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Daily Archives: March 30, 2011

Why EPA’s attempt at regulatory overreach would end up killing the recovery

I think we all know that the recovery, such that it is, is very fragile.  And, of course, the job picture remains very poor.  Any GDP growth numbers we’ve seen over the past few months have been fueled mostly by government deficit spending.

So a government that was concerned about jobs and economic growth in the private sector should be concerned with getting out of the way and ensuring that growth is allowed to go forward unimpeded.  Instead, we see any number of roadblocks, such as the drilling moratorium, banking regulations and the like being imposed that are having the opposite effect.

Another example of that is the EPA’s attempted usurpation of powers only Congress should wield.  It is a classic example of a bureaucracy now attempting to make the law instead of follow it.

The EPA has chosen to interpret the 1970 Clean Air Act as a mandate for it to regulate Green House Gasses (GHG), not only in automobiles, but in stationary sources as well.  In fact, as the EPA has testified, it would effect up to 6.1 million stationary sources.    The Clean Air Act gave the EPA the ability to regulate air pollutants that effect health, such as soot, but not the ability to regulate GHG which are not considered to be pollutants as defined by the Clean Air Act. 

The obvious solution here, if that is a concern of the administration, is to have Congress address the Clean Air Act with an eye on updating it to deal with the perceived pollution problems today.  But there’s a very good chance that such changes wouldn’t be made given the present makeup of Congress.  In fact, even when Democrats had an overwhelming majority these past two years, they were unable to pass a Cap and Trade bill. 

Given that reality, it seems the Obama administration has chosen to bypass Congress and allow the EPA to arbitrarily assume the power to regulate GHG.

The impact of such regulation would be economically devastating.  And, in an era of uncertainty, it would only add to the uncertainty.  James Pethokoukis noted that, “the only thing certain about the EPA [greenhouse gas] ruling is more regulatory uncertainty leading to less economic growth and fewer jobs.”

For instance:

Consider Nucor Steel.  The company planned a $2 billion investment that would have created 2,000 construction and 500 permanent jobs.  But the project was curtailed-by more than 50%-largely because of the EPA’s regulations.  Lion Oil, a refinery based in El Dorado, Ark., faced a similar fate:  The EPA’s cap-and-trade agenda was, according to the company, a "critical factor" that delayed a "several hundred million" dollar refinery expansion, slated to create 2,000 jobs.

Add that to this sort of economic impact on one industry:

The American Forest and Paper Association estimates that, “about two dozen new regulations being considered by the Administration under the Clean Air Act, if all are promulgated, potentially could impose on the order of $17 billion in new capital costs on papermakers and wood products  manufacturers in the next five to eight years alone.”

EPA’s proposed regulation would hit everyone, especially small businesses:

The burden of EPA’s regulations will fall disproportionately on small businesses, according to a new study released by the Office of Advocacy in Obama’s Small Business Administration. The study, titled “The Impact of Regulatory Costs on Small Firms,” small businesses, defined as firms  employing fewer than 20 employees, “bear the largest burden of federal regulations.” Specifically, the report found that “as of 2008, small businesses face an annual regulatory cost of $10,585 per employee, which is 36 percent higher than the regulatory cost facing large firms (defined as firms with 500 or more employees).”

Some of the regulations EPA is attempting to enforce deal with boilers.  “National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters.” This proposal is referred to as the “Boiler MACT.”  Boilers are ubiquitous in the commercial market:

The Boiler MACT (maximum achievable control technology) proposal would impose stringent emission limits and monitoring requirements for eleven subcategories of boilers and process heaters. This proposed rule covers industrial boilers used in, among other industries, manufacturing, processing, mining, refining, as well as commercial boilers used in malls, laundries, apartments, restaurants, and hotels/motels.

So obviously imposing new stringent emission limits on boilers is going to effect a broad and deep swath of the economy, correct?  How deep and how broad? 

A recent study by Global Insight estimates that, depending on the policy EPA chooses, the Boiler MACT could put up to 798,250 jobs at risk. The study found that every $1 billion spent on upgrade and compliance costs will put 16,000 jobs at risk and reduce US GDP by as much as $1.2 billion.

Facing that, would you save  your money to upgrade or expand?  Expansion, of course, means more jobs.  Upgrading, however, means less.  And that’s where the EPA would take us.

Then there’s ozone.  The EPA wants to tighten the already stringent standard on ozone.  What the EPA has proposed is to change the standard from 75 ppb to a range of 60-70 ppb.  Here’s a clue as to how preposterous that is – Yellowstone National Park has 67 ppb of ozone as we speak.  So yes, Yellowstone would go from an “attainment” area to a non-attainment area.  That means it gets shut down until it comes into compliance.

That would also be the same for any area.  What does that mean?

Based on 2008 air quality data, a standard of 65 ppb would create 608 new non-attainment areas, while a standard of 70 ppb would create 515 such areas. These areas would be highly concentrated in manufacturing regions and states relying on coal for electricity.

Those counties and cities deemed to be in a non-attainment area would then have to put together a plan as to how to reach attainment (buy offsets from neighboring areas which are in “attainment”) and submit that to EPA.

But here’s the problem.  The new standard would most likely remove from the attainment list many who are now there and move them to the non-attainment list.  Result?  No offsets available to buy:

Consider the case of Ohio. Many areas of the state are still trying to meet the 1997 standard. A further revision now would greatly complicate state efforts to achieve attainment. Bob Hodanbosi, Ohio EPA’s Air Pollution Division Chief, estimates that if the ozone standard is set at 70 ppb, 47 of 49 monitors in Ohio would exceed it; if it were set at 65 ppb, all 49 monitors would exceed it.

In case you’re wondering it takes about 100 ppb of ozone to begin to effect your health.  So there’s really no need to move it from 75ppb.  And, as you can see in the case of Ohio, moving it down 5 points would put most of the state in “non-attainment” and moving it down 10 points would put the entire state in “non-attainment” and require exceedingly costly fixes.

Result?

The costs to Ohio workers and consumers could be severe. For example, in the Cincinnati-Dayton region, assuming an ozone standard of 70 ppb, production would decline by $14.8 billion, killing 91,700 jobs in 2030.  If EPA chooses 65 ppb, the costs in 2030 would nearly double, and 165,000 workers would lose their jobs.

And that’s in one state.

This is the threat posed by the EPA’s attempt at regulating something they have no authority to regulate.  It is being imposed by regulatory fiat.  

There’s a bill in the Senate right now that will prevent the EPA from usurping those powers and imposing those regulations.  It’s the Inhofe-Upton Energy Tax Prevention Act (S. 482).  It is also known as the McConnell amendment.  It is worth supporting.

Not worth supporting are the Rockefeller amendment which only delays the inevitable (and essentially cedes the premise that the EPA can do this) by two years.   No-go.

Neither is the Baucus amendment.  Here’s how Sen. Jim Inhofe (R-OK) describes the smoke and mirrors in that amendment:

The amendment is modeled on the EPA’s "tailoring rule," which temporarily exempts smaller sources-schools, hospitals, farms, restaurants-from the EPA’s cap-and-trade regulations.  That sounds good, but the rule blatantly violates the law, as the EPA changed the emissions thresholds established by Congress.

Hence the Baucus amendment:  It would codify the EPA’s permitting exemptions for stationary sources that emit fewer than 75,000 tons a year of greenhouse gases.  This exemption, which is actually more stringent than the EPA’s, purportedly is designed to help farmers and small businesses.  But as with the Rockefeller bill, it allows the rest of the EPA’s cap-and-trade agenda to move forward.  So businesses and farmers would still face higher costs for diesel and fertilizer, while small businesses would face higher electricity costs. 

The American Farm Bureau is wise to the false charm of the Baucus amendment.  It testified recently that, even with limited permitting exemptions, "Farmers and ranchers would still incur the higher costs of compliance passed down from utilities, refiners, and fertilizer manufacturers that are directly regulated as of January 2, 2011." 

Or said another way, the Baucus amendment also validates the premise that the EPA has the power to regulate GHG and just sneaks it up on us over a longer time period. Both are unacceptable. These amendments are supposed to come up for votes very soon. If you are an activist type and want to weigh in on this with your Senator, I’d recommended you push for passage of the Inhofe-Upton Energy Tax Prevention Act (aka McConnell amendment).

Require those types of decisions be made by elected officials who are accountable to their constituencies, not appointed officials accountable to no one.

~McQ

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Libya: Are there "good" civilians and "bad" civilians?

I have to ask because it seems we’ve decided we need to hit Tripoli – the center of the Gadhafi base and a city in which there’s been no real fighting and certainly not any threats of civilian massacre. I also ask it rather facetiously. I think it is obvious to anyone with two brain cells to rub against each other that the mission is no longer just to "protect civilians" but it has indeed become "regime change".  Check out the CNN vid:

 

 

So, one has to assume that the critical nature of ensuring Libyan civilians aren’t harmed is much more of a concern in Benghazi than in Tripoli.  No bombing or missile strikes in Benghazi, multiple examples of each in Tripoli.

The excuse?  Well we’re now attacking targets with even the “potential” of harming civilians.

Yeah, where I come from we call that rationalization – an effort to justify doing something other than what you were first cleared to do. The euphemism in common and specific use today as it pertains to military operations is “mission creep”.  We are right smack dab in the middle of doing just that.

Ed Morrissey makes the salient point and asks the proper questions:

Now the US says that NATO may start attacking Tripoli itself, presumably to get to Gaddafi’s command and control functions, which makes perfect sense if the mission objective was regime change. There are no reports of massacres in Libya’s capital at the moment, at least none which NATO or the White House have publicized.If the mission is the protection of civilians, which is what the UN mandate states (which Obama said he would not exceed in his speech Monday night), how will bombing Tripoli accomplish that?  We will increase the odds for significant collateral civilian losses, not decrease them.

Don’t expect questions to be asked or, if they are asked, to get any straight answers.  Well other than being told there are things in Tripoli with the “potential” to harm civilians.

Yeah … JDAMs and Tomahawks.

~McQ

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Ed Shultz– patriotic “chicken hawk?” Dissent is now “unpatriotic” …

Frankly this sort of stuff is just funny as hell, in an ironic sort of way.  The ever consistent left.  Remember when  any dissent, as long as it was the left dissenting and George Bush was the target, was the height of patriotism?

Yeah, not so much anymore.  Check out this from Ed Schultz.  Ed Schultz for heaven sake, talking about dissent and war:

ED SCHULTZ: Republicans are attacking the Commander-in-Chief during a time of war! . . . There should be no debate: we should be kicking [Gaddafi’s] ass . . . Whose side are you on, Sarah: are you with the terrorists, Sarah, or are you with the President of the United States? . . . And I have to ask the question tonight: where is the patriotism from all of these war-hawks? Where’s the patriotism of the Republican party? . . . What about being a patriot? . . . So the question now for the doubters who are out and about: why don’t you support the president? . . . We’ve been talking about the lack of patriotism from prominent Republicans . . .  Laura [Flanders] what about the patriotism?

Sometimes I have to wonder if these guys are like geese and just wake up in a new world everyday, because they apparently just don’t remember the Bush years at all or what they said during that time. And just as apparently they don’t seem to remember when they argued that dissent was as patriotic and American as apple pie.   As I recall Ed Schultz was the voice of dissent about Iraq – in fact he liked to brag about that fact.  Change each of the names above to “Ed Schultz” and it would be precisely what he whined about and pushed back against when he was the target of such nonsense.

But now, suddenly, because it fits his agenda apparently, he’s what I can only assume he’d have called a “chicken-hawk” a few years ago.  And he’ll brook no dissent, by gosh.  You’re simply “unpatriotic” if you disagree. 

Ed Shultz – another irony impaired  lefty blowhard with no integrity who has a memory as long as … well you pick the proper metaphor, but whatever you choose, it’s not very long at all.  You can see the clip of him “leaning forward” on MSNBC here.

~McQ

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Quote of the Day–Marco Rubio debt ceiling edition

Write it off to me being cynical about what any politician says, but while I like what I hear from Rubio in this WSJ op/ed, I wonder if, in fact, he’ll end up sticking to his guns:

Americans have built the single greatest nation in all of human history. But America’s exceptionalism was not preordained. Every generation has had to confront and solve serious challenges and, because they did, each has left the next better off. Until now.

Our generation’s greatest challenge is an economy that isn’t growing, alongside a national debt that is. If we fail to confront this, our children will be the first Americans ever to inherit a country worse off than the one their parents were given.

Current federal policies make it harder for job creators to start and grow businesses. Taxes on individuals are complicated and set to rise in less than two years. Corporate taxes will soon be the highest in the industrialized world. Federal agencies torment job creators with an endless string of rules and regulations.

So to summarize, Rubio sees a need to find ways to help the economy grow and to keep the national debt from not growing.  Okay, sold.   Next he sees existing federal policies – those, one assumes, include taxes and regulations – as one of the main obstacles to economic growth and one of the main contributors to national debt.  Again, check.  I think, in the main, he’s right.

Here’s the QotD:

We’re therefore at a defining moment in American history. In a few weeks, we will once again reach our legal limit for borrowing, the so-called debt ceiling. The president and others want to raise this limit. They say it is the mature, responsible thing to do.

In fact, it’s nothing more than putting off the tough decisions until after the next election. We cannot afford to continue waiting. This may be our last chance to force Washington to tackle the central economic issue of our time.

Well yes and no.  The defining moment in American history seems to arrive every couple of years when Congress routinely raises the limit again and again.  We’re now at a level that almost matches the yearly GDP with no end in sight if you look at the projected budgets for the next 10 years.  So is this particular vote on the debt ceiling really a “defining moment in American history”?  Only if Congress refuses to raise it.   Otherwise, it is business as usual.

Wit ill it be business as usual or a “defining moment in American history”?  I agree with Rubio that as it stands Congress and the president have obviously decided covertly that they’re not going to “tackle the central economic issue of our time” at the moment.   So where does that leave Rubio?

Well, here’s his position:

I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.

No tax reform, regulatory overhaul, cuts to discretionary spending, balanced budget amendment as well as reforms to save Social Security, Medicare and Medicaid, no Rubio “yes” vote?

That’s what his statement says to me and anyone familiar with the “goings on” in Congress know -given Rubio’s list of “must haves” before he’d vote “yes” – it is a virtual impossibility.  Not going to happen – at least not anytime soon. 

I would then deduce that Rubio is a permanent “no” on any legislation coming along in oh, the next 20 years, that raises the debt ceiling.  Because, watching politics in Washington for all these years has convinced me that until it all crashes and burns, those folks aren’t going to really do a thing.

And I think Rubio knows it too:

Whether they admit it or not, everyone in Washington knows how to solve these problems. What is missing is the political will to do it.

I’ve seen no indicator that there is now a real will to do it, even after the wave election washed over 60 Republican freshmen into the House and upped the minority numbers for the GOP in the Senate.  Oh there’s talk, of course, but I see the usual turf protection and re-election concerns already beginning to cloud the once clear mandate that said “fix this mess”.  I see knees becoming weak and spines beginning to buckle.

Rubio stakes out a pretty unambiguous position here – not that I think he’s going to be able to stop the debt ceiling from being raised.  On the contrary, I think we’ll see it raised many more times in the coming years.   But I’m wondering how true Rubio will remain to his pledge here.  It will be an interesting exercise to watch a supposedly principle driven and incorruptible Tea Party candidate work in the atmosphere of Washington DC that almost demands “team play” and compromise to “get along” or advance.  He and Rand Paul, along with Allen West (R-FL) in the House are my “white mice” in this Tea Party experiment.  I want to see how true they stay to their pledges, how well they resist the Washington gravitational pull and resultant sell-out that usually occurs. 

I, for once, hope my cynicism isn’t rewarded as it usually is.

We’ll see.

~McQ

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