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IMPEDIMENTS TO JOB CREATION IN MICHIGAN 

HEARING 

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT OPERATIONS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

MAY 6, 2014 

Serial No. 113–117 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

Vacancy 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

STEPHEN CASTOR, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS

JOHN L. MICA, Florida, Chairman 

TIM WALBERG, Michigan 

MICHAEL R. TURNER, Ohio 

JUSTIN AMASH, Michigan 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

GERALD E. CONNOLLY, Virginia Ranking 

Minority Member 

JIM COOPER, Tennessee 

MARK POCAN, Wisconsin 

(III) 

C O N T E N T S 

Page 

Hearing held on May 6, 2014 ................................................................................. 1 

WITNESSES 

Mr. Chris Fisher, President and CEO, Associated Builders and Contractors 

of Michigan 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 7 

Ms. Janet Kaboth, President and CEO, Whitacre Greer Company 

Oral Statement ................................................................................................. 10 

Written Statement ............................................................................................ 13 

Mr. Michael Lenahan, President, Resource Recovery Corporation of West 

Michigan 

Oral Statement ................................................................................................. 16 

Written Statement ............................................................................................ 19 

Mr. Richard Kligman, President, Superb Custom Homes 

Oral Statement ................................................................................................. 22 

Written Statement ............................................................................................ 25 

APPENDIX 

The Dodd-Frank Act: A Regulatory Impediment to Job Creation by James 

E. Tompert, Esq., submitted by Mr. Lenahan ................................................... 56 

Comments of Thomas J. Slavin, CIH, CSP, CSHM, CPEA on Proposed OSHA 

Rule for Occupational Exposure to Respirable Crystalline Silica, submitted 

by Rep. Mica ......................................................................................................... 67 

(1) 

IMPEDIMENTS TO JOB CREATION IN 

MICHIGAN 

Tuesday, May 6, 2014 

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON GOVERNMENT OPERATIONS

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Washington, D.C. 

The subcommittee met, pursuant to call, at 9:05 a.m., in Plymouth Township Hall, 9955 N. Haggerty Road, Hon. John L. Mica 

[chairman of the subcommittee] presiding. 

Present: Representatives Mica and Bentivolio. 

Staff Present: Mark D. Marin, Deputy Staff Director for Oversight; Katy Rother, Counsel; Sarah Vance, Assistant Clerk. 

Mr. MICA. Good morning. I would like to call this hearing of the 

United States House of Representatives Committee on Oversight 

and Government Reform hearing to order. This morning we have 

the subcommittee field hearing of the Government Operations Subcommittee. I would like to welcome everyone. We are here at the 

request of my colleague, the gentleman from Michigan, Mr. 

Bentivolio, and this is one in a series of hearings we are holding 

around the country. 

The responsibility of the Oversight and Government Reform 

Committee is to secure several fundamental principles. First, 

Americans have the right to know that the money the government 

takes from them is well spent. And second, Americans deserve an 

efficient and effective government that works for them. The Oversight and Government Reform Committee is to ensure that these 

rights and responsibilities of the government are upheld. 

It is absolutely essential in our system to have accountability. 

We have committees that have jurisdiction for creating different 

government programs. We have committees that appropriate and 

fund programs. Our particular responsibility is overseeing how 

those programs are working, how they operate and function in the 

best interests of the American people, and how their funds are 

spent. 

It is also good to be here in Plymouth. I want to thank the township for hosting us in this beautiful facility. I thank Congressman 

Bentivolio for inviting us and participating today in this hearing. 

I might tell folks that this is probably the first congressional 

hearing that has been held in Plymouth. Maybe there have been 

others; I don’t know about them. This is the first I know of. 

This is not a town hall forum. We do have a very formal schedule, and that is the order of our business. A complete record of this 

hearing is made. It will also be transcribed, and it is for official 

2 

purposes. So those who have been invited to testify this morning 

will do so. They will do so also under oath. We will introduce that 

panel shortly. 

The order of business is I will give an opening statement. I will 

yield to Mr. Bentivolio for his opening statement. We will also keep 

the record open. We don’t have our full subcommittee membership 

with us today, but members will be entitled for a designated number of days to submit statements for the record. 

I might say, too, for the public and officials and others who are 

attending, if you would like to participate in contributing to the 

hearing, you are welcome to ask through your representative, in 

this case Mr. Bentivolio, that your statement be submitted for the 

record. It would have to be done through a member of Congress. 

So that is the order of business we will conduct ourselves in. And 

again, I thank people for attending. Thank you for the invitation. 

Good to be with you here. 

The first thing that I want to do is, again, talk about why we 

are here and what the subject is. Today I think it is important that 

we look at not just the laws that are passed in Washington, but 

laws creating agencies impact us in that the agencies produce regulations, and that is their authority under law. 

In addition to the laws that we pass, we are now seeing the proliferation of rules and regulations coming out of agencies at an unprecedented pace. Those regulations do have very serious impact on 

the creation of jobs, the expansion of the economy, and also the 

ability for people to live and realize the American Dream because 

they all have an impact, a cost, and specifically we will see in this 

hearing some consequences in what happens in expanding jobs. 

According to the Congressional Research Service, between 2009 

and 2012 the Obama Administration finalized more than 13,000 

regulations. Last year alone, more than 3,500 new regulations were 

added to the books. By the Administration’s own estimates, major 

regulations issued in 2012 added almost $20 billion in annual costs 

to the American economy. 

Annually, Federal regulations cost the American economy a staggering $1.8 trillion. As the Competitive Enterprise Institute puts it, 

if it were a country, the U.S. regulations would account and be responsible for that particular activity being the 10th largest economy in the world. 

The growing regulatory state is particularly a concern for small 

business. According to the United States Chamber of Commerce, 

almost 45 percent of small businesses identify over-regulation and 

economic uncertainty as their most significant challenges. 

According to the National Federation of Independent Businesses, 

government regulations are the single most important problem facing small businesses. Oftentimes people think that big corporations 

are the primary employers in the United States. In fact, it is small 

business that is the biggest employer, and also the biggest job creator. 

So there is a concern, and that concern is warranted about the 

proliferation of these regulations. Last year, Federal agencies published proposed and final rules that, by the Administration’s own 

estimates, would cost the American economy $112 billion. 

3 

In the Obama Administration, Federal regulators have finalized 

rules that, in total, cost the economy again almost half-a-trillion 

dollars. 

So these are some of the facts that we want to make certain are 

part of the record. We are going to hear from several witnesses 

today. We have four witnesses, and I will introduce them shortly. 

I also want to pay attention and recognition to Mr. Lewis K. 

Uhler, who is President of the National Tax Limitation Committee. 

I met him just a few minutes ago. He has come all the way from 

California to attend this hearing, and his organization, the National Tax Limitation Committee, focuses on some of the issues like 

we are discussing here today. 

So it is nice to see folks from Plymouth, from Michigan, all the 

way from California who are concerned about the direction of regulations and the cost of doing business and making America go and 

grow. So, I am very pleased to welcome him and all of you again. 

I thank Mr. Bentivolio, and I will yield now to the gentleman 

from Michigan for an opening statement. 

Mr. BENTIVOLIO. Good morning. I want to start by thanking the 

chairman for holding this hearing in the wonderful 11th District of 

Michigan and for the opportunity to hear directly from business 

leaders about how the Federal Government is impacting the business environment. Thank you to the witnesses who are here to 

speak with us today. 

We are speaking about Federal regulations today because Federal regulations have the potential to significantly impact businesses and communities. The impact of regulations is often good. 

In my lifetime, the need for appropriate regulation has been made 

apparent from damage to our homes, families, and environment 

from a handful of bad actors. 

Not far from here, industrial pollution led to multiple fires on the 

Cuyahoga River in Ohio. In the 1970s, the nation was shocked by 

the tragedy of ineffective toxic chemical disposal at Love Canal in 

New York. Importantly, as a nation, we acted. 

In the 1960s, we passed the Clean Air Act and the National Environmental Policy Act. In the 1970s, we passed the Clean Water 

Act and the Occupational Health and Safety Act. When faced with 

serious concerns, we put in place many appropriate and effective 

regulations that protect our families, our workers, and our environment because clean water, healthy children, and safe work environments are important to all of us. 

But it is also important that we strike a balance. Affordable 

homes, steady employment, and the ability to provide for our families are important. Regulating for the sake of regulating only 

harms our families and our workers. As I walk around our community, I see ‘‘For Sale’’ and ‘‘For Lease’’ signs instead of ‘‘Help Wanted’’ signs. 

Unemployment in Michigan has been above the national average 

for more than a decade. According to the Heritage Institute, EPA 

regulations are expected to cost the nation more than 600,000 jobs 

by 2023. Michigan will lose more than 15,000 jobs in the manufacturing industry alone. The manufacturing industry faces some of 

the highest regulatory burdens in our nation, and the 11th Congressional District has the second-highest number of manufacVerDate Aug 31 2005 10:45 Jul 23, 2014 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\88670.TXT APRIL
4 

turing jobs. We can’t afford these regulations. We can’t afford to 

lose jobs because the EPA doesn’t know when to quit. 

Last year, the EPA proposed three regulations that, in total, will cost the economy more than $50 billion. If we keep going like this, 

we will regulate America out of business. 

Currently, there are many proposed Federal regulations that, if 

finalized, will threaten the survival of many Michigan small businesses, which will result in job losses. Today we will hear from 

those business leaders who are on the front lines, drowning in the 

sea of new and potential regulations. I look forward to the perspectives of those with real experience and knowledge about the impact 

of Federal action. 

Thank you, and I yield back. 

Mr. MICA. I thank the gentleman. 

The next order of business will be I am going to introduce our 

witnesses. 

Before I do that, I want to state for the record that members may 

have 7 days to submit opening statements for the record. 

Without objection, so ordered. 

And again, I welcome our witnesses who volunteered. We didn’t 

have to subpoena any of you today, which is good. Thank you for 

being part of our hearing today. In just a minute I will swear you 

in and you will be sworn before the committee. 

I don’t know if anyone has testified before, but we ask you to try 

to limit your presentation and testimony to 5 minutes, an oral 

presentation to the subcommittee. If you have lengthy material or 

additional information you would like to be made part of the 

record, we will be glad to do that through requests. That is sort of 

the rules of procedure. 

Today we have Mr. Chris Fisher. He is President and CEO of the 

Associated Builders and Contractors of Michigan. 

Welcome. 

We have Ms. Janet Kaboth. She is the President and CEO of 

Whitacre Greer Company. 

We have Mr. Lenahan, President of the Resource Recovery Corporation of West Michigan. 

Our fourth and final witness is a constituent of Mr. Bentivolio, 

and I will defer to him to introduce that witness. 

Mr. BENTIVOLIO. Thank you. 

It is my honor to welcome Mr. Richard Kligman here today in his 

capacity as President of Superb Custom Homes. 

Thank you for being here today, all of you. 

Mr. MICA. Thank you, Mr. Bentivolio. 

Now, if our witnesses will rise, please, raise your right hand. 

[Witnesses sworn.] 

Mr. MICA. Let the record reflect that all of the witnesses answered in the affirmative. 

Again, I welcome each of you, good to have you participate. As 

I said, if you have a long statement, we will ensure that through 

request it is in its entirety will be part of the record, but we would 

like you to try to summarize in 5 minutes. That will give us a 

chance to go through everyone. We will hold the questions until 

afterwards. Then Mr. Bentivolio and I will submit some questions 

for your response. 

5 

So, we will start first with Mr. Fisher. He is President and CEO 

of Associated Builders and Contractors of Michigan. 

Welcome, sir, and you are recognized. 

WITNESS STATEMENTS 

STATEMENT OF CHRIS FISHER 

Mr. FISHER. Thank you, Chairman Mica. Welcome to Michigan, 

and thank you for the invitation to be here today. My name is 

Chris Fisher with ABC of Michigan. We are a statewide trade association working in partnership with chapters representing firms 

who perform work in the commercial and industrial construction 

sectors of our state. 

Today I would like to focus on a few labor issues by drawing a 

contrast between what states like Michigan have been doing on the 

state level by enacting commonsense reforms and contrast that a 

little bit with what we are seeing in the Federal Government, 

where we have seen a rather onerous and one-sided, big-labor-driven agenda that is clearly not working. 

I will begin by taking, for example, in 2009, when President 

Obama issued Executive Order 13502 to encourage Federal agencies to require what is called a Project Labor Agreement, or PLA, 

on Federally-funded construction projects. Very simply, a PLA is a 

special interest handout designed to only award construction contracts to unionized contractors and their unionized workforce. 

There is nothing wrong with unionized companies getting a contract, but it is wrong when you have a special interest monopoly 

that denies that open competition and gives everybody a fair shot. 

So PLAs commit the expense of two important things that this 

committee and Congress should be very concerned about, equal opportunity and fiscal accountability. PLAs deny U.S. businesses and 

workers equal opportunity by prohibiting the 85.9 percent of the 

United States workforce that chooses not to be affiliated with a 

union from accessing work opportunities for public construction 

projects that are funded by their own tax dollars. 

PLAs also then discourage fiscal accountability because when you 

erode the competitive bid process like this, the ability for public 

procurement to reap the benefits of fair and open competition is diminished. The result, as studies have found, is that public construction costs escalate by as much as 10 to 20 percent on these 

projects that are subject to PLAs. 

Now, what we would suggest is that instead the Federal Government needs to follow the lead of Michigan and some 20 other states 

that have eliminated union-based favoritism in contracting by 

treating all workers and businesses, union and non-union alike, 

with the dignity that they deserve. This committee has jurisdiction 

over legislation introduced by Representative Andy Harris from 

Maryland, H.R. 436, the Government Neutrality in Contracting 

Act, which would prevent the Federal Government from further engaging in these unfair and costly procurement practices. 

Simply put, it is wrong to rip off taxpayers while denying citizens 

because of their labor status the opportunity that they deserve to 

work on public projects. 

6 

PLAs are not the only example of Federal regulations run amok. 

The out-of-control National Labor Relations Board, or NLRB, has 

continually pursued a one-sided agenda instead of doing what its 

core purpose is, which is maintaining a balanced approach on behalf of both labor and management. 

The latest issue of concern is the NLRB’s proposed ambush election rule. This rule is aimed to dramatically shorten the amount of 

time between when a union files a representation petition and 

when an election takes place to as few as 10 days. The harmful impact of this is that it therefore limits the ability of workers to gather information and facts as they weigh the important decision surrounding whether or not their company should be unionized or not. 

The National Labor Relations Board shouldn’t be discouraging 

workers to get the facts necessary to make an important decision. 

Contrast this with states such as Michigan, where we have instead 

passed pro-worker reforms that enable workers to gather the information they need to make these decisions. Michigan passed Right 

To Work recently, and indeed we support the ability of workers to 

gather the information they need to make a decision and not be 

forced to join a union as a condition of employment. 

Finally, OSHA is likewise a concern. Take, for example, OSHA 

stating that non-union workers are able to now—or that union officials are able to do worksite inspections for companies that are potentially targeted. Having an organizer, a community organizer on 

a job site raises questions about the actual intent of that union organizer. And, for that matter, it raises questions about what is 

OSHA doing in this arena to begin with. It is not germane to its 

cause of workplace safety. 

Here in Michigan, however, we have agreements with OSHA and 

partnerships with OSHA where we work cooperatively to promote 

worker health and safety, and indeed this is the way we should do 

things federally. 

So, Mr. Chair, these are just a few examples of some of the 

issues that we are seeing on the regulatory labor end of things. 

What we are doing in Michigan is working, and we encourage the 

Federal Government to do the same. We have gained construction 

jobs every year over the past three years in Michigan. Construction 

worker incomes have increased year after year after year, and we 

think that the states are laying down a pretty good framework for 

the Federal Government to follow, and we would encourage this 

committee and others to act. 

So, with that, I would be happy to answer any questions later 

on, Mr. Chair, and thank you. 

[Prepared statement of Mr. Fisher follows:] 

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Mr. MICA. Thank you, Mr. Fisher. 

Let me recognize Janet Kaboth. She is the President and CEO 

of Whitacre Greer Company. 

Welcome, and you are recognized. 

STATEMENT OF JANET KABOTH 

Ms. KABOTH. Thank you very much for the opportunity to come 

today. My name is Janet Whitacre Kaboth. I work for a company 

called Whitacre Greer, and we have been manufacturing clay products in northeastern Ohio since 1916. The company currently is 

owned by my brother, my sister and myself, and we are the fourth 

generation of my family to own and operate the company. 

I am here on behalf of my company and my industry. The many 

peaks and valleys of the brick industry is well demonstrated by the 

clay products industry here in Michigan, where in 1911 there were 

as many as 138 clay product manufacturing facilities. Currently 

there are seven, with only one brick plant. What has happened 

here has happened all over the country. 

Whitacre Greer is a small niche product manufacturer that produces fire brick for the inside of masonry fireplaces and paving 

brick. You have probably walked on our paving brick in places like 

Pennsylvania Avenue in D.C., Greenfield Village here in Michigan, 

and Joe DiMaggio Children’s Hospital in Hollywood, Florida. 

Our mission is to modernize our facility in order to succeed for 

the next 100 years. We have just begun the second of several 

phases in this modernization process. 

Our industry is committed to doing the right thing for our employees, vendors, customers, and communities. However, as we continue to struggle to come out of the Great Recession, we need to 

be sure our limited resources are being used on the most important 

issues that will provide some benefit for every dollar spent. 

Today I am going to talk about two upcoming regulations, the air 

toxic standard being developed by EPA, known as the Brick MACT, 

and the proposed revisions to the silica Permissible Exposure 

Limit, or PEL, being considered by OSHA. Compliance with either 

of these regulations threaten the continued existence of many small 

companies in our industry. Compliance with both of these rules at 

the same time will devastate our already-depleted industry. 

This leads to my constant question regarding the regulatory development process: Is anyone looking at the cumulative cost of 

these regulations on an industry? If these regulations would save 

lives of our workers or our neighbors, it would be worth it. However, in both cases, the regulatory authority has data that show the 

benefit of these regulations is minimal or non-existent for the brick 

industry. 

The Brick MACT, which will be proposed in August, was originally promulgated in 2003. Our industry complied in 2006 by installing 80 of the 100 controls now in existence at a cost of over 

$100 million in capital and operating costs. But in 2007 the courts 

vacated the rule. Now the EPA is using the performance of these 

new controls to establish even lower limits for the upcoming rule. 

For many brick companies, this would require them to replace the 

controls installed to comply with the first MACT. 

11 

We have used EPA’s own air dispersion models and actual stack 

parameters to clearly demonstrate that even under the worst conditions, 99 percent of our emissions would be less than 40 percent of 

what EPA considers safe, and most would be less than 10 percent. 

We have spoken with EPA about this data but have received no 

feedback as of yet. We hope EPA is considering this health-based 

approach. However, the EPA has indicated the potential that even 

if they consider the health-based approach, control of the remaining 1 percent of emissions could still cost our industry essentially 

the same as controlling the other 99 percent. 

EPA’s estimates put the potential cost of this regulation at more than $188 million per year. That represents 22 percent of our gross 

industry revenue in 2012. Whitacre Greer’s share of that cost is estimated to be $5 million, which is 50 percent of our current net 

worth. 

In September of last year, OSHA proposed provisions to the current PEL for silica. This reduction was proposed as a one-size-fitsall type of regulation that is typical for OSHA. OSHA estimates 

costs for this rule to average $38,000 per year, annualized over a 

10-year period, for a brick plant. This is 15 to 18 times greater 

than OSHA’s estimate for the average cost in general industry. Industry experts estimate that OSHA is underestimating this cost by 

as much as 20 to 50 times. 

OSHA has been provided a significant set of studies conducted 

over the last 75 or more years demonstrating that the silica found 

in the brick industry has a different effect on the body compared 

to silica in other industries. OSHA acknowledges separately the reduced incident rate of our industry and the much higher cost. However, they do not put those two pieces of data together to consider 

our industry separately. For each brick plant to comply will require 

an investment of $906,000 in the first year. This is the amount of 

cash that I need for compliance; therefore, the amount that is important to me, as opposed to the annualized amount. 

Practically speaking, compliance with both these regulations 

would require me to obtain a loan for $6 million to add equipment 

that would not reduce our costs, improve our product, increase our 

sales, or provide any health benefits for our employees or our 

neighbors. It would be impossible for us to obtain a loan of this size 

that would not provide us with any benefits at all in the current 

banking environment. 

The cost of compliance with both regulations at the same time 

would put us out of business, and we are probably not the only 

brick company in this situation. 

In both cases, EPA and OSHA have the flexibilities to meet their 

obligations without destroying our industry. We just don’t know 

how to make them use those flexibilities, to take the time to do it 

right, not just do it quickly, and avoid a one-size-fits-all approach 

that will destroy an industry. 

I would like to think that after 100 years of providing good employment, paying taxes, and being a responsible corporate entity, 

that someone in our government could look at the cumulative effect 

of regulatory compliance and help us protect our workers, our 

neighbors, and our environment, but still allow us to exist. 

Thank you. 

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[Prepared statement of Ms. Kaboth follows:] 

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Mr. MICA. Thank you for your testimony. 

We will now go to Mr. Michael Lenahan. He is the President of 

Resource Recovery Corporation of West Michigan. 

Welcome, sir, and you are recognized. 

STATEMENT OF MICHAEL LENAHAN 

Mr. LENAHAN. Thank you, Chairman Mica and Representative 

Bentivolio, for inviting me here today. My name is Michael 

Lenahan, and I am testifying on behalf of the American Foundry 

Society. The American Foundry Society is the predominant trade 

association of the metal casting industry in North America. Foundries manufacture engineered parts called castings, which are made 

by pouring molten metal into a mold. Most of the time these molds 

are made out of sand. Examples of metal castings that you may be 

familiar with are engine blocks, manhole covers, artificial knee 

joints, and the Liberty Bell. 

The U.S. foundry industry employs approximately a quarter of a 

million people, but 80 percent of those foundries employ 100 people 

or less. We are comprised primarily of small businesses. Many of 

the companies that supply foundries are also small businesses, and 

I run one of those businesses. 

My testimony today really boils down to one thing and one thing 

only: anything that takes time away from the efficiency of managing a small business can be crippling. Small businesses simply 

do not have the resources to dedicate to tasks that are non-productive. 

In order for any business to thrive, there must be time for the 

management of that business to do three things: one, focus on enhancing what they do well; two, improve productivity; three, expand offerings and grow the business. When management has time 

to look ahead and focus on improvement, they typically increase 

productivity and expand. This often results in the hiring of more 

employees. When management does not have time to focus on these 

things, they mark time and wait for the next crisis. For many businesses, the next crisis is addressing the latest regulation. Regulations and, more specifically, regulatory changes or new regulations 

consume massive quantities of managerial time and resources. 

From my viewpoint, there are five major problems that I see 

with Federal regulations. One, there are far too many new regulations. Two, many new regulations or modifications to regulations 

appear to be created or modified with minimal or no thought as to 

how they will impact a business. Three, many regulations are improperly conceived or misapplied and provide little to no measurable benefit. Four, new regulations have a cost, a cost that is often 

ignored or dramatically understated by those writing the new regulations. Five, new regulations create uncertainty, which limits a 

business in their ability to plan. 

I have three brief examples that I would like to reference as part 

of my testimony today as to how regulations impact small business 

and job creation. 

The first example highlights OSHA’s new Crystalline Silica 

Standard. I am submitting a copy of the foundry industry testimony given at the March 28, 2014 hearing with OSHA and the 

17 

U.S. Department of Labor. In the interest of time, I would like to 

briefly explain in layman’s terms the basics of this new rule. 

This new rule will reduce the permissible exposure limit for silica 

from 100 micrograms per cubic meter to 50 micrograms per cubic 

meter. What does 50 micrograms per cubic meter look like? Take 

a packet of artificial sweetener and distribute it across a football 

field at the height of 13 feet. That is what that looks like. 

As mentioned, foundries utilize sand, primarily made of silica, to 

make the molds which define the shape of the castings they 

produce. A foundry of this football field area size could be utilizing 

upwards of 10,000 tons of sand in annual production. As a reference point, it would take 400 semi dump trucks lined up bumper 

to bumper for approximately four miles. 

OSHA’s new silica rule would require all foundries not meeting 

the 50 microgram standard to put in engineered controls, basically 

massive high-quality filtration equipment, within the facility to get 

the foundry into compliance. On the surface, this may seem like an 

acceptable idea until you dig a little deeper. 

First, the vast majority of experts on the subject believe foundries will fail to meet the standard even if they use the best technology money can buy. Second, to provide some perspective, the 

level of cleanliness required to meet the new standard is more 

stringent than what the National Aviation and Space Administration, NASA, requires for silica in one of their laboratory clean 

rooms. Lastly, the new rule does not allow employers to provide 

workers with personal protective devices until after it proves that 

the installed engineering controls cannot meet the standard. In 

other words, this regulation says spend the money on extremely expensive engineering controls whether they work or not, and only 

after you prove it does not work can you distribute personal protective equipment to your employees. 

The logic behind this approach is flawed at the most basic levels. 

How many successful strategic initiatives involve choosing the most 

expensive and most likely option to fail first? This would be like 

forcing a public school district to purchase jet airplanes to transport school children because statistics show it is a safer mode of 

transportation than buses. Practical application of this idea would 

be more costly and not as safe. Eventually they would go back to 

buses, but only after they broke the bank on buying airplanes. 

This may sound like a ridiculous comparison. However, you will 

see in the executive summary of the attached testimony that this 

is not the most effective way to protect workers. You will also see 

that OSHA has omitted some costs and grossly underestimated the 

overall cost to implement this new rule, $44 million per year versus 

$2.2 billion. 

I think I am running out of time here, but I will make quick 

mention of NSPS Subpart UUU, which is the rule that was never 

intended to be applied to the foundry industry. This rule, we know 

it was not meant to be applied to the foundry industry because we 

got to the author at EPA and he said it was never meant to be applied. So we spent time chasing our tails on a rule that was never 

meant to be applied to us, spent money with attorneys, spent 

money working together as an industry, and it is for something 

18 

that will never gain any environmental benefit, nor was it meant 

to be applied to us. 

Thank you for your time. 

[Prepared statement of Mr. Lenahan follows:] 

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Mr. MICA. Thank you for your testimony. 

We will now turn to Mr. Kligman. He is the President of Superb 

Custom Homes. 

Welcome, and you are recognized, sir. 

STATEMENT OF RICHARD KLIGMAN 

Mr. KLIGMAN. Thank you, Chairman Mica and Congressman 

Bentivolio. On behalf of more than 140,000 members of the National Association of Home Builders, my name is Richard Kligman, 

and I am a builder from Plymouth, Michigan and serve as President of Superb Custom Homes. 

Housing services are a great example of an industry that would 

benefit from smarter and more sensible regulation. According to a 

study concluded by the NAHB, government regulations account for 

25 percent of the price of a single-family home. NAHB economists 

recently performed an analysis looking at the number of households in Michigan that would no longer qualify for a mortgage due 

to compliance with the latest building codes. New building codes 

would increase the incremental construction cost for a typical residence by $2,532. The base price of a typical new one-story home 

in Michigan is $121,040. Two-thousand-five-hundred-and-thirty-two 

dollars may not seem like a lot in the big picture, but the study 

indicates that 31,106 Michigan households would be priced out and 

denied the opportunity of home ownership. 

I believe this example illustrates just how impactful over-regulation can be, as many of the regulations being discussed will be significantly more costly to implement than $2,500. The bottom line 

is unnecessary regulatory costs hurt real people right here in 

Michigan. I would like to highlight a few of those regulations that 

are of concern. 

‘‘Waters of the United States’’ proposed rule. The Environmental 

Protection Agency and the U.S. Army Corps of Engineers recently 

proposed a rule redefining the scope of waters protected under the 

Clean Water Act. The proposed rule falls well short of providing 

the clarity and certainty our industry seeks. This rule will increase 

Federal regulatory power over private property and will lead to increased litigation, permitting requirements, and lengthy delays for 

any business trying to comply. 

These changes will not improve water quality, as much of the 

rule improperly encompasses water features that are already regulated at the state level. The proposed rule establishes broader definitions of existing regulatory categories such as tributaries, and 

regulates new areas that are not jurisdictional under current regulations. For any small business trying to comply with the law, the 

last thing it needs is a set of new, vague, and convoluted definitions that only provide another layer of uncertainty. 

OSHA crystalline silica rulemaking. OSHA’s proposed rule to 

control crystalline silica is the most far-reaching regulatory initiative ever proposed for the construction industry. Crystalline silica 

is a basic component of soil, sand, and granite, and is found in numerous building materials. 

OSHA is proposing an 80 percent reduction in the permissible 

exposure limit, PEL, for respirable silica dust. OSHA has not exVerDate Aug 31 2005 10:45 Jul 23, 2014 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 C:\DOCS\88670.TXT APRIL
23 

plained how a drastically lower PEL will effectively reduce the 

number of silica-related illnesses and deaths. 

NAHB believes OSHA should withdraw the proposed silica regulation until it can demonstrate that the proposal is technologically 

justified, economically feasible, and that it can be applied and understood in the real world of residential construction. OSHA’s proposal describes control methods that will ultimately cost the industry $3 billion annually. 

Federal involvement in local building energy codes. Building energy codes such as the International Energy Conservation Code, 

IECC, are used across the country to establish minimum standards 

for building energy efficiency. The codes are developed by private 

entities but then adopted by state and local governments. The Department of Energy participates in this process. While they do not 

develop the codes themselves, they are authorized to provide technical assistance. 

NAHB has serious concerns that this has been broadly interpreted to allow DOE to advocate for or against certain proposals. 

Homebuyers are willing to pay more for lower utility costs, but according to our data, buyers need a 14 percent return on investment, which corresponds to a seven-year payback. The 2012 version 

of the IECC has such significant cost increases it would take the 

average family 13.3 years just to break even on required mandates. 

For half of the State of Michigan, the payback period is actually 

16.1 years. 

Some companies and advocacy groups are now pushing Michigan 

to adopt this onerous and expensive code because it benefits their 

business, treating certain products favorably. The Home Builders 

Association of Michigan is trying to find a reasonable solution. 

OSHA’s fall protection standard. OSHA changed its residential 

construction fall protection regulation. OSHA rescinded its interim 

fall protection guidelines, which set out a temporary policy that allowed employers engaged in certain residential construction activities to use alternative procedures instead of conventional fall protection such as guardrail systems, safety net systems, and personal 

fall arrest systems for any work that is conducted six feet or more 

above lower levels. 

OSHA has not provided specific guidance regarding how it will 

interpret this standard or how builders are expected to comply in 

determining when the use of conventional fall protection is considered infeasible or its use creates a greater hazard. Builders have 

little assurance that their actions will meet OSHA’s requirements 

and could be saddled with costly fines or citations even though they 

are making good-faith efforts to comply. 

OSHA’s fall protection regulation should be reviewed under Executive Order 13563, Improving Regulation and Regulatory Review, 

to help make it more effective and less burdensome for small businesses, exactly as envisioned by the President. 

In conclusion, I appreciate the opportunity to share the thoughts 

of my trade association, the National Association of Home Builders, 

on Federal regulations impacting small businesses and job creation 

in Michigan. NAHB is not against appropriate, balanced regulation. Our members understand that regulation is needed—for exVerDate Aug 31 2005 10:45 Jul 23, 2014 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 C:\DOCS\88670.TXT APRIL
24 

ample, to protect the nation’s water supply and limit a child’s exposure to lead paint. 

Regulations that are workable and sensible, where the rules are 

easily understood and applied, could be the type generally supported by our industry. Unfortunately, our industry is participating 

in several rulemaking processes, some of which I have highlighted, 

where agencies avoid well-established policies of the Administration Procedures Act and neglect the safeguards of the Regulatory 

Flexibility Act in the interest of promulgating rules for self-serving 

political gain. 

Thank you. 

[Prepared statement of Mr. Kligman follows:] 

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Mr. MICA. Well, I thank you, and I thank all of our witnesses. 

Interesting testimony. 

It was interesting to start with Mr. Fisher, and he talked about 

Executive Order 13502, and we just ended up with Mr. Kligman, 

who was talking about Executive Order 13563, 61 executive orders 

in-between we didn’t even get to hear about. 

Interesting testimony today, and some tough consequences proposed by some of these regulations. 

What I thought I would do is I am going to go through some of 

the testimony that was provided by each of you, a few questions. 

First, Mr. Fisher, the project labor agreement provision that you 

talked about, you said that Michigan had eliminated that. When 

did Michigan eliminate that? 

Mr. FISHER. Michigan, Mr. Chair, eliminated the ability to have 

a government-mandated PLA in 2011 with the Fair and Open Competition Act. What it simply states is that all workers, union and 

non-union alike, that you can’t be discriminating against based on 

your decision to affiliate or not affiliate with a labor union, and it 

meant that all workers have the opportunity to access work opportunities on public construction projects. 

Before, you would have a special-interest-driven mandate that 

would state that only a contractor that is signatory to a PLA, 

which is a form of a collective bargaining agreement, would be able 

to perform that work. 

Mr. MICA. Now, is that only on state projects? 

Mr. FISHER. It would be state, local —— 

Mr. MICA. Because you are still subject to the Federal edict. 

Mr. FISHER. But unfortunately, we can’t get out from under the 

Federal edict, and that is the problem. 

Mr. MICA. Right. 

Mr. FISHER. Is this Federal regulation —— 

Mr. MICA. So one solution might be, where a state does allow by 

state law the elimination of the project labor agreement requirement, that they be allowed to proceed with implementation of the 

Federal. Would that be a possible solution? 

Mr. FISHER. That would be a possible solution. However, here in 

Wayne County, in the county to the north, Macomb County, where 

there is the Selfridge Air Force Base, for example, if there is a Federal contract there, that is completely under the jurisdiction of the 

Federal Government, or an interstate highway that is under the jurisdiction of the Federal Government, the Federal Government can 

still discriminate against workers and businesses in a local area 

based on labor affiliation. 

So we also think that the Federal Government should, in fact, 

enact a fair and open competition law to, again, protect taxpayers 

and workers so that everybody could have an equal opportunity to 

pursue work in their communities. 

Mr. MICA. You said the disparity could be 10 to 20 percent. Do 

you have any anecdotal information as to the effect of Michigan’s 

provision? 

Mr. FISHER. I do, in fact. I think one great example is in the 

shadow of the state capital in Michigan, in Lansing, a new city 

market was built subject to a PLA. It wasn’t necessarily an expensive city market project. I think from start to finish it was about 

36 

$3 million. It was let out to bid under a project labor agreement, 

and the result was that the project came in entirely out of budget, 

to the tune of, I believe, 25 percent over budget, and the city market wasn’t able to be built until they re-bid the entire project, 

opened up the bidding process, allowed everybody to participate, 

and then once you had the benefits of fair and open competition, 

and only then, was the project able to be on budget and finally get 

completed. 

Mr. MICA. Aside from the labor issue that you mentioned, you 

talked a bit about OSHA, and we have heard some others refer to 

OSHA and their overreach. How can we ensure protection of workers without some of the Federal interference through OSHA? You 

said you have what sounded like a fairly good relationship and 

cited some of it as a model. How does that work? Are you just getting volunteer cooperation with OSHA, or is this something that 

can be a template for others to adopt? I have never heard of this 

before. Maybe you can explain it better. 

Mr. FISHER. Yes, I would be happy to, Mr. Chair. Michigan, 

under OSHA, is what is called a delegated state, and OSHA does 

have a provision that allows a state to handle the health and safety 

functions of OSHA, to administer it under the belief that government that is closest to home can govern best, that federally we 

don’t need to necessarily be as hands-on if a state is able to, as long 

as they comport with all of OSHA requirements. Michigan is one 

of the states that is able to do that. 

Mr. MICA. So is the state enforcing the OSHA requirements? 

Mr. FISHER. Correct. 

Mr. MICA. Okay. 

Mr. FISHER. So what we have been able to do by having a partnership that is closer to home, closer to the Michigan-based construction industry, is form alliances. We are right now in the process of forming an ABC and OSHA alliance, and it is geared towards that key, core role of OSHA, which is to promote worker 

health and safety and use a fact-based approach to methods that 

actually work. 

Mr. MICA. Is this done just by an agreement with the state and 

OSHA? 

Mr. FISHER. Yes. 

Mr. MICA. Okay. I am not that aware. Everyone thinks all the 

members of Congress know all the programs, but this delegation 

authority is under law. Is it just certain designated states by law, 

or can any state —— 

Mr. FISHER. A state applies to Federal OSHA and is able to do 

so, and Michigan —— 

Mr. MICA. Okay. And do you know how many states participate 

on this basis? 

Mr. FISHER. I would be happy to get that to you. I don’t know. 

Mr. MICA. Okay. I think that would be interesting. Maybe the 

staff could add that in the record. 

Mr. MICA. But that is an interesting concept. I don’t see why it 

couldn’t be further applied. If Michigan can do it, certainly it could 

be a model for other states. I don’t know how many others do that, 

devolving to the states some of this responsibility. A lot of what we 

do at the Federal level is duplicative, not only in enforcement and 

37 

regulation but a whole host of areas, permitting, where we could 

be much more efficient. 

But thank you for bringing that to light and to the committee. 

We can look at that, too, and maybe consider expanding some of 

those provisions in future law. 

Okay, Ms. Kaboth. You produce those bricks that we walk on? 

Ms. KABOTH. I do. Not alone, though. But, yes, we do. 

Mr. MICA. That is interesting. You talked about, again, some of the regulations, the cost to you would be $6 million, with no apparent benefit. What would happen if they force you to do this? 

Ms. KABOTH. Well, we would have to close. 

Mr. MICA. How many people do you employ? 

Ms. KABOTH. We employ 80 people. 

Mr. MICA. Eighty people? And you have been in business it 

sounds like a long time? 

Ms. KABOTH. Yes, since 1916. We are getting ready for our 100th 

anniversary. 

Mr. MICA. That is great. 

Ms. KABOTH. Most brick companies are like us. It is not an industry that most people want to join because the capital costs are 

very great, the return is really not wonderful. Most of the companies are long-time family-owned businesses like ours. 

Mr. MICA. Is there a lot of competition in the industry? 

Ms. KABOTH. There is. However, that is why we specialize in the 

niche markets. That is the only reason why we are even still here. 

We don’t have the resources to compete with the big companies, so 

we stick with the paving brick, the fire brick for fireplaces, a place 

where we have been able to thrive. We do a lot of custom work. 

Mr. MICA. Now, will that just narrow the competition by you 

going out of business, or is there foreign competition? Are there 

other sources for —— 

Ms. KABOTH. There is no foreign competition, really. Brick is too 

heavy to import. The costs would be much too high for the freight. 

If we would be gone, it would reduce the choices for a lot of places. 

We are a very high-end, customized product, and we supply a lot 

of universities and colleges. So they would just have to find someone potentially who could do what we do, and there aren’t many 

left. 

Mr. MICA. And the silica rule you talked about was the same one 

that everyone is talking about? 

Ms. KABOTH. Yes. 

Mr. MICA. There is nothing different, it’s just the difference in 

the impact on each of you, and particularly devastating to your operations. 

Ms. KABOTH. Well, and it is not just for the cost. I have been 

with Whitacre Greer for 35 years, and we have never had one person be ill from silica. I mean, that is part of our industry statement, that we have studies for over 75 years that our employees 

just don’t get silicosis. So it is ridiculous to have a rule that is just 

so expensive that isn’t going to help anybody. 

Mr. MICA. Have you employed other means of protection of the 

workers? 

Ms. KABOTH. We do. We have a number of things we do to reduce 

the dust overall in our facilities, and most facilities are very good 

38 

at that. But to get to the level that OSHA is requesting is, to be 

honest, almost impossible, even with the engineering controls and 

everything else they want you to do. 

Mr. MICA. Mr. Lenahan, was it you who testified about the 

amount that is allowed in a space laboratory, I guess it was? 

Mr. LENAHAN. Yes. Actually, the standard is cleaner than the 

NASA clean room, which is a reference point I think we all think 

of, a clean room and how clean that environment would be. And to 

have an industrial plant that handles tens of thousands of tons of 

material —— 

Mr. MICA. When these rules come out and you have an opportunity to be heard on them, do you feel that is adequate? Are they 

listening? Has there been opportunity, do you think, to be heard? 

Mr. LENAHAN. I can answer that if no one wants to step in. 

Mr. MICA. Go ahead. 

Mr. LENAHAN. The second rule that I mentioned there was Subpart UUU, which was an A rule. It was never meant to be applied 

to the foundry industry. We were not given an opportunity to provide information on the rule because —— 

Mr. MICA. Even though you were impacted, were you noticed? 

Mr. LENAHAN. No. 

Mr. MICA. You were not? 

Mr. LENAHAN. No. 

Mr. MICA. Okay. 

Mr. LENAHAN. And that was one of the dilemmas. We wound up 

going back to EPA. We said we were never—this was never meant 

to apply to us and we never had an opportunity during comment 

period, never were identified, and then when we got to the author 

of the rule he said, no, you guys never should have been included 

in this rule. This was for industrial sand production, not for foundries. 

Mr. MICA. And you are not currently under that mandate, or are 

you? 

Mr. LENAHAN. We are. It is actually one of those things —— 

Mr. MICA. Even though they said that you weren’t noticed and 

it wasn’t intended to apply, they have made no exception? 

Mr. LENAHAN. That is correct. The right hand a lot of times does 

not know what the left hand is doing. 

Mr. MICA. Sounds typical in Washington. 

Mr. LENAHAN. And the enforcement arm of EPA—I want to be 

delicate in how I say this, but I don’t think they are really concerned about that sometimes. We have an ability or a capability to 

enforce on this whether it was meant to apply to you or not and, 

doggone it, we might just do that. 

Mr. MICA. Now, had you written your members of Congress on 

this issue? You have? 

Mr. LENAHAN. Yes. 

Mr. MICA. And the senators, too? 

Mr. LENAHAN. Yes, and I go typically to Washington, D.C. at 

least once a year as part of a contingent from the metal casting industry, and this was a Hill issue last year at our government affairs conference. 

Mr. MICA. And how does that affect you in competition or price 

or whatever? What is the impact? 

39 

Mr. LENAHAN. Unlike my colleague to the right, we are impacted 

heavily by offshore competition. Metal casting facilities since I entered the industry in 1987, there were 5,000 domestic foundries, 

and now there are about 1,900. The reason for most of that is because regulations have pushed the foundries outside of the U.S. 

Mr. MICA. And, of course, all of them are complying with these 

high standards when they manufacture or produce foundry activities outside the United States? 

Mr. LENAHAN. Absolutely —— 

Mr. MICA. Are products coming in very well manufactured and 

adhered to with the highest standards? 

Mr. LENAHAN. We don’t see that, and I will give you one real 

quick example. A friend of mine was grilling in his backyard and 

dropped a cast iron piece of his grill and it broke on the ground, 

and we knew that the grill parts came from China. He is a metallurgist, and he knew immediately what the problem was. He took 

the grill sample in to the spectrometer at the foundry, shot it, and 

found there was 40 times the amount of arsenic in that cast iron 

grill than there was in the domestic castings we were making onshore. So we see things like cast iron skillets that are made offshore, as compared to lodge manufacturing —— 

Mr. MICA. So we have no control over those products that are 

coming in. 

Mr. LENAHAN. There are no controls. 

Mr. MICA. What is the biggest competition? Is it China? 

Mr. LENAHAN. China is probably still the largest competition. 

Probably what concerns me more than anything on that is that we 

make a lot of military parts, and we can’t be dependent upon a 

country that may or may not be friendly at the moment to manufacture some of those parts. 

Mr. MICA. Foreign source. 

Mr. LENAHAN. One of my customers made all the engine blocks 

for the landing craft that landed on the beaches in Normandy. If 

we didn’t have those guys back during World War II, we might all 

be speaking German right now. 

Mr. MICA. So 1,900 left out of over 5,000? 

Mr. LENAHAN. That is just in —— 

Mr. MICA. Probably the employment would be pretty significant. 

Maybe we lost 30,000, 50,000 jobs? 

Mr. LENAHAN. I would say closer to 350,000 jobs. 

Mr. MICA. Oh, wow. So a very significant impact. It seems like 

there should be some way we could require certification of some of 

those products that were produced under the same standards. We 

are just talking now about certain and limited standards. If we got 

into some of the labor requirements and other regulatory regimes 

that we impose, we probably couldn’t import much of anything 

from those countries. Would you say? 

Mr. LENAHAN. I think the biggest thing that our folks tell us is 

we want predictability in what we can expect down the line. We 

don’t have any problem competing on a level playing field. 

Mr. MICA. But it is not level. 

Mr. LENAHAN. It is not level. When currency is under-valued by 

40 percent, they are pegging their currency to our currency, we 

know it is not level. When we see castings coming into the United 

40 

States that are cheaper than what the raw materials cost, we know 

it is not level. We know there is supplementing going on there. 

Mr. MICA. So you have gone from 5,000 to 1,900 foundries. Are 

we continuing to see the decline, or do you think the worst is over? 

Mr. LENAHAN. There is a little bit of stabilization, and I think 

one thing to remember is the guys who are running these businesses now, they are the cream of the crop. They are bright, smart, 

solid business people. They have had to be to survive. The next 

round of attrition will come with the new silica rule. There will be 

people who will pack up their tents. They are small businesses. 

They are going to say ‘‘I can spend my money to fight something 

that is not going to work, or I can pack up my tent and protect my 

family.’’ I think we will lose a bunch of businesses that way. 

Mr. MICA. Well, you point out the difficulty of surviving. I mean, 

we are here close to Detroit, and we have seen how competition in 

manufacturing has driven a lot of business overseas, almost caused 

the collapse of some of our businesses, particularly in the automotive industry over the years. But there are survivors, 1,900 in 

your business. I was very pleased to drive by the Ford operations 

on my way in and seeing that they are also surviving. But it is 

very tough, especially when you have the rules and regs stacked 

against you. 

Mr. LENAHAN. If I could make one other brief comment? 

Mr. MICA. Yes. 

Mr. LENAHAN. People assume that our industry is a dirty industry, heavy industry, and we are not. Our plant runs on renewable 

energy to actually clean the foundry sands, to repurpose them, and 

the foundries that we work with today, what is leaving their back 

door is being recycled at a rate of over 90 percent. So anything that 

they are discarding is going out at 90, 95 percent. The best households in the United States with regard to recycling are 20, 25 percent. So I think that is something also to remember. 

These are jobs that are important. They are actually green jobs. 

A lot of the products that we are making are from recycled materials also. That washing machine you put on your front lawn to discard, that is being re-melted and repurposed into a casting. 

Mr. MICA. Very good. 

Mr. Kligman, you talked about the new avenue the Administration is taking to change the definition of Federal involvement in 

water and the definition of wetlands and its impact. That is kind 

of interesting because I chaired the Transportation Committee and 

served as the Republican leader for a number of years, always trying to keep this at bay. People don’t understand the significance of 

unraveling the current definition, which only gives the Federal 

Government authority over navigable bodies of water. It would unravel all kinds of rulings, interpretations, and dramatically expand 

the involvement of the Federal Government, probably put a lot of 

your folks out of business. 

What are you all doing to weigh in on this with the Administration? The route they are taking now is the regulatory route, and 

we haven’t been able to do anything in Congress. But what actions 

are you taking? I know you are testifying today. 

Mr. KLIGMAN. Yes, sir, and I can have our staff provide you with 

—— 

41 

Mr. MICA. Have you written in on the rule, the proposed rule? 

Mr. KLIGMAN. I don’t have specific knowledge on that. I do have 

Forcewall, who is our legislative affairs representative. If you are 

interested in —— 

Mr. MICA. I would like to know, and I would like to know if you 

have submitted either to the Secretary and to your representatives. 

The problem we have is there are so many new people in Congress, too, who don’t understand the implications of this change. 

They have gone down the avenue of trying to change this legislatively, and it failed. Now they are coming in the back door through 

regulation. 

But the consequences are pretty dramatic. You get the Federal 

Government into this area, it is not just a question of them having 

a new regulatory regime and an expansion of it, but you are changing years and years of law, litigation, rulings, which would all unravel, and you would put all kinds of real estate at risk in the future. 

But I appreciate your being with us, but I think it is important 

that you and every state organization, and even individuals, weigh 

in on this, because you are going to get slammed pretty hard if this 

goes into effect. 

I think we have now carried probably 168 bills that are just sitting in the Senate. They won’t move any of them, and some of 

them, when they pass these regulations, the only way to undo 

them—well, there are two ways. One is through the Congress passing a law. Well, we can pass all we want in the House, and they 

sit in the Senate and nothing happens. 

The second is through court, and they very cleverly—I don’t 

know if you watched this. They packed the Federal District Court 

of Appeals in Washington. Part of the reason that we had this 

brouhaha in the Senate about going to 51 votes rather than 60 

votes for approval of some of the appointments was directed at 

packing the District Court of Appeals. It had a 4–4 sort of balanced 

approach of judges, and the Obama Administration, the President 

added three new judges there to pack the court. So if you can’t pass 

a law to overturn the regulation, your recourse as an organization, 

an individual, even folks in Congress could go to court. But most 

regulations are promulgated from the Federal level in Washington, 

and your venue of recourse is the Federal District Court of Appeals. So once you pack that, which they have done, they have succeeded in negating the 60-vote rule. They have appointed the three 

judges. Now you have no other recourse because they cut off your 

judicial recourse. 

So we are reaching a pretty serious situation in trying to stem 

the tide of some of these rules. This one is particularly ominous for 

the future of real estate building, a whole host of areas that could 

be very dramatically impacted. So I would just encourage you, and 

if you do have something you could provide to the committee in 

what you have done, I would like to see a copy of that, because we 

can also use that, and hopefully you are contacting your senators, 

too. 

Mr. KLIGMAN. Sir, if I may? 

Mr. MICA. Yes. 

42 

Mr. KLIGMAN. On your point, on a practical basis as well, if you 

had a ditch, for example, that filled up with spring rains here in 

Michigan for a month or two months a year, that could be categorized as a tributary. 

Mr. MICA. Well, I have heard everything—a puddle in the backyard, pools. 

Mr. KLIGMAN. Right. And then the permitting involved, and the 

time and exposure, it is not manageable. 

Mr. MICA. Well, again, it is the responsibility of Congress to try 

to change the law, but the votes aren’t there right now. Again, we 

don’t have recourse through the courts. You talked about the impact of $2,500 per home and actually 

pricing 3,100 people in Michigan out of that. Can you elaborate a 

little bit more? 

Mr. KLIGMAN. Well, we can provide the study for your review. 

But as costs are impacted nationwide, but particularly here in 

Michigan where we had such a prolonged downturn in the economy 

and it was devastating to the housing industry as well, the consumers are still very sensitive to cost. We, as a small volume builder, I still feel tremendous downward pressure on pricing from the 

consumers. And as we have costs going up, the question is who is 

willing to absorb them. If the consumer is not, then it either prices 

them out of the home or as a business person I have to make a 

choice of saying, okay, I am going to absorb that cost. But if I don’t 

have margins and my risk goes up, I can hire fewer people, create 

less job opportunities. So there is a direct correlation with cost and 

affordability, opportunities for people and job creation. 

Mr. MICA. If you could provide us a little bit more detail —— 

Mr. KLIGMAN. Certainly. 

Mr. MICA.—for the record on the basis of your estimates there. 

Then finally, I think you talked about the OSHA Fall Protection 

Rule 13563. Now, has that gone into effect? 

Mr. KLIGMAN. The standard is now being in effect. Yes, sir. 

Mr. MICA. And that is anything over 6 foot? 

Mr. KLIGMAN. Six foot from the lower level. And where it becomes impractical, I can give you just a couple of quick examples. 

If you had a low-pitched garage roof, your personal fall protection 

system requires you to tie off over your head. You can be standing 

at the edge of the roof and not have anything over your head with 

a low-pitched roof. So the code would require that you build a 

guardrail around the perimeter, and the cost and time involved to 

do that would be greater and more expensive than the tear-off for 

the roof. So again, the consumer is negatively impacted with that. 

Mr. MICA. Well-intended idea, but from a practical implementation —— 

Mr. KLIGMAN. But on a practical level —— 

Mr. MICA.—it is costly. 

Mr. KLIGMAN. Yes, sir. 

Mr. MICA. It is not that effective. 

Mr. KLIGMAN. Yes. And trusses, as well. You know, you need a 

tie-off point. OSHA is suggesting that you assemble all the trusses 

on the ground and get a large crane to carry it up, and that is not 

typical on residential construction. I have a 40-foot-wide lot I am 

building a house on right now. I don’t have physical room to assemVerDate Aug 31 2005 10:45 Jul 23, 2014 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 C:\DOCS\88670.TXT APRIL
43 

ble trusses on the ground. And even if I could get the crane and 

the client was willing to pay for that extra fee. So there are times 

when it is just not practical. 

Mr. MICA. All right. I appreciate your testimony. 

I want to yield now to Mr. Bentivolio. 

Mr. BENTIVOLIO. Thank you very much, Mr. Chairman. 

Mr. Kligman, I want to clarify. If you order trusses—I am pitching this. I used to be in the home-building business. So you have 

trusses. The crew will lift them up, or you will have a crane lift 

one at a time. You will set them in place. You will put stringers 

to hold them in place and straighten them horizontal; correct? 

Mr. KLIGMAN. Correct. 

Mr. BENTIVOLIO. Twenty-four inches on center, 18 inches on center, something like that. So right now, though, you are telling me, 

if I understand this correctly, you have to lift up all those trusses 

to —— 

Mr. KLIGMAN. To comply, they are requiring a tie-off point, and 

you don’t have that to start. So they are saying assemble it down 

and bring it all up in one —— 

Mr. BENTIVOLIO. You get pre-made trusses, right? 

Mr. KLIGMAN. Correct, and there is conventional frame as well. 

But for a pre-made example, correct. 

Mr. BENTIVOLIO. Okay. So the pre-made trusses are already assembled. You put them up one at a time? 

Mr. KLIGMAN. Correct. But even to start and to be working up 

there, you are not able to meet the requirements at that point. So 

it is kind of a chicken-and-egg kind of scenario. So with strict conformance, even despite trying to make best efforts, there is risk 

that you are not conforming, and some of their solutions or proposed solutions aren’t practical for our industry and are very cost 

prohibitive. 

Mr. BENTIVOLIO. So what would you do in conventional framing? 

You put the ridge board up and then you —— 

Mr. KLIGMAN. Really, again, it comes back to a challenge of compliance at inception, at commencement, and it becomes very difficult to comply under certain circumstances. 

And again, the association and my company as well, we are all 

in favor of safety, and it is important, and our trades feel the same. 

However, we are trying to be practical in that approach as well. 

Mr. BENTIVOLIO. Mr. Lenahan, correct? 

Mr. LENAHAN. Yes. 

Mr. BENTIVOLIO. You said there were 5,000 foundries in the 

United States, and we have quite a few small foundries here in 

Michigan, especially in the 11th Congressional District and on 

Haggerty Road. There are a couple of companies that have a small 

foundry for making prototypes; correct? 

Mr. LENAHAN. I am not familiar with that particular operation. 

But the 5,000 number is what there were domestically in 1987. 

Now there are about 1,900. 

Mr. BENTIVOLIO. And what concerns me is a personal experience. 

A military vehicle, an N–270 rocket launcher transmission was 

manufactured in a foreign country, and they delivered the transmissions to be installed in these vehicles, and then after I think it 

was less than 25 miles in travel time the transmission failed, and 

44 

we knew it was going to fail before they replaced them. They said 

it was made from cheap steel. 

What is the difference between—I don’t understand. What is 

cheap steel versus American-made, Michigan-type steel? 

Mr. LENAHAN. If you picture any kind of molten metal, it is made 

with speck, almost like a cake mix. So there are certain elements 

in the metal that add strength. I have seen other examples where 

brake rotors, for example —— 

Mr. BENTIVOLIO. Brake —— 

Mr. LENAHAN. Brake rotors on your car that keeps your car from 

stopping, when those are not made to a certain specification, if they 

are made from the wrong flavor, for example, of iron or steel, whatever, but in the brake rotors case iron, the brake, due to the coefficient of friction, will not stop, and we have seen brake rotors that 

have come over that have been counterfeited with a company name 

in Wisconsin that would not actually stop a vehicle. So we see problems like that as well. That is not something that has been seen 

just once. 

Mr. BENTIVOLIO. And those foundries, those small foundries that 

make prototypes and some of our parts, actually are encased—that 

heating thing is encased with a fire brick that your company 

makes. Is that right? 

Ms. KABOTH. We used to, yes. 

Mr. BENTIVOLIO. I am trying to look at this from a national defense point of view, because this used to be the arsenal of democracy. Welcome to Michigan. This used to be, and it really concerns 

me. We have lost a lot of machinists in the last 10 years because 

of the recession. We are not training people for these very important jobs, because once you make a casting and the sand comes out 

and you re-use that sand—is that correct? 

Mr. LENAHAN. Correct. 

Mr. BENTIVOLIO. Okay. But once the casting is made, you then 

send it to a machinist. 

Mr. LENAHAN. Usually, yes. 

Mr. BENTIVOLIO. And he has specific requirements and specifications he has to machine that down, and we are losing those, too. 

So we are actually not only losing, because of these regulations 

that are forcing businesses out of business—our national defense 

becomes at risk, right? 

Mr. LENAHAN. That is correct. 

Mr. BENTIVOLIO. Very good. 

Mr. LENAHAN. And those are not businesses that you can just 

start up in 30 or 60 days. 

Mr. BENTIVOLIO. Right. It is a lot of money to invest in a foundry. 

Mr. LENAHAN. Not to mention permitting. 

Mr. BENTIVOLIO. Not to mention —— 

Mr. LENAHAN. Permitting, back to regulations again. 

Mr. BENTIVOLIO. The uncertainty associated with Obamacare is 

a concern for many people across the country. What are you hearing from your employees and members of your business community? 

Can we start one at a time? 

Mr. Fisher, would you like to begin? 

45 

Mr. FISHER. I would be more than happy to, Congressman. The 

Affordable Care Act, Obamacare, has been a detriment. In our industry, we are in the process of conducting a statewide survey on 

that very issue. And, in fact, most of our member companies have 

responded that it is having a negative effect not only on their companies, but I think it is important to remember that there is a 

trickle-down effect, if you will. 

So in the construction industry, we build for clients, and when 

asked has Obamacare affected your clients, nearly 100 percent of 

our membership have responded yes, it is affecting their client 

base. So that, therefore, by affecting their client base, it means that 

those companies are maybe not able to expand as they would like. 

But it also means that our companies in the construction industry 

are likewise not able to access some work opportunities, and it is 

all because, again, of Federal regulations. 

So we are seeing it, and I think it is important to remember that 

it affects more than just what is on the surface and that there is 

this domino effect as well from Obamacare, as well as any other 

regulation that it has. 

Mr. BENTIVOLIO. Ms. Kaboth? 

Ms. KABOTH. So far, we have not had a direct result or a direct 

impact from Obamacare. However, I expect one in a few years in 

the price of our medical insurance. We provide very good insurance 

for all of our employees. We pay 90 percent, they pay 10 percent, 

and our rates so far have not gone up. However, I don’t believe that 

the mandate has been in effect long enough for it to really affect 

our rates. Now, in the next two to three years, I expect our rates 

to go up dramatically, and that will seriously impact our operating 

costs, but how much is anybody’s guess at this point. 

Mr. BENTIVOLIO. Uncertainty again. 

Ms. KABOTH. Yes. 

Mr. BENTIVOLIO. Mr. Lenahan? 

Mr. LENAHAN. Over the last four years, the cost to cover an em- ployee and his family or her family, $800 per month to $1,777 per 

month, and that is with the reduction on the co-pay for pharmacy, 

from $20 to $40 per prescription. So, a substantial increase, and 

that impacts our ability to hire people. 

Mr. KLIGMAN. And personally as a small-volume company, we 

subcontract the majority of our work. So I don’t have as profound 

an effect personally. However, speaking with some of our suppliers 

and subcontractors that have direct employees, we are seeing similar feedback to what people have testified to, that either they are 

increasing their deductible amount, which is a burden on the employee, or they are taking additional costs on the prescription side. 

Mr. BENTIVOLIO. Can we talk a little bit about the uncertainty? 

A lot of people don’t seem to understand it. When I talk to my constituents, they may be employed, but for a business owner, we 

often are asked to provide a business plan, and those business 

plans require forecasting for the next three years, right? Am I correct? In a business plan. So how does that uncertainty affect your 

business plan for the next three years when it comes to these regulations, as well as some of the additional burdens placed on businesses, both small and large? That uncertainty, how does that really affect you? Can you talk a little bit about that, that uncertainty? 

46 

Mr. KLIGMAN. Mine personally, I look at our positioning of land 

acquisition, commencement of inventory homes if we don’t have a 

custom buyer at that time, and without a clear path looking forward, or at least some sense of improvement and continuity and 

not restrictive burdens and greater impact to cost, it is difficult to 

make those investments. It is a high-risk, highly leveraged business, and high exposure, and without the ability to comfortably 

forecast returns and to make hiring decisions, to generate job opportunities for all of the suppliers and subcontractors that impact 

housing, uncertainty is a huge weight. 

Mr. BENTIVOLIO. Do you build spec homes primarily? 

Mr. KLIGMAN. We do. 

Mr. BENTIVOLIO. So you build them in a subdivision? You build 

maybe two or three models? 

Mr. KLIGMAN. That was prior to the downturn when we were 

more geared as a subdivision builder. We would buy large groups 

of lots, put up a model and several inventory. We have gone 

through our inventory in the subdivisions. We are now kind of acquiring vacant land or tear-downs on an as-come basis because our 

market was so devastated there weren’t new developments being 

put in, and as we kind of bled out the existing inventory, now we 

are in a little bit of a holding pattern which, again, negatively impacts the current supply-demand curve. 

Mr. BENTIVOLIO. And you build for a specific price point, right? 

Mr. KLIGMAN. A range, but yes. It tends to be more the upper 

end for our company personally. 

Mr. BENTIVOLIO. And if I understood you correctly, you said 

$2,500 for —— 

Mr. KLIGMAN. For a $121,000 home. 

Mr. BENTIVOLIO. It adds $2,500, which is quite a bit of a downpayment to somebody. 

Mr. KLIGMAN. It is. 

Mr. BENTIVOLIO. Very good. 

Mr. Fisher, you mentioned the NLRB’s ambush election rule. Are 

you aware of any other instance where a Federal regulation requires a company to provide private information about employees 

to a separate private organization? 

Mr. FISHER. No, and I thank you, Mr. Chair, for bringing that 

up. For brevity’s sake, I didn’t highlight that aspect. Indeed, this 

requires—the NLRB is requiring employers to hand over personal 

information about their workforce and their workers. This includes 

emails, other type of contact information, and it doesn’t necessarily 

have to be a company email, even a private email. And one has to 

question why is this even being promoted. 

Well, it is clear that the Federal Government is doing this because there are entities out there that want employee information 

for any number of purposes, in this case probably to try to contact 

those employees to try to encourage them to make a decision one 

way or the other when it comes to labor organizing. It is very rare. 

It is unprecedented. 

I would also add that not only are they doing this, the Federal 

Government or the NLRB has yet to even provide a justification as 

to why this proposed rule is being proposed, which brings up sigVerDate Aug 31 2005 10:45 Jul 23, 2014 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 C:\DOCS\88670.TXT APRIL
47 

nificant concerns about proper promulgation of any rule at the Federal level. 

Mr. BENTIVOLIO. So if I understand this, you just said that the 

Federal Government is requiring you to turn over private emails, 

employee information; correct? 

Mr. FISHER. Yes, sir. 

Mr. BENTIVOLIO. We can’t get that from them on some other 

things. 

Mr. FISHER. Without a justification as to why it is being proposed. 

Mr. BENTIVOLIO. Say that again? 

Mr. FISHER. Without providing a justification as to why this proposal even exists in the first place. 

Mr. BENTIVOLIO. It seems to be a problem. The government can 

get from us all the information about our lives, but we can’t get 

simple emails on other issues that this committee is dealing with. 

Can we talk about what role do acquisition land development 

and home construction loans have on the home-building industry? 

Can you elaborate a little more on that, Mr. Kligman? 

Mr. KLIGMAN. Absolutely. So, from a personal example, our company used to have a revolving line of credit with several different 

lending institutions, and as we either financed for our buyers or 

built inventory homes, we would cycle through and create productivity. 

That has effectively gone away. That leaves the option of either 

if you have the ability to finance out-of-pocket to produce and create jobs and work and opportunity, great, but the majority of the 

builders don’t, and therefore they are forced to either be forced out 

of the game or look at alternative lending solutions, private investors, and effectively you are paying premiums, higher points, higher interest rates, and effectively acquiring a partner in the project 

where margins are already compressed, and it creates greater challenge and high risk. 

Mr. BENTIVOLIO. I remember some time ago in that business actually teaching school. We had asked my students to go out and do 

some research on all the various departments that a builder has 

to associate with or come in contact with before they even begin 

building a home. You might help me out here. Not only do you 

have to secure a building permit, you have to get a land use permit; correct? 

Mr. KLIGMAN. That is correct. 

Mr. BENTIVOLIO. In some communities, they want to know the R 

factor for windows. 

Mr. KLIGMAN. Energy calculations, soil erosion permitting. Yes, 

there is quite a variety. 

Mr. BENTIVOLIO. Okay. So if you put a 2-by-4 exterior wall, you 

put four inches of insulation, the R value is 11 I think? 

Mr. KLIGMAN. Correct. 

Mr. BENTIVOLIO. It is 11. And that has been like that for how 

long? 

Mr. KLIGMAN. I am a third-generation builder, so as long as I 

have been involved. 

Mr. BENTIVOLIO. As long as I remember, too. If you go 2-by-6, it 

is R19? 

48 

Mr. KLIGMAN. You can increase the R value depending on that. 

Mr. BENTIVOLIO. So here we have something we have been doing 

traditionally, or builders have been doing traditionally for three 

generations of builders, and the government now wants you to fill 

out a form, and they are a couple of pages long, if I am not mistaken. 

Mr. KLIGMAN. They are, and they have limited the options of creating the same net result by using alternative methods, increasing 

the efficiency of your furnaces if the window R value—so different 

efficiency products that you can effectively choose. There are companies that are trying to legislate their products into the industry 

and force change so that it benefits their company, which again 

creates a burden on the consumer and forces people out of housing 

opportunities. 

Mr. BENTIVOLIO. And also, the homebuyer could buy a less expensive home if they didn’t have to buy all this energy efficient 

—— 

Mr. KLIGMAN. Correct. 

Mr. BENTIVOLIO. And over a period of time if they want to improve the efficiency of their home, and as their finances permit, 

they can improve their situation; correct? 

Mr. KLIGMAN. Correct. And with the current code having a 13- 

year payback, that is quite a bit longer than the average consumer 

is going to stay in their home and ever see the value of that. 

Mr. BENTIVOLIO. And can you talk about some of the other paperwork? I know it was about this thick a pile, and a lot of different agencies, right? 

Mr. KLIGMAN. Yes. And the different municipalities will have 

subcontracted out to agencies just to manage that, which again 

drives up permitting costs. Mr. Lenahan had communicated earlier 

sometimes the left hand doesn’t talk to the right hand. In government we see that in our governmental agencies just to process a 

permit where there is no accountability for coordination of the different agencies that are managing that process. The length of time 

to process is extended, which impacts cost and increases uncertainty as well. 

Mr. BENTIVOLIO. Very good. 

Mr. Chairman, do you have more questions? 

Mr. MICA. Thank you. 

Let me go to Mr. Kligman again. The lead renovation repair 

painting rule, EPA has issued a requirement on a certified EPA 

renovator and that work must be conducted by an EPA-certified 

firm. Now, that probably is well intended, and any renovations to 

a house built before 1978 must comply. 

I am told that the practical implications are quite different because the biggest percentage of folks are not using qualified individuals. What is happening as a result of that rule from your experience? Could you tell us? 

Mr. KLIGMAN. Sure, and that is a great question. So the majority 

of the homes constructed before 1978, over 38 million, 88 percent 

of those homes do not have the targeted at-risk group that this rule 

was written for, which is pregnant women with children under 6. 

So the purpose of that rule is to protect that group. The majority 

of the homes prior to that time do not have that, and EPA removed 

49 

the opt-out ability for a homeowner to say I am not in this target 

group, I don’t feel I am at undue risk, and I choose to forego the 

expense and cost associated with going through this process. 

What effectively happens is if I provide a proposal and I am following the regulations, there is a cost impact to that that is significant, not only in dollars but in time as well to manage that, and 

there were people that aren’t as committed to that, or the homeowners will choose to pull their own permits and try and do it 

themselves and circumvent the regulation, or they will pull their 

own permit and try to bring in a contractor on the back end and 

it penalizes the companies that are trying to accommodate a rule 

that doesn’t really add value to the consumer. 

Mr. MICA. I have some information that a survey conducted by 

the National Association of Remodeling Industry shows that 77 

percent of the homeowners are avoiding the rule by either doing 

the work on their own or hiring non-certified contractor fly-bynight operators or underground contractors. So that is pretty much 

the case? 

Mr. KLIGMAN. I believe it is. 

Mr. MICA. The practical effects of some of these rules and regulations don’t have the results they intended, it appears. 

Regarding the OSHA silica proposed rule, there are several of 

you that have spoken to this. Any suggestions for OSHA on how 

to improve the rulemaking process? 

I guess Mr. Lenahan is—contact people that may be affected? 

Mr. LENAHAN. I would be glad to comment on that. I think forming alliances is a great idea with industry and regulatory folks. We 

have had alliances in the past that have produced good results, not 

an OSHA example but a U.S. EPA example. The U.S. EPA eliminated a sector strategies program several years back where industry and agency could get together and talk about, hey, this is a rule 

that is going to kill us, and here is why it is going to kill us, and 

there were people from the agency that would actually sit down. 

They would come out here to the facilities. They would take a look 

at what you were doing to gain an understanding, and then they 

would take that back to D.C. and explain that this is why this is 

bad. 

I think it did a couple of things. I think it helped transfer information that was good, but it also let the folks at the agency know 

that we weren’t the bad guys, and then we saw them the other way 

also. 

What we have now is really much more of a command and control relationship with OSHA and EPA, and I think we need to get 

back to where we actually are working together. None of us here, 

employers, want to do anything but protect our workers. They are 

our most valuable asset. They are our friends. They are our neighbors. They are our community members. We want them all to go 

home every day. We want them to lead good lives. It is irritating 

or frustrating when you feel that people don’t understand that. 

Mr. MICA. Does anyone else want to comment? 

Mr. Fisher? 

Mr. FISHER. Yes, Mr. Chairman. I would just add that one thing 

that we have seen that is frustrating is that there is not always 

50 

a demonstration of need that is fully articulated, or even fully researched. There needs to be a demonstration of need. 

Whenever OSHA promulgates a rule, it needs to—the decisionmaking process needs to be fact based and science based. It can’t 

simply be based on picking winners or losers because there is a 

group that you may want to support for something, again, that is 

not germane to employee health or safety. There are regulations in 

which there could be special interests that profit or something like 

that, and we need to make sure we avoid that. 

And then I would just add, and it was hinted upon, is having 

that cooperative approach, working together, as opposed to a sometimes hostile approach. In other words, the carrot versus the stick 

we think seems to work very well because you have all stakeholders who are at the table who can really work together for the 

benefit of that core purpose of OSHA, which is health and safety, 

fact based, science based. 

Mr. MICA. Ms. Kaboth? 

Ms. KABOTH. I would just like to add I agree with both gentlemen. It would be nice to see more individualized effort by OSHA 

for every industry. Instead of just making a sweeping pronouncement saying everybody has to cut their exposure by half, to look 

at each industry and say, okay, what do we need to do here that 

really will improve things. That kind of cooperative effort I think 

would be very well received by business in general. 

Mr. MICA. Very good. 

At the conclusion here, I will first yield to Mr. Bentivolio to see 

if he has any final questions or a statement. And also to our witnesses, if there is anything that we haven’t questioned you on or 

that you would like to bring up before this part of the hearing. 

Mr. Bentivolio, did you have any other questions or comments? 

Mr. BENTIVOLIO. Mr. Fisher, you mentioned that OSHA allows 

union representatives to accompany OSHA inspectors on work 

sites. How do business owners feel about this relationship between 

government agency and unions? 

Mr. FISHER. Yes. Thank you, Mr. Chairman. In February of 2013, 

an interpretation letter by OSHA stated that for enforcement action, that now a union representative or a community organizer 

could come onto the job site of the company, a company that is potentially subject to unionization, to participate in that walkthrough, in that inspection, or even in jobsite sanctions. If you have 

a union organizer that is attempting to infiltrate a company and 

interfere with the employee-employer relationship, it draws a distinct and definite concern about what the actual intentions of that 

person accompanying the OSHA inspector are, and it can certainly 

be disruptive, and there is no need for it. 

OSHA, since the 1970s, has never done this, and suddenly there 

is this rule of interpretation that allows for this unprecedented interference. Again, the actual intentions do come into question when 

this occurs. 

Mr. BENTIVOLIO. Intimidation. 

Regulations sometimes make no sense. Thousands of jobs lost, 

homes priced out of the market or beyond the reach of some people 

because of some regulations or additional paperwork to comply 

with regulations that builders have been doing for three generaVerDate Aug 31 2005 10:45 Jul 23, 2014 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 C:\DOCS\88670.TXT APRIL
51 

tions. I don’t understand why people, when they see a 2-by-4 wall, 

they should be asking what is the insulation in the walls, right? 

But they don’t see that, do they? And you have to go through—let’s 

see. If you have a wetland in the back, even if it is temporary during construction, you have to put up an erosion fence? 

Mr. KLIGMAN. There is soil erosion and soil protection and fence 

protection requirements depending on wetlands, and sometimes it 

has to be delineated because again for short periods of time it may 

not be defined as a wetland but an inspector will say ‘‘I want you 

to hire an expert and prove it.’’ 

Mr. BENTIVOLIO. Do you know all the regulations for home building? 

Mr. KLIGMAN. No, I don’t. 

Mr. BENTIVOLIO. Do you have any idea how many regulations 

there are for home building? 

Mr. KLIGMAN. I can’t speak to that. One of our members is very 

active in the codes, but he has brought in the code book that used 

to be used and the stack that is used now. I will speak from my 

perspective as a professional. Unless that were your full-time focus, 

to just study the codes, as opposed to being a business person and 

creating job opportunities and providing services to consumers— 

and we have a long tradition of very happy homeowners—it is impossible. 

Mr. BENTIVOLIO. And for the record, when he said what the regulations used to be, he held his thumb and —— 

Mr. KLIGMAN. He actually had an old code book. 

Mr. BENTIVOLIO. Maybe three-eighths thick, three-eighths of an 

inch to stack, and I think you signified about a foot-and-a-half 

high, right? 

Mr. KLIGMAN. It is significant. 

Mr. BENTIVOLIO. I think that is it. I would like to thank all the 

witnesses for coming today and offering your testimony. 

Mr. MICA. Well, thank you again, Mr. Bentivolio, for inviting us 

to Plymouth, Michigan, and for the opportunity to conduct this 

hearing and hear from these witnesses. 

I had one sort of general last question for all of you. In 2013, the 

Office of Information and Regulatory Affairs, office of the OMB, the 

Office of Management and Budget, they released a draft report discussing the benefits and costs of Federal regulations, and they 

found in part that burdensome regulations can impose significant 

costs on business. In the report it stated—and let me quote from 

it—‘‘If they are not carefully designed, regulations can also impose 

significant costs on businesses, potentially dampening economic 

competition and capital investment.’’ 

That release and that statement said what it just said. I would 

like to ask you, do you feel that this Administration has pursued 

and adopted regulations that are carefully designed, or do you feel 

that they harm the economic competition and capital investment? 

We will go right down the pike, just for the record. 

Mr. FISHER. I will take a stab at that, Mr. Chair. I don’t think 

that they have been carefully designed in particular. When a Federal agency is in the process of promulgating a rule without providing justification for that rule, there is absolutely no room for 

that, and it is burdensome. 

52 

You stated in your opening comments that EPA regulations have 

a $50 billion, with a B, price tag, just for EPA alone. To put that 

into perspective, that is more than the entire operating budget of 

the State of Michigan, and that is $50 billion worth of economic activity, $50 billion worth of potential growth and job creation that 

is not otherwise being put into the economy. 

So there is a price tag, and it can be detrimental, and we do have 

to be absolutely careful and deliberate about what we do to make 

sure that regulations are sensible and needed. 

Thank you, Mr. Chairman. 

Mr. MICA. Again, the general question, Ms. Kaboth. 

Ms. KABOTH. I listen often to politicians say we need to get more 

manufacturing jobs. However, all the regulations that I have had 

to comply with since I became president in 2005 are all designed 

to put me out of business. The regulations don’t want you to manufacture. Nobody wants you near them. Obviously, I have to believe 

what I have to comply with. But I would say, yes, that the policies 

—— 

Mr. MICA. You said 2005. 

Ms. KABOTH. 2005. Sorry. 

Mr. MICA. Well, that transcends several administrations. Has it 

gotten better or worse? 

Ms. KABOTH. It has gotten worse, it definitely has gotten worse. 

Well, they have gotten a lot more expensive to comply with. There 

were many early on that were just a matter—and for us, we don’t 

have nearly the paperwork as you have with building a house because we don’t add on very often. It is too expensive and we can’t 

afford it. But there were more regulations, but they weren’t as 

damaging. 

Mr. MICA. And didn’t potentially put you out of business? 

Ms. KABOTH. Right. 

Mr. MICA. Mr. Lenahan? 

Mr. LENAHAN. I would say look at the data, and the data shows 

that four of the top five years for regulation generation have happened under the Obama Administration. One of the five is under 

the Bush Administration. 

Mr. MICA. They seem to be coming out day and night. 

Mr. LENAHAN. The data would reflect that. 

Mr. MICA. Mr. Kligman? 

Mr. KLIGMAN. I echo the sentiments, and it does seem that there 

is a disconnect between the promulgation of some of these rules 

and the practical application and nature and the impact and detriment to job growth and the economy and opportunity. 

Mr. MICA. Well, I want to thank all of our four witnesses. Again, 

Mr. Bentivolio, he is a great breath of fresh air in Congress. He 

comes from a business background. 

I am not an attorney. Actually, I was a developer. In the days 

I did projects, I could go into city hall in the morning, get the permit in the afternoon. Now I think the last project I was involved 

in it took six months to do the permitting, and it just went on and 

on. So it has gotten pretty tough to do business, stay in business. 

And then the practical application. You see the lead, well-intended regs, but then the consequences, people find a way to avoid 

53 

that cost and maybe endanger themselves. We may be endangering 

more people the way we are doing this. 

It is interesting, too, to see that nobody seems like they are trying to avoid compliance. It is just a matter of a cooperative and directed effort and something that can be built on common sense, 

and also looking at the final results, which is so important that you 

want to achieve. Particularly, I will use Mr. Lenahan’s foundry 

quote in many future speeches when he testified today that we 

have gone from 5,000 to 1,900 in many of those jobs. Activity and 

employment and economic opportunities have gone beyond our 

shores. That is very sobering. I was way underestimating. He said 

350,000 jobs. That is a serious impact. 

I saw the jobs report this past week. We went down in numbers 

to 6.3, but then I saw almost a million people left the workforce. 

We have fewer people actually working than we have had in 25 

years, something like that, a phenomenal decrease, which makes 

us less competitive, a less skilled workforce and many people becoming more reliant on the government either in retirement or— 

and then some of the things that have passed that have encouraged 

part-time rather than full employment. People are struggling now 

with two and three jobs. They are not sure of their employment. 

If the brick factory goes down, that is 80 people and a century of 

conducting honest and productive business. Very sad. 

As I drove in I saw a lot of vacant properties, which is maybe 

back to do another hearing on those. But you become concerned 

when you see the decline in good-paying jobs, employment, expansion of businesses, too many of them boarded up or closed down. 

I have learned some things here hopefully we can take back. Mr. 

Bentivolio is on the Small Business Committee, which is so important to this community, the state, and the country, and trying to 

keep those folks in business and employing people and expanding. 

But again, very informative, a fairly brief hearing. But we will 

make this part of the record. If there is additional information that 

we will submit either from witnesses, we may have additional 

questions we will submit to you, or additional information, and if 

you have constituents and others that want to submit things. 

Without objection, the record will be kept open for a period of 7 

legislative days. 

There being no further business before the Subcommittee on 

Government Operations, this hearing is adjourned. Thank you. 

[Whereupon, at 10:50 a.m., the subcommittee was adjourned.] 

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