Red & Green: Is the President Cutting Enough Environmental Fat?

If you believe the rhetoric from environmental activists about the Bush-administration budget, you would think that the world would come to an end if we didn't have ever-expanding bureaucracies to protect us. Yet cutting out some of the federal fat is certainly a good idea. The environmental bureaucracy—like much of the federal government—suffers from its own obesity crisis. <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />

The Bush administration proposed cutting the Environmental Protection Agency budget by 5.6 percent. Environmentalists deem this yet another environmental catastrophe. One group's press release claims that the nation's “environmental security” is at risk. Supposedly, the administration's “stunning and irresponsible disregard for environmental safeguards” would produce “a toxic legacy for future generations.”

Despite all the green drama, this agency is over-funded. During the Bush administration's first term, the EPA's actual spending outlays grew about a billion dollars, rising from $7.3 billion in 2001 to $8.3 billion in 2004.

Fitting the agency to a smaller size could start by phasing out programs that are hugely expensive but provide little benefit. The federal Superfund program—which is supposed to reduce cancer risks by cleaning contaminated land—comes to mind.

This program costs society billions in taxes and hidden regulatory costs, but its benefits are unverifiable. In the book Calculating Risks, James T. Hamilton and W. Kip Viscusi assessed risks at 150 Superfund sites (selected because risk-assessment data were available). They found that even using EPA's unrealistically conservative risk assumptions, 140 of these sites would generate no increase of cancer. Hence, the millions—perhaps billions—of dollars used to clean these sites would produce zero cancer-risk reduction.

Similarly, the National Research Council concluded in 1991: “Whether Superfund and other hazardous-waste programs protect human health is a critical question… Based on its review of the literature on the subject, the committee finds that the question cannot be answered.” The data hasn't improved much since then.

Moreover, state cleanup programs are far more effective—raising the question of why we need the feds in this business at all. A study conducted by former EPA assistant administrator J. Winston Porter pointed out a few years ago that the EPA was spending about $1 billion a year working on about 1,000 sites, while states were spending about $700 million annually cleaning about 11,000 sites.

It would have been good environmental policy for the Bush administration to begin devolving this program to the states with a goal of zeroing-out the budget item eventually. Yet the Bush budget actually increases the Superfund account by $31 million.

Instead, Bush has focused the biggest cuts on spending for clean-water grants. States and localities use these grants to pay for water-related infrastructure—water-treatment-plant upgrades, management of sewer overflows, and storm-water management. No doubt, these are real expenses for localities.

But states and local governments have problems paying for these programs not because the feds aren't coughing up enough dough. In fact, Congress always uses such loan programs as an excuse to pass federal mandates that cost above and beyond what the feds can afford. And when the budget gets tight, loan programs are often a target for cuts.

Instead of perpetuating the myth that the feds can or will pay for all these mandates, a more rational approach would be for Congress and the administration to provide regulatory relief. They could begin by revising standards to make them more truly risk-based and/or by allowing localities to vary their standards based on local priorities.

For example, drinking-water mandates currently demand that localities spend millions to meet standards that provide no real public-health benefit. More reasonable standards and/or increased compliance flexibility could cumulatively save towns and cities billions, enabling them to direct their own funds to the highest-level priorities and not find themselves at the mercy of the annual budgeting process.

But with all of that said, there is one thing on which we can probably count: Congress will likely ignore even the modest budget cuts of the Bush administration, allowing the federal waistline to continue expanding at taxpayer expense.