Waste's Political WEIGHT

Bill Sells

WITH CONGRESS TIED UP IN KNOTS this election year, there is little chance much waste-related legislation will be passed in 2004. The transportation and 2005 appropriations bills should be completed, but other major issues will likely fall to the sidelines as Democrats and Republicans try to stake out their territories. On the other hand, because the presidential election is likely to be a close call, the United States' future leader could be chosen by his position on a regional issue like interstate/international waste, but broader business issues will get most of the attention.

Interstate/International Waste

Interstate and/or international waste regulations are truly apolitical. Support for new rules regulating waste movement across state lines or country borders depends more on what states congressional leaders represent, rather than their party affiliation. Neither Republicans nor Democrats can lay claim to the waste issue. But representatives from Indiana, Michigan, Ohio, Pennsylvania and Virginia don't like trash moving freely between states, while their counterparts from Illinois, Maryland, Missouri, New Jersey, New York and New England don't see any problems with interstate waste.

Yet other aspects of the interstate waste debate must be considered. Free market concerns, environmental protection and the transportation infrastructure are pertinent in waste disposal. The free market for waste is vibrant, with a vast majority of states (40) actively importing and exporting waste. Since waste that travels across state lines is disposed in environmentally sound Subtitle D facilities, environmental concerns with out-of-state waste are largely moot. And while the nation's infrastructure needs upgrading, the entire interstate commerce industry is equally responsible for decay and supportive of improvements.

Landfill Gas Tax Credits

A new energy policy will be one of the biggest victims during the political season. Credits for the conversion of landfill gas (LFG) to electricity were included in energy bills passed by the House and considered in the Senate in 2003. President George W. Bush also made new energy policy a priority after 9/11. But the chances of success in 2004 are remote, mainly because of the election.

At the root of the differences is Democratic support for more conservation versus Republican desire for increased domestic production. Initially, drilling for oil in the Arctic National Wildlife Refuge was the major stumbling block, but this provision was removed from the Senate bill. However, House Republicans were not willing to budge on legal immunity for producers of the fuel additive methyl tertiary butyl ether (MTBE).

MTBE has been cited as a drinking water pollutant. So unless the Senate finds a way to move energy legislation containing the MTBE language or the House backs down on the issue, energy legislation will go nowhere.

Not coincidentally, presidential hopeful John Kerry is one of the Senate's biggest proponents of automobile efficiency, as he has pushed for increasing corporate average fuel economy (CAFE) standards for years. Bush, on the other hand, hails from a top oil-producing state and supports increased production.

PTO Tax Correction

It is unclear whether waste vehicles will receive a tax break from Uncle Sam in 2004. Power take-off (PTO) tax credits for the non-propulsion use of diesel fuel were included in the Senate version of the $318 billion transportation bill, but the House has not yet finalized its version of the bill.

The credits would reflect a correction in the fuel tax collected at the pump and is intended to pay for wear and tear caused by vehicles moving over the road. Fuel used for other purposes would not be subject to the tax. The Senate is calling for an annual $250 income tax credit for qualified waste hauling vehicles; similar language has been introduced in the House. But the problem is the overall cost of the transportation package.

The original House version of the bill cost $375 billion, yet Bush set a $256 billion dollar limit. He has threatened to veto the final transportation package if it exceeds his $256 billion ceiling. Thus, House leaders are working to cut $57 billion from their version to bring the cost in line with the Senate bill.

Under pressure from fiscal conservatives to reign in spending, Bush is remaining firm on his $256 billion price tag. However, many in Congress believe that more needs to be invested in the nation's infrastructure, and the Bush figure does not provide adequate funding for transportation projects. The bill enjoys strong bipartisan support in Congress, as it provides money and creates jobs nationwide. On the other hand, monies spent on Homeland Security after 9/11, military operations overseas, lost federal revenue from tax cuts and the $534 billion Medicare prescription drug benefit passed in 2003 have contributed to budget deficits that are projected to swell to a $521 billion this year.

The record deficit and the need for transportation infrastructure have setup a show-down between Congress and Bush. Realistically, both sides will find common ground because Congressional Republicans won't want to weaken Bush through a highly visible fight, and he needs strong support from GOP members in the upcoming election. So while the transportation bill probably will be enacted, additional cuts are likely. PTO credits are narrowly focused on the waste and concrete industries, making them a target for the chopping block.

Class Action Reform

Congressional decisions on general business issues could affect the waste industry, too. Perhaps the best example of politics dictating policy is class action reform; there is widespread agreement on the need for action in this area.

Legislative efforts to reform the nation's class action laws target venue shopping by plaintiff attorneys, guarantee monetary awards for plaintiffs, in most instances, and establish guidelines for communications between attorneys and plaintiffs. To discourage venue shopping, cases involving at least 100 plaintiffs (two-thirds of which reside out-of-state) and seeking $5 million or more in damages can be moved to federal court. The legislation also requires for class members' payments of attorney fees under a settlement not to result in net losses to the plaintiff and creates guidelines for providing clear settlement information to class members.

On June 12, 2003, the House passed class action reform legislation, and the Senate was one vote short of the 60 needed to bring reform legislation to a vote late in October. After October, changes were made to the Senate bill to gain support from three Democrats who initially had opposed the bill.

Logic says class action can overcome a filibuster and pass the Senate if brought up for a vote. But Ted Kennedy, one of 38 senators opposed to class action reform, wants to attach a minimum wage amendment to the bill. Kennedy and others oppose class action reform over concerns with consumer protection.

Republicans oppose Kennedy's minimum wage plan. But they prefer not to vote against raising the wage in an election year, so good class action legislation supported by 62 Senators may fade in 2004. Ironically, in his 20 years in the Senate, Kerry has not taken a position on class action reform, nor does his Web site address the issue. His voting record on legal reform is generally inconsistent.

Healthcare Relief

The House passed several initiatives in 2003 designed to reduce healthcare costs. In June, legislation to create Association Health Plans (AHPs) passed the House, allowing companies to join together when purchasing healthcare to take advantage of economies of scale. AHPs not only lower cost through volume purchasing, they also exempt AHPs with more than 1,000 members from state laws mandating coverage of specific screenings and treatments to further reduce insurance costs.

While companion legislation was introduced in the Senate last year, it has gone nowhere. Democrats oppose creating AHPs. Supporters say the bill will create consistency across state lines, allowing AHPs to flourish. They also predict freeing small employers from state mandates would save up to 30 percent in healthcare costs, enabling businesses to offer coverage to more employees.

Opponents assert that AHPs carry a high potential for fraud and are best policed at the state level. They warn that the measure will result in a two-tired health insurance market, with AHPs exempt from state health mandates and all other insurers subject to them.

Bush, the U.S. Chamber of Congress, National Federation of Independent Businesses and most Republicans favor creating AHPs, while the National Governors Association, National Conference of State Legislatures and many Democrats oppose the measure. With a clear partisan distinction over AHPs, the Senate probably will not have enough support to vote on the legislation this year.

Medical Liability Reform

Congress also has examined medical liability reform to reduce health care costs. Once again, the House, needing only a simple majority, passed comprehensive medical liability relief legislation. The bill would limit the amount of non-economic damages, including pain and suffering awards, that could be recovered through a healthcare lawsuit to $250,000, regardless of the number of parties against whom the lawsuit was brought or the number of separate claims or actions brought with respect to the same incident. The bill also would limit the amount of punitive damages that could be awarded to two times economic damages, or $250,000, whichever is greater. And the bill would restrict contingency fees that could be charged by attorneys.

Senate leaders realize they don't have the 60 votes needed to avoid a Democratic filibuster and bring comprehensive medical liability reform legislation to the floor for a vote. So the Senate is using a piecemeal approach to target specific sectors of medical care for liability relief.

The first vote was on relief for obstetricians and gynecologists. The OB/GYN bill failed, but Senate leaders intend to keep pressing the issue by bringing up legislation to shield trauma and emergency room personnel next.

Like class action reform, trial lawyers and consumer advocate groups oppose medical liability reform, while the president, American Medical Association, American Hospital Association, business groups and insurance industry support the legislation. Kerry plans to control malpractice insurance costs by requiring an impartial review of a claim before an individual files suit and by eliminating punitive damages, except in egregious cases. But Kerry's plan does not cap damage awards. With opposition to blanket medical malpractice reform, comprehensive legislation will not be considered prior to the election, and targeted bills face almost certain defeat.

Outlook

Logic says the presidential election will not come down to the candidates' position on waste disposal, especially since there is no party ownership of the issue in Congress and neither party is the beneficiary of waste legislation. Additionally, restrictions will raise the cost of waste disposal. Raising prices, of any kind, is something Congress does not want to do in an election year. So for economic and regional reasons, don't expect major action on waste laws in 2004.

The election will most likely hinge on broader economic issues. But then again, politics is anything but logical. Michigan and Ohio are presidential battleground states, so maybe the waste issue could be a factor in the election after all.

Bill Sells is director of federal relations for the Environmental Industry Associations (EIA). E-mail: [email protected].