Earlier this month, representatives from the military and a number of defense contractors had a closed-door meeting with officials at OMB's Office of Information and Regulatory Affairs (OIRA). The topic under discussion was ostensibly a Safe Drinking Water Act regulation for perchlorate—a highly toxic chemical used in the manufacture of rocket fuel—that the EPA is currently considering. A closer look at the documents provided to OMB at the meeting suggests that the military officials and defense contractors had an even broader agenda in mind: making sure OMB continued to be a venue in which executive agencies affected by environmental, health, and safety regulations (what I will call “affected agencies”) can seek to interfere with or dilute those proposed regulations they find most inconvenient.
When it comes to environmental, health, and safety regulations, affected agencies—the Departments of Defense and Energy, in particular—are not all that different from corporations. Like corporations, they must comply with EPA regulations, and for the Pentagon—the nation’s biggest toxic polluter—that can cost a little bit of money. As a result, these agencies have every incentive to behave like corporations that participate in the regulatory process—to try to delay, weaken, and otherwise oppose many of the environmental, health, and safety regulations that EPA proposes. During the Bush II Administration, OMB became the preferred venue for affected agencies to interfere with regulations they disliked. OMB's relatively close position to the President and its general lack of transparency meant that preferred agencies like the Pentagon were given virtual veto power over less preferred agencies like EPA. In fact, the long, sad history of the effort to regulate perchlorate is the perfect case study.
Full textWhat was the cost, in dollar terms, of the nine lives lost in the DC Metro crash on Monday? And how does that compare to what the cost would have been to prevent the accident, or lessen the severity of it? Should we do a cost-benefit analysis to determine the best policy?
Edward Tenner's post at the Atlantic looks at the absurdity of the proposition:
The disturbing truth is that even at the old, higher number, the loss of 9 human lives would not be grounds for replacement of the older model cars offering less survivability. Even if all nine casualties could have been spared, the $888 million estimate cost of replacing 1970s cars newer, safer models would have been almost $100 million per life, more than twelve times the pre-2008 $8.04 million statistical value of life used by the EPA.
This makes me think. In terms of economic efficiency, aren't Metro and most other public transportation systems arguably way too safe?
Well, you get the point.
Full textCass Sunstein had his confirmation hearing Tuesday; it was well-attended and anti-climactic. President Obama's nominee to head the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) testified for about an hour, and Senate approval of the nomination seems assured. Ironically, in a perfect example of timing being everything, at about the same hour that Sunstein took his seat in front of the Senate Committee on Homeland Security and Government Affairs, a story hit the media fan in Washington showing that for the past several months, it has been business-as-usual between OMB and EPA with respect to climate change, with the economists of the first subjecting the scientists of the second to a gauntlet of skeptical questions about whether responding to this urgent problem will cost too much. Full text
With his attractive family and a phalanx of top aides in tow, Professor Cass Sunstein had a cordial, 45-minute hearing before the Senate Homeland Security and Government Affairs Committee yesterday. He was introduced by former student and current Senator Amy Klobuchar (D-MN) who praised Sunstein as a teacher, mentor, and eclectic thinker, all qualities for which he is rightly known. Ironically, however, the remainder of the hearing could be summarized as efforts by the three Senators in attendance--Chairman Joseph Lieberman (I-CT), ranking minority member Susan Collins (R-ME), and Senator Daniel Akaka (D-HI--to get Sunstein to pledge that eclectic thinking will not be his modus operandi at the White House. Full text
With Cass Sunstein's confirmation hearing for "regulatory czar" set for today, CPR Member Scholars Catherine O'Neill and Amy Sinden have an op-ed on the subject in this morning's Philadelphia Inquirer -- "The cost-benefit dodge." They write:
Full textBeginning in the Reagan administration, any regulation with a significant impact has had to pass through Information and Regulatory Affairs' doors for approval. The office's role, frankly, has been to water down health, safety, and environmental regulations - if not drown them entirely.
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Once confirmed, Cass Sunstein will face a choice: rely on cost-benefit analysis with the zeal his past writings suggest he would, modify the process in the hope that it can somehow be mended, or abandon it in favor of a better method. The decision he makes will have profound consequences.
Let's hope we find out what his choice will be during his confirmation hearing. And let's hope he chooses wisely.
Cass Sunstein, President Obama's controversial nominee for Administrator of the Office of Information and Regulatory Affairs (OIRA), will go before the Senate's Homeland Security and Governmental Affairs Committee for his confirmation hearing on Tuesday (May 12). The Regulatory Czar, as this position is known, wields enormous influence over the substance of federal regulations affecting matters as diverse as public health and safety, the environment, and education.
Professor Sunstein's nomination has attracted attention from the public interest community, largely focused on the many controversial stances on regulatory policy that he has taken in his legal scholarship. Here are some of the things I will be listening for when I go to the hearing on Tuesday:
Full textAt long last, the Consumer Product Safety Commission (CPSC) is getting the injection of new blood that it has needed for years. President Obama announced today that he will nominate a new Chairwoman and a new Commissioner for the agency.
This is great news. CPSC has been operating with just two commissioners for several years. As originally designed, CPSC is supposed to have five commissioners and needs a quorum of three to undertake any meaningful regulatory action, such as create new safety standards or issue mandatory recalls. When President Bush was unable to nominate a suitable third commissioner, Congress let CPSC operate temporarily with two commissioners, but only on a limited budget.
Full textLast week I discussed how the institution of judicial review has been used to amplify the deregulatory nature of cost-benefit analysis. This week, I'll talk about some possible remedies.
An unusual synergy exists between the institutions of cost-benefit analysis and judicial review. Under most circumstances, the institution of judicial review is arguably neutral with regard to regulatory issues. When judicial review is applied to a case involving a regulation that has been weakened by cost-benefit analysis, however, the once neutral institution is transformed into one that that can have no other impact than to aid and abet the deregulatory agenda of cost-benefit analysis. This is because when an agency is forced by cost-benefit analysis to promulgate a rule that is too weak to be supported by the underlying statute, any public interest groups concerned with public health, safety, and the environment is left with a difficult decision to make. If they challenge the rule in court and win, theirs will be a Pyrrhic victory, because everything would return to the pre-regulatory status quo where no protections are in place, while the agency returns to promulgating a new rule. If, however, they decide not to challenge the rule, then they will at least have some protections in place that are, for all intents and purposes, better than nothing. Full text
For the last few years now, CPR's Member Scholars have made the case that cost-benefit analysis is, by itself, fundamentally deregulatory in nature. Unfortunately, other institutions in our federal government tend to exacerbate the deregulatory nature of cost-benefit analysis. Whether by design or dumb luck, cost-benefit analysis allows regulatory opponents to use those institutions -- most notably judicial review -- to further their deregulatory agendas.
The Clean Air Mercury Rule (CAMR) case is a good example. In February, the Supreme Court decided not to accept an appeal of a case on CAMR, which was the Bush Administration's feeble regulatory plan for addressing air mercury pollution from power plants. The story of CAMR demonstrates how judicial review has been used to amplify the deregulatory impact of cost-benefit analysis, and it's emblematic of the deregulatory synergy between cost-benefit analysis and judicial review. Full text
Center for Progressive Reform President Rena Steinzor reacts to nomination of Cass Sunstein to be director of the Office of Information and Regulatory Affairs. Full text