Former Regulation Chief Blasts Administration

It’s not often that we reprint editorials from other writers, but it’s also not often that a prominent authority on environmental regulation perfectly reflects our point of view. But that’s exactly what happened on Tuesday when George Washington University Professor Susan Dudley wrote in the Wall Street Journal about EPA’s claims regarding the Cross-State Air Pollution Rule (CSAPR). Dudley served as Administrator of the Office of Information and Regulatory Affairs, under President George W. Bush, a post currently held by Cass Sunstein.

Over the past four years, we’ve listened to the EPA preach incessantly about the financial benefits that its regulations will have on the economy once they are implemented. And for the past four years, PACE and other voices have confronted these bogus claims and argued that the agency is overstepping its authority by attempting to create new costly job-killing and electricity-price hiking regulations. Now, one of the most prominent newspapers in the world – The Wall Street Journal – has called out the agency. In an editorial last week, the newspaper used the recent judicial overturning of CSAPR to illustrate the EPA’s disregard for this country’s laws in order to fulfill its own misguided agenda.

Dudley responded to the editorial, and her opinion follows. You can also read it online here. Kudos to Dudley for telling it like it is.

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As your editorial, “EPA Smack-Down Number Six,” (Aug. 22) points out, the U.S. Court of Appeals for the D.C. Circuit’s remand of EPA’s Cross-State Air Pollution Rule (CSAPR) is indeed a setback for the Obama administration. But perhaps the biggest embarrassment is that it undermines the administration’s oft-repeated claims that its smarter regulators have generated much higher benefits than have previous administrations. According to the Office of Management and Budget estimates, CSAPR contributes over 40% of the $90 billion per year in net benefits which the administration claims from all regulations issued since January 2009. As my analysis in the current issue of the journal Business Economics shows, these benefit estimates should be viewed with considerable skepticism. But even taking them at face value, the Obama administration’s claims of regulatory genius compared to its predecessors are on shaky ground, especially now that the court has found one of its signature rules to be illegal.