U.S. Chamber of Commerce President Tom Donohue urged Washington lawmakers today to rethink proposed climate regulations and other policies that he charged would raise costs for businesses and slow recovery from the worst economic downturn since the Great Depression.
"Congress, the administration and the states must recognize that our weak economy simply could not sustain all the new taxes, regulations and mandates now under consideration," Donohue said during his annual "State of American Business" speech at the chamber's Washington headquarters. "It's a sure-fire recipe for a double-dip recession, or worse."
Donohue's speech comes as President Obama prepares to deliver his State of the Union address and considers additional stimulus measures to lower the nation's 10 percent unemployment rate. Nonfarm payrolls shrank by 85,000 jobs in December, following a month in which the U.S. economy added jobs for the first time in nearly two years.
Employment losses averaged 69,000 per month in the fourth quarter of 2009, down from 691,000 per month in the first quarter, according to the Labor Department.
"The road to recovery is never straight," Obama said last week, as he announced $2.3 billion worth of American Recovery and Reinvestment Act tax credits for clean-energy manufacturing projects.
The president has proposed awarding an additional $5 billion worth of manufacturing tax credits, rebates for home weatherization, tax breaks for small businesses, and loans and grants for highway, rail, transit, aviation and water projects as a way to spur job creation -- a key political issue as congressional Democrats face midterm elections this fall.
In today's speech, Donohue said chamber economists project 3 percent U.S. gross domestic product growth in 2010. At the same time, he warned, businesses face uncertainty because of proposed reforms of the financial services and health care sectors, as well as regulation of carbon dioxide and other heat-trapping gases.
Donohue charged that House-passed legislation -- which would create a greenhouse gas emissions cap-and-trade system for regulated polluters and set renewable energy generation targets -- would "tie economic activity in knots and eliminate jobs from one end of the country to the other." The chamber has not stated its position publicly on companion legislation in the Senate, but Donohue underscored that his business group prefers emissions legislation over U.S. EPA regulation.
The Obama administration last month issued a final determination that greenhouse gases endanger public health and welfare, and EPA is expected to issue emissions standards for light-duty vehicles by March. Once the standards are final, greenhouse gases will become regulated pollutants under the Clean Air Act, and large stationary sources will be required to install the best available pollution control technologies.
Rep. Earl Pomeroy (D-N.D.) filed legislation last week that would strip EPA of its authority to regulate greenhouse gas emissions unless the agency is provided explicit authority to do so from Congress (E&ENews PM, Jan. 8).
Donohue replied "maybe" when asked whether the chamber will sue to halt EPA regulation of greenhouse gases under the Clean Air Act.
"This is a retirement program, among other things, for class-action lawyers," he said.
He promised heavy election-year engagement with policymakers to help create 20 million new jobs in the United States during the next decade -- a target of the business association's "Campaign for Free Enterprise" (Greenwire, Oct. 14, 2009).
"We're not in presidential politics ... but we're going to be in a lot of politics in the House and Senate and judicial politics of this country," Donohue vowed.
He urged Congress and the White House to support stronger intellectual property protections, reauthorize the nation's highway bill, expand credit access to businesses, support construction of new nuclear power plants, and approve trade deals with South Korea, Colombia and Panama.
"The United States has the talent and the capacity to invent the green technologies here," Donohue said. "But if we don't address the excessive costs in our business environment, embrace aggressive trade policy or protect our intellectual property, the business, the jobs and the technologies will go somewhere else."