STOP THE EMPTY RHETORIC ON REGULATORY REFORM

By SBE Council at 20 March, 2015, 8:40 am

ADMINISTRATION NEEDS TO WORK WITH CONGRESS TO HELP SMALL BUSINESSES

By Karen Kerrigan-

For small business owners and employees, this was a good week in Congress for regulatory reform. On March 18, the House passed two important bills to increase transparency and sound science at the Environmental Protection Agency: the bipartisan EPA Science Advisory Board Reform Act (H.R. 1029) and Secret Science Reform Act (H.R. 1030). Also this week, Senators John Thune (R-SD) and Joe Manchin (D-WVA) introduced the Clean Air, Safe Economies (CASE) Act (S. 751) to stop EPA from promulgating and rushing the most expensive rulemaking in history.

SBE Council and our Center for Regulatory Solutions (CRS) has followed these issues very closely; in fact, Chief Economist Ray Keating testified before the House Science Committee on March 17, regarding the harsh and costly impact that would result from EPA’s ozone proposal. Last year, Ray testified before the same committee on the Secret Science Reform Act — and described how small businesses, subject to many burdensome EPA regulatory requirements, need greater transparency and sound science in federal rulemakings.

We strongly encourage the Senate to take up the EPA science reform bills, pass them quickly, and send them to President Obama’s desk. These bills follow the principles outlined in President Obama’s Executive Order 13563, “Improving Regulation and Regulatory Review,” which was issued with great fanfare, but has been routinely ignored by the Obama Administration and the EPA. As EO 13563 states: 

Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation. It must be based on the best available science. It must allow for public participation and an open exchange of ideas. It must promote predictability and reduce uncertainty. 

Yet actions by the Administration in most major rulemakings show the EO to be an empty and laughable gesture. Just recently, as the EPA science reform bills went to the floor, the White House issued veto threats, arguing preposterously that the bills would “impede EPA from using the best available science.” In fact the opposite is true, and the President should abandon his baseless opposition and sign these bills into law if given the opportunity. (See my detailed response to President Obama’s veto threat here.)

We applaud Senators Thune and Manchin, and Rep. Pete Olson (R-TX) and Bob Latta (R-OH) in the House, for introducing the CASE Act. The bill would prohibit EPA from revising ozone standards until areas in “non-attainment,” or communities where ground-level ozone levels are above the current standard of 75 parts per billion (finalized in 2008) — come into compliance.

Recall that EPA only last month issued implementation guidance to states for the 2008 standard.

No matter: the agency is plowing ahead with another onerous ozone rule, forcing local communities, and the small businesses that provide jobs and economic opportunities, to pay for the most expensive rulemaking in history — over $1 trillion annually between 2017 and 2040, according to NERA economic consulting. To help reduce these costs in the future, the Thune-Manchin bill sensibly requires the EPA Administrator, when setting new ozone standards, to consider costs and feasibility of a lower standard, which is prohibited under the Clean Air Act.

In a support statement for the CASE Act, I said: “More businesses are exiting our economy than being created, and the EPA will only accelerate this economically painful trend if the proposed ozone standard is allowed to move forward.  The legislation offered by Senators Thune and Manchin is critical to new business formation and job growth in America.  There has to be a level of common sense brought to bear on EPA’s ozone rule, and the CASE Act does just that.”

The charts below, courtesy of Sen. Thune’s office, demonstrate the economic catastrophe pending if the EPA proposals in allowed to move forward:

EPA: Areas in Non-attainment Under the Current Standard

NAM: Areas in Non-attainment Under the Projected 65 ppb Standard

Red Areas= Direct Air Monitoring

Orange Areas = EPA’s Expanded Modeling Methodology

As noted in a CRS blog post on March 17th, comments from all over the country show great concern, even outrage, over EPA’s ozone rulemaking. If the President lived up to his rhetoric, small businesses wouldn’t be forced to spend time and energy worrying about complying with out-of-control regulations. It is important to keep up the pressure on Washington, specifically on President Obama and the EPA, to ensure the rulemaking process follows what the president outlined in his EO, so that small businesses and entrepreneurs are free to innovate, invest, compete, and create quality jobs.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council (SBE Council). The Center for Regulatory Solutions is a project of SBE Council.