Legislative Update: Aggressive Push on Appropriations Begins, But A Continuing Resolution to Keep the Government Funded Likely

Court Rules in favor of the Vinyl Institute and Chemical Industry Overturning EPA’s Bird Testing Mandate

A federal appeals court vacated an order from the U.S. Environmental Protection Agency (EPA) requiring seven chemical manufacturers and processors to conduct new tests to determine the toxicity of a petrochemical solvent on birds. The U.S. Court of Appeals for the District of Columbia Circuit sided with the Vinyl Institute, stating that the EPA failed to provide substantial evidence to justify the need for new tests.

Vinyl Institute Inc. v. EPA marks the first time the D.C. Circuit has addressed the circumstances under which it should set aside an EPA test order under the 2016 Toxic Substances Control Act (TSCA) amendments. These amendments allow the EPA to require new testing supported by substantial evidence. In 2022, Vinyl Institute sued to challenge the bird testing requirement, arguing that the EPA had failed to explain why existing data was insufficient before ordering the time-consuming, expensive tests. The court found that the EPA relied on non-public information that was not included in the official record.

The court has sent the matter back to the EPA to provide adequate support for the testing order. The Vinyl Institute welcomed the decision, urging the EPA to engage with manufacturers early to ensure appropriate data collection. The EPA issued the order in March 2022 to test the chronic toxicity of 1,1,2-trichloroethane, a chemical used in plastics and petrochemical manufacturing, produced or imported into the U.S. in significant quantities over the past decades.

VI President and CEO Ned Monroe welcomed the court’s decision “to stop the unnecessary testing.”  He said, “Moving forward, we hope EPA will proactively engage with manufacturers early in their processes to ensure the collection of appropriate and accurate data.”

Aggressive Push on Appropriations Begins, But A Continuing Resolution to Keep the Government Funded Likely

Upon returning from the Independence Day recess, the Senate Appropriations Committee announced that it would skip FY25 subcommittee markups and go directly to the Full Committee markups to advance its spending bills.  But a tentative agreement on top-line allocations by Senate Appropriations Chair Patty Murray (D-WA) and SAC Vice Chair Susan Collins (R-ME) will set a significantly different course for the upper chamber that will have to be later worked out with its House counterpart.  Despite statutory spending caps, Murray insists on an equal bump for domestic and foreign aid programs in exchange for Republican appropriators’ calls for an increase in defense spending, which would surpass the defense spending cap set in last summer’s debt limit law (P.L. 118-5). Republican appropriators strongly reject this increase in non-defense spending.

The agreement will add $34.5 billion in emergency spending to their FY2025 bills on top of levels agreed to in last year’s debt limit negotiations. Defense accounts would receive an extra $21 billion in emergency spending, while nondefense programs would get $13.5 billion. The agreement would pave the way for a nearly $30 billion, or more than 3 percent increase, for the Pentagon and other security-related agencies above the FY2024 enacted levels. This is a significant increase from the caps in the debt limit law and associated “side deal,” allowing various nondefense increases without technically violating the caps. Last year’s deal allowed for a 1 percent increase in both defense and nondefense spending.

By contrast, the House FY2025 spending bills would provide a 1 percent increase in defense, which aligns with the statutory caps. However, GOP appropriators in that chamber ignored most side deal adjustments, resulting in effective cuts to nondefense programs of between 6 and 7 percent on average.

This week, the Senate began working on moving its usually more non-controversial MilCon-VA, Agriculture-FDA, and the Legislative Branch Appropriations Acts, but partisan disputes and Republican amendments that might grab some of the support from moderate Democrats in tight reelection campaigns could make it harder for appropriators to move forward.

Senate appropriators plan to mark up four additional fiscal 2025 spending bills during the week of July 22, including Commerce-Justice-Science, Interior-Environment, Transportation-HUD, and State-Foreign Operations, following a break for the Republican National Convention.

Meanwhile, the House has passed four of its twelve spending bills, with the Legislative Branch bill pending floor action and the Financial Services bill expected after next week’s recess.   On July 9, the House Appropriations Committee approved 30-26, the FY2025 Energy-Water spending bill, as amended. The bill would provide $59.2 billion in discretionary funding for the Energy Department, the U.S. Army Corps of Engineers, the Bureau of Reclamation at the Interior Department, and related independent agencies.

The House Appropriations Committee continues its markups for the remaining bills. Given the fast-approaching November elections and anticipated disagreements among lawmakers facing an Oct. 1 fiscal deadline, lawmakers will likely have to pass a stopgap measure until Congress returns in a lame-duck session.

EPA Administer Testifies Before House Oversight Committee

EPA Administrator Michael Regan testified on July 10 before the House Oversight and Accountability Committee on the agency’s oversight. Regan highlighted the EPA’s mission to protect human health and the environment while noting the agency’s significant achievements, including addressing the U.S.’s aging water infrastructure, lead pipe replacements, and PFAS contamination and improving resilience to climate change.  He also touted EPA’s proposed rules to reduce pollution from fossil fuel-fired power plants and set pollution standards for several classes of vehicles, as well as its ban on the last remaining type of asbestos in the U.S.

Chairman James Comer (R-KY) and other committee Republicans took the opportunity to criticize the Biden Administration for its climate agenda and burdensome regulatory actions, which they argued have increased energy costs for American consumers and businesses and led to grid instability risks. In his opening statement, Comer highlighted the negative impact of EPA’s regulations on the coal industry.  He said the administration’s regulations have imposed over $1.6 trillion in new federal regulatory costs, with the EPA responsible for $1.3 trillion. He argued that these costs are passed on to consumers, resulting in higher prices, fewer market choices and contributing to inflation and increased utility bills.

Regan expressed the EPA’s disappointment with the Supreme Court’s overturning of the Chevron doctrine but emphasized that the agency would continue to leverage its expertise to protect public health and the environment for all Americans.  House Republicans, however, are seeking to overturn rules made under the Chevron doctrine. Rep. Lauren Boebert (R-CO) and House Committee on Natural Resources chairman, Bruce Westerman (R-AR) questioned Regan about the agency’s future regulatory plans. Regan affirmed that EPA is committed to following the Supreme Court’s ruling and continuing its regulatory work within the new legal framework.  Westerman and Chairman Comer (R-KY) wrote a July 9 letter to EPA seeking documentation on how the agencies intend to comply with the Supreme Court’s directive in Loper Bright.

Ranking Member Jaime Raskin (D-MD) emphasized the urgent need for environmental action due to the accelerating impacts of the climate crisis and criticized some colleagues for denial of climate change.  Raskin praised the Biden Administration’s EPA for prioritizing public health over polluter profits through new regulations on power plants, chemical plants, vehicles, and efforts to reduce lead and carcinogens in drinking water. He also criticized the Chevron deference decision, which he said undermines EPA’s authority and will invite a flood of lawsuits against federal agencies.

Del. Eleanor Holmes Norton (D-DC), Rep. Shontel Brown (D-OH), and Cori Bush (D-MO) praised the agency and the administration for prioritizing clean water infrastructure and supporting the funding to remove lead pipes in the homes in their districts.

New EPA Strategy Aims to Accelerate TSCA Chemical Risk Assessments

The EPA is looking to streamline its process for chemical risk evaluations under the Toxic Substances Control Act (TSCA) by leveraging the prioritization process for existing chemicals. Jeff Morris, director of the Existing Chemicals Risk Assessment Division, stated at an industry conference on TSCA that meeting TSCA’s 3-3.5 year evaluation timeline has been challenging, with only one out of over 30 evaluations completed on time. Morris suggested using the prioritization process to conduct early literature reviews, identify data gaps, and prepare more thoroughly before the formal evaluation clock starts.

As reported in our last legislative update, EPA chemicals chief Michal Freedhoff announced reforms to the prioritization process on June 26. These include seeking broader input on potential candidates and publishing more information for public comment before designating high or low-priority chemicals. This approach aims to better prepare for evaluations and consider risk management early in the process.

Morris emphasized coordination across EPA offices and leveraging other statutory authorities under TSCA section 9 to address risks more effectively. He also highlighted the importance of addressing environmental justice, co-exposures, and susceptible subpopulations early in the evaluation process.

Morris emphasized the critical role of using existing peer-reviewed chemical risk analyses in TSCA evaluations. This is a controversial approach, particularly regarding the use of Integrated Risk Information System (IRIS) assessments, which regulated entities and opponents in Congress consider overreaching, excessively conservative, and inconsistent with scientific standards. EPA is also focusing on utilizing existing peer-reviewed chemical risk analyses. He said the agency is advancing new approach methods (NAMs) for toxicity testing to speed up evaluations and reduce the use of lab animals.

Supreme Court Overturns Chevron Decision, Curtailing Federal Agencies Regulatory Power

The Supreme Court overturned the landmark 40-year-old decision, The  Loper Bright Enters. v. Raimondo overturned Chevron v. National Resources Defense Council, which had given federal agencies broad regulatory power. The court ruled along ideological lines, with Chief Justice John Roberts writing for the conservative majority and Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson dissenting. The ruling is a significant realignment of the roles of the legislative and executive branches of government. The Chevron doctrine, which for reasons of efficiency was designed to give administrators flexibility, had become a catch-all safe harbor for new and bold regulations invented by creative policymakers from old and formerly settled laws to achieve policy goals without congressional consent. Roberts stated that courts must now exercise independent judgment in deciding whether an agency has acted within its statutory authority as intended by the law-writing branch of government.

The Chevron deference had required courts to defer to an agency’s interpretation of laws passed by Congress if it was reasonable. In her dissent, Justice Kagan accused the conservative majority of overstepping their bounds by taking away the legislative branch’s authority granted to agencies for making policy decisions, placing judges at the heart of the administrative process across various issues.  She argues that the ruling gives the court exclusive power over complex regulatory issues and undermines agencies’ expertise. The White House criticized the decision as favoring special interests and undermining agencies’ ability to protect Americans’ health, the environment, and consumer safety.

As a result of the Chevron decision, legal experts expect inconsistent outcomes in court rulings regarding the many legal cases surrounding TSCA, including litigation resulting from the 2016 amendments.  This unpredictable landscape will be due to varying interpretations by different judges and circuit courts. Some experts contend that it could cause agencies to be less extreme in statutory interpretations and make it harder to flip-flop regulations when there are changes in administration.

Biden’s Regulatory Agenda Faces Uncertainty Ahead of 2024 Election

President Joe Biden on July 5 released the spring Unified Agenda, outlining the administration’s timeline for upcoming regulations, amid concerns that these may be rolled back if former President Donald Trump wins the next election. This comes after a recent regulatory push to finalize key rules to protect them from quick repeal if Biden loses the presidency. The Congressional Review Act allows for repealing regulations finalized late in a presidential term, making current and upcoming regulations vulnerable. Furthermore, the recent Supreme Court decision overturning the Chevron doctrine may further complicate the regulatory process, impacting the feasibility of the proposed timelines.

The Agenda details proposed rules from the EPA’s highly anticipated rule on greenhouse gas emissions from existing natural gas power plants, which is expected in December, along with 50 other Clean Air Act rulemakings on the roster.  EPA expects to finalize restrictions for three widely used “high priority” chemicals, with the risk management rules on trichloroethylene and carbon tetrachloride slated to be published this September and perchloroethylene expected in August.  By August, the Biden administration will finish the last of its rules on implementing the 2016 amendments to the TSCA that update its new chemicals reviews framework.   According to the agenda, the agency is still on track to finalize a landmark regulation to eliminate lead from drinking water by October. The rule would give utilities 10 years to replace lead pipes, which have caused major public health crises in multiple cities.

Democratic Party in Turmoil in the Wake of President Joe Biden’s Disastrous Debate 

President Biden’s lackluster debate performance on June 27 has sparked turmoil within the Democratic Caucus, with some party members questioning his viability for another term. The Biden Campaign insists the performance was an isolated incident and has been working to reassure Americans and its base of Biden’s competence. However, media pundits, donors, and Democratic delegates have intensified their criticism of Biden’s advisors’ attempts at damage control and how the campaign is handling the post-debate wake.  Many of them are joining a chorus of Democrats suggesting Biden step down. Concerns are also growing among worried Members of Congress and party insiders, who face increasing pressure to express their stance on Biden’s re-election.

Party strategists are exploring various scenarios, including the potential for nominating new candidates before the Democratic National Convention in August.   Vice President Kamala Harris appears to be the most logical successor should Biden step aside. Despite the controversy, Biden remains adamant that he is going nowhere and will continue his campaign. He continues to be supported by House and Senate Leaders and key factions, such as the Congressional Black Caucus and the Congressional Hispanic Caucus, although this support mainly comes from members in safe districts.

Down-ballot Democrats are increasingly worried about Biden’s declining poll numbers, which have led election analysts to change their predictions to show greater losses for Democrats in the House. Signals this week from Majority Leader Chuck Schumer (D-NY) and former House Speaker Nancy Pelosi (D-CA) suggest they are open to the possibility of other nominees heading the ticket, but they made it clear that they are currently backing Biden.

Senator Peter Welch (D-VT) became the first Senate Democrat to join nearly a dozen House members in openly calling for Biden to step aside. The Democratic Party’s internal strife continues as more lawmakers express doubts about Biden’s electability, stopping short of directly urging him to withdraw. Biden and his close advisors are scheduled to meet with Schumer and Senate Democrats today. Watchers continue to speculate whether it is just a matter of time before one of these meetings becomes a turning point for Biden or will only make him dig his heels in more.