GOP’s Latest Anti-Regulatory Effort is a (S)TRAIN; CPR’s Steinzor to Testify on New Bill

This afternoon at 1:00 p.m., the House Energy and Commerce Committee’s Subcommittee on Energy and Power will check one more box in the House GOP's ongoing effort to demonstrate its appreciation to the corporate interests that helped elect them, by holding a hearing on a proposal disingenuously called the Transparency in Regulatory Analysis of Impacts on the Nation Act of 2011, or as they acronym-ize it, the TRAIN Act.

As the name does not at all suggest, it’s a bill about undercutting environmental regulations that inconvenience the energy industry. The idea is to create a sort of non-environmentally minded Star Chamber to review the full slate of Clean Air Act and coal ash regulations, for the purpose of concluding that they cost too much. That’s not quite how they phrase it, of course, but that is the purpose.

Here’s an excerpt from the committee majority staff’s description of the bill:

In the past two years, the Environmental Protection Agency (EPA) has promulgated numerous final and proposed rules that will require retrofitting of power plants, increased fees for new construction and operation of units from diverse sectors of the economy, potential construction delays, revisions to state plans to implement federal requirements, and the adoption of Best Available Control Technology measures to address greenhouse gas emissions from diverse sources.

EPA’s own analysis indicates that some of these rules will have significant costs; other actions have not yet been analyzed. There has not, however, been an analysis of the cumulative impacts of these regulations on global competitiveness, cumulative change in energy and fuel prices, employment, or reliability of the electricity supply. Nor has there been an analysis of the cumulative impacts on consumers; small businesses; regional economies; state, local and tribal governments; specific labor markets; and agriculture.

Of course, every rule that emerges from EPA undergoes a rigorous cost-benefit analysis, totting up every penny of cost to industry (calculated by industry, for the most part, so you can imagine they don’t under-project), and comparing it with the dollar value of the benefits that would result. For a number of reasons, that process is deeply flawed and slanted against protective regulations. It ignores, for example, the value of benefits that can’t be readily monetized, with the net effect that benefits are commonly understated, while the costs to industry are often exaggerated.

Nevertheless, these cost-benefit analyses are required by the White House. Yet if you listen to the GOP’s rhetoric on regulations these days, you’ll almost never hear any reference to the benefits of regulation, even though such calculations are readily available. They talk about the costs to industry, but never the benefits to the public. Note, for example, that the committee staff’s description does not acknowledge the benefits, and indeed, the word does not appear in their memo.

As it happens, the monetized benefits almost always exceed the costs. In the case of the Clean Air Act, for example, a recent report from EPA calculated the costs and benefits of the last 20 years of regulation. In testimony that CPR President Rena Steinzor will present to the committee this afternoon, she summarizes the findings:

Regulations implementing the Clean Air Act, especially with respect to ozone and fine particulate matter that cause cardiovascular and respiratory problems throughout the population, are uniformly recognized as a wonderful economic bargain by experts from the right to the left of the political spectrum. Indeed, if you invite John Graham, former regulatory czar under President George W. Bush, to testify before you, he would agree enthusiastically with that statement.

According to EPA’s very conservative numbers, which dramatically understate benefits and overstate costs, clean air rules saved 164,300 adult lives in 2010, and will save 237,000 lives annually by 2020. EPA estimates that the economic value of Clean Air Act regulatory controls will be $2 trillion annually by 2020; costs of compliance in that year will be $65 billion. Air pollution controls saved 13 million days of work loss and 3.2 million days of school loss in 2010. By 2020, they will save 17 million work loss days and 5.4 million school loss days.

Reiterating the dollar comparison: Clean Air Act regulations result in $2 trillion in annual benefits, against $65 billion in costs, which means that benefits exceed costs by 30 to 1. She goes on to say:

EPA’s estimates are based on exceptionally conservative assumptions regarding regulatory benefits that, if anything, low-ball these figures by orders of magnitude. For example, EPA says that when Clean Air Act protections prevent a non-fatal heart attack in a person 0-24 years old, the incident is worth only $84,000. How many of the young people in this room would accept $84,000 to undergo a non-fatal heart attack or, for that matter, would pay that amount to avoid one? The millions of parents who have asthmatic children will be interested to learn that cleaning up the air to the point they can avoid a single emergency room visit is worth only $363 per asthmatic child. Hospitals don’t give you a plastic ID bracelet for that little, and the trip to the hospital with a breathless, frantic child is worthless in these calculations.

She also pokes a little fun at the proposed name of the bill:

Although the bill has the word “transparency” in its title, the proceedings of the committee it creates to invent these estimates is exempt from the Federal Advisory Committee Act (FACA), allowing members to meet secretly with biased stakeholders who are never publicly named. Precedents for this kind of Star Chamber process designed to cripple environmentally protective rules come readily to mind, including Vice President Richard Cheney’s secret Energy Taskforce and Office of Information and Regulatory Affairs Administrator Cass Sunstein’s Cost of Carbon Taskforce, both of which met behind closed doors and did not disclose their membership upfront.

Later, noting that the name of the bill was obviously chosen with an acronym in mind, she suggests that perhaps it would be more accurate to call the bill the “So-called Transparency in Regulatory Analysis of Impacts on the Nation Act,” making both the title and the acronym – STRAIN – more accurate.

This latest attack on the authority of the executive branch to write the regulations to enforce the law is extremely unlikely to make it to the President’s desk for veto. The GOP can run practically anything it wants through the House, but the Senate isn’t likely to concur.

But the GOP obviously likes the atmospherics. They get to argue, completely without evidence, that overly aggressive environmental regulation is what’s bogging down the economy, not the lax approach to financial regulation that so defined the previous Administration. It’s a bright shiny distraction for voters. But more than that, it’s a chance to give some airtime to the policy wish lists of their corporate supporters.

One would think that with the government on the verge of shutdown, they might have something better to do. But then again, clearly not.