Is Obama the pro-regulation candidate? Not exactly

Updated

The Obama administration has passed fewer regulations than you might think.

Wednesday’s episode of Martin Bashir featured a discussion of Mitt Romney’s recent visit to the Business Roundtable luncheon, during which he vowed to reverse Obama’s ostensibly radical regulatory expansion.

“I will halt all the Obama-era regulations,” he told the assembled group of business leaders, adding, “I also mean to put in place a policy that no agency of government can add regulations without removing equal and opposite regulation.”

“I guess they forgot that freewheeling lack of regulation brought the country to its knees,” said host Martin Bashir. Guest Ken Vogel of Politico noted in response that “regulation has, of course, increased under the Obama administration.” That’s true in a sense. But in another sense, it’s really not.

As evidence for his claim about expanding regulation, Vogel cited the passage of the Dodd-Frank bill, a high-profile legislative attempt to strength financial oversight. However, ProPublica’s Jesse Eisinger has called the legislation a “lost opportunity,” writing: “The law did little to nothing to remedy the structural problems of our financial regulatory system.”

Once you step away from Dodd-Frank and health care reform, Obama’s record starts to look like one of significant deregulation. That’s largely thanks to the administration’s Office of Information and Regulatory Affairs, headed by legal scholar Cass Sunstein. According to Rena Steinzor, president of the Center for Progressive Reform, the OIRA “has changed 84 percent of environmental regulations, and 65 percent of other agencies’ regulations, and the change rate is worse than it was under George W. Bush.” Those changes largely serve to either weaken or entirely undo protective regulation, as argued in a CPR report called, “Behind Closed Doors at the White House: How Politics Trumps Protection of Public Health, Worker Safety, and the Environment.”

As a recent Bloomberg News article points out, the Obama administration’s big deregulatory push has received little of the attention it deserves—in part because business leaders are still wary of some of the government’s big-ticket regulatory initiatives. From the article:

“There’s still a lot of nervousness,” William Kovacs, senior vice president for regulatory affairs at the U.S. Chamber of Commerce, the largest business lobbying group, said in an interview. “They’re making the right statements on marginal items. There hasn’t been any statement that they’re not going forward on big issues that haven’t been concluded—it just leaves us uncertain.”

Sunstein, a former colleague of Obama’s at the University of Chicago law school, is a proponent of the regulatory philosophy of “libertarian paternalism.” As elaborated in his well-regarded book Nudge (co-written with economist Richard Thaler) libertarian paternalism seeks to avoid the necessity for heavy-handed regulation by creating incentives that subtly “nudge” people into whatever behavior the regulator desires. Sunstein recently won the 2012 Regulatory Innovation Award for work related to his theories.

Update: A staffer at NYU’s Institute for Policy Integrity passed along this critique of the CPR report cited above, from Michael Livermore, the institute’s executive director, and Richard Revesz, the dean of NYU’s law school. From the critique:

Another problem with the report is the metric used to determine OIRA’s impact. Basically, any case where some change has been made during the process of review is counted. But (as the authors acknowledge) this is far too broad a measure. Changes suggested by OIRA can be small-bore technical amendments in the text of the rule, they could be major policy changes, or anything in between. OIRA’s suggestions can also be directed to the justification for the agency’s decisions, strengthening the argument for the policy, rather than changing the policy itself.

The report does not distinguish among these different cases. Separating out the important changes from the minor changes would have been difficult and time consuming. The disclosure of the documents exchanged between OIRA and an agency during review is the agency’s responsibility, meaning that there are different policies carried out in different ways. This lack of a uniform, harmonized system of disclosure is a problem that OIRA should consider addressing. Ultimately, because the report groups all types of changes under a single heading, its findings on the extent of OIRA’s influence, including the claim that OIRA is playing a larger role under the President Obama than under the previous administration, is extremely suspect.

Barack Obama

Is Obama the pro-regulation candidate? Not exactly

Updated