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life safety code. There was no economic impact assessment. In 1974, new regulations for participation in the skilled nursing and intermediate care program for medicaid were implemented. There was no economic impact assessment. On January 1 of this year, a regulation calling for a part-time or full-time physician medical director in skilled nursing home. Again, no assessment of economic impact and the industry cannot estimate the total cost of meeting this requirement based on the regulations set forth.

In summary, the problems of Federal regulations in nursing homes in Georgia boil down to the following: (1) Federal regulations fail to consider the practicality of implementation and economic evaluation in proportion to the measured benefits. (2) Little coordination between regulatory agencies and reimbursement agencies. (3) Regulations are proposed based on reactions relating to problems in a geographical area, then applied nationwide when a need may not

exist.

RECOMMENDATIONS

An economic evaluation should be completed on all new regulations affecting nursing homes.

State agencies should have more flflexibility in considering implementation of new regulations in direct relation to the State's ability to reimburse for nursing home services under public health care. programs.

Senator NUNN. Thank you, Mr. Bishop, Mr. Fechtel, and Dr. Rogers.

I have a brief observation about the ordinary situation of Federal bureaucracy. In October 1974, the President of the United States, Gerald Ford, who had recently taken office, got on national television and made the statement that economic impact statements would be required for every Federal agency on all rules and regulations. I was conscious of that because I had a similar requirement in a pending bill that would have made that requirement law. It was a productivity bill which has since become law but the Federal administration vigorously opposed the requirement in that law of an economic impact statement, saying they had already done that by Executive order. About a year ago, in May of 1975, which was 7 months after the President of the United States, who is supposedly in charge of the executive branch, issued that directive, I had hearings to ask the agencies how many impact statements had been issued, pursuant to the order of the President and I found, lo and behold, 7 months later, not a single Federal agency. You have to ask the question if the President of the United States gives a direct order and no one in the bureaucracy has carried it out 7 months later, what kind of government do we have? Since then, I have not checked, but I have the feeling, as you point out today-all of you have touched on it-there have been very few economic impact statements issued. I will ask Bill, Goodwin to check on this.

We may want to have another hearing specifically on this subject regarding what the bureaucracy is doing to carry out the orders of the U.S. President. I am afraid it is not being done.

Thank you all for coming.

Our next witness is Mr. Herbert C. Mabry, president of the Georgia State AFL-CIO.

Mr. Mabry, we are relighted to have you with us today. I know you have been sitting there quite a while and we apologize for the time delay.

TESTIMONY OF HERBERT C. MABRY, PRESIDENT, GEORGIA STATE AFL-CIO

Mr. MABRY. I appreciate the opportunity to appear here today. You are aware of the role of organized labor and that the national policies are made from a national level.

I want to mainly come here to congratulate you and Congressman Levitas on the foresight and the willingness that you have in attacking a cancer head that is eating away at the American people. It is something that is going to cause Americans to rebel against our Governments, if something is not done about the regulatory agencies that keep eating away at the everyday lives of the working people of this country.

We are faced daily with regulations that cause businesses and management people to concentrate daily, and all of the time they have with their employees, to meeting the regulations that have been imposed by the regulatory agencies on them. This does not leave the time they need to expand their businesses and to concentrate on expanding and meeting the need of this country, which is full employment today. So I question whether or not the legislation proposed in S.2716 is going far enough.

We talk about the legislation that would give 60 days that you would have an opportunity, and would see that this was not good. They would have a right then to veto the regulations.

I question whether or not before someone even employs regulations. or tries to, on the American people and businesses that they would have to submit to Congress their proposals on the regulations, and have them approved by you, before they could even as much as have a hearing. As I said, my remarks would be brief, but that is our feeling on thern.

Mainly, I wanted to congratulate you both on your foresight, in seeing what is happening to us in America and your willingness to do something about it.

Senator NUNN. Thank you, Herb. I think we heard a lot this morning, including your testimony, that indicates the final bill for a lot of this is being paid by the American consumer and that employees are facing loss of jobs.

We have heard of the textile industry that employs hundreds of thousands in the southeast. Unless there is some reasonableness in the OSHA regulations, there will be tens of thousands of jobs lost. We had testimony here by Mr. Albert Norman, international representative of the Granite Cutters-he did an excellent job-expressing his concern for the safety of the workers and for reasonableness on application of the OSHA regulations.

We appreciate very much your being here this morning and we appreciate your comments.

Mr. LEVITAS. Thank you. I would like to also join the chairman in complimenting you on your testimony and your forthright statement of this position.

There is a need, in our society, for balance between too much government and take OSHA, for example-I thought Mr. Norman's statement was particularly pertinent because he said we need OSHA, as did Mr. McĜarity, the employer. He said what we do not need is, on the one hand, inconsistent, ineffective counterproductive enforcement, and on the other hand letting the real problems get by and nobody does anything about it.

I think what Mr. Norman was saying is-you have expressed this to me previously—that where there is a need, a big problem, OSHA seems to turn its back on it, and go after the easy pickings. Where the problem does not exist, they almost manufacture it and I think it is a credit, to the labor movement in America that it has seen where its interests lie as consumers, and as the people who produce the goods and services, that have made this country so great. I want to thank you very much for your testimony.

Mr. MABRY. Thank

you very much.

Senator NUNN. Thank you, Herb. We appreciate your time.

Our next witnesses are associated with the automobile industry in various capacities, Mr. Carey B. Paul, chairman, public affairs committee of the Georgia Automobile Dealers Association from Decatur and Mr. William F. Morie, executive vice president of the Georgia Automobile Dealers Association, Atlanta.

We welcome you both.

TESTIMONY OF CAREY B. PAUL, PUBLIC AFFAIRS COMMITTEE, GEORGIA AUTOMOBILE DEALERS ASSOCIATION, DECATUR, GA.

Mr. PAUL. Gentlemen, my name is Carey Paul and I have been a dealer in automobiles and trucks for the past 25 years. I am here today representing the Georgia automobile dealers. I am grateful for the opportunity of testifying today, for I am completely serious when say that unless some of our Nation's leaders do reverse the trend of putting more and more governmental redtape and restrictions upon the shoulders of the American business, then our capitalistic system is doomed.

I

In the last 5 years more burdensome, unrealistic and unnecessary laws have been imposed upon my business than in the previous 20. I am referring to the Truth-in-Lending, the Odometer Law, OSHA, and now the Magnuson-Moss Warranty Act. It is to this act that I would like to address my remarks.

I think the most bothersome aspect of this law and others I have mentioned is that the average small businessman does not understand the language of the rules and regulations of these laws, and the average attorney has not devoted the necessary study to understand them-and if we, the small businessman, pay our attorneys to become experts in all of these laws so that he can properly advise us as to procedure, the price becomes prohibitive.

So we muddle through, hoping that we understand enough of the rules of many laws that we won't be criminally prosecuted or civilly

forced into bankruptcy. The Magnuson-Moss Warranty Act applies to all consumer products with a cost of more than $5.00. The product can be sold as is, full warranty, limited warranty, or implied warranty.

I traveled with our director and association officers over the State for a full month trying to explain to our dealers the law and what they must do to comply-and at the end of the month we were both more confused than when we started. The law went into effect July 5, 1975 and I believe that today, 8 months later, not 10 percent of America's small businessmen are aware of the law or know how to abide by its provisions. But they will be made aware of its existence when they violate some of its provisions and are put out of business through a Federal penalty or loss of a lawsuit that's verdict calls for unreasonable punitive damages.

My cost of doing business has more than doubled in the past 10 years. A great portion of this added cost is due to paperwork and attorney fees as a result of these Federal regulations. As you well know, this increased cost must be passed on to the customer and this increases the inflation rate.

I think the net results of this act will be: (1) Raise the cost of all products covered by this act; (2) put a lot of honest businessmen with a limited formal education out of business; (3) Greatly raise the need for attorneys and their fees; (4) increase the need for employees in the Federal Agency that administers this act; and (5) catch a limited number of unscrupulous businessmen in your huge governmental net at a horrendous price for each catch.

Not the least of this cost is the belief of so many businessmen tha“ the Federal Government is his enemy-determined to tax and harrass him into bankruptcy for the benefit of an enlarged bureaucracy and the nonproductive segment of our society.

Some means must be devised whereas the Congress of the United States can have the authority to approve or disapprove the regulations written for the administration of laws passed by Congress.

I think that the voters of this country, liberal and conservative alike, must unite in requesting our elected officials to do what they were elected to do-and that is to govern and not abdicate their authority to Federal employees, who in too many cases are not qualified for the position to which they have been appointed.

I have not attempted to go into specifics of this act because, as of now, all of the rules have not been written and will not be completed for several months. I have already changed the language on the forms that I use in my business several times, and except to change them several more times before the final rules are written.

Senator Nunn. I think your S.2716 would go a long way in providing a vehicle with which Congress can regain some control over the Federal agencies that exert so much influence on the daily lives of so many Americans.

Senator NUNN. Thank you very much, Mr. Paul. I am not nearly as familiar with the Moss-Magnuson Act as I would like to be. I would like to get more up to date on it because I know it will probably cause a tremendous amount of problems. Mr. Levitas is probably more familiar with it at this stage than I am.

Congressman LEVITAS. Thank you very much for that helpful testimony. I know that you and the Georgia automobile dealers are very much on the receiving end of a lot of regulations and know what the problems are and some of them may appear to be intended to help the consumer, actually hurt him.

Now, the Magnuson-Moss Act is an example. Am I correct that the cost of the provisions of this act, dealers are restricting their warranties to a lesser degree of warranty than they previously had in order not to get linked with the fuel war between corporations.

Mr. PAUL. Yes, sir, prior to this act, we all had different type warranties but we did have a warranty. Now the majority of the dealers are selling used vehicles as is because they do not know how to comply with the rules set forth for giving a limited warranty.

Congressman LEVITAS. So instead of protecting the public as a result of this act by giving them more warranty protection, the end result is they are getting less protection and that is very similar to this Erisa thing that Senator Nunn referred to before?

Mr. PAUL. That is correct.

Congressman LEVITAS. One other question that I wanted to put to you or at least comment on. You make the statement that the voters of this country, liberal, conservative alike, must unite, and remember, our officials do what they are elected for, that is, govern, and not abdicate their authority to Federal employees. Of course, Senator Nunn and I fully subscribe to that. You may be interested to know that what you have said is being reflected in the Congress.

For example, people on the Senate side, legislation of this type is being sponsored by some one with conservative credentials, as distinguished as our own junior Senator and on the other, as Senator Abourczk's who is said to be of-in the House of Representatives, these things may not be familiar to you as Members of the Senate but this is the Senate and Congressman from Louisiana, James Wagner, considered the leader of the Conservative Southerners, who is a cosponsor of this legislation and Congressman Michael Harrington a Socialist-Democrat, who is a cosponsor of this legislation.

It is not a Liberal-Conservative issue, it is a question whether we are going to restore constitutional government to the United States and when we hear from people such as you and when we hear from people such as representatives of labor, as we will soon hear from representatives of government, this is not a talking problem, this is something we have got to get on with and I am very much appreciative of your willingness and interest to come and participate. Senator NUNN. Thank vou.

Our next witness is William F. Morie.

TESTIMONY OF BILL MORIE, EXECUTIVE VICE PRESIDENT, GEORGIA AUTOMOBILE DEALER'S ASSOCIATION, ATLANTA, GA.

Mr. MORIE. Gentlemen, my name is Bill Morie, executive vice president of Georgia Automobile Dealers Association. I appear today on behalf of over 500 franchised automobile dealers in the State of Georgia.

First, let me thank you for allowing us to testify before you today.

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