good afternoon we'll resume our hearing i apologize for the delay for all of you mr holman you're now recognized for your opening speech thank you i guess sitting in for chairman jordan and members of the subcommittee good afternoon and thank you for giving me the opportunity to testify today my name is keith holman and i'm the deputy director of the national lime association nla is a trade association for manufacturers of calcium oxide and calcium hydroxide commonly known as lime just to clear up any misconceptions we're not the green little citrus fruit and we are not associated with lyme disease for the lime industry particularly we smaller companies epa's greenhouse gas rules are having a big impact lime plants generate co2 emissions both from the fuel that they use and from what you could call the roasting process that converts limestone into lime all lime plants are now subject to greenhouse gas permitting requirements when they are modified so even though the ghg rules took effect only three months ago we're already seeing a chilling effect on plans to modernize or expand lime plants because of great uncertainty surrounding ghg permitting the us lime industry is comprised of some twenty companies operating about fifty commercial lime plants nearly half of nla's members are small businesses these small lime companies face intense competition and they are particularly sensitive to increases in regulatory costs for this reason when epa planned at clean air act rulemaking back in two thousand and two that would impose stringent new requirements on lime plants nla was able to persuade epa to convene what's known as a small business advocacy review panel under the regulatory flexibility act nla wanted epa to have the opportunity to meet with small lime companies understand their needs and design the rule with those needs in mind epa convened the lime panel in january of two thousand and two seven of the nine lime companies potentially affected by the rule participated in the panel process these small lime companies met with epa twice including a facetoface meeting in washington dc the companies were able to talk directly to epa as well as with representatives of the office of advocacy and with the white house office of management and budget because of the panel process the final rule was tough but something that our small lime plants could live with several improvements to the rule were only made possible because small lime companies were able to meet facetoface with epa and provide critical information not surprisingly when epa announced in two thousand and eight that it planned to regulate ghgs under the clean air act many industries including the lime industry wanted epa to convene a panel however instead of convening a panel epa simply chose to have a public outreach meeting and only after it had proposed three rules under ghg program the first the endangerment finding the vehicle tailpipe rule and the socalled tailoring rule epa argued that it was not required to conduct a panel for these rulemakings whether or not epa could legally choose not to convene a panel it was clearly wrong not to do so epa held a panel meeting in november of two thousand and nine well after the three ghg rules had been proposed the meeting was in reality little more than epa giving attendees a broadbrush overview of the proposed rules nla and the other trade associations that were present had virtually no opportunity to have a dialogue with the agency about the actual design of the rules nla followed up the meeting with written comments to epa about the design of the tailoring rule the tailoring rule proposed to defer ghg permitting requirements for plants that had ghg emissions below a certain threshold because there is no known way to avoid generating co2 when limestone is heated and converted to lime nla asked that epa consider excluding these processrelated ghg emissions from counting against the tailoring rule's applicability thresholds epa's singleparagraph response failed to meaningly respond to epa's request epa's reliance on the public outreach approach as a substitute for the panel process is wrong for several reasons in bypassing the panel process epa lost its best chance to meet with actual small businesses facetoface and exchange information with them the panel process also establishes a context for epa advocacy and omb to meet discuss the issues and reach consensus on flexible solutions the public outreach approach taken by epa does not and cannot take the place of a panel many of the implementations difficulties now facing epa the state's might've been avoided if epa had taken the time to listen to small business before writing its ghg rules now the lime industry as a whole is reluctant to expand or modernize its plants until the permitting uncertainties caused by these ghg rules have been resolved thank you for the opportunity to testify today i'd be happy to answer any questions you have thank you mr holman oh okay thank you at this time without objection i'd like to enter into the record let's see we've got testimony from the national association of home builders the farm bureau federation and the small business and entrepreneurship council without objection so ordered at this point i'm going to yield myself five minutes and see if some of the other subcommittee members join us and correct me if i'm saying your name incorrectly mister it's rajkovacz rajkovacz thank you in your testimony you mentioned the epa taking a onesizefitsall approach i wonder if you could expand upon that a little bit yes we fundamentally believe without having included smallbusiness motor carriers owner operators in the discussion when i say they didn't include it within the regulatory impact analysis they specifically stated that the rulemaking would not have a significant economic impact on a substantial number of small entities as we started looking at that we were aware that they were talking with large motor carrier interests and this gets to the heart of the problem in terms of looking at the trucking industry the industry is dominated by smallbusiness motor carriers nearly ninety five of registered motor carriers in this country have twenty or fewer trucks that they operate and yet when ya go and talk to the largest of the large who have very homogenous streamlined operational models they run one truck one type of trailer it fails to take into count the multiple dualpurpose uses that small businesses actually engage in we have many members that operate a couple of trailers they may one day pull a dry van trailer for instance where aerodynamic technologies would be appropriate and work we don't deny that these technologies will work where appropriate but the next day they're pulling a flatbed or a drop deck and in that now that technology's working against them thank you mr doniger in your comments earlier before we adjourned you made the statement that you hoped that members of congress wouldn't fall prey to the phony storylines of small businesses when it comes to epa burdens placed on them could in expand what were you referring to if i may i was referring to a phony storyline about small businesses that is generally told by others by lobbyists for larger entities and the common storyline is that epa's regulations affect departments houses hotdog stands donut shops small entities and they don't there's a specific exemption as i explained and i'm sure you'll hear from epa and as mr kucinich explained that the permit requirements don't apply to ninety five of the sources in the country they don't apply the kinds of sources that emit less than seventy five thousand tons a year of carbon pollution and as a result this storyline that millions of tiny sources are being roped into a government bureaucracy is the very opposite of what's true thank you i have about a minute and a half left and i'd like to give each of the other three members of the panel the opportunity to respond to that if the tailing rule is followed and allowed it would provide an exemption for some small emitters of co2 for a few years but even the epa says that eventually it's gonna cover entities requiring just for title v permits six million new entities will have to be permitted so the tailing rule is just putting it off for a few years thank you go ahead as far as affecting small businesses as epa's rulemaking goes through in its current form there are millions literally millions of trucks that operate interstate commerce in this country as i stated most of em are small businesses that means eventually this rule affects millions of small businesses thank you mr holman yes i would agree that the tailoring rule is only a partial temporary solution for small businesses we don't know what epa is going to do at the end of the period of deferral which will end in a few years we also don't know epa's interested in writing other programs that are going to apply to small businesses so we're in a very large comprehensive and widereaching regulatory program in the climate arena certainly from the standpoint of looking at what the impacts are of that program epa's done not a particularly good job thank you at this time i'm pleased to recognize our chairman who's ohio i yield you five minutes thanks thank you gentlelady i didn't know if the ranking member was he was in the room we can certainly let well i'll ask a few questions i think dennis will be fine and we'll give him if he wants a littlelonger time we'll be happy to do that lemme again thank you all if being here and i apologize all my notes are at ann marie's desk there but lemme just do a couple things dr kreutzer lemme first ask you about the talk to me a little bit more about the capandtrade bill and what epa may be doing and how that relates you mentioned this some in your testimony if you can elaborate on that i'd appreciate that and then i do have a question for mr holman and then a general question i think if you cut co2 emissions if you force them to be reduced you are going to cut fossil fuel use fossil fuel is the affordable energy right now fifty of our electricity comes from coal twenty from natural gas and in my written testimony i did a cost comparison showing that the renewables are eighty to two hundred and eighty more expensive that restricts economic activity it means consumers have less money to spend on other things once they've paid their utility bills it means producers have higher costs of production if you have consumers with less money and you're forcing you have to highercost products they're gonna buy less of it ya need fewer people to make that so employment goes down as well doesn't matter if it's a tax that you do it doesn't matter if it's a cap it doesn't matter if you come up with a complex set of regulations to force the same reduction you're gonna have those costs with regulation it's even more costly cause you have the compliance of the administrative costs as well the six million permits that the epa said they would have to issue for the title v permits yeah thank you mr rajkovacz is that pretty close yes lemme ask ya this this came up in a hearing we had in this room a couple weeks ago we had a mr michaels from osha and i ask him this question in the course of the hearing i guess i picked up on this and asked him this general question i'd like your thoughts as to how you see the small business folks that you work with how they might feel about this i asked the gentleman the question i said mr michaels would you agree with me that the vast majority of cases employers care pretty deeply about their employees they invest time in training them they're the key to their success making a profit they know em they may live in the same community there's always exceptions but i said wouldn't you agree that in most situations employers care deeply about the wellbeing of their employees and i was struck by the gentleman's response he said i'd like to think so it just struck me that sometimes we have this attitude amongst federal employees who are supposed to i understand regulate business but also probably educate and help them and yet they got this attitude that somehow the employer is the bad guy have you picked up on any of that in your dealings with the federal government whether it be epa osha or any other agency trucking is actually i would argue one of the most heavily regulated enterprises in the united states others might have a different opinion i've been dealing with roughly fifteen different federal rulemakings just in the last four months it's somewhat overwhelming for a lot of us in the industry to keep up with it it depends a lotta times you do develop relationships with different people and agencies that's a very important thing networking with these folks and developing relationships but when you don't have a lotta contact with an agency you are an outsider and it's really tough to crack that egg lemme ask ya another question this came out in hearing a few weeks back in the full committee we had one of the members of the committee a freshman member congressman guinta from new hampshire he asked five business owners and most of these guys started their business two thousand five hundred and thirty years ago all very successful he said if you knew then what you know now would you have started relative to regulations if you knew back then all the things you have to deal with i think you mentioned fifteen was the number of the different agencies you have to deal with if you knew then what ya know now would you have started your business and every single one of em said wouldn't have done it would not have done it has that been the experience with some of the folks that you deal with of their attitude yeah what i hear from our members is they are basically on regulatory overload i said fifteen rulemakings in the last four months and they are major rulemakings that will change the industry's productivity people are generally fed up with what they think is an overregulated environment it is oftentimes under the guise of safety where that's appropriate obviously i didn't get to my question mr holman but we'll have another round and i'll get to that one next time thank you thank you mr jordan i now yield five minutes to mr kucinich thank you very much madame chair dr kreutzer i read your testimony i was particularly interested in the chart with the high cost of renewable energy systems where you chart the monthly and annual costs my partner's discussion about regulation has always been that you can assign costs but if you wanna get a clear picture you have to look at costs and benefits simultaneously otherwise we're not really understanding the societal impact when i look at coal in particular i don't think that anyone could argue that the use of coal in the burning of coal and the aftereffects on the environment of coal does have adverse environmental impact in a way the sulfur dioxide byproducts can exacerbate pulmonary problems it's well recognized asthmaemphysema the sulfur dioxide when it travels over many miles we know this question the midwest that coalburning plants in the midwest end up with the condensate polluting rivers and lakes in the northeast and we have a price of eutrophication there you could actually monetize the costs in terms of adverse health and the adverse impact on the environment i just wanted to share that thought with you because i think it's really important when we're in a discussion the essence of which is what does this cost and your chart taken within its own context you make your argument but when you look at the cost of that technology there is an expense that's offloaded onto the society i just wanted to share that with you i agree and i don't think anybody here's talking about undoing the clean air act back to one thousand nine hundred and sixty six what i'm addressing is carbon dioxide regulation we already have extraordinary amount maybe we need more i'm not here to debate that regulation for sulfur dioxide and other criterion pollutants if you want to look at the impact of carbon dioxide on a costbenefit i think some of the estimates have been exaggerated but if you take the estimates of the social costs of carbon add that to the coal cost that's about two cents per kilowatthour it's still much cheaper than wind or solar all right it changes the number some it doesn't flip any of them around we wanna look at the costs and benefits what benefit in terms of global warming mitigation do you get from this even with a fullblown d'you think there is such a thing as global warming yeah the world's warmer i've just got a few minutes left and i'm gonna go on but i thank you i'd just like to submit for the record mr chairman a study that shows in terms of benefits and costs that the proposed rules that we've been promoting would avoid up to seventeen thousand premature deaths forty five thousand cases of chronic bronchitis eleven thousand nonfatal heart attacks these are the benefits of focusing on protecting clean air so i'd just like to put this into the record in the minute that i have left i just wanna ask mr doniger can you explain how the tailoring rule works to prevent harm to small businesses yes thank you as i said in my testimony and in response to ms buerkle the purpose of the tailoring rule is to focus the permit requirement the requirement that big new plants and big expanded plants examine whether they have the opportunity to control pollution at a affordable and achievable cost it limits this requirement to very big sources and it excludes the ninety five maybe ninety seven ninety nine of the socalled six million sources that mr kreutzer and others keep saying would be subjected to clean air act requirement it just will not be so my time's expired but the chair has just said that he's gonna ask one more question and he's been kind enough to let me ask another question i've got a followup to ask of you mr doniger so i go back to the chair thanks chairman that would be great if i could mr doniger we know that these exemptions are expected to be reconsidered by the epa in two thousand and thirteen d'you think the epa is going to keep this exemption for small sources of greenhouse gas emissions yes i do i see no reason why they would take that exemption away could you clarify just once more do any of the current greenhouse gas permitting regulations burden small sources of greenhouse gas emissions no they don't the one thing that is in place that actually helps small businesses so far are these standards for vehicles both light duty and heavy duty that will save thousands of dollars for small businesses that buy cars and trucks so bottom line what's the impact of the current greenhouse gas regulations on small businesses it's probably helpful to small businesses as a whole thank you mr holman would you like to maybe pick up where these guys just left off lemme start with you by asking this you were former assistant chief counsel of energy and environment at the sba office of advocacy is that right that is correct and you authored the comments that sba submitted to the epa in two thousand and nine that expressed concern about the epa's endangerment finding and greenhouse gas tailoring rules is that right yes the comments in two thousand and eight and two thousand and nine both eight and nine good now in your former capacity can you give us some insight into the discussion that just took place and the impact that this stuff will have on small business seems to me you're pretty darn uniquely positioned to comment on the conversation we just heard well i guess i appreciate that comment there was a lotta discussion between the office of advocacy and epa on the tailoring rule there's no doubt that the tailoring rule is a help to many small businesses because it does delay the permitting requirements that would otherwise be falling on small businesses the way it has fallen on the lime industry even now and i can first address what are those impacts this are falling on us and on some other smalls and this ultimately will fall on all small businesses potentially and that is uncertainty because of greenhouse gas permitting so imagine that you are required to comply with greenhouse gas permitting and you wanna do some sort of modernization or expansion of your plant what it's gonna mean is that you have to go to get a permit to do that expansion and in the process of getting that permit it could be that every aspect of your operations will wind up being looked at by epa or a state under what's known as best available control technology review the concern by most of the industrial sources and even some of the small ones is that that process could wind up requiring you to install nonrelated things things that have nothing to do with emissions but have to do with energy efficiency or some other improvement in your plant that would be very expensive and it has a chilling effect cause imagine you go to a bank and you say i wanna get financing for a project that i'm gonna do at my facility well when do you have to put it in i don't know what is it gonna be i'm not sure because epa can't really tell me what it is we'll only know at the end of the process and even then we might not know because that's subject to being challenged in court and potentially being changed so there's a lot of uncertainty just in terms of this process is not cut and dried unlike the batc process that has existed for criteria pollutants for thirty five years we're in a totally new arena here when it comes to greenhouse gases and nobody knows exactly what's gonna be required so when you say what's the magnitude of this impact on smalls the moment we don't really know it's very openended and that has uncertainty which as you know businesspeople hate from standpoint of the office of advocacy we wanted a tailoring rule or something that would at least temporarily soften the blow tailoring rule does that but not for everybody certainly not for the lime industry bricks small utilities municipal utilities rural electric cooperatives foundries there are a number of businesses that are not gonna be entirely shielded by the tailoring rule so when you put this together and you gave your comments and recommendations to the epa and yet you just talk about entities who are you think impacted in a negative way did you think epa followed your comments did they follow the statutory requirements they were supposed to follow did they listen talk about that process speaking from my own perspective as an individual my sense was that epa was in a rush to get this rule completed as i mention in my testimony we wanted epa to stop or to slow down consider what the impacts were gonna be on smalls and try to come up with a way to design the rules so that it would protect them epa was not really interested in alternatives was not really interested in listening to what the smalls had to say but what i wanna be clear on in my understanding the law requires them to give serious consideration due diligence to your recommendation is that accurate that is correct and do you think that took place that's the question we were not satisfied that that took place which is why we wrote four public letters to epa saying you must do a panel before you proceed with these rulemakings so in your role as advocate for small business in front of the epa they did not follow in your mind what the law requires them to follow it was our belief that epa did not follow the regulatory flexibility act they certified the rule and went with what they considered to be a compromise under section 609c of the regulatory flexibility act had that ever been done before no it had never been done before so didn't follow normal practice took an action never done before on an issue that you told them was gonna impact smallbusiness owners in a negative way is that accurate we told them at least four times four times you told them in public documents okay thank you mr holman i appreciate that we got one more round for ms buerkle thank you mr chairman dr kreutzer you had started to answer a question about global warming and i have a feeling you didn't finish your answer and i wondered if you could just good job perfect expand on that i think i was responding to congressman kucinich asking me if believed in global warming and i said yeah we're warming the question though is more than are we having warming and is it caused by humanmade emissions we're looking at a set of regulations and if we're gonna do costbenefit we need to look at what's the cost of the regulation compared to how much benefit you get from reduced global warming that's the problem with co2 if there is one and climatologists looked at the waxmanmarkey bill which was more comprehensive than the current epa regulations their estimates were that by two thousand and fifty if use the largest sensitivity of temperature to co2 the high end the maximum change moderation from waxmanmarkey that is how much would waxmanmarkey make thousandths of a degree in two thousand and fifty maybe a few 10ths of a degree in two thousand one hundred this will have less impact than that so we can't compare the costs here to stopping tsunamis we have to compare the cost here to what impact it will have on moderating world temperatures and it's pretty minimal in fifty years not even measurable thank you in your testimony you talk about the costs capandtrade and the cost to our gdp as well as the number of employees can you comment in general that's specific to that piece of legislation but what regulations are doing our country has had 20plus months of unemployment hovering at nine to ten we're concerned about that we wanna get government outta the way so businesses can succeed can you shed some light on that we haven't done an estimate on the impact of the most recent regulations we're working on ones for the projected epa regulations but one of the things that happens when you have an environment where you say we might impose this we might impose this it makes it very difficult to make investment now someone on the other side would say that's why we need to have the regulations but that's when ya say we know for certain it's gonna be really bad when there's some uncertainty that's really bad ya still don't wanna invest but when it comes to horrible that's even worse okay so yeah we have a problem where to make the investments in power industry to build the power plants we're gonna need firms that are in energyintensive industries are reluctant to go forward if they think the regulations are gonna be burdensome i just wanna go back to your previous answer to the first question i asked you in your opinion what is the connection between the co2 emission and global warming i'm not a scientist i'm an economist so it's close to a manonthestreet interview now there will be some warming from manmade emissions probably there's some models that show some offsetting but the co2 by itself if it doubles will lead to a doubling excuse me will lead to a degree and a half of warming the argument is all about are there feedback loops the models have lots of them the data so far look at the last fifteen years we don't have accelerating warming it's hit the one thousand nine hundred and ninety nine level it's been pretty flat so we don't know for sure what it is but more importantly let's say it is the four twelve degrees c that they're talking about at the high end of the ipcc model what does any of this regulation do if all it does is impose costs and make us feel like we're doing something but we're not then we're getting the warming anyway and unemployment and lower income so whether you believe ipcc or not this is not a solution thank you very much i yield back thanks gentlelady gentlewoman from california do you wish to ask this panel some questions you're welcome to thank you mr chairman maybe california really is on another planet but we did pass ab thirty two there was an effort to repeal that it failed miserably californians recognize that we all have a responsibility to be stewards of this planet having said that small business in california has spoken up very strongly in favor of ab thirty two which would limit greenhouse gases mr chairman for the record i would like to submit a letter the document from the small business majority that basically says the following our research has continually shown that the clean air act is good for small business a report we released in october of last year found that the benefits of the law have far outweighed the costs the office of management and budget predicts the total economic benefits of the clean air act to be more than four to eight times the costs of compliance our report also found that the law has spurred important technological innovations such as the catalytic converter and exports of these and other environmental technologies were valued at thirty billion in two thousand and four these are encouraging numbers and cannot be ignored without objection objection furthermore i'm amused because when the clean air act in one thousand nine hundred and ninety was being considered ford motor company claimed that quote we just do not have the technology to comply and yet look where we are today ford motor company chevrolet every one of the auto manufacturers are embracing all of the clean air standards and creating electric cars and hybrid cars and the public is embracing them as well so i guess my question to you is mr doniger is there some level of exaggeration going on here thank you congresswoman it seems as though wherever we are in time the regulations of the past are embraced and the regulations of the future are treated like armageddon and then we move on a little bit more in time and those regulations become embraced because as your examples show the benefits are proven the economic costs turn out to be much smaller than were forecasted by lobbyists up here and life goes on the economy of the united states has tripled in size since one thousand nine hundred and seventy while we've been able to cut the emissions of most pollutants by sixty or more so we can do these two things at once i would just call your attention to a study by three economists roger bezdek is the first name i'd be happy to supply this for the record if i may recite just one paragraph of his findings contrary to conventional wisdom environmental protection economic growth and jobs creation are complementary and compatible investments in environmental protection create jobs and displace jobs but the net effect on employment is positive second environmental protection has grown rapidly to become a major salesgenerating jobcreating industry three hundred billion a year and five million jobs in two thousand and three most of the five million jobs created are standard jobs for accountants engineers computer analysts clerks factory workers et cetera and the classic environmental job environmental engineer ecologist et cetera constitutes only a small portion of the jobs created most of the persons employed in the jobs created may not even realize that they owe their livelihood to protecting the environment this is a big business and it's a big contribution to our economy our economy grows because we protect our environment thank you mr doniger one final question and this has probably been addressed already earlier in the hearing but this is supposed to be focusing in on small business and the impacts on small business the epa tailoring rule which has come forward would suggest that you have to spew out seventy five thousand tons a year to be subject to any kind of regulation by epa are most small businesses spewing out seventy five thousand tons no they're not virtually all of them the buildings the small businesses that own those buildings are untouched by this regulation several of the people here have suggested well that may not be true in the future well if congress was gonna do something that would be constructive and help create the regulatory certainty we need it would be to lock in the tailoring rule the way it is now and take away any uncertainty about how it develops in the future and that uncertainty exists only because there is a limit on how long epa is allowed to make an exemption under the court doctrines that epa is using to justify these exemptions congress of course can make those exemptions permanent if you lock in the tailoring rule we'll have the certainty to focus on the big pollution sources get the technology on them and leave the small fries alone thank you my time's expired mr doniger just let me follow up then really quickly which is it earlier you said that more regulation's been good it's added to the economy it's been growth and now you're saying they should lock in the tailoring rule and take away any uncertainty and not expand it so which way is it the way it is congressman but your premise to the first question of hers was more regulation is good not all more regulation sir oh so it isn't all so some regulation could be bad of course okay but that's not what you said you said regulation was good it added to the economy it was wonderful i said the greenhouse gas safeguards that epa's putting in place are a net plus i think you said regulations in the past have been embraced as the good stuff but all the future one everyone always says they're bad and then you said that's not the case it's good so you made this general statement that regulation was good for business good for the economy and now you're saying no we should limit the tailoring rule shouldn't expand it we gotta take away any uncertainty out there i just wanna know which way is it i'm sure we can work out which are the positive economicgrowth promoting healthpromoting regulations and which are not helpful i'm here to present the case that what's being done now makes perfect common sense what epa has done is to make sure that the small businesses are not burdened by the kinds of regulations that don't make sense any further questions for the first panel i wanna thank you all for joining us today we do need to move along and i apologize for the schedule it's as i said earlier just one of those weeks around congress we'll get ready for our second panel we'll move to that as quickly as we possibly can thank you all it's i think worth entering the record it's what epa relies on might be a good question for the epa small business majority has leadership in what it ignores that of us all those of us it's a letter that she just entered into the record and epa's closing quote relies on the small business majority oh it dives welcome soon as we get you situated we'll get started here okay we're pleased to welcome our second panel of witnesses we have the honorable gina mccarthy who's the assistant administrator at the us environmental protection agency welcome miss mccarthy and we also have miss claudia rodgers who is the deputy chief counsel at the small business administration's office of advocacy if you were here for the first panel we have a practice here please rise and raise your right hands do you solemnly swear or affirm that the testimony you're about to give this committee will be the truth whole truth nothing but truth let the record show both witnesses answered in the affirmative we'll go right down the row here miss rodgers you're up first go right ahead mr chairman ranking member members of the subcommittee my name is claudia rodgers and i am deputy chief counsel for the office of advocacy at the us small business administration i am pleased to have the opportunity to appear before the committee on behalf of chief counsel dr winslow sergeant in the interest of time i will summarize my prepared testimony and ask that my full statement be included in the record because advocacy is an independent body within sba my testimony does not necessarily reflect the position of the administration or the sba congress established the office of advocacy to represent the views of small entities before federal agencies and congress the office of advocacy is charged with oversight of agency compliance with the regulatory flexibility act the rfa as amended by the small business regulatory enforcement fairness act gives small entities a voice in the federal rulemaking process for all rules that are expected to have a significant economic impact on a substantial number of small entities epa must conduct sbrefa panels to assess the impact of the proposed rule on small entities and to consider less burdensome alternatives advocacy and the epa have a long and productive working relationship since sbrefa was signed into law in one thousand nine hundred and ninety six epa has conducted nearly forty sbrefa panels to assess the impact of proposed rules on small entities and to consider less burdensome alternatives these panels allow for small business to give direct feedback on the potential cost of the proposed rules and to suggest and develop less burdensome alternatives final panel reports must be signed by the chief counsel for advocacy the administrator of the office of information and regulatory affairs and the administrator of the epa in fifteen years of sbrefa panels advocacy has found that the panel process is a useful way for small businesses to provide valuable input into the rulemaking process in short the panel process works sbrefa panels have saved billions of dollars for small businesses due to changes and improvements that were made to proposed rules while still allowing epa to achieve their statutory objective while advocacy does occasionally have disagreements with epa on procedure and policy we are also very proud of the work we have done with epa to improve regulations and reduce the burdens on small businesses we currently have five sbrefa panels underway on epa rules and we will continue to work with epa in a constructive way to make sure the rfa and sbrefa are being followed and the impacts of regulations on small businesses are being taken into account with respect to regulation of greenhouse gases advocacy disagrees with epa on whether the impacts on small businesses were properly considered advocacy has been clear all consistent in its public comment letters and other communications with epa about our positions on these issues we believe epa should've held sbrefa panels and conducted thorough rfa analysis to explore potential impacts of greenhouse gas regulations on small entities in four years of greenhouse gas regulatory activity epa has not evaluated the economic effects that its initial endangerment finding and mobilesource emission standards have had on small businesses advocacy does not challenge epa's authority to implement the clean air act however we do believe a more thorough analysis was needed including sbrefa panels to fully consider the impacts greenhouse gas regulation would have on small businesses these concerns were noted in advocacy's four public comment letters attached to my testimony in two thousand and eight when epa issued an advance notice of proposed rulemaking indicating it might regulate greenhouse gases advocacy filed public comments asking epa to hold sbrefa panels on any greenhouse gas regulation to ensure the effects on small entities could be considered when epa issued its endangerment finding in two thousand and nine advocacy again filed public comments advising epa to conduct sbrefa panels to explore potential impacts of greenhouse gas regulation on small entities in epa's subsequent proposed regulation of motor vehicle greenhouse gas emission standards and the proposed tailoring rule epa again certified under the rfa that such standards would have no significant impact on a substantial number of small entities epa did acknowledge some of the potential burdens on small businesses and established a phasein compliance program with the tailoring rule this action led to significant costs savings for small businesses and epa deserves credit for its implementation however advocacy believes epa should have done a sbrefa panel which would've better reflected the views of small businesses and improved the rule in conclusion while epa has expressed its desire to reach out to small entities and has provided temporary relief to small businesses advocacy remains concerned that epa has not fully complied with both the spirit and the requirements of the rfa on the greenhouse gas rules epa did conduct public outreach however public outreach is not a substitute for the concrete feedback agencies get from small businesses during the panel process we look forward to continuing to work with epa on these and other important regulations thank you for the opportunity to address such an important issue for small business i appreciate your work in the office of advocacy and i'm happy to answer any questions you may have thank you miss rodgers miss mccarthy chairman jordan ranking member kucinich and members of the subcommittee i wanna thank ya for inviting me here today and i'm honored to be sitting here with ms rodgers i hear repeatedly from members that small businesses constituents are very concerned about epa updating its clean air act programs to address greenhouse gases but when i listen to the concerns i'm most struck by the fact that what they think we are doing bears little or no relationship to what we are actually doing i appreciate today's opportunity to try to set that record straight the agency is taking a commonsense approach to meet our clean air act obligations to reduce carbon pollution our focus now is not on small sources at all but on the largest polluters perhaps the most repeated misinformation about greenhouse gas regulation small businesses relates to greenhouse gas air permits contrary to the most commonly heard claims small sources are not currently covered by the permitting program epa adopted regulations last year that exempt small sources for at least the next five years and we cannot include them absent a future rulemaking with public comment that would do so i know some of your constituents are concerned about what has been called a cow tax well let me reassure you that the agency has no intention or desire to impose taxes on cows pigs chickens or any other livestock and while we routinely hear concerns that our greenhouse gas standards will cause incredible increases in gas prices and electricity rates none of these estimates are actually based on the analysis of our programs instead they're based on studies and many of them are severely flawed of economywide capandtrade programs that bear absolutely no relationship to epa's actions in sharp contrast to these concerns the only greenhouse gas standard epa has issued under its existing clean air act authority will save small businesses money the average american purchasing a new passenger vehicle that meets our greenhouse gas standards would net savings of three thousand our proposed standards for medium and heavyduty vehicles would net operators of semitrucks savings for up to seventy four thousand over the truck's useful life misconceptions about the effects of epa programs are unfortunately no surprise over the last forty years similar unsupported claims have been made nearly every time epa has taken significant steps to protect the american public in the 70s we were told that by using the clean air act to phase in catalytic converters for new cars and trucks that entire industries might collapse instead the requirement gave birth to a global market for catalytic converters and enthroned american manufacturers at the pinnacle of that market in the 80s people claimed that the proposed clean air act amendments would cause a quiet death for businesses across the country but instead the us economy actually grew by sixty four even as the implementation of clean air act amendments cut acidrain pollution in half in the 90s when we took steps to phase out chemicals that deplete the ozone layer a refrigeration industry representative testified that we'll see shutdowns of refrigeration equipment in supermarkets and air conditioners in large office buildings hotels and hospitals none of that happened instead the phaseout happened five years faster and cost thirty less epa is using the same clean air act tools that we've been using for these past forty years to protect public health to now address the public health threat that is posed by carbon pollution these clean air act tools have proven their worth over and over in these years to improve public health in fact clean air act programs adopted since one thousand nine hundred and ninety are expect to provide two trillion in benefits in two thousand and twenty alone over thirty in benefits for every dollar spent just last year these programs are estimated to have reduced premature mortality equivalent to saving over one hundred and sixty thousand lives and to have enhanced productivity by preventing thirteen million lost workdays i'll close with a statement by the small business majority and the main street alliance any step to delay or limit epa's ability to regulate greenhouse gasses and other pollution has negative implications for many businesses whether they're large or small it would hamper the growth of the clean energy sector of the economy a sector that a majority of small business owners view as essential to their ability to compete thank you mr chairman and i look forward to your questions thank you both for your testimony and your time here i'm gonna let the ranking member go cause he has to run to another meeting and then we'll finish up thank you very much mr chairman miss mccarthy in a hearing about the impacts of greenhouses gas regulations i think it's important to discuss the reason why these regulations exist in his written testimony mr doniger cited the national academy of sciences which concluded and i quote climate change is occurring is caused largely by human activities and poses significant risks for and in many case is already affecting a broad range of human and natural systems unquote national academy of sciences continued to explain that the scientific basis for reaching this conclusion has and i quote been so thoroughly examined and tested and supported by so many independent observation and result that their likelihood of subsequently being found to be wrong is vanishingly small such conclusions and theories are then regarded as settled facts unquote now miss mccarthy as you know the national academy of sciences is far from the only organization that has reached legitimate compelling scientific conclusions that illustrate the real danger caused by climate change entities including the world health organization international monetary fund and the us global change research program a program mandated by congress to integrate climate change federal research all definitively identified climate change as a real danger now miss mccarthy d'you agree that the science that provides the impetus for greenhouse gas regulation is indisputable and if you do why i do mr kucinich that is because the best available peerreviewed science that we have found indicates that greenhouse gas emissions threaten the health and welfare of the american people that is what the administrator said in making her endangerment finding it is backed not just by epa research but by the full breath of all of the agencies in the federal government who address these types of issues including the national academy of sciences including nasa including noaa all of the agencies that we rely on to provide the science to this country and internationally have told us that the simple fact is that greenhouse gasses are endangering public health and the environment and it's time to take action now to reduce those pollutants well did the epa allow for comments from private industry including small businesses in a greenhouse gas endangerment finding we did it went through a rulemaking process it was one of the most thorough of the agency's we had more than three hundred and fifty thousand comments which we addressed individually we had eleven volumes of response to comment on this rule we believe we did the most thorough job that the agency could and that the science is indisputable what d'you say then to the small businesses who are continuing to express concern that epa is not paying attention to them and epa is endangering their businesses what d'ya say to them i would tell them that the epa understands that our obligation under the clean air act is to regulate greenhouse gases and that they pose a substantial public health problem i would tell them that we are taking reasonable commonsense steps to address greenhouse gases under the clean air act in the way that congress intended in a way that protects the interest of the small businesses in a way that will continue to allow the economy to grow to continue to allow jobs to happen we're doing the same thing to regulate greenhouse gases as we have successfully done with other pollutants under the clean air act and we will look at the economic impacts we have done that we will continue to do that we'll act deliberately and smart and use a commonsense approach you heard the testimony of the witnesses in the previous panel did you not i did i think we have to be concerned about small business communicating their difficulties i know mr doniger's testimony is that most of the small businesses that the rules would not necessarily apply to them but i think for those to whom they do apply they're looking for some words from you that would indicate that you're trying to do everything ya can to make sure people can stay in business at the same time trying to protect the environment is that a fair characterization that is correct okay i wanna thank the chairman for indulging me with this opportunity to go first thank you yield back i appreciate the gentleman thank you miss rodgers the sbrefa act's been around for about fifteen years that right since one thousand nine hundred and eighty thirty years thirty years okay and how many sbar panel i'm sorry the rfa is thirty years sbrefa's been one thousand nine hundred and ninety six one thousand nine hundred and ninety six about fifteen years that's what i had and how many sbar panels have you been involved with with the epa in that timeframe the office of advocacy has been involved with nearly forty i think that we're up to about thirty eight now i think in your testimony isn't it true you said you had like five underway right now yes five currently okay and you believe these have been positive yes overall actually epa is one of the better actors in terms of compliance with the rfa in general when we were developing a training program back in two thousand and two we had to go to agencies to find out those who do it best to help us develop the program and we went to ep you got a good track record with epa in all these except the one that's at issue today is that right yes we are concerned about the greenhouse gas so the normal process was not done with the greenhouse issue and its effect on small business all the other times have been fine when you recommend it when you went through it except for this one particular one we felt that the office of advocacy yes felt that taken as a whole or separately the greenhouse gas regulations clearly had a significant economic impact on a substantial number of small entities and therefore a sbrefa panel should've been held and is this a notable exception or is this the only exception to when you suggested you move in this way and go through the process that the law spells out is this a notable exception is this one of a few that's been done this way or is this the only one that's been done this way it's one of a few however certainly over the years over our fifteen years and forty panels we're bound to have disagreements over their certifications on some rules but it's really one of the very few okay when miss mccarthy answered the ranking member's questions about there was a process that was undertaken with small business owners it wasn't the normal process correct okay and miss mccarthy why mr jordan i would just disagree with the characterization that it wasn't a normal process i would emphasize that epa certainly follows both the letter and the spirit of the rfa as it's been amended by sbrefa just hang on one second miss rodgers just testified that it's been a great relationship it has been you've worked things out process has been followed almost all the time and yet here we have a pretty important rule we do clean air act greenhouse gas pretty important stuff that they feel's gonna have a real impact on small business it would seem to me you would want to follow the standard procedure and go through what's been the custom and the practice so why not in this situation we did follow the appropriate procedure i think where we disagree is that the tailoring rule which seems to be the issue at hand is a burdenreduction rule now this is important you keep saying ya followed the normal procedure but miss rodgers says outta the ordinary the gentleman before i assume you saw where mr holman talked and said outta the ordinary not the normal process there are a variety of ways to comply with the law epa generally goes above and beyond and we always meet both the letter and the spirit of the law in this instance we made a decision that we did not need to convene a panel because the tailoring rule was a deregulation rule in fact it reduced the burden for six million small businesses to have to deal with greenhouse gas permitting and in that instance we did not convene a panel now we did get comment from spa indicating that they thought we should i believe the disagreement is one that we have had in the past before in particular as you believe or do ya know oh i do know yes let me explain when that happened that had to do with the ozone and fineparticle standards that we issue in one thousand nine hundred and ninety seven at that point in time sba also indicated to us that we should convene a panel we indicated that that rule was not subject to a panel requirement that was actually taken to court the dc circuit said that sba's interpretation of the rfa doesn't carry any more weight than epa's and they disagreed with sba and found that our interpretation of the rfs was persuasive we actually won that case and we have never ever lost a case in this miss rodgers did you suggest a panel be convened for the tailoring rule and the endangerment finding and the lightduty truck rule yes we did yes we did congressman so all three and miss mccarthy you declined to do it for each of those well we explained each of those rules and i can go through them if you'd like but we still believe we took the appropriate action under the law cause you talked about the tailoring rule and i didn't hear ya talk about the other two so three times i can talk about the endangerment finding endangerment finding okay epa looks at cost and looks at getting sbrefa panels together when there isn't let's cut to the chase here why not on something this important something of this magnitude why not do the standard practice why go through this to cite this decision that and here's why why not just do what the advocacy group that's in the law and follow the process that's designed to be followed we did follow the process that is designed to be followed what i would indicate to you is that well again we got the advocates for small business both of em saying ya didn't i would disagree respectfully okay we'll yield to the ranking member or ranking member to the chair of the full committee the gentleman from california excuse me i was ranking oh i'm sorry oh no you should take miss speier i didn't see that you'd i apologize mr chairman i'm gonna insult ya twice in thirty second ladies first please but i figure we should go to use i didn't see the gentlelady walk in from california so california's gonna get covered nonetheless one way or the other thank you mr chairman and thank you mr chairman i would have yielded but i have constituents who are waiting in the wings to talk with me so i would like to take my opportunity now miss rodgers chairman issa circulated a dear colleague letter to house members yesterday i believe that cites a september two thousand and ten report issued by the sba office of advocacy authored by crain and crain the report estimated the annual cost of regulation was more than one hundred and seventy five trillion that's kind of a staggering figure yet in february of this year professors sid shapiro and ruth ruttenberg released a critique of the crain and crain study calling setting the record straight the shapiroruttenberg found that the crain and crain report had severe flaws quote unquote one of these flaws the study was that they looked at costs of regulation without looking at the benefits i think ya could make the case if ya look at the cost of running congress it's staggering but some would argue that there's some benefit associated with running congress in any case unless you all wanna retire or resign at this point in time miss rodgers did the sba office of advocacy contract with nicole crain and mark crain and did they ask the authors to evaluate the benefits of regulation or only the costs thank you congresswoman we did not ask them to evaluate the benefits as well and the reason is this this is the fourth in a series of studies we've done on the same issue which is the cost of regulations and the impact of those regulations on small business the purpose of the study is not to show regulations are bad and not to show that all of them are overburdensome for small business the purpose was to show that small businesses feel the effect of regulations differently than large businesses and the reason that was done for the cost and not the benefit's because the costs are what affect small businesses most and it's what the regulatory flexibility act requires our office to oversee which asks agencies to review the cost of their all right how much did that study cost oh i don't know that answer i'll have to get back to you would you please provide that to the committee i'd be happy to okay another flaw in this study identified by shapiro and ruttenberg was that the sba's office of advocacy never has access to the underlying data used in the report a little astonishing to me if ya can't look at the underlying data then garbage in garbage out is the way i look at things miss rodgers does your office have the data used in the crain and crain study if so will you please make that data available to us i will check and see if our office has the data would make available to you i'm told that it is available through crain and crain on their website or through their website that they have made it available when we contract out studies our office is not required to ask for that data and make it publicly available the author usually keeps that data for lemme suggest to you that from a public perspective if you're using taxpayer funds we deserve to have the underlying data so we can in fact determine whether or not it's accurate miss mccarthy if epa funded a study would the agency expect to have access to the underlying data the agency would not only have access to it the public would all right i think that makes sense in addition to shapiro and ruttenberg one of the peer reviewers richard williams from the merce mercatus center raised concerns that the report's regulatory quality index may not measure what the authors say it measures and even if it does it may overstate the costs of regulation when used in conjunction with other measures miss rodgers what if anything was done to address this concern that was raised during the peerreview process we did have the study peer reviewed and it came back with actually excellent reviews during the peerreview process as i mentioned it's one in four studies crain has been involved the author has been involved in many of our studies previously which and used the exact same methodology have not had complaints before then we've done it in one thousand nine hundred and ninety five two thousand and one two thousand and five and two thousand and ten it's basically the same methodology a new version of the same study with an updated cost on how these costs are affecting small businesses miss mccarthy do you have any concern with the peerreview process used to evaluate the crain and crain study i do and i'm glad you asked that as far as i know the study was reviewed by two individuals the sum total of one of the individuals comments was and i quote i looked it over and it's terrific nothing to add congrats if this is the quality of the peer review of that study then i would suggest to you it's a study that epa could certainly not put its weight behind epa is required to do peerreview analysis of its studies it's required to have our studies have analytic consistency rigor real peer review transparency the last report that epa went out and contracted for and worked through was peer reviewed by thirty four economists and technical individuals we had a thorough public comment process what i have here holding is a doublesided copy of just their last comments that they submitted to us during the peerreview process two individuals does not make a substantive peerreview process when we have repeatedly asked for the underlying data and have not been provided it by crain and crain or by the sba i thank you mr chairman i know my time has expired but i would just like to suggest to all of us that taxpayer funds should be spent on studies that really give us good data and certainly the data should be available to us and to the taxpayers of this country so i would hope that as we look at ways of making sure that government operates effectively that we require that moving forward thank you i thank the lady she makes a good suggestion following up on that miss mccarthy in the closing of your testimony i will close with the statement by the small business majority and you quote the ability to regulate greenhouse gasses should not be limited d'you know what the membership is in the small business majority d'ya know that number i'm sorry i do not well according to the new york times story july 8th two thousand and nine small business majority has no membership its founder mr john arensmeyer says it can no longer objectively represent small business if it had membership while the gentlelady from california's point is good the close of your testimony cites a group at least according to the new york times that has no membership and yet portrays itself as an organization representing small business i think both points are well taken you should make sure in your testimony ya quote from a source that actually might reflect something of the interest of small business and with that i would yield to the chairman of the full committee thank you mr chairman and i'm sorry that my colleague from california left lemme just make something clear for the record miss rodgers miss mccarthy you're both working for departments headed by president obama political appointees right yes so when she implies that one side of your two positions must be good and the other is ill conceived and doesn't care about the same things that we all saw president obama elected for at least miss rodgers i suspect you object to some idea that you don't care to get it right or that somehow your mandate is different in some way wouldn't that be true yes congressman i wanna absolutely object and small businesses care about clean air and care about the environment we might wanna make that point as well well lemme ask you both a question isn't it true you could both be right that miss mccarthy with a mandate to essentially have the cleanest possible air and water can in fact in good conscience make every effort to be as pure as possible we used to say driven snow but i've seen what it looks like when it melts so i won't go there and isn't it possible miss rodgers that when you go out and you get a study that shows one hundred and seventy five trillion that you're not saying that you can save all of it and still have the level of clean air and clean water the american people expect couldn't you both be right i would absolutely agree now miss mccarthy wouldn't you agree that somewhere in one hundred and seventy five trillion if that's an accurate number that some of that should be reviewed and reconsidered to see if in fact changes could save much of that burden and free up those dollars for other uses even if their use is to help clean the environment that not every regulation has accomplished what you wanted it to in a soundscience way wouldn't you agree we are in the process now of complying with the president's executive order and doing a review of our regulation yeah but i actually was looking at the conclusion wouldn't you conclude that there's gotta be something there that you could relook at that would help get burden off the backs of small business and maybe even not small business that in fact on a tradeoff of costbenefit is not the best regulation out there mr issa i would suggest to you that we continually look at those issues and we're working with the smallbusiness constituents as we speak maybe you could explain something to me in boiler mact you've got a standard that can't be adhered to and you've gone to the courts asking them to give you relief and they've said we can't relieve you from your stupidity go to congress now isn't that slight vulgar but pretty much the exact truth that you've got something that does not exist you've created a rule that cannot presently be done you've gone to the courts trying to get temporary relief in hopes that someday it will be able to be complied with rather than saying what is it that exist that can be complied with wouldn't that be a fair characterization i don't believe so no okay what part of it was inaccurate tell me in specificity the specific issue is the boiler mact rule went through a public process no i'm looking at the outcome is the science attainable today according to your yes it is yes then why did you ask the court for relief because we believe that it deserved reconsideration because some of the legal underpinnings during the public comment process because of comments we heard from industry many of them small businesses we made substantial changes from proposal to final which warranted additional legal underpinnings through public comment process we will do that why wouldn't ya just pull the rule there was no need to do that and we were under a court order to deliver a final rule within a given point in time which we did but we also amended so now we have something for which you've asked the court for relief and they can't give you relief no what we intend to do is reconsider the rule in due time we will respond appropriately it will be legally sound and it is already scientifically credible but not currently available oh it's actually a final rule no no i'm talking about the actual technology oh no i'm sorry i believe that the requirements in the rule are achievable well thank you i appreciate your having that opinion under oath the mandate for these impacts it's probably been brought up but i'll just bring it up again last year i sent administrator jackson a letter requesting the epa suspend finalization of its greenhouse gas proposals until after the agency'd complied with the office of advocacy demand you sent me back a response on february 4th informing me the agency's decision was to move forward at that time you indicated that your outreach under 609c fully satisfied epa's obligation to assess the impact and actions on small business d'you still stand behind that yes miss rodgers do you think that they've really lived up to the spirit of that unfortunately no we don't 609c of the rfa does allow an agency to reach out to small businesses but we don't feel that this relieves them of their duty to hold a sbrefa panel as i said in my testimony outreach to small business is not the same thing as a sbrefa panel the advantages of the panels that you don't get from outreach are at the preproposal stage you have the threemember panel our office epa and the office of information regulatory affairs at the white house and at the end of the process you end with a panel report that has the recommendations from actual small businesses on various alternatives that get put into the docket i'll add another question to this this round if i can since i think we've got a little time here section three hundred and seventeen of the clean air act requires epa to complete an economic impact assessment for any regulations propagated under section two hundred and two of the act which applies to the car rule did epa conduct a section three hundred and seventeen economic impact assessment before any of its greenhouse gas rulings were made it did conduct a regulatory impact assessment associated with the lightduty vehicle rule if so did the analysis assess the following which are required by statute the cost of compliance yes the potential inflationary or recessionary effects i believe so the effects on competition with respect to small business the rule exempted small business mr issa so we probably did not need to go into much detail there do you intend on always exempting small business no when it's appropriate we do no no do you expect that this rule would never change that in some future time you wouldn't do it if the rule changes we'll have to go through a rulemaking process and conduct another analysis you carved out small business in order to essentially keep yourself from having do that assessment or that assessment simply wasn't necessary and that was never part of the consideration that was obviously part of the regulatory impact assessment was to look at all costs what i'm explaining to you is that we did not cost small business the reason i ask the question is you don't exempt anybody without a reason obviously we don't want clean air and clean water only for big companies we want clean air and clean water so in your decision to exempt small business wouldn't you need a cost reason to do so actually we did provide a thorough assessment of why it was appropriate to exempt cost was part of the consideration lead time was part of the consideration because you're asking significant improvements in cars and many of the smaller manufacturers would not be able to produce and comply with the rules in the same way that large industries or large manufacturers are able to do that the next test was the effects on consumer cost did you take that into consideration yes we did the effects on energy use did you take that into effect yes we did to the extent that the epa has conducted any economic impact analysis i respectfully request that you provide that to the committee are you prepared to do that oh we certainly will okay i would very much appreciate it that in our opinion has been requested previously and is long overdue i'm getting head shaking oh christina am i wrong we have requested that i'm not sure it's appropriate here but we i mean we've certainly sent epa a series of letters okay i think if you look through the series of letters you'll find that that was certainly something we had expectation of getting we haven't gotten but i appreciate your willingness to give this to us today and yield back thank you chairman it is part of the rulemaking that that is public information and is in the docket thank the chair and it's on the web i just have one other question and will be happy to yield back if the chairman has anything additional in your testimony miss rodgers you indicated that the panels work the panels work and you feel like you got a good relationship with miss mccarthy and anyone and everyone else that you work with there it's a process that makes sense and that has been effective miss mccarthy would you agree with mrs rodgers testimony what she said in her testimony that these panels work and that it's a good process our relationship works very well i would submit to you that we both are extremely concerned that epa get appropriate information and feedback on small businesses and impacts to small businesses relative to those that we are regulating through a rule yes but to the specific question the sbrefa panels work the process works it has worked very well yes okay now i come back to what i asked you earlier a rule of this magnitude in light of the debate that took place in the united states congress dealing with capandtrade this issue that's been front and center for the american people a process that you both indicate works why didn't ya follow it for something again of this magnitude of this importance with the debate the way it is with the concerns expressed by small business owners in front of this committee today look i understand hindsight's two thousand and twenty and all that but if ya had it to do over again would ya have convened a panel and went through the normal process let me explain to you if i could can ya answer that question if you had a do over again no no i would not i would do it exactly the same way and that is because these panels are designed to address issues relative to our rulemaking that sets a standard or establishes a requirement on a business sector a small business entity they're asked specific questions like what's a reporting and recordkeeping and compliance what are the federal rules that might duplicate it what alternatives d'ya have to the proposed rule we did not enjoin a panel because the rules that you're talking about did not immediately or directly regulate small business well wait a minute but so there was no way in which we could apply this rule you just said ya had a great relationship in those questions miss rodgers is an intelligent lady her folks who work for her are intelligent people they suggested that ya do it they did so you may not have thought it was absolutely necessary but why not do it again when they're saying this makes sense to do and business owners are saying it makes sense to do we've heard testimony of the concerns they have why not just do it why not be safe rather than sorry on the tailoring rule we did a voluntary program where we had an outreach with twenty three sers we had a panel we got their input what we are not agreeing to is this rule and there is a requirement for panels to be developed when we have a rule like the endangerment finding that isn't directly regulating small businesses like the tailoring rule miss rodgers that is deregulating small businesses it doesn't mean we don't appreciate the input of small business and we try to get that input into the process miss rodgers you understood when you suggested the panel that the epa could in fact take the route that they took you understood that yes ya didn't think it would happen cause it's outta the norm right exactly yet you still said this is important to have this panel give me why you were so focused on that and why you've expressed comments after the fact why it was important to have that panel i'd be happy to one of the reasons the endangerment finding no it did not directly regulate small businesses however it did set the greenhouse gas regulations in motion the foreseeable impact of these rules on small businesses certainly were there the next rule to come about was the vehicle emissions rule of course they were regulating large automobile manufacturers however just by beginning that process and starting to regulate greenhouse gasses under the clean air act and one part of the clean air act automatically triggered the greenhouse gas regulation or regulating greenhouse gasses under the entire clean air act thereby subjecting small businesses to permitting requirements under the clean air act so you could foresee what was coming why couldn't they i can't answer that question but what i can say is by not hold and it was clear did you have any in your team who suggest this was there any disagreement as to was it unanimous we need to move with this panel it was unanimous yeah so it was strong you had to do this yeah you could foresee what was coming yes we could and you've proved right based on the testimony we got from the first panel we think we have and yet they just couldn't see it unfortunately no see we have no further questions for the panel wanna thank you both for attending today and again i wanna apologize for the schedule we'll look forward to visiting again we're adjourned