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






     REGULATORY REFORM SERIES, PART 8: PRIVATE-SECTOR VIEWS OF THE 
        REGULATORY CLIMATE ONE YEAR AFTER EXECUTIVE ORDER 13563

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

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 16, 2012

                               __________

                           Serial No. 112-118






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

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

                                 _____

              Subcommittee on Oversight and Investigations

                         CLIFF STEARNS, Florida
                                 Chairman
LEE TERRY, Nebraska                  DIANA DeGETTE, Colorado
SUE WILKINS MYRICK, North Carolina     Ranking Member
JOHN SULLIVAN, Oklahoma              JANICE D. SCHAKOWSKY, Illinois
TIM MURPHY, Pennsylvania             MIKE ROSS, Arkansas
MICHAEL C. BURGESS, Texas            KATHY CASTOR, Florida
MARSHA BLACKBURN, Tennessee          EDWARD J. MARKEY, Massachusetts
BRIAN P. BILBRAY, California         GENE GREEN, Texas
PHIL GINGREY, Georgia                DONNA M. CHRISTENSEN, Virgin 
STEVE SCALISE, Louisiana                 Islands
CORY GARDNER, Colorado               JOHN D. DINGELL, Michigan
H. MORGAN GRIFFITH, Virginia         HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)

                                  (ii)















                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     1
    Prepared statement...........................................     4
Hon. Diana DeGette, a Representative in Congress from the State 
  of Colorado, opening statement.................................     7
Hon. John Sullivan, a Representative in Congress from the State 
  of Oklahoma, opening statement.................................     8
    Hon. Michael C. Burgess, a Representative in Congress from 
      the State of Texas, opening statement......................     9
Prepared statement...............................................    10
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................    12
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    12

                               Witnesses

Andrew F. Puzder, Chief Executive Officer, CKE Restaurants, Inc..    15
    Prepared statement...........................................    18
Barbara Walz, Senior Vice President for Policy and Environmental, 
  Tri-State Generation and Transmission Association, Inc.........    50
    Prepared statement...........................................    52
    Answers to submitted questions...............................   137
Kimber L. Shoop, Senior Counsel, Oklahoma Gas and Electric 
  Company........................................................    59
    Prepared statement...........................................    61
Robert A. Luoto, President, Cross and Crown, Inc.................    78
    Prepared statement...........................................    81
Mark A. Mitchell, Co-Chair, Environmental Health Task Force, 
  National Medical Association...................................    88
    Prepared statement...........................................    90
Howard Williams, Vice President and General Manager, Construction 
  Specialties, Inc...............................................    92
    Prepared statement...........................................    94

                           Submitted Material

Letter, dated November 2, 2011, from John Hickenlooper, Governor 
  of the State of Colorado, to Lisa P. Jackson, Administrator, 
  Environmental Protection Agency, submitted by Mr. Gardner......   116
Letter, dated December 16, 2011, from Hon. Mark Udall and Hon. 
  Michael F. Bennet, Senators from the State of Colorado, and 
  Colorado Congressional Delegation to Lisa P. Jackson, 
  Administrator, Environmental Protection Agency, submitted by 
  Mr. Gardner....................................................   117
Letter, dated October 31, 2011, from Frank McNulty, Speaker of 
  the House, Colorado General Assembly, to James B. Martin, 
  Regional Administrator, Environmental Protection Agency, Region 
  8, submitted by Mr. Gardner....................................   119

 
     REGULATORY REFORM SERIES, PART 8: PRIVATE-SECTOR VIEWS OF THE 
        REGULATORY CLIMATE ONE YEAR AFTER EXECUTIVE ORDER 13563

                              ----------                              


                      THURSDAY, FEBRUARY 16, 2012

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:06 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Cliff 
Stearns (chairman of the subcommittee) presiding.
    Members present: Representatives Stearns, Terry, Sullivan, 
Burgess, Blackburn, Bilbray, Gingrey, Scalise, Gardner, 
Griffith, DeGette, Green, and Waxman (ex officio).
    Staff present: Allison Busbee, Legislative Clerk; Mary 
Neumayr, Senior Energy Counsel; Alan Slobodin, Deputy Chief 
Counsel, Oversight; Sam Spector, Counsel, Oversight; Peter 
Spencer, Professional Staff Member, Oversight; Alvin Banks, 
Democratic Investigator; Tiffany Benjamin, Democratic 
Investigative Counsel; and Brian Cohen, Democratic 
Investigations Staff Director and Senior Policy Advisor.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. Good morning, everybody. The Subcommittee on 
Oversight and Investigations is in session.
    My colleagues, we convene the eighth in a series of 
subcommittee hearings since last January to address the 
administration's approach to regulatory reform. Today, we will 
receive testimony from several private sector witnesses. No one 
understands better than they do how the regulatory climate at 
present impacts their day-to-day operations and future business 
planning, including opportunities for economic growth and job 
creation. In fact, according to a Gallup Poll released 
yesterday, nearly half of the United States' small business 
owners who aren't hiring point to potential healthcare costs 
and government regulations as the reason why.
    FactCheck.org, a project of the Annenberg Public Policy 
Center of the University of Pennsylvania, citing numbers 
provided to Congress in 2011 by the Office of Information and 
Regulatory Affairs, reports that the estimated cost of Federal 
regulations under President Obama from the time he took office 
to the end of the 2010 fiscal year, not including regulations 
issued by the independent regulatory agencies, was somewhere 
between $8 billion and $16.5 billion. During the same initial 
stretch under President Bush, the estimated cost of new 
regulations was between $1.3 billion and $3.4 billion. All 
figures have been adjusted for inflation.
    President Obama's Executive Order 13563, issued just over 1 
year ago, affirmed among other things that agencies must adopt 
only those regulatory actions whose benefits justify their 
costs and are tailored to impose the least burden on society. 
It also called on agencies to review significant regulations 
already in place. As the President observed in a January 18, 
2011, op-ed in the Wall Street Journal, ``sometimes, those 
rules have gotten out of balance, placing unreasonable burdens 
on business--burdens that have stifled innovation and have had 
a chilling effect on growth and on jobs.''
    Yet, while some very outdated rules might be eventually cut 
back or simply eliminated, the Obama administration is doing 
very little to counter the ongoing regulatory juggernaut of the 
Environmental Protection Agency or address the thousands of 
pages of bureaucratic burdens released so far to implement a 
massive takeover of healthcare and the controversial financial 
reform bill.
    From industrial giants to small business start-ups, our 
Nation's job creators are still sitting on trillions of dollars 
in capital, in part because they are concerned with the number 
and burden of regulations that are being issued or proposed by 
the Obama administration, all of which are adding uncertainty 
to the oppressive regulatory environment.
    For example, the Federal Deposit Insurance Corporation, in 
its annual summary of deposits as of June 30, 2011, confirmed 
that across the country, deposits shot up 7 percent, or $8.25 
trillion, from 2010 to 2011, outpacing the 2 percent growth 
that occurred between 2009 and 2010. However, my colleagues, it 
is more than excessive and unclear regulation that the private 
sector must cope with; it is also the perception that Federal 
regulators have an unhealthy suspicion towards the business 
community and/or are clueless as to the real-world impact of 
their rules.
    We have before us today several representatives of American 
businesses from across the country and they reflect a wide 
range of industries. They will confirm that, 1 year later, we 
still have a long way to go. They will comment on how the 
current regulatory climate is affecting their day-to-day 
operations, including plans for expansion, investment, and 
hiring.
    These witnesses include Andrew Puzder, CEO of CKE 
Restaurants, Incorporated, which through its subsidiaries, 
franchisees, and licensees operates several popular fast-food 
chains, including Carl's Jr. and Hardees. With more than 3,200 
restaurant locations, CKE has created 70,000 jobs, 21,000 
directly and 49,000 with franchisees. CKE, like many others 
today, faces the costly burden imposed by compliance with a 
litany of Obamacare-related rules, as well as other regulations 
which simply threaten to disrupt its role as an engine of 
economic growth.
    We will also hear from Kimber Shoop, a senior environmental 
attorney with the Oklahoma Gas and Electric Company; Bob Luoto, 
President of Cross and Crown, Incorporated, a logging business 
he founded, working primarily in northwestern Oregon; Barbara 
Walz, Senior Vice President for Policy and Environmental with 
Tri-State Generation and Transmission Association, a wholesale 
electric power supplier to Colorado, Nebraska, New Mexico, and 
Wyoming.
    These witnesses will convey the message that even now, over 
1 year after the President launched his regulatory reform 
initiative with great fanfare, their experience with the 
Federal regulatory state has continued largely unchanged, with 
little if any sign of relief. I hope that today's hearing and 
our hearing series cumulatively will move us one step closer to 
producing that much-needed relief for American job creators.
    [The prepared statement of Mr. Stearns follows:]


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    Mr. Stearns. And with that, I yield to the ranking member.

 OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Ms. DeGette. Thank you very much, Mr. Chairman. You forgot 
to mention the other two witnesses. I am sure that was just an 
oversight on your part. Dr. Mitchell and Mr. Williams, we are 
happy to have you also, as well as the rest of the witnesses.
    Mr. Chairman, this is now the eighth hearing that we have 
had in this Congress on the issue of regulatory reform. I have 
got the message. The Republican majority supports regulatory 
reform and we have had hours and hours of hearings on this 
subject, but yet I haven't really seen anything clear come out 
of it except for we all support regulatory reform where 
appropriate. Everybody in this room and the administration 
believes we should ensure that regulations are simple, clear, 
reasonable, and not overly burdensome on the industries that 
they oversee. I am sure every single person on this panel today 
agrees with us on that.
    If the goal of the ongoing series of hearings on President 
Obama's regulatory reform to ensure that that was the case, 
that regulations be simple, clear, and reasonable, I would be 
in complete support of these continued hearings. However, 
having now sat through seven of these hearings, it is clear to 
me we are not really making any progress; we are just spinning 
our wheels. And what we are doing is bringing in panel after 
panel of witnesses to lodge a litany of different personal 
complaints about regulations that might affect them.
    Now, this subcommittee, which is one of the great 
subcommittees in the U.S. House of Representatives in my 
opinion--I have been on it for 15 years--we yield a lot of 
authority and responsibility. We have the ability to examine 
any issue within the purview of the mighty Energy and Commerce 
Committee. In the last Congress, we looked at crib safety, 
sought to understand the Deep Water Horizon oil spill, we tried 
to determine what led to the unintended acceleration in 
Toyotas. We did this in a bipartisan way, thoughtfully, by 
identifying real issues, by conducting research, even having 
field hearings where appropriate, talking to relevant parties, 
and looking at all sides of the issue.
    In this Congress, Mr. Chairman, as you will attest, I have 
many ideas about ongoing investigations in addition to 
regulatory reform that we could undertake. Avian flu, what is 
going on with the research? What are we doing as a Nation to 
protect and to defend against some kind of a pandemic flu or 
other infection? What is the fallout from the Fukushima Daiichi 
disaster in Japan and how does that impact the U.S. nuclear 
industry? A follow-up on the Deep Water Horizon, what is going 
on now with drilling in the Gulf and is there more of it going 
on and in an environmentally sound way? How is implementation 
of the Affordable Care Act coming and what can we do 
statutorily to make sure that it is a success for Americans? 
And I could go on and on and on.
    There are many things this subcommittee could be doing. 
Eight hearings to talk about the same thing without any 
progress seems to me to be kind of a waste of time. And I say 
that with all due respect because I also believe that 
regulations should be tailored.
    Now, I would say if we really were going to do oversight on 
regulatory reform and the impact of regulations on businesses, 
we could have invited a member of the Coalition of Small 
Business Organizations that just released a study on how small 
businesses feel about regulations. This month, the American 
Sustainable Business Council, the Main Street Alliance, and the 
Small Business Majority released the results of a survey of 500 
small business owners. Their survey showed that the issues 
small business owners care most about is weak customer demand, 
not overregulation. They also found that 86 percent of small 
business owners believed that some regulation is necessary in 
the modern economy. Seventy-eight percent supported holding 
health insurance companies accountable so they can't raise 
rates unfairly. This is a huge issue for small business and big 
business alike.
    Seventy-nine percent of the small businesses thought it was 
important to have clean air and water. Sixty-one percent 
supported establishing standards to move the country towards 
energy efficiency and clean energy. This survey shows what 
matters to American businesses and it isn't repealing the Clean 
Air Act or denying healthcare to workers. Business owners care 
more about getting people into their shops and buying their 
products, not doing away with regulations that ensure the 
safety and security of their families and their employees.
    Regulations, when promulgated in the right way, have real 
benefits. They can save lives and keep communities safe. They 
can ensure that small businesses aren't unfairly pushed out of 
markets. Regulations should be narrowly tailored and 
reasonable, but we can't pretend that they don't provide real 
and important benefits to the American people.
    I think we can and should do better. I hope we will have 
fact-finding hearings on important topics. And I will yield 
back before I start coughing more.
    Mr. Stearns. I thank the gentlelady.
    I recognize Mr. Sullivan for 2 minutes.

 OPENING STATEMENT OF HON. JOHN SULLIVAN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF OKLAHOMA

    Mr. Sullivan. Thank you, Chairman Stearns. Thank you for 
holding this important hearing to discuss private sector views 
of President Obama's Regulatory Initiative issued last year 
through Executive Order 13563. It is important that we hear 
from the private sector to assess whether President Obama's 
executive order is working to ease the day-to-day regulatory 
burdens on American companies and to evaluate if his Regulatory 
Initiative is creating jobs. Given the fact that his 
administration has taken no action to repeal any expensive 
regulations this year, I don't think they are off to a good 
start.
    I would like to take a moment to welcome our witnesses 
today and make special mention of Mr. Kimber Shoop, the senior 
environmental attorney who is with us on behalf of Oklahoma Gas 
and Electric Company, a medium- to small-sized award-winning 
utility in my State. I am pleased Mr. Shoop will speak of the 
challenges faced by OG&E as they try to navigate the regulatory 
train wreck of regulations coming from the Environmental 
Protection Agency these days. OG&E is in the regulatory 
crosshairs of several multibillion-dollar EPA regulations, 
including Utility MACT, which happens to be the most expensive 
rule ever imposed on the utilities sector, the Cross-State Air 
Pollution rule, and compliance with the Regional Haze Rule.
    The Regional Haze Rule is of particular note as Oklahoma 
officials presented a plan to EPA for regional haze they 
believe is right for our State, and now the EPA is bringing the 
heavy hand of the Federal Government to the Oklahoma ratepayers 
anyway by largely rejecting our State's implementation plan in 
favor of imposing its own Federal implementation plan. This is 
yet another example of EPA's overreaching on the States with 
burdensome regulations without analyzing its impact on electric 
reliability or cost. It is important to note that these 
regulatory actions by EPA do not happen in a vacuum; they 
impact everything from a company's ability to invest and make 
capital improvements to the rates, families, and small 
businesses paid for electricity services.
    As we continue to press for real regulatory reforms, I am 
confident that this hearing will help us continue making the 
case that the Obama administration needs to move faster to 
reduce the regulatory burdens of American companies.
    And I yield back.
    Mr. Stearns. The gentleman yields back.
    The gentleman from Texas, Dr. Burgess, is recognized for 1 
minute.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess.  Thank you, Mr. Chairman. And I, too, 
appreciate the hearing today. I will just state in comment to 
the opening statement by the ranking member, I, too, wish we 
had had a follow-up hearing on the unintended acceleration of 
Toyota vehicles because I think as we found out during that 
hearing and that process and getting documents from the 
National Highway Traffic Safety Administration that the problem 
was not electronic unintended acceleration, and that actually 
could have been put to rest by this committee. So it is a shame 
that was never undertaken.
    But I do appreciate the witnesses being here with us today. 
The chairman referenced the Gallup Poll and I think it is 
significant that over half of the hiring that is not happening 
is occurring because of the Patient Protection Affordable Care 
Act. I know that is something we will continue to explore in 
this committee and I look forward to that.
    So thank you, Mr. Chairman, and I will yield back to you.
    [The prepared statement of Mr. Burgess follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Stearns. The gentleman yields back.
    And the gentlelady from Tennessee, Ms. Blackburn, is 
recognized for 1 minute.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mrs. Blackburn. Thank you. Welcome to our witnesses.
    We have referenced Administrator Sunstein and the actions 
on Executive Order 13563 and in that, when he came to us, he 
testified that the President's executive order ``would identify 
rules that have been outmoded, ineffective, insufficient, or 
excessively burdensome,'' and the President wrote in the Wall 
Street Journal, ``today, I am directing Federal agencies to do 
more to account for and reduce the burdens regulations may 
place on small businesses.'' Well, unfortunately, what has 
seemed to come to pass is the testimony and the writing have 
not given what we have seen take place in the marketplace with 
the increase of regulations, 4,000 new regulations last year, 
nearly 80,000 new pages in the Federal Register. The Gallup 
Poll has been mentioned. We know that regulation is stifling 
businesses.
    We are looking forward to hearing from you and getting 
firsthand information of specific examples that this is 
prohibiting you from pursuing jobs growth and innovation in 
this country.
    I yield back.
    Mr. Stearns. The gentlelady yields back.
    We have an additional 30 seconds. Anyone wish--if not, then 
we recognize Mr. Waxman for 5 minutes.

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

    Mr. Waxman. Mr. Chairman, this is our eighth hearing today 
on regulatory reform, and if today's hearing is anything like 
the first seven, we are not going to hear much about ensuring 
that regulations are carefully tailored to meet their need.
    This hearing is titled ``Regulatory Reform Series 8--
Private Sector Views of the Regulatory Climate One Year After 
the Executive Order'' and what you have are four people who are 
going to tell us that they are unhappy, but do they represent 
the whole private sector? Are we going to hear a balanced view 
of how these regulations are operating? We, at the request of 
the Democrats, have two witnesses at the table who are going to 
give a different point of view, and the chairman wasn't even 
willing to acknowledge them and welcome them to this hearing. I 
am very pleased they are here and I appreciate the chairman 
giving us some witnesses to give another point of view.
    But the point that I am trying to make is this is not a 
fact-finding hearing to understand whether we need changes in 
the regulatory system; this is a hearing to hear anecdotes from 
four people from four different industries about their 
complaints. And I don't want to diminish or minimize the 
genuineness of what they have to say, but this is not a 
balance.
    For example, we are going to hear from fellow Californian, 
Mr. Andrew Puzder, who runs Carl's Jr. and Hardee's restaurant 
chains, and he is here to tell us that he doesn't like the 
inflexible and costly regulations stemming from the Affordable 
Care Act, although he glosses over the flexibility that allowed 
his company to receive a waiver from important medical loss 
ratio regulations. He is also going to criticize the new menu 
labeling laws. I am interested in his criticism, but that law 
was supported by the National Restaurant Association. They are 
in the private sector as well and they strongly supported these 
regulations. They called it a win for both restaurant owners 
and guests.
    We also have Kimber Shoop of the Oklahoma Gas and Electric 
Company. His company received important benefits from the 
Affordable Care Act, collecting almost $700,000 to help 
continue providing affordable healthcare coverage to their 
early retirees. But that is not why he is here; he is here to 
complain about regulations that he finds troublesome. Well, 
what we have is a handpicked group of four people to give a 
certain perspective on regulations. And this perspective is the 
Republican perspective that we have been hearing over and over 
and over again. I could call it a rush to judgment, but it is 
not even that. It is a statement of a political point of view. 
This hearing, as the others we have held on the subject, have 
been focused on politics over policy, more focused on attacking 
the President than working with us and him in a bipartisan way 
to solve America's problems.
    I don't have high hopes for this hearing, although I am 
pleased that the witnesses are here and pleased that we have 
two additional witnesses to give some bit of another point of 
view. We can't make decisions by anecdote. We have got to have 
data. We have got to have debate. We have got to hear different 
points of view as we are urged to make decisions.
    But I have high hopes for one of our witnesses to clear up 
an important matter from a previous committee hearing. Three 
years ago, the Energy and Environment Subcommittee held a 
hearing on climate change, and at that hearing, Dr. Patrick 
Michaels from the Cato Institute testified that widely accepted 
scientific data has overestimated global warming and that 
regulation enacted in response to that data could have a ``very 
counterproductive effect.'' He was the only scientist to 
testify that climate change didn't warrant congressional 
action. After that hearing, we discovered information that 
appeared to indicate that Dr. Michaels had made 
misrepresentations to the committee concealing some of his 
financial support from big energy business. Representative 
Welch asked him about it at that time what his financial 
relationships were with certain energy companies for the 
record. He never directly answered the question.
    Today, Barbara Walz, the representative of Tri-State, will 
be testifying. We sent a letter to her in advance of this 
hearing because public documents indicate that Tri-State funded 
Dr. Michaels' work to discount the seriousness of climate 
change. I am sure that is in the interest of the company but 
that might well indicate that he had some kind of reason to 
come up with the conclusions he wanted. I think we need to, in 
this committee, understand this matter further. He appeared 
before our committee, presented himself as an academic 
researcher discounting his ties to polluting industries. I 
think clarifying this will be very helpful.
    And that is about the only thing I hope that we may be from 
the positive point of view out of this hearing other than a lot 
of genuine, heartfelt complaints.
    Thank you, Mr. Chairman.
    Mr. Stearns. And I thank the distinguished ranking member 
of the full committee.
    I now will welcome our witnesses, and I will start to my 
right. Mr. Williams, we are delighted to have you here. Howard 
Williams is the vice president and general manager of 
Construction Specialties, Incorporated. We also have Mark A. 
Mitchell, who is a doctor and co-chair of the Environmental 
Health Task Force, the National Medical Association. You are 
welcome. And Mr. Luoto is president of Cross and Crown, 
Incorporated. We have Mr. Shoop. Mr. Sullivan, I think, 
introduced him but I will mention again that he is a senior 
environmental attorney, Oklahoma Gas and Electric Company. And 
we have Barbara Walz, and the distinguished ranking member will 
introduce her, as well as Mr. Gardner.
    Ms. DeGette. Well, I am delighted, Mr. Chairman, that Ms. 
Walz is here today. I have worked with her and her company for 
many years on a lot of issues and we might disagree today, but 
we are good friends and it is delightful to see her. And I will 
yield to Mr. Gardner, who actually her company is in his 
district.
    Mr. Gardner. Well, I thank the ranking member for yielding 
and welcome Ms. Walz as well to the committee. Thank you very 
much for your time and to all the witnesses for being here 
today. If you fly into Denver from the East Coast, you fly over 
my district, which is 32,000 square miles on the eastern plains 
of Colorado. It is a very large district, and you have got 44 
not-for-profit systems that are located in your district. And 
many of them are in my congressional district, and I thank you 
for the work that you do to make rural Colorado work.
    Mr. Stearns. And our last witness is Andy Puzder, CEO of 
CKE Restaurants. Mr. Waxman is not here. Having been a 
franchisee of motels and watched all the regulations come down 
from the company to me, I had to spend all the money to 
implement it as a franchisee, so my perspective was different 
than perhaps the Restaurant Association. I had three or four 
restaurants, I had five or six motels, so I found this crushing 
regulation just put in perspective having been a franchisee.
    But with that, Mr. Puzder, we are going to allow you to 
start your opening statement. I am sorry. We have to swear you 
in.
    As you know, the testimony you are about to give is subject 
to Title XVIII, Section 1001 of the United States Code. When 
holding an investigation hearing, this committee has the 
practice of taking testimony under oath. Do any of you have any 
objection to testifying under oath? No? The chair then advises 
you that under the rules of the House and the rules of the 
committee, you are entitled to be advised by counsel. Do you 
desire to be advised by counsel during your testimony today? In 
that case, would you please rise and raise your right hand? I 
will swear you in.
    [Witnesses sworn.]
    Mr. Stearns. Now, you may give your 5-minute opening, Mr. 
Puzder.

 TESTIMONIES OF ANDREW F. PUZDER, CEO, CKE RESTAURANTS, INC.; 
      BARBARA WALZ, SENIOR VICE PRESIDENT FOR POLICY AND 
     ENVIRONMENTAL, TRI-STATE GENERATION AND TRANSMISSION 
 ASSOCIATION, INC.; KIMBER L. SHOOP, SENIOR COUNSEL, OKLAHOMA 
GAS AND ELECTRIC COMPANY; ROBERT A. LUOTO, PRESIDENT, CROSS AND 
 CROWN, INC.; MARK A. MITCHELL, M.D., CO-CHAIR, ENVIRONMENTAL 
  HEALTH TASK FORCE, NATIONAL MEDICAL ASSOCIATION; AND HOWARD 
  WILLIAMS, VICE PRESIDENT AND GENERAL MANAGER, CONSTRUCTION 
                       SPECIALTIES, INC.

                    TESTIMONY OF ANDY PUZDER

    Mr. Puzder. Thank you, Chairman Stearns, Ranking Member 
DeGette, and members of the subcommittee. The Virgin Islands 
representative isn't here, so I can safely say that we have 
restaurants in every one of your districts, and it is a 
pleasure to be here today. I want to thank you for inviting me 
to testify before you on our Nation's regulatory climate. I 
would also point out that we do have representatives of the 
National Restaurant Association and the National Council of 
Chain Restaurants here today to hear the testimony. So while I 
do speak for myself and not on behalf of those organizations, 
they are present.
    We own 3,250 restaurants in 42 States and 25 foreign 
countries under the Carl's Jr. and Hardee's brand names. With 
our franchisees, as the chairman mentioned, we employ about 
70,000 people. Our company creates jobs and helps generate 
economic prosperity by building new restaurants. Each new 
restaurant we construct creates 25 jobs in the restaurant 
itself. We invest over $1 million in the community where we 
construct those restaurants. But our job creation goes way 
beyond the restaurants. Last year, we spent $1.25 billion for 
job-creating capital projects, media and advertising, supplier 
products and services, creating jobs in concentric circles 
emanating from our restaurants throughout our Nation's economy. 
When our ability to build new restaurants is impeded, we create 
few jobs.
    Our company and its franchisees, all of whom are small 
business owners, are facing ever-increasing regulatory burdens 
that make it more difficult to open and operate profitable 
businesses. I am very concerned that in coming years we will be 
unable to create as many jobs as we would like due to increased 
expenses caused by various regulatory statutes and the 
associated regulations, particularly by laws such as the 
Patient Protection and Affordable Care Act.
    An entrepreneur started our company in 1941 near where 
Congressman Waxman grew up, in South Central L.A. with $315 he 
used to purchase a hot dog cart. Even then, he faced a couple 
of regulatory challenges. Today, however, to assist in opening 
and operating our restaurants, we have an internal 11-page list 
of 57 different categories of regulations with which we must 
comply to open and operate a simple quick-service restaurant. 
This list alone can discourage job-creating restaurant 
development. The rapidity with which legislators and 
bureaucrats are increasing the number of regulations with which 
we must comply adds to the various challenges our company and 
our franchisees face.
    It is my hope to give you an understanding of some of the 
challenges we and our small business franchisees face every 
day. Two provisions of the PPACA serve to make the point. I 
will start with the menu-labeling provision that requires 
disclosure of the caloric content of our products on our menu 
boards. As a company, we support nutritional disclosure. As I 
described in my written testimony, for years we have had 
comprehensive, effective, and economical nutritional disclosure 
in our restaurants. The information is also easily accessible 
online at our Web site. If our company and franchise 
restaurants are forced to replace our menu board panels, we 
estimate it will cost approximately $1.5 million. To put this 
in context, that is 33 percent of the $4.5 million we invested 
last year on job-creating new restaurant construction.
    On an industry-wide basis, the FDA's regulatory analysis 
estimated that the initial mean cost of complying with the menu 
labeling regulations for chain restaurants would be $315.1 
million with an estimated ongoing cost of $44.2 million. Yet, 
as noted in my written testimony, independent research done to 
date demonstrates that caloric menu labeling has no impact on 
consumer eating habits. In other words, this may be a 
regulation that achieves little or nothing but will impose 
large, unnecessary costs, reducing both job creation and 
growth. Nutrition disclosure is important but it can be 
accomplished effectively and economically. The current law 
simply fails in each of these respects.
    In my written testimony, I suggest a compromise that would 
more efficiently and economically achieve the menu labeling 
law's objectives. I have a number of letters with me from 
Members of the House and the Senate, Republicans and Democrats, 
including Representative Gardner, who is with us today, and 
Senator Feinstein from my home State, expressing concern with 
the impact of the menu labeling law on the restaurant industry.
    I hope we can reach some accommodation on this law that 
will effectively and economically accomplish the law's 
objectives without imposing unnecessary costs and burdens. It 
can be done and we are willing to put in the time and effort to 
do so.
    Now, to debate the ACA's mandatory medical coverage 
provisions, I am not an expert on healthcare law other than to 
know how it impacts our company. I also know there are people 
who believe universal health insurance coverage is beneficial 
and I am not here to debate that. However, there is a sacrifice 
that must be made to gain benefits. The question is whether the 
costs are worth the benefits. The PPACA and associated 
regulatory framework will eliminate job creation and 
opportunity. The best estimate of our healthcare consultants, 
Mercer Health and Benefits, LLC, is that the PPACA will 
increase our healthcare costs by approximately $18 million per 
year should it be implemented as we currently understand the 
regulations. That is a 150 percent increase from the $12 
million we spent on healthcare last year and approximately four 
times the 4.5 million we spent on job creating new restaurants.
    At this point, we do not intend to drop coverage for our 
employees, but the money to comply with the PPACA has to come 
from somewhere. We use our revenues to pay our bills and 
expenses, to pay down our debt, and we reinvest what is left in 
our business. This is how we grow and create jobs. There is no 
corporate pot of gold we can go to to cover increased 
healthcare costs. New unit construction could cease if we have 
to allocate the monies for that construction to the PPACA, and 
building new restaurants is how we create jobs. We would also 
have to reduce our capital spending, and capital spending not 
only creates jobs but is important to maintaining and growing 
our business. We would need to reduce the number of our full-
time employees, increase the number of our part-time employees. 
We would need to automate positions where we could and reduce 
compensation for the positions we retain.
    Mr. Stearns. I need you to sum up. You are a little over.
    Mr. Puzder. Well, I would sum up by saying what the 
business community wants is not laissez-faire government. I 
understand completely that we need regulations to accomplish 
things that the private sector would not accomplish on its own, 
and I know that people consider the PPACA a very important 
piece of legislation and that nationalized health insurance is 
something that people want to pursue. What I am here to tell 
you today is, one, on the menu labeling, we can do it better 
and accomplish your objectives more efficiently than they are 
being accomplished now. If this is the path that we go down, it 
will eliminate job creation. It will reduce job creation and we 
will have to reduce it at our company.
    [The prepared statement of Mr. Puzder follows:]


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    Mr. Stearns. I thank you.
    Ms. Walz, you are recognized for 5 minutes.

                   TESTIMONY OF BARBARA WALZ

    Ms. Walz. Thank you. Chairman Stearns, Ranking Member 
DeGette, and members of the subcommittee, my name is Barbara 
Walz and I am the senior vice president for Policy and 
Environmental at Tri-State Generation and Transmission 
Association. I appreciate the opportunity to testify before you 
here today on Tri-State's views of the regulatory climate.
    Tri-State is a not-for-profit consumer-owned electric 
cooperative based in Westminster, Colorado. Our mission is to 
provide reliable, cost-based wholesale electricity to our 44 
not-for-profit member systems that serve 1.5 million rural 
consumers in Wyoming, Nebraska, New Mexico, and Colorado. Tri-
State generates or purchases power from hydropower, solar, 
wind, coal, and natural gas. In 2010, we integrated 50 
megawatts of wind and 30 megawatts of solar into our generation 
mix. At that time, the solar facility we built was the largest 
photovoltaic system in the world. The bulk of our power needs 
to come from coal-based power plants in Wyoming, Colorado, 
Arizona, and New Mexico. These plants have become an important 
part of the communities in which they reside. For example, the 
Craig Power Plant in Western Colorado and the coalmines from 
which the company gets its coal employs 750 employees and 
provides $73 million in wages and benefits.
    Tri-State's generating facilities all have state-of-the-art 
emission controls and yet, even with these advanced emission 
controls, we are struggling with regulatory uncertainty and 
regulatory stringency from EPA regulations. Regional Haze, the 
Utility MACT rule, and Coal Ash are three of the examples of 
new regulations we are facing. Under the Regional Haze Program, 
States are provided the authority to make decisions about how 
much visibility improvement is reasonable and the controls 
needed to improve visibility.
    In Colorado, the Air Quality Control Commission unanimously 
adopted the State Implementation Plan, or SIP. This SIP is 
unique. It has unanimous support from the State, from 
environmental groups, and from industry. This SIP has 
subsequently been supported by the Democratic governor, the 
Republican speaker of the State House, as well as Senators Mark 
Udall, Bennet, Ranking Member DeGette, Congressman Gardner, and 
the rest of the Colorado House Delegation. Yet even with this 
bipartisan and cross-spectrum support, there is significant 
uncertainty as to whether EPA will approve Colorado's SIP. EPA 
has not been approving surrounding States' SIPs and instead, 
they have issued FIPs, or Federal Implementation Plans, that 
are more stringent. So we are uncertain, as of today, what our 
Regional Haze costs will be.
    Another issue of regulatory uncertainty that we face is 
EPA's pending decision on coal ash. Tri-State manages coal ash 
in a dry form in accordance with stringent State laws. Under 
the Clinton administration, EPA made a regulatory determination 
that Coal Ash is not a hazardous waste, and yet EPA has 
recently recanted this determination and has proposed 
designating coal ash as hazardous. The comment period for this 
rulemaking closed in 2010 but EPA said they won't make a final 
decision until 2013. During this reversal of decision by EPA, 
28 States, including Colorado, have sent letters to EPA stating 
that programs that they have established under State law are 
sufficient to protect public health and the environment.
    A second concern that Tri-State has is the manner in which 
EPA is stringently interpreting its rulemakings. The Utility 
MACT is an example of this stringent approach. Under this rule, 
EPA was supposed to develop a standard based on the performance 
of existing units, but what they did was cherry-pick the lowest 
emissions of pollutants from a variety of sources from across 
the country and the standard does not represent the performance 
of a single unit in the United States. Some have referred to 
this facility as ``Franken-MACT.'' For new coal units, the 
emission limits in the MACT Rule are so stringent that 
technology vendors have told EPA that they cannot design 
equipment to meet these stringent standards. This rule 
essentially prohibits building new coal plants in the United 
States and coal is our lowest-cost source of energy that Tri-
State provides.
    As a not-for-profit cooperative, any costs associated with 
complying with EPA regulations is passed onto the end users of 
electricity in the form of higher electricity bills. Tri-State 
provides electricity to rural farms, ranches, and businesses 
and our service territory includes some of the poorest counties 
in the country. These folks cannot afford these ever-increasing 
costs.
    Tri-State urges the committee to exercise continued 
oversight over EPA's regulatory activities to help us meet our 
mission of providing affordable and reliable electricity.
    I would like to thank Ranking Member DeGette and 
Congressman Gardner for their recent support on both Regional 
Haze and Coal Ash issues. Thank you.
    [The prepared statement of Ms. Walz follows:]


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    Mr. Stearns. I thank the gentlelady.
    Mr. Shoop, for 5 minutes we recognize you.

                   TESTIMONY OF KIMBER SHOOP

    Mr. Shoop. My name is Kimber Shoop. I am senior counsel at 
Oklahoma Gas and Electric Company. We appreciate the 
opportunity to come before you today to provide our view of the 
regulatory climate in the aftermath of President Obama's 
Executive Order 13563.
    OG&E serves approximately 790,000 customers in 268 
communities in Oklahoma and Western Arkansas. While we are the 
largest electric utility in Oklahoma, OG&E is considered a 
medium- to small-sized investor-owned utility and lacks the 
resources possessed by many of the much larger utilities in the 
industry. Nonetheless, OG&E's commitment to customers and its 
innovative thinking has been duly recognized by significant 
industry observers. In 2011, OG&E was named best in class for 
customer satisfaction by JD Power and Associates, and I am also 
very proud to report that OG&E was named 2011 utility of the 
year in North America by Electric Light and Power Magazine.
    OG&E has set a goal of reaching the year 2020 without 
adding any new fossil fuel generation by focusing on energy 
efficiency, demand response, smart grid, renewable wind power, 
and building new transmission. The recent suite of EPA rules 
under the Clean Air Act constitutes a serious challenge to 
OG&E's efforts because they effectively force OG&E to make 
immediate or very near-term high-stakes choices regarding its 
generation fleet.
    With regard to meeting SO2 emission limits alone, OG&E will 
be forced to choose whether to install scrubber technology on 
its coal plants, which could cost over a billion dollars, or 
discontinue coal generation from units that still have much 
life in them and move closer to a primarily all natural gas 
fleet. Each of these options alone is extremely expensive for 
OG&E and ultimately our customers. We determined that either 
option would lead to the largest rate increase in our company's 
history.
    Other EPA rules are further complicating the decision by 
creating new emission limits for NOx, acid gases, particulate 
matter, and mercury. The President's executive order should 
have a welcome, therapeutic impact in improving our ability to 
meet in a more reasonable, cost-effective manner legitimate 
environmental objectives that Oklahomans and Americans in 
general generally desire. But OG&E does not see EPA 
successfully balancing the executive order's laudable 
objectives of protecting public health and safety and 
environmental quality on the one hand with promotion of 
economic growth, innovation, competitiveness and job creation.
    OG&E does not see EPA sufficiently improving its processes 
by using the best available science or by truly being 
interested in allowing for meaningful public participation in 
an open exchange of ideas as called for in the executive order. 
OG&E most certainly does not see EPA's regulatory approach as 
promoting predictability and reducing uncertainty, and OG&E 
does not find that EPA has taken into sufficient consideration 
comparative benefits and costs of its regulations.
    For example, OG&E worked with various State interests in 
the DEQ and Oklahoma to craft a State compliance plan for the 
EPA's Regional Haze Rule. This flexible Oklahoma solution 
provided optionality to OG&E, minimized the impact on customers 
in the State economy, and retained increased natural gas use as 
an alternative. Most importantly, this solution met the 
visibility improvement goals of the Regional Haze Rule. 
Unfortunately, the EPA rejected this reasonable approach and 
stuck to its rigid position with regards to scrubbers or 
conversion to gas within 5 years.
    OG&E does not view the EPA's rejection of Oklahoma's 
regional haze SIP as being consistent with the executive 
order's stated goal of achieving environmental results on a 
more cost-effective or creative basis. The overlay of regional 
haze mandates with potentially different technology demands and 
unsynchronized compliance schedules for such items as U-MACT, 
CSAPR, and the soon-to-be-seen greenhouse gas regulations 
magnify our unpredictability problem significantly.
    The strict and unpredictable timetables could also affect 
the reliability of service for OG&E and the other members of 
our regional grid. A mandate to invest over a billion dollars 
would make it difficult for OG&E to continue focusing on things 
like wind energy, energy efficiency, demand-side management, 
and will make it more difficult to invest in the base-level 
commitments for maintaining and operating our business. If we 
can achieve the same desired environmental results at a lower 
cost, which we think is the President's laudable intention 
underlying the executive order, we believe we have an 
obligation to do so.
    For us to make intelligent capital investment decisions, we 
need to treat all of the new EPA rules holistically to create a 
coordinated, rational plan for selecting compliance strategies 
from the range of options in a way that makes sense to our 
State economies, our ratepayers, and the environment. We would 
hope that the result of the hearing today would be for the 
subcommittee to work together on a bipartisan basis to see the 
objectives of President Obama's executive order become 
elemental drivers of all that EPA does.
    Thank you.
    [The prepared statement of Mr. Shoop follows:]


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    Mr. Stearns. I thank the gentleman.
    Mr. Luoto, welcome, for 5 minutes.

                  TESTIMONY OF ROBERT A. LUOTO

    Mr. Luoto. Chairman Stearns, distinguished members of the 
Subcommittee on Oversight and Investigations, my name is Bob 
Luoto, and I am a third-generation lifelong professional 
logger. My wife Betsy, son Kirk, and I own and operate Cross 
and Crown, which is based out of Carlton, Oregon. During my 
almost 38 years as a professional logger, I have proudly served 
as a president and board member of both the Associated Oregon 
Loggers and the American Loggers Council. The Associated Oregon 
Loggers has named me Logger of the Year and my wife Betsy was 
named Woman of the Year for community and philanthropic 
leadership. Currently, I serve as board chairman for the 
Sustainable Forestry Initiative.
    I consider myself very blessed to have the opportunity to 
share with you personal thoughts on the enormous, increasing 
uncertainty created by our regulatory system. Despite the 
stated intent of Executive Order 13563, it is contributing to 
the collapse of the professional logging community in the 
United States.
    Our Nation's forest wealth supports, among other things, an 
industry critical to both our national economy, as well as 
hundreds of rural communities like the one I call home in 
Western Oregon. The forestry sector in the United States is the 
world's largest, supporting almost 1.1 million full-time jobs 
and generating over $108 billion to our national economy 
annually.
    I am so proud of my family's history and business to 
contribute to the world's greatest forestry country. Currently, 
we employ 40 men and women and have an annual payroll of almost 
$1.5 million, which includes comprehensive health benefits, 
retirement 401K, and vacation pay. We have two trained 
foresters on staff and all our employees have been trained in 
Best Management Practices by the Oregon Professional Loggers 
Master Logger Program, which was created to satisfy the strict 
environmental standards set by the Sustainable Forestry 
Initiative.
    However, as we look closer at the forestry sector, we see 
that the most critical component, the men and women who 
actually harvest and transport the wood to be used by the woods 
products industry may soon be lost forever. From 2001 to 2011, 
the United States logging workforce has declined from 73,500 to 
48,400, a loss of almost 25,000 or 35 percent. Further, the 
logging workforce has lost jobs each and every year between 
2001 and 2011.
    My home State of Oregon has suffered greatly as well. From 
2001 to 2010 we have also lost 33 percent of our logging jobs. 
Our company has had to lay off 10 people at the beginning of 
2008 and only recently have we been able to hire some back. 
However, we have been having trouble hiring young men and 
women, even those from families of professional loggers because 
they are choosing not to enter or reenter our profession in 
light of the legitimate concern for the future of the industry. 
We see clear proof of this in recent significant aging of the 
logging workforce. In 2001, for instance, the average workforce 
was 40 years and a half; in 2010, it is 46 years old.
    When we think of all the causes of the collapse of the 
professional loggers in the United States, the one that I feel 
tremendously, the volatility that is created by the regulatory 
system, is one of the most significant. You need to look no 
further than the tremendous uncertainty created for 
professional loggers from the recent 9th Circuit Court of 
Appeals decision that invalidated the EPA's Silvicultural Rule. 
This rule, which has been in effect for almost as long as I 
have been a logger, excludes silvicultural activities such as 
construction of logging roads from certain permitting 
requirements under the Clean Water Act. The EPA adopted this 
exclusion because professional loggers like me are trained to 
use best management practices and otherwise comply with State 
regulations and the Clean Water Act and prevent water 
pollution.
    Since the construction of logging roads is essential to 
most loggers' businesses, many are concerned about what form 
and cost this completely new permitting requirement will be, as 
well as how this may otherwise affect us and allow other people 
to try to interfere with our businesses. If we can't build 
roads, our logging operations will come to a halt and eliminate 
not only our company and jobs but the companies that rely on us 
for our business.
    As I read Executive Order 13563, I feel the EPA has been 
ordered to quickly resolve the uncertainty created by the 
invalidation of the Silvicultural Rule. So Executive Order 
13563 states, ``some sectors and industries face a significant 
number of regulatory requirements, some of which may be 
redundant and consistent or overlapping.'' In light of this 
instruction, the EPA should be working with Congress today to 
pass the Silvicultural Regulatory Consistency Act, H.R. 2541, 
and amend the Clean Water Act to explicitly permit the long-
standing Silvicultural Rule.
    And I would like to thank Representative Sue Myrick and 
Mike Ross, esteemed members of this subcommittee, for their 
sponsorship of this Act. Make no mistake, the invalidation of 
the Silvicultural Rule is only one of the many sources of 
regulatory uncertainty facing our professional loggers. Further 
sources of regulatory uncertainty could be how the EPA will 
treat bioenergy from woody biomass for the purpose of 
greenhouse gas emissions. In addition, there is no end in sight 
to the litigation of our national forests in our State, which 
has had a huge impact on my home State of Oregon. Oregon is 
made up over 55 percent National Forest land and we cannot 
reasonably even use these to help our lives in our communities. 
Many Oregon counties are now facing enormous budget shortfalls, 
increased poverty, and related social problems, and this has 
taken a toll not only on the professional loggers and the 
forestry sector but on our most important resource, our 
children.
    In conclusion, I would like to make it very clear that I 
agree with the core principles of 13563, but in order for this 
regulatory system to meet all of these goals, the system must 
emphasize long-term certainty. That is very crucial to this 
whole thing.
    On behalf of my wife Betsy, my son Kirk, my daughter 
Marisa, my daughter-in-law Jenna, son-in-law Jesse, and my 
grandchildren Liam, Finn, Landon, and Lydia, I would like to 
thank you for hearing--I got them all in there----
    Mr. Stearns. I think you did.
    Mr. Luoto [continuing]. Bit of a mouthful--I will take 
questions later on. Thank you.
    [The prepared statement of Mr. Luoto follows:]


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    Mr. Stearns. I think you forgot your dog.
    Mr. Luoto. I did. Yes. But I will get it in there later.
    Mr. Stearns. Dr. Mitchell, we want to recognize you and 
welcome you for your 5 minutes.

                 TESTIMONY OF MARK A. MITCHELL

    Mr. Mitchell. Thank you. Good morning, Chairman Stearns and 
Ranking Member DeGette and members of the subcommittee. My name 
is Dr. Mark Mitchell and I am a public health physician and I 
focus on environmental health, and I am also co-chair of the 
Environmental Health Task Force of the National Medical 
Association, which is representing over 40,000 African American 
physicians and their patients. I am here to testify about the 
need for strong regulation to protect the public health and the 
health of workers, as well as to maintain public confidence in 
the safety of business and the abilities of government to 
protect the U.S. residents.
    I was previously the director of the Hartford, Connecticut, 
Health Department, and in that capacity, it became apparent to 
me that although the public health was generally improving, 
there were certain diseases and conditions that were increasing 
in frequency. Those conditions are things such as asthma, 
cancer, learning disability, obesity, and diabetes. I also 
noticed that the conditions are more likely to be caused by 
environmental factors and could lead to a larger part of the 
American population suffering major disabilities and premature 
death if these trends continue. This is even more important in 
African American, Latino, and low-income communities where 
there are greater hazardous environmental exposures, as well as 
greater health disparities. These environmental risk factors 
can only be reduced through local, State, national and 
international environmental regulations.
    Although environmental regulation is so important, the only 
group that I was hearing from when I was health director about 
environmental regulation was the regulated community 
complaining about too much regulation when it was apparent to 
me that the regulations support business by protecting their 
credibility and that there is not enough regulation to protect 
environmental health. I want to make sure that when people walk 
into a restaurant that they feel safe eating in that 
restaurant, that they don't expect that they are going to get 
sick from eating in that restaurant, for example.
    When I talked to people in my community, they assumed that 
government would automatically have their interest in mind and 
would act in the best interest of the public to protect them. I 
could see that this was not always the case. This realization 
persuaded me to focus my career on environmental health and 
environmental justice issues as an advocate for the public. 
When I talk to other physicians both within and outside the 
National Medical Association about environmental health, they 
are often very concerned. They usually recognize the 
significant morbidity and mortality that they are seeing in 
their patients due to hazardous environmental exposures. And as 
they learned more about the environment and about environmental 
regulations, they become even more concerned for the health of 
their patients.
    I was previously on a U.S. Food and Drug Administration 
advisory panel on blood and blood products, and there I was 
surprised at the number of foreign companies that wanted their 
products approved by the FDA, even though they were not looking 
to sell those products in the United States. This is because of 
the FDA's reputation for protecting health. I was told that 
they could use their FDA approval as a guarantee to potential 
customers that their products are safe and effective. This is 
why regulation can be good for business and good for the 
public.
    I am also aware about products such as DES, or 
diethylstilbestrol, that were not approved by the FDA and that 
went on to cause major disability in other countries where it 
was approved. Generations of Americans were protected by the 
FDA's prevention of this drug from coming to market and causing 
this disability. Yes, it is true that regulations need to be 
updated from time to time to keep up with changing needs, 
including changing products, technologies, and lifestyles. 
Ineffective regulations need to be dropped, effective 
regulations need to be modified, and new regulations need to be 
developed to meet the new situation. Changes in regulations 
take time, often longer than 1 year.
    Many businesses see the benefits of regulation and do not 
see regulation as overly intrusive on business. I work to get 
health protection regulations, such as chemical policy reform, 
developed on a State and national level. When I speak to 
businesses large and small about regulation, they are more 
often concerned about regulatory certainty and predictability 
than about the burden of meeting regulations.
    The question that we were asked to answer as part of this 
panel was about what businesses have seen in the past year with 
regard to the regulatory change, and regulations actually 
take--there is a slow and deliberative process to dismantling 
regulations, which is the same process as creating regulations, 
so I would not expect to see much of a change within a 1-year 
period.
    In conclusion, physicians are becoming more and more 
concerned about the effect of environmental exposure on health. 
The National Medical Association believes that our country 
needs to have strong health protective regulations on the 
local, State, and Federal levels. Strong regulations can keep 
the workforce healthy and productive, as well as keep 
healthcare costs lower. This is good for business, good for the 
workers, and good for America.
    Thank you for the opportunity to speak, Mr. Chairman, and I 
am available to answer questions after the panel is finished.
    [The prepared statement of Mr. Mitchell follows:]


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    Mr. Stearns. I thank you, Dr. Mitchell.
    Mr. Williams, you are recognized for 5 minutes.

                  TESTIMONY OF HOWARD WILLIAMS

    Mr. Williams. Thank you, Chairman Stearns and 
Representative DeGette, especially thank you to the minority 
for courageously inviting an unrepentant conservative 
Republican to testify.
    Economic uncertainty is not the primary deterrent to growth 
and development in today's business. I will repeat two comments 
that Representative DeGette made this morning in her opening 
remarks from the Sustainable Business Council. Weak demand is 
business owners' biggest problem. Small business owners see 
regulations as a necessary part of a modern economy so long as 
they are fair and reasonable.
    I manage a division of an American-owned small 
multinational corporation. The division that I manage is $110 
million per year, 450 people, and we make and develop 
architectural building products. And clearly, these last 3 
years have been the most difficult years and the most uncertain 
years from an economic standpoint. And while we are not 
oblivious to regulation, regulation has not for a moment 
stalled or stopped our capital expenditures, our market and new 
product developments. After a flat year in 2009, 2010 as well 
as 2011 rebounded with double-digit year-over-year growth. And 
in the construction sector, that growth was not mirrored by any 
other segment within the construction sector.
    Our rate of annual growth is promising and we in a thriving 
and free market economy recognize it is that thriving free 
market economy that self-regulates demand, supply, and price, 
but it does not uniformly or equitably self-regulate health, 
safety, and the environment. Entrepreneurs are free to invest, 
to win or lose their investments, but in the areas of health, 
safety, and the environment, do we have the right to invest 
what is not solely ours to risk? We debate who will pay for the 
healthcare, and again, we are not oblivious as a business to 
where that intersection is rapidly looming. But failing to 
address substantiated causation, we continue to amass an 
environmental and health debt that will be as burdensome to the 
future as our current economic debt is to the present. These 
are debts that only business can pay because only business 
generates capital.
    Increasingly, the causes of cancer, diseases such as 
autism, Parkinson's, and other illnesses are being linked to 
chemicals of concern and yet we struggle to reform decades-old 
regulation. In the absence of TSCA reform, business costs are 
rising, not because of Federal regulation, but for lack of it. 
States are enacting their own chemical regulations, businesses 
are requiring environmental declarations revealing chemical 
makeup of products and materials, and businesses are 
individually investing in meeting consumer and business-to-
business needs. A Federally harmonized chemical regulation will 
set and control the health and safety aspects while making 
business information available.
    Reduced economic regulation removes uncertainty and 
encourages the free market to invest and grow. With freedom 
comes the responsibility to conduct business in ways that 
create and sustain a durable economy. It is in business' self-
interest to do that. However, in the areas of health, safety, 
and the natural environment, the invisible hand of the free 
market does not naturally yield to the good of the whole.
    We conservatives will readily hold up Atlas Shrugged and we 
will point at Washington and say overreaching, overreaching, 
overreaching, but ultimately, the storyline in that book is as 
much about business and creating or condemning adverse, self-
serving business interests as it is the overreach in the 
government.
    We have invested in the research and the capital equipment 
necessary to remove chemicals of concern from our products. 
Much of our recent growth is directly attributable to that 
work, to those investments, and to that research. Such 
investment would almost argue against regulation but 
differentiation by regulation is not an acceptable business 
practice. We have no right to gain at the risk of the health, 
safety, and environment of either the present or the future. A 
strong America is strong economically, physically, and 
militarily. Regulations are not generally associated in that 
context, but in the areas of health, safety, and the natural 
environment, two of the three will stand or fall and 
responsible regulation helps to ensure that they stand.
    Thank you.
    [The prepared statement of Mr. Williams follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Stearns. I thank you. And I will start with my first 
questions.
    Mr. Williams, you actually believe that economic 
uncertainty is totally divorced from regulatory uncertainty? 
Yes or no?
    Mr. Williams. No.
    Mr. Stearns. OK. Because, you know, if you are a business 
and you are operating a Hardee's and you hear there is a huge 
amount of regulation, the first thing you do as an owner, 
operator, or franchisee, you say hold it, I don't want to 
invest anymore capital until I understand what the regulatory 
environment is. And you sort of indicated in your opening 
statement that economic uncertainty is not tied to regulatory 
uncertainty. And so that is just my observation.
    Let me go to Mr. Luoto. You have made a very passionate 
opening statement. I was just struck by the fact that you said 
that there was a 33 percent decline in your business and 
obviously you are one of the persons who said when the 
President did his op-ed and he talked about his Executive Order 
13563, you would say there was a genuine problem out there.
    Mr. Luoto. Yes, it is obvious in what has happened to our 
industry. We have had litigation on National Forest, we have 
had litigation now on our Clean Water Act and the EPA has by 
the 9th Circuit. So that has really given us a huge 
uncertainty.
    Mr. Stearns. Certainly, that impact from EPA, doesn't that 
create an economic uncertainty in your mind?
    Mr. Luoto. Yes.
    Mr. Stearns. Yes. Ms. Walz, do you feel that the 
impressions you got based upon this Executive Order 13563 that 
the President issued, did he truly understand the impacts of 
the regulatory climate on the private sector, including small 
businesses?
    Ms. Walz. I am not certain if he understood at that time of 
writing it, I guess, but I would say I that I have not seen any 
progress----
    Mr. Stearns. Right.
    Ms. Walz [continuing]. That it has actually accelerated. We 
are seeing more regulation at a faster pace.
    Mr. Stearns. Mr. Luoto, do you get the impression on these 
regulations in your businesses that these regulations--do you 
feel that they are evaluated in terms of an economic impact or 
are they just not solution-oriented but sort of almost 
adversarial? What is your feeling?
    Mr. Luoto. You know, they are not solution-orientated 
really because, you know, litigation just stops everything. So 
there is no solution other than courts and litigation. So when 
we end up with that, we have no certainty. And to me, you know, 
we have got to have more certainty in our industry. That is why 
we are losing our people, we are losing jobs, and in Oregon 
especially with the National Forest, that has been a bone of 
contention for, you know, 25, 30 years that we have been going 
back and forth on.
    Mr. Stearns. So bottom line, this regulatory climate you 
have talked about has made it very difficult to preserve 
existing jobs?
    Mr. Luoto. It has. It is----
    Mr. Stearns. Yes. And Ms. Walz, my question to you is since 
this last executive order, do you perceive a net improvement in 
the general regulatory climate facing your business or your 
industry more broadly?
    Ms. Walz. I do not see a net improvement. Regulations are 
coming out faster and more furiously.
    Mr. Stearns. OK. Mr. Puzder, a question for you. Do you 
think the Federal or State regulators generally think about 
ways in which they can render old or non-cost-effective rules 
less burdensome? Does that ever occur on their mind? Removing 
them from books before they come out with new regulations? That 
is, do they go backwards and look at what is on the books 
already before they ask for new ones?
    Mr. Puzder. We certainly haven't seen any evidence of that. 
As I said, we had that 11-page, single-spaced, 57 categories of 
regulatory issues we have to comply with when we build or 
operate a fast food restaurant. And that list doesn't get 
shorter; it just seems to get longer.
    Mr. Stearns. You make it clear that you are not an opponent 
of Federal regulations. In fact, you write that ``I believe 
that our country needs government regulations to advance a 
number of social goals which the unfettered market will not 
accomplish on its own.'' What is it, then, in your view that 
causes certain regulations to go bad?
    Mr. Puzder. I think what happens is when your job is to 
create regulations to enforce a statute that Congress has 
enacted, people do so with great vigor. And I would say the 
vigor over the past few years has been phenomenal. We are 
seeing very, very aggressive regulation where I wish we just 
had a little more communication with the business community. 
And you can't always communicate with the associations that 
represent the businesses because, for example, the National 
Restaurant Association in our case represents a number of 
different kinds of restaurants from Morton's Steakhouse to Taco 
Bell to Carl's Jr. and Hardee's, and the concerns of each of 
those segments is different. So if you don't talk to people 
actually from the businesses--and I realize that there is maybe 
some resistance to people coming in here and complaining, which 
is why I tried not to complain. I mean, but there are issues 
and we think we can actually contribute to more sensible, 
efficient regulations and a regulatory structure that will 
accomplish the goals Congress wants to accomplish without 
damaging the business. You know, don't treat us as the enemy. 
We want to help and we are here to help.
    Mr. Stearns. We had a hearing on Obamacare and the waivers 
that occur and McDonald's got a waiver, Waffle House got a 
waiver. Did Hardee's apply for a waiver?
    Mr. Puzder. We got a waiver with respect to what are called 
Mini-Med plans. These are the same things that McDonald's and 
these other--and really everybody had to get those because if 
retailers didn't get those, then part-time employees or low-
level full-time employees would have had no insurance coverage.
    Mr. Stearns. I guess specifically your restaurants, how 
many employees of the CKE restaurants currently receive 
Obamacare waivers on the law annual limits requirement?
    Mr. Puzder. Well, all of the employees--we have 21,000 
company employees. All of the restaurant-level employees who do 
not have a company-covered plan would be covered by that 
waiver. They would have the Mini-Med plan----
    Mr. Stearns. And if they didn't have that waiver----
    Mr. Puzder. --and that number is 1,100 currently enrolled 
in those plans.
    Mr. Stearns. And what would happen if you didn't have that 
waiver? What would happen?
    Mr. Puzder. Well, the insurance would go away. The 
insurance companies wouldn't issue those policies. They have 
annual caps so there----
    Mr. Stearns. So wouldn't the law, Obamacare, raise the cost 
of healthcare for you?
    Mr. Puzder. It will raise it by 150 percent is the best 
estimate.
    Mr. Stearns. So when the waivers run out, you are going to 
face a serious problem?
    Mr. Puzder. We are going to have to figure out a way to 
deal with a 150 percent increase and a very substantial cost.
    Mr. Stearns. I thank you. My time has expired.
    Ms. DeGette. Well, let me ask you a question, Mr. Puzder. 
Before the Affordable Healthcare Act was enacted by Congress, 
did you offer health insurance to your employees?
    Mr. Puzder. We offer health insurance to all of our 
employees. At the lower level it is employee-paid. It is the 
Mini-Med plans----
    Ms. DeGette. Right, so----
    Mr. Puzder [continuing]. Which are, I know, $38 a month.
    Ms. DeGette. Yes, those are like the part-time employees 
and people like that.
    Mr. Puzder. Part-time and we cover 60 percent----
    Ms. DeGette. I am sorry. I only have 5 minutes. So for your 
lower-paid employees, what is the average amount that they make 
every year?
    Mr. Puzder. I do not know what the average amount of our 
lower-level----
    Ms. DeGette. Well, what is the hourly rate? Do you have any 
idea?
    Mr. Puzder. I can tell you how many get the minimum wage. 
It is a small percentage----
    Ms. DeGette. OK, but they are the lower-paid employees. Do 
you have any idea how much those insurance policies were 
costing for those people?
    Mr. Puzder. Well, most of them don't get those policies.
    Ms. DeGette. Right. So how did they pay----
    Mr. Puzder. They go to the emergency room.
    Ms. DeGette. Yes, they go to the emergency room. And there 
were 37 million Americans like that. So all of us were paying 
for those 37 million Americans, including your employees, to go 
the emergency room. That is why we passed the bill.
    Mr. Puzder. That is right.
    Ms. DeGette. And I want to say that I really admire what 
your company has done with the nutrition information. I was 
looking at that and I think that is--because you did that 
voluntarily, right?
    Mr. Puzder. Yes.
    Ms. DeGette. And there is these new regulations that are 
pending right now which would require any fast food business 
over a certain number of employees to post something similar to 
what you guys have been doing for years, right?
    Mr. Puzder. No.
    Ms. DeGette. OK. What is it then?
    Mr. Puzder. You know what the menu board is when you walk 
in a fast food restaurant?
    Ms. DeGette. Right, yes.
    Mr. Puzder. They are requiring that you put the caloric--we 
have to redo all the menu boards----
    Ms. DeGette. Right.
    Mr. Puzder [continuing]. To put the----
    Ms. DeGette. No, no, I understand that but----
    Mr. Puzder. None of this other stuff is required.
    Ms. DeGette. Right. What I am saying is they are requiring 
other people to post the caloric information like you have been 
doing voluntarily in your own way for years.
    Mr. Puzder. Yes.
    Ms. DeGette. That is only part of what you have been doing. 
I understand.
    Mr. Puzder. Right.
    Ms. DeGette. So did you know that the National Restaurant 
Association actually supports that regulation? Because before 
there was a patchwork of 50 State regulations that people had 
to comply with, yes or no?
    Mr. Puzder. I guess----
    Ms. DeGette. Yes or no? Did you know the National 
Restaurant Association supports that?
    Mr. Puzder. Yes.
    Ms. DeGette. OK. I happen to think--and I would be happy to 
work with you--if there is a business like yours that is 
actually doing this plus more, they should be able to get a 
waiver from that regulation. But there is something to be said 
for not making people comply with a patchwork of 50 State 
regulations.
    Mr. Puzder. No, that is absolutely right.
    Ms. DeGette. Good, thank you.
    Mr. Puzder. And actually doing this is much cheaper than 
what the law requires so----
    Ms. DeGette. Right.
    Mr. Puzder [continuing]. Restaurants should be----
    Ms. DeGette. Right, but I think if you are doing a good 
job, you should be able to get a waiver and I comply with that.
    Now, Ms. Walz, I want to ask you because you and I have 
actually talked about these issues before. With respect to 
these environmental regulations--the Regional Haze, the Utility 
MACT, the Coal Ash, all that--your main problem is you want to 
know what are the rules and how are you going to comply with 
them? And the uncertainty is a big part of what your problem is 
right now, isn't it?
    Ms. Walz. That is correct.
    Ms. DeGette. I mean you have applied for the state SIP. We 
all support it. You haven't heard. That gives uncertainty, your 
business, right?
    Ms. Walz. Yes.
    Ms. DeGette. And Mr. Shoop, that is part of your problem, 
too, uncertainty in regulation, right? And Mr. Luoto, you, too? 
You don't know what the regulations are going to be and that 
gives you uncertainty in making your business plan, right?
    Mr. Luoto. Yes.
    Ms. DeGette. And Mr. Williams, when you do your business 
plan, you factor in the cost of those regulations to doing 
business, right?
    Mr. Williams. Yes.
    Ms. DeGette. OK. So I want to ask you, Mr. Shoop, you don't 
think that we should get rid of the environmental laws, do you?
    Mr. Shoop. Oh, absolutely not.
    Ms. DeGette. No. And you don't think so, Ms. Walz, do you?
    Ms. Walz. No, I don't think so.
    Ms. DeGette. I mean the Clean Air Act, for example, that 
provides a good public benefit, right? And--yes, Ms. Walz, I am 
sorry.
    Ms. Walz. Yes, it does provide public----
    Ms. DeGette. And Tri-State has been complying with the 
Clean Air Act for decades.
    Ms. Walz. Correct.
    Ms. DeGette. So what you need to have is regulations that 
make sense and that are certain and that are not overly 
burdensome, right?
    Ms. Walz. Correct.
    Ms. DeGette. And you feel the same way, right, Mr. Shoop?
    Mr. Shoop. Yes.
    Ms. DeGette. And Mr. Luoto, I assume you feel the same way, 
too? You don't think we should get rid of the Clean Water Act?
    Mr. Luoto. No.
    Ms. DeGette. OK, good. So, see, we can find some agreement, 
Mr. Chairman. I just want to point one thing out in my 
remaining 19 seconds--two things. Number one, the President's 
executive order, which was roughly 1 year ago, supplemented and 
reaffirmed the principles of regulatory review established 
under Executive Order 12866. ``Agencies have to propose or 
adopt regulations only when benefits justify costs, impose the 
least burden on society considering the cost of cumulative 
regulations, maximize net benefits, and select inter-regulatory 
approach, specify performance objectives, and identify and 
assess available alternatives to direct regulation.'' Now, you 
don't disagree with that, do you, Mr. Puzder?
    Mr. Puzder. Not at all.
    Ms. DeGette. And Ms. Walz? Yes or no? Do you disagree with 
those goals?
    Ms. Walz. No.
    Ms. DeGette. Mr. Shoop?
    Mr. Shoop. No.
    Ms. DeGette. Mr. Luoto?
    Mr. Luoto. Agreed goals.
    Ms. DeGette. Dr. Mitchell?
    Dr. Mitchell. Yes, I agree.
    Ms. DeGette. And Mr. Williams?
    Mr. Williams. I agree.
    Ms. DeGette. OK. Just one last thing, Mr. Chairman. I just 
want to point out for the record that there were fewer 
regulations issued by executive agencies for the first 3 years 
of this administration than from the first 3 years of the 
previous administration. And if there are regulations that are 
giving uncertainty or that are not tailored for their specific 
purpose, we all want to work together to fix those regulations. 
The wholesale elimination of the Clean Air Act or the Safe 
Drinking Water Act or environmental regulations or food safety, 
that is not the way to go about this.
    And once again, for the eighth time, I hold out my hand to 
say let us work together on this because overly burdensome 
regulations are not in anybody's best interest.
    Mr. Stearns. I thank the gentlelady and we recognize Mr. 
Terry.
    Mr. Terry. Thank you. And Ms. Walz, has Tri-State complied 
with the Clean Water Act and the Clean Air Act?
    Ms. Walz. Yes.
    Mr. Terry. All right. So what we are talking about here in 
regulations are new proposed regulations, not whether or not 
you have complied with the last?
    Ms. Walz. That is true.
    Mr. Terry. And in your testimony you mentioned a couple. 
You mentioned Utili-MACT and Fly Ash. Those directly affect 
your ability to produce energy, correct?
    Ms. Walz. Correct.
    Mr. Terry. All right. Are there other like Boiler MACT that 
also impact your business?
    Ms. Walz. Yes, there is a long list of regulations, yes.
    Mr. Terry. So the issue is despite that there are some 
overall number that is similar to the number of regulations 
issued from one administration to the other, your industry is 
dealing with multiple ones at one time, correct?
    Ms. Walz. Yes.
    Mr. Terry. And what happens to the additional costs that 
are incurred to comply with the new rules?
    Ms. Walz. Those are passed directly on to the end users of 
electricity because we are a not-for-profit entity.
    Mr. Terry. So those costs are passed on.
    Ms. Walz. Right.
    Mr. Terry. Have you at least looked at Utili-MACT? At least 
with our utilities in Nebraska, they have to deal with CSAPR, 
Boiler MACT, Fly Ash, and Utili-MACT. The one that they think 
will be the most costly is Utili-MACT. Have you been able to 
determine what the cost per plant to comply with Utili-MACT?
    Ms. Walz. It varies from plant to plant. I would say----
    Mr. Terry. Sure.
    Ms. Walz [continuing]. The most expensive rule we are 
facing right now is Regional Haze.
    Mr. Terry. OK.
    Ms. Walz. However, there is a pancaking of these rules and 
you really look at MACT costs, add on what Regional Haze costs, 
add on what the new water effluent standards cost, add on what 
the Coal Ash costs, add on what the Boiler Rule costs, and this 
is an increasing cost over time. Quite honestly, it forces you 
to look at what point will you shut that facility down.
    Mr. Terry. Is that something that you are actually thinking 
about, that you may have to shut down a facility?
    Ms. Walz. We are looking at the economics of each of these 
rules and they have a potential, yes, to shut down existing 
plants.
    Mr. Terry. When combined.
    Ms. Walz. Correct.
    Mr. Terry. Getting back to Utili-MACT alone, have you been 
able to, you know, take any plant and say it is going to cost X 
millions of dollars to comply? Omaha Public Power has already 
said for their coal fire plant that really is only 10 years 
old, that they are going to have spend over 400 million. Have 
you done something similar?
    Ms. Walz. We have looked at the cost to our existing 
plants. We are already very highly controlled at Tri-State, at 
all of our facilities, so it is not as significant. The main 
issue we have is the fact that we have an air permit to build a 
new plant in Kansas and this rule will stop that. We cannot get 
a technology company to say that, yes, we can design and build 
to those new standards. So essentially it will stop----
    Mr. Terry. So a technology isn't even available to build to 
the new standards?
    Ms. Walz. It is not available.
    Mr. Terry. OK. Well, that is certainty, isn't it? You are 
certain that you can't comply; therefore, you don't build it.
    Ms. Walz. Yes.
    Mr. Terry. OK. Well, good. Then we have accomplished that.
    One last question. And do you feel--and I think we all feel 
that we want clean water, we want clean air. Is there a cost-
benefit analysis that you feel comfortable that the investments 
to comply or decision to shut down will actually increase 
public health in your area? Have you gotten records from the 
Colorado Department of Health that will show that there has 
been x number of cases of elevated mercury in people in an area 
of one of your coal fire plants, for example?
    Ms. Walz. The cost-benefit analysis that we have seen is 
actually the most recent one, and the rule that was finalized 
today is the Utility MACT Rule. And that cost-benefit analysis, 
really it is a mercury rule. It is a hazardous air pollutant 
rule and the benefits that EPA estimates for mercury reduction 
is about $6 million. However, they go on to calculate and 
include economic benefit for reduction of particulate matter 
and estimate that I believe the number is 90----
    Mr. Terry. OK. I would love to come back and do this but I 
have got to ask Dr. Mitchell.
    Did you treat patients?
    Mr. Mitchell. Yes, I have.
    Mr. Terry. Do you take a history from them?
    Mr. Mitchell. Yes, when I----
    Mr. Terry. When you obtain a history, do you call them a 
complainer?
    Mr. Mitchell. No, we were asking them----
    Mr. Terry. Oh, well, then why do you call these four people 
a complainer because they set out some issues that affect their 
business just like a patient would to you?
    My time is done.
    Ms. DeGette. Wait a minute. Let him answer the question. I 
ask unanimous consent to let Dr. Mitchell answer the question.
    Mr. Terry. He answered the question. I asked him if he 
takes a history and whether he calls them a complainer. He said 
no.
    Ms. DeGette. You asked, why did he complain about the other 
four witnesses? Let him answer the question.
    Mr. Stearns. I think in all fairness, Dr. Mitchell, do you 
want to take 15 seconds just to----
    Mr. Mitchell. Yes.
    Mr. Stearns. Go ahead.
    Mr. Mitchell. Thank you.
    I did not say that the other businesses are complainers and 
obviously there needs to be a balance----
    Mr. Stearns. OK.
    Mr. Mitchell [continuing]. And they have issues and----
    Mr. Terry. All right, now, may I?
    Mr. Stearns. OK, 15 seconds.
    Mr. Terry. OK, thank you.
    But you did state in your opening statement that when you 
were in a position to hear people talk about regulations that 
they were just complaining. Now, I would from that statement--
--
    Mr. Stearns. Dr. Mitchell, he really has the time so I mean 
you have had your chance to----
    Mr. Terry. Just to state that your opening statement, you 
said people who----
    Mr. Stearns. I think----
    Mr. Terry [continuing]. Question regulations you viewed as 
just complaining and so----
    Mr. Stearns. OK, we are going to conclude this. We can go 
back and forth here for an hour.
    And we are going to let Mr. Waxman move on. He will----
    Mr. Waxman. I ask unanimous consent not that we give more 
time to the gentleman from Nebraska but give time to our 
witnesses, 30 seconds to say what he wants to say.
    Mr. Stearns. Does anybody object to the unanimous consent? 
Go ahead, 30 seconds.
    Mr. Mitchell. What I was saying in my opening remarks is 
that the only people I was hearing from about regulations was 
the regulated community, that the public thought that the 
government was going to protect them and that they didn't need 
to communicate with government about regulations.
    Mr. Stearns. Thank you, Dr. Mitchell.
    We recognize Mr. Waxman, 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    Three years ago, Dr. Patrick Michaels testified before the 
Energy and Environment Subcommittee that widely accepted 
scientific data has overestimated global warming and that 
regulation enacted in response to that data could have a very 
counterproductive effect. In the CV he provided the committee, 
he provided what appeared to be a comprehensive list of all of 
his financial support, over $10,000. After the hearing, we 
learned that Dr. Michaels had omitted information about his 
advocacy group called New Hope, which apparently attempts to 
rebut the prevailing consensus on climate change science. 
Further, Dr. Michaels did not disclose financial support he 
received for New Hope from energy sector supporters, including 
Tri-State Generation and Transmission. When Representative 
Welch, then a member of this committee, asked Dr. Michaels to 
clarify the record, he failed to give a clear answer. It is 
important that we learn about his discrepancy and find out if 
Dr. Michaels was misrepresenting himself as an unbiased 
researcher if in fact he was receiving significant support from 
energy companies and polluting industries for advocacy work.
    On Tuesday, I sent a letter to Ms. Walz asking her to come 
prepared to answer questions about any past or current 
arrangements Tri-State has or had with Dr. Michaels, New Hope, 
and any other affiliated organization. Ms. Walz, according to 
an affidavit Dr. Michaels filed in Federal court, Tri-State 
provided Dr. Michaels' advocacy group $50,000 in 2006 to work 
on climate science issues. That is correct, isn't it?
    Ms. Walz. Congressman Waxman, I received your request late 
Monday in the day. I was in a meeting but needed to leave the 
office quick, but what I did is actually Googled Dr. Michaels 
because I had never heard of him and I wasn't quite sure what 
the relevance to my testimony was here today.
    Mr. Waxman. Well, my question is about your company. I want 
to know whether Tri-State funded Dr. Michaels, his advocacy 
firm, or affiliated organizations before or after 2006 to work 
on climate science issues. Can you detail this funding history 
for the committee?
    Ms. Walz. Based on the timing of your request, I have not 
had time to research this and bring forward information.
    Mr. Waxman. Will you get us that information for the 
record?
    Ms. Walz. We are looking at your request and we will bring 
a response to you as appropriate.
    Mr. Waxman. Dr. Michaels' affidavit also states that Tri-
State ``requested that its support of $50,000 be held 
confidential.'' Do you know why Tri-State requested that its 
funding effort be held confidential?
    Ms. Walz. I had no personal knowledge of Dr. Michaels or 
any work he had done with Tri-State.
    Mr. Waxman. Tri-State is an electric cooperative. It is not 
an organization that typically funds climate change science 
research. Is it----
    Mr. Gardner. Will the gentleman yield?
    Mr. Waxman. No. I want to pursue my questions.
    Mr. Gardner. Will the gentleman yield? I would like to know 
why----
    Mr. Waxman. No, the gentleman's time--I am asking my 
questions.
    Mr. Stearns. The gentleman has the time. I would caution 
the gentleman that----
    Mr. Waxman. Mr. Chairman, point of order. My time is 
running out and I don't want to be cautioned and I don't want 
to be interrupted. Ms. Walz----
    Mr. Stearns. Well, you have the time.
    Mr. Gardner. I will remember that the next time you ask 
somebody to yield.
    Mr. Waxman. I ask unanimous consent I be given additional 
minutes so I can----
    Mr. Stearns. No, you go ahead. We will give you an extra--
--
    Mr. Waxman. Does the gentleman object? Are you the one that 
asked me to yield?
    Mr. Stearns. The gentleman has the time. Use your time as 
your time is running.
    Mr. Waxman. Now, Tri-State is an electric cooperative. It 
is not an organization that typically funds climate change 
science research, is it?
    Ms. Walz. Tri-State funds----
    Mr. Waxman. Yes or no?
    Ms. Walz [continuing]. R&D for carbon management and carbon 
policies.
    Mr. Waxman. Are there other climate scientists--well, these 
are things I want you to get to us. Are there other climate 
scientists that Tri-State funds? Can you provide information 
about any such activities for the committee? Ms. Walz, $50,000 
is a lot of your members' money. What could Tri-State hope to 
get in return? I want answers to that. I think it is pertinent 
to the integrity of the testimony we get before the Congress.
    Your members might be surprised to learn that their money 
was used to fund an advocacy firm to downplay the significance 
of climate change. When witnesses come before the committee, 
they should speak honestly and not mislead the Congress about 
their intentions or supporters. Ms. Walz, your information will 
help us to determine whether that was accurate or not.
    This is not the only incidents of this committee receiving 
questionable testimony. TransCanada recently testified that the 
steel to be used in the Keystone XL pipeline would be 
manufactured at an American steel mill. It turns out that is 
not the case. Given the information, it is imperative this 
committee ensure that it is receiving accurate testimony. I 
think that should be of interest to members on both sides of 
the aisle. A good place to start would be to further examine 
Dr. Michaels' conduct and determine if he provided false or 
misleading information to the committee.
    And I would like to yield to whoever was asking me to 
yield.
    Mr. Stearns. Mr. Gardner, do you want to take a little 
opportunity here?
    Mr. Gardner. I believe the gentleman's time has expired.
    Mr. Stearns. The gentleman's time has expired. We recognize 
Mr. Sullivan for 5 minutes.
    Mr. Sullivan. Thank you, Mr. Chairman.
    I have a question for Mr. Shoop. In your testimony you 
indicated that OG&E's current capitalization is 5.5 billion and 
its annual operating revenue is 3.9 billion and that to 
purchase the scrubbers that EPA's Regional Haze Federal 
Implementation Plan would require would cost an additional 1 
billion or more. Do I understand your testimony correctly in 
saying that you don't want to commit to that 1 billion or more 
for scrubbers because other cheaper alternatives to attain the 
Regional Haze objectives exist and because you want to first 
know whether or not other EPA regulations such as Utility MACT 
are either going to compel the investments in scrubbers or 
other alternatives? And if so, do I understand that you are 
really saying that for a utility your size, it is imperative to 
be able to determine a comprehensive strategy for complying 
with all EPA regulations in order to invest efficiently and not 
wastefully? Do you think that EPA's decision to issue a Federal 
Implementation Plan to Oklahoma for Regional Haze is reflective 
of the executive order's directive to adopt the most cost-
effective approach to attainment of environmental objectives?
    Mr. Shoop. Well, thank you. And, you know, a billion 
dollars for OG&E is a lot of money and that is just the capital 
end of things. There is also annual O&M which is going to be 
north of $100 million every year to go along with those 
scrubbers. So it is a lot of dollars and we would like time to 
investigate alternatives. We are looking and studying dry 
sorbent injection technology, which is largely untested. There 
are a lot of things that we need to check, we need to run 
tests, and it could be that that is a much cheaper alternative 
than the scrubbers, but we need time to test it and the clock 
is running on not only Regional Haze but also these other rules 
as well.
    So I think that the EPA, if they were to combine some of 
these rules instead of keeping them in silos and allow us to 
address them holistically, I think we can achieve compliance 
probably in a much more cost-effective way.
    Mr. Sullivan. Also in your testimony you mention that the 
EPA decided to include Oklahoma in the Cross-State Air 
Pollution Rule. Based on computer modeling that suggested that 
the Oklahoma utilities emissions were threatening to place a 
county in Michigan in noncompliance with ambient air standards, 
prior to this revelation by EPA, did the Agency ever make such 
a claim of Oklahoma's emission impact with any Michigan county?
    Mr. Shoop. You know, originally, Oklahoma was studied and 
it was determined that Oklahoma was impacting Texas. And then 
in the final rule that came out with CSAPR, Oklahoma was 
omitted from that final rule and they came out with a 
supplemental rule and changed their mind and said that Oklahoma 
was now impacting a county in Michigan, which currently is in 
attainment by the way. So we have got serious concerns about 
that model and we have got serious concerns about the science 
behind it. It is just illogical to us that we could be 
impacting that lone county and nothing in between. So we really 
have some serious concerns. We filed comments with the EPA on 
those modeling assumptions and we hope that we get some more 
answers.
    Mr. Sullivan. It would be funny if it weren't so serious, 
wouldn't it?
    Mr. Shoop. Yes.
    Mr. Sullivan. Thank you.
    Mr. Stearns. The gentleman yields back the balance of his 
time.
    And Dr. Burgess is recognized for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Puzder, I really appreciate the interactions you had 
with Ms. DeGette about the board being required in the 
restaurants. My pizza restaurant in Lewisville, Texas, a 
Domino's, is generally just walk-in business or carryout or 
delivery and they are going to be required to put one of these 
big boards up. As you mentioned, there is some expense 
involved. All of the information is available online. I can get 
the information should I so choose. I generally don't but to 
have it up on the board in the restaurant when, in fact, most 
of it is carryout business or delivery really makes no sense. 
So people should go online and check the individual nutritional 
information, though I promise you I have never done it myself.
    Dr. Mitchell, I appreciate you being here, appreciate what 
your organization has meant over the years. Mr. Chairman, if I 
could correct my colleague, when we take a history, the first 
paragraph is the HPI, history of present illness, correct?
    Mr. Mitchell. That is correct.
    Mr. Burgess. And the line preceding that is CC or chief 
complaint. That is we elicit a complaint from a patient and 
then we try to help them unlike lawyers who just never try to 
help anybody. OK, that being aside----
    Mr. Mitchell. I will not comment on that.
    Mr. Burgess. You know, we had Mr. Waxman talk about the 
Truth-in-Testimony and he made a pretty genuine plea for that. 
So let me just ask you on the second page of your testimony you 
talk about diethylstilbestrol.
    Mr. Mitchell. Yes.
    Mr. Burgess. I am not sure, though, that what you have got 
in your testimony is entirely accurate because 
diethylstilbestrol was approved by the Food and Drug 
Administration in 1947 for the treatment of habitual 
miscarriage. I am an ob-gyn physician by training. I trained in 
the 1970s so of course we were the recipients of the problems 
visited upon the children of women who had taken 
diethylstilbestrol, and in fact in the 1970s, the Food and Drug 
Administration rescinded its approval for treatment of preterm 
labor. I think it was 1971. Diethylstilbestrol, interestingly, 
persisted in medical practice. In fact, in the early '70s up 
until about 1975 or 1977 was widely used as post-coital 
contraceptives. Now, no one of this committee remembers that. 
We are all familiar with Plan B and the attempts to make that 
go over-the-counter in the market, and people ask me how can 
you oppose this because this is something that is helpful for 
patients and helpful for women?
    But I do remember the days when diethylstilbestrol was 
routinely prescribed for that and in fact harmed pregnancies 
that then continued after the regimen of post-coital 
contraception was given. And in fact I don't know that it ever 
worked that effectively. So I would like at some point for 
you--I give you the opportunity to correct your testimony. I 
think it is thalidomide to which you refer but 
diethylstilbestrol in fact was approved by the Food and Drug 
Administration actually for several indications over the 50 
years of its existence and may even still be available today 
for prostate cancer. I am not entirely certain about that 
because that was not my field of practice.
    Now, you also deal with environmental issues as affecting 
particularly the constituency that you represent, the National 
Medical Association minority populations, low-income 
populations. I share some of your concerns but I got to tell 
you the Environmental Protection Agency, right now the number 
one problem that your asthmatic patients have today is because 
of the Environmental Protection Agency, and that is the 
prevention of the sale of an over-the-counter rescue inhaler. 
Primatene was the common name for that. But because of the EPA 
restrictions on the propellant used in Primatene, no one can 
get it as of January 1. In fact I spent New Year's Eve driving 
around my district not listening to constituents but actually 
trying to buy the last remaining copies of Primatene that were 
available on the shelves because it would not be available. 
Now, Primatene is pretty low cost. In fact I learned a lot that 
night. You can get a package of two for $32 at most Wal-Marts--
or you could. I also have a prescription inhaler that has the 
different propellant that is now allowed but it is about three 
or four times the cost of that Primatene inhaler.
    So your low-income patients who are asthmatics who might 
have difficulty obtaining their medications for whatever reason 
actually relied upon the use of over-the-counter Primatene. And 
of course some of us who are occasional asthmatics who will 
wake up at two o'clock in the morning, oh, my gosh, I got a 
problem. You know, I am doctor. I can write my own prescription 
so it is not a problem for me, but a lot of your patients or a 
lot of your constituents then are required to either suffer 
through that night trying to use the accessory muscles of 
breathing and being pretty miserable or if they are really in 
trouble they go the emergency room and it costs someone $800 to 
$1,500.
    I really appreciate Mr. Puzder's comments about, you know, 
things aren't free. And I hear the President talk about we are 
going to have free contraception and free screening exams. 
Someone is going to pay for those. But I just wondered if you 
had a comment about the unavailability of the over-the-counter 
asthma medications and again the fault of that being the EPA. 
And I really want to solicit your help with Administrator 
Jackson and Gina McCarthy, the Assistant Administrator who has 
come to this committee who seemed at a loss as to how to deal 
with this.
    Mr. Mitchell. Yes. I think that Primatene was pulled for a 
couple of reasons. That was one of them, because of propellant; 
the other is because of concern I think by the physicians 
particularly around cardiac problems with Primatene; and a 
third reason is that they felt that patients with asthma should 
be getting medical attention rather than using over-the-
counter----
    Mr. Burgess. Dr. Mitchell, if I may, you are a doctor. I 
mean does everyone always follow your advice to the letter? 
They never did for me. I would like to know your secret.
    Mr. Mitchell. I wish it were true that they did. I 
understand what you are saying and your point is good but the 
issue is that they shouldn't even have to do that. We know that 
ozone increases the amount of asthma attacks. We know that 
particulates increase the amount of asthma attacks----
    Mr. Burgess. I know my time has expired. I have been an 
asthmatic since the 1950s and I submit to you the environmental 
situation was different in those days. I still had the disease.
    So Mr. Chairman, with that, let me yield back to the 
committee.
    Mr. Stearns. The gentleman's time has expired.
    Mr. Bilbray from California is recognized for 5 minutes.
    Mr. Bilbray. Thank you, Mr. Chairman. Mr. Chairman, let me 
apologize to the committee because, you know, this sort of just 
brings me back to the good old days of the '80s and I was 
sitting as a regulator for a county of 3 million and we had the 
fetal alcohol syndrome issue, and the whole discussion at that 
time was that it was a major threat to the unborn and that we 
needed to address it. And the proposal came forward that we 
should require every restaurant to have on its menus the 
warning, every restaurant on its table posted, every bar on 
every table down to the point of requiring that every chair in 
a stadium where alcohol was sold had to have on the back of it 
a warning about fetal alcohol syndrome. And the perception 
was--and Doctor, I will bring this up--was that if we did not 
implement these rules, we were going to damn generations to 
this terrible problem and that if we really cared we have to do 
this. I was just in my 30s at that time and sitting as a county 
supervisor, and frankly, I said look, guys, in a bar there is 
only one place anybody reads anything and that is the back of 
the restroom door. And everybody laughed. How many years later, 
where do we put our warnings for fetal alcohol syndrome? Does 
that mean that we don't care about the issue that we didn't 
post it everywhere, anywhere that was originally proposed?
    And the reason why I bring this up, Mr. Chairman, just 
because you care isn't enough. When we do regulations, we have 
got to not only care but we have got to be smart the way we 
apply it. Wouldn't you agree with that, Dr. Mitchell?
    Mr. Mitchell. Yes, I would.
    Mr. Bilbray. OK. Well, let me give you an example. We keep 
talking about stationary sources here and coming from 
California don't you agree that one of the dirty little secrets 
is that mobile sources are a major contributor to ozone and air 
pollution and greenhouse gas problems?
    Mr. Mitchell. Ozone, yes, transportation and mobile sources 
are in addition to the stationary sources.
    Mr. Bilbray. OK. All the time, Mr. Chairman, that we hear 
about--is there anybody here from a non-attainment area? OK. 
Now, you know, Doctor, that if you allow one industry to 
pollute under a non-attainment area, that means somebody else 
has to reduce it to stay within the air bubble of the 
attainment area. I keep hearing all this talk of what 
businesses and small businesses have to do, but at the same 
time I am seeing that, this committee who claims and a lot of 
people who claim to care about these air pollution issues 
ignore studies come out of Florida and Kansas that show that 22 
percent of the emissions coming out of mobile sources can be 
tracked to inappropriate traffic control, not by the private 
sector that creates the jobs but by the public sector that puts 
up stop signs because yield signs don't work, don't want to use 
roundabouts, don't want to synchronize traffic signals.
    Now, Doctor, don't you think that it is rather a little 
hypocritical of us to say we care about jobs and we care about 
the environment but we focus almost exclusively on the private 
sector but never look at the public sector's responsibility to 
do more than just mandate on the private sector? Don't you 
think that maybe we ought to spend as much time worrying about 
what is government doing wrong--and I will be blunt with you--
mandating things like MTB and ethanol and some of these other 
issues, doing the things we have done wrong, don't you think it 
is time that maybe if we really care about the environment and 
public health, government will do us--a physician would say 
heal thyself before you start pointing fingers? And I would 
yield to you to respond to that.
    Mr. Mitchell. Yes, I mean I think that it is important that 
we look at all the policy and particularly obviously you as a 
Congress have a lot of responsibility for that. It is clear 
that you don't reduce some pollution from mobile sources by 
widening the roads or those types of things, that you have got 
to invest in transit. That seems to be----
    Mr. Bilbray. Whoa, let me interrupt. First of all, I am 
sorry. I have done enough environmental assessments to know 
that the no-project options do have environmental 
repercussions, that not widening a road does have 
environmental--so Doctor, when you say that, I ran a transit 
system, too, and I understand the benefit there. But I think 
that too often you have just moved over a line that does not 
reflect the reality of science. And again let me just say there 
is a flip side, too, and I will say this to you. The Clean 
Water Act was brought up by the ranking member and we have got 
the Scripps Institution of Oceanography and the National 
Academy of Science saying that for the Federal Government to 
mandate the secondary mandate in the San Diego region would be 
adverse to the environment, not help the environment. And it 
has taken decades for people to understand that. Do you 
understand that sometimes environmental laws actually create 
problems rather than solve them? Would you agree with that, 
Doctor?
    Mr. Mitchell. That does occur sometimes, yes.
    Mr. Bilbray. Because they are not appropriately 
administered. I guess everything down the line here is there is 
an assumption that common sense and practical application like 
putting a warning on the back of a bathroom door rather than 
requiring it on the back of every seat in the stadium is the 
kind of thing the American people expect us to do and 
rightfully should do. And all I can say is if we want the right 
to mandate stuff on these people, we not only have a legal I 
think we have a moral obligation to make sure those regulations 
are based in common sense, not just good intention.
    And I yield back, Mr. Chairman.
    Mr. Burgess [presiding]. I thank the gentleman.
    The gentleman from Texas, Mr. Green, is recognized for 5 
minutes.
    Mr. Green. Mr. Chairman, I don't know how to follow putting 
signs on the back of the bathroom door, but I think I agree 
with my colleague because sometimes regulations do have a 
benefit. And I know for lots of businesses regulations cost too 
much and they put pressure on earnings and discourage 
investment and innovation. And when my colleague from 
California asked about a non-attainment area, I represent East 
Harris County and we have 5 refineries and 20-plus chemical 
plants literally in my own district plus other ones in a 
neighboring area. We have refineries, chemical plants, and lots 
of industry support personnel for that industry and for the oil 
and gas industry. Regulations are critical for our workers for 
their safety, health in our communities who I represent the 
fence line folks, too. And it is true that I don't always agree 
with the regulations of this administration, but I have had 
problems with past administrations, too, whether they were 
Republican or Democrat, on their regulations.
    And I know with talking with the constituents that the 
public cares a great deal about benefits that come from good 
regulations and I will give you an example. The Clean Air Act, 
in the Houston Ship Channel, when I was in college in the '60s 
you could actually light the water in the Houston Ship Channel. 
And nowadays, our plants for the last 15 years is on their 
intake of water has been actually getting live fish and crabs. 
We still don't want to eat those crabs and fish but they are 
alive and in 1960 they weren't. And so there are benefits.
    Now, there is a reason when there are some regulations 
whether Clean Water or Clean Air, and sometimes we have a 
problem. And I know I have disagreements on probably a dozen 
issues with the EPA during this recently in the last year and a 
half or 2 years, but sometimes they are good issues.
    Mr. Shoop, you and I have worked and shared a great concern 
over clean air regulations and I have to admit Texas is kind of 
like Oklahoma. We don't have to have an interpreter to talk to 
each other. My only complaint is Oklahoma takes too many of our 
football players. But we have worked together on a resolution 
and I value that effort that we have done. And that has 
typically been on a bipartisan basis on our committee. And I 
know how important it is to balance regulations with health and 
safety and our economic interest because we would not have 
those 5 refineries and those 20-plus chemical plants providing 
our job and our tax base without some reasonableness to the 
oversight and the regulations.
    And I know we are looking at the benefits of regulation and 
also what the President did and I appreciate your testimony on 
Executive Order 13563, but one of the benefits I know of your 
particular company and it has benefitted a lot of my companies 
is the Affordable Care Act. I know the Affordable Care Act 
provided assistance to Oklahoma Gas and Electric like it did 
some of my companies with retiree benefits. So that would be an 
example--I know this may be sacrilege in this committee because 
we tried to repeal it, we tried to do everything else with it, 
but were there benefits that Oklahoma Gas and Electric received 
from the Affordable Care Act Early Retirement Reinsurance 
Program?
    Mr. Shoop. I am actually not aware of that benefit, but if 
we received it, I am sure it was appreciated. But I have no 
knowledge of that.
    Mr. Green. OK. Well, you might check because I understand 
you received about $700,000 for the program and believe me, 
that helps some of my, you know, constituents in our district.
    Mr. Williams and Dr. Mitchell, do you have anything to add 
to some of the benefits important on regulations on individuals 
and companies?
    Mr. Mitchell. Yes. I mean obviously companies rely on 
having a healthy workforce. If the workforce is not healthy, 
then it is going to be very, very costly to the companies both 
in healthcare costs as well as training for new employees. And 
so I think that is it really important for business to maintain 
a healthy workforce.
    Mr. Green. Mr. Williams, anything to add?
    Mr. Williams. Yes, I would reiterate that we have grown our 
business, we have hired people, we have invested capital 
because good business sense, market research says that that is 
a good thing to do. We know regulation costs money. We know 
that there is pending regulation that may be threatening but 
that does not stop the opportunity for growth and investment. 
The broad uncertainty of our economy and of our debt is the 
largest inhibitor and the key point that gives us cause for 
concern when we step back and ask ourselves the questions 
associated with return on investment. Ultimately, it is the 
business case that allows us to move forward and it is that 
business case that has allowed us to continue to grow.
    Mr. Green. Well, Mr. Chairman, I know I am out of time. 
There is a reason for the regulation. I have, like I said, an 
area that is a heavy industrial. I love to hunt and fish; I 
just don't want to have to do it to support my family. I would 
rather have my folks working at those plants. Thank you.
    Mr. Stearns. The gentleman's time has expired.
    Recognize Dr. Gingrey from Georgia for 5 minutes for 
questions.
    Mr. Gingrey. Mr. Chairman, I thank you.
    I want to address my first remarks to Mr. Williams. Mr. 
Williams, I have before me your written testimony but I thought 
I heard you say--you correct me if I am wrong--you are 
unabashed conservative Republican----
    Mr. Williams. Unrepentant.
    Mr. Gingrey. Unrepentant conservative Republican?
    Mr. Williams. Yes, I am.
    Mr. Gingrey. Does that mean you still consider yourself a 
conservative Republican?
    Mr. Williams. Absolutely.
    Mr. Gingrey. Thank you. I thought that is what I heard you 
say. A little surprised that the minority staff would have your 
name in their rolodex to call you as a minority witness. Can 
you explain that to us?
    Mr. Williams. I had the opportunity to testify--we had the 
opportunity to talk at a prior hearing regarding TSCA reform 
and my understanding is that it was on the basis of that 
discussion----
    Mr. Gingrey. They liked what you had to say at that 
particular time?
    Mr. Williams. Apparently so.
    Mr. Gingrey. Apparently so. Yes. Now, in your written 
testimony--I am looking, Mr. Williams, on the second page, back 
of the first page I guess--and you say, ``increasingly, the 
cause of cancer and diseases such as autism, Parkinson's, and 
other illnesses are being linked to chemicals of concern and 
yet we struggle to reform decades-old legislation.'' In regard 
to autism, can I ask you this? Are you thinking of or referring 
to this controversial issue about mercury and the preservatives 
of childhood vaccines? Is that what you are thinking?
    Mr. Williams. I am not an expert in that area. We have done 
a fair amount of research to try to understand the market 
demand for materials made with safer chemicals, and in that 
research, reading publications by Safer Chemicals and Healthy 
Families, by the Autism Association that is a part of Safer 
Chemicals and Healthy Families. It is from that.
    Mr. Gingrey. Yes. So in regard to that, about struggling to 
reform legislation, do you have any legislation particularly in 
mind in regard to that entity? Autism and mercury and the 
preservatives, which is my understanding of course it has been 
removed, but what kind of legislation did you have in mind in 
regard to that?
    Mr. Williams. Regarding the TSCA reform legislation.
    Mr. Gingrey. Well, I was specifically referring to----
    Mr. Williams. Autism?
    Mr. Gingrey. Autism, yes.
    Mr. Williams. I have none particularly in mind.
    Mr. Gingrey. OK. Well, thank you, Mr. Williams. Let me----
    Mr. Mitchell. Can you give me a chance to answer that 
question?
    Mr. Gingrey. Dr. Mitchell, I am coming right to you.
    Mr. Mitchell. OK.
    Mr. Gingrey. And you can answer that in addition to my 
other questions, but I would like for you to answer my other 
questions first. I am reading your testimony and in regard to 
the issue of diethylstilbestrol, DES--and hold on just a 
second; let me ask the question and then you can respond--and 
here is what you say: ``I am also aware about products like 
diethylstilbestrol, or DES, that were not approved by the FDA 
and went on to cause major disabilities in other countries 
where it was approved for use.'' Now, that is your statement. 
And you go on to say that ``generations of Americans were 
protected by FDA's prevention of this drug from coming to 
market in the United States.'' Doctor, are you aware of the 
fact--obviously, you are not aware of the fact that the FDA 
first approved DES in this country in 1941.
    Mr. Mitchell. There was an error in my testimony.
    Mr. Gingrey. There obviously is an error in your testimony 
and, look, we all are subject to making errors and I think the 
chairman, Dr. Burgess, has given you the opportunity to revise 
and extend your testimony, but you know, the thing that really 
bothers me about all this is the first paragraph on the second 
page of your testimony--and you say, ``I was previously on a 
U.S. Food and Drug Administration advisory panel.'' You were an 
advisory expert for the FDA and you didn't even know that they 
had approved DES for use in this country in 1941.
    Mr. Mitchell. I mean thalidomide.
    Mr. Gingrey. Well, obviously and I can understand. I 
appreciate your answer but it is a little bit disturbing, Mr. 
Chairman, when witnesses are called before this committee as 
so-called ``experts'' whether for the majority or the minority 
and, you know, something like that, a mistake like that makes 
me feel that the whole testimony from Dr. Mitchell is 
worthless. And, you know, if the other side wants to talk about 
that and ask Dr. Mitchell to explain in more detail, they will 
have an opportunity to do that.
    And I yield back.
    Mr. Burgess. The gentleman's time has expired. Recognize 
the gentleman from Colorado for 5 minutes for purpose of 
questions.
    Mr. Gardner. I thank the chairman for the time and I thank 
the witnesses for testifying today. And I would just, Mr. 
Chairman, ask that perhaps we can get some clarification from 
Mr. Waxman that Ms. Walz's testimony wasn't anything but 
truthful. I think it may have come across as he was impugning 
the witness here and I don't believe that that was what he was 
trying to do but I would just like to perhaps get that 
clarification from Mr. Waxman.
    And along those same lines of questions, I have served on 
this committee for about a year now, a little over a year now 
and have been to many, many hearings where the issue one thing, 
the issue is jobs, as is the case here the issue is 
regulations, as the issue is here and my colleague will go a 
different direction than the purpose of the hearing. In fact it 
is not the first time that a red herring has been used by my 
colleague. In fact so many have been used that perhaps they 
ought to be an endangered species.
    But I would like to talk a little bit, Ms. Walz, about some 
of your testimony and specifically the Regional Haze issue. In 
your testimony you note that Colorado's Regional Haze SIP has 
cross-spectrum support and bipartisan support. Can you explain 
this collaborative approach?
    Ms. Walz. Yes. When we went through the state hearing to 
put the rule in place, the environmental community was 
represented and a number of environmental organizations as well 
as utilities and the State, and we came up with a negotiated 
agreement that all parties agreed to and said this is the best 
way to go; this is good for Colorado; this is reasonable 
progress.
    Mr. Gardner. And thank you. And I would like to submit for 
the record letters from Governor Hickenlooper and Senator 
Udall, Senator Bennet, as well as the Colorado Congressional 
Delegation, the Speaker of the House in support of Colorado's 
SIP for the record, if I could, Mr. Chairman.
    Mr. Burgess. So ordered.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Gardner. And would you please explain to me Tri-State, 
what did you agree to do in your SIP?
    Ms. Walz. We agreed to put on control technologies at the 
Craig Station, to install a selective catalytic reduction on 
one of the units, and then to lower our emissions on the other 
two. Its implementation, it is a $330 million investment in 
controls.
    Mr. Gardner. And that investment as you said was, you know, 
you are a not-for-profit operation, so that investment will be 
in turn paid for by your members?
    Ms. Walz. Correct. That is true.
    Mr. Gardner. And in your testimony you had stated several 
different things including EPA requirements that may require--
so talking about the cost of various regulations and the EPA 
has estimated that the benefits of the Utility MACT rule is 6 
million annually and you had stated that unfortunately the cost 
of compliance is estimated to be $9 billion annually. Do you 
know roughly how much of that will be the cost that Tri-State 
will bear?
    Ms. Walz. On the Utility MACT side, we are in the process 
of analyzing cost to existing units. We don't have those 
estimates completed, but again the major impact to us is on 
building the new coal unit that we have an air permit for. It 
will stop construction of that.
    Mr. Gardner. And again, that is a plant that will not go 
forward, correct, at this point?
    Ms. Walz. Correct. Yes, we don't have vendors that will 
give us guarantees that they can meet the new standard, and 
without that, you don't have agencies that will give you 
financing to build. And then you risk building and not being 
able to comply from day one.
    Mr. Gardner. And what would happen if you had to install 
three SCRs which remove nitrogen oxide at the Tri-State Craig 
facility?
    Ms. Walz. If we are required to install three SCRs, which 
is a real concern that we have because that is what EPA's 
action is taking in other States, it would be about $1 billion.
    Mr. Gardner. And $1 billion would be borne by your 44 
member cooperatives?
    Ms. Walz. Yes, it would.
    Mr. Gardner. Thank you.
    And then, Mr. Puzder, a couple of questions for you on 
restaurants. What kind of nutritional disclosures does the 
company currently provide you mentioned in your testimony?
    Mr. Puzder. Yes, we disclose on large posters in the 
restaurants. I have got the list here--serving size, calories, 
calories from fat, total fat, saturated fat, natural trans fat, 
artificial trans fat, cholesterol, sodium, total carbohydrates, 
dietary fiber, sugars, and proteins. And----
    Mr. Gardner. And I----
    Mr. Puzder [continuing]. It is in a poster that is framed 
and this large in the restaurant.
    Mr. Gardner. And that is displayed in the restaurant. And 
as your testimony and previous questions answered, does the 
government require you to disclose this information?
    Mr. Puzder. No, we do it in every restaurant we have in the 
United States. We are not required to do it. We did it when I 
was Carl Karcher's lawyer back in the early '90s. I mean it is 
just a tradition of the company.
    Mr. Gardner. And you are offering healthy menu selections 
as well?
    Mr. Puzder. We have turkey burgers, we have the skinless, 
all-muscle chicken sandwiches, we have salads, we have honey 
whole wheat buns. We have a lot of health products.
    Mr. Gardner. And the government didn't mandate you to do 
that?
    Mr. Puzder. No, we have got them and I am very happy if 
people buy them.
    Mr. Gardner. And then you talked a little bit about 
healthcare and the fact that healthcare cost estimates vary so 
widely. How are you able to even budget for new restaurant 
construction?
    Mr. Puzder. Well, you really can't. It is one of the 
reasons construction has gone down in the past couple of years. 
As a matter of fact, our franchisees are building less 
restaurants. This will be the first year in the history of the 
company which goes back to 1941 that our franchisees outside 
the United States will build more restaurants than our 
franchisees in the United States. We will do about 41 
restaurants last year inside the United States and about 72 
outside the United States. So it has become a very, very big 
problem. It is the one thing that franchisees always mention 
when I encourage them to build new restaurants, which I do 
regularly.
    Mr. Gardner. I see my time has expired. Thank you.
    Mr. Burgess. The gentleman's time has expired. And I hope 
that the exportation of chicken fried steak will add favorably 
to the balance of trade.
    Recognize the gentleman from Virginia, 5 minutes for 
questions.
    Mr. Griffith. Ms. Walz, let me ask you a few questions if I 
might. Do you know what the regulations--you are a monopoly 
company so all the price increases get passed through--I think 
you said earlier--to the consumer, is that correct?
    Ms. Walz. I guess I wouldn't describe us as a monopoly 
company.
    Mr. Griffith. OK.
    Ms. Walz. We are a rural electric cooperative and provide 
energy. Our members actually own us. We are a wholesale energy 
provider and they own us and we, by multiyear contract, give 
them energy.
    Mr. Griffith. OK. And all these regulations that we are 
looking at that are going to affect your industry that you 
answered questions about earlier, the various types of 
regulations, do you have any idea what that cost increase is 
going to be?
    Ms. Walz. I don't. We have, again, a lot of uncertainty in 
looking at are we going to have three SCRs or are we going to 
have one SCR? Is the Coal Ash Rule going to get finalized in 
2013? So again it is that pancake effect of each of these rules 
and the added cost that they each have.
    Mr. Griffith. If I told you that one of the providers in my 
area, AEP, American Electric Power, had indicated that their 
increased cost on some of these regulations were going to be 
about 10 to 15 percent increase, would that seem to you to be a 
reasonable number given that they are heavily dependent at this 
point on coal?
    Ms. Walz. Yes, I think that, you know, not knowing what 
their current controls are and where they have to go, the 
number doesn't surprise me.
    Mr. Griffith. Do you think that your number would be 
somewhere in line with theirs or are you all better positioned 
than AEP?
    Ms. Walz. We are working on those numbers so I don't have a 
percent increase.
    Mr. Griffith. I have a rural district as well with small 
cities in it. We have median household income of about $36,000 
per year, household income not individual. My constituents are 
very concerned not only about our loss of coal jobs because of 
what has been happening with regulations in that industry also 
affecting your industry, but also we are concerned that we have 
got a lot of folks on fixed incomes and a lot of folks who just 
don't make the kind of money that sometimes Washington 
bureaucrats make and think that everybody can afford those 
kinds of increases. Would you state that the area that you 
serve is more like the Washington crowd or more like my 
district?
    Ms. Walz. The area we serve is much like your district, 
yes.
    Mr. Griffith. And so if my constituents are concerned about 
a 10 to 15 percent increase in their electric rate, then you 
believe that perhaps your folks that you serve would also be 
very concerned about significant power increases?
    Ms. Walz. Yes, they are very concerned.
    Mr. Griffith. And do you just do homes or do you also do 
businesses in that rural area?
    Ms. Walz. We do rural businesses as well.
    Mr. Griffith. And I believe that they use a lot of 
electricity, too?
    Ms. Walz. They do and it is actually growing in States like 
Wyoming where we have oil and gas development.
    Mr. Griffith. And if their electric rates go up, do you 
know how that affects their competitiveness in the world 
market?
    Ms. Walz. It makes it more difficult for them to compete in 
a world market when you don't have similar costs and 
regulations in other countries.
    Mr. Griffith. And so it would be fair to say, would it not, 
that it actually puts American manufacturers at a disadvantage 
when the regulations make their energy costs more than they 
might need to be otherwise?
    Ms. Walz. I would agree. American businesses are at a 
disadvantage because of these increasing costs.
    Mr. Griffith. And AEP has also told me that because of 
reasonable regulations that we had put on some in the past that 
they have already cleaned up about 80 percent of their 
emissions. Would that be similar for your company or have you 
all done even better?
    Ms. Walz. I would say we started off better. I mean we are 
a fairly young company so as we built our plants we put the 
most advanced technology controls on them at the time. We don't 
have a plant that is uncontrolled. They have been controlled 
since day one.
    Mr. Griffith. OK. And so a large part of the problem, 
although we can always do better, but a large part of the 
problem has been resolved since we weren't able to catch fish 
out of the river that the previous gentleman stated. Wouldn't 
that be accurate, that a large part of the problem has been 
resolved with emissions?
    Ms. Walz. Nationwide?
    Mr. Griffith. Nationwide, yes, ma'am.
    Ms. Walz. I would say the standards that are in place have 
been believed to be protective and proven to be protective of 
human health and the environment. They are just going the next 
notch further without valid science in many cases.
    Mr. Griffith. Well, here is the concern we have. To get to 
that 80 percent in our area costs about $6 billion. To get to 
this additional 12 percent represented by some of the new regs 
is going to cost 6 to 8 billion. And wouldn't we be better off 
as a Nation to have a balanced approach where we look for 
innovative ways to do this but also look at ways that we don't 
chase businesses out of the country and don't impact the 
working poor and those living on fixed incomes who have retired 
and living on Social Security? Would you agree with that?
    Ms. Walz. I agree with that.
    Mr. Griffith. I thank you.
    My time is up. I yield back.
    Mr. Stearns. Time is expired.
    Mr. Scalise is recognized for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
holding this hearing. I know one of our colleagues on the 
Democratic side called it a waste of time to have this hearing. 
Frankly, I think we need to have more of these hearings and, 
you know, I think it is important when you get small business 
owners to take some of their time away, which is hard for you 
all to do because you are running small businesses, to come up 
here to Congress and share with us the concerns that you have 
and the things that are happening here that prevent you from 
creating jobs. I think that is one of the most valuable things 
we can do here so I would strongly disagree with the statement 
that it is a waste of time to do this because I know I go 
throughout my district meeting with small businesses of all 
types and walks of life; I hear the common theme from them it 
seems like every day is it is the policies and the regulations 
and the laws coming out of Washington that are their biggest 
impediment to creating jobs.
    And so we ought to be not only having hearings but also 
passing legislation as we have in the House passed over 30 
bills to remove some of these regulations that you have been 
sharing with us. And you know, I think we are going to be 
getting other ideas from some of the things you are talking 
about as well as more of the rules that continue to come out 
unfortunately that show us things that we need to do to 
continue to try to allow for job creation out there and stop 
some of the radical stuff that is coming out of Washington.
    So I appreciate you first for taking the time out of your 
schedules to come in here and share these stories with us 
because I know I read--the Small Business Administration had 
done a really important report with the impact of regulatory 
costs on small firms, and they released this in September 2011.
    Mr. Stearns. Mr. Scalise, just if you would yield for one 
second. Your point is exactly right. I ran a business; I barely 
had time to come to something like this. The fact that these 
folks would take time from their business to come here to do 
this is remarkable and it is a tribute to them that they want 
to do it. I mean, if your businesses collapsed 30 percent, you 
really don't have the time like Mr. Luoto is coming here. So I 
think that is an excellent point. Thank you.
    Mr. Scalise. No, I appreciate that, Mr. Chairman, because 
it really is a sacrifice. But again, it gives us the real on-
the-ground knowledge to know. You know, we read these rules and 
laws and we fight a lot of them up here and some people think 
it is just, you know, because one party wants to fight another 
party. We are fighting for the livelihoods of our small 
businesses back home. And so it is valuable for us for you to 
share these stories because it reiterates to us how important 
it is that we continue to try to do this.
    But in the SBA report, they actually highlighted and went 
and kind of surveyed and came up with true costs, the true cost 
of regulations on our small businesses. And they broke it down 
per family and the estimate by the Small Business 
Administration is that the regulations and the rules coming out 
of Washington cost the average American family $15,586. That is 
a dramatic cost of all of these regulations, and as many of you 
describe, don't even really improve people's health. I know, 
Mr. Puzder, you talked about these regulations coming out of 
FDA. They make you put these things on your board that don't 
have anything to do with improving health and you are doing it 
on your own anyway.
    And, you know, I want to follow up with you because I have 
talked to a small business owner who actually owns franchises 
like you discussed and he said he owns a couple of McDonald's 
franchises. And, you know, unlike what some people think, these 
are small businesses; this isn't a large national corporation. 
The person who owns a few franchises is running those small 
businesses separately than the major corporation and they are 
providing healthcare to their employees. He said for the first 
time in his business experience--over 40 years he has been in 
business--first time he has ever had to lay anybody off was 
just last year and it was because of the President's healthcare 
law, that the cost of complying just with that law--and there 
are a whole slew of others--but just the cost of complying with 
the President's healthcare law, for the first time ever in 40 
years of running a small business forced him to lay people off. 
And you have talked about some of that, too. If you can expand 
on how your experience and how many different franchisees do 
you have? How many people own those small businesses that run--
--
    Mr. Puzder. We have about 200 franchise entities between 
Carl's Jr. and Hardee's. Some of the restaurants make very good 
money; some of them in the middle; some of them are marginally 
profitable. The marginally profitable restaurants will close. 
The healthcare costs will drive them over the edge. We are 
going to have to reduce hiring, we are going to have to take 
full-time employees and make them part-time employees, we are 
going to have to automate positions. You know, I like personal 
service and these kiosks that they have where--the kids are 
much better at it than I am--they can go in and order on the 
computer screen like an ATM. You know, right now they are kind 
of cost prohibitive but the reality is that this medical 
insurance law becomes effective, they may become less cost 
prohibitive. We may have to put those in the store. So we are 
going to have to make a lot of adjustments to try and----
    Mr. Scalise. Do you have any idea how many jobs that would 
cost just in your experience?
    Mr. Puzder. You know, we have not tried to quantify it. The 
problem is that the law is very complicated. The regulatory 
framework is currently very uncertain. So even Mercer Health 
and Benefits, one of the largest healthcare consultants in the 
world and we have used them for a number of years, they have a 
very difficult time giving us any kind of rational estimate of 
what the cost increase is going to be. And the first estimate I 
got was between 8 million increase and 32 million and I think I 
finally got them to settle in on a rational number of about 18. 
But it is very hard to tell where this is going to go so I 
really can't give you a number right now.
    Mr. Scalise. And literally could lead to their closing.
    Well, again, I thank all of you for your time and coming 
here and sharing your stories with us. It is really important 
and it shows us what we need to keep fighting to do.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. Stearns. The gentleman yields back and we are going to 
do a second round here. And I appreciate the witnesses being 
patient with us as we start the second round.
    I am going to show a video here which is Jim Cramer on 
MSNBC yesterday. It is just about a minute, so if I could have 
the video and perhaps just maybe drop the lights a little bit. 
Can everybody see that OK? Yes, OK. We can see it. Just can we 
make sure we hear it?
    Ms. DeGette. It is our former colleague.
    Mr. Stearns. We need sound here.
    Ms. DeGette. You know, it didn't work the last time we 
tried to do it.
    Mr. Stearns. Has this been tried before? Did it work? I am 
always amazed at how these things don't work because it is so 
easy to get them to work. It is not like it is difficult. We 
will give it another 15 seconds here and then we will just go 
on. No, I think we are OK. We will give you another chance. 
Well, I think the video if we had run it would actually show 
Mr. Cramer going through the litany of the problems with 
Obamacare, the cost it would incur.
    And I will start with my questions here and go to Mr. 
Puzder. You had mentioned earlier that you had brought Mercer 
in and some of their conclusions based upon the funds that are 
needed to pay that additional cost and the effects on labor and 
so forth, what do you hear from your franchisees with regard to 
the rising healthcare costs attributed to the Affordable 
Healthcare Act and the impact of the expansion on their 
businesses, the people that are trying to make the bottom line?
    Mr. Puzder. I have had franchisees come and tell me 1) that 
they are afraid to grow, they are afraid to build restaurants. 
And it is PPACA, it is the problems that ethanol is creating 
with respect to food costs, it is NLRB. There are a lot of 
things that have them nervous, but a major concern is always 
the Patient Protection and Affordable Care Act. And some of 
them are now trying to get out of the business because they 
would just like to get their cash and move on and not continue 
to grow.
    Mr. Stearns. So in addition to not growing they are even 
scared to invest additional capital right now because of the 
uncertainty of what it would mean to them?
    Mr. Puzder. Absolutely.
    Mr. Stearns. Is that fair to say? And it would be fair to 
say in the long run these rising health costs are going to 
impact CKE. Does this mean you will have less full-time and 
more part-time? I mean when I ran a restaurant, if something 
like this happened to me I would say oh, gosh, I will try and 
go where I can pay in situations, so at least I am not forced 
to the regulations.
    Mr. Puzder. Well, it is really axiomatic in business that 
if a cost goes up, you try and decrease your use----
    Mr. Stearns. Right.
    Mr. Puzder [continuing]. And in this case it would be 
labor. And what a lot of people are talking about is if you 
have three 40-hour-a-week employees that work 120 hours, if you 
have four 30-hour-a-week employees, they work 120 hours. So 
there is a lot of talk about reducing labor forces and this 
isn't just CKE; this is in retail, restaurants and retail 
generally about reducing the full-time workforce to a part-time 
workforce. Then you avoid the coverage. The problem is that you 
lose productivity so that if everybody goes and takes their 
full-time employees who have loyalty to the company and know 
how to do the job, are more consistent workers, if we lost 
productivity in our workforce, then we lost productivity as a 
Nation. So there are offsetting costs and benefits on both 
sides but it is a very difficult problem. We are working very 
diligently to try and solve it.
    Mr. Stearns. When you do a projection on this, did Mercer 
come up with a timeline, a projection of cost 2012, 2014 on--
'12, '13, '14?
    Mr. Puzder. Our big concern is 2014, which is when----
    Mr. Stearns. 2014.
    Mr. Puzder [continuing]. Things become implemented. They 
have not given us a projection. Actually, it is hard for them 
to give us a projection for 2014 because----
    Mr. Stearns. No one knows.
    Mr. Puzder [continuing]. I mean we just don't know. I mean 
this is why I am constantly hammering on them to come up with 
more specific guidance and it is very hard to get. Businesses 
invest when they believe they can make a profit. You usually 
look at a 5-year plan, you would like a 20 percent return of 
your money so that in 5 years you get your money back. If you 
don't know what your healthcare costs are, you don't know what 
your energy costs are, you don't know what your labor costs 
are, you don't know where your taxes are going, it is very hard 
to come up with a rational business plan and build and grow. 
And so Democrat, Republican, liberal, conservative, House, 
Senate, I don't care. This is a real problem in America. 
Businesses don't know whether or not they can make a profit and 
therefore they are not growing.
    Mr. Stearns. You know, I think you mentioned this earlier 
but did Mercer actually say that you would have to cut your 
labor force? Did they go that far?
    Mr. Puzder. Well, one of the options is to reduce full-time 
labor.
    Mr. Stearns. Full-time. So that was a strong recommendation 
from Mercer to cut full-time labor.
    Mr. Puzder. That is one of the alternatives that they are 
analyzing. Again, you know, they gave me an example of a 
company that went to part-time labor, got a $5 million in 
benefits cost but lost $30 million in productivity.
    Mr. Stearns. Yes.
    Mr. Puzder. I can't say they have strongly recommended it. 
It is one of the elements and it is a balance that we are 
currently working on.
    Mr. Stearns. On the whole, your testimony states that the 
Obamacare is going to apply to all these franchisees and yet a 
lot of these people are not--you have Mercer but a franchisee 
doesn't--do they have benefit of the Mercer study or do they 
have to do their own?
    Mr. Puzder. No, they will have to analyze their own costs 
because obviously, you know, we have got 21,000 employees and 
about 900 restaurants. The next largest franchisee has about 
300 and most of them have one or two. So the way the law 
impacts restaurants is very, very different.
    Mr. Stearns. So each of these franchisees has to do what 
you are doing with your major consultant. Do you have any 
recommendations for them as a result of the Mercer consultant 
to you?
    Mr. Puzder. You mean recommendations as to what they should 
do to cover their healthcare costs?
    Mr. Stearns. Right.
    Mr. Puzder. At the moment I don't because I don't even have 
a recommendation for what we should do. You know, it is just 
very difficult to figure out at the current time.
    Mr. Stearns. On that note, I will end my questions and 
recognize the ranking member.
    Ms. DeGette. Thank you, Mr. Chairman.
    I want to clear a couple things up for the record to start 
out with. The first thing I want to clear up is with Ms. Walz 
because I consulted with Mr. Waxman's staff here and I just 
want the record to be really clear. It was not Mr. Waxman's 
intention to in any way disparage you personally. He was trying 
to explore the relationship between this consultant and Tri-
State. And I just wanted to clarify that because one of my 
colleagues had made that insinuation.
    And Dr. Mitchell, I wanted to ask you with the exception of 
the one typo which you are going to correct in your testimony, 
you are under oath. You realize that. This committee takes all 
of its testimony under oath, correct?
    Mr. Mitchell. Yes, I understand.
    Ms. DeGette. And that mistake in your testimony, that was 
just simply a mistake; it wasn't intentional, correct?
    Mr. Mitchell. That is correct. I didn't have very much 
notice and that----
    Ms. DeGette. Sure. And is the rest of your testimony to the 
best of your knowledge and ability correct?
    Mr. Mitchell. Yes, it is.
    Ms. DeGette. Thank you. Now, Dr. Mitchell, I want to ask 
you a question about nutritional labeling, particularly at 
these fast food restaurants. I know that you are the head of 
the National Medical Association, which is African American 
physicians I believe, is that right?
    Mr. Mitchell. No, I co-chair the Environmental Health Task 
Force----
    Ms. DeGette. You co-chair the Environmental--so I know 
because I am the co-chair of the Congressional Diabetes Caucus, 
which is a bipartisan group. Most members of this committee 
belong to it. Childhood obesity is one of the most leading 
concerns in general, but in particular, among communities of 
color. Has your medical association found that to be correct?
    Mr. Mitchell. Yes, it is one of the priority issues that 
the medical association is looking at.
    Ms. DeGette. Trying to prevent childhood obesity, correct?
    Mr. Mitchell. Absolutely.
    Ms. DeGette. And is one of the issues in preventing 
childhood obesity the issue of nutritional labeling of food so 
parents can know what the appropriate nutritional composition 
is and the calories and fat and so on?
    Mr. Mitchell. Absolutely.
    Ms. DeGette. And so maybe your association hasn't taken a 
position on this, but in terms of you yourself, do you think it 
is a good idea if a parent goes to a fast food restaurant with 
their child, that they are able to have that kind of 
nutritional information available to them in a way they can 
understand it and make an informed choice?
    Mr. Mitchell. Yes.
    Ms. DeGette. OK.
    Mr. Mitchell. Yes, that is important.
    Ms. DeGette. Now, Mr. Puzder, I assume that is also 
important to Carl's because that is why you folks have been 
posting this nutritional information for a long time. Is that 
right?
    Mr. Puzder. I would even add that if you go online on our 
Web site you can actually make a meal for your children----
    Ms. DeGette. Right.
    Mr. Puzder [continuing]. And it will tell you all of the 
caloric information.
    Ms. DeGette. Right. Now----
    Mr. Puzder. So we are very aggressive in this area.
    Ms. DeGette. Right. And you know, I appreciate that. I was 
telling the chairman the first time they had these labeling 
requirements in New York--New York was one of the first States 
that did it--I went into an establishment with my daughter and 
we were horrified some of the things we thought were really 
healthy were not really healthy and other things were better 
for us. I am sure you hear that from consumers every day.
    Mr. Puzder. You know, the big surprise in New York was that 
bagels had the same amount of calories as donuts.
    Ms. DeGette. Right. Exactly. Salads can have more calories 
than sandwiches. And so unfortunately, though, not every fast 
food business has taken that kind of forward action that you 
have, isn't that right, Mr. Puzder?
    Mr. Puzder. That is absolutely correct.
    Ms. DeGette. So I guess what I am kind of getting at is 
there are good reasons for regulations that would require 
nutritional information to be provided to consumers, right?
    Mr. Puzder. And not only do I agree with that but I propose 
in here that we just change the regulations so it is more 
efficient and more----
    Ms. DeGette. Right.
    Mr. Puzder [continuing]. Economical, not that we get rid of 
it.
    Ms. DeGette. And I totally agree with you. As I said in my 
first round of questioning, so it is not that we should 
eliminate those requirements; it is so that we should make them 
reasonable for everybody, right?
    Mr. Puzder. We can make them cost-effective----
    Ms. DeGette. Right.
    Mr. Puzder [continuing]. And more consumer-effective.
    Ms. DeGette. Exactly. So, you know, like I say, it is not 
like the Republicans think we should have sensible regulations 
and the Democrats think we should just over-regulate 
everything; it is finding that sweet spot so to speak.
    Mr. Puzder. And as I said, I have letters here----
    Ms. DeGette. Yes.
    Mr. Puzder [continuing]. We have met with--they are 
Democrats, they are Republicans, they are Senators----
    Ms. DeGette. Right.
    Mr. Puzder [continuing]. They are Members of this House----
    Ms. DeGette. Right. And, you know, I feel the same way with 
Ms. Walz with Tri-State power is we have worked together as a 
delegation trying to figure out how these regulations work, 
isn't that correct, Ms. Walz? Now, Mr. Puzder, you are not an 
expert on the regulatory process other than how it affects your 
business, right?
    Mr. Puzder. Correct.
    Ms. DeGette. And so you can't come in and say, Congress, 
you did make some suggestions but you can't give us the overall 
what the healthcare regulations should look like or anything 
like that?
    Mr. Puzder. I can't and are there even people who can? I 
mean it is pretty complicated.
    Ms. DeGette. Well, I mean you have to look at each 
regulation----
    Mr. Puzder. That is exactly right.
    Ms. DeGette [continuing]. And see how--I mean you can't 
paint everything with a big brush and say this is good or bad, 
right?
    Mr. Puzder. Which is why I was a little concerned with the 
comments at the beginning about associations and we are going 
to try and--you know, you do need to hear from us I think.
    Ms. DeGette. Right, but ultimately we have to make the 
decisions.
    And the rest of you, Ms. Walz, Mr. Luoto, Mr. Shoop, you 
know about your industries but you can't come in and tell us 
how to make these regulations perfect for everyone, can you, 
Ms. Walz?
    Ms. Walz. I can't tell you how to make them perfect but we 
have had a lot of suggestions and involvement and comments over 
making recommendations how to improve them.
    Ms. DeGette. And we appreciate that so much. What about 
you, Mr. Shoop?
    Mr. Shoop. No, I don't think we can tell you how to make 
them perfect, but we definitely have some ideas on how to do 
that.
    Ms. DeGette. On the ones that affect you?
    Mr. Shoop. Correct.
    Ms. DeGette. And Mr. Luoto, same with you, right?
    Mr. Luoto. Well, you know, regulations are to benefit 
everybody, and I think that is one of the things that we need 
to do as business and working with you is to be able to get 
them so they work together.
    Ms. DeGette. Amen. I think you are right.
    Thank you very much, Mr. Chairman.
    And thanks again to, you know, to the entire panel for 
being here with us today.
    Mr. Stearns. And let me just do an editorial comment to the 
ranking lady. I appreciate her reaching out and to try in a 
bipartisan manner to talk about these issues, and I think that 
is why I enjoy working with her. And, Ms. Walz, I think she 
aptly pointed out that Mr. Waxman, in his opening statement, 
was bullying in a direction that--normally you just ask 
questions about what is relevant, and in this case he didn't. 
But I respect what she just said in which she did not mean any 
harm. In fact, the committee tries to respect the witnesses. 
But what I would say to her in all candor is that, when we have 
had these eight hearings, we have not heard from the 
administration that economic impact is the number one thing 
they are concerned about. It goes into lots of different things 
and so that is why economic impact particularly for a business 
is important. So with that----
    Ms. DeGette. Well, if the gentleman would yield----
    Mr. Stearns. Sure, I will yield.
    Ms. DeGette [continuing]. Mr. Williams can talk about 
economic impact and what----
    Mr. Stearns. OK.
    Ms. DeGette [continuing]. Regulations mean to businesses if 
you would like to have him talk about that.
    Mr. Stearns. No, we will move on to our next question.
    Mr. Burgess.
    Mr. Burgess. I appreciate the chairman for yielding.
    Mr. Puzder, I just had a couple of follow-up questions 
because your testimony was so compelling as this hearing 
started out and your testimony about the increased cost that 
your business is going to be experiencing as a result of the 
Affordable Care Act. I thought it might interest you to know 
that I spent the evening before we voted on the Affordable Care 
Act in the Rules Committee and I had a number of amendments 
that I tried to get made in order. One I remember best was an 
amendment to change the title and to remove the word 
Affordable, and you have simply proved the point for me here 
today that that would have been an appropriate amendment for 
the Rules Committee to consider and undoubtedly it would have 
sailed through the House of Representatives had it been allowed 
to be voted on.
    But here is the deal. I mean all of us who were here 
remember the summer of 2009. We went home to our districts in 
August; we did our normal little sleepy summer town halls and 
our attendance went from a couple dozen people to a couple 
thousand. And people were significantly upset on both sides but 
upset about what they were seeing coming out of the then-
Democratic-controlled House of Representatives. And I will tell 
you the thing that I heard over and over again, the themes that 
came through loud and clear to me during those summer town 
halls was, number one, don't disrupt the entire system. If you 
are going to fix some things that need fixing, then fix them, 
but don't change everything for arguably 60 to 65 percent of 
the population that is satisfied with how their medical care is 
administered.
    And then the other thing we heard was if you are going to 
do anything at all, would you please help us with costs? 
Because we are concerned legitimately about the increasing 
costs of health insurance and medical care. So my summation is 
we failed on both fronts.
    Now, you are not from inside this Beltway bubble; you are 
from outside. Am I correct in that assumption that we failed on 
both charges?
    Mr. Puzder. It would seem at this point that the law does 
not accomplish those goals. I would have to agree with that.
    Mr. Burgess. Well, I don't know now what we are up to on 
the total number of waivers, but it would just seem to me that 
a law that has required northward of 1,500 waivers in order to 
be successful is by definition not a successful piece of 
legislation.
    Mr. Puzder. Absent those waivers, a lot of people would not 
have health insurance.
    Mr. Burgess. That is correct. Now, on the cost side, the 
efforts at cost containment, you know, really were nonexistent. 
I mean if you really wanted to put people in charge of the cost 
of healthcare--I mean I have a health savings account; I have 
had one for 20 years--the reason I reference the cheaper 
inhalers is because I am so tight I don't like to pay for those 
expensive inhalers because I pay for everything out-of-pocket 
when it comes to my prescriptions because I have such a high 
deductible. When I got to the pharmacist and they say paper or 
plastic, they are referring to folding money or a credit card.
    So it is important you keep people involved in the cost of 
their care. One of the big problems we have in healthcare in 
America right now is that no one knows what their care actually 
costs and most people don't care because we have anesthetized 
them over the years with either third party insurance or, in 
the case of Medicare and Medicaid and SCHIP, government-run 
insurance.
    But the ranking member suggested that it was the cost of 
the uninsured going to the emergency rooms that were a cost 
driver. Number one, we haven't fixed that problem so if that is 
a cost driver--if anything, we have made it worse. But on the 
other hand, is that really the cost driver and is it the cross-
subsidization that your private insurance has to provide the 
Federal Government because the Federal Government with Medicare 
and Medicaid does not pay the cost of rendering the service? Is 
that the cost driver rather than the people showing up to the 
emergency rooms?
    Mr. Puzder. You know, there are a lot of alternative 
options with respect to fixing the healthcare system and to 
stop the dynamic cost increases that were taking place before 
the PPACA and since. I think I said in my original remarks I am 
not a healthcare law expert. All I can tell you is that the way 
that it has been done, this way, will have a devastating impact 
on the ability of the private sector to create jobs because it 
allocates those costs which are now spread. They are too high 
but they are spread across the broad base of taxpayers. When 
you allocate all those costs to the private sector, the 
businesses that you are looking to to create jobs, you inhibit 
if you do not eliminate our ability to create jobs, to at least 
reduce it because benefits--and I know a lot of people think 
the PPACA has benefits; I am not here to argue about that--but 
benefits have costs and the cost of this bill will be the 
ability of the private sector to create jobs.
    Mr. Burgess. I so appreciate you saying that. I get so 
frustrated when I hear the administration say that this is 
going to be free and that is going to be free. You and I know 
when anything has healthcare stamped on its side, it is never 
free. Someone is paying the price somewhere.
    I thank the chairman for their recognition. I will yield 
back my time.
    Mr. Stearns. I thank the gentleman.
    Mr. Gardner from Colorado is recognized for 5 minutes.
    Mr. Gardner. Thank you, Mr. Chairman. And I also want to 
thank Ranking Member DeGette for clarifying for me the 
statements made by Mr. Waxman.
    I just wanted to read a little bit of an article from a 
December article in the Denver Post. It was December 30, 2011, 
and the title of it is ``Economic Certainty Being Sought by 
Small Businesses in Colorado.'' And it was a survey of the 
Colorado/Wyoming members of the National Federation of 
Independent Businesses, 7,500 members, and their number one 
concern is economic certainty. And here is the quote from the 
leader of the NFIB in Colorado/Wyoming is ``their message is 
leave us alone. We know best. If you want to create jobs, 
create economic certainty.'' We also heard during one of the 
opening statements a member of this committee who has said that 
this hearing is perhaps nothing more than an airing of pet 
peeves, that this is pet peeves, an issue that affects just 
these people and they are airing their grievances.
    And so I guess I would start with that and I would start 
with Mr. Puzder. Do the issues that you address today, are 
these just your concern alone only affecting the businesses 
that you deal with?
    Mr. Puzder. No, the issues that I raise would either affect 
the entire quick service restaurant industry or retail I would 
say in general if not manufacturing as well in some instances.
    Mr. Gardner. And that is not just a couple hundred people; 
that is not just a couple thousand people. How many people 
would that affect?
    Mr. Puzder. We are the fifth largest, I believe, chain in 
the country and we have 70,000 employees. So you can take it 
from there.
    Mr. Gardner. Ms. Walz, the same with you. I mean are these 
issues that we talked about today, are they only affecting Tri-
State or are they affecting others around the country?
    Ms. Walz. They are affecting all utilities across the 
entire country.
    Mr. Gardner. And you mentioned you had 750 people that 
worked between the coal operation in Craig and the power plant 
in Craig. Those operations would be affected as well, as would 
similar operations around the country?
    Ms. Walz. That is correct.
    Mr. Gardner. Mr. Shoop, the same question for you.
    Mr. Shoop. You know, when we incur a billion dollars of 
cost, those costs are going to go to our customers. We have 
790,000 customers that are going to see an increase. In my 
written statement I estimated that it would lead to a 23 
percent increase for those residential customers, and then on 
top of that, increases for industrial and small business 
customers. And when we have, like last summer, 50 days of over 
100 degree weather, it is going to raise people's bills 
significantly.
    Mr. Gardner. Mr. Luoto?
    Mr. Luoto. Yes, the exclusion of the Silvicultural Rule for 
loggers in the United States--there are 48,000 loggers right 
now currently--it was almost 70,000. It has shrunk down. 
Obviously it is having a huge effect and the uncertainty that 
we are facing is going to make it even worse. You know, we have 
got to buy equipment; we face uncertainty in that. So obviously 
it is having a huge effect on what our industry is doing and it 
will have a huge effect on America as it comes back to getting 
the housing industry going and everything else because the wood 
will not be available.
    Mr. Gardner. And I think the four businesses here that have 
talked about that I mean really highlight the concern that I 
have throughout this country and the effect and impact that 
regulatory uncertainty, regulations have. You know, looking at 
a report--this report is dated December 16 of 2011 from the 
Small Business Administration--the cost of Federal regulations, 
$1.75 trillion; the cost of regulatory burdens from new rules 
proposed or enacted for 2011, over $90 billion; major 
regulations proposed or enacted in 2011 as defined in the 
Executive Order 12866, 750; the number of rules repealed in 
2011, one, and it was a spilled milk rule that the President 
spoke about at the State of the Union address.
    Mr. Puzder, in your experience have you seen a regulation 
or rule repealed?
    Mr. Puzder. Like I said, we have that 11-page document with 
57 categories and it just gets longer; it doesn't get shorter.
    Mr. Gardner. Ms. Walz?
    Ms. Walz. We have seen no reductions, just significant 
increase in the number of rules.
    Mr. Gardner. Mr. Shoop?
    Mr. Shoop. I do not recall any.
    Mr. Gardner. Mr. Luoto?
    Mr. Luoto. I don't see any. I think it is getting bigger.
    Mr. Gardner. And so I think that is the challenge we face. 
And as the members of Colorado small businesses and Colorado 
and Wyoming, 7,500 people have said economic certainty is the 
issue that they are concerned about and the costs that that 
will incur to them.
    Ms. Walz, in our remaining time just a couple of questions 
for you. We talked about the Sunflower plant. It is the 
regulatory environment that is currently preventing that plant 
from going forward, correct?
    Ms. Walz. I think the Utility MACT Rule, yes, we referred 
to the fact that the standards are well below what vendors can 
design to----
    Mr. Gardner. What they can actually design technologically 
available.
    Ms. Walz. Correct, yes.
    Mr. Gardner. Does that threaten the Colorado economy? Does 
that threaten the businesses that cooperatives work with?
    Ms. Walz. It threatens our ability to provide reliable and 
affordable energy to our entire service territory and 
Colorado's economy, yes.
    Mr. Gardner. And then going back to the SIP issue, if the 
EPA does not approve the Regional Haze State Implementation 
Plan that we have worked with bipartisan support in Colorado, 
will that potentially hurt jobs in Colorado and the Colorado 
economy?
    Ms. Walz. It will. Essentially, each time we have a new 
rule that is layered on top of all the others, the existence of 
the coal industry and our coal plants is threatened with each 
one.
    Mr. Gardner. Thank you. I yield back.
    Mr. Stearns. The gentleman yields back.
    I am going to have the last word as the chairman here and I 
just want to establish once and for all FactCheck.org--it is a 
project of the Annenberg Public Policy Center of the University 
of Pennsylvania--citing numbers provided to Congress in 2011 by 
the Office of Information and Regulatory Affairs, reports that 
the estimated cost of Federal regulation under Obama from the 
time he took office to the end of the 2010 fiscal year, not 
including regulations issued by the independent regulatory 
agencies, was somewhere between $8 billion and $16.5 billion. 
During the same initial stretch under President Bush, the 
estimated cost of new regulation was between $1.3 billion and 
$3.4 billion. All figures are adjusted for inflation.
    Now, I have one slide to conclude. Just this year--we are 
talking about regulations for 2012--from this we can see that 
since the President's executive order, economically significant 
rules repealed this year are none. We have costs of regulation 
going up, nothing has been repealed, and hours of annual 
paperwork is increasing. So the conclusion, at least from the 
standpoint of this chairman is, regulations are going up, 
nothing is being repealed. And I thank our witnesses today. I 
thank all of them for coming. I think that is----
    Ms. DeGette. Mr. Chairman, I am sorry to interrupt but 
where did you get the information in that slide?
    Mr. Stearns. We would be glad to furnish you. I think it 
came from the Senate Republican Policy Committee.
    Ms. DeGette. OK. Well, I reserve----
    Mr. Stearns. Well, you certainly can put in the record----
    Ms. DeGette [continuing]. Whether it should be put in the 
record.
    Mr. Stearns. Well, I think we will offer you to offer 
anything you want to change but that is it. And this committee 
is adjourned. Let me just say in conclusion I would like to 
thank all the witnesses but also if any member wants to put 
into the record, they have 10 business days, including you, Ms. 
DeGette, to submit questions for the record. And I ask the 
witnesses to agree to respond promptly to the questions. Thank 
you.
    [Whereupon, at 12:45 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]


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