Cass Sunstein and OIRA

by Rena Steinzor

January 26, 2009

This morning, the Center for Progressive Reform published a report on some of the issues that will confront President Obama’s “regulatory czar” Cass Sunstein, if, as seems likely, he is nominated and confirmed to be the director of OMB’s Office of Information and Regulatory Affairs.


I’ve blogged on this before, and our report, Reinvigorating Protection of Health, Safety, and the Environment: The Choices Facing Cass Sunstein, speaks for itself, so I won’t go on too long here. The report fleshes out a number of significant differences that we have with the regulatory methods and outcomes Professor Sunstein has embraced – his approach to cost-benefit analysis first and foremost. We believe OIRA’s 25-year record of applying cost-benefit amply demonstrates that it is an inherently flawed method of evaluating proposed regulations. Time and again, benefits (to the public) are understated and costs (to industry) are overstated, with the result that badly needed regulations – developed by environmental, health, and safety experts at regulatory agencies pursuant to a congressional grant of authority – are scuttled or weakened by OIRA economists.


While David Stockman and the Reagan Administration didn’t invent cost-benefit analysis, they turned it into a tool for defeating needed regulation. Somehow they managed to sell the Washington establishment on the idea that cost-benefit brought mathematical precision to the regulatory process. That idea was a scam. The Clinton Administration should have dispatched cost-benefit analysis or at the very least diminished its role in the process, but it missed the chance. The Bush II Administration turned this reactionary methodology into a bulldozer, and developed a series of cost-benefit-related tools that they used to lay waste to needed protections for health, safety and the environment.


The Obama Administration has a unique opportunity to fix the system, by recognizing the failings of cost-benefit. But Cass Sunstein, for all his impressive credentials, seems unlikely to do that. We’ve had this argument with him for some time now, and we expect to keep having it with him once he takes over at OIRA.


We hope we’ll be surprised – that he’ll turn over a new leaf once in office. His record as an academic offers little support for the hope, however. So while there’s good reason to expect that EPA and the other regulatory agencies will once again put environmental, health, and safety interests first in their regulating, there’s ample reason to worry that OIRA may yet be a barrier.


We don’t support or oppose presidential nominations, because we’re not in that business. But if and when Professor Sunstein is confirmed, we plan to pay very careful attention to what happens at OIRA.


The co-authors of The Choices Facing Cass Sunstein are CPR Member Scholars John Applegate (Indiana University–Bloomington), Thomas McGarity (University of Texas), Sidney Shapiro (Wake Forest University), Amy Sinden (Temple University), Rena Steinzor (University of Maryland), Robert R.M. Verchick (Loyola University–New Orleans), and CPR Policy Analyst James Goodwin.

Here is a letter to the editor of mine published in NYT during April, 2007. NEW YORK TIMES Opinion To the Editor: Published: April 29, 2007 Protecting Industry, Not Workers OSHAs defense of its inaction on behalf of American workers only confirms its insensitivity to the families of the people it is supposed to protect. In modern times, when pro-business administrations occupy the White House, they defang the regulatory bureaucracy by wiping out agencies, appointing heads of agencies in bed with the industries under their authority, cutting their staffs as well as budgets and conducting studies to delay taking action. In the mid-1980s, when I was the mayor of University Park, a suburb of Chicago, I once asked the president of our industrial parks largest corporation about the truth of claims that American industries were subjected to excessive governmental regulation. He responded: Well, it is not all that bad. When the Democrats are in office we can work it out with them, and when the Republicans are in office, no one comes around. Earl P. Bell Olympia Fields, Ill., April 25, 2007
— Earl Bell
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Also from Rena Steinzor

Rena Steinzor is a Professor of Law at the University of Maryland Francis King Carey School of Law, and a past president of the Center for Progressive Reform. She is the author of Why Not Jail? Industrial Catastrophes, Corporate Malfeasance, and Government Inaction.

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