Nudge on Trial

Cass Sunstein defends the White House against a Republican attack.

Cass Sunstein

Cass Sunstein arrived early for his inquisition. Walking into the House Energy and Commerce Committee hearing room about 20 minutes before its members did, he doffed his coat, chatted with staff—who politely kept him away from the press—and sat at a table with only a few notes. This was his umpteenth appearance before a congressional committee, but his first since he took over the Office of Information and Regulatory Affairs and the GOP took over the House.

At 10 a.m., the members of the House Oversight and Investigations Subcommittee took their places. This was a bigger deal for them than it was for Sunstein. The Republican members were at war with the administration over EPA regulations, mining regulations, the moratorium on offshore oil drilling, and health care reform. Republicans plan to make 2011 all about regulation and how to roll it back. After winning the House and winning more seats in the Senate, they fretted openly about the end-runs the executive branch could do around them—the EPA using the Clean Air Act, say, as the basis of regulation that supersedes looser environmental laws in the states. And Sunstein’s job is to review new rules developed by the executive branch.

Target duly painted, the GOP went to work. On Jan. 18, President Obama had issued an executive order commanding agencies to find the “best, most innovative, and least burdensome tools for achieving regulatory ends.” It was unspecific, but it echoed something Republicans had once suggested for stripping back regulations that, in the parlance of the moment, Killed American Jobs.

“There has been an explosion of regulation and regulations issued in the first years of the Obama administration,” said Rep. Joe Barton, R-Tex. “Quite frankly, I didn’t see that your organization has done anything to slow this down. I don’t see that you’ve done anything to do what the new executive order says.”

“If I may discuss the idea of explosion,” said Sunstein. “The number of regulations issued in the last two years is approximately the same as the number issued in the last two years of the Bush administration.”

This was a bit much for Barton. “Just the regulations issued under the new health care law are in the thousands!” he said.

“The number that have been issued in the last months are not in the thousands,” said Sunstein. “In terms of finalized economically significant rules, I don’t think the data supports the claim—”

“Well, what’s the answer to the question?” snapped Barton. “Is this new executive order going to require a determination by your group, your agency, of the net job gain or loss of past, current, and new regulations?”

“We will be focusing very much on job loss as a result of regulation.”

“So the answer is yes?”

“Well, there are some technical reasons. It’s complicated.”

“So the answer is no?”

“Well, I’m afraid that the answer to this one, uniquely thus far, is neither yes nor no.”

“Well,” said an exasperated Barton, who had warned the room that he was late for a radio interview, “that’s a very evasive answer. The president is going to give you an A-plus for evading a straight yes-or-no question.”

Under Republican presidents, OIRA was a place where regulations went to  die. Between 2,000 and 3,000 regulations were reviewed annually under Ronald Reagan. That was cut to around 500 annual reviews under Bill Clinton, and OIRA has not been quite so muscular since then.

But there was no better way for Republicans to start a conversation about this than by grilling Sunstein. His nomination was floated two years ago, in the weeks before Obama was sworn in. It was controversial only to liberals, who worried that the president was grooming a friend (both taught law at the University of Chicago) for the Supreme Court. Unacceptable: Sunstein was an iconoclast who believed in “libertarian paternalism,” and in cost-benefit analyses that could, theoretically, scuttle regulation.

In the march to confirmation, opposition switched to the other side. It was conservatives who were reading Sunstein’s many books—he published two between being nominated and being confirmed—and identified a “regulatory czar” who had to be stopped. A typical headline from this period was “Obama Regulation Czar Advocated Removing People’s Organs Without Explicit Consent.” Glenn Beck has, to date, mentioned Sunstein on 99 episodes of his show. The last instance was on Monday, when he credited the OIRA head with “165 new FDA regulations” and cried that the author of Nudge had “called his regulatory czar job his dream job!”

So Sunstein’s record looked like a target-rich environment. Republicans struggled to hit the targets. They had a few problems, the chief one being the unflappability of the witness. His dodges were purely logical—if he couldn’t promise something, he wouldn’t. And a related problem was that the questioners were not always sure what Sunstein controlled.

“When the Department of Interior came out with the moratorium on drilling,” asked Rep. Steve Scalise, R-La., “did you review that?”

“No,” said Sunstein. “That wasn’t a regulatory action within the meaning of Order 12866,” the executive order that allows Sunstein’s office to review draft regulations.

Scalise tried again. “At least it wasn’t your feeling that it wasn’t?”

“No,” said Sunstein. “It doesn’t fit within the definition of a significant regulatory action.”

On talk radio, it’s assumed that Sunstein’s writings on free speech and conspiracy theories have revealed his plans to silence critics. But no one successfully needled Sunstein over the claims and arguments he’d made in his academic work. “My academic writing isn’t relevant to my job,” he said, after Rep. Phil Gingrey, R-Ga., attempted to nail him down on whether he’d regulate the Internet—a major cause of talk radio and Glenn Beckian panic. “I’m on the record opposing the fairness doctrine.”

Freshman Rep. Cory Gardner, R-Colo., tried to broaden the inquiry. “What am I supposed to tell my constituents,” he asked, “when they come to me and say ‘These regulations are costing me jobs?’”

“There are two sets of concerns,” said Sunstein. “One is about fear of what’s coming. One is trouble caused by what’s there.”

“So they’re just fearful?”

“No, that’s not all,” said Sunstein. “I’m just using your words. There is a legitimate fear that regulation can be harmful.”

Gardner prodded Sunstein to commit, “in this time of economic crisis,” not to defend any regulation that cost any job. He demanded a yes-or-no answer.

“A yes answer would be preposterous,” said Sunstein. “If there’s a regulation that’s saving 10,000 lives and costing one job, it’s worth it.”

This back-and-forth lasted for four hours. There was no question that Sunstein couldn’t answer with a koan or an assurance that he was on the same page as his questioner. Subcommittee Chairman Cliff Stearns, R-Fla., attempted to nail Sunstein by asking how many regulations would eventually be created by the health care bill. Sunstein passed. “One doesn’t want to guess about the fact of a matter,” he said, “if the fact is easy to find.”

It didn’t sound as if Sunstein had slipped up, but that was one of the pieces of the hearing Stearns would blast out to reporters hours later. He had found, he argued, that “rules issued by independent agencies, such as the FCC, CFTC, CPSC, FERC, FTC, SEC, FDIC, the Federal Reserve, the NRC, among others, have apparently been placed beyond the purview of the president’s review.”

But that was the mop-up. In the room, with Sunstein having done no obvious harm to his mission, Stearns wrapped up the four hours and walked down to the witness stand. Sunstein would come back in three months for another Q and A.

“Thanks for coming,” he said to Sunstein. “We’ve got to get your boss in here.”

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