Be sure to check out the latest issue of our biweekly newsletter, The Watcher. Regulatory policy articles this time:

States Battle Administration on Vehicle Emissions

Senate Watching Carefully as Risk Guidelines Reemerge

The White House Office of Information and Regulatory Affairs (OIRA) is reviewing under Executive Order 12866 a revised air pollutant rule. The rule is the National Ambient Air Quality Standard for ozone, a.k.a. smog.

Over the past several months, Reg•Watch has been tracking the growing support for tightening this critical air pollution standard. Scientists and medical professionals have been lining up to voice their support, but EPA has been cautious in expressing its opinion on more protective smog regulation.

Considering the environmental track record of the current administration, experts are skeptical. Frank O'Donnell at Clean Air Watch is framing the revision of the standard as a science vs. politics showdown. Read his breakdown here.

OIRA should complete its review within 90 days. Reg•Watch hopes science prevails and the proposed rule calls for tighter standards. If not, who will be to blame: EPA, the White House or both?

Yesterday, Michael Baroody withdrew himself as nominee to head the Consumer Product Safety Commission (CPSC). News of the withdrawal came less than 24 hours before today's scheduled nomination hearing.

It is unclear whether the withdrawal came at the behest of the White House or was of Baroody's own accord. Either way, it is not surprising. The Senate nomination panel was preparing to grill Baroody on his ties to industry and obvious conflicts of interest.

The withdrawal is a welcome decision. Sen. Barack Obama (D-IL) put it best in today's Washington Post:

His nomination highlights yet again the need to slow a revolving door that creates conflicts of interest between government officials and the industries they're supposed to be overseeing.

But back to the matter at hand. CPSC has been without a commissioner since July, and has been without a voting quorum since January, stripping it of its ability to conduct official business.

CPSC has not produced a final rule since mid-2006. Considering President Bush took eight months to nominate Baroody after the previous commissioner left, CPSC's problem is far from solved. Bush should immediately announce a more appropriate nominee, and the Senate should begin the confirmation process posthaste.

Sens. Jeff Bingaman (D-NM) and Joe Lieberman (I-CT) sent a letter to the White House urging OMB to abandon its Proposed Risk Assessment Bulletin. Recently, the White House intimated OMB may make a renewed push on the Bulletin. Bingaman and Lieberman want to make sure the White House knows the Senate is watching.

OMB issued the Bulletin in its proposed form in January 2006. The proposal calls for a one-size-fits-all approach for agency risk assessments - a common procedure which studies the adverse effects of a wide variety of public dangers.

The criticism began flowing almost immediately. OMB Watch and Public Citizen chided the Bulletin for its inconsistency, apparent political motives, and general lack of understanding about risk assessments.

The most damning criticism came in January 2007 when the National Academy of Science rebuked OMB and called the Bulletin "fundamentally flawed." On Capitol Hill, lawmakers welcomed the NAS judgment and urged OMB to scrap the plan.

Never to be discouraged by overwhelming disapproval, the White House is considering reissuing the Bulletin with only minor changes. Susan Dudley, in an interview with BNA news service (subscription), incorrectly claimed that NAS thinks the Bulletin is a good idea and indicated she would like to move forward.

Although no formal word has come from the White House, Bingaman and Lieberman aren't taking any chances. The senators are aware of the potential implications of the Bulletin and would like to head the White House off at the pass:

Finalizing the proposed OMB guidance would impede federal agencies' ability to develop public health and environmental protections, promote public safety, encourage good business practices, improve consumer protections, and efficiently use taxpayer funds.

Read the Bingaman/Lieberman letter here.

As Reg•Watch blogged earlier, Democratic Sens. Dick Durbin (IL) and Bill Nelson (FL) sent a letter to President Bush asking him to withdraw the nomination of Michael Baroody for commissioner of the Consumer Product Safety Commission.

Separately, Nelson has threatened to put a hold on the nomination if Bush does not withdraw it. This would prevent the Senate from voting on Baroody.

A hold could have unintended consequences. As Reg•Watch blogged months ago, CPSC is operating without a voting quorum due to the commissioner vacancy. Sen. Mark Pryor (D-AR) attached to an unrelated Senate bill (S. 4) language which would extend the quorum for six months. However, the bill is stuck in conference negotiations with the House.

While the lack of a quorum does not prevent CPSC from performing its day-to-day work (most recalls are voluntary measures by manufacturers), the Commission is currently powerless in promulgating new regulations.

Baroody's industry ties make him an inappropriate choice for CPSC commissioner. But America needs a fully-functioning product safety agency.

Senate leadership and the White House need to get together and hash this out. For the reasons mentioned earlier, Baroody's nomination is already dead in the water. The White House should offer a more palatable choice, and the Senate should push to confirm the nominee in order to restore the functionality of the CPSC.

On March 1, President Bush nominated Michael Baroody to be a commissioner on the Consumer Product Safety Commission (CPSC). Many have criticized the nomination because of Baroody's record of opposing safety regulation in his role as a lobbyist for the National Association of Manufacturers (NAM).

Yesterday, Sens. Dick Durbin (D-IL) and Bill Nelson (D-FL) sent a letter to President Bush asking him to withdraw the nomination. In the letter, the Senators really brought their A-game, citing statutory criteria for the qualifications of a CPSC commissioner:

Specifically, Section 4(a) of the [Consumer Product Safety Act] states: "In making such appointments, the President shall consider individuals who, by reason of their background and expertise in areas related to consumer products and protection of the public from risks to safety, are qualified to serve as members of the Commission."

There is no evidence in Mr. Baroody's professional background to indicate that he meets these criteria. To the contrary, Mr. Baroody has worked against the "protection of the public from risks to safety" in his work for [NAM].

In the letter, we also find out that Baroody received a $150,000 severance payment from NAM. Due to ethics rules, Baroody would likely have to recuse himself from CPSC decisions involving NAM or NAM member companies. According to the NAM website, the trade organization represents thousands of manufacturers. That would mean a whole lot of recusing for Baroody.

Currently, the Senate Commerce Committee has scheduled a nomination hearing for May 24. Check back with Reg•Watch later today for more on the Baroody nomination.

Reg•Watch Update: Beneath the Politicking, a Powerless CSPC

Reg•Watch apologizes for jumping to conclusions this morning regarding the renomination of Susan Dudley. Apparently, the renomination is a paperwork requirement. The good people at Public Citizen have this to say:

The White House was forced to resubmit the nomination within 40 days of the Senate's return from the spring recess, however, in order to ensure that Dudley can be paid a salary as OIRA administrator under section 5503(a) of title 5 of the U.S. Code.

Resubmitting the nomination means that Dudley will once again be up for a confirmation hearing in the Senate and, barring any holds, a final vote on her suitability for this powerful office.

So despite Reg•Watch's earlier comments, the renomination is not a strategic power-play. It merely ensures Dudley's continuing paychecks. A thousand pardons.

This week, a number of business journals across the country are running an article titled, "New Regulatory Czar Will Have Plenty to Review," by Kent Hoover. (Here it is in the Philadelphia Business Journal.) The article spotlights Susan Dudley in her new position as administrator of OMB's Office of Information and Regulatory Affairs (OIRA).

The article's title is apropos, as a number of factors are converging to make the last two years of the Bush administration an interesting time in regulatory policy. First, President Bush's recent changes to the regulatory process will force thousands of agency guidance documents to undergo OIRA review for the first time.

Second, OIRA has been without a full-time administrator since John Graham left in February 2006. There is likely a backlog of decisions for Dudley to make.

Third, the waning years of a presidency are notorious for resulting in a surge of regulatory activity. As a president's relevance declines, there is a natural tendency to take the path of least resistance in order to leave a policy legacy. The article quotes Tom Sullivan from the SBA as equating this time to "the end of the NBA playoffs," in terms of intensity and increasing public attention.

But these two years are more likely to resemble a rugby scrum than a fast-paced NBA match-up. OIRA will maintain its resource and staff levels for the remainder of Bush's term. Meanwhile, an unprecedented amount of paperwork will descend on a hapless, under-staffed OIRA. The results won't be pretty.

"This is life — too few resources, too many things to do," Dudley says in the article. It's unfortunate how correct Dudley may be.

Yesterday, President Bush made comments in the Rose Garden concerning greenhouse gases and global warming.

In his speech, one may have expected the President to announce a new landscaping project turning the Rose Garden into the Orchid Garden due to quickly rising global temperatures. Instead, Bush announced a new Executive Order which requires collaboration among EPA, the Departments of Energy, Transportation and Agriculture, OMB, and the White House Council on Environmental Quality in pursuing new regulations on greenhouse gas emissions.

Lots of media outlets and environmental groups (and now Reg•Watch) have already focused on Bush's speech and E.O., and the White House has trumpeted them with its usual pomp and circumstance.

But there is no real news here. The administration is merely announcing it is in the earliest stages of considering a regulatory plan on greenhouse gases. Bush had to take this course eventually because of a recent Supreme Court ruling. The inter-agency approach is the obvious tack to take on such a complex issue. The 20-in-10 plan is a months-old initiative, and Congress is not likely to pay much attention to it.

The only new information here is Bush's decision to direct agencies to finish their regulatory action by the end of his administration. If Congress doesn't act by passing legislation (a possibility considering the disorganization of Democrats on energy thus far) it is possible Bush could leave a regulatory legacy — and a weak one at that. A regulation in the pipeline could also serve as a chip for bargaining with Congress in order to move legislation more inline with administration priorities.

Of course, those regulations could easily change with the caprice of future administrations. Please wake Reg•Watch when someone in the legislative or executive branch takes real action on climate change.

Today, BNA news service (subscription) published the recap of a lengthy interview with new White House regulatory czar Susan Dudley, conducted by reporter Ralph Lindeman. Dudley claimed she does not anticipate any delay in the issuance of agency guidance documents during her tenure.

In January, President Bush amended the regulatory review process. Among the changes, the White House will begin reviewing agency guidance documents (interpretive memos, policy statements, etc.) for the first time. In April, Bush recess appointed Susan Dudley to head the Office of Information and Regulatory Affairs (OIRA) which gives her the responsibility of carrying out guidance review when the changes take effect in July.

Much of the rhetoric spewing out of the White House has been vague, but a few things are clear: OIRA will be reviewing agency guidance documents (possibly hundreds per year) for the first time; OIRA will not be adding additional staff; and, subsequently, the administrative mud that is the regulatory review process is about to become thicker and deeper.

As Reg•Watch blogged recently, OIRA review of guidance (currently voluntary) is already resulting in delay. But in the interview, Dudley refused to acknowledge the potential for delay, claiming OIRA will treat guidance document differently than it does regulations. This is at odds with the new White House directives, which outline a process for review of guidance quite similar to that of regulations. Moreover, if Dudley believes guidance will move through OIRA quickly and result in no noticeable change in the speed of their issuance, why did the White House make these changes at all?

Ultimately, Dudley acknowledged timetables for review of guidance "haven't been resolved." This is despite a recent memo which OIRA issued with the intention of defining how these changes will affect agency practices. The memo, written by Dudley, states "OIRA will complete its consultative process within 30 days or, at that time, advise the agency when consultation will be complete." Based on Dudley's own words, it seems like there will be ample opportunity for delay.

By now, we all know President Bush's recent changes to the regulatory process will further bottleneck federal regulatory policy in an attempt to help regulated industries escape new obligations. Specifically, changes regarding agency guidance documents will force those interpretive memos (often only suggestions) through a burdensome and unnecessary White House review process.

For a preview of the nightmare the American public will face when these changes take effect (July 24), take a look at an article from BNA news service (subscription) published today. The article chronicles two guidance documents OMB has been sitting on for months. EPA and the Army Corps of Engineers jointly developed the guidance documents which concern wastewater processing.

The story exemplifies a concern OMB Watch has expressed: businesses and communities often need direct clarifications from the federal government in order to operate with the utmost legality, safety and effectiveness. From BNA:

Since January, environmental advocates, wastewater utility officials, and home builders have been asking both agencies, as well as OMB, when the guidance documents will be issued.

"It's a mystery," Virginia Albrecht, an attorney with Hunton & Williams who has represented the National Association of Home Builders and the National Mining Association, told BNA May 3.

Albrecht said the corps has a jurisdictional backlog of 20,000 cases, all awaiting final guidance. "The corps needs the guidance to do their job and they are frustrated," she added.

EPA and the Corps chose to submit these guidance documents to OMB. Come July 24, agencies will no longer have that choice. This is the kind of delay agencies will have to grapple with.

OMB refuses to indicate when it will complete review of these guidance documents, according to the article. Meanwhile, wastewater facilities will have to deal with uncertainty, and the American public will be put at risk.

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Both The New York Times' and The Washington Post's editorial boards have weighed in on the Senate's Prescription Drug User Fee Act (PDUFA) reauthorization.

The Times brings us back to the crux of the issue: FDA's power to require the drug industry to pay for drug approvals. While these so-called user fees are an significant source of revenue for FDA, The Times articulates the concerns of many who are following the issue:

This is a dangerous dependency for an agency that regulates such a critical part of the nation's health care system. It's as if the nuclear utilities paid for oversight by the Nuclear Regulatory Commission. The potential for abuse in such a chummy atmosphere is clearly there.

Nonetheless, the reauthorization contains other valuable provisions and has almost unstoppable momentum. That is, unless President Bush decides to veto it.

Which brings us to The Washington Post editorial. In today's paper, The Post puts on its protectionist cap, opposing a possible amendment to the lesgislation which would allow importation of cheap drugs from Canada and the EU (see Reg•Watch's coverage from yesterday).

The Post also defers to the White House on the issue:

Further, President Bush has threatened to veto the bill if it contains such language. For the sake of common sense, and to enhance the chances of urgently needed legislation, the Senate should reject the importation amendment before passing the bill.

In other words, "This is too important an issue to question Presidential authority." Isn't that the kind of logic The Post used in the run-up to the Iraq invasion?

The Senate is set to hold a cloture vote on the drug importation provision today. Stay tuned to Reg•Watch for more.

UPDATE:The Senate approved cloture 63-28, ending debate on the amendment.

Be sure to check out the latest issue of our biweekly newsletter, The Watcher. Regulatory policy articles this time:

OSHA's Lack of Standard Setting under Fire

White House Tightens Grip on Regulatory Power Grab

House Subcommittee Steps Up Oversight on Regulatory Changes

Yesterday, Reg•Watch blogged about the various amendments to the Senate PDUFA reauthorization bill. An additional provision has become the subject of political wrangling.

Sens. Byron Dorgan (D-ND), Olympia Snowe (R-ME) and Chuck Grassley (R-IA) support a provision which would allow importation of drugs from Canada and the European Union. Yesterday, OMB released a statement indicating the president would likely veto PDUFA reauthorization if it included such a provision.

The White House argues importation poses a safety concern: imported drugs are not subject to FDA approval. Even if we excuse the recent litany of FDA screw-ups (too many to list on this blog), the White House's concerns are misplaced. Americans deserve access to basic drugs from countries with excellent safety records. Importation would save consumers money and stoke competition in the American pharmaceutical market.

What's really startling is Bush's veto threat. PDUFA reauthorization is considered must-pass legislation. PDUFA expires in September and the funds it provides FDA are necessary for the agency to operate. Moreover, the bill currently carries other provisions which would strengthen FDA's ability to regulate. With its usual bravado and contempt for bipartisanship and good governance, the White House would be willing to derail the bill thereby hindering FDA's operations severely.

For now, it seems as though Senate Democrats are willing to get on board with the White House. Dorgan has indicated he will consider withholding the amendment if he is promised an opportunity to introduce it at a later time. Unfortunately, if the drug importation provision is not attached to the must-pass PDUFA reauthorization, it will face a much more difficult track in Congress.

Reg•Watch Update:

• Cloture vote on drug importation amendment
• Opinions on PDUFA Reauthorization