OIRA Nominee Sunstein Promises Law and Pragmatism Will Guide Decisions

During his May 12 confirmation hearing, President Barack Obama's choice for regulatory czar, Cass Sunstein, portrayed himself as a pragmatist, one who will not use economic analysis as a straitjacket for regulations. In pledging to look to the law first for regulatory guidance, Sunstein tried to distance himself from past regulatory czars who strongly supported economic analysis to judge the adequacy of health, safety, and environmental rules.

Obama nominated Sunstein April 20 to lead the Office of Information and Regulatory Affairs (OIRA), the small office within the White House Office of Management and Budget (OMB) that reviews proposed and final regulations and paperwork requirements. The office also has responsibilities over federal statistics, dissemination of information, and general information resources management.

Sunstein is a highly respected legal scholar who authored a number of provocative writings on regulations and the regulatory process in his decades in academia. He worked briefly in the Department of Justice's Office of Legal Counsel before embarking on an academic career. Thus, his hearing before the Senate Homeland Security and Governmental Affairs Committee was the first opportunity to hear how he would approach the practical task of implementing Obama's regulatory agenda.

The committee's chair, Sen. Joseph Lieberman (I-CT), and ranking member Sen. Susan Collins (R-ME) both asked pointed questions about Sunstein's approach to managing OIRA and certain specific policy areas. Lieberman asked Sunstein, an ardent supporter of cost-benefit analysis (CBA), to distinguish himself from President George W. Bush's first OIRA administrator, John Graham, another advocate of using CBA in regulation.

Graham's nomination received substantial opposition from the public interest community and from within the Senate for his consistent hostility to protections for public health, safety, and the environment. Many of these same groups have voiced concern that Sunstein would be too much like Graham in his approach. Lieberman opposed Graham's nomination because he worried that Graham's advocacy for cost-benefit analysis and risk tradeoffs would be used to frustrate the development of regulations – a worry that proved well founded. Lieberman asked Sunstein why a senator who opposed Graham should support him.

Sunstein responded that his approach to using CBA was "inclusive and humanized," meaning that agencies should take qualitative considerations into account. Moral and distributive values, for example, should be considered in regulatory decision making. CBA should not be used, he argued, to put regulations into an "arithmetic straitjacket" and that it should be subordinate to laws that mandate agencies' regulatory actions. CBA is not an appropriate tool to use when regulating under the Americans with Disabilities Act, for example, Sunstein noted.

Lieberman also asked the nominee about two controversial articles Sunstein wrote questioning the constitutionality of the Clean Air Act and the Occupational Safety and Health Administration (OSHA). The two articles were prompted by court opinions in which these legal questions were raised. Sunstein noted that the conclusions in both articles are that the law and the agency are constitutional, and he was setting out the roots by which both the act and OSHA's authority should be judged constitutional.

In Collins' opening statement [1], she acknowledged concerns about the nominee's intentions regarding government-wide privacy policies, a concern also expressed by Sen. Daniel Akaka (D-HI), the only other senator in attendance.

In addressing the privacy protection issues the two senators raised, Sunstein noted the need for OIRA to work with other executive branch offices in implementing the provisions of the range of statutes that have privacy implications. For example, new information technology challenges may require the 1974 Privacy Act to be updated, but Sunstein said that he had not drawn conclusions about the need for changes and would work with others to review relevant laws such as the privacy statute and the Freedom of Information Act.

Sunstein was less forthcoming in his answers to questions about the relationship between OIRA and the agencies. Both in the hearing and in response to questions [2] submitted to the nominee by the committee prior to the hearing, Sunstein avoided specifics about what he would like to see changed about the rulemaking process.

When asked, "Do you believe that OIRA should be an activist office, steering regulation in particular directions?" Sunstein sidestepped the question, writing, "I believe that OIRA has a role to play in promoting compliance with the law and with the President’s commitments and priorities – and that it can do so in a manner fully consistent with its mission."

His answers highlighted the need to look to statutory direction and presidential priorities, improve transparency at OIRA, and the importance of collaboration with both agencies and other executive branch offices. He expressed no opinion about the need to amend OIRA directives to agencies (such as the Graham-era directive about the use of CBA), nor about whether the actions of independent regulatory commissions (for example, the Securities and Exchange Commission and the Federal Communications Commission) should be subject to OIRA oversight and review. Both of these topics are issues he has written about, but he deferred these matters to others in his answers to the committee. As a result, the public does not have a clear indication of Sunstein's views regarding these two important regulatory topics.

Lieberman indicated at the end of the hearing that he intended to support Sunstein's nomination. According to the Clean Air Report (subscription required; no link available), Collins told reporters after the hearing that Sunstein had addressed many of her concerns. The committee is expected to vote on the nomination soon. If approved by the committee, the nomination would be forwarded to the full Senate for a vote.