EPA Sets New Smog Rules While Congress Cuts R&D Tax Credits

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We can’t argue with the EPA’s newly proposed smog standards.   As someone who has suffered from asthma and the mother of a child who suffers asthma bouts once in awhile, I find nothing more abhorrent then breathing in filthy air. The EPA proposes tightening the permissible parts per million (ppm) from 0.075 ppm to .060 and .070 ppm, measured over the course of eight hours. And though industry trade groups such as NAM (National Association of Manufacturing) have come out against the new rules, “The National Association of Manufacturers, citing EPA data that show a 25% fall in smog concentrations nationwide from 1980 to 2008, said the announcement shows that “with EPA, no good deed goes unpunished.”

We tend to agree with many of the policy positions held by NAM particularly when legislation impedes economic recovery. According to the EPA’s website on the proposed smog rules, “the proposal would yield health benefits between $13 billion and $100 billion, but the EPA also points out that the costs of implementing this proposal, “range from $19 billion to $90 billion. And like all public policy decisions, legislators (and regulators, where this proposal came from) must weigh the costs and benefits of all proposed policies. Certainly an opportunity exists for far more societal benefits to costs but the opposite also appears possible. As our regular manufacturing readers can attest, meeting new emission requirements often calls for innovation¦new products and technologies that obviously add cost to an operation. That cost, when offset with tax provisions such as the R&D tax credit help but according to a recent Forbes article, “the lapsing of the R&D credit–a $7 billion a year break–is a particular problem, since companies must plan for long-term research commitments amid uncertainty.

On the one hand, the Obama administration wants to focus on jobs and create programs and policies to stimulate job growth and broader economic growth but with activist regulatory agency heads enacting policies without looking at how such policies will be paid for the NAM concern remains valid. Let’s hope Congress votes to renew the R&D tax credits for 2010!

–Lisa Reisman

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