January 2012

I have an article in the Washington Times today about the EPA’s new status as a rogue agency.  It begins:

The Senate undermined its constitutional role last week with a vote that allows the Environmental Protection Agency (EPA) to regulate greenhouse gases under the Clean Air Act. The 53 senators favoring this huge delegation of authority to the executive branch disregarded the principle of separation of powers. The low quality of the debate that preceded the vote, as well as its result, should put an end to the Senate’s reputation as the world’s greatest deliberative body.

While you’re there, also check out CEI alumnus Sterling Burnett’s complementary article.

“Panic is what we want,” Washington Post columnist Anne Applebaum wrote last May of swine flu. “Panic is good,” she said, also labeling the disease a “pandemic” five weeks before the World Health Organization (WHO) did.

Yet flu season is now officially over and we’ve had about 12,500 total flu deaths, or a third the usual number according to Centers for Disease Control and Prevention estimates.

Still, say what you will about the Post Opinions page coverage of swine flu, it was consistent. It kept on promoting panic, notwithstanding they knew they were wrong, that indeed one of their contributors was outright lying. I know because I repeatedly kept them informed. Read my article about those estimates of 207,000 American dead and nine million worldwide that Opinions foisted on us–in the name of spreading panic.

Crucial offers to help clean up BP’s oil spill “have come from Belgian, Dutch, and Norwegian firms that . . . possess some of the world’s most advanced oil skimming ships.” But the Obama administration wouldn’t accept the help, because doing so would require it to do something past presidents have routinely done: waive rules imposed by the Jones Act, a law backed by unions.

“The BP clean-up effort in the Gulf of Mexico is hampered by the Jones Act. This is a piece of 1920s protectionist legislation, that requires all vessels working in U.S. waters to be American-built, and American-crewed. So . . . the U.S. Coast Guard . . . can’t accept, and therefore don’t ask for, the assistance of high-tech European vessels specifically designed for the task in hand.”

The law itself permits the president to waive these requirements, and such waivers were “granted, promptly, by the Bush administration,” in the aftermath of hurricanes and other emergencies. But Obama has refused to do so, notes David Warren in the Ottawa Citizen. Instead, Obama rejected a Dutch offer to help clean up the spill, noted Voice of America News:

“The Obama administration declined the Dutch offer partly because of the Jones Act, which restricts foreign ships from certain activities in U.S. waters.  During the Hurricane Katrina crisis five years ago, the Bush administration waived the Jones Act in order to facilitate some foreign assistance, but such a waiver was not given in this case.”

“After the Obama administration refused help from the Netherlands, Geert Visser, the consul general for the Netherlands in Houston, told Loren Steffy: ‘Let’s forget about politics; let’s get it done.’” But for Obama, politics always comes first: “The explanation of Obama’s reluctance to seek this remedy is his cozy relationship with labor unions. . . ‘The unions see it [not waiving the act] as … protecting jobs. They hate when the Jones Act gets waived.’”

Ironically, even the staunchest supporters of the Jones Act are now distancing themselves from refusals to accept foreign help, saying they have “not and will not stand in the way of the use of these well-established waiver procedures to address this crisis.” Obama is being more intransigently pro-union than the unions themselves.

One can only hope Obama will change his mind now, given that “each day our European allies are prevented from helping us speed up the clean up is another day that Gulf fishing and tourism jobs die.”

(The Obama administration has belatedly accepted some foreign equipment for use in fighting the spill, although it still blocks ships with foreign crews. As Voice of America notes, although “the Netherlands offered help in April,” such as providing “sophisticated” oil “skimmers and dredging devices,” the Obama administration blocked their crews from working in U.S. waters, and as a result, this crucial “operation was delayed until U.S. crews could be trained” in June. “The Dutch also offered assistance with building sand berms (barriers) along the coast of Louisiana to protect sensitive marshlands, but that offer was also rejected, even though Louisiana Governor Bobby Jindal had been requesting such protective barriers.”)

In April 2009, the Obama administration granted BP, a big supporter of Obama, a waiver of environmental regulations.  But after the oil spill, it blocked Louisiana from protecting its coastline against the oil spill by delaying rather than expediting regulatory approval of essential protective measures.  It has also chosen not to use what has been described as “the most effective method” of fighting the spill, a method successfully used in other oil spills.  Democratic strategist James Carville called Obama’s handling of the oil spill “lackadaisical” and “unbelievable” in its “stupidity.”

Obama is now using BP’s oil spill to push the global-warming legislation that BP had lobbied for.  Obama’s global warming legislation expands ethanol subsidies, which cause famine, starvation, and food riots in poor countries by shrinking the food supply.  Ethanol makes gasoline costlier and dirtier, increases ozone pollution, and increases the death toll from smog and air pollution.   Ethanol production also results in deforestation, soil erosion, and water pollution. Subsidies for biofuels like ethanol are a big source of corporate welfare: “BP has lobbied for and profited from subsidies for biofuels . . . that cannot break even without government support.”

The $800 billion stimulus package is also using taxpayer subsidies to replace U.S. jobs with foreign green jobs. And its regulations destroy jobs in America’s export sector.

Last Thursday, by a vote of 53-47, the Senate rejected S.J.Res.26, Alaska Sen. Lisa Murkowski’s resolution of disapproval to overturn EPA’s endangerment rule.

Although Sen. Murkowski fell four votes short of achieving a legislative victory, she nonetheless won an important political victory. 

During the past four-plus months, despite vicious attacks by eco-pressure groups and preemptive cringing by the subsidy dependent auto industry, Sen. Murkowksi worked patiently, calmly, and indefatigably to clarify the real issues, which are: (1) “The sweeping powers being pursued by EPA are the worst possible option for reducing greenhouse gas emissions”; (2) “politically accountable members of the House and Senate, not unelected bureaucrats, must develop our nation’s energy and climate policies”; and (3) ”those policies must be able to pass on their own merits, instead of serving as a defense against ill-considered regulations.”

All 41 Republican Senators and six Democrats voted to stop EPA from ‘enacting’ controversial global warming policies through the regulatory back door. This means Democratic leaders have become the Party of Endangerment — the party taking ownership of the regulatory consequences of EPA’s endangerment rule; hence the party taking responsibility for the economic fallout.

By denying President Obama bipartisan cover for greenhouse gas regulation under the Clean Air Act, Sen. Murkowski has made EPA’s endangerment rule a political liability for Democrats and a political asset for Republicans in an election year.

That should increase the pressure on moderate Dems and Republicans alike to distance themselves from Democratic leaders and eschew cap-and-trade, which, like EPA’s regulations, would increase consumer energy prices, killing jobs and growth.

Sen. Murkowski’s opening and closing statements in the floor debate clearly and cogently explain how the endangerment rule imperils our economy and representative democracy. Below are some noteworthy excerpts.

Excerpts from Sen. Murkowski’s Opening Statement

The sweeping powers being pursued by the EPA are the worst possible option for reducing greenhouse gas emissions. . . .It would amount to an unprecedented power grab, ceding Congress’ responsibilities to unelected bureaucrats, and move an important debate from our open halls to behind an agency’s closed doors.

* * *

The only similarity I see between the spill in the Gulf of Mexico and EPA’s regulations is that both are unmitigated disasters — one happening now, the other waiting in the wings if Congress fails to adopt this resolution.

* * *

No one is more aware of this uncomfortable fact [that EPA's regulatory net would expand by orders of magnitude] than the EPA itself. That’s why the agency has attempted to dramatically increase the thresholds for greenhouse gases in its so-called tailoring rule. Unhappy with the plain language of the Clean Air Act, the agency plans to lift its limits up to 1,000 times higher than Congress directed. It’s deeply disturbing that EPA did not accept that the Act is simply not structured for this task, and instead attempted to make it so by ignoring the plain language and unilaterally amending it.

* * *

I encourage my colleagues to think about the logic behind the tailoring rule. The EPA is asking us to accept that while greenhouse gases are not in the Clean Air Act, Congress clearly intended them to be regulated under it. At the same time, we’re expected to believe that while explicit regulatory thresholds are in the Act, Congress meant for EPA to ignore them.

* * *

To this day, the agency still has not provided anything close to a full projection of the economic impacts that its economy-wide climate regulations will have. There are two potential reasons why: the EPA either has no cost estimates, or knows they are too astronomical to calculate and release.

* * *

The problem is that BACT [best available control technology] remains completely undefined at this point. It could mean efficiency improvements, expensive add-on technologies, or even fuel-switching requirements. Over time, the EPA would have little choice but to impose all of those requirements and more, regardless of the consequences.

* * *

Again, it’s hard not to find this both surreal and deeply alarming. We need to be growing our economy, not paralyzing it.

* * *

This brings me to my final point: politically accountable members of the House and Senate, not unelected bureaucrats, must develop our nation’s energy and climate policies. And those policies must be able to pass on their own merits, instead of serving as a defense against ill-considered regulations.

* * *

Nor is it [S.J.Res.26] about fuel efficiency — the Department of Transportation is and has been in charge for 35 years, and we don’t need another agency and another standard thrown into the mix to do the same job . . . .The EPA does not need to take over this process, and it should not be allowed to do so under a law that was never intended to regulate fuel economy.

* * *

Bringing climate science, the oil spill, and fuel economy into this debate are attempts at misdirection — “green herrings” intended to convince members to oppose our resolution. But this debate has nothing to do with those topics. . . .It’s about maintaining the separation of powers between the legislative and executive branches, as our founding fathers intended, and rejecting an unprecedented overreach by the EPA into the affairs of Congress.

Excerpts from Sen. Murkowski’s Closing Statement

Most cynical are the efforts to link our resolution to the oil spill. That serves only to cheapen the horrible and ongoing tragedy in the Gulf of Mexico and distract from the reasons why 41 Senators sponsored this resolution. Here’s the real question: why is the EPA attempting to impose economy-wide regulations — regulations that will not help clean up or prevent future accidents — instead of focusing its resources on the spill?

* * *

We’ve heard that our resolution is anti-science. Some of our supporters agree with it [EPA's endangerment analysis], and some do not. The reality is that the science is what it is, and it is beyond the power of Congress to change. But this is an issue of the best way, and the most appropriate body, to respond to the conclusions being reached by members of the scientific community.

* * *

Threatening to disrupt our nation’s economy until we pass a bill by the slimmest of margins, regardless of its merits, won’t be much of an accomplishment. Nor is that approach worthy of the institutions and people we serve. It isn’t appropriate for a challenge of this magnitude. No policy that results from it will achieve our common goals or stand the test of time.

* * *

Today is the day for the Senate to take the threat of EPA climate regulations off the table once and fall all. . . .By passing our bipartisan resolution of disapproval resolution, we can return the debate over climate policy to its rightful home, here in Congress, where duly-elected representatives can represent the best interests of their constituents.

President Obama now wants Congress to spend $50 billion to keep state governments from laying off government employees.  In essence, this is a bailout for the public-employee unions that bankroll liberal politicians.  Earlier, Obama’s allies in Congress proposed spending billions to bail out mismanaged and underfunded union pension funds.

The state governments will never have to pay back any of this bailout money, which rewards them for irresponsibly increasing government-employee pay much faster than inflation, to levels much higher than in the private sector.

By contrast, the private banks that were bailed out have repaid most of the money they received, while their shareholders lost most of their money–92.6 percent at Citibank.

While millions of private sector employees have been laid off in the current recession, few government employees have been.  The few government layoffs that have occurred would not even have been necessary if government employees were willing to accept pay cuts.  For example, in Montgomery County, Maryland, where a handful of teachers may end up being laid off due to a huge budget deficit, the average teacher makes $76,483 in base pay, not counting $30,000 in benefits, and other county employees are paid much better than teachers.  (Even if teacher layoffs occurred across the country–which they won’t–class sizes would still be smaller than they were a decade ago, since there are more teachers with higher pay teaching fewer students in the typical American classroom.)

Obama has not hidden his bias towards these unions.  As he noted in a 2006 book, “I owe those unions. . .When their leaders call, I do my best to call them back right away.  I don’t mind feeling obligated.”

Obama’s $800 billion stimulus package was deliberately crafted to focus on propping up pink-collar government employment at the expense of private-sector blue-collar jobs, where unemployment is concentrated.  The stimulus package is using taxpayer subsidies to replace U.S. jobs with foreign green jobs. It also destroyed jobs in America’s export sector.

The private sector bailouts have been bad enough.  An oversight panel found that the bailout of insurance giant AIG had “poisonous” consequences.

But bailouts of governmental and quasi-governmental entities will end up being far more costly.  The Obama administration lifted a $400 billion limit on bailouts for Fannie Mae and Freddie Mac, the corrupt, government-sponsored mortgage giants that even Obama administration officials admit were at the “core” of “what went wrong” in the financial crisis.

Senate Democrats recently blocked any reform of Fannie Mae and Freddie Mac.  (Obama received $125,000 in contributions from these mortgage giants as a senator.)

At the direction of the Obama administration, Freddie Mac ran up more than $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.  The Obama administration showered the mortgage giants’ executives with $42 million in compensation.

Fannie and Freddie helped spawn the mortgage crisis by creating an artificial market for risky mortgages.  ”From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”  They paid their CEOs millions, and engaged in massive accounting fraud–$6.3 billion at Fannie Mae alone–to increase the size of their managers’ bonuses.  As Government-Sponsored Enterprises, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Politicians love it when housing prices go up. They think it’s a sign of a vibrant and growing economy. That high-price fetish is partially to blame for the housing crisis of 2008.

Officials in Cumberland, Maryland have not learned their lesson. They are doing all they can to boost local housing prices. For example, the city council is currently mulling requiring all new homes to install fire sprinkler systems. For a 2,000 square foot home, that would add $3,000 to $9,000 to the price of the home.

Potential homebuyers are questioning the wisdom of the idea; high and rising prices reduce demand for housing. It’s basic economics. If this mandate passes, fewer Cumberlanders will be able to afford a new home. For a city complaining about its aging housing stock, this is not wise policy.

But this isn’t just an economic issue. It’s a personal freedom issue. As one man told the Cumberland Times-News,

Cumberland resident Don Bohrer suggested that more — and louder — smoke detectors, and not sprinklers, are a reasonable solution. Bohrer cautioned against “Big Brother” government infiltrating private homes any more than already is done.

“We’re losing more of our freedoms every time you pass one of these silly things,”?Bohrer said.

He’s right. One mandate isn’t that big of a deal, though this one is rather expensive. But when you add them all up – federal regulations alone add up to 157,000 pages – you see that regulators have created a monster.

(Hat tip to Megan McLaughlin)

CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the Weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.


CEI Weekly
June 11, 2010

>>Senate Defends EPA Power Grab; Votes Down Resolution
On Thursday, 53 members of the U.S. Senate went on record supporting economy-busting global warming regulations from the Environmental Protection Agency. The resolution, S.J.Res.26, introduced by Senator Lisa Murkowski (R-Alaska) would have stopped the EPA from ‘enacting’ controversial global warming policies through the regulatory back door.  Specifically, it would have overturned EPA’s finding that greenhouse gas emissions endanger public health and welfare. The endangerment finding is both a trigger and precedent for sweeping policy changes never approved by Congress. Read more of what CEI has to say about the resolution:

Iain Murray’s “EPA Vote Coming Down to the Wire” in the American Spectator and “Action Needed Now to Stop EPA Power Grab” in the National Review Online.

Chris Honer’sSenate to Vote on Obama’s Power Grab” in the Daily Caller.


>>CEI Studios Release
[Video] CEI in the News


>>Shaping the Debate
Let Michigan Insurance Consumers Tailor Coverage
Michelle Minton’s Op-ed in the Detroit News

Peekaboo! I See You…Acting Unconstitutionally
Iain Murray’s Op-ed in the American Spectator

Time to set Amtrak Free
Iain Murray and Roger Abbott’s Article in the Washington Examiner Opinion Zone

Tapping the Well of Freedom
Iain Murray’s Op-ed in the National Review Online

Australian Resource Tax Will Dampen Innovation
Fred Smith’s Letter to the Editor in the Financial Times


>>Best of the Blogs
Halter’s Loss a Major Blow for Big Labor
by Ivan Osorio

Statement of Marlo Lewis on S.J.Res.26, Sen. Murkowski’s resolution to overturn EPA’s endangerment finding
by Marlo Lewis

Thank You CBD: Another Reason to Nix EPA Endangerment Finding
by Marlo Lewis


>>LibertyWeek Podcast
Episode 96: Donut Day Disobedience
Richard Morrison and Marc Scribner welcome Chris Horner, Sam Kazman, and Ryan Radia to episode 96. We cover Chicago’s dishonorable gun restrictions, a special interview with bestselling author Christopher C. Horner, civil disobedience on National Donut Day, a shout out to CEI’s annual dinner gala, and the FTC’s proposed “Drudge Report Tax.”


>>Support CEI
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Earlier, President Obama fired the inspector general for the AmeriCorps program after he uncovered fraud by Obama crony Kevin Johnson.  (Johnson did not receive even a slap on the wrist for his fraud; an organization Johnson ran was required to pay $350,000, but it never did so because it was insolvent; and Johnson himself was not ordered by the Obama administration to pay anything.)

Now, the Obama administration is honoring Johnson despite his fraud, inviting him to be a featured speaker at an event for AmeriCorps, the program Johnson defrauded.

The Obama administration fired the inspector general who uncovered the fraud, Gerald Walpin, falsely claiming he was a senile right-winger, even though Walpin was a successful lawyer with recent high-profile court victories who had uncovered millions in fraud against taxpayers, and even though Walpin, a northeastern moderate Republican, was sufficiently non-partisan that he endorsed Obama’s Supreme Court nominee, Sonia Sotomayor.  (The Obama administration even trumpeted Walpin’s endorsement of Sotomayor to push her nomination.)

The key sentence in the letter is this, “‘Denialist’ is an ad hominem argument, the meaning of which is defined entirely by the user, intended to discredit the accused without evidence.”

The “anti-denialism” campaign is, to use a word I rarely employ, a literal conspiracy–albeit something of an open one in that it’s openly pushed by Chris Mooney. (Inset.) The purpose is two-fold.

1) Brand those with the “wrong” scientific views not just as “kooks” or “nuts” but as literally pathological. This from a recent article in The New Scientist:

Instigators of denialist movements have more serious psychological problems than most of their followers. ‘They display all the features of paranoid personality disorder [according to one quoted "expert"]‘ “including anger, intolerance of criticism, and what psychiatrists call a grandiose sense of their own importance.” The “expert” goes on to say, “Ultimately, their denialism is a mental health problem. That is why these movements all have the same features, especially the underlying conspiracy theory.

2) Lump those whose ideas you wish to defame with people who truly are whacko. Thus there’s no difference between not accepting the party line on global warming and believing vaccines cause autism or HIV doesn’t cause AIDS.

It is truly insidious and we’re going to be hearing a lot more from these people.

“American International Group Inc.’s bailout had a ‘poisonous’ effect on the U.S. financial system because it demonstrated the government would protect Wall Street firms from their own risk-taking, said a Congressional” bailout oversight panel.

Earlier, the Obama administration used the $170 billion AIG bailout to give billions in legally unnecessary payments to the Wall Street firm of Goldman Sachs, which is so rich that it has admitted it didn’t even need the money.  Goldman Sachs, one of the Democratic Party’s biggest donors, is using its political connections to reap record profits.

Obama and Congressional leaders later pushed through a Trojan-horse financial “reform” bill backed by Goldman Sachs that would further enrich Goldman Sachs, which was recently accused of fraud by the Securities and Exchange Commission (SEC).

In a party-line vote, Senate Democrats earlier blocked any reform of Fannie Mae and Freddie Mac, the corrupt, government-sponsored mortgage giants that even Obama administration officials admit were at the “core” of “what went wrong” in the financial crisis.

(Obama received $125,000 in contributions from these mortgage giants as a Senator, second only to the corrupt Senator Chris Dodd, who is retiring this year due to his financial scandals, yet is the chief drafter of the financial “reform” bill.)

At the direction of the Obama administration, Freddie Mac ran up more than $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.)  The Obama administration showered the mortgage giants’ executives with $42 million in compensation.

Fannie and Freddie helped spawn the mortgage crisis by acting as loan toilets, buying up risky mortgages and thus creating an artificial market for junk.  “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”  They paid their CEOs millions, and engaged in massive accounting fraud — $6.3 billion at Fannie Mae alone — to increase the size of their managers’ bonuses.  As Government-Sponsored Enterprises, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Banking expert Peter Wallison, who warned for years about the risky practices of Fannie and Freddie, said the financial “reform” bill would lead to “bailouts forever,” contrary to Obama’s claims.

Government pressure on banks to make loans in economically-depressed neighborhoods was a major cause of the mortgage crisis.  That pressure will increase under the financial “reform” legislation.  Legislators approved Obama’s proposal to create a new consumer “protection” agency.  But it may harm rather than help consumers.  Why?  “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”  It would do so without regard for banks’ financial safety and soundness, even though the Community Reinvestment Act was a key contributor to the financial crisis.