Some Observations from the Howard Shelanski Confirmation Hearing

Yesterday's confirmation hearing for Dr. Howard Shelanski—President Barack Obama’s nominee to serve as the next “Regulatory Czar,” or Administrator of the White House Office of Information and Regulatory Affairs (OIRA)—may have been the “most important hearing in Washington this week,” but it did not produce much in the way of bombshells or drama.  Rather, it was a relatively staid affair, which at times had a distinct “going through the motions” vibe.

On the positive side, the hearing generated some good discussion about the problems associated with OIRA’s role in the rulemaking process.  Several of the questions posed by Chairman Carper (D-DE) and Senator Levin (D-MI) were very thoughtful. Senator Levin described the excessive rule delays at OIRA as “chronic” and asked what the nominee would do to address them.  He also touched on the problems of extending OIRA review to independent regulatory agencies (as some recent legislative proposals from anti-regulatory members of Congress have sought to do).  Chairman Carper addressed the need to limit cost-benefit analysis for rules promulgated under statutes where such statutes prohibit this analysis (which happens to be most of them).

Shelanksi offered some thoughtful answers to these and other question.  He stated that, if confirmed, his top priority would be to ensure “timely review” of agency rules, as opposed to OIRA’s current pattern of routinely violating the 90-day limit that Executive Order 12866 places on such reviews.  Shelanski also repeatedly acknowledged the need to conduct OIRA review consistently with the statutes under which agency regulations are issued.  For example, during one exchange, Chairman Carper noted that for some statutory provisions—such as the provisions of the Clean Air Act under which the Environmental Protection Agency (EPA) sets National Ambient Air Quality Standards (NAAQS)—explicitly prohibit the use of cost-benefit analysis.   In response, Shelanski noted that OIRA review involves several elements in addition to cost-benefit analysis, and that its review of NAAQS would likely need to focus on those other elements.  Since OIRA has routinely ignored such statutory provisions, Shelanski's assertion that he intends to comply with the law is noteworthy.

But, there were also some concerning moments during the hearing.  Two in particular stand out:

• During his opening statement Ranking Member Tom Coburn (R-OK) asserted that OIRA is regulated industries’ “last hope” for reducing regulatory burdens.  This understanding of OIRA’s role in the rulemaking process is unsurprising but categorically incorrect.  The putative purpose of OIRA’s role is to improve the quality of rules, and quite often that means—or should mean—pushing for stronger rules.  After all, Congress has repeatedly written statutes directing agencies such as EPA and OSHA to establish strong public safeguards.  The job of OIRA ought to be to ensure that these statutory provisions are being implemented properly—not to block or weaken rules simply because powerful corporate interests find them inconvenient.  This remark from Ranking Member Coburn does, however, offer a clear insight into how anti-regulatory members of Congress think about OIRA.  In their view, OIRA should work hand-in-hand with corporate interests to prevent agencies from fulfilling their mission of protecting people and the environment.  All too often, this is precisely the corrosive dynamic that has come to define OIRA’s interference in individual rulemakings.
• During a late exchange, Chairman Carper asked Shelanski about his written response to a Committee pre-hearing question regarding OIRA’s informal “consultations” early in the rulemaking process (i.e., OIRA interventions in agency rulemakings prior to the beginning of a draft proposal’s formal review).  In particular, Chairman Carper asked Shelanski how he intended to ensure that these consultations are “appropriate” and are conducted with adequate “transparency.”  Shelanski’s response to this question was quite disappointing.  He explained that he would want these consultations to be “helpful” and something that agencies “desired.”  But, he did not explain how he would ensure that these consultations would be conducted transparently.  Historically, OIRA Administrators and staff have used these pre-review informal consultations as an opportunity for overruling agency priorities or agency policy judgments.  Because these consultations happen so early in the process before much of the work on the rulemaking has begun, and because they lack any transparency, they offer the perfect opportunity for improper OIRA interference.  Shelanski clearly recognized this concern, as he explicitly promised that he would not use these informal consultations to such nefarious ends.  But, unless there are meaningful transparency requirements governing these consultations, the public has no way of knowing whether Shelanski will keep his promise if he is confirmed.  Shelanski may well keep this promise, but that would do nothing to stop less upright future OIRA Administrators from abusing the informal consultation process.  In truth, there probably is no effective way to ensure that pre-review informal consultations are conducted with the minimum needed transparency to ensure they are conducted appropriately (i.e., without improper OIRA interference in agency priority-setting or policy judgments).  The better policy is to prohibit them outright, and instead limit OIRA’s interventions to the formal reviews, which are ostensibly governed by Executive Order 12866’s transparency provisions.

These concerns touch on important problems with OIRA role in the rulemaking process.  I will continue to watch for how OIRA addresses these problems if and when Shelanski is confirmed, and for whether the Senate Homeland Security Committee uses its oversight authority to push OIRA to address these problems.