In 2007, new regulatory policies and the inability of federal agencies to protect the public made headlines more so than at any time in recent memory. Four themes dominated regulatory policy this year: an increase in White House influence over agency rulemaking activity and discretion, which added a perception of more political manipulation; the inability of the federal government to protect the public by ensuring the safety of imported goods; the voice of some industry groups calling for regulation; and the Bush administration's refusal to regulate in the face of overwhelming scientific evidence, as in the case of climate change. At best, government has attempted to respond to crises instead of getting ahead of the curve. This has left the public uncertain about whether we can count on our government to provide adequate safeguards.

White House Interventions

Part I: Systemic Regulatory Changes

On Jan. 18, President George W. Bush issued Executive Order 13422 (E.O.), which amended Executive Order 12866, Regulatory Planning and Review. The same day, the White House Office of Management and Budget (OMB) issued its Final Bulletin for Agency Good Guidance Practices. The two executive directives work in concert to alter the ways federal agencies develop and enforce regulations.

These changes could dramatically impair the ability of agencies to protect the public. The Bush E.O.:

• requires agency regulatory policy officers to be presidential appointees and gives them new power to start and stop regulations;
• shifts the focus for promulgating regulations from the identification of a problem like threats to public health to the identification of a "specific market failure"; and
• in conjunction with the Final Bulletin, allows the White House to exert control over agency guidance documents — subjecting a new class of information to political considerations and possible delay.

Despite significant media attention and two congressional oversight hearings, many questions about Bush's E.O. remain unanswered. It is unclear why President Bush waited until the seventh year of his presidency to issue the changes. Also, it is unclear what existing problems the new policies sought to address.

Vague language in the directives has also created uncertainty as to the practical effects. For example, only an agency regulatory policy officer (RPO) may allow agency staff to "commence" a rulemaking, and the RPO may also end a rulemaking at any time. However, neither E.O. 12866 nor E.O. 13422 provides a definition of when a rulemaking commences. Currently, the limits of RPO power remain undefined. An alarming lack of transparency in the rulemaking process keeps the public from knowing the RPOs' roles in the process.

The new policy on guidance documents also raises more questions than answers. Agencies issue guidance documents in order to clarify regulatory obligations to the public and private sectors, explain complex technical issues or otherwise offer clarification or guidance on agency policies. Unlike a regulation, guidance is not legally binding, and therefore imposes no mandates on regulated entities.

E.O. 13422 requires review of guidance documents by OMB's Office of Information and Regulatory Affairs (OIRA). There is a timeframe to complete this process, but it includes a potentially dangerous caveat: "OIRA will complete its consultative process within 30 days or, at that time, advise the agency when consultation will be complete." OIRA is not planning to hire additional staff to manage the influx of guidance, so it is unclear how OIRA plans to review and approve guidance in a timely fashion.

Congress tried to mitigate the impact of the E.O. On June 28, the House passed the Financial Services and General Government Appropriations Act for Fiscal Year 2008. The bill contained an amendment that would have prevented the White House from expending any funds to implement the E.O. and the Final Bulletin. The Senate also considered defunding language for its version of the FY 2008 appropriations bill but never brought the bill to the Senate floor. Instead, all domestic spending bills have been wrapped into one omnibus spending bill. The omnibus bill currently does not contain the defunding language.

The person charged with implementing E.O. 13422 is the new OIRA administrator, Susan Dudley. Prior to her appointment to OIRA, Dudley worked for the industry-funded Mercatus Center, an anti-regulatory think tank at George Mason University. Dudley is ideologically opposed to government regulation, and her nomination faced opposition from public interest groups including OMB Watch, Public Citizen, the Natural Resources Defense Council and the United Auto Workers.

Bush appointed Dudley April 4 while Congress was in recess and shortly after the Senate announced a nomination hearing for her. Nonetheless, Bush chose to install Dudley by recess appointment and was widely criticized for circumventing the Senate's usual confirmation process. Dudley is the only OIRA administrator in history (other than those operating in a temporary, acting capacity) not to have been confirmed by the Senate.

Dudley's first significant public action as administrator was to revise executive branch policies on agency risk analysis. Working with the White House Office of Science and Technology Policy, a memo entitled "Updated Principles for Risk Analysis" was released Sept. 19.

The memo updates a 1995 memo on risk analysis and came in lieu of a 2006 proposal that would have imposed overly prescriptive, one-size-fits-all standards on agency risk assessments. In January, the National Research Council (NRC), part of the National Academy of Sciences, urged the White House to abandon that effort — the "Proposed Risk Assessment Bulletin." The bulletin proposed scientifically questionable standards that would have governed the risk assessment process of all federal agencies.

The memo is an improvement on the proposed bulletin. It is not mandatory and may not have a substantial impact on agency practices. However, the memo does reaffirm existing OMB policies, such as the primacy of cost-benefit analysis in OIRA decisions, which diminish agency discretion.

Part II: Manipulating Agency Rulemaking

Beyond systemic regulatory changes, the White House also had a busy year meddling with agencies' individual regulatory actions. In June, before the U.S. Environmental Protection Agency (EPA) published a proposed rule to set the national air quality standard for ozone (smog), OIRA solicited the input of industry representatives and significantly edited EPA's economic analysis to downplay the rule's potential benefits.

Two National Oceanic and Atmospheric Administration (NOAA) rules have also suffered at OIRA's hand. A rule to protect the North Atlantic right whale from being struck by ships has been held up at OIRA since February. OIRA should have completed the review in June. OIRA also rejected a NOAA proposal to protect krill — a shrimp-like crustacean that serves as an important link in the marine food chain. In a letter to NOAA, Dudley accused the agency of failing to provide adequate rationale for pursuing the policy and questioned NOAA's legal authority.

OIRA also reviewed EPA's Endocrine Disruptor Screening Program, a scientific assessment that may form the basis of future EPA regulations of endocrine disruptors. OIRA's decision to review the screening program may be in response to the aforementioned new policy on agency guidance. It also is consistent with industry efforts; as early as 2002, the Center for Regulatory Effectiveness, Kansas Corn Growers Association and the Triazine Network used the Data Quality Act to challenge EPA's use of endocrine disruption screening and research protocols.

In 2007, Vice President Cheney renewed the role of the Office of the Vice President (OVP) in rulemaking. Representatives from Cheney's office attended several meetings related to a Department of Homeland Security regulation on chemical security. The regulation was later criticized for not going far enough in protecting the U.S. from potential terrorist attacks on chemical plants.

The influence of OVP in the chemical security rule is part of a recent trend in the Bush administration. According to information posted on the OMB website, OIRA has held more than 550 regulatory review meetings since February 2002. A representative from OVP has been present at only 11, about two percent. However, eight of those 11 meetings have occurred since February, including the four meetings on the DHS chemical security rule.

The OVP is focusing attention mainly on environmental and homeland security rules. The 11 meetings pertained to eight separate rulemakings, four of which were EPA rules (including EPA's ozone rule and upcoming rules on greenhouse gas emissions), and three of which were DHS rules.

Import Safety

A second major regulatory theme in 2007 was the inability of the U.S. government to ensure the quality of the rising tide of imported goods. Toys, tires, toothpaste and a variety of food products made headlines this year for the risk they posed to consumers. Federal agencies responsible for regulating these products are plagued by declining resources and authority. While the agencies bear the brunt of the criticism for individual failures, the common link among the failures is Bush's seven-year war on regulatory protections.

In March and April, contaminated pet food sickened and killed pets across the country. The pet food contained ingredients, imported from China, tainted by the chemical melamine. A pet food recall was organized, but the melamine was detected in animal feed which led to human exposure. Federal scientists concluded the human risk to be low.

In May, the U.S. Food and Drug Administration (FDA) began to warn of Chinese-made toothpaste contaminated with diethylene glycol, which is commonly found in antifreeze.

In June, the National Highway and Traffic Safety Administration (NHTSA) ordered a New Jersey tire importer to recall 450,000 defective Chinese-made tires. A defect in the tires caused them to explode and was responsible for at least two deaths. The importer, Foreign Tire Sales, recalled the tires and later declared bankruptcy.

Also in June, FDA announced an import ban on five different types of Chinese farm-raised seafood products. While no illnesses have been reported, the agency "repeatedly found that farm-raised seafood imported from China were contaminated with antimicrobial agents that are not approved for this use in the United States."

Recalls of children's products made national news throughout the year. Excessive levels of lead — a toxin known for decades to pose a danger to children — were found in toys, clothes and children's jewelry. The RC2 Corporation recalled more than 1.5 million Thomas and Friends wooden train toys due to high lead levels in the paint. In September, Mattel recalled 675,000 Barbie toys for the same reason.

As of Dec. 13, 104 recalls of lead-contaminated children's products had been announced. The recalls cover more than 17 million individual products, 95 percent of which were manufactured in China. The number of products recalled in 2007 increased nearly six-fold compared to 2006.

RC2, Mattel and many other companies recalled their products in cooperation with the Consumer Product Safety Commission (CPSC), the federal agency responsible for ensuring product safety and for recalling products found to be dangerous. Because of the recalls, CPSC's policy of negotiating recalls with companies and encouraging voluntary compliance has come under fire from the public and Congress.

The broader problems at CPSC reflect Bush's anti-regulatory views. Throughout his presidency, Bush has slashed the CPSC budget and staffing. Bush has failed to propose increases in CPSC's funding to match inflation. Bush's proposed FY 2008 budget calls for 401 full-time employees, the lowest staffing level ever at CPSC.

FDA's failure to ensure import safety also corresponds to declining agency resources. In November, an FDA advisory panel released a report titled FDA Science and Mission at Risk. Among other things, the report found FDA has "experienced decreasing resources in the face of increasing responsibilities" and must receive additional resources in the future if the agency is to ensure food and drug safety.

Bush's response to Americans' increasing dissatisfaction with product safety came July 18 when he signed Executive Order 13439, Establishing an Interagency Working Group on Import Safety. The working group, made up of cabinet-level officials, released its final report Nov. 6 on ways to improve the safety of food and consumer products imported into the U.S. The report calls for limited increases in some federal agencies' responsibilities but does little to change the current voluntary regulatory scheme that governs some $2 trillion worth of products, 800,000 importers and more than 300 ports-of-entry.

Congress made limited progress in addressing these issues. The Senate Commerce Committee in October advanced legislation which would expand the resources and authority of CPSC. Among other things, the bill would dramatically increase the budget and staffing at CPSC, require third-party testing and certification of children's products, ban lead in children's products, and enable CPSC to levy greater fines on noncompliant manufacturers. Both chambers of Congress are considering legislative solutions to FDA's problems with import safety as well. However, none has gained momentum.

Industry Influence

Industry interests also played a major role in shaping regulatory policy in 2007, sometimes in surprising ways.

A new program launched by the Small Business Administration's Office of Advocacy provides industry with a new vehicle to voice their complaints with federal regulations. The program, the Regulatory Review and Reform Initiative, or "R3," includes uniform recommendations for the conduct of agency reviews. More significantly, the Office of Advocacy will solicit from the business community recommendations on which existing rules agencies should review and will transmit those recommendations to the appropriate agency. The R3 program is reminiscent of the anti-regulatory "hit list" compiled by OMB from 2001-2004. That list included rules recommended by industry groups and conservative think tanks.

In a surprising trend, businesses and trade groups began asking for regulations, albeit in ways that often emphasize voluntary standards and third-party certification. Hoping to restore consumer confidence after a spate of defective product recalls and consumer product scandals, a number of industry groups recognized the need for federal regulations and even called for enhancing agencies' authority.

For example, the Toy Industry Association recently asked the CPSC to adopt a mandatory testing system to help ensure toys are safe, and the Grocery Manufacturers' Association proposed that FDA adopt a foreign supplier quality assurance program. Recent evidence showing diacetyl, a chemical used to give microwave popcorn its butter flavor, causes terminal lung disease in factory workers and at least one consumer prompted the Flavor and Extract Manufacturers Association to support a U.S. Occupational Safety and Health Administration (OSHA) standard to limit exposure. Meanwhile, major popcorn companies began to voluntarily phase out the use of diacetyl.

Ignoring Science

The Bush administration also continued its record of refusing to regulate in the face of overwhelming scientific evidence and manipulating scientific conclusions in order to achieve ideological outcomes.

For example, despite scientific evidence describing the dangers of diacetyl exposure, in September, OSHA denied a labor union petition asking the agency to develop an emergency temporary standard. In denying the petition, Edwin Foulke, the head of OSHA, wrote, "OSHA does not have sufficient evidence that a grave danger currently exists in microwave popcorn manufacturing facilities to support the issuance of an emergency temporary standard (ETS) for diacetyl." Instead, OSHA has chosen to pursue its standard rulemaking procedure, which often takes years.

Congress is considering legislation that would force OSHA to issue a temporary diacetyl standard. The Popcorn Workers Lung Disease Prevention Act (H.R. 2693) would mandate an immediate interim standard and then give the agency time to develop a final rule. This two-step plan gives workers at least a modicum of protection in the short term while long-term strategies are developed. The bill passed the House in September but no companion bill has been introduced in the Senate. President Bush opposes the bill.

The Bush administration delayed action on perchlorate, an ingredient in rocket fuel and fireworks. In April, EPA announced that it would not regulate perchlorate despite a National Academy of Sciences (NAS) conclusion that perchlorate is commonly present in public drinking water supplies and that ingesting it inhibits human thyroid function. EPA cited the need for further investigation in its decision not to regulate perchlorate. According to the Natural Resources Defense Council, the White House and the Department of Defense have been engaged for years in a coordinated campaign to downplay the human health risks associated with perchlorate exposure.

In March, a Department of Interior investigation found Julie A. MacDonald, the deputy assistant secretary for fish, wildlife and parks, allowed political considerations to taint a number of decisions in which the Fish and Wildlife Service (FWS) decided not to consider certain species endangered. Among the transgressions, MacDonald leaked internal agency documents to industry lobbyists and intimidated agency staff in order to manipulate scientific evidence. MacDonald resigned in April as a result of the scandal.

In response to public pressure and the scrutiny of the House Natural Resources Committee, FWS decided to review eight endangered species decisions by MacDonald. In November, FWS announced it had confirmed impropriety in seven of the eight decisions and is now reviewing them.

In July, former Surgeon General Richard Carmona accused senior administration officials of interfering with his work. In one example, a senior official in the Department of Health and Human Services (HHS) blocked the release of a report Carmona and his staff had prepared. The report, Call to Action on Global Health, identifies the link between poverty and global health problems, calls for citizens and corporations to take action to address these problems, and recommends America make the issue of global health a primary aspect of its foreign policy.

An investigation by Sen. Edward Kennedy (D-MA) supported Carmona's claims. In August, Kennedy released e-mails related to Carmona's accusation. In one, HHS's White House liaison wrote, "He needs to be the SG [Surgeon General] with specific speeches, on specific topics addressing the Secretary's and the president's agenda — which will become more political as the re-elect gets underway."

The Bush administration also had a busy year downplaying scientific evidence of global climate change. In April, the U.S. Supreme Court found greenhouse gas emissions could be considered an air pollutant under the Clean Air Act, an assertion previously rejected by the administration. The Court's decision clarifies EPA's statutory authority to regulate these emissions. EPA had argued that it did not have that authority, and even if it did, it was a bad idea to do so. Bush has directed the EPA to propose its program to regulate emissions by the end of 2007.

In light of the Supreme Court decision, California renewed its efforts to enact a state-level program to reduce greenhouse gas emissions from tailpipes. In December 2005, California petitioned EPA for permission to enact its program, as it is required to do under the Clean Air Act. If EPA grants California's petition, at least 12 other states would follow California's lead.

However, in the two years since California filed its petition, EPA has not announced a decision. Administrator Stephen Johnson has pledged to announce the agency's decision by the end of 2007. Meanwhile, an investigation by the House Oversight and Government Reform Committee uncovered an administration-wide campaign involving White House and cabinet officials to lobby congressmen and governors, urging them to oppose the waiver for California. In November, California sued EPA for its refusal to make a decision.

In October, Julie Gerberding, head of the Centers for Disease Control and Prevention (CDC), testified at a Senate hearing about the public health effects of global warming. However, while reviewing Gerberding's testimony, OMB removed seven pages, or about half, of the testimony. The deleted sections included information on extreme weather events and food and water-borne disease, among other things.

A December report by the House Oversight and Government Reform Committee's majority staff revealed more examples of the Bush administration suppressing climate science. The investigation found the White House refused to allow certain administration scientists to speak publicly about climate change and edited multiple government reports. The committee concluded, "The Bush Administration has engaged in a systematic effort to manipulate climate change science and mislead policymakers and the public about the dangers of global warming."

Conclusion

In 2007, Americans became trenchantly aware of the positive role government can play and the consequences that can be wrought when regulatory protections break down. But these past 12 months may only be the beginning of a new chapter in American domestic policy. Many problems have been identified, but few have been solved. Dangerous imports, workplace hazards and environmental degradation may dominate headlines to an even greater extent in 2008.

But will mounting evidence be enough to tip the scales in favor of regulation in the face of the Bush administration's obstructionist policies? Federal agencies like EPA and OSHA may continue to drag their feet on issues such as diacetyl exposure and greenhouse gas emissions, and the White House will likely continue to meddle with agency regulations and may find new ways to enact even more damaging systemic changes.

Will a Democratically controlled Congress be able to move with the urgency necessary to pass new laws that respond to public needs? Despite the increased attention given to resource shortfalls at agencies like CPSC and FDA, Congress has been unable to approve appropriations bills that would make funding and staffing at those agencies commensurate with regulatory responsibility. Legislative measures, like those to improve import safety or reform our nation's energy policy, are constructive but have gained little traction in a Congress seemingly without a sense of national priorities — a Congress which prefers partisan bickering to positive governing.

Most importantly, will the public continue to look to government to play a positive role in society? If regulatory failures do indeed continue through 2008 and beyond, will the public succeed in imploring government intervention where circumstance has not? If our leaders continue to disregard science, govern on the cheap, and make politics a higher priority than policy, the public must hold those leaders accountable and demand change.