What should federal regulation look like and who should make it happen?

by Brian Wolfman

Congress crafts the outlines of federal regulation — sometimes providing little direction and other times giving more specifics — and delegates the rest of the job to expert federal agencies, which are duty bound to protect the people's interests in health, safety, and economic well-being (taking into account feasibility, costs and benefits, federalism concerns, etc.). In promulgating regulations, the agencies are required to take account of public comments, and their work may be reviewed by courts to assure its legality. That's how the system works, right? Well, not really. Before most important regulations are issued, they must be reviewed by the Office of Management & Budget, more specifically that agency's Office of Information and Regulatory Affairs (OIRA). And they may be delayed for years or die at OIRA.

Law professor Cass Sunstein, who ran OIRA during President Obama's first term, has just published a book about what he did at OIRA called "Simpler: The Future of Government." Here's an excerpt from Sunstein's introduction:

From 2009 to 2012, I ended up as administrator of OIRA. In that
position, I helped to oversee the issuance of nearly two thousand rules
from federal agencies. Under President Obama’s direction, I promoted
simplification, including the use of plain language, reductions in red
tape, readable summaries of complex rules, and the elimination of
costly, unjustified requirements. I argued in favor of the use of
“nudges”—simple, low-cost, freedom-preserving approaches, drawing
directly from behavioral economics, that promise to save money, to
improve people’s health, and to lengthen their lives. Also under
President Obama’s direction, I promoted a disciplined emphasis on costs
and benefits, in an effort to ensure that the actions of government are
based on facts and evidence, not intuitions, anecdotes, dogmas, or the
views of powerful interest groups. In this book I describe the large-scale transformation in American
government that took place while I was OIRA administrator. I explore
initiatives designed to increase simplicity—some now in effect, others
on the horizon, still others for the distant future. As we will see,
initiatives of this kind can be used not only by governments all over
the world but by countless private organizations as well, including
businesses large and small, and indeed by all of us in our daily lives.
Each of us can benefit from simplicity, and all of us can make things

Go here or click on the embedded video below to hear Sunstein discuss the book.


But there's definitely another side to the story. Law professor Lisa Heinzerling has written "Sunstein’s ‘Simpler Government’ Is Legally Suspect, Overly Secretive And Politically Unaccountable." Here's an excerpt:

In his revealing book, Sunstein tells us why [regualtions languished and died at OIRA]: 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.

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