STATEMENT OF SENATOR MIKULSKI

Senator BOND. Before turning to the first panel, I am pleased to turn the podium to my colleague, the distinguished ranking member, who has overcome the traffic problems to join us today. Welcome, Senator Mikulski, and congratulations.

Senator MIKULSKI. Thank you very much, Senator Bond.

As you know, I commute every day from Baltimore, and some days it is easier than others.

I want to welcome the panelists and thank you for conducting this hearing.

About 18 months ago or 2 years ago, the New York Times wrote a series of articles on environmental policy, raising questions, as you have indicated as well, that were concerned about the fact that EPA did not have a strategic plan, was driven by whatever seemed the current media hysteria.

And there was a question of whether we were a regulatory agency rather than an environmental results protection agency.

That is why I asked, when I was the chairman, for the National Association of Public Administrators, whom we had turned to in the past, to give us a report on where we should go.

I want to thank NAPA for conducting the study and doing such a superb job. I think it is to the subcommittee and to the Congress as a whole, and hopefully to the administration, guiding principles how we can protect our environment and yet follow a common sense approach.

I look forward to hearing the panelists and working with you to achieve the goals set forth in the report.

Thank you.

Senator BOND. Thank you very much, Senator Mikulski.

PREPARED STATEMENT

Senator Faircloth has a statement for the record. He asks that we include it, and it will be included as if presented.

[The statement follows:]

PREPARED STATEMENT OF SENATOR FAIRCLOTH

Mr. Chairman, I appreciate the opportunity to make a short statement regarding the testimony of North Carolina Secretary of Environment, Health and Natural Resources Jonathan Howes, and his recent report for the National Academy of Public Administration, Setting Priorities, Getting Results: A New Direction for EPA.

I think the Chairman knows that I am no great fan of government directed studies of government. I think for the most part these studies tend to justify the current bureaucracies and help expand their powers. This study is different. It provides a variety of recommendations to narrow and clarify the mandate of the Environmental Protection Agency.

The Subcommittee would be wise to carefully examine the conclusions of the Report and integrate many of the recommendations into the EPA's fiscal year 1996 budget.

The central problem, which is supported by the Report I believe, is that the EPA has simply taken on more responsibility than the Agency could possibly administer properly. Of course, this is mostly the fault of the Congress. We have passed law after law, and authorized rule after rule, without providing clear guidelines or priorities. The Congress has created a hodgepodge of environmental laws that fulfill the most extreme mandate of the Agency. We have sought to regulate virtually, everything from Washington.

Still, you do not hear the Agency asking for us to reduce its budget or pare back its responsibilities. The very nature of bureaucracy is to consume everything given it and come back for more.

Secretary Howes' report recommends that Congress step back, look at the big picture, and allow the Agency the flexibility necessary to address the serious problems first. While that makes common-sense, it is not the traditional method of federal environmental legislating. For the last 25 years Congress has lurched forward time and again to address public anxiety about the environment. To many times have ignored common-sense and played politics. We have reacted instead of led.

The central conclusion of the NAPA report is consistent with the mandate the voters gave the 104th Congress in November. The states and localities are in many instances best suited to address pollution problems. It is time we allowed states like North Carolina, home to the nation's leading watershed protection program, to address problems rather than simply respond to the Washington mandates.

I hope the Subcommittee follows through with many of the recommendations in Secretary Howes' and the National Association of Public Administrator's report. It is a breath of fresh air.

Senator BOND. I would like to welcome our witnesses this morning.

We will first hear from Dr. Jonathan Howes, the NAPA project chair and secretary of State of North Carolina's Department of the Environment, Health and Resources. Dr. Howes is accompanied by Dr. Alvin Alm, director and senior vice president of Science Applications International Corp. and former EPA Deputy Administrator under William Ruckleshaus. Dr. Alm is here from the NAPA Project. And also with him is DeWitt John of the NAPA staff.

Welcome, Dr. Howes. And may I say that your complete statement has been made a part of the record. We would ask that you summarize your statements, hitting on the high points.

And we will pursue some of those issues and questions, and I do very much appreciate the full testimony that you have submitted.

STATEMENT OF JONATHAN HOWES

Dr. HOWES. Thank you, Senator, and I look forward to seeing that in the record of the hearing.

I apologize for my froggy voice this morning. The laryngitis that I had over the weekend has only partially restored it. So I will do the best I can.

Mr. Chairman, ranking member Mikulski, and other members of the committee, first of all, let me say on behalf of the academy how much I appreciate your kind words about the work of the academy. We were challenged to undertake this task, did it with good spirit, and ourselves are pleased with the product.

We welcome the opportunity to talk with you about the report. I did chair the panel. It included experts in environmental science and management at the Federal, State, and local level.

As you noted, I am a State official now, serving as secretary of the North Carolina Department of Environment, Health and Natural Resources. I was formerly mayor of the town of Chapel Hill, NC.

Al Alm is with me, as you noted, former Deputy Administrator of EPA, and to which on my left was the project manager.

He, along with the rest of the staff assembled, just did an outstanding job, and I give great credit to them for the detail work that went into this report.

The National Academy of Public Administration is a private, nonpartisan, nonprofit organization chartered by the Congress to

strengthen the American institutions and governments. Both Dr. Alm and I are fellows of the academy.

Our report did reveal serious problems in the Nation's management of the environment and a growing consensus on the steps that Congress, the EPA and others need to take to continue to make environmental progress in this country.

Let me just highlight a few of our findings, and I will have a few recommendations at the end for steps that might be taken by this committee. And then I, of course, will look forward to your questions.

First of all, the United States needs a strong and effective EPA. In turn, EPA needs a well-defined and coherent statutory mission and the flexibility to carry it out.

EPA is hobbled by overly prescriptive statutes that pull the agency in too many directions and permit managers too little discretion to make wise decisions.

Its mission should focus on those responsibilities which can best be managed by a Federal agency that is leading the Nation in setting national goals and priorities, setting standards, and conducting research.

Congressional enactment of a coherent mission statement would be ideal because it would give the EPA a durable mandate for change.

Second, EPA and Congress need to reform EPA's relationship with the State and city governments, giving States and cities more flexibility and responsibility for solving local problems.

We call this in our report a system of accountable devolution of national programs. I will talk more in a minute about that accountability could be contained.

Clearly, the States are capable now and are willing, in many cases, to take over the functions from the Federal Government and should have full operational responsibility with no second guessing from EPA.

But let me stress that those States without the capability or political will to assume responsibility, the EPA should continue to exercise intensive oversight to ensure the public health is protected and that States do not victimize other States downwind or downstream.

Third, Congress should pass legislation to authorize a beyond compliance program, which we detail in our report.

Many businesses find it in their interest to meet or exceed environmental standards—and you will hear from one of those later on this morning-but they would like to do it if they can use their own strategies in order to achieve these pollution reduction targets.

Congress should pass legislation urging firms to go beyond mere compliance with EPA regulations in exchange for more leeway and how to meet those standards. The same kind of flexibility could be extended to local governments.

With respect to the agency itself, EPA needs to put its own house in order. It can do this by establishing specific environmental goals and developing strategies to attain them, by using comparative risk analyses to inform the selection of priorities and the development of specific program strategies, by using the budget process to allocate resources to the agency's priorities, and by establishing ac

countability for setting and tracking benchmarks and evaluating performance.

Fifth, the EPA should refine and expand its use of risk analysis and cost-benefit analysis in making decisions. We believe the Congress should ask the agency to explain in significant regulatory decisions in terms of reductions in risk and in terms of other benefits and costs.

Good policy decisions depend on public values and a wide range of concerns that neither risk analysis nor economic analysis can measure well.

Thus, the agency should use risk analyses to inform decisions but not necessarily to drive them. Risk analysis is a tool, not a rule. To improve its risk estimates and to implement the academy's panel proposals for accountable devolution and for regulator flexibility, Congress should create a new bureau of environmental statistics within EPA to compile scientific data about environmental risks, as well as the quality and limitations of these data.

Most importantly, the environmental control effort should be integrated. Many of EPA's problems, including its difficulty in setting priorities in its overly complex regulations, stem directly from the fragmented nature of the Nation's environmental statutes, the congressional authorizing committees and the resulting programmatic stovepipes within the agency and within the States, that are trapped within the States.

EPA and the Congress should make a commitment to ending that fragmentation. You can initiate that process by directing EPA to begin work on a reorganization plan that would break down these internal walls between the agency's major media program offices for air, water, waste, and toxic substances.

Congress should also direct the agency to draft a statute that would integrate the agency's pollution management program, if you will, a comprehensive environmental management program for the United States.

We understand that this is a major set of recommendations and would require major changes in both the way Congress and EPA operates, but we think that the long-term health of the environment and the public institutions that are here to protect it will benefit from that.

Let me suggest a few things for this committee itself. The Appropriations Committee can insist that EPA do a better job of setting priorities, allocating resources and measuring results.

I heard some of that in your opening statement, Mr. Chairman. The committee can ask EPA to rank its programs in terms of their potential to risk cost effectively.

The committee could ask EPA to identify statutory barriers and court-ordered deadlines that inhibit EPA from moving resources from low paying programs to higher paying programs. That exercise could lead to sharper priorities and a more productive set of programs overall.

The committee could also ask EPA to report back periodically on the relative seriousness of remaining environmental risks and the opportunities that EPA and others would have for reducing them. The committee could also accelerate EPA's efforts to provide flexibility to States, cities and to businesses by supporting beyond

compliance, the concept of it, the common sense initiative already launched by EPA and consolidated grants to the States. All those things are underway in some limited way and need conditional support.

The committee could accelerate accountable devolution by investing in the environmental information phase and local capacity building that would make the concept work.

Many of these recommendations are directed at-those recommendations were directed to the committee. Some as well were directed at the leadership of EPA. And again, I heard you speak to that point in your opening statement.

I just want to note that our recommendations would require some changes in EPA's authorizing statutes. Increasing the States' role in Superfund site management and remedy selection, for example, was the subject of a hearing earlier this month in the Senate in which I testified on behalf of the academy.

But you, however, are the only committee with responsibility for integrating all aspects of EPA operations. The Appropriations Committee is in a unique position to speak with authority and importance of working toward more integrated statutes and program offices.

And again, I heard that in your statement this morning, and I was very pleased to do it.

It is our hope-finally, if I can conclude before my voice expires, it is our hope that NAPA recommendations will certainly recognize that all this debate takes place in the context of a political discussion about environmental protection in America, and the tendency of that debate has been to push people to polar extremes.

Our recommendations, we hope, will do the opposite. We hope they will define a common ground on which we all can play.

We concluded that in order to continue to make environmental progress in this country, EPA must change the way it does busi

ness.

I hope our insights are helpful to this committee and that EPA will achieve the goal that most Americans share, which is a healthier, sustainable environment at the lowest possible cost.

PREPARED STATEMENT

Mr. Chairman, as I said, I am accompanied by Al Alm and DeWitt John. Mr. Alm may have a comment or two he wishes to make, and then we look forward to your questions.

Senator BOND. Thank you very much, Dr. Howes.

[The statement follows:]

PREPARED STATEMENT OF JONATHAN HOWES

Mr. Chairman and Members of the Committee: On behalf of the National Academy of Public Administration, I would like to thank Chairman Bond, Ranking Member Mikulski and the other members of this subcommittee for the opportunity to discuss the Academy's recent report to Congress, Setting Priorities, Getting Results: A New Direction for the Environmental Protection Agency. This subcommittee and its counterpart in the House called for the report in the EPA's fiscal year 1994 appropriation bill and Senators Bond and Mikulski jointly released the report on April 11.

I chaired the 11-member panel convened by the Academy to evaluate how EPA sets priorities, allocates resources, analyzes risks, manages its programs, and relates to states, cities, tribes, and the private sector. The panel included experts in