When it rains, it pours, and small businesses can’t afford the resulting flood. That’s the reality of the Biden administration’s latest “Waters of the United States” (WOTUS) rule, which the Environmental Protection Agency rolled out just before the start of the new year. This mandate is a brazen example of federal overreach, issued despite several reasons to delay, and surely no one will suffer more than America’s smallest ranchers, farmers, and home builders.
WOTUS is utterly devoid of legal justification, as attorneys general from 24 states have made clear in a new federal lawsuit. It’s supposedly based on the 1972 Clean Water Act, which gave the EPA jurisdiction over “navigable waters.” That clearly doesn’t mean any water, anywhere; yet the EPA is sprinting in that direction. The Obama administration rolled out a similar mandate in 2015, only for the Trump administration to restore a rule that accurately reflects the law. But now the Biden administration is doubling down on control, adding an unprecedented burden to small businesses that own and use land with almost any water on it.
The new mandate has these property owners wondering if they need to get federal permits before moving forward with even the most basic upgrades and investments. If a farmer or rancher wants to fill a ditch that floods when it rains, do they have to ask the EPA? If a home builder wants to build a home on land with a small stream that runs for only a few weeks each spring, do they need to jump through a costly series of government hoops?
The rule gives no clear answer because it doesn’t define what waters are covered. The EPA only goes so far as to say it controls property that has a “material influence” on navigable waters. Figuring out what that means can only happen on a case-by-case basis, which leaves small businesses with profound uncertainty. They have no way of knowing if the verdict for one business will be the same for them. And finding out will mean hiring pricey consultants and lawyers, eating up vital resources.
When such uncertainty over water reigns, investment dries up. That farmer isn’t going to plant a new field to help feed more people. That rancher isn’t going to build a new pen to grow their herd, and they won’t create any additional jobs for their community. That home builder isn’t going to break ground on the houses their city desperately needs. In short, the EPA is building a dam that will constrain a huge part of the small-business economy.
What if a small business does need a federal permit under the new mandate? Well, then they have to pay for the privilege, in both money and time. A 2002 study found that Clean Water Act permits cost an average of $270,000 and take more than two years to obtain. If anything, those staggering costs have grown in the intervening years, and small businesses naturally struggle to afford them.
We’re talking about family-owned farms and small businesses that are already dealing with inflation, supply-chain issues, and labor shortages. They need that money to keep the lights on and their workers paid. They don’t have the time to argue with the feds. It’s just one more powerful and painful way the new EPA mandate will stifle the growth of our country’s small businesses.
These problems were easy to foresee, and the EPA is required by the Regulatory Flexibility Act (RFA) to consider the direct impact its actions have on small businesses. Of course, the EPA ignored this law in hopes that nobody would notice and that they could pigeonhole this rule into a very narrow exception. Laughably, the EPA’s final rule states that “this rule will not have a significant economic impact on a substantial number of small entities.” Ask America’s farmers, ranchers, home builders, and golf-course owners what economic impact this rule will have. You will get a different answer.
What’s more, the agency raced to finalize this mandate even though the Supreme Court is currently deciding a case that could directly render it null. Between now and June, the Court will issue its ruling in Sackett v. EPA, which deals with the Clean Water Act’s definition of “navigable waters.” You’d think such a consequential case would have caused the Biden administration to pause before adding to the ambiguity. But typical of Washington, D.C., bureaucrats, the EPA instead rushed to issue this ill-advised and harmful rule. Such impatience is imprudent, especially given the damage it’s already doing to small businesses.
This mandate should be seen for what it is: anti–small business, anti-growth, and anti-freedom. It’s too late to stop the Biden administration from issuing it, but it’s not too late for Congress to repeal it, or the Supreme Court to overturn it.
* Article from: The National Review
