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Confusing EPA Budget Process Calculated to Resist Meaningful Oversight

Part 1: Statutes and Lies

Last week, professors Adam White and Lisa Heinzerling engaged in spirited debate on a Federalist Society panel titled, “Is the Modern Congress Doing More Harm than Good?” Below, I’ve excerpted a notable exchange regarding Congress’s alleged unwillingness to use its power of the purse to exercise oversight of administrative agencies:

Prof. White: Divorcing the appropriations process from the oversight process is a problem…we need to find a way to realign congress’s power [of the purse] with its responsibilities.

Prof. Heinzerling: If you’re looking to budgetary decisions to rein in agencies, then I think there’s a potential accountability gap there, too. Which is that you leave the underlying statutes in the place—the statutes that promise clean air, clean water, safe medicines, and safe food, and on down the line—and then you starve those agencies so they can’t deliver on those promises. And then the question becomes: Who is responsible for the failure of those agencies to deliver on those promises?

Prof. White: That’s a fair point. The statutes are the statutes, and they are the supreme law of the land and they should reflect national policy. Sometimes I suggest that statutes as far as policy goes are what economists would call stated preferences, and appropriations decisions are something much closer to revealed preferences. And if there’s an increasing gap between what Congress wants to pay for a policy and what they say they want in a policy, that might state more about the underlying statute and how far afield it is from real national policy than what we currently give them credit for.

Prof. Heinzerling: But it also makes the underlying statutes a lie.

Prof. White: I wouldn’t say the statute is a lie. I’d state it is a good faith statement of aspirations. And as time progresses, and we get further from those statutes … the appropriations process becomes a much more clear statement of experience and our new policy views in light of our experience. And it’s unfortunate if they’re increasingly divorced from statements of aspiration from a quarter century or three quarter centuries ago.

At least with regard to the Environmental Protection Agency, which was an example employed by each professor during this particular exchange, I respectfully submit that they’re both off-base, albeit in different ways.

For starters, the EPA authorizing statutes are rife with thousands of date-certain non-discretionary duties, i.e. deadlines by which the agency must perform specific actions as stipulated by Congress. There is nothing “aspirational” about Congress assigning the EPA discrete actions to be performed by a specific time. So I believe Prof. White is mistaken on this point, at least with respect to the EPA’s organic statutes.

In a previous post, I agreed with Prof. Heinzerling’s point that the appropriations process should not undercut an agency’s statutory responsibilities. (To be sure, I would drastically overhaul these statutes, if I had my druthers; my point here is only that the law is the law is the law, and Congress shouldn’t impede the agency’s duty to faithfully execute the law.) Nonetheless, the complex reality of the interaction between EPA’s responsibilities and its budget suggests that Prof. Heinzerling has misidentified the perpetrator of statutory mendacity. During the Obama administration, it was the EPA—and not Congress—that has been treating environmental statutes as if they are “lies.” Moreover, the EPA has been obfuscating congressional oversight in order to perpetuate this lie.

Before I elaborate, it is necessary to first establish a taxonomy of agency actions to guide the discussion.

Fundamentally, the EPA performs three types of actions: 1) non-discretionary and date-certain; 2) non-discretionary but not date-certain; and 3) discretionary.

Non-discretionary duties, or things that Congress requires, are usefully parsed into date-certain and non-date-certain. Date-certain duties are those for which Congress established deadlines for EPA to act. Examples include the EPA’s responsibility to review state air quality plans within 18 months, or the agency’s duty to periodically update technology-forcing standards, in order to reflect the latest science. Non-date-certain duties are things that Congress requires, but which have no deadline. An example of a non-date-certain duty is the Obama-era New Source Performance Standards for greenhouse gases from coal-fired power plants. Because the agency found that greenhouse gases “endanger” the environment, the agency had a responsibility to establish these New Source Performance Standards; however, there was no date by which the agency had to act. Notably, courts afford the EPA a great deal of discretion to choose when to execute its non-date-certain requirements.

And the agency also performs discretionary actions—i.e., activities that are authorized, but not required. Examples of discretionary actions include the pursuit of the amorphous concept known as “environmental justice.” Congress never ordered the agency to do environmental justice, whatever it means; rather, the EPA’s environmental justice program flows from an executive order. A great deal of climate policy is discretionary, such as the much-ballyhooed Obama-era climate change website for kids.  For that matter, the ridiculous amounts of money the agency spends on digital media is discretionary. Congress never ordered EPA to have a twitter feed staffed by an office of people.

If the statute is not a “lie,” then there is a natural order to these three types of actions. Date-certain duties take precedence; then, if you perform the things that Congress gives a due-date to, you can move on to non-discretionary duties that do not have a deadline. And, only upon performance all of your non-discretionary duties, you can undertake authorized actions of your own choosing.

During the Obama administration, it seemed to me that EPA upended this priority sequence, such that nondiscretionary date-certain duties were last on the agency’s “to-do” list.

On the one hand, the EPA during the last 8 years has grossly underperformed in meeting its deadlines. I know because I checked. Here’s the summary of a study in which I reviewed EPA’s performance of more than 1,000 Clean Air Act deadlines:

The Agency missed 84 percent of its date-certain duties by an average of 4.3 years. For industrial sector-wide regulations, such as New Source Performance Standards and National Emissions Standards for Hazardous Air Pollutants, the agency was late on average by 7.8 years. In reviewing State Implementation Plans (SIPs) to meet ambient air quality standards, the agency was late on average by 1.9 years.

A keen observer like Prof. Heinzerling no doubt would counter this evidence by asking: Did Congress assign too many responsibilities? Of course, it is possible that the Congress gave the agency too much to do, and too few resources to do so. In order to answer this question, I searched for evidence of the agency coming to Congress and asking for more resources to meet its date-certain duties. But I couldn’t find any! In neither congressional testimony nor its annual budget justifications did the agency tell Congress that it was overwhelmed with statutory duties and therefore needed more money.

At the same time that the Obama-era EPA was content to wholesale fail to meet its deadlines, the agency appeared to be pouring resources into non-date-certain and discretionary actions that effectuated climate change mitigation policy and other pet progressive causes (e.g., environmental justice).

It seemed that the agency was ignoring Congress’s express directives in order to pursue policies of its own choosing. So I set out to find out: What is the agency spending taxpayer money on? In particular, I wanted to know the balance of spending among the three categories of agency action: non-discretionary deadlines; non-discretionary and non-date certain; and discretionary.

Part 2: A Futile Attempt to Follow the Money

In light of the aforementioned, I set out to find out how much EPA was spending on these three categories of activities. Not to toot my own horn, but I’ve been studying the agency and its enabling statutes for a decade. Accordingly, I felt I was qualified to review the agency’s FY17 budget request to Congress, which is almost 1,200 pages, and discern where the money was going. I even put on my wall an organizational chart of all of EPA’s headquarters offices and sub-offices, along with descriptions of their statutory and programmatic responsibilities. I did the same thing with the agency’s 10 regional offices.

Well, I’ve been working with the FY 2017 budget request for the last 6 weeks, and what I quickly learned in the course of this endeavor is equally astounding and disconcerting. The document doesn’t make a lick of sense.

You’d imagine a rational agency budget breaking down something like this: First, the agency would set forth the organizational entity or entities (e.g., the office, sub-office, etc.) to which the appropriation pertains. Then, the agency would explain the relationship between the appropriation request and the authorizing statute(s); after reading this statutory section of a logical budget, a lawmaker would know whether the activity is discretionary or non-discretionary. Finally, the agency would describe the actions that were being funded, in relation to both the underlying statute and the organizational entity that actually executes the task.

But the EPA’s budget is far from logical. Instead, it’s positively Kafkaesque. Instead of justifying its spending by office or statute, the EPA organizes its budget request with an indecipherable matrix. On the one side of the matrix, of increasing order of specificity, is “objectives,” “goals,” “program area,” and “sub-program area.” On the other side of the matrix, funds are parsed primarily into two sectors: “science and technology” and “environmental program and management.” None of these terms are defined, and the relationship among these concepts is nowhere evident.

Over the course of 1,200 pages, the budget justification covers about 170 of these matrix combinations, and each one was accompanied by a qualitative description of the appropriations request. It is difficult for me to overstate how worthless are these descriptions. For starters, they don’t identify the organizational entity that is responsible for the appropriation. More fundamentally, these descriptions do not provide a breakdown or itemization of how the money is spent; instead, a total outlay is given, and then the qualitative description simply lists the kinds of activities that would be performed, in the most general of terms. At the very end of the description, completely independent from any of the text, a list of associated statutes is provides. We are given no idea of what the statute authorizes, much less what section of the statute is at hand. On the whole, there is exceedingly little useful information in the budget justification.

An example will aid in my explanation. Consider the matrix combination:

[Objective: Protect Human Health/Goal: Protecting America’s Waters/Program Area: Homeland Security/Sub-Program Area: Homeland Security: Critical Infrastructure Protection] : [Sector: Science and Technology]

In FY16, the agency was allocated $10,517,000 for this matrix combination. In FY17, the agency sought $10,904,000.

The first paragraph is a “Program Project Description,” and here’s what it says:

This program provides resources to coordinate and support protection of the nation’s critical water infrastructure from terrorist threats and all-hazard events. Reducing risk in the water sector requires a multi-step approach to: determine risk through vulnerability, threat, and consequence assessments; reduce risk through security and resiliency enhancements; prepare to effectively respond to and recover from incidents; and measure the water sector’s progress in risk reduction. The 2002 [Bioterrorism Act] directs the EPA to support the water sector in such activities. In addition, the President has further delineated the EPA’s security and resiliency responsibilities under Presidential Policy Directive 21 (Critical Infrastructure Security and Resilience), Homeland Security Presidential Directive 9 (Defense of Food and Agriculture), and Executive Order 13636 (Improving Critical Infrastructure Cyberscurity). The water security program also provides the tools and technical assistance to advance the long term sustainability of water sector infrastructure and supplies by incorporating climate change and resiliency considerations into effective utility management practices.

The next section is “FY 2017 Activities and Performance Plan.” In order, this section describes:

  • Water Security Initiative: This initiative is split into two parts. The first is to “establish a national water laboratory alliance” of 140 labs, in order to provide for testing in the case of a contamination event. The second is to “enhance the preparedness and resiliency of water systems through technical assistance,” which is achieved through the continued deployment of Water Quality Surveillance and Response System allowing a water utility to rapidly detect and respond to water quality problems and contamination. 
  • Improving Critical Infrastructure Cybersecurity: “EPA will continue to fulfill its obligations under Executive Order 13636—Improving Critical Infrastructure Cybersecurity—which designates the EPA as the lead agency responsible for cybersecurity in the water sector.” In FY 2017, “the EPA will provide in-person and webinar-based training to the water sector on available risk assessment and management tools for cybersecurity.”
  • Climate-Ready Waters Initiative: “The mission of the CRWU initiative is to assist water sector utility owners and operators in integrating climate change and extreme weather considerations into their routine planning practices.

At the end of the description for this matrix combination, there is a section titled “Statutory Authority,” which reads:

Safe Drinking Water Act Sections 1431-1435; Clean Water Act; Public Health Security and Bioterrorism Emergency Response Act of 2002; Emergency Planning and Community Right to Know Act Sections 301-305.

What follows is my own account of all the problems with this particular budget request.

What Office? Not a single EPA office or sub-office is mentioned in the qualitative description. I am confident that at least two offices have a hand in this money: Office of Homeland Security (within the Office of the Administrator) and the Office of Water. But I can also infer the possible participation of three more offices. For example, the Office of Emergency Management is responsible for the Emergency Planning and Community Right to Know Act, which is listed in the statutory authorities. And the Office of Research Development manages the agency’s bloated network of labs, so perhaps they have a role in the “national water laboratory alliance.” Finally, EPA’s informational technology expertise is housed in the Office of Environmental Information, and this capacity could be a component of the cybersecurity efforts. The point is that we don’t know! Incredibly, there is no description of the actual “who.”

What Statute? In the introductory paragraph, the qualitative description for this matrix combination cites the following authorities: The 2002 [Bioterrorism Act]; Presidential Policy Directive 21 (Critical Infrastructure Security and Reslience); Homeland Security Presidential Directive 9 (Defense of Food and Agriculture); Executive Order 13636 (Improving Critical Infrastructure Cyberscurity). At the end, the document lists the following authorities: Safe Drinking Water Act Sections 1431-1435; Clean Water Act; Public Health Security and Bioterrorism Emergency Response Act of 2002; Emergency Planning and Community Right to Know Act Sections 301-305. In-between, the only explanation of any authority is the Cybersecurity Executive Order 13636, which is clearly the impetus for the cybersecurity efforts. There is no other explanation of any other authority! So we have no idea whether these are discretionary or non-discretionary actions. And with the exception of the cybersecurity efforts, we have no idea which statute is authorizing which of the above activities.

Whither the money? This matrix combination carries a total appropriations request of almost $11 million. In what is, alas, a rarity, this qualitative description does include some indication of where at least a portion of the money is going. The budget identifies $5.9 million of the money as going to the Water Security Initiative’s Water Quality Surveillance and Response System for program refinement, certification program for utilities willing to adopt the program, technical assistance to such utilities, and marketing. However, we are given no indication where the rest of the money--$5.1 million, which is almost half—is being spent! And, again, this qualitative description was exemplar relative to its peers, only a handful of which (out of 170) even partially parsed the appropriations total into constituent components.

In sum, this description is nonsense. After reading it, we still don’t know who’s doing what; pursuant to what authority they’re doing it; and how much money they’re doing it with. Needless to say, oversight is not possible with so little information of such low quality.

Consider as well the qualitative description for the following matrix combination:

[Objective: Address Climate Change; Improve Air Quality/Goal: Addressing Climate Change and Improving Air Quality/Program Area: Clean Air and Climate/Sub-Program Area: Federal Vehicle and Fuels Standards and Certification]: [Sector: Environmental Program & Management]

Although the qualitative description does not name the office responsible for this appropriation, it is clearly inferable from the explanation of activities that the executing entity is the Office of Transportation (within the Office of Air and Radiation).

The statutory authorities listed are: “Title II of the Clean Air Act; Motor Vehicle Information Cost Savings Act; Alternative Motor Fuels Act of 1988; National Highway System Designation Act; Energy Policy Act of 1992; Safe, Accountable, Flexible, Efficient Transportation Equity Act A Legacy for Users; Energy Policy Act of 2005; Energy Independence and Security Act of 2007.” While the qualitative description mentions the Clean Air Act and explains the role of the Energy Independence and Security Act, there is no mention in the description of the other 5 statutes, which is sub-optimal.

But the worst part about the description—a quality that is shared by all but a handful of other matrix combination out of 170—is that it provides no indication of how the total appropriations request, which amounts to $103 million, would be parsed among the many significant regulatory programs that are identified. The description relates the following  rules: CAFE standards, tailpipe emissions standards for criteria pollutants, vehicle certification, fuel standards, the ethanol program, aviation fuel efficiency standards, and marine fuel efficiency standards, assistance with State Implementation Plans, inter alia. All of these are major rules or programs, and in a logical world, a proper appropriation request would include many subcategories of spending for each one. For example, a member of Congress interested in the ethanol program might want to know how much is being spent on the agency’s “lifecycle” analysis of greenhouse gas emissions for biofuels, or how much the agency spends on meeting its statutory deadlines under the program, or how much the agency plans on spending on rulemakings to change the program. This sort of data allows for Congress to perform actual oversight. As is, a member of Congress would be unable to find out how much is being spent on the ethanol program as a whole, much less these significant components of the program. And that’s because no costs are broken out of the $103 million total appropriations request.

With rare exception, the glaring flaws described in the above examples also apply to the other matrix combinations. This is why the budget justification is gibberish.

Part 3: Perpetuating the Lie

I took a cursory look at the budget justifications for the Departments on Labor and Transportation. From what I could tell, these budgets were organized logically. EPA’s budget is different, and it is distinguished by opacity. So why would the agency (and the Office of Management and Budget, which plays a key role in budget formulation in the executive branch) obfuscate?

For my part, I think the answer is that the agency and its enablers have been trying to preclude congressional oversight. Congress can’t exercise the power of the purse to rein in an administrative agency when lawmakers have no idea how the money is spent. To use the parlance of the scholarly debate that prompted this post, the EPA is treating its statutes as if they were a “lie,” and the agency is complicit in obfuscatory budget requests in order to perpetuate the lie.

In my opinion, the agency doesn’t want the Congress to know what the breakdown of its budget into the three categories established above,--i.e., 1) nondiscretionary and date-certain; 2) nondiscretionary and non-date-certain; and 3) discretionary. As long as the Congress remains ignorant, the agency can re-align its appropriations with activities of its own choosing, rather than submitting to the Congress’s express directives.

This is not to take Congress off the hook. It is beyond me how and why Appropriations Subcommittees of relevant jurisdiction have distributed taxpayer money on the basis of this gobbledygook justification.  They have the power to tell EPA to submit a sane budget that allows for oversight.

Next Tuesday, the Trump administration is expected to submit its first budget. We’ll soon learn whether the EPA will continue to perpetuate the Congress’s confusion.