[00:00] Bryan Hyde: Welcome to the Health Policy Podcast. I'm Brian Hyde. We're happy to welcome Pete Sepp, President of the National Taxpayers Union, back to our program. Pete, wonderful to have you on board. For those who are meeting you for the first time, take just a moment to introduce yourself and tell us about your, your work and your background. [00:17] Pete Sepp: Certainly. I'm President of National Taxpayers Union. We're a nonprofit, nonpartisan citizen group founded in 1969 to work for lower, fairer, simpler taxes, less wasteful spending, spending at all levels of government and economic freedom for all taxpayers. We certainly have our work still cut out for us. And because we're a nonpartisan organization, we have pretty much members of both political parties and some third parties angry at us at any given moment. [00:52] Bryan Hyde: That's a sure sign you're doing something right. We're, we're, we're gonna Pete, today we're going to spend a little bit of time talking about chemical policy. And in particular, I want to lead off with, for those who aren't aware, Washington State has been working to regulate so-called PFAS chemicals. And we'll explain more about what those are. But I want to, I want to kind of set the stage here in terms of when it comes to regulation of chemicals. First of all, I would guess this is not on a lot of people's radar screens unless They happen to work in chemistry or work within one of the chemical industries. But to put this in perspective, how much does this affect our day-to-day lives when at any level, be it the state level or the federal level, regulators start making policy about which chemicals can and cannot be used? [01:44] Pete Sepp: Oh, it certainly does affect everyone's lives every single day. I can tell you there was that old slogan that must have been in the 1980s by one of the chemical companies that Was how did it go? Without chemicals, life itself would be impossible. And I've kind of adapted that to say that without chemicals, life for taxpayers would be a lot more expensive. That's why we have such an interest in chemical regulation policies on several levels. Of course, there's direct taxation. The fact that in the Infrastructure Investment and Jobs Act of 2021, there was a reservation directed excise tax. They call it the Superfund excise tax on dozens of chemical substances. Well, in typical Washington fashion, it really didn't go into Superfund, the entity that cleans up environmental problems. It was actually collected as an offset for higher spending elsewhere in the bill. It's not collecting as much as was thought because it's done a horrible disincentive effect on industries that are trying to produce more chemicals domestically. I mean, the flaws go on and on, but that's just one concern taxpayers have with chemical regulation policy and tax policy. And when you get right down to just the regulations, separate out anything having to do with Superfund taxes or other types of business taxes, The more we regulate various substances to the point where they become unaffordable, unusable, the more we get into questions of, well, how are taxpayers going to make up the difference? I mean, when the healthcare industry uses so many of these substances and everything from IVs to patient cleanup areas to diagnostic tools, and the substances that go into those things become more expensive, well, you're passing along the buck to Medicare, Medicaid, veterans health programs, all of which are funded by taxpayers. [04:11] Bryan Hyde: I'm guessing that a lot of taxpayers, not through any fault of their own, have blinders on though, as far as how chemical policy affects them. In other words, when we hear, let's say at the national level, the EPA is concerned about this chemical or that chemical, we immediately conclude, well, it must be because these are dangerous chemicals and we don't want those in our drinking water. And, and so therefore, you know, this must be a good thing. But it sounds like we may be missing a lot of the bigger picture. Can you help fill in some of those gaps? Right. [04:41] Pete Sepp: Nobody wants dirty air. Nobody wants water that they can't drink. And so the EPA and state environmental agencies, right on down to local governments that run the water and sewage plants, they all have important role in ensuring that our environment is clean enough for all of us to live in and thrive in. The problem comes in when subjective judgments get made, not based on scientific evidence, not based on good economic cost-benefit analysis, but on something that many of us call the precautionary principle, meaning if there is Any degree of risk in a given chemical, even if it occurs naturally in the environment, any degree of risk, the answer among some regulators is unfortunately we have to ban it or we have to make it impossible to afford or we must eliminate every single trace of the substance from the environment. Again, even if it's already occurring naturally. That's where the problems really begin to pile up for taxpayers and everyday Americans who are depending upon a more balanced approach. [06:03] Bryan Hyde: I would think there would even be, you know, just in the warning aspect. And I say this based on— I've lost count of how many products I've purchased that have that obligatory California has determined that this contains chemicals that may cause cancer or something like that. And I While I appreciate them looking out for me, sometimes I wonder if there's an overabundance of caution on their part. [06:24] Pete Sepp: Well, there can be. And interestingly enough, one of the issues that we want to discuss here today about this substance called PTFE in cookware, that's an example of it. And it directly relates to California, where Governor Newsom, of all folks, who is certainly no piker when it comes to heavily regulating chemical substances has said there's no fire here. There's not even enough smoke here for Washington State, which is just north of California, to try and ban or regulate close to out of existence the PTFE cookware that is currently under issue by one of their regulations. I have to caution, we could, of course, say all of these chemical words, which would probably add about a half hour to this podcast. So we're using a lot of acronyms here as shorthand. You really have to in a very complex industry and scientific area as this one. [07:35] Bryan Hyde: Well, and when we hear terms like forever chemicals, which I've, I've heard used to describe the PFAS, you know, group of chemicals, on its surface, that actually sounds a little bit alarming. Forever? Oh man, that you can never get rid of it. But there are some of these things that are actually very beneficial. And it's It's good that they are long-lasting. [07:53] Pete Sepp: That's right. And when you think about it, formaldehyde, for example, is something that those of us who took high school level biology are probably familiar with, the preservative that kept, you know, those frogs in the jars that we used to dissect. The problem is formaldehyde actually occurs naturally. It too can be a forever chemical because it is always in our environment. It is always part of our ecology. That's not necessarily something to fear. Obviously, super high levels of formaldehyde can be poisonous to life. But if it's already in the ecology, we need to acknowledge that and say, okay, knowing that, How much is a safe level? How much is a harmful level? Saying under a precautionary principle, we can't have any level of it, is where we get into trouble. [08:55] Bryan Hyde: Let's go back for a moment to California's push to ban, you know, certain chemicals in, for instance, nonstick cookware. First of all, I'm curious who was pushing that ban. I guess they actually passed it. And then I have to marvel, like you had pointed out, And why, why did Governor Newsom go ahead and veto it? [09:14] Pete Sepp: Well, there are a lot of environmental organizations out there who may mean well in some cases, but often take that precautionary principle we've discussed to a level that reaches absurdity, that doesn't recognize real-world problems like how are we going to replace the substance when maybe None of it exists. There is no replacement that we can come up with, at least not in the near term. Or how do we afford to implement these regulations and balance them against the fact that people at the everyday level might be benefiting from them? And that's why Governor Newsom actually vetoed a bill that was sent to him to ban this PTFE substance in cookware, because he said, California's retail shelves would be horribly affected to the point where there would be so many consumer goods that people would no longer have access to. You would get affordability problems, especially among moderate-income households. So he took a very practical approach to say, well, maybe we're going overboard here and maybe we need to focus on other types of environmental problems that we can address more responsibly. [10:37] Bryan Hyde: Pete, what about Washington State? My understanding is they were not going to go quite as far as California lawmakers were going to go, but nonetheless, they had the, those same cookware concerns, you know, in their sights. [10:50] Pete Sepp: Yeah, they did. And there's an outfit called the Cookware Sustainability Alliance. These are consumer advocacy groups, some manufacturers, and the like who are speaking out and saying, look, this chemical substance PTFE that's used in nonstick cookware is a compound related to a bigger forever chemical called PFAS. But that doesn't mean it is PFAS in the worst possible sense. It doesn't mean that if used properly, it can't be a valuable addition to the typical household. And used properly is the operative term here. I mean, I'm sure there are at least half a dozen items on my table that I could eat right now, forever, until I died and get a disease from it. I mean, I could take apart this remote and start chewing on all of the pieces and consume that solely. and it would probably be poisonous to me, or I could get cancer from it. That doesn't mean that it isn't a useful implement if used properly. That's the whole point to it. And I think that's where Washington State's regulations are really going overboard here. They're simply saying that PTFE, PFAS, they both sound the same. We're going to regulate them the same. We're not going to have any tolerance for its presence in various appliances that are fine as long as you don't misuse them. We're just going to ban them entirely. That's the wrong approach. It's a costly approach. [12:41] Bryan Hyde: So on the one hand, we could take it to the extreme of it's every man for himself, you know, no chemicals regulated, no chemicals banned. You know, you just— you're on your own there. Or Let's talk about some of the policies, be it at the state or national level, that would actually benefit taxpayers without being overbearing and laying undue burdens on them. [13:03] Pete Sepp: Yeah, I think we have to start with good self-regulation. For one thing, Underwriters Laboratories, for example, is an example of a self-regulating organization, an SRO that polices an industry that agrees to certain standards that it will abide by, or its members within the industry will get disciplined. We, we need to keep those kinds of organizations strong and in place. Meanwhile, the programs that the government does run need to have solid public trust in them. There's a program that the Environmental Protection Agency Agency has for developing chemical regulations. It's called the Integrated Risk Information System, or IRIS. Here's another acronym for you. IRIS is supposed to be driven by scientific evaluations of the safety of various chemical substances. Industries apply for an IRIS assessment. In other words, a green light to use them in various products. Well, if the IRIS process is tainted by politics or it gets outside of good cost-benefit analysis or scientific analysis, the public trust begins to erode. And so when the agency comes forward with a genuine warning about a very serious threat to the environment, people may not listen, and that would be a tragedy. We need to have a credible IRIS. I also think that Congress can get involved. There's a bill called the Regulatory Early Notice and Engagement Act, and that would require an agency to publicly justify in detail the need for a new regulation within a week of proposing it, as well as specify any alternatives, such as a different kind of rulemaking. I mean, this would be real progress, I think, in involving and engaging the public early in these regulatory decisions and giving them more credibility. Frankly, the more people who have eyes on it and the more people who have a voice in its formation, the better it's going to be, the more buy-in you're going to get. [15:32] Bryan Hyde: Talk to me about the Superfund excise tax hike. I've been hearing about the Superfund since I was a kid, at least I think it goes that far back. What does it do? And why is it time for Congress to step in and repeal that excise tax hike? [15:47] Pete Sepp: Superfund was established a good 40, no, more than 40 years ago to help clean up terrible toxic waste sites that had been the result of the private sector and in some cases, the public sector basically dumping materials into landfills that had not been properly disposed of, or not even landfills, just open sites that did not have permission for dumping on them. Some of them are so toxic that even going near them unprotected would present a very serious health risk to anyone doing so. Superfund was set up to start cleaning up those sites, in a very comprehensive manner. And part of the effort was funded by an excise tax. Well, part of the excise tax was allowed to fall away as Superfund began achieving its mission. Certainly not perfectly. Superfund had been cited quite a number of times for being an at-risk project by the Government Accountability Office. And Government Accountability Office audits all kinds of agencies throughout the federal government for waste, fraud, and abuse. Superfund was a big candidate for that. Well, along comes the Infrastructure Investment and Jobs Act of 2021. That's a bipartisan bill. It was designed at a time when the economy was on very shaky ground. Lawmakers got together and said, we can all agree we need better infrastructure in this country. Let's create a trillion-dollar-plus bill that would build more roads and more transit and the like, get America moving again. Well, there was plenty of wasteful spending in that bill. And one way to keep the price tag from adding to the federal deficit even more than it did was to raise revenue. And someone got the bright idea of resurrecting the Superfund excise tax, this time not to clean up toxic waste sites, but to fund the other spending in the bill. So it began on a very flawed, I would say false premise. They continue to call it the Superfund excise tax, but it's really got nothing to do with environmental cleanup. [18:17] Bryan Hyde: Speaking of forever things, it's one of those that just won't go away. Where would you direct people? Let's talk a little bit about your website, the National Taxpayers Union, so they can get a better feel for the specific tax policies that are aimed at chemicals, as well as the work that your group is doing to, to make sure the taxpayers aren't overly burdened. [18:37] Pete Sepp: Sure. Anyone interested in our work can visit us online at NTU, our initials for National Taxpayers Union, NTU. You'll find information on reforming chemical regulation policy, the Superfund excise tax, energy and healthcare policy. Actually, all of these things are interrelated, which is why taxpayers need a representative like us in Washington and in state capitals to make sure their interests are represented, even when an comes up that doesn't seem like it's directly connected to them. [19:18] Bryan Hyde: Again, we are talking with Pete Sepp. He is president of the National Taxpayers Union. Pete, once again, thank you for joining us here on the Health Policy Podcast. [19:27] Pete Sepp: My pleasure.