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Cass Sunstein’s OIRA: The Most Powerful Regulation-Smiting Agency You’ve Never Heard Of

NPR pulled back the curtain yesterday on OIRA, the backwater office of regulatory affairs that holds an effective veto over any regulations promulgated by the Administration. The report found that throughout the Obama Administration, the office has altered more regulations coming to them from federal agencies than the Bush Administration ever did.

There are a few reasons for this. One, the Bush Administration put anti-regulatory types at all the regulatory agencies and they simply didn’t send over a lot of regulations to OIRA. So it didn’t have to act as an enforcer, per se. Another reason is that Cass Sunstein is running the office. And he has a very specific worldview when it comes to regulations that cuts against what the federal agencies are trying to do. But the main reason is that OIRA is simply built to be a regulation-killer.

While the rest of the public might not know about OIRA, lobbyists have the office on speed dial. Industry groups visit OIRA largely for one purpose: to reduce regulation. Steinzor’s analysis found that industry representatives outnumber public health and safety advocates by almost 4 to 1 at OIRA meetings.

Jim Tozzi helped create OIRA and worked on regulations under five presidents. He says the tilt toward industry is to be expected.

Regulations, he says, “increase the cost of industry. So they have more direct skin in the game.” In contrast, he says, environmental groups’ members “don’t have skin in the game, because they just say ‘they’ll cough their lungs out’ or something like that.”

I’m staggering from that comment, but let’s get to the data. The Center for Progressive Reform studied the records of 1,080 OIRA meetings over two Administrations. They found that OIRA changed 84% of all environmental regulations, and 65% of others, under the Obama Administration. This is an increase over the Bush Administration.

I suppose that when you have an office whose purpose is to check the work of the regulatory agencies, to justify their job they’re going to manage to come up with some changes. But there’s no question that a lot of politics are being played. The fact that Sunstein is a good buddy of the President’s from the University of Chicago days, and that he took this low-profile job to test his theories of behavioral economics on profit-seeking corporations, is a dead giveaway. Grist has the full findings of the CPR report:

Industry dominates the OIRA meetings process. OIRA makes no effort to balance its meeting schedule by hearing from even a rough equivalence of organizations supporting protective regulations. In only 16 percent of reviews involving meetings did OIRA meet with organizations from across the spectrum of interested groups, while in 73 percent OIRA met only with industry representatives. These meetings come on top of an already exhaustive public process run by the agencies themselves, involving numerous meetings before a rule proposal is even crafted, multiple rounds of public comments that give a wide range of interest groups the opportunity to file thousands of pages of advice, public hearings across the country, thousands of hours of staff work invested in reviewing the comments and either accepting or rebutting the information they contain, and — last but not least — court review for many major rules […]

OIRA routinely misses deadlines, stalling public health and safety protections. By executive order, OIRA has 90 days to review a rule, plus a possible 30-day extension. Of the 501 completed reviews in which outside parties lobbied OIRA, 59 (12 percent) lasted longer than 120 days and 22 extended beyond 180 days (about six months).

OIRA ignores public disclosure requirements. OIRA is required by executive order to make available “all documents exchanged between OIRA and the agency during the review by OIRA,” and agencies are required to “identify for the public those changes in the regulatory action that were made at the suggestion or recommendation of OIRA.” OIRA never follows those requirements, and the agencies — with the notable exception of the EPA in limited circumstances — don’t either.

The upshot of this is that regulatory policymaking has become centralized in the White House. Obama has appointed some decent regulators at the various agencies, but all of their work gets funneled through Cass Sunstein. The regulators are just trying to make do with too-small budgets to fulfill their responsibilities. They also have to constantly look over their shoulders to see how Cass Sunstein is kneecapping their recommendations. And the real-world effects of all this are huge.

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David Dayen

David Dayen