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CONTINUING OVERSIGHT OF REGULATORY IMPEDIMENTS TO JOB CREATION: JOB CREATORS 

STILL BURIED BY RED TAPE 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

JULY 19, 2012 

Serial No. 112–161 

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 

DAN BURTON, Indiana 

JOHN L. MICA, Florida 

TODD RUSSELL PLATTS, Pennsylvania 

MICHAEL R. TURNER, Ohio 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

CONNIE MACK, Florida 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

ANN MARIE BUERKLE, New York 

PAUL A. GOSAR, Arizona 

RAU ́ L R. LABRADOR, Idaho 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

JOE WALSH, Illinois 

TREY GOWDY, South Carolina 

DENNIS A. ROSS, Florida 

FRANK C. GUINTA, New Hampshire 

BLAKE FARENTHOLD, Texas 

MIKE KELLY, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

EDOLPHUS TOWNS, New York 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

DENNIS J. KUCINICH, Ohio 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MIKE QUIGLEY, Illinois 

DANNY K. DAVIS, Illinois 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

CHRISTOPHER S. MURPHY, Connecticut 

JACKIE SPEIER, California 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on July 19, 2012 ............................................................................... 1 

WITNESSES 

Mr. Paul A. Yarossi, President, HNTB Holdings, LTD., On Behalf of The 

American Road & Transportation Builders Association 

Oral Statement ................................................................................................. 8 

Written Statement ............................................................................................ 10 

Mr. Jim Hamby, Chief Executive Officer, Vision Bank 

Oral Statement ................................................................................................. 20 

Written Statement ............................................................................................ 23 

Mr. J. Billy Pirkle, Senior Director EHS, Crop Production Services, Inc. 

Oral Statement ................................................................................................. 32 

Written Statement ............................................................................................ 34 

Mr. Howard Williams, Vice President & General Manager, Construction Specialties, Inc. 

Oral Statement ................................................................................................. 41 

Written Statement ............................................................................................ 43 

Mr. Steve Russell, Vice President, Plastics Division, American Chemistry 

Council 

Oral Statement ................................................................................................. 46 

Written Statement ............................................................................................ 48 

Mr. Barry Rutenberg, Barry Rutenberg & Associates, Inc., On Behalf of 

The National Association of Home Builders 

Oral Statement ................................................................................................. 52 

Written Statement ............................................................................................ 54 

APPENDIX 

The Role of Job Impact Analyses in Environmental Policy Debates ................... 95 

The Honorable Elijah E. Cummings, a Member of Congress from the State 

of Maryland, Opening Statement ....................................................................... 129 

Committee on Oversight and Government Reform, Staff Report ........................ 131 

(1) 

CONTINUING OVERSIGHT OF REGULATORY 

IMPEDIMENTS TO JOB CREATION: JOB CREATORS STILL BURIED BY RED TAPE 

Thursday, July 19, 2012, 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 9:45 a.m., in Room 2154, 

Rayburn House Office Building, Hon. Darrell E. Issa [chairman of 

the committee] presiding. 

Present: Representatives Issa, Platts, Jordan, Walberg, Lankford, 

Gosar, Labrador, DesJarlais, Ross, Kelly, Cummings, Towns, 

Maloney, Norton, Kucinich, Tierney, Connolly and Murphy. 

Staff Present: Ali Ahmad, Majority Communications Advisor; 

Robert Borden, Majority General Counsel; Molly Boyl, Majority 

Parliamentarian; Lawrence J. Brady, Majority Staff Director; Sharon Casey, Majority Senior Assistant Clerk; Katelyn E. Christ, Majority Professional Staff Member; John Cuaderes, Majority Deputy 

Staff Director; Brian Daner, Majority Counsel; Adam P. Fromm, 

Majority Director of Member Services and Committee Operations; 

Linda Good, Majority Chief Clerk; Christopher Hixon, Majority 

Deputy Chief Counsel, Oversight; Mark D. Marin, Majority Director of Oversight; Kristina M. Moore, Majority Senior Counsel; Kristin L. Nelson, Majority Counsel; Sharon Meredith Utz, Majority 

Professional Staff Member; Rebecca Watkins, Majority Press Secretary; Krista Boyd, Minority Deputy Director of Legislation/Counsel; Claire Coleman, Minority Counsel; Kevin Corbin, Minority 

Deputy Clerk; Ashley Etienne, Minority Director of Communications; Susanne Sachsman Grooms, Minority Chief Counsel; Carla 

Hultberg, Minority Chief Clerk; Lucinda Lessley, Minority Policy 

Director; Dave Rapallo, Minority Staff Director; and Ellen Zeng, 

Minority Counsel. 

Chairman ISSA. The Committee will come to order. 

The Oversight Committee exists to secure two fundamental principles: first, Americans have a right to know the money Washington takes from them is well spent and, second, Americans deserve an efficient, effective government that works for them. Our 

duty on the Oversight and Government Reform Committee is to 

protect these rights. Our solemn responsibility is to hold government accountable to taxpayers, because taxpayers have a right to 

know what they get from their government. Our job is to work tirelessly in partnership with citizen watchdogs to deliver the facts to 

the American people and bring genuine reform to the bureaucracy. 

2 

In Congress, we hear every day from our constituents, Americans, their concern for their jobs and the lack of job creation. June 

figures show unemployment has remained unchanged at 8.2 percent. That means that 12.7 million Americans are unemployed. 

And far more have quit looking. Almost 42 percent have been unemployed for 6 months or more. 

The verdict is in: Keynesian economics, when applied the way 

the President’s stimulus plan applied it, clearly will not work. Jobs 

created in the public sector for a year kept a job for a job, but did 

not create lasting employment in America, and certainly not in the 

private sector. 

For those of us who understand small business, they are responsible for over half of all job creation. Government can create an environment in which job creation is logical, desirable, and the goal 

of every small businessman, or government, through its out-oftouch statements and actions, can create an uncertainty. That uncertainty, without a doubt, will cause small and not so small businesses to do the minimum and protect themselves from the downside. 

Today that is what we see in America. Whether intended or not, 

this Administration has created an environment of uncertainty. 

Not just through regulations that are the creation of current legislation. Not even the regulations from laws passed long ago. But, in 

fact, regulations coming out of thin cloth, coming out of places that 

no one knows where they came from; legislation that was passed 

generations ago suddenly creating new and innovative requirements on business. 

Additionally, there has been a growth in the kind of non-regulation regulation, often called guidance, or sometimes through Executive Order, that can come with no notice, can be just as compelling, 

just as draconian as any new piece of red tape coming from a long 

process with public comment and then, lastly, bureaucrats run 

amok. In this Administration, bureaucrats seem to have an open 

door to simply do what they want to do; to say you must do something or to delay a decision time and time again. Dates and mandates within the statute are often ignored, so when you ask for and 

you plan on starting production on a given date, it simply doesn’t 

happen. 

This happened to Shell Oil in Alaska. It wasn’t until hearings 

were scheduled, and virtually on the day, that they suddenly got 

a permit to start something for which they had lost at least one full 

season and countless millions of dollars. 

This and other pieces of red tape are part of the unintended consequences of an Administration that gives only lip service to the 

word red tape. Only today, only today, and I will ask unanimous 

consent that the article be placed in the record. Without objection, 

so ordered. Today, the White House launches a new website in an 

effort to streamline regulations. I recognize this because, in fact, 

our Committee launched that with little fanfare, but the disdain of 

some in the Administration that we would actually go out and actively ask trade associations and employers in America to tell us 

what the impediments to job creation were more than two years 

ago. We have more than 1,000 responses from that, and today I 

have instructed my staff to forward at least a sampling of those to 

3 

the Administration to upload it to their website in the hopes that 

what they didn’t seem to read for the last two years they would 

read today. 

Forty-four percent of likely voters believe EPA regulations are 

hurting the economy and 53 percent of registered voters say federal 

regulations are one of the major reasons the economy is struggling. 

According to the National Federation of Independent Business, regulations and red tape are one of the single most important problems to small business. 

As a former small businessman, I know that to be true. Give me 

as few uncertainties and I will be bold in every other way. Each 

uncertainty in a private business causes you to be less willing to 

take other risks that occur every day in putting your own capital 

at risk in new and innovative products or programs. Today we will 

hear from a distinguished panel who live that nightmare. 

One of our challenges here on this Committee is to get out 

enough to the field and to get people here that can tell us what 

they deal with every day in the heartland. I am pleased that our 

Committee has held more field hearings to listen to more job creators than any of our predecessors since I have served in Congress, 

but it isn’t enough. This hearing isn’t enough. We have to go from 

this hearing to real regulatory relief or the American people will 

continue to see the hundreds of billions of dollars that could be invested in new and innovative products, in new services, spent, in 

fact, on lawyers, accountants, and other people complying with regulations; and dollars will continue to pile up, not invested, but simply waiting for an opportunity and a certain environment. 

I would be remiss if I didn’t also mention that agencies like the 

National Labor Relations Board, who took it on themselves to personally attack one of America’s finest companies, our largest exporter, simply because they wanted to expand to a State that 

wasn’t union friendly to their liking. Ultimately, South Carolina 

did add those 3,000 jobs, and I have no doubt whatsoever that the 

Boeing plant there, in the years to come, will be doing just fine. 

I recognize the Ranking Member for his opening statement. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. One of the 

first hearings this Committee held this Congress was a hearing 

much like this one. The title of the hearing was even similar: Regulatory Impediments to Job Creation. I said then that an effective 

regulatory review should include several basic elements: it should 

examine both cost and benefits; it should base conclusions on solid 

data; and it should seek input from a wide variety of sources. 

Eighteen months have passed, but, unfortunately, not much has 

changed. Today’s hearing is the 29th hearing our Committee has 

held during the Congress on the impact of regulations. Yet, in 

every single one of those hearings the Committee’s approach has 

been lopsided and unbalanced. The Committee has focused on the 

cost of regulations without considering the benefits. The Committee 

has solicited input only from witnesses who want to weaken or repeal regulations, but not those who wish to strengthen protections 

for children, small businesses, the economy, and American families. 

In these 29 hearings, the Committee invited 107 witnesses to testify in favor of rolling back health, safety, and economic protections. We in the Minority were left to bring some semblance of balVerDate Aug 31 2005 09:03 Aug 14, 2012 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\75465.TXT APRIL
4 

ance to those proceedings, but we were permitted to invite only 17 

witnesses to provide alternative perspectives. Again, today you invited five industry representatives to discuss their desire to weaken 

or repeal regulations and we were allowed only a single witness to 

represent the other side of this important question. 

In May the Committee sent 187 letters, almost exclusively to industry organizations, asking for examples of regulations that ‘‘continue to negatively impact job growth.’’ These letters went to companies like Conoco Phillips and industry groups like the Society of 

Chemical Manufacturers and Affiliates, and the American Fuel and 

Petrochemical Manufacturers. In response, these industry groups 

targeted a host of regulations that provide basic health and safety 

protections such as child labor laws, standards for lead in children’s toys, air and water quality standards, and lead paint renovation rules. 

But the Committee sent no letters to organizations representing 

the other side, such as the American Academy of Pediatrics or 

other children’s advocacy groups that could testify about the benefits of those rules and how children could be harmed by weakening 

them. 

Of course, the Chairman has every right to conduct this Committee’s activities as he sees fit, but in my opinion the Committee loses 

credibility when its actions are so blatantly and explicitly onesided; and losing that credibility means the American public is less 

likely to take our results seriously. 

In the Committee’s letter, the Chairman referred to a ‘‘regulatory 

tsunami that does not appear to be slowing down.’’ If this is a tsunami, then I wonder what a drought looks like. OMB data shows 

that the current Administration has approved fewer rules than in 

either of President Bushes’ terms. A report published last month 

by Public Citizen found that 78 percent of the rules with statutory 

deadlines last year were not in fact issued by the statutory deadline and that OMB’s Office of Information and Regulatory Affairs 

is taking longer to review rules than ever before. 

It is this kind of inaccurate rhetoric that drives the constant 

stream of anti-regulatory legislation considered by the House this 

Congress. Next week, the House will consider legislation to prevent 

federal agencies from issuing regulations until the unemployment 

rate is under 6 percent. This bill does not make any sense. Why 

in the world would you take a regulation to protect children from 

toxic chemicals, for example, and prevent it from taking effect until 

the national employment rate reaches some arbitrary threshold? 

The problem is that the Republican approach is based on a faulty 

premise: that regulations kill jobs. This myth has been widely discredited by economists on both sides of the aisle. 

I ask unanimous consent to insert in the record a report issued 

in April by the Institute for Policy Integrity entitled The Regulatory Red Herring: The Role of Job Impact Analysis and Environmental Policy Debates. 

Chairman ISSA. Without objection, so ordered. 

Mr. CUMMINGS. Thank you, Mr. Chairman. 

This report found that the current rhetoric linking regulations to 

job losses is indeed misleading. 

5 

Mr. Chairman, the time has come for Congress to change course 

and to focus on reality instead of myths and inaccurate rhetoric. 

We need to work together to conduct legitimate oversight that is 

focused on creating jobs and protecting the health and safety of 

American families. We can indeed do both; we do not have to 

choose one or the other. 

With that, I yield back. 

Chairman ISSA. I thank the gentleman. 

I now ask unanimous consent that the Committee’s report be 

placed in the record. Without objection, so ordered. 

And as a point of personal privilege, I suspect that the Ranking 

Member, in his opening statement, was not objecting to any breach 

of protocol, since one witness at most was, and often not one witness, is what was received when we were in the Minority. The gentleman was not implying that Mr. Towns, when he was in the Majority, treated the Minority any differently, is he? 

Mr. CUMMINGS. No, Mr. Chairman. I am looking for the today 

when I become the Chairman and we will make sure that we have 

that balance. 

[Laughter.] 

Chairman ISSA. I am looking forward to the day in which a chairman in your party somehow does allow more than one witness. 

With that, I recognize the subcommittee chairman, Mr. Jordan, 

for his opening statement. 

Mr. JORDAN. Thank you, Mr. Chairman. 

Mr. Chairman, I want to thank you for your continued leadership, focusing this Committee’s efforts on the plight of job creators 

struggling to survive under a mountain of red tape. The Subcommittee on Regulatory Affairs has held 10 separate hearings and 

listened to job creators from across the Country to better understand what is stopping them from putting more Americans back to 

work. We held these hearings because, like you, we know that it 

is not the Federal Government that creates jobs. Rather, it is the 

small business entrepreneur who is responsible for over 50 percent 

of job creation in this great Country. 

Most of our constituents are not employed by Fortune 500 companies; rather, they are employed by the local restaurant, manufacturers, or home builders whose CEO is part of the community and 

one of their neighbors. These folks tell me that they are not hiring 

any more workers because of the regulatory uncertainty created by 

this Administration. I have heard from folks in the manufacturing 

industry explain that it is the never-ending cascade of EPA regulations that drive up the cost of energy, eliminating their competitive 

advantage over foreign manufacturers. I have heard from truck 

drivers who have had every incentive to maximize fuel efficiency 

and driver safety tell me that the DOT and the EPA are putting 

them out of business with their multiple mandates that impose a 

great cost with very little return in benefits. 

While the President may be trying to convince himself that the 

private sector is just fine, constituents in Ohio and across the 

Country know firsthand that this is just not the case. 

So, again, I want to thank you for this hearing. And if I could, 

Mr. Chairman, I know the very first hearing this Committee held 

this Congress, January of 2011, we had five small business owners 

6 

from around the Country come in and speak. One happened to be 

from our district, Jack Buschur, Buschur Electric; started his company 30 years ago; successful, but he was just like the other four 

on that committee. And it was a great hearing, about three hours, 

but if you remember, Mr. Chairman, I think the most compelling 

question came at the end of that hearing, where a colleague of ours 

who is not here today, Mr. Guinta, asked a simple question. He 

said, to the five witnesses who were there that day, he said, gentlemen, I just want to know one thing. You all have been in business 

25, 30, 35 years, successful leaders in your community, like many 

of the folks we have with us today. He said, I just want to know 

one thing: If you knew then what you know now, would you have 

started? 

It was, again, a question that cut right to the heart of the matter. If you knew back then all the hoops and the hassles and the 

hurdles and obstacles and baloney that government was going to 

make you deal with, would you in fact have been that entrepreneur, taken the risk, started your business, taken out that loan, 

worked and struggled like you did to create this business, employ 

people, and become a leader in your community and someone who 

helps a lot of— would you have done it all over again? And if you 

remember the response, Mr. Chairman, every single one of those 

witnesses said I don’t think I would have done it. And if that is 

not a sad indictment on the greatest Country in the world that we 

are making it that difficult for entrepreneurs to start a business 

and create jobs and help their community and help our Country, 

I don’t know what is. 

So, again, I want to thank you for your efforts and the efforts of 

this Committee in focusing on this issue of red tape and the regulatory burden that faces so many of our job creators and small 

business owners out there; it is entirely appropriate. 

With that, I would yield back. 

Chairman ISSA. Would the gentleman yield? 

Mr. JORDAN. I would be happy to yield. 

Chairman ISSA. Just one question. Do you remember, in these 

over 100 witnesses, them being interested in eliminating safety or 

somehow rolling back the health and protection in any of their 

complaints on regulations even once? 

Mr. JORDAN. Not even once, Mr. Chairman. In fact, as you well 

know and as I am sure our witnesses will testify to today, employers are focused on safety because they understand the value that 

their employees bring to their business, and the value and quality 

that they add to their product or to their service. So they get that 

simple fact. It is unfortunate that some in government don’t understand that basic phenomenon. 

Mr. DESJARLAIS. Would the gentleman yield? 

Mr. JORDAN. I would be happy to yield to the gentleman from 

Tennessee. 

Mr. DESJARLAIS. Because I like simple math, there was an observation made about the fairness of the folks that were pro-regulation, anti-regulation in terms of witnesses. I think we had 170 or 

so witnesses that were here that complained about regulations and 

17 who were in favor of regulations. In my job creators tour around 

Tennessee’s Fourth, I went to about 40 businesses and I was sitVerDate Aug 31 2005 09:03 Aug 14, 2012 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\DOCS\75465.TXT APRIL
7 

ting there going through my head, and these were businesses that 

had unions and otherwise. Only four did not complain about regulations. From my simple math, that is 10 percent, so I think maybe 

the proportion of witnesses in this case happened to work out fine. 

I yield back. 

Mr. JORDAN. I thank the gentleman for his point and yield back 

to the Chairman. 

Chairman ISSA. I thank the Chairman. 

Does anyone else seek recognition? 

[No response.] 

Chairman ISSA. With that, we will now introduce our esteemed 

panel. 

We would like to welcome Mr. Paul Yarossi. He is President of 

HNTB Holdings, Ltd. in New York, New York City. He has been 

testifying on behalf of the American Road & Transportation Builders Association. I think that was one of the groups that we asked 

if there were impediments to job creation. 

Mr. Jim Hamby is Chief Executive Officer of Vision Bank in Ada, 

Oklahoma, a place I was fairly near not too long ago, like this past 

weekend, meeting with job creators. 

Mr. Billy Pirkle is Senior Director of Environmental Health and 

Safety of Crop Production Services, Inc. in Loveland, Colorado. He 

is testifying on behalf of the Agricultural Retailers Association. 

Mr. Howard Williams is Vice President & General Manager of 

Construction Specialties, Inc. in Muncy, Pennsylvania. 

Mr. Steve Russell is Vice President of Plastics Division of the 

American Chemistry Council here in Washington, DC, one of the 

organizations we often go to for facts and figures on industry. 

And Mr. Barry Rutenberg is the owner of Barry Rutenberg & Associates, Inc. in Gainesville, Florida. He is testifying on behalf of 

the National Association of Home Builders. 

Pursuant to our rules, I would ask you all to rise, raise your 

right hand to be sworn. 

Do you solemnly swear or affirm the testimony you are about to 

give will be the truth, the whole truth? 

[Witnesses respond in the affirmative.] 

Chairman ISSA. Let the record reflect that all witnesses answered in the affirmative. 

Please be seated. 

Now, thanks to C–SPAN, every time I say this I get to smile, because you all know how this works. There are lights in front of you. 

It will be a countdown clock. They are going to go green, yellow, 

red. When they are green, say anything you want to say, whether 

it is included in your prepared statement or not. When it turns yellow, the way Mr. Lankford probably would describe it, hurry up 

and don’t get caught underneath the red light in the intersection. 

When it gets to red, if you haven’t finished up, please go to that 

last page where you say, in summation, and make it short. It is a 

large panel today. We are very happy to have all of you, but we 

would like to get to the questions on both sides of the aisle. 

Mr. Yarossi. 

8 

WITNESSES STATEMENTS 

STATEMENT OF PAUL A. YAROSSI 

Mr. YAROSSI. Thank you. Chairman Issa, Ranking Member 

Cummings, members of the Subcommittee, I am Paul Yarossi, 

President of HNTB Holdings. I am here today representing the 

American Road & Transportation Builders Association. 

ARTBA, now in its 110th year of service, represents all sorts of 

U.S. transportation construction industry, all the sectors which 

sustain more than 2.2 million American jobs. ARTBA recognizes 

federal regulations play a vital role in the fabric of our society. In 

the transportation area they provide a sense of predictability and 

ensure a balance between meeting our Nation’s mobility needs and 

protecting the public interest. 

We commend Congress that acted in a bipartisan manner to improve the transportation project delivery process by cutting red 

tape in the recently enacted transportation bill. However, in other 

areas federal regulations hinder, rather than help, achieve the balance that we need. 

One of these instances is the recently enacted federal rules governing the hours of service for commercial truck drivers may work. 

These rules are designated to ensure long-haul drivers do not drive 

to the point of exhaustion by spending too much time on the road. 

Transportation construction industry drivers are not long-haul 

operators who consistently spend many consecutive hours on the 

road on a given day. Generally, transportation construction industry commercial drivers do not operate in the manner that leads to 

concerns over fatigue. 

At the same time, transportation project owners, the driving public, and commercial shippers expect contractors to build projects in 

a timely and efficient manner, with minimum disruption to traffic. 

In addition, the industry is also using innovative techniques to 

replace a bridge or a roadway, working attentively, in a concentrated period of time, like over a single weekend. This situation 

is a prime example of applying a one size fits all regulatory approach. While windows of 10 to 11 hours of drive time and 13 to 

16 hours of on-duty time may seem adequate in other cases, in fact 

those limitations can disrupt the efficient deployment of professionals and resources on construction job sites without a demonstrated increase in safety. Further increased costs would otherwise support capital and personal expansions. 

Another area of concern for our group is EPA’s draft guidance 

that would greatly expand the reach of the Clean Water Act. In 

this undertaking, EPA is proposing a significant expansion of the 

federal jurisdiction over wetlands, and doing so in a manner that 

bypasses the opportunity for my industry and other affected interests to provide input. 

Chief among our substantive concerns with this proposal is roadside ditches, which would be subject to federal wetlands requirement. This is both unnecessary and potentially damaging to the 

transportation construction industry. Virtually every road or roadway improvement project in the U.S. has a ditch associated with 

it. As such, the EPA plan could provide that agency with an approval role in most, if not all, future roadway improvements. 

9 

Not withstanding the lack of viability of such a plan, it would inject major uncertainty in delays and the delivery of transportation 

benefits. If members of my industry are stuck in a continuing labyrinth of bureaucratic wetland approvals, they will be unable to 

make decisions about allocating existing personnel, let alone future 

hires. 

Chairman Mica and other leaders of the Transportation Infrastructure Committee have introduced a measure which would stop 

the EPA proposal. We urge members of this Committee to support 

that legislation. 

Finally, EPA has indicated evaluating whether or not to regulate 

coal ash as a hazardous substance. Coal ash is commonly used in 

material such as concrete, which is a key component of transportation infrastructure improvements. Further, EPA has routinely 

noted the benefits of recycled coal ash in the transportation arena 

and its safety. Reversing course and designating coal ash as a hazardous material would remove the valuable tool of my industry’s efforts to create efficient U.S. transportation network at the lowest 

possible cost. Our study has found that that will cost our industry 

more than $104 billion over the next 20 years. 

Mr. Chairman, Ranking Member Cummings, ARTBA deeply appreciates this opportunity to present testimony to you on this important issue. I look forward to answering any questions you have. 

[Prepared statement of Mr. Yarossi follows:] 

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Chairman ISSA. Thank you. 

Mr. Hamby. 

STATEMENT OF JIM HAMBY 

Mr. HAMBY. Chairman Issa, Ranking Member Cummings, Congressman Lankford, and members of the Committee, I want to 

thank you for allowing me to speak today. I am the President and 

Chief Executive Officer of Vision Bank in Ada, Oklahoma, and it 

is a community bank. I want to thank you for inviting me to testify, and I want to thank this Committee for its willingness to address the issues of how regulatory red tape is impending job creation. 

Like most community banks, Vision Bank is deeply involved in 

every aspect of the communities we serve. We have been helping 

our small business partners grow now for over 100 years. These include businesses, farmers, ranchers, oil and gas companies, Indian 

tribes, doctors, hospitals, and anything that walks in the door. We 

have helped create thousands of jobs and we sponsor a lot of 

things, some of which are right now we are doing a financial literacy program for students in 13 high schools in our district, where 

we are providing financial literacy training for each one of those 

and helping them meet curriculum requirements so they will be 

productive citizens. We also donated over $420,000 last year to assist local charity 

groups and organizations, and this equals about 8 percent of our 

income. 

These accomplishments are the essence of what a community 

bank does, and I am very proud to be a community banker. 

Vision Bank is also a small business, and we can’t lose sight of 

that. We are locally owned and we employ more than 200 people, 

all of which have great futures. We provide health care, life insurance, health benefits, retirement plans, and we are really a family. 

Most small businesses are. 

Community banks like mine pride themselves on being quick to 

adapt. But at some point it gets very hard to handle it. We understand the need for regulations to protect the safety and soundness 

of our bank. We understand regulations that protect the consumer. 

And we are in favor of those regulations. We are the highest regulated industry in the world and we need a lot of regulations. We 

agree that our customers should be protected. To do this, regulations are a large part of our business. 

But we are now facing 10 times the number of rules than we did 

just 10 years ago. Fifty of these rules were new in the two years 

before Dodd-Frank, and with Dodd-Frank there are now 4,000 

pages of proposed rules and more than 4,000 pages of final rules. 

The new laws and regulations might be manageable by themselves, but we are dying a death of a thousand paper cuts. Wave 

after wave of new rules, one on top of another, are overwhelming 

many small community banks and making it harder for us to do 

what we do best, which is meet the credit needs of our local communities. 

I am going to give you a few staggering statistics. 

At Vision Bank our compliance costs have increased $1.4 million 

in the last three years, and those are hard numbers. That repVerDate Aug 31 2005 09:03 Aug 14, 2012 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\DOCS\75465.TXT APRIL
21 

resents a 29 percent decrease in our profits. That means 29 percent 

less taxes; that means 29 percent less in capital formation, which 

helps support lending. 

This includes more than the cost of hiring and training of new 

compliance personnel and systems; it also includes something that 

you cannot quantify, and that is the lost opportunities that result 

when money that would normally be devoted to making loans to 

consumers and small businesses is, instead, spent on outside consultants, lawyers and so forth; not to mention the fact that it 

causes us to take our eye off the ball and spend most of our time 

trying to comply with new regulations, instead of getting out and 

meeting the customer. 

The more resources we devote to regulatory compliance, the 

fewer resources we have to meet our communities. Every dollar 

spent on regulatory compliance means as many as $10 less available for creditworthy borrowers. Less credit means businesses can’t 

grow and create jobs. As a result, local economies suffer and the 

national economy suffers as well. 

One example of unnecessary compliance burden, and it is a small 

example, is the outdated requirement that ATMs include potential 

fee notices on the screen and on the machine itself. Originally, you 

couldn’t put it on the screen, so the law said to put it on the machine. Well, the main contribution of this rule today is to encourage 

frivolous lawsuits and to force banks to spend valuable time and 

resources scurrying around, updating all of our ATMs to make sure 

that fee notification stickers haven’t been removed by vandals, even 

though the screen discloses what the fees are and asks you if you 

want to proceed or not. 

I am grateful that the House, last week, passed legislation to remove this duplicative requirement. It is a minor one. 

Another example is the requirement that banks renotify customers of their privacy policies every year if a bank hasn’t made 

any changes to their policies. I can understand if you are changing 

policies with them, but when you are not, it is a large expense and 

it takes a lot of money. 

Under Dodd-Frank, the proposed qualified mortgage exemption, 

on the ability to repay rules are unnecessary, complicated, and it 

is potential to make it much more costly for banks, especially small 

banks, to make loans. The QM exception alone could force banks 

to deny loans to creditworthy customers. 

Likewise, provisions on municipal advisers is problematic in 

itself and would limit the important services the banks provide in 

municipalities. 

As regulatory burdens like these increase, banks like mine find 

it hard to meet the needs of our local communities. I am really worried about the health of small banks. The average bank is $165 

million. the average community bank. Our profits of $550 million 

were decreased by 30 percent. I would imagine, likewise, theirs 

were decreased 40 to 50 percent. 

If this trend continues, they are also companies; they have shareholders. My fear is that shareholders look at the profitability of it 

and the future of it, and they tell them it is time to sell. And when 

a small town loses its community bank with its local ownership, 

that is a tragedy. 

22 

Thank you for the opportunity to testify, and I would be happy 

to answer any questions. 

[Prepared statement of Mr. Hamby follows:] 

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Chairman ISSA. Thank you. 

Mr. Pirkle. 

STATEMENT OF J. BILLY PIRKLE 

Mr. PIRKLE. Thank you, Chairman Issa and Ranking Member 

Cummings. I appreciate the opportunity to appear before this Committee. My name is Billy Pirkle. I am the Senior Director of EHS, 

or Environmental Health and Safety, for Crop Production Services. 

We are an ag retailer. I am also the Chairman of the Ag Retail Association. I am here to represent the ag retailer. The ag retailer is 

a small business with employees of around 5 to 15 in a rural agricultural area. 

ARA and ag retailers are concerned with regulatory actions by 

EPA. We believe that some of these cause unnecessary financial 

burden to our industry. I will give a specific incident that occurred 

to us and to some ag retailers as well. But at the same time I understand the comments about being resistant to regulatory change. 

But I think our industry has shown that we love to participate, and 

actually applaud the efforts of EPA as we participated and supported the pesticide container containment rule that was passed in 

2006. 

One of the things that we are actually experiencing some change 

in interpretation of the rule that is creating a burden is under 

EPCRA. In EPCRA, which was passed in 1986 and then clarified 

in 1987, EPA correctly articulated an interpretation of the intent 

of a fertilizer retail exemption. It says because the general public 

is familiar with the application of agricultural chemicals as part of 

common farm, nursery, livestock production activities and the retail sale of fertilizers, there is no community need for reporting of 

the presence of these products. 

In the reference that was placed there into the regulation under 

Section 311(e)(5), retailers are exempted from reporting requirements for fertilizers only. Therefore, substances sold as fertilizers 

would not need to be reported. However, the agricultural chemicals 

such as pesticides would need to be reported. 

In the last few years, EPA has actually visited ag retailers and 

cited them for not reporting fertilizers. There were actions taken, 

fines and penalties paid, to resolve these issues, where the ag retailer felt like they did report their Tier 2s, they did report the 

products as directed by EPA, and they were in compliance with 

those. However, due to some guidance or reinterpretation by EPA, 

these ag retailers lost the exemption and it cost them monies. 

One of the things that is also occurring that EPA is actually 

under the SIC codes for the ag retailer, they typically fall under 

5191, which is a farm wholesale suppliers. Many EPA agencies are 

now recognizing or actually identifying or reclassifying ag retailers 

as manufacturers under the SIC code of 2875. If EPA continues to 

reclassify ag retailers as manufacturers, it does place additional 

regulatory burden upon the ag retailers in the amount of somewhere around $30,000 per location, with an annual update burden 

of around $6,000. 

The second point I would like to highlight is the Clean Water Act 

pesticide permits. EPA has developed a general national pollution 

discharge elimination permit in response to 6th Circuit Appeals 

33 

Court’s decision in the National Cotton Council v. EPA. In this 

case, there actually was clarification direction given to ag retailers 

and farmers that they would need to get an NPDES permit to 

apply pesticides to waters of the States. 

These products would already have been permitted or a label approved by EPA through FIFRA, and we see this to be duplicate of 

effort and also probably differencing of opinion from the FIFRA 

group and the clean water group. This difference of opinions or actual approvals will cause confusion to the ag community and unnecessary burden as well. 

In summary, we applaud your efforts here to hear our testimonies, and we ask you to continue to hold these regular oversight 

meetings, and we ask Congress to look into legislative action to 

prevent EPA to continually give guidance, rather than regulations, 

and we look forward to answering any questions you might have. 

[Prepared statement of Mr. Pirkle follows:] 

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Chairman ISSA. Thank you, and we will. 

Mr. Williams. 

STATEMENT OF HOWARD WILLIAMS 

Mr. WILLIAMS. Thank you, Chairman Issa, Ranking Member 

Cummings, staff, representatives. 

Nearly as the 20th century, cyanide used as a fumigant was as 

likely to kill the neighbors as it was the vermin, and in the secret 

history of lead we knew, our surgeon general knew, and the manufacturers of the gasoline or additive knew, in 1922, that gasoline 

would leave behind particulates of lead which in small doses would 

affect human health. And, yet, the federal bureau studying that aspect with interest chose to leave the word lead out and chose not 

to have any press releases because the word lead would cause excitement in the newspaper headlines. 

Ultimately, the word ethyl was used, and again, because leaving 

lead out would leave the public somewhat blind as to what was in 

the gasoline additive. At that time, national gasoline sales were 8 

billion gallons per year and the additive ethyl, if it gleaned 20 percent market share, would bring in approximately $40 million per 

year in net profit. Lead was outlawed as an additive here in 1986. 

As we leave 1922 and move forward 90 years, in an advancing 

society, we see the Chicago Tribune’s article, four-part series on 

flame retardants, and again we see scarey headlines and the need 

for regulation. My understanding from a news release yesterday is 

that the EPA is investigating those allegations. And as I repeat a 

comment that I made in my February testimony, a thriving free 

market economy self-regulates demand, supply, and price, but it 

does not uniformly or equitably regulate health, safety, or environmental responsibility. The invisible hand of the free market does 

not naturally yield to the good of the whole, but regulation is a necessary balance, and spirited debate such as this is its necessary 

counterbalance. 

Fred Knapp, in writing for The Hill, cites several independent 

survey findings showing that a weak economy is more rooted in 

customer demand and concerns over that economy, and that a 2011 

U.S. Chamber of Commerce survey showed that only 8 percent of 

the respondents said too much regulation was a cause. 

I manage a manufacturing division in central Pennsylvania. We 

make architectural building products. Our business, as all businesses, are, of course, subject to regulations. But all of our investment decisions, and our company dates back to 1948; we are privately held, all of our decisions for investment are based on market 

research, solid market research, and it is on that that we make our 

decisions, not on whether some aspect of that work is regulated or 

not regulated. 

In this economy, we are blessed to have added jobs, in spite of 

the doubtful economy that we have been in. Since 2008, July of 

2008, we have added 94 jobs to our facility and we have invested 

in a startup that has now 29 other jobs, millions of dollars invested 

in that startup. 

Investments in workplace safety, trading commerce, and environmental aspects have resulted in our success within the marketplace. Our customer demand is what raises our bar, much higher 

42 

than federal or State regulation may raise it, because we are subject to the direction of the customer. 

In his 1961 farewell address, President Eisenhower said: Another 

factor in maintaining balance involves the element of time. As we 

peer into society’s future, we, you and I, and our government, must 

avoid the impulse to live only for today, plundering for our own 

ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without asking the loss also of their political and spiritual heritage. We want 

democracy to survive for all generations to come, not to become the 

insolvent phantom of tomorrow. 

Regulation is a necessary balance because the invisible hand of 

the free market does not naturally, or even willingly, yield to the 

good of the whole. Business growth and jobs creation will continue 

to be rooted in the basics of market demand. Business growth by 

deregulation has the potential to externalize costs that were otherwise covered at the point of origin. 

Business gains from deregulation will not likely be shared with 

the America of tomorrow, and we will have done what President 

Eisenhower warned us against; we will have mortgaged the material assets of our grandchildren because we chose to live for today, 

plundering for our own ease and convenience the precious resources of tomorrow. 

Thank you. 

[Prepared statement of Mr. Williams follows:] 

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Chairman ISSA. Thank you. I am sure he wasn’t talking about a 

trillion dollar deficit. 

Mr. Russell. 

STATEMENT OF STEVE RUSSELL 

Mr. RUSSELL. Chairman Issa, Ranking Member Cummings, and 

members of the Committee, good morning. My name is Steve Russell. I am the Vice President of the Plastics Division at the American Chemistry Council. ACC thanks you for the opportunity to 

participate in today’s hearing. 

ACC represents companies in the business of chemistry. Our 

members apply the science of chemistry to make innovative products that make people’s lives healthier, better, and safer. The business of chemistry is a $760 billion enterprise and a key element of 

our Nation’s economy. Our industry is one of the Nation’s largest 

exporters, accounting for $0.10 out of every $1 of U.S. exports; and 

we are among the largest investors in research and development. 

In response to the Committee’s request for information, ACC 

pointed out five areas where regulatory burdens are impeding our 

Nation’s economy and hurting jobs in our industry. Those areas included chemical assessment processes and certain air regulations. 

I am here today to highlight another example: the General Services Administration’s decision to designate a single green building 

rating system, LEED, as the standard for federal agencies and departments. LEED is one of several private sector green building 

systems which are helping to drive reductions in the energy use in 

both public and private sectors. To be absolutely clear, ACC supports this broad objective. We have supported laws and regulations 

to increase energy efficiency. We and several of our members are 

members of LEED. In fact, our own building here in Washington 

is LEED certified silver. 

Our concern is that the GSA has given its stamp of approval to 

only LEED, and LEED is currently being revised in a way that 

would jeopardize U.S. jobs and our industry’s competitiveness, not 

to mention building performance and efficiency. This matters to 

ACC, and it should matter to the Committee, because many of the 

construction materials that our industry manufactures are essential the insulation, roofing, windows, and sealants that allow buildings to achieve the kind of efficiency and savings critical to reducing environmental impacts and ensuring a sustainable future. 

GSA’s selection of LEED is damaging for several reasons, but I 

would like to highlight three. 

First, by picking a single rating system, GSA effectively creates 

a monopoly for federal buildings. Building rating systems function 

as standards, and there are various standards available to the Federal Government. When the entire Federal Government picks just 

one private standard, then competition, the engine that drives 

lower prices, greater efficiency, higher quality products, is removed. 

Once a standard captures the entire market, there is no competition and no incentive to keep the price of implementing that standard down. So, in the end, the taxpayer pays more. 

In this case, GSA continues to award a monopoly to LEED, and 

the Committee should urge GSA to, instead, construct performance-based criteria for selecting green building rating systems, and 

47 

then accept any private standard that meets the designated performance criteria. 

Second, regulations and standards adopted by agencies should be 

data-driven and science-based. Federal agencies can’t avoid obligations to make regulatory decisions based on science by simply 

adopting a private standard that is not based on science. Yet, this 

is unfortunately what GSA is doing. Recently proposed LEED updates are so weakly grounded in science that the system would give 

a credit for avoiding proven U.S. made products. These products include energy-efficient foam insulation and cool vinyl roofing, such 

as the recently installed vinyl roof at the DOE headquarters. 

This credit would also restrict the ability of the Federal Government to use shatter-resistant, polycarbonite glass, such as this example here, which is essential in protecting buildings such as 

courthouses, government institutions, and prisons from bullets. As 

you can see, a bullet has been shot into and remains impregnated 

in the unshattered glass. 

Because credits such as these are not adequately justified by 

science or data, GSA should not recommend LEED for federal 

buildings if these and similar credits remain. 

Finally, GSA is wrongly giving preference to building standards 

that could hurt the competitiveness of small American businesses. 

For example, under a proposed chemical avoidance credit in the 

current version, small U.S. manufacturers of building materials 

will have to certify that their materials comply with complex European regulations so that the builders can obtain a credit, imposing 

additional costs for U.S. small manufacturers if they wish to compete. 

A different proposed credit requires materials to be screened 

against a cumbersome tool developed by an environmental NGO, 

which adds unnecessary costs not easily borne by small domestic 

manufacturers. Of course, if compliance with the European requirement is a function of the LEED standard, U.S. manufacturers could 

decide that the compliance cost is too high and exit that market. 

ACC sincerely appreciates the Committee’s interest in working 

on regulations that hinder job and economic growth, and we urge 

you to ask GSA to recommend, instead, science-based, performancebased green building rating systems that reduce costs to businesses 

and save jobs. 

Thank you. Thank you to the Committee, and we look forward 

to answering your questions. 

[Prepared statement of Mr. Russell follows:] 

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Chairman ISSA. Thank you. 

Mr. Rutenberg. 

STATEMENT OF BARRY RUTENBERG 

Mr. RUTENBERG. Chairman Issa, Ranking Member Cummings, 

members of the Committee, thank you for the opportunity to testify. My name is Barry Rutenberg, a home builder from Gainesville, Florida and NAHB’s 2012 chairman of the board. On behalf 

of the 140,000 members of the National Association of Home Builders, I want to thank you for holding this hearing on streamlining 

federal regulations. 

NAHB members have daily interaction with scores of federal regulations and know firsthand how the regulatory process impacts 

small businesses. I want to highlight a few of those regulations 

now, but my written testimony contains much more detail on these 

and other burdensome regulations. I might add that recent studies 

show that the cost of regulations is 25 percent or more of the cost 

of a home. 

This year, regulators may make decisions that will determine the 

future shape of the secondary mortgage market. Dodd-Frank authorized significant changes to mortgage lending practices, including the ability to repay standards, which is part of what is called 

a qualified mortgage, as well as risk retention and qualified residential mortgage provisions which will determine the future shape 

of the secondary mortgage market. 

NAHB supports regulatory changes aimed at more rational lending practices, greater lender accountability, and improved borrower 

safeguards. It is critical that mortgage lending reforms are implemented in a manner that causes minimum disruption. A housing 

finance system that provides adequate and reliable credit to homebuyers at reasonable interest rates through all business conditions 

is critical to our Nation’s economic health. Overly restrictive rules 

will prevent willing, creditworthy borrowers from entering the 

housing market, even as owning a home remains an essential part 

of the American dream. 

Another key factor in housing’s current depressed state has been 

confusion over the issue of acquisition, development, and construction lending. Our members are frequently caught in an argument 

between banks and regulators, who take turns pointing fingers at 

each other for the lack of lending to the construction sector. We 

seek answers as to whether the federal banking regulators are 

pressuring the banks or if institutions are overhauling and 

downsizing portfolios independent of regulator and examiner pressure. 

A significant source of frustration in the remodeling sector is 

EPA’s lead renovation, repair, and painting rule. Renovation work 

that disturbs more than 6 square feet in a pre-1978 home is required to follow new safe lead work practices, supervised and performed by an EPA-certified renovator. These requirements do not 

apply if tests show an older home does not have lead paint present; 

however, currently available test kits have false positive rates as 

high as 78 percent. While EPA has indicated that it is committed 

to having more accurate kits, consumers are paying additional 

costs for unnecessary work practices. 

53 

EPA also removed an opt-out provision for households living in 

pre-1978 homes that do not have young children or pregnant 

women. EPA estimated removing the opt-out would increase costs 

to small businesses by $507 million. 

Legitimate small contractors will be forced to pass on these costs, 

increasing the likelihood that homeowners will turn to uncertified 

contractors who may not follow the rules. 

NAHB is also concerned about the Department of Justice’s interpretation of the Lacey Act, which seeks to prevent trade in protected plants and animals. Under the Lacey Act, Congress sought 

to exempt honest business owners and, instead, provided the U.S. 

Government more targeted tools to go after intentional violators. 

The U.S. Department of Justice, however, has virtually eliminated 

this important defense for honest business owners through a broad 

misinterpretation of the law. By deeming Lacey violation wood and 

plant products contraband, innocent companies are left without 

legal standing to challenge the government taking in court. Coupled with the requirement that the U.S. Government enforcing an 

almost limitless set of foreign laws, builders, and ultimately consumers, are left at great risk. 

Therefore, NAHB supports Representative Cooper’s bill, H.R. 

3210, the Retailers and Entertainers Lacey Implementation and 

Enforcement Fairness Act, or RELIEF Act, which recognizes the 

need to hold harmless those who knowingly are found to be in possession of products that run afoul of the Lacey Act. NAHB is encouraged that the targeted common sense reforms included in this 

legislation will address these concerns and we thank Majority 

Leader Cantor for including this legislation in his schedule. 

Again, we appreciate the opportunity to testify today and look 

forward to your questions. Thank you. 

[Prepared statement of Mr. Rutenberg follows:] 

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Chairman ISSA. Thank you. 

I recognize myself for a round of questioning. 

If we could have the first slide. I just want to make some point 

to make this at least understood to be as bipartisan an effort as 

it is. 

[Slide.] 

Chairman ISSA. The source is the Office of Management and 

Budget, Obama Administration. It says there is some evidence that 

domestic environmental regulation has led to some U.S.-based multinationals to invest in other countries, especially in the domain of 

manufacturing. And it goes on. 

[Slide.] 

Chairman ISSA. Next slide, also from the Office of Management 

and Budget says regulations can also impose significant cost on 

business, dampening economic competition and capital investment. 

[Slide.] 

Chairman ISSA. The next slide says, again, Office of Management 

and Budget, Obama Administration, regulations can place undue 

burdens on companies, consumers, and workers, and may cause 

growth and overall productivity to slow. 

If I had more than five minutes, I would go on for another fiveplus minutes with examples where this Administration has said repeatedly that, in fact, regulations can cost jobs. But let me just I 

will look at the LEED certification example for a moment. I own 

a LEED certified silver building; it doesn’t have GSA in it, it has 

a tenant in it that invested several million dollars in redoing the 

building to meet that standard, and it is a wonderful building. But 

let me ask a couple of quick questions. 

The GSA doesn’t pay for TIs. My understanding is they want everything included in the rent, including the utilities, isn’t that correct? 

Mr. RUSSELL. Yes, Congressman. 

Chairman ISSA. So when the GSA puts a mandate on taking half 

a building, a quarter of a building, or an entire building, aren’t 

they in fact, in a sense, driving up the cost to the taxpayer of capital improvements that may be for as few as, well, in the case of 

the census that was in my building for less than a year, they can 

in fact be in there for just one year, isn’t that true? 

Mr. RUSSELL. That is correct. 

Chairman ISSA. So let’s go through this. The GSA only has one 

basic way they like to contract for leased facilities, which is they 

like to have an all-in strategy. They are telling you to upgrade the 

utilities, upgrade all of these items, when in fact there may be a 

partial tenant and only in there for a short period of time; there 

may be no cost benefit. But even if there was a cost benefit, isn’t 

it true that since they are not paying the utilities, they are in fact 

already encouraging the building owner to make the changes that 

are in their best interest to drive down the cost of those utilities? 

Mr. RUSSELL. That is absolutely correct. 

Chairman ISSA. So they are just not protecting the taxpayer, 

once again. 

Mr. RUSSELL. Well, as many benefits as energy efficient, high 

performing buildings provide, the question of how the Federal Government goes about mandating the use of a particular system to 

71 

get there removes the competition, artificially inflating the cost of 

having that green building meet higher performance standards. 

Chairman ISSA. I guess what we need is maybe a conference to 

bring all the GSA people together to discuss how they could do this 

better. I think they had one recently; I am not sure if they have 

another one planned right now. 

Mr. CONNOLLY. Would the Chairman yield on that, Mr. Chairman, for a friendly observation? 

Chairman ISSA. Of course. 

Mr. CONNOLLY. I would welcome such a suggestion, because 

there is another aspect of this, and that is GSA practices. When a 

long-term lease is expired, it exerts the right to stay, nonetheless, 

until it finds a new location, and that has enormous impact on the 

owner of a building in terms of financing costs because it is caught 

in limbo, and it can actually put a company out of business, depending on how many buildings they own. So some of the practices 

being deployed right now by GSA are, to me, very injurious to business interest. 

I thank the Chair for yielding. 

Chairman ISSA. Thank you. And the gentleman knows, because 

he has probably more GSA contracted space than probably any 

other member of Congress. 

Mr. Russell, I am going to stay on this subject and let others go 

to other subjects. When we look at GSA, both this Committee and 

other committees of jurisdiction, if GSA came in and said we would 

like you to meet LEED standards and other standards, we would 

like you to embrace these, but we want you to do it in a transparent, cost-effective way, I am assuming that your members would 

be thrilled to run an analysis of energy savings, cost, capital improvements, and so on, so that it would be transparent as to 

whether, in that one-year lease, it made sense to upgrade or the 

best value for the taxpayer for a short or part of a building lease 

might be less, something that currently, I understand, is not in the 

bidding process. 

Mr. RUSSELL. That is correct, Chairman. If I may. 

Chairman ISSA. Of course. 

Mr. RUSSELL. Our members manufacture the kinds of products 

that allow buildings to achieve their highest performance. Innovation is at the core of our industry, and the innovative potential of 

the chemistry industry to deliver the kinds of tools that we need 

to increasingly improve is at risk because of GSA’s continued selection of only one system, rather than setting high bars and letting 

different systems meet that standard. We would, of course, be in 

favor of having GSA select performance-based criteria and then encouraging competition on how to reach them, which would, in turn, 

increase transparency among the various systems and the various 

materials. 

Chairman ISSA. Speaking of transparency, that piece of what we 

often call bulletproof glass that you held up, my understanding is 

that is what the President stands behind in order to be protected, 

something either identical or substantially similar. 

Mr. RUSSELL. That is correct. 

Chairman ISSA. Well, I am certainly hopeful that GSA understands that we all, when appropriate, want to have that kind of 

72 

protection, and if it doesn’t meet somebody’s environmental questions, I would still save life savings comes in all forms. 

With that, I recognize the Ranking Member for his round of 

questions. 

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

First of all, I want to thank all of you for being here, and I appreciate everything that you have said. 

Mr. Hamby, I understand what you are talking about. And with 

regard to the banks and our community banks, we see the results 

of regulations and I have seen it; I know exactly what you are talking about. What we have to keep in mind, too, is I am sitting here 

and I am thinking about how important balance is in everything 

that we do. When everything gets out of balance, you have a problem. And the sad part about it is, and I can’t think of a better word 

than some crooks did some very unfortunate things and got us into 

having to even come up with a Dodd-Frank. So I think probably 

what happened, in an effort to prevent it from happening again, we 

found ourselves in this situation. So I can appreciate everything 

you said. 

I can also appreciate what you said, Mr. Williams and Mr. 

Rutenberg, because as you were talking, Mr. Rutenberg, I could not 

help but feel a little bit emotional, because when you talk about 

lead paint, I think about all the children that I grew up with, many 

of whom inhaled lead paint and many of whom their development 

was retarded or arrested, and they never grew up to be what God 

meant for them to be. Some of them are sitting in prisons right 

now; some of them were, of course, put in special ed, never to escape and their lives were stolen from them, their futures were stolen from them. And to be very frank with you, I mourn for them 

every day; and it is still going on. 

But, again, I go back to what I said to Mr. Hamby: it is a thing 

of balance and it is a thing of practicality, and the quotes that the 

Chairman just put up there, this Administration has recognized 

that there are problems and this Administration has done probably 

more than any other administration trying to address those issues. 

President Obama has had a balanced approach towards regulations; he focused on identifying regulations that are unnecessarily 

burdensome to business and even issued several Executive Orders 

directing agencies to modify or repeal any existing regulations that 

are unnecessarily burdensome. The President has also finalized 

several key regulations that are critical to curb dangerous business 

practices or reduce harmful pollutants and toxins in our environment. The benefit of these rules far outweigh the costs and their 

implementation is critical to the health and safety of Americans. 

Yes, Mr. Rutenberg. I want you to be brief because I have something else I want to say. 

Mr. RUTENBERG. I will be brief. NAHB has policy on record in 

support of protection against lead. My spouse has spent 20-something years in special education as a speech language pathologist. 

I understand it. Our problem is with the implementation and execution. The rules were promulgated based upon the assumption 

that there would be a phase 2 test kit available in August of 2010; 

it is still not available. That is the one that is giving us false readings. 

73 

Mr. CUMMINGS. Mr. Rutenberg, I want you to be clear. I am not 

going against you. I think that we have a test kit that is inaccurate. We need to deal with that. 

Mr. RUTENBERG. Yes, sir. 

Mr. CUMMINGS. And I am 100 percent with you on that. 

Mr. RUTENBERG. And we are with you on that. 

Mr. CUMMINGS. The problem is that, at the same time, though, 

I have kids that I want to protect, and I have folks who, again, 

may never grow up to do what they were intended to do when they 

came upon this earth. 

But let me just tell you another little thing. Another reason why, 

whenever we have these hearings, I always think about when I 

was a kid in high school. I worked at Bethlehem Steel during the 

summer. When you would go to Bethlehem Steel, Mr. Williams, if 

you had been there for about, when you were there, and I didn’t 

think of this because you were just having fun, you were making 

a few dollars, you were getting a check for the first time. I didn’t 

think about it then, but now I look back at it. When you were there 

for about 30 minutes, if you blew your nose, black or red mucous 

came out, in 30 minutes. There was no requirement that I know 

of, to have a mask over your face. I mean, this is just from walking 

around the grounds. 

And then I think about all the people who have died, who I know 

have died of lung cancer. Now, these guys were making a lot of 

money, but they died early. So I think when we talk about regulations, first of all, I want to make sure that we are fair to this President; that he has done what he can to try to address this problem. 

As I said in my opening statement, it showed down the process of 

approving all these regulations and acknowledged that there is a 

problem. But at the same time I just want to point out that there 

is also this benefit to regulations. I think that is what you were 

trying to say, Mr. Williams. 

I had 50 million questions. My time has run out. But I just wanted to say that. Thank you, Mr. Chairman. 

Mr. WALBERG. [Presiding.] I thank the gentleman. 

I recognize myself for five minutes of questioning. 

Thank you to the panel for being here. So many questions could 

be asked, with so little time. 

Mr. Yarossi, EPA has issued a proposed rule to reclassify coal 

ash, as you have indicated, as a hazardous waste. How much will 

this reclassification increase cost for the transportation sector 

alone? 

Mr. YAROSSI. ARTBA study has indicated it will cost $104 billion, 

about $5.4 billion a year over the next 20 years. Just to put that 

in context, the bill that was just passed reduced funding for highways by $2 billion a year from what it was at the 2009 levels. If 

you add that on to it, then we have a significant reduction in our 

ability to improve our transportation systems. 

Mr. WALBERG. To build roads. 

Mr. YAROSSI. Yes. 

Mr. WALBERG. How does the transportation sector use coal ash? 

Describe it for us. 

Mr. YAROSSI. It is used in many ways, but primarily coal ash is 

used as a material in cement. 

74 

Mr. WALBERG. Does it perform any specific function as a specific 

material that is used? Does it replace something else? 

Mr. YAROSSI. Oh, yes, sure. Absolutely. The EPA, and I am going 

to look at my statistics here, estimated that using coal ash at the 

levels we are using now results in annual greenhouse gas reductions in concrete between 12.5 and 25 million tons. But it is actually helping in the reduction of greenhouse gases. It also helps 

make concrete more durable and stronger, so we get a longer life 

out of our product. 

Mr. WALBERG. And it is a waste product that is being used in 

a very useful, important function. 

Mr. YAROSSI. Yes. 

Mr. WALBERG. And the cost factor savings as well. How will the 

transportation sector deal with increased costs if this proposed rule 

goes through? 

Mr. YAROSSI. That again is going to fall back onto the owners, 

and that would be varied widely, but I would have to imagine there 

will be less projects out there. The cost of building anything will 

go up and the amount of money, until we see some new revenue 

coming into the transportation system, the answer, I think, is easy: 

there will be less projects going on. 

Mr. WALBERG. So less jobs? 

Mr. YAROSSI. Less jobs. 

Mr. WALBERG. Less economic opportunity and future as well. 

Mr. YAROSSI. Right. 

Mr. WALBERG. The rule, as I understand it, will not only increase 

our utility costs, utility costs as a result of disposing of this byproduct of coal, but it has an adverse impact, as well, on commercial 

value of coal ash. Mr. Yarossi and Mr. Rutenberg, if I could ask you 

how much coal ash do your industries use? 

Mr. YAROSSI. I don’t have that figure with me. 

Mr. WALBERG. A lot of it? 

Mr. YAROSSI. A lot. Oh, yes I do. In 2008 I have a figure. Again, 

I am going back to my facts here,12.5 million tons of coal ash was 

used in the production of concrete. 

Mr. WALBERG. Okay. A significant amount. 

Mr. YAROSSI. A lot. 

Mr. WALBERG. That would have to be disposed of some other 

way. 

Mr. YAROSSI. Exactly. Yes, sir. 

Mr. WALBERG. Mr. Rutenberg. 

Mr. RUTENBERG. I do not have the number, but I will tell you 

that it is used extensively and that it varies by region and by specific Ready Mix plant and how they do their concrete mix. So it 

varies, but we use a lot of it. 

Mr. WALBERG. On drywall, for instance, how would the construction continue for that, maintain construction? How would the cost 

be affected without coal ash? 

Mr. RUTENBERG. We are using the byproducts from scrubbers on 

coal plants to be, we call it synthetics drywall. That is my personal 

way, it may not be accurate; and it takes the place of mined gypsum. So it has a double benefit: we no longer have to mine as 

much, we have a byproduct that we don’t have to dispose of it, and 

in some plants they will have cogeneration that will actually locate 

75 

the drywall plant with the coal power plant so they can use the 

steam as a byproduct to run the drywall plant. 

Mr. WALBERG. Let me ask a further question on coal ash. Mr. 

Yarossi, can you talk about how EPA studied the issue of whether 

coal ash should be regulated as a hazardous waste in the past and 

the conclusion that they reached? 

Mr. YAROSSI. I do know that on four separate occasions EPA has 

studied coal ash and determined that it didn’t warrant regulation 

as a hazardous waste: 1988, 1993, 1999—— 

Mr. WALBERG. That it didn’t warrant regulation as hazardous 

waste? 

Mr. YAROSSI. It did not warrant regulation as a hazardous waste. 

Mr. WALBERG. Has anything changed to merit the EPA’s change? 

Mr. YAROSSI. To my knowledge, there is no change in any scientific information that would warrant change. 

Mr. WALBERG. Thank you. My time has expired. 

I recognize Mr. Kucinich. 

Oh, excuse me, Mr. Tierney. 

Mr. TIERNEY. Thank you, Mr. Chairman. 

Thank all of you for your testimony. 

You know, I don’t object to having a hearing on any one of these 

areas here; I think we all understand that there is a tension, natural tension between a consumer and a producer, between a person 

working in the job and the boss and all of that, around safety concerns or whatever. So we ought to have these hearings to make 

sure whatever rules are out there are fair, they are being enforced 

fairly, they make sense. So any one of these subjects would be a 

pretty good hearing in and of themselves. 

What I sort of do object to, Mr. Chairman, is that we have a 

spray of six people in six different industries. Everybody gets about 

five minutes to sort of delve down a little bit and you don’t get any 

counter-arguments because we have about a five to one ratio here 

perspective. What I think it would be healthier, to take any one of 

these subjects and bring on a much more even balance of people 

so we get the full array of opinion here and perspective, and see 

whether or not there is something wrong with a given rule on that. 

I don’t think anybody here thinks that we should have unfair, I 

was in business for over 20 years and represented a lot of businesses, spent a lot of my life arguing about rules and regulations 

on that. Yet, I think there should be rules and regulations, and I 

would bet that everybody on this panel thinks that there ought to 

be some standards. Three national business organizations took a 

poll recently. The top problem with the economy right now, in their 

perspective, anyway, isn’t rules and regulations; those are things 

that constantly aggravate people and they have to deal with it. But 

their problem is a lack of demand. If I go out in my community and 

say what is wrong, they will say, I don’t have any customers. People are out of work; they don’t have the money to spend; they don’t 

have any customers. 

Seventy-eight percent of small business people think that government standards are important to level the playing field between 

their business and big business. Eighty-six percent they are a necessary part of a modern economy. Eighty-four percent say they support food safety standards. You talk to any group of people out in 

76 

my neighborhood, you talk to mothers and fathers around the playground and everything like that, they are worried about the kind 

of food that is being imported and not checked. They are worried 

about toys coming in and not being checked. Those are legitimate 

standards on that. They are worried about clean air and clean 

water. 

I grew up in Salem. We used to have the North River run right 

down the center of Salem. It was purple and blue and green and 

noxious. We lived over half a mile away. We couldn’t sit on our 

deck. I think it was a good idea to get some standards to clean that 

up. Now Salem is a vibrant community and you don’t smell any of 

that stuff going down. People are boating and enjoying the water. 

So the issue, I think, here is not that we shouldn’t have hearings 

on that to make sure the rules and regulations are effective; it is 

this notion of putting it under an umbrella that regulations are 

killing our economy, they are killing our job creators. That is total 

nonsense and I don’t think there is an iota of evidence that we 

have either heard today or that exists out there for this larger notion. We have sat in here, in this Congress, on that theory and 

talked about mercury emissions from power plants as somehow 

being job killers. 

We are talking about a 1990 bipartisan amendment to legislation 

of the Clean Air Act. The bipartisan legislation ordered the EPA 

to set standards. Seventeen States adopted it on their own. There 

are 772 million pounds of airborne toxics out there. I would think 

that none of these witnesses want to be sucking it in at 2.5 pounds 

per person on that basis. Twenty years it took for the EPA to get 

to dealing with that issue, and even when it gets passed, it hasn’t 

passed yet, it is going to take four more years for people to get 

ready to implement it. Thirty-one thousand construction jobs will 

be created, 9,000 continuing jobs in the utility industry. Yet we are 

arguing, benefits are 25 times the costs of that in terms of health 

and 160,000 lives will be saved. What are we arguing about in 

terms of that? We have hearings on that instead of the things that 

these gentlemen bring to the table. 

We limit toxic emissions from a variety of cement on that, as if 

the cement thing is going to pack up and go to China if it doesn’t 

get its way on this basis. But those are chemical compounds that 

do contribute to smog and pollution, and for every $1 we put in on 

enforcing that rule to clean those up, we get about $19 back in a 

public health benefit. 

We are talking about the import of illegally harvested endangered wood for guitars. This is what we spend our time on, not on 

the building industry, which has some serious concerns on that; not 

whether LEED is the good example or whether we have other 

standards that should be brought in and why; not on the banking 

industry, what is happening about community banks versus people 

on Wall Street that basically brought this Country and almost the 

international community to their knees. That is not what we are 

talking about. We are talking about guitars, which, incidentally, 

made $1 billion under this so-called onerous restriction of not letting them bring in illegal, imported wood. 

We had a hearing here on invasive foreign snakes. Now, there 

is something really slowing down the community. The evidence was 

77 

one person in Utah who said in 2010 he had to lay off four of his 

seven employees. In 2008, rather. Of course, 2008 was the height 

of the recession, and the rule he was complaining about didn’t get 

put in until 2010. But this we had a hearing on. 

So it is not the fact that we shouldn’t have these hearings; this 

is what this Committee should be doing, and all of these are legitimate concerns. We can come down on one side or the other, but we 

ought to have a full hearing on those that we think are important 

enough to impact the economy so that it takes Congress’s attention; 

not the nit-picking stuff that are left to lawyers and experts that 

are going to go in front of the rules agencies and argue whether 

or not it should be amended or changed one way or another, but 

the ones that make substantial public policy that really do make 

a difference, and then have a full hearing on all of that, with 

enough perspective in there that we can all get a reasonable decision made as to what is good and what is bad. 

Really, I think the problem with the Majority here is when they 

acknowledge that that is not really the problem, that the problem 

is a lack of demand and a lack of customers, then they are going 

to have to put some attention on the American Jobs Act and get 

people back to work in excess of 1.9 million people back to work 

in a very short, relative order on that, and that is their problem. 

So they have to look for something else to rail about and have to 

entitle hearings like this with a broad notion that it is job killers 

and job creators, and that stuff. Let’s do our job. Let’s have a hearing on each of these things that are important in their own respective and are industries that maybe do impact the economy, not 

bring in a show of six people, give them barely any time to make 

their case or have anybody to rebut it so that they can get deep 

into the weeds, and we can do our job in that way. 

With that, I yield back. 

Mr. WALBERG. I thank the gentleman. His time has expired. A 

good history lesson, but we will have opportunities for plenty of 

hearings, I am sure, and building the economy. 

I now recognize the gentleman from Oklahoma, Mr. Lankford. 

Mr. LANKFORD. Thank you, Mr. Chairman. 

This conversation about red tape is really a big deal. I don’t 

think anyone on this dais or on this panel would disagree that 

there is an appropriate role for the Federal Government and for 

State and local governments in setting boundaries and regulations, 

but there has been a shift, it seems. The increased use of guidance 

documents, rather than actually doing formal rulemaking so that 

a guidance hangs out there and doesn’t go through all the comment 

period to make changes; the major rules are now supplemented 

there, and we have more major rules with $100 million affect on 

the Country than we have had before. The congressional intent is 

not being able to be evaluated; that is why bills like UMRA that 

this Committee dealt with last year, the Unfunded Mandate Reform Act, is such a big deal. 

Let me get a chance to bounce off a few questions off a few of 

you in the time that I have here. 

Mr. Hamby, I want to ask you a little bit about Dodd-Frank. 

There was a lot of conversation about Dodd-Frank, it doesn’t apply 

to community banks, that this applies to the big banks. So when 

78 

Dodd-Frank comes down, does it have any effect on you as a community bank? 

Mr. HAMBY. Oh, it absolutely does. We were just talking about 

the qualified mortgage that the gentleman, Mr. Rutenberg, was 

talking about. That is going to be dramatic for us. If this is not 

monitored and this part of the bill is not watched very closely, we 

could come out with a dinosaur, basically, that we can’t manage. 

It can be extremely complex; it can take us out of the business. I 

understand why it was written; I understand why it was designed. 

It is all with good intentions. But when you go down and you look 

at the small community, where the average mortgage is $30,000 to 

$50,000, the cost is the same to make that mortgage as it is a 

$500,000 mortgage. 

Mr. LANKFORD. Okay, we have a $50,000 mortgage with a tremendous cost burden now that has been added to it. Give me just 

a thought here on a home loan application, going through the process of that. Has there been a change in the past couple years in 

the home loan process, the length of time it takes, the difficulty of 

making the loan? 

Mr. HAMBY. Oh, sure. Five years ago I was closing mortgage 

loans in 10 to 15 days and probably having documents about an 

inch thick. Now it takes me 40 to 45 days and the documents are 

about three inches thick. I don’t know anyone that reads all the 

documents because they really can’t. They used to read them, but 

they are hugely burdensome to the consumer. 

We want to do what is right. We want to make sure they are protected. We want to make sure they understand the terms and the 

conditions. I am a big consumer advocate on that. But the way we 

have it done, we are killing a lot of trees, we are hiring a lot of 

regulators, I am hiring a lot of lawyers, and I don’t think the people are any better protected. 

Mr. LANKFORD. What effect does this have on a smaller bank? 

You are a community bank as well, but let’s take a bank of $500 

million or less, or $50 million or less. 

Mr. HAMBY. Sure. Let’s take a little back out in the rural area 

of the Country that is a $50 million bank. With all the hoops they 

have to go through to make the mortgage loan and to make sure 

they are doing it right and they are in compliance with DoddFrank, if the qualified mortgage rule gets enacted improperly, it 

will very well take them out of the mortgage lending market. And 

they are the only person that makes a loan to people in small rural 

communities; there isn’t any big Wells Fargo or anyone like that 

to do it out there, it is simply too small. 

So they do it. There aren’t good appraisals. When you get an appraisal, you have to have comp values, at least three in the last six 

months. Well, if you are in a small town and the average home 

price is $50,000 and you have a $100,000 home, you are not going 

to find three property values in six months, so you are not going 

to meet Freddie Mac-Fannie Mae guidelines. So the bank is going 

to make the loan; it is probably going to be adjustable every five 

years; it is not going to be going out to the secondary market where 

you can get the 2.85 percent interest. And then part of the rule is 

to watch what is called the high priced mortgage. It will fall in that 

category and that will further take away from the community 

79 

bank’s ability to serve that customer who wants to finance his 

home or build his home. It is a real issue for community banks. 

Mr. LANKFORD. So you are saying in community banks in rural 

America, this solution that was put out there really is a solution 

for urban areas that deal with larger banks, but for the community 

banks and the smaller areas, all those burdens are coming down 

on them. 

Mr. HAMBY. Absolutely. A lot of them are, and it can be very devastating. It is the rule of unintended consequences. 

Mr. LANKFORD. How many staff did you have to hire or how 

many dollars did you have to spend last year dealing with just 

compliance? 

Mr. HAMBY. Just compliance last year? I can’t tell you the total 

dollar I spent on just compliance, but, as I said, it increased in the 

last three years by $1.4 million. 

Mr. LANKFORD. So just the increase. Because, as you mentioned 

before, banks are some of the most regulated industry in America. 

Mr. HAMBY. That is right. 

Mr. LANKFORD. Lots of regulations already. But in addition to 

the regulations that have been there for a long time, you had an 

additional $1.4 million in cost? 

Mr. HAMBY. An additional $1.4 million of cost. Right now regulatory compliance is my third largest expense item. The first is interest expense; the second one is human resources expense; and 

then the third one, which used to be way down the line, is now regulatory compliance expense. 

Mr. LANKFORD. One quick question. 

Mr. HAMBY. Yes, sir. 

Mr. LANKFORD. The Volker Rule and several other rules that are 

not supposed to apply to community banks, do you have to prove 

that it doesn’t apply to you, or is it just automatic, if you are a certain size it doesn’t apply to you? 

Mr. HAMBY. Oh, you have to prove it doesn’t apply to you. 

Mr. LANKFORD. So how long does it take to prove that this rule 

doesn’t apply to you? 

Mr. HAMBY. Well, I don’t know yet, but I am sure I am going to 

get the privilege of finding out. 

Mr. LANKFORD. It is a long process, though. 

Mr. HAMBY. It is a long process, yes. The community advisor 

rule, let’s talk about that for one second while we are on that. Community advisor rule says if you give advice to counties or municipalities, you need to have a registered advisor. We are going to 

have a registered advisor, we understand that, but the definition 

in the regulation that has come down now is anyone that talks to 

them about it. The teller who says you may want to look at a CD 

has to be a registered advisor; anyone that does it. 

The same thing right now, you have to register all mortgage 

originators. Well, that is fine, we have five in our bank that originate mortgages. But when it came down through regulation, it is 

anyone that in any way possible manner talks about the rate on 

a mortgage. I am registered and so are every one of my officers. 

Every one of my secretaries, anyone that touches a loan, my administration clerks. I have registered about 28 or 30 people, paid 

fees, fingerprinted, keep up with it, as mortgage originators even 

80 

though they don’t have the slightest thing to do with mortgage 

origination. 

Mr. LANKFORD. Thank you for that. 

I yield back. 

Mr. WALBERG. I thank the gentleman. His time has expired. 

We now recognize the gentlelady from D.C., Ms. Norton. 

Ms. NORTON. Thank you, Mr. Chairman. 

I have a question for Mr. Williams, but I taken by Mr. Russell’s 

testimony and I would like to ask him a question first, because it 

has always seemed to me that one way to eliminate the public notion that businesses are always for regulations and for the general 

good, until the first regulation appears, is for the industry to set 

up its own standard and invite the government to use it . So I was 

taken by your testimony about the LEED standard. You say in 

your testimony that it is one of several private sector green building systems that help drive reductions in energy use in public and 

private sector buildings. So you do understand that as a landlord 

and as a lessor or lessee, that the Federal Government has an interest in driving down the costs. 

Now, let’s go to LEED. I take it that LEED was a pioneer in this 

green technology. Is that why we always hear LEED used? 

Mr. RUSSELL. Yes, Congressman. LEED is one, but there were 

others that have developed alongside. 

Ms. NORTON. Yes, but LEED was probably, whoever gets there 

first probably gets an advantage, and I can understand your concern. But understand what interests me is that GSA didn’t go and 

figure out its own regulations; it looked to see what was best practices. And who did it turn to? It turned to private industry. So it 

chose LEED. And you want them to choose a number of different 

standards, and you say that the LEED standard is being revised 

in a way that could jeopardize U.S. jobs. 

Has GSA said it approves of the revisions and will continue with 

the LEED standards with revisions being made? 

Mr. RUSSELL. Congresswoman, thank you for the question. That 

is precisely the point. The GSA has undertaken, as it is required 

to do, a review of green building rating systems and has compared 

several of them side-by-side. In fact, in many cases GSA’s review, 

their own review, found that another building standard was preferable in certain of the criteria. 

Ms. NORTON. So what did it do in that case? 

Mr. RUSSELL. Well, the review is ongoing and is not complete yet, 

but GSA, until today, has recommended for federal buildings under 

the scope of its recommendation they use exclusively LEED. 

Ms. NORTON. All right, so the review is ongoing. We had LEED, 

which was the first, and it did something that it seems to me we 

like to see done more often, and now you are saying they are reviewing a number of standards and they haven’t said they won’t 

use a number. Now that a lot of people have understood that it is 

good business to be green, we now have lots of companies, that is 

the American way, saying we can have standards as well, and our 

standards are just as good and our standards are particularly befitting American industry. 

GSA hasn’t said it won’t use these standards. It is reviewing 

those standards now that there are more actors in this area. 

81 

Well, you don’t contradict that. 

Mr. RUSSELL. I am sorry, I was waiting. I assumed you were distracted. My apologies. 

I would like to respond in that the version of LEED that GSA 

currently requires exclusively was a version of LEED that has existed until now. LEED’s proposed regulations are those which we 

have been questioning as hurtful to our industry, and perhaps also 

to—— 

Ms. NORTON. Well, so government is doing it the right way: they 

are proposing the regulations; they are reviewing the regulations. 

You even say that in the DOE headquarters they used cool vinyl 

roofing that you approved of. 

Mr. RUSSELL. DOE has a special exemption and were able to do 

that. That roofing, however, would not be available to —— 

Ms. NORTON. Okay, I just want to put on the record, Mr. Russell, 

that they are reviewing, that there now are more actors in the field 

and that is what happens. When they see LEED getting all the 

business, you have people saying me too, me too, and I don’t see 

how there can be objection to that, particularly if they are under 

review. 

Mr. Williams, you are in a business that ought to know a lot 

about LEED, and you say that you have created 94 jobs since July 

2008, so I have to ask you, first, your view of LEED and how there 

might be other systems as well that should be used, and also how 

you were able to increase your business, including a new business 

startup, apparently, while complying with regulations, and why 

regulations didn’t hinder you. Or if they did, or make it more difficult, I wish you would explain how. 

Mr. WILLIAMS. Thank you. Yes, I do have some expertise in that 

inasmuch as I am a LEED accredited professional. And I think as 

such there are a few things, certainly Chairman Issa, in his comment as he spoke about the GSA wanting to lease buildings where 

all utilities are included and that that is problematic, I agree with 

him on that, and so does the U.S. Green Building Council. The U.S. 

Green Building Council really wants the tenant to pay the utilities 

because then the tenant is responsible for being responsible. 

Secondly, I think it is really important to note that LEED 

version 3 is what is in operation today. LEED version 4 is what 

is being considered. No versions of LEED, 3 or 4, rule any product 

out of a building. Unequivocal. LEED version 4 brings into play 

two material and resource credits that deal with the chemistry of 

materials. A building can be built and not even use or require the 

use of those two credits. The bulletproof glass is still going to be 

used as bulletproof glass, until such time as there are alternatives 

or a architectural owner group that wants to use the material and 

resource, those options within the material and resource credits. 

The jobs that we have been able to create have been because of 

our position. These are customers. Our customers are asking for 

building products with certain attributes. We, very early on, invested in those products with those attributes that actually, today, 

position our materials to be well chosen in version 4 but, again, do 

not make our materials exclusive for version 4. 

So our work in the environment, particularly in the environment 

within the building construction area, is what has allowed us to 

82 

grow through customer demand. Our business growth 2011 over 

2010 was 20 percent. No segment of our economy that I am aware 

of grew 20 percent at that time, and the building sector did not 

grow 20 percent at that time. We are responding largely to customer demand and understanding, and translating those customer 

demands are what has allowed us to create jobs, as opposed to 

issues dealing with regulation. We are regulated and we know 

there are times when that can be problematic, but that is not what 

I came today to talk about. I came today to talk about how our 

business has grown in this economy, and that is why our business 

has grown in this economy. 

And, Representative Issa, you may have missed a comment that 

I made, and that is that the U.S. Green Building Council would 

strongly agree with you relative to a tenant leasing where the utilities are included in the lease. The U.S. Green Building Council 

very specifically wants the tenant to pay for their water and their 

electricity so that they are aware of what they are using, so that 

they are better stewards of that. 

Chairman ISSA. [Presiding.] And we are going to work on getting 

GSA to see the light. 

With that, we recognize the gentleman from Arizona, Mr. Gosar. 

Mr. GOSAR. Thank you, Chairman. 

Being from Arizona, we really understand where this is heading. 

I am also a health care professional. We have to believe that there 

are rules and regulations that we have to look at, but government, 

a lot of times, is the problem. It is called that knee jerk reaction. 

Instead of conscientiously looking at the problem and sorting it out. 

How does that Hippocratic oath go? Do no harm? We find that over 

and over again. 

I want to direct my first question to Mr. Rutenberg. In your testimony you mentioned that a National Association of Home Builders, 

NAHB, housing market index survey conducted in January of 2012 

found that 69 percent of builders reported that quantifying buyers 

for mortgages is a significant problem for them. Why is this the 

case? 

Mr. RUTENBERG. It is a continuation of what we have talked 

about, how the banks are becoming very cautious; that they are 

having loans sent back to them by the Fannie, Freddie, and other 

GSEs. To be defensive, the average loan set of documents now exceeds 500 pages. The length of time has grown so long the appraisal has become a problem. Secretary Donovan said, in April, 

when I was in a meeting with him, that he believes that the pendulum in the housing finance has swung too far the opposite way; 

it needs to come back in the middle. Whenever we have had problems, we tend to overreact. We have overreacted, and now if we can 

come back in the middle, it would be much better. We could give 

the protection that we need and we could focus back on what is 

pragmatic. 

Mr. GOSAR. So a closer analogy, when I was going to health care, 

instead of using a cleaver with these, we should have used a scalpel. 

Mr. RUTENBERG. It would be as if you sent almost everybody for 

a CT or an MRI. 

83 

Mr. GOSAR. Or brain surgery instead of maybe a dose of antibiotic. 

Mr. Hamby, would you agree with that? 

Mr. HAMBY. Yes, sir, I would. 

Mr. GOSAR. Do you see CFPB is on the right track? 

Mr. HAMBY. They are in some instances, sir; in others they are 

not. I think we have to be very careful about how it is implemented. The concerning things are really that there is no oversight 

board for them and there is really no budgetary constraints; it is 

a czar system, which is concerning in itself. But we must be diligent. This Committee needs to be diligent to make sure the things 

like the qualified mortgage that we are talking about are sensible, 

usable, and do not cause more problems than they create. 

Mr. GOSAR. Well, I am very concerned about it. Being from Arizona, in the last year we ranked second in foreclosures again, so 

the housing market is a huge industry for Arizona, as well as the 

Nation. Do you think they are on the right track in regards to the 

ability for the repay rule? 

Mr. HAMBY. You know, I think it is too early, quite honestly, to 

say yet, but I think we should look at it very cautiously. 

Mr. GOSAR. If they are not on the right track, how would you say 

they go about getting back on the right track? 

Mr. HAMBY. Well, the right track is to sit down with all the industries, the trade associations, go over it, reach a consensus between everybody as to how we accomplish the goal and, at the 

same time, make sure that our mortgage market thrives and continues to work well. 

Mr. GOSAR. Also what I think include the community bankers, 

would it not? I mean, I am from rural Arizona—— 

Mr. HAMBY. Absolutely, sir. 

Mr. GOSAR. That is what makes 99 percent of our loans out in 

rural Arizona. 

Mr. HAMBY. Yes, sir, and that is why I am pleased to be able to 

testify today. 

Mr. GOSAR. Thank you for being here. 

How would you feel about that, Mr. Rutenberg, as far as that 

repay rule? 

Mr. RUTENBERG. I think that we have to be very careful. I am 

very concerned that we are going to see the rules for the first time 

in December, and they are supposed to be implemented in January. 

We wish we would be more active in the conversations, as you alluded to. One of the things for the qualified mortgage, we very 

much support the safe harbor, as opposed to rebuttable. We believe 

that they need to be proscriptive, pragmatic, and something that 

lenders can do and feel comfortable in, and when they have the 

comfort, we will see lending become more abundant. 

Mr. GOSAR. I am going to kind of skip ahead because I am limited on time. In regards to—you know, I put myself through school 

as a contractor builder, so I understand a lot of that aspect. One 

of the things is the AD&C type of loans in regards to contractors 

buying and financing a house and a start. Tell me how would you 

see revamping that, or do you see that being the ability to kind of 

jump start our economy in home building? 

84 

Mr. RUTENBERG. There is no question that the small and medium 

size builders need AD&C to be able to compete with the larger 

builders. But they are getting their money directly from the large 

banks and from Wall Street. The regulators in many parts of the 

Country, in your State, in my State, I am sure in my State, just 

tell the banks you cannot do any more lending, you have to continue to shrink your real estate assets. So the banks are not able 

to loan to the builders. It has become almost non-existent. And it 

is starting to ease up just a little bit, but not enough to take care 

of the demand, because the inventory of new homes is at an alltime historic low, both percentage and by units. 

Mr. GOSAR. Mr. Hamby, I am going to take one more second. You 

know, the analogy was always made to me that sometimes it is 

that loan that is made in tough times, probably with not the right 

information or the best information, that actually is the best loan 

given. Is that something that you would agree with, that a community bank is much more apt to be able to make that right decision? 

Mr. HAMBY. Yes, sir, I would, and many times that is exactly the 

case. Not always, but most of the time. It gets to the character 

issue I talked about earlier and the judgment call that we make. 

Mr. GOSAR. It is that area of looking somebody in the eye and 

understanding exactly the fortitude about how they are going to 

repay that. 

Mr. HAMBY. We know what they are going to do; we understand 

our community; we know what the impact to the community will 

do; and we have a pretty good feel as if it will work or not. 

Chairman ISSA. The gentleman’s time has expired. I thank you. 

We now go to the gentleman from Virginia, Mr. Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman. Mr. Chairman, I 

would also ask that my opening statement be entered into the 

record at this time. 

Chairman ISSA. Without objection, all members’ opening statements will be placed in the record, and we will hold the record 

open until the end of the day for any additional statements. 

Mr. CONNOLLY. I thank the Chair. Just two other items. I have 

a statement from the Virginia Forest Products Industry that is 

signed by about two dozen private sector companies in the forest 

products business, the lumber business, hardwood flooring business, and the forestry business, who in fact favor the Lacey Act and 

want to see its full implementation, because, from their point of 

view, actually, it protects them, legitimate industry, from illegal 

logging and the marketing of products from illegal logging. So I 

would at least like to get from the Commonwealth of Virginia’s perspective, Virginia forest industry’s perspective in favor of the Lacey 

Act regulation, their letter entered into the record. 

Chairman ISSA. Without objection, that will be placed in the 

record. 

Mr. CONNOLLY. I thank the Chair. Just one other item. 

Chairman ISSA. You know, you are on a roll. You are doing real 

well with these. 

Mr. CONNOLLY. I have a letter addressed to yourself, Mr. Chairman, and the Ranking Member, Mr. Cummings, from 

Transwestern Sustainability Services, and, again, this is a letter by 

a very large company that has done 20 million square feet with 100 

85 

LEED certified buildings, in favor of LEED certification and quite 

explicit in saying that it is not a job killer, just to get the other 

point of view. I would also ask that their letter, addressed to you 

and Mr. Cummings, be entered into the record. 

Chairman ISSA. Without objection, so ordered. 

Mr. CONNOLLY. I thank the Chair. 

Chairman ISSA. Would the gentleman agree that regardless of 

whether it is a job killer or not, LEED is one of multiple standards 

for greening up buildings? 

Mr. CONNOLLY. I agree with you, Mr. Chairman. Well, let me 

first say one of the problems I think we have, this is our 28th hearing on the subject of regulation and, frankly, as the Chairman 

knows, I wish we could have neutrally worded titles for hearing, 

because I actually think there is a lot of bipartisan concern about 

regulations that go too far; regulations with the best of intention 

that have bad results; regulations that do make it hard to do business. 

And remember it is not just business. I ran a local government, 

one of the largest local governments in America, and we were subject to federal regulation or State regulation that sometimes made 

no sense or just had us do incredible expenditures for very little 

gain, and you think is there any common sense left on the planet? 

Everybody with the best of intention, but gone amok. So there is 

a lot of sympathy for that point of view. But there won’t be sympathy for the point of view that all regulation is bad; all regulation 

is a job killer. And that is the solution if we are worried about high 

unemployment. 

You heard the passionate statement of our Ranking Member, Mr. 

Cummings, about what it is like in an inner city in America to look 

at the results of lead poisoning. And if you are a parent who has 

a kid who has been a victim of lead poisoning, you want more regulation, not less. 

Mr. Tierney, from Massachusetts, was talking about this dialectic. There is a famous town in Massachusetts that was devastated 

because of illegal chemical toxic dumping. Many, many cancer 

deaths; children. So they wanted protection. 

I don’t think there is an easy way out of looking at the financial 

meltdown on Wall Street, though I understand it is arguable, 

where a reasonable person would not conclude that the problem 

wasn’t over-regulation of the financial industry. No less a figure 

than Mr. Greenspan testified subsequently to that and admitted he 

had made a mistake. 

So I don’t think it is an either/or proposition. 

But let me talk about LEED because, Mr. Russell, you said it 

was a job killer and, Mr. Rutenberg, it is your business. And I have 

worked with the home builders in my community, and developers, 

and I agree with the Chairman that sometimes LEED is so rigid 

that it actually helps defeat the goal we are trying to achieve. 

Having said that, does not LEED also sometimes create jobs and 

give somebody a competitive advantage by marketing a product, 

saying I am LEED certified? 

Mr. Rutenberg? 

Mr. RUTENBERG. Well, LEED certainly helped create an industry 

and advance the cause of energy conservation, which I have personVerDate Aug 31 2005 09:03 Aug 14, 2012 Jkt 000000 PO 00000 Frm 00089 Fmt 6633 Sfmt 6633 C:\DOCS\75465.TXT APRIL
86 

ally been working on since the 1970s, and I applaud that. However, 

there are other standards that have become involved and should 

see the light of day. The Home Builders spent several million dollars developing a green building standard before we spun it off. I 

would like to point out it is the only standard that was an ANSI 

standard by the national standard industry, and LEED participated in our consensus for it, and it is also going through other 

evolutions. And I think we did it because we thought we could deliver a better product for less money to the consumer, and I hope 

they get the light. 

If I could go for just about another 15 seconds on the lead paint. 

Before I get into trouble, I want to point out that the exemption 

that we asked for until we had the right kits was for homes that 

had no children and could not have a pregnant woman. It was very 

specific to where it would be safe. We continue to be on record in 

favor of lead paint abatement. 

Mr. CONNOLLY. Mr. Chairman, I would ask that Mr. Russell be 

allowed to answer. 

Mr. RUSSELL. Thank you, Congressman. 

Chairman ISSA. I would ask unanimous consent the gentleman 

have an additional minute. 

Mr. CONNOLLY. I thank the Chair. 

Chairman ISSA. Without objection, so ordered. 

Mr. RUSSELL. Thank you, Mr. Chairman, Mr. Connolly. 

To be very clear, the testimony we presented to the Committee 

is not intended to be interpreted that any particular system is a 

job killer, LEED included. The testimony is intended to illustrate 

that the Federal Government’s selection of one, and only one from 

among many, including many that have been demonstrated by the 

Government’s own assessment to perform better, perhaps also including my colleague to the left’s system, would be an opportunity 

for the Government to become more efficient and save money, and 

toward outcomes that we all share, which are increased energy efficiency and higher building performance. Thank you. 

Mr. CONNOLLY. Mr. Chairman, there is just 15 or 20 seconds. I 

think Mr. Williams also, were you seeing to, all right. 

I thank the Chair for the extra time. 

Chairman ISSA. I thank the gentleman. 

I would now ask unanimous consent that the following statement 

from page 23 of our report be placed in the record. The settlement 

agreement required EPA to propose and finalize a new rule to remove the opt-out provision. On June 7th, 2012, bipartisan legislation, the LEED Exposure Reduction Act of 2012, was introduced to 

restore the opt-out provision pursuant to the settlement. Just in 

case anyone wanted to make sure they understood that lead paint 

is not an issue that is partisan. 

With that, we go to the gentleman from Pennsylvania, Mr. Kelly. 

Mr. KELLY. I thank the Chairman. Before I start, I would like 

to enter into the record a letter from the Associated Builders and 

Contractors. 

Chairman ISSA. Without objection, so ordered. 

Mr. KELLY. And it says at the start, this is the first paragraph: 

‘‘On behalf of the Associated Builders and Contractors, a national 

association with 74 chapters representing 22,000 merit shop conVerDate Aug 31 2005 09:03 Aug 14, 2012 Jkt 000000 PO 00000 Frm 00090 Fmt 6633 Sfmt 6633 C:\DOCS\75465.TXT APRIL
87 

struction and construction-related firms.’’ I just want to make sure 

we understand that because, as I heard earlier, we only have six 

people here and we could probably stay here for weeks and we 

could viably bring in not just six of you, but 6,000 of you that 

would have the same concerns, and I think that is what probably 

bothers me more than anything else. 

This hearing is not zip code specific, this hearing is not industry 

specific, and this hearing is certainly not politically specific. When 

I am walking in the Third District of western Pennsylvania, to a 

person, everybody I talk to talks about the crushing boot the government puts on the throat of small business people, and if they 

would just let off a little bit maybe we could grow jobs; maybe we 

could go ahead and expand an economy that is only being held 

back by us internally. There is no place else in the world like this. 

My goodness, we are awash in natural resources that are a gift 

from God, and we can’t even get to them because of over-regulation. 

So when I hear this, Mr. Hamby, especially, you remind me of 

so many people that I talk to in northwest Pennsylvania, people 

that have small banks. You and I talked just briefly. Tell me about 

the qualified borrower definition, and is the definition, this is 

CFPB, right? And how many pages is it, by the way, the definition? 

Mr. HAMBY. I will be honest, I really don’t know yet. 

Mr. KELLY. It is 1,001 pages, the definition of who a qualified 

buyer is. Now, I am going to assume that in Ada, Oklahoma, where 

you grew up, that you probably walked those same streets, go to 

the same churches, go to the same restaurants, the same schools, 

and so those people who come in and sit across the desk from you 

are probably people you know and know whether they are qualified 

or not qualified. 

Mr. HAMBY. Absolutely. 

Mr. KELLY. So does somebody from Washington have to give you 

1,001 pages to define what a qualified borrower is? 

Mr. HAMBY. No, sir. 

Mr. KELLY. Does it make it a little bit tough to make your decision? 

Mr. HAMBY. Yes, sir, it does. Our lending standards are the same 

as they have been for the last 30 years. All we have to do now is 

do a lot more documentation, a lot of papering on the same thing 

that we—— 

Mr. KELLY. Okay, so when we talk about a lot more, a lot more, 

a lot more, what does it actually mean? It is a dollars and cents 

thing, is it not? 

Mr. HAMBY. It is a dollars and cents thing. As I reported earlier, 

it is a dollars and cents thing. And more than that, it is a time 

thing for my staff; it takes their eye off the ball, which is taking 

care of the customer. Instead, we are focused on complying with all 

the regulations and all the hoops that we have to go through, instead of getting out there and telling people, hey, it is time to refinance your home or how can I help you out? 

Mr. KELLY. And a lot of these regs are not based on solid evidence, but they are on conjecture and speculation. They are lacking 

foundation in any type of sound scientific analysis, is that not true? 

Mr. HAMBY. I believe you are correct, sir. 

88 

Mr. KELLY. Okay. I think the confusing thing of this is, when we 

talk about—and Mr. Tierney said the problem is there is a lack of 

demand. There is a lack of demand because people aren’t certain 

of what is happening to them. Every one of you represent an industry or a business that cannot move forward because you just don’t 

know what is going to happen to you next. It holds you back. I 

know from being in my business, I am in the automobile business, 

when I am not here, and thank God I am not here all the time, 

I get back home to northwest Pennsylvania and I listen to people. 

When I am on the lot or I am on the showroom, there are people 

that I sit across from that want to buy a car or a truck, but they 

can’t do it. And you know why they can’t? Because they are not 

sure that they are going to have a job or they are going to have 

a job that is going to pay at the rate that they need to meet a payment for the next 48 or 60 months. 

And I think, Mr. Chairman, thanks for having this hearing because it does come down to how difficult it is. The title of this is 

Job Creators Still Buried by Red Tape. Is there anybody sitting at 

this table that would say to me, you know what, we don’t have 

enough regulations? We just need a few more. Anybody? Anybody 

who would sit there and say, you know, some of the regulations we 

have right now, could you not produce a list of regulations that absolutely have no intrinsic value to the ultimate user or the consumer? And every one of these regulations adds cost to your final 

product. I don’t care if you are lending money, selling a car, building a car, building a house, working in the chemical business; 

whatever it is. This all drives your cost of your final product up, 

does it not? 

So when there is a price increase, unless I have been missing 

things for the last forty-some years that I have been on the lot, 

every time the price of something raises, goes up, what does it 

eliminate? The lowest person on the totem pole; it takes them out 

of the market. 

So if we are really concerned about creating jobs, wouldn’t it be 

great to allow you to actually move around in a free market and 

be able to run your business with some type of certainty? Anybody 

disagree with that? I mean, I really want to hear from you because 

I have heard so much about how these regulations don’t hurt and 

don’t affect cost. Nobody. 

Mr. WILLIAMS. I would say that in the areas of business in which 

we are regulated we can move freely within our marketplace. It 

may be an exception, but we can move freely within the marketplace, and the consumer demand for what we are doing is such 

that it enables us to do that, albeit it one could reasonably argue 

we are within a niche, but ultimately we are still a small business, 

central Pennsylvania, and we are being successful. 

Mr. KELLY. And I understand. I am in a small business in western Pennsylvania. 

Chairman ISSA. I would ask unanimous consent the gentleman 

have one additional minute. Without objection, so ordered. 

Mr. KELLY. I would appreciate that. 

Yes, sir. 

Mr. RUTENBERG. When you asked about regulations, one of the 

things I would like to add is that we are now starting to see a lot 

89 

of guidance coming out from different agencies, which does not necessarily have the same scrutiny as a regulation before it is issued, 

and that is becoming a concern. 

Mr. KELLY. Okay. Well, let me just say this to you. The CFPB, 

the people who are coming up with the qualified borrower definition, I wonder if there is any chance of getting those directives or 

those guidance to the Department of Energy. Probably would have 

helped them in making some of the decisions of who they lent 

money to that has ultimately cost the United States taxpayers a 

ton of money. 

Just as a final, I do appreciate you being here, but you know 

what we need to do? We need to do this. I don’t care how many 

of these hearings we have. We need to do it every day in every 

way, in every town that we represent because you know what? The 

message isn’t getting back here. It is certainly not getting to this 

Administration that continues to layer you with more regulations 

that ultimately drive the cost of whatever it is that you do higher 

and higher and higher. It eliminates the business, it decreases demand, and when you decrease demand you are also eliminating 

jobs. And if this is about creating jobs, then, my goodness, we better start looking at where the problem is. I thank you so much. 

Mr. Chairman, I yield back. 

Chairman ISSA. I thank the gentleman. 

We now recognize the gentlelady from the money center banking 

community of America, New York, Mrs. Maloney. 

Mrs. MALONEY. Well, I thank the gentleman for yielding. 

I also thank all the panelists for coming here today to share your 

personal experiences with running your businesses and really participating in the American economy. 

I am so tired of this recession. It has been going on since 2007 and, according to most economists, it has cost this Country $18 trillion in household wealth, well over 7 million jobs, and many economies have not even recovered. 

Yesterday, Bernanke testified that one area that now, after many 

years, is picking up, is housing, and that is good news because Professor Zandi says that housing is 25 percent of our economy, our 

GDP. So without a robust housing market, our economy will remain sluggish. 

Now, many economists say that what caused this was lack of regulation, lack of regulation for new products, lack of regulation for 

subprime loans, and part of the reforms is that a qualified buyer 

has to be someone who can afford the loan. I call that responsible. 

And if we had had that common sense regulation in place prior to 

2007, possibly we would have averted this financial crisis, which 

the Bureau of Labor Statistics says it is the first recession in our 

history that was totally caused by mismanagement of the financial 

system. 

So I would say some regulation that prevents economic 

downturns is well worth the effort to bring into sunshine, bring 

into transparency, at the very least, have the ability to pay for 

whatever it is you are buying. 

During the crisis, the joke in New York was if you can’t afford 

to pay your rent, go out and buy a home. It was that easy. And 

many people are suffering to this day because of it. And I would 

90 

say that this lack of regulation contributed to the economic downturn. So a regulation that has passed out of this Committee that 

says that unemployment has to be below 6 percent before you can 

pass a regulation would nullify all the regulations we have there 

to prevent another financial crisis. It truly would. 

I would like to ask the panelists if you think it is reasonable to 

have some reforms there, such as the QE2 that we had a panel and 

some of your representatives testified before Financial Services 

that they supported these regulations, ability to pay and others, in 

order to prevent another economic downturn. So I would like to ask 

Mr. Rutenberg, do you think that reasonable reforms or regulations 

to prevent another subprime crisis are reasonable for growing jobs 

in the future? Do any of you want to go back to the wild west days 

of any risk you might take, you can take, and you can buy things 

without any intention of ever even paying for it, and it is sold on 

the secondary market that brings tragedy to our liquidity and to 

our capital and our Country? 

Mr. Rutenberg, would you support the rule that we are considering that you literally be able to pay for a house if you are buying 

it? That is one of the reforms. It is literally one of the reforms. You 

would think that is common sense, but some people are opposed to 

ability to pay. So I would like to say if that reform was in place, 

do you think the housing market would be stronger today, possibly 

we would have averted the entire crisis? 

Mr. RUTENBERG. The National Association of Home Builders has 

put out a paper and worked with Congress and the Administration 

and Republican candidates suggesting some modifications to the 

housing finance system, which we believe are important and would 

go a long way to providing more stability and safety to the system. 

So, yes, we do believe there needs to be reforms. We do have questions about whether or not we need a 1,000-page definition of a 

qualified buyer, if that in fact is true, and some of the other things 

that may be proposed. 

So, in general, we do think that it is time to evolve the system 

to make it better. We think that we should be responsible in the 

forms that we have; that we should be responsible in qualifying 

people; that bankers should be doing real banking; and that we 

should be more responsible. 

I think we also want to be careful in what kind of regulations 

that we are opening the door for and make sure that they are reasonable and that they would be effective. 

Mrs. MALONEY. Do you support the qualification that you have 

the ability to pay before you buy a house? 

Mr. RUTENBERG. We believe that and we believe there should be 

a safe harbor and we think that there should be guidelines. I think 

we agree with where you are going; the question is what does it 

look like when we have it and that works. And some things become 

counterproductive. If we go from a 300- to a 500- to an 800-page 

loan package, I don’t think we have done a lot of good. Obviously 

there is a ratio between prices of homes and income, and normally 

we have been about 3.2. Well, in some States we got up to 5.5. 

That is just stupid. And people are doing things. I had somebody 

who said they were flipping condo contracts like they used to do 

NASDAQ stocks. That is inappropriate and that should be stopped. 

91 

Mrs. MALONEY. Well, Mr. Williams, you testified that you created 

94 new jobs. Congratulations. If every small business had done 

what you have done, we wouldn’t have an unemployment problem. 

Since July 20, 2008, an additional 29 at a new startup business. 

Do you believe that complying with regulations has hurt your business or caused your company in any way to lose jobs? 

Mr. WILLIAMS. No, it has not. 

Mrs. MALONEY. Even you won an award, as I understand, an 

EPA award for environmental achievements, and you said your 

company’s work on sustainable environment is good for your customers and good for business. So is it fair to say that your company 

has found that it is good business to be a leader in complying with 

energy and environmental regulations? 

Mr. WILLIAMS. Yes, it is fair to say that. Just a footnote. A very 

well established environmental consulting group, Five Winds International, years ago developed a model that essentially said if regulation is always viewed as cost, it will always be cost. If regulation 

is viewed as opportunity, it can create opportunity and can even 

create competitive advantage. We subscribe to that. It was rather 

startling to us at first to work through that because it didn’t seem 

to make sense to us, but ultimately adopting that model has helped 

us to stay out front and, generally speaking, our consumers are 

asking sometimes more than what the regulations may be. 

Mrs. MALONEY. Well, we have heard that the current Administration has imposed a regulatory tsunami on businesses. Have you 

noticed this regulatory tsunami in the last three years that we 

keep hearing about? Have you witnessed that or has it been a burden to you? 

Mr. WILLIAMS. There are some regulations that we may have gotten splashed by the tsunami, but we have not been overwhelmed 

by it, so in that respect our industry sector may have, as I said, 

only been splashed, and none of which we encountered prevented 

us from moving forward. 

Mrs. MALONEY. Well, your presence here today can help convince, I hope, some of my colleagues that regulation and economic 

prosperity are not mutually exclusive. In fact, they can go hand in 

hand. And I would say that a good road map of how we are going 

to operate would help business, help the overall economy, and any 

regulation that you feel is too onerous or whatever, I think that 

your Congress member, this Committee and others, would like to 

look at it. But we don’t want to go back to days when there was 

no regulation, and I am particularly talking about the housing 

market, which to this day is suffering dramatically and I would say 

is the major challenge that we now have in our economy, is how 

to get housing back on track, creating jobs and moving forward. 

So, Mr. Rutenberg, do you have any ideas of how to get housing 

moving? I think the statement by Chairman Bernanke was encouraging yesterday. It isn’t in response to my question, but he did say 

housing was one of the strongest economic indicators in the last 

economic report. 

Chairman ISSA. And I would ask the gentlelady have an additional 20 seconds, making it an even 10 minutes. Without objection, 

so ordered. 

Mrs. MALONEY. What, 10 minutes? 

92 

Chairman ISSA. Yes, ma’am. 

Mr. RUTENBERG. Housing is now back to about 40 percent of its 

sustainable level of production. I would like to comment that the 

recent three or four year history of performance of the new loans 

has been quite excellent, and even in Fannie and Freddie that is 

true. NAHB continues to try and be part of the process of reforming the regulations and improving them so that both our consumers 

and the financial institutions are in a better position. It is ongoing 

and we look forward to being part of the process. We are getting 

better slowly. 

Mrs. MALONEY. Thank you. 

Chairman ISSA. I thank the gentlelady. 

We now recognize the gentleman from Pennsylvania, Mr. Platts. 

Mr. PLATTS. Thank you, Mr. Chairman. Coming from a House 

classified briefing, so I apologize for the late arrival. I want to 

thank the witnesses here and appreciate their written testimony 

and yield the balance of my time to you, Mr. Chairman. 

Chairman ISSA. I thank the gentleman for yielding. 

Mr. Williams, since you only got splashed by the tsunami, I 

thought I would ask a couple more questions. And I appreciate 

your being a good witness here today. I think we all agree that 

within LEED certification standards and the efforts they are making lies something that everybody is trying to do. I happen to come 

from California, where a lot of what you choose to do under LEED 

we led as a State. And I am concerned about the standardization 

or the lack of standardization that exists within the industry 

where, depending upon which standard you go to, you might have 

different choices; and if one organization, like GSA, mandates that, 

then by definition they are picking a winner. 

Would you agree that in the argument over Betamax versus 

Sony, so to speak, that the government should try to encourage and 

allow as many standards as they can so as not to determine the 

outcome of one versus the other? In other words, promote competition rather than mandating one solution? 

Mr. WILLIAMS. I had the opportunity to play back or listen to the 

May hearing on that subject, and I think one of the things I heard 

there was performance standard. There are enough differences in 

several of the green building standards that adoption or picking 

and choosing without that core base of performance standard I 

think could lead the GSA down a very windy road. 

Chairman ISSA. But you mentioned that you support tenants 

paying for their water and electricity so that there is a causal relationship. Isn’t it true that no matter what the GSA does in the way 

of defining standards, if the tenant is not responsible, they can 

abuse those standards; they can run their air conditioning at a 

lower temperature, they can do it 24 hours a day, they can leave 

the lights on, and so on? 

Mr. WILLIAMS. Absolutely. And I think virtually every green 

building standard would say no to that, because that is not the core 

premise or the reason they exist. 

Chairman ISSA. Now I am going to ask you a little bit maybe 

more business personal questions. You have a line of mats in your 

company, if I read it right. 

Mr. WILLIAMS. Yes. 

93 

Chairman ISSA. Where do you source them from? 

Mr. WILLIAMS. There are two places. One line of mats has been 

made and is made here in the United States and has been made 

here since 1968. We also have a line that we source from our factory in China, and the core reason for that factory’s existence in 

China is to have manufacturing base in China, not to take jobs out. 

The product that you reference is a product that we are physically 

unable to make that here in the United States. 

Chairman ISSA. And why is that? 

Mr. WILLIAMS. That is because of the configuration of the product and access to the particular materials. It is about $2 million per 

year of a $110 million business. It also provides the foundation for 

our startup in China. Our belief is that—— 

Chairman ISSA. And I don’t want to cut you off. I want to give 

you all the time in the world; we are sort of at the end. But you 

made a decision because it was impossible to make something in 

the U.S. that led to $2 million worth of goods being produced in 

China. Can you just elaborate on that? 

Mr. WILLIAMS. I was beginning to do that, so hopefully I will 

make sense. I know you will understand it; the question is if I 

make—— 

Chairman ISSA. I am an old manufacturer, so I always want to 

know why something is made one place versus another. 

Mr. WILLIAMS. Okay, okay. The product is made there. It formed 

for us the basis of being able to set up a business in mainland 

China for the purpose of selling our products into mainland China. 

Many years ago our founder returned from Saudi Arabia and spoke 

and said that growing our business in the Middle East was very 

important to him because he felt it was his patriotic duty to bring 

some of the oil dollars back to the United States. And he stood 

there with a great wide grin on his face, just as you grinned at 

it—— 

Chairman ISSA. We love exporting, don’t we? 

Mr. WILLIAMS. Well, yes. Big time. Big time. 

Chairman ISSA. When we can. 

Mr. WILLIAMS. And the basis of our factory in China is to reach 

that marketplace with our products and manufacturing in China, 

and to, to some degree, upon our founder’s smiling comment, is to 

return dollars to the United States; and that niche of our product 

line being made in China is the foundation of starting that business in China, and that is just bringing those products over. 

Chairman ISSA. But you didn’t say that it was cheaper to make 

in China; you said you couldn’t make it in the U.S., and I just wondered is it that you couldn’t make it cost-effectively in order to hit 

a price point in a global market, you chose to leverage some of your 

technology in China? 

Mr. WILLIAMS. It is technology that was available to us in China, 

not here. We could replicate it. The price point on the product, candidly, I don’t want to say there is no price point; it is the only product of its type, so the price point was not the issue. That was our 

decision around a core of being able to begin manufacturing in 

China. 

Chairman ISSA. Well, I will just make a broad question for all 

of you. If in fact America has extremely low-cost energy, if America 

94 

has a well educated workforce available to you, if America has a 

good transportation infrastructure system, and if America has a 

tax policy that is competitive with any other country in the world, 

and a regulatory system that is as streamlined to protect, while at 

the same time not interfering, then can your companies, your industries, maybe I will leave the banker out for a moment, compete? 

Now, last question: Do you believe we have all of those elements 

today, or can we and should we do better? 

Mr. YAROSSI. We absolutely should do better. We could do a lot 

better in how we could make a lot of those things work. 

Chairman ISSA. Mr. Hamby, if I add an access to affordable capital, would you also weigh in? 

Mr. HAMBY. Sure. It would be a lot more affordable to help them 

with and it would be more abundant. 

Chairman ISSA. Mr. Pirkle? 

Mr. PIRKLE. Currently, I think we import about 60 percent of our 

fertilizer needs for the domestic agricultural market, so to balance 

that would be better for American jobs. 

Chairman ISSA. And low-cost fossil fuels such as natural gas is 

a major element to your being able to make it domestically. 

Mr. PIRKLE. That is correct. 

Chairman ISSA. Mr. Williams? 

Mr. WILLIAMS. I think we can do better. Absolutely convinced we 

can do better. And earlier, if I may, to your point on the trillion, 

I do think that is an area where Eisenhower’s quote is so pertinent, 

that we have done so much to squander things for future generations. We talk about sustainability in the environment. We need a 

sustainable economy and we need a sustainable America, and doing 

better is essential to that. 

Chairman ISSA. I believe Eisenhower was the last president to 

balance the budget in all his years. 

Mr. Russell? 

Mr. RUSSELL. Mr. Chairman, thank you. We can do better. We 

look forward to working with the Committee in making that a reality. 

Chairman ISSA. Thank you. 

Mr. Rutenberg, you have the last word. 

Mr. RUTENBERG. Well, my wife is an educator and I am all for 

improving education, and I look forward to infrastructure. I think 

we can do better. I think we have great promise and I look forward 

to the future. 

Chairman ISSA. Thank you. 

Mr. Platts, thank you for the use of your time. 

With that, I want to thank the panel for being patient. I will note 

that finishing at the stroke of noon is practically a record for a 

panel this size. 

We stand adjourned. 

[Whereupon, at 11:57 a.m., the committee was adjourned.] 

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