Mark W. Hendrickson

Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College, Grove City, Pennsylvania. These articles are from V & V, a web site of the Center for Vision & Value, and Forbes.com.

The EPA: The Worst of Many Rogue Federal Agencies

In the Age of Obama, there are many viable candidates for the official title of Washington's "Private Sector Enemy Number One." You could make a strong case for the National Labor Relations Board, the Department of Homeland Security, the Transportation Security Administration, and others, but my choice would be the Environmental Protection Agency.

For over 20 years I have gathered stories about ways in which the EPA has perpetrated misfeasance and malfeasance, misdeed, and mischief. Let me say that I mean no offense to the many employees of the EPA who conduct their professional lives with integrity and on the basis of sound science. My target is the hyper-politicized leadership of EPA and its henchmen who have misbehaved.

Here are just a few of the significant "lowlights" of the EPA's record: the political nature of the EPA became clear not long after President Nixon established it in 1970. In 1972 the first administrator of the EPA, William Ruckelshaus, banned the insecticide DDT after his own hearing examiner concluded, on the basis of several hundred technical documents and testimony of 150 scientists, that DDT ought not to be banned.

In 1978, the EPA tried to suppress research showing the cost of proposed air pollution standards. If Pennsylvania's two senators at the time (John Heinz and Richard Schweiker) hadn't intervened, the EPA would have imposed standards stringent enough to effectively shut down the U.S. steel industry.

In 1991, a panel of outside scientists brought in to review EPA practices concluded (among other things) that the EPA often tailors its science to justify what it wants to do and shields key research from peer review. EPA Administrator William Reilly acknowledged, "scientific data have not always been featured prominently in environmental efforts and have sometimes been ignored even when available."

The EPA has ignored epidemiological evidence to foment false alarms about the dangers of ozone, radon, Alar (used in apple orchards), dioxins, and asbestos. The asbestos story is illustrative. Not only did the EPA, in 1989, decree an eight-year phase-out of asbestos despite studies from Oxford, Harvard, the Canadian Royal commission, New Jersey, etc. that the health risks posed by asbestos-lined buildings were miniscule, EPA's administrators even ignored the EPA's own scientific panel, which denounced the study used to justify the ban on asbestos as "unconvincing," "scientifically unappealing," and "absurd." (Thankfully, sanity returned and EPA Administrator Reilly rescinded the ban a year later.) The U.S. Fifth Circuit Court of Appeals officially deep-sixed the asbestos ban in October, 1991, on the grounds that the EPA had exceeded its legislated authority - a not-uncommon finding replicated multiple times in subsequent years, such as when the EPA has used the Clean Water Act (which pertains explicitly to "navigable waters") as a pretext to regulate lands where puddles form after heavy rains.

It seems that the most visible EPA administrators were the most problematical. In the 1990s, under the leadership of Carol Browner, the EPA refused to divulge how it calculated cost-benefit analyses. Indeed, in 1997 Browner admitted that new research would be required to set a "scientifically defensible" standard for air quality issues that would "fill obvious and critical voids in our knowledge." The Browner-led EPA also blatantly broke federal law by actively lobbying against legislation designed to curb some of EPA's abuses. Browner herself broke the law by defying a federal judge's orders and overseeing the erasure of the hard drives and the destruction of back-up email tapes that she had used as administrator.

One of the most amazing rulings to come out of Browner's EPA was a letter sent to the city of San Diego, ordering them to stop treating the sewage pouring into the Tijuana River Valley on the grounds that human actions were disturbing the "sewage-based ecology" of the affected estuary - ignoring the fact that the sewage posed a health threat to human beings (whose "ecology" obviously wasn't considered as important by the EPA).

In 1993, Senator Patrick Moynihan (D-NY) wrote to Browner expressing concern that EPA hadn't submitted a report of cost-benefit studies it was required to submit to Congress under Section 812 of the 1990 Clean Air Act amendments. Not only did Browner not even bother to reply, the agency still hadn't completed a report by 1995. Meanwhile, the EPA is notorious for imposing fines on businesses that are late in submitting the piles of paperwork filings that EPA requires of them.

So bad did things get during Browner's tenure that in 1996, a 27-year veteran microbiologist at the agency went public with his concerns about the lowering of scientific standards under Browner, alleging, for example, that the science EPA used in wastewater toxicity tests was unreliable, and that EPA had become more interested in issuing regulations than in practicing sound science. Similarly, during the summer of 1998, a dozen career employees at EPA went public about the agency's "egregious misconduct." These whistleblowers charged that people who work at EPA "are harassed, even fired, for protesting illegal or irresponsible behavior by managers who jeopardize the proper enforcement of the law."

Barack Obama's recently departed EPA Administrator, Lisa Jackson, also distinguished herself by placing political agendas over sound science (and also, like Browner, breaking the laws governing the computer records of public officials - in her case, by trying to hide what she was doing through use of a bogus email identity).

Jackson showed her disregard for scientific rigor by seeking to replace actual samples of air quality with computer estimations of air pollution. Considering the agency's considerable power to act as judge and jury and bring businesses to their knees, it hardly seems like justice to empower the EPA to enter whatever data it chooses into a computer program and essentially produce evidence based on its own assumptions.

The EPA: The Worst of Many Rogue Federal Agencies, Part II

In my previous article, we reviewed some of the ways in which politics has trumped sound science in the EPA's policymaking process, even to the point of defying the law at times. Here are some more specific instances of the EPA having abused its power, often at great cost to American citizens.

We haven't heard much about Superfund in recent years, but this EPA program was a headline grabber 20 years ago. Set up to clean up contaminated sites, Superfund consumed over 40 percent of the EPA's budget at one point. Sadly, most of the money went to lawyers, and the program itself ended up demonstrating its "essential irrelevance to public health."

During the administration of Bush I, the EPA suppressed the findings of a decade-long, half-billion-dollar study of acid rain - NAPAP, the main scientific conclusion of which was that acid rain was not the culprit in increasing the acidity of lakes - until after Congress passed Clean Air Act of 1990. By enacting legislation premised on incomplete and incorrect science, unnecessary regulatory stringency cost Americans untold billions of dollars. So egregious was the EPA's conduct in this matter that Kay H. Jones, the senior scientist on the Council on Environmental Quality under three presidents, issued a report condemning the EPA cover-up and accusing the agency of "blatant public misinformation."

Unfortunately, the NAPAP incident was far from the only instance of EPA misinformation. In the early 1990s, Congressman John Dingell (D-Mich.) pulled no punches in insisting that certain environmental health regulations were based on the work of a scientist who "cooked the books" and performed "criminally fraudulent work." On another occasion (in 1993) Dingell had this to say about the EPA's treatment of scientific research: "It cooks the books with great vigor."

Accuracy in Media published some blockbuster reports in the early 1990s exposing how the EPA would plant disinformation in the media, even quoting an 11-year EPA press officer who stated that EPA handouts were - ahem - "not completely honest."

The late, great journalist Warren Brookes found numerous instances of the EPA's disregard of the cost of its policies. One of the most startling was a rule issued under the Resource Conservation and Recovery Act that shut down 150 companies and imposed $100 million in costs to reduce a hypothetical cancer risk that was the equivalent of spending $9 trillion (yes, with a "t") to avert a single case of cancer.

Congress often has helped the EPA squander the taxpayers' money. It has passed more than 20 environmental laws directing the government to pay the legal fees of green groups that sue the government, even when the government-subsidized plaintiffs would lose. Guaranteed money for suing the government - what a deal! Forbes.com contributor Larry Bell recently detailed EPA's cozy collusion with green groups, in which the two parties (who really are on the same side) negotiate settlements outside of the courtroom where they are shielded from scrutiny.

Another way in which EPA has proven a poor steward of taxpayer dollars is seen in its history of grant giving. According to EPA's inspector general in 2002, the EPA "could not justify more than $1 billion in noncompetitive grants" - just in the year 2000 alone! In some cases, EPA grants are rather incestuous. Over the last 20 or so years, the EPA has given at least $25 million to the American Lung Association, which reciprocates by putting up billboards that amount to pro-EPA propaganda.

The EPA is known for its power grabs, too. In a current notorious inter-bureaucratic power play, the EPA is trying to usurp the Army Corps of Engineers' prerogative under the Clean Water Act to revoke or withhold permits needed by resource extraction companies.

In another Obama-era episode, two experts from the Wyoming Water Development commission charged that the EPA ignored its own guidelines in testing water wells when testing for fracking-related contamination. Referring to the same tests, the Bureau of Land Management said that better testing would be needed to reach accurate conclusions, and the U.S. Geological Survey rebuked the EPA for using poor scientific practices.

When 30-year EPA veteran Alan Carlin dissented from the EPA's alleged "endangerment" finding on carbon dioxide and other gasses in 2009, the EPA ordered him to stand down and remain silent. A subsequent investigation by the inspector general determined that Carlin was right. Carlin, however, retired, and the EPA is marching forward toward regulating carbon emissions.

As has happened many times during EPA's history, Inspector General Arthur A. Elkins, Jr. issued a public statement on Sept. 28, 2011, in which he stated that the agency's greenhouse gas endangerment finding did not make sufficient use of peer review, ignored requirements to certify its compliance with related policies, and provided dubious documentation of its analyses, politely suggesting that the EPA needs to strengthen the quality of its data.

Also in 2011, the chair of a National Academy of Sciences panel on ways to improve EPA's risk assessment practices, told EPA officialdom in no uncertain terms that its research needs to become more sound and transparent if it is to regain credibility and respect.

Under the recently departed Lisa Jackson, the EPA fined 24 businesses about $40 million for not conducting due diligence by virtue of failing to discover that certain refiners of biofuels were selling rights to fictitious output. What makes this fine so outrageous is that the EPA itself had certified the very biofuel companies who were perpetrating the fraud, and even after having discovered the fraud, they waited 15 months to notify the refiners who were being victimized by it. When the EPA finally alerted the refiners that they were holding bogus permits, they gave them only 14 days to find replacements - a virtually impossible task, and yet EPA then lowered the boom and chose to fine the refiners who were the victims, not the perpetrators, of the scam.

Similarly, the EPA seems to derive perverse pleasure from fining refiners for failing to use nonexistent fuels. Under the authority of amendments to the Clean Air Act, the EPA mandates the use of cellulosic biofuels and fines refiners for failing to use the mandated amount. In 2010, the EPA wanted refiners to burn five million gallons of these biofuels, yet zero gallons were even produced in 2010. Nevertheless, in 2011, the EPA upped the mandate to 6.5 million gallons, but again, zero gallons were produced. In 2012, the mandate was for 8.5 million gallons - and a grand total of 25,000 gallons were produced. A federal judge essentially told EPA to stop this nonsense. EPA's response was to raise the 2013 mandate to 14 million gallons.

The EPA's in-your-face, anti-fossil fuel vendetta is even more obvious in this Machiavellian power play: Under its greenhouse gas endangerment finding, coal-powered electricity generating plants would need to pay for expensive equipment to limit CO2 emissions. The EPA then estimated the cost of all this technology to be zero. How so? Because the price will be so high that the EPA assumes no utility would ever do it. In other words, by regulatory fiat, the EPA is flirting with shutting down coal-fired plants completely.

The EPA seems to enjoy imposing impossible requirements on private energy companies.

Often the EPA oversteps its statutory authority so blatantly that federal judges frequently overrule EPA actions. At least one court has ruled that EPA delays at granting permits are illegal. (No word on whether the practice has stopped, but don't bet on it.)

The ideologically split Supreme Court united long enough for a 9-0 slap-down last March, ruling that EPA had gone too far when it refused to grant homeowners a review of the EPA's decision to halt construction of a house on a "wetland." The lot in question had no water on it, and yet EPA decided to fine the homeowners $75,000 per day - half of that without informing the homeowners.

Last summer, the EPA presumed to order ships operating within 200 miles of Alaska's southern shores to use more expensive low-sulfur fuel. The authority EPA invoked was a maritime treaty that had not yet been approved by the U.S. Senate.

In January of this year, a judge in Virginia ruled against the EPA, which had arrogated to itself the power to regulate unpolluted storm water that runs into a creek. The EPA argued that it had the authority to do anything that the Clean Water Act did not explicitly say that it could not do - an expansive view of bureaucratic power indeed.

There are even reports that the EPA is now using drones to keep an eye on American farmers. If this isn't a rogue agency, I don't know what is.

Medicare: Did You Really Pay for That?

Last summer, Barack Obama riled a lot of entrepreneurs when he got carried away at a campaign event and told any American who had built up a successful enterprise, "you didn't build that." An even greater backlash awaits any politician who dares to tell Medicare recipients, "You didn't pay for that" - for there are far more seniors than entrepreneurs in our country.

Time after time during Election Year 2012, seniors and near-seniors reacted to the slightest mention of Medicare reform with indignation and the emphatic insistence, "Don't you dare touch Medicare; I've paid for it!" There is only one problem with that statement: In a mathematical sense, it isn't true.

The amount that American workers have paid and are paying into Medicare isn't enough to fund all the benefits that are being paid out to seniors under Medicare. The trustees of Medicare have stated that the promises they have made exceed their projected revenues by tens of trillions of dollars. Senator Tom Coburn (a physician in private life) has estimated that the average American couple contributes approximately $110,000 to Medicare over their working careers and receives over $330,000 of Medicare benefits. On Feb. 20, USA Today cited Urban Institute data pegging those same figures at $88,000 and $387,000, respectively.

There are differing estimates of the size of the gap, but clearly Medicare suffers from an unsustainable funding deficit. (Just to be clear: Every insurance program has participants who receive far more in benefits than they paid in, but that is possible only because some participants die before they collect. In other words, in a sound insurance program, the average payout will not exceed the average contributions plus earnings on invested funds - but there are none in the pay-as-you-go Medicare program).

Let me hasten to say that I have sympathy for those who make the "I paid for it" case. Through decades of their working lives, millions of seniors paid into the system and were promised that Medicare would be there for them starting at age 65. These citizens played by the rules, acted in good faith, and held up their end of the bargain.

The problem is that the politicians in Washington have not acted in good faith. Instead, they have committed a gigantic fraud by underfunding the program. The fact of the matter is that we've been swindled, and the anger and sense of pending betrayal that many seniors feel is understandable. At the same time, we, the people, need to accept some responsibility for this sorry state of affairs.

Certainly, the members of Congress and presidents who allowed the imbalance between Medicare income and expenditures to get so out of whack are ethically culpable. Still, "we the people" share some responsibility for the Medicare fiasco. The mistake was navet and gullibility. One of our endearing national characteristics is our readiness to take people at their word. Millions of decent Americans would never defraud or deceive their neighbor, and so they assume that others won't deceive them. We can see now what an enormous mistake it was to trust politicians' promises.

This brings to mind a sequence in the slapstick, farcical movie, "Animal House," in which a freshman pledge in Delta house, Flounder, lets some upperclassmen in the fraternity talk him into letting them use his brother's brand-new Lincoln for a road trip. The frat brothers, predictably, trashed the car. As Flounder wept in regret, the suave, smooth-talking senior, Otter, put his arm around Flounder's shoulder and explained the facts of life to him: "You [goof]ed up; you trusted us." ("Goof" replaces the original R-rated verb.) "We the people" have goofed up big time, trusting a government bureaucracy to oversee something as important as our health care.

Regrets and recriminations aside, the question now is: Where do we go from here? What are our options? The only way that the oncoming flood of baby boomers will be able to receive all the Medicare benefits that they were promised would be to either increase payments into the system or reduce disbursements from it.

We already have seen how volatile, contentious, and divisive the political strife over Medicare has been. Sadly, it is likely to get much worse. Generations will be arrayed against generations.

On the one side, gray-haired Americans will demand that the promises made to them, and for which they upheld their end of the bargain, be kept. The progressives have played a masterful political game, for while their socialistic hearts lust to take control of even more of Americans' wealth, they will have huge numbers of average Americans who think of themselves as anything but socialists egging them on and supporting them in their quest to absorb and appropriate more property. The great American middle class, who has the most to lose when Big Government supplants the private sector, will be energetically demanding some of the very policies that will crush the life out of the economy.

On the other side, at some point the younger generations are going to rebel against the debt slavery to which they have been subjected, and they will push back as a matter of economic survival and a desire to feel as free as their elders once did. Responding to pressure from the young, the federal healthcare blob inevitably will ration health care. As happens as a matter of routine in the United Kingdom today, bureaucrats will make cold-blooded decisions about which seniors from which to withhold care as a matter of cost containment.

What a terrible price Americans will pay for falling for the seductive promise of a benign government caring for us all in our old age. Not only will the country be poorer and less free, but the quality of health care itself is bound to decline - all while our society is riven between young and old when the common enemy is the idea that the compulsory economic relations imposed by government comprise a way of life that is somehow more just, more harmonious, more helpful, and more prosperous than a society in which each individual's life and property are his own and economic exchanges are voluntary (i.e., a society in which people are free). *