Democrats Ready to Push Renewal of Disputed Superfund Taxes

Posted February 23, 2007 at 2:31pm

Key Congressional Democrats, worried that Superfund has been left to wither on the vine by the Bush administration, are seeking to beef up the toxic waste cleanup program by reviving a suite of long-dormant taxes that are reviled by business interests.

Since the taxes expired in 1995, the available balance in the Superfund account has dwindled to nothing, and since 2003, the program has been funded almost entirely by the federal treasury.

The Bush administration in recent years has requested roughly $1.3 billion annually for the Superfund program, with Congress typically appropriating slightly less. The fiscal 2008 request is $1.245 billion, a figure that “maintains funding for continued Superfund cleanup progress,” Susan Bodine, the EPA assistant administrator in charge of Superfund, told the House Transportation and Infrastructure water resources subcommittee on Feb. 14.

The Congressional Research Service noted in January that recent funding levels are hundreds of millions below what a 2001 Congressionally mandated review estimated the program needs.

Democrats and environmentalists argue that the lack of funds has led to a slow-down in the pace of cleanups that calls for a reinstatement of the taxes.

The proposal to bring back the taxes — a perennial favorite of such Democrats as Sen. Barbara Boxer (Calif.), who chairs the Environment and Public Works Committee — will likely clear a key hurdle in the 110th Congress because past supporters of reauthorizing the long-dormant taxes are in charge of both chambers’ tax-writing committees.

A spokeswoman for Senate Finance Chairman Max Baucus (D-Mont.) said that he supports reviving the taxes, adding that the town of Libby, Mont., is home to a major Superfund site.

In the House, Ways and Means Chairman Charles Rangel (D-N.Y.) co-sponsored legislation renewing the taxes in the 109th Congress, although a spokesman said it was “premature” to comment on how the issue could evolve this session.

The Environmental Protection Agency acknowledges it’s facing a growing backlog of cleanups, a point that House Energy and Commerce Chairman John Dingell (Mich.) — a longtime Superfund proponent — noted in a recent letter to EPA Administrator Stephen Johnson.

“Rather than expediting the rate at which Superfund sites are cleaned up, EPA has failed to meet the agency’s own 2007 projections,” Dingell wrote in the Feb. 16 letter. “This is an appalling development that undermines the primary goal of the program.”

Still, despite a Democratic majority in Congress, industry lobbyists and environmentalists agree that efforts to revive the taxes face a stiff hurdle in the Senate, where supporters are unlikely to gain the 60 votes needed to end debate on the bill.

A push to renew the taxes is all but certain to prompt a backlash from the chemical and oil industries, who have long complained that the taxes were unfair and the program mismanaged.

“We always felt we paid more than our share,”said Michael Platner, tax director for the American Petroleum Institute. “We will educate everyone on why [the taxes] should not be reimposed.”

The current battle dates back to the original passage of the Superfund law in 1980. Responding to several high-profile environmental disasters, Congress in 1980 authorized a series of taxes on crude oil, chemical feedstocks and corporate profits to fund the program, which is administered by EPA.

The law has long been unpopular within the business community because it has a strict liability scheme, under which the federal government can use strong enforcement leverage to force polluters to clean up contamination. The tax provisions, which are a separate part of the law, were intended to ensure the burden for addressing “orphan sites” — properties where the guilty parties had long disappeared — fell to industry, rather than taxpayers.

William Kovacs, the vice president for environment, technology and regulatory affairs for the U.S. Chamber of Commerce, said lawmakers must consider the economic impact of the proposal. Kovacs asserts that renewing the taxes would be a disincentive for companies to open for business in the United States.

Although House passage of tax reauthorization is possible, Kovacs said, shepherding a renewal through the Senate would be “another story.”

Alex Fidis, an attorney with the U.S. Public Interest Research Group, said that Democrats may be limited to conducting oversight of the Superfund program. “Most of the actions will be laying the groundwork for the 111th Congress,” he said — when Democrats have a shot at controlling additional Senate seats and the White House.

But Bodine defended the agency’s handling of the program in her testimony, saying EPA is focusing on maximizing its existing cleanup funds. Bodine said that many of the remaining sites the agency must clean up are large and complex, requiring significant resources.

An EPA spokeswoman added that while the agency will not meet its cleanup targets for fiscal 2007, officials expect the pace of cleanups to speed up in the coming years, enough to meet its long-term cleanup goals.

But some Democrats say that increased revenues from Superfund-related taxes are a necessary piece of the puzzle.

In the House, where tax-related legislation must originate, a spokesman says Rep. Maurice Hinchey (D-N.Y.) is drafting a bill that would not just renew but would increase the taxes, with the extra funds going to address the “mega-site” cleanups that Bodine argues is slowing the program.

Rep. Frank Pallone (D-N.J.), whose state is home to the largest number of Superfund cleanups, plans to reintroduce a bill reauthorizing the taxes at the 1995 levels. The Congressman is currently “reaching out to people on Ways and Means” to build support for the effort, his spokesman said.

Senate sources say that Boxer will lead the efforts in that chamber. The Senator’s spokesman did not respond to requests for comment.