OMB Archives - Shopfloor

Overregulation: EPA Excess, not Saccharine, is the Problem

By | General, Regulations | One Comment

From President Obama’s Wall Street Journal op-ed, “Toward a 21st-Century Regulatory System“:

[We] are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.

For instance, the FDA has long considered saccharin, the artificial sweetener, safe for people to consume. Yet for years, the EPA made companies treat saccharin like other dangerous chemicals. Well, if it goes in your coffee, it is not hazardous waste. The EPA wisely eliminated this rule last month.

Wall Street Journal editorial, “Obama’s Rules Revelation“:

One example Mr. Obama cited yesterday is a now-defunct EPA rule that treated saccharin like hazardous waste, as if the current problem is archaic rules. But growth isn’t lethargic because there are still colonial laws on the books about when livestock are allowed to graze on the village green. The real problems are those his own Administration and its allies have created—the regulatory blowout of the 111th Congress and the laws his appointees are now abusing to bypass democratic consent.

Jacob T. Levy, McGill University, “Cass Sunstein in the News“:

Note that Obama’s op-ed named just one example of overregulation, already repealed: the classification of saccharine as hazardous waste by the EPA. And it foresees new or stiffer “safety rules for infant formula; procedures to stop preventable infections in hospitals; efforts to target chronic violators of workplace safety laws.” The emphasis of the piece is hardly on any claim that in fact there is too much regulation in any area. The tone is generally one that says “we’ve been doing things basically right and now we will confirm that will a self-audit.”

From the Office of Information and Regulatory Affairs, a chart:

Read More

Sen. Landrieu Gets a Commitment from Salazar on Drilling

By | Energy, Regulations | One Comment

Sen. Mary Landrieu (D-LA) removed her hold, thus allowing the Senate to confirm Jacob Lew to be director of the Office of Management and Budget on Thursday. From Landrieu’s office, “Landrieu Receives Commitment from Sec. Salazar, Drops Hold of OMB Nominee Jack Lew“:

“Tonight I received a commitment from Interior Secretary Ken Salazar to provide certainty and regulatory clarity to an industry that has operated in the dark for months with shifting rules. The Secretary will come to Louisiana on Monday to meet with industry and express the Administration’s support for the oil and gas industry. He will outline the path forward so that permits will be issued and the people of Louisiana can get back to work in this vital industry. Given this commitment, I released my hold, so that Jack Lew can get to work balancing the federal budget and putting this country back on a path of fiscal discipline.”

Hope she’s right.

A Few Observations from Gov. Mitch Daniels

By | Global Warming, Health Care, Regulations, Taxation | No Comments

Gov. Mitch Daniels of Indiana was at the American Enterprise Institute on Tuesday, June 15, for a day long conference, “Health Care Reform: An Initial Checkup,” where he gave the keynote address. Excerpt from his remarks:

I wish honestly that national health care policy had headed in some direction more like this [Indiana’s model of consumerism in health care]. When people sometimes ask me what we ought to do or what my reaction to this whole bill is, I sometimes start by saying that “in a dead end, full speed ahead is the worst option.” That’s what I think we did. My own view is that we could hardly have built a health care system more guaranteed to produce excessive costs. . . . Whatever else you think or say about it, don’t call this reform. It didn’t reform anything. It took the form we had and blew it up to poster size. And I’m afraid by perpetuating the drivers of higher costs, it’s setting us up for more disappointments in the future.

Daniels, a Republican, was also interviewed by AEI’s Nick Schulz, editor of American.com. Video segments of the interview are available here. Since there appears to be a renewed push for some form of government carbon-tax-regulation-control scheme, this exchange is timely:

Schulz: The cap-and-trade legislation and carbon regulation are much in the news again, and there’s activity here in Washington on that front. You’ve described the current legislative push for cap and trade as a way to regulate carbon as a kind of imperialism. Sounds like strong stuff, but I want to give you a chance to explain what did you mean by that exactly? If you’re not in favor of cap and trade, are you in favor of, say, carbon taxes or some other way to deal with carbon regulation?

Daniels: The reference to imperialism was a reference to the differential way that at least some of the initial schemes would have fallen on our state – massive cross-subsidy, raise the costs of utility bills, maybe double them in a state like Indiana, raise the cost of doing business, driving jobs out of our state, probably off shore, while leaving untouched or even subsidized places like, well, California or elsewhere. So it was massively unfair, and I tried to raise dissent on behalf of the workers and the ratepayers of our state.

You know, the whole notion here of carbon dioxide regulation seems to me requires a huge burden of proof be carried before we do this. Read More

Federal Contracts are Not the Way to Change Labor Policy

By | Human Resources, Labor Unions | No Comments

There had been some suspicion that the Director of the Office of Management and Budget, Peter Orszag, would announce support for the proposed “High Road Contracting Policy” in remarks at the Center for American Progress, a speech that addressed the Administration’s plans to reduce federal spending by managing costs at federal agencies.

This “high road” proposal would create a system where federal bureaucrats would score the employment practices of private businesses that seek contracts with the government. Proposals would be evaluated by these terms and would grant preferential treatment in award the bids on the basis of factors that aren’t related to the business’ ability to deliver the terms of the contract. Such a system creates barriers for smaller-sized employers to compete and driving up costs for taxpayers.

Thankfully, the OMB Director did not indicate support for the proposal in Tuesday’s remarks. We hope the issue’s absence means the Administration recognizes that such efforts would go counter to its stated goal of rein in federal spending.

Further the White House Taskforce on the Middle Class has expressed support for a policy proposal which would actually do the opposite of reining in federal spending – a goal that the OMB Director made quite clear in his remarks.

As we’ve noted previously, several groups have been pressuring the Administration to enact major policy changes by reconfiguring the way that the federal government does business with the private sector. “Progressive“ think tanks and labor unions have been clamoring for the President to sign an executive order that would create a “high road contracting policy” to place new requirements on companies that do business with the government. We hope that the Administration will recognize the flaws of such a misguided proposal.

Orszag: Yes, the Fiscal Trajectory is Unsustainable

By | Economy, General, Taxation | No Comments

Peter Orszag, director of the Office of Management and Budget, spoke to an audience of several hundred manufacturers today, presenting the Administration’s few on spending, health care and education.

Not sure there was any news. Orszag did acknowledge that the U.S. “fiscal trajectory” was unsustainable, but argued that it’s “a myth” that “somehow the Obama Administration has overseen a massive increase in spending that is the cause of our long-term and medium-term fiscal problems.”

The deficits are rather largely the result of the recession — projected before the Obama Administration took office — Bush tax cuts of 2001 and 2003, and the Medicare prescription drug benefit, none of which was “paid for,” Orszag contended.

The situation requires a three-fold response, he said.

The first core principle is to reinstate the Pay As You Go principle. Any new spending or any new tax cut must be offset by corresponding changes somewhere else in the budget so that we don’t make the situation worse. That is what is now embodied in law because the Congress passed and the President signed a statutory Pay As You Go law that requires those actions for any new policies.

The trouble is, Congress is always finding ways to circumvent PayGo.  A current point of dispute in the Senate is whether the extension of unemployment benefits and COBRA subsidies would be “paid for” by spending reductions elsewhere; the bill was declared an “emergency,” so it’s not offset. Just more spending and debt.

Orszag said the other two strategies for tackling the deficits were to cut budgets — as the Obama Administration has done — and develop a long-term plan through the work of the Deficit Commission led by Alan Simpson and Erskine Bowles.

The OMB Director also spoke about elevating higher education as a federal priority, an issue the manufacturing audience appreciated.

We have two soundfiles:

UPDATE (3:53 p.m.): We forgot the key paragraph from his speech:

There’s been a lot of confusion and, I think, misinformation put forward, so I want to be very clear. I strongly support and join Chairman Bernanke in noting that we are on an unsustainable fiscal course. The key question is what we do about it, and we need to be very clear about what causes that fiscal gap over the medium and long term before we can be realistic about how we address it.

The Wall Street Journal’s reporter also identified Orszag’s comments about the fiscal trajectory as the news: “Orszag Tells Manufacturers US On ‘Unsustainable Fiscal Course’


In Support of Cass Sunstein for Regulatory Post

By | Regulations | No Comments

Prior to the 63-35 cloture vote on the nomination of Cass Sunstein to head the Office of Information and Regulatory Affairs, the leaders of the Senate committee who held his confirmation hearing spoke in praise of the nominee. We’ve uploaded the relevant section of The Congressional Record here.

Senator Joe Lieberman (I-CT), chairman of the Senate Homeland Security and Government Affairs Committee, said:

Because Professor Sunstein is brilliant, creative, and prolific, he has written some things that are unconventional and, for some, controversial. I believe when asked about each of those matters he answered sincerely and fully and reassuringly.

For example, hunters were concerned about Professor Sunstein’s views on gun rights. He made very clear he believes the second amendment creates an individual right to possess guns for hunting and self-defense. To farmers and others concerned with his previous writings and comments on cruelty to animals, Professor Sunstein has said he would take no steps to promote litigation on behalf of animals, which some concluded was his position based on a provocative article he wrote, and that he has no plans, certainly, to regulate animal husbandry.

So this is a bright, thoughtful, creative man who, as a professor, has written some provocative, unconventional ideas. I suppose if one wanted to take advantage of them for one’s own purposes, to politicize, in some sense, or ideologize, in some sense, this nomination, one might seize on those. But at bottom, this is a person extraordinarily well qualified for this position.

Senator Susan Collins (R-ME), the ranking member, also found Sunstein well-qualified, and his former law student, Senator Amy Klobuchar (D-MN) spoke strongly in his favor.

Groups cited in his support were the U.S. Chamber of Commerce, American Farm Bureau and National Association of Manufacturers. Included in the record was the letter from the NAM’s Vice President for Infrastructure, Legal & Regulatory Policy, Rosario Palmieri:

DEAR CHAIRMAN LIEBERMAN AND RANKING MEMBER COLLINS: On behalf of the National Association of Manufacturers (NAM) and the millions of Americans our members employ, I am writing to offer our support for the confirmation of Cass Sunstein to be Administrator of the Office of Information & Regulatory Affairs (OIRA) in the Office of Management & Budget. Thank you for the swift work of your Committee to report Professor Sunstein favorably to the full Senate.

The NAM has supported nominees to OIRA under both Republican and Democratic presidents. The office plays a crucial role in agency prioritization, paperwork reduction, and regulatory review. President Obama said that the office offers a “dispassionate and analytical `second opinion’ on agency actions.” We believe that function is especially crucial during the economic crisis we face and to preserve high wage jobs from being lost due to unnecessary or thoughtless government action.

Cass Sunstein, in particular, is deserving of confirmation because of his keen intellect, expertise in the fields of administrative and environmental law, and his commitment to fair and reasoned deliberation of issues that will come before him. Under an Administrator Sunstein, all sides will be given a fair hearing and a real opportunity to impact the final analysis of an issue.

We stand ready to assist in ensuring confirmation by the full Senate of Cass Sunstein.

OIRA Position is No ‘Czar’ and Sunstein Understands Regulation

By | Briefly Legal, General, Regulations | One Comment

The resignation of the White House’s green jobs adviser, Van Jones, for his radicalism and outrageous statements has been accompanied by a serious outbreak of anti-czardom, i.e., criticism of the Obama Administration for creating “czars” with great authority but no accountability. The fervor is most fearsome among the blogospheric right, and Glenn Beck on Fox has been impassioned on the topic.

It’s a good, legitimate issue, but too much of the criticism about czars has been indiscriminate and wrong. As Jonah Goldberg writes at National Review Online’s The Corner:

Politico has a report up that conservatives, flush with victory over Van Jones, are going to go after other czars. One problem, the three people it lists as next on the conservative list aren’t actually czars.

Cass Sunstein, President Obama’s nominee to head the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget, is a prime example of this misrepresentation.  Nominee. He was nominated. He has to be confirmed by the U.S. Senate.

People who protest czars say the White House creates these ad hoc positions to evade the confirmation process. (Van Jones, for example.) But that doesn’t apply in the case of Sunstein, who underwent a confirmation hearing before the Senate Homeland Security and Government Affairs Committee on May 12 and was reported out on May 20. (Committee news release.) Cloture has been filed and we can expect a Senate floor vote this week.

And the head of OIRA is anything but an ad hoc position. The office is a statutory one within the Office of Management and Budget, created by Congress in the 1980 Paperwork Reduction Act to bring additional accountability to the writing of Executive Branch regulations. Here’s the language — it’s Chapter 35, paragraph 3503. OIRA serves important oversight and coordination duties as Congress specified in law.

So, the czarist critique of Sunstein is just wrong. One can certainly oppose his confirmation on the merits, but the efforts to paint him as a far-out animal rights, anti-gun or organ-harvesting extremist are only tangentially related to reality.  Sunstein’s prepared statement and testimony at his confirmation hearing addressed the first two issues persuasively, and this post today by Glenn Reynolds points out how Sunstein’s positions have been misrepresented on organ donation.

Sunstein was a respected law professor at the University of Chicago for many years before going to Harvard. (White House bio.) In his numerous books and writings, he has written some provocative things, but nothing beyond the pale (or remotely as offensive as Jones’ statements). There should be room for thinkers in government.

On the matter of regulation, he’s top-notch. In his book, “Laws of Fear: Beyond the Precautionary Principle,” Sunstein against against the incoherence of the precautionary principle, which holds that products or practices must be proved safe before they can be allowed into the marketplace. This Boston Globe column by Sunstein, “Throwing precaution to the wind,” summarizes his arguments well. Note:

The simplest problem with the precautionary principle is that regulation might well deprive society of significant benefits, and even produce a large number of deaths that would otherwise not occur. In some cases, government regulation eliminates the “opportunity benefits” of a process or activity, and thus threatens to cause preventable deaths.

Indeed, Sunstein’s appreciation for cost-benefit analysis has brought him of criticism from “consumer activists” who would love to overregulate economic activity into paralysis. The trial-lawyer backed groups are suspicious of him on the issue of federal preemption. Those are signs of his merit in our book.

So Cass Sunstein will not be a White House czar, he’s gone through a thorough confirmation hearing and approval by the Senate Homeland Security and Government Affairs Committee, and his writings show him to be a supporter of regulatory reason and the benefits of the free market.

Those attributes make him a poor target for the political attacks du jour. But they would make him a good head of the Office of Information and Regulatory Affairs.

UPDATE (7:38 p.m.): Welcome Instapundit readers, and thanks, Glenn. (And don’t miss his earlier post on the Sunstein nomination.)

White House Lobbyist Restrictions Aren’t Eased Much at All

By | General | One Comment

The Hill ran a story, “White House eases stimulus lobbyist restriction,” with this thesis:

In a significant change, the Obama administration will now allow lobbyists to meet and have telephonic discussions with government officials regarding economic recovery projects…[snip]

In March, President Obama announced that government officials would not be allowed to consider the views of lobbyists regarding specific stimulus projects unless the requests are put in writing. The materials also had to be posted on an agency’s website within three business days of receipt. Lobbyists have said that the policy was one more example of the administration’s disdain for their industry.

Now, the just-revised rules will allow government personnel to accept meetings and calls from federally registered lobbyists on the implementation of stimulus projects. The head of the Office of Management and Budget, Peter Orszag, issued a new guidance late Friday regarding the administration’s communications with registered lobbyists about economic recovery funds.

The release of the guidance on the cusp of a summer weekend tells you that the Administration did not want to draw attention to the memo, probably for fear of being accused of hypocrisy or yet more OBama è mobile. Glenn Reynolds gibes, “Didn’t see that one coming, did you?

We wanted to congratulate the Administration for realizing it went too far. But in reading the guidance, we see many continued restrictions on free speech and the ability to petition the government for redress of grievances. The Obama Administration is still being cavalier about the First Amendment rights of U.S. citizens, including but not limited to registered lobbyists.

During the period of time commencing with the submission of a formal application by an individual or entity for a competitive grant or other competitive form of Federal financial assistance under the Recovery Act, and ending with the award of the competitive funds, you may not participate in oral communications initiated by any person or entity concerning a pending application for a Recovery Act competitive grant or other competitive form of Federal financial assistance, whether or not the initiating party is a federally registered lobbyist. This restriction applies unless:

(i) the communication is purely logistical (Part A above);
(ii) the communication is made at a widely attended gathering (Part B above);
(iii) the communication is to or from a Federal agency official and another Federal Government employee;
(iv) the communication is to or from a Federal agency official and an elected chief executive of a state, local or tribal government, or to or from a Federal agency official and the Presiding Officer or Majority Leader in each chamber of a state legislature; or
(v) the communication is initiated by the Federal agency official.

So this remains forbidden: “Hi, John? I do hope you’ll take a look at Project 42. It will save the taxpayers $10 million. Thanks!”

And from the FAQ:

Q: I have received a request to meet with representatives of a corporation that has filed an application for a competitive grant. The representatives want to discuss the merits of the corporation’s proposal. The representatives are not federally registered lobbyists. May I speak with them?
A: No. Because the corporation has filed an application for a competitive grant, its representatives may not initiate communications with you orally about the merits of the application or proposal.

Bottom line: The White House forbids legitimate advocacy as improper. And, it’s depriving itself of useful information.

Earlier posts:

UPDATE (5:24 p.m.): The anti-business activists at Citizens for Reponsibility and Ethics in Washington, which protested the original rules, call the revised guidelines “smart policy.” They don’t really say why, though: “It is just good policy that once an application for a competitive loan or grant has been filed, no one – registered lobbyist or not – can lobby the government official responsible for handing out the taxpayer funds.” That’s just an assertion, which in effect endorses this position: One someone applies for a grant or loan under the stimulus, they no longer can petition the Executive Branch.

And they call that policy smart?

President Nominates Cass Sunstein to OMB Regulatory Post

By | Economy, Regulations | No Comments

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.