January 9, 2009 The Pump Handle 5Comment

The Washington Post reported yesterday that President-elect Obama wants Harvard law professor Cass R. Sunstein to serve as the head of OMB’s Office of Information and Regulatory Affairs ( OIRA).   I’m not prepared at this point to tangle intellectually with a  magna cum laude graduate of Harvard Law School, who was a law clerk to Supreme Court Justice Thurgood Marshall and a law professor for 27 years.  I am seriously worried, however, by some of what I’ve read of Professor Sunstein’s abundant writings, and how his views may influence efforts to protect public health and the environment.

One of his articles, which appeared in the Cato Institute’s Regulation magazine, brought back bad memories of the Reagan-era OMB and calls for “risk-risk” analysis.  Specifically, the theory goes that an OSHA regulation to protect workers from hazard X, could be so costly that an employer would shutter his factory, forcing workers out of their jobs, which would be more harmful than the original hazard.   In Prof. Sunstein’s article entitled The Paralyzing Principle in the Cato Institute’s Regulation magazine, he writes:

“A great deal of evidence suggests the possibility that an expensive regulation can have adverse effects on life and health simply by reducing income.  [no citations given]  …If regulatory policies are expensive and lead to higher costs, less employment, and more poverty, the net effect may be to harm individual health.  The empirical question is:  How much money in terms of regulatory costs, will lead to the loss of a statistical life because of the wealth-health relationship.”

These types of economic musing may be interesting for high-brow academic dialogues, but what’s their value to actual decision-making on public health protections?   There’s ZERO evidence that the cost of any workplace safety or health regulation caused even a blip on our nation’s economic screen, let alone led to “less employment and more poverty.”  Moreover, I’d argue that the true cost of failing to protect workers from toxic materials CAUSES under-employment AND poverty—-and these costs are never measured in economic impact analyses.**  

This leads to the observation that Prof. Sunstein is a huge fan of cost-benefit analysis.  As Rena Steinzor wrote today on CPR’s blog, Obama’s pick for the OIRA chief

“…embraces cost-benefit analysis enthusiastically.  Defenders of cost-benefit analysis argue that we should reduce the societal costs and benefits of regulation to absolute dollar figures, no matter how ephemeral the numbers’ relationship to reality may be.    …That formula is most definitely not what Congress intended when it passed numerous health and safety laws over the last four decades.   

In Professor Sunstein’s 2008 article for Virginia Law Review “Is OSHA Unconstitutional?” (see SSRN) he argues that provisions on standard setting in the OSH Act of 1970 are unconstitutionally vague.  He asserts that OSHA is vulnerable to a Constitutional challenge based on the nondelegation doctrine, trying to convince us that the terms “reasonably necessary or appropriate” and “feasible” are too vague for the Agency’s decision-making purposes.  

His bottom line: Congress screwed up 40 years ago, it should have been much more precise in its direction to OSHA, and he offers a remedy: a “mandate [for] some form of cost-benefit balancing.”   He adds—as if goading the already enpowered opponents of protective worker standards:

“One argument for use of the non-delegation doctrine—or perhaps it is  a mere hope–is that invalidation of the statute might produce a better, more informed occupational safety law.”

Just in case you missed that, he’s talking about invalidation of the OSH Act (and he’d probably argue the same for the Mine Act.)   I guess legal scholars like to ponder such things.  Not likely the case for coal miners, steelworkers, chemical workers, construction workers, hotel housekeepers, nurses…    

Law professor Steinzor elaborates:

“Poor old OSHA–the agency charged with responsibility for keeping workers safe from toxic chemicals and dangerous equipment on the job site–is barely breathing today, having issued just two rules in a decade on toxic chemicals. Yet Sunstein seems to fear that the agency will suddenly spring to life and exercise the excessive power Congress gave it. In that case, he says, companies could argue that after close to 40 years of existence, a federal court should conclude that Congress must go back to the drawing board, rewriting the OSHA statute from scratch.”

Egads!  This was not the “change” I hoped for.

Steinzor correctly adds:

“This attack does more than challenge OSHA’s mission.  It is an assault on the legal principles that justified the creation of all the health and safety agencies.”

Professor Sunstein is a prolific and talented writer, and clearly a bright legal mind.  Only he can tell us how his scholarly work will inform his practice at OIRA.  This obscure but powerful entity within the Executive Office of the President was established following 1980 passage of the Paperwork Reduction Act.  Its authority has grown substantially over the decades—expanding way beyond reviews of potential “paperwork burden,” to detailed reviews of agencies’ proposed and final rules, and mandates to agencies on peer review, risk assessment, and data quality.

As the Center for Progressive Reform observes:

“OIRA has become a White House choke point for regulations, exercising broad policy discretion that Congress delegated to agencies, not OIRA.  While conducting its reviews, OIRA retains substantial authority to change angency rules or to return them to the submitting agency if it finds that the rule under review fails to achieve OIRA’s conception of economic efficiency.” (CPR report, p.25)

Given OIRA’s history, that’s why Prof. Sunstein’s regulatory philosophy must be examined closely before he is confirmed.  His 2002 book Risk and Reason could be a starting point.   In a review of the book by Notre Dame professor Kristine Shrader-Frechette, she writes:

Sunstein’s “Chapter 7 defends the Bush administration’s proposed suspension of Environmental Protection Agency regulations for arsenic in drinking water.  This presidential move is exactly what Sunstein recommends throughout the book: dropping regulations, including arsenic protections, that fail the cost-benefit test.”

Professor Sunstein argues for a strict cost-benefit test for health protective air pollution regualtions in his 1999 paper Is the Clean Air Act Unconstitutional?    He’s also not convinced that a ban on asbestos is appropriate, writing in his critique of the precautionary principle in the Cato Institute’s Reason magazine, he writes:

“a ban [on asbestos] that might well seem justified or even compelled by the principle.  The difficulty, from the standpoint of that very principle, is that substitutes for asbestos also carry risks.”

OK. OK.  I’ve read quite enough for one day.  Now, it’s your job to read for yourself some of  Cass Sunstein’s work  and form your own opinion.  I’ll be doing the same.


**Note from above reference to the cost of failing to protect workers from toxic materials, which should (but doesn’t) include associated underemployment AND poverty:

I had a friend who was a former construction equipment operator in the heavy quartz-laden region of Arkansas.   He developed severe silicosis before age 40 and was told by his doctor to get out of the dust to save his lungs.  He’d been a dozer operator at aggregate mines since he was 17—that was his job, he didn’t know anything else.  He reluctantly took his doctor’s advice and found a minimum wage office-type job—his family income was cut in half and they no longer had health insurance.  (He died from silicosis and in the few years proceeding his death, the economic, social and emotional costs on his family were tremendous.)   Believe me, the costs of failing to regulate are never adequately quantified in economic impact analyses—-not even close. 

As J.T. Knuckles reminded us in 1997, talking about the things in his life robbed by silicosis, “what price would you put on being able to make love to your wife?”  If you have silicosis, black lung or other diseases, you probably know what J.T. meant.

Celeste Monforton, MPH, DrPH is with the Project on Scientific Knowledge and Public Policy (SKAPP) at the George Washington University School of Public Health.

5 thoughts on “Worrisome pick for Obama’s regulatory czar

  1. Oh come on – don’t mischaracterize your work. In his OSHA paper, he specifically outlines his goal as being one of supporting better workplace regulations. In fact, he says this in the paper:

    ” What is striking about the OSHA’s safety rules is the variability in cost per life
    saved – from a low of $100,000 (a real bargain) to a high of $11 million (above the
    standard figure, within the federal government, of around $6 million141). The fact that
    OSHA safety regulations are concentrated toward the lower end of the range suggests the possibility of further opportunities for life-saving regulations.”

    He doesn’t want to invalidate any existing OSHA regulations; his paper concerns the process that makes regulations, which is flawed. After all, even you will admit that lately OSHA hasn’t been doing very much regulating!

    As for your claim that he wants to invalidate OSHA, at the implied detriment of “coal miners, steelworkers, chemical workers, construction workers, hotel housekeepers, nurses”… this is just ridiculous. First of all, his paper concludes that the best option is probably not to invalidate the statute, but to require that OSHA perform some cost-benefit balancing in its decisions (note that he does not argue for strict cost-benefit balancing, meaning that you’re allowed to have the costs exceed the benefits!)

  2. Not commenting on the selection of Sustein, but get your information right – the Cato Foundation publishes Regulation magazine, the Reason Foundation publishes Reason. Cato does not, and as far as I’m aware never has, published Reason.

  3. Joel:
    Thanks for correcting me about Regulation magazine. I link to the proper Regulation magazine but erroneously wrote Reason. I’ve changed it in my post.

    Joe Peter: I appreciate that you took the time to comment on my post. My experience tells me to be wary of policymakers who say they are “supporting better workplace regulations.” The “better for whom” question is usually answered with “better for companies” in terms of no new regulations, exemption from first-instance sanctions, multiple opportunities to settle-away penalties, etc., etc.

    It is Professor Sunstein who uses the phrase “invalidation of the statute,” but as I suggest in my post, perhaps his are words are academic musings, and not how he would practice his responsibilities as OIRA chief, given that the U.S. Supreme Court held in its Cotton Dust decision (1981) cost-benefit balancing test would be inconsistent with the OSH Act, given that the statute requires a feasibility analysis.

  4. This is a reminder that we must be the activist engine of real change and not think that change is going to automatically come from the top – it never really does. We must be prepared to bring the real human toll of deregulation to the offices of the administrators and not settle for the same old destruction of people’s lives. I am afraid that we have suffered under so much mediocrocy in OSHA enforcement [28 years?] that we aren’t sure what to demand. Hopefully Sunstein’s positions will help us find our activism.

  5. As I read Sunstein, he concludes that the OSH Act likely does not run afoul of the nondelegation doctrine. Note also that he is only talking about safety standards; he concedes that there is no nondelegation issue with health standards.

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