Legislative Update: Congress Works on Must Pass Bills as Republicans Target Biden EPA Regulatory Agenda

Congress Works on Must Pass Bills as Republicans Target Biden EPA Regulatory Agenda 

Congress achieved some recent successful bipartisan accomplishments, such as passing a foreign aid bill and rapidly coming together to pass TikTok and data broker legislation. However, such moments will likely to dwindle as the election season intensifies. Congress will focus on “must-pass” bills, which include the Farm Bill, FY25 appropriations bills, and the National Defense Authorization Act (NDAA). Individual legislative priorities will likely have to rely on hitching a ride on one of those bills if they will see passage.

Committees have started their work on appropriations bills and the NDAA.  Meanwhile, the House and Senate remain divided over the Farm Bill.  Senate Agriculture Committee Chair Debbie Stabenow (D-MI) and House Agriculture Committee Chair Glenn “GT” Thompson (R-PA) have each introduced their versions of the Farm Bill. Stabenow’s bill, named the Rural Prosperity and Food Security Act, consolidates over 100 bipartisan bills and aims to have the bill signed into law by the end of the year.  It focuses on maintaining robust support for farmers and strengthening international food aid programs to address the global hunger crisis. Thompson has moved quickly, scheduling a committee markup for May 23. Both versions prioritize trade promotion and the development of international markets through ongoing USDA program funding, including the Market Access Program and the Foreign Market Development Program. Additionally, Stabenow’s version seeks to modernize the Food for Peace program and establish infrastructure for global school feeding initiatives.

Similarly, A bipartisan effort to expand the child tax credit and restore some corporate tax breaks is facing significant opposition within the Senate, particularly from Republican leaders, putting its passage at risk despite strong support in the House. Reservations about the expanded child tax credit and with key provisions from the Trump-era Tax Cuts and Jobs Act expiring in 2025, some Republicans prefer to address tax policy changes next year when they might control the Senate, anticipating they would have greater leverage.

The Senate is also facing gridlock regarding expediting the approval processes for renewable and fossil fuel-related infrastructure. Senate Majority Leader Chuck Schumer (R-NY) recently expressed his skepticism regarding the viability of a deal on permitting reform for energy projects in the current legislative climate, describing such an agreement as “virtually impossible.”  Despite ongoing discussions, a tangible resolution remains elusive.

Furthermore, several Congressional Review Act (CRA) resolutions have been proposed challenging the Biden administration’s anti-energy agenda regulatory agenda. However, given President Biden’s consistent vetoes and the high threshold required for an override, these resolutions are more likely political to document legislative positions on environmental regulations going into the November elections.

Senator Joe Manchin (D-WV), along with Senator Dan Sullivan (R-AK) and Representative Garret Graves (R-LA), recently announced a CRA resolution aimed at overturning the Biden administration’s latest modifications to the National Environmental Policy Act (NEPA), criticizing the increase in bureaucracy and potential impact on essential projects.

Republican Senators Pete Ricketts (R-NE), John Hoeven (R-ND), and Shelley Moore Capito (R-WV) have all vowed to introduce CRA resolutions to rescind EPA’s four fossil fuel-fired power plant rules it recently published.  Republicans also recently introduced two Congressional Review Act (CRA) resolutions to counter the Environmental Protection Agency’s (EPA) regulations on emissions for cars and trucks.  These resolutions target EPA’s standards for model year 2027 and later for both passenger and heavy-duty vehicles.

Amid these legislative maneuvers, 25 Republican-controlled states, led by West Virginia and Indiana, have already filed a lawsuit against the Biden administration seeking to invalidate the EPA’s new power plant rule. They argue that the rule, which mandates that coal plants operating beyond 2039 install carbon capture technology to reduce emissions by about 90%, is unlawful. This requirement, they claim, would cause many coal-fired plants to shut down due to the impracticality of installing such technology, which they believe is not ready for widespread use.  They argue that the rule violates the “major questions” doctrine as proscribed in the 2022 Supreme Court ruling (West Virginia v. EPA), which held that the EPA requires clear congressional authorization for actions that significantly reshape the nation’s power sector.

Industry and GOP Gear Up to Challenge EPA’s New Safety Regulations

Republicans and industry witnesses banded together to criticize the Biden administration’s proposed risk management program (RPM) Rule during a May 7 House Energy and Commerce Subcommittee on Environment, Manufacturing, and Critical Materials hearing titled “EPA’s RMP Rule: Failures To Protect The American People And American Manufacturing.”  EPA is facing imminent litigation challenging the rule. Critics, including Oklahoma Attorney General Gentner Drummond and industry lawyers, argue that the rule exceeds EPA’s statutory authority and imposes undue burdens on businesses, particularly in the oil and gas sector.

The rule, revitalized after being scaled back during the Trump administration, now includes requirements such as performing safer technology alternatives analyses at accident-prone facilities and considering climate impacts in safety plans. Additional enhancements include mandatory third-party audits and increased public disclosure requirements. While various groups are expected to file lawsuits, House Republicans are also pursuing a CRA resolution to overturn the rule.

Republicans argue that the rule is part of an ongoing regulatory blitz that complicates production and increases costs, suggesting that it departs from reasonable risk management practices by imposing excessive burdens on industries already heavily regulated under existing safety and environmental laws. Subcommittee Chairman Buddy Carter (R-GA) emphasized its impact on vital sectors such as chemical manufacturing, petroleum refining, and agricultural chemical distribution. Key criticisms focus on the rule’s data disclosure requirements, which Carter argues force facilities to share confidential information with a broad and vaguely defined group within a six-mile radius. Rep. John James (R-MI) also suggests that the increased regulatory burdens could spur unnecessary citizen lawsuits against compliant industries. Concerns were also voiced by full committee Chair Cathy McMorris Rodgers (R-WA) about the rule potentially driving manufacturers overseas due to stringent requirements and a rushed comment period.

Richard Erstad of Hawkins, Inc., representing the Alliance for Chemical Distribution, labeled the rule arbitrary, arguing it imposes significant burdens without demonstrated need. The rule’s most contentious aspects, according to Justin Savage, an industry lawyer, are the safer technology alternatives analysis (STAA) and mandatory third-party audits, which departed significantly from the proposed rule to impose expanded obligations. These elements, along with the rule’s insistence on independent auditors who must avoid working with the audited facilities for two years post-audit, are expected to be focal points in upcoming lawsuits and contribute to a potential scarcity of qualified auditors. Savage also noted that the rule’s fate could be influenced by the upcoming presidential election, referencing previous reversals under the Trump administration and expressing concerns about including climate change considerations in facility planning.

Republicans Continue to Hammer EPA’s Regulatory Strategies as EPA Seeks Funding for Expanded Workforce for Future Regulations

EPA Administrator Michael Regan told House appropriators on April 30 that the requested increase in the agency’s workforce for FY2025 is aimed at expanding its capability to develop future regulations for the cement and other manufacturing sectors. This follows the recent rollout of comprehensive rules targeting the power-generating sector. Regan highlighted that the request for 2,000 additional full-time equivalents (FTEs) would facilitate the creation of technology standards enabling industries to make informed, long-term investments. He used the recent power plant rules as examples of how consolidated regulations can offer co-benefits and help industries plan better with aims to address the cumulative environmental impacts effectively.

Republican appropriators took the opportunity to grill Regan on the agency’s recent overreaching power plant rules.  They argue that the rules will force a shift away from coal plants, which they warn could significantly raise taxpayer costs and create grid instability.  Full Committee Chair Rep. Cathy McMorris Rodgers said the agency’s rules threaten America’s manufacturing base and could lead to power blackouts—sentiments shared by other Republicans, including Rep. Troy Balderson (R-OH).

Regan faced similar resistance on May 15 when he appeared before the House Energy and Commerce Subcommittee on Environment, Manufacturing, and Critical Materials, defending the administration’s policies and FY25 budget.  Chairman Buddy Carter, whose district in Southeast Georgia has significant natural resources and a burgeoning economy, criticized the new particulate matter (PM 2.5) standards, arguing that they could hinder manufacturing growth due to stringent permitting requirements. Carter denounced the EPA for potentially restricting economic prosperity and exacerbating dependency on foreign entities like China, especially in the electric vehicle (EV) battery sector. Furthermore, the discussion touched on the administration’s aggressive push towards electrification, perceived as undermining traditional energy sectors like coal-fired power, with the Clean Power Plan 2.0 posing legal and operational challenges.

In his testimony, Regan emphasized that the proposed budget of nearly $11 billion, including a $1.8 billion increase over EPA’s current funding, aims to continue improving air and water quality, address the climate crisis, and promote environmental justice. Significant funding has been allocated for air quality improvements and initiatives to clean up water contamination, including a substantial investment in lead pipe replacement and drinking water upgrades. The budget request will also back programs that are not covered by the supplemental funding provided in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, such as responding to emergencies like the East Palestine, Ohio, train wreck and the bridge collapse in Baltimore as well as speeding up reviews of new chemicals and administering earmarks from members of Congress.

STB Adopts Final Rule For Reciprocal Switching Excluding Rail Traffic Under Contract

The Surface Transportation Board (STB) unanimously adopted a final rule aimed at enhancing rail service quality by facilitating the establishment of reciprocal switching agreements. Unfortunately, the rule explicitly omits any rail traffic conducted under contract, barring most rail customers from accessing competitive rail services.

Under the new regulation, shippers and receivers served by only one Class I rail carrier in a terminal area can petition the STB to mandate a reciprocal switching agreement if their service falls below certain performance standards. This agreement allows for an alternative line haul carrier to offer services, enhancing competition and improving service levels. The agreements are to last between three to five years.

The final rule sets specific performance standards regarding service reliability, consistency, and local service, and provides measures for addressing service failures under extraordinary circumstances. This rule is a step towards rectifying persistent service issues within the industry, ensuring better accountability and service delivery from rail carriers but industry leaders say that it falls short.

“It’s good to see that there is unanimous agreement at the STB that the status quo is not acceptable and freight rail reform is needed. Unfortunately, the Board’s reciprocal switching rule is too narrow to help most shippers and does not address the heart of the matter – removing barriers to competition for all freight rail customers,” American Chemistry Council President and CEO Chris Jahn said in a statement. “It simply does not go far enough and do enough to incentivize the railroads to provide reliable and competitive service.”

Robert Primus Poised to Lead  STB as Senate Confirms Patrick Fuchs to Second Term

President Joe Biden designated Robert Primus, a seasoned professional with extensive experience in Congress and the federal legislative process, as the next chairman of the Surface Transportation Board (STB), effective May 11, 2024. Primus, who has been an STB member since January 2021 and previously served as vice chairman, is poised to succeed Martin Oberman, who retired as chairman. With a career spanning over three decades, Primus has a deep background in various congressional and transportation matters, having worked with influential lawmakers and served as a lobbyist before his appointments on Capitol Hill and the STB.

On May 14, the U.S. Senate confirmed Patrick J. Fuchs’s nomination to a second five-year term as a member of the STB. Fuchs was previously a Republican staff member on the  Senate Commerce Committee.  Before joining the Committee, Fuchs was a policy analyst with the White House Office of Management and Budget, a State Department Presidential Management Fellow serving in The Hague, Netherlands, and a research assistant at the National Center for Freight and Infrastructure Research and Education.   He was re-nominated on January 25, 2024, and his second term expires on January 14, 2029.  STB members are limited by statute to two terms.

Oberman’s retirement leaves the five-member STB short a member, dividing the Board politically and potentially leading to some gridlock on more controversial issues and decisions.  Five Democrats are under consideration by the White House to replace Oberman, yet securing Senate confirmation for a Democratic candidate this year faces difficulties. Senate Republicans, who can obstruct a floor vote on a nominee, prefer to leave Oberman’s Democratic seat unfilled, potentially allowing it to be filled by a Republican nominee if Donald Trump is elected in November.

EPA Reports Soaring Clean Water Infrastructure Needs

The EPA reported to Congress it needs $630.1 billion over the next 20 years for clean water infrastructure,  a 73% increase in their projections since their last evaluation a decade ago.   This increase sets the groundwork for a significant congressional debate regarding renewing the EPA’s clean water state revolving fund (SRF), set to expire in 2026. The 2022 Clean Watershed Needs Survey (CWNS), which now includes additional categories like nonpoint source (NPS) control and decentralized wastewater treatment systems, reflects broader infrastructure needs influenced by aging systems and climate change.

EPA says this enhanced documentation and improved data collection methods contribute to the more substantial figures. States and water utilities, recognizing the SRF’s impending expiration, have intensified their advocacy efforts, launching initiatives like “Save the SRFs” to ensure the program’s continuation and adequate funding. Moreover, concerns are being raised about the sustainable funding of the SRFs, especially with the potential impact of congressionally directed spending, which could diminish the funds available for future loans.

Persisting Challenges Remain on the UN Plastics Treaty

The fourth meeting of the United Nations plastics treaty talks in Ottawa, Ontario, concluded with diplomats making significant strides despite their persistent challenges. The meeting ended with a general agreement on the need for global rules and mandates on product design, composition, performance, and extended producer responsibility.

Countries remained divided over regulating problematic plastics, concerning chemicals, and virgin resin. Despite these divisions, the diplomats agreed to establish two intersessional groups to delve deeper into specific aspects before the next meeting in Busan, South Korea. One group will focus on financial mechanisms, potentially exploring extended producer responsibilities and fees on virgin resin. The other will address design issues, such as recyclability and reuse systems, alongside concerns about problematic plastics and related chemicals.

These topics will be addressed before the next committee meeting, INC-5, in Busan, Korea. Despite some countries’ calls for production limits and reductions, primary plastic polymers are excluded from the intersessional agenda.