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





                IMPEDIMENTS TO JOB CREATION IN MICHIGAN

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT OPERATIONS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 6, 2014

                               __________

                           Serial No. 113-117

                               __________

Printed for the use of the Committee on Oversight and Government Reform






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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        Vacancy
RON DeSANTIS, Florida

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

                 Subcommittee on Government Operations

                    JOHN L. MICA, Florida, Chairman
TIM WALBERG, Michigan                GERALD E. CONNOLLY, Virginia 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
THOMAS MASSIE, Kentucky              MARK POCAN, Wisconsin
MARK MEADOWS, North Carolina

























                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 6, 2014......................................     1

                               WITNESSES

Mr. Chris Fisher, President and CEO, Associated Builders and 
  Contractors of Michigan
    Oral Statement...............................................     5
    Written Statement............................................     7
Ms. Janet Kaboth, President and CEO, Whitacre Greer Company
    Oral Statement...............................................    10
    Written Statement............................................    13
Mr. Michael Lenahan, President, Resource Recovery Corporation of 
  West Michigan
    Oral Statement...............................................    16
    Written Statement............................................    19
Mr. Richard Kligman, President, Superb Custom Homes
    Oral Statement...............................................    22
    Written Statement............................................    25

                                APPENDIX

The Dodd-Frank Act: A Regulatory Impediment to Job Creation by 
  James E. Tompert, Esq., submitted by Mr. Lenahan...............    56
Comments of Thomas J. Slavin, CIH, CSP, CSHM, CPEA on Proposed 
  OSHA Rule for Occupational Exposure to Respirable Crystalline 
  Silica, submitted by Rep. Mica.................................    67

 
                IMPEDIMENTS TO JOB CREATION IN MICHIGAN

                              ----------                              


                          Tuesday, May 6, 2014

                   House of Representatives
              Subcommittee on Government Operations
               Committee on Oversight and Government Reform
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 9:05 a.m., in 
Plymouth Township Hall, 9955 N. Haggerty Road, Hon. John L. 
Mica [chairman of the subcommittee] presiding.
    Present: Representatives Mica and Bentivolio.
    Staff Present: Mark D. Marin, Deputy Staff Director for 
Oversight; Katy Rother, Counsel; Sarah Vance, Assistant Clerk.
    Mr. Mica. Good morning. I would like to call this hearing 
of the United States House of Representatives Committee on 
Oversight and Government Reform hearing to order. This morning 
we have the subcommittee field hearing of the Government 
Operations Subcommittee. I would like to welcome everyone. We 
are here at the request of my colleague, the gentleman from 
Michigan, Mr. Bentivolio, and this is one in a series of 
hearings we are holding around the country.
    The responsibility of the Oversight and Government Reform 
Committee is to secure several fundamental principles. First, 
Americans have the right to know that the money the government 
takes from them is well spent. And second, Americans deserve an 
efficient and effective government that works for them. The 
Oversight and Government Reform Committee is to ensure that 
these rights and responsibilities of the government are upheld.
    It is absolutely essential in our system to have 
accountability. We have committees that have jurisdiction for 
creating different government programs. We have committees that 
appropriate and fund programs. Our particular responsibility is 
overseeing how those programs are working, how they operate and 
function in the best interests of the American people, and how 
their funds are spent.
    It is also good to be here in Plymouth. I want to thank the 
township for hosting us in this beautiful facility. I thank 
Congressman Bentivolio for inviting us and participating today 
in this hearing.
    I might tell folks that this is probably the first 
congressional hearing that has been held in Plymouth. Maybe 
there have been others; I don't know about them. This is the 
first I know of.
    This is not a town hall forum. We do have a very formal 
schedule, and that is the order of our business. A complete 
record of this hearing is made. It will also be transcribed, 
and it is for official purposes. So those who have been invited 
to testify this morning will do so. They will do so also under 
oath. We will introduce that panel shortly.
    The order of business is I will give an opening statement. 
I will yield to Mr. Bentivolio for his opening statement. We 
will also keep the record open. We don't have our full 
subcommittee membership with us today, but members will be 
entitled for a designated number of days to submit statements 
for the record.
    I might say, too, for the public and officials and others 
who are attending, if you would like to participate in 
contributing to the hearing, you are welcome to ask through 
your representative, in this case Mr. Bentivolio, that your 
statement be submitted for the record. It would have to be done 
through a member of Congress.
    So that is the order of business we will conduct ourselves 
in. And again, I thank people for attending. Thank you for the 
invitation. Good to be with you here.
    The first thing that I want to do is, again, talk about why 
we are here and what the subject is. Today I think it is 
important that we look at not just the laws that are passed in 
Washington, but laws creating agencies impact us in that the 
agencies produce regulations, and that is their authority under 
law.
    In addition to the laws that we pass, we are now seeing the 
proliferation of rules and regulations coming out of agencies 
at an unprecedented pace. Those regulations do have very 
serious impact on the creation of jobs, the expansion of the 
economy, and also the ability for people to live and realize 
the American Dream because they all have an impact, a cost, and 
specifically we will see in this hearing some consequences in 
what happens in expanding jobs.
    According to the Congressional Research Service, between 
2009 and 2012 the Obama Administration finalized more than 
13,000 regulations. Last year alone, more than 3,500 new 
regulations were added to the books. By the Administration's 
own estimates, major regulations issued in 2012 added almost 
$20 billion in annual costs to the American economy.
    Annually, Federal regulations cost the American economy a 
staggering $1.8 trillion. As the Competitive Enterprise 
Institute puts it, if it were a country, the U.S. regulations 
would account and be responsible for that particular activity 
being the 10th largest economy in the world.
    The growing regulatory state is particularly a concern for 
small business. According to the United States Chamber of 
Commerce, almost 45 percent of small businesses identify over-
regulation and economic uncertainty as their most significant 
challenges.
    According to the National Federation of Independent 
Businesses, government regulations are the single most 
important problem facing small businesses. Oftentimes people 
think that big corporations are the primary employers in the 
United States. In fact, it is small business that is the 
biggest employer, and also the biggest job creator.
    So there is a concern, and that concern is warranted about 
the proliferation of these regulations. Last year, Federal 
agencies published proposed and final rules that, by the 
Administration's own estimates, would cost the American economy 
$112 billion.
    In the Obama Administration, Federal regulators have 
finalized rules that, in total, cost the economy again almost 
half-a-trillion dollars.
    So these are some of the facts that we want to make certain 
are part of the record. We are going to hear from several 
witnesses today. We have four witnesses, and I will introduce 
them shortly.
    I also want to pay attention and recognition to Mr. Lewis 
K. Uhler, who is President of the National Tax Limitation 
Committee. I met him just a few minutes ago. He has come all 
the way from California to attend this hearing, and his 
organization, the National Tax Limitation Committee, focuses on 
some of the issues like we are discussing here today.
    So it is nice to see folks from Plymouth, from Michigan, 
all the way from California who are concerned about the 
direction of regulations and the cost of doing business and 
making America go and grow. So, I am very pleased to welcome 
him and all of you again.
    I thank Mr. Bentivolio, and I will yield now to the 
gentleman from Michigan for an opening statement.
    Mr. Bentivolio. Good morning. I want to start by thanking 
the chairman for holding this hearing in the wonderful 11th 
District of Michigan and for the opportunity to hear directly 
from business leaders about how the Federal Government is 
impacting the business environment. Thank you to the witnesses 
who are here to speak with us today.
    We are speaking about Federal regulations today because 
Federal regulations have the potential to significantly impact 
businesses and communities. The impact of regulations is often 
good. In my lifetime, the need for appropriate regulation has 
been made apparent from damage to our homes, families, and 
environment from a handful of bad actors.
    Not far from here, industrial pollution led to multiple 
fires on the Cuyahoga River in Ohio. In the 1970s, the nation 
was shocked by the tragedy of ineffective toxic chemical 
disposal at Love Canal in New York. Importantly, as a nation, 
we acted.
    In the 1960s, we passed the Clean Air Act and the National 
Environmental Policy Act. In the 1970s, we passed the Clean 
Water Act and the Occupational Health and Safety Act. When 
faced with serious concerns, we put in place many appropriate 
and effective regulations that protect our families, our 
workers, and our environment because clean water, healthy 
children, and safe work environments are important to all of 
us.
    But it is also important that we strike a balance. 
Affordable homes, steady employment, and the ability to provide 
for our families are important. Regulating for the sake of 
regulating only harms our families and our workers. As I walk 
around our community, I see ``For Sale'' and ``For Lease'' 
signs instead of ``Help Wanted'' signs.
    Unemployment in Michigan has been above the national 
average for more than a decade. According to the Heritage 
Institute, EPA regulations are expected to cost the nation more 
than 600,000 jobs by 2023. Michigan will lose more than 15,000 
jobs in the manufacturing industry alone. The manufacturing 
industry faces some of the highest regulatory burdens in our 
nation, and the 11th Congressional District has the second-
highest number of manufacturing jobs. We can't afford these 
regulations. We can't afford to lose jobs because the EPA 
doesn't know when to quit.
    Last year, the EPA proposed three regulations that, in 
total, will cost the economy more than $50 billion. If we keep 
going like this, we will regulate America out of business.
    Currently, there are many proposed Federal regulations 
that, if finalized, will threaten the survival of many Michigan 
small businesses, which will result in job losses. Today we 
will hear from those business leaders who are on the front 
lines, drowning in the sea of new and potential regulations. I 
look forward to the perspectives of those with real experience 
and knowledge about the impact of Federal action.
    Thank you, and I yield back.
    Mr. Mica. I thank the gentleman.
    The next order of business will be I am going to introduce 
our witnesses.
    Before I do that, I want to state for the record that 
members may have 7 days to submit opening statements for the 
record.
    Without objection, so ordered.
    And again, I welcome our witnesses who volunteered. We 
didn't have to subpoena any of you today, which is good. Thank 
you for being part of our hearing today. In just a minute I 
will swear you in and you will be sworn before the committee.
    I don't know if anyone has testified before, but we ask you 
to try to limit your presentation and testimony to 5 minutes, 
an oral presentation to the subcommittee. If you have lengthy 
material or additional information you would like to be made 
part of the record, we will be glad to do that through 
requests. That is sort of the rules of procedure.
    Today we have Mr. Chris Fisher. He is President and CEO of 
the Associated Builders and Contractors of Michigan.
    Welcome.
    We have Ms. Janet Kaboth. She is the President and CEO of 
Whitacre Greer Company.
    We have Mr. Lenahan, President of the Resource Recovery 
Corporation of West Michigan.
    Our fourth and final witness is a constituent of Mr. 
Bentivolio, and I will defer to him to introduce that witness.
    Mr. Bentivolio. Thank you.
    It is my honor to welcome Mr. Richard Kligman here today in 
his capacity as President of Superb Custom Homes.
    Thank you for being here today, all of you.
    Mr. Mica. Thank you, Mr. Bentivolio.
    Now, if our witnesses will rise, please, raise your right 
hand.
    [Witnesses sworn.]
    Mr. Mica. Let the record reflect that all of the witnesses 
answered in the affirmative.
    Again, I welcome each of you, good to have you participate. 
As I said, if you have a long statement, we will ensure that 
through request it is in its entirety will be part of the 
record, but we would like you to try to summarize in 5 minutes. 
That will give us a chance to go through everyone. We will hold 
the questions until afterwards. Then Mr. Bentivolio and I will 
submit some questions for your response.
    So, we will start first with Mr. Fisher. He is President 
and CEO of Associated Builders and Contractors of Michigan.
    Welcome, sir, and you are recognized.

                       WITNESS STATEMENTS

                   STATEMENT OF CHRIS FISHER

    Mr. Fisher. Thank you, Chairman Mica. Welcome to Michigan, 
and thank you for the invitation to be here today. My name is 
Chris Fisher with ABC of Michigan. We are a statewide trade 
association working in partnership with chapters representing 
firms who perform work in the commercial and industrial 
construction sectors of our state.
    Today I would like to focus on a few labor issues by 
drawing a contrast between what states like Michigan have been 
doing on the state level by enacting commonsense reforms and 
contrast that a little bit with what we are seeing in the 
Federal Government, where we have seen a rather onerous and 
one-sided, big-labor-driven agenda that is clearly not working.
    I will begin by taking, for example, in 2009, when 
President Obama issued Executive Order 13502 to encourage 
Federal agencies to require what is called a Project Labor 
Agreement, or PLA, on Federally-funded construction projects. 
Very simply, a PLA is a special interest handout designed to 
only award construction contracts to unionized contractors and 
their unionized workforce. There is nothing wrong with 
unionized companies getting a contract, but it is wrong when 
you have a special interest monopoly that denies that open 
competition and gives everybody a fair shot.
    So PLAs commit the expense of two important things that 
this committee and Congress should be very concerned about, 
equal opportunity and fiscal accountability. PLAs deny U.S. 
businesses and workers equal opportunity by prohibiting the 
85.9 percent of the United States workforce that chooses not to 
be affiliated with a union from accessing work opportunities 
for public construction projects that are funded by their own 
tax dollars.
    PLAs also then discourage fiscal accountability because 
when you erode the competitive bid process like this, the 
ability for public procurement to reap the benefits of fair and 
open competition is diminished. The result, as studies have 
found, is that public construction costs escalate by as much as 
10 to 20 percent on these projects that are subject to PLAs.
    Now, what we would suggest is that instead the Federal 
Government needs to follow the lead of Michigan and some 20 
other states that have eliminated union-based favoritism in 
contracting by treating all workers and businesses, union and 
non-union alike, with the dignity that they deserve. This 
committee has jurisdiction over legislation introduced by 
Representative Andy Harris from Maryland, H.R. 436, the 
Government Neutrality in Contracting Act, which would prevent 
the Federal Government from further engaging in these unfair 
and costly procurement practices.
    Simply put, it is wrong to rip off taxpayers while denying 
citizens because of their labor status the opportunity that 
they deserve to work on public projects.
    PLAs are not the only example of Federal regulations run 
amok. The out-of-control National Labor Relations Board, or 
NLRB, has continually pursued a one-sided agenda instead of 
doing what its core purpose is, which is maintaining a balanced 
approach on behalf of both labor and management.
    The latest issue of concern is the NLRB's proposed ambush 
election rule. This rule is aimed to dramatically shorten the 
amount of time between when a union files a representation 
petition and when an election takes place to as few as 10 days. 
The harmful impact of this is that it therefore limits the 
ability of workers to gather information and facts as they 
weigh the important decision surrounding whether or not their 
company should be unionized or not.
    The National Labor Relations Board shouldn't be 
discouraging workers to get the facts necessary to make an 
important decision. Contrast this with states such as Michigan, 
where we have instead passed pro-worker reforms that enable 
workers to gather the information they need to make these 
decisions. Michigan passed Right To Work recently, and indeed 
we support the ability of workers to gather the information 
they need to make a decision and not be forced to join a union 
as a condition of employment.
    Finally, OSHA is likewise a concern. Take, for example, 
OSHA stating that non-union workers are able to now--or that 
union officials are able to do worksite inspections for 
companies that are potentially targeted. Having an organizer, a 
community organizer on a job site raises questions about the 
actual intent of that union organizer. And, for that matter, it 
raises questions about what is OSHA doing in this arena to 
begin with. It is not germane to its cause of workplace safety.
    Here in Michigan, however, we have agreements with OSHA and 
partnerships with OSHA where we work cooperatively to promote 
worker health and safety, and indeed this is the way we should 
do things federally.
    So, Mr. Chair, these are just a few examples of some of the 
issues that we are seeing on the regulatory labor end of 
things. What we are doing in Michigan is working, and we 
encourage the Federal Government to do the same. We have gained 
construction jobs every year over the past three years in 
Michigan. Construction worker incomes have increased year after 
year after year, and we think that the states are laying down a 
pretty good framework for the Federal Government to follow, and 
we would encourage this committee and others to act.
    So, with that, I would be happy to answer any questions 
later on, Mr. Chair, and thank you.
    [Prepared statement of Mr. Fisher follows:]



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    Mr. Mica. Thank you, Mr. Fisher.
    Let me recognize Janet Kaboth. She is the President and CEO 
of Whitacre Greer Company.
    Welcome, and you are recognized.

                   STATEMENT OF JANET KABOTH

    Ms. Kaboth. Thank you very much for the opportunity to come 
today. My name is Janet Whitacre Kaboth. I work for a company 
called Whitacre Greer, and we have been manufacturing clay 
products in northeastern Ohio since 1916. The company currently 
is owned by my brother, my sister and myself, and we are the 
fourth generation of my family to own and operate the company.
    I am here on behalf of my company and my industry. The many 
peaks and valleys of the brick industry is well demonstrated by 
the clay products industry here in Michigan, where in 1911 
there were as many as 138 clay product manufacturing 
facilities. Currently there are seven, with only one brick 
plant. What has happened here has happened all over the 
country.
    Whitacre Greer is a small niche product manufacturer that 
produces fire brick for the inside of masonry fireplaces and 
paving brick. You have probably walked on our paving brick in 
places like Pennsylvania Avenue in D.C., Greenfield Village 
here in Michigan, and Joe DiMaggio Children's Hospital in 
Hollywood, Florida.
    Our mission is to modernize our facility in order to 
succeed for the next 100 years. We have just begun the second 
of several phases in this modernization process.
    Our industry is committed to doing the right thing for our 
employees, vendors, customers, and communities. However, as we 
continue to struggle to come out of the Great Recession, we 
need to be sure our limited resources are being used on the 
most important issues that will provide some benefit for every 
dollar spent.
    Today I am going to talk about two upcoming regulations, 
the air toxic standard being developed by EPA, known as the 
Brick MACT, and the proposed revisions to the silica 
Permissible Exposure Limit, or PEL, being considered by OSHA. 
Compliance with either of these regulations threaten the 
continued existence of many small companies in our industry. 
Compliance with both of these rules at the same time will 
devastate our already-depleted industry.
    This leads to my constant question regarding the regulatory 
development process: Is anyone looking at the cumulative cost 
of these regulations on an industry? If these regulations would 
save lives of our workers or our neighbors, it would be worth 
it. However, in both cases, the regulatory authority has data 
that show the benefit of these regulations is minimal or non-
existent for the brick industry.
    The Brick MACT, which will be proposed in August, was 
originally promulgated in 2003. Our industry complied in 2006 
by installing 80 of the 100 controls now in existence at a cost 
of over $100 million in capital and operating costs. But in 
2007 the courts vacated the rule. Now the EPA is using the 
performance of these new controls to establish even lower 
limits for the upcoming rule. For many brick companies, this 
would require them to replace the controls installed to comply 
with the first MACT.
    We have used EPA's own air dispersion models and actual 
stack parameters to clearly demonstrate that even under the 
worst conditions, 99 percent of our emissions would be less 
than 40 percent of what EPA considers safe, and most would be 
less than 10 percent. We have spoken with EPA about this data 
but have received no feedback as of yet. We hope EPA is 
considering this health-based approach. However, the EPA has 
indicated the potential that even if they consider the health-
based approach, control of the remaining 1 percent of emissions 
could still cost our industry essentially the same as 
controlling the other 99 percent.
    EPA's estimates put the potential cost of this regulation 
at more than $188 million per year. That represents 22 percent 
of our gross industry revenue in 2012. Whitacre Greer's share 
of that cost is estimated to be $5 million, which is 50 percent 
of our current net worth.
    In September of last year, OSHA proposed provisions to the 
current PEL for silica. This reduction was proposed as a one-
size-fits-all type of regulation that is typical for OSHA. OSHA 
estimates costs for this rule to average $38,000 per year, 
annualized over a 10-year period, for a brick plant. This is 15 
to 18 times greater than OSHA's estimate for the average cost 
in general industry. Industry experts estimate that OSHA is 
underestimating this cost by as much as 20 to 50 times.
    OSHA has been provided a significant set of studies 
conducted over the last 75 or more years demonstrating that the 
silica found in the brick industry has a different effect on 
the body compared to silica in other industries. OSHA 
acknowledges separately the reduced incident rate of our 
industry and the much higher cost. However, they do not put 
those two pieces of data together to consider our industry 
separately. For each brick plant to comply will require an 
investment of $906,000 in the first year. This is the amount of 
cash that I need for compliance; therefore, the amount that is 
important to me, as opposed to the annualized amount.
    Practically speaking, compliance with both these 
regulations would require me to obtain a loan for $6 million to 
add equipment that would not reduce our costs, improve our 
product, increase our sales, or provide any health benefits for 
our employees or our neighbors. It would be impossible for us 
to obtain a loan of this size that would not provide us with 
any benefits at all in the current banking environment.
    The cost of compliance with both regulations at the same 
time would put us out of business, and we are probably not the 
only brick company in this situation.
    In both cases, EPA and OSHA have the flexibilities to meet 
their obligations without destroying our industry. We just 
don't know how to make them use those flexibilities, to take 
the time to do it right, not just do it quickly, and avoid a 
one-size-fits-all approach that will destroy an industry.
    I would like to think that after 100 years of providing 
good employment, paying taxes, and being a responsible 
corporate entity, that someone in our government could look at 
the cumulative effect of regulatory compliance and help us 
protect our workers, our neighbors, and our environment, but 
still allow us to exist.
    Thank you.
    [Prepared statement of Ms. Kaboth follows:]



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    Mr. Mica. Thank you for your testimony.
    We will now go to Mr. Michael Lenahan. He is the President 
of Resource Recovery Corporation of West Michigan.
    Welcome, sir, and you are recognized.

                  STATEMENT OF MICHAEL LENAHAN

    Mr. Lenahan. Thank you, Chairman Mica and Representative 
Bentivolio, for inviting me here today. My name is Michael 
Lenahan, and I am testifying on behalf of the American Foundry 
Society. The American Foundry Society is the predominant trade 
association of the metal casting industry in North America. 
Foundries manufacture engineered parts called castings, which 
are made by pouring molten metal into a mold. Most of the time 
these molds are made out of sand. Examples of metal castings 
that you may be familiar with are engine blocks, manhole 
covers, artificial knee joints, and the Liberty Bell.
    The U.S. foundry industry employs approximately a quarter 
of a million people, but 80 percent of those foundries employ 
100 people or less. We are comprised primarily of small 
businesses. Many of the companies that supply foundries are 
also small businesses, and I run one of those businesses.
    My testimony today really boils down to one thing and one 
thing only: anything that takes time away from the efficiency 
of managing a small business can be crippling. Small businesses 
simply do not have the resources to dedicate to tasks that are 
non-productive.
    In order for any business to thrive, there must be time for 
the management of that business to do three things: one, focus 
on enhancing what they do well; two, improve productivity; 
three, expand offerings and grow the business. When management 
has time to look ahead and focus on improvement, they typically 
increase productivity and expand. This often results in the 
hiring of more employees. When management does not have time to 
focus on these things, they mark time and wait for the next 
crisis. For many businesses, the next crisis is addressing the 
latest regulation. Regulations and, more specifically, 
regulatory changes or new regulations consume massive 
quantities of managerial time and resources.
    From my viewpoint, there are five major problems that I see 
with Federal regulations. One, there are far too many new 
regulations. Two, many new regulations or modifications to 
regulations appear to be created or modified with minimal or no 
thought as to how they will impact a business. Three, many 
regulations are improperly conceived or misapplied and provide 
little to no measurable benefit. Four, new regulations have a 
cost, a cost that is often ignored or dramatically understated 
by those writing the new regulations. Five, new regulations 
create uncertainty, which limits a business in their ability to 
plan.
    I have three brief examples that I would like to reference 
as part of my testimony today as to how regulations impact 
small business and job creation.
    The first example highlights OSHA's new Crystalline Silica 
Standard. I am submitting a copy of the foundry industry 
testimony given at the March 28, 2014 hearing with OSHA and the 
U.S. Department of Labor. In the interest of time, I would like 
to briefly explain in layman's terms the basics of this new 
rule.
    This new rule will reduce the permissible exposure limit 
for silica from 100 micrograms per cubic meter to 50 micrograms 
per cubic meter. What does 50 micrograms per cubic meter look 
like? Take a packet of artificial sweetener and distribute it 
across a football field at the height of 13 feet. That is what 
that looks like.
    As mentioned, foundries utilize sand, primarily made of 
silica, to make the molds which define the shape of the 
castings they produce. A foundry of this football field area 
size could be utilizing upwards of 10,000 tons of sand in 
annual production. As a reference point, it would take 400 semi 
dump trucks lined up bumper to bumper for approximately four 
miles.
    OSHA's new silica rule would require all foundries not 
meeting the 50 microgram standard to put in engineered 
controls, basically massive high-quality filtration equipment, 
within the facility to get the foundry into compliance. On the 
surface, this may seem like an acceptable idea until you dig a 
little deeper.
    First, the vast majority of experts on the subject believe 
foundries will fail to meet the standard even if they use the 
best technology money can buy. Second, to provide some 
perspective, the level of cleanliness required to meet the new 
standard is more stringent than what the National Aviation and 
Space Administration, NASA, requires for silica in one of their 
laboratory clean rooms. Lastly, the new rule does not allow 
employers to provide workers with personal protective devices 
until after it proves that the installed engineering controls 
cannot meet the standard. In other words, this regulation says 
spend the money on extremely expensive engineering controls 
whether they work or not, and only after you prove it does not 
work can you distribute personal protective equipment to your 
employees.
    The logic behind this approach is flawed at the most basic 
levels. How many successful strategic initiatives involve 
choosing the most expensive and most likely option to fail 
first? This would be like forcing a public school district to 
purchase jet airplanes to transport school children because 
statistics show it is a safer mode of transportation than 
buses. Practical application of this idea would be more costly 
and not as safe. Eventually they would go back to buses, but 
only after they broke the bank on buying airplanes.
    This may sound like a ridiculous comparison. However, you 
will see in the executive summary of the attached testimony 
that this is not the most effective way to protect workers. You 
will also see that OSHA has omitted some costs and grossly 
underestimated the overall cost to implement this new rule, $44 
million per year versus $2.2 billion.
    I think I am running out of time here, but I will make 
quick mention of NSPS Subpart UUU, which is the rule that was 
never intended to be applied to the foundry industry. This 
rule, we know it was not meant to be applied to the foundry 
industry because we got to the author at EPA and he said it was 
never meant to be applied. So we spent time chasing our tails 
on a rule that was never meant to be applied to us, spent money 
with attorneys, spent money working together as an industry, 
and it is for something that will never gain any environmental 
benefit, nor was it meant to be applied to us.
    Thank you for your time.
    [Prepared statement of Mr. Lenahan follows:]



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    Mr. Mica. Thank you for your testimony.
    We will now turn to Mr. Kligman. He is the President of 
Superb Custom Homes.
    Welcome, and you are recognized, sir.

                  STATEMENT OF RICHARD KLIGMAN

    Mr. Kligman. Thank you, Chairman Mica and Congressman 
Bentivolio. On behalf of more than 140,000 members of the 
National Association of Home Builders, my name is Richard 
Kligman, and I am a builder from Plymouth, Michigan and serve 
as President of Superb Custom Homes.
    Housing services are a great example of an industry that 
would benefit from smarter and more sensible regulation. 
According to a study concluded by the NAHB, government 
regulations account for 25 percent of the price of a single-
family home. NAHB economists recently performed an analysis 
looking at the number of households in Michigan that would no 
longer qualify for a mortgage due to compliance with the latest 
building codes. New building codes would increase the 
incremental construction cost for a typical residence by 
$2,532. The base price of a typical new one-story home in 
Michigan is $121,040. Two-thousand-five-hundred-and-thirty-two 
dollars may not seem like a lot in the big picture, but the 
study indicates that 31,106 Michigan households would be priced 
out and denied the opportunity of home ownership.
    I believe this example illustrates just how impactful over-
regulation can be, as many of the regulations being discussed 
will be significantly more costly to implement than $2,500. The 
bottom line is unnecessary regulatory costs hurt real people 
right here in Michigan. I would like to highlight a few of 
those regulations that are of concern.
    ``Waters of the United States'' proposed rule. The 
Environmental Protection Agency and the U.S. Army Corps of 
Engineers recently proposed a rule redefining the scope of 
waters protected under the Clean Water Act. The proposed rule 
falls well short of providing the clarity and certainty our 
industry seeks. This rule will increase Federal regulatory 
power over private property and will lead to increased 
litigation, permitting requirements, and lengthy delays for any 
business trying to comply.
    These changes will not improve water quality, as much of 
the rule improperly encompasses water features that are already 
regulated at the state level. The proposed rule establishes 
broader definitions of existing regulatory categories such as 
tributaries, and regulates new areas that are not 
jurisdictional under current regulations. For any small 
business trying to comply with the law, the last thing it needs 
is a set of new, vague, and convoluted definitions that only 
provide another layer of uncertainty.
    OSHA crystalline silica rulemaking. OSHA's proposed rule to 
control crystalline silica is the most far-reaching regulatory 
initiative ever proposed for the construction industry. 
Crystalline silica is a basic component of soil, sand, and 
granite, and is found in numerous building materials.
    OSHA is proposing an 80 percent reduction in the 
permissible exposure limit, PEL, for respirable silica dust. 
OSHA has not explained how a drastically lower PEL will 
effectively reduce the number of silica-related illnesses and 
deaths.
    NAHB believes OSHA should withdraw the proposed silica 
regulation until it can demonstrate that the proposal is 
technologically justified, economically feasible, and that it 
can be applied and understood in the real world of residential 
construction. OSHA's proposal describes control methods that 
will ultimately cost the industry $3 billion annually.
    Federal involvement in local building energy codes. 
Building energy codes such as the International Energy 
Conservation Code, IECC, are used across the country to 
establish minimum standards for building energy efficiency. The 
codes are developed by private entities but then adopted by 
state and local governments. The Department of Energy 
participates in this process. While they do not develop the 
codes themselves, they are authorized to provide technical 
assistance.
    NAHB has serious concerns that this has been broadly 
interpreted to allow DOE to advocate for or against certain 
proposals. Homebuyers are willing to pay more for lower utility 
costs, but according to our data, buyers need a 14 percent 
return on investment, which corresponds to a seven-year 
payback. The 2012 version of the IECC has such significant cost 
increases it would take the average family 13.3 years just to 
break even on required mandates. For half of the State of 
Michigan, the payback period is actually 16.1 years.
    Some companies and advocacy groups are now pushing Michigan 
to adopt this onerous and expensive code because it benefits 
their business, treating certain products favorably. The Home 
Builders Association of Michigan is trying to find a reasonable 
solution.
    OSHA's fall protection standard. OSHA changed its 
residential construction fall protection regulation. OSHA 
rescinded its interim fall protection guidelines, which set out 
a temporary policy that allowed employers engaged in certain 
residential construction activities to use alternative 
procedures instead of conventional fall protection such as 
guardrail systems, safety net systems, and personal fall arrest 
systems for any work that is conducted six feet or more above 
lower levels.
    OSHA has not provided specific guidance regarding how it 
will interpret this standard or how builders are expected to 
comply in determining when the use of conventional fall 
protection is considered infeasible or its use creates a 
greater hazard. Builders have little assurance that their 
actions will meet OSHA's requirements and could be saddled with 
costly fines or citations even though they are making good-
faith efforts to comply.
    OSHA's fall protection regulation should be reviewed under 
Executive Order 13563, Improving Regulation and Regulatory 
Review, to help make it more effective and less burdensome for 
small businesses, exactly as envisioned by the President.
    In conclusion, I appreciate the opportunity to share the 
thoughts of my trade association, the National Association of 
Home Builders, on Federal regulations impacting small 
businesses and job creation in Michigan. NAHB is not against 
appropriate, balanced regulation. Our members understand that 
regulation is needed--for example, to protect the nation's 
water supply and limit a child's exposure to lead paint.
    Regulations that are workable and sensible, where the rules 
are easily understood and applied, could be the type generally 
supported by our industry. Unfortunately, our industry is 
participating in several rulemaking processes, some of which I 
have highlighted, where agencies avoid well-established 
policies of the Administration Procedures Act and neglect the 
safeguards of the Regulatory Flexibility Act in the interest of 
promulgating rules for self-serving political gain.
    Thank you.
    [Prepared statement of Mr. Kligman follows:]



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    Mr. Mica. Well, I thank you, and I thank all of our 
witnesses. Interesting testimony.
    It was interesting to start with Mr. Fisher, and he talked 
about Executive Order 13502, and we just ended up with Mr. 
Kligman, who was talking about Executive Order 13563, 61 
executive orders in-between we didn't even get to hear about.
    Interesting testimony today, and some tough consequences 
proposed by some of these regulations.
    What I thought I would do is I am going to go through some 
of the testimony that was provided by each of you, a few 
questions.
    First, Mr. Fisher, the project labor agreement provision 
that you talked about, you said that Michigan had eliminated 
that. When did Michigan eliminate that?
    Mr. Fisher. Michigan, Mr. Chair, eliminated the ability to 
have a government-mandated PLA in 2011 with the Fair and Open 
Competition Act. What it simply states is that all workers, 
union and non-union alike, that you can't be discriminating 
against based on your decision to affiliate or not affiliate 
with a labor union, and it meant that all workers have the 
opportunity to access work opportunities on public construction 
projects.
    Before, you would have a special-interest-driven mandate 
that would state that only a contractor that is signatory to a 
PLA, which is a form of a collective bargaining agreement, 
would be able to perform that work.
    Mr. Mica. Now, is that only on state projects?
    Mr. Fisher. It would be state, local ----
    Mr. Mica. Because you are still subject to the Federal 
edict.
    Mr. Fisher. But unfortunately, we can't get out from under 
the Federal edict, and that is the problem.
    Mr. Mica. Right.
    Mr. Fisher. Is this Federal regulation ----
    Mr. Mica. So one solution might be, where a state does 
allow by state law the elimination of the project labor 
agreement requirement, that they be allowed to proceed with 
implementation of the Federal. Would that be a possible 
solution?
    Mr. Fisher. That would be a possible solution. However, 
here in Wayne County, in the county to the north, Macomb 
County, where there is the Selfridge Air Force Base, for 
example, if there is a Federal contract there, that is 
completely under the jurisdiction of the Federal Government, or 
an interstate highway that is under the jurisdiction of the 
Federal Government, the Federal Government can still 
discriminate against workers and businesses in a local area 
based on labor affiliation.
    So we also think that the Federal Government should, in 
fact, enact a fair and open competition law to, again, protect 
taxpayers and workers so that everybody could have an equal 
opportunity to pursue work in their communities.
    Mr. Mica. You said the disparity could be 10 to 20 percent. 
Do you have any anecdotal information as to the effect of 
Michigan's provision?
    Mr. Fisher. I do, in fact. I think one great example is in 
the shadow of the state capital in Michigan, in Lansing, a new 
city market was built subject to a PLA. It wasn't necessarily 
an expensive city market project. I think from start to finish 
it was about $3 million. It was let out to bid under a project 
labor agreement, and the result was that the project came in 
entirely out of budget, to the tune of, I believe, 25 percent 
over budget, and the city market wasn't able to be built until 
they re-bid the entire project, opened up the bidding process, 
allowed everybody to participate, and then once you had the 
benefits of fair and open competition, and only then, was the 
project able to be on budget and finally get completed.
    Mr. Mica. Aside from the labor issue that you mentioned, 
you talked a bit about OSHA, and we have heard some others 
refer to OSHA and their overreach. How can we ensure protection 
of workers without some of the Federal interference through 
OSHA? You said you have what sounded like a fairly good 
relationship and cited some of it as a model. How does that 
work? Are you just getting volunteer cooperation with OSHA, or 
is this something that can be a template for others to adopt? I 
have never heard of this before. Maybe you can explain it 
better.
    Mr. Fisher. Yes, I would be happy to, Mr. Chair. Michigan, 
under OSHA, is what is called a delegated state, and OSHA does 
have a provision that allows a state to handle the health and 
safety functions of OSHA, to administer it under the belief 
that government that is closest to home can govern best, that 
federally we don't need to necessarily be as hands-on if a 
state is able to, as long as they comport with all of OSHA 
requirements. Michigan is one of the states that is able to do 
that.
    Mr. Mica. So is the state enforcing the OSHA requirements?
    Mr. Fisher. Correct.
    Mr. Mica. Okay.
    Mr. Fisher. So what we have been able to do by having a 
partnership that is closer to home, closer to the Michigan-
based construction industry, is form alliances. We are right 
now in the process of forming an ABC and OSHA alliance, and it 
is geared towards that key, core role of OSHA, which is to 
promote worker health and safety and use a fact-based approach 
to methods that actually work.
    Mr. Mica. Is this done just by an agreement with the state 
and OSHA?
    Mr. Fisher. Yes.
    Mr. Mica. Okay. I am not that aware. Everyone thinks all 
the members of Congress know all the programs, but this 
delegation authority is under law. Is it just certain 
designated states by law, or can any state ----
    Mr. Fisher. A state applies to Federal OSHA and is able to 
do so, and Michigan ----
    Mr. Mica. Okay. And do you know how many states participate 
on this basis?
    Mr. Fisher. I would be happy to get that to you. I don't 
know.
    Mr. Mica. Okay. I think that would be interesting. Maybe 
the staff could add that in the record.
    Mr. Mica. But that is an interesting concept. I don't see 
why it couldn't be further applied. If Michigan can do it, 
certainly it could be a model for other states. I don't know 
how many others do that, devolving to the states some of this 
responsibility. A lot of what we do at the Federal level is 
duplicative, not only in enforcement and regulation but a whole 
host of areas, permitting, where we could be much more 
efficient.
    But thank you for bringing that to light and to the 
committee. We can look at that, too, and maybe consider 
expanding some of those provisions in future law.
    Okay, Ms. Kaboth. You produce those bricks that we walk on?
    Ms. Kaboth. I do. Not alone, though. But, yes, we do.
    Mr. Mica. That is interesting. You talked about, again, 
some of the regulations, the cost to you would be $6 million, 
with no apparent benefit. What would happen if they force you 
to do this?
    Ms. Kaboth. Well, we would have to close.
    Mr. Mica. How many people do you employ?
    Ms. Kaboth. We employ 80 people.
    Mr. Mica. Eighty people? And you have been in business it 
sounds like a long time?
    Ms. Kaboth. Yes, since 1916. We are getting ready for our 
100th anniversary.
    Mr. Mica. That is great.
    Ms. Kaboth. Most brick companies are like us. It is not an 
industry that most people want to join because the capital 
costs are very great, the return is really not wonderful. Most 
of the companies are long-time family-owned businesses like 
ours.
    Mr. Mica. Is there a lot of competition in the industry?
    Ms. Kaboth. There is. However, that is why we specialize in 
the niche markets. That is the only reason why we are even 
still here. We don't have the resources to compete with the big 
companies, so we stick with the paving brick, the fire brick 
for fireplaces, a place where we have been able to thrive. We 
do a lot of custom work.
    Mr. Mica. Now, will that just narrow the competition by you 
going out of business, or is there foreign competition? Are 
there other sources for ----
    Ms. Kaboth. There is no foreign competition, really. Brick 
is too heavy to import. The costs would be much too high for 
the freight. If we would be gone, it would reduce the choices 
for a lot of places. We are a very high-end, customized 
product, and we supply a lot of universities and colleges. So 
they would just have to find someone potentially who could do 
what we do, and there aren't many left.
    Mr. Mica. And the silica rule you talked about was the same 
one that everyone is talking about?
    Ms. Kaboth. Yes.
    Mr. Mica. There is nothing different, it's just the 
difference in the impact on each of you, and particularly 
devastating to your operations.
    Ms. Kaboth. Well, and it is not just for the cost. I have 
been with Whitacre Greer for 35 years, and we have never had 
one person be ill from silica. I mean, that is part of our 
industry statement, that we have studies for over 75 years that 
our employees just don't get silicosis. So it is ridiculous to 
have a rule that is just so expensive that isn't going to help 
anybody.
    Mr. Mica. Have you employed other means of protection of 
the workers?
    Ms. Kaboth. We do. We have a number of things we do to 
reduce the dust overall in our facilities, and most facilities 
are very good at that. But to get to the level that OSHA is 
requesting is, to be honest, almost impossible, even with the 
engineering controls and everything else they want you to do.
    Mr. Mica. Mr. Lenahan, was it you who testified about the 
amount that is allowed in a space laboratory, I guess it was?
    Mr. Lenahan. Yes. Actually, the standard is cleaner than 
the NASA clean room, which is a reference point I think we all 
think of, a clean room and how clean that environment would be. 
And to have an industrial plant that handles tens of thousands 
of tons of material ----
    Mr. Mica. When these rules come out and you have an 
opportunity to be heard on them, do you feel that is adequate? 
Are they listening? Has there been opportunity, do you think, 
to be heard?
    Mr. Lenahan. I can answer that if no one wants to step in.
    Mr. Mica. Go ahead.
    Mr. Lenahan. The second rule that I mentioned there was 
Subpart UUU, which was an A rule. It was never meant to be 
applied to the foundry industry. We were not given an 
opportunity to provide information on the rule because ----
    Mr. Mica. Even though you were impacted, were you noticed?
    Mr. Lenahan. No.
    Mr. Mica. You were not?
    Mr. Lenahan. No.
    Mr. Mica. Okay.
    Mr. Lenahan. And that was one of the dilemmas. We wound up 
going back to EPA. We said we were never--this was never meant 
to apply to us and we never had an opportunity during comment 
period, never were identified, and then when we got to the 
author of the rule he said, no, you guys never should have been 
included in this rule. This was for industrial sand production, 
not for foundries.
    Mr. Mica. And you are not currently under that mandate, or 
are you?
    Mr. Lenahan. We are. It is actually one of those things --
--
    Mr. Mica. Even though they said that you weren't noticed 
and it wasn't intended to apply, they have made no exception?
    Mr. Lenahan. That is correct. The right hand a lot of times 
does not know what the left hand is doing.
    Mr. Mica. Sounds typical in Washington.
    Mr. Lenahan. And the enforcement arm of EPA--I want to be 
delicate in how I say this, but I don't think they are really 
concerned about that sometimes. We have an ability or a 
capability to enforce on this whether it was meant to apply to 
you or not and, doggone it, we might just do that.
    Mr. Mica. Now, had you written your members of Congress on 
this issue? You have?
    Mr. Lenahan. Yes.
    Mr. Mica. And the senators, too?
    Mr. Lenahan. Yes, and I go typically to Washington, D.C. at 
least once a year as part of a contingent from the metal 
casting industry, and this was a Hill issue last year at our 
government affairs conference.
    Mr. Mica. And how does that affect you in competition or 
price or whatever? What is the impact?
    Mr. Lenahan. Unlike my colleague to the right, we are 
impacted heavily by offshore competition. Metal casting 
facilities since I entered the industry in 1987, there were 
5,000 domestic foundries, and now there are about 1,900. The 
reason for most of that is because regulations have pushed the 
foundries outside of the U.S.
    Mr. Mica. And, of course, all of them are complying with 
these high standards when they manufacture or produce foundry 
activities outside the United States?
    Mr. Lenahan. Absolutely ----
    Mr. Mica. Are products coming in very well manufactured and 
adhered to with the highest standards?
    Mr. Lenahan. We don't see that, and I will give you one 
real quick example. A friend of mine was grilling in his 
backyard and dropped a cast iron piece of his grill and it 
broke on the ground, and we knew that the grill parts came from 
China. He is a metallurgist, and he knew immediately what the 
problem was. He took the grill sample in to the spectrometer at 
the foundry, shot it, and found there was 40 times the amount 
of arsenic in that cast iron grill than there was in the 
domestic castings we were making onshore. So we see things like 
cast iron skillets that are made offshore, as compared to lodge 
manufacturing ----
    Mr. Mica. So we have no control over those products that 
are coming in.
    Mr. Lenahan. There are no controls.
    Mr. Mica. What is the biggest competition? Is it China?
    Mr. Lenahan. China is probably still the largest 
competition. Probably what concerns me more than anything on 
that is that we make a lot of military parts, and we can't be 
dependent upon a country that may or may not be friendly at the 
moment to manufacture some of those parts.
    Mr. Mica. Foreign source.
    Mr. Lenahan. One of my customers made all the engine blocks 
for the landing craft that landed on the beaches in Normandy. 
If we didn't have those guys back during World War II, we might 
all be speaking German right now.
    Mr. Mica. So 1,900 left out of over 5,000?
    Mr. Lenahan. That is just in ----
    Mr. Mica. Probably the employment would be pretty 
significant. Maybe we lost 30,000, 50,000 jobs?
    Mr. Lenahan. I would say closer to 350,000 jobs.
    Mr. Mica. Oh, wow. So a very significant impact. It seems 
like there should be some way we could require certification of 
some of those products that were produced under the same 
standards. We are just talking now about certain and limited 
standards. If we got into some of the labor requirements and 
other regulatory regimes that we impose, we probably couldn't 
import much of anything from those countries. Would you say?
    Mr. Lenahan. I think the biggest thing that our folks tell 
us is we want predictability in what we can expect down the 
line. We don't have any problem competing on a level playing 
field.
    Mr. Mica. But it is not level.
    Mr. Lenahan. It is not level. When currency is under-valued 
by 40 percent, they are pegging their currency to our currency, 
we know it is not level. When we see castings coming into the 
United States that are cheaper than what the raw materials 
cost, we know it is not level. We know there is supplementing 
going on there.
    Mr. Mica. So you have gone from 5,000 to 1,900 foundries. 
Are we continuing to see the decline, or do you think the worst 
is over?
    Mr. Lenahan. There is a little bit of stabilization, and I 
think one thing to remember is the guys who are running these 
businesses now, they are the cream of the crop. They are 
bright, smart, solid business people. They have had to be to 
survive. The next round of attrition will come with the new 
silica rule. There will be people who will pack up their tents. 
They are small businesses. They are going to say ``I can spend 
my money to fight something that is not going to work, or I can 
pack up my tent and protect my family.'' I think we will lose a 
bunch of businesses that way.
    Mr. Mica. Well, you point out the difficulty of surviving. 
I mean, we are here close to Detroit, and we have seen how 
competition in manufacturing has driven a lot of business 
overseas, almost caused the collapse of some of our businesses, 
particularly in the automotive industry over the years. But 
there are survivors, 1,900 in your business. I was very pleased 
to drive by the Ford operations on my way in and seeing that 
they are also surviving. But it is very tough, especially when 
you have the rules and regs stacked against you.
    Mr. Lenahan. If I could make one other brief comment?
    Mr. Mica. Yes.
    Mr. Lenahan. People assume that our industry is a dirty 
industry, heavy industry, and we are not. Our plant runs on 
renewable energy to actually clean the foundry sands, to 
repurpose them, and the foundries that we work with today, what 
is leaving their back door is being recycled at a rate of over 
90 percent. So anything that they are discarding is going out 
at 90, 95 percent. The best households in the United States 
with regard to recycling are 20, 25 percent. So I think that is 
something also to remember.
    These are jobs that are important. They are actually green 
jobs. A lot of the products that we are making are from 
recycled materials also. That washing machine you put on your 
front lawn to discard, that is being re-melted and repurposed 
into a casting.
    Mr. Mica. Very good.
    Mr. Kligman, you talked about the new avenue the 
Administration is taking to change the definition of Federal 
involvement in water and the definition of wetlands and its 
impact. That is kind of interesting because I chaired the 
Transportation Committee and served as the Republican leader 
for a number of years, always trying to keep this at bay. 
People don't understand the significance of unraveling the 
current definition, which only gives the Federal Government 
authority over navigable bodies of water. It would unravel all 
kinds of rulings, interpretations, and dramatically expand the 
involvement of the Federal Government, probably put a lot of 
your folks out of business.
    What are you all doing to weigh in on this with the 
Administration? The route they are taking now is the regulatory 
route, and we haven't been able to do anything in Congress. But 
what actions are you taking? I know you are testifying today.
    Mr. Kligman. Yes, sir, and I can have our staff provide you 
with ----
    Mr. Mica. Have you written in on the rule, the proposed 
rule?
    Mr. Kligman. I don't have specific knowledge on that. I do 
have Forcewall, who is our legislative affairs representative. 
If you are interested in ----
    Mr. Mica. I would like to know, and I would like to know if 
you have submitted either to the Secretary and to your 
representatives.
    The problem we have is there are so many new people in 
Congress, too, who don't understand the implications of this 
change. They have gone down the avenue of trying to change this 
legislatively, and it failed. Now they are coming in the back 
door through regulation.
    But the consequences are pretty dramatic. You get the 
Federal Government into this area, it is not just a question of 
them having a new regulatory regime and an expansion of it, but 
you are changing years and years of law, litigation, rulings, 
which would all unravel, and you would put all kinds of real 
estate at risk in the future.
    But I appreciate your being with us, but I think it is 
important that you and every state organization, and even 
individuals, weigh in on this, because you are going to get 
slammed pretty hard if this goes into effect.
    I think we have now carried probably 168 bills that are 
just sitting in the Senate. They won't move any of them, and 
some of them, when they pass these regulations, the only way to 
undo them--well, there are two ways. One is through the 
Congress passing a law. Well, we can pass all we want in the 
House, and they sit in the Senate and nothing happens.
    The second is through court, and they very cleverly--I 
don't know if you watched this. They packed the Federal 
District Court of Appeals in Washington. Part of the reason 
that we had this brouhaha in the Senate about going to 51 votes 
rather than 60 votes for approval of some of the appointments 
was directed at packing the District Court of Appeals. It had a 
4-4 sort of balanced approach of judges, and the Obama 
Administration, the President added three new judges there to 
pack the court. So if you can't pass a law to overturn the 
regulation, your recourse as an organization, an individual, 
even folks in Congress could go to court. But most regulations 
are promulgated from the Federal level in Washington, and your 
venue of recourse is the Federal District Court of Appeals. So 
once you pack that, which they have done, they have succeeded 
in negating the 60-vote rule. They have appointed the three 
judges. Now you have no other recourse because they cut off 
your judicial recourse.
    So we are reaching a pretty serious situation in trying to 
stem the tide of some of these rules. This one is particularly 
ominous for the future of real estate building, a whole host of 
areas that could be very dramatically impacted. So I would just 
encourage you, and if you do have something you could provide 
to the committee in what you have done, I would like to see a 
copy of that, because we can also use that, and hopefully you 
are contacting your senators, too.
    Mr. Kligman. Sir, if I may?
    Mr. Mica. Yes.
    Mr. Kligman. On your point, on a practical basis as well, 
if you had a ditch, for example, that filled up with spring 
rains here in Michigan for a month or two months a year, that 
could be categorized as a tributary.
    Mr. Mica. Well, I have heard everything--a puddle in the 
backyard, pools.
    Mr. Kligman. Right. And then the permitting involved, and 
the time and exposure, it is not manageable.
    Mr. Mica. Well, again, it is the responsibility of Congress 
to try to change the law, but the votes aren't there right now. 
Again, we don't have recourse through the courts.
    You talked about the impact of $2,500 per home and actually 
pricing 3,100 people in Michigan out of that. Can you elaborate 
a little bit more?
    Mr. Kligman. Well, we can provide the study for your 
review. But as costs are impacted nationwide, but particularly 
here in Michigan where we had such a prolonged downturn in the 
economy and it was devastating to the housing industry as well, 
the consumers are still very sensitive to cost. We, as a small 
volume builder, I still feel tremendous downward pressure on 
pricing from the consumers. And as we have costs going up, the 
question is who is willing to absorb them. If the consumer is 
not, then it either prices them out of the home or as a 
business person I have to make a choice of saying, okay, I am 
going to absorb that cost. But if I don't have margins and my 
risk goes up, I can hire fewer people, create less job 
opportunities. So there is a direct correlation with cost and 
affordability, opportunities for people and job creation.
    Mr. Mica. If you could provide us a little bit more detail 
----
    Mr. Kligman. Certainly.
    Mr. Mica.--for the record on the basis of your estimates 
there.
    Then finally, I think you talked about the OSHA Fall 
Protection Rule 13563. Now, has that gone into effect?
    Mr. Kligman. The standard is now being in effect. Yes, sir.
    Mr. Mica. And that is anything over 6 foot?
    Mr. Kligman. Six foot from the lower level. And where it 
becomes impractical, I can give you just a couple of quick 
examples. If you had a low-pitched garage roof, your personal 
fall protection system requires you to tie off over your head. 
You can be standing at the edge of the roof and not have 
anything over your head with a low-pitched roof. So the code 
would require that you build a guardrail around the perimeter, 
and the cost and time involved to do that would be greater and 
more expensive than the tear-off for the roof. So again, the 
consumer is negatively impacted with that.
    Mr. Mica. Well-intended idea, but from a practical 
implementation ----
    Mr. Kligman. But on a practical level ----
    Mr. Mica.--it is costly.
    Mr. Kligman. Yes, sir.
    Mr. Mica. It is not that effective.
    Mr. Kligman. Yes. And trusses, as well. You know, you need 
a tie-off point. OSHA is suggesting that you assemble all the 
trusses on the ground and get a large crane to carry it up, and 
that is not typical on residential construction. I have a 40-
foot-wide lot I am building a house on right now. I don't have 
physical room to assemble trusses on the ground. And even if I 
could get the crane and the client was willing to pay for that 
extra fee. So there are times when it is just not practical.
    Mr. Mica. All right. I appreciate your testimony.
    I want to yield now to Mr. Bentivolio.
    Mr. Bentivolio. Thank you very much, Mr. Chairman.
    Mr. Kligman, I want to clarify. If you order trusses--I am 
pitching this. I used to be in the home-building business. So 
you have trusses. The crew will lift them up, or you will have 
a crane lift one at a time. You will set them in place. You 
will put stringers to hold them in place and straighten them 
horizontal; correct?
    Mr. Kligman. Correct.
    Mr. Bentivolio. Twenty-four inches on center, 18 inches on 
center, something like that. So right now, though, you are 
telling me, if I understand this correctly, you have to lift up 
all those trusses to ----
    Mr. Kligman. To comply, they are requiring a tie-off point, 
and you don't have that to start. So they are saying assemble 
it down and bring it all up in one ----
    Mr. Bentivolio. You get pre-made trusses, right?
    Mr. Kligman. Correct, and there is conventional frame as 
well. But for a pre-made example, correct.
    Mr. Bentivolio. Okay. So the pre-made trusses are already 
assembled. You put them up one at a time?
    Mr. Kligman. Correct. But even to start and to be working 
up there, you are not able to meet the requirements at that 
point. So it is kind of a chicken-and-egg kind of scenario. So 
with strict conformance, even despite trying to make best 
efforts, there is risk that you are not conforming, and some of 
their solutions or proposed solutions aren't practical for our 
industry and are very cost prohibitive.
    Mr. Bentivolio. So what would you do in conventional 
framing? You put the ridge board up and then you ----
    Mr. Kligman. Really, again, it comes back to a challenge of 
compliance at inception, at commencement, and it becomes very 
difficult to comply under certain circumstances.
    And again, the association and my company as well, we are 
all in favor of safety, and it is important, and our trades 
feel the same. However, we are trying to be practical in that 
approach as well.
    Mr. Bentivolio. Mr. Lenahan, correct?
    Mr. Lenahan. Yes.
    Mr. Bentivolio. You said there were 5,000 foundries in the 
United States, and we have quite a few small foundries here in 
Michigan, especially in the 11th Congressional District and on 
Haggerty Road. There are a couple of companies that have a 
small foundry for making prototypes; correct?
    Mr. Lenahan. I am not familiar with that particular 
operation. But the 5,000 number is what there were domestically 
in 1987. Now there are about 1,900.
    Mr. Bentivolio. And what concerns me is a personal 
experience. A military vehicle, an N-270 rocket launcher 
transmission was manufactured in a foreign country, and they 
delivered the transmissions to be installed in these vehicles, 
and then after I think it was less than 25 miles in travel time 
the transmission failed, and we knew it was going to fail 
before they replaced them. They said it was made from cheap 
steel.
    What is the difference between--I don't understand. What is 
cheap steel versus American-made, Michigan-type steel?
    Mr. Lenahan. If you picture any kind of molten metal, it is 
made with speck, almost like a cake mix. So there are certain 
elements in the metal that add strength. I have seen other 
examples where brake rotors, for example ----
    Mr. Bentivolio. Brake ----
    Mr. Lenahan. Brake rotors on your car that keeps your car 
from stopping, when those are not made to a certain 
specification, if they are made from the wrong flavor, for 
example, of iron or steel, whatever, but in the brake rotors 
case iron, the brake, due to the coefficient of friction, will 
not stop, and we have seen brake rotors that have come over 
that have been counterfeited with a company name in Wisconsin 
that would not actually stop a vehicle. So we see problems like 
that as well. That is not something that has been seen just 
once.
    Mr. Bentivolio. And those foundries, those small foundries 
that make prototypes and some of our parts, actually are 
encased--that heating thing is encased with a fire brick that 
your company makes. Is that right?
    Ms. Kaboth. We used to, yes.
    Mr. Bentivolio. I am trying to look at this from a national 
defense point of view, because this used to be the arsenal of 
democracy. Welcome to Michigan. This used to be, and it really 
concerns me. We have lost a lot of machinists in the last 10 
years because of the recession. We are not training people for 
these very important jobs, because once you make a casting and 
the sand comes out and you re-use that sand--is that correct?
    Mr. Lenahan. Correct.
    Mr. Bentivolio. Okay. But once the casting is made, you 
then send it to a machinist.
    Mr. Lenahan. Usually, yes.
    Mr. Bentivolio. And he has specific requirements and 
specifications he has to machine that down, and we are losing 
those, too. So we are actually not only losing, because of 
these regulations that are forcing businesses out of business--
our national defense becomes at risk, right?
    Mr. Lenahan. That is correct.
    Mr. Bentivolio. Very good.
    Mr. Lenahan. And those are not businesses that you can just 
start up in 30 or 60 days.
    Mr. Bentivolio. Right. It is a lot of money to invest in a 
foundry.
    Mr. Lenahan. Not to mention permitting.
    Mr. Bentivolio. Not to mention ----
    Mr. Lenahan. Permitting, back to regulations again.
    Mr. Bentivolio. The uncertainty associated with Obamacare 
is a concern for many people across the country. What are you 
hearing from your employees and members of your business 
community?
    Can we start one at a time?
    Mr. Fisher, would you like to begin?
    Mr. Fisher. I would be more than happy to, Congressman. The 
Affordable Care Act, Obamacare, has been a detriment. In our 
industry, we are in the process of conducting a statewide 
survey on that very issue. And, in fact, most of our member 
companies have responded that it is having a negative effect 
not only on their companies, but I think it is important to 
remember that there is a trickle-down effect, if you will.
    So in the construction industry, we build for clients, and 
when asked has Obamacare affected your clients, nearly 100 
percent of our membership have responded yes, it is affecting 
their client base. So that, therefore, by affecting their 
client base, it means that those companies are maybe not able 
to expand as they would like. But it also means that our 
companies in the construction industry are likewise not able to 
access some work opportunities, and it is all because, again, 
of Federal regulations.
    So we are seeing it, and I think it is important to 
remember that it affects more than just what is on the surface 
and that there is this domino effect as well from Obamacare, as 
well as any other regulation that it has.
    Mr. Bentivolio. Ms. Kaboth?
    Ms. Kaboth. So far, we have not had a direct result or a 
direct impact from Obamacare. However, I expect one in a few 
years in the price of our medical insurance. We provide very 
good insurance for all of our employees. We pay 90 percent, 
they pay 10 percent, and our rates so far have not gone up. 
However, I don't believe that the mandate has been in effect 
long enough for it to really affect our rates. Now, in the next 
two to three years, I expect our rates to go up dramatically, 
and that will seriously impact our operating costs, but how 
much is anybody's guess at this point.
    Mr. Bentivolio. Uncertainty again.
    Ms. Kaboth. Yes.
    Mr. Bentivolio. Mr. Lenahan?
    Mr. Lenahan. Over the last four years, the cost to cover an 
employee and his family or her family, $800 per month to $1,777 
per month, and that is with the reduction on the co-pay for 
pharmacy, from $20 to $40 per prescription. So, a substantial 
increase, and that impacts our ability to hire people.
    Mr. Kligman. And personally as a small-volume company, we 
subcontract the majority of our work. So I don't have as 
profound an effect personally. However, speaking with some of 
our suppliers and subcontractors that have direct employees, we 
are seeing similar feedback to what people have testified to, 
that either they are increasing their deductible amount, which 
is a burden on the employee, or they are taking additional 
costs on the prescription side.
    Mr. Bentivolio. Can we talk a little bit about the 
uncertainty? A lot of people don't seem to understand it. When 
I talk to my constituents, they may be employed, but for a 
business owner, we often are asked to provide a business plan, 
and those business plans require forecasting for the next three 
years, right? Am I correct? In a business plan. So how does 
that uncertainty affect your business plan for the next three 
years when it comes to these regulations, as well as some of 
the additional burdens placed on businesses, both small and 
large? That uncertainty, how does that really affect you? Can 
you talk a little bit about that, that uncertainty?
    Mr. Kligman. Mine personally, I look at our positioning of 
land acquisition, commencement of inventory homes if we don't 
have a custom buyer at that time, and without a clear path 
looking forward, or at least some sense of improvement and 
continuity and not restrictive burdens and greater impact to 
cost, it is difficult to make those investments. It is a high-
risk, highly leveraged business, and high exposure, and without 
the ability to comfortably forecast returns and to make hiring 
decisions, to generate job opportunities for all of the 
suppliers and subcontractors that impact housing, uncertainty 
is a huge weight.
    Mr. Bentivolio. Do you build spec homes primarily?
    Mr. Kligman. We do.
    Mr. Bentivolio. So you build them in a subdivision? You 
build maybe two or three models?
    Mr. Kligman. That was prior to the downturn when we were 
more geared as a subdivision builder. We would buy large groups 
of lots, put up a model and several inventory. We have gone 
through our inventory in the subdivisions. We are now kind of 
acquiring vacant land or tear-downs on an as-come basis because 
our market was so devastated there weren't new developments 
being put in, and as we kind of bled out the existing 
inventory, now we are in a little bit of a holding pattern 
which, again, negatively impacts the current supply-demand 
curve.
    Mr. Bentivolio. And you build for a specific price point, 
right?
    Mr. Kligman. A range, but yes. It tends to be more the 
upper end for our company personally.
    Mr. Bentivolio. And if I understood you correctly, you said 
$2,500 for ----
    Mr. Kligman. For a $121,000 home.
    Mr. Bentivolio. It adds $2,500, which is quite a bit of a 
down-payment to somebody.
    Mr. Kligman. It is.
    Mr. Bentivolio. Very good.
    Mr. Fisher, you mentioned the NLRB's ambush election rule. 
Are you aware of any other instance where a Federal regulation 
requires a company to provide private information about 
employees to a separate private organization?
    Mr. Fisher. No, and I thank you, Mr. Chair, for bringing 
that up. For brevity's sake, I didn't highlight that aspect. 
Indeed, this requires--the NLRB is requiring employers to hand 
over personal information about their workforce and their 
workers. This includes emails, other type of contact 
information, and it doesn't necessarily have to be a company 
email, even a private email. And one has to question why is 
this even being promoted.
    Well, it is clear that the Federal Government is doing this 
because there are entities out there that want employee 
information for any number of purposes, in this case probably 
to try to contact those employees to try to encourage them to 
make a decision one way or the other when it comes to labor 
organizing. It is very rare. It is unprecedented.
    I would also add that not only are they doing this, the 
Federal Government or the NLRB has yet to even provide a 
justification as to why this proposed rule is being proposed, 
which brings up significant concerns about proper promulgation 
of any rule at the Federal level.
    Mr. Bentivolio. So if I understand this, you just said that 
the Federal Government is requiring you to turn over private 
emails, employee information; correct?
    Mr. Fisher. Yes, sir.
    Mr. Bentivolio. We can't get that from them on some other 
things.
    Mr. Fisher. Without a justification as to why it is being 
proposed.
    Mr. Bentivolio. Say that again?
    Mr. Fisher. Without providing a justification as to why 
this proposal even exists in the first place.
    Mr. Bentivolio. It seems to be a problem. The government 
can get from us all the information about our lives, but we 
can't get simple emails on other issues that this committee is 
dealing with.
    Can we talk about what role do acquisition land development 
and home construction loans have on the home-building industry? 
Can you elaborate a little more on that, Mr. Kligman?
    Mr. Kligman. Absolutely. So, from a personal example, our 
company used to have a revolving line of credit with several 
different lending institutions, and as we either financed for 
our buyers or built inventory homes, we would cycle through and 
create productivity.
    That has effectively gone away. That leaves the option of 
either if you have the ability to finance out-of-pocket to 
produce and create jobs and work and opportunity, great, but 
the majority of the builders don't, and therefore they are 
forced to either be forced out of the game or look at 
alternative lending solutions, private investors, and 
effectively you are paying premiums, higher points, higher 
interest rates, and effectively acquiring a partner in the 
project where margins are already compressed, and it creates 
greater challenge and high risk.
    Mr. Bentivolio. I remember some time ago in that business 
actually teaching school. We had asked my students to go out 
and do some research on all the various departments that a 
builder has to associate with or come in contact with before 
they even begin building a home. You might help me out here. 
Not only do you have to secure a building permit, you have to 
get a land use permit; correct?
    Mr. Kligman. That is correct.
    Mr. Bentivolio. In some communities, they want to know the 
R factor for windows.
    Mr. Kligman. Energy calculations, soil erosion permitting. 
Yes, there is quite a variety.
    Mr. Bentivolio. Okay. So if you put a 2-by-4 exterior wall, 
you put four inches of insulation, the R value is 11 I think?
    Mr. Kligman. Correct.
    Mr. Bentivolio. It is 11. And that has been like that for 
how long?
    Mr. Kligman. I am a third-generation builder, so as long as 
I have been involved.
    Mr. Bentivolio. As long as I remember, too. If you go 2-by-
6, it is R19?
    Mr. Kligman. You can increase the R value depending on 
that.
    Mr. Bentivolio. So here we have something we have been 
doing traditionally, or builders have been doing traditionally 
for three generations of builders, and the government now wants 
you to fill out a form, and they are a couple of pages long, if 
I am not mistaken.
    Mr. Kligman. They are, and they have limited the options of 
creating the same net result by using alternative methods, 
increasing the efficiency of your furnaces if the window R 
value--so different efficiency products that you can 
effectively choose. There are companies that are trying to 
legislate their products into the industry and force change so 
that it benefits their company, which again creates a burden on 
the consumer and forces people out of housing opportunities.
    Mr. Bentivolio. And also, the homebuyer could buy a less 
expensive home if they didn't have to buy all this energy 
efficient ----
    Mr. Kligman. Correct.
    Mr. Bentivolio. And over a period of time if they want to 
improve the efficiency of their home, and as their finances 
permit, they can improve their situation; correct?
    Mr. Kligman. Correct. And with the current code having a 
13-year payback, that is quite a bit longer than the average 
consumer is going to stay in their home and ever see the value 
of that.
    Mr. Bentivolio. And can you talk about some of the other 
paperwork? I know it was about this thick a pile, and a lot of 
different agencies, right?
    Mr. Kligman. Yes. And the different municipalities will 
have subcontracted out to agencies just to manage that, which 
again drives up permitting costs. Mr. Lenahan had communicated 
earlier sometimes the left hand doesn't talk to the right hand. 
In government we see that in our governmental agencies just to 
process a permit where there is no accountability for 
coordination of the different agencies that are managing that 
process. The length of time to process is extended, which 
impacts cost and increases uncertainty as well.
    Mr. Bentivolio. Very good.
    Mr. Chairman, do you have more questions?
    Mr. Mica. Thank you.
    Let me go to Mr. Kligman again. The lead renovation repair 
painting rule, EPA has issued a requirement on a certified EPA 
renovator and that work must be conducted by an EPA-certified 
firm. Now, that probably is well intended, and any renovations 
to a house built before 1978 must comply.
    I am told that the practical implications are quite 
different because the biggest percentage of folks are not using 
qualified individuals. What is happening as a result of that 
rule from your experience? Could you tell us?
    Mr. Kligman. Sure, and that is a great question. So the 
majority of the homes constructed before 1978, over 38 million, 
88 percent of those homes do not have the targeted at-risk 
group that this rule was written for, which is pregnant women 
with children under 6. So the purpose of that rule is to 
protect that group. The majority of the homes prior to that 
time do not have that, and EPA removed the opt-out ability for 
a homeowner to say I am not in this target group, I don't feel 
I am at undue risk, and I choose to forego the expense and cost 
associated with going through this process.
    What effectively happens is if I provide a proposal and I 
am following the regulations, there is a cost impact to that 
that is significant, not only in dollars but in time as well to 
manage that, and there were people that aren't as committed to 
that, or the homeowners will choose to pull their own permits 
and try and do it themselves and circumvent the regulation, or 
they will pull their own permit and try to bring in a 
contractor on the back end and it penalizes the companies that 
are trying to accommodate a rule that doesn't really add value 
to the consumer.
    Mr. Mica. I have some information that a survey conducted 
by the National Association of Remodeling Industry shows that 
77 percent of the homeowners are avoiding the rule by either 
doing the work on their own or hiring non-certified contractor 
fly-by-night operators or underground contractors. So that is 
pretty much the case?
    Mr. Kligman. I believe it is.
    Mr. Mica. The practical effects of some of these rules and 
regulations don't have the results they intended, it appears.
    Regarding the OSHA silica proposed rule, there are several 
of you that have spoken to this. Any suggestions for OSHA on 
how to improve the rulemaking process?
    I guess Mr. Lenahan is--contact people that may be 
affected?
    Mr. Lenahan. I would be glad to comment on that. I think 
forming alliances is a great idea with industry and regulatory 
folks. We have had alliances in the past that have produced 
good results, not an OSHA example but a U.S. EPA example. The 
U.S. EPA eliminated a sector strategies program several years 
back where industry and agency could get together and talk 
about, hey, this is a rule that is going to kill us, and here 
is why it is going to kill us, and there were people from the 
agency that would actually sit down. They would come out here 
to the facilities. They would take a look at what you were 
doing to gain an understanding, and then they would take that 
back to D.C. and explain that this is why this is bad.
    I think it did a couple of things. I think it helped 
transfer information that was good, but it also let the folks 
at the agency know that we weren't the bad guys, and then we 
saw them the other way also.
    What we have now is really much more of a command and 
control relationship with OSHA and EPA, and I think we need to 
get back to where we actually are working together. None of us 
here, employers, want to do anything but protect our workers. 
They are our most valuable asset. They are our friends. They 
are our neighbors. They are our community members. We want them 
all to go home every day. We want them to lead good lives. It 
is irritating or frustrating when you feel that people don't 
understand that.
    Mr. Mica. Does anyone else want to comment?
    Mr. Fisher?
    Mr. Fisher. Yes, Mr. Chairman. I would just add that one 
thing that we have seen that is frustrating is that there is 
not always a demonstration of need that is fully articulated, 
or even fully researched. There needs to be a demonstration of 
need.
    Whenever OSHA promulgates a rule, it needs to--the 
decision-making process needs to be fact based and science 
based. It can't simply be based on picking winners or losers 
because there is a group that you may want to support for 
something, again, that is not germane to employee health or 
safety. There are regulations in which there could be special 
interests that profit or something like that, and we need to 
make sure we avoid that.
    And then I would just add, and it was hinted upon, is 
having that cooperative approach, working together, as opposed 
to a sometimes hostile approach. In other words, the carrot 
versus the stick we think seems to work very well because you 
have all stakeholders who are at the table who can really work 
together for the benefit of that core purpose of OSHA, which is 
health and safety, fact based, science based.
    Mr. Mica. Ms. Kaboth?
    Ms. Kaboth. I would just like to add I agree with both 
gentlemen. It would be nice to see more individualized effort 
by OSHA for every industry. Instead of just making a sweeping 
pronouncement saying everybody has to cut their exposure by 
half, to look at each industry and say, okay, what do we need 
to do here that really will improve things. That kind of 
cooperative effort I think would be very well received by 
business in general.
    Mr. Mica. Very good.
    At the conclusion here, I will first yield to Mr. 
Bentivolio to see if he has any final questions or a statement. 
And also to our witnesses, if there is anything that we haven't 
questioned you on or that you would like to bring up before 
this part of the hearing.
    Mr. Bentivolio, did you have any other questions or 
comments?
    Mr. Bentivolio. Mr. Fisher, you mentioned that OSHA allows 
union representatives to accompany OSHA inspectors on work 
sites. How do business owners feel about this relationship 
between government agency and unions?
    Mr. Fisher. Yes. Thank you, Mr. Chairman. In February of 
2013, an interpretation letter by OSHA stated that for 
enforcement action, that now a union representative or a 
community organizer could come onto the job site of the 
company, a company that is potentially subject to unionization, 
to participate in that walk-through, in that inspection, or 
even in jobsite sanctions. If you have a union organizer that 
is attempting to infiltrate a company and interfere with the 
employee-employer relationship, it draws a distinct and 
definite concern about what the actual intentions of that 
person accompanying the OSHA inspector are, and it can 
certainly be disruptive, and there is no need for it.
    OSHA, since the 1970s, has never done this, and suddenly 
there is this rule of interpretation that allows for this 
unprecedented interference. Again, the actual intentions do 
come into question when this occurs.
    Mr. Bentivolio. Intimidation.
    Regulations sometimes make no sense. Thousands of jobs 
lost, homes priced out of the market or beyond the reach of 
some people because of some regulations or additional paperwork 
to comply with regulations that builders have been doing for 
three generations. I don't understand why people, when they see 
a 2-by-4 wall, they should be asking what is the insulation in 
the walls, right? But they don't see that, do they? And you 
have to go through--let's see. If you have a wetland in the 
back, even if it is temporary during construction, you have to 
put up an erosion fence?
    Mr. Kligman. There is soil erosion and soil protection and 
fence protection requirements depending on wetlands, and 
sometimes it has to be delineated because again for short 
periods of time it may not be defined as a wetland but an 
inspector will say ``I want you to hire an expert and prove 
it.''
    Mr. Bentivolio. Do you know all the regulations for home 
building?
    Mr. Kligman. No, I don't.
    Mr. Bentivolio. Do you have any idea how many regulations 
there are for home building?
    Mr. Kligman. I can't speak to that. One of our members is 
very active in the codes, but he has brought in the code book 
that used to be used and the stack that is used now. I will 
speak from my perspective as a professional. Unless that were 
your full-time focus, to just study the codes, as opposed to 
being a business person and creating job opportunities and 
providing services to consumers--and we have a long tradition 
of very happy homeowners--it is impossible.
    Mr. Bentivolio. And for the record, when he said what the 
regulations used to be, he held his thumb and ----
    Mr. Kligman. He actually had an old code book.
    Mr. Bentivolio. Maybe three-eighths thick, three-eighths of 
an inch to stack, and I think you signified about a foot-and-a-
half high, right?
    Mr. Kligman. It is significant.
    Mr. Bentivolio. I think that is it. I would like to thank 
all the witnesses for coming today and offering your testimony.
    Mr. Mica. Well, thank you again, Mr. Bentivolio, for 
inviting us to Plymouth, Michigan, and for the opportunity to 
conduct this hearing and hear from these witnesses.
    I had one sort of general last question for all of you. In 
2013, the Office of Information and Regulatory Affairs, office 
of the OMB, the Office of Management and Budget, they released 
a draft report discussing the benefits and costs of Federal 
regulations, and they found in part that burdensome regulations 
can impose significant costs on business. In the report it 
stated--and let me quote from it--``If they are not carefully 
designed, regulations can also impose significant costs on 
businesses, potentially dampening economic competition and 
capital investment.''
    That release and that statement said what it just said. I 
would like to ask you, do you feel that this Administration has 
pursued and adopted regulations that are carefully designed, or 
do you feel that they harm the economic competition and capital 
investment?
    We will go right down the pike, just for the record.
    Mr. Fisher. I will take a stab at that, Mr. Chair. I don't 
think that they have been carefully designed in particular. 
When a Federal agency is in the process of promulgating a rule 
without providing justification for that rule, there is 
absolutely no room for that, and it is burdensome.
    You stated in your opening comments that EPA regulations 
have a $50 billion, with a B, price tag, just for EPA alone. To 
put that into perspective, that is more than the entire 
operating budget of the State of Michigan, and that is $50 
billion worth of economic activity, $50 billion worth of 
potential growth and job creation that is not otherwise being 
put into the economy.
    So there is a price tag, and it can be detrimental, and we 
do have to be absolutely careful and deliberate about what we 
do to make sure that regulations are sensible and needed.
    Thank you, Mr. Chairman.
    Mr. Mica. Again, the general question, Ms. Kaboth.
    Ms. Kaboth. I listen often to politicians say we need to 
get more manufacturing jobs. However, all the regulations that 
I have had to comply with since I became president in 2005 are 
all designed to put me out of business. The regulations don't 
want you to manufacture. Nobody wants you near them. Obviously, 
I have to believe what I have to comply with. But I would say, 
yes, that the policies ----
    Mr. Mica. You said 2005.
    Ms. Kaboth. 2005. Sorry.
    Mr. Mica. Well, that transcends several administrations. 
Has it gotten better or worse?
    Ms. Kaboth. It has gotten worse, it definitely has gotten 
worse. Well, they have gotten a lot more expensive to comply 
with. There were many early on that were just a matter--and for 
us, we don't have nearly the paperwork as you have with 
building a house because we don't add on very often. It is too 
expensive and we can't afford it. But there were more 
regulations, but they weren't as damaging.
    Mr. Mica. And didn't potentially put you out of business?
    Ms. Kaboth. Right.
    Mr. Mica. Mr. Lenahan?
    Mr. Lenahan. I would say look at the data, and the data 
shows that four of the top five years for regulation generation 
have happened under the Obama Administration. One of the five 
is under the Bush Administration.
    Mr. Mica. They seem to be coming out day and night.
    Mr. Lenahan. The data would reflect that.
    Mr. Mica. Mr. Kligman?
    Mr. Kligman. I echo the sentiments, and it does seem that 
there is a disconnect between the promulgation of some of these 
rules and the practical application and nature and the impact 
and detriment to job growth and the economy and opportunity.
    Mr. Mica. Well, I want to thank all of our four witnesses. 
Again, Mr. Bentivolio, he is a great breath of fresh air in 
Congress. He comes from a business background.
    I am not an attorney. Actually, I was a developer. In the 
days I did projects, I could go into city hall in the morning, 
get the permit in the afternoon. Now I think the last project I 
was involved in it took six months to do the permitting, and it 
just went on and on. So it has gotten pretty tough to do 
business, stay in business.
    And then the practical application. You see the lead, well-
intended regs, but then the consequences, people find a way to 
avoid that cost and maybe endanger themselves. We may be 
endangering more people the way we are doing this.
    It is interesting, too, to see that nobody seems like they 
are trying to avoid compliance. It is just a matter of a 
cooperative and directed effort and something that can be built 
on common sense, and also looking at the final results, which 
is so important that you want to achieve. Particularly, I will 
use Mr. Lenahan's foundry quote in many future speeches when he 
testified today that we have gone from 5,000 to 1,900 in many 
of those jobs. Activity and employment and economic 
opportunities have gone beyond our shores. That is very 
sobering. I was way underestimating. He said 350,000 jobs. That 
is a serious impact.
    I saw the jobs report this past week. We went down in 
numbers to 6.3, but then I saw almost a million people left the 
workforce. We have fewer people actually working than we have 
had in 25 years, something like that, a phenomenal decrease, 
which makes us less competitive, a less skilled workforce and 
many people becoming more reliant on the government either in 
retirement or--and then some of the things that have passed 
that have encouraged part-time rather than full employment. 
People are struggling now with two and three jobs. They are not 
sure of their employment. If the brick factory goes down, that 
is 80 people and a century of conducting honest and productive 
business. Very sad.
    As I drove in I saw a lot of vacant properties, which is 
maybe back to do another hearing on those. But you become 
concerned when you see the decline in good-paying jobs, 
employment, expansion of businesses, too many of them boarded 
up or closed down.
    I have learned some things here hopefully we can take back. 
Mr. Bentivolio is on the Small Business Committee, which is so 
important to this community, the state, and the country, and 
trying to keep those folks in business and employing people and 
expanding.
    But again, very informative, a fairly brief hearing. But we 
will make this part of the record. If there is additional 
information that we will submit either from witnesses, we may 
have additional questions we will submit to you, or additional 
information, and if you have constituents and others that want 
to submit things.
    Without objection, the record will be kept open for a 
period of 7 legislative days.
    There being no further business before the Subcommittee on 
Government Operations, this hearing is adjourned. Thank you.
    [Whereupon, at 10:50 a.m., the subcommittee was adjourned.]


                                APPENDIX

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