Cass Sunstein

Cass R. Sunstein is a prominent law professor and served as "regulatory czar" in the White House, overseeing the White House Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) from September 2009 until August 2012, when he resigned. He was to be replaced by Acting OIRA Administrator Boris Bershteyn. Sunstein is a friend of President Barack Obama from their days serving on the faculty of University of Chicago Law School. Sunstein is a big backer of cost-benefit analysis which applies a price tag to complex issues such as public health, safety, and the environment.

According to an August 2012 article in The New York Times, Sunstein "wielded enormous power" in his position at OIRA and that "few proposed rules escaped his gaze or his editor’s pen. Of the hundreds of regulations issued by the administration as of late last year, three-quarters were changed at OIRA, often at the urging of corporate interests, according to an analysis from the Center for Progressive Reform, a liberal-leaning group that monitors federal regulation. For rules from the Environmental Protection Agency, the figure was closer to 80 percent, the group found. In virtually every case, the rule was weakened, the group claimed."

In response to Sunstein's announcement of his departure from OIRA, President of the Center for Progressive Reform Rena Steinzor released a statement, saying "Sunstein has continued the Bush Administration’s tradition of using the office to block needed health and safety protections disliked by big business and political contributors. Worse, the narrative that Sunstein helped craft about the impact of regulations on American life — that regulatory safeguards are fundamentally suspect — was discordant with the rest of the President's agenda and the arguments he makes for his reelection."

Cost-Benefit Analysis

Sunstein's work at OIRA was guided by his belief in the value of a "cost-benefit analysis" in reviewing proposed federal regulations. Under this economic theory, OIRA attempts to project and measure the costs and benefits that would result from a proposed regulation.

In August 2012, The New York Times noted that in a recent interview Sunstein stated that “careful analysis of costs and benefits can help show when regulation is good, and when regulation isn’t so good.” The article then explained that "any cost-benefit analysis, of course, includes subjective judgments about costs and difficult calculations, like the value of a human life."

According to a 2009 report on Sunstein by the Center for Progressive Reform, "the central methodology employed by OIRA to weaken the regulatory system has been cost-benefit analysis.... The problem with OIRA’s reliance on cost-benefit analysis as a form of regulatory review is that cost-benefit analysis is neither sound in theory nor useful in practice. Cost-benefit analysis, as practiced by the vast majority of economists, applies a patina of mathematical precision to an inherently distorted process. This problematic methodology relies on overstated cost estimates (often from industry sources), and drastically understated estimates of regulatory benefits. Indeed, some benefits defy monetization altogether and are simply dropped from the equation, yielding results that are incomplete and distorted.... For example, cost-benefit analysts seek to divine people’s “willingness to pay” for regulatory protections. But this effort is notoriously imprecise when the benefit in question is a non-market good—one that does not come with a specific price tag—the value of a child’s health or clean drinking water, for example. Some monetization of benefits can often be attempted—avoided emergency room visits due to air pollution, for example, or tourist dollars generated by a wilderness area—but not all such benefits lend themselves to dollars-and-cents evaluations."

According to Rena Steinzor, president of the Center for Progressive Reform and a professor at the University of Maryland Carey School of Law, while at OIRA Sunstein has “done untold damage.”

In response to Sunstein's departure from OIRA, Obama released a statement saying "Cass has shepherded our review of existing rules to get rid of those that cost too much or no longer make sense, an effort that is already on track to save billions of dollars. With these reforms and his tenacious promotion of cost-benefit analysis, his efforts will benefit Americans for years to come."

Climate Change

Sunstein has questioned whether reducing greenhouse gas emissions is the best way to combat climate change. "The best way for the current generation to help posterity might be through reducing emissions; but it might be through other methods, including approaches that make posterity richer and better able to adapt," he wrote.

The Center for Progressive Reform rejects this argument as flawed: "that the current generation 'adjust overall savings and investment rates'—that is, to attempt to leave a larger legacy for future generations in terms of savings and investments to compensate them for the inconvenience that attends to living in a world devastated by climate change.... it ignores the essential incommensurability between a single monetary metric and the diversity of values represented by non-market goods. Indeed, if the present generation leaves future generations with a world that is almost completely devoid of potable water and functioning, diverse ecosystems, no amount of money will be able to compensate for the 'inconvenience.'"

'Senior Death Discount'

Sunstein has argued that regulations should focus not on how many lives it saves, but how many years of life it can preserve. He wrote, “[o]ther things being equal, a program that protects young people seems far better than one that protects old people, because it delivers greater benefits.” This has been dubbed by critics as the "senior death discount."

According to the Center for Progressive Reform, "the senior death discount, like the whole enterprise of cost-benefit analysis, denies the intrinsic value of individual lives. Undoubtedly, most Americans regard the 'value' of their lives as more than the monetized 'price' of the sum of their expected remaining life years."

During Sunstein's Time at OIRA

According to The New York Times: "As administrator of the White House Office of Information and Regulatory Affairs, he reviewed the rules implementing President Obama’s health care act and the Dodd-Frank financial regulatory reform law. He backed major environmental initiatives, including higher fuel efficiency standards for cars and trucks and new toxic emissions rules for power plants. He approved the revamping of the decades-old food pyramid (it is now a 'plate'), the tightening of salmonella rules for eggs and a crackdown on prison rape. He midwifed a deal between appliance manufacturers and the Department of Energy to make refrigerators more energy efficient."

In a 2011 report to Congress, OIRA noted its priorities as “economic growth, innovation, competitiveness, and job creation" suggesting “excessive regulation” stood as an obstacle in fulfilling these goals.

Ozone

On September 2, 2011, Sunstein wrote a letter to EPA Administrator Lisa Jackson asking her to reconsider a rule aimed at tightening the National Ambient Air Quality Standards. The rule, which has been in effect since 1997, is a "significantly weaker than the standard proposed by the Bush Administration," according to the Center for Progressive Reform. The proposed standards would have set the ambient air quality standards for ozone in accordance with the recommendations of the EPA’s Clean Air Scientific Advisory Committee (CASAC). The decision is set to be revisited in 2013. According to EPA's estimates, delaying the standards will cost 4,300 additional American deaths from air-pollution-related causes.

According to documents obtained by The Hill through a Freedom of Information Act Request, Sunstein circulated strong criticism of the ozone rule from top business groups to high-level advisers to President Obama, including Nancy-Ann DeParle and Heather Zichal, before the controversial decision was made. The business groups included the National Association of Manufacturers and the Business Roundtable. In response to these findings, Tom McGarity, a board member of the group and a professor at the University of Texas School of Law, said “You would like to think that decisions about protecting the public health aren’t based on which interest has the most political power, but seeing industry’s talking points being forwarded around the White House is certainly not encouraging.” The Office of Management and Budget has defended the exchange, saying that OIRA maintains an "open door" policy" for reviewing regulations, which includes "input from consumers, experts, health and safety advocates, industry, and small business owners."

Coal Ash

The EPA announced in 2009 plans to set federal regulations for coal ash, the waste from coal burning plants, by the end of the year. In May 2010, it proposed classifying coal ash as either hazardous or non-hazardous waste. According to Earth Justice, "After eight public hearings across the country and more than 450,000 public comments, the agency decided to delay finalizing the rule amid intense pressure from the coal and power industries." According to the EPA, coal ash contains concentrations of arsenic, boron, cadmium, chromium, lead, mercury and other metals. The EPA found in 2010 that the cancer risk from arsenic near some unlined coal ash ponds was one in 50 -- 2,000 times the agency's regulatory goal. In April 2012, environmental and public health groups filed a lawsuit to force the EPA to finalize regulations on coal ash.

OIRA has received criticism for its extended review of the EPA's 2009 proposal to regulate coal ash. According to the Center for Progressive Reform, "OIRA violated the executive order establishing its authority to review regulations by missing its deadlines, then imposed on EPA an alternative, watered-down, regulation, and then saddled EPA's original proposal with a cost-benefit analysis that would make it all but impossible for EPA to describe plainly hazardous coal ash as a hazard.... After a months-long struggle between EPA and OIRA, on May 3, 2010, EPA released not one but three proposals for dealing with the problem of hazardous coal ash waste. EPA sent a proposed rule to OIRA in mid-October 2009, starting a 120-day clock for OIRA's consideration of the proposal. What followed was a massive lobbying blitz by the industry, that included more than 40 meetings with OIRA staff -- all to talk about a rule whose substance was the province of EPA, not OIRA. In February, the clock expired, but no rule emerged, and neither, for that matter, did an explanation as to why the time had run out without action. CPR's review of the paper trail between between EPA and OIRA, subsequently released by EPA, shows exactly how EPA's proposal came to be watered down."

Attention to the hazards of coal ash has grown since a devastating spill in eastern Tennessee in 2008, where a Tennessee Valley Authority storage pond poured more than 1.1 billion gallons of ash onto some 300 acres of nearby land, contaminating rivers, destroying homes and accumulating up to six feet of liquid-ash sludge in some areas. Since then, the EPA affirmed that toxins in the ash can seep into the ground and reach drinking water sources. The Environmental Integrity Project (EIP) recently found that groundwater at 33 coal ash waste sites across the country were contaminated with levels of toxins that may violate a federal dumping ban.

Child Labor

The Department of Labor sent a draft Notice of Proposed Rulemaking to OIRA on August 24, 2010, on a child labor issue, which OIRA's database recorded as having been withdrawn by the agency one month later (August 28, 2010). Another draft of the proposed rule was sent to OIRA on November 12, 2010, where it sat for months beyond the 90-day deadline spelled out in the executive order governing OIRA review of draft regulations.

After two 17-year-old Oklahoma boys were reported to have had suffered severe leg injuries when they were caught by their legs in a grain auger in August 2011, George Washington University public health scholar Celeste Monforton wrote that the draft regulations under prolonged review at OIRA would improve 40-year-old regulations forbidding minors from working in certain highly hazardous agricultural jobs, including positions in grain elevators. The Huffington Post noted that the draft proposed rule had been "awaiting review from the White House's Office of Management and Budget for the past nine months -- an unusually long time, even in the world of federal rule making."

Clean Water Requirements for Mountaintop Removal

In April 2010, the EPA announced " a set of actions to further clarify and strengthen environmental permitting requirements for Appalachian mountaintop removal and other surface coal mining projects, in coordination with federal and state regulatory agencies." The EPA then took comments on proposed changes for six months and received hundreds of responses.

On March 2011, U.S. Representative Nick Rahall (D-W.Va.) sent a letter to OIRA asking it to examine EPA’s Clean Water Act Guidance Memo saying it "hurt coal miners and local communities in southern West Virginia." Rahall had met earlier in the year with Sunstein. According to the Center for Progressive Reform, "For all intents and purposes, Representative Rahall is using OIRA review to delay the EPA guidance while he works legislatively to strip EPA’s authority to veto permits under the Clean Water Act. On Jun. 22, the House Transportation and Infrastructure Committee, of which Rahall is the Ranking Member, reported a bill to give regulatory authority over water, wetlands, and mountaintop mining to the states. EPA released a legal analysis on Jun. 24 that explains that the bill would gut the Clean Water Act and 'would overturn almost 40 years of federal legislation by preventing EPA from protecting public health and water quality.'"

Chemicals of Concern List

OIRA began reviewing in May 2010 an EPA proposed list of Chemicals of Concern. This list includes bisphenol A (BPA), several phthalates and flame retardant chemicals. On Jun. 7, 2011, the U.S. Chamber of Commerce sent a letter to OIRA asking it to stop its review until the EPA disclosed "the metrics it will use to determine when a chemical 'may present' an 'unreasonable risk' and qualify for listing under the statute." The Chamber of Commerce argued that the EPA considered listing these chemicals before publicly issuing “clear, scientifically sound and economically rational listing criteria.” In response, the Center for Progressive Reform sent a letter to OIRA stressing that concerns over the proposed list should be dealt with during a public comment process.

Arsenic

Professor Sunstein conducted a cost-benefit analysis of a rule put forth by the EPA to reduce the amount of arsenic in drinking water. Using calculations from the EPA and the AEI- Brookings Joint Center for Regulatory Studies, Sunstein estimated that benefits from the proposed regulation could range from $13 million to $3.4 billion. Despite this significant margin of error, Sunstein defends the use of cost-benefit analysis, “[i]t is difficult to see how estimates with uncertainty ranges as high as 10 orders of magnitude add anything to the simple recognition that arsenic might or might not pose a significant human health risk.” Professor of Law at the University of California, Berkeley, Holly Doremus, responded, “[i]t is difficult to see how estimates with uncertainty ranges as high as 10 orders of magnitude add anything to the simple recognition that arsenic might or might not pose a significant human health risk.” Doremus is a leading scholar and teacher in environmental law, natural resources law, and law and science.

Affiliations

• AEI-Brookings Joint Center for Regulatory Studies, author and member of Council of Academic Advisors

Resources

• Spinprofiles Cass Sunstein
• Center for Progressive Reform Choices for OIRA and Eye on OIRA
• Center for Progressive Reform Behind Closed Doors at the White House: How Politics Trumps Protection of Public Health, Worker Safety, and the Environment
• Project on Government Oversight "Cass Sunstein: Do We Have a Problem?" (Aug. 17, 2011)
• Dave Jamieson, "Child Labor Rules Stalled At White House As Farm Accidents Continue," Huffington Post, Aug. 15, 2011.
• Center for Progressive Reform Reinvigorating Protection of Health, Safety, and the Environment: The Choices Facing Cass Sunstein

Contact

Karl N. Llewellyn Dist. Service Prof. of Jurisprudence, Law School, Dept. of Political Science and the College

1111 East 60th Street

Chicago, IL 60637

Tel: 773 702-9498

email: csunstei@uchicago.edu