New OIRA Staffer Calls Attention to Office’s Role

The White House Office of Information and Regulatory Affairs (OIRA), the clearinghouse for federal regulations, has brought in a conservative economist, Randall Lutter, to review regulatory proposals from agencies. The move has upset OIRA critics and unnerved those who interpret Lutter's past writings as a sign of his views on public health and environmental regulation. Those working inside government and those who know him argue that the criticisms of Lutter, a civil servant on temporary assignment to OIRA, are unfair.

Lutter, an economist formerly with the conservative AEI-Brookings Joint Center on regulation, is on temporary assignment to OIRA from the Food and Drug Administration (FDA), where he most recently served as Deputy Commissioner for Policy, a non-political position. OIRA reviews drafts of proposed and final regulations as well as proposed paperwork requirements any time an agency wishes to survey ten or more people.

White House officials have not commented publicly on Lutter's responsibilities but say that he was detailed to OIRA temporarily because the office is in need of additional staff. According to White House Office of Management and Budget (OMB) spokesperson Kenneth Baer, OIRA was "looking for economists in the civil service who had experience" with OIRA and regulatory issues, and Lutter was a good fit. Lutter was a career employee with OIRA in the 1990s before working for FDA.

Documents show that he has been involved in a U.S. Environmental Protection Agency (EPA) rule that would limit sulfur dioxide emissions. An intra-administration e-mail exchange, made available in EPA's online rulemaking docket, shows that Lutter questioned EPA's estimates of the potential costs to industry of sulfur dioxide regulation. Lutter asked EPA economist Charles Fulcher why the agency had not attributed any costs to certain counties in a cost-benefit analysis. In response, Fulcher attempted to explain EPA's methodology. Lutter then requested he and Fulcher further discuss the issue by phone. Unlike e-mail exchanges, the details of phone conversations are not subject to public disclosure in this case.

The e-mail exchange took place Nov. 19, three days after the draft proposed regulation was approved by OIRA and sent back to EPA. EPA published the proposed sulfur dioxide rule Dec. 8. The rule and the cost-benefit analysis are available on EPA's website.

Gina McCarthy, EPA’s assistant administrator for air and radiation, told OMB Watch that the questions posed by Lutter were "perfectly appropriate." McCarthy said she had not heard complaints from her staff about the role of Lutter or OIRA in the sulfur dioxide rulemaking. She said the relationship between EPA and OIRA thus far in the Obama administration has been productive and that rules are emerging from OIRA review in a "stronger, crisper, more defensible fashion."

OIRA's decision to bring Lutter on staff first sparked controversy when Rena Steinzor, president of the Center for Progressive Reform, posted the news Dec. 2 on her organization's blog. "Few personnel developments could be more discouraging to those hopeful that the Obama Administration will fulfill its many commitments to revitalize the agencies responsible for protecting public health, worker safety, and natural resources," Steinzor wrote.

Steinzor based her concerns on rumors that Lutter would be hired as an OIRA policy advisor, which would be a political appointment. She noted that she raised the Lutter issue in a meeting with senior OIRA officials, and no one provided any clarity about Lutter’s employment status.

A Washington Post article appeared in the Dec. 4 print edition and described Lutter's role in the sulfur dioxide rulemaking. The article included comments from OMB, of which OIRA is a part, confirming Lutter's employment at OIRA. OIRA Administrator Cass Sunstein has not commented publicly on Lutter.

Lutter is on temporary detail from FDA, OMB said. According to the Office of Personnel Management, "A detail is a temporary assignment to a different position for a specified period when the employee is expected to return to his or her regular duties at the end of the assignment." Detailees are still technically considered employees of the agencies from which they are detailed.

Lutter has "no decisionmaking authority," said Baer, the OMB spokesperson. Baer emphasized that Lutter, like the vast majority of government employees, is a civil servant. His job is to provide technical economic advice and to help implement the plans and priorities for the administration, Baer said.

Lutter's role in the sulfur dioxide rulemaking raises questions, not about his fitness for civil service, but about OIRA's overall role in the rulemaking process. Current and past OIRA officials have maintained that OIRA's responsibility is to vet draft regulations among other federal agencies and/or to ensure draft regulations are consistent with presidential priorities. OIRA desk officers, the civil service staff in the office, are the foot soldiers in this coordination effort.

But past controversies indicate that OIRA can have a larger impact, sometimes to the detriment of public interests. In 2007, OIRA refused to open an e-mail from EPA containing the agency's proposal to declare greenhouse gases a public health threat, according to a House committee investigation. That finding was finalized Dec. 7, almost two years later. OIRA has also been known to chafe at specific details of regulations. For example, in 2008, OIRA persuaded the EPA to reduce the number of air pollution sensors needed to detect concentrations of airborne lead.

OIRA is still operating under the regulatory framework detailed in Executive Order 12866 signed by President Clinton in 1993. President Obama announced Jan. 30 that he would revise and replace that order. Because Obama's executive order is pending, observers remain curious as to whether the role of OIRA, and the regulatory process overall, will change under his administration.

Lutter has wide-ranging experience with environmental and public health regulation. In 2003, he began working at FDA as the agency's head economist. While there, he was promoted to Associate Commissioner of Policy and Planning, then Acting Deputy Commissioner for Policy.

At FDA, Lutter defended the Bush administration's preemption doctrine for medical product regulation. Under President Bush, the FDA argued that product approval should bar state courts from hearing tort cases against manufacturers in the event consumers are harmed by normal use. Lutter testified before the House Oversight and Government Reform Committee in 2008 that, "FDA believes that the important decisions it makes about the safety, efficacy, and labeling of medical products should not be second guessed by state courts."

Critics of preemption say that state courts must be given the flexibility to examine whether manufacturers dutifully considered the effects of their products, especially as new, post-approval information emerges and consumers are allegedly harmed by products. Without the threat of tort suits, manufacturers have reduced incentives to prioritize product safety.

Lutter also contributed to the development of FDA policy that makes it easier for pharmaceutical companies to push doctors to prescribe drugs for unapproved uses. On Jan. 13, FDA finalized its Good Reprint Practices guidance document, which permits drug makers to use as a marketing tool journal articles showing a drug can be used to treat symptoms not specified in FDA's approval of the drug. Critics say the journal articles used by the industry do not necessarily meet typical scientific standards and may not have been reviewed by FDA.

The office Lutter headed at FDA, the Office of Policy, Planning and Preparedness, was reconfigured in August when Commissioner Margaret Hamburg reorganized the agency's senior staff structure. Lutter has not represented FDA at a "significant meeting" since May 1, according to calendars for senior officials posted on FDA's website. Lutter has not appeared on the list of senior officials since the reorganization.

Prior to serving at the FDA, Lutter worked for AEI-Brookings, a joint project of the American Enterprise Institute and the Brookings Institution that was often criticized by progressive advocates for taking a hostile view of regulation. (Brookings has since left the partnership; AEI continues the project on its own as the Reg-Markets Center.) While there, he authored controversial research papers and commentaries on environmental issues, including a 2001 opinion piece titled, "Chill out on Warming," which defended President Bush's refusal to sign the Kyoto Protocol, a multi-nation agreement to cut greenhouse gas emissions.

Lutter previously served at OIRA during the George H.W. Bush and Clinton administrations. He also worked for the White House Council of Economic Advisors under President Clinton. Colleagues from his days in the Clinton White House have defended Lutter. "During my tenure at OIRA, I was unaware of the personal political or philosophical preferences of the staff because, like all good civil servants, they parked these preferences at the door. I was looking for and I got data and analysis, and the decisions were made not by the career civil servants but by the political appointees, as they should be," former OIRA administrator Sally Katzen told OMB Watch. "Randy worked for me for almost five years, and he stood out only because of his obvious intelligence and thoughtful analysis. I think it’s a most unfortunate distraction to discuss the role of individuals rather than the merits of the policy decisions," Katzen said.

Several people who have worked inside government are surprised at the attack on Lutter since he is a career employee, not a political appointee. They argue that those who work inside government should not be subjected to political litmus tests. Instead, they argue, it is the responsibility of political appointees to instruct career staff on what policies to follow. Critics note that this approach is particularly difficult to follow at OIRA because the office has such enormous power to review administrative actions taken by agencies. The actions by any one reviewer – even when he or she appears to be non-political – can have enormous policy impact.

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