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30–357 PDF 2006

AN UPDATE ON ADMINISTRATION ACTION TO

REDUCE UNNECESSARY REGULATORY BURDENS

ON AMERICA’S SMALL MANUFACTURERS

HEARING

BEFORE THE

SUBCOMMITTEE ON REGULATORY REFORM AND 

OVERSIGHT

OF THE

COMMITTEE ON SMALL BUSINESS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

WASHINGTON, DC, JULY 13, 2006

Serial No. 109–60

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

COMMITTEE ON SMALL BUSINESS 

DONALD A. MANZULLO, Illinois, Chairman 

ROSCOE BARTLETT, Maryland, Vice 

Chairman 

SUE KELLY, New York 

STEVE CHABOT, Ohio 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

JEB BRADLEY, New Hampshire 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

RIC KELLER, Florida 

TED POE, Texas 

MICHAEL SODREL, Indiana 

JEFF FORTENBERRY, Nebraska 

MICHAEL FITZPATRICK, Pennsylvania 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

NYDIA VELA ́ ZQUEZ, New York 

JUANITA MILLENDER-MCDONALD, 

California 

TOM UDALL, New Mexico 

DANIEL LIPINSKI, Illinois 

ENI FALEOMAVAEGA, American Samoa 

DONNA CHRISTENSEN, Virgin Islands 

DANNY DAVIS, Illinois 

ED CASE, Hawaii 

MADELEINE BORDALLO, Guam 

RAU ́ L GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

LINDA SA ́ NCHEZ, California 

JOHN BARROW, Georgia 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

J. MATTHEW SZYMANSKI, Chief of Staff 

PHIL ESKELAND, Deputy Chief of Staff/Policy Director 

MICHAEL DAY, Minority Staff Director

SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT 

W. TODD AKIN, Missouri Chairman 

MICHAEL SODREL, Indiana 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

SUE KELLY, New York 

STEVE KING, Iowa 

TED POE, Texas 

MADELEINE BORDALLO, Guam 

ENI F. H. FALEOMAVAEGA, American 

Samoa 

DONNA CHRISTENSEN, Virgin Islands 

ED CASE, Hawaii 

LINDA SA ́ NCHEZ, California 

GWEN MOORE, Wisconsin

CHRISTOPHER SZYMANSKI, Professional Staff

(II) 

C O N T E N T S 

WITNESSES

Page 

Aitken, Mr. Steve, Acting Administrator, Office of Information and Regulatory 

Affairs, Office of Management and Budget ........................................................ 3

Otis, Mr. Richard D., Jr., Deputy Associate Administrator, Policy, Economics, 

and Innovation, Environmental Protection Agency .......................................... 5

Fineran, Mr. Lawrence A., Vice President, Legal and Regulatory Reform 

Policy, National Association of Manufacturers .................................................. 7

Vargas Stidvent, The Honorable Veronica, Assistant Secretary for Policy, 

Department of Labor ........................................................................................... 9

Kovacs, Mr. William, Vice President, Environment, Technology, and Regulatory Affairs, U.S. Chamber of Commerce ........................................................ 11

APPENDIX

Opening statements: 

Akin, Hon. W. Todd .......................................................................................... 29

Prepared statements: 

Aitken, Mr. Steve, Acting Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget ..................................... 31

Otis, Mr. Richard D., Jr., Deputy Associate Administrator, Policy, Economics, and Innovation, Environmental Protection Agency ..................... 35

Fineran, Mr. Lawrence A., Vice President, Legal and Regulatory Reform 

Policy, National Association of Manufacturers ........................................... 49

Vargas Stidvent, The Honorable Veronica, Assistant Secretary for Policy, 

Department of Labor .................................................................................... 99

Kovacs, Mr. William, Vice President, Environment, Technology, and Regulatory Affairs, U.S. Chamber of Commerce .............................................. 109

Additional material: 

Roewer, Mr. James R., Utility Solid Waste Activities Group (USWAG) ............. 120

(III) 

(1)

AN UPDATE ON ADMINISTRATION ACTION TO 

REDUCE UNNECESSARY REGULATORY BURDENS ON AMERICA’S SMALL MANUFACTURERS 

THURSDAY, JULY 13, 2006

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON REGULATORY REFORM OVERSIGHT

COMMITTEE ON SMALL BUSINESS

Washington, DC 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2360 Rayburn House Office Building, Hon. W. Todd Akin [Chairman of the Subcommittee] presiding. 

Present: Representatives Akin, Bordallo, Christensen, Gohmert, 

Kelly, Sodrel. 

Chairman AKIN. The hearing will come to order. The best way 

to keep us on time is to start on time, and so we are at least fairly 

close to that. 

Good morning, and welcome to today’s hearing entitled, ‘‘An Update on Administration Action to Reduce Unnecessary Regulatory 

Burdens on America’s small manufacturers.’’ 

I want to especially thank the witnesses who have taken time 

out of their busy day to participate in this important hearing. 

The well-being of U.S. manufacturers is a vital concern to this 

Subcommittee and to Congress as a whole. America’s manufacturing base constitutes, roughly, 12 percent of the gross domestic 

product to the United States economy, which has slowly decreased 

in recent years. About 95 percent of all U.S. manufacturers are 

small or medium-size enterprises. Small U.S. manufacturers in 

particular have faced fierce global competition in recent years. 

Much of this competition comes from countries that have minimal 

to no regulatory compliance cost. 

The Administration has recognized that by reducing unnecessary 

regulatory burden. It also bolsters the strategic competitive position of small U.S. manufacturers in the global marketplace. This 

has been exemplified through the solicitation of public nominations 

for regulatory reform by the Office of Management and Budget, 

OMB, in 2004. These nominations emphasized easing the regulatory burden on small and medium enterprises in the manufacturing sector. 

The independent Office of Advocacy at the Small Business Administration and the manufacturing industrial industry answered 

2

by delivering 189 nominations to the Federal Government for the 

reduction of unnecessary regulation through rule making. 

Ultimately, of the 189, 76 nominations were selected to reform 

unnecessary regulatory burden in collaboration with the appropriate Federal agencies. 

On April 28, 2005, this Subcommittee held a hearing entitled, 

‘‘The Administration’s Program to Reduce Unnecessary Regulatory 

Burden on Manufacturers: A Promise to be Kept?’’ At that hearing, 

we heard testimony regarding the Administration’s time line and 

commitment to reform the 76 burdensome regulations. 

Nearly 15 months have passed since we last addressed this important issue, and this Subcommittee seeks an update regarding 

the progress the Administration has made on these important reforms. We also hope to learn how the Administration’s regulatory 

review process has benefitted by engaging in this collaborative effort. 

I look forward to learning more about how these regulatory reform initiatives are progressing and what more we can do to aid 

our Nation’s manufacturers. 

I now yield to the Gentlelady from Guam, a lady who also hosted 

a wonderful party last night, Madame Bordallo. 

[Chairman Akin’s opening statement may be found in the appendix.] 

Ms. BORDALLO. Thank you, Mr. Chairman, but sad to say we 

missed you, so we’ll have another one next year. He’s talking about 

the 62nd anniversary of our liberation, and we had one here last 

evening. 

Mr. Chairman, thank you for calling this meeting, and I’d like 

to extend a warm welcome to our witnesses who are here this 

morning. This is, indeed, an important topic, and one that could 

have positive impact upon many of America’s small businesses. 

I think the committee was pleased that the Office of Information 

and Regulatory Affairs, the OIRA, solicited recommendations to update and modify outdated or overly burdensome regulations. The 

committee’s suggestion that such a review be made was seconded 

by industry groups. 

I am concerned, however, about the apparent slow progress made 

to date on this matter, and I am particularly concerned that the 

Administration has, perhaps, not committed all of the resources 

and political will necessary to complete the work. 

Small businesses expressed this concern to the committee last 

year. They said they were concerned that OIRA and others lacked 

sufficient funding to thoroughly review new regulations. This 

would lead me to believe that the office also does not have the resources to review burdensome longstanding ones. More needs to be 

done to help small businesses with the Federal regulatory and paperwork burden. This is a message that is often delivered to this 

committee, every small business witness, and every major association that has testified, has put regulatory burden at or near the top 

of their priority list during the half a dozen hearings that we have 

held on this particular issue. 

I am concerned that the regulatory burden shouldered by America’s approximately 23 million hard working small businesses has 

increased each year, and this fact would seem to run counter to the 

3

assurances that this committee was provided that some of these 

burdens would be eased. 

There is no doubt that Federal red tape impacts national competitiveness. Federal agencies must be held accountable for this, including being required to undergo a regular review of the regulations. This should be done to ensure that the regulations are appropriate and reflect the pressures of modern business. 

I represent Guam. We are neighbors to some of the world’s most 

dynamic and competitive economies, China, Singapore, South 

Korea, Australia, Japan and India, just to name a few. Small businesses on Guam need to be efficient in order to succeed in the Asia 

Pacific Region. 

Reducing the regulatory burdens on business, including reducing 

paperwork requirements, in an important element for improving 

America business efficiency and competitiveness in the world economy. 

It is this committee’s responsibility to ensure that this task is 

completed, but we cannot afford to sacrifice our high standards. 

The committee has been careful in the past to ensure that important safeguards are dismantled. Together we must find intelligent 

ways to protect health and safety, while promoting fair competition. 

Again, Mr. Chairman, thank you very much for calling this hearing this morning, and I look forward to the witnesses’ testimony. 

Chairman AKIN. Thank you very much for those great comments. 

What we are going to do is, we are going to watch the clock a 

little bit closely here. Those of you who are first timers, there’s a 

little set of lights there in front of you, and when it turns red that’s 

when your five minutes are up. And, what we’ll try and do is to 

run across all of the witnesses first, let each of you make a fiveminute statement, and then we’ll come over to some questions. 

And, my recommendation is that if you have some notes, which 

I would hope that you may, if you’d like to submit them for the 

record you can do that, and then just tell us the things that you 

think are most important that we need to know and that facilitates 

things moving along pretty rapidly, and then we’ll come back with 

some questions. So, I’m just going to run right across. 

Chairman AKIN. Our first witness is Steve Aitken. You are the 

Acting Director of the Office of Information and Regulatory Affairs, 

Office of Management and Budget. You haven’t come too far, from 

Washington, D.C., and, Steve, I understand that at least on a temporary basis this project—or these series of projects are pretty 

much your area of responsibility. 

If you would proceed, you have five minutes. Thank you, Steve. 

STATEMENT OF STEVE AITKEN, THE OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT 

AND BUDGET 

Mr. AITKEN. I will speak briefly from my oral statement. 

Chairman Akin, Representative Member Bordallo, and distinguished Members of the Subcommittee— 

Chairman AKIN. Steve, could you just do me a favor, pull that 

mic a little closer to you. You’ve got to kind of get into these things 

to get good volume for people in back. Thank you. 

4

Mr. AITKEN. Chairman Aitken, Ranking Member Bordallo, and 

distinguished Members of this Subcommittee, I am Steven D. 

Aitken, Acting Administrator of the Office of Information and Regulatory Affairs, OIRA, an office within the Office of Management 

and Budget. 

Thank you for inviting me to this hearing, and for giving me the 

opportunity to testify today on the status of the 76 manufacturing 

reform nominations that OIRA and the agency selected in March 

of last year. 

This is my first opportunity to testify before the Subcommittee. 

By way of background, I have worked at OMB for 17 years. Up 

until the beginning of last month I have been in the OMB Counsel’s Office, most recently serving as Deputy General Counsel. In 

early June, I began my service as OIRA’s Acting Administrator. 

Two of OIRA’s key roles are to work with the agencies in their 

development of new regulations and to stimulate the modernization 

of existing rules. One tool that OIRA uses to improve existing rules 

is our call for public reform nominations pursuant to what is commonly referred to as the Regulatory Right To Know Act. 

Under this Act, OIRA has initiated three public nomination processes to undertake reform of existing regulations. The first two 

nomination processes were in 2001 and 2002. OIRA’s most recent 

request for public nominations was in February of 2002, in connection with the government-wide effort to reform regulation of the 

U.S. manufacturing sector, which continues to be one of the most 

heavily regulated sectors of our economy. 

OIRA asked the public to suggest specific reforms to regulations, 

guidance documents, or paperwork requirements, that the commenters believed would improve manufacturing regulation. OIRA 

also mentioned it was particularly interested in reforms that addressed burdens on small and medium-sized manufacturers, where 

burdens tend to be relatively large. Finally, OIRA suggested that 

commenters consider the extent to which a benefit cost case can be 

made for the reform. 

In response to the request for public input, OIRA received 189 

reform nominations. OIRA evaluated the nominations along with 

the relevant Federal agencies, including SBA’s Office of Advocacy 

and the Commerce Department’s Office of the Assistant Secretary 

for Manufacturing and Services. 

As a result of this process, in March of last year OIRA issued a 

report on regulatory reform of the United States manufacturing 

sector. In that report, Federal agencies and OMB determined that 

76 of the 189 nominations had potential merit, and justified further 

action. 

The March, 2005 report also identified milestones and deadlines. 

Milestones ranged from an agency performing a priority review and 

reporting to OMB, in order to determine appropriate next steps to 

an agency issuing modernized regulations. 

Late last year, OIRA reported on the status of each of the reform 

nominations as of the end of Fiscal Year 2005. This update was 

provided in OIRA’s 2005 report to Congress on the cost and benefits of Federal regulations. 

During Fiscal Year 2006, agencies have continued to make 

progress on the reform nominations. According to the most recent 

5

information that OIRA has received, which is preliminary, the 

agencies have now completed 36 of the 76 reform items. OIRA will 

continue to work with the agencies to verify and update the status 

of the 76 reforms in preparation for our 2006 report to Congress, 

in which we will provide the status of the reform nominations as 

of September 30th of this year. 

Several of the reforms which have already been completed successfully improved existing regulations, in that the reforms increased the net benefits of regulation while maintaining important 

environmental, health and safety protections. 

I would like to briefly mention three examples. Last October, 

EPA issued a final rule that streamlines the monitoring and oversight requirements for industrial facilities that discharge into 

wastewater treatment plants. This rule is expected to reduce burden on discharges and treatment plant operators by about 240,000 

hours. 

Last December, EPA issued a final rule that permanently exempts certain categories of ‘‘non-major’’ industrial sources that are 

subject to national emissions standards, perhaps, such as air pollutants, the NESHAPs, and the requirement to obtain an operating 

permit under Title 5 of the Clean Air Act. EPA estimates that this 

rule will provide regulatory relief for over 38,000 sources, many of 

which are small entities. 

And, this past April EPA issued a final rule that streamlines the 

requirements under the Resource Conservation and Recovery Act 

for certain RCRA facilities. Overall, this rule is expected to reduce 

compliance costs by $2 to $3 million annually. 

OIRA remains dedicated to the continued implementation and 

appropriate completion of these reform initiatives. To that end, 

OIRA will continue to oversee the reform process to make sure that 

agencies make further sustained process on the remaining reforms 

that have not already been completed. 

Under the timetable that was set forth in OIRA’s report from 

March of last year, in which the 76 reforms were announced, the 

agencies are to complete their actions on all 76 reforms by the end 

of 2008. 

Thank you very much for the opportunity to participate today in 

this important hearing. I would be happy to answer any questions 

that you may have. 

[Mr. Aitken’s testimony may be found in the appendix.] 

Chairman AKIN. Thank you very much, Steve. 

You brought it in on time and under budget, so you are certainly 

starting things off well. 

Chairman AKIN. Our next witness is Richard Otis, Deputy Associate Administrator, Policy Economics and Innovation, the EPA, 

Washington, D.C. 

Richard. 

STATEMENT OR RICHARD OTIS, POLICY ECONOMICS AND 

INNOVATION, ENVIRONMENTAL PROTECTION AGENCY 

Mr. OTIS. Mr. Chairman, Members of the Subcommittee, thank 

you very much for the opportunity to appear this morning, and I 

will try to maintain that track record of staying under five minutes. 

6

My primary purpose this morning is to discuss the EPA’s regulatory initiatives included in OMB’s 2005 report, ‘‘Regulatory Reform in the United States,’’ and I believe the Subcommittee, or I 

should hope the Subcommittee, will be pleased to hear that we 

have made significant progress in meeting our commitments. 

In nominating our Administrator, Steve Johnson, President Bush 

challenged him to accelerate the pace of our Nation’s environmental progress, while maintaining our economic competitiveness. 

This is a clear recognition by the President of two very important 

points. 

First, it recognizes that as individuals and as a Nation we share 

a strong belief in our responsibility to ensure our children will inherit a healthier, safer world. It is a core American value I believe 

we all share, and so does the President. 

Second, it recognizes that as a Nation, and as you indicated earlier, we face significant global economic challenges and opportunities. At EPA, we are acutely aware of both points, and join the 

President in seeking to ensure our children inherit a safer, 

healthier and more economically vibrant future, and to achieve 

that goal we understand we must continuously look for opportunities to improve our regulations, and through such efforts as a manufacturing initiative. 

And, in that regard, we have completed more than half of the 

commitments that are identified in the March, 2005 report, and are 

getting close to completing our work. There are several remaining 

nominations where we have a clear sense of the direction and the 

timing for resolving them, and there are others where the agency 

has made progress but is still trying to figure out the proper resolution. It is no surprise that some of those are among the more difficult and complex nominations. 

We have put in place a strong internal management and tracking 

system and report our progress routinely to the Administrator, 

Deputy Administrator, and OMB. I was going to give you an example, but Mr. Aitken gave it to you, so I will skip beyond that one. 

Before I sort of complete my remarks, I want to raise one other 

subject with you that I think is directly related to the topic of your 

hearing, and one that we would like to discuss further with members of the Committee and staff in the coming months, and it goes 

more to the heart of how EPA examines the value and effectiveness 

of our one-size-fits-all regulatory system, and looks towards more 

innovative collaborative and results-driven approach to achieving 

environmental progress and economic competitiveness. 

There is a substantial amount of innovative thinking and action 

occurring within our agency, state government, interest groups, 

think tanks, academia, other Federal agencies and industry. It is 

built upon the lessons that we have all learned over the past 35 

years of EPA’s history, and that innovation is critical to achieving 

the President’s challenge. 

Let me give you one very quick example. EPA has a new environmental performance track program. It is built upon similar state 

programs, and is helping us change how we regulate. It encourages 

and rewards facilities that go beyond compliance and attain levels 

of environmental performance that benefit the company, the workforce communities, and the environment. This is a clear recognition 

7

that many companies have figured out how to achieve environmental excellence and success in the marketplace by more fully integrating environmental issues into their core business strategies. 

Facilities that earn membership in this program get public recognition and flexibility in meeting certain administrative and regulatory requirements where we have the legal flexibility to so do. 

With this program, EPA is acknowledging that we should not 

treat all regulated facilities as though they operate equally, but 

rather it makes sense for government to encourage facilities that 

have demonstrated a strong commitment to environmental excellence, thereby allowing us to focus our time and resources on those 

that have done less so. 

And, at a future date, perhaps, we can discuss more of these innovations and some of the interesting challenges and statutory 

challenges we face in heading down that path. 

On behalf of EPA, I want you to know that we are committed to 

helping small business and manufacturing, as well as protecting 

the environment, through smarter regulations and innovative ways 

of conducting our core mission. 

Thank you very much. 

[Mr. Otis’s testimony may be found in the appendix.] 

Chairman AKIN. Thank you very much, and also for your 

thought-provoking, little bit of a tantalizer that you threw out 

there, that we can approach things from a little different angle. It’s 

very interesting. 

Chairman AKIN. Our next witness is Lawrence Fineran, Vice 

President, Legal and Regulatory Reform Policy, National Association of Manufacturers, Washington, D.C. 

Lawrence, welcome. 

STATEMENT OF LAWRENCE A. FINERAN, LEGAL AND REGULATORY REFORM POLICY, NATIONAL ASSOCIATION OF MANUFACTURERS 

Mr. FINERAN. Call me Larry. 

Chairman Akin, Ms. Bordallo, thank you for the opportunity to 

testify on behalf of the National Association of Manufacturers, 

about the Administration’s call in 2004 for regulations, especially 

those that affect manufacturing, that could be improved. If nothing 

else, it will help to let the agencies know that there is continued 

congressional interest in seeing results from this project. 

My name is Larry Fineran, and I serve as Vice President, Legal 

and Regulatory Reform Policy, for the NAM, which is the Nation’s 

largest industrial trade association representing manufacturers in 

every industrial sector and in all 50 states. 

Three quarters of the NAM’s membership are small and medium 

manufacturers. The special attention that manufacturing regulations was warranted, since at the time manufacturing was experiencing a recession. For the first time since World War II, our sector 

led the down turn and lagged in recovery. The NAM participated 

in a similar exercise in 2002. 

Unfortunately, none of the regulations that the NAM nominated 

for improvement in 2002 had been changed by 2004. We were assured, however, that this time it would be different because it was 

part of the Administration’s manufacturing initiative. Because of 

8

our lack of success in seeing changes from our 2002 submission, the 

NAM decided to place special emphasis on a handful of regulations 

where improvement would truly make a difference. 

We also did a much better job of vetting the technical suggestions, and making sure that OIRA had enough information as to 

the problem and possible solution. 

When the list of 76 regulations was released on March 9, 2005, 

the NAM was very pleased that five of its seven highlighted regulations were on the list. We are also pleased that a number of the 

more specific regulations—or suggestions for improvement were on 

there, and that most of the regulations included a timetable or action plan. We thought that this indicated that the progress of the 

agencies would be tracked by OIRA, thus we express our disappointment when the 2005 draft report on the benefits and costs 

of Federal regulatory programs did not have a status report on this 

project. 

And, at this point I’d like to clarify that the NAM’s written statements, as of the 2005 final report, did not include a status report. 

The word full should have preceded status report, as there is an 

update in that final report. My apologies to OIRA, although it does 

not discuss regulations for which there was no progress. So, with 

your permission, Mr. Chairman, I will work with the staff to make 

sure the permanent record is clarified. 

I am glad to hear that there will be an update in the 2006 final 

report. 

I can only testify about what agencies have contacted the NAM 

for follow up. I should also mention that if Members of the Subcommittee ask specific questions about specific regulations rather 

than process I may have to respond in writing if it’s not my specialty area. 

I’m pleased to report that EPA has contacted us about a number 

of their regulations that we submitted, and has made some improvements as a result. I understand that they made changes to 

other regulations, even if they had not contacted us. 

In addition, we have heard from the Departments of State and 

Commerce. 

The Department of Labor is a different story. We made substantial suggestions for overhauling the rules implementing the Family 

Medical Leave Act, which the Supreme Court has ruled were not 

noticed properly. In addition, courts are very much in conflict about 

what the rules do say. 

The timetable for completed action was supposed to be 2005. We 

are well into 2006, and still have not seen an updated proposed 

rule. 

OSHA has been the poster child, perhaps, for agency intransigence. In 2002, we nominated two CFR references that require 

adherence to 1969 fire standards, and we renominated that rule in 

2004 because OSHA had done nothing. OSHA has been petitioned 

repeatedly by affected entities to allow the use of modern fire 

standards, but the agency has refused to do a rule making and 

there’s no indication that OSHA will finally act as a result of this 

project. 

For instance, this minor improvement became much larger when 

the list of 76 came out, and has no timetable for completion. In the 

9

meantime, we understand that marine manufacturers have been 

cited because their facilities have modern rather than 1969 fire 

standards. 

Congress also shares at least some of the blame responsibility for 

regulatory problems, as many statutes are nebulous, vague and/or 

confusing, and sometimes all three. 

With the leadership changes at OIRA and OMB, the NAM was 

concerned that agencies such as OSHA would be allowed to win the 

game of waiting it out. We were about to do our own follow up and 

publicize what, if anything, the agencies have done or not done. 

This is why we appreciate you holding this hearing. Your interest, 

and the interest shown by Representative Candice Miller’s Regulatory Affairs Subcommittee will help to let OIRA and OMB, as 

well as the agencies, know that Congress supports improvements 

to rules affecting manufacturing. 

[Mr. Fineran’s testimony may be found in the appendix.] 

Chairman AKIN. You had three seconds left, that’s a pretty good 

job. 

Mr. FINERAN. I did skip two sentences at the end. 

Chairman AKIN. Larry, thank you for your testimony, and also 

it raises some interesting questions. We’ll get to those in just a little while. 

Chairman AKIN. We now have the Honorable Veronica Vargas 

Stidvent? 

Ms. STIDVENT. That’s right. 

Chairman AKIN. Pretty close? Okay. Assistant Secretary for Policy, Department of Labor, Washington, D.C. 

Veronica. 

STATEMENT OF THE HONORABLE VERONICA VARGAS 

STIDVENT, DEPARTMENT OF LABOR 

Ms. STIDVENT. Thank you. 

Chairman Akin and distinguished Members of the Subcommittee, 

I thank you for the opportunity to appear before you today to discuss the Department of Labor’s progress in responding to the 11 reform nominations in OMB’s report. 

I’ll briefly discuss the Department’s progress on each of those 

nominations, and I’ve submitted written testimony that goes in further detail. 

Hexavalent chromium, commenters urged OSHA to minimize the 

impact of its final standard on small business. The standard published on February 28, 2006, incorporated many recommendations 

from the SBREFA panel and other stakeholders, including an extended four-year compliance period for engineering controls and a 

higher pel than the one proposed in the proposed rule. 

Coke Oven emission standards, commenters recommended the 

standard be revised to account for new technology and that medical 

monitoring be reduced. One commenter specifically recommended 

that OSHA finalize the changes to the Coke Oven emission standard proposed in Phase 2 of OSHA Standards Improvement Project. 

In January, 2005, OSHA published the Phase 2 final rule, which 

streamlined several provisions of the Coke Oven emissions standard, including reducing the frequency of medical monitoring for certain employees. OSHA has not taken any further action on the 

10

standard, however, if commenters still have issues of concern they 

can raise them as suggestions in response to the advanced notice 

of proposed rule making on Phase 3 of the Standards Improvement 

Project for moving on to the next phase. 

Permanent labor certification, one commenter was critical of the 

process for certifying the unavailability of U.S. workers for positions for which foreign nationals are sponsored. The Department’s 

Employment and Training Administration published the final permanent labor certification rule on December 27, 2004, with an effective date of March 28, 2005, and has implemented the re-engineered permanent labor certification program. 

Hazard communication material safety data sheets, these are 

MSDSs, several commenters indicated the MSDSs should be prepared using a consistent format, and that the quality of information needed to be improved. OSHA is preparing proposed guidance 

for the preparation of MSDSs that will be completed in 2007. 

In addition, OSHA has submitted for OMB review an advanced 

notice of proposed rule making addressing the possible modification 

of the hazard communication standard to be consistent with the 

globally harmonized standard classification and labeling of chemicals. This global approach to hazard communication include the 

standardized format for MSDSs, as well as standardized label requirements. 

Annual training requirements for separate standards. One commenter observed that OSHA had separate annual training requirements for a number of standards. The commenter recommended 

that the agency develop a single integrated training program. 

The Department met its obligation to provide OMB with a report 

on training requirements by May, 2005. The report noted that 

OSHA actually does not require separate training programs for 

each standard that requires training. Rather, employers are permitted to organize and present training in whatever manner is 

most effective for the workplace involved. 

Hazard communication training. One commenter stated that 

draft guidance OSHA made available for comment in 2004 was too 

complicated for small business. OSHA anticipates finalizing that 

draft in 2007, and the agency is considering issuing two products. 

One would be a final version for the model training program and 

the other would be a simplified approach for small business. 

The sling standard, too commenters recommended that OSHA 

update the sling standard to reflect the American Society of Mechanical Engineers consensus standard. OSHA plans to update the 

sling standard as part of its regulatory project update, all standards based on national consensus standards. The sling standard 

will be part of a later phase of the project. OSHA has developed 

a guidance document on the selection and use of slings, which it 

plans to issue this year. This document would make it clear that 

slings meeting the newer ANSI/ASME standard are acceptable. 

Guard rails around stacks of steel, one commenter objected to 

OSHA’s requirement to provide either guard rails or tie off projections to workers who must perform their duties 48 inches or more 

above the ground. The Department, once again, met its obligation 

to provide OMB with a report on this requirement by May, 2005. 

This noted that OSHA is currently conducting a rule making on its 

11

walking and working surfaces standard, and will consider the 

guard rail requirement as part of that rule making. It also stated 

that OSHA reached out and contacted the commenter to discuss 

OSHA’s plan, and that the commenter supported addressing this 

issue in the walking and working surfaces standard. 

Which brings me to walking and working surfaces. One commenter stated that the OSHA regulations, under some circumstances, require use of fixed ladders when spiral stairways or 

ship stairs would be safer. Again, the Department met its obligation to provide OMB a report by May, 2005, which stated that this 

issue also would be considered as part of OSHA’s rule making on 

the walking and working surfaces standard. It stated that the 

agency had contacted the commenter, once again, and that the 

commenter supported including a flexible policy for ship stairs in 

the final rule. 

OSHA flammable liquids, which Mr. Fineran referred to, two 

commenters recommended that OSHA update the current rule, 

which cites the ‘69 fire protection standard. OSHA intends to include the flammable liquid standard in its ongoing project to update standards on national consensus standards. 

And finally, the Family Medical Leave Act, many commenters 

recommended changes to these regulations, and Federal courts, including the United States Supreme Court, have invalidated some 

provisions of these regulations. The Employment Standards Administration continues to review the issues and the possibility of revisions to the regulations. This remains on the Department’s regulatory agenda. No final decisions have yet been reached as to what, 

if any, changes should be proposed. 

Mr. Chairman, this concludes my update on the status of the regulations. I would be glad to respond to any questions you may 

have. 

[The Honorable Veronica Vargas Stidvent’s testimony may be 

found in the appendix.] 

Chairman AKIN. Thank you, Veronica. I think we’ll be getting 

back to you with some questions. 

Our last witness is, is it William Kovacs? 

Mr. KOVACS. Kovacs. 

Chairman AKIN. Kovacs, okay. Do you go by Bill or William? 

Mr. KOVACS. I go by Bill. 

Chairman AKIN. Bill, okay, Bill Kovacs, Vice President, Environmental Technology and Regulatory Affairs, U.S. Chamber of Commerce, Washington, D.C. 

Bill, proceed, thank you. 

STATEMENT OF WILLIAM KOVACS, ENVIRONMENTAL TECHNOLOGY AND REGULATORY AFFAIRS, U.S. CHAMBER OF 

COMMERCE 

Mr. KOVACS. Thank you, Mr. Chairman and Members of the 

Committee. It is a pleasure to be here today, because 97 percent 

of the members of the Chamber are small businesses. And, I’m 

going to talk About an overview of the regulatory efforts, because 

they have really been significant, and there really is more than just 

the nomination process. 

12

For example, Section 610 of the Regulatory Flexibility Act requires agencies every year to set up a plan as to how they are 

going to go back and review these regulations that are really out 

of date in many instances. 

And so, when we look at the regulatory process, Congress has 

been very good. They’ve got a clear and comprehensive effort. I 

mean, we’ve got the Small Business Regulatory Fairness Act, the 

Congressional Review Act, the Paperwork Reduction Act, Truth in 

Regulating Mandates Information, Government Performance and 

Results Act for the business plans data access, data quality, and 

several executive orders. So, it’s not like there isn’t an effort. 

And, the reason why there’s so much effort on this is that every 

year agencies pass 4,000 regulations. There are 110,000 regulations 

overall, 73,000 pages, and the small businesses of the United 

States have to deal with it. So, it is significant, and these efforts 

are worth doing. 

And, this covers everything from the quality of information used 

by an agency in a rule making, to conducting a cost benefit analysis, plans for reviewing outdated regulations, peer review studies 

so we get the science right, and finally, public nominations, which 

we applaud but it’s not the only access. 

Now, with this comprehensive structure, there are two problems 

with it. One is, there’s very little transparency in the entire process. The agencies don’t make it easy. For example, on the nomination process, something that is so simple, they’ve asked us what 

regulations were a problem. Well, we tell them, but we never can 

find out what it is. 

The Chamber actually, two years ago, contacted every single entity that submitted a nomination, and 70 percent of them had no 

information on where the nomination was in the process, and yet, 

with the web all they would have to do is put the four, or five, or 

six, or ten nominations that were sent to the agency on the web 

and discuss what the status is. That would help, and the reason 

why it would help is because without knowledge everyone is becoming very discouraged over the process. 

If you look, in 2002, 1,700 commenters participated in the process. In 2004, that dropped to 41, and that’s what the problem is, 

people have just — they don’t care because they don’t think the 

agency is going to respond. 

And, the second point, which is just as important as no transparency, is there’s no accountability. Once the process starts with 

the agency, the agency can do something or they can’t do something, it’s up to them. And, I’ll give you an example under the Data 

Quality Act, we submitted a petition with EPA, and we said something very simple, you have 16 databases, and everyone in the 

world uses these databases to determine the value of chemicals, 

and it goes to clean up risk assessment. And, we said, if you look 

at the 16, we ran a spreadsheet, the same chemical has different 

values on every database, and sometimes the value can be as much 

as a billion in difference. 

And, we then asked our contractors, go back and tell us, if you 

were involved in this Superfund site, and you used the transport 

database versus the chem fate database, what would be the difference in cost in clean-up? And, just depending on the database 

13

that you use, the difference in cost of clean-up was $7.5 million for 

one and $63 million for another. It’s been two years since EPA has 

had the database petition, and they haven’t responded, and all 

we’ve ever asked is that they put together an interagency working 

group with other agencies that really have scientific knowledge like 

this, and let’s get working on it so that we can get the database 

uniform. 

We’ve even had government agencies in Switzerland comment on 

the need to have this consistency, because these databases are used 

throughout the world. 

So finally, I’ve still got a little bit of time, I have a few suggestions, because I really think that Congress has done everything 

that it possibly can. 

Chairman AKIN. You have a minute and a half. 

Mr. KOVACS. Okay. 

It’s done everything that it possibly can in terms of legislation 

to put a structure around this, to force the agencies to think about 

outdated regulations. The first thing is, you might consider doing 

a point of order to the agencies appropriations if they don’t actually 

do regulatory review. They’ve got that obligation right now under 

610 of the Regulatory Flexibility Act, but they don’t do it, and 

they’ve had it for 20 years. They don’t do it. 

I think every year we have somewhere between 20 and 30 regulations looked at by the agencies. That’s out of 110,000. We’ve got 

a long way to go. 

Second, I think you could amend the Government Performance 

and Results Act to include in that a requirement that they put 

their Section 610 reviews as part of their strategic plan. They have 

to do it on a five-year period that’s excellent, they should be planning, but one of the things that they need to do is, how are they 

going to get some of these old regulations off the books? 

A little bit more controversial, but my third recommendation 

would be a private right of action. If they don’t undertake these administrative proceedings, allow the private sector, you know, everyone in the private sector, both the business community, the environmental community, whoever, to bring a lawsuit. 

And finally, if you want to do everything administratively, there 

may be a way in which to allow the administrative law judges to 

handle these kind of regulatory reform requirements, so that 

there’s someone independent of the agency that is handling how 

the agency is working with these very technical procedures. 

Anyway, with that, thank you very much, and I’m here to answer 

any questions. 

[Mr. Kovacs’ testimony may be found in the appendix.] 

Chairman AKIN. Thank you. 

For five witnesses from Washington, D.C., you gentlemen and 

lady were anything but boring. Usually, when we get D.C. witnesses they put our panel to sleep, but you guys did a good job 

keeping us alert this morning. 

Let me start by asking for a report card from the Chamber and 

from NAM, if you were to rate our progress on this overall project, 

I believe we started with 76 projects that were identified, out of 

189 we went to 76, how would you rate the progress overall that 

14

we’re making, and then if you were to give a grade to the various 

agencies. How are we doing, and has it varied over time? 

Larry, I’ll let you go first. 

Mr. FINERAN. One of the problems, Mr. Chairman, with the agency-specific grade, would be that we really can only know what happened to our nominations. I mean, OSHA, or the Department of 

Labor, has testified on some of the other work that they’ve done, 

that may not have come from us. So, we really can only tell you, 

talk about where we are at. So, we can’t give an overall performance. 

Chairman AKIN. Just the ones that you submitted are the only 

ones you have data on. 

Mr. FINERAN. Right, exactly, but again, one part of the problem 

is— 

Chairman AKIN. And, there’s no report overall that says how we 

are doing per se? 

Mr. FINERAN. Yes, as Bill alluded to, there really is no centralized system of transparency. 

Chairman AKIN. Okay. 

So, from what you’ve seen gives you just sort of a statistical sampling then, how would you say we are doing, and has it been consistent over time, or were we doing better a few years ago, has it 

gotten worse, or better, or how do you think we are doing? 

Mr. FINERAN. When we—in our written testimony we go into the 

fact that in 2004, when this came up in 2004, some of our members 

were very skeptical, they didn’t even give us any regulations, because they had participated in 2002, and they saw nothing had 

really come out of that exercise, and so they just didn’t think it was 

worth it to have their companies go through that process again, because it’s not easy to do. You would think that the companies could 

just do it off the top of their head, but they want to get it right. 

The difference between 2002 and 2004 really is that OIRA really 

did want benefit cost analysis, which I understand, but it’s kind of 

hard, very hard for trade associations to do that unless they’ve 

been dealing with the regulation for a number of years, because we 

just don’t have the money to do a benefit cost regulation on the 

number of regulations that we ended up nominating. 

Even on the seven that we highlighted, we couldn’t do, we 

couldn’t afford to do a benefit cost— 

Chairman AKIN. Of the seven you highlighted, how many of 

those are complete and done, signed, sealed, delivered? 

Mr. FINERAN. Complete and done, I am not sure I know that. 

Well, five made the list, one of them was particulate matter, which 

was being reviewed under a different process, so we understand 

why that was not on the list. 

Of the others, I can tell you the FCC do not fax rule is definitely 

finished, because Congress had to pass a statute there, and you 

did. 

On the other regulations, I believe that they are still working on 

them, I’ll defer to Rick on that, like definition of solid waste I believe. 

Another one, TRI regulatory burden, unfortunately, you know, 

EPA did respond to that, and did make changes in response to the 

burdensome paperwork. Unfortunately, though, the House did reVerDate 0ct 09 2002 17:08 Nov 21, 2006 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 G:\HEARINGS\30357.TXT MIKE
15

cently respond, and denied funding for that rule to be implemented. 

Chairman AKIN. So, of the five, you’ve got one done for sure. 

Mr. FINERAN. Right, we’ve got one done, and— 

Chairman AKIN. And, the House messed up one of them. 

Mr. FINERAN. Right. 

Chairman AKIN. Okay. 

Mr. FINERAN. And, I believe the other three EPA is working on 

them. 

Chairman AKIN. And so, there’s three that are in process. 

Mr. FINERAN. Right. 

Chairman AKIN. Of the five, and those five were submitted 

when? 

Mr. FINERAN. Back in 2004, May, I guess, of 2004. 

Chairman AKIN. 2004? 

Mr. FINERAN. Yes. 

Chairman AKIN. So, a couple years on those. Okay. 

Mr. FINERAN. But, you’ve got to remember, the list was not released of the finished by OIRA until the end of 2004, and the list 

didn’t come out until March of 2005, so it’s been more like a little 

bit over a year. 

Chairman AKIN. Okay. 

I want to ask you the same question, Bill. 

Mr. KOVACS. Sure. I guess I probably wouldn’t be—some of the 

regulations, for example, have been settled by court, new source review, others the programs have died, like environmental justice, so 

it’s very hard to sit here. 

But, I don’t want you to forget that the process was in 2001 and 

2002, we have a chart here, for example, in 2001 there were 23 

high priority items designated by OIRA, and literally nothing happened with those, and I don’t even know that there was a report. 

They just sort of disappeared. 

In 2002, there were 161, and out of that 45 candidates emerged 

and went to the agency. So, there again, they were just lost, and 

the next year there was no nomination process. 

So, that’s where the discouragement came in, and then by the 

fact that you can’t get timely information, which is the key, and 

there’s no reason for that in the internet age, you don’t have people 

willing to participate in the process because when you enter into 

this regulatory process, whether it be just nominations, and I keep 

on saying that’s only one part of what Congress set up, it takes an 

enormous amount of effort. You have to have people who understand how the regulation works in the real world, and then how 

it’s processed, and then we have to put it in writing to the agency. 

So, when we go out to hundreds of members, which we do, to get 

a list of 16, 35 in one year, and about 40 in another year, you are 

asking them to do a lot of work. So, I would say that I would probably give them a C, and the reason I would give them a C is because both Congress and OIRA, for the last year, at least on the 

manufacturing regulations, have put an enormous amount of pressure on OIRA, and OIRA is now talking to the agencies, but prior 

to that time there was no one speaking to anyone. They just sent 

it there, and whatever the agency did, and I think OIRA’s last testimony before the Government Reform Committee was, they 

16

weren’t really sure what all the agencies were doing themselves, 

whether they were trying to compile it. 

Chairman AKIN. I’m going to try and follow my own rules. My 

five minutes are up. I’ve been joined by three fantastic colleagues, 

Mr. Sodrel, and Ms. Kelly to my right, and Ms. Christensen to my 

left. 

Just a quick review of what we are talking about here. There 

was a process put together to try to streamline and get rid of red 

tape in various agencies, and so what happened is, a bunch of 

small businesses have made recommendations, of 189 there were 

76 that were called out as top priorities. We are taking a look at 

the progress that the agencies have made on those various projects, 

and what needs to be done to possibly effect that process, or to encourage further changes. 

So, with that, I’m going to turn to my Ranking Member for five 

minutes. 

Ms. BORDALLO. Thank you very much, Mr. Chairman. 

I don’t know whether the progress is as good as we felt it was 

going, but I have, first of all, I have a copy of the—it’s the congressional report, 2005 report to Congress on costs and benefits of Federal regulations, and I notice that, and I just want a yes or a no 

to this first question. 

Many of the ones that they categorized as done were merely reports to OMB on the issue, no changes. Many of the 36 they say 

are done are disputed. I’d like to ask you that, Mr. Aitken, do you 

say this is true? Is done done, or is it just a report filed? 

Mr. AITKEN. In developing the 76 reform nominations, OIRA and 

the agencies reviewed the nominations that had been received and 

made determinations on a case-by-case basis, based on the knowledge that the agency and OMB had at the time, whether the next 

step would be to do further research and prepare a report on an 

issue, which would then help to inform whether further rule making would be appropriate, or whether there was sufficient information and knowledge to be able to go forward and say at that point 

that the agency should move forward and take regulatory action. 

And so, therefore, for some of the nominations the preparation of 

a report was what was decided as the best course of action. 

Ms. BORDALLO. What have you done with these reports? I mean, 

when I see something done, I think it’s done, it’s gone through everything, regulations are in place, and we go forward. 

Mr. AITKEN. I would need to look into that and get back to you. 

Ms. BORDALLO. Would you give that to the Committee, Mr. 

Chairman? Yes. All right. 

We’ve been at this for a number of years. Mr. Kovacs, how do you 

feel about the done that they have on this report? 

Mr. KOVACS. Well, you know, it’s hard—you know, you’ve got to 

leave some discretion with the agencies. The problem is, done 

sometimes is the easiest way out, and I guess we keep on coming 

back, the nominations are great, but you have a process in place 

with Section 610 of the Regulatory Flexibility Act, which requires 

the agency, not periodically, not on 76 regs, or something, but 

every year to sit down and think about what is it that we are going 

to do, because we’ve got 110,000 regulations, and the Congress is 

never going to get their handle on it. Industry is never going to get 

17

their handle, but the agency is the one entity that gets the complaint, knows what the problem is, knows what the practical thing 

is, and they need to begin bringing groups together within the 

agency to say, we’ve heard this from this group or that group and 

how do we work these regulations. 

And, a lot of the regulations, frankly, are simple business practices right now. They’ve been there for a long time, and we need 

to leave them there, but there are a lot of regulations, like the definition of solid waste with EPA, which they are handling now and 

was on the list, which is something that’s been going on since 1976. 

They’ve got to figure out how to do it. 

Ms. BORDALLO. Thank you, thank you very much. 

Now, my second question is, last year I recommended that we 

meet with our counterparts in other countries, to discuss regulations and their lack of humane and appropriate regulations and appropriate standards. 

At that time, the panel mentioned ten European countries that 

we have had regulatory talks with or traded ideas with, but not 

one Asian country at that time. Shouldn’t we be doing something 

to systematically keep track of the regulation and laws that influence our competitors? Do we have a strategy to work with our competitors, including Asian countries on basic health and human safety regulations and innovative ideas? And, can you give us an update of the progress of the toxic release inventory rule, and the 

spill prevention petroleum counter measure reforms? 

I don’t know whether Mr. Aitken, would you—or whoever would 

like to take this up, what are we doing with the Asian countries? 

Have we improved? 

Mr. AITKEN. I’m not familiar. 

Ms. BORDALLO. Can anybody answer that? 

Yes. 

Mr. OTIS. Yes, let me— 

Ms. BORDALLO. Mr. Otis. 

Mr. OTIS. Both the spill control and the toxic release inventory, 

I’m probably the best person to respond to both of those. 

With respect to your question on Asian countries, the Administrator of the agency was in China for about a ten-day period about 

a month ago, and that was our first step towards beginning to 

build at that level more concrete relationship with the State Environmental Protection Administration, SEPA, in Beijing. He was in 

Shanghai and several other cities, and so we are—we are beginning 

that process. 

It is not an easy one for us, in the sense that we have no institutional mechanisms within the agency to do this sort of thing, but 

we recognize some of the issues that you are talking About and 

have clearly begun to do that at a senior level. 

Ms. BORDALLO. All right. 

I guess my time is up, Mr. Chairman, but I certainly hope—this 

is an important aspect. 

Mr. OTIS. I would love to talk to you further about it. 

Ms. BORDALLO. Thank you. 

Chairman AKIN. I don’t recall the order of people coming in. Mr. 

Sodrel, I think you were next, is that correct? Do you have question 

or answer? 

18

Mr. SODREL. Yes, thank you, Mr. Chairman. 

You know, I came a small business background, and when you 

keep talking about 76 I thought about 1776. Thomas Jefferson 

wrote a paragraph in the Declaration of Independence that always 

sticks with me. He said, when he is giving a reason to separate our 

relationship with King George, he said, ‘‘He has erected a multitude of new offices and sent hither swarms of officers to harass 

our people and eat out their substance.’’ It sounds kind of contemporary to me. 

Since the system of suggesting that agencies change does not 

work very well, and I’d like to address this to both NAM and the 

Chamber representatives. You talked a little bit about ALJ relief, 

or civil court, or some other standard, unfortunately, agencies have 

a vested interest in maintaining the status quo, or growing the organization, I mean, that’s just human nature. They don’t want to 

make the agency smaller. They don’t want less influence. It tends 

to grow. So, how would you suggest that we enforce some discipline? 

Mr. KOVACS. Sir, I do have one comment on that. When we were 

going through some of the more recent efforts, not the nominations, 

but like the guidelines for data quality, which really goes to the 

heart and soul of the rule making process, literally, there was not 

one agency, and you can go to the transcripts that they would have, 

like at the National Science Foundation and other public events 

that ever supported these. All they ever talked about is how opening up the agency and using good information, I mean, we are talking about agencies using good information, up to date, accurate information. How could you be resistant to that? 

And, it all goes to, really, agency discretion. They have there 

right now, the courts are very pro agency, and we understand that, 

so they know that if they can get to the weight of evidence, or to 

their judgment, they have a very good chance of being of help. 

So, what you have to have is some mechanism, Congress has legislated beyond anything we could ever dream of, I mean, I think 

you’ve done a good job of putting the structure in place, but it’s not 

enforceable. So, there has to be some way, and I guess probably if 

I wanted to really sting an agency, the way I would do it is, I 

would take a paragraph out of the Mandates Information Act, 

which allows you to do a point of order if they don’t consider the 

impact on local government, and if the agency doesn’t fulfill its Section 610 review plan, which it’s got to do, which it should be doing 

every year and has not done, then maybe a member of Congress 

should be allowed to raise a point of order, because once you do 

that, you fool with the one thing they care about, and that’s their 

budget. And, that’s the number one thing, that’s where I would go. 

Mr. FINERAN. Yes, I would just respond, agencies, you know, obviously, do want to stick with the status quo, and that’s one reason 

why, you know, we’ve been concerned, you know, since 2002, on 

this fire standard. I mean, I know more about that fire standard 

than I should, given how technical it is. We’ve been working with 

NMA. 

Again, it’s a very technical regulation, apparently, and using a 

certain resonant boat building, but it incorporated the standards 

from 1969 of the National Fire Protection Association. The NaVerDate 0ct 09 2002 17:08 Nov 21, 2006 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 G:\HEARINGS\30357.TXT MIKE
19

tional Marine Manufacturers Association has been petitioning, and 

there are other entities, since ‘94 to have that changed. 

We nominated it in 2002, nothing happened. We nominated it in 

2004, she indicated there are consensus standards. That’s the 

whole process. When OIRA was talking with the agencies about the 

list of 76, I don’t know why OSHA did not just accept, okay, we 

will update this regulation, put three sentences in the Federal Register, say we want to incorporate the latest standards from NFPA, 

out for public comment, and that’s it, they checked the box. 

Instead, it came back as part of the overall consensus regulations, but that, you know, is confusing to us and to the National 

Marine Manufacturers Association. 

In the meantime, as they submitted a letter for the record, in the 

meantime numerous of their members are cited because they used 

modern fire standards, because they are not 1969. 

Mr. SODREL. Well, whatever we need to do to impose some common sense on the system. I mean, nobody is opposed to safe workplace. 

Mr. FINERAN. No. 

Mr. SODREL. Nobody is opposed to protecting the environment, 

but we need to do it in the most economical and common sense 

fashion that we can to achieve the desired result. 

Thank you all for being here today. 

I’ve still got a few seconds left, apparently. 

Mr. OTIS. Yes, if I could answer your question in part. 

Mr. SODREL. Sure. 

Mr. OTIS. I had an ancestor in 1763 who argued against the British Crown and the writs of assistance, and in four hours James 

Otis also laid out the groundwork similar to what you spoke. So, 

I have, perhaps, a genetic agreement with you on many cases. 

I worked in the early 1980s in the Office of Information and Regulatory Affairs, as did the gentleman I currently work for, and our 

Deputy Administrator, and all of us have spent a considerable time 

in the regulatory process, much of what Bill is talking about. 

And, perhaps, one of the things that the committee might think 

about, and the future Administrator or OIRA might think about, is 

that OIRA has always seen its role of what I would call inspecting 

quality at the end of the rule making process, and has not spent 

much time focusing on the actually regulatory development process 

itself, the skill sets of the agency employees involved, and many of 

the procedural things that Bill is talking about. They have spent 

some time, but, perhaps, not as much as it could. 

So, one of the things your committee may want to discuss with 

the future OIRA Administrator is the issue of, is OIRA’s principal 

responsibility working with agencies on that end of pipe review, inspecting quality at the end, or should a portion of its time be spent 

working with agencies on improving their regulatory development 

process itself in a fairly nitty, gritty fashion, and, therein lies, perhaps, a treasure trope of things that could be done. 

Chairman AKIN. Very good questions and very interesting answers. 

I think next in line is Ms. Christensen, if I’m not mistaken. 

Ms. CHRISTENSEN. Thank you, Mr. Chairman. 

20

Chairman AKIN. Excuse me, could I interrupt just one second. I 

also want to introduce another member of the committee here, that 

is the Gentleman from Texas, and also a fellow that’s pretty darn 

good at cooking ribs, considering he’s that far south of Kansas City, 

and a judge as well. So, we’ve got to mind our behavior. 

Thank you, Louie. 

Ms. CHRISTENSEN. Thank you, Mr. Chairman. 

I’m going to ask a question to the EPA and Labor representatives 

here. Realizing that these 76 existing rules were singled out, had 

some targets singled out for immediate action to relieve the regulatory burden, we do have the Regulatory Flexibility Act, and I’ve 

always been very concerned about how that Act has not really been 

used to the extent that it needs to be to relieve some of the burdens 

on our small businesses. 

So, I’d like to ask both Veronica Stidvent and Mr. Otis, what efforts have you made to comply with the Regulatory Flexibility Act 

requirements that agencies review every ten years regulations that 

have a significant impact on a substantial number of small businesses, to see if they can be simplified or eliminated, just through 

the regular process? And, have you ever published any regulations 

to be reviewed pursuant to Section 610 of the RFA, that ten-year 

review of regulations? 

Mr. OTIS. I’ll go first. 

I will have to get back to you on the answer of whether we have 

actually published a 610 list or proposal. I have a feeling that Bill 

may be able to give us an answer to that. I have a feeling not. 

One of the things I think you are aiming for and the committee 

is aiming for here is the question over whether or not as agencies 

we are as closely managing the regulatory development process as 

we should, including things like the 610 list you are talking about. 

I will tell you I think at EPA right now we have a Senior Management Corps, perhaps, we are, as senior managers, all inside 

Washington at this point, and we critically understand that the 

issue of the process itself and the various component pieces, and 

the importance of those pieces to the outcome. 

So, I think you will see in the next couple of years a greater focus 

on these more procedural aspects of the rule making process, including 610. 

Now, there are a variety of things that occur under the Regulatory Flexibility Act, and my office has principal responsibility for 

trying to drive them throughout the agency, and we have done 

quite a few SBREFA-related panels. I think it’s fair to say that the 

small business function that we have within EPA, my office is quite 

dedicated to that, those sorts of functions, and I think we have 

found both our rule writing staff, depending upon the program and 

the specific issue they are talking about, have found quite great 

value in those kinds of, whether they are a citizens advisory committee of some kind, or formal SBREFA panel, or a formal FACA 

panel, that those are helpful to us, and we have actually begun to 

realize their value, not as argumentative forums, but as cooperative forums for understanding how we can improve a rule, and I 

think we can give you examples where they have had that kind of 

positive value. 

Ms. CHRISTENSEN. Ms. Stidvent? 

21

Ms. STIDVENT. Yes, I can assure you that we take very seriously 

our responsibilities under the Regulatory Flexibility Act, not only 

in the 610 reviews, and my colleagues just handed me a publication 

from April of this year where we published three rules to be looked 

at under 610, and we continue to do that on a regular basis. There 

are a number of rules we did a look-back review on. 

But also, new rules, and I think that that is where we try to 

make the greatest impact, is any time we undertake a new regulation my office makes sure that the analysis is done to look very 

carefully at the impact of those regulations on small businesses. 

And, that’s in anticipation, too, of a further review of that by OMB 

in consultation with the SBA Office of Advocacy. So, we take very 

seriously our responsibilities under the RFA, both in the look-back 

review and for new rules. 

Ms. CHRISTENSEN. Thank you. 

Mr. Aitken, I know that this hearing is most—is chiefly around 

the review of the past year, but Mr. Kovacs from the Chamber said 

that with respect to the recommendations made in 2002 and 2003 

that they seem to have disappeared, running the risk of losing support for this initiative, especially since people seem to put in a lot 

of time and effort to reviewing the recommendations and coming up 

with the final list. 

What happens, an you tell us what happened with the recommendations made in the rounds in 2002 and 2003? 

Mr. AITKEN. As I mentioned during my oral statement, I started 

in OIRA in early June, having come from Counsel’s Office, and at 

this point I’m not very familiar with the status of the 2001 and 

2002 nominations. But, I can provide additional information to the 

Subcommittee regarding those nominations. 

Ms. CHRISTENSEN. I’d appreciate that, through the Chair, if we 

could find out what happened. 

Chairman AKIN. Without objection. 

Ms. CHRISTENSEN. Thank you. 

Chairman AKIN. Okay. I think next the Gentlelady from New 

York, Ms. Kelly. 

Ms. KELLY. Thank you. 

I’m interested in whether or not the agencies that are represented here at the table speak to each other when they are promulgating rules and regulations? 

Mr. AITKEN. As Mr. Otis said, under Presidential Executive 

Order OMB/OIRA reviews drafts of proposed rules and final rules 

near the end of the— 

Ms. KELLY. All of them? 

Mr. AITKEN. The— 

Ms. KELLY. All 4,000 a year? 

Mr. AITKEN. No, the significant ones, either those that are economically significant, which have impacts of over $100 million annually, or that otherwise have a significant impact on a sector or 

raise novel legal issues, or impact on other agencies. 

Ms. KELLY. What happens when that is reviewed? Just walk me 

through that process, can you? 

Mr. AITKEN. An agency would submit, near the end of its development of the rule, would submit a draft of the rule to OIRA for 

review, and we would then have discussion with the agency, and 

22

with other interested agencies and offices, about the rule. And, if 

it was an economically significant rule, the agency would have prepared a regulatory impact analysis, which we would then review 

with the agency. 

And, at the conclusion of our review, the agency would then issue 

the rule, whether it be the proposed rule or the final rule. 

Ms. KELLY. When you do a regulatory impact analysis, who gets 

that to evaluate, because I don’t believe that it comes up to this 

committee. 

Mr. AITKEN. The agency, the rule making agency itself, would be 

the one that prepares the regulatory impact analysis. 

Ms. KELLY. So, I’m sorry, I just have to—I’m trying to understand. You are saying that something like a Labor Department 

would do—would prepare its own report. I thought you said OIRA 

was looking at that. 

Mr. AITKEN. Oh, sorry for the confusion. The rule making agencies, say OSHA, or EPA, or another agency, in connection with an 

economically significant rule, one with $100 million impact. 

Ms. KELLY. Right, $100 million or more. 

Mr. AITKEN. They would prepare a regulatory impact analysis of 

the anticipated benefits and costs of the rules. It would then submit that analysis to OIRA, along with the draft of the proposed or 

final rule, and then that would be part of our review, discussing 

the regulatory impact analysis, as well as the draft rule, to get a 

better sense of the relationship of the estimated costs and benefits 

of the rule. 

Ms. KELLY. So, this is all done within the Executive Branch of 

Government, rather than the Congressional Branch. There’s no 

input from the Congressional Branch, if I understand you correctly. 

Mr. AITKEN. That Executive Order process is an internal Executive Branch process. 

Ms. KELLY. Okay. 

Mr. OTIS. Congressman, if I could, those analyses, however, are 

part of the public docket, and now those are internet accessible as 

part of the new Federal Government-wide Docket Management 

System. 

And, you’ve raised a very important question over our ability to 

work with fellow agencies. For us, much of what we do very clearly 

touches on virtually every other federal agency’s jurisdiction, particularly, Agriculture and Energy. And, we have in this Administration created an Agricultural Advisor to the Administrator. He 

directly reports to the Administrator, and has helped us build quite 

a few bridges, both at the career and senior political manager level 

with the Department of Agriculture, in many ways that we as an 

agency never had before. And, we’ve been starting to do that in 

many different levels with the Energy Department. 

We are working, for example, on the spill control rule to conduct 

an analysis that was requested of us by the Energy Department, 

and we have a team from both departments working on it. 

I don’t want you to go away thinking that everything is fine, but 

I think it’s an area where this gets back to the issue I raised over 

sort of the more mechanistic aspects of the rule making process. I 

think we need to do more of that, and we’ve been struggling to, and 

I think we’ve done better, and need to do more. 

23

Ms. KELLY. I’d be interested—I’m sorry that the Commerce—Department of Commerce isn’t here, but maybe the Chamber can give 

me some kind of an idea, they are looking at this at a cost benefit 

analysis, do you know whether or not they are also checking for redundancy and overlap? And, wouldn’t that be a place where we 

could certainly cut down on some of the rules and regulations? 

Mr. KOVACS. The answer is yes. The biggest single problem that 

we have, and I’m talking about as— 

Ms. KELLY. The answer is yes to what? 

Mr. KOVACS. Yes, we could— 

Ms. KELLY. That the agencies are looking at redundancy and 

overlap? 

Mr. KOVACS. No, they are not. 

Ms. KELLY. They are not. 

Mr. KOVACS. The biggest single issue in the rule making process, 

we’ve been fighting this issue for years, is that the Data Quality 

Act required the agencies, and they just hate this, to use the most 

recent best quality data, so you don’t have a rule making where the 

agency is using data that’s ten years old, or you don’t have an 

agency using, you know, taking certain studies that may be 

outliers, but not using the bulk of the studies. 

And, the courts have been very clear that the Data Quality Act 

is not enforceable, it’s really between OIRA and the agencies, and 

they can do whatever it is they want. There’s no way to enforce it, 

so that if an agency, and this is what the 4th Circuit says, this isn’t 

the Chambers’ position, if the agency wants to rely on data that is 

not the most accurate, not the most reliable, and not necessarily 

in the mainstream, they are free to do that, and, in fact, just yesterday the D.C. Circuit said, not only can they do that, but if they 

go into a rule making process and they have one rule which is for 

the proposed rule, and they come out with a totally different final 

rule, that’s even acceptable, too. 

So, the problem is, the agencies have enormous discretion in the 

information they use, how they select it, and who they talk to, and 

there’s nothing that anyone on the outside can do about that. 

Ms. KELLY. Thank you. 

My time is up. 

Chairman AKIN. Well, this is a hearing I’m sure could go longer 

than we are going to be able to make it, but, Mr. Gohmert. 

Mr. GOHMERT. Thank you, Mr. Chairman, and I appreciate you 

all being here. I’m sorry I was a little late. 

You know, so many of these committee hearings, I’m sure you’ve 

been through, people like to preach, and I like this committee, 

there’s not that much preaching at people as there is really trying 

to gather information. 

I just have a couple questions for Mr. Fineran and Mr. Kovacs. 

In the information provided by agencies, there are indications 

that 36 of the 76 priority reforms have been accomplished, and 

through 2005, 33 of the 46 reform milestones identified by the U.S. 

manufacturing sector report have been reached. And so, I wanted 

to ask you guys, that’s what the Government is saying, do you 

agree with that? 

Mr. Kovacs? 

Mr. KOVACS. We had the discussion of what’s completed already. 

24

Mr. GOHMERT. Okay. 

Mr. KOVACS. And, the answer is sometimes the word is done, and 

that’s what the agency says, it’s just done. 

You have to be careful. I mean, the agency does need some discretion, and they are the experts in this area. What we really need, 

though, is the transparency, and, really, some integrity in the process. 

You know, we have a right, if we don’t like the rule— 

Mr. GOHMERT. But, you understand this is a government, and so 

you are wanting integrity in the process, is that right? I mean, let’s 

don’t hope for too much here, you know. 

Mr. KOVACS. Transparency, I mean, we are all in this boat together, and we’ve got these 110,000 regulations, and we’ve got to 

figure out how to do them the right way. And, what we’ve always 

preached is, that the agencies need to figure out how to prioritize 

this, because with limited resources they have, we are all for protecting public health and safety. We are all for having the safest 

workplace, but, you know, we spend $300 billion a year on environmental protection, and we spend it a lot of times on what the experts would say are not the main issues and the big issues we sort 

of let go. 

So, when they say done, there’s no way for us to really challenge 

that. I mean, if they want to say it’s done, it’s done. 

Mr. GOHMERT. Well, I was giving you the chance to challenge it, 

here and now. 

Mr. KOVACS. Well, we’ve challenged it in the sense that we’ve 

said that on a lot of the rules, like the definition of solid waste, this 

is something they’ve worked on for years. They are sort of going 

through a rule making process, they are saying they are doing 

something, but they’ve been going through the same rule making 

process since 1980. They’ve got to come to—they’ve got to come to 

a conclusion, and that’s where the problem is in the regulatory 

process, it just gets lost. 

And, what happens a lot of times is, there’s so much, there’s so 

much regulation, that the stuff that’s really important gets the 

same amount of attention as the stuff that’s not important, and 

that’s where I think the small businesses come. 

We could bring in like some of the stuff that EPA is doing with 

home builders, for example, on enforcement. If your silt fence is 

down for a day, they may fine you $10,000, so you are focusing on 

whether or not you’ve got your paperwork in, but you are not focusing on whether or not the excavation is right, and that’s where the 

problems come in. 

Mr. GOHMERT. Sure. 

Well, Mr. Fineran? 

Mr. FINERAN. Well, you know, as Bill said, you know, what is 

done, a number of them are reports, but does that mean there is 

or is going to be a change in the regulations? 

But, I think that having the milestones in there does show that 

something did come out of the 2002 exercise and 2001 exercise, 

which is that, you know, those did not have any kind of overall 

deadlines or what agencies should achieve when. So, at least that 

was one useful thing that came out of the previous exercise, we can 

do that. 

25

Again, the problem is, if you were to ask us to find out today 

where the regulations stand today, Bill and I can’t really tell you. 

You know, there’s no place, OIRA doesn’t have it, the centralized 

tracking system, they don’t have the list of 76 posted, where the 

agencies are, have they met their deadlines, the individual agencies, as far as I know, don’t have it on their public websites. 

There may be reasons for that that I’m not necessarily aware of 

legal or other, but again, that has been one problem. 

Mr. GOHMERT. Well, let me ask you this. What do you think is 

the most important specific reform that needs to be achieved, the 

next most important specific reform that should be achieved? If you 

could do one thing. 

Mr. KOVACS. I would— 

Mr. GOHMERT. King for a day. 

Mr. KOVACS. I would take the passage out of the Mandates Information Act, which allows a member of Congress to raise a point of 

order on an agency appropriation, if they don’t perform, whether it 

be the 610 reviews or the nomination process, and in a transparent 

way. 

And, I say that because there’s nothing, if you ever, if the Congress and the American people are ever going to get control over 

the regulatory process, the Section 610 review and the Regulatory 

Flexibility Act is the key, because when Congress legislated that 

what they said is, the agencies have to have a part of the strategic 

plan and to focus on those regulations that are out of date or 

should be changed. And, the agencies, for the last 20 years, that’s 

been in the breach, periodically, about every year, you know, you 

can find 15 or 20 that will appear in the Federal Register, but 

there is no consistent plan, and that’s the one thing, when you get 

that report you are able to see it, we are able to see it, and the 

process, we can begin talking to each other. 

And, I don’t know how else. I mean, we could argue, give us a 

right to review it in court, you know, all that does is, that’s just 

more litigation, let’s get the job done, and that is, the agency hears 

the complaints, they know what the problems are, and let’s get the 

process started, so we can be involved in looking at it, and Congress can see what the results are every year. 

Mr. GOHMERT. Would Mr. Fineran be allowed to answer? 

Mr. FINERAN. Real short, I can answer. 

One thing I would like to see happen, the NAM would like to see 

happen, is to have the Executive Order 12866 made statutory, so 

that OIRA would have some statutory authority. Also, as part of 

that, you know, have judicial review now, the Administration will 

hate that, whoever is the Administration at the time, but to Dr. 

Christensen’s point, when the RFA was completely non-judicially 

reviewable in the ‘80s, under the Reagan Administration, every 

regulation that came out just About said that this regulation does 

not affect small entities in any way, because that relieved them 

from doing—from adhering to RFA. 

And, once it became judicially reviewable, I think that went 

away. 

Mr. GOHMERT. Thank you. 

Thank you, Mr. Chairman. 

26

Chairman AKIN. I thank the committee and also our guests for 

participating, I think, in an interesting discussion. I’m not content 

that it’s just an interesting discussion, and I’m going to be pressing 

this committee to take a look, particularly, at your recommendations, Bill. 

But, my sense is, is that with the people that are here, there’s 

a good intent to do what’s right, but somehow we get ourselves tangled up in an awful lot of extra hoops and things that we have to 

run through. 

And, I’d like to figure out what’s the best way to proceed. We’ve 

already seen that we passed a lot of bills, there’s an intent on 

everybody’s part to try to streamline the process, and there is increasing competition internationally that says we have to succeed 

in this. 

So, we are going to be taking a look at what needs to be done 

to try to move things along. 

I’m going to make a closing statement here, so that everybody is 

forewarned. Although I hate red tape, I’m somewhat sympathetic, 

being a Congressman for six years, I know how slow it is for us 

to get very simple things done. I understand that you may have 

great intentions, as many of us do, and it still just seems like we 

are watching glacier races some weeks. So, I’m not blaming anybody personally or particularly, but I think we want to try to get 

through this and figure out what needs to be done. 

I have one quick question and then I want to make a closing 

statement. The quick question is, to the agencies, when I used to 

work for IBM one of the rules on project management we had was, 

if you’ve got a project that you really care about put one person in 

charge and hold them accountable. 

On these different things that we are trying to clean up, is there 

ever one person given that job, and just say, okay, this is your deal, 

now you go take care of it and get it, not done, but complete, in 

a satisfactory fashion? Is it ever done that way, or are these sort 

of lists sort of passed around and passed around, nobody specifically accountable? Just a quick answer and then I’ve got close up. 

Mr. OTIS. The answer from EPA’s point of view is, generally, yes. 

If it’s a particular rule making, there is, indeed, a workgroup chair 

who is given responsibility of dealing with that, with that particular rule. 

And then in a management sense, we’ve done the same thing. 

We know what these particular nominations are, and we have the 

management team is held accountable to the point where the Deputy Administrator and Administrator are asking periodically, how 

are you doing. 

So, yes, there’s a work level person who is in charge, and then 

there’s a management chain very clearly held accountable. 

Chairman AKIN. Thank you. 

Let me go ahead and close up here, at least for the moment. 

First of all, thank you all for participating in the hearing, and 

it does hearten me to hear that there has been progress, but I’m 

concerned that I don’t have a very clear-cut picture of exactly 

where these things are, the status of where they are, when they 

are actually completed to the point of being satisfactory from the 

point of view the people that are affected by the regulations, and 

27

I think we need to figure out some ways that we can create a more 

transparent system for the individuals who have made the recommendations that we’ve heard. 

And, we must consider whether institutional changes must be 

made that will transcend the loss of those individuals that are actively seeking ways to reduce regulatory burden. 

In regards to the 76 nominations, Mr. Aitken, I would like your 

office to submit a chart for the record outlining where Federal 

agencies are on the nominations that have been agreed to, their 

progress, and when they are actually completed in a way that is 

satisfactory to the people that made the recommendation, I want 

to know the date and when those were checked off, when we got 

them done. You know, this is the satisfaction of a ‘‘to do’’ list, you 

want to check them off, you want to see, the ones that are checked 

off, and then where the status of the other ones are. 

I’m also going to be asking our staff to take a look at what we 

can do to try to streamline the process, hold people accountable, 

move the projects along, and so we’ll be continuing on this. This 

is the second hearing we’ve had on this, it’s not something that we 

are going to be dropping. 

I understand, Mr. Aitken, that you are an interim, too, in the position, and that makes it maybe a little bit more complicated, but 

I have had a chance to chat with some of the people in charge of 

your agency, and I think there’s an interest in cooperating and putting this all together, making it work. 

I also wanted to compliment you, Mr. Otis, it seems like you are 

really on top of what we are trying to do, and trying to make the 

thing work. 

And, all of you, I think, have been helpful, but I just think we 

need to do a little bit better job. All of you that have heard this 

hearing would probably agree on that point. 

So, we are not done with this yet, the report issued in 30 days, 

is 30 days okay, Mr. Aitken? 

Mr. AITKEN. I’ll need to look into that, but I would hope that 30 

days would be fine. 

Chairman AKIN. All right. If it’s not 30 days, we are going to 

need an awful good reason why we can’t do that in a month, just 

know where the status of those projects are. 

Supposedly, people are tracking them, it’s a matter of just collecting the information. 

Yes, Madam Chair—oh, closing statement, yes. 

Ms. BORDALLO. Thank you, Mr. Chairman, and thank you to the 

witnesses. 

As the Chairman stated, I think we all want the same thing, but, 

you know, with 90 percent, 97 percent of the businesses in America 

being small businesses, I think we should put this up on our priority list. 

Listening to the Chamber of Commerce and their reports for the 

last how many years here, one year nothing was done, 2003. You 

know, we’ll be here until 2015, and maybe still going over the same 

situation. 

So, I just say, isn’t there—could we envision a system where 

when the industry establishes a new standard that they meet immediately with the appropriate agencies, and work together on a 

28

negotiated rule making, to bring the agency rule up to date. Something has to be done where we could meet together, not individually, because I think what Congress is being misled here, we 

think that, you know, everything is done, but it’s not done, we’ve 

just filed the report, and we seem to be just spinning our wheels. 

So, I would suggest that, Mr. Chairman, we find a more efficient 

way to work together and to try to remove some of these things off 

our books. 

Thank you very much. 

Chairman AKIN. Thank you, everybody, with that the hearing is 

adjourned. 

[The hearing was adjourned at 11:28 a.m.]

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