Copyright 1999 Federal News Service, Inc.
Federal News Service
FEBRUARY 2, 1999, TUESDAY
SECTION: IN THE NEWS
LENGTH:
1926 words
HEADLINE: PREPARED TESTIMONY OF
MAURA
KEALEY
DEPUTY DIRECTOR
PUBLIC CITIZEN'S CONGRESS WATCH
BEFORE THE
HOUSE RULES COMMITTEE
LEGISLATIVE AND BUDGET PROCESS
SUBCOMMITTEE
RULES AND ORGANIZATION OF THE HOUSE
SUBCOMMITTEE
BODY:
Good afternoon Mr. Chairman
and Members of the Committee. I am Maura Kealey, Deputy Director of Public
Citizen's Congress Watch. We are a 150,000 member nonprofit organization that
advocates for strong, effective public health and safety protections for
American consumers. I am also testifying today on behalf of Citizens for
Sensible Safeguards, a coalition of more than 300 consumer, public health,
environmental protection, and labor groups. We appreciate the consideration
which Mr. Condit, sponsor of H.R. 350, the Mandates Information Act of 1999, has
shown in meeting with us to listen to our concerns. Nevertheless, we remain
strongly opposed to this legislation.
Here's what we think H.R. 350 will do
in practice:
- It will allow Members of Congress to hide behind a procedural
vote to torpedo vital legislation with strong public support - food safety,
clean air and water, minimum wage increase, patients' bill of
rights - rather than vote it up or down on its merits. To substitute a
proxy vote on an analytical issue for a substantive vote on a policy matter
important to the American people is undemocratic.
- It sends a message to
the American people that as a matter of principle, Congress cares more about
saving private industry money than protecting the public from harm.
H.R. 350
would amend the Unfunded Mandates Relief Act (UMRA) to create a point of order
on the House floor against any legislation that imposes annual private sector
direct costs of more than $100 million. It would also expand the analysis of
federal private sector mandates already required by UMRA to include indirect
costs. The Congressional Budget Office (CBO) would be directed to analyze, when
applicable, the impact of legislation on consumers, workers and small
businesses, including the effect on consumer prices and on the actual supply of
goods and services in consumer markets; on worker wages, worker benefits, and
employment opportunities; and on the hiring practices, expansion, and
profitability of businesses with 100 or fewer employees.
H.R. 350 is based
on faulty logic and a false premise.
Faulty logic: it is simply impossible
to engage in a meaningful consideration of the costs of proposed legislation
separately from discussion of its benefits. It is like basing a discussion of
whether Social Security funds should be invested in the stock market solely on
the question of additional risk, without considering the potential of higher
returns. Or determining whether a pharmaceutical product should be permitted on
the market by evaluating only its negative side effects, without considering its
positive benefits. Reasonable people may disagree about whether the cost is
worth the benefit, or the potential return justifies the risk, or the help a
drug provides outweighs its harm. But strictly as a matter of logic, meaningful
debate on any of these questions requires talking about both halves of the
equation.
In separating - and elevating - consideration of the private
sector costs of legislation but not the benefits, H.R. 350 will create a vehicle
to politicize - and polemicize - any issue on the House floor. But not to
conduct a reasoned and meaningful debate.
False premise: H.R. 350's
proponents have stated that Congress pays insufficient attention to the costs
that proposed legislation may impose on the private sector. Evidence to support
that premise is nonexistent, because it is not so. Congress is awash in
information about the cost of legislation to private industry - some good, much
inflated and propagandistic - but there is simply no evidence that Congress acts
without giving a great deal of consideration to private industry costs.
Not
only does CBO prepare private sector mandate cost statements on all legislation
as is required by UMRA. But the many organizations that have testified in
support of this legislation, including the Chamber of Commerce and the National
Federation of Independent Business, advertise their ability to and effectiveness
in bringing their perspective on potential costs of legislation to Congress'
attention. That is without even considering the analyses and reports prepared by
the Heritage Foundation, American Enterprise Institute, and the Cato Institute -
my apologies to the myriad organizations that specialize in trumpeting the high
cost of government mandates that I do not have time to mention here.
This
record also shows that when proposed legislation or regulation to safeguard the
public from environmental or health and safety hazards is considered, the
prospective costs projected by industry are often wildly inflated. To mention
just three examples:
At the beginning of the Clean Air Act debate in 1970,
Lee Iacocca, then Vice President of Ford Motor Company, proclaimed that the Act
"could prevent continued production of automobiles...(and) is a threat to the
entire American economy and to every person in America."In the 1980s, utilities
claimed that acid rain controls would cost $1,500 a ton; the actual figure is
about $100.
In 1992, Texaco's CEO said cleaner gasoline "may cost as much as
25 cents a gallon." The real cost is 3 to 5 cents a gallon.
The General
Accounting Office, asked by Senators Stevens, Nickles and Glenn and
Representatives Hoekstra and Houghton in 1996 to validate the high costs of
private sector mandates on U.S. companies, was unable to do so. With the
assistance of business trade associations and the Small Business Administration,
GAO conducted extensive outreach to locate companies willing to provide data on
their actual costs of compliance with federal mandates. In the resulting report,
Regulatory Burden: Measurement Challenges and Concerns Raised by Selected
Companies (GAO/GGD-97-2), the numbers just aren't there - GAO could not find
real data from actual companies in the real world to validate the trade groups'
hypothetical projections of high private sector cost burdens from federal
mandates.
H.R. 350 would exacerbate the problem of inflated industry cost
estimates for federal mandates by requiring CBO to analyze indirect as well as
direct costs. This requirement would either result in creating an ambitious new
analytical program at CBO or - as would more likely be the case - in reliance on
studies completed by others.
The further that any economic study gets
from known facts, the greater its reliance on speculative assumptions and
extrapolations - and the more likely it will provide whoever commissioned it the
answer they want to hear. One need only reflect on the "studies" commissioned by
business trade groups that forecast massive job losses every time the minimum
wage is increased - yet the U.S. has enjoyed record low unemployment rates since
the last increase in 1996. Or on last year's self-serving study commissioned by
the Health Benefits Coalition, a group representing corporations and health
insurers opposed to the Patients' Bill of Rights, which
projected that such high indirect costs would result if the legislation to give
healthcare consumers a few basic rights passed as to bring about the end of
employer-paid health insurance as we know it.
As former CBO Director Robert
Reischauer testified (April 1994, before the Senate Committee on Governmental
Affairs): "More detail is not necessarily better. Analysis of the effects of
legislation by state, locality, or other categories often adds significantly to
the preparation time, making it more difficult to meet the normal timetable for
Congressional action. Without consuming enormous resources, such detail is
unlikely to be very accurate, and it may result in so much data that users would
find it overwhelming and undigestible."
More recently, CBO's February 1998
report, An Assessment of the Unfunded Mandates Reform Act in 1997, made the
point that the extensive body of scholarly work that is necessary to estimate
indirect effects is typically not available for private sector mandates. "CBO
knows of no economics literature on the indirect costs of encryption, the air
passenger ticket tax, or similar, more narrowly focused, mandates."
Thus
H.R. 350's mandate to estimate indirect costs will not provide Congress with
more useful information or promote transparency. Instead, it will invite fishing
expeditions to attribute projections of consumer price increases, lost wages,
jobs and benefits, and small business closures to the enactment of public
safeguards for consumers, workers and the environment.
One final point on
the false premise underlying H.R. 350. A review of testimony and floor
statements in support of previous versions of this bill reveals no actual case -
not a single example - of a major private sector mandate that was bundled into a
legislative vehicle and passed by Congress without sufficient attention
tonsideration of its costs. Thus the available evidence shows that the problem
that H.R. 350 is intended to address is simply nonexistent.
Where there has
been a problem, however, is when public benefits are at stake. There is ample
evidence of anti-environmental riders being attached to Appropriations bills or
other "must-pass" pieces of legislation. Often this happens with absolutely no
debate or consideration by the committee of jurisdiction. Anti-environmental
riders which became law in recent years include measures to increase clear-cut
logging in National Forests, cripple protection of endangered species, stall the
Superfund program, undermine energy efficiency standards and block the
regulation of radioactive contaminants in drinking water.
Public Citizen and
Citizens for Sensible Safeguards support the "Defense of the Environment"
amendment offered by Mr. Waxman on the House floor when last year's version of
H.R. 350 was considered. It would create a point of order against bills that
weaken or roll back health, safety or environmental protections. The League of
Conservation Voters National Environmental Scorecard identified more than 40
riders that would have weakened public health and public lands protections
attached to Appropriations bills in 1998 alone, without proper consideration by
Congress.. Based on this 40-0 record - with not a single private sector mandate
with more than $100 million in costs so treated - it is clear that the need for
the special procedure of a point of order is to defend public health, safety and
the environment, not to protect industry from costs.
The bill before you
also exempts from the point of order private sector mandates that impose a tax
increase if they are offset by tax cuts, even in cases in which one group must
pay the increased taxes while a different group gets the benefit of the tax cut.
There is no rationale based on fairness rather than ideology for this special
treatment of tax cuts - particularly since the "winners and losers" would not
necessarily be the same.
I want to note in closing that some proponents of
HR. 350 have argued that the bill really doesn't do much since the point of
order it creates can be overridden and the legislation under attack then be
considered. Our answer to that is simple: If the bill doesn't do much, why pass
it? If it does - don't pass it.
Because this legislation would permit the
substitution of an abbreviated debate on a procedural motion for full,
democratic consideration of policies critically important to the American
people, and because it elevates and exaggerates the issue of industry costs over
protecting the public, we urge you to reject H.R. 350. Thank you very much for
your attention and consideration.
END
LOAD-DATE: February 4, 1999
