The OIRA administrator is often described as the nation’s “regulatory Czar.” That is a wild overstatement. The president leads the executive branch, and the United States has no Czars (really). But the term does give a clue to the influence and range of the office. OIRA is the cockpit of the regulatory state.
The office oversees federal regulations involving clean air and water, food safety, financial stability, national security, health care, energy, agriculture, workplace safety, sex and race discrimination, highway safety, immigration, education, crime, disability rights, and much more. As a general rule, no significant rule can be issued by any of the nation’s Cabinet departments — including the Department of Transportation, the Department of Treasury, the Department of State, and the Environmental Protection Agency — unless OIRA says so.
Of course, OIRA does not work on its own. On the contrary, the OIRA administrator works for the president, and many others in the Executive Office of the President have important roles. For example, the OIRA administrator works under the director of the Office of Management and Budget, a Cabinet member whose principal concern is usually the budget, but who may have something to say about rules. In addition, the chairs of the National Economic Council and the Domestic Policy Council (both with offices in the West Wing of the White House) might have a strong view about federal regulations. Their positions count.
On scientific issues, the head of the Office of Science and Technology Policy is central. On economic matters, the Council of Economic Advisers has a lot of technical expertise and is indispensable to federal rulemaking. The Office of the Vice President may have important information to add. The White House is managed by the president’s chief of staff, and under any president, the chief of staff is immensely important, because he is in charge of ensuring fidelity to the president’s priorities. OIRA is part of a team, not a free agent, and the unambiguous leader of the team is the president.
Nonetheless, OIRA’s authority to slow down or even to halt regulations — to say no to members of the president’s Cabinet — gives the administrator a major role in shaping their content. Suppose, for example, that OIRA believes that there is a better way to save lives on the highway. Perhaps a new approach would be more lenient, more stringent, simpler, or just different. If that is what OIRA thinks, it has a real opportunity to work with the Department of Transportation to explore that possibility. And if OIRA thinks that a rule — involving, for example, clean water — should not go forward, it is possible that the rule will not see the light of day. (After I had been in the job for a few years, a Cabinet member showed up at my office and told my chief of staff, “I work for Cass Sunstein.” Of course that wasn’t true — but still.)
OIRA also has a big role in shaping the president’s agenda. With the support of the president and other high-level officials, it can help move the government in different directions. It can refuse to approve complex or expensive rules. It can certainly nudge. It can protect small businesses, perhaps by encouraging agencies to exempt them from expensive rules. It can promote new rules to protect human rights and food safety, to prevent sexual violence, or to produce big increases in the fuel economy of cars. It can support efforts to protect against terrorist attacks. It can ask agencies to deregulate — to eliminate outmoded and costly regulatory requirements. It can promote efforts to prevent distracted driving, to prohibit discrimination on the basis of sexual orientation, or to use electronic health records (potentially saving both money and lives). In multiple ways, it can help save lives.
As it happens, I have known President Obama for many years, ever since 1991, when he started to teach at the University of Chicago Law School (my professional home for over a quarter of a century). A year or so before that, a friend of mine on the Chicago faculty said that we should consider hiring a sensational Harvard Law Review editor with whom he had been working. I remember the conversation well, in part because of the young editor’s unusual name. Chicago ended up hiring Barack Obama, who became a colleague and a friend. Blessed by that bit of good fortune, I was privileged to get my dream job.
Here is a possible approach to regulatory issues, one that can be tempting to some government officials: Ask which groups favor or oppose a proposed rule, who would be satisfied and who distressed, and whether a particular approach could be chosen that would please some without displeasing others. These questions are not exactly irrelevant; public officials need to answer them. But they are far from the most important matters. On the rare occasions when members of my staff pointed out the views of interest groups, I responded (I hope with humor, but also with a point), “That’s sewer talk. Get your mind out of the gutter.”
As OIRA administrator, I sought to focus instead on these questions: What do we actually know about the likely effects of proposed rules? What would be their human consequences? What are the costs and benefits? How can government avoid reliance on guesses and hunches? What do we know about what existing rules are actually doing for — or to — the American people? How can we make things simpler?
Science is often indispensable to answering these questions, and scientific experts, inside and outside the federal government, are indispensable too. To resolve disputes about the likely effects of rules, economists are essential. Some of the most helpful insights come from cutting-edge social science, including behavioral economics, which attempts to study how people actually act, rather than how standard economic theory supposes that they act. We have started to incorporate the resulting findings, and we need to do far more.
The plea for empirical foundations may seem obvious, a little like a plea for sense rather than nonsense, or for a day of sunshine rather than brutal cold. If so, think for a moment about Moneyball, the best-selling book (and Oscar-nominated film) about Billy Beane, who worked with his statistics-obsessed assistant, Paul DePodesta, to bring the Oakland Athletics into the top tier of baseball teams. In a short time, Beane and DePodesta transformed baseball itself, by substituting empirical data for long-standing dogmas, intuitions, and anecdote-driven judgments.
Consider this exchange:
“The guy’s an athlete, Bill,” the old scout says. “There’s a lot of upside there.”
“He can’t hit,” says Billy.
“He’s not that bad a hitter,” says the old scout.
“Yeah, what happens when he doesn’t know a fastball is coming?” says Billy.
“He’s a tools guy,” says the old scout…
“But can he hit?” asks Billy.
“He can hit,” says the old scout, unconvincingly.
Paul reads the player’s college batting statistics. They contain a conspicuous lack of extra base hits and walks.
“My only question,” says Billy, “if he’s that good a hitter why doesn’t he hit better?”…
Over and over the old scouts will say, “The guy has a great body,” or “This guy may be the best body in the draft.” And every time they do, Billy will say, “We’re not selling jeans here,” and deposit yet another highly touted player, beloved by the scouts, onto his shit list.
Too much of the time, those thinking about regulation have been a lot like old baseball scouts in the era before Billy Beane. Scouts said that someone is “a tools guy” or that he “has a great body.” Those seeking or resisting regulation say, “The public is very worried,” or “Polls show that the majority of people strongly favor protection against air pollution,” or “The industry has strong views,” or “The environmental groups will go nuts,” or “A powerful senator is very upset,” or “If an accident occurs, there will be hell to pay.” In government, I heard one or more of these claims every week.
None of these points addresses the right question, which is what policies and regulations will actually achieve. As we shall see, we keep developing better tools for answering that question. All over the world, regulatory systems need their own Billy Beanes and Paul DePodestas, carefully assessing what rules will do before the fact and testing them after the fact, and occasionally depositing some highly touted rules, beloved by regulators, onto the shit list.
We’re not selling jeans here.
From SIMPLER: The Future of Government (New York: Simon & Schuster). Copyright © 2013 by Cass Sunstein. Reprinted by permission of Simon & Schuster, Inc. All rights reserved.