Obama's Quiet Revolution
Source Dave Anderson
Date 10/02/04/21:08

The Quiet Revolution

Obama has reinvented the state in more ways than you can imagine.
John B. Judis
The New Republic

THESE DAYS, LIBERALS don't know whether to feel
betrayed by or merely disappointed with Barack Obama.
They have gone from decrying his willingness to remove
the public option from his health care plan to worrying
that, in the wake of Democrat Martha Coakley's defeat
in Massachusetts, he won't get any plan through
Congress. On other subjects, too, from Afghanistan to
Wall Street, Obama has thoroughly let down his party's
left flank.

Yet there is one extremely consequential area where
Obama has done just about everything a liberal could
ask for--but done it so quietly that almost no one,
including most liberals, has noticed. Obama's three
Republican predecessors were all committed to weakening
or even destroying the country's regulatory apparatus:
the Environmental Protection Agency (EPA), the
Occupational Safety and Health Administration (OSHA),
the Securities and Exchange Commission (SEC), and the
other agencies that are supposed to protect workers and
consumers by regulating business practices. Now Obama
is seeking to rebuild these battered institutions. In
doing so, he isn't simply improving the effectiveness
of various government offices or making scattered
progress on a few issues; he is resuscitating an entire
philosophy of government with roots in the Progressive
era of the early twentieth century. Taken as a whole,
Obama's revival of these agencies is arguably the most
significant accomplishment of his first year in office.

The regulatory agencies, most of which date from one of
the three great reform periods (1901-1914, 1932-1938,
and 1961-1972) of the last century, were intended to
smooth out the rough edges (the "externalities," in
economic jargon) of modern capitalism--from dirty air
to dangerous workplaces to defective merchandise to
financial corruption. With wide latitude in writing and
enforcing regulations, they have been described as a
"fourth branch of government."

That wide latitude could invite abuses of power, but
the old-time progressives who fashioned the regulatory
state rested their hopes on what could be called
"scientific administration." Louis Brandeis and Herbert
Croly--to name two of the foremost turn-of-the-century
progressives--believed that the agencies, staffed by
experts schooled in social and natural science and
employing the scientific method in their decision-
making, could rise above partisanship and interest-
group pressure. Brandeis's famous concept of states as
"laboratories of democracy" comes out of his defense of
state regulation of industry and was meant to conjure
an image of states basing their regulatory activities
on the scientific method. For his part, Croly often
made the progressive case for disinterested expertise.
The success of the regulatory agencies, he wrote,
depended upon "a sufficient popular confidence in the
ability of enlightened and trained individuals . and
the actual existence for their use of a body of
sufficiently authentic social knowledge."

Many of the last century's presidents--from Theodore
Roosevelt to Jimmy Carter to Bill Clinton--subscribed
to this progressive ideal of regulation based on
expertise. But, beginning in the 1980s and culminating
in the presidency of George W. Bush, the notion of
scientific administration came under attack from
Republicans and their allies. They began to subvert the
agencies by bringing in business executives, corporate
lawyers, and lobbyists--the very opposite of the
impartial experts envisioned by Brandeis and Croly.

Reagan chose Thorne Auchter, the vice president of a
construction firm, to head OSHA. Bush appointed a
mining company executive to head the Mine Safety and
Health Administration and a trucking company executive
to head the Federal Motor Carrier Safety
Administration. To lead OSHA, he named Edwin G. Foulke
Jr., a longtime foe of the agency who had advised
companies on how to block union organization.

Some of the Republican appointees weren't business
types, but ideologues or hacks who were utterly
unqualified for their positions. Anne Gorsuch, whom
Reagan nominated to head the EPA, was a rising member
of the Colorado House of Representatives, where she was
part of a conservative group known as the "House
crazies." Michael Brown, whom Bush appointed to run the
Federal Emergency Management Agency (FEMA), had
previously been commissioner of the International
Arabian Horse Association.

Even some less offensive Republican picks were unable
to carry out their agencies' missions. Bush appointed
Christine Todd Whitman, a moderate figurehead, to lead
the EPA, but he boxed her in with a hostile White House
above and conservative staffers below--people like
Jeffrey Holmstead, who had represented the Chemical
Manufacturers Association and was placed in charge of
enforcing the Clean Air Act.

Obama's regulatory appointments could not be more
different--no surprise given that he is the son of two
social scientists (one of whom attempted to introduce
scientific administration to Kenya) and that he once
worked in academia himself. Indeed, the flow of
expertise into the federal bureaucracy over the past
year has been reminiscent of what took place at the
start of the New Deal.

For instance, as a replacement for Foulke at OSHA,
Obama chose David Michaels, a professor of occupational
and environmental health at George Washington
University. In 2008, Michaels published a book, Doubt
is Their Product: How Industry's Assault on Science
Threatens Your Health, detailing how businesses had
delayed regulations by "manufacturing uncertainty"
about scientific findings.

To manage the EPA, Obama appointed a slew of highly
experienced state environmental officials. (As Bill
Becker of the National Association of Clean Air
Agencies explains, state officials are ideally suited
for the EPA because they have firsthand experience in
how regulations are enforced and how they work.)
Obama's choice to run the agency was Lisa Jackson, a
chemical engineer who led the New Jersey Department of
Environmental Protection. Her deputies include the
former secretary of the environment in Maryland, as
well as the former heads of the Connecticut Department
of Environmental Protection, the Massachusetts Bureau
of Resource Protection, and the Arizona Department of
Environmental Quality.

Meanwhile, Obama chose as his Food and Drug
Administration (FDA) chief Margaret Hamburg, who
achieved renown during the 1990s as health commissioner
of New York City, where she developed a program for
controlling tuberculosis that led to a sharp decline in
the disease. Her number two is a former Baltimore
health commissioner who, in 2008, was named a public
official of the year by Governing magazine. Obama's
director of the National Park Service is a 30-year
veteran of the agency--and the first biologist to lead
it. And his new director of FEMA is W. Craig Fugate,
who performed outstandingly as Jeb Bush and Charlie
Crist's head of emergency management in Florida. Fugate
may not know anything about Arabian stallions--but he
does know a thing or two about hurricanes.

Republican presidents didn't just undermine scientific
administration by making poor appointments; they also
slashed or held down the regulatory agencies' budgets,
forcing them to cut personnel. This was a particular
problem in the all-important area of enforcement: If
regulatory agencies can't conduct inspections and
enforce rules, it doesn't matter how tough those rules
are. OSHA's budget fell 13.1 percent in constant
dollars during the Reagan years and 6.8 percent during
the administration of George W. Bush. As a result, an
agency that had employed 2,950 people in 1980 employed
just 2,089 in 2008--and the number of compliance
officers had declined 35 percent. According to Michael
Silverstein of the University of Washington School of
Public Health, this meant that a workplace could expect
an inspection only once every 88 years.

The story was similar elsewhere. Under George W. Bush,
the EPA's funding dropped 27 percent, while personnel
fell 4.2 percent from 2000 to 2008. Personnel at the
National Labor Relations Board, which is responsible
for enforcing labor laws, has fallen 41.8 percent over
the last 30 years. At the Mine Safety and Health
Administration, funding had fallen 5.3 percent and
personnel 43.8 percent from 1980 to 2006--when the Sago
Mine disaster in West Virginia suddenly awakened
Congress to the way the Bush administration had
crippled the agency.

Now Obama is reversing these trends. Even in the face
of the recession, he proposed and got funding increases
for numerous regulatory agencies--some of them
dramatic. He asked for $10.5 billion for the EPA for
2010--a 34 percent jump over 2009, and the first time
in eight years that the budget had increased. He also
requested a 19 percent increase in the FDA's budget,
the largest in its history; a 10 percent increase for
OSHA, which will allow it to hire 130 new inspectors;
and increases of 5 percent, 7 percent, and 9 percent
for the Federal Trade Commission, the SEC, and the
Commodity Futures Trading Commission.

Obama has done one last thing to lay the groundwork for
a return to scientific administration: He has made it
less likely that the White House will block
regulations. In 1981, the Reagan administration
expanded an obscure unit within the White House budget
office--the Office of Information and Regulatory
Affairs (OIRA)--into a super-agency that could kill or
delay a rule proposed by a regulatory agency if the
rule's costs were found to outweigh its benefits. From
that point on, cost-benefit analysis became a key tool
in the Republican attempt to undermine scientific

As Richard L. Revesz and Michael A. Livermore argue in
a recent book, Retaking Rationality, there is nothing
intrinsically illiberal about cost-benefit analysis.
Indeed, it can be quite consistent with a progressive
faith in social science. In 1973, for instance, a Ralph
Nader Study Group used cost-benefit analysis to oppose
dam-building in the West. But, in the late '70s,
conservative intellectuals, working through business-
funded think tanks like the American Enterprise
Institute (AEI), promoted cost-benefit analysis as an
instrument of deregulation. (The co-editor of the AEI
journal Regulation was a law professor named Antonin
Scalia.) Nader made a brief attempt to fight back--a
Nader Study Group argued in 1979 that the benefits of
regulation outweighed the costs--but most defenders of
regulation simply condemned cost-benefit analysis
outright, leaving the field of battle to the

The conservative version of cost-benefit analysis
stressed costs rather than benefits and subjected only
regulation--not deregulation--to cost-benefit scrutiny.
Conservatives also sometimes adopted bizarre formulas
for assessing costs and benefits. They assigned less
monetary value to improvements or protections in poor
communities because the residents were willing (that
is, able) to pay less for them, and they used a
spurious correlation between a society's wealth and the
health of its citizens to argue that the costs of
regulation outweighed the benefits. Under George H.W.
Bush, for example, OIRA argued that OSHA regulations on
chemical contaminants would end up harming workers more
than exposure to chemicals. Wrote James McRae, the
acting head of OIRA, "If government regulations force
firms out of business or into overseas production,
employment of American workers will be reduced, making
workers less healthy by reducing their income."

During the 1990s, Clinton pushed back--he subjected
deregulation to cost-benefit analysis and tried to make
OIRA's procedures more transparent--but, soon enough,
George W. Bush was in power, and things once again got
worse. Bush stopped weighing the costs and benefits of
deregulation and issued an executive order allowing
OIRA to intercede before agencies made their initial
proposals, thereby providing industry lobbyists with a
back door to block regulations. OIRA also instructed
agencies to discount the value of future lives in
constructing cost-benefit analyses by 7 percent a year,
so that 100 lives in 50 years would only be worth 3.39
current lives. (Such logic can be used by conservatives
to argue that the present cost of regulating greenhouse
gases outweighs the future benefits of stopping climate
change.) In addition, Bush put a political appointee in
each of the regulatory agencies whose job was to make
sure they were following OIRA's dictates. From July
2001 to March 2002, Bush's OIRA killed 20 regulations,
more than Clinton's OIRA had killed in eight years.

Now Obama has put a liberal proponent of cost-benefit
analysis, Harvard law professor (and former TNR
contributing editor) Cass Sunstein, in charge of the
super-agency. He also revoked Bush's executive order
allowing OIRA to intercede at the start of the process
and called for reframing cost-benefit analysis to take
account of "the role of distributional considerations,
fairness, and concern for the interests of future
generations."For his part, Sunstein has stated that he
wants to make sure "environmental regulations . are
attentive to the interests of future generations and
those who are least well-off." These might seem like
general ideas, but they are a clear signal that Obama
and Sunstein plan to purge cost-benefit analysis of its
conservative bias.

The upshot of all this--appointing the right people,
giving them enough funding, and signaling that the
conservative version of cost-benefit analysis will not
stand in their way--is that the regulatory agencies are
once again able to serve their intended purpose.
Already, it is possible to discern signs of progress.
In her first year at the EPA, Jackson granted
California a waiver to impose tougher greenhouse-gas
standards for new automobiles, which the Bush
administration had denied. She declared that the EPA
would set standards for greenhouse gases under the
Clean Air Act. (This means that, if Congress fails to
pass cap-and-trade legislation, the EPA could act on
its own to regulate carbon emissions.) And she accepted
the EPA staff's recommendations for tougher smog
standards--recommendations that had been rebuffed by
the previous EPA head. Science, it seems clear, is back
in command at the EPA.

At OSHA, the Bush administration, with the support of
Republicans in Congress, had repealed the rules
governing ergonomic injuries (which account for 30
percent of compensation claims filed by workers). OSHA
even eliminated the column in the reports that
companies file where such injuries were supposed to be
listed. Obama's OSHA immediately restored the column
and is working on a new national regulatory standard
for these injuries.

During the Bush years, there was growing evidence that
diacetyl, an artificial flavoring used in making
popcorn and other food, was causing severe lung illness
among workers exposed to it. Foulke refused to take
action, declaring the extensive science documenting the
link to be "murky." Moreover, Foulke failed to develop
standards governing silica dust--which has also been
linked to lung ailments. Obama's OSHA is moving ahead
on both fronts. In October, OSHA also levied its
largest fine ever, requiring BP to pay $87 million for
a 2005 explosion that killed 15 workers in Texas.

At the FDA, Hamburg has issued warnings on dietary
supplements. She also obtained ("by mutual agreement")
the resignation of the director of the FDA's
controversial Center for Devices and Radiological
Health, which, according to the Government
Accountability Office, had approved 228 devices without
adequate testing between 2003 and 2007.At the Federal
Communications Commission (FCC), the new chair, Julius
Genachowski, has come out in favor of net neutrality
(which means that Internet service providers wouldn't
be able to discriminate against content providers). The
FCC is also reportedly mulling a broadband plan that
would allocate a significant part of the spectrum to
free wireless.

The Bush administration steered clear of antitrust
prosecution for eight years. Already, the new chair of
the Federal Trade Commission, Jon Leibowitz, has sued
Intel for restraining trade by attempting to prevent
computer makers from using non-Intel chips. At the
Consumer Product Safety Commission, the Obama-appointed
chair, Inez Tenenbaum, has sent a signal that a new day
is at hand by fining Mattel $2.3 million for selling
toys containing lead and Mega Brands America $1.1
million for improperly reporting a fatality caused by
one of its children's building sets.

Of course, there have been shortcomings in Obama's
approach. Some of his appointments have been less than
stellar. Mary Schapiro, selected to head the SEC, was
formerly CEO of the Financial Industry Regulatory
Authority, which was set up and funded by the
investment industry--and she appears at least initially
reluctant to challenge the Wall Street culture. After
boldly proposing last May to conduct 10,000 unannounced
inspections of money managers, she eventually settled
in December for only 1,600 inspections.

Meanwhile, OIRA still bears traces of its conservative
past. In reviewing proposed EPA coal-ash regulations,
which were developed in response to a massive spill at
the Tennessee Valley Authority in 2008, Obama's OIRA
has met far more frequently with industry
representatives than with environmentalists. Partly as
a result, some activists are unhappy with Obama. Four
analysts from the Center for Progressive Reform
recently wrote that the administration deserves a "B-"
for regulation during its first year.

Yet history rarely moves in leaps and bounds, and, by
just about any reasonable standard, Obama's approach to
regulation has been extremely impressive. More
worrisome than the criticisms of activists is the
possibility that politics may soon intrude. In 1993,
Clinton, too, attempted to revive the regulatory
agencies by appointing well-qualified personnel and
increasing funding. But, after Republicans took control
of Congress in 1994, they managed to cut Clinton's
budget proposals and delay or block the implementation
of regulations. If Democrats lose Congress this
November, the same thing could happen again. In that
case, what has been Obama's most significant
achievement to date would come to naught--and liberals
would have yet another reason to despair.

John B. Judis is a senior editor of The New Republic
and a visiting scholar at the Carnegie Endowment for
International Peace. Lydia DePillis assisted with
research on this article.

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