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WASHINGTON >> Cass R. Sunstein, who wielded enormous power as the White House overseer of federal regulation, came to Washington to test his theories of human behavior and economic efficiency in the laboratory of the federal government. Now he is departing with a record that left many business interests disappointed and environmental, health and consumer advocates even more unhappy.
Sunstein, 57, who projected an air of disheveled academic detachment while becoming one of the Obama administration’s most provocative figures, announced Friday that he was leaving government to return to Harvard Law School.
Applying a cost-benefit analysis to his reviews of proposed rules, he said his goal was simply to make the nation’s regulatory system “as sensible as possible.”
His critics saw it differently.
“Cass Sunstein is the most well-connected and smartest guy who’s ever held the job,” said Rena Steinzor, president of the Center for Progressive Reform and a professor at the University of Maryland Carey School of Law. “But he’s also done untold damage.”
As administrator of the White House Office of Information and Regulatory Affairs, he reviewed the rules implementing President Barack Obama’s health care act and the Dodd-Frank financial regulatory reform law. He backed major environmental initiatives, including higher fuel efficiency standards for cars and trucks and new toxic emissions rules for power plants. He approved the revamping of the decades-old food pyramid (it is now a “plate”), the tightening of salmonella rules for eggs and a crackdown on prison rape. And he brokered a deal between appliance manufacturers and the Energy Department to make refrigerators more energy efficient.
A close friend of Obama’s from their days on the University of Chicago Law School faculty, Sunstein had his choice of high-profile positions in the administration. He opted for the obscure Office of Information and Regulatory Affairs (familiarly known as OIRA, pronounced “oh, Ira”), a unit of the White House Office of Management and Budget that reviews every regulation proposed by an executive branch agency.
Few proposed rules escaped his gaze or his editor’s pen. Of the hundreds of regulations issued by the administration as of late last year, three-quarters were changed at OIRA, often at the urging of corporate interests, according to an analysis from the Center for Progressive Reform, a liberal-leaning group that monitors federal regulation. For rules from the Environmental Protection Agency, the figure was closer to 80 percent, the group found. In virtually every case, the rule was weakened, the group claimed.
Steinzor cited Sunstein’s role in the killing of the EPA’s proposed tightening of the standard for ozone pollution, the indefinite delay of rules governing coal ash disposal and the withdrawal earlier this year of a proposed update of child agricultural labor standards.
Sunstein’s recommendations carry extraordinary weight, White House officials said, but the ultimate decisions in those cases were made by the president, his senior political advisers or Cabinet officers.
The White House offered no explanation for the timing of Sunstein’s departure. He declined to comment for this article.
Under Sunstein, the Obama administration has issued fewer regulations at this point in the president’s term than George W. Bush or Bill Clinton did. But compared with Bush’s first term, the Obama administration has finalized roughly 30 more “economically significant” regulations — those costing $100 million or more.
Sunstein emphasizes the economic benefits of the regulations he has vetted, saying the net benefits have exceeded $91 billion, a figure he says far surpasses the benefits of rules issued by previous administrations.
“Careful analysis of costs and benefits can help show when regulation is good, and when regulation isn’t so good,” he said in a recent interview. Any cost-benefit analysis, of course, includes subjective judgments about costs and difficult calculations, like the value of a human life.
These statistics can be misleading because the raw number of regulations an administration implements does not necessarily indicate whether the administration is more or less in favor of restraints on business.
Obama credited Sunstein with putting in place a regulatory system that protected Americans while eliminating “tens of millions of hours of paperwork burdens” for businesses and citizens.
“Cass has shown that it is possible to support economic growth without sacrificing health, safety and the environment,” the president said in a statement Friday.
In addition to reviewing proposed rules, Sunstein’s office also conducted a “look back” at every regulation already on the books, with an eye toward slashing outdated rules and streamlining the system. The initiative has already started to bear fruit. Federal agencies have so far proposed 500 changes, with 100 enacted or close to being finalized.
Business lobbies and Republicans in Congress complain frequently about “job-killing” regulations, citing such rules as the EPA’s new standard for carbon emissions from power plants (recently upheld by a federal appeals court) and the Department of Labor’s new worker-safety rules. But Sunstein won grudging praise from conservatives, who said he was more approachable and realistic about the costs of doing business than many top officials in federal agencies.
“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,” Rep. Darrell Issa of California, the Republican chairman of the House Oversight and Government Reform Committee, said in a statement.
Over the past year, as the election neared, the issuance of new regulations slowed and many of them appeared to be designed to please business, or at least not alienate it.
Bill Kovacs, a senior vice president of the U.S. Chamber of Commerce, said he was skeptical of the administration’s motives but gratified nonetheless. “It’s probably the political season,” he said. “But I think we are hopeful that the administration is beginning to understand that the regulatory process has consequences.”
Mitt Romney, the presumptive Republican presidential nominee, has accused Obama of causing business uncertainty and stifling economic growth through overzealous regulation. He promised to repeal the Obama-era regulatory laws and hold the cost of new regulations at zero.
The polymathic Sunstein has written or co-written dozens of books and articles on subjects ranging from climate change to animal rights and is one of the most frequently cited legal thinkers in America. One of his most influential popular works, written with Richard H. Thaler, the behavioral economist, was “Nudge: Improving Decisions About Health, Wealth, and Happiness.” The book’s thesis is that gentle, low-cost signals — like putting fruit at the beginning rather than the end of a cafeteria line, or making participation in retirement savings plans the default position rather than an option — are more effective than the heavy hand of government regulation.
In returning to Harvard Law School, Sunstein will direct the new Program on Behavioral Economics and Public Policy.
Sunstein’s wife, Samantha Power, a Pulitzer Prize winner for her writing on genocide, also works at the White House, as a senior director for multilateral affairs and human rights. She said she still planned to return to the post after a maternity leave.
The White House said Boris Bershteyn, the budget office’s general counsel, will serve as interim regulatory chief.
