Air Date: Week of January 25, 2002

The Bush White House is giving an obscure but powerful office unprecedented power to influence federal regulations. Anna Solomon-Greenbaum reports on what it could mean for the environment and public health.

Transcript

CURWOOD: In years past, the Office of Management and Budget has helped presidents gain more control over the conduct of federal departments and agencies. President Ronald Reagan effectively used OMB to rein in social spending programs, for example. Now President Bush is turning to OMB to provide a check on agency-driven environmental regulations. Living on Earth's Anna Solomon-Greenbaum explains how this obscure, but powerful, office is becoming a key arbiter in federal management of the environment.

SOLOMON-GREENBAUM: The Office of Management and Budget, or OMB, deals with the nitty gritty, often tedious, work of government. It writes the federal budget, and keeps an eye on how that money's spent at federal agencies. It's the sort of fine print that can make even the most dedicated policy wonk weary. But the OMB is also responsible for reviewing new federal regulations. It makes sure the agency developing a regulation has fully analyzed its costs and benefits, and backed it up with sound science. In the past, the OMB influenced regulations in the works. But under the Bush Administration, the OMB has started opening up existing regulations for review and it's asked the public to suggest regulations that should be changed or eliminated. The OMB received 71 comments, and created a high priority list of 23 regulations to review. More than half were environmental, and all but two of these came from the Mercatus Center, a think tank whose main purpose is to systematically review and comment on federal regulations. Susan Dudley helped author the center's comments to the OMB.

DUDLEY: We covered a broad range of issues, from drinking water to air quality to wetlands to snowmobiles.

SOLOMON-GREENBAUM: Dudley says regulations have a place, but only after the market has failed. She says John Graham, who heads the OMB's regulatory wing, understands this. And she says he's taking his job seriously, so much so--

DUDLEY: -- well, he may put us out of a job, if he makes the agencies do solid analysis that look at all the consequences, so that regulations really are based on good science, a balancing of benefits and costs, then we may have nothing left to comment on.

SOLOMON-GREENBAUM: That's what worries environmental activists like Frank O'Donnell. O'Donnell heads the Clean Air Trust. He says the public should understand the Mercatus Center has an agenda. Some of its biggest donors include energy mogul David Koch, as well as the now notorious Enron Corporation. The center's influence on the OMB, says O'Donnell, threatens the firewall between regulators and the regulated.

O'DONNELL: This office at the White House actually may be functioning as a conduit for the polluters and think tanks that the polluters underwrite, who want to undue these federal health and safety rules.

SOLOMON-GREENBAUM: O'Donnell says the OMB has instituted several new policies, including something called ìprompt letters.î These letters are just what they sound like; a way for the OMB to direct an agency to take a second look at a regulation, or to create a new one. O'Donnell says this type of sway is unprecedented.

O'DONNELL: It's really shifting the power from an agency like the EPA, that deals primarily with protection of public health and environment, to this office of OMB which is designed mainly to save money for business groups.

SOLOMON-GREENBAUM: John Graham who heads OMB's regulatory department says saving money for business groups means saving money for consumers. So, keeping regulations in check protects the public interest. The Clinton OMB, he says, fell short in this arena.

GRAHAM: There were exactly zero rules returned by the previous administration to agencies, due to poor quality analysis. In my first six months in the job, I have returned 17 rules to agencies. So we're trying to send a clear signal to the agencies that regulations are okay, but they need to be supported by sound science and economics.

SOLOMON-GREENBAUM: Graham says the new, proactive OMB won't automatically oppose any and all regulation. He points to rules on arsenic and diesel exhaust, which the White House directed the EPA to review.

GRAHAM: And there were a lot of people feeling that we were going to make decisions that would be harmful to the public health interest. But, in fact, what Administrator Whitman did is she used in-depth analysis of scientific information, in both cases to make the case that these regulations adopted in the previous administration should actually be retained. And weíve supported Administrator Whitman in both of those cases.

SOLOMON-GREENBAUM: But many rules did get changed or eliminated in the past year, and if history provides any clues, it may help to look back at the Reagan Administration, whose OMB made steep cuts to the EPA's budget, and also blocked the EPA from banning asbestos, and tried, unsuccessfully, to stop the agency from phasing out leaded gasoline and issuing stronger emissions standards for cars and trucks. During that time, the OMB's director of regulatory policy was Wendy Graham, who now heads the Mercatus Center, that's pushing the current OMB's regulatory review process. For Living on Earth, I'm Anna Solomon-Greenbaum in Washington.