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Real Fiscal Responsibility 5; Carter: Environmental Degradation

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This, the fifth post in a series evaluating the fiscal responsibility/irresponsibility of the Governments of the United States (mostly the Congress, the Executive Branch, and the Federal Reserve) by Administration periods, beginning in 1977 to 1981 with the Jimmy Carter period, will cover the performance of the Government on the environment and climate change aspect of “public purpose.” Posts 1, 2, 3, and 4, discussed some basic definitions and assumptions of the series and evaluated Government performance relating to economic stagnation, living wage full employment, price stability/inflation, implementing universal health care, and educational reform.

I've explained why fiscal responsibility is closely connected to the idea of public purpose, in this post prior to beginning the series. You'll want to read it, if you want to know what I mean by “public purpose,” and see what else that pregnant term includes, apart from enhancing the environment.

In the first post, I also claimed that the Government of the United States has been fiscally irresponsible in every Administration period since 1977, because its fiscal policies have largely worked against key aspects of public purpose. The first 4 posts supported that claim across 5 aspects of public purpose, as will this one. Future posts in this series will attempt to document it across additional aspects of public purpose.

Preventing further environmental degradation and ending climate change-inducing impacts of human activity before reaching the climate tipping point

By 1977, the view that the earth faces an environmental crisis was already widespread, and among climate scientists, even then, the idea of climate warming on human time scales caused by greenhouse gases was prevalent. The Club of Rome – commisioned, Volkswagen -- sponsored, Limits to Growth study, a system dynamics simulation, spawned a popular book selling in excess of 5 million copies. The book had the effect of focusing environmental concerns even more than already had been the case. And so, the environment became a front and center issue for the Carter Administration, the Congress, and other nations, as well.

Carter's motivation to be a good, even foundational environmental president seemed very high. In 1977 he constituted a high-level commission to study international aspects of the problem. In 1980 the Commission filed the Global 2000 Report, which among other things addressed the possibility of climate change due to CO2 emissions.

Its conclusions were pessimistic, and reactions to its projections were often negative. By the time the report was issued, people were tired of pessimism and there was a reaction, which didn't help the President in his quest for re-election. But before that report was issued, during his four years as President, Carter, in collaboration with Congress, was able to pass a significant amount of legislation addressing aspects of the environmental problem.

In 1977, Congress, with the support of the President passed the Surface Mining Control, and Reclamation Act (SMCRA); as well as key Amendments strengthening Clean Air Act (CAA) and the Clean Water Act (CWA). (p. 11) In 1978, the White House convened a major Conference on Balanced Growth attended by 500 delegates.

The conference reflected tensions between growth, energy needs, inflation, employment, current views on the failure of Keynesianism to provide a solution to oil price-driven inflation, economic fairness, and environmental quality. The Conference also dealt in significant detail with the issue of limits to growth.

The extensive conflicts laid bare during the Conference forced the Carter Administration to arbitrate among conflicting interests. Under that pressure, the Administration retreated to what was called “evasive decentralization,” (p. 205) emphasizing the State and local, rather than the Federal nature of what was in many of its dimensions and international and human problem.

This orientation shaped Administration policy thereafter and was additionally significant because it set a pattern where creation of environmental legislation, as well as regulation and enforcement was frequently pushed down to the State and local level on grounds that environmental conditions varied across the country. This pattern had and still has severe consequences for addressing the connection between local environmental impacts of industry and global warming, a problem intensifying since 1977.

Also, during 1978, the Love Canal tragedy happened. The Love Canal was an area originally intended to provide a connection between Lake Ontario and the Niagra River in the Northwest Corner of New York State close to Niagara Falls. For various reasons, the Canal could not be completed and the project was abandoned. During the 1920s it became a dump site for the City of Niagara Falls. Eventually, during the WWII, Hooker Chemical was given permission to dump chemical waste in the area and in 1948 Hooker became the sole owner and user of the site.

This dumpsite was in operation until 1953. During this time, 21,000 tons of chemicals such as "caustics, alkalines, fatty acids and chlorinated hydrocarbons from the manufacturing of dyes, perfumes, solvents for rubber and synthetic resins" were added. . . These chemicals were buried at a depth of twenty to twenty-five feet. . . After 1953, the canal was covered with soil, and vegetation began to grow atop the dumpsite.

Later on, after the site was sold back to Niagara Falls with safety warnings from Hooker, a school was built atop the site, and later a second school and a small working class community along with sewers was developed in the area. In addition, an Expressway and water lines were developed. All of this created conditions allowing the toxic wastes buried by Hooker to escape. The escape became visible in 1962 when people reported leakage of oil or colored liquid into their basements.

As the years passed, increasing health impacts on the residents of the Love Canal area were observed. In 1976, two reporters from the Niagara Falls Gazette tested sump pumps in the area and discovered toxic chemicals. Then in 1978, Michael Brown, another reporter did an informal door-to-door survey:

. . . finding birth defects and many anomalies such as enlarged feet, heads, hands, and legs. He advised the local residents to create a protest group, which was led by resident Karen Schroeder, whose daughter had many (about a dozen) birth defects. The New York State Health Department followed suit and found an abnormal incidence of miscarriages.

There quickly followed increasing community activism, along with more studies of the impact of the Love Canal on residents. A State emergency was declared on August 2, 1978, followed by a Federal Emergency, on August 7th.

. . . United States President Jimmy Carter announced a federal health emergency, called for the allocation of federal funds and ordered the Federal Disaster Assistance Agency to assist the City of Niagara Falls to remedy the Love Canal site. . . This was the first time in American history that emergency funds were used for a situation other than a natural disaster. . . Carter had trenches built that would transport the wastes to sewers and had home sump pumps sealed off.. . .

As the reaction to the Love Canal tragedy intensified and as the studies of toxic waste effects on the environment and the people mounted, it was clear that the biological impacts of toxic waste leakage were significant and tragic including numerous birth defects and health impacts on people. In addition, it was also clear that the problem wasn't restricted to Love Canal, since there are toxic waste dumps all over the nation, whose contents, may under certain conditions seep into soil or ground water and harm the environment. So, the Love Canal incident became a national issue.

Congress responded with “the superfund.” (p. 4) It was established by the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) Respond and Secure the Love Canal site. Passed in the last days of the Administration in 1980, the Act gave EPA the authority to act to respond and secure. It was a response to public pressure to do something about the Love Canal of a more permanent nature and also establish a means of responding to other Love Canal-like tragedies that might occur. The Government eventually relocated 800 families from the area, relocating them to safe areas and compensating them for their homes. Some 90 families elected to remain in the area, after being guaranteed that there homes were safe.

Based on the above, Government's response to environmental problems during 1977 - 1981 seems like a good one on the surface, and also quite vigorous in the context of the times. But was it a good one relative to the magnitude and severity of the problem, and did it provide a good foundation for moving forward to achieve the public purpose? Let's look a little more closely for the answer.

First, the Government's reply to the problem of environmental degradation did not address the possibility of climate change except to note that the long-term effects of CO2 emissions were potentially a major problem, and then to study potential effects in the Global 2000 Report to the President. No attempts were made however, to address this concern in fiscal policy before the end of the Administration.

Second, a different perspective on the Government's environmental effort is provided by looking at its environmental spending over the 1977 to1981 period. Carter/Congress budgetary allocations to the Energy, Interior and EPA for preventing environmental degradation averaged 1.350% of the Federal Budget for Energy; 0.800% of the budget for Interior, and 0.975% of the budget for the Environmental Protection Agency (EPA) over the four years of the Administration (pp. 320-321).

As a percentage of the Federal Budget these were the highest allocations ever recorded. They ranged from 20% to 50% higher than percentage allocations in the Ford Administration, and from 6% to 70% higher than the average percentage allocations for the Reagan Administration. The Bush 41 and Clinton Administration had even lower percentage allocations than these.

However, the Carter Administration allocations, while high in relative terms, are miniscule when one considers the rhetoric the Administration and others used to characterize the environmental crisis, the scale of the problems, and the developing climate change crisis. We can see this when we compare these allocations to the 22 – 23% of the Federal Budget allocated to the Defense Department, and when we remember that the expanded policy space existing for the Carter Administration made it possible to allocate much more deficit spending to this critical problem of national policy if Congress and the President had not been prioritizing deficit reduction over everything else other than inflation and defense.

So, here too, public purpose and real fiscal responsibility were short-changed to serve the needs of a misguided conception of fiscal responsibility advanced by an elite vitally interested in preserving its own wealth rather than serving the needs of most of the citizens of the United States. In my next post I'll address Government performance during the period 1977 to 1981 in the areas of reinventing/repairing US infrastructure and transportation systems and reinventing energy foundations of the US economy.

(Cross-posted from New Economic Perspectives.)

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