CR Compromise Protects Air Pollution Safeguards

Big Oil Benefits Are Spared

Important air pollution safeguards and investments in clean energy were preserved in the budget deal hashed out last week but Big Oil tax loopholes remain, write Daniel J. Weiss and Valeri Vasquez.

President Barack Obama and Senate Majority Leader Harry Reid (D-NV) were able to convince House Speaker John Boehner (R-OH), above, to drop a rider in the compromise budget bill stop the EPA from reducing mercury, arsenic, dioxin, soot, and carbon dioxide pollution from coal-fired power plants and other sources.But Speaker Boehner has vowed to continue to push for cuts to environmental programs. (AP/Alex Brandon)
President Barack Obama and Senate Majority Leader Harry Reid (D-NV) were able to convince House Speaker John Boehner (R-OH), above, to drop a rider in the compromise budget bill stop the EPA from reducing mercury, arsenic, dioxin, soot, and carbon dioxide pollution from coal-fired power plants and other sources.But Speaker Boehner has vowed to continue to push for cuts to environmental programs. (AP/Alex Brandon)

View clean energy investments in the continuing resolution and the House, Senate, and Obama budgets for FY 2011 and FY 2012

President Barack Obama, Speaker of the House John Boehner (R-OH), and Senate Majority Leader Harry Reid (D-NV) made an 11th-hour compromise on April 8 on a continuing resolution to fund the federal government for the remainder of fiscal year 2011. This deal prevented a government shutdown, which would have furloughed thousands of federal employees and delayed billions of dollars of support for deserving Americans while stalling the fragile economic recovery. President Obama and Majority Leader Reid forced the House to drop antipublic health “riders” from the final spending bill that would have crippled the Environmental Protection Agency’s ability to limit harmful pollutants in our air. But unfortunately the House Republicans were still able to slash some essential clean energy investments in the compromise bill.

The House Republicans loaded up their version of the continuing resolution, H.R. 1, with nearly two dozen antienvironmental riders (a rider is an additional provision added to a bill under consideration that has little to do with the bill’s subject matter). They included those that would stop the EPA from reducing mercury, arsenic, dioxin, soot, and carbon dioxide pollution from coal-fired power plants and other sources.

These riders were one of the big, final differences between the sides as they negotiated an agreement to fund the government for the remainder of the fiscal year. President Obama and Majority Leader Reid repeatedly told Speaker Boehner they would not accept these and other EPA riders. Environmental organizations generated tens of thousands of phone calls and other contacts to their legislators urging them to oppose this Big Oil-backed effort to stop the EPA from fulfilling its health protection mission.

There were crucial test votes on four amendments similar to the rider designed to prevent the EPA from setting carbon dioxide pollution reductions during the April 6 consideration of an unrelated bill. The amendments were offered to the Small Business Innovation Research, or SBIR, and Small Business Technology Transfer, or STTR, reauthorization bill, S. 493. The most drastic measure was offered by Senate Minority Leader Mitch McConnell (R-KY) that would have permanently eliminated the EPA’s ability to establish such safeguards. It failed by a vote of 50-50, with four Democrats voting for it and one Republican voting against it.

The defeat of these amendments helped the president and Majority Leader Reid to convince Speaker Boehner to drop this and other riders. Politico concluded that “Reid had a chance to use the roll call’s 50-50 outcome during a tense series of Oval Office negotiations to remind House Speaker John Boehner that Senate support didn’t exist to turn the anti-EPA language into a reality.”

Americans, for their part, believe the EPA should be able to set carbon dioxide pollution reduction rules. A CNN poll asked:

Would you favor legislation that would prevent the Environmental Protection Agency from spending any money to enforce regulations on greenhouse gases and other environmental issues, or do you think the federal government should continue to provide funding to the Environmental Protection Agency to enforce those regulations?

Respondents supported action over delay by 71 percent to 28 percent.

The dispute over public health standards was not the only major difference between the Senate, House, and president, however. President Obama’s FY 2012 proposed budget had very different energy priorities compared to H.R. 1. The administration proposed to significantly increase investments in science, energy efficiency, renewable technologies, and reductions in oil use. It also wanted to eliminate billions of dollars for tax loopholes for Big Oil companies.

CR energy chart

The House Republican CR, on the other hand, would have slashed billions of dollars from these vital efforts while keeping the Big Oil tax loopholes and allowing the companies to avoid paying royalties from oil and gas produced from taxpayer-owned waters.

The CR agreement protects some critical clean-tech investment programs. It keeps afloat the Department of Energy loan guarantee program for clean energy technologies for now but makes a steep cut in the program’s funding. Investment in science and innovative technologies—key to long-term economic competitiveness—received a boost in the form of $180 million appropriated for the Department of Energy’s Advanced Research Projects Agency—Energy, or ARPA-E.

Greenwire reported, “Science and ARPA-E programs are funded at $5 billion—$161 million above the enacted level and $997 million above H.R. 1.”

H.R. 1 also would have cut one-third of the funding for the Commodity Futures Trading Commission, or CFTC, the agency that polices oil markets to prevent speculators from driving up prices. There is already evidence that “speculators driv[e] up the price of oil.” The final budget agreement increases CFTC resources by $34 million over FY 2010 levels to put more, not fewer, cops on the oil trading beat.

The final agreement includes some provisions that President Obama and Leader Reid opposed, as with any compromise. For instance, it cuts measures to reduce oil use by slicing more than $4 billion from new transit starts, railroad, and high-speed rail, though it maintains funding for the Washington-area Metro subway system. Financing for energy efficiency and renewable energy programs was cut by 20 percent in the final agreement, though H.R. 1 would have cut twice as much.

Regrettably, the final deal continues Big Oil tax loopholes and handouts despite the $80 billion in 2010 profits earned by four of the largest oil companies: Chevron, ConocoPhilips, ExxonMobil, and Shell. And the deal’s severe reductions in funds for state and local air pollution programs will reduce enforcement of health protection standards.

Nonetheless, the energy provisions of the CR agreement are an improvement over the House version. Most importantly, it retains the EPA’s ability to enforce the Clean Air Act and protect Americans from air pollution. Had this been removed or delayed, it could have taken years of legislative struggles to restore it. Big Oil lost on that issue but continued to hold on to billions of dollars’ worth of loopholes and handouts.

This battle isn’t over yet, either. Congress has two more must-pass bills in the coming months. Late this spring it must pass an increase in the federal debt ceiling so it can continue to borrow to finance federal spending not paid for by tax revenues or other fees. And Congress must pass and the president must sign spending bills for FY 2012 by October 1.

Republican leaders made it clear that during the upcoming budget processes they will continue to push their agenda of undoing health safeguards, maintaining Big Oil benefits, and disinvesting in science and clean energy innovation.

Greenwire reports:

House Speaker John Boehner’s (R-Ohio) conference vows to push for more cuts and policy limits during debates over fiscal 2012 spending and the debt ceiling. The framework crafted by House Budget Chairman Paul Ryan (R-Wis.) does not spare the rod for DOE, cutting 46 percent from its energy and environmental arms relative to the White House’s request, according to an analysis by the nonprofit National Priorities Project (NPP).

The American people must let President Obama and Congress know they oppose this extreme agenda and instead support public health protection, making Big Oil pay its fair share, clean-tech investments, and reducing oil use.

Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy at the Center for American Progress. Valeri Vasquez, Special Assistant for Energy Policy at the Center, contributed to this analysis. Thanks to Richard Caperton, Senior Policy Analyst with the Energy Opportunity team at American Progress.

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Daniel J. Weiss

Senior Fellow