From The White House:

President Obama Announces Another Key OMB Post

WASHINGTON – Today, President Barack Obama nominated Cass R. Sunstein to be Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget.

President Obama said, “As one of America’s leading constitutional scholars, Cass Sunstein has distinguished himself in a range of fields, including administrative law and policy, environmental law, and behavioral economics.  He is uniquely qualified to lead my Administration’s regulatory reform agenda at this crucial stage in our history. Cass is not only a valued advisor, he is a dear friend and I am proud to have him on my team.”

A very good appointment from the President. Sunstein is a keen thinker on many issues, obviously, but we especially appreciate his perspective on the precautionary principle. This Boston Globe column gives a good summary.

In other nomination news, the Washington Post’s Al Kamen notes that when Gov. Kathleen Sebelius takes over as Secretary of Health and Human Services, “there will finally be one confirmed Obama appointee at each agency.”

In that distinguished grouping we find Education Secretary Arne Duncan, Transportation Secretary Ray LaHood, Housing and Urban Development Secretary Shaun Donovan, Interior Secretary Ken Salazar, and Labor Secretary Hilda Solis. Energy Secretary Steven Chu and Treasury Secretary Timothy F. Geithner each have but one other confirmed nominee to talk to, according to data compiled by Clara Janis of New York University’s Wagner School of Public Service.

The White House has really stepped up the nominations this week, starting with this list.

UPDATE (3:40 p.m.): OMB Director Peter Orzag welcomes Sunstein to the shop, citing his influence on behavior economics:

Cass will be able to shape a regulatory structure that is rooted in commonsense to achieve the values and ends that the President and the American people seek. For years, Cass has been that rare specimen – an academic whose writing and thinking has had a real effect on policymakers. Indeed, Cass is the most cited law professor on any faculty in the United States. Now, Cass is entering the arena, and I am eager to work with him to implement the President’s regulatory reform agenda.

Correction to original post. Executive Order 13422 was not drafted by Susan Dudley. Dudley arrived at OMB on January 30, 2007 — 12 days after EO 13422 was issued (January 18, 2007).

Iain Murray of the Competitive Enterprise Institute sees maneuvering and changes under way in the Executive Branch’s regulatory approval process, as President Obama rescinds President Bush’s Executive Orders 13258 (drafted by John Graham) and 13422 (drafted by Susan Dudley) in order to revert to Clinton’s EO 12866 (drafted by Sally Katzen). Among the impacts:

[13258] and 13422 required agencies preparing draft rules and guidance docs to “identify in writing the specific market failure (such as externalities, market power, lack of information) or other specific problem that [the rule or guidance] intends to address (including, where applicable, the failures of public institutions) that warrant new agency action, as well as assess the significance of that problem, to enable assessment of whether any new regulation is warranted.”  Whereas EO 12866 requires agencies to “identify the problem that it intends to address (including, where applicable, the failures of private markets or public institutions that warrant new agency action) as well as assess the significance of that problem. . . . examine whether existing regulations (or other law) have created, or contributed to, the problem that a new regulation is intended to correct and whether those regulations (or other law) should be modified to achieve the intended goal of regulation more effectively.  . . . [and] identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.”

Guidance docs will no longer go through the review process at the Office of Information and Regulatory Affairs, giving agencies more leeway, as we understand it.

OMB Watch, activist supporters of the intrusive regulatory state, find much to like in the White House’s current regulatory reordering.

The executive order Obama issued, Executive Order 13497, was published in the Federal Register on Feb. 4. It revoked a controversial order Bush issued in January 2007 that gave OIRA more control over agency regulatory practices by amending E.O. 12866. Critics of the Bush changes, including OMB Watch, argued that additional delay in issuing regulations would result from two changes: 1) making regulatory policy officers within agencies presidential appointees and giving them power to initiate or kill regulations, thus usurping what had traditionally been a power of the agency heads; and 2) requiring agencies to submit significant guidance documents (nonbinding information documents of all types that clarify how to implement rules) to OIRA for review before releasing the documents. There was no time limit by which OIRA had to act on the guidance documents. 

Wonder how OIRA designee Cass Sunstein regards all this. Like Judd Gregg regarded the Census shift?
 

The Center for Progressive Reform — boy, that’s a scary-sounding group — has released a paper by law professors attacking Cass Sunstein, President Obama’s nominee to head the Office of Information and Regulatory Affairs. OIRA is the section of the Office of Management and Budget that provides White House review and coordination, theoretically, for executive branch agencies.

In the publication, “Reinvigorating Protection of Health, Safety, and the Environment: The Choices Facing Cass Sunstein,” the reforming progressive identify the following “concerns” about Sunstein, a professor of law at Harvard:

Sunstein is a stout supporter of cost-benefit analysis as a primary tool for assessing regulations, despite its imprecision and the ease with which it is manipulated to achieve preferred policy outcomes;

He supports such cost-benefit approaches as the widely condemned “senior discount” method for undervaluing the lives of seniors in cost-benefit analyses, an approach even the Bush Administration was forced to disown;

He rejects the “precautionary principle” as a basis for regulating, thus ensuring that dangerous pollutants and products will be given the “benefit of the doubt,” rather than well-grounded concerns about health and safety;

He supports the centralization of authority over regulatory decisions in the White House – OIRA in particular, even though Congress delegated the exercise of expert judgment to the regulatory agencies, not to OIRA’s staff economists in the White House; and

He has written that the Occupational Safety and Health Administration might be unconstitutional.

We admire his stoutness and marvel at the idea that someone’s belief in cost-benefit analysis should be controversial. And he rejects the precautionary principle? Good.

The progressivistic reformators were big supporters of the Consumer Product Safety Improvement Act. How’s that working out nowadays?

Addendum: Walter Olson points to a claim from the centgressives that warrants a dropped-jaw: “It is difficult to think of a single public health or environmental threat that with the benefit of additional research has not proven even more dangerous over time.”

Right. Here’s a headline from this week: “Panel Finds Vaccines With Mercury Didn’t Cause Autism”

From today’s Washington Post, “Obama to Name Lawyer Friend To Regulatory Affairs Position“:

President-elect Barack Obama will name Cass R. Sunstein, a close friend and one of the nation’s top constitutional lawyers, to a senior-level post in charge of government regulation, a transition official said.

Sunstein, a Harvard University law professor who grew close to Obama during their years at the University of Chicago, will become the administrator of the Office of Information and Regulatory Affairs.

Obama talked on the campaign trail about the need to revamp the nation’s regulatory structure, especially in housing and finance, areas in which lapses contributed to the current economic crisis.

In his new position, Sunstein will oversee reform of regulations, seeking to find smarter approaches and better results in health, environment and other domestic areas, a transition source said.

The Office of Information and Regulatory Affairs can do good things in imposing discipline and regulatory restraint on the executive branch agencies, examining the costs and unintended consequences that result from excessive rulemaking. For that reason, the Bush OIRA has been the subject of intense, often personalized criticism from the activist crowd who never met a regulation it didn’t like. (See below.)

We don’t know enough about Sunstein (Harvard CV) to offer an informed opinion, although he’s certainly mentioned prominently enough in legal publications and the blogosphere. In any case, we promise not to engage in the kind of smearing that was practiced against Susan Dudley and her predecessors.

Earlier posts (2007)

• WSJ: The Value of Susan Dudley’s Appointment
• Congratulations, Susan Dudley
• Noli Illegitimi Carborundum, Susan
• Experienced? Dispassionate? Analytical? How Dare She!

P.S. Speaking of Susan Dudley, she came to the Bush Administration from the Mercatus Center at George Mason University, a free-market oriented think thank. Indeed, George Mason University is often seen as an outpost of University of Chicago economics in northern Virginia. So President-elect Obama gives his economic stimulus speech today at GMU. How interesting.