[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
INVESTIGATING OSHA'S REGULATORY AGENDA AND ITS IMPACT ON JOB CREATION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WORKFORCE PROTECTIONS
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. House of Representatives
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, FEBRUARY 15, 2011
__________
Serial No. 112-5
__________
Printed for the use of the Committee on Education and the Workforce
Available via the World Wide Web:
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or
Committee address: http://edworkforce.house.gov
----------
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COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN KLINE, Minnesota, Chairman
Thomas E. Petri, Wisconsin George Miller, California,
Howard P. ``Buck'' McKeon, Senior Democratic Member
California Dale E. Kildee, Michigan
Judy Biggert, Illinois Donald M. Payne, New Jersey
Todd Russell Platts, Pennsylvania Robert E. Andrews, New Jersey
Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
Virginia Foxx, North Carolina Virginia
Duncan Hunter, California Lynn C. Woolsey, California
David P. Roe, Tennessee Ruben Hinojosa, Texas
Glenn Thompson, Pennsylvania Carolyn McCarthy, New York
Tim Walberg, Michigan John F. Tierney, Massachusetts
Scott DesJarlais, Tennessee Dennis J. Kucinich, Ohio
Richard L. Hanna, New York David Wu, Oregon
Todd Rokita, Indiana Rush D. Holt, New Jersey
Larry Bucshon, Indiana Susan A. Davis, California
Trey Gowdy, South Carolina Raul M. Grijalva, Arizona
Lou Barletta, Pennsylvania Timothy H. Bishop, New York
Kristi L. Noem, South Dakota David Loebsack, Iowa
Martha Roby, Alabama Mazie K. Hirono, Hawaii
Joseph J. Heck, Nevada
Dennis A. Ross, Florida
Mike Kelly, Pennsylvania
[Vacant]
Barrett Karr, Staff Director
Jody Calemine, Minority Staff Director
------
SUBCOMMITTEE ON WORKFORCE PROTECTIONS
TIM WALBERG, Michigan, Chairman
John Kline, Minnesota Lynn C. Woolsey, California,
Todd Rokita, Indiana Ranking
Larry Bucshon, Indiana Donald M. Payne, New Jersey
Trey Gowdy, South Carolina Dennis J. Kucinich, Ohio
Kristi L. Noem, South Dakota Timothy H. Bishop, New York
Dennis A. Ross, Florida Mazie K. Hirono, Hawaii
Mike Kelly, Pennsylvania George Miller, California
[Vacant]
C O N T E N T S
----------
Page
Hearing held on February 15, 2011................................ 1
Statement of Members:
Hirono, Hon. Mazie K., a Representative in Congress from the
State of Hawaii, prepared statement of..................... 54
Kucinich, Hon. Dennis J., a Representative in Congress from
the State of Ohio, prepared statement of................... 55
Walberg, Hon. Tim, Chairman, Subcommittee on Workforce
Protections................................................ 1
Prepared statement of.................................... 2
Additional submissions:
Letter, dated Feb. 22, 2011, from Tree Care Industry
Association, Inc. [TCIA]........................... 56
Letter, dated Oct. 15, 2010, to Hon. Hilda L. Solis,
Secretary, U.S. Department of Labor, from U.S.
House Members...................................... 57
Letter, dated Feb. 4, 2011, to Secretary Solis, from
U.S. Senators...................................... 60
Letter, dated Aug. 5, 2008, Hon. Elaine L. Chao,
former Secretary, U.S. Department of Labor, from
U.S. House Members................................. 62
Letter, dated Sept. 27, 2007, to former Secretary
Chao, from U.S. Senators........................... 64
Woolsey, Hon. Lynn, ranking minority member, Subcommittee on
Workforce Protections...................................... 3
Prepared statement of.................................... 5
Additional submission:
Slide with photo of Hayes Lemmerze combustible dust
explosions and fire................................ 66
Statement of Witnesses:
Holmes, Jacqueline M., Esq., of Counsel, Jones Day,
testifying on behalf of the U.S. Chamber of Commerce....... 26
Prepared statement of.................................... 29
Miser, Tammy, founder, United Support and Memorial for
Workplace Fatalities....................................... 22
Prepared statement of.................................... 23
Sessions, Stuart L., president, Environomics, Inc............ 13
Prepared statement of.................................... 15
Sullivan, Hon. Thomas M., Esq., of Counsel, Nelson Mullins
Riley and Scarborough...................................... 7
Prepared statement of.................................... 9
INVESTIGATING OSHA'S REGULATORY AGENDA AND ITS IMPACT ON JOB CREATION
----------
Tuesday, February 15, 2011
U.S. House of Representatives
Subcommittee on Workforce Protections
Committee on Education and the Workforce
Washington, DC
----------
The subcommittee met, pursuant to call, at 10:03 a.m., in
room 2175, Rayburn House Office Building, Hon. Tim Walberg
[chairman of the subcommittee] presiding.
Present: Representatives Walberg, Kline, Bucshon, Noem,
Ross, Kelly, Woolsey, Payne, Kucinich, and Miller.
Staff present: Kirk Boyle, General Counsel; Casey Buboltz,
Coalitions and Member Services Coordinator; Ed Gilroy, Director
of Workforce Policy; Ryan Kearney, Legislative Assistant; Brian
Newell, Press Secretary; Molly McLaughlin Salmi, Deputy
Director of Workforce Policy; Linda Stevens, Chief Clerk/
Assistant to the General Counsel; Loren Sweatt, Professional
Staff Member; Aaron Albright, Minority Deputy Communication
Director; Tylease Alli, Minority Hearing Clerk; Daniel Brown,
Minority Staff Assistant; Jody Calemine, Minority Staff
Director; Brian Levin, Minority New Media Press Assistant; Kara
Marchione, Minority Senior Education Policy Advisor; Richard
Miller, Minority Senior Labor Policy Advisor; Megan O'Reilly,
Minority General Counsel; Julie Peller, Minority Deputy Staff
Director; and Michele Varnhagen, Minority Chief Policy Advisor
and Labor Policy Director.
Chairman Walberg [presiding]. Well, I am told a quorum is
present. It is time to begin, so let's begin.
The subcommittee will come to order. Good morning. Allow me
to welcome my colleagues and our guests to our first hearing of
the Subcommittee on Workforce Protections. The subcommittee
oversees a number of federal policies and programs that reach
into America's workplaces. The decisions that we make in this
subcommittee touch upon the lives of countless workers,
employers, and their families.
I look forward to working with my colleague, Lynn Woolsey,
the ranking Democrat member of the subcommittee. She has a deep
passion for these issues, and no one can question her
commitment to worker safety.
I know there will be times when we disagree. We have talked
about that. But I have pledged to put forward my best efforts
to find common ground whenever possible. The cause of worker
safety is best advanced when we work together.
And so that is why today's hearing will examine the
regulatory agenda at the Occupational Safety and Health
Administration. Since 1970, OSHA has been charged with
enforcing laws that govern worker safety and health by
developing rules intended to keep workplaces free from
recognized hazards. The regulatory agenda speaks to the
Administration's priorities. Worker safety is a goal we all
share. However, we have real concerns with the policies and
process the Administration has recently proposed to reach that
goal.
Over the last 2 years, OSHA has not only attempted to
implement several policy changes that would have profound
impact on the workplace; it has become an Administration more
focused on punishment than prevention. All employers who
jeopardize the safety of workers should be held accountable to
the fullest extent of the law.
However, punishment is just one piece of enforcing the law.
Our goal should be to prevent workplace accidents before they
happen, not simply shame an employer once a tragedy has
occurred on the job site.
And so that is why I am concerned with the recent actions
that suggest the Administration has shifted the balance toward
punishment and taken its sights off commonsense rules that
promote prevention.
Worker safety is a priority and so, too, is promoting
policies that will allow businesses to grow and hire new
workers. Needless rules and onerous regulations are often
roadblocks to economic growth and job creation, which we all
want.
The President has called on his Administration to scour the
books in search of policies that undermine private-sector job
growth. This subcommittee looks forward to joining that effort
in the weeks and months ahead.
I am particularly aware of the urgency of the task before
us. My home state of Michigan has been hit hard by recent
recession. Currently, the unemployment rate in Michigan stands
at 11.7 percent, and even higher in some counties in my
congressional district that I represent. We all must be
partners in an effort to get the American people back to work.
Our witnesses today will discuss the potential economic and
worker safety impact of OSHA's regulatory agenda. We have heard
the mantra that good jobs are safe jobs. I agree. But let us
ensure that bad policy does not destroy the good jobs we need
to create.
At this time, I would like to yield to Congresswoman
Woolsey, the ranking member of the subcommittee, for her
opening remarks.
[The statement of Mr. Walberg follows:]
Prepared Statement of Hon. Tim Walberg, Chairman,
Subcommittee on Workforce Protections
Good morning. Allow me to welcome my colleagues and our guests to
our first hearing of the Subcommittee on Workforce Protections. This
subcommittee oversees a number of federal policies and programs that
reach into America's workplaces. The decisions we make in this
subcommittee touch upon the lives of countless workers, employers, and
their families.
I look forward to working with my colleague Lynn Woolsey, the
ranking Democratic member of the subcommittee. She has a deep passion
for these issues and no one can question her commitment to worker
safety. I know there will be times when we disagree but I pledge to put
forward my best efforts to find common ground whenever possible. The
cause of worker safety is best advanced when we work together.
That is why today's hearing will examine the regulatory agenda at
the Occupational Safety and Health Administration. Since 1970, OSHA has
been charged with enforcing laws that govern worker safety and health
by developing rules intended to keep workplaces free from recognized
hazards. The regulatory agenda speaks to the administration's
priorities. Worker safety is a goal we all share, however, we have real
concerns with the policies and process the administration has recently
proposed to reach that goal.
Over the last two years, OSHA has not only attempted to implement
several policy changes that would have profound impact on the
workplace, it has become an administration more focused on punishment
than prevention. All employers who jeopardize the safety of workers
should be held accountable to the fullest extent of the law.
However, punishment is just one piece of enforcing the law. Our
goal should be to prevent workplace accidents before they happen, not
simply shame an employer once a tragedy has occurred on the job site.
That is why I am concerned with recent actions that suggest the
administration has shifted the balance toward punishment, and taken its
sights of commonsense rules that promote prevention.
Worker safety is a priority, and so too is promoting policies that
will allow businesses to grow and hire new workers. Needless rules and
onerous regulations are often roadblocks to economic growth and job
creation. The president has called on his administration to scour the
books in search of policies that undermine private-sector job growth.
This subcommittee looks forward to joining that effort in the weeks and
months ahead.
I am particularly aware of the urgency of the task before us. My
home state of Michigan has been hit hard by the recent recession.
Currently, the unemployment rate in Michigan stands at 11.7 percent and
even higher in some counties in the congressional district I represent.
We all must be partners in an effort to get the American people back to
work.
Our witnesses today will discuss the potential economic and worker
safety impact of OSHA's regulatory agenda. We have heard the mantra
that ``Good jobs are safe jobs.'' I agree. But let us ensure that bad
policy does not destroy the good jobs we need to create. At this time,
I would like to yield to Congresswoman Woolsey, the Ranking Member of
the Subcommittee, for her opening remarks.
______
Ms. Woolsey. Thank you, Mr. Chairman. And congratulations
on your election as chair of this subcommittee.
Chairman Walberg. Thank you.
Ms. Woolsey. It was a very active subcommittee in the last
Congress. And I look forward to actually continuing much of the
work that we started in, moving forward in this Congress. And I
am certain that we are going to have a good working
relationship.
I applaud today's focus on OSHA's regulatory agenda,
because over the past 4 years, this panel has explored a number
of loopholes in OSHA's regulatory safety net. And I am hoping
that under your leadership, Mr. Chairman, together we can fix
what is needed and bring OSHA into the 21st century.
But first things first. If OSHA comes under assault from
the new majority, the fact is, the agency may not be able to
carry out its core missions. For example, the 18 percent
reduction of OSHA's budget in the Republican Continuing
Resolution for fiscal year 2011 would eliminate 415 employees,
bringing OSHA to its lowest staffing levels since 1974, likely
forcing OSHA to furlough all of its employees for 3 months.
This would mean 8,000 fewer workplace hazard inspections and
740 fewer whistleblower discrimination investigations this year
alone.
And the deeper one digs, the worse it appears. The
Republican funding resolution completely zeroes out OSHA's
statistics and information division. Mr. Chairman, that means
no more data collection on workplace health and safety trends,
which is critical for targeting hazardous work sites. This cut
even shuts down OSHA's website.
The continuing resolution we are currently debating
includes cuts to state OSHA programs, including California and
Michigan, both of our states, which are under extreme fiscal
duress at the moment. It cuts OSHA's safety and health
standards by 16 percent, blocking long-overdue rules, like the
one to prevent falls at non-construction sites.
In other words, Mr. Chairman, the Republican C.R. doesn't
just trim OSHA's budget; it absolutely cripples the agency and
needlessly jeopardizes safety standards and endangers American
workers.
So today's hearing about how OSHA's regulatory agenda
affects job creation and investment is truly serious. I
strongly believe it is the lack of regulation that has killed
workers and their jobs.
Take, for example, a deadly 2009 explosion at the ConAgra
Slim Jim plant in Garner, North Carolina. Contractors purged
the natural gas line they were connecting to a new industrial
water heater, but they didn't smell gas, and they kept venting
the pipe for 2.5 hours, until the gas found a spark. Three
workers were killed; 71 were injured in that explosion.
Rather than rebuild the section of the plant that was
destroyed, ConAgra is consolidating production elsewhere,
closing the plant and putting 700 people out of work.
Now, I want you to look at this hose.----
Chairman Walberg. I will move over, if necessary.
[Laughter.]
Ms. Woolsey. Had there been OSHA regulations banning indoor
gas purging, the contractors would have simply taken a piece of
hose like this, a piece of hose like this, and connected it to
the gas pipe and vented it outside, away from the building. So
everyone has to agree: Had there been such a rule, there would
have been no deaths, there would have been no injuries, and 700
people would still have their prized factory jobs in their same
area where they live.
Red tape has slowed OSHA's efforts to prevent combustible
dust fires and explosions, like the 2008 tragedy at Imperial
Sugar and the Indiana dust explosion illustrated at the easel,
which is to my right over there. That is what that looked like,
that killed the brother of a witness who is here today.
We know the dust explosion problem can be fixed and without
damaging competitiveness. Following a string of grain elevator
explosions, OSHA issued a grain-handling standard in 1987.
Since that rule, there has been a dramatic decline in
explosions without any negative economic impact on the grain-
handling industry or related small businesses.
So, Mr. Chairman, as we begin our first hearing of the
112th Congress, we have to challenge some of the long-held
erroneous assumptions about regulations being bad for profit
margins and economic growth. OSHA needs the resources to carry
out its mission to protect its workers and to help businesses
at the same time.
So, again, I want to thank you and I want to thank the
witnesses who are here today, especially those of you who have
had to travel long distances to be with us. I look forward to
your testimony. Thank you.
[The statement of Ms. Woolsey follows:]
Prepared Statement of Hon. Lynn Woolsey, Ranking Minority Member,
Subcommittee on Workforce Protections
Thank you Mr. Chairman, and congratulations on your election as
Chair of this subcommittee.
I applaud today's focus on OSHA's regulatory agenda, because over
the past four years, this panel has explored a number of loopholes in
OSHA's regulatory safety net, and i'm hoping that under your
leadership, together we can fix what is needed and bring OSHA into the
21st century.
But first things first. If OSHA comes under assault from the new
majority, the fact is, the agency may not be able to carry out its core
missions.
For example, the 18% reduction to OSHA's budget in the
Republican continuing resolution for fiscal year 2011 would eliminate
415 employees, bringing OSHA to its lowest staffing level since 1974.
Likely forcing OSHA to furlough all of its employees for 3
months. This would mean 8,000 fewer workplace hazard inspections and
740 fewer whistleblower discrimination investigations this year.
And the deeper one digs, the worse it gets:
The Republican funding resolution completely zeroes out
OSHA's statistics and information division. That means no more data
collection on workplace health and safety trends, which is critical to
targeting hazardous work sites. This cut even shuts down OSHA's web
site.
The continuing resolution we are currently debating
includes cuts to state OSHA programs, including California and
Michigan--both of which are under extreme fiscal duress.
It cuts OSHA's safety and health standards by 16%--
blocking long overdue rules, like the one to prevent falls at
construction sites from comint to fruition.
In other words, Mr. Chairman, the Republican CR doesn't just trim
OSHA's budget, it absolutely cripples the agency needlessly
jeopardizing safety standards and endangering American workers.
So today's hearing about how OSHA's regulatory agenda affects job
creation and investment is truly serious.
I strongly believe it's the lack of regulations that has killed
workers and their jobs.
Take, for instance, a deadly 2009 explosion at the Con Agra ``Slim
Jim'' plant in Garner, North Carolina. Contractors purged a natural gas
line they were connecting to a new industrial water heater. But they
didn't smell gas and kept venting the pipe for 2\1/2\ hours--until the
gas found a spark. Three workers were killed and 71 were injured in the
explosion.
Rather than rebuild the section of the plant that was destroyed,
Con Agra is consolidating production elsewhere, closing the plant and
putting 700 people out of work.
Had there been OSHA regulations banning in-door gas purging, the
contractors would have simply taken a piece of hose like this, and
connected it to the gas pipe, and vented it outside away from the
building.
Everyone agrees: had there been such a rule, there would have been
no deaths or injuries, and 700 people would still have prized factory
jobs.\1\
---------------------------------------------------------------------------
\1\ Safety Bulletin, Dangers of Purging Natural Gas into Buildings,
Chemical Safety Board, September 2009.
---------------------------------------------------------------------------
Red tape has slowed OSHA's efforts to prevent combustible dust
fires and explosions, like the 2008 tragedy at imperial sugar, and the
indiana dust explosion illustrated at the easel to my right, that
killed the brother of a witness here today.
We know the dust explosion problem can be fixed * * * and without
damaging competitiveness. Following a string of grain elevator
explosions, OSHA issued a grain handling standard in 1987. Since that
rule, there has been a dramatic decline in explosions without any
negative economic impact on the grain handling industry or related
small businesses.
Mr. Chairman, as we begin our first hearing of the 112th Congress,
we must challenge some of these long-held, erroneous assumptions about
regulations being bad for profit margins and economic growth. OSHA
needs the resources to carry out its mission, protect workers, and help
businesses at the same time.
I want to thank our witnesses for being here today, especially
those who had to travel a long distance to be with us, and I look
forward to their testimony. Thank you.
______
Chairman Walberg. I thank the gentlelady. And I think we
are both committed to making sure that these hearings do deal
with subjects of great interest, concern, and close to your
heart, as well as the rest of the committee.
Pursuant to Committee Rule 7(c), all members will be
permitted to submit written statements to be included in the
permanent hearing record. And without objection, the hearing
record will remain open for 14 days to allow such statements
and other extraneous material reference during the hearing to
be submitted for official hearing record.
It is now my pleasure to introduce our distinguished panel
of witnesses, the first being the Honorable Thomas Sullivan,
works in the law firm of Nelson, Mullins, Riley & Scarborough,
where he represents clients on a number of regulatory and
rulemaking matters, while also serving as the head of the Small
Business Coalition for Regulatory Relief. Prior to joining
Nelson Mullins, Mr. Sullivan served as the chief counsel for
advocacy in the Small Business Administration from 2002 to
2008. Mr. Sullivan earned his JD from Suffolk University Law
School and a bachelor of arts in English from Boston College.
We welcome you.
Mr. Stuart Sessions is president of Environomics. Mr.
Sessions was formally an analyst and manager with the Office of
Management and Budget and Environmental Protection Agency. Mr.
Sessions holds a master's of public policy from the Kennedy
School of Government at Harvard University and a bachelor of
arts and economics from Amherst College. Mr. Sessions is
testifying today on behalf of the Coalition for Workplace
Safety.
Thank you, and we welcome you.
Ms. Tammy Miser is an advocate for worker safety and
founder of United Support and Memorial for Workplace
Fatalities, an organization that serves as an advocacy group
for individuals affected by workplace-related injury or death,
and to add to that, has experienced the impact in her own life.
We welcome you and thank you for being here.
And then, finally, Ms. Jacqueline Holmes works in the law
firm of Jones Day, where she focused her practice on litigation
involving federal and state regulatory agencies. Ms. Holmes
earned a JD from Loyola Law School in Los Angeles, California,
and a bachelor in science from the California Institute of
Technology. Ms. Holmes is testifying today on behalf of the
U.S. Chamber of Commerce.
And we welcome you. Thank you.
Before I recognize each of you to provide your testimony,
let me briefly explain our lighting system. You will each have
5 minutes to present your testimony. When you begin, the light
in front of you will turn green. When 1 minute is left, the
light will turn yellow. And when your time is expired, the
light will turn red, and it doesn't get any redder than that.
I promise I won't gavel you down mid-sentence. I probably
won't gavel you down, either. But we will make it clear that
your time is expired. But I would ask you that you try to wrap
up your testimony when your time has expired.
After everyone has testified, members will each have 5
minutes to ask questions of the panel. I won't make the same
promise to members that I won't gavel them down when their time
is expired, but I am sure that we can work on that.
With that, let me now turn to our distinguished panel, and
let's begin with Mr. Sullivan.
STATEMENT OF HON. THOMAS M. SULLIVAN, ESQ., OF COUNSEL, NELSON
MULLINS RILEY AND SCARBOROUGH
Mr. Sullivan. Thank you, Mr. Chairman, members of the
committee. I am pleased to present this testimony on how OSHA
considers the impact on small entities when developing
regulatory proposals.
The testimony this morning is not being presented on behalf
of any specific clients at my law firm. Rather, my advice today
is drawn from my 2 decades of work on small business regulatory
issues. I would like to briefly summarize my statement, so I
ask that the full written statement be entered into the record.
Thank you.
Chairman Walberg. So ordered.
Mr. Sullivan. The Regulatory Flexibility Act requires
agencies to satisfy certain procedural requirements when they
plan new regulations, including identifying the small entities
to be affected, analyzing and understanding the economic
impacts that will be imposed, and considering alternative ways
to achieve the regulatory goal, while reducing the economic
burden on those entities.
The Reg Flex Act was amended in 1996 by the Small Business
Regulatory Enforcement Fairness Act--yes, there is an acronym.
That acronym is SBREFA, and SBREFA requires OSHA, EPA, and the
newly created Consumer Financial Protection Bureau to convene
small-business review panels. I refer to those panels as SBREFA
panels. Whatever their planned rules are likely to have a
significant economic impact on a substantial number of small
entities.
The panel prepares a report containing constructive
recommendations for the agency planning the rule, and that
report is published with the proposed rule.
So why are there small-business protections in the
rulemaking system? Well, there are three basic reasons. One-
size-fits-all federal mandates don't work when applied to small
business. Small businesses face higher costs per employee to
comply with the federal regulations. And small businesses are
critically important to the American economy.
First, prevention of one-size-fits-all federal mandates.
Many times, federal rules that may work for large corporations
simply don't work for small firms. The Regulatory Flexibility
Act is supposed to force federal regulators to think about how
a small operation would actually comply with a rule and tweak
the proposal to make sure that it works for the small business,
in addition to the large corporation.
Disproportionate impact that federal rules have on small
business. Research published last year pegs the total cost of
complying with federal rules at over $1.75 trillion. That
burden amounts to a cost of $15,580 per household, which is
more than 1.5 times what households pay for medical care. Most
alarming is the fact that in the 4 years studied, the cost of
complying with federal rules rose faster than the cost of per
household of providing medical care.
Implementation of the Regulatory Flexibility Act at OSHA.
In three recent regulatory actions, OSHA appears to be ignoring
both the spirit and the legal requirements of the Reg Flex Act.
First, OSHA's MSD reporting rule.
In January last year, OSHA proposed that businesses record
work-related MSDs in a new column on their OSHA 300 Log. OSHA
estimated that the proposed rule would require employers to
spend roughly 5 minutes to become familiar with the new rule
and 1 minute to record the MSD injury or illness.
This burden estimate is what OSHA used to justify its
decision not to move forward with a SBREFA panel. Small
businesses felt that OSHA's cost estimate reflected a
misunderstanding of how small employers work and the pressure
that employers feel writing down a number on a form that is
required by the federal government.
The purpose of SBREFA is for OSHA to better understand the
impacts its regulations will have and how its cost estimates
play out in the real world. OSHA missed that opportunity by
deciding to bypass the SBREFA panel process.
The second rule that I can talk about is the proposed
changes to the on-site consultation procedures rule. Last
September, OSHA proposed changes to the program. And the on-
site consultation program is a shining example of how OSHA can
evolve from ``gotcha'' to ``help ya.''
When OSHA decided to propose changes, it did not convene a
SBREFA panel. OSHA, therefore, missed an opportunity to learn
directly from small businesses about how changes would affect
their participation in the program.
And, finally, OSHA's noise rule. In October, OSHA proposed
to change the requirements for employers to control noise
exposures. OSHA's proposal last year was to reverse the
preference for personal protective equipment and require
engineering controls without consideration of cost unless it
would threaten a company's ``ability to remain in business.''
OSHA circumvented the SBREFA panel requirement by declaring
its proposal was just revising an interpretation and therefore
was not a rule subject to normal rulemaking procedures,
including the SBREFA panel requirement. That type of rationale
is unfortunate, because it ignored the value of SBREFA panels.
OSHA's policy apparatus suffers--and I will sum up here--
when the agency treats the SBREFA process as a legal barrier.
The purpose of the Reg Flex Act and the SBREFA amendments is
for OSHA to benefit from small-business input, so the agency
can fulfill its mission to ensure safe workplaces without
unduly burdening small employers. Constructive input by small
firms provides OSHA with valuable insight that allows for the
agency to draft proposals that will work on Main Street, and
OSHA benefits when it embraces the SBREFA process as a
constructive dialogue.
Thank you.
[The statement of Mr. Sullivan follows:]
Prepared Statement of Hon. Thomas M. Sullivan, Esq., of Counsel, Nelson
Mullins Riley and Scarborough
Mr. Chairman and Members of the Committee, I am pleased to present
this testimony on how the Occupational Safety and Health Administration
(OSHA) considers the impact on small entities when developing
regulatory proposals. My name is Tom Sullivan. I am an attorney with
the law firm of Nelson Mullins Riley & Scarborough, LLP and I run the
Small Business Coalition for Regulatory Relief.\1\ This testimony is
not being presented on behalf of any specific clients. Rather, my
advice to the Committee today is drawn from my two decades of work on
small business regulatory issues.
My first job in Washington was with the U.S. Environmental
Protection Agency (EPA). I served under both Administrator Bill Reilly
and Administrator Carol Browner. After learning about regulatory policy
development from within government, I joined the Washington office of
the National Federation of Independent Business (NFIB). In February
2002, I was unanimously confirmed to head the Office of Advocacy at the
U.S. Small Business Administration (SBA).\2\ The Office of Advocacy is
responsible for overseeing the Regulatory Flexibility Act.\3\ I served
as Chief Counsel for Advocacy until October 2008.
OSHA must consider the impact on small entities prior to issuing a new
regulation
The Regulatory Flexibility Act requires federal agencies to satisfy
certain procedural requirements when they plan new regulations,
including: (1) identifying the small entities that will be affected,
(2) analyzing and understanding the economic impacts that will be
imposed on those entities, and (3) considering alternative ways to
achieve their regulatory goal while reducing the economic burden on
those entities.\4\ The Regulatory Flexibility Act was amended in 1996
by the Small Business Regulatory Enforcement Fairness Act (SBREFA).\5\
SBREFA requires OSHA, EPA, and the Consumer Financial Protection Bureau
(CFPB) to convene small business review panels (I refer to the panels
as ``SBREFA panels '') whenever their planned rules are likely to have
a significant economic impact on a substantial number of small
entities. SBREFA panels include representatives from SBA's Office of
Advocacy, the Office of Management and Budget's Office on Information
and Regulatory Affairs (OIRA) and the agency proposing the rule. The
panel prepares a report containing constructive recommendations for the
agency planning the rule and that report is published with the proposed
rule.
The need for small business protections in the federal rulemaking
system
There are three basic reasons for the Regulatory Flexibility Act.
one-size-fits-all federal mandates do not work when
applied to small business; and
small businesses face higher costs per employee to comply
with federal regulation; and
small businesses are critically important to the American
economy.
Prevention of one-size-fits-all federal mandates
Many times federal regulations that may work for large corporations
simply do not work for small firms. I remember working with Brian
Landon on the ergonomics regulation when it was being developed in the
late 1990's. Brian owned and operated a carwash in Canton,
Pennsylvania. Parts of the ergonomics regulation distinguished between
the employees who worked on equipment and employees who were in charge
of paperwork and accounting. As is the case in many small businesses,
Brian did all the jobs. And, his most trusted employees also performed
multiple tasks, some clerical and some operational. The ergonomics
regulation spelled out duties for equipment maintenance employees that
were very different from those responsibilities for employees in charge
of paperwork. Brian continually asked OSHA for help to figure out which
classification would apply to him--and never really got an answer.
Sometimes we forget that our country has millions of small enterprises
that are at various stages of automation. For instance, when there is a
new labeling requirement, a tendency is to naively think that
compliance with a regulation mandating changes to labels can be
accomplished with little effort through a computer program. The
Regulatory Flexibility Act is supposed to force federal regulators to
think about how a small operation would actually comply, realizing that
it may not be as simple as entering information into a computer.
The disproportionate impact federal regulations have on small business
Research published in September by Nicole Crain and W. Mark Crain
of Lafayette College updates three previous studies on the impact of
federal regulations on small business.\6\ The report is entitled, ``The
Impact of Regulatory Costs on Small Firms,'' and it provides a look at
the regulatory burden in 2008. The total cost of complying with federal
regulations was over $1.75 trillion. The burden amounts to a cost of
$15,586 per household which is more than 1\1/2\ times what households
pay for medical care. Most alarming, is the fact that in the four years
studied, the cost of complying with federal regulations rose faster
than the per-household cost of medical care.
The Crain study found that small businesses shoulder costs that are
36% more than their larger business competitors. Firms with fewer than
20 employees pay $10,585 per employee per year and firms with 500 or
more employees pay $7,755 per employee to comply with federal
regulations. The cost difference is most severe when looking at
compliance with environmental regulations, with the smallest firms
paying 4 times the amount per employee than the largest businesses.
The research provides data for a common sense reality in a small
business owner's world. Small businesses generally do not have vice
presidents for safety and health to figure out OSHA rules. They do not
have accounting departments to navigate changes to the tax code. Even
if small businesses hire accountants to prepare their taxes, the owners
take hours sweating the details because it is their signature on the
IRS forms. Nor do small firms usually employ occupational health
experts and safety engineers to keep up with OSHA rules and the more
than 22,000 national consensus standards that exist in the United
States. The task of figuring out volumes of federal requirements often
falls on the small business owners themselves, taking more time for
them than it would for regulatory experts. Since time is money--it
costs the small businesses more.
The intention of the Regulatory Flexibility Act and, in particular
the SBREFA panel process, is to bring small entities directly into an
advisory role with agencies so that final regulations reflect an
accurate understanding of how compliance can cost small firms more.
The importance of small business to the U.S. economy
Recent figures show there are more than 27.3 million small
businesses in the United States.\7\ They represent over 99% of the
employer firms in the United States, employ half of the private sector
employees, and produce 13 times more patents per employee than large
research & development firms.\8\ Of particular importance is the job-
creation aspect of entrepreneurship. Small firms accounted for 65% of
the 15 million net new jobs created between 1993 and 2009. Data show
that since the 1970's small businesses hire two out of every three jobs
and the Ewing Marion Kauffman Foundation likes to point out that in the
last 30 years, literally all net job creation in the United States took
place in firms less than five years old.\9\
History of the Regulatory Flexibility Act
One of the top five recommendations from the 1980 White House
Conference on Small Business was for a law requiring regulatory impact
analysis and a regular review of regulations. That recommendation
became reality when President Jimmy Carter signed the Regulatory
Flexibility Act into law on September 19, 1980. The Regulatory
Flexibility Act directed all agencies that use notice and comment
rulemaking to publicly disclose the impact of their regulatory actions
on small entities and to consider less burdensome alternatives if a
proposal was likely to impose a significant impact. The law authorized
SBA's Chief Counsel for Advocacy to appear as amicus curiae in
Regulatory Flexibility Act challenges to rulemakings and it required
SBA's Office of Advocacy to report annually on agencies' compliance
with the Regulatory Flexibility Act.
In 1996, Congress considered changes to the Regulatory Flexibility
Act. Again, there was a White House Conference--and that conference's
top recommendation was to strengthen the Regulatory Flexibility Act by
directing small business participation in rulemakings and to allow for
judicial review of agency compliance. President Clinton signed SBREFA
in March of 1996.\10\ Those amendments to the Regulatory Flexibility
Act established formal procedures for the EPA and for OSHA to receive
input from small entities prior to the agencies proposing rules.\11\
In August of 2002, President Bush signed Executive Order 13272,
Proper Consideration of Small Entities in Agency Rulemaking.\12\ The
Executive Order directed SBA's Office of Advocacy to train regulatory
agencies on how to comply with the RFA and further instructed agencies
to consider the Office of Advocacy's comments on proposed rules. The
Small Business Jobs Act signed five months ago codified the Executive
Order's requirements for agencies to respond to the Office of
Advocacy's comments in final rules.\13\
There was one recent additional amendment to the Regulatory
Flexibility Act. An amendment authored by Senators Olympia Snowe and
Mark Pryor was adopted as part of the Dodd-Frank financial regulatory
reform law. That amendment requires the newly created Consumer
Financial Protection Bureau (CFPB) to undergo a SBREFA panel process
when issuing rules, the same requirement that has applied to EPA and
OSHA since 1996.\14\
What is required by the Regulatory Flexibility Act
The basic spirit of the RFA is for government agencies to analyze
the effects of their regulatory actions on small entities and for those
agencies to consider alternatives that would allow agencies to achieve
their regulatory objectives without unduly burdening small entities.
The RFA covers all agencies that issue rules subject to the
Administrative Procedure Act (APA). The RFA requires agencies to
publish an initial regulatory flexibility analysis (IRFA) unless the
promulgating agency certifies that the rule will not have a significant
impact on a substantial number of small entities.\15\ The IRFA is
supposed to be a transparent small business impact analysis that
includes discussion of alternatives that can accomplish the stated
objectives of the rule while minimizing impact on small entities. In
the case of EPA, OSHA, and the CFPB, a SBREFA panel aids the agency's
analysis and discussion of alternatives. This transparent analysis and
exchange of information with small entities is published with the
agency's proposed rule, educating stakeholders who participate in the
notice and comment process.
The availability of an IRFA allows for a more informed notice and
comment process that can guide an agency's formulation of its final
rule. Under the RFA, an agency's final rule must contain a final
regulatory flexibility analysis (FRFA) if it published an IRFA with its
proposal. The FRFA is basically a public response to issues raised in
the IRFA.
Implementation of the Regulatory Flexibility Act at OSHA
Under the Regulatory Flexibility Act, an agency either certifies
that a proposed rule has no significant economic impact on a
substantial number of small entities or the agency prepares an IRFA on
the proposal. When OSHA decides to prepare an IRFA, the agency convenes
a SBREFA panel to obtain pre-proposal input from small entities. In
three recent regulatory actions, OSHA appears to be ignoring both the
spirit and the legal requirements of the Regulatory Flexibility Act.
Even if OSHA is able to certify that a regulation will not have
sufficient impact to warrant a SBREFA panel, the agency always has the
option to voluntarily use the SBREFA panel process to gain insight from
the small business community.
1. Proposed Occupational Injury and Illness Recording and Reporting
Requirements Rule (MSD Reporting Rule):\16\
In January of last year, OSHA proposed that businesses record work-
related musculoskeletal disorders (MSDs) in a new column on their OSHA
300 Log. When OSHA proposed the rule, it certified under the Regulatory
Flexibility Act that the rule, if promulgated, would not have a
significant economic impact on a substantial number of small
entities.\17\ OSHA estimated that the proposed rule would require
employers to spend roughly 5 minutes to become familiar with the new
rule and one minute pre MSD injury or illness to record the MSD in the
new column on the OSHA 300 Log. This burden estimate is what OSHA used
to justify its decision to move forward with the rule without a SBREFA
panel.
Small businesses strongly disagreed with OSHA on its estimate of
how much the rule would cost. Recording an MSD in a column is not as
simple as just transcribing a number. Under the rule, employers would
be required to diagnose whether the injury or illness is a MSD and
whether it is work-related. Keep in mind that after several years of
study and research, experts are unable to reach consensus over the
definition of an MSD, yet small business owners would be expected to
make a diagnosis of the injury or illness and determine whether it is
work related--in less than 5 minutes. That burden estimate reflected a
clear misunderstanding of how small employers work and the pressure of
legal liability employers feel when writing down a number on a form
required by the federal government.
The purpose of SBREFA panels is for OSHA to better understand the
impacts its regulations will have and how its cost estimates play out
in the real small business world. OSHA missed that opportunity by
deciding to bypass the SBREFA panel process.
2. Proposed changes to On-Site Consultation Procedures rule:\18\
Last September, OSHA proposed changes to the criteria under which
participants in the agency's On-site Consultation program could be
subject to enforcement action by OSHA inspectors. The On-site
Consultation program is a shining example of how OSHA can evolve from
``gotcha'' to ``help ya.'' Under the program, small businesses can
request a free consultation with a state-certified consultant. The
consultant identifies hazards and provides advice on how to address
them.
Part of the program's success is derived from the understanding
that information uncovered by the voluntary inspection is not shared
with OSHA enforcement if the identified hazards are corrected. OSHA's
proposal last September threatened to break down the barrier between
the On-site Consultation program and OSHA's enforcement program. I
doubt OSHA wanted to push small firms out of its On-Site Consultation
program, but the agency lacked an appreciation for how the changes
would impact small business's willingness to participate. OSHA did not
convene a SBREFA panel prior to proposing the changes to its
consultation agreements program despite the On-site Consultation
program's focus on small business. OSHA, therefore, missed an
opportunity to learn directly from small businesses about how changes
would affect their participation in the program. Through a SBREFA
panel, OSHA would have heard how the agency could achieve its goal,
without scaring away small businesses from a program that has improved
workplace safety in thousands of small businesses.
3. Proposed Interpretation of OSHA's Provisions for Feasible
Administrative or Engineering Controls of Occupational Noise:\19\
In October, OSHA proposed to change the requirements for employers
to control noise exposures. Currently, OSHA requires engineering and
administrative controls to prevent hearing loss if personal protective
equipment (PPE) such as earplugs is ineffective in reducing workplace
noise to acceptable levels or if such controls can be implemented for
less cost than PPE. OSHA's proposal last year was to reverse the
preference for PPE and require engineering controls without
consideration of cost unless it would threaten a company's ``ability to
remain in business.'' \20\
OSHA circumvented the SBREFA panel requirement by declaring its
proposal was just revising an interpretation and, therefore, was not a
new rulemaking subject to normal rulemaking procedures, including the
SBREFA panel requirement. That type of rationale was unfortunate
because it ignored the value of SBREFA panels. A SBREFA panel could
have informed OSHA that PPE has proven effective in reducing harmful
exposure to noise in the workplace and that driving employers away from
the preference for PPE could actually increase danger. Also, a SBREFA
panel could have informed OSHA about the cost considerations of
engineering controls. Maybe OSHA wanted to see what engineering
controls were ``feasible'' for small manufacturers. The way to find out
was to convene a SBREFA panel, not to declare that ``feasible'' is
anything short of causing a business to close its doors and go out of
business.
Conclusion
In the examples of OSHA's proposed MSD reporting rule and OSHA's
proposed changes to its On-site Consultation program, SBA's Office of
Advocacy wrote to the agency and shared the concerns voiced by the
small business community.\21\ In both letters, the Office of Advocacy
publicly criticized the failure by OSHA to incorporate flexibility for
small business in their proposals. Even though OSHA recently pulled
back its plans to go ahead with the noise rule and the MSD reporting
rule, the Committee is justified in its concern that OSHA is moving
forward with regulatory policy that will impact the small business
community in a way that ignores their input. OSHA's policy apparatus
suffers when the agency treats the SBREFA process as a legal barrier.
The purpose of the Regulatory Flexibility Act and the SBREFA amendments
is for OSHA to benefit from small business input so the agency can
fulfill its mission to ensure safe workplaces without unduly burdening
small employers. Constructive input by small firms provides OSHA with
valuable insight that allows for the agency to draft proposals that
will work on Main Street. OSHA benefits when it embraces the SBREFA
process as a constructive dialogue.
endnotes
\1\ See http://www.SBCRR.com.
\2\ See http://www.sba.gov/advocacy.
\3\ Regulatory Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164
(1980), amended by the Small Business Regulatory Enforcement Fairness
Act of 1996, Pub. L. No. 104-121, 110 Stat. 857 (1996) (codified as
amended at 5 U.S.C. Sec. Sec. 601-612), also amended by Sec. 1100 G
of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub.
L. No. 111-203, 124 Stat. 2112 (July 21, 2010).
\4\ Keith W. Holman, The Regulatory Flexibility Act at 25: Is the
Law Achieving Its Goal?, 33 Fordham Urban Law Journal 1119 (2006).
\5\ Small Business Regulatory Enforcement Fairness Act of 1996,
Pub. L. No. 104-121, 110 Stat. 857 (1996).
\6\ Nicole V. Crain and W. Mark Crain, The Impact of Regulatory
Costs on Small Firms, written for the Office of Advocacy, U.S. Small
Business Administration (September 2010), available at http://
www.sba.gov/advocacy/853/2016.
\7\ Office of Advocacy, U.S. Small Business Administration,
Frequently Asked Questions (January 2011), available at http://
www.sba.gov/advocacy/7495.
\8\ Id.
\9\ John Haltiwanger, Business Dynamics Statistics Briefing: Jobs
Created from Business Startups in the United States, Ewing Marion
Kauffman Foundation (January 2009), available at: http://
www.kauffman.org/research-and-policy/bds-jobs-created.aspx.
\10\ Small Business Regulatory Enforcement Fairness Act of 1996,
Pub. L. No. 104-121, 110 Stat. 857 (1996).
\11\ See, 5 U.S.C. Sec. 609.
\12\ Executive Order 13272, Proper Consideration of Small Entities
in Agency Rulemaking, 67 Fed. Reg. 53461 (August 16, 2002).
\13\ Small Business Jobs Act of 2010, Pub. L. No. 111-240,
Sec. 1601 (September 27, 2010).
\14\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Pub. L. No. 111-203, Sec. 1100G (July 21, 2010).
\15\ See, 5 U.S.C. Sec. 605(b).
\16\ 75 Fed. Reg. 4728 (January 29, 2010).
\17\ 75 Fed. 4736.
\18\ 75 Fed. Reg. 54064 (September 3, 2010).
\19\ 75 Fed. Reg. 64216 (October 19, 2010).
\20\ 75 Fed. Reg. at 64217.
\21\ Susan M. Walthall, Acting Chief Counsel for Advocacy, letter
to OSHA Assistant Secretary David Michaels, (March 30, 2010). Available
at: http://www.sba.gov/content/letter-dated-033010-department-labor-
occupational-safety-and-health-administration. Winslow Sargeant, Chief
Counsel for Advocacy, letter to OSHA Assistant Secretary David
Michaels, (November 2, 2010). Available at: http://www.sba.gov/content/
letter-dated-110210-department-labor-occupational-safety-and-health-
administration.
______
Chairman Walberg. Thank you, Mr. Sullivan.
Moving on to Mr. Sessions?
STATEMENT OF STUART SESSIONS, PRESIDENT, ENVIRONOMICS, INC.,
TESTIFYING ON BEHALF OF THE COALITION FOR WORKPLACE SAFETY
Mr. Sessions. Good morning, Mr. Chairman and members of the
Subcommittee on Workforce Protections. Thank you for inviting
me here to testify specifically on OSHA's recent proposal
regarding the noise exposure standard and the potential impact
of this proposal on job creation. This is one of OSHA's three
actions that Tom Sullivan just referred to.
I am here on behalf of the Coalition for Workplace Safety.
The coalition has retained me to analyze the potential cost and
economic impacts if OSHA were to finalize this proposed new
reinterpretation of the term ``feasible'' as it applies to the
noise standard.
I want to share with the subcommittee today some initial
results from two recent analyses of this new reinterpretation
by OSHA that have been conducted by the coalition and its
members. The two analyses are, number one, a series of case
studies.
I have been working with a number--about a dozen different
companies to evaluate what the impact of OSHA's proposal would
be on their operations. How much would it cost each of these
companies? How much would the new interpretation revise what
they need to do in terms of meeting the noise standard? And
what would these compliance costs mean to these businesses in
terms of their competitive position and in terms of jobs?
The second piece of research is a large survey that has
been done by the National Association of Manufacturers, in
which they asked their manufacturing members what the impact of
OSHA's proposal would be on their operations and on their
competitive position. And NAM obtained more than 315 lengthy
responses to this questionnaire on the impact of the OSHA
proposal.
I have combined data from these two sources, my case
studies and the NAM survey, along with other data to attempt to
estimate what the overall impact on the national economy would
be if OSHA's proposal were finalized, the impact in particular
in terms of costs and in terms of jobs.
I draw four conclusions from these analyses, and I would
like to share these conclusions with the subcommittee. First,
the proposed OSHA noise reinterpretation would affect a large
number and very broad range of American businesses and their
employees. Most companies involved in manufacturing, most
involved in construction, and many involved in transportation
have employees exposed to noise levels at which the OSHA
reinterpretation would apply.
In addition, there are many other businesses that do
various other activities, including lawn care, tree service,
automobile repair, warehousing, anything involving maintenance
and repair of large, noisy equipment that would also be
affected by OSHA's proposal. In total, I estimate that
somewhere between 2 million and 7 million workers would be
affected by OSHA's proposal, and their employers would
similarly be affected.
Second conclusion: The costs for American business to
comply with OSHA's proposed new policy would be very high. OSHA
estimated long ago that the average highly exposed worker who
is exposed to a level of noise at which this proposal would
have an impact, OSHA estimated that the average cost per
engineering controls--engineering controls alone to protect
that worker would average about $4,000 per worker per year.
The NAM survey provides more recent information than OSHA's
old estimate on the cost per worker. And the NAM survey
estimates costs for engineering controls alone as a protective
approach of somewhere between $2,000 and $10,000 per year per
highly exposed worker.
Under the current policy, employers are allowed to protect
workers via a combination of engineering controls,
administrative controls, and hearing protection--earmuffs,
earplugs, and the like--and typically earmuffs and earplugs are
far less expensive than engineering controls.
So OSHA's policy essentially requires employees to spend on
the order of this $2,000 to $10,000 per employee, rather than
the much lesser sums that they can spend to protect employees
via hearing protection alone.
If we put these costs of $2,000 to $10,000 per worker per
year together with the number of exposed workers, the total
cost for OSHA's proposal, as I estimate it, is somewhere
between $1 billion and $27 billion per year. This amount, if it
were to be a cost of a regulation, would trigger the
requirements for Executive Order 12866 and economic analysis of
significant regulations, and it would trigger the SBREFA
requirements that Mr. Sullivan referred to for small-business
panels, et cetera. OSHA essentially sidestepped these
procedural safeguards by issuing this as an administrative
interpretation rather than a regulation.
Conclusion number three: OSHA's proposed new interpretation
and these costs would have a substantial negative impact on
U.S. jobs and competitiveness. We have done a little bit of
work to run the estimated compliance costs through a national
model that predicts the macroeconomic impacts of compliance
costs. Actually, we haven't run them through the model; we have
analogized from a recent run of the model on it, a different,
similar regulation.
And we estimate that the impact on the nation's employment,
if OSHA's proposal were to be finalized, would be a loss of
somewhere between 10,000 and 220,000 jobs.
Final conclusion number four. All of this would be for
relatively little benefit in terms of improved hearing
protection for workers. Two points.
One, currently the number of reportable work-related
hearing losses for highly exposed workers is very low. The
current system of--the current regulation and OSHA's previous
interpretation of the noise standard are working, less than
0.6----
Chairman Walberg. I would ask you to wrap up.
Mr. Sessions. Fifteen seconds. Less than 0.6 percent of
workers are currently--have evidence of a work-related hearing
loss. Under the current system, that is less than the number
of--the percentage of the general population that has such
hearing losses.
So there isn't a problem in the first place that the
regulation would be addressing. And, secondly, the regulation
would have minimal impacts in reducing--or the proposal would
have minimal impacts in reducing this already low rate of
hearing loss.
Thank you, sir.
[The statement of Mr. Sessions follows:]
Prepared Statement of Stuart L. Sessions, President, Environomics, Inc.
Good morning, Mr. Chairman and Members of the Subcommittee on
Workforce Protections. Thank you for inviting me today to testify on
OSHA's recent proposal regarding the noise exposure standard and the
potential impact of the proposal on job creation.
I am Stuart Sessions, President of the consulting firm
Environomics, Inc. I am here today representing the Coalition for
Workplace Safety (CWS). The Coalition for Workplace Safety is a group
of associations and employers who seek to cost-effectively improve
workplace safety. The Coalition has retained me to analyze the
potential costs and economic impacts if OSHA were to finalize their
proposed new interpretation of the term ``feasible'' as it applies to
the Agency's standards for occupational exposure to noise.
As an economist, I have worked for more than 30 years in analyzing
how a wide variety of environmental, health and safety regulations and
administrative actions may affect the U.S. economy. Roughly half of my
work in analyzing the economic impact of environmental, health and
safety requirements has been as a Federal government employee or
contractor, and about half has been as a consultant to private
industry.
OSHA proposed its reinterpretation of the noise standard as a
policy interpretation and not specifically as a regulation.
Nevertheless, this proposed action is typical of how a new government
requirement, whether achieved by formal regulation or simply as a
declaration of policy by the agency that enforces the regulations, can
affect the U.S. economy and jobs.
I want to share with the Subcommittee today some initial results
from two recent analyses of OSHA's proposed noise reinterpretation by
CWS and its members. These analyses have not yet been completed, and
they may well not be completed, since OSHA has withdrawn its proposed
new interpretation. These analyses, however, focus directly on the
Subcommittee's concern about how OSHA's requirements may affect job
creation I expect that our preliminary findings from these analyses
will be of interest and I have no expectation that the thrust of these
analyses will change in a material way. The two analyses are:
1. Case studies. I have been working with about a dozen different
companies on case studies of what the OSHA proposal would mean to their
operations. The case studies examine how each of these employers
complies with the OSHA noise standard now, what they would have to do
differently if the proposed interpretation were finalized, and how much
compliance with the new interpretation would cost them. And then, the
case studies proceed to analyzing the impacts of these compliance
costs: what would these compliance costs mean to these businesses and
their competitive position, and what would the costs mean in terms of
jobs? Would some of the current employees of these companies lose their
jobs because the companies become less competitive and lose business,
or might the noise compliance measures open new opportunities for these
businesses and perhaps result in increasing numbers of jobs in the
future?
2. NAM survey. The National Association of Manufacturers (NAM) has
conducted a large survey of its member companies with regard to the
companies' hearing protection programs for their employees and the
potential impact of the OSHA noise proposal. NAM asked a broad set of
questions of the companies, including similar questions as in my case
studies about the costs and economic consequences of OSHA's proposed
new interpretation. NAM has obtained more than 315 responses to their
survey from manufacturing companies.
In addition to reporting today on some of the results from my case
studies and the NAM survey, I have combined data from these and other
sources and have estimated the overall potential impact on the national
economy of OSHA's noise reinterpretation in terms of costs and in terms
of jobs. While I readily admit that my estimates are rough and
uncertain, they contrast with the complete absence of any economic
analysis conducted by, or at least made public by, OSHA.
I draw four conclusions from this set of analyses--from the
combination of my case studies, the NAM survey, and the national
aggregate analysis:
1. The proposed OSHA noise interpretation would affect a large
number and very broad range of American businesses and their employees.
2. The costs for American businesses to comply with OSHA's proposed
new policy would be very high.
3. OSHA's proposed new interpretation would have substantial
negative impacts on U.S. jobs and competitiveness.
4. All this would be for relatively little benefit in terms of
improved hearing protection for workers.
Before I explain these conclusions in more detail, I would like to
summarize what OSHA's proposed noise reinterpretation would have
required.
OSHA has long had a standard that prescribes 90 decibels as the
maximum average noise level to which a worker may be exposed over an 8-
hour work shift. OSHA has for several decades maintained the policy
that an employer can comply with this 90 decibel standard through
whatever combination of three noise-limiting approaches that the
employer finds is cost-effective. The three noise-limiting approaches
include what are known as: 1) Engineering controls; 2) Administrative
controls; and 3) Personal protective equipment. ``Engineering
controls'' include measures to reduce noise by engineered means such as
mufflers on noisy equipment, sound-deadening enclosures for noisy
equipment, redesigning or changing equipment or processes so as to make
them less noisy, and so forth. ``Administrative controls'' include
measures such as rotating a worker's tasks so as to limit the fraction
of his work shift that the worker spends performing activities with
high noise levels. ``Personal protective equipment'', or PPE, includes
such things as ear plugs or ear muffs that reduce the amount of noise
exposure the individual worker receives despite whatever level of
ambient noise surrounds the worker. In general, reducing a worker's
noise level is substantially less costly through use of personal
protective equipment than through engineering controls or
administrative controls.
OSHA's noise standard does not treat these three means of reducing
a worker's noise exposure equivalently. The standard requires an
employer to limit exposure to 90 decibels first by implementing all
feasible engineering and administrative controls. Only then, after all
feasible engineering and administrative controls have been implemented,
can an employer add personal protective equipment in order to get below
the 90 decibel limit. The key in how OSHA has sensibly implemented for
many years this preference for engineering and administrative controls
lies in how OSHA has interpreted the term ``feasible'' as a limitation
on the engineering and administrative controls that will be required.
OSHA has long interpreted the word ``feasible'' as meaning ``cost-
effective relative to PPE''. Those engineering and administrative
controls that are defined as feasible and required to be implemented
first consist only of those that are cost-effective relative to PPE.
Or, said in a different way, if PPE is effective in limiting workers'
noise exposure to less than 90 decibels and is less costly than
engineering and administrative controls, the employer can choose to
implement PPE rather than more costly engineering and administrative
controls.
In the fall of last year, though, OSHA proposed to reinterpret the
term ``feasible'' as it applies in the noise standard. OSHA proposed to
reinterpret ``feasible'' to mean ``capable of being done'' instead of
meaning ``cost-effective''. Under OSHA's proposed new interpretation,
then, in seeking to limit noise exposures to below 90 decibels, an
employer would need to implement all possible engineering and
administrative controls without regard to cost unless the employer can
show that the engineering and administrative controls would threaten
the employer's ability to remain in business. Under the proposed new
interpretation, the limit on required engineering and administrative
controls would change from only those that are cost-effective to all
such controls that are available short of putting the employer out of
business.
Obviously OSHA's proposed new interpretation of the term
``feasible'' would greatly increase the required use of engineering and
administrative controls relative to PPE in reducing noise exposures. I
and the Coalition for Workplace Safety have been working to estimate
the costs and economic impacts that would result from OSHA's proposed
new policy. I would like to summarize the four conclusions that I have
drawn from our analyses thus far.
1. The proposed OSHA noise interpretation would affect a large
number and very broad range of American businesses and their employees.
There are a wide variety of tools, machines, vehicles and processes
that can generate noise exceeding 90 decibels: saws, hammers, punches,
presses, sanders, burners, boilers, blowers, crushers, generators,
compressors, aircraft, trucks, busses, locomotives, boats, compressed
air, combustion, abrasive blasting, welding and many, many more.
Workers operating or maintaining these items, or performing other tasks
in the vicinity of these items, can be exposed to noise that may exceed
an average of 90 decibels across an 8-hour work shift.
I have reviewed various data sources in order to develop a rough
estimate for the number of employees that are exposed above 90 decibels
and that therefore could be affected by OSHA's proposed
reinterpretation. I have organized these estimates by industry:
Manufacturing. In regulatory impact analyses that OSHA
developed in the late 1970s/early 1980s to support potential changes to
the noise standard, the Agency estimated that 19.4% of all production
employees in manufacturing industries (SIC codes 20 through 37, plus
SIC 49, utilities) work in settings with average ambient noise
exceeding 90 decibels. This estimate is rather old, but is apparently
the most recent comprehensive estimate that OSHA has developed. Noise
exposures in manufacturing have likely been reduced since OSHA's
estimate. I will assume in my calculations that the fraction of
manufacturing production workers now exposed above 90 decibels is
somewhere between the roughly 20% that OSHA estimated 30 years ago and
2%, a level one-tenth as high.
Construction (SIC 15-17). A large recent noise survey for
residential construction trades found for virtually every job category
that at least 10% of full-shift samples exceeded 90 decibels (roofer,
framing carpenter, finish carpenter, excavator, drywall installer,
brick mason and helpers, landscaper, miscellaneous trades). Exposures
among commercial construction workers are higher than among residential
workers, while exposures among heavy/public works construction workers
are likely also to be higher. Any particular construction worker's
noise exposure can vary significantly from shift to shift as a function
of how much of the shift he spends using or near a noisy tool. A brick
mason, for example, may spend a large share of one shift using a noisy
brick saw, but may not use the saw at all on the next shift. The result
is that the fraction of construction workers who are occasionally
exposed above 90 decibels for a shift substantially exceeds the
fraction of all full-shift samples that exceed 90 decibels. I will
assume that somewhere between 20% and 50% of all construction workers
are occasionally exposed above 90 decibels, in contrast to the roughly
10% or so of all construction worker samples that exceed 90 decibels.
Transportation (SIC 40-49). Workers around concentrations
of transportation vehicles, particularly aircraft, can be exposed to
noise levels exceeding 90 decibels. I will assume that the fraction of
non-office transportation workers exposed above 90 decibels is similar
to that for manufacturing production workers; somewhere between 2% and
20%.
Other industries. There are many additional industries
where workers can often be exposed at average levels exceeding 90
decibels, such as lawn care, tree service, automobile repair,
maintenance and repair of large, noisy equipment, and warehousing.
These other industries likely account for many fewer highly exposed
workers than manufacturing, construction and transportation. I have not
sought to estimate the likely much smaller numbers of highly exposed
workers in additional industries.
Combining recent employment figures for manufacturing, construction
and transportation with estimates of the percentages of each industry's
workers that are exposed to average noise levels exceeding 90 decibels,
I estimate that there are some 2 to 7 million workers currently exposed
at such levels. These workers and their employers would be directly
affected by OSHA's proposed new interpretation.
I have provided a table at the end of this testimony that shows
these estimates and summarizes how I proceed further to calculate the
costs and job impacts of OSHA's proposed policy.
2. The costs for American businesses to comply with OSHA's proposed
new policy would be very high.
OSHA has not estimated what the costs would be for the additional
engineering and administrative controls that would be necessitated by
the policy. The most recent nationwide cost estimates that OSHA has
developed involving additional noise controls can be found in the
regulatory impact analyses in the late 1970's/early 1980's that I
referred to earlier. At that time, OSHA estimated the costs for
additional technologically feasible engineering and administrative
controls sufficient to reduce ambient noise to 90 decibels or less as
the equivalent of $4,037 per affected employee per year in 2010
dollars. Said another way, OSHA estimated for each employee exposed to
ambient noise levels exceeding 90 decibels that the cost of engineering
and administrative controls to reduce these levels to 90 decibels or
below would average $4,037 per year. This cost estimate is OSHA's most
recent, but it is still roughly 30 years old.
A much more current estimate for the costs of the engineering and
administrative controls necessitated by OSHA's proposed
reinterpretation can be developed from the NAM survey results and my
case studies. Across these two data sources, 45 companies or facilities
have estimated both the number of their employees exposed to average
ambient noise levels exceeding 90 decibels and the costs of available
engineering and administrative controls to reduce these exposures. The
resulting estimates for the cost of the proposed OSHA policy per
affected employee span a very wide range, all the way from less than $1
per employee per year to more than $200,000 per employee per year. The
median estimate from the case studies and NAM's survey is $2,950 per
affected employee per year, while the average across the 45 companies
or facilities is $18,137 per employee per year. I believe that this
average figure is skewed by several very high estimates of cost per
employee that represent situations where costly controls would reduce
noise exposures for very few workers, and that these controls might not
actually be implemented in practice. I will assume that the controls
more likely to be implemented in practice might average somewhere
between about $3,000 and about $10,000 per employee per year. This
range brackets the figure that OSHA derived previously of about $4,000
per affected employee per year.
These represent my estimated costs per affected worker of OSHA's
proposed new policy for manufacturing industries specifically. (Both
OSHA's estimate and the NAM survey that provided most of my cost data
addressed manufacturers only.)
I would expect that the cost per affected worker for transportation
industries would be roughly similar to these estimated costs for
manufacturing industries. I thus will assume an identical range of
between $3,000 and $10,000 per affected employee per year.
For construction industries, I believe that these costs for
engineering and administrative controls would be much lower than for
manufacturing, perhaps only one-tenth as much. Most of the engineering
controls for construction involve changes to small equipment--less
noisy saws, compressors, jackhammers, etc., in contrast to
manufacturing where the noise-reducing measures would often involve
changes to large machines, entire process lines or significant portions
of a shop floor. For my very rough total national cost estimate for
OSHA's proposed policy, I estimate the cost per affected worker in
construction industries at one-tenth that for manufacturing, and thus
roughly $300 to $1,000 per worker per year.
To develop an estimate for the total national cost of OSHA's
proposed policy, we can multiply each of these figures on the cost per
affected employee by the estimates I discussed earlier for the number
of employees in different industries that are exposed to ambient
workplace noise exceeding 90 decibels. In total, we get a national cost
estimate for OSHA's proposed noise reinterpretation that is somewhere
in the range from $1.2 billion dollars per year to $27 billion dollars
per year. The total national cost is nearer the higher end of this
range if we assume OSHA's figure to the effect that nearly 20% of
manufacturing production workers are in work settings with ambient
noise levels exceeding 90 decibels, while the figure is near the lower
end of this range if we assume conservatively that only one-tenth as
many workers are exposed to high noise levels as OSHA estimated.
An annual cost of somewhere between $1.2 and $27 billion is quite
large relative to most other new requirements that the Federal
government imposes on private industry. Only a few Federal regulations,
typically fewer than five per year over the several decades that OMB
has been keeping records, impose a burden of this magnitude on the
economy. This figure reflects all Federal regulations for all
purposes--environmental protection, homeland security, transportation
safety, consumer protection, etc., as well as occupational health and
safety. OSHA's proposed new policy on noise would be among the most
expensive new requirements that the Federal government considers each
year.
This is a very large cost for a policy that OSHA proposed to adopt
by simply declaring it, without meeting the due process sorts of
requirements that would apply if the policy reinterpretation were
instead to be a regulation. If OSHA's reinterpretation were to have
been proposed as a regulation, as many would say it should have been,
at a cost of more than a billion dollars per year this initiative would
have been subject to the following important requirements:
Executive Order 12866. The Executive Order requires any
agency proposing a regulation that would cost more than $100 million to
prepare a regulatory impact analysis (RIA). In the RIA, OSHA would need
to: 1) Provide a clear and thorough explanation of the need for the
proposed action; 2) Explicitly estimate the benefits and costs and
economic impacts of the proposal; and 3) Fairly consider alternatives
to the proposal.
The Small Business Regulatory and Enforcement Fairness Act
(SBREFA). OSHA's proposal would undoubtedly have a significant impact
on a substantial number of small businesses. As such, pursuant to the
requirements of SBREFA, OSHA would need to: 1) Analyze the impact of
the proposed policy on small businesses specifically; 2) Convene a
panel of small business representatives that would provide the Agency
with advice on how potentially to reduce the impact of the proposal on
small businesses; and 3) Consider a range of alternatives that would
reduce the economic burden on small businesses.
By attempting to issue the noise standard interpretation as a
policy declaration instead of a regulation, OSHA avoided all these
procedural safeguards. OSHA avoided the need for analyzing costs and
benefits and considering alternatives under Executive Order 12866.
Indeed, the Office of Information and Regulatory Affairs was not even
informed of this proposal. OSHA avoided the need to examine impacts on
small businesses and the need to consider alternatives that might
reduce these impacts. In my view, avoiding these requirements for
analysis, disclosure and transparency makes for poor public policy.
3. OSHA's proposed new interpretation would have substantial
negative impacts on U.S. jobs and competitiveness.
The companies responding to the NAM survey and those involved in
the case studies have offered a variety of comments on what OSHA's
proposed new interpretation would mean for their businesses. I will
quote some responses to the question of whether OSHA's proposal would
affect the company's competitive position:
Foreign imports (even from Canada) are coming in at lower
delivered cost. Labor content is already more than 25% of each sales
dollar. More labor inefficiency [from administrative controls] will
push us far higher.
I would shut down.
Most of our facilities agreed that given the estimated
costs required to comply, they would in many cases either contract the
work to outside suppliers (who would have to meet the same
requirements) or consider moving the work out of the U.S.
Cost increases would significantly increase cost for two
processes where there is already significant and growing competition
from China.
Added costs with no commensurate increase in efficiency or
output make us even less competitive than we are against the Chinese
who have no such requirements to hamper them.
The changes would have to be paid for. With already slim
margins it would almost certainly require an increase in our product
cost. It is already difficult to compete with foreign competitors on a
cost basis. We can't and won't produce product for free or at a
negative margin.
Negative impact. We would have to invest precious assets
in equipment that actually negatively affects productivity.
We would shift more of our production overseas.
We would attempt to fully automate the noisy process so it
would not need an operator who would be exposed to the noise.
As we continue to spend money on new and existing
compliance requirements the cost to do business goes up each year. It
gets tougher to stay competitive especially with the overseas markets
because you can't pass these costs on to the customers.
It would cost us a lot of unnecessary money. We are a
small company and it would be a hit to our bottom line for sure, but
our competitors would have the same issues so we'd all lose money
together at least.
There is no return on that investment. We don't see
hearing loss now, so why invest any money in it?
Our competition would be investing their money into
projects that make them lower cost producers.
Significant distraction from what we need to do to stay
competitive in a globalized manufacturing economy.
Implementing all feasible engineering and administrative
controls would be a very expensive exercise that would have significant
safety and financial consequences.
The great majority of the responses forecast an important negative
impact on the responding company's competitiveness.
In answer to another question on whether OSHA's proposed new
approach would cause the company to reduce its number of employees in
the U.S., 70% of the respondents said ``yes'' and 30% said ``no''.
In my view, the best way to quantitatively estimate the ultimate
economic impact from a broad new requirement such as OSHA's noise
reinterpretation is to use a national economic forecasting and policy
simulation model. The estimated industry-by-industry compliance costs
from the new requirement are loaded into the model, and the model then
predicts the particular industries that will be winners and losers and
the overall impacts on GNP, employment and other economic variables of
interest. We have not yet run such a model to estimate the impacts that
would ensue from OSHA's proposed noise reinterpretation, but I believe
that we can reasonably extrapolate from the recent results when such a
model was run for a comparable potential new requirement.
The REMI Policy Insight Model is one of the most respected national
economic forecasting models that is used to estimate the aggregate
economic impacts from significant new spending initiatives, whether the
initiatives involve private industry compliance spending such as may be
required by a regulation, or investment spending such as might be
associated with a governmental stimulus program. The REMI model was
recently run to estimate the impact of EPA's proposed national
regulation to tighten the air quality standard for ozone. EPA's
potential requirement regarding ozone and OSHA's potential requirement
regarding noise are qualitatively similar: both affect primarily the
manufacturing and transportation industries, both will have broad
national impact, and both have costs estimated to exceed a billion
dollars per year. The recent REMI run for EPA's proposed ozone standard
found that a net of about 8 U.S. jobs would be lost for every million
dollars per year in compliance costs. Applying this factor to the
compliance costs that we estimate for the proposed OSHA noise
reinterpretation, we project a net loss of somewhere between about
10,000 and 220,000 U.S. jobs if OSHA's noise proposal were to be
finalized.
4. All this would be for relatively little benefit in terms of
improved hearing protection for workers
I would like to make two points here:
First, it does not appear that work-related hearing loss
is a frequent problem now, under OSHA's existing and long-standing
noise regulation and enforcement policies.
Second, it seems unlikely that OSHA's proposed policy
shift would significantly reduce the already low rate of work-related
hearing loss.
The current rate of work-related hearing loss is low
OSHA's noise standard requires an employer to operate a hearing
conservation program if any employees are exposed to an average noise
level exceeding 85 decibels. A hearing conservation program must
include monitoring of ambient noise levels and employee noise
exposures, provision of hearing protectors, annual audiometric testing
of employees, specific follow-up activities if the annual audiogram
shows indication of hearing loss, and more. The employer must provide
hearing protection devices to all employees exposed above 85 decibels,
and must both provide and require the use of hearing protection devices
for all employees exposed above 90 decibels. And, as I discussed
previously, the employer must also implement all feasible engineering
and administrative controls to reduce exposures exceeding 90 decibels.
Among the companies responding to NAM's survey, more than 90% have
employee exposures exceeding 85 decibels and operate a hearing
conservation program as they are required to do under the noise
standard. I want to emphasize these two important characteristics of
the vast majority of the companies that have responded to the NAM
survey. These companies: a) Have relatively high noise exposures
(employees exposed over 85 decibels); and b) Take measures to protect
their employees by operating the hearing conservation programs that
OSHA requires. These companies provide an ideal test for how well
OSHA's longstanding approaches are performing in protecting workers'
hearing. These companies have the relatively high noise levels that
OSHA is concerned about, and they have been implementing the programs
that OSHA mandates. What is the result in terms of hearing loss among
the exposed workers at these companies?
The answer from the NAM survey is that these companies show very
low rates of worker hearing loss. For the year 2010, 132 companies
provided information on both the number of their employees exposed
above 85 decibels and the number of employees that showed evidence of
work-related hearing loss (a ``Standard Threshold Shift'' or STS). The
percentage of these relatively highly exposed workers that had a
recordable STS was only 0.59% (184 with STS out of 31,074 employees
exposed above 85 decibels among the 132 companies that responded). This
incidence of STS is very low.
This already low rate of work-related hearing loss is unlikely to
decline much further with OSHA's proposed policy shift
Most companies in my case studies (and additional companies in the
NAM survey) reported that the feasible engineering and administrative
controls they would implement under the proposed OSHA policy shift
would not be sufficient to reduce current exposures exceeding 90
decibels to below 90 decibels. PPE would continue to be required for
these employees, despite the additional engineering and administrative
controls. Under current OSHA requirements and policy the rate of work-
related hearing loss among highly exposed workers is low and depends
substantially on the efficacy of PPE--this situation would change
little if OSHA changed its policy as proposed.
Summary of Conclusions
1. The proposed OSHA noise interpretation would affect a large
number and very broad range of American businesses and their employees.
2. The costs for American businesses to comply with OSHA's proposed
new policy would be very high.
3. OSHA's proposed new interpretation would have substantial
negative impacts on U.S. jobs and competitiveness.
4. All this would be for relatively little benefit in terms of
improved hearing protection for workers.
Thank you for the opportunity to participate in this hearing.
ESTIMATED COST/YR OF OSHA'S PROPOSED NEW INTERPRETATION OF FEASIBILITY FOR NOISE STANDARD
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of ``line'' Cost/yr of engr/ Estimated total Estimated jobs impact
workers needing admin controls per cost for OSHA of OSHA policy
Percent in controls because of worker exposed >90 policy (in ----------------------
Current or ``line,'' ambient exposures >90 dBA $billions/yr)
Sector typical # non-office dBA ----------------------------------------
of workers jobs ------------------------ High Low
High Low High Low High Low estimate estimate
estimate estimate estimate estimate estimate estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manfacturing.......................... 14,000,000 60% 19% 2% $10,000 $3,000 $16 $0.5 -130,368 -3,911
Construction.......................... 10,000,000 90% 50% 20% $1,000 $200 $5 $0.4 -36,000 -2,880
Transportation........................ 6,500,000 50% 19% 2% $10,000 $3,000 $6 $0.2 -50,440 -1,513
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total............................... ........... ............ 6,760,100 2,026,010 ........ ........ $27 $1 -216,808 -8,304
--------------------------------------------------------------------------------------------------------------------------------------------------------
______
Chairman Walberg. Thank you, Mr. Sessions. I apologize for
not catching the red light sooner. Since this is my first
chairman duties, I am more used to listening and enjoying what
I am hearing or reacting to what I am hearing. But that won't
continue long, and the next two witnesses I certainly will give
some latitude, but my--you know, I am from a red state, so it
looks just normal. But we will try to keep the time here. Thank
you.
Moving on to Ms. Miser?
STATEMENT OF TAMMY MISER, EXECUTIVE DIRECTOR, UNITED SUPPORT
AND MEMORIAL FOR WORKPLACE FATALITIES
Ms. Miser. Chairman Walberg and members of the
subcommittee, thank you very much for asking me to be here
today. My name is Tammy Miser, and I have traveled from
Lexington, Kentucky, to give you a very personal story of why
OSHA regulations are needed.
In 2003, my brother Shawn Boone, was 33 years old, and he
was killed in an aluminum dust explosion. The company, Hayes
Lemmerz, they produced aluminum wheels. They had had fires on a
regular basis, and protocol was that they let the fires burn
down and then they go back in and re-light the chip melt
furnace. And they were also instructed not to call the fire
department, because it was costing them too much money to do
this.
So that is what they did. And my brother went back in to
collect his tools in the furnace room, and there was an
explosion. This explosion caused aluminum dust to rain down
from the rafters and the equipment, and there was a second,
more intense explosion.
This explosion actually left my brother blind with third-
degree burns over most of his--at least 90 percent of his body,
is what they were saying. Shawn was still conscious. He was
still aware of what was going on. And some say that in between
his cries for help he was joking about a fishing trip. It was
just the kind of guy he was. He was a really wonderful guy.
So when we were able to actually--he had no clue what
condition his body was in, because he couldn't see. And we
think that that is probably why he was able to get through it
and he was conscious in knowing what was going on.
But when we finally were able to see him, his face was
splitting, he was swollen, his body was raw, and they refused
to bandage his body. And I had been with him for a lifetime. He
was my brother. And I could only recognize him by a few
freckles on his face and--and this is the hardest thing that a
family can face, truly.
And many can't take this. And in 2007, my youngest brother
drove halfway across the United States with a few photos of
Shawn and the phone records of the night he was killed tucked
in his Bible. He proceeded to shoot himself in the head. And I
can't say that this incident alone caused my brother to take
his life, but I know that he was not able to handle it, and
that was what was on his mind.
The argument that the regulations kill jobs, and I just
really feel that it is just nonsense. There have only been two
OSHA regulations in the past 10 years, crane and derricks and
chromium. Both only affect a fraction of the U.S. businesses.
As I talk to families around the country, I don't see this huge
avalanche of regulations. It is more like a drought.
Rules that protect construction workers from dying in
confined spaces has been on the regulatory agenda for 15 years.
This little guy here, Steven Lillicrap, he was only 21 years
old when he was pulled in to the cables of 100-ton crane. OSHA
had been working on revising outdated crane standards for 10
years.
But this rule came too late for Steven. It was finally
issued in July and is expected to prevent 22 deaths and 175
injuries and millions of dollars in property damage per year.
The benefits far outweigh the costs of this rule.
The U.S. Chemical Safety Board warned OSHA in 2006 about
combustible dust handlers. And it is not well known--but in
2002, the year before my brother was killed, they had also let
OSHA know that this was an issue. So if just the National Fire
Protection Association consensus standards were mandatory, my
brother would still be here, and others would still be here
today.
In 2008, the Imperial Sugar refinery dust explosion killed
14 workers and injured 36. And some of these were severely
injured, severe burns. And the means to prevent this was well-
known. Some companies choose to gamble with workers' lives
because there are no OSHA standards.
When preventable disasters strike in the workplace, they
not only take a huge toll on the injured and their families,
but workers can lose their jobs and communities suffer. In
2009, the Sunoco refinery in Pennsylvania, the company decided
not to rebuild after their explosion. Fifty workers were laid
off. That same year, ConAgra's Slim Jim plant exploded. Three
workers were killed, and 71 were injured. Before the disaster,
700 people were employed there. Now the place is closing.
A contractor working for ConAgra using a dangerous blowout
procedure that purged natural gas in the indoor work
environment is what had caused this. It was well known, that if
OSHA had prevented--if OSHA could have prevented this with
governing and rulemaking, this would have never happened.
There is no price tag that can be put on seeing your
husband walk your daughter down the aisle or seeing your baby
born. I have talked to family members that have had children
and their husbands are gone. Their babies are never going to
know their father. It is nothing like seeing your child
graduate from college or holding your grandbaby.
I respectfully ask this subcommittee to not just look on
one side of the ledger of the costs, but remember the benefits
of the OSHA rules for workers, responsible employers, and
families and communities.
Thank you.
[The statement of Ms. Miser follows:]
Prepared Statement of Tammy Miser, United Support and Memorial for
Workplace Fatalities
Chairman Wahlberg, Ranking Member Woolsey and Members of the
Subcommittee: My name is Tammy Miser. I am the founder of United
Support and Memorial for Workplace Fatalities (USMWF). Our not-for-
profit organization offers support, guidance, resources, and advocacy
to empower family members who have lost a loved one from work-related
injuries or illnesses. We work with other organizations, government
agencies, and businesses as a catalyst for positive change to ensure
safe and healthy working conditions for all.
My brother Shawn Boone worked at the Hayes Lemmerz plant in
Huntington, Indiana where they made aluminum wheels. The plant had a
history of fires, but workers were told not to call the fire
department. My brother and a couple coworkers went in to relight a chip
melt furnace. They decided to stick around a few minutes to make sure
everything was ok and then went back to gather tools. Shawn's back was
toward the furnace when the first explosion occurred. Someone said that
Shawn got up and started walking toward the doors when there was a
second and more intense blast. The heat from that blast was hot enough
to melt copper piping. Shawn did not die instantly. He laid on floor
smoldering while the aluminum dust continued to burn through his flesh
and muscle tissue. The breaths that he took burned his internal organs
and the blast took his eyesight. Shawn was still conscious and asking
for help when the ambulance took him.
Hayes Lemmerz never bothered to call any of my family members to
let us know that there was an explosion, or that Shawn was injured. The
only call we received was from a friend of my husband, Mark, who told
them that Shawn was in route to a Ft. Wayne burn unit. (Mark also
worked at the plant.) When Mark asked the hospital staff where Shawn
was, we found that no one even bothered to identify him. We were told
that there was a ``white, unidentified male'' admitted to the unit.
When Mark tried to describe Shawn, the nurse stopped him to say that
there was an unidentified male with no body hair and no physical
markings to identify. So my Shawn was ultimately identified only by his
body weight and type.
We drove five hours to Indiana wondering if it really was Shawn,
hoping and praying that it wasn't. This still brings about guilt
because I would not wish this feeling on anyone. We arrived only to be
told that Shawn was being kept alive for us. The onsite pastor stopped
us and told us to prepare ourselves, adding he had not seen anything
like this since the war. The doctors refused to treat Shawn, saying
even if they took his limbs, his internal organs were burned beyond
repair. This was apparent by the black sludge they were pumping from
his body.
I went into the burn unit to see my brother. Maybe someone who
didn't know Shawn wouldn't recognize him, but he was still my brother.
You can't spend a lifetime with someone and not know who they are.
Shawn's face had been cleaned up and it was very swollen and splitting,
but he was still my Bub. My family immediately started talking about
taking Shawn off of life support. If we did all agree, I would be
ultimately giving up on Shawn. I would have taken his last breath, even
if there was no hope and we weren't to blame. I still had to make that
decision. To watch them stop the machines and watch my little brother
die before my eyes.
But we did take him off and we did stay to see his last breath. The
two things I remember most are Shawn's last words, ``I'm in a world of
hurt.'' And his last breath.
This has been the hardest thing my family has had to deal with
until 2007. My youngest brother drove half way across the United States
with a few photo's and phone records of the night Shawn was killed that
he had tucked into his bible. Tommy then proceeded to shoot himself in
the head. I can't say that Shawn's death alone caused my brother to
take his own life, but I know for a fact he couldn't deal with it and
that was what was on his mind.
The U.S. Chemical Safety and Hazard Investigation Board (CSB) said
the explosion that killed Shawn probably originated in a dust collector
that was not adequately vented or cleaned. The dust collector was also
too close to the aluminum scrap processing area. Hayes Lemmerz
management allowed dust to accumulate on overhead beams and structures
which caused a second, more massive explosion. The CSB concluded that
had the company adhered to the National Fire Protection Association's
standard for combustible metal dust, the explosion would have been
minimized or prevented altogether.\1\
---------------------------------------------------------------------------
\1\ U.S. Chemical Safety and Hazard Investigation Board.
Investigation Report Aluminum Dust Explosion, Hayes Lemmerz
International, Huntington, Indiana, October 29, 2003. Report No. 2004-
04-I-IN, September 2005.
---------------------------------------------------------------------------
During my own struggle for information about the OSHA investigative
process, it became clear that family member victims of workplace
fatalities needed a place to get information and support. That's how
USMWF was formed. We are a virtual community of individuals with the
shared experience of losing a loved one from a work-related injury or
disease. Thousands of family members across the U.S. suffer profoundly
because of our nation's inadequate regulatory system and its failure to
protect workers' fundamental right to a safe and healthy worksite.
The buzz is that OSHA regulations are bad for business and kill
jobs. This is nonsense. There have only been 2 new OSHA regulations in
the last 10 years: crane and derricks, and hexavalent chromium. Both
only affect a fraction of U.S. businesses. As I talked to families from
around the country who have lost loved ones from workplace hazards, I
don't see an avalanche of new OSHA regulations. It's more like a
drought. For example, a rule to protect construction workers from dying
in confined spaces has been on OSHA's regulatory agenda for 15 years.
Steven Lillicrap was only 21 years old in February 2009 when he was
fatally pulled into the cables of a 100-ton crane. OSHA had been
working to revise its outdated crane safety standard for 10 years, but
the new rule came too late for Steven. It was finally issued last July
and is expected to prevent 22 deaths, 175 injuries, and millions of
dollars in property damage per year. The benefits far outweigh the $154
million cost. When you look at the few standards that OSHA has issued
over its 40 year history, the benefits always exceed the costs. And
those are only the benefits you can quantify.
The CSB warned OSHA in 2006 about combustible dust hazards. Had the
National Fire Protection Association (NFPA) standard been implemented,
as a mandatory regulation instead of a voluntary consensus code, my
brother Shawn and many others would still be here today. In 2008 the
Imperial Sugar refinery explosion killed 14 workers and 36 were burned.
The means to prevent these deadly explosions is well known. And
preventing dust explosions has been done before, such as in grain
handling facilities. Prior to OSHA's 1978 safety standard, there were
about 20 explosions per year in grain elevators. Today, there are only
about six. Yet some companies choose to gamble with workers' lives
because there is no OSHA standard and failing to act gives them a
competitive advantage over more responsible companies.
When preventable disasters strike in the workplace, they not only
take a huge toll on the injured and their families, but workers can
lose their jobs and the community suffers.
Some disasters occur because employers fail to comply with safety
regulations. After the 2009 explosion at the Sunoco refinery in
Pennsylvania, the company decided not to rebuild its ethylene unit.
Fifty workers were laid off.\2\ Had there been better compliance with
OSHA's process safety management requirements, it would never have
happened.
---------------------------------------------------------------------------
\2\ Logue T. Sunoco to lay off 40-50, close ethylene complex. Daily
(Delaware) Times. July 7, 2009.
---------------------------------------------------------------------------
Some disasters occur because of inadequate regulations. In 2009,
Con Agra's Slim Jim plant exploded, 3 workers were killed and 71 were
injured. A contractor was using a procedure that purged natural gas
into the indoor work environment, instead of purging the gas out of
doors and using an explosivity detection meter. This disaster could
have been prevented if OSHA had regulations requiring natural gas to be
purged out of doors. The CSB found that OSHA doesn't have specific
rules for natural gas purging, nor are there voluntary codes.\3\
Because there is no OSHA regulation, there have been too many
explosions of this nature in commercial and industrial facilities.
---------------------------------------------------------------------------
\3\ U.S. Chemical Safety and Hazard Investigation Board. Urgent
Recommendations on Gas Purging. August 2010.
---------------------------------------------------------------------------
The lack of regulations not only killed 3 workers at the ConAgra
plant, it also killed jobs. Before the disaster 700 people worked at
the factory. Now the factory is closing. Rather than rebuild the
damaged portion of the plant, the company is consolidating production
elsewhere.\4\
---------------------------------------------------------------------------
\4\ Nagem S, Wolf AM. Slim Jim plant's demise to put 450 out of
work. NewsObserver.com. March 4, 2010.
---------------------------------------------------------------------------
The T-2 gasoline additive factory near Jacksonville, Florida had a
runaway reaction in December 2007 involving highly reactive sodium
metal. The explosion killed 4 and injured 32, including 28 at
surrounding businesses. Pieces of the building were found a mile away.
An investigation by the CSB found that the reactions could have been
prevented if OSHA's process safety management standard covered reactive
hazards. Sadly, the owner of the T-2 factory was among those killed by
the explosion. Three adjacent businesses had to relocate from the
industrial area, and a fourth business--a trucking company--was put out
of business due to the damage.
There's no price tag that can be put on seeing your husband walk
your daughter down her wedding aisle, or seeing your son graduate from
college, or holding a grandchild. The economic disruption to a family
who loses a breadwinner is never offset by workers' compensation
benefits. Workplace safety regulations and even-handed enforcement help
level the playing field for employers who do the right thing versus
those who take the low road.
A one-sided look at the costs of OSHA rules, but excluding the
benefits, does a disservice to workers, responsible employers, families
and communities.
______
Chairman Walberg. Thank you, Ms. Miser. And thank you for
your courage. And thank you for sharing this with us. I think
it certainly punctuates the purpose of this subcommittee and
the importance that we have as we carefully look at all the
surrounding issues. Thank you.
Ms. Holmes, thank you for being here.
STATEMENT OF JACQUELINE M. HOLMES, ESQ., OF COUNSEL, JONES DAY,
TESTIFYING ON BEHALF OF THE U.S. CHAMBER OF COMMERCE
Ms. Holmes. Thank you, Chairman Walberg, Ranking Member
Woolsey, and members of the subcommittee. I appreciate you
inviting me to testify today.
Before I summarize my own testimony, I would like to say
that I was very touched, as I am sure we all were, by Ms.
Miser's statement. And I, too, appreciate her being here. It is
always a tragedy when someone loses their life in the
workplace.
And I refer in my statement, as I believe you did, as well,
Chairman Walberg, in your opening statement, to the shared goal
of worker safety that is shared by businesses and workers, and
it really is a shared goal. The question, really, that we want
to look at is, what is the best way to achieve that goal in the
most cost-effective way?
By way of background, for purposes of my own testimony, I
am an attorney with the Washington, D.C., office of Jones Day,
where I have practiced in the OSHA area since 1994. I am
pleased to be here today on behalf of the United States Chamber
of Commerce, which represents the interests of over 3 million
businesses of all sizes and in all sectors; 96 percent of the
chamber's members are small businesses who employ 100 or fewer
employees.
It may seem surprising to some members of the subcommittee
that we are here--that many of us are here testifying today
about proposals that OSHA has withdrawn, such as, for example,
the noise standard reinterpretation. But we believe it is
important to do so, because these proposals reflect a troubling
pattern of efforts by the agency to impose substantial burdens
on American business without regard to the cost of those
efforts or their efficacy in improving worker health and safety
or, indeed, in the case of the noise standard, whether there is
a problem that requires solving in the first place. This is
contrary to OSHA's own interpretation of its statutory
mandates.
Understanding that OSHA regulations can be very costly, the
courts and--itself impose very substantial burdens on OSHA when
it chooses to regulate. OSHA must first identify a problem that
creates a significant risk of harm in the workplace. It must,
second, establish that its proposal will substantially reduce
that risk. It must, third, show that its proposal is
economically and technologically feasible. And it must, fourth,
show that it selected the most cost-effective means of
achieving the health and safety objective that the standard
sets. The act, of course, does not require a formal cost-
benefit analysis, but that does not mean that costs can be
ignored.
I would like to focus briefly on the last requirement that
I mentioned, which is the requirement of cost-effectiveness, in
other words, that OSHA select the most cost-effective means to
achieve its regulatory goals. This is echoed by President
Obama's recent executive order, which suggests that agencies
should use the least burdensome means to achieve its regulatory
ends. Those two concepts are really quite similar.
OSHA has embraced this interpretation of the act. It did so
in the early 1990s to assure the federal courts that the OSH
ACT did not represent an unconstitutional delegation of
authority to the agency.
But OSHA completely ignored this requirement for purposes
of its reinterpretation of the noise standard. Instead, it
charged ahead with its reinterpretation without any effort to
consider whether what it was proposing was the most cost-
effective means of achieving its objectives. And given the
information that Mr. Sessions has presented to the subcommittee
a few moments ago, it seems quite clear that the methods that
OSHA selected are not the most cost-effective.
The problem with OSHA's reinterpretation of the noise
standard, however, runs even deeper than its failure to select
the most cost-effective alternative. Indeed, its failure to
study the cost is only the beginning.
In proposing its reinterpretation, OSHA also made no effort
whatsoever even to identify that there was a problem that
required solving. To be sure, it pointed to hearing loss
generally as a workplace health and safety issue, which we
would all agree that it is, but it failed to examine the scope
of the problem or whether current efforts are reducing it. Had
it done so, it would have seen occupational hearing loss cases
have consistently declined since they have been separately
reported on employer injury and on the logs.
You can see on the charts that are up on the screen that we
have a declining trend since 2003 when OSHA mandated that
employers separately report these types of injuries and
illnesses.
These results suggest employers are doing quite well in
reducing occupational exposure to noise. Noise, like some
other--noise like other--some other exposures occurs both in
the workplace and out of the workplace. And over the same
period, noise exposures have--outside the workplace have
exploded, the advent of iPods, Bluetooth headsets. People are
constantly wired for sound. And the fact that we still are
seeing a decrease in occupational exposure suggests that
employers are doing a pretty good job.
Thus, the data suggests employers are really working--and
employer efforts are working to reduce hearing loss cases. ``If
it ain't broke, don't fix it'' is not an enforceable maxim of
administrative law, but it is not a bad place to start.
So here we are. OSHA hasn't demonstrated any obvious
problem that requires solving, gave no examination whatsoever
to the costs of this proposal. On top of that, the agency made
the proposal at a time of substantial unemployment.
It is, in effect, telling American industry that it has to
expend resources retrofitting its factories rather than hire
new employees and increase production. And because OSHA didn't
propose to change the exposure levels that are acceptable under
the noise standard, but simply to require engineering controls
rather than personal protective equipment in the first
instance, it was doing so to achieve exactly the same noise
exposure levels as are currently achieved through less
expensive means.
Even if OSHA came up with a legal basis to support its
actions--and it hasn't done so yet--that doesn't mean it should
take these actions now without any consideration for how it may
impact the U.S. economy.
While we appreciate that OSHA has withdrawn this proposal
and committed to a number of steps, such as increased outreach,
a lack of outreach was not the problem with the proposal. The
problem is the lack of common sense and an overabundance of
arrogance. There is no evidence that OSHA even believed it
necessary to assess seriously whether there was a problem that
required fixing, to study the cost, or to consult with the
business community before making this change, and these
failures led them to propose something that was bad policy,
plain and simple.
If the law allows OSHA to take such steps--and I am
skeptical that it does--that law should be changed. And if this
is how the agency intends to use the agency that it has, it
should not be given any more.
Thank you very much.
[The statement of Ms. Holmes follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
------
Chairman Walberg. Thank you, Ms. Holmes. Appreciate the
testimony of the witnesses and look forward to further
statements and developing the concepts during the course of the
questioning.
And those questions will have 5-minute time span. And I
will be much more attentive to that now, since we are starting
fresh at this point, and so let me begin.
Mr. Sullivan, in your testimony, you discussed OSHA's on-
site consultation program and the changes the agency proposed
that could compromise this proactive safety program run by
OSHA. Can you explain how the changes OSHA proposed would be
detrimental to small businesses?
Mr. Sullivan. Thank you, Mr. Chairman. I am happy to.
It is actually very simple. And my impression of the
changes is mostly gained from my work when I was at the
National Federation of Independent Business. The success of
OSHA's on-site consultation program largely is due to the
understanding by the small-business community that violations
and problems that are found will not be shared with the
enforcement side of the shop, especially if those problems are
solved.
And, I mean, isn't that the reason that we are here and
talking about this, is that we want solutions to these problems
to fix the different problems? And that barrier between the on-
site consultation and enforcement encouraged small businesses
to come in and say, ``You know, I am not sure if we have it
quite right. Can you help me?''
And the proposed changes break down that barrier between
the on-site consultation program and the enforcement program.
OSHA wants to share--now share information between those two
programs. And in my experience working with small businesses,
that will have an absolutely awful effect on the program,
because small businesses will no longer want to participate in
a program where they may be subject to enforcement without
having the chance to fix the problem.
Chairman Walberg. Thank you.
Mr. Sessions, the noise proposal takes issue with the way
economists undertake cost-benefit analysis. One of your
conclusions suggests that, had this proposal gone forward,
there would have been--and I quote--``relatively little
benefit'' in terms of improved hearing protection for workers.
Can you explain how you reached your cost-benefit analysis
conclusion?
Mr. Sessions. There are two halves to that conversation.
The first half is essentially the point that Ms. Holmes was
talking about, also, which is that the problem is--the problem
of work-related hearing loss is relatively well managed and
further declining. The rate of reported work-related hearing
loss incidents is very low and declining.
So the problem in the first place isn't all that large. The
particular approach OSHA proposed for further reducing that low
level of hearing loss will not significantly further reduce it.
Under current policy, employers use hearing protection for a
very large share of the hearing--personal hearing protection
devices for a very large share of the protection that workers
get. And under OSHA's proposal, the engineering controls that
would be required would still not typically reduce noise levels
sufficiently to eliminate the need for hearing protection.
So currently, hearing protectors are a large share of the
protection. And even after OSHA's proposal, they would continue
to be a large share of the protection. So the problem isn't all
that large in the first place. And the reduction that would be
achieved by OSHA's proposal is not particularly substantial.
Chairman Walberg. Okay. Going on from that, several of your
answers, Mr. Sessions, you received in your survey of
manufacturers would give anyone cause for concern. The idea
that a proposal would cause manufacturers to shut down or move,
work offshore as a result of the proposed reinterpretation
would further exacerbate the problems in the economy.
Are there other proposals that you can point to that would
have a similar negative impact? And please be brief.
Mr. Sessions. I think that the jury is out on that. OSHA
has additional proposals in the works. One is certainly that I
am following is the proposal to reduce the worker exposure
level to crystalline silica. But we don't know what the
specific reduced--tighter standard is that OSHA is going to
propose.
And particularly importantly for this and other standards
that OSHA has in the works, assuming that OSHA is treating them
as regulations, OSHA will accompany the proposed regulation
with a full study of, how big is the problem in the first
place? What are the costs? What are the benefits? And what are
the economic impacts?
And it is essentially those requirements for analysis, for
transparency, for disclosure, for estimating the impacts on the
economy that give the regulator community and the public the
chance to make a reasoned decision on OSHA's regulation and----
Chairman Walberg. Thank you, Mr. Sessions. I am going to
have to break it there to hold myself to the 5-minute time
limit.
I will turn it to the ranking member, Ms. Woolsey?
Ms. Woolsey. And, Mr. Chairman, I would like to step aside
for the ranking member of the full committee.
Oh, we thought you had to leave. Oh, well, thank you.
Tammy, thank you for your testimony. It is nice to have you
here again. You are a brave woman.
I want everybody else to realize--that following three
combustible dust accidents in 2003, which killed 14 workers--
one of them was Tammy's brother--the U.S. Chemical Safety Board
investigated. They found that in the 25 years between 1980 and
2005, there had been 281 combustible dust explosions and fires,
resulting in 119 fatalities and 718 injuries.
So in 2006, they urged OSHA to issue a comprehensive
standard. Yet the recommendation gathered dust until the Obama
Administration put it on their regulatory agenda in 2009.
OSHA faces another 4 to 5 years of rulemaking before this
can become a standard. At best, it will have a rule 13 years
after Tammy's brother was killed. How is this system working
for new worker protection rules? And how does it keep employees
out of danger, large employers, small employers?
See, as far as I am concerned, if you are an employee, you
need to be kept safe. It doesn't matter if you work for a large
or small--and, actually, large employers have fewer accidents
than the small employers do.
So, Tammy, do you want to respond to--do you have any
idea--do any of you have any idea what should be done to speed
the process along, other than not having a process?
Ms. Miser. Well, as of right now, they do have--National
Fire Protection Association has an actual standard. And that
would actually cover a lot of the issues that they are having,
because of right now, I mean, we know it is an issue.
And some--I firmly believe that there are some issues that
are more urgent, and this would be one of them. I mean, people
are dying. There are explosions. People are losing their
businesses. In the House, there is a bill for combustible dust.
And if that was to be applied now, at least that would be taken
care of. And that would be a start.
Because I think a lot of it is, is there is just--there was
just so must buzz and so much going on about what needed to be
done and what couldn't be done. And you have seen where people
have kind of dropped off, because at first I thought there was
going to be a regulation. Well, now there is not.
And I am not saying every company is that way. I had a
small business. I had two small businesses. Some people really
try, but there are other companies that try to cut corners, and
this is one of them.
Mr. Sullivan. Congresswoman, you had asked if any of us had
suggestions on how to speed the process. I do. And it has to do
with OSHA's recent MSD rulemaking.
You know, it is great that OSHA decided to withdraw the
rule and say, we would like to talk more with small businesses
before we actually move forward. That is great. But 16 months
ago, if they had done what the law requires, and that was to
have a small-business panel made up of small businesses, then
they would be much longer down the process.
Ms. Woolsey. Mr. Sullivan, you have already told us that. I
mean, let's go to something beyond what should have happened.
What can happen, is what I want to know. What can be done now?
Mr. Sullivan. OSHA can listen to small businesses at the
front end of the process, not 16 months later when it says,
okay, we will start over again. I think that that would speed
the process, Congresswoman.
Ms. Woolsey. Ms. Holmes, I appreciate that you acknowledge
that these standards have been withdrawn, and we are sort of
beating a dead horse here, the three of you talking about
something that has already been stopped. I mean, we are not
going to do it that way.
A mistake? Possibly. But let's go forward. Where can we go
forward? And what is our next best step so that everybody
benefits?
Ms. Holmes. Well, I think--first of all, I think that there
is a reason we are talking about things that have been
withdrawn, and that is because they reflect a fundamentally
troubling allocation of resources. The notion that OSHA spent
resources on the noise reinterpretation when there is--without
even looking to see whether there was an issue----
Ms. Woolsey. Well, then that was back then. Would you agree
that employees of small businesses have the same right to a
safe workplace as a large business?
Ms. Holmes. I certainly agree that worker safety is
something that should be of concern to all businesses----
Ms. Woolsey. Thank you.
Ms. Holmes [continuing]. Of all sizes. And I believe that
it is of concern to all businesses of all sizes.
Chairman Walberg. Thank you for your response. The time has
expired.
We will move on now to the gentlelady from South Dakota,
Ms. Noem.
Ms. Noem. Thank you, Mr. Chairman.
Well, I would like to follow up on that discussion with Mr.
Sullivan in a little bit more of a proactive approach then,
since that is where the discussion is going. So does the Small
Business Administration ever partner with other agencies, such
as OSHA, on regulations in order to better understand the
implications or impact of regulations or proposals before they
are issued?
Mr. Sullivan. Yes. Congresswoman, SBA's Office of Advocacy
does just that. A pre-proposal in a dialogue between agencies
that is not a public dialogue--it is a helpful, constructive
dialogue--the SBA's Office of Advocacy works with agencies,
EPA, OSHA, the new Consumer Financial Protection Bureau, in
fact, all agencies, to try to make sure that what an agency's
going forward with actually makes sense when it comes to a Main
Street small business.
When an agency actually takes the advice of SBA's Office of
Advocacy, it is a much smoother process. And I think that
Congresswoman Woolsey is right. Looking forward, about how you
get the process down is where we should be devoting our
attention. And if these agencies actually do listen to SBA's
Office of Advocacy, it would be a much smoother regulatory
process.
Ms. Noem. So in your opinion, do you feel that these
agencies look favorably about that process and they are willing
to cooperate as it goes forward?
Mr. Sullivan. No, I don't view agencies looking at the
process as a constructive dialogue, although there is some
hope. Professor Elizabeth Warren, who is in charge of staffing
up this new Consumer Financial Protection Bureau, actually has
traveled with Senator Snowe up to Maine and said, you know,
Senator, even if I wasn't required to consult with small
businesses, I would do it, because it makes sense, the type of
analysis that should be public makes sense, and she is
committed to doing that moving forward with an entirely new
regulatory agency.
So if other agencies adopted that approach, I think we
would have a much smoother process.
Ms. Noem. Okay. I have one more follow-up question for Ms.
Holmes, if that is possible, real quick. OSHA has several
proposals pending that the agency suggested would not be
significant regulations and the fact these proposals should
have been certified as significant.
So what do you believe would be the outcome, will be on
your clients and on their businesses?
Ms. Holmes. You know, I think that OSHA does, as you
suggested, create a number of proposals that they prefer to
characterize as insignificant, because that allows them to--
they believe, I think--short-cut a lot of the processes. But as
Mr. Sullivan has pointed out, that really creates a great deal
of trouble at the back side.
If we could have, you know, an honest assessment of what a
regulation purports to do, what it is going to require, and how
much it is going to cost at the front end, that would, I think,
reduce challenges at the back end and would allow those
regulations to be put in place, you know, more quickly and more
effectively, and that they would be more effective for
everyone.
Businesses certainly have a lot to say about what works and
what doesn't and what is cost-effective and what isn't, in
terms of regulation, and I think that is an area that OSHA
would do well to consult about at the front end.
Ms. Noem. Okay. Thank you.
Thank you, Mr. Chairman.
Chairman Walberg. Thank you. We will move on to the
gentleman from New Jersey, Mr. Payne?
Mr. Payne. Thank you very much.
Let me--Mr. Sullivan, Ms. Holmes, there has been a--you
know, the dead horse has been beaten. But isn't it sort of the
American way to try to use technology, try to use our advance
that we have over other nations, by and large, at least in the
past, to try to deal with the problem? I mean, it seems like
you are saying it is so absurd that there might be some notion
on a part of OSHA to use some technological way to try to
improve the problem.
I can't understand--and maybe it was--the cost was
prohibitive and they decided to withdraw it. But what is so
wrong about trying to use technology? That is what we are all
about, isn't it?
Mr. Sullivan. Congressman, there is nothing wrong with
using technology. What I have been trying to impress upon the
committee is the need to force a dialogue between the small-
business community who may be using that technology and OSHA,
in order to come up with a solution.
I will give as an example the SBREFA panel that was
convened for the hexavalent chrome rule. And at one point, OSHA
was thinking of requiring a venting operation over the chrome
plating operation. So, basically, you would have chrome plating
and a flow of air directly above the plating to prevent the
fumes from reaching the workers.
Well, because of this small-business panel process, a small
manufacturer who met with OSHA explained, if you require that,
then you put me out of compliance with Environmental Protection
Agency rules. And because of that dialogue, they actually
worked towards a successful solution.
So it is bringing in the realities of the workplace,
sometimes, many times involving advanced technologies that
helps OSHA come up with a better rulemaking.
Mr. Payne. Okay, let me ask. There has been an affirmative,
I think, Ms. Holmes and you, too, Mr. Sullivan, that there has
been a reduction in the complaints about hearing. You know,
that doesn't necessarily mean that the problem isn't as bad as
it was.
I think when you find employees and when you find an
unemployment rate of 10 percent, many times employees will
forego their own safety, as for reporting noise violations, in
order to keep a job. I mean, in other words, what I am saying
is that because you say statistically you have empirical data
that says that there is less of a problem today does not
necessarily mean that the problem isn't as great.
And I will tell you, I worked in a place where there was--I
was personnel director where there was noise. It is very
difficult to keep compliance. Hard hats will wear hard hats,
because they are out in the public and people can see them, if
the hat is on or not. However, in a place where you have over
85 decibels is where you need to have ear protection.
It is very difficult to keep those earplugs on, because,
one, they are uncomfortable; two, they are hot when it is in
the summertime. Workers really don't like to use them. So you
have to really stay on top of them. So I am just simply saying
that, because they are less reported numbers don't necessarily
mean that the problem isn't as great as it was.
Let me just ask you, Ms. Miser, there has been a request in
the new C.R. that the Republicans put forth to cut 15 percent
from the OSHA in one area and another really slashes. What do
you think this is going to do, the impact on occupational
safety, when you don't have inspectors, et cetera?
Ms. Miser. Well, of course, I am not an expert. But it does
concern me, because as of right now, it is going to take 100
years to--if they were to inspect every single employer. And
the fellow over here was saying, you know, there can't be any
communication there. If they do want to get the information,
they won't even be able to get it because of that.
And then on top of that, my real concern is the fact that
this may affect the state plans. I mean, I don't know. I don't
know what the budget is. Kentucky does a pretty good job. They
really do. And if their budget is cut, they aren't going to be
able to do that. And they are the only plans that cover
government employees, these state plans.
And if--I mean, it is a shame. I think every government
employee should be--everybody should have the same rights to
health and safety in the workplace. But they don't. And I am
just really afraid that it is going to cut that back and harm
the state plans, who are really doing a good job out there.
Mr. Payne. Thank you very much.
Chairman Walberg. The time has ended. We will move on to
the gentleman from Florida, Mr. Ross?
Mr. Ross. Thank you, Mr. Chairman.
I want to take a little different tact here. I know we are
talking about the regulatory impact of OSHA, but I have a
concern--and I want to talk about specifically--and to you, Mr.
Sullivan, with regard to the muscular skeletal disorders. And
the reason I want to do that is because it appears to me that
trying to define repetitive trauma and putting the burden on
the employer would result in the creation of new causes of
action for which an employer could be sued.
For example, ADA. Now that they are made aware of a
particular incident or condition that the employee may have,
does reasonable accommodation now have to be made? Is there an
onus on the employer now to investigate that? Is there an onus
on the employer now to investigate a causal relationship?
For example, just because a repetitive trauma condition may
occur either as a result of a bad knee or carpal tunnel or
something, would that then require the employer to invest in a
medical diagnosis of his condition and take a patient history
to determine whether such a condition could be causally related
to the job requirements or to something else, just maybe even
degenerative changes?
And also, when you look at retaliatory terminations, causes
of actions for retaliatory terminations--in other words, as an
employee, I have been let go for cause, but I don't believe so.
I believe it is because I have put on my Log 300 now that I
have, you know, a constant pain in my back and, therefore, they
are letting me go because they don't want to have to invest
further.
So I would appreciate your opinion with regard to the MSDs
and the likelihood of a new cause of action may ensue.
Mr. Sullivan. Well, Congressman, the thought process you
just went through is similar to the thought process a small-
business owner would go through when they are looking at
whether or not to put an injury or illness onto a log. And to
say that that calculation in your mind, even without any type
of diagnostics, would take under 5 minutes really gets at a
disagreement between small businesses and OSHA over their
proposal.
I would actually elevate your concerns even higher, because
when you talk about the diagnosis of an injury, you are
actually putting the employer potentially in the place of a
doctor to make a diagnosis. And so they have to really go
through two things. One is to determine whether or not it is an
MSD, which sometimes requires a doctor, and it wouldn't be fair
to be put that----
Mr. Ross. It would require a doctor. I mean----
Mr. Sullivan [continuing]. Onus on an employer. The other
is whether or not it is work-related. And you get into some
really sticky situations not only to see if it was part of a
weekend touch football game, but, really, whether or not that
is any of the employer's business. And so navigating all those
sensitivities under the cloud of potential legal liability is a
very real concern to small businesses on this proposal.
Mr. Ross. And, for example, if they left employment and
later filed suit for a work-related accident under the workers'
compensation rules for carpal tunnel, but they fail to disclose
it on their Log 30, then couldn't the employer not be availed
to an affirmative defense of a misrepresentation of a physical
condition?
Mr. Sullivan. All very good concerns that are echoed by the
small-business community.
Mr. Ross. Mr. Sessions, you commented about the noise
protection ruling. And more importantly, you indicated that it
was done by way of an administrative interpretation, rather
than by regulation. Is that something that is normally
delivered or promulgated by OSHA, with disregard to the
regulatory process?
Mr. Sessions. It has been a grey area, both for OSHA and
other regulatory agencies, sort of, what is done by regulation
and what is done by administrative interpretation, by guidance
documents, or by other means that aren't subjected to----
Mr. Ross. Or by regulatory fiat, as I would say.
Mr. Sessions. You know, there are procedural safeguards if
an agency is going to do something by formal regulation. SBREFA
applies, the executive order for analysis applies, but they
don't apply if the agency somehow takes the action under a
different guise. And that has been a very difficult issue for a
number of years across all regulatory agencies.
Mr. Ross. Thank you.
Ms. Holmes, just real quickly, because I am running out of
time here, I think the greatest balance that we could afford is
to make sure that the regulatory environment is as stringent
and necessary as possible to maintain a good business
environment and also to protect against the incidents which
occurred that cost Ms. Miser her brother.
But I--my concern at this point--and I address this to you
for your members and dealing with the chamber--have not we lost
sight in this regulatory process of the foundation upon which
we rely, and that is logic and reason?
Ms. Holmes. You know, I think we have in many respects,
Congressman, because we have, you know, an agency that, again,
I said and I meant, what we--what OSHA did in connection with
the noise standard is really unbridled arrogance. They did not
feel the need to look to see whether there was a problem,
whether what they were proposing would fix the problem, or how
much it would cost.
We simply can't have that. And they did, in fact, by
regulatory fiat, as you suggested, rather than going through a
rulemaking process where there would have been----
Mr. Ross. Thank you. I believe my time is up. Thank you.
Ms. Holmes. And now I will be quiet.
Chairman Walberg. Thank you.
We will move on to the gentleman from Indiana, Mr. Bucshon?
Mr. Bucshon. Thank you, Mr. Chairman. And thanks to the
panel.
Just to give you a little background on me, I am a
physician, cardiovascular surgeon. I see a lot of patients with
their lung problems that have a history of workplace exposure,
so I understand that concept. And also, my father was a United
Mine Worker and a coalminer underground for many years, so I
have also seen that--it from that side.
And my question is from a budgetary standpoint. And would--
and anyone on the panel can address this. I mean, in 2008,
would anyone say that OSHA was having difficulty with what they
were trying to do based on their budget in 2008?
Ms. Holmes?
Ms. Holmes. From my perspective, Congressman, I don't think
they were. I think it is a matter of setting regulatory
priorities, as well as, to the extent possible, deferring
resources to compliance. The vast, vast, vast majority of
employers want very much to do the right thing by their
employees. It does not serve any business to lose employees or
have employees become injured on the job. It is--in addition to
the human factor, which is very important, it is
extraordinarily costly. Workers compensation costs are very
high. It is good business to work safely.
And in businesses of--the vast, vast majority--and
certainly everyone I have had the privilege to represent in my
16 years--has taken that tack, that they want to do the right
thing. And I think OSHA has the resources to--I think it is a
matter of smart use of resources, candidly.
Mr. Bucshon. Okay. Thank you.
I yield back.
Chairman Walberg. He will be right here. I am looking
forward to calling on the gentleman who was my chairman the
last time I served here before coming back this term, and now
the ranking member of the full committee, Mr. Miller?
Mr. Miller. Thank you very much, Mr. Chairman. My
apologies. I am unfortunately having to duck in and out.
Let me just, if I might, see if I can get some
clarification. Mr. Sullivan, in your testimony, you are not
arguing that the Regulatory Flexibility Act at OSHA is not
working? You don't like the way it is being handled in this
particular case?
Mr. Sullivan. I believe that the attitude of trying to
avoid SBREFA instead of embracing it is cause for concern.
Mr. Miller. See, that--you are talking about--but it has
been in one iteration since the 1980s. You are not arguing that
the underlying law is somehow not working? I mean----
Mr. Sullivan. I believe that there is an attitudinal
problem----
Mr. Miller. I understand that. I understand that.
Mr. Sullivan. There is----
Mr. Miller. I am asking about the generic law. Apparently
you were happy with it 2 years ago.
Mr. Sullivan. Actually, I testified last week on measures
that should be adopted to----
Mr. Miller. That is different. I understand that.
Mr. Sullivan [continuing]. Improve the law, so----
Mr. Miller. So what is your testimony?
Mr. Sullivan. My testimony is before the committee----
Mr. Miller. You don't like the way this Administration of
OSHA is administering the law?
Mr. Sullivan. I have been critical of OSHA's implementation
of the Regulatory Flexibility Act past this Administration,
when I was working----
Mr. Miller. Okay, that is--I am trying to figure this out.
Mr. Sullivan. Okay. Well, I believe that OSHA has been able
to do a better job and continues to be able to do a better job
in complying with the Regulatory Flexibility Act.
Mr. Miller. Mr. Sullivan, in this discussion of the cost of
regulation--now, you have obviously chosen to and it is right
in your testimony, just to talk about the cost. Are you
suggesting there are no benefits of OSHA regulations? There
have been no benefits throughout the various administrations of
OSHA here?
Mr. Sullivan. I am not suggesting that there are no
benefits. The reason I focused on cost is because, in that way,
it is very clear that small businesses are disproportionately
impacted by costs. And the Regulatory Flexibility Act----
Mr. Miller. Small businesses----
Mr. Sullivan [continuing]. Tries to--tries----
Mr. Miller. Don't small businesses also generate a somewhat
higher percentage of the accidents, given--to the small-
business employee population?
Mr. Sullivan. Congressman, I don't know what the comparison
of small-business accidents are compared to large-business. I
do know that there is a disproportionate cost on small business
when it comes to regulation, and the idea of the--Congressman,
could I actually just finish my answer?
Mr. Miller. I am running out of time. As you know, the
chair is being----
Mr. Sullivan. I would like to just answer your question,
Congressman.
Mr. Miller. I would like to ask you another question.
Mr. Sullivan. Thank you.
Mr. Miller. Because it goes to the point you are about to
make. If they generate 45 percent of the fatalities with 14
percent of the workforce, you might want to check in with them
to see what is going on.
Mr. Sullivan. I think OSHA wants to issue rules that work
on Main Street small business. And in order for it to work,
they have to consider the impact and the constructive impact by
small business before moving forward with rules.
Mr. Miller. I would make the point that when you decide you
are only going to talk about cost, one, the question is whether
or not small business is a generator of fatalities that
justifies their consideration by OSHA for rules and, two, that
when you talk only about the cost of regulation, somewhere in
the testimony there has to be some understanding of what the
benefits are, of whether we can arrive at that mutually or not.
There has to be some understanding of that, because you get
studies all the time from various insurance companies and
others who cover various sectors of our economy about the cost
of fatalities, about the cost of the injuries, of the
retraining, of the rehabilitation that go on with this.
And so I think--I don't get the----
Mr. Sullivan. I think we actually both want the same end
point, and that is a smarter regulation at the end of the
process. And how they get there----
Mr. Miller [continuing]. If I only talk about the benefits
of the regulation and suggest we start from that basis and you
only talk about the costs and suggest that we start from that
basis.
Mr. Sullivan. Well, actually, I think we get to the same
place when OSHA not only asks small business how a rule can be
written better to reduce costs, but also to ask----
Mr. Miller. I understand that.
Mr. Sullivan [continuing]. Ask the small employer, hey,
this is what we are looking at. Do you think it increases
benefits more from a small-business perspective----
Mr. Miller. So you do give some recognition to the fact
that there are benefits to many of these regulations and have
been, in terms of saving lives or reducing injuries or cost of
businesses?
Mr. Sullivan. Of course I do.
Mr. Miller. Okay.
Mr. Sullivan. And I also recognize that the small
businesses, in engaging in that dialogue with OSHA, would like
to come up with those solutions.
Mr. Miller. I understand. Okay. Thank you.
Chairman Walberg. Thank you.
Mr. Miller. I yield back my time, Mr. Chairman.
Chairman Walberg. Appreciate that. We have the Chairman of
the full committee here, the gentleman from Minnesota, Mr.
Kline.
Mr. Kline. Thank you, Mr. Chairman. I apologize for coming
in late. You have probably noticed that--how this place works.
It is a bit confusing, as Members are moving back and forth
between competing hearings and competing commitments.
I do want to thank all of you for being here today and for
your testimony. And I want to give Mr. Sullivan the opportunity
to pick up--he was trying to complete an answer to Mr. Miller's
question having to do with cost-benefit analysis and assessing
the costs of regulations, which fall disproportionately on
small businesses.
And I know you were starting to finish that thought, and I
would like to give you the opportunity to do that.
Mr. Sullivan. Well, thank you, Congressman. There has been
a great deal of attention to figures that have to do with the
cost of regulation on small firms. And from my opinion, that
actually is a separate conversation than what I tried to bring
across in my testimony, which is that small businesses are
disproportionately impacted.
And that really gets at that federal rules just aren't--
they should not be encouraged to be one-size-fits-all. And if
OSHA sits down with small business and says, ``We would like to
solve a problem. How do you, small business, propose that we
try to solve this problem?''
Forcing that dialogue is what makes for a better final
regulation. And in my opinion, OSHA is not doing a good enough
job in having that dialogue.
Mr. Kline. Thank you. I yield back, Mr. Chairman.
Chairman Walberg. Thank you, Mr. Kline.
Now we moved to the gentleman from Ohio, Mr. Kucinich.
Mr. Kucinich. Thank you, Mr. Chairman.
To Ms. Miser--and welcome to you and to all the witnesses--
Ms. Miser, your testimony talked about the OSHA crane standard,
which will provide a net benefit of $55 million a year, based
on lives saves and injuries avoided, yet the Mercatus
Institute, a think-tank funded by corporate interests, gives
this rule a low score on its regulatory report card.
Now, given the deaths from crane accidents, should OSHA
have simply ignored this problem? And isn't it the case that
industry also wanted the standard updated?
Ms. Miser. Well, in that particular case, all they would
have needed is a spotter, and he would be here today. So, I
mean, absolutely not, I don't think that they should. It is a
simple solution, and it should have, you know, been done way
before that.
And I guess, to me, what you need to do is look at
standards that work, standards that are working now. For
instance, the grain standard. We know for a fact that it saves
lives. You know, it saves--I have the figures here. It says
that--and this was by the National Grain and Feed Association.
They say that explosions declined 71 percent, injuries by 90
percent, and fatalities by 95 percent.
So, no, I don't. I think that there are times when you have
to--standards, and I think that they are very important. And I
don't think that they should be given up. I think we should
keep pushing until we get it done. And if it takes a little
work, if it takes a little talk, that is fine, but let's get to
it and let's get it done.
Mr. Kucinich. Mr. Sullivan, let's discuss fatality rates in
small business. The Kauffman-RAND Institute Center for the
Study of Small Business and Regulation found that firms with 1
to 19 employees had the highest fatality rate in all sectors,
except wholesale trade. They found that firms with more than
1,000 employees had the lowest fatality rates in all
industries.
The Census of Fatal Occupational Injuries, which is
published by the Bureau of Labor Statistics, reports that 45
percent of all workplace fatalities occur at small businesses
which employ between 1 and 9 employees, even though these
establishments only employ 14 percent of the workforce.
So, Mr. Sullivan, do you agree that that small-business
establishments have on average higher fatality rates than
larger establishments? And if not, is the Labor Department data
in error?
Mr. Sullivan. Congressman Kucinich, I don't disagree with
the data. I would be interested in having a subsequent
conversation and drilling into that data. I remember when I was
working at the Small Business Administration and hearing those
statistics and asking, why are they so high? And I believe that
the answer uniformly was because of traffic fatalities, which,
you know, ironically are outside of the scope of OSHA.
But I think a very serious set of statistics that point out
a problem--and I will go back to kind of my--the whole purpose
of my testimony, which is to encourage OSHA to sit down with
small employers to hammer out rules that work. And when you
look at those types of fatality rates, I think it only elevates
that type of approach, because they do want to finalize rules
that work on Main Street and not have to redo these regulations
when fatalities go up.
Chairman Walberg. Time is expired. I will say thank you to
each of the witnesses for taking the time to be here today to
share your expertise, your experience, your data, and your
heart, as well, on this issue.
And there will be other opportunities that we will
aggressively continue to look. And I agree with my ranking
member that we want to have an aggressive hearing schedule, as
well, to plum the depths of what is involved here. And even the
fact with the grain standard, took 7 years to develop that, and
we want to encourage more rapid, but we certainly want to
encourage vital and useful standards, as well.
Having said that, I would like to recognize Ms. Woolsey,
the ranking member, gentlelady from California, to close with
her comments.
Ms. Woolsey. Thank you, Mr. Chairman.
And it is obvious we have--both sides of this debate are
interested and active in participating today. I give you a lot
of credit for that. And my subcommittee has been really active
for the last 4 years. They want to keep on going.
I really believe that, unless the goal is to underfund and
undermine in the long run OSHA, we really can work together,
because we have to bring OSHA into the 21st century, period,
because all of our workers are depending on us. So thank you
very much.
Chairman Walberg. Thank you, Ms. Woolsey.
Again, thank you to the witnesses for sharing with us
today. We will approach these issues differently, I am certain,
as we work on this subcommittee. And all of the issues
pertinent to that mix, that creative tension of having jobs,
which people need, and an expanded economy, which that can
produce, the prosperity, the lifestyle, the happiness, and the
safety in carrying out all of these functions in a society that
works well together.
But that is a creative tension. And at each time in our
history, there are approaches that must be flexible in how we
approach it in order to keep the movement forward, as opposed
to stopping, which, as we all know, once you stop, you move
backwards.
So thank you again for participating. I thank the
subcommittee for your involvement, as well. We will have
opportunities to continue to explore. I look forward to doing
that. We will certainly have OSHA and its representatives in
front of us. We look forward to hearing the Secretary tomorrow
in hearing, in the full committee, and then moving from that
with further testimony from business and industry, from
workers, and from the regulators themselves.
So there being no further business, the subcommittee stands
adjourned.
[The statement of Ms. Hirono follows:]
Prepared Statement of Hon. Mazie K. Hirono, a Representative in
Congress From the State of Hawaii
Today Republicans have called a hearing to argue that the
Occupational Safety and Health Agency (OSHA) costs too much and burdens
businesses with too much regulation.
The workers in my district and I know better!
I have heard from workers in Hawaii about how OSHA regulations and
enforcement reduce injuries and save lives.
One worker at an electric utility company told me of the hazardous
conditions she and her team are exposed to every day: electricity,
chemicals, high pressure steam and water lines, and high temperature
fuel. OSHA's rules and guidelines require regular safety trainings and
updates, and ensure that workers wear safety glasses, steel-toed shoes,
flame-retardant clothing, chemical hoods, and safety gloves. The goal
is NO injuries.
Despite these precautions and wearing the proper equipment, she was
burned by sulfuric acid in an accident 15 years ago. When reviewing the
work area she was in when the burn occurred, the company's safety
department--following OSHA guidelines--determined that additional
engineering measures were necessary to prevent future injuries.
Fortunately, no future injuries have occurred at this workplace.
Safety guidelines and regulations can help save lives, and so can
enforcement.
In another story in Hawaii, lack of sufficient enforcement led to
tragic results. In May 2009, an 800-foot tower collapsed at the
Hawaiian Cement facility, killing worker Juan Navarro. Subcontractor AG
Transport did not have a license, engineering survey, or evacuation
plan for the demolition project. The company was fined a paltry $750.
This accident could have been prevented, but Hawaii only had 11 state
OSHA staffers to inspect and enforce worker safety on construction
projects across all 7 of our inhabited islands.
In September of 2010, the U.S. Department of Labor (DOL) found that
under former Governor Linda Lingle, Hawaii had under-funded and
systematically neglected its state Occupational Safety and Health Act
plan (OSHA state plan). As a result, Hawaii did not have enough
workplace inspections or on-site consultations to keep workers safe.
Hawaii was the only state in the nation found breaking its state plan
obligations.
Unfortunately, for Hawaii and the 27 states/territories with
approved state plans, DOL is extremely limited in its authority to help
state plans improve. DOL's only option under current law is to
completely end the state plan's local control and step in with federal
control.
My Ensuring Worker Safety Act (H.R. 571) would allow federal OSHA
more flexibility to collaborate with states and improve underperforming
state plans, such as Hawaii's. I urge my colleagues to support it.
On the U.S. House floor today, the Republican job-slashing
resolution would decimate federal OSHA's budget by $99 billion this
year, requiring 3-month furloughs of OSHA employees, then layoffs next
year. This is not the way to ensure worker safety.
In reviewing today's witness testimony, I note that those who
question OSHA's programs focus on OSHA's costs without discussing the
benefits. I would point out the following:
According to the latest ``Death on the Job'' report, OSHA
regulations and enforcement have saved an estimated 410,000 lives in
the 40 years since the Act was passed in 1970.
Liberty Mutual insurance estimated that the annual direct
cost to businesses of work-related injuries and illnesses were $53.4
billion per year, more than $1 billion per week!
Since 2000, OSHA has reviewed the costs and benefits of
its rules 8 times, finding its regulations to reduce accidents and
injuries. For example, the review found that OSHA's grain handling
standards reduced explosions by 42% and reduced deaths by 70%; sharps
injuries were reduced by 88%; and excavation fatalities were reduced by
40%.
Beyond these measurable economic and safety benefits, what value do
we place on reducing worker injury, illness, and death? OSHA
protections must be upheld and enforced properly to keep our workers
safe.
______
[The statement of Mr. Kucinich follows:]
Prepared Statement of Hon. Dennis J. Kucinich, a
Representative in Congress From the State of Ohio
Today's hearing is presented as an examination of the impact of the
actions of the Occupational Safety and Health Administration (OSHA) and
the alleged negative effect on job creation. Despite having issued only
2 new health and safety standards in the past ten years, OSHA is being
cast as a villain that has our economy in its clutches. OSHA is being
asked to be more responsive to the needs of small business, while
facing $99 million in cuts in the continuing resolution (CR) we are
expected to vote on this week.
The unemployment rate is still at record levels. The labor force
participation rate is nearly at its lowest level in a generation. There
are nearly 5 unemployed workers for every job opening in this country.
Millions of Americans are under water on their homes, and so they
cannot sell them and they cannot move to pursue better economic
opportunities in other parts of this country. Meanwhile, American
corporations are sitting on $2 trillion in cash. Much of that $2
trillion it appears is being spent on high-priced industry lobbyists,
instead of workers. And we know that worker productivity--the output
per worker per hour--has steadily increased over the years, especially
in manufacturing and service industries, but the average worker's
income has not kept pace. This tells us that employers have the upper
hand right now. So this Subcommittee should be focused on the matters
under its jurisdiction: are the regulations designed to protect
American workers being followed? Can they be improved?
Instead, we have heard examples of the supposed heavy financial and
paperwork burden that OSHA regulations impose on small businesses. It
is true that American businesses large and small deserve clear
workplace safety regulations from their government. But the evidence
cannot be ignored that such regulations are absolutely vital to the
safety of the American worker. Every year in this country, hundreds of
workplace accidents continue to occur, some of which are playing out
before our eyes in gruesome detail. But as the fires are put out or the
toxic spill cleaned or the toll in human lives is counted, the
opponents of workplace safety laws once again take up their call of
``overly burdensome regulations.''
No price tag can be put on the life of a healthy, living American.
We cannot credibly demand that OSHA should rededicate itself to more
quickly and efficiently serving American businesses while at the same
time, extolling the virtues of the complex and time-consuming process
OSHA undertakes before any new workplace safety and health standard can
be established.
Last year, the Office of Management and Budget performed a cost-
benefit analysis of Federal regulations which showed that the benefits
of regulations far outweigh their costs. Between 1999 and 2009, the
estimated costs of regulations were between $43 billion and $55
billion, while the estimated economic benefits were between $128
billion and $616 billion. That means, during that ten year period, the
cost-to-benefit ratio of regulations was one-to-two based on OMB's
lowest estimations, and one-to-fourteen based on OMB's highest
estimations.
The data from the Bureau of Labor Statistics shows that in 2008,
5,214 workers were killed on the job in this country--an average of 14
workers per day. If the CR passes with the proposed cuts to OSHA, , it
will have to furlough all employees for the last three months of the
fiscal year, and then lay off 415 of its 2335 employees. It will cut
OSHA's funding so drastically that it will cripple its ability to
function. I intend to do all I can to prevent this from happening.
______
[Additional submissions of Mr. Walberg follow:]
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[Additional submission of Ms. Woolsey follows:]
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[Whereupon, at 11:25 a.m., the subcommittee was adjourned.]