[Congressional Record Volume 141, Number 108 (Thursday, June 29, 1995)]
[Senate]
[Pages S9352-S9356]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  COMPREHENSIVE REGULATORY REFORM ACT

  The Senate continued with the consideration of the bill.
  Mr. ROTH. Mr. President, the suggestion has been made on this floor 
earlier today that regulatory reform is primarily a matter of trying to 
satisfy the needs of special interests. Nothing could be further from 
the truth. I think it is fair to say that is recognized on both sides 
of the political aisle.
  I was pleased to note that the distinguished ranking member of the 
Governmental Affairs Committee and former chairman, Senator Glenn from 

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Ohio, in his opening statement noted that

       . . . when the press writes about what happened on the 
     floor today, they [should] get away from the idea that this 
     is the ultimate in confrontation, which seems to be what the 
     questions lead to when we go out of the Chamber--talking 
     about regulatory reform--because, today, I would hope the 
     message would go out that we are united in the Senate of the 
     United States, Democrat and Republican, on one thing: We need 
     regulatory reform.

  Those words are echoed by the distinguished senior Senator from 
Michigan, who is also a member of the Governmental Affairs Committee, 
in his remarks yesterday on the floor of the Senate. He said:

       Let me commend all those involved in this effort. It is a 
     very complicated effort, and most importantly perhaps, an 
     essential and bipartisan effort.

  He goes on later in his statement to say that:

       We need regulatory reform. We must have cost benefit 
     analysis. We need risk assessment. But we also need to be 
     sure that what we are achieving protects, in a sensible way, 
     the environment and the health and the safety of the people 
     of the United States.

  With that, I can strongly agree. And I would agree with those who 
have said that our air is cleaner, our water is cleaner and safer, and 
our environment is better because of many of the regulations. But, at 
the same time, there has been recognition by many that the regulatory 
maze does not work in the best interests of environmental protection or 
good government generally.
  Mr. President, yesterday I stood to speak on behalf of the Dole-
Johnston compromise. I outlined how this legislation, S. 343, the 
Comprehensive Regulatory Reform Act of 1995, is a real and workable 
solution to the overbearing Government regulation that threatens 
America's future.
  I cited the costs of such regulation and the need to restore balance 
to the regulatory process.
  And I explained that I support this legislation because it will make 
the Federal Government--our regulatory agencies--more efficient and 
effective in carrying out their responsibilities.
  The simple fact is, Mr. President, that if we reduce Government waste 
and inefficiency, we ultimately will improve, not hinder, Government 
programs, including environmental protection efforts. If we reduce the 
costs of regulation, we have greater resources to do more good than 
before.
  For example, it has been estimated that a reallocation of resources 
to more cost-effective programs could save an additional 60,000 lives 
per year at no additional cost, or the same number of lives we are 
currently saving could be saved for $31 billion less. So I think it is 
only fair to say that there is plenty of room to improve our regulatory 
system.
  I personally could not support an effort to gut environmental 
protection. But strong reform is something I can support. To say that 
the benefits of regulation should not justify its costs is to argue for 
irrational and wasteful regulation.
  Senator Dole's compromise bill broadly defines benefits and costs. It 
is not a black-box approach that reduces everything to dollars and 
cents. This bill allows agencies to consider nonquantifiable benefits 
and costs. And the definition of benefits expressly includes favorable 
environmental and social effects. The agencies are given leeway to 
consider all of the benefits and costs that are relevant to making a 
responsible regulatory decision.
  Mr. President, there is another important reason why I support this 
legislation. I support it because I am concerned that the rising costs 
of regulation are undermining the faith of the American people in 
Government; I believe these overbearing costs are, in a very real way, 
undermining support for the environmental movement. Americans treasure 
the beauty of this country; they value a clean environment.
  But in last November's elections, the American people also clearly 
demanded a government that is balanced--a government that is dedicated 
to common sense and workable solutions in achieving environmental 
protection and economic security. In short, they demanded a government 
that is efficient and effective.
  I believe our countrymen are right to demand this fundamental change, 
and all of us involved in the current debate must respond to their 
request. We must recognize that we cannot regulate a totally risk-free 
world or remove every last molecule of pollution.
  But we can, and should, use our resources wisely to achieve the 
greatest benefits at the least cost. We can, and should, continue to be 
a world leader in environmental protection while still having a healthy 
economy and a high standard of living.
  We have reached a point where there is broad and bipartisan support 
for regulatory reform and the tools to achieve it. In his thoughtful 
book, ``Breaking the Vicious Circle: Toward Effective Risk 
Regulation,'' Justice Stephen Breyer analyzes our regulatory system and 
concludes that it badly prioritizes the health and environmental risks 
we face.
  In the June 1993 Carneigie Commission Report, ``Risk and the 
Environment: Improving Regulatory Decision Making,'' a distinguished 
and bipartisan panel of experts concluded that the Nation must develop 
a more comprehensive and integrated decisionmaking process to set 
priorities and regulate risks.
  President Clinton's chief spokesperson on regulatory reform, Sally 
Katzen, the Administrator of OMB's Office of Information and Regulatory 
Affairs, submitted a statement to the Governmental Affairs Committee on 
February 7, 1995, saying:

       Regrettably, the regulatory system that has been built up 
     over the past five decades * * * is subject to serious 
     criticism * * * [on the grounds] that there are too many 
     regulations, that many are excessively burdensome, [and] that 
     many do not ultimately provide the intended benefits.

  My friend, George McGovern, a well-known liberal throughout his 
political career, also testified before my committee about the urgency 
of regulatory reform. George recounted his experience as a small 
businessman running an inn after he retired from the Senate.
  He described how a venture as harmless as running an inn was so 
burdened by a multitude of complicated and irrational regulations that 
it failed. he concluded:

       Doubtless most of these regulations that we chafe under 
     have some benefit. They do benefit somebody; either the 
     public or someone benefits from them in some way. But the big 
     question is are those benefits more than equal to the costs 
     and burdens they place on business, especially small 
     businesses.

  Justice Breyer, the Carnegie Commission, the Clinton administration, 
and George McGovern are only a few of the authorities that have 
recognized the need for regulatory reform. Others include Resources for 
the Future, the Harvard Center for Risk Analysis, the Brookings 
Institution, the American Enterprise Institute, and other think tanks, 
commissions, and independent scholars throughout the country.
  Without significant reform, the costs of regulatory will only 
continue to grow. As has already been mentioned on the floor, the total 
annual cost of Federal regulations has been estimated by Prof. Thomas 
Hopkins at $560 billion in 1992; it is expected to rise another $100 
billion by the year 2000. About 75 percent of that cost increase is due 
to new risk regulations.
  These rising regulatory costs have a serious impact on America and 
the quality of life of our families, businesses, and communities. Let 
me give you an example: under the Clean Air Act, the State of Delaware 
was required to implement an enhanced inspection and maintenance--or I/
M--program this year.
  EPA mandated this program, stating that it would result in 
significant pollution reductions. However, Delaware environmental 
officials ran their own data and found that this program would do 
little to improve air quality in our State. The small reduction in 
pollution would be overshadowed by high costs and consumer 
inconvenience at the auto inspection lanes. Delaware has come up with 
an alternative test that meets the Clean Air Act requirements but is 
much less costly.
  This regulatory reform bill would prevent the EPA from mandating 
burdensome requirements such as the I/M test to the States without 
making sure that the benefits justify the costs.
  The problem is, these costs have not been adequately scrutinized in 
the past. No doubt one reason for this neglect is that these regulatory 
costs were not constrained by a budget. The decisions to create new 
regulatory programs typically do not include the kind of serious debate 
about cost that 

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is required to create new on-budget programs.
  Another reason why we have neglected regulatory costs is that most 
regulations are imposed directly on businesses and governments. This 
creates the perception that regulatory programs provide free benefits 
to the public--in contrast to tax-and-spend programs.
  But the costs of regulations are not simply absorbed by businesses 
and governments. These costs, of course, are passed on to the American 
consumer, wage earner, and taxpayer in the form of higher prices, 
diminished wages, increased taxes, or reduced government services. It 
is not just big corporations that are being hurt by red tape and 
bureaucracy; it also is the Federal Government, State, and local 
governments, small business, and the American public. As I have said, 
Federal regulations cost the average American household about $6,000 
per year.
  Equally important, we never see the factories not built, the products 
not made, ah entrepreneurial dreams not realized because, as in the 
case of George McGovern, they were drowned in the sea of regulatory 
process. Without a doubt, rising regulatory costs, limited resources, 
and a desire to preserve important protections and benefits all 
necessitate a smarter, more cost-effective approach to regulation.
  Early in this session, I emphasized the need to achieve bipartisan 
consensus on reforming the regulatory process. I congratulate the 
majority leader for forging that consensus around his bill with 
Senators Bennett Johnston and Howell Heflin.
  Back in February, when I chaired a series of hearings on regulatory 
reform, Senator Dole came to the first hearing to express his strong 
desire to restore some common sense to the regulatory process. The 
leader's commitment to that goal has been critical to the consensus 
that this bill represents. I also want to thank my other colleagues for 
their efforts--including Bennett Johnston, Orrin Hatch, Howell Heflin, 
Frank Murkowski, Kit Bond, Don Nickles, and many others for their 
significant contributions.
  The Dole-Johnston compromise bill is aimed at restoring common sense 
to the regulatory process. I share this goal, along with many Members 
of the Senate on both sides of the aisle. Indeed, there have been a 
number of recent initiatives in the Senate to reform the regulatory 
process. I introduced S. 291, the Regulatory Reform Act of 1995, early 
in this Congress. S. 291 was a good proposal for regulatory reform, and 
was unanimously endorsed by the 15 members of the Governmental Affairs 
Committee. Senator Murkowski also introduced S. 333, a risk assessment 
bill, that was approved by the Energy Committee.
  This floor vehicle is an amalgamation of Senator Dole's S. 343, which 
Senator Hatch guided through the Judiciary Committee, with S. 333 and 
S. 291. Indeed, as the author of S. 291, I can tell you that the major 
provisions of S. 291 are reflected in the Dole compromise bill. These 
provisions include:
  Cost-benefit analysis: The benefits of a regulation must justify its 
costs, unless prohibited by the underlying law authorizing the rule.
  Market-based mechanisms and performance standards: Flexible, goal-
oriented approach are favored over rigid command-and-control 
regulation.
  Review of existing rules: Old rules on the books must be reviewed to 
reform or eliminate outdated or irrational regulations.
  Risk assessment: Agencies must use sound science to measure and 
quantify risks to the environment, health, or safety.
  Comparative risk analysis: Agencies must set priorities to achieve 
the greatest overall risk reduction at the least cost.
  Reform of the Regulatory Flexibility Act: The Regulatory Flexibility 
Act is strengthened to make agencies more sensitive to the impact of 
regulations on small businesses and small governments.
  Congressional review of rules: Rules will not become effective until 
they are reviewed by Congress. Congress can veto irrational or 
ineffective regulations.
  Regulatory accounting: The Government must compile the total costs 
and benefits of major rules.
  Like S. 291, the pending Dole-Johnston amendment has limited judicial 
review so agency rules will not be invalidated for minor procedural 
missteps. However, it also improves upon S. 291 by having a more 
focused cost-benefit test. Regulators must directly set regulatory 
standards so that the benefits of a rule justify its costs, unless 
prohibited by the law authorizing the rule.
  This bill does not override existing law. If the underlying statute 
does not allow for a regulation whose benefits justify its costs, the 
Dole-Johnston compromise merely asks the regulator to select the least-
cost option among the alternatives allowed by the underlying statute.
  This should not be a radical idea. I do not believe that the American 
people think it is radical to ask that the benefits of regulations 
justify their costs.
  I urge my colleagues on both sides of the aisle to support the Dole-
Johnston compromise to put common sense back into our regulatory 
process. Our goal in crafting reform should be to strike a balance that 
is strong but workable. We should keep that goal in mind as the final 
vote approaches. The floor vehicle may not be perfect, but it is a 
crucial step forward. I congratulate all those who have played a 
bipartisan role on this important issue.
  Mr. President, I yield the floor.
  Mr. ABRAHAM addressed the Chair.
  The PRESIDING OFFICER (Mr. Thomas). Who seeks recognition? The 
Senator from Michigan [Mr. Abraham].
  Mr. ABRAHAM. I thank the Chair.
  I rise today, Mr. President, to urge my colleagues to seize the 
historic opportunity we now have to reform the regulatory process. In 
my judgment, we can and must reform this process so that we may reduce 
the regulatory burden on American businesses and consumers.
  Certainly, we can all agree that some regulation is needed to protect 
human health and safety and preserve the environment. But all too often 
the cost of regulation far exceeds the benefits. Too many regulations 
impose huge costs on our economy and people while providing little if 
any benefit.
  Excessive regulation constitutes a hidden tax on America. It adds to 
the price of everything from paint to potato chips and, by increasing 
costs for our State and local governments, ends up raising direct taxes 
as well.
  Mr. President, the tide of regulation in this country is high and it 
is rising. If left unchecked, it threatens to drown our economy in a 
sea of red tape.
  Consider the following:
  First, excessive regulation imposes an enormous burden on our 
economy.
  A recent GAO analysis of existing academic literature found that 
regulation in 1994 cost $647 billion. According to Wayne Crews, of the 
Competitive Enterprise Institute:

       Looked at differently, that is more than the entire 
     economic output of Canada or more than the combined GNP's of 
     Australia and Mexico.

  Or, put another way, an amount greater than all U.S. pretax corporate 
profits combined, which were $456.2 billion in 1993.
  In other words, the cost of regulation in 1994 was estimated to be 
more than all of the corporate profits of every corporation of this 
country. Here on the floor of the Senate, we often hear talk about 
corporate profit taking, corporate profiteers, and so on. I think this 
puts in perspective how costly regulations have become in our country.
  The second point that needs to be made is the size of Government 
bureaucracy has increased to record levels under the current 
administration. According to the Center for the Study of Americans 
Business, the number of bureaucrats devoted to implementing regulations 
was 124,648 in 1995, an all-time record. The center has also calculated 
that the amount of Government spending on regulatory programs was $11.9 
billion, the highest amount ever spent to run the regulatory apparatus.
  Third, the number of pages in the Federal Register, the document in 
which all new regulations are published, was 64,914 in 1994, the 
highest since 1980.
  Fourth, and perhaps most disturbing of all, the cost of Government 
regulation per American family is now $6,457 a year. Combined with the 
cost of taxes per household, the total cost of Government per family 
today is almost $20,000.
 
[[Page S 9355]]

  Now, according to the Americans for Tax Reform, in 1994 the average 
American had to work full time until July 10 to pay his or her share in 
the combined cost of Government taxes and regulations, a week longer 
than was the case in 1990. And that is not the only issue. Like any 
other tax, regulations raise the cost of consumer goods and services, 
lower wages, and increase unemployment. Regulations dampen investment 
and reduce technological innovation.
  But the facts and theory do not tell the entire story. So let me 
share with you a few stories from my State of Michigan that illustrate 
the problem with Washington's excessive and overreaching regulatory 
system. Take, for example, the impact of the EPA's recent regulations 
governing the use and removal of lead-based paint on bridges. Because 
of this regulation, the toll on cars to cross the Mackinac Bridge in 
the Upper Peninsula of Michigan--and this connects the Upper and Lower 
Peninsula--is currently $1.50, one-third more than it would otherwise 
be.
  There is a story behind this as told by Burton Fulsom of the Mackinac 
Center for Public Policy:

       For nearly 30 years after the Mackinac Bridge was completed 
     in 1957, it was painted with a lead-based paint. Every 9 
     years or so, it was sandblasted and repainted. . . .To comply 
     [with the EPA's paint regulation], the Mackinac Bridge 
     Authority will soon be removing the bridge's paint by a 
     process called ``enclosure,'' whereby the structure is 
     cleaned with a tent-like covering to keep paint chips from 
     falling into the water or blowing onto populated areas. The 
     cost of the ``enclosure'' is staggering: Nearly $50 million, 
     which the Authority wants to pay for by budgeting $2.2 
     million each year for the next 21 year. . .. Unfortunately, 
     this ``enclosure'' scheme is a huge--

  Huge and very questionable--

     spending of money.
       No one has ever documented any harm caused by paint chips 
     falling off the Mackinac Bridge. The greater risk, in fact, 
     may be to workers [who will be within the enclosures] 
     inhaling the paint particles or having accidents during the 
     enclosure process.

  Mr. Fulsom further notes that the expenses and risks of EPA's 
mandated paint removal process are being undertaken despite the fact 
that the health risk from lead has been dramatically reduced.
  For example, the Department of Health and Human Resources reports a 
sevenfold drop in national levels of lead in human blood in the last 25 
years. Further, Lakes Michigan and Huron are up to four times cleaner 
than they were 25 years ago. And finally, as Mr. Fulsom has pointed 
out, most of the lead paint problem was from paint inside buildings, 
not outside, and especially not from the bridges.
  Mr. President, this is a prime example of a rule promulgated by 
Washington bureaucrats that is too far reaching and that will produce 
little if any environmental gain but still will impose great costs on 
the citizens and businesses of Michigan's Upper Peninsula. Sometimes 
regulatory agencies actually demand that more dangerous procedures be 
used merely in order to protect the agency's power and authority.
  To take another example from Michigan: The sediment on the bottom of 
Lake Michigan's Manistique Harbor contains quantities of PCB's. These 
contaminants can be cleaned either by capping them with a layer of clay 
or by dredging them up and out of the harbor. Capping would cost about 
$3.5 million. Dredging would cost nearly $15 million. Separate studies 
conducted by the EPA and private parties both concluded that capping 
would protect the environment better than dredging, which necessarily 
would stir up and release the PCB's into the harbor. Because capping is 
obviously the most cost-effective remedy, Michigan's Governor, John 
Engler, and the Michigan Department of Natural Resources and the 
Manistique local government, State representatives, and our 
congressional delegation all expressed support for capping rather than 
dredging the PCB's in the harbor.
  Yet, for months on end, the EPA indicated it would require that the 
harbor be dredged. The EPA generally prefers dredging over capping, and 
an internal EPA memorandum states that allowing the harbor to be capped 
would set a ``risky precedent.'' Adherence to this position would 
bankrupt the Manistique economy, putting many people in the community 
out of work; all this while actually increasing PCB contamination.
  Fortunately, it now appears that the EPA will allow the harbor to be 
capped, but this comes only after Manistique businesses incurred 
enormous legal fees and after I and the other members of the Michigan 
delegation repeatedly expressed our vehement opposition to dredging the 
harbor. Absent those extraordinary circumstances, there is no doubt 
that the EPA would have required that the harbor be dredged. Here then 
was one near miss in terms of regulatory overreach. But even if the 
regulations and their interpretations were rational, the cost of 
conforming with EPA paperwork requirements would still be staggering.
  In yet another example, Kent County, MI, recently spent $300,000 on 
EPA-ordered work at a closed landfill. Of that amount, $80,000 was 
strictly for the cost of preparing reports for the agency. This means, 
Mr. President, that the taxpayers of Kent County, MI, paid $80,000, 
more than a quarter of the full cost of compliance, merely for 
paperwork filing. Nationwide, individuals and businesses spent about 
$200 billion to process paperwork and to pay legal and accounting fees, 
according to economist Thomas Hopkins from the Rochester Institute of 
Technology.
  Mr. President, the need to lift the excessive red tape burden on 
America's small businesses--which are engines of job creation in our 
economy--is perhaps the most compelling reason for regulatory reform. 
Because of huge administrative and paperwork costs, regulation is 
disproportionately a burden to small- and medium-sized businesses. 
Small businesses simply do not have the resources to absorb the direct 
costs of regulation or hire lawyers, consultants, lobbyists, and 
accountants to comply with paperwork requirements. Indeed, complying 
with Government regulation has replaced making a profit or a better 
product as the primary concern of many of America's small business 
people.
  According to a recent Arthur Andersen survey of 1,000 midsized 
businesses, 52 percent said Government regulation was their biggest 
challenge, while only 18 percent said turning a profit.
  Mr. President, it seems clear, in my judgment, that regulations often 
unnecessarily distort business decisions. They make business people put 
their resources into filing paperwork instead of making profits. This 
increases product prices, reduces consumer choice, lowers quality, and 
even causes some businesses not to hire new workers. The Center for the 
Study of American Business provides real world examples of the negative 
consequences of regulation on job creation. Dr. Murray Weidenbaum of 
that center reports that:

       World Class Process Inc., a new and growing Pittsburgh 
     processor of flat-rolled steel coils, has increased its work 
     force to 49. According to the company's chief financial 
     officer, ``We are going to keep it at 49 as long as we can,'' 
     in order to avoid being subject to the 50 or more employees 
     threshold for coverage under [various programs such as the 
     Family Leave Act.]

  Similarly, other studies indicate that firms are using 50 employees 
or other similar numerical limits as a basis to avoid various paperwork 
requirements of the Federal Government.
  Mr. President, this does not help our economy. I submit we no longer 
can afford to ignore the concerns of small businesses. I understand 
that there will be amendments offered to our regulatory reform bill by 
Senators Domenici and Bond to ensure that the needs and certainly the 
problems of small business are adequately represented in the regulatory 
process.
 I will certainly support those efforts and urge my colleagues to do 
the same.

  Mr. President, we have already begun to act with a new awareness to 
solve the problem of overregulation. Our legislation, in regard to 
unfunded mandates, which was passed and signed into law earlier this 
year, is a case in point. Through it, we recognized that Federal 
demands bring costs with them, and that these costs do not necessarily 
represent the best use of a city's, State's, or business' money.
  But the most important step we can take to stem the tide of 
regulation, in my view, is the regulatory reform bill we will be 
debating. This bill will require rules to be cost-effective and require 
agencies to use sound science in assessing dangers to the public. It 
will 

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help prioritize risks, thereby targeting the use of our resources 
toward those activities and substances that pose the greatest risks. It 
will see to it that agencies take all pertinent information and all 
viable options into account before increasing the regulatory burden on 
the American people.
  When combined with the unfunded mandates law, this regulatory reform 
bill will do much to free the American people from unnecessary 
regulations. In this way, it will increase consumer options, lower 
prices, increase productivity and, most important, increase the amount 
of freedom enjoyed by the American people.
  Mr. President, in closing, I want to congratulate the majority leader 
and Senators Hatch, Roth, Nickles, Murkowski, Johnston, and others for 
their efforts in putting together this compromise measure. I believe 
there are provisions in this bill that could have been much stronger, 
such as the decisional criteria, judicial review, and sunset 
provisions, but I believe we have worked very conscientiously and in 
good faith on both sides to move us to the point of completing a very 
important piece of legislation, and I applaud those who have been 
central to those discussions.
  It is my hope that ultimately we will have the kind of strong bill 
come out of our final deliberations and conference that will create the 
proper balance between the necessary health and safety and 
environmental needs of the American people, on the one hand, and the 
freedom and liberty that we all seek for our country on the other.
  Mr. President, I yield the floor.

                          ____________________