[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                THE OBAMA ADMINISTRATION'S REGULATORY 
                 WAR ON JOBS, THE ECONOMY, AND AMERICA'S GLOBAL
                 COMPETITIVENESS
=======================================================================


                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                           REGULATORY REFORM,

                      COMMERCIAL AND ANTITRUST LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 28, 2013

                               __________

                           Serial No. 113-38

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov




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                       COMMITTEE ON THE JUDICIARY

                   BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        JERROLD NADLER, New York
HOWARD COBLE, North Carolina         ROBERT C. ``BOBBY'' SCOTT, 
LAMAR SMITH, Texas                       Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
SPENCER BACHUS, Alabama              ZOE LOFGREN, California
DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona                  Georgia
LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio                     JUDY CHU, California
TED POE, Texas                       TED DEUTCH, Florida
JASON CHAFFETZ, Utah                 LUIS V. GUTIERREZ, Illinois
TOM MARINO, Pennsylvania             KAREN BASS, California
TREY GOWDY, South Carolina           CEDRIC RICHMOND, Louisiana
MARK AMODEI, Nevada                  SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho                 JOE GARCIA, Florida
BLAKE FARENTHOLD, Texas              HAKEEM JEFFRIES, New York
GEORGE HOLDING, North Carolina
DOUG COLLINS, Georgia
RON DeSANTIS, FLORIDA
KEITH ROTHFUS, Pennsylvania

           Shelley Husband, Chief of Staff & General Counsel
        Perry Apelbaum, Minority Staff Director & Chief Counsel
                                 ------                                

    Subcommittee on Regulatory Reform, Commercial and Antitrust Law

                   SPENCER BACHUS, Alabama, Chairman

                 BLAKE FARENTHOLD, Texas, Vice-Chairman

DARRELL E. ISSA, California          STEVE COHEN, Tennessee
TOM MARINO, Pennsylvania             HENRY C. ``HANK'' JOHNSON, Jr.,
GEORGE HOLDING, North Carolina         Georgia
DOUG COLLINS, Georgia                SUZAN DelBENE, Washington
KEITH ROTHFUS, Pennsylvania          JOE GARCIA, Florida
                                     HAKEEM JEFFRIES, New York

                      Daniel Flores, Chief Counsel

                      James Park, Minority Counsel


                            C O N T E N T S

                              ----------                              

                           FEBRUARY 28, 2013

                                                                   Page

                           OPENING STATEMENTS

The Honorable Spencer Bachus, a Representative in Congress from 
  the State of Alabama, and Chairman, Subcommittee on Regulatory 
  Reform, Commercial and Antitrust Law...........................     1
The Honorable Steve Cohen, a Representative in Congress from the 
  State of Tennessee, and Ranking Member, Subcommittee on 
  Regulatory Reform, Commercial and Antitrust Law................     3
The Honorable Bob Goodlatte, a Representative in Congress from 
  the State of Virginia, and Chairman, Committee of the Judiciary     5
The Honorable Doug Collins, a Representative in Congress from the 
  State of Georgia, and Member, Subcommittee on Regulatory 
  Reform, Commercial and Antitrust Law...........................     6
The Honorable Darrell Issa, a Representative in Congress from the 
  State of California, and Member, Subcommittee on Regulatory 
  Reform, Commercial and Antitrust Law...........................     7

                               WITNESSES

Robert L. Glicksman, J.B. & Maurice C. Shapiro Professor of 
  Environmental Law, The George Washington University School of 
  Law
  Oral Testimony.................................................    13
  Prepared Statement.............................................    16
Drew Greenblatt, President and Owner, Marlin Steel Wire Products, 
  LLC, on behalf of the National Association of Manufacturers
  Oral Testimony.................................................    38
  Prepared Statement.............................................    40
Robert K. James, Member of the Avon Lake City Council
  Oral Testimony.................................................    53
  Prepared Statement.............................................    55
Douglas Holtz-Eakin, President, American Action Forum
  Oral Testimony.................................................    66
  Prepared Statement.............................................    68
William L. Kovacs, Senior Vice President, Environment, Technology 
  & Regulatory Affairs, U.S. Chamber of Commerce
  Oral Testimony.................................................    78
  Prepared Statement.............................................    80
Robert Weissman, President, Public Citizen
  Oral Testimony.................................................   103
  Prepared Statement.............................................   105

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Ranking Member, Committee of the Judiciary.....................     9

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Spencer Bachus, a 
  Representative in Congress from the State of Alabama, and 
  Chairman, Subcommittee on Regulatory Reform, Commercial and 
  Antitrust Law..................................................   149
Prepared Statement of the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Ranking Member, 
  Subcommittee on Regulatory Reform, Commercial and Antitrust Law   150
Prepared Statement of the Honorable Bob Goodlatte, a 
  Representative in Congress from the State of Virginia, and 
  Chairman, Committee of the Judiciary...........................   151
Prepared Statement of the Honorable Doug Collins, a 
  Representative in Congress from the State of Georgia, and 
  Member, Subcommittee on Regulatory Reform, Commercial and 
  Antitrust Law..................................................   153
Prepared Statement of the Honorable Henry C. ``Hank'' Johnson, 
  Jr., a Representative in Congress from the State of Georgia, 
  and Member, Subcommittee on Regulatory Reform, Commercial and 
  Antitrust Law..................................................   155
Material submitted by the Honorable Hakeem Jeffries, a 
  Representative in Congress from the State of New York, and 
  Member, Subcommittee on Regulatory Reform, Commercial and 
  Antitrust Law..................................................   156
Response to Questions for the Record from Robert L. Glicksman, 
  J.B. & Maurice C. Shapiro Professor of Environmental Law, The 
  George Washington University School of Law.....................   162
Response to Questions for the Record from Drew Greenblatt, 
  President and Owner, Marlin Steel Wire Products, LLC...........   166
Response to Questions for the Record from Robert K. James, Member 
  of the Avon Lake City Council..................................   169
Response to Questions for the Record from Douglas Holtz-Eakin, 
  President, American Action Forum...............................   171
Response to Questions for the Record from William L. Kovacs, 
  Senior Vice President, Environment, Technology & Regulatory 
  Affairs, U.S. Chamber of Commerce..............................   172
Response to Questions for the Record from Robert Weissman, 
  President, Public Citizen......................................   175


  THE OBAMA ADMINISTRATION'S REGULATORY WAR ON JOBS, THE ECONOMY, AND 
                    AMERICA'S GLOBAL COMPETITIVENESS

                              ----------                              


                      THURSDAY, FEBRUARY 28, 2013

                       House of Representatives,

                  Subcommittee on Regulatory Reform, 
                      Commercial and Antitrust Law

                      Committee on the Judiciary,

                            Washington, DC.

    The Subcommittee met, pursuant to call, at 9:01 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Spencer 
Bachus (Chairman of the Subcommittee) presiding.
    Present: Representatives Bachus, Goodlatte, Farenthold, 
Issa, Marino, Holding, Collins, Rothfus, Cohen, DelBene, 
Garcia, and Jeffries.
    Staff Present: (Majority) Daniel Huff, Chief Counsel; 
Ashley Lewis, Clerk; (Minority) James Park, Minority Counsel; 
and Susan Jensen-Lachmann, Counsel.
    Mr. Bachus. The Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law hearing will come to order. 
Without objection, the Chair is authorized to declare recesses 
of the Committee at any time. We are expecting some early 
votes, so we will try to get rolling. We welcome all our 
witnesses today and look forward to your testimony. Now we will 
go to opening statements, and the Chair recognizes himself for 
the purposes of an opening statement.
    This is the first of a series of hearings that this 
Subcommittee will hold on the Federal regulatory structure, its 
impacts, and potential regulatory reform. To be clear from the 
start, the argument is not that we don't need any regulations 
at all. Reasonable rules provide clear rules of the road for 
businesses so they have some certainty and know what to expect, 
they provide safeguards for consumers and the general public, 
and they provide protection for the environment. But clear and 
reasonable rules of the road that provide certainty are not 
what we have gotten from this administration, and that has been 
a major contributing cause to the continuing underperformance 
of the U.S. economy.
    That is something that I have experienced with the 
oversight of the Dodd-Frank Act, but it cuts across every 
Federal agency. For example, in 2011 the President ordered 
regulatory agencies to consider cost and benefits and choose 
the least burdensome path. We applauded that statement. The 
order continued, and I quote, ``The regulatory process must be 
transparent and include public participation.'' This sounded 
perfectly reasonable, and that is how it was reported.
    But the devil is in the details. It is at the 
implementation stage where the promises have failed to pan out, 
and it is there that a regulatory tax is imposed on jobs, the 
economy, and America's global competitiveness. Only an expert 
would notice how the administration's cost-benefit analysis has 
been skewed. For example, less than 0.01 of a percent of the 
claimed monetary benefits from the EPA's rule to reduce mercury 
emissions actually come from reducing mercury. The rest arises 
from the so-called incidental benefit of reducing particulate 
matter that was not the principal target of the regulation 
because such particulate matter was already considered by EPA 
to be generally within acceptable limits.
    What does this translate to? In my district in Alabama, it 
is the difference between a concrete plant in Leeds, Alabama, 
employing hundreds of people, being able to comply with the new 
regulations or potentially being shut down because of the cost.
    Many of the new regulations fall most heavily on small 
businesses that are the job creators in our economy. If you are 
a larger company, you can probably financially afford to hire 
an army of compliance officers. But if you are a small 
business, you are already stretched thin, and every extra 
regulatory cost means you have less money to invest in your 
business and hire workers. I think that is something that I 
think Republicans and Democrats are in agreement on, and that 
is the burden on small businesses.
    Factory workers, anxious about the economy, need to know 
about recent findings that over the next 10 years regulations 
could shave industrial output from between 2.3 to 6 percent at 
a time when we need more growth and jobs. Americans still 
looking for work need to be aware that agencies ignore the 
burden of job displacement when calculating regulatory cost. 
Agencies simply assume displaced workers will find a new job 
quickly. But a recent study shows overwhelming evidence that 
even temporary job displacements cause significant long lasting 
declines in earnings. Of workers who lost long-tenured jobs 
from 2009 to 2011, 44 percent were still unemployed 3 years 
later. Fifty-four percent of those who did find jobs earned 
less. Older workers were hit hardest.
    Communities bear the impact, too. In Avon Lake, Ohio, a 
plant is shutting down because of the rising costs associated 
with EPA's controversial utility MACT rule. Closures like this 
devastate families, neighborhoods, and the local tax base that 
schools and city governments depend on. We often think of 
regulatory tradeoffs affecting only businesses, but they affect 
individuals as well. If a regulation increases the price of a 
needed product without a corresponding benefit, it takes money 
away from a person that could be spent elsewhere that would 
have a greater health or safety benefit. This especially 
affects low-income Americans for whom money is already tight.
    This is another area which very provocative research is 
being done on the harmful effects of regulations on our most 
vulnerable citizens. During this series of hearings, we will 
examine the shortcomings and failures of the current regulatory 
system, with an eye to developing clearheaded, workable 
solutions. Federal agencies need to do a better job--a much 
better job--of determining when regulation is needed and 
proposing smarter regulations when it is. And in forming 
regulations we actually do have to consider the consequences on 
jobs and the economy, because that is the foundation on which 
everything else rests.
    Finally, I want to close with this video of a statement 
made by Federal Reserve Chairman Ben Bernanke at a Humphrey-
Hawkins hearing earlier this week. Please turn to our video 
monitor. I guess we need some sound, too.
    [Video shown.]
    Mr. Bachus. Okay. Thank you. At this time I recognize the 
Ranking Member for his opening statement.
    Mr. Cohen. Thank you, Mr. Chairman. First, I would like to 
put that video back on and get to the part where Bernanke says 
the sequester could hurt the deficit more than it could help. 
That was coming up in just a minute, I think.
    Mr. Bachus. Let me say this. In the hearing, I stated very 
clearly that Congress ought to come together. And Chairman 
Bernanke said we ought to come together and make long-term 
structural changes in our entitlement programs. And I think 
there is agreement on that across the aisle. And I have urged 
the Congress and the President to get to work.
    And we were all told that the sequester wasn't going to 
happen, and we all know that that is just another promise that 
didn't happen. So, you are absolutely right. That work should 
have started months ago. And we could actually raise the 
retirement age for Social Security in the future by 2 months 
and save more money than this sequester will save, and it will 
be a long-term structural change and less harmful for the 
economy.
    He also said that fee-for-services in our medical system 
was driving up costs, and that addressing that, reforming our 
health care system and doing away with fee-for-services and 
having the patient invest more in their own health care would 
change the entire dynamics of the debt.
    Mr. Cohen. Thank you. I appreciate that.
    Mr. Issa. Thank you for yielding all that time to the 
Chairman, too.
    Mr. Bachus. You have 5 minutes, Mr. Cohen.
    Mr. Cohen. Thank you, Mr. Chairman.
    Mr. Bachus. And for Mr. Issa, I think he only has a minute 
left.
    Mr. Cohen. Thank you.
    On a typical day, and today is a typical day, I get up, 
brush my teeth, shower, get bagel and bacon, coffee, get 
dressed, go to my car parked outside, and drive into the 
Capitol. And then I am in the office, and I work, I come to 
hearings such as this, I go to the House floor, I meet with 
constituents, and, you know, grab a bite to eat here and there, 
finish the day with dinner, and that is it.
    At the end of each week, when we are in session, I will fly 
back and forth from Memphis to Washington. And I do all this 
without thinking twice about whether any of these activities 
are going to be harmful to my health or whether there is going 
to be a risk of harm whatsoever. And that is because we take 
these activities for granted in our country because we have a 
strong regulatory system that allows us to go on with our lives 
and not have to be at risk so many times.
    We strive to protect our environment, our health, and 
ensure the safety of our workplaces, our public spaces, our 
consumer products, cars, airplanes, among other things. And we 
are concerned about our most vulnerable citizens who might get 
black lung disease if we didn't have regulations in mining, 
health care workers who are exposed to too much radiation, 
asbestos exposure to construction workers, and other of our 
most vulnerable citizens who are put in jobs that are often the 
least desired and the most at risk for health hazards. But 
regulations have helped over those years. Sinclair Lewis would 
think, I think, that regulations are good for our most 
vulnerable citizens, and so do most people, I think.
    The regulatory debates in this Subcommittee which we have 
had over the last couple of years have focused almost 
exclusively on the costs of implementing regulations, and there 
are costs indeed. It is often left to those of us on this side 
of the aisle to defend regulations and the benefits that they 
have, and the benefits consistently outweigh the costs of 
regulations. In addition to ignoring the net benefits of 
regulations, those who focus exclusively on the costs tend to 
ignore the greater costs of regulatory failure. Mr. Glicksman 
of GW Law School and Mr. Weissman of Public Citizen will 
discuss in greater detail regulatory failure, that that 
regulatory failure can be more costly for the economy and 
society than the existence or the creation of new regulations.
    Let's not forget that it was the lack of adequate 
regulations that caused the Deepwater Horizon oil spill, still 
in litigation, still affecting the Gulf Coast, or the mine 
disasters that we recently experienced. The mortgage 
foreclosure crisis was caused by the lack of adequate 
regulations and enforcement thereof. And the 2008 financial 
crisis and the great recession that followed and the sequester 
that we see today that does involve different issues that we 
have discussed.
    In short, there is a far greater human and economic cost to 
stopping agencies from regulating than there is in allowing new 
regulations to take effect. I will leave the rest of our 
discussion to our panel of witnesses and our question time, but 
I would like to ask this of our good Chairman. We ought to be 
able to have serious, substantive, and nuanced discussion about 
what problems might exist in the Federal regulatory system--
nothing is perfect, and indeed it isn't--and what Congress 
ought to do to address the problems. But to have hearings with 
inflammatory titles like ``The Obama Administration's 
Regulatory War on Jobs, the Economy and America's Global 
Competitiveness,'' those such inflammatory and partisan titles 
take us away from discussions of issues and make us have to 
defend our President and make this a fight back and forth over 
politics and verbiage. And that is not the way to resolve 
regulations and good policy. It makes it difficult for all of 
us to have a debate in a proper atmosphere.
    We will, as we did the last Congress, unfortunately, end up 
with a battle of talking points. So if we want to work on this, 
I would suggest that. I am afraid if I got on the floor and 
said something about war there would be an entire CNN episode 
about it, so we won't do that. And we know from the song, war, 
what is it good for? Absolutely nothing. So I hope we can move 
forward and do better, and I yield back the balance of my time 
to Mr. Issa or whoever.
    Mr. Bachus. Thank you, Mr. Cohen.
    I would now like to recognize the full Committee Chairman, 
Mr. Bob Goodlatte of Virginia, for his opening statement.
    Mr. Goodlatte. Thank you, Mr. Chairman. And thank you for 
holding this important hearing.
    Since the November 2012 election, the Obama administration 
has moved into overdrive in its regulatory war on jobs, the 
economy, and America's global competitiveness. Let me be clear, 
Congress cannot sit silent while America's economic growth is 
imperiled. One of my top priorities in this Congress will be to 
do everything possible to reduce the regulatory burdens that 
our Nation's small businesses are facing, to get more Americans 
back to work, and to help grow our economy.
    A study last summer by the Organization for Economic 
Cooperation and Development revealed that after measuring 
countries by the number of regulations they have, it is now 
easier to start a business in Slovenia, Estonia, and Hungary, 
than in America. According to former CBO Director Douglas 
Holtz-Eakin, countries from England to South Korea to Portugal 
have already undertaken regulatory reforms. England has been 
particularly aggressive, adopting a one-in, two-out rule for 
new regulations, which requires policymakers introducing a new 
regulation to rescind or modify an existing regulation that 
costs double so that the total regulatory burden is actually 
reduced. The governments of our international competitors are 
not merely paying lip service to lightening the regulatory 
load, they are taking meaningful actions.
    We seem to be moving in the opposite direction. Last year, 
the total U.S. paperwork burden grew by more than 355 million 
hours, or 4 percent. A 2012 report by the NERA Economic 
Consultants on the regulations affecting the manufacturing 
sector found that exports in 2012 might have been as much as 17 
percent lower than they would have been without the estimated 
regulatory burden. Such loss in output directly represents lost 
jobs and economic opportunities.
    Instead of the regulatory burden diminishing to keep 
American businesses competitive and hiring, experts expect the 
pace of regulation to increase in President Obama's second 
term. Just prior to Election Day, the National Journal reported 
that, quote, ``Federal agencies are sitting on a pile of major 
health, environmental, and financial regulations that 
lobbyists, congressional staffers, and former administration 
officials say are being held back to avoid providing ammunition 
to Mitt Romney and other Republican critics.''
    Now the floodgates are open. For example, the Patient 
Protection and Affordable Care Act and the Dodd-Frank Wall 
Street Reform and Consumer Protection Act created a host of 
regulatory obligations which agencies have yet to fulfill. 
Similarly, the American Action Forum identified $123 billion in 
possible regulations in the administration's 2012 Unified 
Regulatory Agenda that would also add more than 13 million 
hours of paperwork burden. It is no wonder that the 
administration delayed releasing this agenda and its plans for 
128 new economically significant regulations until after the 
election.
    What is most striking, perhaps, is this administration's 
insensitivity to the negative effects overregulation has on 
vulnerable groups. Overregulation costs American jobs. And a 
new study shows agencies' cost-benefit analyses fail to 
consider that over 75 percent of older workers who lose their 
jobs remain unemployed 3 years later, and those who can find 
work frequently must accept as much as 20 percent less in pay.
    Overregulation also disproportionately burdens low-income 
households. Because of the law of diminishing returns, new 
regulations require spending increasingly more money to 
mitigate increasingly smaller risks. Many of these costs are 
passed down to consumers. New research from the Mercatus Center 
shows low-income households would be much better off spending 
this money mitigating more immediate personal risks, for 
example, by using money that should rightfully be theirs to 
afford rents in safer neighborhoods.
    In light of these real trade-offs, I am deeply concerned 
that some pro-regulation advocates are calling for an executive 
order to rescind requirements that there be cost-benefit 
analysis of significant regulations. I hope that stories from 
Main Street about the negative impacts plant closures have on 
lives and communities will help sensitize regulators and their 
allies to the very real suffering that even well-meaning 
regulatory advocacy can impose.
    However, we cannot rely on hope to turn the tide of 
excessive regulation. I am committed to restoring 
accountability and providing relief from excessive regulation 
to our Nation's small businesses and job creators who need it 
most. Last Congress, the Committee reported a number of 
important and far-reaching bills to reform overregulation, ease 
burden on jobs and the American economy, and restore America's 
competitiveness. The House passed them all, but the Democrat-
led Senate refused to act, and President Obama threatened to 
veto them.
    The overreach of Obama administration regulations is one of 
the chief reasons the economy has failed adequately to recover 
and produce new jobs throughout the Obama administration. 
Congress and the President must act to take a different 
direction that will allow America's jobs, economy, and 
competitiveness to be restored. The House will do its part, and 
for the sake of our economic future, I call on the Senate and 
the Obama administration to do theirs.
    I thank the Chairman. I yield back.
    Mr. Bachus. Thank you, Chairman Goodlatte.
    I would now like to recognize Mr. Doug Collins of Georgia 
for his opening statement.
    Mr. Collins. Thank you, Mr. Chairman. I appreciate you 
convening a hearing on this important topic. I think this is 
one of the things that is vital to our country right now, and 
something we ought to look at to get us on a path to prosperity 
again.
    It is an unfortunate misconception to paint the regulatory 
arena as being disconnected from the everyday lives of 
Americans. Regulations affect the air we breathe, the type of 
car we drive, and the food we feed our pets. Unfortunately, the 
Obama administration has created a web of regulations that are 
too complex, too expensive, and completely ineffective. 
Economic growth cannot occur if job creators continue to be 
crushed by the fatal grip of overregulation.
    In the upcoming days I plan to introduce the Sunshine and 
Regulatory Decree Settlement Act of 2013. This legislation ends 
the abuse of consent decrees and settlements to require more 
regulations. Regulators often use consent decrees and 
settlements to secretly establish new rules outside the regular 
rulemaking procedures without transparency and without public 
participation. This sue-and-settle approach has enabled 
agencies to impose higher costs with no accountability to those 
directly impacted.
    One of the issues that has already been said today, and I 
think when we get into this there is a problem when we paint 
the fact that there is either one extreme or the other, that we 
need no regulation or we need overregulation. I think the 
problem we have got here is most people just want to get up, 
start their business or go to their workplaces, and be safe and 
do the things that need to be done. Government has a role, but 
government's role is not at the expense of business. 
Government's role is not at the expense of making the growth 
industry, as I had a constituent tell me yesterday, the only 
people we are hiring right now are people to do our regulatory 
reform, to make sure that we do the paperwork. That is not what 
this business was made to do. He wants to be able to expand his 
business in what he wants to be able to do in his field, not 
having to comply with overburdensome regulations that do not 
help his business.
    I look forward to this hearing from the witnesses on this 
issue and many others. I thank the Chairman, and yield back the 
balance of my time.
    Mr. Bachus. I thank you, Mr. Collins.
    I would now like to recognize the Chairman of the 
Government Oversight and Investigations Committee, and Member 
of this Subcommittee, Mr. Darrell Issa of California, for his 
opening statement.
    Mr. Issa. Thank you, Mr. Chairman. I would ask unanimous 
consent I have a full 5 minutes, in spite of my earlier 
outbreak.
    Mr. Bachus. All right.
    Mr. Issa. The Ranking Member, Mr. Cohen, talked about 
getting on an airplane without fear. Steve and I have been 
friends since he arrived here, and I know that when he arrived 
here several years ago he also got on that airplane without 
fear. We are not talking today about regulations in memoriam. 
We are not talking about decades and decades. We are not 
talking about reversing ones which have made our air and our 
water and our transportation safer.
    What we are talking about here today, and what I know that 
the witnesses will be speaking of, is the growth of new 
regulations in a nanny state that is attempting to regulate 
every aspect without concern for the cost. Our Committee pushed 
hard and continues to push hard for cost-benefit.
    Now, Mr. Greenblatt, I note, has a combination of stamped 
and probably multi-slide and every other machine it took to 
create that part in front of him. And on top of that, it has a 
plating. When I began work in my industry in Cleveland, Ohio, 
we still had chromium and other metals that were being dumped 
into the Cuyahoga River, getting into Lake Erie and getting 
into our drinking water. Again, throughout the years of the 
Clean Air and Clean Water Act, we have addressed actual health 
hazards, manufacturers taking their leftovers and putting them 
on the backs of American people trying simply to drink water 
and breathe air.
    But those days in fact have been a success. And rather than 
saying that it has been a success and making incremental 
changes closely analyzed to figure out whether or not it 
actually adds to life expectancy and quality of life, we on 
this side of the dais and those down Pennsylvania Avenue and 
beyond have an assumption that if they are not doing something 
and creating new rules and laws, they are obviously not doing 
their job.
    The fact is that the Ranking Member, as is often does, used 
talking points, and he talked about lack of regulation causing 
Deepwater Horizon. Nothing could be further from the truth. 
Failure to comply with existing regulations by the Federal 
Government was a major factor. On the very day that the 
Deepwater Horizon blew up, two individuals from Mineral 
Management Service came aboard that facility. In violation of 
any form of common sense, where they were required to be two 
separate people conducting investigations designed to be check 
and balance of what they saw, it was a father-son team. They 
came, they drank coffee, and they left.
    The truth is all of the materials and all of the 
information was honestly given to Mineral Management as they 
asked and they did not see a problem. Likewise, as the euphoria 
of debt far beyond that which people could pay, even in my 
original hometown of Cleveland, Ohio, caused people to have no 
possibility of paying their mortgages unless their home 
continued to rise in value and they could refinance, as that 
happened, the Federal Reserve, the treasurer, and others 
continued to talk about--and the President of the United States 
at that time, George W. Bush--continued to talk about the 
benefit of home ownership.
    So let us not rewrite history here today and say that all 
government needs to do is have more regulations. All government 
needs to do is do what it is required to do and do it well. 
Then regulations on a limited basis with a cost-benefit and a 
degree of transparency can be considered.
    In closing, I might say here today that there are three 
kinds of taxes. There are taxes in which we take money. And I 
would share with the Ranking Member a concern that we only take 
60 cents for every dollar we spend, clearly unsustainable, and 
we need to address that. There are taxes in which we ask people 
to do things at their expense--actually order them do them at 
their expense--and then don't consider it a tax. As a matter of 
fact, it is only tax deductible to the extent that you didn't 
make a profit and therefore do not have to pay taxes on it.
    Last but not least, there is the new tax in the Obama 
administration. That is that any time government does not 
provide more goods and services with somebody else's money you 
must be taxing people's ability to live their lives. The 
sequestration today is being talked about as though it is an 
onerous tax on every American if somehow 2.4 percent of 
spending were not to happen. For example, the Ranking Member, 
when he talks about going back and forth on that airplane, he 
has been doing it since the TSA had about 15,000 employees. 
Today they have 68,000 employees. There is no question as to 
why TSA stands for thousands standing around. When you triple 
the amount of employees for the same amount of flying 
personnel, you are inevitably going to have built in 
inefficiencies.
    So today our job is to listen to people who have dealt with 
these new regulations, listen to them honestly, and, Mr. Cohen, 
ask the question was that particular regulation necessary? Was 
that regulatory assertion necessary? Not should we have had the 
Clean Air and Clean Water Act, something that people on both 
sides of the dais agree with. And I yield back.
    Mr. Bachus. Thank you.
    I now recognize our Ranking Member, Mr. Steve Cohen, for 
the purposes of introducing an opening statement.
    Mr. Cohen. Thank you. Thank you, Mr. Chairman. Mr. 
Chairman, the Ranking Member of the full Committee, Mr. 
Conyers, has a statement. And while you were kind enough to 
allow me to read it, I won't do so.
    [The prepared statement of Mr. Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative 
 in Congress from the State of Michigan, Ranking Member, Committee on 
     the Judiciary, and Member, Subcommittee on Regulatory Reform, 
                      Commercial and Antitrust Law
    Today's hearing title reflects the 3 principal canards of the 
Majority's anti-regulatory agenda and I want to address each of these 
in detail.
    Let's first begin with the Majority's claim that regulations 
inhibit job creation.
    It is pretty incredible that the Majority continues to make this 
claim in light of the fact that there is absolutely no credible 
evidence establishing the fact that regulations have any substantive 
impact on job creation.
    And, that is not just me saying this. Bruce Bartlett, a senior 
policy analyst in the Reagan and George H.W. Bush Administrations, has 
explained:

          Republicans have a problem. People are increasingly concerned 
        about unemployment, but Republicans have nothing to offer them. 
        The G.O.P. opposes additional government spending for jobs 
        programs and, in fact, favors big cuts in spending that would 
        be likely to lead to further layoffs at all levels of 
        government[.]
          These constraints have led Republicans to embrace the idea 
        that government regulation is the principal factor holding back 
        employment. They assert that Barack Obama has unleashed a tidal 
        wave of new regulations, which has created uncertainty among 
        businesses and prevents them from investing and hiring.

    He then concludes:

          No hard evidence is offered for this claim; it is simply 
        asserted as self-evident and repeated endlessly throughout the 
        conservative echo chamber.

    Susan Dudley, who headed the Office of Information and Regulatory 
Affairs during the administration of George W. Bush, has been quoted as 
saying that it is ``hard to know what the real impacts of regulation 
are.'' She also stated that she was unaware of any ``empirically sound 
way'' to assess the impact that proposed rules have on jobs.
    And, during one of the many hearings held on this issue in the last 
Congress, the Majority's own witness clearly debunked the myth that 
regulations stymie job creation.
    Christopher DeMuth, with the American Enterprise Institute (a 
conservative think tank), stated in his prepared testimony that the 
``focus on jobs . . . can lead to confusion in regulatory debates'' and 
that ``the employment effects of regulation, while important, are 
indeterminate.''
    Another unsubstantiated claim that the Majority makes in support of 
its anti-regulatory agenda is that ``regulatory uncertainty is hurting 
the business community'' and makes American businesses less competitive 
in the global marketplace.
    Once again, Bruce Bartlett, the senior economic official from the 
Reagan and Bush Administrations, rejects this false claim:

        [R]egulatory uncertainty is a canard invented by Republicans 
        that allows them to use current economic problems to pursue an 
        agenda supported by the business community year in and year 
        out. In other words, it is a simple case of political 
        opportunism, not a serious effort to deal with high 
        unemployment.

    So make no mistake, today's hearing is yet another example of that 
political opportunism recognized by Mr. Bartlett.
    Perhaps the biggest canard in the Majority's arguments for so-
called regulatory reform is the purported damaging impact of 
regulations on the Nation's economy.
    Throughout the previous Congress, the Majority cited a deeply 
flawed study that estimated regulations had a $1.75 trillion cost of 
regulations.
    This figure is utterly unreliable and meaningless. And, again, 
don't take my word for this.
    The nonpartisan Congressional Research Service conducted an 
extensive examination of the study and found much of its methodology to 
be flawed.
    Moreover, CRS noted that the study's authors themselves 
acknowledged that their analysis was ``not meant to be a decision-
making tool for lawmakers or Federal regulatory agencies to use in 
choosing the `right' level of regulation.''
    At the hearing the Subcommittee held on this issue last September, 
Professor Lisa Heinzerling testified about her well-researched academic 
analysis of this study and its numerous methodological flaws.
    The Majority's focus on regulatory costs also completely and 
blatantly ignore the overwhelming net benefits of regulations.
    According to the Office of Management and Budget, the net benefits 
of regulations through the third fiscal year of the Obama 
Administration exceeded $91 billion, which is 25 times more than the 
net benefits during the first three years of the George W. Bush 
Administration.
    OMB also reports that for fiscal year 2010, federal regulations 
cost between $6.5 billion and $12.5 billion, but generated between 
$18.8 billion and $86.1 billion in benefits.
    Yet another concern that I have about this hearing is that it is 
the 17th time that the Committee has considered what is essentially the 
same topic: federal agencies and rulemaking.
    I know regulations play a major role in ensuring the safety of the 
food we eat, the cars we drive, the air we breathe, and the medicine we 
consume.
    And that the Nation's Great Recession was the result of too little, 
not too much regulation.
    Major financial distress in American history has often been 
triggered by a regulatory failure of some type. The Great Depression 
largely resulted from the failure of severely undercapitalized banks 
that engaged in imprudent lending practices and other speculative 
activities.
    The current Great Recession was largely fueled by an unregulated 
home mortgage industry and securitization market.
    But come on now. During the 112th Congress, this Committee did not 
hold a single hearing on:

          the ongoing foreclosure crisis and its crippling 
        effect on the Nation's ability to recover its financial 
        stability as well as that of millions of Americans in 
        communities across the Nation;

          the nearly lifelong peonage that millions of young 
        Americans must endure to repay private student loan debt, that 
        even bankruptcy will not alleviate; and

          the extremely deleterious effects of mandatory 
        minimums and the resultant overincarceration particularly has 
        on African Americans in our Nation.

    I could go on and on listing the critical issues that this 
Committee should consider.
    Finally, if we were really serious about creating jobs, then we 
should be focusing on those measures that will actually result in 
creating jobs.
    Just over a year ago, President Obama addressed a joint session of 
Congress at which he presented his American Jobs Act, a comprehensive 
bill that would have:

          cut payroll taxes for qualifying employers,

          fund a work program to provide employment 
        opportunities for low-income youths and adults;

          fund various infrastructure construction projects, 
        including the modernization of public schools; and

          start a program to rehabilitate and refurbishing 
        hundreds of thousands of foreclosed homes and businesses.

    Unfortunately, Congress chose to ignore this worthy initiative.
    As many of you know, I have a measure--H.R. 4277, the ``Humphrey-
Hawkins 21st Century Full Employment and Training Act''--which aims to 
provide a job to any American who seeks work.
    My bill would create a funding mechanism to pay for job creation 
and training programs.
    These jobs would be located in the public sector, community not-
for-profit organizations, and small businesses that provide community 
benefits.
    But, like the President's proposal, my legislation did not receive 
any consideration during the last Congress, which is unfortunate 
because both of these measures would have, in fact, created jobs and 
helped our Nation's economic recovery.
    It's time we legislate based on facts, not rhetoric. Unfortunately, 
I fear today's hearing will not enable us to accomplish that goal.
                               __________

    Mr. Cohen. But I will mention that what the statement 
contains therein, which I am going to offer to the Committee, 
is three basic principles. First, that the majority's claim 
that regulations inhibit job creation is not appropriate and 
correct. And he uses as his supportive individuals Bruce 
Bartlett, the senior policy analyst in the Reagan and George 
H.W. Bush administration, who concluded in a statement, no hard 
evidence is offered for the claim that regulations cost jobs, 
it is simply asserted as self-evident and repeated endlessly 
throughout the conservative echo chamber. He also cites Susan 
Dudley, who was the head of OIRA during the administration of 
George W. Bush. And she says it is hard to know what the real 
impacts of regulations are unaware of any empirical, sound way 
to assess the impact that proposed rules have on jobs.
    He also makes a point that this Committee is now on its 
17th hearing on basically the same subject and that the 
Committee seems to sometimes forget the positive facts of 
regulation. According to the Office of Management and Budget, 
the net benefits of regulations through the third fiscal year 
of the Obama administration exceeded $91 billion, 25 times more 
than the net benefits during the first 3 years of the George W. 
Bush administration. OMB also reported that for fiscal year 
2010, Federal regulations cost between $6.5 billion and $12.5 
billion but generated between $18.8 billion and $86.1 billion 
in benefits. That is the Office of Management and Budget. There 
is other salient information that I will submit as part of the 
record, and hope that they will be perused and absorbed. Thank 
you, Mr. Chairman.
    Mr. Bachus. Thank you, Mr. Cohen. And I want to commend you 
as an Alabamian on your active participation in our civil 
rights pilgrimage. As you know, Alabama was kind of the 
epicenter of the civil rights struggle.
    We have a very distinguished panel today, and I will begin 
by first introducing our witnesses.
    Professor Robert Glicksman, welcome.
    Professor Glicksman has published widely on the subject of 
environmental and administrative law. Before coming to George 
Washington University in 2009, he taught at the University of 
Kansas School of Law, where he was the Robert W. Wagstaff 
Distinguished Professor of Law. He is a graduate of Cornell 
School of Law. And Professor Glicksman worked in private 
practice at a firm in Washington, D.C., where he focused on 
environmental, energy, and administrative law issues. Professor 
Glicksman joined the Center for Progressive Reform in 2002 and 
has sat on its board of directors since 2008.
    Our next witness, Mr. Drew Greenblatt. Mr. Greenblatt is 
the President and CEO of Marlin Steel in Baltimore, Maryland. 
It is one of the fastest growing companies in the United 
States. Marlin Steel exports engineering baskets and custom 
sheet metal fabrications to 36 countries around the world. Mr. 
Greenblatt is a leading voice for small business manufacturing, 
as well as taxation, regulation, trade policy, and economic 
growth. He serves as an executive board member of the National 
Association of Manufacturers and as Chairman of the board of 
the Regional Manufacturing Institute. In addition, Mr. 
Greenblatt serves on the Maryland Commission on Manufacturing 
Competitiveness and on the Governor's International Advisory 
Council. He received his bachelor's degree from Dickinson 
College and an MBA from Tulane University.
    Welcome.
    Mr. Greenblatt. Thank you.
    Mr. Bachus. Mr. Rob James is Chairman of the Public Service 
Committee on the Avon Lake City Council in Ohio, a town which I 
named in my opening statement. From 2006 to 2012, he served as 
the assistant attorney general for the Ohio Attorney General's 
office. He clerked in the Tenth District Court of Appeals from 
2005 to 2006. He received an MBA in diplomacy and foreign 
affairs from Miami University, and a J.D. From Catholic 
University Columbus School of Law.
    Welcome, Mr. James.
    Mr. Douglas Holtz-Eakin is President of the American Action 
Forum and commissioner on the congressionally chartered 
Financial Crisis Inquiry Commission. He began his career at 
Columbia University and moved to Syracuse University, where he 
became trustee, professor of economics, Chairman of the 
Department of Economics, and associate director of the Center 
for Policy Research. In 1989, and from 2001, he served as chief 
economist of the President's Council of Economic Advisers. Mr. 
Holtz-Eakin is a former director of the Congressional Budget 
Office and served as the economic policy director for the John 
McCain Presidential campaign. Mr. Holtz-Eakin serves on the 
board of the Tax Foundation, National Economists Club, and the 
Research Advisory Board of the Center for Economic Development. 
He received his B.A. In economics and mathematics from Denison 
University, and a Ph.D. in economics from Princeton University.
    And have read several of your articles and books. And you 
are no stranger to Congress. And we welcome you back.
    Mr. William Kovacs provides the overall direction, 
strategy, and management for the Environmental, Technology and 
Regulatory Affairs Division at the U.S. Chamber of Commerce. 
Since joining the Chamber in March 1998, Mr. Kovacs has 
transformed a small division concentrating on a handful of 
issues and Committee meetings into one of the most significant 
in the organization. His division initiates and leads 
multidimensional national issue campaigns on energy 
legislation, complex environmental rulemaking, 
telecommunications reform, emerging technologies, and applying 
sound science to the Federal regulatory process. Mr. Kovacs 
previously served as chief counsel and staff director for the 
House Subcommittee on Transportation and Commerce. He earned 
his J.D. From Ohio State University School of Law and a 
bachelor of science degree from the University of Scranton 
magna cum laude.
    Mr. Rob Weissman is President of Public Citizen. Mr. 
Weissman works in the area of economics, health care, trade and 
globalization, intellectual property, and regulatory policy, 
and on issues relating to financial accountability and 
corporate responsibility. He has worked to lower pharmaceutical 
prices for AIDS victims and others in the developing world. Mr. 
Weissman has appeared on television and radio, and has been 
published and quoted in many newspapers. He earned his J.D. 
Magna cum laude from Harvard Law School and has led Public 
Citizen since 2009. Previously, he was the director of the 
nonprofit organization Essential Action, and edited the 
magazine Multinational Monitor, which tracks the activities of 
multinational corporations and reports on the global economy.
    And I am sure we will be hearing from you on many future 
occasions, too. So we welcome you to the Committee.
    We will now proceed under the 5-minute rule with questions. 
No, I am sorry, we will now have the opening statements from 
our witnesses, starting with Mr. Glicksman, Professor 
Glicksman. Mr. Frank one time had a hearing where he forgot to 
have the opening statements, and he started doing his questions 
and got about halfway through before he let the witnesses 
speak.
    Thank you, Mr. Glicksman. Professor.

  TESTIMONY OF ROBERT L. GLICKSMAN, J.B. & MAURICE C. SHAPIRO 
     PROFESSOR OF ENVIRONMENTAL LAW, THE GEORGE WASHINGTON 
                    UNIVERSITY SCHOOL OF LAW

    Mr. Glicksman. My name is Robert Glicksman. I teach at the 
George Washington University Law School, and I thank the 
Committee for asking me to speak today. My testimony makes 
several points about the impact of regulation on society and 
the likely effect of proposals such as those introduced in 
Congress in the past couple of years, which would dramatically 
alter the manner in which agencies are required to adopt 
regulations. My written testimony elaborates on each point, 
which I will summarize today.
    First, regulations often provide great benefits to the 
public interest, such as by protecting the health and safety of 
Americans from pollution and other harms. As a necessary 
corollary, proposals that would indiscriminately block 
regulation would reduce or eliminate those benefits. In other 
words, even though those trying to slow down our regulatory 
system focus on the costs of regulation, they tend to ignore 
the very real costs that result from a failure to regulate.
    In the environmental area, once those costs have been 
incurred, it is typically disproportionately expensive to 
remedy the harms caused by inadequate regulation, and it may be 
impossible to do so. Some illnesses are not reversible, to say 
nothing of deaths. Even where illness is reversible, the pain, 
suffering, and reduced productivity that resulted before a 
regulatory fix took effect cannot be eliminated retroactively. 
So costs flow from decisions not to regulate, just as they do 
from decisions to regulate.
    Second, the existing Federal regulatory system is already 
process heavy. It is characterized by multiple regulatory 
obstacles and burdens that result from analytical duties that 
are at best duplicative and sometimes of little apparent value. 
The legislative proposals placed on the table in recent years 
would make this situation worse, not better.
    In addition, the notion that changes are needed to remove 
barriers to effective participation in regulatory processes for 
industries and other affected interests is hard to fathom. The 
Federal Administrative Procedure Act and related Federal laws 
already provide ample opportunities for such participation. 
Studies show that regulated entities dominate the aspects of 
the regulatory process that involve agency solicitation and 
public comment.
    Legislation is not needed to give regulated businesses even 
greater access to regulators than they already have or to 
improve the information base upon which agencies make 
regulatory choices. Rather, this kind of legislation would add 
to the regulatory thicket that already ensnares agencies, 
perhaps by design, and hinders the adoption of even the most 
needed and beneficial regulations. In addition, it is not hard 
to imagine the approval process under a bill such as the REINS 
Act from becoming a nakedly political exercise, reflecting the 
political power of special interests rather than a fair and 
informed evaluation of the pros and cons of regulation. 
Rulemaking needs to become less, not more politicized.
    Third, despite numerous claims to the contrary, there is 
little reason to believe that existing Federal regulations 
issued by agencies such as EPA are imposing disproportionate 
costs or inhibiting economic recovery. Studies alleging 
negative economic effects tend to both overestimate the costs 
of regulation and discount or completely ignore regulatory 
benefits. For one thing, these studies often rely on estimates 
of regulatory costs that were supplied by regulated entities 
before the regulations were adopted, at a time when they had 
significant incentives to overestimate these costs. For 
another, retrospective studies of regulations adopted by 
agencies such as OSHA and EPA often show that actual compliance 
costs turned out to be significantly lower than predicted 
before the regulations were adopted.
    Similarly, claims that the uncertainty created by 
regulation poses an obstacle to economic growth are not 
convincing. Even if they were, the legislative proposals being 
considered would increase, not decrease that uncertainty by 
dragging out the regulatory process. Some industries have 
recognized the ability of rapid regulatory decisions to create 
a climate of certainty that businesses prefer. The major auto 
manufacturers, for example, did so in supporting EPA and 
Department of Transportation efforts to increase the fuel 
efficiency of cars and trucks.
    Finally, if efforts to refashion the regulatory process 
proceed, they should be redirected. Congress should focus on 
ensuring that agencies have adequate resources to carry out the 
tasks assigned to them by statute. The proponents of change say 
they are concerned about agencies that take regulatory 
shortcuts. If so, they should be worried about forcing agencies 
to operate on shoestring budgets while heaping ever more 
burdensome procedural duties on them.
    Thank you.
    [The prepared statement of Mr. Glicksman follows:]

    
    
    
    
    

                               __________
    Mr. Bachus. Thank you.
    Mr. Greenblatt?

TESTIMONY OF DREW GREENBLATT, PRESIDENT AND OWNER, MARLIN STEEL 
 WIRE PRODUCTS, LLC, ON BEHALF OF THE NATIONAL ASSOCIATION OF 
                         MANUFACTURERS

    Mr. Greenblatt. Chairman Bachus, Ranking Member Cohen, 
thank you for inviting me today to testify----
    Mr. Bachus. I am not sure the microphone is on. Or just 
pull it right under you. Get it as close as you can there.
    Mr. Greenblatt. Is this better?
    Mr. Bachus. Better.
    Mr. Greenblatt. Okay. Great.
    Mr. Bachus. Much better.
    Mr. Greenblatt. Thank for inviting me today to discuss 
regulation and its impact on manufacturing. My name is Drew 
Greenblatt. I am the owner of Marlin Steel. We are a 
manufacturer of sheet metal baskets, wire baskets. We make 
everything in the USA. We export to 36 countries. We make it in 
Baltimore City. Twenty percent of our employees are degreed 
mechanical engineers. We primarily use recycled steel. All of 
our steel comes from Indiana, Illinois, and Pennsylvania.
    When I bought the company, the company made $800,000 in 
sales, we had 18 employees. Now we have over 32 employees, and 
we are growing. We have grown 7 years in a row. I am on the 
board of the National Association of Manufacturers. I am an 
executive board member. We represent 12,000 factories 
throughout America, and both small and large factories. A total 
of 12 million people are represented by NAM.
    America is the world's largest manufacturer. Eighteen 
percent of global manufacturing is done by America. More than 
China. And we support 17 million jobs. These are great jobs, 
high-paying jobs. The average wage of a manufacturer is 
$77,000. We want to coddle these jobs. We want these jobs to 
grow. Matter of fact, since 2009 they have grown a half million 
jobs.
    However, we have had a setback. At the bottom of the 
recession we lost 2 million jobs. We need to have improved 
economic conditions and improved government policies so that we 
can grow these jobs to heights that we have never seen in the 
past.
    NAM has a growth agenda, four goals for manufacturing 
resurgence in America. Number one, we want to be the best place 
in the world to manufacture. Number two, we want to be the 
world's best innovator. Number three, we need access to the 
global markets. We need to sell to the 95 percent of the world 
that doesn't live in America. Number four, we have to have the 
best trained workforce in the world.
    One of our biggest challenges are poorly designed 
regulations. Duplicative paperwork causes a lot of heartburn 
and slows us down from our mission of growing, growing, 
growing, and hiring people. Let me give an example of what has 
happened in our government and with Marlin. We got a love 
letter from the Department of Treasury, and it was a $15,000 
fine in 2010. Why? Because in 2006, there was a 20-page form 
sent to me. I diligently signed it in two places. However, in 
2006 I missed one signature, and I got a $15,000 fine.
    So I had my smartest people trying to fight this. It was a 
lot of aggravation. It was a lot of anxiety. And it is a 
complete lack of mission-critical focus for a company that is 
trying to hire people in the inner city of Baltimore.
    Let me give you another example. We export. We make 
everything in Baltimore City using American steel. And we 
export to 36 countries, including China, okay? This is a good 
thing for our country. However, it takes time to fill out all 
the paperwork to ship and export, which is a good thing. So we 
have to have very smart people filling out all kind of forms 
that doesn't add any value. So, for example, it takes us 3 
minutes for a NAFTA form and it is 20 minutes for a form that 
is non-NAFTA. That is a waste of our time and waste of our 
smartest people's efforts.
    But it is not just Marlin. Seventy-four percent of 
manufacturers said unfavorable business climate caused by 
regulations and taxes is a primary challenge facing business. 
And this has gone up from 62 percent. And this poll was taken 
in December. Seventy-six percent indicated that a pressing 
priority for the Obama administration and this Congress should 
be reducing the regulatory burden for the factories.
    A couple examples of the cost burden on us. It is about 
$14,000 per employee. I assure you China doesn't have these 
kinds of burdens on their factories. And for small factories, 
it is closer to $28,000 per factory--per employee at a factory. 
So NAM has five ideas on how we can improve the regulatory 
environment so that we could grow jobs and hire more people and 
get us out of the recession.
    Number one, we have to hold independent regulatory agencies 
accountable. We need agencies like the NLRB, the SEC, the 
Consumer Product Safety Commission to have control by the 
executive branch. Congress should confirm this authority to the 
President.
    Number two, we need to streamline regulations through 
sunsetting them. Recently, Representative Randy Hultgren of 
Illinois has the Sunset and Review Act of 2013. This would 
implement a mandatory retrospective review of regulations to 
remove conflicting and outdated laws. This is wonderful. We 
need this.
    Three, we have to increase sensitivity to small business. 
Small businesses are burdened more than the average company.
    Number four, we have to strengthen and codify sound 
regulatory principles. We have to do things based on science 
and math.
    Number five, we have to improve the institutions. We have 
to have these offices properly staffed and resourced.
    So in conclusion, Congressman Bachus, Ranking Member Cohen, 
and Members of the Subcommittee, thank you again for this 
opportunity to testify today. The President stated in his 
Executive Order 13653 on improving regulations, and regulatory 
review and our regulatory system should promote economic 
growth, should promote innovation and competitiveness, and job 
creation. Manufacturers agree with the President, and we are 
committed to working toward policies that will restore common 
sense to our regulatory system. We hope this Subcommittee will 
hold the administration to its commitment in the executive 
order. The best way to ensure continued economic growth and 
employment by enacting a comprehensive, consistent set of 
policies that allow manufacturers to compete in the global 
marketplace. Reforming our regulatory systems to prevent the 
continued piling on of unnecessary regulations is an immediate 
priority.
    [The prepared statement of Mr. Greenblatt follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


                               __________
    Mr. Bachus. Thank you, Mr. Greenblatt.
    And, Mr. James, welcome to you.

                 TESTIMONY OF ROBERT K. JAMES, 
              MEMBER OF THE AVON LAKE CITY COUNCIL

    Mr. James. I would like to thank Chairman Bachus, Ranking 
Member Cohen, and the other Members of the Subcommittee for 
inviting me to testify today. My name is Rob James, and I am a 
member of the City Council of Avon Lake, Ohio, where I 
represent the residents of Ward 1. Avon Lake is a beautiful 
community of over 23,000 residents on the shores of Lake Erie, 
approximately 20 miles west of Cleveland.
    Although I am currently an attorney in private practice, I 
previously served as an assistant attorney general for the Ohio 
Attorney General, where I represented the State of Ohio and its 
agencies, including the Ohio EPA. My work as an assistant 
attorney general included enforcing the environmental laws and 
regulations, and ensuring that the natural resources of Ohio 
were protected. However, I am here today because I think it is 
important that Congress understands the impact of Federal 
regulation, and specifically Federal environmental regulation 
on local communities such as Avon Lake.
    Almost exactly a year ago, on February 29, 2012, GenOn 
Energy, Inc., announced that it would close the coal and fuel 
oil-fired electric generating plant in Avon Lake in 2015. The 
Avon Lake Generating Station is capable of generating 734 
megawatts, providing baseload electric capacity and load-
following capability to the grid, as well as essential peaking 
capacity and black start capability. This facility plays an 
important role in providing a reliable and affordable supply of 
electricity.
    The reasons behind this closure are clear. GenOn stated 
that the closure was a result of the rising costs associated 
with EPA's regulations and the fact that the overwhelming costs 
associated with complying with the rules could not be recovered 
by continuing to operate the facility. In particular, GenOn 
cited the EPA Mercury and Air Toxic Standards rule, known as 
MATS, as the primary reason motivating the Avon Lake 
deactivation.
    On July 22, 2012, NRG Energy, Inc., and GenOn announced 
that they would combine the two companies, leaving NRG as the 
successor company. Despite the merger, NRG has publicly stated 
that the Avon Lake Generating Station remains as schedule to be 
deactivated in 2015. Although NRG has left open the possibility 
of reevaluating the projected deactivation of the facility, and 
there is the prospect that the small oil-fired boiler may 
remain operational, the unavoidable truth remains that the Avon 
Lake facility will be deactivated in 2015.
    While some may celebrate the closure of these types of 
facilities based on broader policy objectives, the loss of 
power plants as a consequence of Federal regulation has a very 
real impact on communities in which they are located. These are 
not just abstract costs. The families of my community will have 
to absorb these significant losses.
    The most immediate impact of the closure will be on the 80 
people employed at the Avon Lake facility. These type of 
quality jobs at the Avon Lake plant are increasingly hard to 
find in our country, let alone in Ohio and in the greater 
Cleveland area. But it is more about than just the jobs or the 
people employed at the plant. Instead, it is about the ripple 
effect that harms an entire community. In present dollars, 
closure of the Avon Lake generating facility will cost the city 
of Avon Lake $69,000 in income taxes and over $291,000 in 
property taxes each year.
    This loss of taxes does not just represent the loss of 
general revenue used to fund the city and its programs. 
Significantly, a sizable portion of the property taxes 
collected is used to fund Avon Lake paramedics and emergency 
medical services. The loss of $71,000 annually from the EMS 
budget, which is the amount that would be lost from the 
closure, would reduce the EMS operating budget by half. 
Undoubtedly, this will have a direct impact on the health of 
Avon Lake residents.
    Even more concerning is the impact the closure will have on 
the Avon Lake School District and other educational 
institutions in Avon Lake. At present, Avon Lake schools 
collect $1.8 million in utility taxes alone, and another $1.5 
million in real property taxes each year. This potential loss 
of $3.3 million each year would have an unimaginable effect on 
Avon Lake schools. Not only will the loss of revenue directly 
impact the ability of the schools to provide a high quality of 
education for all students, but many of the programs offered by 
the schools for students with the greatest needs will be lost.
    In addition, consumers in northeastern Ohio are likely to 
pay more for their electricity. Catholic Charities of Cleveland 
has previously testified to Congress that the loss of power 
plants would have a devastating effect on the people of Ohio 
and on our country, particularly the poor and elderly.
    As the Subcommittee continues to evaluate the extent and 
the impact of Federal regulation, I hope you will keep in mind 
communities like Avon Lake. While government regulation is 
appropriate in certain circumstances, the Federal Government 
must understand the consequences of its regulations on our 
communities. Places like Avon Lake need affordable and reliable 
electricity, a strong educational system, and opportunities for 
our economies to rebuild and grow. The U.S. economy is still 
struggling to recover, and northeastern Ohio is at the center 
of the struggle. We know that we can have clean air, good jobs, 
and reliable electricity, but only if policies are implemented 
based on sound analysis and with full consideration of the real 
costs of the choices made by regulators.
    Thank you again for the opportunity to testify today.
    [The prepared statement of Mr. James follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Bachus. Thank you, Mr. James.
    And now, Dr. Holtz-Eakin, we welcome you. And let you give 
your opening statement.

 TESTIMONY OF DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION 
                             FORUM

    Mr. Holtz-Eakin. Chairman Bachus, thank you. Ranking Member 
Cohen, Members of the Committee, it is a privilege to be here 
today. I submitted a written testimony which is a very 
elaborate accounting of recent regulatory costs, both annually, 
cumulatively over the past several Congresses, those that can 
be attributed to major pieces of legislation such as the 
Affordable Care Act, the Dodd-Frank legislation, and attempted 
to put these in a global context and to identify particular 
impacts on small businesses. It is chock full of numbers, and I 
respect you too much to go through it all.
    Let me just say three things. Number one, as a starting 
point, these regulatory costs are quite significant. At the 
moment, there are 128 so-called economically significant 
regulations under consideration. We have seen nearly $300 
billion in regulatory activity in 2011, another $200 billion in 
2012. Over the past 4 years, roughly $520 billion in regulatory 
costs.
    I would point out that these are on the same order of 
magnitude as the much ballyhooed fiscal cliff tax increase we 
saw at the beginning of the year, but often get much less 
attention. And their likely incidence, the people who will 
ultimately bear their costs, are much more focused on workers 
and the middle class than those increases would be. They are 
also having an increasing impact on U.S.' standing in 
international competitiveness. And as Chairman Goodlatte 
mentioned in his remarks, the U.S. is lagging behind other 
countries in terms of broad-based attempts to look at the 
impact of the regulatory system on their economic performance.
    Britain got a lot of attention for its one-in, two-out 
approach, but countries as small as Portugal are looking at the 
impact of their regulatory approaches on economic performance. 
They have adopted something called the Simplex approach. The 
Organization for Economic Cooperation and Development has 
placed regulatory review at the top of its policy agenda. And I 
think all of this highlights the importance of thinking about 
this for the United States, where we have in recent years seen 
two executive orders from the President, which are laudable, 
but which are small by comparison and have not produced large 
changes in the regulatory burden.
    The second point I would make is that I believe it is 
indisputable that this is slowing the recovery from the very 
large recession that followed the financial crisis of 2008. It 
is straightforward textbook economics to recognize the impact 
of large tax increases on the pace of such recoveries. The 
regulatory burdens are of the same character. And as I 
mentioned, they are quite large, over $0.5 trillion dollars.
    Some of the pieces of legislation have had very specific 
and large-scale impacts. The Affordable Care Act has a big 
regulatory burden, $35 billion in measured regulatory costs, 
something like $80 million in hours of compliance.
    But it is also now recognized to have large impacts across 
the economy. The employer mandate to provide insurance is a 
real impediment to labor market performance. It is going to hit 
especially minimum wage workers, where employers will be 
obligated to layer on top of that existing compensation more in 
the way of health compensation with no offset in cash wages. 
That is going to hurt hiring. We are already seeing a spate of 
companies reorganize the hours of work to make sure that people 
fall under the threshold for full-time workers, and thus create 
part-time employment instead of full-time employment. That is a 
cost by any measure.
    We have done a lot of research at the American Action Forum 
on the implications of the various mandates within the 
Affordable Care Act for greater benefits, the MOR rule, things 
like that, on the costs of insurance. And those insurance costs 
in an employer-sponsored system will be passed along as costs 
to the labor force, and thus impede hiring and expansion as 
well. So we have seen these kinds of impacts, and they are 
indeed slowing the recovery.
    The last point I would emphasize is that many of these 
costs are concentrated in disproportionate ways on smaller 
businesses. One of the outstanding features of the data that we 
have seen over the past several years is the diminished rate at 
which small businesses are created in the United States. It is 
also an empirical regularity that small-business creation is 
associated with job creation. It is new firms that create a lot 
of jobs. The diminished creation of small businesses is 
directly related with our poor job growth.
    In the testimony there is a table that looks, for example, 
at the Affordable Care Act rules on small businesses, from menu 
labeling, to vending machine labeling, to an enormous number of 
payment rules. All of these I think are having a big impact. 
And the Dodd-Frank rule does the same thing. We did some work 
on what the combination of the QRM, QM, and Basel III accords 
will do for mortgage origination in the United States. In 
normal circumstances, it will be down about 20 percent. That 
translates directly into smaller number of housing starts. And 
housing contractors are one of our most vibrant small 
businesses.
    So I am pleased to have the chance to be here today. I look 
forward to answering your questions, and would just raise the 
importance of these issues on our overall economic importance 
and growth.
    [The prepared statement of Mr. Holtz-Eakin follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Bachus. Thank you very much.
    And now, Mr. Kovacs, I welcome you and the Chamber to this 
hearing.

    TESTIMONY OF WILLIAM L. KOVACS, SENIOR VICE PRESIDENT, 
 ENVIRONMENT, TECHNOLOGY & REGULATORY AFFAIRS, U.S. CHAMBER OF 
                            COMMERCE

    Mr. Kovacs. Good morning, Chairman Bachus and Ranking 
Member Cohen and Members of the Committee. Thank you for 
inviting me here. I guess when Congressman Cohen was saying 
this is the 17th hearing, one of the things that was going 
through my mind is, I think this is my 17th year talking about 
some form of regulatory reform, and I guess it sort of feels 
like Groundhog Day.
    One of the things I wanted to do is maybe give a little bit 
of perspective without just going into this reg is bad or this 
reg----
    Mr. Bachus. Pull that just a little closer to you.
    Mr. Kovacs. Certainly.
    Mr. Bachus. Thank you.
    Mr. Kovacs. Is that fine?
    Mr. Bachus. That is great.
    Mr. Kovacs. You know, when I was preparing for the 
testimony, we sort of looked at the legislative history. This 
issue has been going on as to whether or not regulations harm 
jobs for almost 45 years. Congress had, in the 1960's, a very 
extensive debate at the beginnings of the Clean Air Act, and 
what was so fascinating about the debate is, if you looked at 
it, some of the Democrats at that time had some of the same 
issues as the Republicans have today. And what was interesting 
is--and we are talking the Bella Abzugs of the world and 
Jennings Randolphs--they recognized, the Congress recognized 
overwhelmingly that they needed to clean the air and the water. 
There were serious environmental problems and they had occur. 
But they also recognized that as part of that they were going 
to impose regulations to protect health and safety that were 
going to have adverse economic impacts on cities, industries, 
and people. And they came to a deal, which is something 
Congress could do in those days, and that is, they decided that 
they were going to give the agencies the authority to put the 
regulations in that would protect health and welfare.
    In exchange, Congress asked the agency, in particular EPA, 
to do what they call a continuing evaluation of potential job 
loss and shifts in employment. And why that was so important is 
because they knew they were putting these burdens on society. 
And when they were putting the burdens on, Congress needed to 
be able to monitor what was happening and what was happening to 
particular industries.
    And this is not something that, you know, we are now 
imagining. There were two Supreme Court cases, one written by 
Justice White, who was a liberal, and one by Scalia, who is a 
conservative, both recognizing the same principle: That this 
was where it acted. But what happened is, over the years, 
Congress forgot to do its oversight, so I thank you for doing 
more, and the agencies themselves forgot--they remembered to do 
the regulations, they remembered to say costs aren't a problem, 
but they also forgot to do the continuing analysis which showed 
the impact on jobs, and that is really crucial.
    And so one of the things that, as the chamber was looking 
in this, we wanted to know what has happened in the system. And 
we did this study, we had hired it out to NERA, and we asked, 
from 1997 forward what has the EPA done in terms of any kind of 
ananalysis on the effects of these regulations on employment? 
And one of the things we found is, out of the 58 regulations, 
they only looked at jobs 18 times, and out of the 18 times that 
they looked at jobs in some way, 16 of them were the wrong 
analysis. They used a partial versus an economy-wide analysis. 
But they never did the continuing analysis, and the difference 
between the RIA and the continuing is the RIA looks at a very 
specific industry and asks the question, what does it take to 
come into compliance, and that model will show job creation.
    On the other side of the issue, if you do an economy-wide, 
you see the costs that you are imposing on the industry flow 
through the economy. And I wanted to give you an idea of just 
the difference using only EPA statistics.
    If you did the Utility MACT using EPA's data, just EPA's 
data, EPA got 54,000 jobs created. That is what it would have 
taken for that industry to come into compliance. If you look at 
the added costs that flow through society, you come up with a 
180,000 to 215,000 job loss. And in some of the regs that are 
going to come out later this year, like ozone, for example, EPA 
refused to do even a regulatory analysis looking at impact, but 
we decided to do it, and it is 609,000 jobs. So these are big 
differences.
    The point that I am really trying to make as I wrap up my 
last 38 seconds is, this is an institutional issue. Congress 
has made a deal. You passed the law. And where I say it is an 
institutional issue is, the agencies really at this point in 
time--I mean, you may have some control over their budget but 
it is getting to be less and less--but the agencies are really 
free to do what they want. And at some point, we really beg 
you, that the Congress needs to get involved in the process 
because it is a serious process. It does involve not just cost 
and benefit, that is very theoretical, but it does involve real 
people, real displaced workers, real communities. And when 
these regulations hit, they are not affecting what we would 
call computer model people. These regulations are affecting 
real people and displacing real people. Thank you very much.
    [The prepared statement of Mr. Kovacs follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Bachus. Thank you, Mr. Kovacs.
    And, Mr. Weissman. And we will get the microphone and we 
won't start the time till we have got all that in place.

           TESTIMONY OF ROBERT WEISSMAN, PRESIDENT, 
                         PUBLIC CITIZEN

    Mr. Weissman. Want the rules of the road be fair for 
everybody.
    Thank you very much, Mr. Chairman, Mr. Cohen, Members of 
the Committee. I have three points today, and I will disclose 
out front that the third point has subpoints. So before you 
criticize my math.
    The first point is this: The regulatory system in this 
country makes us a stronger Nation, makes us healthier, makes 
our economy more secure, makes us fairer, makes our environment 
cleaner. It is a point that I think is lost in much of the 
regulatory policy debate that focuses on cost. Indeed, there is 
no small irony in the proponents of cost-benefit analysis, when 
it comes to regulation, talking about regulatory policy, but 
focussing exclusively on cost and ignoring altogether the 
benefits of the fair kind of analysis they suggest should be 
done.
    For example, if you look at the American Action Forum 
analysis on cost, costs are fairly calculated. The cost for 
2012 regulations are on the order of $220 billion. The primary 
cost in that figure is $150 billion attributed to fuel 
efficiency standards, the CAFE standards that will take effect 
in 2017, also to just relying on an EPA analysis. They neglect, 
however, to mention the benefits. The benefits are far greater 
than the costs. And these are not abstract benefits. They are 
not based on health impacts. They are primarily based just on 
savings at the gas pump.
    So, in the model year 2025, consumers will pay $1,800 
additional for an automobile, but they will save between $5,700 
and $7,400 per automobile. In fact, if you look at the CAFE 
standards that started in 2012 and the new ones that will come 
into place in 2017, the overall net benefit to the United 
States is $1.7 trillion--trillion with a ``t.'' That is indeed 
one of the most efficient regulations we could imagine. It will 
have huge benefits for small business and massively increase 
global competitiveness for American business.
    Second point. Too much of the debate about regulation, jobs 
and the economy ignores the cause of our current jobs crisis. 
The housing bubble, the financial bubble, financial crash, 
great recession, ongoing stagnation are traceable in very large 
measure to regulatory failure. It is indeed, as Mr. Issa said, 
in part a failure of regulatory enforcement. It is also a 
result of the rollback of previously existing regulation and 
the failure to adopt additional regulation to deal with ongoing 
issues.
    So, for example, there was insufficient regulation on toxic 
and predatory mortgage lending, there was too little regulation 
on securitization, too little regulation and inadequate 
enforcement on the credit rating agencies, too little 
regulation--actually no regulation on financial derivatives 
that expanded the crisis, insufficient capital standards 
required of financial institutions, and so on. Many other 
examples listed in my testimony. It is worth underscoring the 
impact of the great recession: $13 trillion in reduced economic 
output, $9 trillion in lost home equity, though that partly is 
inflated by the actual housing bubble itself.
    Third point. To say that the regulatory system provides so 
many protections for our country is not to say that all is 
well. There are indeed many problems with the regulatory 
system. It needs very far-reaching repairs. I have got a number 
of examples elaborated in my testimony. I wanted to highlight 
just a few.
    First--if you could put the chart up, please, sir--the 
regulatory system now is characterized by a Rube Goldberg 
process, that it actually builds in endless delay, and this 
chart follows that Rube Goldberg process, although it is 
unreadable unless we blow it up to a screen about six times 
bigger than that one. I think the lesson from that is not that 
new additional analytic requirements should be imposed on 
agencies, but that we ought to try to streamline the process to 
the extent we can. But new analytic requirements of the kind 
embodied the Regulatory Accountability Act, I think, are the 
wrong way to go.
    A second point, which is also implicit from that chart. The 
OIRA is a roadblock to effective new rulemaking, and there 
needs to be not an expansion of the scope of OIRA authority, as 
would be required under several so-called regulatory reforms, 
but increased transparency at OIRA and increased accountability 
at the agency. Indeed, I think as regards the independent 
agencies, those are accountable to Congress, not to the 
executive, and it would be a mistake to expand the executive 
direct authority over them.
    Third point. There are issues about regulatory enforcement 
and rulemaking and undue influence of regulated parties and of 
regulated agencies. That is a hard problem to deal with, but 
one important thing we could do is to crack down on revolving 
door abuses which continue despite some reforms by the Obama 
administration.
    And a last point, on the matter of small business. There is 
an important discussion to be had about the nexus between 
regulatory policy and small business interests, but one thing I 
think that has been too overlooked is how competition policy is 
needed to advance small business interests. I go into some 
detail about this in my testimony, but one area that perhaps 
there can be bipartisan agreement about is start by looking at 
the too-big-to-fail financial institutions that get an implicit 
subsidy of about $80 billion, according to Bloomberg, and I 
think that is a complete unfair situation as regards small 
banks and it disadvantages other businesses as well. Maybe that 
is an area where there actually could be some regulatory policy 
going forward across party lines to advance small business 
interests.
    Thank you so much.
    Mr. Bachus. Thank you.
    [The prepared statement of Mr. Weissman follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                               __________

    Mr. Bachus. And we will now proceed under the 5-minute rule 
with questions, and I begin by recognizing the gentleman from 
Georgia, Mr. Doug Collins, for 5 minutes.
    Mr. Collins. Thank you, Mr. Chairman. I appreciate it.
    This is a concern, as I stated in my opening statement, the 
issue that we have moving forward with this. I want to start 
with Professor Glicksman, if you would. One of the things that 
I have for you is a discussion that just came up with banks. 
There is regulation that needs to be here. Many times 
Republicans and conservative Republicans and myself are painted 
as just do away with government and we don't need regulation. 
That is the furthest thing from the truth. We need proper 
regulation.
    What was just mentioned here, especially with the Dodd-
Frank issue, is we are killing community banks. I am from 
northeast Georgia, and we had a bank which had nine employees 
in its home office. They had two other branches. When the 
auditors and all came in, they brought 14 people and complained 
because they didn't have enough room to do their work.
    Is there a certain point in time that you would agree that 
there is need for base regulations, but the continued expansion 
of regulation is killing jobs?
    Mr. Glicksman. I don't think there is strong evidence that 
existing regulations are killing jobs. Surveys conducted by the 
Bureau of Labor Statistics and others consistently demonstrate 
that when businesses are asked what the problems they are 
facing are, they tend to point to low demand and general 
economic conditions, not excessive regulation. There may, 
however----
    Mr. Collins. But, Professor, let me stop right here. Have 
you smarted a small business?
    Mr. Glicksman. No, I haven't.
    Mr. Collins. Have you worked outside of academia?
    Mr. Glicksman. Yes, I have.
    Mr. Collins. Okay. In the last how many years?
    Mr. Glicksman. Oh, the last 15 years.
    Mr. Collins. Okay. I think the interesting thing is we can 
do policy and then we can do polls, and we all know how polls 
go around here, and if they say, well, we don't say it. But 
when you get into the real world, you come travel with me in 
the Ninth District of Georgia, you will see how it affects real 
jobs, and it is not according to some survey. It is according 
to the fact that they have jobs that are at issue.
    The other thing I have, and I read your testimony, and I 
appreciate opinions, but one of the things that you bring up 
that really is disturbing to me, and it is popular in the 
country right now, is that the Congress is too stupid to do 
this act. And you put it in your testimony where you said, 
``Neither most Members of Congress, nor their staffs, lack the 
sufficient expertise regarding complex regulatory matters to 
consider decisions on whether to adopt a regulation or not.''
    I want to think that is very offensive, one, to Congress, 
and the staff and the resources that we have, but it just also 
goes back to, I mean, I have a question for you. If that is 
where we are looking at right now, then should we have juries--
I mean, does that not affect whether they have juries in which 
DNA and scientific evidence and where you have members of the 
population, should we say, well, they don't have enough 
understanding of scientific, so we need to change our jury 
system. I mean, is that not just a straw argument you are 
throwing up there to maintain a regulatory system?
    Mr. Glicksman. I didn't mean to offend the Members of 
Congress or the staff. Congress created----
    Mr. Bachus. We get offended every day, so don't worry about 
that. That is not a problem.
    Mr. Glicksman. Congress created agencies and has been doing 
so for well over 100 years because it recognizes that it has 
neither the time nor the expertise to legislate in the detail 
that is reflected in agency regulations. Congress certainly has 
the expertise to set broad policy, and it appropriately should 
do so, but it delegates to agencies the responsibility for 
translating the broad legislative goals into detailed 
regulatory mandates, and I think that is perfectly appropriate 
for it to do so.
    Mr. Collins. And one of the things is, too, is remembering 
that we have, from a perspective of designating, yes, but also 
having oversight, because we are the ones who have to stand 
before the people and actually have to say, you know, here is 
why we are running and here is what the government is doing or 
not doing.
    Mr. Glicksman. It would be appropriate for Congress to 
amend a statute if it felt on review that the agencies are not 
doing an appropriate job implementing it.
    Mr. Collins. Thank you.
    Mr. Weissman, should it be easy? I mean, you showed this 
wonderful chart and this graph about how hard it is. Should it 
be easy? I mean, let's go to the other side here. You know, 
what is the balance that you see? If you make the sort of the 
chart here that says, well, this is just awful and terrible, 
should it be easy?
    Mr. Weissman. Should it be easy to issue----
    Mr. Collins. To do regulations that impact businesses on 
which the regulators themselves do not have to feel the impact?
    Mr. Weissman. Well, the decision should be informed, but, 
yeah, for sure, it shouldn't be subjected to needless red tape, 
just the way businesses should not be subject to red tape.
    Mr. Collins. I think one last thing, I know my time is 
running out. But, Mr. James, you provide a face to this. We can 
be academic, we can be congressmen, and we can go back and 
forth and be offended and not offended, that is normal. But for 
you, you provide a face to this, and I think that is what is 
missing often when we talk about these in these large economic 
terms and we talk about it in large policy terms, and I just 
wanted to thank you for being a part of this and showing that 
there is a balance that can be struck. And any comments that 
you would like to elaborate from your testimony I would like to 
hear.
    Mr. James. Well, thank you, Congressman. And you are 
absolutely right, these aren't abstract costs. And we can talk 
about statistics and numbers all day long, but the reality of 
it is, is that this is going to have a real impact on my 
community. It is not just the power plant. There is a ripple 
effect that will be associated with it. It will be the closing 
of restaurants near the power plant. It will be the closing of 
dry cleaners that clean the uniforms for the plant workers. 
This will affect families. It will affect the children. It is 
not just about these high ideals. There is a real impact here 
and it worries me every day as an elected official. Thank you.
    Mr. Collins. Well, I appreciate that.
    Mr. Bachus. Thank you.
    Mr. Collins. Mr. Chairman, I yield back.
    Mr. Bachus. Thank you.
    Mr. Cohen, for 5 minutes.
    Mr. Cohen. Thank you, Mr. Chair.
    Dr. Holtz-Eakin, in your opinion, was the great recession 
largely fueled by the unregulated mortgage industry and 
securitization market? Was that a great----
    Mr. Holtz-Eakin. No.
    Mr. Cohen. It is not your opinion.
    Mr. Holtz-Eakin. No, that is not my opinion. As you know, I 
was on the Financial Crisis Inquiry Commission. We spent 2 
years looking at this issue. We had housing bubbles, both 
residential and commercial, in Spain, in Ireland, England, New 
Zealand, and those took place in vastly different regulatory 
markets. There is nothing about the regulatory system that 
appears to be correlated with the presence of big housing 
bubbles and the aftermath. It is also true that we had large 
institutions fail in, for example, in the United Kingdom, 
Northern Rock, with a very different regulatory system. They 
have a unified regulator.
    So I find it utterly uncompelling to assert that somehow it 
was the regulatory system per se and uniquely that generated 
this phenomenon.
    Mr. Cohen. Do you think there should be regulations on 
securitization of these mortgages?
    Mr. Holtz-Eakin. Indeed, there have been for a long time. I 
mean, securitization came from the creation of Fannie Mae, 
Freddie Mac. It was originally designed to bridge what were 
regional lending markets in the United States which led to 
financial market failures when we had crop failures, in 
particular, earlier in our stage of economic development. And 
so those were never unregulated markets. They were part and 
parcel of government policy.
    Mr. Cohen. Mr. Weissman, I would like you to respond to 
that. I mean, you, in your testimony, talked about this issue.
    Mr. Weissman. Well, since the author is here I don't want 
to put words in his mouth, but I did review again the dissent 
that you coauthored to the Financial Crisis Inquiry Commission 
report. It is indeed a thoughtful perspective on in trying to 
explain the crisis.
    My interpretation, though, is it is not fundamentally one 
that is at odds necessarily with the majority, but in any case, 
with a view that says that regulatory failure was a 
considerable contributing factor. I mean, the framework 
explanation and the dissent is that there was a housing bubble 
and a financial bubble, those were sort of structural factors, 
and as you look at this cross-cultural comparison, they may not 
be attributed to any regulatory issue or anything that is 
domestic, but that they were exacerbated--but those problems 
were exacerbated by a number of things--bad mortgages, 
relatively unregulated securitization, financial derivatives in 
the derivatives trade, and credit ratings failures, all things 
that were listed in the dissent.
    From my point of view, at least, and I can't speak for Dr. 
Holtz-Eakin, those are all things that either should have been 
prevented altogether or problems that should have been limited 
through appropriate regulation, either better enforcement or 
stronger rules on the books.
    Mr. Cohen. Federal Reserve Chairman Alan Greenspan opposed 
regulation of the practices that allowed subprime mortgages to 
be bundled into large securities--opposed those regulations--
and sold to investors. In 2008, however, he testified, ``I made 
a mistake in presuming that the self-interest of organizations, 
specifically banks and others, were such that they were the 
best capable of protecting their own shareholders, and their 
equity in the firms.'' I think Alan Greenspan was right to make 
his mea culpa and admit that the regulations should have been 
in place and that they did help result in that.
    Let me ask you this. Dr. Holtz-Eakin,you have made some 
criticisms of the Affordable Care Act. Your criticism, I 
presume, was not that you don't think we should have health 
care for people that otherwise aren't getting it. You are in 
favor then, I guess, of a single-payer system?
    Mr. Holtz-Eakin. No, I am not, sir.
    Mr. Cohen. No, you are not. So what are you in favor of? 
Any health care at all for the poor people that aren't getting 
health care today?
    Mr. Holtz-Eakin. The Affordable Care Act has two key 
components. Key component number one is an expansion of health 
insurance coverage, largely through the exchanges and the 
Federal subsidies----
    Mr. Cohen. Right. Which we wouldn't have if we had a 
single-payer system.
    Mr. Holtz-Eakin. But those aren't care decisions. Care 
decisions, the actual use of health care services are things to 
which people are constitutionally entitled, that has been 
determined, and which are happening right now.
    So the second big piece of the Affordable Care Act is those 
activities which would change the delivery system, produce 
higher quality care, in particular move us away from fee-for-
service medicine, which is widely recognized as part of the 
problem.
    I believe the act has, you know, sort of three key 
features. Number one, I think the insurance expansions are very 
poorly designed and will harm us from a budgetary and economic 
point of view. I think the delivery system reforms are under-
exploited. I mean, this doesn't solve our cost problem, which 
is the fundamental health care problem in the United States and 
which harms the ability of the less affluent and everybody to 
get affordable care. And the third is timing. It is not a pro-
growth strategy to impose $700 billion in new taxes, create a 
trillion-dollar new entitlement program at a time when our 
entitlements need to be reformed to begin with, and impose the 
large regulatory burdens that come with the ACA. That is what 
we did at a time when we were trying to crawl out of the 
greatest recession since the Great Depression.
    Mr. Cohen. Dr. Holtz-Eakin----
    Mr. Holtz-Eakin. So that is why I think it flunks the 
benefit-cost estimate, because if you think about it, you 
wouldn't do it.
    Mr. Cohen. Well, I did think about it, and I was for it and 
I am still for it because somebody----
    Mr. Holtz-Eakin. Well, you asked what I thought.
    Mr. Cohen. I know I did. And I am saying you don't take 
into consideration people whose lives would be lost. If you are 
65 years old and you need a lung and you can't afford it, you 
don't have insurance, you can't wait for years to come. And 
this whole regulatory scheme of EPA and health care and China 
is wonderful and China has less regulations, China's air is 
awful and their people don't have the life expectancy we have, 
nor do they have it in India. And a lot of things we do that 
are regulations save peoples lives, and nobody here seems to be 
concerned with life expectancy, quality of life, health care, 
all of which are affected by regulations that this Congress has 
passed that have become law and make America the best country 
in the world.
    I yield back the balance of my time.
    Mr. Bachus. Thank you. And I would let Mr. Holtz-
Eakinrespond, though.
    Mr. Cohen. Then I am going to respond. Congress always gets 
the last say. You know that.
    Mr. Bachus. Well, how about 20 seconds?
    Mr. Holtz-Eakin. Eighteen.
    Mr. Bachus. Eighteen seconds.
    Mr. Holtz-Eakin. None of my remarks raised China, the 
desirability of air pollution regulation, all of which I do 
have opinions on, but wasn't my point. The Affordable Care Act 
has relatively modest expansions of the actual access to health 
care in the United States. We spend $3.6 trillion already. We 
have aggressive programs at the State and Federal level for the 
elderly and low income. It does add some, but I don't think it 
passes the benefit-cost test in terms of those very important 
issues. We have better ways to accomplish the same things, and 
that would have been my goal.
    Mr. Bachus. Thank you.
    Mr. Farenthold, who is next. Then Mr. Rothfus after that.
    Mr. Farenthold. I am sorry?
    Mr. Bachus. Five minutes.
    Mr. Farenthold. I will be as brief as possible. I know we 
have got a busy day. We got a big panel. Lots of people to ask 
questions.
    The district I represent is the heart of the Eagle Ford 
Shale development in Texas. It is providing unprecedented 
amounts of energy for our country at incredibly low cost. Right 
now there are just a ton, there are actually 10 agencies now 
that have been charged with regulating the hydraulic fracking 
industry. I mean, it seems ridiculous that we have to go 
through this many regulatory hoops to regulate one activity. It 
seems like there is a natural desire for everybody to get their 
hand into the pudding.
    How can we structure something where, whether it be 
hydraulic fracking, building a much-needed bridge or a new 
railroad or infrastructure, or developing a plant that will put 
people back to work, how can we consolidate this without 
putting in jeopardy the environment? I will throw that open to 
give each of you all 15 or 20 seconds for your best idea, and 
we will start with Professor Glicksman.
    Mr. Glicksman. It is funny that you ask that question 
because my latest article is on exactly that, and I commend it 
to all of you.
    What my coauthor and I do in that article is to look at the 
different dimensions upon which regulation and agency 
relationships can proceed in. So we look at whether or not it 
makes sense to have centralized or decentralized regulation, 
whether if we have decentralized regulation one ought to have 
an array of authorities that are distinct, with each agency 
having jurisdiction over a separate problem or whether we ought 
to have overlapping authority. And finally, we look at whether 
or not it makes sense to have coordination among the agencies 
that have jurisdiction over a single problem or whether we want 
them to act independently.
    Mr. Farenthold. You have given me some light reading for 
the flight home. I appreciate that, Professor.
    Mr. Glicksman. We make suggestions about how best to answer 
those questions.
    Mr. Farenthold. Thank you.
    Mr. Glicksman. Very context specific.
    Mr. Greenblatt. America hit the lottery when we figured out 
fracking in natural gas. This is wonderful for our country. 
This is wonderful for our factories. This is going to grow 
employment in our country. So we have to streamline the 
environmental regulatory authority so that----
    Mr. Farenthold. I am sorry. I don't mean to rush you. I 
have got one more. I have got another question I want to ask, 
though. Quickly, give me your bullet point, anything we can do, 
where is our biggest bang for the buck?
    Mr. Greenblatt. I think if we have one entity in charge of 
fracking and all other groups have to----
    Mr. Farenthold. Great idea.
    Mr. Greenblatt [continuing]. Cede authority to them.
    Mr. Farenthold. Mr. James.
    Mr. James. Thank you, Congressman. I will be brief. When an 
environmental agency, either it is the Ohio EPA or the U.S. 
EPA, is promulgating a regulation, they look at the direct cost 
of that regulation, and when they analyze direct cost, it is 
usually the cost of compliance with that regulation. My 
suggestion would be simple, that these agencies look at other 
costs associated with that regulation, particularly indirect 
costs to communities that those regulations impact. Thank you.
    Mr. Farenthold. Sold on that one, too.
    Mr. Holtz-Eakin. I haven't written on this, but my instinct 
is monopolies are bad and government monopolies are just as 
bad, and while it is messier, multiple jurisdiction provides 
checks and balances that go back to our founders.
    Mr. Kovacs. This Committee has already had a great start. 
Last year you passed out of the House the Regulatory 
Accountability Act, which allows good data to get into the 
system and for a way to check the data that is bad, and second, 
permanent streamlining, very important. And the few pilots that 
we have had, both in SAFETEA-LU and in the Recovery Act, showed 
that we can cut permit time in half.
    Mr. Farenthold. All right. Mr. Weissman.
    Mr. Weissman. I think the key issue that is highlighted is 
what happens when there is a new technology or an old 
technology that is operating at a scale beyond anything that 
happened before. And I think there is a key role for Congress 
in saying, look, we need a framework to think about this. The 
frustration you have, I think, is agencies just trying to catch 
up. They are behind.
    Mr. Farenthold. All right. Thank you very much.
    Mr. James, Corpus Christi, my hometown, similar to you, we 
have a large petrochemical industry. We are suffering as a 
result of regulation. Fortunately, the low cost of natural gas, 
you know, in the 3.25 range is making it awful attractive to 
overcome either our higher labor costs or our higher regulatory 
costs, but not necessarily both.
    I mean, obviously we talk about the jobs. But in your 
community, what are you seeing is the impact on people and 
families as jobs are evaporating? Your population has got to be 
suffering.
    Mr. James. Absolutely. And it truly does keep me awake at 
night and throughout the day thinking about what I am going to 
tell families when they find out that their job has been 
eliminated and they call me and they tell me that they can't 
make their mortgage payments and I have to refer them to some 
of our welfare services to help them out. It is these kind of 
indirect costs that I think Congress and the administration and 
agencies need to look at as they are making----
    Mr. Farenthold. I appreciate that. And my word to our 
agencies and regulators, every day you delay in approving that 
permit is a day somebody doesn't go back to work. And I wish 
more of our regulators were staying up at night worrying about 
the people that the regulations are affecting.
    Thank you. I yield back.
    Mr. Bachus. Thank you. And now the gentlelady from 
Washington state, Ms. DelBene, is recognized for 5 minutes.
    Ms. DelBene. Thank you, Mr. Chair.
    Mr. Greenblatt, I wanted to ask you about, you talked about 
sunsetting regulations, and I assume that the intent is that we 
put together regulations, we have an idea of what the intent is 
of the regulation and the result of that, and after some period 
of time we evaluate whether or not that is working or not 
working or how we can improve and it would either sunset or be 
reinstated. Is that what you are suggesting?
    Mr. Greenblatt. I agree.
    Ms. DelBene. And so when we look across our environment, 
another scenario where we have a similar challenge is in our 
tax system. And do you think that that would also be a place 
where we should put things in place and let those sunset as 
well so that we don't continue to build complexity on top of 
complexity?
    Mr. Greenblatt. I am sorry. You are talking about taxes or 
you talking about environment or both?
    Ms. DelBene. Tax system. Things like exemptions and 
incentives that are also put in place with an intent to either 
help----
    Mr. Greenblatt. Sunsetting is a good idea. It cleans things 
out.
    Ms. DelBene. Well, we have had this conversation in our 
state a lot, and I agree that if we can get rid of the layers 
and we are better stewards of policy and keep it up to date, we 
would probably reduce a lot of complexity. Thank you.
    Mr. Weissman, several witnesses are suggesting that 
regulations are a significant factor in our current 
unemployment situation, and clearly we have talked about the 
benefits and challenges, but I wondered what proposals you 
might have or what we could do in our regulatory system to 
support job creation and innovation and what changes we might 
make to reduce that burden.
    Mr. Weissman. I think there is a huge number of things. I 
think the first point is that much of the regulation that is 
being criticized actually itself is a spur to new innovation. 
So if we talk, for example, about the fuel efficiency 
standards, that is going to spur all kinds of new innovation in 
the auto industry. The various environment or energy efficiency 
standards that are being promulgated by EPA will massively spur 
innovation.
    So, if you look in the auto industry, same kind of things. 
In fact, we were looking at the airbag example, and I mentioned 
some of this in my testimony. When airbags were first being 
proposed and seriously considered in the 1970's, the industry 
said that the cost--publicly they said the cost was going to be 
well over $1,000 and sometimes up to $1,500 or more. It turned 
out that their internal data showed that the cost would be more 
like $200, and thanks to economies of scale and dynamic 
efficiencies, actually the costs are now far, far lower and we 
are saving $2300 a year.
    So, actually a lot of regulation is itself innovation-
spurring. If we want to look, I think, broadly, in terms of 
making the economy more stable in the regulatory area, I think 
given the experience we have just had with the great recession, 
the most important thing is to stabilize the financial system. 
I think there probably is pretty widespread agreement that the 
system remains quite fragile.
    From my point of view, if there is a single most important 
thing to do, it really is to go after the large institutions 
that are able to hold hostage prosecutors, enforcement 
agencies, and some extent Congress, and I don't think there is 
any solution to that short of breaking them up.
    Ms. DelBene. Thank you. I yield back the remainder of my 
time, Mr. Chair.
    Mr. Bachus. Thank you. That is much appreciated.
    Mr. Rothfus, the gentleman from Pennsylvania, is recognized 
for 5 minutes.
    Mr. Rothfus. Thank you, Mr. Chairman.
    And thank you to the panel. It is a fascinating discussion.
    I represent a big swath of southwestern Pennsylvania. It is 
unique in that we have a significant concentration of national 
leaders in health care, energy, financial services, and 
manufacturing. In fact, it is hard for me to think of another 
region of the country that has the number of leaders across 
these fields that southwestern Pennsylvania does.
    I think every regulation that requires a private sector 
entity to undertake a certain action and expend funds can 
rightly be called a tax. You know, the Small Business 
Administration has stated that the cost of compliance with the 
current regulatory framework that we have is over $1.75 
trillion. You know, we are competing in a world economy, and I 
think that overburdening regulations, along with higher taxes, 
as well as other costs being passed along to employers, such as 
through the Affordable Care Act, are strangling our economy. 
You know, the fourth quarter we saw a contraction, and we see 
unemployment chronically high and wages are stagnant. So, I do 
think that we need to be taking a look at what is going on with 
the regulatory framework. I am looking at a list of regulations 
that are, you know, on the deck at EPA and very concerned about 
what the impact is going to be on the ability of our job 
creators.
    A little bit, you know, Professor Glicksman, I would like 
to go in a little bit about the REINS Act that you had 
mentioned, and a concern about interjection of politics. You 
know, I am a little puzzled by that, and I wonder if you could 
maybe elaborate on that. I look at under our constitutional 
framework, that the legislative branch is the law making. We 
have the responsibility. I mean, if you take your analysis, 
isn't every piece of legislation that we put out of here has 
some kind of political background?
    Mr. Glicksman. Yes, certainly it does, and I am not 
disputing the fact that Congress has the responsibility and the 
right to make legislative policy, which is based in part upon 
political judgments. My point was simply that the detailed 
regulatory decisions made by agencies such as EPA are based 
upon the information provided by experts, such as toxicologists 
and epidemiologists.
    I have been teaching and writing about environmental law 
for 35 years. I don't have the technical expertise to know 
whether a particular air quality standard ought to be set at 
0.08 parts per million or 0.075 parts per million. That is 
beyond my expertise.
    Mr. Rothfus. Do you think it is beyond the expertise of 
this body to pull the experts in to ask questions so that we 
can understand that, too, or do we have to have elites over in 
the agencies telling us this?
    Mr. Glicksman. I wouldn't call agency members elites. I 
think they are experts. And they have been delegated authority 
by Congress precisely so that Congress is relieved of the 
burden of making detailed technical judgment.
    Mr. Rothfus. Relieved of the burden or relieved of the 
responsibility to evaluate that?
    Mr. Glicksman. I would say relieved of the burden. If you 
determine that an agency is not operating pursuant to the 
mandate that you delegated to the agency, you certainly have 
the right to amend a statute, to change the agency's mandates 
and authorities. But it seems to me that making the kind of 
technical judgments reflected in the regulations that are 
issued on a daily basis by agencies is going to swamp Congress. 
I don't think, realistically, practically, there is any way to 
do an adequate job overseeing the details of every regulation 
issued by Federal agencies in a timely manner.
    Mr. Rothfus. Dr. Holtz-Eakin,I would like to follow up. You 
mentioned Fannie and Freddie, and there were attempts under the 
Bush administration to provide some further regulations for 
Fannie and Freddie, weren't there?
    Mr. Holtz-Eakin. Yeah. When I was CBO director, there were 
a number of initiatives to change the special provisions that 
surrounded the housing GSEs, and most importantly, to increase 
the capital requirements. They were very thinly capitalized 
entities.
    Mr. Rothfus. And then, you know, you look at, you know, a 
gentleman like former Congressman Frank, who wanted to, quote, 
roll the dice with Fannie and Freddie. Any idea what was he was 
talking about there?
    Mr. Holtz-Eakin. I won't speak on behalf of the former 
Congressman, but I think the reality was, and there are CBO 
reports to this effect, it was predictable that there was a 
very high probability that the taxpayers would have to step in, 
and history has shown it happened quicker than even we thought 
it would.
    Mr. Rothfus. Mr. Weissman, any idea what Congressman Frank 
would have been talking about when he wanted to roll the dice 
with Fannie and Freddie?
    Mr. Weissman. No. And I will follow the example of not 
wanting to speak for him. But I agree with your point. I think 
that it is correct that they were undercapitalized and 
underregulated.
    Mr. Rothfus. Any thoughts, Dr. Holtz-Eakin, onefforts such 
as the REINS Act to have the Congress really exercise its 
constitutional responsibility when it comes to the law-making, 
you know, responsibility within this government?
    Mr. Holtz-Eakin. It is standard practice in Congress to 
authorize activities for finite amounts of time, to do 
oversight of those activities, and then to decide whether to 
reauthorize or not. This strikes me as entirely consistent with 
that way of doing business. And I know that there is concern 
about the relative balance of benefits and costs, which is the 
fundamental legitimate issue, but I don't see, if Congress is 
involved on a regular basis, how that can get too far out of 
whack. In fact, I think that helps keep the broad measure of 
benefits and costs in balance.
    Mr. Rothfus. Thank you.
    Mr. Bachus. Thank you.
    Mr. Rothfus. I yield back.
    Mr. Bachus. Thank you.
    Mr. Garcia, the gentleman from Florida, is recognized for 5 
minutes.
    Mr. Garcia. Thank you very much, Mr. Chairman.
    Mr. Kovacs, I noticed you said that you have been coming 
here for 17 years on this issue, which strikes me, because I 
thought it was Obama that declared the war. So I wanted to know 
exactly when is it that we went off the rails here.
    Mr. Kovacs. Well, I have said this to Republicans and 
Democrats. I think that Congress has delegated far too much 
authority to the agencies. And it probably happened 45 years 
ago. The Administrative Procedure Act is now over 65 years old 
and last year was the first time anyone looked at how agencies 
operate.
    I think the first thing, and this is just gratuitous 
advice, is that Congress, as an institution, is the elected 
representatives of the people, not the agencies, and that when 
he you have a divided government that we have today, one of the 
difficulties is the executive controls it, not the Congress. 
And so to a large extent you have lost control over the 
legislative process because the courts have actually 
recognized, like you look at the American Trucking Association 
case where Scalia says you delegated it away. Your job is to 
get it back, and I think that is the most important thing now, 
because if you look at it--and let me start with my one 
example.
    Mr. Garcia. Mr. Kovacs, I have a limited amount of time, 
but I don't disagree with you. I have worked in regulatory 
agencies. It has been a major part of my career, particularly 
because I am so bad at getting elected, so I have to pray I am 
getting appointed. But I would agree with you, and my worry is 
that the tone and tenor of this debate should be rational.
    Mr. Kovacs. Yes.
    Mr. Garcia. It shouldn't be about extremes. I think this 
side of the aisle would love to cooperate with the other side, 
and I am sure that you and Mr. Weissman could sit down and come 
up with all sorts of regulatory mumbo jumbo that we need to get 
rid of, and Mr. Greenblatt would probably agree with you. My 
suggestion is it is something that we should try. I mean, if we 
are broken here, there needs to be some form, particularly from 
outside us, because we are busy here sort of posing and 
preening, but we are not getting much done. But there is a need 
for the system to go forward. And you are right, because we 
have a divided government, the ability to strike at things that 
are obviously wrong in the regulatory system, just like there 
are things that we can do better.
    Mr. Greenblatt, I read your testimony, and first of all, I 
want to congratulate you for your tremendous business success.
    Mr. Greenblatt. Thank you.
    Mr. Garcia. I assume that is not because we overregulate 
you. It must be because of your exceptional talent?
    Mr. Greenblatt. I have a great team of people.
    Mr. Garcia. Very good. Mr. Greenblatt, you mentioned China. 
Would you believe that a communist government with central 
planned economy is a better format for dispensing business 
wisdom or a better environment for business?
    Mr. Greenblatt. No, absolutely not.
    Mr. Garcia. Okay. I just wanted to make sure. I didn't want 
to sort of get it wrong. You do realize that where we are 
reading about cancer----
    Mr. Greenblatt. And I----
    Mr. Garcia. No, no, that is my point. You are competing 
with them.
    Mr. Greenblatt. I am competing with China. We lock skulls 
with them every day of the week.
    Mr. Garcia. I understand.
    Mr. Greenblatt. When we win jobs, we are taking them----
    Mr. Garcia. There is a great British phrase that says 
choose your enemiescarefully because in the end you will be 
most like them, and we certainly don't want to look like China 
when you look at cancer spreading, you have cancer clusters all 
over manufacturing areas. It is certainly not a place you want 
to be.
    I wanted to ask Mr. James. Do you know what mercury cause, 
what happens when mercury is ingested by life?
    Mr. James. Absolutely, Congressman. I spent part of my 
career as an assistant attorney general enforcing the Clean Air 
Act.
    Mr. Garcia. Very good.
    Mr. James. And I believe very deeply in it. But at the same 
time, when an employee of the plant that is closed down and 
they come to me and they don't know where to look for work, it 
is very difficult for me to tell them that EPA has said that 
54,000 jobs have been created. What do I tell them to do? Do I 
tell them to leave Avon Lake?
    Mr. Garcia. I don't know. It is better than helping one of 
your constituents bury a child, right? And those are things 
that are just as serious. I understand----
    Mr. James. I respect that, Congressman, but at the same 
time, if I can----
    Mr. Garcia. Mr. James, Mr. James, if you will let me 
finish. I was asking a specific question. My point to you, Mr. 
James, is I have regulated the energy industry and I have 
regulated power companies and I have worked for the FERC, and 
many times when energy companies say we have decided to get out 
of the business because of regulations--how old is the power 
plant in your district?
    Mr. James. It is approximately 60 years old.
    Mr. Garcia. Right. Well, Mr. James, I guarantee you that 
that power plant is closing not because of regulatory overview. 
That power plant is closing because it is no longer competitive 
with other forms of energy that are being developed by places 
where my colleagues reside, and that is a reality. And you 
know, I am sure that the last buggy whip manufacturing facility 
employed a lot of people. Unfortunately, we weren't in the 
business of buggy whips anymore. Likewise, power plants after 
60 years are almost impossible to maintain, they are impossible 
to be productive, and what you are experiencing is free market 
and its effects.
    And I say this because I understand. I have been a 
regulator and I have shut down power plants. I had one power 
plant where a local manatee group came to say let's keep the 
power plant open because it puts hot water into the river so we 
can keep the manatees warm in the winter. While it was a 
wonderful idea, a nice little water heater would have been 
better than keeping a power plant that was inefficient.
    And those market efficiencies, I think, are what all of you 
in business want. A 60-year old power plant, a 60-year old 
coal-fired power plant is technology that long ago ceased to be 
the best to have in the market. But thank you, and I do 
sympathize for you.
    I yield back the balance of my time.
    Mr. Marino [presiding]. Mr. James, I am going to give you 
30 seconds if you would like to respond.
    Mr. James. Thank you, Congressman.
    Congressman, I would remind you that I am not here on 
behalf of private business, but I am here on behalf of city 
government, and I am concerned when a power plant closes and 
the jobs aren't replaced and the income tax isn't replaced and 
we can't afford to pay for ambulances anymore. And so when that 
child is sick and they call 911 and we can't send an ambulance 
to come get that child and take them to the hospital, what do 
we do? That is a serious problem as well.
    Mr. Garcia. Mr. Chairman, if I could respond very quickly. 
I do sympathize.
    Mr. Marino. No, sir. We are not going to have an exchange 
of an argument back and forth. You have had your time. He 
responded to your statement, and we are going to move on to Mr. 
Jeffries from New York.
    Mr. Jeffries. Thank you very much. Thank you, Mr. Chairman.
    Earlier today, our distinguished Ranking Member made the 
observation that he was concerned with the inflammatory nature 
of the title, and I would agree with the distinguished 
gentleman from Memphis, Tennessee. I was quite startled when I 
took a look at the title, ``The Obama Administration's 
Regulatory War on Jobs, the Economy, and America's Global 
Competitiveness.'' Sounds very ominous, paints a picture of 
doom and gloom. I looked at it this morning and I was concerned 
with the history of the Republic and our ability to actually 
move forward and sustain ourselves as the great Nation that we 
are because of this apparent regulatory overreach. And we have 
got a few witnesses today, real world witnesses who are here to 
present evidence of this doom-and-gloom concern that we have 
with the history of the Republic proceeding as we know it.
    And I appreciate your presence, Mr. Greenblatt, and you 
have obviously been a very successful businessman. And I salute 
you for that, inner-city community apparently in Baltimore, but 
you provided an example in your testimony of the type of 
concern that you have and you cited a $15,000 dollar fine. Is 
that right?
    Mr. Greenblatt. Yes, sir.
    Mr. Jeffries. Okay. And that $15,000 fine, apparently you 
eventually paid, you negotiated it down, and it was somewhere 
south of $15,000. Is that correct?
    Mr. Greenblatt. Yes.
    Mr. Jeffries. Now, on your Web site you indicated that you 
are one of the fastest growing businesses in America. Is that 
right?
    Mr. Greenblatt. Yes.
    Mr. Jeffries. And last year, I just want to make sure I get 
this right, your revenues were in excess of $4.5 million, or 
maybe that was 2011. Is that right?
    Mr. Greenblatt. We crossed over $5 million last year.
    Mr. Jeffries. I congratulate you on that. So apparently 
this regulatory overreach, as evidenced by the $15,000 fine 
that you, yourself, cited as Exhibit A in your testimony hasn't 
been overly burdensome in your ability to become one of the 
fastest-growing companies in America. Correct?
    Mr. Greenblatt. If I had my people focused on important 
things like growing the company, we would hire more unemployed 
steelworkers in Baltimore City. I think you and I both want me 
to thrive and prosper because when I thrive and prosper we hire 
more people. We are trying to end the recession in our small 
way.
    Mr. Jeffries. Thanks very much. I salute you on your 
success.
    Council Member James, I appreciate your concern. I was 
involved in State government before having the opportunity to 
serve here in the House of Representatives. And as my 
distinguished colleague from Miami pointed out, the reality is 
probably more likely that that 60-year-old plant closed because 
of reasons of market competitiveness, having nothing to do with 
a concern, very legitimate one, presumably, for the human 
intake of mercury.
    But let's put that aside. You are citing, I believe, an 
issue with the possibility of $70,000 in tax revenue, painful, 
but am I correct, I guess the number of $69,878.62, that is the 
concern?
    Mr. James. Honestly, Congressman, my concern would be less 
for the city of Avon Lake and more for the Avon Lake School 
District. The Avon Lake School District is anticipating losing 
$3.3 million per year--per year--in revenue. I mean, that is 
going to challenge Avon Lake's ability to educate its students, 
it is going to challenge the ability to take care of the 
students that have the most needs.
    Mr. Jeffries. I agree with you. I agree with you 
absolutely. And one of the things that I think we supported, 
certainly on this side of the aisle, is an increased investment 
in first responders all across this country, so perhaps those 
EMS personnel, those challenges that you raised, that could be 
addressed. An increased investment in teachers, we are facing 
an $85 billion sequestration. But we are here at a doom-and-
gloom hearing related to alleged regulatory overreach.
    Now, my time is limited, but, Mr. Kovacs, the economy 
collapsed in 2008. Is that correct?
    Mr. Kovacs. Around there, yes.
    Mr. Jeffries. Okay. And this was the worst economic crisis 
since the Great Depression, is that correct? That is what it 
triggered?
    Mr. Kovacs. Well, I do not know. I mean, I am not going to 
characterize it as the worst. It was bad.
    Mr. Jeffries. Okay. Mr. Holtz said that in his testimony, 
so I will accept that.
    Who was the President in 2008?
    Mr. Kovacs. It was George Bush.
    Mr. Jeffries. Okay. And would you describe the Bush 
administration as excessive in its regulatory zeal?
    Mr. Kovacs. I think I have been pretty clear in what I have 
said. I think that the regulatory process--and we have a chart 
that shows how 180,000 new regulations have started since 
1980--the regulatory process has been growing for a very long 
time, and we have suggested and we have tried to keep it in a 
very bipartisan, nonpartisan way, that Congress has an 
institutional stake in getting control of the agencies.
    Mr. Jeffries. Thank you. I see my time is limited, but one 
last question. Would you agree that the $22 trillion that the 
Wall Street collapse cost the American economy is a more 
significant problem that perhaps related to the underregulation 
of the market? Not the mortgage-backed securities--as Mr. Holtz 
indicated, they were regulated to some degree--but the credit 
the false default swaps which grew to about $50 trillion that 
was an entirely unregulated insurance product? Do you think 
that was a problem that perhaps needed to be addressed by Dodd-
Frank and this Congress?
    Mr. Kovacs. Congressman, there are very few times in my 
life I say I really don't know how to respond to that issue. I 
am not an expert in banking, so I am just going to tell you I 
don't know.
    Mr. Jeffries. Thank you.
    Mr. Garcia. We never in Congress say we don't know.
    Mr. Bachus [presiding]. Thank you.
    I guess we are to the point where I will ask questions. 
Everybody else has.
    My first question, and I will ask this to you, Dr. Holtz-
Eakin,according to the National Federation of Independent 
Businesses, paperwork is one of the biggest concerns for small 
businesses. Could you explain how paperwork diverts resources 
from productive activity and how the administration has failed 
to fulfill its commitment to reduce red tape? And I am sure 
this is not the first administration to fail in that 
commitment.
    Mr. Holtz-Eakin. I think we have heard very clear testimony 
on this from Mr. Greenblatt.
    Mr. Bachus. Right.
    Mr. Holtz-Eakin. You have hours in the day, you have 
workers, and you can task them for things that will increase 
your sales and your productivity, or you can task them to 
comply. And those are clear tradeoffs.
    One of the things that I have found most disturbing about 
the recent regulatory initiatives is the White House, OIRA in 
particular, issuing a statement that said it was okay to count 
as a benefit of regulation the people hired to comply with that 
regulation. Any clear accounting of benefits and costs puts 
that on the cost side of the ledger. And I think at a minimum 
we ought to do that right.
    Mr. Bachus. I did also note Mr. Greenblatt when he said you 
had a form and you just failed to sign in one of three places.
    Mr. Greenblatt. Right. We signed it in two of three places. 
I omitted signing the last, as an oversight, it was a 20-
something page form, and because of that we received a $15,000 
fine from the government. Our top team had to spend hours on 
the phone, you know, waiting on hold with the IRS trying to do 
something about it. It was a complete distraction of important, 
mission-critical tasks.
    Mr. Bachus. So it wasn't a failure to pay moneys.
    Mr. Greenblatt. No, no. It was a 2006 form, it was an 
annual form you are supposed to fill out, and it was one of 
those things where there is pages and pages of forms, and my 
bookkeeper told me where to sign, I signed it, and I didn't 
sign the third one. Either she or I overlooked it. It was 4 
years before. And it is dispiriting that the government finds 
that as a productive task.
    Mr. Bachus. Did you get any notice? Did they first send it 
back and say please sign this?
    Mr. Greenblatt. The first form was a fine.
    Mr. Bachus. Wow. Okay.
    Mr. James, I think your testimony kind of brings it down to 
the community and the individual level. Have you had a chance 
to meet any parents or students who have benefited from social 
services offered at Avon for children with autism, depression, 
or who have been abused? What can you tell them about the 
effects, as a city councilman, of coming budget cuts of these 
services due to the loss of revenue from the plant closing? And 
what do you expect will happen to these children?
    Mr. James. Well, I can tell you they are very concerned, 
and they don't know what the answer is, and honestly the city 
doesn't know what the answer is yet either. You know, there has 
been comments this morning that market forces are closing the 
power plant. We are not talking about a typewriter factory and 
the typewriter factory is being closed because of computers. We 
are talking about an electric power plant. We are going to need 
electricity today, we are going to need electricity tomorrow. 
And so I question whether it is really market forces that are 
closing this or an overaggressive regulation that is making the 
market incapable to deal with the costs of the regulation.
    Mr. Bachus. Okay. But did you mention or have a reason to 
believe that some of the services may have closed in Avon park 
already?
    Mr. James. If the power plant does close, nearly half of 
the $3.3 million that the school district is talking about 
losing comes just from the generation of electricity. They are 
going to have to make significant cuts, and they are going to 
have to look at the special programs that they offer, 
everything from AP programs for the educated and gifted 
students, to the social services, the autism, the community 
counseling, the other kinds of things that needy children and 
needy families need.
    Mr. Bachus. Okay.
    Mr. Kovacs, do you think that the House-passed regulatory 
reform bills from last term, especially the Regulatory 
Accountability Act, the REINS Act, the Regulatory Flexibility 
Improvement Act, and the Sunshine for Regulatory Decrees and 
Settlements Act would help substantially to address some of the 
economically impacting regulations that have been identified 
today?
    Mr. Kovacs. I think it is fair to say that some are more 
important than others. I think that the permit streamlining 
bill that this Committee passed out of Committee and passed 
through the House last year is very important. That could cut 
the time for getting permits in half. At least that is what the 
pilot programs have shown. And it does so without really 
offending anyone's rights. It literally puts a lead agency in 
charge, drives the process and timeframes. Very, very workable.
    The Regulatory Accountability Act is very important because 
it allows more transparency of the agencies and the information 
that they are relying on, and it allows us, as the regulated 
community, to put more information into the system. And it 
begins to take away the deference from the agencies and restore 
it to more of a level playing field so Congress has more of a 
role.
    I think on the sue-and-settle litigation, I don't know what 
it is called this year, that is certainly important because one 
of the things that does is when you have a sue-and-settle 
arrangement between the agencies, an outside group is actually 
deciding how the agency is going to prioritize its time and its 
budget.
    I would put those in the top three. But I would certainly 
say permit streamlining is something that I think you can get 
agreement with. I think even the Obama administration talks 
about it. CEQ has talked about it. So if you are talking on all 
of the bills, on permit streamlining you really start narrowing 
it to where if you want to do something that is practical, that 
is it.
    Mr. Bachus. All right. Thank you.
    And I will say, Mr. Weissman, too big to fail, I think 
Chairman Bernanke again testified yesterday that it was causing 
some distortions.
    I can conclude the hearing. However, we don't have votes. 
And if Members would like to have a second round of questions.
    Mr. Cohen. Can I go to the dentist instead?
    Mr. Bachus. Dentist? To the dentist? Sure. Sure. And I 
don't know if Mr. Garcia wants to stay.
    Mr. Garcia. Mr. James, I don't want you to take offense to 
my questioning. I do understand. And I know how tough it is to 
have revenue that you want to put into your city. You know, I 
appreciate the Chairman and talking about social services. 
There is nothing more that heartens me more than to have 
Republicans talk about a social safety net provided by a 
competitive model that doesn't work, which of course implies 
subsidization, which I am sure Mr. Greenblatt would love to pay 
taxes for. And then Mr. Weissman would agree to, Mr. Kovacs 
would object to, Mr. Glicksman would justify, and Mr. Holtz-
Eakin would say you are all crazy. All right?
    So the reality here is that we all want what is best for 
our country. I would suggest to you that when you are looking 
at a power plant of that age, you are done. It has nothing to 
do with regulation. But it is easier for your local power 
plant, which contributes to your local chamber of commerce, 
which is an essential element to your community, to blame it on 
us in Washington. Everybody blames it on us in Washington, and 
most of the time they are right.
    But you are at a point where, I would suggest to you, you 
know, use the power of your office to find an alternative 
process, because you are going to get yourself in trouble, 
right? To depend on keeping a power plant open at this 
timeframe with the innovations that the market has created in 
energy. We are about to experience an energy boom in our 
country that is going to make Mr. Greenblatt more productive, 
is going to create more customers for the Chamber of Commerce, 
and is going to give Mr. Glicksman and Mr. Weissman more work 
trying to regulate.
    But the reality is that we are looking at a renaissance. 
And so I say this just so you are aware of it, because we 
sometimes are misled by community leaders who feel, it is 
unfortunate, but 60-year-old coal-fired power plants are 
usually a little bit behind the time. And that is all I wanted 
to make a point about.
    Mr. Bachus. All right. Thank you.
    Mr. Marino, do you?
    Mr. Marino. No, my gift to everybody is I have no 
questions. But thank you. It was very interesting and I learned 
a great deal today. Thank you.
    Mr. Bachus. Thank you.
    Mr. Collins.
    Mr. Collins. Thank you, Mr. Chairman. We have disagreements 
across the aisle here, and I understand that. I used to be in 
the industry as well with smokestack monitoring and other 
things. Right now we are cleaner than we have ever been. And I 
agree, there is regulations that need to be in place. But to 
say that, and to attack a 60-year-old plant, you can come to 
Georgia, we have got less than 60-year-old plants that are 
looking to close. And they are closing because of regulation. 
Okay. And you understand that, and I respectfully agree.
    The problem is here is there is a regulatory issue and 
there is regulatory problems. There is a balance that needs to 
be struck. And right now, from my perspective, there is--and we 
have heard testimony today that there is areas that we can 
agree on or disagree on, but there is an effect. And that is 
why I appreciate Mr. James and Mr. Greenblatt and others, and 
also the professors who are here and from the chamber 
discussing this in an open format. I think the interesting 
question is, when you talk about investment, and the discussion 
I think my other colleague from across the aisle said, well, we 
wanted to put more EMS and more firefighters and teachers. 
Well, we are doing that with borrowed money, and we are also 
doing it with strings attached. We are talking about regulatory 
reform here. And we are going to add that together.
    One last sort of question, Mr. Greenblatt, the $15,000, 
which was made sort of light of in the fact that you have a 
very successful company and that. Were you able to calculate 
how much--you said mission essential--how much do you think you 
lost, in addition to whatever you may have ended up paying, 
what did you time-wise, do you even have a calculation of what 
actual cost, not just to do this, but just the distraction 
factor here?
    Mr. Greenblatt. My CFO had to spend 15 to 20 hours, you 
know, on hold, discussing, negotiating with the IRS. We had to 
write letters. We had to get our accountant involved. It was 
thousands of dollars. And, you know, that CFO could have been 
doing job costing so we could quote the next job well, you 
know. He could have been negotiating with our vendors, all 
productive tasks. Instead, he is doing things that add no 
value. And we are fighting with China every day. So we need to 
have a very streamlined system so that we can be more 
competitive so we can export more and hire more locals.
    Mr. Collins. I know this has been many hearings, and I am 
new and have not been a part of the 17 hearings, but to me if 
we do 17 hearings, if doing 17 hearings makes a difference in 
job creation, job growth, and a better government, then let's 
have 17 more. Let's get it done. Because our people are looking 
for that. They are not looking for anything else. And I 
appreciate my friends across the aisle in discussing this. And 
we will have more discussions as we go, Mr. Chairman. I yield 
back.
    Mr. Garcia. Mr. Chairman, if I could. With all respect to 
the gentleman from Georgia, I would love to sit here and, you 
know, work on regulatory reform. You know, we know it is 
broken. But all government is broken. It is the nature of why 
we have a Congress. We have to meet regularly to fix it. But 
there is no question that cool heads can prevail, not declare 
war, whether it be Obama or other Presidents that may have 
declared war. I didn't even know that he had invoked the war 
powers, because we certainly didn't vote it out of Congress.
    But my hope would be that on all of this that reasonable 
men and women sitting in this chamber can agree that there are 
huge swaths of--that Mr. Greenblatt is filling out a form 
should be absurd to all of us, right? With our computer 
technology, that he has to sit there and do this. And I am more 
than happy, if the Chairman wants to convene a working group, 
or if we want to set--I am a freshman. We are not doing 
anything here anyway.
    So the reality is that we have time to sit down and try to 
work on these solutions. And I am sure that the Chamber of 
Commerce would give us lodging space and lock us in a room and 
feed us every once in a while. But we understand there is 
regulation and then there is excessive regulation. There are 
rules that have been there too long. There are billions of 
dollars of unnecessary loopholes that no longer make sense. And 
we could be working on all of this. Yet we have had this week 
our sum total of important vote was naming a space center after 
Neil Armstrong, which is a wonderful thing.
    Mr. Bachus. We actually approved the journal, too.
    Mr. Garcia. On a recorded vote.
    Mr. Bachus. Mr. Cohen?
    Mr. Cohen. Let me ask one small question, and we probably 
shouldn't be lost in the weeds. But Mr. Greenblatt, I was 
concerned, $15,000 for a signature. Was that signature one that 
if you would have signed it you would have put yourself under 
some penalty or some oath that by signing here you are 
indicating that everything above is subject to penalties? Was 
it one of those type signatures that by not signing it----
    Mr. Greenblatt. It was a form we received in 2006. And in 
2010, we got the fine. So there was this empty time where 
nothing happened.
    Mr. Cohen. Right.
    Mr. Greenblatt. And I had to sign the form in three 
different places. It was for our 401(k) program. And, you know, 
so I hit two of the three. I missed the third.
    Mr. Cohen. So when you failed to sign it, you had gone 
through two administrations. That was the Bush administration 
that levied the fine?
    Mr. Greenblatt. Yeah. I mean, the point is it is 
paperwork----
    Mr. Cohen. I know, it does seem absurd.
    Mr. Greenblatt. We are trying to grow jobs. We are fighting 
China and Mexico.
    Mr. Cohen. And you have done a great job, and I hope that 
Tulane stays in the Big East with Memphis, and we will have 
many good games in the future.
    Mr. Bachus. Thank you. Thank you.
    This concludes today's hearing. Thanks to all our witnesses 
for attending. Without objection, all Members will have 5 
legislative days to submit additional written questions for the 
witnesses or additional materials for the record.
    This hearing is adjourned. And I will say this. We are 
going to take up, Mr. Garcia, and get a working group together 
and invite some of you in on those discussions in a balanced 
approach. Thank you.
    [Whereupon, at 11:10 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Spencer Bachus, a Representative in 
   Congress from the State of Alabama, and Chairman, Subcommittee on 
            Regulatory Reform, Commercial and Antitrust Law
    Since the November 2012 election, the Obama Administration has 
moved into overdrive in its regulatory war on jobs, the economy, and 
America's global competitiveness.
    Let me be clear. Congress cannot sit silent while America's 
economic growth is imperiled. One of my top priorities in this Congress 
will be to do everything possible to reduce the regulatory burdens that 
our nation's small businesses are facing, to get more Americans back to 
work, and to help grow our economy.
    A study last summer by the Organization for Economic Cooperation 
and Development revealed that after measuring countries by the number 
of regulations they have, ``it is now easier to start a business in 
Slovenia, Estonia and Hungary . . . than in America.''
    According to former CBO Director Douglas Holtz-Eakin, countries 
from England, to South Korea to Portugal have already undertaken 
regulatory reforms. England has been particularly aggressive, adopting 
a ``one in two out'' rule for new regulations, which requires 
policymakers introducing a new regulation to rescind or modify an 
existing regulation that costs double so the total regulatory burden is 
actually reduced.
    The governments of our international competitors are not merely 
paying lip service to lightening the regulatory load, they are taking 
meaningful actions. We seem to be moving in the opposite direction.
    Last fiscal year, the total U.S. paperwork burden grew by more than 
355 million hours, or four percent.
    A 2012 report by NERA Economic Consultants on the regulations 
affecting the manufacturing sector found that exports in 2012 might 
have been as much as 17% lower than they would have been without the 
estimated regulatory burden. Such loss in output directly represents 
lost jobs and economic opportunities.
    Instead of the regulatory burden diminishing to keep American 
businesses competitive and hiring, experts expect the pace of 
regulation to increase in President Obama's second term.
    Just prior to Election Day, the National Journal reported that 
``[f]ederal agencies are sitting on a pile of major health, 
environmental, and financial regulations that lobbyists, congressional 
staffers, and former administration officials say are being held back 
to avoid providing ammunition to Mitt Romney and other Republican 
critics.'' Now the floodgates are open. For example, the Patient 
Protection and Affordable Care Act and the Dodd-Frank Wall Street 
Reform and Consumer Protection Act created a host of regulatory 
obligations which agencies have yet to fulfill.
    Similarly, the American Action Forum identified $123 billion in 
possible regulations in the Administration's 2012 Unified Regulatory 
Agenda that would also add more than 13 million hours of paperwork 
burden. It is no wonder the Administration delayed releasing this 
agenda, and its plans for 128 new ``economically significant'' 
regulations until after the election.
    What is most striking perhaps is this Administration's 
insensitivity to the negative effects overregulation has on vulnerable 
groups. Overregulation costs Americans jobs and a new study shows 
agencies' cost benefit analyses fail to consider that over 75% of older 
workers who lose their jobs remain unemployed three years later and 
those who can find work frequently must accept as much as 20% less pay.
    Overregulation also disproportionately burdens low income 
households. Because of the law of diminishing returns, new regulations 
require spending increasingly more money to mitigate increasingly 
smaller risks. Many of these costs are passed down to consumers. New 
research from the Mercatus Center shows low income households would be 
much better off spending this money mitigating more immediate personal 
risks, for example, by using money that should rightfully be theirs to 
afford rents in safer neighborhoods.
    In light of these very real trade-offs, I am deeply concerned that 
some pro-regulation advocates are calling for an Executive Order to 
``rescind requirements'' that there be cost-benefit analyses of 
significant regulations. I hope that stories from Main Street about the 
negative impacts plant closures have on lives and communities will help 
sensitize regulators and their allies to the very real suffering that 
even well-meaning regulatory advocacy can impose.
    However, we cannot rely on hope to turn the tide of excessive 
regulation. I am committed to restoring accountability and providing 
relief from excessive regulation to our nation's small businesses and 
job creators who need it most.
    Last Congress, the Committee reported a number of important and 
far-reaching bills to reform overregulation, ease the burden on jobs 
and the American economy, and restore America's competitiveness. The 
House passed them all, but the Democrat-led Senate refused to act and 
President Obama threatened to veto them.
    The overreach of Obama Administration regulations is one of the 
chief reasons the economy has failed adequately to recover and produce 
new jobs throughout the Obama Administration. Congress and the 
President must act to take a different direction that will allow 
America's jobs, economy, and competitiveness to be restored. The House 
will do its part, and for the sake of our economic future, I call on 
the Senate and the Obama Administration to do theirs.

                                

 Prepared Statement of the Honorable Steve Cohen, a Representative in 
Congress from the State of Tennessee, and Ranking Member, Subcommittee 
           on Regulatory Reform, Commercial and Antitrust Law
    On a typical day, I wake up, brush my teeth, take a shower, maybe 
have some breakfast, get dressed, and go outside to where I parked my 
car, which I drive to work.
    I then spend most of the day at the office, in hearings, on the 
House floor, or meeting constituents. I will grab some lunch and dinner 
when I find the time.
    At the beginning and end of the week, whenever the House is in 
session, I get on a plane, as I will this afternoon, to travel between 
Washington and Memphis.
    I can do all this without thinking twice about whether any of those 
activities will expose me to a high risk of harm.
    The reason I can take my well-being for granted in these day-to-day 
activities is because our Nation has a strong regulatory system, one 
that strives to protect our environment and our health and ensure the 
safety our workplaces, our public spaces, our consumer products, our 
cars, and our airplanes, among many other things.
    Yet the regulatory debates in this Subcommittee over the last 
couple of years have been focused almost exclusively on the costs of 
implementing regulations. It is often left to those of us on this side 
of the aisle to point out not only that there are benefits to 
regulation, but that those benefits consistently outweigh regulation's 
costs.
    In addition to ignoring the net benefits of regulation, those who 
focus solely on regulatory costs also tend to ignore the even greater 
costs of regulatory failure. As two of our witnesses--Robert Glicksman 
of George Washington University Law School and Robert Weissman of 
Public Citizen--will discuss in greater detail, regulatory failure is 
far more costly for the economy and for society than the existence or 
creation of new regulations.
    We must not forget that it was the lack of adequate regulation 
which caused the Deepwater Horizon oil spill, the Sago Mine disaster, 
the mortgage foreclosure crisis, and the 2008 financial crisis and 
Great Recession that followed.
    In short, there is a far greater human and economic cost to 
stopping agencies from regulating than there is to allowing new 
regulations to take effect.
    I will leave the rest of the discussion to our witness panel and to 
our question time, but I would like to offer this plea.
    We ought to be able to have a serious, substantive, and nuanced 
discussion about what problems exist in the federal regulatory system 
and what Congress ought to do to address those problems.
    But so long as we continue to hold hearings with inflammatory and 
partisan titles like this one, where the premise suggests that the 
debate should revolve only around regulatory costs, such a discussion 
will be difficult to have, as it only invites defensiveness and 
conflict.
    We will, as we did last Congress, devolve into a hollow debate, a 
battle of talking points, without really engaging each other.
    I hope that we can do better going forward.

                                

Prepared Statement of the Honorable Bob Goodlatte, a Representative in 
  Congress from the State of Virginia, and Chairman, Committee on the 
                               Judiciary
    Since the November 2012 election, the Obama Administration has 
moved into overdrive in its regulatory war on jobs, the economy, and 
America's global competitiveness.
    Let me be clear. Congress cannot sit silent while America's 
economic growth is imperiled. One of my top priorities in this Congress 
will be to do everything possible to reduce the regulatory burdens that 
our nation's small businesses are facing, to get more Americans back to 
work, and to help grow our economy.
    A study last summer by the Organization for Economic Cooperation 
and Development revealed that after measuring countries by the number 
of regulations they have, ``it is now easier to start a business in 
Slovenia, Estonia and Hungary . . . than in America.''
    According to former CBO Director Douglas Holtz-Eakin, countries 
from England, to South Korea to Portugal have already undertaken 
regulatory reforms. England has been particularly aggressive, adopting 
a ``one in two out'' rule for new regulations, which requires 
policymakers introducing a new regulation to rescind or modify an 
existing regulation that costs double so the total regulatory burden is 
actually reduced.
    The governments of our international competitors are not merely 
paying lip service to lightening the regulatory load, they are taking 
meaningful actions. We seem to be moving in the opposite direction.
    Last fiscal year, the total U.S. paperwork burden grew by more than 
355 million hours, or four percent.
    A 2012 report by NERA Economic Consultants on the regulations 
affecting the manufacturing sector found that exports in 2012 might 
have been as much as 17% lower than they would have been without the 
estimated regulatory burden. Such loss in output directly represents 
lost jobs and economic opportunities.
    Instead of the regulatory burden diminishing to keep American 
businesses competitive and hiring, experts expect the pace of 
regulation to increase in President Obama's second term.
    Just prior to Election Day, the National Journal reported that 
``[f]ederal agencies are sitting on a pile of major health, 
environmental, and financial regulations that lobbyists, congressional 
staffers, and former administration officials say are being held back 
to avoid providing ammunition to Mitt Romney and other Republican 
critics.'' Now the floodgates are open. For example, the Patient 
Protection and Affordable Care Act and the Dodd-Frank Wall Street 
Reform and Consumer Protection Act created a host of regulatory 
obligations which agencies have yet to fulfill.
    Similarly, the American Action Forum identified $123 billion in 
possible regulations in the Administration's 2012 Unified Regulatory 
Agenda that would also add more than 13 million hours of paperwork 
burden. It is no wonder the Administration delayed releasing this 
agenda, and its plans for 128 new ``economically significant'' 
regulations until after the election.
    What is most striking perhaps is this Administration's 
insensitivity to the negative effects overregulation has on vulnerable 
groups. Overregulation costs Americans jobs and a new study shows 
agencies' cost benefit analyses fail to consider that over 75% of older 
workers who lose their jobs remain unemployed three years later and 
those who can find work frequently must accept as much as 20% less pay.
    Overregulation also disproportionately burdens low income 
households. Because of the law of diminishing returns, new regulations 
require spending increasingly more money to mitigate increasingly 
smaller risks. Many of these costs are passed down to consumers. New 
research from the Mercatus Center shows low income households would be 
much better off spending this money mitigating more immediate personal 
risks, for example, by using money that should rightfully be theirs to 
afford rents in safer neighborhoods.
    In light of these very real trade-offs, I am deeply concerned that 
some pro-regulation advocates are calling for an Executive Order to 
``rescind requirements'' that there be cost-benefit analyses of 
significant regulations. I hope that stories from Main Street about the 
negative impacts plant closures have on lives and communities will help 
sensitize regulators and their allies to the very real suffering that 
even well-meaning regulatory advocacy can impose.
    However, we cannot rely on hope to turn the tide of excessive 
regulation. I am committed to restoring accountability and providing 
relief from excessive regulation to our nation's small businesses and 
job creators who need it most.
    Last Congress, the Committee reported a number of important and 
far-reaching bills to reform overregulation, ease the burden on jobs 
and the American economy, and restore America's competitiveness. The 
House passed them all, but the Democrat-led Senate refused to act and 
President Obama threatened to veto them.
    The overreach of Obama Administration regulations is one of the 
chief reasons the economy has failed adequately to recover and produce 
new jobs throughout the Obama Administration. Congress and the 
President must act to take a different direction that will allow 
America's jobs, economy, and competitiveness to be restored. The House 
will do its part, and for the sake of our economic future, I call on 
the Senate and the Obama Administration to do theirs.


                                

 Prepared Statement of the Honorable Doug Collins, a Representative in 
    Congress from the State of Georgia, and Member, Subcommittee on 
            Regulatory Reform, Commercial and Antitrust Law






                                

 Prepared Statement of the Honorable Henry C. ``Hank'' Johnson, Jr., a 
   Representative in Congress from the State of Georgia, and Member, 
    Subcommittee on Regulatory Reform, Commercial and Antitrust Law
    This politicized hearing is yet another example of a Majority more 
interested in attacking the President than providing thoughtful 
solutions to our Nation's most pressing issues.
    This hearing purports to explore solutions to growing the economy, 
creating jobs, and increasing America's competitiveness 
internationally. These are all worthy, laudable goals. But we cannot 
pretend that this hearing is about economic growth or American 
prosperity.
    The Majority pre-supposes that regulations have harmful effects, 
despite ample evidence from leading bipartisan and non-partisan reports 
have found the opposite. The Majority continues to rely on studies that 
are partisan or have been debunked, and overlooks the public benefits 
associated with regulation. For instance, the BP oil spill costs tens 
of billions in damages to the Gulf of Mexico and the Gulf Coast 
communities. Likewise, the 2008 Wall Street collapse stemmed from an 
avoidable lapse of financial regulation, costing trillions and 
collapsing the global economy. These costs far exceed the cost of 
paperwork or compliance, and are only recent examples.
    We have already heard testimony on the issue in numerous hearings 
in the Committee and this Subcommittee. We have debated these issues 
tirelessly. And now, instead of addressing important issues, this Do 
Nothing Congress is using yet another hearing in its attempt to 
discredit President Obama.
    If this body does not address sequestration, American workers will 
face yet another hurdle to providing for their families and realizing 
the American dream. This mindless austerity takes a meat-cleaver 
approach to cutting programs, regardless of the wisdom of doing so or 
the long-term costs that these cuts would create. Indeed, the only plan 
that the Majority has advanced is one that would not stem job loss, but 
one that would cut the programs that help the unemployed, the sick, and 
the poor. Sequestration threatens to forestall economic recovery, 
amplifying the effects of the recession on so many Americans.
    If the Majority was truly concerned with growing the economy, 
creating jobs, and protecting American competitiveness, we would have 
come together with a Grand Bargain of spending cuts to address the 
government's long-term budget deficits and prevented sequestration long 
ago. Instead, sequestration will arbitrarily take 85 billion dollars of 
out our economy, lower our GDP, cost jobs, and harm our economic 
recovery and global competiveness. The Republican leadership failure 
will be felt nationwide, and its impact on my home state of Georgia is 
of grave concern to me.
    We cannot pretend that this hearing is about growing the economy or 
creating jobs.
    I also take considerable issue with the title of this hearing. In a 
week when this Committee discussed terrorism at length in a hearing on 
drones and national security, the title of this hearing belittles the 
great sacrifices our brave men and women in the military have made in 
support of our country's security. I ask that the Majority consider the 
hardships and sacrifices that so many Americans have made when using 
the words ``regulatory war.''


                                

 Material submitted by the Honorable Hakeem Jeffries, a Representative 
  in Congress from the State of New York, and Member, Subcommittee on 
            Regulatory Reform, Commercial and Antitrust Law








                               __________
                               
                               
                               
                               
                               
                               


                                

 Response to Questions for the Record from Robert L. Glicksman, J.B. & 
     Maurice C. Shapiro Professor of Environmental Law, The George 
                  Washington University School of Law










                                

      Response to Questions for the Record from Drew Greenblatt, 
          President and Owner, Marlin Steel Wire Products, LLC








                                

      Response to Questions for the Record from Robert K. James, 
                  Member of the Avon Lake City Council






                                

    Response to Questions for the Record from Douglas Holtz-Eakin, 
                    President, American Action Forum




                                

  Response to Questions for the Record from William L. Kovacs, Senior 
  Vice President, Environment, Technology & Regulatory Affairs, U.S. 
                          Chamber of Commerce








                                

      Response to Questions for the Record from Robert Weissman, 
                       President, Public Citizen









                                 
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