Air Office, a Reg-Writing Powerhouse, Strains as Mandates Grow and Funding Shrinks

U.S. EPA's Office of Air and Radiation is a regulatory workhorse that churns out more rules than all other EPA offices combined.

OAR -- as the air office is known around the agency -- is also one of the government's reg-writing champs. It had six rules released from interagency review last month -- more than any other office. And EPA, overall, has more rules being reviewed at the moment by the White House Office of Information and Regulatory Affairs than any other agency, 22.

Three regulatory updates came out Friday, including tweaks to last year's hazardous air emissions standard for power plants and the new source performance standard for oil and natural gas development and the long-anticipated rule for reducing sulfur in gasoline.

But the air office routinely blows deadlines that are set by law, drawing scowls from friends and foes alike. Industry groups, environmental organizations and government watchdogs complain that the office responds only to legal action by outside groups. Those who track the office attribute its delays, in part, to a perennial lack of funds and personnel.

"Funding is a chronic problem at EPA," said Jeff Holmstead, who led the air office during the George W. Bush administration. "They just don't have enough people to meet all those statutory deadlines."

EPA as a whole received 13 percent less funding in fiscal 2012, adjusted for inflation, than it did in fiscal 1990, just before Congress passed the Clean Air Act amendments that greatly expanded its regulatory responsibilities, according to an analysis by the Center for Progressive Reform.

By contrast, the National Highway Traffic Safety Administration has seen its budget nearly double over the same period.

EPA had 17,006 employees in fiscal 2012, four fewer than it had in fiscal 1992. And internal documents hint the number of employees may have fallen even further in the last year to accommodate mandatory spending cuts across the federal government.

As Paul Billings of the American Lung Association, which pushes the agency hard on air regulations, sees it, "There has been an incredible brain drain at EPA."

Holmstead and other former OAR officials said annual pleas for more money to meet growing workload did little good.

"We did often make the case that in light of what were able to accomplish, that we should get more money than the Office of Solid Waste or the water office," said Holmstead, who's now at the Washington law offices of Bracewell & Giuliani.

"But by and large, we got a certain amount, and there was very little transferring between offices," he said. "Even if we could show the things we could do with money would have a much bigger impact on public health or the environment, the politics of keeping everybody roughly comparable were always there."

Dina Kruger, who headed the air office's climate division during President Obama's first term, said financial considerations have become paramount at the agency.

"In the air office, we were always asking for more and more and more just because we had so much to do," said Kruger, who left the agency after 22 years and is now president of Kruger Environmental Strategies LLC. "Now there's no more, and you have to start cutting."

OAR had 1,820 full-time employees, about 11 percent of EPA's workforce, in fiscal 2008. Its $727 million operating budget was less than 10 percent of the agency's total appropriation that year.

In fiscal 2012, OAR had 1,844 full-time employees and a $744.1 million budget, a bump in spending that reflected a change in priorities between the Bush and Obama administrations -- but that Kruger and others said failed to account for a heavy first-term workload that included writing first-ever greenhouse gas rules, a mercury regulation for power plants and a revised ozone standard.

"The challenge for the air office through the entire Obama first term was that there was so much work to do," said Kruger, who oversaw EPA's landmark finding that greenhouse gases endanger public health, the basis for greenhouse gas regulations under the Clean Air Act.

Not only did EPA employees have a heavy workload under Obama, the agency also had to hire contractors with specialized technical and scientific expertise, she said.

"So when you're moving these massive and complicated rulemakings through," she said, "that also puts a real strain on the parts of the air office that have to do that."

But many OAR alumni say the agency has become adept at shifting its resources away from programs not mandated by Congress, including voluntary initiatives and public outreach efforts, toward an administration's priorities.

"EPA will not be able to do as much as it would have done, but like any organization they tend to set priorities and they get the stuff done that are at the top of their list," Holmstead said.

Rob Brenner, who directed the EPA Office of Policy Analysis and Review in Obama's first term, concurred.

"The agency makes an effort to move whatever resources can be moved toward wherever the priority work is under way," he said.

'It ... just takes time'

The air office's priorities in the second Obama term will be greenhouse gas rules for new and existing power plants and a long-awaited revision of the ozone emissions standard.

EPA proposed a new power plant standard in the first term, which environmentalists hope will be final soon. And officials have pledged to take a second look at the ozone standard that the agency completed in 2011 -- only to have it scrapped by the White House.

EPA has released little information about how it will handle mandated budget cuts from the so-called sequester, but Holmstead said EPA had long anticipated those cuts and had reserved funding for top priorities, like the greenhouse gas rules and ozone rules.

Money would likely be found, he said, in voluntary programs like appliance efficiency program EnergyStar, indoor air programs and public relations efforts.

Brenner, who is now a senior fellow at Duke University's Nicholas Institute for Environmental Policy Solutions, said sequestration might mean fewer people processing Clean Air Act permits and doing on-site inspections. If a permit for a project is challenged, he said, it may take longer to work through that challenge.

Kruger said that if OAR had more employees, it could speed the pace of rulemaking -- a bit.

But there are limits to how much a major rulemaking -- such as the greenhouse gas curbs on power plants -- can be expedited, she said. The agency has a responsibility to process public comments it receives -- in the case of the new power plant proposal, there have been more than 2 million comments -- and the process requires expertise that relatively few people have.

Gina McCarthy, OAR's chief for the Obama first term and now the president's nominee to be EPA administrator, has said the air office plans to move forward at a "deliberative" pace with the power plant rule, which likely means it will miss an April 13 statutory deadline to finalize it.

Kruger said McCarthy's caution reflected the importance of crafting a legally defensible rule.

"They know it's a rule that's going to be litigated, so it's got to be perfect," she said. "So it's not like you can bring anybody in and put them to work on that. It requires technical competence."

While more money and employees would help, Kruger said, "it also just takes time."

'Starved' toxics program

Environmentalists who are eager for EPA to deliver on Clean Air Act commitments say the agency and the White House conspire with Congress to shortchange regulatory operations, leading to delays. This has happened under both Democratic and Republican administrations, they say.

John Walke of the Natural Resources Defense Council said the White House Office of Management and Budget was guilty of helping starve EPA's air toxics program, leading to a backlog of air toxics rules that are years or decades behind their statutory deadlines.

Walke, who worked at OAR at the end of the Clinton administration, said OMB's Office of Information and Regulatory Affairs has often found the air toxics program to be politically problematic because courts have ruled that the law requires EPA to consider only health impacts, not financial costs, when issuing rules for hazardous emissions.

So OIRA has authority to delay those rules, and its critics say it may have some sway with Office of Administration and Resources Management, an OMB subsidiary that assembles budgets together.

"The reason there are dozens and dozens of standards under that program that are overdue under statutory deadline is because they simply don't have the funds they need to carry out the law," said Walke, adding that OMB was frequently as much to blame for EPA funding problems as Congress.

The OAR toxics programs had 142 full-time employees and a $26.4 million operating budget in fiscal 2008. The program was consolidated into the Federal Support for Air Quality Management and Stationary Source programs in fiscal 2012. EPA says the toxics budget was comparable to what the program had four years ago.

But Rena Steinzor of the Maryland-based nonprofit Center for Progressive Reform said the program budget is far smaller than is needed to protect air quality.

And while improved information technology and past research might offer the agency some new efficiencies in writing rules, she said, there are also some new challenges associated with rulemaking in an increasingly litigious era.

"To get a rule out that is at all controversial, you can't just go and fulfill your statutory mandate, do the research and write the rule," she said. "You have to have enough people to respond to literally hundreds of thousands of comments, to ... inquiries from Congress, to appropriations riders, to court cases.

"It's much more resource-intensive because the number of attacks and the directions they come from are so numerous."

As air chief, McCarthy found the toxics program some additional cash by pulling money from other programs, like the National Environmental Performance Track, a public-private partnership not authorized by Congress that was terminated by EPA in 2009.

"She recognized that the air toxics program was a huge portion of their clean air responsibilities in the first term," NRDC's Walke said.

Politics

But the money that can be scavenged from elsewhere in the budget is never enough to keep EPA to its congressionally mandated timeline.

While the agency has made progress promulgating maximum achievable control technology (MACT) standards for a variety of sources, the law sets a timeline for it to review those same emission sources to ensure that the first-generation MACT standards are adequate to protect public health.

Those who track the issue say that many so-called residual risk standards are being missed.

Emma Cheuse of the environmental law firm Earthjustice said OAR has missed deadlines for at least 50 community health air toxics rules required under the 1990 law.

Walke blames Congress for failing to provide the cash EPA needs to meet its legal obligations.

For example, he said, the fiscal 2013 spending bill approved last year by the House Appropriations Committee would have funded EPA at $7 billion, a 17 percent reduction from current levels and the lowest appropriation in 15 years.

"Congress adopts laws, issues splashy press releases taking credit for passing those laws, and then quietly starves the agency of the funds necessary to enforce the law," Walke said. "And they take no heat for it, and instead issue press releases patting themselves on the back for their fiscal responsibility."

Duke University's Brenner said that both OMB and Congress chronically underfund EPA but that this has more to do with trying to demonstrate fiscal restraint than with a willful desire to undercut the agency's programs.

"Presidents don't want to submit budgets with large spending requests," he said. "They get accused of being insensitive to tax and spending concerns."

But the upshot, he said, is that EPA's annual budget "ends up taking a couple hits: one from OMB and a second from the Congress."

Choosing 'to do something different'

EPA documents show the agency has reduced its workforce by 700 employees in the last year by making one new hire for every two or three departures.

"It creates in employees a lot of pressure to give the appearance of getting the same work done, but in fact not doing it as thoroughly, so you have productivity losses because of the uncertainty," said Steve Hopkins, who works with EPA staffers for the American Federation of Government Employees.

Hopkins links workforce pressure to real-world consequences. He pointed to the inspection work done by the Interior Department ahead of the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. Interior was criticized for not doing enough to ensure that safeguards were in place to prevent such a disaster, Hopkins said, but the agency lacked the staff it needed.

"When something goes wrong, we blame the agency and say, 'Well, some employee should have been out there,'" he said. But EPA received too little funding to cover all its responsibilities, he said, "and the choice was to spend money somewhere else."

Steinzor at the Center for Progressive Reform said the way EPA is going about reducing its staff -- waiting for employees to retire or leave voluntarily, then not replacing them at the same rate -- created challenges of its own.

Positions are cut when there have been retirements, rather than where they are less urgently needed.

Many senior staff -- including key managers -- are among the departures. Kruger, who left the air office two years ago, said the approach of budget cuts and curbs on EPA activities was an incentive for some to leave.

Said Kruger, "When you're at a senior level and you've been there for a long time and you suddenly find your work really impacted by these kinds of things, I think people who have other options may choose to do something different."