Cross-posted from the Huffington Post.
Eager to blame the state of the economy on the Administration, House Minority Leader John Boehner recently tried to argue that Administration's regulatory agenda is standing in the way of recovery. Sadly for Boehner, he tried to make that case shortly before the fifth anniversary of Hurricane Katrina, and while the smell of the BP oil spill still lingers in the Gulf. By any reasonable measure those two incidents are among the costliest and most devastating examples of the human and monetary costs of lax regulation.
In a letter to President Barack Obama, Boehner criticized the Administration's plans to implement 191 rules with potential economic costs greater than $100 million, arguing that "uncertainty" in the business community about the fate of the regulations is "contributing significantly to the ongoing difficulty our economy is facing." Apparently, Boehner and other opponents of regulation are betting that we'll forget the cost of regulatory failure as they repeat their mantra that regulation costs a lot of money, and that it cannot be good for the economy.
This claim is false on two counts. First, it ignores the reality that the costs associated with regulatory failure usually far outweigh the expense of effective regulation. Various federal agencies failed to protect the Gulf Coast region - first from the impact of Katrina, and then in the case of the BP Oil Spill. The Katrina failure cost billions of dollars, and more than 1,800 lives, to say nothing of the massive disruption to thousands of dislocated families, costs that cannot be measured.
Full textIn November 2008, with Riegel v. Medtronic recently decided, bills introduced into Congress to overturn its effect, and Wyeth v. Levine about to be argued in the Supreme Court, the President of the American Bar Association created a task force to review ABA policies regarding preemption of state tort law. The composition of the task force was equally split between those who generally favor preemption and those who generally oppose it and included both private practitioners and academics (I was one of those academics). Earlier this month the task force unanimously presented its recommendations to the House of Delegates of the ABA, the policy making body of the ABA, and the House adopted those recommendations by an overwhelming majority.
Eschewing any attempt to take a substantive position on the desirability of preemption of state tort law or the lack thereof, the task force focused on the procedures that should accompany any decision to preempt state tort law. The resolution urges that when Congress considers preempting state tort law it should take into account the historic responsibility States have exercised over the health and safety of their populace and to balance that responsibility against the competing concerns for national uniformity. Moreover, Congress should as a regular matter address foreseeable preemption issues clearly and explicitly when it enacts a statute that has the potential to affect state tort law. It should clearly and explicitly state when it intends to preempt state tort law and clearly and explicitly set forth the extent of the preemption it intends, and the extent to which, through a savings clause or other means, it intends not to preempt state tort law. All too often Congress has not spoken clearly, leaving to courts or agencies the federalism balancing that properly lies in the domain of Congress.
Full textCross-posted from Legal Planet.
Administrative agencies sometimes issue regulations that have the effect of overruling state law — and sometimes that is the sole effect of the regulation. This proved quite controversial during the Bush Administration, which used agency rulemaking efforts to cut back on state tort law. The ABA has a adopted a new resolution dealing with this issue. The resolution reads:
RESOLVED, That the American Bar Association urges Congress to address foreseeable preemption issues clearly and explicitly when it enacts a statute that has the potential to displace, supplement, or otherwise affect state tort law by:
(1) clearly and explicitly stating when it intends to preempt state tort law; and,
(2) clearly and explicitly setting forth the extent of the preemption of state tort law it intends, and the extent to which, through a savings clause or other means, it intends not to preempt state tort law or related common law duties
FURTHER RESOLVED, That the American Bar Association urges Congress, when making any decision on whether to preempt state tort law, to take into account the historic responsibility States have exercised over the health and safety of their populace and to balance the competing concerns relating to preemption.
Full textIt turns out there’s more than one way an offshore oil rig can kill a fish. Even when they’re not spewing oil into the ocean, oil rigs kill vast numbers of fish and other aquatic organisms in their daily operations by sucking them up into their cooling water intake systems, where they get squashed against screens and otherwise beat up by the mechanism. Power plants do it too, as does any industrial facility that circulates water for cooling. Congress recognized this problem four decades ago and so put a specific provision in the Clean Water Act directing the EPA to regulate cooling water intake structures. But there’s been a fight raging for years about just how EPA should carry out those responsibilities.
You may remember that the U.S. Supreme Court weighed in on this controversy last year in Entergy Corp. v. Riverkeeper, largely siding with industry to say that EPA could use cost-benefit analysis to set these regulations. Two weeks ago, the U.S. Court of Appeals for the Fifth Circuit weighed in as well, in a decision in ConocoPhillips, et al. v. EPA that essentially kicked another ball back into the Obama administration’s court. That might be good news for the fish, if the decision was simply left to Lisa Jackson’s EPA—the agency Congress entrusted with this responsibility in the first place. But with Cass Sunstein’s Office of Information and Regulatory Affairs (OIRA) likely to meddle in this rulemaking as it has in others, I’m afraid we may end up with a result that’s good for industry but bad for our already struggling aquatic ecosystems.
The Fifth Circuit’s ruling concerned the final “Phase III” of EPA’s regulation of cooling water intake structures, which applies to offshore oil rigs, small power plants and a bunch of other miscellaneous facilities. (Last year’s Supreme Court ruling was on Phase II—existing large power plants.) EPA’s approach to Phase III was a bit schizophrenic, which meant it had something for everyone to hate. In part of the rule, EPA declined to do cost-benefit analysis and imposed stringent requirements on new offshore oil rigs, which industry challenged. But in another part of the rule, relating to existing small power plants and manufacturers, EPA did do a cost-benefit analysis, and on that basis decided not to issue any regulation at all. Environmentalists challenged that part. In its decision two weeks ago, the Fifth Circuit rejected industry’s challenge and upheld the new facilities part of the rule, reiterating what the Supreme Court said clearly in Entergy—that EPA can but doesn’t have to use cost-benefit analysis when setting these regulations. As to the existing facilities portion of the rule, the court granted a joint motion by the EPA and the environmentalists to remand it back to the agency. That’s the ball that’s now in the Obama EPA’s court, along with the Phase II rule, which was remanded following the Supreme Court’s Entergy decision last year.
Full textThe Minerals Managements Service's coziness with an industry it was supposed to be monitoring has brought attention back to an all-too-pervasive problem: regulatory agencies becoming "captured" by the regulated industries.
This morning the Senate Judiciary Committee's Subcommittee on Administrative Oversight and the Courts is holding a hearing on “Protecting the Public Interest: Understanding the Threat of Agency Capture.” CPR Member Scholar Sidney Shapiro is testifying about the nature and extent of agency capture, and what Congress can do about it. (There's also a news release.)
Shapiro says there are three preliminary types of capture:
Shapiro presents four recommendations for Congress:
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Now that Congress has passed legislation creating a new Consumer Financial Protection Bureau in the Treasury Department, attention has shifted to how the Obama Administration will implement the new law.
The issue of who President Obama should appoint to head the new agency is now front and center. Consumer groups and many members of Congress believe that Professor Elizabeth Warren, who came up with the idea for a consumer protection agency for the financial sector and has been an aggressive consumer advocate during the entire financial crisis, should be the President’s choice. The banking industry’s position is “anyone but Warren.”
Elizabeth Warren (who was my colleague at the University of Texas for many years) is the most qualified candidate. Although she would inevitably have to make compromises in launching the new agency, she is a charismatic leader who would remain a strong consumer advocate and will not be bullied or hoodwinked by the banking industry.
As importantly, the appointment will make a strong symbolic statement about the President’s priorities. The appointment offers a unique opportunity for the President to demonstrate to the American public that he is on the side of consumers and not Wall Street.
We should bear in mind, however, that the future of this important agency also depends on other decisions that are being made in the Administration over the next few months. The bureaucratic realities facing a new agency may have as great an impact on its future as the credentials and personality of its first leader.
Full textThe EPA released a guidance document on Monday that promises to integrate environmental justice considerations into the fabric of its rulemaking efforts. Titled the Interim Guidance on Considering Environmental Justice During the Development of an Action, EPA’s Guidance sets forth concrete steps meant to flag those instances in which its rules or similar actions raise environmental justice concerns. Specifically, the Guidance directs agency staff involved in rulemaking to “meaningfully engage with and consider the impacts on” communities of color, low-income communities, indigenous populations, and tribes.
EPA’s Guidance responds to an issue raised by CPR Member Scholars at the dawn of the Obama Administration. In our 2008 report, Protecting Public Health and the Environment by the Stroke of a Presidential Pen, we observed that efforts to address environmental injustice had languished in the 15 years since President Clinton issued the Environmental Justice Executive Order (Executive Order 12898). We urged the new president to use his authority to, among other things, alter a status quo in which agencies too often simply failed to see that their actions had environmental justice implications:
Full textAgencies issue scores of regulations each year that have environmental justice implications. But these agencies often fail to ask who will bear the burdens and who will reap the benefits of a regulation, or to consider whether the regulation ameliorates or exacerbates current inequities. As a result, environmental justice often fails to make it onto agencies' radar screens.
When agencies do identify environmental justice as a potential concern during the rulemaking process, their responses often indicate a misunderstanding of the relevant issues. For example, when EPA purported to assess the environmental justice impacts of its final “Clean Air Mercury Rule,” which would have postponed and weakened reductions in mercury emissions, EPA observed that Native Americans, Southeast Asian Americans, and others would be better off with the rule's meager reductions than with nothing. Indeed, in a particularly callous twist, EPA asked “whether high fish-consuming (subsistence) populations would be disproportionately benefited by the final rule,” despite EPA's own data showing that many in these groups would be left exposed to unsafe levels of mercury in fish.
Cross-posted from Legal Planet.
A key figure in behavioral economics recently issued a warning about over-reliance on its findings. In a NY Times op. ed, Dr. George Lowenstein raised questions about some uses of behavioral economics by government policymakers:
As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address. Indeed, it seems in some cases that behavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics.
Behavioral economics should complement, not substitute for, more substantive economic interventions. If traditional economics suggests that we should have a larger price difference between sugar-free and sugared drinks, behavioral economics could suggest whether consumers would respond better to a subsidy on unsweetened drinks or a tax on sugary drinks.
But that’s the most it can do. For all of its insights, behavioral economics alone is not a viable alternative to the kinds of far-reaching policies we need to tackle our nation’s challenges.
“Very interesting,” you might think, “But what does this have to do with environmental law?”
Full textThe second segment of last night's Daily Show interview with David Axelrod featured a couple minutes on the broken regulatory system and questions of trust in government competence in the wake of the BP disaster.
Axelrod: "I think we've tested the proposition of what no regulation means, and what you get is .. the leak, the mine disaster in West Virginia, and you get an economic crisis."
Full textThere is plenty of environmental despair right now . . . spreading oil in the Gulf, legislative inaction on climate change and a host of other issues, and the sense that for every step forward, there is a special interest that will take the nation two steps back.
So, in this downward spiral of disappointments, is there any ray of hope? Rena Steinzor and Sidney Shapiro hit upon one promising possibility in their important new book, The People's Agents and the Battle to Protect the American Public: Special Interests, Government, and Threats to Health, Safety, and the Environment. After cataloging the sorry state of the regulatory institutions tasked with protecting health and the environment, the authors offer innovative suggestions for a set of positive metrics that not only help hold agencies publicly accountable, but also reward agencies for acting proactively. An added, invaluable attribute of these positive metrics is that they can be implemented without additional funding or substantive legislation. Unlike the 1993 Government Performance Results Act and other efforts to devise benchmarks, moreover, Steinzor and Shapiro’s positive metrics proposal focuses on accessible policy goals, clear measures of goal-accomplishment, and a comprehensive diagnosis by the agency when a goal is not met. The causes of agency failure could include, for example, blaming statutory mandates and judicial opinions as well as internal agency handicaps like resources and staffing. For those of us on the sidelines witnessing a succession of regulatory problems and sensing a future of institutional drift, the notion of grounding agency performance in publicly accessible metrics is sheer genius.
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