Congressional Outlook 2009 | January 19, 2009 Issue - Vol. 87 Issue 3 | Chemical & Engineering News
Volume 87 Issue 3 | pp. 43-53
Issue Date: January 19, 2009

Congressional Outlook 2009

New President will spur energy, climate-change agenda in Congress
Department: Government & Policy
Credit: Rochelle Bohaty/C&EN
Credit: Rochelle Bohaty/C&EN

THE DEMOCRATS come into the first session of the 111th Congress holding a sizable majority in both the Senate and the House of Representatives. And they will have a Democrat in the White House. These two factors bode well for an active congressional session.

The top priority facing Congress is finding a way to pull the country out of its current economic tailspin. Leaders from both houses are working on a stimulus package to stabilize the financial markets and create new jobs to reduce the growing level of unemployment. President-Elect Barack Obama has made it clear that he wants such legislation on his desk by next month. This will leave little time for Congress to tackle other issues immediately.

One issue that will soon compete for congressional attention, however, is the federal budget. Congress was unable to clear the fiscal 2009 budget last year, passing final 2009 appropriations for only the Departments of Defense, Homeland Security, and Veterans Affairs and temporary 2009 budgets for all other federal agencies. These temporary budgets will expire on March 6, forcing Congress to decide whether to pass another continuation bill or debate final appropriations for the affected agencies. Complicating this debate will be the arrival of the fiscal 2010 budget, which is set to be released on Feb. 2.

The congressional agenda, although dominated by the economy and the budget, will include some science and technology issues. The biggest priority will be bicameral efforts to combat global warming. Congress is also expected to pass permanent regulations governing chemical plant security, increase food and drug safety policies, and reauthorize the federal initiative to coordinate nanotechnology research and development.

The following is C&EN's annual outlook of what to expect from Congress in the coming months.

ECONOMY & BUDGET. Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways & Means Committee Chairman Charles B. Rangel (D-N.Y.) have outlined plans for moving tax legislation through Congress this year. Although those plans are likely to include a provision to extend the corporate R&D tax credit for another year, chemical industry lobbyists will urge lawmakers to make the incentive permanent.

"I can think of no better time than now to finally make the R&D tax credit permanent," says Joseph Acker, president of the Synthetic Organic Chemical Manufacturers Association (SOCMA), an organization of batch, custom, and specialty chemical companies. "This would provide our industry with assurance that our members, who spend tens of millions of dollars every year designing new products, can rely on government incentives that keep our industry competitive in the global marketplace," Acker says.

On the other hand, the American Chemistry Council's Calvin M. Dooley, the chemical industry group's president, says he is concerned about possible tax increases on corporations, which would impact the industry's ability to make investments in new technology. One such increase could be the reinstatement of corporate taxes on the chemical and petroleum industries to help finance the cleanup of toxic waste sites under the federal Superfund program.

The excise and corporate environmental income taxes, which expired at the end of 1995, generated about $1.5 billion per year for the Superfund trust fund, which ran out of money in 2003. Chemical manufacturers argue that Congress should continue to appropriate general revenues to finance the cleanup of so-called orphan sites because the parties responsible for the pollution are either unknown or no longer exist.

To set the stage for debate and possible action in 2009, a group of nine Democratic senators, including Democratic then-senator from Illinois Obama and Sen. Joseph R. Biden Jr. (D-Del.), introduced a bill to revive the fees shortly before Congress adjourned last year. Senate Environment & Public Works Committee Chairman Sen. Barbara Boxer (D-Calif.), a cosponsor, says the legislation will "ensure that polluters pay to clean up the most contaminated toxic waste sites." The legislation is expected to be reintroduced this year.

Credit: Courtesy of the Architect of the Capitol
Credit: Courtesy of the Architect of the Capitol

ENERGY & ENVIRONMENT. Climate change, which Obama has identified as a key policy priority, will draw a lot of congressional attention this year. Boxer plans to introduce two climate-change bills this month. One would establish a grant program under the Clean Air Act, with up to $15 billion in funds available each year. The grants, which Boxer describes as an economic stimulus, aim to encourage innovations in clean energy, including advanced biofuels.

The second piece of legislation would direct the Environmental Protection Agency to establish a cap-and-trade system for greenhouse gas emissions under the Clean Air Act. Boxer says the bill "will focus on achieving the emissions reductions needed while restoring the economy."

Jonathan Lash, president of the World Resources Institute, a Washington, D.C., think tank, predicts that the greatest legislative wrangling on climate change will focus on how much the U.S. should cut its emissions during the next 10 years.

This battle won't divide neatly along party or ideological lines, Lash says. In the Senate, some 17 Democrats represent states that have the U.S.'s lowest average electricity prices and are home to coal-fired power plants that are major sources of carbon dioxide pollution. These states are Arkansas, Colorado, Indiana, Michigan, Missouri, Nebraska, New Mexico, North Dakota, Ohio, South Dakota, Virginia, and West Virginia, he says. No climate-change legislation will get Senate approval without buy-in from Democrats from these states, Lash says.

In addition, coal-fired power plants will also be on the radar of Sen. Thomas R. Carper (D-Del.), chairman of the Senate Environment & Public Works Subcommittee on Clean Air & Nuclear Safety. For several years, he has championed a bill to curb sulfur dioxide, nitrogen oxides, and mercury—and possibly CO2, too—from power plants. This measure has attracted some interest but has gained little political momentum.

But two recent federal court rulings have upped the chance that some version of Carper's legislation will become law. In 2008, a court threw out two key regulations issued by EPA during George W. Bush's Administration, one controlling SO2 and NOx from power plants, and the other curtailing mercury emissions from utilities. In December, the court temporarily reinstated the rule covering SO2 and NOx, which state governments were relying on to meet air quality standards (C&EN, Jan. 5, page 18).

Congress could come up with a replacement for the SO2 and NOx regulation and the mercury regulation much faster than if EPA issued replacement rules, a process that would take years. States and even utilities, which want certainty about whether investment in pollution-control equipment is necessary, are expected to support Carper's efforts in coming months.

"The most immediate step that should be taken is to focus exclusively on addressing the dysfunctional food safety system under FDA."

Another Senate committee with great interest in energy issues is the Senate Energy & Natural Resources Committee, which has undergone significant changes from the last session. Retired is committee minority leader Sen. Pete Domenici (R-N.M.), a consistent and vocal advocate for nuclear power. He will be replaced by Sen. Lisa Murkowski (R-Alaska), a committee member and now new minority leader. She is a supporter of increased oil and gas drilling and favors opening the Arctic National Wildlife Refuge for drilling.

The direction of the committee will be influenced by the stimulus package, which is expected to include energy-related activities. Specifically, committee Chairman Jeff Bingaman (D-N.M.) has a long history of support for renewable energy, but it is unclear at this time how renewable energy will impact stimulus legislation. The committee, an aide says, is more in a response mode, waiting and watching to see what is likely to be proposed by congressional leadership and Obama.

Details are in flux. Obama has tied part of the stimulus package to energy, promising to double production of alternative energy within three years, make more than 75% of federal buildings and 2 million homes energy efficient, and improve the electricity grid. But according to accounts of those attending a closed meeting between Obama staff and congressional Democrats, Obama plans to propose $10 billion in stimulus spending for energy, a level many Democrats find too low to have the desired effect of creating jobs to jump-start the economy.

Bingaman's aide says committee-related efforts that don't find their way into the stimulus package will likely be included in an energy bill the senator hopes to introduce early in 2009. The bill would include a national renewable energy portfolio standard, incentives for fuel-efficient vehicles, and loans or other incentives to encourage renewable energy projects and energy efficiency. The committee is also likely to seek measures to improve the electricity grid, his aide says.

On the House side, the Energy & Commerce Committee has primary jurisdiction over climate-change and energy legislation. Late last year, Rep. Henry Waxman (D-Calif.) successfully challenged longtime committee chairman Rep. John D. Dingell (D-Mich.) for committee leadership. Waxman, with his Los Angeles base, is much more aggressive on air pollution controls and climate-change legislation than Dingell has been.

Waxman is likely to push early in the session for CO2 limits and trading either through a requirement that EPA propose controls under the Clear Air Act or by introducing CO2 trading legislation.

Another significant change in the committee leadership occurred on Jan. 8 when Rep. Edward J. Markey (D-Mass.), another aggressive supporter of climate-change legislation, replaced Rep. Rick Boucher (D-Va.), a coal-state representative, as head of the Energy & Commerce Subcommittee on Energy & the Environment. This subcommittee has primary jurisdiction over climate-change legislation in the committee and the House. Markey has urged Congress to quickly pass climate-change legislation and to cap CO2 emissions. Last year, he introduced his own climate bill, creating a CO2 cap-and-trade system, limiting CO2 emissions to 85% of 2005 levels by 2050, and raising some $8 trillion for what he calls a "clean-energy economy."

Ensuring that legislation to curb U.S. greenhouse gas emissions won't spur utilities to switch fuels and use more natural gas is a key concern for ACC, says Michael P. Walls, the chemical industry group's managing director. Natural gas is an important feedstock for chemical producers, and they don't want its supply to dwindle because of increased use to generate electricity.

Climate-change activity will also have an international bent this year, at least in the Senate. Negotiators are working to hammer out by December a treaty to reduce global emissions of greenhouse gases. The new pact would replace the 1997 Kyoto protocol, an accord that calls for industrialized countries to reduce their emissions between 2008 and 2012.

During these international talks, the Obama Administration will consult closely with the Senate Foreign Relations Committee, the panel that would handle U.S. ratification of any new international treaty on climate change. The committee has a new chairman, Sen. John F. Kerry (D-Mass.), who has long had an interest in action to stave off global warming. Kerry took over the gavel of the panel from Biden. Kerry attended the United Nations talks on climate change held in December 2008 in Poznán, Poland (C&EN, Dec. 1, 2008, page 11).

Credit: Rochelle Bohaty/C&EN
Credit: Rochelle Bohaty/C&EN

HOMELAND SECURITY. Chemical facility security is also expected to be a priority for the incoming Congress. And it is likely that multiple chemical security bills will be introduced this year to replace the current regulation renewing the Department of Homeland Security's authority in this area, which is set to expire in October. Some of these bills could put in place stricter antiterrorism requirements for facilities.

Rep. Sheila Jackson Lee (D-Texas), a member of the House Homeland Security Committee, sponsored the first chemical security bill (H.R. 261) of the 111th Congress on Jan. 7. The bill was cosponsored by Rep. Bennie G. Thompson (D-Miss.), chairman of the committee and sponsor of the Chemical Facility Anti-Terrorism Act of 2008 (H.R. 5577), which was introduced last year. Jackson Lee's bill is vague, focusing only on changing the state preemption clause included in the current regulation. The bill has been jointly referred to the Homeland Security and Energy & Commerce Committees.

"It is likely that another chemical bill will be introduced," Scott Jensen, communications director for ACC, tells C&EN. He speculates that H.R. 5577 will be reintroduced.

But Dena Graziano, a spokeswoman for the House Homeland Security Committee, says the committee, working closely with the House Energy & Commerce Committee, is drafting a new bill that is based on H.R. 5577 and doesn't plan to reintroduce last year's bill. The committees' collaboration is important because the resolution failed to move in the last Congress due to jurisdictional squabbling.

Provisions in H.R. 5577 that are expected to be included in the new legislation include allowing states to adopt stricter regulations over chemical facilities security, which is prohibited in the current regulation. In addition, the chemical industry could be required to consider inherently safer technologies (IST)—more benign chemicals and safer processes—which are not mentioned in the current chemical security law. Like H.R 5577, the new bill could also expand DHS's jurisdiction to include facilities that are not covered under the current regulation, such as water purification and wastewater treatment plants.

Some insiders warn that any bill introduced this year will go even further in tightening controls on chemical facilities. "An even stronger bill is expected, given that the political situation has changed" since last year, says Reece Rushing, director of Regulatory & Information Policy for the Center for American Progress, a nonprofit organization that follows chemical plant security. Rick Hind, legislative director for the activist group Greenpeace USA, also believes that this year's chemical security bill will be stricter on plant sites.

Support for this position comes in part because Democrats, who generally support more rigid security regulations, hold a commanding majority in Congress. Also, many observers believe that Obama is more likely to approve a tougher chemical security mandate than Bush would have.

Despite the expected support from the incoming Administration, a new security bill will not go unscathed. The chemical industry clearly favors a permanent security bill, but it is reluctant to support a bill that mandates IST.

"We will be asking Congress to keep the current rules in place and make them permanent," says William E. Allmond IV, government relations director of SOCMA. If forthcoming legislation contains an IST clause, SOCMA will "educate members of Congress about why such drastic approaches are unnecessary and how it could result in negative consequences for specialty batch manufacturers," he adds.

The jurisdictional debate may also resurface this year, but it is not expected to kill the bill. "The chairs of the relevant committees are all supportive of strong chemical security and believe in similar approaches," says Rushing. Which committee will ultimately have primary jurisdiction "needs to be resolved by the Democratic leadership," says Martin J. Durbin, vice president of federal affairs for ACC.

Credit: Rochelle Bohaty/C&EN
Credit: Rochelle Bohaty/C&EN

CHEMICAL WEAPONS. The destruction of chemical weapons stockpiles will continue this year, and it appears it will not encounter budgetary bumps.

Craig Williams, executive director of the Chemical Weapons Working Group, an international coalition of citizens living near chemical weapons storage facilities, tells C&EN that he expects Obama's budget request to include funding for ongoing destruction operations. And Gregory Mahall, chief of public affairs for the Army's Chemical Materials Agency, expects to receive full funding for these efforts.

As of press time, the Army has destroyed nearly 59% of the country's 31,500-ton chemical arsenal. After last year's complete destruction of nerve agent stockpiles, the focus will now be on blistering agent or mustard agent, according to Mahall.

The Army's destruction capacity is anticipated to increase because agents from large-item containers—which hold gallons of chemical agent versus rockets that hold about a gallon of material—are now at the center of its operations, Mahall tells C&EN. "We expect our numbers to see a major upswing in the future," he adds.

FOOD & DRUG SAFETY. The safety of the U.S. food supply is likely to be the subject of hearings once again this year. Some key Democrats, in particular Sen. Richard J. Durbin (D-Ill.), presumably will urge the new Administration to make food safety a priority, observers say. Durbin sponsored a bill in 2008 that would give the Food & Drug Administration new authorities such as the ability to better trace the origin of and to recall contaminated foods.

Rep. Rosa L. DeLauro (D-Conn.), chair of the House Agriculture, Rural Development, FDA & Related Agencies Appropriations Subcommittee, says she will reintroduce legislation—the Food Safety Modernization Act—in the House this year that would create a single, independent food safety agency. DeLauro has long advocated to split FDA into two separate agencies, one dedicated to food safety and the other to drug and medical device safety.

"The most immediate step that should be taken is to focus exclusively on addressing the dysfunctional food safety system under FDA," DeLauro says. Currently, food safety responsibilities are divided primarily between the Department of Agriculture, which oversees meat and poultry, and FDA, which has jurisdiction over fruits, vegetables, and fish.

Milk products contaminated with the industrial chemical melamine and adulterated heparin blood-thinning drugs brought import safety to the forefront in 2008, and the issue is likely to come before Congress again this year. "The thought is to give FDA new authority that allows the agency to put more responsibility on the exporter," says William K. Hubbard, a former senior associate commissioner of FDA who has been calling for an overhaul of the agency since he retired.

In addition, pharmaceutical companies that import active pharmaceutical ingredients will likely be required to do additional testing, Hubbard predicts. "The current requirement is you test it to see if it is potent. But there hasn't been in the past a requirement that you do contaminant testing," he notes.

House Energy & Commerce Committee chairman emeritus Dingell has said that committee leaders plan to introduce comprehensive legislation to protect Americans from unsafe food, drugs, and medical devices early this year. Committee leaders released a draft bill, the Food & Drug Administration Globalization Act, in 2008 and are continuing to work on it.

But observers say food and drug safety could take a backseat to other FDA issues such as tobacco regulation. Democrats in Congress, including House Energy & Commerce Committee Chairman Waxman, are expected to act quickly on legislation that would give FDA the authority to regulate tobacco. Such a bill passed the House and a Senate committee in 2008. If a similar bill is enacted by the next Administration, it would be a big deal because FDA would "have to create a whole new center with hundreds of millions of dollars of funding," Hubbard notes.

CHEMICAL REGULATION. Legislation to reform the current U.S. system for regulating chemicals died in the 110th Congress but is expected to be revived this year. Boxer in the Senate and Waxman in the House have indicated they are interested in pursuing this type of legislation.

ACC and SOCMA are preparing to engage lawmakers on the issue. The industry groups don't outright oppose this sort of legislation, but they want to ensure that the U.S. continues to regulate chemicals on the basis of risk, which takes into account not only the hazards a substance poses but also the possibility of exposure to it. They don't want reforms that allow chemicals to be controlled on the basis of hazard alone.

"Congress must ensure that any chemical risk management reform be narrowly tailored and avoid sweeping regulation that will stifle industry growth and innovation, as well as international trade," SOCMA's Acker says.

Endocrine disrupting chemicals, such as bisphenol A (BPA), are also likely to get the attention of Congress again this year. Sen. Charles E. Schumer (D-N.Y.) has said he will introduce legislation to ban BPA in children's products. In response to reports of BPA leaching from baby bottles and "microwave safe" plastic food containers, Rep. Markey has said he will introduce legislation in the House to ban BPA in all food and drink containers.

BPA has been at the center of a contentious debate since early last year because of health concerns associated with its use in consumer products. It is found in polycarbonate plastics and epoxy resins used to line food and beverage cans.

"The chairs of the relevant committees are all supportive of strong chemical security and believe in similar approaches."

TRADE. As the U.S.'s leading export sector, the chemical industry strongly supports the Bush Administration's aggressive, market-opening, free-trade agenda. But the number of lawmakers skeptical of the benefits of unfettered trade has been growing on Capitol Hill, putting at risk free-trade agreements the U.S. has negotiated with Colombia, Panama, and South Korea. President Bush signed the pacts, but Congress has not yet ratified them.

In the Nov. 4, 2008, election, free-trade critics picked up 28 House seats and at least six Senate seats, according to a tally by Public Citizen, a liberal advocacy group that opposes corporate globalization. The group blames the North America Free Trade Agreement and other trade pacts for U.S. job losses. Todd Tucker, research director of Public Citizen's Global Trade Watch division, says electoral gains for "fair traders" in the past two elections reflect "an unprecedented shift in the U.S. political landscape away from the disastrous trade and globalization policies of the past."

The chemical industry, which exported $153.8 billion worth of products in 2007, wants to see chemical tariffs in South Korea eliminated as quickly as possible. The Asian nation is among the top 10 chemical-producing countries in the world and is already the sixth-largest market for U.S. chemical exports. The industry also stands to benefit from duty-free access to Colombia, a significant market for companies such as Dow Chemical, which exports more than $300 million worth of products to the South American nation each year. However, both agreements face challenges in the Democrat-led Congress because of opposition by labor unions. Obama has also criticized the two pacts.

Although trade policy will not be an immediate priority in the new Administration, ACC's Dooley says, "I think it's inevitable that Obama will realize that we need to move forward on the pending free-trade agreements because it's in our economic interests. It's going to become increasingly evident in this economic downturn that we need access to these international markets."

Senate Finance Committee Chairman Baucus says the sequence and timing of congressional action on the free-trade agreements will be guided by the White House. But he will insist that Congress first pass legislation to help workers who lose their jobs because of international trade. "A robust renewal and expansion" of the Trade Adjustment Assistance Act will top his committee's trade agenda in the new Congress, Baucus noted in a statement last month.

Credit: Courtesy of the Architect of the Capitol
Credit: Courtesy of the Architect of the Capitol

PATENT REFORM. The biotechnology industry will continue to monitor efforts by Congress to overhaul the process of patenting inventions, says James C. Greenwood, president and chief executive officer of the Biotechnology Industry Organization. In recent years, high-tech companies such as computer makers and software developers have been pushing for major changes in the U.S. patent system. But the effort has failed to gain sufficient support in Congress so far, largely because of opposition by the biotech and the pharmaceutical sectors, as well as by labor unions and universities. The life sciences industry worries that sweeping proposals designed to curb patent litigation and weaken penalties for infringement could weaken the value of its intellectual property and discourage investment in R&D.

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and ranking member Arlen Specter (R-Pa.) have indicated that patent reform will be a high priority for their committee this year. Greenwood says a bill (S. 3600) introduced in late September by Senate Minority Whip John Kyl (R-Ariz.) is a "vast improvement" over previous patent reform proposals. Those improvements, he says, include damage provisions that would "enhance consistent enforcement of current law and provide greater predictability for companies across all industries, without manipulating the rules to favor infringers."

SCIENCE POLICY. Congress is expected to take up legislation that sets the stage for developing commercially successful and safe nanotechnologies. Reauthorization of the National Nanotechnology Initiative (NNI) will be on the agenda of the House Science & Technology Committee this year, Chairman Bart Gordon (D-Tenn.) said at a recent briefing.

Established in 2001, NNI coordinates nanotechnology R&D among 25 federal agencies. Over the years, NNI has struggled to keep up with the pace of nanotechnology development and to ensure that key environmental, health, and safety (EHS) research is being conducted.

In June, the House overwhelmingly approved a bill (H.R. 5940) to amend NNI to emphasize the need for EHS research. The bill did not, however, specify how much federal agencies should spend on EHS research. Sen. Kerry introduced similar legislation (S. 3274) last year, but it failed to move in the Senate. Legislation to amend NNI is likely to be reintroduced early this year and move quickly through the House Science & Technology Committee and the Senate Commerce, Science & Transportation Committee.

Science funding will receive a boost in support under the new Congress and incoming Administration, Gordon also told reporters at the briefing. The support may come through multiple bills including the economic stimulus package, a continuing resolution, and a normal appropriations bill, he added.

The most immediate financial support would come from the stimulus package. And Gordon told reporters that he is using the America Competes Act to advocate for additional science funding as part of this package. Additional funds supporting this act would go to the National Institute of Standards & Technology, the National Science Foundation, and the Department of Energy's Office of Science.

"Congress must ensure that any chemical risk management reform avoid sweeping regulation that will stifle industry growth and innovation, as well as international trade."

"Funding and implementing the [America Competes Act], which invests in research key to technological innovation and job creation and helps train people for new higher skilled jobs, is more urgent than ever," Gordon said at a House Democratic Steering & Policy Committee economic forum on Jan. 7.

Under Gordon, the House Science & Technology Committee will also hold hearings to make sure the National Aeronautics & Space Administration maintains the proper balance in its mission portfolio of science, human space exploration, and aeronautics. An important part of this debate will be the question of how many space shuttle flights NASA should schedule. Currently, the shuttle is scheduled to be retired in 2010, but pressure is mounting to allow the shuttle to continue flying past this date to complete and service the International Space Station.

Stem cell research will also be on the congressional radar this year, although it will not be the contentious debate it was during the 110th Congress. Obama has said he plans to lift Bush's policy limiting the number of human embryonic stem cell lines eligible for federal funding. Congress is also expected to pass legislation moving this expanded policy into law. Bush twice vetoed bills that would have done this.

The National Institutes of Health will continue to face questions from Congress about its staff's interactions with industry. Such conflict-of-interest investigations will continue to come from Sen. Charles Grassley (R-Iowa), who is particularly concerned about the relationship of NIH clinical researchers with drug companies.

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