Charles Dharapak/AP Photo
Cass Sunstein, left, led OIRA from 2009 to 2012.
This article is part of our policy roundtable on “The Future of the Regulatory State.”
This story is also part of the Prospect’s series on how the next president can make progress without new legislation. Read all of our Day One Agenda articles here.
Progressive policymakers are curiously allergic to admitting that some government programs should be shut down. This fetish for bureaucracy is often excused by the realities of governing: It is sometimes difficult to reorient systems built up over decades toward achieving progressive outcomes. But it is important not to confuse good programs run badly with programs designed to subvert progressive goals. The Office of Information and Regulatory Affairs, or OIRA, falls into the latter camp. The next president has the authority to effectively eliminate OIRA. He should exercise that authority on the first day of his presidency.
OIRA is the most powerful agency most Americans have never heard of. It was created in the Carter administration as part of a wave of deregulation, with the goal of imposing a level of centralized control over the rulemaking process. In the 40 years since, under every subsequent president, the agency has only gotten stronger. Now, OIRA is a procedural gauntlet wielded by presidents and narrow-minded economists to limit agencies’ ability to exercise the authority delegated to them by Congress.
OIRA works by forcing agency rules through an opaque and pedantic White House review process—both before agencies propose rules for public comment, and again before they promulgate final rules. This process acts to slow down rules or halt them altogether. It also allows industry to play a special and secretive role in the rulemaking process, outside of the existing public-comment process otherwise required by law.
That is exactly what happened to a proposed rule to reduce silica dust produced from industrial processes during the Obama administration. Silica causes lung cancer and kills or sickens thousands of workers each year. The Occupational Safety and Health Administration had studied silica for decades before writing the rule and sending it to OIRA for sign-off in 2011. There it sat for two and a half years. Every day OIRA delayed the rule was a day the agency allowed silica to harm the public.
OIRA is a black box, so what happened to the silica rule during those two and a half years is unclear. What we do know is that OIRA met with at least 30 different industry groups. We also know that, after taking even more time to respond to OIRA’s input, OSHA in 2016 ultimately imposed the same limit on silica the Centers for Disease Control recommended in 1974.
This delay is not unusual. Under the Obama administration, OIRA routinely blocked environmental rules for more than a year, despite a 90-day deadline for review. The agency blows past deadlines with casual abandon and regularly intervenes in rulemakings for reasons that have nothing to do with economics. Most of OIRA’s proposed changes are substantive and provided without explanation; sometimes, OIRA even changes the basic science underlying a rule. OIRA is required to explain any such changes, but since 2011, has only done so once.
What value, then, does OIRA add? Cass Sunstein, who led OIRA when the agency blocked the silica rule, said OIRA forces agencies to “look before they leap”—as if 40 years’ consideration on the silica standard was not enough. But OIRA’s main contribution to the rulemaking process is cost-benefit analysis—a process through which a small group of White House economists apply criteria they concocted to decide whether rules will live or die.
Cost-benefit analysis sounds like a rational way to evaluate public rulemaking. What’s the problem, one might ask, with trying to figure out whether a rule is worth the cost? The answer is that OIRA’s cost-benefit analysis simply isn’t credible. Many of the numbers that go into it are made up. Costs to powerful industries are routinely overestimated, while the benefits of preventing harms like runaway climate change are wildly understated. And, as President Trump has demonstrated, cost-benefit analysis can easily be rigged to produce politically oriented outcomes.
At its core, cost-benefit analysis is just a way of favoring powerful regulated industries—e.g., construction companies that don’t want to spend money limiting silica exposure—over the beneficiaries of regulation—e.g., the people who don’t want to die because they were forced to inhale silica dust at work. OIRA technocrats create models in which costs, real or not, are easier to calculate than benefits. And no matter what the math says, industry often argues that any cost is a job-killer. That is why every president since Reagan has required that agencies minimize regulations, seeing them as a burden to industry instead of a democratic mechanism to structure markets to promote competition, produce better products, and protect human welfare. The best way to ensure that cost-benefit analysis is not used to help industry is to not require it at all.
In fact, rigging cost-benefit analysis—to weigh benefits over costs—is exactly what advocates of an “expanded” cost-benefit analysis are proposing to do. Economist Todd Tucker suggests that we can fix cost-benefit analysis by translating “qualitative” benefits like human lives and equity into dollars that can be used to offset industries’ cost of compliance. But it is unclear what this proposal is supposed to accomplish. The silica rule, for example, was estimated to produce as much as $4.7 billion in net annual benefits after “difficult to quantify values” were factored in, and to cost the average workplace just over $1,000 to implement. Industry, and the Obama White House, opposed the rule anyway.
Moreover, this balancing is not the way many of our health and environmental statutes are supposed to work. In delegating authority to agencies, Congress gives them the discretion to enforce laws in ways that protect people, communities, small businesses, and the environment. For example, the Occupational Safety and Health Act gives the Department of Labor broad authority to set standards that ensure that “no employee will suffer material impairment of health or functional capacity,” even if they are regularly exposed to hazards like silica in the workplace. The statute was not designed to weigh costs; in fact, the Supreme Court has held that OSHA is not required to engage in cost-benefit analysis before promulgating rules. Nor should we want our health, labor, and environmental statutes to hinge on opaque economic models. Judges should decide whether rules are legal based on the law—not based on political considerations, or how much economists like a rule or not. To suggest otherwise is to willfully shoehorn industry-friendly criteria into laws meant to protect against just this kind of capture.
Fortunately, with a few court-imposed exceptions, neither OIRA nor executive branch agencies are statutorily required to deploy a bevy of economists to weigh the pros and cons of regulation. The only thing that is required is that agencies promulgate rules consistent with the statutes they implement. Using OIRA to give proposed rules a serious second look for legality is sensible. Using OIRA as yet another veto point for corporate lobbyists is not.
OIRA was created by executive order, and its outsized role in our government and long-standing threat to progressive aims can be ended by executive order. This could be accomplished in as little as a few sentences. A president who is serious about using government to serve the people would issue such an order in the first days of his presidency. Doing so won’t fix everything, but it will help to free our regulatory apparatus from industry influence—and make it more responsive to the other communities our democratic government is supposed to serve.
