In the News

Of course, since the EPA was created in 1970, the U.S. has seen recessions, bubbles, flush times, and dire straits. But not one of these macro episodes was caused by anything the EPA has done. Instead, they were caused by financial crises, like the 2007 mortgage crisis and the savings and loan crisis in the late 1980s, or external shocks, like the 1970s oil embargo (made all the worse by the country’s addiction to gasoline).

But whenever the economy declines, the same anti-environmental rhetoric is trotted out, with those on the right calling the EPA a bunch of “hot shot junior lawyers and zealots” (Stockman, 1980s), or even worse, “the Gestapo of government” (Tom DeLay, 1990s), and accusing the agency of wanting to “put the American economy in a straightjacket” (Joe Barton, 2010s).

How many times must these dire predictions about economic doom from environmental protection be proven untrue before we collectively stop listening?

President Obama’s new Executive Order has the potential to trim unnecessary rules while boosting needed protections. Adequate protection for the environment, public health, and consumers is essential, but periodic review can help ensure they stay up to date.

Independent agencies are charged with regulating some of the most important issues facing the country like Internet policy and consumer safety. Today’s move will help improve those regulatory programs by setting up a process of periodic review, while respecting the discretion of these agencies.

Anyone who’s shopped for health insurance knows what a headache the process can be. The disorienting maze of features, benefits, and coverage options can leave consumers under-protected even when they’ve overpaid.

The federal Department of Health and Human Services (HHS) is trying to create a clearer, better menu for policy holders to order from. Their idea is “Transparency Reporting,” a move aimed at streamlining the health insurance purchasing process by asking companies to summarize their policies in easier-to-understand ways.

In January, President Obama issued a call for all federal agencies to review their existing regulations, looking for rules that had grown outdated, ineffective, or insufficient over time. Back then, there was much discussion over whether the move was a gift to business or a robust defense of strong protections even in a downturned economy.

According to some, the housing bubble came crashing down in the fall of 2008 partially due to the predatory lending practices of mortgage banks. Part of the problem may have been consumer confusion when it came to the fine print of complex financing arrangements. Unknowingly, homebuyers might have signed on for more than they could manage — a situation that consumer education could have ameliorated.

“If it’s still on the books, there’s probably a reason for it,” says Michael Livermore, executive director of the Institute for Policy Integrity at New York University’s School of Law. He does allow that “there are a ton of regulations that could be made more efficient, where we could achieve the same goal at lower costs.”

Thirty years ago, President Reagan put cost-benefit analysis at the heart of how agencies like the EPA and OSHA do business and initiated one of the most important recent developments in how the federal government works. In a 1981 executive order, Reagan instructed the Office of Information and Regulatory Affairs (OIRA), which is part of the White House Office of Management and Budget, to oversee all major agency regulations to make sure they met a cost-benefit standard. This move was heavily fought by protection oriented groups, like environmentalists, because they saw it as a backdoor for favoring industry at the expense of the public.

Michael Livermore, a law professor at New York University and a close observer of the regulatory process, said their involvement suggests the White House is keeping tabs on a proposal with broad impacts — both costs for utilities and health benefits for the public.

“These are not the kinds of folks who spend their time on run-of-the-mill permit applications,” said Livermore, who is executive director of NYU’s Institute for Policy Integrity.

Regulation has become a hot topic in recent weeks. There have been executive orders to reform them, hearings to scrutinize them and budgets to defund them. But in all these forums, one side of the balance sheet is often absent — the fact that regulations create significant economic benefits.

As expected, deficit reduction plays a large part in President Obama’s budget proposal, released earlier in the week. In line with predictions, this includes slashing the Low-Income Home Energy Assistance Program’s (LIHEAP) funding nearly in half, from $5.1 billion to $2.57 billion.

This is a real negative for many people who are struggling to make ends meet, and who will have one less source of support. But another downside is that this move passes up on an opportunity to implement a long-term strategy for more sustainable energy use that will also benefit the low-income recipients of LIHEAP aid.