Thursday, April 4, 2013

How Literally Did Cass Sunstein Take His Title as Regulatory "Czar"?

That's according to Lisa Heinzerling's (Georgetown Law) damning review (here) of Sunstein's new book, Simpler: The Future of Government (Simon & Shuster 2013). Heinzerling, who was Senior Climate Policy Counsel to the EPA Administrator and then Associate Administrator of EPA's Office of Policy during President Obama's first term, alleges that her Administration "colleague" Sunstein arrogated authority during his term as head of the Office of Information and Regulatory Affairs (OIRA) in the White House Office of Management and Budget (beyond those granted to his office by statutes and executive orders), determining which agency rules saw the light of day. She claims that he intruded on prerogatives dedicated by Congress to front-line agencies, not to OIRA.

I'm not sure that's true, especially given the subtle changes made in Executive Order 13,563 (Jan. 18, 2011) (see here), which basically (for better or worse) transformed cost-benefit analysis (CBA) from an analytical tool to a regulatory decision rule. Such a change would not have been supported by many prominent economists, who advocate for CBA as a useful analytical tool, but not as a decision rule (see here). But that's neither here not there. The fact is that the President, by his Executive Order, has turned it into a decision rule, and OIRA administrator Sunstein wielded it as such.

More importantly, Heinzerling gets exactly right the biggest problem with the ever-increasing authority of OIRA:
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.
In addition, Heinzerling is correct to question Sunstein's role, as head of OIRA, in the 2011 White House decision to force EPA to  abandon reconsideration of the Bush Administration's air quality standard for ozone, something it had promised to do in settlement of judicial proceedings against the Bush rule. Under the Clean Air Act, air quality standards are supposed to be set without regard to cost, but only with regard to public health. In my recent piece on "Law, Politics, and Cost-Benefit Analysis," published (here) in the Alabama Law Review, I present circumstantial evidence that the Obama Administration's decision was (unlawfully) based on political as well as economic cost considerations. Administrator Sunstein played a prominent role in the ozone decision, which he defends in his book, arguing that it was the right decision on the merits. But was it right on the scientific merits, which are the only merits that are supposed to matter under the law? That question, apparently, he does not answer.

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