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Getting ‘Forever Chemicals’ Out of the Water Supply
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Getting ‘Forever Chemicals’ Out of the Water Supply

Plus: Biden vetoes GOP-led bill on ESG investing.

Happy Wednesday! If you live in Fayette County, Georgia, and woke up earlier this week to find several buffalo moseying through your backyard, you probably assumed you were still dreaming.

You weren’t. Rapper Rick Ross was gifted the 2,000-pound beasts last year by an underwear brand, and they’ve recently developed a habit of wandering off his property and annoying his neighbors. “You gotta get loose sometimes and see the other side. Nothing wrong with that,” Ross said. “So when you see my buffalo, give it a carrot. Give it an apple. They so kind, they so peaceful.”

Quick Hits: Today’s Top Stories

  • At an American Bankers Association event in Washington, D.C. on Tuesday, Treasury Secretary Janet Yellen defended regulators’ moves to guarantee deposits in both the Silicon Valley and Signature Banks after their collapse this month and said the U.S. government could step in to protect depositors at other banks should there be a broader run on the system. “Our intervention was necessary to protect the broader U.S. banking system,” she said. “And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”
  • The National Association of Realtors reported Tuesday the median existing-home sales price in the U.S. was $363,000 in February—down 0.2 percent year-over-year in February 2023, and the first such annual decline since February 2012. Sales of previously-owned homes increased 14.5 percent from January—ending 12 consecutive months of declines—but were still down 22.6 percent year-over-year.
  • The Defense Department announced Tuesday it will expedite the delivery of Abrams tanks to Ukraine, now aiming to have them in-country by the fall. The Pentagon said it would send an older—but refurbished—model of the M1 tank that can be pulled from existing Army stockpiles instead of new tanks that could have taken up to two years to build and ship. 
  • Republican Gov. Ron DeSantis of Florida provided the strongest indication yet that he plans to run for president in 2024 on Tuesday, sitting down for an interview with Piers Morgan in which he touted his electoral and legislative victories, criticized Donald Trump’s management style, and predicted he would beat President Joe Biden in a theoretical head-to-head matchup. “If I were to run, I’m running against Biden,” he said. “I think the country wants a change. I think they want a fresh start and a new direction, and so we’ll be very vocal about that.”

‘Just Say No’ to PFAS

(Getty Images)
(Getty Images)

Don’t freak out, but odds are, you probably have a synthetic chemical that’s been linked to a number of maladies pumping through your veins as you read this newsletter. Was it a little more difficult for us to fall asleep last night after learning that fact? You bet. 

Last week, the Biden administration announced sweeping new rules aimed at curbing the amount of these chemicals in the nation’s water supply. Years in the making, the changes would establish federal limits on manufactured compounds known as per- and polyfluoroalkyl substances (PFAS), or “forever chemicals,” that don’t degrade naturally and can build up over time in the air, soil, and water, producing dangerous health effects. If implemented as proposed, the rules would represent the most significant change to water quality regulations in decades—but complying with them won’t be cheap. 

PFAS is a broad category encompassing thousands of synthetic chemicals that have been used since the 1950s in the manufacture of goods ranging from non-stick pans, to cosmetics, to fire-fighting foam. But the Environmental Protection Agency’s (EPA) new rules specifically target six PFAS that have adverse health and environmental effects and establish “legally enforceable levels” of maximum contamination in drinking water. Although some states have implemented restrictions or bans on the chemicals, the EPA’s move would represent the first federal legal limit on PFAS in drinking water. The EPA does, however, maintain health advisories on the levels of the chemicals that are dangerous to people.

So, why the change now? Evidence has accumulated in recent years showing that the negative health effects of the chemicals in question can be triggered by much smaller amounts than previously thought. “The updated advisory levels, which are based on new science and consider lifetime exposure, indicate that some negative health effects may occur with concentrations of PFOA [Perfluorooctanoic Acid] or PFOS in water that are near zero and below EPA’s ability to detect at this time,” the agency said in a statement last June. The previous advisory—issued in 2016—set the harmful level of the chemicals at 70 parts per trillion. The updated advisory and regulations? Four parts per trillion.

“We as a community of scientists and policymakers and regulators really missed the boat early on,” Susan Pinney, director of the Center for Environmental Genetics at the University of Cincinnati, told PBS earlier this month.

There is a limited, but growing, body of evidence linking the chemicals to negative health outcomes. A National Science and Technology Council report released last week noted there are significant gaps in the research on the health effects of PFAS, but the chemicals have been associated with a range of health conditions, including increased risk for cancers, a reduced immune response, decreased fertility, developmental problems in children, and increased risk of obesity. 

Much of the current research focuses on PFOA and PFOS, chemicals that have been largely phased out from manufacturing but are—per the “forever chemical” moniker—sticking around in the environment. And it’s not clear if the newer chemicals designed to replace PFOA and PFOS are all that much safer. “We don’t know about the other ones,” Carmen Messerlian, a professor of environmental reproductive epidemiology at the Harvard T.H. Chan School of Public Health, told The Dispatch. “It doesn’t mean that they’re not harmful, it just means that we don’t have data on them.”

The data we do have paint a bleak picture. Messerlian said there’s a high level of confidence in the current research on the health effects of PFAS. “There’s pervasive widespread harm to the human body on every level,” she argued. And while the new EPA rule is a step in the right direction in her mind, she believes “the regulation doesn’t go far enough, because it’s only really looking at six PFAS.” 

“It’s the tip of the iceberg of what needs to be done,” she continued. “We’re getting fatter, we’re getting sicker. Infertility rates are on the rise, cancer rates are on the rise in young people, obesity rates are at epidemic levels. Cardiovascular disease and cancer mortality hasn’t budged. We have all this knowledge and information about the causes. But we haven’t been able to budge the needle on diminishing the incidence of these disorders and diseases in the population.” 

None of the problems she listed above are monocausal, of course, but experts at federal agencies agree on the chemicals’ harmfulness. “We anticipate that when fully implemented, this rule will prevent thousands of deaths and reduce tens of thousands of PFAS-related illnesses,” said Michael Regan, the administrator of the EPA. Linda Birnbaum, the former director of the National Institute of Environmental Health Sciences, said public health researchers should jump at the chance to study these chemicals: “PFAS have now been associated with an adverse impact on every major organ system in the human body.”

And the chemicals are not only ‘forever,’ they’re virtually omnipresent. After 70 years of manufacturing the stuff, studies estimate more than 95 percent of Americans have detectable levels of PFAS in their blood. The chemicals are also found in the water of communities across the country, with a study from the Environmental Working Group estimating more than 200 million Americans drink PFAS in their tap water. 

Areas that face acute exposure to the chemicals have experienced dire health effects. Communities in West Virginia were exposed to high levels of PFOA from a plant run by DuPont, a large chemical company, and hundreds of people developed cancer—the story was dramatized in the 2019 film Dark Waters starring Mark Ruffalo (Ruffalo has since become an advocate for regulating PFAS).

Support for the rule is certainly not universal, but it is somewhat bipartisan. “After years of urging three consecutive administrations of different parties to do so, I’m pleased a safe drinking water standard has finally been issued for PFOA and PFOS,” said Republican Sen. Shelley Moore Capito of West Virginia. Democratic Rep. Dan Kildee, co-chair of the Congressional PFAS Task Force, also applauded the announcement after calling for updated water regulations and funding to address PFAS last month.

As great as cleaner water sounds, though—who doesn’t want that?—the costs associated with the rule may prove an issue. If it’s finalized, water utilities will be responsible for upgrading their treatment systems to remove the chemicals, and to continually monitor PFAS levels in the water. According to the EPA, the annual cost to make those upgrades would be between $772 million and $1.2 billion.

But water utility representatives say the estimate is too low. Tom Dobbins, CEO of the Association of Metropolitan Water Agencies (AMWA), highlighted the costs of compliance, citing as an example the Cape Fear Public Utility Authority (CFPUA), a water utility company in Wilmington, North Carolina that spent an estimated $43 million to update its water treatment to filter out the chemicals. If just 16 communities around the country require similar investments, the total would exceed the EPA’s estimate.

CFPUA upgraded its treatment after revelations in 2017 that Chemours, a chemical company spun off from DuPont, had been dumping PFAS into the Cape Fear River for decades and the chemicals were showing up in the water system. The deputy executive director of CFPUA, Carel Vandermeyden, believes the $43 million spent to add PFAS removal to water treatment is a “good benchmark” number for other communities of similar size.

“Ultimately, without more federal support for upgrading current treatment technologies, average Americans will have to pay the cost of further treatment through higher rates for their water,” said Dobbins. 

And bringing water systems up to speed could take years. “We started in 2017 and the facility came online in October of 2022,” Vandermeyden told The Dispatch. “I think we went about as hard as anybody could from start to finish to test and design and build a facility of this size and complexity.”

The Bipartisan Infrastructure Law provided $9 billion in funding for communities to address water contamination issues including dealing with PFAS. “We recognize that’s not enough for every water utility in the country, but it’s a shot in the arm,” said Regan.

The rule is now in a public comment period, but Regan said he hoped it would be finalized by the end of the year.

With just 670 days left in his term, President Biden had better pick up the pace if he wants to defeat Franklin Delano Roosevelt’s majestic record of 635 vetoes issued. He just has to nix 0.947 bills per day—how hard can it be?

Even if Biden falls short of FDR, he won’t be joining the existing seven-way tie for fewest presidential vetoes (zero). On Monday, he wielded the presidential pen to protect a Labor Department rule change clarifying that retirement fund investment managers may consider environmental, social, and governance (ESG) factors in choosing the most financially advantageous investments. ESG, like most investment strategies, has a mixed record—and its parameters are often vague and ill-defined. It’s also become a partisan lightning rod, as evidenced by the heated rhetoric lobbed back and forth this week.

Generally speaking, ESG investing involves considering a company’s environmental and social effects and the equity of its corporate governance when deciding whether to invest. Whether that’s motivated by a desire to make the world a better place by supporting positive-impact companies—or a belief that companies with these business practices are more likely to thrive—depends on who you ask. The fuzzy definitions produce confusion about what companies are ESG-approved, even among the framework’s chief proponents. A 2021 Wall Street Journal report on three ESG raters, for instance, found they gave opposite report cards to about a third of the firms they all analyzed.

ESG has nevertheless caught on like wildfire. Worldwide, Morgan Stanley estimates, about $22.8 trillion—1 in every 4 professionally managed dollars—is invested “sustainably.” For a while, data suggested, some ESG-focused funds did outperform—they tend to be comparatively tech-heavy and energy-light to avoid fossil fuels, and they rode the tech boom. But as the tech sector has stumbled in the post-pandemic, higher interest rate environment, so have many ESG funds. Even in the good times, returns on ESG investing often aren’t quite as high as they could be, as ESG fund managers typically charge higher fees than more traditional asset managers.

While individual investors may not mind risking a financial hit for a good cause, conservative lawmakers have criticized the practice, and not just because ESG criteria often match progressive values. They’re also concerned the investing strategy will dampen returns for retirement funds and other financial vehicles individual investors rely on without control of investment tradeoffs. 

That’s a reasonable fear, according to analysts who argue ESG isn’t a good long-term strategy. “The bottom line is if you are investing for goodness—which is what ultimately ESG is about—you have to settle for lower returns,” said Aswath Damodaran, a finance professor at New York University Stern School of Business. “At best, you can basically match what you could have done without the constraint.”

Republican lawmakers increasingly focused on opposing “wokeness” and “woke capitalism” have set their sights on stamping out ESG. By July 2022, Reuters reported, 17 conservative-led states had introduced at least 44 bills or laws penalizing companies taking stances on issues like gun control, climate change, and diversity—up from about a dozen measures in 2021. BlackRock, the world’s largest investment manager, has become a frequent target of conservative fire, and CEO Larry Fink said Republican state treasurers pulled $4 billion from the company last year over its ESG initiatives. In August 2022, Florida officials announced Florida Retirement System managers wouldn’t consider ESG, instead prioritizing “the highest return on investment for Florida’s taxpayers and retirees.”

The measure Biden vetoed Monday is only the latest strike in the fight over ESG. A Trump administration rule issued in 2020 didn’t outright ban ESG investing, but emphasized retirement fund managers’ fiduciary responsibility is to pursue the highest possible returns and ESG factors could only be considered as a tiebreaker of sorts, if the risks and possible returns of multiple investment options were deemed similar. Biden’s Labor Department amended that rule in late 2022, clarifying that these managers can consider ESG factors when expected returns from various investment options are otherwise expected to be equivalent. Biden vetoed Congress’ attempt to overturn this rule change, which some researchers say could influence investors’ decisions at the margins but isn’t a major shift. 

“When you look at the text of the rule, it does not alter the requirements under [the Employee Retirement Income Security Act] to invest with an [eye] towards the pecuniary gain for the beneficiaries,” said Jennifer Schulp, director of financial regulation studies at the libertarian Cato Institute. “In that way, the rule is not very different from the Trump rule even though they have different language.” 

Not that you’d know it from the rhetoric. “This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like,” Biden said Monday, explaining his veto. “Your plan manager should be able to protect your hard-earned savings—whether Rep. Marjorie Taylor Greene likes it or not.” White House spokesperson Robyn Patterson said Monday the bill would have jeopardized “the hard-earned life savings of cops, firefighters, teachers, and other workers–all in service of an extreme, MAGA Republican ideology.”

Indeed, the legislation Biden vetoed did have support from noted MAGA extremists like … Sens. Joe Manchin and Mitt Romney. “This Administration continues to prioritize their radical policy agenda over the economic, energy and national security needs of our country, and it is absolutely infuriating,” Manchin said in a statement after Biden nixed the bill. Romney echoed the frustration: “This is a mistake. Democrats can’t get their radical policies through Congress, so they hope asset managers will do the work for them.” 

With limited bipartisan support—among Democrats, only Manchin and Sen. Jon Tester of Montana backed the bill in the upper chamber and Rep. Jared Golden of Maine in the lower—it’s unlikely the measure will garner enough support to override Biden’s veto. Texas is leading a multi-state lawsuit opposing the rule, and states are moving ahead with other anti-ESG measures. This month, Florida Gov. DeSantis announced an 18-state alliance to support “removing all state pension funds and state-controlled investments from firms that follow the ESG model of ‘politics before fiduciary duty.’”

In the meantime, Schulp says folks watching their pensions from home needn’t fret about the ultimate outcome for the Labor Department’s rule, whatever it may be. “The rhetoric on the Republican side that this is going to cause some, say, dramatic decrease in attention to returns for pension investing is overblown,” she told The Dispatch. “The rhetoric on the Democratic side that this is going to open up a lot of capital for green or social justice investing is also overblown… The political rhetoric on both sides of this is out of control.” Investment strategies may change, but some things never do.

Worth Your Time 

  • In a profile of GOP Rep. James Comer of Kentucky, Jonathan Swan and Luke Broadwater detail the fourth-term congressman’s tenuous position as the chairman of the House Oversight and Accountability Committee, the tip of the Republican investigative spear pointed at the Biden administration. “Mr. Comer, who voted to certify Mr. Biden’s victory and was a favorite among Democrats in Kentucky’s Legislature, has transformed himself to command the Republican war machine in Congress—becoming a high-profile example of what it takes to rise and thrive in the Fox News-fed MAGA universe,” they report for the New York Times. “Mr. Comer’s committee is populated by the most hard-line House Republicans. Mr. Comer conceded he was limited in how much he could control such members given their outsize influence in the party. ‘It’s hard for a coach to tell LeBron James what he’s doing wrong,’ he said. Fellow Republicans argue Mr. Comer is as well suited as anyone to manage rapacious expectations from the party’s base. ‘He’s likely to do it in a more kind of level-headed, less flamboyant way than some members of the House might do that job,’ Senator Mitch McConnell, Republican of Kentucky and the minority leader, said in an interview.”
  • Mike Pence would very much like to be president, but as McKay Coppins reports for The Atlantic, the former vice president is a sort of “Goldilocks” candidate: not Trumpy enough for some, too Trumpy for others, and just right for almost no one. “Of the 34 Republicans who participated [in pollster Sarah Longwell’s focus groups], I heard only four people say they’d consider Pence for president—and two of them immediately started talking themselves out of it after indicating interest,” he writes. “What to make of that 6 to 7 percent he gets in the primary polls? ‘I imagine there’s a cohort of GOP voters who are not particularly engaged who don’t want Trump again, and Pence is the only other name they really know,’ Longwell speculated. That, or ‘they’re all from Indiana,’ the state where Pence served as governor. A second Republican pollster, who requested anonymity to offer his candid view, told me, ‘Seven percent is a weak showing for the immediate former VP.’”

You Couldn’t Script It Any Better

(Besides Team USA winning, of course.)

Presented Without Comment

Also Presented Without Comment

Toeing the Company Line

  • Will Trump be indicted? Should he be? What will Ron DeSantis do if he is? Sarah, Andrew, and Drucker answered all those questions and more on last night’s Dispatch Live (🔒). Members who missed the conversation can catch a rerun—either video or audio-only—by clicking here
  • In the newsletters: Haley details the Senate debate over ending a pair of war authorizations and Nick argues (🔒) House Republicans shouldn’t interfere in Alvin Bragg’s (ill-advised) prosecution of Donald Trump. “[Reps.] Jordan, Comer, and Steil sent their letter before anyone had seen the indictment,” he writes. “They’re not responding to facially ludicrous criminal charges or weak evidence. They’re firing a last-second shot across Bragg’s bow based on guesswork to try to intimidate him into not charging Trump at all.”
  • On the podcasts: Jonah is joined by Phillip K. Howard to discuss his new book on public sector unions and Vital Interests author Tom Joscelyn makes his triumphant return to the Dispatch Podcast to discuss his time working for the January 6th Committee.
  • On the site today: Price delves into the specifics of the possible case against Trump and Jonah argues explains why he thinks that case is seriously flawed. Plus, Danielle Pletka looks at how Giorgia Meloni’s first six months as Italy’s prime minister have defied her portrayal in the media. 

Let Us Know

Is the Biden administration right to regulate PFAS?

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Declan Garvey

Declan Garvey is the executive editor at the Dispatch and is based in Washington, D.C. Prior to joining the company in 2019, he worked in public affairs at Hamilton Place Strategies and market research at Echelon Insights. When Declan is not assigning and editing pieces, he is probably watching a Cubs game, listening to podcasts on 3x speed, or trying a new recipe with his wife.

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Esther Eaton

Esther Eaton is a former deputy editor of The Morning Dispatch.

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Mary Trimble

Mary Trimble is the editor of The Morning Dispatch and is based in Washington, D.C. Prior to joining the company in 2023, she interned at The Dispatch, in the political archives at the Paris Institute of Political Studies (Sciences Po), and at Voice of America, where she produced content for their French-language service to Africa. When not helping write The Morning Dispatch, she is probably watching classic movies, going on weekend road trips, or enjoying live music with friends.

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Grayson Logue

Grayson Logue is the deputy editor of The Morning Dispatch and is based in Philadelphia, Pennsylvania. Prior to joining the company in 2023, he worked in political risk consulting, helping advise Fortune 50 companies. He was also an assistant editor at Providence Magazine and is a graduate student at the University of Edinburgh, pursuing a Master’s degree in history. When Grayson is not helping write The Morning Dispatch, he is probably working hard to reduce the number of balls he loses on the golf course.