REGULATIONS

Rulemaking 'bottleneck' is agency that enviros love to hate

Everybody, it seems, has a beef about the Obama administration's rulemaking.

Republicans and industry have spent the last two years slamming what they see as the Obama EPA's regulatory excess, and environmentalists and government watchdogs have groused about the administration's timidity.

In the eye of the political hurricane: about 50 number crunchers from the Office of Management and Budget.

Ensconced in the Eisenhower Executive Office Building, next door to the White House, OMB's Office of Information and Regulatory Affairs vets rules written by the agencies under authority given by the Paperwork Reduction Act of 1980.

"It was created by the outgoing Carter administration as the beginning of the backlash to this perception that government had grown too big and too complex," said Matthew Dickinson, a professor of political science at Middlebury College in Vermont.

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"There was no central place where you could coordinate the impact of one rule from one agency on the issuance of another rule that may be working at cross-purposes, and no one was adding up all the paperwork."

OIRA -- pronounced oh-eye-rah -- had its paperwork-reduction mission expanded by President Clinton's Executive Order 12866 to consider rules' costs and benefits. The office also reviews the scientific assumptions that underlie those rules and solicits input from other agencies.

And the reviews are not all about numbers. Dickinson said rulemaking has an inevitable political component, because an administration usually has wiggle room for deciding how to write regulations. An anti-regulatory White House will promulgate regulations that are as business-friendly and unrestrictive as the law allows, he said, and some of those tweaks might happen during the executive office's review.

"Of course, that's what OIRA is supposed to do, in the sense that the office is accountable to an elected person who has a particular philosophy," Dickinson said.

OIRA, he said, became a deregulation tool under President Reagan, a process slowed and reversed in part by Clinton.

But environmentalists say OIRA should keep politics out of rulemaking. The office is to blame, they say, for President Obama's scrapping a new rule for smog-forming emissions from power plants and for U.S. EPA's revising a new toxic emissions standards for industrial boilers. They also complain that OIRA sat too long on a greenhouse gas rule for new power plants that was released last month.

"Regulations are not something administrations get to decide they're going to do or not," said Scott Slesinger, legislative director at the Natural Resources Defense Council. "Regulations are required for agencies to do by federal law."

Some also see an OIRA bias against EPA.

"You can see definitely the EPA is the focus of OIRA, just by sheer numbers," said Katie Greenhaw, a regulatory policy analyst at OMB Watch.

Said Rena Steinzor, a University of Maryland law professor and president of the Center for Progressive Reform, "OIRA has a reputation, which is deserved, of being totally preoccupied with EPA."

'Black hole'

There are currently 39 rules under review at OIRA that have been there longer than the 120-day deadline set forth in an executive order, and 12 of them are EPA rules. An Occupational Safety and Health Administration rule for silica, which is also championed by environmentalists, has been at the office for more than a year.

Steinzor's center released a report in November that showed while 11 percent of all rules sent to OIRA are from EPA, 40 percent of the office's meetings with outside groups are related to EPA rules.

Furthermore, the report says, the meetings are disproportionately with industry representatives who are presumably making a case for less regulation rather than more. Between October and June 2011, it says, 442 of OIRA's 1,080 meetings dealt with EPA rules.

"EPA is politically vulnerable, and the level of industry lobbying and pressure is extremely high," Steinzor said.

Greenhaw said the Obama administration's OIRA has generally released rules more swiftly than did the George W. Bush administration, although its pace has slowed in recent months -- perhaps as a result of the approaching presidential election.

Robert Weissman, president of left-leaning Public Citizen, called the office "a black hole." He noted that the staff frequently meets with industry stakeholders on rules but says little about how meetings influence its work.

"What's happening is that agencies go through a long and careful, detailed, technical rulemaking process in which regulated industries have enormous ability to not just have their say but influence outcomes," he said. Then the rules arrive at OIRA, and industry gets "a second crack" at weighing in on what they should look like, he said.

"The agencies have the expertise, and they're already generally very sympathetic to the regulated industries," he said. "OIRA basically offers a second bite at the apple."

Slesinger said OIRA's staff of 50 is too small to duplicate the work done by agencies.

"How they could second-guess a department's five- to six-year studies in 90 days is a little difficult to understand," he said. "Because it isn't their job to second-guess what agencies have done. But apparently, that's what they do a lot."

The proper role of OIRA, Slesinger said, is to ensure that agencies are crafting rules that comply with the law. But the vetting process has "become a main focal point for lobbyists to go in there to get rules overturned or weakened," he said.

OIRA Administer Cass Sunstein issued a new guidance late last month requiring agencies to look at the cumulative impacts of their rules on regulated entities, which Slesinger saw as further evidence of OIRA's eagerness to cater to industry.

Utilities and congressional Republicans have complained that the power sector is being faced with a battery of Clean Air Act rules within a fairly short period of time for carbon dioxide, mercury and smog, and soot-forming emissions. The OIRA guidance aims to address that concern.

But Slesinger noted that several of these air rules are long past their original due dates -- evidence that it is too difficult to promulgate rules, he said, not that they need to be reined in.

"It is not going to help get better rules out but will just be another burden to slow down health and safety rules from being put into place," said Slesinger of the new OIRA policy.

Francesca Grifo, senior scientist and director of the Scientific Integrity Program at the Union of Concerned Scientists, said EPA is better positioned to craft rules that are based on science than OIRA is, in part because it is further removed from the political nucleus of the White House. The agency also has more scientists, she noted.

"Where does the expertise lie? Does the scientific expertise lie in the agencies, or does it lie with the few scientists who are reviewing that work in OIRA?" she said. "The true expertise lies in the agencies."

Bush OIRA chiefs defend agency

But two former OIRA administrators -- both of whom served under Bush -- say EPA isn't the impartial arbiter of science environmentalists would like to believe it is.

"There are good scientists at EPA, but they are not always influential in the design of rules," said John Graham, who headed OIRA during Bush's first five years. Graham said EPA scientists are mostly in the Office of Research and Development, which has relatively little influence on the agency's rulemaking activities.

"If you look at the bulk of clean air and clean water rules at EPA, the regulatory requirements are more strongly influenced by lawyers and mission-oriented program managers than by agency scientists and economists," he said.

During his tenure at OIRA, Graham hired experts in a number of disciplines, including environmental sciences.

"This expertise was used to help referee interagency disputes about EPA science claims and to ensure that EPA took seriously the scientific determinations of the National Research Council and National Academy of Sciences and EPA's Science Advisory Board," he said.

Another role of OIRA is to make sure that cost is taken into account in the rulemaking process, which is one reason EPA rules receive "substantial emphasis" during review, Graham said. They tend to assign costs to industry and state and local governments, he said.

Cost and benefit calculations are frequently a sticking point on Capitol Hill and between environmental and industry advocates. Environmentalists see economist-driven OIRA skewing more toward industry's way of accounting, which they say underestimates the benefit of emissions reduction.

"What OMB is trying to do, which is a legitimate end, is they are trying to take into account the costs of the rules," Grifo said. "But the problem with that is we're not very good at calculating the benefits of the rules. We're not very good at putting a price on the cost of a human life."

Public Citizen's Weissman said OIRA's focus on compliance costs leads it to water down rules.

"I think you'd be hard-pressed to find a case where OIRA sends a rule back to an agency and tells them to make it more protective of public health and safety," Weissman said.

Graham's successor in the Bush administration, Susan Dudley, said OIRA acts to balance the agencies, which err on the side of stricter regulations and larger budgets.

"So generally it moderates, rather than expands on, what agencies would do absent oversight," Dudley said.

Dudley disputed the environmentalists' argument that rules should be based on science alone, rather than other considerations including cost. She pointed to a report released in 2009 by the Bipartisan Policy Center to argue that science is sometimes misused in crafting public policy.

"It is often in the interest of advocates to claim the science forces a particular policy action, when they are really expressing their own policy views," she said. Regulatory decisions "involve judgment and thus benefit from a range of expertise."

Both Dudley and Graham said OIRA was no less transparent than the agencies.

"I'm not sure why you would say OIRA is more secretive," said Dudley, adding that OIRA provides full disclosure of who comes to meet with its staff and on what rules.

At stakeholder meetings, OIRA "gives the outside parties no information on the rule but listens to their concerns," she said. "Once review is concluded, you can see the [rule an agency] originally submitted," she said.

Environmentalists' frustration with OIRA isn't surprising, given the office's role as a "bottleneck" that slows down rules and considers different points of view, Middlebury's Dickinson said. "If an industry was ever anxiously awaiting a new rule, it would probably be equally frustrated," he said.

"The problem that OIRA has always faced is that it's at the intersection of a lot of different stakeholders, a lot of different forces," he said. "And it's very difficult for it to satisfy all of them."

Dickinson acknowledged that political realities might also come into play, as advocates suggest.

"When you're in an election year -- and this particular president in an economic downturn -- it wouldn't surprise me if he was hoping OIRA goes slow on issuing more regulations that would be, from appearances, onerous on business," he said.

Sunstein

Steinzor said part of her exasperation with OIRA has to do with Sunstein himself.

"On the one hand, Obama picked wonderful people to head the agencies -- Lisa Jackson is probably the best administrator EPA has ever had," she said.

"But he also picked Cass Sunstein, who has a long history of hostility to these rules, and he set up the tension, so that if you were cynical you would say he had very progressive people who everyone was pleased with, but then he made sure to keep a lid on them through OIRA," she added.

Sunstein has published broadly about his views on regulation, in articles and in his books "Laws of Fear" and "Nudge," which was co-written with Richard Thaler.

But R. Shep Melnick, a political science professor at Boston College, said Sunstein shares many of the same goals as environmentalists, he just has a different regulatory philosophy.

"Everything we do in life has a lot of risks," said Melnick, summarizing Sunstein's approach. "You have to look at how much we're paying to reduce risk in this area versus that area."

While he said he doesn't know the story behind Obama's decision in September to pull the plug on the ozone rule, Melnick said it seemed consistent with Sunstein's views.

Lowering the standard from 0.075 parts per million to 0.07 ppm would have only a modest effect on public health and be fairly expensive, he said. Other rules might have more bang for the buck.

"That strikes me as kind of in line with his general caution of making sure that, if you're really going to impose a costly regulation, making sure you're really going to get some significant risk reduction out of it," Melnick said.

While Sunstein's views were well established before he took his current post, Melnick said OIRA's culture tends to be conservative about regulation, no matter who is in the White House.

"It basically wants to be a counterweight to the agencies," he said. "In some ways, I think they see themselves as the devil's advocate."

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