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A RUSH TO REGULATE—THE CONGRESSIONAL REVIEW ACT AND RECENT FEDERAL REGULATIONS

HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY POLICY, NATURAL

RESOURCES AND REGULATORY AFFAIRS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

MARCH 27, 2001

Serial No. 107–14

Printed for the use of the Committee on Government Reform

(

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

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

BOB BARR, Georgia

DAN MILLER, Florida

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

DAVE WELDON, Florida

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

C.L. ‘‘BUTCH’’ OTTER, Idaho

EDWARD L. SCHROCK, Virginia

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

JANICE D. SCHAKOWSKY, Illinois

WM. LACY CLAY, Missouri

——— ———

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

ROBERT A. BRIGGS, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON ENERGY POLICY, NATURAL RESOURCES AND REGULATORY

AFFAIRS

DOUG OSE, California, Chairman

C.L. ‘‘BUTCH’’ OTTER, Idaho

CHRISTOPHER SHAYS, Connecticut

JOHN M. MCHUGH, New York

STEVEN C. LATOURETTE, OHIO

CHRIS CANNON, Utah

——— ———

——— ———

JOHN F. TIERNEY, Massachusetts

TOM LANTOS, California

EDOLPHUS TOWNS, New York

PATSY T. MINK, Hawaii

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

DAN SKOPEC, Staff Director

JONATHAN TOLMAN, Professional Staff Member

REGINA MCALLISTER, Clerk

MICHELLE ASH, Minority Counsel

(III)

C O N T E N T S

Page

Hearing held on March 27, 2001 ............................................................................ 1

Statement of:

Gestrin, Terry E., chairman, Valley County Commissioners, Cascade, ID;

Evan Hayes, wheat farmer, American Falls, ID, representing the National Association of Wheat Growers; Sharon Buccino, senior attorney,

Natural Resources Defense Council; and Thomas O. McGarity, W.

James Kornzer Chair, University of Texas School of Law ........................ 91

Gramm, Dr. Wendy Lee, former Administrator, Office of Information

and Regulatory Affairs, OMB, and director, Regulatory Studies Program & distinguished senior fellow, Mercatus Center, George Mason

University; Marshall E. Whitenton, vice president, Resources, Environment and Regulation Department, National Association of Manufacturers; Dr. Robert H. Nelson, professor, School of Public Affairs, University of Maryland; and Raymond E. Ory, vice president, Baker and

O’Brien, Inc ................................................................................................... 8

Letters, statements, etc., submitted for the record by:

Buccino, Sharon, senior attorney, Natural Resources Defense Council,

prepared statement of ................................................................................... 106

Gestrin, Terry E., chairman, Valley County Commissioners, Cascade, ID,

prepared statement of ................................................................................... 94

Gramm, Dr. Wendy Lee, former Administrator, Office of Information

and Regulatory Affairs, OMB, and director, Regulatory Studies Program & distinguished senior fellow, Mercatus Center, George Mason

University, prepared statement of ............................................................... 11

Hayes, Evan, wheat farmer, American Falls, ID, representing the National Association of Wheat Growers, prepared statement of ................... 99

McGarity, Thomas O., W. James Kornzer Chair, University of Texas

School of Law, prepared statement of ......................................................... 116

Nelson, Dr. Robert H., professor, School of Public Affairs, University

of Maryland, prepared statement of ............................................................ 51

Ory, Raymond E., vice president, Baker and O’Brien, Inc., prepared statement of ........................................................................................................... 67

Ose, Hon. Doug, a Representative in Congress from the State of California:

Memorandum dated September 25, 2000 ................................................ 79

Prepared statement of ............................................................................... 4

Whitenton, Marshall E., vice president, Resources, Environment and Regulation Department, National Association of Manufacturers, prepared

statement of ................................................................................................... 38

(1)

A RUSH TO REGULATE—THE CONGRESSIONAL REVIEW ACT AND RECENT FEDERAL REGULATIONS

TUESDAY, MARCH 27, 2001

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ENERGY POLICY, NATURAL

RESOURCES AND REGULATORY AFFAIRS,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2154, Rayburn House Office Building, Hon. Doug Ose (chairman of

the subcommittee) presiding.

Present: Representatives Ose, Otter, and Tierney.

Staff present: Barbara Kahlow, deputy staff director; Dan

Skopec, staff director; Jonathan Tolman, professional staff member;

Regina McAllister, clerk; Michelle Ash and Elizabeth Mundinger,

minority counsels; and Jean Gosa, minority assistant clerk.

Mr. OSE. The committee will come to order. I want to welcome

everybody to the meeting of the Subcommittee on Energy Policy,

Natural Resources and Regulatory Affairs. This morning we’re having a hearing entitled, ‘‘A Rush to Regulate—The Congressional

Review Act and Recent Federal Regulations.’’

In the waning days of his administration, President Clinton

issued a flood of new regulations. Some are surely meritorious, others raise serious concerns.

Congress has a tool to correct defective regulations. It’s called the

Congressional Review Act. We’re going to refer to that as the CRA.

The purpose of today’s hearing is to examine some of the lateissued rules and to ensure that the decisionmaking process was

careful and above reproach. The hearing will consider not only substantive concerns but also procedural flaws in issuance of these

rulemakings.

Earlier this month, the Senate and the House passed a joint resolution of disapproval for the Department of Labor’s major rule establishing a new comprehensive ergonomics standard. The reversal

of the ergonomics rule is the first instance in which the CRA resulted in the nullification of a rule. This reversal demonstrated

that there is at least one rule that a majority of Congress felt was

not in the interest of their constituents.

On December 20, 2000, the three principal procurement agencies,

the Department of Defense, the General Services Administration,

and the National Aeronautics and Space Administration, issued an

amendment to the existing rules governing present responsibility,

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to clarify what constitutes a satisfactory record of integrity and

business ethics for contracting with the government. This is commonly called the ‘‘blacklisting rule.’’ Since the rule changes could potentially have a significant impact on a substantial number of small businesses, the agencies mistakenly certified that the rule will not have a significant impact on

a substantial number of small entities, and thus the agencies failed

to prepare the required initial and final regulatory flexibility analyses. This rule is currently being litigated.

On January 12, 2001, the Department of Agriculture published

a major rule prohibiting the construction of roads and banning timber harvesting on 58 million acres of national forest land, or 31

percent of all national forest land. For comparison, all of new England, that being Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont encompass only 44 million acres.

In the vast majority of the areas affected by this rule, the biggest

threat does not come from timber conditions but from fire. Last

year, more than 84,000 fires raged across the country, scorching

nearly 7 million acres of public land. The number of acres harvested each year by comparison is roughly half a million acres. The

stated goal of the rule is to preserve the forests for endangered species, recreation and maintenance of water quality. Unfortunately,

a forest ravaged by serious fire is unlikely to provide any habitat

for species, little in the way of recreation, and probably a degraded

water quality. The rule, originally scheduled to become effective on

March 13th, is being reviewed by the new administration and is

also being litigated.

Two days prior to the inauguration of a new President, the Environmental Protection Agency published a major rule establishing

new standards for diesel fuel. Under the rule, oil refineries must

remove 97 percent of the sulfur in diesel fuel by 2006. The current

standard of 50 parts per million was reduced to 15 parts per million. The reason that sulfur needs to be reduced from diesel fuel

is not because sulfur itself is a major source of pollution but because it interferes with catalytic converters and other pollution

control devices necessary to produce cleaner-burning diesel engines.

I support the environmental goals of the diesel sulfur rule. Diesel

engines account for a substantial portion of the ozone and particulates that pollute the air of our cities. This pollution has a wide

range of adverse health effects, particularly the evidence linking

diesel exhaust to an increased risk of lung cancer. Dozens of studies link airborne fine particles, such as those in diesel exhaust, to

increased hospital admissions for respiratory diseases, chronic obstructive lung disease, pneumonia, heart disease and up to 60,000

premature deaths annually in the United States.

Despite my support for the environmental benefits that will be

achieved by this rule, I am concerned by the timing, both the timing of the rule’s publication and the timing of its implementation.

Economic studies have suggested that our Nation’s refineries may

not be able to produce enough low-sulfur diesel fuel to meet expected demand.

As a Member representing California, I can tell you first hand

it is not a good thing when energy supplies fail to meet energy demands. Yet, that this rule was finalized days before the end of an

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administration and just as our Nation is struggling with several

energy issues is somewhat disconcerting.

I want to welcome our witnesses today. And, prior to starting testimony from them, I am reserving the right for Mr. Tierney to

make an opening statement.

[The prepared statement of Hon. Doug Ose follows:]

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Mr. OSE. Mr. Otter, would you care to make an opening statement?

Mr. OTTER. Thank you, Mr. Chairman. I do have an opening

statement that I would like to submit for the record. But I will be

very brief in the comments that I make now.

Mr. OSE. Without objection.

Mr. OTTER. I, too, am concerned, Mr. Chairman, about the rush

to judgment, the rush to regulate that we’ve had not only in the

two agencies that are coming before us this morning and the devastating effects that they have had on our abilities to produce, to

travel, to indeed carry on the commerce that needs to be carried

on not only in my State but also in the entire Union. And, because

of that, I am particularly happy, Mr. Chairman, that you have

sought to call this hearing, and I look forward to talking to the

panels that will be coming before us this morning.

But, I do want you to know that the outcome of this hearing and

the results that we will be able to go forward on are extremely important to us because there’s a lot of folks back home in Idaho and

in the Pacific Northwest that are hoping to at least get some relief

as a result of this subcommittee hearing, Mr. Chairman. So I applaud you in your efforts this morning.

Mr. OSE. Thank you, Mr. Otter.

This committee typically swears in its witnesses, so if you would

all rise.

[Witnesses sworn.]

Mr. OSE. Let the record reflect the witnesses answered in the affirmative. I would like to introduce the witnesses. Joining us today

on my left is Dr. Wendy Lee Gramm, the former administrator of

the Office of Information and Regulatory Affairs, OMB. She’s currently at the Mercatus Center, where she is a distinguished senior

fellow and runs the regulatory studies program.

Next to her is Marshall Whitenton who is the vice president of

Resources, Environment and Regulation Department for the National Association of Manufacturers.

And sitting next to him is Dr. Robert Nelson, who is a professor

in the School of Public Affairs at the University of Maryland.

And our final witness on this panel is Raymond Ory who is the

vice president of Baker & O’Brien, Inc.

If you could be so kind as to summarize your testimony within

the 5-minute timeframe, that would be most appreciated and we

would be able to get to questions quicker.

Dr. Gramm.

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STATEMENTS OF DR. WENDY LEE GRAMM, FORMER ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OMB, AND DIRECTOR, REGULATORY STUDIES PROGRAM & DISTINGUISHED SENIOR FELLOW, MERCATUS CENTER, GEORGE MASON UNIVERSITY; MARSHALL E.

WHITENTON, VICE PRESIDENT, RESOURCES, ENVIRONMENT

AND REGULATION DEPARTMENT, NATIONAL ASSOCIATION

OF MANUFACTURERS; DR. ROBERT H. NELSON, PROFESSOR,

SCHOOL OF PUBLIC AFFAIRS, UNIVERSITY OF MARYLAND;

AND RAYMOND E. ORY, VICE PRESIDENT, BAKER AND

O’BRIEN, INC.

Dr. GRAMM. Thank you for inviting me to testify on the issue of

the Congressional Review Act and recent Federal regulations.

Please note that this testimony reflects my own views and not that

of either the Mercatus Center or George Mason University.

The objective of the Regulatory Studies Program is to advance

knowledge of regulations and their impact on society. What we do

is to analyze regulations and regulatory issues from the perspective

of the public interest and the typically underrepresented consumer.

We’ve long been concerned about the growing burden of regulations

and recently have focused on the phenomenon of midnight regulations, or those regulations promulgated during the 3 months following a national election.

Mercatus scholar Jay Cochran analyzed the number of pages in

the Federal Register in post-election quarters since 1948; although

an imprecise measure of regulatory activity, it’s about the best we

have. Dr. Cochran found this phenomenon of midnight regulations

to be systemic and nonpartisan. This year was no exception when

the page count in the Federal Register jumped by 51 percent when

compared with the same quarters in the preceding 3 years.

I have outlined in my written testimony some examples of regulations that were finalized during this election period. And, you,

Mr. Chairman, have commented on many of them. More detailed

analyses of many of these regulations are available on our Web site

in the form of public interest comments that we submitted during

the comment period, as required by the Administrative Procedure

Act.

Our public interest comments provide independent analyses of

agency proposals from the perspective of the public interest and not

any special interest. Some analyses are performed by Mercatus

scholars; others are done for Mercatus by outside academics and

practitioners. Last year, alone we wrote 24 public interest comments covering most of the regulations being discussed today and

many more.

While our public interest comments may be lengthy, we have a

one-page summary with each public interest comment, along with

a checklist appended to each one. In the checklist, we provide a

very simple list of questions that policymakers should address

when crafting a regulation, and then summarize whether or not

the agency answered each question, along with a grade ranging

from A to F for excellent to unsatisfactory. The kinds of questions

we ask, for example, are did the agency identify a specific problem

that can’t be addressed by either market regulation or by other levels of government—State and local government.

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We ask whether agencies examined alternative approaches to the

ones they’re proposing, whether they attempted to maximize net

benefits, whether there is a strong scientific or technical basis for

the regulation, and, finally, we ask whether or not the agencies understood and considered both the distributional effects of the regulation on different populations, but also how individual choices

would be affected.

I would like to just say a few sentences on some of the important

midnight regulations, some of which you have commented on. The

Forest Service roadless area regulation covers biologically diverse

areas, as you said in your opening comments. And, while much

public attention has been paid to the impact on logging, our concern is that the Forest Service has not shown that the ban on road

construction is necessary or appropriate for protecting other important values, such as water quality, wildlife, and recreation in these

areas.

The agency did not consider alternatives to a complete ban, such

as allowing low-impact temporary roads as needed for forest

health, fire protection, or ecosystem restoration.

The Federal Acquisition Regulation Council’s blacklisting rule

shifts the burden of determining whether a firm meets proper ethical standards from the agencies authorized by Congress to government procurement agents. Under this regime, blacklisting replaces

the formal process and firms cannot answer the charges against

them and may be blacklisted for an administrative complaint even

before evidence is heard.

HHS’s medical privacy regulations are costly, but HHS has not

identified any net social benefits that can be expected to flow from

this regulation.

Arsenic is a naturally occurring substance for which health risks

have not been observed at the levels found in U.S. drinking water

systems. EPA justified these standards using evidence of risk from

high arsenic doses in other countries, although those populations

smoke more, and have poorer health in general. And actually there

was a U.S. study of U.S. populations where there was no statistical

arsenic risk.

The reporting thresholds for lead under the toxic release inventory would be reduced substantially, but release here means the

amount transferred offsite as waste, or even recycled or retreated.

There are a number of other regulations. I see my time is running out. I would like to point out that washing machine standards

and the energy efficiency standards are also very costly to consumers. For the washing machine standards, for example, the Department of Energy in their estimates would imply that these standards would reduce energy use by 0.16 percent over a 24-year period, but we think its estimates are overstated.

There are many other regulations worth reviewing, but I thank

you for your interest in regulations, especially midnight regulations, because these are regulations pushed through at the end of

an administration’s term when congressional oversight is unavailable and can result in potentially costly mandates that may do little to solve an identified problem.

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I also applaud your use of all your authorities, including the Congressional Review Act, to ensure that regulations which are a hidden tax on citizens are appropriate and advance the public interest.

Thank you.

Mr. OSE. Thank you Dr. Gramm.

[The prepared statement of Dr. Gramm follows:]

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Mr. OSE. Mr. Whitenton.

Mr. WHITENTON. Mr. Chairman and members of the subcommittee, on behalf of the National Association of Manufacturers, our

14,000 member companies, large, medium-sized, and small, and the

18 million people who make things in America, I want to thank you

for this opportunity to testify before you today.

At the outset, it’s important to remind everyone that the men

and women working in the manufacturing sector share basic American environmental health and safety values and want them applied in their workplaces, their homes, and their communities.

Manufacturers certainly do not oppose health, safety and environmental rules that are founded in sound science and developed in

a deliberative and public process that is as cost effective as possible.

However, a number of rules that were hurried through the promulgation process in the final days of this last administration suffered from a serious deficiency in these essential qualities of responsible rulemaking. As a result, some recently finalized rules

could require huge expenditures even for modest, let alone any genuine, protection of human health, the environment, and worker

safety.

This hearing properly focuses on unfair or inadequate agency

rulemaking that technically met the requirements, if not the spirit,

of the APA as they were rushed to the Federal Register before the

end of the last administration. Examples of rushed rules that have

large impacts on manufacturers include the EPA’s TMDL rule, arsenic rule, TRI lead rule and diesel sulfur reduction rule, OSHA’s

ergonomics rule, and the Department of Agriculture’s roadless

areas rule.

Other witnesses at this hearing are scheduled to discuss specifically the diesel sulfur reduction rule and the USDA roadless rule.

With respect to the other rules I mentioned, NAM supports Administrator Whitman’s recent decision to reconsider the arsenic rule

and asks Congress to require the EPA to reconsider the TMDL rule

and the lead TRI rule. The NAM applauds Congress for its wise

and courageous decision to use the Congressional Review Act to

disapprove the flawed ergonomics rule. However, Congress must

look at the root of the problem. The EPA and OSHA could not have

abused the public trust if they had not had such a broad delegation

of authority from Congress.

Since the World War II era, Congress has established and increased the power of non-independent Federal agencies. Initially,

Congress provided strong checks on the new agencies through the

one-House veto. In fact, by the early 1980’s, there were more than

200 statutory provisions that contained one-House or even onecommittee vetoes of regulations.

With the 1983 Supreme Court decision in INS versus Chadha,

however, the one-house veto regulation was declared unconstitutional. The court ruled that Congress cannot overrule an executive

branch decision except by passage of legislation and presentment

or presentation of that legislation to the President. In other words,

except by passing a law.

In the mid-1990’s, Congress passed the Congressional Review

Act, which is simply a procedural framework for focusing and expeVerDate 11-MAY-2000 09:20 Apr 17, 2002 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 C:\DOCS\75850.TXT HGOVREF1 PsN: HGOVREF1
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diting congressional review and, if necessary, rejecting an agency’s

rule. It is founded on the Chadha principle that Congress can only

change an agency rule with a law.

On a personal note, I was privileged to serve with Senator Don

Nickles when he devised and introduced, along with Senator Harry

Reid, the Congressional Review Act legislation in 1995, and I also

had the pleasure of working with the staff of this subcommittee the

following year, and House Judiciary Committee, during the informal conference on that measure following its amendment and passage by the House in 1996.

In the aftermath of the Chadha decision, the CRA has given Congress another tool to oversee the implementation of its legislative

delegations to the agencies. It certainly is not the only tool. The

TMDL rule, for example, is outside the window of CRA review by

this Congress. And, we hope it will be dealt with in other legislation.

Congress has not only every legal right to critically review agency rulemaking, but it also has a duty to do so. This is particularly

true today because there are too many statutes on the books that

give agencies very broad statutory authority to meet very general

goals. For example, the EPA has authority under the Clean Air Act

to, ‘‘protect public health with an adequate margin of safety.’’ In

this connection, the NAM was very disappointed in last month’s

Supreme Court decision in Whitman v. ATA in which the court declined to agree with the D.C. Circuit Court which had found that

EPA had interpreted the broad authorities in the Clean Air Act in

a way that created an unconstitutional delegation of legislative

power to the executive.

Unfortunately, it seems that Congress is going to have to actively

address its past broad grants of authority without judicial help,

and we hope that Congress will be much more careful in the future

when it is granting authority to the Federal agencies. In the meantime, we urge Congress in general to follow the example that has

been set by this subcommittee of conducting frequent and meaningful oversight over the agencies.

Thank you. I would be pleased to answer any questions you

might have.

Mr. OSE. Thank you Mr. Whitenton.

[The prepared statement of Mr. Whitenton follows:]

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Mr. OSE. Dr. Nelson.

Dr. NELSON. I am pleased to be here. I am a professor of environmental policy in the School of Public Affairs of the University of

Maryland, and senior fellow of the Competitive Enterprise Institute. My experiences in Federal land management include working

in the Office of Policy Analysis within the Office of the Secretary

of the Interior from 1975 to 1993.

In January 2001, former President Clinton set aside 58 million

acres of new roadless areas on the national forests. This was adding to an existing 35 million acres of roadless areas in the national

wilderness system that had previously been approved by Congress.

Combined, if the Clinton action stands, congressionally approved

and de facto wilderness areas would now equal 93 million acres, almost half of the total land in the national forest system. This is a

vast amount of land to set aside in such a restrictive land status

that precludes most management actions. Congress should now, I

believe, act to apply the provisions of the Congressional Review Act

to rescind these designations.

There are also procedural failings. Prior to the Clinton designations, local citizens in good faith put in countless hours in learning

about, discussing and debating the land management options for

the nearby national forest lands. The Clinton roadless mandates

amounted to a betrayal of the trust of these citizens in the land use

planning process for national forest decisionmaking.

The Clinton actions also swept aside a longstanding role of the

U.S. Congress. Since the Wilderness Act of 1964, Congress has specifically approved each new permanent wilderness area. The Clinton administration simply bypassed this process to increase the

total effective area of wilderness on the national forest system by

160 percent.

Most management options will automatically be precluded over

the 58 million acres of roadless areas. What may be helpful for the

Congress is to consider some of the many potentially desirable and

even necessary management actions that would now be ruled out

in the future without further consideration.

Despite the appealing public image of protecting nature little

touched by prior human impact, according to the Forest Service’s

own figures, about 50 percent of the newly designated roadless

areas in the lower 48 States actually consist of declining forests in

a moderate state of ill health, ecological deterioration, and fireprone conditions.

The principal reason for their dire condition is the previous century of the Forest Service following an active policy of suppression

of forest fire. By the fall of 2000, the Forest Service had established

priority areas for forest treatments to reduce excess fuels and fire

hazards, including 14 million acres within the Clinton roadless

areas. These treatments will largely be ruled out by the roadless

designations, leaving the West to face greater forest fire hazards,

as seen in the summer of 2000.

The roadless designations will also make it ‘‘harder to fight

wildland fires.’’ When intense and historically unprecedented fires

burn, the Federal Government not only ends up spending huge

amounts of money fighting them, more than $1 billion in 2000, but

also the fires can do significant environmental damages.

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The largest economic values that would be automatically foreclosed by the roadless designations involve future losses in recreational opportunity. If the Clinton actions stand, they will leave

56 percent of the total national forest lands set aside for primitive

recreation, and 44 percent will be available for all the many other

forms of more developed forms of recreation. Yet, activities associated with developed recreationsites are more popular with the

American public and are also the most rapidly growing. Hikers,

hunters, fishermen, snowmobilers, skiers, bird watchers, and many

others, will all face new limits on the ability to expand their recreation opportunities.

A total of 7.6 million acres of land with oil and gas potential are

found within designated roadless areas. According to a recent study

commissioned by the U.S. Department of Energy, a mean estimate

of about 11 trillion cubic feet of natural gas may underlie the designated roadless areas and would largely be lost for exploration

and production.

In summary, as I said, I am not arguing for any particular management in the future for any particular area of land in the national forests. Roadlessness may be appropriate in some places. But

to seek to impose a single national land standard is the central

error of the Clinton actions. These actions try to resolve such matters from Washington, DC. My concern is to maintain our future

management options. Without any adequate justification, the Clinton roadless designations would preclude many important management actions that could offer large benefits to the American people.

The Congress should act promptly to restore an element of common

sense to national forest management.

Mr. OSE. Thank you Dr. Nelson.

[The prepared statement of Mr. Nelson follows:]

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Mr. OSE. Mr. Ory.

Mr. ORY. My name is Raymond Ory and I am vice president of

Baker & O’Brien, an independent consulting firm serving the domestic and international petroleum processing industries.

For more than 26 years, I have consulted to the petroleum industry on matters involving commercial, strategic, and technical

issues. In September 2000, I coauthored a study for the American

Petroleum Institute, assessing the impact of sulfur regulation on

the supply and price of diesel fuels in the United States. The new

regulation was driven by the need for future diesel fuel vehicles

that employ new, emerging low emissions technology. In general

terms, this new law applies to all refiners and importers and requires that sulfur levels in at least 80 percent of the diesel fuel produced for on-road use be 15 parts per million or less by June 1,

2006. This represents a reduction of 97 percent from the currently

mandated levels of 500 parts per million. On May 31, 2010, 100

percent compliance is mandated.

This new law is but one of a number of recent and emerging

rules that will impact the refining industry during this decade.

While each is a cause for concern, collectively they present a formidable challenge for even the most financially capable within the

industry. These regulations give rise to a number of concerns. Refiners will need to make significant capital investments, and compliance will tend to further reduce capacity and invariably strain

the volume of products being produced.

Some refiners will be unable to support the level of defensive investment necessary to comply and will seek to divert product to export markets or withdraw from certain domestic product markets.

In some instances, the financial inability to comply will result in

the company exiting from the refining business.

In forming its rule, the EPA believes that the industry will respond in such a manner as to provide adequate domestic supply,

at a relatively low cost, and with little disruption and little difficulty within the pipeline and distribution systems. While we believe that the industry will, as it always has, engage in investment

and infrastructure change consistent with the law, we also believe

that the cost will be greater, the difficulties more onerous, and a

high potential for supply disruption and price spikes will exist during the transition period. This will be the result of insufficient regional supplies necessary to satisfy demand.

We believe that this new law will have a dramatic consequence

to the overall business of refining, distribution and marketing of

petroleum products in the United States. It is capital-intensive

within the refining structure and will also require investment and

change in much of the national infrastructure, some of which will

be redundant after 2010. The range of capital investments necessitated by the law is arguably between $5 and $8 billion, or between $40 million and $60 million for the average refinery.

In the past year, regions of the United States have experienced

price spikes in gasoline and heating oil, natural gas and electricity.

Despite the impact of such occurrences on the consumer and local

economies, we believe that this is evidence that fundamental economics are at work. When supply is insufficient to satisfy demand

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for any reason, market prices will rise to levels sufficient either to

decrease demand or to attract additional supply.

In the short term, this can represent significant price increases.

I believe that under the provisions of the current rule there is a

high probability that such conditions will exist in the 2006 to 2007

period that could cause regional supply shortfalls and price spikes

in ultra-low sulfur diesel as well as 500 parts per million diesel.

Thank you.

[The prepared statement of Mr. Ory follows:]

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Mr. OSE. I want to thank the witnesses for their testimony. For

the record, I want to enter into the record a memorandum dated

September 25, 2000 from Michael Sipple regarding the blacklisting,

proposed blacklisting rule at that time.

[The information referred to follows:]

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Mr. OSE. I will recognize the gentleman from Idaho for 5 minutes

for questions.

Mr. OTTER. Thank you very much, Mr. Chairman. I would like

to start off by asking Dr. Gramm if the study, the U.S. study that

you referred to relative to the arsenic levels, do you have that report? Is that available?

Dr. GRAMM. I believe that’s available. It was a study of the Mormon population. And it is probably in the record as well. It would

be in EPA’s docket. Would you like me to get it for you?

Mr. OTTER. I would like very much, Mr. Chairman, not only to

have Dr. Gramm provide that for the committee, but also make

that an official part of this committee hearing record.

Mr. OSE. Without objection.

Mr. OTTER. Thank you very much Mr. Chairman.

Dr. Gramm, in the Mercatus Center checklist, will these rules

and regulations make it better off for the people, and is it a good

thing for us to do? Would you run through that checklist—the 7

points right quick for me?

Dr. GRAMM. Yes. And, what we do I’ll show to you. And I have

appended to this record in my testimony a list of all the comments

we’ve done on specific rules so you can look at these checklists.

But, we ask the question, has the agency identified a significant

market failure or a systemic problem? Has the agency identified an

appropriate Federal role? Has the agency examined alternative approaches? Does the agency attempt to maximize net benefits? Does

the proposal have a strong scientific or technical basis? Are the distributional effects clearly understood? And, No. 7, are individual

choices and property impacts understood?

Mr. OTTER. Would you then, Dr. Gramm, using that checklist,

describe for me the school’s—your checklist in grading on the Forest Service’s roadless rule?

Dr. GRAMM. Under whether or not the agency has identified a

significant market failure: we’ve given them an unsatisfactory.

Mr. OTTER. Was that the same as an F?

Dr. GRAMM. As an F, that’s right. As a matter of fact, we have

shifted from verbal—satisfactory, etc.—to just letter grades.

Mr. OTTER. That may be great for elementary school kids but

trust me, Dr. Gramm, we need F’s and A’s in Congress.

Dr. GRAMM. F. F. Unsatisfactory, F.

And has the agency identified appropriate Federal role? C.

Alternative approaches, have they considered alternative approaches? F.

Do they attempt to maximize net benefits? F.

Does the proposal have a strong scientific or technical basis? F.

Are the distributional effects clearly understood? F.

And, are the individual choices and property impacts understood?

F.

And, what we also do is we put a sentence in explaining the

agency approach, and then our comments.

Mr. OTTER. Thank you very much, Dr. Gramm.

I would like to now move to the next witness. Sir, I was particularly interested in your historical review of what has happened

with the Administrative Procedure Act in Congress. And, specifically, I do know that, when Congress entertains to pass a piece of

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legislation, even though this is my first term here, I’m already well

aware of the ‘‘power to enforce clause’’ and I’m sure you know that,

too. But, just to remind us both that we’re both speaking from the

same page, the final clause, the enacting clause says, ‘‘and the director shall promulgate such rules and regulations necessary to

carry out the provisions of this Act.’’ Do we agree that’s the delegation of authority then to the agency

or the Secretary?

Mr. WHITENTON. As I understand what you’re asking, do we

agree with the Constitution? And, yes, of course we would. The

Congress does have the power to delegate. Hopefully—we believe it

also has the obligation to keep track of what the agencies do with

that delegation and to keeping—setting the course right when the

agencies fail.

Mr. OTTER. Yet, in three of the court cases that you mentioned

in your discussion, in your opening statement, that power to enforce clause was in fact absent from two of those, wasn’t it?

Mr. WHITENTON. I’m not sure, sir, what you’re saying.

Mr. OTTER. One of the questions before the court in the 1983

case, wasn’t it whether or not the Congress had delegated its authority to promulgate rules and regulations in that instance?

Mr. WHITENTON. It’s my understanding that Congress had delegated, but it was reserving too much, so therefore it was not delegating properly.

Mr. OTTER. Then it was a question of extent; is that right?

Mr. WHITENTON. Yes, sir.

Mr. OTTER. Would it be the only way for Congress to regain its

proper role to not put that clause in?

Mr. WHITENTON. To not put the one-House veto in?

Mr. OTTER. No, to not put the power to enforce clause in that

suggests that the Secretary or the department shall promulgate

such rules and regulations necessary to carry out the provisions of

the act?

Mr. WHITENTON. We certainly believe that the proper approach

would be for Congress to take a much tighter view on what it delegates in the first place so we do not get into the problem, and be

a little more specific and be much more reluctant to give the power

to agencies, and give more guidance to the agencies in the promulgation of rules.

Mr. OTTER. Thank you very much.

Dr. Nelson, in your testimony you suggested that not only was

the Clinton administration, as we have suggested, in a rush to regulate and a rush to judgment, would, in your estimation of environmental studies, the roadless rule do more harm than good or more

good than harm?

Dr. NELSON. I think it would be more damaging. Environmentally it would be more damaging on the whole. Basically it precludes taking a whole host of actions that could be environmentally

beneficial. As I mentioned, the Clinton administration and the Forest Service had developed plans for fuels treatments on Western

national forests because of the stressed, diseased condition of these

forests. Many of them are fire-prone and unhealthy, they include

about a third of the roadless areas in the lower 48 designated by

the Clinton roadless rule. Those would be largely precluded from

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future management. So those areas would then be left in their current unhealthy and fire-prone condition. If fires break out, as we’ve

seen, and especially in the current highly overstocked condition of

Western forests, they can do a lot of environmental damage as well

as threaten lives and property, and cost $1 billion for the Federal

Government to try to suppress.

Mr. OTTER. I thank you very much, Doctor. Thank you, Mr.

Chairman.

Mr. OSE. We’ll have another round if you have additional questions.

Dr. Nelson, I represent a district that has significant forests in

and around it, and the people who live in my district use the forests for recreation, vacation time, family time and the like. The

thing I’m curious about is that, in addition to the environmental

benefits, the roadless rule seeks to preserve recreation values

which would be very important to the people in my district.

The question I have is—I actually have a couple of questions.

Does the rule, as crafted, maximize the recreation opportunities

within our national forests or does it favor certain types of recreation over others or certain recreation users over others?

Dr. NELSON. Well, I think it clearly favors what we might call

the 20-year-old backpacker or anyone else who has the energy to

hike 10 or 20 miles at a time and is interested in camping in the

back country. It definitely is going to impede the future opportunities to expand recreation for a host of other kinds of people—hunters, fishermen, snowmobilers, ordinary hikers who may want to

walk 3 miles, as is more the style of the average person, 3 miles

in and 3 miles out. That doesn’t get you very far into a lot of wilderness areas.

As I mentioned, 56 percent of the total national forest lands

would now be left in a status basically suited for primitive recreation. Primitive recreation is a relatively small part of the total recreational base. There were something over 90 million picnickers in

the national forests in 1994 and 1995, and about 15 million backpackers. And, there were similar results in all the other numbers

that you look at. The use of developed recreationsites is vastly

greater than the levels of primitive recreation on the national forests.

Mr. OSE. Before we leave that point, you’re suggesting that the

use by general recreation is 6 times that, at least by your numbers,

the 90 and the 15 of primitive recreation users?

Dr. NELSON. I was actually saying picnickers. But yes, I think

that’s reasonable. There are other areas of more intensive recreational activity which have numbers approaching 100 million per

year. As I say, backpackers are the more primitive forms of recreation—you might be looking at 10, 20 million per year.

Mr. OSE. Let me ask this question very directly, then. To the extent that we have a roadless policy, it’s your opinion there will be

certain areas that will then be off limits to the picnickers or general recreational users just by the nature of having no ability to get

there?

Dr. NELSON. Basically people drive to get at least within a reasonably short distance to get to these areas. Ninety percent of the

use of forest service roads right now is for recreational purposes.

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Now, of course, where you have the existing road network, that is

still going to be there. So what we’re talking about is roadless

areas which hold the opportunities for expanded future recreation

use to meet increasing recreation demands on the part of the

American public. Especially if you look at the areas where recreation demands are increasing most rapidly, it’s for the developed

forms of recreation. Unfortunately, some of the baby-boomers and

so forth are getting older and don’t want to walk as far.

Mr. OSE. It happens.

Dr. NELSON. It also turns out that if you start looking at the statistics, it’s quite interesting. Minority groups—Blacks, Hispanics,

and so forth—have quite strong preferences for developed recreation relative to these primitive forms of recreations. Actually,

primitive forms of recreation are the particular domain of collegeeducated, relatively wealthier portions of the population.

Mr. OSE. So you have been able to draw a connection between

the availability of some of these roadless areas and the ability of

some of our lower-income or other groups to access recreational

lands?

Dr. NELSON. As part of my preparation for this testimony, I did

look fairly exhaustively at the Forest Service’s own environmental

study. And it’s quite clear about these matters. So I’m not simply

basing it on my opinion, I’m using the existing documented record

prepared by the Forest Service.

Mr. OSE. My time has expired.

Mr. Otter for 5 minutes.

Mr. OTTER. Thank you, Mr. Chairman. I would like to go back

to the question with Mr. Ory on the diesel fuel. During your testimony you referred to a shortage of diesel fuel. Does your study attempt to discuss or figure out how much of a shortage there is

going to be?

Mr. ORY. The study that we conducted was, as I indicated, really

as an assessment of the notice of proposed rulemaking. And it was

conducted in September, approximately September of last year.

And given those criteria and the provisions of the notice, the shortage was approximately 15 percent nationally.

There were certain regions of the country that were more exposed than others; in particular, the mountain States.

Mr. OTTER. How much was the shortage going to be in the mountain States, in the Pacific Northwest?

Mr. ORY. I don’t remember the numbers specifically, but higher;

30 percent, 25 or 30 percent.

Mr. OTTER. My sources tell me that 37 percent is probably pretty

close. So I would be willing to halve that with you and go with 34

percent if that’s all right with you.

Mr. ORY. You have my permission.

Mr. OTTER. What in your estimation would that do to the price?

Mr. ORY. Well, I think we have a very valid example of what

those kinds of shortages or conditions, I should say, can do to price.

And, looking at the situation in California on incremental power

costs and natural gas, and certainly looking at some of the regional

shortages that occurred in the upper Midwest in the middle of last

year, in the summer of last year, and there is expectation that a

similar condition will occur in the summer of this year, the price

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can go as high as it takes to do one of two things: to either discourage demand, or to cause very expensive increments of supply to

occur.

Mr. OTTER. What was your estimate that the shortage was going

to be in California?

Mr. ORY. From an ultra-low sulfur diesel standpoint, the State

of California is actually balanced. We didn’t see a particular condition existing in that part of the country. And, the reason for that

is that the State of California has already spent their big dollars

in reaching their so-called carb diesel rule back in 1995, so they

have to spend incremental dollars to only take out the sulfur. So

they will be the least affected. We didn’t foresee any shortage

there.

Mr. OTTER. And, those trucks that would be bringing products

and services, products into the U.S. economy, say, from Mexico and

from Canada, would they have that—the same impairment on their

use of diesel?

Mr. ORY. No, not to my knowledge.

Mr. OTTER. Only for the diesel that they purchased while they

were in the United States?

Mr. ORY. That’s correct.

Mr. OTTER. And, also, Mr. Ory, the use of nonroad diesel, did you

make—did your study include nonroad uses?

Mr. ORY. No, it didn’t. That’s an issue yet to be decided, I understand, by the EPA.

Mr. OTTER. OK. So, we could have the trucks that are actually

taking the gas to market that would be regulated, and they’re moving around, so there’s a certain displacement of their ‘‘pollutants,’’ right?

Mr. ORY. That’s right.

Mr. OTTER. Yet the energy-producing, the electrical-producing

generator that may be sitting just off my backyard, which would

be sitting in one place and not going anywhere, its pollution could

be concentrated just in that area. So, we have one area that is

being regulated and another not.

Mr. ORY. That’s correct. Diesel in stationary uses or off-road

uses, as the definition may be, has yet to be regulated.

Mr. OTTER. Does your study divide up the quantity use between

the two? What percentage is used that would be regulated and

what percentage not?

Mr. ORY. When we look at—and not to get overly technical

here—of the fuel that goes into combustion engines, let’s say of any

type and nature, some of which are in heavy trucks, we’re all familiar with those. Those are called on-road uses, and they represent

approximately 55, 56 percent of that part of the petroleum barrel

that is generically called distillate fuel oils. Approximately another

30 percent to 35 percent is off-road uses, and the rest is heating

oil.

Mr. OTTER. One last question, Mr. Chairman, 45 percent then is

not regulated?

Mr. ORY. That’s correct.

Mr. OTTER. Thank you very much.

Mr. OSE. I want to come back to Dr. Nelson, if I could. The Forest Service put out an environmental document on the roadless polVerDate 11-MAY-2000 09:20 Apr 17, 2002 Jkt 000000 PO 00000 Frm 00092 Fmt 6633 Sfmt 6633 C:\DOCS\75850.TXT HGOVREF1 PsN: HGOVREF1
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icy. I mean, they’re required to do that. They released it in November 2000. If I understand your written testimony on page 2, the actual document that the Forest Service put out in the form of the

final EIS noted a change in the procedure by which the Forest

Service promulgated this rule. That is, they went away from a historical collaborative approach toward one that was almost topdown, if you will. Could you expand on that, please?

Dr. NELSON. Well, the Forest Service, based on a mandate from

the Congress which goes back to the National Forest Management

Act of 1976, is directed to, and in fact has been preparing land use

plans for each national forest. These land use plans are a continuing process. It involves extensive local involvement of the citizenry.

The people who are requested to participate in this process do so

with the expectation that the land use planning process is, in fact,

going to govern the future uses, as the Congress seemingly directed, of the lands in these particular national forests.

Essentially this Clinton roadless process bypassed and superseded that land use planning process in which local people had invested their time, their energy, and their trust. And, so in that

sense, I believe that there may even be some legal questions raised,

but certainly it was a violation of the trust that the citizens had

put in the Forest Service. The expectations had been created by the

Forest Service that land use planning would drive the outcomes on

these forests.

Instead, now a third of the national forest system, a national dictate from Washington, DC, superseded all that land use planning

effort.

Mr. OSE. I think the operative thing I would like to emphasize,

I’d like to repeat it for the record, is on page 2 of your testimony

you cite the Forest Service’s final EIS, ‘‘The roadless rule contradicts the past emphasis placed on collaboration, and instead reflects a strategy of maximizing national prohibitions on the use of

National Forest lands,’’ which is exactly what you’ve just said. So

I appreciate your highlighting that in your testimony.

Now, Mr. Whitenton on page 2 of your testimony, in the—let’s

see, 1, 2, 3, 4, 5, 6, 7th line from the bottom, I don’t quite understand something. Where you’re talking about the U.S. Court of Appeals of the D.C. Circuit vacating the EPA interpretive guidance as

unenforceable. Is there a word left out there? Shouldn’t it have the

word—between ‘‘had’’ and ‘‘legal,’’ shouldn’t the word ‘‘no’’ legal

force and effect be in there?

Mr. WHITENTON. That is certainly correct. Yes, sir.

Mr. OSE. OK. I struggled with that last night.

Finally, I want to ask Dr. Gramm a couple questions on the

blacklisting. As I understand the blacklisting rule—we worked on

this last session of Congress—there is a duty or an option on the

part of the contracting officer to entertain allegations of behavior

that might not comply with someone’s standards, and that those allegations can be used as rationale for disqualification of a bidder.

Am I correct on that?

Dr. GRAMM. That is correct. Indeed, if there is a complaint

brought by an administrative agency, that could immediately cause

you to be blacklisted, even before you’ve provided evidence to the

contrary or allowed a hearing.

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Mr. OSE. Why would—I mean, in a sense that’s almost being

judged guilty before you’re proven innocent, which is seemingly a

little bit backward.

Dr. GRAMM. I believe you have it right, because it does shift the

burden of proof.

Mr. OSE. To the potential contractor.

Dr. GRAMM. That’s correct. To prove himself innocent if a complaint is brought, but before he goes through the proceedings. And,

indeed, and again, this is a regulation we actually did not do a

large public interest comment on, but it was a regulation we focused on during the midnight period. And, there are some procedural issues. For example, it appears that this authority that might

have been delegated, for example, to the National Labor Relations

Board on some labor issues or differences that might come up. In

fact the blacklisting rule would abrogate and supersede what Congress had given to the National Labor Relations Board and those

procedures.

Mr. OSE. My time has expired. I may come back to this with you.

The gentleman from Massachusetts.

The gentleman from Idaho for 5 minutes.

Mr. OTTER. Thank you once again, Mr. Chairman. I would like

to go now back to Dr. Nelson relative to the study that was made

by the Forest Service. In the reports on the roadless area, the Forest Service said that they had received 1.1 million comments.

Would you agree—is that what the study said?

Dr. NELSON. I believe that’s correct, something of that magnitude.

Mr. OTTER. Do you feel like the citizens of the United States, the

citizens of the affected areas, had an adequate opportunity to testify?

Dr. NELSON. I think that they were given adequate opportunity

to comment on the roadless rule. But, the end result was always

going to be this single national determination. And, I believe also

that the Forest Service, as in fact it has documented in its own materials, ran into many strenuous objections in its planning and its

hearings and the consultation process that it engaged in. But, yes,

it did give people quite a bit of opportunity to comment.

Mr. OTTER. The actual scoping process was 120 days, was it not?

Dr. NELSON. I believe so. I’m not sure.

Mr. OTTER. We had 1.1 million comments that they took 120

days to gather and then analyze. So, roughly, you wouldn’t have

any idea would you, Doctor, how many people were involved in this

process?

Dr. NELSON. I really—no, I don’t know. But they did issue it as

a draft and then it was another 5 months from the draft to the

final.

Mr. OTTER. During that time period, there should have been

some analysis of the input that was made during the scope of the

hearings.

Dr. NELSON. You would assume so.

Mr. OTTER. And, try to reflect that.

Dr. NELSON. Yes.

Mr. OTTER. By my calculations, if we took that entire time for

the analysis, it would have taken about 8,000 comments per day

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or roughly 1,000 analyses per hour in order to—by however many

people were involved—in order to come up with the final result

and, if that final result was truly going to represent the input that

was received during that scoping hearing. Would you agree with

that?

Dr. NELSON. Yes, I’m sure that they had a huge volume of material to deal with, there is no doubt about that.

Mr. OTTER. As a professor of environmental studies, what would

you instruct to your students during their process of trying to arrive at a proper program or, let’s say, a proper rule in the future?

Would you suggest that they could take and analyze 8,000 comments a day and, in the process, come out with a rule which would

be representative of what was necessary? Or—— Dr. NELSON. Well, I’m sure that the Forest Service found that

there were certain common themes through a lot of these comments. So, although they did receive a million, there obviously

weren’t a million separate issues. I do think, however, that there

was a great deal of selection, especially in the selection of the alternatives for the final environmental statement, which were very

narrowly construed. There were four alternatives. Three of them

were all versions of the roadless policy and the other one was no

action.

There were a host of other possibilities that could have been

raised, and not only could have but should have been raised. They

include various forest fuels treatment alternatives, different forms

of timber harvesting, different forms of use of roads. I don’t know

whether it was specifically due to their failure to take account of

the comments. It probably was to some extent, but whatever the

explanation, I would definitely fault the Forest Service for a failure

to consider an adequate range of alternatives.

However, I would say that, despite all the failures, if you actually

read the EIS document rather closely and you discount for some of

the rhetorical flourishes that are there because the administration

is obviously defending its own policy, I believe the document actually makes a rather strong case against this policy. So, I have tried

in my written testimony to show some of the reasons why, if you

actually read the document, I think a fair-minded reader could only

come away with a conclusion that this is a significant mistake to

pursue this roadless policy in the manner proposed.

Mr. OTTER. Thank you very much, Mr. Nelson.

Mr. WHITENTON. Mr. Chairman, I want to apologize. When you

asked me the question about whether the word ‘‘not’’ should be inserted on page 2, I do want to explain that it was accurately, if

inartfully drafted, as written. The court in Appalachia Power v.

EPA had vacated the EPA guidance because it had forced an effect

of law and because they hadn’t followed APA procedures. If the

EPA had followed the proper rulemaking procedures, then the

court would not have vacated the guidance.

Mr. OSE. I understand your point. It was inartfully read also, so

I want to make that clear. I appreciate the clarification.

Dr. Gramm, if I might, I want to go back to the blacklisting

issue. We talked a few moments ago about allegations being disqualifiers if the contracting officer found them sufficient. The concern I have is the compounding effect of that. If we had a contracVerDate 11-MAY-2000 09:20 Apr 17, 2002 Jkt 000000 PO 00000 Frm 00095 Fmt 6633 Sfmt 6633 C:\DOCS\75850.TXT HGOVREF1 PsN: HGOVREF1
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tor who is in front or before the government seeking to provide a

service, allegations surface that its behavior or its standards are

unacceptable to some third party, how do you ever stop or resolve

such a process?

Dr. GRAMM. I think that’s the very great difficulty. You could inflict great harm for what may be a complaint for which there isn’t

strong evidence—that that complaint should go forward. And, this

would supersede and abrogate a number of the formal procedures

and safeguards that are already in place to deal with those kinds

of complaints. For this reason the members of that FARC council

have opposed this particular regulation.

Mr. OSE. So the FARC council itself opposed the regulation?

Dr. GRAMM. That’s right. General Services Administration, the

Environmental Protection Agency, NASA, and the Defense Acquisition Regulation Council oppose the regulation. The FARC council

that proposed the regulations included some of these members,

DOD, GSA and NASA, but yet the members also oppose the regulation.

Mr. OSE. All right.

Dr. GRAMM. If I could raise another issue on some of the

issues——

Mr. OSE. If I may, I do want to go back to an earlier part of your

testimony. You offered testimony about the grades on some of the

rules in terms of compliance with standards or procedures. Would

you be willing to submit for the record the grades that you have

with you for the various rules that are the subject of our concerns?

Dr. GRAMM. Yes. As a matter of fact, I would like to include the

whole public interest comment, when we have a written public interest comment, which will be more amplified.

Mr. OSE. Without objection, we will accept that.

So go ahead.

Dr. GRAMM. May I raise a few issues that have been raised on

some of the other issues? I rather rushed through my oral statement, trying to keep under the time. But, on the roadless rule, I

by and large agree with what Dr. Nelson has said, and I raise one

question. I believe that in the proposed rule the Forest Service was

going to exclude Tongass, but in the final rule they included

Tongass, and that is a very major change that perhaps should have

gone out for further comment.

On TMDLs, which Mr. Whitenton has discussed, I wanted to say

that EPA’s approach to water quality management in the TMDL

rule would attempt to address water bodies that are not meeting

standards, but its approach is very procedural, very prescriptive,

and would create a program for water that is much like the State

implementation program that we have for air. And I would argue

that has some severe issues especially as it relates to unfunded

mandates.

With regard to the diesel rule, which we again have information

that I didn’t go into here, I would point out that the diesel rule

aims at reducing the amounts of emissions, but, in fact, most of the

areas are already in compliance with the Clean Air Act. So, you

have all these costs imposed in areas where they are already in

compliance with the Clean Air Act.

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Finally, on energy efficiency standards, which I rushed quickly

through, I would point out that the air-conditioning and the heating efficiency standards would particularly adversely affect consumers in the Pacific Northwest and other areas where they do not

use these machines as much as what the Department of Energy

has assumed.

Mr. OSE. Thank you. I want to thank our witnesses, Dr. Gramm,

Mr. Whitenton, Dr. Nelson, Mr. Ory, for joining us this morning.

I appreciate your testimony.

Dr. GRAMM. Thank you.

Mr. OSE. We will now ask the second panel to join us. That

would be Terry Gestrin, Evan Hayes, Sharon Buccino, and Thomas

McGarity, please.

As with the first panel, I would ask these witnesses please rise

to be sworn in.

[Witnesses sworn.]

Mr. OSE. Let the record show the witnesses answered in the affirmative. I would like to recognize the gentleman from Massachusetts for the purposes of an opening statement.

Mr. TIERNEY. Thank you, Mr. Chairman. I apologize for making

this statement at this point in time but one of our deregulated

agencies, the airlines, doesn’t seem to do its job very well these

days and we were delayed considerably getting in.

Mr. Chairman, I thank you for holding this hearing and I have

no objection to you having discussion and conversation about

whether or not the Clinton administration rushed through regulations before going through necessary checks and balances. However, I think we also have to look at the actions taken by the Bush

administration and Congress in its recent rush to deregulate.

Near the end of the Clinton administration, many important environmental, labor, and health protections were issued. Many were

the result of years of thorough analysis of numerous scientific and

economic studies and volumes of public comment. For instance, Mr.

Chairman, before issuing the rule that protects inventories of

roadless areas in our national forests from roads and logging, the

Clinton administration received a recordbreaking 1.6 million comments; 95 percent of those comments urged the adoption of stronger protection for roadless areas. The Forest Service also held over

600 public meetings where it heard from the communities that

would be directly affected by the rule.

Congress held a number of hearings on this rule and 165 Members of Congress wrote a letter asking that roadless areas be protected from roads for logging and mining. There are opponents to

the roadless rule, as you would expect from any regulation. However, I don’t see how they can claim that this was rushed when it

was issued or it was issued without adequate public participation.

In another instance, the EPA issued its new stricter standard for

arsenic in drinking water. Under the old standard, the National

Academy of Sciences estimated that 1 out of 100 people would get

bladder, lung, skin, kidney, or liver cancer. This risk is about

100,000 times greater than the cancer risk that we allow for food.

It was long past time to update the standard and, in fact, Congress should have required the revision of the standard over 25

years ago. The EPA issued a proposed Rule 18 years ago, and again

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in June 2000. After reviewing over 1,000 comments and numerous

scientific and economic analyses, the EPA issued its final rule.

Again, the public had plenty of opportunity to express its views and

any rush was the result of congressional mandates.

Similarly, rules protecting the confidentiality of our medical

records, setting new emission limits for diesel trucks and buses,

and ensuring that lawbreakers are not rewarded with Federal contracts were the result of a lengthy, thorough public process. They

are not ‘‘midnight regulations’’ that were rushed through the process without public input or thorough review of scientific and economic studies.

However, the same cannot be said for the actions recently taken

for those opposed to rules. In its rush to undermine the roadless

rule, the arsenic standard, and the contractor responsibility rule,

the Bush administration has suspended these rules without giving

the public notice and an opportunity to comment on suspension.

And, as some witnesses will explain, these suspensions may well

have been illegal.

I am also concerned about the use of the Congressional Review

Act to disapprove these labor, environmental and health protections. The procedures for disapproval leave very little opportunity

for debating these issues. When Congress disapproved the

ergonomics rule, debate in the House and Senate combined was

limited to 12 hours, only 2 of those in the House, with little or any

notice given to the public to share their concerns about disapproval.

It would be unfair to the public to undo the final result of a thorough public process in such a rushed manner.

Furthermore, congressional disapproval is a harsh remedy that

severely limits the opportunity to enact a similar rule in the future.

Thus, we ought to take great care in deciding to use this drastic

measure to undo rules that were enacted pursuant to a thorough

public process.

Mr. Chairman, there are very serious questions behind the current rush to deregulate. Sunday’s Washington Post indicated that

the coal industry, which has provided over $12 million to Republicans, is the primary beneficiary of many of the proposed revisions

and repeals. The new arsenic standard makes it harder for mining

companies to pollute our drinking water. The roadless rule would

make it more difficult for the mining industry to destroy pristine

areas in our national forests. And another threatened rule

strengthens environmental protections applicable to the mining industry and makes it harder for the mining industry to escape liability for environmental violations.

All of these rules have been targeted for repeal by the Bush administration and the Republican Majority in Congress. The Post article entitled, ‘‘Coal Scores With Wager on Bush,’’ reports that ‘‘Few

businesses placed as big a bet on the Republicans in the last election as the coal industry which gave 88 cents out of every dollar

in campaign contributions to GOP candidates or organizations. Two

months into the Bush Administration, that wager has begun to pay

off.’’

The article lists the close connection between coal lobbyists and

the administration. It reports ‘‘Among them were Irl Engelhardt,

chairman of the Peabody Group, the Nation’s largest coal enterVerDate 11-MAY-2000 09:20 Apr 17, 2002 Jkt 000000 PO 00000 Frm 00098 Fmt 6633 Sfmt 6633 C:\DOCS\75850.TXT HGOVREF1 PsN: HGOVREF1
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prise, whose holding company contributed $250,000 to the Republican National Committee in July. Engelhardt himself served as an

energy advisor to the Bush-Cheney transition team. The Bush-Cheney transition team was sprinkled with industry officials.’’ The article also reports, ‘‘The coal industry may enjoy even better

connections in Congress.’’ I ask unanimous consent, Mr. Chairman,

that this article and other materials relevant to the hearing be included for the record.

Mr. OSE. Without objection.

Mr. TIERNEY. Thank you. Mr. Chairman, there are a lot of concerns regarding the rush to deregulate. I share your concern that

Presidents and Congress may rush regulatory decisions without

going through the public rulemaking process with its important

checks and balances. Implementation, repeals, suspensions, and

other modifications of rules are important decisions that should not

be taken lightly. I look forward to hearing from the witnesses on

these issues. Thank you.

Mr. OSE. I thank the gentleman.

I would like to call Mr. Otter to introduce some folks.

Mr. OTTER. Thank you Mr. Chairman. I bring before the committee this morning the chairman of the Valley County, ID County

Commissioners, Mr. Terry Gestrin, who will talk to us this morning

about the effects of this rush to regulate in terms of locking up 9.7

million acres in Idaho alone for roadless use.

I also at this time, Mr. Chairman, would like to invite my old

friend, Evan Hayes, who will be here to talk to us about the diesel

and the low sulphur diesel ruling by the EPA. Mr. Hayes does represent the National Association of Wheat Growers, and Mr. Hayes

and I have served on many committees in the State of Idaho. I can

tell you this is a gentleman that has been working at ground zero

for most of these regulations. I welcome both of you to the U.S.

Congress.

Mr. OSE. Thank you, Mr. Otter. I want to welcome all the witnesses and please confine your summary of your remarks to 5 minutes so we can have the questions accordingly. Mr. Gestrin.

STATEMENTS OF TERRY E. GESTRIN, CHAIRMAN, VALLEY

COUNTY COMMISSIONERS, CASCADE, ID; EVAN HAYES,

WHEAT FARMER, AMERICAN FALLS, ID, REPRESENTING THE

NATIONAL ASSOCIATION OF WHEAT GROWERS; SHARON

BUCCINO, SENIOR ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL; AND THOMAS O. McGARITY, W. JAMES

KORNZER CHAIR, UNIVERSITY OF TEXAS SCHOOL OF LAW

Mr. GESTRIN. Thank you, Mr. Chairman. I appreciate the invitation to testify today. Outside of Tongass, with over 9 million acres

of roadless areas, Idaho will suffer the greatest impact. Of the 44

counties in Idaho, it appears that Valley County is the most affected county in the Nation. This is hard to determine because we

were never supplied with definitive maps to tell us exactly where

these acreages are. Valley County has a little over 2.2 million

acres; 88 percent of that, or over 2 million acres, is Federal public

lands. Our static population in our county is 8,000 people. It swells

to over 30,000 in the summer. Most of these people come to recreate on national forest lands.

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The roadless initiative will affect that. The Payette National Forest, with over 2.3 million acres, and the Boise National Forest, with

almost the same acreage, comprise the majority of the forestlands

located in Valley County. Between the wilderness and the new

roadless area management program, we are left with only 17 percent of the Payette and 27 percent of the Boise National Forest

available for active management. Valley County recently had an

economic study completed by the University of Idaho, which I

would also like to enter into the record today.

Mr. OSE. Without objection.

Mr. GESTRIN. This shows the effect of losing the timber industry

brought about by many, many regulations of which the roadless

initiative is just a last nail in our coffin. Direct loss by the loss of

our sawmill creates an economic loss of $27 million, with over 225

front-line jobs potentially at stake. Combine this with secondary

jobs, the loss of economy to Valley County alone is over $43 million,

according to the University of Idaho study.

I would suggest, if we are going to promote economic development, we would want to make policies or promote activities with

local benefits. Our local school district with an enrollment of about

400 students in Cascade is going to lose 75 children whose parents

are going to be without work come June when the sawmill closes.

The superintendent of that district estimates its economic loss to

the school in hard dollars of $200,000.

We are facing the worst forest health crisis in history. It is inconceivable to me that we could even consider implementing a roadless

initiative in its present form; 67 million acres of national forest is

classified by the Forest Service as high to moderate-risk to catastrophic fire, insect infestation and disease. Last year, more than

7 million acres of public lands burned to the ground in the worst

fire season in 90 years. I assure you that we’ve had the mildest

winter in 40 years. With current tests by the Forest Service indicating the timber is at about 14 percent moisture content. So look

out, folks, we are facing the worst-case scenario of burning what

hasn’t burned.

Incidentally, I understand that kiln-dried lumber is between 12

to 16 percent moisture.

We need to engage in policies that allow local management, not

adding another strand of barbed wire to the existing fence created

by regulations that eliminate the ability to manage our natural resources.

I have talked on some of the economic impacts. Time restraints

will limit my comments on social impacts, but there are many.

Could you imagine for a moment telling your spouse and children

when you come home with the news that you don’t have a job, your

way of life is in imminent danger? Divorce rates are going to increase, spousal abuse, child abuse, and all the other things that go

with that.

We are losing our rural and national resource heritage. I would

like to comment on what I understood our NEPA process guaranteed for us. NEPA to me meant that we are guaranteed a true and

meaningful process to provide public comment that will be given

due consideration prior to the decision being made. The Interior

Columbia Region Basin project has taken in excess of 6 years for

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the NEPA process and a Record of Decision is yet to be made. This

project is only for one watershed in the West. It’s a huge watershed, by the way. Now we are expected to have this decision on the

roadless initiative, and this was completed in 1 year and 3 months.

I realize that NEPA does not guarantee a good decision but it

certainly is intended to guarantee a good process.

I’ll sum up with one statement. In 1887, the Purpose of National

Forests was enacted to improve and protect the forest within the

boundaries, or for the purpose of securing favorable conditions of

water flows and to furnish a continuous supply of timber for the

use and necessities of the citizens of the United States.

In conclusion, I would ask that we’re not fenced out. Local government needs to be involved in the decisionmaking process which

will ultimately lead to the improvement of our local forest health,

economy, and social health of our own local communities. Please realize that the best decisions that can possibly be made are at the

local level. This ensures that accountability is at the highest level.

Thank you Mr. Chairman.

Mr. OSE. Thank you Mr. Gestrin.

[The prepared statement of Mr. Gestrin follows:]

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Mr. OSE. Mr. Hayes.

Mr. HAYES. Mr. Chairman, Ranking Member—— Mr. OSE. Pull that mic next to you.

Mr. HAYES. Mr. Chairman, Ranking Member, Congressman

Otter, thank you for your kind words. Congressman Otter has been

an extremely good friend to us—— Mr. OSE. Mr. Hayes, is that microphone turned on?

Mr. HAYES. Is that better?

I will just start over again so we can do it right.

Mr. Chairman, Ranking Member, sorry about not knowing how

to run the microphone. I am just a farmer. Congressman Otter,

thank you for your kind words. I want you all to know that Congressman Otter has been an extremely good friend to us in Idaho

as Lieutenant Governor and as a Congressman. We are tickled to

death to have him back here to represent our great State.

Today, I would like to visit with you just for a few moments

about the diesel fuel regulations and the possibilities or the effects

it would have on agriculture. Let me begin and tell you a little

story about a farmer. This was a story that President Kennedy told

years ago. He talked about our ability to market as farmers. He

said, you know, farmers are a rare group. He said, they buy retail,

sell wholesale, and pay the transportation both ways.

That’s what we are folks. We are extremely poor marketers. But

we are a very unique group of marketers because of the fact that

we do not go to the marketplace and say, we want X dollars for our

product. We go to the marketplace and say, how much money will

you give us for our product? This makes us completely different

than the rest of the economy. And so this regulation is going to affect us considerably differently because we don’t have the option to

add fuel surcharges and things of this nature.

Supply and demand is a tremendous item for us in agriculture.

Last year, I got a real shock. I was hauling malting barley to Idaho

Falls, 125 mile haul. As the so-called shortage on oil became more

apparent and the concerns of a shortage of oil, we saw our diesel

fuel prices skyrocket. What a sticker shock it is when you put the

nozzle in your tank and fill the tank on your truck that holds 200

gallons of fuel. You turn around and you look at the pump and it

says you owe them $400. That is 50 cents a mile, because we run

it 4 miles to the gallon in the mountains of Idaho. That is a real

sticker shock to you.

We need to really take a long look at this new EPA regulation

on how much money this is going to cost us. How much money is

it going to cost us to run our tractors and trucks. Can we afford

to do that?

Agriculture has the largest trucking fleet in the world. Now,

farmers didn’t become farmers because they wanted to become

truckers. Farmers owned trucks because they are a mandatory part

of our operation. We have to be able to take fertilizer, fuel, grain,

etc., to our drills in the spring of the year. Then we have to be able

to at harvest time take our commodity from the combine to our

first part of storage, or to our bins. Then it comes marketing time.

We have to be able to haul this product on to the market. We don’t

do this because we like to be truckers. We do this because it’s necessary for our farm use. Now, we can’t afford to run new trucks,

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so, therefore, we buy used over-the-road trucks. Currently, I own

one that I consider to be a road truck. It’s a 1984 Peterbilt which

I bought for $9,000. I have run this truck in the 9 or 10 years that

I have owned it about 70,000 miles. So, in other words, I’m running

this truck at about 7,000 miles a year.

Now, under the new regulations, if I understand them correctly,

by 2006, 50 percent of these trucks are going to have to meet the

new emissions standards, and by 2010 we are all going to have to

meet the emissions standards. This means we’re either going to

have to retrofit our engines, replace our engines, or buy new

trucks. Now, it doesn’t make a lot of sense to me to put a $10,000 or $15,000 engine to meet the emissions standards in a $10,000

truck. Somehow that just doesn’t balance in my baseline. Also it

doesn’t balance in my books to pay $80,000 for a new truck to haul

a commodity that I run 7,000 miles a year.

The next item I need to discuss with you is our tractor fleet. Our

tractor fleet, as you know, is also the largest tractor fleet in the

world. Presently, I am running a tractor on my farm that my father purchased in 1960 when I was a freshman at Idaho State University. I am still using that tractor. We have to maintain our tractors. We have to make sure that we run them as long as we possibly can.

My concerns under the new diesel fuel regulation is that can we

burn the fuel in these old tractors? If we can’t burn this new fuel— and I am not sure we can because I am only being speculative on

this—but can we burn this fuel? If we can’t, we will have some awfully expensive mailbox holders out there. That’s the only thing we

will be able to use these tractors for is to hang our mailbox on

them, because we’re certainly not going to be able to use them in

the farm.

Mr. OSE. Mr. Hayes you will have to wrap up.

Mr. HAYES. I will.

Mr. OSE. We will give you 30 seconds to wrap up.

Mr. HAYES. Thirty seconds to wrap up. I would recommend that

the committee do one thing as quickly as possible, that is that this

committee introduce legislation under the Congressional Review

Act to repeal the recent diesel fuel emissions standard by the EPA

and then to rework these standards to something that will protect

the environment and at the same time be economically feasible for

us in agriculture.

Thank you, Mr. Chairman. I will stand for questions.

Mr. OSE. Thank you Mr. Hayes.

[The prepared statement of Mr. Hayes follows:]

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Mr. OSE. I now have the pleasure of introducing Mrs. Sharon

Buccino who is a senior attorney for Natural Resources Defense

Council. I want to welcome you. I appreciate you for forwarding

your testimony. I did have the pleasure of reading it last night and

it was quite informative. So, if you can summarize, thank you.

Ms. BUCCINO. Good morning. My name is Sharon Buccino. I am

a senior attorney at the Natural Resources Defense Council.

Mr. OSE. Can you move that closer?

Ms. BUCCINO. NRDC is a national membership organization.

NRDC is a nonprofit organization with over 400,000 members

across the country. NRDC members value the public health, safety

and environmental protections put in place by Federal agencies,

such as the Environmental Protection Agency.

The protections issued in the last few months of the Clinton administration have been attacked by some, but this regulatory activity is neither unique to the previous administration nor cause for

dramatic reversal by the current one or Congress. The protections

that have come under attack, like the plan to protect the few remaining wild areas in our national forests and efforts to reduce

cancer-causing arsenic in our drinking water, promise to deliver

tremendous benefits to the American public. They enjoy broad public support and, in some cases, have explicitly been mandated by

Congress. These protections are the law of the land and should be

expeditiously implemented, not delayed or rescinded.

The allegation that these protections were rushed through at the

last minute and lacked substantial support is completely indefensible. The protections are all the product of a lengthy, deliberative,

public process, a process established by law pursuant to the Administrative Procedure Act. Those who wish to change the important

public protections recently enacted should engage in the same deliberative process rather than circumvent the process through the

Congressional Review Act or suspending the effective dates of the

rules.

I would like to address four of the specific environmental protections that have come under attack. First, the plan to protect our

remaining wild forests. It is simply incorrect to characterize this

rule as a ‘‘midnight regulation’’ rushed through at the last minute.

The public input that went into the development of this forest protection plan is perhaps the most of any rulemaking effort ever.

I would also like to address the issue that was raised by one of

the earlier witnesses about access. This plan protects the last and

best of America’s rapidly shrinking pristine forests for public access

and recreation, including hiking, hunting and fishing. It is incorrect to equate these areas with wilderness designation. The main

characteristic of wilderness areas is a prohibition on motorized use.

And motorized use like snowmobiles, all-terrain vehicles, are allowed in roadless areas so they are very different from wilderness

areas.

Far from excluding timber companies from our national forests,

the plan simply channels industrial uses to more than half of our

national forests that have already been impacted by logging and

other extractive industries.

I would also like to address the issue of fire. The new protection

plan does not foreclose addressing fire. I question Dr. Nelson’s

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characterization of the problem being focused on roadless areas.

Just recently, the Forest Service told the House Resources Committee that only 14 percent of high-risk fire conditions in the national

forest land occur on roadless areas. The problem is not in remote

areas, but in fact in the urban forest interface, and this is where

just last year Senator Domenici directed significant new funding.

Dr. Nelson has also ignored that tree removal is in fact allowed

in roadless areas to address the fire threat.

I am going to run out of time here quickly so I will leave my remarks on arsenic and diesel to what’s in my written testimony. I

will be happy to answer any questions.

I would like to address the appliance efficiency standards because there has been a lot of discussion this morning about the energy shortage the Nation faces. A key component of the solution is

reducing demand through more efficient appliances. In January,

the Department of Energy issued new efficiency standards for airconditioners, clothes washers, and water heaters. These standards

were explicitly mandated by Congress and they are all more than

5 years late.

And, contrary to what Dr. Gramm suggested earlier, these rules

actually save consumers significant money. Consumers and businesses are projected to save over $22 billion during the next 25

years due to the new standards. And, by 2020, more efficient appliances are expected to save 54,000 megawatts and that’s almost

enough to power all of California.

It makes little sense to talk about delaying these standards at

precisely the time our Nation is facing an energy shortage.

In conclusion, I urge members not to use the Congressional Review Act to block important public health, safety and environmental protections. As I discussed, these rules, like protecting the

last remaining wild areas in our national forests, were issued after

a lengthy public process over several years. Discarding all the effort and public involvement that went into important public health

and environmental protections with one rushed vote in Congress is

a disservice to the American people. Rescinding environmental protections or delaying their implementation denies the public benefits

they rightfully expect from their government and hopefully neither

Congress nor the new administration will let them down. Thank

you.

Mr. OSE. Thank you, Ms. Buccino.

[The prepared statement of Ms. Buccino follows:]

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Mr. OSE. I would like to welcome Thomas McGarity. He holds

the W. James Kronzer Chair in law at the University of Texas

School of Law, and is an expert in administrative law procedures

and the like. Thank you for coming.

Mr. MCGARITY. Thank you, Mr. Chairman. My name is Tom

McGarity, and I do teach and have taught for 20 years at the University of Texas School of Law, environmental law and administrative law. I will say I do not speak for the University of Texas. I

speak for myself here in this capacity.

As is typically the case during the transition between one administration and another, the volume of proposed and final regulations

issued by many executive branch agencies increased during the last

few weeks of the Clinton administration. Some were significant and

controversial rules that the agencies had been deliberating over for

many years. The same thing happened at the end of the Carter administration and at the end of the Bush administration. It is, of

course, not at all unusual for decisionmaking institutions like executive branch agencies, courts, the Supreme Court of the United

States, to increase its workload or output at the end, and even this

institution increases substantially output toward the end of a designated term.

On January 20th, Chief of Staff Andrew Card issued a memorandum to the heads of the executive branch agencies. Subject to limited exceptions, it required them to withdraw proposed or final regulations that had gone to the Office of the Federal Register but had

not been published in the Federal Register. With respect to final

regulations that had been published but had not taken effect, agency heads were to temporarily postpone those regulations for 60

days. The executive branch agencies complied by publishing notices

in the Federal Register, most of which contained pretty much

boilerplate for those actions.

The law is clear that the postponement of the effective date of

a final rule is ‘‘rulemaking’’ and is subject to the Administrative

Procedure Act’s notice and comment procedures. The Federal Register notices for the 60-day delay contain boilerplate explanations

that I think were not even remotely plausible under the existing

case law. They spoke of rules of procedure. They spoke of a good

cause exception. The rules of procedure exception is inapplicable

because these regulations did, or most of them jeopardize or substantially affect the rights and interests of parties; that is, the

withdrawal of the regulations did.

The boilerplate explanations did not demonstrate good cause because a change of administrations is not the sort of emergency situation that justifies the invocation of that exemption.

The Card memo implicitly contemplated that agencies would rescind regulations, having considered them, and on March 23, 2001,

EPA did that with respect to the final rule for arsenic where it extended indefinitely the effective date for the rule for arsenic in

drinking water. And I would correct my testimony on page 15, line

3. It should say, ‘‘extend indefinitely the effective date,’’ not ‘‘extends indefinitely the rule,’’ if that confused anyone.

Any recission or modification of a published final rule must be

accomplished through notice-and-comment rulemaking procedures.

Furthermore, any such action must be supported with data and

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analysis sufficient to pass judicial scrutiny under the ‘‘arbitrary

and capricious’’ test.

One alternative to unlawful postponement or withdrawal of a

published rule is action under the Congressional Review Act to rescind the major rule. Because it has been—because it has the effect, rather, of undoing the work of agencies and private parties,

all the work they have put into the rule, this relatively blunt tool

has the potential to waste large amounts of public and private resources.

In my view, Congress should not hastily exercise its power to

undo the legitimate products of deliberative—of the deliberative

rulemaking process. In general, neither the offices of individual

Congresspersons or the committee staffs or really any institution

within Congress, now with the demise of the Office of Technology

Assessment, is populated with persons with the technical expertise

to second-guess the conclusions of agency staff and upper-level

agency decisionmakers. The primary determinants of congressional

decisions under the Congressional Review Act are likely to be political and not technical considerations. The fate of individual regulations long in the making should not turn on a hasty and unprincipled exercise of raw political power. Congress has wisely refrained

in the past from using the Congressional Review Act to reward political beneficiaries and punish political enemies. It should continue

to do so in the future.

Thank you Mr. Chairman.

Mr. OSE. Thank you Mr. McGarity.

[The prepared statement of Mr. McGarity follows:]

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Mr. OSE. I would like to recognize Mr. Otter for 5 minutes.

Mr. OTTER. Thank you very much, Mr. Chairman. I appreciate

all the comments from the panel members. I would like to go first

to Terry, to Mr. Gestrin. Would you reiterate one more time the impact that the roadless rule has had thus far, even though we are

just entering the phase on the roadless rule, would you reiterate

the impact it has had on the economy within Valley County?

Mr. GESTRIN. Yes, Mr. Chairman, Congressman Otter. As indicated by our economic analysis, the loss of our timber industry in

Valley County is going to be a $43 million hit to the economic viability of our community, but it is also a complete change in our social structure. It is just one more regulation on top of ESA and everything else that just finally drives industry out. Plus, we also

have the devastations created by fires.

As you can see, an example of last summer’s forest fire burning,

it is a very social and economic impact. But, we also have areas

that were inventoried recently as roadless but they’re already

roaded. So there’s confusion sometimes that we’re talking about

areas that have never had a road, because if you go to the Forest

Service definition it states nonsystem roads. Well, a system road is

a road on their map that they maintain, which are their system

roads. The other roads, the work roads, the nonsystem roads, are

now being considered roadless areas. We have a new designation

of 5,000 acres just inventoried last year that has had management,

active management in the past, that, in fact, has work roads in it.

So it just adds more de facto wilderness, if you will, to what we

have. Idaho already has the largest wilderness in the lower 48.

Mr. OTTER. Terry, you have mentioned in your testimony that I

guess by the first of June, Boise Cascade is going to shut down the

last lumber mill they have in Valley County. They have already

shut down the one they have in Linn County, another county in

Idaho. My apologies to the other members, folks here, that don’t

know the geography as well as Terry and I do. That will bring the

total then to a total of 33 lumber mills, in excess of 3,000 folks that

have lost their jobs in economies within those communities within

the last 8 years. With the roadless area added to what we consider

the mismanagement of the last 8 years of our national forest in

Idaho, can you foresee what’s going to take the place of those lumber mill jobs or those wood products jobs?

Mr. GESTRIN. We are looking at every aspect we possibly can to

bring in broadbands or anything else, but in these remote locations

we don’t have the infrastructure, the transportation, the things

necessary to actually have other types of economic activities, if you

will. So we will be relying somewhat on the Internet and

broadband aspect. However, those jobs have historically not paid as

well as the national resource jobs do. Our real basis of our wealth

in this country comes from national resources.

I think lately we have watched the stock market and what happens when we put our faith in information. Our real wealth comes

from resources. On the map, if you want to look at geography, all

those parts from here, it’s a dark color, that’s where I am from.

That’s what I am talking about that is the most affected place in

the lower 48.

Mr. OTTER. Mr. Chairman, I think my time is about out.

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Mr. OSE. Mr. Otter, if I might inquire, is it your desire to enter

the map into the public record?

Mr. OTTER. Yes, it is. Thank you for reminding me.

Mr. OSE. Without objection.

The gentleman from Massachusetts for 5 minutes.

Mr. TIERNEY. Thank you, Mr. Chairman. Mr. McGarity, I agree

with you, I think. Your premise, if I am correct in stating it, is that

you cannot legally suspend or postpone a regulation without first

going through a notice and a whole process.

Mr. MCGARITY. That’s right. To rescind or postpone one, you

need to go through the same sort of process you went through to

promulgate it in the first place.

Mr. TIERNEY. The underlying theory is that you are making just

a dramatic change in people’s lives and the effect on their lives

doing the suspension or postponement and the rescission as you

were in implementing the rule in the first place.

Mr. MCGARITY. That’s right. Presumably the rule has beneficiaries who will be harmed by its rescission.

Mr. TIERNEY. Now, in at least one instance, the administration

suspended a final rule that is already in effect. That was on January 19, 2001, the contractor responsibility rule went into effect,

providing that when awarding a Federal contract, the government

must ensure that the company receiving the contract has a satisfactory record of complying with Federal laws, including tax, labor,

employment, environmental, antitrust, and consumer protection

laws.

On January 31st, though, the current administration, the chairman of the Civilian Agency Acquisition Council, issued a memorandum to civilian agencies authorizing a 6-month suspension of the

rule. Morton Rosenberg, a specialist in American public law at the

Congressional Research Service, analyzed the issue and found that

that memo is likely illegal. Do you agree with that?

Mr. MCGARITY. Yes. In fact, I read that memorandum and I do

agree with its analysis. Yes, sir.

Mr. TIERNEY. Mrs. Buccino, you started to talk about a couple of

other areas and you didn’t get a chance to finish because of time

constraints. But we’ve listened to people testify about the arsenic

rule, and have criticized it. Will you tell me what your concerns are

with the statements that were made by the Bush administration

and others concerning the suspension and the repeal?

Ms. BUCCINO. Yes, I would be happy to. What was done in

issuing a new arsenic standard was to change the standard from

50 parts per billion to 10 parts per billion. The 50 parts per billion

had been based on data from the 1940’s. And Congress, in fact, has

directed three different times to EPA to revise that standard. Now,

just recently, the administration announced that they were going

to withdraw the revised standard and reconsider it. We believe that

action is both potentially unlawful and inappropriate because the

new standard delivers long overdue protections from cancer to the

American public, and we believe that it should not be undone.

Mr. TIERNEY. The new standards are also in effect in the European Union and the World Trade Organization.

Ms. BUCCINO. That’s correct.

137

Mr. TIERNEY. So it wouldn’t be anything novel to this global environment we find ourselves in.

Ms. BUCCINO. That’s correct.

Mr. TIERNEY. Now, I listened to others of the witnesses who

made the case for the phasing in of the diesel regulations, and I

would only imagine that those same arguments or contentions were

made during the rulemaking process on diesel, and apparently adjustments were made for those contentions or they just weren’t

agreed with. Will you tell us a little bit about that situation, your

views on that?

Ms. BUCCINO. Yes. The diesel rule was also a product of a very

lengthy process. It was initiated in May 1999, so several years ago,

and there was extensive both information and scientific studies regarding the health effects and cost-benefit analysis that were collected and evaluated by EPA. And, all the various stakeholders had

extensive formal and informal opportunities to comment and have

input on that. Now this rule, in fact, the administration has decided is so important that they were moving forward with implementation of it.

Mr. TIERNEY. So far.

Ms. BUCCINO. That is correct. And I would also like to point out

that in response to some of the concerns about the shortages in

supply, there is a very lengthy time for compliance. It is not until

2006 that new trucks have to comply with it, and it is a much

longer period of time for existing engines.

Mr. TIERNEY. Much longer time for existing engines. So the 2006

only applies to new vehicles.

Ms. BUCCINO. That’s right.

Mr. TIERNEY. Mr. McGarity, I agree with your observation that

the CRA is essentially a political tool providing no opportunity for

expert testimony or for a more technical view of things. In your

view, is that law? Is CRA legal? Is it constitutional?

Mr. MCGARITY. The CRA, in my view, is constitutional. My published writings are very much on record as being a proponent of

Congress when it comes institutionally between Congress and the

executive branch and Congress and the judicial branch. I think

Congress is the institution in which power should rightly be lodged.

At the same time, certainly the legislative vetoes of past years

were unconstitutional. What makes the CRA constitutional, if

sometimes conceivably unwise and certainly exercised in an unwise

way, is that it is presented—the joint resolution is presented to the

President. It’s the presentment, I think, that’s the key point there.

That being said, one does hate to see it being used very frequently

for really purely political reasons.

Mr. TIERNEY. Thank you.

Mr. OSE. I want to make sure that Mr. McGarity understands

that those of us in Congress appreciate his appreciation for our influence. It’s a roundabout way of saying we probably agree with

you on that.

Mr. McGarity, if I might, I want to go back to the Administrative

Procedure Act, the Congressional Review Act. Now if I understand

correctly, it was Congress that passed the Administrative Procedure Act. It’s not a rule, it’s an actual statute.

138

Mr. MCGARITY. The Administrative Procedure Act was enacted

after a long period of sort of struggle and deliberations in 1946.

Mr. OSE. Something passed by Congress.

Mr. MCGARITY. Oh yes, absolutely.

Mr. OSE. So it is an actual statute.

Mr. MCGARITY. Yes.

Mr. OSE. And, the Congressional Review Act was passed in 1996.

If I recall correctly, it had significant support on both sides of the

aisle. And President Clinton signed it.

Mr. MCGARITY. That is correct, sir.

Mr. OSE. The difference between the Congressional Review Act

and the legislative vetoes that have been previously attempted, you

have characterized as the Congressional Review Act, requires the

President’s participation, if you will, in the final determination.

Mr. MCGARITY. Right. It’s the presentment to the President

which is required by the Constitution.

Mr. OSE. So there is nothing in your testimony that we might

construe as being adverse to the existence of the Congressional Review Act. There might be differences of opinion as to when and how

to use it, but you are not suggesting any challenges to its underlying merit or authenticity.

Mr. MCGARITY. I certainly don’t challenge its authenticity. I

think it is a constitutional statute.

Mr. OSE. I want to ask you about the temporary suspension issue

of a rule. In a previous case before the court of appeals in D.C.,

that being Public Citizen v. Department of Health and Human

Services, the court upheld a trial court’s findings that FDA’s Food

and Drug Administration temporary suspension of the rule’s effective date pursuant to President Reagan’s regulatory Executive

Order 12291, which was announced without notice and public comment, that the temporary suspension does not violate the Administrative Procedure Act because it was temporary and allowed the

new FDA commissioner an opportunity to review a pilot program.

Are you familiar with this?

Mr. MCGARITY. Yes, I know the case. I don’t have it before me,

but I am familiar with it.

Mr. OSE. From your recollection, do you concur or disagree that

the temporary suspension of a rule is allowed?

Mr. MCGARITY. A temporary suspension of a final rule is a rule

itself and must be accomplished through rulemaking. It is allowed

if one goes through the proper procedures.

Mr. OSE. Which would be the exemptions and what have you?

Mr. MCGARITY. Either one can be exempted from section 553 or

one needs to go through notice and comment, yes.

Mr. OSE. So under this case before the D.C. Court of Appeals, apparently the court made a determination that the exemption was

valid. As I read your written testimony last night, the boilerplate

language, that is your language, your words, I should say, is not

sufficient to merit an exemption under this case law.

Mr. MCGARITY. That’s right. What we have is boilerplate, literally the same language for 60 regulations, and it’s hard for me

to believe that’s a considered analysis in the case of each regulation

that there’s good cause, which I think is the exemption that is involved in Public Citizen.

139

Mr. OSE. OK. I found your written testimony highly informative

and I want to thank you for that. I may agree with it or disagree

with it, but I appreciated your presentation of your remarks and

I was much more knowledgeable after having read it than I was

before, and I appreciate that.

Mr. MCGARITY. Thank you very much.

Mr. OSE. However, I do want to go back to one of your initial

statements to Mr. Tierney, and that is your respect for congressional discretion in setting policy. Going back to I think the Federalist Papers, or even before that, I think you will find wide agreement here that it is Congress that should set policy and the executive branch implement it.

Mr. MCGARITY. That’s not always the case among my colleagues

in academia who sometimes think the courts ought to be having

more than that. But I was a constituent of Mr. Brooks up here for

many years.

Mr. OSE. We struggle with it here.

Mr. Otter for 5 minutes.

Mr. OTTER. Thank you very much, Mr. Chairman.

Mr. Hayes, would you tell me what is the cheapest transportation for your farm products? What’s the cheapest transportation

other than throwing it? What is the cheapest transportation to get

your product to the world marketplace?

Mr. HAYES. For the entire State of Idaho, I would have to say

the cheapest transportation is our barge network on the river.

Mr. OTTER. Why is that?

Mr. HAYES. I think it’s because they can move large volumes of

grain in an expedient manner and be able to reach the Portland

market as economically sound as they can.

Now, we have a little problem with that from southeastern

Idaho, hitting the port of Lewiston. However, 30 percent of our

grain out of southeastern Idaho goes down the river through the

port of Lewiston.

Mr. OTTER. What is 30 percent of the grain? Give me that tonnage.

Mr. HAYES. I can’t do that, I’m sorry. The figure is not in my

mind.

Mr. OTTER. Would 168,000 of soft white wheat be reasonable that

goes through?

Mr. HAYES. Oh, I’m sure, yes.

Mr. OTTER. All right.

Ms. Buccino, in your organization—you are here for your organization?

Ms. BUCCINO. Yes.

Mr. OTTER. What is your organization’s position on the removal

of the dams in the four upper Snake River dams?

Ms. BUCCINO. That, I’m personally not aware of. There are people in our West Coast offices that work on that issue, so I am

afraid I will not be able to answer that question directly.

Mr. OTTER. So you are normally not familiar with what happens

out on the West Coast.

Ms. BUCCINO. That’s not true, but there are different substantive

areas that we each work in, and we are working in a lot of different

140

areas and there has been plenty to keep me busy here in Washington, so that’s what I have been focusing on recently.

Mr. OTTER. For the record, let me state that your organization

does support the removal of the four Snake River dams on the

lower Snake. And the reason I bring this up is because it seems

to me that your position on the diesel fuel and your organization’s

position on the diesel fuel is inconsistent with your position on the

removal of the dams, as testified by Mr. Hayes.

In fact, I know the figures pretty well, but I want them for a

matter of record. In order to take 1 ton of wheat from Lewiston,

ID 514 miles down river to Vancouver, WA and then load it onto

an ocean-going vessel for shipment to Taipei, it takes 1 gallon of

diesel fuel. Now, to get that same ton of wheat or grain down river

on a train, you would only get it 202 miles. But worst off, on a

truck, the very target of this whole diesel rule, you would only get

it 59 miles. One ton of wheat 59 miles, not 514 as is the case.

The other question I would have relative to your organization’s

position, do you suppose that there is any connection in your testimony here today in your position and your organization’s position

on these issues relative to funding that was received by your organization from the Federal Government for those very issues?

Ms. BUCCINO. I disagree with that contention. We’re a nonprofit

organization. We represent our membership, which is over 400,000

across the country; and we advocate positions that we believe are

in the public interest based on the science regarding health effects

and also the various cost-effectiveness analyses.

I would actually like to take this opportunity to introduce into

the record a document related to the wild forest protection plan

which people have referred to as the roadless rule. This is a report

by NRDC called End of the Road, but it actually is a summary of

the scientific—independent scientific research that’s been done on

the adverse ecological impacts of logging and road building in the

national forests.

I actually would urge members, when you’re evaluating the rules

that have been discussed today, not just to look at the limited

amount of material you’ve collected today, whether it’s the public

interest comments submitted by the Mercatus Center or NRDC’s

documents but to evaluate the administrative—the complete administrative records that were collected over the years of rulemaking that went into these protections.

Mr. OTTER. Thank you very much, Ms. Buccino; and thank you,

Mr. Chairman.

I just would close in stating that the same organization, the National Resources Defense Council, has taken a pretty firm position

in favor of campaign reform; and it did receive—because they believe that votes follow money. And, they did receive $2.5 million in

Federal contract awards from 1998 to 2000 for supporting and

spreading the success story for the Department of Energy on refrigerators, washing machines and air conditioners and heat pumps, is

now saying that $2.5 million does not color the testimony that

we’ve received here today. I would suggest that the organization

can’t have it both ways.

Thank you, Mr. Chairman.

141

Mr. OSE. The document you held up we will enter into the record

without objection.

Ms. BUCCINO. Yes. Thank you.

Mr. OSE. I think we’re close to the end here. I do have one question.

Ms. Buccino, we had earlier testimony I think from Dr. Nelson

about the process that the Forest Service used in finalizing its Environmental Impact Statement on the roadless policy. Embedded in

the document were comments about the roadless rule process contradicting past emphasis on collaboration, and I’m trying to reconcile that. Because your comments have been somewhat different.

Can you provide some feedback on that?

Ms. BUCCINO. I think what that reference is to the collaborative

process is referring to the Forest Service management plans that

are developed for each individual national forest. Nothing in the

new forest protection plan does away with that process or—those

plans are moving forward. The idea is that the guidance and the

protections that are in this recent protection plan are to guide development of those forest plans. It’s important to remember the extensive public process that I emphasized, and I do think it’s fair to

characterize it as the most ever for a rulemaking process that went

into the new forest protection plan that was recently announced.

Mr. OSE. If I might just—I don’t want to argue with you and debate about it. I want to think about what you have to say. I’m just

trying to reconcile what the Forest Service imbedded in its environmental document with what may have happened, and I’m frankly

a little bit confused, given the testimony.

Mr. Tierney, do you have anything to add?

Mr. TIERNEY. I don’t.

Mr. OSE. I want to thank the witnesses for appearing today. We

appreciate your testimony both written and oral. It was highly educational. And with that—one other thing. We’re going to leave the

record open for 10 days. So if you have something you want to submit that would be fine.

Again, thank you for coming. We’re adjourned.

[Whereupon, at 12:03 p.m., the subcommittee was adjourned.]

[NOTE.—Various publications from the ’’Journal of Labor Research, Volume XXII, No. 1, Winter 2001,’’ may be found in subcommittee files.]

[Additional information submitted for the hearing record follows:]

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