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Newsletter | March 27, 2024

A Win For PFAS And A Loss For The IRS

Climate and EnvironmentCorporate CrackdownIRS
A Win For PFAS And A Loss For The IRS

This newsletter was originally published on our Substack. Read and subscribe here.

Republican Judges Sides With PFAS Over Public Health

Last Thursday, the Fifth U.S. Circuit Court of Appeals ruled against the Environmental Protection Agency’s (EPA) ability to regulate toxic waste created by corporate polluters. 

The case, Inhance Technologies v. U.S. Environmental Protection Agency, centered around the EPA’s efforts to prohibit Inhance Technologies, a Texas-based plastics treatment company, from utilizing methods that produce a group of chemicals called pre- and poly- fluoroalkyl substances (PFAS). PFAS chemicals, as my colleagues Chris Lewis and Emma Marsano explained in last week’s newsletter, “trigger scientific concern because, as the ‘forever chemicals’ moniker suggests, they don’t break down in the environment, but instead stick around, building up in everything from soil to drinking water to the bodies of people and animals.” Even more concerning than the fact that these chemicals are present in 97 percent of Americans are the numerous health risks that both the EPA and Centers for Disease Control and Prevention have acknowledged are associated with PFAS exposure. 

The danger these chemicals pose to the environment and public alike make the Fifth Circuit Court’s decision all the more alarming. 

The three-judge panel that presided over the case (two of whom were appointed by former presidents George W. Bush and Donald Trump) did not dispute that Inhance’s plastic treatment practices produced PFAS. Nor did they dispute that the EPA has the authority to curtail said practices under the Toxic Substances Control Act (TSCA). Instead, they unanimously agreed with Inhance that the EPA overplayed its authority by invoking the wrong section of the TSCA. 

Their rationale essentially being: “they’ve been polluting for years, so why stop them now?”

When the EPA began more heavily regulating firms for their significant new use of PFAS chemicals, Inhance sued the agency on the grounds that their fluorination processes were decades old rather than “new.” The company also argued that while their knowledge of fluorination-produced PFAS was new, the actual chemicals were not, therefore the EPA could not enforce its prohibition under Section 5 of the TSCA. This section, besides granting the EPA regulatory authority over new chemicals, allows the agency to more easily bypass market concerns (such as potential harms to Inhance’s viability as a business) when barring firms from producing chemicals that pose a threat to human health.

Should the EPA wish to proceed with prohibiting Inhance’s fluorination processes, it would have to use its TSCA Section 6 authorities which, while broader, entail a more significant rulemaking process by “requir[ing] the EPA to conduct a cost-benefit analysis, weighing the negative effects of the chemical substance against the benefits of the substance and the economic consequences of prohibiting or limiting the substance.”

This case, while significant in and of itself, is a great illustration of the lengths PFAS-producing firms are willing to go to defend their ability to pollute. As we’ve written before, including in last week’s newsletter, many of the same corporate polluters fighting against stricter PFAS regulations are simultaneously trying to sell the public on “green” hydrogen. Regulators and lawmakers alike must look past these hollow promises and more carefully scrutinize extractive firms trying to score easy public relations points at the expense of genuinely climate-positive actions.

New Budget Deal Accelerates Attacks On IRS

The budget negotiations drama that has dominated headlines for the past half-year finally came to a close on Saturday when President Biden signed a $1.2 trillion spending bill into law. To recap: earlier this month, Congressional Democrats and Republicans struck a last minute deal to the tune of $426 billion to fund about half of the government (including the departments of Agriculture, Justice, Transportation, Housing and Urban Development, and Veterans Affairs). Saturday’s “minibus” funds the rest—departments of Defense, Homeland Security, Trade, Labor, State, Treasury, Health and Human Services, and Education—thus eliminating the threat of government shutdown for the remainder of the 2024 fiscal year (i.e., through September 30th). 

And while an open government is obviously better than a closed one, elements of this latest spending law ensure that certain parts of the government will run at a reduced capacity. This is certainly true for the Internal Revenue Service (IRS) whose funding is set to take a sizable hit between now and the end of September. 

As part of the debt ceiling negotiations last June, Republicans were able to claw back $20 billion of the $80 billion funding boost to the IRS stipulated in the Inflation Reduction Act. Those clawbacks, originally split between the 2024 and 2025 fiscal years, are now set to go into effect in their entirety this fiscal year.  

Attacking the IRS makes absolutely no sense given how much Republicans claim to care about deficit reduction. IRS Commissioner Daniel Werfel, citing Treasury Department data, recently warned that “for every $100 million taken from the IRS, the deficit grows by $600 million over 10 years.” Likewise, GOP attacks on the agency also contradict the party’s supposed commitment to smart spending. As my colleagues Eleanor Eagan and Hannah Story Brown pointed out in Democracy Journal, “funding the IRS brings in significantly more money than it costs. Although there is debate about the exact order of magnitude of this return on investment—with estimates ranging anywhere from three to six times—there is widespread agreement that it is positive and large.” How, you may ask? By allowing the agency to more adequately clamp down on wealthy individuals whose tax evasion accounts for billions in lost revenue each year. 

The Biden administration is already taking steps to reverse the $20 billion extraction as part of its 2025 budget request; it is imperative that more of our political class join him in defending the IRS.

Follow the Revolving Door Project’s work on whatever platform works for you! You can find us on that website formerly known as Twitter, Bluesky, Instagram, and Facebook

Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:

Amicus Spotlight: FDA v. Alliance for Hippocratic Medicine

Take the Input of Polluting Liars for What it is Worth (Nothing) 

Tim Ryan’s Natural Gas Advocacy Makes a Mockery of Public Service

Why Biden Should Pardon the IRS Whistleblower Who Leaked Trump’s Taxes

The Self-Funding ‘Victim’ of the Criminal Justice System

The Committee for a Responsible Federal Budget’s Bad-Faith Criticism of Biden’s Budget Proposal

Crypto Is Hoping You Won’t Notice Their Redoubled Influence Campaign

Wall Street and Silicon Valley Elites Are Warming Up to Trump

The Companies Who Brought You Forever Chemicals Now Want to Sell You on Hydrogen

RealPage Enlists Ex-FTC Revolvers From BigLaw Firm Gibson Dunn To Fight Tenant Lawsuits

Climate and EnvironmentCorporate CrackdownIRS

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