Across 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 textWith characteristic audacity, the Wall Street Journal editorial page today is arguing against the precautionary approach to environmental policy that undergirds our system of environmental laws, even as the oil continues to gush into the Gulf of Mexico. Instead, they want to shift the burden of proof and only allow regulators to restrain corporate greed when the government can first quantify and monetize the environmental harm that will result and demonstrate that it outweighs the money to be made by taking environmental risks. The problem is, of course, that when you require cost-benefit analysis, the environment loses, because most of the values at stake on that side of the equation—human lives, air you can breathe, water you can swim and fish in—just can’t be measured in dollar terms.
The editorial writers of the Wall Street Journal lament that the disaster in the Gulf is causing a resurgence of the precautionary principle in environmental policy, which they claim was long ago “discredited” in favor of cost-benefit analysis. This battle is as old as the environmental movement itself. From the beginning, advocates of environmental protection have argued for a precautionary approach to environmental hazards, while industry has argued for cost-benefit analysis. But the Journal doesn’t quite get its history right. Despite the enormous amount of money they’ve put into this fight, industry hasn’t won—at least not yet.
Far from being “thoroughly discredited,” the precautionary principle is widely accepted throughout the world. It forms the basis for a whole host of international environmental treaties and agreements, including the Rio Declaration, negotiated by the first President Bush. And, as the Journal acknowledges, it undergirds the “architecture” of much of our domestic environmental law.
Full textCPR President Rena Steinzor has an op-ed in this morning's Baltimore Sun on the various regulatory failures at work in the BP oil spill. She writes that important questions need to be answered "about how the federal regulatory system allowed BP and other oil companies to drill in waters so deep without effective fail-safes," and continues:
In truth, this is just the last in a string of profit-driven tragedies that have horrified us recently. Consider the 29 workers smothered in a West Virginia mine shaft; salmonella-laced peanut butter that killed nine and sickened thousands; the recall of 8 million Toyotas after as many as 89 people were killed in sudden acceleration incidents; children's toys slathered with lead paint; drywall venting sulfuric acid into living rooms; and now the worst environmental disaster in our history, which initially killed 11 workers.
The companies that caused these tragedies deserve much of the blame, and where crimes were committed, prosecutions and civil litigation should follow. But it's also vital to understand just why the regulators charged with the job of preventing such disasters have failed so spectacularly.
She goes on to dismantle a couple of right wing arguments against inconveniencing industry -- the Rand Paul line that "accidents happen," and we should just live with them and leave industry alone; and the notion that the spill demonstrates that "big government" regulation doesn't work and that we should rely on corporate self-interest to save us from such disasters.
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 textOur loyal opposition at the Center for Regulatory Effectiveness has engaged in some very creative reading of legal opinions in order to breathe new life into a discredited anti-regulatory tool of the George W. Bush era: the Information Quality Act. This pesky little statute instructs the Office of Management and Budget to “provide policy and procedural guidance to Federal agencies for ensuring and maximizing the quality, objectivity, utility, and integrity of information (including statistical information) disseminated by Federal Agencies.”
Enacted as an appropriations rider in 2001, the seemingly innocuous restatement of the goal that the government should always strive to be accurate was the brainchild of Jim Tozzi, a former Reagan Administration OMB official, who has since used it to force internal reviews of EPA pesticide and sewage sludge regulations, among other items. Tozzi’s colleague William Kovacs of the Chamber of Commerce pronounced the statute “the biggest sleeper there is in the regulatory area,” predicting that it “will have an impact so far beyond anything people can imagine.” (For more, see an excellent 2004 analysis of these efforts by Washington Post reporter Rick Weiss and CPR’s 2006 white paper on the subject.)
In 2006, thankfully, a panel of conservative Fourth Circuit Court of Appeals judges deflated the high hopes of IQA proponents, in a case in which the Salt Institute (a trade association for the salt industry) and the Chamber of Commerce sought to use the statute to block federal action on the grounds that the information on which it was based was insufficiently vetted. The court showed them the door, declaring unambiguously: “By its terms, this statute creates no legal rights in any third parties. Instead, it orders the Office of Management and Budget to draft guidelines concerning information quality and specifies what those guidelines should contain. Because the statute upon which appellants rely does not create a legal right to access to information or to correctness, appellants have not alleged an invasion of a legal right ….” The plaintiffs had sought to use the statute to compel the federal National Heart, Lung, and Blood Institute to stop advising Americans that curbing their consumption of salt could lower their blood pressure. The three-judge panel probably saw some distasteful handwriting on the wall: open the courts to this kind of quibbling and their dockets would be overrun by arcane disputes over data large and small.
Full textThe EPA had projected an April announcement on the next step in regulating coal ash. But April came and went. The EPA now lists "05/2010" as the projected time for publication of a Notice of Proposed Rulemaking (NPRM) in the Federal Register.
Full textOn March 19, OIRA Administrator Cass Sunstein issued the office's first Review Letter of the Obama Administration, telling the National Highway Traffic Safety Administration (NHTSA) to redo their studies on how to design the labels for the agency’s new “Tire Fuel Efficiency Consumer Information Program.” (For background on Review Letters and the other types of OIRA letters, see here.) Those new studies will delay implementation of the tire efficiency regulation by at least half a year, and likely longer.
Under the tire efficiency program, NHTSA must develop a system for setting tire fuel efficiency ratings and design a label for tire manufacturers to affix to their products that convey these ratings to consumers, so that consumers can consider the fuel-efficiency effects of different tires when deciding which to buy.
When NHTSA sent its draft final rule to OIRA in December, it appeared that the rule was nearly ready to go. The agency had devised a system for rating tire fuel efficiency, and a label for conveying that information to consumers. The agency used extensive survey and focus group research as it designed the label, and it found through that research that it had created labels that were comprehensible and effective in conveying information about a tire’s fuel efficiency rating, and the significance of this rating.
Full textFor the past 6 months, OIRA has hosted an all-out assault on EPA’s proposed coal ash waste rule, as a parade of representatives from King Coal and the coal ash reuse industry have walked in to attack any and every aspect of the hybrid approach the agency reportedly proposed. (Under the hybrid approach, EPA would regulate coal ash waste as a “hazardous” substance, unless it was dedicated to certain forms of beneficial use, in which case it would be regulated as “non-hazardous”.) Because these attacks were being conducted behind OIRA’s closed doors, it's impossible for the public to discern what, if any, effect they were having on EPA and its preferred hybrid approach. As OIRA’s review has stretched months beyond the maximum time limit allowed by Executive Order 12866, we've become more and more concerned.
An important story from Dawn Reeves of Inside EPA last week suggests things aren't looking good for the coal ash rule. Citing an unnamed but “informed” source, Reeves reports that later this month EPA will not issue a proposed rule identifying the hybrid approach as the agency's preferred regulatory option. Instead, the source states that the agency will release a proposal detailing several regulatory options, including the hybrid approach along with several new ones. The story only describes one of these new options, and it's a worrying one, leaving primary regulatory authority with the states.
EPA had said it aims to issue a Notice of Proposed Rulemaking (NPRM) this month. But instead of seeking public comment on the hybrid approach as the preferred regulatory option, Reeves' reporting suggests the agency is instead releasing a proposal that merely identifies for the first time a slew of new, likely weaker regulatory approaches. In essence, it signals that EPA might be taking a big U-turn on its rulemaking for coal ash waste.
Full textThe Competitive Enterprise Institute is upset with the way administrative law works. On Thursday they released their annual report on the costs of regulations. I hesitate to dignify it with pixels, but here goes.
CEI has a problem with agency rulemaking altogether:
Congress should answer for the compliance costs (and benefits) of federal regulations. Requiring expedited votes on economically significant or controversial agency rules before they become binding on the population would reestablish congressional accountability and would help fulfill the principle of “no regulation without representation.”
First, CEI owes an apology to our revolutionary forebears for bending the notion of “no taxation without representation” into an anti-regulatory chant. And while I’m diverting, exactly who is without representation in this construction?
More significantly, long before agencies adopt regulations – and in many cases, a very long time before they adopt them – elected officials have already passed health and safety laws with instructions to the agencies on how rules are to be developed. In theory, the policymaking and political part of the process is supposed to end right there. The agencies are supposed to implement the law, applying whatever technical expertise is required in a way that’s consistent with Congress’s direction.
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