One of the biggest challenges for the EPA’s Integrated Risk Information System (IRIS), a database for toxicological information and human health effects data that plays a role in many regulatory safeguards, is how slowly it produces chemical assessments. One of the reasons: chemical industry interests have flooded the comments on many IRIS assessments with pages of non-germane information for EPA to wade through.
In a letter today to EPA Administrator Lisa Jackson, CPR President Rena Steinzor and Policy Analysts Wayland Radin and Matthew Shudtz urge the agency to put reasonable limits on IRIS comments. They looked at 70 comments on 5 recent IRIS assessments (totaling 2800 pages, with attachments), and found that “ interested parties, particularly industry trade associations, frequently submit comments that do not provide relevant and timely information to EPA, but rather waste EPA’s time and resources and delay badly needed public protections.”
The dockets in the five assessments included comments that were redundant, raised non-germane issues, called for reconsideration of settled issues, or were unnecessarily long submissions. From the letter:
Full textWe recommend that EPA take strong steps to establish more effective filters on the deliberate loading of the record with redundant and irrelevant information. The agency should develop criteria for submitting comments and, if submitters do not voluntarily comply with this guidance, the agency should excise the documents filed by egregious violators from consideration. EPA is no less entitled than the judiciary to control the manner in which commenters appear before it to make their arguments. The courts have developed limits on the scope, format, and content of such submissions that greatly facilitate their timely decision-making.
Cross-posted from Legal Planet.
Deregulation is one of Mitt Romney’s five steps in his plan to add jobs. But how do we supposedly know that deregulation will add jobs? It’s a fascinating story, featuring a Nobel laureate’s economic model. The model is very fancy, lots of complex math, but it’s justified on the basis of a discredited study.
The story begins with a new white paper from the Romney campaign. Four leading economists attempt to provide an explanation of the campaign’s job claims. In terms of deregulation, the white paper says, “Recent research by Ellen McGratten and Nobel laureate Edward Prescott concludes that higher regulatory costs reduced both R&D and fixed investment during the financial crisis and its aftermath; and regulations continue to increase.” So getting rid of regulations will increase jobs, apparently. This one paper is the sole basis given for the Romney claim (along with some figures about the length of the Federal Register.) As it turns out, even if the paper were valid, it would really only show that regulatory costs might have contributed to the recession. But let’s move on to the paper itself.
I was definitely curious about McGratten and Prescott, and after a bit of a search I was able to find their paper. Their model is based on real business cycle theory, which holds that economic ups and downs are caused by unexpected shocks to the economy rather than internal factors like collapsing financial markets or technology bubbles. McGratten and Prescott argue that a “key factor” involved in the recession was the diversion of capital to meeting rising regulatory costs under Obama. (On its face, this seems a bit implausible since the recession began before Obama was in office, it hit a lot of other countries besides the U.S. that aren’t subject to U.S. regulations, and it’s been getting better even though more regulations are being created. But I’m not a Nobel-prize winning economist, so I guess I get more easily fixated on inconvenient facts.)
Full textThe Vice Presidential debate is tonight, and I suspect that, among other things, we’ll hear Paul Ryan give some general talk of “reducing red tape” or “reducing government burdens on job creators.” We probably won’t hear a pitch for blocking air pollution rules that would save thousands of lives—which, after all, doesn’t poll well. But that’s exactly what Ryan has voted for, over and over.
Representative Ryan’s record on regulations and the environment has received relatively little attention outside an initial burst in the environmental press, probably because he’s pitched himself on his budget, and has no real environmental initiatives specifically to his name. (Note that his extreme budget proposal, which would slash federal discretionary spending, would devastate the federal agencies charged with protecting the public—though of course we don’t get to hear the specifics, which would be quite unpopular).
What hasn’t gotten much attention, though, is the dozens of times that Ryan has voted to limit agencies’ ability to carry out their statutory mission of protecting people and the environment—most notably his repeated votes to undo critical provisions of the 1990 Clean Air Act Amendments. If enacted, these bills would undermine the Environmental Protection Agency’s (EPA) ability to protect people and the environment against the risks of toxic air pollution. That a candidate for Vice President has publicly supported gutting the Clean Air Act is remarkable. Yet in the era of a new normal for Congressional Republicans—where most of them voted for these bills—Ryan’s positions have generally escaped public scrutiny.
Full textWhen the government succeeds in protecting the public from harms, is that good news – or something to be atoned for by eliminating other successful protections? If the Department of Labor issues a new rule on construction crane safety, saving dozens of lives each year, should the agency also be required to eliminate an existing safety regulation? A policy of regulatory “pay-go” would prohibit agencies from issuing new rules, no matter how beneficial they are, unless they first identify and eliminate an existing rule that involves greater or equal costs for industry.
It sounds absurd, yet it’s an actual proposal supported by some very powerful people, though it has received relatively little attention. Mitt Romney has pledged in his economic plan to implement such a system (p. 61) if he is elected President, even saying that he’d issue an executive order for it on his first day in office (p. 7). Senator Mark Warner has proposed creating such a system through new legislation, though he has not introduced a bill to do so.
In a new issue brief today, Regulatory ‘Pay-Go’: Rationing the Public Interest, CPR Member Scholar Richard Murphy, CPR Policy Analyst James Goodwin, and I examine the concept, showing how it would undermine the regulatory system’s ability to protect people and the environment.
The story of regulatory protections in the last several decades has been one of remarkable success. Our air and water, for example, are far cleaner, by many measures, than they were just decades ago, and that’s largely thanks to government rules. Regulations under the Clean Air Act alone save well over 100,000 lives every year. And vehicle safety standards have reduced the fatality rate per vehicle mile traveled by more than half in under three decades. Yet despite this progress, work remains in these areas and others: tens of thousands of Americans still die each year from industrial air pollution and from automobile collisions.
Full textCross-posted from Legal Planet.
Obesity is an environmental issue because the food system (from farm to table) uses a lot of energy and produces significant water pollution. More food equals a bigger environmental footprint. Sweetened soft drinks are a good example: they use corn sweetener, and corn production has a large footprint because so much fertilizer is required. There is a growing epidemic of obesity and of childhood obesity in particular.
The New Scientist has a very thoughtful review of the evidence regarding the connection between sweetened soft drinks and obesity. The evidence is mixed, but favors the existence of a link — especially if you exclude studies financed by the food industry or by researchers with other close ties to the industry. So there’s some reason to think that New York’s recent ban on supersized soft drinks may reduce obesity. That would be good for the environment, and good for the health of the individuals involved. However, it’s not a slam dunk in terms of proof of causation.
What about personal liberty? It’s at least irksome for the government to tell us what size drink we can order, though I find it hard to believe that it strikes at the heart of personal freedom. (I guess that’s part of why I’m not a libertarian.) On the other hand, as New York’s mayor has pointed out, you can still drink just as much soda if you’re willing to order two drinks instead of one. And many of the consumers are probably minors whose liberty is more constrained, though one might argue that the government would do better to try to educate parents. Of course maybe this drink regulation is just the first step on a slippery slope, and eventually the government will force us all onto a diet of unseasoned tofu! Another reason I’m not a libertarian is that I think it’s a bit premature to worry about this possible slippery slope. ( As long as we’re making a list, a third reason is that, unlike a certain vice presidential candidate, I outgrew Ayn Rand’s pop version of Nietzsche in high school.)
Overall, New York’s effort strikes me as a useful experiment which could shed light on the causal link between sugary drinks and obesity. It would be nice, however, if some other jurisdiction would try an alternative instrument such as a tax on sugary soft drinks or some other market mechanisms, for comparison purposes.
Full textIf cost-benefit analysis (CBA) is really part of the furniture, you wouldn’t think recently departed OIRA Administrator Cass Sunstein would need to dedicate a column to convincing us it’s so. But there it is, and though Sunstein is now but a private citizen like the rest of us, the claims merit a response.
We’re told “cost-benefit analysis has become part of the informal constitution of the U.S. regulatory state,” but that’s some odd constitution – not approved by any legislative body (and often, in fact, at odds with the dictates of the U.S. Congress), followed very selectively, and adjusted quickly at the whims of pressure from powerful industries. Billed as a non-ideological analytical tool, CBA today is in fact the opposite: questionable value judgments masked as technical calculations, all used as window-dressing to block rules that benefit the public but upset powerful industries.
Big industries and conservative think tanks spent years pushing CBA. It never made sense for the public. Cost-benefit says, for example, that a polluter can’t foul a waterway and kill a couple people along the way, unless it makes a whole lot of money doing it. It pretended that the costs and benefits are being put on the same one actor (society). In reality, one party (the polluter) had already put costs on the other (the public). Regulations seek to address that, but CBA starts with the premise that the polluters have the right to inflict the costs – a convenient starting point for a bargain.
Full textThe proposed Independent Agency Regulatory Analysis Act, S. 3468, is a troubling idea. As Rena Steinzor explained here when the bill was introduced, it would authorize the President to bring independent agencies under the purview of OIRA. This proposal is worrisome given the persistent flaws inherent in OIRA’s cost-benefit approach; extending the reach of a poorly functioning process is hard to justify. But even more problematic is where S. 3468 treads: the domain of independent agencies. This development calls for thoughtful attention to the reasons for independence in the first place.
The fundamental difference between executive and independent agencies lies in the degree to which each is insulated from presidential control. For example, executive agencies are typically headed by individuals who serve at the will of the President—but independent agencies are governed by multi-member commissions who are removable only for cause. While executive heads are usually members of the President’s party and serve for indefinite terms, independent commissioners in most cases must come from both parties and have fixed terms that extend beyond a single administration.
It is worth emphasizing that the choice whether to create an executive or independent agency lies with Congress. By choosing an independent form, Congress puts in place a structure meant to insulate those agencies—at least somewhat—from political pressures. How do independent agencies achieve this goal? There are many ways, but here I’ll mention those most salient to S. 3468. First, by being shielded from the threat of removal, independent commissioners can make policies that might conflict with those of the White House but that are more consistent with those of Congress. Second, independent agencies are meant to be experts in their regulatory field. They typically have a narrower scope of responsibility than do executive agencies and can thereby focus their attention on developing specialized knowledge about their regulated industries. Certainly, expertise does not provide a foolproof shield against politics—a point I and others have frequently made—but the possibility of providing at least some insulation is a goal well worth pursuing.
Full textFormer President Bill Clinton, campaigning for President Obama in Florida on Tuesday, the 9/11 anniversary, offered a passionate defense of government employees, the AP noted. I was curious about the whole quote, so I watched and wrote it out (via C-SPAN, at 34:55):
On this day, of all days, we should know that there are good and noble people who work for the government. I remember when the Oklahoma City bombing occurred – which, before 9/11, was the biggest terrorist incident in the United States' history – and a man who had been on my Secret Service detail, had transferred there because he thought it'd be a great place to raise his children, and he was killed that day, along with other people.
And I had, like every politician, on occasion, gotten upset by some example of government waste or something the way we all do, and referred derisively to government bureaucrats. And I promised myself that I would never use those two words together for the rest of my life. I would treat those people who serve our country with respect, whether they're in uniform, in law enforcement, firefighter, nurses, any other things.
Security is one of several good arguments against bureaucracy bashing; there’s also, for example, the case that it harms the agencies, makes it harder for an administration to get funding for those agencies, and the impressive frequency with which specific bureaucracy-bashing claims turn out to be not exactly true.
May President Clinton’s words get the attention they deserve.
Full textMitt Romney added a new twist Tuesday to false right-wing claims about the EPA’s regulation limiting mercury and other pollutants from coal power plants.
EPA estimated that the “utility MACT” will have annual monetized benefits of $37-90 billion and costs of $9.6 billion. A critique we’ve heard over and over again from the industry and its supporters goes something like this: “But only $6 million of those benefits come from reducing mercury pollution, the top target of the rule!” It’s sort of an odd critique, but it’s misleading anyway: the mercury numbers are so low because EPA simply didn’t monetize most of the mercury reduction benefits. Putting a dollar value on not poisoning kids with a neurotoxin is difficult or impossible, and the benefits of the rule far outweigh the costs already anyway.
Now here’s the twist. On Tuesday, the website sciencedebate.org, a consortium of concerned groups, published responses from Barack Obama and Mitt Romney to a questionnaire on science issues. Romney repeated the common right-wing Utility MACT argument (see question 11), and added a different argument:
Full textUnfortunately, President Obama has repeatedly manipulated technical data to support a regulatory agenda guided by politics rather than science. For example, his “Utility MACT” rule is purportedly aimed at reducing mercury pollution, yet the EPA estimates that the rule will cost $10 billion to reduce mercury pollution by only $6 million (with an “m”). This has not stopped the President from trumpeting the rule as “cost-effective” and “common sense,” while claiming it will “prevent thousands of premature deaths.” The trick? Making the rule so expensive that it will bankrupt the coal industry, and then claiming that the elimination of that industry (and its hundreds of thousands of jobs) would have significant benefits.
Reposted from RegBlog.
Traditionally, the field of law and economics has treated government regulation as if it were a mere transaction. This microeconomic approach to law assumes that government regulators should aim to make their decisions efficient by seeking to equate costs and benefits at the margin.
As I argue in a new book, The Economic Dynamics of Law, the microeconomic model of government regulation misconceives the essence of regulation. Government regulation produces not an instantaneous transaction, but a set of rules intended to influence future conduct, often for many years. Accordingly, regulation provides a framework for private resource allocation, rather than allocating the resources itself. This framework performs a macroeconomic role by reducing systemic risks that might permanently impair important economic, social, and natural systems. As such, government regulation resembles monetary policy, which likewise affects, but does not control, resource allocation. 
Properly understood, the relationship between law and the economy implies that private actors can ameliorate the effects of nominally inefficient government decisions. Capitalism works precisely because government cannot assimilate sufficient information to make perfectly efficient decisions. Yet, the neoclassical model of law and economics assigns government the efficiency-enhancing role that properly belongs to private actors.
In The Economic Dynamics of Law I propose a more appropriate way of thinking about regulation. This approach focuses on the shape of change over time in order to avoid systemic risk. We cannot expect government to make perfectly efficient decisions or ensure our future happiness, but we should, at a bare minimum, expect government to ward off catastrophes, leaving much of the fine-tuning to private markets.
I also propose a form of institutional economic analysis that I call economic dynamic analysis, as a way to aid regulators in analyzing threats and responding efficaciously. Economic dynamic analysis requires regulators to study how relevant actors respond to economic incentives, taking into account the level of bounded rationality anticipated in each group of regulated actors. Such analysis requires, in particular, consideration of countervailing incentives that may defeat legal incentives. Economic dynamic analysis also calls for the use of scenario analysis in the case of some of our most serious problems. Finally, it includes empowerment analysis to determine who law might empower or disempower, as an extension of public choice theory.
Full text