Regulatory czar pick could set tone for Obama’s second-term

President Obama’s pick for regulatory czar is expected to be a telltale sign of how aggressively he plans to push rules and regulations during his second term.

Business and labor, as well as a number of watchdog groups, are watching closely to see who will be Obama’s nominee for the permanent administrator of the Office of Information and Regulatory Affairs (OIRA), which oversees all federal regulations coming out of Washington.

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Cass Sunstein, a scholar and close friend of the president, headed up OIRA, part of the Office of Management and Budget, for much of Obama’s first term — much to the frustration of liberals who felt he was too accommodating to business.

Rena Steinzor, president of the Center for Progressive Reform, a liberal-leaning regulatory think tank, was among the critics of Sunstein’s tenure at OIRA. She said it’s time for the president to set a new tone at the agency.

“He appointed himself to make the president look like he was friendly to business. It was a discordant position with the way that the president ran his campaign and the way he won. As a political matter, it didn’t help him at all,” said Steinzor, who is also a law professor at the University of Maryland.

Business groups praised Sunstein when he was at OIRA and fear Obama will unleash a flood of regulations in his second term now that he’s no longer worried about running for reelection.

“We are concerned that with a second Obama term … they are going to push out regulations that they were working on in the first term. Clearly, without an election to hold them back, those concerns are legitimate,” said Marc Freedman, executive director of labor law policy for the U.S. Chamber of Commerce.

Sunstein left the administration in August. Boris Bershteyn, a former general counsel at the Office of Management and Budget, has served as OIRA’s acting administrator since then.

The OIRA administrator position is nominated by the president and confirmed by the Senate.

It’s unclear if Bershteyn will be nominated by Obama for the permanent position or if someone else will be picked for the spot. A White House spokesman declined to comment.

Many OIRA observers said they don’t have strong feelings about Bershteyn because he hasn’t been at the helm for long.

“He’s been there too short of a time so far, and that was during the election. … We just haven’t had a really good opportunity for what that might mean,” said Randy Rabinowitz, director of regulatory policy at OMB Watch, when asked about Bershteyn taking on the permanent position at OIRA.

Labor and watchdog groups grew increasingly disheartened with Sunstein as his OIRA became seen as an obstacle to finalizing health and safety protections. The Environmental Protection Agency’s ozone pollution standard was dropped during his tenure, while the Occupational Safety and Health Administration’s proposal to limit crystalline silica remained in limbo.

“The role of OIRA should be to facilitate and coordinate among the agencies, and not to act as a gatekeeper,” Rabinowitz said. “There are a lot of rules that got stopped.”

Lobbyists can request meetings with OIRA as regulations come to the agency for a final check. Many did so while Sunstein was in charge, and the Chamber and others in business say they respected Sunstein for that outreach.

“Sunstein clearly appreciated input from employers that demonstrated problems with regulatory proposals. Whoever follows him should make clear that they recognize the value of the employer community’s comments and will see them as sincere efforts to work with the administration to minimize regulatory burdens that can impede the goal of growing the economy,” Freedman said.

Sunstein’s prominence and his closeness to the president made him one of the most powerful members of the administration during Obama’s first term.

“Sunstein was running these agencies for the last 10 months,” Steinzor said. “Cass Sunstein wasn’t only an academic. He was a friend of the president. That is why he was so powerful.”

Since leaving the administration, Sunstein has taken a job as a law professor at Harvard. An assistant to him at the university said he wasn’t available for interviews.

Obama’s choice at OIRA is being watched closely by his allies on the left, who want to see a more aggressive stance.

“President Obama’s pick to head OIRA will give us some sense of whether OIRA and [the White House] will function as they did during the first two years of President Obama’s first term, moving forward with needed rules, or as they did for the past two years, acting to slow down and delay needed protections,” said Peg Seminario, the AFL-CIO’s director of safety and health.

“The AFL-CIO obviously would like to see [the White House] move forward with regulations that are needed to protect workers and the public. We will be pushing the administration to see that they do.”

Stuart Shapiro, a former OIRA policy analyst from 1998 to 2003 who has written about the regulatory review process, said Obama could continue the presidential tradition of picking an economist or lawyer from government or academia. A nominee in that mold might tell little about the direction of OIRA.

“If he deviates from this position and instead picks an advocate for regulation or an advocate for business, it will be a much stronger signal of an intended direction,” said Shapiro, now a Rutgers University associate professor.

Shapiro also said presidents tend to be more active on regulations in their second term.

“Presidents don’t have to worry about reelection and do worry about their legacies. They have unfinished work from their first term,” Shapiro said. “These push them toward using regulatory policy more frequently as their days in office dwindle.”