by Alexis-Clair Roehrich

Another busy day for Olin students in Washington, D.C. in the Business & Government: Understanding and Influencing the Regulatory Environment course. Tim Keating, Senior Vice President of Government Operations at Boeing, kicked off the morning presentations with some tales from one of the most influential groups in the Capital: lobbyists.

A masterful storyteller, Tim shared eye-opening examples of the importance of developing relationships and engagement in ongoing conversations with policymakers. He discussed how essential grass-roots efforts have an impact on decision-making. Students may not become full time lobbyists, but they will understand the need to engage corporate headquarters and field units in the policy making process.

The vibrant Sally Katzen next addressed the class. Ms. Katzen was head of a little known agency at the Office of Management and Budget, the Office of Information and Regulatory Affairs, which students learned has one of the most comprehensive portfolios in all of government. Ms. Katzen emphasized the indispensible need to provide policymakers with data in order to make sound, effective decisions.

This theme was stressed again by former EPA Administrator and White House Energy Czar, Carol Browner. Ms. Browner relayed very insightful stories of the benefits of public-private engagement. She also emphasized the distinction between “needs” and “wants” sharing that businesses and other special interest groups who focus on what they need are more successful than those who don’t move beyond what they want.

Caroline Ahearn, a former Brookings LEGIS Fellow, now Director of Policy and Legislative Coordination within the office of Enforcement and Compliance at EPA, wrapped up the classroom portion of the day with insight into how agencies work with the Hill to formulate policy. Caroline’s experience of working on the hill provided great perspective to share about the process.

Then off to Ford’s Theater for a fascinating walking tour of the investigation into the Lincoln assassination. A local actor portraying a Pinkerton detective walked the group through the aftermath of the tragic event providing students with a unique look at Washington and the city’s rich history. The day finished with dinner at the WUSTL Washington Office. After the week in D.C. how many students now want to do a semester in Washington?

John McArdle, E&E reporter

In the obscure world of federal rulemaking and administrative law, yesterday’s gathering of progressives at American University was about as close as you could get to an old-fashioned revival meeting.

Grievances about the failures of the current regulatory system were aired, commitments to bring about change were reaffirmed and inspiring words were spoken.

“It is depressing, but the right attitude is to get your torch out and light it and march in the street,” said Rena Steinzor, president of the left-leaning Center for Progressive Reform (CPR), which hosted the event.

And with the Senate confirmation looming for the man nominated to be President Obama’s next regulatory czar, the tactics discussed yesterday to put pressure on the White House to fix the regulatory process may be put into action sooner rather than later.

Late last month, Obama nominated Howard Shelanski to be his next administrator of the Office of Information and Regulatory Affairs (OIRA) (E&E Daily, April 26). Earlier this week, the chairman of the Senate Homeland Security and Governmental Affairs Committee announced that he intended to begin that confirmation process in the near future (E&E Daily, May 14).

Many concerns that progressives have with the regulatory process these days stem from OIRA.

OIRA, which is part of the White House Office of Management and Budget, is charged with examining agency rules before they are enacted to determine, among other things, whether alternatives were considered and whether the costs and benefits of the proposed regulation were properly weighed.

But OIRA’s efforts in recent years have worried and angered some public interest groups and liberals who say the office, through an opaque rule review process that pays little heed to statutory review timelines, has stifled federal rulemaking efforts to the benefit of big business.

By executive order, OIRA has 90 days to conduct its reviews, along with a possible 30-day extension. But as former U.S. EPA senior climate adviser Lisa Heinzerling pointed out yesterday, rules often “get stuck” at OIRA for much longer than that.

Of the 149 rules pending before the office as of yesterday, 86 have now been under review for more than 90 days.

“The frustrating thing is the process does not follow the executive order in almost any respect,” said Heinzerling, who is now on the faculty at Georgetown University Law Center and a CPR fellow.

And when that happens, there’s very little that agency officials can do, she said, “short of actually hitting the button to send a rule to the Federal Register in defiance of the many people in the White House who are saying no.”

CPR and several public interest groups that call themselves the Coalition for Sensible Safeguards made it clear yesterday they will be working to highlight their concerns as the Shelanski nomination moves forward.

Shelanski, the current director of the Federal Trade Commission’s Bureau of Economics and former chief economist of the Federal Communications Commission, is best known for his work in antitrust and telecommunications issues, so CPR and others say they are interested in learning more about his views on OIRA’s role in the regulatory process.

In a blog post following Shelanski’s nomination, Steinzor encouraged senators on the Homeland Security and Governmental Affairs Committee to ask “tough” questions about his view on federal rulemaking.

“For example, as OIRA Administrator, will Dr. Shelanski see it as [his] job to advance the public interest or to appease regulated industries?” she wrote.

She also encouraged members to push Shelankski to say whether he would respect “the clear 90-day time limits” that Executive Order 12866 places on the review process.

“We look forward to meeting Dr. Shelanski and doing our best to persuade him that a fundamental course correction at OIRA is vital,” she wrote. “Without one, there will be more grim funeral services honoring lives lost unnecessarily in industrial catastrophes that escape a badly shredded safety net.”

Say ‘White House,’ not ‘OIRA’

During yesterday’s panel discussion, Steinzor, Heinzerling and John Walke, the clean air and climate change director for the Natural Resources Defense Council, offered other ideas on how to pressure the White House to fix the current rulemaking system.

Among the suggestions Walke proposed was to simply stop referring to the Office of Information and Regulatory Affairs as OIRA and start referring to it as the White House.

“Since the office resides at the White House, we should refer to it as the White House,” he said.

Walke believes that using the acronym OIRA only serves to distance Obama from the problem.

“People in Washington use acronyms far too much,” he said. “If the acronym is NAACP, then that’s entered the lexicon. But if it’s OIRA, no one outside the Beltway knows what in the world you’re talking about.”

It is not unreasonable to ask people who work at the White House to live up to commitments that the president has made to the public and to the agencies, Walke said.

And besides, “they are vulnerable to that type of political criticism,” he said.

Heinzerling said her time at EPA has led her to conclude that there is discomfort within the White House about how nontransparent the current process is and that therein lies an opportunity for progressives.

“I think there’s discomfort about the deadlines not being met,” she said. “I think there’s discomfort about the large gap between what … the executive order on regulatory review require and what the agencies and OIRA give us. I would exploit that as much as possible.”

If rule reviews are past deadline, point that out, Heinzerling encouraged the audience yesterday. She urged those concerned with the process to keep an eye out for changes to final regulations that would not have been made if not for the White House’s involvement.

“In this moment when I think we’re stuck with this system that is imperfect, take advantage of that,” she said, “because I don’t think anybody’s proud of those imperfections.”

OnPoint/Aired: Wednesday, May 15, 2013

Has there been a shift in tone on regulation during President Obama’s second term? During today’s OnPoint, Michael Livermore, executive director at the Institute for Policy Integrity, discusses the politics of regulation as Congress works through the confirmation process for several key regulatory positions. Livermore also gives his take on how Howard Shelanski, the president’s nominee to head up the Office of Information and Regulatory Affairs, could affect the future of regulations coming out of this administration.

Sec. 2. Open Data Policy. (a) The Director of the
Office of Management and Budget (OMB), in consultation with the Chief
Information Officer (CIO), Chief Technology Officer (CTO), and
Administrator of the Office of Information and Regulatory Affairs
(OIRA), shall issue an Open Data Policy to advance the

management of Government information as an asset, consistent with my
memorandum of January 21, 2009 (Transparency and Open Government), OMB
Memorandum M-10-06 (Open Government Directive), OMB and National
Archives and Records Administration Memorandum M-12-18 (Managing
Government Records Directive), the Office of Science and Technology
Policy Memorandum of February 22, 2013 (Increasing Access to the Results
of Federally Funded Scientific Research), and the CIO’s strategy
entitled “Digital Government: Building a 21st Century Platform to Better
Serve the American People.” The Open Data Policy shall be updated as
needed.

Gernot Wagner, Environmental Defense Fund

The Office of Management and Budget (OMB) is nerd heaven: a bunch of people getting their professional kicks from analyzing federal regulation. That bean counting may sound painfully lacking in glamour, but it’s incredibly important.

The OMB’s annual report to Congress on the benefits and costs of all major rules adopted by most federal agencies over the past 10 years shows how efficiently, or inefficiently, those agencies are functioning.  And the conclusion is clear: the Environmental Protection Agency (EPA) comes out on top.

Those numbers are based on the 2013 draft report, so they could still change. But, the pattern is the same as in any of their reports from the past few years, including the final 2012 report that came out last week.

None of this is to diminish the contributions of the other government agencies, but if you are a do-gooder trying to achieve the greatest good for the greatest number of people, the EPA is the place to be.

One of the driving forces behind that rule is the Mercury and Air Toxics Standards, an extraordinary achievement for clean air and public health. Because of those standards, all coal-fired power plants will, for the first time, be required to control their emissions of toxic air pollutants — including mercury, arsenic and acid gases. Forty years after Richard Nixon signed the Clean Air Act, and 20 after the landmark amendments signed by George H.W. Bush, we are finally getting around to regulating mercury from burning coal.

Analysis of the impact of mercury-pollution reduction demonstrates just how much we underestimate the benefits of environmental protections. When it comes to reducing mercury pollution, the benefits are based on EPA’s estimates of increased wages of (higher IQ) children born to families that catch freshwater fish for their own consumption.

Think about that one for a second. Mercury is a potent neurotoxin in all its forms, but the EPA estimates do not include mercury that is inhaled or that enters our bodies through other means. And there is nothing in the estimates about the fact that mercury harms the brains of our kids, regardless of whether it influences their future earning potential.

In a sense, that analysis is the moral equivalent of arguing that we should have child labor laws because keeping kids in school makes for more productive workers later on. This kind of reasoning, alas, is why economists are often called names unfit for a family-friendly blog. It’s the most reductionist argument you can find in favor of reducing mercury. (In fact, for the benefits that the EPA quantified, the bulk are due to inextricably connected benefits in reducing deleterious particulate pollution.)

Costs, by the way, are typically well estimated, since businesses are all too willing to share them. So yes, there are costs — but they are small relative to benefits. And costs, as opposed to benefits, are typically overestimates. They are largely based on current available control technologies. They don’t consider that industry may invent an entirely new and unexpected way of complying with regulations at lower cost. That process happens over and over again, and it comes with a name: entrepreneurial ingenuity. Works every time.

Those omissions and shortcomings on either side of the equation only stand to bolster the most important claim: benefits outweigh costs more than 10 to 1 for all major EPA regulations adopted in the past decade.

For every dollar invested, Americans get $10 worth of benefits. I’ll take that ratio any day.

The views expressed are those of the author and do not necessarily reflect the views of the publisher.

Lisa Heinzerling

In his revealing new book about his nearly four years as President Barack Obama’s “regulatory czar,” Harvard Law School professor Cass Sunstein describes a striking moment:  “After I had been in the job for a few years, a Cabinet member showed up at my office and told my chief of staff, ‘I work for Cass Sunstein.’  Of course that wasn’t true – but still.”

But still, indeed.  Sunstein’s book, Simpler: The Future of Government, makes clear just how much power the Administrator of the Office of Information and Regulatory Affairs (OIRA) wields in this administration.  As I have written elsewhere, Sunstein informs us that, as OIRA Administrator, he had the power to “say no to members of the president’s Cabinet;” to deposit “highly touted rules, beloved by regulators, onto the shit list;” to make sure that some rules “never saw the light of day;” to impose cost-benefit analysis “wherever the law allowed”; and to transform cost-benefit analysis from an analytical tool into a “rule of decision,” meaning that “[a]gencies could not go forward” if their rules flunked OIRA’s cost-benefit test.

As Sunstein’s statements attest, the person who leads OIRA is, in the rulemaking domain, effectively the boss of members of the President’s Cabinet.  The head of OIRA determines which rules go to OIRA, what changes the rules will undergo before issuance, and indeed whether some rules will be issued at all.  Rules that make OIRA’s “shit list,” to use Sunstein’s term, simply stay at OIRA indefinitely. Twenty-four of the 149 rules under review as of April 26, 2013, have been at OIRA since 2011.  Three rules have been there since 2010.  Three important rules on food safety, required by legislation signed into law by President Obama himself, have been trapped at OIRA for many months.  A whole group of energy efficiency rules has languished at OIRA for years.  None of these rules will see the light of day without OIRA’s say-so.

It is a matter of some importance, then, to know who is running OIRA now that Sunstein has left.

By law, the Administrator of OIRA must be nominated by the President and confirmed by the Senate.   Since last August, when Sunstein returned to Harvard, OIRA has lacked a confirmed administrator. For several months after Sunstein’s departure, Obama appointee Boris Bershteyn served as acting administrator of OIRA.  But because no one was nominated for the position within 210 days of Bershteyn beginning his service as acting administrator, the Federal Vacancies Reform Act of 1998 prevented him from serving any longer. Since mid-March, therefore, Dominic Mancini – a career economist at OIRA – has been leading OIRA.

One might imagine that a career civil servant operating out of an obscure White House office would give a great measure of deference to rules forwarded by the heads of agencies, who were nominated by the President and confirmed by the Senate.  But, it appears, one would be wrong.

During Mr. Mancini’s tenure so far as OIRA’s head, OIRA has continued to hold onto rules long past any reasonable period for OIRA review; all of the rules I mentioned above remain stuck at OIRA today.  Although review of these long-delayed rules did not begin under Mr. Mancini’s watch, every additional day of delay is a continuing assertion of power by Mr. Mancini over agency heads – often members of the President’s Cabinet – who have sent the rules to OIRA, and have kept them there rather than withdrawing them, because they would like to issue those rules.

OIRA has also, during Mr. Mancini’s tenure, continued to preside over numerous changes to the rules it reviews.  Of the 24 reviews completed during the past 30 days (as of April 26, 2013), only four passed through OIRA with no change.  OIRA’s failure to follow the governing executive orders’ requirements regarding transparency, which I have criticized elsewhere, makes it difficult to know exactly what happens to rules during OIRA’s review.  It does not appear, however, that OIRA has loosened its grip on the agencies since Dominic Mancini has been in charge.

One recently proposed rule, for example, bears all the hallmarks of a proposal deeply affected by OIRA review.  The Environmental Protection Agency (EPA) proposed rule on toxic water pollution from power plants contains a set of options – options 1, 2, 3, 3a, 3b, 4, 4a, 4b – so baroque that it is almost impossible to keep track of them all.  Several “options” aren’t even legal.  Manic proliferation of “preferred options” and forced contemplation of legally suspect, weaker standards are some of OIRA’s signature moves.  My strong suspicion is that when EPA posts the document showing changes made during OIRA review – watch this space for that document, which will likely be posted when EPA’s proposed rule is published in the Federal Register – it will show a major reworking (and, I suspect, weakening) of EPA’s proposal as a result of OIRA review.

It is strange indeed to imagine a career staffer at an obscure White House office calling the shots on U.S. regulatory policy and declining to issue (or insisting on changing) rules forwarded to him by the heads of executive agencies.  The situation becomes stranger still when one recalls the original theory behind OIRA review: to increase political accountability by lodging ultimate control over rules with the President.  But few rules go to the President himself; OIRA must act as the President’s proxy in most matters it reviews.  Has President Obama really given Dominic Mancini, a career economist brought to OIRA ten years ago, his proxy on regulatory matters?  Or is Mr. Mancini acting on instructions from others in the White House?  If so, who is giving those instructions?  Don’t we have a right to know?

The President’s nomination last week of Howard Shelanski to be the new administrator of OIRA, and the confirmation hearing that will ensue, provide an opportunity to get answers to these questions.

Lisa Heinzerling is Professor of Law at the Georgetown University Law Center and a member scholar of the Center for Progressive Reform.  She was Senior Climate Policy Counsel to EPA Administrator Lisa P. Jackson from January to July 2009, and Associate Administrator of the EPA Office of Policy from July 2009 to December 2010.

Richard L. Revesz and Michael A. Livermore (Dean at NYU School of Law; and Executive Director of Policy Integrity)

President Obama announced yesterday his selection of Howard Shelanski as the next Administrator of the Office of Information and Regulatory Affairs in the White House. OIRA, although not widely known, reviews the regulations that are adopted by nearly all federal agencies: everything from EPA rules to limit mercury pollution from power plants to TSA rules governing airport screening procedures. This will give Shelanski enormous power to shape the remainder of the Obama administration’s regulatory agenda.

As a legal academic with stellar credentials, Shelanski follows a long pattern of presidents appointing relatively independent experts to the role of OIRA administration. Like Cass Sunstein, whom he replaces, Shelanski is a well-respected scholar who does not have strong ties to any particular interest group. This tradition of independence is extremely important, and it is a good sign that the president has chosen to continue it.

Shelanski also has a wealth of regulatory experience — arguably more than any prior OIRA administrator. That perspective should help inform how he carries out his oversight function. Too often OIRA review has been seen, and indeed has functioned, as a check on regulatory activity, rather than a mechanism to improve regulation. This antiregulatory tradition at OIRA undermines its credibility as an honest broker in the regulatory process. To best forward OIRA’s true mission of promoting sound, rational rules, the review process must avoid antiregulatory bias. There is good reason to hope that Shelanski’s experience in the trenches has made him sensitive to the complexities and challenges faced by agencies, and that he will work to ensure that OIRA doesn’t tilt against agency action.

There is a long list of high priority rules that are currently in the regulatory pipeline, and the ability to move these smoothly through the regulatory process will, in large measure, determine the success of President Obama’s second term. While legislation is important, in a time of deep political polarization, there is only so much that the president can accomplish with a hostile Congress. Regulation, on the other hand, need not be passed by Congress, so the president has a great deal more freedom of motion.

For example, the president may not be able to force Congress to take climate change seriously, but EPA is developing rules to limit greenhouse gas emissions from power plants. By moving forward expeditiously with these rules, the President can make a major dent in greenhouse gas emissions without waiting for a foot-dragging Congress.

Even more profoundly, EPA has the authority under the Clean Air Act to set a comprehensive cap on greenhouse gas emissions. The Institute for Policy Integrity, which we direct, has petitioned EPA to do just that. A well designed cap that includes a refund mechanism to protect consumers is exactly the kind of cost-effective regulatory system that OIRA should promote.

Ultimately, no OIRA administrator is going to satisfy every interest group with business before federal agencies. Almost no matter what Shelanski does, progressive are likely to complain that OIRA is stifling important agency initiatives, while industry trade associations will argue that OIRA isn’t doing enough to rein-in burdensome rules But this dynamic frees him to follow his own vision of what an evidence-based and intelligent regulatory system should look like.

By CASS R. SUNSTEIN

HOW many millions of hours do you think Americans spend on government paperwork every year?

The answer is staggering. It is measured not in the millions of hours, but in the billions — 9.14 of them, to be exact. Suppose that we value one hour at $20 (a conservative estimate). If so, the government imposes an annual reporting cost of more than $180 billion on the American people.

That figure is more than 20 times last year’s budget of the Environmental Protection Agency, more than seven times that of the Department of Agriculture, and more than six times that of the Department of State.

Large as they are, the numbers do not capture the frustration experienced by countless individuals and small businesses, which are required to grapple with long, complex and sometimes barely comprehensible forms.

Dozens of government agencies impose significant paperwork burdens, but one stands above all others: the Department of the Treasury. That department accounts for 6.7 billon annual hours, which is nearly 75 percent of the total. No other agency accounts for more than 6 percent. The Department of Health and Human Services, the Department of Labor, the Department of Transportation and the Environmental Protection Agency impose big reporting burdens, but in each of these cases, we are speaking of millions of hours, not billions.

The Treasury Department is the national paperwork champion for one reason: It houses the Internal Revenue Service. As Congress starts to explore tax reform, it should begin with a project that ought to attract bipartisan support: a focused effort to slash the immense paperwork burden imposed by government in general and the tax system in particular.

There is reason to be hopeful. From 2009 to 2012, I led the White House Office of Information and Regulatory Affairs, which oversees the Paperwork Reduction Act. (Yes, there is such a thing.)

As part of President Obama’s continuing effort to streamline regulatory requirements, we took a series of quiet but aggressive steps to cut pointless red tape. In the last decade, the estimated paperwork burden peaked between 2007 and 2009, and while it remains far too high, we were able to chip away at it.

The Occupational Safety and Health Administration is not exactly famous for eliminating regulatory costs, but in 2011 it removed 1.9 million annual hours of unnecessary burdens imposed on employers. In 2012, the Department of Transportation saved truck drivers 1.6 million annual hours by eliminating a requirement to file redundant inspection reports. The Department of Education has undertaken a series of efforts to simplify the process for filing the Free Application for Federal Student Aid, removing 5.4 million annual hours of burdens imposed on students and their families.

More ambitiously still, government agencies recently identified more than 100 new paperwork-reduction initiatives, which are anticipated to eliminate some 100 million hours in annual burdens.

IN the area of taxation, Congress has imposed a lot of reporting requirements, sharply reducing the ability of the I.R.S. to streamline the system. And yet the I.R.S. has taken important steps to simplify the annual tax process. Its form 1040EZ allows people earning less than $100,000 to file their taxes with a straightforward one-page form.

The I.R.S. has also announced a far simpler way to assess the popular home-office deduction. More than three million taxpayers claim this deduction, which has long been time-consuming to calculate. The new approach is eliminating 1.6 million hours in annual burdens.

Moreover, the I.R.S.’s ambitious initiative to simplify reporting for capital gains and losses, recently announced though not yet implemented, will allow taxpayers to report summary information without providing unnecessary line-by-line details for each transaction — saving 19 million hours in annual reporting burdens.

Still, the I.R.S. could do far more. It could encourage many more taxpayers to take advantage of its current efforts to allow them to substitute electronic filings for paper ones. It could increase the use of shorter, streamlined forms (some of these are already available), and it could coordinate and consolidate redundant or overlapping requirements.

Some economists, including Austan Goolsbee, a former chairman of the Council of Economic Advisers, have proposed a more ambitious plan: Tax authorities should allow automatic tax returns. They would use the information they already have to send eligible taxpayers fully filled out returns, asking for only a signature and the correction of any errors. California is already using such an approach with a program called Ready Return.

For all the talk about tax simplification, Congress has paid disappointingly little attention to paperwork burdens. But Democrats and Republicans should be able to agree that nine billion hours are far too many. Let’s do something about it.

Stuart Shapiro

In a recent critique of the Obama Administration’s Office of Information and Regulatory Affairs (OIRA), Lisa Heinzerling argues that a lack of transparency at OIRA, the federal office that reviews regulations, has allowed the office to pursue an anti-regulatory agenda, stifling regulations designed to protect public health.

Heinzerling, former Associate Administrator at the Environmental Protection Agency’s Office of Policy during President Obama’s first term, offers a portrait of environmental policy in the current administration that is strikingly at odds with perceptions in both the business community and the Republican Party.

Throughout the last presidential campaign, for example, Mitt Romney argued that he needed to be elected in order to rein in regulatory agencies that had run rampant.  Many Republicans in Congress agree with Eric Cantor’s characterization of President Obama’s regulatory agenda as a “barrage” and “riptide of red tape.”  Small businesses frequently pinpoint regulation as one of the central reasons they have cut back hiring under the current administration.

Surely, much of the difference between Heinzerling’s account and the Republicans’ can be chalked up to the rhetorical flourishes of advocates coming from opposite ends of the political spectrum.  But the views are so far apart that it is difficult to believe that either of them is grounded in reality.  Has the Obama Administration promulgated regulations willy-nilly, stifling the economic recovery?   Or, has the Administration bent over backwards to accommodate business, sacrificing public health in the process?

A more believable characterization of regulatory policy under President Obama is that the administration makes regulatory decisions on a case-by-case basis, sometimes coming down on the side of business and other times against business interests, giving each side reason to be angry.  And basically this is how the regulatory process should work.

The interesting question, though, is:  What factors determine which way each particular decision goes?  Is it the substance of the policy – the merits – that drives the decision?  Or is it the political environment that determines the policy decision?

Interestingly, disparate views seem to argue that substance is dispositive.  In interviews promoting his new book, Simpler: The Future of Government, Cass Sunstein, the OIRA Administrator during President Obama’s first term, has suggested that he urged his staff to ignore political calculations and to make their recommendations based on the substance of the rule.  As Sunstein explained, “[o]n the rare occasions when members of my staff pointed out the views of interest groups, my response was, ‘That’s sewer talk. Get your mind out of the gutter.’”

Similarly, Heinzerling, one of Sunstein’s biggest critics, suggests that substance may be to blame for holding up rules she favors.  In a recent interview she noted, “There were a lot of rules that did go through, a lot of air pollution rules in particular. Air pollution rules fare particularly well in the process because they often reduce particulate matter, and particulate matter kills people, so that produces big numbers.”  She went on to argue nevertheless that OIRA is informed by an anti-regulatory ideology, just one that is driven by the results of cost-benefit analysis.

I have another perspective.  I worked as a staff member in OIRA for five years during the administrations of both President George W. Bush and Bill Clinton.  I have also extensively studied the regulatory process.  Previously I have written that when analytical results and political priorities conflict at OIRA, the political preferences ultimately triumph.  While I would love to believe Sunstein that the Obama Administration is somehow different than its predecessors in this regard, and that it places analysis above politics, I am deeply skeptical.

We will find out what truly drives the Obama Administration’s regulatory priorities over the next three years.  Second-term presidents have a different political calculation than first-termers.  During a first term, a President can be expected to hold off on issuing regulations that may cost votes in a re-election campaign; however, in a second term, the President is much freer to pursue his own policy preferences.

This distinction underlies the perpetual controversy over so-called midnight regulations – or rules issued at the end of a presidency.  If the Obama Administration is truly as driven by policy as Sunstein asserts, or as motivated by cost-benefit analysis and antipathy toward regulation as Heinzerling fears, then we should see no surge in regulation as the Obama Administration winds down.  The regulations currently being held by OIRA will never see the light of day.  Yet I am not sure there is anyone who seriously expects that to happen.

Stuart Shapiro is Associate Professor and Director of the Public Policy Program at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.  From 1998 to 2003, he served as a policy analyst in the Office of Information and Regulatory Affairs within the Office of Management and Budget.

By Zach Rausnitz

Outsiders underestimate how valuable the notice-and-comment piece of the rulemaking process is for government agencies, Cass Sunstein, the former head of the Office of Information and Regulatory Affairs in the Obama administration, said April 5.

Among law professors, “it’s long been thought that the process of notice and  comment is basically kabuki theater,” said Sunstein, himself a law professor for  decades before heading up OIRA and who has since returned to academia. “That administrative-law sophisticated wisdom, it couldn’t be further from the truth,” he said at a Brookings Institution event.

In one case, a commenter responded to a proposed rule, “You think it’s clear. We have no idea what these words mean,” Sunstein recalled. Other commenters have  expertise that regulators wouldn’t otherwise know about, he said.

He also elaborated on the problem of obscure and confusing language, saying it pervades regulations and other public communications because government officials are so familiar with the matters at hand that they don’t realize how they sound to the public. Complex language is sometimes destructive, he added, as when poor students don’t apply for financial aid if the language used in the  forms is unintelligible.

Simplicity can be costly too, though. Sunstein noted that simplifying a  complex process requires a lot of internal work, and that an overly simple regulation can be exploited or evaded more easily.

He also said that when he entered government, he made a point of not imposing  his academic ideas on his agency’s employees. Referring to his book Nudge, about how the way that options are presented affects the choices people make, he said, “If an academic comes in and says, ‘It’s nudge time,’ they might say, ‘It’s go back to Harvard time.’”

For more: – go to the Brookings event webpage (audio available)