Here's an OMB Watch update on President Bush's recent changes to the regulatory process and Congress's efforts to stop them:

Congress Fails to Mitigate Executive Order's Damaging Impacts

In January, President Bush made significant changes to the regulatory process by issuing Executive Order 13422. (Click here for background.) Since then, OMB Watch has voiced its opposition to E.O. 13422 for three primary reasons:

• It requires agency regulatory policy officers to be presidential appointees and gives them new power to start and stop regulations.
• It shifts the focus for promulgating regulations from the identification of a problem like threats to public health to the identification of a "specific market failure."
• It allows the White House to exert control over agency guidance documents — subjecting a new class of information to political considerations and possible delay.

On June 28, the House passed the Financial Services and General Government Appropriations Act, FY 2008, and included an amendment which would have prevented the White House from spending money to implement any part of E.O. 13422. Although the bill would not have fully countered the E.O.'s effects, it would have eliminated some White House interference in agencies' work this year. The amendment was offered on the House floor by Reps. Brad Miller (D-NC) and Linda Sanchez (D-CA).

The inclusion of Miller and Sanchez's amendment created a golden opportunity for the Senate to follow suit and pass a defunding provision of its own. OMB Watch asked you to contact your senators and urge them to pass such a provision and send a clear signal to Bush that his attempts to erode our public safety net would not go unnoticed.

And you responded whole-heartedly. More than 2,000 citizens sent emails through our website to their senators. A similar effort by the Union of Concerned Scientists, a nonprofit group that advocates for scientific integrity in public policy, generated more than 10,000 phone calls.

However, the Senate never debated or voted on their version of the Financial Services appropriations bill. Congress was unable to complete its work on individual appropriations bills and instead, resorted to a consolidated, or omnibus, bill in order to avoid a government shut down.

Unfortunately, when preparing the omnibus bill, the Democratic leadership decided to remove the Miller/Sanchez provision in spite of the thousands of citizens who had called on their representatives to take action. The omnibus appropriations bill cleared both the House and Senate, and is expected to be signed by the president this week.

OMB Watch is disappointed that Congress was unable to combat Bush's efforts to expand White House interference in the regulatory process. On the amendment defunding E.O. 13422 (along with a number of other contentious provisions), the Democratic leadership lacked the broad congressional support necessary to overcome the Bush administration's attacks on the regulatory process.

What's next?
OMB Watch will continue to monitor developments on E.O. 13422 and look for ways to oppose it whenever possible. Your voice will continue to be critical in proving public opposition to Bush's changes and calling on Congress to create a more responsive regulatory system that reflects the positive role government can play in our society. Thank you for your continued support.

On Monday, federal agencies released their semiannual Unified Agenda of regulatory and deregulatory actions. The fall version of the Unified Agenda also includes agencies' annual Regulatory Plan.

The Unified Agenda lists all of the rules an agency is in the process of considering. It also lists regulatory actions completed since the last Unified Agenda and potential long-term actions.

The Regulatory Plan includes only the most important actions an agency is considering and includes a more detailed description of those rules and regulations. Entries in both the Unified Agenda and Regulatory Plan include timetables for completion of rules.

This year, the Unified Agenda has gone paperless. Instead of being published in the Federal Register, Unified Agenda entries are now available in a searchable database housed at RegInfo.gov, a website run by the General Services Administration and OMB. Since the Unified Agenda has gone paperless, you will also be unable to find entries in the PDF version of the Federal Register on the Government Printing Office website.

The more-detailed Regulatory Plan is still being published in the Federal Register. Also, if a rule is expected to have an impact on a substantial number of small businesses, (even if it is not included in the Regulatory Plan,) it must still be published in the Federal Register. (The Regulatory Flexibility Act requires agencies to publish these kinds of rules in the Federal Register.)

A GovExec.com article says the shift to online publication of the Unified Agenda will save the government $800,000. Also from the article:

"The Unified Regulatory Agenda and annual Regulatory Plan will be more accessible on the Internet in an enhanced user-friendly, searchable database format," said Susan Dudley, administrator of OMB's Office of Information and Regulatory Affairs. She said that in addition to improving transparency, the transition should "increase the public's access to the rule-making process."

Kudos to the government officials responsible for making this switch. Reg•Watch hopes they continue to find ways to use technology to make the regulatory process more accessible to the public.

Friday, Reps. John Dingell and Bart Stupak wrote to EPA administrator Stephen Johnson asking about the agency's transparency policies. The congressmen point out that previous EPA administrators have issued memos outlining proper transparency measures for agency activity but that Johnson has not.

Dingell and Stupak do not identify any specific points of opacity or examples of EPA cover-ups; but one issue piqued Reg•Watch's interest. In their final question to Johnson (to which they request responses by Dec. 17), the congressmen ask the following:

Administrators [Lee] Thomas and [William] Reilly also stated that "procedures have been established with OMB to ensure that such material received by OMB from outside parties will be placed in the EPA public record." What specific procedures are in place in this Administration to ensure that materials from outside parties received by OMB on EPA rules are placed in the EPA public record? Please provide a copy of any documents that describe these procedures.

For EPA's current revision to the national standard for ozone pollution, EPA's online docket does contain two letters sent to then-OMB Director Rob Portman from the Utah Manufacturers Association and the Mississippi Manufacturers Association. (Incidentally, both groups lobbied against a tighter standard, and the White House has worked to undermine scientific evidence in favor a stricter regulation.)

EPA is right to post such information. Laudably, EPA has also posted correspondence between OMB and agency officials. However, without knowing EPA's policy on transparency, we do not know whether the agency has posted all relevant information.

Reg•Watch will be interested to see if EPA is fully disclosing communications with OMB. Public access to these correspondences is important because, as we have seen all too often, OMB's Office of Information and Regulatory Affairs can influence or materially alter the policies of EPA and other agencies.

Reg•Watch often complains about the flaws of cost-benefit analysis and the overemphasis policy makers place on it as a tool in decision making. However, when discussing cost-benefit analysis in the abstract, it is difficult to show the practical problems associated with its use.

For a case example showing just how problematic cost-benefit analysis can be, read OMB Watch's new analysis, Polluted Logic: How EPA's ozone standard illustrates the flaws of cost-benefit analysis in regulatory decision making.

Polluted Logic tracks EPA's current revision of the national standard for ozone and shows how the use of cost-benefit analysis in the rulemaking has been useless to policy makers and has only complicated the debate over whether to tighten the standard.

As the paper discusses, EPA's ozone standard serves as a case example of some of the big problems with cost-benefit analysis in regulatory decision making:

• Cost-benefit analysis is problematic for health, environment, civil rights, and safety rulemakings because of the magnitude of intangible and invaluable benefits;
• Cost-benefit analysis often runs counter to congressional intent expressed in federal law; and
• Cost-benefit analysis allows the White House Office of Information and Regulatory Affairs to manipulate regulations to serve an intended ideological agenda.

Download the paper here: Polluted Logic: How EPA's ozone standard illustrates the flaws of cost-benefit analysis in regulatory decision making.

In September, Reg•Watch blogged about a New York Times article highlighting a recent trend in which businesses are asking the federal government to regulate them. In some cases, the businesses' intentions seem good. In other cases, the requests may be nothing more than political maneuvering.

An article in yesterday's Times revisits the latter of those two cases:

Business lobbyists, nervously anticipating Democratic gains in next year's elections, are racing to secure final approval for a wide range of health, safety, labor and economic rules, in the belief that they can get better deals from the Bush administration than from its successor.

The article mentions a number of rules that may prove to be battlegrounds including vehicle safety standards, mountaintop mining, and family-related medical leave.

Randel K. Johnson, a vice president for the U.S. Chamber of Commerce, made no bones about the intentions of his group. Speaking of industry-supported changes to federal medical leave policy, he said, "We want to get this done before the election," adding, "The next White House may be less hospitable to our position."

There are a number of ways industry interests looking for watered down regulations can take advantage of the current administration. A major one is by funneling their views through the White House Office of Information and Regulatory Affairs (OIRA).

OIRA reviews major agency regulations and proposals, and often solicits the opinions of outside stakeholders in the process. Unfortunately, these meetings occur behind closed doors, with no public disclosure of what was discussed. Under the Bush administration, the White House has frequently brought in industry representatives opposed to the regulations OIRA is reviewing. (See here and here for recent examples.)

This is definitely something to watch out for in the year to come.