Chamber to fight EPA's GHG program, excessive financial reform

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Jan. 12 -- The US Chamber of Commerce will continue efforts to keep the US Environmental Protection Agency from implementing greenhouse gas emission regulations under the Clean Air Act, Chamber Pres. Thomas J. Donahue said in his annual State of American Business address. Chamber also plans to fight excessive financial reforms that would unduly restrict use of derivatives, he added.

The rules are part of a federal “regulatory tsunami” that poses the biggest single threat to jobs, US global competitiveness, and the future of American enterprise, Donahue maintained.

“At the federal level alone, regulations already fill 150,000 pages of fine-print text and cost Americans $1.7 trillion/year,” he said. “Many of these rules are necessary and business strongly supports them. Yet in recent years, we have seen an unprecedented explosion of new regulatory activity. Furthermore, the [Obama] administration is likely to turn increasingly to the regulatory agencies now that getting legislation out of Congress could be more difficult.”

Donahue said the nation’s largest business organization would go on fighting what it considers unilateral regulation of GHGs under the CAA, which EPA began to develop following a 2007 US Supreme Court ruling that it the federal agency has that authority. The regulations began to go into effect at the beginning of 2011 with a tailoring rule which initially targets refiners, chemical plants, and other major industrial facilities believed to be the largest GHG emitters.

The regulations, if unchecked, eventually could involve 6 million entities, including small businesses, hotels, warehouses, and churches, Donahue warned. “Before any of these facilities could build or expand, they would have to get preconstruction permits that take 6-9 months to obtain at a cost in excess of $100,000/permit,” he said. “Even then, the permits could be challenged in court. This could seriously disrupt construction activity across our nation and throw a lot of people out of work.”

He said Chamber would support bipartisan legislation that would delay or stop EPA’s current GHG program and return efforts to address global climate change to Congress.

Dodd-Frank reforms
Donahue said Chamber also is heavily involved in the regulatory rulemaking triggered by passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. He noted that the new law contains 259 mandated rulemakings, 188 suggested rulemakings, 63 reports, and 59 studies, adding, “My grandchildren will be old and retired before it is all implemented.”

“We are particularly concerned that the new Consumer Financial Protection Bureau does not use its broad authority in ways that deny small businesses and consumers the credit and financial products they need,” he said. “We want to make sure that Main Street end-users are still able to use derivatives in an effective way to manage their legitimate business risk—without sidelining billions of dollars in productive capital and costing tens of thousands of jobs.

“And although our pending litigation against the [US Securities and Exchange Commission] over its proxy access rule has delayed its implementation, that battle is far from over,” Donahue said. “We’ll continue to oppose proposals that would expand the ability of special interest shareholders such as unions to exploit proxy access rules to the detriment of companies, jobs, and all shareholders.”

He said Chamber would use a broad array of tools to address these and other regulations that it considers excessive, including efforts to limit funding and more applications of the Congressional Review Act. “Yet the time has come to reform the regulatory process itself—to restore some badly needed balance and accountability to the system. This could be done by giving Congress the right to vote up or down on major rules before they take effect, and by strengthening the burden of proof that all agencies would have to demonstrate in court when they are imposing major rules,” he suggested.

Donahue said new regulations also provide new opportunities for lawsuits. “The need for legal reform as well as courtroom advocacy on behalf of business will be greater than ever in the coming year and beyond,” he said. “Our Institute for Legal Reform and our law firm, the National Chamber Litigation Center, will therefore play a critical role in the Chamber’s ongoing program of work.”

Chamber also will form a new group of regulatory experts to tell policymakers, the media, and the public the story of massive impacts of regulations on business, he said.

Contact Nick Snow at nicks@pennwell.com.

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