Wednesday, September 19, 2007

New Policies Could Force Increased OMB Oversight Of EPA Risk Studies

A new memorandum from the White House Office of Management & Budget (OMB) on federal risk assessment principles appears to give OMB first-time authority to review “influential” EPA risk assessments, a move that increases the office's power to review agency documents and will likely prompt increased Democratic and activist criticisms.

The new principles could also shine a spotlight on a long-awaited EPA risk review framework that gives OMB the central role in conducting interagency reviews of agency risk assessments. The framework has been stalled at EPA for months, and the Government Accountability Office (GAO) is slated to question federal officials in the coming weeks on the delay.

OMB officials Sept. 19 unveiled the memorandum as a scaled-back, and less formal, version of a controversial draft risk assessment bulletin that drew significant criticism from the National Academy of Sciences (NAS), EPA officials, congressional Democrats and others. After NAS called for OMB to withdraw the bulletin in a January 2007 report, then-OMB Director Rob Portman said the office would withdraw it “in its current form.”

The new memo generally reiterates Clinton-era risk assessment principles that require use of best available science, qualitative and quantitative risk characterizations, detailed assumptions and discussion of all relevant hazards. Like the earlier version, the new document urges agencies to take cost-benefit considerations into account when making risk management decisions and details a separate set of principles for priority-setting using risk principles.

However, the memo also now indicates that oversight of “influential” risk analyses should now fall to OMB, saying agencies should refer to OMB’s recent bulletin on “good guidance practices” when deciding on “best practices for . . . influential scientific information.” The guidance bulletin cites Executive Order 13422, which gives OMB authority to review agency guidances with an expected economic impact of at least $100 million, as the basis for its expanded review authority of agency documents.

The new memo defines “influential” analysis as one for which “the agency can reasonably determine that dissemination of the information will have or does have a clear and substantial impact on important public policies or important private sector decisions.”

Giving OMB review authority on the basis of dividing assessments between influential and non-influential documents contradicts NAS and senatorial criticism of the White House's now-defunct proposed bulletin. NAS, for example, said the bulletin's “categories of risk assessments, and thus the standards, are not based on inherent properties of risk assessments but on aspects of risk management,” rejecting that approach as “problematic.”

For instance, NAS said “the effort to separate risk assessments arbitrarily into two broad categories does not appropriately recognize the continuum of risk assessment efforts in terms of potential impact on economic, environmental, cultural, and social values. Any attempt to divide that continuum into two categories is unlikely to succeed and will not substantially improve the quality of risk assessments.”

Sens. Joe Lieberman (I-CT), who chairs the Senate government affairs committee, and Jeff Bingaman (D-NM), who chairs the energy committee, raised similar concerns in a May 14 letter to OMB.

A Bingaman spokeswoman now says the administration has made some improvements in the document but may not have adequately addressed all concerns. “It's better, but we're not sure if it's as good as it could be,” the spokeswoman says, noting staff had not fully reviewed the memo at press time.

OMB first issued its draft bulletin in January 2006. However, NAS faulted its overly broad definition of risk assessment, its prescriptive requirements and its adoption of approaches “in conflict with long-established concepts and practices.” NAS also objected to the proposed bulletin's definition of “adverse health effect,” which it found to be too limiting for the purposes of risk assessment and mitigation. The definition “ignores a fundamental public health goal to control exposures well before they cause functional impairment,” the committee said.

The new risk memorandum, signed by OMB Office of Information & Regulatory Affairs Administrator Susan Dudley and White House Office of Science & Technology Policy official Sharon Hays, says OMB decided “not to issue the [risk] bulletin in final form. Rather, we are issuing this Memorandum to reinforce generally-accepted principles for risk analysis upon which a wide consensus now exists.”

The memo acknowledges that environmental and health analyses are its primary targets, saying in a footnote, “While many of the principles presented in this Memorandum may be relevant to other fields . . . the focus of this Memorandum is on those risk analyses related to environmental, health and safety risks.”

That acknowledgment mirrors activist concerns that the proposed bulletin, while applying to the entire federal government, would have most strongly influenced EPA decision-making because of the nature and scope of the agency's research and analysis programs.

While the decision to release the memo rather than finalize the bulletin may satisfy some skeptics because it is less prescriptive than the proposed bulletin, allowing EPA to keep some flexibility when conducting risk assessments, it has prompted criticism from activists who say it continues to subordinate scientific rigor to cost-benefit analysis, which has become a cornerstone of the White House's risk assessment and regulatory approach.

The new memo directs risk managers charged with making policy decisions to OMB Circular A-4, which lays out how to conduct regulatory cost-benefit analysis. “Agencies should employ the best available scientific, economic and policy analysis, and such analyses should include explanations of significant assumptions, uncertainties, and methods of data development,” the memo says.

The memo adds, “In making significant risk management decisions, agencies should analyze the distribution of the risks and the benefits and costs (both direct and indirect, both quantifiable and non-quantifiable) associated with the selection or implementation of risk management strategies.”

The memo also strongly supports the highlighting of uncertainty in risk assessments, a priority of EPA Office of Research & Development Assistant Administrator George Gray. Echoing Gray's frequently stated position, the memo says, “Due to the inherent uncertainties associated with estimates of risk, presentation of a single estimate may be misleading and provide a false sense of precision. Expert panels agree that when a quantitative characterization of risk is provided, a range of plausible risk estimates should be provided.”

That approach to risk assessment has drawn fire from several quarters, including from site cleanup managers who argue a range of risk estimates cannot easily be extrapolated into a health or cleanup standard.

The new memo is similar in some respects to a version proposed by the industry-funded Center for Regulatory Effectiveness (CRE), which was floated earlier this year “to focus peoples’ attention and get the ball rolling,” a CRE source said at the time. For instance, the memo highlights the role of the CRE-backed Information Quality Act (IQA) in future risk assessment procedures, saying in a footnote that the entire memo “is intended to complement and support” OMB implementation guidelines for the law.

A CRE source now agrees that the new memo means “all [OMB] regulations and procedures are now applicable to risk assessment,” specifically noting its “incorporation by reference” of IQA guidelines. The source also highlights the memo's “strong statement that they'll follow up on how agencies comply. If they do that, it's a pretty significant change.”

The source declined to discuss parallels between the memo and CRE's draft, saying, “I don't want to go into that. Ask other people.” -- Adam Sarvana

Date: September 19, 2007

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