Sunday, January 11, 2009

Sunstein on Risk, Reason and Reviewing Rulemakings

The Center for Progressive Reform (CPR), among others on the left, seem poised to oppose the Sunstein nomination to lead the Office of Information and Regulatory Affairs (OIRA). This is OK as far as it goes, but it could easily jump the tracks and get silly. OIRA is an über-agency in the executive branch, reviewing rulemakings of other “action” agencies far and wide. Every issue it touches is serious and most are very difficult.

In my own field (environmental law), OIRA has often opposed rules with reasons I’ve found weak-to-ridiculous. But when the fight over Sunstein gets going, it’s likely to include non-issues like the conduct of cost-benefit analysis (CBA) in rulemaking at all. The conduct of CBA isn’t worth fighting over. It isn’t going to be abolished. Period. Sunstein’s been a champion of mending CBA, but he’s attacked rulemakings like arsenic’s parts per billion in drinking water that many on the left thought fully cost-justified. That’s his baggage. But we should keep things in perspective. Back when the arsenic-in-drinking-water controversy was on, U. of Texas lawprof Tom McGarity had this to say.

Ultimately, the source of Professor Sunstein’s unwillingness to abandon the paradigm altogether is his profound and abiding lack of confidence in the capacity of an uninformed and simpleminded public to make wise decisions about the magnitude of health, safety, and environmental risks, and the steps that should be taken to reduce those risks.

All I can say in response to McGarity is, “well, yes—because the very same citizenry has voted to delegate such power out of their own hands consistently for almost a century.” I don’t agree with everything Sunstein has said on CBA over the years, I confess. But that is very different from saying that I think he is methodologically or fundamentally misguided. And so to those who “oppose” CBA root and branch, my question is: what would you have our agencies do? CBA in regulatory contexts is, I’m afraid to tell you, genetically encoded within the agencies themselves. Some just do it more seriously than others. And, in actuality, several targeted reforms in the rulemaking process would be real improvements. Think tanks on the left like CPR need to find a more constructive stance than simple “opposition” to CBA. (Sid Shapiro and Chris Shroeder’s recent piece here is, I think, aiming them in that direction, although only very qualifiedly.)

Their tack has shifted subtly in recent years to a ‘rule of law’ argument: Congress never meant to permit CBA when it legislated our modern regulatory edifice in the first place. But the argument boils down to this: statutes like the Clean Air Act delegated huge economic and societal risk balancing choices to expert agencies but assumed they would just do a better job than average people of “eyeballing” the choices. And this is absurd. The whole point of delegating such choices to bureaucracies is to straighten and quantify them to the maximum possible extent. The rule of law argument really only works when there is affirmative evidence that Congress meant to prohibit CBA in the statutory trigger at issue. And those are the exception.

Sunstein’s most recent opus—arguing that the OSH Act of 1970 is unconstitutionally vague—is perhaps more worrisome than his work on CBA proper. I’m dubious that the OSH Act is any more vague than the Clean Air Act and the conservative Rehnquist Court rejected a big delegation doctrine challenge to it in 2001—nine to zip. Perhaps having an OIRA administrator who usurps the action agency’s power to interpret its statute is something worth worrying about. But taking Sunstein’s piece to mean he’s against workplace safety regulations would be fatuous. Look at what OSHA’s been able to do with its meaningless statute in 40 years. The scholars at CPR can attest to OSHA’s haplessness and paralysis. They’ll say its OIRA’s fault—but, the fact is, OIRA can’t bottleneck a rule except in a vacuum of guidance from the governing statute. In the world as it is, OSHA spends a lot of money and has perfected flyspecking while it ignores tragically significant risks. One possible fix might just be to reboot, honestly.

Sunstein’s confirmation should focus on real questions because this office is incredibly important. (And it’s not often a President has moved so quickly to install an OIRA chief.) Those on the left will have the most to do with whether that happens or not.

Posted by Jamie Colburn

12 comments:

  1. Doubtful that opposition to the Sunstein nomination will work. Congress is too feckless. My concern is less that Sunstein gets an appointment with which he can undercut all manner of regulation for the next few years and more that this puts an eager corporatist that much closer to the Supreme Court.

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  2. Although Sunstein's article is titled "Is OSHA Unconstitutional?," it doesn't exactly conclude that the answer is yes. Sunstein merely says that the statute could be subject to a plausible non-delegation challenge (although I think I agree with Jamie on this one that the current non-delegation doctrine is sufficiently toothless that the challenge would fail). He then says that to avoid invalidating the law, courts should construe it to require CBA. And here is where Jamie's point is surely right: That's a fairly unobjectionable proposition, at least stated this way. Occasionally agencies do not expressly engage in CBA, or even assert that they can't, but as a practical matter, no administrator--indeed no sane person--doesn't engage in some sort of CBA, at least tacitly. Consider: Should I buy a new Lamborghini? Its benefits are that it goes really fast and looks really cool. Costs? I don't DO costs. Okay, I'll buy it. See? Ridiculous.

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  3. Making Jamie's and Mike's point somewhat differently, I'd suggest that the problem here is that people are simultaneously using the term "cost-benefit" analysis to mean something very specific and something very general.

    The left (for many good reasons) has a problem with the specific version that the Reagan-inspired crowd embraces. Unfortunately, lefties couch their arguments in general terms that undermine their credibility.

    Because CBA in its general form is completely open with regard to what to include and exclude from costs and benefits, there is always a "rigorous" (i.e., mathematically unassailable) cost-benefit analysis to support any policy outcome.

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  4. As a member of CPR I can tell you that CPR has no plans to oppose Cass Sunstein's nomination, but is considering engaging in some kind of dialogue on pertinent issues. There are alternatives to cost-benefit analysis, for example feasibility analysis. See David M. Driesen, Distributing the Costs of Environmental, Health and Safety Protection: The Feasibility Principle, Cost-Benefit Analysis, and Regulatory Reform, 32 B. C. ENVTL. AFF. L. REV. 1 (2005).

    I don’t agree that CBA is permitted except in cases where it’s expressly prohibited. To the contrary, as the Court recognized in the Cotton Dust case and more generally in American Trucking, where Congress has listed factors for agencies to consider, and CBA is not among them, then considering CBA is inappropriate. Of course, the love of CBA may cause the Court to change its doctrine.

    The notion that OIRA can’t bottle a rule except when the governing statute fails to give guidance belies history. What OIRA can and can’t do has a lot more to do with the politics of an administration then with the degree of specificity about a rule’s content in the statute. In any case, OIRA has a long history of weakening rules, not just bottling them up. Still, I’ve never heard anybody at CPR blame OSHA’s failure entirely on OIRA, as a variety of institutional failures have led to its demise.

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  5. My thanks to David for his comments. Two quick points of response. First, the Cotton Dust case and Clean Air Act Section 109 both confirm my general point which is that, generally speaking, unless there is affirmative statutory evidence that CBA (of the general sort that Neil describes) should not be conducted, it is precisely what most action agencies themselves will do to decide and what OIRA will do under governing Executive Orders (going back to Reagan's 12291, but including every administration since). In the Section 109 context, for example, it was EPA that originally interpreted the factored analysis in 109 to prohibit considerations of cost or feasibility--a move EPA used to dodge a particularly dangerous political bullet (balancing lives lost versus tiny amounts of lead in the ambient air). After the D.C. Circuit deferred to EPA's interpretation of the statute in a case called Lead Industries, it then became bedrock law of the Clean Air Act that EPA could not consider costs in setting national ambient air quality standards. But that is very different from saying that, generally speaking, the presumption is the other way around on the legality of considering costs in risk regulation standard-setting.

    On OIRA obstructionism, there is no more potent cure of which I am aware than a statute that lays out very particularly which agency official must decide, according to what factors of choice, and on what timetable. All the green eye shades money can buy at OIRA can't touch a rule-making agency protected by statutes that preclude them from doing so where the agency officials have, themselves, done the statute's bidding.

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