SURPRISE! Obama yields on smog rule in face of GOP demands

WASHINGTON — President Obama abandoned a contentious new air pollution rule on Friday, buoying business interests that had lobbied heavily against it, angering environmentalists who called the move a betrayal and unnerving his own top environmental regulators.

The president rejected a proposed rule from the Environmental Protection Agency that would have significantly reduced emissions of smog-causing chemicals, saying that it would impose too severe a burden on industry and local governments at a time of economic distress.

Business groups and Republicans in Congress had complained that meeting the new standard, which governs emissions of so-called ground-level ozone, would cost billions of dollars and hundreds of thousands of jobs.

The White House announcement came barely an hour after another weak jobs report from the Labor Department and in the midst of an intensifying political debate over the impact of federal regulations on job creation that is already a major focus of the presidential campaign.

The president is planning a major address next week on new measures to stimulate employment. Republicans in Congress and on the campaign trail have harshly criticized a number of the administration’s environmental and health regulations, which they say are depressing hiring and forcing the export of jobs.

The E.P.A., following the recommendation of its scientific advisers, had proposed lowering the so-called ozone standard of 75 parts per billion, set at the end of the Bush administration, to a stricter standard of 60 to 70 parts per billion. The change would have thrown hundreds of American counties out of compliance with the Clean Air Act and required a major enforcement effort by state and local officials, as well as new emissions controls at industries across the country.

The administration will try to follow the more lenient Bush administration standard set in 2008 until a scheduled reconsideration of acceptable pollution limits in 2013. Environmental advocates vowed on Friday to challenge that standard in court, saying it is too weak to protect public health adequately.

Ozone, when combined with other compounds to form smog, contributes to a variety of ailments, including heart problems, asthma and other lung disorders.

Lisa P. Jackson, the E.P.A. administrator, has pushed hard for a tougher ozone standard, telling associates that it was one of the most important regulatory initiatives she would handle during her tenure. But she found herself on the losing end of a fight with top White House economic and political advisers, who were persuaded by industry arguments that the 2008 ozone rule was due to be reviewed in two years anyway and who were concerned about the impact on state, local and tribal governments that would bear much of the burden of compliance.

The impact would have been felt heavily in a band of Midwest and Great Plains states that are not themselves major sources of ozone pollution and that will be critical 2012 electoral battlegrounds.

In a statement, the president reiterated his commitment to environmental concerns, but added: “At the same time, I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover. With that in mind, and after careful consideration, I have requested that Administrator Jackson withdraw the draft Ozone National Ambient Air Quality Standards at this time.”

In words of reassurance directed at Ms. Jackson and the agency she heads, the president said that his commitment to the work of the agency was “unwavering.”

“And my administration will continue to vigorously oppose efforts to weaken E.P.A.’s authority under the Clean Air Act or dismantle the progress we have made,” he said.

Ms. Jackson accepted the White House decision with a terse statement: “We will revisit the ozone standard, in compliance with the Clean Air Act.”

She pointed with pride to the administration’s record of establishing a range of other air quality safeguards for power plants, manufacturing facilities and vehicles that will also help to reduce ozone pollution across the country.

Ms. Jackson had made clear her intention to follow her scientific advisers and set a new standard within the more restrictive range by the end of this year. She has told associates that her success in addressing this problem would be a reflection of her ability to perform her job. The agency sent the now-rejected standards to the White House in July with the expectation that they would be issued by Aug. 31.

While some senior agency officials expressed disappointment with the decision, they also said they understood that it was their job to offer their best technical advice to the White House and that the ultimate decision rested with the president, who has to stand for re-election and consider other factors.

Reaction from environmental advocates ranged from disappointment to fury, with several noting that in just the past month the administration had tentatively approved drilling in the Arctic, given an environmental green light to the 1,700-mile Keystone XL oil pipeline from Alberta, Canada, to Texas and opened 20 million more acres of the Gulf of Mexico to drilling.

Daniel J. Weiss, senior fellow at the Center for American Progress, said, “Today’s announcement from the White House that they will retreat from implementing the much-needed — and long-overdue — ozone pollution standard is deeply disappointing and grants an item on Big Oil’s wish list at the expense of the health of children, seniors and the infirm.” The center is a liberal research group with close ties to the White House.

Bill McKibben, an activist leading a two-week White House protest against the pipeline project which has resulted in more than 1,000 arrests, said that the latest move was “flabbergasting.”

“Somehow we need to get back the president we thought we elected in 2008,” he said.

Cass R. Sunstein, who leads the White House office that reviews all major regulations, said he was carefully scrutinizing proposed rules across the government to ensure that they are cost efficient and based on the best current science. He said in a letter to Ms. Jackson that the studies on which the E.P.A.’s proposed rule is based were completed in 2006 and that new assessments were already under way.

The issue had become a flashpoint between the administration and Republicans in Congress, who held up the proposed ozone rule as a test of the White House’s commitment to regulatory reform and job creation. Imposing the new rule before the 2012 election would have created political problems for the administration and for Democrats nationwide seeking election in a brittle economy.

Leaders of major business groups — including the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Petroleum Institute and the Business Roundtable — met with Ms. Jackson and with top White House officials this summer seeking to moderate, delay or kill the rule. They told William M. Daley, the White House chief of staff, that the rule would be very costly to industry and would hurt Mr. Obama’s chances for a second term.

John Engler, a former governor of Michigan and chairman of the Business Roundtable, said Friday in a statement: “Creating U.S. jobs and providing more economic certainty for all Americans, especially on the heels of today’s news that the U.S. unemployment rate remains persistently high, is our greatest challenge. If President Obama’s speech next week is as positive as this decision was today, it will be a success.”

Representative Eric Cantor, the majority leader, said this week that the House would review the ozone rule, which he called the most onerous of all proposed regulations.

“This effective ban or restriction on construction and industrial growth for much of America is possibly the most harmful of all the currently anticipated Obama administration regulations,” Mr. Cantor wrote. He said that the impact would be felt across the economy and cost as much as $1 trillion and millions of jobs over the next decade.