True Permitting Reform Requires Congressional Action

James Carville famously advised Bill Clinton that regarding elections, “it’s the economy, stupid.” This message has resonated with all presidential candidates since. So, it is no surprise that as the 2024 election approaches, President Biden appears to be banking on $1.6 trillion in new spending—much of it infrastructure spending—to stimulate economic growth. These funds have been authorized by numerous laws, including the 2021 pandemic stimulus package, the infrastructure law, the CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science law, and the Inflation Reduction Act. However, to date, only a small fraction of the funds authorized by these laws have actually been spent. While one could expect bureaucratic delays in government spending, one hurdle is only going to get worse, and that is permitting.

Permitting has long been a significant roadblock to advancing infrastructure projects. In fact, I addressed this issue back in March of 2020, shortly after the pandemic closed down much of the economy and many were calling for infrastructure spending to provide an economic boost. I argued then that if the federal government wanted to initiate infrastructure projects as a means to stimulate economic activity, permitting reform—specifically, National Environmental Policy Act (NEPA) reform—would be needed to ensure appropriated funds would actually be spent.

In July 2020, the White House did just that. After taking over a million comments into consideration, the Council on Environmental Quality (CEQ) issued NEPA reforms that, among other things, shortened the acceptable length of environmental impact statements (EIS) and environmental assessments (EA) that would be prepared in accordance with NEPA permitting, established shorter presumptive timelines for agencies to complete their review of permit applications, and better coordinated reviews among multiple agencies.

In 2022, the Biden administration issued clarifying regulations that highlighted climate impacts as requiring special attention in NEPA-related permits, again adding to the regulatory burden. Now, just two weeks ago, they doubled down, issuing NEPA Phase 2 regulations that add burdens for projects that are not favored by this administration. For example, the new rule adds significant requirements regarding public engagement and makes categorical exclusions, which are an extremely important tool for speeding up permitting reviews for projects similar to those that have been undertaken before, more difficult to obtain, especially for projects that are not considered “green.”

Not surprisingly, Congress is pushing back. Congressman Garrett Graves (R-La.), along with Senators Joe Manchin (D-W.Va.) and Dan Sullivan (R-Alaska) are considering a Congressional Review Act vote to overturn the new NEPA Phase 2 rule.

So, when does this back-and-forth end? If Trump regains the White House in January 2025, he is certain to issue new rules undoing what President Biden has done and reinstating his own 2020 rule. And so, it will continue each time there is a change in the party holding the White House. So, how do we establish consistent permitting reform? Clearly, there is a need for Congress to step in, and establish firm policy in law that will be durable and not be changed at the whim of whichever party holds the White House. It should ensure that projects are treated similarly, ensuring a prompt review of all projects, rather than picking and choosing which ones get expedited treatment. That would be true permit reform that both sides of the aisle could support.

Kyle Isakower is senior vice president of Energy and Regulatory Policy at the American Council for Capital Formation.