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35 Envtl. L. Rep. News & Analysis 10433 (2005)
Unequal Partners: Cost-Benefit Analysis and Executive Review of Regulations

handle is hein.journals/elrna35 and id is 389 raw text is: Copyright @ 2005 Environmental Law Institute@, Washington, DC. reprinted with permission from ELRo, http://www.eli.org, 1-800-433-5120. 7-2005 ELR NEWS&ANALYSIS ARTICLES Unequal Partners: Cost-Benefit Analysis and Executive Review of Regulations by Stuart Shapiro Editors' Summary: This Article addresses the potentially conflicting roles played by the Office of Management and Budget in overseeing agencies' rulemaking: analyzing rules using cost-benefit analysis and exercising execu- tive control ofrulemaking. The author argues that the Office oflnformation and Regulatory Affair's role as the eyes and ears of the president in overseeing reg- ulatory agencies has led to its analytical mission playing a secondary role and is, in part, responsible for the lack of visible effects (positive or negative) of cost-benefit analysis. By using a simple model, the Article demonstrates how executive review and analytical requirements interact in presidential decision- making. The author offers alternative hypotheses for the negligible impact of cost-benefit analysis on rulemaking and suggests a research agenda that could answer questions about the institutional design of cost-benefit requirements. The Article concludes that the role ofcost-benefit analysis in regulatory policy is necessarily limited by its linking with executive review. I. Introduction In July 2001, John Graham was confirmed as Administra- tor of the Office of Information and Regulatory Affairs (OIRA). The vote on his confirmation was 61 to 37.' Aside from the vote on U.S. Attorney General John Ashcroft, this was the closest vote on a President George W. Bush ap- pointee in the first 18 months ofthe Bush II Administration. Eleven years earlier, during the term of President George H.W. Bush and the Bush I Administration, the U.S. Con- gress never confirmed an Administrator for the OIRA. Hearings were held for the nominee, James Blumstein, but confirmation was never granted.2 The OIRA has long had a controversial history. The de- bates over Blumstein's and Graham's confirmations, how- ever, were markedly different from one another. The com- mittee hearings on Blumstein's confirmation focused on the OIRA's role as the mechanism by which the president over- Stuart Shapiro is currently an assistant professor of public policy at the Ed- ward J. Bloustein School of Planning and Public Policy at Rutgers Univer- sity where he does research and teaches courses on regulatory policy. Prior to that position, he worked for five years in the Office of Information and Regulatory Affairs as a policy analyst and assistant branch chief The au- thor is deeply indebted to Cary Coglianese, Gary Edles, Scott Farrow, Anne Gowen, and William West, for taking the time to read drafts of this Article and provide extremely helpful comments. 1. U.S. Senate Roll Call votes, 147 CONG. REC. S7938 (daily ed. July 19, 2001). 2. James Blumstein, Regulatory Review by the Executive Office of the President: An Overview and Policy Analysis of Current Issues, 51 DUKE L.J. 851 (2001). 35 ELR 10433 saw the regulatory process.3 The debate focused on the question of whether or not the president had the authority to question or stop regulations promulgated by agencies pur- suant to statutes passed by Congress. Eleven years later, the floor debate on Graham's nomina- tion was a debate on the merits ofthe OIRA's other key role, as the guardian of cost-benefit analysis in the regulatory process. Graham had been the director ofthe Harvard Cen- ter for Risk Analysis and was known as a strong advocate for risk assessment and cost-benefit analysis. Proponents of regulation see such analysis as biased against regulatory efforts and designed primarily to make the regulatory pro- cess more cumbersome.6 The key event in the intervening decade was President William J. Clinton and his Administration's endorsement of the idea of executive oversight of the regulatory process. With the adoption ofExecutive Order No. 128667 by a Dem- ocratic president, the opposition to an increased role for the president in the regulatory process subsided over the past decade.' Elena Kagan's discussion of how executive review 3. Id. 4. 147 CONG. REC. S7906-S7938 (daily ed. July 19, 2001). 5. Graham also received criticism for industry funding of the Har- vard Center. 6. See, e.g., 147 CONG. REC. at S7920 (Sen. Lieberman's remarks). 7. Exec. Order No. 12866, 58 Fed. Reg. 51735, ADMIN. MAT. 45070 (Sept. 30, 1993). 8. Robert Percival, Presidential Management of the Administrative State: The Not-So-Unitary Executive, 51 DUKE L.J. 963 (2001) (Because the Clinton Administration's regulatory review program