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Sunstein's Successor Meets Skepticism About Regulatory Czar's Role

Some Democrats in Congress, including Sens. Tom Harkin (Iowa) and Sheldon Whitehouse (R.I.), and liberal-leaning groups have complained about the delays.

“Key standards to protect public health, worker safety, and the environment have languished at OIRA, in some cases for years,” the senators told the White House in a letter sent last week. “OIRA frequently holds onto rules without explaining its concerns, preventing agencies from taking steps to address them.”

Supporting the senators’ concerns, the Coalition for Sensible Safeguards (CSS), a coalition of health, labor, and consumer groups, released a report on Tuesday arguing that more than 120 proposed regulations have stalled at OIRA. Some of the rules questioned by the CSS include regulations requiring an extension of minimum wage laws to home-care workers and better energy efficiency standards to reduce energy usage and save consumers money.

Sen. Ron Johnson (R-Wis.) used the hearing to criticize the Environmental Protection Agency over new ozone proposals, which he deemed “well-intended,” but suggested that when you increase the number of regulations, you reach a “point of diminishing returns.”

Shelanski said, just like his predecessor, he would emphasize cost-benefit analysis and retrospective review to assess the actual costs of regulation.

“I think it is important that agencies are able to carry out their statutory objectives of ensuring a sound environment, but it is also necessary to ensure that where costs and benefits can both be effectively taken into account that these objectives are not achieved at a higher cost than it’s necessary,” Shelanski said.

Johnson asked Shelanski how he planned to get the public involved in the rulemaking process, emphasizing the importance of getting the opinion of businesses on regulations. Shelanski replied that he hopes to increase public participation in the regulatory process by increasing transparency and communication.

Senate Republicans raised concerns over “unintended consequences” of rules that may impose “burdensome” regulatory costs on the economy. Sen. Rob Portman (R-Ohio), an OMB director under President George W. Bush, noted that the costs of rules issued in 2012 exceeded the combined costs of all regulations in the entire first terms of President Bush and President Clinton. The Ohio senator said last year there were 90 rule changes, saving $3.3 billion, which is good, but not in the context of $236 billion that agencies say the rules cost.

“There are high costs to regulation, but there is only so much one can learn from looking at the cost side,” Shelanski said. “The question is always whether the benefits that the regulation achieved can justify the costs.”

Shelanski, currently the director of the Federal Trade Commission’s Bureau of Economics, has both a law and an economics degree and had a clerkship under U.S. Supreme Court Justice Antonin Scalia. He has also been a professor at the Georgetown University Law Center since 2011, after working as a faculty member at the University of California at Berkeley for 14 years.