Question. Does the Administrative Conference of the United States carry, at the present time, enough weight with agencies to act as an effective management force of those agencies?

Answer. To assume the monitoring role contemplated by some would require a complete restructuring of the Conference, and special care would have to be taken to assure that ACUS was an independent agency should it have such a monitoring role with respect to independent agencies.

Senator KENNEDY [continuing]. We have a panel now, consisting of Mark Green, director of Congress Watch; Nancy Drabble, staff attorney, Congress Watch; Tony Roisman, senior staff attorney, Natural Resources Defense Council, Inc.; Jonathan Lash, senior project attorney, Natural Resources Defense Council, Inc.; and Mr. Michael Podhorzer, legislative director, Consumer Federation of America. Mr. Green, do you want to start?

PANEL OF CONSUMER REPRESENTATIVES:

STATEMENTS OF MARK GREEN, DIRECTOR, CONGRESS WATCH; NANCY DRABBLE, STAFF ATTORNEY, CONGRESS WATCH; TONY ROISMAN, AND JONATHAN LASH, ATTORNEYS, NATURAL RESOURCES DEFENSE COUNCIL, INC., AND MICHAEL PODHORZER, LEGISLATIVE DIRECTOR, CONSUMER FEDERATION OF AMERICA Mr. GREEN. Thank you. I am Mark Green of Congress Watch. My statement will be given jointly with Nancy Drabble of Congress Watch, and then we will answer questions together.

First, I would like to comment on the general debate over regulation before discussing briefly a few points about the bills before us.

It is important to discuss the tenor of the debate, because, in our view, it is grossly distorted against health safety regulation. This distortion flows from the fact that business regulatees, who have never liked any kind of regulation, largely control the cost and benefit data of regulation and have a self-interest in exaggerating the costs and understating the benefits.

For example, several years ago, vinyl chloride manufacturers said if there were regulation of its industry as proposed, it would cost $65 to $90 billion and millions of jobs a year. Regulation was imposed at no job loss and at a cost one two-hundredth that originally estimated.

There is a massive propaganda campaign now against consumerenvironmental regulation in annual reports, in the national media. My unfavorite is an ad by a company called Gould, Inc., which has a picture of the Statue of Liberty being hung by a noose strung by Washington.

Presumably the bill of rights not only includes the freedom of speech, but the freedom to pollute, because what Gould did not tell you in that ad, to take that one example, is they had suffered the largest court-imposed fine in American history previously for the destruction of wildlife.

The one conclusion that I think we could all come to is the House. Oversight Committee's view that "The most significant factor in evaluating a cost benefit study is the name of the sponsor."

The debate is not only in my view heavily propagandized, but heavily trivialized. A novice to this debate listening for the first time might think that it all turned on the OSHA regulation about the shape of a toilet seat or the height off the floor of a fire extinguisher.

The issue is much more fundamental and life saving. A thousand people a day in this country die of cancer, much of which is avoidable. Nine thousand lives a year could be saved if a passive restraint system was more expeditiously implemented by the Department of Transportation. One out of eleven workers in this country suffer a job-related disease or injury a year.

So, for those who have amnesia about the reasons for consumer and environmental regulation, I might suggest reading a recent and excellent book called "Suffer the Children," written by the London Times investigative team, about the thalidomide scandal in the early 1960's.

I note this tilt in the controversy because of how it could shape or misshape the legislation that we are discussing today. We have to be sure the cure is not worse than the disease.

A couple of points. First, on public participation, Public Citizen, along with a lot of groups at this table and I know the chairmen, believe that it must be a cornerstone of any regulatory reform effort. You cannot have effective regulation or fair regulation or regulatory reform unless the communities affected by regulation can speak back to the bureaucrats who are making the decision.

Any institution which for good or bad reason decides to subsidize ships to Iran, or the merchant marine might want to make a judgment that an investment in the first amendment is a good thing, that is, the part of the first amendment which encourages citizens to petition their Government.

Second, regulatory analysis. Public Citizen thinks that it is a good idea to gage the potential adverse consequences and beneficial consequences of proposed regulations. We support, however, S. 262's provisions over the administration's S. 755. We think that the latter exalts cost-benefit analysis beyond the state of the art.

Economists cannot now tell you that one alternative will cost $161 million, another alternative will cost $160 million, therefore, we should presume the latter because it is cheaper. Cheapness is not necessarily goodness. One could equally have had a presumption in favor of any regulation that saves the most lives possible which might, one could argue, be the most expensive possible.

Instead of presumptions for least burdensome or most lifesaving, we think the more neutral terms of S. 262 are preferable.

If I could make two more points without the hook appearing. [Laughter.]

Senator KENNEDY. Yes.

Mr. GREEN. Especially since they are points about your proposal, Mr. Chairman. [Laughter.]

Senator KENNEDY. Once I start to hear your answers, I'll tell you. [Laughter.]

Mr. GREEN. Public Citizen supports the purpose of the procompetition impact analysis with one suggestion. We support the distinction. between economic regulation and health safety regulation that that provision now makes, but part 3 of that distinction allows for the application of a competition analysis when you limit goods or services.

I can see sophisticated or unsophisticated corporate Washington lawyers later arguing that merely by prohibiting a dangerous product or drug you are per se restricting or limiting the production of goods. I think language could be added to make it more explicit that you were talking about directly limiting the production of goods and services not related to health-safety consideration.

In addition, you have the beginnings of a very fundamental reform in the regulatory reform area. You have a provision requiring a compliance test, a compliance review. All the debate today is about the cost of regulation; what about the costs of not regulating. A compliance review could require agencies to, by statistical survey tests, figure out the frequency of violation of existing rules which people agree are good rules. How often are they being violated? How many trucks are overweight on the road? How many cars are being sold without emission standards, for example? This will produce a data base that will indicate how many more resources are needed to effectively enforce. It will suggest how many new remedies may be legislated in order to deter the kind of noncompliance that we think is frequent.

In conclusion, we heard the testimony of business spokespeople who are not here today before the Senate Governmental Affairs Committee on this issue. They urged, collectively, for a preliminary regulatory analysis, a final regulatory analysis, an inflation impact analysis, a paperwork review, a productivity impact analysis, a small business impact analysis and an overlap analysis prior to the issuance of regulation.

If anyone is then left in an agency with the fortitude to try to keep trying to regulate, any rule they do promulgate will then be subject to judicial review, the regulatory analysis will be subject to judicial review, the rule will be subject to legislative veto, the rules will be subject to periodic sunset review by the agency, there may be Presidential intervention overruling the rule, and following, of course, there will be a sunset analysis.

Are these for real or are these a Saturday night live parody? In our judgment, we have to be careful that we have regulatory analysis and not regulatory paralysis, and we have to be aware that a business community, who is always opposed to regulation when originally opposed, still opposes it under the rubric of costly regulation, and they are often trying to so burden it that it is not more effective but less effective. Thank you for your indulgence, Mr. Chairman.

Senator KENNEDY. Thank you. It is very helpful.

Mr. Lash.

Mr. LASH. Thank you, Mr. Chairman.

I am Jonathan Lash of the Natural Resources Defense Council. With me is Tony Roisman, also of NRDC. We have submitted testimony for the record. We would like to briefly state our conclusions and leave an opportunity for questions should the committee have any.

We are concerned that regulatory reform not become a Trojan horse bringing with it changes very different from the ostensible purposes for which regulatory reform is enacted.

It should be directed at problems which are real and not simply a euphemism for problems not in the administrative process, but rather in the outcomes of the administrative process from the viewpoint of certain interests.

One illustration of the dangers we see in regulatory reform is what has in several bills been denominated the regulatory analysis. Regulatory analysis really means economic analysis, but it is economic analysis only of regulations. It is curious that there is no proposal for economic analysis of new buildings. There is no proposal for economic analysis of the cruise missile. It might in fact be difficult to justify the cruise missile through a cost-benefit analysis. Many of the same problems that arise there suggest why there should not be a separate requirement for economic analysis of regulations.

One of our concerns with much of the legislation that is proposed is that it does not address real problems with the administrative process. For example, there has been frequent litigation over the question of what should go in the record and what shouldn't go in the record. We suggest that any reform should address that issue and should require that every relevant contact with an agency, whether by a private party or another Government agency, be required to be included in the record for judicial review and public disclosure.

Mr. Roisman has several other proposals which we will summarize. Mr. ROISMAN. Mr. Chairman, the purpose of regulatory reform should be to make it possible for an agency to have as complete a record as is reasonably obtainable and to be able to state, on the basis of that record, a reasonably defensible conclusion. That means that we do not try to prejudge the outcome of the regulation, do not try to write a regulatory reform proposal that attempts to change the substantive bases, but rather attempts to make the process work better.

A part of that process with which we are concerned, not so much in your proposals, but in the alternative proposals submitted in S. 262 and in the White House bill are the proposals that deal with adjudicatory hearings.

My experience has been with extensive adjudicatory hearings before the Nuclear Regulatory Commission. In that experience I can assure you that the opportunity for people to cross-examine and to conduct discovery of assertions made by proponents of licenses for nuclear powerplants or by opponents of such licenses is essential to getting a fair record developed.

Your proposals preserve those adjudicatory hearing rights and we think that they should be preserved.

In our testimony we cite some extensive examples of comments by the Chairman of the Atomic Safety and Licensing Appeal Board of the Nuclear Regulatory Commission underscoring their evaluation of the importance of adjudicatory hearings and citizen participation.

Lastly, on the question of citizens participation, as you, more than any other member of the Senate is fully aware, without the opportunity for citizens who do not have an economic interest to be gained, to have the resources to make their case, there is no fair hearing.

Quite frankly, except for the limited places where citizen funding is now available, there have not been fair hearings in this country on many of the most crucial issues that people are concerned with simply because the economic resources of those with economic interests cannot be balanced by the citizen who is there not for the money they can make, but for the principle that they wish to pursue.

We urge you to continue to press citizen participation as the keystone of regulatory reform. Thank you.