When I joined the Food and Drug Administration in 1979, I was essentially apolitical and knew next to nothing about federal regulation. A science nerd, I had spent the previous 16 years in college, graduate school, medical school and post-doctoral training. It didn’t take long until I learned about the jungle of government bureaucracies. One of the harshest lessons concerned the perfidy and incompetence of one of FDA’s siblings, the Environmental Protection Agency.
I found EPA to be relentlessly anti-science, anti-technology and anti-industry. The only thing it seemed to be for was the Europeans’ innovation-busting “precautionary principle,” the view that until a product or activity has been definitively proven safe, it should be banned or at least smothered with regulation. In fact, during international discussions and negotiations over the harmonization of biotechnology regulations in which I participated, EPA often seemed allied with the European Union and committed to working against U.S. interests.
I was baffled by all this until I realized that EPA was a miasma populated by the most radical, disaffected and anti-industry discards from other agencies, and that because it was supposed to protect Americans from bad things — polluted air and water and dangerous chemicals, for example — there was entrenched institutional paranoia and an oppositional worldview.
During the ensuing three decades, in administrations Democratic and Republican alike, little has changed at EPA. The heads of the agency have ranged from the clueless to the corrupt. The current administrator, Lisa Jackson, seems unaware that regulation has costs, direct and indirect; that regulators should strive to limit the intrusiveness of oversight to the level that is necessary and sufficient; and that her agency has myriad deficiencies in both policies and personnel.
Policy by policy and decision by decision, Jackson and her colleagues (along with their counterparts at other regulatory agencies) have decimated the nation’s competitiveness, ability to innovate and capacity to create wealth. A recent analysis from the Competitive Enterprise Institute estimated that the annual cost of compliance with EPA regulations alone is more than a third of a trillion dollars.
It should hardly come as a surprise, then, that the Wall Street Journal/Heritage Foundation’s 2013 Index of Economic Freedom shows that the United States has slipped to tenth place, behind Chile and Mauritius.
Jackson’s EPA has been a job-killer. Unscientific and obstructionist policies toward once-promising R&D areas such as the use of genetically engineered bacteria to clean up oil spills and toxic wastes and kill insect pests have caused academics and companies to abandon entire R&D sectors that could have created jobs and wealth, possibly even America’s Next Big Thing.
Some of the most onerous policies introduced on Jackson’s watch include stricter gas-mileage standards, an increase in the amount of ethanol in gasoline from 10 percent to 15 percent and more stringent ambient air standards under the Clean Air Act. Particularly damaging was an EPA rule finalized in February 2012 that created new emissions standards for coal- and oil-fired electric utilities. According to an analysis by Diane Katz and James Gattuso of the Heritage Foundation, “The benefits are highly questionable, with the vast majority being unrelated to the emissions targeted by the regulation. The costs, however, are certain: an estimated $9.6 billion annually. The regulations will produce a significant loss of electricity generating capacity, which [will] undermine energy reliability and raise energy costs across the entire economy.”
Because many EPA policies and actions torture both statutes and common sense to a degree that approaches malfeasance, it’s no surprise that the agency is regularly reined in by the federal judiciary. In January, for instance, a federal court ruled that the EPA couldn’t regulate the amount of water flowing through Virginia’s Accotink Creek watershed. (The EPA argued that storm water is a pollutant under the Clean Water Act because it contributes to sediment buildup.) This regulatory action would have cost the county at least $300 million and Virginia’s Department of Transportation an additional $70 million.
Unscientific policies and regulatory grandiosity and excess are not EPA’s only failings; neglecting to weigh costs and benefits is shockingly common. In one analysis by the Office of Management and Budget, of the 30 least cost-effective regulations throughout the government, the EPA had imposed no fewer than 17. For example, the agency’s restrictions on the disposal of land that contains certain wastes prevent 0.59 cancer cases per year — about three cases every five years — and avoid $20 million in property damage, at an annual cost of $194 to $219 million. Moreover, EPA systematically exaggerates benefits and underestimates costs.
The EPA’s repeated failures should not come as a surprise because the agency has long been a haven for scientifically insupportable policies perpetrated by anti-technology ideologues. Lisa Jackson herself is a veteran of 16 years at the agency, having developing some of its most unscientific, wasteful and dangerous regulations. She worked on Superfund (officially, the Comprehensive Environmental Response, Compensation and Liability Act), an ongoing EPA program intended to clean up and reduce the risk of toxic-waste sites. It was originally conceived as a short-term project — $1.6 billion over five years, to clean up some 400 sites (by law, at least one per state and, not coincidentally, about one per congressional district). But it has grown into one of the nation’s largest public works projects: more than $30 billion spent, on about 1,300 sites.
How could cleaning up toxic waste sites not be a good thing? Well, various studies have attempted to evaluate the impacts of Superfund’s massive and costly cleanups, but the results are equivocal. Putting that another way, after the expenditure of tens of billions of dollars, no beneficial results have been demonstrable. On the other hand, some Superfund projects have definitely caused harm. University of California economics professor J. Paul Leigh has analyzed the occupational hazards of environmental cleanup projects and concluded that the risk of fatality to the average cleanup worker — a dump-truck driver involved in a collision or a laborer run over by a bulldozer, for example — is considerably larger than the cancer risks to individual residents that might result from exposures to untreated sites.
EPA official Carl Mazza admitted that the agency is aware that Superfund policies often conflict with risk analysis, but “political considerations” don’t permit rational, data-driven decision-making.
There are other ways in which EPA’s regulatory excesses kill more than jobs. The diversion of resources to comply with regulation (useful or not) exerts an “income effect” that reflects the correlation between wealth and health. It is no coincidence that richer societies have lower mortality rates than poorer ones. To deprive communities of wealth, therefore, is to enhance their health risks because wealthier individuals are able to purchase better healthcare, enjoy more nutritious diets and lead generally less stressful lives. Conversely, the deprivation of income itself has adverse health effects — for example, an increased incidence of stress-related problems, including ulcers, hypertension, heart attacks, depression and suicides.
It is difficult to quantify precisely the relationship between mortality and the deprivation of income, but academic studies suggest as a conservative estimate that every $7.25 million of regulatory costs will induce one additional fatality through this “income effect.” Unnecessary deaths are the real costs of regulators’ “erring on the side of safety.” Excessive regulation has been aptly termed “statistical murder.”
Finally, EPA is a serial offender when it comes to egregious government waste, fraud, abuse and just plain sleaziness. The agency buys influence by doling out hundreds of millions of dollars each year to certain favored non-profit organizations — money that, according to the inspector general and Government Accountability Office, is dispersed with no public notice, competition or accountability. The investigators documented systematic malfeasance by regulators, including: (1) making grants to grantees who were unable to carry out the terms of the grants; (2) favoring an exclusive clique of grantees without opening the grants to competition; (3) funding “environmental” grants for activities that lack any apparent environmental benefit; and (4) failing to ensure that grantees performed the objectives identified in the grants.
Over the years, EPA has, in effect, bought the loyalty of a small cadre of scientists and radical advocacy organizations that will dependably defend the agency’s precautionary approach, expansionist tendencies and dubious decisions.
Since it was created in 1970, EPA has been a rogue agency — ideological, poorly managed and out of touch with sound science and common sense. It is past time to consider whether the nation’s experiment with a free-standing environmental agency has failed, and whether its few essential functions should be relegated to less science-challenged agencies and departments.
Henry Miller, a physician and molecular biologist, is the Robert Wesson Fellow in Scientific Philosophy and Public Policy at Stanford University’s Hoover Institution. He was at the NIH and FDA from 1977 to 1994.