Bush Nominates Anti-Regulatory Zealot to Head Regulatory Policy (9/8/2006)

The White House has nominated Susan Dudley to become the administrator of the Office of Information and Regulatory Affairs - "an obscure but powerful office where she would have the power to gut the federal government's very ability to protect the public."

You may have thought the largely voluntary US system for the regulation of GMOs somewhat lax, but here's what Dudley thinks, "Unscientific fears, fanned by activists and short-sighted government policies, have led to a regulatory framework that singles out genetically modified crops for greater scrutiny and even prohibition."

Bush Nominates Anti-Regulatory Zealot to Head Regulatory Policy
OMB Watch, 8 August 2006

The White House has nominated Susan Dudley, an anti-regulatory extremist from the industry-funded Mercatus Center, to an obscure but powerful office where she would have the power to gut the federal government's very ability to protect the public.

Dudley would become the administrator of the Office of Information and Regulatory Affairs, an office in the White House Office of Management and Budget with enormous authority over environmental, health, and safety regulations.

<p>Dudley would replace John Graham, who left the office in February to become dean of the RAND Graduate School. During Graham's time in office, regulatory agencies ranging from the Occupational Health and Safety Administration (OSHA) to the Food and Drug Administration have seen their policies weakened and their ability to develop new safety and health standards diminished.

Nominating Dudley to this office is a signal that the White House is not interested in reversing course. Through numerous comments on regulations and articles on regulatory policy, Dudley has displayed hostility to environmental, health and safety protections. She has opposed important health and safety standards such as limiting arsenic in drinking water and installing advanced air bag technology in automobiles.

In her own words:

On Davis-Bacon: "The prevailing wage requirement does not offer net benefits to society, but rather reflects a transfer from low-skilled and low-wage workers to skilled and union workers . . . . There is no economic justification for a federal role in defining construction practices and determining wages, as required by the Davis-Bacon Act."

On OSHA regulation generally: "In the case of OSHA regulation, empirical analysis has not found strong evidence that OSHA regulations have had a substantial impact on worker health and safety . . . . OSHA's regulations are costly for the economy. According to recent estimates, OSHA regulations contribute nearly one-half of the total direct cost of workplace regulations--around $41 billion per year in 2000. MSHA regulations cost another $7.4 billion. It is unclear whether these costs produce commensurate benefits. Econometric studies have generally failed to find evidence that OSHA regulations have had a significant impact on job safety."

On arsenic in the drinking water: The Clinton standards were "an unwelcome distraction from the task of protecting the water supply. . . . While [EPA] should share information about arsenic levels and hazards, it should not impose its judgment, based on national average costs and benefits, on individual communities as to how best to invest in their own public health."

On food safety: "Unscientific fears, fanned by activists and short-sighted government policies, have led to a regulatory framework that singles out genetically modified crops for greater scrutiny and even prohibition. . . . Policymakers regulating agricultural biotechnology face pressure from well-organized activists to constrain the new technology. Large biotech companies do not speak out aggressively against unscientific policies, either because they don't dare offend the regulators on whom their livelihood depends, or because regulations give them a competitive advantage."

Again on GM crops: "In spite of hundreds of thousands of field tests as well as peer-reviewed research papers, no evidence indicates the presence of any unique environmental or health risks from the products of gene-splicing."

On environmental right to know: "Informing the public about hazards in their community is an intuitively desirable social goal. . . . However, this does not argue that any information on chemical releases is desirable. . . .[I]t is important to recognize that information is costly to produce, and depending on how it is communicated and received, may confuse, rather than inform. Even if we determine that information on the release of certain chemicals has a net social value, we cannot assume that more frequently reported information, or information on a broader range of chemicals would be more valuable. Only when the social costs of information are weighed against the social benefits can a determination be made regarding what and how much information is optimal."

On investor right to know: "Concerned that investors are not receiving the information they need regarding the tax consequences of investing in mutual funds, the SEC required mutual funds to report standardized after-tax returns along with the standardized pre-tax returns they already report. . . . The SEC's only stated criterion in developing the rule is that the information be deemed 'helpful' to investors in making investment decisions. But the SEC has no way of identifying information that meets this standard except by observing what information is brought forth by the private sector. It has not identified any market failure that would warrant regulatory action."

On privacy of consumer financial information: "The implicit premise of the rule is that individuals and firms cannot come to a mutually satisfactory agreement as far as privacy is concerned without resort to government assistance. Indeed, if individuals truly value their privacy, and firms desire to maximally satisfy their customers, then a meeting of the minds ought to be achievable without resort to compulsory regulations."

On improved air bag standards: "NHTSA estimates that air bags have reduced fatalities in frontal crashes by about 30 percent. Moreover, judging from vehicle manufacturers' pre-regulation actions and ongoing advertising, which lists dual air bags as a positive attribute in new vehicles, consumers appear to prefer vehicles equipped with air bags. These facts, however, are not sufficient to justify federal regulation requiring air bags. If air bags protect lives, and consumers demand them, it is reasonable to assume that automobile manufacturers would have installed air bags in the absence of federal requirements to do so."

On fuel economy: "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 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)."

If Dudley is confirmed, she will have the opportunity to weaken the regulations she has spent her career criticizing, a prospect that could be devastating for the individuals who rely on the federal government to meet national needs, like providing safe drinking water, responding to global warming, or keeping workers safe on the job.

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