Cass Sunstein Hits the Senate and Climate Change Hits the Media Fan

by Rena Steinzor

May 13, 2009

Cass Sunstein had his confirmation hearing Tuesday; it was well-attended and anti-climactic. President Obama’s nominee to head the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) testified for about an hour, and Senate approval of the nomination seems assured.

Ironically, in a perfect example of timing being everything, at about the same hour that Sunstein took his seat in front of the Senate Committee on Homeland Security and Government Affairs, a story hit the media fan in Washington showing that for the past several months, it has been business-as-usual between OMB and EPA with respect to climate change, with the economists of the first subjecting the scientists of the second to a gauntlet of skeptical questions about whether responding to this urgent problem will cost too much. Had the story broken 24 hours earlier, Sunstein would have had his hands full at the hearing answering skeptical questions from the senators and the press, especially because he has been sitting at OIRA for months, presumably giving his future staff plenty of behind-the-scenes guidance on how to run the show.

Readers of this blog may remember that when the Sunstein nomination was announced, John Graham—the “Darth Vader of Deregulation” who had Sunstein’s position under George W. Bush—was quoted as saying that Sunstein would team up with Lawrence Summers, chief Obama economics adviser, to offset green appointees like Energy Secretary Steven Chu and White House Science Adviser John Holdren on climate change. Sunstein himself has written that we might be better off simply sending money to the developing world so it could adjust to climate change, rather than reducing our own greenhouse gas emissions. And, perhaps because of these earlier writings, he has won the unanimous support of industry groups. So the area is a little sensitive for the nominee.

Because this is the Obama Administration and not Bush II, everyone from press secretary Robert Gibbs to EPA Administrator Lisa Jackson rushed to the scene of the breaking story with a fire extinguisher, assuring a bunch of confused reporters that the President was not backing off on his pledge to take action on climate change very soon. But, wrote Ian Talley of Dow Jones Newswires, the material “is likely to give critics of greenhouse-gas regulation ammunition in their political salvos against the administration.”  Indeed, the prophecy was self-fulfilling, as Talley’s story was quickly reprinted on a number of anti-do-something-about-global-warming blogs, including Climate Realists, Downstream Today ("Your Refining, Petrochem, Pipeline and LNG Destination") , and the blog of climate change doubter-in-chief, James Inhofe.

What actually happened? Well, truthfully, this was a slow-motion story that took about three weeks to break, and we’ll probably never know who burrowed deep into the electronic “docket”—EPA-HQ-OAR-2009-0171-0124—set up by the Environmental Protection Agency (EPA) to discover the smoking gun: a document first posted on the web back on April 24, 2009.

The docket concerns EPA’s proposed decision to find that greenhouse cases are in fact a “pollutant” under the Clean Air Act—the first time ever that the U.S. government has acknowledged as much. When EPA announced the proposed decision, it began to assemble a web-based file cabinet of its own documents, as well as all the “correspondence” it received from other parties, a list that eventually totaled 739 individual items. Number 124, labeled by EPA staff as “First (1st) Round of Office of Management and Budget (OMB) Comments to USEPA on the Proposed Findings” is an undated, unsigned but absolutely scathing assembly of harsh attacks on everything from EPA’s science, to its legal judgments, to the supposedly ruinous economics of climate change—it was this piece of correspondence that Mr. Talley and others focused on. An OMB spokesman later told reporters that the document merely summarized what other agencies in the government had to say about the EPA rule—why OMB offered them the cover of conveying their views anonymously, without assuming any accountability for their unsubstantiated attacks, is unclear.

The coverage of the story focused on the intra-administration dialogue—not by accident, since that's how it was spun by the opponents of climate-change action.  But there's something of considerably greater concern here:  the extent to which OMB was involving itself in matters squarely within EPA's area of scientific expertise.  Number 124 is not the only piece of correspondence between OMB and EPA staff—documents 123-135 and 139-146 reveal that EPA has spent many, many hours responding to OMB questions, comments, and complaints and that the economists are up to their proverbial necks in the micromanagement of the agency’s recommendations. Many of these exchanges have a decidedly friendly tone, indicating that the two staffs are playing well together, although I cannot help but worry that the EPA folks could be suffering from Stockholm syndrome.

What’s so troubling about all this is that the Clean Air Act says nothing about OMB’s role in environmental rulemaking. Instead, it anticipates that the EPA Administrator will implement its instructions, including making a finding whether greenhouse gases are in fact a “pollutant” that endanger public health and the environment.

At his hearing, Profession Sunstein told the senators—not once, but several times—that the most important mandate for his new position was to follow the statutes, even going so far as to acknowledge that some very important provisions do not permit the economists to compel that decisions be based on cost-benefit analysis. So, for example, he said that the National Ambient Air Quality Standards under the Clean Air Act should be set without regard to costs. This provision of the law is the reason why we have cleaned up so much air pollution and why, unlike many of the world’s big cities (think Beijing before the Olympics and Mexico City even before swine flu), Americans don’t need to wear surgical masks in the street. The Bush II OMB ignored this fact, demanding cost-benefit analyses regardless, and even went so far as to roll back EPA’s recommendation to tighten controls on ozone. Sunstein’s pledge was heartening to say the very least, and revealed his sophisticated understanding of the complex role he must play as the head of an office of economists, for whom cost-benefit analysis is the focus of their existence.

But as the climate change dust-up shows, to make good on his promise, Sunstein will have to take much more definitive action than recognizing the power of the rule of law. He’ll need to pull his economists off the EPA staff’s backs, teaching them to show appropriate deference for the experts Congress instructed to take the lead on air pollution.

It's not accurate to say the Clean Air Act says nothing about OMB involvement. Section 307(d)(4)(B)(ii) clearly contemplates OMB review of proposed rules. Plus, I'm curious: why was Sunstein's pledge to "follow the law" so meaningful? No one in their right mind denies that NAAQSs must or even "can" be set according to cost/benefit analysis. (Although, I will also note that EPA's been doing regulatory reviews in NAAQS proceedings that include cost counting under Executive Order for many years.) But Suntein's an administrative law professor . . . so he (and his casebook proves this) obviously knows how few agencies have their choice factors set in stone for them by their enabling statutes. In the absence of prohibitory language (see, e.g., Entergy), agencies will either naturally or at OMB's prompting gravitate toward cost-benefit analysis. (?)
— Jamison Colburn
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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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