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GOP gives more power to federal government

States blocked on industry rules

WASHINGTON -- Despite having made a commitment to return power to the states, the Bush administration and the GOP- controlled Congress are using legislation and the legal system to quash state efforts to regulate industry, a trend state officials say is weakening hard-fought efforts to protect the health and safety of their constituents.

New and proposed federal rules or laws would overturn California's ban on a vaccine preservative some think contributes to autism, and would block any state's efforts to control small-engine emissions. New England would be thwarted in its efforts to control pollution wafting over from other states, while Massachusetts and California would not be able to keep unwanted liquefied natural gas terminals from their shores. A recent banking rule change severely limits the impact of state laws intended to protect consumers from shady banking practices.

Policy makers in the administration and Congress say they are merely making rules uniform and easier to follow. With so many companies doing business across the country, they say, it is unfair and impractical to expect industries to keep track of 50 different sets of regulations. ''The president, as a former governor, strongly believes in states' rights," Bush spokesman Trent Duffy said. But ''there are certain powers reserved for the federal government" that it must keep, he said, especially in areas involving interstate commerce, energy, regulating medicine, and homeland security.

But critics see a powerful assertion of federal authority in those areas and others by a government controlled by one party. While conservatives have traditionally supported states' rights and the decentralization of government, the Bush administration and congressional leadership are moving jurisdiction over laws and regulations back into the federal sphere, according to government scholars and state attorneys general.

The result, attorneys general say, is that some Americans will have less consumer protection and less safe environments -- and states won't be able to do anything about it. ''It's a whole pattern of accumulating power in Washington [through] federal agencies that is more extensive than any administration in the history of this country," said California Attorney General Bill Lockyer, a Democrat who has been fighting the Bush administration over California laws involving energy, banking, access to abortion, and air quality.

California is a leader among the states in setting tighter rules for consumer products and air quality. Its Proposition 65, for example, requires manufacturers to notify citizens if a product has toxins or is carcinogenic. A Lockyer spokesman said several applications of that law could be wiped out if Congress passes the Protecting America in the War on Terror Act, which includes preemption of state laws on drug regulation and labeling. Further, California's unique laws on motor emissions have been rolled back already because of an amendment Congress tucked into a spending bill last year.

Deregulating industrySome of the federal preemptions are aimed at social issues, like abortion and gay marriage. But consumer advocates and state officials are more worried about the lesser-noticed rule changes aimed at reducing industry regulation -- changes the local officials say could harm the health of their citizens.

For example, two states have passed laws controlling the use of vaccines that contain thimerosal, a vaccine preservative that includes a form of mercury, a neurotoxin. While there is disagreement over the cumulative effects of thimerosal exposure, several states -- including Massachusetts -- are considering legislation that would ban the substance from vaccines given to pregnant women and children.

Those laws would be vacated under a Senate proposal, which says no state can enact or continue any law that differs from federal rules governing drug regulation and labeling. Backers of the federal legislation say the government needs to be able to administer vaccines to the masses in case of a bioterrorism attack and can't be frustrated by such state bans. But parents of autistic children say the language has little to do with fighting terrorism and more to do with protecting the politically powerful pharmaceutical industry.

''We think it's wrong. We think it's reprehensible," said Robert Krakow, who heads an organization for autistic children. ''It's a brute exercise of federal authority to keep the objective of keeping mercury in vaccines."

While the Centers for Disease Control says it has found no credible evidence linking thimerosal to autism, the FDA, noting the possible health dangers of mercury products, has discouraged vaccine manufacturers from using the preservative.

''My guess is that they may be doing it for industry concerns," said Massachusetts House Republican leader Brad Jones, chief sponsor of the Massachusetts bill, referring to Congress's support for pharmaceutical companies.

Defenders of the wave of federal preemptions say the efforts do not represent an ideological shift, but are targeted to rein in rogue states. Post-9/11 national security concerns also call for federal action, they say, such as having one federal standard for drivers licenses -- allowing law enforcement to track down suspected terrorists more easily.

''You cannot look at all of these issues as being driven by an ideological" agenda, said Senator John E. Sununu, a New Hampshire Republican whose commitment to local control led him to vote against the constitutional amendment banning gay marriage. He said in some regulatory cases, it makes sense to have a national standard when there is interstate commerce involved.

But consumer advocates and state officials in both parties accuse them of pandering to corporations and violating a basic tenet of conservative political philosophy: states' rights. ''There's a vacuum going on in the country right now, and you're seeing the states step up and take enforcement action in areas where the federal government has been unwilling or unable to do so," said Massachusetts Attorney General Tom Reilly. ''What we're seeing now is the federal government trying to preempt that action on the part of the states. It's a dangerous action. If states are not allowed to step in, the people may have no recourse."

Conservatives' shiftStates' rights -- a politically loaded term once used as a pretext to block civil rights laws in the 1960s -- is still invoked by conservatives pledging a commitment to decentralized government.

''I've sat where you're sitting and I know what it's like to have a good idea, and then to wait on the federal government to tell you whether you can try it or not," President Bush said in a 2001 White House address to governors. ''Let me make this pledge to you all. I'm going to make respect for federalism a priority in this administration . . . The framers of the Constitution did not believe in an all-knowing, all-powerful federal government. They believed that our freedom is best preserved when power is dispersed."

But many who study the government think Bush has expanded federal power, not reduced it. Ernest Young, who teaches a federalism course at Harvard Law School, said conservatives' ideological bent toward states' rights has receded as they have taken control of the US government.

''It's not surprising that the people who run the federal government now want to maximize federal government power," Young said. ''There's been more ideological commitment to decentralization in the Republican Party, but most of that developed during a period when they thought they were going to be out of power."

Congress and the administration have already succeeded in advancing their agenda on social issues such as abortion and school testing by limiting state control in those areas. California faces the loss of a projected $49 billion in federal aid because of an amendment enacted last year denying federal funds to states that discriminate against healthcare providers that refuse to provide abortions. California, which is challenging the federal rule in court, requires hospitals to provide ''emergency" abortion care.

But it is the deregulation of business that has most upset consumer advocates, trial lawyers, and attorneys general. And such changes are often done under the radar screen -- for example, as a little-noticed attachment to unrelated legislation, or as a policy change done by a federal agency.

Environmental changes In an omnibus spending bill approved late last year, lawmakers inserted language that takes away states' rights to control lawn mower engine emissions -- a seemingly small change in late 2003 that environmentalists worry will be used to undermine broader state authority to control air pollutants.

Lawn mowers and other small engines emit pollutants, and states want to be able to set stricter standards so they can improve air quality. States are also required, under federal law, to reach certain ''attainment" levels on air quality, and small-engine control was one tool California used to accomplish that goal.

But Senator Kit Bond, Republican of Missouri, won approval of an amendment making it illegal for states to regulate small engines, a move he said was meant to protect the jobs of workers at Briggs & Stratton, a small-engine manufacturer in his state. Allowing states to toughen small-engine standards ''would have driven 22,000 jobs" out of the United States, Bond said in an interview. ''We have a national system" to regulate small-engine pollutants, he said, adding it is ''unacceptable" that ''California can force Missouri and other states to do what we don't want to do."

States are also fighting efforts to block them from controlling automobile emissions, a key tool in meeting US-mandated air quality rules under the Clean Air Act.

While the EPA generally sets air-quality standards, California is allowed under the law to set its own, stricter standards for automobile emissions because the state already had laws in place when the Clean Air Act was approved. Other states were allowed to adopt their own standards as well, but only if they exactly mirrored the California rules.

Automobile manufacturers are seeking to get the California exemption killed, which would mean no state could pass more restrictive regulations to control air pollution -- alarming both Democratic and Republican governors, who fear they will lose the tools they need to control air pollution.

Governor Mitt Romney joined other Northeastern governors in a recent letter to Congress opposing any watering-down of states' authority to tighten standards. California Governor Arnold Schwarzenegger has also pleaded for the continued rights of states to set stricter air pollution controls.

''It is the 1970s in reverse. Then, the feds stepped in with more stringent standards than the states to ensure that the environment was protected," said Steve Hinchman, a staff attorney with the Conservation Law Foundation in Maine. ''Now, as states get ahead of the federal government, they're stepping in to protect industry at the expense of people who are forced to breathe this air."

The US government has also intervened to halt Massachusetts' oil spill law, a measure Romney signed in response to the Buzzards Bay spill in 2003 that killed wildlife and forced the temporary closing of the area's shellfish beds. The law imposes rules on barge operators to ensure they navigate safely.

But in what Massachusetts officials say is a highly unusual intervention, the Justice Department is suing the Bay State to overturn the law. Normally, an industry would sue to get rid of a regulation, but the legal attack by the US government is virtually unprecedented, said Representative Barney Frank, Democrat of Newton.

Massachusetts and California have been trumped in their efforts to keep liquefied natural gas terminals from their coasts. State officials say the terminals present an environmental hazard, and argue that the government should do a site selection study to determine whether those locations are the best places to put the facilities.

But Congress slipped a line into an omnibus appropriations bill last year, which Bush signed into law, that says federal regulators have the right to override state and local authorities in deciding where LNG terminals should go. A sweeping energy bill passed in the House would outright preempt states' abilities to block an LNG terminal.

An amendment stuck into the energy bill would preempt all state laws dealing with energy efficiency standards for ceiling fans, a rule that would help distributors such as The Home Depot.

The Bush administration and supporters in Congress are also trying to take away the authority states have to control pollution wafting over from other states. The current Clean Air Act allows states to petition the EPA for tougher regulations if air pollution is traveling from other states into their own environments -- a common problem in New England, which environmental experts call ''the tailpipe of the nation" because weather patterns shift other states' air pollutants there. The Clear Skies initiative, now stymied in Congress, would take away states' rights to petition the EPA for action against other states.

Bank laws debatedState laws regulating banking are also imperiled because of a Bush administration rule to loosen the grip of state consumer- protection laws over federally chartered banks. Through a little-publicized letter issued last year by the Office of the Controller of the Currency, the US government dramatically curtailed what states can do to protect its citizens from federal bank abuses.

The rule has state officials nervous that some of their consumer- friendly laws -- such as Massachusetts and North Carolina laws against predatory lending, a practice under which a bank tricks a consumer into signing on to a higher interest rate -- will be far less effective.

The Office of the Controller of the Currency says federally chartered banks don't have to abide by all state regulations regarding banking. And in cases where federal banks do need to play by state rules, the controller's office said, it will be the federal government that enforces the laws.

Further, the controller's office sent a video pitch to state-charted banks, encouraging them to join the federal system, in which they would not need to adhere to all state banking laws.

While attorneys general say the full impact of the controller's letter is still playing out, they are worried that the federal office does not have the staff or expertise to answer consumer banking complaints related to 50 different sets of state banking laws.

''It's frightening. And it's mind-boggling. There's no way they can handle every complaint, from the smallest credit card dispute up to the sophisticated kind of predatory lending practice," Iowa Attorney General Tom Miller, a Democrat, said in an interview.

Massachusetts is now in court over a federal-state banking dispute. Reilly is suing Simon Property Group, Inc., a mall developer that issued gift cards that expire after one year and incur fees after six months -- conditions that go against Massachusetts law that says gift cards must be good for seven years. Simon is arguing that because the cards are issued by a federally chartered bank, the gift cards aren't subject to state regulations. The matter is still pending.

Dean Debuck, a spokesman for the Office of the Controller of the Currency, said it was not fair to expect a federal bank to follow all the laws of the many states in which it might operate. ''Basically, we feel that our banks are subject to federal law, not state law. That's sort of the bottom line for us."


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