[Senate Hearing 113-754]
[From the U.S. Government Publishing Office]







                                                        S. Hrg. 113-754

                          OVERSIGHT HEARING ON
     THE ENVIRONMENTAL PROTECTION AGENCY'S FISCAL YEAR 2015 BUDGET

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               ----------                              

                             MARCH 26, 2014

                               ----------                              

  Printed for the use of the Committee on Environment and Public Works



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




       Available via the World Wide Web: http://www.gpo.gov/fdsys


















                                                        S. Hrg. 113-754

                          OVERSIGHT HEARING ON
     THE ENVIRONMENTAL PROTECTION AGENCY'S FISCAL YEAR 2015 BUDGET

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 26, 2014

                               __________

  Printed for the use of the Committee on Environment and Public Works

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

       Available via the World Wide Web: http://www.gpo.gov/fdsys
                               __________
                               
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                    ONE HUNDRED THIRTEENTH CONGRESS
                             SECOND SESSION

                  BARBARA BOXER, California, Chairman
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JAMES M. INHOFE, Oklahoma
BERNARD SANDERS, Vermont             JOHN BARRASSO, Wyoming
SHELDON WHITEHOUSE, Rhode Island     JEFF SESSIONS, Alabama
TOM UDALL, New Mexico                MIKE CRAPO, Idaho
JEFF MERKLEY, Oregon                 ROGER WICKER, Mississippi
KIRSTEN GILLIBRAND, New York         JOHN BOOZMAN, Arkansas
CORY A. BOOKER, New Jersey           DEB FISCHER, Nebraska
EDWARD J. MARKEY, Massachusetts

                Bettina Poirier, Majority Staff Director
                  Zak Baig, Republican Staff Director
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                            C O N T E N T S

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                             MARCH 26, 2014
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Vitter, Hon. David, U.S. Senator from the State of Louisiana.....    20
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode 
  Island.........................................................   135
Crapo, Hon. Mike, U.S. Senator from the State of Idaho...........   136
Booker, Hon. Cory A., U.S. Senator from the State of New Jersey..   137
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...   138
Wicker, Hon. Roger, U.S. Senator from the State of Mississippi...   140
Sessions, Hon. Jeff, U.S. Senator from the State of Alabama......   143
Fischer, Hon. Deb, U.S. Senator from the State of Nebraska, 
  prepared statement.............................................   497
Barrasso, Hon. John, U.S. Senator from the State of Wyoming, 
  prepared statement.............................................   499
Cardin, Hon. Benjamin L., U.S. Senator from the State of 
  Maryland, prepared statement...................................   577

                                WITNESS

McCarthy, Hon. Gina, Administrator, U.S. Environmental Protection 
  Agency.........................................................   150
    Prepared statement...........................................   152
    Responses to additional questions from:
        Senator Boxer............................................   157
        Senator Markey...........................................   162
        Senator Vitter...........................................   164
        Senator Wicker...........................................   211
        Senator Fischer..........................................   215

 
OVERSIGHT HEARING ON THE ENVIRONMENTAL PROTECTION AGENCY'S FISCAL YEAR 
                              2015 BUDGET

                              ----------                              


                       WEDNESDAY, MARCH 26, 2014

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:01 a.m. in 
room 406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(chairman of the committee) presiding.
    Present: Senators Boxer, Vitter, Whitehouse, Booker, 
Inhofe, Barrasso, Sessions, Crapo, Wicker, Boozman, and 
Fischer.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. The committee will come to order.
    We are on a fast track because we have votes. Could I ask 
members to take their seats, please?
    I welcome Administrator McCarthy to this oversight hearing 
on the 2015 EPA budget.
    EPA's mission is to protect the public health and the 
environment through programs that address clean air, children's 
health, safe drinking water, toxics, and water quality. Like 
other Federal agencies, EPA has been asked to do more with 
less. Five years ago their budget was $10.3 billion, and the 
2015 budget request we are going to discuss today has been 
reduced to 7.9, a 23 percent cut; and I am particularly 
concerned about the proposed cuts to the Clean Water and 
Drinking Water State Revolving Funds and the Diesel Emissions 
Reduction Grant Program. These programs are critical to 
protecting our public health.
    In addition to funding cuts, EPA has faced other challenges 
in recent years, including a rogue career employee, John Beale, 
who has been sentenced to prison for defrauding the American 
taxpayers. I appreciate the work the Office of Inspector 
General did to ferret out this employee, and I would like to 
commend Administrator McCarthy for bringing his outrageous 
actions to light.
    EPA has over 15,000 employees and, just like any 
organization, public, private, even the military, there are 
bound to be a few outliers who must be held accountable. But 
with thousands of dedicated employees, EPA has demonstrated 
repeated success at improving our families' health by keeping 
the Nation's air and water clean and safe.
    For example, in 2010 alone, the Clean Air Standard and 
Program under the Clean Air Act prevented 13 million lost work 
days, prevented more than 160,000 deaths from air pollution, 
prevented 3.2 million lost school days, prevented 1.7 million 
asthma attacks.
    Administrator McCarthy, I can't find very many agencies 
that could say that.
    I wanted to show a picture of what happens when you don't 
pay attention to the air. This is another photograph of China. 
We don't need to have a theory on this; we see what happens 
when countries don't value their people enough to protect them 
from dirty air. Actually, there was a new study that shows 3.7 
million people worldwide have died prematurely from outdoor air 
pollution.
    We also know, over the last 40 years, while there were 
people railing against EPA, the economy has grown 212 percent, 
while air pollution has dropped 68 percent. A responsible 
budget must not lose sight of our top priorities, including 
protecting the health and safety of the people.
    What is at stake if we do not have adequate safeguards in 
place? Just look at West, Texas, where 15 people died in a 
chemical explosion, or look at West Virginia, where a chemical 
spill contaminated the water supply for 300,000 people. By 
taking preventive action, we can help communities avoid similar 
disasters.
    I intend, next week, to mark up a bill, the Manchin bill, 
that he wrote with Senator Rockefeller and myself, the Chemical 
Safety and Drinking Water Protection Act. I really do pray we 
can get that done next week here in a bipartisan way. We will 
get it done, but I am hoping for bipartisanship, because when 
you have chemicals that are not regulated and they are sitting 
on top of a drinking water supply, look what happened to that 
town economically when their drinking water was destroyed. I 
think we need to act.
    I also want to thank EPA for proposing a rule to clarify 
the jurisdiction of the Clean Water Act. Many colleagues on 
both sides of the aisle, along with dozens of organizations, 
including Ducks Unlimited, the Teddy Roosevelt Conservation 
Partnership, the Farm Bureau, the National Mining Association, 
the National Association of Homebuilders, have repeatedly 
called on EPA and the Corps to go through a formal rulemaking 
to clear up the uncertainty created by two confusing Supreme 
Court decisions.
    This proposed rule will now proceed through an open and 
transparent process where all views can be heard, including 
those whose views differ from yesterday's proposal. The 
proposed rule ensures protections for the wetlands and small 
streams that can be a source of drinking water for over 117 
million Americans. For the first time, EPA has listed bodies of 
water that are exempted from this regulation, including upland 
ditches, artificial lakes or ponds, reflecting pools, and 
swimming pools, and I ask unanimous consent to enter into the 
record the full list of exemptions. Without objection.
    [The referenced documents follow:]
   
   
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    Senator Boxer. EPA has a record that Americans be proud of, 
and I want to show you the support that EPA has in the public; 
we have it on a chart here. The American people know what you 
are doing and they appreciate what you are doing. Sixty-six 
percent of voters favor EPA updating air pollution standards by 
setting stricter limits. Seventy-two percent of voters support 
new standards for carbon pollution from power plants.
    So, Madam Administrator, I have to stop. I am holding 
myself to 5 minutes. I will hold everyone to that. Thank you 
for being here.
    With that, I would call on our ranking member, Senator 
Vitter.

            OPENING STATEMENT OF HON. DAVID VITTER, 
            U.S. SENATOR FROM THE STATE OF LOUISIANA

    Senator Vitter. Thank you, Madam Chair. Thank you all for 
being with us.
    This is a very important oversight hearing about EPA's 
budget and overall what is going on at EPA, its management 
practices, how it is being run. This committee obviously has 
that fundamental oversight responsibility. The starkest example 
of concerns about how EPA is being run, what I would 
characterize as a long-term culture at EPA, is the case of the 
former senior EPA official, John Beale. Of course, he has 
turned out to be a manipulator and charlatan of renowned 
proportions.
    We now know that EPA dithered for years rather than take 
action against a fake CIA agent who stole over $1 million of 
taxpayer money. This and other failings are detailed in a 
series of memoranda issued by my committee staff, which I would 
like to enter into the record at this time.
    Senator Boxer. Without objection, so ordered.
    [The referenced documents follows:]
 
 
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    Senator Vitter. Thank you.
    This memorandum exposes an indisputable time line that 
raises questions not just about John Beale, about EPA. In 
January 2011, Ms. McCarthy was informed that Beale had been 
receiving erroneous bonus payments that actually elevated his 
salary above a statutory cap, and was advised by her human 
resources staff and legal counsel to cancel the bonus. Instead, 
she deferred to an EPA official equal to her in rank at the 
time, allegedly because of uncertainty over Beale's CIA status. 
However, a senior EPA official directly informed Ms. McCarthy 
that there were no CIA employees at EPA.
    While it appears Ms. McCarthy believed the matter was 
closed when Beale announced his retirement in May 2011, she 
learned in March 2012 that Beale had not retired and in fact 
collected full pay plus the illegal retention bonus of $42,768. 
Ms. McCarthy took no action against Beale for nearly a year 
after this, finally canceling the illegal bonus in February 
2013. And instead of firing Beale, Ms. McCarthy allowed him to 
retire 2 months later with full benefits.
    Now, it is now clear that Beale also led one of EPA's most 
significant rulemakings prior to that, the 1997 National 
Ambient Air Quality Standards for Ozone and Particulate Matter. 
This effort codified EPA's practice of using fine particulates 
to inflate alleged benefits of nearly all Clean Air Act 
regulations. Almost two decades later, the Agency still refuses 
to share all the scientific data underpinning these very costly 
regulations.
    Collectively, Beale and his best friend Robert Brenner's 
work on the standards introduced a series of dubious actions 
that the Agency has continued to follow and comprised what my 
committee staff has referred to as EPA's playbook, as detailed 
in a comprehensive staff report issued last week on this issue, 
and I would like to enter that into the record.
    Senator Boxer. Without objection.
    [The referenced documents follow:]
    
    
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    Senator Vitter. The Obama EPA has embraced the strategies 
of this playbook and pursued ideologically driven agendas in 
much the same way as Beale did in the 1990s, pushing through 
controversial regulations where the ends justify the means. 
This is done by assenting to sue and settle agreements, 
excluding public participation, employing heavy handed 
management of the interagency review process, inflating 
purported benefits, and, quite frankly, just hiding science.
    EPA's continued use of the playbook has led to dire 
consequences for Americans. For example, on March 10th of this 
year, the New York Times reported on the story of 81-year-old 
Ernestine Cundiff of Columbus, Ohio, a diabetic with 
deteriorating health living on a fixed income. Ms. Cundiff now 
struggles to pay her energy bills as a direct result of EPA air 
regulations that have shut down electricity generation in her 
part of the country.
    To advance EPA's extreme agenda, it is also clear that this 
EPA extends its regulatory arm with complete disregard for 
American taxpayer dollars, and we have many examples of that.
    These examples of waste and abuse make congressional 
oversight absolutely critical. That is why this hearing and 
follow up work is so enormously important to get at this 
concerning culture, of which, unfortunately, John Beale is just 
the poster child, not the full extent.
    Thank you, Madam Chair.
    Senator Boxer. Thanks, Senator.
    I want to place in the record a counter to some of these 
things. An article in the Washington Post that says, outside of 
Gina McCarthy, there wasn't ever, ever, in all the years under 
the Bush administration, Republican and Democratic 
administrations, no one ever stopped Beale except Gina 
McCarthy. We will put that in the record and we will call on 
Senator Whitehouse.
    [The referenced document follows:]
    
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         OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 
          U.S. SENATOR FROM THE STATE OF RHODE ISLAND

    Senator Whitehouse. Thank you, Madam Chair.
    And thank you, Administrator McCarthy, for being here. You 
exercise one of the most important responsibilities of the 
Federal Government, to protect human health and the 
environment, and I applaud your service, and I am sorry that 
this issue has become so partisan. I have the seat of Senator 
John Chafee, who was both a Republican and an environmentalist, 
and I am sorry that that combination of features no longer 
seems possible in Washington.
    You have had to do more with less, and I appreciate that. 
There are people here who want you to do less with less. They 
don't want EPA to be efficient; they want it to be wounded and 
to be unable to protect the American public. But I urge you to 
continue with your work. Your Tier 3 motor vehicle rule, for 
instance, will prevent as many as 2,000 premature deaths and 
30,000 respiratory illnesses in children every year.
    The health benefits of the rule can actually be quantified 
and have been quantified to between $6.7 billion and $19 
billion in value to the American public every year. This is a 
particularly important public health victory in States like 
Rhode Island, where more than 1 in 10 of our citizens suffer 
from asthma. There may be people here who don't care about 
that, but I do, and I think it is important that the public 
health side of the equation be recognized, as well.
    I also applaud your efforts to regulate the carbon 
emissions that are coming from, first, to be new power plants 
and then, shortly, the regulations we hope for on existing 
power plants. We hope that we can do some work on your funding. 
It is unfortunate that, because of cuts, funding for Clean 
Water and Drinking Water State revolving funds had to be 
reduced by 30 percent and 17 percent, respectively. Those are 
important programs for our home States.
    It is also unfortunate that lack of resources has required 
EPA to delay some of its work, at least in part due to the lack 
of resources. The coal ash standard that the Obama 
administration committed to in 2008 was the result of a dam 
collapse in Tennessee and a coal ash spill 100 times the size 
of the Exxon Valdez oil spill. In the last few weeks, tens of 
thousands of tons of coal ash from Duke Energy facilities 
contaminated 70 miles of river in North Carolina and Virginia.
    Now, EPA has finally published the proposed rules in June 
2010. There has not been action since. The Federal Court has 
finally instructed EPA to complete the rule this year. I hope 
the recent episodes with coal ash disaster have motivated you 
despite the cuts. But that is the price of putting EPA under 
the kind of financial pressure. When you want people not to do 
more with less, but to do less with less, then that is what you 
get, and I think it is very unfortunate for North Carolina and 
Virginia.
    So I look forward to working with you. We actually, at 
last, have a budget timeframe that will allow appropriators to 
work through budgets and get into some detail, rather than have 
mad dashes and brinksmanship at the end between the President 
and the Speaker, for instance, without Senators having an 
opportunity to participate. So I am looking forward to working 
on that process.
    And please continue to go forward on climate change; it is 
way past denial, as the American Academy for the Advancement of 
Sciences recent report shows, as NASA scientists have 
repeatedly showed. I find it remarkable that people contend 
that NASA doesn't know what it is doing when they have an SUV-
sized vehicle drive around on the surface of Mars right now. 
That is a pretty good sign that these people know their 
science.
    So thank you for being here. You have fans and supporters, 
and we will have your back.
    Senator Boxer. Senator, thank you for staying so well 
within your time. The reason I am going to do a tough gavel is 
we have votes. If we can get down to the floor about 11:20, I 
think we will just make it.
    So we will now turn to Senator Crapo, followed by Senator 
Inhofe.

             OPENING STATEMENT OF HON. MIKE CRAPO, 
              U.S. SENATOR FROM THE STATE OF IDAHO

    Senator Crapo. Thank you, Madam Chairman, for holding this 
important hearing on the EPA's fiscal year 2015 budget 
proposal.
    And thank you, Administrator McCarthy, for joining us 
today.
    To begin with, I would like to echo my colleague's concerns 
regarding John Beale and his deep connections to regulatory 
decisions affecting all Americans. It seems difficult to 
conclude that any of Mr. Beale's work on the many initiatives 
under his purview at EPA can be trusted at face value. As such, 
I would like to take this opportunity to urge for a robust 
review of all rulemakings and regulatory actions connected with 
Mr. Beale's service at the EPA.
    Moving to the budget in particular, the Federal Government 
continues to face severe budget challenges, and further 
attention is needed by Congress in order to improve our long-
term fiscal outlook, knowing the funding priorities of 
executive branch agency is an important resource as Congress 
prepares its own budget and fiscal measures. I understand that 
the EPA, like all Federal agencies, has been working to do its 
part in achieving deficit reduction. However, I am perplexed by 
some of what I see in the EPA's budget proposals.
    In reviewing the EPA's budget proposal, I am concerned that 
the Agency has proposed funding reductions for programs that 
enjoy strong bipartisan support and are critical programs, 
while increasing funding for programs on initiatives that 
remain controversial. Specifically, at a time when we have just 
heard about a new proposal for what I consider to be nothing 
more than a jurisdictional power grab over water with regard to 
our Clean Water Act and safe drinking water statutes, we also 
see in the budget proposal the proposed reduction of funding 
for the Clean Water and Safe Drinking Water State revolving 
loan funds. That is a big concern to me.
    I think we all in America know that we are facing over $200 
billion of infrastructure needs in these arenas, and we have 
been working for years to try to get adequate budgets to help 
our Nation deal with its aging water infrastructure. And to see 
over $580 million in reduction of that budget, when other parts 
of the EPA budget could have been looked to for the necessary 
savings, is disturbing. The small communities who need this 
assistance to ensure that their water systems meet State and 
Federal environmental regulations are going to be badly harmed 
by this budget decision.
    Additionally, the proposed reduction in funding for the 
brownfields program is discouraging. Just last summer I co-
chaired an EPW subcommittee hearing in which we heard about the 
positive impact this program has had in Idaho and across the 
Nation.
    Also, many of my colleagues and I continue to have serious 
concerns with the President's climate action plan and the use 
of Executive authority to circumvent Congress. The EPA's 2015 
budget proposal clearly advocates the continuation of this 
alarming process.
    There are many other things I could say, but in terms of 
trying to pay attention to the chairman's admonition to keep it 
brief, I will end with this. But, Administrator McCarthy, I 
encourage you to help find a way to correct the budget 
decisions that will short-fund our State revolving funds and to 
help us move forward in correcting that trend and, in fact, 
help us to get increased resources into this critical part of 
our Nation's water infrastructure. Thank you.
    Senator Boxer. Senator, thank you so much.
    Senator Booker.

           OPENING STATEMENT OF HON. CORY A. BOOKER, 
           U.S. SENATOR FROM THE STATE OF NEW JERSEY

    Senator Booker. Thank you very much, Chairwoman, for this 
opportunity. I want to thank not only the Chairwoman, but 
Ranking Member Vitter for holding this hearing.
    Administrator McCarthy, I just want to welcome you. I am 
very excited about your leadership and the opportunity as a new 
Senator to serve with you because, for me, it is very obvious 
that the EPA's mission to protect public health is severely 
urgent. In the State of New Jersey, we have more Superfund 
sites than any other State. It is appalling how we, in the 
past, have not stepped up to hold people accountable for the 
messes that they are making, and we are spending billions of 
dollars of taxpayer money, I believe unnecessarily, in costs 
that should have been internalized by industry.
    So I believe right now it is appropriate and important that 
the proposed EPA budget for 2015 needs to make addressing 
climate change as one of the Agency's top objectives. We must 
address the threats posed by climate change before it is too 
late and that we are cleaning up the more expensive damage that 
it will do in the future.
    I am pleased to see in your budget proposed requests to 
allocate increased resources to climate change and air quality 
work, and to see funding specifically dedicated--and this gets 
me very excited--for preparing for the impacts of climate 
change. That includes technical assistance for adaptation, 
planning for risks associated with storm surges, a threat that 
we are very familiar with in New Jersey.
    New Jersey is particularly vulnerable to the impacts of 
climate change. Scientists at Rutgers recently estimated that 
the New Jersey shore will likely experience a sea level rise of 
1.5 feet by 2050 and 3.5 feet by 2100. The projections for the 
New Jersey coasts are higher than the projections for average 
sea level rise globally. The projected sea level rise of 1.5 
feet for 2050 for the New Jersey coast would mean places like 
Atlantic City, if there was a 10-year storm surge--not a 50-
year storm or 100-year storm, but just the scale of storm that, 
on average, we see every 10 years--flood levels from that storm 
would be worse than any flooding that has ever been experienced 
in Atlantic City, and it would be far more routine.
    EPA's budget justification also demonstrates the Agency's 
continued commitment to addressing issues of environmental 
justice, an area I would like to work closely with you on as we 
move forward. Climate change does not impact everyone equally. 
Low income and minority communities will be disproportionately 
impacted by future extreme weather events. While natural 
disasters may seem like equal opportunity destroyers, they are 
not. In today's economy, many people live in vulnerable 
communities and are one paycheck away from the devastating 
impact of poverty. In cities such as Newark and New Orleans, as 
we saw from Hurricanes Sandy and Katrina, one major storm can 
destroy fragile networks supporting families' access to food, 
shelter, and medicine. We must be prepared for increasing 
climate change.
    Low income and minority communities are systematically more 
likely to lack parks and trees and green spaces, and have a 
higher concentration of pavement than wealthier communities. 
Newark, for example, where I was mayor, approximately 70 
percent of its surface is impervious and only has 15 percent 
canopy coverage. The temperature of a paved surface absorbing 
summer heat can be 50 to 90 degrees above the temperature of a 
green surface. This leads to significantly higher air 
temperatures, which then result in increased air pollution, 
spikes in asthma rates, and more cases of heat stroke and even 
death among the elderly.
    The EPA has taken important first steps toward reductions 
of carbon emissions by setting standards that will cut carbon 
pollution from automobiles and trucks nearly in half by 2025, 
but we know that the power plants make up at least a third of 
the Nation's CO2 emissions; and I commend the 
Administration's work to limit greenhouse gas emissions from 
both new and existing power plants. The EPA has both the 
authority and the responsibility under the Clean Air Act to 
reduce pollution from these plants.
    Administrator McCarthy, I look forward to working with you 
on these issues. I admire your courage in this overly partisan 
debate. The truth is we share one common destiny in this 
country. Whether you are a red State or blue State, Republican 
or Democrat, the threats to our climate are real and they are 
obvious, and we can do things to address them that actually 
increase economic opportunity for our Nation and uplift our 
higher aspirations to make this a country with liberty and 
justice for all, and for that I thank you for stepping forward 
to lead and I look forward, again, to working with you.
    Senator Boxer. Thank you very much, Senator.
    Senator Inhofe.

          OPENING STATEMENT OF HON. JAMES M. INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Madam Chairman.
    Ms. McCarthy, even though we have a good personal 
relationship, I am growing increasingly concerned about the 
EPA's systematic distortion of the costs and benefits. We hear 
a lot about the benefits, but not the costs. While it is quick 
to turn over every stone to find every conceivable benefit that 
could come from a new rulemaking, the Agency exerts just as 
much effort to cut corners and ignore the reality so it can 
downplay the true economic costs of these regulations. This 
distortion enables the Agency to enact outlandish rules of 
obscene costs and harm to the economy and the American public 
without any respect to the cost-benefit balance enshrined in 
the foundation of our environmental laws.
    This topic has been one of focus to the committee, as 
evidenced by the recent report. We have already talked about 
John Beale and I won't elaborate on that, but more damage than 
the money he stole from the taxpayers is that he and others 
wrote the playbook on how to get away with this distortion of 
costs and benefit. For the sake of the American public, it is 
time to aggressively rein in this practice.
    As one example, let me just consider utility MACT rule. The 
utility MACT is the rule that requires powerplants to reduce 
certain components of their missions. The Clean Air Act 
requires these rules to be updated periodically, but only as 
technology allows and to the extent that the benefits outweigh 
the rule's full cost to the economy. In its cost estimate, the 
EPA stated the rule would create 46,000 temporary construction 
jobs and 8,000 net permanent jobs.
    Now that this rule has set in, we are starting to see its 
real impact, and the facts reveal that the rule has not only 
had a devastating impact on coal production across the country, 
but it also resulted in dozens of power plants being shut down, 
which has caused significant increases in electricity prices 
around the country.
    The New York Times reported on these impacts on March 10th. 
They wrote, ``Underlying the growing concern among the 
consumers and regulators is a second phenomenon that could lead 
to even bigger price increases: scores of old coal-fired power 
plants in the Midwest will close in the next year or so because 
of Federal pollution rules. Still others could close because of 
a separate rule,'' we are talking about the water rule, ``for 
utilities. Another frigid winter like this could lead to a 
squeeze in supply, making it even harder and much more 
expensive to supply power.'' That is all a quote from the New 
York Times.
    But this is already happening. The article reported that in 
Rhode Island a utility received permission to raise prices 12 
percent over the previous years. In Pennsylvania, utility bills 
have tripled in some places. What is shocking to me is the New 
York Times is connecting these increases back to the EPA's 
regulation. So I have to wonder is it even remotely possible 
that the utility MACT rule created 8,000 net permanent jobs as 
EPA said it would. If this is causing electricity prices to 
triple in some areas, how is that possible?
    Before I came to Congress, I was in business, and when 
input costs go up, it doesn't create jobs; it lowers profits, 
it puts strains on the margins of the business. The same is 
true with the whole economy. And when an input cost as 
significant as electricity begins to soar in cost or wobble in 
reliability, the impact is negative and felt across the entire 
economy; it destroys jobs, it doesn't create 8,000 new jobs. 
That the Obama EPA can get away with this kind of distortion 
proves the Agency, in my opinion, is out of control, and this 
is something I am going to focus on for the rest of the year; 
it is simply too important for us not to. EPA's impact may be 
coal now, but we know it is going to be natural gas next. 
Whether it is hydraulic fracturing or methane emissions, the 
EPA is intent to carry out what the Sierra Club has named its 
Beyond Natural Gas campaign, just as the EPA did with Sierra 
Club's Beyond Coal campaign.
    We in the Senate are charged with stewarding this Nation, 
which includes watching out for those who are most vulnerable. 
The elderly and the poor are most at risk for losing their 
homes and health due to the skyrocketing electricity bills, 
which is exactly what will happen under the EPA's war on fossil 
fuels. It is our job to watch out for them. These are the most 
vulnerable people, I suggest to my good friend from New Jersey.
    So I would only say, Madam Chairman, I am going to have to 
excuse myself for a while for an Armed Services obligation, but 
I am going to be coming right back.
    Senator Boxer. Sure.
    Senator Inhofe. And hopefully we will have a chance to 
respond to some of these comments made concerning climate 
change.
    Senator Boxer. Thank you. I am excited what you said about 
the elderly and the poor, so we will work together on that.
    Let me say what I am going to do, unless there is 
objection. We are going to hear from the two Senators who 
haven't been heard from, and then I am going to shut down the 
comments here so that we can get to Gina McCarthy. Colleagues 
coming in can do their opening statement with their questions. 
Is that OK with everyone? OK, that is excellent.
    So we will hear from Senator Wicker, followed by Senator 
Sessions.

            OPENING STATEMENT OF HON. ROGER WICKER, 
           U.S. SENATOR FROM THE STATE OF MISSISSIPPI

    Senator Wicker. I think that is a very good solution, Madam 
Chair.
    Senator Boxer. All right.
    Senator Wicker. I would like to ask unanimous consent to 
place in the record at this point an op ed from 
WallStreetJournal.com entitled How Carbon Dioxide Became a 
``Pollutant.''
    Senator Boxer. Without objection.
    [The referenced document follows:]
   
   
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    Senator Wicker. Thank you. And I do it for this purpose, 
Madam Chair and Administrator McCarthy: We have had a lot of 
discussion already this morning in the form of opening 
statements about the proven dreaded results of particulate 
pollution and poisons put into our environment, an issue where 
everyone in this room agrees. We have heard discussion in 
statements about respiratory illnesses; we have heard 
endorsements by the American Lung Association; we have talked 
about asthma; particulate pollution in China, this awful 
picture that the chairman showed showing smog in China; 
discussions of coal ash; Superfund sites.
    And then without making any distinction at all between 
these poisons and particulate pollutants, my friends on the 
other side of the dais switch almost in the same sentence to 
climate change, where the target there is greenhouse gases and 
carbon dioxide, making no distinction between the fact and 
making no mention of the fact that CO2 and 
greenhouse gases have nothing to do with respiratory illnesses 
or with lung disease or asthma or smog in China or coal ash or 
Superfund sites, something we all are very much interested in.
    And I would point out to my colleagues that toward the end 
of this op ed that is now part of the record, EPA acknowledged 
some positive impacts from higher CO2 
concentrations. One is faster growing trees in tropical 
forests, which helps offset deforestation. EPA has acknowledged 
that. CO2 is good for the rainforest. Another is 
that marshes can grow more quickly above rising sea levels, 
providing an insurance policy of sorts for low-lying areas 
against the potential ravages of rising sea levels.
    So, at any rate, I would just point out that there are 
differences on this committee about the effect of 
CO2 on climate change, but no one is suggesting that 
CO2 causes lung disease, asthma, or the kind of smog 
that the chairman talked about.
    I will tell you what we do agree on, Administrator 
McCarthy. We agree that there are some mighty fine programs 
that the Administration is proposing cuts for. The 2015 budget 
process, the budget of the Administration proposes cutting $430 
million from the Clean Water Revolving Loan Fund, $150 million 
from the Drinking Water Revolving Fund, and $5 million from the 
Brownfields Program. This is something we can all agree on: 
these are proven programs that are well received by State and 
local communities, encourage the EPA to work with communities 
in a cooperative manner rather than a confrontational one.
    These cuts are even more troubling considering that some 
estimate the amount needed to bring local water infrastructure 
into EPA regulations is over $2.5 trillion. We need to be 
helping local communities rather than putting unfunded mandates 
on them.
    All across the Federal Government, agencies are having to 
make tough decisions to rein in the country's spending. I would 
rather we help communities with safe drinking water and with 
safe air, rather than putting some funding of dubious value 
into CO2 regulation in the name of climate change.
    I am also concerned that EPA addresses out-of-compliance 
communities often with subpoenas and civil action, when we 
should be coming to them with technical assistance and grants. 
EPA's enforcement actions may help achieve compliance, but when 
small and rural communities must funnel meager funds away from 
schools and hospitals, I question the efficacy of this 
approach.
    I raised many of these same issues in the record during 
Administrator McCarthy's nomination hearing. I look forward to 
visiting with her about these in the future.
    Finally, I hope we can work together to strengthen the 
partnership between EPA and small rural communities in 
developing and complying with regulations to protect our 
environment and our citizens. This is an issue upon which 
Republicans and Democrats can agree.
    Senator Boxer. Senator, thank you.
    Finally, Senator Sessions.

           OPENING STATEMENT OF HON. JEFF SESSIONS, 
             U.S. SENATOR FROM THE STATE OF ALABAMA

    Senator Sessions. Thank you.
    Senator Wicker, I thank you for saying what you said, it 
was very important. CO2 is an odorless, tasteless 
gas we emit when we breathe, and plants all breathe it in and 
grow faster when there is more CO2, a fact which 
cannot be denied. We need to differentiate that between the 
kinds of actual pollutants that make people sick, and we can do 
that. We have made a lot of progress in America to clean up the 
air, and we need to keep at it, but we need to be smart about 
it. It is a bit disingenuous when I hear people say carbon, 
carbon, carbon, and what they really mean is CO2. 
They use the word carbon and it makes people think of soot and 
particulates and things of that nature, and I think that really 
misrepresents the issue somewhat.
    Ms. McCarthy, I am concerned about spending. We are going 
to see interest on our debt grow from $211 billion last year, 
according to the Congressional Budget Office, to $880 billion 
in 1 year 10 years from now. Every agency has to watch its 
spending, and Congress has a clear duty to monitor spending.
    The ozone standard that you sought or your department 
sought to advance early is an example, I believe, of wasted 
money. In 2008, after a process that took 8 years, EPA 
tightened significantly the ozone standard. That was done in a 
proper way. And under the Clean Air Act the ozone standard was 
to be reviewed again in 5 years. Yet almost immediately upon 
coming into office, the Obama EPA began a costly and premature 
process of reconsidering the ozone standard to make it even 
more stringent, and this reconsideration was recognized as one 
of the most expensive environmental regulations ever proposed, 
with some estimates reaching $90 billion in annual costs. I 
objected to that; 30 Senators wrote to object to that, and that 
decision was reversed. I simply asked how much did this cost in 
the 2 years that it was undertaken before it was abandoned; how 
much money was wasted; how much money was spent on that, and I 
have inquired on several different occasions.
    I would offer for the record a letter that I wrote on a 
letter that you wrote to me, a letter that was written by the 
Republican members of this committee to you asking about an 
analysis of what you spent, and, in effect, you responded this 
way, or at least your Assistant Administrator Janet McCabe: 
``It is difficult for EPA to estimate with any meaningful 
precision the expenses and full-time equivalent employees used 
for the reconsideration of the 2008 ozone standard 
specifically.''
    Well, it is not difficult for you to answer that question. 
I think that is a direct refusal to answer. And you said at the 
hearing, when I asked you about it, that you would do that. I 
asked you to provide a response, if you would respond to the 
question for the record, and you answered, I absolutely will. 
You were specifically asked, did EPA incur significant costs as 
part of the ozone reconsideration? If so, how much? And you 
ignored that question.
    Can you not provide us the information that we asked? That 
will be a question I will be asking you. I think it is a 
responsible action for us to ask about and we will continue to 
press it.
    Madam Chairman, I will wrap up. Thank you for the 
opportunity to ask these questions. And I will share Roger 
Wicker, Senator Wicker's concern that we are moving money from 
State programs for clean water and water treatment to the 
bureaucracy at EPA. I think that is the wrong path to take.
    [The referenced letters follow:]
    
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    Senator Boxer. Senator, thank you so much for keeping it 
under the time limit.
    Yes, Administrator McCarthy, this is your time. Welcome.

     STATEMENT OF HON. GINA McCARTHY, ADMINISTRATOR, U.S. 
                ENVIRONMENTAL PROTECTION AGENCY

    Ms. McCarthy. Thank you. Chairman Boxer, Ranking Member 
Vitter, and members of the committee, thank you for the 
opportunity to discuss the Environmental Protection Agency's 
proposed fiscal year 2015 budget. I am joined by the Agency's 
Acting Chief Financial Officer, Maryann Froehlich.
    EPA's budget request is $7.980 billion for the 2015 fiscal 
year starting October 1, 2014. This budget meets the challenges 
of domestic spending constraints while still fulfilling our 
mission to protect public health and the environment.
    The fiscal year 2015 budget reflects EPA's plans to take 
advantage of new technologies and new regulatory and non-
regulatory approaches; it recognizes that EPA is part of a 
larger network of environmental partners and States, tribes, 
and communities.
    This budget will provide the support for a smaller work 
force by focusing on real progress in priority areas in 
communities about climate change and air quality, toxics and 
chemical safety, as well as clean water.
    And we are asking for $7.5 million and 64 staff in fiscal 
year 2015 to help provide green infrastructure technical 
assistance for up to 100 communities to provide cost-effective 
approaches for water management.
    In addition, the budget requests continues our 
environmental justice efforts. We will do more to partner with 
States, tribes, and local governments and other Federal 
agencies. Funding for State and tribal assistance grants, or 
STAG, dollars is once again the largest percentage of EPA's 
budget.
    Addressing the threat from a changing climate is one of the 
greatest challenges of this and future generations. The request 
designates $199.5 million specifically for this work.
    The Agency has added $10 million in 24 FTEs in fiscal year 
2015 to support the President's Climate Action Plan, with $2 
million designated for adaptation planning.
    The Agency will also focus resources on the development of 
common sense and achievable greenhouse gas standards for power 
plants, the single largest source of carbon pollution. When it 
comes to cutting greenhouse gas emissions, the President's 
budget provides support for the States to help them implement 
the Clean Air Act.
    The EPA budget requests almost $673 million to support work 
to improve chemical safety for all Americans, and especially 
our children.
    We are requesting $23 million and 24 FTEs in 2015 to 
support activities under the President's Executive Order on 
chemical safety, as well as Agency efforts on chemical 
prioritization, air toxics, radon, and volatile organic 
compounds in drinking water.
    The Nation's water resources are the lifeblood of our 
communities. We are requesting $1.775 billion for the Clean 
Water and Drinking Water State Revolving Funds.
    The Agency is also directing $8 million and 10 FTEs to 
advance clean water infrastructure and sustainable design like 
the Municipal Separate Storm Sewer Systems Program for 
technical support to communities.
    E-Enterprise is a major joint initiative between EPA and 
the States to modernize our business practices, to get us into 
the 21st century, to develop a new business model that looks 
toward the future. The benefits of implementing the E-
Enterprise initiative can be seen in the budget. Just the E-
Enterprise initiative of E-Manifest alone includes annual 
savings estimated at $75 million for over 160,000 waste 
handlers.
    In fiscal year 2015, the Agency is requesting $1.33 billion 
to continue to apply effective approaches for clean up of RCRA, 
Superfund, Leaking Underground Storage Tank, and other 
authorities. This strategy will ensure land is returned to 
beneficial use. $1.16 billion is requested for Superfund, which 
includes a $43.4 million increase for remedial work and an 
increase of $9.2 million for emergency response and removal.
    The fiscal year 2015 budget includes a total of $1.13 
billion in categorical grants. Within that total is over $96 
million for tribal general assistance program grants, an $18 
million increase for pollution control, a $16 million increase 
for environmental information grants, and a $15 million 
increase for State and local air quality management.
    Science is at the foundation of our work at EPA, and 
science is supported by the President's budget request of 
$537.3 million.
    Last, across the Administration we recognize the importance 
of the 2-year budget agreement Congress reached in December, 
but the resulting funding levels are not sufficient to expand 
opportunities to all Americans or to really drive the growth of 
our economy in the way that is needed.
    For that reason, across the Federal Government, the budget 
also includes a separate, fully paid $56 billion initiative 
that is supporting climate resilience. EPA would be the 
beneficiary of approximately $15 million.
    Chairman Boxer, I thank you for the opportunity to testify, 
and I will take your questions.
    [The prepared statement of Ms. McCarthy follows:]
    
    
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    Senator Boxer. Thank you. I am sorry I kind of rushed you 
at the end.
    Ms. McCarthy. That is all right.
    Senator Boxer. So I am so taken by some of my colleagues' 
comments, and I have such great relationships across the aisle, 
personal relationships, but this idea that the Republicans 
support cracking down on ozone and smog and particulate matter 
just isn't true. All you had to do is listen to these comments. 
They are opposed to everything EPA does, not just climate.
    And I want to point out and put in the record the 
endangerment findings started under the Bush administration 
from too much carbon pollution. We know you need a certain 
amount in the air, but too much is dangerous. This is what it 
says. And it started with Bush and it was completed under 
Obama: Climate change threatens human health and well being in 
many ways, including impacts from increased extreme weather 
events: wildfire decreased air quality, diseases transmitted by 
insects, food, and water. Some of these impacts are already 
underway, and there are cases of kids, for example, swimming in 
lakes that used to be much colder; now they are warmer and 
there are different kinds of bacteria and amoebas, and one 
child got a brain disease swimming in a lake in Ohio. And we 
will put all that into the record.
    [The referenced documents follows:]
    
    
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    Senator Boxer. So there is an endangerment finding, so for 
people to sit here and say it is no danger is simply 
contradicted by the facts and by science.
    I also want to ask you a couple things here. There is an 
attempt now to blame all the clean air regulations, blame them 
on this rogue employee who is now in jail. Is it not true that 
any kind of proposed rule goes through public comment, peer 
review, interagency review, and is subjected to judicial 
review? Is that not so?
    Ms. McCarthy. That is correct.
    Senator Boxer. OK. And that is the case with all of these 
rules.
    I also want to show you what has happened in California, 
Administrator McCarthy. I think you know this, but I want to 
show you what happened in the clean air with the dirty air 
days. In our State, in Southern California, colleagues, we used 
to have days where there were health advisories and people 
could not go out; and every time I hear Senator Inhofe and 
others complain about these rules and say this is baloney, 
there were no benefits, excuse me. Open your eyes. Look at what 
happened in L.A. and Southern California. In 1976 we had 166 
advisories. People were warned not to go out. Everyone says 
they care here about the elderly, and we all do. This was huge 
for the elderly population, to be able to go out and breathe 
the air. And now, in 2010, guess what? We had zero health 
advisories.
    So I would say, Administrator McCarthy, are you aware of 
this in Southern California, and are there other places where 
you can find similar results in the country?
    Ms. McCarthy. Yes.
    Senator Boxer. OK. I also wanted to share something else 
with you, which is, again, a poll, the poll numbers on all of 
this. And this is about climate change, where my colleagues are 
railing against it; and that is a fact, they are. We had an 
all-nighter that was organized by Senators Whitehouse and 
Schatz, and we did hear from Senator Inhofe, for which I was 
very grateful he came down; and he railed against what we were 
doing and said, in other words, it is a hoax and all the rest, 
and we respect him and his view.
    But no one came down here. This is where people are. People 
are not with the Republicans on this. Let's just be clear. I am 
sorry to have to say this in partisan terms, because I served 
with the great John Chafee. I served with the great John 
Warner, and I saw bipartisan support to move; and I see none of 
it now. It is sad. It is sad. And the reasons I don't even want 
to go into, because I think I know why. But the bottom line is 
81 percent of Americans think climate change will be a serious 
problem if nothing is done to reduce it.
    So thank you for doing what you do despite all the 
pressure, despite all the insults.
    Seventy-five percent of Americans say the U.S. should take 
action on climate change even if other nations do less, because 
they are smart. We don't wait for China to decide how to treat 
our people and our economy and human rights and religious 
freedom. We are America, we lead. So the American people get 
it.
    And I guess I don't have a lot of questions for you, 
because you are going to get plenty. I just want to say keep 
going. Keep doing what you are doing based on science.
    And I would ask Senator Vitter now.
    Senator Vitter. Thank you, Madam Chair and thank you, Madam 
Administrator. I am going to use my very limited time to ask 
some questions about the John Beale case, because I do think 
this case reflects a deeply broken bureaucracy long-term; that 
it is not an isolated incident and that John Beale, with his 
good friend Robert Brenner, were instrumental in developing key 
EPA regulations.
    So, Madam Administrator, isn't it true that you received a 
memo on January 12th, 2011, informing you that Beale's salary 
was illegal, it exceeded the statutory cap, and recommending 
that that bonus be terminated?
    Ms. McCarthy. It is true that I became aware of the bonus, 
yes.
    Senator Vitter. And isn't it true that you did not cancel 
that illegal bonus until over 2 years later, February 2013?
    Ms. McCarthy. Actually, Senator, what is true is I did 
pursue that issue effectively, and I think the Agency was 
addressing it effectively.
    Senator Vitter. But the illegal bonus, you knew it was 
illegal January 12th, 2011, was canceled February 2013.
    Ms. McCarthy. Yes. I went ahead and I reported that----
    Senator Vitter. So that 2-year rapid response you consider 
effective?
    Ms. McCarthy. No. Actually, it took a while to get to the 
bottom of the John Beale issue because he was a criminal that 
had systemically intended to fraud the Agency. But the good 
news is that he is in Federal prison right now, having paid 
back----
    Senator Vitter. But you knew the bonus was illegal and it 
went on for 2 years.
    Ms. McCarthy. Actually, I understood that it was being 
investigated, and I had sent it to the correct people to 
investigate it.
    Senator Vitter. OK. Why, in early 2011, were you reluctant 
to finalize, to not cancel the bonus? Why were you reluctant to 
take action?
    Ms. McCarthy. Actually, I understood that the issue was 
going to be referred to the Office of the Inspector General. 
When that happens, you need to give them the opportunity to 
investigate it and see if it is going to be managed criminally. 
And I would never want to interfere with an investigation of 
the Office of the Inspector General.
    Senator Vitter. Now, Susan Smith, at OARM, has stated, 
``Gina is reluctant to finalize cancellation of the bonus 
unless OARM gives her the OK that the White House is aware and 
there will not be any political fallout.'' Was that correct?
    Ms. McCarthy. I don't know what you are reading, sir, but I 
don't think I have had a conversation----
    Senator Vitter. That was an e-mail from Susan Smith. That 
was a direct quote from her.
    Ms. McCarthy. I have never had a conversation with her, so 
I don't want to speak to her e-mails.
    Senator Vitter. Were you concerned to act until the White 
House looked into it and made sure there would not be any 
political fallout?
    Ms. McCarthy. I had no interaction with the White House on 
this issue whatsoever, to the best of my recollection.
    Senator Vitter. That wasn't the question. Were you 
concerned that the White House look at this regarding political 
fallout?
    Ms. McCarthy. That was never a concern of mine, Senator, 
no.
    Senator Vitter. Did you ever talk to Scott Monroe about 
that?
    Ms. McCarthy. Many times.
    Senator Vitter. OK.
    Ms. McCarthy. No, I am sorry, not about the White House. I 
spoke to him about Mr. Beale and his bonus.
    Senator Vitter. Well, the same Susan Smith e-mail says that 
Scott Monroe told her that you had those concerns. Is that just 
not true?
    Ms. McCarthy. I never had concerns about the White House's 
interference or knowledge that----
    Senator Vitter. So if Scott Monroe said that, he is not 
speaking correctly?
    Ms. McCarthy. Not based on any conversation he had with me, 
no.
    Senator Vitter. OK. Fundamentally, why did it take 2 years 
to cancel this bonus that was just flat out illegal? The number 
is above the cap. Why did it take 2 years to cancel that?
    Ms. McCarthy. Senator, I referred this to the appropriate 
authorities and we did get to the bottom of it, and we did it. 
And while it might have taken longer than any of us would have 
liked, he didn't go into the sunshine of retirement.
    Senator Vitter. Well, he did, actually. He was allowed to 
retire. He did go out in the sunshine of retirement.
    Ms. McCarthy. Actually, I don't know how much sunshine he 
is seeing right now, Senator.
    Senator Vitter. He was allowed to retire, right?
    Ms. McCarthy. He was allowed to go to Federal prison.
    Senator Vitter. First he was allowed to retire, having 
gotten $90,000 of bonus illegally after you knew it was above 
the cap.
    Ms. McCarthy. Senator, every employee has their right to 
retirement, and I am sure he exercised that right.
    Senator Vitter. Now, Madam Administrator, you told OIG that 
you relied on Craig Hooks for advice and that you were advised 
by Craig Hooks to stand down on the matter, since it was a 
criminal matter. Is that accurate?
    Ms. McCarthy. That was my recollection, yes.
    Senator Vitter. OK. Are you aware that on Monday Craig 
Hooks told Chairman Issa's staff that he absolutely never told 
you to stand down? Are you aware of that?
    Ms. McCarthy. I am not aware of that, no.
    Senator Vitter. OK. You stand by your previous statement 
that he told you to stand down because it was a criminal 
matter?
    Senator Boxer. I am sorry, we have to move on.
    Senator Vitter. Can she answer that final question?
    Do you stand by that previous statement of yours?
    Ms. McCarthy. Yes, sure.
    Senator Boxer. Senator Whitehouse.
    Senator Whitehouse. Thank you very much.
    It looks like we are going to hear a lot more about a 
convicted former EPA employee than we are going to hear about 
EPA's budget in this hearing, so let me ask you. You have had 
long experience with EPA. Is this Mr. Beale character 
representative of the employees at EPA in terms of work ethic, 
integrity, or any other feature? Should the misconduct that he 
engaged in find attribution by association to the rest of the 
employees of EPA?
    Ms. McCarthy. I am so glad you ask that question. He is in 
no way indicative of employees at EPA. They are hardworking 
professional, dedicated public servants. I have 16,000 people 
who in no way represent him or anything having to do with him. 
In fact, the most devastating part of all this is that any 
indication that that is the case. I am proud of the people that 
work at that Agency and I am extraordinarily honored to be in 
the position I am in with them.
    Senator Whitehouse. Let me say for the record that I know 
EPA employees and I have known EPA employees over the years, 
and the effort to tar all EPA employees with the misconduct of 
one criminal I think is reprehensible.
    Let me further ask you, let's go to the merits of all this, 
of the EPA's work. Where are you guys on methane leakage? If 
methane is burned, it is a dramatic improvement over burning 
coal from a point of view of polluting our environment and 
oceans with excess carbon dioxide. But if it is not burned, if 
it just leaks, it is actually worse than carbon dioxide. So 
getting after the leaks and making sure that it is not leaking 
is important, because with that natural gas industry can't make 
its argument that it is actually an improved fossil fuel; it 
actually loses the battle and suddenly becomes just as bad, 
perhaps even worse than coal. So that question of methane 
leakage becomes really vital to the reputation of this industry 
and to our success at battling climate change. Can you let us 
know where you are on that? And we have about two and a half 
minutes.
    Ms. McCarthy. Sure, Senator. It is a big issue and one that 
we have begun to tackle. You know that EPA has already issued 
rules that are driving the recapture of methane and natural gas 
wells. We are also working with the larger Administration to 
look at all of the challenges that the Administration sees and 
potential solutions for reducing methane across a number of 
industry sectors. The President's Climate Action Plan indicated 
that the Administration would be putting out a methane 
strategy. You will be seeing that shortly.
    Senator Whitehouse. Very well. I appreciate it, and I will 
yield back my time.
    Senator Boxer. Thank you so much, Senator.
    Senator Inhofe.
    Senator Inhofe. Thank you, Madam Chairman. I want to ask 
three questions real quick, and we will talk fast here.
    Ms. McCarthy, on January 10th of 2014, you sent a letter to 
Frances Beinecke, the President of the Natural Resources 
Defense Council, in which you detailed several regulatory 
initiatives EPA is undertaking related to shale gas 
development. In this letter you state that EPA is continuing to 
work on its national research study on the potential, potential 
impacts of hydraulic fracturing or drinking water sources. As 
you know, we can call as many things up as potential impacts as 
we want.
    Would you commit to me that, to the extent the study 
evaluates potential impacts, that EPA will work with industry 
to determine the probability of these potential actions 
occurring and feature those together with the potential impacts 
of the report? This is very similar to what you and I actually 
did successfully not too long ago.
    Ms. McCarthy. Yes.
    Senator Inhofe. You will do that?
    Ms. McCarthy. Senator, I always have and I will make that 
commitment to work with industry on these.
    Senator Inhofe. Very good. I appreciate it.
    In the same letter you state the EPA is working closely 
with the BLM in supporting their efforts on onshore oil and gas 
order, which is the proposed guidelines for venting and flaring 
natural gas. Can you provide the committee with any data or 
summaries? The procedure there is that the EPA sent the BLM the 
data. My concern is I would like to have industry, and we could 
talk about how to set this up, evaluate that data that would be 
going out. Would you be willing to do that?
    Ms. McCarthy. Well, I am quite sure that BLM is doing their 
outreach to industry. We are just providing comment to BLM.
    Senator Inhofe. Yes, but you have data that you are giving. 
I would like to see the data and have an evaluation of that 
data. In fact, I could do that myself.
    Ms. McCarthy. It would be data that is already readily 
available that we would be provided.
    Senator Inhofe. That is fair enough. Fair enough.
    Ms. McCarthy. And it is data that we are trying to make 
better every day.
    Senator Inhofe. Ms. McCarthy, the reason I am introducing, 
and I think we did it yesterday, or maybe it was today, the 321 
legislation is because I know that the EPA isn't looking at the 
cascading impacts of the rules to determine the costs that it 
will have on the economy. You look every way for the benefits, 
but not for the costs, and I want to ask you do you think that 
the regulations have a cost on the economy beyond the regulated 
entity. Now, you know what I am talking about here.
    Ms. McCarthy. Yes, I do.
    Senator Inhofe. You can confine it to the regulated entity, 
but looking down the road at what it is going to be costing all 
these people. You agree with that?
    Ms. McCarthy. Senator, we do the best we can to evaluate 
all costs and benefits. You will be happy to know that Senator 
Vitter, this is an issue that he raised with us, this whole 
economy modeling, and we are pursuing that with a new science 
advisory board panel.
    Senator Inhofe. OK. Well, CASAC is going to be meeting in 
Chapel Hill, North Carolina, to debate the EPA's latest policy 
assessments. This will be on the ozone standard.
    Ms. McCarthy. Yes.
    Senator Inhofe. It is my understanding that EPA staff has 
recommended they review a standard as low as 60 parts per 
billion. I can remember during the Bush administration it was 
80 parts, and then we actually went down to some 60 parts. 
Behind me you will see a map on what would happen if the United 
States standard were lowered to that level. We are talking 
about 60 parts per billion. Nearly every county would be out of 
attainment, certainly all the counties in my State of Oklahoma; 
and, if you will notice down here, even the Grand Canyon area. 
If this happened, businesses would not be able to expand, it 
would essentially close the whole Nation for business and 
result in millions of job losses.
    Do you think lowering the NEC standard would impose costs 
on the economy that are just not acceptable?
    Ms. McCarthy. Senator, we are in the middle of the science 
process. I would rather not speak about any outcome of the 
ozone standard.
    Senator Inhofe. But I will give you a hypothetical. We all 
deal in those nowadays. If it should come to 60, I don't think 
you can refute the accuracy of these charts. Would you find 
that to be unacceptable, economically?
    Ms. McCarthy. Senator, I think, as you know, the NEC 
standard is established based on the science, not on costs. We 
look at costs on the implementation.
    Senator Inhofe. And this is the problem. Do you think that 
is wise? I mean, I have lived with this now for several years, 
and they said, no, we can't talk about the costs of these 
things. Why not? You know, people out there are hurting. The 
Senator from New Jersey was talking about something before. I 
disagreed with him because I think all these standards and 
these new regulations are going to cost the poor more than the 
more affluent people because they spend a higher percentage of 
their income on heating their homes and this type of thing.
    Do you think it is right that we do that? Maybe that ought 
to be looked at and ought to be changed.
    Ms. McCarthy. I think it is absolutely right that a science 
question that asks what is healthy air for all Americans should 
be answered by the science.
    Senator Inhofe. And it should, but we are talking about how 
to the exclusion of looking at it in terms of the cost to the 
public.
    Senator Boxer. It has started and we are going to move on. 
The vote has started; we have to move on.
    Senator Booker, please keep it to your 5 minutes.
    Senator Booker. I certainly will.
    Just real quickly, because I am new to the U.S. Senate and 
my colleagues were talking about my possibly mistaking the 
impact of CO2 in the air being good for forests and 
stuff like that. But please help me understand, as just a new 
guy on this committee. CO2 in the air causes 
warming, correct?
    Ms. McCarthy. That is correct.
    Senator Booker. Right. So if you have a preponderance of 
CO2 in the air and a preponderance of warming, it 
has effects on our climate, correct?
    Ms. McCarthy. It does.
    Senator Booker. And so if you have effects on the climate, 
it affects everything from the health of our oceans, from coral 
reefs to the fishing patterns that, frankly, affect the 
industries of a State like mine in New Jersey, correct?
    Ms. McCarthy. That is correct.
    Senator Booker. And, in fact, when you were talking about 
issues of respiratory health, when the air gets warmer, I have 
seen it. Again, I am just a guy who is new on this committee, 
but I have a lot of experience in public schools. And when 
temperatures warm, you have a lot more cases respiratory 
problems, including things like asthma, right?
    Ms. McCarthy. The scientists would agree with you.
    Senator Booker. Right. So there is a direct correlation to 
too much CO2 and respiratory problems and 
disruptions of fisheries and disruptions of economies and sea 
levels rising.
    Ms. McCarthy. That is correct.
    Senator Booker. Thank you.
    The other thing I would like to ask is when EPA issues 
proposed carbon pollution standards for existing power plants 
later this year, do you contemplate that States that are not 
participating in REGIs, regional greenhouse gas initiatives, 
will be able to use that program to meet their new obligations?
    Ms. McCarthy. We think that regional approaches could be 
quite preferable, and we are going to make sure that the 
standard is flexible enough for States to consider those 
choices.
    Senator Booker. I think, actually, the REGIs are phenomenal 
things, and I guess my point and question is if New Jersey 
fails to rejoin the REGI, the regional work on this, what types 
of actions will New Jersey likely need to take in order to 
comply with the new regulations?
    Ms. McCarthy. Well, we haven't put out the new regulations, 
but they will have to look at other opportunities for 
greenhouse gas reductions that are as cost-effective as they 
can be. Having participated in the REGI process, it is a pretty 
cost-effective program to achieve significant reductions.
    Senator Booker. Right. So, in other words, it is an easy 
way for New Jersey to meet these new regulations by being a 
part of our surrounding States; and we have a lot more burden 
if we are not part of that and a lot more level to hit in order 
to comply.
    Ms. McCarthy. Based on the information that I have, it 
certainly would be a good choice.
    Senator Booker. Then, last, I know that you and the EPA 
have a tremendous amount on your plate right now, but 30 years 
is simply too long to wait. Can I have your commitment that 
finalizing and releasing for public comment the pending FFS and 
proposed remedy for the lower eight miles of the Passaic River 
will be a priority? Because the Passaic River, as you know, is 
another thing my colleague, who is rightfully concerned about 
poor and disadvantaged people, in a city, when you see what 
happens when we allow pollutants to enter rivers like that, 
poor people suffer because now folks who, 100 years ago, when 
they couldn't get food, they would go to the river and fish and 
enjoy the fruit and the bounty of the rivers. That has been 
taken away by corporations that polluted our rivers, so this is 
a big priority for our whole region running through the Passaic 
River.
    Ms. McCarthy. As it should be, Senator, and you should rest 
assured that I have already had two briefings because of my 
great regional administrator, Judith Enck, who, if I don't put 
it out soon, she will drive me crazy; and that is official. And 
I look forward to talking to you about it, and we will get that 
done.
    Senator Booker. I appreciate that. And you should give her 
a raise, but obviously keep it under the cap, or you will be 
back here talking about it.
    Ms. McCarthy. I can't make that my commitment.
    Senator Booker. OK.
    Senator Boxer. Is that it for you, Senator?
    Senator Booker. That is it for me.
    Senator Boxer. Well, thank you.
    Senator Booker. I yield the rest of my time.
    Senator Boxer. For the people who just joined us, we are 
going to have to end this when there are 4 minutes left to 
vote, so I think we can hear from two of our Senators.
    Senator Wicker.
    Senator Wicker. Madam Chair, I would be happy to preside 
over this hearing, if you would like to go.
    Senator Boxer. Thank you for the offer. I will take it 
under advisement.
    Senator Wicker. Thank you so much.
    Senator Boxer. Don't you want to vote?
    Senator Wicker. I am going to vote when the Chair votes.
    Senator Boxer. OK.
    Senator Wicker. Somehow I believe the president of the 
Senate is going to wait for Senator Boxer to vote.
    Administrator McCarthy, Senator Booker is from Newark, New 
Jersey. Sometimes it is 10 degrees in Newark, sometimes it is 
85 or 90 degrees. A wide range of temperatures in Newark. Is it 
your testimony, let's say temperatures have risen by 1.5 
degrees. Let's just stipulate that the average temperature in 
Newark, New Jersey has risen by 1.5 degrees over the last two 
decades because of climate change. Are you telling me that 
there is scientific evidence that that fact causes more lung 
disease among children?
    Ms. McCarthy. Well, Senator, to really properly look at 
climate change, we look generally at three decades or longer.
    Senator Wicker. OK, three decades.
    Ms. McCarthy. The information that we know is that climate 
change is happening. One of the lines of evidence of that is 
increased temperature; it is rising----
    Senator Wicker. Well, no. In the brief----
    Ms. McCarthy [continuing]. Ozone.
    Senator Wicker. In the brief time you have to answer the 
question, my question is the Senator's line of questioning is 
that increases in the average temperature cause more lung 
disease among children. Is that supported by the science?
    Ms. McCarthy. What the science tells us is when the 
temperature gets warmer it increases a level of ozone, and that 
ozone pollution actually has an impact on respiratory health, 
as well as cardiac health.
    Senator Wicker. OK, well, I would be interested in your 
supplying to the committee any scientific basis for the 
statement that increased average temperatures actually increase 
respiratory disease among children.
    Ms. McCarthy. OK. I am happy to do that.
    Senator Wicker. If you would supply that.
    Ms. McCarthy. You can actually find it on our Web page and 
the climate change page.
    Senator Wicker. OK, fine. If you will get that to me, that 
is great.
    Let me just ask you briefly, then, Madam Administrator, if 
I can talk about air grant money.
    Ms. McCarthy. Yes.
    Senator Wicker. And, again, this is something we ought to 
be able to agree on. Maybe you ought to go where the problem 
is. There is a decades-old EPA allocation formula that gives 
the Southeast region 12 percent, when actually we have 20 
percent of the Nation's population. How can EPA continue to 
develop strengthening rules and standards while at the same 
time limiting access to resources for the States to get their 
fair share?
    Ms. McCarthy. Well, Senator, we have actually been 
proposing to change that formula and to allocate resources 
differently given the changes that have happened over the past 
decade on population. We certainly feel that there is a need 
for change. We are looking to do that over a period of time. 
Congress has actually provided language in our budget that does 
not allow us to do that last year. We will see what happens in 
fiscal year 2015.
    Senator Wicker. OK. Was this a rider to an appropriation 
bill or was this a statute?
    Ms. McCarthy. It is a congressional report act language 
that has prohibited EPA from implementing the revised 
allocation methodology. They have done that since fiscal year 
2011, when we first proposed it.
    Senator Wicker. OK. Finally, I would like to work with you 
on that problem, Madam Administrator. Let's talk about helping 
local governments implement the upgrades required to wastewater 
treatment facilities and more stringent water regulations. A 
significant and basic problem has been that many of these towns 
don't have the tax base. And you and I have talked about this. 
They don't have the tax base to meet the cost of upgrading 
their wastewater systems.
    However, not acting results in harsh fines imposed by the 
EPA. In your nomination hearing I asked several questions 
regarding the Clean Water and Drinking Water State Revolving 
Funds, and you said you would work with me on that. I am just 
concerned that we don't have a proposal going forward and, as a 
matter of fact, we are now seeing a proposal from EPA and from 
the Administration to cut this by $581 million to the State 
revolving funds.
    Senator Boxer. I am sorry. We have to move on if we are 
going to hear from your two colleagues, so we will go next to 
Senator Fischer for 4 minutes and then Senator Boozman.
    Senator Wicker. Does the witness get to answer the 
question?
    Senator Boxer. She does not at this point; she can do it 
for the record.
    Senator Wicker. Could you supply that answer on the record, 
please?
    Ms. McCarthy. Certainly.
    Senator Boxer. We have votes. We have 5 minutes left to 
vote.
    Four minutes, please.
    Senator Fischer. Thank you, Madam Chair.
    Thank you, Administrator. It is nice to see you again.
    Ms. McCarthy. Nice to see you, too.
    Senator Fischer. Thank you for being here. I am sorry that 
we are all rushing here at the end now. I can tell you that I 
have some concerns maybe that we are seeing our coal-fired 
electric plants in Nebraska, our utilities, they are spending a 
lot of time, they are spending a lot of resources on keeping 
their units in compliance with regulations; and I don't think 
they are then able to spend that time in resources on the 
innovations that could possibly lessen our dependence on coal.
    We have an example here for you regarding regional haze. We 
have a Nebraska utility, which is LES, the city of Lincoln. It 
owns a little more than 10 percent of the coal-fired power 
plant in Wyoming, the Laramie River Station. The Wyoming 
Department of Environmental Quality proposed a plan to address 
regional haze that would require technology costing 
approximately $100 million, and so the Nebraska utility share 
sent about $10 million. The EPA rejected the Wyoming DEQ plan 
and substituted its own plan that requires technology at a cost 
of $800 million, which then is about $80 million for the city 
of Lincoln, the LES utility that would have to provide that.
    There would be a very small improvement in visibility. But 
this difference is going to deprive this Nebraska utility of 
moving forward on their investments in wind, which they have, 
and in solar, in energy efficiency. You know, we are talking a 
fairly small city, the city of Lincoln. It is large for 
Nebraska; small nationally.
    That is just one example. So I believe that that is 
replicated across the country, though. You know, LES is a 
leader in looking at renewables. The citizens and the city of 
Lincoln want to move forward in that direction, but polls have 
shown they are not willing to pay for it, and I think that is 
also replicated across the country, the costs that are incurred 
sometimes, especially when they have to meet requirements from 
the EPA.
    What are your feelings on that? Do you see that policy 
moving forward with EPA? Are you going to try and reach out 
more to help utilities be responsible in their coal-fired 
plants, but also to move forward?
    Ms. McCarthy. Senator, we are doing the best we cannot just 
to reach out to the utilities to understand what their business 
plans are moving forward and how we can keep the lights on and 
keep it reliable, but we are also working very closely with the 
States on these regional haze issues. We understand that they 
are important environmental benefits, but they have to be 
looked at in the context of how much they cost and what they do 
in terms of moving the clean energy system forward. So if we 
need to work more closely together, we are more than willing to 
do that.
    Senator Fischer. OK, thank you. You know, we hear about the 
war on coal and you hear about that as well.
    Ms. McCarthy. Yes.
    Senator Fischer. Is there a war on coal? You know, a lot of 
people in Nebraska think there is because we have those coal-
fired plants. Do you think it is fair to say maybe the EPA has 
somewhat of a war on coal so that we can lessen our dependence 
upon coal in this country?
    Ms. McCarthy. Senator, I don't think that that is fair to 
say. What we are trying to do is our job to protect public 
health by reducing pollution from some of the largest sources 
of that pollution.
    Senator Fischer. And I have a few seconds left. I am very 
concerned about the water rules that are coming out from EPA. 
Water is a State resource in Nebraska. I believe we manage it 
in a very responsible way. I hope that you will have a long 
period there. Would you commit to a long period for comments, 
180 days?
    Senator Boxer. We will have to do that answer for the 
record.
    Senator Fischer. Thank you, Madam Chair.
    [The prepared statement of Senator Fischer follows:]

                    Statement of Hon. Deb Fischer, 
                U.S. Senator from the State of Nebraska

    Chairman Boxer and Ranking Member Vitter, thank you for 
holding this hearing today to review EPA's budget. I want to 
welcome Administrator McCarthy. Thank you for being here.
    Budget hearings are a fundamental responsibility of this 
committee. It is important for Congress to continue its 
oversight of the programs it has authorized and examine whether 
taxpayers' money is being used appropriately, effectively, and 
efficiently to fulfill EPA's core mission to protect human 
health and the environment.
    A clean and healthy environment is important to us all. 
Over the past several decades, we have made great strides in 
improving our air and water quality and protecting our natural 
resources--while growing our economy. In Nebraska, farmers and 
ranchers are growing more food and fiber in an increasingly 
responsible and sustainable manner. Our public power utilities 
are serving more customers while reducing emissions. Businesses 
are achieving innovations to provide better goods and services 
to enhance quality of life, as they maximize efficiencies and 
reduce their environmental footprint.
    We must work together to pursue a path forward that 
continues both these environmental and economic achievements, 
one that encourages meaningful environmental improvements 
without stifling economic growth.
    As the EPA proposes a budget that shifts significant 
resources in support of the President's Climate Action Plan and 
aimed at reducing greenhouse gas emissions, we must continue to 
scrutinize the costs and benefits of proposed actions.
    Because these issues are global in nature, we must examine 
what benefit we are seeking by limiting American utilities' 
choice of power-generation technologies that we know will drive 
up electricity costs and customers' monthly bills and 
jeopardize energy reliability.
    While EPA routinely claims regulatory benefits in excess of 
the costs, the benefit estimates are speculative at best. We 
simply must have more transparency and accountability when it 
comes to the underlying scientific justifications for these 
rules.
    EPA is seeking to expand its regulatory control in many new 
ways--including an alarming Federal takeover of water--all at a 
time when EPA's out-of-control ``playbook'' is being unveiled. 
The deceitful schemes of John Beale and his leadership in the 
creation of costly air regulations should give us all pause and 
even greater reason to carefully examine the process, science, 
and priorities of the agency.
    Today's hearing is an important step in providing this 
needed oversight. We must work to ensure EPA is operating 
transparently and pursuing a positive course for our 
environment and our economy.
    Thank you, Madam Chairman.

    Senator Boxer. Also, Senator Boozman, we will put your 
questions and get those into the record as well.
    Senator Boozman. Yes, ma'am. Thank you.
    Senator Boxer. Thank you.
    And with the last 4 minutes, Senator Barrasso.
    Senator Barrasso. Thank you, Madam Chairman. I ask 
unanimous consent my entire statement be put in the record.
    Senator Boxer. Without objection. Absolutely.
    Senator Barrasso. Thank you.
    Senator Barrasso. Ms. McCarthy, I would just highlight the 
Casper Star Tribune last week, Andy v. EPA, a gentleman in 
Uinta County. Uinta County resident faces $75,000 in daily 
fines for his pond.
    So I want to ask about the EPA's specific Web site for the 
new proposed waters of the U.S. rule.
    Ms. McCarthy. Yes.
    Senator Barrasso. The EPA has a section entitled Fact 
Sheet: How the Proposed Waters of the U.S. Rules Benefits 
Agriculture. The site states that, under the proposed rule, the 
Army Corps will exempt 53 farming practices as established by 
the Natural Resource Conservation Services, which means that 
any farmer or rancher who used those 53 practices in a newly 
expanded, federally covered water would be exempt. This list, 
however, of 53 does not cover all existing agriculture 
practices. There are a number of farming and ranching practices 
that aren't covered on the list that occur every day without 
penalty. Under the new proposed rule will those farmers and 
ranchers need to get a permit or find that they are penalized 
if they continue to use those non-covered 53 practices and 
newly federally covered waters under this proposed new rule?
    Ms. McCarthy. Actually, Senator, it is not taking away any 
of the agriculture exemptions. What it is trying to do is 
provide clarity so you don't have to go and ask. That is what 
this rule does. It actually worked with the agriculture 
community to identify those practices that we could highlight. 
It even set up a really good process to expand on that. But it 
didn't take away a single agriculture exemption that currently 
exists.
    Senator Barrasso. So what about the farmers and ranchers 
who use these 53 new covered practices, but the farmers and 
ranchers don't specifically follow the Natural Resource 
Conservation Services Federal definition of these farming 
practices, you know, perfectly to a tee, in the newly expanded 
Federal waters? Would they need to get new Clean Water Act 
permit or be penalized?
    Ms. McCarthy. Nobody needs to get a permit today or under 
this rule, should it go forward as proposed, that didn't need 
it today.
    Senator Barrasso. We heard the previous Senator ask a 
question specifically about would you expand to 180 days the 
comment period and her time ran out. Would you like to comment 
on that or respond to that?
    Ms. McCarthy. Actually, I can certainly respond to the 
Senator. I don't believe that that is what we are currently 
proposing, but, as always, if people comment and want to 
request it, we will respond to that.
    Senator Barrasso. Well, I would request it as well, as 
another Senator.
    And, Senator Boozman, I am on the last minute and a half if 
you have a specific question that you would like to ask. Go 
right ahead, please.
    [The prepared statement of Senator Barrasso follows:]

                   Statement of Hon. John Barrasso, 
                 U.S. Senator from the State of Wyoming

    Ms. McCarthy, I am from what I consider to be the most 
beautiful State in the country. Folks in my State believe we 
can balance our energy needs with our environmental needs. 
People in my State watch what you and the EPA are doing, and 
they think this agency is extreme.
    Here are some of the examples of what we are seeing. We 
have seen that when the EPA cannot get their way in Congress, 
they go around Congress, and try to issue regulations or 
guidance to accomplish policies that the American people 
soundly rejected.
    The American people rejected cap and trade, and the EPA 
produced climate change regulations instead.
    The American people rejected legislation to remove the word 
navigable from the definition of waters of the United States, 
and the EPA proposed guidance to do it anyway.
    We learned about e-mails that were sent for years under a 
false identity to circumvent recordkeeping laws so the EPA 
could keep the public in the dark. If the business of the EPA 
is transparent, and in the best interest of the American 
people, why does the EPA leadership circumvent the law using a 
false identity?
    We learned of the ``crucify them'' mentality, where small 
business owners and ranchers are bullied into submission by 
arrogant and unaccountable bureaucrats. Former EPA Region 6 
Administrator Al Armendariz had to resign after comparing EPA's 
approach to enforcement as similar to a Roman crucifixion.
    This ``crucify them'' approach has been most recently on 
display in the treatment by the EPA of my constituent, Mr. 
Andrew Johnson. He is facing thousands of dollars in penalties 
from the EPA for constructing a stock reservoir on the Six Mile 
Creek.
    According to a March 18th Ron Arnold column in the 
Washington Examiner, ``EPA regional bureaucrat Andrew M. 
Graydosh issued a compliance order requiring Johnson to return 
the creek to its original condition in 60 days. Graydosh 
threatened Johnson with fines of $75,000 per day per 
violation--which could reach $187,500 per day, or over $5.5 
million in a month--if he didn't comply. Johnson had 10 days to 
reply.''
    The Casper Star Tribune stated on March 19th that such a 
penalty was ``a penalty often reserved for companies that emit 
toxic hazards.''
    This treatment by EPA is draconian and unacceptable.
    Most recently, Ranking Member Vitter has done a thorough 
job in highlighting the activities of one John Beale. Beale was 
the senior lieutenant to the current EPA Administrator when she 
was in charge of the Air and Radiation Office, and he was also 
the highest paid on staff. Beale not only masqueraded for years 
as a pretend CIA agent, but also as a pretend environmental 
rulemaker.
    As the Washington Times summed up in a March 19th article 
entitled ``Fake CIA agent helped craft sweeping environmental 
rules while at EPA,'' the article described Beale as ``a former 
high-ranking EPA staffer convicted of stealing nearly $900,000 
by pretending to be a CIA spy, had virtually no experience, got 
his job with help from a college buddy, and went on to play a 
key role in sweeping environmental regulations.'' They also 
note, as does Senator Vitter's report, that ``Those regulations 
remain in place despite John C. Beale's lack of environmental 
expertise.''
    We now know that EPA has allowed this fraud's work to 
stand. In fact, the underlying data, the basis for numerous job 
crushing EPA rules has not been shared with Congress, or with 
the public, despite repeated requests. This is despite the 
sweeping impact of these rules on the economy. The EPA's 
response to Congress and the public is always to say ``just 
trust us.'' I would put as much trust in this EPA as I would in 
Beale being a real spy. It defies logic that his work will be 
allowed to stand, or why data underlying EPA's long list of job 
crushing rules cannot be released.
    It is clear that the EPA is broken. What we should be 
discussing is what are the best ways to manage our air and 
water while trying to get our economy moving again. The only 
way to do that is to have an agency that can work with us to 
chart a bipartisan path of consensus, sound science, 
transparency and accountability. Today it is clear we do not 
have such an agency.
    I thank the Chair and look forward to the testimony.

    Senator Boozman. The only thing that I would like to do, 
Madam Chair, is I ask unanimous consent to insert into the 
record a letter to the Administrator that is signed by every 
minority member, requesting that the Agency provide all 
documents relating to EPA's proposal to cut funding for the 
Clean Water and Drinking State Revolving Funds.
    Senator Boxer. Sure. Without objection.
    [The referenced document follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    
    Senator Boozman. Thank you, Madam Chair.
    Senator Boxer. Absolutely. I want to thank both Senators 
for your cooperation.
    I am going to put in the record the statement by the 
Academy of Pediatrics, American Academy: ``Heat caused by 
climate disruption is especially harmful to children.'' I 
think, Administrator, if you could send that to Senator Wicker.
    Last, I must put in the record, in response to Senator 
Vitter's attack on you, Administrator McCarthy, on Beale, page 
22 and page 26 of the committee's briefing, where the IG said 
you were the first person and the only senior person to call 
attention to this rogue employee, and I want to again thank 
you.
    [The referenced documents follow:]
    
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]  
    
    
    
    Senator Boxer. I am really sorry that you have been 
vilified by certain members; you should be lauded, as the IG 
lauded you, and also to point out that, you know, in an 
organization of 15,000, 16,000 people, whether it is public, 
private, the military, you are going to have some outliers, you 
are going to have some bad actors. But the vast majority of all 
these people in the private sector, in the public sector, in 
the EPA, in the military are fantastic. So let's just try not 
to brush everybody with the ugliness of a John Beale. And I 
thank you for doing what you did to call attention to him.
    Ms. McCarthy. Thank you, Senator. I am incredibly proud of 
the folks that work at EPA.
    Senator Boxer. Thank you.
    We stand adjourned.
    [Whereupon, at 11:23 a.m. the committee was adjourned.]
    [An additional statement for the record follows:]

                 Statement of Hon. Benjamin L. Cardin, 
                U.S. Senator from the State of Maryland

    Madam Chairman and Ranking Member Vitter, thank you for 
holding today's hearing on the President's proposed fiscal year 
2015 budget for the Environmental Protection Agency. 
Administrator McCarthy, it is always a pleasure to see you, and 
thank you for being here today.
    EPA's proposed budget for fiscal year 2015 outlines a 
fiscal plan that will enable the Agency to continue to its 
important work of keeping the health of citizens and the 
communities we live in healthy and safe.
    It would be an understatement to say that EPA faces 
challenges in fulfilling its mission to protect the environment 
from factions within Congress and from the supporters of 
polluting industries that resent being regulated.
    I want to commend the President and the Agency for its 
proposed budget for the Chesapeake Bay Program. I will work 
hard with the chairman of the Appropriations Committee to see 
that the request is met. Ensuring that EPA and its Federal 
partners that cooperate in the administration of the Chesapeake 
Bay Program is critical to fulfilling the goals established by 
the President's May 2009 Chesapeake Bay Executive Order. The 
President's recognition of the value of this national treasure 
has been a critical catalyst to improve the health of the Bay.
    In addition to the soon to be 5-year-old executive order, 
on January 29th, the Chesapeake Bay Program issued its revised 
Chesapeake Bay Agreement establishing new conservation goals 
for the watershed as determined through a collaborative process 
involving Federal agencies, the six States and DC, local 
governments and non-governmental organizations across the 
region. This budget is critical to supporting the goals of the 
agreement.
    More specifically, the funding for the Chesapeake Bay 
Program will allow Maryland and other Bay States to focus on:
     Total Maximum Daily Load implementation,
     Implementing Phase II of watershed planning and 
increasing accountability, and
     Making progress to address toxic contaminants in the Bay.
    I am also pleased to see the budget's prioritization of 
programs to combat and adapt to the effects of climate change. 
Maryland faces tremendous challenges from the effects of 
climate change. With 70 percent of my State's population living 
in a coastal zone, sea level rise and increased intensity of 
extreme weather events pose a serious risk to the safety and 
economy of my State.
    I do want to express concerns that for the second year in a 
row the Administration's budget is recommending cuts to both 
the Drinking Water and Clean Water State Revolving Loan Funds 
(SRFs). These cuts are being recommended despite ever growing, 
multi-billion dollar, backlogs of maintenance and repair needs 
for water infrastructure across the country.
    We should be mindful of the need to invest in our Nation's 
own crumbling water infrastructure. The President's EPA budget 
makes deep cuts to the Clean Water and Safe Drinking Water 
SRFs, despite the established need for increased water 
infrastructure investment and the significant economic growth 
that would result from such investment. We take for granted the 
ability to turn on the tap and pour a clean glass of water. We 
take for granted the ability to go to our outdoor spaces and 
fish and swim safely. The work of the EPA is central to this 
sense of safety, and robust funding for these programs benefits 
all Americans.
    Cuts to the State Revolving Loan Funds, however, are 
extremely deep and will significantly impact States that are 
already struggling to maintain their drinking water and 
wastewater systems.
    The reductions in the SRF funding levels will impact 
Maryland as well as every other State. Our Nation's drinking 
water and wastewater infrastructure is aging and overburdened. 
A number of densely populated cities are served by pipes that 
are at least 100 years old. These funding cuts will affect the 
States and municipalities that are already struggling to deal 
with the increased costs associated with drinking water and 
wastewater treatment plant upgrades. At the same time, Federal 
investments in water and wastewater infrastructure can yield 
hundreds of thousands of jobs and help grow our economy.
    This year, as in years past, Senator Crapo and I are 
leading a letter to the Senate Appropriations Committee calling 
for robust funding for the SRFs to make sure that this program 
continues to provide adequate resources for drinking water and 
wastewater service providers to keep their systems working 
effectively. I would encourage all members of this committee to 
sign our letter.
    Last, I want to talk about how persistent cuts to EPA's 
budget are contributing to the biggest decline in employee job 
and workplace satisfaction among large Federal agencies in 
2013, sinking five spots in the Best Places to Work in the 
Federal Government rankings. The EPA's overall Best Places to 
Work score stands at 59.3 out of 100, a drop of 8.3 points, for 
a 10th place ranking out of 19 large agencies. Last year it 
ranked 5th out of 19 agencies.
    Deputy Administrator Robert Perciasepe said EPA employees 
have a strong sense of mission, believe in the importance of 
their work, and will rebound from what turned out to be a 
difficult year. He pointed out that EPA was forced to furlough 
an extremely high number of employees because of the across-
the-board budget cuts mandated by Congress, and reduce cash 
awards for high performers. He noted that the unpaid furloughs 
began to occur at the same time employees were taking the 
Federal survey that is used to compile the Best Places to Work 
rankings. As he put it, ``The EPA's budget was constrained 
perhaps more than other agencies', and I do believe the 
furloughs were a problem at that time.''
    This is shameful. Our country and political leaders of both 
parties once held our Nation's civil servants in the highest 
regard. These days, in some circles, it's become politically 
popular to vilify Federal workers. It is the middle class 
families of hardworking civil servants that have shouldered a 
disproportionate burden of the hollow efforts to balance the 
budget.
    Madam Chairman, I know that you understand the tremendous 
amount of work we have ahead of us to make the United States 
Government an environmental leader both at home and abroad. I 
also believe that this administration understands the 
significant role EPA plays in this effort. I look forward to 
working together to achieve our goals, and to hearing from 
Administrator McCarthy.

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