While President Donald Trump’s proposed budget cuts just $2.6 billion from the budget of the Environmental Protection Agency, the benefits for the American economy will likely be much larger.
The biggest economic benefits from Trump’s EPA budget would come from the complete elimination of funding for implementing the “Clean Power Plan,” the Obama administration’s scheme to cut carbon dioxide emissions from the electricity generating sector. The plan would have cost consumers hundreds of billions of dollars in increased energy costs and inflicted even further damage on America’s coal mining sector.
Estimates of the costs of the Clean Power Plan vary, with the EPA itself claiming it would cost virtually nothing while industry estimates say it would cost consumers as much as $214 billion in higher energy costs by 2030. Energy Ventures Analysis, a consultant group that receives much of its income from the energy industry, has said that replacing otherwise perfectly good electricity generating capacity with Clean Power Plan compliant capacity would cost as much as $64 billion.
But even if the costs are smaller, stopping the Clean Power Plan will mean consumers have more money to spend, save and invest in America’s growing economy. And billions of dollars that would have gone to replace existing power generating facilities, can be invested in expansionary economic activity.
Defunding the Clean Power Plan puts into action the idea of “deconstructing the administrative state.” The Clean Power Plan’s demands for a radical reshaping of America’s power industry weren’t included in any legislation passed by Congress or signed by the President. They were the creation of career bureaucrats and Obama administration political appointees.
The Supreme Court went so far as to issue a stay of the plan pending judicial review, blocking the EPA from implementing the scheme pending judicial review. The U.S. Court of Appeals for the District of Columbia Circuit heard arguments over challenges to the plan in September of 2016.
Cutting the EPA staff by 20% may also benefit the American economy if it forces the EPA to backdown from its aggressive regulatory and enforcement agenda. Last year, The American Action Forum, a center-right policy Institute, estimated that EPA now imposes nearly 200 million hours of paperwork to comply with its regulations. It estimated that it would take more than 94,000 employees working full-time to complete one year of EPA paperwork.
“The agency’s burden has surged 23 percent since 2009 and 34 percent since 2002,” the American Action Forum reported.