4) 5) 6) "Econometric Simulation and Impact Analysis Model of the "Steel and the Environment - A cost Impact Analysis", 1975 "The Potential Economic Impact of U. S. Regulations on the Please let me know if I, or the American Industrial Health Council can be of further assistance to the Committee. Very truly yours, CC: Senator Carl M. Levin し Jackson Browningty Mr. BROWNING. Thank you. Senator LEVIN. Thank you, very much, Mr. Browing. TESTIMONY OF CHARLES J. CAREY, PRESIDENT, NATIONAL Mr. CAREY. Thank you. I am Charles Carey, president of the National Food Processors Association, and I am accompanied by Edward Dunkelberger of Covington & Burling, our general counsel. I will not try to go over all of the points covered in our written testimony but I would like to hit some of the highlights and points that we consider most important. The food processing industry is particularly aware of the tremendous growth in Federal regulatory controls. As a consumer goods industry, processing agricultural commodities for national distribution, we have found ourselves regulated from the field to the retail shelf by a wide variety of specialized regulatory controls. Although much of this regulation has provided significant benefits, we are gravely concerned with the growing enthusiasm on the part of some for additional regulations with only casual attention to the determination of their need and no attention to the costs which they impose. Accordingly, we applaud the consideration that this committee is giving to regulatory reform legislation, and we urge, in the strongest possible terms, that effective legislation be moved toward enactment in this session. Let me touch on some of the key aspects of the legislation, without trying to cover all the points set forth more fully in our written statement. We endorse the approach of S. 262 and S. 755 enacting the regulatory analysis requirement as part of the Administrative Procedure Act. We feel it is vitally important that this requirement be fully coordinated with existing statutory and judicial requirements relating to the rulemaking process. Clearly the heart of these bills is the requirement that an agency prepare an analysis of projected benefits and adverse economic and other effects of a proposed rule. The wording of S. 755 in this respect is both appropriate and reasonable. S. 262 is extremely limited, however, for it requires only that an agency describe and analyze those effects which it is otherwise permitted by law to take into account. In our view, such a requirement does little more than restate existing law. We believe it is vitally important that agencies be required to undertake an analysis of the costs and other economic effects of regulations they are proposing, whether or not the statute in question authorizes the agency to consider such economic factors in promulgating the rule. The public, the Congress, and the executive branch are entitled to know what costs will be created by new major regulatory requirements. In many instances there may be no question as to justification for the rule even when the costs are great, but that is an issue of public importance on which citizens are entitled to be informed. A related issue concerns whether agencies will be required or authorized to give some consideration to economic effects in promulgating major rules. Both S. 262 and S. 755 permit an agency to take economic effects into account only to the extent that the statute under which the agency is acting authorizes consideration of those effects. In our view, a basic requirement of regulatory reform legislation should be an explicit provision to the effect that Federal agencies must take into account the factors considered in the regulatory analysis in reaching their decisions and promulgating final regulations. S. 93, as introduced by Senators Eagleton and Nelson, would require that Federal agencies carefully consider the effects of the regulation upon private and public sectors. Under this approach, the economic consequences of a health or safety regulation would by no means override the fundamental basic statutory purpose, but the agency would be required to analyze projected economic effects and to give these at least some consideration in developing regulatory priorities, formulating specific requirements, choosing among alternatives, and establishing deadlines. The Food and Drug Administration together with the U.S. Department of Agriculture and the Federal Trade Commission is engaged right now in a painful examination of all the ingredient and nutritional labeling requirements which have been enacted or are being proposed for food products. Although the study has not been completed in all its several parts, it is already clear that the existing elaborate regulatory design for nutritional labeling does not provide any significant service to the public. This revelation is doubly painful when you realize that the very heavy cost of implementing nutritional labeling the first time was wasted and now a comparably heavy cost will be incurred to implement any new regulatory program. One of the subjects covered in this far reaching examination was a pair of regulatory proposals on which we have developed detailed cost information. Drained weight and fill weight are alternative methods of measuring the solid portion of canned foods, as opposed to packing medium. It is highly questionable whether any significant percentage of the public has an interest in this additional information about canned foods, but there is no question that the public is totally disinterested in the subtle, technical differences between the two methods. Yet drained weight labeling as proposed by FDA in response to a Consumer Union petition would cost over $125 million annually while the fill weight labeling alternative would cost onetenth as much. Finally, we are greatly concerned by the fact that both S. 262 and S. 755 expressly preclude judicial review of any issue concerning an agency's compliance with the regulatory analysis requirement. The purpose of these provisions is apparently to avoid unduly burdensome litigation, but we believe the bills go so far in this direction as to threaten the effectiveness of the regulatory analysis requirement. The pending legislation before this committee should be of significant help to those agencies which presently try to be reasonable and use good judgment in the promulgation of regulations—as FDA seems to be doing-by providing them with the clear mandate to do So. But the major thrust of the final version of this legislation should be toward controlling those which have tended to promulgate regulations that reflect the personal philosophy of the administrators, or advance the bureaucratic ambitions of their agencies. In the absense of judicial review, this law may serve the first purpose but do little to achieve the second and paramount objective. Once again, let me express our appreciation for this opportunity to testify on these extremely important legislative proposals. Thank you. [The prepared statement of Mr. Carey follows:] Statement of Charles J. Carey, President of the National Food Processors Association Before the Senate Governmental Affairs Committee On S. 262, S. 755 and Related Regulatory Reform Legislation May 18, 1979 My name is Charles J. Carey, and I am President of the National Food Processors Association, a national trade association representing almost 600 members who pack about 85 percent of the national production of canned fruits, vegetables, meats, specialties and fish, as well as a substantial volume of other processed foods. Speaking on behalf of NFPA and its members, we very much appreciate the opportunity to testify on S. 262, S. 755 and related regulatory reform legislation, and in particular on the regulatory analysis provisions of those bills. The support of the National Food Processors Association for the regulatory analysis concept of these bills reflects the continuing interest of the Association and its members in the establishment of procedures under which federal agencies would be required to evaluate the economic impact and cost-benefit effectiveness of their regulations and programs so that unreasonable and unnecessary burdens on the productive capacity of the nation's industries may be avoided. Almost five years ago at the Agriculture and Food Economic Conference called by the White House, NFPA (then identified as the National Canners Association) expressed concern that "the cumulative effect of the increasing number |