WASHINGTON – The Obama administration is abandoning its plan to immediately tighten air-quality rules nationwide to reduce emissions of smog-causing chemicals after an intense lobbying campaign by industry, which said the new rule would cost billions of dollars and hundreds of thousands of jobs, officials said Friday.

The White House announcement that it was overruling the Environmental Protection Agency's plan to adopt a stricter standard for ground-level ozone came just hours after another dismal jobs reports and in the midst of an intensifying political debate over the impact of federal regulations on job creation.

President Barack Obama is planning a major address next week on new measures to stimulate employment, while Republicans in Congress and on the presidential campaign trail have harshly criticized the administration's environmental and health regulations, which they claim are forcing layoffs and the export of jobs.

The EPA, following the recommendation of its scientific advisers, had proposed lowering the so-called ozone standard from that set by the Bush administration to a new stricter standard that would have thrown hundreds of American counties out of compliance with the Clean Air Act. It would have required a major effort by state and local officials, as well as new emissions controls by industries and across the country.

The administration will follow a more lenient Bush administration standard set in 2008 until a scheduled reconsideration of acceptable pollution limits in 2013.

Environmentalists vowed to legally challenge that standard, calling it too weak to protect public health.

In a statement, the president reiterated his commitment to environmental concerns, but said, "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 a letter to Lisa P. Jackson, the EPA administrator, the head of the White House office of regulatory affairs, Cass Sunstein, said that the president was rejecting her proposal to tighten the standard.

Sunstein said that changing the rule now would create uncertainty for business and local government. He also said there was no compelling reason to rewrite the ozone standard in advance of the scheduled reconsideration in 2013, a key demand of business interests.

Jackson said in a statement, "This administration has put in place some of the most important standards and safeguards for clean air in U.S. history: the most significant reduction of sulfur dioxide and nitrogen oxide air pollution across state borders; a long-overdue proposal to finally cut mercury pollution from power plants; and the first-ever carbon pollution standards for cars and trucks." She said her agency would revisit the ozone standard, in compliance with the Clean Air Act.

Sunstein told Jackson that since the rule is due for reconsideration in 2013, an earlier review would promote confusion and uncertainty.

"In this light," he wrote, "issuing a final rule in late 2011 would be problematic in view of the fact that a new assessment, and potentially new standards, will be developed in the relatively near future."

Environmental advocates expressed dismay at the decision.

League of Conservation Voters President Gene Karpinski issued the following statement: "The Obama administration is caving to big polluters at the expense of protecting the air we breathe. This is a huge win for corporate polluters."

Sunstein said he was carefully scrutinizing regulations across the government to assure that they are cost-efficient and based on the best current science. He said that the EPA's scientific advisory panel should take a closer look at the most feasible level of ozone pollution consistent with environmental and health protections.

The issue had become a flash point between the administration and Republicans in Congress, who held up the proposed ozone rule as a test of the White Houses commitment to regulatory reform and job creation. Imposing the 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 Jackson and with top White House officials earlier this summer seeking to moderate, delay or kill the rule. They told William Daley, White House chief of staff, that the rule would be very costly to industry and would hurt Obama's chances for re-election.

Business Roundtable chairman John Engler said the rule should be reconsidered in 2013, regardless of who is president. But he added that he thought Obama's re-election chances would be better if he dropped or delayed the ozone rule.

Rep. Eric Cantor, R-Va., the majority leader, said this week that the House would review the ozone rule, along with other environmental rules that he characterized as "job-killers." The ozone rule, he said in a memo to Republican members, was one of the most onerous of the administration's proposed rules.

"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," Cantor wrote. He said it could cost as much as $1 trillion and millions of jobs over the next decade.

The current standard for ozone is 75 parts per billion, set by the Bush administration in 2008 over the objections of EPA scientists, who said that a standard between 60 ppb and 70 ppb was needed to protect public health. Jackson made clear her intention to follow the scientific advice and set a new, lower standard, by the end of this year.

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