March 12, 2002
OMB Uses Questionable Tactics to Weaken and Block Safeguards, Thwart Congress
Agency is Poised to Overturn Years of Study to Help Regulated Industries, Public Citizen President Tells Lawmakers
WASHINGTON, D.C. ? A White House office is using questionable economic tactics to transform itself into a chokepoint for public health and environment safeguards, weakening or killing essential rules that are opposed by regulated industries, Public Citizen?s president told lawmakers today.
In doing so, the agency ? the Office of Information and Regulatory Affairs (OIRA), which is part of the White House Office of Management and Budget (OMB) ? threatens to overturn years of study, testing, research, analysis and public input that went into the crafting of rules to address long-standing problems. In doing so, it is thwarting the intent of Congress, which has never given this power to the agency and often has mandated that public health and safety should be placed above cost.
OIRA is doing this using regulatory accounting, which estimates the costs of proposed rules and compares them to the dollar amount of benefits, which are calculated by translating the prevention of human injury or death into dollars and cents. This methodology, though, is flawed because it is limited by the available data ? garbage in means garbage out. Numbers can be easily manipulated toward a specific outcome, and the technique fails to document the public value of advances in the overall quality of life. Because of assumptions and available data plugged into the equation, these techniques tend to overestimate costs while underestimating benefits.
“It is outrageous that government would abandon its rightful role in providing a balance to market excesses, and collude in a form of bean-counting that systematically indulges an undue deference to corporate profits, while making little attempt to investigate, catalog or fund the collection of the real-world benefits of regulations,” Claybrook said. She testified before the House Committee on Government Reform?s Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs. “Most importantly, cost-benefit calculations abstractly ignore the human values we all treasure.”
In its annual report to Congress submitted in December, which was the subject of the committee?s hearing, OIRA listed 23 rules that it thinks agencies should change or rescind. The vast majority of the recommendations came from industry-funded front groups, Claybrook told lawmakers.
Rules currently on OIRA?s chopping block include a standard for acceptable limits of arsenic in drinking water, a medical records privacy rule and Clean Air Act provisions requiring new power plants to install pollution control equipment when they are built and old facilities to install pollution-reducing equipment when they expand their operations in a manner that increases pollution emission significantly.
OIRA has required agencies to reconsider data that it had already disregarded as scientifically unhelpful or flawed, Claybrook said. Nevertheless, the OIRA report shows year after year that benefits exceed costs, making health, safety and environmental regulation one of the nation?s best bargains.
OIRA is run by John Graham, who has a long history of using economic tools that are intrinsically biased toward industry. Before being appointed as OIRA administrator last year after a controversial nomination battle, Graham was director of the Harvard Center for Risk Analysis, which conducted research that generally drew conclusions favorable to the industries that funded the center, particularly the auto and chemical industries.
“We are deeply concerned that, in defiance of both express and implicit directions from Congress, an unaccountable OIRA will be able to overturn years of investment by the public, stakeholders, scientific experts and the agencies,” Claybrook said.
Claybrook also gave lawmakers a copy of a letter she sent Monday to Graham excoriating him for the flawed reasoning he used to block a sound rule that would allow consumers to monitor the pressure of their tires. In that case, Graham ignored extensive research conducted by the National Highway Traffic Safety Administration (NHTSA), which proposed that auto manufacturers be required to put direct monitoring systems in vehicles. Graham, though, insisted the agency permit either direct or indirect tire pressure monitoring systems. The indirect system ? which Graham calls a “one-tire standard” ? is far less effective than a direct one, since all vehicles have four tires that need monitoring.