Dr. ASHFORD. No; I certainly don't. I am not an economist, but there are many economists who in fact do take the position that these techniques ought to be used with great trepidation.

Senator RIBICOFF. I think your work for the committee is valuable. It will present another point of view. I guess you are the only one that presents this point of view. Do we have anybody else? Dr. ASHFORD. I wonder if I might make a point.

Senator RIBICOFF. That doesn't mean that you are wrong or the others are right. I am very intrigued with this.

Dr. ASHFORD. Let me make one comment, if I might. The issue of judicial review, since you are very interested in it. Let me go on record that I am not as optimistic as the learned colleagues on the bench about the issue of judicial review.

I think it is inevitable that these analyses end up being submitted as part of the record in the hearings on the standards. I think it is inevitable that the courts will consider the public and private response to these regulatory impact analyses in order to determine whether the agency had exercised its obligation to base its decision concerning a standard on substantial evidence.

I think the judicial review will come in through the back door and I am seriously concerned about your attempt to limit judicial review not going far enough. I don't believe I have any creative solutions to tell you about how to prevent it from coming in the back door or to have posthearing influential expert maneuvering which did accompany, I am afraid, economic impact statements in the past.

We believe in the open process. I think that is what we are all here for. I am very concerned about that being frustrated as a result of a formal requirement either through the Presidential directive or through congressional requirements for regulatory impact analysis. I am concerned. I know you are concerned, too. Senator RIBICOFF. Thank you, very much, Doctor. We look forward to your work for the committee because there should be the other point of view. Everybody is talking about the costs, no one talks about benefits.

It may be hard to get costs data, it may be just as hard to find data or the benefits.

Thank you, very much.

[Whereupon, at 11:25 a.m., the committee recessed, to reconvene at the call of the Chair.]

REGULATORY REFORM LEGISLATION

FRIDAY, MAY 18, 1979

U.S. SENATE,

COMMITTEE ON GOVERNMENTAL AFFAIRS,

Washington, D.C.

The committee met at 10 a.m., pursuant to notice, in room 3302, Dirksen Senate Office Building, Hon. Carl Levin presiding. Present: Senator Levin.

Senator LEVIN. The committee will be in order. Good morning. This morning, the Committee on Governmental Affairs holds its 7th day of hearings in this Congress on the regulatory reform legislation before this committee. This legislation is designed to make the regulatory process more accountable, more expeditious, and more effective.

Today, we will hear testimony on S. 262, S. 755, S. 445, and S. 93 from a panel of representatives of consumer and public interest groups, small business, industrial companies, and trade associations.

The witnesses we have listed are as follows and forgive me if I mispronounce a name or two. I will call them in alphabetical order. I appreciate all of you being part of a round table so we can have a discussion here this morning rather than just have one of you testify. I understand that that was the way the invitations were framed.

Jackson Browning, who is corporate_director for health, safety, and environmental affairs at Union Carbide Corp., representing the American Industrial Health Council; Charles J. Carey, president of the National Food Processors Association; John A. Fitch, Jr., director of government affairs, National Society of Public Accountants, representing the Small Business Legislative Council of the National Small Business Association, accompanied by Jerome Gulan; Kathleen O'Reilly, executive director, Consumer Federation of America; Frank Rader, representing Interstation Natural Gas Association of America and American Gas Association, Washington, D.C., accompanied by Richard Rosan, consultant to American Gas Association; Anthony Roisman, who is not here yet, staff attorney, Natural Resources Defense Council; Mark Silbergeld, director, Washington office, Consumers Union.

Because of the fact that we have limited time and because we want an interchange between witnesses, we would appreciate your summarizing your prepared statements. The full text of each statement will, of course, be made a part of the hearing record.

We also welcome comments on each others comments and answers. It will be helpful to us for that kind of exchange to take place.

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We are hoping to cover a number of important issues here today. including the following. The contents of and the accountability for the regulatory analysis which are provided for in these bills; the relationship between the rulemaking record and the regulatory analysis; reform of notice and comment; rulemaking provisions of section 553 of the Administrative Procedure Act; the question of ex parte communications between agency decisionmakers and interested parties; ways and means to increase public participation in agency rulemaking; expediting agency adjudications by limiting cross-examination, regulatory flexibility proposals, and the constitutionality and practicality of the legislative veto.

We may get into that even though that is not part of the bills before us because of my particular interest in that area.

Let's begin. I don't think there was an agreed upon order for the witnesses. So why don't we go in alphabetical order.

Mr. Browning?

TESTIMONY OF JACKSON B. BROWNING, CORPORATE DIRECTOR FOR HEALTH, SAFETY, AND ENVIRONMENTAL AFFAIRS, UNION CARBIDE, REPRESENTING THE AMERICAN INDUSTRIAL HEALTH COUNCIL

Mr. BROWNING. I am Jackson B. Browning, corporate director of health, safety and environmental affairs for Union Carbide Corp. Senator LEVIN. Before you proceed, I would ask that each of you limit your comments if possible to 5 minutes and again I assure you that your entire statement will be made a part of the record. Mr. BROWNING. I am here on behalf of the American Industrial Health Council-AIHC-and I wish to express appreciation for the opportunity to testify on the chairman's bill, S. 262, and the other proposed regulatory reform measures before the committee.

Our testimony addresses the sections of the bills dealing with the performance of a regulatory analysis. We have considerable firsthand experience with the issues raised by those provisions.

The other provisions of the bills before the committee are significant and individual members of AIHC have serious concerns about certain provisions in some bills, for example, public funding of intervenors in regulatory proceedings. However, AIHC does not intend to comment on those provisions at this time.

AIHC is an organization of over 120 American companies and 60 trade associations, including producers of chemicals, steel, aluminum, textiles, pharmaceutical products, oil, and consumer goods. We are coordinating our scientific and administrative resources to help the Federal Government develop scientifically valid and reasonable methods for dealing with chronic health hazards.

When AIHC was established in October 1977, OSHA was in the process of developing a generic regulation for the identification, classification, and regulation of carcinogens in the workplace. OSHA has not yet issued a final regulation but it has indicated it will do so in the near future.

The OSHA rulemaking proceeding provides an excellent example, or case study, of how the regulatory analysis requirements of S. 262 could improve the Federal regulatory decisionmaking process and reduce the present high cost of regulation.

The OSHA proceeding also highlights the need for certian modifications in the proposed legislation in order to accomplish fully the objectives of the committee.

Our written testimony, which I will submit for the record, relates in depth our experience with OSHA's generic carcinogen rulemaking proceeding and our suggestions for regulatory reform. In my oral remarks I wish to bring only the main points to the committee's attention.

OSHA's proposed carcinogen regulation is referred to as a generic regulation because it will establish rules by which substances will be identified and controlled as carcinogens. Consideration of issues similar to those embodied in these rules will be prohibited in future proceedings aimed at setting standards for specific substances.

The proposed generic regulation would determine to a large extent the exposure control mechanisms to be mandated for specific substances. It is clear that broadly applying OSHA's proposed controls would cost billions of dollars.

When OSHA proposed its generic carcinogen regulation, it did not make any estimates of the benefits the regulation would produce or the costs it would require industry to bear or the economic impact it would have upon the economy.

OSHA also did not analyze alternative approaches for reaching its objectives. During the comment period, AIHC proposed an alternative that would be more effective and less costly than OSHA's approach. We also submitted a preliminary cost analysis of the OSHA proposal and a suggested methodology for a complete economic impact analysis.

At the urging of OMB, OSHA conducted a regulatory analysis pursuant to Executive Order 12044, upon which the present bills are modeled. However, the analysis made no attempt to evaluate alternatives or to estimate benefits or costs associated with the proposed generic regulation. Furthermore, it was not made available until the close of the public comment period on the proposed regulation.

I would like to make these points specifically.

First, the beneficial effects of the regulation should be reasonably related to the economic and societal costs.

The performance of a regulatory analysis will not significantly improve the regulatory decisionmaking process if it becomes merely an academic exercise to justify a predetermined decision. To prevent this, the regulatory analysis should be made a significant part of the decisionmaking process.

AIHC therefore recommends that S. 262 require that a regulatory analysis include an analysis of both the beneficial effects and economic and societal impacts of each alternative approach considered by the agency, whether or not existing law requires such an analysis.

We also recommend that S. 262 require that the benefits of the alternative chosen be reasonably related to its compliance costs. We also favor including provisions which would require agencies to use the most cost-effective approach to reach regulatory objectives. However, the most cost-effective means of achieving a particular regulatory objective may have an economic impact that is