Too much expert review of federal regulations could paralyze the agencies.
by Randolph J. May
Legal times, January 19, 2004
With my deregulatory bent, I view proposed new regulations with a healthy dose of skepticism, asking myself whether they will achieve their regulatory objective in the most cost-effective, least burdensome manner. Especially with respect to health, safety, and environmental regulations, I ask whether they are based on sound science and accurate technical information. Nevertheless, I still question whether the Office of Management and Budget’s pending proposal to implement a governmentwide mandatory peer review requirement to vouchsafe scientific and technical information that agencies use to support regulatory actions makes sense.
For major regulatory actions—generally those that have a substantial impact on important public policies or private sector decisions with a possible impact of more than $100 million in any one year—the OMB proposes that agencies engage in a “formal, independent, external peer review” that complies with very specific requirements. Despite what I grant are worthy intentions, I’m concerned that the costs of the OMB’s proposal in aggravating an already rigid and time-consuming regulatory process outweigh its benefits, at least as it is currently formulated.
More Review Not Needed
The OMB points out that for decades, academic and scientific communities have withheld approval from scientific studies that have not been subject to independent peer review, which it defines as “a scientifically rigorous review and critique of a study’s methods, results, and findings by others in the field with requisite training and expertise.”
To provide transparency to a process that generally has occurred on a confidential basis, the OMB would require that the identities, qualifications, and affiliations of the peer reviewers be made public, along with the information provided to the peer reviewers by the agency. The new regulations would also require that the public be allowed to comment on the information made available to the peer reviewers before they prepare their report. Then, the agency itself must prepare and disseminate a written response to the peer review report. Finally, all of these materials must be included in the administrative record of any related rule-making proceedings.
The peer review proposal is a follow-on to what John Graham, the Bush administration’s regulatory czar at the OMB, has described as the OMB’s expanded “information policy” function, all in the cause of his “smarter regulation” initiative. I’m all in favor of smarter regulation, including trying to ensure that proposed regulations are based, as much as possible, on reliable information. And, unlike some others, I recognize that the OMB has an important, if nevertheless delicate, role to play in coordinating the administration’s regulatory policies among the various agencies, each with its own statutory delegations.
On one level, of course, the OMB’s peer review proposal embodies good common sense. In theory, no one wants regulations to be based on “junk science.” In practice, however, it’s not so easy to draw the line between science and politics. In recent years, we’ve witnessed the hurling of the “junk science” epitaph back and forth by all sides regarding studies submitted in many high-profile policy disputes. For example, those favoring and opposing regulation don’t agree whether the scientific studies demonstrate that global warming is a real phenomenon, much less whether anything humankind is doing is responsible for any change. They also don’t agree about the science behind the Food and Drug Administration’s recent warning concerning the health impacts of eating fish with higher mercury concentrations. And they certainly don’t agree about the science behind the ergonomics rule adopted by the Occupational Safety and Health Administration, which Congress then overturned.
But what really nags at me about the wisdom of the OMB’s proposal, on which comments were filed until last week, is the formalizing of yet another government-wide mandatory regulatory analysis requirement. It likely represents another step toward what University of Texas law professor Thomas McGarity in a 1992 Duke Law Journal article called the “ossification” of the rule-making process.
“Ossification” refers to what by 1992 already had become a quite rigid and burdensome rule-making process that made the adoption of new regulations increasingly time-consuming and costly. McGarity attributed the ossification, in large part, to new analytical requirements imposed on agency rule-making activity by Congress, the executive branch, and the courts, above and beyond the simple notice-and-comment rule-making model contained in the Administrative Procedure Act.
Today, the list of mandatory analytical requirements with which agencies must comply before issuing new rules (or getting rid of outdated or unnecessary ones) has grown even longer. Consider this partial compendium: The Paperwork Reduction Act’s information collection assessments; the Regulatory Flexibility Act’s assessments of small business impacts and regulatory alternatives; the Unfunded Mandates Reform Act’s assessment of unfunded mandates on state and local governments and the private sector; Executive Order No. 12,866’s costs-benefit analysis requirements; and still other executive orders requiring assessments of federalism, takings-clause, and litigation impacts.
Some of these impact analyses overlap, and to some extent agencies may minimize redundancy and resource burdens by combining them into a larger regulatory impact document. Nonetheless, the plethora of existing mandates should caution against formalizing new across-the-board rule-making requirements in ways that may add unnecessary delay and expense to the regulatory process without countervailing benefits.
The OMB acknowledges that most agencies already have peer review policies in place, but says that some do not always follow their own policies. Rather than imposing a governmentwide mandate, the OMB should allow individual agencies to continue improving their own peer review policies. Then, in carrying out its legitimate regulatory oversight function, the OMB could pay particular attention to those agencies it believes need the closest scrutiny regarding their peer review practices.
Equally important, even in rule-making proceedings with major impacts, there may well be scientific information used by the agency that is not really controversial or novel. It is unnecessarily time-consuming and burdensome to apply the formal external peer review requirements to this information, as the OMB proposal apparently requires.
Reforming the Review
Apart from these overbreadth concerns, there are some specific ways the proposal can be improved. For example, the OMB states that peer reviewers should be selected primarily on the basis of possessing necessary expertise, and that the agencies should select reviewers who are independent of the regulating agency, do not possess conflicts of interest, and are capable of approaching the subject matter in an unbiased manner. All good. In listing factors relevant to satisfying these criteria, however, the OMB refers only to whether the individual is currently receiving or seeking funding from the agency, not from industries regulated by the agency. While neither should be absolutely disqualifying, in my view, the fact that a potential reviewer has received industry funding is as relevant a factor as the receipt of agency funding.
On a related note, the OMB proposes that if it is necessary to select a reviewer who is or appears to be biased in order to obtain a panel with appropriate expertise, a reviewer “with a contrary bias” must be appointed. This notion of balancing contrary biases, and the fighting likely to ensue over the panel’s composition, illustrates why, as a practical matter, overly formalized mandatory procedures are likely to lead to a more time-consuming rule-making process. This strict requirement should give way to the notion that it is sufficient for the panel to be broadly representative.
Finally, while in one sense it is commendable that the OMB proposes to provide for public comment on the information to be peer reviewed before the reviewers prepare their report, again, as a practical matter, this additional step in the regulatory process will lead to further rule-making delays.
So, while I certainly agree that agencies should, to the maximum extent practicable, ensure their regulations are based on reliable information and sound science, I’m just not convinced that the OMB’s proposal, as currently formulated, makes sense. Typically, in rule makings there are at least two rounds of public comment, and then back-and-forth ex parte submissions right up to decision day, all available electronically. Also, we now live in an age of easy and widespread public dissemination of regulatory information on the Internet through agency Web sites. Interested parties on all sides generally have ample opportunity to challenge—in other words, to peer review—controversial scientific information in the context of the existing notice-and-comment rule-making process before new policies are adopted. Do we really need still more review?
While some may suggest that further ossification of rule making is actually desirable because it delays or inhibits unwise or unduly burdensome new regulations, there are better ways to accomplish that worthy goal. For starters, Congress should provide agencies with more-specific deregulatory guidance in statutory delegations, and engage in more forceful oversight. And the president should appoint regulators committed, where feasible, to market-oriented solutions. After all, it is ultimately the responsibility of the agencies and of the reviewing courts, rather than of outside parties such as panels of experts, to ensure that regulations are based on solid science rather than on “political science.”
As a general matter, rule making is already time-consuming and costly enough without mandating new requirements. And there is one final point to consider for those, like me, with a deregulatory bent: The same ossification that may deter the adoption of new regulations may also deter the repeal of those unnecessary or unwise ones already on the books.
Randolph J. May is a senior fellow and director of communications policy studies at the Progress & Freedom Foundation in Washington, D.C. The views expressed are his own and do not necessarily reflect the views of the foundation. He may be reached at email@example.com. His column, "Fourth Branch," appears regularly in Legal Times.
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