POLITICS JANUARY 3, 2012
When President Obama took office, most environmental activists assumed that their cause would still meet resistance in Washington DC—they just assumed it would be located in Congress. But according to activists, a chief opponent of environmental causes has turned out to be within the White House itself: The Office of Information and Regulatory Affairs (OIRA).
A division of the Office of Management and Budget (OMB), OIRA has always had the power to review the economic impact of virtually any new federal regulation. Under the Obama administration, however, it has repeatedly used its mandate to stall major regulations proposed by the Environmental Protection Agency (EPA). A New Republic review of the regulations pending with OIRA found that the EPA’s Chemicals of Concern list has been under review for 18 months; an EPA guidance to protect citizens exposed to the poisonous byproduct dioxin has been under OIRA’s review since August 2010; and a new rule to tighten restrictions on storing toxic coal ash, prompted by the spill of 1 billion gallons of coal ash sludge in Kingston, Tennessee in 2008, will not go into effect until late in 2012, it was delayed for so long at OMB.
These slow reviews are a flagrant violation of the rules governing OMB’s review, says former head of the EPA Office of Policy and Planning Lisa Heinzerling. When OIRA opts to review a regulation (often, with the EPA regulations, to assess economic impact), the office is required to complete the process within 90 days—120 days in rare circumstances—and to disclose several aspects of its review. After 90 days, the regulation is either rejected with a public letter of explanation, sent back to the agency, or approved. OIRA, says Heinzerling, has flaunted these rules, becoming a black hole for environmental regulation. “Under the Bush administration,” says Hienzerling, “the OMB sent back dozens of return letters. … People didn’t like it, but it was better than having nothing.” Obama has been using the OMB “basically like a pocket veto,” she says. The EPA’s proposed smog standard, a major EPA regulation that the White House publicly withdrew this fall, is the only environmental regulation issued under Obama to have received a public return letter from OMB.
Heinzerling traces this unfriendly attitude toward environmental regulation to Cass Sunstein, the Chicago law professor turned head of OIRA. An ideological battle between the EPA was expected when Sunstein was first appointed; the Obama appointee made his name as one of the few ardent supporters of both strong government regulation and cost-benefit analysis, and has argued for more indirect, behavioral economics-inspired measures as an alternative to government regulation. Recently, the cost-benefit and behavioral economics side seems dominant in his thinking.
Heinzerling has sparred publicly with Sunstein over cost-benefit analysis, but she is not alone in her negative assessment of his office. Sid Shapiro, a leading scholar in regulatory law and process at Wake Forest University, says that OIRA almost never fully complies with the procedures that are supposed to make its processes transparent. As he notes, there is no public record of a meeting between Sunstein and Congressman Nick Rahall, a coal-state representative who successfully lobbied OIRA to review the EPA’s new guidelines for Clean Water Act permits. (Rahall has publicly referenced the meeting.)
To be fair, Sunstein’s actions at OIRA have not been entirely unpopular with environmental activists. He’s been praised for putting the brakes on some of the EPA’s more costly regulations (such as ozone regulation) in economic hard times. In keeping with his views on behavioral economics, he has tried to create disincentives for polluters, such as programs that call negative attention to companies that harm the environment. His office has also devoted a good deal of bandwidth to calculating how much the government should spend to prevent climate change.
And Sunstein is not solely responsible for the ostensible obstructionism. Some of the issues that offend environmentalists, says Rick Melberth, the Director of the Regulatory Policy program at the non-profit OMB Watch, are endemic to OIRA. (See this 2009 Government Accountability Office report to Congress, initiated when Bush was in office.) A 90-page CPR white paper found that OIRA has a long-standing habit of over-scrutinizing the EPA and missing deadlines, and accepts a disproportionate amount of input from industry lobbyists. In disregarding the law, Shapiro says, Obama’s OMB is “not any worse than others. It’s just not any better, either.”
But “not worse than the past” is not what Obama promised. As a candidate and then as a new president, says Rena Steinzor, a professor at the University of Maryland School of Law, Obama promised to rectify the agency’s issues. Obama also proclaimed his intent to regulate polluters from an environmental, not economic, perspective. A New York Times piece, detailing how the OMB sunk the critical ozone regulation because of economic reasons, shows that that commitment is no longer firm. Obama’s reluctance to seem like an overzealous regulator and Sunstein’s reluctance to embrace regulation may have consequences for even inexpensive regulations. Not all of the regulations that stall at OIRA would have a significant economic impact, says Heinzerling—OIRA considers neither the Chemicals of Concern list or the dioxin regulation “economically significant.”
In the end, the EPA’s function is to evaluate risks to the public’s health, and OIRA’s is to tally public health’s costs. Those roles, it seems, are increasingly at odds.