When President Obama issued an executive order a few weeks ago aimed at reforming the way federal regulations are written and reviewed many people (including us) were skeptical that it would come to much. But there are signs that the stars really are aligned in favor of change. With the White House up for grabs in 2012, both parties are looking for ways to appeal to independent voters. And applying economic common sense to regulation fits nicely in this familiar process of pre-presidential election triangulation.
Indeed, there’s evidence that the trek to the center began shortly after the mid-term elections. For one thing, the regulators in a number of administration-controlled agencies seem to be on best behavior.
– The Agriculture Department has deep-sixed proposed limits on growing genetically modified alfalfa that were based solely on public misperceptions that the crop was unsafe.
– The EPA has responded to a slew of complaints about its plans to reduce emissions from commercial boilers and incinerators plans, asking the courts for more time to streamline rules that will cost billions annually to implement. And it has taken pity on the owners of a power plant in California, not demanding that they meet new air quality standards on a permit application that has been stalled since 2008.
– The Labor Department withdrew proposed rules that would have tightened noise limits in manufacturing and (separately) added to the paperwork burden for injury-reporting by small businesses.
– The FDA is reconsidering an initiative to increase the regulatory burden on makers of medical devices.
For another, the president has signaled his interest in broader business-friendly reforms – in particular, reform of the corporate income tax with its widely varying effective rates by industry, and medical malpractice, where the status quo has long been bitterly opposed by the Democrats’ friends in the trial bar. Let-us-reason-together talk is cheap, of course, and it’s still hard to imagine that the White House would push either item to the top of its policy agenda. What seems clear, though, is that the president is putting Congressional Republicans on notice. He won’t allow them to score easy points by proposing to cut unreasonable burdens on business or to increase the efficiency of private markets, and then wait for Democrats to wax nostalgic for the New Deal.
We’d add one last thought here. President Obama has a major asset in Cass Sunstein, as the administration’s face of the regulatory policy. Sunstein, the head of the White House Office of Information and Regulatory Affairs (a.k.a. the regulation czar) brilliantly staked out the high middle ground on regulation in Nudge, the book he co-authored that advocates change through gentle persuasion. Yet, as his recent performance before a hostile House committee suggests, he is not inclined to play doormat to Tea Party shock troops.