Trump Regulatory Nominee Criticized for 'Modest Record' in Cost-Benefit Analysis

President Trump’s pick of an administrative law professor to run the White House Office of Information and Regulatory Affairs raises alarming questions about coming policy changes and the aggressive role that office plays in agency decisions, a liberal advocacy group said.

In a report titled “Trump’s New Regulatory Czar” released Thursday, policy scholars at the Center for Progressive Reform argued that George Mason University law professor Neomi Rao’s nomination “signals the Trump administration’s determination to buttress OIRA’s role as an impediment to sensible safeguards” in health, safety and the environment.

But the group also portrays reviews by OIRA—created under President Reagan but used actively by the Clinton and Obama administrations to review draft agency regulations for effectiveness—as “one-way ratchet[s]:” The changes the reviews demand are nearly always aimed at decreasing compliance costs, rather than at increasing regulatory benefits, the group said.

“OIRA’s small staff of economists reviews [draft] documents to assess – or perhaps more accurately, second-guess – the agency’s determination that a rule’s benefits to people or the environment ‘justify’ the costs of compliance, with an eye toward making changes to the rule’s substantive requirements that would minimize those costs,” the report stated.

Under Obama appointees Howard Shelanski and Cass Sunstein, OIRA, which is part of the Office of Management and Budget, introduced a “regulatory lookback” to weed out burdensome or obsolete rules.

But Trump’s nominee comes at a “critical juncture,” the group said. Citing what it called Rao’s “modest record” in scholarship in cost-benefit analysis, the Center for Progressive Reform argued that her “public statements reflect a deep distrust of federal agencies and their role as policymaking institutions within our constitutional system of government.”

They described her “conspicuous antipathy” for the Consumer Financial Protection Bureau and portrayed her as the central force behind Trump’s domestic policy agenda. Two key factors are likely to distinguish the Trump administration’s regulatory process from that of his predecessors, the report said: “The first is Trump’s selection of individuals -- such as EPA Administrator Scott Pruitt -- who are actively hostile to the missions of the agencies they will be running. The other is Trump’s two new anti-regulatory executive orders, which together make deregulation a top policy priority for the administration and a shared commitment among Trump-appointed officials to comply with those orders.”

The center portrayed OIRA as ignoring Congress and operating without much public input or transparency. The office “generally insists that agencies express the benefits of their actions in dollar terms, which often means important but intangible benefits -- things like rare illnesses prevented or cultural heritage preserved -- get undercounted,” the scholars said. “Without accurate accounting of these benefits, OIRA bean counters can insist that compliance costs be limited by weakening rules or delaying their compliance timelines.”

Rao’s work in administrative law was defended by Jerry Ellig, a senior research fellow at the Mercatus Center at George Mason, a free-market-based project. “She’s a highly knowledgeable, highly competent administrative lawyer, and these authors are too,” he told Government Executive. “They disagree on some questions of law. I would urge people to read her scholarship and make up their own minds.”

Ellig added that “the main thing the authors object to is the existence of OIRA,” a position taken by somebody whenever a Republican or Democratic administration names a new regulatory chief, he said. But administrations of both parties have found a use for the office, he noted.