OSHA’s proposed new silica standards promise to improve the health and safety of more than two million workers across the U.S. By reducing exposures to respirable silica dust, the standards are expected to save 700 workers’ lives and prevent 1,600 new cases of silicosis every year. Of course, these impressive benefits come at a cost to employers and those costs will be a major talking point for the business community as OSHA’s proposal moves through the rulemaking process. One argument that we’re sure to hear from the Chamber of Commerce and its allies is that the costs of complying with the new standards will fall disproportionately on small businesses. The plight of small business owners somehow always seems to pull at the heartstrings of the big businesses owners when federal agencies propose new public health and environmental protections – in stark contrast to the rest of the time the big business owners spend trying to knock their competitors out. OSHA’s proposed silica standards include some surprising numbers regarding the costs of compliance.
As indicated by the 20th anniversary of Executive Order 12866, which guides the workings of the Office of Information and Regulatory Affairs (OIRA) at OMB, OIRA has become a fixture of the regulatory landscape. OIRA review of proposed rules is problematic, as other blogs in this series have indicated. In the Obama administration, however, this is an additional problem. Other offices in the White House, besides OIRA, are more deeply involved in making regulatory decisions than in any other previous administration. This deeper involvement has made it more likely that regulatory decisions will reflect political considerations rather than policy considerations. When this happens, OIRA’s regulatory review under E.O. 12866 can become a fig leaf covering up for the political decisions that are being made.
There is an old saying that in government “where you stand depends on where you sit.” That is, your view of the world is formed by the institutional arrangements in which you work. White House officials are sensitive to public policy arguments based on expertise, but they also more concerned than their agency counterparts with the political ramifications of such decisions. The White House may seek to control a regulatory outcome to obtain good public policy, but it may also seek to do so to curry favor with political donors or to forestall potential political attacks on the President. Since agency administrators are not running for office, they and their staffs do not share these political concerns (except indirectly in response to pressure from the White House or Congress.)
The origins of Executive Order 12866 go all the way back to the Nixon and Ford Administrations.
Soon after the enactment of the Occupational Safety and Health Act and the Clean Air and Water Acts, affected industries began to complain bitterly about the burdens the new wave of public interest statutes imposed on them.
The business community was also chaffing under the National Environmental Policy Act’s requirement that federal agencies prepare environmental impact statements (EISs) for major federal actions that significantly affect the quality of the human environment. Although the EIS requirement only applied to federal agencies, it was applicable when a company needed a permit to build a nuclear power plant, drill on federal lands, and many other business related activities.
The business community observed the potential for EIS requirements to bog down agencies in a great deal of paperwork prior to taking action and decided that what was sauce for the goose was sauce for the gander. They posited: why not make regulatory agencies prepare lengthy statements detailing the effects of major regulatory actions not only on the environment, but on the regulated industries themselves?
Responding to calls for economic impact statements, the business-friendly Office of Management and Budget (OMB) persuaded President Nixon to require the newly created Environmental Protection Agency and Occupational Safety and Health Administration to send their proposed regulations through an interagency "Qualify of Life" review. The agencies were required to prepare a summary of the costs of each proposed regulation and its alternatives to accompany it through the review process.
Executive Order 12866 may be twenty years old, but formal, centralized review of agency rulemaking by the Office of Information and Regulatory Affairs (OIRA) is more than thirty years old, having been instituted by President Ronald Reagan in Executive Order 12291 in 1981. Since then, this centralized review has been carried out without significant change over five presidential administrations and has had bi-partisan support in both the House and Senate. Progressives have been less enamored with this review, seeing in it a deliberate bias against regulation by reason of its additional roadblocks to and delays in adopting regulations. This bias was clearly intentional in the origin of the centralized review by President Reagan, who famously said, “government is not the solution to our problem; government is the problem.” However, even when Democrats became President the bias remained. President Clinton’s E.O. 12866 begins with a statement of regulatory philosophy that agencies should adopt “only such regulations as are required by law . . . or are made necessary by compelling public need,” not regulations that simply further the public interest or increase the net welfare to society. President Obama not only retained E.O. 12866 but also, in his E.O. 13563 explicitly reaffirmed its principles.
Of course, there is nothing inherent in the concept of centralized oversight of agency regulation that requires a bias against regulation. After all, OIRA Administrator John Graham in the George W. Bush administration instituted “prompt letters,” which proactively requested agencies to take certain actions, including adopting new or strengthening older regulations. However, Although the “prompt letters” initiated by OIRA administrator John Graham in the George W. Bush administration demonstrate the ability of centralized review to spur regulation and to push for further regulation, the fact that there were only seven such letters in eight years probably reflects the exception that proves the rule.
As we noted on the day of the announcement, OSHA has – at long last – released a proposal to better protect workers from respirable silica. We didn’t have much to say about the substance at the time because we simply hadn’t had the opportunity to read through the massive proposal. (It’s over 750 pages, with almost 1600 additional pages in the risk assessment and economic analysis documents – OSHA clearly doesn’t take their regulatory responsibilities lightly.) Having had a chance to get a bit more familiar with the proposal, here are some initial thoughts:Full text
Late last month, the Department of Energy proposed long overdue energy efficiency standards for commercial refrigeration units. The rules, which had been held up at OMB’s Office of Information and Regulatory Affairs (OIRA) for almost two years will result in savings of over $28 billion for businesses over the next 30 years and reductions in carbon emissions of 350 million tons over the same period. As we’ve discussed numerous times, rules are required by executive order to be reviewed by OIRA for no longer than 120 days. And OIRA routinely hangs onto them for months and frequently years. Recently, a rule to green federal office building just hit the two-year mark at OIRA.
So what’s happened in the past two years to slow down the progress of these two rules along with the other energy efficiency standards stuck at OIRA? After all, back in 2009, former Energy Secretary Steven Chu described energy efficiency standards as not just low hanging fruit, but “fruit lying on the ground.”
Savings for industry and consumers as well as reducing the burden of greenhouse gases on the environment seems like a no-brainer to anyone with common sense. But then, there are always House Republicans. Just this past summer, Rep. Marsha Blackburn (R-TN) waged a war against ceiling fans. That’s right, she tacked on an amendment to the Energy and Water spending bill to stop a DOE rulemaking process to review ceiling fan standards mandated by Congress itself. Feverish and kneejerk anti-regulatory efforts like these have unfortunately taken off in recent years in spite of past bipartisan support for energy efficiency and in many cases, industry enthusiasm for moving forward.Full text
We’ve often written in this space about the Obama Administration’s very bad idea to take federal inspectors of the line at poultry processing plants, leaving the discovery of blood, guts, and feathers on the carcasses to overworked and underpaid line workers forced to process as many as 70 birds per minute at the average plant. The U.S. Department of Agriculture (USDA) is the architect of this proposal to “modernize” the food safety system without requiring a single additional test to make sure the birds are not infested with salmonella, campylobacter, and other bad bugs. Confirming the rule’s primary role as a windfall for the poultry industry, USDA’s initial cost-benefit analysis indicated that it would save companies like Holly Farm, Tyson’s, and Perdue $250 million annually. That windfall is attributable to the fact that under the proposal, the line speed will at least double, to as many as 175 birds per minute.
Today, GAO released a report that further discredits this bad idea, confirming the dire warnings of food safety experts: USDA is relying on junk data from a pilot program, raising the strong possibility that any final rule won’t survive judicial review. This rule is so controversial that it will almost certainly be challenged in court. When it is, it will be reviewed under the Administrative Procedure Act’s arbitrary and capricious standard, and USDA is running the risk that a judge will find the agency’s shoddy analysis fails to meet the standards of quality demanded by the Administrative Procedure Act (APA).
No week seems to go by without an imbalanced attack on regulatory protections by a trade association, a “think-tank,” a member of Congress, or a journalist. These attacks frequently feature a reference to the growth in the Code of Federal Regulations, even though it is a meaningless measure of whether we’re overregulated. In offering another bill to diminish regulation, Sen. Angus King, for example wrote last week that, “According to a recent study by the Progressive Policy Institute, the number of pages of federal regulations has increased by 138 percent since 1975, from 71,224 pages to 163,301 in 2011.”
That might sound like a lot of pages, but if you’re not using methylene chloride, polyvinyl chloride or hexavalent chromium, the hundreds of pages devoted to regulating those chemicals have no effect on you or your business. The same goes for IRS transfer pricing regulations, the Department of Agriculture’s beef slaughtering regulations, or OSHA’s crane safety regulations. No one in a small retail business, the tourism industry, or Maine’s lobster industry cares about or need worry about any of them.
Like most of his colleagues, Sen. King denounces “excessive and unnecessary regulations” without identifying examples. If he has a legitimate example, he should let the secretary of the appropriate agency know about it, or work to repeal it legislatively.
Instead, he and his colleague, Sen. Roy Blunt, propose the creation of a 9 member commission that would identify regulations “in need of streamlining or repeal.” The commission would report their recommendations to Congress in the form of a bill that would be “fast-tracked” (protected from many of the normal motions and procedures) and that could not be amended. This proposal is flawed in a number of ways.
First, the proposal does not specify who the commission would enlist to do the necessary cost-benefit analyses, paperwork analyses, etc. The bill provides no authorization of funding and gives no clue as to how many staff would be employed, what their expertise would be, how they would be paid, or what resources would be given to them. It is not clear that they would even be federal employees. Would the staff be supplied by the regulated industries or the Chamber of Commerce?Full text
After more than two years of White House review, OSHA has finally published its proposed new standards for silica exposure. Secretary of Labor Tom Perez, Assistant Secretary David Michaels, and many other people both inside and outside the agency deserve congratulations for finally shaking the proposal loose from the clutches of the president’s regulatory review team in OMB’s Office of Information and Regulatory Affairs. The publication of the proposal is an important step towards protecting millions of Americans who are exposed to the deadly dust in their workplaces.
But this is no time for the agency to rest on its laurels. As GAO noted in a recent report, OSHA proposals published in the 2000s took an average of three years to reach the “final rule” stage. If it takes that long to publish the final silica rule, it will be in jeopardy of falling prey to election-year politics. The Obama administration’s regulatory agencies published fewer final rules in 2012 than the agencies published in any of the prior 15 years. (Thanks to Curtis Copeland for this analysis.) It is incumbent upon Secretary Perez, Assistant Secretary Michaels, and their entire team to keep this rule moving along expeditiously. That means no extensions of the comment periods, efficient management of the rulemaking hearings, and a hardline stance against the White House’s regulatory review team, which has a history of holding up this rule.
Today marks an important step forward for workers, but the finish line is a long way off.Full text
Like no other mammoth corporation that did very bad things—not Enron, not WorldCom, not Exxon, and not even HSBC (which, after all, laundered money for the Mexican drug cartel and was allowed to pay a fine without pleading guilty!)—BP has not lost its arrogant swagger. In a fit of high dudgeon it filed a lawsuit last week challenging the one step the federal government has taken that could actually hurt the company over the long run: the long-overdue debarment of this chronic scofflaw from receiving contracts to supply fuel to the U.S. military.
Despite the semi-hysterical, every-argument-known-to-humans tone of its 127-page legal filing, Bob Dudley, BP’s chief executive officer, has been blithe about the effect of the debarment on its bottom line: “We have largest acreage position in Gulf of Mexico, more than 700 blocks…that’s plenty, we have a lot (sic),” he told the Telegraph, a British newspaper, a few weeks ago. “We have been debarred from supplying fuel to the U.S. military going forward but quite frankly we have a very big business in the U.S. and this is not distracting us from what we do.”
The Clean Water Act authorizes the Environmental Protection Agency (EPA) to debar companies that are not “responsible” from doing business with the government. Other provisions of federal law give the Pentagon the same authority but it could not be bothered to find a different fuel supplier even after the Deepwater Horizon explosion killed 11 and devastated the Gulf of Mexico. Showing itself once again to be one of the last feisty entities left in government, and after contemplating just such an action since 2005, EPA debarred BP in November 2012, just a few short months before the company pled guilty to manslaughter, a slew of environmental crimes, and—just for good measure--lying to Congress. It paid a $4 billion fine—the largest in history but Dudley is apparently still smiling.
The term “scofflaw” should not, of course, be used lightly. For those who need a little boning up on BP’s recidivist history, consider the following and let’s ask ourselves whether we might have avoided the entire Deepwater Horizon horror had EPA been allowed to debar the company back in 2005.Full text