Today Jacob Lew heads to the hill for two Senate hearings on his nomination to be the new director of the White House's Office of Management and Budget. He is expected to be confirmed.
The hearings will likely focus on budgetary issues, but no less important is another division of OMB: the Office of Information and Regulatory Affairs (OIRA), the office charged with coordinating regulatory policy. The policy context is this: from salmonella-laced eggs to the BP oil spill, we are in a year of regulatory disasters. No one agency or individual is responsible for the breakdown; the problems are pervasive and the fixes often not easy.
The OMB could be playing a positive role in supporting regulatory agencies and helping to stop the next crisis before it happens. Instead, it has too often busied itself meddling in agencies' processes, and rushing to stand up for industries with questionable claims of high regulatory compliance costs. Meanwhile, in the real world, toys are tainted with lead, the coal ash ponds are leaking chemicals into the water, and we move from one food contamination episode to the next.
Full textThe below is testimony (PDF) given today by CPR President Rena Steinzor at the EPA's public hearing on coal ash regulation. The hearing, in Arlington, VA, is the first of seven; the public comment period has been extended to November 19. See CPR on Twitter for updates from the hearing.
We are all familiar with the psychological studies that have become a cottage industry at American universities. Consider this one. A presumably dead cockroach is “medically sterilized”—and I honestly do not know what that means—and then dipped into a glass of juice in front of a group of people. The purpose: to gauge the test subjects’ willingness to drink the juice after the cockroach is removed. To the researchers apparent surprise, the people—all victims of an irrational phenomenon known as “stigma effect”—would not drink the juice, although they were willing to take a sip if the cockroach was merely laid to rest peacefully beside the glass, as opposed to dunked inside it. As amazing, they refused to drink the dunker juice, even if it was placed in a freezer for one year or the cockroach was dipped in the juice very, very quickly. So, conclude the researchers, “while shunning may have evolved from an adaptive response to avoid contaminated food, it can be triggered in inappropriate circumstances.”
Now why on earth am I bringing up this bizarre experiment in the context of this perfectly staid hearing on a hyper-technical EPA rulemaking proposal, which covers—count ‘em—138 pages in the Federal Register, leaving many supposedly more relevant points to be addressed by witnesses today? I am telling you the cockroach story because it is at the root of the reasons why the OMB Office of Information and Regulatory Affairs (OIRA) mangled this rulemaking, constructing a fanciful but deadly cost-benefit analysis that predicts negative net benefits of as much as $239 billion if EPA regulates coal ash appropriately, as a special waste under subtitle C of the Resource Conservation and Recovery Act. Or, to put it more bluntly, electric utility executives who generate 136 million tons of coal ash annually will squander $239 billion of the nation’s resources over the next 50 years because, suffering from the stigma effect, they will send millions of tons of the stuff to lined landfills rather than dumping it in road beds and mine shafts.
Full textYou may have read of a letter sent by 31 Representatives to the EPA today to complain about coal ash regulation. I wasn't planning on dignifying it with a response, but sometimes something just calls out for a little highlighting. Like when the members write:
"States have been effectively regulating CCRs"
That's actually a case they want to be on record making? Really?
View of the TVA Kingston Fossil Plant fly ash spill. Photo used under Creative Commons by Brian Stansberry.
Full textThis post was written by CPR President Rena Steinzor and Michael Patoka, a student at the University of Maryland School of Law and research assistant to Steinzor.
Last October, the EPA proposed to regulate, for the first time, the toxic coal ash that sits in massive landfills and ponds next to coal-fired power plants across the nation. The 140 million tons of ash generated every year threaten to contaminate groundwater and cause catastrophic spills, like the 1-billion-gallon release that devastated Kingston, Tennessee in 2008. The EPA recommended that coal ash be listed as a subtitle C “hazardous waste,” making it subject to federally enforceable disposal requirements under the Resource Conservation and Recovery Act (RCRA). But by the time that the Office of Information and Regulatory Analysis (OIRA) was through “reviewing” the agency’s proposal, the rule had been watered down to suggest a choice of three alternatives: the original proposal as well as two much weaker options. In addition, the accompanying regulatory impact analysis (RIA) had ballooned into an impenetrable, strictly quantitative cost-benefit analysis—one that systematically underestimates the benefits and overestimates the costs of subtitle C regulation.
Among the many shortcomings and biases of the RIA, of particular concern is the industry-fueled suggestion that a subtitle C listing would “stigmatize” the beneficial use of coal ash (in products like concrete and wallboard, as well as in road beds and farmlands), even though beneficially used coal ash would remain officially exempt from the rule. Because beneficial use is associated with valuable economic and environmental benefits, this highly speculative “stigma effect” is estimated to cost $233.5 billion in lost benefits—a cost that dwarfs any expected benefits of regulation by several orders of magnitude.
Full textAcross the full spectrum of outside cognoscenti who are focused on the reality that a small office at the White House has final authority over the agencies charged with preventing catastrophes like the BP oil spill and the Big Branch mine disaster, one threshold assumption is sacrosanct. This tiny Office of Information and Regulatory Affairs, now headed by former Harvard Law professor Cass Sunstein, ought to operate in bright sunshine, disclosing fully its communications with the agencies so the public can see its impact on rules and other administrative activities. We have insisted on this point, our loyal opposition at the Center for Regulatory Effectiveness agrees with it, and no less a bipartisan body than the Government Accountability Office has found that such transparency is too often lacking. As a matter of fact, the goal is not at all abstract: the Executive Order authorizing OIRA, 12866 contains specific directives requiring such disclosure. The EO, issued by the Clinton Administration and continued under Presidents George W. Bush and Barack Obama, requires those transparency measures in order to deflect the perception that OIRA is a court of last resort for aggrieved industry groups and a killing ground for strong regulation. Indeed, Peter Orszag, director of the Office of Management and Budget and Sunstein’s boss, issued a memorandum in December 2009 assigning OIRA the task of enforcing transparency throughout the government.
So how has transparency fared during OIRA’s Sunstein era? Not so well. OIRA under Sunstein has not only asserted that any agency or department can condemn action by another agency in secret, it is apparently enforcing a policy that outside stakeholders seeking an audience with Sunstein or his political deputy, Mike Fitzpatrick, must not reveal the content of a meeting, at pain of blacklisting from future meetings.
Full textThe Albany Times Union had a nifty, if depressing, scoop over the weekend in "Paterson bottling up mercury ban at plant":
Efforts by the state Department of Environmental Conservation to ban mercury-tainted coal fly ash used by a Ravena cement plant have been bottled up for more than 19 months in a special regulations review office of Gov. David Paterson.
The DEC request to yank permission from Lafarge North America for ash use at its Route 9W plant has been sitting in the Governor's Office of Regulatory Reform since October 2008, according to records obtained under the state Freedom of Information Act by the Times Union.
This isn't the first time we've heard about questionable regulatory review maneuvers in the Paterson administration; last August, the governor issued an executive order seeking to "eliminate unnecessary regulatory requirements" by "removing needless and excessive rules." Here in this space, Rebecca Bratspies laid out how that move was a big win for industry, and Sidney Shapiro compared the announcement to Ronald Reagan's Task Force for Regulatory Relief.
Full text“Although the 1976 RCRA [Resource Conservation and Recovery Act] statute does not require benefit-cost justification of RCRA regulations, this RIA [regulatory impact analysis] presents a qualitative benefit analysis for compliance with OMB’s 2003 ‘Circular A-4: Regulatory Analysis’ best practices guidance.” This statement comes from the executive summary to the cost-benefit analysis (CBA) that EPA sent to OIRA last October with its original proposed rule for regulating coal ash waste, and it is without a doubt the most important sentence in the entire 165-page document. It is, in its way, a yelp of protest from EPA against being required by OIRA to spend time and resources measuring the likely effectiveness of a proposed regulation by standards not required by statute.
Not surprisingly, OIRA was unmoved. Indeed, a before-and-after comparison of EPA’s original and final CBAs released with EPA’s proposed coal ash rule reveals the extent to which OIRA used the cost-benefit process as a lever to undermine EPA's policy judgments on a host of issues. During the six months that the coal ash rule was under review, OIRA’s number-crunching economists forced EPA to rewrite the document, producing a 242-page CBA containing analysis that goes far beyond what OIRA guidelines require (never mind the law). The incident demonstrates that President Obama’s OIRA is not espousing anything like the kinder, gentler CBA that Cass Sunstein promised at his confirmation hearing a little over one year ago.
As EPA noted, the relevant portion of RCRA does not require CBA, making OIRA’s extensive focus on this document all the more troubling. Instead, the statute charges EPA to weigh eight factors when deciding whether to regulate coal ash waste as a hazardous waste or not—a decision that is referred to as the Bevill determination. Some of these factors relate to environmental and public health considerations, while others relate to costs and technological feasibility concerns. Crucially, RCRA leaves it up to EPA on how to weigh these various factors; for example, the agency could give greater weight to the environmental and public health considerations as compared to cost and feasibility concerns. By imposing CBA, however, OIRA robs EPA of this discretion, essentially forcing the agency to give equal weight to “cost” factors (e.g., feasibility concerns) and “benefits” factors (e.g., environmental considerations). OIRA lacks the expertise and the statutory authority to interfere with these kinds of policy judgments.
Full textThis post is written by CPR President Rena Steinzor and CPR Policy Analyst James Goodwin.
President Obama appointed Lisa Jackson to head the Environmental Protection Agency (EPA) on December 15, 2008. Confirmed by the Senate on January 22, 2009, she is a Cabinet-rank member of the Administration and the first African American to serve as the public face of environmental protection for any administration. Whether she wears an EPA baseball cap and windbreaker to tour the waterfront of her native New Orleans, now threatened by the BP oil spill, or she sits in the witness chair with television lights in her face to testify before any one of the dozen congressional committees claiming a piece of her agency, Jackson rises or falls on her own merits. And she has mostly been rising, driving her 18,000 member staff to new levels of activity and invention.
How lamentable, then, that her first notable reversal was administered not by Mother Nature, Congress, the economy, or even her own mistakes, but rather by an unnamed squad of number-crunching economists working in the bowels of Peter Orszag’s Office of Management and Budget (OMB), and specifically within the Office of Information and Regulatory Affairs (OIRA), headed by Cass Sunstein. And what a nasty reversal it was. Taking a page out of the George W. Bush Administration’s playbook, the economists decided to second-guess Jackson’s judgment on how to deal with 1,000 or so leaking, unstable coal ash dump sites threatening communities across the country. A few days after announcing its proposal to the public, EPA at last gave us a peak behind the curtain of obscurity OIRA had erected around months of intensive industry lobbying, posting a red-lined version of the toxic coal ash regulatory proposal it sent over to the economists last October.
Full textEPA Administrator Lisa Jackson was in a tough position on coal ash. If you are African American and low-income, you have a 30 percent greater chance of living near a big pit of this toxic brew than a white American, so Jackson correctly decided that such an important environmental justice issue should be at the forefront of the Obama Administration’s agenda. But Jackson was also taking on Big Coal, a special interest historically near and dear to swing voters in Ohio and Illinois. Nevertheless, this sturdy “eco-warrior,” as she was recently dubbed by Rolling Stone, marched forward, right into the basement of the White House and the chilling influence of Cass Sunstein and the economists at the Office of Information and Regulatory Affairs.
Jackson’s tough, but as yet secret, regulatory proposal arrived in crisp fall weather, only to be greeted by a tsunami of industry lobbyists, who visited and revisited the Office of Information and Regulatory Affairs. By the time the spring flowers were out, Jackson was forced to take a pass on getting hard-hitting regulation on a speedy path to implementation. After the long scuffle with OIRA, she instead announced that EPA was considering two strikingly different alternatives, thereby postponing any definitive action for at least six months and, far more likely, a year or more. Then, to add insult to injury, she stepped in between angry activists and OIRA, trying in vain to slap lipstick on a not particularly cute pig.
Jackson called her mammoth 563-page Federal Register a “proposed rule” but in every reasonably understood sense of that term, it is nothing of the sort. Instead, it has what we can call an “OIRA/industry proposal;” an “EPA/environmentalist” proposal; and a proposal so bad that it has no parents. Because EPA is actively considering two very different approaches and potentially a third, unimaginably bad idea, no concrete target emerged from this latest round of negotiation. Instead, EPA will almost certainly have to go back and get another round of public comment on a single approach before making a final selection. Or, as EPA announced haplessly: “Given the inherently discretionary nature of the decision, the complexities of the scientific analyses, and the controversy of the issue, EPA wants to ensure that the ultimate decision is based on the best data, and is taken with the fullest possible extent of public input.”
Full textCPR President Rena Steinzor has issued this statement on today's coal ash news. She says:
Because EPA is actively considering these two very different approaches, it has not actually proposed anything from a regulatory perspective. The EPA will almost certainly have to go back and get another round of public comment before making a final decision, which is not what Jackson wanted when she walked into OIRA’s door.
...
The White House has met with industry representatives on this issue literally dozens of times, and it's no surprise those meetings netted a delay. The administration could and should have moved ahead months ago with one strong proposal to tackle toxic coal ash.
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