OMB Watch on the President’s Jobs Council Report

Editor’s Note:  OMB Watch’s contention that OIRA oversight of the process would give the White House “even more power to contradict or slow down agency rulemaking” fundamentally misunderstands the role of the long-established role of the President in managing regulatory policy.  OIRA participation in reviewing requests for reconsideration of final rules would promote the Obama Administration’s goal of reviewing and changing as needed regulations which have a profound and lasting impact on job creation, economic growth and America’s international competitiveness. 

Jobs Council Misses the Mark, Offers Unbalanced Proposals that Could Undermine Public Protections
 President Obama’s Council on Jobs and Competitiveness (Jobs Council) recently released its 2011 year-end report, Road Map to Renewal. The report comes one year after Obama tasked the Jobs Council with developing “a set of recommendations to create jobs in the short run and improve our nation’s competitiveness over the long term.” The report includes recommendations on tax reform, manufacturing, energy, innovation, education, and regulation and has been widely criticizedfor offering a one-sided “corporate” agenda. While the Jobs Council wrote that “getting the regulatory balance right is important,” its proposals on regulatory “reform” narrowly favor corporate interests. The proposals, which mischaracterize the important role of regulation in protecting the American people, will not generate jobs or increase American competitiveness.Unbalanced ReformsThe report offers three broad regulatory recommendations: enhance stakeholder engagement, improve regulatory processes, and strengthen regulatory impact analysis. Although the recommendations include some positive measures to improve electronic access to regulatory information, other reforms would delay important public protections and represent the needs of regulated parties, not the public. For example, the recommendations for enhancing stakeholder engagement include establishing a regulatory ombudsman in each agency to reach out to regulated parties and receive submissions “of regulations that are outdated, too burdensome or in conflict with agency objectives.” Since regulated entities already hire lobbyists and have many more meetings with regulatory staff than public interest organizations, it is hard to understand why they need an ombudsman to ensure industry interests have even moreaccess.The recommendations also call for expanding the role of the Office of Information and Regulatory Affairs (OIRA) both in the rulemaking process and in regulatory review. Affected parties can already petition an agency to reconsider final rules, but the report suggests that OIRA should guide how agencies respond to petitions for reconsideration of final rules. This would give OIRA even more power to contradict or slow down agency rulemaking, at the behest of special interest lobbyists or the political expediencies and whims of the White House.Perhaps the most disconcerting proposals are the recommendations to strengthen regulatory impact analysis. The report recommends extending regulatory impact analysis requirements to independent regulatory commissions (IRCs) and giving OIRA greater authority to review regulations from executive branch agencies andIRCs, which have traditionally enjoyed a certain degree of autonomy from the administration. The recommendation for increasing OIRA’s size and involvement in rulemaking also mischaracterizes the role of agency experts and completely ignores the layers upon layers of analysis that agencies already undertake. According to the report, “[t]he work of agency economists should be evaluated by other economists, with compensation and career advancement tied to the quality of their analysis, not on whether the analysis supports decisions already made.” With no supporting evidence, this insinuates that agency decision making is not informed by sound economic analysis, when in reality, major rules already undergo economic analysis at the agency and receive additional scrutiny during OIRA review.Reforms Conflict with Public Protection PrioritiesSome of the proposals in the report mirror those that have appeared in anti-regulatory bills and have been opposed by administrative law scholars, public interest groups including the Coalition for Sensible Safeguards (CSS), and the administration. The Office of Management and Budget (OMB) issued Statements of Administration Policy against a trifecta of bills passed in the House in 2011: the Regulatory Accountability Act (RAA), the Regulatory Flexibility Improvements Act (RFIA), and the Regulations From the Executive in Need of Scrutiny (REINS) Act. The administration has also demonstrated a stronger commitment to protecting public health and safety standards in recent weeks. The administration received accolades from environmental and public health groups for rejecting a permit for the controversial Keystone XL pipeline, and the U.S. Environmental Protection Agency (EPA) issued long-awaited ruleslimiting emissions of mercury and other air toxics from coal-fired power plants. Given these developments, the recommendations in the regulatory section of the Jobs Council report appear to contradict both rhetoric and actions taken by the administration in the past couple of months.This may not be surprising, given the composition of the 27-member Jobs Council. It is heavily weighted with chairs and CEOs of major corporations, and the Council has been criticized for favoring the interests of the 1 percent. Of the two Council members representing American workers, one union leader abstained from the vote (United Food and Commercial Workers President Joseph Hansen), and the other issued a dissent to the report. In his dissent, AFL-CIO President Richard Trumka faulted the report for failing to recognize the problems caused by inadequate regulation. “The report addresses regulatory issues as if we were not in the midst of a prolonged economic crisis whose proximate causes clearly included inadequate regulation of business, and in particular financial markets and institutions,” he said.

The report also ignored the public benefits of regulation. OIRA Administrator Cass Sunstein has reported that over the Obama administration’s first three years, the net benefits of the regulations it enacted were $91.3 billion. Yet the Jobs Council recommendations on regulatory “burdens” made little mention of the health, environmental, and innovation-generating benefits of environmental and workplace standards. As a New York Times editorial noted on Jan. 23, “The council’s recommendations have resembled not so much expert advice as a corporate wish list.” It’s a wish list the country can’t afford and the administration should reject.

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