Obama’s Pick for Regulatory Chief Survives Gentle Grilling

University of Florida

Howard Shelanski, a dual threat economist and law professor whom President Obama has picked to run the White House Office of Information and Regulatory Affairs, fielded high-stakes questions from senators of both parties on Wednesday without any apparent harm to his prospects for confirmation.

Currently serving as director of the Bureau of Economics at the Federal Trade Commission, Shelanski spoke confidently but cautiously, often invoking the “need to learn more” about issues he acknowledged as important, such as respecting agency expertise and using “common sense” to balance the benefits of regulations aimed at protecting health and safety against the risk of overburdening businesses and costing jobs.

“From my past experience in government, and from having worked for judges across the ideological spectrum, I learned the importance relying on sound evidence and rigorous analysis to make decisions, and of developing good working relationships with people of varying viewpoints and backgrounds to achieve collective goals,” Shelanski told the Senate Homeland Security and Governmental Affairs Committee. “If confirmed as administrator, I would draw from my own experiences and rely on the expertise and insights of the career staff at OIRA and the agencies, others in the administration, the Congress, and public participants in the regulatory process to fulfill OIRA’s mandates.”

Asked for his top priorities, Shelanski said he would “assure that regulatory review is done in as timely a manner as possible while keeping quality high;” that he would “give notice to regulated parties before finalizing a rule as effectively and efficiently as possible;” and that he would maintain “good relationships” with all stakeholders while continuing the “regulatory lookback” at all existing rules launched by the predecessor in the job, Cass Sunstein.

Chairman Sen. Tom Carper, D-Del., said, “Shelanski has earned a reputation among those he’s worked with of being not only very smart, but also articulate and highly collegial -- qualities of character that will serve him well at a place like OIRA at the heart of government. So my recommendation to my colleagues on this committee is that we support this nomination and promptly report it to the full Senate.”

Though no vote was taken, none of the senators who questioned Shelanski hinted at any opposition, even though Shelanski declined to comment on the more pointed issues.

Ranking member Sen. Tom Coburn, R-Okla., cited an overall regulatory burden on the economy of $1.8 trillion and said he was concerned about two Oklahoma fuel refineries going broke because they cannot afford to buy renewable fuel credits, and costing thousands of jobs. And he wanted assurance that agencies will follow statutes, “rather than regulating according to their own preferences.”

Sen. Ron Johnson, R-Wis., reported that the government has released 182,000 rules since 1986, suggesting it is time to set priorities and review the costs.

Shelanski said, “It is important to listen to what stakeholders say, but there is only so much on the cost side, there’s also the benefits.” Primary responsibility, he added, lies with the agency head, “but OIRA can help suggest methods for reviewing economic analysis.” He added that “it is not the role of OIRA to substitute its judgment for scientific experts, but to ask hard questions.”

Sen. Carl Levin, D-Mich., expressed concerned about “chronic delays” from OIRA in reviewing pending regulations, which by executive order are supposed to be done in 90 days. He also quizzed the nominee on whether the Obama administration is sufficiently willing to review rules by independent agencies.

Shelanski noted that he currently works for such an agency and values its independence. Sen. Rob Portman, R-Ohio, called the OIRA post “the most important job no one ever heard of.” He then cited numbers showing that “major regulations”-- defined as those with more than $100 million in economic impact -- were larger in the first Obama term than those in the first terms of George W. Bush and Bill Clinton combined. Last year, there were 90 rule changes, saving $3.3 billion, which is good, Portman said. But in the context of $236 billion that agencies say their rules cost, “that’s not cutting a lot of red tape.”

Portman also decried the fact that OIRA’s required “unified agenda” report on the “pipeline” of coming regulations was put out late last year -- an election year -- in December instead of the spring.

Shelanski said in his preparations he had not learned anything about why.

Liberal-leaning groups, such as the Center for Progressive Reform, were at the hearing with handouts expressing skepticism that Shelanski will be aggressive enough to speed up proposed health and safety rules that the groups see as stalled by business lobbying.

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