In a new report, OMB Watch speculates on what might occur under the Bush Administration. In addition to a regulatory moratorium, the report highlights a number of other consequences, including a rollback of protections for health, safety, and the environment, elevated costs in the rulemaking process, and OMB's more aggressive role in rejecting agency rules. When legislation, such as the Clean Air Act, becomes law, many expect to reap its benefits right away. But really it just marks the beginning of an intensive process (called rulemaking) of devising standards and figuring out how to implement them – which can take many years for agencies to accomplish. Then, once a standard is set, enforcement becomes critical. Without regular inspections and clear penalties for violations, agencies cannot effectively protect public health and safety, civil rights, and the environment. Unfortunately, the federal regulatory system is currently broken. Specifically:

• The regulatory process is too slow. A lengthy rulemaking process can be especially dangerous in the case of safeguards for public health, safety, and the environment. At EPA, for instance, major standards often take up to 10 years to develop. But in 10 years, significant damage can be done to the environment and public health. In 1997, for example, EPA finally unveiled new clean air standards years after the statutory deadline laid out in the Clean Air Act, and only after a court order compelled the agency to act. It took this long despite the fact that science had very clearly demonstrated, years earlier, that new standards were necessary to protect public health. Such lengthy delays are largely a result of the many cumbersome bureaucratic requirements that govern the rulemaking process – requirements that industry has done much to promote. During the 104th Congress (1995-1997), for example, President Clinton signed into law the Small Business Regulatory Enforcement Fairness Act (SBREFA), the Unfunded Mandates Reform Act (UMRA), and amendments to the Paperwork Reduction Act (PRA) – all of which require agencies to perform rigorous new regulatory cost assessments. All told, the laws enacted during the 104th Congress imposed a total of 21 new requirements on government agencies, only adding to the rulemaking maze.
• Regulatory enforcement is woefully insufficient. Enforcement of existing standards is also a big problem, as agency enforcement budgets have been cut significantly. An excellent article in the November 1999 issue of the Washington Monthly points out that inspections, referrals for civil criminal prosecution, and sanctions for environmental violations have dropped in almost every state over the last five years. And in some cases, the drop has been more than 50 percent. States share some of the blame for this, but it reflects a change in philosophy at EPA. EPA, as well as other federal health and safety agencies, has chosen to de-emphasize enforcement in favor of compliance assistance. But while compliance assistance is important and worthwhile, it cannot be an excuse to abandon enforcement; the two should go hand in hand. By refusing to promote enforcement at the state level, EPA is only encouraging a race to the bottom in which states compete for business by turning a blind eye to violations of environmental law. Without better enforcement, industry compliance continues to be elusive. According to a recent study by the Environmental Working Group, almost 40 percent of major U.S. auto assembly, iron, and steel, petroleum refining, pulp manufacturing, and metal smelting and refining industries were “significant violators” of the Clean Air Act between January 1997 and December 1998. Only one third of them have been fined, and the fines were almost always too small to have any deterrent effect. Enforcement of clean water standards is similarly lax. According to EPA studies, 40 to 50 percent of major water pollution sources are in significant non-compliance with the Clean Water Act. As a result, 40 percent of U.S. waters are unsafe for fishing and swimming.
• Congress has been hostile to federal safeguards and has aggressively pushed for regulatory “reform” legislation. Congress has helped to create a climate in which regulatory agencies are extremely timid in taking needed action – both in enforcing existing standards and in addressing emerging risks. Numerous congressional hearings have been held over the last several years in which agencies, such as the Occupational Safety and Health Administration (OSHA), have been blasted, without any foundation, as out-of-control. The House Majority Whip Tom DeLay (R-TX) has even compared EPA to the Gestapo. This sort of intimidation has been compounded by a slew of regulatory “reform” proposals that have been floating around since 1995 when Newt Gingrich took over as speaker of the House. These proposals, which fortunately have been held off by the public interest community and frequent veto threats by the Clinton administration, would make the current situation worse. They generally seek to further gum up the rulemaking process (so that agencies can’t get anything done), weaken enforcement, elevate cost considerations in regulatory decision-making, and expose agencies to a host of new (and costly) lawsuits by regulated industry.

All of these problems are likely to be exacerbated under a Bush presidency. Some of the legislative attacks that faced veto threats from the Clinton Administration will have a green light come January. This gives real hope to proponents of comprehensive regulatory “reform” – and great concern to those who care about public health and safety, civil rights, and the environment. Yet the legislative threats may be the least of our worries under a Bush presidency. We will undoubtedly face a host of new executive branch attacks as well. Specifically:

• Protections for health, safety, and the environment will be rolled back. Regulations still being worked on from the Clinton administration will be put immediately on hold, and other regulations will likely be abandoned and revoked. This includes tough new clean air standards, which are currently before the Supreme Court after being struck down by a conservative lower court based on pre-New Deal case law. The Bush administration, faced with heavy opposition from the business community, is not likely to keep up the fight for these standards. A new ergonomics rule – to prevent repetitive motion injuries on the job – is likely to be another casualty of a Bush administration. And a recently-finalized rule requiring federal procurement officers to consider past law-breaking by prospective contractors – including violations of health, safety, and environmental rules – is also very much in jeopardy under a President Bush.

• OMB will take a more aggressive role in rejecting agency rules. All agency rules are subject to OMB review and must be approved before they can take effect. During the Reagan and Bush administrations, OMB used this review authority to act as regulatory black hole. Rules would languish there pending approval, often for years with little or no explanation. Upon taking office, President Clinton responded to this problem with Executive Order 12866, which put in place a time-frame of 90 days for OMB reviews and required new disclosure to help the public understand OMB actions. Unfortunately, E.O. 12866 is likely to be revoked and redone by President Bush. This could mean new powers for OMB – reminiscent of the previous Bush administration – and one big barrier for new health, safety, and environmental protections.

• Costs will be elevated in the rulemaking process. Under many health, safety, and environmental statutes, agencies are prohibited from making regulatory decisions based on cost considerations because of the seriousness of the problem. Clean air standards, for instance, are to be based solely on what’s best for public health; costs are then considered during implementation with proper time-tables for compliance. Conservatives in Congress would like to change this, and a Bush administration would likely encourage them. But in the meantime, there are steps President Bush will likely take to elevate cost considerations in rulemaking decisions. First, statutes instructing a health-based approach to rulemaking are likely to be largely ignored, as they were in the previous Bush and Reagan administrations. Second, Clinton’s E.O. 12866, which requires agencies to conduct cost-benefit analysis of all major rules, is likely to be redone to put a greater emphasis on monetization.

Although Clinton’s E.O. contains some problems, it recognizes that many benefits – such as the loss of I.Q. in children due to lead poisoning – are difficult, if not impossible, to quantify or monetize, and may be reported in qualitative terms. A Bush administration, in redoing E.O. 12866, is likely to take a more hard-line approach and demand monetization from the agencies. Inevitably, this will have the effect of deflating benefits relative to costs, since costs are much more easily monetized. Moreover, costs are frequently overstated in a prospective cost-benefit analysis since they fail to take into account adaptive effects, such as technological advances that make compliance by industry easier and cheaper. With benefits understated and costs overstated, the process is inevitably biased in favor of inaction. No doubt a Bush administration will use such cost-benefit analysis to justify its failure to address health, safety, and environmental problems, as well as its willingness to tow the industry line.

• Court appointments will bolster a radical, ongoing judicial attack on the federal government’s ability to protect health, safety, and the environment. The Supreme Court stands on the verge of upending the federal government’s ability to regulate. This is not an overstatement. In the spring of 2001, the Court will decide if Congress has the ability to broadly delegate to EPA to devise clean air standards. A conservative lower court, resurrecting the pre-New Deal “nondelegation doctrine” (which holds that certain issues are too important for Congress to delegate), found that Congress does not have this authority under the Constitution – that Congress itself must devise such standards. Obviously, if the Supreme Court were to uphold this decision, it would raise serious concerns beyond the particular issue of clean air by suggesting that Congress cannot delegate authority to federal agencies – which have scientific expertise that Congress lacks – to develop standards for public health, safety and the environment.

Unfortunately, this is just one piece of the ongoing judicial attack on federal regulation. As part of its review of EPA’s clean air standards, the Supreme Court has also agreed to decide whether EPA must consider costs in its rulemakings, which would cut against years of court decisions that have found exactly the opposite – that the Clean Air Act, as well as good sense, requires EPA’s decision-making to be based solely on what’s best for public health. The Supreme Court has also been flirting with a radical notion of federalism that seems to have us headed back to the Articles of Confederation – which could leave the federal government fewer and fewer powers to set health, safety, and environmental standards across states. For instance, in a case the Supreme Court may soon hear, the conservative Fourth Circuit refused to punish a developer for discharging fill into a Maryland wetlands in violation of the Clean Water Act. The court reasoned that because the Clean Water Act was enacted under Congress’ Commerce clause powers, it only applies to “interstate” wetlands. If the federal role in protecting the environment continues to be undermined in the courts in such a way, states could very well be pushed to the least common denominator in a competition to lure business. This makes future judicial appointments – and not just those to the Supreme Court – extremely important. As for the Supreme Court, it is narrowly divided right now, frequently splitting 5 to 4 on the most crucial decisions. With just one or two Bush appointments, this balance could be tipped, allowing the most extreme members of the Court to prevail. This would carry long-term consequences that would devastate the federal government’s ability to protect the public and the environment. It is important to note that the Bush administration will be significantly different than the earlier Reagan and Bush administrations for two reasons. First, unlike the 1980s, neither house of Congress is controlled by the opposite party. This means little to no congressional oversight. The public interest community will need to put much more emphasis on research and monitoring, as well as the use of the news media, to hold the executive branch accountable. Second, the closeness of the election means that Bush will need to be extremely responsive to the base that helped get him elected – business. If the past is any predictor, the business community will put great pressure on the administration to take actions that reduce regulatory burdens at the expense of adequate public protections. In such an environment, it will not be surprising if President Bush uses the many levers of power in the executive branch to accommodate his wealthy campaign contributors.