Regulation and Oversight: Advice for the New Administration
Susan E. Dudley, Administrator
Office of Information and Regulatory Affairs
Office of Management and Budget
Executive Office of the President
American Enterprise Institute for Public Policy Research
December 10, 2008
Here is my Top Ten list of advice for the next administration.
Number 10: Blame your predecessor.
Whenever a new administration comes into office, it takes measures to manage the flow of last-minute regulations issued by the previous administration. The “Card memo” was issued at the beginning of this Administration, and the “Panetta memo” in the previous administration. Both were designed to review regulations that were rushed at the very end, and to try to stop or deal with the ones that weren’t yet on the books. I think the next administration may be somewhat disappointed, despite everything you have been reading in the media, because the Bolten memo really has imposed some discipline on agencies in these last few months. There are a couple of regulations that were in the USA Today article this week that, in fact, we will not be finishing. These are environmental regulations that I see cited often by the media; EPA’s New Source Review (NSR) for electric generating units, and one that is often referred to as siting coal plants near National Parks. We don’t feel that these are not good rules, but because they did not meet the deadlines set forth in the Bolten memo, we will not proceed with them.
Number 9: Lace up your running shoes.
There are enough hot, difficult issues that the new administration is going to need to hit the ground running. I’m talking about the decline in the financial markets, housing markets and the auto industry-being debated today. Then just a little further down the road, when there will be slightly more time to breathe, issues such as homeland security and climate change will likewise need quick attention. So, there is a lot that the new administration will need to engage in early on.
Number 8: If OIRA didn’t exist, you’d have to invent it.
I think people often underestimate OIRA’s key function of coordinating across different agencies to ensure that there is consistency, and reduce duplication and redundancy in federal regulation. Our solid cadre of professional civil servants is invaluable. They have a great amount of institutional knowledge and are able to perform that coordinating function by working with the other agencies. I don’t know how you would live without them. Which leads to number seven on my list.
Number 7: Read Executive Order 12866.
E.O. 12866 is grounded in scholarship, and provides sound principles for economic and policy analysis. It has withstood the test of time, and I think it’s something that everyone across the agencies -- not just the OIRA Administrator -- should be familiar with.
Number 6: Read the amendments to E.O. 12866.
Don’t throw out the baby with the bathwater. I would advise the next administration to take a little time before making a decision on what to do with its amendments. E.O. 12866 was issued at the beginning of the Clinton Administration, and was kept in place in this Administration. One change from the original Clinton E.O. is the appeals process. During the Clinton Administration, appeals went to the Vice President. An amendment revised the process so that appeals now go to the Chief of Staff. This change is actually very important. It doesn’t get used very much, but deciding who in the Administration should receive appeals when the OIRA Administrator is unable to resolve an issue is important.
The more recent revisions included a change to subject guidance documents to OMB-coordinated interagency review. OIRA, and I know this from having worked there twenty years ago in addition to my more recent stint, has always looked at guidance documents, but on a rather ad hoc basis. I think it is useful for a central part of the government to have information on the different guidance documents that different agencies issue.
The last amendment emphasized the “Regulatory Policy Officer” (or RPO). RPOs were included in the original Executive Order, but by the time I came to OIRA, the RPOs themselves didn’t know who they were. The amended Executive Order identified who the RPOs were and required that they be presidentially appointed. This means that they are accountable not only to the President, but to Congress, and can be called upon to testify. RPOs are not “new” officials, in that they do not hold new positions in an agency. The job is generally delegated to an existing official, such as an agency’s general counsel, the deputy secretary, or the head of the policy office. We have a list of current RPOs on our website and I think that it has been successful to have both the public, and the policy officers themselves, know who they are.
Number 5: Remember where the road paved by good intention leads.
Appreciate the complexity and the multidimensionality of the modern regulatory framework and recognize that even the best of intentions can have unintended consequences. Good analysis means that you really to need to analyze these issues and understand what their effects will be; both the desired effects and the unintended effects.
Number 4: It’s not just about engineering, law and economics anymore.
Regulatory development is more complex than it was, even ten or twenty years ago. We are much more sophisticated in some areas, such as risk analysis and benefits analysis. However, we have new challenges. Homeland security is something that is relatively new and really does pose some novel issues; as do some of the global issues like climate change. There are things that we need to think about that we haven’t really figured out how to think about yet.
Therefore, you need different types of expertise at both the agencies and also in OIRA. OIRA has statisticians, scientists, information policy experts, and privacy experts, in addition to the lawyers, economists and policy analysts that we’ve always had. I have learned their value in that in my last two years at OIRA. It’s valuable to have our experts engage with experts in the agencies and provide guidance on a wide range of things; not just regulations, but the other work that OIRA does.
Number 3: Learn to say “smarter regulation” in Chinese.
The new administration will find that they will spend more time than they thought dealing with both the impacts of our regulations in other countries, and also coordinating regulation with other countries. Not just China, but Europe, Canada, Mexico, and Australia. It’s an interesting challenge, but it’s something that I think they will find important.
Number 2: Harness the Internet.
I am very excited about how we have improved public access to the regulatory world over the last eight years. Having been a regulatory wonk for a long time, and knowing what it used to be like if you wanted to find out information on a regulation, it’s exciting to realize what we’ve been able to do. But the possibilities for what more we can do are endless; and I think that’s an interesting opportunity.
And Number One in my Top Ten list is... trust the OIRAnians.
The OIRA staff -- and there are several in the room, so block your ears because you’re going to blush -- are real professionals. They have a lot of institutional knowledge that somebody new coming in couldn’t possibly get immediately. They have relationships with the agencies, and are widely respected in the agencies -- though not always liked. I think that this career staff is something that will be invaluable to the new administration.
In fact, yesterday, when Sally Katzen, the Administrator of OIRA during the Clinton Administration, told me that she wasn’t going to be able to come today, I said, “But you have to -- because if I say that the OIRA staff are good, it will be the kiss of death. YOU need to be able to reinforce it!” And she responded, “well, you tell everyone there that I agree that OIRA staff are the best in the government.”