Testimony of
                               
                       Susan M. Walthall
                     Acting Chief Counsel
                               
                       Kevin L. Bromberg
                    Assistant Chief Counsel
                     Environmental Policy
                               
                      Office of Advocacy
              U.S. Small Business Administration
                               
                               
             Review of Arsenic and Drinking Water
                   September 2001 NRC Report
                               
       Before the Environment, Technology and Standards
                         Subcommittee
                               
                    House Science Committee
                               
                        October 4, 2001

     The Office of Advocacy of the U.S. Small Business
Administration is pleased to have the opportunity to provide
written testimony on the prepublication copy of  the National
Research Council's (NRC) report, Arsenic in Drinking Water:
2001 Update (hereinafter NRC II) released last month regarding
the risks of arsenic in drinking water.  The Office of
Advocacy was established by Congress pursuant to Pub. L. 94-
305 to represent the views of small business before Federal
agencies and Congress.  Over the last two years, we have
worked closely with the Environmental Protection Agency (EPA)
in the development of the proposed and final regulations for
arsenic in drinking water.  This includes a review of the
draft arsenic regulation in a formal proceeding under the
Small Business Regulatory Enforcement Fairness Act (SBREFA) in
1999, involving the Office of Management and Budget and EPA.
EPA tasked the National Research Council(1) to address the
risks of arsenic in drinking water to aid EPA in its review of
the arsenic final rule promulgated in January 2001 by the
previous Administration.
     
     The EPA final regulation at 10 parts per billion (ppb)
will cost small water systems hundreds of millions of dollars
to reduce arsenic risks that may be small or nonexistent.
This will adversely affect tens of thousands of citizens,
primarily in rural America, who can ill afford spending an
additional several hundred dollars per year.  Small water
suppliers would likely shut down, forcing individual
homeowners to drill their own wells, and be exposed to
potentially higher levels of arsenic. Money allocated for
treatment of arsenic is money that will not be available for
other more pressing local needs such as police, fire, health
and education.  Therefore, the arsenic science review which
would help EPA determine the magnitude of the arsenic health
issue is critical to small water suppliers and small local
governments.
     
     We describe below our findings that the NRC did not
follow its procedures under the Section 15 of the Federal
Advisory Committee Act (FACA) Amendments of 1997, and the NRC
II report does not fairly or comprehensively address the
scientific issues that EPA asked the NRC to address.  The NRC
first refused to identify the FACA procedures that it was
following, and then ultimately declined not to follow its own
procedures that are designed to ensure that a fair and
balanced group of scientists were selected to write the
report.   As a result, to our knowledge, the panel consisted
mostly or entirely of scientists who were predisposed toward
increased control of arsenic in drinking water and against
consideration of risk models not favored by current EPA
policy.  This was contrary to the 1992 NRC policy which
dictates that panels should reflect the full diversity of
viewpoints.  The final report, although drafted with great
care, is unfortunately clearly biased toward increasing the
risk estimate.

     As a result, the NRC II report very likely provides a
substantial overestimate of the true risk of arsenic in
drinking water.  Unlike an environmental spokesperson who
recently remarked that arsenic is "not complex . . . It is
scary and dangerous," playing to popular misconceptions about
arsenic, the scientific issues are complex, and warrant the
serious scrutiny that EPA has requested.  The NRC II report,
although elegantly and smoothly written, unfortunately
provides a distorted picture of several aspects of this
complex issue, and may do more to exaggerate than to
illuminate the true risks fairly.

I.  The NRC Did Not Follow Its Internal Procedures Under
Section 15 of FACA To Ensure A Balanced Panel and the
Resultant Report Reflects A Lack Of Balance
     
     We provided comments on the scientific integrity issues
associated with the NRC Subcommittee to Update the 1999
Arsenic in Drinking Water Report on several occasions to the
NRC during May through July of this year.  The Office asked
that the NRC follow the scientific integrity procedures
prescribed by the organization's own procedures for
implementing the 1997 Federal Advisory Committee Act (FACA)
Amendments, including those which ensure public disclosure of
the backgrounds of the members of the provisional arsenic
subcommittee members.  The FACA requires that the NRC take
steps to ensure that a fair and balanced set of scientists are
selected for preparation of advisory reports to the Federal
government, and that there is public access to the data and
information used by the scientists to facilitate public input
into NRC.  These specific procedures were established in
August 1998 by the NRC to implement these statutory
requirements.  Unfortunately, the June 29th NRC response
described only its compliance with the bare bones statutory
FACA requirements, without reference to its more explicit
internal procedures for compliance with the statute, despite
our specific references to the NRC procedures in our June 19th
letter.
     
      We wondered why the NRC had failed to address the
specific allegations in the June 19th letter until we later
learned, to our surprise, that the procedures designed to
effectuate public access to the NRC process that we cited in
the letter were "not available to the public."    Dr. Alberts,
President of the National Academy of Sciences, testified in
1998 that this law had a "positive effect by making our
deliberations and processes more accessible and transparent to
the interested public."  We find it quite odd that these
procedures about transparency of the FACA process were no
longer transparent.  They first appeared, to our knowledge, in
a December 1998 General Services Administration (GSA) Report
to Congress,  but somehow, in the interim, these procedures
were quietly removed from the public domain and made known
only to the NRC and  staff.  Indeed, the NRC public access
reading room personnel did not have knowledge of any such
procedures when we first inquired in May of this year.
Ultimately, the NRC  never notified us about the existence of
any such specific procedures despite weeks of requests, until
after we had received a copy elsewhere.  We only learned of
the existence of the actual procedures from communicating with
GSA.   We now know that, had the NRC attempted to describe its
compliance with the internal procedures that it failed to
acknowledge or provide, it would have been apparent that the
NRC was not following its procedures.(2)
     
     We are not the first organization to note that the NRC
has not always been following its internal FACA procedures.
Only last fall, Dr. William Colglazier, Executive Officer of
the National Academy of Sciences, acknowledged an oversight
regarding the provision of information to the public about
panel biographies of  the Committee on Environmental Impacts
Associated with Commercialization of Transgenic Crops
(EIACTC), in an October 2000  letter , after a complaint was
filed by the Center for Science in the Public Interest.
     
     In a July 12th letter to the NRC, the Office of Advocacy
further questioned whether the composition of the panel
reflected the diversity of viewpoints required by the NRC
procedures.  In September, the NRC Arsenic Subcommittee
released its pre-publication report (NRC II).
     
     Although very elegantly written and footnoted, the NRC II
report merely takes the very same Southwestern Taiwan dataset
from the original NRC arsenic report in 1999 (hereinafter, NRC
I), modifies some of the key assumptions used in NRC I, and
revises the dose-response model, all of which had the effect
of individually and collectively inflating the arsenic risk
from the NRC I estimate.   Simply stated, in large part, NRC
II simply took many of the intermediate risk assumptions, and
substituted assumptions that would increase the risks.
Naturally, if one revises upward the risks calculated in the
intermediate assumptions, the overall estimated risk, which is
dependent on these intermediate building block assumptions,
also increases. Consequently, the risks estimated by NRC II
appear markedly higher, without consideration of any new data.
Equally importantly, the NRC II report, although it is an
"update" of NRC I, failed to tell the whole story.  The report
does not acknowledge the existence of several studies that are
inconsistent with its new higher estimate, and omits or
inadequately describes the implications of several recent
studies that provide evidence of a threshold effect for
various forms of cancer.  In other words, NRC II failed to
address properly studies that showed that elevated risks of
skin, lung and bladder cancer only appear at drinking water
concentrations in excess of approximately 100 ppb, which is
contrary to the NRC II policy assumption that the risk
increases linearly from zero concentration at the lower
concentrations where US exposures commonly exist.
     
     We were disappointed, but not surprised by the
conclusions of this panel, given the NRC's apparent
disinterest in assembling a fair and balanced panel (also
described further below).   The NRC should carefully consider
the constructive criticisms of its report offered here and by
others, before it completes the final version of the report.

II. Background - Federal Advisory Committee Act Requirements
at the NRC

     The 1997 FACA Amendments specifically require that "[t]he
Academy shall make its best efforts to ensure that (A) no
individual appointed to serve on the committee has a conflict
of interest that is relevant to the functions to be performed,
unless such conflict is promptly and publicly disclosed and
the Academy determines that the conflict is unavoidable . .
.."  As part of this procedure, the Academy posts provisional
panel biographies on the Internet, and provides for a twenty-
day comment period on those provisional nominations.  After a
review of the comments, the NRC determines the final
composition of the panel.
     
     The NRC procedure is either to find panelists without
biases, or to identify a "balance of potentially biasing
backgrounds or professional or organizational perspectives,"
where it cannot do so.(3) Here, however, the NRC chose at
least four panelists of the eight that we could identify had
public positions on arsenic.  These same four were on the
previous subcommittee that issued the NRC I report in 1999.
Those four panelists (a total of five NRC I panelists served
on NRC II) concluded that "that the current [Maximum
Contaminant Level] MCL for arsenic in drinking water of 50
ug/L does not achieve EPA's goal for public health protection
and therefore requires downward revision as promptly as
possible."(4) Thus, all five returning panelists appeared to
be all on one side of the issue, favoring a significant
decrease from the current standard.

A. Concern with Balance of Views of the Arsenic Subcommittee

     In contrast to the NRC, the Environmental Protection
Agency finds that  "[a]s a general rule, experts who have made
public pronouncements on an issue [e.g., those who have
clearly "taken sides"] may have difficulty in being objective
and should be avoided."(5) We agree with EPA that the public
positions taken by provisional panelists are important
evidence of potential panel member bias (and normally would be
treated as a factor for disqualification).

     From a June search of the Westlaw database and other
articles that we have reviewed, we have determined that Dr.
Kosnett has endorsed a 5 ppb standard,(6) and all five
returning panelists favor a "prompt" reduction in the standard
from 50 ppb.  No information on public positions was found
regarding Bailus Walker, Kimberly Thompson,(7) or Rogene
Henderson, the three new panelists.
     
     In addition, we noted that, of all five returning
subcommittee members, none were among the four who expressed
concern about being pressured by NRC staff in the writing of
the report, nor were they among those who expressed doubts
about the validity of the Southwestern Taiwan data risk
extrapolations.   In combination with the nomination of Dr.
Kosnett, who has publicly supported the final 10 ppb standard
now being questioned, we believe there is a serious question
concerning the balance of the subcommittee members.
     
     We were also surprised that NRC initially resisted
providing any background information about the panelists
(beyond the short biographies), indicating that the panelist
questionnaires were "confidential" under internal NRC rules.
This was before we learned of the 1998 guidelines and the
correspondence about the EIACTC subcommittee where we then
learned that the internal procedure was to reveal the
background, public positions, etc. of all panelists for public
comment.  After the inquiry from the Center for Science in the
Public Interest last year, the NRC posted new, more complete
panelist biographies, and solicited new panelist names.
However, when we made a similar plea to provide this
information on the Web site, the NRC did not respond directly
to our request, indicating only that the NRC was in compliance
with all statutory requirements.  To this day, we still don't
know why  NRC did not comply with our straight-forward
request.   Is the public not supposed to know that Dr. Kosnett
publicly favored a 5 ppb standard, and that his view is not
balanced by any panelist who favors consideration of retaining
the current 50 ppb standard, or who favored examination of  a
threshold model with some dataset, as some industry scientists
suggested to the NRC?  Does the NRC have a double standard
here: one for public interest groups and one for industry?
     
B.  Members Who Served on the 1999 Subcommittee Have A
Conflict of Interest and Should Not Have Served on the 2001
Subcommittee.

     We provided detailed comments on this issue on May16 th
and July 12th  to the NRC.  We believe that, based on the 1992
NRC Policy on Disclosure of Personal Involvements and Other
Matters Potentially Affecting Committee Service (hereinafter,
"NRC Policy") , those scientists who served on the 1999
subcommittee (for the NRC I report) should not be participants
in the review and update of NRC I.   The NRC Policy states
that "an individual should not serve as a member of a
subcommittee engaged in a study in which a critical review and
evaluation of the individual's own work . . . is expected to
be a central purpose of the study, but such an individual may
provide relevant information to the study."  NRC Policy at 4.

      The 1997 Federal Advisory Committee Act Amendments
specifically require that "[t]he Academy shall make its best
efforts to ensure that (A) no individual appointed to serve on
the committee has a conflict of interest that is relevant to
the functions to be performed, unless such conflict is
promptly and publicly disclosed and the Academy determines
that the conflict is unavoidable, . . ."  Exclusion of the
previous NRC panel members would be consistent with this legal
requirement.
     
     We explained in our July 12th note to Dr. Reisa,
Director, NRC Board of Environmental Studies and Toxicology,
how it was clear from the charge to the NRC that this
subcommittee was reviewing the work of the earlier panel.(8)
     
     Indeed, we know now that the entire focus of the "update"
was a re-examination of the same Southwestern Taiwan data
discussed in NRC I, but employing new assumptions.  It clearly
is a review of the earlier work, and should not have been
undertaken by the same panelists who, under the explicit NRC
policy, have an interest in defending the use of the earlier
data.  Not surprisingly, NRC II simply repeats the puzzling
mantra that the new panel was not reviewing, but simply
"updating" the earlier work, without explanation, and did not
respond to the specific discussion in our July 12th note where
we explain this point in detail.  NRC II at 18.   A more
objective panel might have been favorably disposed toward a
more thorough examination of the conflicting data providing
evidence of sublinear risks from Utah, Inner Mongolia and
Northeastern Taiwan, rather than simply reaffirming that the
data from Southwestern Taiwan is the best available for
performing the risk assessment.(9) Another panel might not
have overlooked the important studies by Guo and Tseng (2000)
or Engel and Smith (1994), which also lend support to the
establishment of a threshold level for bladder and lung cancer
well above arsenic concentrations commonly found in the US
drinking water sources.

III. The NRC II Report Is Neither Comprehensive Nor A Fair
Presentation of the Risks from Arsenic in Drinking Water and
Probably Significantly Overestimates the True Risks.

     We present here some examples found in the NRC II report
where NRC de-emphasizes valid points made in NRC I which
pointed to lower risks, mischaracterizes studies that show
threshold effects, and omits other significant reports with
contrary results.  We rely on others to present a more
detailed presentation of the risks from arsenic, outlining an
alternative view that cancer incidence from low-level arsenic
has not been demonstrated in the United States or any other
part of the world, and that the growing body of evidence
points to the establishment of a threshold in excess of 100
ppb for skin, lung and bladder cancer risks.   This non-
exhaustive list serves as a caution for EPA not to rely solely
on the NRC II report, due to the incompleteness of the
discussion, and the apparent bias by the authors.  As a
result, we respectfully suggest that NRC II probably
significantly overestimates the true risks.

A.  Sublinear vs. Linear Extrapolation

     The EPA default policy is to employ a linear
extrapolation from zero concentration where the cancer
mechanism for a given chemical is not clearly established.
However, other scientists point to studies showing that a
sublinear (or lower than linear) dose-response model is more
appropriate.  This would lead to potentially much lower risk
estimates.   The NRC I report stated, ""[o]f the several modes
of action that are considered most plausible, a sublinear dose
response curve in the low dose range is predicted, though
linearity cannot be ruled out," implying clearly that
sublinear (e.g. lower risk) was the more likely scenario. NRC
I at 3.  That language pointing to lower risks apparently
didn't satisfy the authors of NRC II.  NRC II at 175 states
only that the "[t]he current mode of action data are
insufficient to guide the selection of a specific dose-
response model."  It appears that the new report attempts to
downplay the likelihood of a threshold effect, although we
could not find any discussion of  new evidence that NRC is now
relying on that makes the sublinear prediction in NRC I less
likely today.

B. Uncertainty of Risk Estimates

     In NRC I, the report stated,"[r]egardless of the data set
that is ultimately used for the arsenic risk assessment, the
subcommittee recommends that a range of feasible modeling
approaches be explored.  The final calculated risk should be
supported by a range of analyses over a fairly broad range of
assumptions.  Performing a sensitivity analysis ensures that
the conclusions do not rely heavily on any one particular
assumption."  NRC I at 250.  NRC I pointed out that simply
making one change in the modeling - making different choices
of which village wells to analyze, would change the risk
"fairly substantially by several orders of magnitude."  NRC I
at 247.  In contrast, we could not locate any significant
discussion about the model uncertainty relating to well
exclusions in NRC II.  In fact, it appears that in all the NRC
II discussions, there is no discussion of any variability that
exceeds more than one order of magnitude, nor is there any
serious attempt to account for a "fairly broad range of
assumptions," including the possibility of a threshold or
sublinear dose response relationship.
     
C.   Inner Mongolia Study - Tucker et al (2001) Is
Mischaracterized in NRC II

     The very important peer-reviewed Tucker et al. (2001)
study showed that the data was "best described" by a threshold
at 100-150 ppb, in contrast to the default linear model,
employing an examination of skin cancer data in Inner
Mongolia, where arsenic levels were found between  below
detection (10 ppb) to 2000 ppb.  However, NRC II instead
described the data as being "adequately described" by a
threshold model, but "also well described by a nonthreshold
linear model."   NRC II at 51.  We find that these
descriptions should be reversed, because the text implies that
the default model is the better fit, which is contrary to the
study's explicit findings.
D.   Other Threshold Studies Are Missing from NRC II

     The Guo and Tseng (2000) study doesn't show a significant
increase in bladder cancer mortality and incidence until
concentrations are reached over 640 ppb, using the same
Southwestern Taiwan data as NRC II.  We didn't see a reference
to this study in the NRC report.   This apparently was
overlooked by the panel although it was charged with updating
the NRC I (1999) Arsenic Subcommittee Report.  This was an
important omission that conflicts with the panel's linear
default assumption.
     
      Secondly, the Engel and Smith (1994) analysis showed a
deficit of lung cancer for arsenic concentrations for 10+ ppb
counties compared to 5-10 ppb counties in the United States.
Although this was included as a reference in NRC I, neither
NRC I nor NRC II included a discussion of the lung cancer
results.

E. The Southwestern Taiwan Data Shows No Increase in Bladder
Cancer Risk Between 0 and 400 PPB

     Using table 5 of the Morales (2000) report, the best
linear fit for the concentrations between 0 and 400 ppb shows
no increase in bladder cancer mortality in SW Taiwan (which is
the same data set used by NRC II and EPA) .   We believe that
this data is more consistent with a threshold effect, than
with a linear extrapolation from zero concentration, but NRC
II fails to comment on this observation.

.F.  NRC II Failed to Model Southwestern Taiwan Data or Other
Data to A Threshold Model Although The Threshold Model Is
Among the Most Plausible

     Several scientists and studies have suggested that it is
appropriate to examine the available data for sublinear as
well as linear models.   The NRC II report does not reflect
the growing evidence for a threshold effect since the
publication of NRC I in 1999, nor does it examine the
Southwestern Taiwan data for a threshold effect, which
certainly fits within  the "fairly broad range of
assumptions,"  considering the fact that the sublinear dose
response curve is predicted by  "the several modes of action
that are considered most plausible."  NRC I at 3.  Since Guo
and Tseng (2000) were able to fit the Southwestern Taiwan data
using a threshold model, the NRC certainly should do so,  at
least as an alternative model.


IV. The Default Model Does Not Drive the Selection of the MCL

     Finally, we believe that there is considerable confusion
about the role of the default linear assumption in the
determination by EPA of the MCL under SDWA.  Much of the
discussion surrounding EPA's use of the default model in this
rulemaking, in our view, is a red herring.  The Safe Drinking
Water Act (SDWA) requires consideration of costs and benefits,
and by implication, consideration of the uncertainty that
affects the calculation of the costs and benefits.  Setting a
risk estimate using a default model does not obviate or
eliminate the uncertainty surrounding the estimate derived
from the default model.   The default policy choice,
irrespective of its correctness, does not obviate the SDWA
requirement to properly evaluate the costs and benefits, and
therefore, ultimately it is the range of uncertainty, and not
the default policy choice, that forms the basis for
consideration by decisionmakers.  In other words, EPA still
cannot avoid examination of alternative models in the
regulatory analyses required by SDWA, and therefore the
default model alone does not drive the selection of the MCL.
EPA's default science policy choice does not permit the agency
to ignore the uncertainty factor which is an integral part of
SDWA determinations.  The default model is only the starting
point, not the end of the analysis.
     
V. Conclusion

     We find that the NRC did not follow the procedures
required under section 15 of FACA, did not allow informed
public comment on the composition of the panel, and formed a
panel that did not fairly and objectively complete the
analyses requested by the EPA.  We strongly suggest that the
NRC revise its prepublication copy in response to these and
other criticisms, so that EPA may be able to use the NRC work
product with confidence.  In the alternative, EPA should be
very cautious in using this report as a guide in the
completion of its rulemaking activity.
Endnotes

1.  The National Research Council is the operating arm of the
National Academy of Sciences, and is the entity responsible
for the compilation of the arsenic update report.
2.  Although the NRC declined to provide the current version
of the internal procedures, we understand informally that the
procedures are basically identical to the August 1998
procedures.  Details of the NRC noncompliance are found on the
Advocacy Web site, www.sba.gov/advo, and later in this
testimony.
3.  1992 NRC Policy on Disclosure of Personal Involvements and
Other Matters Potentially Affecting Committee Service at 2
4.  1999 Arsenic NRC Report at 254.
5.  2000 EPA Science Policy Council Peer Review Handbook at
58.
6.  "The evidence indicates that a substantial risk to human
health exists at 50 parts per billion and merited lowering the
standard to 5, if not even 10 parts per billion."  Richard
Keil, Bloomberg Report, March 27, 2001.
7.  We understand that Kimberly Thompson is on the Board of
Directors of the American Council on Science and Health, and
may have provided some balance to the views of the others.
However, we also note that she and Dr. Louise Ryan (also on
the panel) are both on the faculty of Harvard School of Public
Health.  Dr. Ryan and Dr. Morales (also from the Harvard
School of Public Health) provided the methodology using the
Taiwan data provided the basis for the EPA risk estimates
being reviewed by the subcommittee.  Dr. Morales again
provided analyses to support NRC II.
8.  The text of the July 12th note on this topic appears as
follows: As you know, the May 16th letter from Susan Walthall,
Acting Chief Counsel for Advocacy, expressed concern about the
NRC's apparent violation of its 1992 bias policy by including
five members of the 1999 panel in the new panel of eight
members who will be reviewing their own work in the 1999
report.   Dr. Goyer's remarks indicating that the panel will
be "updating," but not reviewing the previous panel's work was
puzzling.  The five returning NRC subcommittee members must be
reviewing their earlier work because the EPA charge includes a
review of the basis of EPA's 2000 risk assessment, which in
turn relies on the 1999 NRC report, as I explain below.
     The April 2001 NRC charges include a review of whether
the Southwestern Taiwanese studies "remain the best data for
dose response and risk estimation."   In addition,  the charge
includes the following requirement, "[d]etermine if EPA's risk
estimates at 3, 5, 10, and 20 ug/L are consistent with
available scientific information, including information from
new studies."  In other words, the NRC must review both the
EPA risk estimation methodology and the Taiwanese data.  That
almost identical methodology and that use of the Southwestern
Taiwanese data were the basis for the 1999 NRC "sample" risk
"assessment" performed by Dr. Louise Ryan, who also serves on
the current panel.   Any evaluation of the EPA risk assessment
necessarily requires a review of the 1999 report methodology
and data.
     Will the subcommittee avoid assessing the EPA methodology
and the Taiwanese data?  Frankly, Advocacy believes that the
panel must do both assessments to meet its charge.  If the
subcommittee were simply reviewing new references, Advocacy
would agree with Dr. Goyer's description.  However, EPA asked
the committee to review the agency assessment, which cannot be
separated from the NRC work, because EPA did little more than
slightly adjust the methodology (interestingly enough, despite
the very clear and explicit NRC instructions not to do so
alone).
9.  In fact, NRC II language implies that some of the panel
members may have been interested in performing additional work
on the Northeastern Taiwan data.  NRC II states at page 174:
"The Northeastern Taiwanese study has several strengths,
including exposure assessment and data on potential
cofounders, which could inform the dose-response assessment.
At present, however, the follow-up time is insufficient to
provide the precision necessary for quantitative does-response
assessment."