Susan Dudley, Part 1
Some objective reporting as her confirmation hearing approaches

30 Oct 2006 in Regulatory Policy, People & Institutions

Since her nomination last summer to head OMB's Office of Information and Regulatory Affairs, we've read many news accounts and blog postings about Susan Dudley, The general tone has been both negative and personal. The vast majority contain content recycled from other blogs and web sites. In September, Public Citizen and OMB Watch published a 68-page report titled "The Cost is Too High: How Susan Dudley Threatens Public Protections." We've decided to review this Opposition Report to examine the merits of the case against Dudley.

As I disclosed previously, I worked with Dudley at OIRA from 1988-89 and have been friendly since then. In 2001, I contributed to a short course on risk assessment on Capitol Hill sponsored by Mercatus' Capitol Hill Campus program. Other than that, I have not worked with or for Mercatus nor has Dudley worked with or for me.

Public Citizen and OMB Watch announced their opposition to Dudley before her nomination was announced, so they have had several months to assemble their indictment. We assume that theirs is the best possible case that can be made against her confirmation. Over the next several days, we will publish our own analysis of the merits of this case.

In our first installment, we provide some background information about the Office of Information and Regulatory Affairs. OIRA is well known among those who work in regulatory policy but known hardly at all elsewhere. This results in a certain amount of mystique that gives credence to unsubstantiated claims in any direction.

OIRA is a statutory office within the Office of Management and Budget, established in 1980 by the Paperwork Reduction Act. The PRA was the brainchild of Sen. Lawton Chiles (D-FL). OIRA opened for business on April 1, 1981.

Subsequent installments will discuss:

• Tuesday, October 31: Public Citizen and OMB Watch, the authors of the Opposition Report
• Wednesday, November 1: An Introduction to the Opposition Report
• Thursday, November 2 The Case of Airbags
• Friday, November 3: Dudley's Impossible Requirements
• Monday, November 6: Dudley's Views on Technical Economics Issues Such as Market Failure, Use- and Nonuse Values, and How to Count the Benefits of Lifesaving
• Tuesday, November 7: Dudley's Radical Ideas

In a final post on Wednesday, November 8, we will summarize our review of the Opposition Report and draw some inferences. Dudley's confirmation hearing is scheduled for Monday, November 13.

BACKGROUND ON OIRA

OIRA has a key statutory role in the review of federal agency information collection requests, setting federal information policy and information technology policies, and overseeing statistical policy and the performance of federal statistical agencies. This role was codified in the Paperwork Reduction Act of 1980, and was reauthorized in 1995. OIRA also reviews some draft proposed and draft final regulatory actions prior to their publication, usually in the Federal Register. The Federal Register is the daily journal of record for the Executive branch and independent agencies, analogous to the Congressional Record.

OIRA's authority to review draft regulations comes from Executive order 12866, issued by President Clinton in 1993. This Executive order is the fifth of a series that includes Executive orders 11821 (Ford, 1974), 12044 (Carter, 1978), 12291 (Reagan, 1981), 12498 (Reagan, 1985)), and 12866 (Clinton, 1993), The Clinton Executive order is the only one now in force. [CORRECTION AND UPDATE: Executive Order 12866 was amended by Executive Orders 13258 (Bush, 2002) and 13422 (Bush, 2007). These Executive Orders are discussed separately here.]

The table below summarizes OIRA regulatory reviews since 1994, the first full year Executive order 12866 was in place. Typically, OIRA reviews about 600 draft regulatory actions each year. On average, about three-eighths of these are draft proposed rules and draft final rules, respectively. The remainder are divided between regulatory actions classified as final rules without prior notice and comment ("interim final rules," 11%), "notices" (9%), final regulatory actions unchanged from proposal (3%), and advanced notices of proposed rulemaking (3%).

Thousands more regulatory actions are issued each year by Executive branch agencies. OIRA has the authority under EO 12866 to review any regulatory action it chooses. By policy, there are certain classes of regulations that OIRA does not review. These typically involve regulations of specific applicability to a particular party. OIRA also does not review the draft regulatory actions of independent commissions such as the Federal Communications Commission, the Federal Trade Commission, and the Securities and Exchange Commission.

OIRA rarely makes headlines, in large part because it's not supposed to do so. Almost all of its regulatory review work is confidential because it is predecisional. Opponents of centralized oversight, such as OMB Watch, tend to dislike this confidential aspect of the oversight process because they fear that opposing interests might be receiving favorable treatment. Procedures governing disclosure and ex parte communication were issued in 1985 by Deputy Administrator Robert Bedell, in 1986 by Administrator Wendy Gramm, and in expanded form in 2001 by Administrator John Graham. Meetings with outside parties are posted on the OMB website. Still, there is no way for OIRA to prove that it does not grant special access or favors to selected parties. Moreover, precisely because it cannot be disproved, it is in the financial self-interest of Washington lobbyists to advertise that they have special access. The fact that OIRA staff are so rarely mentioned in press accounts, and almost never as sources of useful information, suggests that its procedures are actually quite effective.

This does not mean OIRA's work is uninteresting. With just one political appointee and fewer than 50 full time equivalent career professional staff members -- about 10% of the total OMB career staff -- OIRA often is in the middle of the most controversial policy issues. For an OIRA desk officer or economist, the world closely resembles the detective drama Columbo. It seem that every important regulatory review begins with the equivalent of a murder being committed right before viewers' eyes, and the detective's job is merely to lure the murderer to confess. (If asked, some OIRA alumni/ae might prefer more recent and edgy dramatic models, such as 24 or The X-Files.)

OIRA has several other functions. Also within the gamut of regulatory oversight, OIRA referees interagency disagreements when they arise. But its statutory function is to oversee the federal government's information policies, information technology polices, and statistical policies, and to implement the Paperwork Reduction Act. With respect to the PRA, OIRA's responsibility is statutorily non-neutral. It is charged with preventing federal agencies from demanding information from the public the burden of which is greater than its practical utility, and to reduce the aggregate paperwork burden.

Virtually the entire contents of the Opposition Report consists of objections about how Dudley would exercise her authority as OIRA Administrator with respect to regulatory review. There are just three references in the Opposition Report to the Paperwork Reduction Act (none of them substantive) and one reference to OMB's information quality guidelines (a criticism of John Graham, the most recent OIRA Administrator). We therefore assume that Dudley's views on paperwork reduction, information quality and information policy, and statistical policy, are not sufficiently controversial or novel to warrant any significant attention.

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