[Congressional Record Volume 140, Number 91 (Thursday, July 14, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 14, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]


                              {time}  2120
 
    THIRD ANNUAL REGULATORY RELAY--THE BURDEN OF REGULATION ON THE 
                          RESTAURANT INDUSTRY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
February 11, 1994 and June 10, 1994, the gentleman from Texas [Mr. 
DeLay] is recognized for 30 minutes as the designee of the minority 
leader.
  Mr. DeLAY. Mr. Speaker, today I come to the well of the House as 
chairman of the Republican Task Force on Competitiveness to run the 
second lap of the Third Annual Regulatory Relay, whose focus for 
several weeks has been the burden of regulation on the restaurant 
industry.
  Working with the National Restaurant Association, this morning I held 
a press conference on this topic. Several of my colleagues joined me to 
tell of regulatory horror stories in their districts, and 
restaurateurs, including a constituent of mine, told their tales of 
dealing with the monstrous Federal regulatory bureaucracy. I was very 
pleased to see that so many are brave enough to join the task force in 
this race against the perpetual winner of the regulatory marathon--the 
Federal Government.
  Many people do not realize that eating and drinking places are the 
Nation's largest retail employer, accounting for 3 out of every 10 
retail workers. Most of these are small businesses. And while small 
businesses are the job-creating engine of our economy, they are also 
extremely vulnerable to the costs of regulation. As a result, almost 
any increase in Federal regulation has a severe impact on the ability 
of a restaurateur to succeed.
  It is particularly timely to discuss this topic because we recently 
reached a very important date on the calendar. Sunday, July 10, marked 
the second annual Cost of Government Day, the day when Americans earned 
enough income to pay off their share of the combined costs of taxes, 
Government spending, and regulation. As chairman of COGD on behalf of 
Americans for Tax Reform, I recently introduced a resolution 
establishing July 10 as Cost of Government Day.
  Federal regulatory costs are estimated--conservatively--to be about 
$600 billion annually. This translates into $2,500 for every man, 
woman, and child in America. Much of this cost is so hidden that it 
doesn't show up on any sales or paycheck receipts. However, the Federal 
Register tells the story clearly, as President Clinton's first year saw 
the most regulatory activity since President Carter's last. The page 
total for 1993 was 69,688 pages, the third highest total of all time.
  A not-surprising increase in the number of regulatory bureaucrats 
corresponds with this proliferation of regulations. While from 1985 to 
1992, regulatory staffing increased by over 20 percent, to almost 
125,000 employees, under President Clinton, the largest number of 
Federal bureaucrats ever--128,615 people--was called for to run his 
Federal regulatory apparatus. It is truly outrageous that while July 
4th was Independence Day--the day we celebrated our liberation from 
Great Britain--it was not until July 10 that Americans were liberated 
from their own Government.
  Our economy cannot bear the burden indefinitely. This is especially 
true for industries like the restaurant industry, as nearly three-
fourths of eating and drinking establishments have annual sales of less 
than $500,000, and average profit margins run between 3 and 4 percent 
of gross sales. This thin operating margin makes restaurants highly 
sensitive to regulations which increase the cost of doing business. And 
according to this list compiled by the National Restaurant Association, 
restaurants are by no means suffering from a dirth of Federal 
regulations. Entitled ``Regulations and Restaurants from A to Z,'' this 
sample list includes nearly 60 rules and regulations imposed upon the 
industry by the Federal Government. Of course, this does not include 
the multitude of State, local, and county regulations that 
restaurateurs must comply with.
  While many of these are well-intended, a lack of cost/benefit 
analysis--and sometimes simply common sense--in their application often 
results in ridiculous and even tragic situations. For example:
  In Houston, Texas, air quality control authorities ordered that 
``large'' employers (more than 100 employees) must take active steps to 
encourage carpooling and use of mass transit. They initially ruled that 
restaurants, open 7 days a week with more than 100 part-time employees, 
must also comply regardless of the fact that their operating time (and 
thus employee commute times) did not match the rush hour periods which 
were slated for control.
  A multiunit restaurant operation based in the Washington, DC. area 
received an OSHA fine of $1,500 because an employee did not use the 
available cut-resistant gloves while chopping fresh vegetables. In a 
separate action, the new FDA Model Food Sanitation Code prohibits the 
use of such gloves when in contact with cooked or ready-to-eat foods. 
The National Restaurant Association has formally asked OSHA and FDA to 
clarify which rule take precedence.
  Under the OSHA Hazard Communication Standard, employers are obligated 
to make available safety information about hazardous chemicals using 
material safety data sheets [MSDS] supplied by chemical manufacturers. 
MSDS' cover diet soda (because it contains saccharin, a possible animal 
carcinogen); liquid hand soap (it's an eye irritant, so the MSDS 
advises one to wear safety goggles when using the product and, if 
spilled, to remove contaminated clothing and flush skin with running 
water for 15 minutes); and liquid dish soap like Joy dishwashing liquid 
(another irritant, but it is also listed as a potential fire hazard 
because it contains alcohol as an emulsifier).

  A small New England bar and grill was cited by OSHA for $3,000 in 
fines due to a violation of the Hazard Communication Standard. The 
principal violation was the transference of window cleaner from its 
original gallon jug to a 10-ounce spray bottle which was not labeled as 
to content and warning despite the fact that employees stated they were 
familiar with the contents of the bottle and the cautions for its use.
  A restaurant in Pittsburgh was the subject of an OSHA investigation 
after an employee assisted a patron with a nosebleed. A disgruntled 
employee lodged a complaint, and OSHA investigated possible violations 
of the bloodborne pathogens standard. No fine was levied, but OSHA 
advised the operators to establish a written plan for future 
compliance. The operators did so, including a contract with a waste-
hauling company to provide special ``red bags'' for medical waste for 
future incidents.
  In Sedona, AZ, a restaurant operator made a technical paperwork error 
when changing the corporate ownership of his restaurant. In 
retaliation, the local health department demanded that he close his 
doors while the new permit was being processed. When he refused, they 
conducted harassment inspections, citing trivial temperature violations 
of one or two degrees, including at least one case in which a scoop of 
potato salad on a plate waiting for the entree to be plated was cited 
in violation. The case was resolved through an arrangement whereby the 
operator was ordered to teach local classes in food sanitation to other 
operators.
  As you can see, the regulatory apparatus has reached the level of the 
absurd going on all over the country. I would now like to take a walk 
through a little bit of history to demonstrate the incredible growth in 
the number of rules and regulations the restaurant industry has had to 
deal with in just the last 10 years.
  In 1970, other than local fire, health, and building codes, a typical 
restaurateur had to deal with about 20 pages worth of Federal law 
contained in the Fair Labor Standards Act of 1938.
  1994 presents a very different picture. Just over the last 10 years a 
large number of laws have been passed affecting the restaurant 
industry. In 1985 an extension of health benefits was mandated by the 
Omnibus Budget Reconciliation Act. In 1987, the Immigration Reform and 
Control Act required employers to fill out I-9 forms for all new 
employees, and the Budget Reconciliation Act required restaurateurs to 
pay FICA taxes on all employee tips. Employers of 100 or more were 
mandated in 1988 to give 60 days' advance notice of closings, and in 
1989 the Fair Labor Standards Act Amendments raised the minimum wage. 
In 1990, the Americans with Disabilities Act was passed, and 
restaurants were forced to meet new Federal criteria on menu labeling 
in 1991 with the Nutrition Labeling and Education Act. In 1993 the 
Family and Medical Leave Act was passed, requiring employees of 50 or 
more to provide 12 weeks of unpaid job-protected family or medical 
leave to employees.
  The National Restaurant Association, along with the Texas Restaurant 
Association, is kind enough to have compiled a book entitled ``The 
Legal Problem Solver for Foodservice Operators'' to help anyone who 
might be contemplating opening a restaurant. Unfortunately, a typical 
restaurateur in Texas has to pore through 27 chapters of Federal and 
State rules, regulations, and paperwork that must be complied with to 
open and run a restaurant. The topics of these chapters range from how 
to report tips to the IRS, to how to value meals when it comes to 
overtime work; from Department of Labor rules on uniforms, to drug 
policy requirements; from OSHA's bloodborne pathogen standards, to 
Equal Employment Opportunity Commission guidelines on height and 
weight. With such a regulatory maze to have to wind through, it is a 
wonder that anyone is able to open a restaurant at all, much less stay 
in business.

  Perhaps even scarier are the pieces of proposed legislation affecting 
restaurants which the Clinton administration and/or this Democrat 
Congress want signed into law. They include a ban on smoking in public, 
a prohibition on replacing a striking worker, a massively expensive 
OSHA reform bill, and of course the infamous Clinton health care plan. 
This plan would push Cost of Government Day back 31 days--the single 
greatest jump in the cost of Government in our Nation's history.


                               conclusion

  The message of the Regulatory Relay is this: The system for drafting, 
evaluating, approving, and promulgating rules must be overhauled. The 
lack of an effective regulatory review process to weigh costs and 
benefits is wreaking havoc on our economy, resulting in lost jobs, lost 
productivity, lost competitiveness, and lower standard of living. We 
must establish a system of cost/benefit analysis, pass the Paperwork 
Reduction Act, strengthen the Regulatory Flexibility Act, and provide 
protections for whistleblowers whose firms are being abused by 
overzealous regulators.
  If Americans are to succeed in today's highly competitive economy, we 
must break the chokehold of regulations around the neck of every 
budding entrepreneur and allow them to compete freely. I look forward 
to continuing the fight to bring some sense back into the regulatory 
process.
  Mr. Speaker, I am including at this point in the Record the document 
I referred to earlier, ``Regulations and Restaurants From A to Z,'' as 
follows:

                Regulations and Restaurants From A to Z


   matters related to running a restaurant involving some aspect of 
                           federal regulation

       Accessibility to disabled customers (DOJ).
       Advance payment of Earned Income Credit (IRS).
       Age discrimination (EEOC).
       Alcohol excise taxes (IRS).
       Annual occupation tax for alcohol-sellers (BATF).
       Bloodborne pathogen program for employees who give first-
     aid (OSHA).
       Citizenship-status discrimination (DOJ).
       Commuting plans for employers in high-pollution areas (EPA, 
     beginning late 1994).
       Continued health benefits for former employees (IRS).
       Copyright law and restaurant music (DOJ.
       EEO-1 Form (EEOC).
       Egg-refrigeration standards (USDA, proposed for 1994).
       Exempt managers (DOL).
       Federal income taxes (IRS).
       Federal income-tax withholding for employees (IRS).
       FICA payroll taxes (IRS).
       FICA payroll taxes on tips (IRS).
       FUTA payroll taxes (IRS).
       Grease-trap waste disposal (EPA).
       Hazard Communication Standard (OHSA).
       Health claims and restaurant foods (FDA).
       Health benefit plans and the Americans with Disabilities 
     Act (EEOC).
       I-9 form (Employment Eligibility Verification Forms (INS).
       Immigration Reform and Control Act of 1986 (INS).
       Independent contractors, reporting of payments to IRS).
       Job application forms, permissible questions (EEOC).
       Magnetic media reporting of Forms W-2, 8027 (IRS, SSA).
       Material Safety Data Sheets (OSHA).
       Meal credit (DOL).
       Minimum wage (DOL).
       National origin discrimination (EEOC).
       Notice to employees of eligibility for Earned Income Credit 
     (IRS).
       Nutrient-content claims and restaurant foods (FDA).
       Overtime pay rules (DOL).
       Payroll tax deposits (IRS).
       Polygraph ban (DOL).
       Poster: Equal employment opportunity (EEOC).
       Poster: Polygraph (DOL).
       Poster: Minimum wage (DOL).
       Poster: Family and medical leave (DOL).
       Poster: OSHA (OSHA).
       Race discrimination (EEOC).
       Reasonable accommodation for workers with disabilities 
     (EEOC).
       Refrigeration equipment and CFC phrase-out (EPA, phaseout 
     by 1996).
       Religious discrimination (EEOC).
       Restaurant closing, 60 days advance notice (DOL).
       Sex discrimination (EEOC).
       Teen labor: Hours restrictions for workers under 16 (DOL).
       Teen labor: Occupational restrictions for workers under 18 
     (DOL).
       Tip credit (DOL).
       Tip reporting and IRS Form 8027 (IRS).
       Tip allocation (IRS).
       Tip-income audits (IRS).
       Tip pools (DOL).
       Uniforms: Deposits, costs, maintenance (DOL).
       Veterans' employment rights (DOL).
       W-2 Forms (Wage and Tax Statement (IRS, SSA).
       W-4 Forms (Employee's Withholding Allowance Certificate) 
     (IRS).
       Workplace phones, hearing-aid compatibility (FCC).

                              {time}  2130

  Mr. Speaker, I would be happy to yield to the distinguished gentleman 
from Michigan, who has worked so long and hard on regulatory reform in 
this House, as well as many other reforms that ought to be brought to 
this House.
  Mr. HOEKSTRA. I thank the gentleman for yielding.
  Mr. Speaker, I am not going to talk specifically about restaurants, 
but the gentleman mentioned the Clean Air Act and also some of the 
things he thought needed to be overhauled. I also want to reference a 
story today in the Washington Post, the national weekly edition, ``Why 
American Hate Congress.'' I found perhaps one of the most interesting 
quotes in there: ``A survey found large gaps in public knowledge of 
what this Congress has done, but discovered that those who know more,'' 
and that is the American people who know more about what we have done, 
``actually think less of the legislators' performance.'' I think I have 
a wonderful example here. I have good news and bad news on paperwork 
reduction and on Government regulation. Which would the gentleman like 
first?
  Mr. DeLAY. Give me the bad news first.
  Mr. HOEKSTRA. The bad news is that under the Clean Air Act and the 
rules and regulations that are being promulgated, we will have to meet 
those rules and regulations.
  Mr. DeLAY. Then what is the good news?
  Mr. HOEKSTRA. The good news is that the EPA is going to save hundreds 
of thousands of dollars because they are not going to publish them in 
the Federal Register.
  Mr. DeLAY Wait a minute, I do not understand. We are going to have 
just hundreds of regulations, as I understand, coming out to implement 
the Clean Air Act?
  Mr. HOEKSTRA. Correct.
  Mr. DeLAY. They are not going to publish them so Americans will not 
be able to read them?
  Mr. HOEKSTRA. This is correct. The Washington Times, Tuesday, July 
12, Let me tell you why this is so important to my district. Part of my 
district--we are on the Lake Michigan shoreline, Chicago is about 100 
miles to the southwest and Milwaukee is 90 miles directly west of my 
district. A lot of pollution, it is amazing the EPA has not recognized 
this fact yet, but air moves. I do not know if the gentleman knows 
that.
  Mr. DeLAY. Well, you need about a $10-million study to study how air 
moves.
  Mr. HOEKSTRA. That is right We have commissioned a number of studies. 
What those studies have shown, the first study we did is we found out 
that the air above part of my district, what it is doing, it is moving. 
So, obviously, we now have to meet the Clean Air Act requirements, some 
of the things the gentleman was talking about. We are not to the 
carpooling state yet, but we might be.
  We thought we were fairly environmentally conscious in west Michigan. 
We have large rural areas. We wondered why is it that we do not meet 
the clean air standards. We found out that surprisingly enough air 
moves and somewhere between 70 and 90 percent of our pollution come 
from areas to our west. So we are getting windborne pollution.
  So, beginning January 1, 1995, the citizens in my district are going 
to have to start paying $24 every other year for auto emissions 
testing.

                              {time}  2140

  And for us, full well knowing, that even if all of the constituents 
in these three counties locked their cars in their garage, and did, and 
put them away, and started riding their bicycles, like I like to do, we 
would not be able to meet the clean air standards; so, I found it 
amazing when I went to the Washington Times this week and started 
reading ``Clean Air Rules Published Only in Summary by EPA.''
  The 1990 Clean Air Act has spawned so many proposed regulations that 
the Environmental Protection Agency has decided to publish only 
summaries in an effort to save money.
  I ask, ``Isn't it amazing that we think that the American people and 
American businesses, they have all of the money to implement 
regulations when we here in Washington do not have enough money to 
publish them?''
  It goes on. ``There's just an enormous number of new rules that would 
have cost the agency hundreds of thousands of dollars to publish in the 
Federal Register,'' EPA spokesman Lou Kester said.
  Later on it goes on:

       At least one reader of the Federal Register has written EPA 
     Administrator Carol M. Browner to protest the omission.
       ``This situation sets a dangerous precedent to which I 
     object,'' wrote John D'Aloia Jr., a consultant to Prindle-
     Hinds Environmental Inc. of Albuquerque, N.M., which advises 
     banks, insurance companies and other businesses of pending 
     federal rules.
       ``The purpose of the Federal Register is to provide 
     citizens with a single source of government action. By 
     forcing interested parties to take additional action to 
     obtain copies of proposed rules, EPA is making it more 
     difficult, and costly, for citizens to participate in the 
     regulatory process.''

  So, first, we start off with bad legislation. Second, we now make it 
more difficult for those people that are affected by bad legislation to 
try and implement bad legislation.
  Just think, Mr. Speaker, I came from the private sector, and just 
think of what, and I am just trying to imagine, what my customers would 
be telling me if we introduced a new product that was fairly complex, 
and we said, ``By the way, if you would like to understand how to use 
this product, or what types of problems it might solve, or what the 
technical specifications are, you know you have to pay extra for that. 
It's going to cost you an extra--if the product costs $10,000, if you 
really want to find out how the product works, send us another check, 
and we'll send you one for a thousand dollars, then we will send you, 
the technical specifications and the operating instructions.'' I think 
that company would be out of business very, very quickly.
  I find this an interesting thing. It just builds off of what the 
gentleman is saying about the cost of regulation. The cost of 
regulation is immense even when we are passing well-intentioned, well-
founded legislation that would have a very good impact. What we are 
finding is too many bills that are based on faulty premises. We are 
requiring the American people, the American public, to then implement 
bad legislation, and now we are making it more difficult for them to 
find out what they are actually supposed to do.
  Why do people hate congress? They see what we are doing.
  Just one more comment:
  I went to the chairman of the Committee on Energy and Commerce when I 
came here, and I said, ``This doesn't make sense.''
  The comment was, ``I understand. I understand that there are problems 
with the legislation. I can't open up the legislation because what we 
may end up with will be worse than what we have.''
  That may work great for the 49 other States. It may work great for 
the other 84 counties in the State of Michigan that are not impacted by 
this.

  Try explaining that to the three counties and the people in those 
counties that have to pay. Explain that to the businesses that now have 
to compete under those regulations. It does not wash.
  When we have bad regulations and laws, it is our responsibility to 
fix them. We are not willing to recognize the problem.
  I thank the gentleman from Texas [Mr. DeLay] for having yielded to 
me.
  Mr. DeLAY. I think the gentleman from Michigan has just exhibited his 
talent in this regard and his diligence in finding that in the case of 
the first article, a very obscure article, understanding the impact 
that that article was trying to portray, and then the second article as 
an example of this outrageous, out of control Federal Government that 
now, as the gentleman so rightly puts it, that now has gone even a step 
further, that has given coverup a bad name.
  Now for the first time, and I have been here 10 years, and this is 
the first time that I know of that I have ever even heard of it, that 
an agency refuses to publish the regulation that it is going to impose 
upon every American in this country so that, and I do not know the 
reason; it obviously is not to save money.
  This present administration and its agencies are running amok, 
actually promulgating rules and regulations that they have no authority 
legally to promulgate, and this may be a way that they are trying to 
cover up what they are doing, particularly in a piece of legislation as 
complicated as the Clean Air Act. Of any piece of legislation, that one 
and its regulations should be published.
  I yield to the gentleman from Oklahoma [Mr. Istook], my cochairman of 
the Task Force on Competitiveness.
  Mr. ISTOOK. Mr. Speaker, as the gentleman knows, it seems to me like 
a lot of people have got to be very confused listening to this 
explanation because it is normal for a Member of Congress, at least if 
they are back in their districts, to talk to people and say, ``Well, we 
in Congress have done great things, but then there are these 
bureaucrats over here that have done the bad things,'' and maybe it is 
kind of scapegoatism, but we have people that are supposed to be 
carrying out the instructions they were given from Congress, and the 
Members of Congress, when something goes bad, they say, ``Well, it's 
the bureaucrats' fault because of the regulations that came through.''
  But I think what the gentleman is trying to say is that really it 
traces back to the Members of Congress that gave the instructions in 
the first place, that, even if one paid extra money, and they got the 
instruction manual that Congress sent to these people, they would find 
that it still does not make sense, and why is it that the public is hit 
with this constantly? One would think that these Members that say it is 
the bureaucrats' fault voted against the bills that gave away all this 
authority and gave this power to the bureaucrats to do these silly 
things like tell all the people, ``You have got an air pollution 
problem. It's your fault even though you had nothing to do with it.''
  Why is it that these Members, if we look at the Members' record, we 
find they did not vote against them, they voted for those bills, and 
nobody ever seems to look back at that record? Why is that? I am a 
freshman; what would I know?
  Mr. DeLAY. The gentleman, I think, knows the answer, but I would like 
to attempt to answer it in that it has been my experience in the 10 
years that I have been here that this House, controlled by the Democrat 
leadership, passes bills with no intention of being specific, as 
specific, as to enumerate the kinds of regulations and rules that the 
bill is intended to promulgate on the American people. The bills are 
always general in nature so that Members of Congress can vote for the 
Clean Air Act, go home and say, ``I'm for clean air,'' and not be--
first of all make sure it is not implemented for 2, 3 or 4 years down 
the road so they can get two or three elections in their pockets, and 
then, when it starts hitting, and the bureaucrats and the agencies 
start writing the rules and regulations for these poorly written bills 
that are general in nature, are not specific enough so that people, the 
American people, can understand what the Members are doing to them, 
then they start blaming the bureaucrats when in fact this House ought 
to be the oversight agency, the oversight body, for these rules and 
regulations.

  In fact, the gentleman from North Carolina [Mr. Taylor] has an 
excellent bill that cannot seem to find its way to the floor because it 
is being stifled by the chairman of the committee it was referred to 
that says that when agencies promulgate these rules, before they go 
into effect they have to be sent back to the Congress for approval, for 
a vote, so that Members of the House have to approve these rules and 
regulations promulgated by the agencies. I think that would slow down a 
lot of this mess.

                              {time}  2150

  Mr. ISTOOK. If the gentleman would yield further. It reminds me of 
something that was said by a favorite son of Oklahoma, Will Rogers. 
Because you are saying that Congress puts out something, they say, 
``Oh, this sounds like a great idea, but don't bother us with the 
details, we'll let somebody else work out the details.'' Of course, 
they get it all wrong.
  Will Rogers, back when the German U-boats were threatening all the 
shipping around the time of World War I, and so forth, and they were 
sinking merchant vessels right and left, Will Rogers said, ``Well, I've 
got a great idea. All we have to do is boil the oceans. And when the 
oceans start boiling, the U-boats will have to come up and they'll pop 
up to the top, and then we can see if we can shoot them and sink 
them.''

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