between the numbers and the individuals and looking at the individuals. so i did a little research this morning and i found a nice wiki quote that sort of summarizes this situation. it said one should not lose sight of the forest for the trees. what does this mean? a forest is full of beautiful trees for the beholder, but one become so engrossed in looking at the individual trees that they may forget that each tree is merely one of thousands in the forest and lose sight of the big picture. that is basically the difference between those two different perspectives. most of the people who are on the side of the comprehensive immigration reform debate are looking at the immigration issue from the perspective of the trees, of the individuals. perhaps theking at

perspective of an employer who wants to be able to bring in a foreign-born worker to take a job. they may be looking at it from the perspective of an immigrant who wants to be able to sponsor a relative. they may be looking at it from the perspective of somebody who is illegally in the country who has u.s. citizen children and wants to try to get legal status so that they do not any longer fear the possibility of deportation. i want to open this up to questions fairly shortly, but i --t to get back again to the what basically came out as the big picture in the quote i pulled from wiki. focused, as an

organization, on the big picture in terms of resources basically. and i hope that all of you are very much aware of the fact that a generation, are facing some very severe resource constraints in your lifetimes. one of those major constraints is energy. i would assume you are all aware of that. you are certainly aware of the fact that petroleum resources are, in effect, a nonrenewable resource. are many petroleum fields that have already gone dry and other ones that are rapidly being depleted. and even though we have hit a blip recently in terms of the extraction methods of getting petroleum out of existing wells ,nd getting natural gas out

there has been a fairly steady decline in petroleum production in the united states. .or about a decade that is going to continue, whether or not the north slope is open to petroleum extraction, muchver time we become more dependent upon foreign exporters of petroleum products. a lot of that is canadian. some of it is mexican. some of it is venezuelan feared we have become more dependent upon middle east exporters as well. it is important to think about what happens as that resource declines. petroleum is not just necessary for fuelinga car or a plane. it is the chief ingredient in

coke plastics. it is the chief ingredient in inrtilizers, insecticides. when talking about fertilizers and insecticides, that involves the issue of agricultural production. we are meant -- we are using more of our agricultural production for creating biofuels, koran in particular, so that also cuts down on the -- ofility of our nesting harnessing all land area that could be in production of foods for some of that core energy production. one of the other major constraints that is facing the country and many other countries around the world is water resources. it is easy to think of water resources in terms of a continuing cycle of evaporation and rain or thinking of it in

terms of snowfall today, but the fact that that is a continuing cycle does not mean that it is an expanding amount of rainwater , freshwater resources that are by thele for consumption human population. the fact is that groundwater resources are already becoming aquifer in the ogallala in the center of the united states, and that is one of the largest aquifers in the world. but every year when new wells are put down to tap that resource, they have to go down deeper to reach that resource because it is being pumped out faster than it can be replaced. the colorado river is a major source of fresh water in the southwest of the united states.

but the colorado river is already 100% used for agriculture production and population consumption. that, in effect, means that in offt area, there is a trade- that is already real and will year andre acute every that is between agricultural use and human consumption. as population continues to grow into that area, as it is fairly rapidly, that is going to squeeze that resource in terms of being available for agricultural production. much of the prime agricultural land in coke california has already been paved over for the expansion of cities. aat is something that is also form of a constraint. there are other constraints in terms of precious metals.

the are important for production of computers, for example. those are going to be a limiting factor as well. constraints that are extremely important and lead us as an organization to believe that the united states will be stabilize its can population, rather than having it growing at a rate tween -- between about 2.7 million, which was what was reported by the 1 ass bureau on january the amount of population growth or 3en 2012 and 2013, million a year which it was running up to before the current recession. in order to stabilize the u.s.

population, you would have to reduce immigration to a level of about 300,000 people a year coming into the country for permanent residence. i say 300,000 because of the fact that there are about 300,000 u.s. residents who leave the united states for permanent residence abroad per year. you balance that and that is what it takes to stabilize the u.s. population. right now, the u.s. population growth rate from birth is higher , butthe number of deaths the number of births to the nativeborn population is just woman, and that is a population stabilization birthrate. if the foreign-born population coming into the country were to

be reduced, that birthrate will receive a bit to a point where that would not really be a significant factor in the population growth weight -- growth rate of the country. we are not the only ones that have favored a reduction in bankng immigration -- and -- in immigration. there was the u.s. commission on immigration reform, also known as the jordan commission. it was named after the chairperson of the commission, former congresswoman barbara fromn, a black democrat texas and also a law school professor. under the jordan commission, the issue of immigration reform which studied for a period of about three years, and i had the

opportunity of testifying before the jordan commission, and the recommendations of the jordan commission were that we should reduce legal immigration to a 550,000 people a year. that was a significant reduction whenwithin -- from then the level was about 850,000 a year. every declined since then year. they felt that 550,000 a year would be sufficient to take care of business needs for immigration and a continuing and admitting the immediate relatives of u.s. citizens. and thisrecommended, is one of the points my organization also supports, and

that is eliminating the category of sponsorship of emigrants by immigrants. in other words, when somebody emigrates to this country and they come in to the country and become a u.s. citizen, they then become entitled to sponsor brothers and sisters. parents and adult children. to puteffect, that tends emigrants in charge of a major component of our immigration policy. the jordan commission recommended getting rid of that ,ategory of immigration entirely getting rid of it. in our current immigration policy, have what is visa as the diversity system or the visa lottery 1990m which was adopted in at a level of 55,000 immigrant lotteryven away by every year. in effect, people around the

world were given the opportunity to send in a postcard to take a chance on winning an immigrant visa. still continues to this day, but it is currently operating at the level of 50,000 a year and you can send in your postcard electronically in order to facilitate your chances of winning a lottery. winning a lottery visa. there is a lot of fraud associated with that program, but i really do not want to get into that issue. the other category that the jordan commission recommended getting rid of was a category set aside immigrant visas for unskilled workers. that is a fairly small program. nevertheless, the commission felt that it made no sense to be

setting aside immigrant visas for an skilled workers when we had so many unskilled workers in the united states who were unemployed. they felt that it simply do not make any sense. we, as an organization, supported the jordan commission recommendations wholeheartedly, even though we felt it did not go quite far enough in terms of the reduction in immigration. for also recommended steps curtailing illegal immigration, and those were the recommendations that were being legislationthe 1969 to workwitched to fair in support of. we still have various problems with regard to illegal immigration. we still have a growing legal immigration system. we still do not have adequate

controls over employers giving jobs to illegal immigrants. we still have significant problems that require reform. reform agenda is one that has been proposed to congress for a number of years. we have worked with specific members of congress to get bills introduced. those bills have had hearings in some cases and others have not. have not succeeded in getting any of those reductions adopted. jordan, after her commission came up with those recommendations, met with argue forclinton to president clinton's support of those recommendations, and he verbally agreed to support those recommendations. unfortunately, shortly after that meeting, bartered -- diedra jordan died and with that was the support of

president clinton for those recommendations and he never did support those recommendations directly to congress. enough that probably is of an introduction to stimulate some questions, and i would be happy to take your questions. yes? >> [inaudible] the up old amnesty -- [inaudible] you have the chair of the judiciary committee. apparently he promised to come up with something by last october but the shutdown pushed that back to next year. john boehner just hired john advisor tomigration essentially help him write legislation. they cannot do this in the near

future because of the primaries coming up. so they are looking at a wonder -- at a window of june to august because they do not want to have to deal with their own voters at the same time they are proposing this legislation. my question is -- how many republicans in the house do you think will support amnesty without enforcements or what kind of package will they put together, and how many democrats do you think will be needed for leadership to get something to pass if that is what they want to do? largely, i think the situation in congress this year will be similar to the situation in congress in this past year. there will continue majority in the senate that would be in favor of a comprehensive approach. i say that with a caveat, and

that is that that might change if the republicans should win control of the senate, which is a possibility in the elections this year. , it would depend very much on what the influence of the more right wing of the role then party, what more right wing segment of the republican party plays in those that resulted in a change to a republican majority. that theuse, i think assessment is basically correct -744 had been brought to a vote, which basically it could not have because of the

fact that it originated in the senate and included revenue measures, but a similar legislation in the house subsequently was introduced by speaker pelosi, and if that had come to a vote in the house of is asentatives, there reasonably good possibility that there could have been a majority andavor of that legislation that quite possibly would be the same situation in the current year. so i think that it would be if that analysis is correct, to assume that what would prevent the comprehensive reform legislation from being enacted this year would be the reluctance of the republican majority in the house of

allowing a vote to come on that legislation. and that is basically the question mark in terms of mr. that ofs attitude and the republican leadership in the and how representatives much they are likely to be influenced by the more conservative members in the republican house seats. yes? >> there is some momentum in the senate towards immigration increasedt has , mainly inertia in the house. how much energy is there behind your answer to decrease immigration that that fair

supports? >> one way of answering that is at who you take a look is supporting the comprehensive approach and who is supporting , on thetation side comprehensive approach aside you find big business for obvious reasons, because of the fact that the more workers that are available, the more it gives the advantage to the hirer of those workers. big labor, afl-cio, which is more difficult to understand because of the fact that they traditionally were opposed to increases in immigration, but they have had troubles in terms in the big labor movement with the service

employees international union withdrawing from the afl-cio, in part because of the issue of immigration. because the sei you -- sciu has a large number of union members who are illegally in the country. they feel they would better be able to represent those workers and to unionize other locations that have large numbers of if amnestyorkers were adopted so that those workers could no longer be threatened with deportation if they became engaged in working for a union shop in their industries. business ando labor, you have ethnic advocacy of virtually every ethnicity and many different nationalities. one of the eye openers for me when i started working on this

was finding that there was an irish lobby for amnesty because of the illegal immigrant population from ireland in the country. mostdition, you have mainstream religious organizations in the country supporting comprehensive with roman reform, catholics pretty much of the leadership of that organization. of that alliance of religious groups. -- if, the question is you have all of these very major and very powerful groups -- i left out the university system. the university system is very much in favor of amnesty and increased immigration also because of the fact that they would like to see a greater -- for graduates who

are foreign-born being able to get jobs in the united states, because that makes the university more attractive to foreign students. if foreign students are paying full tuition, that is a benefit for the finances of the university. and universities have an open congressost members of in lobbying for their interests. we have all these major interests in favor of the comprehensive approach. in the question is, and this is your question -- who is on our side of the issue? the answer to that is we would not have a chance in this debate if it were not for the fact that we have a majority of the u.s. public opinion on our side of the issue. and the fact that congress is beholden to the u.s. public, in particular the voting population congress,r seats in

it basically influences them to be very cautious on what they do with regard to the immigration issue. opposition, the comprehensive advocates, have recognized this as a problem. increasingly over the past several years, they have come up with a number of public opinion polls designed to try to show that the american public has changed its opinion on this issue. i do not know if you have ever studied public opinion polling, but it depends very greatly on how you ask a question as to the answer you get. has gone verytion clever with asking questions and terms of if we required the ill legal immigrant population -- the illegal immigrant population, say the undocumented the undocumented

thereby sort of confusing the issue, if you require them to pay a fine and if you require there to be the adoption of reforms which stop and if youigration require them to learn english and if you require them to jump through a number of hoops in order to become u.s. citizens, would you go along with that? well, you know, you are not really given much of an alternative here and the answer be tended increasingly to yes that the u.s. public would go along with that. but if you go back to asking the same question that was asked earlier, and that is -- would you support an amnesty for illegal immigrants or undocumented immigrants or

if you you term it, include the concept of amnesty, and majority of the american public says no, they would not support it. ont is the power we have had our side that basically has allowed us to confront the enormous financial resources of the other side of the immigration debate. another question? if we look at the comprehensive immigration reform as a spectrum with pro- immigration reform at one end and then this effort to reduce immigration on the other, there seems to be a lot of house members that are kind of in the middle who do not want to do anything about it at all. what are the practices that you and fair are taking to not only to also those members

move in your direction where we are working to reduce immigration? >> well, you're absolutely , becausehat immigration is a hot button issue in congress and regardless of how a person votes, they are going to antagonize some constituents, that there is a preference to avoid having to vote on the issue. except with regard to negative specific pieces of immigration reform legislation that are fairly noncontroversial. maybe i will back up -- i was going to say that fy systeme e-veri mandatory for all employers could be fairly noncontroversial, but my second thought on that is that all of

the amnesty advocates would be very much up in arms is that were brought -- up in arms if that were brought for a single vote as opposed to part of the comprehensive approach. that is true also with regard to an increase in legal immigration guest workers,in both of which are part of the s- 744 legislation. ,hat we do as an organization we turn out research studies. we have done a series of publications that i have worked on primarily of the fiscal cost of illegal immigration at the state level and at the national a comparisons of of that with taxes that are collected from illegal immigrant workers. and showing that that is in

effect a cost to the u.s. taxpayer of about $113 billion a from the education of the children of you legal immigrants , medicaid, birth to illegal immigrant mothers, some welfare programs that are available because of the children that are us-born, some university admission costs where state schools have started admitting illegally -- illegal aliens. some states are now providing financial assistance to illegal aliens. it is a fairly expensive prospect. that would not change significantly with amnesty. but we have tried to educate policymakers across the country becauseard to the issue

there are measures that can be taken at the state level. we have been very much involved in the movement at the state as at the national level. we were very much involved in the legislation that was adopted in arizona that required mandatory use of the e-verify system and in other states that have also adopted the same requirement. includes, unlike -- anyer immigration other organization on our side of the issue, we have a field statethat work with local immigration reform organizations to, and effect, be advocates for the adoption of measures at the state and local level that will curtail the legal immigration -- curtail illegal immigration.

we were in involved in fighting , lawsuits against arizona's immigration reform legislation that they adopted. we have a branch of our organization that is called the immigration reform law institute that works specifically on legal .ssues related to immigration and they have been involved in a number of lawsuits across the country. not only advocate for the local activist who become very much involved in their state and local policymaking process, but they also try to influence the votes of the legislators here in washington. that is the way that we try to keep the pressure on win it

looks like there is a possibility that legislation might come up that we think would be harmful to the national interest. effect, in earlier reform in 2007,hat came up for example, we were basically credited with one other organization that we work with in tying uprs usa the switchboards of congress with telephone calls from around the country by people that were very upset with the prospect that some form of amnesty legislation might be adopted. another question? >> in a love of the conventional wisdom -- a lot of the conventional wisdom is that for the republican party to win the

presidency again, they will need to improve their latino vote. given the political reality and the national republican strengthen their hand in 2016, how will you push back against that? >> there are two argument on that issue. after the last election, you are correct, there was a lot of instant analysis that indicated enormous latino support indicateds reelection that the republicans were in a very difficult position in the future if they were not able to attract more of the latino vote and that latinos were going to be very much influenced by the position of candidates on the issue of immigration. public opinion polling basically

documents the fact that is a very far down on the list of priorities of the latino population, that the of interest of the latino population have to do and education and jobs government services. and that is one issue that we have certainly pointed out to that it is not opposingly true that comprehensive immigration reform is going to cost latino votes. that is one argument. but the other argument that has been raised and probably gets the attention of policymakers in the republican party more is the

, because of the majority of latinos in the past election voted for the democratic candidate, that if you legalize 12 million illegal immigrants and put them on a path to becoming u.s. citizens in which they then would be able to vote, that you are adding an enormous voting potential, voting block, in favor of democratic candidates. and i cannot estimate how much that perception may have influenced votes on the republican side, but it certainly won -- if it were given any credibility, it would counteract the argument on the other side. yes? i wanted to even the

conversation with some of your points and the points on the panel. you touched a little bit with resource scarcity and the economics of that. they seem to suggest that the increase in immigration is essential, particularly for high skilled workers. the panel suggests for every high skilled worker job that is added, teed up to three local jobs for american workers are toed in that area -- two three local jobs for american workers are added in that area. it suggests that americans are not taking the jobs anyway, so the only way to combat the lower skilled workers to bring immigrants.ants -- onanted to hear your take some of those points and if you feel like your arguments are

matching that conversation. topliness the easiest response to that is that you should not take the argumentation of employers with needing more immigrants or more foreign-guest workers as necessarily representing the factual situation because of the fact that they have a vested interest in expanding both temporary guest workers and immigrant workers. academice been some ofearch done on the issue the visaorker which is

for high-tech workers and other professional workers, other professional workers coming in under nafta from mexico and canada, and others come in and there areram in which company transfers. you probably get a total of guest workers coming into the country of nearly one million people a year. workers can stay for three years, renewable for another three years, and the transfer visa workers can stay up to five years. say you multiply one million get about 5you million professional workers in the united states at the present time taking jobs and some done,ic studies that are

basically pointing out that we have much higher unemployment rate among professional workers than we have experienced in the and that wages for those professional workers are basically stagnant over the past about a decade which would not be true if there were a shortage among there were bidding the employers for those high skilled workers. endwith regard to the lower , farmers willevel tell you that they have crops that are rotting on the vine, and that is true. there have always been crops regardlessthe vine of how many workers were available for harvesting them. that always happens.

reasons -- sometimes the crop is somewhat damaged. sometimes it is simply a resource issue that the workers do not get there at the right time. but it is not true that farmers have to have access to the illegal immigrant workers that they are currently hiring to harvest those agricultural crops . because there is a visa, h2a visa, which allows foreign guest workers to come in for that isural work unlimited, there is no reason that any agricultural employer somebody illegally in the country to harvest of the work, that they cannot turn to a program to bring in foreign-guest workers to do that

job. but they do not like to do that. they do not like to do that because they have to pay more visahose foreign h2a workers. they have to pay more for those thatrs because, as part of program, there is a requirement that the employee or furnish , thatr to those workers the employer pay for the transportation of those workers , ande worksite and backe that the employer has to make so thate food resources the worker can buy his own food resources rather than having to buy them from the employer which the employer can use to take advantage of those workers. those provisions were put into law specifically to stop the wages, the real

wages earned by agriculture workers in the united states which are today significantly below the wages that were earned in real inflation-adjusted terms two or three decades ago. they have decreased the value of the earnings of those workers because of the abundance of supply of illegal workers that are hired by those agricultural employers. >> the panel you referred to this morning looking at conference of immigration reform, their interests collectively, while different, were using the narrative of it being in the economic self- interest of the country to do ofs, the economic interest the country. they talked about individual pieces of legislation that went to some of the sectors of this high-ion, like the h1b,

tech folks, agricultural interests. refer to legislation, small pieces of legislation that are speaking to these different , as notf the puzzle being adequate. saying theyas some would support this if you kept the dialogue going. is there any legislation that you would support, that your organization would support, no noter how an hour of -- matter how narrow or broad that told allow for some attempts adjust some aspects of the immigration issue as you are defining it or is that too risky in terms of creating the kind of political dynamic that might wind up being a larger piece of legislation? >> well, you nailed the answer to that question with the last part of your question. insider issuean in terms of congressional

process. and that is you need to know that if you have a piece of immigration legislation that , that iss in the house sent to the senate for consideration. in a request for a conference committee between the senate and the house to look at the issue of merging the senate position which clearly 44, thee at 7 comprehensive approach, with the selected piece of legislation that was adopted in the house. insider assessment on , in is that that would effect, and power interests in

-- empower interest in the leadership that appoints the conferees to the house of representatives to name people that would go along with the senate approach so that a form back to theld go house for a vote and it would -- as i understand it -- i am not one of our legislative lawyers, but as i understand it, that would probably mean that it would come to a vote in the house which is exactly what speaker pelosi has been trying to achieve because she thinks there would be enough republicans that would go along in addition to virtually the entire democratic , andrship of the house thereby pass the comprehensive approach. so those that are potent --

those that are opposed to the comprehensive approach recognizing that possibility have taken the position that it would be a mistake to adopt any immigration legislation in the tose, because it would lead that type of scenario. it is a short-term win for fa that no immigration legislation comes to a vote in the 2014 session as opposed to the board of security act going forward? >> well, that is a very good question. traditionallyhave in all of our 35 plus years worked with members of congress to get specific legislation

introduced in both the house and the senate. that is imagine that going to change in 2014. that was true in 2013. basically, i imagine, and on this we do not specifically have a position, but i can imagine that we're going to be ouruenced in terms of communications with our members in theirt the country contacts with their representatives by what our friends in the house of representatives that we work with most closely recommend that we do in terms of trying to bring about the legislative outcomes that we would like to see.

>> you talked a lot about short- term policy goals. i was wondering what the long- term policy goals would be to go focusing on the 11 million immigrants that are here that probably will not be going anywhere. what are you looking at policy wise in that area? , and is our assessment think that virtually anybody who issueon the immigration in washington, d.c., would agree , that the primary magnet that drives people you legally into intoountry -- illegally the country is the prospect of getting jobs. this was basically the 1965usion of congress in systemey set up the i-9

requiring employers to gather on their new hires to try to assure that they were legally in the country. , at was the consensus in least the majority, in congress in 1969 when the immigration authorities were told to set up , to set upy system an effective system for allowing employers to verify the work documents of their employees, and it is our assessment and i think the assessment of most members of congress that if the e verify system were made a national mandatory system the way it has in arizona and a number of other states, that the jobfectively reduce magnet that draws people into the country illegally. i did a study of the effects of

the arizona legislation that is on our website that documents a precipitous drop in the estimated illegal immigrant population in arizona after adopting the legislation that they did. medicaidcant drop of births in the state. a significant drop of students in limited english proficient education in public schools in the state. , a larger drop in the crime rate than was true elsewhere in the country. one of the important aspects of the requirement of you verify -- which we have pushed for a long time is that it makes employers responsible. what is happening at the present

time is employers know that they can look the other way when they are presented fake documents because they are subject to prosecution under the law only if they knowingly hire illegal workers. and that knowingly qualification gets them off the hook if they have been shown fake documents because they are not expected to be able to distinguish between fake documents and legitimate documents. if, however, they are required andse the e-verify system they receive information that the social security number is fake or the immigration document is fake or that the individual has overstayed a visa and they continue to employ that person, then they are knowingly hiring somebody illegally in the country.

under the current law, they can be prosecuted. some people are prosecuted under the law at the present time ago some people are prosecuted under the law at the present time, but very few. -- it would double the message that it is difficult to get a job in the united states the incentive of employers taking advantage of the press system to hire illegally because they would be exposed to prosecution. with regard to the issue of border fencing, i think there is a lot of sort of a smoke screen with the issue of border fencing. i think that you can make a very good argument that the border patrol resources that are currently available for trying

to control the borders would be adequate for handling illegal entry into the country if illegal entry were cut down by a very large magnitude as a result of the knowledge of people that they cannot get jobs if they came into the united states. in other words, remove the job magnet, fewer people will come. to itpeople come up increases the leverage of the border patrol to control the border. --annot -- you experience experience would have to show whether or not that would dramatically increase the number of people illegally coming into the country. that that probably is true is the reduction in illegal immigration that happened at the whenf the last decade there was very high unemployment

and a very major reduction in jobs available in the services and construction industry. jobs were down, fewer people came. a reduction in apprehension of illegal immigrants which indicated a reduction in attempted illegal entry into the country. --i think that you perhaps there is a very good chance that you could control illegal immigration, sneaking into the country, with the existing border patrol resources if you simply adopted the e-verify system. >> last question. >> i understand reducing the magnet for immigration, but what are the policy goals for the current undocumented workers that are here? you said you are against amnesty, so i am guessing you of services.pport are you looking for more deportations? what is your solution?

>> basically, we would look at the experience in arizona and the adoption of restrictions on illegal immigration. having the effect not only of deterring new illegal immigration into the country, but also encouraging those who are illegally in the state to leave the state. that obviously does not work effectively for the nation when it is done on a state i state by-state on a state- basis. that is the reason we think we need to have national legislation with regard to the e-verify process. as happened in arizona, we believe that if you have the situation where you effectively deny opportunities to new people coming into the country illegally and you increasingly

make it impossible to those who are already in the country illegally to get a new job if they are a fire -- if they are fired or if the company goes out of business, they lose the job, or an escalating process of verification of those who are already on the payroll, you will have people who are working in the country illegally who will recognize the fact that the time has come that they will need to return to their home country. and even though the other side of this argument says that this will lead to separation of that whatwe believe we have seen in other areas around the country is that people who are illegally in the country, when they leave the country, they take their children with them. it is hard to imagine parents

deliberately leaving the children behind unless they were planning on coming back in very short order to resume their role as parents. that basically is the answer. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> today, an encore presentation hlaes. with amity s she talks about her book on calvin coolidge. here is a look. >> the single thing that coolidge did that we want to remember is when he left office, the budget was lower than when he came and. that is the story for us now in a time where we are concerned -- how did he do that? the economy grew a lot. maybe more than 3% sometimes. unemployment was below 5%.

the budget was balanced? how did he manage to make the budget to lower? how did that help the economy? a lot. because he got the government out of the way of the economy. very foreign to the way we talk about the economy now. >> do you remember how big the budget was then? >> it up and fight you count it. when he counted it was about $3 billion. then it would be less than 5% of the u.s. economy. he was going to get it down to $3 billion, and that was his holy grail. is soe reason this book long is that the middle section of the book is about his effort ,ith another new englander to cut theom maine budget. not just tax rates. to cut the budget. that is different. the rates.ins

you will see a photo somewhere of two lion cubs he had that someone gave them. he says you cannot just cut taxes. you have to cut budget. those lion cubs were named budget bureau and tax reduction. >> a portion of an encore presentation of q&a. the entire interview later today starting at 7:00 eastern right here on c-span. tv in prime time looks at world leaders. beginning at 8:00 eastern on the book "wilson." been a discussion on margaret thatcher. following that, remarks on the book "bolivar." that his book tv tonight on c- span2. history tv american and a look at archival films. edit :00, an examination of for the u.s.

information agency documentary. in a 1955 short film titled "the face of lincoln." ," on thet, "the march march on washington. finally, i hollywood roundtable discussion from the day after the march on and then a hollywood roundtable. american history tv getting tonight at 8:00 eastern. our series of first ladies will continue tonight with rosalynn cotter. .- carter she supported the equal rights amendment and testified before congress about the bill concerning mental health. beginning at 9:00 eastern on c- span. you can also listen on c-span radio. i think it is interesting to

sit here and talk about how the republican party is less unified than the democratic party. it is an interesting time to be studying this because for the first time in recent years we are seeing a republican party that is seeing the struggles that that in a credit party faced -- that the democratic party face 30 years ago. >> the interplay of what happens, how candidates dealing with that really matter, more than the underlying scandal itself when it comes to these comebacks. especially if you are running in a context in which you can present yourself as an abused -- part of an abused group, but the system. you can play that quite well. whether that is the case as jeff talked about more roy moore in the 10 he used

commandments as an attack on christian conservatives, that is very much the case. ofthis weekend, the state the national parties and a look of recovery. in your comments and calls with mark levin. depth."at noon on "in span3, the impeachment of william jefferson clinton. saturday and sunday at noon eastern. spring -- lasthe month the supreme court heard oral arguments on cross state or pollution. the epa released its rule known as the transport rule which was instituted to protect downwind states from pollution. this is about 90 minutes.

>> we will hear argument first this morning in case 12-1182, environmental protection agency v. eme homer city generation and the consolidated case american lung association v. eme homer city generation. mr. stewart? >> mr. chief justice, and may it please the court -- in promulgating the transport rule, epa sought to protect the public health and to strike a fair balance between the competing interests of upwind and downwind states. epa's analysis proceeded in three basic steps. first, epa performed a screening analysis to determine which upwind states would be covered by the transport rule. and in order to do that, epa first identified the downwind receptors that were in a state of nonattainment or had maintenance difficulties, and then it determined which upwind states were linked to those receptors. and in order to be linked to a downwind receptor, the upwind state had -- had to

contribute 1% or more of the relevant national air quality -- ambient air quality standard, or or naaqs, to that downwind receptor. and any state that didn't contribute at least 1% to any of the downwind -- any of the relevant downwind receptors was determined not to contribute significantly to nonattainment at that area. second, once the states that were to be covered by the transport rule had been identified, epa set a state emissions budget for each state. and to do that, it performed computer modeling to determine, in addition to whatever emission control efforts were already going on, what additional emission reductions could be achieved by implementation of control measures available at various cost thresholds, and the thresholds ultimately selected were for naaqs, $500 per ton. for so2, the group -- once states were at a level of

$2,300 per ton, the group two states were at$500 per ton. and the idea was let's see what emissions savings we can achieve if additional control measures are implemented up to those cost thresholds. >> of course, those savings would not be evenly distributed among the upwind states, right? so some upwind states that are able to make those efficient changes will be carrying more than their burden of reducing the emissions that affect downwind states, right? >> well, there were two bases for distinguishing among the states. the first in terms of the $500 per ton threshold for the group two states versus the $2,300 per ton threshold, the way in which states were divided into those categories is that the states that were linked to the downwind receptors that had the most severe pollution problems were treated treated as group one states, and they were required to make greater pollution control

efforts because they had some responsibility for the most serious problems. now, i guess the point of your question would go to the fact that even among states that were operating under constant cost control thresholds, a state that had already implemented cost measures up to that limit might have to do less in a sense, because it would have already taken the steps that were required, at least as compared to an air quality only threshold. >> well, i don't mind a state doing less. i think north carolina said that you can use those cost figures to do less, and that's not challenged here. but what the application of the cost factor means is that some states that can more efficiently make the changes will be required to do more than merely account for their

proportion of the downwind harm. isn't that true? >> well -- >> yes or no? i mean, i think it's an easy yes or no answer. >> i think it is -- no, i think it is the case that if you adopted an air quality only threshold, then it would be more likely to be the case that states that had already done a lot to control air pollution would have to take additional steps, even if it was done at a non-cost -- in a non- cost-effective way. >> have you answered my question? does the fact that you begin with what the statute says is each upwind state has to account for its effect on the downwind states, but once having identified that effect, you then say those upwind states that can make the reductions more efficiently have to make more

reductions than their mere proportion of the harm requires. isn't that so? >> i think it would be the case that at least as -- yes, as compared to at least some air- quality-only measures, the use of cost would have the effect of distributing the burden in a somewhat different way than it would have if you considered air quality factors only. >> is the idea, mr. stewart, that the states that are required to do more are the states that haven't done much already? >> that's correct. and that was what i was trying to get out earlier. if states have to do less in order to meet the $500 -- in order to be in a position where they've implemented all the cost -- all the emission control measures that are available at $500 per ton, if a particular state has to do less in order to achieve that, it's probably because that state has already implemented most of those measures on its own. >> and what provision of the statute allows you to take that into account?

>> well, the term that we're -- >> i mean, as opposed to each state, whether it's inefficient or efficient, has to merely reduce its contribution to the downwind state pollution, right? that's what the statute says. >> well, the statute says that each state will adopt measures that prevent sources within its borders from contributing significantly to downwind nonattainment. and the purpose of the provision is not to allocate blame for an existing state of nonattainment or for prior pollution. it's to devise a scheme that going forward will prevent nonattainment from occurring. and the idea is if each state lives up to its obligation, and if the downwind states make commensurate commitments, then the problem will be solved. and in terms of the language "contribute significantly," i think there are various reasons to think that epa reasonably construed that term to include a component of difficulty of achievement. that is, in common parlance, we might say that dunking a basketball is a more significant

achievement for somebody who is 5 feet 10 than for somebody who is 6 feet 10. we might say that a $100 charitable contribution is more significant if it's made by a person who makes $10,000 a year than a 1,000 contribution by somebody who makes $1 million a year. >> that's -- i was just going to say, that just is because of, in the latter case, because contribution happens to be used in both an affirmative and a negative sense. the question is, for example, whether somebody who fatally stabs somebody and someone who fatally shoots them have each significantly contributed to the bad result. >> i think -- >> or not significantly contributed in varying degrees. >> if you cause death by alternative means, then both people would have contributed as significantly. but to set out a hypothetical

that involves contribution to a bad result, if you had a basketball team that lost a game by one point, and the coach was asked to pinpoint the plays that contributed significantly to the defeat, the coach would be much more likely to identify a missed layup or a turnover than the missed half court shot at the buzzer. it's true that the missed half- court shot at the buzzer would, in one sense, contribute significantly, in that it was a but-for cause. if the shot had been made, the outcome was -- would have been different. but if you're talking about significant contributions to a bad result, you'd more likely to focus on errors that could or -- and should have been avoided, not simply the failure to accomplish something that's extraordinarily difficult. >> can i ask a question? >> is part your -- your answer to justice kagan's question and justice scalia's question that it depends on the time point, at the time at which you measure? that is to say, if you take a look at a state which for 5 years has been trying to ameliorate pollution, you can

measure it from the point 5 years ago, and if you do that, then they're not having to contribute more. >> i -- >> or don't you like that answer? >> i don't -- i don't quite want to go there. i think there's a kernel of truth in there -- in that, but that the point at which the states' significant -- the point at which the states' good neighbor obligation is triggered is by the promulgation of a new national air -- ambient air quality standard, and the state is required withinyears of the promulgation of the naaqs to promulgate a state plan that includes good neighbor provisions for for the particular -- >> how far back? how far back do you go for the relevant naaq? 2006 or -- >> in this case, there are two -- 12 naaqs that were implemented

-- that were promulgated in 1997. >> oh, 1997. >> one of them for annual particulate matter, and one of them for ozone, and then the 2006 naaqs was for 24-hour particular matter particulate matter, which is harder to achieve. and so when we are asking what are the states supposed to do as of the time that the new naaqs is promulgated, the states don't exactly get credit for what they have done in the past, that is, they can't do less than they are supposed to do in the future, simply because they have done a lot in prior years to prevent pollution. but the fact that sources within the state have in the past installed various pollution control devices or are using cleaner fuels, that may make it easier for them to prevent significant contributions to downwind nonattainment going forward. >> can i ask a question? following up on justice scalia about the statutory language and how you read it, i think, you know, most people, everybody, thinks that it's better to regulate with attention to costs than to regulate without attention to costs. we have this, our trucking association decision where we said, well, notwithstanding that

everybody agrees that regulating with attention to costs is better, when congress says the opposite, we have to go with the opposite. and there we said congress had said the opposite, because it had talked about protecting the public health with an adequate margin of safety. now, i'm wondering, what does it take in a statute to make us say, look, congress has demanded that the regulation here occur without any attention to costs? in other words, essentially congress has demanded that the regulation has occurred in a fundamentally silly way. >> well, in the case of the naaqs i think it was -- it was not the case that requiring epa to establish the naaqs without reference to cause -- to cost, would call a silly result. that is, the ambient air quality standards were supposed to be set based on public health criteria. and the court in -- in the same case, in american trucking, said that, of course, you can consider costs in deciding what

is the most efficient and appropriate way to implement those naaqs. and here i take your point that in order to conclude that congress barred consideration of costs at the implementation stage, we would have to have very clear language and "significant contribution" doesn't do it. and the other thing i would say in addition to the examples i've given of -- in common parlance, we use significance to refer to ease or difficulty of achievement, it's worth emphasizing that this is a provision of law and it's designed to help allocate the responsibility among different actors for alleviating a shared problem. and, for example, suppose -- >> the problem is that that allocation among different actors is done state by state, and simply taking costs into account as determining who will

do what simply eliminates the requirement that each state not be required to do more than its share of the pollution it's causing downstream. it's the state-by-state requirement that makes it very difficult to think that all congress wanted was the most efficient reduction of pollution no matter where that pollution came from. that's simply not what the statute envisions. >> i guess -- >> and maybe that'd be a better statute. maybe it shouldn't be state by state. >> i mean, the first thing i would say is we can accept the premise that each state should alleviate no more than its share and there still may be -- that each state should do no more than its share, and yet there still may be different ways of determining what a state's fair share is. that is, one way would be to determine which states had been the greatest polluters in the past and say that the more

pollution that had previously flowed from your borders, the greater your reduction obligation in the future. but another way would be to say in order to ensure that each of the states that have shared responsibility for the problem in the past bears its fair share, we will ask each state to undertake commensurate efforts as measured by the cost threshold. for example, if it could be shown somehow that the generation of electric power inherently required the emission of some level of so2 and nox, that there was simply no way to generate electricity through any technology known today without generating without emitting that minimum amount, i think we would certainly say, well, congress didn't intend to bury in the good neighbor provision some prohibition against particular states generating electricity. and epa or the states could reasonably determine that the

unavoidable component of the emissions, the part that couldn't be avoided even with the best possible pollution control technology, that would be regarded as legally insignificant, that the only legally significant contribution would be contribution that could have been avoided. now, clearly, epa has gone one step farther, because it hasn't just focused on emissions that couldn't be avoided at all, at least without foregoing the generation of electric power. it has said, we will treat as legally significant only the extra increment of emissions that comes after we've taken what we regard to be equitable and cost effective pollution control measures. >> just one more question on cost. in your answer to justice kagan's question, there is at least a possible argument that you, the regulator, the government, the epa, can take cost into account unless it's expressly prohibited from doing so. you don't go that far. but you even stop short of that. you say that it might be difficult to apply the cost rationale at the implementation

stage? i think that's what you said and if so, i didn't quite understand. >> i misspoke. what the court said in american trucking is that in setting the naaqs, epa was forbidden to consider cost, not because the statute said in so many words cost can't be considered, but because the criteria that were set out in the statute for what the naaqs had to achieve simply couldn't be reconciled with consideration of costs. but the court in the same decision said, although you can't consider costs in determining what the naaqs will be, what air quality standards have to be achieved, of course you can and should consider costs in deciding what implementation measures should be used to determine which emissions will be reduced. >> if congress wanted that, why couldn't congress simply have said the epa shall prescribe minimum pollution reduction measures that have to be taken by the states? that's a quite different statute from what we have before us.

but what you're saying is, you know, you reduce it this much, as much as efficiency will allow, or else you're in violation of the good neighbor rule. and that's a very different statute from what congress wrote. maybe it's a good idea. maybe epa ought to control all efficiency measures for reducing pollution, but it's certainly not the statute that congress wrote. >> let me say three things in response to that. the first is that, as i mentioned before, the good neighbor provision is addressed in the first instance to the states. that is, it's the state's initial obligation to submit an implementation plan that contains good neighbor provisions. and so if the court says costs can't be considered in defining significant contribution, the effect is not simply that epa can't consider that factor when it steps into the state's shoes. the effect is that a state can't

consider cost of achievement in attempting in good faith to implement its own good neighbor provision. the second thing i would say -- >> excuse me. i don't understand that. please say that again. >> the good neighbor provision -- we're dealing here with a situation where epa was the one that promulgated federal implementation plans, but that's only because the relevant upwind states did not discharge their obligation to promulgate state implementation plans that contain good neighbor provisions. but the language "contribute significantly" is in the portion of the statute that deals with what a state plan is supposed to contain. it's not dealing with -- it's not in a provision that by its terms is addressed directly to epa. and so if the court said in defining "contribute significantly" we can't take into account the cost of emission control measures, that would mean not simply that epa can't consider that factor when it steps into the state's shoes,

it would also mean that the state can't consider that factor. >> mr. stewart? >> well, when you mentioned the fact that the states didn't address the good neighbor requirement. of course you hadn't come up with their budgets that they had to meet at the time that they had to promulgate their sip's. now, at a different point in your brief you emphasize how incredibly complicated it is for states to determine how much they must reduce their emissions to take care of the fact that they significantly contributed to downwind pollution. and yet you would impose on those states the burden to issue the good neighbor program without knowing how much you expect them to meet. >> well, it's the statute that imposes the obligation on the states. and it may help to draw the court's attention to the relevant provisions. on page 1a of the appendix to the government's opening brief,

the relevant provision is 42 u.s.c. 7410. and 7410(a)(1) begins by saying, "each state shall, after reasonable notice and public hearings, adopt and submit to the administrator of epa within 3 years or such shorter period as the administrator may prescribe after the promulgation of a national primary ambient air quality standard, the naaqs." and then it goes on to say, "a plan which provides for implementation, and so forth." and then if you look to the bottom of -- or to the top of page 2a -- i'm sorry -- subsection (2) begins, "each implementation plan submitted by a state under this chapter shall be adopted by the state after reasonable notice and public hearing. each such plan shall," and then if you look at the bottom of the page, it says, "contain adequate provisions prohibiting, consistent with the provisions of this subchapter, any source

or other type of emissions activity within the state from emitting any air pollution in amounts which will contribute significantly to nonattainment --" >> so if you were working for one of the upwind states and you were facing this 3-year deadline and epa had not told anyone how it intended to interpret the state's obligations under the good neighbor policy, what would you have told the state to do? >> well, certainly epa's basic methodology of using cost thresholds had been embodied in the naaqs sip call in 1998 and in care, which i believe was promulgated in 2006. >> right. but the head of the state epa comes to you and says, how much do we have to reduce our emissions to satisfy our requirements? and you would tell them what? >> we would tell them, in all honesty, we don't know yet. but that's not a fatal flaw in the argument. that is, it is inherent in any legal context in which one person acts and then a second

person reviews, that the first person has to act before the second person has made up his or her mind. and so a district court -- >> well, but that kind of glosses over the fact that, as you say elsewhere in your brief, this is a -- is your analogy, right? -- a spaghetti matrix or something? and so there's no possible way for the state to know how much of a burden you expect them to address. and yet you're saying, well, you've got to do it and you've got to do it within years, or we're going to take over the responsibility. >> well, certainly what epa was called upon to do was far more complicated than what any particular state was going to be called upon to do, because as a result of widespread noncompliance, epa was promulgating federal implementation plans for close to 30 states and plans for different naaqs. the second thing i would say is that -- >> but could i address the first thing first? i'm not sure that's right. i think epa has an easier job

dealing with it as a group. they say, look, here are these states, here's what you have to do. but any individual state has no idea what its particular role is going to be in your group resolution. >> well, it certainly has the data available to it, that epa had available about how much did each state contribute to the overage at various nonattainment receptors in the past. it's certainly true that the states wouldn't necessarily know exactly what policy judgment epa would ultimately make as to what the right cost threshold was. but -- >> oh, but that's crucial. i mean, it would have no idea whether epa would use any or would pick $500 or would pick whatever. i mean, i don't know how it could sensibly design a program without knowing that. >> i guess the second -- the other two points i would make are, first, the state's role is to devise something, in this area as in others, that it believes will carry out its own legal obligations, not necessarily to predict just how epa would do it if the task fell

to epa. and so, for example, when the states are undertaking the more prosaic task of devising plans that will produce attainment of the naaqs within their own borders, they have to make a variety of policy judgments about the right mix of emission controls, what sources should be allowed to emit in what amounts. if a particular state just didn't do it, that task would fall to epa. and it's very unlikely that anything the particular state would come up with would exactly match what epa would ultimately devise. >> can you give us an example of when epa has done this in the past, where a crucial element of a naaqs has not been defined by the agency and yet the agency nonetheless requires the states to put together their sip's without knowing what their target is? and that's the problem here.

what's your best example of another case in which the agency said, you put together a sip and we're not going to tell you what the target is? >> well, the examples i would point to are in the brief filed by the respondent states that are on our side of the case, who identify examples of instances where states did successfully comply with their good neighbor obligations and persuaded epa that what they had done was enough. >> well, that just means it's pin the tail on the donkey. some states got the tail. i mean, you know, they pinned it in the right place. that doesn't prove anything. i want an example of another instance in which epa has hidden the ball, has said, we're not going to tell you what the target is, it's up to you to come up with a sip and we'll tell you after the fact whether that sip happened to meet the target that we've invented. >> i don't -- i wouldn't characterize what epa is doing as hiding the ball, that is, it didn't kind of fail to divulge

information that it had at it's disposal. >> all right. correct. >> it released a great deal of information at the time that the proposed rule was announced in the summer of 2010. >> ok. the two additional things i would say, though, are that for better or worse congress did place this obligation on the states. it evidently thought that, at least in the long run of states cases, states were capable of carrying out this task. and at least to the extent that adopting a good neighbor provision requires consideration of circumstances in other states, in a sense this is just the flip side of what the downwind states have to do all the time. that is, if new york officials are trying to determine when a new naaqs comes out, how can we bring our own air quality into compliance? what controls do we have to place on our own sources in order to get air quality to the

desired level? the new york officials have to take account of the degree of pollution that is likely to travel to their borders from other states. they can't analyze emissions within their own borders in a vacuum. they have to consider what the likely contributions of their neighbors -- >> yes. that just means there's some facts that they don't know. of course. there is always going to be uncertainty about certain facts. but here there is uncertainty about the target, not just about the facts. we don't know what target we're expected to hit. >> i guess the final thing i would say on this part of the -- this particular sub-issue of the case is that, even if you reach that conclusion, even if you determine that it was just practically infeasible for any state to adopt a compliant state implementation plan with good neighbor provisions for these naaqs until epa acted, then the proposition of the opposing states still wouldn't follow. that is, the statute in the provisions that i've pointed to says it's up to the states in

the first instance to devise the state implementation plans, including good neighbor provisions. and then on page 14 10a of the same provision -- of the same appendix, i'm sorry -- the statute describes what happens if a state fails to satisfy that obligation. and this is at the beginning of subsection (c)(1) on page 10a. it says "the administrator shall promulgate a federal implementation plan at any time withinyears after the administrator finds that a state has failed to make a required submission or finds that the plan or plan revision submitted by the state does not satisfy the minimum criteria." >> mr. stewart, below, the government conceded that there was a theoretical possibility that some states could be overcontrolled, that they would be implementing

measures that would reduce their contributions to pollution below the 1%. assume that -- i think there's a theoretical possibility of that, but that your approach was basically fine. what would we do about that? first of all, are there measures states can take to get out of the fip if it's inappropriate to them because of overcontrol? and if not, then how do they do it? i mean, what's the process? if we think there's a flaw, do we vacate the rule? do we leave it in place? what do we do? and what's our power to do it? >> i mean, i think in the circumstance you describe, if you reach the conclusion that there was a theoretical possibility that this could happen and that it would be a problem if it did, but that the methodology used by epa was on the whole rational, i think the task for the court at this stage

of the case is to rule on the more big picture objections that are properly before it and that the court of appeals ruled on. now, even if we win everything that's at issue in this court, the case is not over. there are a variety of more specific challenges to the details of the rule that the d.c. circuit found it unnecessary to address. and so if we won on the issues that are before the court, the case would be remanded and there would be an opportunity for the court below to consider those. and to the extent -- >> including including the overcontrol argument, or would that have been done? >> well, to the extent that any state had -- and i don't know the pending as-applied challenges at this level of detail. but to the extent that any state has a properly preserved challenge to the effect that it is actually likely to be subject to overcontrol, then that could be heard by the court of

appeals. the court of appeals could determine both whether that is, in fact, likely to happen and whether, if it does happen, that would render the rule arbitrary and capricious as to that state. but the real problem with the court of appeals methodology was that it said the fact that epa can't absolutely rule out the possibility that it might happen renders the rule invalid on its face, and in other portions of the opinion the court faulted epa for failing to ensure that its regime would not lead to overcontrol. and i think that's an extraordinary standard for an administrative agency to deal with, that is, you know, it happens all the time that federal agencies are given authority to regulate, to address one problem, and the regulation necessarily has spillover effects on other conduct. and so for instance, if a federal agency was tasked with preventing the sale in interstate commerce of contaminated food, it might require inspections. it might require the recall of food after one item in a shipment had been shown to be contaminated. these measures might have

spillover effects on food that was not, in fact, contaminated. but that wouldn't be a flaw in the rule. of course, an agency could go overboard and impose a regime that was so onerous in comparison to the health benefits that it was arbitrary and capricious. but nobody would ever say that it's the duty of the agency to ensure that there is no other means of achieving the same health benefits at lower cost to the public. the other thing that the states could do, i mentioned that one way in which a state that believed itself to be unfairly or inappropriately treated by the rule was to pursue any adequately preserved legal challenge it may have in the judicial proceedings. and as your question indicated, there is also a mechanism by which a state can ask to have the federal implementation plan replaced by a plan of its own devising. and so the consequence of the state's failure to achieve their good neighbor obligations in

time and epa's stepping into their shoes, the consequence was not that they're forever barred from devising their own plans. the consequence was simply that the federal implementation plan would remain in effect for a fairly limited period of time subject to replacement by a state plan. >> if we were to rule against you and affirm the decision below, how long do you think it would take to get a new rule in place? >> i don't have an estimate on the time, but if the court affirms on the ground that epa may not consider costs -- part of the problem, i think it would be an extraordinary undertaking for epa to try to achieve. that is, part of the difficulty here is that nobody has identified a concrete alternative, that is, a plan that would not consider costs and that -- yet that would disperse the burdens of compliance among the states in proportion to their prior contributions and also would

address the nonattainment problem at all of the downwind receptors. i don't know if it's could be -- >> could you explain that to me, mr. stewart? because are you saying that the straight proportionality approach that was applied in the d.c. circuit, are you saying that that's impossible or are you saying it's complicated and dumb? >> what -- at least what we understand to be the straight proportionality approach is impossible. that is, it might be possible with respect to any particular downwind receptor, because you could say that if one upwind state is contributing twounits and another four and another seven, the proportional solution might be to require that any necessary reduction would be in those proportions. one state would do 2/13 of the reduction, another would do 4/13 of the reduction and

another would do 7/13 of the reduction. that would be theoretically possible with respect to any receptor. but with respect to another receptor, the same states might be contributing in entirely different proportions, and so there would be no way of devising a solution that would be proportionate as to both. >> i suppose you could average them out, couldn't you? >> you might be able to average them out. >> i don't think that's any more irrational then picking a number like 500 bucks as to, you know, who can do it more efficiently. that's sort of arbitrary. >> well, i mean, the purpose of the cost threshold was not to increase or decrease the total amount of reductions that would be necessary. it would be to ensure that the reductions that had to take place were done in the most cost-effective manner possible. and part of the irony -- >> i understand that, but my point is that is certainly a pretty arbitrary number, and i think averaging for all the receptors is certainly no more arbitrary.

>> well, i think the cost methodology is one that epa had used often in the past. indeed, even before the term "contribute significantly" was added to the statute in 1990, epa had interpreted the prior reading of the statute to allow relief for a downwind state if an upwind state was contributing significantly to downwind pollution, and it had interpreted that standard as allowing consideration of cost and compliance burdens. i mean, one of the ironic things about this case is that the only ill consequence of overcontrol is cost. that is, this is not a situation in which there is some distinct public health benefit -- distinct public health problem, i'm sorry, that is caused if power plants are emitting too little nox or so2. the only reason that people worry about overcontrol, about reducing emissions more than they need to be, is that it costs money. and if that's the problem to be avoided, it seems strange that epa can't take account of costs

in devising a solution. >> sir, i don't want you to finish your argument if you had something to say on what you started out with in describing the plan. you said there are three aspects. the first aspect was you cut out anyone, any state that's contributing less than 1%. you said the second aspect was that you used a metric of $500 per ton of nox reduced, and you applied that to the states still in. and then you said there were three, and you never got to three, and i want to be sure you do if you had that. >> the third part of the process is that once each state's emissions budget has been quantified, with respect to each state, the epa essentially divides up the emissions that are allowed among the different power plants within the state's borders. and the way that it does that is it gives allowances to the various power plants that add up to the total number of tons of pollutants that are allowed to be emitted. and it's important to emphasize

that the states have not joined the industry's argument here that cost -- even the states on the other side of the case have not joined the industry's argument here that states that costs can't be considered. those states are not quarreling with the methodology by which epa quantified their state emission budgets. those states are simply saying that once those had been quantified they should have been given an opportunity to determine on their own how the allowances should be allocated without epa doing it first. in some situations that might have been a rational way for epa to proceed. that is, the statute says that once epa finds that a particular state has either failed to submit a good neighbor sip or has -- or epa has disapproved the good neighbor sip, once that happens, the statute says that epa at any time within 2 years can promulgate its own federal implementation plan. and in some circumstances, it might be rational for epa to wait the fullyears and give

the full 2 years and give additional guidance to states in order to give them every opportunity to devise compliance plans. there were basically two reasons that epa didn't do that here. the first is that it was subject to the d.c. circuit's mandate in north carolina, which said get something in place that works as soon as possible. and epa felt constrained by that to act as quickly as it could. and the second point worth emphasizing is that there are state sovereign interests on both sides of the case. it's true that by devising a federal plan in the first instance epa has intruded to a degree on the ability of the upwind states to decide how emissions allowances should be allocated among their own sources. but the downwind states are subject to their own obligations to comply with the naaqs within their own borders, and to the extent that they can't get relief from the upwind states their task is made more difficult. >> i'm sure i should know this after reading all these briefs,

but if we reverse the d.c. circuit what would happen going forward? in other words, the states have had this time to go first and to do their sip's. then they were found not to comply, so the epa does its fip. but that's not the end of the game, is it? i mean, isn't the epa under a continuing obligation to look at, review its naaqs, to give the states further opportunities to come back? >> yes. i mean, with respect to the particular naaqs that are at issue here, the states -- it's unclear to what extent they've been working on this in the interim, but the states certainly could, even under the terms of the transport rule, propose state implementation plans to replace the fip's. now, it's to be contemplated that there will be additional naaqs implemented, and this court's decision would affect the way in which both the states and epa went about the business of determining how good neighbor obligations should be carried out with respect to those future naaqs.

>> thank you, counsel. mr. mitchell, why don't you give us 30 seconds or so. mr. mitchell?

>> mr. chief justice, and may it please the court, epa's actions in this case have written the states out of the clean air act. epa cannot impose a good neighbor fip on the states when epa has left the states completely in the dark about the meaning of the phrase "contribute significantly." epa's approach requires the states to submit sip's that can only guess at how epa will quantify their good neighbor obligations under section 7410 (a)(2)(d). >> well, it's certainly hard, but it is what the statute says, and it seems to me that if epa had taken a different view, it would have been contrary to the statute. >> epa's actions are unlawful for several independent reasons. the first is epa's actions in this case represent an arbitrary and capricious change in the way that the agency has interpreted the statute. for 15 years, starting with the naaqs sip call in 1998, epa told the states not to submit good

neighbor state -- good neighbor sip's before epa had quantified the state's obligations under (a)(2)(d). and epa repeated that stance numerous times, including in the disapproval of nevada sip that we cite on pages 9 and 59 of our brief, and also in the sources of the d.c. circuit cites on pages 51, 52, and 56 of the petition appendix. epa has now done a 180-degree shift and they have told the states that they are required to submit good neighbor state sip's before epa has quantified their obligations under subsection (a)(2)(d). >> well, they don't know exactly how to do it. i mean, this is a tough problem. so it sounds as if what you're making is a procedural objection here to which the government's point was, you're right, we'd all been talking about this. we wanted to see what the states would come up with, so we look. the states haven't come up with enough in our opinion, and so now we go to the federal process and we put out our thing.

and you comment on that. and then if you feel that their thing is no good, propose your own solutions again. that's what he's saying. but it's supposed to advance the ball. so there is a procedure for the states to come in if they can come up with a better plan, that's what you've just heard, and so do it. so what's arbitrary or capricious about such a system? >> because that's the approach epa rejected in the naaqs sip call. >> well, they objected to it once. now they think it works here. i mean, all the time it happens that people change their minds about how problems are best solved or they cite this problem's better solved one way and better another way. so if your only point is once they did it a different way, they'll say, well, what's unreasonable about changing our way? we're trying to get the job done. >> epa is allowed to change their interpretation of the statute, but if they're going to do that, they have to acknowledge in the transport rule that they're abandoning the prior construction of the statute. >> well, years and years, the

neighbor board, the labor board decided things in adjudications, rules. one day they say, no, we think we should preside rulemaking processes like other agencies. does anything in the law prevent that? >> no, they're not prevented from making the change, but the arbitrary and capricious standard -- >> but you're not prevented from giving a counter sip is what they were being told. you can counter, is what the government is saying, and so it's not clear to me that they've estopped you from doing your own sip. >> but we can propose and submit the sip only after the fip has already been imposed on the states. >> so what's the difference? if you think they're wrong, you give a counter sip and you duke it out with them in terms of what you think -- where you think they are wrong as applied to you. but let me ask you something fundamental about this. are you challenging the transport rule using cost or are

you just challenging the process in which that was achieved? because if i understand all the amici briefs and the theory of this, not even you would want a command-and-control regulation, is that correct? >> we do not have a position on the question of whether epa can consider costs. >> it'd be crazy if they didn't, right? >> we represent a coalition of states. >> right. and for some of them, it would really be a bad idea, wouldn't it? >> there's simply no consensus among the states on that question. [laughter] so we are remaining agnostic on that point. >> can i ask, until you propose your sip to replace the fip, right, the fip remains in effect? >> yes. >> and you're bound by that until they approve your new sip. how long does such a transaction normally take? >> it depends. it really does. we don't know exactly what our obligations are.

>> you think that's a quick process? i mean, as soon as -- >> no, it takes months. >> if you'll have to develop a new sip, that'll take you some time? >> yes. >> and then that sip is submitted to epa, and they chew on it for as long as they want, right? >> yes. >> and then maybe they will say your sip is good enough, and maybe they won't. >> we're still waiting for epa to decide on the sip that we submitted to implement the good neighbor obligations for the 2006 particulate matter standard. >> but at least if you've adopted a sip or proposed a sip, you've given reasons, you have a rational plan, and the epa then must give a reasoned response to it. whereas, if the epa is the first one, they're writing on a blank slate, and it seems to me that in some respects the epa is more constrained under this process to which you object. >> well, it's still an unlawful use of the fip authority for several reasons, and this gets back to justice breyer's

question, why is this unlawful? and there's several reasons. the first is that epa has changed its interpretation of the statute, and the key language from the naaqs sip call appears on pages 57,368 through 57,370, where epa tells the states, we don't want you to submit good neighbor sip's that simply take a guess at what you think the good neighbor obligations are. we will quantify your obligations in a rule first and then -- >> and that means the statute doesn't require you to do that, i assume. >> the statute -- >> i mean, when they say that, that's an affirmation by them that the statute does not require you to do it, i assume. is that your point? >> not only that, they said in the naaqs sip calls that they are adopting an interpretation of the statute that prohibits us from doing that. but the interpretation of the statute that epa adopted is that epa, and only epa, is the institution that is charged with the responsibility of quantifying a state's good neighbor obligations. the states had argued for a different approach back in 1998. we wanted to have the prerogative to decide what the good neighbor obligations mean, and epa said, no, we are the sole entity with that

prerogative and you need to wait until we issue a rule that quantifies your obligations. epa has now changed that approach without explaining or acknowledging in the transport rule that they were abandoning their earlier interpretation of the statute. >> but they were doing that with respect to the naaqs. i thought that was them saying they had to quantify the naaqs. >> what they said on a naaqs sip call was they have to quantify the good neighbor obligations. they have to tell the states what it means to contribute significantly to another state's air pollution. and that leads to a second statutory problem with this regime in the transport rule. the states have the prerogative under the clean air act to do what the federal minimum requirements are for clean air and to go no further. epa's approach here requires the states, when they submit or propose sip's and they have to take a wild guess as to what their good neighbor obligations are, it effectively compels the states to overcontrol and overregulate, because if they want epa to approve the sip and they don't know what their good

neighbor obligations will be, they have to overshoot and overcontrol and overregulate or risk the epa will deny their sip and impose a fip on the state. and what epa is essentially doing is telling the states that if you want to do only what the federal floor requires and to go no further, the price of that is that you have to accept an epa- imposed fip that defines those obligations rather than giving the state the opportunity to distribute regulatory burdens in a sip as it sees fits. >> mr. mitchell, i might just not be understanding you, but this goes back to the chief justice's question. the statute says, look, after these standards are originally promulgated, the state gets 3 years to make its best pitch, and then the administrator shall promulgate a fip at any time within two years after that. now, presumably there are lots

of conversations that can happen between the epa and the states during those 5 years, and maybe sometimes more of those conversations happen and sometimes less of those conversations happen. but i don't see that as different constructions of the statute. it seems to me as the statute sets up its framework -- you go sets up its framework -- you go first, do it within 3 years, then the epa goes, it has to do it withinyears. the epa just has very substantial discretion under this statute as to what kinds of conversations it wants to have when, within that broad structure. why am i not reading it right? >> i agree that the epa has that discretion. the problem is that in the nox sip call in 1998 they asserted exclusive interpretative authority over subsection (a)(2)(d), which is the good neighbor provision of the clean air act. and they said that epa is the institute might quantify the states' good neighbor obligations. until epa fills in the blanks and tells the states what this

"contributes significantly" phrase means, it's an empty requirement. epa could have taken a different approach in the nox sip call. they could have told the states you can take the first crack at defining what "contributes significantly" means, and we'll review your submission and approve or disapprove it. but what they said, 15 years ago, was that the states need to wait for epa to quantify the obligations in a rule. once epa asserts that exclusive interpretive authority over the provision, the states have no obligation to guess at what epa might do in the future when they submit the sip. and that leads to a second independent problem with epa's transport rule, because epa had no authority to impose federal implementation plans for the 1997 standards on the 22 states that already had epa-approved sip's in place for those standards. epa -- >> haven't some states already challenged that? isn't that pending below? why should we be looking at that issue here when states have challenged that? >> three of the states have

challenged their -- >> i don't know why the rest didn't, but three of them have. so why should we enter the fray anticipatorily? isn't that an issue we should wait and see what epa says below? >> the united states is suggesting that we're somehow launching an improper collateral attack because the states could have challenged the earlier sip disapprovals or earlier findings of failure to submit. >> no, no, no. this is a very discrete question, that they've already approved some sip's. three states have already challenged the fact that they shouldn't be required to meet a new standard because they've already had an old standard approved. that seems to me a very discrete challenge, and three states have undertaken it. >> but those judicial proceedings have been stayed pending the outcome of this proceeding. >> well, i don't know why, but that's a different issue. even though it has, wouldn't it be more prudent for us to wait for that administrative process to finish before we venture into this question?

that's my point. >> i don't think the court should wait because the issues that we're raising are discrete from what's being challenged by those three states in their separate proceedings. the arguments we're making are that, first, epa has no authority to impose a fip on the states before quantifying the good neighbor obligations under (a)(2)(d), and, second, epa improperly invokes the corrections -- >> and that's because because epa did it that way -- you don't get that from the statute. you get it from what epa did in the first round, is that right? >> we're not relying solely on the statute, justice ginsburg, that's correct. our argument is that epa has changed its interpretation of the statute from the nox sip call to the transport rule without adequately acknowledging or explaining how its new interpretation is consistent with the statute. but we're also relying on the statute as well, because, as i mentioned earlier, (a)(2)(d) requires the states to eliminate pollution that contributes significantly to another state's nonattainment.

>> but they may not know, you know. they may not know. there's six states that contribute to the seventh state's pollution, and how much each state can cut back depends. it depends on what it costs. it depends on how much they contribute. it depends upon what the other states will do. it depends upon where the wind blows, and that changes all the time. >> right. >> so they have a tough problem. they can't tell you exactly how much you should cut back until they know what they have in mind or what others have in mind for solving the problem. so it sounds to me as if you're asking them to do the impossible, and they had a very good reason for not doing what they did before, namely, it would be impossible here to have a -- or not actually impossible, but very tough and very expensive. so that's why, i gather, they went the way they did. i don't know anything in the law that tells them that this statute was meant to force them to proceed in a way that would either be hugely more expensive

and perhaps impossible. what's your reaction? >> epa has done this before. i mean, with the cair fip's when they first quantified the 50 states' good neighbor obligations, they gave the states an opportunity to submit sip's before the cair federal implementation plans would take effect. and epa agrees that the states have no ability to guess accurately at how epa will quantify their good neighbor obligation. they can't -- >> well, they have done the impossible here, haven't they? i mean, they have the transport rule. the only question is whether it should have come out sooner or later, right? the only question is whether it should have come out before the states were obliged to submit their sip's. >> it's not impossible for epa to decide what "contribute significantly" means. that's their job. they've asserted that prerogative. they can choose any reasonable interpretation of that phrase. >> you started to give us a second statutory reason. i was really eager to see what that was. >> yes, that's the section 7410(k)(6) issue that we

p.a. had previously approved peap good behavior s.i.p.'s for a particular matter. once the epa approves a s.i.p., it's if the f.i.f. on the s.i.p. expires under the statute. so they had a problem under those 22 states. f.i.p.'s y impose when they approved s.i.p.'s? and k-6 says if peap determines a prior decision approving a s.i.p. was an error -- >> isn't that the issue that the three states are challenging below, just that discreet issue can callther the epa