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67–721 PDF 2011

ASSESSING THE IMPACT OF GREENHOUSE GAS

REGULATIONS ON SMALL BUSINESS

HEARING

BEFORE THE

SUBCOMMITTEE ON REGULATORY AFFAIRS,

STIMULUS OVERSIGHT AND GOVERNMENT

SPENDING

OF THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

APRIL 6, 2011

Serial No. 112–24

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

SUBCOMMITTEE ON REGULATORY AFFAIRS, STIMULUS OVERSIGHT AND GOVERNMENT

SPENDING

JIM JORDAN, Ohio, Chairman

ANN MARIE BUERKLE, New York, Vice

Chairwoman

CONNIE MACK, Florida

RAU ́ L R. LABRADOR, Idaho

SCOTT DESJARLAIS, Tennessee

FRANK C. GUINTA, New Hampshire

MIKE KELLY, Pennsylvania

DENNIS J. KUCINICH, Ohio, Ranking

Minority Member

JIM COOPER, Tennessee

JACKIE SPEIER, California

BRUCE L. BRALEY, Iowa

(III)

C O N T E N T S

Page

Hearing held on April 6, 2011 ................................................................................ 1

Statement of:

Rajkovacz, Joe, director of regulatory affairs, owner-operator, Independent Drivers Association; David Kreutzer, Ph.D., research fellow in energy economics and climate change, the Heritage Foundation; David

D. Doniger, policy director, Climate Center, Natural Resources Defense

Council; and Keith Holman, deputy executive director, National Lime

Association ..................................................................................................... 8

Doniger, David D. ...................................................................................... 24

Holman, Keith ........................................................................................... 40

Kreutzer, David, Ph.D. .............................................................................. 16

Rajkovacz, Joe ........................................................................................... 8

Rodgers, Claudia, Deputy Chief Counsel, Office of Advocacy, U.S. Small

Business Administration; and Gina McCarthy, Assistant Administrator

for the Office of Air and Radiation, U.S. Environmental Protection

Agency ............................................................................................................ 75

McCarthy, Gina ......................................................................................... 129

Rodgers, Claudia ....................................................................................... 75

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

Doniger, David D., policy director, Climate Center, Natural Resources

Defense Council, prepared statement of ..................................................... 26

Holman, Keith, deputy executive director, National Lime Association,

prepared statement of ................................................................................... 42

Jordan, Hon. Jim, a Representative in Congress from the State of Ohio,

prepared statement of ................................................................................... 4

Kreutzer, David, Ph.D., research fellow in energy economics and climate

change, the Heritage Foundation, prepared statement of ......................... 18

McCarthy, Gina, Assistant Administrator for the Office of Air and Radiation, U.S. Environmental Protection Agency, prepared statement of ..... 130

Rajkovacz, Joe, director of regulatory affairs, owner-operator, Independent Drivers Association, prepared statement of ......................................... 11

Rodgers, Claudia, Deputy Chief Counsel, Office of Advocacy, U.S. Small

Business Administration, prepared statement of ....................................... 77

Speier, Hon. Jackie, a Representative in Congress from the State of

California, letter dated April 6, 2011 .......................................................... 58

(1)

ASSESSING THE IMPACT OF GREENHOUSE

GAS REGULATIONS ON SMALL BUSINESS

WEDNESDAY, APRIL 6, 2011

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON REGULATORY AFFAIRS, STIMULUS

OVERSIGHT AND GOVERNMENT SPENDING, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, DC.

The subcommittee met, pursuant to notice, at 1:39 p.m., in room

2154, Rayburn House Office Building, Hon. Jim Jordan (chairman

of the subcommittee) presiding.

Present: Representatives Jordan, Buerkle, DesJarlais, Kucinich,

and Speier.

Also present: Representative Issa.

Staff present: Ali Ahmad, deputy press secretary; Michael R.

Bebeau, assistant clerk; Molly Boyl, parliamentarian; Lawrence J.

Brady, staff director; Benjamin Stroud Cole, policy advisor and investigative analyst; Adam P. Fromm, director of Member liaison

and floor operations; Ryan M. Hambleton and Kristin L. Nelson,

professional staff members; Justin LoFranco, press assistant; Mark

D. Marin, senior professional staff member; Kristina M. Moore,

senior counsel; Laura L. Rush, deputy chief clerk; Walker Hanson,

legal intern; Noelle Turbitt, intern; Kevin Corbin, minority staff assistant; Ashley Etienne, minority director of communications; Carla

Hultberg, minority chief clerk; Mark Stephenson, minority senior

policy advisor/legislative director; and Alex Wolf, minority professional staff member.

Mr. JORDAN. The hearing on Assessing the Impact of EPA Greenhouse Gas Regulations on Small Business will come to order. And

I apologize to our witnesses; I was in the Capitol in an important

meeting. There are lots of important meetings going on this week.

We want to get started because we are going to have to recess for

a Republican conference, so let’s get rolling.

Today’s hearing marks the third occasion for this committee to

consider the regulatory burdens facing America’s job creators. Thus

far we have learned a great deal from the private sector employers

in the manufacturing and construction industries about the harm

that two Federal regulatory agencies in particular are doing to

their businesses. Together, the EPA and the Occupational Safety

and Health Administration, with their joint army of more than

20,000 regulators, receive a combined $11 billion in taxpayer dollars to fulfill their statutory responsibility, but it has never been

the goal of Federal regulation to stifle economic growth. At least it

is not supposed to be.

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As was detailed in a report to released by Chairman Issa in February, hundreds of job creators have identified scores of regulations

from these two agencies that hinder their ability to expand and

offer good paying jobs to millions of out-of-work Americans. Today

we will focus our oversight on the Environmental Protection Agency and specifically development, implementation, and the effect of

EPA’s greenhouse gas regulations on small businesses.

Under the current regime, the EPA has emerged as the chief enforcer of the Administration’s agenda for environmental law. On

both sides of the aisle, Republicans and Democrats recognize the

‘‘glorious mess’’ of EPA’s rulemaking. Whether by hamstringing recovery efforts in the wake of the Gulf oil spill or unilaterally redefining the Agency’s authority under the Clean Air Act, the EPA has

nurtured the distinct impression among American job creators that

this Administration is out of touch with the real world harm that

the agenda causes.

Even worse, the committee has reason to believe that in addition

to its bureaucratic disregard for struggling industries that were

hardest hit by economic downturn, the EPA appears to have broken the law in a rush to issue sweeping new rules for greenhouse

gas emissions. Regulated industries, understandably, feel left out of

the process and confined to an environment of job killing uncertainty while EPA crafts a whole new regulatory superstructure

that touches every area of our national life, all of this despite the

presence of numerous promises before and after his election that

regulations in this Administration would be crafted with careful

consideration of their cumulative effect on small business.

The growth and sustainability of small business are critical to

the success of the American economy, which is why this committee

will continue to be in place, a place where men and women, entrepreneurs and investors can come for a fair hearing about their concerns. The American people deserve a responsive government that

listens to them and works for them. Small business specifically

warrant out attentive ear, as they employ more than half of all private sector workers and represent more than 99 percent of all employer firms in the United States.

Yet, these businesses carry an increasingly disproportionate

share of the American regulatory burden. One recent study revealed that the annual regulatory cost to small business is nearly

$3,000 more per employee than the cost to larger firms. The same

study found that compliance with environmental regulations in

particular cost small business and small business owners four

times more than firms with more than 500 employees.

It is disconcerting, therefore, to learn how far the EPA has fallen

short of the present stated goals. By adding to this already intense

regulatory burden, the Administration has executed a strategy that

destroys jobs, rather than creates them. With prolonged unemployment that we have not seen in decades, the folly of this agenda is

not difficult to see.

Today we will hear from those affected by EPA’s regulation of

greenhouse gases and we will hear from the EPA and Small Business Administration. I want to thank these witnesses for their

presence today.

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I now turn to my friend and the ranking member, the distinguished gentleman from Ohio, Mr. Kucinich.

[The prepared statement of Hon. Jim Jordan follows:]

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Mr. KUCINICH. Thank you very much, Mr. Chairman. I just

wanted you and the witnesses to know I just have to step outside

briefly at 2 for a meeting that I had scheduled before this committee hearing was scheduled, but I am pleased to be here with you

and with our chairman and the other members of the committee.

Thank you for holding this important hearing.

Today we are here to discuss the impact of greenhouse gas regulations on small businesses. America’s small businesses are the

lifeblood of this country’s economy. Competition, innovation, and

the entrepreneurial spirit have driven Americans to prosperity, and

it is our job in Congress to ensure that we facilitate and promote

an environment of economic opportunity. It is also our job to protect the well being of American citizens, with the bottom line of

providing the highest quality of life reach in every person.

Based on actual results and future projections, it is clear that the

Clean Air Act strikes a balance between economic growth and

keeping each and every one of us healthy. By 2020, for every taxpayer dollar invested in the Clean Air Act, there will be an estimated $30 in return in benefits. In the year 2010 alone, the Clean

Air Act prevented over 160,000 deaths, over 3 million lost school

days, and 13 million days of lost work. These numbers are illustrative of the benefits to both businesses and public health facilitated by the Clean Air Act.

The regulation of greenhouse gases under the Clean Air Act is

imperative to protecting public health and welfare. The threat

posed by climate change is based on peer-reviewed, accurate, and

concrete science. The threat is real, and preventative steps are necessary. The EPA’s regulation of greenhouse gases under the Clean

Air Act is a measured common sense approach to mitigating climate change that protects not only public health and welfare, but

protects businesses as well.

Opponents of greenhouse gas regulation claim that small entities

will be overly burdened by costly and unattainable emission standards. However, the EPA’s implementation of the tailoring rule is a

small business conscious method of protecting public health and

this country’s employers and employees. The tailoring rule, by setting a greenhouse gas emission threshold, exempts 95 percent of all

stationary source of greenhouse gas emissions. Essentially, the tailoring rule lifts a regulatory burden off of small businesses.

In written testimony provided for today’s hearing, the Small

Business Majority, a representative of U.S. businesses, states that,

‘‘Some will claim that a variety of small businesses, everything

from bookstores to diners and plumbers, would be impacted by

greenhouse gas standards. This simply isn’t the case.’’

Further, as described in the Small Business Majority’s testimony,

a significant number of small business owners welcome measures

to reduce environmental pollution. Now, this sentiment simply cannot be ignored. As I have said at this subcommittee’s past two

meetings, we can’t have a productive discussion about the impact

of regulations without considering both cost and benefits. For example, when we talk about the new tailpipe emission standards,

we cannot simply discuss a potential increase in the sticker price

of a vehicle. The proposed standards for heavy- and medium-duty

trucks, despite a marginal increase in sticker price, are projected

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to save over $74,000 over the life of the truck and save over 500

million barrels of oil.

You want to talk economic impact? Multiply that roughly with the price of oil bouncing back and forth over $100, and you could

have savings that you could measure, do the math, $50 billion.

Multiply this times all the trucks on the road and the reduced fuel

consumption, and greenhouse gas pollutant emissions can help

achieve energy independence while improving our public health.

Mr. Chairman, I look forward to having a well rounded discussion about greenhouse gas emission standards, their costs and their

benefits, with today’s witnesses. I yield back.

Mr. JORDAN. I thank the gentleman.

Members have 7 days to submit opening statements. Oh, no, no,

no, we have an opening statement. I forgot we have the chairman

here. The chairman of the full committee the gentleman from California is recognized.

Mr. ISSA. Thank you very much, Mr. Chairman, and I will be

brief.

The ranking member wisely said that cost and benefit need to be

evaluated, but as we will hear today, and this committee has found

in its studies, cost and benefit are not part of the EPA’s mandate

or consideration. If they were, many of the regulations that they

have created would not have been created. Ultimately, they simply

say we are only looking at the environment, we are not looking at

the cost. If cost effectiveness, least cost to the system, greatest pollution reduction at the least price were part of the mandate, we

would all applaud it.

In addition, the EPA has no limits. This committee has discovered that in fact a natural occurring gas that will continue to be

produced in huge amounts in other countries is in fact being regulated. Any coal not consumed in this country will be shipped to another country. The most high-polluting coal in the world is burned

in China. These and other realities cause us to, A, have more of

this gas than we would otherwise have if our goal really was to reduce the gas on a global basis, but, B, and most importantly, when

you look at farmers in Iowa who find themselves being fined because dust from corn husks get in the air on their farm, and other

kinds of nonsensical things not intended in the EPA’s original mandate regulations continue to be produced, you have to wonder why

didn’t Congress set limits.

Last, but not least, this committee has repeatedly seen and now

becomes convinced that the EPA and other environmental organizations are in fact inviting litigation, settling, and using that litigation in order to justify new regulations. This practice of being sued,

settling, and then in fact producing new rules is an area that clearly has to stop. Congress exempts itself from civil lawsuits over its

policies for a reason. The EPA, on the other hand, and other organizations seem to welcome those because they lead to the same end

that they want, but make it faster.

Last, Mr. Chairman, this committee is more and more, through

that AmericanJobCreators.com awareness program, we are finding

that rules that have not been made, but used under the form of

guidance and guidelines and so on, are basically threatened as

rules, so eventually they become rules after, in fact, compliance is

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reached by a long threat. These and other impediments to job creation are something this committee is dedicated to. Of course, on

both sides of the aisle, we want clean air and clean water, but we

also want the funds created by a successful economy that pay for

that clean air and clean water.

Last weekend I was on a bipartisan CODEL to Egypt. The Nile

is very pretty, but there is not enough money to deliver the kind

of health standards in Egypt that we have here today. That is a

goal that America has to be cognizant of. If we do not have a successful economy, there will not be money for the regulators to have

the dream they now mandate without a clear course toward it.

With that, Mr. Chairman, I thank you for this important hearing

and yield back.

Mr. JORDAN. I thank the gentleman.

We want to welcome our first panel of witnesses. We have, first,

Dr. David Kreutzer, a research fellow in energy economics and climate change at the Heritage Foundation. In his position, he researches how energy and climate change legislation will affect economic activity in the national, local, and at the industry level.

We have Mr. Joe Rajkovacz, the director of regulatory affairs at

the Owner-Operator Independent Drivers Association, and has

been involved in the trucking industry over 30 years as both an

employee driver and owner and operator.

We have Mr. David Doniger. He is the policy director of the Climate Center at the Natural Resources Defense Council. We welcome you to the committee.

And Mr. Keith Holman is deputy executive director at the National Lime Association and represented small businesses on environmental regulatory issues for many years.

It’s pursuant to the rules of the committee, all witnesses are

sworn in, so if you would just stand and raise your right hands.

[Witnesses sworn.]

Mr. JORDAN. Let the record show that each of the four witnesses

answered in the affirmative.

We are going to try to limit everyone’s testimony to 5 minutes.

We do have a Republican conference that starts in 9 minutes, but

they never start on time, so we are going to try to get through all

five of you, and then we will probably recess and then try to come

back for questions. And I apologize, but we want to at least get

your testimony. So let’s get started, and we are going to go right

down the line. Mr. Rajkovacz.

STATEMENTS OF JOE RAJKOVACZ, DIRECTOR OF REGULATORY AFFAIRS, OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION; DAVID KREUTZER, PH.D., RESEARCH

FELLOW IN ENERGY ECONOMICS AND CLIMATE CHANGE,

THE HERITAGE FOUNDATION; DAVID D. DONIGER, POLICY

DIRECTOR, CLIMATE CENTER, NATURAL RESOURCES DEFENSE COUNCIL; AND KEITH HOLMAN, DEPUTY EXECUTIVE

DIRECTOR, NATIONAL LIME ASSOCIATION

STATEMENT OF JOE RAJKOVACZ

Mr. RAJKOVACZ. Chairman Jordan, Ranking Member Kucinich,

good afternoon and thank you for allowing me to testify on behalf

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of small-business truckers concerning EPA’s efforts to regulate

greenhouse gas emissions.

OOIDA represents the interest of small business trucking professionals and professional drivers. We currently have more than

153,000 members collectively who own and operate approximately

200,000 heavy-duty trucks nationwide. Any regulation adopted affecting the trucking industry has a dramatic effect on small-business truckers.

The main issue as we see it is all about process: how regulations

are adopted; whether the process is open, transparent, includes all

of the stakeholders; and if the justifications have properly taken

into account all the variables necessary to avoid a one-size-fits-all

regulatory system that may disproportionately benefit some stakeholders at the expense of others. In this context, EPA’s proposed

GHG regulations for new heavy-duty trucks can be viewed as having thrown small business concerns under the bus.

Small-business truckers cannot be portrayed as unconcerned

about air quality and fuel mileage improvement. Between EPA’s

stepped up emission standards on diesel engines beginning in 2004

and continuing through 2007 and 2010 model years, today’s diesel

engines are more than 90 percent cleaner than just a decade ago.

On top of that, EPA mandates truckers must use ultra-low sulfur

diesel, and in California specialty diesel blends. All of this has

come with a significant price increase on new trucks and at the

fuel pump.

Additionally, since small-business truckers operate in a hypercompetitive marketplace, managing their No. 1 expense, fuel, is imperative for their survival. Those who don’t are quickly culled from

the market, as evident by the recent record bankruptcies in the

trucking industry.

In spite of all the success in reducing emissions, government

agencies still want to regulate further, at a time when small-business truckers are still trying to collect their breath after the worst

economic contraction since the Great Depression.

When EPA embarked on this regulatory process, the White

House instructed the Agency to work with all stakeholders, with

specific direction to partner with the California Air Resources

Board in crafting GHG rules. I suppose this was because many

think CARB is an environmental trailblazer. However, many of us

in the small business community recognize CARB’s record as one

that does not account for the concerns of small businesses.

Indeed, CARB’s history of engagement with small business can

be viewed as nothing more than checking off the box. Their supposed leadership on regulating trucking GHG emissions has not

been without significant controversy within the trucking community because they have resulted in high cost limited benefits to all

but the largest trucking fleets. Yet, they are driving EPA’s regulatory process on GHG emissions regulation of trucks.

From the Hien Tran affair to Dr. Enstrom’s dismissal at UCLA

for questioning CARB’s PM mortality studies, CARB cutting by

half the original diesel emissions mortality estimates, to the admission I recently received from CARB which shows air regulating

transportation refrigeration units on trailers without any studies or

scientific foundation, their actions are leaving the small business

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community breathlessly questioning the agency’s commitment to

accuracy and wondering about their disproportionate influence on

EPA’s rulemaking, especially when EPA is ignoring our small business concerns.

Based on the attention small businesses have received as job creators, the small-business trucking community had hoped for more

from EPA. However, we have only seen more of the same: shut out,

ignored, and likely forced to live with bad public policy. Owner-operators and small-business truckers operate widely diverse trucking operations. Categorizing all trucking into a one-size-fits-all regulatory regimen will likely lead to those same entities keeping

their older equipment longer, reduce new truck sales, and fail to

fully realize the stated goals of regulating GHG.

Owner-operators and small-business truckers should not have

rules crafted that needlessly drive up their operational costs simply

because their business model has been ignored by regulatory agencies when promulgating rules.

I thank you again for this opportunity and I look forward to answering any questions.

[The prepared statement of Mr. Rajkovacz follows:]

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Mr. JORDAN. We thank you.

Doctor.

STATEMENT OF DAVID KREUTZER, PH.D.

Mr. KREUTZER. My name is David Kreutzer. I am research fellow

in energy economics and climate change at the Heritage Foundation. The views I express in this testimony are my own and should

not be construed as representing any official position of The Heritage Foundation.

Chairman Jordan and Ranking Member Kucinich and distinguished members of the subcommittee, thank you for giving me

this opportunity to address the question of the economic impact of

carbon dioxide regulation. I would like to make several points regarding this impact. First, forcing cuts in CO2 emissions reduces

access to affordable energy.

The United States gets 85 percent of its energy from fossil fuels,

and CO2 is an unavoidable byproduct of using fossil fuels. Though

substitutes exist, they are more expensive and cannot be turned on

and off as needed.

In my written testimony there is a chart that compares that cost

of coal-fired electricity to wind and solar power after these renewable costs have been adjusted for necessary backup power and for

the long transmission distances. We see that wind and solar power

are 80 percent to 280 percent more costly than coal. These higher

costs will not help consumers and they will not help businesses of

any size.

It should be noted that if recent low prices of natural gas continue, gas-fired electricity should have costs comparable to that of

coal.

The second point is CO2 restrictions will have a costly impact on

the economy, regardless of the mechanism used to force the cuts.

There are no free lunches.

Imagine a misguided policy to dramatically restrict the consump- tion of dairy products by way of a $3 million per gallon tax on milk.

Perhaps one very rich milk lover will buy one gallon of dairy products per year. This will raise $3 million, a minor amount by Washington standards. However, it will devastate the dairy industry, imposing much higher costs than the tax revenue, and it is that higher cost that is the focus of the economic impact. The loss of jobs

and income at the farm, at the processing plants, and at the retailers, that is the economic impact of such a policy.

A cap-and-trade program that issues an allowance for a single

gallon of milk per year would have the same devastating impacts

on the economy and the dairy industry as the $3 million per gallon

tax, so they are two equivalent ways of doing the same damage.

In a similar vein, regulations that cut milk consumption to a single gallon, however they are devised, would also have the same

devastating impact on the dairy industry and the overall economy.

So it is with CO2. Whatever policy is used to cut CO2 also cuts

access to affordable fossil fuels and imposes similar economic

losses.

At The Heritage Foundation, our analysis of the Waxman-Markey cap-and-trade bill concluded that it would have cut national income by over $9 trillion and cut employment by nearly 21⁄2 million

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jobs by 2035. A regulatory regime that targets similar CO2 cuts

will have a similarly large economic impact.

My third point is that regulatory mandates do not create free efficiency. Markets provide efficiency when and where it makes

sense. Car advertisements tout their miles per gallon because consumers care about saving money. Appliance manufacturers pay to

meet Energy Star standards because consumers care about saving

money. But forcing consumers to buy products they wouldn’t choose

under the guise of saving them money either will not save them

money overall or will force them to make costly and inconvenient

lifestyle changes. Let me give a personal example to illustrate how

mandated energy efficiency standards may not only be counterproductive, but also very annoying.

My old 1993 Maytag dishwasher used to use 9 gallons of hot

water and take about an hour and 15 minutes to clean the dishes.

Since then, efficiency mandates forced a reduction in hot water use,

so the newer model uses 7 gallons of hot water, but takes at least

an hour and 50 minutes to clean the dishes. The combined cost of

the 2 gallons of water saved in both the purchase, water and sewer

rate, plus the heating it up, is less than a dime; and that is in Arlington, where we have pretty high water rates.

Perhaps for some the tradeoff of 35 minutes for 10 cents is worth

it. If so, they can buy the dishwasher that takes 2 hours. Or they

could have used the 7 gallon cycle that was already available on

my 1993 model dishwasher. For my wife and me, the 10 cents isn’t

worth it, but it is no longer a choice we get to make.

Businesses large and small are constantly making choices over

the products and processes that give them the best results for the

money they spend. These firms were hoveled when regulations,

however well intentioned, forced unwanted choices on them. When

these engines of economic growth are hoveled, income and employment suffer as well.

Thank you.

[The prepared statement of Mr. Kreutzer follows:]

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Mr. JORDAN. Thank you, Doctor.

Mr. Doniger.

STATEMENT OF DAVID D. DONIGER

Mr. DONIGER. Thank you, Mr. Chairman. The other witnesses

that you are hearing today are pursuing, I think, a false story line

that demonizes the Environmental Protection Agency and the

amount of steps it is taking to reduce carbon pollution.

The EPA is doing just what Congress told the Agency to do when

it wrote the Clean Air Act. Congress gave EPA the duty to keep

abreast of science and to act when that science shows pollution is

endangering our health and welfare. The endangerment finding is

backed by solid authority. America’s own most authoritative scientific body, the National Academy of Sciences, said this in 2010:

Some scientific conclusions or theories have been so thoroughly examined and tested and supported by so many independent observations and results that their likelihood of being subsequently found

wrong is vanishingly small. Such conclusions and theories are then

regarded as settled facts. This is the case for the conclusion that

the earth system is warming and that much of the warming is likely due to human activities.

Congress has never done what you are about to do on the floor

today, which is to repeal an expert agency’s formal scientific finding of the threat to health and welfare, and politicians don’t prosper long when they put themselves in the position of denying modern science. Repealing the scientific endangerment finding would

be like repealing the Surgeon General’s finding that tobacco smoke

causes cancer.

H.R. 910 will harm the health and the pocketbook of millions of

Americans. It is bad policy and it is deeply unpopular.

The Clean Air Act’s critics get the economics of environmental

safeguards completely backward. Over the past 40 years, the American economy has tripled in size, while we have cut some forms of

pollution by more than 60 percent. The Clean Air Act doesn’t demand the impossible; it requires only pollution controls that are

achievable and affordable.

EPA has taken great care to protect American families and

American small businesses. In fact, EPA set carbon pollution

standards for new cars, SUVs and over-the-road trucks, the kinds

of cars that small businesses buy, and diesel and saved billions of

dollars for American families and small businesses by cutting their

gasoline and diesel fuel bills $3,000 a vehicle, $7,400 a vehicle for

the second round of standards if EPA is allowed to set those, and

that is with gas prices at $2.61. I would like to have that back

again. The figures will be somewhat bigger with today’s gas prices.

Lobbyists for some of America’s biggest polluters are falsely

claiming that the Clean Air Act’s carbon requirements will fall on

millions of apartments, office buildings, farms, churches. The truth

is otherwise. EPA has exempted all small sources of carbon pollution from permit requirements. Instead, directly in line with congressional intent, EPA has focused the permit requirements on the

largest, new and expanded sources of carbon pollution, such as

power plants, oil refineries, and other big polluters.

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EPA has been sued by dozens of trade associations, companies,

and right-leaning advocacy groups. But when put to the test of

proving their claims, they fail; the courts have found no merit in

their claims of harm. This is no surprise because the court challenges, like lobbyists who come up here on the Hill, are seeking not

relief for the small-fries, but special favors for big polluters; power

plants, oil refineries, and the like. These pollution giants can’t complain to the courts about being harmed by EPA’s exemption of all

the smaller sources. Their attempt to hide behind the skirts of

small businesses should fare no better here on the Hill.

Congressmen deny science at their peril. Likewise, they buy into

phony story lines about burdens on small businesses at their peril.

As I have mentioned, large majorities of the American people support the Clean Air Act and want EPA to do its job to control air

pollution. They specifically want EPA to do its job to control carbon

air pollution. I have appended the polling data to my testimony. It

is food for thought and I welcome questions.

[The prepared statement of Mr. Doniger follows:]

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Mr. JORDAN. Thank you, Mr. Doniger.

Unfortunately, Mr. Holman, we are going to have to have you

wait, and it is going to be a while, and I do apologize. They just

called votes 9 minutes ago. We have 6 minutes left in this vote, so

we have to go vote, so we are going to recess. But it may be a

while. I am guessing in the 3:15, 3:30, 3:40 range. So with this series of votes going to take a while, I need to stop by the Republican

conference, and either myself or—I have not talked to the

gentlelady from New York yet—Ms. Buerkle will be back to get

things rolling around 3:30. So we are going to stand in recess.

[Recess.]

Ms. BUERKLE [presiding]. Good afternoon. We will resume our

hearing. I apologize for the delay for all of you.

Mr. Holman, you are now recognized for your opening speech.

STATEMENT OF KEITH HOLMAN

Mr. HOLMAN. Thank you. Ms. Buerkle, sitting in for Chairman

Jordan and members of the subcommittee, good afternoon and

thank you for giving me the opportunity to testify today. My name

is Keith Holman and I am the deputy director of the National Lime

Association.

NLA is the trade association for manufacturers of calcium oxide

and calcium hydroxide, commonly known as lime. So just to clear

up any misconceptions, we are not the green little citrus fruit and

we are not associated with Lyme Disease.

For the lime industry, particularly our smaller companies, EPA’s

greenhouse gas rules are having a big impact. Lime plants generate CO2 emissions both from the fuel that they use and from

what you could call the roasting process that converts limestone

into lime. All lime plants are now subject to greenhouse gas permitting requirements when they are modified. So even though the

GHG rules took effect only 3 months ago, we are already seeing a

chilling effect on plants to modernize or expand lime plants because of great uncertainty surrounding GHG permitting.

The U.S. lime industry is comprised of some 20 companies operating about 50 commercial lime plants. Nearly half of NLA’s members are small businesses. These small lime companies face intense

competition and they are particularly sensitive to increases in regulatory costs. For this reason, when EPA planned a Clean Air Act

rulemaking back in 2002 that would impose stringent new requirements on lime plants, NLA was able to persuade EPA to convene

what is known as a small business advocacy review panel under

the Regulatory Flexibility Act. NLA wanted EPA to have the opportunity to meet with small lime companies, understand their needs,

and design the rule with those needs in mind.

EPA convened the lime panel in January 2002. Seven of the nine

lime companies potentially affected by the rule participated in the

panel process. These small lime companies met with EPA twice, including a face-to-face meeting in Washington, DC. The companies

were able to talk directly to EPA, as well as with representatives

of the Office of Advocacy and with the White House Office of Management and Budget.

Because of the panel process, the final rule was tough, but something that our small lime plants could live with. Several improveVerDate 11-MAY-2000 11:50 Sep 14, 2011 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67721.TXT KATIE PsN: KATIE
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ments to the rule were only made possible because small lime companies were able to meet face-to-face with EPA and provide critical

information. Not surprisingly, when EPA announced in 2008 that

it planned to regulate GHGs under the Clean Air Act, many industries, including the lime industry, wanted EPA to convene a panel.

However, instead of convening a panel, EPA simply chose to have

a public outreach meeting, and only after it had proposed three

rules under GHG program: the first the endangerment finding, the

vehicle tailpipe rule, and the so-called tailoring rule. EPA argued

that it was not required to conduct a panel for these rulemakings.

Whether or not EPA could legally choose not to convene a panel,

it was clearly wrong not to do so. EPA held the panel meeting in

November 2009, well after the three GHG rules had been proposed.

The meeting was, in reality, little more than EPA giving attendees

a broad brush overview of the proposed rules. NLA and the other

trade associations that were present had virtually no opportunity

to have a dialog with the Agency about the actual design of the

rules.

NLA followed up the meeting with written comments to EPA

about the design of the tailoring rule. The tailoring rule proposed

to defer GHG permitting requirements for plants that had GHG

emissions below a certain threshold. Because there is no known

way to avoid generating CO2 when limestone is heated and converted into lime, NLA asked that EPA consider excluding these

process-related GHG emissions from counting against the tailoring

rules applicability thresholds. EPA’s single paragraph response

failed to meaningfully respond to EPA’s request.

EPA’s reliance on the public outreach approach as a substitute

for the panel process is wrong for several reasons. In bypassing the

panel process, EPA lost its best chance to meet with actual small

businesses face-to-face and exchange information with them. The

panel process also establishes a context for EPA advocacy and

OMB to meet, discuss the issues, and reach consensus on flexible

solutions. The public outreach approach taken by EPA does not and

cannot take the place of a panel.

Many of the implementation difficulties now facing EPA, the

States, and industry might have been avoided if EPA had taken

the time to listen to small business before writing its GHG rules.

Now the lime industry as a whole is reluctant to expand or modernize its plants until the permitting uncertainties caused by these

GHG rules have been resolved.

Thank you for the opportunity to testify today. I would be happy

to answer any questions you have.

[The prepared statement of Mr. Holman follows:]

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Ms. BUERKLE. Thank you, Mr. Holman.

At this time, without objection, I would like to enter into the

record testimony from the National Association of Homebuilders,

the Farm Bureau Federation, and the Small Business and Entrepreneurship Council. Without objection, so ordered.

At this point, I am going to yield myself 5 minutes and see if

some of the other subcommittee members join us.

Mr. Rajkovacz, in your testimony, you mentioned the EPA taking

a one-size-fits-all approach, and I wonder if you could expand upon

that a little bit.

Mr. RAJKOVACZ. Yes. We fundamentally believe without having

included small-business motor carriers, owner-operators in the discussion—and when I say they didn’t include it, within their regulatory impact analysis, they specifically stated that the rulemaking

would not have a significant economic impact on a substantial

number of small entities.

And as we started looking at that, we were aware that they were

talking with large motor carrier interest, and this gets to the heart

of the problem in terms of looking at the trucking industry. The industry is predominantly dominated by small-business motor carriers. Nearly 96 percent of motor carriers operate registered motor

carriers in this country have 20 or fewer trucks that they operate.

And yet, when you go and talk to the largest of the large, who

have very homogenous streamlined operational models, they run

one truck, one type of trailer, it fails to take into account the multiple dual purpose uses that small businesses actually engage in.

We have many members that operate a couple of trailers. They

may one day pull a drive-in trailer, for instance, where aerodynamic technologies would be appropriate and work. We don’t

deny that these technologies will work where appropriate, but the

next day they are pulling a flatbed or drop-deck, and in that now

that technology is working against them.

Ms. BUERKLE. Thank you.

Mr. Doniger, in your comments earlier, before we adjourned, you

made the statement that you hoped that Members of Congress

wouldn’t fall prey to the phony story lines of small businesses when

it comes to EPA burdens placed on them. Could you expand? What

were you referring to?

Mr. DONIGER. If I may, I was referring to a phony story line

about small businesses that is generally told by others, by lobbyists

for larger entities, and the common story line is that EPA’s regulations affect apartment houses, hotdog stands, donut shops, small

entities; and they don’t. There is a specific exemption, as I am explained and I am sure you will hear from EPA, and as Mr.

Kucinich explained, that the permit requirements don’t apply to 95

percent of the sources in the country, don’t apply to the kinds of

sources that emit less than 75,000 tons a year of carbon pollution;

and, as a result, this story line that millions of tiny sources are

being roped into a government bureaucracy is the very opposite of

what is true.

Ms. BUERKLE. Thank you. I have about a minute and a half left,

and I would like to give each of the other three members of the

panel the opportunity to respond to that.

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Mr. KREUTZER. Well, if the tailoring rule is followed and allowed,

it would provide an exemption for some small emitters of CO2 for

a few years. Even the EPA says that eventually it is going to cover

entities requiring, just for Title 5 permits, 6 million new entities

will have to be permitted. So the tailoring rule is just putting it off

for a few years.

Ms. BUERKLE. Thank you.

Go ahead.

Mr. RAJKOVACZ. As far as affecting small businesses, if EPA’s

rulemaking goes through in its current form, there are millions, literally millions of trucks that operate interstate commerce in this

country. As I stated, most of them are small businesses. That

means eventually this rule affects millions of small businesses.

Ms. BUERKLE. Thank you.

Mr. Holman.

Mr. HOLMAN. Yes, I would agree that the tailoring rule is only

a partial temporary solution for small businesses, and we don’t

know what EPA is going to do at the end of the period of deferral,

which will end in a few years. We also don’t know if EPA is interested in writing other programs that are going to apply to small

businesses, so we are in a very comprehensive and wide-reaching

regulatory program in the climate arena, and certainly from the

standpoint of looking at what the impacts are of that program,

EPA has done not a particularly good job.

Ms. BUERKLE. Thank you.

At this time I am pleased to recognize our chairman from Ohio,

I yield you 5 minutes.

Mr. JORDAN. I thank the gentlelady. I didn’t know if the ranking

member was in the room. Well, I will ask a few questions; I think

Dennis will be fine, and we will give him, if he wants, a little

longer time. We will be happy to do that.

Let me again thank you all for being here, and I apologize, all

my notes are at Ann Marie’s desk, but let me just do a couple

things.

Dr. Kreutzer, talk to me a little bit more about the cap-and-trade

bill and what EPA may be doing and how that relates. You mentioned it some in your testimony, but if you can elaborate on that,

I would appreciate that. Then I do have a question for Mr. Holman

and then a general question, I think.

Mr. KREUTZER. If you cut CO2 emissions, if you force them to be

reduced, you are going to cut fossil fuel use. Fossil fuel is the affordable energy right now. Fifty percent of our electricity comes

from coal, 20 percent from natural gas, and in my written testimony I did a cost comparison showing that the renewables are 80

to 280 percent more expensive. That restricts economic activity. It

means consumers have less money to spend on other things once

they have paid their utility bills; it means producers have higher

costs of production.

So if you have consumers with less money and you have to have

higher cost products, they are going to buy less of it; you need

fewer people to make that, so employment goes down as well. It

doesn’t matter if it is a tax; it doesn’t matter if it is a cap; it doesn’t

matter if you come up with a complex set of regulations to force

the same reduction. You are going to have those costs. With regulaVerDate 11-MAY-2000 11:50 Sep 14, 2011 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67721.TXT KATIE PsN: KATIE
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tions even more costly, because you have the compliance of the administrative costs as well, the 6 million permits that the EPA said

they would have to issue for Title 5 permits.

Mr. JORDAN. Thank you.

Mr. Rajkovacz, is that pretty close?

Mr. RAJKOVACZ. Yes.

Mr. JORDAN. Let me ask you this. This came up in a hearing we

had in this room a couple weeks ago. We had a Mr. Michaels from

OSHA and I asked him this question. In the course of the hearing,

I guess I sort of picked up on this and asked him this general question, and I would like your thoughts as to how you see the small

business folks that you work with, how they might feel about this.

I asked the gentleman the question, I said, Mr. Michaels, would

you agree with me that, in the vast majority of cases, employers

care pretty deeply about their employees? They invest time in

training them; they are the key to their success, making a profit;

they know them, they may live in the same community? There are

always exceptions, but I asked him wouldn’t you agree that in most

situations employers care deeply about the well-being of their employees; and I was struck by the gentleman’s response. He said I

would like to think so. And it just struck me that sometimes we

have this attitude amongst Federal employees, who are supposed

to, I understand, regulate business, but also probably educate and

help them, and yet they have this attitude that somehow the employer is the bad guy.

Have you picked up on any of that in your dealings with the Federal Government, whether it be EPA, OSHA, or any other agency?

Mr. RAJKOVACZ. Trucking is actually, I would argue, one of the

most heavily regulated enterprises in the United States. Others

might have a different opinion. I have been dealing with roughly

15 different Federal rulemakings just in the last 4 months; it is

somewhat overwhelming for a lot of us in the industry to keep up

with it.

It depends. A lot of times you do develop relationships with different people and agencies, and that is a very important thing,

working with these folks and developing relationships. But when

you don’t have a lot of contact with an agency, you are an outsider,

and it is really tough to crack that egg.

Mr. JORDAN. Let me ask you another question. This came out in

a hearing a few weeks back. In the full committee we had one of

the freshmen, Congressman Guinta from New Hampshire, he

asked five business owners, he said, if you knew—and most of

these guys started their business 25, 30 years ago; all very successful. He said if you knew then what you know now, would you have

started, relative to regulation. If you knew back then all the things

you would have to deal with, I think he mentioned 15 was the

number of different regulators you have to deal with, agencies you

have to deal with, if you knew then what you know now, would you

have started your business, and every single one of them said they

wouldn’t have done it, would not have done it. Has that been the

experience with some of the folks that you deal with?

Mr. RAJKOVACZ. What I hear from our members is they are basically on regulatory overload. I said 15 rulemakings in the last 4

months, and they are major rulemakings that will change the inVerDate 11-MAY-2000 11:50 Sep 14, 2011 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67721.TXT KATIE PsN: KATIE
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dustry’s productivity. People are generally fed up with what they

think is an over-regulated environment. It is oftentimes under the

guise of safety, and where that is appropriate, obviously——

Mr. JORDAN. I didn’t get to my question, Mr. Holman, but I will

have another round and I will get to that one next time. Thank

you.

Ms. BUERKLE. Thank you, Mr. Jordan.

I now yield 5 minutes to Mr. Kucinich.

Mr. KUCINICH. Thank you very much, Madam Chair.

Dr. Kreutzer, I read your testimony. I was particularly interested

in the chart with the high cost of renewable energy systems, where

you chart the monthly and annual costs, and my part in this discussion about regulation has always been that you can assign costs,

but if you want to get a clear picture you have to look at costs and

benefits simultaneously; otherwise, we are not really understanding the societal impact.

And when I look at coal, in particular, I don’t think that anyone

could argue that coal, the use of coal and the burning of coal and

the after effects on the environment of coal, does have adverse environmental impact. In a way, the sulfur dioxide byproducts can exacerbate pulmonary problems, it is well recognized; asthma, emphysema. The sulfur dioxide, when it travels over many miles, as

we know this in the Midwest, that coal burning plants in the Midwest end up with the condensate polluting rivers and lakes in the

Northeast, and we have a price of beautification there. You could

actually monetize the costs to adverse health and the adverse impact on the environment.

I just wanted to share that thought with you because I think it

is really important that when we are in a discussion, the essence

of which is what does this cost, and your chart, taken within its

own context, you don’t make the argument, but when you look at

the cost of that technology, there is an expense that is offloaded

onto the society. I just wanted to share that with you.

Mr. KREUTZER. I agree. And I don’t think anybody here is talking

about undoing the Clean Air Act back to 1966. What I am addressing is carbon dioxide regulation. We already have an extraordinary

amount—maybe we need more; I am not here to debate that—regulation for sulfur dioxide and other criterion pollutants. If you want

to look at the impact of carbon dioxide on a cost-benefit, I think

some of the estimates have been exaggerated. But if you take the

estimates of the social cost of carbon, add that to the coal cost, that

is about 2 cents per kilowatt hour, it is still much cheaper than

wind or solar. It changes the number some; it doesn’t flip any of

them around.

So we want to look at the costs and benefits. What benefit in

terms of global warming mitigation do you get from this? Even

with a full-blown Waxman-Markey cap-and-trade——

Mr. KUCINICH. Do you think there is such a thing as global

warming?

Mr. KREUTZER. Do I think? Yes, the world is warmer. Yes.

Mr. KUCINICH. I just have a few minutes left and I am going to

have to go on.

Mr. KREUTZER. OK.

Mr. KUCINICH. But I thank you.

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I would just like to submit for the record, Mr. Chairman, a study

that shows, in terms of benefits and costs, that the proposed rules

that we have been promoting would avoid up to 17,000 premature

deaths, 4,500 cases of chronic bronchitis, 1,100 non-fatal heart attacks. These are the benefits of focusing on protecting clean air. So

I would just like to put this into the record.

In the minute that I have left, I just want to ask Mr. Doniger,

can you explain how the tailoring rule works to prevent harm to

small businesses?

Mr. DONIGER. Yes, thank you. As I said in my testimony and in

response to Ms. Buerkle, the purpose of the tailoring rule is to

focus the permit requirement, the requirement that big new plants

and big expanded plants examine whether they have the opportunity to control pollution at an affordable and achievable cost, it

limits this requirement to very big sources and it excludes the 95,

maybe 97, 99 percent of the so-called 6 million sources that Mr.

Kreutzer and others keep saying would be subject to Clean Air Act

requirements. It just will not be so.

Mr. KUCINICH. My time has expired, but the Chair has just said

that he is going to ask one more question and he has been kind

enough to let me ask another question. I have a followup to ask

of you, Mr. Doniger.

So I would go back to the Chair. Thank you, Mr. Chairman.

Mr. JORDAN. [Remarks made off microphone.]

Mr. KUCINICH. That would be great, if I could.

Mr. Doniger, we know that these exemptions are expected to be

reconsidered by the EPA in 2013. Do you think the EPA is going

to keep this exemption for small sources of greenhouse gas emissions?

Mr. DONIGER. Yes, I do. I see no reason why they would take

that exemption away.

Mr. KUCINICH. Well, could you clarify just once more, do any of

the current greenhouse gas permitting regulations burden small

sources of greenhouse gas emissions?

Mr. DONIGER. No, they don’t, and the one thing that is in place

that actually helps small businesses so far are these standards for

vehicles, both light-duty and heavy-duty, that will save thousands

of dollars for small businesses to buy cars and trucks.

Mr. KUCINICH. So, bottom line, what is the impact of the current

greenhouse gas regulations on small businesses?

Mr. DONIGER. It is probably helpful to small businesses as a

whole.

Mr. KUCINICH. Thank you.

Mr. JORDAN [presiding]. Mr. Holman, would you like to maybe

pick up where these guys just left off? Let me start with you by

asking this. You were a former Assistant Chief Counsel of Energy

and Environment at the SBA Office of Advocacy, is that right?

Mr. HOLMAN. That is correct.

Mr. JORDAN. And you authored the comments that SBA submitted to the EPA in 2009 that expressed concern about the EPA’s

endangerment finding and greenhouse gas tailoring rule, is that

right?

Mr. HOLMAN. Yes, the comments in 2008 and 2009.

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Mr. JORDAN. Both 2008 and 2009. Good. So in your former capacity can you give us some insight into the discussion that just took

place and the impact that this stuff will have on small business?

Mr. HOLMAN. Well, I can——

Mr. JORDAN. It seems to me you are pretty darned uniquely positioned to comment on the conversation we just heard.

Mr. HOLMAN. Well, I guess I appreciate that comment. You

know, there was a lot of discussion between the Office of Advocacy

and EPA on the tailoring rule and there is no doubt that the tailoring rule is a help to many small businesses because it does delay

the permitting requirements that would otherwise be falling on

small businesses the way it has fallen on the lime industry even

now.

And I can first address what are those impacts that are falling

on us and on some other smalls, and that ultimately will fall on

all small businesses, potentially, and that is uncertainty because of

GHG permitting. So imagine that you are required to comply with

GHG permitting and you want to do some sort of modernization or

expansion of your plan. What it is going to mean is that you have

to go to get a permit to do that expansion, and in that process of

getting that permit, it could be that every aspect of your operations

will wind up being looked at by EPA or a State under what is

known as best available control technology review.

The concern by most of the industrial sources, and even some of

the small ones, is that process could wind up requiring you to install non-related things, things that have nothing to do with emissions but have to do with energy efficiency or some other improvement in your plant that would be very expensive. And it has a

chilling effect because imagine you go to a bank and you say you

want to get financing for a project that I am going to do at my facility. Well, when do you have to put it in? I don’t know. What is

it going to be? I’m not sure because EPA can’t really tell me what

it is; we will only know at the end of the process, and even then

we might not know because that is subject to being challenged in

court and potentially being changed.

So there is a lot of uncertainty just in terms of this process is

not cut and dried. Unlike the BACT process that has existed for

criteria pollutants for 35 years, we are in a totally new arena here

when it comes to greenhouse gases. Nobody knows exactly what is

going to be required. So when you say what is the magnitude of

this impact on smalls, at the moment we don’t really know; it is

very open-ended, and that has uncertainty which, as you know,

business people hate.

From the standpoint of the Office of Advocacy, we wanted a tailoring rule or something that would at least temporarily soften the

blow, which the tailoring rule does that, but not for everybody; certainly not for the lime industry, bricks, small utilities, municipal

utilities, rural electric cooperatives, foundries. There are a number

of businesses that are not going to be entirely shielded by the tailoring rule.

Mr. JORDAN. So when you put this together and you gave your

comments and recommendations to the EPA, and yet you just

talked about entities who are, you think, impacted in a negative

way, did you think EPA followed your comments? Did they follow

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the statutory requirements they were supposed to follow? Did they

listen? Talk about that process.

Mr. HOLMAN. Speaking from my own perspective as an individual, my sense was that EPA was in a rush to get this rule completed. We wanted very much to have, as I mentioned in my testimony, we wanted EPA to stop or to slow down, consider what the

impacts were going to be on smalls, and try to come up with a way

to design the rule so that it would protect them. EPA was not really interested in alternatives, was not really interested in listening

to what the smalls had to say other than——

Mr. JORDAN. That is what I want to be clear on. My understanding is the law requires them to give serious consideration, due diligence to your recommendation. Is that accurate?

Mr. HOLMAN. That is correct.

Mr. JORDAN. And do you think that took place? That is the question.

Mr. HOLMAN. We were not satisfied that took place, which is why

we wrote four public letters to the EPA saying you must do a panel

before you proceed with these rulemakings.

Mr. JORDAN. So in your role as advocate for small business in

front of the EPA, they did not follow, in your mind, what the law

requires them to follow.

Mr. HOLMAN. It was our belief that EPA did not follow the Regulatory Flexibility Act. They certified the rule and went with what

they considered to be a compromise under Section 609(c) of the

Regulatory Flexibility Act.

Mr. JORDAN. Had that ever been done before?

Mr. HOLMAN. No, it had never been done before.

Mr. JORDAN. So didn’t follow normal practice, took an action

never done before on an issue that you told them was going to impact small business owners in a negative way. Is that accurate?

Mr. HOLMAN. We told them at least four times.

Mr. JORDAN. Four times you told them?

Mr. HOLMAN. In public documents.

Mr. JORDAN. OK. Thank you, Mr. Holman, I appreciate that.

We have one more round for Ms. Buerkle.

Ms. BUERKLE. Thank you, Mr. Chairman.

Dr. Kreutzer, you had started to answer a question about global

warming and I have a feeling you didn’t finish your answer, and

I wonder if you could just expand on that.

Mr. KREUTZER. I think I was responding to Congressman

Kucinich asking me if I believed in global warming, and I said, yes,

we are warming. The question, though, is more than are we having

warming and is it caused by human-made emissions. We are looking at a set of regulations, and if we are going to do cost-benefit,

we need to look at what is the cost of the regulation compared to

how much benefit you get from reduced global warming. That is

the problem with CO2, if there is one.

And climatologists looked at the Waxman-Markey bill, which was

more comprehensive than the current EPA regulations. Their estimates were that by 2050, if you use the largest sensitivity of temperature to CO2, the high end, the maximum change moderation

from Waxman-Markey, that is, how much difference would Waxman-Markey make, thousands of a degree in 2050, maybe a few

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tenths of a degree in 2100. This will have less impact than that.

So we can’t compare the cost here to stopping tsunamis; we have

to compare the cost here to actually what impact it will have on

moderating world temperatures, and it is pretty minimal; in 50

years not even measurable.

Ms. BUERKLE. Thank you. In your testimony you talk about the

cost of cap-and-trade.

Mr. KREUTZER. Yes.

Ms. BUERKLE. And the cost to our GDP, as well as a number of

employees. Can you comment in general, not specific to that legislation, but what regulations are doing? Our country has had 20-

plus months of unemployment hovering at 9 to 10 percent, so we

are concerned about that. We want to get government out of the

way so businesses can succeed. Can you shed some light on that?

Mr. KREUTZER. We haven’t done an estimate on the impact of the

most recent regulations. We are working on ones for the projected

EPA regulations. But one of the things that happens when you

have an environment where you say we might impose this, we

might impose this, it makes it very difficult to make investment.

Now, some on the other side would say that is why we need to

have the regulations, but that is when you say we know for certain

it is going to be really bad. When there is some uncertainty that

is really bad, you still don’t want to invest; but when it comes to

horrible, that is even worse. OK, so, yes, we have a problem where

to make investments in power industry, to build the power plants

we are going to need for firms that are in energy-intensive industries are reluctant to go forward if they think the regulations are

going to be burdensome.

Ms. BUERKLE. And I just want to go back to your previous answer to the first question I asked you. Is there in your opinion,

what is the connection between the CO2 emission and global warming?

Mr. KREUTZER. I am not a scientist; I am an economist, so this

is close to a man-on-the-street interview now. There will be some

warming from manmade emissions, probably. There are some models that show some offsetting. But the CO2, by itself, if it doubles,

will lead to a degree and a half of warming.

The argument is all about are there feedback loops. The models

have lots of them. The data so far, when we look at the last 15

years, we don’t have accelerating warming; the 1999 level has been

pretty flat. So we don’t know for sure what it is. But, more importantly, let’s say it is the 41⁄2 degrees C that they are talking about

at the high end of the IPCC model. What does any of this regulation do? If all it does is impose costs and make us feel like we are

doing something but we are not, then we are getting the warming

anyway, and unemployment and lower income. So whether you believe IPCC or not, this is not a solution.

Ms. BUERKLE. Thank you very much.

I yield back.

Mr. JORDAN. I thank the gentlelady.

The gentlewoman from California, do you wish to ask this panel

some questions? You are welcome to.

Ms. SPEIER. Thank you, Mr. Chairman.

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Maybe California really is on another planet, but we did pass

A.B. 32. There was an effort to repeal that; it failed miserably. And

Californians recognize that we all have a responsibility to be stewards of this planet. Having said that, small business in California

has spoken up very strongly in favor of A.B. 32, which would limit

greenhouse gases.

Mr. Chairman, for the record, I would like to submit a letter and

document from the Small Business Majority that basically says the

following: Our research has continually shown that the Clean Air

Act is good for small business. The report we released in October

of last year found that the benefits of the law have far outweighed

the costs. The Office of Management and Budget predicts that the

total economic benefits of the Clean Air Act to be more than four

to eight times the cost of the compliance. Our report also found

that the law has spurred important technological innovations such

as the catalytic converter, and exports of these and other environmental technologies were valued at $30 billion in 2004. These are

encouraging numbers and cannot be ignored.

Furthermore—without objection?

Mr. JORDAN. Without objection.

[The information referred to follows:]

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Ms. SPEIER. Furthermore, I am amused because when the Clean

Air Act, in 1990, was being considered, Ford Motor Co. claimed

that, ‘‘We just do not have the technology to comply.’’ And yet look

where we are today. Ford Motor Co., Chevrolet, every one of the

auto manufacturers are embracing all of the clean air standards

and creating electric cars and hybrid cars, and the public is embracing them as well.

So I guess my question to you, Mr. Doniger, is there some level

of exaggeration going on here?

Mr. DONIGER. Thank you, Congresswoman. It seems as though,

wherever we are in time, the regulations of the past are embraced

and the regulations of the future are treated like Armageddon; and

then we move on a little bit more in time and those regulations become embraced because, as your examples show, the benefits are

proven, the economic costs turn out to be much smaller than were

forecasted by lobbyists up here, and life goes on. The economy of

the United States has tripled in size since 1970, while we have

been able to cut the emissions of most pollutants by 60 percent or

more. So we can do these two things at once.

I would just call your attention to a study by three economists.

Roger Bezdek is the first name. I would be happy to supply this

for the record. And if I may recite just one paragraph of his findings: Contrary to conventional wisdom, environmental protection,

economic growth, and jobs creation are complimentary and compatible. Investments in environmental protection create jobs and displace jobs, but the net effect on employment is positive. Second, environmental protection has grown rapidly to become a major sales

generating, job creating industry: $300 billion a year and 5 million

jobs in 2003.

Most of the 5 million jobs created are standard jobs for accountants, engineers, computer analysts, clerks, factory workers, etc.,

and the classic environmental job, environmental engineer, ecologist, etc., constitutes only a small portion of the jobs created. Most

of the persons employed in the jobs created may not even realize

that they owe their livelihood to protecting the environment.

So this is a big business and it is a big contribution to our economy, and our economy grows because we protect our environment.

Ms. SPEIER. Thank you, Mr. Doniger. One final question, and

this has probably been addressed already earlier in the hearing,

but this is supposed to be focusing in on small business and the

impacts on small business. The EPA tailoring rule, which has come

forward, would suggest that you have to spew out 75,000 tons a

year to be subject to any kind of regulation by EPA. Are most small

businesses spewing out 75,000 tons?

Mr. DONIGER. No, they are not. Virtually all of the buildings, the

small businesses that own those buildings are untouched by this

regulation. Now, several of the people here have suggested, well,

that may not be true in the future. Well, if Congress was going to

do something that would be constructive and help create the regulatory certainty we need, it would be to lock in the tailoring rule

the way it is now and take away any uncertainty about how it develops in the future.

And that uncertainty exists only because there is a limit on how

long EPA is allowed to make an exemption under the court docVerDate 11-MAY-2000 11:50 Sep 14, 2011 Jkt 000000 PO 00000 Frm 00077 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67721.TXT KATIE PsN: KATIE
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trines that EPA is using to justify these exemptions; and Congress,

of course, can make those exemptions permanent. If you lock in the

tailoring rule, we will have the certainty, the focus on the big pollution sources, get the technology on them and leave the small-fries

alone.

Ms. SPEIER. Thank you. My time has expired.

Mr. JORDAN. I thank the gentlelady.

Mr. Doniger, let me just followup, then, real quick. Which is it?

Earlier you said that more regulation has been good, it has added

to the economy, it has been growth, and now you are saying they

should lock in the tailoring rule to take away any uncertainty and

not expand it. I mean, which way is it?

Mr. DONIGER. The way it is, Congressman——

Mr. JORDAN. I mean, your premise to the first question of hers

was more regulation is good.

Mr. DONIGER. Not all more regulation, sir.

Mr. JORDAN. Oh, so it isn’t all. So some regulation could be bad.

Mr. DONIGER. Of course.

Mr. JORDAN. OK. But that is not what you said. You said regulation is good, it added to the economy, it was wonderful.

Mr. DONIGER. I said the regulation that we—the greenhouse gas

safeguards that EPA is putting in place are a net plus——

Mr. JORDAN. I think you said regulations in the past have been

embraced as the good stuff, but all the future ones everyone always

says they are bad, and you said that is not the case, it is good. So

you made this general statement that regulation was good for business, good for the economy, and now you are saying, no, we should

limit the tailoring rule, shouldn’t expand it, we have to take away

any uncertainty out there. I just want to know which way is it.

Mr. DONIGER. I am sure we can work out which of the positive

economic growth promoting, health promoting regulations and

which are not helpful. I am here to present the case that what is

being done now makes perfect common sense, and what EPA has

done is to make sure that the small businesses are not burdened

by the kinds of regulations that don’t make sense.

Mr. JORDAN. Any further questions for the first panel?

[No response.]

Mr. JORDAN. I want to thank you all for joining us today. We do

need to move on. And I apologize for the schedule. As I said earlier,

it is just one of those weeks around Congress.

We will get ready for our second panel and we will move through

that as quickly as we possibly can.

Thank you all.

As soon as we get you situated here, we will start it here. OK,

we are pleased to welcome our second panel of witnesses.

We have The Honorable Gina McCarthy, who is the Assistant

Administrator at the U.S. Environmental Agency. Welcome, Ms.

McCarthy.

And we also have Ms. Claudia Rodgers, who is the Deputy Chief

Counsel at the Small Business Administration’s Office of Advocacy.

If you were here for the first panel, we have a practice here.

Please rise and raise your right hands.

[Witnesses sworn.]

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Mr. JORDAN. Let the record show both witnesses answered in the

affirmative.

And we will go right down the row here. Ms. Rodgers, you are

up first. Go right ahead.

STATEMENTS OF CLAUDIA RODGERS, DEPUTY CHIEF COUNSEL, OFFICE OF ADVOCACY, U.S. SMALL BUSINESS ADMINISTRATION; AND GINA MCCARTHY, ASSISTANT ADMINISTRATOR FOR THE OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY

STATEMENT OF CLAUDIA RODGERS

Ms. RODGERS. Mr. Chairman, ranking member, members of the

subcommittee, my name is Claudia Rodgers and I am Deputy Chief

Counsel for the Office of Advocacy at the U.S. Small Business Administration. I am pleased to have the opportunity to appear before

this committee on behalf of Chief Counsel Dr. Winslow Sargeant.

In the interest of time, I will summarize my prepared testimony

and ask that my full statement be included in the record. Because

Advocacy is an independent body within SBA, my testimony does

not necessarily reflect the position of the administration or the

SBA.

Congress established the Office of Advocacy to represent the

views of small entities before Federal agencies and Congress. The

Office of Advocacy is charged with oversight of agency compliance

with the Regulatory Flexibility Act. The RFA, as amended by the

Small Business Regulatory Enforcement Fairness Act, gives small

entities a voice in the Federal rulemaking process. For all rules

that are expected to have a significant economic impact on a substantial number of small entities, EPA must conduct SBREFA panels to assess the impact of the proposed rule on small entities and

to consider less burdensome alternatives.

Advocacy and EPA have a long and productive working relationship. Since SBREFA was signed into law in 1996, EPA has conducted nearly 40 SBREFA panels to assess the impact of proposed

rules on small entities and to consider less burdensome alternatives. These panels allow for small business to give direct feedback on the potential cost of the proposed rules and to suggest and

develop less burdensome alternatives. Final panel reports must be

signed by the Chief Counsel for Advocacy, the Administrator of the

Office of Information and Regulatory Affairs, and the Administrator of the EPA. In 15 years of SBREFA panels, Advocacy has

found that the panel process is a useful way for small businesses

to provide valuable input into the rulemaking process. In short, the

panel process works.

SBREFA panels have saved billions of dollars for small businesses due to changes and improvements that were made to proposed rules, while still allowing EPA to achieve their statutory objective. While Advocacy does occasionally have disagreements with

EPA on procedure and policy, we are also very proud of the work

we have done with EPA to improve regulations and reduce the burdens on small businesses. We currently have five SBREFA panels

underway on EPA rules, and we will continue to work with EPA

in a constructive way to make sure the RFA and SBREFA are

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being followed and the impacts of regulations on small businesses

are being taken into account.

With respect to regulation of greenhouse gases, Advocacy disagrees with EPA on whether the impacts on small businesses were

properly considered. Advocacy has been clear and consistent in its

public comment letters and other communications with EPA about

our positions on these issues. We believe EPA should have held

SBREFA panels and conducted thorough RFA analysis to explore

potential impacts of greenhouse gas regulations on small entities.

In 4 years of greenhouse gas regulatory activity, EPA has not evaluated the economic effects that its initial endangerment finding

and mobile source emission standards have had on small businesses.

Advocacy does not challenge EPA’s authority to implement the

Clean Air Act; however, we do believe a more thorough analysis

was needed, including SBREFA panels, to fully consider the impacts greenhouse gas regulation would have on small businesses.

These concerns were noted in Advocacy’s four public comment letters, attached to my testimony.

In 2008, when EPA issued an advanced notice of proposed rulemaking indicating it might regulate greenhouse gases, Advocacy

filed public comments asking EPA to hold SBREFA panels on any

greenhouse gas regulation to ensure the effects of small entities

could be considered.

When EPA issued its endangerment finding in 2009, Advocacy

again filed public comments advising EPA to conduct SBREFA

panels to explore potential impacts of greenhouse gas regulations

on small entities.

In EPA’s subsequent proposed regulation of motor vehicle greenhouse gas emissions standards and the proposed tailoring rule,

EPA again certified under the RFA that such standards would

have no significant impact on a substantial number of small entities. EPA did acknowledge some of the potential burdens on small

businesses and established a phased in compliance program with

the tailoring rule. This action led to significant cost savings for

small businesses and EPA deserves credit for its implementation.

However, Advocacy believes EPA should have done a SBREFA

panel, which would have better reflected the views of small businesses and improved the rule.

In conclusion, while EPA has expressed its desire to reach out to

small entities and has provided temporary relief to small businesses, Advocacy remains concerned that EPA has not fully complied with both the spirit and the requirements of the RFA on the

greenhouse gas rules. EPA did conduct public outreach; however,

public outreach is not a substitute for the concrete feedback agencies get from small businesses during the panel process.

We look forward to continuing to work with EPA on these and

other important regulations. Thank you for the opportunity to address such an important issue for small business. I appreciate your

work in the Office of Advocacy and I am happy to answer any questions you may have.

[The prepared statement of Ms. Rodgers follows:]

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Mr. JORDAN. Thank you, Ms. Rodgers.

Ms. McCarthy.

STATEMENT OF GINA MCCARTHY

Ms. MCCARTHY. Chairman Jordan, Ranking Member Kucinich,

and members of the subcommittee, I want to thank you for inviting

me here today, and I am honored to be sitting here with Ms. Rodgers.

I hear repeatedly from members that small business constituents

are very concerned about EPA updating its Clean Air Act programs

to address greenhouse gases. But when I listen to the concerns, I

am most struck by the fact that what they think we are doing

bears little or no relationship to what we are actually doing. I appreciate today’s opportunity to try to set that record straight.

The Agency is taking a common sense approach to meet our

Clean Air Act obligations to reduce carbon pollution. Our focus now

is not on small sources at all, but on the largest polluters. Perhaps

the most repeated misinformation about greenhouse gas regulation

and small businesses relates to greenhouse gas air permits. Contrary to the most commonly heard claims, small sources are not

currently covered by the permitting program. EPA adopted regulations last year that exempt small sources for at least the next 5

years, and we cannot include them absent a future rulemaking

with public comment that would do so.

I know some of your constituents are concerned about what has

been called a cow tax. Well, let me reassure you that the Agency

has no intention or desire to impose taxes on cows, pigs, chickens,

or any other livestock. And while we routinely hear concerns that

our greenhouse gas standards will cause incredible increases in gas

prices and electricity rates, none of these estimates are actually

based on the analysis of our programs. Instead, they are based on

studies, and many of them are severely flawed, of economy-wide

cap-and-trade programs that bear absolutely no relationship to

EPA’s actions.

In sharp contrast to these concerns, the only greenhouse gas

standard EPA has issued under its existing Clean Air Act authority

will save small businesses money. The average American purchasing a new passenger vehicle that meets our greenhouse gas standards would net savings of $3,000. Our proposed standards for

medium- and heavy-duty vehicles would net operators of

semitrucks savings of up to $74,000 over the truck’s useful life.

Misconceptions about the effects of EPA programs are unfortunately no surprise. Over the last 40 years, similar unsupported

claims have been made nearly every time EPA has taken significant steps to protect the American public. In the 1970’s we were

told that by using the Clean Air Act to phase in catalytic converters for new cars and trucks, that entire industries might collapse.

Instead, the requirement gave birth to a global market for catalytic

converters and enthroned American manufacturers at the pinnacle

of that market.

In the 1980’s, people claimed that the proposed Clean Air Act

amendments would cause a quiet death for businesses across the

country, but instead the U.S. economy actually grew by 64 percent,

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even as the implementation of Clean Air Act amendments cut acid

rain pollution in half.

In the 1990’s, when we took steps to phaseout chemicals that deplete the ozone layer, a refrigeration industry representative testified that we would see shutdowns of refrigeration equipment in supermarkets and air conditioners in large office buildings, hotels,

and hospitals. None of that happened. Instead, the phase-out happened 5 years faster and cost 30 percent less.

EPA is using the same Clean Air Act tools that we have been

using for these past 40 years to protect public health to now address the public health threat that is posed by carbon pollution.

These Clean Air Act tools have proven their worth over and over

in these years to improve public health. In fact, Clean Air Act programs adopted since 1990 are expected to provide $2 trillion in

benefits in 2020 alone, over $30 in benefits for every dollar spent.

Just last year these programs are estimated to have reduced premature mortality equivalent to saving over 160,000 lives and to

have enhanced productivity by preventing 13 million lost work

days.

I will close with a statement by the Small Business Majority and

the Main Street Alliance: Any step to delay or limit EPA’s ability

to regulate greenhouse gases and other pollution has negative implications for many businesses, whether they are large or small. It

would hamper the growth of the clean energy sector of the economy, a sector that a majority of small business owners view as essential to their ability to compete.

Thank you, Mr. Chairman, and I look forward to your questions.

[The prepared statement of Ms. McCarthy follows:]

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Mr. JORDAN. Thank you both for your testimony and your time.

I am going to let the ranking member go because he has to run

to another meeting, and then we will finish up.

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

Ms. McCarthy, in a hearing about the impacts of greenhouse gas

regulations, I think it is important to discuss the reason why these

regulations exist. In his written testimony, Mr. Doniger cited the

National Academy of Sciences, which concluded, ‘‘Climate change is

occurring. It is caused largely by human activities and poses significant risks for, and in many cases already affecting, a broad

range of human and natural systems.’’ The National Academy of

Sciences continued to explain that the scientific basis for reaching

this conclusion has ‘‘been so thoroughly examined and tested and

supported by so many independent observations and results that

the likelihood of them subsequently being found to be wrong is

vanishingly small. Such conclusions and theories are then regarded

as settled facts.’’

Now, Ms. McCarthy, as you know, the National Academy of

Sciences is far from the only organization that has reached legitimate compelling scientific conclusions that illustrate the real danger caused by climate change. Entities, including the World Health

Organization, International Monetary Fund, and the U.S. Global

Change Research Program, a program mandated by Congress to integrate climate change, Federal research, all definitively identified

climate change a real danger.

Ms. McCarthy, do you agree that the science that provides the

impetus for greenhouse gas regulation is indisputable? And if you

do, why?

Ms. MCCARTHY. I do, Mr. Kucinich, and that is because the best

available peer-reviewed science that we have found indicates that

greenhouse gas emissions threaten the health and welfare of the

American people. That is what the Administrator said in making

her endangerment finding. It is backed not just by EPA research,

but by the full breadth of all of the agencies in the Federal Government who address these types of issues, including the National

Academy of Sciences, including NASA, including NOAA. All of the

agencies that we rely on to provide the best science to this country

and internationally have told us that the simple fact is that greenhouse gases are endangering public health and the environment,

and it is time to take action now to reduce those pollutants.

Mr. KUCINICH. Well, did the EPA allow for comments from private industry, including small businesses on the greenhouse gas

endangerment finding?

Ms. MCCARTHY. We did. It went through a rulemaking process.

It was one of the most thorough of the agencies. We had more than

350,000 comments, which we addressed individually. We had 11

volumes of response to comment on this rule. We believe we did the

most thorough job that the Agency could and that the science is indisputable.

Mr. KUCINICH. So what do you say, then, to the small businesses

who are continuing to express concern that EPA is not paying attention to them and EPA is endangering their businesses? What do

you say to them?

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Ms. MCCARTHY. I would tell them that the EPA understands

that our obligation under the Clean Air Act is to regulate greenhouse gases and that they pose a substantial public health problem. I would tell them that we are taking reasonable common sense

steps to address greenhouse gases under the Clean Air Act in the

way that Congress intended, in a way that protects the interest of

the small businesses, in a way that will continue to allow the economy to grow, to continue to allow jobs to happen. We are doing the

same thing to regulate greenhouse gases as we have successfully

done with other pollutants under the Clean Air Act, and we will

look at the economic impacts. We have done that; we will continue

to do that. We will act deliberately and smart and use a common

sense approach.

Mr. KUCINICH. You heard the testimony of the witnesses in the

previous panel, did you not?

Ms. MCCARTHY. I did.

Mr. KUCINICH. I think we have to be concerned about small business communicating their difficulties, and I know Mr. Doniger’s

testimony is that most of the small businesses, that the rules

would not necessarily apply to them. But I think for those to whom

they do apply, they are looking for some words from you that would

indicate that you are trying to do everything you can to make sure

people can stay in business, at the same time trying to protect the

environment. Is that a fair characterization?

Ms. MCCARTHY. That is correct.

Mr. KUCINICH. OK.

I want to thank the chairman for indulging me with this opportunity to go first. Thank you. Yield back.

Mr. JORDAN. You bet. I appreciate the gentleman. Thank you.

Ms. Rodgers, the SBREFA Act has been around for about 15

years, is that right?

Ms. RODGERS. Since 1980, 30 years.

Mr. JORDAN. Thirty years. OK.

Ms. RODGERS. I’m sorry, the RFA is 30 years; SBREFA has been

1996.

Mr. JORDAN. 1996. About 15 years. That is what I have. And how

many SBREFA panels have you been involved with with the EPA

in that timeframe?

Ms. RODGERS. The Office of Advocacy has been involved with

nearly 40, I think we are up to about 38 now.

Mr. JORDAN. And I think in your testimony isn’t it true you said

you had like five underway right now?

Ms. RODGERS. Yes, five currently.

Mr. JORDAN. OK. And you believe these have been positive?

Ms. RODGERS. Yes. Overall, actually EPA is one of the better actors in terms of compliance with the RFA in general. When we

were developing a training program back in 2002, we had to go to

agencies to find out those who do it best to help us develop the program, and we went to EPA.

Mr. JORDAN. So you have a good relationship, good track record

with EPA in all these except the one that is at issue today, is that

right?

Ms. RODGERS. Yes, we are concerned about the greenhouse gas

regulations.

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Mr. JORDAN. So the normal process was not done with the greenhouse gas issue and its effect on small business. All the other times

have been fine, when you recommended, when you went through

it, except for this one particular one.

Ms. RODGERS. We felt that the Office of Advocacy, yes, felt that,

taken as a whole or separately, the greenhouse gas regulations

clearly had a significant economic impact on the a substantial number of small entities and, therefore, a SBREFA panel should have

been held.

Mr. JORDAN. And is this a notable exception or is this the only

exception to when you suggested you move in this way and go

through the process that the law spells out? Is this a notable exception, is this one of a few that has been done this way or is this the

only one that has been done this way?

Ms. RODGERS. It is one of a few. However, certainly over the

years, over 15 years and 40 panels, we are bound to have disagreements over their certifications on some rules. But it is really one

of the very few.

Mr. JORDAN. OK, so when Ms. McCarthy answered the ranking

member’s questions about there was a process that was undertaken

with small business owners, it wasn’t the normal process.

Ms. RODGERS. Correct.

Mr. JORDAN. OK.

Ms. McCarthy, why?

Ms. MCCARTHY. Mr. Jordan, I would just disagree with the characterization that it wasn’t a normal process. I would emphasize

that EPA certainly follows both the letter and the spirit of the RFA

as it has been amended by SBREFA——

Mr. JORDAN. Just hang on 1 second. Ms. Rodgers just testified

that it has been a great relationship, you have worked things

out——

Ms. MCCARTHY. It has.

Mr. JORDAN [continuing]. The process has been followed almost

all the time. And yet here we have a pretty important rule.

Ms. MCCARTHY. We do.

Mr. JORDAN. Clean Air Act, greenhouse gas, pretty important

stuff that they think is going to have a real impact on small business. It would seem to me you would want to follow the standard

procedure and go through what has been the custom and the practice. So why not in this situation?

Ms. MCCARTHY. We did follow the appropriate procedure. I thin

where we disagree is that the tailoring rule, which seems to be the

issue at hand, is a burden reduction rule.

Mr. JORDAN. This is important. You keep saying you followed the

normal procedure, but Ms. Rodgers says out of the ordinary; the

gentleman before, I assume you saw where Mr. Holman talked and

said out of the ordinary, not the normal process.

Ms. MCCARTHY. There are a variety of ways to comply with the

law. EPA generally goes above and beyond, and we always meet

both the letter and the spirit of the law. In this instance we made

a decision that we did not need to convene a panel because the tailoring rule was a deregulation rule. In fact, it reduced the burden

for 6 million small businesses to have to deal with greenhouse gas

permitting, and in that instance we did not convene a panel.

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Now, we did get comment from SBA indicating that they thought

we should. I believe the disagreement is one that we have had in

the past before. In particular——

Mr. JORDAN. You believe or do you know?

Ms. MCCARTHY. Oh, I do know, yes.

Mr. JORDAN. OK.

Ms. MCCARTHY. Let me explain when that happened. And that

had to do with the ozone and fine particles standards that we

issued in 1997. At that point in time, SBA also indicated to us that

we should convene a panel. We indicated that rule was not subject

to a panel requirement. That was actually taken to court. The D.C.

Circuit said that SBA’s interpretation of the RFA doesn’t carry any

more weight than EPA’s, and they disagreed with SBA and found

that our interpretation of the RFS was persuasive. We actually

won that case, and we have never ever lost a case.

Mr. JORDAN. OK.

Ms. Rodgers, did you suggest a panel be convened for the tailoring rule and the endangerment finding and the light duty truck

rule?

Ms. RODGERS. Yes, we did, Congressman.

Mr. JORDAN. So all three.

And, Ms. McCarthy, you declined to do it for each of those?

Ms. MCCARTHY. Well, we explained each of those rules, and I can

go through them if you would like, but we still believe we took the

appropriate action under the law.

Mr. JORDAN. Because you talked about the tailoring rule; I didn’t

hear you talk about the other two. So three times.

Ms. MCCARTHY. I can talk about the endangerment finding.

Mr. JORDAN. Endangerment finding, OK.

Ms. MCCARTHY. EPA looks at cost and looks at getting SBREFA

panels——

Mr. JORDAN. Well, let’s cut to the chase here. Why not on something this important, something of this magnitude, why not do the

standard practice? Why go through this? To cite this decision and

that and here is why, why not just do what the advocacy group

that is in the law and follow the process that is designed to be followed?

Ms. MCCARTHY. We did follow the process that is designed to be

followed. What I would indicate to you is that——

Mr. JORDAN. Well, again, we have the advocates for small business, both of them saying you didn’t.

Ms. MCCARTHY. I would disagree, respectfully.

Mr. JORDAN. OK.

I will yield to the Chair of the full committee, the gentleman

from California. Excuse me.

Mr. ISSA. You should take Ms. Speier.

Mr. JORDAN. I apologize, Mr. Chairman, I am going to insult you

twice in 30 seconds.

Mr. ISSA. Ladies first, please.

Mr. JORDAN. I didn’t see the gentlelady walk in from California.

California is going to get covered nonetheless, one way or the other.

Ms. SPEIER. Thank you, Mr. Chairman, and thank you, Mr.

Chairman. I would have yielded, but I have constituents who are

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waiting in the wings to talk with me, so I would like to take my

opportunity now.

Ms. Rodgers, Chairman Issa circulated a Dear Colleague letter to

House members yesterday, I believe, that cites a September 2010

report issued by the SBA Office of Advocacy, authored by Crain

and Crain. The report estimated the annual cost of regulation was

more than $1.75 trillion. That is kind of a staggering figure.

And yet in February of this year Professor Sid Shapiro and Ruth

Ruttenberg released a critique of the Crain and Crain study, called

Setting the Record Straight. The Shapiro-Ruttenberg report found

that the Crain and Crain report had ‘‘severe flaws.’’ One of these

flaws in the study was that they looked at costs of regulation without looking at the benefits.

I think you can make the case if you look at the cost of running

Congress, it is staggering. But some would argue that there is

some benefit associated with running Congress. In any case Ms.

Rodgers, unless you all want to retire or resign at this point in

time.

In any case, Ms. Rodgers, did the SBA Office of Advocacy contract with Nicole Crain and Mark Crain, and they did they ask the

authors to evaluate the benefits of regulation or only the costs?

Ms. RODGERS. Thank you, Congresswoman. We did not ask them

to evaluate the benefits as well, and the reason is this: This is the

fourth in a series of studies we have done on the same issue, which

is the cost of regulations and the impact of those regulations on

small businesses. The purpose of the study is not to show regulations are bad and not to show that all regulations are over-burdensome for small business. The purpose was to show that small businesses feel the effect of regulations differently than large businesses.

And the reason that was done for the cost, and not the benefits,

because the costs were what affect small businesses most and it is

what the Regulatory Flexibility Act requires our office to oversee,

which asks agencies to review the cost of their——

Ms. SPEIER. All right. How much did that study cost?

Ms. RODGERS. Oh, I don’t know that answer. I will have to get

back to you.

Ms. SPEIER. Would you please provide that to the committee?

Ms. RODGERS. I would be happy to, yes.

Ms. SPEIER. Another flaw in the study identified by Shapiro and

Ruttenberg was that the SBA’s Office of Advocacy never had access

to the underlying data used in the report; a little astonishing to

me. If you can’t look at the underlying data, then garbage in, garbage out is the way I look at things.

Ms. Rodgers, does your office have the data used in the Crain

and Crain study? If so, would you please make that data available

to us?

Ms. RODGERS. I will check and see if our office has the data and

make it available to you. I do know, I am told that it is available

through Crain and Crain on their Web site or through their Web

site, that they have made it available. When we contract out studies, our office is not required to ask for that data and make it publicly available——

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Ms. SPEIER. Well, let me suggest to you that from a public perspective, if you are using taxpayer funds, we deserve to have the

underlying data so we can in fact determine whether or not it is

accurate.

Ms. McCarthy, if EPA funded a study, would the Agency expect

to have access to the underlying data?

Ms. MCCARTHY. The Agency would not only have access to it, the

public would.

Ms. SPEIER. All right. I think that makes sense.

In addition, Shapiro and Ruttenberg, one of the peer reviewers,

Richard Williams, from the Mercatus Center, raised concerns that

the report’s regulatory quality index may not measure what the authors say it measures; and even if it does, it may overstate the cost

of regulation when used in conjunction with other measures.

Ms. Rodgers, what, if anything, was done to address this concern

that was raised during the peer review process?

Ms. RODGERS. We did have the document, the study peer reviewed, and it came back with actually excellent reviews during

the peer review process. This is, as I mentioned, one in four studies. Crain has been involved, the author has been involved in many

of our studies previously which have not had—and used the exact

same methodology—have not had complaints before then. We have

done it in 1995, 2001, 2005, and 2010. So it is basically the same

methodology, a new version of the same study with an updated cost

on how these costs are affecting small businesses.

Ms. SPEIER. Ms. McCarthy, do you have any concerns with the

peer review process used to evaluate the Crain and Crain study?

Ms. MCCARTHY. I do, and I am glad you asked that. As far as

I know, the study was reviewed by two individuals. The sum total

of one of the individual’s comments was, ‘‘I looked it over and it’s

terrific. Nothing to add. Congrats.’’ If this is the quality of the peer

review of that study, then I would suggest to you it is a study that

EPA could certainly not put its weight behind.

EPA is required to do peer review analysis of its studies; it is required to have our studies have analytic consistency, rigor, real

peer review, transparency. The last report that EPA went out and

contracted for and worked through was peer reviewed by 34 economists and technical individuals. We had a thorough public comment process. What I have here holding is a double-sided copy of

just their last comments that they submitted to us during the peer

review process.

Two individuals does not make a substantive peer review process, when we have repeatedly asked for the underlying data and

have not been provided it by Crain and Crain or by the SBA.

Ms. SPEIER. Thank you.

Mr. Chairman, I know my time has expired, but I would just like

to suggest to all of us that taxpayer funds should be spent on studies that really give us good data, and certainly the data should be

available to us and to the taxpayers of this country. So I would

hope that as we look at ways of making sure that government operates effectively, that we require that moving forward. Thank you.

Mr. JORDAN. I thank the lady. She makes a good suggestion.

Following up on that, Ms. McCarthy, in the closing of your testimony you say, I will close with a statement by the Small Business

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Majority, and you quote the ability to regulate greenhouse gases

should not be limited. Do you know how many members, what the

membership is in the Small Business Majority? Do you know that

number?

Ms. MCCARTHY. I am sorry, I do not.

Mr. JORDAN. Well, according to a New York Times story July 8,

2009, Small Business Majority has no membership. Its founder,

Mr. John Arensmeyer, says it can no longer objectively represent

small business if it had membership. So while the gentlelady from

California’s point is good, the close of your testimony cites a group,

at least according to the New York Times, that has no membership

and yet portrays itself as an organization representing small business. So I think both points are well taken and you should make

sure in your testimony to quote from a source that actually might

reflect something of the interest of small business.

With that, I would yield to the chairman of the full committee.

Mr. ISSA. Thank you, Mr. Chairman. And I am sorry that my colleague from California left. Let me just make something clear for

the record.

Ms. Rodgers, Ms. McCarthy, you are both working for departments headed by President Obama, political appointees, right?

Ms. RODGERS. Yes.

Mr. ISSA. So when she sort of implies that one side of your two

positions must be good and the other is ill-conceived and doesn’t

care about the same things that we all saw President Obama elected for, at least, Ms. Rodgers, I suspect you object to some idea that

you don’t care to get it right or that somehow your mandate is different in some way. Wouldn’t that be true?

Ms. RODGERS. Yes, Congressman, I would absolutely object.

Small businesses care about clean air and care about the environment, so we want to make that point as well.

Mr. ISSA. Let me ask you both a question. Isn’t it true you could

both be right, that Ms. McCarthy, with a mandate to essentially

have the cleanest possible air and water, can in fact, in good conscience, make every effort to be as pure as possible? We used to say

driven snow, but I have seen what it looks like when it melts, so

I won’t go there.

And isn’t it possible, Ms. Rodgers, that you, when you go out and you get a study that shows $1.75 trillion, that you are not saying

that you can save all of it and still have the level of clean air and

clean water the American people expect? Couldn’t you both be

right?

Ms. RODGERS. I would absolutely agree.

Mr. ISSA. Now, Ms. McCarthy, wouldn’t you agree that somewhere in $1.75 trillion, if that is an accurate number, that some

of that should be reviewed and reconsidered to see if in fact

changes could save much of that burden and free up those dollars

for other uses, even if they are uses to help clean the environment;

that not every regulation has accomplished what you wanted it to

in a sound science way? Wouldn’t you agree?

Ms. MCCARTHY. We are in the process now of complying with the

President’s Executive order and doing a review of our regulations.

Mr. ISSA. But I actually was looking at the conclusion. Wouldn’t

you conclude that there has to be something there that you could

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re-look at that would help get burden off the backs of small business, and maybe even not small business; that, in fact, on a tradeoff of cost-benefit is not the best regulation out there?

Ms. MCCARTHY. Mr. Issa, I would suggest to you that we continually look at those issues and we are working with the——

Mr. ISSA. OK, then maybe you can explain something to me. In

Boiler MACT you have a standard that can’t be adhered to, and

you have gone to the courts asking them to give you relief, and

they have said we can’t relieve you from your stupidity; go to Congress. Now, isn’t that slightly vulgar, but pretty much the exact

truth; that you have something that does not exist, you have created a rule that cannot presently be done, you have gone to the

courts trying to get temporary relief in hopes that some day it will

be able to be complied with, rather than saying what is it that exists that can be complied with? Wouldn’t that be a fair characterization?

Ms. MCCARTHY. I don’t believe so, no.

Mr. ISSA. OK, what part of it was inaccurate? Tell me in specificity?

Ms. MCCARTHY. The specific issue is the Boiler MACT rule went

through a public process——

Mr. ISSA. No, I am looking at the outcome. Is the science attainable today according to——

Ms. MCCARTHY. Yes.

Mr. ISSA. It is? Then why did you ask the court for relief?

Ms. MCCARTHY. Because we believed that it deserved reconsideration because some of the legal underpinnings during the public

comment process, because of comments we heard from industry,

many of them small businesses, we made substantial changes from

proposal to final which warranted additional legal underpinnings

through a public comment process.

Mr. ISSA. So why——

Ms. MCCARTHY. We will do that.

Mr. ISSA. Why wouldn’t you just pull the rule?

Ms. MCCARTHY. There was no need to do that and we were under

a court order to deliver a final rule within a given point in time,

which we did.

Mr. ISSA. So now we have something for which you have asked

the court for relief and they can’t give you relief.

Ms. MCCARTHY. No. What we intend to do is reconsider the rule

in due time. We will respond appropriately; it will be legally sound.

And it is already scientifically credible.

Mr. ISSA. But not currently available.

Ms. MCCARTHY. Oh, it is actually a final rule.

Mr. ISSA. No, no. I am talking about the actual technology.

Ms. MCCARTHY. Oh, no, I am sorry. I believe that the requirements in the rule are achievable.

Mr. ISSA. Well, thank you, I appreciate your having that opinion

under oath. The mandate for these impacts, last year—and it has

probably been brought up, but I will just bring it up again. Last

year I sent the Administrator, Administrator Jackson, a letter requesting EPA suspend finalization of its greenhouse gas proposals

until after the Agency complied with the Office of Advocacy demand.

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You sent me back a response on February 4th, informing me that

the Agency’s decision was to move forward. At that time, you indicated that your outreach under 609(c) fully satisfied EPA’s obligation to assess the impact and actions on small business. Do you

still stand behind that?

Ms. MCCARTHY. Yes.

Mr. ISSA. Ms. Rodgers, do you think that they have really lived

up to the spirit of that?

Ms. RODGERS. Unfortunately, no, we don’t. Section 609(c) of the

RFA does allow an agency to reach out to small businesses, but we

don’t feel that this relieves them of their duty to hold a SBREFA

panel. And as I said in my testimony, outreach to small business

is not the same thing as a SBREFA panel.

And the advantages of a panel that you don’t get from outreach

are at the pre-proposal stage you have the three member panel, our

office, EPA, and the Office of Information and Regulatory Affairs

at the White House; and at the end of the process you end with

a panel report that has the recommendations from actual small

businesses on various alternatives that get put into the document.

Mr. ISSA. I had another question to this round, if I can, since I

think we have a little time here.

Section 317 of the Clean Air Act requires EPA to complete an

economic impact assessment for any regulations propagated under

Section 202 of the act, which applies to the car rule. Did EPA conduct a Section 317 economic impact assessment before any of its

greenhouse gas rulings were made?

Ms. MCCARTHY. It did conduct a regulatory impact assessment

associated with the light duty vehicle rule.

Mr. ISSA. If so, did the analysis assess the following, which are

required by statute: the cost of compliance?

Ms. MCCARTHY. Yes.

Mr. ISSA. The potential inflationary or recessionary effects?

Ms. MCCARTHY. I believe so.

Mr. ISSA. The effects on competition with respect to small business?

Ms. MCCARTHY. The rule exempted small business, Mr. Issa, so

we probably did not need to go into much detail there.

Mr. ISSA. Do you intend on always exempting small business?

Ms. MCCARTHY. No. When it is appropriate we do.

Mr. ISSA. No, no. Do you expect that this rule will never change;

that in some future time you wouldn’t do it?

Ms. MCCARTHY. If the rule changes, we will have to go through

a rulemaking process——

Mr. ISSA. So you carved out small business in order to essentially

keep yourself from having to do that assessment or that assessment simply wasn’t necessary and that was never part of the consideration?

Ms. MCCARTHY. That was obviously part of the regulatory impact

assessment, was to look at all costs. What I am explaining to you

is that we did not——

Mr. ISSA. The reason I asked the question is you don’t exempt

anybody without a reason. Obviously we don’t want clean air and

clean water only for big companies; we want clean air and clean

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water. So in your decision to exempt small business, wouldn’t you

need a cost reason to do so?

Ms. MCCARTHY. Actually, we did provide a thorough assessment

of why it was appropriate to exempt. Cost was part of the consideration; lead time was part of the consideration. Because you are asking significant improvements in cars, and many of the smaller

manufacturers would not be able to produce and comply with the

rules in the same way that large industries or large manufacturers

were able to do that.

Mr. ISSA. OK. The next test was the effects on consumer cost.

Did you take that into consideration?

Ms. MCCARTHY. Yes, we did.

Mr. ISSA. The effects on energy use, did you take that into effect?

Ms. MCCARTHY. Yes, we did.

Mr. ISSA. To the extent that EPA has conducted any economic

impact analysis, I respectfully request that you provide that to the

committee. Are you prepared to do that?

Ms. MCCARTHY. Oh, we certainly will.

Mr. ISSA. OK. I would very much appreciate it. That, in our opinion, has been requested previously and is long overdue.

I am getting head shaking. Christina, am I wrong? We have requested that?

[Remarks made off microphone.]

Mr. ISSA. OK, I think if you look through the series of letters,

you will find that was certainly something we had expectation of

getting; we haven’t gotten. But I appreciate your willingness to

give it to us today and yield back.

Thank you, Chairman.

Ms. MCCARTHY. It is part of the rulemaking. That is public information and is in the docket.

Mr. JORDAN. I thank the Chair.

Ms. MCCARTHY. And it is on the Web site.

Mr. JORDAN. I just have one other question and will be happy to

yield back if the chairman has anything additional.

In your testimony, Ms. Rodgers, you indicated that the panels

work.

Ms. RODGERS. Yes.

Mr. JORDAN. The panels work and you feel like you have a good

relationship with Ms. McCarthy and anyone and everyone else that

you work with there. It is a process that makes sense and that has

been effective.

Ms. McCarthy, would you agree with Ms. Rodgers’ testimony,

what she said in her testimony, that these panels work and that

it is a good process?

Ms. MCCARTHY. Our relationship works very well. I would submit to you that we both are extremely concerned that EPA get appropriate information and feedback on small businesses and impacts to small businesses relative to those that we are regulating

through a rule, yes.

Mr. JORDAN. But to the specific question, the SBREFA panels

work? The process works.

Ms. MCCARTHY. It has worked very well, yes.

Mr. JORDAN. OK. Now, so I come back to what I asked you earlier. A rule of this magnitude, in light of the debate that took place

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in the U.S. Congress dealing with cap-and-trade, this issue that

has been front and center for the American people, a process that

you both indicate works, why didn’t you follow it for something,

again, of this magnitude, of this importance, with the debate the

way it is, with the concerns expressed by small business owners in

front of this committee today? Look, I understand hindsight is 20/

20 and all that, but if you had it to do over again would you have

convened a panel and went through the normal process?

Ms. MCCARTHY. Let me explain to you, if I——

Mr. JORDAN. Can you answer that question? If you had it to do

over again?

Ms. MCCARTHY. No, I would not. I would do it exactly the same

way.

Mr. JORDAN. OK.

Ms. MCCARTHY. And that is because these panels are designed

to address issues relative to a rulemaking that sets a standard or

establishes a requirement on a business sector, a small business

entity. They are asked specific questions like what is the reporting

and recordkeeping and compliance; what are the Federal rules that

might duplicate it; what alternatives do you have to the proposed

rule? We did not enjoin a panel because the rules that you are talking about did not immediately or directly regulate small business.

Mr. JORDAN. Wait a minute.

Ms. MCCARTHY. So there was no way in which we could apply

this rule——

Mr. JORDAN. You just said you had a great relationship. Ms. Rodgers is an intelligent lady. The folks who work for her are intelligent people. They suggested that you do it. So you may not have

thought it was absolutely necessary, but why not do it, again, when

they are saying this makes sense to do and business owners were

saying it makes sense to do? We have heard testimony of the concerns they have. Why not just do it? Why not be safe rather than

sorry?

Ms. MCCARTHY. On the tailoring rule we did a voluntary program where we had an outreach with 23 SERs. We had a panel;

we got their input. What we are not agreeing to is that this rule,

and there was a requirement for panels to be developed when we

have a rule like the endangerment finding that isn’t directly regulating small businesses like the tailoring rule——

Mr. JORDAN. Ms. Rodgers——

Ms. MCCARTHY [continuing]. That is de-regulating small businesses. It doesn’t mean we don’t appreciate the input of small business, and we try to get that input into the process.

Mr. JORDAN. Ms. Rodgers, you understood, when you suggested

the panel, that the EPA could in fact take the route that they took?

You understood that? You didn’t think it would happen because it

was out of the norm.

Ms. RODGERS. Exactly.

Mr. JORDAN. Yet you still said this was important to have this

panel. Give me why you were so focused and why you have expressed comments after the fact why it was important to have that

panel.

Ms. RODGERS. I would be happy to. One of the reasons the

endangerment finding, no, did not directly regulate small busiVerDate 11-MAY-2000 11:50 Sep 14, 2011 Jkt 000000 PO 00000 Frm 00148 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\67721.TXT KATIE PsN: KATIE
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nesses; however, it did set the greenhouse gas regulations in motion. The foreseeable impacts of this rule on small businesses certainly were there. The next rule to come about was the vehicle

emissions rule, of course. They were regulating large automobile

manufacturers.

However, just by beginning that process and starting to regulate

greenhouse gases under the Clean Air Act on one part of the Clean

Air Act automatically triggered the greenhouse gas regulation or

regulating greenhouse gases under the entire Clean Air Act, thereby subjecting small businesses to permitting requirements under

the Clean Air Act.

Mr. JORDAN. So you could foresee what was coming. Why couldn’t

they?

Ms. RODGERS. I can’t answer that question, but what I can say

is by not——

Mr. JORDAN. And it was clear. Your team who suggested this,

was there any disagreement? Was it unanimous, we need to move

with this panel?

Ms. RODGERS. It was unanimous.

Mr. JORDAN. So it was strong. You had to do this.

Ms. RODGERS. Yes.

Mr. JORDAN. You could foresee what was coming.

Ms. RODGERS. Yes, we could.

Mr. JORDAN. And you have proved right, based on the testimony

we got from the first panel.

Ms. RODGERS. We think we have, yes.

Mr. JORDAN. Yes. And yet they just couldn’t see it.

Ms. RODGERS. Unfortunately, no.

Mr. JORDAN. OK.

I see we have no further questions for the panel. I want to thank

you both for attending. Again, I want to apologize for the schedule.

We look forward to visiting again.

We are adjourned.

[Whereupon, at 5:05 p.m., the subcommittee was adjourned.]

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