Regulatory chief’s departure scrambles philosophical debate

The recently announced resignation of Cass Sunstein, President Obama’s close friend and top regulatory adviser, exposed mixed feelings for both the right and the left on the politically sensitive topic of regulation.

On Friday acting Budget Director Jeffrey Zients announced that the administrator of the White House Office of Information and Regulatory Affairs would return to his teaching post at Harvard University Law School at the end of August. Sunstein’s “emphasis on transparency and on innovative, low-cost regulatory tools contributed to the administration's Open Government Initiative; to numerous efforts to promote clear, simple disclosure to inform consumers and investors; and to creative reforms to increase public participation in the regulatory process and to promote accountability to the American public,” Zients wrote.

He praised Sunstein’s work on Obama’s governmentwide regulatory "look back," which was designed to streamline, improve and sometimes eliminate existing rules, and is said to have saved the government $10 billion over five years. “His leadership in promoting disciplined consideration of costs and benefits, and selection of the least costly alternative, helped generate, to date, well over $100 billion in net benefits” to businesses and consumers, Zients added.

Obama made his own statement, thanking Sunstein for three and a half years of “historic” accomplishments. “From putting in place lifesaving protections for America’s families to eliminating tens of millions of hours of paperwork burdens for our nation’s citizens and businesses, Cass has shown that it is possible to support economic growth without sacrificing health, safety and the environment,” Obama said.

A more complex response came from Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee who has frequently sparred with the Obama team on regulations. “While I’m disappointed that this administration has not made more substantial efforts to cut red tape and create jobs,” Issa said, “outgoing Administrator Cass Sunstein appeared to recognize the harm overly burdensome regulations inflict on economic growth and job creation -- although he was not able to stop the tsunami of regulations enacted by the Obama administration.”

To the surprise of some who have observed the business community’s vocal assault on the Obama approach to regulation, two major corporate lobbies praised Sunstein.

The U.S. Chamber of Commerce “has enjoyed a good working relationship with Cass Sunstein and we wish him well in his return to Harvard Law,” Bruce Josten, the Chamber’s executive vice president for government affairs, told Bloomberg News. “Cass accepted the input of business, sought balance and understood that regulations do have costs,” said John Engler, the former Michigan Republican governor and head of the National Association of Manufacturers who is now the Business Roundtable’s president. “We hope his replacement will strike the same tone.”

Groups on the left, however, were less laudatory. "With Sunstein's departure, the administration should take this opportunity to shift gears from their focus on `look back’ reviews to more aggressively pursuing a forward-looking agenda of modernizing regulatory standards that are unacceptably out of date in areas such as food, consumer products and workplace safety,” said Amit Narang, regulatory policy advocate for the Congress Watch division of Public Citizen.

Rena Steinzor, president of the Center for Progressive Reform, which has long criticized Sunstein’s office for “politicizing” regulation, said in a statement: “Sunstein brought impressive credentials and a personal relationship with the president to his job . . . But in the final analysis, Sunstein has continued the Bush administration’s tradition of using the office to block needed health and safety protections disliked by big business and political contributors. Worse, the narrative that Sunstein helped craft about the impact of regulations on American life -- that regulatory safeguards are fundamentally suspect -- was discordant with the rest of the president's agenda and the arguments he makes for his reelection.”

Steinzor, a law professor at the University of Maryland, proposed that Obama wait out the campaign season before naming a successor and “rethink” the role of OIRA.

Office of Management and Budget spokeswoman Moira Mack said in an email to Government Executive that “the president’s regulatory approach has been consistent from the start of the administration and we intend to continue that approach moving forward, including careful analysis of costs and benefits, as well as a commitment to protecting the health, welfare and safety of the American people at the same time that we promote economic growth.”

The White House has named as acting OIRA chief Boris Bershteyn, currently OMB’s general counsel, who also has served on the Council of the Administrative Conference of the United States, an independent federal agency dedicated to improving the administrative process through consensus-driven applied research.