The Bush administration regulatory record

Regulation, Winter, 2004 by Susan E. Dudley

The Mercatus Center at George Mason University is an education, research, and outreach organization that works with scholars, policy experts, and government officials to bridge academic theory and real-world practice. The center's Regulatory Studies Program works within the university setting to improve the state of knowledge and debate about regulations and their impact on society. More information about the center can be found on the Web at www.mercatus.org. For the latest federal regulatory developments, visit www.regradar.org.

EVERY YEAR, OVER 60 FEDERAL DEPARTments, agencies, and commissions employ a combined staff of over 240,000 full-time employees to write and enforce federal regulations. Combined, the agencies issue thousands of new rules annually and the on-budget costs for their regulatory operations in fiscal year 2004 will exceed $39 billion. The social costs of complying with those regulations are likely to be 30 or more times larger.

Recognizing the impact regulations have on our daily lives, every president since Richard Nixon has established regulatory oversight and review procedures within the Executive Office of the President. When he took office in 2000, President George W. Bush chose to operate under procedures established in 1993 by President Bill Clinton's Executive Order 12866. The Clinton order articulated a sound approach to regulatory development and, by leaving it in place, Bush made the point that the principles of good regulation are nonpartisan--they only need to be observed and enforced.

By many measures, the Bush administration has observed and enforced those principles. The Office of Information and Regulatory Affairs (OIRA), headed by John D. Graham, has reinvigorated the review process, sending back to the agencies more rules during the first year of the Bush administration than were returned during the entire eight years of the Clinton administration. Graham has also emphasized transparency in the review process, making available on OIRA's Web site the activities of the office (including meetings). He sends public letters to agencies explaining his reasons for returning draft rules, "prompt letters" to publicly encourage agency action, and "post-review letters" to describe remaining problems in some rules OIRA clears for publication.

This level of activity contrasts sharply with the previous administration, in which OIRA rarely challenged an agency initiative on any grounds. However, OIRA's paradigm seems to be that smarter regulators can devise solutions to perceived problems. The office emphasizes benefit-cost and cost-effectiveness analysis, and advancing public health. While this strategy holds the potential for making large improvements in regulatory effectiveness, there is little evidence that OIRA advocates for market solutions, property rights, individual choice and responsibility, or federalism.

A QUICK START

President Clinton's final months in office generated an unprecedented volume of new rules and regulations dictating how American businesses, citizens, and state and local governments must behave. Like Cinderella leaving the ball, many of the more than 7,000 presidential appointees at executive branch departments and agencies hurried to issue last-minute "midnight regulations" before they turned back into ordinary citizens. Using the number of Federal Register pages as a proxy, President Clinton's regulatory activity in the post-election quarter (November, December, and January) represented a 52.5 percent increase over the volume of regulation issued during the same three months of his previous seven years (1993-1999).

In a January 20, 2001 memorandum, White House Chief of Staff Andrew Card directed all federal agencies to withdraw regulations not yet published. The agencies were also instructed to postpone for 60 days the effective date of recently issued but not yet effective regulations in order to give new appointees time to review them before they undertook to enforce them.

After that initial rally, however, principle appeared to give way to politics, and the final disposition of many of the Clinton midnight regulations, including the Environmental Protection Agency's controversial arsenic standards, proved little different from the Clinton version. There are some notable exceptions, including the Forest Service's ban on all new roads in national forests, the EPA's Total Maximum Daily Load (TMDL) rule addressing water quality in lakes and streams, the Department of Interior's ban on snowmobiles in national parks, and the Occupational Safety and Health Administration's ergonomics rule.

MIDNIGHT REGULATIONS One prominent Clinton midnight regulation, the "roadless rule," would have imposed a blanket ban on roads in some national forests. While it is true that the incentives inherent in national forest policies encouraged intrusive logging roads and clearcutting that have damaged ecosystems, the proscription on roads failed to consider how to alter the underlying incentives or that temporary, low-impact roads in roadless areas may be needed for forest health or ecosystem restoration. The Bush administration withdrew the roadless rule and proposed in its place an alternative that allows state governors to petition the Forest Service to ban roads in national forests within their state. While this may appear to be a more federalist approach, as long as the underlying incentive structure remains unchanged and national taxpayers are asked to foot the bill for the roads, it is unlikely to solve the problems that plague national forests.