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Overview
As OIRA Administrator, Sunstein helped oversee regulation in a broad variety of areas, including highway safety, health care, homeland security, immigration, energy, environmental protection, and education. This background allows him to describe OIRA and how it works—and how it can work better—from an on-the-ground perspective. Using real-world examples, many of them drawn from today’s headlines, Sunstein makes a compelling case for improving cost-benefit analysis, a longtime cornerstone of regulatory decision-making, and for taking account of variables that are hard to quantify, such as dignity and personal privacy. He also shows how regulatory decisions about health, safety, and life itself can benefit from taking into account behavioral and psychological research, including new findings about what scares us, and what does not. By better accounting for people’s fallibility, Sunstein argues, we can create regulation that is simultaneously more human and more likely to achieve its goals.
In this highly readable synthesis of insights from law, policy, economics, and psychology, Sunstein breaks down the intricacies of the regulatory system and offers a new way of thinking about regulation that incorporates human dignity– and an insistent focus on the consequences of our choices.
Product Details
| ISBN-13: | 9780226780177 |
|---|---|
| Publisher: | University of Chicago Press |
| Publication date: | 09/05/2014 |
| Pages: | 240 |
| Product dimensions: | 6.10(w) x 9.10(h) x 1.10(d) |
About the Author
Read an Excerpt
Valuing Life
Humanizing the Regulatory State
By Cass R. Sunstein
The University of Chicago Press
Copyright © 2014 The University of ChicagoAll rights reserved.
ISBN: 978-0-226-78017-7
CHAPTER 1
Inside Government
The Office of Information and Regulatory Affairs (OIRA), a part of the Office of Management and Budget (OMB), has become a well-established, often praised, and occasionally controversial institution within the federal government. OIRA was initially created in 1980 by the Paperwork Reduction Act, with the particular responsibility of approving (or disapproving) information collection requests from federal agencies. In one of his early actions, taken less than a month after assuming office, President Ronald Reagan gave OMB an additional responsibility, which is to review and approve (or decline to approve) federal rules from executive agencies, after careful consideration of costs and benefits.
Within OMB, that responsibility is exercised by OIRA. A primary goal of the OIRA process is to improve regulations by ensuring careful consideration of their likely effects before they are issued. The human consequences of federal rules are a central focus of OIRA review.
But what is the OIRA process actually like? How does that important part of government actually work? What is the purpose of the process? Even among close observers—in the media, in the business and public interest communities, and among academics, including professors of economics, political science, and law—the role of OIRA remains poorly understood. The misunderstandings are important, because they reflect a failure to appreciate the operations not only of the Executive Office of the President, but of the federal government as a whole.
My primary goal in this chapter is to dispel current misunderstandings. One of my central themes is that OIRA helps to collect widely dispersed information—information that is held throughout the executive branch and by the public in general. OIRA is largely in the business of helping to identify and aggregate views and perspectives of a wide range of sources both inside and outside the federal government. We shall see that while the President is ultimately in charge, the White House itself is a "they," not an "it." Outside of the White House, numerous agencies are also involved, and they may well be the driving forces in the process that is frequently misdescribed as "OIRA review." It would not be excessive to describe OIRA as, in large part, an information aggregator.
For example, the Department of Agriculture knows a great deal about how rules affect farmers, and the Department of Transportation knows a great deal about how rules affect the transportation sector, and the Department of Energy knows a great deal about implications for the energy sector. The OIRA process enables their perspectives to be brought to bear on rules issued by other agencies. Part of OIRA's defining mission is to ensure that rulemaking agencies are able to receive the specialized information held by diverse people (usually career officials) within the executive branch.
Another defining mission is to promote a well-functioning process of public comment, including state and local governments, businesses large and small, and public interest groups. OIRA and agencies work together to ensure that when rules are proposed, important issues and alternatives are clearly and explicitly identified for public comment. OIRA and agencies also work closely together to ensure that public comments are adequately addressed in final rules, often by modifying relevant provisions in proposed rules. Indeed, a central function of OIRA is to operate as a guardian of a well-functioning administrative process, to ensure not only respect for law but also compliance with procedural ideals, involving notice and an opportunity to be heard, that may not always be strictly compulsory but that might be loosely organized under the rubric of "regulatory due process." Indeed, OIRA helps to promote a system of deliberative democracy, which is a crucial safeguard against error.
In explaining these points, I emphasize four propositions that are not widely appreciated and that are central to an understanding of OIRA's role. These propositions will arise at various points in the discussion, and it will be useful to identify them at the outset.
1. OIRA helps to oversee a genuinely interagency process, involving many specialists throughout the federal government. OIRA's goal is often to identify and convey interagency views and to seek a reasonable consensus, not to press its own positions. While OIRA's own views sometimes matter, OIRA frequently operates as a conveyer and a convener. The heads of the various departments and agencies are fully committed to the process, and they play a crucial part in it. They understand, and agree, that significant concerns should be heard and addressed, whether or not they are inclined to agree with them.
2. When a proposed or final rule is delayed, and when the OIRA review process proves time consuming, it is usually because significant interagency concerns have yet to be addressed. Frequently there will be general agreement that a rule is a good idea, and the delay will be a product, not of any sense that it should not go forward, but of a judgment that important aspects require continuing substantive discussion. The relevant concerns may be highly technical; they may, for example, involve a complex question of law, or one or several provisions that are difficult to get right. One goal is to ensure that if a rule is formally proposed to the public, or finalized, it does not contain a serious problem or mistake. A final rule containing a problem or mistake creates obvious difficulties, perhaps above all if it is a mistake of law. But (and this is a more subtle point) even a proposed rule can itself significantly alter people's behavior, and thus create difficulties as well, if people believe that it is likely to be finalized in the same form.
3. Costs and benefits are important, and OIRA (along with others in the Executive Office of the President, including the Council of Economic Advisers and the National Economic Council) does focus on them, but they are not usually the dominant issues in the OIRA process. Especially for economically significant rules, the analysis of costs and benefits receives careful attention. To the extent permitted by law, the benefits must justify the costs, and agencies must attempt to maximize net benefits. But most of OIRA's day-to-day work is usually spent, not on costs and benefits, but on working through interagency concerns, promoting the receipt of public comments (for proposed rules), ensuring discussion of alternatives, and promoting consideration of public comments (for final rules). OIRA also engages lawyers throughout the executive branch to help resolve questions of law, including questions of administrative procedure.
4. Much of the OIRA process involves high-stakes issues with technical dimensions. OIRA may seek, for example, to ensure careful consideration of the views of the Department of Justice on a legal issue, or of the views of the US Trade Representative on an issue that involves international trade, or of the views of the Department of Homeland Security and the National Security Council on an issue with national security implications, or of the views of the Department of Energy on the effects of a rule on the energy supply. In such cases, career officials, with technical expertise, are frequently the central actors. When rules are delayed, it is often because technical specialists are working through the technical questions. Much of the time, the problem is not that OIRA, or anyone else, has a fundamental objection to the rule and the agency's approach. It is that the technical questions need good answers.
In light of these points, my broadest themes here might loosely be described as Hayekian (after the great economist Friedrich Hayek), Frankfurterian (after the great American Supreme Court Justice Felix Frankfurter), and Millian (after the great social theorist John Stuart Mill). The Hayekian theme emphasizes the dispersed nature of human knowledge and OIRA's role in attempting to acquire as much of that knowledge as possible, above all through careful attention to public comments. The Frankfurterian theme emphasizes the importance of fair process, in the particular form of "regulatory due process," requiring participation by a large number of people inside and outside the federal government. The Millian theme, drawing on Mill's sympathetic but critical comments on Jeremy Bentham, emphasizes the importance of a form of utilitarian balancing (cost-benefit analysis, with commitments to ensuring that the benefits justify the costs and to maximizing net benefits), but also the need to acknowledge that some variables are qualitatively different from others, and are not easily quantified, but nonetheless deserve to count (see chapter 3 for more details).
There is also a fourth theme, associated with Amartya Sen (alas the term Senian does not quite work), which involves the ideal of "government by discussion," and the central importance of that ideal to the avoidance of bad outcomes. Noting the importance of political accountability, and the information held by a nation's citizenry, Sen has urged that discussion and deliberation are critical safeguards against mistakes, including those that can produce widespread human suffering. As we shall see, the decision-making process within the executive branch—at least when it is working well—involves multiple forms of government by discussion.
Some necessary qualifications: This chapter is based on official documents and also on my own experiences as OIRA Administrator, and it is written with close reference to those experiences. To that extent, it has an impressionistic quality. Moreover, it is focused on practices and experiences from 2009 until August 2012. On the basis of discussions with OIRA staff and with former Administrators, I believe that the general account offered here is consistent with the practices in other Administrations. Insofar as I am stressing the role of OIRA as a convener and aggregator of information, and its attention to procedural requirements, the central claims cut across Administrations. But OIRA's practices are not identical over time, and the future may hold surprises. Other OIRA Administrators, past and future, may have somewhat different accounts and perspectives. While I do venture some evaluative comments, especially to correct misconceptions, I endeavor to make this account largely descriptive and free of evaluations, whether positive or negative. A full evaluation of OIRA's role, once it is accurately understood, is a matter for a separate occasion.
Importantly, my focus is not on OIRA in general, but narrowly on the process for the review of rules. Insofar as OIRA has other important functions, including helping to establish regulatory priorities and principles, I shall not discuss those functions here. Nor shall I be exploring (at least not in any detail) the role of other offices within the Executive Office of the President, which also help work closely with agencies, and which sometimes play an important part in the rulemaking process.
Reviewing Rules: The OIRA Process
I have suggested that OIRA helps to oversee an interagency process, and that when the review process is lengthy or complicated, it is often because of continuing discussions by participants in that process. I have also said that the process can be highly technical. To understand these claims, it will be useful to describe how the process works, with an emphasis on the actual mechanics.
BASICS
To begin with some basics, OIRA consists of about forty-five people, almost all of them career staff. They work in a number of "branches," covering different agencies and areas. Each of the branches has a number of "desk officers," all with substantive expertise in one or more areas, and each with primary responsibility for particular agencies. For example, specified desk officers will generally handle regulatory actions from the Department of Homeland Security, the Department of Justice, or the Food and Drug Administration. Each branch is managed by a "branch chief," a member of OIRA staff with a great deal of experience and expertise. Desk officers are carefully supervised by branch chiefs, who give them detailed advice on how to review regulations. OIRA reviews several hundred regulatory actions every year.
OIRA is headed by an Administrator, who is confirmed by the Senate and who works under the Director of the Office of Management and Budget. OIRA's Deputy Administrator, who helps to manage the office and offers indispensable advice on a wide range of subjects, is nonpolitical. In the Obama Administration, OIRA has also had an Associate Administrator and a Chief of Staff, political appointees who are part of OIRA's leadership. OIRA may work closely with others in the Office of Management and Budget, including the five Resource Management Offices, which help to oversee the allocation of federal funds and which may have important perspectives on questions of policy. For example, OMB's Health Division has a great deal of expertise on health care questions, especially to the extent that they affect the budget. If those within OMB have serious concerns about a rule, those concerns will receive attention, and OIRA will work closely with the rulemaking agency to see whether and how they might be best addressed.
Insofar as it reviews rules, OIRA's central responsibilities are defined by Executive Order 13563, issued by President Obama in 2011, and by Executive Order 12866, issued by President Clinton in 1993. Executive Order 12866 establishes the central requirements for agencies and OIRA alike. Executive Order 13563—a document of signal importance in the Obama Administration, indeed a kind of mini-constitution for the regulatory state, and one whose fundamental orientation has strong Millian features—reaffirms and incorporates Executive Order 12866. Significantly, it specifically quotes a number of provisions relating to cost-benefit balancing, with close reference to the human consequences. Perhaps most important, it states that each agency must, to the extent permitted by law
propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity).
At the same time, Executive Order 13563 introduces several new principles and requirements, involving public participation; integration and coordination of regulatory requirements, designed to reduce overlap and inconsistency; consideration of flexible approaches, designed to promote freedom of choice; and scientific integrity, designed to separate purely scientific judgments from judgments of policy or politics. These principles and requirements play a significant role in agency thinking and in OIRA review.
After a rule is formally submitted, OIRA has ninety days to review it unless an extension is given. Before or after the expiration of the ninety-day period, OIRA may (1) "conclude review," after which the rule is published in the Federal Register, either with or without change; (2) return the rule to the agency for reconsideration via a formal "return letter"; (3) encourage the agency to withdraw the rule in light of interagency concerns; (4) work with the Director of OMB to obtain an extension of up to thirty days; (5) work with the agency to obtain an extension of whatever length it deems appropriate. OIRA's authority to issue return letters is exceedingly important, because it means that OIRA can effectively prevent rules from being issued. But OIRA will not issue any such letter without agreement from a wide range of offices within the Executive Office of the President, and hence a return letter is hardly OIRA's alone.
The vast majority of rules proceed through the process within the ninety-day period, and they are generally changed (and improved) as a result. For example, OIRA reviewed 2,304 regulatory actions between January 21, 2009, and August 10, 2012. In that period, 1,758, or about 76 percent, were approved "consistent with change," whereas 320, or about 14 percent, were approved without change; 161, or 7 percent, were withdrawn. In assessing the importance of review, it is important to be cautious about the percentage of rules that are approved "consistent with change." Those words reveal that the published rule is different from the submitted rule, but they do not specify the magnitude of the changes. In some cases, the changes are minor, perhaps even cosmetic; in others, they are substantial. The designation "consistent with change" is consistent with either possibility.
(Continues...)
Excerpted from Valuing Life by Cass R. Sunstein. Copyright © 2014 The University of Chicago. Excerpted by permission of The University of Chicago Press.
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Table of Contents
INTRODUCTIONFranklin’s Algebra
ONE
Inside Government
TWO
Human Consequences, or The Real World of Cost-Benefit Analysis
THREE
Dignity, Financial Meltdown, and Other Nonquantifiable Things
FOUR
Valuing Life, 1: Problems
FIVE
Valuing Life, 2: Solutions
SIX
The Morality of Risk
SEVEN
What Scares Us
EPILOGUE
Four Ways to Humanize the Regulatory State
APPENDIX A
Executive Order 13563 of January 18, 2011
APPENDIX B
The Social Cost of Carbon
APPENDIX C
Estimated Benefi ts and Costs of Selected Federal Regulations
APPENDIX D
Selected Examples of Breakeven Analysis
APPENDIX E
Values for Mortality and Morbidity
Acknowledgments
Notes
Index