May 25, 2011

Sunstein to Outline Regulatory Review Plans; Industry Yawns; Public Health and Safety Agencies Lose out from Diverted Resources

Office of Information and Regulatory Affairs (OIRA) Administrator Cass Sunstein heads to the American Enterprise Institute Thursday morning to speak about federal agencies' plans to "look back" at and review existing regulations. Meanwhile, agencies statutorily obligated to protect public health and safety, such as EPA and OSHA, are diverting resources from pressing work so that they can structure and soon carry out a hunt for a supposed treasure of frivolous old regulations that need to be revised or eliminated. Strikingly, even industry itself has struggled to come up with enthusiasm for the effort -- or even a few specific examples of old rules it believes are unduly burdensome. It adds up to a not pretty picture.

President Obama called for the regulatory “look-backs” in his January 18 Executive Order on regulatory policy; the Order called on each agency to develop a "preliminary plan" within 120 days for how it would conduct its look-back. That time was up last Wednesday.

These existing regulations that are subject to look-back, of course, are not rules that rogue agency staffers made up out of thin air two weeks ago while doing all-nighters in the basement at EPA headquarters in the Ariel Rios building.  Instead, in EPA’s case, the rules industry finds so offensive were mandated with great specificity in the 1990 Clean Air Act Amendments. Industry and its allies tried to defeat the legislation then and failed. Then they tried to persuade EPA to adopt feeble regulations and failed. Then they challenged the regulations in court and failed. Now industry seeks its umpteenth bite of the apple—in fact, not much of even the apple core is left.

The agency plans Sunstein will be discussing aren't available quite yet. The Wall Street Journal reported last week:

A White House spokeswoman said the agencies’ look-back plans won’t be released “immediately;” the White House has asked the agencies to post them publicly, however, “within a reasonable period (not to exceed two weeks) after May 18.”

To my ear, there’s a heavy dose of politics at work here – appearing moderate to independents, and staying competitive for votes and campaign contributions in coal-producing states. The President announced the initiative in an op-ed on the opinion pages of the WSJ, plainly seeking to rebut the anti-business label that just such conservative sources had been hanging on him. Since then, the Administration has sought to woo industry in other venues, but with limited success. The President gave a talk at the U.S. Chamber of Commerce in February. But the Chamber, not surprisingly, has not suddenly changed its tone and stopped its anti-regulatory campaigning. Indeed, it has greeted the look-backs with indifference. From the WSJ:

A spokesman for the U.S. Chamber of Commerce, which has been critical of the administration’s regulatory initiatives, says Mr. Obama’s look-back is a “useful exercise” but that his organization’s members worry more about new regulations still in the works at the Environmental Protection Agency and other agencies.

“Many of the regulations that are on the books the business world has adapted to,” says Randel Johnson, a vice president at the Chamber who specializes in labor and immigration policy. “New regulations are by their nature more important because they will change behavior.”

In fact, the Chamber has yawned at the Administration's initiative from the beginning. Asked by the New York Times in late January to provide an example of an existing regulation that is silly or outdated, the Chamber didn't call back. (The Business Roundtable mustered one example for the Times -- except even that was a criticism of an agency's draft plan for an initiative, not a criticism of an existing regulation). When Rep. Darrell Issa, chair of the House Committee on Oversight and Government Reform, asked industry for regulations he should work to ax, the response letters focused overwhelmingly on proposed rules, not existing ones.

Part of it surely comes back to this: individual environmental, health, and safety protections are generally overwhelmingly popular with the public. It's easy for industry to cry wolf about the disastrous effects of a prospective regulation during the consideration phase, but after it goes into effect, and the sky doesn't fall, industry quickly quiets down on the specific issue. The exceptions to this pattern are few. The rulemaking process is already so slanted to favor industry that for regulations to be adopted they have to clear a very high bar in terms of efficacy and cost.

We don't know where the "look-backs" will go, or what effect they may have on existing regulations. But we know for sure that they will sap vital resources from already overstretched federal agencies engaged in the important work of protecting people and the environment.

Did the Administration even ask for a budget to conduct the look-backs? No. "I don't anticipate any additional budgetary assistance for the look-back," Sunstein said in January.

Would the look-back work come out of thin air, or would existing agency personnel and resources be diverted from current health and safety work to conduct the look-back? Rep. John Dingell pressed Sunstein on the point during a little-noticed series of questions at a January 26th congressional hearing (1:07:07 in the video). Sunstein said, somehow, that all would be alright:

Dingell: "Do you believe that the agencies have the personnel resources necessary to complete the look-back and do the other things that they must do?"

Sunstein: "Yes."

For a little perspective on that assertion, consider that, at last check, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) has all of 60 inspectors to monitor the entire offshore drilling fleet in the Gulf of Mexico (more than 3,500 rigs and platforms). The Consumer Product Safety Commission, the single agency responsible for overseeing most consumer products, has a budget of less than $120 million. Some individual military aircraft cost more than that entire budget. As Sunstein surely knows, CPSC isn't presently able to do its assigned job very well because of these limited resources.

The EPA, the agency perhaps most directly in industry's crosshairs, does not presently have the resources to carry out the mandates Congress gave it. In 2009, for example, the GAO was so concerned with the agency's failure to adequately regulate toxic chemicals that it put the issue on its "high priority" list (a decision re-affirmed this year).

We don't know exactly how many staffers at these agencies are being diverted from current work protecting the public, or how many will be diverted once the look-backs get into full swing. Even if it is just a small group of staffers, it is a small group too many. Undermining the agencies is convenient for industry and bad for the public. The Administration shouldn't be doing it.

Rena Steinzor, Professor of Law, University of Maryland Carey School of Law. Bio.

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