will come to order we exist to secure two fundamental principles first americans have a right to know that the money washington takes from them is wellspent and second americans deserve an efficient effective government that works for them our duty on the oversight and government reform committee is to protect these rights our responsibility is to hold government accountable to taxpayers because taxpayers have a right to know what they get from their government we will work tirelessly in this partnership with citizen watchdogs to deliver the facts to the american people to bring genuine reform to the federal bureaucracy this is the mission of the oversight and government reform committee i want to thank all our witnesses for being here with us this day i will do a quick opening statement and then my friend and colleague and ranking member  will have an opening statement and then we will get right to your testimony we do have the australian prime minister on the floor at so we want to get through as much as we can prior to adjourning for that thank you all for coming today last month the oversight and government reform committee held a hearing entitled regulatory impediments to job creation this hearing was the result of a committee effort to learn about which regulations were standing in the way of job creation we heard from many employers  and industries from across the nation as chairman of this subcommittee i am especially looking forward to continue this work examining the effects of regulations on american job creators this subcommittee has jurisdiction over the regulatory process and we recognize that job creators do not live in a world where they are only subject to one regulation issued by one agency in the real world outside the beltway job creators are subject to numerous regulations and compliance obligations enforced by a virtual alphabet soup of federal agencies as we attempt to get our economy going again and get people back to work it is crucial that we all start to think about the numerous burdens and mandates that we are putting on the private sector on januaryhst two thousand and eleven president obama issued executive order thirteen  three directing agencies to quote take into account the cost of cumulative regulations i applaud this commonsense plan today's hearing will examine whether the government has begun to follow this directive and what congress can do to help implement it i believe we should start by first looking at the bedrock of our economy the manufacturing sector u s manufacturing is the industry hit the hardest by regulatory costs with perfirm costs at approximately six hundred and eighty eight thousand dollars halfamillion dollars greater than the national average cost for other industries moreover small manufacturers bear a proportionately larger regulatory burden with an estimated cost of twenty six thousand dollars per employeeh more than double the burden that is faced by larger manufacturers while the oversight committee was collecting information from job creators about the regulatory burdens they faced it quickly became obvious which agency was the numberone concern to them the environmental protection agency this hearing will provide congress with an opportunity to understand how all the regulations in the pipeline at epa in addition to the one already in existence impact a critically important part of our economy i would like to take a moment to say how disappointed i am that the epa chose not to send a witness to this hearing the reason given was that their witness would not be scheduled to testify alone on the first panel i think this subcommittee has been very fair in offering to seat their witness alone on a second panel that would be guaranteed to start at sharp this morning however that offer was rejected it is too bad that the epa not only refuses to sit at a witness table with some of the very people that they regulating but also refused to wait and listen to the rest of the witnesses testimony also in contract to the epa our other witnesses here today have agreed to take time out of their schedules and provide their testimony to us without a list of demands epa's behavior is the type that gives people throughout the country the impression that their government is aloof and not listening to them despite epa's lack of participation i still think we can have a productive and informative hearing the panel we have here today can speak very well to the cumulative impact of government regulations this information straight from the people affected is invaluable in fact the committee even has a web site americanjobcreators com where any american can log in and tell us their story we are listening and we want to hear what you have to say with that i would yield five minutes to the ranking member mr  of putting administration witnesses first on their own panel and there have been exceptions but the committee has allowed witnesses from republican and democratic administrations to testify first on their own panel now i certainly respect the prerogative  this chair and i respect the prerogative of the chair of the full committee and we don't need to be at loggerheads about things like the sequence of witnesses we have things that are much more serious to get into here and administration to have the first panel witness we thought in light of the economic situation in light of the concern we all have regardless of party about the regulatory burden that it made sense to hear from the people who faced these regulations and then have the administration have their complete panel to themselves talk and then follow back up with the same people we thought that would be a better way for members of congress and the public to get information and that is why we chose the approach we did as i indicated unfortunately the epa decided not to send a well again mister chairman you know i think that if you and i had had an opportunity prior to this moment right here to work this out i think we probably could have found a way to get the epa participating i certainly  think that it is a good idea for them to hear witnesses testify particularly those who are subject to the epa regulations it makes sense it can actually help you be a better regulator to hear what people have to say i fully support having a discussion about the impact of regulations on industry and i want to know if there are regulations that are unnecessarily burdensome on this country's manufacturers i also know that regulations are creating jobs and the regulations are saving lives and in order to have a truly productive conversation about regulations that yield real results we cannot focus solely on cost the cost must be weighed against benefits this year the office of management and budget estimated that from two thousand two thousand and ten federal regulations resulted in a financial benefit of one hundred and thirty six dollars billion to six hundred and fifty one dollars billion with a cost of forty four dollars billion to sixty two dollars billion that is a benefittocost ratio omb's lowest estimations and greater than a ten one benefittocost ratio based on omb's highest estimations epa's air pollution rules alone account for sixty to eighty five percent of these benefits that means that in a year period from cents billion in benefits these kinds of regulations also have a positive effect on job creation a two thousand and eight study found that environment protection as an industry generated three hundred dollars billion in sales in two thousand and three and provided five million jobs many of the regulations identified as burdensome by today's witnesses fall under the umbrella of the clean air act i think that we are going to hear a lot today about the cost of the clean air act so i want to take a minute to talk about its benefits air act amendments programs would exceed their benefits under any reasonable combination of alternative assumptions of methods even if one were to adopt the extreme assumption that air pollution no effect on premature mortality or that avoiding such effects has no value in two thousand and three alone epa estimates that the clean air act standards on only particulate matter and ozone pollution have prevented one hundred and sixty thousand premature deaths one hundred and thirty thousand cases of acute myocardial infarction one point seven million cases of asthma exacerbation eighty six thousand hospital admissions eighty six thousand emergencyroom visits hmillion lost schooldays and thirteen million lost workdays we don't want to emulate what is happening in india and china we don't want to turn the clock back to the  th century when the absence of regulation led to pollution of our air and water exploitation of our natural resources and destruction of our environment so mister chairman as we sit here today and talk about the impact of regulations let's be careful not to forget that premature de said in my opening remarks that effective regulatory review should include several elements an examination of the costs and benefits conclusions based on solid data and input from a variety of sources i support a comprehensive review of the impact of regulations but i stand firm in my belief that any assessment of cumulative impact must take into account the benefits of those regulations and not just the costs we are better than that i am also mindful that there are costs associated with the lack of regulation as well the two thousand and eight financial collapse and subsequent loss of eight million jobs taught us that much as a matter of fact just held a hearing in my district this committee held a hearing in my district yesterday clean air transport and the boiler mact rules will strengthen our economy and grow jobs specifically the report estimates that over the next hyears hmillion jobs will be both directly and indirectly created by these two rules this includes jobs in steel manufacturing catalyst system manufacturing and control system manufacturing this is in addition to the substantial public health benefits from cleaner lead to energy savings for manufacturers the institute found that for refineries glass manufacturers and others investments in efficiency technologies would offset most if not all current environmental costs combined  decemberh several business organizations representing sixty thousand firms across the country wrote to president obama and members of congress urging us to support the epa and the clean air act in addition in a december wall street journal letter to the editor titled we're okay with the epa's new air quality regulations eight leading utility companies explained that epa air quality regulations carry economic benefits including job creation finally mister chairman i continue to hope that we will conduct responsible evaluations of regulations consistent with the president's recent executive order however any discussion on the cumulative effect of regulation must include the positive impact regulation has on our economy and on our families and on our constituents and the benefit it holds for individuals and businesses alike i thank all of our panelists for being here today and i look forward to hearing from you on how we can improve regulations to make america safer and i wanted to be very clear mister chairman on this side of aisle we are concerned about a balanced approach to this we realize that there are regulations that are probably outdated but we must be very very careful because regulations were after all put forth to make sure that the american people's health safety and welfare are protected and that includes every single person in these great united states of america again  other members of the subcommittee my name is donna harman i am the president and ceo of the american forest and paper association and the issue that you have brought before us today to look at the challenges presented by the cumulative impact of the epa regulations on manufacturers is in our view very timely and extremely important many of the laws and now regulations that come from them were enacted decades ago and they have contributed to significant improvements in air and water quality the forestproducts manufacturing supply chain is heavily regulated and we will continue to adapt to wellreasoned regulations that are both affordable and achievable but we can not respond to regulations in a vacuum businesses in our sector must consider the global competitive environment in which they operate they must compete for capital globally and they need to have the time to build new regulatory requirements into their capital planning process they must also be able to rely on government so once a regulation is in place it will not be selectively enforced or changed within a short time frame paper and wood products manufacturers are facing over twenty major regulations from epa's clean air act program alone the pace and volume of regulation is not sustainable for the agency the states or the companies that are required to meet them or the congress whose obligation it is to provide oversight i would like to call your attention to the chart that was included with my testimony and on the screen the forestproducts industry like many other manufacturing industries has been hit hard by the economic crisis since two thousand and six when the housing and economic crisis began the forestproducts industry has lost thirty one percent of its workforce nearly four hundred thousand highpaying jobs largely in small rural communities that can barely afford to lose them the closure of a mill in a rural community in a small town has an enormous ripple effect when that mill is the largest employer and a major contributor to the local tax base and to the community programs in many cases without these facilities these communities die government regulations that are not costeffective can exacerbate what is already a bad situation af and pa recently commissioned a study by fischer international to assess the jobs impact of the cumulative burden of the largest pending and expected epa regulations the study concluded that several upcoming clean air rules would cause sixty two mills to close and result in a direct loss of nearly twenty seven zero paperindustry jobs if supplier jobs and jobs associated with the respending of worker incomes are included the total job losses would reach nearly one hundred and fourteen changes and these changes are on top of the changes and the capital they previously invested during the past decade to comply with the two thousand and four boiler mact rule for the forestproducts industry alone our initial estimate of the capit cost of the final rule is about three dollars billion and eleven dollars billion for all manufacturing plus the operating costs unfortunately as our technical experts delve deeper their concerns about achievability and cost have grown for example the carbon monoxide limits for some biomass boilers actually became more stringent burning wet biomass will be particularly challenging even with the combustion improvements epa assumes necessary to meet the more stringent requirements while congress authorized epa to adopt a healthbased approach they determined that they would not do so in the rule that was just recently released we believe if they were to do that that we could reduce the capital costs required to meet this rule without any impact on human health i want to just in my remaining time mention two other rules the pulp and paper mact and residualrisk rules the pulp and paper mact rule is  intended to be a onetime rule epa concluded that rule about hyears ago we have implemented that rule we have made significant changes and gotten a lot of environmental improvement as a result of it now they are talking about  redo that is an example of the agency going further than is necessary overregulating and overcontrolling when it is not necessary to protect health the last rule i would like to mention briefly is the national ambient air quality standards i think others will also mention this rule this rule is another rule that collectively will cost the forestproducts industry alone over hbillion your look at these and other rules today is critically important because jobs are at stake investment in making our facilities internationally competitive and securing their future is really what is at stake so thank you for taking the time to delve into and understand these issues and i would love to answer your questions employing over two thousand americans i presently chair the portland cement association that represents ninety seven percent of u s cement capacity with nearly one hundred manufacturing plants in thirty six states and distribution in all fifty nails are to wood without it our bridges roads dams schools and hospitals would be rubbles of rock at hbillion combined revenue we are a relatively small industry but without us the entire trilliondollar construction economy would come to a halt without cement our alreadydeteriorating infrastructure would degrade to unsafe levels along with our communities and quality of life the great recession has hit our industry very hard cement demand has dropped in half profitability has been wiped out yet we sought neither handouts nor bailouts we cut costs which sadly included more than four thousand jobs what remain our fifteen thousand wellpaying jobs with average compensation of seventy five thousand dollars and a high representation of minorities but today these jobs are in jeopardy and the spillover could affect millions employed in the construction sector not only did the stimulus act fail to raise construction demand but at our weakest moment this government's epa whose budget by the way was enriched hpercent through the same act launched an unprecedented regulatory attack against our industry this is expanding facilities with stateoftheart technology that were winwin for both economics and environment today our industry is one of the largest recyclers of industrial and urban byproducts that would otherwise be landfilled yet the current epa has switched from winwin to winlose there should be no doubt that winlose will lead to loselose other strategic materials such as rare earths once a vital u s industry but now controlled by china are living proof that overregulation leads to offshoring this is not a choice between environment and economy because the two go handinhand and when economic vitality suffers so does environmental sustainability without strategic materials like cement economic vitality cannot be sustained without time to get technical i would like to note that for one compound mercury epa imposed standards five to twelve times stricter than those in germany the irony is that this rule won't even help the environment as hpercent of the mercury found in the u s originates from offshore epa has justified these rules with incomprehensible computer models but they rules make investing in the u s unattractive compared to overseas in the end neither the economy nor the environment win american jobs and investment are lost the same emittants reach americans in even greater quantities from offshore dependence on foreign cement follows the road of dependence on foreign energy and with cement more cumbersome to import than oil shortages and price volatility will become more common this could hurt the entire construction economy with impacts on infrastructure housing commerce and jobs this industry is committed to its longstanding spirit and practice of continuous improvement and environmental stewardship but we need a government that we can work with in a winwin constructive manner unfortunately we feel that industries like ours are getting caught in the crossfire of the major assault against coal by globalwarming forces in this country immediate action is needed to rescind these regulations when we are in the midst of one of the worst economic crises before they prolong or worsen the harm and place a nearterm moratorium on more rules congress needs to step up and take back legislative ownership if we are to revive privatesector confidence that will retain and create good jobs for americans and restore economic prosperity we also need congress to undertake broader legislative reform that will return epa to its original purpose strengthen standards of justification for rules consider crossborder economic and environmental impacts approach industry with winwin rather than winlose frameworks objectively inform rather than panic the public and reduce wasteful environmental litigation thank you for this opportunity to testify i would be happy to answer any of your questions mister walls thank you mister chairman good morning to you and members of the subcommittee i am mike walls the vice president of regulatory and technical affairs at the american chemistry council earlier this year both the leadership of this subcommittee and president  called for an examination of existing rules to ensure that they don't create an undue burden on american businesses we strongly support that effort we believe there is an appropriate role for regulation in encouraging behavior efficient and effective regulation can help markets function regulation can help address important publicpolicy objectives but regulations promulgated without an analysis of the impact on the economy and the impact on jobs including how multiple regulations compound those impacts can have quite the opposite effect if manufacturing is to make a significant contribution to economic recovery including the creation and maintenance of wellpaying jobs it is imperative that we have an accurate understanding of the impact of these proposed regulations the full regulatory burden on any particular sector can only be known if that cumulative impact is assessed now the lack of cumulativeimpact assessments is a fundamental shortcoming in the way government agencies develop and evaluate proposed rules that shortcoming creates regulatory tunnel vision it puts innovation investment and jobs at risk now acc and its members have a keen interest in getting regulations right our industry is arguably america's most highly regulated industry there is no aspect of chemical manufacture distribution user disposal that isn't regulated by one or more federal state or local requirements now while we understand that substantial benefits can flow from regulation our industry also understands that that very regulation can translate to fewer american jobs a less competitive economic position and reduced innovative capacity now a quick example is useful our industry stands right now on the cusp of the most significant energy and feedstock development in a generation the market changes that are occurring as a result of the vast sh gas formations around the country have the potential to put our industry and our economy in a significantly improved global competitive position the gamechanging nature of shale gas can bring billions in new capital investment thousands of new jobs and more than one hundred dollars billion in additional economic output and federal state and local tax revenueh just flowing from those shale gas activities and the downstream uses of it but that  gamechanging development could be impacted severely if regulatory barriers minimize the ability to capitalize on the opportunity now acc has analyzed the impact of regulatory burdens across eight major undiscounted annualized costs as high as hbillion a year in the outyears now we are not saying that those rules collectively or individually would eliminate any potential jobscreating investment but we are saying that those costs those burdens are very relevant to the market decisions about where and when investments are made so the compounding effect of those compliance costs diminish the resources available to make meaningful longterm investments that create jobs promote innovation and solidify our competitive position the federal regulatory process and analysis of regulations can be improved we would like to see o the individual agencies update their respective economic impact analysis guidance to require cumulative impact of multiple regulatory actions we would like to see agencies identify and catalogue the sectors impacted by a new regulation and even extend that approach into the paperwork burden agencies should seek impact from the affected regulated community before developing a proposed regulation it goes to the w possible from an early engagement so that the public the government and the regulated community all benefit we would also like to see federal agencies consider the regulatoryinduced employment changes as either a cost or a benefit in their assessment and not consider them some indirect cost that is not routinely assessed mister chairman ccc supports the efforts to ensure that cumulative impact of federal regulatory programs is considered as new regulatory requirements are considered and i will just leave you with one final thought if our regulatory agencies are capable of assessing the cumulative benefit of their regulatory programs surely they are capable of assessing the cumulative burden thank you mister jordan thank you great point  company produces specialty steel for other forgers and open and closeddie forgeries i am also the incoming president of the forging industry association with operations from member companies in thirty eight states the modern forging process is capitalintensive and most forging companies are small businesses forging is one of oldest known metalworking processes where metal is pressed or pounded or squeezed under great pressure to make highperformance parts in a nutshell nothing that moves on land or in the air or on the sea can move without forgings mister chairman  manufacturers need a regulatory system that works appropriate regulations that improve health safety and the environment are a necessary part of doing business in the u s however when the regulatory process produces new regulations that do not provide additional benefits for the attendant costs and the regulatory community has little to no opportunity to participate in the process the system is broke fia believes there are two overall problems with the regulatory process first there is a lack of understanding of the manufacturing supply chain and effects of regulations on that supply chain you cannot build a wind turbine with wind energy said another way you cannot regulate say the power generation or automotive industry and not have an effect on the suppliers in that supply chain second there is a lack of transparency and sufficient stakeholder involvement in the regulatory process when agencies bypass the administrative procedures act or allow only brief public comment periods on complex technical regulatory changes we get illconceived regulations with unintended or unexpected consequences and we undermine the integrity and the public's confidence in the rulemaking process fia members are small and rely on the fia to assess the potential impact of our government action on their operations and to weigh in on their action on our behalf but the fia does not have technical experts on all subjects at all times so we need the time to consult with member companies of all sizes on proposed government regulation including determining when specialized expertise may be needed i would like to highlight three examples of current fahrenheit and subsequent heat treatment is done at temperatures up to one thousand nine hundred degrees f and using natural gas electric or induction furnaces there are no alternative technologies available decision to start regulating greenhouse gas emissions with large stationary sources means forgers will only have to worry about the potential effect of these regulations on their suppliers our company makes steel for the for ers and we make forgings ourselves so how much will our electricity costs rise and what will be the effect on other raw materials when suppliers are regulated we are very concerned that we will be pushed into a regulatory system merely because we use natural gas or make critical components the second example involves an epa proposal for metalworking facilities to be considered in the development of the financial responsibility requirements under the superfund law the proposal also required that the entire metalworking industry be examined to determine if they should be subject to these requirements these types of financial assurance mechanisms for potential superfun liability can be very expensive and extremely difficult to obtain for most metalworking companies which are small and mediumsize and pose little risk and we also carry insurance finally i would be remiss if i didn't mention the fortunately as we know that was withdrawn lastly it is critically important that we regulate only that which requires regulation and only after a thorough vetting of the potential benefits impacts  plants in compliance with environmental health and safety regulations boral's energyefficient brick kilns have reduced energy usage hpercent over the past hyears it is only one example of our commitment to environmental s level in hdecades approximately nine thousand direct brick manufacturing jobs and eighty six zero indirect brick jobs have been lost since two thousand and six brick industry business is only very slowly beginning to pick up but there no end to the escalation of the cost of doing business due to the regulations that derive no commensurate benefit to the environment health and safety we believe responsible reasonable regulations can be developed to protect both environmental and health but the number of rulemakings in the pipeline and their anticipated mandates jeopardize brick jobs and our recovery our greatest concern epa is currently redeveloping a maximum achievable control technology rule for clay brick and tile the key word is redevelop as the industry recently spent more than hmillion in capital costs alone to come in compliance with the original act rule that was finalized in two thousand and three boral spent more than twelve dollars million to install mandated control devices to meet the two thousand and six compliance date  the u s district court vacated the original mact rule in two thousand and seven more than a year after the compliance date most states continue to enforce mact limits as part of existing title v permits the result is that the brick industry  for the vacated rule to calculate an even more stringent baseline for all kilns the technology to meet the final standard may not even exist if epa cherrypicks data to establish a standard that no realworld brick kiln has actually willingness to discuss a healthbased compliance approach we are hopeful it could ensure that controls are installed when needed to protect the environment rather than mandated controls that are unnecessary due to an imperfect database epa could use  discretion under the clean air act to find alternative solutions to avoid unnecessary jobloss and expenditures that provide little to no benefit to the environment our second big concern is osha's proposed crystalline silica rule that is expected to substantially decrease the permissible exposure limit across general industry worker safety is vitally important to borel however decades of scientific studies demonstrate that the risk from exposure to silica from quartz in brick clays and shale are not the same as risks from quartz used in other evidence may not be reflected in the proposed rule the current pel protects brick workers and any reduction for the brick manufacturing industry would impose cost burdens for nondemonstrated health benefits these two issues alone could overwhelm the industry taken together with epa's greenhouse gas regulations however that could encompass numerous brick kilns in the coming years and its tightening of national ambient air quality standards the burden is unsustainable given the important progress the federal agencies have helped guide to protect the environment and safety future steps should independently demonstrate reasonable costs for potential improvements congressional oversight should ensure maximum benefit per dollar invested for the regulatory compliance to prevent small historical u s industries manufacturing industry for more than hyears the institute has been the nonprofit national trade association of companies working to equip stationary sourcesh generally power and large industrial facilitiesh with air pollution control and measurement technologies to about one hundred companies leading manufacturers in both measurement and control we believe and history affirms that equipping these sources ensures industrial progress while cleaning the air we breathe here are a few realities i would like to highlight today we know that investments  technologies result in substantial returns in avoided health costs for the american public we know that these same investments are plowed back into the u s economy as real jobs in my industry and many related industries we know that many of the business down into a rather simple formula the clean air act spurs investments which creates jobs improved health and a modernized and more sustainable fleet the formula has worked well for forty years and this is something we need now more than ever the principal function  of clean air requirements is to clean the air we breathe we therefore are heartened that a renewed interest in jobs has reintroduced one of the most amazing aspects of air pollution and control technologies simply for every dollar spent as much as forty of the clean air act the technology innovations in our industry and the combined efforts of industries to clean the air while ensuring industrial progress it is important not to lose focus that the safeguards are there to create cleaner air for all of us helping to save lives and avoid or reduce illness fortunately these safeguards are a winwin to comply with them companies will need to undertake construction projects that means jobs in areas that are currently facing challenging times the clean air investments spurred by regulation create real jobs while satisfying their principal goal of healthy air most air pollution equipment for large sources is constructed or fabricated onsite and requires high levels of engineering and design labor and depends on component equipment and materials this means jobs for skilled craft labor such as boilermakers and new upstream and downstream employment and economic benefits for a variety of industries and communities where they are located for example building this equipment requires construction materials such as steel industry we rely on many other industries and employers to get the job done and that is just what we have been doing with tremendous success for several decades getting the job done where and when needed most as an industry icac offers constructive comment on almost every major a similar story exists for industrial sources where we were looking at the clean air act spurs investments which create jobs improved health and a modernized fleet we are at a juncture where necessary upgrades are long overdue and an experienced workforce is fully available to complete the reality is that my industry works constructively to help other industries comply with regulatory requirements we are highly competitive and we are looking at many technology solutions not just one often offering a suite of solutions  closing president obama's executive order on januaryhth characterized a regulatory system that protects public health welfare safety and our environment while promoting economic growth innovation competitiveness and job creation i hope that i have been clear is shared vision within my industry where for more than hyears the members have existed prospered innovated and made a significant contribution to the u s economy i look forward to continued efforts that create real jobs for real people and real health full committee hearing we had a number of smallbusiness owners there and one of our i believe freshman members asked what i thought was just the most compelling question they asked each of those smallbusiness owners if you knew then what you know now would you have started and it was amazing to me that every single witness that day said they would not have started their business if they knew then what they are faced with now on the regulatory front and so tell me  would that be consistent with the members in your respective associations and we will start with mr hkamnikar mister kamnikar yeah i would say that that is an accurate assessment most of our small member companies are familyowned hyears i think the most striking thing that they would tell you that is most difficult is that they begin a project or a proposal under one set of rules only to have those rules later changed boiler mact is an excellent example where they invested millions of dollars to comply with the and they would tell you that it has a real impact on their capital decisions whether to invest that capital here invest it overseas or not invest at all and the not investing it at all is probably the ohio and one comes to us from a gentleman from mina ohio close to mr hkucinich's district he has a quote he says a wise man once told me that the human mind can accept good news can accommodate bad news but can never get comfortable with uncertainty and  that is a huge impediment and i think in your testimony mr hpapadopoulos you talked about congress reclaiming its responsibility over this area so talk to me a little bit more about the uncertainty and the first question i asked do your members in your association would they echo what others have said that if they knew then what they know now they wouldn't have started their business mister papadopoulos congressman first let me start by talking about myself because over the last hyears i have encouraged and sold to my own parent winwin for the companies selling this equipment yes this you know control equipment winwin for the environmental activists what about a winwin for the companies that have to gain a return on investment i don't see that in today's u s environment and it saddens me as an american citizen more than anything else i see other countries getting ahead of us i see we have worldclass companies here in the u s we have the best environment here in the u s we breathe the best air and yet we are pushing our own worldclass companies to the brink you know we are not going to be breathing our own air we are going to be breathing other countries air the way we are going without the jobs without the investment that is to me the sad big picture and i have difficulty convincing in companies of the american chemistry council operate in a globally very intensely competitive industry it is that regulatory uncertainty that is the primary determinant in whether or not they are making investments here or elsewhere around the world i will just  environment and i had a visit a couple weeks ago from the pulp and paperworkers resource council and they provided me with a lot of information that would be interesting for this committee and i am going to submit it  shows the closed saw mills and paper mills two thousand and four to two thousand and seven and as i look at all these closures it is pretty stunning then they showed me a map of how many have gone to other countries notably china okay now it is a very interesting point here when i am listening to this discussion because i think you are mentioning one part of the equation but it is only frankly a small part of the equation because we are looking at trade agreements that were absent workers rightsh the right to organize the right to collective bargaining the right to strike right to decent wages and benefitsh human rightsh prohibitions on child labor slave labor prison laborh and environmental quality principles protection of air and water those weren't in our trade agreements in nafta and we look at the u s paper mill shutdowns we see how many shutdowns occurred right after and nafta and then after china trade the shutdowns skyrocketed  democratic because in order to have a political democracy you have to have an economic democracy i also want to put into the record a new story out of the guardian u k which shows that chinah china this is last year ordered polluting and unsafe factory shut down including i might add in china they shut down some of their older paper mills two hundred and seventy nine to be exact because the premier of china was concerned about making sure the energy efficiency of all of his industries could be increased so china gets the connection now between upgrading and energy efficiency and that it also means paying attention to the environment so for the record  hfoerter i wanted to ask you in your written testimony you state that each dollar spent on air pollution control technologies produces forty dollars in health savings can you explain how that those numbers come out to be very close to that forty dollars mister kucinich well you are telling us that epa regulations actually create jobs and support industry the figures i have seen from omb from the epa and from numerous private studies support your claims that environmental protection like the clean air act have a positive impact on the economy in fact a two thousand and eight study from the journal of environmental management entitled environmental protection the economy and jobs a national and regional analysis states that quote contrary to general public perception and public policy understanding year in sales in two thousand and three created five million jobs the authors went on to state quote most of the five million jobs created are standard jobs for accountants engineers computer analysts clerks factory workers and the classic environmental jobsh environment et ceterah constitute only a small portion of the jobs created most of the persons employed in these jobs created may not even realize that they owe their livelihood to protecting the environment mister foerter that sounds good and it sounds like good wellpaying middleclass meeting as we make jobs and the economy a priority here in this congress what is becoming more and more apparent to ush and i am sure you all have recognized this for a long timeh is the crushing regulations that you all face and it makes doing business in this country extremely difficult we would like to change that our chairman mister issa has charged us with going out and finding out the ways that these regulations are standing in the way of success and so that is what we are doing here this morning i think we can all agree that all of these regulations really represent a hidden tax on businesses and the cost of doing business and i would like to get into the cost of compliance in a few minutes i think that we can agree as was mentioned earlier that the stimulus failed because the government can't create jobs and so i want to thank all of you this morning for being the job creators in our country and for keeping our economyh you all are the ones that can get this economy back on track so we need to work with you to figure out how we get the government out of your way i also want to comment that not only have i heard from businesses throughout the hearings that we have conducted you hear from notforprofits you hear from schools that the costs of these regulations don't even make sense and it just impairs and impedes their success so i look forward to hearing from all of you this morning i guess i want to go back to my colleague mister kucinich's comments about the costs and the costbenefit i think i would like to hear from all of you if you wouldn't mind can you just t me in each of your industries if you can give me a figure for the cost of compliance the cost of regulations within your various industries ms harman ms harman in multiple billions of dollars between the capital costs plus the operating and maintenance costs that are ongoing it is not just the cost of initially complying with the regulation it is the dayin dayout costs it is also the cost of projects that can't go forward because they can't make it through the regulatory red tape a lot of these projects are energy efficiency improvement projects some of them are mill modernization projects they are projects that will secure the future of the mill so that our mills can actually buy the technology that mister foerter is talking about but if those  than it does not in chinah i am not using that as a role modelh but even in the eu we have gone to such an extreme in that count so you know i know we don't want to go back to where we were hyears ago that we know but i think we have reached the point of diminishing returns we have reached the point where we do have a healthy environment we do have a worldclass industry and we can't accept that we want to just keep pushing ourselves when others need to catch up with us because as i mentioned before you know we are going to dollars our industry spends in direct compliance costs but we also experience a number of indirect costs as a result of those regulatory requirements one of those indirect costs frankly is in jobs  industry now employs about seven hundred and eighty thousand americans that is down from a high of almost a million in the mids when natural gas prices spiked over a year period we lost one hundred and forty thousand against industries that we compete with the point ish and congressman kucinich made a long list of achievements that all of us across the table have achieved in terms of and when people were asked would they start their businesses again there was one personh the reason why i remember this is because he was the one person who said you know what although i'm concerned about regulations i would start my business again because i'm so h to have the opportunities that i have to conduct a business in the united states of america i will never forget that as long as i live you know as i hear the complaints and concerns i am just i guess maybe i come from a different world you know in baltimore if you look at the obituary page you know most people as in most places most people die from one or two things the first thing i read in the morning is the obituary  had a lot of plants and they were pumping out all kinds of stuff years ago and there came a point in time when they pretty much said that after years and years of people living in that environment said you know nobody health and welfare of our people and so often i think we get confused thinking that on this side of the aisle all we want is regulate regulate regulate no that is not what we are saying we are saying that we want to get rid of regulations that make no sense and i think all of you have made cases for some of those regulations that need to go but at the same time we want to make sure that there is balance when we get away from balance then we have a problem in this nation when we get away from balance in our family decisions we have problems and that is the key and one of youh well several of you talked about uncertainty and certainly in some came under democrat folks changed because that is part of the price that we pay in living in a democracy uncertainty changes of policy and what have you and so think it wash who said that hyears to catch up with us i think it was mister kamnikar yeah that is true but we are better than that this is america this is the united states of america we are better than that and i have seen over and over again i think we canh when we don't have the balance that i am talking about we can get caught up in a culture of mediocrity and while we think we are ahead of the game if we get caught up in that culture of mediocrity long enough we will be behind the game we want our people to have good health we want people to be able to have safe jobs i want your son who may want to do like i did and have a tough job at bethlehem steel  to be able to go there and when he blows his nose he doesn't blow out soot i want that i want that desperately at the same time i want you all to make the money so that he can have a job and so that is where the balance comes from there is nobodyh we want jobcreating opportunities we want you all to be successful but at the same time we want to safeguard our citizens unfortunately there are a lot of people who don't even know the environments that they walking into and so we have to speak for them if we don't speak for them nobody else will somebody has to say wait a minute let's make sure that these regulations are fair and so i think the president is right i think he hit the right balance i think there are members on both sides of the aisle who have said the president has hit the right balance now what we have to do is we have to go through these regulations we have to look at them carefully make sure that industry is able to thrive and survive but let's keep one thing in mind we are so fortunate to have companies operating in this country it is an honor as the gentleman said i didn't say it he said it it is an honor to have the opportunity that we have here and so i don't want us to take that for granted  when you were talking about the demands to the forging industry in a sense isn't the greatest demand by far the greatest challenge simply the energy i mean when you get past capital costs doesn't i really boil down to no matter how effectively you use energy if your competitors in other countries can get their energy source significantly less expensively you will be outgunned in the international market isn't that i know there is a whole industry of green jobs and green energy and so on but isn't it true today that if you use green energy let's just say all of it by definition on an unsubsidized basis you are paying dramatically more for this energy there is no quote alternative energy industry that can provide on an unsubsidized basis competition with the base fuels of coal oil and natural gas isn't that true  would be unqualified to talk about renewables like solar and wind but what we do is we clean up mostly the fossil fuels so basically we keep coal operating keep oil natural gas as it comes into the mix mister issa right and even after you clean up coal it still in the neighborhood of seven cents a kilowatt dramatically less than any of the if you will new renewable fuels mister foerter yeah we have actually seen while these air pollution control requirements have gone in place for coal i was in hanoi some time back and i got to observe how they make bricks now they are totally supportive of kyoto and all the other protocols they take pure just plain coal and they burn it highsulfur coal and the  tops of every leaf are black literally you can see your way back one thousand years into how you would make bricks when we look at the amount of btus you use and thus the amount of carbon you put in probably approximately correct i have been to malaysia and seen some of the slope kills that you probably are referencing where they burn waste wood you know traditionally in the s the united states brick industry was around four thousand btus a pound now we technology substantially over the years and periodic kilns although there are a few of them still in existence most of them are automated computercontrolled tunnel kilns that are highly efficient mister issa so in a sense  every time an american operation shuts down and most overseas locations particularly in the developing world take their place you are going to have a larger carbon footprint rather than a smaller carbon footprint isn't that what the industry has f mention europe because we will be going to france to visit the nuclear reprocessing facility that allows france to have all its entire base load coming from nuclear with zero emissions because they are willing to use a source of fuel that costs less than six cents a kilowatt hour after all the costs of disposal so hopefully that will be a lesson learned is that we should copy the europeans in at least one itemh well two if you count dark chocolate ms harman the  general health of the forest industry in north america is considered to be good but if you take canada out how good is it how good is the ability to get the source material and to work with the p in the united states versus canada versus most of your competitor countries ms harman well the u s forestproducts industry is highly competitive and we are competitive because we have made very difficult decisions because we have rightsized our business that means downsizing unfortunately epa rules and regulations have been a contributing factor in that some of the high energy costs that affected the chemical industry have also affected us an interesting comment that you raised earlier about renewable energy i would offer to you that the forestproducts industry is one place where on an unsubsidized basis we can produce renewable energy as a byproduct of our manufacturing process and we can do it very costeffectively and in fact it is a large portion of our energy which is why the biomass rules in the boiler mact regulation so negatively affect our industry mister issa well thank you and i commend you for that work and i think we are all wellaware that you have been an industry in which nothing goes to waste am going to thank the gentleman from california for yielding back and madam chairman thank you as we continue to do things the proper way first of all i want to thank all of you from being here i come from the private industry also and there is an old adage that is out there and it goes something like this don't worry about the mule just load the wagon and i think we are at a point where the mule is about ready to walk away from the harness himself and it is really great that we are concerned about clean air and we are concerned about clean water and we are concerned about the health of our workersh and i would suggest this that is not just one party's concern all of us are concerned about that it is the cumulative effect of all these regulations that keep building and building and building to where it is going to break now i am somewhat of an athlete not a great one but one sport that always interested me was golf and what interested me about golf is a guy like me who is a lousy golfer can beat a guy who is really good it is called a handicap now we have continued to handicap youh and now i am part of this governmenth to handicap you and handicap you and handicap you so i think you are about ready to walk away from the harness but in particularh first of all mister kamnikar thanks for being here in the district you know we have so many people in the business and i want to congratulate you on becoming the president of the organization but the effect of these cumulative regulations if you could just walk us through because a lot of us have never signed the front half of a check and have absolutely no idea of the unintended consequences of all these costs if you could just kind of walk us through for an example something like itar and how difficult it makes it for somebody who makes roll bearings to go through that type of regulation and the cost involved because at the end of the day it is the cost that concerns me and our ability to compete in the global market we have handicapped ourselves to the point where we are forfeiting the ability to compete if you could sir ms buerkle excuse me if i could just interrupt the house rules are simply say this and i think this is true of everybody on the panel we have done a lot to get to where we are today and the uncertainty the possibility of further regulation is what we are most concerned about and i go back to my point about competing with the chinese and indians it will take them a very long to get where we are today but while they continue to operate they have a very big advantage over us we will take our chances against them but let's not regulate us even more ms buerkle thank you again i apologize for the time constraints this morning i would like to thank all of our guests here for taking time out of your busy schedules to appear before us give us your testimony the meeting