[House Hearing, 112 Congress]
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  CONTINUING OVERSIGHT OF REGULATORY IMPEDIMENTS TO JOB CREATION: JOB 
                   CREATORS STILL BURIED BY RED TAPE

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

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 19, 2012

                               __________

                           Serial No. 112-161

                               __________

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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director














                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 19, 2012....................................     1

                               WITNESSES

Mr. Paul A. Yarossi, President, HNTB Holdings, LTD., On Behalf of 
  The American Road & Transportation Builders Association
    Oral Statement...............................................     8
    Written Statement............................................    10
Mr. Jim Hamby, Chief Executive Officer, Vision Bank
    Oral Statement...............................................    20
    Written Statement............................................    23
Mr. J. Billy Pirkle, Senior Director EHS, Crop Production 
  Services, Inc.
    Oral Statement...............................................    32
    Written Statement............................................    34
Mr. Howard Williams, Vice President & General Manager, 
  Construction Specialties, Inc.
    Oral Statement...............................................    41
    Written Statement............................................    43
Mr. Steve Russell, Vice President, Plastics Division, American 
  Chemistry Council
    Oral Statement...............................................    46
    Written Statement............................................    48
Mr. Barry Rutenberg, Barry Rutenberg & Associates, Inc., On 
  Behalf of The National Association of Home Builders
    Oral Statement...............................................    52
    Written Statement............................................    54

                                APPENDIX

The Role of Job Impact Analyses in Environmental Policy Debates..    95
The Honorable Elijah E. Cummings, a Member of Congress from the 
  State of Maryland, Opening Statement...........................   129
Committee on Oversight and Government Reform, Staff Report.......   131

 
  CONTINUING OVERSIGHT OF REGULATORY IMPEDIMENTS TO JOB CREATION: JOB 
                   CREATORS STILL BURIED BY RED TAPE

                              ----------                              


                        Thursday, July 19, 2012,

                  House of Representatives,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 9:45 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Platts, Jordan, Walberg, 
Lankford, Gosar, Labrador, DesJarlais, Ross, Kelly, Cummings, 
Towns, Maloney, Norton, Kucinich, Tierney, Connolly and Murphy.
    Staff Present: Ali Ahmad, Majority Communications Advisor; 
Robert Borden, Majority General Counsel; Molly Boyl, Majority 
Parliamentarian; Lawrence J. Brady, Majority Staff Director; 
Sharon Casey, Majority Senior Assistant Clerk; Katelyn E. 
Christ, Majority Professional Staff Member; John Cuaderes, 
Majority Deputy Staff Director; Brian Daner, Majority Counsel; 
Adam P. Fromm, Majority Director of Member Services and 
Committee Operations; Linda Good, Majority Chief Clerk; 
Christopher Hixon, Majority Deputy Chief Counsel, Oversight; 
Mark D. Marin, Majority Director of Oversight; Kristina M. 
Moore, Majority Senior Counsel; Kristin L. Nelson, Majority 
Counsel; Sharon Meredith Utz, Majority Professional Staff 
Member; Rebecca Watkins, Majority Press Secretary; Krista Boyd, 
Minority Deputy Director of Legislation/Counsel; Claire 
Coleman, Minority Counsel; Kevin Corbin, Minority Deputy Clerk; 
Ashley Etienne, Minority Director of Communications; Susanne 
Sachsman Grooms, Minority Chief Counsel; Carla Hultberg, 
Minority Chief Clerk; Lucinda Lessley, Minority Policy 
Director; Dave Rapallo, Minority Staff Director; and Ellen 
Zeng, Minority Counsel.
    Chairman Issa. The Committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles: first, Americans have a right to know the money 
Washington takes from them is well spent and, second, Americans 
deserve an efficient, effective government that works for them. 
Our duty on the Oversight and Government Reform Committee is to 
protect these rights. Our solemn responsibility is to hold 
government accountable to taxpayers, because taxpayers have a 
right to know what they get from their government. Our job is 
to work tirelessly in partnership with citizen watchdogs to 
deliver the facts to the American people and bring genuine 
reform to the bureaucracy.
    In Congress, we hear every day from our constituents, 
Americans, their concern for their jobs and the lack of job 
creation. June figures show unemployment has remained unchanged 
at 8.2 percent. That means that 12.7 million Americans are 
unemployed. And far more have quit looking. Almost 42 percent 
have been unemployed for 6 months or more.
    The verdict is in: Keynesian economics, when applied the 
way the President's stimulus plan applied it, clearly will not 
work. Jobs created in the public sector for a year kept a job 
for a job, but did not create lasting employment in America, 
and certainly not in the private sector.
    For those of us who understand small business, they are 
responsible for over half of all job creation. Government can 
create an environment in which job creation is logical, 
desirable, and the goal of every small businessman, or 
government, through its out-of-touch statements and actions, 
can create an uncertainty. That uncertainty, without a doubt, 
will cause small and not so small businesses to do the minimum 
and protect themselves from the downside.
    Today that is what we see in America. Whether intended or 
not, this Administration has created an environment of 
uncertainty. Not just through regulations that are the creation 
of current legislation. Not even the regulations from laws 
passed long ago. But, in fact, regulations coming out of thin 
cloth, coming out of places that no one knows where they came 
from; legislation that was passed generations ago suddenly 
creating new and innovative requirements on business.
    Additionally, there has been a growth in the kind of non-
regulation regulation, often called guidance, or sometimes 
through Executive Order, that can come with no notice, can be 
just as compelling, just as draconian as any new piece of red 
tape coming from a long process with public comment and then, 
lastly, bureaucrats run amok. In this Administration, 
bureaucrats seem to have an open door to simply do what they 
want to do; to say you must do something or to delay a decision 
time and time again. Dates and mandates within the statute are 
often ignored, so when you ask for and you plan on starting 
production on a given date, it simply doesn't happen.
    This happened to Shell Oil in Alaska. It wasn't until 
hearings were scheduled, and virtually on the day, that they 
suddenly got a permit to start something for which they had 
lost at least one full season and countless millions of 
dollars.
    This and other pieces of red tape are part of the 
unintended consequences of an Administration that gives only 
lip service to the word red tape. Only today, only today, and I 
will ask unanimous consent that the article be placed in the 
record. Without objection, so ordered. Today, the White House 
launches a new website in an effort to streamline regulations. 
I recognize this because, in fact, our Committee launched that 
with little fanfare, but the disdain of some in the 
Administration that we would actually go out and actively ask 
trade associations and employers in America to tell us what the 
impediments to job creation were more than two years ago. We 
have more than 1,000 responses from that, and today I have 
instructed my staff to forward at least a sampling of those to 
the Administration to upload it to their website in the hopes 
that what they didn't seem to read for the last two years they 
would read today.
    Forty-four percent of likely voters believe EPA regulations 
are hurting the economy and 53 percent of registered voters say 
federal regulations are one of the major reasons the economy is 
struggling. According to the National Federation of Independent 
Business, regulations and red tape are one of the single most 
important problems to small business.
    As a former small businessman, I know that to be true. Give 
me as few uncertainties and I will be bold in every other way. 
Each uncertainty in a private business causes you to be less 
willing to take other risks that occur every day in putting 
your own capital at risk in new and innovative products or 
programs. Today we will hear from a distinguished panel who 
live that nightmare.
    One of our challenges here on this Committee is to get out 
enough to the field and to get people here that can tell us 
what they deal with every day in the heartland. I am pleased 
that our Committee has held more field hearings to listen to 
more job creators than any of our predecessors since I have 
served in Congress, but it isn't enough. This hearing isn't 
enough. We have to go from this hearing to real regulatory 
relief or the American people will continue to see the hundreds 
of billions of dollars that could be invested in new and 
innovative products, in new services, spent, in fact, on 
lawyers, accountants, and other people complying with 
regulations; and dollars will continue to pile up, not 
invested, but simply waiting for an opportunity and a certain 
environment.
    I would be remiss if I didn't also mention that agencies 
like the National Labor Relations Board, who took it on 
themselves to personally attack one of America's finest 
companies, our largest exporter, simply because they wanted to 
expand to a State that wasn't union friendly to their liking. 
Ultimately, South Carolina did add those 3,000 jobs, and I have 
no doubt whatsoever that the Boeing plant there, in the years 
to come, will be doing just fine.
    I recognize the Ranking Member for his opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman. One of the 
first hearings this Committee held this Congress was a hearing 
much like this one. The title of the hearing was even similar: 
Regulatory Impediments to Job Creation. I said then that an 
effective regulatory review should include several basic 
elements: it should examine both cost and benefits; it should 
base conclusions on solid data; and it should seek input from a 
wide variety of sources.
    Eighteen months have passed, but, unfortunately, not much 
has changed. Today's hearing is the 29th hearing our Committee 
has held during the Congress on the impact of regulations. Yet, 
in every single one of those hearings the Committee's approach 
has been lopsided and unbalanced. The Committee has focused on 
the cost of regulations without considering the benefits. The 
Committee has solicited input only from witnesses who want to 
weaken or repeal regulations, but not those who wish to 
strengthen protections for children, small businesses, the 
economy, and American families.
    In these 29 hearings, the Committee invited 107 witnesses 
to testify in favor of rolling back health, safety, and 
economic protections. We in the Minority were left to bring 
some semblance of balance to those proceedings, but we were 
permitted to invite only 17 witnesses to provide alternative 
perspectives. Again, today you invited five industry 
representatives to discuss their desire to weaken or repeal 
regulations and we were allowed only a single witness to 
represent the other side of this important question.
    In May the Committee sent 187 letters, almost exclusively 
to industry organizations, asking for examples of regulations 
that ``continue to negatively impact job growth.'' These 
letters went to companies like Conoco Phillips and industry 
groups like the Society of Chemical Manufacturers and 
Affiliates, and the American Fuel and Petrochemical 
Manufacturers. In response, these industry groups targeted a 
host of regulations that provide basic health and safety 
protections such as child labor laws, standards for lead in 
children's toys, air and water quality standards, and lead 
paint renovation rules.
    But the Committee sent no letters to organizations 
representing the other side, such as the American Academy of 
Pediatrics or other children's advocacy groups that could 
testify about the benefits of those rules and how children 
could be harmed by weakening them.
    Of course, the Chairman has every right to conduct this 
Committee's activities as he sees fit, but in my opinion the 
Committee loses credibility when its actions are so blatantly 
and explicitly one-sided; and losing that credibility means the 
American public is less likely to take our results seriously.
    In the Committee's letter, the Chairman referred to a 
``regulatory tsunami that does not appear to be slowing down.'' 
If this is a tsunami, then I wonder what a drought looks like. 
OMB data shows that the current Administration has approved 
fewer rules than in either of President Bushes' terms. A report 
published last month by Public Citizen found that 78 percent of 
the rules with statutory deadlines last year were not in fact 
issued by the statutory deadline and that OMB's Office of 
Information and Regulatory Affairs is taking longer to review 
rules than ever before.
    It is this kind of inaccurate rhetoric that drives the 
constant stream of anti-regulatory legislation considered by 
the House this Congress. Next week, the House will consider 
legislation to prevent federal agencies from issuing 
regulations until the unemployment rate is under 6 percent. 
This bill does not make any sense. Why in the world would you 
take a regulation to protect children from toxic chemicals, for 
example, and prevent it from taking effect until the national 
employment rate reaches some arbitrary threshold?
    The problem is that the Republican approach is based on a 
faulty premise: that regulations kill jobs. This myth has been 
widely discredited by economists on both sides of the aisle.
    I ask unanimous consent to insert in the record a report 
issued in April by the Institute for Policy Integrity entitled 
The Regulatory Red Herring: The Role of Job Impact Analysis and 
Environmental Policy Debates.
    Chairman Issa. Without objection, so ordered.
    Mr. Cummings. Thank you, Mr. Chairman.
    This report found that the current rhetoric linking 
regulations to job losses is indeed misleading.
    Mr. Chairman, the time has come for Congress to change 
course and to focus on reality instead of myths and inaccurate 
rhetoric. We need to work together to conduct legitimate 
oversight that is focused on creating jobs and protecting the 
health and safety of American families. We can indeed do both; 
we do not have to choose one or the other.
    With that, I yield back.
    Chairman Issa. I thank the gentleman.
    I now ask unanimous consent that the Committee's report be 
placed in the record. Without objection, so ordered.
    And as a point of personal privilege, I suspect that the 
Ranking Member, in his opening statement, was not objecting to 
any breach of protocol, since one witness at most was, and 
often not one witness, is what was received when we were in the 
Minority. The gentleman was not implying that Mr. Towns, when 
he was in the Majority, treated the Minority any differently, 
is he?
    Mr. Cummings. No, Mr. Chairman. I am looking for the today 
when I become the Chairman and we will make sure that we have 
that balance.
    [Laughter.]
    Chairman Issa. I am looking forward to the day in which a 
chairman in your party somehow does allow more than one 
witness.
    With that, I recognize the subcommittee chairman, Mr. 
Jordan, for his opening statement.
    Mr. Jordan. Thank you, Mr. Chairman.
    Mr. Chairman, I want to thank you for your continued 
leadership, focusing this Committee's efforts on the plight of 
job creators struggling to survive under a mountain of red 
tape. The Subcommittee on Regulatory Affairs has held 10 
separate hearings and listened to job creators from across the 
Country to better understand what is stopping them from putting 
more Americans back to work. We held these hearings because, 
like you, we know that it is not the Federal Government that 
creates jobs. Rather, it is the small business entrepreneur who 
is responsible for over 50 percent of job creation in this 
great Country.
    Most of our constituents are not employed by Fortune 500 
companies; rather, they are employed by the local restaurant, 
manufacturers, or home builders whose CEO is part of the 
community and one of their neighbors. These folks tell me that 
they are not hiring any more workers because of the regulatory 
uncertainty created by this Administration. I have heard from 
folks in the manufacturing industry explain that it is the 
never-ending cascade of EPA regulations that drive up the cost 
of energy, eliminating their competitive advantage over foreign 
manufacturers. I have heard from truck drivers who have had 
every incentive to maximize fuel efficiency and driver safety 
tell me that the DOT and the EPA are putting them out of 
business with their multiple mandates that impose a great cost 
with very little return in benefits.
    While the President may be trying to convince himself that 
the private sector is just fine, constituents in Ohio and 
across the Country know firsthand that this is just not the 
case.
    So, again, I want to thank you for this hearing. And if I 
could, Mr. Chairman, I know the very first hearing this 
Committee held this Congress, January of 2011, we had five 
small business owners from around the Country come in and 
speak. One happened to be from our district, Jack Buschur, 
Buschur Electric; started his company 30 years ago; successful, 
but he was just like the other four on that committee. And it 
was a great hearing, about three hours, but if you remember, 
Mr. Chairman, I think the most compelling question came at the 
end of that hearing, where a colleague of ours who is not here 
today, Mr. Guinta, asked a simple question. He said, to the 
five witnesses who were there that day, he said, gentlemen, I 
just want to know one thing. You all have been in business 25, 
30, 35 years, successful leaders in your community, like many 
of the folks we have with us today. He said, I just want to 
know one thing: If you knew then what you know now, would you 
have started?
    It was, again, a question that cut right to the heart of 
the matter. If you knew back then all the hoops and the hassles 
and the hurdles and obstacles and baloney that government was 
going to make you deal with, would you in fact have been that 
entrepreneur, taken the risk, started your business, taken out 
that loan, worked and struggled like you did to create this 
business, employ people, and become a leader in your community 
and someone who helps a lot of-- would you have done it all 
over again? And if you remember the response, Mr. Chairman, 
every single one of those witnesses said I don't think I would 
have done it. And if that is not a sad indictment on the 
greatest Country in the world that we are making it that 
difficult for entrepreneurs to start a business and create jobs 
and help their community and help our Country, I don't know 
what is.
    So, again, I want to thank you for your efforts and the 
efforts of this Committee in focusing on this issue of red tape 
and the regulatory burden that faces so many of our job 
creators and small business owners out there; it is entirely 
appropriate.
    With that, I would yield back.
    Chairman Issa. Would the gentleman yield?
    Mr. Jordan. I would be happy to yield.
    Chairman Issa. Just one question. Do you remember, in these 
over 100 witnesses, them being interested in eliminating safety 
or somehow rolling back the health and protection in any of 
their complaints on regulations even once?
    Mr. Jordan. Not even once, Mr. Chairman. In fact, as you 
well know and as I am sure our witnesses will testify to today, 
employers are focused on safety because they understand the 
value that their employees bring to their business, and the 
value and quality that they add to their product or to their 
service. So they get that simple fact. It is unfortunate that 
some in government don't understand that basic phenomenon.
    Mr. DesJarlais. Would the gentleman yield?
    Mr. Jordan. I would be happy to yield to the gentleman from 
Tennessee.
    Mr. DesJarlais. Because I like simple math, there was an 
observation made about the fairness of the folks that were pro-
regulation, anti-regulation in terms of witnesses. I think we 
had 170 or so witnesses that were here that complained about 
regulations and 17 who were in favor of regulations. In my job 
creators tour around Tennessee's Fourth, I went to about 40 
businesses and I was sitting there going through my head, and 
these were businesses that had unions and otherwise. Only four 
did not complain about regulations. From my simple math, that 
is 10 percent, so I think maybe the proportion of witnesses in 
this case happened to work out fine.
    I yield back.
    Mr. Jordan. I thank the gentleman for his point and yield 
back to the Chairman.
    Chairman Issa. I thank the Chairman.
    Does anyone else seek recognition?
    [No response.]
    Chairman Issa. With that, we will now introduce our 
esteemed panel.
    We would like to welcome Mr. Paul Yarossi. He is President 
of HNTB Holdings, Ltd. in New York, New York City. He has been 
testifying on behalf of the American Road & Transportation 
Builders Association. I think that was one of the groups that 
we asked if there were impediments to job creation.
    Mr. Jim Hamby is Chief Executive Officer of Vision Bank in 
Ada, Oklahoma, a place I was fairly near not too long ago, like 
this past weekend, meeting with job creators.
    Mr. Billy Pirkle is Senior Director of Environmental Health 
and Safety of Crop Production Services, Inc. in Loveland, 
Colorado. He is testifying on behalf of the Agricultural 
Retailers Association.
    Mr. Howard Williams is Vice President & General Manager of 
Construction Specialties, Inc. in Muncy, Pennsylvania.
    Mr. Steve Russell is Vice President of Plastics Division of 
the American Chemistry Council here in Washington, DC, one of 
the organizations we often go to for facts and figures on 
industry.
    And Mr. Barry Rutenberg is the owner of Barry Rutenberg & 
Associates, Inc. in Gainesville, Florida. He is testifying on 
behalf of the National Association of Home Builders.
    Pursuant to our rules, I would ask you all to rise, raise 
your right hand to be sworn.
    Do you solemnly swear or affirm the testimony you are about 
to give will be the truth, the whole truth?
    [Witnesses respond in the affirmative.]
    Chairman Issa. Let the record reflect that all witnesses 
answered in the affirmative.
    Please be seated.
    Now, thanks to C-SPAN, every time I say this I get to 
smile, because you all know how this works. There are lights in 
front of you. It will be a countdown clock. They are going to 
go green, yellow, red. When they are green, say anything you 
want to say, whether it is included in your prepared statement 
or not. When it turns yellow, the way Mr. Lankford probably 
would describe it, hurry up and don't get caught underneath the 
red light in the intersection. When it gets to red, if you 
haven't finished up, please go to that last page where you say, 
in summation, and make it short. It is a large panel today. We 
are very happy to have all of you, but we would like to get to 
the questions on both sides of the aisle.
    Mr. Yarossi.

                      WITNESSES STATEMENTS

                  STATEMENT OF PAUL A. YAROSSI

    Mr. Yarossi. Thank you. Chairman Issa, Ranking Member 
Cummings, members of the Subcommittee, I am Paul Yarossi, 
President of HNTB Holdings. I am here today representing the 
American Road & Transportation Builders Association.
    ARTBA, now in its 110th year of service, represents all 
sorts of U.S. transportation construction industry, all the 
sectors which sustain more than 2.2 million American jobs. 
ARTBA recognizes federal regulations play a vital role in the 
fabric of our society. In the transportation area they provide 
a sense of predictability and ensure a balance between meeting 
our Nation's mobility needs and protecting the public interest.
    We commend Congress that acted in a bipartisan manner to 
improve the transportation project delivery process by cutting 
red tape in the recently enacted transportation bill. However, 
in other areas federal regulations hinder, rather than help, 
achieve the balance that we need.
    One of these instances is the recently enacted federal 
rules governing the hours of service for commercial truck 
drivers may work. These rules are designated to ensure long-
haul drivers do not drive to the point of exhaustion by 
spending too much time on the road.
    Transportation construction industry drivers are not long-
haul operators who consistently spend many consecutive hours on 
the road on a given day. Generally, transportation construction 
industry commercial drivers do not operate in the manner that 
leads to concerns over fatigue.
    At the same time, transportation project owners, the 
driving public, and commercial shippers expect contractors to 
build projects in a timely and efficient manner, with minimum 
disruption to traffic.
    In addition, the industry is also using innovative 
techniques to replace a bridge or a roadway, working 
attentively, in a concentrated period of time, like over a 
single weekend. This situation is a prime example of applying a 
one size fits all regulatory approach. While windows of 10 to 
11 hours of drive time and 13 to 16 hours of on-duty time may 
seem adequate in other cases, in fact those limitations can 
disrupt the efficient deployment of professionals and resources 
on construction job sites without a demonstrated increase in 
safety. Further increased costs would otherwise support capital 
and personal expansions.
    Another area of concern for our group is EPA's draft 
guidance that would greatly expand the reach of the Clean Water 
Act. In this undertaking, EPA is proposing a significant 
expansion of the federal jurisdiction over wetlands, and doing 
so in a manner that bypasses the opportunity for my industry 
and other affected interests to provide input.
    Chief among our substantive concerns with this proposal is 
roadside ditches, which would be subject to federal wetlands 
requirement. This is both unnecessary and potentially damaging 
to the transportation construction industry. Virtually every 
road or roadway improvement project in the U.S. has a ditch 
associated with it. As such, the EPA plan could provide that 
agency with an approval role in most, if not all, future 
roadway improvements.
    Not withstanding the lack of viability of such a plan, it 
would inject major uncertainty in delays and the delivery of 
transportation benefits. If members of my industry are stuck in 
a continuing labyrinth of bureaucratic wetland approvals, they 
will be unable to make decisions about allocating existing 
personnel, let alone future hires.
    Chairman Mica and other leaders of the Transportation 
Infrastructure Committee have introduced a measure which would 
stop the EPA proposal. We urge members of this Committee to 
support that legislation.
    Finally, EPA has indicated evaluating whether or not to 
regulate coal ash as a hazardous substance. Coal ash is 
commonly used in material such as concrete, which is a key 
component of transportation infrastructure improvements. 
Further, EPA has routinely noted the benefits of recycled coal 
ash in the transportation arena and its safety. Reversing 
course and designating coal ash as a hazardous material would 
remove the valuable tool of my industry's efforts to create 
efficient U.S. transportation network at the lowest possible 
cost. Our study has found that that will cost our industry more 
than $104 billion over the next 20 years.
    Mr. Chairman, Ranking Member Cummings, ARTBA deeply 
appreciates this opportunity to present testimony to you on 
this important issue. I look forward to answering any questions 
you have.
    [Prepared statement of Mr. Yarossi follows:]




    Chairman Issa. Thank you.
    Mr. Hamby.

                     STATEMENT OF JIM HAMBY

    Mr. Hamby. Chairman Issa, Ranking Member Cummings, 
Congressman Lankford, and members of the Committee, I want to 
thank you for allowing me to speak today. I am the President 
and Chief Executive Officer of Vision Bank in Ada, Oklahoma, 
and it is a community bank. I want to thank you for inviting me 
to testify, and I want to thank this Committee for its 
willingness to address the issues of how regulatory red tape is 
impending job creation.
    Like most community banks, Vision Bank is deeply involved 
in every aspect of the communities we serve. We have been 
helping our small business partners grow now for over 100 
years. These include businesses, farmers, ranchers, oil and gas 
companies, Indian tribes, doctors, hospitals, and anything that 
walks in the door. We have helped create thousands of jobs and 
we sponsor a lot of things, some of which are right now we are 
doing a financial literacy program for students in 13 high 
schools in our district, where we are providing financial 
literacy training for each one of those and helping them meet 
curriculum requirements so they will be productive citizens.
    We also donated over $420,000 last year to assist local 
charity groups and organizations, and this equals about 8 
percent of our income.
    These accomplishments are the essence of what a community 
bank does, and I am very proud to be a community banker.
    Vision Bank is also a small business, and we can't lose 
sight of that. We are locally owned and we employ more than 200 
people, all of which have great futures. We provide health 
care, life insurance, health benefits, retirement plans, and we 
are really a family. Most small businesses are.
    Community banks like mine pride themselves on being quick 
to adapt. But at some point it gets very hard to handle it. We 
understand the need for regulations to protect the safety and 
soundness of our bank. We understand regulations that protect 
the consumer. And we are in favor of those regulations. We are 
the highest regulated industry in the world and we need a lot 
of regulations. We agree that our customers should be 
protected. To do this, regulations are a large part of our 
business.
    But we are now facing 10 times the number of rules than we 
did just 10 years ago. Fifty of these rules were new in the two 
years before Dodd-Frank, and with Dodd-Frank there are now 
4,000 pages of proposed rules and more than 4,000 pages of 
final rules.
    The new laws and regulations might be manageable by 
themselves, but we are dying a death of a thousand paper cuts. 
Wave after wave of new rules, one on top of another, are 
overwhelming many small community banks and making it harder 
for us to do what we do best, which is meet the credit needs of 
our local communities.
    I am going to give you a few staggering statistics.
    At Vision Bank our compliance costs have increased $1.4 
million in the last three years, and those are hard numbers. 
That represents a 29 percent decrease in our profits. That 
means 29 percent less taxes; that means 29 percent less in 
capital formation, which helps support lending.
    This includes more than the cost of hiring and training of 
new compliance personnel and systems; it also includes 
something that you cannot quantify, and that is the lost 
opportunities that result when money that would normally be 
devoted to making loans to consumers and small businesses is, 
instead, spent on outside consultants, lawyers and so forth; 
not to mention the fact that it causes us to take our eye off 
the ball and spend most of our time trying to comply with new 
regulations, instead of getting out and meeting the customer.
    The more resources we devote to regulatory compliance, the 
fewer resources we have to meet our communities. Every dollar 
spent on regulatory compliance means as many as $10 less 
available for creditworthy borrowers. Less credit means 
businesses can't grow and create jobs. As a result, local 
economies suffer and the national economy suffers as well.
    One example of unnecessary compliance burden, and it is a 
small example, is the outdated requirement that ATMs include 
potential fee notices on the screen and on the machine itself. 
Originally, you couldn't put it on the screen, so the law said 
to put it on the machine. Well, the main contribution of this 
rule today is to encourage frivolous lawsuits and to force 
banks to spend valuable time and resources scurrying around, 
updating all of our ATMs to make sure that fee notification 
stickers haven't been removed by vandals, even though the 
screen discloses what the fees are and asks you if you want to 
proceed or not.
    I am grateful that the House, last week, passed legislation 
to remove this duplicative requirement. It is a minor one.
    Another example is the requirement that banks renotify 
customers of their privacy policies every year if a bank hasn't 
made any changes to their policies. I can understand if you are 
changing policies with them, but when you are not, it is a 
large expense and it takes a lot of money.
    Under Dodd-Frank, the proposed qualified mortgage 
exemption, on the ability to repay rules are unnecessary, 
complicated, and it is potential to make it much more costly 
for banks, especially small banks, to make loans. The QM 
exception alone could force banks to deny loans to creditworthy 
customers.
    Likewise, provisions on municipal advisers is problematic 
in itself and would limit the important services the banks 
provide in municipalities.
    As regulatory burdens like these increase, banks like mine 
find it hard to meet the needs of our local communities. I am 
really worried about the health of small banks. The average 
bank is $165 million. the average community bank. Our profits 
of $550 million were decreased by 30 percent. I would imagine, 
likewise, theirs were decreased 40 to 50 percent.
    If this trend continues, they are also companies; they have 
shareholders. My fear is that shareholders look at the 
profitability of it and the future of it, and they tell them it 
is time to sell. And when a small town loses its community bank 
with its local ownership, that is a tragedy.
    Thank you for the opportunity to testify, and I would be 
happy to answer any questions.
    [Prepared statement of Mr. Hamby follows:]




    
    Chairman Issa. Thank you.
    Mr. Pirkle.

                  STATEMENT OF J. BILLY PIRKLE

    Mr. Pirkle. Thank you, Chairman Issa and Ranking Member 
Cummings. I appreciate the opportunity to appear before this 
Committee. My name is Billy Pirkle. I am the Senior Director of 
EHS, or Environmental Health and Safety, for Crop Production 
Services. We are an ag retailer. I am also the Chairman of the 
Ag Retail Association. I am here to represent the ag retailer. 
The ag retailer is a small business with employees of around 5 
to 15 in a rural agricultural area.
    ARA and ag retailers are concerned with regulatory actions 
by EPA. We believe that some of these cause unnecessary 
financial burden to our industry. I will give a specific 
incident that occurred to us and to some ag retailers as well. 
But at the same time I understand the comments about being 
resistant to regulatory change. But I think our industry has 
shown that we love to participate, and actually applaud the 
efforts of EPA as we participated and supported the pesticide 
container containment rule that was passed in 2006.
    One of the things that we are actually experiencing some 
change in interpretation of the rule that is creating a burden 
is under EPCRA. In EPCRA, which was passed in 1986 and then 
clarified in 1987, EPA correctly articulated an interpretation 
of the intent of a fertilizer retail exemption. It says because 
the general public is familiar with the application of 
agricultural chemicals as part of common farm, nursery, 
livestock production activities and the retail sale of 
fertilizers, there is no community need for reporting of the 
presence of these products.
    In the reference that was placed there into the regulation 
under Section 311(e)(5), retailers are exempted from reporting 
requirements for fertilizers only. Therefore, substances sold 
as fertilizers would not need to be reported. However, the 
agricultural chemicals such as pesticides would need to be 
reported.
    In the last few years, EPA has actually visited ag 
retailers and cited them for not reporting fertilizers. There 
were actions taken, fines and penalties paid, to resolve these 
issues, where the ag retailer felt like they did report their 
Tier 2s, they did report the products as directed by EPA, and 
they were in compliance with those. However, due to some 
guidance or reinterpretation by EPA, these ag retailers lost 
the exemption and it cost them monies.
    One of the things that is also occurring that EPA is 
actually under the SIC codes for the ag retailer, they 
typically fall under 5191, which is a farm wholesale suppliers. 
Many EPA agencies are now recognizing or actually identifying 
or reclassifying ag retailers as manufacturers under the SIC 
code of 2875. If EPA continues to reclassify ag retailers as 
manufacturers, it does place additional regulatory burden upon 
the ag retailers in the amount of somewhere around $30,000 per 
location, with an annual update burden of around $6,000.
    The second point I would like to highlight is the Clean 
Water Act pesticide permits. EPA has developed a general 
national pollution discharge elimination permit in response to 
6th Circuit Appeals Court's decision in the National Cotton 
Council v. EPA. In this case, there actually was clarification 
direction given to ag retailers and farmers that they would 
need to get an NPDES permit to apply pesticides to waters of 
the States.
    These products would already have been permitted or a label 
approved by EPA through FIFRA, and we see this to be duplicate 
of effort and also probably differencing of opinion from the 
FIFRA group and the clean water group. This difference of 
opinions or actual approvals will cause confusion to the ag 
community and unnecessary burden as well.
    In summary, we applaud your efforts here to hear our 
testimonies, and we ask you to continue to hold these regular 
oversight meetings, and we ask Congress to look into 
legislative action to prevent EPA to continually give guidance, 
rather than regulations, and we look forward to answering any 
questions you might have.
    [Prepared statement of Mr. Pirkle follows:]




    Chairman Issa. Thank you, and we will.
    Mr. Williams.

                  STATEMENT OF HOWARD WILLIAMS

    Mr. Williams. Thank you, Chairman Issa, Ranking Member 
Cummings, staff, representatives.
    Nearly as the 20th century, cyanide used as a fumigant was 
as likely to kill the neighbors as it was the vermin, and in 
the secret history of lead we knew, our surgeon general knew, 
and the manufacturers of the gasoline or additive knew, in 
1922, that gasoline would leave behind particulates of lead 
which in small doses would affect human health. And, yet, the 
federal bureau studying that aspect with interest chose to 
leave the word lead out and chose not to have any press 
releases because the word lead would cause excitement in the 
newspaper headlines.
    Ultimately, the word ethyl was used, and again, because 
leaving lead out would leave the public somewhat blind as to 
what was in the gasoline additive. At that time, national 
gasoline sales were 8 billion gallons per year and the additive 
ethyl, if it gleaned 20 percent market share, would bring in 
approximately $40 million per year in net profit. Lead was 
outlawed as an additive here in 1986.
    As we leave 1922 and move forward 90 years, in an advancing 
society, we see the Chicago Tribune's article, four-part series 
on flame retardants, and again we see scarey headlines and the 
need for regulation. My understanding from a news release 
yesterday is that the EPA is investigating those allegations. 
And as I repeat a comment that I made in my February testimony, 
a thriving free market economy self-regulates demand, supply, 
and price, but it does not uniformly or equitably regulate 
health, safety, or environmental responsibility. The invisible 
hand of the free market does not naturally yield to the good of 
the whole, but regulation is a necessary balance, and spirited 
debate such as this is its necessary counterbalance.
    Fred Knapp, in writing for The Hill, cites several 
independent survey findings showing that a weak economy is more 
rooted in customer demand and concerns over that economy, and 
that a 2011 U.S. Chamber of Commerce survey showed that only 8 
percent of the respondents said too much regulation was a 
cause.
    I manage a manufacturing division in central Pennsylvania. 
We make architectural building products. Our business, as all 
businesses, are, of course, subject to regulations. But all of 
our investment decisions, and our company dates back to 1948; 
we are privately held, all of our decisions for investment are 
based on market research, solid market research, and it is on 
that that we make our decisions, not on whether some aspect of 
that work is regulated or not regulated.
    In this economy, we are blessed to have added jobs, in 
spite of the doubtful economy that we have been in. Since 2008, 
July of 2008, we have added 94 jobs to our facility and we have 
invested in a startup that has now 29 other jobs, millions of 
dollars invested in that startup.
    Investments in workplace safety, trading commerce, and 
environmental aspects have resulted in our success within the 
marketplace. Our customer demand is what raises our bar, much 
higher than federal or State regulation may raise it, because 
we are subject to the direction of the customer.
    In his 1961 farewell address, President Eisenhower said: 
Another factor in maintaining balance involves the element of 
time. As we peer into society's future, we, you and I, and our 
government, must avoid the impulse to live only for today, 
plundering for our own ease and convenience the precious 
resources of tomorrow. We cannot mortgage the material assets 
of our grandchildren without asking the loss also of their 
political and spiritual heritage. We want democracy to survive 
for all generations to come, not to become the insolvent 
phantom of tomorrow.
    Regulation is a necessary balance because the invisible 
hand of the free market does not naturally, or even willingly, 
yield to the good of the whole. Business growth and jobs 
creation will continue to be rooted in the basics of market 
demand. Business growth by deregulation has the potential to 
externalize costs that were otherwise covered at the point of 
origin.
    Business gains from deregulation will not likely be shared 
with the America of tomorrow, and we will have done what 
President Eisenhower warned us against; we will have mortgaged 
the material assets of our grandchildren because we chose to 
live for today, plundering for our own ease and convenience the 
precious resources of tomorrow.
    Thank you.
    [Prepared statement of Mr. Williams follows:]




    Chairman Issa. Thank you. I am sure he wasn't talking about 
a trillion dollar deficit.
    Mr. Russell.

                   STATEMENT OF STEVE RUSSELL

    Mr. Russell. Chairman Issa, Ranking Member Cummings, and 
members of the Committee, good morning. My name is Steve 
Russell. I am the Vice President of the Plastics Division at 
the American Chemistry Council. ACC thanks you for the 
opportunity to participate in today's hearing.
    ACC represents companies in the business of chemistry. Our 
members apply the science of chemistry to make innovative 
products that make people's lives healthier, better, and safer. 
The business of chemistry is a $760 billion enterprise and a 
key element of our Nation's economy. Our industry is one of the 
Nation's largest exporters, accounting for $0.10 out of every 
$1 of U.S. exports; and we are among the largest investors in 
research and development.
    In response to the Committee's request for information, ACC 
pointed out five areas where regulatory burdens are impeding 
our Nation's economy and hurting jobs in our industry. Those 
areas included chemical assessment processes and certain air 
regulations.
    I am here today to highlight another example: the General 
Services Administration's decision to designate a single green 
building rating system, LEED, as the standard for federal 
agencies and departments. LEED is one of several private sector 
green building systems which are helping to drive reductions in 
the energy use in both public and private sectors. To be 
absolutely clear, ACC supports this broad objective. We have 
supported laws and regulations to increase energy efficiency. 
We and several of our members are members of LEED. In fact, our 
own building here in Washington is LEED certified silver.
    Our concern is that the GSA has given its stamp of approval 
to only LEED, and LEED is currently being revised in a way that 
would jeopardize U.S. jobs and our industry's competitiveness, 
not to mention building performance and efficiency. This 
matters to ACC, and it should matter to the Committee, because 
many of the construction materials that our industry 
manufactures are essential the insulation, roofing, windows, 
and sealants that allow buildings to achieve the kind of 
efficiency and savings critical to reducing environmental 
impacts and ensuring a sustainable future.
    GSA's selection of LEED is damaging for several reasons, 
but I would like to highlight three.
    First, by picking a single rating system, GSA effectively 
creates a monopoly for federal buildings. Building rating 
systems function as standards, and there are various standards 
available to the Federal Government. When the entire Federal 
Government picks just one private standard, then competition, 
the engine that drives lower prices, greater efficiency, higher 
quality products, is removed. Once a standard captures the 
entire market, there is no competition and no incentive to keep 
the price of implementing that standard down. So, in the end, 
the taxpayer pays more.
    In this case, GSA continues to award a monopoly to LEED, 
and the Committee should urge GSA to, instead, construct 
performance-based criteria for selecting green building rating 
systems, and then accept any private standard that meets the 
designated performance criteria.
    Second, regulations and standards adopted by agencies 
should be data-driven and science-based. Federal agencies can't 
avoid obligations to make regulatory decisions based on science 
by simply adopting a private standard that is not based on 
science. Yet, this is unfortunately what GSA is doing. Recently 
proposed LEED updates are so weakly grounded in science that 
the system would give a credit for avoiding proven U.S. made 
products. These products include energy-efficient foam 
insulation and cool vinyl roofing, such as the recently 
installed vinyl roof at the DOE headquarters.
    This credit would also restrict the ability of the Federal 
Government to use shatter-resistant, polycarbonite glass, such 
as this example here, which is essential in protecting 
buildings such as courthouses, government institutions, and 
prisons from bullets. As you can see, a bullet has been shot 
into and remains impregnated in the unshattered glass.
    Because credits such as these are not adequately justified 
by science or data, GSA should not recommend LEED for federal 
buildings if these and similar credits remain.
    Finally, GSA is wrongly giving preference to building 
standards that could hurt the competitiveness of small American 
businesses. For example, under a proposed chemical avoidance 
credit in the current version, small U.S. manufacturers of 
building materials will have to certify that their materials 
comply with complex European regulations so that the builders 
can obtain a credit, imposing additional costs for U.S. small 
manufacturers if they wish to compete.
    A different proposed credit requires materials to be 
screened against a cumbersome tool developed by an 
environmental NGO, which adds unnecessary costs not easily 
borne by small domestic manufacturers. Of course, if compliance 
with the European requirement is a function of the LEED 
standard, U.S. manufacturers could decide that the compliance 
cost is too high and exit that market.
    ACC sincerely appreciates the Committee's interest in 
working on regulations that hinder job and economic growth, and 
we urge you to ask GSA to recommend, instead, science-based, 
performance-based green building rating systems that reduce 
costs to businesses and save jobs.
    Thank you. Thank you to the Committee, and we look forward 
to answering your questions.
    [Prepared statement of Mr. Russell follows:]




    Chairman Issa. Thank you.
    Mr. Rutenberg.

                  STATEMENT OF BARRY RUTENBERG

    Mr. Rutenberg. Chairman Issa, Ranking Member Cummings, 
members of the Committee, thank you for the opportunity to 
testify. My name is Barry Rutenberg, a home builder from 
Gainesville, Florida and NAHB's 2012 chairman of the board. On 
behalf of the 140,000 members of the National Association of 
Home Builders, I want to thank you for holding this hearing on 
streamlining federal regulations.
    NAHB members have daily interaction with scores of federal 
regulations and know firsthand how the regulatory process 
impacts small businesses. I want to highlight a few of those 
regulations now, but my written testimony contains much more 
detail on these and other burdensome regulations. I might add 
that recent studies show that the cost of regulations is 25 
percent or more of the cost of a home.
    This year, regulators may make decisions that will 
determine the future shape of the secondary mortgage market. 
Dodd-Frank authorized significant changes to mortgage lending 
practices, including the ability to repay standards, which is 
part of what is called a qualified mortgage, as well as risk 
retention and qualified residential mortgage provisions which 
will determine the future shape of the secondary mortgage 
market.
    NAHB supports regulatory changes aimed at more rational 
lending practices, greater lender accountability, and improved 
borrower safeguards. It is critical that mortgage lending 
reforms are implemented in a manner that causes minimum 
disruption. A housing finance system that provides adequate and 
reliable credit to homebuyers at reasonable interest rates 
through all business conditions is critical to our Nation's 
economic health. Overly restrictive rules will prevent willing, 
creditworthy borrowers from entering the housing market, even 
as owning a home remains an essential part of the American 
dream.
    Another key factor in housing's current depressed state has 
been confusion over the issue of acquisition, development, and 
construction lending. Our members are frequently caught in an 
argument between banks and regulators, who take turns pointing 
fingers at each other for the lack of lending to the 
construction sector. We seek answers as to whether the federal 
banking regulators are pressuring the banks or if institutions 
are overhauling and downsizing portfolios independent of 
regulator and examiner pressure.
    A significant source of frustration in the remodeling 
sector is EPA's lead renovation, repair, and painting rule. 
Renovation work that disturbs more than 6 square feet in a pre-
1978 home is required to follow new safe lead work practices, 
supervised and performed by an EPA-certified renovator. These 
requirements do not apply if tests show an older home does not 
have lead paint present; however, currently available test kits 
have false positive rates as high as 78 percent. While EPA has 
indicated that it is committed to having more accurate kits, 
consumers are paying additional costs for unnecessary work 
practices.
    EPA also removed an opt-out provision for households living 
in pre-1978 homes that do not have young children or pregnant 
women. EPA estimated removing the opt-out would increase costs 
to small businesses by $507 million.
    Legitimate small contractors will be forced to pass on 
these costs, increasing the likelihood that homeowners will 
turn to uncertified contractors who may not follow the rules.
    NAHB is also concerned about the Department of Justice's 
interpretation of the Lacey Act, which seeks to prevent trade 
in protected plants and animals. Under the Lacey Act, Congress 
sought to exempt honest business owners and, instead, provided 
the U.S. Government more targeted tools to go after intentional 
violators. The U.S. Department of Justice, however, has 
virtually eliminated this important defense for honest business 
owners through a broad misinterpretation of the law. By deeming 
Lacey violation wood and plant products contraband, innocent 
companies are left without legal standing to challenge the 
government taking in court. Coupled with the requirement that 
the U.S. Government enforcing an almost limitless set of 
foreign laws, builders, and ultimately consumers, are left at 
great risk.
    Therefore, NAHB supports Representative Cooper's bill, H.R. 
3210, the Retailers and Entertainers Lacey Implementation and 
Enforcement Fairness Act, or RELIEF Act, which recognizes the 
need to hold harmless those who knowingly are found to be in 
possession of products that run afoul of the Lacey Act. NAHB is 
encouraged that the targeted common sense reforms included in 
this legislation will address these concerns and we thank 
Majority Leader Cantor for including this legislation in his 
schedule.
    Again, we appreciate the opportunity to testify today and 
look forward to your questions. Thank you.
    [Prepared statement of Mr. Rutenberg follows:]




    Chairman Issa. Thank you.
    I recognize myself for a round of questioning.
    If we could have the first slide. I just want to make some 
point to make this at least understood to be as bipartisan an 
effort as it is.
    [Slide.]
    Chairman Issa. The source is the Office of Management and 
Budget, Obama Administration. It says there is some evidence 
that domestic environmental regulation has led to some U.S.-
based multinationals to invest in other countries, especially 
in the domain of manufacturing. And it goes on.
    [Slide.]
    Chairman Issa. Next slide, also from the Office of 
Management and Budget says regulations can also impose 
significant cost on business, dampening economic competition 
and capital investment.
    [Slide.]
    Chairman Issa. The next slide says, again, Office of 
Management and Budget, Obama Administration, regulations can 
place undue burdens on companies, consumers, and workers, and 
may cause growth and overall productivity to slow.
    If I had more than five minutes, I would go on for another 
five-plus minutes with examples where this Administration has 
said repeatedly that, in fact, regulations can cost jobs. But 
let me just I will look at the LEED certification example for a 
moment. I own a LEED certified silver building; it doesn't have 
GSA in it, it has a tenant in it that invested several million 
dollars in redoing the building to meet that standard, and it 
is a wonderful building. But let me ask a couple of quick 
questions.
    The GSA doesn't pay for TIs. My understanding is they want 
everything included in the rent, including the utilities, isn't 
that correct?
    Mr. Russell. Yes, Congressman.
    Chairman Issa. So when the GSA puts a mandate on taking 
half a building, a quarter of a building, or an entire 
building, aren't they in fact, in a sense, driving up the cost 
to the taxpayer of capital improvements that may be for as few 
as, well, in the case of the census that was in my building for 
less than a year, they can in fact be in there for just one 
year, isn't that true?
    Mr. Russell. That is correct.
    Chairman Issa. So let's go through this. The GSA only has 
one basic way they like to contract for leased facilities, 
which is they like to have an all-in strategy. They are telling 
you to upgrade the utilities, upgrade all of these items, when 
in fact there may be a partial tenant and only in there for a 
short period of time; there may be no cost benefit. But even if 
there was a cost benefit, isn't it true that since they are not 
paying the utilities, they are in fact already encouraging the 
building owner to make the changes that are in their best 
interest to drive down the cost of those utilities?
    Mr. Russell. That is absolutely correct.
    Chairman Issa. So they are just not protecting the 
taxpayer, once again.
    Mr. Russell. Well, as many benefits as energy efficient, 
high performing buildings provide, the question of how the 
Federal Government goes about mandating the use of a particular 
system to get there removes the competition, artificially 
inflating the cost of having that green building meet higher 
performance standards.
    Chairman Issa. I guess what we need is maybe a conference 
to bring all the GSA people together to discuss how they could 
do this better. I think they had one recently; I am not sure if 
they have another one planned right now.
    Mr. Connolly. Would the Chairman yield on that, Mr. 
Chairman, for a friendly observation?
    Chairman Issa. Of course.
    Mr. Connolly. I would welcome such a suggestion, because 
there is another aspect of this, and that is GSA practices. 
When a long-term lease is expired, it exerts the right to stay, 
nonetheless, until it finds a new location, and that has 
enormous impact on the owner of a building in terms of 
financing costs because it is caught in limbo, and it can 
actually put a company out of business, depending on how many 
buildings they own. So some of the practices being deployed 
right now by GSA are, to me, very injurious to business 
interest.
    I thank the Chair for yielding.
    Chairman Issa. Thank you. And the gentleman knows, because 
he has probably more GSA contracted space than probably any 
other member of Congress.
    Mr. Russell, I am going to stay on this subject and let 
others go to other subjects. When we look at GSA, both this 
Committee and other committees of jurisdiction, if GSA came in 
and said we would like you to meet LEED standards and other 
standards, we would like you to embrace these, but we want you 
to do it in a transparent, cost-effective way, I am assuming 
that your members would be thrilled to run an analysis of 
energy savings, cost, capital improvements, and so on, so that 
it would be transparent as to whether, in that one-year lease, 
it made sense to upgrade or the best value for the taxpayer for 
a short or part of a building lease might be less, something 
that currently, I understand, is not in the bidding process.
    Mr. Russell. That is correct, Chairman. If I may.
    Chairman Issa. Of course.
    Mr. Russell. Our members manufacture the kinds of products 
that allow buildings to achieve their highest performance. 
Innovation is at the core of our industry, and the innovative 
potential of the chemistry industry to deliver the kinds of 
tools that we need to increasingly improve is at risk because 
of GSA's continued selection of only one system, rather than 
setting high bars and letting different systems meet that 
standard. We would, of course, be in favor of having GSA select 
performance-based criteria and then encouraging competition on 
how to reach them, which would, in turn, increase transparency 
among the various systems and the various materials.
    Chairman Issa. Speaking of transparency, that piece of what 
we often call bulletproof glass that you held up, my 
understanding is that is what the President stands behind in 
order to be protected, something either identical or 
substantially similar.
    Mr. Russell. That is correct.
    Chairman Issa. Well, I am certainly hopeful that GSA 
understands that we all, when appropriate, want to have that 
kind of protection, and if it doesn't meet somebody's 
environmental questions, I would still save life savings comes 
in all forms.
    With that, I recognize the Ranking Member for his round of 
questions.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    First of all, I want to thank all of you for being here, 
and I appreciate everything that you have said.
    Mr. Hamby, I understand what you are talking about. And 
with regard to the banks and our community banks, we see the 
results of regulations and I have seen it; I know exactly what 
you are talking about. What we have to keep in mind, too, is I 
am sitting here and I am thinking about how important balance 
is in everything that we do. When everything gets out of 
balance, you have a problem. And the sad part about it is, and 
I can't think of a better word than some crooks did some very 
unfortunate things and got us into having to even come up with 
a Dodd-Frank. So I think probably what happened, in an effort 
to prevent it from happening again, we found ourselves in this 
situation. So I can appreciate everything you said.
    I can also appreciate what you said, Mr. Williams and Mr. 
Rutenberg, because as you were talking, Mr. Rutenberg, I could 
not help but feel a little bit emotional, because when you talk 
about lead paint, I think about all the children that I grew up 
with, many of whom inhaled lead paint and many of whom their 
development was retarded or arrested, and they never grew up to 
be what God meant for them to be. Some of them are sitting in 
prisons right now; some of them were, of course, put in special 
ed, never to escape and their lives were stolen from them, 
their futures were stolen from them. And to be very frank with 
you, I mourn for them every day; and it is still going on.
    But, again, I go back to what I said to Mr. Hamby: it is a 
thing of balance and it is a thing of practicality, and the 
quotes that the Chairman just put up there, this Administration 
has recognized that there are problems and this Administration 
has done probably more than any other administration trying to 
address those issues. President Obama has had a balanced 
approach towards regulations; he focused on identifying 
regulations that are unnecessarily burdensome to business and 
even issued several Executive Orders directing agencies to 
modify or repeal any existing regulations that are 
unnecessarily burdensome. The President has also finalized 
several key regulations that are critical to curb dangerous 
business practices or reduce harmful pollutants and toxins in 
our environment. The benefit of these rules far outweigh the 
costs and their implementation is critical to the health and 
safety of Americans.
    Yes, Mr. Rutenberg. I want you to be brief because I have 
something else I want to say.
    Mr. Rutenberg. I will be brief. NAHB has policy on record 
in support of protection against lead. My spouse has spent 20-
something years in special education as a speech language 
pathologist. I understand it. Our problem is with the 
implementation and execution. The rules were promulgated based 
upon the assumption that there would be a phase 2 test kit 
available in August of 2010; it is still not available. That is 
the one that is giving us false readings.
    Mr. Cummings. Mr. Rutenberg, I want you to be clear. I am 
not going against you. I think that we have a test kit that is 
inaccurate. We need to deal with that.
    Mr. Rutenberg. Yes, sir.
    Mr. Cummings. And I am 100 percent with you on that.
    Mr. Rutenberg. And we are with you on that.
    Mr. Cummings. The problem is that, at the same time, 
though, I have kids that I want to protect, and I have folks 
who, again, may never grow up to do what they were intended to 
do when they came upon this earth.
    But let me just tell you another little thing. Another 
reason why, whenever we have these hearings, I always think 
about when I was a kid in high school. I worked at Bethlehem 
Steel during the summer. When you would go to Bethlehem Steel, 
Mr. Williams, if you had been there for about, when you were 
there, and I didn't think of this because you were just having 
fun, you were making a few dollars, you were getting a check 
for the first time. I didn't think about it then, but now I 
look back at it. When you were there for about 30 minutes, if 
you blew your nose, black or red mucous came out, in 30 
minutes. There was no requirement that I know of, to have a 
mask over your face. I mean, this is just from walking around 
the grounds.
    And then I think about all the people who have died, who I 
know have died of lung cancer. Now, these guys were making a 
lot of money, but they died early. So I think when we talk 
about regulations, first of all, I want to make sure that we 
are fair to this President; that he has done what he can to try 
to address this problem. As I said in my opening statement, it 
showed down the process of approving all these regulations and 
acknowledged that there is a problem. But at the same time I 
just want to point out that there is also this benefit to 
regulations. I think that is what you were trying to say, Mr. 
Williams.
    I had 50 million questions. My time has run out. But I just 
wanted to say that. Thank you, Mr. Chairman.
    Mr. Walberg. [Presiding.] I thank the gentleman.
    I recognize myself for five minutes of questioning.
    Thank you to the panel for being here. So many questions 
could be asked, with so little time.
    Mr. Yarossi, EPA has issued a proposed rule to reclassify 
coal ash, as you have indicated, as a hazardous waste. How much 
will this reclassification increase cost for the transportation 
sector alone?
    Mr. Yarossi. ARTBA study has indicated it will cost $104 
billion, about $5.4 billion a year over the next 20 years. Just 
to put that in context, the bill that was just passed reduced 
funding for highways by $2 billion a year from what it was at 
the 2009 levels. If you add that on to it, then we have a 
significant reduction in our ability to improve our 
transportation systems.
    Mr. Walberg. To build roads.
    Mr. Yarossi. Yes.
    Mr. Walberg. How does the transportation sector use coal 
ash? Describe it for us.
    Mr. Yarossi. It is used in many ways, but primarily coal 
ash is used as a material in cement.
    Mr. Walberg. Does it perform any specific function as a 
specific material that is used? Does it replace something else?
    Mr. Yarossi. Oh, yes, sure. Absolutely. The EPA, and I am 
going to look at my statistics here, estimated that using coal 
ash at the levels we are using now results in annual greenhouse 
gas reductions in concrete between 12.5 and 25 million tons. 
But it is actually helping in the reduction of greenhouse 
gases. It also helps make concrete more durable and stronger, 
so we get a longer life out of our product.
    Mr. Walberg. And it is a waste product that is being used 
in a very useful, important function.
    Mr. Yarossi. Yes.
    Mr. Walberg. And the cost factor savings as well. How will 
the transportation sector deal with increased costs if this 
proposed rule goes through?
    Mr. Yarossi. That again is going to fall back onto the 
owners, and that would be varied widely, but I would have to 
imagine there will be less projects out there. The cost of 
building anything will go up and the amount of money, until we 
see some new revenue coming into the transportation system, the 
answer, I think, is easy: there will be less projects going on.
    Mr. Walberg. So less jobs?
    Mr. Yarossi. Less jobs.
    Mr. Walberg. Less economic opportunity and future as well.
    Mr. Yarossi. Right.
    Mr. Walberg. The rule, as I understand it, will not only 
increase our utility costs, utility costs as a result of 
disposing of this byproduct of coal, but it has an adverse 
impact, as well, on commercial value of coal ash. Mr. Yarossi 
and Mr. Rutenberg, if I could ask you how much coal ash do your 
industries use?
    Mr. Yarossi. I don't have that figure with me.
    Mr. Walberg. A lot of it?
    Mr. Yarossi. A lot. Oh, yes I do. In 2008 I have a figure. 
Again, I am going back to my facts here,12.5 million tons of 
coal ash was used in the production of concrete.
    Mr. Walberg. Okay. A significant amount.
    Mr. Yarossi. A lot.
    Mr. Walberg. That would have to be disposed of some other 
way.
    Mr. Yarossi. Exactly. Yes, sir.
    Mr. Walberg. Mr. Rutenberg.
    Mr. Rutenberg. I do not have the number, but I will tell 
you that it is used extensively and that it varies by region 
and by specific Ready Mix plant and how they do their concrete 
mix. So it varies, but we use a lot of it.
    Mr. Walberg. On drywall, for instance, how would the 
construction continue for that, maintain construction? How 
would the cost be affected without coal ash?
    Mr. Rutenberg. We are using the byproducts from scrubbers 
on coal plants to be, we call it synthetics drywall. That is my 
personal way, it may not be accurate; and it takes the place of 
mined gypsum. So it has a double benefit: we no longer have to 
mine as much, we have a byproduct that we don't have to dispose 
of it, and in some plants they will have cogeneration that will 
actually locate the drywall plant with the coal power plant so 
they can use the steam as a byproduct to run the drywall plant.
    Mr. Walberg. Let me ask a further question on coal ash. Mr. 
Yarossi, can you talk about how EPA studied the issue of 
whether coal ash should be regulated as a hazardous waste in 
the past and the conclusion that they reached?
    Mr. Yarossi. I do know that on four separate occasions EPA 
has studied coal ash and determined that it didn't warrant 
regulation as a hazardous waste: 1988, 1993, 1999----
    Mr. Walberg. That it didn't warrant regulation as hazardous 
waste?
    Mr. Yarossi. It did not warrant regulation as a hazardous 
waste.
    Mr. Walberg. Has anything changed to merit the EPA's 
change?
    Mr. Yarossi. To my knowledge, there is no change in any 
scientific information that would warrant change.
    Mr. Walberg. Thank you. My time has expired.
    I recognize Mr. Kucinich.
    Oh, excuse me, Mr. Tierney.
    Mr. Tierney. Thank you, Mr. Chairman.
    Thank all of you for your testimony.
    You know, I don't object to having a hearing on any one of 
these areas here; I think we all understand that there is a 
tension, natural tension between a consumer and a producer, 
between a person working in the job and the boss and all of 
that, around safety concerns or whatever. So we ought to have 
these hearings to make sure whatever rules are out there are 
fair, they are being enforced fairly, they make sense. So any 
one of these subjects would be a pretty good hearing in and of 
themselves.
    What I sort of do object to, Mr. Chairman, is that we have 
a spray of six people in six different industries. Everybody 
gets about five minutes to sort of delve down a little bit and 
you don't get any counter-arguments because we have about a 
five to one ratio here perspective. What I think it would be 
healthier, to take any one of these subjects and bring on a 
much more even balance of people so we get the full array of 
opinion here and perspective, and see whether or not there is 
something wrong with a given rule on that.
    I don't think anybody here thinks that we should have 
unfair, I was in business for over 20 years and represented a 
lot of businesses, spent a lot of my life arguing about rules 
and regulations on that. Yet, I think there should be rules and 
regulations, and I would bet that everybody on this panel 
thinks that there ought to be some standards. Three national 
business organizations took a poll recently. The top problem 
with the economy right now, in their perspective, anyway, isn't 
rules and regulations; those are things that constantly 
aggravate people and they have to deal with it. But their 
problem is a lack of demand. If I go out in my community and 
say what is wrong, they will say, I don't have any customers. 
People are out of work; they don't have the money to spend; 
they don't have any customers.
    Seventy-eight percent of small business people think that 
government standards are important to level the playing field 
between their business and big business. Eighty-six percent 
they are a necessary part of a modern economy. Eighty-four 
percent say they support food safety standards. You talk to any 
group of people out in my neighborhood, you talk to mothers and 
fathers around the playground and everything like that, they 
are worried about the kind of food that is being imported and 
not checked. They are worried about toys coming in and not 
being checked. Those are legitimate standards on that. They are 
worried about clean air and clean water.
    I grew up in Salem. We used to have the North River run 
right down the center of Salem. It was purple and blue and 
green and noxious. We lived over half a mile away. We couldn't 
sit on our deck. I think it was a good idea to get some 
standards to clean that up. Now Salem is a vibrant community 
and you don't smell any of that stuff going down. People are 
boating and enjoying the water.
    So the issue, I think, here is not that we shouldn't have 
hearings on that to make sure the rules and regulations are 
effective; it is this notion of putting it under an umbrella 
that regulations are killing our economy, they are killing our 
job creators. That is total nonsense and I don't think there is 
an iota of evidence that we have either heard today or that 
exists out there for this larger notion. We have sat in here, 
in this Congress, on that theory and talked about mercury 
emissions from power plants as somehow being job killers.
    We are talking about a 1990 bipartisan amendment to 
legislation of the Clean Air Act. The bipartisan legislation 
ordered the EPA to set standards. Seventeen States adopted it 
on their own. There are 772 million pounds of airborne toxics 
out there. I would think that none of these witnesses want to 
be sucking it in at 2.5 pounds per person on that basis. Twenty 
years it took for the EPA to get to dealing with that issue, 
and even when it gets passed, it hasn't passed yet, it is going 
to take four more years for people to get ready to implement 
it. Thirty-one thousand construction jobs will be created, 
9,000 continuing jobs in the utility industry. Yet we are 
arguing, benefits are 25 times the costs of that in terms of 
health and 160,000 lives will be saved. What are we arguing 
about in terms of that? We have hearings on that instead of the 
things that these gentlemen bring to the table.
    We limit toxic emissions from a variety of cement on that, 
as if the cement thing is going to pack up and go to China if 
it doesn't get its way on this basis. But those are chemical 
compounds that do contribute to smog and pollution, and for 
every $1 we put in on enforcing that rule to clean those up, we 
get about $19 back in a public health benefit.
    We are talking about the import of illegally harvested 
endangered wood for guitars. This is what we spend our time on, 
not on the building industry, which has some serious concerns 
on that; not whether LEED is the good example or whether we 
have other standards that should be brought in and why; not on 
the banking industry, what is happening about community banks 
versus people on Wall Street that basically brought this 
Country and almost the international community to their knees. 
That is not what we are talking about. We are talking about 
guitars, which, incidentally, made $1 billion under this so-
called onerous restriction of not letting them bring in 
illegal, imported wood.
    We had a hearing here on invasive foreign snakes. Now, 
there is something really slowing down the community. The 
evidence was one person in Utah who said in 2010 he had to lay 
off four of his seven employees. In 2008, rather. Of course, 
2008 was the height of the recession, and the rule he was 
complaining about didn't get put in until 2010. But this we had 
a hearing on.
    So it is not the fact that we shouldn't have these 
hearings; this is what this Committee should be doing, and all 
of these are legitimate concerns. We can come down on one side 
or the other, but we ought to have a full hearing on those that 
we think are important enough to impact the economy so that it 
takes Congress's attention; not the nit-picking stuff that are 
left to lawyers and experts that are going to go in front of 
the rules agencies and argue whether or not it should be 
amended or changed one way or another, but the ones that make 
substantial public policy that really do make a difference, and 
then have a full hearing on all of that, with enough 
perspective in there that we can all get a reasonable decision 
made as to what is good and what is bad.
    Really, I think the problem with the Majority here is when 
they acknowledge that that is not really the problem, that the 
problem is a lack of demand and a lack of customers, then they 
are going to have to put some attention on the American Jobs 
Act and get people back to work in excess of 1.9 million people 
back to work in a very short, relative order on that, and that 
is their problem. So they have to look for something else to 
rail about and have to entitle hearings like this with a broad 
notion that it is job killers and job creators, and that stuff. 
Let's do our job. Let's have a hearing on each of these things 
that are important in their own respective and are industries 
that maybe do impact the economy, not bring in a show of six 
people, give them barely any time to make their case or have 
anybody to rebut it so that they can get deep into the weeds, 
and we can do our job in that way.
    With that, I yield back.
    Mr. Walberg. I thank the gentleman. His time has expired. A 
good history lesson, but we will have opportunities for plenty 
of hearings, I am sure, and building the economy.
    I now recognize the gentleman from Oklahoma, Mr. Lankford.
    Mr. Lankford. Thank you, Mr. Chairman.
    This conversation about red tape is really a big deal. I 
don't think anyone on this dais or on this panel would disagree 
that there is an appropriate role for the Federal Government 
and for State and local governments in setting boundaries and 
regulations, but there has been a shift, it seems. The 
increased use of guidance documents, rather than actually doing 
formal rulemaking so that a guidance hangs out there and 
doesn't go through all the comment period to make changes; the 
major rules are now supplemented there, and we have more major 
rules with $100 million affect on the Country than we have had 
before. The congressional intent is not being able to be 
evaluated; that is why bills like UMRA that this Committee 
dealt with last year, the Unfunded Mandate Reform Act, is such 
a big deal.
    Let me get a chance to bounce off a few questions off a few 
of you in the time that I have here.
    Mr. Hamby, I want to ask you a little bit about Dodd-Frank. 
There was a lot of conversation about Dodd-Frank, it doesn't 
apply to community banks, that this applies to the big banks. 
So when Dodd-Frank comes down, does it have any effect on you 
as a community bank?
    Mr. Hamby. Oh, it absolutely does. We were just talking 
about the qualified mortgage that the gentleman, Mr. Rutenberg, 
was talking about. That is going to be dramatic for us. If this 
is not monitored and this part of the bill is not watched very 
closely, we could come out with a dinosaur, basically, that we 
can't manage. It can be extremely complex; it can take us out 
of the business. I understand why it was written; I understand 
why it was designed. It is all with good intentions. But when 
you go down and you look at the small community, where the 
average mortgage is $30,000 to $50,000, the cost is the same to 
make that mortgage as it is a $500,000 mortgage.
    Mr. Lankford. Okay, we have a $50,000 mortgage with a 
tremendous cost burden now that has been added to it. Give me 
just a thought here on a home loan application, going through 
the process of that. Has there been a change in the past couple 
years in the home loan process, the length of time it takes, 
the difficulty of making the loan?
    Mr. Hamby. Oh, sure. Five years ago I was closing mortgage 
loans in 10 to 15 days and probably having documents about an 
inch thick. Now it takes me 40 to 45 days and the documents are 
about three inches thick. I don't know anyone that reads all 
the documents because they really can't. They used to read 
them, but they are hugely burdensome to the consumer.
    We want to do what is right. We want to make sure they are 
protected. We want to make sure they understand the terms and 
the conditions. I am a big consumer advocate on that. But the 
way we have it done, we are killing a lot of trees, we are 
hiring a lot of regulators, I am hiring a lot of lawyers, and I 
don't think the people are any better protected.
    Mr. Lankford. What effect does this have on a smaller bank? 
You are a community bank as well, but let's take a bank of $500 
million or less, or $50 million or less.
    Mr. Hamby. Sure. Let's take a little back out in the rural 
area of the Country that is a $50 million bank. With all the 
hoops they have to go through to make the mortgage loan and to 
make sure they are doing it right and they are in compliance 
with Dodd-Frank, if the qualified mortgage rule gets enacted 
improperly, it will very well take them out of the mortgage 
lending market. And they are the only person that makes a loan 
to people in small rural communities; there isn't any big Wells 
Fargo or anyone like that to do it out there, it is simply too 
small.
    So they do it. There aren't good appraisals. When you get 
an appraisal, you have to have comp values, at least three in 
the last six months. Well, if you are in a small town and the 
average home price is $50,000 and you have a $100,000 home, you 
are not going to find three property values in six months, so 
you are not going to meet Freddie Mac-Fannie Mae guidelines. So 
the bank is going to make the loan; it is probably going to be 
adjustable every five years; it is not going to be going out to 
the secondary market where you can get the 2.85 percent 
interest. And then part of the rule is to watch what is called 
the high priced mortgage. It will fall in that category and 
that will further take away from the community bank's ability 
to serve that customer who wants to finance his home or build 
his home. It is a real issue for community banks.
    Mr. Lankford. So you are saying in community banks in rural 
America, this solution that was put out there really is a 
solution for urban areas that deal with larger banks, but for 
the community banks and the smaller areas, all those burdens 
are coming down on them.
    Mr. Hamby. Absolutely. A lot of them are, and it can be 
very devastating. It is the rule of unintended consequences.
    Mr. Lankford. How many staff did you have to hire or how 
many dollars did you have to spend last year dealing with just 
compliance?
    Mr. Hamby. Just compliance last year? I can't tell you the 
total dollar I spent on just compliance, but, as I said, it 
increased in the last three years by $1.4 million.
    Mr. Lankford. So just the increase. Because, as you 
mentioned before, banks are some of the most regulated industry 
in America.
    Mr. Hamby. That is right.
    Mr. Lankford. Lots of regulations already. But in addition 
to the regulations that have been there for a long time, you 
had an additional $1.4 million in cost?
    Mr. Hamby. An additional $1.4 million of cost. Right now 
regulatory compliance is my third largest expense item. The 
first is interest expense; the second one is human resources 
expense; and then the third one, which used to be way down the 
line, is now regulatory compliance expense.
    Mr. Lankford. One quick question.
    Mr. Hamby. Yes, sir.
    Mr. Lankford. The Volker Rule and several other rules that 
are not supposed to apply to community banks, do you have to 
prove that it doesn't apply to you, or is it just automatic, if 
you are a certain size it doesn't apply to you?
    Mr. Hamby. Oh, you have to prove it doesn't apply to you.
    Mr. Lankford. So how long does it take to prove that this 
rule doesn't apply to you?
    Mr. Hamby. Well, I don't know yet, but I am sure I am going 
to get the privilege of finding out.
    Mr. Lankford. It is a long process, though.
    Mr. Hamby. It is a long process, yes. The community advisor 
rule, let's talk about that for one second while we are on 
that. Community advisor rule says if you give advice to 
counties or municipalities, you need to have a registered 
advisor. We are going to have a registered advisor, we 
understand that, but the definition in the regulation that has 
come down now is anyone that talks to them about it. The teller 
who says you may want to look at a CD has to be a registered 
advisor; anyone that does it.
    The same thing right now, you have to register all mortgage 
originators. Well, that is fine, we have five in our bank that 
originate mortgages. But when it came down through regulation, 
it is anyone that in any way possible manner talks about the 
rate on a mortgage. I am registered and so are every one of my 
officers. Every one of my secretaries, anyone that touches a 
loan, my administration clerks. I have registered about 28 or 
30 people, paid fees, fingerprinted, keep up with it, as 
mortgage originators even though they don't have the slightest 
thing to do with mortgage origination.
    Mr. Lankford. Thank you for that.
    I yield back.
    Mr. Walberg. I thank the gentleman. His time has expired.
    We now recognize the gentlelady from D.C., Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    I have a question for Mr. Williams, but I taken by Mr. 
Russell's testimony and I would like to ask him a question 
first, because it has always seemed to me that one way to 
eliminate the public notion that businesses are always for 
regulations and for the general good, until the first 
regulation appears, is for the industry to set up its own 
standard and invite the government to use it . So I was taken 
by your testimony about the LEED standard. You say in your 
testimony that it is one of several private sector green 
building systems that help drive reductions in energy use in 
public and private sector buildings. So you do understand that 
as a landlord and as a lessor or lessee, that the Federal 
Government has an interest in driving down the costs.
    Now, let's go to LEED. I take it that LEED was a pioneer in 
this green technology. Is that why we always hear LEED used?
    Mr. Russell. Yes, Congressman. LEED is one, but there were 
others that have developed alongside.
    Ms. Norton. Yes, but LEED was probably, whoever gets there 
first probably gets an advantage, and I can understand your 
concern. But understand what interests me is that GSA didn't go 
and figure out its own regulations; it looked to see what was 
best practices. And who did it turn to? It turned to private 
industry. So it chose LEED. And you want them to choose a 
number of different standards, and you say that the LEED 
standard is being revised in a way that could jeopardize U.S. 
jobs.
    Has GSA said it approves of the revisions and will continue 
with the LEED standards with revisions being made?
    Mr. Russell. Congresswoman, thank you for the question. 
That is precisely the point. The GSA has undertaken, as it is 
required to do, a review of green building rating systems and 
has compared several of them side-by-side. In fact, in many 
cases GSA's review, their own review, found that another 
building standard was preferable in certain of the criteria.
    Ms. Norton. So what did it do in that case?
    Mr. Russell. Well, the review is ongoing and is not 
complete yet, but GSA, until today, has recommended for federal 
buildings under the scope of its recommendation they use 
exclusively LEED.
    Ms. Norton. All right, so the review is ongoing. We had 
LEED, which was the first, and it did something that it seems 
to me we like to see done more often, and now you are saying 
they are reviewing a number of standards and they haven't said 
they won't use a number. Now that a lot of people have 
understood that it is good business to be green, we now have 
lots of companies, that is the American way, saying we can have 
standards as well, and our standards are just as good and our 
standards are particularly befitting American industry.
    GSA hasn't said it won't use these standards. It is 
reviewing those standards now that there are more actors in 
this area.
    Well, you don't contradict that.
    Mr. Russell. I am sorry, I was waiting. I assumed you were 
distracted. My apologies.
    I would like to respond in that the version of LEED that 
GSA currently requires exclusively was a version of LEED that 
has existed until now. LEED's proposed regulations are those 
which we have been questioning as hurtful to our industry, and 
perhaps also to----
    Ms. Norton. Well, so government is doing it the right way: 
they are proposing the regulations; they are reviewing the 
regulations. You even say that in the DOE headquarters they 
used cool vinyl roofing that you approved of.
    Mr. Russell. DOE has a special exemption and were able to 
do that. That roofing, however, would not be available to ----
    Ms. Norton. Okay, I just want to put on the record, Mr. 
Russell, that they are reviewing, that there now are more 
actors in the field and that is what happens. When they see 
LEED getting all the business, you have people saying me too, 
me too, and I don't see how there can be objection to that, 
particularly if they are under review.
    Mr. Williams, you are in a business that ought to know a 
lot about LEED, and you say that you have created 94 jobs since 
July 2008, so I have to ask you, first, your view of LEED and 
how there might be other systems as well that should be used, 
and also how you were able to increase your business, including 
a new business startup, apparently, while complying with 
regulations, and why regulations didn't hinder you. Or if they 
did, or make it more difficult, I wish you would explain how.
    Mr. Williams. Thank you. Yes, I do have some expertise in 
that inasmuch as I am a LEED accredited professional. And I 
think as such there are a few things, certainly Chairman Issa, 
in his comment as he spoke about the GSA wanting to lease 
buildings where all utilities are included and that that is 
problematic, I agree with him on that, and so does the U.S. 
Green Building Council. The U.S. Green Building Council really 
wants the tenant to pay the utilities because then the tenant 
is responsible for being responsible.
    Secondly, I think it is really important to note that LEED 
version 3 is what is in operation today. LEED version 4 is what 
is being considered. No versions of LEED, 3 or 4, rule any 
product out of a building. Unequivocal. LEED version 4 brings 
into play two material and resource credits that deal with the 
chemistry of materials. A building can be built and not even 
use or require the use of those two credits. The bulletproof 
glass is still going to be used as bulletproof glass, until 
such time as there are alternatives or a architectural owner 
group that wants to use the material and resource, those 
options within the material and resource credits.
    The jobs that we have been able to create have been because 
of our position. These are customers. Our customers are asking 
for building products with certain attributes. We, very early 
on, invested in those products with those attributes that 
actually, today, position our materials to be well chosen in 
version 4 but, again, do not make our materials exclusive for 
version 4.
    So our work in the environment, particularly in the 
environment within the building construction area, is what has 
allowed us to grow through customer demand. Our business growth 
2011 over 2010 was 20 percent. No segment of our economy that I 
am aware of grew 20 percent at that time, and the building 
sector did not grow 20 percent at that time. We are responding 
largely to customer demand and understanding, and translating 
those customer demands are what has allowed us to create jobs, 
as opposed to issues dealing with regulation. We are regulated 
and we know there are times when that can be problematic, but 
that is not what I came today to talk about. I came today to 
talk about how our business has grown in this economy, and that 
is why our business has grown in this economy.
    And, Representative Issa, you may have missed a comment 
that I made, and that is that the U.S. Green Building Council 
would strongly agree with you relative to a tenant leasing 
where the utilities are included in the lease. The U.S. Green 
Building Council very specifically wants the tenant to pay for 
their water and their electricity so that they are aware of 
what they are using, so that they are better stewards of that.
    Chairman Issa. [Presiding.] And we are going to work on 
getting GSA to see the light.
    With that, we recognize the gentleman from Arizona, Mr. 
Gosar.
    Mr. Gosar. Thank you, Chairman.
    Being from Arizona, we really understand where this is 
heading. I am also a health care professional. We have to 
believe that there are rules and regulations that we have to 
look at, but government, a lot of times, is the problem. It is 
called that knee jerk reaction. Instead of conscientiously 
looking at the problem and sorting it out. How does that 
Hippocratic oath go? Do no harm? We find that over and over 
again.
    I want to direct my first question to Mr. Rutenberg. In 
your testimony you mentioned that a National Association of 
Home Builders, NAHB, housing market index survey conducted in 
January of 2012 found that 69 percent of builders reported that 
quantifying buyers for mortgages is a significant problem for 
them. Why is this the case?
    Mr. Rutenberg. It is a continuation of what we have talked 
about, how the banks are becoming very cautious; that they are 
having loans sent back to them by the Fannie, Freddie, and 
other GSEs. To be defensive, the average loan set of documents 
now exceeds 500 pages. The length of time has grown so long the 
appraisal has become a problem. Secretary Donovan said, in 
April, when I was in a meeting with him, that he believes that 
the pendulum in the housing finance has swung too far the 
opposite way; it needs to come back in the middle. Whenever we 
have had problems, we tend to overreact. We have overreacted, 
and now if we can come back in the middle, it would be much 
better. We could give the protection that we need and we could 
focus back on what is pragmatic.
    Mr. Gosar. So a closer analogy, when I was going to health 
care, instead of using a cleaver with these, we should have 
used a scalpel.
    Mr. Rutenberg. It would be as if you sent almost everybody 
for a CT or an MRI.
    Mr. Gosar. Or brain surgery instead of maybe a dose of 
antibiotic.
    Mr. Hamby, would you agree with that?
    Mr. Hamby. Yes, sir, I would.
    Mr. Gosar. Do you see CFPB is on the right track?
    Mr. Hamby. They are in some instances, sir; in others they 
are not. I think we have to be very careful about how it is 
implemented. The concerning things are really that there is no 
oversight board for them and there is really no budgetary 
constraints; it is a czar system, which is concerning in 
itself. But we must be diligent. This Committee needs to be 
diligent to make sure the things like the qualified mortgage 
that we are talking about are sensible, usable, and do not 
cause more problems than they create.
    Mr. Gosar. Well, I am very concerned about it. Being from 
Arizona, in the last year we ranked second in foreclosures 
again, so the housing market is a huge industry for Arizona, as 
well as the Nation. Do you think they are on the right track in 
regards to the ability for the repay rule?
    Mr. Hamby. You know, I think it is too early, quite 
honestly, to say yet, but I think we should look at it very 
cautiously.
    Mr. Gosar. If they are not on the right track, how would 
you say they go about getting back on the right track?
    Mr. Hamby. Well, the right track is to sit down with all 
the industries, the trade associations, go over it, reach a 
consensus between everybody as to how we accomplish the goal 
and, at the same time, make sure that our mortgage market 
thrives and continues to work well.
    Mr. Gosar. Also what I think include the community bankers, 
would it not? I mean, I am from rural Arizona----
    Mr. Hamby. Absolutely, sir.
    Mr. Gosar. That is what makes 99 percent of our loans out 
in rural Arizona.
    Mr. Hamby. Yes, sir, and that is why I am pleased to be 
able to testify today.
    Mr. Gosar. Thank you for being here.
    How would you feel about that, Mr. Rutenberg, as far as 
that repay rule?
    Mr. Rutenberg. I think that we have to be very careful. I 
am very concerned that we are going to see the rules for the 
first time in December, and they are supposed to be implemented 
in January. We wish we would be more active in the 
conversations, as you alluded to. One of the things for the 
qualified mortgage, we very much support the safe harbor, as 
opposed to rebuttable. We believe that they need to be 
proscriptive, pragmatic, and something that lenders can do and 
feel comfortable in, and when they have the comfort, we will 
see lending become more abundant.
    Mr. Gosar. I am going to kind of skip ahead because I am 
limited on time. In regards to--you know, I put myself through 
school as a contractor builder, so I understand a lot of that 
aspect. One of the things is the AD&C type of loans in regards 
to contractors buying and financing a house and a start. Tell 
me how would you see revamping that, or do you see that being 
the ability to kind of jump start our economy in home building?
    Mr. Rutenberg. There is no question that the small and 
medium size builders need AD&C to be able to compete with the 
larger builders. But they are getting their money directly from 
the large banks and from Wall Street. The regulators in many 
parts of the Country, in your State, in my State, I am sure in 
my State, just tell the banks you cannot do any more lending, 
you have to continue to shrink your real estate assets. So the 
banks are not able to loan to the builders. It has become 
almost non-existent. And it is starting to ease up just a 
little bit, but not enough to take care of the demand, because 
the inventory of new homes is at an all-time historic low, both 
percentage and by units.
    Mr. Gosar. Mr. Hamby, I am going to take one more second. 
You know, the analogy was always made to me that sometimes it 
is that loan that is made in tough times, probably with not the 
right information or the best information, that actually is the 
best loan given. Is that something that you would agree with, 
that a community bank is much more apt to be able to make that 
right decision?
    Mr. Hamby. Yes, sir, I would, and many times that is 
exactly the case. Not always, but most of the time. It gets to 
the character issue I talked about earlier and the judgment 
call that we make.
    Mr. Gosar. It is that area of looking somebody in the eye 
and understanding exactly the fortitude about how they are 
going to repay that.
    Mr. Hamby. We know what they are going to do; we understand 
our community; we know what the impact to the community will 
do; and we have a pretty good feel as if it will work or not.
    Chairman Issa. The gentleman's time has expired. I thank 
you.
    We now go to the gentleman from Virginia, Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman. Mr. Chairman, I 
would also ask that my opening statement be entered into the 
record at this time.
    Chairman Issa. Without objection, all members' opening 
statements will be placed in the record, and we will hold the 
record open until the end of the day for any additional 
statements.
    Mr. Connolly. I thank the Chair. Just two other items. I 
have a statement from the Virginia Forest Products Industry 
that is signed by about two dozen private sector companies in 
the forest products business, the lumber business, hardwood 
flooring business, and the forestry business, who in fact favor 
the Lacey Act and want to see its full implementation, because, 
from their point of view, actually, it protects them, 
legitimate industry, from illegal logging and the marketing of 
products from illegal logging. So I would at least like to get 
from the Commonwealth of Virginia's perspective, Virginia 
forest industry's perspective in favor of the Lacey Act 
regulation, their letter entered into the record.
    Chairman Issa. Without objection, that will be placed in 
the record.
    Mr. Connolly. I thank the Chair. Just one other item.
    Chairman Issa. You know, you are on a roll. You are doing 
real well with these.
    Mr. Connolly. I have a letter addressed to yourself, Mr. 
Chairman, and the Ranking Member, Mr. Cummings, from 
Transwestern Sustainability Services, and, again, this is a 
letter by a very large company that has done 20 million square 
feet with 100 LEED certified buildings, in favor of LEED 
certification and quite explicit in saying that it is not a job 
killer, just to get the other point of view. I would also ask 
that their letter, addressed to you and Mr. Cummings, be 
entered into the record.
    Chairman Issa. Without objection, so ordered.
    Mr. Connolly. I thank the Chair.
    Chairman Issa. Would the gentleman agree that regardless of 
whether it is a job killer or not, LEED is one of multiple 
standards for greening up buildings?
    Mr. Connolly. I agree with you, Mr. Chairman. Well, let me 
first say one of the problems I think we have, this is our 28th 
hearing on the subject of regulation and, frankly, as the 
Chairman knows, I wish we could have neutrally worded titles 
for hearing, because I actually think there is a lot of 
bipartisan concern about regulations that go too far; 
regulations with the best of intention that have bad results; 
regulations that do make it hard to do business.
    And remember it is not just business. I ran a local 
government, one of the largest local governments in America, 
and we were subject to federal regulation or State regulation 
that sometimes made no sense or just had us do incredible 
expenditures for very little gain, and you think is there any 
common sense left on the planet? Everybody with the best of 
intention, but gone amok. So there is a lot of sympathy for 
that point of view. But there won't be sympathy for the point 
of view that all regulation is bad; all regulation is a job 
killer. And that is the solution if we are worried about high 
unemployment.
    You heard the passionate statement of our Ranking Member, 
Mr. Cummings, about what it is like in an inner city in America 
to look at the results of lead poisoning. And if you are a 
parent who has a kid who has been a victim of lead poisoning, 
you want more regulation, not less.
    Mr. Tierney, from Massachusetts, was talking about this 
dialectic. There is a famous town in Massachusetts that was 
devastated because of illegal chemical toxic dumping. Many, 
many cancer deaths; children. So they wanted protection.
    I don't think there is an easy way out of looking at the 
financial meltdown on Wall Street, though I understand it is 
arguable, where a reasonable person would not conclude that the 
problem wasn't over-regulation of the financial industry. No 
less a figure than Mr. Greenspan testified subsequently to that 
and admitted he had made a mistake.
    So I don't think it is an either/or proposition.
    But let me talk about LEED because, Mr. Russell, you said 
it was a job killer and, Mr. Rutenberg, it is your business. 
And I have worked with the home builders in my community, and 
developers, and I agree with the Chairman that sometimes LEED 
is so rigid that it actually helps defeat the goal we are 
trying to achieve.
    Having said that, does not LEED also sometimes create jobs 
and give somebody a competitive advantage by marketing a 
product, saying I am LEED certified?
    Mr. Rutenberg?
    Mr. Rutenberg. Well, LEED certainly helped create an 
industry and advance the cause of energy conservation, which I 
have personally been working on since the 1970s, and I applaud 
that. However, there are other standards that have become 
involved and should see the light of day. The Home Builders 
spent several million dollars developing a green building 
standard before we spun it off. I would like to point out it is 
the only standard that was an ANSI standard by the national 
standard industry, and LEED participated in our consensus for 
it, and it is also going through other evolutions. And I think 
we did it because we thought we could deliver a better product 
for less money to the consumer, and I hope they get the light.
    If I could go for just about another 15 seconds on the lead 
paint. Before I get into trouble, I want to point out that the 
exemption that we asked for until we had the right kits was for 
homes that had no children and could not have a pregnant woman. 
It was very specific to where it would be safe. We continue to 
be on record in favor of lead paint abatement.
    Mr. Connolly. Mr. Chairman, I would ask that Mr. Russell be 
allowed to answer.
    Mr. Russell. Thank you, Congressman.
    Chairman Issa. I would ask unanimous consent the gentleman 
have an additional minute.
    Mr. Connolly. I thank the Chair.
    Chairman Issa. Without objection, so ordered.
    Mr. Russell. Thank you, Mr. Chairman, Mr. Connolly.
    To be very clear, the testimony we presented to the 
Committee is not intended to be interpreted that any particular 
system is a job killer, LEED included. The testimony is 
intended to illustrate that the Federal Government's selection 
of one, and only one from among many, including many that have 
been demonstrated by the Government's own assessment to perform 
better, perhaps also including my colleague to the left's 
system, would be an opportunity for the Government to become 
more efficient and save money, and toward outcomes that we all 
share, which are increased energy efficiency and higher 
building performance. Thank you.
    Mr. Connolly. Mr. Chairman, there is just 15 or 20 seconds. 
I think Mr. Williams also, were you seeing to, all right.
    I thank the Chair for the extra time.
    Chairman Issa. I thank the gentleman.
    I would now ask unanimous consent that the following 
statement from page 23 of our report be placed in the record. 
The settlement agreement required EPA to propose and finalize a 
new rule to remove the opt-out provision. On June 7th, 2012, 
bipartisan legislation, the LEED Exposure Reduction Act of 
2012, was introduced to restore the opt-out provision pursuant 
to the settlement. Just in case anyone wanted to make sure they 
understood that lead paint is not an issue that is partisan.
    With that, we go to the gentleman from Pennsylvania, Mr. 
Kelly.
    Mr. Kelly. I thank the Chairman. Before I start, I would 
like to enter into the record a letter from the Associated 
Builders and Contractors.
    Chairman Issa. Without objection, so ordered.
    Mr. Kelly. And it says at the start, this is the first 
paragraph: ``On behalf of the Associated Builders and 
Contractors, a national association with 74 chapters 
representing 22,000 merit shop construction and construction-
related firms.'' I just want to make sure we understand that 
because, as I heard earlier, we only have six people here and 
we could probably stay here for weeks and we could viably bring 
in not just six of you, but 6,000 of you that would have the 
same concerns, and I think that is what probably bothers me 
more than anything else.
    This hearing is not zip code specific, this hearing is not 
industry specific, and this hearing is certainly not 
politically specific. When I am walking in the Third District 
of western Pennsylvania, to a person, everybody I talk to talks 
about the crushing boot the government puts on the throat of 
small business people, and if they would just let off a little 
bit maybe we could grow jobs; maybe we could go ahead and 
expand an economy that is only being held back by us 
internally. There is no place else in the world like this. My 
goodness, we are awash in natural resources that are a gift 
from God, and we can't even get to them because of over-
regulation.
    So when I hear this, Mr. Hamby, especially, you remind me 
of so many people that I talk to in northwest Pennsylvania, 
people that have small banks. You and I talked just briefly. 
Tell me about the qualified borrower definition, and is the 
definition, this is CFPB, right? And how many pages is it, by 
the way, the definition?
    Mr. Hamby. I will be honest, I really don't know yet.
    Mr. Kelly. It is 1,001 pages, the definition of who a 
qualified buyer is. Now, I am going to assume that in Ada, 
Oklahoma, where you grew up, that you probably walked those 
same streets, go to the same churches, go to the same 
restaurants, the same schools, and so those people who come in 
and sit across the desk from you are probably people you know 
and know whether they are qualified or not qualified.
    Mr. Hamby. Absolutely.
    Mr. Kelly. So does somebody from Washington have to give 
you 1,001 pages to define what a qualified borrower is?
    Mr. Hamby. No, sir.
    Mr. Kelly. Does it make it a little bit tough to make your 
decision?
    Mr. Hamby. Yes, sir, it does. Our lending standards are the 
same as they have been for the last 30 years. All we have to do 
now is do a lot more documentation, a lot of papering on the 
same thing that we----
    Mr. Kelly. Okay, so when we talk about a lot more, a lot 
more, a lot more, what does it actually mean? It is a dollars 
and cents thing, is it not?
    Mr. Hamby. It is a dollars and cents thing. As I reported 
earlier, it is a dollars and cents thing. And more than that, 
it is a time thing for my staff; it takes their eye off the 
ball, which is taking care of the customer. Instead, we are 
focused on complying with all the regulations and all the hoops 
that we have to go through, instead of getting out there and 
telling people, hey, it is time to refinance your home or how 
can I help you out?
    Mr. Kelly. And a lot of these regs are not based on solid 
evidence, but they are on conjecture and speculation. They are 
lacking foundation in any type of sound scientific analysis, is 
that not true?
    Mr. Hamby. I believe you are correct, sir.
    Mr. Kelly. Okay. I think the confusing thing of this is, 
when we talk about--and Mr. Tierney said the problem is there 
is a lack of demand. There is a lack of demand because people 
aren't certain of what is happening to them. Every one of you 
represent an industry or a business that cannot move forward 
because you just don't know what is going to happen to you 
next. It holds you back. I know from being in my business, I am 
in the automobile business, when I am not here, and thank God I 
am not here all the time, I get back home to northwest 
Pennsylvania and I listen to people. When I am on the lot or I 
am on the showroom, there are people that I sit across from 
that want to buy a car or a truck, but they can't do it. And 
you know why they can't? Because they are not sure that they 
are going to have a job or they are going to have a job that is 
going to pay at the rate that they need to meet a payment for 
the next 48 or 60 months.
    And I think, Mr. Chairman, thanks for having this hearing 
because it does come down to how difficult it is. The title of 
this is Job Creators Still Buried by Red Tape. Is there anybody 
sitting at this table that would say to me, you know what, we 
don't have enough regulations? We just need a few more. 
Anybody? Anybody who would sit there and say, you know, some of 
the regulations we have right now, could you not produce a list 
of regulations that absolutely have no intrinsic value to the 
ultimate user or the consumer? And every one of these 
regulations adds cost to your final product. I don't care if 
you are lending money, selling a car, building a car, building 
a house, working in the chemical business; whatever it is. This 
all drives your cost of your final product up, does it not?
    So when there is a price increase, unless I have been 
missing things for the last forty-some years that I have been 
on the lot, every time the price of something raises, goes up, 
what does it eliminate? The lowest person on the totem pole; it 
takes them out of the market.
    So if we are really concerned about creating jobs, wouldn't 
it be great to allow you to actually move around in a free 
market and be able to run your business with some type of 
certainty? Anybody disagree with that? I mean, I really want to 
hear from you because I have heard so much about how these 
regulations don't hurt and don't affect cost. Nobody.
    Mr. Williams. I would say that in the areas of business in 
which we are regulated we can move freely within our 
marketplace. It may be an exception, but we can move freely 
within the marketplace, and the consumer demand for what we are 
doing is such that it enables us to do that, albeit it one 
could reasonably argue we are within a niche, but ultimately we 
are still a small business, central Pennsylvania, and we are 
being successful.
    Mr. Kelly. And I understand. I am in a small business in 
western Pennsylvania.
    Chairman Issa. I would ask unanimous consent the gentleman 
have one additional minute. Without objection, so ordered.
    Mr. Kelly. I would appreciate that.
    Yes, sir.
    Mr. Rutenberg. When you asked about regulations, one of the 
things I would like to add is that we are now starting to see a 
lot of guidance coming out from different agencies, which does 
not necessarily have the same scrutiny as a regulation before 
it is issued, and that is becoming a concern.
    Mr. Kelly. Okay. Well, let me just say this to you. The 
CFPB, the people who are coming up with the qualified borrower 
definition, I wonder if there is any chance of getting those 
directives or those guidance to the Department of Energy. 
Probably would have helped them in making some of the decisions 
of who they lent money to that has ultimately cost the United 
States taxpayers a ton of money.
    Just as a final, I do appreciate you being here, but you 
know what we need to do? We need to do this. I don't care how 
many of these hearings we have. We need to do it every day in 
every way, in every town that we represent because you know 
what? The message isn't getting back here. It is certainly not 
getting to this Administration that continues to layer you with 
more regulations that ultimately drive the cost of whatever it 
is that you do higher and higher and higher. It eliminates the 
business, it decreases demand, and when you decrease demand you 
are also eliminating jobs. And if this is about creating jobs, 
then, my goodness, we better start looking at where the problem 
is. I thank you so much.
    Mr. Chairman, I yield back.
    Chairman Issa. I thank the gentleman.
    We now recognize the gentlelady from the money center 
banking community of America, New York, Mrs. Maloney.
    Mrs. Maloney. Well, I thank the gentleman for yielding.
    I also thank all the panelists for coming here today to 
share your personal experiences with running your businesses 
and really participating in the American economy.
    I am so tired of this recession. It has been going on since 
2007 and, according to most economists, it has cost this 
Country $18 trillion in household wealth, well over 7 million 
jobs, and many economies have not even recovered.
    Yesterday, Bernanke testified that one area that now, after 
many years, is picking up, is housing, and that is good news 
because Professor Zandi says that housing is 25 percent of our 
economy, our GDP. So without a robust housing market, our 
economy will remain sluggish.
    Now, many economists say that what caused this was lack of 
regulation, lack of regulation for new products, lack of 
regulation for subprime loans, and part of the reforms is that 
a qualified buyer has to be someone who can afford the loan. I 
call that responsible. And if we had had that common sense 
regulation in place prior to 2007, possibly we would have 
averted this financial crisis, which the Bureau of Labor 
Statistics says it is the first recession in our history that 
was totally caused by mismanagement of the financial system.
    So I would say some regulation that prevents economic 
downturns is well worth the effort to bring into sunshine, 
bring into transparency, at the very least, have the ability to 
pay for whatever it is you are buying.
    During the crisis, the joke in New York was if you can't 
afford to pay your rent, go out and buy a home. It was that 
easy. And many people are suffering to this day because of it. 
And I would say that this lack of regulation contributed to the 
economic downturn. So a regulation that has passed out of this 
Committee that says that unemployment has to be below 6 percent 
before you can pass a regulation would nullify all the 
regulations we have there to prevent another financial crisis. 
It truly would.
    I would like to ask the panelists if you think it is 
reasonable to have some reforms there, such as the QE2 that we 
had a panel and some of your representatives testified before 
Financial Services that they supported these regulations, 
ability to pay and others, in order to prevent another economic 
downturn. So I would like to ask Mr. Rutenberg, do you think 
that reasonable reforms or regulations to prevent another 
subprime crisis are reasonable for growing jobs in the future? 
Do any of you want to go back to the wild west days of any risk 
you might take, you can take, and you can buy things without 
any intention of ever even paying for it, and it is sold on the 
secondary market that brings tragedy to our liquidity and to 
our capital and our Country?
    Mr. Rutenberg, would you support the rule that we are 
considering that you literally be able to pay for a house if 
you are buying it? That is one of the reforms. It is literally 
one of the reforms. You would think that is common sense, but 
some people are opposed to ability to pay. So I would like to 
say if that reform was in place, do you think the housing 
market would be stronger today, possibly we would have averted 
the entire crisis?
    Mr. Rutenberg. The National Association of Home Builders 
has put out a paper and worked with Congress and the 
Administration and Republican candidates suggesting some 
modifications to the housing finance system, which we believe 
are important and would go a long way to providing more 
stability and safety to the system. So, yes, we do believe 
there needs to be reforms. We do have questions about whether 
or not we need a 1,000-page definition of a qualified buyer, if 
that in fact is true, and some of the other things that may be 
proposed.
    So, in general, we do think that it is time to evolve the 
system to make it better. We think that we should be 
responsible in the forms that we have; that we should be 
responsible in qualifying people; that bankers should be doing 
real banking; and that we should be more responsible.
    I think we also want to be careful in what kind of 
regulations that we are opening the door for and make sure that 
they are reasonable and that they would be effective.
    Mrs. Maloney. Do you support the qualification that you 
have the ability to pay before you buy a house?
    Mr. Rutenberg. We believe that and we believe there should 
be a safe harbor and we think that there should be guidelines. 
I think we agree with where you are going; the question is what 
does it look like when we have it and that works. And some 
things become counterproductive. If we go from a 300- to a 500- 
to an 800-page loan package, I don't think we have done a lot 
of good. Obviously there is a ratio between prices of homes and 
income, and normally we have been about 3.2. Well, in some 
States we got up to 5.5. That is just stupid. And people are 
doing things. I had somebody who said they were flipping condo 
contracts like they used to do NASDAQ stocks. That is 
inappropriate and that should be stopped.
    Mrs. Maloney. Well, Mr. Williams, you testified that you 
created 94 new jobs. Congratulations. If every small business 
had done what you have done, we wouldn't have an unemployment 
problem. Since July 20, 2008, an additional 29 at a new startup 
business. Do you believe that complying with regulations has 
hurt your business or caused your company in any way to lose 
jobs?
    Mr. Williams. No, it has not.
    Mrs. Maloney. Even you won an award, as I understand, an 
EPA award for environmental achievements, and you said your 
company's work on sustainable environment is good for your 
customers and good for business. So is it fair to say that your 
company has found that it is good business to be a leader in 
complying with energy and environmental regulations?
    Mr. Williams. Yes, it is fair to say that. Just a footnote. 
A very well established environmental consulting group, Five 
Winds International, years ago developed a model that 
essentially said if regulation is always viewed as cost, it 
will always be cost. If regulation is viewed as opportunity, it 
can create opportunity and can even create competitive 
advantage. We subscribe to that. It was rather startling to us 
at first to work through that because it didn't seem to make 
sense to us, but ultimately adopting that model has helped us 
to stay out front and, generally speaking, our consumers are 
asking sometimes more than what the regulations may be.
    Mrs. Maloney. Well, we have heard that the current 
Administration has imposed a regulatory tsunami on businesses. 
Have you noticed this regulatory tsunami in the last three 
years that we keep hearing about? Have you witnessed that or 
has it been a burden to you?
    Mr. Williams. There are some regulations that we may have 
gotten splashed by the tsunami, but we have not been 
overwhelmed by it, so in that respect our industry sector may 
have, as I said, only been splashed, and none of which we 
encountered prevented us from moving forward.
    Mrs. Maloney. Well, your presence here today can help 
convince, I hope, some of my colleagues that regulation and 
economic prosperity are not mutually exclusive. In fact, they 
can go hand in hand. And I would say that a good road map of 
how we are going to operate would help business, help the 
overall economy, and any regulation that you feel is too 
onerous or whatever, I think that your Congress member, this 
Committee and others, would like to look at it. But we don't 
want to go back to days when there was no regulation, and I am 
particularly talking about the housing market, which to this 
day is suffering dramatically and I would say is the major 
challenge that we now have in our economy, is how to get 
housing back on track, creating jobs and moving forward.
    So, Mr. Rutenberg, do you have any ideas of how to get 
housing moving? I think the statement by Chairman Bernanke was 
encouraging yesterday. It isn't in response to my question, but 
he did say housing was one of the strongest economic indicators 
in the last economic report.
    Chairman Issa. And I would ask the gentlelady have an 
additional 20 seconds, making it an even 10 minutes. Without 
objection, so ordered.
    Mrs. Maloney. What, 10 minutes?
    Chairman Issa. Yes, ma'am.
    Mr. Rutenberg. Housing is now back to about 40 percent of 
its sustainable level of production. I would like to comment 
that the recent three or four year history of performance of 
the new loans has been quite excellent, and even in Fannie and 
Freddie that is true. NAHB continues to try and be part of the 
process of reforming the regulations and improving them so that 
both our consumers and the financial institutions are in a 
better position. It is ongoing and we look forward to being 
part of the process. We are getting better slowly.
    Mrs. Maloney. Thank you.
    Chairman Issa. I thank the gentlelady.
    We now recognize the gentleman from Pennsylvania, Mr. 
Platts.
    Mr. Platts. Thank you, Mr. Chairman. Coming from a House 
classified briefing, so I apologize for the late arrival. I 
want to thank the witnesses here and appreciate their written 
testimony and yield the balance of my time to you, Mr. 
Chairman.
    Chairman Issa. I thank the gentleman for yielding.
    Mr. Williams, since you only got splashed by the tsunami, I 
thought I would ask a couple more questions. And I appreciate 
your being a good witness here today. I think we all agree that 
within LEED certification standards and the efforts they are 
making lies something that everybody is trying to do. I happen 
to come from California, where a lot of what you choose to do 
under LEED we led as a State. And I am concerned about the 
standardization or the lack of standardization that exists 
within the industry where, depending upon which standard you go 
to, you might have different choices; and if one organization, 
like GSA, mandates that, then by definition they are picking a 
winner.
    Would you agree that in the argument over Betamax versus 
Sony, so to speak, that the government should try to encourage 
and allow as many standards as they can so as not to determine 
the outcome of one versus the other? In other words, promote 
competition rather than mandating one solution?
    Mr. Williams. I had the opportunity to play back or listen 
to the May hearing on that subject, and I think one of the 
things I heard there was performance standard. There are enough 
differences in several of the green building standards that 
adoption or picking and choosing without that core base of 
performance standard I think could lead the GSA down a very 
windy road.
    Chairman Issa. But you mentioned that you support tenants 
paying for their water and electricity so that there is a 
causal relationship. Isn't it true that no matter what the GSA 
does in the way of defining standards, if the tenant is not 
responsible, they can abuse those standards; they can run their 
air conditioning at a lower temperature, they can do it 24 
hours a day, they can leave the lights on, and so on?
    Mr. Williams. Absolutely. And I think virtually every green 
building standard would say no to that, because that is not the 
core premise or the reason they exist.
    Chairman Issa. Now I am going to ask you a little bit maybe 
more business personal questions. You have a line of mats in 
your company, if I read it right.
    Mr. Williams. Yes.
    Chairman Issa. Where do you source them from?
    Mr. Williams. There are two places. One line of mats has 
been made and is made here in the United States and has been 
made here since 1968. We also have a line that we source from 
our factory in China, and the core reason for that factory's 
existence in China is to have manufacturing base in China, not 
to take jobs out. The product that you reference is a product 
that we are physically unable to make that here in the United 
States.
    Chairman Issa. And why is that?
    Mr. Williams. That is because of the configuration of the 
product and access to the particular materials. It is about $2 
million per year of a $110 million business. It also provides 
the foundation for our startup in China. Our belief is that----
    Chairman Issa. And I don't want to cut you off. I want to 
give you all the time in the world; we are sort of at the end. 
But you made a decision because it was impossible to make 
something in the U.S. that led to $2 million worth of goods 
being produced in China. Can you just elaborate on that?
    Mr. Williams. I was beginning to do that, so hopefully I 
will make sense. I know you will understand it; the question is 
if I make----
    Chairman Issa. I am an old manufacturer, so I always want 
to know why something is made one place versus another.
    Mr. Williams. Okay, okay. The product is made there. It 
formed for us the basis of being able to set up a business in 
mainland China for the purpose of selling our products into 
mainland China. Many years ago our founder returned from Saudi 
Arabia and spoke and said that growing our business in the 
Middle East was very important to him because he felt it was 
his patriotic duty to bring some of the oil dollars back to the 
United States. And he stood there with a great wide grin on his 
face, just as you grinned at it----
    Chairman Issa. We love exporting, don't we?
    Mr. Williams. Well, yes. Big time. Big time.
    Chairman Issa. When we can.
    Mr. Williams. And the basis of our factory in China is to 
reach that marketplace with our products and manufacturing in 
China, and to, to some degree, upon our founder's smiling 
comment, is to return dollars to the United States; and that 
niche of our product line being made in China is the foundation 
of starting that business in China, and that is just bringing 
those products over.
    Chairman Issa. But you didn't say that it was cheaper to 
make in China; you said you couldn't make it in the U.S., and I 
just wondered is it that you couldn't make it cost-effectively 
in order to hit a price point in a global market, you chose to 
leverage some of your technology in China?
    Mr. Williams. It is technology that was available to us in 
China, not here. We could replicate it. The price point on the 
product, candidly, I don't want to say there is no price point; 
it is the only product of its type, so the price point was not 
the issue. That was our decision around a core of being able to 
begin manufacturing in China.
    Chairman Issa. Well, I will just make a broad question for 
all of you. If in fact America has extremely low-cost energy, 
if America has a well educated workforce available to you, if 
America has a good transportation infrastructure system, and if 
America has a tax policy that is competitive with any other 
country in the world, and a regulatory system that is as 
streamlined to protect, while at the same time not interfering, 
then can your companies, your industries, maybe I will leave 
the banker out for a moment, compete?
    Now, last question: Do you believe we have all of those 
elements today, or can we and should we do better?
    Mr. Yarossi. We absolutely should do better. We could do a 
lot better in how we could make a lot of those things work.
    Chairman Issa. Mr. Hamby, if I add an access to affordable 
capital, would you also weigh in?
    Mr. Hamby. Sure. It would be a lot more affordable to help 
them with and it would be more abundant.
    Chairman Issa. Mr. Pirkle?
    Mr. Pirkle. Currently, I think we import about 60 percent 
of our fertilizer needs for the domestic agricultural market, 
so to balance that would be better for American jobs.
    Chairman Issa. And low-cost fossil fuels such as natural 
gas is a major element to your being able to make it 
domestically.
    Mr. Pirkle. That is correct.
    Chairman Issa. Mr. Williams?
    Mr. Williams. I think we can do better. Absolutely 
convinced we can do better. And earlier, if I may, to your 
point on the trillion, I do think that is an area where 
Eisenhower's quote is so pertinent, that we have done so much 
to squander things for future generations. We talk about 
sustainability in the environment. We need a sustainable 
economy and we need a sustainable America, and doing better is 
essential to that.
    Chairman Issa. I believe Eisenhower was the last president 
to balance the budget in all his years.
    Mr. Russell?
    Mr. Russell. Mr. Chairman, thank you. We can do better. We 
look forward to working with the Committee in making that a 
reality.
    Chairman Issa. Thank you.
    Mr. Rutenberg, you have the last word.
    Mr. Rutenberg. Well, my wife is an educator and I am all 
for improving education, and I look forward to infrastructure. 
I think we can do better. I think we have great promise and I 
look forward to the future.
    Chairman Issa. Thank you.
    Mr. Platts, thank you for the use of your time.
    With that, I want to thank the panel for being patient. I 
will note that finishing at the stroke of noon is practically a 
record for a panel this size.
    We stand adjourned.
    [Whereupon, at 11:57 a.m., the committee was adjourned.]





                                 
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