Video"Pre-arsenic, in every case where industry was monolithic, it got what it wanted," says OMB Watch's Bass. "After being skewered on arsenic and school lunches, the Administration has had the same mindset about regulations, but has approached things in a more subtle and savvy way." And nothing is more indicative of that subtlety and savvy, he notes, than putting John Graham in the driver's seat on regulatory affairs.
Graham contends that his battle plan is not to see certain rules added or subtracted from the Federal Register, but to apply in real-world terms the ivory-tower notion that rigorous analysis of regulations can achieve more protection of the public at less cost to business. "It's fair to say that's why I'm here," he notes.
Since July, he has been meeting almost daily with representatives of agencies that have new regulations in the pipeline. In the week after he issued his September memo, he had twice as many such powwows, including with the Food and Drug Administration on dietary supplements, the National Transportation Safety Administration on tire safety, and the Energy and Defense departments on criteria for compensating workers who get sick from radiation exposure.
For years, agencies have been required to prepare a cost-benefit analysis on rules expected to have an effect on the economy of $100 million or more, but Graham says that what he has seen to date falls far short of his expectations. "The quality is very uneven, both within agencies and between agencies," he explains. "One thing to keep in mind is that the incentive for a regulator to do a good cost-benefit analysis is not very high if the threat of their rule being returned is very low."
According to Graham, no rules were returned in the last few years of the Clinton Administration for failure to perform a quality analysis of the regulation's impact. In contrast, in his first three months on the job, he has sent a dozen "return" letters requesting that the agency make a better case for why the proposed rule is needed. In October, for instance, he wrote to the EPA that new water-quality standards for tribal lands contained "no quantitative analysis of the costs and benefits" for this action.
Due Process?
To show that he is more than a foe of overregulation, Graham has also issued two "prompt" letters that call for rules in underregulated areas--something his predecessors at OIRA never did. In one, he asked the Department of Health and Human Services to regulate transfatty acids, which increase the risk of heart disease; in the other, he urged OSHA to come up with rules for increasing the availability of defibrillators in the workplace.
Graham also plans to use this new tool to prompt agencies to rescind or modify certain rules. He has asked for suggestions from the public for where he might act, and business interests have made appeals on behalf of several dozen unpopular rules. "I appreciate the substance of his prompt letters, but not the process," says Bass. "He's set himself up as the expert, telling the agencies what to do."
Bass is also concerned that Graham will use his notions of what are proper cost-benefit analyses to paralyze the regulatory process. Graham's definitions of data quality are "arbitrary," Bass argues; his use of peer review gives the regulated a greater say in the need for new regulations, and his reliance on science-based risk assessments can be easily manipulated with slight changes in assumptions. "There's a real problem having a single person shaping our rule-making process throughout government," he concludes.
To which Graham shrugs: "I have been very surprised to hear how potent and hefty the powers of this office are. I'm learning more about the realities of Washington, and what's most fascinating is that it takes a high degree of consensus among a wide variety of actors to accomplish things." But for now, at least, Graham occupies center stage.
Regulatory Scoreboard
Below is a sampling, by agency, of efforts in the first year of the Bush Administration to ease the regulatory burden on business.
Treasury. Modified corporate tax shelter disclosure rules to allow companies to avoid reporting certain legitimate business transactions that might trigger an IRS review.
Health and Human Services. Proposed inspecting nursing homes that have good records less frequently and shifting resources to homes with a history of poor-quality care.
Interior. Rescinded a rule that would phase out snowmobile use in Yellowstone and Grand Teton national parks.
Energy. Supports easing or eliminating sections of new rules governing the process by which black-lung victims can claim their federal disability benefits.
Environmental Protection Agency. Decision to drop tougher standards on the allowable level of arsenic in drinking water has been subject to further review because of public outcry. Reversed Bush's campaign pledge to regulate carbon dioxide emitted by electric power plants.
General Services Administration. Suspended rule that requires government contracting officers to take into consideration a company's record of complying with tax laws, labor laws, environmental laws, and others before awarding federal dollars.
National Labor Relations Board. Plans to scale back the use of its statutory authority to petition federal courts to seek injunctions to halt unfair labor practices, such as mass firings of workers.
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