Home | Business News | Browse by Publication | R | Regulation

The fate of Bush's regulatory reforms: what will President Obama do with the tools that he's inherited?

Article Excerpt
President Obama has entered office with the clear intention of altering many policy choices of the previous administration. New policies on Iraq and health care will attract a great deal of public and media attention. Regulatory policies involving the Environmental Protection Agency and the Occupational Safety and Health Administration will also receive attention. However, President Obama's decisions on whether to retain, modify, or eliminate the Bush administration's many changes to the regulatory process will get little notice. This is unfortunate because those decisions will affect policy in a wide variety of areas, and they deserve careful consideration.

The regulatory process changed more under George W. Bush than at any time since the beginning of the Reagan administration. President Bush, through his administrators of the Office of Information and Regulatory Affairs (OIRA), John Graham and Susan Dudley, added procedures to the regulatory process and expanded the reach of the Executive Office of the President into agency information disseminations and guidance documents.

With one or two exceptions, the Bush administration changes were praised by opponents of agency regulations and criticized by regulatory supporters. Supporters hailed them as bringing rationality to the regulatory process and predicted that they would lead to smarter regulations. Opponents derided the changes as intended to impede the promulgation of regulations. Those same groups are likely to pressure the new president to, respectively, strengthen the procedures or else to modify or eliminate them.

The most important effect of regulatory procedures is to empower the president's ability to oversee federal agencies. All presidents have an interest in ensuring that agencies take actions that support the president's policies. The question facing President Obama and his top aides is whether the Bush procedures have costs that outweigh their benefits to the president through improved oversight. The Bush procedures vary in the extent to which they empower the president and also vary in the magnitude of their potential negative effects.

EVALUATING REGULATORY REFORMS

In both the academic literature and in political discourse, evaluations of regulatory reforms are generally concerned with three points:

* The efficacy of the new procedures in controlling bureaucratic decisionmaking.

* The cost in time and money of implementing the new reforms, and in the subsequent issuance of new regulations.

* The resulting change in the quality of regulatory outputs.

Let us consider each of those points more carefully.

POLITICAL CONTROL Using procedures to influence agency decisionmaking goes back at least to congressional passage of the Administrative Procedure Act in 1946, creating the modern rulemaking process. It is argued that making bureaucrats go through procedures when writing rules will help ensure politically preferred outcomes. In the academic literature, this view is associated with scholars Matthew McCubbins, Roger Noll, and Barry Weingast--indeed, the three have been collectively dubbed "McNollgast." They argue that procedures are put in place by legislative coalitions to create a decisionmaking environment that mirrors the climate in which legislatures make decisions. This environment supposedly makes it more likely that bureaucrats will make policy decisions the same way that those who supported the enabling statute would make them.

The McNollgast argument has been subject to numerous criticisms. For one, it slights the role of the president, who engages in executive oversight of agency officials. For another, it places regulatory procedures in the hands of future coalitions of political officials who may choose to use them in ways contrary to those envisioned by the coalition that created them.

[ILLUSTRATION OMITTED]

While Congress created numerous regulatory procedures in the 1990s, the 2000s have seen most regulatory reforms originate in the executive branch. The procedures put in place by the Bush administration all help to facilitate executive control of federal agencies. Some do so directly, like Bush Executive Order 13422's requirement that political appointees in agencies sign off on regulatory decisions. Some do so indirectly, like the information-quality guidelines that give OIRA the ability to oversee agency responses to interest group complaints about agency information disseminations.

The criticism regarding future coalitions remains relevant, however. The myriad procedures put out by the Bush administration are now under the control of the Obama White House, and the new president is able to use those procedures to facilitate policy goals that are very different than those desired...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!