[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]





 ANOTHER YEAR, ANOTHER BILLION HOURS: EVALUATING PAPERWORK EFFORTS IN 
                         THE FEDERAL GOVERNMENT

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON REGULATORY AFFAIRS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 18, 2006

                               __________

                           Serial No. 109-256

                               __________

       Printed for the use of the Committee on Government Reform

         



  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCMIDT, Ohio                        (Independent)
BRIAN P. BILBRAY, California

                      David Marin, Staff Director
                Lawrence Halloran, Deputy Staff Director
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

                   Subcommittee on Regulatory Affairs

                 CANDICE S. MILLER, Michigan, Chairman
CHRIS CANNON, Utah                   STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              WM. LACY CLAY, Missouri
LYNN A. WESTMORELAND, Georgia        CHRIS VAN HOLLEN, Maryland
JEAN SCHMIDT, Ohio

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                       Ed Schrock, Staff Director
                Rosario Palmieri, Deputy Staff Director
                         Benjamin Chance, Clerk
          Karen Lightfoot, Minority Professional Staff Member
























                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 18, 2006....................................     1
Statement of:
    Aitken, Steven D., Acting Administrator, Office of 
      Information and Regulatory Affairs, Office of Management 
      and Budget; Beth Tucker, Director, Communications, Liaison 
      and Disclosure, Small Business/Self-Employed Division, 
      Internal Revenue Service; and Matthew Berry, Deputy General 
      Counsel, Federal Communications Commission.................     7
        Aitken, Steven D.........................................     7
        Berry, Matthew...........................................    36
        Tucker, Beth.............................................    19
    Koontz, Linda D., Director of Information Management, 
      Government Accountability Office; Andrew Langer, manager, 
      Regulatory Policy, National Federation of Independent 
      Business; and Robert Hayes, president, Medicare Rights 
      Center.....................................................    56
        Hayes, Robert............................................   114
        Koontz, Linda D..........................................    56
        Langer, Andrew...........................................    92
Letters, statements, etc., submitted for the record by:
    Aitken, Steven D., Acting Administrator, Office of 
      Information and Regulatory Affairs, Office of Management 
      and Budget, prepared statement of..........................    10
    Berry, Matthew, Deputy General Counsel, Federal 
      Communications Commission, prepared statement of...........    38
    Koontz, Linda D., Director of Information Management, 
      Government Accountability Office, prepared statement of....    59
    Langer, Andrew, manager, Regulatory Policy, National 
      Federation of Independent Business, prepared statement of..    95
    Miller, Hon. Candice S., a Representative in Congress from 
      the State of Michigan, prepared statement of...............     3
    Tucker, Beth, Director, Communications, Liaison and 
      Disclosure, Small Business/Self-Employed Division, Internal 
      Revenue Service, prepared statement of.....................    21































 
 ANOTHER YEAR, ANOTHER BILLION HOURS: EVALUATING PAPERWORK EFFORTS IN 
                         THE FEDERAL GOVERNMENT

                              ----------                              


                         TUESDAY, JULY 18, 2006

                  House of Representatives,
                Subcommittee on Regulatory Affairs,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:05 p.m., in 
room 2203, Rayburn House Office Building, Hon. Candice S. 
Miller (chairman of the subcommittee) presiding.
    Present: Representatives Miller, Schmidt, Lynch, and 
Waxman, ex officio.
    Staff present: Ed Schrock, staff director; Rosario 
Palmieri, deputy staff director; Benjamin Chance, clerk; Karen 
Lightfoot, senior policy advisor and communications director; 
Brian Cohen, minority senior investigator and policy advisor; 
Alexandra Teitz and Krista Boyd, minority counsels; and Cecelia 
Morton, minority office manager.
    Mr. Lynch. I'm Stephen Lynch, ranking member here. This is 
the season where we have multiple hearings going on at the same 
time. It's just the nature of the beast.
    I did talk to Chairman Miller a little earlier today, and 
she said she'd be along directly.
    Right on time.
    Mrs. Miller. The subcommittee will come to order. I 
appreciate you all being here today. Catch my breath, running 
up the stairs here.
    I certainly want to welcome everyone, those in the audience 
as well, for coming to today's hearing on paperwork reduction 
efforts in the Federal Government.
    Although we have established a very strong system and 
eliminated literally hundreds of millions of hours of 
unnecessary paperwork, we have also added billions of hours of 
paperwork burden even faster. Since its passage in 1980, we 
have increased total governmentwide burden by over 400 percent, 
to 8.4 billion hours in fiscal year 2005.
    Our record continues to be certainly less than 
satisfactory, and in a time of increasing global 
competitiveness, the United States must be the best place in 
the world to do business and to accomplish that we need to make 
sure we're not tolerating collections of information and 
burdens on businesses that are unnecessary.
    In 1995, we amended the act to include, among other items, 
a set of certification requirements to force agencies to do the 
tough work of justifying their information collections. These 
requirements forced agencies to prove that they were avoiding 
duplication of information, that they were reducing burden on 
the public small entities, as well as writing their forms in 
plain English, a piece of legislation that Ranking Member Lynch 
and I have proudly introduced together, and that the 
information that they were collecting was really necessary to 
their programs.
    The GAO has conducted a comprehensive study of agency 
certifications and found them wanting. Agencies were missing or 
provided partial support for 65 percent of the collections in 
GAO's sample. Most agencies are not fulfilling their 
requirements for public consultation either.
    The watchdog for these agencies is the office that we 
created in 1980 within the Office of Management and Budget 
known as the Office of Information Regulatory Affairs [OIRA]. 
OIRA reviews each of these collections and can approve its use 
for up to 3 years. The office has also had the responsibility 
of coordinating percentage reduction targets between agencies 
and reporting annually to Congress on progress toward burden 
reduction.
    OIRA's annual budget--excuse me, their annual report is the 
Information Collection Budget [ICB], of the Federal Government, 
which tracks our progress in paperwork reduction. The ICB is 
required to contain a summary of accomplishments and planned 
initiatives to reduce burden, a list of all violations of the 
PRA, a list of any increases in burden, including the authority 
for each such collection and a list of agencies that in the 
preceding year did not reduce information collection burdens 
and recommendations to assist those agencies to reduce their 
information collection burdens.
    The specific burden reduction targets of the 1995 PRA were 
not accomplished. That act required a target for reducing 
governmentwide burden by 40 percent between 1996 and 2001. And 
if that would have been achieved, total burden would have 
measured 4.6 billion hours in 2001 rather than 7.5 billion 
hours--I think we have a reference chart attached at some point 
that would show that--and we wouldn't stand at 8.5 billion 
hours today. Any excessive and unnecessary hours of burden we 
impose on individuals and small business owners is less time 
they can spending being productive citizens, of growing their 
business or spending time with their families.
    Opportunities to amend the Paperwork Reduction Act to 
enhance our ability to achieve these goals still lie ahead of 
us, but working vigorously to implement the current provisions 
and accomplish reductions is certainly our obligation.
    At this time I'd like to recognize Mr. Lynch for his 
opening statement.
    [The prepared statement of Hon. Candice S. Miller follows:]

         

    
    Mr. Lynch. Thank you, Chairman Miller. Welcome all. I want 
to thank all of the panelists who are about to appear before us 
today for their assistance in helping this committee with its 
work.
    In spite of all the best efforts and the tough talk about 
reducing paperwork, the report that has been assembled by the 
minority staff, and that Mr. Waxman and I are releasing today, 
shows that the reality is far different than our intentions.
    Rather than reducing paperwork since 2000, under this 
current administration we have required Americans to spend 
about 1 billion more hours each year filling out government 
paperwork than they did in the year 2000. So it's not even 
close.
    The paperwork burden in 2005 was 8.4 billion hours, and it 
is expected to rise again this year to a whopping 8.7 billion 
hours. That adds up to about 39 hours for every adult living in 
the United States.
    On the other hand, there have been some, in my opinion, 
misguided efforts to roll back some very important 
environmental, health and safety protections such as 
eliminating the filing requirement under the Toxics Release 
Inventory, which companies are required to disclose when they 
dump toxic chemicals into the environment. Some folks have 
worked at reducing that reporting requirement.
    The dynamic will not work, however, because both EPA and 
the Department of Labor each only account for about 2 percent, 
2 percent of the total paperwork burden, while on the other 
hand, my friends at the IRS are responsible for about 76 
percent of government paperwork that the American people have 
to fill out each year.
    Much of the recent increase in paperwork has been driven by 
laws proposed by the current administration and passed with the 
active support of this current Congress, with the support of a 
Republican-led House and Senate, and I would suggest that one 
good way to reduce the time spent on paperwork is to make the 
requirements easier to understand. And that's where Chairman 
Miller and I have tried to work for a plain-language, hopefully 
English requirement that agencies should focus on in making the 
information they put out clear and understandable.
    The 800-pound gorilla out there was the Medicare 
prescription drug benefit that added enormous complexity and 
enormous burden in terms of the hourly requirement for 
complying with that program. It is badly designed, and recently 
I just concluded my 16th hearing, town meeting, in my district, 
going from town to town to try to explain this program. There 
is no end in sight. It's very confusing, and there are 
troublesome parts of it with inaccurate information being put 
out by various groups, including some of the drug programs that 
are sponsoring the benefit. That's costing seniors far too much 
time and causing them too much frustration.
    One thing is clear: that we have not lived up to our 
obligations and our promises to reduce paperwork. Americans, 
especially all of the small businesses across the country that 
are struggling just to keep their businesses running, deserve 
better; and I think that's where the chairman and I are in 
total agreement.
    Chairman Miller, I do ask unanimous consent to enter into 
the hearing record a copy of the report prepared by the 
Government Reform Committee minority staff. It's entitled 
``Government Paperwork Burdens Have Increased Substantially 
Under the Bush Administration.''
    Mrs. Miller. Without objection, those will be entered into 
the record.
    Mr. Lynch. Thank you, Chairman Miller.
    Mrs. Miller. OK. As we go to our first panel, if you could 
all rise, please, and raise your right hands. Because we are an 
oversight committee, it is the practice of the committee to 
swear in all of our witnesses.
    [Witnesses sworn.]
    Mrs. Miller. Our first witness this afternoon is Dr. Steven 
Aitken. He is Acting Administrator of the Office of Information 
Regulatory Affairs at OMB. Prior to assuming his current 
position, Mr. Aitken worked as Deputy General Counsel at OMB 
and was an Assistant General Counsel at OMB as well. He has 
served a total of 17 years at that agency.
    Earlier in his career he also served the Department of 
Justice in several positions. So we certainly appreciate your 
willingness to appear before the panel today and look forward 
to your testimony, sir.

STATEMENTS OF STEVEN D. AITKEN, ACTING ADMINISTRATOR, OFFICE OF 
 INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND 
  BUDGET; BETH TUCKER, DIRECTOR, COMMUNICATIONS, LIAISON AND 
  DISCLOSURE, SMALL BUSINESS/SELF-EMPLOYED DIVISION, INTERNAL 
  REVENUE SERVICE; AND MATTHEW BERRY, DEPUTY GENERAL COUNSEL, 
               FEDERAL COMMUNICATIONS COMMISSION

                 STATEMENT OF STEVEN D. AITKEN

    Mr. Aitken. Thank you.
    Chairman Miller, Ranking Member Lynch and distinguished 
members----
    Mr. Lynch. I'm not sure if your mic is on.
    Mr. Aitken. Thank you.
    Chairman Miller, Ranking Member Lynch and distinguished 
members of the subcommittee, I am Steven Aitken, Acting 
Administrator of OIRA, an office within the Office of 
Management and Budget. Thank you for inviting me to this 
hearing today and for giving me the opportunity to testify on 
OMB's annual report to Congress under the Paperwork Reduction 
Act, which is the Information Collection Budget of the U.S. 
Government, and our efforts to reduce paperwork burdens on the 
American people.
    By way of background, as the chairman noted, I have worked 
at OMB for 17 years, most recently serving as Deputy General 
Counsel before becoming Acting Administrator at the beginning 
of last month. This is my first appearance before the 
subcommittee.
    The Federal Government should not require or ask the 
public, individuals, businesses, organizations, State and local 
governments and others to respond to Federal paperwork 
requirements that are unnecessary, duplicative or unduly 
burdensome. Eliminating unnecessary, duplicative and 
unjustified paperwork burdens in existing collections of 
information and preventing such burdens in new collections is 
one of OIRA's highest priorities.
    This year's Information Collection Budget [ICB], presents a 
picture of our efforts to balance the Federal Government's need 
for information against the burden imposed on the public of 
gathering that information. We are making progress in reducing 
the paperwork burden on individuals, small businesses and local 
and State governments. As the ICB reports, of the 15 Cabinet 
departments, 12 achieved net reductions in burden resulting 
from discretionary actions in fiscal year 2005. This is up from 
10 departments in fiscal year 2004.
    I would like to offer two examples that are in the report. 
The Internal Revenue Service redesigned the Form 1041, which is 
the U.S. income tax return for estates and trusts, to 
streamline the requirements and make it easier and quicker to 
understand and file. This reduced taxpayer burden by 18.8 
million hours.
    And the Department of Agriculture collects information to 
ensure that multifamily housing applicants meet program 
requirements and repay loans. USDA consolidated 13 regulations 
into a single regulation to reduce burden, assure quality 
housing for residents, and improve customer service and improve 
the agency's ability to manage the loan portfolio. This reduced 
reporting burden by 1.28 million hours.
    Although agencies made significant efforts to reduce 
paperwork, the burden overall increased 441 million hours, of 
which 419 million, or about 95 percent, were due to the 
implementation of important new statutes. The two statutes that 
resulted in the largest increases in paperwork burden during 
fiscal year 2005 are, first, the Medicare Prescription Drug 
Improvement and Modernization Act of 2003, which the ICB 
reports accounts for an increase in burden of 224 million hours 
in fiscal year 2005 and an expected additional 4.7 million 
hours in fiscal 2006.
    This act established the important new Medicaid benefit of 
the new voluntary prescription drug coverage. As of June 11, 
2006, 38.2 million Medicare beneficiaries have comprehensive 
drug coverage.
    The other statute is the CAN-SPAM Act, which accounts for 
an increase in burden of 116 million hours. This statute 
regulates unsolicited commercial e-mail by requiring every 
unsolicited commercial e-mail to include information about how 
the recipient can have the sender remove the recipient's e-mail 
address from the sender's mailing list. This requirement that 
the sender of the e-mail include this disclosure qualifies as a 
collection of information under the Paperwork Reduction Act, 
and therefore it is counted as burden.
    I would like to note that with respect to the Medicare 
Modernization Act we have received information this morning 
from HHS that suggests that the paperwork burden of this 
statute may be, in fact, less than previously estimated and 
reported in the ICB. If that is correct, it would be welcome 
news. Once we can verify a new estimate, we will communicate it 
to the subcommittee immediately.
    Of the 441-million-hour total increase during fiscal year 
2005, the increase in burden due to actions within agency 
discretion was 180,000 hours. However, it is important to take 
into account the benefits that are to be derived from each 
collection of information or, in the terminology of the 
Paperwork Reduction Act, the practical utility of the 
collection.
    For example, the Federal Communications Commission issued 
new regulations on truth in billing in order to make it easier 
for the public to understand their telephone bills. This 
requirement resulted in an increase in burden on the telephone 
companies of 2.6 million hours.
    The ICB also documents the successful efforts of OMB and 
Federal agencies to sharply reduce agency violations of the 
Paperwork Act. As a result of the efforts of OMB and the 
agencies, the executive branch has completely eliminated the 
considerable backlog of unapproved collections and has 
dramatically reduced the incidence of new violations.
    The ICB also includes a chapter that describes the new 
methodology that the IRS has begun using to estimate reporting 
burden on individual taxpayers. The new methodology estimates 
taxpayer burden more accurately by taking into account the 
remarkable increase in the use of computerized preparing-and-
filing software.
    Finally, in my written testimony I provide an update about 
OMB's new information system for the Paperwork Reduction Act, 
which we are planning to activate next week. This new system 
will make it easier for the public and Congress to obtain 
information about OMB's review of information collections, and 
the system will enable OMB to track more accurately and 
efficiently the paperwork burden that is imposed by the Federal 
Government.
    This concludes my prepared statement. Thank you again for 
the opportunity to testify in today's hearing, and I would be 
happy to answer any questions you may have.
    Mrs. Miller. Thank you very much. Appreciate that.
    [The prepared statement of Mr. Aitken follows:]

         

    
    Mrs. Miller. Beth Tucker is our next witness this morning. 
She is the Director of Outreach, Communications and Disclosure, 
Small Business/Self-Employed Division, at the IRS. In this 
position she oversees numerous IRS service-wide programs 
including the governmental liaison and disclosure program 
office, which is responsible for ensuring the protection of 
taxpayer and employee confidentiality.
    She began her career as a revenue agent in Dallas and since 
then has held a variety of positions in the IRS.
    And as my colleague has stated, the IRS is responsible for 
about 76 percent of the paperwork we're going to be discussing 
here today, so we appreciate very much your willingness to come 
before the committee and look forward to your testimony, Ms. 
Tucker.

                    STATEMENT OF BETH TUCKER

    Ms. Tucker. Thank you.
    Madam Chairman, Ranking Member Lynch and members of the 
subcommittee, my name is Beth Tucker; and in addition to being 
the Director of Communications, Liaison and Disclosure in the 
Small Business/Self-Employed Division of IRS, I am also very 
pleased to be the Acting Director of the Office of Taxpayer 
Burden Reduction.
    The IRS has a firm commitment to impose the least amount of 
burden necessary for taxpayers to meet their tax obligations. 
The IRS strategic plan is very clear in articulating this 
responsibility and making it a goal of each and every IRS 
employee. But we face, as you have mentioned, significant 
hurdles in our efforts to reduce paperwork requirements and 
overall burden on taxpayers.
    It probably will not shock you to learn that the first of 
these hurdles is the complexity of the Tax Code. We fully 
expect that absent fundamental tax reform, the aggregate burden 
taxpayers face will, in fact, continue to grow. A cornerstone 
of our tax system depends upon each taxpayer's voluntary self-
assessment of their tax liability. However, increasing 
complexity hinders every American's efforts to accurately 
assess their tax liability and may, in fact, serve as a 
disincentive to comply with tax obligations.
    The second hurdle we face is the systemic growth every year 
as more individuals and businesses file returns.
    The third hurdle is, of course, enactment of new 
legislation that adds to or modifies existing tax laws.
    While new tax legislation often provides many worthwhile 
benefits or incentives for taxpayers, the tradeoff is often 
additional complexity and increased burden. For example, the 
Katrina Emergency Tax Relief Act of 2005 provided significant 
benefits to taxpayers who desperately needed tax relief in the 
hurricane-ravaged region, but it's also required over 230 
changes to 78 tax products and two new tax forms.
    Each year, all Federal agencies are required to report to 
OMB the burden imposed by their paperwork requirement. Our 
estimated fiscal year 2006 burden is 6.65 billion hours. This 
compares with 6.4 billion in 2005, for an increase of 
approximately 251 million hours. Reflected in this increase is 
the growth in the number of new forms, as well as changes to 
existing forms dictated by 10 different pieces of legislation 
enacted in 2005.
    Madam Chairman, my written statement offers a detailed 
description of many of the steps we're taking to reduce 
paperwork and burden on taxpayers. However, I would also like 
to update you on a few of our latest accomplishments.
    First, we developed a new schedule K-1 for Form 1041, which 
is used with estates and trusts. The new form provides 
streamlined instructions for beneficiaries and should reduce 
approximately 4.27 million hours of burden for over 3.5 million 
taxpayers.
    Second, on January 1, 2006, we began implementing the Form 
944, annual filing of pay program. This change affects 950,000 
taxpayers and allowed businesses with a total employment tax 
liability of less than $1,000 to file annually rather than 
quarterly.
    Third, our Office of Taxpayer Burden Reduction led IRS 
efforts to create a single automatic 6-month extension, thereby 
decreasing the number of extension forms taxpayers must submit.
    Madam Chairman, we recognize that a key factor in reducing 
burden is communication with our stakeholders. We routinely 
seek feedback from a variety of stakeholders including citizen, 
practitioner, industry groups and our colleagues in other 
government sectors.
    As previously mentioned, we have also developed a new way 
of estimating taxpayer burden. The new method is based on 
taxpayers' reporting of the time they spend and the costs they 
incur preparing and filing their income tax returns. According 
to the model based on 2004 data, individual taxpayers on 
average spend 23.4 hours and $186 gathering information, 
preparing and submitting their tax returns.
    In conclusion, it is important to know that the operating 
philosophy that Commissioner Mark Everson has instilled in the 
IRS is that service plus enforcement equals compliance. Nowhere 
is that more important than in burden reduction.
    We have taken steps both in the area of prefiling of 
returns and reducing the burden associated with compliance 
actions. We have also attempted to shorten the duration of 
compliance activities throughout initiatives such as the 
alternative dispute resolution and our compliance assurance 
program.
    Thank you, Madam Chairman, for the opportunity to appear 
today, and I can assure you that burden reduction is everyone's 
job at the IRS. I look forward to answering any questions you 
may have.
    Mrs. Miller. Thank you very much. We appreciate that. Some 
very interesting statistics there.
    [The prepared statement of Ms. Tucker follows:]

         

    
    Mrs. Miller. Our next witness is Matthew Berry, Deputy 
General Counsel for the Federal Communications Commission. Mr. 
Berry has recently served at the Department of Justice as 
Counselor to the Assistant Attorney General for the Office of 
Legal Policy, and before that he served as the Attorney Advisor 
in the Justice Department's Office of Legal Counsel. We are 
certainly pleased to have Mr. Berry with us today.
    And the floor is yours.

                   STATEMENT OF MATTHEW BERRY

    Mr. Berry. Thank you. Madam Chairman, Ranking Member Lynch 
and distinguished members of the subcommittee, I appreciate the 
opportunity to appear before you today to discuss the FCC's 
efforts to reduce the information collection burdens placed by 
the Federal Government on the American people.
    The Commission is continuously looking for ways to reduce 
unnecessary or duplicative paperwork burdens. For example, 
since March 2005, the FCC has reduced its number of information 
collections by 36. In order to fulfill its statutory 
responsibilities, however, the FCC sometimes must impose 
information collection requirements.
    In recent years, the FCC has instituted such collections to 
implement important statutory mandates such as improving 
consumers' ability to make sense of their telephone bills, 
giving the public the ability to block unwanted telemarketers' 
calls and protecting citizens from unwanted commercial faxes.
    OMB's fiscal year 2006 information collection budget 
indicates that the paperwork burden imposed by Commission 
regulations grew from approximately 26 million to 145 million 
hours in fiscal year 2005, or an increase of about 456 percent. 
The Commission recognizes that this increase is a significant 
one; however, the overwhelming majority, over 97 percent, 
resulted from the Commission's implementation of recently 
enacted statutes. Specifically, information collections 
associated with the CAN-SPAM Act accounted for most, or 115 
million hours, of this increase.
    Congress passed the CAN-SPAM Act to address unwanted 
electronic messages being sent by some businesses, and Congress 
specifically directed the FCC to deal with commercial messages 
that are sent directly to an e-mail address for delivery to a 
subscriber's wireless device.
    In deciding how best to fulfill its congressional mandate, 
the FCC chose the option that it concluded would be both the 
most effective in protecting citizens from receiving unwanted 
commercial messages on their wireless devices and would create 
the least amount of paperwork for business.
    Consistent with Congress' direction, the Commission 
prohibited businesses and others from sending mobile service 
commercial messages absent the recipients' express prior 
authorization. In addition, because of the need for senders of 
these messages to distinguish between e-mail addresses 
associated with wireless devices and other e-mail addresses, 
the FCC created a list of Internet domain names associated with 
commercial mobile services.
    Those sending commercial messages are required to regularly 
check that list and ensure that they do not send unsolicited 
messages to e-mail addresses using the domain names on the 
Commission's list.
    The Commission estimated that over 5 million businesses 
would be burdened both by the rule requiring senders of 
commercial messages to obtain express prior authorization from 
recipients and the requirement to check the Commission's list 
of domain names associated with wireless devices.
    It is important to note, however, that these rules only 
impose a burden on businesses to the extent that they wish to 
send unsolicited commercial e-mail messages. If businesses do 
not send such messages, the Commission's regulations impose no 
paperwork burden on them whatsoever.
    Moreover, the FCC realizes that the estimate of the burden 
hours associated with our CAN-SPAM regulations may be far too 
high because we may have significantly overstated the number of 
businesses that would be burdened. In some situations, 
estimating the paperwork burden associated with information 
collections is more art than science. Here, the FCC made its 
best estimates based on available information and guidance 
provide by OMB. When the FCC seeks renewal of its CAN-SPAM 
information collections, it will use a new and more informed 
burden estimate, which should be significantly lower than 115 
million hours.
    I also would like to briefly discuss one other new 
Commission rulemaking triggered by congressional action that 
resulted in a significant increase in our overall information 
collection burden. Three months ago the FCC adopted rules 
implementing the Junk Fax Prevention Act of 2005. Consistent 
with the statute, the Commission's rules require those sending 
unsolicited advertisements to fax machines to provide notice 
and contact information to allow recipients to opt out of 
receiving unwanted facsimiles, and our rules that businesses 
honor such opt-out requests.
    I note that while the FCC's initial burden estimate for 
these information collections, as reflected in the Information 
Collection Budget, was almost 25 million hours annually, our 
final submission to OMB revised that estimate downwards to just 
over 13 million hours, or 12 million hours less.
    I would like to close by sharing with the members of the 
subcommittee that the FCC takes its duties and responsibilities 
under the Paperwork Reduction Act very seriously. By 
eliminating unnecessary information collections and carefully 
crafting new information collections, we seek to minimize the 
burdens placed on businesses and the general public.
    Thank you for the opportunity to testify before you today, 
and I would be pleased to answer any questions you may have.
    [The prepared statement of Mr. Berry follows:]

         

    
    Mrs. Miller. Thank you, Mr. Berry. I appreciate that. Since 
you just finished, I think I'll start my questioning right with 
you.
    I was trying to take some notes when you were talking about 
how you were estimating the burden for the CAN-SPAM Act, and I 
guess--you mentioned perhaps it might be too high of an 
estimate and that you used OMB best information available to 
try to interpolate what all of that meant.
    Could you just try to educate me on how you actually do the 
construct of trying to understand what the burden requirement 
actually is? What kind of information did OMB give you? How do 
you make such an estimate?
    As an addendum to that, as well, if you are going to revise 
your estimate, this committee would be very interested to hear 
and to have that information when you do revise that estimate.
    Mr. Berry. First of all, we would happily provide you any 
revised estimate we have, and we do believe there will be a 
revision.
    With respect to how we came up with the number, I would 
first say that the Commission information collections generally 
impact those entities in the communications business; and we 
have a much better understanding of those businesses and 
compliance burdens on those businesses than we do on all small 
businesses in America, which is what the CAN-SPAM regulations 
potentially impact.
    But we started with a number that we believe we got from 
the Small Business Administration of 22.6 million businesses in 
the United States. We then had to figure out what percentage of 
those businesses would be impacted by our regulations.
    This was the most difficult call we had to make, and to be 
honest, we did not really have good information with respect to 
how many businesses in the United States would be sending 
commercial messages to wireless devices; and the best estimate 
that we made, which I think again is probably too high, is that 
about one-quarter of them, or 5.6 million, would be--seek to 
send these messages and comply with our rules. We then took 
that number, 5.6 million businesses and estimated that it would 
take each business about 10 hours a year to obtain and process 
express authorizations from individuals that wanted to receive 
the messages.
    We then looked at how long it would take a typical business 
to comply with our rules by looking at their e-mail list of 
people they wanted to send e-mails to and compare it against 
the domain name list that we provided that says the domain 
names that you can't send e-mail addresses to.
    We estimated it would take about 5 hours to set up the 
system for them to compare their e-mail list to our domain name 
list, and that's a one-time implementation burden; and then 
about 6 hours on an annual basis to regularly purge their e-
mail list of e-mail addresses that would appear on our domain 
list. And pursuant to our rules, you have to basically do a 
purge once every 30 days because once a domain name has been 
added to our list for 30 days, the sender is responsible for 
not sending unsolicited e-mail messages to it. So that's how we 
went about doing the estimate.
    I think, in hindsight--and we're going to do an additional 
study, but the 5.6 million figure for businesses impacted was 
probably significantly high, and I therefore think, and will 
share this information with you, that we're going to end up 
revising the 115 million hours estimate down.
    Mrs. Miller. That's great. Anything that can go down is a 
positive trend.
    Along those same lines, perhaps I could ask you how an 
agency like yours interacts with OIRA as they try to assist you 
on burden reduction and estimating and all those kinds of 
things. How does that all work out? Do you have any comment on 
that?
    Mr. Berry. I think we have a very cooperative relationship 
with OIRA. I could just walk you through the process that we 
follow at the Commission.
    Information collections initiate in our substantive bureaus 
and offices. This one, for instance, on CAN-SPAM originated in 
the Consumer and Governmental Affairs Bureau; they developed 
the proposed information collection. And then it goes to our 
Office of Managing Director, and they scrutinize it to make 
sure it complies with the Paperwork Reduction Act and ensure 
there is adequate support.
    Once our Office of Managing Director signs off, we will 
send it to OIRA to make sure they believe it complies with the 
Paperwork Reduction Act. We have to provide a supporting 
statement and justification both for estimates and that we have 
tried not to have duplicative burdens or to reduce unnecessary 
burdens.
    At that point, sometimes if we've done our work really 
well, OIRA will sign off on it; other times it's a more 
interactive process. They'll come back to us with questions, 
concerns and the like.
    I think generally we have a very cooperative relationship 
with them, and I think most of the time it's very smooth 
because thankfully we've done our homework and made sure we 
comply with the act.
    Mrs. Miller. Mr. Aitken, I know that you're new to your 
position there, but if I could ask you for your initial 
assessment or observation, do you think OIRA has adequate 
resources in order for you to be able to accomplish your 
mission there? Is there anything you want to share with the 
committee in regards to personnel or budgetary kinds of things 
or what we can do to assist you?
    Mr. Aitken. As you noted, Madam Chairman, I have just been 
at OIRA for 6 weeks now, and that's one of the issues I will 
look at being Acting Administrator; but now I'm not prepared to 
make any statements regarding that issue.
    Mrs. Miller. Perhaps a wise way to address that.
    I have some additional questions, but I'll wait until the 
second round, and at this time recognize Mr. Lynch.
    Mr. Lynch. Mr. Aitken, you weren't taking the Fifth, were 
you?
    Let me start--and thank you, Madam Chair.
    In your opening statement, you said Medicare Part D, and 
there was a number that was offered, 224 million hours for 
Medicare Part D. Now I know there are about 40 million seniors 
and handicapped Medicare-eligible folks that would be seeking 
to comply with Part D, and it looks--just based on my numbers, 
224 million, it would appear that half of that is attributable 
to me explaining Part D to my mother-in-law, who is a very 
bright woman and has a very good grasp of financial and legal 
concepts.
    But, seriously, how did you come up with--sort of the 
opposite side of the question that the chairman asked Mr. 
Berry, how did you come up with this, what did you do to pin it 
down do 224 million hours? Because just based on the confusion 
that's out there on this, I would have expected the number to 
be much higher.
    Mr. Aitken. Ranking Member Lynch, before turning to how 
that would be estimated, I would just want to make two 
clarifications.
    Mr. Lynch. You don't have to make it very complicated. Just 
how many hours per person.
    Mr. Aitken. The lead agency for developing the initial 
estimate of burden would be the agency that is engaging, or in 
the case when they send a collection to OMB for review and 
approval, the proposing agency. So in that case, it would be 
HHS and, specifically, the Center for Medicare and Medicaid 
Services.
    So it's that agency, as is the case with the FCC in the 
CAN-SPAM Act, that has the primary responsibility for 
developing an estimate, its best estimate, of what the burden 
will be based on its experience with operating the program or 
its best guess with respect to a new program, on how much that 
burden will be for the regulated entities and other members of 
the public. So in the case of the Part D program, as in other 
collections, it would have been the responsibility of the 
proposing agency to develop that estimate.
    As I mentioned in my opening statement, we have heard from 
HHS this morning that they believe that the estimate may have 
been too large for the Part D program, which comprised a large 
percentage of the burden for the Medicare Modernization Act. I 
believe that according the ICB, Part D was 212 million hours of 
the total 224 million hours; and so HHS is currently reviewing 
that and they are in the best position to determine what the 
appropriate burden would be.
    And as the FCC witness explained, when you're implementing 
a new program, you don't have a lot of experience to go by, and 
so it's necessarily based on estimates and guesses of what the 
burden will be. Under the Paperwork Reduction Act, an agency 
needs to obtain OMB's renewed approval at least once every 3 
years, and during that period an agency will be able to develop 
better estimates based on experience and also from input from 
the public during that time.
    Mr. Lynch. So in terms of my question, how did you come up 
with 224 million? You're saying HHS came up with that and 
you're just repeating that number?
    Mr. Aitken. HHS came up with that number. They then 
submitted it to OMB, along with its submission package, for our 
review and approval--and I'm not intimately familiar with the 
details of the package that HHS sent to us, and then our review 
of the package, but typically it's the agency that's proposing 
the collection.
    Mr. Lynch. I understand. You said that already. I'm just 
asking you about your ability to vouch for the number, I guess.
    Mr. Aitken. Our number is based on the HHS number.
    Mr. Lynch. That's fair enough.
    Let me just ask Mr. Berry a followup on the chairman's 
question.
    The CAN-SPAM Act, do we have any best practices out there 
that you could look at? It would seem to me that this would be 
something that software could be enormously helpful with, 
right; once that roster or that list is established, that it 
could just be a matter of a function that eliminates any of 
those, rather than anything that's very, very time-consuming 
for any individual.
    I understand the burden that's been estimated here, but 
also there is another burden that we all go through, which is 
to delete all that spam; that's the other side of this. So if 
you're not doing that, if you're not having a small group of 
people doing what you're requiring them to do under the act, 
you get a whole lot of us out there, clicking away, trying to 
delete all that spam, and that would just make you crazy after 
a little while.
    But are there some prospective mechanisms or some ideas for 
down the road where we could greatly reduce that and maybe have 
that whole system automated so that we don't have so much labor 
for our small businesses, especially those that are engaged in 
that type of activity?
    Mr. Berry. First of all, Ranking Member Lynch, I think that 
you point out an important thing that I mentioned in my written 
testimony, which is, the unwanted messages that go to wireless 
devices with respect to both businesses' and individuals' 
wireless devices do, in many cases, impose real costs both in 
terms of time and expense on those businesses and individuals. 
So that burden is reduced by the CAN-SPAM Act.
    But with respect to your specific question, I have been 
advised that there are ways through--there's software that can 
be use that would take an e-mail list and would purge it of 
those addresses that use domain names that are on the 
Commission's list, so that it can be done. You have to run that 
again once every month to be sure you're keeping up with the 
domain names on the Commission's list. So technology can be an 
important part of the answer here.
    Also, we generally find at the Commission that the 
compliance burden with respect to information collection goes 
down over time as businesses and individuals become more 
familiar with the information collection. So I do think the 
longer these regulations are in effect, you're just going to 
see a natural decline in the hours burden as well.
    Mr. Lynch. I will yield back at this point.
    Mrs. Miller. OK.
    Mr. Aitken, I was listening to and am very interested in 
how you actually did the construct, as well, in the Medicare 
prescription drug benefit, and what that all meant. And I think 
it is difficult. I know that the Congress is hoisting things on 
these agencies that do require a lot more burden, paperwork, 
etc., not only on the agencies but on the general public as 
well.
    Sometimes--hopefully, when we do these--it's difficult to 
go to seniors that have never had prescription drug benefits, 
and now there are over 32 million that do, and say, we really 
shouldn't have helped you with your prescription drugs because 
it's a lot of paperwork burden on everybody.
    So sometimes you have to think about what it is that 
government is all about, I suppose. I will just tell you in 
regards to also trying to help explain to seniors a brand-new 
program for the first time in 40 years, actually, it was great 
to have the help of senior advocacy groups and AARP and other 
kinds of groups. I don't know if that goes into, again, the 
construct of how you try to understand the paperwork reduction 
or the burden, additional burden, placed on the beneficiaries 
of those kinds of things.
    In my congressional district alone we have over 100,000 
seniors that have signed up at an average savings on 
prescription drugs of about--well, this year, about $100 
million. So sometimes we have to look at those kinds of things 
as well.
    As Mr. Berry was testifying about consumer protection, for 
instance, in the event it is more paperwork; but I think it's a 
worthwhile thing for government to mandate that people can 
understand what their phone bills are actually telling them and 
some of those kinds of things.
    But could you talk a little bit about--did any of the kinds 
of things that were happening out in the field with, as I say, 
some of these senior advocacy groups, or AARP, did that go into 
the equation, are you aware of that, or how do you actually 
measure those kind of things?
    Mr. Aitken. Madam Chairman, I'm not aware with respect to 
the part D program whether HHS included that within their 
development of the burden estimates. We can look into that and 
provide that information for the record.
    Mrs. Miller. I would be very interested to know that.
    Ms. Tucker, as we talked about the IRS, it is interesting, 
you hear some of these numbers that the compliance costs for 
Americans every year just to fill out their tax forms. I have 
heard way over $200 billion, from $225 to $250 billion, who 
knows; but I think as a result of those kinds of staggering 
numbers and every one of us having personal experience trying 
to fill out our own tax forms without the advantage of having a 
tax attorney, we do recognize--that, I'm sure, is the impetus 
for a lot of debate under the dome here about the flat tax, 
fair tax, etc.
    But I was interested in one of the things that you 
mentioned, and if you could flesh this out a bit for me, about 
how you attempted, your agency, to simplify or streamline the 
quarterly tax payments for businesses. Obviously the government 
wants to get their money as quickly as they can. And I think 
you mentioned there were about a thousand businesses that were 
advantaged by your new program.
    What is the benchmark for a small business not to have to 
file quarterly? Just seems like, having come from a small 
business background and filling out those forms, what a relief 
it would have been, even if we had to only do it twice a year.
    Ms. Tucker. Absolutely.
    To kind of also reassure you, in our taxpayer burden 
reduction program and the stakeholder liaison program that I 
manage, we do go out and conduct forums with the small business 
communities. And the frequency of touches on forums is one of 
the No. 1 things we hear back, make my interaction with you--
why they don't want to interact with IRS. It hurts our feelings 
a little bit, but believe it or not, they are looking for less.
    Actually, on the 944, the tolerance is $1,000; it actually 
applies to 950,000 small business owners. So, in other words, 
we looked at what was the cutoff for small businesses that only 
had an employment tax reporting of $1,000 or less, and we said, 
well, why are they having to go to the trouble of filing four 
times a year when we could just annualize that to a one touch.
    So we launched that in January 2006; we are in our first 
year of operation. We are doing some quality control to see how 
it's going, talking our small business taxpayers. But the good 
news, I think this one is a good example of how you can not 
only reduce burden on the small business, but the reality is, 
that also reduces burden on IRS because that's three less 
submissions that we're also have having to use our resources 
on.
    So we'll be glad to share with you after we have our first 
full year of operation and then what our next steps are as far 
as looking at other opportunities for similar burden reduction 
initiatives.
    Mrs. Miller. I'm sure the committee would be very, very 
interested in having that kind of information.
    Does the IRS have the ability to just make those kinds of 
decisions? Do you require legislative----
    Ms. Tucker. A lot of our burden reduction initiatives we 
can do through administrative provision or regulatory, but 
obviously a good example--and let me share this one with you, 
because I do think at some point we've talked to one of the 
committees--we're looking at an initiative right now on office 
in the home. That is a form that frustrates and confounds 
millions of small business/self-employed taxpayers where you go 
through multiple calculations. And that's one where we're 
actually looking at, is there a possibility of a standard 
deduction to give you the option if you don't want to go 
through--almost like, for those of us that are familiar with 
Schedule A, you can choose, do you want to itemize your home 
mortgage interest or medical expenses, or you can choose the 
flat deduction for your filing status.
    So on that one, that is one that in talking with Treasury 
most likely will require a legislative proposal.
    So it really depends. There are literally hundreds of form 
and regulatory adjustments we make in any given year without 
having to go the legislative route.
    Mrs. Miller. Sometimes--well, it's always scary when the 
government starts talking about tax reform, tax simplification, 
which always ends up being more of a burden; at least that's 
the way the trend has always gone. It always seems, I think, 
that the customers, the end users of all of these things that 
conceptually sound fine here in Washington, but the practical 
reality or application of them out in a small business or 
individuals and that is sometimes an unintended consequence 
from what we were looking for.
    Does the IRS have a format where taxpayers can make the 
kinds of suggestions that it's always good to hear from them 
and then do you actually listen to them? I would be interested 
in looking at how you actually get a comment from an individual 
taxpayer or small business owner and then what happens to it. 
Does it get filed in the circular file?
    Ms. Tucker. You would actually be very interested to see a 
lot of the suggestions, and in fact, we'd be very pleased to 
share those with you.
    A lot of taxpayers do correspond with us. We actually have 
a form, and I'll be glad to provide it to you, it's Form 
13285A, a very scientific sounding form, but basically that's 
what we use for taxpayers or small businesses, or even industry 
groups can write their suggestion down and send it to IRS.
    Two months ago we did issue an updated release that went 
out through all of our distribution networks, talking about how 
serious IRS is about burden reduction and asking our 
stakeholders and taxpayers to give us their ideas. Currently 
the process we use, members of my staff do the initial vetting 
and then we assign those out to the different functions within 
IRS to give us feedback and suggestions.
    Of course, the most popular burden reduction suggestion we 
are getting from taxpayers is, I'd just as soon not pay any 
taxes; but I think you would probably agree, that one is a 
little difficult for our agency to administer.
    Mrs. Miller. Thank you very much.
    Mr. Lynch.
    Mr. Lynch. Thank you.
    Ms. Tucker, just following up, there were numbers in one of 
the reports I read, it might have been the one that you 
provided, that did give an estimate of the additional burden 
that was proximate to the 2005 changes that we did in the AMT. 
We modified it a little bit. So it was a number in here about 
what those modifications cost us in terms of burden. I accept 
those as being fairly accurate.
    The question I have, though, what about the encroachment 
issue where you have millions more Americans that sort of march 
into--they get captured; now they are subject to the AMT. What 
is that doing to the burden that you're seeing imposed upon 
taxpayers?
    Ms. Tucker. Obviously, the AMT calculation in and of itself 
generates lots of questions from the taxpayers and, in fact, 
the practitioners that are being paid to prepare their returns.
    As far as things that IRS is doing, once you are checking 
to see, does that apply to you, we have done a couple of 
things. This last filing season we did an ATM calculator or 
tool on our Web site where you could go in, and it would walk 
you through, do you need to continue with the form.
    The interesting thing, and I think it was mentioned in the 
earlier testimony, we do have more and more taxpayers--not only 
individual taxpayers, small business taxpayers--that are using 
the commercial software. Even if they are not going to a paid 
return preparer, they are loading the software, coming on and 
using our free-file process. And that, in and of itself, seems 
to be changing the dynamic of return prep and what causes the 
burden on the forms because there is that automated calculator 
involved.
    In fact, an interesting statistic, in 2005, roughly 88 
percent of taxpayers and return preparers combined were using 
some form of commercial software to do automatic calculations.
    Now, to get to your point, that doesn't take the sting out 
of owing the tax, but the use of the software we do believe 
assists in the computations.
    Mr. Lynch. I guess the nature of my question was a little 
bit different.
    The continual encroachment of the AMT capturing more and 
more people each year--and I don't expect you to just spit it 
out. If you could get that information to us, I would like to 
see what the impact of that is, because obviously we're looking 
at giving some relief to the alternative minimum tax, and that 
would be one more argument that we could make.
    Ms. Tucker. Absolutely. We'd be glad to.
    Mr. Lynch. Thank you. I yield back.
    Mrs. Miller. Mr. Waxman.
    Mr. Waxman. Thank you very much. Madam Chair, I want to 
start by noting that in 2004 I asked my staff to examine what 
the President had said on paperwork reduction and to compare it 
to what actually has happened under his administration.
    The resulting report showed that President Bush's rhetoric 
about reducing government paperwork was directly at odds with 
his actions. Now it's 2 years later; the President is still 
talking about reducing government paperwork, and the amount of 
time that Americans are spending on government paperwork is 
still rising. In fact, we've updated our report and found that 
government red tape has exploded over the last 5 years.
    The reality is that this year, according to the 
administration's own reports, Americans will spend over 1 
billion more hours filling out paperwork than when President 
Bush took office. The total number of hours that will be spent 
this year on completing government paperwork is 8.7 billion. 
That's an enormous number. What it means is that the average 
American adult will spend almost 40 hours at home and at work 
completing government paperwork.
    Our report shows the bulk of the paperwork increase is due 
to changes in the law that were proposed by this administration 
and were passed by Congress. The single biggest factor is the 
Medicare prescription drug bill. The new drug program is so 
convoluted and complicated that it is adding 10 hours of 
government red tape for every person enrolled in the Medicare 
drug plan.
    These enormous paperwork burdens were totally unnecessary. 
When the drug bill was passed, the simplest thing we could have 
done would have been to have the Medicare program run the 
benefit just as it runs Medicare Part A and Part B. That would 
have saved seniors money, saved taxpayers money and greatly 
reduced government red tape.
    OMB, which is an important part of the Bush administration, 
says that the Medicare drug benefit is adding 224 million hours 
of paperwork burdens, but I suspect that the government's 
official estimate of 224 million hours of paperwork, enormous 
though it is, is probably low. OMB assumes the best-case 
scenario, not the worst-case that millions of seniors have 
experienced.
    I would like to ask you, Mr. Aitken from OIRA, to talk a 
little bit about your estimates of the increased paperwork 
burden caused by the new Medicare drug benefit. Your numbers 
show for HHS the total agency-wide paperwork burden was about 
277 million hours per year before the Medicare prescription 
drug plan went into effect. Your numbers also show that the 
drug benefit will add over 229 million hours of paperwork by 
the end of this year, with almost all of those hours falling 
under HHS.
    This means that the drug benefit will nearly double the 
total HHS paperwork burden; is that correct?
    Mr. Aitken. I would have to review the numbers in terms of 
the base, but that is approximately the numbers in terms of the 
increase.
    Mr. Waxman. It's really truly an astonishing number. That 
means that the drug benefit alone is causing more work for 
Americans than the rest of the Medicare program, Parts A and B, 
the entire Medicaid program and the agencies, like FDA, 
combined.
    Because of the structure of the benefit, I can think of at 
least three different groups who will be hit by the paperwork 
burden: first, Medicare beneficiaries, who must take the time 
to sift through all the complicated options; second, the 
private plans, who must track enrollment and report to the 
Medicare program; and third, the Medicare program itself, which 
must keep track of the relationship between the plans and the 
beneficiaries.
    Can you provide me with a sense of how the paperwork burden 
is impacting each of these groups, and can you provide us with 
any perspective on how Medicare Part D paperwork compares to 
the paperwork burden for other parts of Medicare.
    If you don't have the answer off the top of your head, 
we'll give you an opportunity to provide it for the record. But 
do you have anything to add now?
    Mr. Aitken. The one thing I would want to clarify, and I 
don't know the details in terms of the particular impact, but 
that the burden of the 220 million burden increase was largely 
a one-time ramp-up establishment of this very big, new program 
in the last 40 years. The estimate for fiscal year 2006 is, I 
believe, around 5 million, something like that; the ICB has the 
numbers. That reflects more once the program is in place, what 
are the kinds of annual burdens.
    And so in terms of the HHS inventory, that one-time 
substantiation increase for fiscal year 2004 will not be 
representative of the future years. In fact, it will go down 
much more so that it's not such a large increase over the long 
run.
    Mr. Waxman. We hope that may be the case, but on the other 
hand, when next year comes, people start all over again. 
They'll look at their plan, see whether their drugs are still 
going to be included in that plan, find out that they fell into 
the doughnut hole, look for a plan that will help keep them out 
of that doughnut hole. And they may well look for plans that 
have other drugs that come on during the course of the year.
    And the whole premise of the structure of this Medicare 
Part D was that people will shop, and if they're going to shop, 
that means they are going to have to go through the process of 
evaluating the plans. If they don't shop, then it seems to me 
that it's a clear renunciation of the whole philosophy, because 
I don't see the market, to start with, to hold down drug costs 
by comparing plans. But if people give up on comparing plans, 
then there is no real argument to make that the competition is 
going to pull down costs; and so far, I don't think the 
competition has brought down costs at all.
    Do you want to comment on that?
    Mr. Aitken. Just briefly.
    I believe that--and I would need to confirm and get back to 
the subcommittee on this--that a significant portion of the 
first-year burden in establishing this program fell also on the 
plans that provided the insurance to the seniors and that a 
substantial portion of that burden would not be continuing 
burden, but would be a one-time need to establish systems and 
so forth.
    Mr. Waxman. Thank you very much, Madam Chair.
    Mrs. Miller. Thank you. And I appreciate the questions. We 
have had several rounds of questions, talked about the Medicare 
Part D extensively.
    It is interesting to note that premiums for the plan 
originally were anticipated to be $37 a month, and now we find, 
because of the competition, the average premium is about $24 a 
month. So actually the marketplace is working as was 
anticipated. It's going to be a fantastic program particularly 
for low-income seniors as well.
    With that, I'll excuse the first panel. We certainly 
appreciate your attendance today and your participation as 
well.
    We'll take a brief recess while we seat our second panel.
    Call the committee back to order. If you could all please 
rise, please.
    [Witnesses sworn.]
    Mrs. Miller. Thank you very much. Our first witness this 
afternoon--our next witness, I should say, of this panel is a 
very frequent visitor to our subcommittee and we welcome her 
back again and that's Linda Koontz. She's the Director of 
Information Management at GAO. She is responsible for issues 
concerning the collection and the dissemination of government 
information. She also has lead responsibility for information 
technology management issues at various agencies, including 
Department of Veterans Affairs, Housing and Urban Development 
and the Social Security Administration as well. So Ms. Koontz, 
we welcome you back to the subcommittee and look forward to 
your testimony, ma'am.

    STATEMENTS OF LINDA D. KOONTZ, DIRECTOR OF INFORMATION 
 MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE; ANDREW LANGER, 
MANAGER, REGULATORY POLICY, NATIONAL FEDERATION OF INDEPENDENT 
 BUSINESS; AND ROBERT HAYES, PRESIDENT, MEDICARE RIGHTS CENTER

                  STATEMENT OF LINDA D. KOONTZ

    Ms. Koontz. Thank you, Madam Chairman, and members of the 
subcommittee. Thank you for inviting me here today to 
participate in the subcommittee's hearings on evaluating 
paperwork reduction efforts in the Federal Government.
    As you know, in its annual report on implementation of the 
Paperwork Reduction Act, OMB reports that paperwork burden grew 
in fiscal 2005 and is expected to increase further in 2006. 
According to the estimates that OMB collected, the total burden 
imposed by Federal information collections increased by 441 
million hours for a governmentwide total burden of 8.1 billion. 
This is an increase of about 5.5 percent from last year's 
total. OMB reports that nearly all this increase, about 95 
percent, resulted from the implementation of new laws. The new 
law having the greatest impact on burden was the one 
establishing voluntary prescription drug coverage under 
Medicare. Implementation of that law resulted in about 224 
million hours of additional burden. The rest of the increase 
came mostly from adjustments to the estimates. Adjustments are 
changes, for example, in estimation methods or the size of the 
population responding to an information collection, which 
result from external factors rather than from deliberate 
Federal action. All told, adjustments accounted for a net 
increase in the burden of about 19 million hours.
    Looking ahead to fiscal year 2006, OMB expects an increase 
of about 250 million hours because of the new model for 
estimating burden being implemented by the IRS. According to 
OMB, this expected rise does not reflect any real changes on 
the burden on taxpayers but only in how IRS estimates it. IRS 
and OMB believe this new statistical model will improve the 
accuracy and transparency of future taxpayer burden estimates.
    One means of reducing burden established in the PRA is the 
requirement for agency chief information officers to review and 
certify information collections to ensure that they impose 
minimum burden and produce maximum utility. However, as we 
reported in 2005, the CIO reviews were not always rigorous. Our 
case study showed that CIOs provide certifications despite 
missing or inadequate support from the program offices 
sponsoring the collections. Numerous factors have contributed 
to these problems, including weaknesses in OMB guidance and a 
lack of management support and priority given by the agencies.
    In our report we recommended that OMB strengthen its 
guidance and the four agencies we reviewed make changes to 
their processes. OMB and the agencies have all taken action to 
partially address these recommendations, but we believe more 
needs to be done to establish the kind of rigorous review 
process that the Congress envisioned in drafting the PRA.
    At agencies that have given their information collections 
increased priority, we have seen promising results. IRS and the 
Environmental Protection Agency have set up alternative 
processes to specifically focus on reducing burden. These 
agencies' missions involve numerous information collections and 
they have devoted significant resources to targeted burden 
reduction efforts involving extensive outreach to stakeholders. 
According to the two agencies, these efforts have led to 
significant reductions in paperwork burden on the public. This 
is in contrast to the CIO process which in our case studies did 
not lead to reduced burden.
    I think we all recognize that achieving true burden 
reduction is a great challenge for the government. As we have 
seen both in this year's PRA report and over the years, the 
tendency is for burden to rise unless we take active steps to 
reduce it. This is why we believe it's important to look for 
new ways to achieve the goals of the PRA.
    In our 2005 report we suggested that Congress consider 
mandating pilot projects to target some collections for 
rigorous analysis along the IRS and EPA approaches. I will 
note, however, while these targeted approaches appear 
promising, they cannot be considered an easy or quick fix. Such 
an approach would likely be more resource intensive than the 
current process and might not be warranted at all agencies that 
do not have the level of paperwork issues that face IRS and 
similar agencies.
    Further, the experience of EPA and IRS suggests that 
success requires top level executive commitment, extensive 
involvement and program office staff with appropriate expertise 
and aggressive outreach to stakeholders.
    Madam Chairman, that conclusion my statement. I would be 
happy to answer questions at the appropriate time.
    [The prepared statement of Ms. Koontz follows:]

         

    
    Mrs. Miller. Thank you very much. I appreciate that. Our 
next witness is someone else that's no stranger to our 
committee here, and that is Andrew Langer. He is the manager of 
regulatory policy for the NFIB, National Federation of 
Independent Business, and his job is to protect the interests 
of small business in the face of ever-increasing burden from 
the Federal regulatory agencies. And we certainly appreciate 
your attendance here this afternoon, Mr. Langer, and the floor 
is yours, sir.

                   STATEMENT OF ANDREW LANGER

    Mr. Langer. Thank you. Thank you, Madam Chair and Ranking 
Member Lynch. It's a pleasure to be here once again. It's an 
honor, in fact, to be invited to testify before you once again 
on the subject of regulatory impacts on small business, 
specifically the burden that small businesses face from Federal 
paperwork.
    I have to tell you, I've been in Washington for over a 
decade now, and like most people who have been in D.C. for a 
considerable amount of time, I have developed a certain blase 
attitude toward certain government reports. But every once in a 
while, something comes across my desk that is patently 
astonishing, something that simply takes my breath away. And so 
it was when I received the information collection budget 
several weeks ago from the White House. It, too, is fairly 
blase. And in fact, I think government reports have to be 
dispassioned no matter what information they have are 
conveying, but one cannot be blase about the basic facts being 
conveyed in this report.
    It starts off with a simple enough precept. America's 
paperwork burden rose an unremarkable 5\1/2\ percent last year. 
Unremarkable, that is, until one realizes just what that is 
5\1/2\ percent of. It's 5.5 of 8 billion hours. That's right, 8 
billion with a B. 5\1/2\ percent or 1/20 of that, just about 1/
20, is an astonishing 441 million hours. When I see a number 
like that, especially on a Friday afternoon, it sits with me 
for some time. I give it a lot of thought. And in this 
particular instance I pulled out the calculator. You see, 
several years ago, NFIB's research foundation did a study on 
paperwork, and after surveying small businesses we came to the 
conclusion that paperwork costs Americans just around $49 an 
hour, about $48.72 I think is the exact number. Some paperwork 
costs far more, some costs far less. Obviously it depends on 
the length, the complexity, the technical skills involved. But 
the average is around $49 an hour. So just looking at the 
average cost, just looking at it from the standpoint of these 
average costs at a macro level, paperwork cost Americans $410 
billion last year. The increase alone was $20 billion.
    Now, in my view, dealing with abstract numbers just doesn't 
help. Without context, it's hard to gauge numbers meaning. We 
can talk about 200 million hours here, you know, 100 million 
hours there, but really, let's put them in context, and let's 
put the costs in context. It's when we compare them to other 
things that we spend money on, we can see just how huge these 
numbers are. I had somebody in my office pull some of the 
numbers out of the Federal budget, and the results are 
startling.
    Let's start with the low end of the spectrum, medical 
research. AIDS, we recognize that AIDS is an important thing to 
be researching, that it's a serious medical threat, serious 
health threat. So worthy that the NIH's Office of AIDS Research 
had a dedicated budget of $2.9 billion. Again, you know, $410 
billion here, $2.9 billion there. What about cancer? The entire 
budget of the National Cancer Institute at the National 
Institutes of Health pales in comparison to what we spend on 
paperwork, a paltry 1.4 percent or only $4 billion. Certainly 
though, Americans are spending far more on our most pressing 
public policy issue, that being the war on terror. Sure they 
are, just not in comparison to what must be our great public 
policy issue, making sure we fill out forms for the Federal 
Government.
    The Department of Homeland Security's spending in 2005 was 
$40 billion. Americans spend 10 times more on paperwork. It's 
defense in the end that costs more than paperwork but not by 
much. DOD spent $475 billion in fiscal year 2005. Sadly, this 
is only 15 percent more than Americans spent on paperwork.
    A system that hemorrhages resources on paperwork in this 
manner is doomed to collapse. One cannot--it cannot perpetuate 
itself, and it will eventually run out of steam. And while I 
know that some of my colleagues attempt to minimize this 
problem, even if we were to agree that the problem is a quarter 
of what it is, a system that focuses $100 billion each year on 
paperwork is not doing much better.
    All the tools I have discussed previously in previous 
testimony to this committee are important. Fully funding OIRA, 
making sure that the Office of Advocacy remains secure, putting 
greater emphasis on reviewing regulations and the paperwork 
burden they impose, setting regulations that aren't reviewed, 
all of these are essential tools in getting a hand on the 
problem.
    But one of the things I haven't touched on in the past is 
the role that Congress plays. Legislation is driven by 
constituent demands and is crafted in a fashion which can 
exacerbate this problem. Every time Congress passes a law which 
is vague and overly complex, it hands Federal agencies the 
tools with which to do much mischief. Vagueness gives us 
regulations where a dry land is magically transformed into 
navigable waters of the United States. Vagueness changes the 
pickup truck used for local landscaping into an interesting 
Federal motor carrier. Vagueness turns recycling into toxic 
releases. If agencies are given laws with holes big enough, 
they will drive trucks through them, holes that they will 
backfill with enough paperwork Americans simply cannot undig 
themselves.
    I'd ask that as you consider how to deal with the agency's 
propagation of paperwork that you would also take time to 
consider how best to address Congress' role.
    I see my time is running out. I would like to reiterate 
that what I had said in the past regarding the business 
gateway, NFIB still firmly supports this issue, this program. 
It's one we agree with our colleagues on the left 
wholeheartedly about. We think that it's a great thing. I do 
want to caution, however, that technology is not a panacea. We 
cannot make technologies mandatory. We have to recognize that 
some businesses will not nor will they ever be tech savvy.
    In fact, I recently learned that a number of NFIB's members 
are Amish, and we know that they are never going to be able to 
use computers. So thank you very much. I look forward to taking 
questions from the committee.
    [The prepared statement of Mr. Langer follows:]

         

    
    Mrs. Miller. OK. Thank you very much. Our last witness 
today is Robert Hayes. He is the president and general counsel 
of Medicare Rights Center. Mr. Hayes led the National and New 
York Coalitions for the Homeless from 1979 to 1989 and has 
practiced law with firms in New York and Maine as well. He is a 
MacArthur Foundation fellow and has received honorary degrees 
from 10 colleges and universities.
    Mr. Hayes, we welcome you to the subcommittee today. We 
appreciate your attendance and look forward to your testimony, 
sir.

                   STATEMENT OF ROBERT HAYES

    Mr. Hayes. Thank you, Chairwoman Miller. Mr. Lynch, good 
afternoon. We at the Medicare Rights Center work each day with 
older and disabled Americans to assist and navigate the 
Nation's health care system. This year much of our work has 
focused on helping men and women, especially the frailest and 
poorest people of Medicare, navigate the complex Part D 
prescription drug program. We appreciate the opportunity to 
share with the subcommittee how the design of this needlessly 
complex Federal program causes far worse consequences than 
wasteful paperwork, although that it does.
    Paperwork reduction in the form of streamlined and 
straightforward health assistance programs do a lot more than 
save money. They also can save lives. Those of you who were in 
Congress back in 2003 know from personal experience that the 
Medicare Modernization Act that created the Part D drug benefit 
rejected the consumer-friendly model of Medicare that has 
served older and disabled Americans so well for the past 40 
years. Rather than creating a Medicare drug benefit, the 
Congress appropriated massive subsidies to launch a new cottage 
industry of for-profit insurance companies that sell what prove 
to be for many people incomprehensible benefit packages. The 
subsidies spawned a ``wild West'' marketplace. 1,400 different 
drug plans, most with varying deductibles, coinsurance, 
copayments, pharmacy networks and covered drugs went to work. 
1,400 plans went to work, marketing their way to a largely 
unprepared consumer base of older and disabled men and women. I 
think this committee understands better than most, complex is 
bad, and very complex is very bad. I cannot identify a more 
complex public benefit program ever enacted by the U.S. 
Congress than the Part D prescription drug program.
    This committee could spend weeks trying to understand the 
multiple layers of regulation, paperwork and bureaucratic 
hurdles that this Part D program has triggered. Millions of our 
parents and grandparents have been forced to spend those weeks 
trying to figure it out, and the estimated Office of Management 
and Budget that it takes 30 minutes to fill out a Part D 
application is unfortunately both laughable and irrelevant. 
Bottom line, even the savviest Medicare consumers have been 
confounded by the complexity of this marketplace and by the 
inaccurate and conflicting information available from both the 
administration and from the drug plans.
    Since last fall people with Medicare have been inundated 
with marketing materials from drug plans that are at best 
incomplete and at worst deceptive. At the request of Members of 
Congress, the Government Accountability Office evaluated the 
information hotlines operated by both the private drug plans as 
well as CMS. The private drug plans got about one out of three 
calls right. CMS did better. They only were wrong 33 out of 100 
times.
    Batting .334 would be good for a baseball player, but it's 
disgraceful when you are being paid by American taxpayers to 
provide a basic need to older Americans desperately trying to 
make the right decision because your heart pills or your 
chemotherapy or your diabetes medication depends on it.
    The Extra Help Program, this is not a program administered 
by CMS but by the Social Security Administration, also needs to 
be looked at in terms of its undue complexity and paperwork. 
That's the program that is supposed to assist people with very 
low incomes, very few assets, be able to avoid some of the 
payments or escape the doughnut hole.
    Madam Chairman, you mentioned that this program, Part D, 
should be a fantastic program for especially older Americans 
who are poor, but three out of four Americans who are eligible 
to sign up for this Extra Help Program, these are people in 
dire need of assistance to help pay for their medicine, have 
not signed up. Why? Take a look at the seven-page application 
Medicare's most vulnerable men and women have to complete. It's 
filled with intimidating questions about bank accounts, life 
insurance policies, any kind of support that's again, being 
pored over by your neighbors and various living arrangements. 
I'd ask any member of this committee, can you tell me what is 
the face value of your life insurance program? I can't. But to 
qualify for this Extra Help Program, my 94-year-old neighbor 
living in a nursing home has to answer that question and do so 
accurately under pain of fine and/or imprisonment.
    Bureaucratic disentitlement, complex programs that keep 
people away from programs that Congress enacts and which folks 
desperately need, is not something new to the Medicare Part D 
program. Medicare Part D highlights this problem, bureaucratic 
disentitlement, but it is nothing new. The Medicare savings 
programs which help low-income individuals pay their Medicare 
cost sharing have been available for 20 years, but only about 
half of eligible very poor older Americans nationwide are 
enrolled. Medicaid, now 40 years old, boasts similarly low 
enrollment rates.
    There are simple fixes to this, and it may not be the 
administration that can do them without the support of the 
Congress. Thank you.
    Mrs. Miller. Thank you very much. I appreciate those 
comments. I'm going to start with Ms. Koontz. You have been 
involved in this process for a very long time and probably 
longer than you would like to think about, I suppose. But I 
guess I'd just like to ask you for your honest assessment of 
the PRA status, where you think it is, and if you think that it 
adequately encourages agencies to really minimize paperwork 
reduction. What do you really think of where we are with this 
thing now?
    Ms. Koontz. I think there's a couple factors with the PRA. 
One issue I would talk to are the burden reduction goals that 
were in the PRA that went through 2001, it was 10 percent for a 
couple of years and 5 percent for a few more years after that 
up until 2001. I think it's pretty clear that those kind of 
numbers, which seemed rather arbitrary, don't really work in 
terms of providing incentives for agencies, and I think what we 
were looking for is maybe some--looking at some alternative 
ways, as we reported to you in 2005, to reduce burdens, sort of 
along the lines of what IRS is doing and what EPA are doing, 
and we'd like to see agencies be setting concrete goals for 
data reduction and reporting those publicly and then being 
accountable for achieving them maybe in a variety of ways.
    The current process relies a lot on the CIO review process 
within agencies and also on OMB review. And frankly those 
processes, they haven't been fully implemented in compliance 
with the law for one thing, and they just don't result in 
burden reductions.
    So I think there's some opportunities to relook at some of 
the aspects of PRA and perhaps to improve them perhaps when 
it's reauthorized.
    Mrs. Miller. Yeah. I was going to ask you what you think 
the most important thing that this subcommittee can do as a 
result of this hearing today. I mean, I do like to have some 
sort of action plan at the end of these various hearings, not 
that we just forget about everything that we've heard, but some 
of the things that you just mentioned there, are there any 
others that you think, and would they require--I don't know, 
it's a question for you and my staff, I guess they would 
require legislation to enable the agencies to really assist 
them in how we can. What is important for this subcommittee to 
take away from your testimony today? How we can improve the 
PRA?
    Ms. Koontz. One of the things is that we did suggest in our 
2005 report that Congress perhaps alter the PRA to establish 
some pilot projects to look at alternative ways of reducing 
burden in the agencies. So that's one thing that can be done 
through legislation and that involves some of the other things 
I talked about, setting agency targets and the like.
    Some of the other things that have been--about a year ago 
or 18 months ago, we had a forum on the PRA, looking ahead to 
reauthorization and we brought together a number of experts 
from both the government and the private sector, and one of the 
things that was mentioned in that particular forum that we 
haven't--we haven't audited this, but there was a strong 
feeling too that perhaps there was a need for OMB to get out of 
the retail review process. Right now they're required to review 
every single collection that comes through. They had suggested 
well, you know, maybe we could have more impact if we were to 
concentrate on more significant collections or some kind of 
different threshold and that. So that's something I think we've 
said in the past that you could consider, but again we haven't 
really looked at all the ramifications of that, but it was I 
think a responsible suggestion.
    Mrs. Miller. Mm-hmm. Yes. I appreciate that, and it's 
interesting.
    Mr. Langer, you mentioned that you didn't have enough time 
in your testimony to talk too much about the business gateway. 
I think you said hopefully it was going to be ready in October. 
Could you flush that out a little bit for the committee?
    Mr. Langer. The business gateway program has been in the 
works for some time. I came onboard at NFIB in 2002 and 
immediately was invited to a retreat that SBA and some others 
have put together that were working on the first iterations of 
it. In essence, the idea is down the road, a small business 
will be able to go online, type in a few pieces of identifying 
information, the industry it's in, number of employees, the 
location of the business because obviously regulations 
sometimes change depending on locale, and in theory the system 
spits out all the regulations that apply to the business, will 
hopefully give them very simple, plain English compliance 
guides, and will offer up the opportunity to fill out forms 
online or at least give them the forms that they need. The 
first iteration, it was originally called the business 
compliance one-stop, and it was hard to get the agencies, you 
know, onboard with that. The second iteration, the business 
gateway's a step in the right direction. They're now moving to 
the next iteration of the business gateway. I haven't seen it 
yet, but it sounds promising from the folks that I've talked 
to, and that's supposed to roll out in early October.
    I mean, the idea is we have already taken the first step, 
which is to get that massive Code of Federal Regulations 
translated into little bits and bytes and put onto the 
computer, but it's an incredibly cumbersome tool to use, and no 
small business is going to use it. It's impossible for a small 
business to go online and figure out what it is they need to 
comply with by going online with a searchable CFR. Yes, ask a 
small business owner what a CFR is, they're not going to know 
what you are talking about. The real heavy lifting of it is for 
all of the agencies to get involved, review the regulations and 
create those simple compliance guides. It's been one of the 
problems that we've had continuously with regulatory agencies 
across the board, is getting them to do that.
    One of the issues that I worked on, you know, in deference 
to the ranking minority member, the TRI program was a prime 
example where we worked very hard with EPA to get them to 
create simplified compliance guides, and there was a great deal 
of reluctance to get them to do it. You know, if I could have 
gotten a simple, you know, for specifically dealing with the 
lead TRI issue, getting a simple reference table of contents 
where if you had a question, it will tell you where to go, that 
was hard enough. The point is, it will take leadership on the 
part of Congress to get agencies onboard fully with this 
program. To incentivize the approach they are creating these 
simplified compliance guides. Once we get them online, then 
those businesses that aren't on computers, the resources are 
there already, they already will have been offered. The 
business gateway itself just makes it a much more easily 
searchable way for them to find those resources, but we 
wholeheartedly support it. It's one where, you know--
unfortunately he's not here today, but Robert Schule from OMB, 
it's one of those areas where he and I agree wholeheartedly, it 
goes a long way because as we talked about with Medicare here 
today, it's not--while filling out the forms is time consuming, 
it's understanding the questions that are being asked and being 
able to sort of ferret out that information where the rubber 
hits the road, and we're--you know, to us, it's not necessarily 
yes, you know, Medicare's a huge, huge program. But we're also 
interested in the myriad of other burdens small businesses face 
as well. You know, you might talk about something that might 
only represent 1 percent of a small business's burden, but 
that's 1 percent. It's certainly better off than we are now. 
So----
    Mrs. Miller. Absolutely. That is an interesting concept. 
You wonder how many small businesses are using technology to 
really--I mean, you are talking about sort of a one-stop shop 
or something that's really putting all the information together 
for them, as opposed to a guy that's going online, he doesn't 
even know what information to be asking for. Maybe he's just 
downloading forms. I mean, how is that helping him?
    Mr. Langer. That's one of the issues. EPA put out the next 
step in terms of their Small Business Paperwork Reduction Act 
requirements. And they have everything you need in one place. I 
got the link the other day, and it's a massive webpage, but 
it's all there, but it's really hard to search. You can do a--
you know, if you know anything about Internet Explorer, you can 
find things that's on there. For instance, I went on looking 
for dry cleaners because dry cleaners are small businesses 
faced with some of the most cumbersome environmental 
regulations that are out there. And you can find it. It's not 
easily understandable, but it's all there. It's a good step in 
the right direction. As headache inducing as the page looks, it 
actually is very helpful.
    Mrs. Miller. Just one final question. What do you think is 
the--I mean, obviously for a small business, dealing with the 
IRS is the biggest part of their burden. That's not inherent to 
small business, to everybody. In addition to the IRS, what do 
you think small businesses would say is the biggest paperwork 
headache that they absolutely have?
    Mr. Langer. You can't say--it depends on the----
    Mrs. Miller. What do they say?
    Mr. Langer. It depends on the business. I mean, we get 
calls from members, you know, it can be the forms that are 
dealing with the H-2B visa applications 1 week. The last couple 
of weeks it's been the FTC's proposed regulations governing 
direct sales. Now, NFIB probably doesn't have a position on it, 
but I have been hearing from members, it will be a huge 
paperwork problem for them. If you want to sell, say, Mary Kay 
cosmetics, and you want to buy a kit, you're going to have to 
have a waiting period. It will take you longer to get the Mary 
Kay kit than it does a handgun in most States, with huge 
amounts of paperwork that you have to fill out and that whoever 
sells you the kit has to hold onto for years. This is going to 
be a huge burden for a lot of folks we hear from a lot of 
people out there. A lot of Department of Agriculture programs, 
especially for small, unsophisticated farmers, are difficult to 
deal with. We are hearing a lot about animal ID these days. But 
again, we don't have a position on that. We're just hearing 
from members on those things, but for every business, it really 
depends on the industry.
    Obviously if you're dealing with anything that has to do 
with where you're dealing with chemicals on a daily basis or 
any sort of a chemical substance, you're going to be dealing 
with OSHA and EPA. Chances are if you're transporting anything, 
you are going to deal with the Department of Transportation, 
and that's another issue, which is this duplication of 
regulation and duplication of paperwork where you have three 
different agencies that are asking for largely the same 
information but in vastly different forms. That's a problem, 
and we don't see a lot of cooperation between agencies. There's 
supposed to be a cooperation, and there isn't a lot of it. And 
I'm not sure where Congress' role is in that. But if there's a 
way for Congress to be leaders on that, we'd certainly 
appreciate it.
    Mrs. Miller. Thank you very much.
    Mr. Lynch.
    Mr. Lynch. Mr. Hayes, you have been very patient there. 
Again, to all the panelists here, I appreciate your willingness 
to help the committee with this work. Mr. Hayes, I had asked 
earlier Mr. Aitken if he could go over the estimate regarding 
Medicare Part D and compliance, and it just seemed to me--first 
of all, we had to remember that we're going to spend $800 
billion--almost $800 billion in the next 10 years. So apart 
from the paperwork burden, there's the $800 billion, and no one 
is suggesting that we don't spend money on a drug benefit, but 
did it have to be this one? Did it have to be so complicated? 
And Mr. Aitken, you know, begged off on the number itself, 
saying that it had been provided by HHS. But you know, I've 
spent way too much time on this one program trying to explain 
it to my constituents to think that number is valid. And I'd 
like to get a sense--you're the Executive Director of the 
Medicare Rights Center. What do you think about that estimate, 
about--I think they're saying a half-hour or something like 
that, that was the estimate, a half-hour a person to figure 
this thing out and to enroll?
    Mr. Hayes. I mean, that has no basis in anything real, Mr. 
Lynch. I think Mr. Langer probably put his finger on the issue 
that, you know, maybe ultimately filling out an application 
form may take 30 minutes for somebody in theory, but it can 
take really weeks and weeks and weeks of study, going to 
meetings, reading through Web sites, if anyone is to have even 
a fair chance to understand which particular application they 
want to fill out. So that's really the issue from the consumer 
perspective, you really could have--to be honest--an infinite 
amount of time and still not be able to have a fair chance in 
this marketplace to make an informed choice, and I think that's 
what has been so unfair about a market system that the 
information is all in the hands of the sellers. The buyers are 
pretty much shooting in the dark, and you know, to the state 
now that the enrollment period's over for most people, most of 
our helping people is to try to explain, this is what you 
signed up for, sir. Nobody told me, called to tell us, that 
there was a doughnut hole in the plan they sold us. And guess 
what, now people are going to pharmacies and finding out that 
they have to pay retail prices, which often they can't afford, 
for the medicine their doctors prescribed.
    Mr. Lynch. All right. Do you have a better number--any way 
of, you know----
    Mr. Hayes. No. I mean I have plenty of solutions of how to 
make this, you know, unfair, inequitable, wasteful system more 
efficient, and it's probably called Medicare; that is, go back 
to what has worked pretty effectively. But I think--I mean, I 
know my organization and every other organization like mine has 
grown dramatically this year because there is such a massive 
need that's going largely unmet, but we keep trying to do more 
and more to help people, and I wish to God that I could go out 
of business, at least out of this business, and I wish to God 
that the Federal Government would spend more money getting 
medicine to people and less money with bus tours trying to 
explain this thing to people.
    Mr. Lynch. Right. OK. Thank you. I yield back.
    Mrs. Miller. OK. We certainly want to thank all the 
witnesses for your attendance here today, and we'll look to 
continuing to work with you to reduce the paperwork burden for 
every American citizen. And with that, I'll adjourn the 
meeting. Thank you very much.
    [Whereupon, at 3:35 p.m., the subcommittee was adjourned, 
subject to the call of the Chair.]