Call it buyer’s remorse. The Office of Advocacy of the Small Business Administration (SBA) is publicly—albeit meekly—tiptoeing away from a now-infamous report that it commissioned, in which economists Nicole Crain and Mark Crain purported to find that federal regulations cost the economy $1.75 trillion in 2008. After being roundly criticized by CPR, the Congressional Research Service, and others, SBA’s Office of Advocacy now explains, referring apparently to the $1.75 trillion figure that “the findings of the study have been taken out of context and certain theoretical estimates of costs have been presented publicly as verifiable facts.” While this admission is welcome, it does not go nearly far enough in light of the antiregulatory crusade this misleading, taxpayer-supported report fueled.
Soon after the Crain and Crain report was released in 2010, CPR published a White Paper that demonstrated the unreliability and implausibility of the Crain and Crain report’s methodologies and findings. A few months later, the nonpartisan Congressional Research Service (CRS) released its own analysis of the Crain and Crain report, and its findings were equally damning. Then the Economic Policy Institute (EPI) separately analyzed the Crain and Crain report, and concluded the Crain and Crain report was based on a “flawed economic model and faulty data.” All of this caused then Administrator of the Office of Information and Regulatory Affairs (OIRA) to describe the study as “deeply flawed” and an “urban legend” in congressional testimony. And in addition to employing indefensible methodologies to support their calculations for costs, the Crain and Crain report’s authors ignored regulatory benefits, a move that ensured that the report’s findings would be ripe for precisely the kind of abuse and misuse by anti-regulatory forces that SBA’s Office of Advocacy is now trying to walk away from.
Sure enough, the fantastical $1.75 trillion dollar estimate has been cited time and time again by industry lobbyists and regulatory criticsin Congress, even after the report itself had been debunked, to support troubling anti-regulatory legislation, such as the REINS Act. After handing this Christmas gift to the anti-regulatory forces, SBA’s Office of Advocacy owes the public something more than burying a begrudging acknowledgment of the report’s weakness on an obscure webpage.
When I wrote Dr. Winslow Sargeant, the head of the SBA Office of Advocacy, asking that his agency completely disavow the Crain and Crain report, he offered a disappointing response that attempted to rehabilitate the Crain and Crain report’s findings and methodology. So, it is encouraging that the SBA Office is now being a little more forthright in its criticisms of the report. Yet, the Crain and Crain report has so polluted the public debate over regulatory policy that this half step by SBA’s Office of Advocacy is plainly inadequate. It is time for the agency to disavow the report completely, remove any vestige of it from its website, and adopt procedures to ensure that it does not pay for and publicize similarly misleading research again. As a fiduciary of the public’s money, it owes nothing less.
Full textYesterday, the Environmental Protection Agency (EPA) announced that it was “withdrawing” from White House review its draft final guidance that sought to clarify the scope of the Clean Water Act. The guidance had been languishing at the Office of Information and Regulatory Affairs (OIRA), which oversees the White House regulatory review process, for 575 days, even though Executive Order 12866, the document that governs OIRA review of regulations, caps the length of reviews at 90 days plus a limited, one-time extension of 30 days. This is just the latest episode in what now appears to be a new disturbing trend: The Obama Administration seems to be increasingly relying on a relatively uncommon practice known as a “withdrawal” to unceremoniously dispose of long-overdue OIRA reviews involving important safeguards that are vigorously opposed by industry.
Over the last few months, several other industry-opposed rules have met a similar fate of being withdrawn after sitting at OIRA for well beyond the time limit permitted by Executive Order 12866:
·The National Highway Traffic Safety Administration’s (NHTSA) draft final rule mandating rearview cameras to prevent back-over accidents involving children: “Withdrawn” from regulatory review on June 20, 2013, after collecting dust at the OIRA for 583 days.
·The EPA’s draft proposed Chemicals of Concern list—an absurdly modest regulatory “action” that would have merely identified a handful of potentially harmful chemicals as worthy of additional agency scrutiny: “Withdrawn” from OIRA review on September 6, 2013, after an astonishing delay of 1214 days.
· The EPA’s draft proposal to limit the chemical industry’s specious “confidential business information” claims to shield crucial health and safety data on their new chemicals from public disclosure: “Withdrawn” from OIRA review on September 6, 2013 after 620 days.
Before delving into why this apparent uptick in withdrawals is cause for concern, some background may be in order. A “withdrawal” occurs when an agency voluntarily chooses to “withdraw” a draft proposed or final rule from the regulatory review process before OIRA, as the regulatory gatekeeper, has either formally approved the draft—clearing it for publication in the Federal Register—or denied it, through a “return letter,” sending the draft back to the agency for more work. At least, that’s the theory of how withdrawals work. In some cases, the circumstances suggest that OIRA or other White House officials have pressured the agency into withdrawing a rule.
The Executive Order does impose on OIRA important disclosure requirements that if followed, would help to bring needed transparency to the withdrawal process. Under the Order, these obligations are very broad, requiring OIRA to “make available to the public all documents exchanged between OIRA and the agency during the review by OIRA.” (Emphasis mine.) See for yourself at section 6(b)(4)(D). Presumably, included in “all” these “documents” would be evidence of flaws or policy disagreements that led the agency to withdraw the rule. It would also shed some light on whether this withdrawal was in fact voluntary or under pressure from the White House—and thus just a return letter by another name.
Full textEverything’s upside down. Last week a Democratic president urged a military strike in the Middle East while Republicans dithered about quagmires. Tomorrow, a subpanel of the House Energy and Commerce Committee will launch its first climate change hearing in years and hardly any Obama administration official is willing to show up. Representative Ed Whitfield (R-Ky), who chairs the Committee’s Energy and Power subpanel, says the committee requested presentations from 13 federal agencies. But as of this post only EPA Administrator Gina McCarthy and Energy Secretary Ernest Moniz have promised to testify.
Normally, of course, you can’t stop us progressives from talking about climate change. We talk smack about Canadian tar sands, press universities to rethink their carbon investments, and name hurricanes after Marco Rubio. (The last was really funny, but perhaps not fair.) The President’s all in too. Last August, when he denounced, “the limitless dumping of carbon pollution from our power plants,” I couldn’t get enough.
So, what leaves Whitfield singing, “Can I Get A Witness?”
The thing to know is that tomorrow’s major hearing on climate change is not really a major hearing. It is not even one of those Potemkin major hearings where the participants sit like plyboard cut-outs and pretend to be interested in the topic.
No, this is an ambush. And even the Democrats have figured it out.
So, please, do not expect the panel’s vice chairman, Representative Steve Scalise (R-La) to express concern that because of warming and subsidence, Louisiana is experiencing the fastest rate of sea-level rise on the planet. And, no, Representative Cory Gardner (R-Co) is not going to waste time explaining that his state’s water conservation board worries that Colorado may soon lack water to support its cities, farms, and fish runs. Nor will Representative John Barrow (D-Ga) complain that the Peach State lacks any plan to prepare for such climate shockers as heat waves, vector-borne illness, and increased smog?
You see, the real concern of those in charge of this hearing is not that the climate is changing, but that the government might try to do something about it.
Thus Chairman Whitfield’s invitation letter requests that witnesses come prepared to discuss all upcoming “regulations or guidelines” that would make it harder to pump greenhouse gases into the air, and explain how any “agency funds” have been used to reduce or prepare for climate impacts. As Whitfield explained later to press: "It’s important that we be aware of what unilateral action through regulation and executive orders the administration is looking at.”
One of those “unilateral actions” that Whitfield, no doubt, has in mind is EPA’s upcoming proposal to limit greenhouse gas emissions from new fossil fuel power plants. Let’s ignore for the moment how a rule embraced by an elected president, impelled by a Supreme Court decision (Massachusetts v. EPA), and authorized by an act of Congress (the Clean Air Act) can be characterized as “unilateral.” I need to save something for my law students’ final exam.
The coal industry is extremely worried about this because coal is exactly the fossil fuel that President Obama had in mind when he complained about all that “limitless dumping” from “power plants.” And some Beltway experts are predicting that EPA’s new rules may require new coal-fired power plants to adopt expensive technologies like “carbon capture and storage” (CCS) in order to qualify for permits.
Fancy this, for years the coal industry has been telling us about all its clean coal technology. They said over, and over again that clean coal technology allowed power plants to capture greenhouse gases and pump them underground. We were assured such advancements “aren’t just predictions,” but reality.
Remember the image of the orange extension cord plugged into that polished lump of coal--the one paraded during NASCAR rallies and in between segments of Sunday morning political talk shows?
Remember those television ads with a rainbow coalition of goggled lab and plant workers imploring you to “Believe!”? (Shout it with me: “BELIEVE!”)
And now they say they don’t have it? Let’s have a hearing on that!
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Like no other mammoth corporation that did very bad things—not Enron, not WorldCom, not Exxon, and not even HSBC (which, after all, laundered money for the Mexican drug cartel and was allowed to pay a fine without pleading guilty!)—BP has not lost its arrogant swagger. In a fit of high dudgeon it filed a lawsuit last week challenging the one step the federal government has taken that could actually hurt the company over the long run: the long-overdue debarment of this chronic scofflaw from receiving contracts to supply fuel to the U.S. military.
Despite the semi-hysterical, every-argument-known-to-humans tone of its 127-page legal filing, Bob Dudley, BP’s chief executive officer, has been blithe about the effect of the debarment on its bottom line: “We have largest acreage position in Gulf of Mexico, more than 700 blocks…that’s plenty, we have a lot (sic),” he told the Telegraph, a British newspaper, a few weeks ago. “We have been debarred from supplying fuel to the U.S. military going forward but quite frankly we have a very big business in the U.S. and this is not distracting us from what we do.”
The Clean Water Act authorizes the Environmental Protection Agency (EPA) to debar companies that are not “responsible” from doing business with the government. Other provisions of federal law give the Pentagon the same authority but it could not be bothered to find a different fuel supplier even after the Deepwater Horizon explosion killed 11 and devastated the Gulf of Mexico. Showing itself once again to be one of the last feisty entities left in government, and after contemplating just such an action since 2005, EPA debarred BP in November 2012, just a few short months before the company pled guilty to manslaughter, a slew of environmental crimes, and—just for good measure--lying to Congress. It paid a $4 billion fine—the largest in history but Dudley is apparently still smiling.
The term “scofflaw” should not, of course, be used lightly. For those who need a little boning up on BP’s recidivist history, consider the following and let’s ask ourselves whether we might have avoided the entire Deepwater Horizon horror had EPA been allowed to debar the company back in 2005.
Full textWelcome aboard, Administrator Shelanski. You’re already well into your first week on the job as the head of the White House Office of Information and Regulatory Affairs (OIRA). You’ve already received plenty of valuable advice—during your confirmation hearing and from the pages of this blog, among other places—on how you can transform OIRA’s role in the regulatory system so that it’s not a continued impediment to effective government. For example, many have urged you to end the pattern of long-overdue reviews at OIRA (at last count, 72 of the 137 rules undergoing review are past the 90-day limit provided for in Executive Order 12866), to improve transparency of OIRA’s reviews so that decision-makers can be held publicly accountable for changes they make to pending safeguards, and to restrict the use of cost-benefit analysis as a means for justifying the dilution of safeguards so that they are weaker than what applicable law requires. These practices not only leave the public inadequately protected against unreasonable risks; they also amount to a kind of usurpation of the public will by thwarting the effective and timely implementation of laws enacted through the constitutionally-defined legislative process that is central to our unique republican form of government.
Yes, transforming OIRA so that it is not objectively “bad” is an important start. But now I would like to urge you to think bigger and bolder. In particular, I would like you to re-imagine OIRA’s role in the regulatory system so that it operates as a positive force for “good.” In this new role, OIRA would actively support the efforts of protector agencies—such as the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA)—to achieve the statutory missions that Congress has assigned to them in a vigorous, timely, effective, and wise manner. As you continue to settle into your new job, I encourage you to think about how OIRA can start taking the following affirmative steps:
Full textThe confirmation hearing for Howard Shelanski, President Obama’s pick to serve as the Administrator of the White House Office of Information and Regulatory Affairs (OIRA) is set to take place Wednesday before the Senate Homeland Security and Government Affairs Committee. If confirmed, Shelanski would become the Administration’s new “Regulatory Czar,” a description that indicates the significant influence OIRA’s administrator has concerning what agency rules look like and, indeed, whether those rules are issued at all.
Shelanski’s confirmation hearing comes at a crucial juncture in the Obama presidency. Progress on many important rules has been halted, including the EPA’ rule to limit greenhouse gas emissions from future power plants. Of the 139 reviews currently pending at OIRA, 71 are beyond the 90-day limit set by Executive Order 12866. A number of rules have been under review for a year or even two years. If the President is to live up to his promise in his first post-election State of the Union address to take decisive action on pressing issues such as climate change, OIRA will have to change its tune. We will be listening during the hearing to see whether Shelanski is prepared to finish up regulations that are necessary to protect the public and the environment, rather than continuing the tortoise-like review process that has characterized the President’s first term. The answers to the following questions will provide the answer:
Will Shelanski ensure the quick completion of reviews for rules that have been stuck at OIRA for well beyond the 90-day limit in Executive Order 12866? Senators should ask about the many rules that are pending at OIRA, such as the EPA’s Chemicals of Concern rule (stuck since May, 2010); the Department of Transportation’s Requirements for the Transportation Of Lithium Batteries (since October, 2010); the Occupational Safety and Health Administration’s (OSHA) Silica rule (since February, 2011), OSHA’s Injury and Illness Recording Requirements (since November, 2011); the National Highway Traffic Safety Administration’s Rearview Camera rule (since November, 2011 despite a legislative deadline of February, 2011); and the Department of Energy’s Federal Building Standards rule (since December, 2011).
Full textLate Tuesday afternoon, Senators Sheldon Whitehouse (D-RI), Tom Harkin (D-IA), Ben Cardin (D-MD), and Richard Blumenthal (D-CT) and U.S. Representatives Henry A. Waxman (D-CA) and Ed Markey (D-MA) sent a letter to White House Office of Management and Budget Director Sylvia Burwell urging her to take "prompt action" to implement rules and regulations held up at the Office of Information and Regulatory Affairs (OIRA). The letter notes that under Executive Order 12866, OIRA reviews of agency draft rules must be completed within 90 days, and that 14 of the 20 EPA rules currently undergoing OIRA review have been languishing for more than 90 days, 13 of them for more than a year.
In a statement this morning, CPR's Robert Verchick, a former EPA official, applauded the Members of Congress for taking on the issue. He said:
Congressional deadlock is often cited as the primary reason for government inaction, but as these key Members of Congress note in their letter, the President's own White House staff is delaying rules that could improve the quality of life for millions of Americans with the stroke of a pen.
EPA's proposed "Chemicals of Concern List rule" has been languishing at OIRA for more than three years, that for a proposal which would provide for nothing more than the simple disclosure of such potentially harmful chemicals, as phthalates, PBDEs, and BPA. Consumers and taxpayers deserve to know which cancer-causing and endocrine-disrupting chemicals are in the products they buy and use. But the President's OIRA is sitting on the rule. Action on this and the other rules bottled up at OIRA is long overdue. The Senators' and Representatives' letter reflects an appropriate sense of urgency.
Verchick was the Deputy Associate Administrator for Policy at the EPA during the first Obama Administration.
CPR Member Scholars have published extensively on the problems at OIRA. Read more on our Eye on OIRA page.
Full textAs the scandal du jour over the pure lug-headedness of some IRS staffers reminds us, any screw-up, anywhere in the government, will make its way to the White House press briefing room in about a nanosecond of Internet real time. Suspicion is deeply bred into the press corps, and appropriately so. For that reason, the 2,000 or so people who directly serve on the President's White House staff, but who remain faceless to the rest of us, insist on maintaining control over anything that could embarrass him, including dozens of health, worker safety, and environmental rules that might engender so much as a whiff of controversy or attract a smidgen of opposition from powerful special interests.
In this vein, we look forward to the confirmation hearings of one of the few White House politicos actually subject to the Senate's advice and consent—Howard Shelanski, President Obama’s nominee for the powerful position of “regulatory czar,” a.k.a. Administrator of the Office of Information and Regulatory Affairs (OIRA), located within the White House Office of Management and Budget (OMB). Dr. Shelanski, a lawyer (Berkeley ’92) and Ph.D. economist (Berkeley ’93), was most recently the chief number-cruncher at the Federal Trade Commission (FTC), giving rise to speculation that he will spearhead an effort to bring independent agencies like the Securities and Exchange Commission (SEC) under Executive Order 12,866, which is read to require elaborate cost-benefit analyses before the issuance of any rule or guidance that upsets powerful industries.
Given the high dudgeon of investment bankers these days—the New York Times recently reported their determination to sabotage new derivatives (!!) rules under consideration at the Commodities Futures Trading Commission—bringing the independent agencies to heel is undoubtedly a priority for the waves of lobbyists who swarm the White House staff each morning. But we hope Shelanski will be called to account for a more appropriate agenda.
Notwithstanding the loud and endless gnashing of teeth by conservative groups, the truth is that the total number of significant, substantive rules issued in 2012 (848) was substantially lower than the number issued in the last year of the George W. Bush Administration (1,063), and 2013 looks to be shaping up as the lowest (at the current rate, a projected total of 579) since 1997. Some illuminating tables and a list of delayed rules prepared by regulatory analyst Curtis Copeland, a respected retiree from the Congressional Research Service who spoke at a recent CPR event, bear this out. In fact, counting all the little stuff, including routine approvals by the federal government of programs implemented by the states, at the rate it is going, the Obama Administration will produce this year considerably fewer than half the “rules” (1,360) that the George W. Bush Administration did in its last year in office (3,085).
Full textEnergy policy in the United States is inextricably linked with questions of environmental protection. Thus, for example, the Obama administration will soon be called upon to decide whether to approve the Keystone XL pipeline, how much (and what kind) of regulation to impose on hydraulic fracturing for natural gas extraction, whether to regulate carbon emissions from existing coal-burning power plants, what proportion of federally owned lands should be devoted to mineral extraction, and whether to allow the expansion of oil and gas drilling in northern Alaska. Each of those pending decisions will not only affect the mix of sources available to meet the nation’s energy needs, but will also have immense consequences for the nation’s environment and, indeed, for the future of our planet.
This link between energy policy and environmental protection is nothing new. It has been evident at least since the beginning of the modern environmental era in the United States. Many of the precedent-setting judicial decisions throughout this era emerged from cases involving a potential clash between energy needs and environmental consequences. These have included disputes over the environmental impacts of coal leasing in the northern plains, offshore oil and gas leasing, geothermal development, hydroelectric power production that is potentially damaging to fish and other aquatic life, the issuance of patents to extract hardrock minerals, and the back end of the nuclear fuel cycle.
Despite this longstanding and apparent overlap of energy and environmental policy, it is perhaps unfortunate that energy law and environmental law in the United States are both based upon a disparate and complicated set of federal and state statutes, regulations, and policies. They exist in separate spheres, with occasional exceptions such as the amendments to the Federal Power Act that require the Federal Energy Regulatory Commission to take the impacts of hydroelectric power production on anadromous fish and other aquatic life into account when making licensing decisions on hydropower facilities. Notwithstanding this tendency toward fragmentation at the national level, one visionary statute may provide a valuable framework for harmonizing the nation’s important environmental concerns with its energy needs: the National Environmental Policy Act of 1969 (NEPA).
Full textCongress created the Office of Advocacy (Office) of the Small Business Administration (SBA) to represent the interests of small business before regulatory agencies. It recognized that, unlike larger firms, many, if not most, small businesses can’t afford to lobby regulators and file rulemaking comments because of the expense involved. The Office was supposed to fill this gap by ensuring that agencies account for the unique concerns of small businesses when developing new regulations. Instead, as new reports from the Center for Progressive Reform and the Center for Effective Government document, the Office of Advocacy is using its resources and influence to weaken the regulatory process, usually at the behest of big business.
The Office of Advocacy has steadily expanded its role in the rulemaking process, creating numerous opportunities to oppose regulation, slow the regulatory process, and dilute the protection of people and the environment against unreasonable risks. Its activities are frequently undertaken in conjunction with corporate lobbies and trade associations that represent the interests of their large business members. Often, it is difficult to find even a sliver of sunlight between the positions taken by the Office and those taken by such prominent regulatory opponents as the big-business-focused U.S. Chamber of Commerce. It turns out that's not by accident: The Center for Effective Government’s report exposes emails between the Office and big business interests demonstrating that the Office takes its lead from big business lobbyists.
The Office of Advocacy bolsters its anti-regulatory efforts by sponsoring research projects with the obvious aim of weakening the U.S. regulatory system. Non-governmental researchers carry out these projects under contracts awarded by the Office with little in the way of oversight or peer review. At least in some cases, these "research" papers are thinly veiled political documents. The most egregious example is the 2010 study by economists Nicole Crain and Mark Crain, which purported to find that the annual cost of federal regulations in 2008 was about $1.75 trillion. As CPR and others demonstrated, the Office ignored serious methodological problems with the report, which rendered it implausible, apparently because the results fit with the Office’s anti-regulatory narrative.
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