    [House Hearing, 112 Congress]
    [From the U.S. Government Publishing Office]

                ENVIRONMENTAL REGULATIONS, THE ECONOMY, AND JOBS

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

                                    HEARING

                                   BEFORE THE

                    SUBCOMMITTEE ON ENVIRONMENT AND ECONOMY

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                   __________

                               FEBRUARY 15, 2011

                                   __________

                                Serial No. 112-6

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

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                        COMMITTEE ON ENERGY AND COMMERCE

           FRED UPTON, Michigan          HENRY A. WAXMAN, California
                  Chairman                 Ranking Member
    JOE BARTON, Texas                    JOHN D. DINGELL, Michigan
      Chairman Emeritus                    Chairman Emeritus
    CLIFF STEARNS, Florida               EDWARD J. MARKEY, Massachusetts
    ED WHITFIELD, Kentucky               EDOLPHUS TOWNS, New York
    JOHN SHIMKUS, Illinois               FRANK PALLONE, Jr., New Jersey
    JOSEPH R. PITTS, Pennsylvania        BOBBY L. RUSH, Illinois
    MARY BONO MACK, California           ANNA G. ESHOO, California
    GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
    LEE TERRY, Nebraska                  GENE GREEN, Texas
    MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
    SUE MYRICK, North Carolina           LOIS CAPPS, California
      Vice Chair                         JANE HARMAN, California
    JOHN SULLIVAN, Oklahoma              JAN SCHAKOWSKY, Illinois
    TIM MURPHY, Pennsylvania             CHARLES A. GONZALEZ, Texas
    MICHAEL C. BURGESS, Texas            JAY INSLEE, Washington
    MARSHA BLACKBURN, Tennessee          TAMMY BALDWIN, Wisconsin
    BRIAN BILBRAY, California            MIKE ROSS, Arkansas
    CHARLIE BASS, New Hampshire          ANTHONY D. WEINER, New York
    PHIL GINGREY, Georgia                JIM MATHESON, Utah
    STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
    BOB LATTA, Ohio                      JOHN BARROW, Georgia
    CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
    GREGG HARPER, Mississippi
    LEONARD LANCE, New Jersey
    BILL CASSIDY, Louisiana
    BRETT GUTHRIE, Kentucky
    PETE OLSON, Texas
    DAVID McKINLEY, West Virginia
    CORY GARDNER, Colorado
    MIKE POMPEO, Kansas
    ADAM KINZINGER, Illinois
    MORGAN GRIFFITH, Virginia

    _________________________________________________________________

                               Professional Staff

       David McCarthy, Chief Counsel
      Jerry Couri, Professional Staff
     Peter Kielty, Senior Legislative
                   Clerk
    Jacqueline Cohen, Minority Counsel
         Alison Cassady, Minority
            Professional Staff

                                      (ii)
                    Subcommittee on Environment and Economy

                             JOHN SHIMKUS, Illinois
                                      Chair
    TIMOTHY F. MURPHY, Pennsylvania      GENE GREEN, Texas
      Vice Chair                           Ranking Member
    ED WHITFIELD, Kentucky               TAMMY BALDWIN, Wisconsin
    JOE PITTS, Pennsylvania              G.K. BUTTERFIELD, North Carolina
    MARY BONO MACK, California           JOHN BARROW, Georgia
    JOHN SULLIVAN, Oklahoma              DORIS O. MATSUI, California
    CHARLIE BASS, New Hampshire          FRANK PALLONE, Jr., New Jersey
    BOB LATTA, Ohio                      DIANA DeGETTE, Colorado
    CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
    GREGG HARPER, Mississippi
    BILL CASSIDY, Louisiana
    CORY GARDNER, Colorado
    JOE BARTON, Texas

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hon. John Shimkus, a Representative in Congress from the State of
      Illinois, opening statement....................................     1
        Prepared statement...........................................     3
    Hon. Gene Green, a Representative in Congress from the State of
      Texas, opening statement.......................................     4
    Hon. Joe Barton, a Representative in Congress from the State of
      Texas, prepared statement......................................     6
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, opening statement....................................     6
    Hon. Cory Gardner, a Representative in Congress from the State of
      Colorado, prepared statement...................................     7
    Hon. Cathy McMorris Rodgers, a Representative in Congress from
      the State of Washington, prepared statement....................     8
    Hon. Henry A. Waxman, a Representative in Congress from the State
      of California, opening statement...............................     9

                                   Witnesses

    Randall Lutter, visiting scholar, Resources for the Future.......    10
        Prepared statement...........................................    13
        Answers to submitted questions \1\...........................
    Karen Harned, executive director, National Federation of
      Independent Business Legal Center..............................    28
        Prepared statement...........................................    30
        Answers to submitted questions...............................   191
    Christopher DeMuth, D.C. Searle senior fellow, American
      Enterprise Institute...........................................    37
        Prepared statement...........................................    39
    Rena Steinzor, president, Center for Progressive Regulation,
      University of Maryland School of Law...........................    51
        Prepared statement...........................................    53
        Answers to submitted questions \2\...........................
    Leonard F. Hopkins, fuel procurement and reliance manager,
      Southern Illinois Power Cooperative............................    91
        Prepared statement...........................................    94
    Joseph Baird, partner, Baird Hanson LLP..........................   142
        Prepared statement...........................................   144
        Answers to submitted questions...............................   195
    Marcia Y. Kinter, vice president, Government and Business
      Information, Specialty Graphic Imaging Association.............   155
        Prepared statement...........................................   157
        Answers to submitted questions...............................   208
    Wendy Neu, executive vice president, Hugo Neu Corporation........   162
        Prepared statement...........................................   164
        Answers to submitted questions...............................   211
    Vince Ryan, county attorney, Harris County, Texas................   170
        Prepared statement...........................................   173

    ----------
    \1\ Mr. Lutter did not respond to submitted questions for the
      record.
    \2\ Ms. Steinzor did not respond to submitted questions for the
      record.

                ENVIRONMENTAL REGULATIONS, THE ECONOMY, AND JOBS

                                  ----------

                           TUESDAY, FEBRUARY 15, 2011

                      House of Representatives,
               Subcommittee on Environment and Economy,
                               Committee on Energy and Commerce
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 1:04 p.m., in
    room 2322 of the Rayburn House Office Building, Hon. John
    Shimkus [Chairman of the Subcommittee] presiding.
        Members present: Representatives Shimkus, Murphy,
    Whitfield, Pitts, Bono Mack, Bass, Latta, McMorris Rodgers,
    Harper, Cassidy, Gardner, Barton, Upton, Green, Butterfield,
    Barrow, Pallone, Capps, and Waxman (ex officio).
        Staff present: David McCarthy, Counsel; Jerry Couri, Senior
    Environment Policy Advisor; Peter Kielty, Senior Legislative
    Clerk; Chris Sarley, Senior LA; Alex Yergin, Legislative Clerk;
    Elizabeth Lowell, Legislative Clerk; Jacqueline Cohen, Minority
    Counsel; Alison Cassady, Minority Professional Staff Member;
    Caitlin Haberman, Minority Policy Analyst; and Abigail Pinkele,
    Legislative Director, Rep. Green.

      OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Mr. Shimkus. We will call the subcommittee to order. Again,
    first of all, apologies for being a few minutes late. We just
    finished a vote in the full committee, so people will be
    meandering up here. Also, we are supposed to have a recorded
    vote around 1:15 to 1:30, so our intent is to start getting the
    testimony, opening statements out of the way, and then
    hopefully we can move expeditiously.
        And I will begin. I would like to welcome everyone to the
    first hearing of the Environment and the Economy Subcommittee
    for the 112th Congress. I am honored to serve as the chairman
    of the subcommittee and excited about the opportunity to work
    with members from both sides of the aisle. I particularly want
    to welcome and congratulate Mr. Green on being named ranking
    member. We have already spoken numerous times. We are friends
    from many years, more than we would like to mention, and I have
    enjoyed working with him in the past and look forward to doing
    so in our future capacities on this subcommittee.
        From taking a shower in the morning to turning off the
    lights before bed, our daily lives are constantly touched by
    environmental regulations under the jurisdiction of this
    subcommittee. That might be obvious from its name, but what
    might not be so clear is the important nexus with the
    ``economy'' portion of the title. Due to environmental
    regulations, families have to pay higher rates to turn on those
    lights or water, and there is also the great impact that these
    higher costs have a consequence.
        We heard from Timberland last week of forcing jobs overseas
    when overbearing regulations stifle the marketplace. It is a
    necessary and healthy exercise to review regulations to make
    sure congressional intent is being followed and the best
    interests of our nations are protected. We cannot just look at
    regulations in individual silos.
        People don't have the luxury of being able to comply with
    regulations in the abstract or singularly. Rather, they must
    face all regulations together at the same time. That is why I
    think we need to weigh the benefits compared to the collective
    burdens placed on businesses trying to navigate through a
    struggling economy to keep jobs here at home.
        More to the point, while one regulation alone may not close
    a business, the cumulative effect could be devastating,
    resulting in death by 1,000 cuts. Since 2009, when President
    Obama took office, the U.S. Environmental Protection Agency has
    finalized 928 rules and proposed 703 others. As we overload the
    nation with these proposed and finalized regulations, we need
    to ensure that in an effort to do a good thing, our government
    is not creating unintended consequences.
        According to the U.S. Chamber of Commerce, the problem is
    not simply the EPA is issuing a lot of regulations, rather it
    is that it has significantly increased the number of major
    rules. That is to say rules costing the regulating community
    more than $100 million. These regulations typically ensnare
    multiple industry sectors and have economy-wide costs usually
    measuring in billions or even trillions of dollars, making
    their economic impact so widespread that multiple sectors of
    the economy must face substantial compliance costs.
        This is not sustainable for our economy. Regulating
    existing businesses into the ground on the hope that better
    ones will come later is irresponsible. Policies like those have
    starved free enterprise, bankrupting many larger States. We
    must protect jobs that exist now while working to open the
    doors for new opportunity to do business in the United States.
        It is also no secret that our federal budget problem is
    also infringing on the ability of private persons to access
    capital to expand their businesses. For this reason, our
    regulations should attack the worst problems first, doing so in
    a way that avoids broad brushstrokes that insist on expensive
    but nonproductive requirements that take resources away from
    businesses that would otherwise be growing our economy. There
    is a finite pot of resources that the Federal, State, local and
    private interests can bring to bear on any particular problem.
    Once those resources are committed to a problem, they are gone,
    leaving that much less to attack the remaining problems we
    face.
        Let me be clear. We are not seeking to strip basic public
    health and safety protections. Public health should be
    protected in a way that encourages all public welfare. A
    climate that welcomes development and encourages reinvestment
    creates a kind of wealth and fairness that needs to be
    encouraged. As chairman of this subcommittee, I work to make
    certain any environmental policies deride from this
    subcommittee will promote the public welfare as a whole while
    sustaining and creating new jobs and growth in our economy by
    letting valid, objective and repeatable science drive the
    debate.
        This is a critical aspect EPA has strayed from in recent
    years, and Congress must work with the Administration to
    refocus this attention. Today's hearing, Environmental
    Regulations: The Economy and Jobs, is a fitting start to this
    mission and will provide the subcommittee a solid foundation to
    build.
        Our first panel will give us a broad view of the economics
    regulations and processes issued by EPA to understand where
    they are causing exasperate economic problems, or in other
    cases, where gaps might exist. Witnesses on the second panel
    will give us a direct perspective on EPA regulations that are
    affecting small businesses and possible consequences moving
    forward.
        I particularly would like to welcome Leonard Hopkins from
    the Southern Illinois Power Cooperative for being here today.
    Through the co-op, Mr. Hopkins helps supply power with
    reasonable utility rates to constituents in my district.
    Unfortunately a proposed coal combustion residue regulation may
    put their ability to serve over 250,000 customers in rural
    Illinois in jeopardy.
        It is unrealized stresses like these that make it essential
    we understand the full spectrum of effects regulations may
    have. All of our witnesses here today are valuable to our
    understanding, and I would like to thank them all for taking
    the time to be here. Their testimony and participation with
    questions will help us better understand the jobs and economic
    growth and the relationship to our regulatory framework.
        [The prepared statement of Mr. Shimkus follows:]

                    Prepared Statement of Hon. John Shimkus

        The subcommittee will now come to order. I'd like to
    welcome everyone to the first hearing of the Environment and
    the Economy Subcommittee for the 112th Congress. I'm honored to
    serve as the Chairman of this subcommittee and excited about
    the opportunity to work with members from both sides of the
    aisle. I particularly want to welcome and congratulate Mr.
    Green on being named our Ranking Member. I have enjoyed working
    with him in the past and certainly look forward to doing so in
    our capacities on this subcommittee.
        From taking a shower in the morning to turning off the
    lights before bed, our daily lives are constantly touched by
    environmental regulations under the jurisdiction of this
    subcommittee. That might be obvious from its name, but what
    might not be so clear is the important nexus with ``economy''
    portion in the title. Due to environmental regulations families
    have to pay higher rates to turn on those lights or water. And,
    there is also the grave impact that these higher costs have the
    consequence, as we heard from Timberland last week, of forcing
    jobs overseas when overbearing regulations stifle the
    marketplace.
        It is a necessary and healthy exercise to review
    regulations to make sure congressional intent is being followed
    and the best interests of our nation are protected. We cannot
    just look at regulations in individual silos. People don't have
    the luxury of being able to comply with regulations in the
    abstract or singularly. Rather, they must face all regulations
    together at the same time. This is why I think we need to,
    weigh the benefits compared to the collective burdens placed on
    businesses trying to navigate through a struggling economy to
    keep jobs here at home.
        More to the point, while one regulation alone may not close
    a business, the cumulative effect could be devastating--
    resulting in death by one-thousand cuts. Since 2009 when
    President Obama took office, the U.S. Environmental Protection
    Agency (EPA) has finalized 928 rules and proposed 703 others.
    As we overload the Nation with these proposed and finalized
    regulations, we need to ensure that in an effort to do a good
    thing our government is not creating unintended consequences.
        According to the U.S. Chamber of Commerce, ``the problem is
    not simply that EPA is issuing a lot of regulations. Rather, it
    is that it has significantly increased the number of major
    rules, that is to say rules costing the regulated community
    more than $100 million. These regulations typically ensnare
    multiple industry sectors and have economy-wide costs usually
    measuring in billions or even trillions of dollars''--making
    their ``economic impact so widespread that multiple sectors of
    the economy must face substantial compliance costs.''
        This is not sustainable for our economy. Regulating
    existing businesses into the ground on the hope that better
    ones will come later is irresponsible. Policies like these have
    starved free enterprise, bankrupting many large states. We must
    protect jobs that exist now while working to open the doors for
    new opportunity to do business in the United States.
        It is also no secret that our federal budget problem is
    also infringing on the ability of private persons to access
    capital to expand their businesses. For this reason, our
    regulations should attack the worst problems first doing so in
    a way that avoids broad brush strokes that insist on expensive,
    but non-protective requirements that take resources away from
    businesses that would otherwise be growing our economy. There
    is a finite pot of resources that federal, state, local, and
    private interests can bring to bear on any particular problem.
    Once those resources are committed to a problem, they are gone,
    leaving that much less to attack the remaining problems we
    face.
        Let me be clear, we are not seeking to strip basic public
    health and safety protections. Public health should be
    protected in a way that encourages all public welfare. A
    climate that welcomes development and encourages reinvestment
    creates the kind of wealth and fairness that needs to be
    encouraged.
        As Chairman of this subcommittee, I will work to make
    certain any environmental policies derived from this
    subcommittee will promote the public welfare as a whole while
    sustaining and creating new jobs and growth in our economy by
    letting valid, objective, and repeatable science drive the
    debate. This is a critical aspect EPA has strayed from in
    recent years and Congress must work with the Administration to
    refocus this attention.
        Today's hearing, ``Environmental Regulations, the Economy,
    and Jobs'' is a fitting start to this mission and will provide
    the subcommittee a solid foundation to build from.
        Our first panel will give us a broad view on the economics
    of regulations and processes issued by the EPA to understand
    where they are causing exasperated economic problems or in
    other cases where gaps might exist. Witnesses on the second
    panel will give us a direct perspective on EPA regulations that
    are affecting small businesses and possible consequences moving
    forward.
        I particularly would like to welcome Leonard Hopkins from
    the Southern Illinois Power Cooperative for being here today.
    Through the Co-op Mr. Hopkins helps supply power with
    reasonable utility rates to constituents in my district.
    Unfortunately the proposed coal combustion residue regulation
    may put their ability to serve over 250,000 customers in rural
    Illinois in jeopardy. It's unrealized threats like these that
    make it essential we understand the full spectrum of effects
    regulations may have.
        All our witnesses here today our valuable to our
    understanding and I'd like to thank all of them for taking the
    time to be here. Their testimony and participation with
    questions will help us better understand jobs and economic
    growth and their relationship to our regulatory framework.

        Mr. Shimkus. And with that, I will stop, and I will yield
    time to the ranking member Mr. Green from Texas.

       OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. Green. Thank you, Mr. Chairman. I want to thank you for
    calling the hearing today because we all share an interest in
    ensuring appropriate balance between the cost and benefits in
    environmental regulation. I would also like to thank all our
    witnesses, not only on the first panel, but also for the second
    for taking their time to be here today.
        I also want to thank Chairman Shimkus for favorably
    responding to the request, mine along with Ranking Member
    Waxman's written request that two additional minority witnesses
    on the second panel, our county attorney for Harris County,
    Houston, Texas, Vince Ryan, and Wendy Neu of the Hugo Neu
    Corporation.
        The addition of these witnesses to today's panels will
    present a balance discussion. I hope that for future hearings
    this committee will continue to strive for fair and balanced
    panels to allow a real examination of the important issues.
        I would also like to take a moment to describe some of the
    benefits and potential benefits of environmental regulation
    that I hear when I meet with companies in green industries,
    like Hugo Neu Corporation, which is leading the way on
    recycling electronic waste. My staff and I have worked with
    many stakeholders in recycling companies such as the one owned
    by Wendy Neu as we introduced legislation year and have been
    developing revised legislation for electronic waste. It is my
    hope that we can have a hearing on the legislation when we
    introduce and hear from some of the green businesses that will
    welcome the new economic benefit of the new e-waste
    regulations.
        I also hear about the benefits of environmental regulations
    from my constituents who know all too well that environmental
    regulation can have significant economic benefits in the form
    of avoided cost. For years, I have been working with local
    officials in Harris County, Texas to address a significant
    threat from a Superfund site near our district, the San Jacinto
    Waste Pits.
        In the 1960s, a paper mill in our district dumped dioxin
    containing waste into a waste pit on a sand bar in the San
    Jacinto River. Unfortunately, the Resource Conservation
    Recovery Act did not yet pass, and regulations for disposal of
    the dioxin waste from paper mills were not yet developed. If
    these regulations had been in place, the waste would not have
    been dumped where they were, and the Superfund site would not
    have to be created. Now that the San Jacinto River has
    reclaimed that sandbar, the contamination is widespread and
    cleanup will be very costly.
        Harris County officials and EPA have been working hard to
    ensure that taxpayers don't bear the cost of that cleanup, and
    they are continuing to fight. Proper waste regulations could
    have avoided these cleanup costs and these litigation costs and
    could have protected the people of our district.
        With that, I would like to thank the witnesses again for
    appearing today, and particularly thank Wendy Neu and Vince
    Ryan who are appearing on very short notice. Mr. Ryan is our
    Harris County attorney, and his office has worked diligently on
    the San Jacinto Waste Pits for several years. And I know the
    Houston area and our district particularly appreciate it.
        Mr. Chairman, I look forward to working with you, and I
    appreciate the first hearing.
        Mr. Shimkus. Thank you, Mr. Green. Now I would like to
    recognize Chairman Emeritus Barton for 2 minutes.
        Mr. Barton. Thank you, Mr. Chairman. I will submit the full
    subject for the record. I want to thank our witnesses for
    attending today's hearing. Your subcommittee, Mr. Chairman, is
    the third subcommittee of the Energy and Commerce Committee to
    hold a hearing on the promulgation of the regulations and the
    economic impact that those regulations have on our economy. We
    have heard from the Environmental Protection Agency and the
    Office of Regulatory Affairs of the Obama Administration with
    the other two subcommittees.
        Today we are going to hear from the private sector and see
    how these regulations impact the economies in their parts of
    the country. Unemployment is over 9 percent, Mr. Chairman. The
    mantra on both sides of the aisle is jobs, jobs, jobs. The
    Obama Administration says that they want their regulations to
    pass some sort of a cost-benefit analysis. But we know,
    especially at the Environmental Protection Agency, that they
    tend to pay only lip service to that. So in today's hearing, I
    am sure we are going to hear from the private sector how those
    regulations impact them, and we are also going to hear probably
    some good input on what kind of a cost-benefit and economic
    analysis should be done.
        With that, Mr. Chairman, I yield back, and I look forward
    to your chairmanship of this vital subcommittee.
        [The prepared statement of Mr. Barton follows:]

                     Prepared Statement of Hon. Joe Barton

        Thank you Mr. Chairman. Today's hearing marks the third
    hearingthis committee has held related to this topic: the lack
    of economic impact considered by the Obama Administration and
    its agencies when promulgating regulations. The Oversight and
    Investigations and the Energy and Power subcommittees held
    hearings highlighting the disastrous effects to our economy and
    domestic job market brought on by of overly burdensome,
    redundant, and rushed regulations. The Administrators from the
    Office of Information and Regulatory Affairs and the
    Environmental Protection Agency testified and they both assured
    us that their agencies and the Obama Administration do not want
    to suppress economic growth with unnecessary regulations.
        I hear what their saying, but I want them to make me, and
    theAmerican public, believe it by what they are doing. With
    unemployment at over 9 percent and American companies and jobs
    moving overseas at a rapid rate we must do something now to get
    our economy growing again. As members of Congress it is our
    responsibility to make sure that our small businesses and job
    creators are not stifled by overregulation, but are encouraged
    and rewarded for being conscientious corporate citizens that
    find and maintain the balance between profits and pollution
    control, earnings and environmental clean-up, revenues, and
    recycling.
        I have and will support legislation and regulations that
    protect our public's health and environment, but I will not
    support legislation and regulations that do more economic harm
    than good at little to no benefit to the public. Over the last
    2 years, I have sent letters to the EPA, the Department of
    Health and Human Services, the Department of the Interior, and
    President Obama asking the Administration and its agencies to
    review passed and proposed regulations and conduct a cost-
    benefit analysis on these regulations. Several of the witnesses
    today will emphasize the need for this type of analysis and
    explain how new regulations have negatively impacted their
    ability to help our economy recover and help the environment. I
    look forward to their testimony.

        Mr. Shimkus. The gentleman yields back his time. Now, the
    chair recognizes the chairman of the Full Committee, Mr. Upton
    from Michigan.

       OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MICHIGAN

        Mr. Upton. Well, thank you Mr. Chairman. I am sorry I am a
    moment late from being downstairs. This is an important
    hearing. Your testimony is crucial to helping us understand
    what improvements are needed in the regulatory process to
    ensure that it allows for economic prosperity.
        Somehow we have lost our way. Those small businesses and
    manufacturers who should be driving our economic recovery are
    choking from burdensome red tape, weathering in an agency-wide
    regulatory epidemic that seems bent on accomplishing a single-
    minded purpose without regard to fixing the economy and
    protecting jobs. Not to mention environmental regs also
    substantially raise costs on the public sector, and these costs
    are not easily absorbed.
        Just this past December, EPA published guidelines for
    preparing economic analyses. This document is to govern EPA's
    regulatory actions. It states ``regulatory-induced employment
    impacts are not in general relevant to the benefit-cost
    analysis.'' The bureaucratic insensitivity towards those folks
    in Michigan and across the nation who are struggling to make
    ends meet is stunning. It is guidelines like this that have
    catapulted the country into a perpetual state of soaring
    unemployment and economic uncertainty. The time has come to
    stop asking the American family, the American small business,
    the innovators, and the risk takers to bear any burden and pay
    any price.
        Many of our constituents who are struggling to compete in
    this tough economy say that government regs are like a piano on
    their back. Despite executive orders from a number of
    presidents calling for economic impact analyses or job impact
    analyses, the relief never seems to come. We have to focus the
    government on serving the people instead of hamstringing them.
        Mr. Chairman, these values and principles should drive the
    president in all federal agencies. No one here today is saying
    don't regulate. We are simply saying regulate only when the
    good it will accomplish clearly outweighs the harm. Today's
    hearing is a positive step forward on that journey to help the
    executive branch develop a conscience and an understanding
    about the impact on the economy and jobs and families for every
    regulation it pursues. So let us get going. Thank you. Yield
    back.
        Mr. Shimkus. The gentleman yields back his time. I now
    recognize Mr. Gardner from Colorado for 30 seconds.
        Mr. Gardner. Thank you, Mr. Chairman. In the short time
    that I have been in this Congress, I have had an incredible
    number of people come into my office and talk about the effect
    that regulations have or may have on their business. Our
    country is still fighting its way out of a recession, and our
    government's response many times seems to be adding more
    handcuffs than solutions.
        We have an obligation to our environment, to our children,
    and future generations, but it is time we do so in a common
    sense way driven by the interests of the people and not the
    special interests.
        [The prepared statement of Mr. Gardner follows:]

                    Prepared Statement of Hon. Cory Gardner

        Mr. Chairman, in the short time that I have been in
    Congress I have already had an incredible number of employers
    come to my office to explain how the government is regulating
    them out of business. Those who are not already feeling the
    pinch from over-regulation are worried about the vast array of
    regulatory proposals. Our country is still fighting its way out
    of a recession. And our government's response to the situation
    has been to handcuff the very entities that are trying to lead
    us out of it.
        Today we are here to address environmental regulations in
    particular. With Colorado's extensive energy and agriculture
    industries, this is an area of great concern to me. This
    Committee has a duty to examine sweeping federal rule changes
    that have the potential to cripple various sectors of our
    economy and negatively affect Colorado businesses and I am
    happy to see that we are taking that step today.
        EPA has consistently acted to accelerate its rulemaking
    processes leading to legally dubious, poorly conceived, and
    arbitrary regulations that are not only hurtful to businesses
    but often have little to no environmental benefit. The laws
    that comprise the basis for many of these new rules have not
    changed in years, sometimes decades. The words on the pages
    have not changed, and yet EPA is constantlyfinding new
    authority under those same laws.
        We know that EPA rarely, if ever, does a true cost benefit
    analysis of its actions. One that considers job loss and
    economic damage. Given that EPA has decided that it does not
    need to concern itself with such things, I am encouraged that
    Congress has decided to take up the cause and I am proud to be
    here today as our committee holds this hearing on behalf of the
    hard working Americans who are affected by these policies. I
    would like to thank all of the witnesses for being with us, and
    I look forward to hearing the witness's answers to many of our
    questions on how the government's efforts have affected private
    industry.
        Thank you, Mr. Chairman. I yield back my time.

        Mr. Shimkus. The gentleman's time has expired. To the
    chairman emeritus--we only have 30 seconds left. I will give
    you a chance to get situated, and then we will recognize Cathy
    McMorris Rodgers for 30 seconds right now.
        Ms. McMorris Rodgers. Thank you, Mr. Chairman. I thank you
    for holding this important hearing, and I thank all the
    witnesses for taking time out of their schedules to be here. I
    wanted to give a special welcome to Joe Baird, president of the
    Northwest Mining Association for being here today.
        Despite effective safeguards, the EPA has decided that it
    needs to step in and add regulations that will all but certain
    drain the mining industry of its capital, making us more
    dependent upon other countries for important minerals.
        I mentioned on the floor last week this is not what America
    is about, and I look forward to hearing from our witnesses on
    how we can keep the dream alive.
        [The prepared statement of Ms. McMorris Rodgers follows:]

               Prepared Statement of Hon. Cathy McMorris Rodgers

        Mr. Chairman, I would like to thank you for holding this
    important hearing and our witnesses for taking time out of
    their schedules to be here today.
        I would like to give a special welcome to Joe Baird,
    President of the Northwest Mining Association, for being here
    today.
        Joe's testimony will demonstrate first hand EPA's unbridled
    power grab. Despite effective safeguards implemented by states,
    the EPA has decided that it needs to step in and add
    regulations that will all but certain drain this industry of
    its capital--forcing businesses to cut jobs, jobs that could
    benefit communities experiencing unemployment rates well above
    the national average--and force the only cobalt mine in this
    country to close - making us even more dependent upon other
    countries for this important mineral.
        As disturbing, Mr. Baird's testimony describes the current
    statutory and regulatory framework under which mineral
    exploration and operation on federal lands must operate. Let me
    just read a few of the statutes and regulations: the Clean
    Water Act, the Safe Drinking Water Act, the Clean Air Act, the
    National Environment Policy Act, the Toxic Substances Control
    Act, the Resources Conservation and Recovery Act, the
    Endangered Species Act, in addition to a plethora of surface
    management regulations issued by BLM and USFS just for mining.
        As I mentioned on the floor last week, regulation is not
    what this nation is about. America is about entrepreneurialism,
    innovation, and preserving the American Dream. I look forward
    to hearing from our witnesses as to how we can keep the dream
    alive.
        I yield back the balance of my time.

        Mr. Shimkus. I thank the gentlewoman, and now I recognize
    Mr. Waxman for 5 minutes.

    OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. Waxman. Thank you very much, Mr. Chairman. Today's
    hearing is entitled Environmental Regulations: The Economy and
    Jobs. I think this is a worthy topic for discussion if we do it
    right. Unfortunately, I am concerned that today's hearing may
    simply be a platform for complaints about our landmark laws
    designed to protect taxpayers and the public health.
        We will hear complaints about Superfund, The Resources,
    Conservation and Recovery Act, The Toxic Substances Control
    Act. We will hear complaints about laws outside of this
    subcommittee's jurisdiction like the Clean Air Act. The
    environmental laws we will discuss today form the cornerstone
    of public health protections. Before Superfund and RCRA, there
    was Love Canal, a New York neighborhood built atop of thousands
    of tons of toxic waste, carelessly disposed of in a ditch.
        Before The Safe Drinking Water Act, the American public had
    no assurances that the water coming from their tap was free of
    cancer-causing chemicals and dangerous bacteria. Today we will
    hear precious little about the benefits of protecting the
    public health from these toxic exposures. Instead the
    subcommittee is likely to focus solely on the economic costs of
    environmental regulations. I have no objection to discussing
    the economics of environmental regulation, but any fair and
    balanced discussion should include both sides of the equation,
    the economic benefits as well as the costs.
        Environmental regulations protect the economy as well as
    society from the devastating cost of pollution. In the absence
    of sound regulation, when polluters are allowed to pollute, the
    costs of that pollution don't simply disappear. Instead,
    innocent parties have to pick up the tab. Our health care
    system has to bear the weight of asthmatic children and more
    adults with cancer. Businesses have to absorb the costs of
    employees who miss work due to chronic illness.
        Municipalities have to cover the costs of cleaning up toxic
    pollution before it reaches drinking water supplies.
    Environmental regulations protect the public from these
    impacts. They can also spur economic growth and job creation.
    Expenditures for environmental compliance spur investment in
    the design, manufacture, installation, and operation of
    equipment to reduce pollution.
        EPA recently estimated that The Clean Air Act's total
    benefit to the economy is projected to hit $2 trillion by 2020,
    outweighing costs by 30 to 1.
        It is a tenet of our society that we hold people
    accountable for their actions and that we offer protection to
    those who can't protect themselves. When a coal-burning power
    plant fails to invest in new pollution control equipment to
    reduce its toxic mercury emissions, it damages the way our
    children think and learn. That is why the responsible party, in
    this case the coal plant, has an obligation to control its
    emissions.
        As I have said previously, let us put aside the false and
    hyperbolic claims about regulations killing jobs. No one
    supports unnecessary or duplicative regulations. But let us
    also not hesitate to regulate when needed to protect our
    economy and public health.
        Thank you, Mr. Chairman. Yield back the time.
        Mr. Shimkus. And I thank the gentleman. Now I would ask
    unanimous consent that all members of the subcommittee have 5
    legislative days to submit opening statements for the record.
    Without objection, so ordered.
        Now, I would like to welcome our first panel, and you will
    be recognized for 5 minutes. Your full statement will be
    submitted for the record. If you can do, you know, a brief,
    executive summary, and then we will go into questions.
        I would like to thank you for coming. I would like to first
    recognize Randall Lutter, Ph.D., visiting scholar from
    Resources for the Future. Sir, you are recognized for 5
    minutes.

     STATEMENTS OF RANDALL LUTTER, VISITING SCHOLAR, RESOURCES FOR
       THE FUTURE; KAREN HARNED, EXECUTIVE DIRECTOR, NFIB LEGAL
    CENTER; CHRISTOPHER DEMUTH, D.C. SEARLE SENIOR FELLOW, AMERICAN
    ENTERPRISE INSTITUTE; AND RENA STEINZOR, PRESIDENT, CENTER FOR
      PROGRESSIVE REGULATION, UNIVERSITY OF MARYLAND SCHOOL OF LAW

                      STATEMENT OF RANDALL LUTTER

        Mr. Lutter. Thank you very much, Mr. Chairman, honorable
    members of the committee. I am pleased to appear today to offer
    my views on Environmental Regulation: The Economy and Jobs, an
    important topic because both the environment and----
        Mr. Shimkus. Sir, if you could just pull your mike down a
    little bit further.
        Mr. Lutter. Are important to Americans. As an economist, I
    believe that careful analysis of the effects of regulations can
    help in designing regulations to offer clear net benefits to
    Americans and to avoid unnecessary burdens. Careful regulatory
    analysis can also help promote both public understanding of
    regulatory decisions and accountability for the regulators.
        I speak as an economist who has been involved in regulatory
    policy for more than 2 decades. I have had the privilege of
    serving Democratic and Republican presidents, including
    positions at the Federal Office of Management and Budget, the
    President's Council of Economic Advisors, and the Food and Drug
    Administration. I am currently visiting scholar at Resources
    for the Future, a nonprofit, nonpartisan organization that
    conducts independent research on environmental energy, natural
    resource, and environmental health issues. I have conducted
    research at the American Enterprise Institute and the AEI
    Brookings Joint Center for Regulatory Studies. I have no
    conflicts of interest to report, and I emphasize that the views
    I present today are mine alone. RFF takes no institutional
    position on legislative, judicial, regulatory, or other public
    policy matters.
        An important concern these days is employment. The
    commissioner of the Federal Bureau of Labor Statistics recently
    announced the unemployment rate declined from 9.4 to 9 percent
    in January. Nonfarm employment, now about a million over the
    low of a year ago, is 7.7 million below the highest level of
    the last decade, nearly 138 million jobs. Plus nonfarm
    employment needs strong and sustained growth to match levels
    seen before the recent recession. Cyclical transit employment
    and unemployment are, however, a macroeconomic phenomenon best
    addressed through fiscal and monetary policy and sound
    financial regulation topics beyond my scope today.
        The consensus view among economists about the role of
    economic analysis and environmental regulation is that it is an
    exceptionally useful framework for consistently organizing
    disparate information, and in this way, it can greatly improve
    the process and the outcome of policy analysis and
    deliberations. This idea has become part of a centralized
    process of regulatory review outlined in Executive Order 12866,
    which President Clinton issued in '93, replacing an earlier
    Executive order of comparable scope signed by President Reagan.
        Executive Order 12866 does not mention employment or jobs
    in its 12 principles, but it directs agencies to conduct an
    assessment including the underlying analysis of costs
    anticipated from the regulatory action, such as any adverse
    effects on the efficient functioning of the economy including
    productivity, employment, and competitiveness.
        President Obama's January 18 Executive Order 13563 on
    improving regulation and regulatory review reaffirms the
    earlier one and mentions the promotion of job creation under
    general principles.
        I turn to how the Environmental Protection Agency has
    analyzed and considered possible effects of its regulations on
    employment. I have looked at several regulatory impact analyses
    of proposed major rules recently released by the agency and
    found a variety of practices. For two regulations, coal
    combustion and ozone, EPA provided no information and no
    explanation for the lack of analysis. One of these, a proposed
    standard for ozone, is very likely to have adverse effects on
    local labor markets because of the difficulty of achieving cuts
    in emissions of 90 percent or greater. EPA has estimated
    positive but statistically insignificant effects on employment
    for one regulation, industrial boilers, and modest negative
    effects for another, Portland Cement.
        Evaluating these different approaches to employment effects
    is difficult because ONB's guidance implementing Executive
    Order 12866 does so little to clarify how agencies should
    assess effects on employment. Recently, however, EPA has
    released a new guidance on this issue.
        My own recommendations, regulatory agencies first should
    issue regulations only where the benefits demonstrably justify
    the cost, and they should take full advantage of statutory
    authority to use market-based regulatory mechanisms.
        In addition, the Office of Management and Budget should
    issue an addendum to A4 about how agencies should analyze
    effects of regulations on employment, but only after soliciting
    and considering public comment and genuinely independent expert
    advice. The focus of such guidelines should be on identifying
    what employment can be quantified reliably and what
    quantifications procedures are appropriate, and the guidelines
    should reconsider excluding from benefit-cost analysis the cost
    of job losses induced by regulations.
        The guidelines should also provide for distributional
    analyses of effects on those workers who are at significant
    incremental risk of job loss and who would face barriers to
    finding another job.
        I understand my written testimony will be part of the
    record, and I will be, of course, available for questions.
        [The prepared statement of Mr. Lutter follows:]

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        Mr. Shimkus. Thank you, Dr. Lutter. Now I would like to
    recognize Ms. Karen Harned, executive director, NFIB Legal
    Center. Welcome, and you have 5 minutes.

                       STATEMENT OF KAREN HARNED

        Ms. Harned. Thank you. Good afternoon, Chairman Shimkus and
    Ranking Member Green. NFIB, the Nation's largest small business
    advocacy organization, appreciates the opportunity to testify
    on the importance of assessing small business impact in the
    regulatory process. Overzealous regulation is a perennial cause
    of concern for small business owners and is particularly
    burdensome in times like these when the Nation's economy
    remains sluggish.
        According to a recent study, regulation costs the American
    economy $1.75 trillion a year. More concerning, small
    businesses face an annual regulatory cost of $10,585 per
    employee, 36 percent more than the regulatory cost facing
    businesses with more than 500 employees. Job growth in America
    remains stagnant. Although small businesses create two-thirds
    of the net new jobs in this country, the NFIB research
    foundation's most recent addition of ``Small Business Economic
    Trends'' revealed in the next 3 months, 12 percent of
    respondents planned to increase employment, while 8 percent
    plan a reduction in workforce.
        Small business owners consistently cite government
    regulation as one of their primary problems in running their
    business. In its most recent addition of SBET, the NFIB
    research foundation found that 17 percent of small business
    owners describe government regulations and red tape to be their
    single most important problem. Only taxes and poor sales were
    more commonly cited. In fact, for the past 26 months of the
    survey, regulation and red tape has been in the top three of
    problems. This is not a recent trend either.
        NFIB surveys demonstrate that overzealous government
    regulation has ranked in the top 10 of problems facing small
    businesses since 1991. Reducing the regulatory burden will go a
    long way toward giving entrepreneurs the confidence they need
    to expand their workforce in a meaningful way.
        Recently, the Administration acknowledged that excessive
    and duplicative regulation has a damaging effect on the
    American economy. NFIB believes that it has been a long time
    coming for small business owners to hear the Administration
    emphasis the harmful effects of overregulation on small
    business and job creation. We will be watching closely to see
    if last month's directive leads to real regulatory reform.
    Moreover, NFIB hopes that the president's order causes agencies
    to more closely follow the letter and spirit of the
    Administrative Procedures Act.
        When agencies do not follow the procedures of the APA, they
    frequently enact one-size-fits-all rules that are not sensitive
    to the unique circumstances of small businesses. An important
    tool in the arsenal to ensure that federal regulations are
    developed in a way that considers small business impact is the
    Small Business Regulatory Enforcement and Fairness Act. SBREFA
    requires federal agencies to analyze the impact of proposed of
    regulations on small firms and as a result, give small
    businesses a voice in the federal rule-making process. SBREFA,
    when followed correctly, can be a valuable instrument for
    agencies to identify flexible and less burdensome regulatory
    alternatives.
        SBREFA and its associated processes, such as the Small
    Business Advocacy Review Panels, are important ways for
    agencies to understand how small businesses fundamentally
    operate, how the regulatory burden disproportionately impacts
    small business, and how the agency can develop simple and
    concise guidance materials.
        While SBREFA itself is a good first step, in order for it
    to provide the regulatory relief that Congress intended, the
    agencies must make good faith efforts to comply with it. By
    following the letter and spirit of SBREFA, agencies like EPA
    would avoid many of the unnecessary burdens and costs of
    regulations small businesses experience.
        Unfortunately for small businesses, however, through the
    years, a number of EPA regulations have failed to account for
    the unique characteristics of small business. For example,
    EPA's lead-based paint renovation, repair, and painting rule
    has been problematic for small businesses that engage in
    renovation and construction work. The rule requires small
    businesses to pay for expensive certification and training for
    each of their employees. Certification begins at $304 for
    renovators and $550 for painting activities or both painting
    and renovating. Fees could cost thousands of dollars per firm
    depending on the number of employees they have.
        Although Superfund was enacted in 1980, NFIB has heard from
    members with businesses that have been named as a potentially
    responsible party in a third-party lawsuit. They have been
    forced to spend thousands of dollars and an excessive amount of
    time defending themselves when they did nothing wrong or
    illegal or do not have the records to prove their innocence.
        When EPA and other agencies follow the procedures for
    evaluating small business impact of regulations before they are
    promulgated. It is a win-win for the economy, the public, and
    small business. Thank you for holding this important hearing. I
    look forward to your questions.
        [The prepared statement of Ms. Harned follows:]

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        Mr. Shimkus. Thank you, Ms. Harned. And for my colleagues,
    I am going to try to get both opening statements done prior
    votes. I think we can get both in. If I gavel you, it will be
    for that, for our ability to hear. But that is just for
    information for my colleagues.
        Next I would like to recognize Mr. Christopher DeMuth, D.C.
    Senior--Searle Senior Fellow, American Enterprise Institute.
    Sir, you have 5 minutes. There is a button there.

                    STATEMENT OF CHRISTOPHER DEMUTH

        Mr. DeMuth. Thank you for having me here today, and in
    light of the time, I will give a brief opening statement.
        Environmental policy and employment policy are two central
    concerns. Americans like high levels of clean air and water,
    and they like high levels of unemployment. These two values
    sometimes clash, and they are clashing today.
        To the economists, taking jobs as the metric of the costs
    of environmental policy is a little bit crude. It is certainly
    important to the elected representative. It is what the general
    public cares about, but one could imagine a good environmental
    rule that had negative employment effects, and one could
    imagine and sometimes sees bad environmental rules that have
    positive employment effects.
        When we regulate, we are buying something: cleaner air and
    water. Just like everything we buy privately, it has a cost,
    and the costs can be higher prices, or they can be less good
    product quality, or they can be lower employment. The question
    of whether it is a good rule or not is a larger one than the
    one of employment.
        In general, environmental regulation has been a great
    success story for America. It has had very large economic
    benefits since our first modern statutes were passed in the
    early 1980s, but we know now that it has been much less cost
    effective than it could have been. We could have gotten much
    more environmental improvements for the money we have spent, or
    we could have gotten the same amount of environmental
    improvements for vastly less money, or a little bit of both.
        There is evidence that EPA regulations have been becoming
    less cost effective over time, following the huge improvements
    that were gained in the 1970s. There is a wide variation in the
    effectiveness of different statutes, and we could revise the
    statutes to get much more environmental gains and much fewer
    costs of the kind the committee is worried about. In my view,
    the reasons for the problems that the committee, your
    subcommittee is focusing on today are two.
        The first is that environmental--that regulatory costs are
    off budget. EPA's budget is a tiny sliver of the billions of
    dollars of costs that its rules impose. But it does not have
    natural incentives to economize on those costs. They are not
    costs to the agency. They are costs to the private sector or
    municipalities or schools or whatever.
        The costs are relatively insensible to the public. They
    take the form of higher prices or plants that aren't built or
    sometimes plants that are shut down, and as a result, agencies
    often go too far. The regulatory agency will get a 90 percent
    elimination of some risk or pollution level. It will then want
    to go for another 8 percent, and it will then want to go for 1-
    and-a-half percent. And it will keep pushing and pushing. The
    laws are being made by single purpose agencies operating
    largely without a budget constraint, and their incentive will
    be to push until the human cry becomes so great, such as from
    the Congress that they back off.
        The second is the very wide delegations that the Congress
    gives in many environmental statutes so that the really tough
    choices are made by the agencies. The specialized agency goes
    back over a century. EPA is a classic example of it. The
    original idea was expertise, and certainly there are many areas
    of pollution control that are highly technical and that
    technicians could handle better than generalist legislators.
        But as the controversies before this committee today
    illustrate, these are not merely technical questions. They are
    highly important political and economic ones, but we have
    gotten ourselves into a situation where the legislator can vote
    for clean air and clean water and leave the hard and
    contentious decision making to the agencies and then criticize
    after the fact. And the agencies will in this situation often
    go too far until they are criticized.
        There are two proposals, as I understand it, before the
    Congress today for general regulatory reform. They are
    addressed to the two problems I have identified. Senator Warner
    is working on a proposal that would put the agencies on a
    budget of the expenditures that their rules force. It is sort
    of a pay-go idea where to issue a new regulation, you would
    have to eliminate some old ones. That is addressed to the
    problem of unbudgeted, off-budget costs. The so-called Reins
    Act, introduced by Congressman Jeff Davis and now introduced in
    the Senate by Senator DeMint, is the proposal for Congress to
    take back some considerable degree of the discretion it has
    delegated to the agencies.
        My testimony says some good things and identifies some
    problems with both approaches. In my view, neither of them
    would be as worthwhile as the Congress's returning to many
    areas of the environmental statutes where it has delegated too
    much and where much more specific standards could resolve some
    of the problems that we are facing today. Thank you, sir.
        [The prepared statement of Mr. DeMuth follows:]

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        Mr. Shimkus. Thank you, Mr. DeMuth. Now I would like to
    turn to Ms. Rena Steinzor, president of the Center for
    Progressive Regulations, University of Maryland School of Law.
    Welcome, and you are recognized for 5 minutes.

                       STATEMENT OF RENA STEINZOR

        Ms. Steinzor. Thank you for the opportunity to testify
    today on the mistaken belief that environmental protection
    kills jobs. No matter how many times this fatally flawed
    argument is repeated, empirical evidence supporting the claim
    is scant and not credible. Instead, the evidence shows that
    environmental regulations save lives, preserve irreplaceable
    natural resources, and not incidentally, create jobs.
        In fact, if we pull the camera back and look at the economy
    as a whole, the primary cause of the economic recession and its
    devastating effect on jobs is underregulation, not
    overregulation. Everything from the tarp bailouts to the
    underwater mortgage crisis can be traced back to excessive
    corporate corner-cutting unchecked by an effective regulatory
    system.
        Too often regulatory costs are envisioned as putting money
    in a pile and setting it on fire. Environmental protections
    reduce health care costs, keep families intact and productive,
    let workers stay on the job and preserve resources for future
    generations. Not incidentally, taking the remedial steps that
    they require, especially when capital investments are involved,
    creates jobs. Pollution control equipment must be designed,
    manufactured, and installed. People must be hired to construct
    and operate highly engineered landfills that can safely contain
    hazardous waste and treat sewage and drinking water. Even if we
    restrict the analysis of regulatory impacts to monetary
    investments and do not consider the ethics of preserving life,
    health, and nature, the money that is not spent treating
    cancers, asthma, or neurological disease can be used in other,
    more productive ways.
        Two relevant and closely related examples make this case.
    As Chairman Emeritus Waxman pointed out, regulations
    implementing the Clean Air Act saved 164,300 adult lives in
    2010 and will save 237,000 lives by 2020. Costs of compliance
    in the year 2020 will be $65 billion, but the regulatory
    controls, the benefits of those controls will be $2 trillion.
        As we have gotten better at preventing pollutants from
    going up and out of the stack, we have created other equally
    pressing problems because these pollutants do not vaporize but
    rather fall out of the scrubbers into fly and bottom ash.
    Utilities generate about 145 million tons of coal ash annually,
    more than three times the amount of hazardous chemical waste.
        Half of this ash is dumped in so-called surface
    impoundments which is a euphemism for an unlined pit in the
    ground. The highly toxic heavy metals present in coal include
    arsenic, beryllium, chromium, and lead. Burning coal
    concentrates these contaminants to dangerous levels.
        In the aftermath of a spill in Kingston, Tennessee of one
    billion gallons of sludge, coal ash sludge, when an impoundment
    run by TBA burst, this spill in sheer volume exceeded the Gulf
    oil spill that transfixed us this summer. EPA began a rule
    making to compel the safe disposal of coal ash. Electric
    utilities have made killing this rule a top priority. If
    President Obama succumbs to this pressure or Congress
    intervenes, regulatory benefits of $102 billion over the next
    several decades could be lost.
        If anything, our regulatory system is dangerously weak, and
    Congress should focus on reviving it rather than eroding public
    protections. The destructive convergence of funding shortfalls,
    political attacks, and outmoded legal authority have set the
    stage for ineffective enforcement and unsupervised industry
    self-regulations. From the Deepwater Horizon spill in the Gulf
    of Mexico to the disaster at West Virginia's Big Branch Mine
    with the death toll of 29, the signs of regulatory dysfunction
    abound.
        The latest free-for-all against regulation frames a
    fundamental question for Congress. Will we do what we must to
    make sure that the environment we leave the next generation of
    Americans is clean enough for them to live their lives free of
    the health risks from environmental hazards, or will we squeeze
    the last penny of monetary profit out of the planet's resources
    at the cost of leaving behind a scarred landscape, polluted air
    and water, and enough toxics in the food we eat to pose serious
    risks to our children and their children?
        [The prepared statement of Ms. Steinzor follows:]

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        Mr. Shimkus. Thank you, Ms. Steinzor. Now we will recess
    the hearing to go cast votes. We have three votes. My
    colleagues, I would put on the record that 15 minutes after the
    last vote, we will reconvene. I am not sure how you all figure
    that out, but that is why you have the staff to help you. But
    we will come back 15 minutes after the last vote.
        [Recess.]
        Mr. Shimkus. I would like to call the hearing back. And I
    want to thank my colleagues for coming back expeditiously. That
    was a pretty quick turnaround, and now we will go into the 5-
    minute questions. Most members are still making their way back
    or trying to grab a sandwich. So I am sure that a few more will
    show up by the time, but I will recognize myself for 5 minutes.
        First I would like for Dr. Lutter--you cited a breathtaking
    statement by EPA in June 10. In fact, I have it right here
    along with a December statement of EPA analysis. In your
    statement in which you are quoting the EPA when it put out a
    proposed rule for combustion byproducts under the Resource
    Conservation and Recovery Act, the EPA said, and I quote ``the
    regulatory impact analysis for this proposed rule does not
    include either qualitative or quantitative estimates of
    potential effects on economic productivity, economic growth,
    employment, job creation, or international competitiveness.''
    Do you believe that they--comment on this statement. And do you
    believe they should put that as part of the analysis?
        Mr. Lutter. First of all, I think they should be commended
    for full disclosure, but more importantly, I think they should
    have done more analysis on that. And I think what is
    interesting is exactly with respect to the employment effects,
    that employment is clearly recognized under the executive
    order.
        As Chris DeMuth has pointed out, employment effects are not
    necessarily costs, but it is important, especially in this
    environment, for decision makers to be aware of that and also
    for the public to be aware of employment effects. And I think a
    reasonable economic analysis, especially of a regulation of
    that magnitude, should have taken into account employment
    effects. I am not a specialist in that rule, but that rule is a
    rule of several billion dollars.
        Mr. Shimkus. Thank you. Ms. Harned, in--I don't even know--
    my first term or my second term, I worked with NFIB closely to
    get liability relief for small businesses and Superfund
    obligations as being one of the primary responsible parties,
    then went after the smaller guys who weren't really involved
    other than they used municipal landfill, in this case like
    everyone else. But, of course, two industries used it with
    hazardous material, and then they got pulled in.
        It is under your belief that regulations should have an
    analysis of economic impact on jobs, wouldn't you agree?
        Ms. Harned. Yes, and the Superfund example, I think, is a
    good one of that and just also the key that NFIB has seen with
    our members and regulation generally which is when you talk
    about unintended consequences, typically you are talking about
    what happens with the regulation to the members I represent,
    the small business owners I represent. And I don't think when--
    I would assume when Superfund was enacted, nobody thought that
    we were going to have members letting us know that they spent
    $43,000 to get them out of litigation that they shouldn't even
    have been in to begin with.
        And so doing that work on the front end can help prevent
    those unintended consequences and can help make sure that small
    business owners have the certainty they need going forward so
    that they can hire.
        Mr. Shimkus. And we may follow up on a whole separate
    Superfund hearing because of the cost of litigation versus the
    cost of recovery. Some of the States do a much better job
    because they are not tied into the morass of litigation.
        Dr. DeMuth, do less expensive environment federal
    regulations necessarily mean less environmental protection?
        Mr. DeMuth. No, it is easy to posit a case where a stricter
    rule will result in less pollution, but we have a lot of cases
    where EPA has found ways to reduce the costs of its regulation
    that have actually increased the effectiveness.
        One example would be the lead phase-down regulations,
    which, in addition to--which accelerated the withdrawal of lead
    additives from the gasoline supply. At the time it put those
    rules in place, it put in place a trading system so that
    gasoline refiners had more refining capacity, could substitute
    lead at a faster rate than those with lesser, and make trades
    among themselves. That has been a pretty well-studied example
    of how we reduced the cost of compliance and greatly
    accelerated the removal of lead from the gasoline supply by
    harnessing market incentives to the EPA rules.
        Mr. Shimkus. And I think my clock got all messed up, so I
    don't know how much time, and I want to be respectful of my
    colleagues. I just want to make sure we put in the record the
    guidelines for preparing economic analysis by the EPA December
    2010, just this statement. I don't want to put the whole--in
    9.2.3.3 Impacts on Employment, I quote ``regulatory-induced
    employment impacts are not in general relevant for a benefit-
    cost analysis. For most situation, employment impacts should
    not be included in the formal benefit-cost analysis.'' And I
    think that is part of the reason why we are having this hearing
    because many of us will say it should.
        And then I would like to now--my time has expired. I would
    like to recognize my colleague, Mr. Green from Texas.
        Mr. Green. Thank you, Mr. Chairman. Mr. Lutter, you also
    said that you had worked at OMB.
        Mr. Lutter. Yes, sir.
        Mr. Green. It seems like I recall having dealt with over
    the last many years with agencies and their regulations, that
    oftentimes their regulations are submitted to OMB for whether
    it be cost-benefit analysis or comment before it actually takes
    effect. Is that true?
        Mr. Lutter. That has been the case for many years, yes,
    sir.
        Mr. Green. OK, do you know if OMB does any cost-benefit
    analysis that may be separate from the individual agency?
        Mr. Lutter. Well, historically it doesn't. It offers
    comment on the agency's economic analyses, their benefit-cost
    analyses and other related analyses, all required by the
    Executive Order. Those comments are typically taken seriously
    by the agency that then revises the economic analysis to
    reflect OMB comments. But there is not a separate OMB analysis
    except to improve the analysis of the agency.
        Mr. Green. But there is an analysis. There is an oversight
    of the agency, whether it be EPA or Department of Labor or any
    other agency, that OMB would actually look at their economic
    analysis?
        Mr. Lutter. There is oversight. The magnitude of the
    changes depends on the circumstances.
        Mr. Green. OK, I appreciate that. Thank you. We have heard
    from our Republican colleagues that regulations designed to
    protect the environment and public health may cost too much,
    and they all have been ignored by the other side of the
    equation, and costs are not taking action to protect the
    environment and public health.
        Last year, the Office of Management Budget estimated the
    major federal regulations over the last 10 years costs between
    $43 and $55 billion. Ms. Steinzor, does that cost tell the
    whole story?
        Ms. Steinzor. No, thank you for asking that question. It
    doesn't because it ignores the benefits of regulation, and that
    is a very important part of this equation. Regulation does help
    create jobs because the money is being channeled back into the
    economy. It is not being destroyed. So that is one of the
    reasons why we are emphasizing competitive energy policies that
    will put us ahead in global competition because forcing us to
    stop using polluting materials will be very helpful.
        Mr. Green. OK, I appreciate that. Mr. Lutter, do you agree
    that the balanced discussion of the cost of regulations should
    include a discussion of the benefits too?
        Mr. Lutter. Yes.
        Mr. Green. OK, OMB estimated that the economic benefits of
    major regulations over the last 10 years found tremendous
    benefits up to $616 billion. The benefits oftentimes outweigh
    to cost 3 to 1 and sometimes as much as 12 to 1, but these hard
    numbers don't tell, I think, the human side of the story.
        And I think Mr. DeMuth talked about the reasonableness of
    taking lead out of gasoline, and there was a reasonable
    regulation to be able to trade and to deal with it. I don't
    think any of us would want to go back to what--because there
    are a lot of countries in the world who still have lead in
    their gasoline. But that was probably one that ultimately paid
    off much better.
        And frankly it sounds like from your testimony, it was more
    workable than some of the ones we may see again through lots of
    different administrations.
        Ms. Steinzor, it may be tempting for some to rely on a
    clinical cost estimate to form and justify policy. Do you think
    it makes sense to rely on analytical tools alone, or do we need
    to remain cognizant of the other principles of our society,
    like fairness and justice and equity?
        Ms. Steinzor. Yes, sir, and I actually think that Congress
    did a terrific job on that when it wrote the Clean Air Act and
    the Resource Conversation and Recovery Act and the Safe
    Drinking Water Act and the Toxic Substances Control Act. All of
    those statutes talk about protecting human health and the
    environment with an adequate margin of safety. Those are the
    kind of phrases that you used, and I would just--until you
    change your instructions to the agencies, that is what they are
    going to be following.
        Mr. Green. OK, thank you. One last question in my last 20
    seconds. Typically agency rules, industries have the right to
    go to the courthouse and file, whether it be the NFIB or
    individual affected industries. Don't you think that is also a
    check, and I guess let me ask Ms. Harned if the NFIB actually
    ever filed in court representing a certain part of the industry
    on some regulation you thought was maybe not proper?
        Ms. Harned. Why, we have done that on several occasions
    with EPA, Army Corps of Engineers, and I think a couple of
    other agencies. All of these issues that we were raising were,
    checking the administration for not following Small Business
    Regulatory Enforcement and Fairness Act. The good thing is we
    have that as a tool. The bad news is in the case where we--the
    court agreed with us, the appeals court ultimately agreed with
    us, our members never saw any relief. They just told the
    agency, don't do it again, basically. So the rule never got----
        Mr. Green. Did the agency overrule that--did the court
    overrule the agency?
        Ms. Harned. They did not provide--they did not tell the
    agency to go back and fix the problem. They just said don't do
    it again. So I guess my point is they acknowledged that the
    agency didn't follow its procedures and that that was in
    violation of the law, but they did not go back and fix the
    issue that we were complaining about fundamentally, which was a
    streamline process that had been taken away from small business
    owners for permitting.
        Mr. Shimkus. Gentleman's time has expired. I would just
    weigh in in that there are litigation costs that have to then
    be borne by the small business to even go through that process.
        Mr. Barton. Like to yield 5 minutes to my colleague from
    Kentucky, Mr. Whitfield.
        Mr. Whitfield. Thank you, Mr. Chairman, and thank you all
    very much for your testimony today. One of the things about
    this that bothers me the most is, and some of you touched on in
    your testimony, and that is that Congress does seem to be
    ceding more and more authority to regulatory bodies,
    particularly by writing pieces of legislation that are very
    vague. And it lends itself to interpretations by the way that
    people want to interpret it.
        An example of that, I think Mr. DeMuth pointed this out in
    his testimony, was on the Tarp legislation. We thought they
    were going to be buying toxic assets with some of these public
    funds. Instead, they were making equity investments in
    financial firms, and so I am assuming that most of you would
    agree with me that Congress may be ceding too much authority to
    regulatory bodies. Would you agree with that, Mr. Lutter?
        Mr. Lutter. I think it is very helpful for regulatory
    bodies to have fairly precise instructions about what is
    congressional intent. It facilitates a more technical decision
    rather than an unfettered policy one, which is best left with
    elected representatives.
        Mr. Whitfield. What about your, Ms. Harned?
        Ms. Harned. Yes, I think this is a continuing concern, and
    I do agree, the health care law is a good example of this as
    well that we are seeing right now that is impacting our
    members. And it is really the agencies that are going to----
        Mr. Whitfield. Might I also say that we didn't have an
    opportunity to offer one amendment on the floor on that bill.
    Mr. DeMuth, do you have a----
        Mr. DeMuth. Yes, I agree, sir. If you look across the range
    of EPA's organic statutes, I would say that those that have
    been the most contentious and have lead to the greatest
    problems have been those that given them very, very wide
    discretion.
        And the ones that have been most successful, I think the
    classic case is the automobile emissions standards. They were
    basically written on the hill, and they have been very
    effective. There hasn't been that much litigation.
        Mr. Whitfield. Right.
        Mr. DeMuth. Everybody respects them. Congress spoke.
        Mr. Whitfield. Right.
        Mr. DeMuth. And it reflected--I mean they were
    controversial at the time. The automobile manufacturers didn't
    like them, but Congress made a considered decision that this
    was something that was important. And I think that applying
    that approach much more broadly across RICRA, TASKA, the
    Superfund Program, and the Clean Water and Air Acts would be
    very beneficial.
        Mr. Whitfield. What about your, Ms. Steinzor? Do you agree
    with my statement?
        Ms. Steinzor. I agree that the laws should be specific. I
    actually would observe that the environmental laws are pretty
    specific. I worked for the committee many years ago, and we
    rewrote Superfund. And I actually have counted the pages. It
    went from 50 pages to 400 pages. So very, very specific
    instructions.
        Mr. Whitfield. Yes. Well, I think most people certainly in
    my district agree and feel very strongly that they are losing
    jobs because of regulations. We had a plant close last week,
    and they specifically--the owner of the plant said I am closing
    this because of environmental regulations, and 200 jobs were
    lost right there.
        Now, one of the things that I am totally puzzled about is
    we look at these formulas about benefits versus cost, benefits
    versus cost. And, Ms. Steinzor, in your testimony, you talk
    about the benefits, for example, of the Clean Air Act. By 2020,
    the benefits will be $2 trillion annually. Now, Mr. DeMuth, you
    and Mr. Ginsberg wrote a law journal article one time at the
    University of Michigan in which you looked at formulas used to
    determine benefits, cost-benefit analysis, and you were, I
    believe, critical of some of these formulas being used. Would
    you explain briefly why? I mean it is so frustrating when
    somebody says the benefit is too--I mean you say that a life
    lost would be $84,000 or whatever. Could you just comment
    briefly on the formulas used to calculate these benefits?
        Mr. DeMuth. I think that the approaches to calculating
    benefits have become more specific over time and better, but
    that they involve enormously large room for subjective
    judgment.
        Professor Steinzor and also Administrative Jackson last
    week cited a figure of 650,000 lives saved per year from EPA
    regulations. I regard that as preposterous, intellectually
    embarrassing. They think it is reasonable. What they do is they
    take the amount of pollution in America in 1970, and they take
    GDP in 1970 and they take GDP today, and they multiple it by
    the pollution in 1970. Now, we probably would be saving that
    many lives, but you know what? We wouldn't be able to see each
    other if pollution had increased that much. And then they take
    credit for all of the difference.
        So you can see a lot of very poor procedures, and this is
    the administrative EPA talking before an important
    congressional committee. So you can see that the opportunity
    for exaggeration is still immense.
        Mr. Shimkus. The gentleman's time has expired. The ranking
    member asked if we could allow Ms. Steinzor to, because some of
    her testimony was questioned, a brief response. So I am going
    to ask unanimous consent that we allow Ms. Steinzor to respond
    for a minute. Without objection. Ms. Steinzor.
        Ms. Steinzor. Thank you. The estimates of benefits that are
    made under things like the Clean Air Act and other statutes are
    very low because we assume, for example, that if a child is
    brought to an emergency room with an asthma attack, that that
    attack is worth $363. I don't even think they let you through
    the door or give you a plastic ID bracelet for $363. And the
    cost of a nonfatal heart attack in a person under the age of 24
    is $83,000. So unless you actually die of your heart attack,
    that is all the amount of money we think it is worth to prevent
    having you exposed to air pollution that can make your heart
    disease worse or give you--worsen your asthma.
        So these benefits--I would disagree with Mr. DeMuth. These
    benefits are likely to be much, much higher than what EPA says
    they are.
        Mr. Shimkus. And thank you, ma'am. Now, I would like to
    recognize Congressman Joe Pitts from Pittsville for 5 minutes.
    Pennsylvania.
        Mr. Pitts. Thank you, Mr. Chairman. Mr. DeMuth, in your
    written testimony, you state ``on the cost side, these include
    higher prices, the loss of many good things outside the realms
    of environmental quality and employment such as the quality and
    reliability of some products and services.''
        Could you please give us some examples of quality and
    reliability losses? And does this affect the ability of
    businesses to access capital to either comply with more
    burdensome requirements or to simultaneously comply and hire--
    expand their businesses?
        Mr. DeMuth. The costs could certainly take the form of
    those you suggest. I had in mind more kind of direct and
    obvious things. Sometimes installing pollution control gear
    simply raises cost. Sometimes it lowers the utility of a
    product. The hardware that we use to control pollution on cars
    degrades the performance of the car. We have all gotten used to
    it, and pollution has gone down enormously. But the performance
    of cars in terms of miles per gallon is less than it would have
    been otherwise.
        A good example for people in the Washington area,
    especially those that have experienced power outages in the
    past couple of weeks, is the reliability of our power system.
    The Clean Air Act through--I mean people on the staff will--who
    are down in the weeds will understand this. The Clean Air Act
    discourages plant modernization in the electric power business
    because of a curious anomaly in the Act where if you try to--
    you may have a lot of good reasons for renovating your plant.
    If you renovate the plant, it will reduce pollution and make
    the power supply much more reliable. But you will trip yourself
    into so much more stringent regulations.
        And so power companies tend to defer and delay, and EPA has
    been trying to fix this for 20 years. It is something that I
    would recommend to legislators to fix. It hasn't been able to
    do it, and I think that the effect on keeping our power grid up
    to date through keeping the generating facilities up to date
    has been very substantial.
        Mr. Pitts. Thank you. Ms. Harned, you say that small
    businesses spend 36 percent more per employee to comply with
    environmental regulations than larger businesses, while small
    businesses provide two-thirds of the new jobs. Does this mean
    that the Small Business Regulatory Enforcement and Fairness Act
    simply does not work?
        Ms. Harned. Well, it works when it is followed again the
    letter and the spirit of it. What we have noticed is when the
    Act was first introduced, there was more of blatant
    noncompliance, I think, than you would find today 20 years
    later, though that still occurs. I think what you see though is
    ways to do the end run around it, to maybe not certify a rule
    that otherwise would be certified to have a more in-depth small
    business analysis.
        And our view of the world is, look, once these regs are on
    the books, they are on the books. And getting them off has
    proven to be very difficult if not impossible. Why not do your
    homework on the front end and make sure that you use the tools
    that are given to you through the law to solicit small business
    impact and really understand how a law--how a regulation is
    going to work before implementing it? I know it takes time on
    the front end, but it is much better to do it that way than
    have to clean up a mess later like you saw in Superfund and
    other things like that.
        Mr. Pitts. Thank you. Mr. Lutter, finally, do you believe
    that the creation of new enforcement and compliance jobs
    related to the issuance of a new rule should be given
    substantial weight in the net jobs calculation?
        Mr. Lutter. I have concerns about it, net jobs
    calculations, even though I understand its appeal to many
    parties. I have tried to articulate a preference for a
    conventional calculation of benefits being shown to justify
    cost as a basis for issuing a regulation.
        I think, having said that, there is a variety of effects on
    employment that are also legitimate to consider in that
    benefit-cost calculation. And my survey indicates that some
    analyses for some regs are not doing that. I think with respect
    to employment--or, I am sorry, enforcement jobs themselves, if
    there is an enforcement job in the regulatory agency and that
    function is now required to ensure compliance with the rule,
    then that job is a cost of the rule and ought be considered as
    such.
        Similarly, if there is an enforcement compliance officer in
    the regulated industry that now is not otherwise hired and that
    person's sole function is to ensure that they are complying
    with red tape, that is also a cost.
        Mr. Pitts. Thank you.
        Mr. Shimkus. Gentleman's time has expired. The chair now
    recognizes the gentlelady from California, Ms. Capps.
        Ms. Capps. Thank you, Mr. Chairman. I would like to turn to
    Mr. DeMuth. Thank you for the testimony, each of you. Mr.
    DeMuth, your testimony suggests that environmental regulations
    are no longer as cost effective as they once were because the
    marginal benefits have decreased. Essentially you are
    suggesting we have kind of already largely solved the problem
    of pollution. I wish that were true. The Centers for Disease
    Control has found that chemical exposures in this country are
    everywhere, and we see the public health impacts of those
    exposures.
        According to the CDC, 90 percent of people tested have BPA
    in their bodies. Nearly every person tested had toxic fire
    retardants in their blood, and autism rates are rising at an
    alarming pace. California, for example, where we have a lot of
    pollution, autism rates have grown sevenfold in recent years.
        Last year, the president's cancer panel released a report
    focused on the link between environmental exposures and cancer.
    As they noted in 2009, one-and-a-half million Americans were
    diagnosed with cancer and 562,000 died from the disease. The
    panel concluded that reform of the Toxic Substances Control Act
    is--and they laid quotes around this--``critically needed.''
        Mr. DeMuth, are these experts and scientists wrong to say
    that we need to be doing more to address environmental
    exposures to harmful chemicals?
        Mr. DeMuth. I don't think they are wrong, and I don't think
    you are wrong. And I am sorry that--I think you may have
    misinterpreted what I said. I said that I thought that EPA
    regulations were becoming less cost effective over time. I
    didn't say there was no pollution left. I didn't say there was
    nothing left to do.
        To take your CDC case, one of the pollutants, toxic
    pollutants people have been most concerned about has been
    mercury. The CDC measures of mercury, for example, women 15 to
    40, their conventional categories, the measured amounts have
    been below their reference rates since about 2000 and----
        Ms. Capps. I don't want to cut you off, but I want to move
    on because I have other questions. But we will agree----
        Mr. DeMuth. If you look at mercury regulations that EPA is
    dealing with, the amount of additional mercury being subtracted
    is extraordinarily small at high costs, and that compares----
        Ms. Capps. Well, that is not the same with every kind of
    chemical though, but I----
        Mr. DeMuth. No, that is an example of what I had----
        Ms. Capps. That is what you were driving at?
        Mr. DeMuth. Yes.
        Ms. Capps. OK, but you do agree that we need to do more, we
    need to be doing more to address environmental exposures----
        Mr. DeMuth. Of course.
        Mrs. Capps [continuing]. To harmful chemicals. Do you agree
    that we should reform TSKA, for example?
        Mr. DeMuth. I think that would be highly worthwhile.
        Ms. Capps. OK, so I can see that----
        Mr. DeMuth. We might, you know, I am not--what I would want
    to do with the Act, you know, I am not sure, and I don't know
    what the various proposals are.
        Ms. Capps. Let me turn then to Ms. Steinzor, and I
    appreciate very much----
        Mr. DeMuth. OK.
        Mrs. Capps [continuing]. Your answering my question.
        Mr. DeMuth. Thank you.
        Ms. Capps. Ms. Steinzor, what do you think? Do you think we
    need to be doing more to address environmental exposures to
    harmful chemicals?
        Ms. Steinzor. Yes, we need to be doing a lot more, and to
    use your example of the Toxic Substances Control Act, we have--
    many people don't realize this, but we don't test chemicals
    before they are put on the market in this country and----
        Ms. Capps. You wait and see what happens.
        Ms. Steinzor. We wait and see what happens, and people are
    basically human guinea pigs when that goes on. And a very big
    need to revise TSKA in that way.
        Ms. Capps. Well, some of my colleagues, we hear a lot from
    them about the failures of the current regulatory system. They
    suggest that the failure is a result of staffers at the
    agencies running amok. I don't think that is the case, but
    instead of pointing fingers at staffers in agencies, there
    might be some other reasons. What are some of the examples that
    you would give to why we are not continuing in the path the way
    we should?
        Ms. Steinzor. The agencies are drastically underfunded. EPA
    hasn't had a raise in constant dollars in its funding since
    1984, and you have passed a series of laws thousands of pages
    long since that time that give them all sorts of new
    responsibilities. And they just simply can't keep up with the
    very important mandates that Congress has given them.
        Ms. Capps. I appreciate that. You know, Mr. Chairman, I
    wish we lived in a world where EPA had worked itself out of a
    job. Someday perhaps we will be able to do that, but cancer
    patients and parents of autistic children nationwide know that
    we are not there yet. Scientists nationwide know that to
    achieve the goal of getting rid of pollution, we are going to
    need to strengthen the Environmental Protection Agency's
    authority, not take away essential EPA tools. And with that, I
    will yield back.
        Mr. Shimkus. I thank the gentlelady, and I would like to
    yield to the gentleman, Congressman Bass, for 5 minutes.
        Mr. Bass. Thank you very much, Mr. Chairman, and I am most
    apologetic for coming in late. If there are any questions that
    have already been addressed, you just say so, and I can take a
    look at it in the record. I have two questions. Dr. Lutter, you
    make a good case in your testimony that analysis of regulatory
    action should indicate that the action will have clear net
    benefits and no, if you will, unnecessary, underlined, burdens.
    And you argue that this discipline will promote public
    understanding and accountability for legislators.
        Will the result of that kind of policy be fewer regulations
    or better regulations in your opinion, fewer new regulations?
        Mr. Lutter. Thank you. I think it is--the result will be an
    improvement in regulation, which would be measured both by the
    quantity and the quality. I think of this really as analysis
    has two functions to perform.
        One is it has a function to let the regulators at the
    regulatory agency and the White House know about the intended
    effects so that they know when they are regulating what are the
    best estimates available to them about the consequences of
    their regulatory decision, surely for public health and safety,
    also for cost. But especially in this constrained environment,
    on unemployment. I think that is something that is fair for
    them to be informed of.
        But also with respect to public accountability. I think
    then the question is is there information being given to
    Congress and to the public about what the government knows
    about the consequences of its regulatory decisions and provided
    that the analysis is carefully done to meet credible standards.
    And I think the public accountability function can be helped by
    more credible analysis of regs.
        Mr. Bass. All right, Dr. DeMuth, do you think that the
    Administrative Procedures Act and regulatory reviews are being
    used in assessing the true needs and appropriate burdens for
    federal regulations and making appropriate adjustments when
    required?
        Mr. DeMuth. Congressman, I am afraid I don't have a very
    helpful answer to that. The Administrative Procedure Act
    basically requires the agencies to make decisions that comport
    with the statutes and to follow certain procedures for notice
    and comment. And then it has a fallback saying that decisions
    can't be arbitrary or capricious. I think that is basically a
    pretty good structure.
        There is a lot of talk in Washington these days about the
    quite surprising growth in the use of a technique called
    interim final rules. A lot of agency rules in the past year, I
    think because the agencies are swamped in part because Congress
    gave them a lot of new business to do in some big statutes last
    year, and they are resulting to interim final where they just
    announce what they are going to do. There is no notice and
    comment at all.
        That was intended as sort of an emergency procedure where
    here is our interim final, but now we are going to have a rule-
    making proceeding. But in a lot of cases, it appears that the
    interim final rules are really going to be the final final
    rules. So that, I think, suggests some problems with the APA
    that might be addressed.
        Mr. Bass. Do you think that there was any significant
    discretion on the part of the agencies in the amount of rule
    making, understanding that the Congress may have burdened them
    with new requirements, but could they have taken a different
    route that might have resulted in a lighter regulatory burden?
        Mr. DeMuth. Yes, sir. That is a pervasive effect, a
    pervasive phenomenon. There are lots of statutes in the
    environmental area and many others as well that give the
    agencies very, very wide discretion in making hard tradeoffs
    between various goods and the single purpose agency, whether it
    is the EPA or the FDA or whatever, is always going to favor the
    goods that you all in Congress instructed it to promote. That
    is its job, but when you give it a lot of discretion, you can
    expect the agency to push and sometimes go too far.
        Mr. Bass. Thank you, Mr. Chairman.
        Mr. Shimkus. I thank the gentleman. The chair now
    recognizes the gentleman from Ohio, Mr. Latta, for 5 minutes.
        Mr. Latta. Thank you, Mr. Chairman. Appreciate the time and
    thanks to our panelists for being with us today. A lot of
    questions and just kind of get a little background of where I
    am coming from. I represent the largest manufacturing district
    in the State of Ohio, 2\1/2\ years ago was the ninth largest in
    Congress. And I am not going to tell you where we are today and
    what has happened.
        But, you know, no one out there in my district or across
    Ohio or across this country doesn't want to say that we don't
    want clean air or clean water. But, you know, if I could start
    with Mr. DeMuth, going back to page three of your testimony,
    which I found interesting. Again you are talking about your
    percentages that are out there and where things have gone. And
    you were talking about the '70s and the '80s. You said in both
    cases, the single-purpose agency having achieved say a 90
    percent reduction in risk or pollution will then wish to tackle
    another 8 percent and then on.
        And so, I would just like to start with that because I have
    communities in my district that draw water from--we have a lot
    of rivers. But EPA standards are getting to such a point that
    the parent companies of these plants that are located in these
    communities are saying if your cost goes up anymore, we are
    going to pull you. And so I found your testimony interesting
    because that is going on in our area right now.
        And I just wandered if you could comment on what you have
    seen also nationally.
        Mr. DeMuth. What did you say I could comment on?
        Mr. Latta. If you--nationally. If you could comment on
    that, if you have seen other statistics nationally on that.
        Mr. DeMuth. I wish I could be more helpful. I mean there
    are a lot of--there is a lot of evidence such as the kind that
    you cite. When I was working on these matters in the
    government, I would see a lot of them. I think that there are
    many EPA rules that are very sensible and well crafted, but the
    general tendency is to push much too hard.
        And it is a--one of the best things that has been written
    on the subject is by Justice Breyer of the Supreme Court when
    he was an academic. He wrote a book called ``Squaring the
    Vicious Circle'' and he pointed out that single purpose expert
    agencies, without a budget on compliance costs, will try to go
    all the way to 100 percent. And as the costs get higher and
    higher, you get more cases such as those in your district. And
    they will essentially push until they get somebody pushing
    back, which is what is happening today.
        Mr. Latta. Thank you. Pardon me. Ms. Harned, Ms. Steinzor
    said a little bit ago that regulations create jobs. Do you
    agree with that?
        Ms. Harned. That has not been the experience of our
    members. They consistently cite regulations as one of the
    reasons, over the last 26 months, in fact, one of the top three
    reasons they are not hiring in this economy.
        Mr. Latta. Let me ask you this. Have you heard of any of
    your other NFIB members out there have situations like this?
    Again when I am home, I go through maybe two to three to four
    plants a day, and they are either very small or very large. But
    I was in one place. It was kind of disconcerting because the
    gentleman said that, after I heard him talking about some
    situation here with the EPA, I said well what was it that the
    EPA said when you talked to them? He said well, here is the
    problem. He said he told him that if he had to implement all
    these regulations, that they are going to put him out of
    business. And the comment back to him from the regulator was we
    don't care.
        Ms. Harned. Right, and I feel like that is very much the
    sense that we get from our members, from the regulators, and
    also the concern that it is--they are always--the concern that
    it is a gotcha mentality on enforcement and that you really
    can't win. If they come in your place of business, there is so
    much on the books, they are bound to find something. And that
    really is not what helps public health and safety anyway. You
    want be having more of a partnership approach.
        This worked really well, truthfully, and the last probably
    9 years with OSHA where they were really working with small
    business owners to help them understand their obligations.
    Compliance assistance was very much a focus at that agency from
    2000 to 2008, and as a result, you saw injuries go down. I mean
    we have proof to show that you can get positive benefits for
    the public by having more of a cooperative approach with the
    regulators instead of a gotcha mentality.
        Mr. Latta. Thank you. And, Mr. Lutter, on page 7 of your
    testimony, I found something also interesting because I tell
    you with my district, I see it all the time. You cited a study
    from a Michael Greenstone. He is now with MIT talking about the
    question of comparing counties that were and were not in
    attainment under the Clean Air Act. And I know of a situation
    in my district where contiguous counties to a larger county
    were all placed on a nonattainment because of the one county
    being just--artificial line is how they drew it, and everybody
    fell into it, even though the other counties were not in the
    situation of being nonattainment.
        But I know that you say on page eight then, of your
    testimony, that these estimates probably overstate the national
    loss of activity due to nonattainment designations. But I can
    see that jobs are being moved because of this nonattainment.
    And just wondered if you could comment again on that.
        Mr. Lutter. Well, this is actually a very interesting study
    that you cite precisely because it is one of the most careful,
    comprehensive, authoritative. Its ``Journal of Political
    Economy'' reviews of what in many ways is a cornerstone of the
    Clean Air Act. And though that has been extensively studied,
    one question is just, retrospectively, if you look at the
    nonattainment versus the attainment counties, what does it do?
    And the answer is you get these large adverse effects on
    employment in the nonattainment counties.
        The author, quite appropriately, says, well, there is this
    risk of a certain amount of shifting of jobs to the attainment
    counties, which could be interpreted as the result of two
    things. One is the regulations are less onerous there, and the
    other one, of course, is the air quality is better so maybe
    people are moving for that reason as well.
        What I think is interesting is the extent to which that
    analysis may speak to current dilemmas because, as I pointed
    out, one of the regulations that I looked at is also the Ozone
    National Ambient Air Quality Standard, and that has been
    repeatedly--I know it is not within the jurisdiction of this
    committee, but it has been repeatedly revised. And it is
    interesting how, as an illustration, as Chris DeMuth pointed,
    it points to more and more increasingly stringent options being
    considered and adopted by the regulatory agency even at the
    detriment of cost and compliance costs.
        Mr. Latta. Thank you, Mr. Chairman. Yield back.
        Mr. Shimkus. The gentleman's time has expired. Chair
    recognizes the gentleman from Mississippi, Mr. Harper, for 5
    minutes.
        Mr. Harper. Thank you, Mr. Chairman, and I appreciate each
    of you being here and shedding some light on this. And I can
    only tell you that I can't find a business or an industry in my
    district that thinks that they are under-regulated. And so we
    have to deal with those issues on a regular basis, and trying
    to find that proper balance is something that I hope we can do
    in this Congress.
        And the question I would have for you, Mr. DeMuth, is are
    you concerned about proposing the use of performance standards,
    that you are actually encouraging the Federal Government to
    dictate the means of production or investment in manufacturing
    in this country?
        Mr. DeMuth. A performance standard, in my understanding, is
    a standard that says this is the amount of pollution we are
    going to permit. And I generally think that that is superior to
    a technology standard that says this is the way you are going
    to manufacture tires or this is, you know. So in general, I
    think that performance standards involve less dictation to
    businesses about how they will meet pollution obligations and
    have more flexibility.
        There are cases where I think that the advantages of
    performance standards outweigh this, but in many, many more
    cases than we permit today, I would think that moving to
    performance standards would be a step in the right direction.
        Mr. Harper. When you are looking at the environment
    standards or statutes that are in place, what comes to the top
    of your list of what most needs to be reformed? If you had to
    identify a couple that you think are definitely in need.
        Mr. DeMuth. I would say in the jurisdiction of this
    committee, the RIKRA and Superfund statutes, I think that they
    have produced some good--RIKRA has definitely produced some
    good things. Together, I think they have been woefully
    inefficient. I think probably the worst environmental statute
    is outside of your jurisdiction, and that is the National
    Ambient Air Quality Standards portion of the Clean Air Act with
    all of the State implementation plans.
        There is an enormous amount of waste and inefficiency
    simply in the administration of this program. And if you
    compare it to automobile pollution standards, what Congress has
    done directly in the acid rain and ozone standards, where we
    had Congress itself making a decision, reflecting the consensus
    of our representatives as to what the standard was going to be
    and how fast we were going to pursue it, I think those have
    been much more effective.
        And if you go back to 1970, you can see why people were
    interested in this State implementation plan approach, but it
    has become a bureaucratic quagmire, and it is not doing
    anything good for the economy or the environment. It could be
    doing much more.
        Mr. Harper. And I would love to have your take on how you
    view the large federal deficits and amount of federal spending,
    what impact you are seeing that have in your view on businesses
    in this country.
        Mr. DeMuth. I think that it is a powerful suppressant to
    business investment because it creates the idea that our
    national government itself will be at risk, that our borrowing
    will be downgraded. These are things that a lot of
    businesspeople take seriously, and it leaves them, like
    consumers, wondering about our future and making them much less
    likely to make large capital investments.
        Mr. Harper. Thank you. Yield back.
        Mr. Shimkus. Gentleman yields back his time. The chair
    recognizes the gentleman from Louisiana, Mr. Cassidy, for 5
    minutes.
        Mr. Cassidy. Ms. Steinzor, am I pronouncing that correctly?
    I came in late.
        Ms. Steinzor. Yes.
        Mr. Cassidy. You know a heck of a lot more than I do about
    this, and I am actually going to explore the theoretical, which
    is not under our jurisdiction. I am going to speak about Clean
    Air Act, but I am just interested in picking your brain because
    I kind of agree with these folks. So I learn, if you will, from
    you whom I may agree or disagree.
        Clearly the elephant in the room of our economy is whether
    or not CO2 and greenhouse gases are going to be
    regulated. An incredible concern in my district from Baton
    Rouge, Louisiana. Lots of people with good jobs and good
    benefits are employed in these industries.
        As I read about the cap-and-trade bill, one thing that they
    said was almost inevitable, there would be carbon leakage.
    People would just move their carbon-intensive enterprises to
    another country, losing the jobs, just shipping the jobs
    overseas but still emitting the greenhouse gas.
        Just accepting for the sake of argument that this is a
    concern, you know, and then I think I recently saw a big steel
    plant out of Spain who relocated, just shut down. When I asked
    why, they said well, heck, they just sold their credits. It was
    easier for them to move their carbon intensive or energy
    intensive enterprise elsewhere than to put up with the
    regulations. And I am thinking as I look at Spain's fiscal
    mess, wow, maybe this contributed to the fiscal mess.
        So in the theoretical, where a regulation or a regulatory
    environment comes in and says thou shalt, and the easiest way
    to comply is to say adios and to move down to some place where
    they speak Spanish or Chinese or you name it, regulation
    doesn't kill jobs in that regard? You follow what I am saying?
    I mean it just seems like there is this exodus of jobs related
    to this sort of regulation.
        So again it is not under our jurisdiction, but I figured
    that could be the basis of, if you will, a theoretical
    conversation.
        Ms. Steinzor. I would point to perhaps the most devastating
    event in your State, which would be the Deepwater Horizon
    spill.
        Mr. Cassidy. Now, if I may, I think you point out correctly
    that the problems there is not the absence of regulation but a
    dysfunctional regulatory environment. And I would also point
    out that ongoing, we have a job moratorium now because they
    can't, although with resources, they can't pull their
    regulatory environment together. So a lot of people who depend
    upon these jobs for their mortgages can't get work.
        I am sorry. That just touches a button in me because I know
    so many families that are connected by this kind of heavy hand
    of government destroying their ability to work and support
    their families. I am sorry. Continue.
        Ms. Steinzor. Well, I have a lot of compassion for those
    people too, and I would suggest to you that the entity that
    cost them the jobs was British Petroleum in cooperation with
    Transocean and Halliburton.
        Mr. Cassidy. Now, that is to imply though that the other
    actors out there, Chevron, Exxon, Mobile, you name it, are
    doing the same sort of bad behavior as BP. There is no evidence
    for that. Indeed the National Academy of Engineers said that
    the problems of the Macando Well were identifiable and fixable
    and that the moratorium would not appreciably increase safety.
    So we have thousands of people out of work because one bad
    actor is--that is being ascribed to everybody else.
        Ms. Steinzor. Well, I think the moratorium was lifted, but
    I think what my point was, and the oil spill commission
    certainly concluded this, that there are systemic problems
    throughout the whole industry, but if we were to just look at
    British Petroleum in isolation, it had profits of $19 and $17
    billion.
        Mr. Cassidy. I am not putting--now, believe me, we can
    agree. I knew we would have common ground. We can put BP on the
    dock, and we are going to both be in agreement. My concern
    isn't about----
        Ms. Steinzor. But that is----
        Mr. Cassidy. Yes, BP as a bad actor, about the fact that
    good actors are now being penalized because the regulatory
    environment can't--and people are losing jobs. I mean job--they
    got rigs moving to the coast of Africa with the jobs that go
    with it. Because the regulatory will not get off bottom center
    to allow good actors to again begin to work.
        Now, to me that just seems a total kind of tyranny of the
    regulator.
        Ms. Steinzor. Well, again we have 55 inspectors in the Gulf
    of Mexico to inspect 3,500 oil rigs and production platforms.
    So I am not going to lay a bet that there won't be another
    spill, but if we look at countries that don't have any
    regulation, they do pay an incredible price. I mean there is an
    article in the British medical journal ``The Lancet''----
        Mr. Cassidy. I am not at all--excuse me. Just because I
    have limited time. I am not saying don't regulate. I am just
    saying the tyranny of the regulator right now who always shifts
    it so that you can never quite get your permit. And the people
    who depend upon those jobs don't have their jobs with the
    salary and the benefits.
        Ms. Steinzor. I guess what I am trying to say is that I
    don't think those 55 inspectors are feeling particularly
    tyrannical and that the big economic cost to Louisiana was
    unregulated industry that really was careless, negligent, was
    making outrageous profits and squandered the economic and
    natural health of the whole Louisiana coast.
        Mr. Cassidy. If I may say, I would say it was not--it was a
    single actor, BP. If I may finish. It was a single actor called
    BP, and again as according to the president's own handpicked
    council of engineers, this was not a--the problems were fixable
    and definite. And lastly, it is not the 55 frankly. It is
    Brownwich and Salazar. So at some point, they become the
    translator of someone who decides to otherwise squash an
    industry. Thank you.
        Mr. Shimkus. The gentleman's time has expired. We want to
    thank the first panel for their testimony. You may get
    questions in writing from members as a follow-up. We would ask
    if you do, to respond, and we do appreciate your testimony.
    Since I had to start this thing so quick so we could get done,
    the way this hearing was set up was to talk to the economists
    big picture. Second panel deals with case studies from
    individuals. So that is how this was set up, and we appreciate
    you coming.
        And now we will ask for the second panel to be seated. We
    would like to thank the second panel for joining us. Because I
    have time, I will introduce you all at one time, and then we
    will start from my right to left for the 5-minute testimonies.
        Joining us on the second panel will be Leonard F. Hopkins,
    fuel procurement and reliance manager from Southern Illinois
    Power Cooperative, serves portions of my congressional
    district, which I said in my opening statement. And we are
    happy to have you here.
        Mr. Joseph Baird is a partner in Baird Hanson Limited
    Liability Partnership. Ms. Marcie Kinter, vice-president,
    Government and Business Information, Specialty Graphic Imaging
    Association. We have--not in order--Wendy K. Neu, executive
    vice-president, Hugo Neu Corporation, and chairperson of We
    Recycle. And last but not least the Honorable Vince Ryan,
    Harris County attorney.
        Welcome, and we will start with Mr. Hopkins with your 5-
    minute testimony. Again your entire testimony will be submitted
    for the record. Executive summary within the 5 minutes as close
    as possible. And welcome.

    STATEMENT OF LEONARD F. HOPKINS, FUEL PROCUREMENT AND RELIANCE
      MANAGER, SOUTHERN ILLINOIS POWER COOPERATIVE; JOSEPH BAIRD,
     PARTNER, BAIRD HANSON LLP; MARCIA Y. KINTER, VICE PRESIDENT,
     GOVERNMENT & BUSINESS INFORMATION, SPECIALTY GRAPHIC IMAGING
      ASSOCIATION; WENDY NEU, EXECUTIVE VICE PRESIDENT, HUGO NEU
     CORPORATION; AND VINCE RYAN, COUNTY ATTORNEY, HARRIS COUNTY,
                                 TEXAS

                    STATEMENT OF LEONARD F. HOPKINS

        Mr. Hopkins. Thank you very much. Good afternoon. My name
    is Leonard Hopkins, as stated, and I serve as the fuel and
    compliance manager for Southern Illinois Power Cooperative. I
    am honored to have the privilege to appear before you today.
        Southern Illinois Power is generation and transmission
    cooperative serving approximately 250,000 people and businesses
    located in the southern-most counties of Illinois. We are a
    not-for-profit corporation and are owned directly by our
    members. SIPC operates one power generation station south of
    Marion, Illinois which utilizes two coal-fired boilers to
    generate power for its members.
        When each of these boilers was built, they were equipped
    with state-of-the-art pollution control equipment that would
    allow them to burn Illinois bituminous coal and meet all
    environmental regulations. We continue to comply with such
    regulations today.
        The coal combustion residue regulation being proposed by
    EPA poses a serious threat, excuse me, to the economic survival
    of the cooperative for which I work. My comments will focus on
    the effects EPA's decision could have on Southern Illinois
    Power. I believe these comments also reflect the sentiments of
    many of our nation's electric cooperatives. Southern Illinois
    Power Cooperative has been utilizing its coal combustion
    byproducts in beneficial ways for over 20 years. Roof shingle
    sand, abrasive products, mine reclamation, cement, and
    fertilizer blends are all example of ways our coal combustion
    residues are recycled into beneficial products for society.
        Southern Illinois Power is concerned that placing the label
    of hazardous on coal combustion residue will place the same
    stigma on all coal combustion byproducts and effectively end
    the possibility of recycling such materials. In the litigious
    society of today, manufacturers and end users will flee from
    any recycled product that is remotely related to hazardous
    waste. Such an action would remove these recycled products from
    the marketplace, and the recovery of replacement materials
    would require increased emissions of carbon dioxide and other
    pollutants.
        Further, small virtually unavoidable spills of ash at power
    plants could be considered illegal disposal of hazardous
    material and could cause the plant to be in a constant state of
    noncompliance. Shipments to hazardous waste landfills in the
    country could increase tenfold as such hazardous waste
    landfills might be completely filled in only 2 years. The
    barriers to compliance associated with such an action could
    conceivably drive coal-fired power generators like Southern
    Illinois Power out of business.
        Southern Illinois Power Cooperative is a small generation
    and transmission system and defined as a small business by the
    U.S. Small Business Administration. By regulation, cooperatives
    are not allowed to maintain large capital reserves.
        When the cost of running our business suddenly increases
    like it would under the subtitle C option, we must go directly
    to our lenders. There is no cash cushion to mitigate these
    increases, and the cost of new loans would be shared by each
    co-op member owner in the form of higher electricity rates.
    SIPC conservatively estimates the subtitle C option would cost
    its members a minimum of an additional $11 million per year,
    which is about 25 percent of our current annual fuel budget,
    and we serve an area of the State that has up to 15 percent
    unemployment.
        In cases where businesses like SIPC are affected, EPA is
    obliged to pursue the least costly approach in order to
    mitigate impacts on facilities that can least afford them.
    Moreover, Congress made clear in enacting the Bevel Amendment,
    under which this decision is being made, that EPA should avoid
    the subtitle C option if at all possible.
        Under the subtitle D option, EPA can promulgate federal
    regulations specifically designed for CCR disposal units. These
    regulations would be directly enforceable by the States and the
    public under RIKRA citizen supervision, and violators would be
    subject to significant civil penalties. Excuse me. EPA would
    also retain its imminent and substantial endangerment authority
    to take action against any CCR units that pose risk to human
    health or the environment.
        The D prime option would enable EPA to establish an
    environmentally protected program without crippling CCR
    beneficial use and imposing unnecessary costs on power plants,
    threatening jobs and increasing electricity costs.
        In conclusion, Southern Illinois Power agrees with many
    others who are already on record as opposing the subtitle C
    approach. This list includes a bipartisan group of 165 House
    members and 45 U.S. senators in the 111th Congress, virtually
    all the States, other federal agencies, municipal and local
    governments, CCR marketers and beneficial users, unions, and
    many other third parties who have maintained that regulating
    CCRs under RIKRA's hazardous waste program is simply regulatory
    overkill and would cripple the CCR beneficial use industry.
        We respectfully suggest there is no reason to pursue this
    approach when the subtitle D prime option offers the same
    degree of protection without the attendant risks and burdens of
    subtitle C.
        Thank you again for the opportunity to express the views of
    a small cooperative regarding a proposed regulation that will
    have lasting effects on the lives and livelihoods of our
    members. Thank you.
        [The prepared statement of Mr. Hopkins follows:]

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        Mr. Shimkus. Thank you, Mr. Hopkins, and I recognize Mr.
    Baird for 5 minutes. Let us get your microphone set.

                       STATEMENT OF JOSEPH BAIRD

        Mr. Baird. That will help. I am Joe Baird, a partner in
    Baird Hanson Williams, a mineral resource firm in Boise, Idaho.
    I am also president of the Northwest Mining Association. Today
    I am representing the Idaho Cobalt Project of the Formation
    Capital Corporation, U.S.
        But the problem we now seek to address is not unique to
    formation. It is a problem for any mining company operating or
    hoping to operate on federal lands. And by showing up here
    today, we were hoping to alert the Congress and the executive
    branch to a developing duplication of--a true duplication of
    environmental regulatory burdens that are already managed by
    longstanding programs of the BLM and the Forest Service
    governing exactly the same subject matter and covering the same
    technical issues as an EPA regulatory initiative.
        Now, just quickly on the Cobalt Project, it is a project
    that is at the end of permitting, and it is--it will consist of
    an underground mine and a floatation mill that uses simple
    physical separation of ore from country rock, eliminating the
    need to use aggressive chemicals for the milling.
        The project footprint is only about 135 acres, and it is
    located within a traditional cobalt mining district. And to the
    extent possible, the project will backfill workings with
    cemented paste tailings and development rock and use dry stack
    tailings for surface storage to eliminate the need for a
    tailings bond. Project will produce about 185 direct jobs, $8.2
    million in annual payroll, $8.8 million in taxes annually for a
    minimum of 10 years and will importantly be the only source of
    super alloy cobalt in the U.S. Super alloy grade cobalt is a
    critical component of all jet engines and many green
    applications including hybrid cars, solar cells, and wind
    turbines.
        Currently all U.S. needs are met by importation primarily
    from a single foreign company. Formation is very proud of the
    fact that the Forest Service approval of the final environment
    impact statement has not been challenged. We have written our
    verbal understandings with the Shoshone Bannock Nations, the
    Nez Perce Nation, the Idaho Conservation League, Boulder White
    Clouds Council, Earth Works, and Western Mining Action Project.
    We were and are grateful for those constructive discussions.
        Yet even with all of these favorable attributes, the
    project took 7 years to permit, and that is simply too long.
    Today, we are not even going to try to deal with those
    permitting issues, but we are trying to head off something
    coming at us or coming at the industry as a whole.
        For decades, mines on federal lands have been subject to
    strict, site-specific reclamation financial assurance
    requirements of the Forest Service or the BLM. The Cobalt
    Project is on land managed by the Forest Service, but EPA is
    developing its own financial assurance requirements for all
    hard rock mines, including those already subject to financial
    assurances of the BLM and the Forest Service.
        If EPA proceeds as they are currently planning, it would
    end up causing financial assurances to be bonded, to be cash
    bonded actually, beyond what the Forest Service or the BLM
    determines is actually needed to protect the environment. The
    debt capital requirement would unnecessarily force termination
    of many existing mines, jobs, public and private revenue
    streams, and hamper creation of new mines supplying strategic
    and base metals and materials necessary to sustain U.S.
    manufacturing jobs.
        Implicit in EPA's position is that Forest Service BLM
    programs are managed so incompetently that as a class mines on
    Forest Service or BLM lands constitute a degree and duration of
    risk that EPA must--that causes EPA to must duplicate the long
    established Forest Service and BLM programs.
        Yet in 1999, the National Research Council of the National
    Academy of Science as responding to Congress found that
    existing Forest Service BLM framework to be ``generally
    effective in protecting the environment'' and more importantly
    even for this purpose that ``improvements in the implementation
    of existing regulations prevent the greatest opportunity for
    improving environmental protection,'' meaning that let us work
    with the existing structure as opposed to creating whole new
    programs out there.
        So just to wrap up, the Idaho cobalt project and many other
    mines existing in future are critical to the survival and the
    revival of the U.S. manufacturing sector, which depends on
    mining products as feed stock. Mining and manufacturing produce
    some of the best paid jobs and best tax revenue streams in the
    entire economy.
        Permitting of hard rock mines in the U.S. is already a long
    and costly process particularly when compared to our business
    competitors in the world. So please don't force us to do the
    same thing twice with two different departments and end up
    having to pay reclamation bonds twice over. Thank you very much
    for your time.
        [The prepared statement of Mr. Baird follows:]

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        Mr. Shimkus. Thank you, Mr. Baird. Now I would like to
    recognize Ms. Kinter for 5 minutes.

                     STATEMENT OF MARCIA Y. KINTER

        Ms. Kinter. Thank you. Good afternoon. My name is Marci
    Kinter, and I am the vice president of Government and Business
    Information for the Specialty Graphic Imaging Association, or
    SGIA.
        Thank you for the opportunity to address you this afternoon
    regarding a timely industry concern. Specifically I am here
    today to address a misguided interpretation of the byproducts
    exemption included in the Toxic Substance Control Act's
    inventory update law. This proposed interpretation offered by
    the EPA Office of Chemical Safety and Pollution Prevention will
    impose a significant reporting burden on the struggling U.S.
    manufacturing sector, without providing additional health,
    safety, or environment benefit beyond that already provided
    under existing EPA and OSHA regulations.
        It is vital that you remind EPA of congressional intent to
    exempt most byproducts from the reporting requirements under
    the TSKA inventory update rule or IUR. Your interest in this
    matter is timely as the rule that I am here to discuss is
    currently undergoing interagency review.
        SGIA represents the interests of those facilities that
    produce a wide array of products using either the screen
    printing or digital imaging print platform. Products such as
    all types of signage, the membrane switch on your microwave
    oven, the defrost pattern on your car's rear window to--and we
    are most known for our message on our T-shirts that we provide
    to everyone when you are wearing them. That is the industry
    sector that I represent.
        Currently there are over 25,000 screen and digital printing
    facilities operating in the U.S. And the screen and digital
    print community is comprised of small businesses. The average
    facility size ranges from 50 to 40 employees. As you know, the
    cost of regulatory compliance poses a significantly higher
    burden on the small business community.
        The TSKA inventory update rule requires the reporting of
    extensive data concerning the manufacturing, processing, and
    use of chemical substances. I am not here today to discuss the
    benefits or burdens of the entire TSKA inventory update rule.
    Instead, I would like to focus on a specific aspect, EPA's
    misinterpretation of the byproduct exemption under the proposed
    amendments to the IUR.
        In the proposed rule, EPA's misguided interpretation says
    that waste byproducts generated during the manufacturing of
    items, like these T-shirts, are new chemicals if the
    manufacturer does the right thing by sending these waste
    byproducts by recycling rather than disposing of them. To say
    we were shocked to discover that the proposed TSKA IUR would
    have an actual regulatory impact was surprising as we are
    printers and not chemical manufacturers.
        While we use chemicals, including inks and solvents, we
    certainly do not consider ourselves to be chemical
    manufacturers. At the end of the day, the final product that
    moves out the door is the printed product, such as this T-
    shirt, not a chemical product. Under EPA's interpretation,
    sending our waste byproducts, such as spent solvents and inks
    for recycling, would be considered by EPA to be the
    manufacturing of a new chemical for commercial purposes,
    subjecting us to registration reporting of our waste byproducts
    under TSKA.
        Our companies are already regulated by both OSHA for worker
    exposures as well as U.S. EPA for proper handling and disposal.
    EPA's misguided interpretation will not only affect those
    facilities represented by SGIA. Manufacturers of all sorts will
    now be burdened by reporting their waste byproducts as new
    chemicals.
        Every manufacturing sector that has opted to send their
    waste byproducts out of recycling rather than disposal will be
    saddled with this recording keeping and recording burden. There
    is still time to take action, but we need your help. We believe
    that the interpretation offered by the U.S. EPA regarding the
    reporting of byproducts is not what Congress intended. The
    waste byproducts offered by the U.S. product manufacturing
    community are already regulated by U.S. EPA, and the proposal
    would only increase the regulator burden with no discernable
    environmental benefit.
        Thank you again for the opportunity to appear before you
    today, and I would be happy to answer any questions you might
    have on this critical industry topic.
        [The prepared statement of Ms. Kinter follows:]

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        Mr. Shimkus. Thank you, Ms. Kinter, and before I move to
    Ms. Neu, I was asked by the ranking member, and so without
    objection, I would like to recognize him for a minute to do an
    introduction of the two Democrat-sponsored witness.
        Mr. Green. Thank you, Mr. Chairman. I will be brief. I
    mainly want to thank both Ms. Neu and Mr. Ryan on short notice
    for coming here to provide your expertise on the side of what
    sometimes is good about recycling requirements. So but again,
    thank you all on short notice. I was telling the chairman I
    know how much it costs to fly from Houston to D.C. and
    hopefully you got a better rate than I did. So on short notice
    but welcome.
        Mr. Shimkus. I too want to welcome you also, and now I
    recognize Ms. Neu for 5 minutes.

                         STATEMENT OF WENDY NEU

        Ms. Neu. Good afternoon. My name is Wendy Neu. I am an
    owner and executive vice president of Hugo Neu Corporation. We
    are a diversified U.S.-based company that has owned and managed
    industrial and commercial business assets in excess of $500
    million. As well, we have employed up to 1,100 workers at a
    time in a business that has had export sales in excess of $2
    billion in a single year.
        As an executive of a mid-sized business with hundreds of
    millions of dollars at stake in industrial and commercial
    business assets, it is clear to me that from my industry,
    regulations promulgated and enforced by the EPA have been and
    remain essential to the growth, diversification and
    sustainability of recycling operations, both for the company
    and for its employees.
        Let me provide you with an example of how strong EPA
    regulations would allow Hugo Neu to more successfully compete
    globally. It is a policy approach that would level the playing
    field for American business in a way that creates U.S. jobs.
    Also, it removes the disadvantages my business now suffers from
    in competing with companies that don't meet environmental
    standards and choose to export toxic e-waste to developing
    countries.
        It ought not to go unnoticed that the GAO itself has
    suggested current regulations regarding e-waste are woefully
    narrow in scope. One of the industrial operations we own
    focuses on recycling of used and obsolete post-consumer and
    commercial electronic equipment, which is commonly referred to
    as e-waste. The name of our company which processes this e-
    waste is We Recycle. It is based in Mount Vernon, New York.
    Like communities throughout our Nation, Mount Vernon, with a
    population of approximately 38,000 people is desperate for jobs
    with living wage. I am proud to report that my company does pay
    a living wage.
        The employees who work at our company are focused on
    repairing or otherwise recycling e-waste. The technology we
    have developed allows us to recover high value clean streams of
    commodities. These commodities are then sold to the best
    industrial consumers domestically or are exported to industrial
    consumers around the world.
        But Hugo Neu Corporation could be doing more, recycling
    more and hiring more workers if we did not have to compete
    against the low-road actors in our industry. Unfortunately,
    inadequate and insufficient regulation by the EPA are stifling
    the growth of my environmentally responsible business and
    cutting off a potential for job growth.
        Jobs that could be developed at e-waste recycling
    businesses around the country such as mine are now being
    exported to China, southeast Asia, and countries in Africa,
    precisely because the EPA does not effectively limit the export
    of hazardous electronic waste by unscrupulous collectors in the
    United States.
        Every single country in the OECD, other than the United
    States, limits the export of e-waste to these countries. They
    wisely preserve jobs in their countries and limit the spread of
    toxic waste. If other industrialized countries can do it to
    create an advantage for their businesses and their workers,
    then it seems to me that the U.S. Congress ought to do no less
    for American workers and American business.
        I cannot overstate the reality that to cut EPA funding will
    hurt our business. It is the existence of current EPA
    regulatory guidance, such as that which now discourages the
    dumping of at least some e-waste in landfills that has helped
    our business to grow.
        EPA regulations add economic value to our investment
    because we are a recognized, environmentally responsible
    company adhering to high standards and known to be well
    managed.
        Our business customers have confidence in our ability to
    recycle e-waste responsibly. Of course, as I said earlier, much
    more can and should be done. Indeed, this point was made in a
    September 17, 2008 Government Accountability Office Report
    which said this ``EPA could amend RIKRA regulations to cover
    exports of used electronics where risks exist to human health
    or the environment when reclaimed for reuse or recycling,'' an
    action that, if implemented, could bring U.S. export controls
    more in line with those of other industrialized countries.
        The current limited and, in my view, inadequate approach by
    the EPA needs to be replaced with regulations that will level
    the playing field for responsible recyclers like my company. A
    failure by Congress to do so is a choice, from the perspective
    of my business, to favor a policy that curbs jobs growth,
    stifles business expansion, and tilts the playing field in a
    way that advantages low-road recyclers and costs American jobs.
    Thank you.
        [The prepared statement of Ms. Neu follows:]

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        Mr. Shimkus. Thank you. Now, I would like to recognize the
    Honorable Mr. Ryan from--the attorney from the county in Texas,
    and you are recognized for 5 minutes.

                        STATEMENT OF VINCE RYAN

        Mr. Ryan. Thank you very much.
        Mr. Shimkus. Inspect your microphone for me. There is a
    button at the bottom of it.
        Mr. Ryan. Now it is even greener. Well, that is very
    appropriate, isn't it? Goes from a very light green to a green
    green. And may I say again thank you very much for allowing me
    to appear today and talk about a success story working with the
    EPA.
        I am Vince Ryan, the Harris County attorney. Harris County,
    Texas is the third most populous county in the U.S. and home to
    the Nation's largest petrochemical complex and the port of
    Houston, which is ranked first in the U.S. in foreign, water-
    borne tonnage. With a strong industrial base, Harris County has
    fared better than some of the region of the U.S. in these
    economic hard times. With property taxes declining, which is
    the basic revenue source for local governments in Texas. Our
    local government of Harris County also faces a significant
    budgetary shortfall, yet we understand that providing healthy
    communities in which our residents can work and strive towards
    a better quality of life with cleaner air and water quality
    remain a high priority.
        Let me add, I have been county attorney since January 1 of
    2009, but before that, I was a Houston City council member.
    Before that, I was an assistant county attorney, actually the
    first assistant in that office. So my experience spans almost
    30 years dealing with these issues in Harris County and for
    Harris County. I am here today in my capacity as the elected
    county attorney, but also representing Harris County government
    as spoken through the commissioner's court, which is the
    governing body generally of Harris County government.
        And we are sincerely grateful for the work the EPA and EPA
    region six are doing to end the severe contamination of
    Galveston Bay, San Sell Bay, and waterways leading to both by
    the San Jacinto dioxin waste pits. And we urge the EPA, with
    congressional support, to continue using appropriate and
    forceful measures where necessary to achieve effective
    solutions for this site and quite frankly similar sites
    throughout not just Texas, but the United States. And we urge
    this committee and Congress to support these efforts.
        A little bit of history. Congressmember Green and
    congressmember Ted Poe who I have known since he was an
    assistant district attorney and when he was a district judge in
    Harris County. Both asked the EPA to look into this matter and
    take it under consideration. On March 19, 2008, the San Jacinto
    River waste pits Superfund site was listed on the national
    priorities list. The site with waste ponds and surface
    impoundments built in the 1960s for the disposal of pulp and
    paper mill waste is located in a marsh partially submerged on
    the western bank of the San Jacinto River in Harris County,
    Texas immediately north of Interstate Highway 10 and a bridge
    over the San Jacinto River.
        High dioxin concentrations have been documented at the
    site. Sediment water and fish and crab tissue samples collected
    in the surrounding areas have also been found to have highly
    elevated levels of dioxin. According to the EPA and our own
    verification, exposures to dioxin can cause a number of adverse
    health effects in humans, including cancer, skin disorders,
    severe reproductive and developmental problems, and damage to
    the immune and hormonal systems.
        May I add this bay area is much like the Chesapeake Bay
    here that each and every member and their staffs are familiar
    with. It is surrounded by populated areas, and the day that I
    first visited after taking office this site, Terry O'Rourke, my
    first assistant, who is sitting back of me, and I were with
    some other people. They were working people on a day off with
    their families fishing while the kids were swimming within feet
    of the emanating dioxins from this site that had been used for
    years as a dumping ground in public waters for these types of
    waste within minutes, I might add, even though there were signs
    saying don't swim, signs saying don't fish, people were doing
    it there.
        The EPA identified two responsible parties: International
    Paper Company and McGuiness Industrial Maintenance Corporation,
    a subsidiary of Waste Management. Now, this other side of the
    story we have heard quite a bit today this afternoon. These are
    two major corporate citizens with significant resources, and I
    am sure every member and staff member here, I was--quite
    frankly, when I first got involved with this specific issue, we
    looked at the EPA and saw this snakelike structure of process
    to get to clean up a site that for years had been known by the
    public and these two corporate responsible parties of polluting
    and poisoning people throughout that area.
        I am a native Houstonian, grew up in the area. I have been
    with people fishing all through this area. I never knew of it
    until in 2009, I had taken office, and we were approached with
    this.
        Harris County government has also become very involved. We,
    of course, in Texas have a very divided government at the
    county level, much like the federal level with different
    elected employment officials. But first we all have come
    together to say we have got to help the EPA as they try to
    solve this problem as quickly as possible.
        With unique abilities, Harris County has really been active
    in environmental issues since about 1953 and have accelerated
    over the time. Again understanding that the industry, the
    petrochemical industry is a vital part of our economic
    centrality to really the economy of the United States and to a
    great extent the world based upon the economies that we have.
        Luckily, under even the Superfund's law and working with
    the EPA, soon there was a critical component which required
    work to begin. This again EPA working with these corporate
    responsible parties and to be completed within a short
    timeframe. Here the actual agreed order of consent was signed
    on May 2010, and the design choice was outlined.
        Mr. Shimkus. You are already a minute and a half over time.
    So you can wrap it up.
        Mr. Ryan. Let me just say things are moving, but they are
    moving more slowly than we would like. The EPA has been very
    aggressive on this, and we log them and urge your support on
    areas, especially where clear definition of responsibility is
    apparent.
        [The prepared statement of Mr. Ryan follows:]

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        Mr. Shimkus. I thank you. I now will recognize myself for 5
    minutes for questions. I am going to go pretty quick because
    there is a lot I want to put on the table. So again thank you
    all for coming.
        And first of all, I want to put on the record we are not
    here debating to eliminate the EPA or stop the work when there
    is toxicity and there is damage to human health. That obviously
    is not the proposal. The whole purpose of the hearing is: can
    we be smart and make sure the rules are important enough in
    protecting human health while we are protecting jobs? And this
    new Congress has a focus on job creation.
        So with that, I don't have a piece of Illinois bituminous
    coal. I do have one in my office. That didn't get brought down.
    Mr. Hopkins, why is that important that you burn Illinois
    bituminous coal?
        Mr. Hopkins. Well, I am from an area----
        Mr. Shimkus. Quickly now. Quickly.
        Mr. Hopkins [continuing]. That mines Illinois coal, so we
    serve our members by using their product to create electricity
    for them.
        Mr. Shimkus. The coal found in Illinois is what type of
    coal?
        Mr. Hopkins. It is Illinois bituminous coal.
        Mr. Shimkus. So a co-op is different, and really co-ops
    should be, my friends on the other side, these are agencies
    that you ought to love because you are not-for-profit. Is that
    correct?
        Mr. Hopkins. That is correct.
        Mr. Shimkus. Your board members are highly salaried. Is
    that right?
        Mr. Hopkins. Our board members are poorly paid.
        Mr. Shimkus. Poorly paid, volunteers. Just smally
    compensated. And the owners of the co-op are?
        Mr. Hopkins. The owners of the cooperatives are their
    members that they serve.
        Mr. Shimkus. So every time we do something that may affect
    a regulatory burden, as you said in your testimony, say there
    is a new capital expansion, you cannot carry a large capital
    fund for future expansions. You have to go where?
        Mr. Hopkins. We have to go out and look for a loan for the
    money, and we go to our rate payers, our member owners to pay
    that bill for that loan.
        Mr. Shimkus. OK, and I will just hold this up. The same
    picture. They have seen that at least 6 years. These are
    Illinois coal miners.
        Mr. Hopkins. Illinois coal miners.
        Mr. Shimkus. Mining bituminous coal, and because of many
    companies didn't do--you did it out of complying with the needs
    to create electricity for your members, but also protect coal
    miners' jobs. But you did the capital expense to a scrubber,
    correct?
        Mr. Hopkins. That is correct. We installed a scrubber in
    1978.
        Mr. Shimkus. And the companies that did not do scrubbers,
    guess what they did to these miners. They fired them. OK, that
    is the effect of regulations, and we want to applaud you for
    doing the right thing. Let me--I want to hold us this. You know
    what this is, Mr. Hopkins? Can you see this?
        Mr. Hopkins. Looks like a clean slate or a blank piece of
    paper.
        Mr. Shimkus. No, actually it is----
        Mr. Hopkins. Wall board. I am sorry.
        Mr. Shimkus. And what is in the middle?
        Mr. Hopkins. That would be calcium sulfate or gypsum.
        Mr. Shimkus. And where do we get gypsum from?
        Mr. Hopkins. You need to get it naturally from the ground,
    or you can get it from a FGD on a coal-fired power plant, which
    we produce 95 percent pure gypsum.
        Mr. Shimkus. Would this be part of the coal ash debate?
        Mr. Hopkins. It is.
        Mr. Shimkus. And this is found in everybody's home?
        Mr. Hopkins. Yes, sir.
        Mr. Shimkus. The particle boards for most people or the
    wall boards for most people that have been accused of being
    toxic came from where?
        Mr. Hopkins. Most of them came from overseas.
        Mr. Shimkus. Came from China. So in this debate, if the EPA
    is successful in regulating coal ash as a toxic, will you be
    able to sell gypsum to the person who produces the wall board?
        Mr. Hopkins. We are concerned that the homeowner would not
    be interested in buying any product that would remotely be
    related to hazardous waste.
        Mr. Shimkus. And so then the homebuilders would have to get
    a different product? OK, my time is brief. I want to go to Mr.
    Baird. Duplicate regulation, the administration is trying to
    send signals that they want to be smart on regulatory so they
    don't duplicate. Aren't you in a Catch-22 on duplication of
    regulations?
        Mr. Baird. Yes, sir.
        Mr. Shimkus. The Forest Service and EPA?
        Mr. Baird. Yes, sir.
        Mr. Shimkus. How many jobs would this cobalt mine create?
        Mr. Baird. It will create directly 185 jobs.
        Mr. Shimkus. What is the employment rate of the surrounding
    area?
        Mr. Baird. Well, the two counties that would benefit have
    just over 12 percent for Lemhi and just over 14 percent for
    Shoshone.
        Mr. Shimkus. What would be the tax benefit to the area,
    just the local property tax?
        Mr. Baird. Annual? Well, it is not just the property tax,
    but the number for all taxes----
        Mr. Shimkus. OK, the income tax and the employment.
        Mr. Baird [continuing]. Is $8.8 million per year.
        Mr. Shimkus. And what is cobalt used for?
        Mr. Baird. It is used for many high technology purposes,
    but the biggest single one is for jet engines.
        Mr. Shimkus. Is it also used in what people would define as
    green manufacturing?
        Mr. Baird. It is critical to the Toyota Prius battery. It
    is also critical for wind power.
        Mr. Shimkus. Where do we get cobalt right now?
        Mr. Baird. Right now, the bulk of the super alloy cobalt,
    because there are two different types, comes from one plant in
    Norway.
        Mr. Shimkus. Overseas. We import the product. And I am
    going to take the prerogative of the chair just to make the
    point for Ms. Kinter because you are a printer.
        Ms. Kinter. Yes.
        Mr. Shimkus. You use ink.
        Ms. Kinter. Yes.
        Mr. Shimkus. If you take that ink to a recycler, you fall
    under TASKA and have to file additional paperwork. Is that
    correct?
        Ms. Kinter. Correct, sir.
        Mr. Shimkus. Which is pretty burdensome for a small
    business.
        Ms. Kinter. Yes, sir.
        Mr. Shimkus. OK, I wish I had more time. I don't. I will
    yield 5 minutes to the ranking member from Texas.
        Mr. Green. Thank you, Mr. Chairman. I am going to try to
    move quickly too. Mr. Hopkins, I have been a co-op member, and
    it started under FDR to bring power to very rural areas, and
    that is where so many in Texas get our power because, you know,
    a for-profit company can't make any money out there because it
    is so large, but I appreciate it.
        It sounds like you give a great example. EPA could have
    regulated, and I assume, in response to what happened in
    Tennessee with the coal ash, this is EPA's solution. But they
    could have gone under Title D instead of Title C.
        Mr. Hopkins. That is correct, sir. The option for either is
    in their regulations.
        Mr. Green. Obviously you have a problem, and I would sit
    down with your members of Congress, because I know that is what
    I would do with my industry. And like I said, I believe in co-
    ops. They are really a good program. I sold the property, so I
    am not a member anymore. But it was really a good system where
    you could get it.
        Mr. Baird, again you have almost the same situation. The
    Forest Service leased you the land, and they gave you your
    insurance requirements, or the--and now EPA is adding to your
    requirements.
        Mr. Baird. That is essentially correct, actually by direct
    duplication. They are going to be causing, or at least they are
    looking at right now--this is not out yet, but they are looking
    at putting together hard rock mine financial assurances that
    will apply to all mines, even if you are already regulated and
    bonded with the Forest Service or the BLM.
        Mr. Green. Well, it sounds like this Congress and maybe
    previous Congress should have said, OK, we have all these
    federal agencies. You ought to just speak with one voice, and
    you ought to get your act together before you put it on the
    private sector, and that makes sense. That doesn't mean we
    don't need regulations because I also understand what our
    country, because we know rare earth and precious metals, we
    need to mine them in our own country.
        Mr. Baird. Yes, sir.
        Mr. Green. We shouldn't--Norway is a great place to visit,
    and I would rather import something from Norway than China, but
    so much of the other rare earth we get from China, and we need
    to develop that. So I think there is a solution to that one.
        Ms. Minter--I have to admit--I am sorry, Kinter.
        Ms. Kinter. That is OK.
        Mr. Green. In an earlier life, I managed a printing
    company. We printed a daily newspaper, and I agree that under
    OSHA because our problem was is that we finished cleaning our
    plates we would recycle the solvent. And it ought to be the
    same regulation under EPA that you would do for OSHA. It would
    seem like it would because that solvent though is a hazardous
    chemical, and in my experience from literally the '60s through
    1990, when I left there, we had problems with some of the
    printers actually dumping it out in the street or in the--and
    there was a way that you needed to track it, whether it be
    through OSHA or through EPA.
        Ms. Kinter. Correct, and I will say, sir, that the U.S.
    EPA's hazardous waste regulations do a marvelous job of
    requiring our companies to manifest our hazardous waste as it
    goes out the door. So the waste is definitely being tracked,
    but through our efforts when we are trying to encourage the
    printers to use either low-level hazardous waste or even non-
    hazardous products to reduce worker exposure. These are the
    products that are going to get caught in the Catch-22 and look
    toward duplicative reporting because these are the chemicals
    that are being sent offsite for recycling or even disposed of
    as liquid nonhazardous waste correctly that are now going to be
    considered new chemicals and then subject to even more
    reporting under----
        Mr. Green. And that is where I agree with you. Once it is a
    byproduct of your production.
        Ms. Kinter. Correct.
        Mr. Green. And once you send it to an approved recycler,
    that should take care of it.
        Ms. Kinter. Correct.
        Mr. Green. And so I think there are things that we could
    probably do on at least the three cases that have come up that
    I think is reasonable, and that is why I am glad you are here,
    because that is our job is to make the Federal Government work.
    And granted it is a tough job every day, and it is 24/7, but I
    agree with you.
        Ms. Kinter. Thank you.
        Mr. Green. Let me go to Ms. Neu. You have been--as you
    know, I have been working on legislation now a number of years
    to set federal regulations for electronic waste. How is your
    business affected by the lack of a federal e-waste regulation?
    Because I assume you work in a number of other states.
        Ms. Neu. We actually work in New York and Connecticut at
    the moment but are planning to expand hopefully into the middle
    region of the country. The fact that much, probably close to 80
    percent is what is estimated of e-waste is exported to
    developing countries. So in that regard, we are competing with
    brokers, dealers, who are literally just filling a container up
    with electronic waste, no processing, no segregation of
    materials, and shipping it overseas for recycling. So that is
    one of our challenges.
        Mr. Green. I only have a few seconds left.
        Ms. Neu. Sure.
        Mr. Green. And I think you made the case that we need some
    type of national standard instead of state-by-state----
        Ms. Neu. Exactly.
        Mr. Green [continuing]. Both for industry but also to make
    the recycling efficient.
        Ms. Neu. Right.
        Mr. Green. Mr. Ryan, I hate to call you Mr. Ryan. We have
    known each other for so many years. Vince, one, I appreciate
    what you have done, and I was frustrated, and I think Ted Poe
    and I were both frustrated originally with EPA. But now we are
    seeing some progress, and I don't think it would have happened
    without an elected official and a local community providing a
    lot of the information that you were that actually helped our
    regional EPA office.
        So there is a reason to have EPA, and sometimes we--it
    actually will benefit because coming from a very industrial
    area, every industry along the channel is getting blamed for
    the high dioxin level in the water, but we couldn't find it
    until we found out that, 40 or 50 years ago, that was dumped
    there.
        And we ended up--and so all my other plants were really
    happy because they said we were getting a black eye because of
    what happened before we had an EPA, and so there is good reason
    to have reasonable environmental oversight because it can help
    industry at the same time.
        Mr. Ryan. But I would agree with you that now we have got
    supposed first in the Nation a community awareness program
    going on where we are educating both the industry and the
    public about this particular site, but also the greater issues
    involved. How many other of these sites are--they were known to
    the industry, I might add. It was known it was a pollution site
    but not to the extent that we discovered.
        Mr. Shimkus. The gentleman's time is up. And as Ted Poe
    would say, and that is just the way it is. Well, in this case,
    Congressman Poe would want it changed. Ms. Neu, can you give
    the Committee a credible universally accepted source? You keep
    quoting the 80 percent of export? And if you could--not right
    now, but if you would follow up with the committee so we can
    figure out----
        Ms. Neu. Absolutely.
        Mr. Shimkus [continuing]. And do analysis on that. Now, I
    would like to recognize Mr. Gardner for 5 minutes from
    Colorado.
        Mr. Gardner. Thank you, Mr. Chairman. My district in
    Colorado represents an area that is energy rich, a lot of
    agriculture opportunities, clean energy opportunities. We have
    it all. We have wind power. We have oil and gas development. We
    have solar companies doing great things.
        It is interesting to see, over the past several years,
    farmers on the Eastern Plains who used to have people that
    would come by and collect their used oil and pay them to
    collect their used oil so that they could recycle it. And now
    the farmer themselves are paying to have somebody, the same
    person, now the farmer is paying to have them collect it. So
    they used to receive money for their spent oil. Now they are
    paying to have somebody pick up their spent oil, and in a lot
    of areas, it is because of increasing regulations.
        But as you have heard from so many people on the committee,
    regulations aren't a bad thing if they are done right and done
    with a common sense point of view. And so hearing from many of
    you talk today, a quick question for Ms. Kinter. Your
    testimony, you talk a lot about--you talk about reporting
    requirements in your testimony, and your members are already
    required to file reports for chemicals they have onsite under
    the Toxic Release Inventory. Are they--they are not--are they
    opposed to the reporting requirements?
        Ms. Kinter. No, they are not opposed to reporting
    requirements. What we are opposed to is the duplication of the
    reporting requirements because even under the TRI, they ask us
    to report for recycling.
        Mr. Gardner. So, the information that concerns byproducts
    which is required to report--your members are required to
    report, is that available under other reporting requirements
    under federal law?
        Ms. Kinter. It is already currently available.
        Mr. Gardner. And are you concerned that the proposed IUR's
    compliance timeline--are you concerned about that as it relates
    to your members?
        Ms. Kinter. Certainly. We are looking at a timeline where
    the rule will be going final in May, and the first reporting
    period goes into effect in June of this year for actual
    information from last year. And if you have a group of
    manufacturers that has no idea that they had to even start
    collecting data from last year in order to report for this
    year, you can see that 30 days to put this information in
    place, to really start doing your inventory, and then even to
    look at reporting it over their Internet option, which is the
    only way that they are going to accept reports. EPA will only
    accept reports.
        Mr. Gardner. How much time are your members spending on
    reporting of this kind?
        Ms. Kinter. I would have to hazard a guess that, based on
    all reporting, and I am lumping all the regulatory reporting
    together because they really don't segregate by specific
    statute, you are looking at anywhere from 8 hours a week for a
    small business, and that is including OSHA, and that is TRI
    reporting.
        And I should emphasize it is not just the reporting, but it
    is the record keeping because a lot of these records are
    already kept, or--because they also have to do record keeping
    for their air, for their water, for their waste, for their
    recycling. It is all very, as we know, just media specific. And
    so it is very difficult for them to understand why now I am
    going to tell them that their recycling is no longer recycling.
        It is really a new chemical, and under that, you have to
    gather all this other information. And by the way, if it is a
    new chemical, we may have to consider do you need to develop a
    material safety data sheet to send it offsite because you are
    considered now a chemical in commerce. And this is layer upon
    layer of regulatory burden to a small business whose real goal
    is to produce a T-shirt to put out into the market at the end
    of the day.
        Mr. Gardner. Ms. Neu, are you familiar with some of the e-
    recycling programs the various States have?
        Ms. Neu. The legislation that has been passed?
        Mr. Gardner. Right.
        Ms. Neu. Yes, somewhat.
        Mr. Gardner. Is there a State in your opinion that is
    leading the rest?
        Ms. Neu. I think it is hard to say at this point in time
    because the legislation is relatively new. We just passed a law
    in New York which is not being implemented until June. So we
    really haven't seen all the results come in, but I think there
    is some very good legislation out there in many States that
    will increase the volume of e-waste.
        Mr. Gardner. Thank you. Mr. Chairman, I yield back my time.
        Mr. Shimkus. Gentleman yields back his time. Chair now
    recognizes the gentleman from North Carolina, Mr. Butterfield.
        Mr. Butterfield. Thank you, Mr. Chairman. If the chair
    would agree, I would like to yield to the gentleman from New
    Jersey in the interest of his schedule.
        Mr. Shimkus. Without objection, I would be happy to
    recognize the former chairman of the House subcommittee, which
    I served so honorably under as ranking member.
        Mr. Pallone. And your friend.
        Mr. Shimkus. And my friend.
        Mr. Pallone. Well, thank you, and I want to thank my
    colleague from North Carolina for giving me the time and remind
    the chairman that he and I chaired the recycling caucus. Don't
    you still chair?
        Mr. Shimkus. I still do, yes.
        Mr. Pallone. That is what I thought.
        Mr. Shimkus. Do you?
        Mr. Pallone. Yes, I am the Democrat. You didn't know that?
        Mr. Shimkus. We love caucuses here.
        Mr. Pallone. I am sorry. I just wanted to take an
    opportunity--first of all, I wanted to say hello to Wendy Neu,
    who is a long-time friend, and it was really great to have her
    here. I actually--I was actually in my office listening to your
    testimony while I was doing something else, so I did hear what
    you had to say, Wendy, even though I wasn't here. And I
    apologize.
        But what I wanted to mention is that the purpose of this
    hearing today obviously is to, and I appreciate the chairman
    convening it because we are concentrating on the numerous
    benefits to the economy that stem from some of our environment
    regulation, and I think of the Superfund and the Brownfields
    Program.
        I often say, Mr. Chairman, that Brownfields was the only
    legislation in the--and I don't say it in a bad way, but it was
    the only legislation under George Bush, the only environmental
    legislation or new authorized program that actually he was
    supportive of. And I think--I know I was the Democratic
    sponsor, and one of your predecessors was the Republican
    sponsors of the bill. So it was very bipartisan.
        And Wendy, Ms.-- I am going to call her Wendy, has been
    involved over the years in the Brownfields Program as well as
    what you testified about today. So I just wanted to ask you,
    you know, about your company, which I am familiar with, has
    redeveloped several Brownfield sites in New Jersey as well as
    other States. Can you just tell us the impact of that on the
    economy, jobs, what it meant in terms of reuse of those
    properties? Because I am very proud of Brownfields, and I just
    wanted you to comment on it if you would.
        Ms. Neu. Yes, there have been many opportunities as a
    result of the Brownfields legislation, and because we are a
    company that generally exports commodities, we are often
    located in industrial areas and waterfront areas, which are
    very much Brownfield sites, particularly in New Jersey and New
    York.
        So it has been very helpful to us to have these sites to be
    able to position ourselves in strategic locations, which
    otherwise would not be available land for development. So yes,
    that has been--but I also want to thank both of you for being
    such good friends to the recycling community. You have been
    working with us for a very long time, and we really appreciate
    that.
        Mr. Pallone. Well, thank you. You know, it was Paul
    Gilmore.
        Ms. Neu. Yes.
        Mr. Pallone. It was Paul Gilmore and I that sponsored the
    federal Brownfields going back to the early '90s, I think, and
    President Bush had a signing ceremony in Philadelphia that he
    invited us to, and I couldn't go. I remember specifically. I
    wasn't even able to go.
        But if I could just mention, again it has always been very
    bipartisan. It has always been something that we have been able
    to get support from. I think at the time when we started the
    authorization, our former governor, Republican governor
    Christie Whitman was the governor and then was the EPA
    administrator at the time as well.
        And I have just found in my district, Mr. Chairman, in
    particular, but I know it is all over the State and the country
    that what happens is, these old industrial sites are basically
    redeveloped, and then they become new industries or new
    commercial properties that not only are increased ratables and
    tax dollars into the communities, but create a lot of jobs in
    every case.
        And a lot of what has been done has been assessment also,
    and oftentimes they attract private developers that come in and
    also help with the cleanup, so I just wanted to mention that as
    one of the things that I know that you have been involved with
    too.
        You were talking about the Hugo Neu site, the scrap yard,
    right, before?
        Ms. Neu. Yes, recycling facility in Jersey City, yes.
        Mr. Pallone. The recycling facility, all right. Thank you.
    I yield back.
        Mr. Shimkus. The gentleman yields back his time. The chair
    now recognizes the gentleman from Pennsylvania, Mr. Pitts.
        Mr. Pitts. Thank you, Mr. Chairman. Mr. Hopkins, in your
    testimony, you state that you believe your comments also
    reflect the sentiments of many electric cooperatives. If other
    small business cooperatives face similar threats to closing
    their doors, what would taking that many coal-fired generating
    units offline at once mean for the reliability of electric
    service throughout the Nation?
        Mr. Hopkins. Well, certainly I am not an expert on the grid
    as a whole across the Nation, but taking that many coal-fired
    utilities off the grid could lead to shortages and certainly
    would lead to increased price of electricity. In particular,
    for those co-op coal-fired utilities, they would be forced to
    buy power off the grid at these higher prices.
        Mr. Pitts. Now, if you were able to stay in operation, your
    estimates say it would cost members an additional $11 million
    or 25 percent of your annual fuel budget. With such a
    significant increase to your operating budget, how much of that
    cost would be passed on to the users in the form of rate
    increases?
        Mr. Hopkins. All of that money would be passed along to our
    rate payers and our members.
        Mr. Pitts. Mr. Baird, you quoted the president's recent
    executive order in which he said he is firmly committed to
    eliminating excessive and unjustified burdens on small
    businesses and to ensure that regulations are designed with
    careful consideration of their effects.
        In your view, is the regulation that you testified about
    today an excessive and unjustified burden?
        Mr. Baird. Yes, sir, but to be fair to EPA, it is a program
    that is developing. It is not an actual regulation yet, but,
    yes, it would certainly be excessive and burdensome.
        Mr. Pitts. Do you think it was designed with careful
    consideration as to its effects on you?
        Mr. Baird. I do not, sir.
        Mr. Pitts. Are you hopeful that this administration will
    cancel it?
        Mr. Baird. I am. I am actually very hopeful that once there
    is light placed on this and people understand this is truly
    just a duplication of something that is already addressed on
    federal lands, by the BLM or the Forest Service, I think we
    will get this taken care of but the earlier the better.
        Mr. Pitts. Mr. Hopkins, what is your opinion on that? Are
    you hopeful that----
        Mr. Hopkins. That doesn't apply to our business.
        Mr. Pitts. OK.
        Mr. Hopkins. Federal lands.
        Mr. Pitts. What about Ms. Kinter?
        Ms. Kinter. I am sorry. Could you repeat the question
    again?
        Mr. Pitts. Yes, are you hopeful that the administration,
    this administration, will cancel it?
        Ms. Kinter. Yes, very hopeful, sir.
        Mr. Pitts. OK, Ms. Kinter, you believe that this new
    regulatory burden on your small main street printing business
    will not increase environmental protection. Then why, in your
    opinion, is EPA persisting with it?
        Ms. Kinter. We really don't know. That is a very good
    question. We were very surprised to learn that our recycling
    products that our members are sending out the door for
    legitimate recycling are now considered chemical feedstock for
    new chemicals. And so we are not really quite sure what their
    rationale is behind the adoption of this interpretation of
    byproduct.
        Mr. Pitts. Ms. Neu, you testified that cutting EPA funding
    to do its work will hurt our businesses and our economy more
    generally is the quote. Do you believe it is government's job
    more broadly to create economic winners and losers?
        Ms. Neu. Well, I think by virtue of any action, we are
    creating winners and losers, and I fear that any significant
    cutbacks in EPA will result in very little or no enforcement,
    which is something that really is of great concern to us. That
    is what levels the playing field. It is not necessarily new
    rules, new regulations. It is sometimes just a matter of
    enforcing existing rules and regulations across the board.
        Mr. Pitts. Since your business model is based upon
    investment, does out-of-control spending by the Federal
    Government hurt your access to capital?
        Ms. Neu. Well, I am not sure that I am in a position to
    answer that question, but I must say that I think that access
    to capital is a serious concern today for many businesses. And
    so I would have to agree with you on that.
        Mr. Pitts. Thank you, Mr. Chairman.
        Mr. Shimkus. The gentleman's time has expired. The chair
    now recognizes the gentleman from North Carolina, Mr.
    Butterfield, for 5 minutes.
        Mr. Butterfield. Thank you very much, Mr. Chairman, and
    thank all of the witnesses for your testimony today. Mr.
    Chairman, I have been looking forward to working with you. I
    have joined this committee voluntarily because I think we need
    a better conversation in this country about environmental
    policy. As we talk about deficit reduction and other great
    issues facing our country, we cannot lose sight on this
    important issue.
        To protect the environment, we must have rules. There is no
    question about that. We must have not unreasonable rules, but
    we must have what I call common sense rules. History has
    clearly demonstrated that the American economy has thrived, has
    actually thrived under common sense rules that protect our
    environment.
        Since the establishment of the Clean Air Act in 1970, GDP
    has grown by more than 200 percent. If anything, the major
    economic stumbles have been caused by unsustainable bubbles
    created by unchecked bad players and a lack of clear and
    enforceable boundaries, not by common sense rules that seek to
    preserve our air, water, and quality of life.
        And so I support the president's environmental goals, and I
    support the Environmental Protection Agency. And I look forward
    to a good robust debate as we continue this process.
        Let me address in the time that I have remaining very
    briefly to Mr. Baird. Mr. Baird, I am told by my staff that
    according to EPA, the hard rock mining industry has
    contaminated 3,400 miles of streams and 440,000 acres of land.
    Does that seem to be a true statement?
        Mr. Baird. I honestly have no idea what those numbers are
    based on.
        Mr. Butterfield. Well, the EPA, and I am depending on this
    data, it says that 3,400 miles of streams and 440,000 acres of
    land have been contaminated. Would you agree that contamination
    from hard rock mining should be prevented, or if it----
        Mr. Baird. Yes, sir.
        Mr. Butterfield [continuing]. Occurs, it needs to be
    cleaned up?
        Mr. Baird. Yes, sir, absolutely, but most of what they are
    talking about there are historic practices that have not been
    used in many, many years.
        Mr. Butterfield. I am also told that the Federal Government
    has spent $2.5 billion over the last 10 years cleaning up
    abandoned hard rock mines. Would you agree or disagree?
        Mr. Baird. That is probably true. Again of historic
    operations using practices that are no longer used anymore and
    could not be done without permitting, without bonding, without
    all of the issues.
        Mr. Butterfield. Well, $2.5 billion is a lot of money. Do
    you think it is appropriate for the taxpayers to be on the hook
    to clean up contamination caused by mining?
        Mr. Baird. No, sir.
        Mr. Butterfield. So you think it should be the
    responsibility of the effected industry to do the cleanup?
        Mr. Baird. Of the PRP, of the people who caused it? Yes,
    sir, I do.
        Mr. Butterfield. All right, Mr. Chairman, I yield back.
        Mr. Shimkus. Gentleman yields back. The chair now
    recognizes the gentleman from New Hampshire, Mr. Bass, for 5
    minutes.
        Mr. Bass. Thank you, Mr. Chairman. I want to thank you and
    the ranking member for calling this very interesting panel,
    interesting in that we are not really being presented with
    conflicting stories here. There are solutions available to all
    three of the matters that are brought up by the three witnesses
    who testified as to problems that they have with respect to
    redundancy and regulation, overly burdensome regulation, and
    unnecessary regulation, I guess we would say in the case of the
    fly ash issue.
        And I would hope that the subcommittee could move forward
    with some sort of action with the EPA to correct all three of
    these issues, and there may be a dozen or so more that exist
    that we ought to be looking into.
        I also appreciate Mr. Ryan's testimony about the critical
    nature that EPA--critical role, rather, that EPA has played
    since its inception in the early '70s to protect human lives,
    the reduce the instances of environmentally caused illnesses,
    and to create, in many instances, a reasonable balance between
    unfettered industrial expansion and overregulation. But there
    are instances where it hasn't worked out, and we have seen
    three examples of that today.
        So although I do not have any specific questions for any of
    you, I believe that the testimony is pretty clear that we don't
    need to double regulate hard rock mining on federal lands, that
    fly ash from coal plants is an important recyclable commodity,
    that there ought to be some reasonable review of recycling of
    materials that have already been properly qualified as
    certified, that we need some sort of a debate over a federal
    standard for e-waste, and that an area where there is a heavy
    industrial development, that there needs to be very careful
    monitoring.
        And I guess I would suggest that this has been informative
    and interesting, but it needs to be followed up by some action
    on the part of this subcommittee to correct these problems that
    can be agreed to in a bipartisan manner, and we can get that
    legislation moving. And I want to commend the chairman again
    for having this subcommittee meeting because we should have
    another one next week or two weeks from now, bring in three
    more people that are having issues. And that is how we correct
    these problems before they are uncorrectable.
        So with that, I will yield back to the chair.
        Mr. Shimkus. The gentleman yields back his time, and just
    in response, I think the gentleman from New Hampshire raises a
    great issue. Again the intent of today's hearing was to address
    problems, and really if you are just having a hearing to
    identify good and bad on both sides, and then ways that you can
    address, in essence, duplication or maybe things that are
    designed or stated as hazardous that aren't hazardous and
    trying to get clarification.
        I would encourage my colleagues on both sides of the aisle
    as they go throughout their districts and meet with
    constituencies to raise concerns, and we could very well
    continue on this as we try to craft legislation to address
    these concerns.
        I would now like to recognize----
        Mr. Green. If you would just yield.
        Mr. Shimkus. I yield.
        Mr. Green. And I agree. In fact, that is what we were
    talking here. Maybe our committee on these three cases, and
    frankly we do this kind of work in our offices all the time
    with our constituents. But I think it would be much better if
    it showed--sitting down with EPA and the various agencies,
    saying the Federal Government ought to speak with one voice,
    and don't give us two hoops to jump through when you can do
    one, particularly when we need the power, we need the cobalt.
    And obviously we believe in freedom of speech, we need printed
    material.
        But I think that can then--I am really--the chairman and I
    will work with the members on both sides to see if we can do
    some problem solving.
        Mr. Shimkus. And now I would like to yield to Mr. Harper
    from Mississippi for 5 minutes.
        Mr. Harper. Thank you, Mr. Chairman, and I appreciate
    everyone taking time to be here and shed some light on what has
    become a very difficult issue for us, and that is the balance
    of regulation and how to do this in a way that it still allows
    business to do its job. And I can't think of an industry or
    business in my district that believes that they are under-
    regulated, whether that is on the State or federal level.
        We have a clean coal plant that is being built in east
    Mississippi in my district that will sequester the carbon and
    use that for tertiary recovery in wells. And so, we have some
    things that are going on that I think are very important to
    look at it.
        And, Mr. Hopkins, I understand that in another life you
    were perhaps an environmental regulator at the State level. Is
    that correct?
        Mr. Hopkins. Yes, sir, that is correct. I was a field
    engineer for the Illinois EPA for 6 years, and I was the
    regional manager for the land division of Illinois, yes.
        Mr. Harper. Well, with your expertise in that and what you
    are doing now in your business, what is the solution to the
    coal ash? What do you do? And you are not saying for it to be
    unregulated. What is a common sense approach that will work?
        Mr. Hopkins. Well, sir, I think the congressman from North
    Carolina hit the nail on the head. What we need is reasonable
    regulations. We don't need to go overboard and cause products
    like coal ash to become a hazardous waste when they could be
    recycled beneficially.
        Mr. Harper. Ms. Kinter, I had a question. Why do you think
    that the EPA is reaching the conclusion that you are a chemical
    manufacturer subject to inventory update rule? How did they get
    there?
        Ms. Kinter. I think when they look at the fact that we
    recycle chemicals, and then when you look at what happens with
    the chemicals similar to what we have heard with the coal ash
    where they are actually manufactured into new products, and
    which is the beneficial reuse where you want to encourage your
    industry to actually, rather than dispose of it as a hazardous
    waste, to look for ways to reuse that product.
        Then they look at it as we are gaining a commercial benefit
    somehow from that, but in all my discussions with my members
    about, well, do you gain a commercial benefit from doing this?
    They say no, we have the pleasure of paying for them to take it
    off our hands, and it is made into whatever the recycling
    facility does with it. But we don't receive any monetary
    remuneration for recycling our chemicals. We actually pay
    someone else to take them offsite and to the recycling
    facility.
        Mr. Harper. So what should happen?
        Ms. Kinter. I think what should happen basically is that
    they, U.S. EPA, withdraws its interpretation that product
    manufacturers who happen to recycle are subject to the TASKA
    IUR update reporting. It is as simple as that. I believe the
    information is captured by TRI as well as a lot of the other
    state reporting mechanisms.
        Mr. Harper. You know I would be curious to know your
    members' experience with involved reporting requirements like
    those under Europe's chemical registration and management law
    known as Reach. Has the economic burden forced them to consider
    closing or relocating? And what impact has that really had?
        Ms. Kinter. That is an interesting question. I have started
    to look into that, and I can provide you more information once
    I have a fuller picture. But what we are seeing is that those
    chemical manufacturers over in Europe that are supplying what
    we could consider a specialty chemical are, in fact, having to
    cease production because of the costs associated with the Reach
    registration. It is a very interesting dilemma over there.
        But I would be happy to provide you with more details as
    they become clearer to me.
        Mr. Harper. Thank you, Ms. Kinter. Question that I have on
    the hard rock mines because we get a lot of rare materials that
    are needed for many items from that. Is there a concern or risk
    that we are not going to have access to those in the future?
        Mr. Baird. That is absolutely true. I forget who on the
    Committee brought up the rare earths is a critical matter
    followed only then by super alloy cobalt in terms of making
    sure that we have enough, and it is not in such limited supply
    that the price ends up being cost prohibitive for use in all
    the manufacturing products that we need.
        Mr. Harper. Yield back.
        Mr. Shimkus. The gentleman yields back his time. Before I
    adjourn this hearing, I was struck by an article in ``The Wall
    Street Journal'' today. I have been following this recycled
    cooking oil from places like McDonald's that has been used.
    People use it and they drive cars with it. And they clean it
    up.
        Well, the story at the end of the article, here is a guy
    quoting ``if I go to Costco, I can buy a pallet of vegetable
    oil'' note to Mr. Sobovaro, one of Colorado greaser on the
    legal fight ``explain to me why that it is considered a
    hazardous material if it is touches a chicken wing.''
        So, that is really the issue. Here you have a guy who is
    taking recycled oil to drive a vehicle, and it is just oil, it
    is just cooking oil. And if bought the same amount of oil at
    bulk, it is not a hazardous material, but if he takes it from a
    restaurant, and if he is using it from a restaurant, then it is
    not going into a landfill. I think that is part of the issue of
    jobs, common sense, and bringing back some semblance of, again,
    common sense, which maybe we will move on legislation based
    upon a lot of the hearing here.
        We appreciate your time and your effort, thank you for
    that. And I will say the hearing is adjourned.
        [Whereupon, at 4:26 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]

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