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Regulatory analysis
Q: With regard to the White House and OMB, what were your perceptions of the Regulatory Analysis Review Group (RARG)?
MR. COSTLE: Presidents have a legitimate concern about how regulatory agencies behave. There were legitimate concerns about the cumulative effect of regulation. Regulation was becoming a bigger and bigger function of the federal government. Government no longer just defended us, built ships and flew planes. It told the private economy how to behave on certain matters, from child labor to environmental protection. And nowhere was there a single source that would tell what was coming down the road from the plethora of federal agencies, or what the cost might be.
Then there was the matter of coordination. Three or four different agencies regulated lead. Was there consistency in what OSHA (Occupational Safety and Health Administration) and EPA were doing? Was OSHA cleaning up the factory floor only to push the lead out the smokestack into the ambient environment?
Although the issues were legitimate, the regulators themselves tended to see outside questioners as standing in the courthouse door. And, in fact, the White House under previous administrations had been largely unsympathetic to regulatory agencies. OMB had been used to create a choke point. In the Nixon years, the White House was very responsive to big business interests. That said, however, realize that business interests are going to make themselves heard in any White House. They have the clout to get an audience. How much sympathy they get is another matter. We were dealing with a White House that was more sympathetic to us than to the industry that was crabbing about us.
Q: On issues such as lead, did you try to win more coordinating authority for EPA? If you had three different agencies regulating in a particular area, did you see EPA as needing to be the primary agency on those issues?
MR. COSTLE: As I said, in Washington everyone wants to coordinate, but nobody wants to be coordinated. Neither industry nor environmental groups are averse to pitting one agency against another. I argued that the right way to answer legitimate questions was to have the regulators themselves advocate for competent reform. Rather than cede veto authority to the White House -- which was legally questionable and could lead to litigation -- I persuaded the White House to create a regulatory council, a forum in which the regulators themselves could address the issues. I further suggested that everybody develop a regulatory calendar, so that we would have a central place to learn what was coming down the road. So I viewed RARG as legitimate Presidential oversight.
I found that the RARG staff asked good questions; they were largely sympathetic. Even the economists realized we had a job to do. A major problem with the economics point of view is that it can easily be perverted into a prescription for doing nothing. In some respects, economics holds out false hopes of introducing a level of certainty that simply does not exist in reality. Nobody would argue against the use of cost/benefit analysis or quantitative risk assessment to help organize the limited data you usually have. But when it gives the false sense of security that decisions are certitudes rather than judgment calls, I think it serves ill purposes rather than good.
RARG's effect on rulemaking, if any, was probably to sharpen us up in doing our homework. We were never contravened. I always conceived of my job as representing the President, and I was never instructed to do anything different than what I was proposing. Of course, knowing RARG wasn't just a hit squad trying to throttle us made a huge difference between the way the Quality-of-Life review and RARG were perceived.
I also started the Interagency Regulatory Liaison Group (IRLG), involving EPA, FDA (Food and Drug Administration), OSHA, and the Consumer Product Safety Commission (CPSC). We analyzed all the research being done under the auspices of each of the agencies and discovered it was like a piece of Swiss cheese. There were important issues that none of us were looking at. We told OMB, "If you want better regulation, you'd better fund the science research." But OMB gummed the bullet; it didn't have the brass to tell NIH (National Institutes of Health) to start paying more attention to serving the regulators' needs.
Although it fell apart when Reagan took office, RARG was a worthy effort. The process was designed to create a cooperative environment among the regulators and to address issues, particularly economics, without the kind of political tension that had existed and has now emerged again.
One of the legitimate concerns that I and other regulators had with RARG was -- while it's one thing to deal with a Charlie Schultz, Fred Kahn or another broad-gauge, largely sympathetic person -- it's quite another to deal with an ideologue like a Dave Stockman. Whatever arguments the former might have had with basic statutes, they understood what was involved. More than anything they wanted to be assured we were using good judgment. There was, however, always the risk that a bureaucratic apparatus would rise up underneath and become arbitrary. Fred was once embarrassed when we found his staff just cutting and pasting industry comments and sending them to us on official letterhead.
With OMB, I think it is, and always has been, a power trip. OMB tells agency heads, "We've got the authority of the President to tell you that you can't do this." OMB staff work for the President, and do what -- they claim -- the President wants them to. But in reality, they create that. Agency heads always feel caught between OMB and the statutes, like the salami in the sandwich. Still, we had a better time of it than most, in that the OMB assistant director who had EPA oversight had had Hill environmental experience, on Muskie's staff. We also had allies like Kitty Schirmer on the Domestic Policy Council staff. Above all, we had a President who believed in what we were doing. But there's always a concern in the White House that EPA may do crazy things, a perception fed by industry and other people for their own purposes.
Q: Was that perception also generated in part by some of the early EPA staff? Lone Rangers whom people looked at as environmental fanatics?
MR. COSTLE: Industry and others, looking in from the outside, easily see hobgoblins where none exist. And the stakes were high. Opponents could afford to hire the best lobbyists and batteries of scientists. But I think industry attitudes began to change. More and more, industry accepted that EPA was here to stay.
Improvisation does not end when the ink dries on a new law or a new regulation. Laws are not written in stone, and EPA has to keep faith with the Congress. If we were going to carry any case for reform back to Congress, we had better be able to demonstrate a good-faith effort to implement the laws as written and have some empirical basis to suggest that there was a better way.
In sum, the Regulatory Council was set up to address what we all agreed were legitimate concerns: the cumulative burden of regulation, the cost-effectiveness of regulations, the coordination of regulatory interventions, and the quest for a better-articulated research program. Everybody bought into these objectives, whereas -- had the White House simply issued executive orders to the same effect -- the natural bureaucratic instinct on any agency's part, with its own constituencies and Congressional committees behind it, would have been to stiff them, to find a way around: resist, resist, resist.
Just sharing information was worth the effort. OSHA and FDA were trying some new things in rulemaking; so were we. Without the Council, we would have had no organized way of finding out what was working in other agencies that might work in EPA. To this day, I regret that the Reagan administration didn't bring in serious students of public administration, who would have seen the problems and how we tried to deal with them. I think in many ways the Reagan era wrecked the opportunity for real regulatory reform for a number of years, because future attempts would be perceived as regulatory retreat. In fact, President Bush's theme of regulatory relief was an unfortunate characterization that just polarized everybody. I believe that the problem persists today, only the polarizations and misconceptions are on the Congressional side rather than the executive.