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76–087 PDF 2001

UNFUNDED MANDATES—A FIVE-YEAR REVIEW AND

RECOMMENDATIONS FOR CHANGE

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY POLICY, NATURAL

RESOURCES AND REGULATORY AFFAIRS

OF THE

COMMITTEE ON GOVERNMENT REFORM

AND THE

SUBCOMMITTEE ON TECHNOLOGY AND THE HOUSE

OF THE

COMMITTEE ON RULES

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

MAY 24, 2001

Serial No. 107–19

Printed for the use of the Committees on Government Reform and Rules

(

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

BARBARA KAHLOW, Deputy Staff Director

REGINA MCALLISTER, Clerk

ELIZABETH MUNDINGER, Minority Counsel

(III)

COMMITTEE ON RULES

DAVID DREIER, California, Chairman

PORTER GOSS, Florida

JOHN LINDER, Georgia

DEBORAH PRYCE, Ohio

LINCOLN DIAZ-BALART, Florida

DOC HASTINGS, Washington

SUE MYRICK, North Carolina

PETE SESSIONS, Texas

TOM REYNOLDS, New York

MARTIN FROST, Texas

TONY P. HALL, Ohio

LOUISE MCINTOSH SLAUGHTER, New

York

ALCEE HASTINGS, Florida

MATT REYNOLDS, Staff Director

SUBCOMMITTEE ON TECHNOLOGY AND THE HOUSE

JOHN LINDER, Georgia, Chairman

LINCOLN DIAZ-BALART, Florida

PETE SESSIONS, Texas

TOM REYNOLDS, New York

DAVID DREIER, California

TONY P. HALL, Ohio

ALCEE HASTINGS, Florida

DON GREEN, Staff Director

(V)

C O N T E N T S

Page

Hearing held on May 24, 2001 ............................................................................... 1

Statement of:

Crippen, Dan L., Director, Congressional Budget Office; and Mitchell

E. Daniels, Jr., Director, Office of Management and Budget .................... 22

Holman, Steve, Sr., president and chief executive officer, Bay Cast, Inc.,

chairman, Regulatory Affairs Committee, U.S. Chamber of Commerce;

and William L. Kovacs, vice president, Environment, Technology &

Regulatory Affairs, U.S. Chamber of Commerce ........................................ 79

Mannweiler, Paul S., Indiana State Representative and immediate past

president, National Conference of State Legislatures; and Dr. Raymond

C. Scheppach, executive director, National Governors’ Association ......... 49

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

Crippen, Dan L., Director, Congressional Budget Office, prepared statement of ........................................................................................................... 25

Daniels, Mitchell E., Jr., Director, Office of Management and Budget,

prepared statement of ................................................................................... 39

Holman, Steve, Sr., president and chief executive officer, Bay Cast, Inc.,

chairman, Regulatory Affairs Committee, U.S. Chamber of Commerce,

prepared statement of ................................................................................... 82

Kovacs, William L., vice president, Environment, Technology & Regulatory Affairs, U.S. Chamber of Commerce, prepared statement of ......... 103

Linder, Hon. John, a Representative in Congress from the State of Georgia, prepared statement of ........................................................................... 4

Mannweiler, Paul S., Indiana State Representative and immediate past

president, National Conference of State Legislatures, prepared statement of ........................................................................................................... 51

Ose, Hon. Doug, a Representative in Congress from the State of California, prepared statement of ........................................................................... 10

Otter, Hon. C.L. ‘‘Butch’’, a Representative in Congress from the State

of Idaho, prepared statement of ................................................................... 12

Portman, Hon. Rob, a Representative in Congress from the State of

Ohio, prepared statement of ........................................................................ 19

Scheppach, Dr. Raymond C., executive director, National Governors’ Association:

Information concerning preemption ......................................................... 67

Prepared statement of ............................................................................... 60

Tierney, Hon. John F., a Representative in Congress from the State

of Massachusetts, prepared statement of ................................................... 15

(1)

UNFUNDED MANDATES—A FIVE-YEAR REVIEW

AND RECOMMENDATIONS FOR CHANGE

THURSDAY, MAY 24, 2001

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY

POLICY, NATURAL RESOURCES AND REGULATORY AFFAIRS, COMMITTEE ON GOVERNMENT REFORM, JOINT

WITH THE SUBCOMMITTEE ON TECHNOLOGY AND THE

HOUSE, COMMITTEE ON RULES,

Washington, DC.

The subcommittees met, pursuant to notice, at 10:36 a.m., in

room 2154, Rayburn House Office Building, Hon. Doug Ose (chairman of the Subcommittee on Energy Policy, Natural Resources and

Regulatory Affairs) presiding.

Present from the Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs: Representatives Ose, Otter, and

Tierney.

Present from the Subcommittee on Technology and the House:

Representatives Linder and Sessions.

Staff present from the Subcommittee on Energy Policy, Natural

Resources and Regulatory Affairs: Dan Skopec, staff director; Barbara Kahlow, deputy staff director; Regina McAllister, clerk; Elizabeth Mundinger, minority counsel; and Jean Gosa, minority assistant clerk.

Staff present from the Committee on Rules: Seth Webb, professional staff member; Don Green, staff director of Subcommittee on

Technology and the House; and Adam Jarvis, clerk.

Mr. OSE. I want to call this meeting to order. I want to ask unanimous consent that the rules of the Rules Committee apply to today’s joint hearing. Without objection, so ordered.

I also ask unanimous consent, when he is able to join us, that

Mr. Portman be able to participate in today’s hearing. Without objection, so ordered.

I want to call on the gentleman from Georgia for his opening

statement.

Mr. LINDER. Thank you, Mr. Chairman. Thank you, Chairman

Ose, for calling the joint hearing of our two subcommittees to order.

I look forward to our hearing this morning for a couple of reasons.

First, it is the inaugural hearing of the Rules Subcommittee on

Technology and the House for the 107th Congress. At the start of

this Congress, we slightly altered the subcommittee’s name to reflect the fact that we will continue to be active in longstanding

areas of the subcommittee’s original jurisdiction, such as unfunded

mandates, and we will also look into higher profile issues, such as

2

examining how the technological advances of recent years affect the

House as an institution and the legislative process.

In this respect, I am pleased that the subcommittee’s first hearing in this Congress will take a look at the success story that we

have had with regard to unfunded mandates reform over the past

5 years.

Second, I look forward to working with you, Chairman Ose, in

your capacity as the chairman of the Government Reform Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs. Our subcommittees share jurisdiction over certain portions of

the Unfunded Mandates Reform Act.

As such, I believe that we share the common goal of today’s hearing; namely, highlighting the success of UMRA over the last 5

years in reducing the number and scope of enacted laws that contain unfunded mandates and raising the consciousness level of our

Members of the House and its standing committees, and our staffs,

about unfunded mandates earlier in the legislative process so as to

maximize our ability to either eliminate or greatly reduce unfunded

mandates before such measures come to the House floor.

I believe that the key to our success over the last 5 years in either eliminating unfunded mandates from being enacted into law

or greatly reducing their scope and cost has been the change that

UMRA made to the rules governing the consideration of certain

legislation on the House floor.

Specifically, Section 425 of the 1974 Congressional Budget Act

establishes a point of order that lies against authorizing legislation

contained in an unfunded intergovernmental mandate exceeding

$56 million.

Furthermore, Section 426 of the Congressional Budget Act establishes a point of order that lies against a rule governing consideration of a measure containing an unfunded intergovernmental

mandate exceeding this level, if the rule waives the initial point of

order with respect to the underlying authorizing legislation.

In other words, with these two procedural safeguards, the full

House of Representatives is required to debate, consider and ultimately pass judgment on either underlying legislation seeking to

enact an unfunded mandate exceeding $56 million, or a rule that

seeks to waive this point of order.

This represents a sharp break from the practices that were in effect prior to UMRA’s enactment; namely, routinely moving legislation through the House of Representatives without even a moment’s consideration as to whether or not it contained an unfunded

intergovernmental mandate.

Given these difficult hurdles to overcome, is it any surprise that

the CBO found in an annual report submitted in January 1997,

February 1998, February 1999 and March 2000 that the number

of legislative measures with unfunded intergovernmental mandates

exceeding these levels were very, very small, usually about 1 percent of the legislation that the CBO reviewed under UMRA? And,

the number of bills with such unfunded intergovernmental mandates that were finally enacted into law was an even smaller subset of these groupings.

Stated differently, in the years since UMRA was enacted, more

than 99 percent of the legislation that we the Congress have enVerDate 11-MAY-2000 10:12 Jan 28, 2002 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\DOCS\76087.TXT HGOVREF1 PsN: HGOVREF1
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acted into law contained either no unfunded mandates at all or unfunded mandates that did not exceed UMRA’s threshold levels.

I appreciate the fact that Dan Crippen is with us. Nice to see you

again. He will release the report and I look forward to his remarks,

as well as the testimony of OMB Director Mitchell Daniels. I also

look forward to the other witnesses we will hear from this morning,

including the National Governors’ Association, the National Conference of State Legislatures, and the U.S. Chamber of Commerce,

all of which will talk about their experience with UMRA and unfunded mandates over the last 5 years.

Mr. Chairman, thank you for the opportunity to make this statement. Today’s hearing will be insightful, and I look forward to my

subcommittee working with your subcommittee in the future.

[The prepared statement of Hon. John Linder follows:]

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Mr. OSE. I thank the gentleman from Georgia. I want to explore

a couple of things here. I know Mr. Tierney has an opening statement. I have an opening statement. Mr. Otter, do you have an

opening statement?

Mr. OTTER. Yes.

Mr. OSE. Mr. Sessions, do you have an opening statement?

Mr. SESSIONS. Mr. Chairman—— Mr. OSE. I am just trying to determine whether or not you have

one.

Mr. SESSIONS. The answer is, it would be brief.

Mr. OSE. OK. The question I have for the members is whether

or not—given the vote and the time value for our witnesses, whether we ought to just submit our statements for the record so when

we come back from the vote, we can go straight to the witness testimony.

Mr. TIERNEY. No objection on the minority side.

Mr. OSE. Would that be agreeable to the majority side?

All right, without objection we will submit our statements for the

record. I appreciate that.

[The prepared statements of Hon. Doug Ose, Hon. C.L. ‘‘Butch’’ Otter, Hon. John F. Tierney, and Hon. Rob Portman follow:]

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Mr. TIERNEY. Mr. Chairman.

Mr. OSE. Yes, Mr. Tierney.

Mr. TIERNEY. I am happy to submit my statement into the record

and only ask unanimous consent also to include the GAO report in

the record. I think there is confusion as to what that report says,

and I would like to make sure that it is in there for that

purpose—— Mr. OSE. Without objection.

Mr. TIERNEY [continuing]. And also to include some testimony

and views by witnesses and members in opposition to the legislation that would create a point of order against legislation that imposes private-sector mandates and other relevant materials.

Mr. OSE. Without objection, so ordered.

Mr. TIERNEY. Thank you.

[NOTE.—The GAO report entitled, ‘‘Unfunded Mandates, Reform

Act Has Had Little Effect on Agencies’ Rulemaking Actions,’’ GAO/

GGD–98–30, may be found in subcommittee files. The report may

also be obtained from GAO by calling 202–512–6000.]

Mr. OSE. We are going to go ahead and recess so we can go vote.

All our statements are going to be in the record. So when we get

back here, we are going to hear from the both of you.

[Recess.]

Mr. OSE. Again, welcome everybody. I appreciate your joining us.

We have three panels today testifying before us. Our first panel is

composed of the Director of the Congressional Budget Office and

Director of the Office of Management and Budget. That would be

Mr. Dan L. Crippen and Mr. Mitchell E. Daniels, Jr., respectively,

and we are very grateful for your joining us. And, let’s see, Mr.

Crippen, you are listed first, so we are going to give you the opportunity to proceed first. If you could summarize your statement,

keeping it to 5 minutes, then we could get to our questions quickly.

Mr. Crippen.

STATEMENTS OF DAN L. CRIPPEN, DIRECTOR, CONGRESSIONAL BUDGET OFFICE; AND MITCHELL E. DANIELS, JR.,

DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET

Mr. CRIPPEN. Mr. Chairman. Mr. Chairman, and members of the

subcommittees—I underline the plural nature of subcommittees. It

is rare to appear before two at a time—I am pleased to be here

today to discuss our report of the Unfunded Mandates Reform Act’s

first 5 years. In our view, UMRA has achieved its primary objective. It has informed the Congress about mandates included in legislation. That information has prompted a number of bills to be

changed so as to reduce or eliminate the cost of mandates, and a

few mandates, albeit ones that were less costly, were funded along

the way.

Since 1996, CBO has provided mandate cost statements for nearly all the bills reported by authorizing committees. It has also

given information about mandates to Members and congressional

staff at other stages in the legislative process.

Over the past half decade, several patterns about Federal mandates and their costs have become clear, as these two posters suggest, Mr. Chairmen. Most of the legislation that the Congress considered between 1996 and 2000 did not contain Federal mandates

23

as defined by UMRA. Of the more than 3,000 bills and other legislative proposals we reviewed during that period, 12 percent contained intergovernmental mandates and 14 percent contained private-sector mandates.

Most of those mandates would not have imposed costs greater

than the thresholds set by UMRA. Only 32 bills with intergovernmental mandates over these 5 years had annual costs of $50 million or more, and some 100 of the bills with private-sector mandates had costs of more than $100 million. Few of the bills with

either kind of mandate, however, contained Federal funding to offset the costs.

Although the percentage of bills containing a Federal mandate

stayed fairly constant over the past 5 years, the percentage of bills

with mandates over the statutory thresholds declined. Bills with

intergovernmental mandates above the threshold decreased from 2

percent in 1996 to less than 1 percent in 2000, and bills with private-sector mandates above the threshold dropped from 6 percent

in 1996 to about 1 percent in 2000.

Last observation, Mr. Chairmen: Few mandates with costs over

the UMRA thresholds were enacted in the past 5 years. Only two

intergovernmental mandates with annual costs of at least $50 million became law. Sixteen private-sector mandates with costs over

the $100 million threshold were enacted.

Mr. Chairmen, before I conclude, I want to take this opportunity

to report on behalf of my colleagues here today and the rest of CBO

that this is not particularly easy stuff. Determining what constitutes a mandate under the act can be complicated. For example,

the law defines a mandate as ‘‘an enforceable duty, except, . . . a

duty arising from participation in a voluntary Federal program.’’ Very often, those distinctions between what is voluntary and

what is mandatory are far from clear. Even when we determine

that a legislative proposal contains a mandate, we face numerous

challenges in estimating the cost. In some cases, accurately determining how many State and local government entities or entities

in the private sector would be affected by a mandate is next to impossible. In other cases, the entities that will be subject to a particular mandate are diverse and would not be affected uniformly.

In other instances, it may be impossible to estimate the cost of a

mandate at the legislative stage, before regulations to implement

it have been developed.

Fortunately, UMRA requires us to determine whether the cost of

complying with mandates would exceed specific thresholds. If, however, it required us to provide more detailed estimates for each

mandate, we would have a much tougher time and expend considerably more resources. Unlike our estimates of impacts on the Federal budget, for which we have extensive models, data, history, and

experience, it takes a considerable amount of time to put together

just the relevant data in many of these cases. Frankly, we probably

couldn’t do it without the help of the affected governments and industries, who you will be hearing from today.

Despite these mitigating factors, you can imagine the effort required to examine every bill reported from every committee, and

some that are not, to determine whether a mandate is included and

then estimate its cost. As you can see from the list in our report,

24

there are at least 28 people, well over 10 percent of our work force,

who get involved in one way or another in mandates assessment.

In budgetary parlance, we dedicate 16 full time equivalents and

over $2 million a year to mandates assessment.

It is a big effort and may well be worth it. Clearly the law and

its requirements have changed the way Congress thinks about

mandates, although it has not always altered the outcome for those

with large costs.

Thank you, Mr. Chairmen.

[The prepared statement of Mr. Crippen follows:]

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Mr. OSE. Thank you, Mr. Crippen. Joining us now is the Director

of Office of Management and Budget, Mr. Mitchell Daniels.

Mr. DANIELS. Thank you, Mr. Chairman. Mr. Chairman, a review

of the experience to date suggests that the executive branch’s implementation of the Unfunded Mandates Reform Act has been imperfect at best. Title II of the act has been regarded by some agencies as a perfunctory exercise, not as an opportunity to work in

good faith with our non-Federal partners. Just this week, White

House staff attended a meeting of the Governors’ Washington representatives and asked which agencies were doing a good job consulting with the States, and the answer was none, that no Federal

agency is consulting with State and local governments in the methodical way intended when the law was developed. States and localities report that many agencies think simply informing them of

a rulemaking action is the equivalent of consultation, that consultation processes lack uniformity, does not occur early enough in

the rulemaking process, and, on the rare occasions when consultation does occur, agencies often contact State and local counterparts,

not the elected officials or chief appointed officials accountable to

the public for running their respective governments.

This will not be accepted practice in this administration. We will

require agencies to submit the dates at which stakeholders were

contacted, and prior to review by the Office of Information and

Regulatory Affairs of any new regulations, if there has not been

adequate consultation as called for by the act, OMB will return

regulations to the originating agency for completion of this responsibility.

As OMB has noted in five annual reports to the Congress, 80

rules have required the preparation of a mandate’s impact statement in those 5 years. This number strains credulity. In fact, it appears that agencies have attempted to limit consultative processes

and ignore potential remedies by aggressively utilizing or interpreting exemptions outlined in the act.

Let me cite one graphic example. Last June, the EPA issued a

new regulation known as the total maximum daily load. It required

States to develop and implement plans to clean up impaired waters, a reasonable and appropriate goal. But the agency estimated

the incremental costs of compliance at $23 million per year, and,

therefore, the regulation was not considered an unfunded mandate

under the act.

But EPA completely excluded from its analysis the cost of pollution control measures that will clearly be imposed by the new regulation. These compliance costs are expected to run into the billions

of dollars per year for the private sector and local governments, but

EPA moved forward without deference to the requirements of the

act. GAO, in reporting on the act’s first 2 years in 1998, noted that

there was a limited direct impact of the act on the agency’s rulemaking, to say the least.

On behalf of the administration, I am prepared to make the following commitments to address these shortcomings: We will do

more to involve State and local governments early in the rulemaking process. We will bring more uniformity to the consultation

process. States and localities should have a clear point of contact

in each agency, and agencies must understand that consultation

38

means more than making a telephone call the day before an action

is published in the Federal Register.

Third, we will enforce the Unfunded Mandates Reform Act to ensure that agencies are complying with both the letter and the spirit

of the law. I will direct, through OIRA, to return a rule not in compliance to the agency from whence it came. If an agency is unsure

whether a rule contains a significant mandate, it should err on the

side of caution and prepare a mandate’s impact statement prior to

issuing a regulation.

Mr. Chairman, the administration is committed to securing

greater involvement with our intergovernmental partners in Federal decisionmaking and, more fundamentally, strict adherence to

the letter of the statute you have passed.

President Bush has noted that federalism will be a priority in

this administration, and we look forward to developing this partnership in concert with the Congress and making sure that it is a

successful one. Thank you.

[The prepared statement of Mr. Daniels follows:]

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Mr. OSE. Thank you, Mr. Daniels. I want to thank you for your

clear and unequivocal statements. I had read your testimony last

night. I am most appreciative of your efforts.

I am going to recognize the gentleman from Georgia for 5 minutes.

Mr. LINDER. Mr. Crippen, it is nice to see you again. I am

pleased with your testimony and the success of UMRA. But one

thing that wasn’t clear to me was how many of the unfunded mandates, now that we have our eye focused on that, get caught at the

subcommittee level and committee level and never get anywhere?

Mr. CRIPPEN. There are a fair number, Mr. Linder. We find that

sometimes in consultation before legislation is introduced or

marked up, as you suggest, we give informal assessments and advice about how we would look at things, as we do on the Federal

cost side, too. But in this case, particularly, it has been quite notable that we have seen mandates disappear or be reduced below the

threshold levels before the bills are further processed.

Mr. LINDER. Is it further true that most of the unfunded mandates that reach the floor against which a point of order is asserted

ultimately pass?

Mr. CRIPPEN. Yes, they do, certainly in the House. The Rules

Committee has been diligent, I must say, in making sure that if a

point of order could lie, it is allowed to. That is to say, these points

of order are not waived.

Mr. LINDER. That’s right.

Mr. CRIPPEN. And that even though the rule may provide for

waiving all other points of order, this point of order is not waived.

So I think it is due to the Rules Committee’s diligence in allowing

the UMRA points of order to be raised that they have been voted

on. Ultimately, the legislation involved has passed. But at a minimum, Members are made to confront the mandate that is in the

legislation.

Mr. LINDER. And, while it is not perfect, it is a huge improvement over what we did have in terms of just ignoring the amount

of dollars we are burdening States with or private businesses with?

Mr. CRIPPEN. Absolutely. It is much more information. And, I am

a great believer that the more information you have, the better decision you can make. Clearly, mandates have been included in legislation since the beginning of the republic, but we are now only

beginning to try to quantify them. Clearly, representatives of the

other governments have in the past tried to promote this understanding but didn’t have the rules behind them to do so.

Mr. LINDER. Mr. Daniels, you have said something this morning

that is the most encouraging thing I have heard in years here, and

that you are willing to look at even the EPA’s respecting its imposition of costs down the road and ask it to pay attention to this rule.

The TMDL is only a small part of it. EPA is proposing to impose

co-permitting on feedlots, for example, and chicken growers, which

will have huge costs, huge costs.

In fact, I represent a lot of chicken growers where the integrators bring the chicks to them, and they put up $500,000, $2 million for

the buildings and grow these chicks out and turn them back to the

integrators, and if the EPA forces the integrators, such as Gold

Kist, for example, to assume an equal risk in respect of any polluVerDate 11-MAY-2000 10:12 Jan 28, 2002 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 C:\DOCS\76087.TXT HGOVREF1 PsN: HGOVREF1
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tion on the ground of that farmer, that farmer’s land, I believe the

integrators are going to walk away from that instantly, build their

own chicken houses, and those folks all through north Georgia are

going to be without any way to pay off their loans. These are a

huge imposition of costs.

In Georgia the EPD does a wonderful job working with—not as

an adversary but as a partner with businesses in cleaning up our

environment. We have done a great job and the EPA tends to ignore that. If you are going to enforce the following of these mandate rules by the EPA, it will be the most well-received message

Georgia can have.

Mr. DANIELS. Thank you, Congressman. To me, the comments

and commitments that I have articulated this morning are not remarkable or, you know, really particularly praiseworthy, and I

would just say two things. First of all, fundamentally they stem

from a simple respect for the law and obligation to implement and

enforce it faithfully. And that would be the case whether or not we

agreed with the thrust of this policy, which the President, you

know, clearly does as an advocate of federalism.

Second, I selected an example from the EPA, but I don’t mean

to single out any particular agency. I have an equally graphic example drawn to our attention by State and local information officers just in the last few days that has to do with HIPAA, the

Health Insurance Portability and Accessibility Act, perhaps the

most expensive rule, certainly one of them, promulgated in recent—the rules attached to that act in recent years. And, here too,

we can find no evidence of sufficient compliance. So I don’t mean

to pick on any one agency, but the rule will be applied evenhandedly and to all.

Mr. LINDER. Mr. Daniels, I appreciate that. This is my 9th year

and to have someone from the administration tell me that they are

going to respect the rules of law is breathtaking, and I am grateful.

Thank you, Mr. Chairman.

Mr. OSE. Thank you, Mr. Linder. I recognize the gentleman from

Idaho, Mr. Otter.

Mr. OTTER. Well, thank you, Mr. Chairman. Mr. Daniels, for a

person who spent 14 years as a lieutenant Governor of a western

State that has had all manner of agents come to harass our citizens and then eat out their substance, it is indeed a pleasure to

hear that sort of directive from the office of the executive.

I would perhaps ask that both of you participate in this. So feel

free to jump in wherever you see fit. But, you know, in the private

sector, I was chief executive officer and other capacities in the private sector for 30 years, and, if I disobeyed the IRS laws or the

EPA laws or affirmative action or the Labor Department or Health

and Welfare, you name it, I went to jail, and not only that, my company was held economically responsible. In some cases, I was held

personally economically responsible.

It seems to me, as I have heard so many times on the floor of

legislative bodies, the only thing that is going to make this work

is to have teeth in it. Would there be some satisfaction for your

particular duties and responsibilities if these agency heads that

sought to purposely mislead could go to jail or could be held personally and financially responsible? The TMDL loading 80,000

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streams and tributaries to what is called navigable waters in a

very loose sense of the U.S. Government, would cost the State of

Idaho well in excess of $50 million a year, let alone $23 billion a

year for the entire United States. That is drastically misleading. If

I, as the president of my company, had misled any government

agency to that extent, I could be—you know, they could be pumping sunlight to me right now, and perhaps I should have voted the

other way on correctional institutions.

But, what I want to know is can we put some teeth into this

thing. You know, I could have at least gotten fired by my board of

directors if I would have subjected the company to that kind of economic cost. What can we do?

Mr. DANIELS. You or me?

Mr. CRIPPEN. I will start and you can think about it.

Mr. OTTER. Perhaps I should have asked this at another venue.

Mr. CRIPPEN. Probably, because we could both go to jail, and we

don’t want to. In fact, we refer often to the enforceability of the

Budget Act, because it frustrates us sometimes when Congress will

do what Congress wants to do. We say there are no go to jail provisions.

I am not sure how you would make it more enforceable in the

way you have described. One thing, though, that I think Congress

can do a better job of is simply oversight. You know, that is the

role that Congress is designed to play over the executive branch,

and clearly, when you don’t have any cooperation, it is very difficult to do, but—— Mr. OTTER. Mr. Crippen, I would love that with the EPA. I would

love that. I would love that sort of attitude, but, if it is so important for us to govern in that way, why isn’t it important, then, for

us to be governed that way as well?

Mr. CRIPPEN. Well, I would like to think that in your encounters

with Federal agencies, you would get some benefit of the doubt. I

am not sure that is always the case. But how to make government

officials follow your intent, whether it is the letter of the law or

not, has always been an issue and a problem for many Congresses

and administrations. I don’t know how to make people do what

they would otherwise not do in that context, but I do think that

you can help the process by thorough and extensive oversight. That

is my only solution in our constitutional framework.

Mr. DANIELS. Congressman, first I move to say again, as I did

with Congressman Linder, that while I appreciate your generous

comments, I don’t think they are particularly warranted. You

know, where I am from, you don’t get a merit badge for obeying

the law. It is just expected behavior, and I think that is the answer

to your question. I believe it is a matter of accountability, and it

is principally, I think, the responsibility of the executive branch to

hold its officers accountable for faithful, sincere compliance with

this or any other applicable statute. I think you can count on President Bush, particularly in an area to which as a former Governor

and an advocate of federalism, to pay close attention and to hold

his officers accountable.

Mr. OTTER. Well, I am glad to hear you say that, Mr. Daniels,

and I come to this question from a peculiar perspective and a personal perspective, and I just had a 6-year running battle with the

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EPA and the Army Corps of Engineers on a modification of a half

acre of swamp on my property to a 2.9-acre wetland, and the cost

for that was $137,500 initially, and we now got it down to $50,000

because I didn’t break the law. What I didn’t do was fill out all the

permit requests that I didn’t know I needed. But anyway, I make

that point, because the Army Corps of Engineers and the EPA consorted to do the very same thing in the State of Idaho in violation

of State laws and State values, and yet suffered no consequences.

Nobody went to jail. Nobody even got busted from sergeant to corporal, and so it seems just a little bit arrogant, maybe even King

George the IIIrd-ish for us to be treating the citizens, the governed,

this way. I want to do all I can in my short time here to make sure

that if we are going to pass a law, then we better be prepared to

enforce it and obey it.

Thank you.

Mr. OSE. Is the gentleman finished? The gentleman has finished

the statement? Oh, you are looking for a response?

Mr. OTTER. No. I was just making—well, you can respond to that

if you want. Thank you. Thank you, Mr. Chairman.

Mr. OSE. Turn off your mic, if you would, please. There you go.

All right.

Mr. Daniels, I want to explore something. It is more of the arcane area. Under section 205, UMRA requires an agency to identify

a reasonable number of regulatory alternatives, trying to make

sure that the least costly, most cost-effective or least burdensome

alternative is utilized. How is it that OMB is going to enforce that

particular requirement?

Mr. DANIELS. I don’t have a better answer than to say that we

will insist on sound and complete analysis that makes costs and

benefits as transparent and as credible as they can be and then

weighs them as the law and good common sense suggest that they

should be.

Mr. OSE. Which means that if they do not meet the standards

OMB sets, they get returned to the agency for further work?

Mr. DANIELS. Yes. I think it will be our hope that this will happen rarely, and I hope that by being clear about our expectations

and by working directly in advance with the agencies, just as we

will insist in appropriate cases they work with States and localities, that the work will be done to appropriate standards from the

beginning. I would hope it would be a rare instance in which the

time at which OIRA is reviewing the rule, that deficiencies only

then show up.

Mr. OSE. One of the things that I have always been intrigued by

is that it is not always—or the preferred alternative is not necessarily the least expensive in terms of the long-term consequences.

One of the requirements under UMRA is to attach an explanation

of how you got to a determination of the best alternative, if you

will.

Do you have any standards yet developed, or is that a case-bycase consideration?

Mr. DANIELS. Well, I certainly don’t have an answer for you this

morning, Mr. Chairman. I think standards will probably only take

us so far in an area in which the variety of subject matter is almost

infinite. We hope for the prompt confirmation of Dr. John Graham,

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who was approved yesterday in the Senate committee, and clearly

this will be among his very first tasks.

Mr. OSE. I do want to followup on that specific point, because I

know that OMB is really struggling with the lack of confirmed appointees, and to the extent that I can help you with any of that and

recognize the problem, I would be happy to lend what little weight

my office has on this.

Another question that I want to ask has to do with—and I presume your answer is going to be very similar—the changes from,

say, July 2000 to July 2001 in how you go about determining what

needs to be sent back or what is adequate. Do you have any developed standards for that or agency regulatory proposals or, again,

is that a case-by-case basis?

Mr. DANIELS. Well, none beyond the general guidance I tried to

offer this morning, that we will want interpretations made fairly

and where it is a close call, we will want to err on the side of observing the requirements of the act. I don’t see the downside, you

know. We have everything to gain in terms of better informed

rules, and, you know, only our own efforts to expend against that

gain. So that will be my guidance to Dr. Graham, and he will have

to fill in the details.

Mr. OSE. OK. Mr. Linder for 5 minutes.

Mr. LINDER. I would like to get both of you to comment on this.

In the past year, we passed a similar unfunded mandates bill with

respect to mandates on private businesses with the threshold being

$100 million. It passed the House. It failed in—it didn’t move in

the Senate.

Mr. Crippen, first, what is your comment? Do you think we

should pursue an unfunded mandates legislation on private businesses as well as intergovernmental?

Mr. CRIPPEN. We now, Mr. Linder, provide our estimate of the

private-sector impacts when a mandate is included. Perhaps part

of the difference in the effectiveness is that no points of order lie.

That has been considered in the House in the past couple of years

and certainly could not hurt to have a point of order lie against a

bill that exceeds the privte-sector threshold, as much as it does

with State and local mandates.

I expect, too, that part of the reason that the unfunded intergovernmental mandate has been more effective in some ways—that is,

we see less of them and we talk about them more—is the effectiveness of the governmental organizations, in keeping everyone

abreast and helping us in how we think about the impact.

So it is a combination of things that have made the intergovernmental impact statements better and more effective, I think. Obviously, the private sector is bigger and it is harder ti estimate impacts. And, there is a different constitutional relationship that the

Congress has with the private sector. But certainly, expanding the

point of order to apply to such a mandate would be useful, particularly if the diligence of the Rules Committee continues.

The Senate has never raised a point of order, even against intergovernmental unfunded mandates. So most of the action is in your

body, but as I said, I can’t imagine that allowing a point of order

to lie could hurt anything. I mean, it would help enforce the intent.

Mr. LINDER. Mr. Daniels, do you have a comment on that?

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Mr. DANIELS. I think it would be presumptuous of me to advise

the Congress on this point. I do think it is imperative that, before

our legislators vote, they have credible evidence of the consequences, and it appears to me that, through Dan’s good offices

and perhaps others, that information is available, but I think I will

confine my remarks to the area of accountability in which I feel an

acute responsibility.

Mr. LINDER. Thank you.

Mr. OSE. Mr. Otter.

Mr. OTTER. Thank you, Mr. Chairman. Mr. Crippen, you said

during your testimony that you were many times unable at the legislative stage to assess what the cost was going to be, either local

or State governments, and that it was probably more at the promulgation of the rules and the regulation stage that those should

be assessed. Is there anything—is there any mechanism that we

have available to us that when the rules and regulations—I understand the point of order on the floor at the legislative stage, but

is there anything available to us other than just simple oversight

to assess at the rules and regulations stage what these are going

to cost?

Mr. CRIPPEN. That comment, Mr. Otter, applies mostly to the private-sector impacts. But you have available an additional authority, the regulatory review ability the Congress passed a couple of

years ago. In fact, you exercised that authority this year for the

first time, the ability to review and change or revoke or revise a

regulation. So you have that ability as well.

It is simply a case where Congress needs to delegate to an expert

agency the implementation of legislation in the regulatory process.

It is impossible for us to say how this is going to work, and that

is precisely what Director Daniels has committed to you today—to

do a better job in the regulatory process of analyzing the mandates,

making sure that assessment gets done when they make regulations.

Mr. OTTER. Thank you.

Mr. Daniels, in a possible deterrent to misleading—purposely

misleading—underbidding, so to speak, we had a tremendous example of that in the Coeur d’Alene mining region of Idaho, where

the EPA said in 3 years and for $28 million they could clean up

the Superfund site, and that was $280 million and 17 years ago.

I know that was before the Unfunded Mandates Reform Act, but

that was an ability or perhaps an example of their ability to estimate things.

Could we make the agencies live within a percentage of their estimate? Let’s say, OK, you have got 10 percent more than what you

say, and that is it. That is all you are going to get. You are not

going to get any more. Is there some way that we can bring some

truth, maybe even more important, some integrity back into our

system of government?

Mr. DANIELS. I think the integrity that is important is in the

data. I am sure it is not in the people involved. Let’s postulate that

everyone is behaving in good faith, but the data must have integrity so that we all know—that all parties know the real costs that

are about to be imposed. To me this is a mission of taxpayer protection, if we are talking in the intergovernmental context. A rule,

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once promulgated by the Federal Government, that mandates activity by a State has imposed a tax, very directly on the citizens

of that State, and it ought to be—the amount of that and the fact

of that ought to be held up to scrutiny, just as it would be if you

were voting here on an explicit Federal tax increase.

The same is true, incidentally, on the private-sector side in which

I believe ours is a consumer protection mission, because these

rules, all of which pursue important goals, do so at a real cost to

consumers, and, therefore, I think it is the integrity of the data on

which a decision is finally made that is most important to get it

right and to hold it up in plain view for the inspection of all stakeholders.

Mr. OTTER. Do we have any exit interviewing on the rules and

regulations that we promulgated and how close we were to assessing the actual value? Have we done any audits on—we passed this

rule 5 years ago, and here is what we estimated it was going to

cost and here is what it actually cost?

Mr. DANIELS. I believe there have been a number of analyses

done by scholars and by independent actors. It is an interesting

question that I will have to reserve to find out how recently, if at

all, the Federal Government has sort of audited the consequences

of its own actions, but that is a great suggestion and one we will

take up.

Mr. OTTER. Thank you. Thank you, Mr. Chairman.

Mr. OSE. Thank you, Mr. Otter.

Mr. Daniels, going back to section 204 on the meaningful and

timely input from local and State governments on any proposed

regulatory proposals, do you have any or have you developed yet

any standards by which OMB might respond to—I think what your

testimony characterized as inadequate consultation with such levels of government, or are those under development?

Mr. DANIELS. Again, I hope we can operate mainly in a preventative mode by being very, very clear with agencies that this is expected, what is expected, and as I mentioned, putting them on notice that we would like an accounting of their observance of these

rules to accompany the rule itself.

I would hope that if we are simply plain spoken enough about

that, that behavior will adapt where it needs to and that we won’t

have to too often be in the position of marking something incomplete or, even further, suggesting some criticism or sanction of the

accountable officers.

Mr. OSE. One of the things in your testimony they thought was

most appropriate—or most telling was the early and frequent visits

with local and State governments, and I would heartily encourage

that under UMRA just so that we can make sure we have an adequate understanding of the impact of anything we do here.

Mr. DANIELS. I quite agree, although I want to add that I think

all parties need to use some common sense, and I have had these

conversations already, and, again, this morning with some representatives of State and local governments. We want to find the

right balance point. We don’t seek to introduce further undue delay

in the process of advancing public policy, and we would not want

to find, for whatever reason, people using this quite appropriate

procedural step to just simply slow down or impede a rule that

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they opposed for substantive reasons. But it ought to be possible

to apply common sense and to—in the cases where rules are significant—and here I think the eye of the beholder rule ought to

have some application, and where in the eyes of Governors or other

key officials a rule seems destined to impose substantial costs, then

we ought to engage on it and do so early. And I have to believe

that can be done without being unduly burdensome or time-consuming on anybody.

Mr. OSE. Mr. Linder, Mr. Otter, anything further?

I want to thank both of you for appearing today. I appreciate

your taking the time to come down, and I know, Mr. Daniels, you

are very humble in terms of your remarks, but I must say, speaking for the others, it is a pleasure to have an unequivocal commitment to complying with UMRA. And, I thank you for that.

Mr. DANIELS. Yes.

Mr. OSE. Thank you, Mr. Crippen.

We are going to now call up our next panel of witnesses. Joining

us in the second panel is the Honorable Paul S. Mannweiler. He

is an Indiana State Representative and immediate past president

of the National Conference of State Legislatures; and Dr. Raymond

C. Scheppach, who is the executive director of the National Governors’ Association.

Gentlemen, if you would summarize your testimony in 5 minutes

each, then we will be able to get to questions. The gentleman from

Indiana.

STATEMENTS OF PAUL S. MANNWEILER, INDIANA STATE REPRESENTATIVE AND IMMEDIATE PAST PRESIDENT, NATIONAL CONFERENCE OF STATE LEGISLATURES; AND DR.

RAYMOND C. SCHEPPACH, EXECUTIVE DIRECTOR, NATIONAL GOVERNORS’ ASSOCIATION

Mr. MANNWEILER. Thank you, Mr. Chairman, distinguished

members of the subcommittees. I appreciate this opportunity to appear before you and speak on UMRA. Having been a member of the

General Assembly in Indiana for 20 years and either been the

speaker, co-speaker or the minority leader over a 14-year period, I

have to comment that when I first came to the legislature, it

seemed like every time Indiana would come into session we had to

figure out how to pay for some program which the Federal Government had passed in a previous session, and during that period of

time, the State legislatures, NCSL, would publish a mandate, monitor on a monthly basis and send it out to State legislators, and

sometimes that would be 15 to 30 pages long just informing State

legislators about mandates that were pending in Congress. And

during that period, people became very upset to the point where

they talked about a Constitutional Convention to try to bring some

balance back into the Federal system.

I would have to say all that has subsided because of UMRA. I

think particularly my executive summary of my testimony would

be Title I has worked very well, mainly and partly because of the

Congressional Budget Office being the gatekeeper and the enforcer.

And, Title II has not worked very well, and having heard Director

Daniels’ comments this morning, I was very pleased by his comments. I also have to say that I am not surprised, because Mitch

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and I worked together in Mayor Lugar’s office in 1970 or 1968

when we were in college. I have known him a long time and was

not surprised by his comments.

Just quickly on Title I, I think the predictions when this bill was

passed that this would end Western Civilization as we knew it,

that it would tie up legislation, that it would impede legislation expeditiously moving through Congress has not occurred. I think it

has been used sparingly, and someone said this morning that I believe there have been 11 occurrences where the point of order has

been utilized in the House. It has never been utilized in the Senate. But I think that the point of order has served as a deterrent

to legislators. Once they receive that intergovernmental cost estimate, they then work with State and local officials to try to reduce

the effect of the legislation which they are proposing.

I think Mr. Crippen made the comment and also Director Daniels, that as long as you have the essential information, you are

going to make a much better decision. That has been my experience at the State level. I think that has been the experience under

UMRA, that when you have this important information, you then

will make a better decision, and I think that compels the Members

to look at those intergovernmental cost estimates.

One suggestion we would have in this area would be timely access, and I just give you the example last month on H.R. 1, the Elementary and Secondary Education Act, there was less than 24

hours for local and State governments to come up and help with

that cost estimate. So we think that this is a very good program

and have been very, very much in favor of it.

Under Title II, we do have a new administration. We have had

three primary concerns. The enforcement has really been nonexistent over the first 5 years. Agency consultation, many times they

send us notice of regulatory changes, and they consider that to be

equal to consultation. And, as I said, if OMB would act—or excuse

me, if Director Daniels’ agency would act as sort of the gatekeeper

in the White House on this regulation, as he has indicated this

morning, we think that has gone a long way to solving some of the

problems which we have had.

The agencies sometimes—for example, on TANF’s last implementation of regulations under TANF, we had a great deal of participation and consultation with State and local governments. Other

times we get almost absolutely no consultation. So we think with

the support or the efforts very much of Congress, what they have

done, this Intergovernmental Working Group on federalism which

the President has announced is something we are very encouraged

by, and I would just like to thank you for this opportunity to share

our experiences at the State level with you this morning. Thank

you.

[The prepared statement of Mr. Mannweiler follows:]

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Mr. OSE. Thank you. Is it Representative Mannweiler? Is that

how you are addressed?

Mr. MANNWEILER. Correct.

Mr. OSE. Dr. Scheppach for 5 minutes.

Mr. SCHEPPACH. Thank you, Mr. Chairman. I am grateful for the

opportunity to appear before you on behalf of the Nation’s Governors on the 5-year review of the Unfunded Mandates Reform Act.

Essentially we are very pleased, particularly with what has happened around Title I. Much credit is due, not only to the two committees, but also to the superb work of CBO. The very threat of a

CBO report has engendered committees to reach out to us before

the fact instead of after. It has essentially changed the nature of

the intergovernmental discussions in a very positive way.

However, we must also admit that the scope of UMRA is relatively restricted. Let me give you three examples of legislation

that would have had a major impact on State and local governments but are exempted from the definition. The first is in the Senate tax bill that was recently passed, there is a provision that takes

the State estate tax credit and accelerates it and phases it out,

much more quickly than the Federal estate tax. This cost States

$75 billion over 10 years.

Provisions like this swamp the impacts on the expenditure side

of mandates if it were ever to end up in the final bill. It was exempt from any kind of CBO estimate.

Second, Medicaid, which is our Nation’s primary health and longterm care program for the elderly and low-income individuals, currently serves 40 million people at a cost to both the State and Federal Government of over $200 billion. Yet, Medicaid is exempt from

UMRA. The problem is, is that about 50 to 60 percent of the benefits are considered optional benefits. Technically that is true, and

so, if you have an unfunded mandate, the view of CBO, and I think

it is consistent with the legislation, says that you can go back and

adjust some of those voluntary or optional benefits.

That may be true technically, but politically it is very hard to go

back, for example, in Medicaid, and cut the pharmaceutical benefit

of a particular program. So in reality, those are not really optional

benefits. They are mandatory.

I would argue if you look over time in dollar impacts, most of

mandates of the last 15 to 20 years have, in fact, been in Medicaid.

The third example was one that was mentioned previously, and

that is the whole question of HIPPA. There, again, I think the intent of the legislation was very positive, which was to develop

forms that were consistent in the health care area. However, we

now feel that it is probably the largest unfunded mandate out

there, and yet because it is a modification, again, to Medicaid and

to some extent, SCHIP, it also is exempt from the legislation.

So in these three areas that have been exempted, they all have

huge impacts. So, again, if you look at Title I, we would argue that

the intent of the law has worked very, very effectively, but we have

to remember that it is a relatively narrow definition.

Potential modifications to Title I: From a federalism standpoint,

the world has shifted considerably over the last 5 years. Essentially

the nature of mandates has changed, and preemption of State regulatory authority has now superseded mandates as a major problem.

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Specific changes are as follows that you may want to consider:

First, recent legislative proposals such as the Internet tax moratorium and the Senate proposed accelerated repeal of State credit on

a State tax indicate that the Federal Government will increasingly

intrude or restrict State tax sources. For well over 200 years, Congress has respected the sovereign right of States to enact their own

revenue systems. Recent tax initiatives in Congress are changing

this critical precedent.

Second, Medicaid-related programs are becoming an increasing

proportion of both State and Federal funding. To continue to exempt this program substantially reduces the effectiveness of

UMRA.

Third, the Federal Government is increasingly preempting State

and regulatory authority when no costs are involved. From health

care to banking to telecommunications, State regulatory power is

being widely preempted in the name of interstate commerce. This

is a scary trend for our federalism form of government. So I think,

if you are going to look at this legislation in terms of Title 1, those

are three broad areas that you may want to consider for modification.

I pretty much agree with other comments about Title II. This

section of the law has been ineffective at best and a failure at

worst. There has been relatively no consultation with State and

local governments with respect to agency rules and regulations.

However, we are hopeful. President Bush has created a task force

on federalism. We will be working with him closely. He has indicated that he will be having a new Executive order released prior

to August 26th.

So our hope is to work with the President in terms of some overall guidelines that we might provide to the administration, I think

there is three areas. First, enforcement is the key. Executive orders

by the last three administrations have never been enforced. They

sounded good on paper, but agencies rarely complied with the directives.

Second, there needs to be several staff members within either the

Office of Management and Budget or the White House who will

meet on a regular basis with State and local governments and enforce any Executive order. The CBO model has worked quite effectively, but I think the key is that there is a small staff whose responsibility is to coordinate and make sure the reports are submitted.

Third, the activity must be highly focused or targeted. For example, we are most interested in the top 20 to 40 legislative initiatives. The seven State and local groups will be willing to sit down

with the new administration and agree on which ones where consultation is necessary. We do not want to impede their work. We

really want to have it highly focused on those areas, with significant costs to State and local governments.

Thank you, Mr. Chairman. I would be happy to answer any questions.

Mr. OSE. Thank you, Dr. Scheppach.

[The prepared statement of Mr. Scheppach follows:]

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Mr. OSE. Mr. Linder.

Mr. LINDER. Mr. Mannweiler, you talked about the lack of any

formal consultation, and then there was recently formed, you said

an intergovernmental working group on federalism. Would you recommend a formalized consultation group, and who would do it?

How would you arrange that?

Mr. MANNWEILER. Well, our recommendation under Title II with

administrative regulations has been that the Office of Management

and Budget act as a gatekeeper, and I think with the comments

which Director Daniels made this morning, I think that would be

sufficient enforcement. Obviously that did not occur over the past

4 or 5 years, and so if you wanted something in States, that may

be necessary to have that consultation maybe continue.

Mr. LINDER. Isn’t it a fact that within the last 5 years, Title II

was just ignored.

Mr. MANNWEILER. Excuse me?

Mr. LINDER. Isn’t it a fact that in the last 5 years Title II was

just ignored?

Mr. MANNWEILER. Sometimes it has been. It is been a very

checkered record. As I mentioned, we had a very good record on reauthorization of some TANF regulations in which they issued the

regulations. The State and local government disagreed vehemently.

They consulted with us and eventually it was changed, but on the

whole, it has not been very effective.

Mr. LINDER. Dr. Scheppach, give me an example of the preemption of State regulatory authority that you are referring to.

Mr. SCHEPPACH. Oh, well, in the whole telecommunications area,

there has been preemption. We did a report, which I can make

available to you, that really traces the preemption. We did it last

year, and it is pretty comprehensive. I would be glad to make it

available to you.

Mr. LINDER. Please do. You referred to the Congress passing a

bill——

Mr. OTTER [presiding]. My apologies. Mr. Linder, did you want

that put in the record?

Mr. LINDER. Good idea. Put it in the record.

[The information referred to follows:]

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Mr. OTTER. Would you provide that to the committee?

Mr. SCHEPPACH. I would be happy to.

Mr. OTTER. Thank you.

Mr. LINDER. You made a reference to Congress passing a bill prohibiting Internet taxation, but all we passed, as I recall, was a bill

prohibiting Internet taxation on a per—access to the Internet. For

example, today, you can still provide—you can still impose sales

taxes on Internet sales per county, per State, just as you can catalog sales. Isn’t that correct?

Mr. SCHEPPACH. No, we can’t, because the Supreme Court basically said that we could not force out-of-state sellers to, in fact, collect the tax. So even though residents have a State obligation, you

cannot compell sellers——

Mr. LINDER. To pay the tax.

Mr. SCHEPPACH. You cannot enforce it. So you can’t do it on mail

order or Internet. You are right.

Mr. LINDER. It is just on access, though, to the Internet.

Mr. SCHEPPACH. That’s right. The law that you passed a few

years ago was just on access. The States actually had about $50

million taxes on that, which were grandfathered in the legislation,

but the legislation that was passed by the House last year—that

was not accepted by the Senate—attempted to get rid of the

grandfathering. So that is an issue. Plus, the problem on the Internet access now is that this is a very big issue, because it is not just

access. Under the current definition, most content that is sold over

the Internet would in fact be exempt. We have got telephone calls

going over the Internet now. So it is not a very simple issue, because you can’t really define access.

Mr. LINDER. Thank you both very much.

Mr. OTTER. I guess the chairman is not back yet, so I guess I will

go ahead and proceed.

Mr. Mannweiler, Mr. Speaker, did your State ever bring suit

against the Federal Government either through Title I or Title II

to enforce the unfunded mandates?

Mr. MANNWEILER. No. I don’t believe that any State, to the best

of my knowledge, has brought suit under Title I or Title II.

Mr. OTTER. Mr. Scheppach, has any State in your organization

brought——

Mr. SCHEPPACH. Not to my knowledge. I think the only place you

can do it is on the procedure of judicial review, which is very limited.

Mr. OTTER. It probably would have been ineffective then.

Mr. SCHEPPACH. That’s right. Again, you would be doing it after

the fact.

Mr. OTTER. See. That is the problem that I have. Being a country

of laws, rather than individuals, and when the chief executive and

his department heads ignore a law, absent a clear definition of a

law in place that says this is the punishment for it, what do you

do? So, I am perplexed here a little bit, because there seems to be—

or at least with the last panel, there was some reluctance to suggest that perhaps we ought to put some teeth in the law for disobeying the law. And would the Governors’ Association have an

opinion on that, Mr. Scheppach?

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Mr. SCHEPPACH. I don’t think we have a policy, but that was considered the last time, this whole issue of judicial or court enforcement. Most administrations of course have opposed it because they

are afraid it will tie up their decisionmaking process, but it is

something that we discussed with previous administrations.

Mr. OTTER. Mr. Mannweiler, what about State legislatures?

Mr. MANNWEILER. Well, I do not believe we have a policy currently on that, but certainly that would be a good way to enforce

Title II. I mean, we have—as we have said, we have seen very good

compliance from Title I, particularly because of Congressional

Budget Office consultation with the national organizations such as

ours. If there was something to—even if you statutorily require

consultation, how meaningful is that going to be if the spirit is not

there to try to resolve some differences?

Mr. OTTER. I know what confuses me—or continues to confuse

me about the entire process is that we have found ways to make

those in the private sector be responsible for those areas that we

think, whether it is the environment or whether it is how they handled employees or how they treat labor unions and that sort of

thing. And with great dispatch and tremendous enthusiasm, we

have been able to go forward and create all manner of rule and regulation that has every board room in the United States shaking in

their boots. Yet we find it impossible to make those who we would

send out with the integrity of this government to be deserving of

that integrity.

That is the thing that I keep driving at. One of the reasons is

because—I am extremely proud that it was now Governor Kempthorne, then Senator Kempthorne that brought the whole idea of

unfunded mandates to the Congress, and he worked at it very hard

and was finally successful and it was signed by the previous administration as the first Senate bill passed that year. He arrived

at those conclusions and the necessity for that kind of limitation,

having served as the mayor of the largest—the capital city of Idaho

and seeing all the unfunded mandates that came at his level of

government, and then later on, of course, at the State level of government. Now he is suffering under the unfunded mandates as

Governor of the entire State instead of just a single city.

So I think it is—in some small and modest way, that there is

something that the Congressman from the First Congressional District of Idaho can do to put some teeth into this thing and make

it workable. I don’t think Congress, in all of its wisdom, would dare

throw out a piece of legislation like this without our ability to enforce it. Yet, we have done just that, with a false promise, a false

floor here to the taxpayers and to the local units—those governments we seek as being subservient to us as being protected in

some way. We need some protection. I would appreciate it very

much, Mr. Speaker, if the Council of State Governments would go

to work and put together some boilerplate legislation that we could

then introduce and provide for somebody being held responsible.

And generally it has got to be the enforcers, so with that, I would

now recognize Mr. Portman.

Mr. Portman.

Mr. PORTMAN. Thank you, Mr. Chairman, for allowing me to sit

at the dais.

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Mr. OTTER. Mr. Portman, Mr. Linder and I have just finished our

5 minutes with these witnesses. Mr. Mannweiler represents sort of

the local units of government, the legislative process, and Mr.

Scheppach represents the National Governors Association, or pretty close to that.

Mr. SCHEPPACH. Pretty close to that.

Mr. OTTER. Not having been a Governor yet, I am not sure what

I would have belonged to.

So Mr. Portman.

Mr. PORTMAN. Again, thank you, Mr. Chairman, for allowing me

to be here today. I have had the pleasure of working with our panelists, particularly Mr. Scheppach, over the years on this issue, and

also worked, Mr. Chairman, with your colleague, former Senator,

now Governor of Idaho on this issue, who was the House sponsor

of the Unfunded Mandates Reform Act. I was the House sponsor,

and I think this is a wonderful opportunity for us to look back and

see what has worked and what hasn’t with regard to legislation on

this, also to have an opportunity to talk about Title II and what

has worked and not worked in the administration, and I think we

will have a chance here to redouble our efforts to be sure that the

cost-benefit analyses and the other element of the legislation can

be fully implemented.

But, I am very pleased with the fact that when you look back

over the 5 years or 10 years or 15 years prior to enactment and

then look over the past 5 years, that you see a distinctly different

approach to legislating here on the Hill. It is not just the fact that

we have had fewer mandates come to the floor and that we have

been able to have fewer mandates, therefore, enacted into laws.

But more importantly, Mr. Chairman, is the fact that every committee now is going through this process, providing information to

members, and as CBO has testified, they get lots of calls from staffers from committees, important committees of this Congress, saying how can we rewrite this legislation to avoid imposing an unfunded Federal mandate as defined under UMRA? And that to me

is important, as any aspect of this legislation, that it is acting to

prevent committees from enacting additional unfunded mandates

through the legislative process.

So, again, I appreciate your allowing me to be here today. I have

no further questions for the witnesses, but I really want to tell you

that this is legislation that I think will—won’t go as far, Mr. Chairman, as perhaps many would like in terms of stopping every unfunded mandate, is a good example of what we can do up here that

really does make a difference in our State and local governments.

Thank you.

Mr. OTTER. Thank you very much, Mr. Portman, for those comments. I, as a State official then and operating for 2 years as Governor Kempthorne’s lieutenant Governor, I appreciate your efforts

on behalf of the House. But I also probably would put us all on notice in this committee, as Members of Congress, that perhaps we

should look to more points of order on the floor, and the opportunity to bring them up so as to sort of offer notice to anybody else

that would bring unfunded mandates to the floor of the House, that

that could happen on a regular, and probably more-often basis.

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If there is no further questions of the second panel, Mr.

Mannweiler, Mr. Scheppach, I thank you very much for being here

today, and we look forward to receiving the information that we requested. Thank you.

Mr. MANNWEILER. Thank you.

Mr. SCHEPPACH. Thank you, Mr. Chairman.

Mr. OTTER. Our third panel today is going to be Mr. Scott Holman, Senior, who is the chief executive officer for Bay Cast, Inc.,

from Michigan, and chairman of the Regulatory Affairs Committee

of the U.S. Chamber of Commerce.

With him will be Mr. William L. Kovacs, vice president, Environmental and Regulatory Affairs of the U.S. Chamber of Commerce.

Gentlemen, could we get somebody to change the name cards?

We will momentarily be changing that name card, Mr. Holman,

so we know who you are. We thank you both very much for being

here today. Mr. Holman, you have the floor.

STATEMENTS OF STEVE HOLMAN, SR., PRESIDENT AND CHIEF

EXECUTIVE OFFICER, BAY CAST, INC., CHAIRMAN, REGULATORY AFFAIRS COMMITTEE, U.S. CHAMBER OF COMMERCE; AND WILLIAM L. KOVACS, VICE PRESIDENT, ENVIRONMENT, TECHNOLOGY & REGULATORY AFFAIRS, U.S.

CHAMBER OF COMMERCE

Mr. HOLMAN. Thank you very much, Mr. Chairman, and members of the two committees, my name is Scott Holman, and I am

owner and president and chief executive officer of Bay Cast, Inc.

of Bay City, MI. My company is a manufacturer of large custom

steel castings for the automotive tooling, machining, steel mill and

construction industries. I am also regional vice chair of the U.S.

Chamber of Commerce and chair of the Chamber’s Regulatory Affairs Policy Committee. My testimony will focus on the private-sector mandate requirements of UMRA.

UMRA is successful at the congressional level. Rather than restating much of what is in my written testimony, let me go directly

to the U.S. Chamber’s suggestions for changes to UMRA. Title I of

UMRA has been generally successful. However, the U.S. Chamber

has one recommendation for amending Title I, specifically in the

106th Congress by a large margin, the House passed the Mandates

Information Act sponsored by Representative Gary Condit. This

legislation would treat private-sector mandates the same as intergovernmental mandates. The U.S. Chamber supported this bill last

year and would once again strongly support similar legislation this

session.

Agencies are not held to the same high standards that the Congress has set for itself. Under Title II, agencies must prepare an

UMRA statement for all rules that would impose Federal mandates

exceeding 100 million to State, local and trilateral governments or

to the private sector. Moreover, section 205 requires that agencies

consider several alternatives when proposing regulations and select

the least costly, the most cost-effective or the least burdensome alternative.

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stances, however, agency actions have prevented the policy of Congress from being achieved, unlike Title I, which requires independent CBO statement describing potential legislative mandates. Title

II does not require an independent review of potential regulatory

mandates.

Due to lack of independent review, an agency may deliberately

underestimate the cost of a proposed rule or conclude that UMRA

does not apply because of other statutory provisions. In these instances, the agency controls both the information and the debate

and its determination is virtually unreviewable. Federal regulatory

agencies should not be allowed to avoid congressional mandates by

mischaracterizing the cost of a rulemaking. New provisions should

be enacted to address this deficiency. To this end, the U.S. Chamber provides the following two recommendations for revising Title

II of UMRA.

First, Title II should be amended to establish independent analysis of UMRA statements conducted by agencies when considering

mandates and independent bodies, such as the Office of Management and Budget or GAO, should be charged with reviewing the

agency’s mandate analysis.

The second recommendation is to permit early judicial challenges

to an agency’s failure to prepare UMRA statements that accurately

estimate costs and benefits. In my written testimony, I provide two

examples of agency abuse of the UMRA process. The first example

involves the TMDL water quality rule, in which EPA estimated the

cost about $23 million a year and the cost asserted by the State

environmental profession was $1.2 billion annually, $1.2 billion,

with a B, annually.

My second example involves EPA’s national ambient air quality standards. Estimates of annual compliance costs range from $45

billion to $150 billion, despite the significant mandates, EPA

claimed, because the Clean Air Act prohibits EPA when setting the

NOx from considering the types of estimates and assessments described in Section 202. UMRA does not require EPA to prepare a

written statement under 202. However, nothing in the Clean Air

Act, UMRA or the Supreme Court decision prohibits EPA from

fully describing the costs and benefits of its regulations for the public debate in this issue. Therefore, a multibillion dollar regulation

went into effect without significant information about the costs, the

benefits or the alternatives to the proposal.

Requiring better information through UMRA will have a tremendous impact on how agencies develop regulations. For example,

UMRA section 205 requires that agencies consider many alternatives when proposing regulations. From these alternatives, section 205 also requires agencies to select the least costly, most costeffective or least burdensome alternatives that achieve the objectives of the rule or explain why more burdensome options are necessary.

However, 205 is not operative unless an UMRA analysis, as specified in section 202, is required. Therefore, when the agencies circumvent section 205 by concluding an UMRA analysis is not required or by grossly underestimating the cost of UMRA, the agency

thwarts the intent of Congress. It is for these reasons that the

Chamber recognizes that, No. 1, the Mandates Information Act be

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enacted to prevent so that private-sector mandates are treated the

same as intergovernmental mandates.

No. 2, that OMB or GAO be authorized to undertake a role in

Title II of UMRA similar to the CBO rule in Title I of UMRA and,

No. 3, that agency abuse of UMRA requirements be subject to early

judicial review.

Finally, Members of Congress, especially the members of these

committees, deserve great credit for their leadership and generally

bipartisan support for several other measures to improve the regulatory process. These measures include the Truth in Regulating

Act, the Congressional Review Act, the measures on data access

and data quality, and these measures require rulemaking to contain a minimum standard of integrity. But, the foundation to all of

these efforts would be a strong UMRA, one that treats mandates

in the private sector with the same attention and analysis as mandates in the public sector are.

I thank you for letting me testify. I am certainly happy to answer

any questions, bearing in mind that my expertise is in running a

foundry and complying with regulations and I may defer to Bill on

some of the details of which he deals with on a daily basis and in

the language that he deals with on a daily basis.

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

[The prepared statement of Mr. Holman follows:]

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Mr. OTTER. Mr. Kovacs.

Mr. KOVACS. Thank you, Mr. Chairman and members of the two

subcommittees. My name is Bill Kovacs, and I am the vice president for Environment, Technology and Regulatory Affairs at the

U.S. Chamber. In that role, I am the primary officer for developing

Chamber policy in the areas of environment, energy, natural resources, agriculture, food safety, regulatory affairs and technology.

So I see a lot of rulemaking.

I would like to say I fully concur with both our—the very extensive written statement that we have filed—filed by Scott, as well

as this oral testimony. And I have very little to add. However, I

would like to say just a few things, just a few points, and then I

would be willing to take questions along with Scott. One is, there

were a few statements that were made by Director Daniels that,

you know, he made fleeting that were very, very important. One is

the data must have integrity and quality.

We now have the Data Quality Act that was put into the last appropriations bill, and that does require integrity in all the data

that are used and disseminated by the government. That is the

first time in the history that we have ever had anything that requires data quality. And, that includes statistical and economic information.

The second is, he made a point of saying a lot of these costs are

known very early on in the regulatory process. You know, the second the rule comes out, we know what it is going to cost. We have

committees. We have a very good handle on the rule and the agencies do, too, and that information is communicated to the agency.

So when the agency decides that it is not going to present the economic data in a way in which might be—might have integrity, they

know what they are doing.

And, third—and we have it as part of our—of our written statement, the TMDL example is the case—the case law for this issue,

because there you can go right from the preliminary rule that was

filed. You can go into the thousands of pages of comments that

were filed on the economics of the issue, both by the private sector

and by the States. You then go into the GAO report, the comments

by EPA to the GAO report. And, then the comments by GAO to the

EPA report and then to a final rule, and nothing changed in between from the preliminary UMRA assessment to the final UMRA

assessment, nothing changed. That is the textbook example of what

it is.

Mr. Otter, Congress did do something. They at least put in a

rider on the VA, HUD and military construction appropriations,

and they did cutoff EPA’s ability to fund the project, and that may

in the end be the ultimate. So thank you very much, and I will answer any questions.

[The prepared statement of Mr. Kovacs follows:]

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Mr. OTTER [presiding]. Thank you very much, Mr. Kovacs, for

your testimony, and I would ask Chairman Linder to begin his

questioning.

Mr. LINDER. Mr. Kovacs, did you work through the Chamber

with the Senate? Trying to get them to take the bill up on the calendar when we passed it last year?

Mr. KOVACS. The truth in regulating?

Mr. LINDER. H.R. 350.

Mr. KOVACS. Oh, yes.

Mr. LINDER. Did you work with the Senate?

Mr. KOVACS. I didn’t personally, no, but our lobbyists did, yes.

Mr. LINDER. And, their response was?

Mr. KOVACS. We weren’t having much luck. Thanks to the help

of your counsel, at the end of the last session, we were able to negotiate getting the Truth in Regulating Act to the Senate. But, we

had the same difficulties there that we had with UMRA.

Mr. LINDER. When you talk about the integrity of information

and data quality and, Mr. Holman, you talk about agencies deliberately underestimating and their estimates were unreviewable.

What my ears heard is that you think that we have some agencies

that are deliberately lying to us. Care to comment?

Mr. HOLMAN. I think not to characterize the intent, but certainly

at best, they have not taken the care to review all of the information available from the agencies, from the public sector and even

pay attention to it. And proceeded—— Mr. LINDER. Excuse me for interrupting, but I think Mr. Kovacs

said they had the opportunity to review all that in the TMDL rule

and they ignored it.

Mr. HOLMAN. Then the answer to your question is maybe yes.

Mr. LINDER. Has anybody done a real estimate of the costs of the

new clean air rules? Is there any private-sector cost of that?

Mr. KOVACS. There are—you know, when you talk about economic studies, it depends what your assumptions are and I am not

an economist. But the numbers seem to range from about $45 billion, which is EPA’s number, and they started out at about $5 billion and it worked its way up. The Reason Foundation estimates

that it could go as high as $150 or $160 billion annually. These are

annual costs.

Mr. LINDER. Per year. Just to make one final point that is entirely parochial, we have a—we cannot build any more highways

because we are under a court order in Atlanta, and so we have millions of cars sitting at 15 miles an hour instead of going through

town and that is probably worse for the environment than if they

were to move through town. But, we have cleaner air than we had

10 years ago, and 10 years ago we had cleaner air than we had 20

years ago. But, it seems to me that the EPA has discovered a new

piece of equipment that measures smaller particles, and that becomes a new standard. Has anybody taken issue with them on

these issue—on that clear air rules?

Mr. HOLMAN. Well, we, too—we in my business as the foundry

manager, have paid close attention to the particulate matter, and

where you go from 0.10 to 0.02 particulate matter, you can hardly

walk through the shop without having that enter the air. So that

is a very serious problem for us, and I think we became involved

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at the U.S. Chamber with this because of the impact. It was—as

I understand it—deferred for a while, but it is still standing out

there waiting for us to deal with that down the road. So I still have

a concern about that.

Mr. KOVACS. Congressman, as you very well know, the U.S.

Chamber was one of the plaintiffs in the litigation, and we took the

case to the Supreme Court. We won at the U.S. Court of Appeals

and lost at the U.S. Supreme Court. They reversed and indicated

that there was no cost-benefit requirement in the Clean Air Act. As

you know, we worked with you on the amendment at the end,

which—and this is a perfect example of how you have to deal with

an agency.

Congressman Linder is very familiar, but when this case was at

the Supreme Court and this was it literally a stay in the proceedings and the case had not been argued, EPA had decided very early

on in the—when the case had just been accepted that they were

going to actually, at that time, designate the nonattainment areas

prior to a Supreme Court review, and Congressman Linder then

got another amendment to the EPA’s budget, which prohibited

them from designating until the Supreme Court ruled. But the significance of that is, on highway funds, for example, the agency

could cutoff the funds.

But, it is far more than highway funds. When you are in nonattainment, you also have to live within certain emission budgets

and tradeoffs, and a lot of times you are not able to expand your

business if you are in a particular area. Or if you do, you are going

to have to have a tradeoff with some other business. So it has tremendous economic consequences and we have been involved in that

and we will be involved in the next rulemaking, which is going to

have to go on very fairly soon.

Mr. LINDER. Thank you both very much.

Mr. OTTER. Mr. Portman.

Mr. PORTMAN. Thank you, Mr. Otter. I want to thank you, gentlemen, for being here today and for the Chamber’s work over the

years on this. Having been cosponsor of the Condit bill—the

Condit/Portman and having testified in the Senate on this bill in

the efforts to try to move the Senate, I would agree with Mr.

Linder’s analysis, which is, we did not have the enthusiasm over

there that we had hoped for, and despite some hearings, we were

never able to move it to the floor. I don’t know that, with the

changes over the last several hours in the Senate, we are going to

have any more luck. So keep the pressure on.

I am more optimistic and pleased that the administration is interested in actually implementing Title II in a way many of us

hoped it would have been implemented over the last 5 years. And

sorry, Mr. Chairman, I couldn’t be here this morning for Mr. Daniels’ testimony, but I understand that he made a commitment, not

only to ensure that Title II is enforced and that 205 is followed, but

that he would actually require that there be a statement even in

cases where the threshold might not be deemed to be met by the

agencies and that he was going to insist that the agencies err on

the side of more rather than less information, which I think is a

huge step forward. And I just wonder, given your recommendation

today of independent analysis by OMB or GAO or some other body.

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Then your second point about judicial review, your recommendation in those regards, do you think it is necessary for us to pursue

legislation in those two areas at this point, or would you like to

wait and see how the new administration, in fact, is going to implement Title II to see whether that, particularly with regard to your

first recommendation, might be sufficient?

Mr. HOLMAN. Do you want me to take that? Personally, I was delighted to hear that, and I think that in the short run, that is, you

know, very, very encouraging. I am anxious to see that put into

place. It falls in the category of Executive order. These things can

change. If we were able to put into legislation a fair and honest

and informed debate, that is in there for the long haul, and—but

we certainly are delighted to hear that the administration is moving in this direction.

Mr. PORTMAN. Mr. Kovacs.

Mr. KOVACS. Well, I would certainly concur with Scott’s comments.

Mr. PORTMAN. Well, I appreciate that, and I think in the past we

have always worked with OMB and that was sometimes a challenge and this OMB is going to be more interested in pursuing this

issue with vigor and may even push us a little bit as a Congress,

which I like. I think, Mr. Chairman, this is an issue that the subcommittee might want to take up, and having CBO have that independent analysis of our committee statements of impact on the

public sector side and private-sector side has been very helpful, and

I want to commend CBO for the work they’ve done. They had to

staff up. As you can imagine, there is a lot of gnashing teeth and

nervousness about whether CBO would be able to do this. In fact,

on the floor we had a big debate about whether it was even possible for CBO to do it. They indicated they thought they could with

some more resources. They had done a stellar job in the Rules

Committee.

Mr. Linder has been a champion of this rule and despite the fact

that the Rules Committee also had many concerns about how this

would tie up the legislative process and turned out Mr. Linder was

right. This would work and could work, and I just think it might

be appropriate to go back now and see whether an independent

third party could also review any agency actions. Judicial review

is a very tough issue on the floor. We got into some judicial review

as you know. It is more of the process than merits and that is

something that I would certainly be vested in taking a look at, trying to expand that judicial review to the actual merits of the analysis. But, again, having an administration to work would you say is

going to make a tremendous difference there as well and we look

forward to their input also.

Thank you, Mr. Chairman.

Mr. OTTER. Thank you, Mr. Portman, for those final comments,

and I certainly would agree, and I appreciate both of you gentlemen for the work that you have done prior to my arrival here, but

you can expect an enthusiastic champion at your side from now on,

another one from Idaho, I might say.

Gentlemen, you were here during the two previous panels, and

I am concerned and still befuddled by the fact that we should be

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miliarity and a camaraderie and philosophical attunement with the

President and Chief Executive, I would be reticent to—as the

Founding Fathers told us not to be, to depend on that.

We can’t always expect our champion as—of the Chief Executive

order to be in the executive mansion, and so I am more of an enthusiast of being a government of laws as we were intended and

not a government of Executive orders. I think we can see in the

previous administration how that cannot always serve, although

perhaps their best intents, not the Nation as a whole, to the benefit

of the Nation as a whole. So I would be more interested in the

Chamber with your assets, with your talents and abilities. And the

fact that you have had to suffer under a lot of these things, it

seems to me that there is no better disciple for reform than one

that has had to suffer under and labor under those kinds of rules

and regulations.

So, I am in hopes that both of you gentlemen will go back to your

organization and the other organizations that you belong to and

make no mistake about it. Butch Otter from Idaho and the First

Congressional District wants clean air, wants clean water just like

everybody else, but when no assessment has been made on what

the cost was going to be for arsenic. When there was no assessment

made of that, to go from 50 parts per billion to 10 and a comment

was made, well, all we want is clean water by one of my colleagues,

my freshman colleague. And I believe that as well.

All I am asking is that they understand what that does to us in

Idaho. I don’t want to affect the clean water that is being turned

on by that tap. In fact, I want that for my children and my grandchildren. But, when they voted for that bill, they affected 87,000

miles of streams and stream bank in my district. 119 water districts, the same amount of sewer districts, and they affected lives— the economic and social lives. And I say both economic and social,

and perhaps spiritual, of 700,000 people in my district. How did

they do that? Because we shut down 23 log mills, and because of

that lots of lives were lost. Entire cities were closed down, and people will have to move away. That affected their social life and certainly their spiritual life.

The horror stories go on and on, and I am concerned that unless

we actually put something in the law, similar to Mr. Holman, if

your machinery—if your pollution abatement equipment wasn’t up

and operating, you would shut down that entire plant, and until

you were given a permit to open that plant back up by some government agent, you wouldn’t get to do it.

Quite frankly, I think we need that same kind of responsible deterrent for the government, and the reason for that, I believe, is because it is not Butch Otter who has to go and face the people of

the State of Idaho every 2 years who enforce those laws. It is

unelected bureaucrats who do not have to stand election, who do

not have to go back and ask for their job every 2 years.

I think we need something in the law, and I would certainly appreciate it. I appreciate your testimony here today. But, I would

certainly appreciate it if we could get some kind of boilerplate legislation, maybe not this year and maybe not next year, but eventually we will see the wisdom of passing and restraining the government as much as we want to restrain the private property holder.

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So with that, unless you gentlemen have further comments, further questions, Mr. Portman, Mr. Linder? Then the committee

stands adjourned, and I thank you very much for being here.

[Whereupon, at 12:26 p.m., the subcommittees were adjourned.]

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