An Environmental Report Card on the 104th Congress

Policy Backgrounders | Environment

No. 141
Tuesday, January 14, 1997
by H. Sterling Burnett


Important Legislation Not Passed

The 104th Congress set out to change the nation's approach to environmental policy making. The new Republican majority proposed to reform oppressive bureaucracies and reduce the role of the federal government in citizens' lives. With few exceptions the reformers failed, although all parties to the debate had agreed at the outset that current laws needed substantial reform to address three fundamental environmental problems.

Grade: Incomplete
Senate Bill: A-
House Bill: B+

Property Rights Protection.

Many House and Senate freshmen, especially from the West, won their seats in part because they promised to pass legislation protecting private property from uncompensated "environmental takings." Indeed, a private property owner's protection act was part of the Contract With America. Despite support from the House and Senate leadership, no such act became law.

Misguided Criticism: Polluters Don't Benefit from Pollution. Critics decried bipartisan efforts to protect private property rights as an assault on federal health and environmental protection. Specifically, they claimed that a law protecting property would force the government to pay polluters not to pollute. How so? One provision of the Senate bill, described below, would have required the government to compensate a company when a regulation lowered the value of its affected property by a third or more. Critics argued this would force the government to pay compensation when, for instance, it shut down polluting factories or required companies to repair or recall defective products. Yet this claim was untrue. The law explicitly exempted common law claims of tort, nuisance and trespass, and statutes that reinforce common law and criminal law protections for human health. The law would not have granted anyone the right to harm another's health.

"Fewer than 15,000 acres of high-quality wetlands are converted to other uses each year."

Misguided Criticism: Economic Impact Would Be Negligible. Critics also claimed that the law would virtually preclude government from protecting endangered species or halting wetland losses because government would not be able to afford to reimburse those whose actions might have caused environmental harm. This claim is at best mistaken and at worst disingenuous. For instance, current policy equally restricts the development of low-quality, nonvital, statutory "wetlands" and high-quality, traditionally recognized wetlands such as swamps, bogs and fens. However, fewer than 15,000 acres of high-quality wetlands are converted to other uses each year.12 The government or environmental nonprofit conservation trusts could easily protect this amount of acreage yearly through outright purchase, land swaps or tax credits. The Congressional Budget Office analyzed the potential economic impact of the law and found it negligible. While the costs to government might rise in the short term, overall costs would be about the same due to lower litigation and transaction costs and better allocation of scarce government funds.

Even if the critics are right and the government would have faced enormous costs under the new law, this only highlights the burden property owners now bear. That property owners alone must support the general public's desire for environmental quality is unfair and may be unconstitutional.13

Problems with the Current Law: Judicial Catch-22. Under current law, if regulators deny a property owner the right to build his dream home because it would fill in a wetland, he can sue in federal district court to get the denial overturned or sue in federal claims court for the value he has lost. He cannot do both in the same court.

Often, the property owner gets neither relief nor compensation as the government urges the district court to dismiss a claim for equitable relief on the ground that the plaintiff should seek compensation in the claims court - and urges the claims court to dismiss the plaintiff's claim for compensation on the ground that he should seek relief in the district court.

"More than 75 percent of endangered species depend on private land for habitats."

Senate Bill. The Omnibus Property Rights Act of 1995 (S.605) would have allowed certain federal courts to hear both types of suit. Assignment to one court would have stopped the government from making separate and contradictory arguments. The act also would have required that agencies conduct a "Takings Impact Analysis" before listing a species as endangered or creating a habitat conservation plan. The analysis would assess the probability that the action would take private property, estimate the owner compensation potentially required and examine alternatives that might achieve the same goal with less impact on property owners. If the U.S. Fish and Wildlife Service (USFWS) found a suitable, less burdensome conservation plan and still chose to pursue the more burdensome action, it would have to justify this choice in court.

The most contentious section of the bill required the government to compensate the property owner when its action reduced his property's value by 33 percent or more. This section clarified several court rulings. As the Supreme Court ruled in 1960, "[The purpose of the Fifth Amendment to the Constitution] is to bar Government from forcing some people alone to bear public burdens, which in all fairness and justice should be borne by the public as a whole...."

Clarifying compensation requirements also would have removed the negative incentives in many environmental laws. Numerous wetlands are on private land, and more than 75 percent of endangered species depend on private land for all or part of their habitats.14 Yet current laws discourage people from creating, enhancing or preserving wetlands or species habitat because the property of anyone who provides an endangered species habitat is subject to severe regulation or confiscation. There is mounting evidence15 that landowners are destroying potential habitat to avoid attracting endangered species. The property rights bill would have relieved the landowners of a painful choice between their own welfare and that of the environment.

House Bill. The House property rights protection bill (H.R.925) was much more narrowly focused. It did not address judicial jurisdiction or require a "Takings Impact Analysis." The protections afforded to property owners under H.R.925 extended only to the two most contentious federal laws facing property owners: the Endangered Species Act and Section 404 of the Clean Water Act. The one advantage of the House bill was its lower threshold for a loss requiring compensation: 20 percent instead of 33 percent.

Grade: Incomplete
Best Bill: B+

Superfund Reform.

The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) created a trust fund administered by the EPA and funded by taxes levied on corporations. This "Superfund" was intended to provide temporary emergency federal funding for chemical waste cleanups if the responsible parties could not be found or could not pay.

"Despite federal expenditures of more than $30 billion over 15 years, Superfund successes are few."

Need for Change. Superfund is the largest single project of the EPA. Yet despite cumulative federal expenditures of more than $30 billion over 15 years, Superfund successes are few. More than 1,300 sites are on the National Priorities List, but only 97 sites have been cleaned up and removed from the list. The average cost of cleaning up a Superfund site has been $32 million, with between 36 cents and 60 cents of every dollar going to lawyers' fees and other transaction costs.16

Everyone recognizes that Superfund has been a colossal failure. The president has said so. House Speaker Newt Gingrich singled out Superfund as the one environmental program that both parties agreed could be substantially reformed. But during the 104th Congress, no Superfund reform bill made it to the floor of either house. Superfund reform was slain by the election cycle.

Superfund has three major flaws:

  • Superfund often imposes cleanup penalties on parties who were not at fault.
  • Superfund is designed to avert largely nonexistent health risks.
  • Superfund gives federal authorities the power to decide local issues.17

Superfund's Toxic Liability Scheme. In theory, Superfund is supposed to enforce a "polluter pays" policy. That is, if culpable parties can be linked to a polluted site, these "potentially responsible parties" (PRPs) must pay for cleanup efforts. In practice, Superfund's rule of "retroactive, joint and several and strict liability" has been used to force numerous parties to pay for cleanups - even when they were not at fault.

  • Retroactive liability makes PRPs liable for wastes legally deposited years or decades ago and holds present owners responsible for wastes produced by former owners.
  • Joint and several liability means that costs are not divided according to the percentage of waste a PRP contributed to a given site; any PRP can be held responsible for all cleanup costs.
  • Strict liability means PRPs have to pay regardless of fault - even if they used the best, latest, even legally mandated disposal technologies.

Superfund's liability rules generate endless litigation.

"Cleanup of many Superfund sites is unnecessary because humans are not at risk."

Superfund Relies on Faulty Science and Exaggerated Risk Analysis. Cleanup of many sites is unnecessary because humans are not at risk. A recent study by Duke University economist Kip Viscusi found that more than 72 percent of the total exposure risk (according to the EPA's own calculations) would occur only if highly unlikely changes in land use took place.18

To establish risk at one abandoned site, the EPA relied on the following scenario: A child was assumed to eat 200 milligrams of dirt per day, 350 days a year for 70 years, while playing in the soil. More than 90 percent of all estimated cancer risks at Superfund sites are dependent upon such outlandish scenarios or highly speculative land use changes.

Superfund Tramples on Federalism. If a locality has a Superfund site, why should people living elsewhere care whether it is cleaned up or not? The primary health concern is groundwater contamination. Yet a 1984 General Accounting Office survey of 15 states failed to find any interstate aquifer problems. Since even the worst Superfund sites do not have national environmental impacts, Superfund imposes federal control on what are essentially state and local problems. Even J. Winston Porter, who headed the Superfund program from 1985 to 1989, admits, "The major problem with Superfund is ... that the federal government is ill-equipped to make local, one-of-a-kind site cleanup decisions."19

Democratic Proposals. President Clinton has set a goal of cleaning up two-thirds of the remaining sites by 2000. In light of the EPA's past record the goal is unrealistic, and the president has proposed no actions that would accelerate cleanups. The administration's most recent proposal is to spend more money on Superfund. But money is not the problem. The "fund" contains over $2 billion - more than President Clinton proposes to add and far less than has been spent to clean up fewer than 10 percent of the sites. The problem is in how the money is spent.

Congressional Democrats have attempted only modest reforms. The Democrats' primary objective has been carving out exceptions from the current law for "brownfields."

"An estimated 450,000 brownfield sites, many in inner cities, sit idle across the U.S."

Brownfields are once-productive commercial and industrial sites that are now abandoned, in part out of fear that they may contain toxic waste and thus carry Superfund liability. An estimated 450,000 brownfield sites, many in inner cities, sit idle across the U.S. Ironically, Superfund, created to protect human health and promote environmental cleanup, has exacerbated use-and-dispose property ownership in inner cities and increased urban sprawl as greenfields (pastures, forests and farmlands) are cleared for industrial growth.20

Republican Proposals. Congressional Republicans have resisted pressure to deal with Superfund reform in a piecemeal fashion. Early reform proposals supported by Michael Oxley (R-OH), chairman of the House Subcommittee on Commerce, Trade and Hazardous Materials, and Thomas Bliley (R-VA), chairman of the House Commerce Committee, addressed each of the three major problems with Superfund. Their proposals would have:

  • Established a true "polluter pays" principle. If linked to a Superfund site, PRPs would have paid for the cleanup.
  • Required the EPA to make realistic risk assumptions based on estimates of reasonably anticipated land use.
  • Restored a degree of state control by allowing states, not the federal government, to select Superfund sites and set cleanup standards for sites with purely intrastate impacts. (The bill did not extend state authority to preexisting Superfund sites.)

More Modest Proposals. When it became evident that the substantial reforms were not politically feasible, the Republicans presented more modest proposals. These second-best measures would have exempted from liability all PRPs except owner/operators of current waste sites and limited their liability to wastes deposited after 1980, when retroactivity was imposed. Exempting from Superfund liability those who generate or transport waste, as well as past, present and future creditors, would eliminate 90 percent of the current PRPs. Many are small businesses and individuals that cannot contribute significantly to cleanup costs but can be devastated economically by PRP designation. This reform would substantially reduce litigation and encourage faster, less acrimonious cleanups.

Unfortunately, politics derailed even these modest measures.

Grade: Incomplete
H.R.2275: A-
H.R.2364: A

Endangered Species Act Reform.

The Endangered Species Act (ESA), administered by the USFWS in the Department of the Interior, is widely considered the most powerful environmental law in the nation. As written, it takes precedence over all other laws. For instance, the ESA could prevent a Polaris submarine from leaving its berth or launching its missiles to protect U.S. shores if certain endangered marine species were migrating nearby. The existing act requires that the Secretary of the Interior protect each listed endangered species regardless of the cost. The ESA was up for renewal in the 104th Congress.

Two bills, H.R.2275, authored by Reps. Don Young (R-AK) and Richard Pombo (R-CA), and H.R.2364, authored by Rep. John Shadegg (R-AZ), provided the best opportunities for reform.

"The Endangered Species Act has not worked well.... Although 12 species have recovered, not one can be definitely traces to the ESA."

Need for Change: Failure to Protect Species. For all of its power, the ESA has not worked well. Of the 1,524 species listed as either endangered or threatened during the ESA's more than 20 years of existence, only 27 had been delisted by the end of 1995. Seven of the 27 had become extinct, eight others had been wrongly listed and the remaining 12 recovered with no help from the ESA. In fact, no species recovery can be definitively traced to the ESA.21

That the ESA has failed to protect species should surprise no one. More than 75 percent of the listed species depend on private land for all or part of their habitat, yet the ESA discourages people from fostering species recovery. If a person provides suitable habitat for an endangered species, his or her land becomes subject to severe regulation or outright confiscation.

Need for Change: Burdensome Costs. While the ESA has failed to help species recover, it has succeeded in spending many taxpayer dollars. In 1992 alone, federal and state government spending for endangered species topped $290 million. The Inspector General of the Department of the Interior estimated in 1990 that it would cost $4.6 billion to recover all currently known endangered species. But this estimate obviously is far too low, since recent estimates for recovering the Northern spotted owl alone range from $21 billion to $46 billion. And for every dollar it spends on recovery, the government spends more than $2.26 on the consulting and listing process. Individuals and firms fighting government efforts in court or developing and implementing habitat conservation plans spend still more. Further, the indirect costs in lost jobs and wages, delayed and halted development, increased construction costs and community disruption are greater still.

In one instance, massive brush fires in California destroyed 29 homes and caused millions of dollars in damage.22 Several of the homes were lost because the USFWS had not allowed the homeowners to destroy brush and weeds by plowing in firebreaks. The USFWS threatened the homeowners with imprisonment and huge fines in order to protect the endangered Stephens kangaroo rat. Some homeowners ignored USFWS threats; their homes are still standing. Ironically, the fires destroyed kangaroo rat burrows and habitat.

Proposed Reform: Compensation for Takings. H.R.2275 would, among other things, require the government to compensate property owners when endangered species restrictions diminished the property's value by 20 percent or more. H.R.2364 would make species protection on private land completely voluntary.

Proposed Reform: Legal Rights for Property Owners. Both bills would nullify two recent federal court rulings. In Bennet v. Plenert, the court ruled that parties had no standing to sue the USFWS over a proposed endangered species listing or critical habitat designation unless they were suing on behalf of an endangered or threatened species. Under the proposed law, property owners whose interests were harmed could sue the USFWS to demonstrate that their property was listed in error or that the EPA did not follow federal guidelines or laws when designating the habitat.

"The revised ESA would no longer preempt or override other federal laws."

In Sweet Home v. Babbitt, the Supreme Court ruled that actions which indirectly had a negative impact on a particular species counted as taking, harming or harassing the species and thus were prohibited. The court's decision made it illegal to use private property if doing so could even potentially lessen the mating success of a resident endangered species. No actual harm needed to occur for a property owner to be found in violation of the act. Both H.R.2275 and H.R.2364 would narrow the definitions of "take" and "harm" so that only direct action that physically injured an endangered animal would be illegal. Modifying one's property in a way that encouraged species to leave or that indirectly caused their death would not be illegal.

Proposed Reform: Building Economic Incentives into the Act. Both proposals also would encourage owners to protect, promote and conserve endangered species by establishing tax incentives and using existing revenue sources to create a conservation fund. The fund would pay for cooperative management agreements, conservation easement grants and habitat management.

Proposed Reform: Sound Science. Both bills require that decisions about which species to list be based on sound science and thorough, peer-reviewed data. The bills limit the listing of "distinct population segments" to those of national interest as determined by Congress. Captively bred and privately owned populations of animals would be counted toward species numbers, and the ESA would not limit the use of members of an endangered species that were privately owned before the species was listed. For example, zoo-owned and -bred grizzly bears could be transferred to other owners or destroyed without USFWS permission.

Proposed Reform: Decentralization. Both bills require the Secretary of the Interior to consult the affected state(s) before listing a species or developing a conservation plan. A state can challenge the secretary's decision and he must justify it. Finally, the bills encourage the states to assume the primary role in intrastate species protection and direct the secretary to support state primacy. Both bills require the secretary to ensure that each conservation plan imposes the least possible negative socioeconomic strain while meeting its recovery goal.

Proposed Reform: Common Sense. Two other provisions in the bills merit notice. First, the revised ESA would no longer preempt or override other federal laws or other federal agencies' missions. Agencies would only be required to protect species when protection activities did not conflict with their primary statutory mission.

Second, only actual habitat could be protected under a conservation plan, and even then private property could be incorporated into the plan only with the explicit consent of the owner (H.R.2364) or payment of compensation to the owner (H.R.2275).

Overall Evaluation. H.R. 2364 is a slightly better bill than H.R.2275 because it directs the Secretary of Interior to actively encourage and support private for-profit and nonprofit conservation efforts through commercialization, utilization and privatization of endangered species.

"An estimated $1.3 trillion in U.S. economic activity is lost each year due to federal regulations."

Either bill would have been better than the present act. Both would have given states more influence and authority over ESA decisions. Both would have gone a long way towards removing the negative incentives inherent in the current ESA. Both required some consideration of the best use of limited funds to save species critical to the continued health, safety and welfare of individuals and ecosystems. And both would have allowed more flexibility in management options, reduced the costs of managing endangered species and aligned more closely with the Constitution's division of federal and state powers.


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