OIRA’s First Year Under Obama: Deregulatory Stronghold Still Intact

This post is the seventh and final in a series on the new CPR report Obama’s Regulators: A First-Year Report Card.

The White House can influence the performance of protector agencies by the way it structures the regulatory landscape in which these agencies operate. Specifically, it can adjust the contours of this landscape in ways that either encourage or discourage proactive and effective action by the protector agencies. The manner in which it manages the Office of Information and Regulatory Affairs (OIRA)—a small bureau within the Office of Management and Budget that oversees the president’s regulatory policy and reviews individual regulations—is particularly significant in this regard. During the Bush Administration, OIRA operated as a strong deregulatory force. During the first year of the Obama Administration, this obscure but powerful office too often continued on that path.

Under President Obama, OIRA has continued to provide agencies that are themselves major polluters, the Department of Defense, for example, and regulated industries with a venue in which they can attack regulatory agencies and their health, safety, and environmental regulation. As part of its implementation of the regulatory review process, OIRA hosts meetings on rules that it has under review, meetings that are attended by the agency developing the rule and interested stakeholders. So far, the vast majority of these meetings have involved representatives from regulated industries or polluting agencies complaining about proposals under development by the protector agencies. For example, in June, OIRA hosted a meeting in which Department of Defense representatives sought to pressure EPA into abandoning reconsideration of a Bush midnight regulatory decision not to regulate perchlorate—a toxic chemical used in rocket fuel—under the Safe Drinking Water Act. The Department of Defense opposes such regulation because it would impose substantial cleanup costs on the agency. The meeting appears to have worked, as EPA has taken steps to delay regulating perchlorate.

Similarly, OIRA has hosted dozens of meetings in which regulated industries have sought to intimidate protector agencies into watering down or abandoning strong environmental, health, and safety regulations. The most notable example involves EPA’s preliminary work on a rule to regulate coal ash waste under the Resource Conservation and Recovery Act. So far, OIRA has hosted 22 meetings in which industry representatives have attacked EPA's efforts to develop a strong environmentally and health-protective regulation for this toxic waste. (By comparison, OIRA has hosted only four meetings involving environmental groups that are supportive of strong regulation.) It remains to be seen what rule EPA will finally propose. All of the meetings do, however, appear to be having some effect; the agency has already delayed issuing a proposed rule, citing the “complexity of the analysis” involved.

President Obama’s OIRA has also continued to interfere with agency science—invariably whenever this science might be used to support strong environmental, health, and safety regulations. For example, OIRA submitted comments on EPA’s toxicological profiles of three chemicals that the agency was including its Integrated Risk Information System (IRIS) database. The effective operation of the IRIS program is important, because the toxicological profiles developed under it serve as the scientific touchstone for health protective regulations of harmful chemicals under various statutes. In all of these comments, the OIRA staff chided EPA scientists for allegedly ignoring evidence that made the three harmful chemicals look less bad.

In a separate instance, OIRA sought to change EPA’s Endocrine Disruptor Screening Program in ways that would have made it difficult for the agency to force pesticide manufacturers to conduct up-to-date tests on the potentially harmful effects of dozens of chemicals. As originally designed, the program put the burden on the pesticide manufacturers to justify not conducting the new tests. OIRA tried to change the program so that the burden shifted to EPA. In most cases, this burden-shifting would have ensured that EPA would be mired for many years in a pile of paperwork. To the credit of the Obama Administration, however, OMB Director Peter Orszag wrote a letter stating unequivocally that EPA has the final word on scientific issues in its endocrine disruptor screening program.

Such scientific interference by OIRA is particularly inappropriate because, as compared to the protector agencies, OIRA lacks the institutional competence to weigh in on complex scientific matters. Whereas the tiny OIRA staff is composed almost entirely of economists, the protector agencies employ legions of experienced scientists and professional experts that have intensely studied the scientific issues that form the heart of much of regulatory decisionmaking. Resolution of these complex scientific issues is best left to the agencies, rather than OIRA.

Upon assuming office, President Obama had an excellent opportunity to turn OIRA around—that is, to change into an office that affirmatively supports the protector agencies in their efforts to fulfill their statutory missions of protecting people and the environment. President Obama has so far not taken this opportunity. Instead, OIRA has all too often behaved as if it were still in service of the Bush Administration’s anti-regulatory objectives: giving lobbyists for regulated industries and representatives of polluting agencies a sympathetic ear in their efforts to short-circuit badly needed regulations, and interfering with agency science. Clearly, the Obama Administration has a lot of room for improvement in how it manages OIRA. Any progress the Administration makes to reinvigorate the protector agencies—from increasing their budgets to enhancing their legal authority—will be sadly diminished if OIRA is still allowed to operate as a deregulatory force. The President needs to rein in OIRA.