STATEMENT OF ERIC SCHAEFFER
Consultant, Rockefeller Family Fund
Before the Superfund, Toxics, Risk and Waste Management Subcommittee
Senate Environment Public Works Committee
March 12, 2002
Thank you, Madame Chairman and members of the Subcommittee, for inviting me to testify at today’s hearing on EPA’s enforcement program. I am presently a consultant to the Rockefeller Family Fund, but for the past five years was Director of the Office of Regulatory Enforcement, managing the civil enforcement program for federal air, water, and hazardous waste laws, and other environmental statutes. As you might expect, I have some opinions on the value of federal enforcement of these laws, but will make three points in my testimony that may help you to draw your own conclusions:
· EPA and states should not be pitted against each other in a battle for scare resources, when both levels of government have an essential role to play in protecting the environment. First, the civil enforcement budget for all programs except Superfund has been cut sharply between fiscal year 2001 and the 2003 budget proposal. The number of full time employees for inspections and case development has declined from 1,465 in FY 2001, to 1,343.5 in FY 2002, to 1,266.6 in the FY 2003 proposal, for a 14% decline in two years. Contract resources used for field sampling, inspections in key programs like fuel standards, and expert witnesses has dropped even faster, from 12.4 million in 2001 to 10.1 million in the 2003 proposal, over a 20% decline. These projections can be easily verified by referring to the Agency’s own operating plan, which establishes the spending ceiling for all EPA programs. These cutbacks accelerate a trend that began in the late nineties, when Congress disallowed inflation adjustments to the enforcement budget for several years in a row.
Congress appeared to reject this trend in the FY 2002 Appropriations Act, when it directed EPA to, “restore federal enforcement positions in accordance with the fiscal year 2001 Operating Plan.” That did not happen. Instead, the FTE’s for inspections and civil enforcement for programs other than Superfund were cut by nearly 130 positions below last year’s level.
These cuts do not come from shedding “surplus” vacancies the Agency was somehow unable to use, as some have suggested. They reflect a planned reduction in hiring ceilings and contract dollars that is being phased in over a two-year period. While no staff have been laid off, EPA enforcement has been unable to fill vacancies for those who have left voluntarily, and likely will have to shift some staff to non-enforcement functions to manage the reductions in the FY 03 budget if it is approved. It is the Administration’s right to propose cuts in the federal enforcement budget, but those decisions ought to be in plain view.
Next, the consequences of reducing federal enforcement ought to be made clear. Nearly two years ago, I wrote a memorandum to the Assistant Administrator detailing the effects of restrictions that Congress placed on our budget in FY 2000. These effects include:
The memo listed specific cases affected by these budget cuts, and it was based on extensive consultation with my program managers or staff. It might be useful to ask the U.S. General Accounting Office to update that review. In fact, last year, the GAO recommended that EPA not cut the enforcement budget without “more complete and reliable workforce-planning information than is currently available on the enforcement workload and the workforce capabilities of EPA’s 10 regional offices.” No such review has been conducted to justify the latest budget proposal.
EPA has taken a number of steps to try to get more value out of the diminished resources for federal enforcement. These include a policy that encourages the voluntary disclosure and correction of violations, which has won praise from the Washington Legal Foundation and helped thousands of facilities returning to compliance without litigation. Almost all cases are settled out of court, with penalties only a fraction of the amounts we are authorized by Congress to demand. The Agency has focused its scarce resources, appropriately in my view, on several key areas where violations result in the most environmental damage, and tried to make its national experts more geographically mobile to work on the most important cases. It has pursued global settlements that cover many facilities, and which offer economies of scale to both the government and companies that enter into such settlements. No doubt there is much room for improvement, but there is a limit to how far improved efficiency can compensate for budget cuts in a program that is already stretched so thin.
I want to turn next to the argument that the states will pick up any slack left by cutting the federal enforcement program. You will have to draw your own conclusions, but I would ask that you consider the following:
Many programs are still managed exclusively by the federal government. These include fuel standard and vehicle emission controls, wetlands protection in 48 states, pesticide registration requirements, right-to-know programs, the Toxic Substances Control Act, the Clean Water Act in six states C the list goes on. The federal government still enforces these laws B the state lack the legal authority to assume this responsibility.
EPA and states are gradually working toward a practical division of labor. EPA, for example, has a growing docket of large cases that focus on multi-state corporations, or transboundary pollutants. These cases can be more efficiently handled by the federal government, although many states join these suits as co-plaintiffs. For example, last year we successfully reached settlement with companies representing almost a third of U.S. refining capacity, that will reduce nitrogen oxide and sulfur dioxide pollution by over 150,000 tons per year.
Finally, it has to be said that some states still lack the capacity, sometimes through no fault of their own, to enforce certain requirements. EPA has had to step in behind states that face sudden shortfalls in funding, or a tough polluter that has tried to use its political influence to avoid complying with the law. A recent letter from the Environmental Council of States to Senator Jeffords notes that state environmental agencies are facing cuts of 6% or more this year. The same letter questions, I think it is fair to say, the wisdom of pitting two underfunded enforcement programs -- state and federal -- against each other when both have so much to do.
You sometimes hear today that we have moved beyond the need for enforcement, because companies have internalized environmental values and serious violations occur about as often as sharkbite or lightning strikes. That is not my experience. Companies are under enormous pressure in today’s highly competitive global marketplace. They are bought and sold quickly, sometimes by companies headquartered in other countries, broken into component parts and reassembled, and expected to turn a profit in short time frames. These companies are ultimately run by imperfect human beings, not abstract “management systems,” and the temptations to cut environmental corners in the face of such pressure should not be surprising.
While EPA has encouraged voluntary auditing as a way to help check these impulses, the Enron debacle illustrates the limits of self-policing. Federal enforcement can help to keep the marketplace honest, and I think the American public and responsible businesses instinctively understand that.
In the end, I think the question is not whether EPA or the states will enforce the Clean Air Act, the Clean Water Act, and hazardous waste laws; that’s a false conflict, as there is more than enough to do for all of us. The real issue is whether the laws that protect public health and the environment will be enforced at all; whether, in Teddy Roosevelt’s words, compliance will be demanded as a right, not asked as a favor. We can no longer take that question for granted.
Thank you again for your efforts to examine the Administration’s environmental enforcement program, and I would be pleased to answer any questions you may have.