McCarthy Digs in on EPA Budget, Power Plan in Testimony

Energy and Climate Report provides current, thorough coverage of clean energy, efficiency, and climate change legislation, regulation, policy, legal developments, and trends in the U.S. and...

By Brian Dabbs

March 22 — The Environmental Protection Agency will continue to support state implementation plans for the Clean Power Plan, EPA Administrator Gina McCarthy told a House Appropriations Subcommittee in March 22 testimony, adding that the $50.5 million allocated for the plan's implementation in the White House fiscal year 2017 budget does not “run contrary” to the Supreme Court's February stay on the rule.

“Though the Supreme Court has temporarily stayed the [Clean Power Plan], states are not precluded from voluntarily choosing an implementation plan,” McCarthy told the Appropriations Subcommittee on the Interior, Environment and Related Agencies. “EPA will continue to assist those states that voluntarily decide to do so.”

Twenty-five states are signaling their intent to advance those plans, despite the removal of a September 2016 deadline for state proposals, McCarthy told the Interior Subcommittee and, later in the day, a House Energy and Commerce hearing. Still, many states understand the Supreme Court paused the CPP regulatory mandates, hinting that they are not forging a path forward, she said.

In testimony before both congressional panels, McCarthy fielded heated questions on issues across the EPA policy spectrum, from the Flint lead contamination crisis to regulatory hits on coal production and Diesel Emission Reduction Act (DERA) viability. Lawmakers couched their challenges in references to President Barack Obama's Fiscal Year 2017 budget figures, but also used the hearings as a forum to push for more information on their priorities.

Coal Representatives Criticize McCarthy

Appropriations Committee Chairman Hal Rogers (R-Ky.), sitting in on the Interior hearing, accused McCarthy of killing coal jobs through CPP and other regulations.

Rep. Evan Jenkins (R-W.Va.) challenged McCarthy on the same front, saying her failure to visit West Virginia in her current role as administrator illustrated her inability to grasp the devastation the EPA has brought to coal country.

“Your war on coal impacts so many more people and businesses than just the thousands of direct mining jobs,” Jenkins said at the Interior hearing, pointing to the negative effect of lost coal revenue on local police and other critical public services. “Congress is trying its best to stop your agenda, an ideologically driven agenda, hell-bent on shutting down the use of fossil fuels for energy production.”

Rogers said the EPA collaborated with “extreme” environmental groups like the Sierra Club to formulate the coal rule.

EPA Aims to Maintain Coal Production

Despite those concerns, the EPA is not angling to eliminate coal production from U.S. industry and the power supply through CPP regulations, McCarthy said.

“We believe the standards are reasonable and not just appropriate but cost effective as well or else we would not have established them,” she said. “We are not looking to preclude coal from being a significant part of the energy system and we project it will continue to be.”

Market forces, in fact, are jeopardizing the profitability and viability of Appalachian coal, McCarthy said. She, however, deflected questions on EPA economic assessments in the afternoon hearing, while pledging written follow-up responses.

“The bottom line is if you lost seventy power plants, that has an effect,” Energy and Commerce Subcommittee on the Environment and Economy chief John Shimkus (R-Ill.) said.

Skimkus lashed into the Obama EPA's efforts as a whole, asserting that the EPA is overstepping its authority.

“The problem, and the reason we’ve cut your budget, is that your agency, is prioritizing new rules and regulations that Congress never told you to pursue in the first place,” Shimkus said. “You’re not doing a bad job, you’re doing the wrong job…And that’s a big problem. It’s a problem because the Clean Power Plan you’re working on is unconstitutional.”

Interior Subcommittee Chairman Ken Calvert (R-Calif.) said the EPA budget proposal for Fiscal Year 2017 requests $127 million more than the previous year, despite a modest $40 million hike in government-wide discretionary spending as part of the budget agreement brokered in late 2013.

“That number excludes another $300 million proposed outside of the discretionary caps,” Calvert said.

Lawmakers Continue to Highlight Flint

Democrats at both hearings pushed aggressively for more EPA funding in order to avert future crises like the lead contamination of Flint's drinking water supplies.

Ranking Member on the House Energy and Commerce Committee Frank Pallone (D-N.J.) praised the $160 million increase for the Drinking Water State Revolving Fund in the president's budget proposal.

“Our drinking water systems need more funding to help provide clean and safe drinking water to communities,” Pallone said. “While I am happy to see this funding increase, I must reiterate that so much more is needed. The Drinking Water SRF has been underfunded for years. According to the EPA's most recent Needs Survey, $385 billion is needed over the next 20 years to modernize and repair our drinking water systems.”

The Flint crisis, however, represents EPA's deviation from congressional directives, Energy and Commerce chief Fred Upton (R-Mich.) said, echoing the Shimkus remarks.

“The heartbreaking events unfolding in Flint, Michigan are a sign that EPA has strayed from its core mission,” Upton said. “Make no mistake, the system failed at all levels that resulted in the lead contamination problems with Flint’s water supply, but it is clear that EPA’s poor performance of its duties under the Safe Drinking Water Act was a part of the problem.”

McCarthy, speaking at the Appropriations hearing, said 10 million lead pipe lines need to be monitored in the U.S., but could not point to a specific financial figure necessary to combat the crisis in Flint.

Budget Shifts DERA to Mandatory Side

The president's budget slashes discretionary funding for the DERA program by 80 percent, Calvert said. The administration is proposing a shift to the mandatory side of the ledger for DERA funding, McCarthy said.

“We know this program has had great impact,” said McCarthy referring to the grant program geared toward diesel air emission reductions. “We're going to continue to support it as best we can, and there is an opportunity that the president has offered to have that done in a different way outside of EPA's budget.”

Calvert shot that proposal down, however, calling it an administration budgetary “gimmick.”

“We're not going to get that into mandatory spending. Realistically that's not going to happen,” Calvert said. “So we're going to have to find money within the discretionary budget.”

Republican appropriators pushed hard for more funding for several programs and other priorities, despite urging a reduction in the overall EPA budget. Rep. Mike Simpson (R-Idaho) shed light on that conflict, and the uncertain path forward.

“We talk about the Long Island Sound needing more funding, the Puget Sound needing more funding, the Great Lakes Initiative needing more funding, DERA needing more funding, rural water technical programs needing more funding ... all that given the circumstances that we're probably going to have at least a flat, maybe a reduced, budget in that overall budget in this coming year,” Simpson said. “That's the challenge that we're going to face given the need that's out there. And we're going to have to balance those competing interests and try to put together a bill because it's not just EPA and programs within the EPA that we will have some differences on.”

Budget Resolution Relevance?

Appropriations Chairman Hal Rogers (R-Ky.) told Bloomberg BNA, in an interview after the Interior Subcommittee hearing that appropriators will continue to forge ahead regardless of budget resolution action. The House Budget Committee rejected two Flint-related amendments and passed its resolution on March 16 .

“We're continuing that process, hoping that the budget itself gets resolved,” Rogers told Bloomberg BNA after his testimony. “We're a little ways away from considering their budget, but the real debate right now is whether or not a House budget will be at [$1.07 trillion] or [$1.04 trillion]. And the Senate is beginning to markup their bills at $1.07 trillion. We're beginning to mark our bills up at $1.07. If the House goes down to $1.04 trillion, the Senate will not accept those bills. So we're headed directly, in that instant, to a [continuing resolution].”

Members of the conservative “Freedom Caucus” prefer the $1.04 trillion top-line number for discretionary spending, Appropriations Committee spokeswoman Jennifer Hing told Bloomberg BNA. The Budget Committee has not yet released its legislative report on the resolution, which includes function-by-function outlays, Budget spokesman Ryan Murphy told Bloomberg BNA on March 22.

Interior Subcommittee Ranking Member Betty McCollum (D-Minn.) called the budget resolution, which sets a comprehensive budget level at just under $4 trillion, “devastating” in a March 22 interview with Bloomberg BNA.

“The Republican leadership is failing to make strategic investments in treating water and making sure we have safe drinking water. Budgets are about our values and our choices. We can either continue to make sure that oil companies continue to get tax subsidies, or we can look at making strategic investments,” she said. “If you look at just what [the EPA is] at right now, they're at 2010 and 2012 levels, and we just had an emergency in Flint, which if we do not pass a supplemental for will come out of their bottom line. This is not the way to protect drinking water in the United States.”

To contact the reporter on this story: Brian Dabbs in Washington at

To contact the editor responsible for this story: Larry Pearl at