Executive Order

Bush Directive Increases Sway on Regulation
By ROBERT PEAR | The New York Times | January 30, 2007

WASHINGTON, Jan. 29 — President Bush has signed a directive that gives the White House much greater control over the rules and policy statements that the government develops to protect public health, safety, the environment, civil rights and privacy.

In an executive order published last week in the Federal Register, Mr. Bush said that each agency must have a regulatory policy office run by a political appointee, to supervise the development of rules and documents providing guidance to regulated industries. The White House will thus have a gatekeeper in each agency to analyze the costs and the benefits of new rules and to make sure the agencies carry out the president’s priorities.

This strengthens the hand of the White House in shaping rules that have, in the past, often been generated by civil servants and scientific experts. It suggests that the administration still has ways to exert its power after the takeover of Congress by the Democrats.

The White House said the executive order was not meant to rein in any one agency. But business executives and consumer advocates said the administration was particularly concerned about rules and guidance issued by the Environmental Protection Agency and the Occupational Safety and Health Administration.

In an interview on Monday, Jeffrey A. Rosen, general counsel at the White House Office of Management and Budget, said, “This is a classic good-government measure that will make federal agencies more open and accountable.”

Business groups welcomed the executive order, saying it had the potential to reduce what they saw as the burden of federal regulations. This burden is of great concern to many groups, including small businesses, that have given strong political and financial backing to Mr. Bush.

Consumer, labor and environmental groups denounced the executive order, saying it gave too much control to the White House and would hinder agencies’ efforts to protect the public.

Typically, agencies issue regulations under authority granted to them in laws enacted by Congress. In many cases, the statute does not say precisely what agencies should do, giving them considerable latitude in interpreting the law and developing regulations.

The directive issued by Mr. Bush says that, in deciding whether to issue regulations, federal agencies must identify “the specific market failure” or problem that justifies government intervention.

Besides placing political appointees in charge of rule making, Mr. Bush said agencies must give the White House an opportunity to review “any significant guidance documents” before they are issued.

The Office of Management and Budget already has an elaborate process for the review of proposed rules. But in recent years, many agencies have circumvented this process by issuing guidance documents, which explain how they will enforce federal laws and contractual requirements.

Peter L. Strauss, a professor at Columbia Law School, said the executive order “achieves a major increase in White House control over domestic government.”
“Having lost control of Congress,” Mr. Strauss said, “the president is doing what he can to increase his control of the executive branch.”

Representative Henry A. Waxman, Democrat of California and chairman of the Committee on Oversight and Government Reform, said: “The executive order allows the political staff at the White House to dictate decisions on health and safety issues, even if the government’s own impartial experts disagree. This is a terrible way to govern, but great news for special interests.”

Business groups hailed the initiative.

“This is the most serious attempt by any chief executive to get control over the regulatory process, which spews out thousands of regulations a year,” said William L. Kovacs, a vice president of the United States Chamber of Commerce. “Because of the executive order, regulations will be less onerous and more reasonable. Federal officials will have to pay more attention to the costs imposed on business, state and local governments, and society.”

Under the executive order, each federal agency must estimate “the combined aggregate costs and benefits of all its regulations” each year. Until now, agencies often tallied the costs and the benefits of major rules one by one, without measuring the cumulative effects.

Gary D. Bass, executive director of O.M.B. Watch, a liberal-leaning consumer group that monitors the Office of Management and Budget, criticized Mr. Bush’s order, saying, “It will result in more delay and more White House control over the day-to-day work of federal agencies.”

“By requiring agencies to show a ‘market failure,’ ” Dr. Bass said, “President Bush has created another hurdle for agencies to clear before they can issue rules protecting public health and safety.”

Wesley P. Warren, program director at the Natural Resources Defense Council, who worked at the White House for seven years under President Bill Clinton, said, “The executive order is a backdoor attempt to prevent E.P.A. from being able to enforce environmental safeguards that keep cancer-causing chemicals and other pollutants out of the air and water.”

Business groups have complained about the proliferation of guidance documents. David W. Beier, a senior vice president of Amgen, the biotechnology company, said Medicare officials had issued such documents “with little or no public input.”

Hugh M. O’Neill, a vice president of the pharmaceutical company Sanofi-Aventis, said guidance documents sometimes undermined or negated the effects of formal regulations.

In theory, guidance documents do not have the force of law. But the White House said the documents needed closer scrutiny because they “can have coercive effects” and “can impose significant costs” on the public. Many guidance documents are made available to regulated industries but not to the public.

Paul R. Noe, who worked on regulatory policy at the White House from 2001 to 2006, said such aberrations would soon end. “In the past, guidance documents were often issued in the dark,” Mr. Noe said. “The executive order will ensure they are issued in the sunshine, with more opportunity for public comment.”

Under the new White House policy, any guidance document expected to have an economic effect of $100 million a year or more must be posted on the Internet, and agencies must invite public comment, except in emergencies in which the White House grants an exemption.

The White House told agencies that in writing guidance documents, they could not impose new legal obligations on anyone and could not use “mandatory language such as ‘shall,’ ‘must,’ ‘required’ or ‘requirement.’ ”

The executive order was issued as White House aides were preparing for a battle over the nomination of Susan E. Dudley to be administrator of the Office of Information and Regulatory Affairs at the Office of Management and Budget.

President Bush first nominated Ms. Dudley last August. The nomination died in the Senate, under a barrage of criticism from environmental and consumer groups, which said she had been hostile to government regulation. Mr. Bush nominated her again on Jan. 9.

With Democrats in control, the Senate appears unlikely to confirm Ms. Dudley. But under the Constitution, the president could appoint her while the Senate is in recess, allowing her to serve through next year.

Some of Ms. Dudley’s views are reflected in the executive order. In a primer on regulation written in 2005, while she was at the Mercatus Center of George Mason University in Northern Virginia, Ms. Dudley said that government regulation was generally not warranted “in the absence of a significant market failure.”

She did not return calls seeking comment on Monday.

Copyright 2007 The New York Times Company

Letters to the Editor | The New York Times Company | February 1, 2007 | When Regulation Met Politics

To the Editor:
While the Bush administration continues its quixotic mission to bring democracy to Iraq, it continues to find innovative ways to limit democracy here at home.
Under the pretext of shedding more light on the regulations and guidance documents issued by regulatory agencies, the White House, you report, is requiring federal agencies to have “a regulatory policy office run by a political appointee, to supervise the development of rules and documents providing guidance to regulated industries.” This effort has but one purpose: to subvert the traditional regulatory process under which “civil servants and scientific experts” have taken the lead in shaping rules interpreting laws passed by Congress. The Bush administration’s initiative would undermine our civil service system and further politicize the administrative process, while adversely affecting the ability of regulatory agencies to protect the public.
Jay N. Feldman
Port Washington, N.Y., Jan. 30, 2007
•
To the Editor:
President Bush’s directive is simply another example of the president politicizing processes that have historically been nonpartisan. It demonstrates once again his distrust of science and empirical evidence.The statement by Jeffrey A. Rosen, the White House Office of Management and Budget’s general counsel, that “this is a classic good-government measure that will make federal agencies more open and accountable” is pure Orwellian Newspeak. It is the opposite of good government. It is a mechanism to allow big business to avoid regulations that help the people in general but might hurt their bottom line.
Gordon Nash
Oakland Gardens, Queens,Jan. 30, 2007
•
To the Editor:
So the Bush administration has finally codified its longtime practice of politicizing the promulgation of new government regulations.No doubt the political appointees who will oversee environmental, health, safety and civil rights regulations are cost-conscious folks. So while they consider the financial impact of proposed regulations on their wealthy backers, will they also think about the health costs to all citizens of not enforcing clean air standards, the ecological costs of not protecting wetlands, or the environmental costs of not addressing global warming? I doubt it.
Edward M. Pawlak
West Hartford, Conn., Jan. 30, 2007
•
To the Editor:
I don’t get it. When President Vladimir V. Putin of Russia strengthens his capacity to regulate government operations, Bush administration hawks rightly question his respect for critical legislative controls. When a weakened President Bush uses similar tactics, however, these same people suggest that an authoritative executive branch is both necessary and beneficial. Is this the difference a “democracy” makes?
Jaye Jones
Chicago, Jan. 30, 2007
•
To the Editor:
Now President Bush will require agencies to identify “the specific market failure” that justifies government intervention. Markets allow many good things to happen, and when a market failure can be identified, intervention is often justified. But should market failure be the only reason for government intervention?
Such a rule implies that markets are not just good, but the singular ultimate goal of human society. That philosophy sounds like yet another religion that the Bush administration wants us to take on faith.
Bruce Burger
Seattle, Jan. 30, 2007
•
To the Editor:
I guess we can kiss goodbye to the Republican commitment to get government off our backs.
Jeff Peters
Sherman Oaks, Calif., Jan. 30, 2007

February 5, 2007 | OP-ED COLUMNIST
The Green-Zoning of America
By PAUL KRUGMAN

One of the best of the many recent books about the Iraq debacle is Rajiv Chandrasekaran’s “Imperial Life in the Emerald City.” The book tells a tale of hopes squandered in the name of politicization and privatization: key jobs in Baghdad’s Green Zone were assigned on the basis of loyalty rather than know-how, while key functions were outsourced to private contractors.

Two recent reports in The New York Times serve as a reminder that the Bush administration has brought the same corruption of governance to the home front. Call it the Green-Zoning of America.

In the first article, The Times reported that a new executive order requires that each agency contain a “regulatory policy office run by a political appointee,” a change that “strengthens the hand of the White House in shaping rules that have, in the past, often been generated by civil servants and scientific experts.” Yesterday, The Times turned to the rapid growth of federal contracting, fed “by a philosophy that encourages outsourcing almost everything government does.”

These are two different pieces of the same story: under the guise of promoting a conservative agenda, the Bush administration has created a supersized version of the 19th-century spoils system.

The blueprint for Bush-era governance was laid out in a January 2001 manifesto from the Heritage Foundation, titled “Taking Charge of Federal Personnel.” The manifesto’s message, in brief, was that the professional civil service should be regarded as the enemy of the new administration’s conservative agenda. And there’s no question that Heritage’s thinking reflected that of many people on the Bush team.

How should the civil service be defeated? First and foremost, Heritage demanded that politics take precedence over know-how: the new administration “must make appointment decisions based on loyalty first and expertise second.”

Second, Heritage called for a big increase in outsourcing — “contracting out as a management strategy.” This would supposedly reduce costs, but it would also have the desirable effect of reducing the total number of civil servants.

The Bush administration energetically put these recommendations into effect. Political loyalists were installed throughout the government, regardless of qualifications. And the administration outsourced many government functions previously considered too sensitive to privatize: yesterday’s Times article begins with the case of CACI International, a private contractor hired, in spite of the obvious conflict of interest, to process cases of incompetence and fraud by private contractors. A few years earlier, CACI provided interrogators at Abu Ghraib.

The ostensible reason for politicizing and privatizing was to promote the conservative ideal of smaller, more efficient government. But the small-government rhetoric was never sincere: from Day 1, the administration set out to create a vast new patronage machine.

Those political appointees chosen for their loyalty, not their expertise, aren’t very good at doing their proper jobs — as all the world learned after Hurricane Katrina struck. But they have been very good at rewarding campaign contributors, from energy companies that benefit from lax regulation of pollution to pharmaceutical companies that got a Medicare program systematically designed to protect their profits.

And the executive order described by The Times will make it even easier for political appointees to overrule the professionals, tailoring government regulations to suit the interests of companies that support the G.O.P. — or to give lucrative contracts to people with the right connections.

Meanwhile, never mind the idea that outsourcing of government functions should be used to promote competition and save money. The Times reports that “fewer than half of all ‘contract actions’ — new contracts and payments against existing contracts — are now subject to full and open competition,” down from 79 percent in 2001. And many contractors are paid far more than it would cost to do the job with government employees: those CACI workers processing claims against other contractors cost the government $104 an hour.

What’s truly amazing is how far back we’ve slid in such a short time. The modern civil service system dates back more than a century; in just six years the Bush administration has managed to undo many of that system’s achievements. And the administration still has two years to go.