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Many analysts are suggesting that the United States is about to enter a new regulatory era. They point to the need for more regulation on a host of issues, ranging from financial services to food supply. What kind of new federal regulations should we expect? How will political considerations affect
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the creation of new rules? A distinguished group of scholars and practitioners will answer these and other questions and offer advice to the new administration on designing better regulations.
Participating in the discussion will be Cary Coglianese, director of the Program on Regulation at the University of Pennsylvania Law School; Susan Dudley, the current administrator of the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget; two former OIRA administrators, John Graham (2001-2006) and Sally Katzen (1993-98); and Resources for the Future senior fellow Richard Morgenstern. Robert W. Hahn, executive director of the AEI Reg-Markets Center, will moderate.
| 2:30 p.m. | Registration | |
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| 2:45 | Panelists: | Cary Coglianese, University of Pennsylvania Law School |
| | | Susan Dudley, Office of Management and Budget |
| | | John Graham, Indiana University Sally Katzen, George Mason University |
| | Richard Morgenstern, Resources for the Future | |
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| | Moderator: | Robert W. Hahn, AEI Reg-Markets Center |
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| 4:30 | Adjournment | |
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Obama's "Tremendous Dilemma": The Future of Regulatory Policy Discussed at AEI
WASHINGTON, DECEMBER 12, 2008--Of the many challenges awaiting President-elect Barack Obama, repairing the nation's economy is the greatest. And at the core of the debate over the causes of and cure for the housing and financial market disorder is the widespread belief that deregulation is the culprit.
Panelists at an AEI Reg-Markets Center event on December 10, including the current and immediate past administrators of the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget, debated the proper role of regulation in the upcoming administration. They generally agreed that Obama will face significant pressure to impose new regulations, but they asserted that regulatory impact analysis should continue to be employed. Additionally, they acknowledged that Obama's pledge to make government more transparent could strengthen the regulatory analysis process and that climate change regulation will provide unique obstacles for future regulators.
According to Robert W. Hahn, a senior fellow at AEI and the executive director of the Reg-Markets Center, the current economic downturn provides Obama with both an opportunity and a challenge as he approaches regulatory policy: "The challenge is to avoid legislative and regulatory proposals that are likely to do more harm than good. The opportunity is to try to extend the move toward improving regulatory governance."
However, balancing challenge and opportunity could prove dicey. Indiana University's John Graham, a former OIRA administrator, said Obama will confront a "tremendous dilemma" when it comes to regulation. While the new president will face overwhelming pressure from Democrats and others pushing for more regulation, Graham argued, Obama's economic advisers are not of the same mold. "I don't think [Obama's] economic team--Larry Summers and colleagues--[are] going to be very receptive to a massive program that's going to reregulate the American economy," he said.
In order to improve the regulatory process in hard economic times, Graham suggested appointing a "thoughtful, careful OIRA administrator." Current OIRA administrator Susan Dudley recommended that her successor trust OIRA's career staff and respect the sound principles of benefit-cost analysis. "A good analysis discusses all of the outcomes," she said.
When it comes to climate change policy, a central Obama campaign pledge, Dudley and Graham noted the difficulty of analyzing the economic benefits and costs of proposed rules but advised future regulators to continue economic analysis. Graham suggested that Obama appoint a strong science adviser who is active in White House policy and risk-analysis debates. He also urged the new administration to include a "fairness review" to analyze the impact of regulations, particularly climate rules, from the perspective of the bottom quartile of earners.
Oversight of the regulatory process should also be more transparent, the panelists concluded. Resources for the Future senior fellow Richard Morgenstern said the public would benefit from greater electronic access to agencies' regulatory impact analyses (RIAs), reports that appraise the costs and benefits to society of proposed regulations. To increase their value to the public, RIAs should "spell out the physical terms of [regulatory] outcomes," he said. Morgenstern also proposed a greater period for public inspection of RIAs, calling the Environmental Protection Agency's current three-week window of access before a rule is promulgated too short.
Cary Coglianese of the University of Pennsylvania Law School also stressed the importance of greater access to regulatory analyses but offered words of caution regarding public participation. "Just because you can buy car parts on the internet," he said, "does not make you any more able to repair your own car."
--ADAM SCHMIDT
For more information about AEI's Reg-Markets Center, visit www.reg-markets.org.
For media inquiries, contact Veronique Rodman at 202.862.4870 or vrodman@aei.org.
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