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Bush Proposing to Shift Burden of Toxic Cleanups to Taxpayers
KATHARINE Q. SEELYE . NY Times . 24 february 2002

W. R. Grace & Company's vermiculite mine in Libby, Mont., is no longer in operation, but asbestos from the mine has contaminated the town, and Libby may be headed for a Superfund cleanup.

WASHINGTON, Feb. 23 — Faced with dwindling reserves in the huge account that gave the Superfund waste cleanup program its name, the Bush administration has decided to designate fewer sites for restoration and to shift the bulk of the costs from industry to taxpayers.

The administration says it is dealing with much bigger and more complex sites, if fewer of them, and that deciding how to pay for the program is up to Congress.

For years Congress has failed to reach agreement on reauthorizing the tax on industry that used to be the source of money for the Superfund, which was founded in 1980 under the slogan "the polluter pays."

The trust fund used the special corporate taxes to clean up contamination at so-called orphan sites, or those where the responsible party could not be identified or could not pay, as well as for recalcitrant companies and emergency action.

The trust fund has been used to clean up about 30 percent of the 1,551 sites on the Environmental Protection Agency's national priority list, with corporations themselves paying to clean up the other 70 percent. Most companies prefer to pay for their own cleanup because they can do it for less than the government, which is allowed to charge the companies three times the cost, plus penalties.

But the trust fund is running out of money.

Under pressure from the chemical and oil industries, Congress let the corporate taxes expire in 1995. Without them, the trust fund dwindled, from a high of $3.8 billion in 1996 to a projected $28 million next year.

President Bush did not reauthorize the taxes last year in his first budget, and his proposed budget for 2003 explicitly states that he will not do so.

"The budget does not propose reauthorization of Superfund taxes," the administration says in an obscure section of the spending bill for Veterans Affairs, Housing and Urban Development and independent agencies.

Chemical and oil companies and other businesses had long complained that the taxes were burdensome, costing them collectively $4 million a day or more than $1 billion a year. They also complained that the Superfund program was slow, overly stringent and badly managed and had unfair liability rules.

Still, the taxes were reauthorized under President Ronald Reagan and again under Mr. Bush's father. They expired in 1995, and while President Bill Clinton sought to have them reinstated, the House of Representatives, by then under Republican control, refused.

The Bush administration's declaration that it will not reauthorize the taxes will substantially shift the costs of maintaining the Superfund trust fund to taxpayers.

In 1994, taxpayers paid $250 million for Superfund cleanups, or about 21 percent of the $1.2 billion fund, with corporate taxes paying $950 million, or about 79 percent.

Taxpayers paid $350 million in 1999, and since then have paid about 50 percent of the cost. Mr. Bush proposes that taxpayers pay $700 million, or more than 50 percent of the $1.3 billion fund, in 2003.

The fund itself will provide about $600 million in 2003. Even though the tax has not been collected since 1995, the fund has reserves because the Environmental Protection Agency has recovered costs from corporations and collected interest. But that amount is vanishing. By 2004, all the money will come from taxpayers.

"This is shifting the burden to taxpayers, and it is dramatically realigning the purpose of the program, which was to ensure that polluters pay," said Grant Cope, a lawyer with the U.S. Public Interest Research Group. "Taxpayers are paying more, and fewer sites are being cleaned up."

The lack of money is forcing agency officials to rethink their priorities. In the last two years, the agency has cut the overall number of sites it has designated for cleanup and completed cleanup at fewer sites than it selected.

More than 80 were cleaned up in each of the last four years of the Clinton administration, compared with 47 in 2001, Mr. Bush's first year in office, and 40 are projected to be cleaned up this year and 40 next. The administration had initially projected that it would finish 65 sites in 2001.

Marianne Horinko, assistant administrator of the agency's Office of Solid Waste and Emergency Response, said that fewer sites were being added, and fewer completed, because the agency had largely finished the $20 million "garden variety" sites on its list and was now taking on huge, very difficult cases — "megasites" costing more than $200 million.

This year, the agency has considered the addition of only two sites, both of them large old mines and both of them orphan sites, one in Montana and one in Nebraska.

"That's the future of the Superfund," Ms. Horinko said.

She said that Congress was happier with the program than it had been in the past in part because it had transformed itself from a "study, study, study program," with endless delays and litigation, to "a big construction program, and the money goes right into the communities."

Katherine Probst, a longtime expert on the Superfund and a senior fellow at Resources for the Future, an independent research group, said the drop was partly because of less money being available for cleaning up more complicated sites and partly because the Superfund program "hasn't been efficiently and effectively managed."

Representative John D. Dingell of Michigan, the top Democrat on the Energy and Commerce Committee, recently wrote to Christie Whitman, administrator of the E.P.A., asking for an explanation by March 6 of "the sudden slowdown."

"Has the administration made a policy decision to slow down Superfund cleanups, contrary to your assurances to us last May?" the letter asks. It also asks for details of each project that the administration had initially designated and no longer does.

The agency has not made that list public, but various officials said they had been sending notices saying activity would be delayed.

For example, Myron Knudson, director of the Superfund division based in Dallas, said he had five sites ready to be cleaned up by the trust fund but was not able to start because he had no money.

"I have five sites ready to go tomorrow, but I'm sending out letters saying there's no money at this time," Mr. Knudson said.

Since the Superfund began, 1,551 sites have been put on the national priority list, with 257 sites cleaned up and 552 mostly cleaned up, the E.P.A. said. At most of the sites, groundwater contamination remains a problem that will take years to remedy.

But money also remains a problem. A study by Ms. Probst, financed by Congress, predicted that over the next decade, 230 to 490 new Superfund sites could be added to the E.P.A.'s priority list and would cost at least $14 billion.

Democrats in Congress say they intend to push the administration to reconsider its refusal to reauthorize the corporate taxes, though they have little expectation that it will.

Representative Frank Pallone Jr., a Democrat whose New Jersey district is home to one of the biggest concentrations of Superfund sites in the nation, said, "The problem is that the president is adamantly opposed to the tax, and the Republican leadership is adamantly opposed to it, so the chances of getting it through are very slim."

Mr. Pallone said the situation was complicated by the tight budget. "The amount of money available for this will be dramatically less," he said. He predicted that ultimately, fewer sites would be cleaned up because the administration would not reinstitute the tax and would not allocate more taxpayer money from general revenues.

"I don't think this administration will appropriate enough general revenue money to make up for the loss of the tax," he said.

A spokesman for the Environmental Protection Agency said the agency was at the mercy of Congress.

"If Congress keeps the dollar amount at the same level, we'll continue as we have been," said Joe Martyak, the spokesman. "If Congress cuts it in half, we'll have only half as much."