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Wednesday, May 18, 2011

EPA Non-Compliant with Nation’s Economic Growth Priorities

Late last week, all federal agencies were required to submit plans for compliance with President Obama’s executive order regarding burdensome/outdated regulation and what agencies can do to relieve small businesses of costly rules that hamper job creation and economic growth. As detailed in a White House memo released in January 2011, the order calls for regulators to scrap and reform outdated and burdensome rules to better help the U.S. regulatory system “promote predictability and reduce uncertainty.” Of course, this is particularly important for small businesses, which face regulatory costs over one third higher than their larger business counterparts.

In a classic case of ego overriding sound reason, regulators at the Environmental Protection Agency (EPA) responded to the President’s charge by saying they’re “confident” he wasn’t referring to their rules. Consequently, few expected the agency to rescind or rework its plans to dramatically intensify 2008 ozone standards even though the move would cost 7.3 million jobs and $676.8 billion in economic growth.

Much of the country has yet to meet the 2008 ozone standards. That's hardly a surprise, since complying with the restrictions requires either reducing commercial activity or upgrading equipment and facilities with expensive new technologies. Both options disproportionately burden small businesses, which would force them to cut jobs, halt investment and raise prices.

Despite the deleterious consequences triggered by its existing rule, EPA is pushing to reduce the allowable ozone parts per billion (PPB) from its current level of 75 to as little as 60 PPB.

The April 8th federal budget deal cut EPA's budget by $1.19 billion. State and tribal funds -- much of which assists states with rule compliance -- will bear 75 percent of these cuts. Moving forward with overburdesome regulations that will complicate its existing regulatory authority, the agency practically qualifies as a poster child for the kinds of overreach the White House aims to combat with its new framework.

We’ll soon see if EPA concedes this point. Though I wouldn’t hold your breath (unless you’re trying to meet ozone rules).

Karen Kerrigan, President & CEO

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