Who Will Run the EPA?

With President Obama’s nomination of Gina McCarthy as the new Administrator of the Environmental Protection Agency (EPA), much attention has turned to her record as the EPA official in charge of air pollution programs, experience as the head of two states’ environmental agencies, and views on specific policies and priorities. And with the President’s nomination of Sylvia Mathews Burwell to be the Director of the Office of Management and Budget (OMB), attention has likewise turned to her record and experience. Few recognize, however, the tight relationship between the two nominations: the Obama administration’s approach to governing will make Ms. Burwell Ms. McCarthy’s boss.

Few environmental statutes in this country put the President (or his aides in the White House) in charge of environmental decisions; most give the job to the EPA or, more specifically, its Administrator. Even fewer environmental statutes require rules to be evaluated according to cost-benefit analysis; most specify a different kind of decision-making framework for such rules.

Nevertheless, the Obama administration has continued and deepened a longstanding practice of White House control over EPA rules, with cost-benefit analysis as the guiding framework. OMB is the central player in this structure: it reviews, under a cost-benefit rubric, all agency rules that it deems “major” under executive orders mandating this review. EPA rules deemed major by OMB are not issued without OMB’s imprimatur. Thus does the OMB director become the EPA Administrator’s boss.

This result would be bad enough, given the tension between it and the legal structures governing environmental policy. But it turns out the OMB itself seems not to want to accept accountability for running U.S. environmental policy. In a new law review article by Cass Sunstein, the former head of the OMB office that acts as the White House’s regulatory gatekeeper, Sunstein insists that he actually didn’t have very much power.¹1.Cass R. Sunstein, The Office of Information and Regulatory Affairs: Myths and Realities, Harv. L. Rev. (forthcoming 2013), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2192639. In fact, he says, decisions about rules most frequently turned on other players in the White House, Cabinet heads outside the agency proposing the rule, or even career staff in other agencies or in the OMB itself. In Sunstein’s rendering, it appears that everyone is responsible for the shape and scope of environmental policy in this administration. Which means no one is accountable.

In concrete terms, this leaves us unable to know whom to blame when the OMB delays the EPA’s list of “chemicals of concern” for almost three years, holds the Occupational Safety and Health Administration’s rule on crystalline silica for over two years,²2.This rule has been under review since February 14, 2011. See OSHA Occupational Exposure to Crystalline Silica Rule, Regulatory Review Dashboard (last visited Mar. 25, 2013) (pending OMB review as of Mar. 25, 2013), http://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201104&RIN=1218-AB70. does not accept delivery of a notice of new data on EPA’s proposal to regulate coal ash impoundments,³3.The EPA’s website on rulemaking shows that a Notice of Data Availability was sent to the OMB for review on March 12, 2012. Coal Combustion Residuals generated by Electric Power Plants, U.S. Envtl. Prot. Agency, http://yosemite.epa.gov/opei/RuleGate.nsf/byRIN/2050-AE81?opendocument (last visited Mar. 25, 2013). Neither the EPA’s nor the OMB’s website indicates that the rule has been accepted by OMB for review. Id.; Search Results, Regulatory Review Dashboard, http://www.reginfo.gov/ (search “RIN” for “2050-AE81” and search “Agency for Environmental Protection Agency) (returning “no results found”) (last visited Mar. 25, 2013). or insists on extensive, substantive changes to the Food and Drug Administration’s new rules on food safety.⁴4.Documents showing extensive changes to the FDA’s rule on the growing, harvesting, packing and holding of produce for human consumption are available through Regulations.gov at http://www.regulations.gov/#!documentDetail;D=FDA-2011-N-0921-0029. Documents showing extensive changes to the FDA’s rule on good manufacturing practice and hazard analysis and risk-based preventive controls for human food are available through Regulations.gov at http://www.regulations.gov/#!documentDetail;D=FDA-2011-N-0920-0014. Perhaps it is the OMB itself, or another office in the White House, or the White House Chief of Staff, or the head of the Department of Agriculture, or a GS-12 at the Small Business Administration.⁵5.Sunstein mentions all of these kinds of possibilities in explaining the influences on the OMB process of regulatory review. Sunstein, supra note 1, at 17. We just don’t know.

Part of the reason we don’t know is that the Obama administration does not follow its own rules on transparency in the process of OMB review. Two years ago, President Obama issued an executive order reaffirming his embrace of a Clinton-era executive order governing OMB review.⁶6.Exec. Order No. 13,563, 76 Fed. Reg. 3821, 3833 (Jan. 21, 2011) (reaffirming Exec. Order No. 12866 of Oct. 4, 1993). The Clinton-era order requires transparency throughout the OMB process; at almost every step of the way, the order – which, again, President Obama reaffirmed in his own executive order on OMB review – requires disclosure of important decision points and documents:

• if an agency plans a regulatory action that the OMB thinks is inconsistent with the President’s policies or priorities, the OMB must tell the agency so, in writing;⁷7.Exec. Order No. 12,866, 58 Fed. Reg. 51735, 51744 (Oct. 4, 1993) at § 6(a)(3)(E)(iii).
• if a dispute arises between the OMB and the action agency over whether a particular rule should issue, and one of these parties requests resolution of the dispute by the President or Vice-President, the OMB must note – in a “publicly available log” – who requested elevation and when;⁸8.Id. at § 6(b)(4)(C)(i).
• if the OMB returns a rule to an agency for further consideration, the Office of Information and Regulatory Affairs Administrator must provide a “written explanation” for this return;⁹9.Id. at § 6(b)(3).
• if a regulatory proposal changes between the time it goes to OMB and the time it emerges, the agency must identify those changes (“in a complete, clear, and simple manner”);¹⁰10.Id. at § 6(a)(3)(E)(ii).
• and if the OMB insists on changes to the regulatory proposal during its review, the agency must identify those changes for the public (“in plain, understandable language”).¹¹11.Id. at § 6(a)(3)(E)(iii).

The Obama administration follows almost none of these rules on transparency. The OMB does not explain in writing to agencies that items on their regulatory agenda do not fit with the President’s agenda. The OMB does not keep a publicly available log explaining when and by whom disputes between the OMB and the agencies were elevated. Indeed, when the first elevation of an EPA rule occurred in President Obama’s first term, I drafted a brief memo for the EPA’s docket explaining that elevation had occurred and noting the outcome. The OMB told me in no uncertain terms that the memo must not be made public. Moreover, except in one instance – President Obama’s direction to then-EPA Administrator Lisa Jackson to withdraw the final rule setting a new air quality standard for ozone – the OMB has not returned rules to agencies with a written explanation about why they have not passed the OMB review.¹²12.The website on regulatory review shows only one return letter (on ozone) issued during the Obama administration. OIRA Return Letters, Office Of Info. And Regulatory Affairs, http://www.reginfo.gov/public/do/eoReturnLetters (last visited Mar. 25, 2013). Instead, the OMB simply hangs onto the rules indefinitely, and they wither quietly on the vine. This is how it comes to pass that a list of chemicals of concern or a workplace rule on crystalline silica lingers at the OMB for years.

Some agencies do post “before” and “after” versions of rules that have gone to the OMB. These redlined documents often feature hundreds of changes. There is nothing here like the “complete, clear, and simple manner” of disclosure contemplated by the Executive Order. There is also often no document that explains which changes were made at the OMB’s behest. Where, as Sunstein explains, changes might come from the OMB, from another White House office, from another Cabinet head, or from a career staffer in a separate agency, the failure to follow the Executive Order’s rules on transparency means that no one is ultimately accountable for the changes that occur. Who is responsible, for example, for the hundreds of technical changes made to the EPA’s scientific analyses of air quality rules?¹³13.Wendy Wagner has painstakingly documented such changes in a study prepared for the Administrative Conference of the United States. Wendy Wagner, Science In Regulation: A Study Of Agency Decisionmaking Approaches (2013), http://www.acus.gov/sites/default/files/documents/Science%20in%20Regulation_Final%20Report_2_18_13_0.pdf. We simply don’t know.

Here, too, the OMB is the stumbling block when it comes to transparency. Agencies know full well that they are not to be too transparent. The OMB reprimanded the EPA when the EPA accidentally posted interagency comments on its proposal to regulate coal ash impoundments.¹⁴14.See Cent. For Effective Gov't, Changes to Coal Ash Proposal Place Utility's Concerns Above Public Health (2010) (recounting the same episode). But why shouldn’t the public know who is responsible for changing the rules? In fact, without knowing the expertise and affiliation of the kibitzers, it is hard to evaluate their comments.

The problems go deeper still. The OMB maintains a “Regulatory Review Dashboard” that contains a good deal of information about rules under review, how long they have been under review, and so on.¹¹⁵15.Regulatory Review Dashboard, http://www.reginfo.gov/ (last visited Mar. 25, 2013).It is spiffy and informative, but woefully incomplete. Some rules go to the OMB “informally” and do not appear on the Dashboard at that time. Some rules go to the OMB and appear on the Dashboard only weeks after the agency has sent them.¹⁶16.For example, compare the EPA’s report of when it sent its rule on electronic reporting regarding water pollution permits to the OMB, Dec. 22, 2011, to its report on when the OMB “received” the rule, Jan. 20, 2012. See NPDES Electronic Reporting Rule, U.S. Envtl. Prot. Agency (last visited Mar. 25, 2013) (listing dates for “NPRM: Sent to OMB for Regulatory Review” and “NPRM: Received by OMB”). See also Search Results for NPRM Review Status, Regulatory Review Dashboard, http://www.reginfo.gov/ (search “RIN” for “2020-AA47” and search “Agency for Environmental Protection Agency) (showing OMB’s received date to be Jan. 20, 2012). Some items go to the OMB and never appear on the Dashboard.¹⁷17.See supra note 4. Some rules are done, from the agency’s perspective, but the White House prevents their transmittal to the OMB.¹⁸18.Juliet Eilperin, Obama Administration Slows Environmental Rules as it Weighs Political Cost, Wash. Post, Feb. 12, 2012, (stating that the White House had not given EPA permission to send a rule on cars and trucks to OMB). The truth is, the Dashboard purports to be, but is not, a full picture of the items under review at any given time. Thus it misleads at the same time it informs.

What can be done?

First, Senators considering the nominations of Ms. McCarthy and Ms. Burwell should ask them about the relationship between the EPA and the OMB. They should ask who will be in charge of the EPA’s regulatory program. They should ask whether we will know who is in charge. They should ask on what basis decisions about environmental policy will be made.

Second, the OMB should follow – and allow agencies to follow – the disclosure requirements of the Executive Order under which its review occurs.

Third, if the OMB decides not to allow a rule to issue, it should return the rule to the relevant agency with a written (and public) explanation as to why it is doing so. It should stop holding onto rules indefinitely. It is not plausible to suggest – as Professor Sunstein has¹⁹19.Sunstein, supra note 1. – that long periods of review simply mean that the OMB and the agencies are working hard on getting the rules right. This may be true in some cases, but some of those rules are never going home to the agencies. The OMB should say so and explain why.

Fourth, the OMB should follow the deadlines set out in the Executive Order. The Order quite clearly contemplates that the OMB has 90 days to review rules, 120 if the head of the OMB and the head of the relevant agency agree on an extension.²⁰20.Exec. Order. No. 12866, supra note 8, at § 6(b)(2)(B),(C). But the OMB takes the position that if the head of the agency asks for an extension, review can continue indefinitely. This is a strained reading of the Executive Order (as Sunstein himself seems to acknowledge).²¹21.Id. More important, the way the head of an agency often comes to “request” an extension is that she (or her staff) receives a call from the OMB, asking the agency head to ask the OMB for an extension. Thus the OMB has unmoored itself completely from the deadlines set out in the Executive Order; review is over only when the OMB says it’s over.

Changes like these would be modest; they would simply bring the OMB into line with the Executive Orders it purports to be following. More substantial changes – such as loosening the OMB’s grip on the agencies, ceasing the OMB’s meddling with agencies’ scientific findings, relaxing the cost-benefit stranglehold on regulatory policy – would also be welcome. But to start, just following the rules laid out by the President himself would be nice.