Environment and the Economy Subcommittee Learns of Burdensome Environmental Regulations Stifling Job Creation and Economic Growth

February 15, 2011

WASHINGTON, DC - The U.S. House Energy and Commerce Committee's Environment and the Economy Subcommittee today held a hearing on "Environmental Regulations, the Economy, and Jobs." The panel, chaired by Rep. John Shimkus (R-IL), examined how and whether federal regulatory agencies are conducting the type of economic analysis necessary for policymakers to understand how regulations affect employers' ability to retain workers and hire new ones, and avoid unnecessary cost burdens.  Witnesses from the small business, manufacturing, and industrial communities elaborated how misguided environmental regulations were harming job growth with no benefit to the environment.

"We need to weigh the benefits compared to the collective burdens placed on businesses trying to navigate through a struggling economy to keep jobs here at home," said Chairman Shimkus.  "While one regulation alone may not close a business, the cumulative effect could be devastating."

Karen Harned, Executive Director of the National Federation of Independent Business Small Business Legal Center, testified, "Small businesses are the engine of our economy.  Unfortunately, they also bear a disproportionate weight of government regulation.  The effects of overregulation require an enormous expense of money and time to remain in compliance.  The effort required to follow these regulations prevent small business owners from growing and creating new jobs."

The subcommittee heard directly from specific industries that have been adversely affected by environmental regulations.  Leonard Hopkins, who serves as Fuel and Compliance Manager for Southern Illinois Power Cooperative, testified on the burdens proposed coal ash regulations would have on the nation's electrical cooperatives.  When the not-for-profit cooperative's two coal-fired boilers were built, they were equipped with state-of-the-art pollution control equipment and they continue to comply with all environmental regulations. 

However, Hopkins testified the EPA's proposed coal ash regulation, "poses a serious threat to the economic survival of the cooperative" and he conservatively estimated costs to comply under the EPA's Subtitle C option, "would cost its members a minimum of an additional eleven million dollars per year (about 25% of our current annual fuel budget), and we serve an area of the state that has up to 15% unemployment!"  Hopkins continued, "Southern Illinois Power Cooperative has been utilizing its coal combustion byproducts in beneficial ways for over twenty years.  Roof shingle sand, abrasive products, mine reclamation, cement, and fertilizer blends are examples of ways our coal combustion residues are recycled into beneficial products for society.  Southern Illinois Power is concerned that placing the label of "˜hazardous' on coal combustion residue will place the same stigma on all coal combustion byproducts, and effectively end the possibility of recycling such materials."

Marcia Kinter from the Specialty Graphic Imaging Association, provided testimony on the EPA's proposed changes to the Toxic Substances Control Act's Inventory Update Rule (IUR) that triggers a significant reporting burden on U.S. manufacturers without any discernable environmental benefit.  She testified the EPA's interpretation would classify all recycled waste by-products as new chemicals subject to reporting under the IUR thus establishing a disincentive for facilities to recycle. 

Kinter stated at the hearing, "In the proposed rule, EPA provides a deeply misguided interpretation that waste by-products generated during the manufacture of items, like t-shirts, are new chemicals if the manufacturer has the temerity to do the right thing by sending the waste by-products for recycling rather than disposing of them. While the screen and digital printing processes use chemicals, including inks and solvents, we certainly did not consider ourselves to be chemical manufacturers and therefore subject to TSCA IUR."

Commenting on the impact environmental regulations are having on job growth and the economy, Energy and Commerce Committee Chairman Fred Upton (R-MI) stated, "Somehow we have lost our way - those small businesses and manufacturers who should be driving our economic recovery are choking from burdensome red tape, weathering an agency-wide regulatory epidemic that seems bent on accomplishing a single-minded purpose without regard to fixing the economy and protecting jobs.   Not to mention, environmental regulations also substantially raise costs on the public sector, and these costs are not easily absorbed." 

Additional witness testimony from the hearing is available online HERE.

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