Environmental Protection: Observations on Elevating the
Environmental Protection Agency to Cabinet Status (21-MAR-02,
GAO-02-552T).
GAO commented on legislation to elevate the Environmental
Protection Agency (EPA) to Cabinet status. Since EPA was created
in 1970, its responsibilities have grown enormously. Today, EPA's
mission, size, and scope of responsibilities place it on a par
with many Cabinet departments. The United States is the only
major industrial power without a Cabinet-level environmental
organization. It is important to consider that (1) environmental
policy be given appropriate weight as it cuts across the domestic
and foreign policies that other Cabinet departments implement and
enforce and (2) the head of the agency is able to deal as an
equal with his or her counterparts within the federal government
and within the international community as well. Conferring
Cabinet status on EPA would not in itself change the federal
environmental role or policies, but it would clearly have an
important symbolic effect. Several factors, however, should be
considered when deliberating the structure and role of the
federal organizations. Regardless of its status as a department
or agency, EPA must respond more effectively to the fundamental
performance and accountability management challenges it faces if
it is to achieve its mission. These challenges include (1)
placing the right people with the appropriate skills where they
are needed and (2) gaining access to high-quality environmental,
natural, and social data on which to base environmental
decisions. Also, EPA must have the flexibility to use innovative
approaches to address the most complex and intractable
environmental problems. Meetings these challenges will require
the sustained attention of the agency's senior leaders.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-02-552T
ACCNO: A02926
TITLE: Environmental Protection: Observations on Elevating the
Environmental Protection Agency to Cabinet Status
DATE: 03/21/2002
SUBJECT: Agency missions
Environmental monitoring
Environmental policies
Federal agency reorganization
Intergovernmental relations
Strategic planning
EPA Integrated Risk Information System
Gross Domestic Product
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GAO-02-552T
Testimony Before the Subcommittee on Energy Policy, Natural Resources and
Regulatory Affairs, Committee on Government Reform, House of Representatives
United States General Accounting Office
GAO For Release on Delivery Expected at 9: 30 a. m. Thursday, March 21, 2002
ENVIRONMENTAL
PROTECTION Observations on Elevating the Environmental Protection Agency to
Cabinet Status
Statement of John B. Stephenson Director, Natural Resources and Environment
GAO- 02- 552T
Page 1 GAO- 02- 552T Elevating EPA to Cabinet Status
Mr. Chairman and Members of the Subcommittee: We appreciate the opportunity
to appear before you today in the Subcommittee?s hearing on legislation to
elevate the Environmental Protection Agency (EPA) to Cabinet status. As
requested, my testimony discusses (1) our views on providing EPA with
Cabinet status and (2) the major management challenges that the agency faces
in meeting its mission, regardless of whether it becomes a Cabinet
department or remains an agency.
My testimony today is based on a body of our reports on EPA?s organizational
structure, human capital activities, information requirements, and
relationships with its state partners. We also have testified on elevating
EPA before- as early as 1988, when we discussed EPA?s increasing
environmental policy role in shaping other domestic and foreign policies.
While the decision to alter EPA?s organizational status is a policy matter
for the Congress and the President to decide, we believe that there is merit
to considering elevating EPA to a Cabinet department. Since EPA was created
in 1970, its responsibilities have grown enormously, along with greater
understanding of the environmental problems facing the nation. Today, EPA?s
mission, size, and scope of responsibilities place it on a par with many
Cabinet departments. As a result, it is important to consider that (1)
environmental policy be given appropriate weight as it cuts across the
domestic and foreign policies that other Cabinet departments implement and
enforce and (2) the head of the agency is able to deal as an equal with his
or her counterparts within the federal government and within the
international community as well. Providing Cabinet status would also clarify
the organization?s direct access to the President on environmental matters.
Regardless of its status as a department or agency, EPA must respond more
effectively to the fundamental performance and accountability management
challenges it faces if it is to achieve its mission. These challenges
include (1) placing the right people with the appropriate skills where they
are needed and (2) gaining access to high- quality environmental, natural,
and social data on which to base environmental decisions. Also, EPA must
have the flexibility to use innovative approaches to address the most
complex and intractable environmental problems. Meeting these challenges
will require the sustained attention of the agency?s senior leaders.
Page 2 GAO- 02- 552T Elevating EPA to Cabinet Status
Organizational changes are common within the federal government, occurring
when federal missions change, when certain activities are to be emphasized
or de- emphasized, and when a new organizational structure is needed to
improve the effectiveness of federal programs. In effect, the types of
federal organizations and their activities reflect shifting perceptions of
national problems and how the government can best deal with them.
Conferring Cabinet status on EPA would not in itself change the federal
environmental role or policies, but it would clearly have an important
symbolic effect. The United States is the only major industrial power
without a Cabinet- level environmental organization. The additional
visibility and prestige that comes with Cabinet status would send the
symbolic, but important, message to other federal departments and foreign
nations that the United States is fully committed to solving the most
serious and complex domestic and global environmental problems.
Determining which federal activities should receive emphasis at the highest
levels of government is not a straightforward task. That is, the criteria
are not clear- cut for determining the type of organizational structure that
would be most suitable for establishing and carrying out federal policy and
programs for the activities.
Several factors, however, should be considered when deliberating the
structure and role of federal organizations. For example, budgetary and
staffing levels provide some measure of whether an organization?s programs
warrant Cabinet- level emphasis. With an annual budget exceeding $7 billion
and a staffing level of 18,000 employees, EPA is larger than several
existing Cabinet- level departments.
Other factors, although less quantifiable than budgetary and staffing
levels, should also be considered in determining the most appropriate
organizational structure for formulating and implementing federal polices
and objectives. They include the (1) significance of the problems to be
addressed, (2) the extent and level of interaction and coordination
necessary with other federal departments, and (3) the need for international
cooperation in formulating long- term policies. Such factors are clearly
applicable to EPA?s role and responsibilities in managing the nation?s
response to domestic and foreign environmental problems. In this regard:
Environmental problems are often long- term, complex, and enormously
expensive, and pose significant threats to human health Issues to Weigh in
Considering Cabinet Status for EPA
Page 3 GAO- 02- 552T Elevating EPA to Cabinet Status
and natural ecosystems. As one measure of economic impact, in 1990, EPA
estimated that total pollution control expenditures in the United States by
industry, government, and households in the late 1980s were between $100
billion and $120 billion annually in 1990 dollars. These estimated
expenditures were for air and radiation, water, solid waste, hazardous
waste, leaking underground storage tanks, Superfund sites, and pesticides
and toxic substances. The agency projected that total expenditures would
rise from 1. 9 percent of the U. S. Gross Domestic Product (GDP) in 1987 to
between 2.6 and 2.8 percent of the GDP by the year 2000. Even as our
government tries to solve old environmental problems, new ones, such as
global warming and the depletion of stratospheric ozone, demand increasing
attention. It is likely that these issues will be even more difficult and
expensive to solve.
As the agency responsible for establishing environmental policy, EPA must
interact regularly with the departments of Agriculture, Defense, Energy, the
Interior, State, Transportation, and others. These agencies spend billions
of dollars annually to comply with environmental laws and clean up past
contamination. However, years of experience have demonstrated that these
agencies do not always provide the support and cooperation necessary to
further environmental goals. In this regard, environmental consequences were
largely ignored at sites of the Department of Defense (e. g., in testing
mustard gas at Spring Valley in Washington, D. C.); Department of Energy,
(e. g., in using nuclear materials at Rocky Flats, Colorado); and Department
of the Interior (e. g., in dealing with thousands of abandoned mines on
federal lands). Such sites now are likely to cost the nation hundreds of
billions of dollars to correct polluted conditions. Furthermore,
jurisdictional conflicts have created roadblocks that are not conducive to
cooperating with EPA and that have sometimes resulted in placing a low
priority on environmental protection. Such conflicts could be addressed more
effectively in the future by placing the head of the federal environmental
organization on an equal footing with the heads of other federal
departments. This would enable environmental issues to better compete with
other national issues in policy, budgetary, and programmatic decisions as
they are being made.
International environmental problems involving climate change,
stratospheric ozone depletion, and acid rain will require greater attention
in the 21st century. On these and other issues, EPA?s key international
functions include providing technical expertise to the State Department in
integrating environmental policies into environmental treaties and foreign
trade agreements. For example,
Page 4 GAO- 02- 552T Elevating EPA to Cabinet Status
under the Clean Air Act, EPA played a major role in implementing the
Montreal Protocol by issuing administrative changes to the final rule to
phase out ozone- depleting substances in 1995, and provides data and funding
that support the protocol. Cabinet status for EPA could enhance the ability
of the United States to provide leadership and assistance to the rest of the
world by conveying that the nation recognizes the seriousness of domestic
and global environmental problems, and that the problems are receiving
adequate attention.
Whether or not EPA becomes a Cabinet- level department, the challenges that
await it are formidable. Department or agency, it must, first of all, pay
greater attention to strategic human capital management to improve its
performance and accountability in accomplishing its mission of protecting
human health and the environment. It must also develop high- quality
information to support its regulatory programs and measure environmental
results. Finally, it must find alternatives to traditional regulatory
approaches in order to streamline environmental requirements while
encouraging more effective risk- based means of protecting the environment.
In the past, EPA, like most federal agencies, has not made strategic human
capital management an integral part of its strategic and programmatic
approaches to accomplishing its mission. To emphasize our concern about and
the importance of this area, in January 2001, we included human capital
management as a newly designated governmentwide high- risk area. 1 In
addition, at the beginning of this
month, we released to federal agencies our ?Model of Strategic Human Capital
Management?, 2 to help agency leaders effectively lead and manage their
people and integrate human capital considerations into daily decision-
making and the program results they seek to achieve.
We also note that the administration is giving increased attention to
strategic human capital management. The President has placed human capital
at the top of his management agenda and the Office of Management
1 U. S. General Accounting Office, High Risk Series: An Update, GAO- 01- 263
(Washington, D. C.: January 2001). 2 U. S. General Accounting Office, A
Model of Strategic Human Capital Management
Exposure Draft, GAO- 02- 373SP (Washington, D. C.: March 2002.) EPA Faces
Major
Management Challenges That Hinder Its Efforts to Meet Its Mission
Implementing an Effective Workforce Strategy Would Help EPA to Achieve Its
Mission
Page 5 GAO- 02- 552T Elevating EPA to Cabinet Status
and Budget has assessed agencies? progress in addressing their individual
human capital challenges as part of its management scorecard. Agencies have
also prepared workforce analyses as an initial phase of implementing the
President?s initiative to have agencies restructure their workforces to
streamline organizations
To its credit, EPA is one of the agencies that recently has recognized the
importance of human capital and made substantial progress in developing a
strategy to more effectively manage its workforce. The agency is now in a
good position to move forward during the next few years toward implementing
the human capital activities that are associated with highperforming
organizations. Nonetheless, several key actions will be necessary to ensure
that EPA?s efforts to better manage its workforce become an integral part of
the way it does business, and not just another paper exercise. In this
regard, EPA must improve its strategic planning process to specifically
address how human capital activities will help the agency achieve its goals,
identify the specific milestones for completing actions to implement its
human capital objectives, and establish resultsoriented performance
measures.
In addition, EPA must more aggressively manage its workforce to obtain the
economies, efficiencies, and effectiveness associated with determining the
appropriate size of its workforce, the deployment of its staff
geographically and organizationally, and the skills needed to support its
mission. For example, in October 2001, we reported that without workforce
planning and analysis, EPA was not able to determine the (1) appropriate
workforce size, (2) balance between staff carrying out enforcement functions
and staff providing technical and compliance assistance, and (3) location of
regional staff needed to ensure that regulated industries receive
consistent, fair, and equitable treatment throughout the nation. We also
noted that the number of enforcement staff available to oversee state
enforcement programs varied significantly among EPA?s 10 regions, raising
questions about some regions? ability to provide consistent levels of
oversight to the states.
As a result of our work, we recommended that the EPA Administrator collect
and review complete and reliable information on regional workforce
requirements and capabilities before transferring $25 million of EPA?s
fiscal year 2002 budget for a new state enforcement grant program and
eliminating 270 of EPA?s enforcement staff positions. (Citing our report,
the Congress did not provide EPA with authority to carry out this transfer.)
We also recommended that the EPA Administrator take agencywide actions to
(1) develop a system for allocating and deploying
Page 6 GAO- 02- 552T Elevating EPA to Cabinet Status
EPA?s workforce, (2) target recruitment and hiring practices to fill
critical needs for skills such as those for environmental engineering,
toxicology, and ecology, and (3) implement training practices that provide a
link between developmental opportunities and the competencies needed to
accomplish EPA?s mission. EPA concurred with these recommendations and is in
the process of implementing them.
To ensure that it is meeting its mission effectively, EPA needs high-
quality scientific and environmental information to establish priorities
that reflect risks to human health and the environment, and that compare
risk reduction strategies across programs and pollution problems. Such
information is also needed to identify and respond to emerging problems
before significant damage is done to the environment. While EPA has
collected a vast amount of scientific and environmental data, much of the
data is not complete and accurate enough to credibly assess risks and
establish corresponding risk reduction strategies.
Likewise, primarily because of inadequacies in its scientific and
environmental data, EPA has not been successful in identifying, developing,
and reaching agreement with its stakeholders on a comprehensive set of
measures to link EPA?s activities to changes in human health and the
environment. Spurred by the Government Performance and Results Act of 1993,
(GPRA), EPA has made some progress in measuring the results (outcomes) of
its programs but doing so has proved to be a difficult task for the agency,
and relatively few outcome measures have been developed to date.
We note that the Subcommittee is considering a bill that would, among other
things, create a Bureau of Environmental Statistics with broad authority to
collect, compile, analyze, and publish a comprehensive set of environmental
quality and related measures of public health. As a focal point for
information collection within a new department, such a bureau, if managed
properly, could not only inform the department and the public about the
state of the environment, but it could also provide measures that can be
linked to actions to protect the environment.
Establishing risk- based priorities for EPA?s programs requires high-
quality data on the use and disposal of chemicals. To assess human exposure
to a chemical, the agency needs to know how many people are exposed; how the
exposure occurs; and the amount and duration of the exposure. To assess
environmental exposure, EPA needs to know whether the chemical EPA Needs
Better
Environmental and Scientific Information to Manage Risks and Measure Results
More Complete and Accurate Data Are Needed to Characterize Risk
Page 7 GAO- 02- 552T Elevating EPA to Cabinet Status
is released to the air, water, or land; how much is being released; and how
wide an area is being affected.
Historically, EPA?s ability to assess risks and establish risk- based
priorities has been hampered by data quality problems, including critical
data gaps, databases that are not compatible with one another, and
persistent concerns about the accuracy of the data in many of EPA?s data
systems. Thus, while EPA?s priorities should reflect an understanding of the
relative risk that a chemical poses to the environment and human health and
values, good data often do not exist to fully characterize risk. For
example:
Substantial gaps exist in EPA?s Integrated Risk Information System, a
database of the agency?s consensus on the potential health effects of
chronic exposure to various substances found in the environment. This
database lacks basic data on the toxicity of about two- thirds of the known
hazardous air pollutants.
EPA developed many program- specific databases over the years that contain
enormous amounts of data that cannot be integrated with one another because
they were developed and maintained to support specific programs and
activities and lack common data standards (definitions and formats).
EPA extensively relies on data provided by the states, but much of the
data have not been verified, and EPA does not know the quality of the data.
We have made numerous recommendations over the years to help EPA improve its
data, including a recommendation that EPA develop a comprehensive
information management strategy to ensure the completeness, compatibility,
and accuracy of its data. While concurring with the thrust of our
recommendations, EPA has made slow and uncertain progress in addressing its
long- standing information challenges and will require a much more focused
approach and top management attention to meet its information needs.
Better data are also needed to measure the results of EPA?s efforts and
determine its effectiveness in meeting its mission. Well- chosen
environmental measures inform policymakers, the public, and EPA managers
about the condition of the environment and provide for assessing the
potential danger posed by pollution and contamination. They are also
indispensable to sound decisions on EPA?s future priority- setting and
budgeting. Success in Developing
Environmental Measures Will Depend on Data Improvements
Page 8 GAO- 02- 552T Elevating EPA to Cabinet Status
GPRA requires EPA and other federal agencies to prepare performance plans
containing annual performance goals and measures to help move them toward
managing for results. Performance measures are the yardsticks to determine
success in meeting a level of performance expressed as a tangible,
measurable objective against which actual achievement can be compared.
Although EPA has made progress under the act, our analysis of its fiscal
year 2000 performance plan showed that over 80 percent of the agency?s
performance measures were program outputs, such as the number of regulations
issued, rather than reductions in pollutants or their adverse effects on the
ecology or human health. 3
The EPA Administrator recently announced a major initiative aimed at
developing measures of future environmental performance. The new
?Environmental Indicators Initiative? is intended to collect measures of
environmental quality and integrate them into a single agencywide
information system for reporting measures of both activities and outcomes
that reflect EPA?s ability to show environmental progress. Significantly,
the effort also involves an advisory group led by the Council on
Environmental Quality (CEQ) that will collect environmental indicators
tracked by federal agencies. This effort should help EPA to report health
and environmental conditions beyond the agency?s purview.
While this step is in the right direction, EPA will face an enormous
challenge in getting the scientific and environmental data that it needs to
develop outcome- oriented performance measures. Such data on exposure to
pollution and its effects is often difficult and costly to obtain because of
the monitoring equipment and staff resources required. Consequently, EPA
estimates the types and amounts of exposure on the basis of a chemical?s
physical properties, how it is used, the industrial processes for producing
and processing it, production volumes, and the type and amount of releases
to the environment. However, much of the basic data that EPA needs to
develop its estimates are not available, and the agency must rely on models
or other analytical techniques. Moreover, EPA rarely has sufficient data to
permit full analysis of a chemical, and the agency has little assurance that
its exposure assessments are accurate and complete.
3 U. S. General Accounting Office, Managing for Results: EPA Faces
Challenges in Developing Results- Oriented Performance Goals and Measure:
GAO/ RCED- 00- 77 (Washington, D. C., April 28, 2000)
Page 9 GAO- 02- 552T Elevating EPA to Cabinet Status
Creating a Bureau of Environmental Statistics would place an emphasis on
obtaining high- quality data and could considerably strengthen the agency?s
ability to manage its programs to obtain environmental improvements,
provided that the bureau is given sufficient authority, resources, and staff
expertise to accomplish its complex job. Aggressive actions to find out more
about what aspects of the environment are most improved or most degraded
should enable EPA to better link its knowledge of these conditions with its
programs and activities. EPA could then determine which activities are
successful in correcting problems and which are not.
The creation of a Bureau of Environmental Statistics could be particularly
helpful with regard to obtaining the environmental, health, and economic
impact information collected by other federal agencies but not currently
integrated with EPA?s data. The agency?s Science Advisory Board has
recommended that EPA do more to link the agency?s databases with federal and
other external databases, noting, ?answering many healthrelated questions
frequently requires linking environmental data to census, cancer or birth
registry data, or other data systems (such as water distribution maps) to
determine whether there is a relationship between the environmental measures
and health.? While EPA officials recognize the importance of linking EPA?s
databases with those of other agencies, neither EPA nor the other agencies
have made significant progress because data linkage is not specifically
required and the agencies have higher priority funding demands.
In the current federal approach to environmental protection, EPA, under
various environmental statutes, prescribes regulations with which states,
localities, and private companies must comply. This approach, commonly
referred to as command and control, has achieved some important benefits,
but the additional improvements to address some of the nation?s most
pressing environmental problems warrant new and more costeffective
approaches. EPA responded during the 1990s with a variety of initiatives
intended to encourage its state partners and others to propose innovative
regulatory strategies that could streamline environmental requirements while
encouraging more effective means of protecting the environment.
As we and other organizations have reported in past years, however, EPA?s
effectiveness in promoting regulatory innovation has been limited. Most
recently, we evaluated the particular problems facing states in their own
efforts to pursue innovative regulatory programs. We found their most
significant obstacles to be the detailed requirements of prescriptive
federal Obstacles to Innovative
Regulatory Programs
Page 10 GAO- 02- 552T Elevating EPA to Cabinet Status
environmental regulations, along with a cultural resistance among many EPA
staff toward alternative approaches- often manifested in lengthy and costly
reviews of state proposals. 4 In some cases, the cultural resistance was
traced back to the belief of EPA staff that strict interpretations must be
applied to detailed regulations if they are to be legally defensible. This
belief, in turn, has significantly hindered the efforts of states in their
efforts to test innovative proposals to determine whether they could achieve
greater environmental benefits at lower costs.
Acting on a recommendation of the EPA Task Force on Improving EPA
Regulations, the agency plans to involve states early in the process used to
develop regulations in order to help ensure that the regulations will be
developed in a manner that encourages, rather than inhibits, innovation.
This approach, however, is a limited response because it will not address
prescriptive regulations that already exist. To overcome the constraints on
innovation imposed by a strict interpretation of the existing prescriptive
regulations, EPA would need legislative changes providing the agency with
broad statutory authority, or a ?safe legal harbor,? for allowing states and
others to use innovative approaches in carrying out federal environmental
statutes. In the absence of such authority, the effectiveness of future
innovative efforts will require close monitoring by EPA and its stakeholders
and the continued attention of the Congress. In addition, EPA needs to make
a strong commitment to improving its performance measures to ensure that the
new approaches are more effective than the traditional approaches they
replace.
We recently initiated a comprehensive management review of EPA that will
include many of the areas being considered by the Subcommittee as it
deliberates the legislation before it to elevate EPA to Cabinet status. Our
review will assess the agency?s management, analyze problems, determine
their underlying causes, and recommend actions to improve the management of
environmental programs. As we complete our work over the coming months, we
would be pleased to share our results with the Subcommittee.
4 U. S. General Accounting Office, Environmental Protection: Overcoming
Obstacles to Innovative State Regulatory Programs, GAO- 02- 268 (Washington,
D. C.: March 4, 2002.)
Page 11 GAO- 02- 552T Elevating EPA to Cabinet Status
Mr. Chairman, this concludes my prepared testimony. I would be pleased to
respond to any questions that you or other Members of the Subcommittee might
have.
For information about this testimony, please contact John B. Stephenson at
(202) 512- 6225 or stephensonj@ gao. gov. This statement is available on
GAO?s home page at http:// www. gao. gov. Individuals making key
contributions to this testimony were Ed Kratzer and Ralph Lowry. Contacts
and
Acknowledgments
(360192)
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