[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                       EPA REGULATORY OVERREACH:
                  IMPACTS ON AMERICAN COMPETITIVENESS

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

                                HEARING

                               BEFORE THE

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              June 4, 2015

                               __________

                           Serial No. 114-21

                               __________

 Printed for the use of the Committee on Science, Space, and Technology
 
 
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       Available via the World Wide Web: http://science.house.gov

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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma             EDDIE BERNICE JOHNSON, Texas
F. JAMES SENSENBRENNER, JR.,         ZOE LOFGREN, California
    Wisconsin                        DANIEL LIPINSKI, Illinois
DANA ROHRABACHER, California         DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
STEVEN M. PALAZZO, Mississippi       ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
RANDY HULTGREN, Illinois             ELIZABETH H. ESTY, Connecticut
BILL POSEY, Florida                  MARC A. VEASEY, TEXAS
THOMAS MASSIE, Kentucky              KATHERINE M. CLARK, Massachusetts
JIM BRIDENSTINE, Oklahoma            DON S. BEYER, JR., Virginia
RANDY K. WEBER, Texas                ED PERLMUTTER, Colorado
BILL JOHNSON, Ohio                   PAUL TONKO, New York
JOHN R. MOOLENAAR, Michigan          MARK TAKANO, California
STEVE KNIGHT, California             BILL FOSTER, Illinois
BRIAN BABIN, Texas
BRUCE WESTERMAN, Arkansas
BARBARA COMSTOCK, Virginia
DAN NEWHOUSE, Washington
GARY PALMER, Alabama
BARRY LOUDERMILK, Georgia
                           
                           C O N T E N T S

                              June 4, 2015

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Lamar S. Smith, Chairman, Committee 
  on Science, Space, and Technology, U.S. House of 
  Representatives................................................     6
    Written Statement............................................     7

Statement by Representative Eddie Bernice Johnson, Ranking 
  Member, Committee on Science, Space, and Technology, U.S. House 
  of Representatives.............................................     8
    Written Statement............................................     9

                               Witnesses:

Mr. Bob Kerr, President, Kerr Environmental Services Corp.
    Oral Statement...............................................    11
    Written Statement............................................    14

Mr. Bill Kovacs, Senior Vice President, Environment, Technology 
  and Regulatory Affairs, U.S. Chamber of Commerce
    Oral Statement...............................................    26
    Written Statement............................................    28

Dr. Jerome A. Paulson, FAAP Chair, American Academy of Pediatrics 
  Council on Environmental Health Executive Committee
    Oral Statement...............................................    50
    Written Statement............................................    52

Mr. Ross Eisenberg, Vice President, Energy and Resources Policy, 
  National Association of Manufacturers
    Oral Statement...............................................    63
    Written Statement............................................    65

Discussion.......................................................    90

             Appendix I: Answers to Post-Hearing Questions

Mr. Bill Kovacs, Senior Vice President, Environment, Technology 
  and Regulatory Affairs, U.S. Chamber of Commerce...............   118

Dr. Jerome A. Paulson, FAAP Chair, American Academy of Pediatrics 
  Council on Environmental Health Executive Committee............   136

Mr. Ross Eisenberg, Vice President, Energy and Resources Policy, 
  National Association of Manufacturers..........................   140

            Appendix II: Additional Material for the Record

Documents submitted by Representative Lamar S. Smith, Chairman, 
  Committee on Science, Space, and Technology, U.S. House of 
  Representatives................................................   146

Documents submitted by Representative Eddie Bernice Johnson, 
  Ranking Member, Committee on Science, Space, and Technology, 
  U.S. House of Representatives..................................   159

Documents submitted by Representative Donna F. Edwards, Committee 
  on Science, Space, and Technology, U.S. House of 
  Representatives................................................   165

Document submitted by Representative Suzanne Bonamici, Committee 
  on Science, Space, and Technology, U.S. House of 
  Representatives................................................   174

Document submitted by Representative Don S. Beyer, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..   216

Document submitted by Representative Mark Tonko, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..   219

Document submitted by Representative Gary Palmer, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..   222

 
                       EPA REGULATORY OVERREACH:
                  IMPACTS ON AMERICAN COMPETITIVENESS

                              ----------                              


                         THURSDAY, JUNE 4, 2015

                  House of Representatives,
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Committee met, pursuant to call, at 10:09 a.m., in Room 
2318 of the Rayburn House Office Building, Hon. Lamar Smith 
[Chairman of the Committee] presiding.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 


    Chairman Smith. The Committee on Science, Space, and 
Technology will come to order.
    Without objection, the Chair is authorized to declare 
recesses of the Committee at any time.
    Welcome to today's hearing titled ``EPA Regulatory 
Outreach: Impacts on Industry.'' I am going to recognize myself 
for five minutes for an opening statement, and then I'll do the 
same for the Ranking Member.
    Over the last year, the Environmental Protection Agency has 
released some of the most expensive and expansive regulations 
in its history. These rules will cost billions of dollars, 
place a heavy burden on American families, and diminish the 
competitiveness of American industry around the world.
    Today's hearing will examine this Administration's 
unprecedented regulatory agenda and the manner in which EPA has 
used secret science, questionable legal interpretations, and 
flawed analysis to promote these rules. Specifically, we will 
hear from our witnesses about how the Clean Power Plan, the 
Ozone National Ambient Air Quality Standards, and the 
definition of the ``Waters of the United States'' adversely 
impact the American economy with little benefit to our 
environment.
    The so-called Clean Power Plan is a power grab that will 
force states to reach arbitrary and often impossible targets 
for carbon emissions. These measures will impose tremendous 
costs on everyday Americans. It will shut down large numbers of 
affordable power plants, which increases the cost of 
electricity and puts the reliability of the electric grid into 
question. The Clean Power Plan will have an even greater impact 
on those who live on fixed incomes, such as the elderly and the 
poor, who are the most vulnerable to increases in the price for 
some of our most basic necessities like electricity. EPA 
asserts that the Clean Power Plan will help combat climate 
change. However, EPA's own data demonstrates that is not the 
case. The EPA data shows that this regulation would eliminate 
much less than one percent of global carbon emissions and would 
reduce sea-level rise by only 1/100th of an inch, the thickness 
of three sheets of paper. This rule represents massive costs 
without significant benefits. In other words, it's all pain and 
no gain.
    EPA also seeks to impose stricter ozone standards by 
lowering the standard from the current 75 parts per billion to 
between 65-70 ppb. Analysis conducted by EPA shows that this 
rule would cost at least $15 billion annually, and industry 
groups believe the costs will be even greater. Once again, 
these costs come with few benefits. In fact, EPA's own figures 
show that since 1980, ozone levels have decreased by 33 
percent. Today's air quality will continue to improve with the 
expected development of practical new technologies.
    Last week, the EPA submitted its final rule to define the 
``Waters of the United States.'' This is the EPA's latest 
attempt to expand its jurisdiction and increase its power to 
regulate American waterways, even if that means invading 
Americans' backyards. The rule will make it difficult for 
farmers and others to improve their land and expand their 
businesses. While the draft rule left many questions as to 
which bodies of water the EPA will claim under its 
jurisdiction, the final rule is more specific. As many had 
predicted, EPA has claimed unprecedented jurisdiction over many 
different kinds of water, including those that temporarily 
result from a ``drizzle.'' The EPA actually used that word, 
``drizzle.'' EPA will now have the authority to oversee 
features such as prairie potholes and even areas that are not 
always filled with water. Under this regulatory regime, 
Americans will be subject to required permits and the constant 
threat of government intervention. The onslaught of EPA 
regulations continues.
    I look forward to hearing from today's witnesses about the 
impact of these burdensome EPA regulations.
    [The prepared statement of Chairman Smith follows:]

             Prepared Statement of Chairman Lamar S. Smith

    Over the last year, the Environmental Protection Agency (EPA) has 
released some of the most expensive and expansive regulations in its 
history.
    These rules will cost billions of dollars, place a heavy burden on 
American families and diminish the competitiveness of American industry 
around the world.
    Today's hearing will examine this unprecedented regulatory agenda 
and the manner in which EPA has used secret science, questionable legal 
interpretations, and flawed analysis to promulgate these rules.
    Specifically, we will hear from our witnesses about how the Clean 
Power Plan, the Ozone National Ambient Air Quality Standards and the 
definition of the ``Waters of the United States'' unreasonably impact 
the American economy with little benefit to our environment.
    The so-called Clean Power Plan, proposed by EPA last June, is a 
power grab that will force states to reach arbitrary and often 
impossible targets for carbon emissions.
    These measures will impose tremendous costs on everyday Americans. 
It will shut down large numbers of affordable coal-fired power plants, 
which increases the cost of electricity and puts the reliability of the 
electric grid into question.
    The Clean Power Plan will have an even greater impact on those who 
live on fixed incomes, such as the elderly and the poor, who are the 
most vulnerable to increases in the price for some of our most basic 
necessities like electricity.
    EPA asserts that the Clean Power Plan will help combat climate 
change. However, EPA's own data demonstrates that is not the case.
    Even EPA data shows that this regulation would eliminate much less 
than one percent of global carbon emissions and would reduce sea level 
rise by only 1/100th of an inch (according to NERA economic 
consulting), the thickness of three sheets of paper.
    This rule represents massive costs without significant benefits. In 
other words, it's all pain and no gain.
    EPA also seeks to impose stricter ozone standards by lowering the 
standard from the current 75 parts per billion (ppb) to between 65-70 
ppb. Analysis conducted by EPA shows that this rule would cost at least 
$15 billion annually, and industry groups believe the costs will be 
even greater.
    Once again, these costs come with few benefits. In fact, EPA's own 
figures show that since 1980, ozone levels have decreased by 33 
percent.
    Today's air quality will continue to improve with the expected 
development of practical new technologies.
    Just last week, the EPA submitted its final rule to define the 
``Waters of the United States.''
    This is the EPA's latest attempt to expand its jurisdiction and 
increase its power to regulate American waterways-even if that means 
invading Americans' own backyards.
    The rule will make it difficult for farmers and builders to improve 
their land and expand their businesses.
    While the draft rule left many questions as to which bodies of 
water the EPA will claim under its jurisdiction, the final rule is more 
specific. As many had speculated, EPA has claimed unprecedented 
jurisdiction over many different kinds of water, including those that 
temporarily result from a ``drizzle.''
    EPA will now have the authority to oversee features such as 
``prairie potholes'' and even areas that are not always filled with 
water.
    Under this regulatory regime, Americans will be subject to 
stringent permitting and the constant threat of government 
intervention. The onslaught of EPA regulations continues.
    I look forward to hearing from today's witnesses about the impact 
of these burdensome EPA regulations.

    Chairman Smith. I now recognize the Ranking Member, the 
gentlewoman from Texas, Ms. Johnson, for her opening statement.
    Ms. Johnson of Texas. Thank you very much, Mr. Chairman.
    Unfortunately, today's hearing is just a continuation of 
the same familiar theme we have heard in this Congress: 
resistance to the EPA's efforts to carry out its mission to 
protect the nation's environment and the public health, 
resistance that is unsupported by scientific evidence.
    It thus should not be a surprise that this hearing, like 
all others on EPA's activities, will fail to offer any 
constructive solutions for lowering ozone and cutting carbon 
emissions. Instead, it will serve as one more platform for 
industry to voice its opposition to regulations that will make 
the air we breathe cleaner, the water we drink safer, and that 
will help address the looming challenge of climate change. Just 
this week, as a matter of fact, about 30 leaders of 
denominations throughout the African American community, the 
national leadership, came to the Congressional Black Caucus to 
announce their national movement to support cleaning up the 
environment.
    And while Congressional oversight of EPA's activities is 
appropriate, the hearings held by this Committee have not met 
standards of serious oversight. For example, this Committee has 
failed to bring the expertise necessary to truly examine the 
research, policies and technologies needed to confront the most 
important environmental issue of our time: climate change. 
Instead, the so-called experts the Majority has brought before 
this Committee too often represent views from outside the 
mainstream of the scientific community and are industry 
opponents with a vested interest in maintaining the status quo. 
It is puzzling to me that our Committee is going down such a 
path just as other nations and many in the business community 
are stepping up to address the challenge presented by climate 
change. Those nations and those businesses are looking to the 
United States government to provide leadership.
    Just last week, six major oil companies, including BP, 
Shell, and Total sent a letter to the United Nations 
recognizing climate change and the role of their companies in 
lowering carbon emissions. In the letter they state: ``For us 
to do more, we need governments across the world to provide us 
with clear, stable, long-term, ambitious policy frameworks. 
This would reduce uncertainty and help stimulate investments in 
the right low-carbon technologies and the right resources at 
the right pace.'' It is unfortunate that instead of 
contributing to the development of this long-term policy that 
these oil companies are asking Congress for, this Committee has 
too often become a forum for climate change denial.
    With respect to today's hearing, it is clear that a cleaner 
environment and a stronger economy are not mutually exclusive. 
Stricter pollution limits have historically led to innovation 
and the creation of new technologies that have wound up 
creating jobs while protecting our environment. I am confident 
American industry will continue that record of innovation and 
job creation as new environmental standards are adopted.
    And finally, I am proud to say that I was a nurse before I 
entered politics, and I can think of no mission of the federal 
government that is more important or noble than EPA's mission 
to protect human health and the environment. I look forward to 
Dr. Paulson's testimony on the public health benefits of the 
environmental regulations we will be discussing today.
    In closing, I look forward to the day when this Congress 
and this Committee will step back from the counterproductive 
opposition to EPA's efforts to carry out its statutorily 
mandated mission. It is not a good use of our time, and I hope 
that we can instead come together to advance our economy and a 
cleaner environment and a healthier public.
    Mr. Chairman, before I yield back, I'd like to enter into 
the record the letter that I mentioned in my remarks. I thank 
you, and I yield back the balance of my time.
    [The prepared statement of Ms. Johnson of Texas follows:]

          Statement submitted by full Committee Ranking Member
                         Eddie Bernice Johnson

    Thank you, Mr. Chairman. Unfortunately today's hearing is 
just a continuation of the same familiar theme we have heard in 
this Congress--resistance to the EPA's efforts to carry out its 
mission to protect the nation's environment and the public 
health--resistance that is unsupported by the scientific 
evidence.
    It thus should not be a surprise that this hearing, like 
all the others on EPA's activities, will fail to offer any 
constructive solutions for lowering ozone or cutting carbon 
emissions. Instead, it will serve as one more platform for 
industry to voice its opposition to regulations that will make 
the air we breathe cleaner, the water we drink safer, and that 
will help address the looming challenge of climate change.
    And while congressional oversight of EPA's activities is 
appropriate, the hearings held by this Committee have not met 
the standard of serious oversight. For example, this Committee 
has failed to bring in the expertise necessary to truly examine 
the research, policies, and technologies needed to confront the 
most important environmental issue of our time--climate change. 
Instead, the so-called experts the Majority has brought before 
this Committee too often represent views from outside the 
mainstream of the scientific community or are industry 
opponents with a vested interest in maintaining the status quo.
    It is puzzling to me that our Committee is going down such 
a path just as other nations and many in the business community 
are stepping up to address the challenge presented by climate 
change. Those nations and those businesses are looking to the 
United States government to provide leadership. Just last week, 
six major oil companies, including BP, Shell, and Total sent a 
letter to the United Nations recognizing climate change and the 
role of their companies in lowering carbon emissions. In the 
letter they state: ``For us to do more, we need governments 
across the world to provide us with clear, stable, long-term, 
ambitious policy frameworks. This would reduce uncertainty and 
help stimulate investments in the right low-carbon technologies 
and theright resources at the right pace.''
    It is unfortunate that instead of contributing to the 
development of the long-term policies that these oil companies 
are asking Congress for, this Committee has too often become a 
forum for climate change denial.
    With respect to today's hearing, it is clear that a cleaner 
environment and a strong economy are not mutually exclusive. 
Stricter pollution limits have historically led to innovation 
and the creation of new technologies that have wound up 
creating jobs while protecting our environment. I am confident 
American industry will continue that record of innovation and 
job creation as new environmental standards are adopted.
    Finally, I am proud to say that I was a nurse before I 
entered politics. And I can think of no mission of the federal 
government that is more important or noble than EPA's mission 
to ``protect human health and the environment." I look forward 
to Dr. Paulson's testimony on the public health benefits of the 
environmental regulations we will be discussing today.
    In closing, I look forward to the day when this Congress 
and this Committee will step back from the counterproductive 
opposition to EPA's efforts to carry out its statutorily 
mandated mission. It is not a good use of our time, and I hope 
that we can instead come together to advance our economy and a 
cleaner environment and healthier public.
    Mr. Chairman, before I yield back I'd like to enter into 
the record the letter that I mentioned in my remarks. Thank you 
and I yield back the balance of my time.

    Chairman Smith. Without objection.
    [The information appears in Appendix II]
    Chairman Smith. And while we're asking unanimous consent to 
put items into the record, I'd like to ask unanimous consent to 
put into the record letters or documents we received from the 
Small Business and Entrepreneurship Council, from the American 
Chemistry Council, and that does it for right now.
    [The information appears in Appendix II]
    Chairman Smith. Thank you, Ms. Johnson, for your opening 
statement.
    Let me go on and introduce our witnesses today. Our first 
witness is Mr. Bob Kerr, President of Kerr Environmental 
Services Corporation. Mr. Kerr has 29 years' experience as an 
environmental consultant specializing in stream and wetland 
mitigation, natural resources consulting, National 
Environmental Policy Act compliance, and environmental 
contaminant studies. Mr. Kerr received his bachelor's degree in 
biology from the State University of New York at Fredonia and 
his master's degree in marine environment studies from Stony 
Brook University.
    Our next witness today is Mr. Bill Kovacs, Senior Vice 
President for Environment, Technology and Regulatory Affairs at 
the U.S. Chamber of Commerce. Mr. Kovacs initiates and leads 
multidimensional national issue campaigns on comprehensive 
energy legislation, complex environmental rulemakings, 
telecommunications reform, emerging technologies, and the 
systematic application of sound science to the federal 
regulatory process. Mr. Kovacs received his bachelor's degree 
from the University of Scranton and his law degree from Ohio 
State University.
    Our next witness is Dr. Jerome Paulson, Chair of the 
American Association of Pediatrics Council on Environmental 
Health Executive Committee. Dr. Paulson also directs the Mid-
Atlantic Center for Children's Health and Environment, a 
federally funded environmental health specialty unit that 
provides education and outreach to health professionals, 
parents and the community. In addition, Dr. Paulson has served 
as a Special Assistant to the Director of Centers for Disease 
Control's National Center on Environmental Health. Dr. Paulson 
received his bachelor's degree in biochemistry from the 
University of Maryland and his M.D. from Duke University.
    Our final witness today is Mr. Ross Eisenberg, Vice 
President of Energy and Resources Policy at the National 
Association of Manufacturers. Mr. Eisenberg oversees NAM's 
energy and environmental policy work and has expertise on 
issues that range from energy production and use to air and 
water quality, energy efficiency, and environmental regulation. 
Before joining NAM in 2012, Mr. Eisenberg spent more than five 
years as Environmental and Energy Counsel at the U.S. Chamber 
of Commerce. Mr. Eisenberg received his bachelor's degree in 
English and political science from Emery University and his law 
degree from Washington Lee University School of Law.
    We welcome you all and look forward to your testimony 
today, and Mr. Kerr, we'll begin with you. Make sure your mic 
is on there.

             TESTIMONY OF MR. BOB KERR, PRESIDENT,

               KERR ENVIRONMENTAL SERVICES CORP.

    Mr. Kerr. Thank you. Chairman Smith, Members of the 
Committee, I appreciate the opportunity to testify today. My 
name is Bob Kerr, and I'm President of Kerr Environmental 
Services, an environmental consulting and water resources 
engineering firm located in Virginia Beach, Virginia. I've 
provided wetlands consulting and permitting assistance 
throughout Virginia and North Carolina for more than 26 years.
    Since 1972, the Clean Water Act has played an important 
role in improving the quality of the nation's water resources 
yet there continues to be frustration and uncertainty over the 
scope of the Act and the appropriate role of the federal 
government in protecting the nation's waters.
    Decades after the enactment of the Clean Water Act, there 
still is no easy way to determine if certain types of waters 
are subject to state law or federal mandates. EPA and the Corps 
recently issued a rule intended to clarify what is subject to 
federal regulation. Unfortunately, the rule does not provide 
the needed predictability and certainty in the permitting 
process. It fails to follow the intent of Congress, ignores 
Supreme Court precedent, and does not respect the authority of 
the state to regulate their land and water resources.
    The agencies claim the rule does not expand federal 
jurisdiction but that's simply not the case. The rule 
establishes a broader definition of ``tributaries,'' which, for 
the first time, includes ditches and streams that only flow 
after it rains. It also allows the agencies to regulate 
intermittent and ephemeral drainages by rule classifying them 
as tributaries whereas before the agencies required an analysis 
of their significant nexus to traditional navigable waters 
before federal jurisdiction could be established. While this 
certainly provides clarity, it does not limit jurisdiction.
    The new definition of ``neighboring'' includes areas that 
were not previously federally regulated such as non-wetlands 
located more than a quarter of a mile from a traditional 
navigable water or similar features located within a floodplain 
and up to 1,500 feet from the feature. Moreover, the agencies 
retain extensive authority to interpret certain ambiguous 
definitions as they see fit. This will allow for the 
inconsistent application of the rule among regulators both 
within a Corps district and across the country. Ultimately, the 
rule will lead to more litigation, project delays, more 
landowners needing permits, and the higher costs of permitting 
avoidance and mitigation.
    You might look at the rule and think it's a dream come true 
for a consultant like me because more regulation will mean more 
business. I fear the exact opposite. Under the new rule, I'll 
need to complete more jurisdictional determinations, will have 
to conduct multiple tests to determine whether a feature 
qualifies as a water of the United States. It'll take 
additional time and resources to complete the tests, and that 
will cost clients more money. Not knowing their permit costs in 
advance increases financial risk for my clients. As such, 
clients may not--may decide not to pursue some projects as a 
result.
    Some cases may also be so complex that they are too time-
consuming or costly to resolve. In such cases, clients have the 
option to concede federal jurisdiction and proceed with 
permitting and mitigation through a preliminary jurisdictional 
determination, but that isn't a fair program to me nor does it 
keep the legislative intent of the Clean Water Act, and that's 
not good for the economy as a whole.
    To start to fix this, we need a new rule that respects the 
state's role in regulating waters. Many aspects of the Clean 
Water Act are vague but it's clear that Congress intended to 
create a partnership between the federal agencies and state 
government to protect our nation's water resources. The Supreme 
Court has twice affirmed that the Clean Water Act places limits 
on federal authority. There is a point where federal authority 
ends and state authority begins. The final rule published by 
the EPA and Corps would assert jurisdiction over many features 
that are isolated, carry only minor volumes of water, or have 
only theoretical impacts on traditional navigable waters. These 
waters are properly regulated by the states.
    The federal government cannot just assert jurisdiction over 
everything, yet that appears to be the agencies' solution, and 
many of the bright-line limits written into the rule seem so 
large in scale or so vague as to have created no actual 
limitation. Precedent suggests that the courts will again have 
to rein in the overarching rule but only after countless years 
of litigation. The wiser path forward is for Congress to act 
now. Let's get the agencies to withdraw the rule, resolve the 
problems, provide the clarity we need as to what constitutes a 
water of the United States.
    Thank you again for the opportunity to testify today.
    [The prepared statement of Mr. Kerr follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Smith. Thank you very much.
    Mr. Kovacs.

                 TESTIMONY OF MR. BILL KOVACS,

              SENIOR VICE PRESIDENT, ENVIRONMENT,

               TECHNOLOGY AND REGULATORY AFFAIRS,

                    U.S. CHAMBER OF COMMERCE

    Mr. Kovacs. Thank you, Chairman Smith and Ranking Member 
Johnson and Members of the Committee.
    For my opening remarks today, I'm going to address the 
question many of us have been asking for a while: How did an 
Environmental Protection Agency acquire such great power over 
energy policy, state waters, land use, and the nation's 
economic development at the expense of states which implement 
over 90 percent of the federally delegated programs and are the 
main point of contact for the regulated community?
    The purpose of regulation is to implement the laws passed 
by Congress in the most efficient way to achieve the 
Congressional intent. In the 1970s, Congress when it enacted 
these environmental laws had very little knowledge of how to 
protect the environment. It also recognized that while it was 
protecting the environment, it would cause, and I emphasize, 
they recognized in 1970 it would cause plants to shut down, 
jobs to be lost, and harm to impacted communities. But to deal 
with this dilemma, Congress gave the EPA very broad authorities 
to protect the environment but also mandated that the EPA 
continuously evaluate the potential loss or shifts in 
employment resulting from the regulations so that Congress 
could make corrections based on actual input.
    Congress also authorized citizen suits by granting access 
to the courts to anyone protecting the environment, in effect 
granting special environmental enforcement authorities to 
private-sector entities. Then in 1984, the Supreme Court 
granted deference to EPA's decisions where Congress was silent 
or vague on any of the statutory provisions in thousands of 
pages of legislation. In essence, the Supreme Court authorized 
EPA to fill in all of the gaps in the legislation. Almost from 
the beginning, EPA missed a high percentage of its 
Congressionally mandated deadlines. Since EPA misses between 84 
percent and 98 percent of its deadlines, depending on which 
study you believe, citizen suits were brought to force the EPA 
to comply with the deadlines. Rather than arguing it had 
discretion in meeting the conflicting priorities, EPA entered 
into consent decrees with advocacy groups agreeing to implement 
the regulations requested, thereby letting these groups set the 
policy for the Agency and the priorities.
    The best illustration of the impact of the sue-and-settle 
process is that between 2000 and 2013 time frame, approximately 
425 agencies issued almost 50,000 regulations but only 30 of 
those regulations were costing over a billion dollars a year to 
the regulated community or to the states, and EPA issued 17 of 
the 30, and those 17 account for 82 percent of all the costs 
for all 30 rules. Beginning in 1980 and onward, Congress passed 
numerous regulatory laws to provide guidance to the agencies as 
to the type of information needed to be developed by the agency 
to ensure that it complied with Congress's intent to have a 
sound rulemaking record based on fact, science and economics. 
These statutes were the Information Quality Act, the Regulatory 
Flexibility Act, and unfunded mandates reform. EPA routinely 
ignores Congressional mandates, and, more importantly, it has 
never started in 35 years a continuing evaluation of the 
employment impacts of its regulations, thereby leaving Congress 
without the information needed to legislate.
    Therefore, the condition we have today and the 
circumstances we find ourselves in is we have an agency that 
has been given broad delegated authority to make policy. You 
have a federal judiciary that has said that anything that you 
don't describe in clear terms, that they have--that based on 
deference, they have the authority to fill in the legislative 
gaps.
    The development of secret sue-and-settle agreements allows 
these advocacy groups to set agency policy, and we have an 
agency that for 35 years has refused to evaluate the impact of 
regulations on employment. We also have an agency that 
routinely ignores Congressional mandates to try to--that fix 
the regulatory record through having the agency talk to small 
businesses, find out what the unfunded mandates are on state 
and local governments, and use sound and science--sound science 
and factual information.
    If Congress wants its laws implicated according to what you 
believe you've legislated, it must ensure that the agency is 
accountable to Congress, that the rulemaking process is 
transparent, that it operates within integrity, and provides 
all of the participants the same rights as they participate in 
the federal rulemaking process.
    Thank you.
    [The prepared statement of Mr. Kovacs follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
  
    Chairman Smith. Thank you, Mr. Kovacs.
    Dr. Paulson.

              TESTIMONY OF DR. JEROME A. PAULSON,

           FAAP CHAIR, AMERICAN ACADEMY OF PEDIATRICS

                    COUNCIL ON ENVIRONMENTAL

                   HEALTH EXECUTIVE COMMITTEE

    Dr. Paulson. Good morning, Chairman Smith, Ranking Member 
Johnson and Committee members. Chairman Smith, thank you for 
your kind introduction of me, and I will just add that for 30 
to 35 years I also practiced----
    Ms. Edwards. Mr. Chairman, is the mic on?
    Dr. Paulson. I practiced and taught primary care 
pediatrics, so I was directly involved in the day-to-day 
pediatric care of children.
    And so with the background that you described and my work 
as a pediatrician that I mentioned, I'm going to comment today 
on the child health benefits of the Clean Power Plan and the 
EPA's proposed ozone rule.
    We know very clearly that children are disproportionately 
at risk from environmental pollutants. Children are not little 
adults, and we cannot extrapolate from what we know about 
adults and assume that that information applies to children, 
particularly as it relates to respiratory illnesses. Children 
breathe faster than adults, they have higher levels of physical 
activity, and they spend more time outdoors. Their lungs are 
still developing. Therefore, children have different outcomes 
from exposures to ozone and other air pollutants than adults 
do, and these effects on children last a lifetime. Problems 
that develop in children manifest themselves in adulthood. The 
work of EPA is essential to protecting children from pollutants 
and ensuring that children have an optimal environment in which 
to live, learn and play.
    Reducing carbon emissions of fossil fuel power plants 
represents a major step towards addressing a key component of 
climate change in the United States. According to the World 
Health Organization, over 80 percent of the current health 
burden from the changing climate is on children less than five 
years old, and that's children here in the United States as 
well as globally. These burdens on children include injury and 
death from natural disasters, increases in air pollution-
related illness, and more heat-related potentially fatal 
illness.
    Reducing carbon pollution will have an immediate impact on 
child health by reducing emissions of other pollutants and the 
resultant creation of harmful ozone. When fully implemented in 
2030, EPA's proposed rule for existing power plants will result 
in 6,600 fewer premature deaths, 150,000 fewer childhood asthma 
attacks, and 180,000 fewer missed school days, 3,700 fewer 
cases of bronchitis. This also means that when children are not 
sick, their parents can go to work, keep their jobs and earn 
money for the family.
    Let me tell you about a phone call that I received from a 
physician about a little girl with asthma. The family and the 
physician were having difficulty keeping her asthma under 
control in spite of adequate medical management. The astute 
mother reported that her daughter's asthma got worse when the 
smoke from the power plant that was located near her home 
changed from white to black. We were able to determine that the 
power plant usually burned natural gas but was approved to burn 
coal under certain circumstances. We believe that this little 
girl's asthma was exacerbated by the coal burning because of 
the increase in particulate and other air pollutants associated 
with that fuel.
    It is also clear and compelling scientific evidence that 
supports the need for a strong ozone standard of 60 parts per 
billion or lower. High levels of ozone in the air including 
levels above 60 parts per billion can lead to decreased lung 
function in children, coughing, burning and shortness of breath 
as well as inflammation and swelling of the airways. In 2025, a 
60-part-per-billion standard could prevent 7,900 premature 
deaths, 1.8 million child asthma attacks, and 1.9 million 
missed school days.
    I know that the distinguished members of this Committee 
have given many speeches over the course of your careers, and I 
am sure that all of you would be horrified, as I was, to look 
out at a crowd that you were addressing to see a woman in the 
audience sobbing but that was my experience during a luncheon 
presentation talking about ozone as a cause of asthma and a 
reason for exacerbation of asthma. This mom was blaming herself 
for being a good mother and encouraging her son to be 
physically active and involved in outdoor sports only to have 
him develop asthma.
    The EPA has a fundamental role in ensuring that the 
environment in which children live, learn and play is safe and 
healthy and allows children to enter adulthood free from 
environmentally related health problems. The Clean Power Plan 
and stronger ozone NAAQS are essential child health policies 
that the AAP strongly supports.
    Thank you.
    [The prepared statement of Dr. Paulson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
           
    Chairman Smith. Thank you, Dr. Paulson.
    And Mr. Eisenberg.

                TESTIMONY OF MR. ROSS EISENBERG,

          VICE PRESIDENT, ENERGY AND RESOURCES POLICY,

             NATIONAL ASSOCIATION OF MANUFACTURERS

    Mr. Eisenberg. Good morning, Chairman Smith, Ranking Member 
Johnson, members of the Committee. Thank you for the 
opportunity to be here today to present the views of the 
National Association of Manufacturers and our 14,000 members.
    Manufacturers believe regulation is critical to the 
protection of worker safety, public health, and our 
environment. We believe in the mission of the EPA and we 
support reasonable environmental regulation. However, we also 
bear an unmistakably high burden of compliance with the 
Agency's regulations. Manufacturers spend, on average, over 
$19,000 per employee per year on regulatory compliance and over 
$10,000 of this is for environmental regulations. The smaller 
the manufacturer, though, the larger the burden. Manufacturers 
with less than 50 employees spend over $34,000 per employee per 
year and over $20,000 of this is due to environmental 
regulations.
    So when the EPA issues a new regulation with new costs and 
new burdens, manufacturers have to pay these costs not op of 
what we're already doing, the tens of thousands of dollars that 
we've already assumed. So we're not starting from zero. In 
fact, our plants are already equipped with the best available 
pollution control technology. We maximize our efficiency and we 
limit waste and we recycle. And so while we'll always strive 
for improvement, in some cases we're really already pushing up 
against or beyond what technology can deliver, and so we need--
what we need as manufacturers more than ever are smarter 
regulations.
    We just don't believe we're getting that from the EPA with 
respect to the three regulations that we're here to talk about 
today: ozone, the Cleaner Power Plan, and the ``waters of the 
United States'' definition. In all three cases, the costs and 
burdens placed on manufacturers as a result of these 
regulations are very significant and could make us 
significantly less competitive.
    Manufacturers are committed to reducing ozone levels, and 
we've been doing so for decades. We've been reducing the 
emission that cause ozone by more than half since 1980. 
However, the progress we've made, it also means that both the 
low-hanging fruit and the high-hanging fruit are pretty much 
gone and so the controls that are needed to reduce ozone levels 
are already in place. In fact, with this rule, EPA can only 
identify about 35 percent of the controls and technologies 
needed to achieve this new 65-parts-per-billion standard. You 
heard that right. A solid two-third of the controls that will 
be needed to comply to this are called unknown controls. We 
don't know what they are.
    Economic analysis of this new standard shows that it would 
be the most expensive regulation in history. Second place isn't 
even close. It would cost about $140 billion per year, about 
$1.7 trillion over the next 23 years, placing the equivalent of 
1.4 million jobs in jeopardy each year and reducing annual 
household income--consumption--I'm sorry--by an average of 
about $830 per year. Very few low-cost control options exist 
for this tightening of ozone standard, so if controls aren't 
invented in time, what winds up happening is, manufacturers are 
forced to consider scrapping equipment, scrapping existing 
plants, replacing them, or just plain old shutting them down. 
And then there's nonattainment for ozone, which is essentially 
a synonym for no growth. There has to be a better way for this 
than this, and really there is. The current standard is only 
being implemented. It's going to drive ozone precursor 
emissions, the emissions that cause ozone, down by another 36 
percent over the next decade. We believe we should let that 
standard work before moving the chains one more time.
    On climate, we're committing to addressing climate change 
through improved energy efficiency, greater sustainability and 
reducing our greenhouse gas emissions. We've done that. We 
reduced our emissions ten percent over the past decade, but our 
competitiveness is threatened by the Clean Power Plan as it's 
currently drafted. Independent analysis of this rule places 
total compliance costs as high as about $366 billion through 
2031. Forty-three states could experience double-digit 
electricity prices. That's very difficult for us as we are 
major, major energy users. And even worse, many sectors in my 
membership, manufacturing, are due to get follow-on regulations 
under the Act that will be modeled off of this one, meaning 
we're going to be hit twice.
    We believe EPA needs to fix this rule. We agree that 
adoption of a strong and fair international climate agreement 
should be a priority, but we also must be very careful not to 
lock into place policies that will send production and 
emissions overseas if the rest of the world doesn't play by 
those same rules in Paris in December.
    Finally, manufacturers are disappointed with the final 
Waters of the United States regulation. We would welcome a 
clear rule that resolves disagreement over scope of the Clean 
Water Act. Instead, we ended up with a final regulation that 
fails to do this. It fails to clear up the problems and may 
have even created new ones. The regulation certainly expands 
the scope of the Clean Water Act to areas that are not even 
wet, and it fails to provide clear exclusions as to what 
actually qualifies. We're going to face, manufacturers are 
going to face increased uncertainty, permitting costs, and 
supply-and consumer-chain disruptions. Ambiguities in the new 
regulation will give rise to third-party lawsuits, even in 
cases where EPA agrees with us and believes that it is not a 
water of the United States.
    I assure you, we do not enjoy having to have an adversarial 
position to the EPA on these regulations. We prefer to work 
with them as a partner toward a shared goal of protecting the 
environment. However, we desperately need the EPA to choose a 
different regulatory path.
    Sadly, we are nearing the time where legislation may be our 
only hope, and we ask this Committee for its help in that 
pursuit.
    Thank you.
    [The prepared statement of Mr. Eisenberg follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]      
      
    Chairman Smith. Thank you, Mr. Eisenberg, and I'll 
recognize myself for questions, and Mr. Kerr, let me direct my 
first question to you.
    The EPA claims that under the Waters of the United States 
final rule, it does not expand the scope of federal 
jurisdiction. Give me a couple of quick examples as to why it 
does expand jurisdiction.
    Mr. Kerr. Sure. Under the SWANCC Supreme Court ruling, the 
Supreme Court found that isolated wetlands are not under the 
jurisdiction of the Clean Water Act, and if they're to be 
regulated at all, they need to be regulated by the state. Those 
types of isolated wetlands can now be regulated under the Clean 
Water Act. Under the new rule, they can be regulated as an 
adjacent water. So that's one type of situation where scope's 
broadened.
    Chairman Smith. By the way, I'm just curious. Have we seen 
the word ``drizzle'' before, water that's accumulated as a 
result of drizzle?
    Mr. Kerr. Not to my knowledge.
    Chairman Smith. Okay. That might be another example.
    Mr. Kerr. Yeah, and actually I've got three or four others. 
There has never been an adjacent feature regulated under the 
Clean Water Act other than wetlands. The only adjacent feature 
could be a wetland. Under the new rule, a pond can be 
considered adjacent. Virtually any kind of other water of the 
United States can be considered adjacent. That's a new 
precedent and was not dictated by a court decision.
    Ditches flowing into tributaries can now be regulated as a 
jurisdictional water. I've got a lot of concern with that 
because by definition, ditches connect into waters of the 
United States so that they drain agriculture, roads, 
stormwater, you know, a number of features. If they connect to 
a traditionally navigable water or a tributary, the EPA is 
saying they can regulate them now. That creates at a minimum a 
lot of confusion.
    Chairman Smith. And that's another expansion.
    Mr. Kerr, I know you could go on and on and on. Let me see 
if I can get to some other questions.
    Mr. Kovacs, real quickly, you say that the modeling system 
used by the EPA is biased. What's an example, and specifically 
the way that it's biased?
    Mr. Kovacs. Well, I mean, there's several. One is when we 
did our own modeling on costs several years ago, we found that 
the EPA used what they call a limited model where the only 
thing they looked at was what are the impacts on job growth, 
and that was very narrow in the sense that it asked how many 
consultants are you going to have. So when they modeled the 
mackerel, for example, it found that it created 8,000 jobs. 
When we used whole-economy modeling, we found that it lost 
240,000 jobs, and that's one of the huge debates that's going 
on right now with the Science Advisory Board. They've been 
instructed by Congress to determine whether or not EPA is 
modeling's is incorrect.
    Chairman Smith. Okay. Thank you, Mr. Kovacs.
    Dr. Paulson, first of all, you mention in your testimony--I 
just want to bring it out for everybody's information--that 
since 1990, emissions of six common pollutants have dropped by 
41 percent through 2008. I think that's good news.
    You also mention the heartfelt case of a girl with asthma, 
and whenever the smoke from the power plant located near her 
home changed from white to black, when they went from burning 
natural gas to coal, her asthma worsened. We've done some 
research, and our research indicates that typically a coal-
fired plant produces white smoke, not black smoke, and I'll 
show a couple photographs. Do you know where this plant was 
located that you referred to?
    Dr. Paulson. Yes, sir, I do.
    Chairman Smith. What city or what area? You don't need to 
give anybody's identity. I'm just curious where it's located.
    Dr. Paulson. Washington, D.C.
    Chairman Smith. Okay. And we'll have to check because my 
information is that even when they're burning coal, the smoke 
is white, not black, and that might be of interest. Anyway, I 
just wanted to bring that out. I appreciate that.
    My last question goes to Mr. Eisenberg, and this is, does 
the EPA have the legal authority to implement the proposed 
Clean Power Plan?
    Mr. Eisenberg. Certainly that is an open question, I mean, 
and I fear that if they finalize the rule that they proposed, 
we're going to get some litigation on that. There --we and 
others have posed a number of potential legal obstacles that 
this thing could go through. You know, they have the--they 
certainly have the authority to regulate greenhouse gases. 
That's been settled by the Supreme Court. The issue is, can 
they be using this statute the way they're using it? They've 
certainly made a lot of interesting choices in terms of going--
--
    Chairman Smith. Do you have a legal opinion yourself as 
to----
    Mr. Eisenberg. You know, it's going to be a complicated 
case. I think, you know, certainly there are a lot of potential 
flaws, legal flaws, in this language.
    Chairman Smith. Okay. What's an example of one?
    Mr. Eisenberg. So a very easy one is whether or not the 
section 111 can be used in light of the fact that they're 
already regulating power plants under section 112 for hazardous 
air pollution, can you actually do that under section 111, and 
if so, can you do that for everybody else. They didn't make an 
independent endangerment finding for this one so they just 
basically said well, cars cause this and so power plants must 
too. There's a lot of stuff they did in there that I think is 
going to be a real challenge.
    Chairman Smith. Thank you, Mr. Eisenberg, and the 
gentlewoman from Texas, the Ranking Member, Ms. Johnson, is 
recognized for her questions.
    Ms. Johnson of Texas. Thank you very much, Mr. Chairman.
    Dr. Paulson, in your--in testimony of Mr. Kovacs, he 
recommended EPA retain the current 2008 ozone standard of 75 
parts per billion, in large part because EPA is just now 
starting to implement the 2008 standard. Those who support 
retaining the current standard say it is unfair for EPA to move 
the goalpost by calling for a more stringent standard. As most 
people know, I'm from Dallas, Texas, an area that is all too 
familiar with poor air quality. Dallas County alone is home to 
more than 60,000 children and over 130,000 adults with asthma 
who are at risk of missing school, missing work, ending up in 
the emergency room or hospital, and even dying prematurely on 
days with dangerous ozone levels at government expense.
    Unfortunately, the State of Texas is not helping to protect 
my constituents nor anybody else's and has been intensely 
opposed to a lower ozone standard. In fact, the chairman of the 
Texas Commission on Environment Quality, Bryan Shaw, has stated 
that there will be little to no public health benefit from 
lowering the current standard. Was the current standard of 75 
parts per billion sufficient to protect public health when it 
was finalized in 2008 is one question, and the second question, 
how has the body of scientific evidence changed since the last 
time the EPA revised the ozone standard, and would it make 
sense based on the science for EPA to retain the current 
standard until the states have fully implemented, as some have 
suggested?
    Dr. Paulson. Ms. Johnson, if the states retain the current 
standard until it's fully implemented, people are going to die 
and people are going to be sick. We knew before the current 
standard was set by EPA based on the science that was available 
prior to that time that that standard was inadequate to protect 
the health of human beings in the United States. We now have 
additional scientific information, both from human 
epidemiologic studies and other research that shows that a 
level of 60 is where health protection starts.
    Ms. Johnson of Texas. Thank you very much.
    Are you likely aware that critics of the Clean Power Plan 
and virtually any other EPA rule often claim that the economy 
and the American consumer will suffer as a result of efforts to 
make our environment cleaner and safer? This ``sky is falling'' 
attitude toward protecting the health of Americans runs counter 
to reality. As the economy has tripled in size since the 
adoption of the Clean Air Act in 1970, claims that regulations 
kills jobs are equally misleading. As a matter of fact, I've 
known it to create jobs. In fact, just last year, we heard from 
the witnesses that wise environmental protection and robust 
economic development can and should go hand in hand.
    That being said, one cost is abundantly clear, and that is 
the cost of American lives, if we do not enact regulations to 
protect their public health.
    Now, can you please expand upon the cost to public health 
if we do not act and implement stronger emission regulations 
and what are the costs to the taxpayers, especially medical 
costs, if businesses are allowed to continue to pollute?
    Dr. Paulson. Ms. Johnson, the issues around ozone in 
particular and all of the rest of the air pollutants that come 
under the Clean Power Plan, each and every one of them 
adversely affects human health and therefore cost money, cost 
money in terms of direct out-of-pocket costs for payment of 
medical expenses or the government pays those expenses if it's 
not direct out of pocket or business pays those expenses in 
terms of insurance premiums. Businesses also pay an expense for 
these health problems when their workers can't show up or show 
up sick and can't do the work that they need to do. Businesses 
also pay for these health problems when children are ill 
because their parents need to stay home with the children, need 
to take their children to a healthcare professional, need to 
take their children to an emergency room, or need to sit by 
their child's bedside in the hospital.
    One of my colleagues, Dr. Leonardo Trasande from NYU 
Medical School, and a colleague of his, Dr. Lu, concluded that 
the best estimate of childhood asthma costs in 2008, and 
recognized that they've only gone up since then, that could be 
associated just with environmental factors--this is not the 
total cost of asthma, this is the cost attributable to 
environmental factors--was around $2.2 billion per year in the 
United States with a range from about $728 million to $2.5 
billion.
    So by not protecting our people, there is an extensive 
economic burden on businesses and on the country as a whole.
    Ms. Johnson of Texas. Thank you very much. My time is 
expired.
    Chairman Smith. Thank you, Ms. Johnson.
    And the gentleman from California, Mr. Rohrabacher, is 
recognized.
    Mr. Rohrabacher. Years ago, when I was in high school, 
which seems, really, I guess it was in another century, I 
remember when I was in Los Angeles when in high school, and we 
were not permitted to go out and do strenuous exercises because 
the pollution levels in Los Angeles were so high that perhaps 
once or twice a week they called a pollution emergency. Today, 
I think it happens once or twice a year, so there has been a 
dramatic reduction in the air pollution, at least in southern 
California, and I take it from the testimony that we've heard 
that that's true throughout the rest of the country as well.
    We have to attribute that to the fact that there has been 
regulation that has been successful, and those of who have a 
natural inclination against regulation need to be honest about 
that, and the question is, is whether or not we have come to a 
point or when we did come to that point where such regulation 
actually does not clean the air but there are natural sources 
of pollution when you have to want to maintain a certain 
standard of living for people. If we're going to have 
civilization, there will be-- manufacturing will take place. If 
you do not have manufacturing, people will get sick for other 
reasons other than just the air.
    The question is for you, Dr. Paulson. Has there been a 
decrease in the number of illnesses, air-pollution-related 
illnesses that has been recorded in these last 10, 15 years as 
the pollution level's gone down?
    Dr. Paulson. It depends what pollutant you're looking at 
and what particular health outcome you are looking at, but we 
do know that the pollution levels have come down and we also 
know that the current pollution levels are not healthy, 
actually still----
    Mr. Rohrabacher. Excuse me. You're not answering my 
question, please. I'm asking you specifically, because the 
pollution levels have gone down and now do we see as the 
pollution level's gone down this decrease in the number of 
diseases related to that pollution?
    Dr. Paulson. There's been some leveling off, for example, 
of people with asthma but there are----
    Mr. Rohrabacher. So we have a leveling off and not--there's 
been this dramatic decrease in the pollution but there's only 
been a leveling off, so maybe we have reached a point that the 
pollution level is more of a natural level that human beings 
can relate to. Perhaps maybe the other witnesses----
    Dr. Paulson. There----
    Mr. Rohrabacher. Go right ahead.
    Dr. Paulson. These levels of pollution are dangerous to 
human beings, Mr. Rohrabacher. These levels of pollution are 
produced by human beings and can be controlled by human beings.
    Mr. Rohrabacher. Well, there are also, as we know, 
natural--for example, we are called deniers over here if you 
don't go along with the fact that CO2 is changing 
our climate, but we know that 90 percent of the CO2 
in the air comes from natural sources and not human sources, 
and at some point you have to relate what level of whatever 
we're talking about actually relates directly to people's 
health, and do the other witnesses have any----
    Dr. Paulson. Mr. Rohrabacher----
    Mr. Rohrabacher. Listen, can I ask the other witnesses to 
comment on that as well?
    Mr. Kovacs. We did a study using EPA's own data just to 
figure out that exact question. We asked in each of the studies 
that the EPA was doing in terms of reducing pollution, whether 
it be ozone or mercury or whatever, EPA--let's use mercury. 
EPA--the entire utility MACT was mercury but only $6 million 
out of $10 billion in EPA's claimed benefits came from mercury. 
The rest came from particulate matter, and what's happened is, 
we've taken particulate matter down to whether--where it's 30 
percent below where EPA says it's safe and 20 percent below 
where the World Health Organization says it's safe. We're still 
reducing it, so we're spending billions of dollars to reduce 
something that's already 30 percent below what they say is 
safe.
    Mr. Rohrabacher. So at some point where if you have a 
problem and at some point you come to a position where it is no 
longer cost-effective to do that, to have that activity, and 
while we have to admit that from the time when I was in high 
school until now when the pollution levels are lower, that 
maybe that was very cost-effective and many of the things that 
the good doctor is telling us about has resulted from that but 
maybe we now have reached a point here it's so costly that it's 
counterproductive, and on our side of the aisle at least, we 
believe that entrepreneurs and manufacturers, when you actually 
put them in contest with the bureaucracy, they usually lose, 
and bureaucracy--where manufacturers can give us good products 
to use, usually bureaucracy is able to turn pure energy into 
solid waste, and that's about all.
    Chairman Smith. Thank you, Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you, Mr. Chairman.
    Chairman Smith. The gentlewoman from Maryland, Ms. Edwards, 
is recognized.
    Ms. Edwards. Thank you very much, Mr. Chairman, and thank 
you to the witnesses this morning.
    I just want to make sure that we really understand, because 
I think sometimes there are quite overstatements in these 
hearings, and so I just want to clarify from the EPA that the 
Clean Water Rule does not regulate most ditches. In fact, the 
text of the rule says, and I quote, ``The following are not 
waters of the United States. The following ditches. A. Ditches 
with ephemeral flow that are not relocated tributary or 
excavated in a tributary. B. Ditches with intermittent flow 
that are not relocated tributary excavated in a tributary or 
drain wetlands. And C. Ditches that do not flow either directly 
or through another water into a traditional navigable water, 
interstate water, or territorial seas.''
    And so let's not overstate the regulation of so-called 
ditches. I've heard that so many times and it is completely 
inaccurate.
    Furthermore, the rule doesn't protect any types of waters 
that have not historically been covered by the Clean Water Act. 
Any new requirements for agriculture, in fact, all of the 
agriculture that was exempt before is exempt now under the 
rule, interfere with or change property rights, regulate most 
ditches, as I said, change policy on irrigation or water 
transfers, address land use, cover erosional features such as 
gullies, rills, and non-wetlands swales, and include 
groundwater, shallow subsurface flow, and tidal drains. Those 
are things that the rule does not do, and so we should be 
careful about those overstatements.
    Mr. Chairman, I know also a number of my colleagues on the 
other side also deny that climate change is happening or at 
least that humans are causing it. We've already heard that this 
morning and have adamantly opposed the Obama Administration's 
efforts to lower the nation's carbon emissions. Fortunately, 
according to a recent poll by the Yale Project on Climate 
Change Communication, the majority of Republican voters 
actually support climate action to reduce carbon pollution. 
Additionally, a majority of moderate Republicans support 
setting limits on carbon emissions from coal-fired power 
plants. This poll also shows that not all Republican voters 
oppose EPA's Clean Power Plan.
    And so Mr. Chairman, I'd ask unanimous consent to enter 
these two charts from the Yale Project into the record.
    Chairman Smith. Without objection, that'll be made a part 
of the record.
    [The information appears in Appendix II]
    Ms. Edwards. Thank you.
    I also want to enter into the record a survey by Hart 
Research Associates that actually says that voters in fact 
support the Clean Water Rule and not just that, but an 
overwhelming number of voters trust the EPA and the U.S. Army 
Corps of Engineers to do that and not Congress. I think that we 
should listen to the public.
    Chairman Smith. Without objection--and by the way, I'm 
looking at the poll that you're referring to. The wonder is 
that the answers were not----
    Ms. Edwards. Mr. Chairman, that's----
    Chairman Smith. --100 percent, given the way the questions 
were worded.
    Ms. Edwards. That's my time----
    Chairman Smith. Who's opposed to clean water?
    Ms. Edwards. Are you entering that into the record?
    Chairman Smith. It will be made----
    [The information appears in Appendix II]
    Ms. Edwards. And I'd ask for the remainder of my time to be 
added back to the clock.
    Chairman Smith. I'll give you ten more seconds.
    Ms. Edwards. Thank you.
    Mr. Chairman, I'd also like to add into the record, as 
we've seen this morning again, that our industry 
representatives here make the argument that the cost of 
complying with regulations will ``kill the economy and jobs.'' 
But this argument has been proven false over and over again. 
Again, I have a facts sheet from the Pew Charitable Trust 
describing industry's long history of overestimating the cost 
of regulations. According to Pew, compliance costs have been 
less and benefits greater than industry predictions and 
regulation typically poses little challenge to economic 
competitiveness. The fact sheet goes on to outline a number of 
very specific examples of this pattern of the overexaggeration 
from acid rain and airbags to seat belts and catalytic 
converters.
    For example, chemical production plants predicted that 
controlling benzene emissions would cost $350,000 per plant. 
But the chemical plants ended up actually developing a process 
that substituted other chemicals for benzene and virtually 
eliminated control costs. In this instance, as in a number of 
instances, regulation actually drove the kind of innovation, 
Mr. Chairman, that you pointed to.
    I'd ask unanimous consent to enter these facts sheets from 
the Pew Charitable Trust into the record.
    Chairman Smith. Without objection.
    [The information appears in Appendix II]
    Ms. Edwards. Thank you, Mr. Chairman.
    I just want to finish by saying we've had so many of these 
hearings about regulation, and I would suggest that we'd allow 
the rule to go into effect and we don't have any predictions at 
all about what the outcome will be if they are challenged in 
court, but after--especially with the Clean Water Rule. After 
thousands and thousands of comments that have been reviewed, 
changes that were made from the rule on its introduction to the 
final proposed rule, hundreds of witnesses testifying, it's 
time that we move after a decade and a half of twiddling around 
and not knowing what to do and what the rules are to a point 
where we have some certainty that industry has certainty, that 
the public has certainty and that all of us get the clean air 
and the clean water that we deserve.
    Thank you, and I yield.
    Chairman Smith. Thank you, Ms. Edwards.
    The gentleman from California, Mr. Knight, is recognized 
for questions.
    Mr. Knight. Thank you, Mr. Chair.
    I would go on a line of questioning of kind of what we've 
done in California. I think that my statement would be that 
California has probably gone about this as stringent as any 
state in the union as far as our clean air, clean water, clean 
energy, clean everything that we have done, not just of course 
on EPA standards because everyone has to go along with that but 
what the legislature has done in California to go about this.
    So I guess my questions would be, and we can start with Mr. 
Kerr, that we have seen a loss in the last ten years of about 
80,000 manufacturing jobs in California due in part to what we 
have done in California, not just by our regulations but what 
we have mandated on business and how they can interact with the 
air and the water in California. Do you think that--and I think 
Mr. Rohrabacher was going down the right line of questioning. 
Do you think we have hit a line in the road where if we go too 
far, then we're not going to just continue to hemorrhage jobs 
but America and many parts of America will be so uncompetitive 
that businesses' only choice will be to look elsewhere.
    Mr. Kerr. Thank you, Congressman. With regard to the 
question, I have to say I'm not an air pollution consultant so 
I'll just yield my time to the others here who could speak to 
that.
    Mr. Kovacs. Congressman, I think you're going to be 
surprised with my answer. I think we don't know, and the reason 
why I say that is part of--when Congress first legislated these 
acts in the 1970s, you asked for very specific information. 
There was a debate on the Floor that was really fascinating, 
and one of the members--one of the Democrats got up and said, 
you know, I'm tired of this issue being fought in this way--
this is the end of the world or this is going to protect the 
world. They specifically said we know we're going to impact 
jobs, we know that, but Congress has a major role and we need 
information to come back to us from the Agency. You never got 
that.
    And in the 1980s and the 1990s, Congress again said we're 
going to pass the Information Quality Act, and that said is, 
the Agency has to take information from the public and the 
public has a right to challenge the Agency's information. The 
agencies, not just EPA, have refused to do that. You've asked 
for input under the unfunded mandates and the impact on states. 
States implement 92 percent of all the environmental laws, and 
EPA does not look at unfunded mandates. It generally dismisses 
and says there's no impact on the states. Even for ozone, EPA 
says there's no impact on the states. There's no unfunded 
mandate for a rule that they say is going to cost approximately 
$90 billion a year.
    So you don't know, and one of the things that's really 
needed in this issue is, we fought over the issue for too long. 
We need the information on data quality to work. We need the 
information on 321(a) in the Clean Air Act to tell you how it's 
impacted jobs because regulations aren't just something that 
happens to the whole country. Regulations are something that 
happens to an industry. So if an industry is hit and it's in 
Wisconsin or Idaho or wherever, that industry and that 
community's affected. There may be jobs created elsewhere but 
you still have an industry and a community that's been hurt, 
and you don't have that information and EPA has never given it 
to you.
    Mr. Knight. Thank you very much.
    Mr. Eisenberg. So I'll try to give you a very simple answer 
specifically for manufacturing. You're absolutely right in 
terms of manufacturers. We use about a third of the energy in 
this country. We are extremely energy-intensive. For some 
manufacturers, it is our single largest cost. There is a reason 
why a lot of the new manufacturing that is coming online is 
going to states where energy is cheap. If you are a state that 
does not have cheap energy, that is a very big difference maker 
for a lot of folks in industries that are highly energy 
intensive.
    That is not the driver; it is a driver of why manufacturers 
go into places that may not be California, which absolutely has 
extraordinarily high energy costs.
    Dr. Paulson. Mr. Knight, we know very well that air 
pollution is not confined by political borders. We know this 
very well in the United States, but it is true internationally 
as well, and we can only do what we can do in the United States 
to protect our own citizens, and Congress gave the 
Environmental Protection Agency a responsibility to protect the 
health of human beings in our country, and that is what they 
are attempting to do by lowering these pollutant limits.
    Mr. Knight. Absolutely, Dr. Paulson, and I agree. I just 
think that we possibly--and I wouldn't say ``possibly.'' I 
would say we have achieved a level that is very healthy in this 
country, and going further, we will be hurting this country and 
its ability to economically be a factor.
    And I will say what we have done in California has worked 
very well. We have six of the dirtiest ten cities in this 
country.
    Thank you, Mr. Chair.
    Chairman Smith. Thank you, Mr. Knight.
    The gentlewoman from Oregon, Ms. Bonamici, is recognized 
for questions.
    Ms. Bonamici. Thank you very much, Mr. Chairman, and I'm 
going to follow up on the discussion we were just having, and 
Mr. Chairman, you mentioned this in your opening statement too 
about diminishing the competitiveness of U.S. businesses, and 
we hear these claims that the Clean Power Plan or other 
environmental laws are going to kill jobs, hurt the economy. 
There's a suggestion that our businesses will go overseas.
    I just read this morning that Ikea just pledged a billion 
euros, which is $1.13 billion, to help slow climate change 
through renewable energy and steps to help poor nations cope 
with climate change. They said this is good for customers, good 
for the climate, and good for their company. So they found that 
customers actually value environmental responsibility, and I 
suggest that we look at that and what our customers value.
    And I also want to talk about how the numbers speak for 
themselves. The Union of Concerned Scientists just released an 
analysis that shows that most states are already making 
significant progress toward cutting carbon emissions from power 
plants, and according to that analysis, 31 states including my 
State of Oregon are already more than halfway toward meeting 
the 2020 benchmarks set out by the EPA under the Clean Power 
Plan. All but four states have already made decisions that will 
help cut their power plant emissions. Fourteen states including 
California, Kentucky, Ohio and New York are already ahead of 
the emission rate reduction trajectory because of current 
carbon-cutting decisions and actions.
    I find this very encouraging and again highlights how the 
environmental regulations can bring about positive results. Mr. 
Chairman, I ask unanimous consent to enter this analysis into 
the record.
    Chairman Smith. Without objection.
    [The information appears in Appendix II]
    Ms. Bonamici. Thank you.
    And Mr. Eisenberg, I was glad to hear you say that the 
National Association of Manufacturers believes in the mission 
of the EPA. You say that plants have the best available 
pollution control technologies, and as we were just discussing, 
history shows that regulation drives innovation. Without the 
regulation, those who are working on new technologies don't 
have a market, but with the regulation, they do, and we have 
found that new technologies are developed to meet the needs of 
regulation.
    So I want to ask, Dr. Paulson, you know, many are arguing 
that it's not just worth it, that costs are too high, and as 
you've noted, there's evidence showing that on balance, jobs 
are created, the economy expands following the passage of major 
environmental reforms. For example, in a report to Congress on 
the costs and benefits of federal regulations, OMB estimated 
that major rules promulgated by the EPA in the decade between 
2003 and 2013 had benefits between $165 billion to $850 billion 
compared to costs of $38 to $46 billion. That is a pretty 
significant return on investment.
    So Dr. Paulson, alternatively, we've talked about the costs 
of ignoring our changing climate and the public health risks 
related to increases in global temperatures, and I note that 
the death toll in India is now up to 2,500 people. Tragic over 
there.
    Climate change also has the potential to exacerbate 
existing health conditions as you've discussed such as asthma. 
Now, we've had hearings in this Committee before where we've 
talked about how the EPA is not allowed to consider the costs 
when they, for example, set the standard under the Clean Air 
Act, the ozone standard. That's sort of compared to the idea 
that you're going to make a medical diagnosis depending on how 
much the treatment's going to cost.
    So can you comment on the importance of separating the 
costs associated with attaining an ozone standard from the 
assessment of what level is appropriate to protect public 
health?
    Dr. Paulson. Health needs to be a priority, and as a 
physician, I am sworn and I took an oath long ago and still 
very much believe that oath I took to protect the health of the 
individuals that I work with, and for me, that's the kids but 
it's also their families. I cannot ethically take the 
consideration of cost into account. I certainly work with the 
families to try and make sure that they have or can access the 
financial resources for whatever it is that I or my colleagues 
may be recommending, but my responsibility is to do what is in 
the best interest of children.
    Ms. Bonamici. Thank you. I'm going to try to get one more 
quick question in to you, Dr. Paulson.
    There was a study by Syracuse and Harvard University about 
the major co-pollutants that could be reduced. So can you talk 
about some of the health co-benefits that are likely to result 
from these kinds of carbon regulations?
    Dr. Paulson. Yes. I'm a pediatrician, but let me mention 
something particular to adults, and that relates to particulate 
pollution. We know that when particle levels go up in the air, 
the next day more people are going to be admitted to the 
hospital with heart attack and strokes and die from those heart 
attacks and strokes as a result of that exposure to the 
particulates. So that's just one example.
    Another example is that we know that children grow up in 
areas of the country that have higher air pollution when they 
are finished growing, 18, 20, their lungs are smaller than kids 
who grow up in a less polluted area, and that raises the 
concern of, are these kids then set up for what we think of as 
adult-onset pulmonary disease but actually it goes back to the 
pollution that they were exposed to as children.
    Ms. Bonamici. Thank you very much.
    I see my time is expired. I yield back. Thank you, Mr. 
Chairman.
    Chairman Smith. Thank you, Ms. Bonamici.
    And I'd like unanimous consent to put in the record a New 
York Times article just a few days ago that reveals that the 
EPA solicited positive comments from outside organizations, 
perhaps in violation of lobbying laws. Without objection.
    [The information appears Appendix II]
    Chairman Smith. And the gentleman from Texas, Mr. Babin, is 
recognized.
    Mr. Babin. Yes, sir. Thank you very much, Mr. Chairman, and 
thank you to all you witnesses for being here.
    The EPA Administrator, Ms. McCarthy, Gina McCarthy, wrote 
an op-ed recently saying that the Agency's air standards 
attract new business, new investment and new jobs. I don't 
think that Administrator McCarthy is living in the same world 
as the rest of us.
    I represent the 36th District in the State of Texas, and we 
have one of the largest numbers of petrochemical plants and 
refineries in the country. Most of my district is not in 
attainment with these new regulations. I will also add that 
neither is Yellowstone National Park in attainment with these 
new regulations.
    There is no concrete evidence to support the lower standard 
for ozone that the EPA is calling for, not to mention the cost 
that is associated with it, given the strenuous economic times. 
I would now ask for a slid be placed on the screen to describe 
my district, the State of Texas, District 36. We have the 
largest manufacturing industry in the State of Texas in the 
chemical and refining industry. We directly employ or 
indirectly employ over 10,000 people down there in this portion 
of my district, and we pay $934 million in wages in this 
district with an average wage of nearly $100,000.
    These proposed new rules promise to be the most expensive 
regulations in the history of the United States, likely costing 
us thousands of jobs and prolonging a recession. This is 
bureaucratic overreach in the extreme.
    I would ask Mr. Kovacs and Mr. Eisenberg whether this is 
worth putting all of this at risk with these new regulations. 
Mr. Kovacs?
    Mr. Kovacs. Well, I think in terms of ozone, we've really 
had probably 30 years of what you're describing. I mean, look, 
going back to the early 1980s, many sectors of the economy--
steel, foundries, carpets, furniture--you pick it, because 
nonattainment areas could not get the credits to stay 
operating, were forced either, one, to other areas of the 
country or two, they were forced overseas. And so that's been 
going on for quite some time.
    Again, I come back to the fact that these are issues that 
really should be resolved, and let me just give you one example 
as to how hard it is to resolve it. We've talked a lot today 
about science and transparency, and we've challenged EPA for 
years, but in 1999, when the Pope and Daugherty study was first 
issued, I wrote a FOIA to EPA and was denied everything. So all 
the scientific basis for a lot of what they're talking about in 
PM and ozone has been denied to the public, and the only people 
who can have access to it are EPA and their researchers. 
Chairman Smith issued a subpoena last year and couldn't get the 
information.
    One of the things that we need to have in this country is 
complete and total transparency. The Agency needs to be able to 
put its models, its science in the record. It needs to 
implement the environmental--or the Informational Quality Act. 
They need to accept information from the public and they need 
to sit down and talk about it. These--if the data's there, then 
they shouldn't be afraid of it. If it's not there then they 
should be afraid of it.
    Mr. Babin. Which is what the Secret Science Act is all 
about we're proposing.
    Mr. Eisenberg.
    Mr. Eisenberg. Thank you. To your question of whether or 
not we believe that this is the right thing for manufacturing, 
no, we don't need them to change the ozone standard if you want 
to have a manufacturing sector. I mean, that is the simple and 
straight answer, and this is not about health for us. We are 
getting the benefits of continued reductions between the 
existing ozone standard and the three dozen other regulations 
that reduce NOX emissions. We're going to be reducing ozone 
precursors by 36 percent over the next decade, so we're going 
to get there. We're going to actually be doing what we need to 
do. The only difference between that and getting--and moving 
the chains now is that you impose a significant amount of 
struggle for manufacturers to try to expand or build things to 
get basically the same result.
    So we're going to get there anyway. We can just get there 
without all of the pain that we would have to face if you don't 
move the chains on us.
    Mr. Babin. Thank you very much, and I yield back my time, 
Mr. Chairman. Thank you.
    Chairman Smith. Thank you, Mr. Beyer--thank you, Mr. Babin.
    Mr. Beyer, the gentleman from Virginia, is recognized.
    Mr. Beyer. Thank you, Mr. Chairman.
    Mr. Chairman, Mr. Eisenberg and Mr. Kovacs both cited a 
study prepared on behalf of NAM in their written testimonies, 
and this study estimates the compliance costs associated with 
an ozone standard of 65 parts per billion.
    I have an article from Bloomberg News that discusses NAM's 
study and a number of groups criticize the study and its 
methodology, saying that the study doesn't include an estimate 
of the anticipated benefits of the 65 standard, it 
overestimates compliance costs, and that it makes ``unrealistic 
assumptions.'' For example, the use of the Cash for Clunkers 
program, with which I'm very familiar, is used as the basis for 
estimating the cost of unknown pollution controls. This is 
described as ``insane and unmoored from economic reality.''
    Also, it's important to understand well what the new 
standards might cost and the savings that might generate. 
Please allow me to point out that the 2001 Supreme Court, the 
same court that put George W. Bush in the White House in Bush 
v. Gore ruled that the Clean Air Act prohibits the EPA from 
considering the cost of compliance with setting National 
Ambient Air Quality Standards.
    So Mr. Chairman, I ask unanimous consent to have this 
article entered into the record.
    Chairman Smith. Without objection.
    [The information appears Appendix II]
    Mr. Beyer. Thank you.
    Dr. Paulson, thank you for being here. The Committee 
received testimony from Dr. Mary Rice on the health impacts of 
ozone, and she indicated that the research has only grown 
stronger since the last time the EPA considered revising the 
current standard, and one area she highlighted was the new 
evidence between higher ozone levels and increased mortality.
    I grew up here in Washington, DC. There will be a number of 
times this coming summer when every TV station will be telling 
us all to stay inside because of high ozone levels. As I 
understand it, the Integrated Science Assessment for Ozone 
states that ``The current body of evidence indicates there's a 
likely causal relationship between short-term exposures to 
ozone and total mortality.'' Can you talk about this evidence?
    Dr. Paulson. Yes. Ozone causes inflammation, irritation, 
particularly in the lungs. I think an analogy that everybody I 
hope can understand is sunburn. Sunburn causes inflammation and 
irritation of the skin, and likewise, ozone does that but it 
does that in the breathing tubes in the lungs, and acutely 
that--if it's a one-time thing, if it's a few-times thing, that 
heals up and goes away just like a sunburn heals up and goes 
away. But on a chronic basis, that leads to permanent changes 
in the breathing tubes in the lung so that they no longer 
function the way they need to function to remove other 
pollutants from the lung. They become scarred. They don't 
transfer oxygen and carbon dioxide the way they should. So 
overall, pulmonary function declines and that impacts on a 
whole range of adult health issues.
    So I think that we need to bring the ozone level down. 
Levels below 60 are much safer than levels above 60, and we 
should have a standard of 60 in the United States.
    Mr. Beyer. Thank you, Dr. Paulson, very much.
    Mr. Kovacs, thank you for being here representing the 
Chamber. I was President of the Falls Church Chamber, on the 
board of Fairfax Chamber. My wife used to work for you guys at 
the U.S. Chamber.
    But I'm having trouble reconciling a number of facts. On 
the one hand, EPA's promulgated regulations in clean air, clean 
water, greenhouse gases, and all allegedly are job killers and 
profit killers. On the other hand, corporate profits are at an 
all-time high, the Dow is over 18,000 last night, 62 straight 
months of job creation, the fastest and best recovery of any 
Western economy since the Great Recession. In fact, Governor 
McCall from Virginia has now created private-sector jobs, not 
him but our economy in Virginia has created more private-sector 
jobs in these first 17 months than any government in Virginia 
history, any governor.
    In my business when we receive a new regulation, we adapt 
and we figure out the most effective way to implement and 
respond to the new rule and then we figure out how to make 
money off of it. To Mr. Knight, who I guess is gone, my 
California dealer friends are the most profitable dealers in 
the country despite their regulations. I would love to be a 
California car dealer.
    My question is, don't you give too little credit to the 
business community, to their imagination, to their operational 
excellence? Can't we have business and job success and better 
health at the same time?
    Mr. Kovacs. Well, thank you for the question. First of all, 
I give tremendous credit to the business community. They are 
extraordinarily innovative, and I am absolutely thrilled that 
your wife worked with the Chamber and you were with the Falls 
Church Chamber.
    Now, having said that, we at the Chamber, we don't really--
when we talk about job impact and regulatory impact, we talk 
about a system that the United States constantly creates jobs 
and we're constantly creating more jobs and hope we will even 
do better in the future, but when a regulation comes out, it 
actually affects specific industries. When ozone comes out, for 
example, it's going to--initially we have the history of it 
coming out and literally knocking out, let's just say 
California or anyplace else--chemical manufacturing in certain 
areas, oil manufacturing, paint and coatings. And what happens 
is, those people truly are out of jobs, and when you look at 
the fact that if you're over 55 and you're out of a job, your 
chances are only about 25 percent of having a job the rest of 
your life, and what we're trying to impress upon them is, yes, 
it's easy to say wow, we have a lot of great technology 
companies and they're creating a lot of jobs. What's happening 
is, the regulations are putting people and communities out of 
business, and that should be just as much of a concern because 
the health impacts when a community goes out of business is 
drug abuse, heart attacks, hypertension, and all we're trying 
to say is, let's get the facts on the table and let's have an 
honest discussion. Let's put the health-related effects out, 
let's put the job-related effects out. This should not be a 
problem. This should be a problem that Congress can solve. This 
shouldn't be a problem we fight over. That's been my testimony.
    Chairman Smith. Thank you, Mr. Beyer, and the gentleman 
from Ohio, Mr. Johnson, is recognized.
    Mr. Johnson of Ohio. Thank you, Mr. Chairman.
    You know, the discussion that we're having today about the 
EPA's overreach, it's a continuing dialog, and it's disturbing.
    I went to Europe just a few weeks ago and talked with many 
of our friends and allies in Europe about energy policy, and I 
learned something there that I wasn't expecting to learn. Over 
the last 20 years, they have been advancing beyond the United 
States in shutting down coal-fired power and investing in 
renewable energies and those kinds of things, reducing the 
amount of coal that they had in their energy portfolio. When we 
talked energy policy with many of our friends there, we learned 
that a lot of those countries, some of those countries are 
increasing their mix of coal-fired power in their energy 
profiles, and when we asked them why, they said our ratepayers 
are simply unwilling to bear the burden of the high cost of 
providing energy to their homes and to their businesses. Europe 
has learned this lesson, that coal-fired power is still the 
most reliable, affordable energy on the planet.
    Do we need to keep our air clean? Absolutely we do. Do we 
need to keep our water clean? Absolutely we do. Dr. Paulson, 
you made some impassioned comments about the health 
implications. Not everybody, though, Dr. Paulson, agrees with 
some of the statistics that you said. For example, today the 
average life expectancy in the United States is 80 years, one 
of the highest in the world. There's a New York Times article 
that came out October 8, 2014, that said a child born in 
America today will live longer than at any other time in 
history, and these are scientists saying this. That report came 
from the Centers for Disease Control.
    In the USA Today on April 9, 2015, it cites an EPA report 
says the EPA reports that are our air quality has substantially 
improved, aggregate emissions of common pollutants have 
decreased 62 percent between 1980 and 2015. It goes on to say 
it is unlikely that cleaner air is causing an increase in 
asthma.
    So, you know, what I have to wrestle with, and I think what 
the American people are wrestling with is, when is enough 
enough? When does it become--when does the scale tip towards 
irresponsibility to continue trying to cripple the American 
economy and eliminate opportunities for millions of Americans 
just to move the CO2 emission needle a smidgen?
    Folks, I submit that we have reached that breaking point. 
We've passed that breaking point. There are serious legal 
questions to the EPA's jurisdiction and their legal basis for 
their Clean Power Plan, and I think it's something that's got 
to be seriously considered by this body and by the American 
people.
    Let me get to some specific questions. Mr. Kovacs and Mr. 
Eisenberg, by the year 2030, the EPA believes their proposed 
Clean Power Plan will allow the United States to reduce carbon 
emissions from the power sector by 30 percent or below the 2005 
levels, a roughly 17 percent cut from 2013 levels.
    To achieve these reductions, EPA calculated a specific 
emissions rate for each state by totaling the CO2 
emissions produced by each State's electricity-generating units 
and dividing it from the total amount of electricity generated 
by the EGUs. Then the EPA proposed emissions reduction targets 
based on the carbon intensity of each state's electricity 
sector.
    My question to you gentlemen, do you believe the proposed 
performance standards are achievable? Mr. Kovacs?
    Mr. Kovacs. I think the easiest way to address your 
question is to start off with one of your conclusions where 
``enough is enough,'' and I think at that point in time, I 
don't think you can get to dealing with the present regulatory 
system without a change in the Administrative Procedure Act, 
and Chairman Smith is very familiar with this. But right now 
you can't get the kind of data into the system that you need. 
You can't get the Agency to participate and you can't get the 
Agency to look and talk to the public the way it needs to. 
Until you can get the kind of early-on input where people say 
here's what we think and the Agency says here's what we have, 
and you begin the discussion 90 days before rule, and then you 
begin to have the Information Quality Act put into the system 
where people can actually say oh, this is the data.
    You have--Congress has to find some way to get the process 
to work. There is nothing with the law that court decisions 
have come down on deference and with the way the agencies 
ignore Congress. Congress has to make a fundamental change in 
how rules are made.
    And the last point, because I don't want to just 
filibuster, but the last point is, there are 4,000 rules coming 
out every year. Three thousand seven hundred really work. 
Ninety-five percent of the system works. It's -- we're talking 
two or three or four major rules a year, and most of those 
rules come out of EPA. So when you look at the whole regulatory 
system, you don't need to throw it all away, but for those 
major rules that are over a billion dollars that fundamentally 
change society, you have to have a new way of approaching it.
    Mr. Johnson of Ohio. My time's expired, but Mr. Eisenberg, 
would you want to respond to that?
    Mr. Eisenberg. Sure. I mean, certainly in the case of 
ozone, these rules are not achievable, and it's actually a good 
opportunity to explain what our studies had. Our study actually 
had the same methodology as EPA's study. I mean, it was exactly 
the same. As far as known controls, we used the same stuff, 
same numbers because we believed them. Where we differ with EPA 
is on the 65 percent of controls that you need to comply that 
are unknown controls. You don't have to--it's not--you still 
have to do it. We just had to figure out how to do it at that 
point. I would love to be able to tell you we can innovate, and 
maybe we will, and if we don't----
    Chairman Smith. Mr. Eisenberg, thank you, and Mr. Johnson 
as well.
    The gentleman from New York, Mr. Tonko, is recognized.
    Mr. Tonko. Thank you, Mr. Chair, and thank you to our 
witnesses.
    Mr. Chair, in his testimony, Mr. Eisenberg cites a study, a 
study released by the National Association of Manufacturers 
last September, I believe. It's titled ``The Cost of Federal 
Regulation to the United States Economy, Manufacturing and 
Small Business.'' According to the study, regulations cost the 
economy $2 trillion in 2012. Now, fortunately, a review of that 
study was done. The results of that study indicate clearly that 
that number is not accurate and that number is based on a 
flawed analysis.
    I have here in front of me a review of the National 
Association of Manufacturers study by Professor Kolstad from 
Stanford University. Professor Kolstad in this study was asked 
to grade it and gave it a C minus. In his review of the study, 
he states that the--and I quote--``study reads as an advocacy 
document. The authors focus only on the costs of regulation, 
ignoring the benefits. The authors also don't follow the 
standard in academic practice of discussing uncertainties in 
their analyses and their results are highly uncertain. All of 
these factors make it difficult to determine the quality of the 
responses and lead to the conclusions that the results are 
unreliable.''
    Mr. chair, I ask that--by unanimous consent that the review 
of the National Association of Manufacturers' study be entered 
into the record.
    Chairman Smith. Without objection.
    [The information appears Appendix II]
    Mr. Tonko. Dr. Paulson, as you are well aware, beyond the 
economic costs associated with climate change, there are very 
serious public health risks related to increases in the global 
temperature, for example, longer heat waves, changes in water 
and air quality, and foodborne and insectborne disease. Climate 
change also has the potential to exacerbate existing health 
conditions such as asthma and adversely impact vulnerable 
populations like children that you serve and the elderly.
    What kinds of ongoing health risks are expected if the 
current climate trends continue, and do these risks, in your 
opinion, vary by region of our country?
    Dr. Paulson. Mr. Tonko, yes, they do vary by region. We are 
already seeing significant impacts in terms of injuries and 
deaths among native populations in Alaska because of changes in 
the ice and other factors there. We will and are seeing in the 
rest of the country--we will see more problems with asthma, as 
you have mentioned. We have seen over the last 5 to ten years a 
change in the range, the number of counties and states that--
where Lyme disease is a problem and as the climate continues to 
change, we will see continued changes in that disease and other 
diseases such as we may begin to see indigenous malaria here in 
the United States. We will start to have problems from sea-
level rise. We are--I'm a resident of Virginia and I live in 
Mr. Beyer's district, so we don't quite see that so much in 
Alexandria but certainly in the Norfolk region, the Hampton 
Roads region. We are seeing that, and that will continue and 
impact on other parts of the country with sea-level rise. We 
lose quality of water for agriculture and for drinking. So 
there's going to be a vast array of impacts, it will vary by 
part of the country, and it will disproportionately--and these 
impacts will disproportionately fall on children and other 
vulnerable populations.
    Mr. Tonko. Right, and we've also seen some of the 
proposals, the expected impacts on coastal areas of New York 
State.
    How can implementing the Clean Power Plan help states 
address these public health impacts of climate change?
    Dr. Paulson. First and foremost, all reductions in CO2 
production will slow the rate of temperature change associated 
with excess CO2, and if we can get CO2 
levels down in the long run, while some of these issues will 
continue to occur for a while, we can stop the progress of 
climate change in the long run.
    I think that again in the long run, we need to be very 
concerned about food availability and quality of food that's 
going to be impacted from higher temperatures. People are 
literally--and we're seeing this unfortunately now in India, 
people are literally not going to be able to go out and plant 
and harvest when the temperatures are extremely high. The 
plants will not grow and produce the bountiful resources that 
we require and derive from them. The quality of the food may be 
decreased. So there are a lot of impacts that we're going to 
have to deal with.
    Mr. Tonko. I thank you, and with that, Mr. Chair, I yield 
back.
    Chairman Smith. Thank you, Mr. Tonko, and the gentleman 
from Texas, Mr. Neugebauer, is recognized--oh, I'm sorry. I 
skipped over Mr. Loudermilk from Georgia.
    Mr. Loudermilk. Thank you, Mr. Chairman.
    One of the issues that we run into I've found out in my 
brief time here in Congress is getting down to the true facts, 
and part of getting the true facts in science is that getting 
away from presenting facts that justify an end but making your 
end justified off the facts that are before you.
    I live ten miles from one of the largest coal-fired plants 
in the nation, and Mr. Chairman, to your point earlier, this 
plant, you really can't see the smoke when it comes out, but 
what comes out is white but it's steam that's used to cool 
that.
    But Dr. Paulson, you brought up something that was 
concerning to me because I live ten miles from one of the 
largest coal-fired plants in the nation. My one-year-old 
granddaughter lives about 11 miles from it. And you brought up 
in your statement, you said that outdoor air pollution is 
linked to respiratory problems in children including decreased 
lung function, coughing, wheezing, more frequent respiratory 
illnesses and so on, and that is true. A quick check--you are 
absolutely right. It is linked to air pollution. But Dr. 
Paulson, can you tell me what is the greatest contributing 
factor to asthma worldwide according to the World Health 
Organization?
    Dr. Paulson. I don't know exactly what the World Health 
Organization has said is the greatest contributing factor. 
Genetics is certainly an issue. Smoking is clearly issue. 
That's another form of----
    Mr. Loudermilk. Do you know where air pollution ranks?
    Dr. Paulson. No, sir, I don't.
    Mr. Loudermilk. Last. The greatest contributor to asthma--
and I was surprised to find out that asthma is one of the top 
causes of deaths in children worldwide. I was very shocked. The 
top seven contributors are all related to poor sanitary 
conditions in the home which are linked to poverty. It is 
greatest in the most impoverished nations in the world. Number 
seven is outdoor allergens, which if somebody could do 
something about pollen in Georgia, I'd really appreciate it, 
but the only thing you can do is cut down trees, and we've been 
stopped from doing that as well. Tobacco smoke is number eight. 
Number nine is chemical irritants in the workplace, which again 
goes back to industrialized nations that don't have the 
regulations that we have in place. Number ten and last is air 
pollution.
    I live, as I said, ten miles from the largest coal-fired 
plant in the nation, but it happens to be the cleanest, one of 
the cleanest coal-fired plants in the nation. Georgia Power, 
who runs that plant, has spent twice as much money in cleaning 
up the emissions from that plant as it cost to build the plant 
when it was first constructed.
    But a few years ago, because of this Administration's 
regulations, Georgia Power has to shut down three coal-fired 
plants, which cost 700 jobs. Now, I don't have anything to 
enter into the record, Mr. Chairman, other than what I've seen 
with my own eyes. If you've ever gone into an area, especially 
in our part of Georgia, to where a plant has shut down and a 
lot of cases it's because they couldn't afford to operate 
because of the regulatory environment in this nation, you go 
into those areas where those workers, which are usually factory 
workers who are skilled in that particular job, have no other 
job to go to. When you go in those towns, you start seeing 
these type of issues. You see poor sanitary conditions because 
they're unemployed or they're underemployed or they have no job 
at all. They're doing what they can to scrape by, and we start 
seeing an increase in poverty.
    So my question is, are we throwing out the baby with the 
bathwater because we're focusing on what is the least 
contributing factor toward a disease which would result in a 
greater contributing factor as more Americans lose their jobs, 
as more jobs go overseas? In fact, the President signed an 
agreement with China that they would promise to start limiting 
their emissions by 2030 while we're lowering our emissions 
pushing more jobs overseas.
    So my question to the panel is, am I off base? Are we going 
to lose more jobs in this nation because of the direction we're 
going, which will result in a problem greater than what we have 
right now? Mr. Eisenberg, you're in the manufacturing arena, 
and that's where we've seen the greatest impact?
    Mr. Eisenberg. Look, understand what I'm saying today. In 
almost every case, we're comfortable with regulation but we 
have regulations and those regulations are working, and it's 
really about figuring out where that sweet spot is between 
having a regulation that protects the environment and health 
and making sure that we can actually do our jobs. In the cases 
that we've cited today, they've gone a step too far. We're 
asking them to take a step back towards normalcy.
    Mr. Loudermilk. With that, Mr. Chairman, I see I'm out of 
time. I would love to continue this on but I'll yield back.
    Chairman Smith. Thank you, Mr. Loudermilk. I appreciate 
that.
    The gentleman from Texas, Mr. Neugebauer, is recognized for 
questions.
    Mr. Neugebauer. Thank you, Mr. Chairman.
    Mr. Kerr, you know, since 1986, EPA and the Corps has only 
had jurisdiction over the wetlands adjacent to other 
jurisdictional waters. Can you explain in detail the rule's new 
concept of adjacent waters?
    Mr. Kerr. Yes.
    Mr. Neugebauer. I'm over here in the cheap seats.
    Mr. Kerr. Thank you, Congressman. Yeah, prior to the new 
rule, through court precedent, the Corps regulated wetlands 
that were adjacent to waters that themselves were not wetlands. 
What does that mean? If you go to a major river and there's a 
large wetland next to the river, there's a dike built through 
that wetland, the wetland on the other side of the dike, the 
landward side was regulated. But if there was a small pond that 
had been abandoned because the farmer stopped working a certain 
area or he moved hogs off of that area and that pond was in a 
field that became wooded and he didn't use it for more than 
five years, the Corps would typically consider that an isolated 
water, and that's the way it's been working up until May 27th 
with the new rule. Under the new rule, that pond can now be 
regulated as an adjacent water so it's a change in how they 
approach it.
    The other thing is that there's a site that I worked on 
with a development client where there were several small 
isolated wetlands. The Corps of Engineers back in the late 
1990s confirmed them to be isolated wetlands, and the 
Commonwealth of Virginia regulated those wetlands. Under 
today's rule, those wetlands would also be considered adjacent 
and under the jurisdiction of the federal government. So those 
are two ways that it's changed.
    Mr. Neugebauer. So to your knowledge, is there legal 
precedent for the agencies to establish jurisdiction over these 
waters?
    Mr. Kerr. The short answer is no. There is no court 
decision that required the Corps of Engineers to change how 
adjacency was determined, to my knowledge, and I've been doing 
it for 26 years.
    Mr. Neugebauer. So as a wetlands delineator, or can you 
describe how the new adjacent-waters definitions including the 
neighboring definition will change the way you make your 
jurisdictional determinations?
    Mr. Kerr. Yeah, those two examples are two clear examples. 
The third is the portion, much like manufacturers--I mean, 
there are certain parts of this rule that are understandable, 
they're relatively reasonable. The one issue with adjacency 
that gives me greatest concern is the criteria that says any 
water within 1,500 feet of a traditionally navigable water is 
by definition, by rule adjacent and therefore jurisdictional 
under the Clean Water Act. In the coastal areas--and I come 
from the coastal plain of Virginia--but this goes from Texas 
to, you know, the coast of New York, you are now extending this 
measuring stick out 1,500 feet, and anything that falls within 
that--and you measure 1,500 feet from the innermost limits of 
tidal waters, tidal creeks, tidal bays miles inland from the 
ocean, you extent this measuring stick 1,500 feet, and anything 
within that zone is jurisdictional as an adjacent water by 
rule. That's a dramatic change.
    Mr. Neugebauer. I want to get to talking about ditches, and 
I think one of the things that my agriculture community thinks, 
has concerns that by--those people that believe that EPA has 
exempted some of the ditches from their jurisdiction, or EPA is 
telling, I guess, the agriculture community that. Do you 
believe that's in fact true?
    Mr. Kerr. If I could give you just a little context for my 
opinion on that, our firm just recently completed a delineation 
that involved over 56,000 linear feet of ditches. So just 
around ten miles of ditches. We had to walk them all, and we 
asserted they were non-jurisdictional. It took about a year, I 
think, to get the confirmation that in fact they were non-
jurisdictional. Under today's rule, I can tell you, I can walk 
you to these ditches that are now jurisdictional. As has been 
said, there are two criteria about ditches that I think are 
fine, and they're the first two. The last one to me is the 
recapture provision, and in fact, I went through the entire 
preamble, 200 pages. I've read what I can find on it, and 
there's not a specific mention of how they arrived at the third 
criteria, and the issue with it is, that it says ditches that 
don't flow through another water are exempt. Ditches virtually 
by definition flow into a water of the United States, and we 
have an example where the water in the United States was a 
channelized stream, was eight feet below grade. There are some 
ditches three feet below grade that, you know, kind of like a 
waterfall discharge into this creek. The water never--you know, 
this ditch does not touch the bottom of that ditch. The water 
falls through the air about five feet, runs down the edge of 
the embankment when there's water. These are intermittent 
streams--or ditches. Those ditches would be regulated as a 
tributary of the United States under this rule. I am sure of 
it.
    Mr. Neugebauer. So there is still confusion out there and 
uncertainty when it comes to the ditches issue?
    Mr. Kerr. Yes, sir. If I could, one suggestion I would 
have, it seems to work in Virginia. I don't want to claim that 
it would work nationally. But I would like to see, as someone 
else here mentioned, an opportunity where the EPA gets a 
roundtable together, a technical advisory committee, and allows 
that technical advisory committee to provide direct input, and 
it would have conservation groups, industry, consultants, the 
entire gamut, work on an issue for--in Virginia it's up to 180 
days before a rule goes out for public comment. So you would 
still have public comment. I think 180 days is better than 90. 
I don't think--I think with these large regulatory issues, 
they're too complicated to do too quickly.
    Chairman Smith. Mr. Kerr, I think that's a good idea. Thank 
you. Thank you, Mr. Neugebauer.
    The gentleman from Texas, Mr. Weber, is recognized.
    Mr. Weber. Thank you.
    Mr. Kerr, you said earlier isolated wetlands were not 
regulated by the EPA according to a Supreme Court case. Can you 
give me the name of that case?
    Mr. Kerr. Yes, SWANCC.
    Mr. Weber. S-w-a-n-k?
    Mr. Kerr. S-W-A-N-C-C, I think, Southern Water -- Southern 
Waste Management Authority. It was a county in Chicago.
    Mr. Weber. Perfect. Thank you.
    Mr. Eisenberg, you said manufacturers use one-third of the 
energy in the United States. You know, I have five ports in 
Texas. We export a whole lot of things and we have a lot of 
petrochemical industry and oil and natural gas and on and on 
and on. When I speak to groups, I often say that the things 
that make America great are the things that America makes. How 
do we do that with a stable, reliable, affordable, dependable 
energy supply? Mr. Kerr, would you agree with that, that 
America is great because of the things we make and we have a 
good energy supply to fuel, for lack of a better word, our 
industry?
    Mr. Kerr. Yes.
    Mr. Weber. Mr. Kovacs, would you agree with that?
    Mr. Kovacs. Yes.
    Mr. Weber. Dr. Paulson, would you agree with that?
    Dr. Paulson. I don't know enough to comment. I think you're 
right but I don't know.
    Mr. Weber. Mr. Eisenberg, would you agree with that?
    Mr. Eisenberg. I do.
    Mr. Weber. Good. Mr. Eisenberg, you also said that 65 
percent of the controls the EPA was mandating were not 
identifiable. Is that true?
    Mr. Eisenberg. Yes. It's EPA term of art. They call them 
unknown controls. They just----
    Mr. Weber. Okay.
    Mr. Eisenberg. --can't tell us what they are.
    Mr. Weber. And Mr. Kovacs, if I remember your testimony, 
you said that the EPA itself said this was going to be the most 
expensive regulation in history but that it wouldn't impact 
states.
    Mr. Kovacs. Yes, that's--they have this technical where if 
it's a mandate, they don't--and the state has to do it, they 
don't count it as----
    Mr. Weber. So that was your comment, right?
    Mr. Kovacs. Yes.
    Mr. Weber. Okay. Good. So let me come back to you, Mr. 
Kovacs. It's the most expensive regulatory rule in history but 
it's not going to impact states. Does that sound commonsensical 
to you, Mr. Kovacs?
    Mr. Kovacs. Well, that's been the point of my testimony, 
that Congress has legislated for years common sense and you 
haven't gotten it.
    Mr. Weber. So is your answer no, it's not commonsensical?
    Mr. Kovacs. It's not common sense.
    Mr. Weber. Mr. Kerr, would you agree that that statement 
doesn't sound commonsensical? It's the most expensive 
regulation in history but it won't impact states.
    Mr. Kerr. I think that's nonsensical.
    Mr. Weber. Dr. Paulson, would you agree with that?
    Dr. Paulson. Sir, I have no idea what the context is so I 
can't comment.
    Mr. Weber. Mr. Eisenberg, would you agree with that?
    Mr. Eisenberg. I would agree.
    Mr. Weber. Mr. Eisenberg, when an energy plant builds a 
plant--and I had a nuclear plant in my district when I was 
state rep. When an energy plant--when someone comes in to build 
an energy plant, permitting and all, the process takes three to 
five years?
    Mr. Eisenberg. If you're lucky.
    Mr. Weber. If we're lucky. Okay. So if it's that hard on us 
and the EPA is making it harder and harder and harder, and it's 
billions of dollars, does it surprise you that some of those 
investors that have that kind of money to invest actually send 
that money overseas? Does that surprise you?
    Mr. Eisenberg. It doesn't at all. Streamlining that process 
is a priority.
    Mr. Weber. Dr. Paulson, does that surprise you?
    Dr. Paulson. Again, that's beyond my expertise, sir.
    Mr. Weber. It's above your pay level, pay grade?
    Dr. Paulson. I don't use that terminology but it's beyond 
my expertise.
    Mr. Weber. Mr. Kovacs, does that surprise you?
    Mr. Kovacs. No.
    Mr. Weber. Mr. Kerr?
    Mr. Kerr. I'll say this is--the energy policy is outside my 
purview.
    Mr. Weber. Okay. You know, when I was a state rep I was on 
the environmental reg committee in Texas and I came up here to 
Congress--D.C.--in March of 2010 to an Energy and Environment 
Committee Meeting, National Conference of State Legislators, 
NCSL. I heard with my own ears an Under Secretary for the EPA 
back then say that they wanted to permit farms because of 
global warming, greenhouse gases, average farm permit $26,500 
per farm. Now, they had done the math, and Doctor, I trust you 
can do math. Okay, good. You didn't seem to want to weigh in on 
most of the other questions. They had calculated the income 
stream--now, this is their words, not mine--a revenue stream of 
$600 million. It turns, you know, that the streams on farms and 
ranches aren't the only streams the EPA is interested in, okay? 
Six hundred million dollars. Now, is the EPA really only 
interested in science when they say they want to permit farms 
and it produces a revenue stream of $600 million? Does that 
sound like they're interested in more than science, Mr. 
Eisenberg?
    Mr. Eisenberg. So I don't know that I can effectively 
answer that one but I mean, they need to find a balance.
    Mr. Weber. They do. They're going to kill our energy supply 
if we're not careful, and Dr. Paulson, we're going to wind up, 
poor kids are going to all be broke. They're going to be 
healthy but we're all going to be broke. That's the danger of 
losing jobs and sending our energy overseas because China and 
Mexico and India are not going to follow suit.
    So I'm going to stop there. That's my editorial, Mr. 
Chairman. I appreciate you letting me go over. I yield back.
    Chairman Smith. Thank you, Mr. Weber, and the gentleman 
from Alabama, Mr. Palmer, is recognized.
    Mr. Palmer. Thank you, Mr. Chairman.
    I want to start out by addressing air quality, and I have 
here the air quality section from a report done by the Alabama 
Policy Institute that shows that since 1980, our GDP has 
increased by 467 percent, vehicle miles traveled up 94 percent. 
The population's grown by 38 percent. Energy consumption is up 
22 percent. But emissions are down 50 percent. When you look at 
the air quality index and the percentage of days per year that 
the air quality index exceeded the standards, we went from 
about 24 percent in 1980 to about two percent. So there's no 
question that we have done an excellent job of improving air 
quality yet the asthma rate has gone up. I think that's been 
mentioned several times.
    I'd also like to point out that there might be other 
factors that cause asthma rates to have gone up, and for 
instance, here's a report from UCLA, University of California, 
Los Angeles, in case anyone wonders what the acronym is. It 
says asthma disproportionately affects low-income populations, 
and the percentages are astonishing, frankly, that it would 
have such a higher prevalence among low-income families when I 
think--and I'll ask my colleague from California, Mr. Knight, I 
believe that higher-income families breathe the same air as the 
low-income families. So, Mr. Chairman, I'd like to enter into 
the record the article and the section from the report on air 
quality, and I'll also point out----
    Chairman Smith. Without objection.
    [The information appears Appendix II]
    Mr. Palmer. Thank you.
    As well that there is an estimate on what the ozone--new 
ozone regulations will cost. I find it interesting, Mr. Kerr, 
that the EPA seems to think that there's not going to be an 
impact. Is it possible in your mind just rationally thinking 
this through that the additional regulations that are being 
imposed on businesses that are going to result in substantial 
job losses, that's going to result in less disposable household 
income, that will result in lower incomes could have a more 
negative effect on health and well-being of people than any 
positive effect that additional regulations would impose, 
considering the improvements that we've made already?
    Mr. Kerr. I'll have to concede to the others because I 
don't do air quality consulting.
    Mr. Palmer. My question is, do the people who work for the 
businesses of the United States and earn income do better in 
terms of health and well-being than people who have no income 
and no job?
    Mr. Kerr. Yes, sir, they do.
    Mr. Palmer. That's part of what I would consider 
commonsense policy.
    In May of--in a May 29, 2015, interview with PBS News Hour, 
EPA Administrator Gina McCarthy stated the following: that 
farmers will know very clearly here we are clearly explaining 
that irrigation ditches are not included. We have clearly said 
in the rule beyond this rule adds absolutely no regulatory or 
permitting issue to agriculture whatsoever. Do you agree with 
that statement?
    Mr. Kerr. No, I don't. If I could get a chance to elaborate 
at some point, I'd like to give you time to ask more questions.
    Mr. Palmer. Okay. We'll come back to that as the last 
opportunity for you to speak.
    Mr. Kerr, former EPA Office of Water Deputy Administrator 
Nancy Stoner previously stated that the rule will not have a 
negative effect on small businesses. She said the Agency sought 
early and wide input from small businesses while developing the 
proposed rule including meetings as far back as 2011. Do you 
agree with this statement, that the rule will not have a 
negative impact on small businesses?
    Mr. Kerr. I disagree with the statement. I've talked to 
small homebuilders. You know, regulatory creep is already 
having an effect.
    Mr. Palmer. Well, that conclusion is consistent with what 
the National Federation of Independent Business concluded. They 
had a Small Business Optimism Index and found that small 
business owners attributed regulations as the single-most 
important problem facing businesses today.
    So you said that you'd like to elaborate on something. You 
may do so.
    Mr. Kerr. Thank you. Well, two parts. When a farmer in 
Chesapeake is looking to sell his land and needs a wetland 
delineation done so that the prospective purchaser can 
determine where they can build, we're walking out into soybean 
fields and looking at areas that show up as moist signatures on 
aerial photographs and looking to see if there might be some 
wetland plants or stunted vegetation in a crop field, and the 
Corps of Engineers before this rule are regulating those areas 
as wetlands. Now, if they're isolated, then the Corps--the 
federal government does not take jurisdiction; the Commonwealth 
of Virginia would. If they're adjacent to a ditch that's 
adjacent to a wetland, all of a sudden they are regulating it. 
Now, that--that has already crept into the procedure, and I've 
argued consistently that it shouldn't because Congress went to 
the Corps back in 1990 and said create what's called a PC 
cropland, prior converted cropland. They had--there was a 
regulatory guidance letter the Corps put out, 90-7, that 
spelled out the procedures for that that exempted agricultural 
fields as long as they didn't pond or flood for 7 to 14 days. 
Any portions that did would be considered a farmed wetland and 
be regulated.
    In 1993, the EPA and the Corps put out a rule that said 
we're codifying regulatory guidance letter 90-7, and you would 
think, I thought--I'm a consultant. I know 90-7. They said they 
codified it, which would have perpetuated this exemption for 
most farm fields that were farmed prior to 1985, don't pond or 
flood for very long duration and have never been abandoned for 
more than five years.
    With that rule in place, they're now telling me that what 
that actually means is that they don't recognize the prior 
converted cropland rule created by the NRCS under the Food 
Subsidy Act and that the Corps doesn't recognize 90-7 anymore 
at all anywhere at any time, and I've repeatedly asked the 
question, and the rule that's just been passed, they simply 
said we're not changing that because we weren't--that's not 
part of our charge. They changed adjacency definition and that 
wasn't part of their charge. I would love to see Congress--to 
me, there's no confusion. In fact, there's a court in Florida 
that's already decided this case, which I brought to the Corps' 
attention, which didn't get any traction, and that judge said 
you can have two different rules that use the same phrase and 
they mean two different things because they fall under two 
federal laws. That's not occurring, and we have farm ditches 
and farmland being regulated today and it'll continue.
    Mr. Palmer. Mr. Chairman, just one last point. I want to 
point out that Dr. Phillip Lloyd, former U.N. International 
Panel on Climate Change lead author, found that global 
temperature change over the last 100 years is well within the 
natural variability of the last 8,000 years. Standard deviation 
over the last 8,000 years is .98 degrees Celsius. I want to 
emphasis point 98----
    Chairman Smith. Thank you----
    Mr. Palmer. Over the last years it's been .85 degrees 
Celsius.
    Chairman Smith. Thank you, Mr. Palmer, and if you would 
give us a document to put into the record as well.
    Mr. Moolenaar, the gentleman from Michigan, is recognized.
    Mr. Moolenaar. Thank you, Mr. Chairman.
    Mr. Kerr, I'd just like to continue following up with you 
and then also talk to Mr. Kovacs and Mr. Eisenberg on some of 
the Waters of the United States issues. What in your judgment--
there were some court cases. There's the Clean Air Act and 
there was an effort by the EPA to clarify its jurisdiction. Is 
that really how we've gotten to this point?
    Mr. Kerr. Yes. There were a few Supreme Court decisions, 
SWANCC being one, Rapanos being one of the other two or three 
major ones. That's correct.
    Mr. Moolenaar. And so in your judgment, were they trying to 
solve a policy problem that existed out there where people 
throughout the country were saying, you know, there's not 
enough water or--what problem other than the legal issues were 
they trying to solve?
    Mr. Kerr. Two real problems. One is the legal question, and 
there was some ambiguity because of multiple Supreme Court 
decisions that had to be looked at in the field, and then it 
became the practical problem of how do you provide guidance to 
regulatory staff and consultants that's clear, easily 
understandable and could be consistently applied, not only in 
an area but across the entire country. So that was the 
challenge, and they tried to take in science, and in the 
preamble of the rule, they said those are the three compelling 
issues they have to deal with--science, policy and law--and 
they said that science in fact falls short in certain areas, 
and they've got to reach a policy decision that's consistent 
with the law.
    Mr. Moolenaar. And in your judgment, it's gotten actually 
more complicated. Some of these new definitions, rather than 
giving clarity, have really expanded their jurisdiction and 
raised a number of new questions.
    Mr. Kerr. Yeah, they've kind of moved items around, and so 
things that were previously one thing like possibly an isolated 
water that wasn't regulated can become an adjacent water. The 
other thing is, they did create a bright line but the bright 
line--and I'm speaking specifically to rule A8, wetlands that 
show a significant nexus to traditionally navigable waters, 
allows that to be applied to any feature within 4,000 feet of 
an ordinary high-water mark or a tributary.
    Now, we're not talking about rivers, we're not talking 
about streams, we're not talking about creeks. Where I come 
from, there were creaks, then there were smaller ones that were 
cricks. We're not talking about those. We're way up into the 
headwaters of ephemeral and intermittent streams and then going 
4,000 feet out to determine a significant nexus.
    My point is that that includes virtually the entire 
watershed of virtually every place that I've looked. So they 
created a bright line but it includes everything.
    Mr. Moolenaar. So in your judgment, and I wanted to hear 
from Mr. Kovacs and Mr. Eisenberg, do you view this as a 
significant expansion of their jurisdiction, of their 
authority? I mean, is that your conclusion?
    Mr. Kerr. Yeah, and they've--it's not any clearer. They've 
expanded jurisdiction into areas that heretofore may not have 
been regulated or weren't regulated, and the procedures aren't 
any clearer. They provided some bright lines, and some of those 
are commendable but others are just--they kind of grab all 
kinds of things and don't create the simplicity that anyone was 
looking for.
    Mr. Moolenaar. Mr. Kovacs, do you view this as a 
significant expansion of their jurisdiction or authority?
    Mr. Kovacs. Well, it certainly is significant expansion of 
their authority. I think what troubles me the most in this 
whole argument is not once in all the hundreds of pages that 
they have did they ever say that the states weren't doing a 
good job on state waters, which is really remarkable. Second, 
that they never said that the water quality that was 
administered by the states was in any way impaired. That's 
quite remarkable. Under unfunded mandates, they make it very 
clear that they are imposing no mandates on state and local 
governments, and in terms of small business they say there's 
absolutely no impact even though they're greatly enhancing 
jurisdiction.
    This is a shell game, and this is what the whole regulatory 
process has become, and that's why I keep on pleading, Congress 
really needs to take more action and get back in the game.
    Mr. Moolenaar. Let me go to Mr. Eisenberg.
    Mr. Eisenberg. So we just finished our annual fly-in. We 
had 500 manufacturers coming to town. I had dinner two nights 
ago with about 25 of them to talk specifically about water 
issues, water scarcity, waters of the United States, things 
like this, and at the end of the meal I said look, is this--are 
you guys in a better place because of this regulation, and 
every single one of them said no. It is still causing them 
headaches. All we wanted was clarity. Had we gotten clarity, my 
testimony would have been a lot different today. We didn't get 
it.
    Mr. Moolenaar. Thank you, Mr. Chairman.
    Chairman Smith. Thank you, Mr. Moolenaar.
    Before we conclude, Dr. Paulson, I was going to mention to 
you that we contacted the Assistant Director of the Capital 
Power Plant, and he confirmed that whether it burns natural gas 
or coal, the smoke is still white, and while I certainly have 
sympathy for any child who's gotten asthma, you might want to 
check with the doctor about his statement that whenever the 
smoke turned black, the asthma became worse. I'm not sure that 
there's a basis for that. But I look forward to hearing more 
information about it as well.
    Thank you--the gentlewoman from Texas.
    Ms. Johnson of Texas. Thank you, Mr. Chairman. Let me thank 
all the witnesses. I want to ask unanimous consent to put an 
article from the Scientific magazine in the record that speaks 
to the role of science and rulemaking process.
    Chairman Smith. Without objection.
    [The information appears Appendix II]
    Chairman Smith. We thank you all for your testimony today, 
very helpful, very informative, and we stand adjourned.
    [Whereupon, at 11:09 a.m., the Committee was adjourned.]

                               Appendix I

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                     Answers to Post-Hearing Questions
Responses by Mr. Bill Kovacs
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Responses by Dr. Jerome A. Paulson
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Responses by Mr. Ross Eisenberg
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


                              Appendix II

                              ----------                              


                   Additional Material for the Record


             Documents submitted by Chairman Lamar S. Smith

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

      Documents submitted by Ranking Member Eddie Bernice Johnson

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

      Documents submitted by Representative Donna F. Edwards

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

      Documents submitted by Representative Suzanne Bonamici

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

      Documents submitted by Representative Don S. Beyers

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

      Documents submitted by Representative Paul Tonko

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

      Documents submitted by Representative Gary Palmer

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                 [all]