Sunstein’s ‘Simpler Government’ Is Legally Suspect, Overly Secretive And Politically Unaccountable

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"Sunstein’s ‘Simpler Government’ Is Legally Suspect, Overly Secretive And Politically Unaccountable"

By Lisa Heinzerling

In his new book, “Simpler: The Future of Government,” Harvard law professor Cass Sunstein writes about his nearly four years as President Barack Obama’s “regulatory czar.” As the Administrator of the Office of Information and Regulatory Affairs (known as “OIRA”) within the Office of Management and Budget, Sunstein oversaw the regulatory output of the many agencies of the executive branch. Rules on worker health, environmental protection, food safety, health care, consumer protection, and more all passed through Sunstein’s inbox.

Some never left. A group of Department of Energy efficiency standards, for example, have languished at OIRA since 2011, as has an Occupational Safety and Health Administration rule to finally reduce exposure to the silica dust that sickens workers every year.

In his revealing book, Sunstein tells us why: It is because he, Sunstein, had the authority to “say no to members of the president’s Cabinet”; to deposit “highly touted rules, beloved by regulators, onto the shit list“; to ensure that some rules “never saw the light of day”; to impose cost-benefit analysis “wherever the law allowed”; and to “transform cost-benefit analysis from an analytical tool into a “rule of decision,” meaning that “[a]gencies could not go forward” if their rules flunked OIRA’s cost-benefit test.

Assertive intrusions into agencies’ prerogatives — prerogatives given by law to the agencies, not to OIRA — were necessary, Sunstein insists, because otherwise agency decisions might be based not on “facts and evidence,” but on “intuitions, anecdotes, dogmas, or the views of powerful interest groups.” In Sunstein’s account, OIRA’s interventions also ensured “a well-functioning system of public comment” and “compliance with procedural ideals that might not always be strictly compulsory but that might be loosely organized under the rubric of ‘good government’.” No theme more pervades Sunstein’s book than the idea that government transparency is essential to good regulatory outcomes and to good government itself.

The deep and sad irony is that few government processes are as opaque as the process of OIRA review, superintended for almost four years by Sunstein himself. Few people even know OIRA exists; in fact, the adjective that most often appears in descriptions of this small office is “obscure.” Even fewer people know that OIRA has effective veto power over major rules issued by executive-branch agencies and that the decision as to whether a rule is “major” — and thus must run OIRA’s gauntlet before being issued — rests solely in OIRA’s hands. Most people, I would venture to guess, think that the person who runs, say, the Environmental Protection Agency is actually the Administrator of the Environmental Protection Agency. But given OIRA’s power to veto rules, the reality is otherwise: In the rulemaking domain, the head of OIRA is effectively the head of the EPA.

This state of affairs poses several problems. Two have to do with law. One problem is that laws on workplace health, environmental protection, food safety and other protections give agencies — like OSHA, EPA, and the FDA — the authority to make rules. They do not give this authority to OIRA. No statute, in fact, gives OIRA the power to review agencies’ rules. This power today derives, instead, from a set of executive orders issued by Presidents Clinton and Obama. But it is a large question whether a law giving rulemaking authority to one part of government is properly construed as giving authority to another part of government, designated by the President. Most agree that a statute giving authority over food safety to the FDA does not allow the President to turn that power over to the Department of Agriculture. It is a little hard to see why that same statute can be interpreted to turn the power over to OIRA.

Another legal problem with the current process of OIRA review is that OIRA imports a cost-benefit framework into statutes that do not allow this framework. The Clean Air Act, for example, requires EPA to set national air quality standards for various air pollutants based only on the scientific evidence of the level at which such pollutants are harmful. The Supreme Court, in a unanimous 2001 ruling authored by Justice Scalia, held that the law does not permit EPA to take costs into account in setting these standards. But OIRA nevertheless requires cost-benefit analysis of these standards. And, in perhaps the most prominent assertion of control over agency prerogatives in this administration, President Obama directed then-EPA Administrator Lisa Jackson to withdraw a revised air quality standard for ozone, citing “the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover.” It is difficult to understand this decision, with its focus on regulatory burdens and economic circumstances, as anything other than a flouting of the Clean Air Act. Notably, while Sunstein describes President Obama’s decision as “unquestionably correct,” “made on the merits,” and “not motivated by politics,” he nowhere explains exactly why he thinks the decision was correct or consistent with the law.

Similar, but more subtle, intrusions by OIRA on the legal authority of agencies involve not disregarding clear statutory commands but pressing agencies to interpret ambiguous commands so as to allow cost-benefit analysis. In an important decision almost thirty years ago, the Supreme Court held that where an administrative agency is interpreting a statute that is ambiguous, the courts should defer to the agency’s interpretation as long as it is reasonable. This idea, known as the Chevron doctrine after the case that announced it, means that agencies often have a large range of discretion in interpreting the statutes under which they operate. Under Sunstein, OIRA has stepped into that range and pressed agencies to adopt cost-benefit analysis as their decision-making framework wherever the law does not unambiguously preclude it.

To understand the boldness of OIRA’s power grab, we need to consider a bit of history. In 1994, eyeing the first Republican takeover of the House of Representatives in forty years, Newt Gingrich proposed an aggressive series of legislative reforms, bundled together as the “Contract With America.” Among the most contentious of the proposals was the “supermandate”: a requirement that all rules protecting human health, safety, or the environment pass a cost-benefit test. Critics of what President Bill Clinton dubbed the “Contract On America” feared that applying a cost-benefit test to health, safety, and environmental rules would often spell their doom, as these rules produce benefits — in human health, in longer life, in cleaner air and water and land — that are hard to quantify and even harder to monetize. President Clinton vetoed bills to fund the government in part because they contained the supermandate, leading to the government shutdowns of 1995 and likely contributing to Clinton’s political renewal.

Thanks to Sunstein, though, the supermandate is back. By pressing agencies to adopt cost-benefit analysis as a decision-making framework wherever the law allows it, Sunstein’s OIRA has, by executive fiat rather than legislative enactment, imposed a cost-benefit supermandate wherever the law is ambiguous (which it often is). Newt Gingrich might be pleased, but those concerned with health, safety, and environmental protection should not be.

A third problem with OIRA is its unaccountability. In Sunstein’s rendering, OIRA gathers information from all corners of the executive branch: White House economic offices, the White House Chief of Staff, Cabinet heads, career staffers in OIRA and in other agencies, and many others all kibitz on rules under review at OIRA. But where everyone is responsible, no one is accountable. Indeed, in a recent article, Sunstein himself has insisted that — despite his book’s tall talk of “shit lists” and saying no — he really didn’t have much power at all. When a rule ends up on the “shit list,” then — after an agency has spent time and resources developing it, based on its best understanding of its legal obligations and the factual evidence before it — who is accountable? No one, it seems — because everyone is.

OIRA also undermines accountability by working in the dark. Although the Clinton-era executive order that outlines the OIRA review process sets out many requirements for transparency, President Obama’s OIRA follows almost none of them. Contrary to the executive order, OIRA does not explain to agencies, in writing, that items on their regulatory agenda do not fit with the President’s agenda; it does not keep a publicly available log explaining when and by whom disputes between OIRA and the agencies were elevated; it does not ensure that agencies clearly explain any changes made to a regulatory package at OIRA’s behest; and it does not (with the one exception of the ozone standard) return rules to agencies with a written explanation about why they have not passed OIRA review. On the latter point, agency heads might fairly wonder whether any of the items on Sunstein’s “shit list” include any of their own rules; the contents of the list appear, like so many things about OIRA, to be a secret.

If this is the future of government — legally suspect, politically unaccountable, preternaturally secretive — I’d like to think we can do better.

Lisa Heinzerling is a Professor of Law at Georgetown University Law Center and member scholar and founding board member, Center for Progressive Reform. The author was Senior Climate Policy Counsel to EPA Administrator Lisa P. Jackson from January to July 2009, and Associate Administrator of the EPA Office of Policy from July 2009 to December 2010. This piece was posted with permission.

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18 Responses to Sunstein’s ‘Simpler Government’ Is Legally Suspect, Overly Secretive And Politically Unaccountable

  1. john atcheson says:

    I worked for EPA and wrote many regulations, and did battle with OIRA on many occasions. The idea that cost-benefit analysis gives an objective result, and takes decisions out of the realm of intuition is ludicrous. By selecting discount rates that were too high and valuing secondary benefits or any benefits that could not be strictly quantified as zero, they introduced an extreme bias that was normative and negative.

    Essentially, future benefits were ignored, and present benefits severely understated.

    The effect was to favor cash over natural capital, profits over health and environmental concerns, and the existing technologies over new ones.

    OIRA regularly costs this country hundreds of billions, while stifling innovation, increasing human mortality and adverse health effects, and destroying the environment.

    But other than that, it does an excellent job.

    • addicted says:

      @John – You nailed it. In an ideal world, cost/benefit analysis would be the single tool you would need to determine any decision.

      In the real world, it isn’t even close to that simple. Your analysis includes all sorts of assumptions about discounting rates, probabilities of risk, and unaccounted for factors (in Rumsfeldian, Unknown Unknowns).

      That Cass Sunstein thinks that Cost-Benefit analysis is some sort of purely objective process, when in reality it is nothing but adding a constant framework around all your assumptions, is a scary thought.

    • Michael Berndtson says:

      A cost benefit analysis on the one hand is an excellent decision making tool. On the other, is an excellent indecision making tool. It all comes down to the assumptions, inputs and as you said discount rates (outputs). Most importantly, is who’s leading the effort and for what purpose, i.e. is the tool being used by tools? Obama is hard to figure out, but Sunstein seems to be simply awful.

      • Zach Shahan says:

        Completely agree with you, Michael. Obama is hard to figure out. (Personally, I think he is simply torn between a variety of incompatible ideals, often going with the wrong one, or appointing people based on the wrong one.) As far as Sunstein, I prefer not to “call names,” but I’d consider him an educated moron.

      • Mulga Mumblebrain says:

        Well it’s GIGO, all right, and Sustein seems a pretty typical GIGOLO. The arrogant presumption of superior intellect is a common feature of the type.

    • Zach Shahan says:

      You nail it, John. Theoretically, cost-benefit analysis sounds great. But anyone who gets past Public Policy 101 should know that it has severe flaws (in the real world) that make it a less than ideal (even horrible) tool for many situations/topics.

      All in all, Sunstein in OIRA was probably tied for my biggest problem with Obama’s administration to date.

      • john atcheson says:

        Zach:

        Thanks. My biggest problem with the Obama administration is Obama. He talks from the left and governs form the right.

    • Mulga Mumblebrain says:

      I admire its nature as an unelected Office of the Inquisition, applying infallible neo-liberal theology through the doctrinal device of the contemptible ‘cost-benefit’ scam, so beloved of all Rightwingers and pathocrats. And they had their very own Inquisitor-General who knew better, apparently, than all the mere bureaucrats at all the Agencies whose mere legal and professional obligation it was to assess these problems, using their, apparently redundant, ‘expertise’. The presumption, the gigantic egotism is simply prodigious. Rule by tiny cabal, but open and unapologetic. It must be time, I’d say, to, yet again, lecture the Chinese on the blissful superiority of ‘liberal democracy’.

  2. Chris Winter says:

    In his 2004 book Strategic Ignorance, Carl Pope has a good deal to say about OIRA and its first administrator, John Graham. He discusses it on pp 63-68 of the book, and profiles Graham on pp 51-52.

    Cost-benefit analysis of environmental regulations is often based on the monetary value estimated for a human life. Pope reports that $6 million was a typical value, but the OIRA chose a value of $3.7 million.

    • Zach Shahan says:

      That’s sad. It seems that as it has been used to date (in the realms of health and environment), OIRA is simply a final block to a better world, a very sketchy one that has no place in our government.

    • Mulga Mumblebrain says:

      The monetary value accorded a human life always depends on where a person was born, into what society, what class, what future earnings etc. Inherently, inescapably, impertinently racist and prejudiced, but that is the Right, who have turned their pathopsychological hatred of and contempt for others into religions, doctrines and ideologies. A world run by these anti-human beings must, will and is destroying itself.

  3. Zach Shahan says:

    My last comment (sorry, but this topic really gets me worked up, as I see Sunstein’s OIRA as one of Obama’s top 2 or 3 failures as president):

    The Guardian did a piece on Sunstein’s OIRA back in 2011 that included even more facts you probably don’t even want to read:

    “Now, a new report [pdf] from the Centre for Progressive Reform has dug up some key data revealing that the White House in the age of Obama has been just as receptive to the pleadings of industry lobbyists as it was in the Bush era. And it goes far beyond ozone.

    Under Obama, a little known corner of the White House – known as the White House Office of Information and Regulatory Affairs, or Oira – has changed more than 80% of the rules proposed by the Environmental Protection Agency.

    “None of these were changes for the good, the report says.

    ‘Every single study of its performance, including this one, shows that Oira serves as a one-way ratchet, eroding the protections that agency specialists have decided are necessary under detailed statutory mandates, following years — even decades — of work.’

    ‘A steady stream of industry lobbyists — appearing some 3,760 times over the ten-year period we studied — uses OIRA as a court of last resort when they fail to convince experts at agencies like the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), and the Occupational Safety and Health Administration (OSHA) to weaken pending regulations.’

    “The lobbyists were particularly obsessed with trying to undo environmental protections. Corporate executives and indusry lobbyists turned up at the White House about once a week over the last decade to try to delay or weaken EPA regulations, or more than 440 meetings.

    “The steady stream of oil and coal industry lobbyists to Oira did not end when Bush left office – arguably it turned into a flood. Environmental regulations made up only 10% of Oira business in Bush’s time, but 36% of the office’s business was meeting with outside lobbyists.

    “Under Obama, Oira has dedicated more than half of its meetings, 51%, to discussing pending environmental regulations with industry lobbyists, the report says.

    “And for industry the meetings paid off – about as much under Obama as under Bush. Following those meetings with outsiders, Oira changed 84% of EPA rules during the Bush era. Depending on how you calculate it, the change rate was even higher under Obama. Oira changed 81% of environmental rules after meetings with lobbyists. But the change rate rises to 85% once all Oira decisions on environmental regulations are factored in.”

    a little more commentary, quotes, and history here: http://www.guardian.co.uk/environment/blog/2011/nov/28/report-obama-broken-environmental-promises

    • Mulga Mumblebrain says:

      There you go Hope Fiends. The great Obama and the tiny cabal who pull his strings are worse, far worse, for the environment than even Dick Cheney and his marionette! Let’s see where Mr Sunstein goes for his reward, his post ‘Government service’ employment.

      • addicted says:

        Umm…that is BS.

        The only reason why the OIRA spent more time on energy meetings with industry lobbyists than the Bush administration is because in the Bush administration climate/environment based policies would never even make it as far as the OIRA. They had the EPA itself to gut any environment protection policies. They didn’t need the OIRA.

        Obama’s administration is far from being a progressive, or even left of center one, but to even suggest that he is any close to Bush is nonsense liberals like to say to make themselves feel superior. (It’s not us…It’s the system, man)

      • Joe Romm says:

        That’s just silly, Mulga.

        • Mulga Mumblebrain says:

          O.K. On with the dunce’s hat, and it’s me on the naughty chair in the corner. And write out, one hundred times, ‘I must not be silly’.

  4. Peter Anderson says:

    Great piece.

    Hope you have occasion in the future to a detailed analysis of Sustein’s reign of error and corporate control.

  5. Joan Savage says:

    The OIRA arbitrary power alarms me as much or more than tricky cost-benefits analysis and lack of transparency.

    –had the authority to “say no to members of the president’s Cabinet”;
    to deposit “highly touted rules, beloved by regulators, onto the shit list“;
    to ensure that some rules “never saw the light of day”–

    White House choosy-ness about which laws to enforce may have escaped notice because the EPA has been severely underfunded for years. It was hard to tell at times if a law on the books still had any teeth in it.

    As one long-time EPA employee summed it up: the EPA may not have enough resources to fulfill its mandates.