May 08, 2012

The Pander Games: Big Ag, Hispanic Workers, and the Rush to Deregulate

Electoral politics or public policy? Policy or politics? One ripe example of how the White House rides herd on health and safety agencies, thinking about politics, not policy to determine what they should do, is provided by the latest poster child for curbing allegedly “excessive rules”: a U.S. Department of Agriculture proposal to take federal inspectors off the lines at poultry processing plants and substitute inspections by workers who would simultaneously cope with a speed-up on the line from 90 to 175 birds/minute.

According to White House regulatory czar Cass Sunstein, regulatory decisions made in the name of the President are based on an objective consideration of the merits of health and safety rules, and he has the paperwork to prove it. Executive Order 12,866, Executive Order 13563, Circular A-4, and a wad of memoranda intone just what kinds of detailed analyses agencies are expected to perform before their regulatory proposals cross his desk. Some examples from EO 12,866:

  • Each agency shall assess both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.
  • Each agency shall base its decisions on the best reasonably obtainable scientific, technical, economic, and other information concerning the need for, and consequences of, the intended regulation.
  • Coordinated review of agency rulemaking [by the White House] is necessary to ensure that … decisions made by one agency do not conflict with the policies or actions taken or planned by another agency.

Sunstein and his staff of economists at the Office of Information and Regulatory Affairs (OIRA) apply the spirit and every letter of every one of these demanding requirements to affirmative rules that would provide badly needed protections of public health, worker and consumer safety, and the environment, especially those put forth by the Environmental Protection Agency (EPA). The multi-hundred page Regulatory Impact Analyses (RIAs) that EPA must prepare provide ample cover for OIRA’s decisions to kill some, delay others, and weaken the rest. Historically, OIRA’s main function has been to placate business by suppressing costly rules. This role is the reason why the Wall Street Journal exulted when Mr. Sunstein was appointed. Yet Mr. Sunstein and his supporters insist that OIRA review is not about politics, but rather has as its ultimate objective highly rational consideration of often misguided agency decisions by the best and the brightest the White House has to offer. David Brooks loyally presented this vision in a column entitled “The Wonky Liberal”:

Many of the major agency jobs are held by people who come out of the activist community who are not sensitive to the costs they are imposing on the economy. President Obama has a political and philosophical incentive to restrain their enthusiasm. He has, therefore, supported a strong review agency in the White House that does rigorous cost-benefit analyses to review proposed regulations and minimize their economic harm.  This office, under Sunstein, is incredibly wonky. It is composed of career number-crunchers of no known ideological bent who try to measure the trade-offs inherent in regulatory action.

If only it were so.

Consider the latest poster child for the Sunstein-led effort to eliminate “costly, duplicative, and excessive” rules. Ostensibly an effort to “modernize” food safety, the proposal from USDA would turn responsibility for inspecting slaughtered chicken and turkey carcasses for feces, feathers, and guts over to the low-paid, long suffering workers who already struggle to keep up with the breakneck pace set by the processing line’s rapidly moving machinery. Forwarded to OIRA from USDA on December 7 of last year, the proposal was processed with lightning speed, emerging on January 20 to a premature Sunstein victory lap and hearty applause from the poultry processors it was intended to benefit, especially the multi-billion dollar companies like Perdue, Tyson’s, and Pilgrim’s Pride that dominate this highly concentrated industry.

The proposal would not require the workers to be trained, nor would it substitute any new testing for bacteria like salmonella and campylobacter.  It would save the companies an estimated $259 million annually because, once the federal inspectors depart, they will be able to run processing lines even faster, up to a total of 175 birds per minute (and, yes, that specific number is specified right in the rule). (To see what the plants are already like before the speed up, just visit YouTube.)

OIRA acknowledges that the “anticipated costs and benefits” of the rule are “not publicly available at this time.” This omission did not stop it from signing off on some very chipper USDA estimates of how much the proposal would help a favored industry. Companies would only have to hire a minimal number of additional employees earning $13.95/hour, it gloated, or a salary, including benefits and “related costs,” of $27,900/year. The proposal will therefore result in a “cost reduction of about 3 cents per bird and a reduction of the price of poultry of about 0.6 to 1 cent per bird.” And, in case you were wondering, U.S. companies slaughter an astounding nine billion birds annually for consumption here and abroad.

As for the requirement that agencies consider “other feasible alternatives” to the regulatory approach they have selected, USDA focused primarily on two extremes: (1) taking no action or (2) supplementing the number of federal inspectors on the line so that the companies could still increase line speeds but would not be left to inspect their own carcasses. So anxious was this reluctant regulator to placate the processors that it did not consider requiring new, more sophisticated tests for the campylobacter and salmonella that threaten food safety, nor did it contemplate actually requiring that workers be trained to take over the federal inspectors’ jobs.

The workplace hazards posed by excessive line speeds are well-documented by the Government Accountability Office and occupational health experts. In fact, USDA staff undoubtedly could have informed OIRA’s “wonks,” had they thought to ask, that diminished workplace safety was likely to be among the strongest arguments against the proposed rule.  We may never know what, if anything, the OIRA and USDA people said to each other about this obvious vulnerability of the proposal.

By its own account (and per EO 12,866), OIRA is supposed to run the interagency review on rules. At a hearing of the House Judiciary Subcommittee on Commercial and Administrative Law in July 2010, Cass Sunstein testified that OIRA had coordinated more than 900 interagency reviews since January 20, 2009. Sunstein testified: “[T]he positions of one agency are usefully informed by the views of other agencies with relevant experience and expertise. … Both Congress and the President have imposed important analytic requirements, including careful attention to both costs and benefits (with consideration of factors that cannot be quantified). OIRA oversees a process of interagency review that promotes compliance with these requirements, so that agencies ‘look before they leap.’”

In this case, it looks like the leaping happened before the looking. What is apparent—painfully so, in fact—is that OIRA willfully ignored perhaps its most important function in running centralized regulatory review: it appears not to have conducted any interagency review and even neglected to give notice to the Occupational Safety and Health Administration (OSHA) regarding the existence of the proposal, despite the huge worker safety implications of the rule.

Haste does make waste, in policy and also in politics. This latest headlong rush to deregulate is beginning to look like a political boomerang headed straight for the White House. You see, it turns out that an estimated 40 percent of those beleaguered, underpaid, and overlooked poultry plant workers are Latinos, a constituency that the President badly needs to vote for him on Election Day. In the final analysis, Sunstein and his wonks might want to ask themselves, is it more likely that (1) large poultry processors will contribute to the President’s reelection; (2) independent voters will be cheered by the perception that profits are competing with food safety; or (3) Hispanic voters will stay home? Had their review ever been about objective, rational, and science-based public policy, as opposed to their own distorted brand of dangerously myopic politics, the President might not have to contemplate these three unpleasant alternatives.

Rena Steinzor, Professor of Law, University of Maryland Carey School of Law. Bio.

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