A revolting administration - government's opinion on the proposed EPA standards

Reason, August-Sept, 1997 by Michael Fumento

Industry doesn't like the proposed new EPA regulations? What's new? Many scientists think they're unsubstantiated? So what? But the EPA's proposals are so absurd that even members of the Clinton administration are objecting.

Last November, before issuing its proposals, the EPA solicited comments from other branches of the administration. In March, via a leak, many of these comments came to light. What they showed was that the EPA had gone forward with its proposed standards even though many parts of the executive branch had expressed sometimes strong disagreement with them. To quote the Associated Press, these concerns were "only slightly less intense than the criticism from industry groups, members of Congress and state officials." Among the critics were members of the president's Council of Economic Advisers, the White House science adviser, the Commerce, Transportation, Treasury, and Agriculture departments, and the Small Business Administration. Only the Interior Department completely approved the EPA proposal.

Assistant Secretary of Transportation Frank Kruesi wrote that it was "incomprehensible that the Administration would commit to a new set of standards and new efforts to meet such standards without much greater understanding of the problem and its solutions." He also complained that the proposals would "bring a significantly larger proportion of the population and more jurisdictions under Federal oversight and procedural burdens."

The EPA claims that its proposals will have no significant impact on small businesses, but the SBA is convinced this position is absurd. "We urge the agency to rethink its position," wrote the SBA's chief counsel for advocacy, Jere Glover, who noted that it "would be a startling proposition to the small business community." The "EPA's own analysis" showed the new standards "will unquestionably fall on tens of thousands, if not hundreds of thousands, of small businesses." He wrote that at least 10 and as many as 54 different types of industries whose businesses typically have fewer than 100 employees "would face costs in excess of 10 percent of sates" due to the proposed ozone standard alone. Glover added, in bold type, "Thus, this regulation is certainly one of the most expensive regulations, if not the most expensive regulation, faced by small businesses in ten or more years."

Meanwhile, a memo from the secretary of agriculture said, "We share the concerns of the Small Business Administration regarding the potential impacts of these proposals on small businesses. Can EPA address these concerns before the final rule is issued?" It could have; it didn't.

Some objectors said not enough scientific work has been done. "I find it hard to believe that we would suffer more than we would gain by taking more time for further interagency review, consensus building and additional analysis," then-White House science adviser John Gibbons wrote. Others said the science simply didn't support the EPA position. "Current data do not support clear associations of [premature mortality] effects with either fine particles (PM2.5), inhalable particles PM10 or PM15, [or] sulfate, so that causality for the observed mortality and morbidity effects cannot be established," wrote Rosina Beirbaum, acting associate director of the White House Office of Science and Technology Policy, in a memorandum. She added, "The database for actual levels of PM2.5 is also very poor, and only a handful of studies have actually studied PM2.5 effects, per se."

The rebellion didn't end with the November memoranda, nor did the EPA's efforts to squelch it. Last December, House Commerce Committee Chairman Thomas Bliley asked the Office of Information and Regulatory Affairs (OIRA), a section of the Office of Management and Budget, for a reading on the EPA's handling of the air pollution proposal. OIRA is supposed to review economic analyses that agencies are required to prepare indicating that they have regulated in the most cost-effective manner. To help this procedure along, OIRA has prepared a "best practices" document to identify procedures that will provide the best analysis of the impact of a regulation. On January 15 the committee received a document from OIRA that was generally supportive of the EPA. But this was a revised draft. The earlier two drafts, both drawn up in early January, had horrified EPA officials.

The key sentence of the original 27-page document was, "While these analyses produce much useful information, there were several areas in which they did not fully conform to the principles discussed in the Best Practices document." (Emphasis added.) After reviewing the draft, an EPA deputy director within the Office of Air and Radiation, John Beale, wrote to the OMB economist in charge of the project, Art Fraas, complaining that the response placed too much emphasis on differences between the agencies and "could be very damaging" to the proposed rule change. He also repeatedly telephoned Mary Nichols, his direct boss. Prior to becoming the top air pollution official at the EPA, Nichols headed up the Natural Resources Defense Council office in Los Angeles. He urged her to pressure OIRA administrator Sally Katzen, and Nichols did so. Now under pressure from Beale and Katzen directly and Nichols indirectly, Fraas gave in.