EPA’s Assault on State Sovereignty

Is the title of a stinging new report by the American Legislative Exchange Council.  For those who are unfamiliar with ALEC, it’s a non-profit composed of legislators, businesses, and foundations, and is strongly supportive of state rights, free-markets, and limited government.  It’s a good organization and on balance promotes thoughtful ideas and policies on more effective government.  The report itself was authored by William Yeatman of the Competitive Enterprise Institute (CEI), whose tagline is “Free Markets and Limited Government” and leans notably libertarian.  So, right out of the start-gate, one can appreciate the underlying anti-EPA biases that may emanate from its pages. The raging battle is particularly acute with respect to national energy policies and air regulations (think climate change regulations), as reflected in a July 10 CEI report titled EPA’s Woeful Deadline Performance Raises Questions About Agency Competence, Climate Change Regulations, and “Sue and Settle”.  Even the U.S. Chamber of Commerce recently weighed in with a report challenging EPA’s long-standing claim that more regulations yield more jobs.  Make no mistake, this reflects an all out insurrection against a powerful and oft tone-deft Agency by freedom-loving, large-government hating groups.

For those inclined to dismiss anti-EPA reporting, notwithstanding some of the inherent biases, these reports are important to read and understand. Principally, the reports reflect a palpable, growing discontent with an ever-expanding and often intrusive federal bureaucracy that is slow to embrace vital change and is perceived, rightly or wrongly, as far removed from real struggles experienced by communities across the Nation.  The stated problems I believe underscore the very real need for a new, revamped EPA.  I commend these reports to EPA’s newest Administrator, Gina McCarthy, for spare reading.

As one who once served at EPA and strongly values its mission, I am equally comfortable praising the Agency for the good it does as I am criticizing it for its short-comings.  In order for our Nation to make meaningful progress toward restoring and protecting the environment – and fixing our many wicked problems – this federal-state partnership, embodied in the delicate dance of cooperative federalism, has got to work.  And it must work better than it’s currently working.  For cooperative federalism to work, not only is a strong EPA essential, but the States must be willing to dance and be held accountable for their performance and results.  While certain States are better dancers than others, some are less smitten than others with their 900 pound waltzing partner.

I’ll have more thoughts on what a futuristic, meaner and leaner EPA might look like, but for now, let’s just say EPA’s challenge stems, in part, from the fact that it neither likes Congress nor does it trust the States.  Thus, the Agency’s default tendency is to ignore the Legislative Branch, when it wants and can, co-opt the Judicial Branch, when it wants and can, and micro-manage the States, when it wants and can.  While one might counsel the Agency in dealing with the States to heed Teddy Roosevelt’s foreign policy advice, speak softly and carry a big stick, in dealing with Congress, I’d recommend, speak often and exhibit more humility.  Regulating isn’t easy folks.  It’s difficult because of the many parties to satisfy, and more often than not you won’t satisfy any.

One criticism leveled by CEI is EPA’s seeming inability to adhere to Congressional deadlines.  This is not a problem entirely of EPA’s own doing, but is in part a reflection of resource constraints imposed by external forces not always within the Agency’s control.  Although without documented facts to back it up, I would estimate that nearly half of EPA’s resources are expended on programs or initiatives that are court-orded and dictated to it as the result of third-party litigation.  Admittedly, some of this litigation is in fact orchestrated by EPA and others through the practice of Sue and Settle, but not the vast majority.  EPA gets sued a lot – from all sides, pro-environment, pro-business.  And responding to and resolving litigation often involves charting a course that Congress neither intended nor could have anticipated.  For example, 1972, when Congress first enacted Section 402 under the Clean Water Act, requiring regulated entities to operate under federal discharge permits, there were only several thousand permitted entities.  However, today, the 402 program has grown to nearly 500,000 permitted entities, not by EPA’s own choosing, but due in large measure to litigation and courts compelling EPA to expand the scope of its permit program to sources that historically were beyond the Act’s reach.  Keep in mind that in 1972, Congress’ stated goal in Section 101(a)(1) of the Act was to eliminate the discharge of all pollutants into navigable waters by 1985.  A very lofty goal, some might call unrealistic, but one that has yet to be achieved.

As an institution, EPA has resisted the expansion of the 402 permit program because, one, it doesn’t have the resources to adequately manage and oversee an even larger federal permit program and, two, the program is not the best and most effective tool to address many of the sources of pollution it now regulates.  An EPA Office of Inspector General report issued this month speaks directly to the serious management challenges facing the Agency, made even more difficult by budget cuts.  And just today, a House Appropriations Subcommittee voted to cut EPA’s funding by an additional 34 percent in 2014.

But back to the criticism of EPA ignoring Congress.  I recall one exchange with a veteran EPA career water official, for whom I have great respect and admiration, where I voiced similar concerns about a deadline under the Clean Water Act that the Agency had blown by nearly ten years.  I paraphrase, but the gist of the response was “Sure, we’re aware of it.  We just have too much already on our platter – we’ll get to it sooner or later after someone sues us for missing the deadline.”  Needless to say I was a bit taken aback by his somewhat lackadaisical response.  But it’s a sentiment that I think is telling of the Agency and how it operates writ broadly.

Admittedly it’s unfair to paint EPA with a broad brush, because there are many good people, leaders and managers at the Agency who everyday endeavor to do the right things and do things right.  And many who understand and respect adherence to the law and congressional oversight.  But the Agency is tainted by a culture that bristles at being told what to do by others and resents Nosy-Nellies (e.g., Congress and FOIA proponents such as Chris Horner) who dare pry into and question the Agency’s inner-workings, decisions, and policies.  Case in point.  Having served briefly as the head of the Agency’s Congressional Office, I was shocked and disquieted upon learning of a significant backlog in responses to Congressional inquiries.  Hundreds of unanswered letters, some nearly two years old, languished within the bowels of Ariel Rios (recently renamed the William Jefferson Clinton Federal Building).  The explanations for the backlog were numerous, ranging from carte blanche refusal to provide details on controversial programs to a careless apathy, bordering on a cultural disdain, involving oversight.  The separation of powers, mind you, imparts important constitutional limits, but to his credit, then Administrator Steve Johnson, recognizing the perils of an agency thumbing its nose at members of Congress and the need for greater institutional comity – oh, and yes, trust – asked me to help reduce the backlog – we did so, and we did so with dispatch.

The Agency’s relation with the States is, at times, equally tumultuous, swinging back and forth like a pendulum from good to bad, indifferent to engaged.  EPA fondly refers to the States as their co-regulators – it’s nice gesture.  States are increasingly frustrated by federal environmental mandates and clamor for greater “flexibility” and “innovation” in the face of stiff economic headwinds and less federal funding.  Claims abound of environmental laws being too costly, killing jobs, and destroying our standard of living.  Maybe so, maybe not.  Regardless of the basis of these claims, greater flexibility is needed and should be granted where it can.  But what many don’t appreciate is that federal law, such as the Clean Air and Water Acts, establish very clear legal standards and boundaries within which EPA must operate and, in turn, EPA must compel the same of those States charged with carrying out those laws.  Moving past that small legal hurdle, the Agency does possess some latitude to grant States and regulated entities more flexibility to achieve compliance with environmental laws and make environmental progress.  The problem, however, is that EPA doesn’t fully trust its dancing partners, environmental groups don’t trust EPA (or the business community for that matter), and the Agency doesn’t have adequate oversight resources, which forces the Agency to clutch its dance partners too tightly, tripping and stomping all over each others’ toes.  This is a problem and needs to be fixed.

So as Gina McCarthy is handed the reigns of an Agency 17,000 employees strong, with an $8.3B annual budget, a few high level observations and best wishes for the dancers:

– Through mutual respect of their sovereign roles, EPA and the States must learn to trust each other before the dance of cooperative federalism can be perfected.
– Stepping on toes is an important part of learning to perfect the dance.
– A strong EPA is essential to providing national consistency for achieving environmental goals established by Congress.
– EPA can best support States by providing national leadership on the development of standards, providing rigorous science, funding, and supporting environmental monitoring.
– EPA leadership must work smartly and cooperatively with States who truly are the engines of ingenuity and who, when unleashed, will achieve environmental performance.
– The States must hold themselves accountable for finishing the dance; otherwise, EPA will and should.
– In an increasingly fiscally constrained world, the EPA must take on a new role and persona of National Inspector General, shining the light on poor performing States and, where appropriate, be prepared to step in and directly implement the program.  This is consistent with EPA OIG’s recommendation to EPA in the report noted above:  “Develop an escalation policy to address state performance issues including exploring mechanisms, such as utilizing state grant funds to directly implement programs if appropriate.”

By keeping these principles in mind, relaxing the Agency’s death-grip on its dance partner, trusting and holding each other accountable for the end results – and perhaps hiring a marriage counselor – I’m confident the quality of dance will improve along with environmental performance.

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