Regulation Without Representation

By Scott Manley
Vice President of Government Relations
Wisconsin Manufacturers & Commerce

The federal Environmental Protection Agency (EPA) recently issued its global warming rule for coal-fired power plants and is expected to finalize another rule this fall establishing stringent new air quality standards for ozone. Together, the two rules will create the perfect storm for widespread job losses in Wisconsin, especially in the manufacturing sector.

The sheer cost of these two rules is staggering. Wisconsin’s utility regulators at the Public Service Commission estimated the global warming rule to cost between $3.4 billion and $13.4 billion depending on the available compliance mechanisms. To put those costs into perspective, Wisconsin homeowners and businesses spend a combined $7.3 billion each year on electricity.

Although the global warming rule will saddle our job creators with unprecedented costs, the ozone rule will be even more expensive. Widely acknowledged as the most expensive federal regulation ever conceived the ozone rule is expected to cost the U.S. $140 billion each year. In Wisconsin, the rule is expected to cost $10 billion in direct costs, and result in a $28 billion loss in economic output over two decades. The rule’s impact on workers will be equally devastating. The ozone rule is projected to result in more than 23,000 lost job equivalents per year in Wisconsin alone.

Our state will be hit particularly hard by these rules because we have the highest concentration of manufacturing jobs per capita in the country. These jobs rely on affordable and reliable energy as their lifeblood, both of which will be compromised by these incredibly expensive and misguided regulations.

The law and policy changes contemplated by these two rules will result in economic costs measured in billions of dollars and thousands of lost jobs each year. Yet not a single elected official will have cast a vote to approve either of them.

It’s inconceivable our Founding Fathers would ever envision a situation where the federal government could enact laws causing tens of thousands of workers to lose their job each year without an act of Congress. It’s even more outrageous and unbelievable the EPA would do so by utilizing a regulatory framework specifically rejected by Congress.

Recall when Nancy Pelosi and Harry Reid controlled both houses of Congress, a majority of Democrats and Republicans opposed cap-and-trade legislation. The 111th Congress rejected this ill-considered policy on a bipartisan basis, thereby denying President Obama a victory on a signature policy issue. But the fact Congress rejected cap-and-trade did not stop the EPA from including it in the final version of its global warming rule. The Obama Administration’s behavior is an act of defiance to the will of the people and the consent of the governed that would make King George III blush.

There are numerous reasons why members of Congress, who are accountable to the voters back home, would never support either of these self-inflicted wounds on our economy.

Although the EPA may not care these rules will costs billions of dollars and thousands of jobs each year, members of Congress typically do.

Although the EPA may not care the global warming rule will ultimately eliminate a tremendous strategic advantage for the U.S. by cutting ourselves off from our most abundant and affordable source of domestic energy, members of Congress typically do.

Although the EPA may not care its incredibly expensive rule will be spectacularly ineffective at addressing global warming, members of Congress typically care about costs versus benefits. Most members of Congress would not view unilateral economic disarmament in exchange for reducing global temperatures by 0.016 degrees Fahrenheit to be a good trade. Nor would they agree to put thousands of families in their districts out of work in order to save 0.01 inches in sea level rise.

But the EPA need not concern itself with such trivialities because it is held to account to no one, least of all voters.

That must change.

The short term battle will involve litigating the rules and the shaky legal foundation they were built upon. That’s our best and only hope of avoiding a disaster waiting to happen with respect to middle-class manufacturing jobs.

The longer term battle must involve reining in this type of executive branch overreach and putting legislators who are accountable to voters back in charge of these policy decisions.

Follow Scott on Twitter @ManleyWMC

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This article appears in the October 2015 edition of the WMC Business Voice magazine.

Founded in 1911, Wisconsin Manufacturers & Commerce (WMC) is the state’s chamber of commerce and leading business association representing 3,800 employers of all sizes and from all sectors of the economy.