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Cover Story

January 18, 2010
Volume 88, Number 3
pp. 10 - 15

Congressional Outlook For 2010

Climate change, chemical regulation reform will vie for Congress' attention

Government & Policy Department

Architect of the Capitol
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As the second session of the 111th Congress gets under way this week, the Democrats continue to control majorities in the Senate and the House of Representatives, as well as the White House. This situation typically translates into lots of congressional action, but during this election year, activity will be tempered.

Topics familiar from the first session will continue to dominate congressional activity. That means health care, Wall Street financial reform, and economic-stimulus-related legislation all will again compete for congressional attention. Being added to the agenda this year is the reauthorization of the USA Patriot Act, congressional staff point out.

Such priorities will leave little time for members of Congress to dig into other big Administration priorities such as climate-change legislation. The just-reached Copenhagen Accord adds pressure on Congress to complete its work on a bill defining U.S. policy in this area.

Other important science and technology issues that were on the 2009 agenda will be vying for Congress’ attention again this year. For example, Congress will continue its debate on legislation setting permanent chemical plant security regulations, improving food and drug safety policies, and reforming the decades-old chemical regulation law.

The following is C&EN’s annual analysis of what to expect from Congress in the coming months.

ENERGY & ENVIRONMENT. Legislators returning to the Capitol this week face a maze of climate-change legislative options. To complicate matters, Congress is unlikely to even squarely face the issues because other more pressing legislation will draw members’ attention far from the debates needed to sort out climate-change proposals.

Most of the climate action, when it occurs, will be in the Senate, where climate-change legislation is currently stuck.

Last June, the House cleared its 1,200-page climate bill (H.R. 2454) that included a cap-and-trade program that would reduce carbon dioxide emissions by 83% from 2005 levels by 2050. Although the bill gives away enough pollution allowances so that utilities, chemical companies, and other CO2 emitters would feel little pain for a decade, it still cleared by a thin seven-vote margin (C&EN, July 6, 2009, page 8).

Matters are much more intense in the Senate. Six committees have jurisdiction over energy and climate-change provisions, and any controversial bill will need 60 votes to overcome a likely filibuster.

In June 2009, one of those committees, the Senate Energy & Natural Resources Committee, cleared S. 1462, which includes a host of incentives to encourage renewable energy development and energy efficiency. However, it does not touch the thorny elements of climate change, such as cap and trade or CO2 reduction targets.

In November 2009, the Environment & Public Works Committee cleared its climate-change bill (S. 1733) on an 11 to 1 vote, with no Republican vote, and without a single Republican attending the bill’s markup. The 950-page bill includes CO2 reduction targets and other difficult provisions. The lone “no” vote came from Democrat Max S. Baucus (Mont.), who objected to a process selected by committee leadership to clear the bill without amendments (C&EN, Nov. 9, 2009, page 13).

Four committees have yet to act, and much will turn on Baucus’ Finance Committee, which will write the cap-and-trade provisions.

Also in November, Senate Majority Leader Harry M. Reid (D-Nev.) announced that once the other four committees act, he will merge all the committee-passed bills into a single package and bring it to the floor. However, all action has stopped, and it appears unlikely that climate-change legislation can garner the 60 votes needed to become law.

Into this void has stepped the troika of Sens. Lindsey O. Graham (R-S.C.), Joseph I. Lieberman (I-Conn.), and John F. Kerry (D-Mass.), who have introduced their own approach to climate-change legislation. With few details, the three issued a “concept paper” to President Barack Obama on Dec. 10, 2009, on the eve of the Copenhagen climate-change talks.

The four-page framework includes CO2 reduction targets along the lines of the House and Senate bills, as well as an endorsement of cap-and-trade provisions. It also urges great support for nuclear energy, domestic oil production and refining, and coal use. It is unclear when an actual bill would be written or how these conflicting provisions could be woven into a bill. However, the proposal by three senators coming from opposite political poles has sparked interest that maybe there is a way to break the Senate’s climate-change logjam.

Surveying the landscape, the American Chemistry Council (ACC), a chemical industry trade association, singled out two areas of particular interest to chemical companies: ensuring that adequate free CO2 allowances are set aside to allow chemical companies to adjust to operating in a carbon-constrained global environment and making sure climate legislation does not result in greater use of natural gas, which chemical companies use for feedstock and fuel.

The trade association also seeks to delay a push by the Environmental Protection Agency to regulate CO2 under the Clean Air Act, which the agency recently proposed (C&EN, Dec. 14, 2009, page 7).

ACC Chief Executive Officer Calvin M. Dooley noted during a December 2009 briefing that the chemical industry is divided over support for cap and trade but unified in opposition to EPA’s use of the Clean Air Act to regulate CO2 emissions. Instead, ACC is seeking a one-year delay to block EPA from developing these regulations, which is similar to a recent proposal by Sen. Lisa Murkowski (R-Alaska). She intends to seek passage of such an amendment early this year, congressional staff say. The provisions are likely to be added to legislation raising the debt ceiling for the national government or may be offered as a stand-alone resolution.

Meanwhile, several Democratic senators, primarily from states hard hit by unemployment and led by Sens. Sherrod C. Brown (Ohio), Maria E. Cantwell (Wash.), and Debbie Stabenow (Mich.), have introduced bills to spur clean-energy technologies and jobs with or without a climate-change bill. The bills are likely to be fashioned into an overall jobs bill, which Obama wants to see passed early in the year. The senators see a close tie between clean-energy technologies, jobs, and greenhouse gas reductions.

Others question the impact of this approach. Jonathan Lash, head of the environmental think-tank World Resources Institute (WRI), speaking at a press briefing, applauded the “positive clean-energy incentives” and the jobs that will be created through these bills, but said they are not enough. “This won’t get us the deep reductions in greenhouse gas emissions we will need over the next 40 years to fight climate change,” he said.

He was supported by Charles O. Holliday Jr., former chairman and CEO of DuPont, who also was attending the WRI briefing. “We need cap and trade as a road map to make sure resources are going to the right places,” Holliday told C&EN.

He predicts heated global competition for clean energy. “China is a leader, and they see this coming,” he says. “When clean-energy markets open up, they are going to beat us. Our advantage is we are fast and entrepreneurial, but we need market signals to move that way. This is a revolution, and it won’t happen for us without a market.”

CHEMICAL REGULATION. Congress is expected to work on legislation this year to revamp the federal statute that governs the manufacture of chemicals. That law is the 1976 Toxic Substances Control Act (TSCA).

The Obama Administration is calling for reform of TSCA, and in September 2009, it laid out concepts that it wants Congress to incorporate in a recast version of the chemical control law (C&EN, Oct. 5, 2009, page 9).

Several major chemical industry trade organizations support modernization of TSCA, including ACC, the Soap & Detergent Association, and the Consumer Specialty Products Association. Meanwhile, a growing number of environmental and health groups and health care companies are calling for revision of TSCA. States are jumping on the TSCA reform bandwagon, too, with 13 calling for Congress to update the law.

The various factions generally agree on the need to revamp TSCA and endorse the idea that commercial chemicals need safety assessments of their various uses. But they diverge on which standards EPA should employ to determine safety, primarily over whether the agency should use a precautionary rather than risk-based approach.

In 2009, the House and Senate held hearings on the need for TSCA reform. Although several members of Congress have shown interest in a bill to update TSCA, none has introduced legislation.

In the House, Reps. Henry A. Waxman (D-Calif.), chairman of the Energy & Commerce Committee, and Bobby L. Rush (D-Ill.), chairman of that panel’s Commerce, Trade & Consumer Protection Subcommittee, have said they plan a bill. An aide for the committee tells C&EN that Waxman remains focused on the need for TSCA reform but has not yet decided when his panel will work on legislation.

In the Senate, Frank R. Lautenberg (D-N.J.), who sponsored unsuccessful legislation in 2005 and 2008 to transform TSCA into the Kid-Safe Chemicals Act, has said he will introduce a similar bill soon (C&EN. Dec. 7, 2009, page 10). Lautenberg chairs the Senate Environment & Public Works Subcommittee on Superfund, Toxics & Environmental Health. His efforts on TSCA reform have the support of Environment & Public Works Committee Chairwoman Barbara Boxer (D-Calif.).

In other legislation, bills are pending in the House and Senate that would directly impact four chemical plants that use mercury cells to produce chlorine, sodium hydroxide, and potassium hydroxide. Already approved by the Energy & Commerce Committee and awaiting a vote in the full House is H.R. 2190, which would outlaw the use of mercury in chlor-alkali production. Designed to cut mercury pollution, the measure targets two facilities owned by Olin and two others, one owned by PPG and the other by Ashta Chemicals (C&EN, June 15, 2009, page 24). The Senate Environment & Public Works Committee is likely to consider a similar bill, S. 1428, this year.

Endocrine-disrupting chemicals, such as bisphenol A (BPA), are also likely to get the attention of Congress this year. Leading the charge questioning the safety of BPA, a plastics chemical found in polycarbonate food and beverage containers and in the epoxy resin lining of most food and beverage cans, is Rep. Edward J. Markey (D-Mass.), chairman of the Energy & Commerce Committee’s Energy & Environment Subcommittee.

The congressman successfully added an amendment to the Food Safety Enhancement Act of 2009 (H.R. 2749), which passed the House last year. That amendment required the Food & Drug Administration to reevaluate approved uses of BPA in food and beverage containers by the end of 2009 (C&EN, Aug. 10, 2009, page 24). However, because the bill did not clear the Senate, the BPA review did not happen. Markey is expected to introduce new legislation related to BPA and other endocrine disrupters early this year.

Adding to the congressional interest in BPA is the fact that FDA—the agency responsible for monitoring the safety of BPA in food and beverage containers—failed to meet its self-set deadline of Nov. 30, 2009, for evaluating BPA’s safety. Congress is likely to put pressure on FDA to speed up its review.

Legislation to address concerns about intersex fish in the nation’s rivers and a dramatic rise in hormone-related disorders in people will also see action this year. This activity is prompted by the introduction of the Endocrine Disruption Prevention Act of 2009 (H.R. 4190, S. 2828) last month by Rep. James P. Moran Jr. (D-Va.) and Sen. Kerry (C&EN, Dec. 14, 2009, page 28).

The bill authorizes the National Institute of Environmental Health Sciences to develop a new research program and establish an independent panel of scientists to prioritize chemicals for screening as endocrine disrupters. It addresses inadequacies in EPA’s Endocrine Disrupter Screening Program, which officially launched in October 2009 after more than a decade of delays (C&EN, Oct. 26, 2009, page 7).

Hearings on endocrine disrupters are expected this year in the House Energy & Commerce Committee and Senate Health, Education, Labor & Pensions Committee.

HOMELAND SECURITY. Congress is under pressure to pass permanent chemical plant security legislation this year. The current regulatory program administered by the Department of Homeland Security (DHS)—the Chemical Facility Anti-Terrorism Standards—will expire on Oct. 4.

The skirmishing began last year, with the primary question being whether to authorize DHS to require companies to evaluate and in some cases adopt so-called inherently safer technology (IST), such as using different chemicals or processes to reduce the potential damage that a terrorist attack on a chemical facility could cause.

“We need cap and trade as a 
road map to make sure resources are going to the right places.”

The industry has endorsed IST as a design concept for the construction of new or modified plants but adamantly opposes giving the federal government authority to require the retrofit of existing facilities to meet recommendations with which the facility owners may not agree. But environmental groups such as Greenpeace and the think-tank Center for American Progress argue that the only certain way to protect communities is to eliminate the possibility of a toxic release by converting facilities to safer, more secure technologies.

The Chemical & Water Security Act (H.R. 2868) passed by the House on Nov. 6, 2009, would increase DHS’s authority to regulate security practices at chemical facilities and give EPA new power to protect wastewater treatment plants and drinking water facilities.

In a victory for the environmental lobby, chemical-handling facilities would be required to assess whether a switch to alternative processes or chemicals could limit the potential consequences of a terrorist attack. Facilities in the top two of four risk-based tiers could be required by DHS to implement the safer technology if it is technically feasible, is cost-effective, and lowers the risk at the facility while not shifting it to other locations in the supply chain.

With attention now moving to the Senate, an aide to Homeland Security & Governmental Affairs Committee Chairman Lieberman says a hearing on chemical security is likely to be held early in the year. Lieberman has indicated that he hopes to craft a bipartisan bill with the committee’s ranking Republican, Susan M. Collins (Maine), but the two differ sharply on the IST requirement. Lieberman favors it, and Collins does not.

In addition, Sen. Lautenberg has confirmed that he also plans to propose comprehensive chemical security legislation. Last month, on the 25th anniversary of the gas leak in Bhopal, India, that killed 3,500 people, Lautenberg issued a statement saying the tragedy “serves as a warning that a chemical disaster or attack could kill thousands of Americans. We have a responsibility to reduce the use of dangerous chemicals and keep our families and communities safe from potential attacks against these facilities.”

ACC’s Dooley says the industry will continue to oppose efforts “to give DHS the authority to mandate the implementation of a specific technology that [the department] alone could determine is inherently safer. We think that is too great of an intrusion of government into the responsibilities of the private sector, which has the expertise and the capacity to make those determinations.”

A process is needed to ensure that government and industry “collaborate in putting together a security plan that achieves a very high level of safety against an act of terrorism,” Dooley adds. “We don’t think that’s going to be as successful with mandatory authority vested in DHS.”

CHEMICAL WEAPONS. After years of delay, the destruction of the nation’s stockpile of chemical weapons is getting a push from the Obama Administration. Responding to a request by the Defense Department, Congress in late December approved a 29% increase in fiscal 2010 funding for the Army’s Assembled Chemical Weapons Alternatives (ACWA) program, to $550.2 million.

The money will be used to build chemical neutralization plants at the Pueblo Chemical Depot in Colorado and the Blue Grass Army Depot in Kentucky, two of the six military installations where the obsolete weapons are stored. Stockpiles are being incinerated at the other four sites in Alabama, Arkansas, Oregon, and Utah.

Sen. Mitch McConnell (R-Ky.) and Rep. Ben Chandler III (D-Ky.) led the effort to secure the increased funding to allow acceleration of the demilitarization project in Kentucky. Sen. Mark Udall (D-Colo.) and Rep. John T. Salazar (D-Colo.) undertook similar efforts for the disposal project in Colorado.

Despite the substantial funding increase, the Pentagon does not expect to eliminate all of its chemical weapons until 2021, well beyond the 2012 deadline set by the Chemical Weapons Convention, an international treaty that requires full destruction of the U.S. chemical arsenal. The military has destroyed about 60% of the stockpile, which includes VX, GB (sarin), and mustard agent produced before the weapons program was terminated 40 years ago.

Under the Pentagon’s plan, destruction of the 523 tons of mustard agent and sarin and VX nerve agents stored at Blue Grass is scheduled to begin in 2018 and finish in 2021. Destruction of 2,600 tons of mustard blister agent held at Pueblo is expected to be completed in 2017.

Funding for the ACWA program this year is up from $427.5 million in fiscal 2009, $407.1 million in fiscal 2008, and $349.2 million in fiscal 2007. “This latest increase is further proof that Congress understands the need to provide adequate funding for this project,” says Craig Williams, cochair of the Chemical Weapons Working Group, a watchdog group in Berea, Ky.

FOOD & DRUG SAFETY. Despite other pressing issues expected to occupy Congress, 2010 will be the year for food safety reform, observers predict. Pressure to modernize U.S. food safety laws has been mounting for years, following several high-profile outbreaks involving contaminated peanuts, peppers, spinach, and other food products.

Last year, the House passed legislation that would overhaul how FDA regulates food safety, but it stalled in the Senate, taking a back seat to health care reform.

The Food Safety Enhancement Act of 2009 (H.R. 2749), sponsored by Rep. John D. Dingell (D-Mich.), requires all food facilities to develop a hazard analysis and risk-based preventive control plan. The bill gives FDA the authority to order a recall and to access records and laboratory data. It also increases the frequency of FDA inspections at high-risk food facilities and requires food facilities to pay a $500 fee annually to help pay for inspections. The bill passed with strong bipartisan support in July 2009.

This past November, the Senate Health, Education, Labor & Pensions Committee passed similar legislation: the FDA Food Safety Modernization Act (S. 510), sponsored by Sen. Richard J. Durbin (D-Ill.) (C&EN, Nov. 23, 2009, page 26). Like the House bill, the Senate bill emphasizes prevention of food-borne illness. One difference between the bills is that the Senate version does not include an annual registration fee for food facilities.

The Senate is expected to vote on the bill early in 2010. Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor & Pensions Committee, said in a statement that he is “hopeful that the issue will come to the Senate floor very soon.”

Supporting the cause is the fact that the President has made food safety a top priority for his Administration and has said that he supports H.R. 2749. In March 2009, Obama created a Food Safety Working Group to modernize and enforce food safety laws and coordinate food safety measures across the federal government.

Drug safety is also likely to come before Congress this year. During the health care debate last December, a group of senators tried to attach an amendment to the health care bill that would have allowed lower priced prescription drugs to be imported into the U.S. from Canada and other countries. The amendment failed because of concerns from FDA and others about drug safety.

The Obama Administration is committed to lowering drug prices for Americans and has said it will resolve any safety issues regarding imported drugs with FDA. Hearings on drug importation and safety are likely once work on the health care bill is complete.

ECONOMY & BUDGET. A multi-billion-dollar tax credit that companies with big R&D budgets depend on expired at the end of 2009, but lawmakers have vowed to retroactively renew the incentive this year.

The 20% R&D credit, worth $7 billion in annual tax savings to companies, fell by the wayside and expired on Dec. 31. The House included a one-year extension of the credit in H.R. 4213, the Tax Extenders Act, which it passed on Dec. 9, 2009, by a vote of 241-181. But the Senate got bogged down on sweeping health care legislation and was unable to push through the tax package by the end of the year.

More than 300 companies, including Dow Chemical, DuPont, Pfizer, and GlaxoSmithKline, have been urging lawmakers to broaden the credit and make it permanent. Companies argue that short-term extensions of the credit fail to provide firms with the certainty they need to invest in long-term research projects. The R&D Credit Coalition, a Washington, D.C.-based trade group, estimates the credit is equal to a federal subsidy of 6 cents for every dollar a company spends on research in the U.S.

The addition of “new and expanded mechanisms for the administrative reexamination of patents … are quite problematic.”

In a joint statement on Dec. 22, 2009, Senate Finance Committee Chairman Baucus and ranking member Charles E. Grassley (R-Iowa) promised to move legislation in early 2010 to extend the R&D credit and other expired tax breaks for businesses and individuals “without a gap in coverage.”

“Although the House and Senate were unable to come to agreement on a package to extend several expiring tax provisions before Congress adjourned, these measures must be addressed as soon as possible,” the senators said. “Expiration of these provisions makes it difficult for taxpayers to fully and effectively realize the intended benefits by creating uncertainty and complexity in the tax law.”

Baucus and Grassley vowed to take up legislation that provides “a seamless extension of these provisions as quickly as possible in the new year.” The credit has lapsed numerous times since it was created by Congress in 1981 and then been extended after expiration, sometimes retroactively.

PATENT REFORM. Congress could not reach consensus on how to reform the nation’s patent law in 2009, but lawmakers will try again this year. The Senate Judiciary Committee approved the Patent Reform Act (S. 515) last April; the bill attempts to end the long-standing dispute between technology companies and the pharmaceutical industry over whether damages for patent infringement should be reduced. A similar measure, H.R. 1260, is pending in the House.

High-tech firms, which face a flood of patent infringement lawsuits, have been urging lawmakers to limit the amount of money juries may award in such cases. But drug, biotech, and manufacturing companies say the threat of high damages is needed to deter infringement and protect their intellectual property.

In a bid to bridge the gap, Sens. Patrick J. Leahy (D-Vt.), Dianne Feinstein (D-Calif.), and Arlen Specter (D-Pa.) agreed on compromise language that instructs judges to act as gatekeepers and provide juries with guidance on what factors they should consider in determining damage awards based on existing case law.

The gatekeeper concept has been endorsed by several major stakeholders, including the Coalition for 21st Century Patent Reform, a broad group of nearly 50 global corporations, such as Eli Lilly & Co., Pfizer, and Novartis. The group calls the compromise “a major breakthrough” that should move the bill “toward consensus and, hopefully, ultimate enactment by the Congress.”

Leahy, who chairs the Judiciary Committee and is one of patent reform’s biggest congressional proponents, says the deal on damages has “paved the way for success that will benefit all inventors and innovators.” But at least a dozen Republican senators believe the legislation “needs additional work before it is brought to the floor” for a vote.

In a recent letter to Senate Majority Leader Reid, Sen. Sam Brownback (R-Kan.) and 11 other Republicans asserted that S. 515 would harm small businesses, universities, and individual inventors. Although the bill has been “greatly improved” since its introduction in March 2009, especially with regard to the damages provision, the senators wrote that the addition of “new and expanded mechanisms for the administrative reexamination of patents … are quite problematic.”

The so-called postgrant review provisions would allow anyone to challenge the validity of a patent for any reason within the first 12 months after it is issued by the patent office, says Renee Kaswan, founder of IP Advocate, a group that represents the interests of academic inventors.

“This really serves the big players at the expense of small-business patentees,” Kaswan says. “It is an open invitation for procedural challenges by incumbent firms to impede disruptive innovations in order to protect their established markets. The resulting costs and delays will cripple innovation and thwart start-up investments in companies that rely on patents for their survival.”

The House is not expected to act until the Senate resolves its lingering disagreements.

SCIENCE POLICY. The soon-to-be-released Obama plan for the National Aeronautics & Space Administration’s human exploration program will certainly result in numerous hearings in both the House and Senate. Based on a report released last fall of a blue-ribbon panel chaired by Norman R. Augustine, the President’s vision is expected to address the future of the space shuttle, the future of the International Space Station, and the locations for future space exploration missions (C&EN, Nov. 2, 2009, page 22).

Congress is also likely to take up legislation that promotes the development of commercially successful and safe nanotechnologies. The House passed its version (H.R. 554) of the Reauthorization of the National Nanotechnology Initiative (NNI) last year, but the bill (S. 1482) has yet to move in the Senate. Established in 2001, NNI coordinates nanotechnology research and development among 25 federal agencies. Both bills would require a strategic plan for environmental, health, and safety (EHS) research for nanoscale materials, but they do not specify how much federal agencies should spend on EHS research.

House staffers say they expect the Senate to clear the bill this year. “We are hoping to see a bill in the Senate in early 2010 that we can bring to conference and bring to the President’s desk sometime before summer,” says Dahlia Sokolov, a congressional staffer with the House Committee on Science & Technology.

Sokolov says she has every reason to believe that the Obama Administration is placing a much higher importance on EHS research than the previous Administration because of the potential economic impact should something go wrong. Therefore, the President is expected to sign 
the bill once it is passed by 

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