What happens next to EPA's fiscal year 1996 budget, now that the House of Representatives has slashed it by one-third? That's the key question as the Senate picks up the debate over environmental funding in September.

The House voted to reduce EPA's budget to $4.87 billion, down from $7.2 billion in fiscal year 1995. Specific cuts included: $550 million from Superfund; $457 million from the agency's general fund for programs and compliance; and a 50 percent cut in enforcement.

The funding cuts in the House went largely unchallenged; what caused vehement debate were 17 amendments to the budget bill that put a number of restrictions on EPA. These add-on stipulations, or appropriations riders, passed by the narrowest of margins. They bar the agency from spending money in the next fiscal year to start up and enforce provisions of the Clean Air Act, Clean Water Act, and Community-Right-to-Know law. For instance:

192 petroleum refineries would not have to spend an estimated $95 million on state-of-the-art pollution controls to meet recently issued air toxics standards.

• No funds could be used for wetlands protection until the Clean Water Act is rewritten.

• EPA would be prohibited from carrying out or enforcing controls on storm-water runoff.

• Expanded reporting requirements on how manufacturers use toxic chemicals would be blocked.

Putting EPA through the budget blender sparked a predictable round of political sound and fury. President Clinton called the cuts and restrictions a "polluters' protection act," and vowed to veto the bill the minute it hit his desk. Vice President Gore complained of "polluters who've got their hooks into the new Congress."

Meanwhile, a leading House Republican defended the action, describing EPA as a kind of "Gestapo" within the government that needs to be brought under control.

Democrats and environmental lobbyists tried to overturn the restrictions by appealing to moderate Republicans, touting polls showing the public to be against a broad attack on environmental laws. Some Republicans wavered, setting off a mini intra-party feud in which hard-edged conservatives were calling moderates "bedwetters" and holdovers from a "country club" era. In the end, the cuts and restrictions remained.

But maybe not for long. The Senate, which takes up action on EPA's budget this month, has powerful moderates on both sides of the aisle who are expected to go easier on the agency. One reason is GOP presidential contenders like Senators Specter and Dole don't want to hand the president a brush to paint Republicans as being cold to environmental health concerns.

If anything, the drama in the House this summer over EPA's future could end up being another warning-and not much more-that the agency better move on its own to ease up on business.

EPA announces 'streamlining' moves

Speaking of cutting business a break, EPA announced in August an action plan to chop away 11 percent of existing, obsolete regs and revise another 70 percent to help businesses "achieve environmental protection goals faster and at less cost," according to a press release issued by the agency.

"We are making it easier for businesses to operate in ways that are cleaner, cheaper, and smarter," stated EPA Administrator Carol Browner. It seemed a message intended as much for anti-EPA hawks on Capitol Hill as for employers and the public.

Highlights of this latest round in "reinventing" EPA include:

• Saving business more than an estimated two million hours per year previously spent on regulatory paperwork. EPA's ultimate goal is to reduce the paperwork burden by 25 percent. For instance, the review of EPA regs mandated by President Clinton has resulted in dropping certain low-risk pesticides, and the paperwork requirements that go along with them, from regulation.

• Saving companies an estimated $5 billion by doing things like streamlining industrial and municipal permit applications to limit discharge of pollutants into waterways.

• Deleting more than 1,400 pages of existing regulations that were obsolete, and planning to revise another 70 percent of the 306 parts of the Code of Federal Regulations that are EPA's responsibility. For example, overlapping EPA and FDA regs for low-risk sterilants were eliminated, leaving only FDA with jurisdiction. Auto repair shop owners are expected to have more flexibility in how they remove auto air conditioning refrigerants.

In related standards-setting action, EPA has issued a final rule that gives states and municipalities a flexible approach for regulating smaller storm water dischargers, and another final rule that allows petroleum refineries to use an "emissions averaging" scheme to cut pollutant levels.