Obama backs down over plans to impose cleaner air laws

Environmental campaigners accuse President of caving to big business

In a surprise move which risks consolidating the growing perception of him as a back-down, back-off leader, President Barack Obama announced yesterday he was giving up his plans to impose stricter air quality regulations for fear it would add to the country's economic and employment woes.

Waving the white flag to the business lobby and to Republicans who had vowed to make the new ozone rule a litmus-test issue in 2012, Mr Obama instructed the administrator of the Environmental Protection Agency, Lisa Jackson, to scuttle impending regulations designed to tighten standards set by the Bush White House in 2008 that had been labelled too lax by many environmental scientists.

It came as employment data released yesterday showed job creation in the United States during August had essentially hit the buffers, further darkening the economic horizon. The grim results, which left the unemployment rate at 9.1 per cent, were far short of what Wall Street had expected.

In a letter to the House Speaker, John Boehner, earlier this week, Mr Obama conceded imposing the standards would have cost the economy between $19bn and $90bn. Eric Cantor, the majority leader in the House of Representatives, said it would also cost the country millions of jobs over ten years.

It appears Mr Obama saw himself in an impossible vice squeeze. While he has championed the environment, he also knows that the right was preparing to attack him for failing to respond to the joblessness crisis by lifting regulatory burdens and easing uncertainties for businesses.

He may also be calculating that his retreat, which is sure to weaken support inside his already disappointed liberal base, will help him win at least a hearing from Republicans when he unveils his long-promised blueprint for jobs creation in a rare address to a joint session of Congress next Thursday.

The reaction from the environmental lobby was predictably swift. "The Obama administration is caving to big polluters at the expense of protecting the air we breathe," said Gene Karpinski, president of The League of Conservation Voters. "This is a huge win for corporate polluters and huge loss for public health."

It is also a humiliation for Ms Jackson at the EPA, who had taken the advice of her own scientists in setting a new ozone limit of between 60 and 70 parts per billion in a place of the 75ppb set by George W Bush. She nonetheless pointed to other achievements under President Obama, for instance on curbing carbon emissions from vehicles and cutting mercury pollution from power plants. "This administration has put in place some of the most important standards and safeguards for clean air in US history," she contended.

For his part, Mr Obama tried to pre-empt the criticism he knows he will face. "I will continue to stand with the hardworking men and women at the EPA as they strive every day to hold polluters accountable and protect our families from harmful pollution," he said.

But he stressed that in the end he had been guided by the prospect of another stall in the economy. "I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover," he added.

Politically, he may have stolen one of the sharpest arrows from the Republican quiver. Mr Cantor last week wrote that the standards change promised to be a "jobs killer" for the country. "This effective ban or restriction on construction and industrial growth for much of America is possibly the most harmful of all the currently anticipated Obama administration regulations," he said.

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