeness in time of the, I believe it was the 
Lippold study.
    Mr. Rosen, I would like to talk to you about the hours of 
service piece. I understand we are going to leave the 11 hour 
standard in place until and unless Congress deals with it, is 
that correct?
    Mr. Rosen. I don't think I could say that. The rule that 
was issued in 2003 that has that is in place under the 
extension that Congress enacted through the end of this year.
    Mr. Lynch. That's the one that the Third Circuit actually 
vacated, is that correct?
    Mr. Rosen. The court of appeals, I think, for the D.C. 
Circuit vacated the rule, but then Congress reinstated it. And 
the current extension from Congress would expire at the end of 
the fiscal year. Our Motor Carrier Safety Administration is 
working on a rule that would be issued in August to take effect 
in the event that the current rule were to expire.
    The content of the rule that will be issued--what I am 
saying is I don't think I could say yet what it will include, 
in part because it is a pending, open rulemaking. I don't think 
I can comment exactly on what its comments will be.
    Mr. Lynch. That's not very helpful to me.
    Let me just say that there is a lot of data out there 
indicating the causality between driver fatigue and fatal 
accidents. I think at least it has been reported that about 20 
percent of those truck accidents, big truck accidents that have 
fatalities involved, 98 percent of the time, it is a person in 
a passenger vehicle, it is not the truck driver, that there is 
some fatigue involved.
    What amazes me is that the D.C. Circuit vacated the rule 
because the Department of Transportation had failed to consider 
the health of the driver when issuing and formulating its rule. 
That is particularly troubling to me. Wouldn't that be a good 
place to start, given the evidence that is out there regarding 
the connection between fatigue and fatal accidents? These are 
our families that are on the road. There is a lot of cargo 
being hauled around and a lot of these trucks are clearly 
mismatched for the road, and they are a clear threat to 
passenger vehicles on the road. These are our families and 
these are the people we are sworn to protect.
    Yet you have a rule here by the Department of 
Transportation that completely ignores that. That is troubling 
for me.
    Mr. Rosen. Well, let me say a couple of things about that.
    Mr. Lynch. Please.
    Mr. Rosen. First, the primary purpose of the FMCSA, the 
Motor Vehicle Safety Administration's regulations, is for 
trucking safety, for the safety of the motorist, to prevent 
accidents and injuries resulting from crashes with the trucks. 
With regard to the drivers, there has been a longstanding 
memorandum of understanding between FMCSA and OSHA by which 
OSHA has set some of the requirements for driver health and 
safety.
    Now, the statute, and I think what you are referencing and 
what the court of appeals was referencing, does talk about the 
physical condition of the driver as one of the criteria. I 
think it was the agency's view that factor had been considered, 
the court obviously disagreed and the court has the final say 
with regard to its ruling.
    But ultimately, it is the objective to have these things 
decided with the best available data. One of the complexities 
for a rule like this is the knowledge and the data that is 
available is not always as perfect or as extensive as might be 
liked. But in the process of working on this rule, the 
Department is in fact looking at and considering the available 
data.
    Mr. Lynch. OK, I am not sure that is--I appreciate it, Mr. 
Rosen, I really do, that you come here and testify, both of 
you, I appreciate that. I am not trying to hold you to blame 
for any of the gaps in the process, by any means. I just see a 
weakness, I guess, in the process, and I am just trying to 
point that out and asking you to take another look at it, look 
at it hard and try to remember that the court was fairly clear 
in their decision.
    There was a lot of evidence presented by the Department, 
extensive in terms of the evidence that you put forward. It is 
just that none of it covered the health of the driver. They 
were not complaining that there was not enough evidence in the 
aggregate presented, they just pointed out that none of it went 
to the health of the driver. Clearly, the health of the driver, 
not the condition of the driver, the health of the driver. I 
think that is a central concern of any attempt to draft or to 
reissue a reg in this area.
    Thank you, Madam Chair, I yield back.
    Ms. Miller. I was not going to ask this question, but as I 
was listening to my colleague talk about the health and safety 
of the driver, I have to ask you this question as well as about 
when you are actually promulgating these rules, and you are 
looking at different things. In a former life, before I got 
this job, I was a secretary of state in Michigan. I served for 
8 years as the chairperson of the Michigan Traffic Safety 
Commission. So we had a lot to do with truck driving incidents 
and different kinds of things.
    One of the biggest problems, whatever you are driving, 
whether it is trucks or cars or what have you, is driver 
distraction. Just yesterday I was at a Visteon plant in my 
district where they are doing some unbelievable things about 
simplifying within the car for police officers relating to 
driver distraction, with all the different kinds of things that 
they have. Do you ever look at those kinds of issues when you 
are looking at drivers?
    In fact, just as a follow-up to that as well, you did 
mention something about surge brakes and that you had several 
groups that came to you and talked about surge brakes, etc. Do 
you often promulgate your rules as an impetus because of 
private groups or individuals coming to you or is this 
something you just come to at your own looking at NHTSA 
statistics?
    Mr. Rosen. Taking the second half first, the impetus for 
creating new rules can come either way, from the agencies 
reviewing existing data and determining that there is either a 
safety need or an opportunity for a safety improvement that is 
sensible. So sometimes rules are self-initiated. And sometimes 
members of the public petition us or request that we institute 
rules.
    I think on the list that OMB has provided and the five that 
I am here primarily to address today, all of those are 
nominations from the public. So the rule dealing with the 
brakes is a nomination from a couple of associations as to what 
they think, what they have suggested would be an improvement 
and from their standpoint a more fair approach to the rule.
    Ultimately the primary consideration for us is the safety 
consequence. But if the rule can be improved in a way that is 
beneficial to safety or is less costly without being 
detrimental to the safety standard, then we are of course open 
to suggestions from the public as to how to improve it.
    Ms. Miller. You also mentioned in your written testimony 
about sunset provisions in some of these various regulations. 
Could you comment on your thought process? Sometimes these 
regulations seem to take on their own life and then they go on 
ad infinitum rather than ever having any kind of regulatory 
review again of how they are actually working and years go by 
and circumstances change, etc.
    What is your thought about sunsetting some of these kinds 
of things? I wonder if we ought not to codify that in many of 
the things we do in this town.
    Mr. Rosen. I would agree with that. I think it is a useful 
mechanism that we ought to do more of, because it forces you to 
reevaluate the effectiveness and accomplishments of a 
regulation and decide, is it worth continuing, does it need 
improvement or has it expired in its usefulness. I think one of 
the examples I had identified in my testimony, in the written 
testimony, was the computer reservation system rule that had 
been promulgated with a sunset provision, but a good number of 
years ago, when the economic circumstances in both the airlines 
and the airline reservation business were extremely different 
than they are today. And at a time when those systems were 
owned by the airlines, unlike today.
    So that was a good example--by having a sunset, it required 
us to take a careful look at the conditions that were prevalent 
at the sunset date, rather than because of the press of 
business or other things, just look at it at a convenient time. 
I think as a tool, it is extremely useful. It is a very 
effective way to have agencies, as I say, assess the continuing 
validity of the assumptions that went into the original rules.
    I think there will be sunset provisions that will result in 
some rules, that will have a decision made to continue them. I 
think that is likely to happen. But even then, you have the 
benefit of having made a careful, systematic, thoughtful 
decision to continue it rather than inertia or ignorance. So I 
think it is a tool that makes sense and I would like to see us, 
and others, for that matter, use more of it more often.
    Ms. Miller. I appreciate that. Shifting gears a little bit, 
but talking about a rule that was made many, many years ago, I 
think it is 36 years old, is the fire safety standard rule, 
which was brought to my attention by a number of different 
industry groups. The thing about any rule that is 36 years old, 
never having a proper review of it certainly is alarming, I 
would say, astounding is probably a good categorization of that 
as well.
    But I note in 2001 that OSHA said they could not update it 
because they did not have adequate resources. I can appreciate 
that as well. But perhaps there could be some comment on 
something else OSHA could do. Could you publish a best 
practices guide? Again, this particular rule being 36 years old 
is crazy.
    Ms. Stidvent. Yes, that is true, in many instances, as Mr. 
Rosen pointed out, because rules tend to be on the books and 
stay on the books, that happens over time. We are aware that 
there are a number of instances where we have based rules on 
consensus standards and then those consensus standards have 
become updated. We currently do not have authority just to go 
in and update the fast, easy way. We have to go through notice 
and comment rulemaking.
    So the final flammable liquid standard that you mentioned 
is part of our ongoing project to update those standards based 
on national consensus standards. That is on the agenda to work 
on and to update, and we are planning on doing so.
    Ms. Miller. I appreciate that. It is highly likely there 
will be some legislation introduced in regard to that 
particular issue.
    I would yield to the ranking member for a second round of 
questions.
    Mr. Lynch. Thank you.
    Let me ask you, I just want to go back to Mr. Rosen, we 
were talking earlier about the process, we got public input and 
I think there were 189 recommendations. Then OMB went directly 
to the individual agencies and as a result of that, it was 
pared down to I think 76 that were priority recommendations. I 
am trying to think how many of those were DOT regs, 15, was it?
    Mr. Rosen. From the original set, or how many are in the--
--
    Mr. Lynch. How many finally made the priority cut?
    Mr. Rosen. Five.
    Mr. Lynch. What was the process? I assume you were part of 
that process in going from whatever the original pool was, and 
I do not expect you to know that, but how did you go from 189 
to, in your case, 5 final regs on the hit list at the end of 
the day?
    Mr. Rosen. Ultimately you would need to ask the folks at 
OMB for exactly how they pared it down. But I think the 
process----
    Mr. Lynch. Well, they say they work with you.
    Mr. Rosen. I was going to say, I think the process included 
consultation with us and presumably the other departments as to 
our reactions to various rules, as to how significant are they, 
how far-reaching are they, how costly are they, how dated are 
they, if they are very old. And that we provided back some 
comments and observations as to those that seemed like they had 
more potential to be meaningful.
    But how the line was drawn as to say, well, here is the 
exact number, I do not know that I could illuminate very much 
for you. But I think the process is pretty much what I just 
said.
    Mr. Lynch. OK. I am just trying to figure out why some made 
the list and why some did not. It seems like there was a fairly 
broad spectrum of nominees, and I am just curious as to why 
particular regs made that list. I am just trying to get an idea 
of what that process involved.
    Mr. Rosen. Let me try this. We at DOT have done something 
of our own version of this, where we in January had a Federal 
Register notice inviting the public to comment on all of our 
regulations and then held a public meeting in April where 
people could come and tell us of places they thought our rules 
could be improved or had provisions that were unnecessary or 
really whatever they wanted to comment on.
    So we have done something parallel, and I can tell you a 
little bit about my own thought process as to how to go about 
that. I have some numbers----
    Mr. Lynch. Mr. Rosen, I appreciate it, I really do, I am 
limited in my time. I really wanted to go not to your own 
thought processes, but to the actual process of going----
    Mr. Rosen. Well, I think they are related. As I said, we 
got 66 nominations. And we are in the process of responding to 
those in a public report. Inherently there is judgment to be 
applied. That is the process that we have used, is looking at a 
whole series of criteria and factors. I would assume that OMB 
did something similar, because the consultations with us would 
reflect that.
    Mr. Lynch. Just so I am clear on this, was the requirement 
that drivers drive more hours, was that part of this process, 
instead of having 10 consecutive hours of driving, was that 
something that came out of this process?
    Mr. Rosen. No, because the process you are referencing is 
in the 2005 OMB report. The hours that were set in the current 
rule were issued by FMCSA in 2003.
    Mr. Lynch. But the issue itself, making truck drivers drive 
more hours, did that issue come out of this public comment 
process?
    Mr. Rosen. If I understand the question, I think the answer 
is no.
    Mr. Lynch. OK, good. That is fair enough. I am just asking 
a general question.
    Let me ask Ms. Stidvent a similar question. I believe there 
were a number of recommendations that were focusing on DOL, and 
then you culled it down to how many?
    Ms. Stidvent. I believe the report listed 11.
    Mr. Lynch. Do you remember how many originally were----
    Ms. Stidvent. I do not remember originally how many. Well, 
actually, my staff has been kind enough--in 2004, there were 
37. In 2005, there were 11. To answer your question about 
process, we received the public comments that had been 
submitted to OMB's report from OMB. They asked, as Mr. Rosen 
said, for our input on that.
    In many of the instances, some of the nominations were 
rulemakings we had already completed. Some of them were 
rulemakings that we were willing to consider, but given the 
workload we had, others were higher priority for us. So we 
provided that kind of feedback. Again, I think OMB could shed 
more light on exactly how they took that input from the 
agencies and reworked it. But it was a collaborative process 
where we said, this, we think, is a good idea, we are doing it 
already, it is done already, that type of thing, because a 
number of the nominations we received, because of the time 
delay and the publication of the OMB report, sometimes they are 
outdated.
    Mr. Lynch. Fair enough. Maybe I could take that up with 
OMB.
    I do want to ask you about the Family Medical Leave Act, 
though. This has been hugely important to a lot of families. We 
are requiring both spouses to work at least a couple of jobs 
nowadays. We have very little support out there for families, 
and we are supposed to be trying to help them with that. Given 
all the hours that moms and dads have to work these days and 
care for families, this is a pretty important piece of 
legislation for those families who need to raise children and 
maybe in some cases take care of parents and do a number of 
things.
    I understand that one of the proposals that is being 
floated, and I am not so sure how solid it is, but it is to 
recommend that the definition of serious health issue be 
revised to capture only those illnesses or disabilities that 
last for 10 days, versus the current definition of 3 days or 
more. Can you comment on that?
    Ms. Stidvent. Sure, I can comment on it generally and 
specifically, I think. I can tell you that my condition over 
the last 7 months has exposed me to a number of people, who, 
myself included, this definitely is a very important law. I 
think that they at the Department recognize that. It is 
important to a lot of people, as you mentioned, for a variety 
of reasons. Understanding that, we are reviewing the 
regulations, prompted in part by the Ragsdale decision and 
other court decisions.
    The proposal you mentioned, I do not know where that 
originates from. I can tell you that no decisions have been 
made at the Department on what changes to make and what 
policies to pursue. This is a deliberative process, and we have 
received a number of comments. In 2003, we met with over 20 
groups, employer and employee groups, who have a variety of 
concerns about the FMLA. We are processing all of those and 
mulling all of that over.
    No decisions have been made, so I guess I would be wary of 
reports that say that a particular policy is being pursued or 
is not being pursued. Because at this point it is definitely at 
the deliberative stage.
    Mr. Lynch. I understand. There are some reasonable 
suggestions here about the impact of the law itself. I 
understand some employers justifiably feel that they should not 
be required to give perfect attendance to employees who take 
advantage of the Family Medical Leave Act, because they are not 
physically there. That is an employee benefit, an employer 
decision that should be left with the employer, and I 
understand that.
    But on the other hand, I think 10 days is a rather long 
period of time. I had a major surgery a couple of years ago, 
and between the HMO trying to boot me out of the hospital and 
my wife not wanting me at home, I was back to work in about 8 
days. [Laughter.]
    Mr. Lynch. It was major in my mind. I just see a whole lot 
of families out there who do not have the support that I did. 
This 10-day rule could be very, very damaging to any relief 
that we might have intended to give those families. So I just 
ask you to pay close attention to that, if you could.
    Ms. Stidvent. I can assure you that we will. Other 
rulemakings will follow all the notice and comment process. So 
there will be nothing that can be rushed into implementation 
without that notice and comment process.
    Mr. Lynch. Thank you. Thank you, Madam Chair.
    Ms. Miller. Thank you very much.
    Now we will move on to the next panel, unless you have any 
more questions. I would just make one comment about the Family 
Medical Leave Act as well. It is a very important piece of 
legislation. Unfortunately, not in place when I was in your 
condition, in another lifetime, a long, long time ago.
    But I do think again, reasonableness, being reasonable, the 
operative phrase has to be the standard. You hear stories out 
in the industry about somebody who is 6 minutes late for work 
or something and then the small company has to go through an 
unbelievable burden of paperwork, etc., to give this person a 
half day off under the FMLA. I do not know all the different 
stories, but you hear these kinds of things.
    There are always people, individuals, who take advantage of 
a very good law and make it difficult for everyone to comply 
with. So I do think you need to look at some of those kinds of 
things as well. I recognize the challenges, certainly, that you 
both face.
    We appreciate both of your attendance here today. You have 
been very, very informative and enlightening. We look forward 
to working with you together as we try to do what is best for 
the American people. Thank you so much.
    Ms. Stidvent. Thank you very much.
    Mr. Rosen. Thanks for having us.
    Ms. Miller. We will take a quick break.
    [Recess.]
    Ms. Miller. I would like to call the meeting back to order.
    Our next panelist will be Mr. Stu Sessions. Mr. Sessions is 
an economist with over 25 years of experience in supervising 
and performing analysis of environmental, energy, and natural 
resource policy. Mr. Sessions also has lengthy experience in 
analysis of regulatory issues associated with air and water 
pollution and solid and hazardous material waste as well, 
having managed the division at EPA which is responsible for 
this, and also having consulted frequently in this area. He 
received a B.A. in economics from Amherst College and a Masters 
in public policy from Harvard.
    Mr. Sessions, we certainly welcome you to the hearing today 
and appreciate your attendance. The floor is yours.

STATEMENTS OF STUART L. SESSIONS, VICE PRESIDENT, ENVIRONOMICS, 
  INC.; JEFF MELBY, VICE PRESIDENT, ENVIRONMENTAL AND SAFETY, 
 GENMAR HOLDINGS, INC.; AND JOAN CLAYBROOK, PRESIDENT, PUBLIC 
                            CITIZEN

                STATEMENT OF STUART L. SESSIONS

    Mr. Sessions. Good afternoon, Madam Chair and Ranking 
Member Lynch. Thank you for inviting me to testify.
    I am here representing two manufacturing industry groups: 
the Surface Finishing Industry, representing the U.S. metal 
finishing industry; and the Specialty Steel Industry of North 
America. I will be discussing OSHA's proposed regulations 
lowering the Permissible Exposure Limit [PEL], for worker 
exposure to hexavalent chromium. The proposed regulation, as 
was discussed earlier, would reduce the current PEL from 52 
micrograms down to 1 microgram.
    Industry believes that the regulation would have three 
significant adverse effects. First, compliance costs will be 
very high. We estimate the proposed PEL will cost industry 
nearly $2.9 billion per year. A breakdown of these costs is 
given in exhibit 1 to my written testimony. This price tag 
would make this regulation one of the very most expensive 
environmental, safety or health regulations considered by the 
government in recent years.
    The high cost is due partly to the broad scope of the 
regulation. It will affect at least 35 different manufacturing 
industries, plus shipbuilding and construction, which are not 
considered to be manufacturing industries. The high cost is 
also partly due to the difficulty in reducing exposure so far 
below the current PEL.
    I will say a little about three particular manufacturing 
industries that will have the highest costs. First, aerospace 
manufacturing. The industry estimates a cost of about $1.1 
billion per year. This cost for this one industry alone would 
roughly equal the cost of the most expensive single Federal 
regulation issued during fiscal year 2004. Metal finishing, a 
second industry, we estimate a cost of $780 million per year 
for this industry.
    Both aerospace and metal finishing estimate a cost per 
employee of roughly $15,000 to $18,000 per year. And I 
reference the chairman's statement indicating that the average 
regulatory costs for manufacturing overall now is about $8,000. 
So for affected employees in these two industries, this single 
regulation would roughly double the average cost that exists 
currently.
    A third affected industry with very high costs is steel 
making and steel processing. Costs will be highest for those 
who make and process stainless steel, in particular. We 
estimate a cost of about $600 million per year for steelmakers 
and their customers. Most of the costs for steel processing 
industries will involve changing welding processes for those 
who fabricate stainless steel. These changes can reduce a 
welder's productivity by 25 to 40 percent, plus other costs.
    A second major adverse economic impact that we foresee is 
that many manufacturers will not be able to afford these high 
compliance costs, and will be forced to close. As facilities go 
out of business, the employees at these facilities will lose 
their jobs.
    One industry on which we have done detailed studies on 
facility closures and job losses is metal finishing. We 
estimate that the rule will cause half or more of all U.S. 
metal finishing shops to close. In this one relatively small 
industry, 80,000 employees in these facilities will lose their 
jobs, and another 70,000 or more jobs will be lost among 
companies who would have supplied the metal finishing shops and 
their employees.
    In my written testimony I discuss some of the other 
industries where the rule will also cause plant closures and 
job losses.
    The third major adverse impact, the added cost to comply 
with the proposed rule, will hurt manufacturers in competition 
with foreign producers. The proposed rule requires a large 
reduction in the existing standard and the chairman has already 
indicated the comparison of the proposed PEL at 1 with the 
standard that exists for most of our trading partners, which is 
on the order of 50.
    I will review the competitive impacts for a couple of the 
industries. Aerospace. For many years, aerospace has 
contributed the largest positive amount to the Nation's balance 
of trade of any other manufacturing industry. We estimate that 
this rule will add a cost penalty of about 1 percent of current 
aerospace costs, 1 percent in addition to the roughly 12 
percent that was again cited in the chairman's opening 
statement. We estimate that the 1 percent might be enough to 
tip some close aerospace competitions to foreign producers.
    Metal finishing. In recent years, the metal finishing 
industry has suffered a very sharp loss of business to Asia. 
This rule will cost the metal finishing shops that survive, I 
indicated that half or more won't, those who survive will bear 
costs on the order of 2 to 10 percent or more of their current 
cost of production.
    Steel and stainless steel. The stainless industry, many 
people are quite aware, has suffered intense foreign 
competition and currently some 25 to 30 percent of the domestic 
steel market is filled by foreign imports. This will prevent 
domestic steelmakers from passing through the cost of the 
regulations to the market and the domestic steelmakers are 
further worried that the industry's downstream customers will 
also be seriously affected by this revised PEL.
    High compliance costs by the customers will cause many U.S. 
stainless steel fabricators to outsource more operations to 
other countries. The work will be performed abroad, and the 
steel that they buy to work on will be bought abroad.
    In conclusion, the statute requires OSHA to promulgate a 
PEL that eliminates all significant health risks, but subject 
to the constraint that the standard must be technically and 
economically feasible. I have discussed the industry's belief 
that the PEL is not economically feasible for most of the 
affected industries.
    In closing, I would quickly like to comment on technical 
feasibility and health risks. In short, industry believes that 
the proposed PEL of 1 is not technically feasible for many 
affected manufacturing industries. Many facilities have found 
that the controls that OSHA identifies as adequate to meet the 
proposed PEL in fact cannot reliably reduce exposures to that 
level.
    With regard to health risks, industry is committed to 
protecting the health of its workers. Industry believes there 
is evidence of significant risks to worker health at high 
levels of exposure well above the current standard of 52. 
However, as the PEL option being considered is lowered much 
below the current standard, uncertainty about health risks 
increases, particularly for those industries where the nature 
of the exposures differs substantially from those in the 
industries on which OSHA's studies were based.
    On balance, the industry would support a reduction in the 
exposure limit to somewhere in the 20 to 25 micrograms per 
cubic meter range. Such a standard would protect worker health, 
would be operationally feasible and would avoid substantial job 
losses and the erosion of U.S. manufacturing competitiveness.
    Thank you very much.
    [The prepared statement of Mr. Sessions follows:]

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    Ms. Miller. Thank you.
    Our next witness this afternoon is Jeff Melby. Mr. Melby is 
the vice president of environmental and safety at Genmar 
Holdings, Inc. Joining Genmar in 1996, Mr. Melby's primary 
responsibilities included coordinating the environmental and 
safety programs for the nine manufacturing facilities that 
Genmar has in the United States, and leading Genmar's product 
compliance program. He is a registered professional engineer in 
Minnesota, also a member of the Minnesota State Bar.
    We appreciate your coming to Washington to testify before 
our committee this afternoon.

                    STATEMENT OF JEFF MELBY

    Mr. Melby. Thank you, and good afternoon. I am here today 
on behalf of my company as well as the National Marine 
Manufacturers Association, which represents many of my fellow 
recreational boat builders. We urge this committee to direct 
OSHA to update the spray finishing using flammable and 
combustible materials standard under 29 C.F.R. Section 
1910.107, which I will refer to as the OSHA fire safety 
standard.
    This particular rule has burdened my company and many 
others with unnecessary complication. In May 2004, NMMA 
responded to the OMB's request for regulations that are unduly 
burdensome or that need reform. NMMA nominated the outdated 
OSHA fire safety standards because they are still based upon 
the 1969 standards set by the National Fire Protection 
Association, rather than the 2003 NFPA standards, which are 
designed specifically for the recreational boat building and 
composites industries, and are based upon updated information 
and know-how.
    NFPA is the Nation's standard-bearer for fire protection 
standards, because it is comprised of the Nation's leading 
insurers as well as the firefighting community. NMMA also 
nominated the outdated Federal Motor Carrier Safety 
Administration rules prohibiting the use of surge brakes on 
trailers used for commercial purposes. I have included 
discussion of this issue in my written comments and I will work 
with the committee to address any questions that may arise in 
connection with it. But admittedly, my focus here is on the 
OSHA fire safety standards.
    As I mentioned, the NFPA fire safety standards were adopted 
by OSHA in the early 1970's, and have not been updated since 
that time, even though fire suppression technology and know-how 
has progressed dramatically. OSHA has even acknowledged that 
these standards need to be reviewed and updated, but has 
continued to do nothing about it.
    Specifically, the issue has to do with the level of fire 
protection necessary for operating a boat manufacturing plant. 
Back in the early 1990's, NMMA and the American Composite 
Fabricators Association approached OSHA and asked that the fire 
safety standards be updated. Based on these discussions with 
OSHA, we were directed to contact NFPA to have them evaluate 
spray operations at boat manufacturing plants and determine if 
the hazards from these operations warranted a change to the 
safety standards.
    Subsequently, NFPA revised its standards in 1996 by 
creating a separate chapter to address the specific hazards and 
requirements with regard to applying flammable resin in the 
manufacturer of recreational boats and other fiberglass 
composite products. The resin used to make fiberglass is 
presently regulated under the OSHA fire safety standards 
because styrene, which is present in the resin, is considered a 
class I flammable liquid. NFPA created this separate chapter 
based on extensive testing and several years of evaluation 
within the NFPA 33-34 Spray Finishing Committee.
    We then returned to OSHA in the late 1990's, requesting 
that they update the 107 standards. In fact, OSHA included this 
change in 1999 to update its unified agenda, but rescinded the 
effort in 2001, citing ``resource constraints and other 
priorities.'' Prior to the rescission, however, OSHA called 
this rule ``one of OSHA's most complex and out of date rules.'' 
Yet even with this acknowledgement, OSHA has been unable to 
correct it.
    One of the tests that was performed was to spray resin in 
an enclosed booth with no ventilation for 15 minutes. After 15 
minutes, the concentration of flammable styrene vapor in the 
booth was 690 parts per million. To put that in perspective, 
consider that the lower flammable limit for styrene vapor is 
11,000 parts per million. The reason why this type of material 
acts this way is because styrene, which usually totals about 30 
percent of the resin, does not volatilize like the solvents in 
paints and remains within the resin as it is applied and cures 
to make fiberglass.
    In fact, the NFPA tests revealed that the resin does not 
readily ignite and burns slowly when it does ignite. When OSHA 
wrote the rules back in the 1970's, they actually examined 
flammable solvents found in paints and other coatings such as 
toluene and xylene, which are extremely volatile and flammable.
    The main problem we face is that many State OSHA agencies 
and local fire departments refer to the Federal OSHA standards 
when enforcing local fire code or worker safety regulations. 
There have been countless cases in our industry, including two 
at our plants, where a State OSHA office cited us for not 
complying with the 107 standards even though the plants were in 
compliance with the updated NFPA fire safety standards.
    After expending a great deal of time and resources, 
including attorneys fees, we were able to convince one of the 
State OSHA agencies to withdraw the violation. The other State 
office refused to withdraw their citation, but did agree to a 
compromise that did not increase our operational costs to the 
extent that full compliance with the 107 standards would 
require. The expended costs and continuing operational costs in 
that case do not create a safer working environment.
    There are three points that I want you to take away from my 
testimony. First, in writing its regulation, OSHA originally 
adopted the 1969 NFPA fire safety standards and OSHA has not 
updated them since then, even though NFPA has revised the 
standard to reflect new technologies and knowledge.
    Second, OSHA has acknowledged that their standard is out of 
date and actually written letters to other industry 
manufacturers stating that if a facility is not in compliance 
with the OSHA fire safety standards but is in compliance with 
the NFPA 33 standards, OSHA would consider this a de minimis 
violation under the OSHA de minimis policy. Nonetheless, in our 
cases, State OSHAs do not follow the OSHA de minimis policy, 
which causes us manufacturers great problems.
    Finally, as you probably hear from many company 
representatives that testify on regulatory issues, it is a 
great challenge and burden to manufacturers to comply with the 
complex regulations imposed on us today by local, State and 
Federal Governments. When a regulatory agency has a rule on 
their books that they understand to be outdated and we 
understand to be outdated, something needs to be done to fix 
it. That is why I am here today, to ask you to have OSHA update 
its 29 C.F.R. Section 1910.107 regulation to reflect the NFPA 
33 Chapter 17 consensus standards.
    Thank you, and I ask that my written testimony be made part 
of the permanent record. I am available for questions.
    [The prepared statement of Mr. Melby follows:]

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    Ms. Miller. Thank you. Your written statement will be 
entered into the record, and we certainly appreciate your 
testimony here today.
    Our next witness is Joan Claybrook. Ms. Claybrook is the 
president of Public Citizen. She has an extensive career in 
automobile safety and public interest, dating back four 
decades. She has worked on Capitol Hill and in the Department 
of Transportation, as well as founding Public Citizen's 
Congress Watch in 1973 and directing it until 1977. She 
received a B.A. from Gaucher College and a law degree from 
Georgetown Law Center. We appreciate your being here today, Ms. 
Claybrook, and look forward to your testimony.

                  STATEMENT OF JOAN CLAYBROOK

    Ms. Claybrook. Thank you very much, Madam Chairman and Mr. 
Lynch. I appreciate the opportunity to testify. I am a former 
regulator myself, as administrator of the National Highway 
Traffic Safety Administration in the U.S. Department of 
Transportation. I have worked extensively in motor vehicle 
safety, but also in other regulatory areas.
    The first point I would like to make is that well designed 
regulations stimulate the economy, produce better products and 
improve the overall quality of life. While it may seem 
intuitive that regulation costs businesses a lot of money in 
jobs, there is little actual research to suggest that this is 
true. The industry mainly cites a study called Crain and 
Hopkins, which is badly flawed and inflated. The OMB often 
cites World Bank and OECD studies.
    But these studies do not in fact address the economic 
consequences of rollbacks of our well-justified health, safety, 
and environmental rules. Most of the evidence points in just 
the opposite direction in terms of the effectiveness. Just as 
pollution wastes resources, unchecked harm to society is a 
squandered opportunity to prevent injury or save lives. We all 
pay, in terms of higher insurance and medical costs, lost 
worker productivity and illness, even traffic delays.
    In the automobile area, 42,000 people die every year, 3 
million are injured. This in terms of economic costs is $230 
billion in 2000 dollars, or $800 for every single man, woman 
and child in America.
    Well-crafted regulation actually spurs innovation and 
growth. Regulation helps to protect industries from the 
consequences of short-term profit made decisions. For example, 
the fuel economy standards I issued in 1977 helped the auto 
industry when it found itself in a competitive problem during 
the domestic oil crisis of the late 1970's. Both the literature 
and the core insights from my years of participation in the 
regulatory process show that rules can improve economic well-
being. I have four that I would like to mention.
    It is far cheaper to prevent harm than to clean it up 
afterwards. Stimulating investment in sustainable practices 
also benefits industry. Regulation levels the playing field and 
reduces societal costs for beneficial innovations. Health, 
safety, and environmental rules are beneficial on balance.
    The assault on regulation is a very convenient lobbying 
strategy, and not that there are not certain areas where 
regulation should be changed, I completely agree that it should 
be, but it is far easier to blame the government standards than 
to deal with economic truths. A wealth of research shows that 
direct labor costs such as wages for comparably skilled workers 
are the major driver for industrial decisions to relocate jobs 
and not regulatory costs, which are less than 1 percent of the 
cost of shipped goods.
    While manufacturing losses are devastating, very few major 
regulatory burdens were added to the manufacturing sector since 
the 1990's and that has been, there is no reason then to blame 
regulatory burdens for changes and fundamental shifts that have 
occurred in our global economy since 2000.
    My second point is that OMB's 2000 draft report lacks 
objectivity and balance. OMB has earned more than skepticism in 
the public interest community by repeatedly publishing reports 
that make no mention of the serious objections that have been 
endlessly submitted to OMB. It is a miscarriage of OMB's 
assignment to conduct a notice and comment process on draft 
versions of its report, yet never actually respond to the 
comments that are presented.
    Every government agency in its preambles does that, and I 
commend, by the way, the Department of Transportation both for 
its extensive response to commets that are submitted to it in 
its dockets, even if they do not agree with us, and also for 
its transparency, which has been better than any other 
government agency. I don't know if you are aware of that, but 
it is excellent in terms of the availability of information of 
proposed regulations and comments. The docket is all on the 
web, and they are really a model for the government.
    I have detailed the continuing grave deficiencies of OMB's 
2000 draft report in my full written testimony.
    My third point is that OMB's hit list is an inappropriate 
interference with agency functions. First of all, the hit list 
is a list of rules to remove. They never asked us for rules to 
improve. New rules, areas where they are lacking information or 
lacking protection. So Public Citizen submitted 30 proposals 
last time to the OMB when they asked for their hit list. They 
took two of them and put them in their final version, which is 
still called a hit list, even though there are two positive 
proposals that we recommended. One was for stopping ejections 
when vehicles roll over, the other was for vehicles that are in 
a vehicle mismatch, for lessening the impact of that on the 
smaller vehicle.
    OMB casts this process as a method for unearthing common-
sense regulatory fixes. But two of the major ones highlighted 
that you have been discussing in this hearing are ongoing 
rulemaking decisions. They are not things that no one ever 
heard about or know about. They are highly controversial. One 
is the hours of service rule, which Public Citizen has been 
deeply involved in, and actually brought the lawsuit that 
overturned the rule. The other is the hexavalent chromium rule, 
which I would like to discuss further, perhaps in questions. I 
think there are some things that are inaccurate that have been 
said here today. That is also one which Public Citizen brought 
a lawsuit and forced the agency to actually act.
    I appreciate the opportunity to testify today, Madam 
Chairman, and would be pleased to answer any further questions.
    [The prepared statement of Ms. Claybrook follows:]

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    Ms. Miller. Thank you. We appreciate all of our witnesses 
being here. In regards to the auto industry and traffic safety, 
I think Government has done such a great job of regulating the 
automobile industry in the last several decades that we have 
been an integral part of driving them to bankruptcy, quite 
frankly, to the brink of bankruptcy, I think, with General 
Motors, of where they are right now, and some of the other 
problems.
    Living in Michigan, in the Motor City, I see it every day, 
these kinds of things. They are not leaving the United States 
or Michigan always because of $1 an hour jobs. That certainly 
is a part of a business decision. But I think the burden, 
unbelievable regulatory burden that the Government has placed, 
certainly the Federal Government as well as the State 
government, we have been handmaidens.
    That old saying, I am from the Government and I am here to 
help you--it is a choking grain of truth, I suppose.
    I would like to ask a question of Mr. Melby, if I could. I 
thought your testimony was interesting, sir. You mentioned a 
couple of your plants, the Genmar plants, have actually been 
cited for adhering to the outdated Federal fire standards. But 
that the States sometimes will not listen to what the Federal 
Government's lead is on this. How often does that actually 
occur? Do you have quite a bit of consternation with the way 
that the individual States are dealing with the Federal 
standards as well, and making it even worse?
    Mr. Melby. On two occasions it was States that operate 
their own, and have authority to run their OSHA programs. They 
have adopted the Federal standards. They are comfortable with 
the 107 standards as far as looking at any supporting 
information running back through that this is the consensus 
standard NFPA. It has been changed. You shouldn't cite us for 
this.
    They have told us, they do not have de minimis policies. 
They are not able to do that. The rules are the rules. If we 
wanted to take and contest it and spend the money, who knows 
how that would turn out. But they are not able to vary from the 
107 standards the way they are written.
    Ms. Miller. Does your industry have any data on what kind 
of a burden you think financially this particular, by OSHA not 
updating the fire standard, what actually the financial burden 
might be on perhaps a small business, as a general amount, and 
a large business? Any idea at all?
    Mr. Melby. I am not sure, but I can tell you what the 
standard is requiring for us in this particular part of the 
standard, which is dealing with what we put in the floor of our 
booths to keep the sticky resin off the floor. If we went with 
the flameproof cardboard that would be required under 107 as 
opposed to a workplace standard with cardboard, it was going to 
be a couple hundred thousand a year.
    And that was the reference that I made that we were able to 
compromise. We are probably going to increase our costs $50,000 
in that instance. But under the standards, what we are doing 
meets best practice.
    Ms. Miller. Now, in full disclosure, I have to tell you why 
I am asking you some of these questions. My dad built one of 
the first fiberglass boats ever, back in the 1950's. In fact, 
he had a big placque up in his shop that said, if God wanted us 
to have fiberglass boats, he would have made fiberglass trees. 
[Laughter.]
    But I am somewhat familiar with the utilization of the 
different elements that you use in the manufacturing of boats. 
This is an area that I have some interest in. I watched during 
the 1980's when the Federal Government put the Federal excise 
tax on the boat manufacturing, thinking they were going to tax 
the rich. And of course, what they did is destroy an industry 
where they just simply went to another country, quite frankly. 
And those that are rich amongst us would just order their boats 
from a different country and document them somewhere else and 
bring them in.
    So I do have some consternation with this, and it looks 
like you have some numbers there of what kind of impact this is 
actually having on your industry.
    Mr. Melby. What I have been handed, it says that the total 
boat builders with fewer than 20 employees, very, very small 
businesses, 794, the regulatory costs for these businesses 
would be approximately $5.6 million. That is a conservative 
estimate.
    Ms. Miller. And if you think of the boat manufacturing 
industry today, for the most part, outside of the larger ones, 
there are so many small boat manufacturing industries. They are 
not unionized and they are trying to comply. As has been 
indicated with a number of these different studies, the cost of 
compliance is particularly hard felt on small businesses as 
well, as they are trying to comply with these things.
    I would like to ask a question of Mr. Sessions in regard to 
the hexavalent chromium rule that we have been discussing 
somewhat today. It was interesting to me, listening to your 
testimony about what your industry estimates the cost to be. I 
wrote down here, I think you said $2.9 billion. Yet the OSHA 
estimates for compliance costs fluctuate wildly from that. Do 
you have any comment on why the huge difference?
    Mr. Sessions. Yes. OSHA's estimates are far, far smaller 
than industry estimates. I think the reasons encompass sort of 
every step in the technical process of estimating the cost of 
regulations. For example, there are a number of additional 
industries affected by the rule beyond those that OSHA 
considered, such as fiberglass insulation manufacturing, the 
mining industry, the auto repair and body shops.
    Second, for the industries that were identified as 
affected, in general, industry thinks that far more of the 
industry will be affected than OSHA assumes. For example, in 
the steel industry, OSHA estimated costs for the specialty 
steel producers but estimated no costs for the carbon steel 
producers. But in fact, some of the carbon steel operations 
will be affected.
    Or in the metal finishing industry, OSHA estimated costs 
for three particular varieties of metal finishing. But in fact, 
hexavalent chromium is used in many more varieties and in 
probably about twice as many facilities as metal finishing. So 
the number of affected industries, the number of affected 
sectors, the number of affected plants, the number of affected 
workers. For example, the U.S. Navy has estimated that ship 
repair workers, somewhere on the order of three to six times as 
many of them will be affected by the regulation as OSHA costed 
costs for.
    Beyond that, the number of entities or workers affected, 
there are differences about the capability of control 
technologies, there are strong disagreements, as I mentioned, 
about the technical feasibility of getting to one with the 
control technologies that OSHA asserts will do the job.
    Further differences in such kind of mundane things as unit 
costs, a very small portion of the cost of this rule involves 
more workers having to take showers and change their clothes 
more often. So a part of the cost analysis is, how long does it 
take a worker to shower and change. OSHA's estimate to shower 
and change was 7 minutes. We think on average it takes quite a 
bit more than that.
    So across the whole range of bits and pieces that have to 
be aggregated together to estimate costs, we disagree 
substantially with OSHA. We wish that there were more time in 
the rulemaking to sort of hash out these differences and get 
some agreement and get a more reasonable agreement on what the 
cost will be.
    Ms. Miller. OK. I would like to yield to the ranking 
member.
    Mr. Lynch. Thank you, Madam Chairman.
    Let me start with you, Mr. Sessions. To kind of follow this 
court order that required the standard to be changed, and then 
OSHA through its own process reduced the PEL from 52 micrograms 
per cubic meter to 1 microgram per cubic meter. I do know that 
the court was particularly incensed by OSHA's unwillingness to 
proceed in a timely fashion.
    Is it your estimation that the new standard, the 1 
microgram per cubic meter, is that arbitrary, or are you saying 
there is no science behind that? I just wanted to get a sense 
of your perspective, and then I am going to ask Ms. Claybrook 
the same question.
    Mr. Sessions. First, a clarification. The existing limit is 
52 right now; the 1 is a proposed new standard.
    Mr. Lynch. That's correct.
    Mr. Sessions. I think industry's opinion is that, as I 
mentioned, the standard must eliminate significant risks, but 
the standard must also be technically and economically 
feasible. Industry believes strongly that one is not 
technically nor economically feasible for most of--I don't 
know, I am not sure I should say most--for many of the 
regulated industries.
    Mr. Lynch. I was just curious. That seems to be a drastic 
shift, going to from 52 to 1. I just am not familiar with the 
methodology that was used by OSHA.
    But let me ask the same question of Ms. Claybrook.
    Ms. Claybrook. First of all, Mr. Lynch, this existing 
standard is 33 years old. It is a very old standard. And many 
of the companies and industries that are going to be covered by 
this already meet the standard of 1. So it is not something 
that is not technologically or economically feasible in many 
companies and many industries.
    There are some that have a harder time than others, which 
we will acknowledge. I think it is the electroplaters and there 
is another industry that also has difficulties with this.
    One of the solutions for a problem like this, where many 
companies can do something about this, this is a carcinogen, a 
well-recognized carcinogen that causes lung cancer. There are 
thousands and thousands, tens of thousands of workers that are 
affected by this. It is time, it is past time to do something 
about this issue. But one possible solution is under OSHA's 
authority, they can have a separate engineering control air 
limit called a CCAL that if there is justification for it, can 
have a separate limit.
    So we would urge and recommend, and we have to OSHA, that 
they address the standard as they have proposed. In fact, we 
proposed a more stringent one. But at a minimum, most companies 
will have to comply with it and can. And it has been shown in 
the industry that they can. Then where there are exceptions, to 
have this other process.
    Mr. Lynch. It sounds like progress.
    Ms. Claybrook. If I could make one other comment in 
response to the chairman's point on the use of this old data. 
The exposure time is very long for the development of lung 
cancer. And the studies that have been, the data is the best we 
have available, it is through the 1980's. So it is really not 
all that old given the development time for lung cancer.
    The linear risk model that is used is the standard for 
occupational cancer. That is the standard that is used. The 
industry-funded study, the Lippold study, acknowledges that the 
linear model is good in predicting lung cancer. So it is not 
that it is something that is not common and well understood in 
the science.
    Mr. Lynch. Thank you. Ms. Claybrook, I want to stay with 
you for a minute. I had been trying in the previous panel to 
shed a little light on the process that OMB used to target 
certain regulations. I am particularly troubled by the hours of 
service rule targeting, if you will. Could you discuss, you are 
the former NTSB administrator, and I think you might have the 
ability to speak to this, but could you speak to the issue of 
the OMB process and what the suggested changes in the hours of 
service rule might mean to the general public?
    Ms. Claybrook. First of all, to drivers, to truck drivers, 
it is the most hazardous occupation in America. Let's start 
there. There are almost 800 truck drivers a year that are 
killed in truck crashes, even though they are in these huge, 
huge vehicles; 5,000 Americans are killed, and about 130,000 
are seriously injured. So it is a huge issue.
    Between 20 and 40 percent, depending on which study you 
look at, of the crashes in trucks are from fatigue, fatigue-
related crashes. And so this is an issue of dire importance.
    The Congress in 1996 I think it was, or 1997, commanded the 
Department of Transportation to issue a new standard to protect 
the public. Instead, they issued one that increases the number 
of driving hours from 10 to 11 hours a day, even though all the 
studies show that after 8 hours there is a drastic increase in 
fatigue related crashes.
    But they didn't only do that. They also said that you have 
to have only 34 hours off before you have to start driving 
again. The overall impact of this rule is a 20 percent increase 
in driving time. Also, they did not put in the requirement for 
a black box to enforce so that there would be an efficient 
enforcement mechanism. Everybody knows that every driver has 
three log books, which they call comic books, so they have 
different ones for different purposes, one for getting paid, 
one for the police and so on.
    So that is why the court was outraged by this rule, it went 
in the opposite direction from what the Congress had asked them 
to do. Also, when the Federal Motor Carrier Safety 
Administration was created in 1999, written right into the 
statute it says that safety is the priority of this agency. So 
that is why the rule was overruled then. On the day that the 
highway bill was about to expire, on October 1st, that day they 
snuck into the highway bill a 1-year extension for keeping the 
rule that was vacated by the court. It was never debated, no 
one had a chance to discuss it.
    So it is in there for another year, and now they are doing 
a new rulemaking and it looks like they are going to try and 
keep essentially the old rule, the vacated rule, as the one 
they are going to reissue. We have been extremely upset about 
this and very concerned for both the public and for drivers.
    Mr. Lynch. Thank you. I am equally as troubled. I find it 
unbelievable. Maybe we can do something about it.
    Thank you, Madam Chair. I yield back.
    Ms. Miller. Thank you.
    I want to go back to Mr. Sessions and talking about OSHA, 
as they are going through promulgating their rule right now in 
regard to this particular element. I thought it was interesting 
when you were talking about the aerospace industry, in 
particular. I think you said $1.1 billion we could lose because 
of that. Certainly when you think of France, which is at about 
50 as well, with Airbus, and these kinds of things, it is 
rather startling, or even foreign steelmakers, you mentioned 
the steel.
    Obviously the cost of steel is something with the economic 
modeling forever changing, with China and some of the other 
emerging nations, with the cost of steel, scrap steel, etc., 
and then this rule on top of all of that is rather mind 
boggling. I have had a number of the metal finishing shops in 
my areas, just the smaller ones that have come forward with 
their consternation about this rule. Basically these fellows 
are just throwing their hands up in the air and saying, look, 
we are out of business if this happens. We're out of business. 
And you don't know if that is really true or not, but obviously 
there is great angst on their part about what is going to 
happen here.
    And you were estimating that more than half of all the 
metal finishing shops would close. I am always trying to 
understand how these estimates are actually done. What is the 
construct for these estimates? Could you talk about that a 
little bit more, why you really think half of them will close?
    Mr. Sessions. Sure. There are kind of two lines of analysis 
that get there. The starting point in estimating what the 
impact of any regulation will be is estimating the cost that 
the regulated entities will have to try to bear. For this rule, 
for example, we had engineers go to a sample of six 
representative metal finishers and work with the facility 
owners and look at their current exposure data and estimate 
exactly what they would have to do to reliably meet the 
proposed standard. They developed for these six facilities 
estimates of the cost to meet the standard.
    Then the question is, are these costs affordable. Part of 
the answer to that is, will the producer be able to pass some 
of the costs on to his customers, or will the facility owner 
have to try to absorb the cost. Essentially we had economists 
look at the markets served by each of these six facilities and 
exactly what products they were selling where, what was the 
nature of the competition. Some of them in fact were serving 
industries where they could well pass costs through, but many 
others were in cut-throat competition with producers from 
Mexico or China or whatever.
    So anyway, the next step is to assess how much of the cost 
will have to be absorbed by the facility, then you can compare 
the cost that is to be absorbed with some estimate of the 
facility's ability to pay those costs in terms of its revenues 
and its profits and its business outlook for the long term. So 
in essence, the decision as to whether a facility will close is 
a balancing of the cost impacts against the ability to pay. And 
with these six facilities ,we did a very detailed analysis on 
and concluded that at least three of them will definitely 
close. It is likely that the others would be threatened 
substantially also.
    The second half of the analysis, though, is a very similar 
analysis that the Environmental Protection Agency did a couple 
of years ago for a water pollution rule that would affect this 
very same industry. EPA did a very similar process of taking 
case study facilities, collecting economic data, estimating the 
costs and weighing the costs against the ability to pay.
    EPA concluded in this rule that a cost averaging $61,000 
would close more than half of the industry. This was another 
regulatory agency a couple of years ago. And in fact, EPA 
decided that its rule, which would cost an average of $61,000, 
they would not promulgate because it would close so much of the 
industry.
    Well, we take that as a benchmark. And here is a rule that 
we contend will cost on average more than $100,000 per 
facility. And EPA's impacts that they see at $61,000 we think 
provides substantial guidance to what we see with costs of 
$100,000 or more. So we have the case studies as well as the 
EPA study that lead us to this conclusion.
    Ms. Miller. As we sort of conclude our hearing here, do you 
have any comment on what Congress could do perhaps to 
facilitate with the various agencies and how they might 
streamline their rulemaking process or things that you have 
seen over your years dealing with the various agencies, and 
what kinds of things Congress might be able to do that would be 
helpful?
    Mr. Sessions. I think a number of the things Congress has 
done are extremely helpful already, the Small Business 
Regulatory and Enforcement Fairness Act is very important for 
identifying impacts on small entities and getting agencies to 
seriously consider alternatives that can reduce the burden on 
small entities. I think the ultimate congressional authority to 
overturn regulations if need be, it has been used very, very, 
very rarely, but that is important.
    I think there are a number of requirements, and people have 
been talking about the OMB requirements for regulatory analysis 
and the OMB list, etc. I submit that contributes to good 
analysis. It contributes to identifying the impacts on health, 
on economics, on jobs for any regulation that is under 
consideration. I think Congress in its oversight role, perhaps 
as you are doing here, encouraging agencies to take those 
requirements seriously and to do as good a job as is possible 
of identifying those impacts so that it can be sorted out and 
balancing decisions can be made, I think that is a critical 
role.
    Ms. Miller. I want to thank you all for your comments. They 
have called us for a vote.
    Do you have any other questions before we adjourn?
    Mr. Lynch. Just one final question. In the area of 
hexavalent chromium, since proper ventilation equipment and 
those types of technologies for containment are seen as 
probably the best way of addressing the danger, would it be 
helpful if Congress, if we decided to adopt this rule in this 
fashion, provided a tax credit for those who purchase this 
ventilation equipment? Would that lessen the impact of the rule 
if it were adopted?
    Mr. Sessions. I think that a significant share of the cost 
for many of the industries will be additional ventilation. And 
so a reduction in the cost of that ventilation would be 
helpful. I think there are some industries where the answer is 
not ventilation, but for many that would be very helpful.
    Mr. Lynch. It is something we might look at.
    Thank you, and I yield back, Madam Chair.
    Ms. Miller. I certainly appreciate all of you attending 
today. We appreciate your testimony so very, very much. And 
with that, we are going to adjourn the meeting.
    [Whereupon, at 3:47 p.m., the committee was adjourned.]
    [Additional information submitted for the hearing record 
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