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Baker Ready-Mix chief enlightens lawmakers on ills of regulations ‘swarm’

Sources: National Ready Mixed Concrete Association, Silver Spring, Md.; U.S. House Committee on the Judiciary; CP staff

In a late-October House Judiciary Committee hearing, New Orleans independent ready mixed producer Arnold Baker testified about the negative impact of recent rules or laws emanating from federal agencies and Congress. “A swarm of regulations coming out of Washington are threatening [our] ability to stay in business … Sweeping rules will make it much more difficult for me to sell concrete, give health coverage to my employees, and grow jobs.

“Federal agencies need to do a much better job of understanding the full impact their regulations will have on businesses and jobs—along with possible alternatives—before they impose the most costly new rules,” Baker affirmed. “Businesses like mine, who already fight to stay on top of the sea of existing regulations, need to have certainty that new rules are well-conceived and supported by adequate data.”

Committee Chairman Lamar Smith (R-21-TX) sought feedback on H.R. 3010, the Regulatory Accountability Act of 2011. Baker told he and his colleagues how the legislation, which has been introduced with bipartisan support in the House and Senate, “would put balance and accountability back into the federal rulemaking process, without undercutting vital public safety and health protections. The bill focuses on the process of developing regulations. Better process will produce better substance.”

He detailed how the Regulatory Accountability Act provisions would affect the development of new Environmental Protection Agency rules that stand to disrupt concrete producers’ supply chains or add costs difficult for the market to absorb: Cement Maximum Achievable Control Technology, Disposal of Coal Combustion Residuals from Electric Utilities, Greenhouse Gas, and Nonhazardous Solid Waste Definition.

“The combination of [these] four EPA rules is anticipated to add as much as $20 to $36 to the cost of every ton of cement that Baker Ready-Mix purchases. This represents a 33 percent price increase for one of my company’s most critical manufacturing components. Because we are a small business, we can’t spread our increased costs over a large number of projects the way larger companies can. When you consider that a difference of as little as $1 per ton of concrete can determine whether my company wins or loses its bid for a particular project, a cost increase of this magnitude would be disastrous.”

Regarding impact of the March 2010 health care law, Baker candidly observed, “The cost … will be so high that we’ve had to look at restructuring the company to stay below the 50-employee threshold so that we can still offer health care to our employees on our own terms.”

He noted how Baker Ready-Mix has gone from five employees at its 2003 founding to nearly 60 today, the growth reflecting the company's role in New Orleans’ rebuilding. He is the sixth NRMCA producer member since June to appear before a Congressional committee or caucus gathering, or a federal agency meeting to assess current legislation or proposed rules.