OMB and Risk Assessment

A Risky Proposal

In early 2006, the White House Office of Management and Budget's Office of Information and Regulatory Affairs (OIRA) issued a proposed policy to govern the way regulatory agencies conducted risk assessments. Typically, before developing protective regulations, agencies conduct assessments that involve identifying and gauging the scope of particular risks. So, for example, regulators conducting a risk assessment in advance of developing rules governing industrial emissions of a specific toxic chemical would identify what harms the chemical causes, and evaluate the scope of those harms, usually in dollar terms.

OIRA’s proposal would have significantly increased OMB’s already dominant role in the regulatory process by making it the arbiter of whether agency risk assessments were satisfactory. But as CPR Member Scholar Rena Steinzor pointed out at the time, OMB was ill-equipped for such duty. Its staff is dominated by economists and budget analysts, augmented by only a handful of scientists. Moreover, the requirement would have undercut agencies’ statutory authority and responsibility for developing protective regulations, since the laws protective regulations are intended to enforce vest the authority for developing regulations in the agencies, not OIRA. Who controls the process is of great importance, because OIRA and OMB are directly answerable only to the President, whereas regulatory agencies are responsive also to Congress, which provides their funding, confirms the appointment of their leaders, and conducts oversight of their work.

The Proposed Bulletin had several other flaws, too. It would have imposed a government-wide, one-size-fits-all method for risk assessment, and prioritized risk management options before settling on the risk to be assessed – a cart-before-the-horse method that would surely have resulted in less robust protections. Finally, it would have established absolutely no standards for agency activities that relied on industry-generated risk assessments, strengthening industry’s hand in the regulatory process still further. 

In the face of withering criticism of its plan, OIRA referred the proposed bulletin to the National Research Council, part of the National Academies, for peer review. The Council eventually concluded that the proposal was “fundamentally flawed,” and OIRA went back to the drawing board.

In 2007, OIRA eventually withdrew the proposal and issued scaled-back, but still problematic, guidelines for agencies conducting risk analysis. That guidance took its place as one of many Bush Administration regulatory initiatives that will be candidates for reversal once the Administration and its industry-friendly political appointees leave office.

In the summer of 2008, the Department of Labor weighed into the risk assessment controversy, with a proposal to abandon the long-established department practice of calculating the risk of workplace exposure to hazards over the length of a lifetime career.  Dosage and period of exposure are two critical factors in calculating the potential harm from many workplace risks.  For example, in calculating permissible workplace exposures to toxic chemicals, the Department of Labor has until now assumed that the "dosage" workers are exposed to should be low enough to be safe over a 45-year career.  Under the proposed approach, the Department would instead assume a shorter duration of exposure, an assumption that would pave the way for higher dosages.  Significantly, the proposal was made public more than two months after the Administration's self-imposed -- but apparently "flexible" -- June 1, 2008 deadline for issuing new regulations.  Moreover, the Department sought to fast-track the policy's approval, limiting the public comment to an unusually short 30 days.  CPR Member Scholar Rena Steinzor was the lead signer of a letter to the Department requesting an extension of the comment period; the Department refused.

• Department of Labor proposal.  Read CPR Member Scholar Rena Steinzor and Policy Analyst Matt Shudtz's September 29, 2008 comments on DOL's Risk Assessment proposal.  Also read the September 3, 2008 editorial memorandum from Rena Steinzor on the Department of Labor's Risk Assessment proposal.  And read her September 5, 2008 joint letter (with 38 other experts in regulatory and labor safety matters) to the Department of Labor requesting an extension of the 30-day comment period for its risk assessment guidelines.  Then read the Department's letter of refusal.
• Letter to OMB.  Read Rena Steinzor's June 15, 2006 letter to OMB urging it to withdraw its proposed risk assessment bulletin.
• Inside EPA Article.  Read Rena Steinzor's May 23, 2006 "The Legacy of John Graham: Straight-Jacketing Risk Assessment," a Guest Perspective in the May 23, 2006 Inside EPA's Risk Policy Report, posted here by permission of Risk Policy Report.