Obama Scraps Controversial EPA Smog Regulation

In this June 15, 2011 file photo, Environmental Protection Agency (EPA) Administrator Lisa Jackson testifies on Capitol Hill in Washington.

Bowing to the demands of House Republicans and some business leaders, President Obama is backing off a controversial proposed regulation tightening government smog standards.

In a statement Friday, Obama said he had ordered Environmental Protection Agency administrator Lisa Jackson to withdraw the proposal, in part because of the importance of reducing regulatory burdens and uncertainty for businesses at a time of rampant uncertainty about an unsteady economy.

The announcement came shortly after a new government report on private sector employment report showed that businesses essentially added no new jobs last month -- and that the jobless rate remained stuck at a historically high 9.1 percent.

The withdrawal of the proposed EPA rule comes two days after the White House, at the request of House Speaker John Boehner, identified seven such regulations that it said would cost private business at least $1 billion each. The proposed smog standard was estimated to cost anywhere between $19 billion and $90 billion, depending on how strict it would be.

The smog standard was among the Obama administration regulations that House Republicans said this week they would try to block this fall.

"This is certainly a good first step, and we're glad that the White House responded to the speaker's letter and recognized the job-killing impact of this particular regulation," Boehner spokesman Michael Steel said.

"But it is only the tip of the iceberg when it comes to stopping Washington Democrats' agenda of tax hikes, more government 'stimulus' spending, and increased regulations -- which are all making it harder to create more American jobs," he said.

House Majority Leader Eric Cantor said, "This is a step in the right direction. ... With a stalled economy and millions of Americans out of work, we cannot afford any sort of costly regulation that would destroy jobs and hamstring growth. House Republicans will continue our efforts to make sure the remaining regulations do not go into effect."

Administration officials said Friday that Obama's decision had nothing to do with politics. They said Obama's been committed to reducing regulator burdens since he became president.

As expected, the move raised the ire of environmentalists, a core Obama constituency.

"The Sierra Club condemns the Obama administration's decision to delay critical, long-overdue protections from smog, an acidic air pollutant that when inhaled is like getting sunburn on your lungs," Executive Director Michael Brune said in a statement. "By putting the interest of coal and oil polluters first, the White House seems to be saying that 'clean air will have to wait.'"

In his statement, Obama said he was still committed to protecting public health and the environment.

"I will continue to stand with the hardworking men and women at the EPA as they strive every day to hold polluters accountable and protect our families from harmful pollution," he said.

Jackson said in a statement that the agency will "revisit" the smog standard in compliance with the Clean Air Act.

The America Petroleum Institute (API), which represents nearly 500 oil and natural gas companies, welcomed the president's decision.

"The president's decision is good news for the economy and Americans looking for work," API President and CEO Jack Gerard said in a statement. "EPA's proposal would have prevented the very job creation that President Obama has identified as his top priority."

The U.S. Chamber of Commerce, which represents more than 3 million businesses, also cheered the decision.

"The U.S. Chamber is glad the White House heeded our warning and withdrew these potentially disastrous -- and completely voluntary -- actions from the EPA," Chamber President and CEO Thomas Donohue said in a statement.

"This is an enormous victory for America's job creators, the right decision by the president, and one that will help reduce the uncertainty facing business," he said. "It's also a big first step in what needs to be a broader regulatory reform effort."

The Associated Press contributed to this report.