Before heading out of town for recess, the Subcommittee on Energy and Power of the House Energy and Commerce Committee held a hearing to review the Environmental Protection Agency’s (EPA) regulatory activity during the Obama Administration.
Amid questions from subcommittee members on carbon sequestration infrastructure, regulatory interference in natural gas flaring, and backdoor cap-and-trade proposals, one issue from the hearing—the EPA’s negligence in calculating the economic effects of its regulations—should give pause to even the most environmentally disinterested American.
Propagating the economic benefits of its regulations is not out of the ordinary for the EPA. In fact, in her opening statement, EPA witness Janet McCabe, lauded the economic benefits of the EPA’s ballooning regulatory portfolio. At one point, McCabe contended that over the past four decades the EPA has cut pollution by 70 percent while the size of the American economy has simultaneously tripled.
Several subcommittee members were unconvinced of the EPA’s economically favorable record. And regulatory research from NTUF validates the subcommittee’s concerns of job loss and broader economic damage from EPA regulations. Representatives Morgan Griffith (R-VA), David McKinley (R-WV), and Bill Johnson (R-OH), questioned McCabe at length on how the EPA sees positive economic outcomes from its pollution regulations while thousands of the representatives’ constituents employed by the energy sector have lost and continue to lose their jobs.
Research on harmed wages and small businesses management from the American Action Forum also throws cold water on McCabe’s assertions. Certainly the EPA is unable to single-handedly cripple the American economy. And current economic stagnation trends notwithstanding, sectors like manufacturing and information technology are experiencing marked growth. Nonetheless, multi-billion dollar annual compliance costs imposed on businesses across the nation exact a significant economic toll and are a far cry from responsible or beneficial regulatory behavior.
The EPA regulates without considering economic consequences. Despite being required to consider the effect of new regulations on employment under Section 321(a) of the Clean Air Act (CAA), which states that the EPA “shall conduct continuing evaluations of potential loss or shifts of employment” that could result from pending or existing regulations, the EPA routinely flouts this basic obligation and rarely conducts these assessments. Several subcommittee members demanded answers from the agency, but McCabe declined to directly comment on the EPA’s Section 321(a) responsibility while the issue is being litigated in Murray Energy Corp. v. McCarthy.
Environmental problems do not exist in a vacuum, especially when there is a legal mandate in place to assess such demerits. The EPA’s recklessness is a patently dangerous way to regulate. Absent analysis on employment effects, any job creation from EPA regulation credits sheer luck, not prudent decision-making. Job creation and a healthy economy are not the payoffs of a blind regulatory gamble and can only be the rewards for cautious and calculated rulemaking.
Zack Voell is an Associate Policy Analyst for the National Taxpayers Union Foundation.