Back to the Future: OMB Intervention in Coal Ash Rule Replicates the Bush Administration's Way of Doing Business

by Sidney Shapiro

January 11, 2010

As reported in a post Saturday, OMB has become the epicenter for industry efforts to head off an EPA regulation concerning coal ash. There have been 17 meetings between industry interests and OMB officials. When questioned about the large number of meetings, an OMB spokesman said, "This has been a very regular, very normal deliberative process on a very complex rule.” For progressives who had hoped that OMB in the Obama administration would not replicate OMB in the Bush administration, this is disappointing news.

Industry swarmed to OMB after EPA had submitted a draft rule on coal ash to OMB for its approval. Under a presidential order, agencies like EPA must submit significant new regulations, like the coal-ash rule, to the White House for review prior to the time that they are officially proposed. Unhappy that their efforts to persuade EPA to propose a different rule had not worked, industry groups went to the White House to get the draft rule rewritten. The industry tactic is time-honored. In Republican administrations, OMB opened its door to industry interests, and it regularly intervened to force agencies to weaken regulatory proposals. Public interest groups have been watching OMB in the Obama administration to see if this practice might change.

James Goodwin, a CPR analyst, was one of the first to draw attention to OMB’s multiple meetings concerning the coal ash rule. Goodwin also found that OMB was regularly meeting with industry groups on other issues, but seldom meeting with public interest groups. CPR’s president, Rena Steinzor, has written OMB objecting to this unbalanced approach.

Under the rulemaking process established by the Administrative Procedure Act (APA), EPA must propose a regulation, allow public comment, and then adopt a final rule, justifying the rule in light of the comments it has received. It is common for EPA to be lobbied during the period it is working on a proposed rule, and this undoubtedly happened concerning the coal ash proposal. Having heard the industry objections, EPA drafted a rule, and then OMB provided a second bite at the apple. Indeed, in light of the large number of meetings, it appears that OMB was rewriting the proposed rule for EPA, using industry lobbyists as its resource.

It is not apparent that a few officials in the White House are in a better position to decide what rule to propose than EPA’s administrator, who was relying on EPA’s policy, legal and scientific experts to weigh the arguments of industry lobbyists. By comparison, when OMB meets primarily with industry groups (17 meetings, compared to four meetings with public interest groups), it is overwhelmed with an industry point of view. This is a recipe for weakening regulatory proposals.

This is the first instance we know about where OMB has apparently intervened to weaken an agency regulation, something that regularly occurred in the Bush years. Further, since we do not know the details of what happened, it is possible that OMB’s involvement will improve the regulation. Perhaps the White House was able to point out policy or scientific considerations that the EPA did not adequately consider. But, based on the public record, it appears so far that we’re back to the old ways, with OMB requiring EPA to weaken its regulatory proposal at the behest of politically powerful industry groups, with little participation by environmental interests.

While it is legitimate for the White House to have views about pending regulations, it should refrain from a lopsided intervention that skews the regulatory process against strong and effective regulations before they can even be proposed.

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Sidney A. Shapiro holds the Fletcher Chair in Administrative Law at the Wake Forest University School of Law and is the Associate Dean for Research and Development. He is a member of the board of directors of the Center for Progressive Reform.

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