[Congressional Record Volume 143, Number 25 (Monday, March 3, 1997)]
[Senate]
[Pages S1837-S1840]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ABRAHAM (for himself, Mr. Bond, Mr. Nickles, Mr. 
        Hutchinson, Mr. Helms and Mr. Sessions):
  S. 389. A bill to improve congressional deliberation on proposed 
Federal private sector mandates, and for other purposes.


                  THE MANDATES INFORMATION ACT OF 1997

  Mr. ABRAHAM. Mr. President, I rise today to introduce the Mandates 
Information Act of 1997. This bill in my view furthers the cause of 
careful deliberation in this, the greatest deliberative body in the 
world. It will force Members of Congress to carefully consider all 
aspects of potential legislation containing mandates affecting 
consumers, workers, and small businesses.
  I am proud to say that my colleagues and I aided the cause of careful 
deliberation during the last Congress. We passed the Unfunded Mandates 
Reform Act of 1995. That legislation required the Congressional Budget 
Office to make two key estimates with respect to any bill reported out 
of committee: First, whether the bill contains intergovernmental 
mandates with an annual cost of $50 million or more; and, second, 
whether the bill contains private sector mandates with an annual cost 
of $100 million or more. The 1995 act also established a point of order 
against bills meeting the $50 million

[[Page S1838]]

cost threshold for intergovernmental mandates. Although the point of 
order can be waived by a simple majority vote, it encourages Congress 
to think carefully before imposing new intergovernmental mandates.
  The 1995 act did not apply its point of order to private sector 
mandates. This was understandable, given the bill's focus on 
intergovernmental mandates. But States and localities are not alone in 
being affected by Federal mandates. Consumers, workers, and small 
businesses also are affected when the Federal Government passes along 
the costs of its policies. This is why the Mandates Information Act of 
1997 will apply a point of order to bills meeting the $100 million cost 
threshold for private sector mandates, while also directing the CBO to 
prepare a ``Consumer, Worker, and Small Business Impact Statement'' for 
any bill reported out of committee.
  These reforms are necessary in my view, Mr. President, because the 
1995 act, while effective in its chosen sphere of intergovernmental 
mandates, does not contain the necessary mechanisms to force Congress 
to think seriously about the wisdom of proposed mandates on the private 
sector. This leaves our private sector faced with the same dilemma once 
faced by our States and localities: Congress does not give full 
consideration to the costs its mandates impose. Focusing almost 
exclusively on the benefits of unfunded mandates, Congress pays little 
heed to, and sometimes seems unaware of, the burden that unfunded 
mandates impose on the very groups they are supposed to help.
  Unfunded mandate costs by definition do not show up on Congress' 
balance ledger. But, as President Clinton's Deputy Treasury Secretary 
Lawrence Summers has written, ``[t]here is no sense in which benefits 
become `free' just because the government mandates'' them. Congress has 
merely passed the costs on to someone else.
  And that ``someone'' is the American people. As economists from 
Princeton's Alan Krueger to John Holohan, Colin Winterbottom, and 
Sheila Zedlewski of the Urban Institute agree, the costs of unfunded 
mandates on the private sector are primarily borne by three groups: 
consumers, workers, and small businesses.
  What forms do these costs take? For consumers, mandate costs take the 
form of higher prices for goods and services, as unfunded mandates 
drive up the cost of labor.
  For workers, the costs of unfunded mandates often take the form of 
significantly lower wages. According to the Heritage Foundation, a 
range of independent studies indicates that some 88 percent of the cost 
of private sector mandates are shifted to workers in the form of lower 
wages.

  And mandates can cause workers to lose their jobs altogether. Faced 
with uncontrollable increases in employee costs, our job creators too 
often find that they can no longer afford to retain their full 
complement of workers. The Clinton health care mandate, for example, 
would have resulted in a net loss of between 200,000-500,000 jobs, 
according to a study conducted by Professor Krueger.
  Small businesses and their potential employees also suffer. Mandates 
typically apply only to businesses with at least a certain number of 
employees. As a result, small businesses have a powerful incentive not 
to hire enough new workers to reach the mandate threshold. As the Wall 
Street Journal recently noted, ``The point at which a new [mandate] 
kicks in * * * is the point at which the [Chief Financial Officer] asks 
`Why grow?' ''
  That question is asked by small businesses all over the country, but 
let me cite one example from my State. Hasselbring/Clark is an office 
equipment supplier in Lansing, MI. Noelle Clark is the firm's treasurer 
and secretary. Mindful of the raft of mandates whose threshold is 50 
employees, Ms. Clark reports that lately ``we have hired a few temps to 
stay under 49.'' Thus, unfunded mandates not only eliminate jobs, but 
also prevent jobs from being created.
  Much as Members of Congress may wish it were not so, mandates have a 
very real cost. This does not mean that all mandates are bad. But it 
does mean that Congress should think very carefully about the wisdom of 
a proposed mandate before imposing it.
  Such careful thinking, Mr. President, is the goal of the Mandates 
Information Act of 1997. Just as the Unfunded Mandates Reform Act of 
1995 protects State and local governments from hasty decisionmaking 
with respect to proposed intergovernmental mandates, the Mandates 
Information Act would protect consumers, workers, and small businesses 
from hasty decisionmaking with respect to proposed private sector 
mandates. It would do so, in essence, by extending the reforms of the 
1995 act to private sector mandates.
  The bill I introduce today would build on the 1995 act's reforms in 
two ways. First, to give Congress more complete information about the 
impact of proposed mandates on the private sector, my bill directs CBO 
to prepare a ``Consumer, Worker, and Small Business Impact Statement'' 
for any bill reported out of Committee. This statement would include 
analyses of the bill's private sector mandates' effects on the 
following: First, consumer prices and [the] actual supply of goods and 
services in consumer markets; second, worker wages, worker benefits, 
and employment opportunities; and third, the hiring practices, 
expansion, and profitability of businesses with 100 or fewer employees.
  But providing Congress with more complete information about the 
impact of proposed private sector mandates will not guarantee that it 
pays any attention to it. This we know from experience. In 1981, 
Congress enacted the State and Local Government Cost Estimate Act, 
sponsored by Senator Sasser. Pursuant to that act, CBO provided 
Congress with estimates of the cost of intergovernmental mandates in 
bills reported out of committee. But Congress routinely ignored this 
information. It did so because the 1981 act had no enforcement 
mechanism to force Congress to consider the CBO estimates. As Senator 
Sasser himself explained in introducing a follow-up bill in 1993, 
``[t]he problem [with the 1981 act], it has become clear, is that this 
yellow caution light has no red light to back it up.''
  To supply that ``red light,'' Senator Sasser's Mandate Funding Act of 
1993 contained a point of order. Of course, the Unfunded Mandates 
Reform Act of 1995 likewise contained a point of order, which is why it 
succeeded where Senator Sasser's 1981 act had failed.
  The Mandates Information Act of 1997 will provide this red light for 
proposed private sector mandates. It contains a point of order against 
any bill whose private sector mandates exceed the $100 million 
threshold set by the 1995 act. Like the 1995 act's point of order 
against intergovernmental mandates, the 1997 bill's point of order can 
be waived by a simple majority of Members. Thus it will not stop 
Congress from passing bills it wants to pass.
  But the point of order will serve a vital purpose. It will ensure 
that Congress does not ignore the information contained in the 
consumer, worker, and small business impact statement. It will do so by 
allowing any Member to focus the attention of the entire House or 
Senate on the impact statement for a particular bill.
  The Mandates Information Act of 1997 will provide Congress with more 
complete information about proposed mandates' effects on consumers, 
workers, and small businesses. It will also ensure that Congress 
actually considers this information before reaching a judgment about 
whether to impose a new mandate. The result, Mr. President, will be 
focused, high-quality deliberation on the wisdom of private sector 
mandates.
  Because of the success of the 1995 act, Congress is now much more 
careful to consider the interests of State and local governments in 
making decisions about unfunded mandates. But Congress must be just as 
careful to consider the interests of consumers, workers, and small 
businesses in making such decisions. This bill will ensure that care, 
helping produce better legislation; legislation that imposes a lighter 
burden on working Americans.
  Mr. President, I ask unanimous consent that the following sample of 
letters from small business groups supporting the bill be introduced in 
the Record, along with a list of groups that have expressed their 
support for it.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page S1839]]

     Organizations Supporting the Mandates Information Act of 1997


                         national organizations

  Chamber of Commerce of the United States; National Association of 
Wholesaler-Distributors; National Federation of Independent Businesses; 
National Retail Federation; Small Business Survival Committee; National 
Restaurant Association; National Association for the Self-Employed.


                         michigan organizations

  Associated Underground Contractors, Inc.; Grand Rapids Area Chamber 
of Commerce; Michigan Association of Timbermen; Michigan Chamber of 
Commerce; Michigan Farm Bureau Family of Companies; Michigan NFIB; 
Michigan Retailers Association; Michigan Soft Drink Association; Small 
Business Association of Michigan.
                                                                    ____

                                            National Federation of


                                         Independent Business,

                                Washington, DC, February 11, 1997.
     Hon. Spencer Abraham,
     U.S. Senate,
     Washington, DC.
       Dear Senator Abraham: On behalf of the more than 600,000 
     members of the National Federation of Independent Business 
     (NFIB), I want to express support for the Mandate Information 
     Act of 1997
       In 1995 with the passage of the Unfunded Mandates Act, 
     Congress acknowledged the significant problem that federal 
     government mandates have on the operation of states and 
     localities. Government mandates create equally burdensome 
     problems on the private sector and especially small 
     employers. These federal mandates discourage small business 
     start-ups, growth and job creation.
       Our members have consistently ranked unreasonable 
     government regulation as one of their top concerns. The 
     Mandate Information Act works to address the problem of 
     federal mandates on small businesses by applying the reforms 
     put in place by the Unfunded Mandates Act of 1995 for state 
     and local government to the private sector. This would 
     require Congress to weigh more carefully the impact of 
     proposed legislation on small businesses and their employees.
       We commend you on your efforts to reduce the government 
     mandated burdens a small business must shoulder and look 
     forward to working with you to ensure that this positive 
     reform becomes law.
           Sincerely,

                                                   Dan Danner,

                                                   Vice President,
     Federal Governmental Relations.
                                                                    ____



                                          Chamber of Commerce,

                                  Washington, DC, January 7, 1997.
     Hon. Spencer Abraham,
     U.S. Senate,
     Washington, DC.
       Dear Senator Abraham: I am pleased to offer the support of 
     the U.S. Chamber of Commerce Federation for your proposed 
     legislation, the Mandates Information Act of 1997.
       One of the key success stories of the 104th Congress was 
     the adoption of bipartisan unfunded mandates reform requiring 
     Congress to consider the cost and consequences of federal 
     requirements on state and local government. Another important 
     component of this law was the requirement that significant 
     federal mandates on the private sector be measured and made 
     public. Such mandates have an enormous impact on consumers, 
     small businesses and workers in the form of higher prices, 
     fewer jobs, declining good and services and reduced workers 
     benefits. Moreover, these mandates are likely to escalate as 
     scarce budgetary resources will place even greater pressure 
     on utilizing federal regulations as a means of implementing 
     government programs and initiatives.
       [The Mandates Information Act would provide the next 
     necessary step to promote greater public and congressional 
     accountability regarding the impact of federal mandates.] It 
     builds upon the success of the unfunded mandates law by 
     requiring Congress to have more information on who will be 
     affected and ultimately pay the costs associated with these 
     mandates. It would allow Member of Congress to vote on each 
     mandate--considering not only its benefits but its effect on 
     the private section as well as the economy, jobs and 
     consumers.
       [It is good government policy for Congress to engage in the 
     practice of legislating with the necessary information 
     concerning the impact of their actions. Policymakers have the 
     responsibility and obligation to make informed decisions and 
     to be accountable for the consequences of those decisions.] 
     Such a proposal would help ensure that when resources are 
     diverted from jobs, wages and families into government rules, 
     the impact are fully considered.
       The U.S. Chamber of Commerce Federation, the world's 
     largest federation of business, chambers of commerce and 
     business organizations representing every size and sector of 
     the nation's economy, looks forward to working with you in 
     seeking adoption of this common sense, good government 
     proposal.
           Sincerely,
     R. Bruce Josten.
                                                                    ____



                                   National Retail Federation,

                                Washington, DC, February 12, 1997.
     Hon. Spencer Abraham,
     U.S. Senator,
     Washington, DC.
       Dear Senator Abraham: On behalf of the National Retail 
     Federation, the world's largest retail trade association, I 
     am writing to support your legislation, the Mandates 
     Information Act of 1997.
       Too often Congress passes new mandates on entrepreneurs 
     without understanding the actual cost. Many times, mandates 
     look good on paper, but can have a disastrous effect once 
     implemented. Your legislation will correct that once and for 
     all.
       The costs associated with mandates, as you well know, are 
     more than direct cash outlays, these costs mean less economic 
     growth, fewer jobs created and higher costs to consumers. 
     Congress' worthy goal of balancing the budget, combined with 
     desires of some to ``deliver more things'' to voters that the 
     government doesn't have to pay for, will put more pressure 
     than ever on Members of Congress to burden business.
       New mandates automatically won't be stopped, only 
     automatically considered under this bill. That's right in 
     line with Main Street. The Abraham legislation assures 
     retailers and other entrepreneurs that Congress will consider 
     the impact of proposed mandates set forth in the CBO 
     Consumer, Worker and Small Business Impact Statement before 
     they are simply enacted into law.
       Again, thank you for your leadership against new mandates. 
     We look forward to working with you to pass this legislation.
           Sincerely,

                                               John J. Motley,

                                            Senior Vice President,
     Government and Public Affairs.
                                                                    ____



                                 Michigan Chamber of Commerce,

                                    Lansing, MI, January 31, 1997.
     Hon. Spencer Abraham,
     U.S. Senate,
     Washington, DC.
       Dear Spence: Your proposed ``Mandates Information Act of 
     1997'' is a great idea!
       As you know, the Michigan Chamber and many other taxpayer 
     groups supported--and voters approved--the Headlee Amendment 
     to the State Constitution in 1978 that required state 
     mandates on local government to be funded by the State. This 
     has caused greater legislative and executive branch 
     evaluation of state program mandates and related costs on 
     local units of government and resulted in funding of any 
     mandates by the state. The Michigan Chamber also supported 
     adoption of unfunded mandates reform during the 104th 
     Congress.
       It's important that Congress now consider protection for 
     the private sector from new unfunded mandates. Careful 
     consideration of the impact of federal mandates on state and 
     local government should be extended to job providers and 
     consumers.
       The Michigan Chamber of Commerce and our 6,500 member firms 
     are pleased to support this needed legislation.
           Sincerely,
                                                      Jim Barrett,
     President.
                                                                    ____

                                                    Small Business


                                      Association of Michigan,

                                    Lansing, MI, January 31, 1997.
     Hon. Spencer Abraham,
     U.S. Senate, Dirksen Senate Office Building, Washington, DC.
       Dear Senator Abraham: The Small Business Association of 
     Michigan (SBAM is pleased with your decision to introduce the 
     ``Mandates Information Act.'' Your bill will help protect 
     small businesses from the financial impact of Congressional 
     mandates.
       Congressional mandates imposed on the private sector are 
     already driving down worker wages, increasing consumer costs 
     and reducing the availability of goods and services. These 
     mandates could multiply as a result of the effort for a 
     balanced budget. As funding becomes increasingly scarce, 
     advocates of increased government intrusion in the private 
     sector will try to shift program costs to small businesses in 
     the form of new mandates.
       A key provision of your legislation is the small business 
     impact statement--to inform Congressional members about 
     mandates and their impact on the private sector. The bill 
     will direct the CBO to estimate the impact of a bill's 
     mandates on consumer cost, worker wages, the availability of 
     goods and services and small business job creation.
       SBAM is Michigan's latest state based small business 
     association representing 8,000 businesses in all of 
     Michigan's 83 counties. We look forward to working with you 
     on this important small business issue.
           Sincerely,

                                             Barry S. Cargill,

                                                   Vice President,
                                             Government Relations.

  Mr. BOND. Mr. President, I rise today in support of the Mandates 
Information Act of 1997. I am pleased to be an original cosponsor of 
this important legislation, and I applaud my distinguished colleague 
from Michigan, Mr. Abraham, for his leadership in this effort.
  The bill we are introducing today continues the work begun in the 
104th Congress with the enactment of the ``Unfunded Mandates Reform Act 
of 1995--the 1995 act--authored by Mr.

[[Page S1840]]

Kempthorne to ensure that Congress is well advised of the cost unfunded 
mandates would impose on State and local governments. I was a cosponsor 
of the 1995 act, and I believe the time has come for us to expand its 
provisions to require similar detailed information and accountability 
on unfunded mandates affecting the private sector--so we can protect 
consumers, workers, and small businesses.
  As chairman of the Senate Committee on Small Business, I am all too 
aware of the disproportionate burden Federal regulations impose on our 
Nation's small businesses. A 1995 study found that an average firm with 
less than 20 employees spent approximately $5,500 per employee in 1992 
to comply with Federal regulations--compared with $3,000 per employee 
by firms with 500 or more employees. The overall cost to the economy is 
between 6 and 9 percent of gross domestic product--between $420-670 
billion--in 1995 dollars--in regulatory compliance. Before we permit 
the Federal Government to adopt any new mandate that would add to this 
burden, the Congress needs to be fully informed of the new costs to be 
imposed on the economy so we can make an informed judgment.
  The reforms proposed in this bill are needed to ensure that the 
Congress gives careful and thoughtful consideration to the impact 
unfunded mandates impose on the private sector. The ability of small 
businesses to compete and create new jobs can be hindered by unfunded 
mandates, we need to be aware of the magnitude of any future adverse 
effects. The Committee on Small Business will continue its work to 
ensure that the Government's actions here in Washington foster the 
growth of small businesses located on Main Street. This bill will help 
to ensure that all Members of Congress are equally informed of the 
effects a bill would have on the customers, employees, and owners of 
America's small businesses, the engine of our Nation's economic growth.
  The legislation Senator Abraham and I are introducing today will 
ensure that the private sector impact of unfunded mandates is addressed 
during deliberations on legislation imposing those mandates. Consumers, 
workers, and small businesses will benefit from the reforms to enhance 
congressional deliberations on unfunded mandates affecting the private 
sector. The Mandates Information Act of 1997 establishes a new 
parliamentary point of order against any bill that will impose private 
sector mandates exceeding a $100 million cost threshold. The measure 
directs the Congressional Budget Office to estimate the impact of the 
proposed unfunded mandates on consumer costs, worker wages, and the 
availability of goods and services.
  As with the Unfunded Mandate Reform Act of 1995, the point of order 
authorized by the bill would bar the House or Senate from further 
action on a proposed measure unless a majority agrees to move forward 
with the initiative. By authorizing a point of order triggered by 
private sector impacts, the legislation introduced today puts teeth 
into the law to ensure that Congress addresses the costs that would be 
imposed by the unfunded mandates on small businesses, consumers, and 
workers. This change requires Members of Congress to go on record as 
either supporting or opposing an unfunded mandate that would add costs 
to the private sector.

  With the aid of a consumer, worker, and small business impact 
statement, Members of Congress will have the information required to 
make an informed decision on the merit of imposing a mandate without 
also providing funding for compliance. The impact statement would be 
prepared by the Congressional Budget Office--which the bill directs to 
estimate the economic impact of a proposed mandate on consumers, wages, 
and the availability of goods and services.
  All in all, this bill is about good governance. It provides 
information to ensure that Congress is fully informed on the impact of 
an unfunded mandate on the economy and the private sector in 
particular. By tasking the Congressional Budget Office with preparing 
an impact statement, the bill also provides important information to 
educate Congress on the effect of pending legislation. This, in itself, 
is an important step toward ensuring that the needs and concerns of 
small businesses, and the workers and customers that depend on small 
businesses, are given the attention they deserve by Congress. As with 
the Small Business Regulatory Enforcement Fairness Act of 1996--or the 
Red-Tape Reduction Act as I prefer to call it--today's bill seeks to 
ensure that the Government treats small business fairly. The Mandates 
Information Act has the support of the National Federation of 
Independent Business, the National Restaurant Association, the U.S. 
Chamber of Commerce, the National Retail Association, the National 
Association of Wholesaler-Distributors, and the Small Business Survival 
Committee--I urge my colleagues to join our efforts to enact this bill 
and enhance our efforts to ensure good governance.
                                 ______