Howard Shelanski questioned on delays, retrospective review, and role for cost-benefit analysis.
Senator Rob Portman may have put it best Wednesday when he described the Office of Information and Regulatory Affairs (OIRA) Administrator as “the most important job in Washington that nobody has ever heard of.”
President Obama recently tapped Howard Shelanski to fill that powerful but little-understood job as head of a White House clearinghouse for regulations proposed by executive branch agencies. Shelanski appeared Wednesday before the Senate Committee on Homeland Security and Government Affairs for his confirmation hearing.
Senator Tom Carper (D-DE) began the Committee’s questioning by asking Shelanski what his top priorities would be if confirmed as OIRA Administrator. Shelanski said that one of his top priorities would be to ensure that regulatory review occurs in a timely manner.
Senator Carl Levin (D-Mich) expressed frustration that, despite the ninety day review limit prescribed by Executive Order 12866, OIRA has a “chronic” backlog of rules awaiting review. Levin said these delays “fundamentally undermine agency’s abilities to effectively execute the responsibilities that those agencies have.” He also claimed that as of May, eighty-seven rules had been under review for more than ninety days, and fifty-one for more than a year.
While Shelanski offered no specific solution, he expressed sympathy with the Senator’s concern, repeating that “it would be one of my highest priorities should I be confirmed as administrator to try to improve the timeliness and the notice and certainty that that lends to the regulatory environment.”
Shelanski said another top priority of his would be to strive to form strong relationships with heads of agencies, members of Congress and their staffs, interested members of the public, and with his own staff at OIRA. Shelanski clearly understood the position as more of a manager than an analyst.
During what amounted to his closing remarks, Shelanski described the kind of personal attributes and leadership skills the Administrator of OIRA should possess.
Shelanski said the Administrator needs to “work well with a variety of constituencies” and build productive relationships with others across government. “This is a hard job and it’s a small office,” he said.
Shelanski’s final priority would be to “further institutionalize and enable” retrospective review of existing regulations, or what the Obama administration has called regulatory “lookback.”
But lookback apparently has a long way to go, according to Senator Portman. Portman endorsed the practice as a required “housecleaning exercise,” but expressed disappointment with the results. The compliance cost savings of all rules modified as a result of lookback amounted to only $3.3 billion, a figure which pales in comparison to the $236 billion cost of regulations finalized in 2012 alone, Portman said.
Shelanski believes that OIRA should “suggest methods” for improving lookback, but maintains that that agency heads are best positioned for such analysis. “I think OIRA can help,” he said, but analysis would “be the primary responsibility of the relevant agency head.”
This OIRA-guided but agency-dominated approach constituted Shelanski’s solution to a variety of problems. Senator Ron Johnson (R-WI) stated that since 1976 there have been 182,000 new rules, and he claimed that the current overall cost of regulations in the U.S. amounted to about $1.8 trillion.
Prioritizing “where to start” and minimizing regulatory burdens would, according to Shelanski, begin with lookback efforts led by agency heads who “know best how the rules they have on the books fit with new rules they’re putting in place.”
Senator Tom Coburn (R-OK) asked about science standards and if Shelanski would ensure that the agencies enforce minimum standards, such as peer review, when using science to inform the rulemaking process. Shelanski reiterated that OIRA plays a supplemental and supportive role in such processes, not dictating scientific practices to agencies, but playing a “cooperative role” and recognizing that science standards are “in the first and main instance the province of the agency heads.”
Another frequently discussed question was how to strike a balance between the attainment of regulatory goals and the maintenance of economic growth, a balance reflected in President Obama’s Executive Order 13563 which calls for executive branch agencies to engage in cost-benefit analysis of new regulations.
Senator Portman wanted Shelanski to commit to bringing independent agencies, such as the Securities and Exchange Commission and the Commodities Futures Trading Commission, under cost-benefit analysis mandates.
Shelanski promised to work with Portman and the committee on matters related to legislation extending OMB mandates to independent agencies, but would not explicitly endorse any current legislative proposals. He did offer that “cost-benefit analysis is an extremely important, valuable tool that could be used by any entity that is engaged in regulation.”
Senator Carper raised a concern about excessive adherence to cost-benefit analysis, especially when certain kinds of benefits might be impossible to monetize. Shelanski reassured the Senator of his position that some benefits may not be quantifiable but still might be used to justify new regulations.
Shelanski certainly faces much work if confirmed as OIRA Administrator. Dozens of rules are already in the queue at OIRA, and the White House faces mounting calls from some members of Congress to subject additional regulations to OIRA’s scrutiny.
Shelanski is currently on leave from Georgetown University Law Center to serve as director of the Federal Trade Commission’s (FTC’s) Bureau of Economics. Most of his teaching in law school focused on telecommunications and antitrust regulation. In addition, he clerked for several judges including Antonin Scalia, practiced law at Davis, Polk, and Wardwell, and served as Chief Economist for the Federal Communications Commission (FCC).
OIRA has not had an official Administrator since August 2012, when Cass Sunstein left the position.