Taming the EPA Regulatory Hydra: An essential first step

Foreword by Paul Dreissen

In recent years, the US Environmental Protection Agency published over 25% of all pages of regulations issued by all federal government agencies, including 13 of the 28 most costly rules. In fact, EPA has been responsible for half of all costs imposed by federal regulations on American businesses and families – often for few or no actual environmental, health or welfare benefits.

The Trump Administration has taken important steps to rein in this Regulatory Hydra. However, another anti-business, hyper-regulatory administration could reverse those gains, especially because a single Administrator runs an agency that has shown a penchant for exaggerating risks and hiding or ignoring any scientific evidence that questions its claims and proposals.

In this 2-part series, environmental and regulatory expert Bill Kovacs presents insights into the problem and offers simple, practical steps that can be taken to ensure that EPA does not revert back to its old habits. Among the most important, the single administrator should be replaced by a five-member commission that will always have minority members with access to the same facts and science as what is used by those supporting regulatory overreach. That alone would help ensure the discussion, checks and balances that have long been missing in this process.

Taming the EPA Regulatory Hydra: An essential first step

In America’s most powerful, intrusive and costly agency, power resides in one administrator

William L. Kovacs

Since President Trump’s election, the U.S. Environmental Protection Agency (EPA) has turned off its massive regulatory printing press. The nation is still here, there have been no man-made environmental catastrophes, and job creation is quickly growing now that the business community is not under the daily fear of another regulation that will slash its profits, force it to lay off employees or put it out of business.

So far, so good. However, if America is to continue its job creation activities, it needs to continue the Trump Administration’s balance between environmental protection and creating jobs and growing businesses. Unfortunately, in the future another anti-business president could be elected.

If the current administrative process and EPA’s organizational structure remain the same, the new, anti-business president could quickly stop economic progress by issuing many billion-dollar regulations that again freeze business activity, while imposing huge extra costs on consumers for everything they purchase from cars, to light bulbs, to housing – once again for little or no health or environmental benefit.

While President Trump ordered EPA to begin deregulatory activity, those efforts take years. To repeal a regulation, the agency must go through the same administrative process it went through to produce the initial regulation.

The Trump administration has started to revise the three most costly regulations: Waters of the United States, the Clean Power Plan and automobile mileage standards. This effort will last well into third or fourth year of the Trump administration – and then the lawsuits will begin. Equally important, while we need wholesale deregulation at EPA, it is likely that this administration will only make a dent in EPA’s historic overreach.

The almost fifty-year history of the EPA regulatory process is like the mythological “Hydra,” a monster with many heads; when one was cut-off, two more grew back. Such an aggressive regulatory process crowned EPA as the most aggressive regulator in history.

EPA alone has published over 25% of all the pages of regulations issued by all the agencies of the Federal Government, and almost twice as many as the much-derided IRS. Of the 28 most costly regulations issued in eight years by the Obama administration, EPA issued 13 of them.

This situation places those seeking a long-term, rational regulatory process at EPA in a quandary. Determining what can be done to tame this monster is a complex undertaking, because stopping new regulations in one administration does not prevent many more regulations from being issued in another.

However, considering EPA administrators of the past, the first change must be to ensure that no single person in the United States government can exercise the massive powers wielded by those past bosses. Such powers determine who gets a permit to operate, and who does not; what technologies a business must use; what lightbulbs are available for your homes; what gas we can buy; what chemicals can be used; where companies can mine; what local land use decisions will survive; and even where a pond can be built on private property.

While the President of the United States has massive powers over war and peace, and sets the operating philosophy of federal agencies, the EPA Administrator has direct power over the business operations … and thus the economy … of the entire nation.

EPA makes the environmental rules we live under. It is the fact finder who determines if we are breaking the rules, the prosecutor of all alleged violations – and the administrative judge who makes the findings of fact, interprets the law, and permits or punishes our actions.

It’s frightening when you think about it how much power one person can have over our lives. Yet, we don’t think about it until the agency wants to “get us.”

How should we restructure EPA to ensure the agency can still protect our environment – while controlling the massive amount of power exercised by one individual?

Several mechanisms would tame this hydra. Perhaps the most important and most effective would be converting EPA from an Executive Branch agency to an independent agency directed by five commissioners: three appointed by the party holding the presidency and two from the other party.

This commission-style agency would limit the power to act by requiring that any final regulation be approved by a majority of the commissioners. While an anti-business president would still appoint a majority of anti-business commissioners, the minority commissioners would have access to all evidence and decision-making documents, and could file dissenting opinions on all final decisions.

These dissents would allow discussion of the flaws in the majority’s reasoning – including facts, science, economics, costs and benefits.

Under the current regulatory process, there is only EPA’s final rule and a record that can run hundreds of thousands of pages. While the public is allowed to comment, the courts usually uphold EPA’s decision if it is “rational,” meaning the agency can point to some part of the record that supports its reasoning, and can conceal or ignore any parts that do not support its reasoning.

Dissenting opinions would ensure that the reviewing court sees the flaws in the majority decision. This would be invaluable for good policy making, since the minority commissioners could also review and present all the science and economics used by the majority. That would enable the minority to keep an out-of-control agency in balance.

Historically, EPA has not provided all the scientific studies and models to the public for review, analysis and comment. Having access to these documents would allow minority commissioners to point out not just flaws, but also deceptions, concealed facts and data, and hidden agendas.

Other actions would enable EPA to bring focus and coordination to the 13 separate statutes it administers, largely in the absence of any mission statement or meaningful congressional direction.

Those steps will be discussed in Part 2 of this article.

William L. Kovacs was active in national policy issues for over 40 years, as a senior vice president for environment, technology and regulatory affairs for a major business trade association, a chief counsel on Capitol Hill, chairman of a state environmental board, and a partner in several Washington, DC law firms.