New Oversight Policy Bad for Science-based Decisionmaking

President Bush signed a whole heap of bad yesterday. Amendments to a Clinton-era executive order will substantially increase the influence of the President's Office of Management and Budget (OMB) over federal agencies such as NASA, the EPA, and the FDA. From Greenwire (subscription required):

Under revised Executive Order 12866, each agency must install a presidential appointee as its "regulatory policy officer," reporting to the agency head and involved "at each stage of the regulatory process." The Clinton order created the policy officer post but did not specify what type of agency employee should fill it.

Agencies will not be able to begin developing any rule without the approval of the political appointees, who will also oversee a yearly listing of their agencies' "best estimate of the combined aggregate costs and benefits" of all planned regulations.

Agencies must also submit to OMB the "specific market failure" that each proposed regulation would address, to determine "whether any new regulation is warranted."

The order also changes the way agencies handle guidance documents. They will now be subject to pre-publication review by the White House through OMB, which already had the power to review proposed federal regulations.

The order divides guidance documents into two classes, creating a new group of "significant" documents for which OMB could demand "additional consultation" before allowing their public release.

"Significant" documents include those that would "lead to an annual impact of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities."

The original Clinton executive order applied that definition only to proposed regulations, not guidance documents.

If you suddenly taste a little vomit in the back of your mouth, you're entitled.

At best, the executive order will slow down agency rulemaking, oversight, and general guidance (and when was the last time you heard anyone complain about Washington's excessive speed?).

At worse, these amendments seem to make some of this administration's worst transgressions against agency science-based decisionmaking -- politically-motivated micromanagement and review of a wide swath of agency documents -- and make them policy. If you thought politics was mucking up agencies before, well, you'd better grab some Tums.

Predictably, where experts stand on this issue depends on where they sit. Greenwire reported, however, that libertarians and progressives agree on "their objection to installing political appointees as top agency regulatory officers"

"This opens up the possibility of further politicizing the [regulatory] process," (Cato Institute policy analyst Tom Firey) said, though he said he believe the Bush administration was asserting more authority over the regulatory process because Congress has "largely removed itself from the obligation of defining what its regulations are."

(Rena Steinzor, a law professor affiliated with the Center for Progressive Regulation) compared the move to grant more power to political appointees to the Soviet system of placing minders on nuclear submarines, "to make sure the captains pulled the nuclear trigger."

OMB Watch has issued a preliminary analysis of the amendments. The nonprofit -- which aims to increase government transparency and accountability; ensure sound, equitable regulatory and budgetary processes and policies; and protect and promote active citizen participation in our democracy -- is none too pleased.

Through amending the regulatory process, the President is institutionalizing an anti-regulatory approach by using a market failure criterion in place of actually identifying threats to public health and safety. It diminishes standards Congress may have required agencies to use, such as the best control technology, by elevating a new market failure standard that Congress never required. This standard has been advocated by Susan Dudley, Bush's current nominee as administrator of the Office of Information and Regulatory Affairs (OIRA). Dudley's extreme views on the use of free market standards were well-documented during her failed confirmation last year. Despite the failure to confirm her, the administration has used the Executive Order as a backdoor means to implement the Dudley philosophy.

The market failure criterion is yet another layer added to the agency analysis. The agency must comply with the statutory criteria (such as best available technology) as well as an analysis demonstrating market failures. If the agency meets OMB's standards for assessing "whether any new regulation is warranted," then the agency must also comply with other standards in the E.O., including cost-benefit analysis.

This new standard decidedly favors the regulated community and places yet another hurdle for agencies to issue regulations in pursuit of protecting the public.

Undoubtedly there will be more on the ramifications of these amendments to come. Unfortunately, this sort of rule changing is far too obtuse for most TV news shows to cover, and has a high eye-glaze-over factor, so we won't be expecting this to be the hot-button issue it really ought to be. Which, we expect, is by design.

Will Congress intervene? Can Congress intervene? We're gonna need a bigger bottle of Listerine.

UPDATE

The media coverage is starting to spill out on this. Here's a story from January 30: "Bush directive increases sway on regulation"