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Home , Cass Sunstein, Samantha Power, The Regulatory Review

i n fo c u s The Costs and Benefits Of Obama’s longtime friend is poised to oversee federal rulemaking, leaving many liberals concerned

By Rebecca Adams siderable clout to the OIRA post, and observ- Last week brought much cheer to liber- ers expect he will make his imprint quickly als who anticipate a more aggressive regula- felt. “My prediction is that Cass will be one of tory posture from the new administration the most powerful OIRA heads,” said Richard than its predecessor. L. Revesz, dean of the New York University President Obama signed an executive or- School of , who has urged regulators to der that revoked changes to the regulatory account for the ethical impact of failing to review process that President George W. Bush protect future generations and whether rules instituted two years ago. The Bush order re- are needed to protect certain groups, such as quired federal agencies to submit more types the disadvantaged, from risks. of regulatory policies for review by the White Regulatory activists are anxious about what House Office of Management and Budget Sunstein will do with his power because his before they could be published, and it granted office has the authority to kill rules or force OMB’s political appointees increased author- agencies to rewrite them. And he clearly parts ity to get proposed rules rewritten. In addition company with several prominent Obama ap- to suspending those changes, Obama asked pointees in the White House and in the agen- OMB to produce the basis for a new rule-mak- cies his office will oversee. ing order within 100 days. One well-known detractor of the cost-ben- That’s the good news for liberals seeking a New rulemaker in town: Sunstein has liberal efit approach he favors is Lisa Heinzerling, critics worried. buffer between regulatory decisions and po- senior counsel to EPA Administrator Lisa P. litical prerogatives. On more fundamental nesses. Now liberal activists are worried that Jackson on climate change issues and the pre- questions of regulatory philosophy, however, policies produced under ferred candidate of many liberals for the OIRA liberals remain skittish about Cass R. Sunstein, process of the Bush years might remain sub- post. Heinzerling was an author of the legal Obama’s nominee to head OMB’s influential stantively intact. brief that persuaded the Supreme Court in Office of Information and Regulatory Affairs. “I’m concerned about his ideas,” said Rena 2007 to order the EPA to decide whether to Sunstein, the president’s former University I. Steinzor, president of the Center for Progres- regulate greenhouse gases. And she has jousted of Chicago Law School colleague, has writ- sive Reform and a professor at the Univer- with Sunstein in academic writings for years ten extensively on federal policy making and sity of Maryland School of Law. “Industry is over how much regulatory weight should be endorsed some Bush-branded regulatory ini- thrilled with this nomination,” she said. “Their given to cost-benefit calculations. tiatives — the most controversial of which is pleasure is disturbing.” Likewise, many expect Sunstein to lock the use of cost-benefit analyses to evaluate Thanks to his friendship with Obama and horns with Carol M. Browner, the former proposed government rules. his academic , Sunstein brings con- Clinton EPA head named by Obama to a new Trying to balance government protections White House post of energy “czar,” overseeing for the public with the costs those safeguards climate and energy policies across a range of entail has limited usefulness, say some ad- My prediction is agencies. Browner, too, tends to stress risk vocates of increased regulation, because it’s “that Cass will be one reduction over cost issues. too difficult to quantify all benefits. But the “Just stay tuned and watch for the nuclear process was elevated under the term of John of the most powerful explosion when Carol Browner and Cass have D. Graham, OIRA administrator from 2001 lunch for the first time because they come out to 2006. Graham’s critics say he used that tool OIRA heads. of such different camps,” said Peter Van Doren, and others to roll back regulatory initiatives — Richard L. Revesz, dean, a senior fellow at the Cato Institute, a libertar-

bloomberg news/ ” that were deemed harmful to affected busi- New York University School of Law ian think tank. Van Doren edits the institute’s

www.cq.com | February 9, 2009 | CQ WEEKLY 293 i n fo c u s quarterly magazine Regulation, which has pub- that Sunstein may push for more disclo- CASS R. SUNSTEIN lished some of Sunstein’s writings. sure on many issues — as he’s advocated in On big issues, officials typically coordinate Born: , 1954 “” and elsewhere — rather than strict with the White House to ensure they are pur- Family: Married , his regulatory mandates and will review how the suing policies in concert with the president’s second wife, in 2008; one child, Ellyn, ’ regulatory regime matches up priorities. But OIRA administrators also tra- with first wife, Lisa Ruddick with European policy. ditionally have discretion to flesh out details Education: A.B., , 1975; J.D., Harvard Law School, 1978 with agency heads, especially on lower-profile Sizing Up Regulatory Burdens rules. Career: Clerk for Massachusetts Sunstein has said that agencies may regu- OIRA’s wonky handiwork can also be a very Supreme Court Justice Benjamin late even when costs are higher than benefits, Kaplan, 1978-79, and for Supreme powerful tool in a modern president’s political but he also often notes regulation’s burden. Court Justice , arsenal, since it occurs beyond the often harsh In 2004, for example, he published a critique 1979-80; attorney-adviser in the scrutiny of congressional debate. While Obama Justice Department’s Office of Legal in the New of a book coauthored enjoys strong Democratic majorities in both Counsel, 1980-81; professor at the by Heinzerling, “Priceless: On Knowing the chambers of Congress, he is also likely to insti- Law School from Price of Everything and the Value of Noth- tute some significant policies via rulemaking 1981 to 2008 and in the university’s ing,” which savaged her view that “better safe rather than forcing tough congressional votes. Department of Political Science begin- than sorry” is the best guiding principle in What’s more, OIRA will be quite busy in the ning in 1983; visiting professor at environmental regulation. Sunstein called months ahead conducting regulatory reviews in 1986 and at that principle “worse than unhelpful; it is ut- of Bush policies that Obama wants to reverse Harvard Law School in 1987; returned terly incoherent.” and resolving unfinished regulatory business to Harvard Law in 2008; nominated Keeping some medicines off the market for OIRA administrator by President bequeathed by the Bush White House — in because of their safety risks might prevent Obama in January 2009. environmental affairs, most notably. some deaths, but lead to others, Sunstein Sunstein is prolific, with more than 450 wrote in his review of “Priceless.” Likewise, academic publications and books to his name. creased regulation, because Obama has clearly he has suggested that banning genetically His views don’t skew clearly in any single ide- signaled that he regards OIRA’s mandate as a modified food might prevent some unknown ological direction; he advocates for greater work in progress. When Obama called for a risk, but introduce other risks by limiting the aid to the poor, for example, but via indirect new approach to regulatory review, he used food supply. More-fuel-efficient cars might mechanisms such as tax credits. Some of his words that suggested more than cosmetic lead to vehicles that are lighter and less safe work seems intentionally provocative — for tweaks. Revoking the earlier Bush process than gas-guzzlers, he wrote — or else make example, he published an article last year in restored the regulatory regime handed down cars so costly that more people would hang the Virginia Law Review called “Is OSHA Un- from President Bill Clinton — which Obama onto older models. constitutional?” also intends to review. Advocates such as Heinzerling “do not suf- Sunstein’s latest book, which draws from In a memo to the heads of Cabinet-level ficiently appreciate the risk that expensive the increasingly popular discipline of behav- agencies, Obama said that since the Clinton regulation will actually hurt real people,” Sun- ioral economics, is titled: “Nudge: Improving policy was created in 1993, much has been stein wrote. “Most of the time environmental Decisions About Health, Wealth, and Hap- learned about when regulations are justified questions do not involve evildoers or sins. piness.” In it, he argues that people in power and what works. In his directive to OMB, They involve complex questions about how can shepherd the public toward preferred out- Obama singled out issues that he wants ex- to control risks that stem both from nature comes without having to resort to top-down amined, including how OIRA interacts with and from mostly beneficial products, such as mandates. Instead, he says, policy should aim agencies it oversees, ways to speed up the automobiles, cell phones, household appli- for favored results as the most attractive in a process of writing regulations, and the role of ances, and electricity,” he wrote. range of options. cost-benefit analysis and behavioral sciences, Sunstein’s allies suggest that he will bring a “Some groups claim he’s not progressive two areas of Sunstein’s expertise. pragmatic, hard-nosed outlook to an Obama enough because he believes in economics,” The president wants “a process that bases White House that will be struggling with how said Kip Viscusi, an economist at Vanderbilt decisions on solid information and analysis best to make good on pledges to transcend University who devised a measure for valu- of what’s in the best interests of the country,” former partisan rancor and institute real- ing a life that has been widely employed in said OMB spokesman Tom Gavin. But by world solutions to urgent policy questions. regulatory analysis — and widely derided by stressing cost-benefit analysis as a key part of Sunstein knows “you have to understand the liberals. “The fact that people think he’s will- the process, Sunstein could end up echoing consequences between difficult choices,” said ing to look at costs and benefits to determine some of Graham’s agenda for OIRA. Revesz. “He’ll be focused on making the choice what most advances society’s interest is ex- Sunstein and Graham became friendly that maximizes social welfare as opposed to actly what you’d want that person to do based years ago when Graham directed the Harvard some ideological predisposition.” n on the job,” Viscusi said. “The groups are not Center for Risk Analysis. Graham, who has criticizing Sunstein, but the position itself.” spoken with Sunstein since the election and For Further Reading: Regulatory policy, calls him “fabulous,” predicts Sunstein will CQ Weekly, p. 24; Obama nominations, p. A Mandate for Review play a major role in consumer issues, par- 214; regulation in a global economy, 2008 The question of Sunstein’s allegiances is es- ticularly in policies affecting food, drug safety, CQ Weekly, p. 1472; Bush regulatory agenda, pecially charged for the liberal advocates of in- auto safety and housing. Graham anticipates 2007 CQ Weekly, p. 450.

294 CQ WEEKLY | February 9, 2009 | www.cq.com