When asked by a reporter why he robbed banks, the notorious bank robber Willie Sutton is said to have responded, “Because that’s where the money is.” For decades, the accepted conventional wisdom held that a similar dynamic motivated legions of industry lobbyists to parade through the front door at the White House Office of Information and Regulatory Affairs (OIRA). Why—one might ask—does industry spend so much time complaining to OIRA’s political appointees and staff-level economists about rules they find inconvenient to their bottom line? Because, like CPR has been saying for many years in reports, apparently that’s where the regulatory relief is to be had.
In 2011, we released a ground-breaking report that sought to move beyond mere intuition and confirm with actual data the degree to which industry was able to wield its outsized influence to secure favorable deregulatory changes to agencies’ pending rulemakings.Full text
When it commenced on June 1, OIRA’s review of the EPA’s draft final rule to limit greenhouse gas emissions from existing power plants launched a flurry of lobbying activity among a veritable who’s who of America’s largest fossil fuel polluters. In just over six weeks, the White House’s antiregulatory shop has presided over no less than 21 Executive Order 12866 meetings, the majority of which involved high-priced corporate lobbyists seeking to dilute, delay, or block the rule outright.
The log for a July 1 meeting requested by Berkshire Hathaway Energy contains an interesting tidbit: Among the attendees was a representative of the Small Business Administration’s (SBA) Office of Advocacy. Nominally, of course, the mission of the SBA Office of Advocacy is to ensure that the concerns of America’s small businesses are adequately represented in the federal rulemaking process. So, it’s a little perplexing that a member of the SBA Office of Advocacy staff would be seated alongside the President and CEO of one of the largest and wealthiest energy concerns in the United States and two of its vice presidents. Berkshire Hathaway Energy is of course a component of Berkshire Hathaway, the Chairman and CEO of which is Warren Buffet who himself is currently listed as the third wealthiest person on earth.Full text
“I’m Republican, and I want to do regulatory reform.” Whether they’ve uttered that exact nine-word phrase or not, virtually every Republican on Capitol Hill has enthusiastically endorsed the sentiment it expresses at some point—if not on a near-daily basis—during the last few years. Who could blame them? The unshakable conviction that our regulatory system is broken and that gutting it is the key to its salvation is apparently one of the few areas where all the GOP’s members can find common ground. Attacking the regulatory system has become a safe topic of conversation for conservatives—almost their version of “weather” small talk. And not for nothing, they’re pretty confident it’s a political winner, too.
Witness this week, when both the House and the Senate have scheduled oversight hearings for the White House Office of Information and Regulatory Affairs (OIRA)—an obscure bureau with a direct political line to the Oval Office that is charged with reviewing agency regulations. In practice, OIRA serves as the single most powerful antiregulatory force in the rulemaking process, translating the White House’s political calculations and intense lobbying behind closed doors from well-connected corporate interests into the delay, dilution, or death of pending regulations. To my knowledge, both chambers of Congress have never scheduled two OIRA oversight hearings in the same week before.
CPR Member Scholar Noah Sachs is scheduled to testify at the hearing before the House Judiciary’s Subcommittee on Regulatory Reform, Commercial, and Antitrust Law today. As he explains in his testimony, OIRA is arguably one of the greatest sources of dysfunction in the rulemaking process, working time and again to prevent agencies from carrying out their statutory missions of protecting people and the environment in an effective and expeditious manner. Specifically, he writes:
Not only does OIRA review extend the length of time for rulemaking, but it also provides numerous opportunities for political interference with the content of the rule. During OIRA review of agency regulations, industry lawyers and lobbyists use OIRA as a court of last resort to weaken or block pending regulations that have been vetted within the agency that promulgated them.
When your public approval rating has hovered at or below 20 percent for the last several years, maybe the last thing you should be doing is maligning other government institutions. That didn’t stop a group of Senators from spending several hours doing just that today during a joint hearing involving the Senate Budget and Homeland Security and Government Affairs Committees. The joint hearing was nominally about a nonsense regulatory reform proposal called “regulatory budgeting” (for more on that, see here), but it quickly devolved into a no-holds-barred hate session directed at federal agency employees, as the upright and honorable members of the “world’s greatest deliberative body” repeatedly attacked the prevailing “culture” at agencies.Full text
For decades, so-called regulatory “reformers” have backed up their sales pitches with the same basic promise: Their goal is not to stop regulation per se but to promote smarter ones. This promise, of course, was always a hollow one. But it gave their myriad reform proposals—always involving some set of convoluted procedural or analytical requirements designed to surreptitiously sabotage the rulemaking process—some shred of legitimacy, while insulating the proponents against any public backlash that might follow from such cynical attacks on broadly popular public health, safety, and environmental programs.
If the real motivation behind the “regulatory reform” movement wasn’t clear before, then tomorrow’s hearing before the Senate Homeland Security and Government Affairs and Budget Committees on “regulatory budgets” ought to peel away the last of any lingering doubts. The idea behind “regulatory budgeting” (or “regulatory pay-go,” as it is sometimes known) is that Congress would set a hard cap on total regulatory costs, and once the cap has been met, agencies would be prohibited from issuing any rules until their costs have been offset by the removal of existing regulations. Its proponents claim that this cap on regulatory costs somehow reflects all the safeguards our country “needs” or “can afford.” Ask them to substantiate that claim, though, and all you’ll get is a lot of arm waving and vague platitudes.
Unless you’re living under a rock or are a FIFA executive official being indicted for criminal conspiracy, you’ve no doubt heard by now that the Environmental Protection Agency (EPA) has at long last released its final rule establishing a clear regulatory definition that, consistent with both the previous court decisions and the best available science, delineates which water systems are covered by the Clean Water Act. The rule was included in a recent CPR Issue Alert, highlighting 13 essential regulatory actions that the Obama Administration should commit to completing during its remaining time in office.
The rule would seem to provide everything that conservative opponents of regulation would want: regulatory certainty and efficient use of agency funds (i.e., by preventing the EPA from having to undertake wasteful case-by-case analyses of which water bodies warrant federal protection). Yet, it has been a lightning rod of controversy, attracting specious claims that the rulemaking represent a nefarious attempt by power-drunk, faceless bureaucrats in Washington, DC, to assert federal control over all land use in the United States.Full text
The Competitive Enterprise Institute is out with the latest in a series of industry-friendly reports overcooking the supposed costs of regulation, while understating or simply ignoring the vast benefits to health, safety and the environment. Not surprisingly, The Wall Street Journal and The Washington Times were good enough to put the right-wing echo chamber in motion in its service.
A few quick thoughts: This report isn’t scholarship, it’s arithmetic advocacy—and it’s poor arithmetic at that. The organization that sponsored the report is more concerned with advancing its political agenda of laissez faire government at all costs than it is with sound public policy. This report is meant to advance that agenda, rather than inform the ongoing debate over the U.S. regulatory system. After all, what good does it do to tally up the costs of regulation without providing an estimate of regulatory benefits with which to compare them? Policymakers and the media would do well to ignore this report.
The report’s findings appear to be based on several inflated regulatory cost estimates, lined up and added together to produce exactly what the author likely intended: a huge number. Some of the numbers come from estimates produced by regulatory agencies themselves, which several retrospective studies have shown to be systematically inflated. Others come from individual reports assembled by the author. To the extent that the CEI report is based on several different sources that relied on a variety of different methodologies, there is a large possibility that simply adding them up will result in a lot of double counting, further inflating the CEI report’s conclusion. The author of the CEI report, however, appears to make no effort to address this problem either.Full text
This morning, the House Judiciary Committee is holding a markup on the Regulations from the Executive in Need of Scrutiny Act of 2015, or REINS Act (H.R. 427). Even among the many extreme antiregulatory bills that Congress has considered this session, the REINS Act still stands out for its breathtaking audacity. If enacted, this bill would block the most important environmental, safety, and public health regulations from taking effect unless Congress affirmatively approves them within the extraordinarily short period of 70 session days or legislative days. It is not a stretch to say that many regulations that are now benefitting millions of Americans—such as those limiting lead in gasoline or requiring air bags in automobiles—would never have seen the light of day had the REINS Act been in place. Versions of this bill have been introduced in both chambers of Congress over the last several sessions, but fortunately none have been enacted into law.
In response to this bill, 83 of the nation’s leading experts on administrative law and regulatory policy have signed on to a letter to the members of Congress expressing their concerns with the REINS Act. Among the concerns described in the letter are that “the REINS Act would replace the strengths of agency rulemaking with the weaknesses of the legislative process” and that the bill is “counter-democratic.” Twenty-six CPR Member Scholars were among the experts to sign on to the letter.Full text
Background: Tomorrow, the full House Judiciary Committee will be holding a markup of the H.R. 1759, the All Economic Regulations are Transparent Act of 2015 (ALERT Act), sponsored by Rep. John Ratcliffe (R-Tex.). The House of Representatives considered a similar bill during its last session. (The hearing is also noteworthy, because the committee will be marking up H.R. 427, the Regulations from the Executive in Need of Scrutiny Act of 2015, or REINS Act. For more information on the REINS Act, see here.)
What the ALERT Act does: The bill would impose a series of new burdensome reporting requirements on agencies and the White House Office of Information and Regulatory Affairs (OIRA) regarding the progress and impacts of the agencies’ pending rulemakings. Once a month, agencies would have to provide detailed information about any rules that they are working on, while OIRA would have to issue an annual report detailing the cumulative costs of all rules that have been proposed or finalized during the previous 12 months. Agencies also would be blocked from implementing their final rules for at least six months until after they have published certain information about the rules on the internet.Full text
In the run-up to this morning’s oral arguments before the Supreme Court on the Environmental Protection Agency’s rule to limit hazardous air pollutants from fossil-fueled power plants—and indeed throughout the oral arguments themselves—opponents repeatedly pointed out that the benefits of the rule in reducing mercury pollution were “only” between $4 million and $6 million. Putting aside the ethically problematic question of trying to put a dollars-and-cents value on achieving improved public health and environmental protection, it is worth pondering this number and what it reveals about the significant methodological flaws that are endemic to cost-benefit analysis. (For the record, this number is supposed to represent the “value” of lost earning potential of children that the rule would protect against IQ point degradations. Do you see what I mean about ethically problematic?)
Opponents of the rule claim that this $4-million figure is the only valid benefit estimation of the rule that the EPA should able to count in evaluating its mercury rule. In making this argument, their real beef is that the EPA has also counted the co-benefits of the rule—that is, benefits that the rule achieves as an incidental byproduct of what is really trying to achieve. In this case, EPA’s rule is meant to address mercury and other “hazardous” air pollutants, but along the way would significantly reduce particulate matter and ozone, which are classified as- “non-hazardous” air pollutants, but are still known by scientists to cause a host of environmental and public health problems.Full text