It’s perhaps the most important job no one has ever heard of. Yesterday, Harvard professor Cass Sunstein was confirmed by the Senate as the administrator of the White House Office of Information and Regulatory Affairs, otherwise known as the nation’s “regulatory czar.” Nowadays, the mere mention of a czar tends to get eyes rolling in Washington, as President Obama has crowned more czars than did the Romanovs. Yet this czar-dom isn’t a newly minted Obama Administration post. The job goes back to President Reagan. The mission: to be the regulator’s regulator, with the power to block proposed new regulations unless their costs are justified by their benefits.
During the Bush Administration, OIRA and its administrators — John Graham and Susan Dudley — were favorite targets of the left, which saw them as imposing unwanted scrutiny on regulatory schemes. While hardly as powerful as the pro-regulation camp painted it — regulatory burdens increased significantly during Bush’s tenure — OIRA provided a key instititional hurdle for those wanting to impose new regulations.
But what role will OIRA play under Sunstein? Sunstein is certainly no deregulator, expressing disdain for those who argue for (as he puts it): “markets markets markets, markets markets markets.” And he’s written favorably on quite a few highly intrusive and even dangerous regulatory ideas (ranging from a Fairness Doctrine for the Internet and legal rights for animals).
Yet, OIRA has little ability to push forward its own agenda items — its power is in its ability to stop proposals by line regulatory agencies. And Sunstein is unlikely to be a mere rubber stamp for the pet plans of other regulators. He has long been a leading academic proponent of cost-benefit scrutiny of proposed new rules, and hasn’t shied from the regulatory Shibboleth’s of the left, questioning the constitutionality of the Occupational Health and Safety Administration and the need for climate change rules.) For this reason, many on the pro-regulation left were appalled by his selection.
In any case, we should know more about Sunstein’s role soon. Several months ago, the Obama Administration began a thorough review of OIRA, calling for public comment on the office’s authority, processes, and methods. Among the options: reducing the office’s authority to block new rules. This is Sunstein’s first test. Will he allow the system of regulatory review to be weakened, giving regulatory agencies a free hand? Or will he defend — or even expand — OIRA’s ability to challenge rules and force agencies to justify their cost?
Its a decision worth paying attention to. And ironically, it’s one where defenders of free markets should be rooting for, rather than against, a czar.