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Dudley, Susan E. – Acting Administrator of the Office of Information / Regulatory Affairs, Office of Management and Budget
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Dudley, Susan E. – Acting Administrator of the Office of Information / Regulatory Affairs, Office of Management and Budget
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2014-0335-F
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Monday, August 01, 2016
FOIA Marker
This is not a textual record. This FOIA Marker indicates that material has been removed
during FOIA processing by George W. Bush Presidential Library staff.
Presidential Personnel, White House Office of
Bullock, Katja - Appointee Files
Location or
NARA Number:
FRC ID:
OA Number:
Stack: Row: Sect.: Shelf: Pos.:
Hollinger ID:
W
13
28
11
3
13301
26164
12828
12945
Folder Title:
Dudley, Susan E.--- Acting Administrator of the Office of Information / Regulatory Affairs, Office of Management and
Budget
Withdrawn/Redacted Material
The George W. Bush Library
DOCUMENT
FORM
SUBJECT/TITLE
PAGES
DATE
RESTRICTION(S)
NO.
001
Form
[Form] - From: Matthew Teague
1
11/24/2008
P6/b6;
002
Form
[Form] - From: Matthew Teague
1
11/24/2008 P6/b6;
003
Form
The White House - To: Federal Bureau of Investigation -
1
11/19/2008
P6/b6;
From: The Office of the Counsel to the President
004
Database Printout Virginia Criminal History Records
1
11/19/2008
P6/b6;
COLLECTION TITLE:
Presidential Personnel, White House Office of
SERIES:
Bullock, Katja - Appointee Files
FOLDER TITLE:
Dudley, Susan E. -- Acting Administrator of the Office of Information / Regulatory Affairs, Office of Management and Budget
FRC ID:
13301
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRA]
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRA]
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advise between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(8) Release would disclose information concerning the regulation of
2201(3).
financial institutions [(b)(8) of the FOIA]
b(9) Release would disclose geological or geophysical information
Deed of Gift Restrictions
concerning wells [(b)(9) of the FOIA]
A. Closed by Executive Order 13526 governing access to national
Records Not Subject to FOIA
security information.
B. Closed by statute or by the agency which originated the document.
Court Sealed - The document is withheld under a court seal and is not subject to
C. Closed in accordance with restrictions contained in donor's deed
the Freedom of Information Act.
of gift.
2014-0335-F
Page 1 of 1
This document was prepared on Thursday, August 04, 2016
DATE:
11/24/08
PREPARED BY: Matthew Teague
NAME:
Susan Elaine Dudley
NAME & STATE:
Susan E. Dudley of Virginia
POSITION:
Acting Administrator of the Office of Information and Regulatory Affairs,
Office of Management and Budget
TYPE:
PAS
PA
SES
FT
PT
TERM: POP
VICE:
Susan E. Dudley
GENDER:
F DOB:
(b)(6)
BIRTHPLACE:
Newton, MA
PARTY:
R SSN:
ETHNIC HERITAGE:
English, Irish, Scottish
RACE:
White
CHILDREN:
Gregory B. Manninx,
SPOUSE:
Brian F. Mannix
Christopher J. Mannix
VOTING CITY, STATE
Gainesville, VA
HOME STATE:
Virginia
(in 2000)
CURRENT HOME
(b)(6)
ADDRESS:
HOME PHONE:
(b)(6)
CELL PHONE:
(b)(6)
CURRENT POSITION
Administrator of the Office of Information and Regulatory Affairs, Office
AND WORK
of Management and Budget
ADDRESS:
725 17th Street, NW
Washington, DC 20503
WORK PHONE:
(202) 395-4852
EDUCATION:
SM, Massachusetts Institute of Technology, 1981
BS, University of Massachusetts, 1977
AWARDS:
None
PREVIOUS POSITION
Director, Regulatory Studies Program, Mercatus Center, George Mason
HELD:
University
MILITARY SERVICE:
None
PREVIOUS
None
PRESIDENTIAL
APPOINTMENTS:
President approved:
Security package sent:
Counsel Clearance Sent
Susan E. Dudley
Administrator
Office of Information and Regulatory Affairs
Office of Management and Budget
Susan Dudley was nominated by the President on July 31, 2006, and appointed on April
4, 2007, to serve as the Administrator of the Office of Information and Regulatory Affairs
(OIRA) of the Office of Management and Budget.
Prior to her service at OIRA, from 1998 through January 2007, Ms. Dudley served at the
non-profit Mercatus Center at George Mason University, where she directed the
Regulatory Studies Program from 2003 to 2006. As an Adjunct professor at the George
Mason University School of Law from 2002 to 2006, she designed and taught courses
on regulations and led regulatory clinics.
Earlier in her career, Ms. Dudley served as a career civil servant, working as a policy
analyst at the Environmental Protection Agency (1984-1985), an economist at OIRA
(1985 - 1989), and an economist advisor to the Commodity Futures Trading
Commission (1989 - 1991). From 1991 until 1998, she was a consultant to government
and private clients at Economists Incorporated.
Ms. Dudley has authored more than 25 scholarly publications on regulatory matters
ranging from e-rulemaking, to electricity, health care, the environment, and occupational
safety. Before joining the Administration, she served on the boards of the Association
of Private Enterprise Education and the International Foundation for Research in
Experimental Economics, which was founded by Nobel Prize winning economist Vernon
Smith. She has also served as a citizen member of several committees and boards in
the Commonwealth of Virginia, including the Virginia Environmental Education Advisory
Committee (2000-2002), the Administrative Law Advisory Committee (2000-2003), and
the Virginia Waste Management Board (1996-2001).
Ms. Dudley holds a Master of Science degree from the Sloan School of Management at
the Massachusetts Institute of Technology (1981) and a Bachelor of Science degree
(summa cum laude) in Resource Economics from the University of Massachusetts,
Amherst (1977). She lives in Virginia with her husband and two sons.
DATE:
11/24/08
PREPARED BY: Matthew Teague
NAME:
Susan Elaine Dudley
NAME & STATE:
Susan E. Dudley of Virginia
POSITION:
Acting Administrator of the Office of Information and Regulatory Affairs,
Office of Management and Budget
TYPE:
PAS
PA
SES
FT
PT
TERM: POP
VICE:
Susan E. Dudley
GENDER:
F DOB:
(b)(6)
BIRTHPLACE:
Newton, MA
PARTY:
R SSN:
ETHNIC HERITAGE:
English, Irish, Scottish
RACE:
White
CHILDREN:
Gregory B. Manninx,
SPOUSE:
Brian F. Mannix
Christopher J. Mannix
VOTING CITY, STATE
Gainesville, VA
HOME STATE:
Virginia
(in 2000)
CURRENT HOME
ADDRESS:
(b)(6)
HOME PHONE:
(b)(5)
CELL PHONE:
(b)(6)
CURRENT POSITION
Administrator of the Office of Information and Regulatory Affairs, Office
AND WORK
of Management and Budget
ADDRESS:
725 17th Street, NW
Washington, DC 20503
WORK PHONE:
(202) 395-4852
EDUCATION:
SM, Massachusetts Institute of Technology, 1981
BS, University of Massachusetts, 1977
AWARDS:
None
PREVIOUS POSITION
Director, Regulatory Studies Program, Mercatus Center, George Mason
HELD:
University
MILITARY SERVICE:
None
PREVIOUS
None
PRESIDENTIAL
APPOINTMENTS:
President approved:
Security package sent:
Counsel Clearance Sent
Susan E. Dudley
Administrator
Office of Information and Regulatory Affairs
Office of Management and Budget
Susan Dudley was nominated by the President on July 31, 2006, and appointed on April
4, 2007, to serve as the Administrator of the Office of Information and Regulatory Affairs
(OIRA) of the Office of Management and Budget.
Prior to her service at OIRA, from 1998 through January 2007, Ms. Dudley served at the
non-profit Mercatus Center at George Mason University, where she directed the
Regulatory Studies Program from 2003 to 2006. As an Adjunct professor at the George
Mason University School of Law from 2002 to 2006, she designed and taught courses
on regulations and led regulatory clinics.
Earlier in her career, Ms. Dudley served as a career civil servant, working as a policy
analyst at the Environmental Protection Agency (1984-1985), an economist at OIRA
(1985 - 1989), and an economist advisor to the Commodity Futures Trading
Commission (1989 - 1991). From 1991 until 1998, she was a consultant to government
and private clients at Economists Incorporated.
Ms. Dudley has authored more than 25 scholarly publications on regulatory matters
ranging from e-rulemaking, to electricity, health care, the environment, and occupational
safety. Before joining the Administration, she served on the boards of the Association
of Private Enterprise Education and the International Foundation for Research in
Experimental Economics, which was founded by Nobel Prize winning economist Vernon
Smith. She has also served as a citizen member of several committees and boards in
the Commonwealth of Virginia, including the Virginia Environmental Education Advisory
Committee (2000-2002), the Administrative Law Advisory Committee (2000-2003), and
the Virginia Waste Management Board (1996-2001).
Ms. Dudley holds a Master of Science degree from the Sloan School of Management at
the Massachusetts Institute of Technology (1981) and a Bachelor of Science degree
(summa cum laude) in Resource Economics from the University of Massachusetts,
Amherst (1977). She lives in Virginia with her husband and two sons.
(8-29-05)
THE WHITE HOUSE
Washington
Date
(For White Housc use only)
To:
Federal Bureau of Investigation
Attn:
National Name Check Program Unit (Room G387)
Contractor and Other Government Agency
Processing Unit (Room 10861)
From: The Office of the Counsel to the President
Subject's full name Susan Elaine Dudley
Other names used (including birth, prior married, and nicknames)
Social Security Number
(b)(6)
Date of birth
(b)(6)
Place of birth
(b)(6)
I
Permanent address
(also current residence, if different)
(b)(6)
Current employer(s)
OMB
SUBJECT'S CONSENT: 1 hereby 5902ly anthorize the FBI to provide the Information specified below to the White House.
11/19/08
(Subject's Signature)
(Date)
Request of FBI (Use of this form to request information developed by the FBI or contained in FBI files requires
the subject's consent. Exceptions will only be permitted as authorized by the Attorney General/Deputy Attorney
General.)
Name check (NNCPU)
Copy of previous report (NNCPU)
Expanded name check (COGAPU)
Full field investigation (COGAPU)
Level 1
Level 2
Level 3
Level 4
5-year reinvestigation (COGAPU)
Level 2
Level 3
Limited update investigation (COGAPU)
Other (specify)
The applicant is being considered for:
Presidential appointment
Position requiring Senate confirmation
White House staff position
Access:
Detailec/other government employee
Contractor
Intern
Volunteer
Presidential recognition
Other (specify)
Attachments:
SF-86
SF-86 Supplement
Fingerprint Card
Other
Remarks/
Special instructions:
I certify, subject to 18 U.S.C. § 1001, that the above is sought for official purposes only and I
understand that obtaining this information under false pretenses or any unauthorized disclosure may be a violation
of the Privacy Act, 5 U.S.C. $ 552a.
Requested by:
(Signature)
This request has been reviewed and approved by the White House Counsel's Office.
Approved by:
Signature (Counsel's Office)
Name, Last
First
Middle
Title
Occupation
DUDLEY
SUSAN
E.
Political Appointee
Position Sought
Position
Firm / Agency
Acting Administrator,
Administrator
OMB
Office of Information
2007 - Present
Office of Information and
and Regulatory Affairs,
Regulatory Affairs
OMB
Notables
***Update Includes Articles From The Washington Post, The New York
Times, Federal Times, Los Angeles Times, Roll Call, USA Today, McClatchy-
Tribune Business News, United Press International, And The Associated
Press And Its Subsidiaries***
Dudley Is Cited In Myriad Articles In Her Capacity As An Official At The
Office Of Management And Budget.
Congressman Waxman Threatened To Hold A Vote On A Contempt
Resolution For Dudley If She Didn't Submit Evidence That The White House
Intervened In Regulatory Affairs At The Environmental Protection Agency.
"Democratic Rep. Henry Waxman of California, chairman of the House
Government Reform and Oversight Committee, said he'd hold a vote in his
committee next week on a contempt resolution, if he doesn't get the information he
wants. He made the threat in letters to EPA Administrator Stephen Johnson and
Susan Dudley, administrator for information and regulatory affairs at the White
House Office of Management and Budget. Waxman and others have complained
about evidence that the White House intervened with the Environmental
Protection Agency to produce more industry-friendly outcomes on both the smog
and greenhouse gas issues. Waxman has issued a series of subpoenas to learn
more, but weeks have passed and neither EPA nor the Office of Management and
Budget has fully complied. Waxman said Friday he'd waited long enough. 'I
regret that your failure to produce responsive documents has created this impasse,
but Congress has a constitutional duty to conduct oversight of the executive
branch,' he wrote to both officials. 'Therefore, unless the documents are provided
to the committee or a valid assertion of executive privilege is made, the committee
will meet on June 20 to consider a resolution holding you in contempt,' Waxman
wrote. EPA spokesman Jonathan Shradar said his agency has turned over tens of
thousands of documents to Waxman 'and there has been no wrongdoing
uncovered.' 'The committee seems to be on a political hunt that will leave them
Internal Presidential Personnel Office Document
Do Not Disseminate
1
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wanting yet again," Shradar said in a statement. OMB spokeswoman Jane K. Lee
called Waxman's move 'unfortunate' and said the office that Dudley heads 'has
gone to great lengths to cooperate with the committee, providing voluminous
documents on an expedited basis (more than 7,500 pages).' Johnson has
consistently maintained that he was the one who made the final decisions on the
smog rule and the California greenhouse gas waiver. The EPA in March issued
tougher health standards for ozone, commonly known as smog, but they weren't as
tough as recommended by an EPA science advisory board and many health
experts. The EPA also did not go as far as the science panel had recommended in
setting a separate standard to protect the environment from smog. EPA and White
House officials have acknowledged that a tougher standard had been opposed by
the Office of Management and Budget and the issue was settled after President
Bush intervened directly on behalf of the White House staff only hours before the
rule was announced. On the California greenhouse gas issue, Waxman's
committee staff produced a report last month concluding from interviews with
high-level EPA officials that Johnson initially supported giving California full or
partial permission to limit tailpipe emissions but reversed himself after hearing
from the White House. More than a dozen other states were also blocked from
implementing the tailpipe emission limits after Johnson rejected California's
request for a required federal waiver in December." (The Associated Press,
6/13/2008)
President Bush Sided With Dudley In A Dispute Between Her Office And The
EPA Over Specific Parameters Of Smog Regulation. "It isn't often in
Washington that a paper trail on a controversial regulatory decision leads back to
the White House quite so publicly. The conflict between Stephen L. Johnson,
administrator of the Environmental Protection Agency, and Susan E. Dudley, head
of regulatory review at the Office of Management and Budget, over how strong to
make a standard on ozone, a component of smog, was unusual because President
Bush was asked to break the impasse. He decided on a requirement weaker than
what the EPA wanted. 'During my experience, the policy people in the
administration are all part of the same administration and don't like to air a public
policy dispute,' said Donald R. Arbuckle, a retired deputy of the OMB Office of
Information and Regulatory Affairs who served there 25 years. Regulatory
experts said this was the first time they recall a president stepping in, under a
provision of an executive order allowing appeals between agencies and the OMB
to be sent to him for a final decision. Typically, differences like these are worked
out behind closed doors among top officials. When the Department of
Transportation was sparring with the OMB in 2005 over the terms of a rule on
how long truckers could drive before resting, a long conference call between
Internal Presidential Personnel Office Document
Do Not Disseminate
2
Last printed 11/19/2008 3:11:00 PM
officials of the two agencies settled the differences. Democrats in Congress want
to follow the paper trail further. Rep. Henry A. Waxman (D-Calif.), who is
chairman of the House Committee on Oversight and Government Reform, has
asked the OMB for 'unredacted copies of communications' about the ozone
standard. In the Bush administration, the OMB has usually intervened at earlier,
informal stages of rulemaking, where there is no public documentation. That
makes it difficult to know where changes in an agency's final rule originated.
Veterans of the process say the ozone dispute was extraordinary because three
documents written between March 6 and March 12 spelled out in detail the policy
positions and arguments that the OMB and EPA marshaled. The disagreement was
over a so-called public welfare standard for ozone, which is designed to protect
vegetation, parks and farm lands. When the EPA sent its final rule to the OMB on
Feb. 22, it proposed lowering the permissible ozone 'public health' standard to
0.075 parts per million, the concentration in the air over an eight-hour period,
from the current 0.084 parts per million. The agency proposed for the first time
changing the secondary standard to one in which ozone would be measured over a
seasonal period because of concerns over the cumulative effect the pollutant has
on vegetation. Agricultural interests, including corn growers and others in the
biofuels business, opposed the idea. They had a meeting with OMB officials,
including Dudley, on Jan. 24. The administration reviewers also met with public
health and environmental groups pushing to make the rule more stringent. In
going ahead with the plan for a separate secondary standard, Johnson was
following the advice of EPA staff members and scientific advisers. Dudley fired
back in a March 6 memo to Johnson, signaling her opposition. 'The draft rule
under review does not contain a reasoned basis for concluding that a secondary
standard set separate from the primary standard is 'requisite to protect the public
welfare,' she wrote. The EPA responded the next day that 'there is no
presumption that the secondary standard should be the same as the primary
standard.' The agency said it was relying on new research to propose seasonal
monitoring. The letter was signed by Marcus Peacock, the deputy administrator
who once worked at the OMB review office. The EPA also prepared a
deliberative and confidential' memo on March 11 to support the new, separate
standard. It was then that the feud escalated to the president. Another letter from
Dudley on March 12 said Bush concluded the two standards should be the same.
A senior administration official said the exchange of correspondence was included
in the public record to demonstrate that no backroom deals had been made. We
thought it would be in everyone's interest to show clearly what our concerns were
and the rationale for those concerns,' said the official, who spoke on condition of
anonymity because the negotiations were confidential. The goal in posting the
documents on government Web sites 'was to minimize mischaracterizations of
Internal Presidential Personnel Office Document
Do Not Disseminate
3
Last printed 11/19/2008 3:11:00 PM
these concerns,' the official said. Johnson said at a news conference that he made
the final decision on the rule, though the published preamble to the rule reflects
the influence of the OMB and the White House. Frank O'Donnell, president of
Clean Air Watch, an environmental group in the District, said, 'EPA was carefully
trying to keep records to show [that the OMB] was pushing them in a different
direction. They were squashed at the last minute.' Waxman's attempt to learn
more about the rulemaking has been stymied so far. He has received only
documents already made public, according to a follow-up letter he sent to Dudley
on April 1. He said the committee is entitled to the material unless the president
'intends to assert a valid claim of executive privilege.' (The Washington Post,
4/8/2008)
Dudley Discussed Her Achievements And Goals Three Months Into Her
Tenure At OMB. (Federal Times, 7/30/2007) (See Attached)
Dudley Assumed Her Position Through A Recess Appointment By President
Bush. "Democrats also complained about the appointment of Susan E. Dudley as
administrator of the Office of Information and Regulatory Affairs at the Office of
Management and Budget, a powerful position that involves review of regulations
from major federal agencies. Ms. Dudley has written that government regulation is
not warranted 'in the absence of a significant market failure,' alarming consumer
and environmental groups. Mr. Bush nominated her in August and again in
January, with Democrats vowing to block confirmation." (The New York Times,
4/5/2007)
Dudley's Previous Nomination To The Same Position Was Halted By Senator
Collins In December 2006. "The nomination of President Bush's controversial
pick to head the government's regulatory policy office is dead, according to a
leading Republican senator. Sen. Susan Collins, R-Maine, who chairs the
committee considering the nomination, said she decided not to bring the
nomination of Susan Dudley to a vote this month by the Homeland Security and
Governmental Affairs Committee. She said she did this because of the lack of time
remaining in this Congress and opposition to Dudley's nomination from
Democrats. 'It is pointless to proceed to a markup when the nomination isn't
going anywhere,' Collins, who supported Dudley, told Federal Times on Dec. 6.
'The president could send the nomination up again next year, but it's clear that it
would be not a good use of the committee's time.' White House officials said
Dec. 6 they were disappointed time had run out to vote on Dudley's nomination to
head the Office of Information and Regulatory Affairs (OIRA) at the Office of
Management and Budget 'Ms. Dudley is committed to bipartisan outreach and
ensuring regulatory decisions are based upon sound science,' said Christin Baker,
OMB's associate director of communications. Because most of Dudley's
Internal Presidential Personnel Office Document
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4
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opposition is from Democratic senators, it is expected she would face an even
tougher confirmation challenge in the next Congress if Bush renominated her.
Dudley drew intense scorn from environmental and public safety groups who say
she is an anti-regulatory extremist. Dudley's critics have lambasted her over
comments she made against increased energy standards for consumer appliances,
more stringent fuel economy regulations, and limiting the sale of genetically
modified foods. Previously, Dudley has served in regulatory policy positions at
the Commodity Futures Trading Commission and Environmental Protection
Agency and as an economist at OIRA. Until her nomination, she was director of
the regulatory studies program at George Mason University's Mercatus Center."
(Federal Times, 12/11/2006)
Dudley Coauthored "The Regulators' Growing Budget." (See Attached
Below)
Dudley Participated In White House Economic Forum. "When administration
officials asked conference participants for ideas and suggestions, they recited
White House proposals: more tax cuts, limits on lawsuits, fewer federal
regulations. 'From the moment you get out of bed in the morning, you're
regulated,' said George Mason University professor Susan Dudley, who said she
would like to see the government do better cost-benefit analyses of regulatory
initiatives." (Los Angeles Times, 12/16/04)
Although Dudley Noted That President George W. Bush's Administration
Has A Good Record On Regulation, She Urged The President To Clean Out
"Sunsetting" Rules In His Second Term. "This isn't the first time an
administration has tried to clean its regulatory closet. What usually happens is a
well-intentioned first weeding and then the effort goes to seed. Presidents Jimmy
Carter, Bill Clinton and George H.W. Bush also had initiatives to streamline the
regulatory process. Susan Dudley of George Mason University's Mercatus
Center, which was the most prolific nominator in 2001 (44 of the 71
recommendations), said the current administration has done a better job than its
predecessors of holding the line on new rules. But reviewing existing regulations
has taken a back seat. 'The administration has an opportunity in its second term to
establish procedures for 'sunsetting' rules that have outlived their purpose and
reforming regulations that have had unintended consequences,' said Dudley, who
directs the center's regulatory studies program." (The Washington Post, 12/7/04)
Dudley On President Bush And Regulation: "Susan Dudley, director of the
Mercatus Center's Regulatory Studies Program at George Mason University, rates
Bush as a proponent of smarter regulation. She said Bush was 'more careful'
about regulating than Clinton, but she did not consider Bush to be deregulatory or
Internal Presidential Personnel Office Document
Do Not Disseminate
5
Last printed 11/19/2008 3:11:00 PM
anti-regulatory." (The Washington Post, 11/2/04)
Profile Of Dudley And Mercatus Which Notes That "Partly Because Of
Mercatus's Reputation For Ideological Fervor, White House Regulators Have
Recently Distanced Themselves From The Think Tank": "Mercatus's 29-
person staff works from a warren of small offices decorated with Mexican folk-art
paintings in George Mason's law school in Arlington, Va. The center spends about
9% of its $6.8 million budget on its in-house regulatory program. Much of the rest
of the budget is devoted to seminars and outside research on economic issues
including regulation. Ms. Gramm stepped down as director of Mercatus's
regulatory unit last year, although she remains a Mercatus fund- raiser. She was
succeeded by a protege, Susan Dudley, who had worked for Ms. Gramm at the
Reagan White House. Ms. Dudley, a 49-year-old graduate of Massachusetts
Institute of Technology's Sloan School of Management, specializes in
environmental regulation and drives a 2001 Toyota Prius hybrid to work with her
husband, another alumnus of the White House regulatory office who ended up at
Mercatus. She calls herself a 'free-market environmentalist,' explaining she wants
to protect the environment through 'market-based incentives.' One example of
how Mercatus works the system was its 2003 effort to blunt an EPA rule on how
many fish a power plant could kill when it sucked in river water for cooling. The
rule would cost utilities money while benefiting commercial fisherman by giving
them more fish to catch. The EPA argued that there was an additional benefit: the
'sense of altruism [and] stewardship' consumers would feel by protecting river
ecosystems. It contended this was worth hundreds of millions of dollars -- more
than the benefit to fishermen. Ms. Dudley and another Mercatus researcher poked
at the calculation. They found it rested in part on a study of consumers in affluent
eastern Long Island who were asked whether they would be willing to pay to
protect the wetlands. By the EPA's logic, Ms. Dudley argued in formal comments
and an opinion piece in the Washington Times last year, Americans 'place a much
higher value on a fish swimming free than one on your plate.' The article was
passed around EPA headquarters, and agency officials say it added to the pressure
on the EPA from the White House and the Energy Department to drop the altruism
calculation. Mary Smith, an EPA official who worked on the rule, says some of
Mercatus's criticisms were overstated but the EPA didn't have the time to do a
fresh study. The EPA issued the final fish-kill rule earlier this year, but
acknowledged that the economic costs of the regulation far outweigh the benefits.
Mercatus sees that as a victory because it helps the think tank make the broader
case that many environmental rules are more expensive than they are worth.
Mercatus analysts sometimes contort themselves to build a case against regulation.
Ms. Dudley and Ms. Gramm criticized one EPA rule to reduce surface ozone
Internal Presidential Personnel Office Document
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6
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because the EPA didn't take into account that clearer skies would increase the rate
of skin cancer. Later, two other Mercatus scholars blasted a different EPA rule on
diesel engines, arguing that it was bad because it would increase surface ozone in
some cities. This time they didn't say anything about the cancer- prevention
benefits of more smog. 'We didn't go to the next step,' Ms. Dudley acknowledges.
Lisa Heinzerling, a Georgetown University law professor, says Mercatus 'cites the
most outlandish costs of regulation.' She helped organize a liberal think tank
called the Center for Progressive Regulation to counter Mercatus's influence.
Partly because of Mercatus's reputation for ideological fervor, White House
regulators have recently distanced themselves from the think tank. The White
House regulatory office has approved a number of regulations that Mercatus
criticized, including the diesel-engine rule. Over the past year or so, Mercatus has
tried to broaden its reach, hiring former Democratic Rep. Tim Roemer of Indiana.
He has made an effort to invite Democratic staffers to Mercatus seminars. Another
new hire is former Rep. J.C. Watts of Oklahoma, a Republican. In May Mercatus
staged a session, funded by Gillette, for staffers of the Congressional Black
Caucus and the National Association for the Advancement of Colored People.
Mercatus researchers argued that if lawmakers want to limit pollution, they should
try market-based solutions, such as trading emission permits. Although the Bush
administration has drawn criticism from liberals for easing environmental
regulations, Ms. Dudley argues that even under Republican rule overall regulatory
costs continue to rise. The answer, she says: more Mercatus studies to show the
real burden of red tape. 'Clean air sounds so good,' she says. 'But what are the
costs? They're hidden." (The Wall Street Journal, 12/12/00)
-
Dudley Coauthored Report On Federal Regulation During President George
W. Bush's Tenure. (See Attached Below)
-
Dudley Commented On Best And Worst Rules of 2003. "Best rule of 2003:
The FDA requirement that manufacturers of conventional foods and some dietary
supplements list trans fatty acid content on the Nutrition Facts Panel of their
products by Jan. 1, 2006. This final rule was a significant improvement over
FDA's 1999 proposal, which would have required manufacturers to include the
amount of trans fat on the 'saturated fat' category of the label, even though trans
fats are not saturated fats chemically, nor are they the same in their biological
effects. In the final rule, FDA wisely decided to allow manufacturers to tell the
truth about trans fats in their products. Worst rule of 2003: The National Highway
Traffic Safety Administration corporate average fuel economy (CAFE) standards
for light trucks. NHTSA continues to force vehicle manufacturers to achieve
higher miles per gallon than the market would offer, or consumers would choose,
in the absence of the regulation. Absurdly, its economic model shows large net
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benefits to consumers even if markets are assumed to operate perfectly, i.e.,
without counting any externalities. We know this must be false, because any
regulatory constraint that forces consumers away from their preferred choices
must have negative net benefits (i.e., make Americans worse off). State of
regulatory apparatus: The Bush administration has reenergized the regulatory
oversight function that has been in the Executive Office of the President for more
than three decades. The policies and guidelines issued by the Office of
Information and Regulatory Affairs have increased the transparency, scientific
basis, and analytical rigor of the regulatory process. Unfortunately, OIRA and the
agencies (with the possible exception of Labor and Interior) have focused on
improving technical and analytical methods, without recognizing the importance
of such fundamental American values as market solutions, property rights,
individual choice and responsibility, or federalism." (The Washington Post,
12/30/03)
Dudley Letter To The Editor On EPA Regulation Is Attached Below.
In 2001, Cox News Service Reported Dudley's Rather Neutral Assessment Of
President George W. Bush's Delay In The Implementation And Promulgation
Of Clinton Regulations. According to the report: "Back in January, many
Democrats were alarmed when Bush announced the 60-day delay on new rules.
Those regulations, most of which had been years in the making, had been
approved by President Clinton during his final days in office, but had not yet taken
effect. But with the 60-day period now over, the new administration's positions
are better known and 'the record is mixed,' said Susan E. Dudley, senior
researcher at the Regulatory Studies Program at George Mason University in
Northern Virginia. Bush is revealing that he is 'more of a pragmatic businessman,
somewhere in the middle," she said" (see attached article.) In 2002, CFO further
reported: "We saw a flurry of 'midnight regulations' by Clinton, and Bush put a
hold on them on day one,' says Susan Dudley, a senior research fellow at the
Mercatus Center at George Mason University. Many were eventually allowed to
go through, she notes, but by reversing some and amending others, the Bush
Administration sent a clear message that regulatory reform was a major agenda
item (see box, below)."
In 1997, The Lancaster New Era Reported Dudley's Remarks On Ozone:
"Since ozone haze acts to screen humans from direct sunlight, significant
reductions in ozone could cause thousands of new cases of skin cancer and eye
cataracts each year, according to Susan Dudley, a former federal government
economist and private consultant." Dudley also co-authored "EPA's Proposed
Ozone Standard May Harm Public Health and Welfare."
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In 1997, The New York Times Published Critical EPA Commentary Co-
Authored By Dudley: "As appealing as it may seem, we'll stick in the real
world, where E.P.A. regulations can do more harm than good when they're based
on poor science and bad economics."
-
In 1997, Regulation Published An Article Co-Authored By Dudley Titled,
"Congress And The Clinton OMB: Unwilling Partners In Regulatory
Oversight?"
In 1997, Dudley Testified Before The U.S. Senate Subcommittee On Clean
Air, Wetlands, Private Property And Nuclear Safety To Discuss The Risk
Assessment Underlying The Environmental Protection Agency's Proposed
National Ambient Air Quality Standard (NAAQS) For Ozone.
In 1998, Regulation Reported: "Even the EPA's cap-and-trade proposal could
be improved if the EPA defined the cap, not in terms of tons of NOx removed at
the source, but in terms of the health benefits from reducing ozone. It would
require the development of nonuniform caps tailored to the impacts attributable to
individual jurisdictions. The EPA could also better target the risks of concern by
adopting a trading approach that limits trades between subregions."
In 2000, The Star Tribune (Minneapolis) Reported: "Susan Dudley, a deputy
OMB branch chief from 1984 through Reagan's second term, said Bush's
appointees are 'likely to be more skeptical of whether regulations will solve
environmental and public health and safety problems and look at the effects of
incentives and other approaches."
-
In 2000, Chemical Week Reported: "Others say the EPA proposal does not
protect against the threat of terrorist attack nor provide the public with useful
information. 'After we reviewed EPA's rule we realized it did not meet the needs
that they were trying to balance -- the public's right-to-know and preventing
terrorist attack,' says Susan Dudley, senior research fellow at the Mercatus Center
(Arlington, VA), a public policy research center at George Mason University. The
revised proposal limits what information is placed on the government Web site but
does not prevent other groups from posting all of the data on their independent
Web sites, says Dudley."
Dudley, On Washing Machine Regulation (Government Executive, 2001):
"Washed Up Which brings us back to the washing machine regulation. The
Energy Department drew up the rule as part of what it says is an effort to save
energy as well as save consumers money over the life of their machines. The
department estimates that the front- loading machines required by the rule will
cost 57 percent more than top-loading machines, but will ultimately save
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consumers money if they wash more than six loads a week. If they wash less than
that, they will lose money. Of course, people may do more loads because front
loaders wash less clothing at a time. Mercatus' Susan Dudley says the rule was
crafted under what might be called a 'bootleggers and Baptists' theory, a reference
to the unlikely alliance that backed federal Prohibition of alcoholic beverages. The
washing machine rule was backed by appliance manufacturers, who will be able to
sell more expensive machines, and environmental activists with little input from
consumers, she says. The average front-loading machine costs between $700 and
$1,000, while top-loaders start at $400. Front-loaders are available now, but 95
percent of Americans buy top-loading machines, she says."
In 2003, PR Newswire Cited A Report Co-Authored By Dudley Which Stated
Significant Increases In Regulatory Enforcement In President George W.
Bush's Budget: "In Regulatory Spending Soars: An Analysis of the U.S. Budget
for Fiscal Years 2003 and 2004', the Weidenbaum Center's Melinda Warren and
Mercatus Center's Susan Dudley analyze projected spending and staffing for the
60 regulatory agencies as proposed in President Bush's 2004 Budget of the United
States Government. The $30.1 billion price tag is a 14.9 percent increase over
actual spending for 2002. A 4 percent decline is scheduled for 2004."
Dudley Co-Authored A 2003 Report Critical Of The EPA Entitled "EPA
Dodges A Rule." An excerpt: "Apparently, EPA thinks we place a much higher
value on a fish swimming free than on one on our plate. EPA's estimates suggest
that we are willing to pay between $61 and $113 per pound for fish that we don't
eat (just to know they are swimming safely) compared to the $1.12 a pound that
we have revealed we are willing to pay for fish at our neighborhood grocery store"
(Scripps Howard News Service, 2003).
Dudley Contributed To U.S. Senator George Allen (R-VA).
Flags
Dudley Was A Contributor To The Property And Environment Research
Center's Report Card On President George W. Bush's Administration;
Report Gave The President A "C+" Overall, And The Section On Regulation
(Authored By Dudley) Gave The President A "B-". "President Bush's
environmental policy has received a C+ grade from PERC, the Property and
Environment Research Center. The grade is based on the administration's
adherence to respect for property rights, market trading, and decentralization.
These principles are summed up by the term 'free market environmentalism.
PERC Senior Fellow Bruce Yandle announced the grade at the National Press
Club in Washington, D.C. 'When reviewing public policy actions, the FME
perspective looks for ways to change public managers' incentives and to open up
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opportunities for voluntary actions while never relaxing the pursuit of
environmental goals,' said Yandle. PERC is a nonprofit institute based in
Bozeman, Montana, dedicated to improving environmental quality through
markets. It issued a mid-term report card on the Bush administration in January
2003. The administration's grade for the full four years, Yandle noted, is better
than the C? the administration received at mid-term, 'but not the kind of grade that
deserves a certificate from the dean.' The C+ grade suggests that the Bush
administration has improved slightly on the Clinton administration in bringing
market approaches into environmental policy. The grades for the 15 subjects
studied range from Ds to one B+, except for an F for air quality. The best grades
came in the areas of regulatory review, agricultural chemicals, security of
chemical plants, water quality, water allocation, and global climate change.
Yandle's team includes policy analysts from think tanks and universities,
including: Terry L. Anderson (PERC's executive director), Andy H. Barnett,
Susan Dudley, Holly L. Fretwell, B. Delworth Gardner, Dana Joel Gattuso,
Donald R. Leal, Angela Logomasini, Joel Schwartz, and Daniel Simmons. PERC
Senior Fellow Jane S. Shaw coedited the 115-page report with Yandle."
(Accessed At; http://www.perc.org/perc.php?id=477)
Dudley's Scoring Of President Bush's Regulatory Policy Was Lukewarm.
"Despite some bright spots, we don not see much evidence that OIRA is an
advocate for market solutions, property rights, individual choice and
responsibility, or federalism. We give the Bush administration a B- for its final
regulatory review grade." (See Attached PDF File, Accessed At;
http://www.perc.org/pdf/reportcard_2004/12regulationrey.pdf)
According To FEC Records, A Susan E. Dudley Of Washington DC,
Affiliated With Putnam, Hayes And Bartlett Inc., Contributed $500 To
Walter Mondale's 1984 Presidential Campaign.
-
Dudley Has Three Virginia Traffic Citations. (See Attached Below)
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DUDLEY, SUSAN
5/28/1999 $1,000.00
GAINESVILLE, VA 20155
GEORGE MASON UNIVERSITY - -[Contribution]
FRIENDS OF GEORGE ALLEN
DUDLEY, SUSAN
5/28/1999 $1,000.00
GAINESVILLE, VA 20155
GEORGE MASON UNIVERSITY - -[Contribution]
FRIENDS OF GEORGE ALLEN
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VIRGINIA CRIMINAL HISTORY RECORDS
FAIRFAX COUNTY DISTRICT COURT
Name: DUDLEY,SUSAN E
Date of Birth:
(b)(6)
SSN:
(b)(6)
*****OFFENSE RECORD*****
Offense: VIOL HOV RESTRICTIONS
Offense Date: 11/22/1994
County or Jurisdiction: Fairfax County
Case Disposition: PRE-PAID
Case Number: T1994-166507-A1
Disposition Date: 1/27/1995
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VIRGINIA CRIMINAL HISTORY RECORDS
TRAFFIC COURTS
Name: DUDLEY, SUSAN ELAINE
*****OFFENSE RECORD*****
Offense: FAIL TO OBEY RED LIG
Offense Severity: Infraction
Offense Date: 6/5/1998
Filing Date: 6/10/1998
Court Jurisdiction: FAUQUIER GENERAL DISTRICT
Case Disposition: Prepaid
Case Number: 061GT9800764600
Disposition Date: 7/17/1998
Sentence Type: Fine
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Offender information
Name: DUDLEY, SUSAN ELAINE
Address: VA
Case Number: 061GT9800764600
Sex: Unknown
Offenses
Case Number: 061GT9800764600
Offense Date: 6/5/1998
Arrest
Level/Degree: INFRACTION
Court Case
Number: 061GT9800764600
Court Offense: FAIL TO OBEY RED LIG
Court
Disposition: PREPAID
Court
Disposition
Date: 7/17/1998
Court
Level/Degree: INFRACTION
Court Activity
[NONE FOUND]
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Federal Times
July 30, 2007
Correction Appended
Her focus is regulations -- and their
consequences
SECTION: Pg. 22
LENGTH: 1388 words
One position in government that tends to provoke controversy is that of
director of the Office of Information and Regulatory Affairs.
When Susan Dudley was nominated to the Office of Management and Budget
post last summer, liberal groups were outraged. In academic writings, Dudley
had argued that consumers should have more say in the products they
purchase rather than rely on government to limit options through regulation.
With such opinions, Dudley would be a threat to public health and safety, said
Joan Claybrook, president of Public Citizen. She would be "ten times worse"
than her predecessor, John Graham, said Robert Shull of OMB Watch.
OIRA and its small staff of around 50 regulatory analysts packs a huge punch
overseeing federal regulatory policy. The office is ground zero in the battles
between groups that advocate increased regulations on corporations and
consumers, and groups that advocate government restraint in the marketplace.
Dudley, never confirmed by the Senate, was appointed to the job by
President Bush during a Senate recess in April. The brutal confirmation
hearing process was beneficial, she says.
"I was a little bit taken aback by the passionate opposition to my nomination,
but I realized that it's the office that there's passionate debate about. Anybody
who believes in the office and the function it does is bound to have a reaction,"
she said. "I've learned not to take things personally. My skin is thicker than it
was a year ago."
Dudley moved to Washington 25 years ago with ideals to make the world a
better place. She calls herself a free-market environmentalist and has driven a
hybrid car for years. She served as a career civil servant at the Environmental
Protection Agency and OMB before working as a private-sector consultant on
regulatory policy. She also ran the Regulatory Studies Project at George Mason
University's Mercatus Center.
Her academic papers and research advocating less regulation and more
consumer options caused her the most grief with liberal critics.
"I don't have horns," she joked in her quiet and unassuming manner.
Following are edited excerpts of an interview in which Dudley talked about her
first few months on the job:
Q: How do you envision OIRA's role and your role as administrator?
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Dudley: The role of the office has been reinforced throughout the last 25 years
to look out for the broader public interest and both intended and unintended
consequences of regulatory activity. My role will be to make sure that we
continue to do that well.
Q: What's high on your agenda?
Dudley: I'm going to look at midnight regulations. Looking back at the end of
administrations, we see that, regardless of who is president and which party
controls Congress, there is a statistically significant increase in regulations.
I'm not going to promise that you're not going to see an increase in regulatory
activity but that it will not be slapdash. To accomplish that, we're talking to
agencies now and saying "We understand you have some priorities -- let's
make sure you don't try to rush them at the end, make sure there's an
opportunity for interagency review, public comment and analysis so you know
what the effect of the regulations are as well."
Q: What do you see as your biggest management challenges?
Dudley: One thing that is not a management challenge is managing this staff.
We have a terrific career staff. They're principled, with a wide variety of
education and are well respected in the field of regulatory policy, statistical
policy and information policy.
Homeland security regulations are a challenge. It's a newer field, it's harder to
understand the effects of these regulations. How do we design them to make
them as effective as possible? What is the likelihood of something happening?
Those are very difficult things to understand before the fact. All of the things
that OIRA does -- relying on statistical information, making sure we have
quality information -- will be needed because it's such a new area of regulatory
activity.
Q: Under a January executive order, each agency is required to have a
presidentially appointed regulatory officer. Why?
Dudley: We haven't placed any new regulatory officers in the agencies. These
are existing positions. President Clinton's executive order had regulatory policy
officers in each agency. This change makes them be a presidential appointee
who can go in front of Congress. Now we have a list of who the regulatory
policy officers are in each agency. It tends to be general counsel, deputy
secretary or the head of the policy office. The position helps with interagency
coordination on regulatory issues but also to help coordinate things through
OMB. We had gotten to the point that OMB didn't know -- and, in fact, some
agencies didn't know -- who their regulatory officers were.
Q: Which of Graham's reforms do you consider the most important?
Dudley: Several of his reforms went to improving our understanding of the
consequences of regulations before we issued them. He also improved
information quality guidelines and peer review requirements. He built on
Clinton's guidelines for regulatory analysis, issuing the guidelines for public
comment and publishing them as a circular.
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Q: Graham issued hardly any return letters -- requiring agencies to reconsider
a regulation or their analysis of it. Will you continue in that vein?
Dudley: He did at beginning -- his view was after he sent the initial return
letters, agencies took more seriously their responsibility for doing the analysis
and justifying their regulatory actions. So there was less need for return letters.
Q: Any plans for prompt letters -- telling agencies to begin work on a
regulation?
Dudley: I think they're a valuable tool, and I wouldn't reject out of hand that I
would use them, but I do respect agencies' expertise on where they should be
focused and setting priorities. My style tends to be collaborative.
Q: Where do you come down on the cost-benefit approach to determining
whether a regulation's benefits balance its costs?
Dudley: I've never been a proponent of strict cost-benefit analysis. It's
important to inform decisions, but it's hard to put prices on both the cost and
benefit side. When determining the need for a regulation, it's good to look at
how people are interacting in the marketplace. Is the federal government the
appropriate place to handle something, or are state and local governments
better able to handle the issue? And then we need to look at different
alternatives.
If the core problem is that people don't have information, then banning
something or mandating something might not address that problem as well as
providing information. It's about understanding the best available evidence.
Cost-benefit analysis comes into play by looking at the distributional impacts.
Who is affected? Who receives benefits? Questions of choice and responsibility
come in there, too. What kind of incentives are you providing?
Q: What do you mean that some regulations are best handled at levels other
than the federal government?
Dudley: Autos are in a national market and cars cross state boundaries -- that's
something where it makes sense for federal government to have the lead role
in regulating. And local or state governments might be better able to address
water-quality needs those may depend on whether or not something crosses
state borders or affects interstate commerce. And local communities have
different preferences or needs they can address better.
Q: What progress is being made in reducing the government's regulatory
paperwork burden as required by the Paperwork Reduction Act?
Dudley: The most recent report showed that there's an 8 percent increase in
burden on citizens from 8.24 billion hours to 8.92 billion hours. There are a
variety of different factors that went into that, but the principal driver of new
burden was adjustments in the factors that agencies used to estimate burden in
order to make them as accurate as possible.
Q: How are the staff here adjusting to working with someone "ten times worse"
than her predecessor?
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Dudley: I worked with many people who were here when I worked here before.
The staff is enthusiastic about the office, and so am I. I have the best staff in
the government and the best job in the government. Certainly the one I've
always thought was most interesting.
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Federal Times
January 12, 2004 Monday
HEADLINE: Administration Tightens Rules for Regulators
BYLINE: By MOLLIE ZIEGLER
BODY:
Federal regulators are heading into 2004 with a lot on their plate after
logging a banner year in terms of regulatory output.
This year, they will develop new guidelines for food products and hybrid-
electric cars if they follow the suggestion of the Office of Management and
Budget. They also will begin working under new OMB rules designed to
make their regulations better able to withstand outside challenges.
Last year began with the release of the annual report detailing regulations'
costs and benefits to the nation. The White House's Office of Information
and Regulatory Affairs (OIRA) reported as much as $230 billion in benefits
from regulations, at a cost of $42 billion.
Included in that January 2003 report, however, was new guidance that
requires agencies to perform more analysis of the regulations they create.
Now, agency managers must compare alternative regulatory plans and
calculate more precisely the costs and benefits of regulations.
Public interest groups said the changes were intended to give the
administration more control over the regulatory process. "OIRA has shifted
gears over the last several years and taken the report in directions Congress
never considered," said Reece Rushing, a policy analyst at the Washington
public interest group OMB Watch, in his comments on the report.
President Bush railed against regulatory zeal during his campaign for the
White House. But reports released in 2003 showed record regulatory activity
and staffing under the Bush administration. The Federal Register reached a
record 75,606 pages of federal regulations in 2002, up from 74,528 pages in
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2000, according to a report from the Cato Institute, a libertarian think tank in
Washington. However, the number of regulations promulgated during 2002
went down by 322 over the previous year, according to the study. EPA and
the Transportation, Treasury, Agriculture and Interior departments
accounted for half of the regulations.
The government budgeted more than $30 billion on administrative and
staffing costs for regulatory activity in 2003, according to a July report by
the Mercatus Center at George Mason University, an Arlington, Va.,
economic research institution that promotes limits on regulatory activity.
That represents an increase of nearly 15 percent over 2002.
Susan Dudley, who co-authored the report, said increased regulatory
spending was in response to terrorist attacks and corporate accounting
scandals, with most of the increase due to staffing increases at the Homeland
Security Department, Transportation Department and Securities and
Exchange Commission.
Also last year, OIRA worked with the Environmental Protection Agency to
speed up the creation of a regulation that limits emissions from off-road,
diesel-powered farm and construction vehicles. It was the first time that
OIRA - created to rein in regulations - worked with a regulatory agency to
speed a regulation.
8 Billion Hours of Paperwork
The paperwork burden that agencies place on the public has also grown
under Bush. The General Accounting Office announced in April that
agencies failed to rein in paperwork in the eight years since Congress passed
the Paperwork Reduction Act. Citizens and companies spent a record 8
billion hours and $230 billion in 2002 complying with federal paperwork
requirements.
Treasury, Health and Human Services, Transportation, Labor, the
Environmental Protection Agency and the Securities and Exchange
Commission were deemed the worst offenders. IRS' record was "dismal"
according to Doug Ose, R-Calif., chair of the Government Reform
Committee's subcommittee on energy policy, natural resources and
regulatory affairs. With 774 forms used to collect data, the IRS imposes 6.5
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billion hours of paperwork on the public. The agency made only three
changes to reduce paperwork in 2002 and 2003.
The increases led Ose to call for the creation of a regulatory budget, limiting
the amount of regulations that agencies could pass each year.
On the other hand, regulatory activity remained flat in one area where
observers expected an increase. Critics of the 2002 Data Quality Act
predicted that agency managers would be flooded with public challenges to
the quality of data used in making regulations. While the number of
challenges did not spike, the substantive nature of the challenges was
surprising to some.
The complaints filed this year were "sophisticated and took a long time to
develop," said Wendy Wagner, an environmental law professor at the
University of Texas Law School.
Only two dozen challenges were received by agencies last year, not counting
challenges received by the Transportation Department questioning
information on individuals' driving records. However, some public interest
groups and industry advocates complained about the accuracy of specific
studies used as the basis for major regulations.
Even more surprising was the use of the data quality challenge by liberal
senators and environmental groups. The Army Corps of Engineers and EPA
were the targets of data quality challenges intended to strengthen regulations
that were filed by Public Employees for Environmental Responsibility, as
well as Sens. Jim Jeffords, I-Vt.; Paul Sarbanes, D-Md.; Barbara Boxer, D-
Calif.; and Frank Lautenberg, D-N.J.
Peer Review
Agencies soon will begin operating under guidelines OMB issued in August
to help make regulations more resistant to challenge. Due to go into effect
early this year, peer-review guidelines require agencies to have their
regulatory studies, methods and models reviewed by independent scholars.
While many government watchdogs support the move, which puts
government scientists under the same system as their colleagues in
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academia, some worry the move was an attempt by the administration to
gain more control over regulatory activity.
"It's difficult to argue against peer review, but these new guidelines are a
wolf in sheep's clothing," said Sean Moulton, senior policy analyst at OMB
Watch. He said the administration would stack peer review panels with
scientists opposed to health and environmental regulations.
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Regulation
September 22, 2005
LENGTH: 1577 words
HEADLINE: The regulators' growing budget.
BYLINE: Dudley, Susan E.; Warren, Melinda
BODY:
IN 1978, MURRAY WEIDENBAUM OBSERVED IN this magazine that
"government regulation of business is one of the growth areas of the U.S.
economy" ("On Estimating Regulatory Costs," May/June 1978). He
attempted to measure that growth by examining the costs incurred by the
federal government to operate regulatory agencies.
The Center for the Study of American Business, which he started at
Washington University (later renamed the Murray Weidenbaum Center on
the Economy, Government, and Public Policy) has continued over the years
to track the growth in the administrative costs of regulation. Today, the
Weidenbaum Center has teamed up with the Mercatus Center at George
Mason University to continue Weidenbaum's path-breaking analysis. Their
annual reports examine the Budget of the U.S. Government presented by the
president to Congress to track the expenditures of federal regulatory
agencies and the staff needed to run them. Last June, the centers released the
27th annual "regulators' budget" report, entitled Upward Trend in Regulation
Continues: An Analysis of the U.S. Budget for Fiscal Years 2005 and 2006.
It is interesting to compare today's regulators' budget with the data that led
Weidenbaum to remark on the growth in regulation in 1978. He examined
the budgets of 41 regulatory agencies; today, we track 68 regulatory
departments and agencies. He estimated that the federal regulatory apparatus
employed 215,024 full-time people in fiscal year 1979; today we estimate
that it employs 242,376. Most dramatic, though, is the almost 10-fold
increase in the total regulators' budget: Weidenbaum pegged it at $ 4.8
billion in 1979, and in fiscal 2006 it will reach $ 41.4 billion.
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TYPES OF REGULATION When Weidenbaum began the process of
putting together an analysis of the costs and staffing of federal regulatory
agencies, he explicitly made some distinctions between regulation and other
powers of government. Activities that are not considered regulatory in the
annual report include tax power, credit power, procurement power, and
transfer payments. Although the agencies involved in those activities issue
regulations that affect the private sector, their end purpose is not to regulate
but to aid in such activities as collecting taxes and distributing revenue.
Weidenbaum separated the data into two major categories: economic
regulation (e.g., regulation typically carried out by such agencies as the
Securities and Exchange Commission and the Federal Trade Commission)
and social regulation (e.g., regulation typically carried out by the
Environmental Protection Agency and the Occupational Safety and Health
Administration). Regulations were then broken down into such
subcategories as consumer safety and health, energy and environment, etc.
As regulatory priorities have changed, subsequent reports have identified
additional regulatory subcategories and have expanded coverage. We now
divide the social regulation category into six subcategories:
Consumer safety and health
*
Homeland security
Transportation
Workplace
Environment
*
Energy
The economic regulation category is divided into three subcategories:
*
Finance and banking
*
Industry-specific regulation
General business regulation
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CONTINUING GROWTH The latest report tracks both staffing and
spending from 1960 to the present. Figure 1 graphs the changes in inflation-
adjusted regulatory expenditures since 1960 (using 2000 dollars). While
spending has generally increased over time, the rate of growth has varied
depending on the philosophies of elected officials in the executive and
legislative branches of the federal government. In the early years of the
Reagan administration, for example, regulatory expenditures declined.
[FIGURE 1 OMITTED]
The 1960s witnessed a growth in regulatory expenditures. Total spending at
federal regulatory agencies increased by $ 3.2 billion between 1960 and
1970. This represents a real annual growth rate of 8.6 percent and a total
increase of 127.1 percent over the decade. Most of that growth--more than $
2 billion--occurred in social regulatory agencies (which experienced a real
increase of 136.9 percent in annual budget over the decade). Economic
regulatory programs expanded more slowly, by $ 0.9 billion or 107.8 percent
over the period.
The 1970s brought increased expenditures on federal regulation. Over that
decade, real spending at regulatory agencies grew by $ 7.7 billion, or 134.5
percent (8.9 percent per year on average). Social regulatory expenditures
continued to grow rapidly and increased by $ 7.2 billion (181.2 percent)
while economic agencies showed a much smaller increase of $ 0.5 billion
(29.2 percent). Most of the growth occurred in the early part of the decade,
when several of the significant social regulatory agencies (particularly the
EPA and OSHA) were formed. During the 1970s, social regulations grew
from under 70 percent of the total regulators' budget to over 80 percent.
Double-digit increases in the first three years preceded much slower growth
in the budgets of both social and economic regulatory agencies during the
latter part of the decade.
This slower rate of growth continued into the early 1980s. Total annual
expenditures on regulatory programs declined by 5.2 percent between 1980
and 1985, but rebounded in the second half of the decade, increasing by 31.1
percent overall between 1985 and 1990. Annual spending on regulatory
activities at the end of the decade was $ 3.3 billion more (in 2000 dollars)
than at the beginning. Throughout the decade, spending on economic
regulation increased at a faster rate--36.5 percent between 1980 and 1990--
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than spending on social regulation, which grew by 21.8 percent over the
same period. On an annual basis, inflation-adjusted spending increased by an
average of 2.2 percent per year over the decade.
Regulatory spending continued to increase in the 1990s, for a total increase
of 50.9 percent over the decade, or $ 8.5 billion. The budgets of agencies
administering social regulation increased by 53.3 percent over the decade,
and those related to economic regulations increased by 40.6 percent. The
first few years of the decade witnessed greater percentage increases than the
later years--an average or 8.1 percent per year between 1990 and 1992,
compared to an average of 3.2 percent per year between 1992 and 2000.
Regulators' budgets actually declined in real terms in 1994 and 1996. On an
annual basis, the real rate of increase averaged 4.2 percent over the decade.
Between 2000 and 2005, budgets devoted to regulatory agencies increased
41.6 percent in real terms. The FY 2006 budget requests that Congress
allocate $ 41.4 billion for regulatory activities, up from $ 39.5 billion in
2005. This reflects a 4.8 percent increase in outlays directed at writing,
administering, and enforcing federal regulations. The regulators' budget is
growing at a faster rate than other nondiscretionary spending, which will
increase only 2.1 percent in 2006. Since 2000, we have witnessed an
increase in real spending on regulatory activities of $ 11.6 billion. Though
lower over the past two years, the annual average increase of 6.5 percent for
the 2000--2006 period is the highest since the 1970s, when Weidenbaum
first began tracking on-budget regulatory costs.
Regulatory activities related to homeland security get the largest increases in
the FY 2006 budget; the Department of Homeland Security is budgeted to
receive an additional $ 1.1 billion in regulatory funding compared to last
year. The regulators' budget also includes large increases in outlays at the
EPA ($ 250 million), the Food and Drug Administration ($ 191 million), and
the Patent and Trademark Office ($ 351 million). Staffing at the federal
regulatory agencies is expected to reach an all-time high of 242,376 in 2006.
OTHER COSTS Of course, as Weidenbaum observed in his 1978
Regulation article, regulations impose social costs on individuals and
businesses beyond the direct tax dollars expended to write and enforce them;
the on-budget costs merely provide insights into the trends in magnitude of
the hidden tax. At that time, he estimated that, for every dollar of on-budget
regulatory cost, the private sector spends $ 20. In contrast, current
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comparisons suggest that for every dollar of direct budget expenditure
devoted to regulatory activity, the private sector (individuals as consumers,
investors, workers, etc.) spends $ 33 in compliance. (This is based on a
comparison of the regulators' budget in 2000 with the Small Business
Administration's estimate that the cost of federal regulation on American
businesses, workers, and consumers in 2000 was $ 843 billion per year.)
Weidenbaum's 1978 observation that "government regulation of business is
one of the growth areas of the U.S. economy" continues to hold true today.
The dramatic increase in agency staffing and spending over the last few
years suggests that we are not likely to see a decline in the regulatory state,
or the hidden tax regulations impose, in the near future.
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The human costs of EPA standards
Gramm, Wendy L, Dudley, Susan E. Wall Street Journal. (Eastern edition).
New York, N.Y.: Jun 9, 1997. pg. A.18
Though a quarter of the nation is unable to achieve the U.S. Environmental
Protection Agency's current standards limiting ground-level ozone, the
agency is busily trying to make its standard even more demanding. The
proposed regulation under the Clean Air Act has sparked heated debate --
and well it should. The EPA itself predicts that the new regulation's costs
will far exceed its benefits. What's more, the agency's science advisers found
that the proposed level would not be significantly more protective of public
health than the current level.
Anyone familiar with federal regulation should not be surprised to find that
the EPA is proceeding with a rule that will impose huge costs on society
while providing little in the way of health or environmental benefits. What is
surprising, however, is that the EPA's proposal would actually harm public
health.
Some background: Ozone is a gas that occurs naturally in the earth's
troposphere and stratosphere. It is also created when sunlight reacts with
nitrogen oxides and volatile organic compounds. Tropospheric (ground-
level) ozone is the primary constituent of urban smog and is associated with
respiratory problems. But ozone, whether in the troposphere or stratosphere,
also screens harmful ultraviolet rays.
In November, the EPA proposed to reduce the allowed level of ground-level
ozone by about 10%. The agency plans to issue a final rule in July. In its
regulatory impact analysis, the EPA acknowledges that the costs of partially
attaining the new standard (between $600 million and $6.3 billion per year)
exceed the health and welfare benefits (between zero and $2.1 billion per
year).
It's astonishing enough that the government is proposing to impose burdens
on the American people that, by its own acknowledgment, aren't justified by
the benefits. But in our view the EPA's estimates are far too optimistic. We
estimate that the full costs of implementation could exceed $80 billion per
year and cause public health and welfare to decline.
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The EPA defends its proposal, citing the benefits it is expected to provide to
children and adults suffering from asthma and other respiratory diseases.
Asthma is a disturbing health problem, particularly since reported cases have
been increasing in recent years (by 45% in the past decade), one-third of its
victims are children, and it is most severe among the urban poor. But is air
pollution to blame? It seems unlikely, given that air quality has been steadily
improving for decades. Ozone levels declined 6% on average between 1986
and 1995.
Moreover, even by the EPA's estimates, the proposal's expected benefits to
those afflicted with asthma and other respiratory diseases are small,
compared with the huge costs. The EPA's estimates of the partial costs of
attaining the proposed standard exceed what the federal government spends
on programs aimed directly at protecting children's health. For example, the
combined 1998 budgets of the National Heart, Lung and Blood Institute, the
National Institute of Child Health and Human Development, and the
National Institute of Environmental Health Science total $2.4 billion.
Even worse, though, the proposal ignores the health benefits of ozone. Due
to ozone's screening effect on harmful ultraviolet-B radiation, the proposed
reduction in ozone levels would increase malignant and nonmelanoma skin
cancers and cataracts, as well as other UV-B-related health risks. This
doesn't mean more ozone is always better. It does mean that if the EPA
really cares about public health, it should take these trade-offs into account.
Instead, it explicitly ignores information on the offsetting health benefits
caused by the effect of ozone on ultraviolet radiation. Based on studies the
EPA conducted to support its stratospheric ozone rules, it appears that these
benefits could dwarf the benefits the EPA attributes to the proposed ground-
level ozone standard.
A Department of Energy analysis indicates that the proposed change in the
ozone standard could result in 25 to 50 new melanoma-caused fatalities
annually. That suggests the proposal will wind up killing people (since the
EPA's best estimate of the health benefits of the proposal does not include
any reduction in fatalities).
The Energy Department study also estimated that the new standard would
cause 130 to 260 incidences of cutaneous melanoma, 2,000 to 11,000 new
cases of nonmelanoma skin cancer and 13,000 to 28,000 new incidences of
cataracts each year. To compare these nonfatal health effects, we used the
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EPA's approach to convert them to dollars. We estimate that the negative
health consequences of this proposal will exceed the EPA's most optimistic
estimate of the health benefits by more than $300 million per year.
The EPA believes that only public health concerns -- not the financial costs
of implementation -- may be considered when setting these standards. But
regulatory costs themselves affect public health. The rule would make goods
and services more expensive, causing disposable family income to decline. It
is widely recognized that health improves as family incomes rise. A study by
economists at the Office of Management and Budget found that every $9
million to $12 million decline in aggregate personal income is associated
with one statistical death. Using this income-health relationship, the EPA's
partial cost estimate implies an increase in mortality in the range of 50 to
700 deaths each year. If our estimate of the full costs is accurate, the
financial costs of this rule could result in more than 7,000 deaths per year.
Of course, premature mortality is just one negative consequence of lower
incomes. Recent studies suggest that poverty may be a more important risk
factor for asthma than air quality, so the huge costs of this rule may well
increase the very disease it is targeted at reducing. Thus, even if asthma were
the only public-health concern, the proposal would not stand up to scrutiny.
The potential benefit for those afflicted with the disease is very small, and
the costs of the rule will put more families in poverty and drain society's
resources from more effective remedies.
Even the EPA's own rosy estimates suggest that the proposal will result in
only small improvements in health for a small population of sensitive
individuals. For everyone else, the proposal will mean onerous financial
costs, a greater risk of skin cancer and perhaps even an increase in the
prevalence of asthma. The EPA has a responsibility under the Clean Air Act
to protect public health and welfare. If the agency goes ahead with this ill-
advised rule, it will fail to protect either.
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