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THE OBAMA ADMINISTRATION’S REGULATORY 

WAR ON JOBS, THE ECONOMY, AND AMERICA’S GLOBAL COMPETITIVENESS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

FEBRUARY 28, 2013 

Serial No. 113–38 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

LAMAR SMITH, Texas 

STEVE CHABOT, Ohio 

SPENCER BACHUS, Alabama 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

MARK AMODEI, Nevada 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

RON DeSANTIS, FLORIDA 

KEITH ROTHFUS, Pennsylvania 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

SPENCER BACHUS, Alabama, Chairman 

BLAKE FARENTHOLD, Texas, Vice-Chairman 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

KEITH ROTHFUS, Pennsylvania 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

DANIEL FLORES, Chief Counsel 

JAMES PARK, Minority Counsel 
(III) 

C O N T E N T S 

FEBRUARY 28, 2013 

Page 

OPENING STATEMENTS 

The Honorable Spencer Bachus, a Representative in Congress from the State 

of Alabama, and Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ........................................................................................ 1 

The Honorable Steve Cohen, a Representative in Congress from the State 

of Tennessee, and Ranking Member, Subcommittee on Regulatory Reform, 

Commercial and Antitrust Law .......................................................................... 3 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Committee of the Judiciary .................................. 5 

The Honorable Doug Collins, a Representative in Congress from the State 

of Georgia, and Member, Subcommittee on Regulatory Reform, Commercial 

and Antitrust Law ............................................................................................... 6 

The Honorable Darrell Issa, a Representative in Congress from the State 

of California, and Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ........................................................................................ 7 

WITNESSES 

Robert L. Glicksman, J.B. & Maurice C. Shapiro Professor of Environmental 

Law, The George Washington University School of Law 

Oral Testimony ..................................................................................................... 13 

Prepared Statement ............................................................................................. 16 

Drew Greenblatt, President and Owner, Marlin Steel Wire Products, LLC, 

on behalf of the National Association of Manufacturers 

Oral Testimony ..................................................................................................... 38 

Prepared Statement ............................................................................................. 40 

Robert K. James, Member of the Avon Lake City Council 

Oral Testimony ..................................................................................................... 53 

Prepared Statement ............................................................................................. 55 

Douglas Holtz-Eakin, President, American Action Forum 

Oral Testimony ..................................................................................................... 66 

Prepared Statement ............................................................................................. 68 

William L. Kovacs, Senior Vice President, Environment, Technology & Regulatory Affairs, U.S. Chamber of Commerce 

Oral Testimony ..................................................................................................... 78 

Prepared Statement ............................................................................................. 80 

Robert Weissman, President, Public Citizen 

Oral Testimony ..................................................................................................... 103 

Prepared Statement ............................................................................................. 105 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, and Ranking Member, Committee 

of the Judiciary .................................................................................................... 9 
Page

IV 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Spencer Bachus, a Representative in 

Congress from the State of Alabama, and Chairman, Subcommittee on 

Regulatory Reform, Commercial and Antitrust Law ........................................ 149 

Prepared Statement of the Honorable Steve Cohen, a Representative in Congress from the State of Tennessee, and Ranking Member, Subcommittee 

on Regulatory Reform, Commercial and Antitrust Law ................................... 150 

Prepared Statement of the Honorable Bob Goodlatte, a Representative in 

Congress from the State of Virginia, and Chairman, Committee of the 

Judiciary ............................................................................................................... 151 

Prepared Statement of the Honorable Doug Collins, a Representative in Congress from the State of Georgia, and Member, Subcommittee on Regulatory 

Reform, Commercial and Antitrust Law ............................................................ 153 

Prepared Statement of the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ................. 155 

Material submitted by the Honorable Hakeem Jeffries, a Representative in 

Congress from the State of New York, and Member, Subcommittee on 

Regulatory Reform, Commercial and Antitrust Law ........................................ 156 

Response to Questions for the Record from Robert L. Glicksman, J.B. & 

Maurice C. Shapiro Professor of Environmental Law, The George Washington University School of Law ......................................................................... 162 

Response to Questions for the Record from Drew Greenblatt, President and 

Owner, Marlin Steel Wire Products, LLC .......................................................... 166 

Response to Questions for the Record from Robert K. James, Member of 

the Avon Lake City Council ................................................................................ 169 

Response to Questions for the Record from Douglas Holtz-Eakin, President, 

American Action Forum ....................................................................................... 171 

Response to Questions for the Record from William L. Kovacs, Senior Vice 

President, Environment, Technology & Regulatory Affairs, U.S. Chamber 

of Commerce ......................................................................................................... 172 

Response to Questions for the Record from Robert Weissman, President, 

Public Citizen ....................................................................................................... 175 
(1) 

THE OBAMA ADMINISTRATION’S REGULATORY WAR ON JOBS, THE ECONOMY, AND 

AMERICA’S GLOBAL COMPETITIVENESS 

THURSDAY, FEBRUARY 28, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 9:01 a.m., in room 

2141, Rayburn House Office Building, the Honorable Spencer Bachus (Chairman of the Subcommittee) presiding. 

Present: Representatives Bachus, Goodlatte, Farenthold, Issa, 

Marino, Holding, Collins, Rothfus, Cohen, DelBene, Garcia, and 

Jeffries. 

Staff Present: (Majority) Daniel Huff, Chief Counsel; Ashley 

Lewis, Clerk; (Minority) James Park, Minority Counsel; and Susan 

Jensen-Lachmann, Counsel. 

Mr. BACHUS. The Subcommittee on Regulatory Reform, Commercial and Antitrust Law hearing will come to order. Without objection, the Chair is authorized to declare recesses of the Committee 

at any time. We are expecting some early votes, so we will try to 

get rolling. We welcome all our witnesses today and look forward 

to your testimony. Now we will go to opening statements, and the 

Chair recognizes himself for the purposes of an opening statement. 

This is the first of a series of hearings that this Subcommittee 

will hold on the Federal regulatory structure, its impacts, and potential regulatory reform. To be clear from the start, the argument 

is not that we don’t need any regulations at all. Reasonable rules 

provide clear rules of the road for businesses so they have some 

certainty and know what to expect, they provide safeguards for 

consumers and the general public, and they provide protection for 

the environment. But clear and reasonable rules of the road that 

provide certainty are not what we have gotten from this administration, and that has been a major contributing cause to the continuing underperformance of the U.S. economy. 

That is something that I have experienced with the oversight of 

the Dodd-Frank Act, but it cuts across every Federal agency. For 

example, in 2011 the President ordered regulatory agencies to consider cost and benefits and choose the least burdensome path. We 

applauded that statement. The order continued, and I quote, ‘‘The 
2 

regulatory process must be transparent and include public participation.’’ This sounded perfectly reasonable, and that is how it was 

reported. 

But the devil is in the details. It is at the implementation stage 

where the promises have failed to pan out, and it is there that a 

regulatory tax is imposed on jobs, the economy, and America’s global competitiveness. Only an expert would notice how the administration’s cost-benefit analysis has been skewed. For example, less 

than 0.01 of a percent of the claimed monetary benefits from the 

EPA’s rule to reduce mercury emissions actually come from reducing mercury. The rest arises from the so-called incidental benefit 

of reducing particulate matter that was not the principal target of 

the regulation because such particulate matter was already considered by EPA to be generally within acceptable limits. 

What does this translate to? In my district in Alabama, it is the 

difference between a concrete plant in Leeds, Alabama, employing 

hundreds of people, being able to comply with the new regulations 

or potentially being shut down because of the cost. 

Many of the new regulations fall most heavily on small businesses that are the job creators in our economy. If you are a larger 

company, you can probably financially afford to hire an army of 

compliance officers. But if you are a small business, you are already stretched thin, and every extra regulatory cost means you 

have less money to invest in your business and hire workers. I 

think that is something that I think Republicans and Democrats 

are in agreement on, and that is the burden on small businesses. 

Factory workers, anxious about the economy, need to know about 

recent findings that over the next 10 years regulations could shave 

industrial output from between 2.3 to 6 percent at a time when we 

need more growth and jobs. Americans still looking for work need 

to be aware that agencies ignore the burden of job displacement 

when calculating regulatory cost. Agencies simply assume displaced 

workers will find a new job quickly. But a recent study shows overwhelming evidence that even temporary job displacements cause 

significant long lasting declines in earnings. Of workers who lost 

long-tenured jobs from 2009 to 2011, 44 percent were still unemployed 3 years later. Fifty-four percent of those who did find jobs 

earned less. Older workers were hit hardest. 

Communities bear the impact, too. In Avon Lake, Ohio, a plant 

is shutting down because of the rising costs associated with EPA’s 

controversial utility MACT rule. Closures like this devastate families, neighborhoods, and the local tax base that schools and city 

governments depend on. We often think of regulatory tradeoffs affecting only businesses, but they affect individuals as well. If a regulation increases the price of a needed product without a corresponding benefit, it takes money away from a person that could 

be spent elsewhere that would have a greater health or safety benefit. This especially affects low-income Americans for whom money 

is already tight. 

This is another area which very provocative research is being 

done on the harmful effects of regulations on our most vulnerable 

citizens. During this series of hearings, we will examine the shortcomings and failures of the current regulatory system, with an eye 

to developing clearheaded, workable solutions. Federal agencies 
3 

need to do a better job—a much better job—of determining when 

regulation is needed and proposing smarter regulations when it is. 

And in forming regulations we actually do have to consider the consequences on jobs and the economy, because that is the foundation 

on which everything else rests. 

Finally, I want to close with this video of a statement made by 

Federal Reserve Chairman Ben Bernanke at a Humphrey-Hawkins 

hearing earlier this week. Please turn to our video monitor. I guess 

we need some sound, too. 

[Video shown.] 

Mr. BACHUS. Okay. Thank you. At this time I recognize the 

Ranking Member for his opening statement. 

Mr. COHEN. Thank you, Mr. Chairman. First, I would like to put 

that video back on and get to the part where Bernanke says the 

sequester could hurt the deficit more than it could help. That was 

coming up in just a minute, I think. 

Mr. BACHUS. Let me say this. In the hearing, I stated very clearly that Congress ought to come together. And Chairman Bernanke 

said we ought to come together and make long-term structural 

changes in our entitlement programs. And I think there is agreement on that across the aisle. And I have urged the Congress and 

the President to get to work. 

And we were all told that the sequester wasn’t going to happen, 

and we all know that that is just another promise that didn’t happen. So, you are absolutely right. That work should have started 

months ago. And we could actually raise the retirement age for Social Security in the future by 2 months and save more money than 

this sequester will save, and it will be a long-term structural 

change and less harmful for the economy. 

He also said that fee-for-services in our medical system was driving up costs, and that addressing that, reforming our health care 

system and doing away with fee-for-services and having the patient 

invest more in their own health care would change the entire dynamics of the debt. 

Mr. COHEN. Thank you. I appreciate that. 

Mr. ISSA. Thank you for yielding all that time to the Chairman, 

too. 

Mr. BACHUS. You have 5 minutes, Mr. Cohen. 

Mr. COHEN. Thank you, Mr. Chairman. 

Mr. BACHUS. And for Mr. Issa, I think he only has a minute left. 

Mr. COHEN. Thank you. 

On a typical day, and today is a typical day, I get up, brush my 

teeth, shower, get bagel and bacon, coffee, get dressed, go to my car 

parked outside, and drive into the Capitol. And then I am in the 

office, and I work, I come to hearings such as this, I go to the 

House floor, I meet with constituents, and, you know, grab a bite 

to eat here and there, finish the day with dinner, and that is it. 

At the end of each week, when we are in session, I will fly back 

and forth from Memphis to Washington. And I do all this without 

thinking twice about whether any of these activities are going to 

be harmful to my health or whether there is going to be a risk of 

harm whatsoever. And that is because we take these activities for 

granted in our country because we have a strong regulatory system 
4 

that allows us to go on with our lives and not have to be at risk 

so many times. 

We strive to protect our environment, our health, and ensure the 

safety of our workplaces, our public spaces, our consumer products, 

cars, airplanes, among other things. And we are concerned about 

our most vulnerable citizens who might get black lung disease if 

we didn’t have regulations in mining, health care workers who are 

exposed to too much radiation, asbestos exposure to construction 

workers, and other of our most vulnerable citizens who are put in 

jobs that are often the least desired and the most at risk for health 

hazards. But regulations have helped over those years. Sinclair 

Lewis would think, I think, that regulations are good for our most 

vulnerable citizens, and so do most people, I think. 

The regulatory debates in this Subcommittee which we have had 

over the last couple of years have focused almost exclusively on the 

costs of implementing regulations, and there are costs indeed. It is 

often left to those of us on this side of the aisle to defend regulations and the benefits that they have, and the benefits consistently 

outweigh the costs of regulations. In addition to ignoring the net 

benefits of regulations, those who focus exclusively on the costs 

tend to ignore the greater costs of regulatory failure. Mr. 

Glicksman of GW Law School and Mr. Weissman of Public Citizen 

will discuss in greater detail regulatory failure, that that regulatory failure can be more costly for the economy and society than 

the existence or the creation of new regulations. 

Let’s not forget that it was the lack of adequate regulations that 

caused the Deepwater Horizon oil spill, still in litigation, still affecting the Gulf Coast, or the mine disasters that we recently experienced. The mortgage foreclosure crisis was caused by the lack of 

adequate regulations and enforcement thereof. And the 2008 financial crisis and the great recession that followed and the sequester 

that we see today that does involve different issues that we have 

discussed. 

In short, there is a far greater human and economic cost to stopping agencies from regulating than there is in allowing new regulations to take effect. I will leave the rest of our discussion to our 

panel of witnesses and our question time, but I would like to ask 

this of our good Chairman. We ought to be able to have serious, 

substantive, and nuanced discussion about what problems might 

exist in the Federal regulatory system—nothing is perfect, and indeed it isn’t—and what Congress ought to do to address the problems. But to have hearings with inflammatory titles like ‘‘The 

Obama Administration’s Regulatory War on Jobs, the Economy and 

America’s Global Competitiveness,’’ those such inflammatory and 

partisan titles take us away from discussions of issues and make 

us have to defend our President and make this a fight back and 

forth over politics and verbiage. And that is not the way to resolve 

regulations and good policy. It makes it difficult for all of us to 

have a debate in a proper atmosphere. 

We will, as we did the last Congress, unfortunately, end up with 

a battle of talking points. So if we want to work on this, I would 

suggest that. I am afraid if I got on the floor and said something 

about war there would be an entire CNN episode about it, so we 

won’t do that. And we know from the song, war, what is it good 
5 

for? Absolutely nothing. So I hope we can move forward and do better, and I yield back the balance of my time to Mr. Issa or whoever. 

Mr. BACHUS. Thank you, Mr. Cohen. 

I would now like to recognize the full Committee Chairman, Mr. 

Bob Goodlatte of Virginia, for his opening statement. 

Mr. GOODLATTE. Thank you, Mr. Chairman. And thank you for 

holding this important hearing. 

Since the November 2012 election, the Obama administration 

has moved into overdrive in its regulatory war on jobs, the economy, and America’s global competitiveness. Let me be clear, Congress cannot sit silent while America’s economic growth is imperiled. One of my top priorities in this Congress will be to do everything possible to reduce the regulatory burdens that our Nation’s 

small businesses are facing, to get more Americans back to work, 

and to help grow our economy. 

A study last summer by the Organization for Economic Cooperation and Development revealed that after measuring countries by 

the number of regulations they have, it is now easier to start a 

business in Slovenia, Estonia, and Hungary, than in America. According to former CBO Director Douglas Holtz-Eakin, countries 

from England to South Korea to Portugal have already undertaken 

regulatory reforms. England has been particularly aggressive, 

adopting a one-in, two-out rule for new regulations, which requires 

policymakers introducing a new regulation to rescind or modify an 

existing regulation that costs double so that the total regulatory 

burden is actually reduced. The governments of our international 

competitors are not merely paying lip service to lightening the regulatory load, they are taking meaningful actions. 

We seem to be moving in the opposite direction. Last year, the 

total U.S. paperwork burden grew by more than 355 million hours, 

or 4 percent. A 2012 report by the NERA Economic Consultants on 

the regulations affecting the manufacturing sector found that exports in 2012 might have been as much as 17 percent lower than 

they would have been without the estimated regulatory burden. 

Such loss in output directly represents lost jobs and economic opportunities. 

Instead of the regulatory burden diminishing to keep American 

businesses competitive and hiring, experts expect the pace of regulation to increase in President Obama’s second term. Just prior to 

Election Day, the National Journal reported that, quote, ‘‘Federal 

agencies are sitting on a pile of major health, environmental, and 

financial regulations that lobbyists, congressional staffers, and 

former administration officials say are being held back to avoid 

providing ammunition to Mitt Romney and other Republican critics.’’ 

Now the floodgates are open. For example, the Patient Protection 

and Affordable Care Act and the Dodd-Frank Wall Street Reform 

and Consumer Protection Act created a host of regulatory obligations which agencies have yet to fulfill. Similarly, the American Action Forum identified $123 billion in possible regulations in the administration’s 2012 Unified Regulatory Agenda that would also add 

more than 13 million hours of paperwork burden. It is no wonder 

that the administration delayed releasing this agenda and its plans 
6 

for 128 new economically significant regulations until after the 

election. 

What is most striking, perhaps, is this administration’s insensitivity to the negative effects overregulation has on vulnerable 

groups. Overregulation costs American jobs. And a new study 

shows agencies’ cost-benefit analyses fail to consider that over 75 

percent of older workers who lose their jobs remain unemployed 3 

years later, and those who can find work frequently must accept 

as much as 20 percent less in pay. 

Overregulation also disproportionately burdens low-income 

households. Because of the law of diminishing returns, new regulations require spending increasingly more money to mitigate increasingly smaller risks. Many of these costs are passed down to 

consumers. New research from the Mercatus Center shows low-income households would be much better off spending this money 

mitigating more immediate personal risks, for example, by using 

money that should rightfully be theirs to afford rents in safer 

neighborhoods. 

In light of these real trade-offs, I am deeply concerned that some 

pro-regulation advocates are calling for an executive order to rescind requirements that there be cost-benefit analysis of significant 

regulations. I hope that stories from Main Street about the negative impacts plant closures have on lives and communities will help 

sensitize regulators and their allies to the very real suffering that 

even well-meaning regulatory advocacy can impose. 

However, we cannot rely on hope to turn the tide of excessive 

regulation. I am committed to restoring accountability and providing relief from excessive regulation to our Nation’s small businesses and job creators who need it most. Last Congress, the Committee reported a number of important and far-reaching bills to reform overregulation, ease burden on jobs and the American economy, and restore America’s competitiveness. The House passed 

them all, but the Democrat-led Senate refused to act, and President 

Obama threatened to veto them. 

The overreach of Obama administration regulations is one of the 

chief reasons the economy has failed adequately to recover and 

produce new jobs throughout the Obama administration. Congress 

and the President must act to take a different direction that will 

allow America’s jobs, economy, and competitiveness to be restored. 

The House will do its part, and for the sake of our economic future, 

I call on the Senate and the Obama administration to do theirs. 

I thank the Chairman. I yield back. 

Mr. BACHUS. Thank you, Chairman Goodlatte. 

I would now like to recognize Mr. Doug Collins of Georgia for his 

opening statement. 

Mr. COLLINS. Thank you, Mr. Chairman. I appreciate you convening a hearing on this important topic. I think this is one of the 

things that is vital to our country right now, and something we 

ought to look at to get us on a path to prosperity again. 

It is an unfortunate misconception to paint the regulatory arena 

as being disconnected from the everyday lives of Americans. Regulations affect the air we breathe, the type of car we drive, and the 

food we feed our pets. Unfortunately, the Obama administration 

has created a web of regulations that are too complex, too expen-
7 

sive, and completely ineffective. Economic growth cannot occur if 

job creators continue to be crushed by the fatal grip of overregulation. 

In the upcoming days I plan to introduce the Sunshine and Regulatory Decree Settlement Act of 2013. This legislation ends the 

abuse of consent decrees and settlements to require more regulations. Regulators often use consent decrees and settlements to secretly establish new rules outside the regular rulemaking procedures without transparency and without public participation. This 

sue-and-settle approach has enabled agencies to impose higher 

costs with no accountability to those directly impacted. 

One of the issues that has already been said today, and I think 

when we get into this there is a problem when we paint the fact 

that there is either one extreme or the other, that we need no regulation or we need overregulation. I think the problem we have got 

here is most people just want to get up, start their business or go 

to their workplaces, and be safe and do the things that need to be 

done. Government has a role, but government’s role is not at the 

expense of business. Government’s role is not at the expense of 

making the growth industry, as I had a constituent tell me yesterday, the only people we are hiring right now are people to do our 

regulatory reform, to make sure that we do the paperwork. That 

is not what this business was made to do. He wants to be able to 

expand his business in what he wants to be able to do in his field, 

not having to comply with overburdensome regulations that do not 

help his business. 

I look forward to this hearing from the witnesses on this issue 

and many others. I thank the Chairman, and yield back the balance of my time. 

Mr. BACHUS. I thank you, Mr. Collins. 

I would now like to recognize the Chairman of the Government 

Oversight and Investigations Committee, and Member of this Subcommittee, Mr. Darrell Issa of California, for his opening statement. 

Mr. ISSA. Thank you, Mr. Chairman. I would ask unanimous consent I have a full 5 minutes, in spite of my earlier outbreak. 

Mr. BACHUS. All right. 

Mr. ISSA. The Ranking Member, Mr. Cohen, talked about getting 

on an airplane without fear. Steve and I have been friends since 

he arrived here, and I know that when he arrived here several 

years ago he also got on that airplane without fear. We are not 

talking today about regulations in memoriam. We are not talking 

about decades and decades. We are not talking about reversing 

ones which have made our air and our water and our transportation safer. 

What we are talking about here today, and what I know that the 

witnesses will be speaking of, is the growth of new regulations in 

a nanny state that is attempting to regulate every aspect without 

concern for the cost. Our Committee pushed hard and continues to 

push hard for cost-benefit. 

Now, Mr. Greenblatt, I note, has a combination of stamped and 

probably multi-slide and every other machine it took to create that 

part in front of him. And on top of that, it has a plating. When I 

began work in my industry in Cleveland, Ohio, we still had chro-
8 

mium and other metals that were being dumped into the Cuyahoga 

River, getting into Lake Erie and getting into our drinking water. 

Again, throughout the years of the Clean Air and Clean Water Act, 

we have addressed actual health hazards, manufacturers taking 

their leftovers and putting them on the backs of American people 

trying simply to drink water and breathe air. 

But those days in fact have been a success. And rather than saying that it has been a success and making incremental changes 

closely analyzed to figure out whether or not it actually adds to life 

expectancy and quality of life, we on this side of the dais and those 

down Pennsylvania Avenue and beyond have an assumption that 

if they are not doing something and creating new rules and laws, 

they are obviously not doing their job. 

The fact is that the Ranking Member, as is often does, used talking points, and he talked about lack of regulation causing Deepwater Horizon. Nothing could be further from the truth. Failure to 

comply with existing regulations by the Federal Government was 

a major factor. On the very day that the Deepwater Horizon blew 

up, two individuals from Mineral Management Service came 

aboard that facility. In violation of any form of common sense, 

where they were required to be two separate people conducting investigations designed to be check and balance of what they saw, it 

was a father-son team. They came, they drank coffee, and they left. 

The truth is all of the materials and all of the information was 

honestly given to Mineral Management as they asked and they did 

not see a problem. Likewise, as the euphoria of debt far beyond 

that which people could pay, even in my original hometown of 

Cleveland, Ohio, caused people to have no possibility of paying 

their mortgages unless their home continued to rise in value and 

they could refinance, as that happened, the Federal Reserve, the 

treasurer, and others continued to talk about—and the President 

of the United States at that time, George W. Bush—continued to 

talk about the benefit of home ownership. 

So let us not rewrite history here today and say that all government needs to do is have more regulations. All government needs 

to do is do what it is required to do and do it well. Then regulations on a limited basis with a cost-benefit and a degree of transparency can be considered. 

In closing, I might say here today that there are three kinds of 

taxes. There are taxes in which we take money. And I would share 

with the Ranking Member a concern that we only take 60 cents for 

every dollar we spend, clearly unsustainable, and we need to address that. There are taxes in which we ask people to do things at 

their expense—actually order them do them at their expense—and 

then don’t consider it a tax. As a matter of fact, it is only tax deductible to the extent that you didn’t make a profit and therefore 

do not have to pay taxes on it. 

Last but not least, there is the new tax in the Obama administration. That is that any time government does not provide more 

goods and services with somebody else’s money you must be taxing 

people’s ability to live their lives. The sequestration today is being 

talked about as though it is an onerous tax on every American if 

somehow 2.4 percent of spending were not to happen. For example, 

the Ranking Member, when he talks about going back and forth on 
9 

that airplane, he has been doing it since the TSA had about 15,000 

employees. Today they have 68,000 employees. There is no question 

as to why TSA stands for thousands standing around. When you 

triple the amount of employees for the same amount of flying personnel, you are inevitably going to have built in inefficiencies. 

So today our job is to listen to people who have dealt with these 

new regulations, listen to them honestly, and, Mr. Cohen, ask the 

question was that particular regulation necessary? Was that regulatory assertion necessary? Not should we have had the Clean Air 

and Clean Water Act, something that people on both sides of the 

dais agree with. And I yield back. 

Mr. BACHUS. Thank you. 

I now recognize our Ranking Member, Mr. Steve Cohen, for the 

purposes of introducing an opening statement. 

Mr. COHEN. Thank you. Thank you, Mr. Chairman. Mr. Chairman, the Ranking Member of the full Committee, Mr. Conyers, has 

a statement. And while you were kind enough to allow me to read 

it, I won’t do so. 

[The prepared statement of Mr. Conyers follows:] 

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, Ranking Member, Committee on 

the Judiciary, and Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law 

Today’s hearing title reflects the 3 principal canards of the Majority’s anti-regulatory agenda and I want to address each of these in detail. 

Let’s first begin with the Majority’s claim that regulations inhibit job creation. 

It is pretty incredible that the Majority continues to make this claim in light of 

the fact that there is absolutely no credible evidence establishing the fact that regulations have any substantive impact on job creation. 

And, that is not just me saying this. Bruce Bartlett, a senior policy analyst in the 

Reagan and George H.W. Bush Administrations, has explained: 

Republicans have a problem. People are increasingly concerned about unemployment, but Republicans have nothing to offer them. The G.O.P. opposes additional government spending for jobs programs and, in fact, favors big cuts in 

spending that would be likely to lead to further layoffs at all levels of 

government[.] 

These constraints have led Republicans to embrace the idea that government 

regulation is the principal factor holding back employment. They assert that 

Barack Obama has unleashed a tidal wave of new regulations, which has created uncertainty among businesses and prevents them from investing and hiring. 

He then concludes: 

No hard evidence is offered for this claim; it is simply asserted as self-evident 

and repeated endlessly throughout the conservative echo chamber. 

Susan Dudley, who headed the Office of Information and Regulatory Affairs during the administration of George W. Bush, has been quoted as saying that it is 

‘‘hard to know what the real impacts of regulation are.’’ She also stated that she 

was unaware of any ‘‘empirically sound way’’ to assess the impact that proposed 

rules have on jobs. 

And, during one of the many hearings held on this issue in the last Congress, the 

Majority’s own witness clearly debunked the myth that regulations stymie job creation. 

Christopher DeMuth, with the American Enterprise Institute (a conservative 

think tank), stated in his prepared testimony that the ‘‘focus on jobs . . . can lead 
10 

to confusion in regulatory debates’’ and that ‘‘the employment effects of regulation, 

while important, are indeterminate.’’ 

Another unsubstantiated claim that the Majority makes in support of its anti-regulatory agenda is that ‘‘regulatory uncertainty is hurting the business community’’ 

and makes American businesses less competitive in the global marketplace. 

Once again, Bruce Bartlett, the senior economic official from the Reagan and 

Bush Administrations, rejects this false claim: 

[R]egulatory uncertainty is a canard invented by Republicans that allows them 

to use current economic problems to pursue an agenda supported by the business community year in and year out. In other words, it is a simple case of political opportunism, not a serious effort to deal with high unemployment. 

So make no mistake, today’s hearing is yet another example of that political opportunism recognized by Mr. Bartlett. 

Perhaps the biggest canard in the Majority’s arguments for so-called regulatory reform is the purported damaging impact of regulations on the Nation’s economy. 

Throughout the previous Congress, the Majority cited a deeply flawed study that 

estimated regulations had a $1.75 trillion cost of regulations. 

This figure is utterly unreliable and meaningless. And, again, don’t take my word 

for this. 

The nonpartisan Congressional Research Service conducted an extensive examination of the study and found much of its methodology to be flawed. 

Moreover, CRS noted that the study’s authors themselves acknowledged that their 

analysis was ‘‘not meant to be a decision-making tool for lawmakers or Federal regulatory agencies to use in choosing the ‘right’ level of regulation.’’ 

At the hearing the Subcommittee held on this issue last September, Professor 

Lisa Heinzerling testified about her well-researched academic analysis of this study 

and its numerous methodological flaws. 

The Majority’s focus on regulatory costs also completely and blatantly ignore the overwhelming net benefits of regulations. 

According to the Office of Management and Budget, the net benefits of regulations 

through the third fiscal year of the Obama Administration exceeded $91 billion, 

which is 25 times more than the net benefits during the first three years of the George 

W. Bush Administration. 

OMB also reports that for fiscal year 2010, federal regulations cost between $6.5 

billion and $12.5 billion, but generated between $18.8 billion and $86.1 billion in 

benefits. 

Yet another concern that I have about this hearing is that it is the 17th 

time that the Committee has considered what is essentially the same topic: 

federal agencies and rulemaking. 

I know regulations play a major role in ensuring the safety of the food we eat, 

the cars we drive, the air we breathe, and the medicine we consume. 

And that the Nation’s Great Recession was the result of too little, not too much 

regulation. 

Major financial distress in American history has often been triggered by a regulatory failure of some type. The Great Depression largely resulted from the failure 

of severely undercapitalized banks that engaged in imprudent lending practices and 

other speculative activities. 

The current Great Recession was largely fueled by an unregulated home mortgage 

industry and securitization market. 

But come on now. During the 112th Congress, this Committee did not hold a single hearing on: 

• the ongoing foreclosure crisis and its crippling effect on the Nation’s ability 

to recover its financial stability as well as that of millions of Americans in 

communities across the Nation; 

• the nearly lifelong peonage that millions of young Americans must endure to 

repay private student loan debt, that even bankruptcy will not alleviate; and 

• the extremely deleterious effects of mandatory minimums and the resultant 

overincarceration particularly has on African Americans in our Nation. 
11 

I could go on and on listing the critical issues that this Committee should consider. 

Finally, if we were really serious about creating jobs, then we should be focusing 

on those measures that will actually result in creating jobs. 

Just over a year ago, President Obama addressed a joint session of Congress at 

which he presented his American Jobs Act, a comprehensive bill that would have: 

• cut payroll taxes for qualifying employers, 

• fund a work program to provide employment opportunities for low-income 

youths and adults; 

• fund various infrastructure construction projects, including the modernization 

of public schools; and 

• start a program to rehabilitate and refurbishing hundreds of thousands of 

foreclosed homes and businesses. 

Unfortunately, Congress chose to ignore this worthy initiative. 

As many of you know, I have a measure—H.R. 4277, the ‘‘Humphrey-Hawkins 

21st Century Full Employment and Training Act’’—which aims to provide a job to 

any American who seeks work. 

My bill would create a funding mechanism to pay for job creation and training 

programs. 

These jobs would be located in the public sector, community not-for-profit organizations, and small businesses that provide community benefits. 

But, like the President’s proposal, my legislation did not receive any consideration 

during the last Congress, which is unfortunate because both of these measures 

would have, in fact, created jobs and helped our Nation’s economic recovery. 

It’s time we legislate based on facts, not rhetoric. Unfortunately, I fear today’s 

hearing will not enable us to accomplish that goal. 

Mr. COHEN. But I will mention that what the statement contains 

therein, which I am going to offer to the Committee, is three basic 

principles. First, that the majority’s claim that regulations inhibit 

job creation is not appropriate and correct. And he uses as his supportive individuals Bruce Bartlett, the senior policy analyst in the 

Reagan and George H.W. Bush administration, who concluded in a 

statement, no hard evidence is offered for the claim that regulations cost jobs, it is simply asserted as self-evident and repeated 

endlessly throughout the conservative echo chamber. He also cites 

Susan Dudley, who was the head of OIRA during the administration of George W. Bush. And she says it is hard to know what the 

real impacts of regulations are unaware of any empirical, sound 

way to assess the impact that proposed rules have on jobs. 

He also makes a point that this Committee is now on its 17th 

hearing on basically the same subject and that the Committee 

seems to sometimes forget the positive facts of regulation. According to the Office of Management and Budget, the net benefits of 

regulations through the third fiscal year of the Obama administration exceeded $91 billion, 25 times more than the net benefits during the first 3 years of the George W. Bush administration. OMB 

also reported that for fiscal year 2010, Federal regulations cost between $6.5 billion and $12.5 billion but generated between $18.8 

billion and $86.1 billion in benefits. That is the Office of Management and Budget. There is other salient information that I will 

submit as part of the record, and hope that they will be perused 

and absorbed. Thank you, Mr. Chairman. 
12 

Mr. BACHUS. Thank you, Mr. Cohen. And I want to commend you 

as an Alabamian on your active participation in our civil rights pilgrimage. As you know, Alabama was kind of the epicenter of the 

civil rights struggle. 

We have a very distinguished panel today, and I will begin by 

first introducing our witnesses. 

Professor Robert Glicksman, welcome. 

Professor Glicksman has published widely on the subject of environmental and administrative law. Before coming to George Washington University in 2009, he taught at the University of Kansas 

School of Law, where he was the Robert W. Wagstaff Distinguished 

Professor of Law. He is a graduate of Cornell School of Law. And 

Professor Glicksman worked in private practice at a firm in Washington, D.C., where he focused on environmental, energy, and administrative law issues. Professor Glicksman joined the Center for 

Progressive Reform in 2002 and has sat on its board of directors 

since 2008. 

Our next witness, Mr. Drew Greenblatt. Mr. Greenblatt is the 

President and CEO of Marlin Steel in Baltimore, Maryland. It is 

one of the fastest growing companies in the United States. Marlin 

Steel exports engineering baskets and custom sheet metal fabrications to 36 countries around the world. Mr. Greenblatt is a leading 

voice for small business manufacturing, as well as taxation, regulation, trade policy, and economic growth. He serves as an executive 

board member of the National Association of Manufacturers and as 

Chairman of the board of the Regional Manufacturing Institute. In 

addition, Mr. Greenblatt serves on the Maryland Commission on 

Manufacturing Competitiveness and on the Governor’s International Advisory Council. He received his bachelor’s degree from 

Dickinson College and an MBA from Tulane University. 

Welcome. 

Mr. GREENBLATT. Thank you. 

Mr. BACHUS. Mr. Rob James is Chairman of the Public Service 

Committee on the Avon Lake City Council in Ohio, a town which 

I named in my opening statement. From 2006 to 2012, he served 

as the assistant attorney general for the Ohio Attorney General’s 

office. He clerked in the Tenth District Court of Appeals from 2005 

to 2006. He received an MBA in diplomacy and foreign affairs from 

Miami University, and a J.D. From Catholic University Columbus 

School of Law. 

Welcome, Mr. James. 

Mr. Douglas Holtz-Eakin is President of the American Action 

Forum and commissioner on the congressionally chartered Financial Crisis Inquiry Commission. He began his career at Columbia 

University and moved to Syracuse University, where he became 

trustee, professor of economics, Chairman of the Department of Economics, and associate director of the Center for Policy Research. 

In 1989, and from 2001, he served as chief economist of the President’s Council of Economic Advisers. Mr. Holtz-Eakin is a former 

director of the Congressional Budget Office and served as the economic policy director for the John McCain Presidential campaign. 

Mr. Holtz-Eakin serves on the board of the Tax Foundation, National Economists Club, and the Research Advisory Board of the 

Center for Economic Development. He received his B.A. In econom-
13 

ics and mathematics from Denison University, and a Ph.D. in economics from Princeton University. 

And have read several of your articles and books. And you are 

no stranger to Congress. And we welcome you back. 

Mr. William Kovacs provides the overall direction, strategy, and 

management for the Environmental, Technology and Regulatory 

Affairs Division at the U.S. Chamber of Commerce. Since joining 

the Chamber in March 1998, Mr. Kovacs has transformed a small 

division concentrating on a handful of issues and Committee meetings into one of the most significant in the organization. His division initiates and leads multidimensional national issue campaigns 

on energy legislation, complex environmental rulemaking, telecommunications reform, emerging technologies, and applying sound 

science to the Federal regulatory process. Mr. Kovacs previously 

served as chief counsel and staff director for the House Subcommittee on Transportation and Commerce. He earned his J.D. 

From Ohio State University School of Law and a bachelor of 

science degree from the University of Scranton magna cum laude. 

Mr. Rob Weissman is President of Public Citizen. Mr. Weissman 

works in the area of economics, health care, trade and 

globalization, intellectual property, and regulatory policy, and on 

issues relating to financial accountability and corporate responsibility. He has worked to lower pharmaceutical prices for AIDS victims and others in the developing world. Mr. Weissman has appeared on television and radio, and has been published and quoted 

in many newspapers. He earned his J.D. Magna cum laude from 

Harvard Law School and has led Public Citizen since 2009. Previously, he was the director of the nonprofit organization Essential 

Action, and edited the magazine Multinational Monitor, which 

tracks the activities of multinational corporations and reports on 

the global economy. 

And I am sure we will be hearing from you on many future occasions, too. So we welcome you to the Committee. 

We will now proceed under the 5-minute rule with questions. No, 

I am sorry, we will now have the opening statements from our witnesses, starting with Mr. Glicksman, Professor Glicksman. Mr. 

Frank one time had a hearing where he forgot to have the opening 

statements, and he started doing his questions and got about halfway through before he let the witnesses speak. 

Thank you, Mr. Glicksman. Professor. 

TESTIMONY OF ROBERT L. GLICKSMAN, J.B. & MAURICE C. 

SHAPIRO PROFESSOR OF ENVIRONMENTAL LAW, THE 

GEORGE WASHINGTON UNIVERSITY SCHOOL OF LAW 

Mr. GLICKSMAN. My name is Robert Glicksman. I teach at the 

George Washington University Law School, and I thank the Committee for asking me to speak today. My testimony makes several 

points about the impact of regulation on society and the likely effect of proposals such as those introduced in Congress in the past 

couple of years, which would dramatically alter the manner in 

which agencies are required to adopt regulations. My written testimony elaborates on each point, which I will summarize today. 

First, regulations often provide great benefits to the public interest, such as by protecting the health and safety of Americans from 
14 

pollution and other harms. As a necessary corollary, proposals that 

would indiscriminately block regulation would reduce or eliminate 

those benefits. In other words, even though those trying to slow 

down our regulatory system focus on the costs of regulation, they 

tend to ignore the very real costs that result from a failure to regulate. 

In the environmental area, once those costs have been incurred, 

it is typically disproportionately expensive to remedy the harms 

caused by inadequate regulation, and it may be impossible to do so. 

Some illnesses are not reversible, to say nothing of deaths. Even 

where illness is reversible, the pain, suffering, and reduced productivity that resulted before a regulatory fix took effect cannot be 

eliminated retroactively. So costs flow from decisions not to regulate, just as they do from decisions to regulate. 

Second, the existing Federal regulatory system is already process 

heavy. It is characterized by multiple regulatory obstacles and burdens that result from analytical duties that are at best duplicative 

and sometimes of little apparent value. The legislative proposals 

placed on the table in recent years would make this situation 

worse, not better. 

In addition, the notion that changes are needed to remove barriers to effective participation in regulatory processes for industries 

and other affected interests is hard to fathom. The Federal Administrative Procedure Act and related Federal laws already provide 

ample opportunities for such participation. Studies show that regulated entities dominate the aspects of the regulatory process that 

involve agency solicitation and public comment. 

Legislation is not needed to give regulated businesses even greater access to regulators than they already have or to improve the 

information base upon which agencies make regulatory choices. 

Rather, this kind of legislation would add to the regulatory thicket 

that already ensnares agencies, perhaps by design, and hinders the 

adoption of even the most needed and beneficial regulations. In addition, it is not hard to imagine the approval process under a bill 

such as the REINS Act from becoming a nakedly political exercise, 

reflecting the political power of special interests rather than a fair 

and informed evaluation of the pros and cons of regulation. Rulemaking needs to become less, not more politicized. 

Third, despite numerous claims to the contrary, there is little 

reason to believe that existing Federal regulations issued by agencies such as EPA are imposing disproportionate costs or inhibiting 

economic recovery. Studies alleging negative economic effects tend 

to both overestimate the costs of regulation and discount or completely ignore regulatory benefits. For one thing, these studies 

often rely on estimates of regulatory costs that were supplied by 

regulated entities before the regulations were adopted, at a time 

when they had significant incentives to overestimate these costs. 

For another, retrospective studies of regulations adopted by agencies such as OSHA and EPA often show that actual compliance 

costs turned out to be significantly lower than predicted before the 

regulations were adopted. 

Similarly, claims that the uncertainty created by regulation 

poses an obstacle to economic growth are not convincing. Even if 

they were, the legislative proposals being considered would in-
15 

crease, not decrease that uncertainty by dragging out the regulatory process. Some industries have recognized the ability of rapid 

regulatory decisions to create a climate of certainty that businesses 

prefer. The major auto manufacturers, for example, did so in supporting EPA and Department of Transportation efforts to increase 

the fuel efficiency of cars and trucks. 

Finally, if efforts to refashion the regulatory process proceed, 

they should be redirected. Congress should focus on ensuring that 

agencies have adequate resources to carry out the tasks assigned 

to them by statute. The proponents of change say they are concerned about agencies that take regulatory shortcuts. If so, they 

should be worried about forcing agencies to operate on shoestring 

budgets while heaping ever more burdensome procedural duties on 

them. 

Thank you. 

[The prepared statement of Mr. Glicksman follows:] 
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Mr. BACHUS. Thank you. 

Mr. Greenblatt? 

TESTIMONY OF DREW GREENBLATT, PRESIDENT AND OWNER, 

MARLIN STEEL WIRE PRODUCTS, LLC, ON BEHALF OF THE 

NATIONAL ASSOCIATION OF MANUFACTURERS 

Mr. GREENBLATT. Chairman Bachus, Ranking Member Cohen, 

thank you for inviting me today to testify—— 

Mr. BACHUS. I am not sure the microphone is on. Or just pull it 

right under you. Get it as close as you can there. 

Mr. GREENBLATT. Is this better? 

Mr. BACHUS. Better. 

Mr. GREENBLATT. Okay. Great. 

Mr. BACHUS. Much better. 

Mr. GREENBLATT. Thank for inviting me today to discuss regulation and its impact on manufacturing. My name is Drew 

Greenblatt. I am the owner of Marlin Steel. We are a manufacturer 

of sheet metal baskets, wire baskets. We make everything in the 

USA. We export to 36 countries. We make it in Baltimore City. 

Twenty percent of our employees are degreed mechanical engineers. We primarily use recycled steel. All of our steel comes from 

Indiana, Illinois, and Pennsylvania. 

When I bought the company, the company made $800,000 in 

sales, we had 18 employees. Now we have over 32 employees, and 

we are growing. We have grown 7 years in a row. I am on the 

board of the National Association of Manufacturers. I am an executive board member. We represent 12,000 factories throughout 

America, and both small and large factories. A total of 12 million 

people are represented by NAM. 

America is the world’s largest manufacturer. Eighteen percent of 

global manufacturing is done by America. More than China. And 

we support 17 million jobs. These are great jobs, high-paying jobs. 

The average wage of a manufacturer is $77,000. We want to coddle 

these jobs. We want these jobs to grow. Matter of fact, since 2009 

they have grown a half million jobs. 

However, we have had a setback. At the bottom of the recession 

we lost 2 million jobs. We need to have improved economic conditions and improved government policies so that we can grow these 

jobs to heights that we have never seen in the past. 

NAM has a growth agenda, four goals for manufacturing resurgence in America. Number one, we want to be the best place in the 

world to manufacture. Number two, we want to be the world’s best 

innovator. Number three, we need access to the global markets. We 

need to sell to the 95 percent of the world that doesn’t live in 

America. Number four, we have to have the best trained workforce 

in the world. 

One of our biggest challenges are poorly designed regulations. 

Duplicative paperwork causes a lot of heartburn and slows us down 

from our mission of growing, growing, growing, and hiring people. 

Let me give an example of what has happened in our government 

and with Marlin. We got a love letter from the Department of 

Treasury, and it was a $15,000 fine in 2010. Why? Because in 

2006, there was a 20-page form sent to me. I diligently signed it 
39 

in two places. However, in 2006 I missed one signature, and I got 

a $15,000 fine. 

So I had my smartest people trying to fight this. It was a lot of 

aggravation. It was a lot of anxiety. And it is a complete lack of 

mission-critical focus for a company that is trying to hire people in 

the inner city of Baltimore. 

Let me give you another example. We export. We make everything in Baltimore City using American steel. And we export to 36 

countries, including China, okay? This is a good thing for our country. However, it takes time to fill out all the paperwork to ship and 

export, which is a good thing. So we have to have very smart people filling out all kind of forms that doesn’t add any value. So, for 

example, it takes us 3 minutes for a NAFTA form and it is 20 minutes for a form that is non-NAFTA. That is a waste of our time and 

waste of our smartest people’s efforts. 

But it is not just Marlin. Seventy-four percent of manufacturers 

said unfavorable business climate caused by regulations and taxes 

is a primary challenge facing business. And this has gone up from 

62 percent. And this poll was taken in December. Seventy-six percent indicated that a pressing priority for the Obama administration and this Congress should be reducing the regulatory burden 

for the factories. 

A couple examples of the cost burden on us. It is about $14,000 

per employee. I assure you China doesn’t have these kinds of burdens on their factories. And for small factories, it is closer to 

$28,000 per factory—per employee at a factory. So NAM has five 

ideas on how we can improve the regulatory environment so that 

we could grow jobs and hire more people and get us out of the recession. 

Number one, we have to hold independent regulatory agencies 

accountable. We need agencies like the NLRB, the SEC, the Consumer Product Safety Commission to have control by the executive 

branch. Congress should confirm this authority to the President. 

Number two, we need to streamline regulations through 

sunsetting them. Recently, Representative Randy Hultgren of Illinois has the Sunset and Review Act of 2013. This would implement 

a mandatory retrospective review of regulations to remove conflicting and outdated laws. This is wonderful. We need this. 

Three, we have to increase sensitivity to small business. Small 

businesses are burdened more than the average company. 

Number four, we have to strengthen and codify sound regulatory 

principles. We have to do things based on science and math. 

Number five, we have to improve the institutions. We have to 

have these offices properly staffed and resourced. 

So in conclusion, Congressman Bachus, Ranking Member Cohen, 

and Members of the Subcommittee, thank you again for this opportunity to testify today. The President stated in his Executive Order 

13653 on improving regulations, and regulatory review and our 

regulatory system should promote economic growth, should promote innovation and competitiveness, and job creation. Manufacturers agree with the President, and we are committed to working 

toward policies that will restore common sense to our regulatory 

system. We hope this Subcommittee will hold the administration to 

its commitment in the executive order. The best way to ensure con-
40 

tinued economic growth and employment by enacting a comprehensive, consistent set of policies that allow manufacturers to compete 

in the global marketplace. Reforming our regulatory systems to 

prevent the continued piling on of unnecessary regulations is an 

immediate priority. 

[The prepared statement of Mr. Greenblatt follows:] 
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Mr. BACHUS. Thank you, Mr. Greenblatt. 

And, Mr. James, welcome to you. 

TESTIMONY OF ROBERT K. JAMES, 

MEMBER OF THE AVON LAKE CITY COUNCIL 

Mr. JAMES. I would like to thank Chairman Bachus, Ranking 

Member Cohen, and the other Members of the Subcommittee for 

inviting me to testify today. My name is Rob James, and I am a 

member of the City Council of Avon Lake, Ohio, where I represent 

the residents of Ward 1. Avon Lake is a beautiful community of 

over 23,000 residents on the shores of Lake Erie, approximately 20 

miles west of Cleveland. 

Although I am currently an attorney in private practice, I previously served as an assistant attorney general for the Ohio Attorney General, where I represented the State of Ohio and its agencies, including the Ohio EPA. My work as an assistant attorney 

general included enforcing the environmental laws and regulations, 

and ensuring that the natural resources of Ohio were protected. 

However, I am here today because I think it is important that Congress understands the impact of Federal regulation, and specifically Federal environmental regulation on local communities such 

as Avon Lake. 

Almost exactly a year ago, on February 29, 2012, GenOn Energy, 

Inc., announced that it would close the coal and fuel oil-fired electric generating plant in Avon Lake in 2015. The Avon Lake Generating Station is capable of generating 734 megawatts, providing 

baseload electric capacity and load-following capability to the grid, 

as well as essential peaking capacity and black start capability. 

This facility plays an important role in providing a reliable and affordable supply of electricity. 

The reasons behind this closure are clear. GenOn stated that the 

closure was a result of the rising costs associated with EPA’s regulations and the fact that the overwhelming costs associated with 

complying with the rules could not be recovered by continuing to 

operate the facility. In particular, GenOn cited the EPA Mercury 

and Air Toxic Standards rule, known as MATS, as the primary reason motivating the Avon Lake deactivation. 

On July 22, 2012, NRG Energy, Inc., and GenOn announced that 

they would combine the two companies, leaving NRG as the successor company. Despite the merger, NRG has publicly stated that 

the Avon Lake Generating Station remains as schedule to be deactivated in 2015. Although NRG has left open the possibility of reevaluating the projected deactivation of the facility, and there is 

the prospect that the small oil-fired boiler may remain operational, 

the unavoidable truth remains that the Avon Lake facility will be 

deactivated in 2015. 

While some may celebrate the closure of these types of facilities 

based on broader policy objectives, the loss of power plants as a 

consequence of Federal regulation has a very real impact on communities in which they are located. These are not just abstract 

costs. The families of my community will have to absorb these significant losses. 

The most immediate impact of the closure will be on the 80 people employed at the Avon Lake facility. These type of quality jobs 
54 

at the Avon Lake plant are increasingly hard to find in our country, let alone in Ohio and in the greater Cleveland area. But it is 

more about than just the jobs or the people employed at the plant. 

Instead, it is about the ripple effect that harms an entire community. In present dollars, closure of the Avon Lake generating facility will cost the city of Avon Lake $69,000 in income taxes and over 

$291,000 in property taxes each year. 

This loss of taxes does not just represent the loss of general revenue used to fund the city and its programs. Significantly, a sizable 

portion of the property taxes collected is used to fund Avon Lake 

paramedics and emergency medical services. The loss of $71,000 

annually from the EMS budget, which is the amount that would be 

lost from the closure, would reduce the EMS operating budget by 

half. Undoubtedly, this will have a direct impact on the health of 

Avon Lake residents. 

Even more concerning is the impact the closure will have on the 

Avon Lake School District and other educational institutions in 

Avon Lake. At present, Avon Lake schools collect $1.8 million in 

utility taxes alone, and another $1.5 million in real property taxes 

each year. This potential loss of $3.3 million each year would have 

an unimaginable effect on Avon Lake schools. Not only will the loss 

of revenue directly impact the ability of the schools to provide a 

high quality of education for all students, but many of the programs offered by the schools for students with the greatest needs 

will be lost. 

In addition, consumers in northeastern Ohio are likely to pay 

more for their electricity. Catholic Charities of Cleveland has previously testified to Congress that the loss of power plants would 

have a devastating effect on the people of Ohio and on our country, 

particularly the poor and elderly. 

As the Subcommittee continues to evaluate the extent and the 

impact of Federal regulation, I hope you will keep in mind communities like Avon Lake. While government regulation is appropriate 

in certain circumstances, the Federal Government must understand the consequences of its regulations on our communities. 

Places like Avon Lake need affordable and reliable electricity, a 

strong educational system, and opportunities for our economies to 

rebuild and grow. The U.S. economy is still struggling to recover, 

and northeastern Ohio is at the center of the struggle. We know 

that we can have clean air, good jobs, and reliable electricity, but 

only if policies are implemented based on sound analysis and with 

full consideration of the real costs of the choices made by regulators. 

Thank you again for the opportunity to testify today. 

[The prepared statement of Mr. James follows:] 
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Mr. BACHUS. Thank you, Mr. James. 

And now, Dr. Holtz-Eakin, we welcome you. And let you give 

your opening statement. 
66 

TESTIMONY OF DOUGLAS HOLTZ-EAKIN, PRESIDENT, 

AMERICAN ACTION FORUM 

Mr. HOLTZ-EAKIN. Chairman Bachus, thank you. Ranking Member Cohen, Members of the Committee, it is a privilege to be here 

today. I submitted a written testimony which is a very elaborate 

accounting of recent regulatory costs, both annually, cumulatively 

over the past several Congresses, those that can be attributed to 

major pieces of legislation such as the Affordable Care Act, the 

Dodd-Frank legislation, and attempted to put these in a global context and to identify particular impacts on small businesses. It is 

chock full of numbers, and I respect you too much to go through 

it all. 

Let me just say three things. Number one, as a starting point, 

these regulatory costs are quite significant. At the moment, there 

are 128 so-called economically significant regulations under consideration. We have seen nearly $300 billion in regulatory activity in 

2011, another $200 billion in 2012. Over the past 4 years, roughly 

$520 billion in regulatory costs. 

I would point out that these are on the same order of magnitude 

as the much ballyhooed fiscal cliff tax increase we saw at the beginning of the year, but often get much less attention. And their 

likely incidence, the people who will ultimately bear their costs, are 

much more focused on workers and the middle class than those increases would be. They are also having an increasing impact on 

U.S.’ standing in international competitiveness. And as Chairman 

Goodlatte mentioned in his remarks, the U.S. is lagging behind 

other countries in terms of broad-based attempts to look at the impact of the regulatory system on their economic performance. 

Britain got a lot of attention for its one-in, two-out approach, but 

countries as small as Portugal are looking at the impact of their 

regulatory approaches on economic performance. They have adopted something called the Simplex approach. The Organization for 

Economic Cooperation and Development has placed regulatory review at the top of its policy agenda. And I think all of this highlights the importance of thinking about this for the United States, 

where we have in recent years seen two executive orders from the 

President, which are laudable, but which are small by comparison 

and have not produced large changes in the regulatory burden. 

The second point I would make is that I believe it is indisputable 

that this is slowing the recovery from the very large recession that 

followed the financial crisis of 2008. It is straightforward textbook 

economics to recognize the impact of large tax increases on the 

pace of such recoveries. The regulatory burdens are of the same 

character. And as I mentioned, they are quite large, over $0.5 trillion dollars. 

Some of the pieces of legislation have had very specific and largescale impacts. The Affordable Care Act has a big regulatory burden, $35 billion in measured regulatory costs, something like $80 

million in hours of compliance. 

But it is also now recognized to have large impacts across the 

economy. The employer mandate to provide insurance is a real impediment to labor market performance. It is going to hit especially 

minimum wage workers, where employers will be obligated to layer 

on top of that existing compensation more in the way of health 
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compensation with no offset in cash wages. That is going to hurt 

hiring. We are already seeing a spate of companies reorganize the 

hours of work to make sure that people fall under the threshold for 

full-time workers, and thus create part-time employment instead of 

full-time employment. That is a cost by any measure. 

We have done a lot of research at the American Action Forum 

on the implications of the various mandates within the Affordable 

Care Act for greater benefits, the MOR rule, things like that, on 

the costs of insurance. And those insurance costs in an employersponsored system will be passed along as costs to the labor force, 

and thus impede hiring and expansion as well. So we have seen 

these kinds of impacts, and they are indeed slowing the recovery. 

The last point I would emphasize is that many of these costs are 

concentrated in disproportionate ways on smaller businesses. One 

of the outstanding features of the data that we have seen over the 

past several years is the diminished rate at which small businesses 

are created in the United States. It is also an empirical regularity 

that small-business creation is associated with job creation. It is 

new firms that create a lot of jobs. The diminished creation of 

small businesses is directly related with our poor job growth. 

In the testimony there is a table that looks, for example, at the 

Affordable Care Act rules on small businesses, from menu labeling, 

to vending machine labeling, to an enormous number of payment 

rules. All of these I think are having a big impact. And the DoddFrank rule does the same thing. We did some work on what the 

combination of the QRM, QM, and Basel III accords will do for 

mortgage origination in the United States. In normal circumstances, it will be down about 20 percent. That translates directly into smaller number of housing starts. And housing contractors are one of our most vibrant small businesses. 

So I am pleased to have the chance to be here today. I look forward to answering your questions, and would just raise the importance of these issues on our overall economic importance and 

growth. 

[The prepared statement of Mr. Holtz-Eakin follows:] 
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Mr. BACHUS. Thank you very much. 

And now, Mr. Kovacs, I welcome you and the Chamber to this 

hearing. 
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TESTIMONY OF WILLIAM L. KOVACS, SENIOR VICE PRESIDENT, ENVIRONMENT, TECHNOLOGY & REGULATORY AFFAIRS, U.S. CHAMBER OF COMMERCE 

Mr. KOVACS. Good morning, Chairman Bachus and Ranking 

Member Cohen and Members of the Committee. Thank you for inviting me here. I guess when Congressman Cohen was saying this 

is the 17th hearing, one of the things that was going through my 

mind is, I think this is my 17th year talking about some form of 

regulatory reform, and I guess it sort of feels like Groundhog Day. 

One of the things I wanted to do is maybe give a little bit of perspective without just going into this reg is bad or this reg—— 

Mr. BACHUS. Pull that just a little closer to you. 

Mr. KOVACS. Certainly. 

Mr. BACHUS. Thank you. 

Mr. KOVACS. Is that fine? 

Mr. BACHUS. That is great. 

Mr. KOVACS. You know, when I was preparing for the testimony, 

we sort of looked at the legislative history. This issue has been 

going on as to whether or not regulations harm jobs for almost 45 

years. Congress had, in the 1960’s, a very extensive debate at the 

beginnings of the Clean Air Act, and what was so fascinating about 

the debate is, if you looked at it, some of the Democrats at that 

time had some of the same issues as the Republicans have today. 

And what was interesting is—and we are talking the Bella Abzugs 

of the world and Jennings Randolphs—they recognized, the Congress recognized overwhelmingly that they needed to clean the air 

and the water. There were serious environmental problems and 

they had occur. But they also recognized that as part of that they 

were going to impose regulations to protect health and safety that 

were going to have adverse economic impacts on cities, industries, 

and people. And they came to a deal, which is something Congress 

could do in those days, and that is, they decided that they were 

going to give the agencies the authority to put the regulations in 

that would protect health and welfare. 

In exchange, Congress asked the agency, in particular EPA, to do 

what they call a continuing evaluation of potential job loss and 

shifts in employment. And why that was so important is because 

they knew they were putting these burdens on society. And when 

they were putting the burdens on, Congress needed to be able to 

monitor what was happening and what was happening to particular industries. 

And this is not something that, you know, we are now imagining. 

There were two Supreme Court cases, one written by Justice 

White, who was a liberal, and one by Scalia, who is a conservative, 

both recognizing the same principle: That this was where it acted. 

But what happened is, over the years, Congress forgot to do its 

oversight, so I thank you for doing more, and the agencies themselves forgot—they remembered to do the regulations, they remembered to say costs aren’t a problem, but they also forgot to do the 

continuing analysis which showed the impact on jobs, and that is 

really crucial. 

And so one of the things that, as the chamber was looking in 

this, we wanted to know what has happened in the system. And 

we did this study, we had hired it out to NERA, and we asked, 
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from 1997 forward what has the EPA done in terms of any kind 

of ananalysis on the effects of these regulations on employment? 

And one of the things we found is, out of the 58 regulations, they 

only looked at jobs 18 times, and out of the 18 times that they 

looked at jobs in some way, 16 of them were the wrong analysis. 

They used a partial versus an economy-wide analysis. But they 

never did the continuing analysis, and the difference between the 

RIA and the continuing is the RIA looks at a very specific industry 

and asks the question, what does it take to come into compliance, 

and that model will show job creation. 

On the other side of the issue, if you do an economy-wide, you 

see the costs that you are imposing on the industry flow through 

the economy. And I wanted to give you an idea of just the difference using only EPA statistics. 

If you did the Utility MACT using EPA’s data, just EPA’s data, 

EPA got 54,000 jobs created. That is what it would have taken for 

that industry to come into compliance. If you look at the added 

costs that flow through society, you come up with a 180,000 to 

215,000 job loss. And in some of the regs that are going to come 

out later this year, like ozone, for example, EPA refused to do even 

a regulatory analysis looking at impact, but we decided to do it, 

and it is 609,000 jobs. So these are big differences. 

The point that I am really trying to make as I wrap up my last 

38 seconds is, this is an institutional issue. Congress has made a 

deal. You passed the law. And where I say it is an institutional 

issue is, the agencies really at this point in time—I mean, you may 

have some control over their budget but it is getting to be less and 

less—but the agencies are really free to do what they want. And 

at some point, we really beg you, that the Congress needs to get 

involved in the process because it is a serious process. It does involve not just cost and benefit, that is very theoretical, but it does 

involve real people, real displaced workers, real communities. And 

when these regulations hit, they are not affecting what we would 

call computer model people. These regulations are affecting real 

people and displacing real people. Thank you very much. 

[The prepared statement of Mr. Kovacs follows:] 
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Mr. BACHUS. Thank you, Mr. Kovacs. 

And, Mr. Weissman. And we will get the microphone and we 

won’t start the time till we have got all that in place. 
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TESTIMONY OF ROBERT WEISSMAN, PRESIDENT, 

PUBLIC CITIZEN 

Mr. WEISSMAN. Want the rules of the road be fair for everybody. 

Thank you very much, Mr. Chairman, Mr. Cohen, Members of 

the Committee. I have three points today, and I will disclose out 

front that the third point has subpoints. So before you criticize my 

math. 

The first point is this: The regulatory system in this country 

makes us a stronger Nation, makes us healthier, makes our economy more secure, makes us fairer, makes our environment cleaner. 

It is a point that I think is lost in much of the regulatory policy 

debate that focuses on cost. Indeed, there is no small irony in the 

proponents of cost-benefit analysis, when it comes to regulation, 

talking about regulatory policy, but focussing exclusively on cost 

and ignoring altogether the benefits of the fair kind of analysis 

they suggest should be done. 

For example, if you look at the American Action Forum analysis 

on cost, costs are fairly calculated. The cost for 2012 regulations 

are on the order of $220 billion. The primary cost in that figure is 

$150 billion attributed to fuel efficiency standards, the CAFE 

standards that will take effect in 2017, also to just relying on an 

EPA analysis. They neglect, however, to mention the benefits. The 

benefits are far greater than the costs. And these are not abstract 

benefits. They are not based on health impacts. They are primarily 

based just on savings at the gas pump. So, in the model year 2025, consumers will pay $1,800 additional for an automobile, but they will save between $5,700 and $7,400 

per automobile. In fact, if you look at the CAFE standards that 

started in 2012 and the new ones that will come into place in 2017, 

the overall net benefit to the United States is $1.7 trillion—trillion 

with a ‘‘t.’’ That is indeed one of the most efficient regulations we 

could imagine. It will have huge benefits for small business and 

massively increase global competitiveness for American business. 

Second point. Too much of the debate about regulation, jobs and 

the economy ignores the cause of our current jobs crisis. The housing bubble, the financial bubble, financial crash, great recession, 

ongoing stagnation are traceable in very large measure to regulatory failure. It is indeed, as Mr. Issa said, in part a failure of regulatory enforcement. It is also a result of the rollback of previously 

existing regulation and the failure to adopt additional regulation to 

deal with ongoing issues. 

So, for example, there was insufficient regulation on toxic and 

predatory mortgage lending, there was too little regulation on 

securitization, too little regulation and inadequate enforcement on 

the credit rating agencies, too little regulation—actually no regulation on financial derivatives that expanded the crisis, insufficient 

capital standards required of financial institutions, and so on. 

Many other examples listed in my testimony. It is worth underscoring the impact of the great recession: $13 trillion in reduced 

economic output, $9 trillion in lost home equity, though that partly 

is inflated by the actual housing bubble itself. 

Third point. To say that the regulatory system provides so many 

protections for our country is not to say that all is well. There are 

indeed many problems with the regulatory system. It needs very 
104 

far-reaching repairs. I have got a number of examples elaborated 

in my testimony. I wanted to highlight just a few. 

First—if you could put the chart up, please, sir—the regulatory 

system now is characterized by a Rube Goldberg process, that it actually builds in endless delay, and this chart follows that Rube 

Goldberg process, although it is unreadable unless we blow it up 

to a screen about six times bigger than that one. I think the lesson 

from that is not that new additional analytic requirements should 

be imposed on agencies, but that we ought to try to streamline the 

process to the extent we can. But new analytic requirements of the 

kind embodied the Regulatory Accountability Act, I think, are the 

wrong way to go. 

A second point, which is also implicit from that chart. The OIRA 

is a roadblock to effective new rulemaking, and there needs to be 

not an expansion of the scope of OIRA authority, as would be required under several so-called regulatory reforms, but increased 

transparency at OIRA and increased accountability at the agency. 

Indeed, I think as regards the independent agencies, those are accountable to Congress, not to the executive, and it would be a mistake to expand the executive direct authority over them. 

Third point. There are issues about regulatory enforcement and 

rulemaking and undue influence of regulated parties and of regulated agencies. That is a hard problem to deal with, but one important thing we could do is to crack down on revolving door abuses 

which continue despite some reforms by the Obama administration. 

And a last point, on the matter of small business. There is an 

important discussion to be had about the nexus between regulatory 

policy and small business interests, but one thing I think that has 

been too overlooked is how competition policy is needed to advance 

small business interests. I go into some detail about this in my testimony, but one area that perhaps there can be bipartisan agreement about is start by looking at the too-big-to-fail financial institutions that get an implicit subsidy of about $80 billion, according 

to Bloomberg, and I think that is a complete unfair situation as regards small banks and it disadvantages other businesses as well. 

Maybe that is an area where there actually could be some regulatory policy going forward across party lines to advance small 

business interests. 

Thank you so much. 

Mr. BACHUS. Thank you. 

[The prepared statement of Mr. Weissman follows:] 
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Mr. BACHUS. And we will now proceed under the 5-minute rule 

with questions, and I begin by recognizing the gentleman from 

Georgia, Mr. Doug Collins, for 5 minutes. 

Mr. COLLINS. Thank you, Mr. Chairman. I appreciate it. 

This is a concern, as I stated in my opening statement, the issue 

that we have moving forward with this. I want to start with Pro-
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fessor Glicksman, if you would. One of the things that I have for 

you is a discussion that just came up with banks. There is regulation that needs to be here. Many times Republicans and conservative Republicans and myself are painted as just do away with government and we don’t need regulation. That is the furthest thing 

from the truth. We need proper regulation. 

What was just mentioned here, especially with the Dodd-Frank 

issue, is we are killing community banks. I am from northeast 

Georgia, and we had a bank which had nine employees in its home 

office. They had two other branches. When the auditors and all 

came in, they brought 14 people and complained because they 

didn’t have enough room to do their work. 

Is there a certain point in time that you would agree that there 

is need for base regulations, but the continued expansion of regulation is killing jobs? 

Mr. GLICKSMAN. I don’t think there is strong evidence that existing regulations are killing jobs. Surveys conducted by the Bureau 

of Labor Statistics and others consistently demonstrate that when 

businesses are asked what the problems they are facing are, they 

tend to point to low demand and general economic conditions, not 

excessive regulation. There may, however—— 

Mr. COLLINS. But, Professor, let me stop right here. Have you 

smarted a small business? 

Mr. GLICKSMAN. No, I haven’t. 

Mr. COLLINS. Have you worked outside of academia? 

Mr. GLICKSMAN. Yes, I have. 

Mr. COLLINS. Okay. In the last how many years? 

Mr. GLICKSMAN. Oh, the last 15 years. 

Mr. COLLINS. Okay. I think the interesting thing is we can do 

policy and then we can do polls, and we all know how polls go 

around here, and if they say, well, we don’t say it. But when you 

get into the real world, you come travel with me in the Ninth District of Georgia, you will see how it affects real jobs, and it is not 

according to some survey. It is according to the fact that they have 

jobs that are at issue. 

The other thing I have, and I read your testimony, and I appreciate opinions, but one of the things that you bring up that really 

is disturbing to me, and it is popular in the country right now, is 

that the Congress is too stupid to do this act. And you put it in 

your testimony where you said, ‘‘Neither most Members of Congress, nor their staffs, lack the sufficient expertise regarding complex regulatory matters to consider decisions on whether to adopt 

a regulation or not.’’ 

I want to think that is very offensive, one, to Congress, and the 

staff and the resources that we have, but it just also goes back to, 

I mean, I have a question for you. If that is where we are looking 

at right now, then should we have juries—I mean, does that not 

affect whether they have juries in which DNA and scientific evidence and where you have members of the population, should we 

say, well, they don’t have enough understanding of scientific, so we 

need to change our jury system. I mean, is that not just a straw 

argument you are throwing up there to maintain a regulatory system? 
130 

Mr. GLICKSMAN. I didn’t mean to offend the Members of Congress or the staff. Congress created—— 

Mr. BACHUS. We get offended every day, so don’t worry about 

that. That is not a problem. 

Mr. GLICKSMAN. Congress created agencies and has been doing 

so for well over 100 years because it recognizes that it has neither 

the time nor the expertise to legislate in the detail that is reflected 

in agency regulations. Congress certainly has the expertise to set 

broad policy, and it appropriately should do so, but it delegates to 

agencies the responsibility for translating the broad legislative 

goals into detailed regulatory mandates, and I think that is perfectly appropriate for it to do so. 

Mr. COLLINS. And one of the things is, too, is remembering that 

we have, from a perspective of designating, yes, but also having 

oversight, because we are the ones who have to stand before the 

people and actually have to say, you know, here is why we are running and here is what the government is doing or not doing. 

Mr. GLICKSMAN. It would be appropriate for Congress to amend 

a statute if it felt on review that the agencies are not doing an appropriate job implementing it. 

Mr. COLLINS. Thank you. 

Mr. Weissman, should it be easy? I mean, you showed this wonderful chart and this graph about how hard it is. Should it be easy? 

I mean, let’s go to the other side here. You know, what is the balance that you see? If you make the sort of the chart here that says, 

well, this is just awful and terrible, should it be easy? 

Mr. WEISSMAN. Should it be easy to issue—— 

Mr. COLLINS. To do regulations that impact businesses on which 

the regulators themselves do not have to feel the impact? 

Mr. WEISSMAN. Well, the decision should be informed, but, yeah, 

for sure, it shouldn’t be subjected to needless red tape, just the way 

businesses should not be subject to red tape. 

Mr. COLLINS. I think one last thing, I know my time is running 

out. But, Mr. James, you provide a face to this. We can be academic, we can be congressmen, and we can go back and forth and 

be offended and not offended, that is normal. But for you, you provide a face to this, and I think that is what is missing often when 

we talk about these in these large economic terms and we talk 

about it in large policy terms, and I just wanted to thank you for 

being a part of this and showing that there is a balance that can 

be struck. And any comments that you would like to elaborate from 

your testimony I would like to hear. 

Mr. JAMES. Well, thank you, Congressman. And you are absolutely right, these aren’t abstract costs. And we can talk about statistics and numbers all day long, but the reality of it is, is that this 

is going to have a real impact on my community. It is not just the 

power plant. There is a ripple effect that will be associated with 

it. It will be the closing of restaurants near the power plant. It will 

be the closing of dry cleaners that clean the uniforms for the plant 

workers. This will affect families. It will affect the children. It is 

not just about these high ideals. There is a real impact here and 

it worries me every day as an elected official. Thank you. 

Mr. COLLINS. Well, I appreciate that. 

Mr. Bachus. Thank you. 
131 

Mr. Collins. Mr. Chairman, I yield back. 

Mr. BACHUS. Thank you. 

Mr. Cohen, for 5 minutes. 

Mr. COHEN. Thank you, Mr. Chair. 

Dr. Holtz-Eakin, in your opinion, was the great recession largely 

fueled by the unregulated mortgage industry and securitization 

market? Was that a great—— 

Mr. HOLTZ-EAKIN. No. 

Mr. COHEN. It is not your opinion. 

Mr. HOLTZ-EAKIN. No, that is not my opinion. As you know, I 

was on the Financial Crisis Inquiry Commission. We spent 2 years 

looking at this issue. We had housing bubbles, both residential and 

commercial, in Spain, in Ireland, England, New Zealand, and those 

took place in vastly different regulatory markets. There is nothing 

about the regulatory system that appears to be correlated with the 

presence of big housing bubbles and the aftermath. It is also true 

that we had large institutions fail in, for example, in the United 

Kingdom, Northern Rock, with a very different regulatory system. 

They have a unified regulator. 

So I find it utterly uncompelling to assert that somehow it was 

the regulatory system per se and uniquely that generated this phenomenon. 

Mr. COHEN. Do you think there should be regulations on 

securitization of these mortgages? 

Mr. HOLTZ-EAKIN. Indeed, there have been for a long time. I 

mean, securitization came from the creation of Fannie Mae, 

Freddie Mac. It was originally designed to bridge what were regional lending markets in the United States which led to financial 

market failures when we had crop failures, in particular, earlier in 

our stage of economic development. And so those were never unregulated markets. They were part and parcel of government policy. 

Mr. COHEN. Mr. Weissman, I would like you to respond to that. 

I mean, you, in your testimony, talked about this issue. 

Mr. WEISSMAN. Well, since the author is here I don’t want to put 

words in his mouth, but I did review again the dissent that you coauthored to the Financial Crisis Inquiry Commission report. It is 

indeed a thoughtful perspective on in trying to explain the crisis. 

My interpretation, though, is it is not fundamentally one that is 

at odds necessarily with the majority, but in any case, with a view 

that says that regulatory failure was a considerable contributing 

factor. I mean, the framework explanation and the dissent is that 

there was a housing bubble and a financial bubble, those were sort 

of structural factors, and as you look at this cross-cultural comparison, they may not be attributed to any regulatory issue or anything 

that is domestic, but that they were exacerbated—but those problems were exacerbated by a number of things—bad mortgages, relatively unregulated securitization, financial derivatives in the derivatives trade, and credit ratings failures, all things that were listed in the dissent. 

From my point of view, at least, and I can’t speak for Dr. HoltzEakin, those are all things that either should have been prevented 

altogether or problems that should have been limited through ap-
132 

propriate regulation, either better enforcement or stronger rules on 

the books. 

Mr. COHEN. Federal Reserve Chairman Alan Greenspan opposed 

regulation of the practices that allowed subprime mortgages to be 

bundled into large securities—opposed those regulations—and sold 

to investors. In 2008, however, he testified, ‘‘I made a mistake in 

presuming that the self-interest of organizations, specifically banks 

and others, were such that they were the best capable of protecting 

their own shareholders, and their equity in the firms.’’ I think Alan 

Greenspan was right to make his mea culpa and admit that the 

regulations should have been in place and that they did help result 

in that. 

Let me ask you this. Dr. Holtz-Eakin,you have made some criticisms of the Affordable Care Act. Your criticism, I presume, was 

not that you don’t think we should have health care for people that 

otherwise aren’t getting it. You are in favor then, I guess, of a single-payer system? 

Mr. HOLTZ-EAKIN. No, I am not, sir. 

Mr. COHEN. No, you are not. So what are you in favor of? Any 

health care at all for the poor people that aren’t getting health care 

today? 

Mr. HOLTZ-EAKIN. The Affordable Care Act has two key components. Key component number one is an expansion of health insurance coverage, largely through the exchanges and the Federal subsidies—— 

Mr. COHEN. Right. Which we wouldn’t have if we had a singlepayer system. 

Mr. HOLTZ-EAKIN. But those aren’t care decisions. Care decisions, the actual use of health care services are things to which 

people are constitutionally entitled, that has been determined, and 

which are happening right now. 

So the second big piece of the Affordable Care Act is those activities which would change the delivery system, produce higher quality care, in particular move us away from fee-for-service medicine, 

which is widely recognized as part of the problem. 

I believe the act has, you know, sort of three key features. Number one, I think the insurance expansions are very poorly designed 

and will harm us from a budgetary and economic point of view. I 

think the delivery system reforms are under-exploited. I mean, this 

doesn’t solve our cost problem, which is the fundamental health 

care problem in the United States and which harms the ability of 

the less affluent and everybody to get affordable care. And the 

third is timing. It is not a pro-growth strategy to impose $700 billion in new taxes, create a trillion-dollar new entitlement program 

at a time when our entitlements need to be reformed to begin with, 

and impose the large regulatory burdens that come with the ACA. 

That is what we did at a time when we were trying to crawl out 

of the greatest recession since the Great Depression. 

Mr. COHEN. Dr. Holtz-Eakin—— 

Mr. HOLTZ-EAKIN. So that is why I think it flunks the benefitcost estimate, because if you think about it, you wouldn’t do it. 

Mr. COHEN. Well, I did think about it, and I was for it and I am 

still for it because somebody—— 

Mr. HOLTZ-EAKIN. Well, you asked what I thought. 
133 

Mr. COHEN. I know I did. And I am saying you don’t take into 

consideration people whose lives would be lost. If you are 65 years 

old and you need a lung and you can’t afford it, you don’t have insurance, you can’t wait for years to come. And this whole regulatory scheme of EPA and health care and China is wonderful and 

China has less regulations, China’s air is awful and their people 

don’t have the life expectancy we have, nor do they have it in 

India. And a lot of things we do that are regulations save peoples 

lives, and nobody here seems to be concerned with life expectancy, 

quality of life, health care, all of which are affected by regulations 

that this Congress has passed that have become law and make 

America the best country in the world. 

I yield back the balance of my time. 

Mr. BACHUS. Thank you. And I would let Mr. HoltzEakinrespond, though. 

Mr. COHEN. Then I am going to respond. Congress always gets 

the last say. You know that. 

Mr. BACHUS. Well, how about 20 seconds? 

Mr. HOLTZ-EAKIN. Eighteen. 

Mr. BACHUS. Eighteen seconds. 

Mr. HOLTZ-EAKIN. None of my remarks raised China, the desirability of air pollution regulation, all of which I do have opinions 

on, but wasn’t my point. The Affordable Care Act has relatively 

modest expansions of the actual access to health care in the United 

States. We spend $3.6 trillion already. We have aggressive programs at the State and Federal level for the elderly and low income. It does add some, but I don’t think it passes the benefit-cost 

test in terms of those very important issues. We have better ways 

to accomplish the same things, and that would have been my goal. 

Mr. BACHUS. Thank you. 

Mr. Farenthold, who is next. Then Mr. Rothfus after that. 

Mr. FARENTHOLD. I am sorry? 

Mr. BACHUS. Five minutes. 

Mr. FARENTHOLD. I will be as brief as possible. I know we have 

got a busy day. We got a big panel. Lots of people to ask questions. 

The district I represent is the heart of the Eagle Ford Shale development in Texas. It is providing unprecedented amounts of energy for our country at incredibly low cost. Right now there are just 

a ton, there are actually 10 agencies now that have been charged 

with regulating the hydraulic fracking industry. I mean, it seems 

ridiculous that we have to go through this many regulatory hoops 

to regulate one activity. It seems like there is a natural desire for 

everybody to get their hand into the pudding. 

How can we structure something where, whether it be hydraulic 

fracking, building a much-needed bridge or a new railroad or infrastructure, or developing a plant that will put people back to work, 

how can we consolidate this without putting in jeopardy the environment? I will throw that open to give each of you all 15 or 20 

seconds for your best idea, and we will start with Professor 

Glicksman. 

Mr. GLICKSMAN. It is funny that you ask that question because 

my latest article is on exactly that, and I commend it to all of you. 

What my coauthor and I do in that article is to look at the different dimensions upon which regulation and agency relationships 
134 

can proceed in. So we look at whether or not it makes sense to 

have centralized or decentralized regulation, whether if we have 

decentralized regulation one ought to have an array of authorities 

that are distinct, with each agency having jurisdiction over a separate problem or whether we ought to have overlapping authority. 

And finally, we look at whether or not it makes sense to have coordination among the agencies that have jurisdiction over a single 

problem or whether we want them to act independently. 

Mr. FARENTHOLD. You have given me some light reading for the 

flight home. I appreciate that, Professor. 

Mr. GLICKSMAN. We make suggestions about how best to answer 

those questions. 

Mr. FARENTHOLD. Thank you. 

Mr. GLICKSMAN. Very context specific. 

Mr. GREENBLATT. America hit the lottery when we figured out 

fracking in natural gas. This is wonderful for our country. This is 

wonderful for our factories. This is going to grow employment in 

our country. So we have to streamline the environmental regulatory authority so that—— 

Mr. FARENTHOLD. I am sorry. I don’t mean to rush you. I have 

got one more. I have got another question I want to ask, though. 

Quickly, give me your bullet point, anything we can do, where is 

our biggest bang for the buck? 

Mr. GREENBLATT. I think if we have one entity in charge of 

fracking and all other groups have to—— 

Mr. FARENTHOLD. Great idea. 

Mr. GREENBLATT [continuing]. Cede authority to them. 

Mr. FARENTHOLD. Mr. James. 

Mr. JAMES. Thank you, Congressman. I will be brief. When an 

environmental agency, either it is the Ohio EPA or the U.S. EPA, 

is promulgating a regulation, they look at the direct cost of that 

regulation, and when they analyze direct cost, it is usually the cost 

of compliance with that regulation. My suggestion would be simple, 

that these agencies look at other costs associated with that regulation, particularly indirect costs to communities that those regulations impact. Thank you. 

Mr. FARENTHOLD. Sold on that one, too. 

Mr. HOLTZ-EAKIN. I haven’t written on this, but my instinct is 

monopolies are bad and government monopolies are just as bad, 

and while it is messier, multiple jurisdiction provides checks and 

balances that go back to our founders. 

Mr. KOVACS. This Committee has already had a great start. Last 

year you passed out of the House the Regulatory Accountability 

Act, which allows good data to get into the system and for a way 

to check the data that is bad, and second, permanent streamlining, 

very important. And the few pilots that we have had, both in 

SAFETEA-LU and in the Recovery Act, showed that we can cut 

permit time in half. 

Mr. FARENTHOLD. All right. Mr. Weissman. 

Mr. WEISSMAN. I think the key issue that is highlighted is what 

happens when there is a new technology or an old technology that 

is operating at a scale beyond anything that happened before. And 

I think there is a key role for Congress in saying, look, we need 
135 

a framework to think about this. The frustration you have, I think, 

is agencies just trying to catch up. They are behind. 

Mr. FARENTHOLD. All right. Thank you very much. 

Mr. James, Corpus Christi, my hometown, similar to you, we 

have a large petrochemical industry. We are suffering as a result 

of regulation. Fortunately, the low cost of natural gas, you know, 

in the 3.25 range is making it awful attractive to overcome either 

our higher labor costs or our higher regulatory costs, but not necessarily both. 

I mean, obviously we talk about the jobs. But in your community, 

what are you seeing is the impact on people and families as jobs 

are evaporating? Your population has got to be suffering. 

Mr. JAMES. Absolutely. And it truly does keep me awake at night 

and throughout the day thinking about what I am going to tell 

families when they find out that their job has been eliminated and 

they call me and they tell me that they can’t make their mortgage 

payments and I have to refer them to some of our welfare services 

to help them out. It is these kind of indirect costs that I think Congress and the administration and agencies need to look at as they 

are making—— 

Mr. FARENTHOLD. I appreciate that. And my word to our agencies 

and regulators, every day you delay in approving that permit is a 

day somebody doesn’t go back to work. And I wish more of our regulators were staying up at night worrying about the people that 

the regulations are affecting. 

Thank you. I yield back. 

Mr. BACHUS. Thank you. And now the gentlelady from Washington state, Ms. DelBene, is recognized for 5 minutes. 

Ms. DELBENE. Thank you, Mr. Chair. 

Mr. Greenblatt, I wanted to ask you about, you talked about 

sunsetting regulations, and I assume that the intent is that we put 

together regulations, we have an idea of what the intent is of the 

regulation and the result of that, and after some period of time we 

evaluate whether or not that is working or not working or how we 

can improve and it would either sunset or be reinstated. Is that 

what you are suggesting? 

Mr. GREENBLATT. I agree. 

Ms. DELBENE. And so when we look across our environment, another scenario where we have a similar challenge is in our tax system. And do you think that that would also be a place where we 

should put things in place and let those sunset as well so that we 

don’t continue to build complexity on top of complexity? 

Mr. GREENBLATT. I am sorry. You are talking about taxes or you 

talking about environment or both? 

Ms. DELBENE. Tax system. Things like exemptions and incentives that are also put in place with an intent to either help—— 

Mr. GREENBLATT. Sunsetting is a good idea. It cleans things out. 

Ms. DELBENE. Well, we have had this conversation in our state 

a lot, and I agree that if we can get rid of the layers and we are 

better stewards of policy and keep it up to date, we would probably 

reduce a lot of complexity. Thank you. 

Mr. Weissman, several witnesses are suggesting that regulations 

are a significant factor in our current unemployment situation, and 

clearly we have talked about the benefits and challenges, but I 
136 

wondered what proposals you might have or what we could do in 

our regulatory system to support job creation and innovation and 

what changes we might make to reduce that burden. 

Mr. WEISSMAN. I think there is a huge number of things. I think 

the first point is that much of the regulation that is being criticized 

actually itself is a spur to new innovation. So if we talk, for example, about the fuel efficiency standards, that is going to spur all 

kinds of new innovation in the auto industry. The various environment or energy efficiency standards that are being promulgated by 

EPA will massively spur innovation. 

So, if you look in the auto industry, same kind of things. In fact, 

we were looking at the airbag example, and I mentioned some of 

this in my testimony. When airbags were first being proposed and 

seriously considered in the 1970’s, the industry said that the cost— 

publicly they said the cost was going to be well over $1,000 and 

sometimes up to $1,500 or more. It turned out that their internal 

data showed that the cost would be more like $200, and thanks to 

economies of scale and dynamic efficiencies, actually the costs are 

now far, far lower and we are saving $2300 a year. 

So, actually a lot of regulation is itself innovation-spurring. If we 

want to look, I think, broadly, in terms of making the economy 

more stable in the regulatory area, I think given the experience we 

have just had with the great recession, the most important thing 

is to stabilize the financial system. I think there probably is pretty 

widespread agreement that the system remains quite fragile. 

From my point of view, if there is a single most important thing 

to do, it really is to go after the large institutions that are able to 

hold hostage prosecutors, enforcement agencies, and some extent 

Congress, and I don’t think there is any solution to that short of 

breaking them up. 

Ms. DELBENE. Thank you. I yield back the remainder of my time, 

Mr. Chair. 

Mr. BACHUS. Thank you. That is much appreciated. 

Mr. Rothfus, the gentleman from Pennsylvania, is recognized for 

5 minutes. 

Mr. ROTHFUS. Thank you, Mr. Chairman. 

And thank you to the panel. It is a fascinating discussion. 

I represent a big swath of southwestern Pennsylvania. It is 

unique in that we have a significant concentration of national leaders in health care, energy, financial services, and manufacturing. 

In fact, it is hard for me to think of another region of the country 

that has the number of leaders across these fields that southwestern Pennsylvania does. 

I think every regulation that requires a private sector entity to 

undertake a certain action and expend funds can rightly be called 

a tax. You know, the Small Business Administration has stated 

that the cost of compliance with the current regulatory framework 

that we have is over $1.75 trillion. You know, we are competing in 

a world economy, and I think that overburdening regulations, along 

with higher taxes, as well as other costs being passed along to employers, such as through the Affordable Care Act, are strangling 

our economy. You know, the fourth quarter we saw a contraction, 

and we see unemployment chronically high and wages are stagnant. So, I do think that we need to be taking a look at what is 
137 

going on with the regulatory framework. I am looking at a list of 

regulations that are, you know, on the deck at EPA and very concerned about what the impact is going to be on the ability of our 

job creators. 

A little bit, you know, Professor Glicksman, I would like to go in 

a little bit about the REINS Act that you had mentioned, and a 

concern about interjection of politics. You know, I am a little puzzled by that, and I wonder if you could maybe elaborate on that. 

I look at under our constitutional framework, that the legislative 

branch is the law making. We have the responsibility. I mean, if 

you take your analysis, isn’t every piece of legislation that we put 

out of here has some kind of political background? 

Mr. GLICKSMAN. Yes, certainly it does, and I am not disputing 

the fact that Congress has the responsibility and the right to make 

legislative policy, which is based in part upon political judgments. 

My point was simply that the detailed regulatory decisions made 

by agencies such as EPA are based upon the information provided 

by experts, such as toxicologists and epidemiologists. 

I have been teaching and writing about environmental law for 35 

years. I don’t have the technical expertise to know whether a particular air quality standard ought to be set at 0.08 parts per million or 0.075 parts per million. That is beyond my expertise. 

Mr. ROTHFUS. Do you think it is beyond the expertise of this 

body to pull the experts in to ask questions so that we can understand that, too, or do we have to have elites over in the agencies 

telling us this? 

Mr. GLICKSMAN. I wouldn’t call agency members elites. I think 

they are experts. And they have been delegated authority by Congress precisely so that Congress is relieved of the burden of making 

detailed technical judgment. 

Mr. ROTHFUS. Relieved of the burden or relieved of the responsibility to evaluate that? 

Mr. GLICKSMAN. I would say relieved of the burden. If you determine that an agency is not operating pursuant to the mandate that 

you delegated to the agency, you certainly have the right to amend 

a statute, to change the agency’s mandates and authorities. But it 

seems to me that making the kind of technical judgments reflected 

in the regulations that are issued on a daily basis by agencies is 

going to swamp Congress. I don’t think, realistically, practically, 

there is any way to do an adequate job overseeing the details of 

every regulation issued by Federal agencies in a timely manner. 

Mr. ROTHFUS. Dr. Holtz-Eakin,I would like to follow up. You 

mentioned Fannie and Freddie, and there were attempts under the 

Bush administration to provide some further regulations for Fannie 

and Freddie, weren’t there? 

Mr. HOLTZ-EAKIN. Yeah. When I was CBO director, there were 

a number of initiatives to change the special provisions that surrounded the housing GSEs, and most importantly, to increase the 

capital requirements. They were very thinly capitalized entities. 

Mr. ROTHFUS. And then, you know, you look at, you know, a gentleman like former Congressman Frank, who wanted to, quote, roll 

the dice with Fannie and Freddie. Any idea what was he was talking about there? 
138 

Mr. HOLTZ-EAKIN. I won’t speak on behalf of the former Congressman, but I think the reality was, and there are CBO reports 

to this effect, it was predictable that there was a very high probability that the taxpayers would have to step in, and history has 

shown it happened quicker than even we thought it would. 

Mr. ROTHFUS. Mr. Weissman, any idea what Congressman Frank 

would have been talking about when he wanted to roll the dice 

with Fannie and Freddie? 

Mr. WEISSMAN. No. And I will follow the example of not wanting 

to speak for him. But I agree with your point. I think that it is correct that they were undercapitalized and underregulated. 

Mr. ROTHFUS. Any thoughts, Dr. Holtz-Eakin, onefforts such as 

the REINS Act to have the Congress really exercise its constitutional responsibility when it comes to the law-making, you know, 

responsibility within this government? 

Mr. HOLTZ-EAKIN. It is standard practice in Congress to authorize activities for finite amounts of time, to do oversight of those activities, and then to decide whether to reauthorize or not. This 

strikes me as entirely consistent with that way of doing business. 

And I know that there is concern about the relative balance of benefits and costs, which is the fundamental legitimate issue, but I 

don’t see, if Congress is involved on a regular basis, how that can 

get too far out of whack. In fact, I think that helps keep the broad 

measure of benefits and costs in balance. 

Mr. ROTHFUS. Thank you. 

Mr. BACHUS. Thank you. 

Mr. ROTHFUS. I yield back. 

Mr. BACHUS. Thank you. 

Mr. Garcia, the gentleman from Florida, is recognized for 5 minutes. 

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

Mr. Kovacs, I noticed you said that you have been coming here 

for 17 years on this issue, which strikes me, because I thought it 

was Obama that declared the war. So I wanted to know exactly 

when is it that we went off the rails here. 

Mr. KOVACS. Well, I have said this to Republicans and Democrats. I think that Congress has delegated far too much authority 

to the agencies. And it probably happened 45 years ago. The Administrative Procedure Act is now over 65 years old and last year 

was the first time anyone looked at how agencies operate. 

I think the first thing, and this is just gratuitous advice, is that 

Congress, as an institution, is the elected representatives of the 

people, not the agencies, and that when he you have a divided government that we have today, one of the difficulties is the executive 

controls it, not the Congress. And so to a large extent you have lost 

control over the legislative process because the courts have actually 

recognized, like you look at the American Trucking Association 

case where Scalia says you delegated it away. Your job is to get it 

back, and I think that is the most important thing now, because 

if you look at it—and let me start with my one example. 

Mr. GARCIA. Mr. Kovacs, I have a limited amount of time, but I 

don’t disagree with you. I have worked in regulatory agencies. It 

has been a major part of my career, particularly because I am so 

bad at getting elected, so I have to pray I am getting appointed. 
139 

But I would agree with you, and my worry is that the tone and 

tenor of this debate should be rational. 

Mr. KOVACS. Yes. 

Mr. GARCIA. It shouldn’t be about extremes. I think this side of 

the aisle would love to cooperate with the other side, and I am sure 

that you and Mr. Weissman could sit down and come up with all 

sorts of regulatory mumbo jumbo that we need to get rid of, and 

Mr. Greenblatt would probably agree with you. My suggestion is it 

is something that we should try. I mean, if we are broken here, 

there needs to be some form, particularly from outside us, because 

we are busy here sort of posing and preening, but we are not getting much done. But there is a need for the system to go forward. 

And you are right, because we have a divided government, the ability to strike at things that are obviously wrong in the regulatory 

system, just like there are things that we can do better. 

Mr. Greenblatt, I read your testimony, and first of all, I want to 

congratulate you for your tremendous business success. 

Mr. GREENBLATT. Thank you. 

Mr. GARCIA. I assume that is not because we overregulate you. 

It must be because of your exceptional talent? 

Mr. GREENBLATT. I have a great team of people. 

Mr. GARCIA. Very good. Mr. Greenblatt, you mentioned China. 

Would you believe that a communist government with central 

planned economy is a better format for dispensing business wisdom 

or a better environment for business? 

Mr. GREENBLATT. No, absolutely not. 

Mr. GARCIA. Okay. I just wanted to make sure. I didn’t want to 

sort of get it wrong. You do realize that where we are reading 

about cancer—— 

Mr. GREENBLATT. And I—— 

Mr. GARCIA. No, no, that is my point. You are competing with 

them. 

Mr. GREENBLATT. I am competing with China. We lock skulls 

with them every day of the week. 

Mr. GARCIA. I understand. 

Mr. GREENBLATT. When we win jobs, we are taking them—— 

Mr. GARCIA. There is a great British phrase that says choose 

your enemiescarefully because in the end you will be most like 

them, and we certainly don’t want to look like China when you look 

at cancer spreading, you have cancer clusters all over manufacturing areas. It is certainly not a place you want to be. 

I wanted to ask Mr. James. Do you know what mercury cause, 

what happens when mercury is ingested by life? 

Mr. JAMES. Absolutely, Congressman. I spent part of my career 

as an assistant attorney general enforcing the Clean Air Act. 

Mr. GARCIA. Very good. 

Mr. JAMES. And I believe very deeply in it. But at the same time, 

when an employee of the plant that is closed down and they come 

to me and they don’t know where to look for work, it is very difficult for me to tell them that EPA has said that 54,000 jobs have 

been created. What do I tell them to do? Do I tell them to leave 

Avon Lake? 
140 

Mr. GARCIA. I don’t know. It is better than helping one of your 

constituents bury a child, right? And those are things that are just 

as serious. I understand—— 

Mr. JAMES. I respect that, Congressman, but at the same time, 

if I can—— 

Mr. GARCIA. Mr. James, Mr. James, if you will let me finish. I 

was asking a specific question. My point to you, Mr. James, is I 

have regulated the energy industry and I have regulated power 

companies and I have worked for the FERC, and many times when 

energy companies say we have decided to get out of the business 

because of regulations—how old is the power plant in your district? 

Mr. JAMES. It is approximately 60 years old. 

Mr. GARCIA. Right. Well, Mr. James, I guarantee you that that 

power plant is closing not because of regulatory overview. That 

power plant is closing because it is no longer competitive with 

other forms of energy that are being developed by places where my 

colleagues reside, and that is a reality. And you know, I am sure 

that the last buggy whip manufacturing facility employed a lot of 

people. Unfortunately, we weren’t in the business of buggy whips 

anymore. Likewise, power plants after 60 years are almost impossible to maintain, they are impossible to be productive, and what 

you are experiencing is free market and its effects. 

And I say this because I understand. I have been a regulator and 

I have shut down power plants. I had one power plant where a 

local manatee group came to say let’s keep the power plant open 

because it puts hot water into the river so we can keep the 

manatees warm in the winter. While it was a wonderful idea, a 

nice little water heater would have been better than keeping a 

power plant that was inefficient. 

And those market efficiencies, I think, are what all of you in 

business want. A 60-year old power plant, a 60-year old coal-fired 

power plant is technology that long ago ceased to be the best to 

have in the market. But thank you, and I do sympathize for you. 

I yield back the balance of my time. 

Mr. MARINO [presiding]. Mr. James, I am going to give you 30 

seconds if you would like to respond. 

Mr. JAMES. Thank you, Congressman. 

Congressman, I would remind you that I am not here on behalf 

of private business, but I am here on behalf of city government, 

and I am concerned when a power plant closes and the jobs aren’t 

replaced and the income tax isn’t replaced and we can’t afford to 

pay for ambulances anymore. And so when that child is sick and 

they call 911 and we can’t send an ambulance to come get that 

child and take them to the hospital, what do we do? That is a serious problem as well. 

Mr. GARCIA. Mr. Chairman, if I could respond very quickly. I do 

sympathize. 

Mr. MARINO. No, sir. We are not going to have an exchange of 

an argument back and forth. You have had your time. He responded to your statement, and we are going to move on to Mr. 

Jeffries from New York. 

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

Earlier today, our distinguished Ranking Member made the observation that he was concerned with the inflammatory nature of 
141 

the title, and I would agree with the distinguished gentleman from 

Memphis, Tennessee. I was quite startled when I took a look at the 

title, ‘‘The Obama Administration’s Regulatory War on Jobs, the 

Economy, and America’s Global Competitiveness.’’ Sounds very ominous, paints a picture of doom and gloom. I looked at it this morning and I was concerned with the history of the Republic and our 

ability to actually move forward and sustain ourselves as the great 

Nation that we are because of this apparent regulatory overreach. 

And we have got a few witnesses today, real world witnesses who 

are here to present evidence of this doom-and-gloom concern that 

we have with the history of the Republic proceeding as we know 

it. 

And I appreciate your presence, Mr. Greenblatt, and you have 

obviously been a very successful businessman. And I salute you for 

that, inner-city community apparently in Baltimore, but you provided an example in your testimony of the type of concern that you 

have and you cited a $15,000 dollar fine. Is that right? 

Mr. GREENBLATT. Yes, sir. 

Mr. JEFFRIES. Okay. And that $15,000 fine, apparently you eventually paid, you negotiated it down, and it was somewhere south 

of $15,000. Is that correct? 

Mr. GREENBLATT. Yes. 

Mr. JEFFRIES. Now, on your Web site you indicated that you are 

one of the fastest growing businesses in America. Is that right? 

Mr. GREENBLATT. Yes. 

Mr. JEFFRIES. And last year, I just want to make sure I get this right, your revenues were in excess of $4.5 million, or maybe that 

was 2011. Is that right? 

Mr. GREENBLATT. We crossed over $5 million last year. 

Mr. JEFFRIES. I congratulate you on that. So apparently this reg- ulatory overreach, as evidenced by the $15,000 fine that you, yourself, cited as Exhibit A in your testimony hasn’t been overly burdensome in your ability to become one of the fastest-growing companies in America. Correct? 

Mr. GREENBLATT. If I had my people focused on important things 

like growing the company, we would hire more unemployed steelworkers in Baltimore City. I think you and I both want me to 

thrive and prosper because when I thrive and prosper we hire more 

people. We are trying to end the recession in our small way. 

Mr. JEFFRIES. Thanks very much. I salute you on your success. 

Council Member James, I appreciate your concern. I was involved in State government before having the opportunity to serve 

here in the House of Representatives. And as my distinguished colleague from Miami pointed out, the reality is probably more likely 

that that 60-year-old plant closed because of reasons of market 

competitiveness, having nothing to do with a concern, very legitimate one, presumably, for the human intake of mercury. 

But let’s put that aside. You are citing, I believe, an issue with 

the possibility of $70,000 in tax revenue, painful, but am I correct, 

I guess the number of $69,878.62, that is the concern? 

Mr. JAMES. Honestly, Congressman, my concern would be less for 

the city of Avon Lake and more for the Avon Lake School District. 

The Avon Lake School District is anticipating losing $3.3 million 

per year—per year—in revenue. I mean, that is going to challenge 
142 

Avon Lake’s ability to educate its students, it is going to challenge 

the ability to take care of the students that have the most needs. 

Mr. JEFFRIES. I agree with you. I agree with you absolutely. And 

one of the things that I think we supported, certainly on this side 

of the aisle, is an increased investment in first responders all 

across this country, so perhaps those EMS personnel, those challenges that you raised, that could be addressed. An increased investment in teachers, we are facing an $85 billion sequestration. 

But we are here at a doom-and-gloom hearing related to alleged 

regulatory overreach. 

Now, my time is limited, but, Mr. Kovacs, the economy collapsed 

in 2008. Is that correct? 

Mr. KOVACS. Around there, yes. 

Mr. JEFFRIES. Okay. And this was the worst economic crisis since 

the Great Depression, is that correct? That is what it triggered? 

Mr. KOVACS. Well, I do not know. I mean, I am not going to characterize it as the worst. It was bad. 

Mr. JEFFRIES. Okay. Mr. Holtz said that in his testimony, so I 

will accept that. 

Who was the President in 2008? 

Mr. KOVACS. It was George Bush. 

Mr. JEFFRIES. Okay. And would you describe the Bush administration as excessive in its regulatory zeal? 

Mr. KOVACS. I think I have been pretty clear in what I have said. 

I think that the regulatory process—and we have a chart that 

shows how 180,000 new regulations have started since 1980—the 

regulatory process has been growing for a very long time, and we 

have suggested and we have tried to keep it in a very bipartisan, 

nonpartisan way, that Congress has an institutional stake in getting control of the agencies. 

Mr. JEFFRIES. Thank you. I see my time is limited, but one last question. Would you agree that the $22 trillion that the Wall Street 

collapse cost the American economy is a more significant problem 

that perhaps related to the underregulation of the market? Not the 

mortgage-backed securities—as Mr. Holtz indicated, they were regulated to some degree—but the credit the false default swaps which 

grew to about $50 trillion that was an entirely unregulated insurance product? Do you think that was a problem that perhaps needed to be addressed by Dodd-Frank and this Congress? 

Mr. KOVACS. Congressman, there are very few times in my life 

I say I really don’t know how to respond to that issue. I am not 

an expert in banking, so I am just going to tell you I don’t know. 

Mr. JEFFRIES. Thank you. 

Mr. GARCIA. We never in Congress say we don’t know. 

Mr. BACHUS [presiding]. Thank you. 

I guess we are to the point where I will ask questions. Everybody 

else has. 

My first question, and I will ask this to you, Dr. HoltzEakin,according to the National Federation of Independent Businesses, paperwork is one of the biggest concerns for small businesses. Could you explain how paperwork diverts resources from 

productive activity and how the administration has failed to fulfill 

its commitment to reduce red tape? And I am sure this is not the 

first administration to fail in that commitment. 
143 

Mr. HOLTZ-EAKIN. I think we have heard very clear testimony on 

this from Mr. Greenblatt. 

Mr. BACHUS. Right. 

Mr. HOLTZ-EAKIN. You have hours in the day, you have workers, 

and you can task them for things that will increase your sales and 

your productivity, or you can task them to comply. And those are 

clear tradeoffs. 

One of the things that I have found most disturbing about the 

recent regulatory initiatives is the White House, OIRA in particular, issuing a statement that said it was okay to count as a benefit of regulation the people hired to comply with that regulation. 

Any clear accounting of benefits and costs puts that on the cost 

side of the ledger. And I think at a minimum we ought to do that 

right. 

Mr. BACHUS. I did also note Mr. Greenblatt when he said you 

had a form and you just failed to sign in one of three places. 

Mr. GREENBLATT. Right. We signed it in two of three places. I 

omitted signing the last, as an oversight, it was a 20-something 

page form, and because of that we received a $15,000 fine from the 

government. Our top team had to spend hours on the phone, you 

know, waiting on hold with the IRS trying to do something about 

it. It was a complete distraction of important, mission-critical 

tasks. 

Mr. BACHUS. So it wasn’t a failure to pay moneys. 

Mr. GREENBLATT. No, no. It was a 2006 form, it was an annual 

form you are supposed to fill out, and it was one of those things 

where there is pages and pages of forms, and my bookkeeper told 

me where to sign, I signed it, and I didn’t sign the third one. Either 

she or I overlooked it. It was 4 years before. And it is dispiriting 

that the government finds that as a productive task. 

Mr. BACHUS. Did you get any notice? Did they first send it back 

and say please sign this? 

Mr. GREENBLATT. The first form was a fine. 

Mr. BACHUS. Wow. Okay. 

Mr. James, I think your testimony kind of brings it down to the 

community and the individual level. Have you had a chance to 

meet any parents or students who have benefited from social services offered at Avon for children with autism, depression, or who 

have been abused? What can you tell them about the effects, as a 

city councilman, of coming budget cuts of these services due to the 

loss of revenue from the plant closing? And what do you expect will 

happen to these children? 

Mr. JAMES. Well, I can tell you they are very concerned, and they 

don’t know what the answer is, and honestly the city doesn’t know 

what the answer is yet either. You know, there has been comments 

this morning that market forces are closing the power plant. We 

are not talking about a typewriter factory and the typewriter factory is being closed because of computers. We are talking about an 

electric power plant. We are going to need electricity today, we are 

going to need electricity tomorrow. And so I question whether it is 

really market forces that are closing this or an overaggressive regulation that is making the market incapable to deal with the costs 

of the regulation. 
144 

Mr. BACHUS. Okay. But did you mention or have a reason to believe that some of the services may have closed in Avon park already? 

Mr. JAMES. If the power plant does close, nearly half of the $3.3 

million that the school district is talking about losing comes just 

from the generation of electricity. They are going to have to make 

significant cuts, and they are going to have to look at the special 

programs that they offer, everything from AP programs for the 

educated and gifted students, to the social services, the autism, the 

community counseling, the other kinds of things that needy children and needy families need. 

Mr. BACHUS. Okay. 

Mr. Kovacs, do you think that the House-passed regulatory reform bills from last term, especially the Regulatory Accountability 

Act, the REINS Act, the Regulatory Flexibility Improvement Act, 

and the Sunshine for Regulatory Decrees and Settlements Act 

would help substantially to address some of the economically impacting regulations that have been identified today? 

Mr. KOVACS. I think it is fair to say that some are more important than others. I think that the permit streamlining bill that this 

Committee passed out of Committee and passed through the House 

last year is very important. That could cut the time for getting permits in half. At least that is what the pilot programs have shown. 

And it does so without really offending anyone’s rights. It literally 

puts a lead agency in charge, drives the process and timeframes. 

Very, very workable. 

The Regulatory Accountability Act is very important because it 

allows more transparency of the agencies and the information that 

they are relying on, and it allows us, as the regulated community, 

to put more information into the system. And it begins to take 

away the deference from the agencies and restore it to more of a 

level playing field so Congress has more of a role. 

I think on the sue-and-settle litigation, I don’t know what it is 

called this year, that is certainly important because one of the 

things that does is when you have a sue-and-settle arrangement 

between the agencies, an outside group is actually deciding how the 

agency is going to prioritize its time and its budget. 

I would put those in the top three. But I would certainly say permit streamlining is something that I think you can get agreement 

with. I think even the Obama administration talks about it. CEQ 

has talked about it. So if you are talking on all of the bills, on permit streamlining you really start narrowing it to where if you want 

to do something that is practical, that is it. 

Mr. BACHUS. All right. Thank you. 

And I will say, Mr. Weissman, too big to fail, I think Chairman 

Bernanke again testified yesterday that it was causing some distortions. 

I can conclude the hearing. However, we don’t have votes. And 

if Members would like to have a second round of questions. 

Mr. COHEN. Can I go to the dentist instead? 

Mr. BACHUS. Dentist? To the dentist? Sure. Sure. And I don’t 

know if Mr. Garcia wants to stay. 

Mr. GARCIA. Mr. James, I don’t want you to take offense to my 

questioning. I do understand. And I know how tough it is to have 
145 

revenue that you want to put into your city. You know, I appreciate 

the Chairman and talking about social services. There is nothing 

more that heartens me more than to have Republicans talk about 

a social safety net provided by a competitive model that doesn’t 

work, which of course implies subsidization, which I am sure Mr. 

Greenblatt would love to pay taxes for. And then Mr. Weissman 

would agree to, Mr. Kovacs would object to, Mr. Glicksman would 

justify, and Mr. Holtz-Eakin would say you are all crazy. All right? 

So the reality here is that we all want what is best for our country. I would suggest to you that when you are looking at a power 

plant of that age, you are done. It has nothing to do with regulation. But it is easier for your local power plant, which contributes 

to your local chamber of commerce, which is an essential element 

to your community, to blame it on us in Washington. Everybody 

blames it on us in Washington, and most of the time they are right. 

But you are at a point where, I would suggest to you, you know, 

use the power of your office to find an alternative process, because 

you are going to get yourself in trouble, right? To depend on keeping a power plant open at this timeframe with the innovations that 

the market has created in energy. We are about to experience an 

energy boom in our country that is going to make Mr. Greenblatt 

more productive, is going to create more customers for the Chamber of Commerce, and is going to give Mr. Glicksman and Mr. 

Weissman more work trying to regulate. 

But the reality is that we are looking at a renaissance. And so 

I say this just so you are aware of it, because we sometimes are 

misled by community leaders who feel, it is unfortunate, but 60- 

year-old coal-fired power plants are usually a little bit behind the 

time. And that is all I wanted to make a point about. 

Mr. BACHUS. All right. Thank you. 

Mr. Marino, do you? 

Mr. MARINO. No, my gift to everybody is I have no questions. But 

thank you. It was very interesting and I learned a great deal today. 

Thank you. 

Mr. BACHUS. Thank you. 

Mr. Collins. 

Mr. COLLINS. Thank you, Mr. Chairman. We have disagreements 

across the aisle here, and I understand that. I used to be in the 

industry as well with smokestack monitoring and other things. 

Right now we are cleaner than we have ever been. And I agree, 

there is regulations that need to be in place. But to say that, and 

to attack a 60-year-old plant, you can come to Georgia, we have got 

less than 60-year-old plants that are looking to close. And they are 

closing because of regulation. Okay. And you understand that, and 

I respectfully agree. 

The problem is here is there is a regulatory issue and there is 

regulatory problems. There is a balance that needs to be struck. 

And right now, from my perspective, there is—and we have heard 

testimony today that there is areas that we can agree on or disagree on, but there is an effect. And that is why I appreciate Mr. 

James and Mr. Greenblatt and others, and also the professors who 

are here and from the chamber discussing this in an open format. 

I think the interesting question is, when you talk about investment, and the discussion I think my other colleague from across 
146 

the aisle said, well, we wanted to put more EMS and more firefighters and teachers. Well, we are doing that with borrowed 

money, and we are also doing it with strings attached. We are talking about regulatory reform here. And we are going to add that together. One last sort of question, Mr. Greenblatt, the $15,000, which was 

made sort of light of in the fact that you have a very successful 

company and that. Were you able to calculate how much—you said 

mission essential—how much do you think you lost, in addition to 

whatever you may have ended up paying, what did you time-wise, 

do you even have a calculation of what actual cost, not just to do 

this, but just the distraction factor here? 

Mr. GREENBLATT. My CFO had to spend 15 to 20 hours, you 

know, on hold, discussing, negotiating with the IRS. We had to 

write letters. We had to get our accountant involved. It was thousands of dollars. And, you know, that CFO could have been doing 

job costing so we could quote the next job well, you know. He could 

have been negotiating with our vendors, all productive tasks. Instead, he is doing things that add no value. And we are fighting 

with China every day. So we need to have a very streamlined system so that we can be more competitive so we can export more and 

hire more locals. 

Mr. COLLINS. I know this has been many hearings, and I am new 

and have not been a part of the 17 hearings, but to me if we do 

17 hearings, if doing 17 hearings makes a difference in job creation, job growth, and a better government, then let’s have 17 

more. Let’s get it done. Because our people are looking for that. 

They are not looking for anything else. And I appreciate my friends 

across the aisle in discussing this. And we will have more discussions as we go, Mr. Chairman. I yield back. 

Mr. GARCIA. Mr. Chairman, if I could. With all respect to the 

gentleman from Georgia, I would love to sit here and, you know, 

work on regulatory reform. You know, we know it is broken. But 

all government is broken. It is the nature of why we have a Congress. We have to meet regularly to fix it. But there is no question 

that cool heads can prevail, not declare war, whether it be Obama 

or other Presidents that may have declared war. I didn’t even know 

that he had invoked the war powers, because we certainly didn’t 

vote it out of Congress. 

But my hope would be that on all of this that reasonable men 

and women sitting in this chamber can agree that there are huge 

swaths of—that Mr. Greenblatt is filling out a form should be absurd to all of us, right? With our computer technology, that he has 

to sit there and do this. And I am more than happy, if the Chairman wants to convene a working group, or if we want to set—I am 

a freshman. We are not doing anything here anyway. 

So the reality is that we have time to sit down and try to work 

on these solutions. And I am sure that the Chamber of Commerce 

would give us lodging space and lock us in a room and feed us 

every once in a while. But we understand there is regulation and 

then there is excessive regulation. There are rules that have been 

there too long. There are billions of dollars of unnecessary loopholes that no longer make sense. And we could be working on all 

of this. Yet we have had this week our sum total of important vote 
147 

was naming a space center after Neil Armstrong, which is a wonderful thing. 

Mr. BACHUS. We actually approved the journal, too. 

Mr. GARCIA. On a recorded vote. 

Mr. BACHUS. Mr. Cohen? 

Mr. COHEN. Let me ask one small question, and we probably 

shouldn’t be lost in the weeds. But Mr. Greenblatt, I was concerned, $15,000 for a signature. Was that signature one that if you 

would have signed it you would have put yourself under some penalty or some oath that by signing here you are indicating that everything above is subject to penalties? Was it one of those type signatures that by not signing it—— 

Mr. GREENBLATT. It was a form we received in 2006. And in 

2010, we got the fine. So there was this empty time where nothing 

happened. 

Mr. COHEN. Right. 

Mr. GREENBLATT. And I had to sign the form in three different 

places. It was for our 401(k) program. And, you know, so I hit two 

of the three. I missed the third. 

Mr. COHEN. So when you failed to sign it, you had gone through 

two administrations. That was the Bush administration that levied 

the fine? 

Mr. GREENBLATT. Yeah. I mean, the point is it is paperwork—— 

Mr. COHEN. I know, it does seem absurd. 

Mr. GREENBLATT. We are trying to grow jobs. We are fighting 

China and Mexico. 

Mr. COHEN. And you have done a great job, and I hope that 

Tulane stays in the Big East with Memphis, and we will have 

many good games in the future. 

Mr. BACHUS. Thank you. Thank you. 

This concludes today’s hearing. Thanks to all our witnesses for 

attending. Without objection, all Members will have 5 legislative 

days to submit additional written questions for the witnesses or additional materials for the record. 

This hearing is adjourned. And I will say this. We are going to 

take up, Mr. Garcia, and get a working group together and invite 

some of you in on those discussions in a balanced approach. Thank 

you. 

[Whereupon, at 11:10 a.m., the Subcommittee was adjourned.] 

(149) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Spencer Bachus, a Representative in 

Congress from the State of Alabama, and Chairman, Subcommittee on 

Regulatory Reform, Commercial and Antitrust Law 

Since the November 2012 election, the Obama Administration has moved into 

overdrive in its regulatory war on jobs, the economy, and America’s global competitiveness. 

Let me be clear. Congress cannot sit silent while America’s economic growth is 

imperiled. One of my top priorities in this Congress will be to do everything possible 

to reduce the regulatory burdens that our nation’s small businesses are facing, to 

get more Americans back to work, and to help grow our economy. 

A study last summer by the Organization for Economic Cooperation and Development revealed that after measuring countries by the number of regulations they 

have, ‘‘it is now easier to start a business in Slovenia, Estonia and Hungary . . . 

than in America.’’ 

According to former CBO Director Douglas Holtz-Eakin, countries from England, 

to South Korea to Portugal have already undertaken regulatory reforms. England 

has been particularly aggressive, adopting a ‘‘one in two out’’ rule for new regulations, which requires policymakers introducing a new regulation to rescind or modify an existing regulation that costs double so the total regulatory burden is actually 

reduced. 

The governments of our international competitors are not merely paying lip service to lightening the regulatory load, they are taking meaningful actions. We seem 

to be moving in the opposite direction. 

Last fiscal year, the total U.S. paperwork burden grew by more than 355 million 

hours, or four percent. 

A 2012 report by NERA Economic Consultants on the regulations affecting the 

manufacturing sector found that exports in 2012 might have been as much as 17% 

lower than they would have been without the estimated regulatory burden. Such 

loss in output directly represents lost jobs and economic opportunities. 

Instead of the regulatory burden diminishing to keep American businesses competitive and hiring, experts expect the pace of regulation to increase in President 

Obama’s second term. 

Just prior to Election Day, the National Journal reported that ‘‘[f]ederal agencies 

are sitting on a pile of major health, environmental, and financial regulations that 

lobbyists, congressional staffers, and former administration officials say are being 

held back to avoid providing ammunition to Mitt Romney and other Republican critics.’’ Now the floodgates are open. For example, the Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act 

created a host of regulatory obligations which agencies have yet to fulfill. 

Similarly, the American Action Forum identified $123 billion in possible regulations in the Administration’s 2012 Unified Regulatory Agenda that would also add 

more than 13 million hours of paperwork burden. It is no wonder the Administration delayed releasing this agenda, and its plans for 128 new ‘‘economically significant’’ regulations until after the election. 
150 

What is most striking perhaps is this Administration’s insensitivity to the negative effects overregulation has on vulnerable groups. Overregulation costs Americans jobs and a new study shows agencies’ cost benefit analyses fail to consider that 

over 75% of older workers who lose their jobs remain unemployed three years later 

and those who can find work frequently must accept as much as 20% less pay. 

Overregulation also disproportionately burdens low income households. Because of 

the law of diminishing returns, new regulations require spending increasingly more 

money to mitigate increasingly smaller risks. Many of these costs are passed down 

to consumers. New research from the Mercatus Center shows low income households would be much better off spending this money mitigating more immediate personal risks, for example, by using money that should rightfully be theirs to afford 

rents in safer neighborhoods. 

In light of these very real trade-offs, I am deeply concerned that some pro-regulation advocates are calling for an Executive Order to ‘‘rescind requirements’’ that 

there be cost-benefit analyses of significant regulations. I hope that stories from 

Main Street about the negative impacts plant closures have on lives and communities will help sensitize regulators and their allies to the very real suffering that 

even well-meaning regulatory advocacy can impose. 

However, we cannot rely on hope to turn the tide of excessive regulation. I am 

committed to restoring accountability and providing relief from excessive regulation 

to our nation’s small businesses and job creators who need it most. 

Last Congress, the Committee reported a number of important and far-reaching 

bills to reform overregulation, ease the burden on jobs and the American economy, 

and restore America’s competitiveness. The House passed them all, but the Democrat-led Senate refused to act and President Obama threatened to veto them. 

The overreach of Obama Administration regulations is one of the chief reasons the 

economy has failed adequately to recover and produce new jobs throughout the 

Obama Administration. Congress and the President must act to take a different direction that will allow America’s jobs, economy, and competitiveness to be restored. 

The House will do its part, and for the sake of our economic future, I call on the 

Senate and the Obama Administration to do theirs. 

f 

Prepared Statement of the Honorable Steve Cohen, a Representative in 

Congress from the State of Tennessee, and Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law 

On a typical day, I wake up, brush my teeth, take a shower, maybe have some 

breakfast, get dressed, and go outside to where I parked my car, which I drive to 

work. 

I then spend most of the day at the office, in hearings, on the House floor, or 

meeting constituents. I will grab some lunch and dinner when I find the time. 

At the beginning and end of the week, whenever the House is in session, I get 

on a plane, as I will this afternoon, to travel between Washington and Memphis. 

I can do all this without thinking twice about whether any of those activities will 

expose me to a high risk of harm. 

The reason I can take my well-being for granted in these day-to-day activities is 

because our Nation has a strong regulatory system, one that strives to protect our 

environment and our health and ensure the safety our workplaces, our public 

spaces, our consumer products, our cars, and our airplanes, among many other 

things. 

Yet the regulatory debates in this Subcommittee over the last couple of years have 

been focused almost exclusively on the costs of implementing regulations. It is often 

left to those of us on this side of the aisle to point out not only that there are benefits to regulation, but that those benefits consistently outweigh regulation’s costs. 

In addition to ignoring the net benefits of regulation, those who focus solely on 

regulatory costs also tend to ignore the even greater costs of regulatory failure. As 

two of our witnesses—Robert Glicksman of George Washington University Law 

School and Robert Weissman of Public Citizen—will discuss in greater detail, regu-
151 

latory failure is far more costly for the economy and for society than the existence 

or creation of new regulations. 

We must not forget that it was the lack of adequate regulation which caused the 

Deepwater Horizon oil spill, the Sago Mine disaster, the mortgage foreclosure crisis, 

and the 2008 financial crisis and Great Recession that followed. 

In short, there is a far greater human and economic cost to stopping agencies 

from regulating than there is to allowing new regulations to take effect. 

I will leave the rest of the discussion to our witness panel and to our question 

time, but I would like to offer this plea. 

We ought to be able to have a serious, substantive, and nuanced discussion about 

what problems exist in the federal regulatory system and what Congress ought to 

do to address those problems. 

But so long as we continue to hold hearings with inflammatory and partisan titles 

like this one, where the premise suggests that the debate should revolve only 

around regulatory costs, such a discussion will be difficult to have, as it only invites 

defensiveness and conflict. 

We will, as we did last Congress, devolve into a hollow debate, a battle of talking 

points, without really engaging each other. 

I hope that we can do better going forward. 

f 

Prepared Statement of the Honorable Bob Goodlatte, a Representative in 

Congress from the State of Virginia, and Chairman, Committee on the Judiciary 

Since the November 2012 election, the Obama Administration has moved into 

overdrive in its regulatory war on jobs, the economy, and America’s global competitiveness. 

Let me be clear. Congress cannot sit silent while America’s economic growth is 

imperiled. One of my top priorities in this Congress will be to do everything possible 

to reduce the regulatory burdens that our nation’s small businesses are facing, to 

get more Americans back to work, and to help grow our economy. 

A study last summer by the Organization for Economic Cooperation and Development revealed that after measuring countries by the number of regulations they 

have, ‘‘it is now easier to start a business in Slovenia, Estonia and Hungary . . . 

than in America.’’ 

According to former CBO Director Douglas Holtz-Eakin, countries from England, 

to South Korea to Portugal have already undertaken regulatory reforms. England 

has been particularly aggressive, adopting a ‘‘one in two out’’ rule for new regulations, which requires policymakers introducing a new regulation to rescind or modify an existing regulation that costs double so the total regulatory burden is actually 

reduced. 

The governments of our international competitors are not merely paying lip service to lightening the regulatory load, they are taking meaningful actions. We seem 

to be moving in the opposite direction. 

Last fiscal year, the total U.S. paperwork burden grew by more than 355 million 

hours, or four percent. 

A 2012 report by NERA Economic Consultants on the regulations affecting the 

manufacturing sector found that exports in 2012 might have been as much as 17% 

lower than they would have been without the estimated regulatory burden. Such 

loss in output directly represents lost jobs and economic opportunities. 

Instead of the regulatory burden diminishing to keep American businesses competitive and hiring, experts expect the pace of regulation to increase in President 

Obama’s second term. 

Just prior to Election Day, the National Journal reported that ‘‘[f]ederal agencies 

are sitting on a pile of major health, environmental, and financial regulations that 

lobbyists, congressional staffers, and former administration officials say are being 

held back to avoid providing ammunition to Mitt Romney and other Republican critics.’’ Now the floodgates are open. For example, the Patient Protection and Afford-
152 

able Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act 

created a host of regulatory obligations which agencies have yet to fulfill. 

Similarly, the American Action Forum identified $123 billion in possible regulations in the Administration’s 2012 Unified Regulatory Agenda that would also add 

more than 13 million hours of paperwork burden. It is no wonder the Administration delayed releasing this agenda, and its plans for 128 new ‘‘economically significant’’ regulations until after the election. 

What is most striking perhaps is this Administration’s insensitivity to the negative effects overregulation has on vulnerable groups. Overregulation costs Americans jobs and a new study shows agencies’ cost benefit analyses fail to consider that 

over 75% of older workers who lose their jobs remain unemployed three years later 

and those who can find work frequently must accept as much as 20% less pay. 

Overregulation also disproportionately burdens low income households. Because of 

the law of diminishing returns, new regulations require spending increasingly more 

money to mitigate increasingly smaller risks. Many of these costs are passed down 

to consumers. New research from the Mercatus Center shows low income households would be much better off spending this money mitigating more immediate personal risks, for example, by using money that should rightfully be theirs to afford 

rents in safer neighborhoods. 

In light of these very real trade-offs, I am deeply concerned that some pro-regulation advocates are calling for an Executive Order to ‘‘rescind requirements’’ that 

there be cost-benefit analyses of significant regulations. I hope that stories from 

Main Street about the negative impacts plant closures have on lives and communities will help sensitize regulators and their allies to the very real suffering that 

even well-meaning regulatory advocacy can impose. 

However, we cannot rely on hope to turn the tide of excessive regulation. I am 

committed to restoring accountability and providing relief from excessive regulation 

to our nation’s small businesses and job creators who need it most. 

Last Congress, the Committee reported a number of important and far-reaching 

bills to reform overregulation, ease the burden on jobs and the American economy, 

and restore America’s competitiveness. The House passed them all, but the Democrat-led Senate refused to act and President Obama threatened to veto them. 

The overreach of Obama Administration regulations is one of the chief reasons the 

economy has failed adequately to recover and produce new jobs throughout the 

Obama Administration. Congress and the President must act to take a different direction that will allow America’s jobs, economy, and competitiveness to be restored. 

The House will do its part, and for the sake of our economic future, I call on the 

Senate and the Obama Administration to do theirs. 

f 
153 

Prepared Statement of the Honorable Doug Collins, a Representative in 

Congress from the State of Georgia, and Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law 
154 

f 
155 

Prepared Statement of the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law 

This politicized hearing is yet another example of a Majority more interested in 

attacking the President than providing thoughtful solutions to our Nation’s most 

pressing issues. 

This hearing purports to explore solutions to growing the economy, creating jobs, 

and increasing America’s competitiveness internationally. These are all worthy, 

laudable goals. But we cannot pretend that this hearing is about economic growth 

or American prosperity. 

The Majority pre-supposes that regulations have harmful effects, despite ample 

evidence from leading bipartisan and non-partisan reports have found the opposite. 

The Majority continues to rely on studies that are partisan or have been debunked, 

and overlooks the public benefits associated with regulation. For instance, the BP 

oil spill costs tens of billions in damages to the Gulf of Mexico and the Gulf Coast 

communities. Likewise, the 2008 Wall Street collapse stemmed from an avoidable 

lapse of financial regulation, costing trillions and collapsing the global economy. 

These costs far exceed the cost of paperwork or compliance, and are only recent examples. 

We have already heard testimony on the issue in numerous hearings in the Committee and this Subcommittee. We have debated these issues tirelessly. And now, 

instead of addressing important issues, this Do Nothing Congress is using yet another hearing in its attempt to discredit President Obama. 

If this body does not address sequestration, American workers will face yet another hurdle to providing for their families and realizing the American dream. This 

mindless austerity takes a meat-cleaver approach to cutting programs, regardless of 

the wisdom of doing so or the long-term costs that these cuts would create. Indeed, 

the only plan that the Majority has advanced is one that would not stem job loss, 

but one that would cut the programs that help the unemployed, the sick, and the 

poor. Sequestration threatens to forestall economic recovery, amplifying the effects 

of the recession on so many Americans. 

If the Majority was truly concerned with growing the economy, creating jobs, and 

protecting American competitiveness, we would have come together with a Grand 

Bargain of spending cuts to address the government’s long-term budget deficits and 

prevented sequestration long ago. Instead, sequestration will arbitrarily take 85 billion dollars of out our economy, lower our GDP, cost jobs, and harm our economic 

recovery and global competiveness. The Republican leadership failure will be felt nationwide, and its impact on my home state of Georgia is of grave concern to me. 

We cannot pretend that this hearing is about growing the economy or creating 

jobs. 

I also take considerable issue with the title of this hearing. In a week when this 

Committee discussed terrorism at length in a hearing on drones and national security, the title of this hearing belittles the great sacrifices our brave men and women 

in the military have made in support of our country’s security. I ask that the Majority consider the hardships and sacrifices that so many Americans have made when 

using the words ‘‘regulatory war.’’ 

f 
156 

Material submitted by the Honorable Hakeem Jeffries, a Representative in 

Congress from the State of New York, and Member, Subcommittee on 

Regulatory Reform, Commercial and Antitrust Law 
157 
158 
159 
160 
161 

f 
162 

Response to Questions for the Record from Robert L. Glicksman, J.B. & 

Maurice C. Shapiro Professor of Environmental Law, The George Washington University School of Law 
163 
164 
165 

f 
166 

Response to Questions for the Record from Drew Greenblatt, 

President and Owner, Marlin Steel Wire Products, LLC 
167 
168 

f 
169 

Response to Questions for the Record from Robert K. James, 

Member of the Avon Lake City Council 
170 

f 
171 

Response to Questions for the Record from Douglas Holtz-Eakin, 

President, American Action Forum 

f 
172 

Response to Questions for the Record from William L. Kovacs, Senior Vice 

President, Environment, Technology & Regulatory Affairs, U.S. Chamber 

of Commerce 
173 
174 

f 
175 

Response to Questions for the Record from Robert Weissman, 

President, Public Citizen 
176 
177 
178 

Æ