[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
FULL COMMITTEE HEARING ON
LEGISLATION TO IMPROVE THE
REGULATORY FLEXIBILITY ACT
=======================================================================
COMMITTEE ON SMALL BUSINESS
UNITED STATES HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
DECEMBER 6, 2007
__________
Serial Number 110-62
__________
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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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA M. VELAZQUEZ, New York, Chairwoman
HEATH SHULER, North Carolina STEVE CHABOT, Ohio, Ranking Member
CHARLIE GONZALEZ, Texas ROSCOE BARTLETT, Maryland
RICK LARSEN, Washington SAM GRAVES, Missouri
RAUL GRIJALVA, Arizona TODD AKIN, Missouri
MICHAEL MICHAUD, Maine BILL SHUSTER, Pennsylvania
MELISSA BEAN, Illinois MARILYN MUSGRAVE, Colorado
HENRY CUELLAR, Texas STEVE KING, Iowa
DAN LIPINSKI, Illinois JEFF FORTENBERRY, Nebraska
GWEN MOORE, Wisconsin LYNN WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania LOUIE GOHMERT, Texas
BRUCE BRALEY, Iowa DEAN HELLER, Nevada
YVETTE CLARKE, New York DAVID DAVIS, Tennessee
BRAD ELLSWORTH, Indiana MARY FALLIN, Oklahoma
HANK JOHNSON, Georgia VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania JIM JORDAN, Ohio
BRIAN HIGGINS, New York
MAZIE HIRONO, Hawaii
Michael Day, Majority Staff Director
Adam Minehardt, Deputy Staff Director
Tim Slattery, Chief Counsel
Kevin Fitzpatrick, Minority Staff Director
______
STANDING SUBCOMMITTEES
Subcommittee on Finance and Tax
MELISSA BEAN, Illinois, Chairwoman
RAUL GRIJALVA, Arizona DEAN HELLER, Nevada, Ranking
MICHAEL MICHAUD, Maine BILL SHUSTER, Pennsylvania
BRAD ELLSWORTH, Indiana STEVE KING, Iowa
HANK JOHNSON, Georgia VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania JIM JORDAN, Ohio
______
Subcommittee on Contracting and Technology
BRUCE BRALEY, IOWA, Chairman
HENRY CUELLAR, Texas DAVID DAVIS, Tennessee, Ranking
GWEN MOORE, Wisconsin ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York SAM GRAVES, Missouri
JOE SESTAK, Pennsylvania TODD AKIN, Missouri
MARY FALLIN, Oklahoma
.........................................................
(ii)
?
Subcommittee on Regulations, Health Care and Trade
CHARLES GONZALEZ, Texas, Chairman
RICK LARSEN, Washington LYNN WESTMORELAND, Georgia,
DAN LIPINSKI, Illinois Ranking
MELISSA BEAN, Illinois BILL SHUSTER, Pennsylvania
GWEN MOORE, Wisconsin STEVE KING, Iowa
JASON ALTMIRE, Pennsylvania MARILYN MUSGRAVE, Colorado
JOE SESTAK, Pennsylvania MARY FALLIN, Oklahoma
VERN BUCHANAN, Florida
JIM JORDAN, Ohio
______
Subcommittee on Urban and Rural Entrepreneurship
HEATH SHULER, North Carolina, Chairman
RICK LARSEN, Washington JEFF FORTENBERRY, Nebraska,
MICHAEL MICHAUD, Maine Ranking
GWEN MOORE, Wisconsin ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York MARILYN MUSGRAVE, Colorado
BRAD ELLSWORTH, Indiana DEAN HELLER, Nevada
HANK JOHNSON, Georgia DAVID DAVIS, Tennessee
______
Subcommittee on Investigations and Oversight
JASON ALTMIRE, PENNSYLVANIA, Chairman
CHARLIE GONZALEZ, Texas LOUIE GOHMERT, Texas, Ranking
RAUL GRIJALVA, Arizona LYNN WESTMORELAND, Georgia
(iii)
?
C O N T E N T S
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OPENING STATEMENTS
Page
Velazquez, Hon. Nydia M.......................................... 1
Chabot, Hon. Steve............................................... 2
Ellsworth, Hon. Brad............................................. 3
Clarke, Hon. Yvette.............................................. 4
WITNESSES
PANEL I
Sullivan, Hon. Thomas M., Chief Counsel, Office of Advocacy, U.S.
Small Business Administration.................................. 5
PANEL II
Freedman, Mark, U.S. Chamber of Commerce......................... 14
Messinger, Dyke, Power Curbers, Inc. on behalf of the National
Association of Manufacturers................................... 17
Langer, Andrew, National Federation of Independent Businesses.... 18
Sewell, Charlie, National Community Pharmacists Association...... 20
APPENDIX
Prepared Statements:
Velazquez, Hon. Nydia M.......................................... 29
Chabot, Hon. Steve............................................... 31
Ellsworth, Hon. Brad............................................. 33
Clarke, Hon. Yvette.............................................. 34
Sullivan, Hon. Thomas M., Chief Counsel, Office of Advocacy, U.S.
Small Business Administration.................................. 35
Freedman, Mark, U.S. Chamber of Commerce......................... 44
Messinger, Dyke, Power Curbers, Inc. on behalf of the National
Association of Manufacturers................................... 53
Langer, Andrew, National Federation of Independent Businesses.... 60
Sewell, Charlie, National Community Pharmacists Association...... 75
Statements for the Record:
Associated Builders and Contractors, Inc......................... 82
(v)
FULL COMMITTEE HEARING ON
LEGISLATION TO IMPROVE THE
REGULATORY FLEXIBILITY ACT
----------
Thursday, December 6, 2007
U.S. House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:06 a.m., in Room
2360, Rayburn House Office Building, Hon. Nydia M. Velazquez
[chair of the Committee] Presiding.
Present: Representatives Velazquez, Gonzalez, Cuellar,
Altmire, Clarke, Ellsworth, Chabot, and Akin.
OPENING STATEMENT OF CHAIRWOMAN VELAZQUEZ
Chairwoman Velazquez. I call this hearing to order to
address legislation to improve the Regulatory Flexibility Act.
Today the committee is reviewing legislation to strengthen the
Regulatory Flexibility Act, or Reg Flex. Passed into law in
1980, Reg Flex has played a critical role in ensuring that
American small businesses are not overly burdened by Federal
regulations. While the act has improved this process in many
ways, small firms are still more affected by regulations than
are their larger counterparts. The reality is that more must be
done to address this problem that can hurt our overall economy.
Last month, this committee took the first step in
identifying ways to improve Reg Flex. We heard from small
businesses representing a diverse group of industries on ways
to craft legislation to strengthen the act. There was one clear
thing present in the testimony. Agencies are not doing enough
to consider the impacts of the rules and regulations of small
businesses. And more effective statute can help reduce
unnecessarily burdensome regulations.
Working with the minority, the small business community and
with input from the SBA Office of Advocacy, the committee has
drafted legislation which addresses a number of the
deficiencies of Reg Flex. One of the goals of the legislation
is to address the problem of outdated regulations. The
committee print will clarify when agencies need to review
specific rules. It also gives small businesses a greater voice
in the process and enhances transparency, helping to eliminate
unnecessary burdens. The committee also wants to ensure that
agencies are not ignoring the underlying requirements of Reg
Flex. The act was never intended to completely eliminate or
slow down regulations, but for agencies to consider if there
are more effective alternatives to meet policy goals. Too often
agencies avoid fully analyzing the impact of the rules on small
businesses by certifying that a rule will have no significant
consequences. This bill will strengthen the analysis
requirements by compelling agencies to consider reasonably
foreseeable, indirect economic impacts on small businesses when
writing rules.
One key recommendation from the Office of Advocacy was to
codify Executive Order 13272, which is included in the
legislation. This chain puts in the statute that there must be
greater coordination between agencies and the SBA's Office of
Advocacy, ensuring that regulators fully consider the economic
impacts on small firms. Earlier notification will provide
Advocacy with a greater opportunity to assist agencies in Reg
Flex compliance.
This print we are reviewing today is by no means a final
version. Today's panelists will discuss how this language can
help small businesses and identify ways it can be improved. I
would like to thank all the witnesses today for coming to the
committee and sharing their views. I look forward to continuing
our work with Ranking Member Chabot to pass meaningful reform
to the Regulatory Flexibility Act which will lessen burdens on
small businesses and allow our Nation's entrepreneurs to
continue to move our economy forward.
I would now like to yield to Ranking Member Chabot for his
opening statement.
OPENING STATEMENT OF MR. CHABOT
Mr. Chabot. Thank you, Madam Chairwoman, for holding this
hearing on legislation to strengthen the Regulatory Flexibility
Act. New small businesses open every year. Buffeted by a
variety of economic and financial hardships, these businesses
struggle mightily to achieve a profitable bottom line. Small
businesses are particularly affected by unnecessary and
burdensome regulations that require more money as a percentage
of the money that the small businesses have to work with and
time than their larger competitors to adequately comply.
Small businesses, according to a study by the Office of
Advocacy of the United States Small Business Administration,
paid $2,000 more per employee per year than large businesses to
comply with the tornado of Federal regulation. In some sectors,
such as manufacturing, the per employee cost is even higher
than that average. The unfortunate but unexpected result is
hundreds of thousands of small business are forced to shut
their doors.
More than 25 years ago Congress recognized there was a
regulatory storm brewing and smartly reacted with legislation
to force Federal regulators to examine the impact that their
rules will have on small businesses before inadvertently
putting them out of business. Congress' answer to the
regulatory problem was called the Regulatory Flexibility Act,
or RFA. Enactment of the RFA forced a small but perceptible
shift in the tact of Federal regulation. While some agencies
were prompted to refocus their thinking and develop less
burdensome regulation, many others treated the RFA as merely
suggestion and were undeterred on their course for more and
more burdensome and overlapping regulation.
Congress attempted to strengthen the RFA in 1996 by
enacting the Small Business Regulatory Enforcement Fairness
Act. The act made agency compliance with the procedural
requirements of the RFA judiciously reviewable, independent of
any challenge to the underlying agency rule. With the threat of
litigation hanging over them, Federal agencies began paying
more attention to the RFA, but the added attention did little
to increase cooperation for many agencies.
The valiant efforts of Dr. John Graham and Mr. Tom
Sullivan, one of our witnesses today, attempted to tame the
tidal wave of Federal bureaucracy. And while they admirably
eliminated many problems in the system, we have not seen the
dramatic change small businesses require, as evidenced by many
small firm owners that have come before this committee
requesting help and by the many businesses forced to shut down
each year.
The efforts of Chief Counsel Sullivan have been hampered by
the inadequacy of the RFA. Plagued by undefined terms and vague
parameters, the RFA is far from an ideal statute. Existing
loopholes permit agencies to circumvent the rules with
negligible penalties.
Last year I cosponsored H.R. 682, a bill designed to
significantly strengthen the RFA so that agencies, as President
Bush stated, quote, will care that the law is on the books,
unquote. The bill under consideration today adopts some of the
changes that were in H.R. 682 by requiring agencies to consider
indirect effects, to provide a more detailed assessment of the
impacts and to make the periodic review of rules more
transparent. These changes will help to ensure that small
businesses need only endure necessary regulations and that
agencies will not be able to create new ones to harm or destroy
these businesses.
Whenever Congress considers altering the RFA, opponents
argue that changes would destroy the regulatory process or
overwhelm Federal courthouses. Examination of the Federal
Register and courthouses show they remain strong, despite the
supposed strength of the RFA hurricane. Ultimately, what is at
stake is the ability of small businesses to stay in business
based not on the whims and dictates of Federal bureaucrats but
on their capacities in the marketplace.
Better, sounder rules will be beneficial to the regulatory
objectives of the agencies through increased compliance and
lower costs to small businesses. No good reason exists to
oppose the goals and objectives of this bill other than the
fear of the unknown. I stand ready to work with the Chairwoman
to see that we get a much stronger version of the RFA. I thank
her for holding this hearing, and I will yield back the balance
of my time.
Chairwoman Velazquez. Thank you. Are there any other
members who seek recognition for the purpose of making an
opening statement? Mr. Ellsworth.
OPENING STATEMENT OF MR. ELLSWORTH
Mr. Ellsworth. Thank you, Madam Chair. I would like to take
a moment to thank you for holding this important hearing.
Ranking Member Chabot, thank you for your work on this also and
then your statement that you just gave. I think this is a very
important issue for this committee to undertake, and I look
forward to what the member, Mr. Sullivan, what you have to say
and the members who come in the next panel.
A few weeks ago we had our first hearing on the Regulatory
Flexibility Act. It became clear to me that the problems are
serious the way the Federal Government is treating small
businesses and that is--I have said this about every meeting I
have spoke at. That is why I asked to join this committee, to
make things easier for small businesses.
We also heard from the operator of a small trucking firm
who was here and I asked him what kind of impact the Uniform
Federal Regulations had on his business. He told me it hurt his
business and others like him. It was clear that big corporate
trucking firms and their teams of lawyers and compliance
officers had a leg up on the small business. I am all for big
trucking companies, but we also have to look after the small
trucking companies. As we all know, the small companies in our
districts are facing the same burden. The Federal Government
has ignored effects of our regulations on small businesses and
refused to adjust to the needs of the vital employers. This is
not a small business problem, and it is not a small problem at
all. 1,250,000 workers are employed by small business in my
home State of Indiana and they deserve to have their voices
heard. To the bureaucrats in Washington, sometimes this doesn't
seem like a small problem. We lose sight of that. But to
Hoosier small businesses it is.
That is why I am glad we are addressing this issue, the
draft of the bill before us today, and I look forward to
hearing from today's witnesses and working with everyone in the
future to solve this problem. Thank you. With that, I yield
back.
Chairwoman Velazquez. Any other member who seeks
recognition? Ms. Clarke.
OPENING STATEMENT OF MS. CLARKE
Ms. Clarke. Thank you very much, Madam Chair and to Ranking
Member Chabot, for holding this hear today to review
legislation to improve the Regulatory Flexibility Act. There is
no question that Reg Flex needs to be strengthened. Agency
compliance with many parts of the act is of great concern to me
and must be addressed immediately since most agencies currently
view compliance as voluntary. I believe that we will develop
solid provisions that will consider the indirect impact of
regulations when calculating the impact of regulations on small
businesses.
I look forward to hearing from the Honorable Sullivan today
so that we can work together for a solution that will enable
our small businesses to prosper and not be inundated and
snuffed out by undue harm that this act was put in place to
prevent.
Thank you very much, Madam Chair.
Chairwoman Velazquez. Any other members? If not, now we
will proceed with our first panel. And I want to welcome Mr.
Thomas Sullivan, the Chief Counsel for the Office of Advocacy
of the U.S. Small Business Administration. Prior to joining the
SBA, he worked as the Executive Director of the National
Federation of Independent Businesses Legal Foundation. Mr.
Sullivan and the Office of Advocacy is charged with
independently advancing the views, concerns and interests of
small businesses before Congress, the White House, Federal
regulatory bodies and State policymakers. Welcome, Mr.
Sullivan.
STATEMENT OF THE HON. THOMAS M. SULLIVAN, CHIEF COUNSEL, OFFICE
OF ADVOCACY, U.S. SMALL BUSINESS ADMINISTRATION
Mr. Sullivan. Thank you, Chairwoman Velazquez, Ranking
Member Chabot, and members of the committee. Thank you for
allowing me the opportunity to appear this morning to address
legislative improvements to the Regulatory Flexibility Act.
With the chairwoman's permission, I would like to briefly
summarize my statement but ask that the entire statement be
entered into the record.
Chairwoman Velazquez. Without objection.
Mr. Sullivan. Thank you. As the chairwoman said, in my
position I am charged with monitoring Federal agencies'
compliance with the Regulatory Flexibility Act. And because my
office is an independent one within SBA, the views that I
express here this morning don't necessarily reflect the views
of the administration or of SBA. My statement was not
circulated to the Office of Management and Budget for comment.
Although the Reg Flex Act is doing a fairly good job, and I
do want to emphasize the fact that the Reg Flex act is working
pretty well, but despite it doing a fairly good job and
achieving cost savings for small entities, more does need to be
done to protect small entities from excessive regulatory
burden.
Two years ago, my office commissioned a study that was
prepared by Mark Crain entitled the impact of regulatory costs
on small firms. This is the third iteration of such a study and
it determined that the overall cost of Federal regulation now
totals $1.1 trillion. I will say that again. $1.1 trillion with
a T, a trillion dollars. The cost per employee for firms with
fewer than 20 employees is $7,640 per employee per year. That
is 45 percent higher than their larger counterparts with 500 or
more employees.
After 11 years of working with SBREFA, eight congressional
hearings on the Regulatory Flexibility Act, my office has
conferenced this past year on the Regulatory Flexibility Act,
and several GAO reports and testimonies, now is a good
opportunity to consider legislative improvements to the
Regulatory Flexibility Act.
At your hearing several weeks ago, many of the witnesses
testified that the largest loophole is the Reg Flex Act failure
to include the requirement that agencies consider indirect
impacts. We agree with those witnesses before the committee and
we do believe it is the biggest loophole. Agencies now are
required to consider the direct economic impact, but that
analysis may deprive policymakers here in Washington, D.C. Of
the full understanding of the rule's likely impact on small
entities.
In addition, many times, especially with environmental
regulation, the duty of regulating is passed on to the States
and it is passed on without any corresponding analysis or
requirements for States to consider less burdensome
alternatives for small business. Legislation being considered
by this committee would cure that defect.
Section 610 of the Regulatory Flexibility Act requires
agencies to periodically review rules that are on the books.
Small businesses often complain about the difficulties in
dealing with layers of regulations that agencies issue over
time. Although there are legal avenues that can be pursued to
have burdensome rules reviewed, legal recourse is costly and
time consuming. The automatic review of rules afforded through
section 610 can save small entities and Federal agencies the
hassle of having to resort to the legal system to obtain
relief. However, as is currently written, this review is
limited to only those rules that an agency deems to have a
significant economic impact at the time the rule is finalized.
Since new rules are promulgated every year, the cumulative
impact of rules on small entities can be staggering, even if
individually the rules may not have a significant economic
impact.
My office and other witnesses before this committee have
recommended that the Reg Flex Act be amended so that look back
provision, section 610, will require agencies to review all
rules periodically. This change would encourage agencies to
revise their rules to ensure that regulations currently reflect
current conditions and needs.
Lastly and most importantly, the codification of an
Executive order that was signed in this administration. My
office believes that the Executive order has increased agency
knowledge of and compliance with the Regulatory Flexibility
Act. Annual reports that are published by my office and
presented to this committee, to the White House and others in
Congress document that this Executive order is working. Small
entities would benefit from an amendment to the RFA that would
codify the requirements of that Executive order ensuring that
independent agencies are subject to the Reg Flex Act and, since
it is just an Executive order, codification would create long-
term certainty for small entities.
My office has reviewed the committee print distributed last
week, and the bill entitled the Small Business Regulatory
Improvement Act of 2008 addresses the issues outlined in my
testimony. I commend this committee for examining these issues,
and I believe your legislation will go far to improve the RFA
and, most importantly, help small entities.
Thank you for allowing me to present these views, and I
would be happy to answer any questions.
[The prepared statement of Mr. Sullivan may be found in the
Appendix on page 35.]
Chairwoman Velazquez. Thank you, Mr. Sullivan. You
discussed section 610 of Reg Flex that requires agencies to
periodically review existing rules. We all know that is not
working. It has been reported that this is because the law
gives agencies a large amount of discretion to decide which
rules are covered by the review requirement.
How should Reg Flex be amended to ensure agencies do a
better job of periodically reviewing existing rules?
Mr. Sullivan. Madam Chairwoman, I believe that the
committee print addresses this perfectly, and what the
committee print does is simply instruct agencies that they must
look at a broader swath of rules, not just a narrow swath of
those that at the time of promulgation were deemed significant.
Chairwoman Velazquez. Mr. Sullivan, although on this
committee we hear much about the burden Federal regulations
impose on small businesses, it is important to keep in mind the
Federal regulations also confer enormous benefits to our
society. Clean air and water and safe working conditions are
all examples of this. Opponents of Reg Flex have contended that
it frustrates the rulemaking process. How many rules, Mr.
Sullivan, have actually been halted by the courts because of
Reg Flex?
Mr. Sullivan. I believe that less than six rules have been
struck down by agencies since 1996 in the courts and, if the
Chairwoman would allow me, I would like to address this myth
about the Reg Flex being a barrier to valuable regulatory
protections. If you look at the number of rules that were
promulgated by the Environmental Protection Agency before the
Small Business Reg Enforcement Fairness Act and after,
remember, SBREFA conferred a number of obligations upon EPA and
this committee was faced with folks saying that this is
terrible, this will stop EPA from promulgating valuable
environmental protections. The average number of rules issued
by EPA was 412 per year before SBREFA. The average number of
EPA rules after SBREFA were 449. The average number of rules
that would impact small businesses before SBREFA was 125 per
year; after SBREFA, 181 rules per year that would impact small
business. So the data does not support that myth that law, the
Reg Flex Act, SBREFA, is a barrier to valuable protections,
environmental, workplace safety and otherwise.
Chairwoman Velazquez. Even if a rulemaking is adjudged to
have violated Reg Flex, courts will permit the regulatory
process to go forward if it is in the public interest. So can
you discuss this and whether or not it creates substantial
delays or obstacles to rulemaking?
Mr. Sullivan. The chairwoman again brings up somewhat of a
myth in that the Reg Flex Act stops valuable rules, and I think
it is valuable for the committee and others to know that the
Reg Flex Act foresaw this argument and wrote directly in that
the alternatives that must be considered, and I quote, must be
consistent with the stated objectives of the applicable
statutes. So built into the Reg Flex Act, there is the
requirement that any considerations of being sensitive to the
unique needs of small entities not compromise the underlying
statute. And it is because of that language that the chairwoman
is correct, courts have not been activists in striking down
rules. And, in fact, the majority of times, when the Reg Flex
Act is brought into a court and the small entities prevail upon
the court to mandate that an agency do a better job, many times
the rule continues to be in effect but the agency then must go
back and in public and in a transparent manner document the
impact on small entities so that policymakers have a better
understanding of the rule's impact.
Chairwoman Velazquez. Mr. Sullivan, some of the proponents
of Reg Flex reform have called for legislation to direct the
Chief Counsel for Advocacy to promulgate regulations governing
agency compliance with Reg Flex. They state that currently the
courts grant little or no difference to the Chief Counsel's
interpretation of Reg Flex and because of this Federal agencies
do not defer to Advocacy's view either.
So let me ask you, what are the benefits and drawbacks to
legislation that directs Advocacy to promulgate regulations
governing agency compliance with Reg Flex?
Mr. Sullivan. The benefits, as the chairwoman notes, in her
question is that the courts are more likely to give the Office
of Advocacy deference. The negative part of that is that it is
a resource drain on our office that I am not sure we are
prepared to meet. But if asked by the committee, I am
supportive of regulatory authority, but there is a question
mark on whether or not the resources of my office could support
that type of effort.
Chairwoman Velazquez. Mr. Sullivan, I am aware of concerns
that requiring agencies to consider indirect economic impacts
in rulemaking will bog down the regulatory process. Similar
concerns were expressed during the consideration of SBREFA as
the act provided for judicial review of agencies' compliance
with Reg Flex. However, these fears were not born out as courts
have applied a reasonableness test to agency action. The
legislation we are reviewing today requires only reasonably
foreseeable indirect impacts to be considered. Is "reasonable
foreseeable" the proper standard to ensure the regulatory
process does not grind to a halt?
Mr. Sullivan. In my opinion, Chairwoman, the term
"reasonably foreseeable" does hit upon the appropriate standard
to drive an analysis of indirect impact. I caution the
committee of being more prescriptive because this is really a
case of you have got to call them when you see them. There are
rules that are so obviously deficient and indirect impacts.
I think one of the most obvious is if the Federal Aviation
Administration issues a rule that prohibits airplanes from
landing at a specific airport. I think it is reasonably
foreseeable that a number of small businesses operating at this
airport would be impacted. And there are many other rules that
meet that reasonably foreseeable standard.
So I commend the committee for using that term and I think
it is the appropriate standard.
Chairwoman Velazquez. I have other questions, but at this
point I will recognize the ranking member.
Mr. Chabot. Thank you, Madam Chair. Thank you for being
here, Mr. Sullivan. My first question is if agencies are able
to assess the indirect socioeconomic effects of their major
rules and environmental impact statements, how hard would it be
for those agencies to prepare an initial or final regulatory
flexibility analysis for indirect effects?
Mr. Sullivan. Well, Congressman Chabot, I cannot speak on
behalf of the agencies. One, because I am not in their seat
promulgating rules, but two, because of my office's
independence. We don't exchange drafts of testimony prior to
hearings like this. What I can inform the committee, though, is
several years ago when the then called Immigration and
Naturalization Service issued rules that would prohibit foreign
visitors from extending their stays here in the United States
and this committee, to its credit, brought in Commissioner
Ziegler and myself and put him to task, to say, you know, this
is so obvious that even though you are regulating travelers
that you are going to impact the tourist community that is
virtually all small businesses. How can you not have that type
of transparent analysis? And I was sitting in the same place
that I am today and to my right was the Commissioner and in
front of the Commissioner was a piece of paper with every
documentation of data of indirect impacts on specific parts of
the tourist industry.
So the reason I raise that is because to the agency's
credit, they are doing the indirect impact and I believe that
the public and the stakeholders on these rules deserve to see
it. It is a matter of transparency and I do believe much of
that analysis is being done, but I can't speak on behalf of the
agencies on how much additional work it would be to bring
transparency to the data and analysis that exists on indirect
impact.
Mr. Chabot. My next question is if the Executive order is
codified, how would the Chief Counsel get proposed or final
rules from independent agencies such as the Federal
Communications Commission, for example.
Mr. Sullivan. There is really no guarantee once a law is on
the books that it works. And so I believe as the committee does
that codifying the Executive order would go far in helping
guarantee that we get rules in a timely manner prior to
promulgation. But if it doesn't work I can assure the committee
I will come up and testify and work with you from an oversight
capacity to make sure that it does work and that the FCC abides
by its obligations under the law.
Mr. Chabot. Thank you. Are there other agencies that you
might recommend be included in the panel process in addition to
the two agencies already included, the EPA and OSHA?
Mr. Sullivan. Congressman Chabot, this has come up before.
Specifically Chairwoman Velazquez had asked shouldn't all
agencies do panels. I should say in my initial first years I
responded in saying that yes and we can handle the workload.
The chairwoman was very patient with me at the time and asked
me a again a few years later could my office handle that type
of workload and, with a few years more under my belt in the job
I answered no, we could not. We average, I think, there are
hundred--averages between 1 and 400 hours per panel. And so for
the sense of resource constraints, I can't recommend that any
other agencies be brought under the panel process. I would,
though, make sure the committee understands that the same
benefits that are derived from the panels at EPA and OSHA can
be derived from compliance with the Regulatory Flexibility Act,
and I would posit that when you amend the Reg Flex Act the way
you are proposing to, you get the benefits of the panel
process, the guaranteed small business involvement without the
resources of the panels. So you are actually achieving the
benefits of the panels without necessarily the resource
constraints that I now know are part and parcel of the panel
process.
Mr. Chabot. My final question is, even if the Chief Counsel
never filed an amicus brief, how would the so-called Chevron
deference help the Office of Advocacy in their disputes with
other Federal agencies?
Mr. Sullivan. Right now, every lawsuit that includes a
valid Regulatory Flexibility Act claim does serve as a wake up
call to Federal agencies to awaken them to their
responsibilities under the Regulatory Flexibility Act. And in
the next panel specifically, you have Marc Freedman, who was
part of the effort to file a lawsuit challenging a recent
Homeland Security immigration enforcement bill. So I think he
may be able to give an even greater firsthand account of how
including a Reg Flex Act claim brings an agency's attention to
their responsibilities under the Reg Flex Act.
In response to your question about Chevron deference, yes,
I think agencies would certainly take their obligations more
seriously if the Office of Advocacy or when the Office of
Advocacy is afforded that type of deference by the courts.
Mr. Chabot. Thank you. I would yield back, Madam Chair.
Chairwoman Velazquez. Ms. Clarke?
Ms. Clarke. Thank you, Madam Chair. And good morning to
you, Honorable Tom Sullivan. On November 30th, the Food and
Drug Administration issued a final rule for over-the-counter
antitussive drug products. The FDA determined the final rule
will not have a significant economic impact on a substantial
number of entities and certify without any further analysis
under Reg Flex. Do you believe that agencies can and/or are
abusing Reg Flex when it comes to compliance requirements for
issuing a final rule?
Mr. Sullivan. I don't think all agencies have it exactly
right, Congresswoman.
Ms. Clarke. Very good answer.
Mr. Sullivan. Thank you.
Ms. Clarke. What would you say is the solution under what
we are trying to achieve here?
Mr. Sullivan. I think there are a number of avenues to try
to get to the solution, none of which are a silver bullet. The
first part of the solution is certainly keeping my office to
task in its oversight responsibilities to the Reg Flex Act. We
try our best, we try to keep our ears to the rail to make sure
we are attentive to small entities concerns. But we benefit
from being informed of where our resources should be spent and
where our priorities should be.
So I think the first part of the solution is keeping my
office on task. The second part of the solution is taking steps
like this to amend the Reg Flex Act now that we have a greater
long-term working knowledge of it to hopefully bring more
agencies into the fold in getting their analysis correctly.
The third is oversight. And I cannot overstate the
importance of this committee's role in the effectiveness of the
Regulatory Flexibility Act. This isn't just me. This is me and
my four predecessors as the Chief Counsel of Advocacy and a
number of predecessors of all of yours regardless of the party
in charge who have sat on the Small Business Committee. It is
through your oversight that has driven much of the success of
the Regulatory Flexibility Act. So to the extent that there are
flaws in an agency's analysis, part of reaching a solution is
bringing them before this committee and it is part of my job
also to appear before this committee to perhaps instruct
agencies on how they could do a better analysis when it comes
to considering their burden on small entities.
Ms. Clarke. And when an agency certifies that a rule does
not have a significant impact on a substantial number of small
firms, they only provide the simplest reason for certification.
Do you believe that parties are adversely aggrieved by this
current process.
Mr. Sullivan. I don't like saying that going to court is a
solution for many things when it comes to small business. In my
previous job I headed a legal foundation that in fact did go to
court. The cost of a district court challenge can be half a
million dollars. You go up to the appellate, the appellate
level is 1-1/2 million dollars. I have not encountered any
small businesses in my tenure as Chief Counsel that have 1-1/2
million dollars in reserve to challenge an agency action. So I
have got to downplay the courts as being the solution. However,
from a certification process, the courts have been very clear
that have said the requirement that a factual basis underlie
the certification is something that the courts take very
seriously and the agencies should take very seriously, and I
think that precedent has helped drive agencies to better comply
with how they document their certification. It must--according
to the courts, it must be accompanied by a factual basis.
Ms. Clarke. I yield back. Thank you very much, Madam Chair.
Chairwoman Velazquez. Mr. Ellsworth.
Mr. Ellsworth. Thank you, Madam Chair. Mr. Sullivan, could
you tell me in my allotted time about the R-3 program, how it
works, who participates, how you forward that information on to
the agencies, how you reach your findings in that program?
Mr. Sullivan. Congressman, thank you for asking about the
R-3 program. R-3 stands for Regulatory, Review and Reform, and
the initiative which calls for nominations for--by small entity
groups to nominate rules that they believe should be reviewed
to be updated, streamlined or removed. The birth of this
program recently is mostly because of what we are talking about
today, and that is the failure of part of the Regulatory
Flexibility Act to really have agencies do a spring cleaning.
So with that type of gap, I want to both work with this
committee to fix that gap legislatively, but I also want to
work through an initiative to make sure that we can do
everything we can even without additional legislation to bring
agencies into compliance with section 610 of the Regulatory
Flexibility Act.
So the R-3 initiative calls for nominations for rules that
can be reviewed and reformed. We are picking the top 10
nominations for reform and we will forward those to the
agencies for action in early spring in conjunction with our
annual report to Congress on implementation of the Regulatory
Flexibility Act. This initiative has been underway for about 2
months. We have received over 30 nominations for reform. We
have narrowed that down and are very close to having a top 10.
And I want to make sure that the committee knows and other
stakeholders know that even though some ideas for our office's
involvement in rules may not fit neatly into a top 10 list,
that doesn't mean that they go into the trash can or the
shredder. We will continue to work on the issues that are
important.
Health care, taxes are the two issues important to small
businesses. We will continue working on those, but we have
heard from small businesses that we should prioritize a spring
cleaning by Federal agencies to look at rules that can be
updated or streamlined. The classic case on this is in the
1990s a small business owner, Bill Farren, out in Arkansas
owned a number of gas stations, and he had to fill out a form
that told his local fire chief that he had gas on the premise.
Well, Mr. Farren thought this was absurd and he contacted
Members of Congress. He contacted this committee. He contacted
my predecessor and collectively you all contacted Administrator
Carol Browner and she agreed with Mr. Farren. And because of
his initiative, you removed that requirement, you removed that
paperwork. There have got to be other Bill Farrens out there
and that is why we are undergoing this R-3 program.
So I am very optimistic of its success and I ask the
committee to keep my office on task for its successful
implementation and that when we do issue our top 10 rules in
need of review and reform, I welcome the opportunity to come to
this committee with the agencies who we identify to work
together so that we can ease the burden on small business.
Mr. Ellsworth. How do you come up with the top 10--if the
11th one was pretty good, would you then put that in next
year's or how do you discern the 10 from No. 11?
Mr. Sullivan. Well, Congressman, I am hoping that we have
to discern 10 from the top 18. And, yes, those next 8 will go
right into the next year's batch.
Mr. Ellsworth. Thank you very much. And I yield back.
Chairwoman Velazquez. Thank you. Mr. Gonzalez.
Mr. Gonzalez. Thank you very much, Madam Chair. And
welcome, Mr. Sullivan. And for everyone's edification, we met
yesterday and had a very good discussion regarding what you are
doing in being proactive and making sure that you gather the
information that may address the shortcomings that an agency or
department may have regarding identifying those regulations,
rules or anything else that need some updating or actually just
do away with them totally. This is two areas. If you really
think in terms of an agency or department prior to the
promulgation and adoption of a rule you would think that, yes,
they have an obligation to go out there and see what the
consequences might be. I don't think they do. I don't think
that really happens. You have comment periods, but how many
people really comment unless you are part of an association or
organization. And the other, of course, is the periodic review,
as you have already said, to go through there and do away with
that which is no longer applicable or serves its purpose or you
could actually improve on it. I don't think that goes on
either. I don't think there is the real incentive, and that is
what we are trying to develop here.
Statutorily how do we create a greater degree of
accountability and the incentive? I would like to think first
as you take away the excuses to the departments and the
agencies that they are not aware of the impact of their
regulatory scheme. Now, I also believe that this usually
happens after the adoption, not prior to or during the
discussion or comment period and only when we have those
consequences that negatively impact small businesses. My point
is what you are doing now with your own effort, I would like to
see on a grander scale and charging somehow the individual
agencies and departments of also being proactive on their own.
You are an advocate for small business. I understand that. But
for you to actually be going out to a huge universe and try to
gather that information which I think you need to be doing, I
just would just like to see that being replicated at every
department and agency level and--whether that is possible or
not.
The last hearing we had and the meeting we had yesterday
was the result of course of my suggestion of having Nydia's
hotline or her Web site. I don't think she volunteered to do
that. But I am really quite serious. I want the small
businessman and woman in America to somehow know there is a way
to plug into some sort of a system where they are able to lodge
their complaint, that how it is impacting them.
And I always use the simple experiences that I have had
with constituents about why does the form have to be 12 pages
when you can reduce this thing to 2 pages. But try to find
someone that will listen to you and even a Member of Congress
doesn't get really listened to by the bureaucracy. They will
wait us out and they will wear us out, and it is Senator Nelson
from Nebraska said when you are talking to these guys they will
say we were before you and we will be here after you. I really
think that is the attitude out there.
The question is accountability. Is there something we can
do first of all to assist you in your effort in the program
that Congressman Ellsworth was discussing with you, and beyond
that is there something that this committee can do to spread
that responsibility to the individual agencies and departments?
Mr. Sullivan. Congressman Gonzalez, thank you for your
question. Thank you for meeting with me yesterday to talk about
many of these things. I think first of all there is an
acknowledgement that agencies are doing hundreds of reviews of
their rules. So it would be untruthful for me to say that they
are not doing anything. They are. I think the question is, from
my perspective, do they need especially in prioritizing what
they are looking at to see that they can focus specifically on
those measures that would help small business, and that is
really what R-3 is about. I pledge to you that I will work with
you and this committee to take whatever types of steps we can
not only to make R-3 an initiative but I like your suggestion
of seeing if there are ways to broaden that, and I think that
will become clear after our first year of running with this R-3
to see how it works.
But I do agree with you, the accountability is a huge
issue. And in small businesses not feeling lost in the
bureaucracy is a big issue that we--that it is good that we are
trying to take on.
Chairwoman Velazquez. Will the gentleman yield?
Mr. Gonzalez. Yeah, as a matter of fact, I yield back.
Thank you, ma'am.
Chairwoman Velazquez. Mr. Sullivan, when he asked you how
can we assist you and your office, I think codifying section 3
of Executive Order 13272 would allow for you to come to the
rulemaking process at an early stage and I believe that will be
a tool important to your office.
Mr. Sullivan. I agree with the chairwoman. The codification
of 13272 would not only help us get small businesses' views
into the process earlier, it would also empower this committee
because it then becomes law not exclusively the purview of the
executive branch. So I agree with the chairwoman.
Chairwoman Velazquez. Mr. Chabot? With that we end this
panel. But, Mr. Sullivan, I have all the questions that I will
be submitting to you in writing for the record.
Mr. Sullivan. Thank you. It will be a pleasure to respond.
Thank you.
Chairwoman Velazquez. And the committee is in recess until
we complete votes on the floor.
[Recess.]
Chairwoman Velazquez. The committee is called to order and
we are going to proceed with our second panel. We have Mr. Marc
Freedman. He is the Director of Labor Law Policy of the U.S.
Chamber of Commerce. Prior to joining the U.S. Chamber of
Commerce, he was the Regulatory Counsel for the Senate Small
Business Committee. At the U.S. Chamber of Commerce, Mr.
Freedman is responsible for developing and advocating the
Chamber's response to a variety of labor and workplace issues.
The U.S. Chamber of Commerce represents over 3 million
businesses.
Welcome, sir.
STATEMENT OF MR. MARC FREEDMAN, DIRECTOR OF LABOR LAW POLICY,
U.S. CHAMBER OF COMMERCE
Mr. Freedman. Thank you, Madam Chairwoman. Now that you
have read my introduction, let me just point out that during my
time at the Senate Small Business Committee, my role was to
oversee agency compliance with the Regulatory Flexibility Act
and make suggestions about ways that it could be improved. So I
have been around this discussion for quite some years.
The Chamber unequivocally supports improvements of
Regulatory Flexibility Act to expose loopholes and clarify
various terms that have led to agencies avoiding the
requirements of the act. We therefore are pleased to support
your bill, the Small Business Regulatory Improvement Act of
2008, and I commend you for pursuing this issue and holding
this hearing today.
If we needed a reminder--and let me just start off. The DHS
"no match" reg has already been mentioned, and I would like to
cite to it for a moment to give the committee an example of the
length to which agencies will go to avoid the Reg Flex
compliance. In that reg, as you may remember, the DHS did not
address any of the complications and subtleties of trying to
determine whether their regulation would have a significant
economic impact on a substantial number of small entities. They
basically blew right through that and went right to a legal
conclusion that it did not disturb the underlying obligation of
an employer to determine the work authorization of the
employees and therefore there was no new burden.
As you have heard, the Chamber intervened in a case brought
by an array of unions specifically to raise the Reg Flex issue.
Unfortunately, the U.S. District in the Northern District of
California saw through DHS's neglect of its rulemaking
obligations and found that the agency had not supported
certification with the adequate factual basis as required in
the act.
I want to make a point about this, too. DHS's reasoning if
left unchallenged would have set a very dangerous precedent.
Consider how that same logic, that the underlying obligation of
the employer is not changed by obligation, could be applied by
other agencies such as OSHA. The Occupational Safety and Health
Act mandates that employers provide a workplace, quote, free
from recognized hazards that are causing or are likely to cause
death or serious physical harm. All of OSHA's regulations are
merely detailed examples of these hazards and how employers
must protect their employees from them. If OSHA was to adapt
DHS' logic that any regulation did not change the underlying
obligation of the employer, the agency would never have to
determine the impact of a proposed regulation on small
businesses and therefore would never conduct a SBREFA panel
review taking input from actual small businesses and never have
to produce small entity compliance guides, the requirements for
which were recently enhanced in the minimum wage package passed
earlier in the session.
Against this backdrop, the Chamber believes making the RFA
as effective as possible is imperative. While we are often
associated with our large members, the truth is that 96 percent
of U.S. Chamber members are actually small businesses with 100
employees or less. As we have already heard this morning,
everyone acknowledges that regulations impact small businesses
more harshly than large businesses. If we are serious about
keeping our small businesses competitive with global
competition, we must make sure this act has the impact Congress
intended when it passed it more than 25 years ago and then
amended it with SBREFA in 1996.
Your bill would make several important improvements to the
Regulatory Flexibility Act. Perhaps the most significant is
requiring agencies to consider the indirect impact of
regulations when calculating the impact of regulations on small
businesses. We have heard about this a lot already this
morning.
Let me just point out that that is particularly helpful
with respect to the EPA regulations where the agency claims
that because their regulations are actually enforced by the
States, these regulations only have an indirect impact and
therefore do not trigger the full range of RFA activities.
Another important problem your bill addresses is improving
agency compliance with section 610, the provision that requires
agencies to review the regulations after 10 years. Your bill
makes clear that the agency is to determine whether the
regulation has a significant economic impact on a substantial
number of small entities at the time of the review. The
Government Accountability Office concluded that the original
text of the legislation was not clear whether this impact
applied to the time the regulation was issued or when it was
being reviewed. This confusion has allowed agencies to
legitimately claim that they were unsure how to proceed.
Indeed, the Government Accountability Office has done quite a
few studies on the Regulatory Flexibility Act, showing how
agencies have failed to comply with it and repeatedly citing
lack of clarity in the law's terms as a key reason.
One quote that I was able to uncover from the testimony
says that GAO's reports indicate that the full promise of RFA
may never be realized until Congress revisits and clarifies
elements of the act, especially its key terms, or provides an
agency or office with clear authority and responsibility to do
so. They go on to point out that there is a domino effect that
if an agency's initial determination of whether RFA is
applicable to rulemaking has on the other statutory
requirements such as the compliance guide and the periodic
reviewing of regulations.
Madam Chair, I agree with the GAO that if we are serious
about improving the Regulatory Flexibility Act, the most
important thing would be for Congress to make clear what it
means by the key term "significant economic impact" and
"substantial number of small entities." These two phrases drive
the overall question of whether an agency must apply the RFA to
any given regulation. The agencies have taken maximum advantage
of the flexibility in the Regulatory Flexibility Act to define
these terms differently as they choose for any given
regulation, with the goal being that the regulation is regarded
as not having the subtle impact and thus avoid having to
complete the requirements of the RFA. While these two terms
cannot be defined the same for all regulations or even for all
regulations within a specific agency, it is possible to
establish the parameters and the elements that must be
considered. Doing so would not only help agencies apply the RFA
more consistently, it would also set benchmarks so that those
of us who monitor agencies' compliance with the RFA would have
some way to tell if they had done what they were supposed to
do.
As we have heard already, one way to accomplish the goal
would be to authorize the Chief Counsel of Advocacy to
promulgate a rulemaking defining these terms along with other
requirements of agency compliance with the RFA. And as we have
also heard, this idea has been included in legislation
previously, most recently H.R. 682 through the Regulatory
Flexibility Act, and I might add also by Senator Bond back in
the 107th Congress in a bill he introduced call the Agency
Accountability Act.
In the alternative, Congress could specify what it meant by
these key terms and instruct agencies that they are to
incorporate these elements as they apply these terms to the
regulations. One other suggestion I would like to offer the
committee is that for those regulations when an agency's
certification is still not adequately supported, I think it
would be most helpful to permit the judicial review of an
agency's certification decision at a time closer to when that
decision is made rather than the current law, which says you
have to wait until the regulation goes final to bring your
judicial review. This would preserve the ability of small
businesses to get their input into the rulemaking at a time
when it can still have an impact.
An excellent example of where this would have been
particularly helpful is the recent case brought by the
Aeronautical Repair Station Association, ARSA, for purposes of
conversation, against the Federal Aviation Administration's
regulation requiring contractors and subcontractors at any tier
to establish mandatory drug and alcohol testing programs for
employees performing maintenance functions in the aviation
industry.
Chairwoman Velazquez. Mr. Freedman--
Mr. Freedman. I am sorry.
Chairwoman Velazquez. Your time is up. So maybe during the
question and answer period you will be able to make any other--
Mr. Freedman. By all means. Forgive me, Madam Chairwoman.
Just let me say we look forward to helping you move this bill.
[The prepared statement of Mr. Freedman may be found in the
Appendix on page 44.]
Chairwoman Velazquez. Thank you. Thank you very much. Our
next witness, Mr. Dyke Messinger, is the President and CEO of
Power Curbers, Inc. He is testifying on behalf of the National
Association of Manufacturers. Founded in Salisbury, North
Carolina, Power Curbers sells products across the globe in more
than 70 countries. The National Association of Manufacturers
represents multinational firms, small and medium manufacturers,
and 350 allied associations throughout the country. Welcome,
sir.
STATEMENT OF DYKE MESSINGER, PRESIDENT AND CEO, POWER CURBERS,
INC. ON BEHALF OF THE NATIONAL ASSOCIATION OF MANUFACTURERS
Mr. Messinger. Thank you, Chairwoman Velazquez. It is a
pleasure to be here. Ranking Member Chabot and Congressman
Akin, it is a pleasure to see you, sir. I want to thank you for
giving me the opportunity to talk about the Regulatory
Flexibility Act.
As you know, NAM is the largest trade association
representing large and immediate--small and medium
manufacturers in all 50 States. Just another note about my
business. We make mechanized construction equipment for paving
concrete roads and curbs and sidewalks. We employ 104 people in
North Carolina, Iowa, and Tennessee, and we sell our equipment
in over 80 countries, and I am also a board member of a
National Association of Manufacturers. I won't repeat the
statistics that have been shared with the committee before
about the report by Mark Crain for the SBA on the cost of
regulation, but I will share some data on manufacturing.
In manufacturing, the disparity between large and small
firms was the widest. The cost per employee for the smallest
firms was over $21,000, or over 150 percent higher than the
over $8,700 cost per employee for the largest firms.
In 2006, the NAM released an update to its report on how
U.S. structural costs hurt our competitiveness in this country.
It examined structural costs borne by manufacturers in the
United States compared to our nine largest trading partners.
The principal finding was that structural costs were almost 32
percent higher in the U.S. than for our foreign competitors.
The structural costs included a regulatory compliance,
corporate taxation, health and pension benefits, litigation and
rising energy costs.
As a result, we welcome the leadership, Chairwoman
Velazquez, and of this Congress in making improvements to the
RFA. Our review of your proposed legislation leads us to
conclude that your improvements to the RFA are sound and the
NAM and its members are supportive of your efforts.
First, let me do emphasize you need to include the indirect
economic effects in a regulatory flexibility analysis. A timely
example of agencies not being able to consider the impact that
they are truly having on small businesses is the EPA's national
ambient air quality standards for ozone. Because the
implementation of NAAQ standards is done through the regulation
and approval of State implementation plans, there are said to
be no direct effects on small entities because States are not
small entities. Well, this is clearly contrary to what Congress
intended when it passed the RFA. Periodic review of
legislation, section 610, has always been an underperforming
provision of the RFA. There is great hope that it would
rationally reduce or eliminate some of the burdens on small
businesses that had outlived their usefulness.
Let me give you an example. Many of our members and
businesses across this country use aerial work platforms or
cherry pickers. They also use scissor lifts in their facilities
to perform maintenance or to do a specific task. Well, there
are fall protection standards that are very important that are
attached to these devices. After all, putting somebody up in
the air so many feet from the ground is important. The
regulation--some of the regulations for these are 30 years old
and they don't apply separately to each machine. So that you
don't--depending on which machine arrives in your facility, you
have different regulations. You don't know what to comply with
and of course when OSHA comes in and takes a look, they are
going to tick off what you did or didn't do.
So that is something that I have noted in my business and
the people that bring this equipment in don't really understand
the OSHA regulations. They are there to execute a piece of
work. So we believe that enhanced reporting requirements will
create the necessary environment for better retrospective
review.
There are also circumstances where an individual rule is
not particularly burdensome or a challenge to many small
business, but the cumulative effect of that rule and many
others affecting a particular sector or type of business can be
crushing. Cumulative effects are not always easy to quantify,
but the current loophole of providing this analysis, quote, to
the extent practicable, gives agencies too large of an
opportunity to walk away from this responsibility and the use
of, quote, where feasible, unquote, is a limitation to the
review of the number of small entities affected seriously
weakens the requirement. Changes to this limiting language in
several parts of the RFA will go a long way to improving agency
compliance and analysis.
The NAM was also supportive of former Chairman Manzullo's
H.R. 682 in the previous Congress. We believe there are a few
provisions of that bill that would strengthen your legislation,
and I have included those suggestions in my prepared testimony.
Thank you again, Madam Chairwoman, for this opportunity to
testify.
Chairwoman Velazquez. Thank you, Mr. Messinger.
[The prepared statement of Mr. Messinger may be found in
the Appendix on page 53.]
Chairwoman Velazquez. Our next witness is Mr. Andrew
Langer, he's the senior manager of the regulatory affairs at
the National Federation of Independent Businesses. Prior to
joining NFIB, he was associate director of the development for
the Competitive Enterprise Institute. The National Federation
of Independent Business represents over 600,000 small
businesses before Congress and all 50 States. Thank you and
welcome.
STATEMENT OF MR. ANDREW LANGER, SENIOR MANAGER, REGULATORY
AFFAIRS, NATIONAL FEDERATION OF INDEPENDENT BUSINESSES
Mr. Langer. Thank you very much, Chairwoman Velazquez,
Ranking Member Chabot and Congressman Akin. Thank you very much
for allowing me the opportunity to testify here today on behalf
of the hundreds of thousands of small businesses owners
represented by NFIB.
I am happy to be here to discuss with you the burden of
regulatory paperwork and to offer our insights on how to find a
way to reduce the amount of paperwork filled out by America's
small businesses each year. I attended your hearing on
regulatory burden several weeks ago and I really appreciate the
invitation to come here and discuss these burdens in greater
detail. NFIB is the Nation's largest small business
association, and it is fairly unique amongst trade associations
in Washington D.C.
NFIB represents truly small businesses. Ninety percent of
our members have fewer in that 20 employees and our average
member size is 10 employees. I know we have discussed at great
detail the difference between small and large businesses here,
and I won't restate those issues here today. But if there is
any message I hope to convey today, it is that agencies cannot
create regulations in a vacuum. Agencies have to take into
account how each and every little rule adds up to literally
weeks worth of a small businesses time. We must consider what I
have taken to calling the context of regulation.
We spent a tremendous amount of time focusing on the big
picture, and the big picture of regulatory burdens is
important, it sets out the most general context in which to
consider the problem of regulatory burdens. As Tom Sullivan
said, our regulatory State costs over a trillion dollars
annually. Americans spent 8 billion hours, billion with a B,
filling out paperwork last year at a cost of over $400 billion.
These are vast figures, they are almost too large for any
person to really comprehend.
Let me put it to you this way: For an adult population of
210 million people, that is 210 million people over the age of
18 in America, that is 38 hours for every adult. Almost the
equivalent of a workweek's worth of time spent filling out
paperwork for the Federal Government. This is what I mean by
context, the assessment of each rule's individual impact and
how that impact adds to the Agency's current regulatory burden,
taken by itself a rule might create very little burden.
For example, in a hearing last year on a proposed EPA
regulation on home renovation, a lot of talk focused on a
mandate requiring agency training of 1 day, per quarter, per
employee. Many people dismissed this as a simple request, what
is 1 day every 3 or 4 months after all. But that is 3 or 4 days
per employee, per year, and this is on top of all the other
training, paperwork and other regulatory burdens that a small
business and those employees might be required to jump through.
We believe at NFIB that the agencies ought to keep track of
each of those mandates, quantifying them and adding them up
each and every year. And then when new regulations are
proposed, calculate the burdens being added and then restate
the overall burden being opposed by the agency. It is really
only in this way that we can really assess what is being added
and consider whether or not such additions are necessary and in
that framework.
And in context cuts both ways as well, understanding that
it isn't a single regulation that creates this burden, but
thousands of them underscores the necessity for not only making
incremental changes to the regulatory state, but supporting the
agencies when they do so as well. When EPA comes out with a
regulatory change that reduces the burden on small business of
15 hours, we can't dismiss that. Fifteen hours is 2 days, 2
days here and 2 days there over the thousands of regulations
that are on the books, and pretty soon you are talking about
real time. Time, after all, is a small business's most precious
and most finite resource.
We also believe that accountability and transparency are
important, and we believe that these two concepts can be
effectively joined with the efforts to reduce regulatory
burdens that gets to what Congressman Gonzalez was talking
about before. In addition to our recommendations on regulatory
compliance guides, we believe that all regulations and their
associated documents should have a name and direct dial phone
number of the regulation's principal author attached. Some
might balk at this, but we believe that it gets to the heart of
government responsiveness.
One of the most problematic parts of figuring out how to be
in compliance with regulations is getting answers to basic
questions about them. Rarely do single agency points of contact
have the detailed knowledge about a particular regulation to
actually provide the meaningful information necessary.
And small business owners spend countless hours working
their way through agency offices in order to find the right
person to answer their question. But who better really to
answer a question about a regulation than the person in the
agency who is responsible for bringing that regulation through
the promulgation process? Moreover, if an agency employee is
required to attach his or her name to a regulation, we believe
that more care might be taken to ensure that a regulation is as
clear as possible and doesn't burden small business any more
than it has to.
Thank you, again, for the opportunity to testify. In our
written remarks we have offered a series of 10 separate
recommendations, several of which have been adopted and
included in your legislation. We look forward to working with
you and answering any questions that you might have.
Chairwoman Velazquez. Thank you, Mr. Langer.
[The prepared statement of Mr. Langer may be found in the
Appendix on page 60.]
Chairwoman Velazquez. Welcome again, Mr. Charlie Sewell. He
is the senior vice president of government affairs at the
National Community Pharmacists Association. Prior to joining,
NCPA, he was the president of ACG Enterprises. National
Community Pharmacist Association represents 24,000 independent
pharmacists and 50,000 community pharmacists and their patients
across the country, welcome.
STATEMENT OF MR. CHARLIE SEWELL, SENIOR VICE PRESIDENT,
GOVERNMENT AFFAIRS, NATIONAL COMMUNITY PHARMACISTS ASSOCIATION
Mr. Sewell. Thank you, Madam Chair, and thank you Ranking
Member Chabot and the other members of the committee for having
us here today. I would like to say that we still represent
24,000 pharmacies, but actually we only represent 23,000
pharmacies now because we lost 1,152 pharmacies in the last
year because we got a new business partner, with the advent of
Part D we now have Uncle Sam as a business partner and we found
out he's not a very good business partner as said before. That
is why we are happy to be here today.
Most importantly, we represent not only the 23,000
pharmacies, and their over 300,000 employees, but millions of
patients that we serve day in and day out. We help them in
terms of improving their adherence to their drug regimens. We
help them avoid adverse drug interactions, we even provide home
delivery for free in most of our pharmacies, which is almost
unheard of in this day and time. It is really because of our
face-to-face relationship with a local independent pharmacy
that patients are more likely to take medicines on time and
more likely to take them properly and more likely to refill
their meds when they need to.
And frankly, more likely to get the care that they need
because we spend more time with most of our patients than their
doctors do, especially in rural America and the urban centers.
We are happy to be here today to say that we strongly support
the small business Regulatory Improvement Act. It is much
needed, long overdue, and the sooner the better from our
perspective.
We would ask, though, that actually you consider
strengthening it even more. Specifically we would recommend
that no agency can issue a final regulation unless it
specifically analyzes the significant impact that
implementation of the rule will have on small business.
Agencies shouldn't be allowed to hide behind lack of evidence
which is what they always cite.
In order to proceed, agencies must affirmatively
demonstrate that there is no significant adverse impact on
small businesses. Secondly, once there is a finding of
significant impact upon small business, an agency should not be
allowed to implement a rule for the small business sector that
it affects. And lastly, a private person or any entity or any
government entity for that matter once a rule is released, that
person or entity should be able to bring up a regulatory
challenge when they believe there has been a violation of the
RFA, and frankly, what we would like to see is an SBA process
created where that action could be adjudicated in a fairly
efficient manner and fairly expedited manner by the SBA.
I want to cite one specific example that we have talked
about before that really is really our major concern, that is a
recent rule that was promulgated by CMS. The GAO did a study
and said that under the new Medicaid reimbursement proposal we
would be reimbursed 36 percent below our cost. The OIG did a
study and said that from 19 of the 25 drugs that they examined
we would be reimbursed below our cost. If you take into account
that you actually have to pay the pharmacists who work in our
pharmacies, you actually have to pay a rent or a mortgage, you
actually have to pay for the utilities, 24 of the 25 drugs they
examined we would be losing money on, it really is a horrendous
situation.
When it came time to perform the regulatory flexibility
analysis in their final rule, frankly they said, we are going
to ignore the GAO findings, we are going to ignore the OIG
findings and then they told us that we need to provide more
documented evidence. We actually used SBA standards and we
showed them directly that we would lose, our net margins would
sink to the tune of about 80 percent, when you are only make
2.6 percent net margin to begin with, almost 80 percent
reduction in that margin doesn't work, it just don't keep us in
business.
We can't believe that CMS totally neglected the RFA in the
fashion that they did. Something needs to be done. The more
teeth that we can put to the RFA the better. Agencies need to
be required to actually do real economic analysis, and when
there is significant impact, they have to actually stop what
they are doing before they promulgate the rule. They certainly
need to take into account the small business sectors that will
be impacted. Thank you very much, Madam Chair.
[The prepared statement of Mr. Sewell may be found in the
Appendix on page 75.]
Chairwoman Velazquez. Thank you. I would like to address my
first question to Mr. Freedman. And you spoke about the fact
that the Regulatory Flexibility Act does not define significant
economic impact and, in fact, the Government Accountability
Office concluded that the lack of clarity regarding this term
has reduced the effectiveness of the law. And also courts have
ruled that agencies did not have to consider the indirect
impact of a rule on small businesses. The legislation we are
examining today requires agencies to contemplate reasonably
foreseeable indirect economic impacts.
How will this improve the regulatory process for small
businesses and will it result in a more accurate assessment of
the two economic impacts on small businesses?
Mr. Freedman. Thank you, Madam Chairwoman, for the
question. I think you actually hit one of the several nails on
the head, the indirect impact, as I have mentioned, and as
others have discussed, is one of the ways that agencies avoid
taking into account certain impacts on small businesses. The
aeronautical repair station case I was about to mention, I
think, brings that out very clearly. The FAA said that the
impacts were merely on contractors, and therefore, not direct
impacts. The court found differently and said that these
impacts, in fact, should be included.
I think the indirect impact question has been one of those
holy grails in the pursuit of better reg flex compliance. Your
legislation, I think, does a very good job of trying to capture
the levels of indirect impact. I think that is where the debate
lies.
You talk about reasonably foreseeable. That is about, I
think, as good a line as one can draw around this. Let us be
honest, I think that will trigger litigation, but you do have
to draw a line and I think that is a good way to draw that
line. So basically, the answer to your question is yes, it
would help greatly and it would definitely make a difference in
a lot of regulations in terms of the impacts that have been
discussed this morning and in other iterations that we all have
dealt with.
Chairwoman Velazquez. Mr. Langer, would you like to
comment?
Mr. Langer. Well, no. I have no disagreement with Marc on
this. I like to think of the regulatory State as almost an
organic creature, and that you make a change somewhere it will
have a ripple effects down the road and effect other things.
Industries in our economy are not independent entities, they
are all interconnected in many ways. And so when government
makes a change somewhere it is going to have an impact down the
road and sometimes very serious and very problematic ones.
I think Chief Counsel Sullivan underscored a great one when
he was talking about the hemispheric travel restrictions issue
and the impacts that is going to have industry wide in multiple
industries and how that wasn't taken into account. I think that
is one of the great problems we will run into.
The greatest growth in regulation is happening in Homeland
Security and we are seeing all sorts of impacts down the road
for things that DHS simply isn't contemplating.
Chairwoman Velazquez. Thank you.
Mr. Messinger, I understand that the disparity on
regulatory costs between large and small businesses is widest
in the manufacturing sector, can you talk to us about how
certain regulations or agencies do more to address the unique
concern? They could do more to address the unique concerns of a
small business manufacturer and do you hire legal consultants
to assist in compliance?
Mr. Messinger. Yes, we hire legal consultants to help us
when needed. It is not on retainer or anything, we just use
them when we need them, but quite frequently we do. I don't
know if I can comment on specific agency regulations. I have to
check with my staff. What I do know is what we have all said is
just the cumulative burden of the variety of things we are
asked to do makes it where you sit down and look at this stuff
and you say, of what real need and use does this have? We can
all appreciate the need for a clean environment, for safe
working conditions and those sorts of things, but when it
appears to be paperwork, appears, then people begin to distrust
the system and that is what we don't want to have happen.
Mr. Langer. Congresswoman, if I could just add to that,
because there are some good examples that are out there, OSHA
in the last few years has taken a particularly different
approach--the Department of Labor itself has taken a different
approach in many ways in dealing with small business and
working closely with a number of entities out there.
OSHA has developed what they call their OSHA consultation
process, which we have been invested in for some time where
they will go out and they will provide expertise to come into
businesses, to not inspect but assess and then offer
recommendations as to how they might improve their workplace
safety and health programs. A number of entities out there a
number of insurance companies are offering incentives to the
small businesses that partake in that program and get certified
and small businesses are saving money while protecting their
employees. So that is one I would recommend.
Chairwoman Velazquez. Mr. Sewell, let us talk about the AMP
rule, CMS did not consider any alternatives to minimize the
impact of the rule on small businesses, instead they concluded
that out of State did not require it to examine any other
alternatives. Can you talk to us, do you have any alternatives
or ways to implement the rule that will be less burdensome to
community pharmacists?
Mr. Sewell. We have made recommendations and there is
legislation being considered both here in the House and Senate
at the moment to address this. We are afraid given the
congressional calendar, it will be difficult to make anything
happen this year.
So the latest discussion with Senator Baucus and now Mr.
Stark here in the House is in regards to a delay, the hope is
that they would at least delay until people would see the AMP
data. When we submitted our comments to CMS, they never give us
the AMP data, so it was impossible for us to comment on the
specific harm. The only two entities that actually received the
data were OIG and GAO and they are the ones who came up with
the number showing that we will be reimbursed below cost. CMS
criticized us for not offering specific comments, but yet
wouldn't provide us the data. They have still not provided the
data to Congress. We don't see how they can go forward with
this rule when no one has the data, including the Congress.
Chairwoman Velazquez. Another issue related to CMS is the
Medicaid generic prescription drug reimbursement rule and its
impact again on small pharmacists. Why do small pharmacists
face a particular severe economic impact from this rule
compared to larger counterparts and what are the consequences
from community pharmacists if this new formula is implemented?
Mr. Sewell. The average Medicaid business that an
independent pharmacy does is 14 percent of their total
business, for chain pharmacies it is about 7 percent, so twice
as much business. We have over 10 percent of our pharmacies, or
about 2,300 pharmacies, over 50 percent of their business is
Medicaid. If this goes through, those 23 pharmacies will close
almost overnight. We have been in constant contact with our
members, and that is what they have told us, there is just no
way they can stay in business. Any pharmacy with a
disproportionate share of Medicaid business is going to be in
trouble, and most Medicare business tends to be concentrated in
rural and the urban centers, and that is where most independent
pharmacies are located.
Chairwoman Velazquez. Mr. Chabot.
Mr. Chabot. Thank you very much, Madam Chair. I first want
to commend the panel for something, all four of you have done
your homework, you pronounced my name correctly, all four of
you. That is the first time that has happened all year. When I
first ran for office back in 1979 so it has been 28 years ago,
I ran for Cincinnati city council as an independent, didn't
have much money so we had a 10 second ad and that is all we
could afford. And so we had my yard sign on there, it just said
Chabot, and we had a woman's voice and a man's voice and it
kind of went back and forth. And one said, Chabot, one said
Chabot, Chabot, Cabot. And then the voice over said, although
nobody agrees on how to pronounce his name, everybody agrees he
will make a fine city council. That was our ad and we lost. We
finally did win, but it was a few years later, but in any
event, thank you for that, not that I really care how you
pronounce my name, but in any event we do pronounce it Chabot.
It is a French name, most French men pronounce it Chabot.
We will begin with you Mr. Freedman, if I can. Agency
determinations of no significant impact at the proposed rule
stage are not currently reviewable. If such decisions were
reviewable, would this not undermine the ability of the agency
to learn from the rule-making process and correct its mistakes,
the overarching premise of notice and comment rule making?
Mr. Freedman. Thank you, Mr. Ranking Member. I guess my
feeling there is that I would rather see an agency get it right
the first time and get an analysis out that makes sense and
covers all the various factors that need to be included, rather
than rely on a rule-making process, which my experience is
while there are changes that are possible in a rule-making
process, when you see the proposed rule, you are seeing what
the agency wants to put out. As I like to say, it may not be
carved in stone, but the concrete is wet. And so I would rather
them get it right the first time than to have to rely on a
comment process to correct them.
Mr. Chabot. Mr. Messinger, given the fact that your company
already has sunk significant capital costs into complying with
existing regulations, is it more important to focus on
preventing new burdensome regulations or eliminate existing
burdensome regulations?
Mr. Messinger. Can we work on both?
Mr. Chabot. Good suggestion, yeah.
Mr. Messinger. I guess it would depend on what the issue
is, but surely you have to stop or slow down the unnecessary
new regulations, but we just got a field of issues to deal with
today. I don't know, that would be tough, but I would leave it
up to those that are involved in the details of those issues a
little more. I guess if I had to pick, it would be the existing
regulations.
Mr. Chabot. Thank you.
Mr. Langer, even if an agency does not enumerate cumulative
impacts, should the cumulative impact of regulations be taken
into account when an agency makes the threshold decision of
whether to perform an initial regulatory flexibility analysis.
Mr. Langer. I think it has to. I mean, the problem is right
now we have a situation where when we assess regulatory burdens
in the case of garbage in, garbage out, the executive branch
understate regulatory costs consistently, they understate
cumulative regulatory costs vastly. If we were to go only on
the basis of what the Office of Information & Regulatory
Affairs and don't get me wrong, I have nothing but respect for
Director Dudley and the work that she is doing over at OIRA,
but annually, we, get this reporting of the costs and benefits
of regulations and the State that cost and regulations are up
$44 billion. We know that is not the case. They are looking at
a dozen rules.
And so the agencies have to do a better job if they are not
going to assess the incremental costs, they have to do a better
job at assessing their overall costs. We need to get a better
handle on this because there is a fundamental misunderstanding
of just what the burdens are. We are looking at a regulatory
burden which roughly equals the entire Federal budget, and that
just is an unsustainable situation for American business.
Mr. Chabot. Thank you.
Mr. Sewell, in your opinion, does FDA accurately assess the
economic consequences of its regulatory issuances of small
pharmacies and suppliers?
Mr. Sewell. In a word, no. I will give you a specific
example, right now they are considering imposing track and
trace technology, something that we support to protect the drug
supply from manufacturer all the way down to the pharmacy
level. However, the cost of this technology could be anywhere
between 10 and $40,000, that is a lot of money for a small
business. That would be an unfunded mandate that would be
basically placed on the back of pharmacies. And that is not
taking into account the time to actually do track and trace
technology, that is to track and trace the individual drugs. In
fact, some of the discussions as we understand it would be
looking at a situation where it would be almost as cumbersome
as tax compliance, it could take an extraordinary amount of
time. So the answer in a word is no.
Mr. Chabot. Thank you, very much. Madam Chair, I yield back
the balance of my time.
Chairwoman Velazquez. Mr. Ellsworth.
Mr. Ellsworth. Thank you, Madam Chairwoman. I just have to
tell you, I have been practicing the ranking member's name and
for a year now, and now that he has given me those others
options, I have forgotten how to pronounce it. So if I say
Chabot, I apologize. I had Chabot down, there it is again.
Gentlemen, thank you very much. I appreciate you being
here, I could ask you questions all day. I appreciate you being
here. First, if you don't mind, in what we are talking about
today, if the chairwoman had the magic wand and was giving away
Christmas presents today and you had one thing you could say, I
walked out of there and I won this for my constituents, could
you go down the line and tell me what that would be if you
walked out today and got it done?
Mr. Freedman. That is a hard question, I guess I would
probably point to the indirect impact in language in the bill.
If you are talking about one specific provision, other than
just saying I walked out of here and got the bill done, I would
focus on indirect impact language in the bill. I think that was
the one that would probably make the greatest impact on the
regulatory process.
Mr. Ellsworth. Mr. Messinger.
Mr. Messinger. I am not schooled in the legislation, I am a
businessman.
Mr. Ellsworth. One thing that would make your life easier
as a businessman that this committee could do.
Mr. Messinger. Well, Mr. Langer talked about how OSHA has
really done some good things and become more responsive. I
think if we could apply that to EPA, I think this country has
become more green, certainly this last year we have seen that.
I think people in government don't realize that all Americans,
most Americans are very supportive of what we need to do to
have a sustainable future, but the EPA's regulations on smaller
businesses are terribly burdensome, I don't want to get into
that, but I would move in that area.
Mr. Langer. If the chairwoman has already given Marc his
present of indirect impacts, I get a different one. I will keep
hammering on the issue of phone numbers of the agency
personnel, the principal office of regulations. I know it may
sound gimmicky, but I think, frankly, down the road it could
have a sea change effect. I mean, every time I talk to my
members, I talk to our field personnel, I talk to folks who
deal with the regulated entities, they look at me like, boy,
that is an interesting idea. The idea that you can actually
pick up and call the person who wrote the regulation. So if
Marc is already getting direct impacts, I will go with the
phone number issue.
Mr. Sewell. Certainly indirect impact is important to us as
well, but we would like to add that we would like to be able to
make regulatory challenges to go through an abbreviated process
and be adjudicated by the SBA, we think that would really make
a big difference.
Mr. Ellsworth. Thank you very much.
Mr. Freedman, I notice that the SBA releases a report
grading the agencies on their responsiveness on regulatory
fairness, compliance, and I love the word that some identified
as suboptimal, I am guessing there are other words for that.
Mr. Freedman. One wonders what Chairman Greenspan would
have to say about the regulatory world.
Mr. Ellsworth. Right. But suboptimal, I will use that word,
I can think of others, Department of Ag, Defense, Justice,
Education, Treasury. In your work with small business, are any
of our other departments doing well above optimal, or let us
just say optimal.
Mr. Freedman. Actually, that is a fair question, I think in
constant refrains about what needs to be done to improve the
regulatory flexibility, we do tend to overlook where agencies
have made, I guess, at least a conscientious effort, in some
cases, hit the mark.
I would cite too, it is ironic because we keep sort of
discussing it in negative terms, but EPA, I think, does a very
conscientious effort at trying to assess the impacts. Now, in a
number of cases, I don't think they get all the impacts in
there that they should have. But I do know they have a matrix
that they work from in terms of what level of impact is
considered significant and how to assess the number of small
entities.
So I am not going to give them the pat, but I will cite
them as an agency that does more on this than other agencies.
Similarly, I think OSHA has, over the years, done a much
better job at making sure that they capture those impacts and
do what they are supposed to do. Now again, I am not going to
say that they always get it right, but they do recognize the
burden and go through the process more contentiously than
others.
Mr. Ellsworth. Mr. Langer, I think if I remember correctly
in your testimony, you talked about the burden of paperwork,
how it continues to grow. Which one has caused you the most
angst to you and your members, are there ones that just are
most costly and cause the most angst.
Mr. Langer. Well, it is well documented that tax paperwork
is the biggest burden out there. It is 80 percent of the
paperwork burden that anybody faces. Part of the problem is
complexity of the code. We can get into the difference between
beneficial paperwork and non beneficial paperwork and the
benefits that accrue from it. Really, with paperwork overall,
it gets back to my earlier point, which is it is all
incremental, it is never one big regulation that is out there;
we are always looking for magic bullets, and there is no magic
bullet here. It is 15 minutes here, the 2 hours here, 3 hours
there, it all adds up to literally a week's worth of time for
every adult American.
Mr. Freedman. If I could just add. These regulations don't
happen in a vacuum as we have heard. The thing I think about is
the people who have to deal with these, small business owners,
yes, their businesses are affected, but it is also a matter of
their private lives and the time that they would be spending
time outside of their business. The people I think about have
multiple roles within that business and adding more regulatory
complexities to those roles means that is less time they have
to do other things that we all think about in terms of family
life and work outside of business.
Mr. Langer. See, that is why I think these incremental
costs are so important to assess and get a handle on. Because
if the agent is already requiring a small business owner to
spend a week of paperwork, adding more days, it is very serious
stuff here. So annually, at the end of the year, the EPA could
come back and say, we have added an hour of paperwork for
everybody, or we have subtracted a few hours. Across the board,
you start whittling away at it and you are really getting
somewhere.
Mr. Ellsworth. Thank you very much. I yield back, Madam
Chair.
Chairwoman Velazquez. Mr. Chabot.
Mr. Chabot. No.
Chairwoman Velazquez. With that we conclude this hearing.
And again, I want to thank all of you for your time here and
for your contribution to this important issue for small
businesses. I ask unanimous consent that members will have 5
days to submit a statement and supporting materials for the
record. Without objection so ordered, this hearing is now
adjourned.
[Whereupon, at 12:05 p.m., the committee was adjourned.]
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