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EPW POLICY BEAT: THE COMMON THEME: STOP EPA
March 31, 2011

Posted by David Lungren David_Lungren@epw.senate.gov

EPW POLICY BEAT: THE COMMON THEME: STOP EPA

Link to Inhofe-Upton Energy Tax Prevention Page

As the Senate turns to vote on the McConnell-Inhofe amendment, several "alternative" amendments have emerged.  They are a great service to this debate.  They have shown that EPA's cap-and-trade agenda will, among other things:

  - harm farmers, manufacturers, consumers, and small businesses;

  - undermine America's economic competitiveness;

  - allow California bureaucrats to decide what kind of car you drive; and

  - allow unaccountable EPA bureaucrats to make national energy policy.   

Yet, while the Rockefeller, Baucus, and Stabenow amendments concede each of these points, they leave EPA's cap-and-trade regime largely in place.  Voting for these amendments, then, is a vote for higher prices for gasoline and electricity, and an unprecedented expansion of EPA's regulatory authority. 

Nonetheless, we welcome the amendments.  The fact that they were introduced at all reveals, among other things, the overwhelming bipartisan consensus in the Senate to stop, in some manner, EPA's cap-and-trade agenda. A cosponsor of the Rockefeller amendment said it best on Tuesday:

This unprecedented, sweeping authority over our economy at the hands of  the EPA is at the heart of the concern expressed by Senator McConnell, and ultimately, whichever way one ends up voting on his amendment, that common concern defines this debate. [Emphasis added]

That common theme was expressed in a letter by several supporters of the Rockefeller amendment to EPA Administrator Lisa Jackson in 2010.  They wrote:

We remain concerned about the possible impacts [of EPA's regulations] on American workers and businesses in a number of industrial sectors, along with the farmers, miners, and small business owners...

This concern was expressed by a Rockefeller supporter on Tuesday:

[EPA's] regulatory framework is so broad and potentially far-reaching that it could eventually touch nearly every facet of this Nation's economy, putting unnecessary burdens on industry and driving many businesses overseas through policies that have been implemented purely at the discretion of the executive branch and absent a clearly stated intent of the Congress.

So what are supporters of the Rockefeller amendment telling us?  EPA's cap-and-trade agenda will: 1) harm workers, farmers, manufacturers, and small businesses; 2) reach into every corner of the economy; 3) undermine competitiveness and send jobs overseas; and 4) be implemented without Congressional authorization.

Yet, how would the Rockefeller two-year delay address any of this?  The answer: it wouldn't.

Then there's the Baucus amendment.  Why would one need an amendment that exempts farms and small businesses from EPA's greenhouse gas permitting regime?  Start with the Farm Bureau.  In recent testimony, it stated that "farmers and ranchers are adversely affected economically by EPA regulation of greenhouse gases" because:

Costs incurred by utilities, refiners and manufacturers to comply with greenhouse gas regulations will be passed along to their customers, including farmers and ranchers, resulting in higher costs of production. Farmers and ranchers generally cannot pass those costs on to their consumers.

The Farm Bureau also pointed out that:

Many farmers and ranchers will be required to obtain Title V operating permits and New Source Review construction permits under thresholds required by the Clean Air Act. The Department of Agriculture estimates that approximately 90 percent of the livestock industry is above the Clean Air Act thresholds required to be permitted.

What about small businesses?  According to the National Federation of Independent Business,  "EPA's regulation of GHG emissions from stationary sources will have a significant economic impact on its small business members..."

So what to make of the Baucus amendment?  It concedes exactly what the Farm Bureau and NFIB have argued about EPA's cap-and-trade regime: it will harm farmers and small businesses. 

Finally, we have the Stabenow amendment.  What's new here is a provision that protects the auto industry.  But protect it from what?  From EPA's enabling of the California Air Resources Board, or CARB, which is threatening drastic, unrealistic cuts in CO2 emissions from cars and trucks-cuts that would, in effect, establish fuel economy standards for the entire country.  Here's what the Auto Alliance, the car industry's trade group, thinks of California's plans:

[California] cannot appropriately or adequately consider the consequences of its actions on critical national interests such as jobs, the economy, costs to consumers, motor vehicle safety, or consumer acceptance of the types of vehicles that their standards would require manufacturers to make.  

Furthermore, the Alliance points out that CARB's greenhouse gas standards would ignore the "effect on the auto industry and other states or even on the national economy."  As the Auto Alliance argues, CARB:

does not need to take into account the economy or jobs in states like Michigan, Ohio, Kentucky, Missouri, Texas, Alabama, Indiana, Oklahoma, Wisconsin, North Carolina, or other states with significant auto industry-related employment.

So what do we learn from the Stabenow amendment?  EPA exacerbates the CARB problem, which makes drivers all across America beholden to whims of bureaucrats in Sacramento.  Auto workers in Michigan, Ohio, Wisconsin, and the rest of the Heartland: beware.

To sum up: the Rockfeller-Baucus-Stabenow amendments make plain how EPA will harm particular groups and sectors, but they don't remove the harm:

The Baucus amendment exempts farmers and ranchers from certain GHG permitting requirements, but it does nothing to stop EPA regulations on power plants and refineries-which means farmers and ranchers still pay more for diesel and fertilizer. 

The Stabenow amendment claims to establish one national standard for fuel economy.  But it lets EPA continue regulating greenhouse gases from cars and trucks.  That only creates potentially conflicting fuel economy standards set by the National Highway Traffic Safety Administration (NHTSA).  So in the end we have two standards, not one.

The Rockefeller amendment would create more regulatory uncertainty and construction delays.  It  would not lead to approval of pending construction permits.  The opposite is true: permitting authorities would simply forgo action on CO2 requirements until the two-year delay expired.  In effect, then, Rockefeller creates de facto construction bans.

So the path ahead is straightforward: If you want to avoid construction bans; if you want to prevent energy taxes on farmers, consumers, and small business; if you want to stop EPA's unprecedented regulatory expansion; if you want to block California from deciding what kind of car you drive; and if you want Congress to decide the nation's climate change policy, then vote for the McConnell-Inhofe amendment. 

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