Keeping OIRA from Harming Efforts to Reduce Greenhouse Gas Emissions
This blog explains why President Obama should exempt proposals to mitigate climate disruption by reducing greenhouse gas emissions from OIRA review. First, the procedure that justifies OIRA review, cost-benefit analysis (CBA), just does not work for climate disruption measures. Second, CBA undermines just and legal climate policy. Third, climate disruption poses special risks that make the delay and weakening that comes from OIRA review unacceptable.
Because of climate disruption's nature, prominent CBA proponents, such as Eric Posner and Martin Weitzman, have argued that CBA works badly for climate disruption. Weitzman emphasizes that climate disruption creates a risk of a catastrophe. Because the magnitude and likelihood of such a catastrophe remain unknown, CBA cannot include a reasonably reliable benefit estimate. Weitzman argues that this problem so dominates any rational response to climate disruption that conventional CBA becomes useless and highly misleading as a guide to climate policy.
Eric Posner and Jonathan Masur object to administrative CBA, because even an estimate of the non-catastrophic consequences depends on a host of questionable assumptions, many of them quite political in nature. For example, valuation of climate mitigation's benefits depends heavily upon discount rates that economists typically apply to estimates of future benefits …
On this 20th anniversary of the regulatory review regime of Executive Order 12,866, the appropriate thing to do would be to take stock. Has centralized regulatory review, on balance, improved the quality of federal regulation or interfered with it? Is this now-extensive regulatory review process worth it, given its costs? Sadly, the opaque quality of the process precludes a definitive answer.
Readers familiar with regulatory review already know that Executive Order 12,866, issued by President Bill Clinton, significantly reaffirmed systematic, centralized White House review of agency rulemaking activity. That Order built on the structure established in President Ronald Reagan’s 1981 Executive Order 12,291, both strengthening and modifying it in important ways. And Reagan’s Executive Order in turn built substantially upon more tentative moves made by Presidents Nixon, Ford, and Carter. EO 12,866 effectively settled three areas of bipartisan consensus (at …
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 …
It was 20 years ago this week that President Bill Clinton signed Executive Order 12866. That was a watershed of sorts, because it marked the adoption by a Democratic administration of a key aspect of President Reagan’s anti-regulatory agenda -- the requirement that all major federal regulations undergo cost-benefit analysis. This was not a move that pleased Clinton’s liberal base, since cost-benefit analysis was widely understood to be a tool favored by industry for weakening and delaying regulation. But, nonetheless, Clinton signed 12866 in 1993, and it’s been with us ever since.
Maybe the staying power of cost-benefit analysis has partly to do with the superficial appeal of the basic idea. “After all,” says the Chamber of Commerce, “it’s just basic rationality and common sense! Why would you want a rule that causes more harm than good?” And then come the inevitable appeals to …
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 …
Call it buyer’s remorse. The Office of Advocacy of the Small Business Administration (SBA) is publicly—albeit meekly—tiptoeing away from a now-infamous report that it commissioned, in which economists Nicole Crain and Mark Crain purported to find that federal regulations cost the economy $1.75 trillion in 2008. After being roundly criticized by CPR, the Congressional Research Service, and others, SBA’s Office of Advocacy now explains, referring apparently to the $1.75 trillion figure that “the findings of the study have been taken out of context and certain theoretical estimates of costs have been presented publicly as verifiable facts.” While this admission is welcome, it does not go nearly far enough in light of the antiregulatory crusade this misleading, taxpayer-supported report fueled.
Soon after the Crain and Crain report was released in 2010, CPR published a White Paper that demonstrated the unreliability and implausibility …
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 …
This coming Friday marks the 20th anniversary of a little-known but remarkably important document: Executive Order 12866, issued by President Bill Clinton in 1993. Executive Order 12866 replaced an order issued by President Ronald Reagan in 1981. Both of these documents set out a process whereby the White House – acting through the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB) – would review major agency rules before they were issued.
Executive Order 12866, and the Reagan order before it, ushered in a new era in administrative law, one in which the White House would become the dominant force in administrative rulemaking and in which cost-benefit analysis would become the overarching framework for evaluating the wisdom of rules. Professional career staff in the agencies, steeped in the technical fields relevant to the agencies’ work, would see their work product changed, sometimes dramatically …
Today, the Hill published an op-ed by CPR Vice President Sid Shapiro entitled, "In Defense of Regulation."
According to the piece:
The responsible scholarly literature — as opposed to calculations cooked by business-friendly think tanks — has refuted the opponents’ claims of regulatory costs far in excess of the benefits of regulation. The same literature reminds us that not regulating also has costs — costs paid by the American public rather than by regulatory entities.
Consider the Environmental Protection Agency’s long-delayed revisions to air quality standards required by the 1990 Clean Air Act Amendments. If it succeeds, and if the anti-regulation forces in Congress don’t derail it, the rules are projected to save 237,000 lives by 2020. If the rules are delayed further or scuttled altogether, that’s the cost of inaction — actual lives lost due to air-pollution-related illness.
It concludes:
Then there’s climate change. We …
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:
- A 50 µg/m3 permissible exposure limit (PEL) is necessary, but not sufficient. As with numerous other health standards OSHA has issued over the years, the agency has determined that reducing the PELs to their proposed level will reduce the risk posed by silica but will leave workers exposed to …
