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Business Looks to Panel's New Leader for Relief

By Cindy Skrzycki
Tuesday, April 12, 2005; Page E01

Rep. Candice S. Miller is a Republican from Michigan, where high-paying manufacturing jobs are disappearing. Now she is also chairman of a House subcommittee that she thinks can address part of the problem: the cost of regulation and whether some rules have outlived their usefulness and cost-effectiveness.

"My approach is the largest room is the room for improvement, particularly when it comes to regulation," said Miller, new chairman of the House Government Reform subcommittee on regulatory affairs. Since taking over the subcommittee in January, she has been meeting with business groups that have described what they say are their regulatory burdens.

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Not surprisingly then, her first hearing today is on the impact of regulation on U.S. manufacturing. It will assess the Bush administration's initiative to support the manufacturing sector, including a recent announcement by the Office of Management and Budget that it would oversee agency efforts to modify or eliminate 76 rules that were nominated for special attention, mostly by business groups.

The lead witness is former Michigan governor John M. Engler, with whom Miller worked for eight years when she was Michigan's secretary of state. Engler is president of the National Association of Manufacturers, which has a great interest in reducing regulation.

Al Frink, the Commerce Department's assistant secretary for manufacturing and services, and John D. Graham, chief reviewer of regulations at the White House budget office, are also scheduled to appear.

Business contends that the costs of regulatory compliance, as well as high energy and legal costs, hamper U.S. manufacturing competitiveness.

Sidney A. Shapiro, a law professor at Wake Forest University, is scheduled to testify at the hearing and take the opposing viewpoint. He said there is no evidence that regulation hampers competitiveness because it amounts to a relatively small amount of a businesses' bottom lines -- especially for large companies. "No one picks up their factory and moves overseas to save a half-percent in costs," Shapiro said.

Manufacturing has been expanding for the past 22 months, according to the Institute for Supply Management, which tracks the figures. The NAM's blog, reporting on its recent board meeting, said, "The mood was very good, and business appears to be good for most all manufacturers. We heard the phrase 'best year on record' more than once from manufacturers large and small."

Miller's predecessor, retired representative Doug Ose, a California Republican, emphasized oversight of the effects of regulation on small businesses and the administration's track record in meeting paperwork reduction goals and keeping track of the costs and benefits of federal rules. The subcommittee's jurisdiction over energy and natural resource issues were split off to another subcommittee.

Miller is also a member of the House Armed Services and House Administration committees and said she was a "sporadic" attendee at past subcommittee hearings. She has hired a staff of six, including former representative Edward L. Schrock, a Virginia Republican, as staff director, and said she would like to come up with a "dirty dozen" or half-dozen rules to examine closely. She wants economic analysis to back up claims that rules are burdensome, she said, "because we aren't going to throw out all the rules."

"We expect Chairman Miller to be a sharp, tough and imaginative leader in regulatory affairs. We also look forward to working with her to lift the burden of over-regulation on American business," said OMB's Graham.

The business community certainly has plenty of suggestions.

The U.S. Chamber of Commerce wants the panel to require federal agencies to do a formal review of their past rules with an eye to eliminating some of them. "The easiest way to get this done is oversight of the agencies," said William L. Kovacs, the chamber's vice president for regulatory affairs. The group hopes Miller will examine how consent decrees that settle lawsuits often spawn regulation and how the regulatory process will be affected by issues such as e-government.

Some of these issues will come up as Miller's subcommittee considers reauthorizing the Paperwork Reduction Act. The law, which sets goals for controlling paperwork generated by laws and rules, could be a vehicle for fulfilling some of business's wish list with little fanfare.

Business interests think they have an ally in new staff director Schrock, who had a strong conservative voting record in his two terms. They view him as enthusiastic and approachable, especially since, as a member, he served on the Government Reform Committee. He was not available for an interview.

The public interest community views the Miller regulatory agenda as extreme and cautions that it is mobilizing to fight business-backed initiatives that would limit health and safety regulations or create procedural roadblocks to regulations -- like sunset reviews.

OMB Watch hopes to get on the calendar of Miller and Schrock, after an earlier meeting with Schrock was canceled. "The ball is in their court," said Gary D. Bass, executive director of OMB Watch. "We offered to meet and sort out where there might be common ground or bitter fights."

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