US Chamber of Commerce Blog
Our country’s small businesses aren’t wanting for challenges. Capital and talented workers are hard to come by, technology is advancing more and more quickly, our nation’s tax code and health care system are a mess, and the economy can’t seem to sustain any sort of real momentum. It’s hard enough for entrepreneurs to simply stay in business, let alone expand and create jobs.
So why on earth do environmental regulators seem on hell-bent on making their jobs even harder?
The Environmental Protection Agency has in recent years proposed and in some cases finalized a flurry of onerous new regulations that aren’t merely sticking a thorn in the sides of small companies, they’re downright driving them out of business. It’s not merely one or two sectors that have been clobbered by the new rules, either. It’s everyone from farmers to manufacturers to energy producers to construction companies. Nor are the ripple effects limited to certain areas of the country; the federal agency’s wrath is being felt by small businesses from coast to coast.
The agency’s Waters of the United States (WOTUS) rule, for instance, is threatening agricultural business owners like Jack Field, a cattle rancher in Yakima, Washington. A second-generation rancher, Field currently leases pastures from local landowners to run his 120 cattle, but under WOTUS – which vastly expands the definition of federally protected water and gives federal regulators unprecedented authority over local land use – that leasing model may not be sustainable. From our earlier story:
Under the rule… the agency can claim jurisdiction over any “waters” that are deemed to be adjacent to streams, wetlands and creeks, essentially stripping away broad regulatory power from states and local jurisdictions. In the process, the EPA has opened landowners and ranchers up to a host of new permitting requirements, as well as potentially devastating fines and lawsuits.
“For the price of a postage stamp, someone who disagrees with eating red meat could now throw me into court, where I will have to spend time and money proving that I am not violating the Clean Water Act,” Field told the House Small Business Committee at a hearing last year. “I don't think this is what anyone had in mind when Congress passed the Clean Water Act.”
With the added liability, it’s not surprising that landowners who have leased Field their property in the past have expressed concerns about his operations moving forward.
“It may very well end up that landlords decide that my cattle grazing activity now has too high a risk profile under this new rule, and they may no longer want to rent the land to me,” Field said in an interview. “If that’s the case, and I can’t find somewhere to run my cattle, I’ll have to get rid of them – that’s just the way it works. I’m not sure what we would do then.”
Read the rest of Field’s story here.
On the other side of the country, Drew Greenblatt had been planning an expansion of his small manufacturing company, Marlin Steel, based in Baltimore, Md. However, EPA’s new ozone rules threaten to throw a wrench in those plans, under which Greenblatt was expecting to expand his manufacturing space by 53 percent and hire 15 new workers, as our earlier story explained:
[Under new ozone rules], many of the manufacturing and industrial firms that Marlin Steel counts as customers will see their regulatory compliance costs skyrocket as communities are forced to lower pollution levels even further than they already have (ozone levels have already dropped by a third since 1980). Every dollar spent complying with the new rules is one less dollar those manufacturers have to invest back into their firms and purchase new machinery.
Only when those manufacturers are expanding and investing in new machines do they need more steel containers (like the ones Greenblatt sells) to move goods from machine to machine within their factories. Thus, only when they're expanding does Marlin Steel have customers.
Several longtime clients have already told Greenblatt that the EPA’s new ozone rules will put a freeze on any expansion or investment plans they had in the works.
“My clients are going to clamp down, and my phone is going to stop ringing” Greenblatt said. “When they hit pause, we have to hit pause, too, and as a result, we’re simply not going to be able to expand and hire as much as we had planned.”
Read the rest of Greenblatt’s story here.
Moving to the Midwest, John Cooper, a former mechanic in the Marine Corps, has spent the past fifteen years working for Ameren, an energy utility company in the Midwest, moving up the ladder from a laborer back in 2000 to the plant’s supervisor today. However, another cumbersome EPA regulation has put his and the rest of the plant’s workers’ jobs in serious jeopardy:
Last year, Ameren announced plans to close the Meramec site, the smallest of the company’s remaining coal-powered plants, by 2022. While the company has cited a number of factors that played into the decision, executives acknowledged that the Environmental Protection Agency’s new, much more strict carbon emission limits for power plants -- which had been proposed one month before Ameren’s announcement -- made it “clearer” the facility would have to close. In fact, the site may be shuttered even sooner depending on how the rules are implemented.
Cooper took notice.
“I have a real concern about the speed at which the changes being implemented by the Clean Power Plan will affect my work location and my life,” Cooper wrote in a comment submitted to the EPA after the agency first proposed the standards last year. “I understand environmental change is coming and I wholeheartedly accept that it is our generation’s responsibility to turn the corner on our lasting effects on the environment. However, you also need to understand that not only is our environment at stake but also the livelihoods of thousands of utility workers and the tax revenues these facilities provide.”We're simply not going to be able to expand and hire as much as we had planned."
Drew Greenblatt, President of Marlin Steel
His lone request to the EPA? “For myself and my family, I only ask that you be patient and understanding of our plight and please try to work with my company and the many others like us to help make this transition as painless possible,” Cooper wrote.
Instead, the agency has done precisely the opposite. Officials moved with reckless abandon to implement the new emissions standards, recently issuing a final rule without even taking into account sufficient input from the small business community, as is required by federal law.
Read the rest of Cooper’s story here.
Staying in America’s heartland, new EPA rules finalized late last year have clobbered small brick manufacturers across the country, pouring salt in the wounds of an industry that has already been struggling in recent years. The regulations will require brick makers to purchase and install expensive new equipment that regulators hope will slightly reduce their plants’ mercury output and emissions of so-called particulate matter – basically, a mix of dust, dirt, and smoke particles. The rules have pushed Davis Henry’s 60-person brick company in Selma, Ala. to the brink of closure:
“Our regulators are targeting an industry that has been absolutely crippled by the recession,” said Henry, noting that his company has already had to shut down one of its two brick kilns (a reflection of the downward trend across the brick industry, which is currently operating at less than 50 percent capacity). He pointed out that “a bank is not going to invest millions into a business for something that isn’t going to increase sales one bit and will instead drag down its profits."
Once the rules are finalized, Henry and other brickmakers will have three years to come up with a plan to comply. Henry, his brother and the rest of his management team are mulling their options. But as it stands now, the outlook appears bleak.
“The worst case scenario is that we can’t find a way to avoid these new requirements, a bank won’t give us a loan, and in three years’ time, if we haven’t sold the company, we would just have to cease operations,” he said. “I mean, that’s the worst case scenario: We would have to close the business.”
Read the rest of Henry’s story here.
Some 800 miles to the north, Janet Kaboth’s small brick business is facing a similar fate. Her 100-year-old company based in Alliance, Ohio, which has always made a concerted effort to hire workers who would likely have a difficult time finding employment elsewhere, could be on the hook for $5 million in upfront technology investments and as much as $1.5 million in additional operating costs every year moving forward. Kaboth elaborated:
“I would like to think that after almost 100 years of providing good employment, paying taxes, and being a responsible corporate entity that someone in our government could look at the cumulative effect of regulation compliance and help us,” she [told] Congress.
In Kaboth’s case, for EPA's rules alone, her 80-employee company would be required to purchase and install new equipment that would scrub some of the mercury and particulate matter emissions out of Whitacre Greer’s smokestacks. All told, the new systems will amount to a more than $4 million investment (equal to approximately a quarter of the company’s net worth) to scrub out only a few additional pounds of mercury – or for those counting, less than 1 percent of 1 percent of the amount of mercury currently embedded in American mouths.
“It’s not just that it’s a high cost,” she said. “It’s that it comes with so little benefit.” [...]
“It would be a shame, when you think about all the things we have gone through and all our company has survived over the past hundred years – recessions, wars, housing market crashes – to be brought down by one regulation,” Kaboth said. “It just seems wrong. I don’t make the rules, though, so we’ll just have to do our best to keep surviving.”
Read the rest of Kaboth’s story here.
Unfortunately, these small business owners aren’t alone. The EPA’s regulatory machine has been steamrolling small companies in these and many other industries, and there’s no sign of it slowing down anytime soon. We have to pump the brakes on this overregulation and fundamentally reform the way federal rules are enacted, so that we help these small businesses grow and create jobs, rather than running them into the ground.
All eyes are focused on the business world this week at the 69th annual Hannover Messe in Germany – the world’s largest industrial fair and the perfect setting for American companies to show the world what they’ve got in terms of innovation and technology.
But amidst the gadgets and buzz of the moment, it is important to not lose sight of the path forward. The next big thing – whether it is in the United States or Europe – depends on opportunity.
The U.S. Chamber of Commerce and the Federation of German Industries (BDI) hosted a business summit on Monday at Hannover Messe to look at “The Future of the Transatlantic Relationship.”
In his remarks, Chamber President and CEO Thomas J. Donohue said the relationship rests on three pillars: the Transatlantic Trade and Investment Partnership (TTIP), digital data flows and cooperation, and energy.
“No other partnership in the last seventy years has done more to advance global economic growth, establish a robust and fair trading system, and foster democracy, opportunity, and security around the world. Today, our partnership is more important than ever — and so is our global leadership.”
On TTIP, Donohue said “we’re a long way from the comprehensive accord we seek, but that does not mean we should lower our ambition just to conclude a deal against an artificial deadline.”
“On trade, the U.S. Chamber and BDI have agreed to a joint declaration that calls on the European Commission, the United States government, and the governments of all EU member states to secure an ambitious, comprehensive, and high-standard Transatlantic Trade and Investment Partnership. A standard-setting agreement will ensure the free flow of capital, talent, goods, and data. It will spur jobs, growth, and investment on both sides of the pond.”
In regards to digital, Donohue noted that “moving data and information across borders is critical to companies of every size and sector.”
“Soaring flows of data and information now generate more economic value than the global trade in goods. That’s why the American business community is urging the United States and the EU to quickly approve the new Privacy Shield agreement to give businesses the certainty they need to invest and hire. In doing so, we will acknowledge that we can facilitate data flows while protecting privacy at the same time. Our member companies are committed to fulfilling their obligations under both European and U.S. law. Through the Center for Advanced Technology and Innovation (CATI), the Chamber is devoting more resources to ensuring the right policies are established to harness the power of data while keeping it safe. For the digital economy to thrive, rules must be consistent, reasonable, and adaptable to new technologies and processes."
And when it comes to energy, Donohue pointed to the United States as an example.
"As Europe begins charting a new course on energy, the U.S. experience is instructive. America has grown its economy while reducing its carbon emissions. Our energy revolution—including a surge in hydraulic fracturing—has lowered U.S. energy prices, given us a significant competitive edge, and is driving a U.S. manufacturing revival. The Chamber has launched a European Energy Initiative to advance a pro-growth European energy strategy that will promote responsible development of Europe’s own resources, increase its access to external energy supplies, and enhance transatlantic cooperation on efficiency. A robust energy strategy is essential in promoting industrial competitiveness and addressing potential national security challenges.”
In closing, Donohue said we can’t lose sight of the things that led to our economic success in the first place – a commitment to free enterprise.
“None of this will be possible unless we boldly reaffirm the free enterprise principles that built our great economies in the first place. This is not the time to retreat from them, but to embrace and advance them for our collective prosperity—and as a model for the rest of the world. America and Europe have a bright future ahead, if we continue to work together."
With growing deficits, aging infrastructure and ever-increasing budget demands, our country is on the hunt for more revenue. The good news is that there’s a better option than taking even more out of Americans’ paychecks. One ready-made solution to these challenges is America’s vast homegrown energy resources. Unleashing the potential of these vast resources will not only generate much-needed revenue to help fund our country’s critical needs, it will also create jobs and strengthen national security.
022443_dear45_3x5in.jpg Unfortunately, the current administration has pursued energy policies that will squander this opportunity and inflict economic harm. Its approach to energy has been to make it increasingly expensive, and to limit our energy options to a favored few. For instance, your predecessor has steadfastly refused to allow more access to offshore energy supplies in the Atlantic and Pacific, even on a limited basis, which could create millions of jobs, billions in revenue, and trillions of new investment.
At the same time, the administration is pursuing numerous crushing regulations designed to radically redesign the electricity sector, which will put Americans out of work, threaten the reliability of our electric grid, and raise costs for consumers. It’s also pressing forward on new costly ozone regulations that will be impossible for some areas of the country (including a few national parks) to meet. And most recently, it has proposed adding a $10 tax on barrels of oil produced in the United States, which would raise not only the price of gas but also the cost of common goods we use every day.
Fortunately, you have an opportunity to put our country on a more practical and productive path – one that first and foremost recognizes that we have transitioned from an era of energy scarcity to an era of energy abundance. Our Institute for 21st Century Energy has identified numerous specific policy actions which would create jobs, grow revenue, and make our nation more secure.
America’s innovators have changed our energy fortunes for today and can do it for the future if government heavy handedness doesn’t crush that opportunity. Your energy vision should embrace every form of energy. For instance, we should be removing barriers to increasing our country's production of oil, natural gas production and coal, enhancing the competitiveness of nuclear and renewable energy sources, protecting our energy infrastructure, and promoting energy efficiency.
Too often, policy debates devolve into soundbites. Our country and its citizens deserve a more informed conversation about energy, which starts with a realistic understanding of what we have, what we need now, and we’ll need in the future. It’s easy to pretend that the world can simply stop using traditional resources like coal, oil and natural gas, but as our economy grows, we will need all of them—and more.
Our proposal to find ways to improve all sources of energy, to make each of them more efficient and cost effective. We also have enormous opportunities for renewables and advanced technologies which should be robustly pursued. And we must invest in and build the infrastructure that is needed to move molecules and electrons all across our nation to supply Americans with the energy needed to power their homes, cars and offices.
We’re hoping that your administration will give energy issues the attention they deserve. Ingenuity and innovation brought us this new energy future and support for a new American energy era runs deep. You will find ready partners on both sides of the aisle and we, representing America’s job creators, stand ready to assist.