Debt Ceiling Deal Averts Catastrophe but Undermines NEPA in the Process

While we have averted global financial disaster, the debt ceiling bill is a wolf in sheep’s clothing for NEPA.

Photo Credit: Owen Jones


WWA Summary: While we’re glad we have averted a global financial disaster, Congress and the White House used the debt ceiling bill to rewrite NEPA under the guise of “permitting reform” (even though these changes are not limited to permitting decisions). What can you do? Become a member of our Alliance to support our on-going fight to protect NEPA.

Last week, President Biden signed the Fiscal Responsibility Act – otherwise known as the “debt ceiling bill” into law. After a great deal of uncertainty, Congress and the White House have averted global financial disaster and raised the debt ceiling so the US Government can pay its bills, even if it took an unnecessary game of brinksmanship to get us here. (You’ve probably heard that the deal was a win-win for President Biden and Speaker McCarthy. Slow clap for them.)

Unfortunately, the National Environmental Policy Act (NEPA) was one of the deep sacrifices made in order to get a bipartisan agreement on the debt ceiling. And it’s a sacrifice that is very likely to have grave consequences in the world of public lands.

For reasons completely unrelated to the national debt, the Fiscal Responsibility Act includes a section misleadingly labeled “Permitting Reform” that puts into law many of the Trump-era NEPA provisions we have been fighting since 2020. But, unlike the Trump NEPA Rule, which reinterpreted how to apply NEPA without actually changing the law, Congress has now re-written NEPA to weaken its ability to be used as a tool to protect the environment.

Immediate Red Flags

Division C, Title III of the Fiscal Responsibility Act amends NEPA in several ways. Despite being labeled as “permitting reform”, these changes are not limited to permitting decisions. Here are the changes:

  • Redefining a “major federal action” and thus limiting the types of projects and actions that trigger NEPA review. Only “major federal actions” are subject to NEPA. The bill changes this definition from “actions with effects that may be major and which are potentially subject to Federal control and responsibility” to “an action that the agency carrying out such action determines is subject to substantial Federal control and responsibility.”
  • Allowing Categorical Exclusions (CEs) to be used for projects that may cause significant cumulative effects. The potential for significant cumulative effects used to be a hard stop for CEs but eliminating this safeguard will allow many more projects to skirt in-depth environmental review.
    • Expands the use of CEs by allowing agencies to adopt CEs developed by other agencies. Each agency has a different mission and responsibilities, and a determination of what projects are appropriate for a CE varies by agency. For example, allowing the Forest Service to utilize a CE developed by the Federal Energy Regulatory Commission will have environmental consequences that were not envisioned when the CE was approved within the original agency.
  • Allows project applicants (industry) to write their own environmental reviews despite the clear potential for conflicts of interest.
  • Sets arbitrary deadlines and page limits for environmental reviews. 
    • An Environmental Impact Statement (EIS) must now be completed in two years, and not exceed 150 pages (or 300 pages if the project is “extraordinarily complex). 
    • Environmental Assessments (EAs) must be completed in one year for environmental assessments and will now be limited to a single 75-page document. 
    • Page limits do not include appendices, so it’s likely that lots of information will now be presented in appendices instead of in the main document, which may make it more difficult for casual readers to understand an EA or EIS. 
    • The time limits would be less concerning if Congress were to adequately fund the agencies that conduct NEPA reviews so that they had the capacity to conduct proper reviews within these deadlines, but they do not. In order to meet these new limits it’s likely that agencies will limit opportunities for public comment and engagement. For example, we often request that agencies allow additional time in a comment period or host additional public meetings and these requests are often granted. This will likely no longer be the case.
  • Allows project developers to sue the agency if environmental review deadlines are not met.
  • Requires agencies to report to Congress if they miss deadlines for completing an environmental review. This will add additional paperwork and reporting requirements and further constrain agencies’ capacity to get their work done, effectively slowing down permitting or other processes.  
  • Mandates the designation of a lead federal agency that has the authority to establish deadlines for other agencies to complete any federal permits or approvals required for a project. For example, when a company holds an oil or gas lease on Forest Service land, the BLM and Forest Service work together on the NEPA to analyze a drilling proposal. Now, one agency (likey the BLM) will essentially be the boss of the other (the Forest Service) for these types of projects.
  • Eliminates the requirement to identify irreversible and irretrievable commitments of state, tribal or local resources involved in a proposed action. Now, agencies only have to identify federal resources that are affected. 
    • This ignores NEPA’s broad focus on assuring all Americans a safe and healthful environment, regardless of jurisdiction. 
    • It also further exacerbates an issue we already see with the Forest Service “siloing” projects and trying to ignore how their decisions (like approving a ski area expansion) affect neighboring private lands or other non-federal resources.

The Fiscal Responsibility Act also mandates approval of the Mountain Valley Pipeline in Appalachia. The pipeline approval has gotten more press than the NEPA rollbacks, and it’s a bad deal, but the NEPA rollbacks will also have wide-ranging consequences for the climate, public lands and our environment.

What’s the Background?

These NEPA changes have their (most recent) roots in the House Republicans’ BUILDER Act, which we wrote about in March. Representative Garret Graves (R-LA), who sponsored the BUILDER Act pushed the bill as an “aggressive starting point” for negotiations with Senate Democrats and this approach worked. Fast forward to the past week, and essentially in exchange for not making drastic cuts to the federal budget, President Biden and other Democrat negotiators agreed to change key elements of NEPA, drastically undermining the law’s original intent. It’s a seriously bummer deal for the things we care about.

Are We Happy With Anything? (Spoiler Alert: Meh.)

We are glad Congress and White House were raised the debt ceiling before the government went into default, and that the debt ceiling bill doesn’t drastically cut the Forest Service or other agencies’ budgets (which was included in the bill passed by House Republicans in early May), but there’s absolutely no reason we as a country needed to choose between either defaulting on our debts and causing a global economic meltdown; or slashing funding the agencies that steward our public lands; or upholding the most important, foundational, environmental law in the canon. 

In fact, while the Congressional Budget Office estimates that the bill would reduce federal spending by $1.5 trillion over the next decade, Reuters noted that these “savings” are actually about half of the $3 trillion in deficit reduction the President previously proposed. In short, if Congress truly wanted to reduce the deficit there’s no need to defund our public lands (or other aspects of the government) to accomplish this and NEPA certainly didn’t need to be part of the equation. 

Not to mention the fact that it’s absurd to tie these discussions to the train track of the federal debt ceiling in the first place. 

What’s Next?

The Fiscal Responsibility Act is now law and we’ll soon see how the changes made to NEPA will affect our work to protect wild snowscapes. We’ll also have to wait and see how these changes affect the Council on Environmental Quality’s ongoing work to finish unwinding the Trump NEPA Rule and publish updated NEPA regulations aimed at meeting environmental, climate, and environmental justice objectives, improving opportunities for public involvement, and promoting better agency decision making. 

It’s likely that CEQ will have to start over on this Rulemaking, or make major changes to what they’ve been working on, since the law the Rule is based on has significantly changed. And, with only 2 years left in President Biden’s current term, it’s unclear if CEQ has time to complete a Phase 2 Rule at all. 

After very little change in the fundamentals of NEPA for 50 years, 2020 marked the start of a period of major tumult for this bedrock environmental law. The ground is still shaking and the future isn’t entirely clear, but we’re committed to using every tool available to us to protect America’s wild snowscapes and we’ll keep you informed and engaged as we do so.