JIM LEHRER: Now, Margaret Warner has our Newsmaker interview with the new head of the Environmental Protection Agency.
MARGARET WARNER: Utah's Republican Gov. Michael Leavitt took over as EPA administrator in early November. Since then, his agency has made two proposals to reduce air-polluting emissions from power plants. One draft regulation sets reduction targets for sulfur dioxide and nitrogen oxide, and lets dirtier plants buy credits from cleaner plants as long as overall industry targets are met. The other sets up a similar system to cut mercury emissions, and rescinds an earlier EPA finding that mercury was so dangerous that every plant had to make the deepest possible cut. With me to discuss these and other issues facing the agency is Administrator Mike Leavitt. Welcome, Administrator Leavitt.
MICHAEL LEAVITT: Thank you, Margaret.
MARGARET WARNER: Welcome to the program. Let's start with the most controversial issue in the six weeks since you have been on the job and that is this mercury regulation. What are you trying to do here?
MICHAEL LEAVITT: Mercury is a dangerous toxin. It needs to be reduced and for the first time we'll be reducing mercury emissions from power plants, which is the largest source, by creating a cap-and-trade system which is the same system that we used to reduce acid rain. It's part of the largest single investment ever made in air quality improvement and we intend to make that over the next 15 years. We'll reduce it by 70 percent over the next 15 years.
MARGARET WARNER: Now, as you know, the Clinton administration proposal or approach was to keep it this category of ultra toxic chemicals and to reduce it more dramatically and more rapidly something like 90 percent in five years. What is wrong with that?
MICHAEL LEAVITT: Actually, we're not changing the category in any way. Some perspective: The Clinton administration had an obligation to act on mercury. They were four-and-a-half years late in acting on it. And ten days before they left office, they concluded it needed to be reduced and that the next administration on December the 15th would act and define what the levels should be. So we are moving forward now, despite the fact that they were four-and-a-half years late, and we're going to be regulating it for the first time in history. We do regulate mercury in other places but from power plants. We're making it part of a larger scale initiative to have the single largest reduction or the single largest improvement in air quality in the last decade except for acid rain, which was a big success. And we're going to use essentially the same system. This is the largest single investment in air quality that this nation has ever made.
MARGARET WARNER: But as you know the environmentalists say actually this cap-and-trade system is fine for the other chemicals, the smog-producing ones. And they acknowledge that it helped with acid rain but they are saying mercury is so toxic that the problem with the system is you could end up being a family in an area, they call them hot spots where the utilities decided to keep spewing the stuff out and just buy the credits, quote, unquote, from the cleaner plants. One in 12 women the CDC found already has toxic levels of mercury in their blood.
MICHAEL LEAVITT: Hot spots are a big concern to us. Mercury is as well. The studies have demonstrated that there are already hot spots of the mercury. The idea is that under a cap-and-trade system as demonstrated by our success in acid rain that the places that have the most will reduce the fastest and the most. And there's great optimism as well as confidence that the same thing will occur with mercury as happened with acid rain. And, again, this is the first time we regulated it. We're going to be reducing it by as much as 70 percent. Those who would suggest that it could be done more, say 90 percent, are depending --
MARGARET WARNER: In shorter time.
MICHAEL LEAVITT: Yes in shorter time -- are depending on a technology that we're quite optimistic about and hopeful for. But it hasn't been demonstrated. It would be a little like the hydrogen car. We're very optimistic about the hydrogen car, but if we were to say every engine in the United States would be a hydrogen engine by 2007, that would be viewed as an overstatement and an overstep and would likely cost consumers in ways we don't want to. So we're moving rapidly but carefully.
MARGARET WARNER: So if someone was looking at your handling of this issue to try to get a sense of how you operate and what your philosophy is and why you are going to this sort of cap-and-trade versus just saying to every single power plant in the country this is so dangerous you've got to cut 90 percent in five years, what should they conclude?
MICHAEL LEAVITT: They should conclude we're moving forward on the most aggressive agenda for air quality improvement in the history of country -- largest investment, biggest return thus far. We're going to regulate mercury for the first time in our country's history coming from power plants. Our purpose and the direction of the president is to improve the air, to purify the water and to care for the land in a way better than it ever has before.
MARGARET WARNER: Where did this proposal come from?
MICHAEL LEAVITT: The mercury? Well, the proposal actually is a part of a much larger law in the Clean Air Act. It was a requirement that we determine whether mercury was in fact a dangerous toxin. The requirement took place some five years ago but it wasn't acted on for four-and-a-half years after it was supposed to be.
MARGARET WARNER: I guess what I'm driving here is it came out just a month after you'd been on the job. It's pretty complicated. Did this come from the EPA professional staff; did it come from somewhere else?
MICHAEL LEAVITT: It was actually working its way through a regulatory process. Now the cap-and-trade idea is one that has been talked about, in fact, used many times because of the acid rain and is universally accepted as a good idea. There's some controversy: Those who believe it would be better to use a command and control where we dictate that everyone will do certain things but history has shown that while you can make some progress with that kind of command and control process, it becomes expensive and hard to make incremental steps of process. And People will do more and they'll do it faster if we give them incentives to do things that are in the public interest.
MARGARET WARNER: If someone was trying to figure out your philosophy or approach, that would be it?
MICHAEL LEAVITT: Well, they would find that I believe in markets before mandates; they would find that I believe we have to set very strong national standards, high standards and then provide for what I call neighborhood solutions where local, state and communities are able to do what they need do in their area and we have a national standard, we're setting very high standards. We're going to cap the amount of mercury; we're going to cap the amount of other pollutants. And we're going to by -- in 15 years reduce them by over 70 percent.
MARGARET WARNER: So I should assume from what you said here the final deadline isn't until next Tuesday, Dec. 15, that the new regulation will be what was release earlier this month. You are not going to be changing it in response to any of the controversy.
MICHAEL LEAVITT: We're going to put forward a dual proposal. We will meet the legal obligation to file what is called a mercury mat which is a regulatory command and control. We're more optimistic about the fact that we can reduce it by 70 percent and we believe in a faster way if we use -- give people incentives to do the right thing. We'll be putting the two proposals together and it will be the first time that this country will have regulated a very dangerous toxin that has serious health effects for fetus and pregnant mothers.
MARGARET WARNER: Now, as you know, critics from environmental groups or say, The New York Times last Sunday, say that in fact industry lobbyists from the utility industry have made huge contributions to both the Republican Party and the Bush presidential campaign have had a lot of influence. I'm going to read you one quote from The New York Times: "The reversal" -- meaning on this mercury proposal - "came right out of the Karl Rove play book, a long promised payoff to President Bush's big contributors in the utility industry." Any truth to that?
MICHAEL LEAVITT: This regulation amounts to one thing. We're going to be requiring utility companies to spend billions, tens of billions of dollars to improve old power plants with new equipment. Now our objective here is to do nothing but to clean the air. This will be the largest single improvement in air quality in the history of this country and the largest investment. If you can draw that conclusion from that, I think it's an overstep.
MARGARET WARNER: What do you, though, think is the appropriate degree of industry input from a polluting industry into EPA decisions?
MICHAEL LEAVITT: They should be seen as a constituent like anyone else. We ought to be governed by science. We ought to be determining what the best available science is, peer reviewed science and then putting it into the policy process. I have a philosophy that says you use science for facts and you need a disciplined process to determine priorities.
There are times when process is needed to be able to sort through competing science. But whether it's utility company or an environmental group and you'll see both representing points of view -- over time, I have noted that well, for example, environmental groups will say this is possible and power companies will say, no, this is possible. The truth is it's probably somewhere in between. If you are looking for a philosophic underpinning of Mike Leavitt it basically is you move toward balance. I have an environmental philosophy called enlibra - which means -- it's a Latin word meaning move toward balance. That's where the truth is, that's where the progress is, is in the productive center. There's no progress to be made at either extreme. There's a lot in the middle.
MARGARET WARNER: If as the polls show, Americans do believe that big business, big contributing, big business has more influence in environmental decisions in the Bush administration than in previous ones, are they wrong?
MICHAEL LEAVITT: I have been here a month and I have not had a single contact from a single group you organized. I don't think that will last forever. I'll have them from both sides and I'll listen from both sides. My job is to clean the air, purify the water and improve the land. That's the charge I've been given by the president. We'll use the best available science, find a productive middle, and move forward.
MARGARET WARNER: And so then that leads to the question of what is the White House influence in this. As you know there's been a lot of controversy about this. For instance, the EPA inspector general found in June that the White House pressured the EPA to soften their health warnings about the air in lower Manhattan after 9/11. To what degree do you think it's appropriate for the White House to have input into EPA findings and enforcement decisions?
MICHAEL LEAVITT: I have been asked this question many times and by EPA employees. This is my response. I was the governor of a state for 11 years and I had a cabinet. I had a conversation with each one of them that basically lined out what I expected of them. I said first I expect to you run the agency. I won't see most of what you do and I expect you to use your best judgment. Second, there are times when there will be issues that overlap your responsibility. I expect to you elevate those for a broader discussion. And when they do, I expect you to be a good collaborator to find the right decision. Fourth or last, rather, I expect that when we have a decision, you'll remember that I'm the one who got elected as a governor and I'm the one who is going to have to be responsible to the people of the state and to the voters but I want you to always remember that I want to know what you believe. That's the way I will make that decision. That's exactly the relationship I expect with the president. That's precisely the way it has worked so far. And there are lots of issues at EPA that have impact on economic policy, on energy policy, on international policy, on homeland security. And one would expect that one of the reasons that there's so much controversy that comes out of the EPA is because there's so much impact in other areas.
MARGARET WARNER: So if there are Americans who don't like what they see going on with environmental policy, should they hold you responsible or the president?
MICHAEL LEAVITT: I'm responsible to run the Environmental Protection Agency. If there are issues that have broader context that impact social policy or energy policy, then it's my job to collaborate with other members of the Cabinet and there are decisions where the president himself has to make decisions and with when that happens, he does.
MARGARET WARNER: Administrator Leavitt, thank you for being with us.
MICHAEL LEAVITT: Thank you.