President Obama’s administration slow-walks new rules
By DARREN SAMUELSOHN and JONATHAN ALLEN
It’s a staple of Mitt Romney’s talking points: President Barack Obama and his lefty lieutenants have stifled economic growth with a Politburo-style regulatory regime.
After all, the president dropped two of the biggest regulatory bombs in memory with the Dodd-Frank Wall Street Reform and a health care law that gives the Health and Human Services Department sweeping authority to run a whole new insurance system.
But now Obama’s making it tougher to put costly new rules in place. His enforcer: Cass Sunstein, an old buddy from their University of Chicago days whose friendship with the president gives him more clout in the West Wing than many advisers of higher rank. Sunstein has imposed what is essentially a soft freeze on new regulations.
Even though that’s not official policy, the administration has been increasingly frugal in issuing regulations, according to a POLITICO review of government data and more than two dozen interviews with current and former administration officials, lawmakers in both parties, business leaders and liberal activists. The analysis of the federal rule-making database shows Obama as of Tuesday had issued 1,004 final regulations since arriving in office. That’s fewer than his two immediate predecessors, George W. Bush and Bill Clinton. This year, Obama is also on pace to put out the fewest “economically significant” regulations of any year in his presidency.
In classic Washington fashion, the administration’s slowdown of new rules is making liberals mad and winning Obama no credit from Republicans or the business community — especially not in an election year in which the over-regulator meme is so prevalent.
Some say he truly believes in regulatory restraint during tough economic times. Others see a crass political calculation at play: Don’t give Romney any more ammunition before the election — and then open the floodgates after the polls close.
Either way, the result is the same.
Most agencies aren’t even on the scoreboard with big-ticket rules this year: The Environmental Protection Agency: two major regulations, clamping down on emissions from petroleum refineries, and on oil-and-gas drilling operations. The Department of Justice: One, on prison rape. Treasury: One, on Dodd-Frank.
Republicans “just assert stuff and the facts have never encumbered them. I think there’s a sense that Democrats are regulation-bound or regulation-minded and so the assertion sticks. I don’t think it’s any more complicated than that,” said Harold Ickes, who served as deputy chief of staff to Clinton and then counted delegates for Hillary Clinton when she ran against Obama.
Romney has linked the administration’s rule-making to his larger narrative about Obama’s job-killing agenda.
In Michigan last month, the Republican led a call-and-response asking a crowd if it wanted “four more years of Obamacare,” “four more years of Dodd-Frank” and “four more years of energy policies that say we can’t use our oil and our coal and our gas.”
And here’s what he said in March in Illinois: “Day by day, job-killing regulation by job-killing regulation, bureaucrat by bureaucrat, this president is crushing the dream and the dreamers, and I will make sure that finally ends.”
GOP-aligned groups are reinforcing the message.
American Crossroads is running an ad quoting Cecil Roberts, president of the United Mine Workers of America, discussing concerns about rules to limit coal pollution. “Our health care, pensions and way of life are on the line,” a narrator warns. “Say no to the Obama administration’s extreme EPA rules.”
Clearly sensitive to the attacks, Obama has defended himself on the trail.
“I don’t believe every regulation is smart, or every tax dollar can be spent wisely,” Obama said at a campaign rally last month in Durham, N.H.
Facts can be tricky things, as evidenced by a House Energy and Commerce Committee news release issued last month June when EPA bowed to industry demands to soften a proposal regulating cement kilns — to the consternation of environmentalists.
In the same sentence, Rep. John Sullivan (R-Okla.) called the industry-friendly rule a “welcome development” while still denouncing the “EPA’s radical regulatory agenda.”
Experts on federal regulations say that rule-making often slows down in an election year but that it’s particularly acute now because Republicans have focused so much attention on that element of the president’s work.
“They’re just incredibly afraid of the job-killing label,” OMB Watch President Katherine McFate said.
Agency officials say the White House is so obsessed with depriving Republicans of fresh ammunition that Sunstein has moved beyond the traditional role of reviewing regulations to dip into minor matters that don’t rise to his level as head of the Office of Information and Regulatory Affairs, such as guidance from the agencies to the states.
“They are asserting their review authority over lesser and lesser things,” an EPA official said.
Regulations are a methodical and essential part of any administration’s governing once the legislative sausage-making is complete. Agencies must follow strict administrative requirements to propose rules, accept public comment and then finalize their plans — all with the Office of Management and Budget keeping close tabs on the process.
Obama’s regulatory policies have caused heartburn for agency officials and advocates who see months and years of work blocked by the White House internal review process. Ideas stuck on the drawing board include an EPA plan to reduce mercury waste from dentist offices, an Occupational Safety and Health Administration update to protect workers from exposure to crystalline silica dust and Energy Department efficiency standards for walk-in freezers.
Sunstein said the number of economically significant regulations that come out in any given month or year depends on several factors — but not politics.
“The president has made clear his priority is getting out of a tough economic situation,” Sunstein told POLITICO. “From the time I got here, my priority was to make sure our regulatory framework fit with economic priorities. If you have expensive rules, you want to make sure they are amply justified.”
So far, the number of Obama’s regulations trails those of his predecessors. After the midterms, Bill Daley entered the White House as chief of staff. He courted the U.S. Chamber of Commerce and promised to make the administration more business-friendly.
While the overall number of final Obama rules was slightly higher the year after the 2010 mid-terms, the number of economically significant rules — which have either a $100 million price tag or $100 million in public health benefits — dropped from 70 in 2010 to 55 last year, according to a search of the economically significant rules listed in the OMB database. This year, nearly a third of the big-ticket rules — eight of 25 — have been related to implementing the health care law.
The length of time regulations sat at OMB for review also has increased by more than three weeks since the 2010 elections, from an average of 45 days before to 67 days after.
And here’s how Obama’s 1,004 rules completed as of Tuesday compares overall with his predecessors: George W. Bush had completed 1,073 rules at the same point in office, Clinton 1,775, according to the OMB database. In September 1993, Clinton issued an executive order that narrowed the definition of a economically significant rule and the number of rules reviewed by the White House.
“Just the fact is we haven’t had as many as our predecessor,” Sunstein said. “That’s suggestive that there’s been some discipline.”
Sunstein, once a target of conservative commentator Glenn Beck, has now become a lightning rod for agency officials and liberal activists. His office, which is part of the White House OMB, can make or break new regulations — and, more frustrating to some folks in the administration, tweak them just enough at the last minute to tip the balance more toward industry.
A hard-nosed number-cruncher known for halting regulations if he determines they would burden business more than they would benefit the public, Sunstein has the added gravitas of coming into his job in September 2009 as a friend of Obama’s.
“I can talk to him if I need to,” Sunstein said. “But he has a lot of things to do, so I want to work under his guidance without diverting him from other things like wars and averting a depression.”
Sunstein’s “strength in the administration appears to be increasing over time,” said John Graham, George W. Bush’s first regulatory chief and now dean of the Indiana University School of Public and Environmental Affairs. Graham noted that Sunstein has pushed through a pair of regulatory reform initiatives that eliminate red tape at agencies and kill redundant rules, an effort that should help Obama improve his image with industry.
“The more visible OIRA becomes in regulatory reform, the more it will relieve the widespread concern that President Obama is anti-business,” Graham said.
A former Obama administration official told POLITICO that Sunstein’s influence also has grown since OMB Directors Peter Orszag and Jack Lew moved on, elevating Jeff Zients to the role of acting chief.
“Cass is in the enviable position of being very close to the president, and he is therefore able not only to read him well but also to reflect him well,” said Sally Katzen, former Clinton regulatory chief and now senior adviser at the Podesta Group.
In the interview, Sunstein touted a range of rules that he said have gotten the government solid bang for its buck: roughly $91 billion in net public health benefits and consumer savings through the first three fiscal years of Obama’s term. He cited new fuel economy regulations that will reduce the number of trips Americans need to make to the gas station and a salmonella rule that’s preventing up to 79,000 illnesses a year. There have also been other efforts, including replacing the food pyramid with a graphic that displays food categories on a plate.
“If you’ve got a rule that prevents a serious harm to people who can’t in some cases really protect themselves, that’s good,” Sunstein said.
Obama-era regulation implementation costs also have peaked at just more than $9 billion in a single year. “We didn’t hit the [George W.] Bush high” of $10 billion, nor the highs during the prior three administrations — Clinton, George H.W. Bush and Ronald Reagan — which were all well over $10 billion, Sunstein said.
Speaking Friday in Pittsburgh, Obama went on offense on regulations, saying Romney plans to eliminate rules “that we just put in place to make sure that Wall Street doesn’t act recklessly and we can prevent another taxpayer-funded bailout when the financial system goes out of whack; regulations that protect our air or our water; regulations that protect consumers from being taken advantage of.”
Democratic lawmakers defend Obama’s regulatory record.
“From the beginning, they’ve been trying to balance the equities there,” said Rep. Chris Van Hollen (D-Md.). “My sense is that they work very hard to be reasonable both in protecting the public health and protecting consumers but doing it in the most cost-effective way.”
While Republicans are not holding back in their criticism, most industry groups are far more restrained. Some acknowledge the numbers show a less aggressive government than the political rhetoric suggests. Others don’t want to upset Obama for fear he’ll unleash many more rules if he wins a second term.
“It’s probably accurate to say the regulations, the economically significant regulations, have been fewer,” said Bill Kovacs, a senior vice president of the U.S. Chamber of Commerce, who noted the Obama EPA hasn’t exercised its full authority under the Clean Air Act in regulating power plants. So far, EPA has proposed rules only for new facilities and postponed until after the election a much more costly set of requirements on the nation’s aging electric utilities.
“The president has said, ‘Hey, we’ve got to slow this down,’” said Rep. Lee Terry (R-Neb.). “We can’t have more layoffs in October and November.”
Rep. Mike Simpson, the Idaho Republican who is in charge of EPA’s annual spending bill, predicted an Obama defeat would unleash a torrent of midnight regulations from Obama before Romney is sworn in.
And “if he is reelected,” Simpson added, “it’s hellbent for leather.”