Obama Seeks 13% Cut in Environmental Agency’s Budget

President Barack Obama proposed cutting the Environmental Protection Agency’s budget 13 percent to $8.97 billion as the agency faces Republican demands to limit its funding and authority.

The fiscal 2012 budget proposed today is a $1.3 billion reduction from 2010, the last time federal agencies had an enacted budget. It calls for cutting aid to states for water quality by 27 percent to $2.54 billion and reducing funds to restore the Great Lakes by 26 percent to $350 million.

Obama’s budget counters a proposal from Republican lawmakers in the House to slash EPA funding by $3 billion and block the agency from regulating greenhouse gases from industrial polluters such as power plants. The president’s plan calls for about $43 million in new funding for the rules aimed at curbing carbon-dioxide emissions blamed for climate change, according to EPA Administrator Lisa Jackson.

“We need to get started,” Jackson told reporters on a conference call today. “Businesses are waiting right now to make investments, and one of the things they need to know is how we will be addressing carbon pollution going forward.”

The total EPA budget for the rules, which took effect last month, is about $190 million, including costs for state permit programs, according to Jackson. The EPA opposes any effort in Congress to bar or delay the regulations, she said.

Prospect for Delay

A one- or two-year delay of the greenhouse-gas rules has “greater likelihood” of becoming law than other proposals from the administration and Republican lawmakers, Whitney Stanco, an analyst at MF Global Inc.’s Washington Research Group, said today in a research notes to clients.

Peabody Energy Corp. of St. Louis, the largest U.S. coal producer, and the U.S. Chamber of Commerce, the nation’s biggest business lobby, are among those fighting the new rules, saying they will increase energy costs and destroy jobs.

The EPA is moving too quickly with new regulations, including the carbon limits, the chief executive officer of Progress Energy Inc. of Raleigh, North Carolina, which supports action to curb U.S. emissions, said today.

“I’m particularly concerned about the impact on low-income people,” Bill Johnson, whose company is being acquired by Duke Energy Corp. to form the largest U.S. utility, said at a conference in Washington.

Obama’s Goals

The EPA budget repeats Obama’s call for Congress to pass legislation that would help combat global warming, promote clean-energy technologies and reduce U.S. reliance on oil. Obama continues to call for reducing U.S. greenhouse-gas emissions by of about 17 percent by 2020 and 83 percent by 2050, according to the EPA budget proposal, which doesn’t say how those goals would be reached.

The administration decided to press ahead with the EPA’s greenhouse-gas rules after Congress’s failure to limit emissions through a cap-and-trade system, favored by Obama, that would let companies buy and sell the right to pollute.

The EPA budget also proposed ending a clean-diesel grant program that received $80 million in fiscal 2010.

“It was one of the tough decisions we had to make,” Jackson said1d. About $100 million in unspent stimulus funds remain to be spent on the initiative, Jackson said.

The program, which pays local governments to retrofit buses, trucks and construction equipment, was reauthorized by Congress for five years and a total of $500 million in December.

Senator Tom Carper, a Delaware Democrat, criticized the EPA for eliminating new funding.

“This successful program is a bipartisan, commonsense approach to cutting toxic diesel emissions,” Carper said in an e-mailed statement. “Clean diesel engines made today are nearing zero emissions, but that does nothing for the millions of engines already in use and will be in use for the next 20 years.”

To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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