Murky reg-review process set stage for frenzy over OMB memo

The political frenzy sparked by a White House memo that raised questions about U.S. EPA's handling of a proposed "endangerment finding" on greenhouse gas emissions was rooted in what experts say are muddled procedures for reviewing proposed federal regulations.

At issue was a flurry of press reports Tuesday about an unsigned, undated document from the White House Office of Management and Budget that laid out serious concerns about the possible damaging economic effects of EPA's proposed finding that greenhouse gases endanger public health and welfare.

The document was quickly seized by Republican lawmakers and industry groups, which cited the memo as proof that the Obama administration had ignored scientific and economic realities when issuing the proposal last month. Sen. John Barrasso (R-Wyo.) labeled the memo a "smoking gun" proving EPA's finding had been based on politics rather than science.

But in the wake of the media craze, the Obama administration divulged that some of the comments in question had been submitted by an independent advocacy office within the Small Business Administration whose mission is to reduce the burdens of federal policies on small firms. The office's chief advocate was appointed under the Bush administration, although she initially came into office under President Clinton.

In November 2008, the office's acting chief counsel, Shawne McGibbon, wrote a letter to former EPA Administrator Stephen Johnson detailing concerns over the Bush administration's advanced notice of proposed rulemaking that listed ways for EPA to regulate greenhouse gas emissions.


"The regulatory approaches outlined in the [advanced notice of proposed rulemaking], either individually or in combination, would impose significant adverse economic impacts on small entities throughout the U.S. economy," McGibbon wrote last fall.

Now, advocates of carbon regulations are framing the issue as a "tempest in a teapot," dismissing the memo as an anomalous view from an agency headed by a Bush administration holdover.

"EPA looked at [the document], presumably understood that it was utterly baseless, and acted appropriately," said David Bookbinder, the Sierra Club's chief climate counsel. "I don't think there's anything more to it."

Meanwhile, critics of climate regulations say the memo raises serious concerns about EPA's finding. Barrasso even cited the memo as a factor in his decision to maintain a procedural "hold" on President Obama's nominee to lead EPA's air office, Gina McCarthy.

Calls for transparency

Some observers say more transparency in rulemaking -- something the Obama administration has vowed to pursue -- would help the public and the media to decipher exactly how politics influence agency rules like this one.

"In this case, the opaque nature of the document helped create a lot of confusion and let some of those who are politically opposed to EPA action have something to wave around," said Frank O'Donnell, president of the advocacy group Clean Air Watch.

It would have been helpful to have the details "spelled out a little more clearly," O'Donnell said, especially because the document pertained to the hot-button endangerment finding. "It's total war right now on the climate issue, and any scrap of paper is going to be used as a weapon," he said.

The unsigned, undated document, labeled "Deliberative -- Attorney Client Privilege," was sent to EPA on April 22 and published in the public docket April 24. The memo includes comments criticizing EPA for an alleged failure to justify the scientific basis and economic consequences of its proposed finding. Those comments, according to OMB, were a compilation of viewpoints from various agencies, including the business advocacy office. OMB has declined to identify the other contributing agencies.

The Clean Air Act requires that drafts of proposed EPA air rules and all written comments from agencies be placed in the public docket. Regulatory watchdog and environmental groups credit that provision with bringing interagency deliberations out into the open, but they say more transparency is needed to pinpoint where such comments are coming from.

OMB Watch is calling on the Obama administration to post any substantive written communication between agencies and the White House or among agencies quickly after the communication is made and to identify which agencies or people are communicating, said Matt Madia, a regulatory policy analyst for the watchdog group.

"You would avoid these kinds of situations, because it would be less mysterious if you could get not just more transparency, but better transparency," Madia said.

Worries about a 'chilling effect'

Experts warn, however, that too much transparency in interagency discussions could prohibit open dialogue.

OMB and its regulatory review office are walking a fine line on transparency, said Michael Livermore, executive director of New York University's Institute for Policy Integrity.

"It's a good thing to have the public being able to be responsive to these kinds of interagency discussions," Livermore said. But if agencies had to take full responsibility for anything they said, it could have a "chilling effect," he added.

"You might want the agencies to have to work that out informally without there being a paper trail," Livermore said.

Scott Segal, an industry lobbyist with Bracewell & Giuliani, agreed that documents inside public dockets should be properly labeled, but he stressed the importance of allowing some degree of anonymity when it comes to interagency reviews.

"You want government commentators to be as candid as possible with the agency that they're reviewing," Segal said. "And you don't want a situation -- and I think that some in the environmental community might be more comfortable with this -- when experts that express their candid opinions are harassed or intimidated against being forthright."

Barrasso blasted an unnamed Obama administration official yesterday for releasing details about the author of portions of the memo for what he called "political reasons" (E&ENews PM, May 13).

Rena Steinzor, president of the Center for Progressive Reform, said it was unclear why OMB failed to disclose the identities of the agencies contributing to memo. "The only reason [it's] valuable to the people that oppose climate change is because the people that oppose climate change are saying it's a White House memo," she said.

Steinzor added that it was important to note where these viewpoints come from to assess their credibility. "Why does everybody and their mother get to advise EPA?" she asked.

These types of interagency critiques occur all the time, said Madia of OMB Watch. "You just don't see them because there's no required transparency for other things."

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