Washington Notebook - by Eric Kulisch
In my previous Washington Notebook column
I wrote that the Obama administration has gotten an unfair reputation as anti-business because of some of the regulations it has promulgated. But taken in total, the volume of regulations under Obama has actually been less than under some of his predecessors.
More evidence backing that thesis comes from the Center for Progressive Reform (CPR), which says that a small office tucked inside the Office of Management and Budget has blocked or watered down more regulations that have flowed up from agencies than during the Bush administration.
The job of the Office of Information and Regulatory Affairs is to apply a cost to proposed rules changes and determine whether the benefits outweigh them.
“All Things Considered” on National Public Radio talked to John Graham, who ran OIRA under George W. Bush. He pointed out that Republican presidents tend to pick heads of regulatory agencies that don’t like new rules and don’t send many rulemakings up the line for review. Regulatory agencies in the Obama administration are brimming with ideas to improve safety, healthcare, the environment, the banking system and other areas that impact the economy or people’s lives. OIRA acts as a filter to modify rules that could have a negative impact.
The Center for Progressive Reform, as its name suggests, favors more government intervention to protect workers, the environment, and public health. It claims in a new report that intensive industry lobbying leads OIRA to alter many draft regulations.
CPR President Rena Steinzor made a similar argument as Graham in a news release announcing the group’s study of government data over the past 10 years involving the rulemaking process.
“The sad reality here is that the President appointed strong leaders to the environmental, health and safety agencies, but has undermined them over and over by allowing OIRA to substitute its judgment for the expertise of the agencies. Those agencies have an exhaustive process where all parties get to present their case – in public – about how a regulation should be designed, but the White House has subverted it,” she said.
“A steady stream of industry lobbyists . . . uses OIRA as a court of last resort when they fail to convince experts at agencies like the Environmental Protection Agency, the Food and Drug Administration, and the Occupational Health and Safety Administration to weaken pending regulations,” according to the report.
The group says that 84 percent of EPA regulations are altered and 65 percent of non-EPA draft submissions are changed.
Among the most active groups holding meetings with OIRA over the last decade are the American Trucking Associations, the Air Transport Association (now called Airlines for America), the National Association of Manufacturers and the U.S. Chamber of Commerce, the report said.
OIRA, headed by Obama confidant Cass Sunstein, is being used by the administration to deflect business community charges that regulations are undermining them and the economy, the CPR says. It decried OIRA’s instructions to EPA Administrator Lisa Jackson, for example, to rollback smog-reduction standards below those proposed by the Bush administration.
Another complaint is that OIRA takes longer than the 90 days required to complete a regulatory review 20 percent of the time. The agency is allowed an extra 30 days to complete its analysis only if the agency head agrees to it. CPR said 8 percent of the 501 reviews it examined took between 91 and 120 days and another 12 percent have lasted longer than four months.
One of those rules in limbo is a proposal from the Department of Transportation’s Pipelines and Hazardous Materials Safety Administration presented to the public in January 2010 that would require lithium batteries transported on aircraft to be treated as full hazardous materials, which would require costly changes to packaging, labeling, documentation, training and other procedures, as well as modifications to aircraft because the power packs would only be allowed in small cargo compartments accessible to the crew or locations equipped with the right kind of fire suppression system.
The final draft of the lithium battery rule has been at OMB for almost a year now and there has been no word about its status. That’s because groups like the Chamber of Commerce, the Express Delivery and Logistics Association and the Rechargeable Battery Association have done a good job behind the scenes slowing it down. Industry argues that the proposed rule is much more expensive to implement than PHMSA originally estimated, is not necessary because there have no cases in which onboard fires have been caused by properly packed batteries, and is out of touch with tough, new international standards for transporting lithium batteries by air. Industry groups across the board strongly believe that PHMSA seriously underestimated the cost to industry, especially neglecting to account for increased airfreight fees and delays due to limitations on the ability of most planes to carry the batteries, and overestimated the benefits.
The Rechargeable Battery Association took credit on its Web site in November 2010 for helping bring Japanese and Korean officials to a meeting at OMB to discuss the impact the rulemaking would have on the battery and electronic product manufacturers in their countries.
According to OMB meeting records available in the CPR database, representatives from the Rechargeable Battery Association, the Embassy of Japan, the Battery Association of Japan, Panasonic, Sony, the Japan Electronics & Information Technology Industries Association, and the U.S. Trade Representative met with OMB to discuss revisions to the rules for transport of lithium batteries.
A week later, OMB officials sat down with representatives from the Korean Embassy, Korea Agency for Technology and Standards, Samsung, LG Electronics, and the USTR.
The Korean officials submitted written comments to OMB at the time, asking the office to send the rule back to PHMSA for further consideration and to correct what it said were flaws in the rulemaking process.
Don’t get me wrong. I’m not advocating that the lithium battery rule be approved. Lithium batteries are ubiquitous in our lives, powering everything from cell phones, laptops and digital cameras to medical devices. Making delivery of these power packs more difficult would increase the costs to consumers and businesses and deprive them of ready access to devices they depend on.
But it’s important to understand how regulations are really made.
The Obama administration appears to be playing good cop/bad cop. On the one hand, it is placating its liberal base by taking action at the agency level to protect the public from perceived corporate wrongdoing or negligence. Behind the scenes, it is receptive to the economic arguments and blunting parts of rules that would have a big impact on businesses.
CPR recommends that OIRA and OMB stop reviewing individual rulemakings and instead focus on cross-cutting regulatory problems that require coordinated actions by multiple agencies. It also is calling for more transparency into how OIRA overrides agency decisions and an end to meetings with outside parties. The office should limit its evaluation to dialogue with agency staff and reviewing the public comments filed as part of the rulemaking process.
The White House isn't going to change the basic function of OIRA, so perhaps the office should invite third parties, such as safety or consumer advocates, to present their side of the story if industry lobbyists have paid a visit. The name of the game is access, so this would at least even things out in terms of access.