Our guest blogger is Frank O’Donnell, president of Clean Air Watch.

Cass Sunstein

How would progressives respond if President Bush nominated as “regulatory czar” a person who:

– Once called for changing the Clean Air Act to require a balancing of costs and benefits in setting national clean air standards – a fundamental weakening long sought by big polluters who believe it would help them resist cleanup;

– Urged the federal government to devalue senior citizens in calculating the benefits of federal regulations because “A program that saves young people produces more welfare than one that saves old people.” This is a concept dubbed the “senior death discount,” and that environmentalists forced EPA Administrator Christie Todd Whitman to renounce in 2003;

– Argued that it “might be better” to help future generations deal with global warming by “including approaches that make posterity richer and better able to adapt” than by “reducing emissions.”

– Even raised questions about the value of cleaning up Love Canal, reducing arsenic in drinking water and using child restraints in automobiles?

Progressives would’ve screamed, of course. But what will they do now that President-elect Obama appears poised to nominate Harvard Law School Professor Cass Sunstein to head the White House Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA)? For it’s actually Sunstein who has articulated the views noted above regarding clean air and the other issues involving costs, benefits and risk.

When President Bush nominated someone with similar anti-regulatory views, John Graham, to head OIRA, progressives and environmentalists strongly opposed his nomination.

Thirty-seven progressives, led by Senator Dick Durbin (D-IL) and including Harry Reid (D-NV), unsuccessfully opposed the nomination of Graham, who was also opposed by the League of Conservation Voters because Graham “has a perspective on the use of risk assessment and cost-benefit analysis that would greatly jeopardize the future of regulatory policies meant to protect average Americans. He advocates an analytical framework that systematically reinforces the worst tendencies of cost-benefit analysis to understate benefits and overstate costs.”

LCV even deemed the vote on the Graham nomination one of the eight most critical environmental votes of 2001.

The OMB position is obscure to people outside the Beltway, but it wields enormous power. The office oversees regulations throughout the government, from the Environmental Protection Agency to the Occupational Safety and Health Administration. Draft rules must be approved by OIRA before promulgation. Under Bush, OIRA often used its power to reduce the size and scope of the safeguards to reduce compliance costs to companies causing the health or safety threat. And the Sunstein choice is raising some eyebrows among those wonks who closely scrutinize federal regulatory policy. Robert Shull, former director of regulatory policy at OMB Watch, told E&E News:

It’s difficult to square the choice of an anti-regulatory scholar for the chief regulatory officer with Obama’s many, many promises for a new direction and moving forward from eight years of anti-regulatory, deregulatory misbehavior.

It’s unfair, of course, to paint the 54-year-old Sunstein as a complete clone of Graham and the other Bush anti-regulatory zealots. Indeed, Sunstein has earned a reputation as a genuine progressive on some issues, arguing in 2004 for the implementation of a “Second Bill of Rights” promoted in January 1944 by Franklin D. Roosevelt, to guarantee the “right of every American to a job, a home, and medical care.”

But as co-chair of the American Enterprise Institute Center for Regulatory and Market Studies advisory board, Sunstein works for one of the nation’s most influential right-wing corporate anti-regulatory think tanks. In an interview last year with the Wall Street Journal, Sunstein said of Obama, “He’s a University of Chicago Democrat, so he’s very attuned to the virtue of free markets and the risks of free-market regulation. He’s not an old-style Democrat who’s excited about regulations for their own sake.”

Sunstein will likely be confirmed by the Senate. After all, he is a long-time friend of the President-elect from their faculty days at the University of Chicago law school. Even so, it would seem vital for senators to quiz Sunstein closely at upcoming confirmation hearings and meetings. Does he still hold those views on pollution and risk? (And could he become part of a White House faction — along with Larry Summers, incoming director of the National Economic Council, and incoming national security adviser James Jones — opposing aggressive action on global warming?)

He shouldn’t get a pass just because he was nominated by Obama.

Yesterday, Treasury Secretary Henry Paulson sat down for an interview with Bloomberg, to discuss the effectiveness and future of the Troubled Assets Relief Program (TARP). Paulson has faced significant criticism for refusing to use any TARP money to address the housing crisis. When asked why he hasn’t used the TARP this way, Paulson said he was “reluctant to move ahead with a foreclosure plan” because it would not give “maximum bang for the buck.” Watch it:

Addressing foreclosures is key to combating the economic crisis, but evidently Paulson believes that more “bang for the buck” comes from throwing money at banks and letting them do with it what they will. According to a new report from the TARP’s congressional oversight panel, Treasury “still does not know what the banks are doing with taxpayer money”:

The recent refusal of certain private financial institutions to provide any accounting of how they are using taxpayer money undermines public confidence. For Treasury to advance funds to these institutions without requiring more transparency further erodes the very confidence Treasury seeks to restore.

Last month an Associated Press report revealed that no bank receiving taxpayer funds is willing to report what it has done with the money, even though, as the oversight panel noted, “it is within Treasury’s authority to make such reports a condition of receiving funding.” Reportedly, banks are simply hoarding the money, eliminating any “bang” it might have had.

To counter this, Rep. Barney Frank (D-MA) has proposed legislation “to tighten the rules of the government’s $700-billion financial bailout program and channel a large portion of it to home foreclosure prevention.” His plan includes a version of the foreclosure modification program proposed by FDIC Chairman Sheila Bair (which would cost just $24 billion), and requirements that banks “tell Congress how money received from the government is being used.”

Congress is also working on a “rewrite of bankruptcy law” that would “let bankruptcy court judges cut mortgage debts to help bankrupt homeowners.” These moves could significantly lower the number of foreclosures occurring, giving homeowners plenty of “bang for the buck,” while also repairing the tattered economic system.