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



                                                   S. Hrg. 102-000 
 
  AN UPDATE ON ADMINISTRATION ACTION TO REDUCE UNNECESSARY REGULATORY 
               BURDENS ON AMERICA'S SMALL MANUFACTURERS


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

                                HEARING

                               before the

            SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT

                                 of the

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                     WASHINGTON, DC, JULY 13, 2006

                               __________

                           Serial No. 109-60

                               __________

         Printed for the use of the Committee on Small Business


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


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                      COMMITTEE ON SMALL BUSINESS

                 DONALD A. MANZULLO, Illinois, Chairman

ROSCOE BARTLETT, Maryland, Vice      NYDIA VELAZQUEZ, New York
Chairman                             JUANITA MILLENDER-McDONALD,
SUE KELLY, New York                    California
STEVE CHABOT, Ohio                   TOM UDALL, New Mexico
SAM GRAVES, Missouri                 DANIEL LIPINSKI, Illinois
TODD AKIN, Missouri                  ENI FALEOMAVAEGA, American Samoa
BILL SHUSTER, Pennsylvania           DONNA CHRISTENSEN, Virgin Islands
MARILYN MUSGRAVE, Colorado           DANNY DAVIS, Illinois
JEB BRADLEY, New Hampshire           ED CASE, Hawaii
STEVE KING, Iowa                     MADELEINE BORDALLO, Guam
THADDEUS McCOTTER, Michigan          RAUL GRIJALVA, Arizona
RIC KELLER, Florida                  MICHAEL MICHAUD, Maine
TED POE, Texas                       LINDA SANCHEZ, California
MICHAEL SODREL, Indiana              JOHN BARROW, Georgia
JEFF FORTENBERRY, Nebraska           MELISSA BEAN, Illinois
MICHAEL FITZPATRICK, Pennsylvania    GWEN MOORE, Wisconsin
LYNN WESTMORELAND, Georgia
LOUIE GOHMERT, Texas

                  J. Matthew Szymanski, Chief of Staff

          Phil Eskeland, Deputy Chief of Staff/Policy Director

                  Michael Day, Minority Staff Director

            SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT

W. TODD AKIN, Missouri Chairman      MADELEINE BORDALLO, Guam
MICHAEL SODREL, Indiana              ENI F. H. FALEOMAVAEGA, American 
LYNN WESTMORELAND, Georgia           Samoa
LOUIE GOHMERT, Texas                 DONNA CHRISTENSEN, Virgin Islands
SUE KELLY, New York                  ED CASE, Hawaii
STEVE KING, Iowa                     LINDA SANCHEZ, California
TED POE, Texas                       GWEN MOORE, Wisconsin

               Christopher Szymanski, Professional Staff

                                  (ii)


                            C O N T E N T S

                              ----------                              

                               Witnesses

                                                                   Page
Aitken, Mr. Steve, Acting Administrator, Office of Information 
  and Regulatory Affairs, Office of Management and Budget........     3
Otis, Mr. Richard D., Jr., Deputy Associate Administrator, 
  Policy, Economics, and Innovation, Environmental Protection 
  Agency.........................................................     5
Fineran, Mr. Lawrence A., Vice President, Legal and Regulatory 
  Reform Policy, National Association of Manufacturers...........     7
Vargas Stidvent, The Honorable Veronica, Assistant Secretary for 
  Policy, Department of Labor....................................     9
Kovacs, Mr. William, Vice President, Environment, Technology, and 
  Regulatory Affairs, U.S. Chamber of Commerce...................    11

                                Appendix

Opening statements:
    Akin, Hon. W. Todd...........................................    29
Prepared statements:
    Aitken, Mr. Steve, Acting Administrator, Office of 
      Information and Regulatory Affairs, Office of Management 
      and Budget.................................................    31
    Otis, Mr. Richard D., Jr., Deputy Associate Administrator, 
      Policy, Economics, and Innovation, Environmental Protection 
      Agency.....................................................    35
    Fineran, Mr. Lawrence A., Vice President, Legal and 
      Regulatory Reform Policy, National Association of 
      Manufacturers..............................................    49
    Vargas Stidvent, The Honorable Veronica, Assistant Secretary 
      for Policy, Department of Labor............................    99
    Kovacs, Mr. William, Vice President, Environment, Technology, 
      and Regulatory Affairs, U.S. Chamber of Commerce...........   109
Additional material:
Roewer, Mr. James R., Utility Solid Waste Activities Group 
  (USWAG)........................................................   120

                                 (iii)




  AN UPDATE ON ADMINISTRATION ACTION TO REDUCE UNNECESSARY REGULATORY 
                BURDENS ON AMERICA'S SMALL MANUFACTURERS

                              ----------                              


                        THURSDAY, JULY 13, 2006

                   House of Representatives
        Subcommittee on Regulatory Reform Oversight
                                Committee on Small Business
                                                     Washington, DC
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2360 Rayburn House Office Building, Hon. W. Todd Akin 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Akin, Bordallo, Christensen, 
Gohmert, Kelly, Sodrel.
    Chairman Akin. The hearing will come to order. The best way 
to keep us on time is to start on time, and so we are at least 
fairly close to that.
    Good morning, and welcome to today's hearing entitled, ``An 
Update on Administration Action to Reduce Unnecessary 
Regulatory Burdens on America's small manufacturers.''
    I want to especially thank the witnesses who have taken 
time out of their busy day to participate in this important 
hearing.
    The well-being of U.S. manufacturers is a vital concern to 
this Subcommittee and to Congress as a whole. America's 
manufacturing base constitutes, roughly, 12 percent of the 
gross domestic product to the United States economy, which has 
slowly decreased in recent years. About 95 percent of all U.S. 
manufacturers are small or medium-size enterprises. Small U.S. 
manufacturers in particular have faced fierce global 
competition in recent years. Much of this competition comes 
from countries that have minimal to no regulatory compliance 
cost.
    The Administration has recognized that by reducing 
unnecessary regulatory burden. It also bolsters the strategic 
competitive position of small U.S. manufacturers in the global 
marketplace. This has been exemplified through the solicitation 
of public nominations for regulatory reform by the Office of 
Management and Budget, OMB, in 2004. These nominations 
emphasized easing the regulatory burden on small and medium 
enterprises in the manufacturing sector.
    The independent Office of Advocacy at the Small Business 
Administration and the manufacturing industrial industry 
answered by delivering 189 nominations to the Federal 
Government for the reduction of unnecessary regulation through 
rule making.
    Ultimately, of the 189, 76 nominations were selected to 
reform unnecessary regulatory burden in collaboration with the 
appropriate Federal agencies.
    On April 28, 2005, this Subcommittee held a hearing 
entitled, ``The Administration's Program to Reduce Unnecessary 
Regulatory Burden on Manufacturers: A Promise to be Kept?'' At 
that hearing, we heard testimony regarding the Administration's 
time line and commitment to reform the 76 burdensome 
regulations.
    Nearly 15 months have passed since we last addressed this 
important issue, and this Subcommittee seeks an update 
regarding the progress the Administration has made on these 
important reforms. We also hope to learn how the 
Administration's regulatory review process has benefitted by 
engaging in this collaborative effort.
    I look forward to learning more about how these regulatory 
reform initiatives are progressing and what more we can do to 
aid our Nation's manufacturers.
    I now yield to the Gentlelady from Guam, a lady who also 
hosted a wonderful party last night, Madame Bordallo.
    [Chairman Akin's opening statement may be found in the 
appendix.]
    Ms. Bordallo. Thank you, Mr. Chairman, but sad to say we 
missed you, so we'll have another one next year. He's talking 
about the 62nd anniversary of our liberation, and we had one 
here last evening.
    Mr. Chairman, thank you for calling this meeting, and I'd 
like to extend a warm welcome to our witnesses who are here 
this morning. This is, indeed, an important topic, and one that 
could have positive impact upon many of America's small 
businesses.
    I think the committee was pleased that the Office of 
Information and Regulatory Affairs, the OIRA, solicited 
recommendations to update and modify outdated or overly 
burdensome regulations. The committee's suggestion that such a 
review be made was seconded by industry groups.
    I am concerned, however, about the apparent slow progress 
made to date on this matter, and I am particularly concerned 
that the Administration has, perhaps, not committed all of the 
resources and political will necessary to complete the work.
    Small businesses expressed this concern to the committee 
last year. They said they were concerned that OIRA and others 
lacked sufficient funding to thoroughly review new regulations. 
This would lead me to believe that the office also does not 
have the resources to review burdensome longstanding ones. More 
needs to be done to help small businesses with the Federal 
regulatory and paperwork burden. This is a message that is 
often delivered to this committee, every small business 
witness, and every major association that has testified, has 
put regulatory burden at or near the top of their priority list 
during the half a dozen hearings that we have held on this 
particular issue.
    I am concerned that the regulatory burden shouldered by 
America's approximately 23 million hard working small 
businesses has increased each year, and this fact would seem to 
run counter to the assurances that this committee was provided 
that some of these burdens would be eased.
    There is no doubt that Federal red tape impacts national 
competitiveness. Federal agencies must be held accountable for 
this, including being required to undergo a regular review of 
the regulations. This should be done to ensure that the 
regulations are appropriate and reflect the pressures of modern 
business.
    I represent Guam. We are neighbors to some of the world's 
most dynamic and competitive economies, China, Singapore, South 
Korea, Australia, Japan and India, just to name a few. Small 
businesses on Guam need to be efficient in order to succeed in 
the Asia Pacific Region.
    Reducing the regulatory burdens on business, including 
reducing paperwork requirements, in an important element for 
improving America business efficiency and competitiveness in 
the world economy.
    It is this committee's responsibility to ensure that this 
task is completed, but we cannot afford to sacrifice our high 
standards. The committee has been careful in the past to ensure 
that important safeguards are dismantled. Together we must find 
intelligent ways to protect health and safety, while promoting 
fair competition.
    Again, Mr. Chairman, thank you very much for calling this 
hearing this morning, and I look forward to the witnesses' 
testimony.
    Chairman Akin. Thank you very much for those great 
comments.
    What we are going to do is, we are going to watch the clock 
a little bit closely here. Those of you who are first timers, 
there's a little set of lights there in front of you, and when 
it turns red that's when your five minutes are up. And, what 
we'll try and do is to run across all of the witnesses first, 
let each of you make a five-minute statement, and then we'll 
come over to some questions.
    And, my recommendation is that if you have some notes, 
which I would hope that you may, if you'd like to submit them 
for the record you can do that, and then just tell us the 
things that you think are most important that we need to know 
and that facilitates things moving along pretty rapidly, and 
then we'll come back with some questions. So, I'm just going to 
run right across.
    Chairman Akin. Our first witness is Steve Aitken. You are 
the Acting Director of the Office of Information and Regulatory 
Affairs, Office of Management and Budget. You haven't come too 
far, from Washington, D.C., and, Steve, I understand that at 
least on a temporary basis this project--or these series of 
projects are pretty much your area of responsibility.
    If you would proceed, you have five minutes. Thank you, 
Steve.

   STATEMENT OF STEVE AITKEN, THE OFFICE OF INFORMATION AND 
      REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET

    Mr. Aitken. I will speak briefly from my oral statement.
    Chairman Akin, Representative Member Bordallo, and 
distinguished Members of the Subcommittee--
    Chairman Akin. Steve, could you just do me a favor, pull 
that mic a little closer to you. You've got to kind of get into 
these things to get good volume for people in back. Thank you.
    Mr. Aitken. Chairman Aitken, Ranking Member Bordallo, and 
distinguished Members of this Subcommittee, I am Steven D. 
Aitken, Acting Administrator of the Office of Information and 
Regulatory Affairs, OIRA, an office within the Office of 
Management and Budget.
    Thank you for inviting me to this hearing, and for giving 
me the opportunity to testify today on the status of the 76 
manufacturing reform nominations that OIRA and the agency 
selected in March of last year.
    This is my first opportunity to testify before the 
Subcommittee. By way of background, I have worked at OMB for 17 
years. Up until the beginning of last month I have been in the 
OMB Counsel's Office, most recently serving as Deputy General 
Counsel. In early June, I began my service as OIRA's Acting 
Administrator.
    Two of OIRA's key roles are to work with the agencies in 
their development of new regulations and to stimulate the 
modernization of existing rules. One tool that OIRA uses to 
improve existing rules is our call for public reform 
nominations pursuant to what is commonly referred to as the 
Regulatory Right To Know Act.
    Under this Act, OIRA has initiated three public nomination 
processes to undertake reform of existing regulations. The 
first two nomination processes were in 2001 and 2002. OIRA's 
most recent request for public nominations was in February of 
2002, in connection with the government-wide effort to reform 
regulation of the U.S. manufacturing sector, which continues to 
be one of the most heavily regulated sectors of our economy.
    OIRA asked the public to suggest specific reforms to 
regulations, guidance documents, or paperwork requirements, 
that the commenters believed would improve manufacturing 
regulation. OIRA also mentioned it was particularly interested 
in reforms that addressed burdens on small and medium-sized 
manufacturers, where burdens tend to be relatively large. 
Finally, OIRA suggested that commenters consider the extent to 
which a benefit cost case can be made for the reform.
    In response to the request for public input, OIRA received 
189 reform nominations. OIRA evaluated the nominations along 
with the relevant Federal agencies, including SBA's Office of 
Advocacy and the Commerce Department's Office of the Assistant 
Secretary for Manufacturing and Services.
    As a result of this process, in March of last year OIRA 
issued a report on regulatory reform of the United States 
manufacturing sector. In that report, Federal agencies and OMB 
determined that 76 of the 189 nominations had potential merit, 
and justified further action.
    The March, 2005 report also identified milestones and 
deadlines. Milestones ranged from an agency performing a 
priority review and reporting to OMB, in order to determine 
appropriate next steps to an agency issuing modernized 
regulations.
    Late last year, OIRA reported on the status of each of the 
reform nominations as of the end of Fiscal Year 2005. This 
update was provided in OIRA's 2005 report to Congress on the 
cost and benefits of Federal regulations.
    During Fiscal Year 2006, agencies have continued to make 
progress on the reform nominations. According to the most 
recent information that OIRA has received, which is 
preliminary, the agencies have now completed 36 of the 76 
reform items. OIRA will continue to work with the agencies to 
verify and update the status of the 76 reforms in preparation 
for our 2006 report to Congress, in which we will provide the 
status of the reform nominations as of September 30th of this 
year.
    Several of the reforms which have already been completed 
successfully improved existing regulations, in that the reforms 
increased the net benefits of regulation while maintaining 
important environmental, health and safety protections.
    I would like to briefly mention three examples. Last 
October, EPA issued a final rule that streamlines the 
monitoring and oversight requirements for industrial facilities 
that discharge into wastewater treatment plants. This rule is 
expected to reduce burden on discharges and treatment plant 
operators by about 240,000 hours.
    Last December, EPA issued a final rule that permanently 
exempts certain categories of ``non-major'' industrial sources 
that are subject to national emissions standards, perhaps, such 
as air pollutants, the NESHAPs, and the requirement to obtain 
an operating permit under Title 5 of the Clean Air Act. EPA 
estimates that this rule will provide regulatory relief for 
over 38,000 sources, many of which are small entities.
    And, this past April EPA issued a final rule that 
streamlines the requirements under the Resource Conservation 
and Recovery Act for certain RCRA facilities. Overall, this 
rule is expected to reduce compliance costs by $2 to $3 million 
annually.
    OIRA remains dedicated to the continued implementation and 
appropriate completion of these reform initiatives. To that 
end, OIRA will continue to oversee the reform process to make 
sure that agencies make further sustained process on the 
remaining reforms that have not already been completed.
    Under the timetable that was set forth in OIRA's report 
from March of last year, in which the 76 reforms were 
announced, the agencies are to complete their actions on all 76 
reforms by the end of 2008.
    Thank you very much for the opportunity to participate 
today in this important hearing. I would be happy to answer any 
questions that you may have.
    [Mr. Aitken's testimony may be found in the appendix.]
    Chairman Akin. Thank you very much, Steve.
    You brought it in on time and under budget, so you are 
certainly starting things off well.
    Chairman Akin. Our next witness is Richard Otis, Deputy 
Associate Administrator, Policy Economics and Innovation, the 
EPA, Washington, D.C.
    Richard.

  STATEMENT OR RICHARD OTIS, POLICY ECONOMICS AND INNOVATION, 
                ENVIRONMENTAL PROTECTION AGENCY

    Mr. Otis. Mr. Chairman, Members of the Subcommittee, thank 
you very much for the opportunity to appear this morning, and I 
will try to maintain that track record of staying under five 
minutes.
    My primary purpose this morning is to discuss the EPA's 
regulatory initiatives included in OMB's 2005 report, 
``Regulatory Reform in the United States,'' and I believe the 
Subcommittee, or I should hope the Subcommittee, will be 
pleased to hear that we have made significant progress in 
meeting our commitments.
    In nominating our Administrator, Steve Johnson, President 
Bush challenged him to accelerate the pace of our Nation's 
environmental progress, while maintaining our economic 
competitiveness. This is a clear recognition by the President 
of two very important points.
    First, it recognizes that as individuals and as a Nation we 
share a strong belief in our responsibility to ensure our 
children will inherit a healthier, safer world. It is a core 
American value I believe we all share, and so does the 
President.
    Second, it recognizes that as a Nation, and as you 
indicated earlier, we face significant global economic 
challenges and opportunities. At EPA, we are acutely aware of 
both points, and join the President in seeking to ensure our 
children inherit a safer, healthier and more economically 
vibrant future, and to achieve that goal we understand we must 
continuously look for opportunities to improve our regulations, 
and through such efforts as a manufacturing initiative.
    And, in that regard, we have completed more than half of 
the commitments that are identified in the March, 2005 report, 
and are getting close to completing our work. There are several 
remaining nominations where we have a clear sense of the 
direction and the timing for resolving them, and there are 
others where the agency has made progress but is still trying 
to figure out the proper resolution. It is no surprise that 
some of those are among the more difficult and complex 
nominations.
    We have put in place a strong internal management and 
tracking system and report our progress routinely to the 
Administrator, Deputy Administrator, and OMB. I was going to 
give you an example, but Mr. Aitken gave it to you, so I will 
skip beyond that one.
    Before I sort of complete my remarks, I want to raise one 
other subject with you that I think is directly related to the 
topic of your hearing, and one that we would like to discuss 
further with members of the Committee and staff in the coming 
months, and it goes more to the heart of how EPA examines the 
value and effectiveness of our one-size-fits-all regulatory 
system, and looks towards more innovative collaborative and 
results-driven approach to achieving environmental progress and 
economic competitiveness.
    There is a substantial amount of innovative thinking and 
action occurring within our agency, state government, interest 
groups, think tanks, academia, other Federal agencies and 
industry. It is built upon the lessons that we have all learned 
over the past 35 years of EPA's history, and that innovation is 
critical to achieving the President's challenge.
    Let me give you one very quick example. EPA has a new 
environmental performance track program. It is built upon 
similar state programs, and is helping us change how we 
regulate. It encourages and rewards facilities that go beyond 
compliance and attain levels of environmental performance that 
benefit the company, the workforce communities, and the 
environment. This is a clear recognition that many companies 
have figured out how to achieve environmental excellence and 
success in the marketplace by more fully integrating 
environmental issues into their core business strategies. 
Facilities that earn membership in this program get public 
recognition and flexibility in meeting certain administrative 
and regulatory requirements where we have the legal flexibility 
to so do.
    With this program, EPA is acknowledging that we should not 
treat all regulated facilities as though they operate equally, 
but rather it makes sense for government to encourage 
facilities that have demonstrated a strong commitment to 
environmental excellence, thereby allowing us to focus our time 
and resources on those that have done less so.
    And, at a future date, perhaps, we can discuss more of 
these innovations and some of the interesting challenges and 
statutory challenges we face in heading down that path.
    On behalf of EPA, I want you to know that we are committed 
to helping small business and manufacturing, as well as 
protecting the environment, through smarter regulations and 
innovative ways of conducting our core mission.
    Thank you very much.
    [Mr. Otis's testimony may be found in the appendix.]
    Chairman Akin. Thank you very much, and also for your 
thought-provoking, little bit of a tantalizer that you threw 
out there, that we can approach things from a little different 
angle. It's very interesting.
    Chairman Akin. Our next witness is Lawrence Fineran, Vice 
President, Legal and Regulatory Reform Policy, National 
Association of Manufacturers, Washington, D.C.
    Lawrence, welcome.

 STATEMENT OF LAWRENCE A. FINERAN, LEGAL AND REGULATORY REFORM 
         POLICY, NATIONAL ASSOCIATION OF MANUFACTURERS

    Mr. Fineran. Call me Larry.
    Chairman Akin, Ms. Bordallo, thank you for the opportunity 
to testify on behalf of the National Association of 
Manufacturers, about the Administration's call in 2004 for 
regulations, especially those that affect manufacturing, that 
could be improved. If nothing else, it will help to let the 
agencies know that there is continued congressional interest in 
seeing results from this project.
    My name is Larry Fineran, and I serve as Vice President, 
Legal and Regulatory Reform Policy, for the NAM, which is the 
Nation's largest industrial trade association representing 
manufacturers in every industrial sector and in all 50 states.
    Three quarters of the NAM's membership are small and medium 
manufacturers. The special attention that manufacturing 
regulations was warranted, since at the time manufacturing was 
experiencing a recession. For the first time since World War 
II, our sector led the down turn and lagged in recovery. The 
NAM participated in a similar exercise in 2002.
    Unfortunately, none of the regulations that the NAM 
nominated for improvement in 2002 had been changed by 2004. We 
were assured, however, that this time it would be different 
because it was part of the Administration's manufacturing 
initiative. Because of our lack of success in seeing changes 
from our 2002 submission, the NAM decided to place special 
emphasis on a handful of regulations where improvement would 
truly make a difference.
    We also did a much better job of vetting the technical 
suggestions, and making sure that OIRA had enough information 
as to the problem and possible solution.
    When the list of 76 regulations was released on March 9, 
2005, the NAM was very pleased that five of its seven 
highlighted regulations were on the list. We are also pleased 
that a number of the more specific regulations--or suggestions 
for improvement were on there, and that most of the regulations 
included a timetable or action plan. We thought that this 
indicated that the progress of the agencies would be tracked by 
OIRA, thus we express our disappointment when the 2005 draft 
report on the benefits and costs of Federal regulatory programs 
did not have a status report on this project.
    And, at this point I'd like to clarify that the NAM's 
written statements, as of the 2005 final report, did not 
include a status report. The word full should have preceded 
status report, as there is an update in that final report. My 
apologies to OIRA, although it does not discuss regulations for 
which there was no progress. So, with your permission, Mr. 
Chairman, I will work with the staff to make sure the permanent 
record is clarified.
    I am glad to hear that there will be an update in the 2006 
final report.
    I can only testify about what agencies have contacted the 
NAM for follow up. I should also mention that if Members of the 
Subcommittee ask specific questions about specific regulations 
rather than process I may have to respond in writing if it's 
not my specialty area.
    I'm pleased to report that EPA has contacted us about a 
number of their regulations that we submitted, and has made 
some improvements as a result. I understand that they made 
changes to other regulations, even if they had not contacted 
us.
    In addition, we have heard from the Departments of State 
and Commerce.
    The Department of Labor is a different story. We made 
substantial suggestions for overhauling the rules implementing 
the Family Medical Leave Act, which the Supreme Court has ruled 
were not noticed properly. In addition, courts are very much in 
conflict about what the rules do say.
    The timetable for completed action was supposed to be 2005. 
We are well into 2006, and still have not seen an updated 
proposed rule.
    OSHA has been the poster child, perhaps, for agency 
intransigence. In 2002, we nominated two CFR references that 
require adherence to 1969 fire standards, and we renominated 
that rule in 2004 because OSHA had done nothing. OSHA has been 
petitioned repeatedly by affected entities to allow the use of 
modern fire standards, but the agency has refused to do a rule 
making and there's no indication that OSHA will finally act as 
a result of this project.
    For instance, this minor improvement became much larger 
when the list of 76 came out, and has no timetable for 
completion. In the meantime, we understand that marine 
manufacturers have been cited because their facilities have 
modern rather than 1969 fire standards.
    Congress also shares at least some of the blame 
responsibility for regulatory problems, as many statutes are 
nebulous, vague and/or confusing, and sometimes all three.
    With the leadership changes at OIRA and OMB, the NAM was 
concerned that agencies such as OSHA would be allowed to win 
the game of waiting it out. We were about to do our own follow 
up and publicize what, if anything, the agencies have done or 
not done. This is why we appreciate you holding this hearing. 
Your interest, and the interest shown by Representative Candice 
Miller's Regulatory Affairs Subcommittee will help to let OIRA 
and OMB, as well as the agencies, know that Congress supports 
improvements to rules affecting manufacturing.
    [Mr. Fineran's testimony may be found in the appendix.]
    Chairman Akin. You had three seconds left, that's a pretty 
good job.
    Mr. Fineran. I did skip two sentences at the end.
    Chairman Akin. Larry, thank you for your testimony, and 
also it raises some interesting questions. We'll get to those 
in just a little while.
    Chairman Akin. We now have the Honorable Veronica Vargas 
Stidvent?
    Ms. Stidvent. That's right.
    Chairman Akin. Pretty close? Okay. Assistant Secretary for 
Policy, Department of Labor, Washington, D.C.
    Veronica.

STATEMENT OF THE HONORABLE VERONICA VARGAS STIDVENT, DEPARTMENT 
                            OF LABOR

    Ms. Stidvent. Thank you.
    Chairman Akin and distinguished Members of the 
Subcommittee, I 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 in OMB's report.
    I'll briefly discuss the Department's progress on each of 
those nominations, and I've submitted written testimony that 
goes in further detail.
    Hexavalent chromium, commenters urged OSHA to minimize the 
impact of its final standard on small business. The standard 
published on February 28, 2006, incorporated many 
recommendations from the SBREFA panel and other stakeholders, 
including an extended four-year compliance period for 
engineering controls and a higher pel than the one proposed in 
the proposed rule.
    Coke Oven emission standards, commenters recommended the 
standard be revised to account for new technology and that 
medical monitoring be reduced. One commenter specifically 
recommended that OSHA finalize the changes to the Coke Oven 
emission standard proposed in Phase 2 of OSHA Standards 
Improvement Project.
    In January, 2005, OSHA published the Phase 2 final rule, 
which streamlined several provisions of the Coke Oven emissions 
standard, including reducing the frequency of medical 
monitoring for certain employees. OSHA has not taken any 
further action on the standard, however, if commenters still 
have issues of concern they can raise them as suggestions in 
response to the advanced notice of proposed rule making on 
Phase 3 of the Standards Improvement Project for moving on to 
the next phase.
    Permanent labor certification, one commenter was critical 
of the process for certifying the unavailability of U.S. 
workers for positions for which foreign nationals are 
sponsored. The Department's Employment and Training 
Administration published the final permanent labor 
certification rule on December 27, 2004, with an effective date 
of March 28, 2005, and has implemented the re-engineered 
permanent labor certification program.
    Hazard communication material safety data sheets, these are 
MSDSs, several commenters indicated the 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 completed in 
2007.
    In addition, OSHA has submitted for OMB review an advanced 
notice of proposed rule making addressing the possible 
modification of the hazard communication standard to be 
consistent with the globally harmonized standard classification 
and labeling of chemicals. This global approach to hazard 
communication include the standardized format for MSDSs, as 
well as standardized label requirements.
    Annual training requirements for separate standards. One 
commenter observed that OSHA had separate annual training 
requirements for a number of standards. The commenter 
recommended that the agency develop a single integrated 
training program.
    The Department met its obligation to provide OMB with a 
report on training requirements by May, 2005. The report noted 
that OSHA actually does not require separate training programs 
for each standard that requires training. Rather, employers are 
permitted to organize and present training in whatever manner 
is most effective for the workplace involved.
    Hazard communication training. One commenter stated that 
draft guidance OSHA made available for comment in 2004 was too 
complicated for small business. OSHA anticipates finalizing 
that draft in 2007, and the agency is considering issuing two 
products. One would be a final version for the model training 
program and the other would be a simplified approach for small 
business.
    The sling standard, too commenters recommended that OSHA 
update the sling standard to reflect the American Society of 
Mechanical Engineers consensus standard. OSHA plans to update 
the sling standard as part of its regulatory project update, 
all standards based on national consensus standards. The sling 
standard will be part of a later phase of the project. OSHA has 
developed a guidance document on the selection and use of 
slings, which it plans to issue this year. This document would 
make it clear that slings meeting the newer ANSI/ASME standard 
are acceptable.
    Guard rails around stacks of steel, one commenter objected 
to OSHA's requirement to provide either guard rails or tie off 
projections to workers who must perform their duties 48 inches 
or more above the ground. The Department, once again, met its 
obligation to provide OMB with a report on this requirement by 
May, 2005. This noted that OSHA is currently conducting a rule 
making on its walking and working surfaces standard, and will 
consider the guard rail requirement as part of that rule 
making. It also stated that OSHA reached out and contacted the 
commenter to discuss OSHA's plan, and that the commenter 
supported addressing this issue in the walking and working 
surfaces standard.
    Which brings me to walking and working surfaces. One 
commenter stated that the OSHA regulations, under some 
circumstances, require use of fixed ladders when spiral 
stairways or ship stairs would be safer. Again, the Department 
met its obligation to provide OMB a report by May, 2005, which 
stated that this issue also would be considered as part of 
OSHA's rule making on the walking and working surfaces 
standard. It stated that the agency had contacted the 
commenter, once again, and that the commenter supported 
including a flexible policy for ship stairs in the final rule.
    OSHA flammable liquids, which Mr. Fineran referred to, two 
commenters recommended that OSHA update the current rule, which 
cites the `69 fire protection standard. OSHA intends to include 
the flammable liquid standard in its ongoing project to update 
standards on national consensus standards.
    And finally, the Family Medical Leave Act, many commenters 
recommended changes to these regulations, and Federal courts, 
including the United States Supreme Court, have invalidated 
some provisions of these regulations. The Employment Standards 
Administration continues to review the issues and the 
possibility of revisions to the regulations. This remains on 
the Department's regulatory agenda. No final decisions have yet 
been reached as to what, if any, changes should be proposed.
    Mr. Chairman, this concludes my update on the status of the 
regulations. I would be glad to respond to any questions you 
may have.
    [The Honorable Veronica Vargas Stidvent's testimony may be 
found in the appendix.]
    Chairman Akin. Thank you, Veronica. I think we'll be 
getting back to you with some questions.
    Our last witness is, is it William Kovacs?
    Mr. Kovacs. Kovacs.
    Chairman Akin. Kovacs, okay. Do you go by Bill or William?
    Mr. Kovacs. I go by Bill.
    Chairman Akin. Bill, okay, Bill Kovacs, Vice President, 
Environmental Technology and Regulatory Affairs, U.S. Chamber 
of Commerce, Washington, D.C.
    Bill, proceed, thank you.

   STATEMENT OF WILLIAM KOVACS, ENVIRONMENTAL TECHNOLOGY AND 
          REGULATORY AFFAIRS, U.S. CHAMBER OF COMMERCE

    Mr. Kovacs. Thank you, Mr. Chairman and Members of the 
Committee. It is a pleasure to be here today, because 97 
percent of the members of the Chamber are small businesses. 
And, I'm going to talk About an overview of the regulatory 
efforts, because they have really been significant, and there 
really is more than just the nomination process.
    For example, Section 610 of the Regulatory Flexibility Act 
requires agencies every year to set up a plan as to how they 
are going to go back and review these regulations that are 
really out of date in many instances.
    And so, when we look at the regulatory process, Congress 
has been very good. They've got a clear and comprehensive 
effort. I mean, we've got the Small Business Regulatory 
Fairness Act, the Congressional Review Act, the Paperwork 
Reduction Act, Truth in Regulating Mandates Information, 
Government Performance and Results Act for the business plans 
data access, data quality, and several executive orders. So, 
it's not like there isn't an effort.
     And, the reason why there's so much effort on this is that 
every year agencies pass 4,000 regulations. There are 110,000 
regulations overall, 73,000 pages, and the small businesses of 
the United States have to deal with it. So, it is significant, 
and these efforts are worth doing.
    And, this covers everything from the quality of information 
used by an agency in a rule making, to conducting a cost 
benefit analysis, plans for reviewing outdated regulations, 
peer review studies so we get the science right, and finally, 
public nominations, which we applaud but it's not the only 
access.
    Now, with this comprehensive structure, there are two 
problems with it. One is, there's very little transparency in 
the entire process. The agencies don't make it easy. For 
example, on the nomination process, something that is so 
simple, they've asked us what regulations were a problem. Well, 
we tell them, but we never can find out what it is.
    The Chamber actually, two years ago, contacted every single 
entity that submitted a nomination, and 70 percent of them had 
no information on where the nomination was in the process, and 
yet, with the web all they would have to do is put the four, or 
five, or six, or ten nominations that were sent to the agency 
on the web and discuss what the status is. That would help, and 
the reason why it would help is because without knowledge 
everyone is becoming very discouraged over the process.
    If you look, in 2002, 1,700 commenters participated in the 
process. In 2004, that dropped to 41, and that's what the 
problem is, people have just -- they don't care because they 
don't think the agency is going to respond.
    And, the second point, which is just as important as no 
transparency, is there's no accountability. Once the process 
starts with the agency, the agency can do something or they 
can't do something, it's up to them. And, I'll give you an 
example under the Data Quality Act, we submitted a petition 
with EPA, and we said something very simple, you have 16 
databases, and everyone in the world uses these databases to 
determine the value of chemicals, and it goes to clean up risk 
assessment. And, we said, if you look at the 16, we ran a 
spreadsheet, the same chemical has different values on every 
database, and sometimes the value can be as much as a billion 
in difference.
    And, we then asked our contractors, go back and tell us, if 
you were involved in this Superfund site, and you used the 
transport database versus the chem fate database, what would be 
the difference in cost in clean-up? And, just depending on the 
database that you use, the difference in cost of clean-up was 
$7.5 million for one and $63 million for another. It's been two 
years since EPA has had the database petition, and they haven't 
responded, and all we've ever asked is that they put together 
an interagency working group with other agencies that really 
have scientific knowledge like this, and let's get working on 
it so that we can get the database uniform.
    We've even had government agencies in Switzerland comment 
on the need to have this consistency, because these databases 
are used throughout the world.
    So finally, I've still got a little bit of time, I have a 
few suggestions, because I really think that Congress has done 
everything that it possibly can.
    Chairman Akin. You have a minute and a half.
    Mr. Kovacs. Okay.
    It's done everything that it possibly can in terms of 
legislation to put a structure around this, to force the 
agencies to think about outdated regulations. The first thing 
is, you might consider doing a point of order to the agencies 
appropriations if they don't actually do regulatory review. 
They've got that obligation right now under 610 of the 
Regulatory Flexibility Act, but they don't do it, and they've 
had it for 20 years. They don't do it.
    I think every year we have somewhere between 20 and 30 
regulations looked at by the agencies. That's out of 110,000. 
We've got a long way to go.
    Second, I think you could amend the Government Performance 
and Results Act to include in that a requirement that they put 
their Section 610 reviews as part of their strategic plan. They 
have to do it on a five-year period that's excellent, they 
should be planning, but one of the things that they need to do 
is, how are they going to get some of these old regulations off 
the books?
    A little bit more controversial, but my third 
recommendation would be a private right of action. If they 
don't undertake these administrative proceedings, allow the 
private sector, you know, everyone in the private sector, both 
the business community, the environmental community, whoever, 
to bring a lawsuit.
    And finally, if you want to do everything administratively, 
there may be a way in which to allow the administrative law 
judges to handle these kind of regulatory reform requirements, 
so that there's someone independent of the agency that is 
handling how the agency is working with these very technical 
procedures.
    Anyway, with that, thank you very much, and I'm here to 
answer any questions.
    [Mr. Kovacs' testimony may be found in the appendix.]
    Chairman Akin. Thank you.
    For five witnesses from Washington, D.C., you gentlemen and 
lady were anything but boring. Usually, when we get D.C. 
witnesses they put our panel to sleep, but you guys did a good 
job keeping us alert this morning.
    Let me start by asking for a report card from the Chamber 
and from NAM, if you were to rate our progress on this overall 
project, I believe we started with 76 projects that were 
identified, out of 189 we went to 76, how would you rate the 
progress overall that we're making, and then if you were to 
give a grade to the various agencies. How are we doing, and has 
it varied over time?
    Larry, I'll let you go first.
    Mr. Fineran. One of the problems, Mr. Chairman, with the 
agency-specific grade, would be that we really can only know 
what happened to our nominations. I mean, OSHA, or the 
Department of Labor, has testified on some of the other work 
that they've done, that may not have come from us. So, we 
really can only tell you, talk about where we are at. So, we 
can't give an overall performance.
    Chairman Akin. Just the ones that you submitted are the 
only ones you have data on.
    Mr. Fineran. Right, exactly, but again, one part of the 
problem is--
    Chairman Akin. And, there's no report overall that says how 
we are doing per se?
    Mr. Fineran. Yes, as Bill alluded to, there really is no 
centralized system of transparency.
    Chairman Akin. Okay.
    So, from what you've seen gives you just sort of a 
statistical sampling then, how would you say we are doing, and 
has it been consistent over time, or were we doing better a few 
years ago, has it gotten worse, or better, or how do you think 
we are doing?
    Mr. Fineran. When we--in our written testimony we go into 
the fact that in 2004, when this came up in 2004, some of our 
members were very skeptical, they didn't even give us any 
regulations, because they had participated in 2002, and they 
saw nothing had really come out of that exercise, and so they 
just didn't think it was worth it to have their companies go 
through that process again, because it's not easy to do. You 
would think that the companies could just do it off the top of 
their head, but they want to get it right.
    The difference between 2002 and 2004 really is that OIRA 
really did want benefit cost analysis, which I understand, but 
it's kind of hard, very hard for trade associations to do that 
unless they've been dealing with the regulation for a number of 
years, because we just don't have the money to do a benefit 
cost regulation on the number of regulations that we ended up 
nominating.
    Even on the seven that we highlighted, we couldn't do, we 
couldn't afford to do a benefit cost--
    Chairman Akin. Of the seven you highlighted, how many of 
those are complete and done, signed, sealed, delivered?
    Mr. Fineran. Complete and done, I am not sure I know that. 
Well, five made the list, one of them was particulate matter, 
which was being reviewed under a different process, so we 
understand why that was not on the list.
    Of the others, I can tell you the FCC do not fax rule is 
definitely finished, because Congress had to pass a statute 
there, and you did.
    On the other regulations, I believe that they are still 
working on them, I'll defer to Rick on that, like definition of 
solid waste I believe.
    Another one, TRI regulatory burden, unfortunately, you 
know, EPA did respond to that, and did make changes in response 
to the burdensome paperwork. Unfortunately, though, the House 
did recently respond, and denied funding for that rule to be 
implemented.
    Chairman Akin. So, of the five, you've got one done for 
sure.
    Mr. Fineran. Right, we've got one done, and--
    Chairman Akin. And, the House messed up one of them.
    Mr. Fineran. Right.
    Chairman Akin. Okay.
    Mr. Fineran. And, I believe the other three EPA is working 
on them.
    Chairman Akin. And so, there's three that are in process.
    Mr. Fineran. Right.
    Chairman Akin. Of the five, and those five were submitted 
when?
    Mr. Fineran. Back in 2004, May, I guess, of 2004.
     Chairman Akin. 2004?
    Mr. Fineran. Yes.
    Chairman Akin. So, a couple years on those. Okay.
    Mr. Fineran. But, you've got to remember, the list was not 
released of the finished by OIRA until the end of 2004, and the 
list didn't come out until March of 2005, so it's been more 
like a little bit over a year.
    Chairman Akin. Okay.
    I want to ask you the same question, Bill.
    Mr. Kovacs. Sure. I guess I probably wouldn't be--some of 
the regulations, for example, have been settled by court, new 
source review, others the programs have died, like 
environmental justice, so it's very hard to sit here.
    But, I don't want you to forget that the process was in 
2001 and 2002, we have a chart here, for example, in 2001 there 
were 23 high priority items designated by OIRA, and literally 
nothing happened with those, and I don't even know that there 
was a report. They just sort of disappeared.
    In 2002, there were 161, and out of that 45 candidates 
emerged and went to the agency. So, there again, they were just 
lost, and the next year there was no nomination process.
    So, that's where the discouragement came in, and then by 
the fact that you can't get timely information, which is the 
key, and there's no reason for that in the internet age, you 
don't have people willing to participate in the process because 
when you enter into this regulatory process, whether it be just 
nominations, and I keep on saying that's only one part of what 
Congress set up, it takes an enormous amount of effort. You 
have to have people who understand how the regulation works in 
the real world, and then how it's processed, and then we have 
to put it in writing to the agency.
    So, when we go out to hundreds of members, which we do, to 
get a list of 16, 35 in one year, and about 40 in another year, 
you are asking them to do a lot of work. So, I would say that I 
would probably give them a C, and the reason I would give them 
a C is because both Congress and OIRA, for the last year, at 
least on the manufacturing regulations, have put an enormous 
amount of pressure on OIRA, and OIRA is now talking to the 
agencies, but prior to that time there was no one speaking to 
anyone. They just sent it there, and whatever the agency did, 
and I think OIRA's last testimony before the Government Reform 
Committee was, they weren't really sure what all the agencies 
were doing themselves, whether they were trying to compile it.
    Chairman Akin. I'm going to try and follow my own rules. My 
five minutes are up. I've been joined by three fantastic 
colleagues, Mr. Sodrel, and Ms. Kelly to my right, and Ms. 
Christensen to my left.
    Just a quick review of what we are talking about here. 
There was a process put together to try to streamline and get 
rid of red tape in various agencies, and so what happened is, a 
bunch of small businesses have made recommendations, of 189 
there were 76 that were called out as top priorities. We are 
taking a look at the progress that the agencies have made on 
those various projects, and what needs to be done to possibly 
effect that process, or to encourage further changes.
    So, with that, I'm going to turn to my Ranking Member for 
five minutes.
    Ms. Bordallo. Thank you very much, Mr. Chairman.
    I don't know whether the progress is as good as we felt it 
was going, but I have, first of all, I have a copy of the--it's 
the congressional report, 2005 report to Congress on costs and 
benefits of Federal regulations, and I notice that, and I just 
want a yes or a no to this first question.
    Many of the ones that they categorized as done were merely 
reports to OMB on the issue, no changes. Many of the 36 they 
say are done are disputed. I'd like to ask you that, Mr. 
Aitken, do you say this is true? Is done done, or is it just a 
report filed?
    Mr. Aitken. In developing the 76 reform nominations, OIRA 
and the agencies reviewed the nominations that had been 
received and made determinations on a case-by-case basis, based 
on the knowledge that the agency and OMB had at the time, 
whether the next step would be to do further research and 
prepare a report on an issue, which would then help to inform 
whether further rule making would be appropriate, or whether 
there was sufficient information and knowledge to be able to go 
forward and say at that point that the agency should move 
forward and take regulatory action.
    And so, therefore, for some of the nominations the 
preparation of a report was what was decided as the best course 
of action.
    Ms. Bordallo. What have you done with these reports? I 
mean, when I see something done, I think it's done, it's gone 
through everything, regulations are in place, and we go 
forward.
    Mr. Aitken. I would need to look into that and get back to 
you.
    Ms. Bordallo. Would you give that to the Committee, Mr. 
Chairman? Yes. All right.
    We've been at this for a number of years. Mr. Kovacs, how 
do you feel about the done that they have on this report?
    Mr. Kovacs. Well, you know, it's hard--you know, you've got 
to leave some discretion with the agencies. The problem is, 
done sometimes is the easiest way out, and I guess we keep on 
coming back, the nominations are great, but you have a process 
in place with Section 610 of the Regulatory Flexibility Act, 
which requires the agency, not periodically, not on 76 regs, or 
something, but every year to sit down and think about what is 
it that we are going to do, because we've got 110,000 
regulations, and the Congress is never going to get their 
handle on it. Industry is never going to get their handle, but 
the agency is the one entity that gets the complaint, knows 
what the problem is, knows what the practical thing is, and 
they need to begin bringing groups together within the agency 
to say, we've heard this from this group or that group and how 
do we work these regulations.
    And, a lot of the regulations, frankly, are simple business 
practices right now. They've been there for a long time, and we 
need to leave them there, but there are a lot of regulations, 
like the definition of solid waste with EPA, which they are 
handling now and was on the list, which is something that's 
been going on since 1976. They've got to figure out how to do 
it.
    Ms. Bordallo. Thank you, thank you very much.
    Now, my second question is, last year I recommended that we 
meet with our counterparts in other countries, to discuss 
regulations and their lack of humane and appropriate 
regulations and appropriate standards.
    At that time, the panel mentioned ten European countries 
that we have had regulatory talks with or traded ideas with, 
but not one Asian country at that time. Shouldn't we be doing 
something to systematically keep track of the regulation and 
laws that influence our competitors? Do we have a strategy to 
work with our competitors, including Asian countries on basic 
health and human safety regulations and innovative ideas? And, 
can you give us an update of the progress of the toxic release 
inventory rule, and the spill prevention petroleum counter 
measure reforms?
    I don't know whether Mr. Aitken, would you--or whoever 
would like to take this up, what are we doing with the Asian 
countries? Have we improved?
    Mr. Aitken. I'm not familiar.
    Ms. Bordallo. Can anybody answer that?
    Yes.
    Mr. Otis. Yes, let me--
    Ms. Bordallo. Mr. Otis.
    Mr. Otis. Both the spill control and the toxic release 
inventory, I'm probably the best person to respond to both of 
those.
    With respect to your question on Asian countries, the 
Administrator of the agency was in China for about a ten-day 
period about a month ago, and that was our first step towards 
beginning to build at that level more concrete relationship 
with the State Environmental Protection Administration, SEPA, 
in Beijing. He was in Shanghai and several other cities, and so 
we are--we are beginning that process.
    It is not an easy one for us, in the sense that we have no 
institutional mechanisms within the agency to do this sort of 
thing, but we recognize some of the issues that you are talking 
About and have clearly begun to do that at a senior level.
    Ms. Bordallo. All right.
    I guess my time is up, Mr. Chairman, but I certainly hope--
this is an important aspect.
    Mr. Otis. I would love to talk to you further about it.
    Ms. Bordallo. Thank you.
    Chairman Akin. I don't recall the order of people coming 
in. Mr. Sodrel, I think you were next, is that correct? Do you 
have question or answer?
    Mr. Sodrel. Yes, thank you, Mr. Chairman.
    You know, I came a small business background, and when you 
keep talking about 76 I thought about 1776. Thomas Jefferson 
wrote a paragraph in the Declaration of Independence that 
always sticks with me. He said, when he is giving a reason to 
separate our relationship with King George, he said, ``He has 
erected a multitude of new offices and sent hither swarms of 
officers to harass our people and eat out their substance.'' It 
sounds kind of contemporary to me.
    Since the system of suggesting that agencies change does 
not work very well, and I'd like to address this to both NAM 
and the Chamber representatives. You talked a little bit about 
ALJ relief, or civil court, or some other standard, 
unfortunately, agencies have a vested interest in maintaining 
the status quo, or growing the organization, I mean, that's 
just human nature. They don't want to make the agency smaller. 
They don't want less influence. It tends to grow. So, how would 
you suggest that we enforce some discipline?
    Mr. Kovacs. Sir, I do have one comment on that. When we 
were going through some of the more recent efforts, not the 
nominations, but like the guidelines for data quality, which 
really goes to the heart and soul of the rule making process, 
literally, there was not one agency, and you can go to the 
transcripts that they would have, like at the National Science 
Foundation and other public events that ever supported these. 
All they ever talked about is how opening up the agency and 
using good information, I mean, we are talking about agencies 
using good information, up to date, accurate information. How 
could you be resistant to that?
    And, it all goes to, really, agency discretion. They have 
there right now, the courts are very pro agency, and we 
understand that, so they know that if they can get to the 
weight of evidence, or to their judgment, they have a very good 
chance of being of help.
    So, what you have to have is some mechanism, Congress has 
legislated beyond anything we could ever dream of, I mean, I 
think you've done a good job of putting the structure in place, 
but it's not enforceable. So, there has to be some way, and I 
guess probably if I wanted to really sting an agency, the way I 
would do it is, I would take a paragraph out of the Mandates 
Information Act, which allows you to do a point of order if 
they don't consider the impact on local government, and if the 
agency doesn't fulfill its Section 610 review plan, which it's 
got to do, which it should be doing every year and has not 
done, then maybe a member of Congress should be allowed to 
raise a point of order, because once you do that, you fool with 
the one thing they care about, and that's their budget. And, 
that's the number one thing, that's where I would go.
    Mr. Fineran. Yes, I would just respond, agencies, you know, 
obviously, do want to stick with the status quo, and that's one 
reason why, you know, we've been concerned, you know, since 
2002, on this fire standard. I mean, I know more about that 
fire standard than I should, given how technical it is. We've 
been working with NMA.
    Again, it's a very technical regulation, apparently, and 
using a certain resonant boat building, but it incorporated the 
standards from 1969 of the National Fire Protection 
Association. The National Marine Manufacturers Association has 
been petitioning, and there are other entities, since `94 to 
have that changed.
    We nominated it in 2002, nothing happened. We nominated it 
in 2004, she indicated there are consensus standards. That's 
the whole process. When OIRA was talking with the agencies 
about the list of 76, I don't know why OSHA did not just 
accept, okay, we will update this regulation, put three 
sentences in the Federal Register, say we want to incorporate 
the latest standards from NFPA, out for public comment, and 
that's it, they checked the box.
    Instead, it came back as part of the overall consensus 
regulations, but that, you know, is confusing to us and to the 
National Marine Manufacturers Association.
    In the meantime, as they submitted a letter for the record, 
in the meantime numerous of their members are cited because 
they used modern fire standards, because they are not 1969.
    Mr. Sodrel. Well, whatever we need to do to impose some 
common sense on the system. I mean, nobody is opposed to safe 
workplace.
    Mr. Fineran. No.
    Mr. Sodrel. Nobody is opposed to protecting the 
environment, but we need to do it in the most economical and 
common sense fashion that we can to achieve the desired result.
    Thank you all for being here today.
    I've still got a few seconds left, apparently.
    Mr. Otis. Yes, if I could answer your question in part.
    Mr. Sodrel. Sure.
    Mr. Otis. I had an ancestor in 1763 who argued against the 
British Crown and the writs of assistance, and in four hours 
James Otis also laid out the groundwork similar to what you 
spoke. So, I have, perhaps, a genetic agreement with you on 
many cases.
    I worked in the early 1980s in the Office of Information 
and Regulatory Affairs, as did the gentleman I currently work 
for, and our Deputy Administrator, and all of us have spent a 
considerable time in the regulatory process, much of what Bill 
is talking about.
    And, perhaps, one of the things that the committee might 
think about, and the future Administrator or OIRA might think 
about, is that OIRA has always seen its role of what I would 
call inspecting quality at the end of the rule making process, 
and has not spent much time focusing on the actually regulatory 
development process itself, the skill sets of the agency 
employees involved, and many of the procedural things that Bill 
is talking about. They have spent some time, but, perhaps, not 
as much as it could.
    So, one of the things your committee may want to discuss 
with the future OIRA Administrator is the issue of, is OIRA's 
principal responsibility working with agencies on that end of 
pipe review, inspecting quality at the end, or should a portion 
of its time be spent working with agencies on improving their 
regulatory development process itself in a fairly nitty, gritty 
fashion, and, therein lies, perhaps, a treasure trope of things 
that could be done.
    Chairman Akin. Very good questions and very interesting 
answers.
    I think next in line is Ms. Christensen, if I'm not 
mistaken.
    Ms. Christensen. Thank you, Mr. Chairman.
    Chairman Akin. Excuse me, could I interrupt just one 
second. I also want to introduce another member of the 
committee here, that is the Gentleman from Texas, and also a 
fellow that's pretty darn good at cooking ribs, considering 
he's that far south of Kansas City, and a judge as well. So, 
we've got to mind our behavior.
    Thank you, Louie.
    Ms. Christensen. Thank you, Mr. Chairman.
    I'm going to ask a question to the EPA and Labor 
representatives here. Realizing that these 76 existing rules 
were singled out, had some targets singled out for immediate 
action to relieve the regulatory burden, we do have the 
Regulatory Flexibility Act, and I've always been very concerned 
about how that Act has not really been used to the extent that 
it needs to be to relieve some of the burdens on our small 
businesses.
    So, I'd like to ask both Veronica Stidvent and Mr. Otis, 
what efforts have you made to comply with the Regulatory 
Flexibility Act requirements that agencies review every ten 
years regulations that have a significant impact on a 
substantial number of small businesses, to see if they can be 
simplified or eliminated, just through the regular process? 
And, have you ever published any regulations to be reviewed 
pursuant to Section 610 of the RFA, that ten-year review of 
regulations?
    Mr. Otis. I'll go first.
    I will have to get back to you on the answer of whether we 
have actually published a 610 list or proposal. I have a 
feeling that Bill may be able to give us an answer to that. I 
have a feeling not.
    One of the things I think you are aiming for and the 
committee is aiming for here is the question over whether or 
not as agencies we are as closely managing the regulatory 
development process as we should, including things like the 610 
list you are talking about.
    I will tell you I think at EPA right now we have a Senior 
Management Corps, perhaps, we are, as senior managers, all 
inside Washington at this point, and we critically understand 
that the issue of the process itself and the various component 
pieces, and the importance of those pieces to the outcome.
    So, I think you will see in the next couple of years a 
greater focus on these more procedural aspects of the rule 
making process, including 610.
    Now, there are a variety of things that occur under the 
Regulatory Flexibility Act, and my office has principal 
responsibility for trying to drive them throughout the agency, 
and we have done quite a few SBREFA-related panels. I think 
it's fair to say that the small business function that we have 
within EPA, my office is quite dedicated to that, those sorts 
of functions, and I think we have found both our rule writing 
staff, depending upon the program and the specific issue they 
are talking about, have found quite great value in those kinds 
of, whether they are a citizens advisory committee of some 
kind, or formal SBREFA panel, or a formal FACA panel, that 
those are helpful to us, and we have actually begun to realize 
their value, not as argumentative forums, but as cooperative 
forums for understanding how we can improve a rule, and I think 
we can give you examples where they have had that kind of 
positive value.
    Ms. Christensen. Ms. Stidvent?
    Ms. Stidvent. Yes, I can assure you that we take very 
seriously our responsibilities under the Regulatory Flexibility 
Act, not only in the 610 reviews, and my colleagues just handed 
me a publication from April of this year where we published 
three rules to be looked at under 610, and we continue to do 
that on a regular basis. There are a number of rules we did a 
look-back review on.
    But also, new rules, and I think that that is where we try 
to make the greatest impact, is any time we undertake a new 
regulation my office makes sure that the analysis is done to 
look very carefully at the impact of those regulations on small 
businesses. And, that's in anticipation, too, of a further 
review of that by OMB in consultation with the SBA Office of 
Advocacy. So, we take very seriously our responsibilities under 
the RFA, both in the look-back review and for new rules.
    Ms. Christensen. Thank you.
    Mr. Aitken, I know that this hearing is most--is chiefly 
around the review of the past year, but Mr. Kovacs from the 
Chamber said that with respect to the recommendations made in 
2002 and 2003 that they seem to have disappeared, running the 
risk of losing support for this initiative, especially since 
people seem to put in a lot of time and effort to reviewing the 
recommendations and coming up with the final list.
    What happens, an you tell us what happened with the 
recommendations made in the rounds in 2002 and 2003?
    Mr. Aitken. As I mentioned during my oral statement, I 
started in OIRA in early June, having come from Counsel's 
Office, and at this point I'm not very familiar with the status 
of the 2001 and 2002 nominations. But, I can provide additional 
information to the Subcommittee regarding those nominations.
    Ms. Christensen. I'd appreciate that, through the Chair, if 
we could find out what happened.
    Chairman Akin. Without objection.
    Ms. Christensen. Thank you.
    Chairman Akin. Okay. I think next the Gentlelady from New 
York, Ms. Kelly.
    Ms. Kelly. Thank you.
    I'm interested in whether or not the agencies that are 
represented here at the table speak to each other when they are 
promulgating rules and regulations?
    Mr. Aitken. As Mr. Otis said, under Presidential Executive 
Order OMB/OIRA reviews drafts of proposed rules and final rules 
near the end of the--
    Ms. Kelly. All of them?
    Mr. Aitken. The--
    Ms. Kelly. All 4,000 a year?
    Mr. Aitken. No, the significant ones, either those that are 
economically significant, which have impacts of over $100 
million annually, or that otherwise have a significant impact 
on a sector or raise novel legal issues, or impact on other 
agencies.
    Ms. Kelly. What happens when that is reviewed? Just walk me 
through that process, can you?
    Mr. Aitken. An agency would submit, near the end of its 
development of the rule, would submit a draft of the rule to 
OIRA for review, and we would then have discussion with the 
agency, and with other interested agencies and offices, about 
the rule. And, if it was an economically significant rule, the 
agency would have prepared a regulatory impact analysis, which 
we would then review with the agency.
    And, at the conclusion of our review, the agency would then 
issue the rule, whether it be the proposed rule or the final 
rule.
    Ms. Kelly. When you do a regulatory impact analysis, who 
gets that to evaluate, because I don't believe that it comes up 
to this committee.
    Mr. Aitken. The agency, the rule making agency itself, 
would be the one that prepares the regulatory impact analysis.
    Ms. Kelly. So, I'm sorry, I just have to--I'm trying to 
understand. You are saying that something like a Labor 
Department would do--would prepare its own report. I thought 
you said OIRA was looking at that.
    Mr. Aitken. Oh, sorry for the confusion. The rule making 
agencies, say OSHA, or EPA, or another agency, in connection 
with an economically significant rule, one with $100 million 
impact.
    Ms. Kelly. Right, $100 million or more.
    Mr. Aitken. They would prepare a regulatory impact analysis 
of the anticipated benefits and costs of the rules. It would 
then submit that analysis to OIRA, along with the draft of the 
proposed or final rule, and then that would be part of our 
review, discussing the regulatory impact analysis, as well as 
the draft rule, to get a better sense of the relationship of 
the estimated costs and benefits of the rule.
    Ms. Kelly. So, this is all done within the Executive Branch 
of Government, rather than the Congressional Branch. There's no 
input from the Congressional Branch, if I understand you 
correctly.
    Mr. Aitken. That Executive Order process is an internal 
Executive Branch process.
    Ms. Kelly. Okay.
    Mr. Otis. Congressman, if I could, those analyses, however, 
are part of the public docket, and now those are internet 
accessible as part of the new Federal Government-wide Docket 
Management System.
    And, you've raised a very important question over our 
ability to work with fellow agencies. For us, much of what we 
do very clearly touches on virtually every other federal 
agency's jurisdiction, particularly, Agriculture and Energy. 
And, we have in this Administration created an Agricultural 
Advisor to the Administrator. He directly reports to the 
Administrator, and has helped us build quite a few bridges, 
both at the career and senior political manager level with the 
Department of Agriculture, in many ways that we as an agency 
never had before. And, we've been starting to do that in many 
different levels with the Energy Department.
    We are working, for example, on the spill control rule to 
conduct an analysis that was requested of us by the Energy 
Department, and we have a team from both departments working on 
it.
    I don't want you to go away thinking that everything is 
fine, but I think it's an area where this gets back to the 
issue I raised over sort of the more mechanistic aspects of the 
rule making process. I think we need to do more of that, and 
we've been struggling to, and I think we've done better, and 
need to do more.
    Ms. Kelly. I'd be interested--I'm sorry that the Commerce--
Department of Commerce isn't here, but maybe the Chamber can 
give me some kind of an idea, they are looking at this at a 
cost benefit analysis, do you know whether or not they are also 
checking for redundancy and overlap? And, wouldn't that be a 
place where we could certainly cut down on some of the rules 
and regulations?
    Mr. Kovacs. The answer is yes. The biggest single problem 
that we have, and I'm talking about as--
    Ms. Kelly. The answer is yes to what?
    Mr. Kovacs. Yes, we could--
    Ms. Kelly. That the agencies are looking at redundancy and 
overlap?
    Mr. Kovacs. No, they are not.
    Ms. Kelly. They are not.
    Mr. Kovacs. The biggest single issue in the rule making 
process, we've been fighting this issue for years, is that the 
Data Quality Act required the agencies, and they just hate 
this, to use the most recent best quality data, so you don't 
have a rule making where the agency is using data that's ten 
years old, or you don't have an agency using, you know, taking 
certain studies that may be outliers, but not using the bulk of 
the studies.
    And, the courts have been very clear that the Data Quality 
Act is not enforceable, it's really between OIRA and the 
agencies, and they can do whatever it is they want. There's no 
way to enforce it, so that if an agency, and this is what the 
4th Circuit says, this isn't the Chambers' position, if the 
agency wants to rely on data that is not the most accurate, not 
the most reliable, and not necessarily in the mainstream, they 
are free to do that, and, in fact, just yesterday the D.C. 
Circuit said, not only can they do that, but if they go into a 
rule making process and they have one rule which is for the 
proposed rule, and they come out with a totally different final 
rule, that's even acceptable, too.
    So, the problem is, the agencies have enormous discretion 
in the information they use, how they select it, and who they 
talk to, and there's nothing that anyone on the outside can do 
about that.
    Ms. Kelly. Thank you.
    My time is up.
    Chairman Akin. Well, this is a hearing I'm sure could go 
longer than we are going to be able to make it, but, Mr. 
Gohmert.
    Mr. Gohmert. Thank you, Mr. Chairman, and I appreciate you 
all being here. I'm sorry I was a little late.
    You know, so many of these committee hearings, I'm sure 
you've been through, people like to preach, and I like this 
committee, there's not that much preaching at people as there 
is really trying to gather information.
    I just have a couple questions for Mr. Fineran and Mr. 
Kovacs.
    In the information provided by agencies, there are 
indications that 36 of the 76 priority reforms have been 
accomplished, and through 2005, 33 of the 46 reform milestones 
identified by the U.S. manufacturing sector report have been 
reached. And so, I wanted to ask you guys, that's what the 
Government is saying, do you agree with that?
    Mr. Kovacs?
    Mr. Kovacs. We had the discussion of what's completed 
already.
    Mr. Gohmert. Okay.
    Mr. Kovacs. And, the answer is sometimes the word is done, 
and that's what the agency says, it's just done.
    You have to be careful. I mean, the agency does need some 
discretion, and they are the experts in this area. What we 
really need, though, is the transparency, and, really, some 
integrity in the process.
    You know, we have a right, if we don't like the rule--
    Mr. Gohmert. But, you understand this is a government, and 
so you are wanting integrity in the process, is that right? I 
mean, let's don't hope for too much here, you know.
    Mr. Kovacs. Transparency, I mean, we are all in this boat 
together, and we've got these 110,000 regulations, and we've 
got to figure out how to do them the right way. And, what we've 
always preached is, that the agencies need to figure out how to 
prioritize this, because with limited resources they have, we 
are all for protecting public health and safety. We are all for 
having the safest workplace, but, you know, we spend $300 
billion a year on environmental protection, and we spend it a 
lot of times on what the experts would say are not the main 
issues and the big issues we sort of let go.
    So, when they say done, there's no way for us to really 
challenge that. I mean, if they want to say it's done, it's 
done.
    Mr. Gohmert. Well, I was giving you the chance to challenge 
it, here and now.
    Mr. Kovacs. Well, we've challenged it in the sense that 
we've said that on a lot of the rules, like the definition of 
solid waste, this is something they've worked on for years. 
They are sort of going through a rule making process, they are 
saying they are doing something, but they've been going through 
the same rule making process since 1980. They've got to come 
to--they've got to come to a conclusion, and that's where the 
problem is in the regulatory process, it just gets lost.
    And, what happens a lot of times is, there's so much, 
there's so much regulation, that the stuff that's really 
important gets the same amount of attention as the stuff that's 
not important, and that's where I think the small businesses 
come.
    We could bring in like some of the stuff that EPA is doing 
with home builders, for example, on enforcement. If your silt 
fence is down for a day, they may fine you $10,000, so you are 
focusing on whether or not you've got your paperwork in, but 
you are not focusing on whether or not the excavation is right, 
and that's where the problems come in.
    Mr. Gohmert. Sure.
    Well, Mr. Fineran?
    Mr. Fineran. Well, you know, as Bill said, you know, what 
is done, a number of them are reports, but does that mean there 
is or is going to be a change in the regulations?
    But, I think that having the milestones in there does show 
that something did come out of the 2002 exercise and 2001 
exercise, which is that, you know, those did not have any kind 
of overall deadlines or what agencies should achieve when. So, 
at least that was one useful thing that came out of the 
previous exercise, we can do that.
    Again, the problem is, if you were to ask us to find out 
today where the regulations stand today, Bill and I can't 
really tell you. You know, there's no place, OIRA doesn't have 
it, the centralized tracking system, they don't have the list 
of 76 posted, where the agencies are, have they met their 
deadlines, the individual agencies, as far as I know, don't 
have it on their public websites.
    There may be reasons for that that I'm not necessarily 
aware of legal or other, but again, that has been one problem.
    Mr. Gohmert. Well, let me ask you this. What do you think 
is the most important specific reform that needs to be 
achieved, the next most important specific reform that should 
be achieved? If you could do one thing.
    Mr. Kovacs. I would--
    Mr. Gohmert. King for a day.
    Mr. Kovacs. I would take the passage out of the Mandates 
Information Act, which allows a member of Congress to raise a 
point of order on an agency appropriation, if they don't 
perform, whether it be the 610 reviews or the nomination 
process, and in a transparent way.
    And, I say that because there's nothing, if you ever, if 
the Congress and the American people are ever going to get 
control over the regulatory process, the Section 610 review and 
the Regulatory Flexibility Act is the key, because when 
Congress legislated that what they said is, the agencies have 
to have a part of the strategic plan and to focus on those 
regulations that are out of date or should be changed. And, the 
agencies, for the last 20 years, that's been in the breach, 
periodically, about every year, you know, you can find 15 or 20 
that will appear in the Federal Register, but there is no 
consistent plan, and that's the one thing, when you get that 
report you are able to see it, we are able to see it, and the 
process, we can begin talking to each other.
    And, I don't know how else. I mean, we could argue, give us 
a right to review it in court, you know, all that does is, 
that's just more litigation, let's get the job done, and that 
is, the agency hears the complaints, they know what the 
problems are, and let's get the process started, so we can be 
involved in looking at it, and Congress can see what the 
results are every year.
    Mr. Gohmert. Would Mr. Fineran be allowed to answer?
    Mr. Fineran. Real short, I can answer.
    One thing I would like to see happen, the NAM would like to 
see happen, is to have the Executive Order 12866 made 
statutory, so that OIRA would have some statutory authority. 
Also, as part of that, you know, have judicial review now, the 
Administration will hate that, whoever is the Administration at 
the time, but to Dr. Christensen's point, when the RFA was 
completely non-judicially reviewable in the `80s, under the 
Reagan Administration, every regulation that came out just 
About said that this regulation does not affect small entities 
in any way, because that relieved them from doing--from 
adhering to RFA.
    And, once it became judicially reviewable, I think that 
went away.
    Mr. Gohmert. Thank you.
    Thank you, Mr. Chairman.
    Chairman Akin. I thank the committee and also our guests 
for participating, I think, in an interesting discussion. I'm 
not content that it's just an interesting discussion, and I'm 
going to be pressing this committee to take a look, 
particularly, at your recommendations, Bill.
    But, my sense is, is that with the people that are here, 
there's a good intent to do what's right, but somehow we get 
ourselves tangled up in an awful lot of extra hoops and things 
that we have to run through.
    And, I'd like to figure out what's the best way to proceed. 
We've already seen that we passed a lot of bills, there's an 
intent on everybody's part to try to streamline the process, 
and there is increasing competition internationally that says 
we have to succeed in this.
    So, we are going to be taking a look at what needs to be 
done to try to move things along.
    I'm going to make a closing statement here, so that 
everybody is forewarned. Although I hate red tape, I'm somewhat 
sympathetic, being a Congressman for six years, I know how slow 
it is for us to get very simple things done. I understand that 
you may have great intentions, as many of us do, and it still 
just seems like we are watching glacier races some weeks. So, 
I'm not blaming anybody personally or particularly, but I think 
we want to try to get through this and figure out what needs to 
be done.
    I have one quick question and then I want to make a closing 
statement. The quick question is, to the agencies, when I used 
to work for IBM one of the rules on project management we had 
was, if you've got a project that you really care about put one 
person in charge and hold them accountable.
    On these different things that we are trying to clean up, 
is there ever one person given that job, and just say, okay, 
this is your deal, now you go take care of it and get it, not 
done, but complete, in a satisfactory fashion? Is it ever done 
that way, or are these sort of lists sort of passed around and 
passed around, nobody specifically accountable? Just a quick 
answer and then I've got close up.
    Mr. Otis. The answer from EPA's point of view is, 
generally, yes. If it's a particular rule making, there is, 
indeed, a workgroup chair who is given responsibility of 
dealing with that, with that particular rule.
    And then in a management sense, we've done the same thing. 
We know what these particular nominations are, and we have the 
management team is held accountable to the point where the 
Deputy Administrator and Administrator are asking periodically, 
how are you doing.
    So, yes, there's a work level person who is in charge, and 
then there's a management chain very clearly held accountable.
    Chairman Akin. Thank you.
    Let me go ahead and close up here, at least for the moment.
    First of all, thank you all for participating in the 
hearing, and it does hearten me to hear that there has been 
progress, but I'm concerned that I don't have a very clear-cut 
picture of exactly where these things are, the status of where 
they are, when they are actually completed to the point of 
being satisfactory from the point of view the people that are 
affected by the regulations, and I think we need to figure out 
some ways that we can create a more transparent system for the 
individuals who have made the recommendations that we've heard.
    And, we must consider whether institutional changes must be 
made that will transcend the loss of those individuals that are 
actively seeking ways to reduce regulatory burden.
    In regards to the 76 nominations, Mr. Aitken, I would like 
your office to submit a chart for the record outlining where 
Federal agencies are on the nominations that have been agreed 
to, their progress, and when they are actually completed in a 
way that is satisfactory to the people that made the 
recommendation, I want to know the date and when those were 
checked off, when we got them done. You know, this is the 
satisfaction of a ``to do'' list, you want to check them off, 
you want to see, the ones that are checked off, and then where 
the status of the other ones are.
    I'm also going to be asking our staff to take a look at 
what we can do to try to streamline the process, hold people 
accountable, move the projects along, and so we'll be 
continuing on this. This is the second hearing we've had on 
this, it's not something that we are going to be dropping.
    I understand, Mr. Aitken, that you are an interim, too, in 
the position, and that makes it maybe a little bit more 
complicated, but I have had a chance to chat with some of the 
people in charge of your agency, and I think there's an 
interest in cooperating and putting this all together, making 
it work.
    I also wanted to compliment you, Mr. Otis, it seems like 
you are really on top of what we are trying to do, and trying 
to make the thing work.
    And, all of you, I think, have been helpful, but I just 
think we need to do a little bit better job. All of you that 
have heard this hearing would probably agree on that point.
    So, we are not done with this yet, the report issued in 30 
days, is 30 days okay, Mr. Aitken?
    Mr. Aitken. I'll need to look into that, but I would hope 
that 30 days would be fine.
    Chairman Akin. All right. If it's not 30 days, we are going 
to need an awful good reason why we can't do that in a month, 
just know where the status of those projects are.
    Supposedly, people are tracking them, it's a matter of just 
collecting the information.
    Yes, Madam Chair--oh, closing statement, yes.
    Ms. Bordallo. Thank you, Mr. Chairman, and thank you to the 
witnesses.
    As the Chairman stated, I think we all want the same thing, 
but, you know, with 90 percent, 97 percent of the businesses in 
America being small businesses, I think we should put this up 
on our priority list.
    Listening to the Chamber of Commerce and their reports for 
the last how many years here, one year nothing was done, 2003. 
You know, we'll be here until 2015, and maybe still going over 
the same situation.
    So, I just say, isn't there--could we envision a system 
where when the industry establishes a new standard that they 
meet immediately with the appropriate agencies, and work 
together on a negotiated rule making, to bring the agency rule 
up to date. Something has to be done where we could meet 
together, not individually, because I think what Congress is 
being misled here, we think that, you know, everything is done, 
but it's not done, we've just filed the report, and we seem to 
be just spinning our wheels.
    So, I would suggest that, Mr. Chairman, we find a more 
efficient way to work together and to try to remove some of 
these things off our books.
    Thank you very much.
    Chairman Akin. Thank you, everybody, with that the hearing 
is adjourned.
    [The hearing was adjourned at 11:28 a.m.]
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