Pentagon Continues to Press Its Case for Behind-the-Scenes Interference at OMB

by James Goodwin

July 01, 2009

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.

In 2002, EPA issued a draft risk assessment finding that 1 part per billion (ppb) of perchlorate in drinking water should be considered safe, prompting EPA scientists to call for strong regulatory standard for perchlorate under the Safe Drinking Water Act.  In 2004, OMB flexing its “centralized regulatory review” muscles, began inviting affected agencies to review the proposed regulations and “suggest” changes – a process some have dubbed “coordinated federal agency review.”   In the case of EPA’s proposed perchlorate regulation, the Pentagon took OMB up on its invitation, and to significant effect:  six years later a proposal for a much weaker standard for perchlorate—now based on a risk assessment finding that 15 ppb of perchlorate in water is safe—is hopelessly lost in regulatory limbo.  In January of 2009, EPA issued an interim health advisory to state clean water officials based on this revised risk assessment, but also called on the National Academy of Sciences to undertake yet another battery of tests to determine the appropriate standard for a final regulation.  It is unclear when, if ever, a final federal regulation for perchlorate in drinking water will emerge.

In the recent perchlorate meeting at OIRA, the Pentagon apparently wanted to make sure that their views on the issue of interagency relations at OMB were also taken into account.  In one of the documents presented at this meeting, the Department attempted to use the perchlorate rule as an example of why coordinated federal agency review should be maintained:

Coordinated federal agency review is critical.  Rushing forward – even on notice –without adequate input from other agencies will have adverse public health consequences, and unintended negative effects on all drinking water regulatory programs, and on voluntary, state, and Federal cleanup efforts.

Undoubtedly, the relevant views of affected agencies should be taken into account when considering a proposed regulation.  Indeed, as one of the few (and biggest) sources of perchlorate pollution, the Pentagon would be on the hook for a huge portion of the cleanup costs associated with regulating the chemical, and therefore ought to be able to share its views on how the regulation is designed.  But there is no good reason for its comments to be shielded from public scrutiny by being offered in the confines of the OMB black box.  The contents of the documents submitted at the perchlorate meeting clearly illustrate why OMB is a bad venue for interagency coordination of this variety.  The documents presented discuss issues like the “media implications” of a perchlorate regulation.  OMB and its staff of economists are no more qualified to settle disputes on issues like the “media implications” of a regulation than I am to umpire a cricket match.  Such concerns ought to be brought up during the comment phase of the standard notice-and-comment rulemaking process—a process in which affected agencies like the Pentagon are free to participate just like any other interested stakeholder in a proposed regulation.  If the Pentagon would like to argue that a regulation should be weakened or shelved because it might put them in line for some bad press, then it ought to do so in public.

In short, the recent perchlorate meeting provides an excellent example of why OMB should get out of the business of coordinated federal agency review.  At best, it is unnecessary duplication of the notice-and-comment rulemaking process; at worst, it will result—and has resulted—in bad policy decisions, given OMB’s lack of transparency and lack of expertise on many important science and policy issues.  As the Obama Administration moves toward completing its own Executive Order on Regulatory Review, let’s hope it pays attention to the history of the effort to regulate perchlorate and recognizes in it the dangers of allowing coordinated federal agency review at OMB to persist, lest it repeat the mistakes of its immediate predecessor.

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James Goodwin, J.D., M.P.P., is a Senior Policy Analyst with the Center for Progressive Reform. He joined CPR in May of 2008.

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