Congress can prevent energy prices from soaring higher

High gas prices have the potential to undermine the economic recovery. Rising fuel prices affect just about everything, and small business owners do not need more worries about higher business costs, and slower demand due to consumer concerns over high gas prices. With more of their resources going to pay for higher fuel and business costs, small business owners have less capital to add jobs. Certainly, Washington should be focused on making sure prices remain stable and affordable.

SBE Council is supporting the "Energy Tax Prevention Act of 2011" (H.R. 910), and we are asking all U.S. House members to do the same. H.R. 910 will stop the EPA from implementing an intrusive and misguided regulatory initiative that will only drive energy costs higher.

The legislation has been approved by the House Energy and Commerce Committee, and we are hopeful H.R. 910 will reach the floor for a full vote in the near future. This important bill will address clear overreach by the EPA with respect to the regulation of greenhouse gases. Essentially, H.R. 910 nullifies this costly EPA regulation.

If the regulatory initiative on greenhouse gases moves forward, energy prices will continue to move higher undermining U.S. economic competitiveness. Small businesses will be disproportionately impacted by EPA's regulation, as our ability to compete will be permanently impaired.

As SBE Council wrote in a letter that was distributed to every House member on March 16, 2011:

"The EPA has worked to circumvent Congress in order to regulate greenhouse gas emissions, including CO2. The 1970 Clean Air Act bestowed no such powers on the EPA, and it was never intended to cover greenhouse gases, such as CO2, and climate issues. The title of H.R. 910 - the 'Energy Tax Prevention Act' - is right on target, as the EPA's greenhouse gas regulation would be a de facto tax on energy consumption and, therefore, on most economic activities. After all, the means for reducing CO2 emissions mainly are raising the cost of carbon-based fuels (in an attempt to push energy consumption to other higher cost forms of energy), reducing the number of emitting entities, such as manufacturing facilities, imposing costly mandates on vehicle and stationary sources of emissions, and/or slowing or reducing the overall pace of economic activity and production."

As we noted in the House letter, the Small Business Administration's Office of Advocacy contradicted the EPA's assessment regarding the impact on small businesses. That is, the EPA reported that the regulation would not impact small entities where clearly it will. In a December 2009 letter, Advocacy pointed out: "EPA has certified that the GHG Tailoring Rule, along with two interrelated rules that will result in the federal regulation of greenhouse gases for the first time, will not have a significant economic impact upon a substantial number of small entities. We disagree." It was added later that "it is clear that EPA's Clean Air Act greenhouse gas rules will significantly affect a large number of small entities."

H.R. 910 would stop a gross overreach by the EPA, and avoid the imposition of massive costs on America's job-creating small businesses. The U.S. Senate may also be poised to act on similar legislation through an amendment offered by Senator Mitch McConnell (R-KY) to a small business bill that is currently being debated. As of this writing, that amendment may be taken up following the congressional recess (which is next week).

President Obama is defending the EPA and lashed out at efforts to halt this unprecedented regulation. As SBE Council has noted in our communications with the Hill and the Administration, EPA is overstepping its authority and the issue of how to deal with greenhouse gas emissions should be left up to Congress -- not unelected bureaucrats whose actions will severely damage our economy, and the ability of our businesses to create/sustain jobs and compete in the global marketplace.

Karen Kerrigan, President & CEO

Taming EPA Overreach

As part of the debate over small business legislation currently moving through the U.S. Senate, Senator Mitch McConnell (R-KY) has offered an amendment to nullify the Environmental Protection Agency's (EPA's) ability to control carbon emissions from U.S. businesses. EPA's move to regulate greenhouse gases is an intrusive and costly measure that will drive energy costs higher, destroy jobs and hurt investment. Legislation with the same language passed a House committee this week, and it looks like that bill (H.R. 910) may move to the floor for a full House vote in the near future.

In response to the news about a pending Senate vote on the McConnell amendment, I released the following media statement:

"Proposed EPA regulations will have a significant impact on businesses, with projections showing they could eliminate anywhere from 800,000 to 7 million jobs in the next several decades. The SBE Council supports Senate Minority Leader Mitch McConnell's amendment to eliminate this disastrous option altogether so the issue of greenhouse gas emissions can be addressed through the appropriate channels: namely our elected officials in Congress.

The SBE Council, and the thousands of small businesses we represent, urge Senators to vote 'YES' and halt EPA's pending regulatory overreach, giving American businesses a fighting chance to stage an economic recovery and compete in the global economy. We must remove uncertainties and burdens in order to spark needed investment, and the vote on the McConnell amendment offers the opportunity to take a major step in the right direction."

SBE Council plans to KEY VOTE the McConnell amdendment in our forthcoming Ratings of the 112th Congress.

The President has asked the business community to identify regulations, government-imposed barriers and regulatory initiatives that hurt their ability to compete and create jobs. This EPA super-regulation is one of them, and the agency must be reined in on other fronts as well.

Karen Kerrigan, President & CEO

Proposed Power Plant Regulations

An October 27 Wall Street Journal article points to a possible moment of clarity on the regulatory front.

The piece, titled “EPA to Loosen Controls on Power-Plant Pollution,” reports that the Bush Administration will propose to judge power plant by “their hourly rate of emissions rather than their total annual output.”

The Journal noted: “Under current policy, power plants that make upgrades to operate longer and increase emissions must install pollution-control equipment. The proposed rules, which seek to make it easier for older power plants to extend their life span and upgrade without installing costly new equipment, are tied to an hourly rate of emissions. As long as a power plant's hourly emissions stay at or below the plant's historical maximum, the plant would be treated as if it were running more cleanly, even if its total annual emissions increased as plant operators stepped up operations.”

The Bush Administration is pushing to get the rules finalized by November 1, as it would make it harder for them to be undone after more than two months, according to the Journal’s report. Unfortunately, various congressional leaders are opposed, and threatening to launch an investigation.

Why some in Congress would want to stop this change in power-plant regulation is a mystery, especially if one expects government policies to be based on both sound economics and sound environmental policies. After all, this measure would reduce electricity costs, while still providing reasonable environmental protections. Sounds like a good combination.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

EPA Moves to Control the Economy

The Environmental Protection Agency (EPA) released an “advanced notice of proposed rulemaking” (ANPR) on July 11, which basically outlines their general framework for how the agency proposes to regulate greenhouse gas emissions under the Clean Air Act (CAA). Essentially, the EPA’s approach would regulate almost anything that moves and produces. Even some homes could fall under permitting requirements for energy use. This is not a joke.

So if your home and lawn mowing habits (Yes, “grass mileage standards”…I am not kidding) are highly regulated from Washington, what about small businesses?

Yes, you guessed it. New rules, costs, permits, modifications, technology requirements, paperwork, etc., etc. (and there will be fines of course!). The regulatory concepts outlined in the EPA’s approach represent an enormous and unprecedented economic blow to small businesses -- that is, if they were enacted. It is clear that rogue bureaucrats at the EPA designed this initiative, and Congress needs to step in.

Recently, the U.S. Senate overwhelmingly rejected a costly and complex scheme to regulate CO2. The EPA’s approach to regulating greenhouse gas emissions is much, much worse.

It appears Congress has fine-tuned its investigatory skills over the past year and a half (with the private sector being its main target), so perhaps they can spend some time conducting oversight of the federal government agencies right under their noses. Congress needs to learn how this massive and complex regulatory scheme will work, and how the EPA developed its approaches and models for moving forward with this specific ANPR.

Small businesses and the public can make their voices heard on this debate as well. You will have 120 days to comment on the ANPR. You have not heard the end of this issue – more to come!