Once again, President Barack Obama is caught between billionaire activists and state and local officials about job creation.

This weekend,  he will be traveling to San Francisco to attend the Conference of Mayors’ annual meeting as well as a fundraiser hosted by billionaire activist Tom Steyer.

The two events couldn’t be any more different.

The Conference of Mayors meeting will include a panel sponsored by the National Association of Manufacturers (NAM) that will focus on how the Environmental Protection Agency’s (EPA) proposed ozone rule will be economically devastating for communities across America. The panel will feature Democrat and Republican mayors from states like Arkansas, Arizona, Louisiana and California expressing opposition to tightening the standard. As documented before, state and local officials have long warned about the negative economic impacts that would come from a more stringent ozone standard. Further, as a poll just released earlier this week by NAM shows, an overwhelming majority of the public rates their local air quality as excellent or good, and more than half oppose stricter federal environmental regulations on local businesses.

Yet, as we have seen with the Keystone XL pipeline, President Obama has a history of siding with billionaire activist Tom Steyer on environmental issues at the expense of job creation and economic development for local communities. Now, even as Obama attends a conference with those who are concerned about the proposed rules, his attendance later that evening at the Steyer hosted fundraiser raises questions as to whether he plans to side with billionaire activists  or the communities that will bear the economic brunt of the proposed rules.

Costliest Regulation Ever

With the EPA expected to announce a decision on the proposed ozone rules later this year, the stakes for local communities could not be higher. The EPA’s proposal to change the National Ambient Air Quality Standard (NAAQS) from the current 75 parts per billion (ppb) to a 65-70 ppb range could have dire economic consequences across the country. In fact, a recent study by NAM found that the cost of compliance with the new regulations could come to nearly $140 billion a year, which according to NAM, would be “the most expensive regulation ever issued by the U.S. government.”

But the NAM-commissioned study also found that the compliance with the regulations could eliminate “1.4 million job equivalents per year,” from 2017-2040. The study also found that the cost of the proposed regulations would extend to household income, costing the average U.S. household “$830 per year in the form of lost consumption.”

In fact, just today, 100 associations and business groups representing businesses, employees and manufacturers from nearly every industry and every state across the country, sent a letter to President Obama, urging him to retain the current standard for ground-level ozone.

Faulty Premise

Backing the proposed rules are groups aligned with the president such as the American Lung Association (ALA) and the Natural Resources Defense Council (NRDC), who have been lobbying the EPA to adopt an even stricter standard 60 ppb, which is estimated to cost the U.S. economy $270 billion a year. But their premise, which the EPA also appears to have adopted –  that a lower standard would offset this cost through public health benefits such as a reduced asthma rate – is not backed by the data. But it has been noted that the asthma rates have been increasing, even as ozone levels have been declining.

As Dr. Michael Honeycutt, director of Texas Commission on Environmental Quality’s toxicology division pointed out last year:

“Either this indicates that lowering the ozone standard defeats its stated purpose of protecting human health, or it indicates that something is wrong with the EPA’s interpretation of the data. Either way, it’s not a good argument for lowering the ozone standard.”

Impossible to Comply

Also troubling are concerns that have been raised by state regulators about their ability to comply with the proposed standards. A recently released report from the Association of Air Pollution Control Agencies (AAPCA), which surveyed states’ comments to the EPA on the proposed rules, shows that a majority of those weighing in on the issue are concerned about their ability to comply. Many state’s raised the issue of background ozone levels as a barrier to compliance with a lower standard.  They were also unsatisfied with the limited tools EPA has identified to deal with this problem.

In addition to the comments from state regulators, eleven governors signed a letter urging the EPA to keep the current 75 ppb standard. Fearing the proposed standards would push their state into nonattainment, the governors write:

 “Nonattainment is an economic penalty box so severe that needed economic growth is stunted. In nonattainment areas, any growth is predicated on successfully navigating a bureaucratic maze of federal and state regulators.”

Warning that the EPA is proposing “a steady stream of complex, expensive new regulations that require an army of policy and technical experts and lawyers to decipher, respond to, and ultimately implement,” the governors’ letter is yet another example of how the proposed rules will negatively impact the ability of state and local governments to grow their economy and create jobs.

Conclusion

President Obama listened to state and local officials about their concerns before, as reported by the New York Times in a 2011 article entitled, “Re-election Strategy Is Tied to a Shift on Smog.”

From the article,

“[T]he president had decided against ratcheting up the ozone rule because of the cost and the uncertainty it would impose on industry and local governments. He clearly understood the scientific, legal and political implications. He told Ms. Jackson that she would have an opportunity to revisit the Clean Air Act standard in 2013 — if they were still in office. We are just not going to do this now, he said.”

With an election on the horizon, President Obama understood the effect the enormous cost of a tightened ozone rule would have on the economy (and therefore his electability).  Let’s hope he does so again.